pro-maga pundit tucker carlson recently criticized anti-maga jim cramer's BUY/SELL calls on stocks. tucker is like criticizing michael jordan for missing 50% of his shots. showing examples of cramer's bad calls is like showing clips of michael jordan missing shots. in this article, i will explain why tucker is wrong. this article highlights the tendency of magas to be illogical and misinformed. if you wish to be informed, read my other article: https://ian-crystal.blogspot.com/2023/10/you-are-maga.html. it will blow your mind.
cramer is actually the best teacher when it comes to investing. deciding when to buy and sell a stock is just a small part of the investment game. the difficult part in investing is finding a THESIS. cramer taught me how to find a good investment thesis and how to trade around it. investing is not really a stock picking game. it's more of a thesis hunting game. but the most important thing cramer taught me is how to know when a thesis is broken and get out of a stock entirely.
if you are a cramer disciple like me, you will actually be HAPPY if a stock you just bought immediately goes DOWN after you bought it. keep in mind everything you know about a stock is PUBLIC. that means after you confirm your thesis is good, that means the entire world also knows about it. that means the big money has already been made and the stock will most likely be stuck in a trading range for a while.
i did get in very early in the AI bull market but it was just dumb luck. i bought nvda at $19 (split adjusted) on april 21, 2022. i did not know anything about the AI revolution at that time. the market including cramer was recommending a sell on nvidia because the US government was banning sales of its high end chips to china. i went against the grain and considered it good news. i speculated that the ban means nvidia's TECHNOLOGY is SUPERIOR which means it will eventually dominate the US market and offset any loss from the china ban. luckily, i was correct.
but you don't need a stock to skyrocket to make lots of money. you can make lots of money even if a stock stays within a range by RANGE TRADING the ups and downs. that's why cramer always tells you to first buy 1/4 of your intended position and buy some more as it goes down. so if you buy only 1/4 of your intended position and the stock immediately DOUBLES and gets stuck there for a very long time, you really didn't make that much money. but if the stock keeps going down and up within a range, then you make lots of money. that's why you should be happy if the stock you just bought goes down immediately. tucker does not know what he is talking about when he says most of cramer's buy recommendations goes down.
i usually have around a dozen theses. a thesis is like a life of a person. there really is no such thing as a correct or wrong thesis. they differ in QUALITY of LIFE. it's very difficult to know if your thesis is broken. usually, the stocks are already down 50% before you realize your thesis is broken and need to get out entirely. remember everything you know is public. so by the time you are convinced your thesis is broken, the stocks have already been crushed. but i never have to worry because i'm still making lots of money from my other theses. in investing, you don't need to be correct all the time. you just have to be correct most of the time
even if a thesis is BROKEN, it's very possible that you already made enough money trading the ups and downs. i think there was just 1 thesis where i did not make money. that was the renewable energy thesis in early 2010's. but i did not lose that much because i already made enough money range trading the stocks for 2 years.
my most important advice is to NEVER range TRADE a SPECULATIVE stock. speculatives are usually small companies with no profit. a speculative can be part of a thesis but you should only buy ONCE. never buy again if it goes down. if it goes to zero, let it go to zero. i never care if my speculative stock goes to zero because it's just 1% of my portfolio. however, you should always sell half every time a speculative stock doubles (it's called playing with house money).
investing is actually easy. just read my blog article: https://ian-crystal.blogspot.com/2015/06/investing-for-dummies.html. i haven't updated my investing blog in quite a while but the following are my theses that are still alive:
- AI (nvda, avgo, arm)
- glp-1/diabetes (lly)
- cancer (azn, mrna (speculative))
- medical devices (ew, isrg, geh)
- tik tok ban (meta)
- gig economy (abnb, uber, lyft)
- ecommerce (amzn, ebay, fdx, xpo, pld)
- cloud (goog, msft, crm)
- cashless society (v, ma) avoid fintech and paypal because too much competition
- 5G (aapl, vz, tmus, avgo, swks,amt, cci, mrvl)
- humanization of pets (zts, idexx, avoid pet stores and pet foods because they have no moat)
- oil and coal downtrend (fslr, alb, tsla, pcrfy)
- cybersecurity (panw, crwd)
- protein (tsn, cmg, wing)
- water (awk)
- legalization of marijuana (smg)
- life is short travel/leisure (ba,rcl,bkng,nclh,fun)
- dying movie theaters (nflx)
- filipino resiliency (ephe)
the following are my BROKEN theses:
- coffee the legal drug (sbux) too much competition
- work from home (logi, docu, zoom)
- lng (lng) - get back in if trump wins
- warmongers (lmt, rtx) get back in if trump loses
- in-flight wifi (gogo)
- covid vaccines (pfe)
- programmable chips (xlnx, altr) not broken but no more pure play because xlnx was bought by amd and altra was bought by intc)
most of tucker's videos are awesome but his video about cramer is GARBAGE. this is why i feel sorry for podcasters, talk show hosts, and vloggers. they need to keep putting out stuff but there's really not much new stuff to put out there. so they usually end up being redundant and scavenging for scraps. they may be rich and famous but we all know that is not really important in life. same with musicians and film makers. the world has already ran out of new ideas. everything is just recycled. i actually feel more lucky because i never run out of exciting ideas to help mankind. my only problem is i don't have enough time to implement them all. cramer is also lucky because market dynamics are always changing so there are always tons of exciting new stuff for him to talk about.
if i'm always outperforming the big fund managers, why can't i be a fund manager and earn millions without risking my own money? because it's like me outperforming CONTAINER SHIP captain paca because i can turn my JETSKI around in 3 seconds while it takes 30 minutes for captain paca to turn his ship around. it's true i'm outperforming captain paca but i'm just riding a jet ski while captain paca is carrying tons and tons of goods.
fund managers are SUPER SMART. they belong to a different league. i'm just like a parasite feeding of their very predictable moves. big fund managers cannot follow my strategy of range trading the small ups and downs because their trades have to be HUGE. example, if they want to include apple in their portfolio, it would take many days or even months to establish a position. that's because everytime you buy, there has to be a seller. and everytime you sell, there has to be a buyer. so if a big fund manager buys all at once, it will move apple's stock 10%. but if they are following my strategy of range trading the 5% ups and downs, the fund manager will end up losing money.
also note that if you are buying apple, that means something good is happening to apple. and if something good is happening to apple, there won't be ENOUGH SELLERS. if you are managing a $500 million fund and you only buy $10k worth of apple, it would be useles. even if apple quadruples, your fund will only grow 0.01%. your clients are better off parking their money in US treasuries which are guaranteed to make 4% per year.
that is why i can't take money from friends who want me to play their money in the stock market. the more money i manage, the less i perform because i would need to BUY at prices HIGHER than the market price, and i would need to SELL at prices LOWER than the market price.
also note that even if i make 20% a year and a big fund manager only makes 10%, the fund manager actually outperformed me. that's because stocks are only 25% of my net worth. because i'm dumb, i have to play it safe and DIVERSIFY across all asset classes. this means a 20% growth in my stock portfolio is only just a 5% growth in my overall networth.
the question now is, why won't many individual investors follow my strategy? actually i learned my strategy from jim cramer so i'm sure many individual investors are also using the same strategy. so then you might ask, isn't a CROWDED TRADE always a bad trade? the term "crowded" is relative. the number of investors using my strategy is still very tiny relative to the overall market. however, as more and more people follow my strategy, my strategy becomes less and less effective because my trades will become more and more crowded.
but i don't think my strategy will ever become crowded because my situaion is very RARE. if you read the biographical articles in my blog, you will know i made my wealth from dumb luck. if i'm really talented, i would still be working right now so i won't have time to range trade. most people who retire early would have a nest egg that is too big to follow my strategy. if they limit their stock portfolio to let's say only 5% of their nest egg so that they can effectively follow my strategy, then it won't be worth their time because a 20% increase would only translate to a 1% increase in their nest egg.
for the few who are in the same situation as me, most likely they won't have the discipline to follow my strategy. my strategy is actually very BORING. it's like watching hair grow. most people would rather play heavily in speculatives or do options trading. that's like gambling at the casino. as i said in my article "investing for dummies", whenever a successful trade makes me celebrate, that means i'm being too risky. i need to lighten up my trades or else i could end up getting hurt. my motto is "be boring".
(for more of my knowledge bombs, click the "ian's knowledge bombs" banner at the top of this article and choose any article in the table of contents that piques your interest)
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