With Washington lawmakers still at odds over health care and tax reform and unpredictable agents like North Korea seemingly gaining power, it can be tough for Jim Cramer to stay bullish.
“It’s really hard to stay positive about this market in the face of conventional wisdom that is so darned negative,” the “Mad Money” host said.
But while Cramer has written off Congress’ gridlock and saved some cash in case the hermit kingdom somehow prevails, Wall Street’s increasingly skeptical outlook on stocks escapes him.
Analysts and investors alike have criticized equities for being overpriced, particularly Cramer-faves like FANG, the stocks of Facebook, Amazon, Netflix and Google, now Alphabet, and Nvidia, after which the “Mad Money” host named one of his dogs.
Cramer agreed that the FANG stocks have floated into “overvalued” territory, particularly after their earnings reports, but thought people were being too negative on Nvidia, one of the market’s hottest names.
“Here, again, though, you need to understand that the the key to this bull is its rotational nature,” Cramer said.
The “Mad Money” host pointed to the cable bull market lifting on news of a possible takeover of Charter Communications by SoftBank, drug stocks getting a boost despite a weaker-than-expected quarter from Bristol-Meyers Squibb, and money flowing out of high-flying cloud stocks into cheaper tech stocks like Texas Instruments, Intel, Microsoft and Qualcomm.
“As far as the aging and allegedly senile nature of the bull? I think that’s the top down talking,” Cramer said. “I analyze the actual stocks [from] the bottom up and things look OK.”
Still, Cramer’s positive notions fall largely on deaf ears, so the “Mad Money” brought up an old anecdote from 1929, just before the Great Depression, to support his point.
“Every book about the great crash of 1929 mentions how the shoeshine boys around the New York Stock Exchange were playing stocks with borrowed money right up until the crash,” he said. “That kind of thing is cited as the sure sign of a top.”
“In ’29, it was safety last. Now, it’s safety first,” Cramer said. “In the end, maybe that’s what’s really keeping stocks up. Maybe that’s what’s propelling us higher. The bottom line? The skepticism has been so darned thick that until we get others naming their pets after cloud plays or touting stocks while shining shoes, I’m going to remain constructive on the future, the future of the best-performing asset class, the future of equities.”
Disclosure: Cramer’s charitable trust owns shares in Facebook and Alphabet.
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Source: Tech CNBC
Cramer: Why I'm still positive on the bull market despite all the negative chatter