Big Names Climb Out of Single Digits
By James J. Cramer
04/23/2003 03:31 PM EDT
URL: thestreet.com
The single-digit midgets seem to be losing some of their brethren of late. Ford Motor (F:NYSE - news - commentary) just climbed out of the singles. EMC (EMC:NYSE - news - commentary) seems to be making a move, too.
What's the impact of the climb? I think that financially, not much. But psychologically it couldn't be bigger. When Ford Motor was hanging around the 7s, there was a lingering feeling that the whole shooting match could come unglued. EMC, while with a much better balance sheet, seemed to be on the ropes, too. Not any more.
These moves to the single digits put a huge dent into the psyche of the market. I know, I speak to hundreds of retail investors through radio, and these two stocks were so over-owned that the pain was highly concentrated.
When you consider that many people saw other widely-held names like Enron and WorldCom and Kmart and UAL cease to exist, they often extrapolated that pain to other single-digit players.
Now that they are rallying, you are seeing people breathe easier. That, too, contributes to the "thaw" that I am seeing among investors. They are getting less fearful.
No, they aren't jumping up and down yet to be in the market. And they aren't thinking that one day we will get back to 1999. But they are healing.
The healing process matters, because there is more than $2 trillion on the sidelines. There's billions in Treasury bond funds that I think will be huge losers.
As the healing process takes hold, that money will come out. It will come into equities. It is all part of the virtuous cycle that has been playing out since the war began.
And it isn't over. It's just getting started. |
