Oddly, I happen to like Jim Cramer. Anyone who displays that kind of passion for anything they do, will always have my vote. Cramer, like most other investment advisors, has times when they're right, and times when they're wrong. I can tell from watching his "lightening rounds", and listening to his callers yell, "Boya", that Cramer is a "momentum investor" with a fundamental flare.
A momentum investor is the opposite of a value investor. Momentum investors believe you buy a stock near its high because you believe its going higher. I have seen this strategy pay off big for investors, but as soon as the momentum fades, these stocks get killed. As long as you know when to get out, you're fine. Unfortunately, very few know when that time is.
Whenever I watch Cramer, I am probably not seeing or hearing the same things you are. Unlike most who watch his show, I am more interested in the attitudes of the people calling in (Boya) rather than the stock picks. Herein lies my observations of an "out of control public".
I cannot recall a time in the past 48 years where I have seen greed reach such epic proportions. For anyone who has watched Willy Wonka & the Chocolate Factory, you are probably familiar with the greedy, selfish little girl, Veruca Salt. Veruca was the one who was always demanding that her Dad give her everything she wants, and give it to her now! Boya!
I thought the NASDAQ bubble would have cured some of this greed, but investors shrugged this off and went into real estate instead. I have heard several people tell me that they gained back everything they lost in the stock market by investing in real estate. Oh, really. Did you sell? Boya!
Oh, by the way, before I go any further, I wanted to tell you what Boya means. I have heard military personnel use the term, but I thought it meant go get'em. When I went to dictionary.com, it referred me to acronymfinder.com. The acronymfinder said boya was a military word for.... Well, I'll let you look it up.
The outlandish greed we are witnessing in society today is unparalleled. Over the past 85 years, the closest we came to present day greed was during the roaring 20's, just prior to the 1929 stock market crash, and just before the great depression. Some market historians believe that greed played a major roll in the demise and collapse of the economy and stock market in the 1920's.
Today, selfish greed to attain wealth is breaking down our moral fiber, and our sense of decency. All you have to do is turn on your TV set, and watch for a couple of hours to see what I mean. I don't know about you, but a few years back when I saw Bob Dole do a Viagra commercial, I was embarrassed for the guy. Today, when we see a Viagra or Levitra commercial, we think nothing of it.
When the Viagra commercial first appeared on TV, my son was 11 years old. Since he was, and still is, a big baseball fan, asked what Viagra was after seeing Rafael Palmeiro do the commercial.
Now days, we see the selfishness and greed of Veruca Salt from Willy Wonka, in people we see everyday. Here in Pensacola, FL, the city put up its first camera at an intersection. On the first day, they counted 41 people who had run a red light. This is only at one intersection!
Let's take it a step futher. Have you made a list of the happenings around you. I have.
1) Wall Street's greed and quest for investment banking fee's led to bogus research reports. What's amazing is these firms still have over 20 million client accounts.
2) Corporate executives have been caught lying about their earnings, and becoming rich by cashing in millions of shares of stock and options. How many more are out there that have not yet been caught.
3) TV shows like Donald Trump's "Apprentice", and Paris Hilton's "The Simple Life" are fueling greed, and in Hilton's case, creating a sub-culture of kids who spend everything they make,and think being promiscuous is normal behavior.
4) Professional athletes promote cheating when home run hitters like Barry Bonds, Mark McGuire, and many others take steroids to improve their stats to get richer.
5) Insurance companies payout about $6 billion a year to people who make false claims on injuries from fender benders.
6) Go into a fast food restaurant with your family, and eventually someone will use vulgar language loud enough for your children to hear it.
I could go on and on, and I'll bet you could too. I spare you the rest.
My point in all of this is very simple. The economy and the stock market is a greed correcting mechanism. The greed in the NASDAQ in 2000 was corrected. The greed for waterfront property along the Florida coast is being corrected as we speak. The real estate market nationwide will also be corrected. Remember, most greedy people only learn when pain is the consequence. (IE- Large SUV's- Higher Fuel Costs= PAIN)
The job of any student of the market is to spot extremes. This is what we try to do every day. This being said, what will be the self correcting mechanism for a lack of decency, honesty, and respect for others. I'm sure the economy will have an answer for us eventually. Boya?
