Stick with the best and forget the rest, Jim Cramer told his Mad Money viewers Wednesday. In today's economy, where so many sectors aren't working, it no longer makes sense to own an index fund that includes the good and the bad. We know which sectors aren't working, like oil and gas, travel and retail. And we which which stocks are working, which is why Cramer created a new "shelter-in-place" portfolio.
The first thing you need when you shelter in place is entertainment, Cramer told viewers, which is why stocks like Netflix (NFLX) - Get Netflix, Inc. Report, Roku (ROKU) - Get Roku, Inc. Class A Report, Activision Blizzard (ATVI) - Get Activision Blizzard, Inc. Report, and graphics chip makers like Nvidia (NVDA) - Get NVIDIA Corporation Report and Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report all work.
You, of course, need Amazon (AMZN) - Get Amazon.com, Inc. Report for shopping online, along with Walmart (WMT) - Get Walmart Inc. Report, Dollar General (DG) - Get Dollar General Corporation Report and Costco (COST) - Get Costco Wholesale Corporation Report when you have to go out. Food delivery is Domino's Pizza (DPZ) - Get Domino's Pizza, Inc. Report and Constellation Brands (STZ) - Get Constellation Brands, Inc. Class A Report has beer, wine and spirits.
Outside the home, Cramer suggested Johnson & Johnson (JNJ) - Get Johnson & Johnson Report and Procter & Gamble (PG) - Get Procter & Gamble Company Report for their dividends and Tesla (TSLA) - Get Tesla Inc Report for growth.
He liked Alibaba (BABA) - Get Alibaba Group Holding Ltd. Report now that China is coming back online and the cybersecurity trio of Okta (OKTA) - Get Okta, Inc. Class A Report, Zscaler (ZS) - Get Zscaler, Inc. Report and Crowdstrike (CRWD) - Get CrowdStrike Holdings, Inc. Class A Report to keep us all safe online.
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.
Executive Decision: Parsley Energy
For his "Executive Decision" segment, Cramer welcomed back Matt Gallagher, president and CEO of Parsley Energy (PE) - Get Parsley Energy, Inc. Class A Report, the oil producer calling for state-wide production cuts in the state of Texas to stave off a coming wave of bankruptcies that could cripple domestic oil production.
Gallagher explained that oil demand has plunged over 30 million barrels a day. That level of disruption calls for everyone to chip in and do their part to curb production. He reminded viewers that if Texas was a country, it would be the third largest oil producer in the world, which gives it a lot of say in how the industry responds to this crisis.
Not only is a healthy domestic oil industry vital to national security, but Gallagher noted that it supports over 350,000 service jobs in Texas alone and many more across the country. The best place to store oil is in the ground, he said, which is why cutting production now makes the most sense.
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.
Follow the Dividends
Are there any safe havens in a volatile environment? There are if you know where to look, Cramer told viewers. Dividend stocks have traditionally been the place to go, but the trick is to know which dividends are safe and which are at risk of being cut. Fortunately, several companies just raised their dividends, signaling confidence in their business despite the coronavirus.
Johnson & Johnson is one such company. This Action Alerts PLUS holding bumped its payout 6% this quarter, betting that the power of its brands will offset weakness in its medical device business which has stalled as elective surgeries have been canceled around the globe.
Another winner is Procter & Gamble, which also raised its payout 6% this quarter. Like J&J, Procter also has a stable of beloved brands that consumers are snapping up as the stock up for staying at home.
Cramer also recommended ProLogis (PLD) - Get Prologis, Inc. Report, the warehouse REIT that benefits from the boom in ecommerce. ProLogis recently appeared on Mad Money and boosted its dividend by 9%. Other dividend winners included American Tower (AMT) - Get American Tower Corporation Report, Dollar General and a perennial Cramer favorite, Costco, which also raised its dividend as a sign of confidence in their business going forward.
Executive Decision: Carvana
In his second "Executive Decision" segment, Cramer spoke with Ernie Garcia, chairman and CEO of Carvana (CVNA) - Get Carvana Co. Class A Report, the online auto retailer looking to disrupt the traditional dealership model.
Garcia said car sales have plunged between 50% and 85% since the coronavirus pandemic hit the country. The auto industry has been especially hard hit, he said, since visiting a dealership is how most people still buy their vehicles. But at Carvana, customers can buy online, set up financing and have their car delivered to them.
Garcia noted that Carvana's model was built around customer service, which is why they offer free delivery and allow customers to return vehicles if they're not the right fit.
Carvana is running several promotions to help customers, Garcia added. Right now, they offer no payments for up to 90 days.
This Virus Isn't Invincible
In his "No-Huddle Offense" segment, Cramer said this virus is not invincible. Eventually, we will beat it, he said, and as we do, our economy can begin to reopen.
Cramer advocated reopening the economy slowly, on a state-by-state basis. Some businesses, like doctors and dentists, should be allowed to reopen now, he said. Doctors and dentists already wear masks and know how to take precautions. Contractors are another group that wears masks and operate in small groups. They, too, should be allowed to operate.
If your state has the virus under control, you should be allowed to slowly reopen. Sadly, most states still have much work to do.
Cramer was encouraged by antibody testing from Abbott Labs (ABT) - Get Abbott Laboratories Report, and he said those tests, combined with corporate responsibility, should allow some other businesses, like Costco, to reopen. In the end, however, we need a vaccine and therapies.
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:
Taiwan Semiconductor (TSM) - Get Taiwan Semiconductor Manufacturing Co. Ltd. Report: "I think it's going to be OK but Nvidia and Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report are better."
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 NVDA, AMZN, COST, PEP, JNJ.
StreetLightning Videos With Jim Cramer:
- Walmart, Amazon and Costco Are Retail Winners
- Airbnb and the Future of IPOs After the Coronavirus Pandemic
- Jim Cramer Would Buy Tesla Now
- How to Pick Stocks in a Recession
- Don't Own Homebuilder Stocks During Coronavirus
- Zoom Will Recover From This Controversy