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Dream Market: Cramer's 'Mad Money' Recap (Tuesday 12/22/20)

Jim Cramer says there's the real market, which is struggling, and the dream market of companies focusing on fossil fuel alternatives -- which are risky but have potential.
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We don't just have one stock market, we have two, Jim Cramer told his Mad Money viewers Tuesday. There's the real market, made up of real companies with real earnings. Then there is the dream market, where hopeful companies with promising new technologies are moving away from fossil fuels and dreaming of becoming the next Tesla  (TSLA) - Get Tesla Inc Report.

Despite the ridiculous valuations, the dream market continues to soar, Cramer said, especially in the alternative energy and electric vehicle space. Names like Plug Power  (PLUG) - Get Plug Power Inc. Report are up 1,029% for the year, Bloom Energy  (BE) - Get Bloom Energy Corporation Class A Report has risen 306% and newcomers Luminar  (LAZR) - Get Luminar Technologies, Inc. Class A Report, Ballard Power  (BLDP) - Get Ballard Power Systems Inc. Report and QuantumScape  (QS) - Get QuantumScape Corporation Class A Report continue to captivate investors' imagination.

Why is there so much interest in these companies? Cramer said, it's partially because new technologies are finally allowing these companies to become profitable. They are also benefiting from the incoming Biden administration, which promises to be far more eco-friendly than the current administration. Finally, there's Tesla itself, which is seen as a blueprint for transforming from a scrappy startup to the S&P 500.

Even Apple  (AAPL) - Get Apple Inc. Report, an Action Alerts PLUS holding, is benefiting from the euphoria. Shares are up 79% for the year after reports the company may not have abandoned its electric vehicle efforts.

Cramer said investors need to take profits in these red-hot stocks, as secondary offerings are likely in the works for many of them thanks to these sky-high valuations.

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Off the Tape: Ascend Performance Materials

In his "Off The Tape" segment, Cramer sat down with Phil McDivitt, CEO of the privately-held Ascend Performance Materials, makers of antimicrobial fabrics that hope to change the face of masks.

McDivitt said that Ascend first began working on their Acteev technology four years ago as a way to stop bacteria. But this year, the company quickly pivoted their testing to both viruses and bacteria and have now completed over 500 different tests. Acteev fabrics stop over 99% of all viruses including the coronavirus.

Ascend is the biggest company you've never heard of, McDivitt explained. With over $2.5 billion in sales, the company is the largest integrated producer of nylons. They currently have masks for general use as well as surgical level one and level three masks. They are currently finishing development on N95-grade masks.

Executive Decision: The Container Store Group

In his first "Executive Decision" segment, Cramer spoke with Melissa Reiff, president, chairwoman and CEO of The Container Store  (TCS) - Get The Container Store Group, Inc. Report, the home goods retailer with shares that soared 20% today on strong earnings.

Reiff credited The Container Store's success to a great team that has been working hard to refine their brand, purpose and vision. She said their goal is to make life easier for their customers. Organization improves your quality of life by giving you more time to do the things you love, she said. 

Reiff spoke highly of their new product partnerships as well as their partnership with the Netflix  (NFLX) - Get Netflix, Inc. Report series, "The Home Edit." She said these new initiatives are attracting new customers without alienating those who already believe in their brand.

When asked about the sustainability of their products, Reiff admitted there is still work to be done, but replacing plastic with sustainable materials remains a focus.

Shares of The Container Store are up almost 300% over the past six months.

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Executive Decision: Twilio

For his final "Executive Decision" segment, Cramer checked in Jeff Lawson, co-founder, chairman and CEO of cloud-messaging service Twilio  (TWLO) - Get Twilio, Inc. Class A Report, to talk about the company and Lawson's efforts to help those in need this holiday season.

In April, Lawson helped found HelpKitchen, a charity that pays restaurants to use their excess capacity to help make meals for those in need. He said the effort has been a huge success, helping to keep restaurants in business while also feeding those who have been waiting for blocks to get meals through traditional channels. HelpKitchen has already provided over 500,000 meals, with many more coming this holiday.

Turning to the topic of Twilio, Lawson said that the messaging service has been assisting in multiple ways, from contact tracing to testing and vaccine locations. He said the pandemic didn't create the need for digital transformation, but it certainly accelerated the process of digitizing our interactions, adding convenience and enabling all-new service options.

Four Rules for Owning a Stock

In his No-Huddle Offense segment, Cramer said it's great that so many younger investors are taking advantage of the stock market. But unlike the old days of brokers and commissions, there are far fewer guard rails for when you get yourself into trouble. That's why Cramer reiterated his four rules for owning a stock.

First, Cramer said investors must know what they own and be able to give three reasons why they think it's headed higher. Second, remember that cheerleading a stock doesn't make it go higher. In fact, it often does the opposite. Third, Cramer said investors must have a thesis for why they want to buy a stock. Is there a short term catalyst? Is this a momentum trade? Or are you owning for just the dividends?

Finally, Cramer cautioned about using options before you're ready. Trading options is not for the beginning investor, he said. It's far too easy to lose your money.

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" Tuesday evening:

Lockheed Martin  (LMT) - Get Lockheed Martin Corporation Report: "I thought this stock would go up, but it hasn't yet. This is a good one."  (CRM) - Get, inc. Report: "Salesforce was up big today but still has more to go."

General Motors  (GM) - Get General Motors Company Report: "I think GM is radically undervalued."

Enterprise Products Partners  (EPD) - Get Enterprise Products Partners L.P. Report: "This one has an 8% year and it's still not good enough. I don't want you in this group."

ContextLogic  (WISH) - Get ContextLogic, Inc. Class A Report: "Let's wait to hear the earnings before we act."

CRISPR Therapeutics  (CRSP) - Get CRISPR Therapeutics AG Report: "This is a really good company."

Hyliion HYLN: "I don't know why this one hasn't caught fire yet. Now's your chance."

Exact Sciences  (EXAS) - Get Exact Sciences Corporation Report: "I like ExactSciences but I like Illumina  (ILMN) - Get Illumina, Inc. Report as well."

Goodyear Tire & Rubber  (GT) - Get Goodyear Tire & Rubber Company Report: "Sell."

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