Despite how it looks, this week's wave of IPOs won't collapse the market, Jim Cramer assured his Mad Money viewers Wednesday. After this new supply of shares has been absorbed, the market will be even stronger, fueled by optimism of younger investors.
It's no coincidence that the market rolled over just as DoorDash (DASH) - Get Report debuted at $182 a share, almost double their expected price of $100 a share. Cramer explained that fund managers must always sell some of their other holdings in order to make room for new IPOs and today was no different.
The market's weakness was made worse by younger investors using market orders to get a piece of DoorDash. Cramer explained that market orders will buy shares at any price, which is why he always urges investors to use limit orders instead. Limit orders cap the price at a set level, ensuring you won't pay too much.
By the close, DoorDash was up 5%, trading at 13 times sales. Cramer reiterated that while he encourages speculation, he wouldn't pay more than $100 a share for DoorDash.
Be prepared for more weakness Thursday, Cramer said, as the market will be digesting the Airbnb IPO, which will be even bigger than DoorDash.
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.
Off the Charts
In the "Off The Charts" segment, Cramer checked in with colleague Larry Williams to learn what the seasonal patterns might hold for the markets in the coming weeks.
Williams first looked at the seasonal patterns of the overall markets using the S&P E-Mini futures. He determined that the best time to buy is five trading days before Christmas and then hold for six days. This trade was successful 10 out of the past 11 year years.
Next, Williams looked at a popular seasonal trade, Visa (V) - Get Report. He determined the best time to buy Visa is Christmas Eve and then hold it for 35 days. A similar pattern can be seen in with the retailers. The SPDR S&P Retail ETF displays a same strong seasonal pattern.
Not all stocks are bullish going into the holidays however. Williams discovered that stocks like UPS (UPS) - Get Report and FedEx (FDX) - Get Report both tend to peak just before the holidays and decline in January and February. He was also bearish on the airlines.
Executive Decision: Chevron
When asked how Chevron emerged as one of the preeminent oil producers, Wirth explained that most oil producers have been making changes in their strategies and priorities. Chevron has remained constant, he said, "Investors can count on us."
The world needs affordable energy, Wirth continued. Chevron has been around for 140 years, balancing the needs of economic prosperity and a clean environment. There is always common ground, he added.
When asked about the environment, Wirth explained that Chevron embraces a low-carbon future. The energy industry is always in transition, he said, from wood to coal to oil and gas, to nuclear and now to solar, wind, hydrogen and beyond.
Executive Decision: DexCom
For his second "Executive Decision" segment, Cramer also spoke with Kevin Sayer, chairman, president and CEO of DexCom (DXCM) - Get Report, the glucose monitoring company with hers that dipped 4.2% after the company's investor meeting.
Sayer said that DexCom is more bullish than ever about their business. What some analysts called a "guide down" Wednesday was merely a conservative approach to changing market dynamics and accelerants.
When asked about the criticism that DexCom is lowering prices, Sayer explained that they are continually adjusting their prices as they expand into new channels. While the pharmacy channel, for instance, may be a lower price channel, but eliminating the middle man, it's also a higher margin channel overall.
Sayer also responded to the six-month delay in testing their next generation monitoring system. He said that everything their G6 models do, the new G7 models do better. The new system is 60% smaller and includes a new app with better security. Testing is not without delays, Sayer concluded, but when G7 launches, it will completely change their business.
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.
In his "No Huddle Offense" segment, Cramer made a bold prediction. He said by the middle of the first quarter, he expects we will have a glut of COVID vaccines, all thanks to science.
It's hard to believe that it was less than a year ago when the pandemic first struck and we knew virtually nothing about the virus, including whether the virus could be stopped at all. But now, thanks to science, we have multiple vaccines nearing completion and will soon have millions of doses distributed worldwide.
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 no position in the stocks mentioned.