CNBC’s Jim Cramer on Thursday said excessive negative sentiment about the stock market being spewed out in the media is leaving too many potential investors on the sidelines.
After rising slightly during the trading session, the S&P 500 has rallied more than 26% thus far in 2019. Yet, just about 1 in 3 American voters say they have benefited from this year’s bull market and only 14% of families own stocks, according to a Financial Times-Peter G Peterson Foundation poll.
“Don’t let the armageddonists and the negativists and the hucksters scare you away from owning stocks,” the “Mad Money” host said. “There are vast sums of money to be made here, and far too many people are missing out because they’ve been frightened away from the whole asset class.”
The “armageddonists” Cramer referred to, citing research from J.P. Morgan Asset Management Chairman Michael Cembales, are bearish commentators and money managers “scaring” people away from stocks and into bonds. The study from Cembales says doom-and-gloom narratives about the stock market have been excessive since the 2008 financial crisis.
Cramer also went beyond the financial world, highlighting more intel from Cembales, to point blame at national media outlets who opt to cover negative economic news that garners more ratings far more often than positive economic information.
“I only get contacted by the national broadcasters when they want someone to talk about how terrible things are and why you should panic,” he said. “It’s painful; it’s wrong. You’d think the world’s ending, but actually things are pretty good.”
In mid-August when the bond market flashed a recession warning, the Dow Jones Industrial Average plummeted more than 800 points. As fears of a looming major economic downturn grew, most news outlets turned their attention to the financial markets. Cramer, however, has consistently hammered home his belief that fears of a recession were overblown.
In the following months, the Dow Jones has rebounded — up more than 8% since that decline — and set several record closes. The index itself has rallied more than 21% year to date and the Nasdaq Composite has expanded more than 30% as of Thursday’s close.
“Bad news gets better ratings than good news,” Cramer said. “So I can’t really blame people for failing to recognize how much money’s being made in the stock market, especially in the best-performing individual stocks” on the market.
The former hedge-fund manager praised the Robinhood commission-free stock trading app for exposing and establishing interest in the equities market to the millennial generation that has been impacted by the Great Recession. The platform, founded in 2013, announced Wednesday that it has topped 10 million users.
“I love this trend. I know that big money can be made owning stocks. I see it and hear about it every day,” Cramer said. “These new investors are doing so well.”