It's always nice to see investors who do their homework and act logically get rewarded with excellent gains, while hubris and speculation strike out, Jim Cramer told his Mad Money viewers Wednesday.
Cramer said he wouldn't be worried about the continued meltdown in the meme stocks, investors should just stay diversified in companies with great earnings.
The stock market is currently made up of two camps. In the first camp are the speculators, those making big bets on meme stocks and cryptocurrencies.
These investors are continuing to get hammered because most of them are only in it for the momentum or are using borrowed money. That's why names like GameStop (GME) - Get GameStop Corporation Report plunged 6.5% and AMC Entertainment (AMC) - Get AMC Entertainment Holdings Inc. Class A Report cratered, down 9.9% by the close.
On the other side of the stock market are the investors, those that are doing their homework, betting on macro trends and companies that are delivering solid earnings. Target (TGT) - Get Target Corporation Report comes to mind, as this retailer hit it out of the park with their earnings again this quarter, sending shares up 6%. Meanwhile, in the semiconductor space, Advanced Micro Devices (AMD) - Get Advanced Micro Devices Inc. Report announced a $4 billion share buyback program that sent those shares up a quick 2.4%.
The contract between these two camps is stark, Cramer concluded, which is why he recommends sticking with the winners and leaving the meme stocks to the speculators.
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Executive Decision: GFL Environmental
In his first "Executive Decision" segment, Cramer spoke with Patrick Dovigi, founder, president and CEO of GFL Environmental (GFL) - Get GFL Environmental Inc. Subordinate no par value Report, the waste management company with shares up 79% over the past year. GFL was founded in 2007 and currently serves four million households in 27 states and most of Canada.
Dovigi said that while their original intention was simply to become a regional player in the waste management business, they've now grown into a major player as smaller operators opt to sell.
When asked about their lucrative recycling business, Dovigi explained that recycling has been evolving since China closed the door to many recycled materials. He said new streams have been created for many of the products we use every day.
Dovigi added that Canada is about 30 days behind the U.S. in their vaccination rates, but he expects that economy to fully reopen soon, which will see a return to normal for much of their operations in that country.
Executive Decision: Take-Two Interactive
For his second "Executive Decision" segment, Cramer also spoke with Strauss Zelnick, chairman and CEO of game maker Take-Two Interactive (TTWO) - Get Take-Two Interactive Software Inc. Report, which just delivered a monster 91-cents-a-share earnings beat. Shares of Take-Two closed up 6.9%.
Zelnick said that interactive entertainment is now the No. 1 entertainment vertical, ahead of all other activities. However, the company is realistic and expects demand to moderate as people begin to leave their homes again. But even with the world's economies reopening, Take-Two still has a great outlook.
Take-Two is a highly efficient company, Zelnick added, and the 700 new developers they added last year were needed to meet their goals of delivering 60 new titles in the next few years.
When asked about some of their existing titles, Zelnick said that Grand Theft Auto continues to set new records for online play and NBA2K had another great year as we're still in the early days of eSports.
Finally, Zelnick said that Take-Two is meeting consumers where they are, whether that's buying physical media or downloading games online. He said their gross margins are higher with digital sales, which is good news as the industry continues to move in that direction.
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Executive Decision: Cisco Systems
For his final "Executive Decision" segment, Cramer checked in Chuck Robbins, chairman and CEO of Cisco Systems (CSCO) - Get Cisco Systems Inc. Report, the network equipment maker that just posted strong results that included both top and bottom-line beats.
Robbins said that both revenue growth and earnings per share were up in the quarter, with order growth of 10%. This was the highest level of growth the company has seen in a decade.
When asked about their demand, Robbins explained that companies are investing now as they prepare both for a return to the office and a hybrid work environment for many workers. Customers are also responding to Cisco's many new products, including those that run off their custom-designed silicon.
Speaking of silicon, Robbins said all of their suppliers are working hard to meet demand and resolve shortages as they occur. Thus far, the effects have been minimal for Cisco, he said.
Love at any Price
In his "No Huddle Offense" segment, Cramer reminded viewers that discipline must always trump conviction. He said those that still have conviction in crypto, SPACs and the meme stocks, are setting themselves up for horrendous losses as the momentum swings the other way.
You can't be willing to buy an asset no matter what the price. You must always have the discipline to take profits periodically and be prepared to change your mind when the facts change.
Now's the time to take your profits in NFTs and SPACs and swap into the reopening stocks, industrials and the banks.
Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Wednesday evening:
GlaxoSmithKline (GSK) - Get GSK plc American Depositary Shares (Each representing two) Report: "I don't think that yield is safe. I want them to do well, but I'm not a big fan."
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At the time of publication, Cramer's Action Alerts PLUS had a position in AMD, MRVL.