The stock market is starting to feel like a win-win situation, Jim Cramer admitted to his Mad Money viewers Wednesday. It doesn't seem to matter whether you buy the pandemic stocks or the recovery stocks.
No matter what you buy, it's likely to head higher. But if you're a prudent investor, you always need to be considering the risk factors.
The market has three big dark clouds hanging over it at the moment. The first is the surging number of COVID cases. Cramer said while we all wish for a vaccine, additional lockdown measures are coming as the virus spirals out of control with no guidance from the federal government.
The second dark cloud is a contested election. Most investors are complacent that things will work themselves out, but the possibility of a constitutional crisis still looms large.
Finally, there is the lack of a stimulus bill. While investors are already looking ahead to a vaccine in the spring or summer, a lot of companies will go under before we get there, Cramer said, and we might not see any serious negotiations out of Congress until January.
All of these situations will impact your portfolio, Cramer concluded, and that's why investors cannot risk getting complacent and need to remain vigilant and raise cash for the next selloff that is likely coming our way.
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.
Executive Decision: Rocket Companies
Farner credited Rocket's success with his company's substantial investments in technology. He explained that technology has allowed Rocket to scale from $15 billion in closed volume at the beginning of the year to over $30 billion in October. Rocket also integrates with third-party services like Mint and Intuit.
The focus of Rocket continues to be loan quality and customer service, Farner added. The company has a high customer satisfaction rating and services over two million loans with very few defaults.
When asked about their stock buyback program, Farner said Rocket continues to be opportunistic. If they feel there is value in their shares, they will not be shy about taking advantage of that opportunity.
Executive Decision: Ulta Beauty
For his second "Executive Decision" segment, Cramer also spoke with Mary Dillon, CEO of Ulta Beauty (ULTA) - Get Report, to learn more about the company's new partnership with Target (TGT) - Get Report, which will see Ulta mini stores within 100 Target locations.
Dillon said this partnership is all about two retail leaders coming together for brand growth. She said the new Target locations will have the look and feel of Ulta, complete with a curated selection of brands and consultation areas. They will be staffed by Target employees specifically trained by Ulta.
Dillon added that with over 100 million loyalty members between the two companies, this will be a whole new way for consumers to learn and discover the Ulta brand.
When asked about culture fit and cannibalization, Dillon said that both companies share the "conscious beauty" philosophy which includes clean ingredients, cruelty free and vegan with sustainable packaging. She dismissed the notion of cannibalization at Ulta's existing locations, citing a map with very little overlap.
Executive Decision: Lemonade
For his final "Executive Decision" segment, Cramer checked in Daniel Schreiber, chairman and CEO of Lemonade (LMND) , the online insurance company with shares that fell 12% after it reported strong quarterly results.
Schreiber said Lemonade is off to a great start as a public company, after their IPO just a few months ago. They just introduced pet insurance on their platform and they will soon be adding term life insurance as well.
Lemonade's pet insurance is a good option for pet owners, Schreiber said. Typically, pet insurance is expensive, but on Lemonade's platform, it's affordable to everyone who has a pet they love. The product is off to a tremendous start, he said, achieving levels that took their renter's insurance three years to hit.
When about the secret to their success, Schreiber explained that Lemonade offers superior customer service while crushing the costs of their competitors by eliminating the middleman and selling directly to customers. He said it's hard to beat insurance that will pay your claim in as little as three seconds.
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.
Own Apple, Don't Trade it
In his "No Huddle Offense" segment, Cramer said when it comes to Apple (AAPL) - Get Report, his manta of "own it, don't trade it," still applies. Apple continues to be a wildly misunderstood company, Cramer explained. Tuesday, the company introduced three new computers featuring Apple's new proprietary processors. The market shrugged.
While it's true that PCs aren't a big chunk of Apple's earnings, the new laptops are indeed impressive, Cramer said, and PCs are in demand as people continue to work from home. Yet the market still thinks of Apple as a hardware maker, viewing its valuation of 30 times earnings as too expensive.
But in reality, Cramer said Apple is a consumer goods maker, one with substantial recurring revenues from its services. Under that umbrella, Apple sells for only a slight premium to its peers. Given how the company is able to continually innovate, as we saw yesterday, and it deserves every penny of its current valuation.
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:
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, CVS.