Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I don't totally follow everything Cramer says. I believe he can generate good ideas if you listen to him only only occasionlly. Too much Cramer can be bad for financial health.

Here are some opinions about current events:


http://www.thestreet.com/video/10438426/index.html?puc=newsh...
Print the post Back To Top
No. of Recommendations: 0
I have always treated him as a nutcase, market timer and simply toxic waste to every bit of TMF philosophy. I don't care for his past record and fame. Sorry, I don't intend to hurt anyone's feeling here. Several of my very good and smarter friends like Cramer. So no one should take my comments personally.

While it is true that market can revisit the recent lows and even lower, I think that the stocks that I purchased during the recent lows (I sold my underwear) were at very good prices.

The bottom approaches and passes very quickly. Most good US banks saw the bottom in July. Even before the FEd action they were 20-50% up and now they are at a 52 week high. So many people are waiting for the July lows for banks like WFC. It ain't gonna happen. The bottom has been passed. The Eurpopean banks are in for a deep dive right now. We are probably close to the bottom at this moment (either we have passed it or is nearby). If I am proven right, I will savor the last week for a long time for having called the bottom for the European financials and american private equity.

While I do not say that the recent lows were the absolute bottom in this market but it could have well been so. Anyway, I am very pleased with my recent purchases. I don't have much dry powder left. Any further invesment will come from breaking my ETFs into pieces which I will not hesitate to do for deeply undervalued stocks, if and when the opportunity presents. I may dip into margin too but would avoid raiding my emergency cash, which I think belongs more to my family than me.

-Anurag
Print the post Back To Top
No. of Recommendations: 0
Cramer is a nutcase but sometimes I learn from him. He is my random factor that is in the market.....sometimes you don't know which way he is going to explode.....random factor.....sort of like the Joker in Batman:

http://www.imeem.com/johnrehnald/music/1b2cSQeb/the_joker_wh...


I always use that to remind myself that a random factor in every prediction:

"In finance

The random walk hypothesis considers that asset prices in an organized market evolve at random. Other so called random factors intervene in trends and patterns to do with Supply and Demand distributions. As well as this, the random factor of the environment itself results in fluctuations in stock and broker markets.

Randomness versus unpredictability

Randomness is an objective property. Nevertheless, what appears random to one observer may not appear random to another observer. Consider two observers of a sequence of bits, only one of whom has the cryptographic key needed to turn the sequence of bits into a readable message. The message is not random, but is unpredictable for one of the observers. One of the intriguing aspects of random processes is that it is hard to know whether the process is truly random. The observer can always suspect that there is some "key" that unlocks the message. This is one of the foundations of superstition and is also what is a driving motive, curiosity, for discovery in science and mathematics.

Under the cosmological hypothesis of determinism there is no randomness in the universe, only unpredictability, since there is only one possible outcome to all events in the universe. No event under determinism can be defined as having probability since again there is only one universal outcome.

Some mathematically defined sequences, such as the decimals of pi, exhibit some of the same characteristics as random sequences, but because they are generated by a describable mechanism they are called pseudorandom. To an observer who does not know the mechanism, a pseudorandom sequence is unpredictable.

Chaotic systems are unpredictable in practice due to their extreme dependence on initial conditions. Whether or not they are unpredictable in terms of computability theory is a subject of current research. At least in some disciplines of computability theory the notion of randomness turns out to be identified with computational unpredictability.

Randomness of a phenomenon is not itself 'random'. It can often be precisely characterized, usually in terms of probability or expected value. For instance quantum mechanics allows a very precise calculation of the half-lives of atoms even though the process of atomic decay is a random one. More simply, though we cannot predict the outcome of a single toss of a fair coin, we can characterize its general behavior by saying that if a large number of tosses are made, roughly half of them will show up "Heads". Ohm's law and the kinetic theory of gases are precise characterizations of macroscopic phenomena which are random on the microscopic level."

http://en.wikipedia.org/wiki/Randomness




Rob S
Print the post Back To Top
No. of Recommendations: 0
It is important to not take this concept too far. The rise in stock indices over the last 100 years is not random.

I am planning on reading the following books:

2 books by Nassim Nicholas Taleb: "Fooled by randomness" and "The black swan: the impact of the highly improbable"

you may want to check it out too...
Print the post Back To Top
No. of Recommendations: 0
As stated in my previous reply:

"Randomness is an objective property. Nevertheless, what appears random to one observer may not appear random to another observer."
Print the post Back To Top
No. of Recommendations: 0
In that case, the trajectory of stcok indices over the past 100 years appear random to you?

Randomness can be detected using multivariate analysis. You have to be very careful when using the word 'random'.
Print the post Back To Top
No. of Recommendations: 0
"In that case, the trajectory of stcok indices over the past 100 years appear random to you?

Randomness can be detected using multivariate analysis. You have to be very careful when using the word 'random'. "


Yes, it can depending on what point of view you take on it.

Multivariate analysis http://en.wikipedia.org/wiki/Multivariate_analysis can determine what appears to some observers as random. I question whether it can detect it 100% which is in effect saying the system is infallible.

My feelings on infallibility is this...I have yet to find a infallible system. All systems or ways of thought or scientific analysis seemingly breaks down under the right conditions and time frames, as far as I have been able to observe. Other people may observe different things or believe 100% in the concept of infallibility but not me.

So, yes...I do believe the stock markets movements could be considered random.

Interesting read:


http://www.deepleafproductions.com/wilsonlibrary/texts/raw-t...
Print the post Back To Top
No. of Recommendations: 0
You can detect randomness in given data set with 100% certaintly. You may want to read up on it as to how they do it mathematically. It is straightforward.

I think your definition and analysis of randomness is outside the realm of current scientific practice and hence beyond my understanding. So I cannot argue any more on these lines.
Print the post Back To Top
No. of Recommendations: 0
No need to argue....arguing is futile. You can never argue with anyone that sees something from a different point of view. If one person stands in a valley and the other on the top of a mountain then neither can adequately explain to the other the "correctness" of their point of view.

Each side sees things that the other does not see. Which is why I fully know that I do have blind spots.

You might have a strong belief in mathematics and maybe things that some call "scientific analysis". My beliefs are not as strong in these areas because in my younger life I studied such things ad nauseum. While some had a easy time breezing through college studying such things as Law or trying to become a business major. I studied things such as Diffy Q's...short for Differential Equations http://en.wikipedia.org/wiki/Differential_equation

The Diffy q's were not that hard. It was trying to apply them in high end electrical engineering courses or stuff like Strength of Materials http://en.wikipedia.org/wiki/Strength_of_materials . You know plugging numbers and letters into different formulas such as these:

http://www.eformulae.com/engineering/strength_materials.php

That type of stuff gave me a big headache....not only did it give me a headache, I slowly came to the conclusion that high end mathematics may not hold all the answers for various different reasons.

One of which is that do you know that sometimes mathematics sometimes predicts things that sometime are not observed in "reality". This sometimes perplexes physicists and leads to massive arguments over who is right and who is wrong. There is sometimes many a argument that takes place between the theoretical physicist and the experimental physicist.. Then who is right??

There is certain phenomenon in this universe that can not adequately be explained.....by science or mathematics. For the most part, I learned that things work until they don't work any more and very few people are accurate in predicting when a thing will fail...except maybe on occasion Nikola Tesla...but that is another story or maybe it is just a myth.....

So, yes certain relationships might appear to work...they might have worked for so long that maybe some people consider them absolute laws that can't be violated......but not me. I learned over time that sometimes the improbable can and does happen and while one can play the odds on a certain thing happening, it is not too smart to believe something will happen 100% of the time because it leads to carelessness...not checking something out because the belief is a infallible one. I often get reminded by others when I begin thinking this way about certain things and that to me is a good thing!!!

There are some people that fall into that trap with Motley Fool itself. They read the advertisements and instantly have a 100% belief that just by picking TMF stocks when the newsletter says to pick them that they will be in the land of riches. Obviously for many reasons, things do not work out that way....the system is imperfect but the system tries to improve on it's flaws......is more of the type of thinking that I use.

I don't believe I am perfect and I don't believe people like Nikola Tesla http://en.wikipedia.org/wiki/Nikola_Tesla or Albert Einstein or Stephen Hawking or Kip Thorne http://en.wikipedia.org/wiki/Kip_Thorne or John Preskill http://en.wikipedia.org/wiki/John_Preskill or Carl Sagan http://en.wikipedia.org/wiki/Carl_Sagan or Buckminster Fuller http://en.wikipedia.org/wiki/Buckminster_Fuller or any other one could name had complete 100% infallible conclusions.

Maybe one day such a claim can be made but to me such a claim I have not yet found to be 100% certain.....Bringing us back to the real world. I have a extremely small belief level that anyone can predict market movements with a extreme degree of accuracy over long periods of time.

In short bursts maybe one can do that but year after year is rather difficult.......and if one is really successful doing that I doubt they are talking much about it. If I could successfully game the system I certainly would not let others in on it for usually when too many people know the system in the financial arena, then the system fails to work or at least that is wat I observed up until now.

As for Cramer. I think he is probably a great stock picker but his main problem is he is not operating a hedge fund any more with a hidden hand and you only see the results. The Cramer of today Cramer is like a poker player where everyone sees his hand. People can and do game Cramers picks. Another problem Cramer has is he has a comment for every stock and every situation. There is just no way he can be right on all of the opinions that he has that mostly come off the top of his head.

If a person knows what to look for, they can mine valuable intelligence from Cramer....It just takes time to know what to grab and what to throw away. For some it is too tedious to wade through the 80% of garbage to get to the 20% gold and that is ok. Everyone has their own style.




Rob S
Print the post Back To Top
No. of Recommendations: 0
I can't stand the style of Cramer's show ... call in, booya, kiss Cramer's butt, cheap special effects, quick opinion on a stock, next caller. I really don't care much for his picks either because of their lack of analysis, but I have to admit I've heard ideas I agree with occasionally ... mainly the idea of keeping an exit price in mind for a stock. There is wild speculation on both the upside and downside, and I like the idea of keeping limit sell orders in order to get out on too much upward speculation - the reasoning which got me to sell GIGM at $17.50 and PDS at $27 (both of which I bought back on the drops), but also got me to sell EDU and SSL much too early. There are tradeoffs with any style, but if I adapt my own right- so that my instincts match my moves and make sense in the big picture- I think It'll perform well. Its just a learning curve.

-John T
Print the post Back To Top
No. of Recommendations: 0
When it comes to investing I have learned to go by my instincts more than strict mathematics. Sometimes, that makes me a genius and other times it hurts me.....but I take the good with the bad because so far I have yet to see a perfect system. Even Buffett makes mistakes and he tends to get it right more often then most.

One thing I like about Buffett is that he tends to acknowledge his mistakes in most interviews that I seen of him. Many people tend to place him in god like status when it comes to investing but in most interviews that I have seen of him, I see a man aware of his own myth.

Some people believe strictly in mathematics. They think mathematics and science will always provide a perfect solution. I also used to bow to those gods until I realized that agents of chaos do exist.

Whether the agent of chaos is Bin Laden, the Hurricane Katrina and Rita, earthquakes, sunspots or even the Joker in Batman. I don't know how many seen that movie but to me that is a very deep movie. I think most people are focused on the action but whoever wrote that movie was a very deep philosopher.

The writer put things in there that maybe flies a bit over a lot of people's heads. Here is my favorite part:

"The Joker: [speaking to Two-Face] Do I really look like a guy with a plan? You know what I am? I'm a dog chasing cars. I wouldn't know what to do with one if I caught it. You know, I just do things. The mob has plans, the cops have plans, Gordon's got plans. You know, they're schemers. Schemers trying to control their worlds. I'm not a schemer. I try to show the schemers how pathetic their attempts to control things really are. So, when I say that you and your girlfriend was nothing personal, you know that I'm telling the truth.
The Joker: It's the schemers that put you where you are. You were a schemer, you had plans, and uh, look where that got you. I just did what I do best. I took your little plan and I turned it on itself. Look what I did to this city with a few drums of gas and a couple of bullets. You know what I noticed? Nobody panics when things go according to plan. Even if the plan is horrifying. If tomorrow I tell the press that like a gang banger will get shot, or a truckload of soldiers will be blown up, nobody panics, because it's all, part of the plan. But when I say that one little old mayor will die, well then everyone loses their minds!
The Joker: [Joker hands Two-Face a gun and points it at himself] Introduce a little anarchy. Upset the established order, and everything becomes chaos. I'm an agent of chaos. Oh, and you know the thing about chaos? It's fair.
[with the gun in Two-Face's hand, Two-Face pauses and takes out his coin]
Two-Face: [showing the unscarred side] You live.
The Joker: Mm-hmm.
Two-Face: [flips, showing the scarred side] You die.
The Joker: Mmm, now we're talking. "


When people figure out what is meant by that scene then they will know where I am coming from.

I pretty much like Cramer because he is a agent of Chaos. In many ways he upsets the established order which is why many dislike him but I like Cramer for the same reasons I like Robert Anton Wilson and George Carlin..."Let's put a Smile on that face!!!"



Rob S
Print the post Back To Top
No. of Recommendations: 0
I forgot to post where I got the Batman quote. Here it is:

http://www.imdb.com/title/tt0468569/quotes
Print the post Back To Top
No. of Recommendations: 0
John,

Cramer's approach also lets your miss the multibaggers that go several x. I keep a large portfolio just to trap these ones. If you do an extended analysis you will see why having multibaggers is critical to achieving >15% returns on a regular basis.

I too sold energy and metal stocks in an opportunistic manner but after holding for 3-5 years with 2-3x gains. I had PDS for last 3 years having purchased is from $25 down to $15. I did not sell it. In retrospect, I should have. But I didn't sell it for several reasons: high yield, low valuation even at $27 unlike other oil and steel stocks and depressed nat gas prices. So yes, you win some and not all. It is important to have a selling strategy based only on a serious mismatch in share prices and the share potential like Bill did with IPHS (other than a classic issues such as need and change in investment thesis). I got rid of GRMN at $102 having purchased it at $35. At $102, with a very high PE ratio, with cell phone competition heating up and with NVT acquisition by NOK, it did not make sense to me to hold it. (I did repurchase GRMN (a much smaller quantity) at $65 and finally sold it at $36 after coming to a conclusion that the original investment thesis was lost upon me and not because of the loss.)

I purchased AMZN from $50 down to below 30 and have never sold it. Even when it was at $102. Right now I am still at 3x gains with AMZN at $80+. Similarly with CTRP, ATVI and many others. It is true that my gains in NVDA, and many others have been decimated to 40% loss from a 40% profit. I am still keeping most of them. I even lost 80% on stocks such as CCRT (SA) which I finaly sold based on their latest review. But when I do the math it was still worth to hold, other than the reasons I stated earlier, just to hit upon those multibaggers. The best proof is the scorecard of SA and HG, the long running TMF newsletters. Remove a handful of multibaggers and see what happens to the scorecard.

Over the long run, you can see that multibaggers end up dominating the portfolio, if you let them. That is why Cramer's portfolios have anaemic returns despite all his brilliance.

Anurag
Print the post Back To Top
No. of Recommendations: 0
Anurag -

You have a good point, but I think different stocks take different approaches. For example, I have MPEL but I won't look into selling it until at least after City of Dreams is up, running and making money.
With commodities on the other hand, its harder to tell because so many unpredictable events can affect the price - such as a terrorist attack on an oil pipeline or a big hurricane - so I'd prefer a set lower gain to extended risk.
Its always a balance, with an associated learning curve. I also think the balance shifts when you've got an extremely volatile bear rather than a slightly volatile bull.
In my opinion the long-term story stocks I own are MPEL, AIB, LYG, TLK, TTM, WATG, NTE and others while I'd consider a shorter term gain on cyclicals and commodities like PDS, CBI, SLT. I'd watch the valuation of GIGM more closely as an online stock and have an exit price there as well... As for GSI - I'm on the fence as to whether to consider an exit price or just hold for the China steel consolidation story (leaning toward exit price until the bear's done).

-John T
(long all stocks mentioned)
Print the post Back To Top
No. of Recommendations: 0
... different stocks take different approaches

I concur. I mistakenly interpreted that you were making the approach of an exit price for all stocks.
Print the post Back To Top