Homepage / Investment / Cramer: Bull markets 'die on euphoria,' and we're one step away
How technology is helping transform BMW's business model French leader Macron meets May in first official visit to the UK Nintendo is betting on cardboard to boost its newest console Europe stocks seen slightly higher after Wall Street rally Google and Singapore's Temasek are said to be investing in a ride-hailing unicorn Old hands in South Korea bitcoin market unfazed by threats of ban Tillerson says Russia is not implementing all North Korea sanctions, may be frustrating some steps 2017 marked a turning point for capital flows, China currency regulator says Facebook attacked by critics over 'fake news' — but outside the US this time Instagram users are promoting economic policy for pay China is revealing its 2017 GDP. Here's what analysts expect Exercise? I get more than people think, Trump says iOS update will let users decide if they want Apple to slow down older iPhones or not, Tim Cook says South Korea is considering shutting down all virtual currency exchanges, regulator says Cramer Remix: The real ‘wild card’ behind soaring retail revenues Asian shares look set to track US gains; China data ahead Cramer: Apple's Tim Cook credits most of $350 billion plan to repatriation tax holiday Apple is giving $2,500 stock awards to some employees Fashion is getting personal as brands battle for shoppers Google is missing out on billions of dollars by not having an app store in China Steve Ballmer deserves his due as a great CEO Early reviews heap praise on Tesla's Model 3, with a few caveats Apple will boost its spending on data centers by $10 billion over the next 5 years Stock market's rapid January rise already surpassing some full-year forecasts on Wall Street Ripple co-founder loses $44 billion on paper during cryptocurrency crash SurveyMonkey is expected to go public later this year Stocks will pull back into February, says BTIG. Here's where to hide out Bitcoin tests important price level after dramatic plunge Visa CEO: We won't process transactions in bitcoin, because it's not a payment system Apple plans to open a second US campus as part of $350 billion investment It looks like Apple is bringing back home nearly all of its $250 billion in foreign cash Johnson & Johnson trying to sell its diabetes care business to Chinese buyers for up to $4 billion Coming to a grocery store near you: Self-driving shopping carts and smart shelves Apple announces plans to repatriate billions in overseas cash, says it will 'contribute' $350 billion to the economy over 5 years Bull market may find it hard to keep this momentum, but that doesn't mean it's over Apple could cure tech addiction with a few simple changes to the iPhone Cryptocurrencies will replace 'some or all' paper money, investor James Altucher says Apple and two others could propel the Dow to 27,000 Ex-Cisco CEO John Chambers has a new venture capital firm Rare falling meteor causes bright and loud explosion above Michigan The bitcoin plunge is crushing crypto-craze stocks Dollar will eventually run like bitcoin and other cryptocurrencies, venture capitalist Joyce Kim predicts Billionaire Mark Cuban says the Dallas Mavericks will accept bitcoin next season GE shares crater as breakup won't be a magic bullet for investors Cramer: Investors should heed Bank of America's warning on bitcoin Zuckerberg: Unresolved DACA status is a 'basic question of whether our government works' Facebook, Google tell Congress they're fighting extremist content with counterpropaganda Watch: Facebook, Google and Twitter testify before Congress on extremist content Netflix to beat subscriber expectations for fourth quarter, analyst predicts Day traders tempted by bitcoin's recent plunge are going to 'get slaughtered,' says blockchain entrepreneur Home builder confidence falls from 18-year high, but it's still strong International tourism is booming, but not to the US Rolls-Royce shares jump as commercial marine unit goes on the block Stocks are now in 'complete bitcoin territory,' asset manager says 6 big medical advancements to expect in 2018 The market may still be rosy, but advisors say investors shouldn't get complacent. 21 states sue to keep net neutrality as Senate Democrats reach 50 votes for repeal Google wants to make A.I. easier to use, starting with image recognition IBM shares jump 2% after Barclays upgrade: 'The worst may finally be over' Crude could get to $74 this year, but not before a pullback, says the trader who called the rally Stocks making the biggest moves premarket: GS, BAC, TIF, AAPL, INTC, F & more Apple gets one of its most bullish forecasts yet after Bank of America predicts surge to $1.1 trillion Why the dollar's decline could be here to stay Bitcoin drops below $10,000 with $36 billion of value wiped off in a day as cryptocurrency sell-off deepens Apple gets rare downgrade because analyst believes iPhone cycle is just 'good, not great' As the first bitcoin futures expire, price and volume concerns arise The island paradise that could be China's next strategic transport hub North Korea government-backed hackers are trying to steal cryptocurrency from South Korean users A government shutdown could send investors for a ride, history shows The rise and fall of Bitcoin If your Wi-Fi is acting wonky, your Google Home and Chromecast could be to blame Data analysis is transforming the way trains operate: Here's how World entering 'critical period of intensified risks' in 2018, WEF says German central bank chief says it would be 'appropriate' for ECB to stop its bond buying this year Over $200 billion wiped off the value of cryptocurrencies as bitcoin, ethereum and ripple sink sharply European stocks set to open lower ahead of earnings and inflation data 'Trump is a revolution, unfortunately, and I'm concerned,' Nobel Prize-winner Robert Shiller says Immigration deal distant as leaders try to avert shutdown 20 nations commit to considering more sanctions on North Korea Hong Kong democracy leader Joshua Wong jailed a second time for 2014 protest China sets yuan midpoint at more than 2 year high Only one major cryptocurrency is gaining amid a market-wide sell-off 'Black swan' event could threaten China's stability, regulator warns US Senate advances bill to renew NSA's internet surveillance program Bitcoin and ethereum suffered massive drops, but many cryptocurrencies are faring even worse Cramer Remix: The prospect of stock buybacks should calm fears of a major market decline Cramer's charts suggest Amazon, Alphabet, Netflix and Nvidia's stocks might be about to pull back Asian stocks poised for declines following Wall Street reversal; bitcoin stumbles YouTube is trying to clean itself up by making it much harder for small video makers to make money Cramer reveals the biggest winners and losers from the JP Morgan Healthcare Conference Cramer's 5 cardinal rules of engagement with the bull market Amplify ETFs CEO thinks blockchain will transform investment leaders Travis Kalanick discussed compensating the driver he berated in that viral video Dunkin' debuts a mobile order drive-thru at its new concept store Ethereum crashes 30 percent on Coinbase in 24 hours; Bitcoin tumbles 25 percent Ferrari plans an electric supercar that would compete with Tesla Intel, AMD draw scrutiny from Congress over chip security flaws Initial coin offerings are the 'Wild West' of start-up land — here's how one investor spots a scam Ripple tumbles more than 40 percent to start 2018 Consumer privacy laws are not to blame for health care's biggest mess


Cramer: Bull markets 'die on euphoria,' and we're one step away

After the Federal Reserve raised interest rates on Wednesday, CNBC’s Jim Cramer wanted investors to get a feel for the state of the U.S. economy.

“Higher rates can kill the bull if they make bonds competitive with the return you get from stocks. We aren’t there yet,” the “Mad Money” host said. “A quarter-point rate hike from these very low levels won’t really do much damage to either the economy or the stock market.”

Cramer used a quote from the late legendary investor, Sir John Templeton, to explain the current state of affairs: “Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.”

“We’re currently in stage three. We’re in optimism,” Cramer said. “We’re optimistic about 2018. We’re optimistic that the Fed won’t kill the economy, optimistic that inflation’s under control, optimistic that more jobs will be created, augmented by the tax bill, and I’m optimistic that stocks can keep running.”

Yet amid all this optimism, there isn’t much euphoria, the “Mad Money” host said. There are still plenty of people skeptical that the stock market’s gains can last. There’s still money on the sidelines.

Cramer argued that the most euphoric part of the market is in the world of cryptocurrencies like bitcoin, which Fed Chair Janet Yellen said on Wednesday was still a “very small” segment of the payment system.

“I get the sense that when — not if, but when — they become big potatoes, the Fed will have a more forceful policy,” Cramer said. “But right now, Yellen, even after repeated questioning, didn’t seem to take the cryptocurrency bait. She just didn’t think they’re that important.”

But there are still plenty of areas in the market to be concerned about, the “Mad Money” host said.

For one, there aren’t enough high-skilled jobs being created in the United States, as established by Apple’s $390 million investment in fiber optics company Finisair.

The money will fund 500 new jobs at Finisair and refurbish a closed-down facility in Texas, where Finisair will manufacture chips for Apple’s latest devices.

“Without this injection of capital, I think Finisar would struggle versus foreign competitors,” Cramer said. “Good work by Apple.”

Second, long-term interest rates (which are not controlled by the Fed) have remained stagnant even in the face of aggressive bank deregulation by the government, meaning there’s not enough lending. Cramer said he hoped that might change with new Fed Chair Jay Powell.

Most of all, the “Mad Money” host wanted investors to keep an eye out for the signs of euphoria.

“First, if we see a tremendous amount of insider selling and secondary stock offerings that get lapped up by the market, something that happened near the peak in 2000, we might be too euphoric,” he said. “If we see people trading houses like they did back in 2007, we might be too euphoric.”

“If we see investors taking down a gigantic amount of margin debt in order to buy stocks, we might be too euphoric,” he continued. “If we hear outrageous price targets for stocks and start bidding up the prices of companies without any earnings or even any revenues, you better believe we’re too euphoric.”

But none of that is happening, Cramer said. Ten years after a financial crisis shook the economic system to its core, we’re simply optimistic.

And there are still plenty of people in the United States who were so scarred by the 2008 recession that they don’t want to invest ever again, Cramer added.

“Am I giving you permission to party down with stocks? No way,” the “Mad Money” host said. “We need to be careful not to own the stocks of companies that are doing poorly. We need to remain vigilant against euphoria. We should always be willing to take something off the table. No one ever got hurt taking a profit. Build up some cash on the sidelines.”

Disclosure: Cramer’s charitable trust owns shares of Apple.

Questions for Cramer?
Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer’s world? Hit him up!
Mad Money TwitterJim Cramer TwitterFacebookInstagramVine

Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com

Source: Investment Cnbc
Cramer: Bull markets 'die on euphoria,' and we're one step away

Comments are closed.