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Jim Cramer's Ultimate Growth Stocks for 2012, which boast "the kind of rapid yet consistent...
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Thursday, April 19, 2012, 5:45 PM ETJim Cramer's Ultimate Growth Stocks for 2012, which boast "the kind of rapid yet consistent growth that’s coveted in an environment where economies around the globe seem to be slowing." But buy only on a pullback: AAPL, SBUX, CMG, ROST, AGN, CELG, LULU, MNST, NKE, MCD.
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If you want to give the original "Mr. Pump & Dump" any more of a stage, I suppose that's your prerogative!
Risk is MASSIVE to the downside here,
you finally have the almighty APPLE looking like it may just succumb to Sir Isaac Newton's principles!
This is no game kids!
Deleveraging into a "DEPRESSION" while test the resolve of every man woman and child of this great country!
Be good and good to each other, that's the way forward!
It is all about "YOU", The Individual!
No "Social Justice" / "Collective Salvation!"
Jerry
Cramer should name his favorite high-growth stocks the Shifty Fifty, in honor of his tendency to flip-flop his opinion when one the growth stocks crash (while often not whispering a peep about his prior opposite recommendation).
When I did my income tax, got reminded Cramer cost me over $1800 last year.
Then at the recent peak near $640 on April 9th, he called it his top growth pick and that it was the "Greatest Growth Stock of Our Lives".
Cramer is a momentum investor - period. The only reason he did well at his hedge fund was he was chasing tech stocks in the 90s, culminating in his now famous presentation in March 2000 that investors should own nothing but tech stocks.
If one listens to this charlatan, they deserve to lose everything.
Disclosure: I own AAPL and look to add under $535.
Bofa (BAC)
Here is the target by year end $17
He does make the dry business of investing entertaining, with his hip-hop/pop music, silly costumes and sound effects. I think his advice on CMG, MWE, HAIN, WFM, AAPL, NLY and LVS are spot on. Yes, he’s made mistakes, and admitted them.
Cramer is a skilled writer. If you think that he admits all or even most of his mistakes, you might not have been paying close enough attention. Perhaps his worst flaw is that he often gets caught up in the emotion of the market--whether up or down. He lives off momentum.
When Cramer's high-priced momentum favorites change direction in a bear market, can you rely on Cramer to get you out of them before they wipe out all your gains?
If you're counting on Cramer's market timing advice, or if you would like some examples of Cramer apparently rewriting history, have a look at this webpage:
http://bit.ly/HWSFYx
However, in my opinion Jim Cramer does present two fairly valuable services. He is constantly urging people to take control of their own investing decisions and his show presents information on various companies that may slip under many people's radar but are good investments nonetheless. For example, Cramer has consistently pushed Apple as a stock since the summer of 2008 and I've been rewarded with a cost basis of $185 a share by listening to his opinion. Kinder Morgan [KMP] is another example of a stock that took off years ago and has made me quite a bit of money.
Cramer's greatest weakness, in my opinion, is that he seems to frequently fall victim to the "cult of personality" on certain CEO's that make him wildly overestimate the future stock performance of many different organizations. Ford is a perfect example. In December 2010, Cramer was so worked up that I thought he was ready to support Alan Mullaly for sainthood. Cramer stated "Ford is going to $35". Ahhh... not quite. Sometimes it just gets ridiculous. Someone really has to tell him to cool it on that.
Here's the bottom line: Love him or hate him, Cramer performs a service. He's not always right and he's not always wrong. If you buy the stock of ANY company without doing your own research, you deserve what you get because it's a roll of the dice. You might as well be taking stock advice from your dentist. However, there are snippets of profitable information to be gleamed from "Mad Money" if you are willing to keep an open mind and do your own research later.
I don't agree that his program is valuable for the average viewer. Most viewers would be better served putting money in a balanced index fund with dollar cost averaging. Because of Cramer's hyper-emotional tendencies and his microscopic attention to stock market movements, it's a good bet that he'll panic at the moment of maximum pessimism when the next severe "surprising" bear market occurs as a result of the on-going deleveraging economic cycle. He frothed and overhyped tech stocks at the absolute top of the internet bubble. He seems inextricably drawn to popular assets experiencing parabolic price rises--just as an insecure and jealous teenager is compelled to buy the latest fashion fad.
He completely missed out on the best buying opportunity in decades for stocks like TJX and ROST and Berkshire Hathaway--and many other solid low-valuation non-tech stocks that were left for dead at the exact top of the Nasdaq bubble. He scoffed at the very stocks that the best money managers in the world were picking up in 1999--allowing them to have positive returns in the years since then--not just try to "Get back to even".
Cramer's success in investing occurred in his hedge fund days (a small fund compared to the better known funds). He had many people working with him, and he was likely using trading methods that cannot be duplicated by non-institutional investors--many of which are...controversial.
As a picker of stocks for longer term purposes, I don't think he could outperform a broad market index over a full bull-bear cycle. With the high tax rates of short-term capital gains and the draining effect of trading fees and spreads, it's even less likely that he could outperform.
As a simpler substitute for Cramer, a person could simply invest in a large-cap growth stock ETF with dollar cost averaging.
My stock picks are my own ideas, even DECK, and LVS which he always put down (while favoring WYNN) until recently, but he's good at punching out the basics to new investors. I see the hype but that doesn't negate all value of his show.
One bit of advice Cramer gives that I never listen to is "if over 50 do not invest in stocks." Working full-time keeps me from watching closely but I've nearly doubled where I started and see no sense in following that advice. I assume he’s being cautious, as am I.
Cramer usually seems to want to buy high, sell higher. His idea of buying low often seems to mean that you should wait for a tiny pullback in a stock that has had a huge percentage gain over a period of at least three months.
Some corrections: Cramer did not always dislike Decker's. He liked it after it had become established as a hot momentum stock, and recommended it all the way to the top. In fact, Cramer was hyping it on his show just before it peaked at $119 and fell off the cliff. Now that the momentum spell is broken, he's not fond of it. I believe that he liked it for quite a while, so it was one of his better calls for people who were lucky enough to buy it when he was first recommending it (rather than at $119).
Long story short: Cramer usually likes a stock that has good price momentum and strong growth (revenue or earnings). If the momentum or growth declines, he changes his view on the stock. This is more or less the core of the method of William O'neill. (I'm simplifying here.) By the way, some people who measure stock-picking methods believe that the O'neill method outperforms other methods for picking stocks.
The great thing about the internet is that it provides a historical record of what pundits like Cramer say. Check the internet's historical record rather his recollection of history. The two are sometimes different.
I already had DECK (seeing Uggs on nearly every woman walking in NYC) but hearing him cheer it gave me support to hold it during those rough patches not due to Deckers. CANDIES did well for a very long time. Why should he continue to plug a stock when the company is struggling? He's no magician but does a fairly good job of helping us to keep our gains. If I had taken his advice more to heart "Pigs get slaughtered" or "Take some off the top and go buy yourself a cashmere sweater," I wouldn't have held on to DECK watching my gains shrink day after day, hopefully hanging on for another surge that never came. It's our own fault if we don't sell while way ahead and not doing our own homework.
I subscribe to Cramers Action Alert Portfolio. It's up 15 percent this year.
I made 10k on his recommendation to buy AIG three weeks ago.
He make me money last year too.
I bought AA today after I saw Klaus on his show. I won't blame Cramer if I lose money on it but have the feeling I won't.
To the growth stocks: if you have to wait for a pull back to buy (recommendation) then they are not good. A growth stock grows until it doesn't - to buy on a pull back might be dangerous actually.
As to your last paragraph: No stock ever keeps going straight up. Pull backs occur for all kinds of reasons, i.e., Europe going through its throes, giving us a better entry point. I don't always wait but I think he's trying to say the market is so volatile these days, we may as well wait - better time to buy comes sooner than later. ;-)
The WSJ had an article last year that stated Cramer beat the market by a cumulative 0.9% over the 9 years since he had his ActionAlerts portfolio - and that assumes no mgmt fees and excludes even the ActionAlerts annual subscription.
Sure, Cramer may give you a couple good ideas, but a monkey throwing darts will too.
For Cramer's Top 4 Dow stocks for 2012, he avoided picking any tech or financial stocks, the year's two best sectors. I guess Cramer needed to see AIG go up 25% before he took notice. :-)
Cramer nearly always picks mid- and large-cap growth stocks, so you're reaping the rewards of being in a sector that is currently outperforming other sectors. The problem is that this sector will grow cold as the bull market ages and turns to bear market. And you'll likely end up underperforming the market by the end of the cycle based on your narrow focus on mid/large growth stocks.
Guess which one has done better since then?
Not surprisingly, Cramer jumped back into AAPL after it started doing well again. The guy is a charlatan and momentum player who jumps onto whatever is doing well. He rarely if ever turns less bullish near peaks - remember when he famously told investors to buy only tech in late Feb 2000?
http://bit.ly/IetJJA
1) He is very entertaining
2) Listen to his education Not his stock picks. If you listen to his education and do your own homework you'll make out just fine.
AAPL was a bargain when it was under 10x forward P/E, but given the constant competitive concerns, I think the likely forward P/E will be roughly 12x as the company still needs to prove it's ability to innovate post-Jobs. That P/E overhang will be around for the next 2-3 years IMHO.
If calendar 2013 EPS is $54 and excess after-tax cash addback is $47, my target is $695 at year end or a nice 20% upside. I plan to add more under $535 (30% upside).