There's a lot more wrong with this market than investors can easily see, Jim Cramer told his Mad Money viewers Monday. That's why the era of index fund investing has ended and stock picking has become more crucial than ever.
Not all stocks can weather this pandemic, Cramer told viewers, so why would you have an index fund that owns the good along with all of the bad? When the facts change, you need to be willing to change your mind. When Cramer bought Tyson Foods (TSN) - Get Tyson Foods, Inc. Class A Report a few months ago for his charitable trust, Action Alerts PLUS, things were looking great for the food maker. But today, things have taken a radical turn for the worse.
We also saw an about-face this weekend from Warren Buffett, chairman and CEO of Berkshire Hathaway undefined undefined, who said he sold his entire position in the airlines. Buffett has also generally been bullish over the long-term, Cramer noted, but even the Oracle of Omaha felt the outlook for travel has become too murky.
Of the S&P 500 companies who have reported thus far this quarter, 114 have suspended their guidance, 79 have halted their buybacks and 31 have either cut or eliminated their dividend. Even Western Digital (WDC) - Get Western Digital Corporation Report, which reported a strong quarter last week, felt it necessary to eliminate their dividend. Not reduce it, Cramer noted, eliminate it.
For every Amazon (AMZN) - Get Amazon.com, Inc. Report and Zoom Video (ZM) - Get Zoom Video Communications, Inc. Class A Report in this economy there will be a Western Digital or a Tyson Foods, Cramer concluded. That's why the only stocks Cramer is recommending are part of his Mad Money COVID-19 Index, which he debuted last week.
Executive Decision: Salesforce.com
In his first "Executive Decision" segment, Cramer spoke with Marc Benioff, chairman and CEO of Salesforce.com (CRM) - Get salesforce.com, inc. Report, about some new tools his company is unveiling to help companies with their reopening efforts.
Benioff said that Work.com is a platform that provides companies with the tools they need and support they need for their reopening. It will help them plan things like personal protection equipment, shift scheduling and emergency response management and serve as a command center for all things related to COVID-19.
Benioff said Work.com is the tool Salesforce will be using as they reopen their global operations in the coming weeks and months.
When asked about what the economy will look like when companies begin to reopen, Benioff said that, hopefully, companies will be able to rehire quickly, but we must prepare for a recession and possibly even a depression if that doesn't happen. He said ideas like a conservation corps to plant a trillion trees could put people to work, as would aggressive retraining programs.
We need to be creative about putting people to work quickly, Benioff said, and many companies are stepping up to fill the leadership absent at the federal level.
Executive Decision: Emergent Biosolutions
For his second "Executive Decision" segment, Cramer also spoke with Robert Kramer, CEO of Emergent Biosolutions (EBS) - Get Emergent BioSolutions Inc. Report, one of many vaccine makers in the race to stop COVID-19.
Kramer said that Emergent has a long history of focusing on public health threats, whether they be vaccines for anthrax or smallpox, or treatments for the opioid crisis. COVID-19 is now their primary focus. He said Emergent is here to support any vaccine candidate with the goal of getting them through Phase I and II trials and into manufacturing so that hundreds of millions of doses can be released to the public.
Kramer was critical of the president's timeline and wording surrounding a vaccine. He said while everyone is hopeful to have viable candidates ready by the end of the year, no one can or should make those claims. There are things that can be done using emergency protocols that cannot be done during regular FDA approvals, Kramer noted, and those procedures can help to speed along the manufacturing process.
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.
What were the big takeaways from Warren Buffett's annual call with investors? Cramer outlined what he learned from Buffett's remarks.
First, Buffett noted that now's not the time to be ecstatic about the markets. While he commented that we will get through this period, he likened it to the Civil War. Second, Cramer said it was telling that Buffett did not buy anything during the March lows. Not a single stock. That's telling for someone who's typically bullish. We might be further away from the end than we think.
Third, Buffett admitted his mistake buying into the airlines. He did not take partial measures, Cramer said. When the facts changed, Buffett sold everything and cut his losses quickly.
Finally, Buffett said, as he always does, that it's never wise to bet against America. While all of his actions and inactions signal extreme caution, over the long-term we will get through this crisis.
Executive Decision: Alexandria Real Estate Equities
For his final "Executive Decision" segment, Cramer checked in Joel Marcus, CEO of Alexandria Real Estate Equities (ARE) - Get Alexandria Real Estate Equities, Inc. Report, the specialty REIT with a 2.8% yield.
Marcus explained that Alexandria specializes in campuses for lifescience companies like Moderna (MRNA) - Get Moderna, Inc. Report, which are on the front lines of testing and therapeutic development for COVID-19. He said their labs and facilities are operating in shifts 24/7 to help fight this pandemic.
When asked how their facilities are operating, Marcus explained that employees that can work from home are working from home, but most lab environments are already sterile, with employee distancing and protective equipment built-in. Fresh air and advanced air filtering are standard.
Marcus added that the company collected 98.4% of its rent for the month of April and it remains committed to raising its payout this year.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Monday evening:
American Express (AXP) - Get American Express Company Report: "I like Mastercard (MA) - Get Mastercard Incorporated Class A Report first, Visa (V) - Get Visa Inc. Class A Report second. American Express has too much travel."
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At the time of publication, Cramer's Action Alerts PLUS had a position in AMZN, TSN, CRM, MA.