Radioactive. Don't touch it. Only bad things will happen.
That's what went through my mind when someone placed a Dow 20,000 cap on my desk at Post Nine at the New York Stock Exchange.
The Youtube video had already played out in my mind: "Jim Cramer dons a Dow 20,000 hat and promptly market rolls over." Or, worse, #hashtag moron: "Cramer slaps on Dow 20,000 hat just before big plunge."
There, to run endlessly. Just not worth it. Don't celebrate a milestone, I said to myself; it just might be your last one for a while.
Ever since Dow 10,000 back in March of 1999 and Nasdaq 5000 the following year, I have been wary of promoting any actual impact, or cheerleading for either breakout. No clapping, no fist pumping, no hands in the air.
The downside risk's way too big. The upside: nil. People have been so burned by both indices and stocks in general, that every milestone takeout seems fraught with instant replay showing you at your worst if the breakout becomes the top.
Things are just way too asymmetrical. If the averages keep going up -- big deal, you wore the hat. If the go down, you have to eat the hat.
So I go about noting it in other ways, assessing which stocks led the charge, the way we focus on Dow stocks Visa (V) and Home Depot (HD) and Action Alerts PLUS charity portfolio holding Apple (AAPL) being such standouts from Dow 10,000 to Dow 20,000.
You have to do it clinically, because at any given time, if the stocks get truly overheated, you have to be willing to cut and run. Even then it's dangerous. When the most aggressive stocks in the Nasdaq took off and pushed that index from 4000 to 5000 in lightning speed, stocks I liked as they went up, I pulled the plug within a few days of the top and urged people to go into bonds.
But the tape, so to speak, only shows me recommending stocks that then had a 20% rise in no time and of those who heard me champion these stocks, many didn't get the sell call, even as I tried to make it as loud as I could in thestreet.com. I wasn't on CNBC back then.
So, the onus is on keeping that hat as far away as possible.
But that must never mean keeping all stocks as far away as possible. At Dow 20,000 you look for anomalies, stocks that aren't too late to get in on, that aren't up as much as they should be vs. the fundamentals, and you recommend them. At the same time, you tell people to avoid what could hurt: in this case, retail and drugs, the first because of secular issues involving Growth Seeker portfolio name Amazon (AMZN) and a potential boarder tax and the second because of our tweeting president, who thinks that health care companies have gotten away with murder.
Most important, though, you can't abdicate. You can't offer nothing. Yet that's exactly what most people do. When I listened to people come on television since Trump was elected I heard a wave of incredulous negativity, the sugar high, the it's-all-got-to-end badly folks drown out anyone who is constructive. They are part and parcel of the problem of the average stock holder fleeing. They are binary: you are either in an S&P 500 fund or you are out. Gone are the days when many come on and say, "here's some undervalued stocks, and here's why and they can do well regardless of Washington or the hoopla."
My point? Don't celebrate. But don't abdicate. Roll up your sleeves. Find undervalued stocks of good companies and recommend them and stay on top of them, and that's helpful. Anything that's tepid or wishy-washy or just plain old cautious has been wrong for 19,000 Dow points in my career, most importantly the last 10,000.
My philosophy: be constructively value-added despite the hat. Don't cheerlead, but don't sow fear and don't dismiss. It's just as important to keep people out as put people in -- except the first has been wrong and the second had been right.