Who's Selling ? Jim Cramer -
Need to add in overseas investors & people with margin calls....
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Who's Doing the Selling?
By James J. Cramer
09/20/2001 01:14 PM EDT
So if I am not selling, and you are not selling, and they
aren't selling, and the companies are buying hand over
fist and nobody is offering any new stock, when does
supply balance with demand?
I keep thinking about that issue because it is obvious that someone is selling, and
the reason why we are continuing to go down is that the selling is extraordinarily
lead-footed and indiscriminate.
Here are some theories about who is doing the selling.
1. Mutual funds that have lost key personnel and are battling redemptions. The
same mutual funds that always say they have no redemptions are all saying they
have no redemptions. I am beginning to believe that no one can tell the truth at
these places, frankly.
2. Individuals who are afraid of the Lucent (LU:NYSE
- news - commentary - research) phenomenon.
That's where you have all of your nest egg in your
company's stock and you think it could go away.
These people are diversifying into bonds. Can't
criticize them.
3. People who need money. As long as the great
'90s boom went on, nobody needed money. But we
always knew that money was there if we needed it.
People who viewed the equity market as an
extended bank are now letting stocks go to raise money because they need the
money. They are worried that they are going to lose their jobs. Given the incredible
number of layoffs announced since Sept. 11, who can blame these people?
4. Insurance companies. Insurers who may have owned equities as a percentage of
your premiums that they are investing have to pull out to meet the demands -- the
once-in-a-lifetime demands from the attack.
5. Finally, the hedge funds. Yes, the hedge funds, who are not shorting, but raising
cash in case there is another attack. They want to be able to buy, not sell. In their
world, you can't buy before you have sold. Read my Cisco/Trader's Market piece to
see how they are most likely playing this market.
Random musings: I wish Washington seemed more inspired and less worried.
But then again, I wish Winston Churchill were still alive, or Reagan were still
president.
*************by the way, Cramer is a huge Al gore supporter - for him to want Ronal Reagan is exceptional....************ |
