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So, if you want to understand this point, you really need to look at stocks through the lens of one of my greatest teachers, Marty Zweig. I never met Mr. Zweig, but I watched him every Friday when he appeared on Louis Rukeyser's Wall Street Week program , and I hung on his every word. I usually said, “Oh, shut up, other experts.
"Let Marty talk." Of course, I was only talking to the TV. Now I'm on television myself. He had an unrivaled knack for explaining the stock market to the average person, to a beginner, a newbie, to me. Zweig helped democratize this business by explaining the market's reaction to the actions of the Federal Reserve and the collective reaction of investors to the stock market tape.
Essentially, he did what I try to do for you every night, and although no one knows why, I am his devoted disciple. What would Zweig say about this moment ? I can almost hear his loud but low voice: “Don’t go against the tape. "Don't go against the Fed." Yes, let me explain these two commandments in more detail.
First, "don't go against the Fed" means you can't bet against the Federal Reserve chairman, who is eager to jumpstart the economy and therefore the stock market. Last week, Powell gave us only bad news. It seemed as if he had given up on the restoration, as he had once done with the Kennedy family. Now all he could do was wait and watch.
Not at all. The market was in no mood to wait, and that's why we got crushed. This time , however, Powell went all in . He actually assured us that there would be no more bankruptcies. No bankruptcies. This means no layoffs in perfectly healthy companies that are short of cash and unable to raise funds.
Now everyone, except, unfortunately, small businesses, can raise financing. This is a huge deal. During the Great Depression, we worried about bank failures. Then they went bankrupt, and the situation became much worse. During the Great Recession, we were worried again about the banks collapsing, they went bankrupt, and things got worse.
Fed Chairman Ben Bernanke eventually stepped in and said he would not let another bank fail. The Fed can print money, which means they have unlimited financial power. They just need to decide to use it. This time Powell didn't wait for everything to fall apart. He acted aggressively to protect the banks.
Now it actually supports their biggest customers as well. And that's great for banks, great for customers. That's what "don't go against the Fed" means. And what about Zweig's second commandment: "don't go against the grain"? This was so hard for me to understand. I mean, I'd give ten dollars. Do you understand what I mean?
When I first heard it, I was like, "What, what, what is a tape?" Well, like scotch tape? My dad sold scotch tape. In any case, well, no. This is what is happening in the market due to current issues. There's a lot of green on this ribbon now . Here, you can see, she is actually under a lot. Have you ever seen it there?
It says, well, you know, 3M and you know, rate it. You understand, right? I could get down on the floor and do it, but it's a really nice costume. Okay, anyway. Why is this happening? Because even despite COVID, I could do it. I'll just take it to the dry cleaners. OK. I'm down here with the tape now.
You see me with the ribbon, right? Good. Because even with the COVID cases, see, she's right below me? While COVID cases are increasing , we got the news that if doctors are using dexamethasone, it's a fairly mild steroid , which I take, I took it for a while and then switched to another one. They can significantly reduce mortality rates in the worst cases.
People who need help with breathing. A drug that is available over the counter and costs almost nothing. I know, I took it, it was a five dollar surcharge at Walgreens. Suddenly this virus became much less deadly. This certainly influenced the film. Remember, the tape is what's under me here. I'm taking care of the ribbon, okay?
I pamper it and make the tape feel even better than before. Then we got that incredible Where are the Clorox wipes? Who knows what's down there? Anyway, then we get that incredible retail sales figure, a 17% increase. Clorox rose 17%. So even when the Fed throws gasoline on Kingsford, it's a Clorox product, they're already red-hot.
And that's how a fire of money arises, looking for a home, and it ends up on that ribbon that I've just been caressing so tenderly. Not Lysol. Oh, it's Clorox. Thank you. OK. They see that you can't beat an army of buyers when they come to love the tape. You ca n't. There's no point in fighting it down here.
Now, for the newbies who probably think there really is a tape under me because they know so little about and watch this show. I buy all the cruise company stocks, I see Royal, and they're all falling today. And airlines, oil is in the single digits, why do they need oil, they should be buying things like Apple.
I don't know. Buy a percentage, buy one share. What is this , a new fraction thing? Oh, Apple is flying, that was a recommendation to buy, and I definitely adore this guy. I love this guy, Jim Cramer—a great guy. But there was nothing new there. It didn't matter. What about the hint at an infrastructure bill that will never be passed?
More on that later. The likelihood that shoppers will return to previously closed stores. How else to get this incredible 17% increase? Put it all together and you have an incredibly bullish market. That's it. Remember, it's below me, just in case you can't find it. Oh, baby, only the market could accept that , baby, with Clorox, which is the deadliest thing.
Okay, anyway, here's why we love it. Look, United Airlines has merged with Clorox, I fly United. Oh, my hands are tired. In any case, this doesn't mean you always have to go with the flow, okay? This is not true. This doesn't mean you shouldn't bet against the market. But when you get that kind of growth, when almost everything is taking off, and you try to fight it, you're fighting histor .
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