Cool Off: Cramer's 'Mad Money' Recap (Wednesday 9/23/20)

Jim Cramer says some investors are learning a brutal lesson: You lose money a lot faster than you make it. So, appreciate this pullback as an opportunity to learn.

Days like Wednesday may be discouraging, but they're a vital part of a healthy market, Jim Cramer told his Mad Money viewers, after the Dow Jones Industrial Average plunged over 500 points. Remember, the goal is to buy low and sell high, not buy high and try to sell even higher. Investors must always remember that you'll lose money a lot faster than you'll make it. 

Selloffs like we've seen over the past two week may bring back memories of the dot-com crash in 2000, but Cramer said this market is not like 2000. Back then, there were a flood of IPOs, but none of them had actual earnings. In fact, only a handful of the 330 IPOs ended up making it to 2002. That's not the case today, where many of the IPOs are either profitable or close to it.

The dot-com collapse was also led by multiple expansion, where investors were willing to pay more for the exact same earnings. Today however, the earnings for companies like Zoom Video  (ZM) - Get Report and Tesla  (TSLA) - Get Report are increasing. Their share prices are merely reflecting that growth.

Cramer said he'd consider buying stocks like Apple  (AAPL) - Get Report, Microsoft MSFT, Amazon  (AMZN) - Get Report and even Alphabet  (GOOGL) - Get Report as the market weakness continues. He also suggested some safety stocks with good dividends like Coca-Cola  (KO) - Get Report, PepsiCo  (PEP) - Get Report, General Mills  (GIS) - Get Report and Johnson & Johnson  (JNJ) - Get Report.

The market is likely to remain ugly until all of the overly-optimistic investors have been washed out, Cramer concluded, but by the middle of next month, the bulls should be ready to make a comeback.

Cramer and the AAP team are looking at everything from earnings and tariffs to the Federal Reserve. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.

Don’t miss Cramer’s best, every day, with fast, actionable strategies: StreetLightning.

Know Your IPOs

Speaking of IPOs, in his "Know Your IPO" segment, Cramer opined on his favorite among today's batch of new issues, GoodRx  (GDRX) - Get Report.

GoodRx began as a drug comparison tool and has evolved into a price shopping service that boasts 4.9 million monthly active users that save, on average, 70% on prescription drugs. The service has 150 billion prescription data points that help customers find the best prices on the medication they need, often on a recurring basis.

Cramer said there's a lot to like about GoodRx, which he uses personally. But, as always, the key factor in evaluating any IPO is price. At current levels, GoodRx trades at 30 times sales. Cramer said he's willing to pay up for a fast-growing service like GoodRx, which is why he'd nibble on any weakness. He said any pullback to the $30s would be the ideal entry point. 

Executive Decision: Anaplan

In his first "Executive Decision" segment, Cramer spoke with Frank Calderoni, chairman and CEO of Anaplan  (PLAN) - Get Report, the financial planning and analysis platform that's right at the heart of the cloud software revolution. Shares of Anaplan are up 22% over the past month.

Calderoni said companies are looking for agility and resiliency, and aligning finance with your goals and abilities is crucial. Anaplan's software lets companies quickly plan and manage changes in supply chains, human capital, working from home and whatever else the world throws at you.

With Anaplan, companies can compile intelligence from not only their own internal systems, but also from the world around them. By using data from suppliers, customers and other stakeholders, Anaplan can deliver realistic forecasts that companies can depend on. Calderoni said Anaplan has great partners who help to provide that global view of your business.

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.

Nike's Leap

Shares of Nike  (NKE) - Get Report soared 8.8% today as the athletic apparel kingpin posted a phenomenal quarter that stunned even the analysts that cover the company. Cramer recommended investors buy Nike ahead of earnings in last week's "Game Plan," but even he said he didn't expect things to be this good in the middle of a pandemic.

Even before COVID-19 began, Nike had begun to transform itself from a wholesaler to a digital-first, direct-to-consumer brand that included greater customer loyalty and increased gross margins. New CEO, John Donahoe, came onboard in October 2019 and accelerated the company's plans.

Ultimately, Nike plans to be 50% direct-to-consumer, a ratio that seems more than likely given its strong growth this quarter. Sales in China surged 8% and the rest of the world was also better than feared.

Cramer said even at new all-time highs, Nike is still a buy. He urged investors not to miss this fabulous move from one of the world's great brand names.

High Expectations

In his "No Huddle Offense" segment, Cramer reminded viewers that on Wall Street, expectations are everything. Case in point: Tesla versus Nike.

Expectations were high for Tesla's "Battery Day" event Tuesday, as investors dreamed of million-mile batteries, solar charging and so much more. In reality, Tesla did announce a new battery, but only one that will allow it to build a $25,000 electric car in the next three years and up to 20 million EVs globally by 2030. Cramer said this news, in a vacuum, would have been huge for Tesla. But given the expectations, the stock must burn off some steam before it's worth buying.

Compare Tesla to Nike, however -- a stock that no one expected to do well. Who needs new shoes when you are largely stuck at home? Turns out, plenty of people. And because expectations were so low, the stock surged over 8% in a single day.

Lightning Round

Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Wednesday evening:

Chewy CHWY: "That's a good company. If you like pet food, I also liked the General Mills conference call. "

Chegg  (CHGG) - Get Report: "I think you're doing a great job. "

MetLife  (MET) - Get Report: "MetLife is fine but I don't like the financials."

LyondellBasell Industries  (LYB) - Get Report: "I think this one is doing quite well."

Beyond Meat  (BYND) - Get Report: "This one is ridiculously expensive but it's always gonna be that way. They're the future."

Inseego  (INSG) - Get Report: "I would buy this one if you can get it below $10."

Magna International  (MGA) - Get Report: "I like Magna and a lot of the autos. This one has come down a great deal."

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, AMZN, GOOGL, MSFT, JNJ.