Don't be scared out of this coiled spring of a market by know-nothing naysayers

CNBC

a day ago

The following passage was part of Jim Cramer's prepared introduction to Thursday's August monthly meeting of the CNBC Investing Club. Periodically, we are in moments like we find ourselves in now. All over America, there are portfolio managers who, for one reason or another, do not like this market. Maybe they have kept an unusual amount of cash because they were worried about the impact of tariffs on the economy. Perhaps, they thought it was time to stay away from the stock market because there's too much federal debt, and the "big beautiful bill" just made things a lot worse. Maybe they hated President Donald Trump and couldn't imagine stocks rallying, given all the uncertainty he creates while mouthing the useless shibboleth that markets hate uncertainty. Markets hating uncertainty is nonsense. They don't hate uncertainty. I know that because there is never any certainty. It's such a ridiculous construct, but it always sounds good when you write letters to clients or when you come on television and explain why it is difficult to invest. No one ever challenges it. Interviewers just nod knowingly or bother to say "of course." Sure, there are moments like when the Covid pandemic struck or when the Great Depression rolled in that are terrible. But that's not because things are uncertain. It's because things are bad. Those are not good times to buy. They are good times to do nothing but hold some cash and wait, knowing that during the worst period of the last 50 years, the Great Recession from the 2008 financial crisis, you only had to wait four years to make back your money with the S & P 500 , and a lot faster if you owned nothing but growth stocks. That's not that long in the vast scheme of things, especially considering how much you made when the clouds lifted. We are in the polar opposite moment right now. We are in a flat-out good market — one in which, after that benign consumer price index Tuesday (and dismissal of Thursday's hot producer price index), we have Federal Reserve interest rate cuts ahead of us. Put that with a thawing initial public offering (IPO) market and an upswing in mergers and acquisitions (M & A), this fall could turn into one of the best bull markets in history. Sure, queue the usual catastrophe caveats, please, but I need you to know that those who have stayed away, kept too much cash on the sidelines, and are watching what's happening now are beginning to think they have no choice. They may have to buy no matter what because we are almost through the worst of what Trump can give us, the trade and tariff nightmare — and in its place, will be the spoils of the "big beautiful bill," the excitement of some strong IPOs, and the monstrous amount of M & A that are going to engulf us as surely as the drought of deals almost caused us to die of thirst. I am sure that Trump has some tricks that are not yet up his sleeve, but I think he has settled back into his 2016 vibe of wanting higher stock prices as a sign of strength: Welcome back, President Trump. The hardest thing to do from here is to think about how a total dog of a stock, like a Bristol Myers Squibb , might look to another low-valued company, such as a Merck , with a stock that can't get outside of itself. Or how the two parts of DuPont might look to a private equity firm. Or, how a company like Wells Fargo may actually be allowed to buy a smaller series of banks because the bank-hating regulators who are now on their way out let JPMorgan get way too big versus everyone else, including Wells Fargo. (Jim Cramer's Charitable Trust is long BMY, DD, WFC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will 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 has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.