Trump or no Trump, this rally to Dow 20,000 is for real, Jim Cramer proclaimed to his Mad Money viewers Wednesday. How can Cramer be so sure? Simple. He's done the homework.
Cramer said he doesn't do top-down analysis. Instead, he looks at what the fundamentals of individual companies tell him. It's a lot of work, he admitted, but it's the only way to know for certain what stocks are actually worth.
Fifteen of the 30 stocks in the Dow Jones Industrial Average have already reported this quarter, and Cramer gave his opinions on every one of them.
Cramer was also bullish on DuPont (DD) - Get Report , which posted an amazing number, along with Goldman Sachs (GS) - Get Report , IBM (IBM) - Get Report , Johnson & Johnson (JNJ) - Get Report and JPMorgan Chase (JPM) - Get Report .
Cramer said he liked the same-store sales numbers for McDonalds (MCD) - Get Report and he likes what 3M (MMM) - Get Report had to say on its conference call. He loved the restructuring at Procter & Gamble (PG) - Get Report and felt Travelers (TRV) - Get Report could see $123 a share.
There were only two losers in Cramer's list, General Electric (GE) - Get Report and Verizon (VZ) - Get Report . But with 13 winners and only two losers so far, Cramer said that's a recipe for a Dow that rises well past 20,000.
Ask Jim: Now What?
After a historic day on Wall Street, with the Dow reaching 20,000, Cramer took questions from viewers to hear what's on their minds.
The first viewer wanted to know how a strong U.S. dollar would affect multinational companies. Cramer said that after listening to Johnson & Johnson and IBM this quarter, it sounds like these companies have figured out how to manage currency pressures.
The next viewer was curious as to why Cramer thinks Trump will spur increases in interest rates. Cramer explained that economic activity drives the price of money, so if Trump spurs growth, then we should all expect the Federal Reserve to raise rates three times in 2017.
Finally, Cramer agreed with a viewer that even though the U.S. doesn't produce enough steel for all of Trump's pipelines, bridges and other economic plans, we still need to get tough on Chinese imports.
Don't Ignore The Mouse
Ever since its peak in 2015, the stock of Walt Disney (DIS) - Get Report has been one of the most controversial around, with investors fretting over whether cord-cutting millennials are tuning out of ESPN.
That's why when you see two analysts both upgrade and downgrade the stock at the same time, it's time to jump in and debate both sides of the story.
According to bulls, shares of Disney could see $134 a share based on 2018 estimates for 14% earnings growth. They felt the ESPN worries were already baked into the share price, but the company's 2018 film schedule, which includes two "Star Wars" and one "Avengers" movie, will be spectacular. Then there are Donald Trump's proposed tax cuts, which could bolster earnings even further.
The bear case says it's too early to bet on a 2018 move higher, as Disney's CEO, Bob Iger, will be stepping down and no successor has yet to be named.
Cramer said he agrees that the loss of Iger is worrisome, but he sides with the bulls that shares of Disney, trading at just 16 times earnings, are too cheap to ignore.
For his "Executive Decision" segment, Cramer once again spoke with David Demshur, chairman, president and CEO of Core Labs (CLB) - Get Report , the oil services company that just posted a solid penny-a-share earnings beat.
Demshur said the latest estimates call for oil demand to increase by 1.4 million barrels a day in 2017, which would be a slight increase from growth in 2016. He said he's optimistic about the recent OPEC production cuts aimed at bolstering oil prices by keeping supply tight.
That tightness could be affected by U.S. production however, which had ramped up from 5.7 million barrels a day to 9.7 million barrels before prices began to decline.
Demshur was bullish on the U.S. oil outlook, saying that with new technologies, Core Labs is working to increase oil shale recovery rates from 9% to as high as 15%, which would make a huge impact on the bottom lines of oil drillers. He was also bullish on the new administration, saying that drilling activity, especially offshore, should increase under Trump.
The Lightning Round
In his "No-Huddle Offense" segment, Cramer it's time to climb aboard and enjoy the wild ride of Micron Technology (MU) - Get Report , Seagate (STX) - Get Report and Western Digital (WDC) - Get Report , as these three tech stocks could have multiyear runs ahead of them.
These stocks have long been known for their boom-and-bust nature, making them only for the hardiest of investors. But Cramer noted that with Micron diversifying away from DRAM chips and Western Digital buying Sandisk, these companies have gotten a lot easier to own.
All three are in the sweet spot, Cramer concluded, and he'd be a buyer.
Cramer is updating his investment club members about five core stocks: Cisco (CSCO) - Get Report , Apple (AAPL) - Get Report , General Electric, Magellan Midstream (MMP) - Get Report and Dow Chemical (DOW) - Get Report . Don't you want to know what they're saying? Get a free subscription to Action Alerts PLUS.
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At the time of publication, Cramer's Action Alerts PLUS had positions in CSCO, AAPL, GE, MMP and DOW.