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Cramer's Mad Money Recap 10/7: Supply, Semiconductors and Interest Rates

Jim Cramer says everyone's worried about inflation, but the problems causing some prices to rise can't be fixed by the Federal Reserve.
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Everyone is obsessed with inflation these days, but the reason prices are going up isn't something the Federal Reserve can fix, Jim Cramer told his Mad Money viewers Thursday. The inflation we have today isn't being caused by overheated demand, Cramer said, it's here because people have changed the way they live their lives. 

Sometimes the Fed misses the forest for the trees, Cramer explained. The reason we have a shortage of truck drivers, for instance, is because we tightened regulations on how many hours truckers could drive right before a pandemic where many drivers left the workforce. Let's not forget that COVID has taken the lives of over 700,000 Americans. Some of those we lost were bound to have worked in transportation.

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Making matters worse, all we hear about today is how autonomous trucks will soon replace drivers altogether. Would you want to start a career in trucking knowing you're about to be replaced?

Our nation's trucking problem won't be solved with higher interest rates, Cramer said, it can only be solved by paying substantially higher wages.

Another man-made problem is our semiconductor shortage. Last year, many companies felt demand would be lower, so they ordered fewer chips. China, by contrast, anticipated higher demand and ordered more chips. Now, as demand is ramping up, COVID has shut down critical foundries when we need them most.

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The chip shortage also won't be fixed with higher interest rates, Cramer concluded. This is just the world we live in. People have changed their behaviors and the world needs time to catch up. Only vaccines will truly help us to get to our new normal faster.

Executive Decision: Nucor

In his first "Executive Decision" segment, Cramer spoke with Leon Topalian, president and CEO of Nucor  (NUE) - Get Nucor Corporation Report, the steelmaker with shares up 86% year to date, including another 3% Thursday. Shares of Nucor currently trade for just 4.5 times next year's earnings.

Topalian said that Nucor's best days are still ahead of it, thanks to strong secular trends pulling in its favor and innovation at the company. He said the green and digital economies will be built with steel, and Nucor is at the forefront of both innovation and green technologies.

Topalian touted Nucor's newest plant, the world's first net-zero steel production facility. The plant is just a part of what makes Nucor the cleanest steel producer on the planet.

Nucor isn't getting bigger for the sake of getting bigger, Topalian said, it's getting bigger to better serve its customers. The company has been making strategic long-term investments in all of the right places, which is why companies like General Motors  (GM) - Get General Motors Company (GM) Report count Nucor as a partner.

Executive Decision: Sharecare

For his second "Executive Decision" segment, Cramer spoke with Jeff Arnold, Co-founder, chairman and CEO of Sharecare SHCR, the digital health platform with shares down 21% since their IPO earlier this year.

Arnold said Sharecare's mission is to improve the lives of its members. The company does this through four pillars: health assessments, digital therapeutics, healthcare management and an in-home caregiving network.

Arnold noted that over 50 million people have taken their health risk assessment, which pairs responses with artificial intelligence to build a digital twin that can estimate the cost of care and likely outcomes for various procedures. The company's in-home care network includes over 450,000 caregivers.

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Sharecare is also using its platform to help get patients into clinical trials so they can help collect the data needed to bring cures to market faster.

IPOs: Hot or Not?

Wall Street's patience has finally run out for hot, new IPOs, Cramer told viewers, but that's a good thing for the gym stocks, including Life Time Holdings LTH, which came public Thursday.

The fitness sector is a crowded one, and Cramer's on record warning investors to avoid stocks like Peloton  (PTON) - Get Peloton Interactive, Inc. Class A Report and to be careful with volatile stocks like F45 Training  (FXLV) - Get F45 Training Holdings Inc. Report, which plunged 8.9% Thursday. He remains a fan of Planet Fitness  (PLNT) - Get Planet Fitness, Inc. Class A Report.

But with this week's iFIT debut postponed, what should investors make of Life Time, which saw its shares dip 1.3% on opening day?

Life Time is an aspirational brand that currently operates 150 locations. Their facilities are more resort than gym, Cramer explained, and the company was quick to pivot to digital memberships when the pandemic first hit. But now that the Delta variant is on the decline, members are flooding back to in-person fitness and the company is reemerging as a strong contender.

Cramer said while Life Time still has a lot of debt on its balance sheet, the company's enterprise multiple is only 14, almost half that of rival Planet Fitness at a multiple of 27. Given that low valuation, and its lackluster debut, Cramer said he'd be a buyer on any continued weakness.

Green Is Good

In his No-Huddle Offense segment, Cramer told viewers that Wall Street has finally gotten religion when it comes to the environment. Companies have finally learned that what's bad for the planet is bad for customers and, ultimately, bad for shareholders.

The environment is something we all have to care about, Cramer continued, which is why the Securities and Exchange Commission should step in with new standards so that investors can compare companies' environmental claims on an apples-to-apples basis. There's a big payoff for going green, but only if investors can determine who's legit and who's just saying they are.

Lightning Round

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

MyMD Pharmaceuticals MYMD: "This is very very speculative. This is not my cup of tea at this moment."

Cortexyme  (CRTX) - Get Cortexyme, Inc. Report: "This has become a crowded field, which I think could be dreadful."

Hydrofarm HYFM: "I want you to hold onto this one."

Azek Co.  (AZEK) : "People are turning on housing, but people want their product. I'm a believer."

SoFi Technologies  (SOFI) - Get SOFI TECHNOLOGIES INC Report: "This one got hurt but it's already coming back. You should buy SoFi."

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