The bears got it wrong, says Jim Cramer. When good companies get slammed on earnings, it pays to be a bull.
At the peak of the doom and gloom is when you need to be thinking about what could go right, Jim Cramer told his Mad Money viewers Tuesday. In this market, that time was just over a week ago, when the bears assumed everything was going to go wrong.
The bears got a lot of things wrong in the haste to send stocks lower. First, they assumed Russia’s war machine was a lot stronger than it actually is. That incorrect assumption was coupled with equally incorrect assumption that Ukraine’s people, and its government, would head for the hills at the first sign of trouble. Neither of these things proved to be true.
The bears also got the Federal Reserve incorrect, predicting that the only way to slow inflation was to wreck our economy.
Lastly, some of the bears turned to technical analysis, latching onto the dreaded “death cross” as a sign that recession was all but certain. But, as Cramer noted, the so-called death cross only resulted in a recession six of the past 12 times its appeared. Those bears should have instead used chartist Larry Williams’ indicators, which have predicted bull moves like the one we’re experiencing now, 21 of the past 21 times it has appeared.
That’s why when good companies get slammed on earnings, as Adobe Systems (ADBE) – Get Adobe Inc. Report did last week, it pays to be a bull. Shares of Adobe are now above where they traded before reporting, making the post-earnings dip a huge buying opportunity.
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