Scott Mlyn | CNBC
(This article was first sent to CNBC Investing Club members with Jim Cramer. To get real-time updates delivered to your inbox, subscribe here.)
You can “blame” the easy money for the strong advance in stocks this year. You can say that stocks are the “only game in town”. You can understand that companies are stronger than ever because business is so strong and the Fed is keeping rates low.
Me? I think these “excuses” for a strong market have misled so many people that they are a reminder that “good is good” not bad, as so many so-called sages would tell you that we have to listen to all day.
We live in a Cinderella world where so many people expect midnight to change everything from hope to disaster. The litany of what was supposed to explode in our faces made stock ownership feel like a game of cups, when short selling turned out to be the game of cups – the intellectual equivalent of who can best map a flat world.
Will 2022 be any different? The Fed won’t be that easy. PSPC bankers and kings will continue to pump unwanted prices to entice them, but lure is the real bear trap of this market. Most of the companies that have gone public are conceptual, while I have perhaps reiterated too often that 2022 will be the year of the tangible, the practical and the profitable.
There will occasionally be an insanely good offer – like Endeavor Group Holdings (full disclosure, my agent) or Dutch Bros. Coffee – but most of the deals were just using the stock market as a branding opportunity that many fell for. These are the companies that counted as an opportunity to sell you something that made them money, not you. They are not called out either because so many people think it is not their job to do so.
Why am I calling them? Because I don’t play for dinner.
Why I like the market setup for 2022
I like the setup for 2022 because many don’t. I like it because the opportunities to buy winners and ride larger ETFs are too great, and because so many companies will turn out to have stocks that are too weak, especially banks, retailers and corporations. oil. I love it because I believe the omicron Covid-19 variant is crossing the country fast with few deaths and more people joining the workforce. I also think the companies that took advantage of the high prices to expand did so suddenly, which will cause prices to drop in so many industries that it will make you wonder how bad the Fed really needs to be. tight.
What about the technology? Well, there’s not much here because of the trash the street has sold us. Beware of anything that sells at a “times the sales” valuation – with the exception of Snowflake, who has a brilliant role model with a great CEO, Frank Slootman.
And again, we’ll learn just how overvalued FAANG and his friends are, with judgments offered by those who don’t know what these companies are doing.
Could it all fall apart? Hope this is the case, so that we can buy stocks even cheaper than they are.
We will have to sell stocks to attract lifters. We’ll have to go through PayPal (PYPL) and Wynn Resorts (WYNN) – I think those are dead money. The difficulties of lost opportunities for Boeing (BA) in just about every line of business – all self-inflicted for that matter – should improve soon. The chance for Omicron to make it through will also make Disney (DIS) a decent risk.
Remember, I mention the bad ones because the good ones take care of themselves.
If you ask me what will be the most exciting thing for 2022, it’s simple: the chance to teach thousands of people how to manage their own portfolios. We’ll be so inventive about this next year that I think you’ll wonder how you couldn’t be a member because you’re going to miss it too much. I am of teaching age. I don’t want your money or your commissions, I’m not taking my share.
I just want us to be all better in analysis, thought, and discipline; be more rigorous than us. Why not make it aspiration?
With that, happy new year and see you soon in 2022.
The CNBC Investing Club is now the official headquarters of my charity. This is the place where you can see every move we make for the portfolio and get my market snapshot before anyone else. The Charitable Trust and my writings are no longer affiliated with Action Alerts Plus in any way.
As a CNBC Investing Club Subscriber with Jim Cramer, you will receive a Trade Alert before Jim completes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling any stock in his charitable trust portfolio. If Jim has mentioned a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. See here for investment disclaimer.
(Jim Cramer’s Charitable Trust is long BA, PYPL, WYNN, DIS.)