July 12th, 2006

Apple (AAPL) and Contra-Cramerica

Could it be time to start becoming less bearish, even start buying! Why the switch, you ask? Because I’m a “contra-Cramerican” (contrarian, that is). That’s right, just as the market is beginning to resume its fall begun in May, Jim Cramer last night finally jumped on the “sell-into-strength” bandwagon. That either means that the market will truly cave as the summer wears on or, since he’s been wrong so often, the market may be near finding its bottom.

Take, for example, the defensive trades he recommended last night. Specifically, his call to sell (can I say, sell short) Apple (AAPL). Had it been made 6 months ago, at the beginning of the year. As a matter of fact, AAPL has been one of the stocks I have been shorting, off and on, since May.

The stock is down 35% from that January high … and since then, until last night, he promoted the stock. According to Thierry Martin’s unofficial record of Cramer’s recommendations, buy or sell, on radio, Madmoney TV show, Stop Trading segment or Lightening Rounds (search his CramersMadMoney.com), Cramer commented 18 times since mid-April, twice indicated a $100 target price and only once … last night … recommended a sell:

Date Where Buy or Sell Comment
12-Apr MadMoney Buy
19-Apr Lightening Buy $100 Target
25-Apr Radio Buy
2-May Radio Buy
3-May Radio Buy
16-May MadMoney Buy
17-May Radio Buy
23-May Stop Trading Buy
25-May Radio Buy
26-May Radio Buy $100 Target
1-Jun Lightening Buy
5-Jun Radio Buy
8-Jun Radio Buy
9-Jun Radio Buy
13-Jun MadMoney Buy Featured
15-Jun Radio Buy
16-Jun Radio Buy
10-Jul Radio Buy Lont-Term Buy
11-Jul MadMoney Sell

Sounds no better than Mary Meeker, Jack Grubman, Henry Blodget and other “super-star” stock analysts on the tech bubble era, doesn’t it? Is it a belated mea culpa, face saving c.y.a. or just self-serving conflict of interest?

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  • Gap Trader

    I remember the first time I heard about Cramer. He took out a full page advertisement in IBD making a bold prediction that the market was going to turn. And sure enough it did. That must have been about 10 years ago (I’d guess).

    That was before he was famous and rich, though. Now, I’d agree with you that one can do better using him as a contra indicator.