May 14, 2010

Jim Cramer on the "flash crash" flushing out the marginal stock holders

Take the bogus 1,000-point drop last Thursday. As unfortunate as it was, it cleansed the market of a lot of froth; froth is the signal that we're nearing a top. Second, last week the oft-quoted pessimists grabbed the microphone and scared away all the wafflers. Thanks to the negativeness, the "we-cants" were easily panicked. They've been blown out by inter-locking fields of bearish fire. They're all gone!

Now we've got a situation where the only people left are the solid, long-term holders. So, we don't have to worry about or fight our fellow shareholders who are desperately trying to get out the door-- they've already left the building.

I want to thank the "Roubs" for this, so-called because of their leader, Nouriel "Roub"-ini, the professor who seems to have tenure on television. All these Johnny-One-Notes would make you very poor if you actually took their advice.

~Jim Cramer, "Curb Your Enthusiasm?", Mad Money, May 13th, 2010

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