Single family home sales have finally eclipsed their 2006 highs, and Jim Cramer told his Mad Money viewers on Thursday, and that's a good thing. Fourteen years ago, rampant speculation in housing led to the financial crisis just two years later. But this time, Cramer said, it's different.
Put simply, Cramer explained that America is still waiting for vaccines, which puts the two-thirds of our economy that's service based -- on ice. That leaves housing as one of the few bright spots to champion, as housing is good for a large part of our remaining economy. Given unemployment still stands at 6.7%, strong housing is a miracle.
And while red-hot housing was the kiss of death in 2006, Cramer said now consumers are more solvent and it's much harder to get a mortgage. People are also fleeing the cities to avoid COVID and remodeling their homes for remote working and schooling. That means stocks like Home Depot (HD) - Get Home Depot, Inc. Report, Lowe's (LOW) - Get Lowe's Companies, Inc. Report, Sherwin-Williams (SHW) - Get Sherwin-Williams Company Report and Trex (TREX) - Get Trex Company, Inc. Report are all still buys. Cramer was also bullish on CarMax (KMX) - Get CarMax, Inc. Report and Ford Motor (F) - Get Ford Motor Company Report, as people need cars, and on Apple (AAPL) - Get Apple Inc. Report and Hewlett-Packard (HPQ) - Get HP Inc. Report for laptops.
A booming housing market is good for this economy, Cramer concluded, even if the last one ended horribly and almost destroyed our financial system.
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Executive Decision: Axon Enterprise
In his first "Executive Decision" segment, Cramer one again spoke with Rick Smith, founder and CEO of Axon Enterprise (AAXN) - Get Axon Enterprise Inc Report, makers of tasers and police body cameras.
Smith said that no matter where you fall on the political spectrum, police accountability is something everyone can agree on. Video, he said, plays a big part in making that happen, as does providing police with non-lethal ways to apprehend suspects, like tasers. To date, 220,000 people have been saved from death or serious injury by officers using tasers instead.
When asked why every police department isn't already using body cameras for their officers, Smith explained that it takes time for change to occur, but in 2020, everyone saw firsthand the value having video accounts of what's happening in the field.
Collecting video evidence is only the first step in the accountability process, however. Smith said they are now one of the largest clients on Microsoft's (MSFT) - Get Microsoft Corporation Report Azure cloud and are only just beginning to use all of the data they collect to create innovative new services and insights.
Smith was also bullish on Axon's overseas prospects. He said there are 10 times as many police outside the U.S. and international will be a big driver of growth over the next five years.
Executive Decision: WM Holdings
For his second "Executive Decision" segment, Cramer spoke for the first time with Chris Beals, CEO of WM Holdings, the cloud software provider for the cannabis industry. WM Holdings will soon be coming public by reverse merger with Silver Spike Acquisition (SSPK) - Get Silver Spike Acquisition Corp Class A Report, a special purpose acquisition company.
Beals explained that WM Holdings is a marketplace for cannabis goods. The company boasts 10 million monthly active users and providers retailers with a host of services from retail and sales systems to product reviews, maps and more.
Given all of the different regulatory and compliance issues that vary from state to state and locality by locality, the cannabis industry requires specialized solutions and can't take advantage of generic systems, Beals added.
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Why Business Size Matters
The past 10 months have seen a seismic shift from small- and mid-size business to the biggest retailers and restaurants. Why? Because the big companies are the only ones with pockets deep enough to cope with what the pandemic requires.
According to recent surveys, nearly 17% of all restaurants are currently closed long-term or permanently. The average age of those restaurants was 16 years. Cramer said these smaller businesses can't compete against the now unassailable moats created by their bigger rivals. Shares of Chipotle Mexican Grill (CMG) - Get Chipotle Mexican Grill, Inc. Report have risen 260% from their March lows. Darden Restaurants (DRI) - Get Darden Restaurants, Inc. Report is up 380% and Starbucks (SBUX) - Get Starbucks Corporation Report has mastered takeout and delivery, sending its shares up 109%.
On the retail side, Cramer said the big winners are no surprise. Target (TGT) - Get Target Corporation Report, Walmart (WMT) - Get Walmart Inc. ReportT and Costco (COST) - Get Costco Wholesale Corporation Report, along with Home Depot and Lowe's reign supreme thanks to their wide aisles, high throughput and huge investments in technology.
The Winning Ticket
In his No-Huddle Offense segment, Cramer offered some advice for the winner of the $700 million Powerball jackpot. He said first, always take the lump sum, not the annuity. Second, you only need to get rich once, so avoid risks, scams and get-rich-quick schemes. With $700 million, you simply don't need them. Third, don't fret about taxes, keep your eye out for inflation.
In a world with hyper-inflation, Cramer advised investing in precious metals, real estate and fine art to protect your fortune, then using municipal bonds and dividend-paying stocks to provide you with some income.
Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Thursday evening:
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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, COST, WMT, SBUX.