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I labeled Jim Cramer's advice back in May as a "Sarcasm FAIL". In hindsight, that was completely unacceptable. I apologize for underestimating the sheer size of the failure.
May 4, 2010
Sarcasm FAIL
Given the new consumer optimism, good luck to anyone who wants to short this sector.
Here's an update to the stocks mentioned in the article.
Nordstrom: -28%
Sears: -50%
Guess: -17%
J. Crew: -30%
Gap: -31%
Polo Ralph Lauren: -10%
Coach: -13%
Macy's: -12%
Jones Apparel: -26%
Tiffany: -12%
Average Decline: 23%
Wide diversification is only required when investors do not understand what they are doing. - Warren Buffett
Perhaps Jim Cramer should consider wide diversification. He apparently felt that retail stocks were the new winners of the new world.
Compare and contrast...
Consider Nordstrom (JWN). I mean, what the heck? How can that stock be up this much on absolutely nothing? We have a story about how Sears (SHLD) basically doesn't have a real CEO, and the stock is up 20% in a month. - Jim Cramer, May 4, 2010
How did this bizarro world where nine-tenths of the companies I have followed as a stock picker for the last 20 years are losers and one-tenth are winners? To answer that question, you have to throw out all of the matrices and formulas and texts that existed before the Web. You have to throw them away because they can't make money for you anymore, and that is all that matters. We don't use price-to-earnings multiples anymore at Cramer Berkowitz. If we talk about price-to-book, we have already gone astray. If we use any of what Graham and Dodd teach us, we wouldn't have a dime under management. - Jim Cramer, February 29, 2000
As a side note, you really have to hand it to Sears. It's a pillar of strength once again.
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
-
At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
12 hours ago
4 comments:
Average Decline: 23%
Stag,
Those are some respectable losses on an annualized basis! Looks like Cramer hasn't lost his touch. Good news for the Mad Money followers.
We have to be careful here. 2 years ago we were heckled for speaking poorly of Sears. This could turn into a two front war if Cramer shows up too, lol.
Either you guys are joking or you like to buy high and sell low. Not my style. Lampert and Sears will prove to be fantastic investments over the next 10 years. Over the next 10 minutes? who knows and who cares? - Anonymous
Seen in the comments of this post. Sears was $93.45 that day. 6 months later it hit $28.50. That's a 70% loss. It closed today at $61.03. That's a 35% loss.
By the way, Sears fell 9.24% today.
Sears results weigh heavily on retail stocks
Stag,
Just imagine the leveraged (un)returns that Cramer's hedge fund could have achieved by investing in the "winners of the new world"! Or what if he did a paired trade and went long "winners of the new world" and short "losers of the old world". With leverage of course.
I keep hearing shills say that the U.S. is not Japan. I agree! Unlike the Japanese, we borrowed from foreigners to juice our asset bubbles and ponzi schemes. And importantly, we also didn't protect our domestic markets like Japan did. Far from it, we outsourced our productive capacity.
Somehow, I don't think those high paying manufacturing jobs are coming back unless Americans are willing to work for ~$1/hr.
Savings glut = debt glut. Bernanke is an imbecile, a liar and an enabler & savior of financial fraud.
mab,
U.S. ability to avoid deflation hinges on Fed: S&P
(Reuters) - The United States can avoid deflation if the Federal Reserve moves quickly and decisively to expand the money supply, Standard & Poor's said on Thursday.
The Fed will quickly and decisively buy treasuries before everyone else realizes what a great deal they would be?
Damn. I exaggerated to make a point. I should not have included Jeremy Siegel or the hyperinflationists.
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