Jim Cramer: Apple is a sell ahead of U.S. ‘fiscal cliff’

“For years, Jim Cramer worked as a broker at Goldman Sachs, the prestigious investment firm on Wall Street. After stocks took a sharp nosedive in a post-election selloff Wednesday, he wondered what he might tell his clients, if he was still working as a broker,” Drew Sandholm reports for CNBC. “To start, the ‘Mad Money’ host would recommend taking profits in some of the biggest winners.”

“‘Needless to say, a stock like Apple is very right for this kind of call and I think it played out all day today because it makes so much sense to sell it now and take the capital gain as many have huge profits here,’ Cramer said. ‘These people are natural sellers and they don’t care that next year could be better, they want to take the gain this year to get the tax break, which is worth more than any capital appreciation they could hope for,'” Sandholm reports. “Cramer said, ‘I would then tell my clients that we will almost immediately start to put money to work in companies that will not be hurt by the fiscal cliff, ones that do fine in a slowdown that the cliff could bring.'”

Read more in the full article here.

Related article:
Apple shares slide to 5-month low – November 7, 2012

51 Comments

    1. He seems to be saying that if you don’t have AAPL that you should buy it … but if you’ve been holding it and have big gains, then you should sell it. 

      Unusual situation, but it doesn’t seem to have to do with Apple’s prospects, but because of the anticipated tax increase associated with addressing the fiscal cliff.

      1. But here’s the deal:  Obama has only proposed increasing the capital gains tax from 15% to 20% for those earning over $250k/year. Most people don’t earn more than $250k/year and institutional investors don’t pay taxes on gains.

        1. “Only” from 15% to 20%?! You mean, only a 33% increase? If any big, evil corporation had the audacity to “gouge” their customers for an extra 33% in this economy, Obama would be on a soapbox talking about the need for government intervention. If only they were willing to “save us” from themselves.

            1. Let us see how it plays out – many believe the $250k is a talking point. What deductions will go away? Will they nationalize 401Ks (as has been discussed by several Dem senators)? Will they tax savings, as they do in Sweden? How will small businesses be taxed – will stay flat or increase? Oh, and as these tax increases bite, isn’t biting those who would like buy an Apple product?

              By the way, I’m donating to any Republican who will cave on tax increases (as in let the Dems own the economy) and who fights to defend the Bill of Rights. Elections do have consequences. I fear really bad ones.

    1. Well yes, technically it could (and I’m absolutely not defending Cramer). Regardless, I think the observation is that with the election decided in Obama’s favor, it suddenly makes enormous sense to start cashing out of long term gains to take advantage of the 15% rate. AAPL is still a buy, and at this moment in time, an incredibly strong buy. Separately, he’s talking overall portfolio strategy / management re: reasons to buy gold, etc.

      1. Taxes matter. Capital gains will be higher next year. That is all he is saying. But most people already understand that. And as he says, put the money back into something that will do well after the fiscal cliff. Personally I’d just sit on the sidelines with that money and wait till after the first of the year. I have been getting back into Apple lately a little bit but that all stops after today. There’s just too much negativity out there. And it doesn’t matter how good the company is, it’s how the market perceives it. And Apple is perceived negatively now. Some justified some not. But that matters not. It dropped $22 today and I think it will drop precipitously tomorrow. I’m getting out and watching for a while. I got out when Apple was at the top so I can sit and wait for a good entry point. And that could be after the first of the year? Maybe? It’s the end of the year and even without the fiscal cliff and capital gains looming over the horizon, people would normally be getting out of stocks at this time anyway. Taxes. Happens every year. People want to cash out when they’re ahead and they need to do it before the end of the year. But there is negative sentiment towards Apple now and a lot of people that would normally stay in are heading for the exits. Sort of like someone yells fire! And you don’t want to be standing in the way or trying to go against that crowd! From what I heard today, there were as many puts as calls purchased. That’s not good. Apple needs some good news, there’s nothing out there but negativity concerning Apple. When you’re successful people take a shot at you. They’re unloading on Apple. First quarter earnings won’t be reported until the middle of January. Calls expire on the 19th so probably sometime after 19 January. That’s a long way off. Then you had the iPhone supplier admitting today that they can’t meet demand for the iPhone five. Nothing but bad news in the press for Apple. Just the opposite of the last four or five years. Got to take the bad with the good I guess? In reality, AAPL is up considerably this year so it’s not like it has fallen on its face completely. If you got it on January 1 and sold September 21st you did well. If you sold today, you still did pretty damn good. Apple had run up awfully high at $705. So a lot of the selloff has been people realizing that it’s not going to go up without taking big pauses occasionally. So wisely they have taken profit. A lot of them will put money back in but probably after the first of the year. At possibly an even lower price than now. Let’s hope Apple starts releasing some good news about iPhone five and iPad sales soon. It is sorely needed.

        1. Sorry, not getting/buying most of that. Traders are traders, investors are long term. The cap gains change is something investors have to and will always pay attention to. The up/down news and month to month market emotion separate from company fundamentals is something to ignore except for occasional buying opportunities. Don’t make Buffetf sad — in the long run successful day traders are a lucky few, careful investors are a patient and happy majority.

          1. There’s a wild chance that cap taxes could go extremely high next year, at least compared to this year. So the more profits opportunely captured this favorable year, the better. The selling could run wild, with a remote chance that entry prices next year could be advantageously lower. That’s I got from GM, and I buy this reasoning as likely. Forget fundamentals.

    1. Wow… Some people have no clue what “left wing” means and Obama is solo far away from communist his name can’t be used in the same sentence as the reference.

      More “welfare” checks (cheques) were written by that Bush guy – but they were for other cronies!

      It’s funny that in America the religious “right” hope to enter heaven where there is no form of democracy, everyone is totally equal, there isn’t any way to influence peddle and money desn’t exist. A place where the well-being of others is higher than your own. That “heaven” really sounds like “hell” for those people. Hmm… something to think about during those long winter sermons.

      1. “…hope to enter heaven where there is no form of democracy, everyone is totally equal, there isn’t any way to influence peddle and money desn’t exist. A place where the well-being of others is higher than your own.”

        Poor understanding of Heaven. You should go to church more often!

      2. Obama is “so far away from communist” … lets compare:
        http://en.wikipedia.org/wiki/The_Communist_Manifesto

        Section II Proletarians and Communists.
        Short term demands:

        1. Abolition of property in land and application of all rents of land to public purposes.
        2. A heavy progressive or graduated income tax.
        3. Abolition of all right of inheritance.
        4. Confiscation of the property of all emigrants and rebels.
        5. Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.
        6. Centralisation of the means of communication and transport in the hands of the State.
        7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.
        8. Equal liability of all to labour. Establishment of industrial armies, especially for agriculture.
        9. Combination of agriculture with manufacturing industries; gradual abolition of the distinction between town and country, by a more equitable distribution of the population over the country.
        10. Free education for all children in public schools. Abolition of children’s factory labour in its present form and combination of education with industrial production.[14]

        1. Is still contested, but there certain is public housing, and heavy Federal involvement in subsidized housing and forced low-income lending (via Fanny Mae and Freddie Mac, a la Bill Clinton).
        2. already done. Before Obama tho.
        3. Heavy confiscatory inheritance “death tax” which is a double tax. This is not complete but it’s definitely slipping away towards Marx.
        4. Government regularly confiscates property from citizens in Drug War, and for various other bogus reasons. Communists had an easy victory here.
        5. US Federal Reserve Bank, along with World Bank. US is the only printer of currency. Still private banks exist, but this is mostly towards communist here, just not an exclusive monopoly.
        6. Communication is controlled via the state which licenses it out to certain companies, this is most definitely controlled by the state even if it is not entirely owned. Ditto for transportation. Marx won here.
        7. Purchase of GM by tax payers. Obama is communist here, and brags about it. He screwed over many employees who were not union members by stealing their pension to give it to his union goons. He’s a thief and a liar and a goon. Marx would be proud.
        8. Not sure exactly what to say here, there are certainly very powerful unions in this country which pretty much run the state of California. Agriculture is in the hands of large corporate owned factory farms, which isn’t the communist ideal but farming is far more industrialized today than it was in the day of Marx, so maybe that’s not such a big deal. Not many people in the US are involved in the production or distribution of food compared to the total population of the country.
        9. Abolition of distinction of town and country is a fantasy, combination of industry and agriculture is partly done due to factory farming and mechanized farming techniques. Halfway done.
        10. Free education is widely accepted, child labor is abolished in most of the free world.

        You could argue that Obama is not 100% communist, but he’s far closer than any other US president in history. He may not be murdering people by the tens of millions or shipping people to Siberia like Stalin, but he’s no less frightening from the standpoint of people who see socialism as nearly impossible to end once it has begun. Truly terrifying the amount of damage one person who barely won by a tiny sliver of votes pushed in mostly by people who are the least productive members of society, who leech off the most productive members.

        Democracy is doomed as soon as people decide they can “vote” to steal the fruits of other people’s labor. The tyranny of the majority that tramples on individual liberty and property ownership will be the end of Democracy. Obama has no respect for the Constitution or limited government powers, he is purely a tyrant and it’s beyond tragic that he got a 2nd term of office, but we will survive even his madness. We have been through worse as a country and we will survive this.

        1. “Democracy is doomed as soon as people decide they can “vote” to steal the fruits of other people’s labor.” So your saying the CEO’s do all of the actual work on the front lines, so deserve to get 1000 times? How do you expect demand for their products to continue when wages continue to be cut for the average American and not keep up with inflation? You mean like when Wall Street gambled peoples money and put the country in a deep recession, then asked for more money to bail them out and give them bonuses for failing? You mean like the corporate welfare queens that get all the loop holes and tax breaks and pay less taxes then the average American who works just as hard or harder then said “Job Creators”?

          “The tyranny of the majority that tramples on individual liberty and property ownership will be the end of Democracy. Obama has no respect for the Constitution or limited government powers, he is purely a tyrant and it’s beyond tragic that he got a 2nd term of office, but we will survive even his madness.” You mean like when Bush instituted the Patriot Act? Or pulled us into an illegal war with Iraq? Or how about “Homeland Security”, which brought us the TSA, or is it your selective amnesia that Red buddies have to always blame everybody else, but the “Reps” that you think play for your team? You’re owned buddy, just like the rest of us.

          Here…I’ll let George Carlin explain it succinctly for you:

        2. 58 Comments
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          November 7th, 2012 1:25 PM
          Morning in America
          By Michael Moore

          This country has truly changed, and I believe there will be no going back. Hate lost yesterday. That is amazing in and of itself. And all the women who were elected last night! A total rebuke of Neanderthal attitudes.

          Now the real work begins. Millions of us – the majority – must come together to insist that President Obama and the Democrats stand up and fight for the things we sent them there to do. Mr. President, do not listen to the pundits who today call for you to “compromise.” No. You already tried that. It didn’t work. You can compromise later if you need to, but please, no more beginning by compromising. And if the Republican House doesn’t want to play ball, do a massive end run around them with one executive order after another – just like they have done and will do if given the chance again.

          We have to have Obama’s back. As he is blocked and attacked by the Right, we need to be there with him. We are the majority. Let’s act like it.

          And please Mr. President, make the banks and Wall Street pay. You’re the boss, not them. Lead the fight to get money out of politics – the spending on this election is shameful and dangerous. Don’t wait til 2014 to bring the troops home – bring ’em home now. Stop the drone strikes on civilians. End the senseless war on drugs. Act like a pit bull when it comes to climate change – ignore the nuts, and fix this now. Take the profit motive out of things that any civilized country would say, “this is for the common good.” Make higher educational affordable for everyone and don’t send 22-year-olds out into the world already in massive debt. Order a moratorium on home foreclosures and evictions. Enact economic policy that will create good-paying jobs and spend the money that’s needed to do that. Make your second term one for the history books.

          Finally, thanks must be given to the Occupy movement who, a year ago, set the tone of this election year by getting everyone to talk about the 1% vs. 99%. It inspired Obama and his campaign to realize that there was a huge popular sentiment against what the wealthy have done to the country and there was something wrong if just 400 rich guys owned more than 160 million Americans combined (all those moochers and bums). This led to Romney’s “47%” remarks and THAT was the beginning of the end of his campaign. Thank you Mother Jones for releasing that secret tape, and thank you to the minimum wage worker who placed a camera on the serving buffet next to the candle. This morning’s headline in the Washington Post says it all: “At Romney headquarters, the defeat of the 1 percent.” Thank you Sandra Fluke for enduring the insults hurled at you and then becoming an important grassroots leader against the war on women. Thank you Todd Akin for…well, for just being you. Thank you CEOs of Chrysler and GM for coming out forcefully against the Republican(!) candidate, saying he lived in “some parallel universe” when he lied about Jeep. Thank you Governor Christie for your new bromance with Obama. You know, you really didn’t have to!

          And you, Mother Nature, with all your horrific damage, death and destruction you caused last week, you became, ironically, the undoing of a Party that didn’t believe in you or your climate changing powers.

          Perhaps they’ll believe now.

          Once again, thanks to all of you who brought a nonvoter to the polls. In a last minute effort to get Obama an extra million votes he wasn’t counting on, I enjoyed talking and texting with your loved ones and friends yesterday who weren’t going to vote – but then changed their minds after a little nudge and some TLC (“Damn! Michael Moore? I’m getting in to car right now to go vote.”).

          To my fellow Americans, I think you’ll agree: it was nice to wake up this morning in the United States of America.

          P.S. If you missed them, you might enjoy reading my tweets from last night and reliving this historic victory 140 characters at time.

      3. Sir, my wife and I sent time in Eastern Europe under Communism. We have both spent the last 25 yrs in the US Military – because of what we saw in Poland. I will tell you that I have heard Marxist rhetoric from the President and his staff. So you are asking me to seperate his words from his political reality?

      4. Sir, my wife and I sent time in Eastern Europe under Communism. We have both spent the last 25 yrs in the US Military – because of what we saw in Poland. I will tell you that I have heard Marxist rhetoric from the President and his staff. So you are asking me to seperate his words from his political reality? So did you learn about communism in school books or in the real world? I have a hunch.

        1. We already know where Twimoon1 learned about communism- on Wikipedia. And everybody knows that the Internet always tells the truth. Just like our president. Bwa-ha!

          Just out of curiosity, what does Wikipedia have to say about Benghazi? “A magical place of rainbows and unicorns; site of Obama’s greatest victory”

    2. Being an Apple fanboy you must be used to closed environments with top down control over what you can and can’t do with what you own? Why on earth are you complaining numb nuts?

  1. He’s such a douche bag. For so long he has telling people to “BUY”, Then after a dip now he tells people to “Sell!” Does he have no confidence in what he tells people? After two weeks of apple going down due to a few issues, what has changed? The stock price has gone down $150~, Big woop. Other than that, is there any significant change in Apple’s products, the Selling volume or quality of their software? No. Everyone you see has a iphone, ipad or macbook. I ask around to see if anyone is buying those other things, and most people say no. Only people who can;t afford Apple are buying ebook readers, and people who don’t know or have experiance with macs are buying the alternative because they are uneducated. So Should there be any loss of confidence in apple in the Future? No. Will they be selling their stuff and people will buy it, Of course. AT&T is making a killing and so are the other carriers. Should there be any worry about the stock going down, I think not, wait a bit, maybe till spring and it’ll shoot right back up. What other company is making software an hardware that people want? MS? Pfft, Dell? no, Who else? No one Significant, but apple. No one is falling over themselves to by a surface. But I do say apple has to up the game a bit.

  2. I think he is a joke…..watched him a few times a few years ago and wasn’t impressed. I can’t believe he still has a show and giving financial advise and people actually using it.

  3. Jim Cramer was telling people to buy financials just moments before they went bankrupt when the meltdown occurred .
    He may have influence but smarts and consistency are at a loss where he is concerned .
    Apple is a good company with excellent products .
    I bought a wack of shares today but then again I look at the long situation .

  4. Cramer has been pounding the table screaming buy buy buy Apple when it was way above 600.. He always says that apple is not for trading but for investing and that he has it in his charitable trust. Now that the stock is down over 140 points, he telling everyone to sell.. wtf is going on here? plain bs if you ask me. talking any way the wind blows

  5. Wall Street:
    Heads I win- tails you lose.

    QE has been puffing up the market the last couple of years and there is no there there. Apple’s got plenty of cash, but is overpriced in a shitty market and a world flirting with recession.

    1. Not sure if I agree. Apple is not “dirt cheap” but it has still been growing profits and has many customers outside the US, even in the event that the US economy heads south there are many customers in other parts of the world that will but Apple products.

      They have a lot of years left of growth way ahead of the market and will easily be worth quite a bit more than they are now in a few years.

      1. Europe is a basket case, China is skidding toward recession and The US is preparing to have a chicken showdown over sequestration.

        The stock market is pumped up with imaginary money created out of thin air by the Federal Reserve without the consent of President Obama or the Congress that devalues every penny already existent. At some point the presses stop and the leaky balloon deflates.

        Apple is fine, current mismanagement notwithstanding. You get quite a few mulligans with $100 Billion + in the hopper.

        The stock is overpriced regardless of p/e ratios and all the rest.

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