Wednesday, May 12, 2010

Is Cramer Describing Why Fundamentals Win Out in the Stock Market?

I wondered on to this article at MSN Money by Jim Cramer (yes, that Jim Cramer) that I found interesting.

The article is titled This is a loser's market, which is I think he means to be controversial, but it's what he says below the fold that I find interesting:

Suddenly, people can't get enough of it. It was underowned and hated, and now it is loved. I believe that's a testament to the fact that the stock has no profits in it.

He is talking about Costco (COST). Boring old, stodgy, hum-drum Costco. He's lamenting the fact that "boring" companies like these that have slow but steady profits are coming out winners suddenly.

The whole thing is just so stupid. You can run a screen of stocks that have done nothing since the year began and throw darts at them to find winners.

He goes on to describe speculating as little more than gambling in stocks. He doesn't use those terms, but that's basically what he's saying. I think what he's talking about really just illustrates why fundamentals win out long run and why Warren Buffet's strategy works.

It's not exciting or entertaining like Cramer's typical picks, but I think those are largely for short-term traders.

What say you? Is Cramer just describing fundamentals taking center stage instead of momentum, or am I missing something here?


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