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Jim Cramer - losing his gullible followers lots of money buying into Wachovia before it tanked.
Ad hominem. You could have chosen to address his specific arguments, but you instead have chosen to attack the messenger. Wonder why?
The fact remains that Cramer (as illustrated in the video I posted) correctly told people not to invest in real estate before the bubble popped, a move that caused him lots of grief with certain groups, as you might imagine. But he was correct in that instance.
Of course, his arguments aren't true *because* he is Jim Cramer, and he has no doubt made incorrect calls in the past, but then who hasn't?
You should really focus on his arguments, not his character. I'm sure there are counter-arguments, but you really haven't provided any.
Ad hominem. You could have chosen to address his specific arguments, but you instead have chosen to attack the messenger. Wonder why?
The fact remains that Cramer (as illustrated in the video I posted) correctly told people not to invest in real estate before the bubble popped, a move that caused him lots of grief with certain groups, as you might imagine. But he was correct in that instance.
Of course, his arguments aren't true *because* he is Jim Cramer, and he has no doubt made incorrect calls in the past, but then who hasn't?
You should really focus on his arguments, not his character. I'm sure there are counter-arguments, but you really haven't provided any.
How about quoting the rest of that reply and responding to Cramer's predictions for 2008?
Obviously not all opinions are created equally. What separates his opinions from others, for example, is that:
-- he was a Hedge Fund manager for 15+ years and has extensive knowledge about the workings of the market
-- he has written numerous books on the subject
-- he is famously rigorous in his research and doesn't just pull things out of his butt
-- he is highly motivated to do his due diligence given his wide exposure and the high potential for public humiliation if he's wrong
-- the reason he has a show on a major tv network is because he is an expert
and most importantly
-- he has provided a detailed analysis with sound reasoning and facts to support his position.
Compare his analysis with the ones offered on this board by the doomsayers and it becomes quite obvious that all opinions are *not* created equally.
Of course, having said all that, he still could be wrong. But there are legitimate reasons why he is paid millions of dollars to offer his opinions on TV to millions of people around the world. Naturally I'm open to contrasting analyses that are equally reasonable, should any be offered. So far, none have been.
Blah, blah, blah he's a clown, an entertainer, I for one love watching him, BUT if you do watch him, he's the first to admit he's taken people down with him, all the way to 0. After the tech bubble and now on any given day on air. His area of expertise is stocks, not housing, yet his "opinions" on stocks are often wrong. So why would his opinion on housing be trusted?
Cramer helps to shape certain markets and stocks due to his exposure on TV, he's in a position to shape millions of minds, whether true or not. The fact is, we are in the 1st or 2nd inning of a national recession where millions of people are loosing trillions of dollars on housing, stocks, bonds. And no peddler on tv or paddler online is going to rah rah the market back up anytime soon. My business and hobby has been real estate investment for a few years now and real estate is not going to bottom in 2009 maybe not in 2010 or 11.
The asheville market is just starting to tank and it will tank hard. No joy in that, just it's going to happen, period. I told my brother in law in the fall of 2006 and into spring 2007 that he would be bankrupt by the end of 2008, he's now in foreclosure and with 0 work. It's not that I'm some freaking genius, but the housing bubble has been self evident since 2004 to anyone with any brains and to even the most dim witted amongst us since mid 2008.
Paddler, I don't want to be mean, but you are either a little slow on the uptake or are spouting false positives and fighting the obvious for some ulterior motive, you seem very bright, so I don't think you are slow.
Whatever your plans are, I hope that they turn out great, but don't use a former hedge fund manager, stock picker, come entertainer to push false hope, there are actual people that may use that to make bad decisions, just like the millions who took out option ARM loans and bought homes they couldn't afford based on the words of Greenspan, Bush and others in 2004/2005 and have learned to rue the day.
Oooo, I used to run a hedge fund. My charitable trust did sooo great.
Jim Cramer is a Wall Street insider and worked his way in just like i would. It's all about who you know. Hedge funds are crap right now. So why should we listen to a person who always refers to his hedge fund. Now he is on TV and has a following of people that buy and sell on his recommendations. All he is doing is pushing one stock or another in the hopes that his popularity will cause a stock to move the way he wants it. It happens all the time. Search the Internet and it is full of people trying to push something based on reasons that could fit anywhere.
What we really need to do is buy companies that are sound and have been. Don't get caught up in when there will be a turn around.
lol . . . it is telling that not one single person has actually addressed the arguments outlined in the presentation . . . only ad hominems.
Folks, you don't believe or disbelieve something strictly because a particular person says it; that is completely irrational. You would get laughed out of a court of law or formal debate with this kind of silliness. Some of you are obviously too emotionally attached to the person and the subject matter to analyze his arguments rationally.
Like I said, Cramer may be right or wrong, but he has supported his opinions with specific arguments and details, none of which have been refuted by any of you. You haven't even offered any counter-arguments -- just ad hominems, anecdotes, unsubstantiated opinions, and "the sky is falling" rhetoric.
Ok, His article was written in Aug. '08 here are my thoughts on a few points he made.
1. "Now these charts are showing that housing stocks bottomed last month. So if the logic worked for housing’s peak, why not for it’s bottom?"
Speculation. Nothing can be compared to the past at this stage.
2. "The recent housing-rescue bill authorized the Federal Housing Authority to put $300 billion toward getting homeowners out of difficult floating rate loans to the low fixed-rate kind."
If you still don't have a job that fixed rate will do nothing for you.
3. "If – and Cramer thinks this is a when – Fannie Mae and Freddie Mac are taken over by the government, mortgage rates will come down. They’ve been going up month to month recently."
This just isn't the case. They are going down not up.
4. "That means there will be fewer foreclosures as a result because there will be few loans changing to those higher rates."
Job losses at historic highs. No job no pay mortgage.
5. "The horror shows that are the California, Florida and Arizona real estate markets are no longer bleeding into other areas."
What?
6. "So here’s the countdown: 309 days until June 30, 2009 – the deadline for a much-needed housing bottom."
We shall see.
If anyone is trying to predict the bottom they are foolish. What you should be watching for is a sustained move up. This will signal we are getting better and it is time to deepen the research. It is a very risky move to try and hit at the bottom for a few % points. I think my point before is on the money. Sure I didn't have anything specific but sometimes you don't need specifics when you know the person spewing out information is known to be the laughing stock of most people "in the know". Just because a bunch of TV personalities say he is the greatest guru of all time doesn't make it so. Everyone has an agenda. I know I do. Look at Madoff. I'm sure he had great examples of how good his investments were. But the real professionals knew for many years he was a crook.
Ok, His article was written in Aug. '08 here are my thoughts on a few points he made.
1. "Now these charts are showing that housing stocks bottomed last month. So if the logic worked for housing’s peak, why not for it’s bottom?"
Speculation. Nothing can be compared to the past at this stage.
2. "The recent housing-rescue bill authorized the Federal Housing Authority to put $300 billion toward getting homeowners out of difficult floating rate loans to the low fixed-rate kind."
If you still don't have a job that fixed rate will do nothing for you.
3. "If – and Cramer thinks this is a when – Fannie Mae and Freddie Mac are taken over by the government, mortgage rates will come down. They’ve been going up month to month recently."
This just isn't the case. They are going down not up.
4. "That means there will be fewer foreclosures as a result because there will be few loans changing to those higher rates."
Job losses at historic highs. No job no pay mortgage.
5. "The horror shows that are the California, Florida and Arizona real estate markets are no longer bleeding into other areas."
What?
6. "So here’s the countdown: 309 days until June 30, 2009 – the deadline for a much-needed housing bottom."
We shall see.
If anyone is trying to predict the bottom they are foolish. What you should be watching for is a sustained move up. This will signal we are getting better and it is time to deepen the research. It is a very risky move to try and hit at the bottom for a few % points. I think my point before is on the money. Sure I didn't have anything specific but sometimes you don't need specifics when you know the person spewing out information is known to be the laughing stock of most people "in the know". Just because a bunch of TV personalities say he is the greatest guru of all time doesn't make it so. Everyone has an agenda. I know I do. Look at Madoff. I'm sure he had great examples of how good his investments were. But the real professionals knew for many years he was a crook.
Excellent, thanks for making the effort.
First off, I think it's important to preface the arguments with some context around what a "bottom" means -- it doesn't mean that the jobs picture improves, it doesn't mean that layoffs won't continue, and it certainly doesn't mean that home prices will begin to go back up. It only means that home prices (generally speaking) won't continue to plummet, which is an important thing.
I'll try to quickly respond to your comments point by point:
1. There is significant historical precedent for the stock market being a leading indicator of the corresponding economic sectors they represent. The stock market is forward looking. So from a technical perspective, it is reasonable to use the stock market as a predictor of future economic activity. What you could rightly point out, however, is that Cramer was actually wrong about the bottom. The housing stocks didn't bottom until November (11/21 to be precise). So that's one check mark against him (however, in his defense, he was pretty darn close).
2. That's true, but not *everyone* is out of job. You have to at least concede that that program *will* help the majority of folks who are employed.
3. I don't understand your point -- Cramer said they'd go down and they have gone down. My friend just inked a 30-year loan at 4.75%. Sweet!
4. See #2. Hyperbole on your part. By the way, job losses are not at historic highs on a percentage basis, which is the only fair way to look at it (gimme a break, there were a lot fewer people on the planet in the 1940s, so using the number of job losses is not reasonable).
5. Not sure -- I'd have to go back and listen to understand the context of his statement.
6. You have to remember, Cramer is an egomaniac who likes to make bold calls on TV so he can brag about how "right" he is. But nevertheless, his viewpoints shouldn't be discarded because of that -- he still could be right.
Personally, the most compelling aspect of his argument is to look at the housing stocks themselves as a leading indicator of the bottom in the housing market. But as you rightly point out, calling bottoms is tricky business, and only swashbuckling attention-hogs like Cramer are brave enough to make these calls. But like him or not, he is often right, which means we should at least take his opinion seriously.
There is no question in my mind that his central thesis is correct -- that the housing stocks have bottomed, even though he was wrong about the timing (he was a couple of months too early). If you at the KB Homes chart for example (KB Homes has huge exposure to the California market, so that's a good one to use), there is a very clear bottom formed in November. Of course, new lows could occur -- but from a technical perspective, I think the chances of that are slim indeed.
My main worry is that something happens on the geopolitical front that puts our economy in greater jeopardy, which would obviously affect the housing market.
So if you extrapolate from the real bottom (not the false bottom that Cramer called in August) and go a year out from there, we're talking basically the end of 2009/beginning of 2010. So Cramer's prediction of July 2009 would be wrong using his own methodology -- he would be off by a few months. Maybe I'll call into the show and point that out.
I agree that picking precise bottoms is foolish -- but the fundamentals of his thesis are sound, even if the particulars are wrong -- and again, using KB Homes as a benchmark, we've already seen a sustained move higher from the November lows (low of $6.90, current price is $14.00 -- that's a 100% move!), with technical support below it.
I would be very, very, very surprised to see housing stock re-visit the November lows.
I'm going to say a whole economy "turn around" 2013. If all works well i say start getting back in solid about 18 months out. Only if we see signs of a turn. No flat-line.
I'm going to say a whole economy "turn around" 2013. If all works well i say start getting back in solid about 18 months out. Only if we see signs of a turn. No flat-line.
Again, using the historically reliable indicator of the stock market as a forward-looking instrument, the bottom has already been reached in the stocks, putting the actual housing market at or near a bottom around late 2009/early 2010, according to Cramer's methodology.
Now, do you have any reason to believe his methodology, which has historical precedent, is not sound?
And what is your methodology for your prediction of 2013? Because unless there is a method to the madness, you are just guessing, which is a child's game. Any average Joe can throw out a prediction on a chat board, but that doesn't mean we should take it seriously, right?
Someone only has one oar in the water http://s97.photobucket.com/albums/l229/Kenny5555/th_untitled.jpg (broken link)
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2013
