It's not as if the established players don't have the capital, Cramer noted. Facebook (FB) clearly had the capital for What'sApp and Google (GOOG) just bought an aerial drone company, of all things. So why aren't they snapping up GrubHub (GRUB) or Zoe's Kitchen (ZOES)?
Cramer said once these companies go public, their valuations simply get too high. Zillow (Z) could buy Trulia (TRLA), for example, and own the online real estate market in perpetuity, but now that Trulia is public that deal would be very costly.
That makes buying up companies pre-IPO the thing to do, Cramer concluded, which is why the fact it's not happening should raise eyebrows.
Off the Tape
In his "Off The Tape" segment, Cramer sat down with Daymond John, founder and CEO of the privately held FUBU, as well as co-host of Shark Tank and the self-proclaimed "king of branding." Back in April 2010, John created his "Lifestyle Brand Index," a collection of stocks that is now up 92%, beating the S&P 500 and its growth of 54%.
John said that Samsung (SSNLF) still has the smart phone buzz and Apple's (AAPL) iPhone is still lagging behind. He was still bullish on both Under Armour (UA) and Facebook, two stocks in his 2010 index.John added two new names to his index, Walgreens (WAG) and Tesla Motors (TSLA), and also touted AOL (AOL) and Netflix (NFLX) as the content delivery systems of the future. Finally, John and Cramer were both bullish on Whole Foods Markets (WFM) and Starbucks (SBUX).
Cramer's PlaybookFor the next installment of "Cramer's Playbook," Cramer once again helps investors build a solid financial footing, this time by answering the question of whether or not to use stop-loss orders to protect yourself from big market selloffs. Cramer said he's not a fan of stop-loss orders -- which automatically sell a stock if certain conditions are met -- for regular investors. He said home gamers should be longer-term investors and not traders worried about the day-to-day action in the markets. One of the hardest lessons for beginning investors to master is not worrying about selloffs and actually embracing them. Selloffs are nothing more than stocks being put on sale, he said, and are a normal part of a healthy market. Investors should love market declines and use them as buying opportunities.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV