Rational Fears: Cramer's 'Mad Money' Recap (Tuesday 9/8/20)

Pay attention to history and don't get greedy, says Jim Cramer. Smart, rational investors know how to read the signs and when to take their winnings.
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When we rebound from this selloff, it's time to take some profits, Jim Cramer told his Mad Money viewers Tuesday. Taking profits is not something you do because you're scared, Cramer added, it's something you do because it's rational.

No two selloffs are alike, Cramer said, but they do have similarities. One of those similarities is greed, he said. And with so many new, inexperienced investors flooding the market in recent months, greed was inevitable. New investors often only know big gains. They haven't been around long enough to have experienced big losses.

ETFs and commission-free trading, coupled with government stimulus checks, have made it easier than ever to get into investing, but there's never anyone to tell you to get out. Never anyone except for Cramer.

So before you turn paper gains into real losses, Cramer urged all investors to lock in their gains and, where possible, play with the house's money. The markets have gone up too far, too fast, he said, and when you see stocks failing to rally, even on great earnings, that's your warning sign.

History tells us that after a likely selloff Wednesday morning, there will be some buying. That's the signal for investors to not be greedy and take some of their winnings off the table.

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Executive Decision: Twitter

In his first "Executive Decision" segment, Cramer spoke with Ned Segal, CFO of Twitter  (TWTR) - Get Report, the social network that saw 34% growth in its daily active users this quarter. Shares of Twitter fell 4.1% along with the broader averages.

Segal explained that Twitter's mission is to serve the public conversation and more people than ever are discovering everything they can do with Twitter. He said Twitter has become the new stadium for sports, for example, when fans can't be at the game in person.

When asked whether the company would be interested in acquiring TikTok, Segal said while he can't comment on TikTok in particular, Twitter has made 12 small acquisitions over the past 18 months, but does have $7.8 billion in cash on their balance sheet for larger ones as well.

Turning to the topic of politics, Segal said it's important for voters to see all sides of the issues and be a part of the conversation. Twitter aims to provide a fair and harassment-free place for those conversations to occur.

Finally, Segal noted that Twitter is helping small businesses find their customers better. He said the platform has completely rebuilt its advertising service and has a larger audience for small businesses to tap into.

Executive Decision: CrowdStrike

For his second "Executive Decision" segment, Cramer welcomed back George Kurtz, co-founder and CEO of the cybersecurity company CrowdStrike  (CRWD) - Get Report, which last week reported an upside surprise that included 90% revenue growth.

Kurtz explained that security is a must-have for every company. As more companies embrace their digital transformation, security remains a crucial part of their focus.

Kurtz added that while many people think of security only for PCs and servers, CrowdStrike also offers cloud workload protection. He said many businesses depend on the cloud and protecting their processes that are running in the cloud are mission critical as well. That's why CrowdStrike has partnered with Amazon Web Services  (AMZN) - Get Report and more recently with Zoom Video to protect their cloud infrastructure.

When asked who's doing all of the hacking, Kurtz said all of the usual suspects remain at work, from nation states to online criminals to hacktivists trying to make a statement. He said online criminal activity has been on the rise.

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The Two Faces of COVID-19 Stocks

What should investors take away from the market's vicious decline? Cramer revisited his COVID-19 index of 100 stocks to see what's working and what's not. He said his index can basically be divided into two parts: the stay-at-home COVID stocks and the recession stocks. The difference in performance between the two has been striking.

The stay-at-home stocks have been soaring, Cramer said, with Fastly  (FSLY) - Get Report, the content delivery network topping the list, up 253%. Fastly is followed by Livongo Health  (LVGO) - Get Report, the digital health coach, connected fitness machines at Peloton  (PTON) - Get Report, payments processor Square  (SQ) - Get Report and of course, Zoom Video  (ZM) - Get Report.

The recession stocks have been essentially flat, however, with names like Gilead Sciences  (GILD) - Get Report, off 20%, followed by Centene  (CNC) - Get Report, Johnson & Johnson  (JNJ) - Get Report and Eli Lilly  (LLY) - Get Report all with sizable losses.

These moves make perfect sense, Cramer said. Over the past few months, our economy has made progress. Our historic rise in unemployment has declined and some parts of our economy are recovering. Spending a lot of time at home, however, appears to be here to stay.

Special Interview: R.I. Gov. Gina Raimondo

In a special interview, Cramer again spoke with Rhode Island Gov. Gina Raimondo, whose state has one of the few COVID-19 management success stories.

Raimondo spoke about Rhode Island's new "Back to Work" program to help put those who have lost their jobs back into the workforce. She said the program is not the typical "train and pray" program where the government hands out money and prays the person finds a job. This program was built in conjunction with businesses who have pledged jobs for those who complete the program.

Despite popular belief, there are tens of thousands of jobs in Rhode Island that companies are struggling to fill and which don't require a college degree. These jobs do require training and certifications, however, and that's what the Back to Work Rhode Island program provides.

Raimondo said they can't afford to wait for the federal government to step in and help, that's why governors have to tackle the problems in their states directly.

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:

Enviva Partners  (EVA) - Get Report: "I worry about that 8% yield but I'm all in favor of these environmental stocks."

eHealth  (EHTH) - Get Report: "Their CEO resigned and that's raising eyebrows."

1-800-Flowers  (FLWS) - Get Report: "It's not that expensive but I wish there was more to it."

Camping World  (CWH) - Get Report: "They are in the sweet spot. I'm a fan."

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