So many things have a habit of working out that you have to think hard about why, in the past, you sold things. Let me explain how it happens. It’s not news when everything happens as it is supposed to. It is news when everything does not go to plan. When something occurs that is better than we thought it would be, that means nothing to most journalists. Why? Simple. If reporters write something positive, then it is pretty easy to presume that they are just doing in the bidding of the company, or, worse, the company’s public relations firm. They would be branded as a kiss-ass. If the piece actually gets to the edit desk, the editors would feel intense pressure to kill it because they are scrutinized by a whole host of others who don’t want to read positive stuff because they don’t think the readers want it. What happens is this. The best pieces, the ones that draw the most attention, are the pieces about things going wrong. Those stories get the praise. They get the attention. They win the prizes. They are what you are supposed to take action on. Let’s use a recent real-world example to illustrate what I mean. Go back to the end of 2025. That was when we first started hearing about the problems of private credit. People got worried about enterprise software companies that were taken private. They looked to see if they owned some through any vehicles. It turned out that lots of rich people were talked into vehicles that gave you more oomph for their fixed income allocations. That’s not unusual. They were put into these vehicles by sharp salespeople who were well-compensated. The salespeople shouldn’t have sold this kind of paper because it had no upside and plenty of downside. It does sound like it was opaque enough that they could jam a high gross credit — or commission — into the sale and the customer wouldn’t know it. You may not know it, but that happens quite frequently. Nobody paid much attention to these pieces of paper or who was wrapping them up until we saw that there were stakeholders who wanted out, and the window wasn’t big enough to let all of them out. Suddenly there was a sense of doom about every single company that offered private credit. The most pilloried were Blackstone and Blue Own, but Ares and Apollo bundled these pieces of paper, too. Put aside that it was a bad idea to buy this stuff, and it still is because the risk-reward is terrible. What mattered was a sincere belief that enterprise software would be disrupted, if not destroyed, by Anthropic and OpenAI. To be sure, you can do a lot of things with Anthropic and OpenAI, but they aren’t necessarily something that you might want to use. There is habit. There is comfort. Most older people are totally content to stick with what Adobe has made or offerings from ServiceNow or Club name Salesforce . As they went down, the private credit redemptions grew and grew, stoked by endless articles about how dangerous these aforementioned credit wrap-ups were. It didn’t help that there was plenty of worry about how levered Blue Owl is and how its private credit owners were trapped like rats in this stuff. I took the time to look at every single credit in Blue Owl, and it was pretty clear that there could be disruption by AI. But not the majority. There was some cushion. Didn’t matter, though, because the panic was so thick and the journalism so frightening — and therefore appealing to everyone in the whole food chain from short sellers who aid reporters, to the reporters themselves to the editors and then right back again. Panic sowed. Mission accomplished. Some of the sellers took a real beating on the way out, because the negative articles were so persuasive and the owners so scared. The only people who spoke up for this garbage were the people who put it together. I call it garbage. I have been in the camp that you should never reach for yield ever, because I have seen so many people burned by it. Fast forward to where we are now. It turns out that these enterprise software stocks were almost all the bargain of the century, with Intuit being the only one that remains ghastly. They have a meeting this week — and if management addresses the faults and takes their hits, shares of the QuickBooks and TurboTax company will probably rally. Was Blue Owl a bad actor? How about Blackstone ? No. But only because every minute there is a sucker who can get talked into putting up money to get a higher yield than they could normally get. I don’t feel bad for any of these clueless clients. Those people are easily parted from their money. I am just saying that the fury over the private credit instruments was well out of whack with the reality. Blue Owl ultimately launched some elaborate scheme to take out some shareholders. Employees at Blackstone bought some of the paper of those who wanted out of their vehicles. Lesson here: Never sell to employees. They know more than you do. That’s asymmetrical information. Unequal halves. When we look back, we find out what really happened. As someone who was a trader in my past, I knew how to get in and out of things without anyone knowing it. That had been what you were supposed to do. I see now that, though, that’s no longer the case. When I look at the mysterious patterns of this Situational Awareness fund, I see lots of situations where the stocks bought by the fund soared and those that were sold short by the fund got crushed. It seems pretty obvious to me that, in my view, the manager didn’t know what he was doing and was banging stuff down and taking stuff up recklessly. Lots of fellow travelers joined in, and the impact was incredible. The declines became self-fulfilling to the media. After that brilliant clown went bust, the stocks started going up. Then they went nuts when it was rumored that there might be a bid for Workday — where did that go? — and Salesforce delivered a good quarter. I have gone so far as to suggest that we could now have a short squeeze in Adobe because it could reinvent itself. Why not? It has a ton of cash. It has a market cap. It can buy a couple of companies and reinvent itself the same way ServiceNow successfully did. Meanwhile, Thoma Bravo, the firm that brought you most of these enterprise software bonds that were sliced into these aforementioned pieces of dastardly paper, is back at it again, talking a big game and looking for big deals. In other words we are right back to where we started, except a lot of people lost a lot of money. We saw the same thing with this so-called tobacco moment for Meta Platforms about 100 points ago. Meta had lost a couple of big lawsuits when it faced down the most dangerous opponents in the nation — state attorneys general. Why are they so dangerous? They play for free. Whenever an opponent doesn’t have to pay to sue, that’s a powerful enemy. I know from speaking to many attorneys involved with the case and others that this one could be the big kahuna, something that might cost Meta as much as $100 billion to settle and much more if it goes to trial and Meta loses. Then out of nowhere, I get a call from Meta that it was going to announce a settlement and that the settlement may be for as little as about $13 billion but maybe as much as $18 billion. It’s over ten years. The legal fees might be bigger this year, most likely. I knew the $100 billion number. When I saw the $13 billion number, I told you that the stock could go up $100-per-share minimum. But the media persisted, and we started hearing about the “tobacco moment,” that, somehow, the settlement was really horrible for Meta, which, of course, was quite content with it. I have no idea how those who wrote those stories possibly got their information, but it certainly wasn’t from reporting. So what was the motive for the “tobacco moment” stories? The plaintiffs’ bar most likely “planted” the stories with favored reporters to see if they could drum up new customers. Don’t think I am too cynical. We see many commercials preying on sick people and that operators are standing by if people want to sue and get money for all sorts of injuries and illnesses. I get that. People certainly have a right to sue. It’s just that these articles amount to another form of advertising — a cheaper, more cynical one. Why am I so confident that this isn’t a “tobacco moment?” First, I work for you, and I don’t need to play for dinner. Second, I have seen this happen so many times it makes me sick to my stomach — see talc litigation at Johnson & Johnson. Third, there are real protections afforded to these online companies, and I am not just talking about the First Amendment. They have statutory protection from Section 230 of the Communications Decency Act. Finally, there is the nature of tort law. The tobacco cases are easy: You have the evidence that tobacco causes cancer. Your plaintiff has cancer and smoked or smokes. There are documents that show the tobacco people knew that smoking causes cancer. Slamdunk. Homework done. Compare that with Meta as the defendant. Can we be sure that the company’s social media platforms are the real cause of the teen ills? Aren’t there mitigating factors? Are we certain that a lot of time on Instagram, for example, is the cause of a lot of angst and depression? Each case is different. That makes it so hard for the firms to try the cases. Much more work to link the problems to Meta. Can’t be cookie-cutter. No slam dunk. No “tobacco moment.” Or how about back in October 2025 when JPMorgan announced a $170 million charge for the bankruptcy of Tricolor, a subprime auto lender? JPMorgan CEO Jamie Dimon offered the cockroach theory that scared the living daylights out of us: “When you see one cockroach, there are probably more.” He quickly put another deal, First Brands, an auto parts company that collapsed in the same category. But here we are a year later, and there were only those two. Two cockroaches? How about no cockroaches; just bad banking? Wow, lots of people sold stocks on that one, though. You can always say, “It was Dimon’s fault.” Or no one’s fault. That’s not the point. This is a piece about being scared out of the market, not saying that “Dimon is to blame.” He’s a very good banker. It’s just that the credit cycle turned out to be much stronger than we thought. Currently, we are faced with a new scare, the one that says the AI agents are going to kill us. This is, in part, generated by Dario Amodei from Anthropic, the same man who told us that we didn’t need cybersecurity companies because Anthropic could do it, even though legally they couldn’t because no client would be able to get insurance if Anthropic was just policing itself. I am sure that, in the wrong hands, there’s some real evil doing that could occur. Just as there would be with a host of bad actors armed with weapons of mass destruction. Sometimes I wonder, though, if you are about to take your company public and it is burning through a lot of money, wouldn’t it be good to say you are slowing spending? That’s exactly what Amodei did in an essay posted over the weekend . If you are about to drop an S-1 initial public offering (IPO) filing and you can slow smaller losses than you would otherwise, it would be good news for your prospective stock. Maybe the “it will kill us all” narrative is a little too convenient way to cut back spending and boost earnings without looking like something is wrong. How do I know that I am right? I was a journalist, a full-time journalist, before I went to work for Goldman Sachs . I knew how to play the game; how to get ahead. It disgusted me. Even as impoverished as I was, I wouldn’t do it. That, alone, didn’t drive me into Goldman. But it sure made the decision easier. I have a ton of these examples. They all involve the same concepts. Journalists being preyed upon, journalists taking it to the man, journalists being gullible, whatever. You just need to understand these motivations, or at least ask yourselves whether there might be an alternative view, before you start selling. (Jim Cramer’s Charitable Trust is long CRM, META, GS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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Ripped from the headlines — Jim Cramer looks at how not to get scared out of the stock market
Sep 13, 2026
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