Buying high and selling low is a time-honored way of losing money, Jim Cramer reminded his Mad Money viewers Wednesday. Too often, investors get shaken out of great stocks for all of the wrong reasons. That's because there's a big difference between trading and investing.
If you were looking to invest in some nice pants at your favorite retailer, you'd probably wait for them to go on sale. The bigger the sale, the happier you'd be and the more pairs you'd consider buying. But in the stock market, investors run from falling share prices, instead of buying more as they head lower.
Trading is a different story, Cramer explained. Trading is event-driven and investors must look for a catalyst, a reason to buy. When the catalyst happens, it's time to sell. If the catalyst doesn't happen, you must sell as well, because trades should never become investments. Trading takes discipline.
True investors can learn a lot from the action in Apple (AAPL - Get Report) this week. Traders bought into Apple ahead of this week's iPhone event and sold on the news, as they should. Investors however, should not have been shaken by the analyst community calling the event a dud, as they have since the beginning of time. They should have been buying more on the weakness.
Over on Real Money, Cramer says trading the newest iPhone launch was foolish, but you can begin to invest now, if you use discipline. Get Cramer's insights with a free trial subscription to Real Money.
It's Time to Make Up
Beauty may be in the eye of the beholder, but when it comes to beauty stocks, Cramer said some definitely look better than others. Everyone likes to look good, he reminded viewers, and with cameras getting better all the time, looking good is quickly becoming a necessity.
Cramer has been a long-time proponent of Ulta Beauty (ULTA - Get Report) , and said that this stock remains intriguing at its current levels. But then there are the cosmetic makers, Coty (COTY - Get Report) , Estee Lauder (EL - Get Report) and e.l.f. (ELF - Get Report) .
Cramer said that Coty is not looking so hot as of late, as the brands the company bought from Procter & Gamble (PG - Get Report) have been slowing its growth. Estee Lauder meanwhile, is a permanent resident on the new-high list, as it continues to deliver stunning 7.5% organic growth. Shares are not cheap at 25 times earnings, but Cramer said they're certainly worth it.
As for e.l.f., Cramer said that this small company is growing like a weed and was a favorite among investors until it delivered slightly lower-than-expected guidance last quarter. Cramer said he's willing to stick by the company however, as it certainly has the momentum to continue rising.
Cramer and the AAP team say the rise in crude prices has given their portfolio a nice lift. 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.
Where Is Retail Headed?
Retail is not going away, it's just moving to different places. That was Cramer's assessment of the revaluation that's been occurring with most retail stocks recently. Dollar Tree (DLTR - Get Report) was trading near $66 just two months ago, but is now at $84 as investors realize that value never goes out of style. The same shift applies to TJX Companies (TJX - Get Report) and even Gap Stores (GPS - Get Report) .
Cramer said he remains a fan of Kohls (KSS - Get Report) as a mall alternative, as well as Children's Place (PLCE - Get Report) , Ross Stores (ROST - Get Report) and Burlington Stores (BURL - Get Report) , all stocks that never should've been as cheap as they were just a few weeks ago.
Indeed, retail is not dead, Cramer concluded, it's just moving to different places, and investors are only now beginning to realize where those places are.
Executive Decision: XPO Logistics
Jacobs said that XPO has sent the past two years focused on integration and optimization, but now the company is well capitalized and ready to begin looking for more accretive mergers and acquisition deals. With $1 billion in liquidity, he said, XPO has the scale it needs for more transformative deals.
When asked about his business, Jacobs explained that the industrial economy in America is back and XPO is now No. 2 in less-than-truckload shipments and No. 1 in last-mile logistics. Much of that growth has come from a boom in ecommerce, where consumers are beginning to buy heavy goods, like appliances, furniture and exercise equipment, online.
Turning to the topic of driverless trucks, Jacobs said he absolutely sees the trend coming over the next 10 years and they welcome the efficiencies it'll bring to their business.
In the "Mad Tweets" segment, Cramer responded to questions sent via Twitter to @JimCramer. He said that his favorite among the big banks is Citigroup (C - Get Report) , a stock which he owns for his charitable trust, Action Alerts PLUS.
Cramer advised waiting at least one more quarter before buying Newell Brands (NWL - Get Report) , but he said he'd stay long Gilead Sciences (GILD - Get Report) . As for the airlines, he said, the worst may be over.
This article is being updated. Please refresh for the latest version.
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.