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When the stocks with great news can't manage a rally, investors need to respect the bear. That was Jim Cramer's advice to his Mad Money viewers Wednesday after the markets posted more sizable losses. Cramer said there are some signs that capitulation is close at hand, but not enough yet to sound the all-clear.
Cramer called out General Motors (GM) - Get Report as one case of good news that didn't matter. He said this company delivered the trifecta today: raised guidance, boosted its dividend and increased its buyback. Did it matter? Nope. Shares of GM closed the day up just 19 cents.
Then there are the FANG stocks, Cramer's high-growth cohort that includes Facebook (FB) - Get Report , Amazon.com (AMZN) - Get Report , Netflix (NFLX) - Get Report and Alphabet (GOOGL) - Get Report . All of these names suffered big losses, Cramer noted. His charitable trust, Action Alerts PLUS, owns Facebook and Alphabet.
Cramer said investors can never afford to wait for that "perfect" bottom, but so far he's not willing to advise buying just yet, even though the markets are more oversold than they've been in years.
Blame the Chinese
Like it or not, the Chinese stock market has taken control of our stock market, Cramer told viewers. That's why he offered a brief history lesson on how the Shanghai stock exchange has become a household word.
Cramer explained that from 2009 through 2013, while our stock market was recovering, the Chinese stock market was cooling, falling from 3,100 to 2,100 on the Shanghai composite. This move, Cramer said, was totally rational because the Chinese economy was also cooling.
But then in 2014, the Chinese decided to jump-start the Shanghai by linking it to the Hong Kong markets and encouraging foreign investment. This led to an explosion of margin investing, Cramer said, and speculating on stocks with borrowed money is never a good thing.
From 2014 through May 2015, the Shanghai soared to 5,100. But then the bubble burst. Despite all the efforts to slow the exodus, the Shanghai closed today at 2,950.
Given that all of the Shanghai's gains were artificial from the start, Cramer said he wouldn't be surprised to see it lose all its gains and fall to 2,850, the August bottom, or even 2,478. The Shanghai could even fall all the way to where the foreign investment began, down at 2,134.
That's why Cramer said he still prefers our stock market over the Chinese. The Chinese still have a lot to learn about financial markets.
No matter how much you want to own a stock, investors must realize that fear runs our market, Cramer told viewers, and that means the bull case for owning a stock just doesn't matter right now.
In any other market, Cramer said he'd recommend buying Match, given its sizable user base and total addressable market. Match's acquisition of Tinder makes it the leader in mobile dating. With over 59 million active users, there's a lot to like with Match, Cramer concluded.
But Cramer also noted the bears say Match may have a hard time monetizing that big user base and the company has little organic growth to speak of, only acquisitions. In today's market, where bad news rules the day, investors simply cannot speculate on Match, at least not at these levels.
Cramer said he'd only be a buyer of Match if it breaks below its IPO price of $12.
Executive Decision: Tom Pike
For his "Executive Decision" segment, Cramer spoke with Tom Pike, CEO of Quintiles (Q) , the clinical trial outsourcing company that's seen its shares slide from $80 in July to just $63 today as the broader markets have declined.
Pike said despite the political and economic backdrops, drug companies raised over $74 billion in new capital last year. Those companies aren't worth much unless their products are in the clinics being tested and getting approved.
Pike continued that the U.S. had more drug approvals last year than in any other year since 1996. He said there are real innovations being made and some terrific drugs coming down the line, which creates a huge opportunity for Quintiles and the entire drug industry.
Pike said that with our aging society and tons of ailments out there without effective treatments, there is still a lot of work to be done.
Cramer said even though the biotech stocks have crashed, it doesn't mean it's the end of the world.
Cramer was bearish on Energy Transfer Equity (ETE) , AmeriGas Partners (APU) - Get Report , Rio Tinto (RIO) - Get Report , Community Health Systems (CYH) - Get Report , Spectra Energy (SE) - Get Report and SunEdison (SUNE) .
No Huddle Offense
In his "No Huddle Offense" segment, Cramer had some advice for the winner of tonight's record-setting $1.5 billion Powerball lottery.
Cramer said that first, the winner should take the lump-sum payment because it will take advantage of the benefits of compound interest. Second, he said you only need to get rich once, so the winner's focus should be on capital preservation and not risk taking. Next, Cramer said any investments should be short term because interest rates are rising.
But Cramer's last bit of advice was his best: There's a lot more to life than money, so give most of your winnings away to charity.
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At the time of publication, Cramer's Action Alerts PLUS had a position in FB and GOOGL.