Get it all out. Get out all of the bad news. That's what I like about what happened with Allergan (AGN) today where everyone is learning about what we have said endlessly in Action Alerts PLUS, which is that Allergan plc was eventually going to lose its dry-eye Restasis exclusivity -- and it happened yesterday. Good, now the stock is selling at 12x earnings.
I like that GE (GE) has prepped the Street for an earnings reset, with Goldman Sachs correctly saying that a dividend cut would be a godsend. Look, GE was wrecked by a series of what we now know was a disastrous set of acquisitions and dispositions all done at the wrong time, a colossal case study in wealth destruction by a team of people -- not just the CEO, but a CFO and a previous CFO that pretty much disregarded conventional wisdom in how to report earnings, and doing everything they legally could to obscure the mess.
I am betting that new CEO John Flannery intends to have GE report like Honeywell International Inc (HON) or United Technologies Corp (UTX) , or any of the other industrials that have done so well -- and that's how the company will be rebuilt. "No gain without pain."
Get it out: That's what all the banks did going into the quarter, endlessly telling you what was going to be weak, and then when you saw the numbers, you could say, hmm, those aren't so weak. Remember, do not take your cue from the trading. That would send you the wrong way. I think Wells Fargo (WFC) has bottomed, Citigroup (C) is a buy, JP Morgan Chase & Co (JPM) and Bank of America (BAC) are incredibly solid, Morgan Stanley (MS) deserves a dramatically higher price-to-earnings model than 13x, given how smooth its numbers are, and wait until the Goldman Sachs (GS) selling window, which opens now, gets nailed shut a week from now -- and then you can buy it.
Get it out: Johnson & Johnson (JNJ) told you for months that it was going to solve its weakness in medical devices and consumer products, and it was going to hasten the growth of pharma. Some analysts took this as a sign that things were going to go awry. Wrong. The numbers were spectacular -- and where else do you get 15% sustainable pharmaceutical growth for a paltry 17x earnings.
Get it out: For a year now Emerson Electric Co (EMR) has said, not yet, not yet, not yet. But now it is time and this industrial is just beginning its run. I like it, even up here.
Get it out: UnitedHealth Group Inc UNH -- and the whole group -- have been gripped by the problems with the affordable Care Act (ACA). They have said it endlessly. Well, look what UnitedHealth can do without the ACA exposure. Can you believe that this company has 22% growth? I mean it is crazy, and it's a brand new CEO.
These are all examples of how management has been ahead of the bad news and it has allowed the stocks to prosper when they report. It's why I say that perhaps the market is not as expensive as it seems.
Now the question is, has IBM (IBM) gotten all the bad news out? Have we seen a crossover to revenue growth, or at least a path to one? That would be the real shocker. Who knows? Stranger Things have happened and Stranger Things 2 is about to ramp!
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Join Jim Cramer, CNBC's Jon Najarian and Other Experts Oct. 28 in New York
Jim Cramer will host CNBC's Jon Najarian, TD Ameritrade's JJ Kinahan, famed analytics expert Marc Chaikin and other market mavens on Oct. 28 in New York City to share successful strategies for active investors.
You can join them as they discuss how smart investors can make the most of options trading, futures contracts, fundamental and quantitative analysis and great ETFs to buy right now. Participants will also get a chance to meet Jim and other panelists and take photos.
When: Saturday, Oct. 28, 8 a.m.-3 p.m.
Where: The Harvard Club of New York, 35 West 44th St., New York, N.Y.
Cost: $250 per person.
Click here for the full conference agenda or to reserve your seat now.
