Hi, I’m Jim Cramer. And club members, welcome to our last call of the year, one where I want to set the table for 2021 using all that we have learned together in 2020 and adding in impressions of a new administration. It may not be Wall Street's best friend but oddly will be friendlier than the current one. Why is that? Isn't Trump a Republican and Biden a Democrat and one’s good for business and the other one is good for labor? Ah, if only things were that simple.
In reality, Biden represents globalism, which is fantastic for stocks and Wall Street, especially for many of the stocks that we own. And Trump represents American exceptionalism, where our country comes first, but also second and third and fourth to any of our trading partners that we need to do business with if our company is going to make more money.
Now, I'm not going to go into the toxic talk of politics beyond that. It's just too horrible. I just wanted you to know that I don't expect Biden to be nearly as awful for stocks as I'm sure some of you might expect. And I do believe that he can be quite good for stocks that need a stable global environment. I believe the rally in the cyclical stocks -- those, of course, are stocks of companies with tons of business, including a lot overseas -- can be explained by the return to the globalist agenda by President-elect Biden, one that I personally have a bit of a hard time with. I don't like how we might give away the store to the Chinese again. That's not what we're going to talk about. So the end of that.
I would not be as positive about the prospects of the Biden presidency had the Senate gone Democratic. I also think that the appointment of Janet Yellen as treasury secretary chose to continue with President Obama, which is more middle-of-the-road than I had feared. Politics have hardened since Obama’s presidency. So it could have gone in a much more radical fashion. But believe me, Yellen? Jared Bernstein? I thought he's from CNBC. The rest of the economic team, well, they represent mainstream thinking. And if we're going to make money in stocks, we need to have the mainstreamers inside, not out.
Now, let's see what we learned in 2020 that can help us make money in 2021. First, we know that the pandemic forced even the most reluctant companies to digitize, just to be able to handle the move from the central office to the perimeter. That's been fantastic for many of our stocks. And we can bet that it's going to continue, given that cloud adoption starts small and goes big, then engulfs the entire organization. We are only at the beginning of the “getting big things.”
Second, we know that e-commerce, like digitization, came on strong because of the pandemic, and it too isn't going back to previous levels. Now, there are bizarre brick-and-mortar exceptions. I mean L Brands, (LB) - Get Report that was pretty amazing. American Eagle Outfitters. (AEO) - Get Report Bed Bath and Beyond: (BBBY) - Get Report I actually kind of like that one. They come to mind. However, the essential retailers went digital in 2020. They went all-in digital and they triumphed over the little guy, who's often closed by the government.
Third, I know that 5G seems like it's baked in, for all you hear about it. Yet we literally, just literally, started to be able to buy phones with that incredible system. If you jumped out of cellphones this early into, say, the 3G or 4G cycles, well, you left a huge amount of performance on the table and you probably thought you were late when you sold. You weren't.
Fourth, we know that because of Biden, international commerce will come back much more quickly than under Trump and we need companies that can profit from Biden's victory. Fact is I look at the portfolio and I don't think we can have enough of them. And I say that knowing that we got plenty of them. And don't worry, we're going to go over all of them.
Finally, fifth, health care is still viable as a theme if only because the pandemic isn't over. And more important, we know these companies will not be hurt as much by Biden as one might have thought or certainly by any other candidate in the Democratic Party. They are, however, along with the consumer packaged goods, or CPG, companies, the wrong place to be on a reopening of the world's economies. So we have systematically taken action to reduce our exposure to them.