Never have bulls been more modest and timid. Never have the bears been so ascending and so bad. Oh sure, the bears nailed Meta Platforms (META) and knocked Microsoft (MSFT) out of the park. Amazon (AMZN) flopped. Just like Alphabet (GOOGL). But when the bears – with the help of all the media I know – tried to bring down Apple (AAPL), they failed. Apple had an amazing quarter, but it actually needed to understand something about Apple beyond chart direction to get it right — and hand-buy it when reporters pulled it off. Or let me put it another way: a month ago, when we entered October like slaughtered lambs, my friend Larry Williams, our greatest market historian today, said the bear was toast. He predicted one of the biggest rallies we would ever see, led by the Dow Jones Industrial Average. And he was just right. Surprisingly fair. Now he saw historical parallels. I tried to incorporate his thinking as much as possible, but what I missed was hanging on to some classic stocks that had made me so much money over the years, even decades. With the exception of Apple, they had to leave. They still do, I’m afraid, unless China changes, and China has become a horror show of a totalitarian nightmare. What did I miss? Simple: affectionate. The reluctance to go with companies that are simply the best we have. But that turned out to be my biggest conundrum. The one thing I was sure of, for example, is that Nvidia (NVDA) has the most powerful chips in the world. The one thing I didn’t see coming was for President Joe Biden to find out and ban them from China. I was sure that when I spoke offline with consumer packaged goods companies to find out who they were advertising to, the answer was simple: Amazon and Google. But it ended up being just a small piece of the puzzle. And the costs. I was mistaken. Amazon and Google costs are too high, but I feel like it’s over. You’re selling them now, you don’t realize these companies are mad at themselves; they couldn’t completely stop hiring, that’s what they have to do. Apple: This should have been a terrible quarter. China is a nightmare. The iPhone 14 isn’t meant to be special. Service revenues were going to be low. Here’s what was missing though: those things were all true and it didn’t matter. They are the masters of 900 million subscribers and around one and a half billion happy customers who buy anything that goes with Macs or iPhones, the two biggest Trojans on earth. They are remarkable. When will people realize the greatness of Apple’s management team? Sure, there is better technology, but it’s enterprise technology. We want batteries that last longer. They are. We want watches that go two days without recharging. Do. We want incredible programming. Of course, I’m coming right away. We want privacy because we think everyone takes us for granted and sells us to advertisers. Okay, Apple will stop that too. This is what Apple is: the good guys. Now let’s review what else happened. A few trillions of dollars came out of a handful of stocks and not all went into 2-year Treasuries. Some of that money has gone to companies that don’t part with their stock like it’s tap water. They went to companies that know what to do when a recession approaches and battened down the hatches before the storm hit, not after. The money went to stocks of companies that buy their shares on the open market the way Silicon Valley issues them. These companies pride themselves on paying big dividends, even if that means they don’t grow as fast as they could. Talk about the times. Oil, the commodity, was slaughtered within an inch of its life. But oil stocks? They have been fabulous. And they will get even better to the point that they will have enough money to send to SLB and Halliburton (HAL) to get more oil out and sell it twice what it costs. Now, let’s step away from the fray completely. This market is made up of health care and financial services. Old-school healthcare like Merck (MRK) and Eli Lilly (LLY). How did they get so high? Part of great new drugs and part of the upcoming deflation you get when you have a downturn. Notice I wrote downturn, not recession or nightmarish depression. Just a bad slowdown where drugs thrive. Banks? They work here for one simple reason: they can make so much money that they can buy back shares and increase dividends like never before. Industrial ? They are doing so well because they are so cheap compared to their historical prices. Detail? Of course, promotional. That’s why you buy TJX Companies (TJX) and Costco (COST). And if you want real winners, everything related to infrastructure, because the Democrats have given us so much money that the feds will be the buyer of just about everything that is made by our industrialists. I wish we owned Caterpillar (CAT) and Deere (DE). The two could feast on the trough for ages. Finally, there is aerospace. We are going to travel like never before after this Covid war. And we can’t get enough of these stocks. For years we have been under the tyranny of technology. This tyranny is over. It gave freedom to everyone else. They take it. We also have to take it. There will always be good technicians. We are not in 2000 when only Amazon was left standing. But we are in a manufactured moment, where the Federal Reserve is going to get its layoffs, the war in Ukraine won’t last forever, and the Chinese will find a way to save face and end their Covid lockdowns. Do we live happily ever after? No, but bulls aren’t going to be shy any longer. And the bears? They had a wonderful run, didn’t they? (See here for a full list of Jim Cramer’s Charitable Trust stocks.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED BY YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
A worker washes a Caterpillar crawler dozer at Ideal Tractor in West Sacramento, Calif., Monday, Aug. 1, 2022.
David Paul Morris | Bloomberg | Getty Images
Never have bulls been more modest and timid. Never have the bears been so ascending and so bad. Oh sure the bears nailed it Metaplatforms (META) and press Microsoft (MSFT) out of the park. Amazon (AMZN) flopped. So done Alphabet (GOOGL).
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