There are three tiers of stocks in the current economic climate, according to Action Alerts PLUS charitable trust portfolio manager Jim Cramer.
Tier one is stocks of the companies that everyone knows are winners and are still winning in the current coronavirus-roiled economy. Tier two includes stocks that will be well-positioned for big gains once the economy normalizes. Finally, there are stocks that are just wrong right now and probably will be wrong for a while even when conditions improve.
The first thing that attracted Cramer and Marks is that these two companies' balance sheets are some of the best in their respective sectors. But there is a strategy for investing in those types of stocks amid the global coronavirus pandemic.
“We don't know when the market is going to bottom out, but I think that as long as you're in a stock that you like for the long term, and General Electric isn't going away, I think you can just kind of keep nibbling very small trades,” Marks said.
Marks went on to describe Honeywell as an industrial that "can kind of come away from this cleaner and stronger.”
Cramer advised, however, that those looking to get into Honeywell must be prepared to lose money in the short term.
“Now what kind of conference call with the club do we have where I'm saying, `You know what? We got to lose money.' All I'm doing is prepping you because I think that the S&P at this 2370 level is probably not going to hold. If I think that, then why buy anything right now? Well, because we're not doing anything big. We're making it so that we buy back stock that we had before,” Cramer said.
Check out the rest of the conversation above.