Washington's like a giant infection, a contagion that's working its way up to Wall Street, and I want to cordon the whole joint off. We are letting its negativity, its anger and rancor and totally nihilist, disgusting mores influence our thinking and I want it stopped right here, right now.
Today's total breakdown of the most basic campaign promise, healthcare reform, has cast a pall over everything. No, I am not talking about a return to Camelot, or even to the age when Ronald Reagan would reach out to House Speaker Tip O'Neill and get something done. I just think their inability to accomplish anything at all has made it so we are beginning to look at the results of our great American companies with way too jaundiced an eye.
This negative is coming out in two ways. First, buyers only have love for a fistful of companies viewed as immune not just to Washington, but anything in any realm of business or walk of life. You know who I am talking about: FANG. Netflix (NFLX) reported an unbelievably good subscriber number last night and gave fabulous guidance. Now the stocks that make up FANG, through an ETF, of all things -- darn I wish I hadn't come up with that stupid acronym -- are all trading together, joined at the hip! A 20-point gain in Netflix produces large increases in the stocks of Facebook (FB) , Amazon (AMZN) and Google, now Alphabet (GOOGL) , even as there's no news on Facebook and several analysts actually cut numbers for Alphabet off the European fine. Plus, one analyst actually suggested Amazon could disappoint when it reports because of a possible slowdown in Amazon Web Services, something I don't think will happen. Obviously, others don't either or its stock wouldn't be soaring.
That's why I want to sing the praises of a bunch of companies that have reported, something that I think would be happening if the swamp hadn't overcome our minds and made us way too negative about some really incredible earnings.
Let's start with the banks, because you know I think this group represents value. Somehow, in some way, this market has decided that JPMorgan (JPM) didn't have a good quarter and that Citigroup (C) , Bank of America (BAC) and Goldman Sachs (GS) weren't much better.
I dare to take the other side of the trade. These companies are doing incredibly well. I can't believe how much money JPMorgan is making and how strong its lending and commercial operations are. But what was the takeaway?
I think it was CEO Jamie Dimon's totally justified fit of pique replete with an actual expletive, the only time I have ever heard one since former Enron CEO Jeff Skilling cursed when his charade of a company was being exposed for what it was.
"We have become one of the most bureaucratic, confusing, litigious societies on the planet," Dimon groused on the call. "It's almost an embarrassment being an American citizen traveling around the word listening to the stupid (expletive deleted) we have to deal with in this country. And at one point we have to get our act together or we won't do what we're supposed to do for the average American."
I loved the screed. Loved it. However, it linked this amazing quarter forever with the nonsense of Washington. I begged to differ. JPMorgan's quarter, along with Citi's and Bank of America's, are splendid examples of how well banks can run even without one ounce of help from the federal government. Our banks are so much stronger than every other country's banks, despite Washington. I worked at Goldman Sachs, so take what I say with a grain of salt, but I can't believe how much money this firm can make even with nothing good happening in almost any market, especially equities, which just killed it. All of those stocks are just plain buys.
Then how about United Health (UNH) ? My go-to analyst for years and years for this stock is Sheryl Skolnick from Mizuho, and I can tell you she says this quarter hit on every cylinder. She called it an "outstanding report" and "the more broken healthcare is, the better it is for United Health," because the company "is uniquely positioned to fix it and make money doing it." This company has a stunning 17-year earnings per share compound annual growth rate of 19% and this quarter's growth exceeded that.
Skolnick goes on to say, "When folks stop complaining about health reform's failure, they'll figure that out."
United Health is a buy.
Today Lockheed Martin (LMT) reported a stupendous quarter, $3.23 per share vs. the Street's estimate of $3.11, and then boosted its forecast for sales and earnings per share. This company's generating $6 billion in cash and returning scads of it. But the lion's share of its profit comes from, you guessed it, Washington, and who in heck wants to be chained to these do-nothing embarrassments?
Then there's Johnson & Johnson (JNJ) , which gave you an amazing beat and raise and made you recognize why this stock and this company remain first in the hearts of millions given its fantastic balance sheet and excellent management. Yet initially the stock went down as we heard that Obamacare or the Affordable Care Act, or whatever you want to call it, wasn't going to be reformed. It's pathetic. At least on the conference call the company was able repeatedly to say the second half will be very strong, a stance that dared people to sell the darned thing and it turned the stock around.
Still, I wonder if these embarrassments in Washington recognize what the heck they are doing to the capital markets and to the psyche of the investor. You simply do not want to own anything that's levered to this nation's prospects. Hence the headlong rush into Facebook, Amazon, Netflix and Alphabet as well as fellow travelers Adobe (ADBE) , Priceline (PCLN) , Broadcom (AVGO) and, of course, Nvidia (NVDA) . (Facebook, Alphabet, Citi, Adobe and Broadcom are part of TheStreet's Action Alerts PLUS portfolio.)
Look, it's incredibly gloomy. You see these people in ties and jackets from Washington coming on television talking about how bad everything is. They could bring down the most optimistic people on Earth.
Here's the problem: If you own stocks, you have to be optimistic. It's a matter of faith. You would be hard-pressed to own a stock if you thought our nation was a colossal joke. That's why Facebook, Amazon, Netflix and Alphabet can go higher. They are the "in spite of" stocks, the stocks of companies run by people who are so smart and so independent of this country that they can go up even in the face of the travesty of a mockery of a sham that the do-nothing Capitol has become.
I know I can't bust the gloom myself. I am simply saying do not trust the muted reactions we are seeing to these amazing results. Do not say, "This is a narrow market because only FANG is going higher." Instead say, "Let me go back over these quarters without thinking about how shameful Washington has become." If you do, you'd be a buyer, not a seller of all these stocks. And that's precisely what you should be doing.
Eat, Drink and Talk Money With Jim Cramer
Meet Jim Cramer at an exclusive reception at his Bar San Miguel in Brooklyn, N.Y., on Tuesday, July 25, from 6:30 to 9 p.m. ET.
The evening will start with a screening of Jim's CNBC show Mad Money. Afterward, Jim will join the party fresh off of the CNBC set to mingle, take photos and answer your investing questions.
Tickets include dinner, drinks and an autographed copy of Jim's book Get Rich Carefully.
Click here for more information or to buy tickets.
Where: Bar San Miguel, 307 Smith St., Brooklyn, N.Y.
When: Tuesday, July 25, 6:30 to 9 p.m. ET