Private Client Commentary - Cramer comments

Dear Clients,
I'll keep this one brief. The big news this morning is that the Fed is stepping into the commercial paper (short-term unsecured corporate debt) market for the very first time. It appears that the Fed will be buying this short-term paper in a move to get credit investors back into the short-term lending business. For the past week or two even the highly liquid, generally high quality, money market had begun to freeze up. Now get ready for the media to bill this as "more tax payer money at risk". And yes that's true, but it is at risk in the 'money market' and my suspicion is that the tax payer will make out just fine on this one, in the near term. For today, we won't get into the longer-term concerns over the government stepping so directly into the private sector.
Those of you who have watched CNBC or the Today Show the past couple of days may have caught 'Mad Money' host Jim Cramer, advising investors to get their money out of the market, at least money with a five year time horizon. Which, at first blush simply sounds like general financial planning advice - which in the aftermath of his comments (apparently a lot of folks were listening) is what he seems to be claiming this morning. But make no mistake, based on how he couched his recommendation initially, Mr. Cramer was indeed making a market timing call.
Having been in the investment business for a quarter century, and believing in my heart of hearts that the near-term ups and downs of the market are virtually impossible to time, I Googled Mr. Cramer's comments over the past several years and made an interesting discovery. According to the Coax Advisory Group, who provides a service where they grade the gurus, Cramer made the following comment to his readers on March 24, 2003:
"Stocks, all stocks, are now equally dangerous. The bear market, which began in technology, has now extended to every single sector. In short, the risk of owning stocks are as high as I've ever seen them, and the rewards, the least certain. The wounds, self inflicted or otherwise, are too deep to fix, even with a successfully prosecuted war. If you want safety, go buy a bond."*
In case you weren't aware, the last bear market literally bottomed in March of 2003, the Dow hitting a low of somewhere around 7,500. If you had followed Cramer's sentiment on that day, you'd have missed a very nice extended bull market.
So then I thought I'd take a look at what he was saying last October, when the last bull market hit its peak. Here is one of his comments from October 1, 2007.
"I'm now confident that, what would have been a given in 2008, a brutal recession, will now be avoided and prosperity assured.

Private Client Commentary - emotions and the market

Dear Clients,

Looks like another one of those days that calls for two commentaries. As I mentioned in this morning

Private Client Commentary - emotions and the market

Dear Clients,

Looks like another one of those days that calls for two commentaries. As I mentioned in this morning

Private Client Commentary - Credit Default Swaps

Dear Clients,

I

Private Cliient Commentary - reflective vs. reflexive

Dear Clients,

Looks like another one of those days that calls for two commentaries. As I mentioned in this morning's message, I'm currently not in the office. But in light of today's slide in the stock market, I thought I'd take a break and offer some perspective on what's going on.

As of this instant, the Dow has dropped below 10,000 for the first time since 2004. Today's primary excuse seems to stem from Europe's sudden realization that their banking system is in every bit as much disarray as ours. Like it or not, the economies of the world are without question closely connected, and while it's not as apparent during times when most economies are growing (as some countries expand at faster paces, and a few perhaps not at all), it's very apparent, if not exaggerated, during times when one or more of the major economies of the world begin to contract. So we might think of Europe's issues today as the 'other shoe to drop'. The market looks to be reacting to the probability of a global economic slowdown. In essence, selling on the anticipation (kind of like selling the rumor) of what's to come.

As we've explored, ad nauseam, the market is ultimately the great discounter of a potential future event, or series of events. Its goal is to always be early to the party. But if the market in the short-term is anything

Private Client Commentary - buy the rumor

Dear Clients,

There are a couple of old sayings on Wall Street that are particularly worth mentioning today: One is

Private Client Commentary - Buffet article

While, as you may recall, I haven