this guy knows stuff....
Getting Out Here Would Be the Wrong Move
By James J. Cramer
05/07/2003 10:59 AM EDT
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Nothing's the matter with taking a few profits. That works. Nothing's the matter with saying that there are too many bulls. That makes sense.
But abandon this market? No way. In fact, what I think has happened here is that the mutual funds are beginning to get a lot of money in, the fundamentals are improving across the board, and the 10-year Treasury is the repository of way too much money instead of the stock market.
I know my colleague on Street Insight, Doug Kass, thinks there is the possibility for a major top here. And I know that the idea of shorting Citigroup (C:NYSE - news - commentary - research - analysis), which has just had a huge run, certainly is worth doing for a trade, if you have a thesis for it. I don't.
However, I am sticking by my road map, which says we can have a pullback, but it won't be major and will just be a pause that refreshes. Plus, I am adamant that the hedge funds still are predominantly bearish. I talk to dozens of them. I am in a bunch. I am not making this stuff up because I am a bull.
All this doesn't mean I am not taking some profits. I just blew out of 2,000 shares of J.P. Morgan (JPM:NYSE - news - commentary - research - analysis) because I was being a huge pig, having just seen the stock run up 50% without taking anything off the table. Bulls make money, bears make money, pigs get slaughtered.
But if I hadn't owned so much J.P. Morgan and hadn't had such a huge gain for my Action Alerts PLUS account, I don't know if I would have bothered to sell. I might just have waited until it dropped a couple points so I could buy more!
We are in one of those moments when your inventory and your bases control your view. If you didn't participate in the run or if you are not up much at all -- or, heaven forbid, you are down -- you are praying for a decline. If you participated, you are doing what is prudent: Taking a little profit after a huge run. Your frame of reference depends upon how you are doing.
That makes me still bullish. |
