Never have the bulls been more bashful and timid. Never have the bears been so ascendant and so wrong. Oh sure, the bears nailed Meta Platforms (META) and hit Microsoft (MSFT) out of the park. Amazon (AMZN) flopped. So did Alphabet (GOOGL). But when the bears — with the help of everyone in the media I know — tried to take down Apple (AAPL), they failed. Apple had an amazing quarter, but you had to actually understand something about Apple beyond the direction of the chart to get it right — and buy it hand over fist when the journalists took it down. Or let me put it another way: One month ago, when we went into October like slaughtered lambs, my friend Larry Williams, our greatest market historian today, said the bear was toast. He predicted one of the greatest rallies that we would ever see, led by the Dow Jones Industrial Average. And he was just dead right. Shockingly right. Now he saw historical parallels. I tried to incorporate as much as if his thinking as I could, but what I missed was clinging to some classic stocks that had made me so much money over the years, even decades. With the exception of Apple, they had to go. They still do, I fear, unless China changes, and China has become a horror show of a totalitarian nightmare. What did I miss? Simple: affection. The unwillingness to depart with companies that simply are the best we have. But that proved to be my biggest conundrum. The one thing I was certain about, for example, is that Nvidia (NVDA) has the most powerful chips in the world. The one thing I didn’t see coming is that President Joe Biden would know that and ban them from China. I was sure that when I spoke offline with consumer packaged goods companies about who they were advertising with the answer was easy: Amazon and Google. But that ended up being only one small piece of the puzzle. And costs. I got these wrong. Amazon’s and Google’s costs are too high, but I get the sense that’s over. You sell them now, you don’t realize that these companies are angry at themselves; they couldn’t go full stop in hiring, which is what they have to do . Apple: It should have been a terrible quarter. China’s a nightmare. The iPhone 14 is not supposed to be special. Service revenues were going to be weak. Here’s what was missing though: Those things were all true and it didn’t matter. They are the masters of 900 million subscribers and about a billion and a half happy customers who buy everything else that goes with the Macs or the iPhones, the two greatest Trojan Horses on earth. They are remarkable. When will people realize the greatness of the Apple management team? Sure, there is better technology, but it is enterprise tech. We want batteries that last longer. They have them. We want watches that stay away two days without charging. Done. We want amazing programming. Sure, coming right up. We want privacy because we think that everyone is taking us for granted and selling us out to advertisers. Okay, Apple will stop that, too. Here’s what Apple is: The good guys. Now let’s go over what else happened. A couple of trillion dollars came out of a handful of stocks and not all of it went into the 2-Year Treasurys. Some of that cash went into companies that don’t part with stock like it is tap water. They went to companies that know what to do when a recession is coming and they batten down the hatches before the storm, not after. The money went to the stocks of companies who buy their shares in the open market the way Silicon Valley issues it. These companies take pride in paying great dividends even if it means they don’t grow as fast as they could. Talk about getting the zeitgeist. Oil, the commodity, has been butchered within an inch of its life. But the oil stocks? They have been fabulous. And they will get even better to the point that they will have enough money to send to SLB and Halliburton (HAL) to bring out more oil and sell it for twice what it costs. Now let’s just get away from the scrum entirely. This market’s made of health care and financials. Old-time health care like Merck (MRK) and Eli Lilly (LLY). How did these get so high? One part great new drugs and one part the coming deflation that you get when you have a slowdown. Notice I wrote slowdown, not nightmarish recession or depression. Just a bad slowdown where drugs thrive. Banks? They work here for a simple reason: They can make so much money that they can buy back stock and raise dividends as never before. The industrials? They are doing so well because they are so cheap versus their historical prices. Retail? Sure, promotional.That’s why you buy TJX Companies (TJX) and Costco (COST). And if you want real winners, anything infrastructure-related, because the Democrats gave us so much money that the federal government will be the buyer of pretty much everything that ‘s made by our industrials. I wish we owned Caterpillar (CAT) and Deere (DE). Both could feast from the trough for ages. Finally, there’s aerospace. We are going to be traveling like never before after this Covid war. And we can’t get enough of these stocks. For years, we have been under tech tyranny. That tyranny is all over. That’s given everyone else freedom. They are taking it. We need to take it, too. There will always be some good techs. This isn’t 2000 when only Amazon was left standing. But we are at a manufactured moment, where the Federal Reserve is going to get its layoffs, the war in Ukraine isn’t going to last forever, and the Chinese will figure out a way to save face and end their Covid lockdowns. Do we live happily ever after? No, but the bulls aren’t going to be bashful for much longer. And the bears? They have had a magnificent run haven’t they? (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
A worker washes a Caterpillar crawler dozer at Ideal Tractor in West Sacramento, California, on Monday, Aug. 1, 2022.
David Paul Morris | Bloomberg | Getty Images
Never have the bulls been more bashful and timid. Never have the bears been so ascendant and so wrong. Oh sure, the bears nailed Meta Platforms (META) and hit Microsoft (MSFT) out of the park. Amazon (AMZN) flopped. So did Alphabet (GOOGL).