Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday October 1.
On the night of the 2,000th episode of Mad Money, Cramer reflected on what was happening around the time of his 1,000th show on April 9, 2009. The country was on the brink of the worst economic downturn since the Great Depression, and there was a fake rally before things turned for the worse. However, since then, the S&P 500 and the Dow have doubled.
Faced with the possibility of a government shutdown, there is plenty of fear, but Cramer pointed out that last year, many felt that sequester would be the end of the world. The strategy of buying stocks of the best companies, even if they have risen a bit, is still a good one. For instance, many would have been wary of buying Chipotle Mexican Grill (CMG) after an early move, but the stock price continued to go up exponentially. The same is true of stocks like Whole Foods (WFM), Pier 1 Imports (PIR), Apple (AAPL) and Regeneron (REGN). "The crisis is over, but we still have a crisis mentality," said Cramer, but staying with good stocks has been the way to go.
Cramer took some calls:
With concerns looming about a government shutdown, why are stocks rallying? Cramer thinks that once a few definitive statements were made, uncertainty passed, and there is nothing stocks dislike so much as uncertainty. He also believes the rally shows many are optimistic that there will be a deal, even hammered out in the 11th hour, to prevent a full-scale shutdown. In any case, "We talk about Washington too much," Cramer said. It is more essential to pay attention to the price earnings multiple of a stock versus its fundamentals than the latest news out of DC.
Cramer took some calls:
Allergan (AGN): Its drugs for eye problems might come under attack from generic competition. "I think that worry is an overhang," said Cramer, who has liked the stock, "I think the stock is a buy, but Wall Street doesn't, and it's bigger than I am."
Generac (GNRC): Without another storm like Sandy, it is unlikely to go higher.
Many people are not too confident about stocks, especially after the Facebook (FB) IPO fiasco and the flash crash. NYSE Euronext (NYX) CEO Duncan Niederauer admitted the crisis in confidence. "There are some days I feel like I'm losing," and he blamed the "arms race to make the market go faster ... it is getting complex, and the complexity is inversely correlated with confidence." One way to bring back confidence is to democratize the equity market. However, the Facebook IPO ruined this opportunity. However, there is hope that the Twitter IPO might restore investors' faith. Concerning the flash crash, Niederauer says there is now a procedure in place that allows humans to take over when things go wrong with the computers. Niederauer expects another great year for IPOs, and doesn't believe the government shutdown will affect the IPO market.
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