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Taken from Raging Bull boards:
By: bjp1946
Reply To: 18383 by mschere Sunday, 12 Dec 1999 at 3:04 PM EST
Post # of 18433

Mschere, would that it were so straightforward. What do you think of the following commentary by Cramer of

We all love certainty in the stock market. We like benchmarks. We like
relationships. We like the "official" nature of the Standard & Poor's. We
love valuing companies on earnings. We think that price-to-earnings
measures never lie. We buy and sell stocks on certain matrices that make
us comfortable.

And in the end of the 20th century, we threw it all
out the window.

We made a mockery of the discipline that served
us so well. We rendered all that we knew about relationships among
bonds, stocks, prices and earnings hopelessly irrelevant.

We just don't want to admit it. We would feel naked without our beloved
standards. We would be revealed, unbelievably, after all of this rigor that
we have built up and blessed, as mountebanks who can't make you a

Oh come on. You know it is true. Nobody can write it. If you write it, you get
laughed at by the professionals, your peers, your buddies, your Fellow
Travelers. Maybe I am just secure enough -- or just lunatic enough, or just
masochistic enough -- to put it down here for all to see.

But our methods of valuation, our standard methods of valuation, don't
make us any money any more.

Sure, periodically, they come in to play. We will see S&P futures sell
programs come on when rates rise sharply, as money that is run as stock
vs. bonds gets juggled about. And there are plenty of managers who won't
own the New World stocks; witness the massive underperformance vs. the
Nasdaq that most funds are experiencing.

I sure wish it weren't that way. I was able to calculate price-earnings ratios
and figure out relationships between stocks and bonds and sectors and
groups better than just about anybody. Heck, I was one of those kids in
school who just had to get As, and I got an A in "authentic Wall Street
gibberish." Just ask anybody who knew me before, when
my reputation was for numbers, not popping off.

But it sure is hard to take the so-called righteous stuff now. It is hard to
listen to the brokers discuss the relative merits of VF Corp. (VFC:NYSE)
and Deere (DE:NYSE) when 10,000 shares of Portal Software
(PRSF:Nasdaq) on a good day will make what you make in Deere in a
lifetime. It is hard to worry about price-to-sales when Cisco
(CSCO:Nasdaq), the smartest company I have ever seen, buys Cerent,
which, in the Graham & Dodd world, doesn't even exist.

It is challenging, to say the least, to think of book value, when a company
has an idea that could wipe out much of the current retail infrastructure.
Maybe it was all of that Marx they made me take at Harvard to get that
diploma in the 70s, but analysts seem to have nothing to lose but their
price-to-book chains.

Oh that doesn't mean it's easy, or a dice roll, or some expensive game of
chance. Matt Jacobs, the hardest-working guy in my office (and I thought
I would die before I ever wrote that) spends hours upon hours trying to
figure out whether Scient (SCNT:Nasdaq) has a better model than
Verisign (VRSN:Nasdaq) (it doesn't) or whether the good folks who run
Red Back (RBAK:Nasdaq) are better business people than the gents
behind the wheel at Tellabs (TLAB:Nasdaq) (they are).

Trying to spot which company might have "viral" growth ahead of one that
has "organic" growth, vs. one that is just plain inert, takes a skill set that
they can't inject in you at business school. Just as the market itself has
become wide open, the skill sets you need to win have become wide open,

One thing is for certain though. All of those talking heads you see and
hear today, and all of the analysts and brokers and traditionalists of the
antebellum days, they know it, too. Oh maybe they can't articulate their
fears other than to their spouses. Oh, they can deny the thoughts of this
column till the cows come home.

But they are shaking inside. They are fighting their own irrelevance. They
don't want to change, because it is frightening, and otherworldly, and
downright too hard at this point in their lives.

The other day a reader tried to make fun of me. He called me Chameleon
Cramer. I think he meant to hurt me. Get in line!

I can tell you I felt honored. It made me think that I can still change my
stripes to stay alive. Only a chameleon would invest in a Be Free

Only a chameleon could recognize that a coat of S&P 500 worship gets
you eaten fast in the New World.

Chameleon Cramer. Maybe I will make business cards with it. Suits me

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