What's the best way to invest in our new post-COVID stock market? Jim Cramer told his Mad Money viewers they need to move past the five stages of grief and stick to the fundamentals using his tried-and-true list of do's and don'ts.
Changing how you view your investments is always hard, Cramer admitted. That's why it's been a tumultuous couple of weeks as investors moved from denial and bargaining, through depression, to eventually come to accept the fact that their favorite tech stocks need to be sold in favor of high-quality cyclicals and industrials.
Here's what Cramer advised viewers to remember:
- Do keep a clear head and an open mind.
- Do keep some cash on hand for unforeseen opportunities.
- Do keep doing your homework and look for those opportunities.
- Do acknowledge that we're in a "sell the news" environment.
- Do be patient and wait for weakness before you buy.
The name of the game is to stay alert and be flexible. Things won't be as easy as they've been over the past year. As for what not to do, Cramer said:
- Don't blindly follow those who made money last year.
- Don't ignore your changing surroundings.
- Don't disregard the sway money managers have over the market.
- Don't underestimate that making money is more difficult now.
- Don't trust that Wall Street has your best interests in mind.
Not all SPACs are your friend, Cramer cautioned. In fact, most are downright dangerous. Those who made money last year likely won't do so this year, which is why you need to keep up with your homework.
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Executive Decision: RH
In his first "Executive Decision" segment, Cramer spoke with Gary Friedman, chairman and CEO of RH (RH) - Get Report, the high-end home goods retailer that saw its shares surge 9% on strong earnings that included 22% revenue growth.
Friedman said you can't take an ordinary path to the extraordinary, which is why the RH story has taken so many different twists and turns. He said many people still think of the old RH and don't see them for the aspirational brand they've become today. "Everyone will eventually catch up," he said.
Some of those unordinary paths was the company's announcement that it looks to build entire homes in Aspen, Colo. Friedman quipped that they haven't even begun to design these homes yet, but they've already received offers from interested buyers sight unseen.
Similar bewilderment has become the company's "guest house" project in New York, which Friedman insisted is not a hotel, but a whole new way to escape our ever-connected world.
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Building on Infrastructure
There doesn't need to be an infrastructure bill in Congress to make the infrastructure stocks a buy, Cramer told viewers, as he highlighted two of his favorites, Martin Marietta Materials (MLM) - Get Report and Nucor (NUE) - Get Report.
Whether Congress passes a big infrastructure bill, a small bill, or no bill at all, our economy is on the mend and that means construction activity is picking up across the country. With construction comes the need for materials from Martin Marietta.
I know what you're thinking. Rocks are boring. But that's kind of the point. Martin Marietta is a solid performer that's only going to get better. Cramer said he likes that the company is focused on the "mega regions" of our country and on the biggest projects at our biggest companies. Add to that the fact that inflation is actually good for Martin Marietta because they can raise prices, and you can see why shares rose 3.4% Thursday.
Cramer's next favorite should come as no surprise. Nucor President and CEO Leon Topalian was a guest on Mad Money Wednesday night. Nucor's stock remains incredibly cheap, trading at just eight times earnings, even with Thursday's 4.8% move to the upside.
When it comes to roads, bridges, buildings and data centers, you want Nucor and Martin Marietta.
Executive Decision: GrowGeneration
For his second "Executive Decision" segment, Cramer also checked back in with Darren Lampert, CEO of GrowGeneration (GRWG) - Get Report, the hydroponics retailer that just posted 63% revenue growth for the year.
Lampert explained that GrowGeneration sells technology and solutions for the cannabis industry and controlled-environment agriculture products are not something you can find at your local Home Depot (HD) - Get Report or Lowe's (LOW) - Get Report. The company only operates in eight states, which means there are still 38 places left to build.
Lampert noted that cannabis is growing faster than the wine and spirits market and as legalization grows across the country, that will only continue.
GrowGeneration is also thriving from its private-label business. Lampert said they are the second largest supplier in their stores, which allows them to offer superior products with great gross margins.
Don't Take it Personally
In his No-Huddle Offense segment, Cramer cautioned viewers that investing is never personal. Over the past year, it seemed like stocks only ever went higher. This led to a false sense of security for younger investors who have only ever known the bullish side of investing.
But for many investors, this past year was about more than just making money, it was proving the professional money managers wrong. In the case of Tesla (TSLA) - Get Report, it was about proving the naysayers wrong. But you can't be personally invested in the stocks you own, Cramer said. Investing should never be taken personally. It's simply a matter of buying low and selling high.
Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Thursday evening:
Fast Acquisition FST: "This is a great SPAC operator that I want to invest with. This is a buy."
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At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.