CNBC’s Jim Kramer on Tuesday taught investors a lesson in light of the stock market’s recent rally after a difficult period filled with concerns over the Covid omicron.
The comments from the Mad Money presenter came after another strong session opened on Wall Street to kick off the trading week, led by a 3% jump in the high-tech Nasdaq.
“This is a textbook example of why panic is not a strategy unless you are deliberately trying to lose money,” Kramer said, referring to advice he gave after trading closed on November 29.
The broad S&P 500 rose 2.07% on Tuesday and is now about 1% below its all-time high. The Dow Jones Industrial Average rose 1.4% as all three benchmarks for US stocks posted their third positive day in four.
“I want you to use this as a reminder that in most cases it’s better to wait for cold heads to prevail rather than worrying about everyone else getting nervous and losing their heads without full information,” Kramer said. …
Markets fell sharply on Nov. 26, with the Dow, S&P 500 and Nasdaq shedding more than 2% in a shortened holiday session as investors around the world reacted to the opening of the Covid omicron variant. Stocks continued to be volatile the following week, and major US indices ended their five-day trading period lower.
However, as the days passed and more information on omicron options emerged, Kramer said Wall Street’s worst fears of widespread lockdowns that would hurt the economy were becoming increasingly unlikely. According to him, this helped to improve the sentiment of market participants.
“Look, it would be great if you bought the stock around the low – this is what I strongly advised you to do, in fact, even if you had to pinch your nose because we were just too oversold. I relied on specifications, ”he said. – said Kramer. “But the main sin here was selling shares out of fear, not sitting down for reasons of rationality.”
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