Cramer's 'Mad Money' Recap: Don't Panic!
NEW YORK ( TheStreet) -- There's always a better time to sell than into a market panic, Jim Cramer reminded "Mad Money" viewers Monday as he commented on the market's huge losses, the worst day in nearly three months.
Cramer said that even if your outlook on the markets is negative, never ever sell stocks in the middle of a big move to the downside. Why? Because selloffs like those seen last week are always overdone to the downside, said Cramer, and within a few days there will be a rally, a moment of strength, where investors can lighten their loads and sell at far better prices.
Cramer recalled learning this lesson the hard way back in his hedge fund days. He said the markets are largely controlled by traders, those who can get in and out of the market quickly. So even if there are "experts" on TV saying to sell everything, that advice likely doesn't apply to the individual investor with longer-term investment goals.
So while this most recent weakness was caused by a misreading of the Federal Reserve minutes last week and further fueled by weakness in Europe, Cramer said it would be foolish to sell down here and raise cash. Use moments of strength like we saw this morning and sell into strength.
Cramer said the goal is to always buy at a good price and sell at a better one, which is why selling when the market is down over 200 points is never the right move.
Living at the High End
The rich are different from you and me, as F. Scott Fitzgerald wrote, and that's why companies that cater to the rich have stocks that are different, too. To that end, Cramer introduced his "Great Gatsby" index of luxury stocks. He said the list is not necessarily a list of stocks to go out and buy right now, but a way to measure the buying power of the high-end consumer.
On its conference call, Nordstrom said it sees no slowing in the spending of its customers, which is why it was able to deliver a six-cent-a-share earnings beat on strong same-store sales, with positive guidance to boot. Cramer said Nordstrom is expanding into Canada as well as beefing up its Web and mobile businesses to help further bolster sales.
Ralph Lauren is another terrific high-end brand, Cramer said, a company that delivered a 22-cent-a-share earnings beat. Coach (COH) may have fallen behind with its fashions, but not so with Ralph Lauren.