Cramer's 'Mad Money' Recap: Stocks Still Make Sense
NEW YORK (TheStreet) -- The easy money may have already been made, but there's still plenty of harder money to go around, Jim Cramer told his "Mad Money" TV show viewers Thursday, as the markets reached new all-time highs. Yes, he said, there are still profits ahead of us.
Cramer said that while the bears may argue the markets' sensational rally from its 2009 lows are nothing but artificial inflation caused by the Federal Reserve, in reality this argument has nothing to do with making money. When you go to the bank to make a deposit, they never ask whether the money was made in legitimate or "artificial" markets, they accept it either way.
The lesson to be learned from 2009 until now is that once again, panic is not an investment strategy and is never acceptable. The bears have pronounced the markets dead time and time again, only to be wrong time and time again. In 2008, there was indeed systemic risk to the markets, which is why Cramer called for investors to head for the hills.
But after a 50% haircut in the Dow Jones Industrial Average and the Federal Reserve proclaiming that no more banks will be failing, that risk was removed, and it's been all systems go ever since.
Why do stocks still make sense in today's market? Cramer said its because they've proven to institutional and individual investors alike that they can withstand rising interest rates, weakness in Europe and trouble elsewhere in the world and still flourish. Meanwhile, other asset classes, like gold and real estate, have proven to be tricky and not ones to be relied upon.
That's why Cramer said that with stocks back on the front page, he still thinks there are plenty of profits yet to be made.
The initial public offering market continues to be red hot, and is perhaps the only place where the markets are essentially handing out free money, Cramer told viewers.
Cramer said the second quarter proved to be one of the best quarters ever for IPOs, with 61 deals netting investors on average a 21% return compared to just 2.4% or the S&P 500 during the same period. Making matters even better, a full nine out 10 IPOs last quarter weren't even profitable.