It's time to focus on the winners and forget the losers, Jim Cramer told his Mad Money viewers Thursday. With some stocks becoming uninvestable, Cramer said it's more important than ever to sell the losers in your portfolio and stick with the stocks that are winning.
What do the losers look like? Cramer said it's not hard to find them. This week we learned that Well Fargo (WFC) has 180,000 employees working from home. JPMorgan Chase (JPM) also has 180,000 workers at home. Bank of America (BAC) adds another 150,000, while Goldman Sachs (GS) has told us 98% of their employees are home as well.
With so many people working from home, and a good percentage of them likely to stay there, Cramer said it's clear we'll all be driving less. That means less cars. Of the automakers, Cramer recommended only Tesla (TSLA) . Fewer cars means less oil, which makes all of the oil stocks uninvestable. Working from home also means less business travel -- think airlines, hotels and convention centers. Finally, Cramer said we'll need fewer offices as well, which means office REITs are also uninvestable.
Cramer advised selling all of these stocks into any strength and sticking with what's working -- mainly technology and healthcare, the two sectors that will get us out of this pandemic.
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About the Banks
Can we have a robust stock market without the participation of the bank stocks? That was the question Cramer posed to his viewers. While the banks posted terrific earnings this past quarter, there are still dark clouds lurking over the financial sector.
Cramer explained that if our economy reopens quickly, all will likely be well at the major banks, and people will continue paying on their loans. But if the quarantines last for months, the banks could be in trouble as people just stop paying. We're a lot more sympathetic to borrowers than to the banks right now, Cramer said, and while many banks have voluntarily suspended their buybacks, they could soon be asked to suspend their dividends as well to cover potential losses.
Cramer liked the outlook for Morgan Stanley (MS) , which does not have a lot of loans on their books. Wells Fargo, on the other hand, has lots of loans and exposure to the oil and gas industry. As for all of the other banks, they posted great earnings, but it still might not matter.
Cramer advised owning stocks of companies that can raise their dividend, not owning stocks where dividends might be in jeopardy.
Executive Decision: Chubb
For his "Executive Decision" segment, Cramer spoke with Evan Greenberg, CEO of Chubb (CB) , the insurance stock that's off 33% from its highs earlier this year.
Greenberg said there's no doubt that the insurance industry will be hit hard by both the pandemic and the economic fallout that results from it. But he dispelled the notion that insurance companies will be bankrupted by COVID-19. He said that most policies only cover business interruptions caused by physical damage, not economic damage caused by pandemics.
Additionally, Greenberg noted that unlike other disasters that hit a certain geographic region for a limited amount of time, this crisis is hitting the whole country for a prolonged amount of time. He said the only entity that can insure that infinite level of damage is our government.
Greenberg said the government cannot force insurance companies to pay for things they haven't agreed to pay. For those who have pandemic policies, insurers will most certainly pay what they owe to their customers.
Executive Decision: Agilent
In his second "Executive Decision" segment, Cramer also checked in with Mike McMullen, CEO of Agilent Technologies (A) , the life sciences company helping in the fight to beat COVID-19.
McMullen said that Agilent is open for business and responding to this pandemic. He said Agilent is active in virus research, virus testing and vaccine development. In the area of testing, he said Agilent provides key ingredients for the testing process and has technology to help provide test results faster.
When asked about the possibility of a vaccine, McMullen said it's not a matter of if we have a vaccine, but when. He said Agilent employees love a challenge and are happy to participate in any way they can.
On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Thursday evening:
Dycom Industries (DY) : "This group has been brought down but I like it. I say stick with it."
Nucor (NUE) : "This is the best house in a bad neighborhood. I'd hold onto it but I wouldn't buy more."
Emerson Electric (EMR) : "They have a lot of oil and gas and a lot of China. I want you to hold onto it."
Diamondback Energy (FANG) : "This is well run enough to survive but I don't like the oil stocks."
Delta Air Lines (DAL) : "This might be good for a trade but not an investment."
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At the time of publication, Cramer's Action Alerts PLUS had a position JPM, GS.