Cyclical trading from JC's book "Real Money"

[parag]

Hello,

I am currently reading Jim Cramer's Real Money. I was looking at his cyclical trading graph but I cannot figure out where in the chart would the current economy fall under. Also I think that with the current financial crisis, his cyclical recommendation might not be applicable.

Any thoughts/comments?

-P

[SumGuy]

P,
I've been wondering the same thing lately. I've read the book and am putting a summary of it on my blog. According to the chart you refer to, we would be at or near the bottom of the curve. We've had 7 easings followed by 3 pauses followed by one more ease. The Fed rate now sits at 1.5% and will probably be cut at least once more. On Cramer's chart this would have us buying low-multiple tech stocks like IBM and INTC.

I don't hear Cramer advocating buying too many tech stocks right now. This is no typical market which it seems like he is graphing in his book. You could argue that these are valid contrarian plays, but that's going to have to be your call.

Regards,

AM

[zyzzyva57]

He updated this chart in a later book -- I think his "Watch TV" book

On his show, he only brings this chart if he is asked and then only in passing

I suspect his argument today would be with everything so crazy this chart is as meaningless as the PEG ratio concept he no longer pushes (Now it is Dividend Yield)