Mega plano orçamental foi promulgado por Trump

[Ulisses Pereira]

"What Bears Need in 2004"

By James J. Cramer
01/05/2004 08:44 AM EST


"Bears, let's talk realistically. You aren't going to win on valuation. It just doesn't work that way. You just don't get a market to roll over because it is "too high," even when it is too high.

Newer hedge fund managers as well as at-home traders who are trying to figure out the beginning of the year, please take note of this. Betting against a market with a head of steam simply because it has gone up a lot and is stretched when it comes to earnings doesn't work. It doesn't work because there always will be bulls out there who will justify their buys through some ridiculous logic. There are also whole mutual fund families that will advertise the heck out of their years to get past the Spitzer stuff and succeed. They don't care about anything other than raising assets anyway.


So, is being a bear a hopeless sport?

Far from it. You just need to have something to hang your hat on. Here's a bear's guide to 2004. I apologize in advance for the grisly nature of the checklist, but I said I was going to be realistic, so knowing that someone is just dying to take my stuff out of context, I still can't dodge the reality.

First, bears, you need the Federal Reserve to panic. You need to see a series of big employment numbers as well as wage gains and then a couple of big tightenings, including an intrameeting Fed tightening. That signals the Fed's in a hurry to get things back to where they should be. (And let's accept the basic bear contention that rates are way too low vs. the current economic activity.)

If the Fed doesn't panic? Then you will have to contend with an ever-rising market that will hit my targets before midyear. (See my review of how we'll get the next thousand points on the DJIA for my targets.)

Second -- OK, here's the stuff that will get taken out of context -- bears will need some sort of terrorist activity. I hesitate to say any more, not just because I despise the terrorists but because I think we all recognize exactly what I mean.

Third: Bears need to see some serious selling by insiders. I mean the kinds of secondaries that brought down the house in 2000. We don't have those yet.


Fourth, bears need some high-profile earnings disappointments. I mean the real deals: shortfalls at companies like Intel and Microsoft and Cisco and United Technologies and General Electric and Boeing. You aren't going to get them, though. You just aren't. Please be realistic about that.

Fifth, you bears need to see some bad news out of China. I can't even think of what this would entail, but you have to have something break the Chinese momentum.

Sixth, bears need to see some incredibly bad, non-Iraqi, stumble for President Bush. I say non-Iraqi because I don't think the country wants to cut and run in Iraq lest the terrorists take their activities to our shores. It seems like they really are tied up trying to kill people in Iraq now, not here or Israel.

Finally, bears need to see a spike, a big spike, in interest rates. You need to see this weak dollar turn into some sort of rout where rates rise dramatically. I think you need to see this happen before you can get bearish and you can't anticipate it because it most likely won't happen.

Difficult checklist? Actually not. Some of this stuff should occur this year. (But please, don't take any of these items out of context!) It just might not occur until we move much higher.

I can't emphasize enough, by the way, that I don't care if the bulls or bears win. If I thought the bears were going to have better odds in 2004, I simply would adjust and say it was time to raise a lot of cash. But I wouldn't do that until some of these negatives occurred. To be too early, to jump the gun ahead of when the negatives play out, could be too costly and put you too far behind to make it back later in the year."

(in www.realmoney.com)