• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Jim Cramer

Jim Cramer: Don't Be an Armageddonist and Live in Fear of a Crash

Having a bad game does not mean you quit forever. It just means it is time to regroup and rethink strategy.
By JIM CRAMER Dec 03, 2019 | 06:39 AM EST
Stocks quotes in this article: WDAY, ZM, NVDA, JNJ, OKTA

You are sitting there glued to the tape. Epoxie'd even. Because you know it is going down. You can see stocks that are the new stalwarts, the Workdays (WDAY)  and the Oktas (OKTA)  the Zoom Videos (ZM) and the Nvidias (NVDA) getting their heads handed to them. They're being driven into the ground by 400 pound shortselling lineman. Then you watch the biotechs just getting pummeled, with nary a ref around to stop them from being obliterated. The FAANGS are being de-fanged like a wide receiver's mouth sans mouth guard, defenseless after a dangerous crossing play.

And you say to yourself, get me out of here. Not only do I not want to be on field, not only do I not want to be on the hotseat, I don't want to be in the stands.

So why not leave? Why not give up your roster spot, let alone your season ticket?

Because if you do that you might not get back in, that's why. It's entirely possible that this moment, this game, will pass, and you will have found yourself like so many other people I know who got out at Dow 1000 when I started, Dow 1400 after '87, or any of the myriad millennial milestones from 2009 onward.

You can't afford to be what JP Morgan's brilliant Michael Cembalest, my favorite strategist, calls an "armageddonist " someone who makes the grand sweeping gesture to head to the parking lot to beat the traffic and, feeling fabulous that he missed the last part of that beatdown and made it home an hour earlier than the hapless fans who endured, declares that the fun is forever over. Yes, the early exiter, so excited about not being stuck in a bottleneck like the hapless fools behind him, now says the whole move was propped up by the Fed, or the president, or the momentum players, or the covering shortsellers or the algorithmic mindless buy programs.

If you feel it is heading lower, as it looks, if you are watching your screen and seeing Mr. Mayhem as he cuts his swath, why not leave before his grim reaping hands get to you?

Simple: October of 1987. The week before the crash, the one that took the stock market from Dow 2500 to Dow 1400 in a couple of days. Those who followed my performance back then recall that I had been shaking, watching stocks tumble like so many 0 and 12 teams, seemingly tanking to get the first draft choice, except there is no draft in this game. I got out alive, with just 100 puts on Johnson & Johnson (JNJ) , a bet against one of my favorite stocks that had really just been insurance against an existing position that I had blown out of because of my fear.

You know what? I was a wunderkind by Tuesday when the market had been virtually cut in half., In fact, the puts on Johnson & Johnson made it so I was one of the rarest of birds, an ornithologist's dream, someone who not only owned no stocks for the crash, but I had made a bet against America's greatest drug company and quintupled it overnight. Talk about unusual option activity!

Yet, those of you going all armageddonist, in pure homage to Cembalest, here's what you might not know.

There were probably about a half-dozen high-profile managers who were on TV and in all of the papers back then for calling the crash. They lived off of it, for weeks, then months -- then even years, as reporters are suckers for bears. Sometimes, they need them as props to support their own views, other times they just need them for dramatic effect. Ha.

Me?

I didn't know any better. I got back in. Slowly. In retrospect not fast enough. Any faster and I actually feared I would be known as a foolish dip buyer ahead of a recession the market was predicting -- a recession that never came. What can I say? I am a pragmatist, not a dogmatist. I saw things I like.

It was right. A year later, there were more bears than ever even as the market clawed back, clawed back to the point where if you had bought the most active stocks that Friday before Black Monday, you would have actually been up on the year.

So I need you to think about that before you decide you are brilliant and you want not only to beat the traffic but not renew your season tickets. Sure, the next game could be abysmal. Maybe the game after that. But the sport? It goes on with or without you and, believe me, once again it will be better with you than the other way around.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long NVDA.

TAGS: Economy | Funds | Indexes | Investing | Markets | Trading | Jim Cramer | U.S. Equity |

More from Jim Cramer

Jim Cramer: I'll Put My Money With 'Boring but Lucrative' Any Day

Jim Cramer
Sep 29, 2021 1:28 PM EDT

Let's look at that recent downgrade of 'dull' Morgan Stanley and see why exciting is best left for the stadiums and amusement parks -- and not stocks.

Jim Cramer: America's Toughest Job? Finding Workers

Jim Cramer
Sep 28, 2021 12:17 PM EDT

It's the question of our time: Where are the people willing to take on these better paying gigs? Let's see what's going on and what we need to happen.

Jim Cramer: Here's How Analysts Can Be Off By a Wide Margin

Jim Cramer
Sep 24, 2021 12:02 PM EDT

Let's look at the reactions to Nike, Costco and Salesforce to see what happens when they're viewed from a real world perspective.

Jim Cramer: It's Pure Insanity That We Don't Make Chips Here in the U.S.

Jim Cramer
Sep 23, 2021 11:05 AM EDT

While the big guns meet at the White House about the global chip shortage, the president and these companies are approaching this all wrong.

Jim Cramer: Go Ahead, Have a Cow, but I Say Powell and Xi Are Bulls

Jim Cramer
Sep 22, 2021 3:51 PM EDT

We rallied, because China's President Xi and Fed Chair Powell made decisions that they knew would lead to rallies.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:04 AM EDT PAUL PRICE

    Two Good Signs -- Especially for Small-Cap Investors

  • 12:10 AM EDT PAUL PRICE

    More Insider Buying in American Woodmark (AMWD)

    American Woodmark , which I've discussed here fr...
  • 08:55 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The 10 personality traits of successful traders an...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login