Cramer was being heralded last week for being the only one that predicted the financials meltdown from the beginning due to one 6-minute CNBC segment (the ‘Rant’). This clip has somehow overshadowed hundreds of money losing calls and incorrect predictions (see lower half of post) of a ‘bottom’ over the past year and a half, which is about how long the financials have actually been in the meltdown phase.
From Nov 2006 when Own-It Mortgage Solutions (the first national subprime lender to fail) went down and prices for subprime whole loans, bulks and MBS began to drop I have been vigorously following this story and reporting to you the facts from an insiders point of view.
I have always tried to stay ahead of the story and the ratings agencies in order to give you an advantage whether you are a home owner or trader. Over the past year and a half, Cramer and I have mostly been on different ends of the field on the subject. Honestly it drove me crazy sometimes. For example, mid-last year I put out a research piece on how Pay Option ARMs would be major trouble in 2008 and he told everyone to buy the Pay Option lenders stock within a week of my report.
As a matter of fact around the time of the ‘rant’ he was suggesting to buy banks and writing DSL (Downey Savings) on his knuckles saying it would go to $100 for nearly a month.
This post is not necessarily to bash Cramer, but rather to give you the facts and show to you once again how much of the mainstream media distorts the truth and how you can’t take everything that they report at face value. Also, showing his ‘predictions’ over the past year in this manner really makes ya go ‘huh?’. It is incredible.
The pumpers think they are helping people by bashing shorts and always painting the best possible picture of a company. What they do not realize is that they are not hurting the shorts, but rather the longs who buy the stock on the pump and lose nearly every time when it comes crashing back to Earth a short period of time later under its own terrible fundamentals in the case with many financials.
Below is a listing of Cramer’s calls for the past 15-months. Your Money has been diligent in keeping up with the Cramer Variety Hour. This is Cramer’s resume, not a 6-minute soundbite in August when his sentiment changed literally overnight for some strange reason and he got lucky.
In all fairness, he has made some decent calls macro calls such as crude going to $150 and the DOW hitting 14,500 last year amidst the housing market crash backdrop. But in this post I wanted to focus on the daily/bad single issue call in the financials and short-term market timing predictions that can crush an individual investor.
It is a quick read but by the end you will feel nauseous and have a headache, that I can promise. -Best Mr Mortgage
CRAMER’S RESUME (In March 2007 subprime was big headlines due to New Century, Fremont, NovaStar etc failing. Everyone was calling it ‘contained’ and the losses would not go past a few non-bank greedy mortgage lenders)
MARCH 06, 2007 – The financials are bottoming now.
MAY 11, 2007 – The worst is baked into the retail stocks
June 13, 2007 – Fed easing is off the table. The market has hit bottom and is ready to roll again.
JULY 05, 2007 – Negative rumors may continue but it’s important that you stay strong. The bears will continue to be wrong. Still see the Dow going to 14,548 this year. This is the season to be in technology
JULY 09, 2007 – We are in a dramatic, runaway bull market. Stocks that go to 80 tend to go to 120. Tech, cable & telecom will work. Oil goes to the mid 80’s.
JULY 10, 2007 – Even with the selloff, minerals are in total bull market mode.
JULY 13, 2007 – The move in tech is for real. Am begging you to buy tech!
JULY 25, 2007 – Over the next few months there’s just a huge amount of money to be made owning the technology stocks. Now’s the time (USE KEYWORD “HORSEMEN” TO SEE CRAMER’S FAVORITE TECH STOCKS). The refiners’ margins are being squeezed
JULY 26, 2007 – The selling today was pure fear – but 500 points on the Dow may not be enough. Would sell anything mortgage or corporate credit related.
JULY 27, 2007 – The banks, brokers and homebuilders look cheap but the earnings estimates are too high and will be slashed. We want to buy stocks of companies that have just beat the numbers and have taken damage in the sell-off.
JULY 30, 2007 – The market will go up again tomorrow as the institutions buy stocks at the end of the quarter to make their performance look better.
JULY 31, 2007 – The worst case scenario keeps playing out – you have to sell the financials on any strength.
AUGUST 02, 2007 – The Dow is going up when it should be going down.
AUGUST 03, 2007 – The markets will stabilize. Until then, preservation of capital is a priority. Want you to stay in the game.
**AUGUST 07, 2007 – The ‘Rant’. What the heck happened from July 27th? http://allday.msnbc.msn.com/archive/2007/08/07/307269.aspx
AUGUST 09, 2007 (Dow -387) – The European blowup is not over. Sell if you have any gains in MTG, MBI, KBH, BX, CTX, BZH & WM.
AUGUST 13, 2007 – The market action today (Dow -3) is saying that the Fed is going to cut rates – but don’t buy it. Bernanke wants to take us perilously close to recession by not cutting rates.
AUGUST 17, 2007 (Dow up 233) – The Fed blinked today with a discount rate cut. The rules of the game have changed. The consequences are all positive. Think the analysts will start reiterating their buys on Monday. The Fed will now cut the Fed funds rate making dividend stocks more attractive.
AUGUST 23, 2007 (Dow down .25) – The market is in recovery mode and will be fueled by Fed rate cuts.
AUGUST 28, 2007 (Dow down 280) – In the midst of the sell-off there is a bull market in gambling stocks. Casual dining is in a bear market.
SEPTEMBER 07, 2007 (Dow down 250) – The Fed will have to cut rates “big” now (after today’s poor jobs report) because we could be staring at a recession.
SEPTEMBER 10, 2007 (Dow up 14) – Expect only a 25 basis point cut from the Fed. Rates will not be cut deep enough to do anything this year.
SEPTEMBER 18, 2007 (Dow up 336) – The credit crisis may soon be over. The time to worry has come and gone. The 50 basis point rate cut today by the Fed is only the first cut – see three more
SEPTEMBER 19, 2007 (Dow up 76) – The rally of the last two days is just the beginning. History says it’s not too late to get on board. It’s time to buy. Don’t pay attention to the bears. Wouldn’t touch the homebuilders. Feel good about owning the banks: Wachovia (WB), Downey Savings (DSL) & FirstFed (FED). Like the dividend payers like AT&T (T), Verizon (VZ), Con Ed (ED) & Genesis Lease (GLS). The Fed cuts will also help retailers like Kohl’s (KSS), Target (TGT) and Sears (SHLD). The US dollar will go higher, not lower
SEPTEMBER 21, 2007 (Dow up 53) – We are now in a true bull market. We are going to get close to Dow 14000 within the next two weeks. More Fed cuts are ahead preventing steep declines. We will see “shocking” advances on the way to the 14500 target by the end of the year. Not worried about the weak dollar – makes U.S. assets cheaper for foreign acquisition.
SEPTEMBER 26, 2007 (Dow up 99) – If Warren Buffett takes a stake in Bear Stearns (BSC) you will see a move in Citigroup (C), AIG (AIG), J.P. Morgan (JPM) and American Express (AXP) that have held back the Dow.
OCTOBER 01, 2007 (Dow up 192) – The market will go higher because rates are going lower and the Fed is easing.
NOVEMBER 07, 2007 (Dow down 361) – Would avoid the financials like the plague.
NOVEMBER 12, 2007 – We are not at a bottom but the market is oversold. Capital preservation must come first (use keywords “recession-proof portfolio” for Cramer’s defensive picks.
NOVEMBER 16, 2007 – Maybe the Fed is done easing. That’s why commodities are dropping like rocks – gold could get crushed.
NOVEMBER 28, 2007 (Dow up 331) – The market is bottoming just like in 1990. The Fed has woken up. We can buy selected stocks (see today’s recommendations and major reiterations.
NOVEMBER 29, 2007 – The financials have bottomed. Cash is not king now as rates are going lower. The Fed may cut rates by 100-150 basis points.
NOVEMBER 30, 2007 (Dow up 60) – You want to stay in the financials now that Bernanke has signaled more rate cuts (see today’s recommendations/reiterations).They will go much higher.
DECEMBER 13, 2007 – Think the Fed’s cutting rates will cause the US dollar to rise dramatically.
DECEMBER 17, 2007 – See oil going to $150/bbl.
JANUARY 03, 2008 – Natural gas prices will outperform oil in 2008.
JANUARY 22, 2008 – The Fed woke up today with its 3/4 point cut – we need them to take the Fed funds rate down to 2 3/4% so higher rate mortgages can be refinanced.
JANUARY 23, 2008 (Dow up 299) – The market bottomed today. The new leaders are the financials & retailers.
JANUARY 24, 2007 – The stimulus package will help retail – will improve same store sales comps that drive retail stocks.
JANUARY 30, 2008 – Now that the Fed has cut rates another half point catastrophe has been taken off the table. The market selloff is a buying opportunity. You have a once in a decade chance to make big money right now. Only the mortgage insurers stand in the way of a full blown housing recovery that no one is expecting.
JANUARY 31, 2008 – When rates are coming down you buy the retailers, financials and homebuilders. The mortgage insurer problem will be resolved. Don’t want to be defensive now. The dry bulk shippers are overvalued.
FEBRUARY 01, 2008 – The banks will go higher because the Fed is still behind the curve and must continue cutting rates.
FEBRUARY 04, 2008 – Can’t recommend tech stocks again until August. The banks and the homebuilders should be bought on weakness. Momentum stocks should be avoided. Won’t make a lot of money on the casino stocks.
FEBRUARY 05, 2008 (Dow down 370) – The Fed rate cuts will prevail. We will get the housing bottom after Fed funds goes to 1.75%. The new market leaders will be the banks, retailers and the brokers.
FEBRUARY 07, 2008 – The summer has been bad for tech for 16 of the last 17 years. Holding on to tech shares past the Goldman tech conference in two weeks is a mistake. The tech money will flow into the financials and retailers.
FEBRUARY 14, 2008 – The brokers will not bottom until all the analysts have cut their estimates.
MARCH 11, 2008 (Dow up 417) – The rally is not done – we could be in for a week of higher prices.
MARCH 13, 2008 – If the Fed buys $50B of agency securities we could see 1000 points on the Dow. The oversold rally will contiue another 4-5 days.
MARCH 18, 2008 (Dow up 420) – Think we’re seeing a legitimate bottom in the market. Do not sell this rally. Expect more bank failures.
MARCH 19, 2008 (Dow down 293) – Don’t see any upside in the trucking stocks. The four horsemen of the potential Apocalypse are Merrill (MER) ,Citigroup (C), Washington Mutual (WM) & UBS (UBS).
MARCH 25, 2008 – Prefer the natural gas stocks vs the integrated oils.
APRIL 10, 2008 – The golds have simply pulled back in a bull market – IMF selling is a buying opportunity. Goes to $1600/oz
APRIL 28, 2008 – Am bullish whether or not the Fed cuts rates – don’t get shaken out. Have been buying the gold stocks all the way down.
MAY 13, 2008 – The housing stocks have bottomed but don’t have the “all clear” to buy. Don’t want to get near the refiners.
MAY 30, 2008 – The action in the housing stocks may mean that things will get better for the homebuilders – watch for comments from Toll Brothers (TOL) and Hovnanian (HOV) when they report next Tuesday. If things have stabilized we could get a rally in the financials.
JUNE 10, 2008 – Don’t be fooled by the rally in the bank stocks today – they are in real trouble because the Fed may decide to raise rates. Can’t get behind solar now. Don’t like any ethanol plays here.
**JUNE 17TH MARKED THE MOST RECENT ONE MONTH CRASH THAT ENDED JULY 15TH
JUNE 19, 2008 – Would buy the natural gas stocks (see 6/18 Major Reiterations for names) after weakness today. Want to buy the steel and fertilizer stocks on any pullback. The banks (BAC, C, CMA, EWBC, FHN, HBAN, KEY, MI, NCC, BPOP, WB & WM) will have to raise more capital – would avoid.
JUNE 20, 2008 (Dow down 220) – Don’t try to bottom fish housing, autos, banks or the retailers. Like agriculture, minerals, mining, aerospace & defense, infrastructure, and particularly the petroleum complex including natural gas, crude, and the related service companies. Natural gas goes higher.
JULY 02, 2008 (Dow down 167) – The market selloff is not done because of global economic slowdown fears. It’s time to sell some of the winners and raise cash. Natural gas prices will go higher, but the natural gas stocks are in a periodic pullback that could get vicious. Sit tight with them if you ar a longer term investor. Don’t like the refiners.
July 09, 2008 (Dow down 237) – Don’t bottom fish the financials – the bloodletting is not over. Healthcare will be in favor by the fund managers.
JULY 14, 2008 – You can’t own the financials or the homebuilders. There will be more and larger bank failures than IndyMac. If you own a bank stock selling at $5.00 or less, it’s not too late to sell. Think Citigroup (C) goes to single digits. Gold, minerals and energy are in bull mode. The price of natural gas could double if its historic valuation vs oil (6-1) holds.
**JULY 15TH MARKED THE FIRST DAY OF THE LARGEST RALLY THE FINANCIALS HAD EVER SEEN ON PAULSON’S PROPOSED FANNIE/FREDDIE BAILOUT AND WELLS FARGO QUESTIONABL EARNINGS AND A SUBSEQUENT SHARP ENERGY SECTOR PULL BACK.
JULY 16, 2008 (Dow up 277) – The rally today gives us an opportunity to reposition ourselves before the house of pain resumes. The banking system is failing – would sell the financials on strength. Would be a buyer of the natural gas stocks as they get clobbered. Think the two day decline in oil prices reverses tomorrow.
JULY 21, 2008 – After seeing the quarterly reports believe that JP Morgan (JPM), Bank of America (BAC), Wells Fargo (WFC) and US Bank (USB) will be the survivors in the sector and will be able to buy up other banks as they fail – don’t see any anti-trust problems. Would buy the first three on weakness, but would buy USB now because it is down far enough. There will be more runs on the regional banks but the sector has put in a bottom. The natural gas stocks are too cheap.
JULY 28, 2008 (Dow down 240) – There is no relief in sight for the market.
JULY 30, 2008 (Dow up 186) – Do not think the market will revisit the panic lows of July 15th – it’s time to buy on the next dip because it may be the last one.
JULY 31, 2008 (Dow down 206) – The market will not drop below the panic low of July 15th. Banking and housing have bottomed. It’s a signal that stocks should be bought on the way down.
There you have it. Cramer’s resume. This is what was being praised all day long on bubblevision last week. Perception is an amazing thing. Don’ believe the hype!