CNBC’s Jim Cramer has been noticing some disconcerting activity on social media as earnings season continues to drive the rally.
“I want to shine a light on something I saw in my feed on Twitter, something that’s actually not a good sign … for this red-hot, scorching bull market,” the “Mad Money” host said. “It concerns me, and I want it to concern you.”
On Wednesday, Advanced Micro Devices, the computer chip maker, delivered an earnings report that missed Wall Street estimates for its profitability forecast, a key growth driver.
For years, Cramer saw the company as a sub-par competitor to Intel, but recently, AMD’s new leadership started turning things around, tying the company to the lucrative data center and gaming sectors.
But “the party ended” with the chip maker’s latest quarter, Cramer said. The success of its new product lines was questionable, and rival semiconductor maker Nvidia posed a clear challenge to AMD’s data center and gaming businesses.
As such, Cramer criticized AMD for losing steam and sending ripples of worry across a variety of tech-related market sectors. But he didn’t like the response he received.
“I went and looked at my feed today and what did I see? A very sizable number of AMD followers criticizing me for being short AMD and trying to blast it down with negatives,” Cramer said.
Cramer was less concerned about the “short” accusations; he’s contractually forbidden to short or bet against stocks, or even own stocks that are not those of his employers.
“But when I see a host of people saying that AMD’s going down because Jim Cramer’s saying negative things about it, I need to warn you about something,” he said. “This is called ‘homer’ behavior, raw home-team booster-ism that lacks any sort of objectivity or rigor and has no place in the stock market. This is how you lose money, people.”
Cramer hadn’t seen this kind of behavior in over 10 years, and it served as a sign to him that investor sentiment in the market is changing — and it’s changing for the worse.
Rooting for effort instead of performance is dangerous when it comes to stock-picking and investing, he said.
“People, listen to me: If a company misses estimates, it’s not my fault that its stock goes down,” he argued. “This is business, not personal. Managements do get it wrong. Business can be difficult. I promise you I’ll monitor Twitter for this kind of behavior for other stocks, but only if you monitor your own behavior to be sure that you, too, aren’t rooting too much for the home team and forgetting that, in this business, there is no home team. Just dollars and cents. Common sense.”
Disclosure: Cramer’s charitable trust owns shares of Nvidia.
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Source: Tech CNBC
Cramer fights back against his critics on Twitter for making stock-picking personal