Tags: CNBC | JimCramer | stocks | bubble

CNBC's Jim Cramer to Investors: Don't Buy 'Bubble' Arguments

By    |   Tuesday, 01 April 2014 06:25 PM

The Standard & Poor's 500 Index has soared 182 percent from its March 2009 low, hitting a record high again Tuesday, and that has led some investment experts to talk of a bubble.

But CNBC commentator Jim Cramer is having none of it. He noted on the air that the best-performing stocks in the Dow Jones industrial average during the first quarter were old-school stalwarts Caterpillar, Merck and Microsoft.

"When you look at these stocks, you know what these stocks are? Stocks that have been around," Cramer said. "This is not cloud. This is not software as a service."

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Cloud computing and biotechnology stocks have been hot in recent months, sparking talk of bubbles in those sectors.

But, "if you look at the makeup of [stock gains in] the last quarter, it was not the stocks that we thought that were bubblicious," Cramer said. "It was Caterpillar."

The S&P 500 gained 1.3 percent in the first quarter, while the Dow slipped 0.7 percent.

"How many quarters can we have 'It's a bubble' before we have to declare it's not a bubble?" Cramer said. "Can we just stipulate there's something going on here that is not a bubble?"

Michael Strauss, chief investment strategist at Commonfund, told The Wall Street Journal that there's no need for investors to shun stocks just because the S&P 500 is at an all-time peak.

"There is a pretty positive structural tailwind that is behind the economy," he said. "We're still suggesting equities are the place to be here."

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The Standard & Poor's 500 Index has soared 182 percent from its March 2009 low, hitting a record high again Tuesday, and that has led some investment experts to talk of a bubble. But CNBC commentator Jim Cramer is having none of it.
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2014-25-01
Tuesday, 01 April 2014 06:25 PM
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