The stock market isn't perfect and it doesn't always make sense, Jim Cramer admitted to his Mad Money viewers Monday, but if you fight the long-term upward trend of progress, you're a fool.
Cramer said the fact is, things are a lot better now than they used to be, with hundreds of great companies producing great returns or their shareholders.
Even in the depths of the Great Recession, stocks survived, and powered on to achieve great heights. So while the markets today may be dealing with tariffs and Brexit, Cramer said, let's not forget that the U.S. is awash in oil and natural gas, which provide our country with some of the cheapest power in the world.
Companies also continue to have access to deep capital markets and and stocks are still the only game in town, with no competition from bonds.
Cramer highlighted Apple (AAPL - Get Report) , an Action Alerts PLUS holding, as just one example of what fighting the markets could mean for your portfolio. In August 2011, when Tim Cook took over as CEO, Apple traded for $53 a share. Today, shares trade for $227 and offer a dividend, as the company continues to innovate with new products and services no one can live without.
Apple is just one of hundreds of great individual stories, Cramer concluded, and that's why he's always bullish about individual stocks.
Cramer and the AAP team say trade headlines will be driving the markets this week. 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.
Look Closely at Costco
The next time you see a high-quality company report a seemingly disappointing quarter, don't rush to judgment, Cramer told viewers. Instead, wait to hear the company's conference call and get the full story. Investors didn't heed this advice when Costco (COST - Get Report) recently reported. Shares instantly dipped 5% at the open, only to quickly rebound more than $10 a share once investors discovered that Costco's earnings weren't disappointing at all.
The bears assumed that Costco, which had been up 42% for the year, trading at 35 times earnings, was due for a pullback and were looking for any reason to sell. So when revenue and earnings came in roughly as expected, they headed for the exits. But Cramer noted that Costco is more than just a retailer, it's also a club, one with 98.5 million cardholders that renew at a rate of 90.9%.
There was a lot to like in Costco's earnings, Cramer explained, including 200,000 new members at the company's Shanghai store in just a matter of weeks. Additionally, the company is not largely affected by tariffs, as it has the flexibility to simply substitute one item thanks to its limited selection when compared to other retailers.
Costco also has a long history of great execution, Cramer noted, one that doesn't simply add new stores to please Wall Street. Costco takes a long-term approach to running their business and that makes betting against them a big mistake.
On Real Money, Cramer explains why Costco can trade on value and trust. Get more of Cramer's insights with a free trial subscription to Real Money.
A Wild Ride
There's a lot of action happening in the amusement park stocks, but Cramer told viewers he's sticking with his previous recommendation to own shares of Cedar Fair (FUN - Get Report) , even after the failed takeover offer from rival Six Flags (SIX - Get Report) .
When he last looked at the sector, Cramer declared Cedar Fair the superior operator, and since then shares have continued to march steadily higher. The company recently reported over 1.1 million visits to its parks so far this year, with visits up a solid 6%. When Six Flags last reported however, results were mixed.
But with the privately held Great Wolf attracting investor interest, Cramer said he wasn't surprised that Six Flags made a bid for Cedar Fair. The only problem, the reported $70 a share isn't enough of a premium. Cramer estimated Six Flags would have to pony up $85 a share for Cedar Fair, something the already debt-laden Six Flags is unlikely to do.
There was one silver lining to the takeover bid however, and that was Six Flags confirming what we already knew. Cedar Fair is an attractive asset that trades at just 16 times earnings with an even more attractive 6.4% yield.
Executive Decision: RingCentral
For his "Executive Decision" segment, Cramer spoke with Vlad Shmunis, chairman and CEO of RingCentral (RNG - Get Report) , the cloud-based phone provider that recently announced a lucrative partnership with Avaya (AVYA - Get Report) that sent shares soaring 30%.
Shmunis explained that Avaya is the leading traditional telco provider in the business space with over 100 million users in 180 countries around the world. Avaya also has an extensive partner international network. The deal that was announced makes RingCentral the preferred cloud provider for all of these customers.
When asked what those customers will get with RingCentral, Shmunis said that companies will receive a flexible, unified cloud communication platform that not only includes voice, but all communication needs including video, voicemail and messaging.
Even with shares up 105% for the year, Cramer said RingCentral is a buy.
China and Change
In his "No-Huddle Offense" segment, Cramer said he'd like to be optimistic about reaching a trade deal with China, but with the White House's seven "non-negotiables" that deal may be less likely than you think.
Donald Trump wants China to stop stealing out intellectual property, end forced technology transfers and stop the relentless Chinese hacking. He's also looking for the end of business exploitation, a stoppage to subsidizing state-owned industries, an end to currency manipulation and lastly, a crackdown on Fentanyl entering our country.
China's only agreed to the latter thus far, but even with that promise, we've seen no tangible results. That's why Cramer said while he can be hopeful, he's certainly not optimistic.
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