Sunday, February 17, 2013

Cramer and Cummins

As I have mentioned a few times before here and there, it is hard for me to explain why I have been watching so much on [CNBC] the past few months.  For I don’t really understand very much of what they are talking about when it comes to investing in stocks and bonds, and even if I did, I don’t have any money to lose in the first-place.

Yeah, I have picked up on one thing.  For one should look at investing in stocks and bonds in the same way as they should out-right gambling.  For if you can’t afford to lose anything, you shouldn’t be in the game.  A variation of that would be that if you can’t afford to stay in the game until things start looking good for you, you shouldn’t be in it.

I suppose most of the attraction that I have for what CNBC has to offer is getting insights into what is going on in the business community that do not usually make it onto the regular news outlets.  Early talk about the possibility of a true Apple TV coming to market fairly soon serves as a good example of that.

Not that I would want to buy an Apple TV.  For it is bound to be priced way out of our range, but Samsung and other more reasonable manufacturers trying to keep pace just might help break up the monopolies on content now being held by cable companies.  For with it being possible to more easily watch what is being streamed over the internet, I would think that the networks would start working with other outlets and the price that we now face for cable TV would have to go way down in order to hold onto as many subscribers as possible.

Early on, [Jim Cramer] of both [Mad Money] and [Squawk on the Street] fame and fortune (in a relative sense to this piece) was a great favorite of mine.  For he had a very colorful way of expressing his opinions that were usually quite enjoyable—very much unlike [Rick Santelli’s] Discharge Exchange segments.

Oh, there were a few things that I took great exception to.  For I would start shaking my head in dismay every time he would start hopping up and down while screaming, “THE PC IS DEAD!  THE PC IS DEAD!”  Those outbursts would usually be in conjunction with some news about something that either Hewlett-Packard or Microsoft was doing, and it was always followed with much talk about how much cooler Apple now is to younger generations.

Then he went and crossed a line that I simply could not abide.  For I heard him boldly proclaim, “CUMMINS!  THE BEST ENGINE MANUFACTURER IN THE WORLD!”

Okay, I was willing to let his lack of distinction between types of engines slide, but declaring [Cummins] as the best in the world was simply unforgiveable.  For they make diesel engines that go in trucks that those who buy them do not have to drive.

Yeah, yeah, yeah, Cummins makes more than diesel engines for trucks, but that is what I have an intimate knowledge of.  Besides, if Cummins is willing to make junk like that for trucks, it makes sense that the rest of their engines would not be much better.

Would you like to have to drive a vehicle delivering stuff in and around a big city with a 25 horsepower two-cylinder engine while all of the vehicles in the traffic you are trying to maneuver around have 300 horsepower V-8s?  This is what it is like driving a truck with a Cummins engine.

Yeah, the much more powerful vehicles would quickly go on their way and leave you to make your turns after they have went on down the street, but there is always more traffic coming up from behind.  In fact, I am quite sure that it is a law in most jurisdictions.

Cummins makes engines that are supposed to have as much horsepower as a [Cat] or a [Detroit Diesel] does, but the trucks with Cummins engines are always the last over the hill, with everything else being equal.  Some idiots will argue otherwise, but they are, after all, idiots.

The last truck I drove with a Cummins engine had a pumped-up 444 “Cat-Killer” in it.  In all fairness, I was fairly happy with its performance heading east out of Missouri, but on the way back, the turbo went out, which was not the first time that had happened, while I was trying to make two pick-ups on the south side of Pittsburgh, Pennsylvania.  With each street being practically straight up and down in that part of town, plenty of power is a must for anyone who might be concerned about rolling backwards while trying to go uphill.  After taking most of two days to limp the truck back to the southwestern part of Missouri, the owner of the outfit mercifully sold the truck at auction as soon as a another new turbo was installed.

Now, it has been around 13 years since the last time I was out there on the road in a big truck, and it may very well be that Cummins has decided to return to the days when their [KTA engines] could give any Cat a true run for the money, but I kinda doubt it.  For why would a company like Cummins strive for greatness when mediocre had plenty of money coming into the bank?

It was finally revealed to me that Mr. Cramer and most of the rest at CNBC could not help themselves.  For they are looking at companies like Cummins through the eyes of a stock analyst—not someone who would actually use their goods or services themselves.  Yes, one would think that the quality of a company’s products would have much to do with the value of their stock, but with more and more money coming out of emerging markets like capitalist China, a Cummins engine is better than what they can make themselves at this time, and a Cummins can be generally bought at a cheaper price than a Cat or Detroit Diesel can be.

Alas, it is becoming more and more uncomfortable for me to watch my usual CNBC shows.  For Mr. Cramer was at it again during a segment of Squawk on the Street the other day when he started literally squealing with glee over [Valero] making a killing (his actual words) by charging the same at their gasoline pumps as their competitors were while paying much less for the crude oil they were refining.

Yes, if one is to make money in the stock market, they need to buy low and sell high, and higher and higher corporate profits drive the price of their stocks higher and higher.  Not much credit is given for making a truly great product and selling it at the lowest possible price out of goodness of heart, it would seem.  Isn’t our brand of capitalism great?

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