Investors are always preparing for the big declines, but never the small ones, Jim Cramer told his Mad Money viewers Thursday. Some major political, military or terrorism events could indeed be damaging for the financial markets, he admitted, but what's happening right now is a healthy rotation into the sectors that have been left behind.
Cramer said the insurance checks are already beginning to arrive for victims of hurricane Harvey and Irma. That's giving a boost to the auto sector, with Magna International (MGA - Get Report) up 3.7% today. Cramer said he expects to hear good things from Carmax (KMX - Get Report) and AutoNation (AN - Get Report) when they report next. In addition to cars, the rebuilding effort will need lots of wood, and it just so happens that the rails transport both our nation's cars and building materials.
Healthcare is also making a comeback, Cramer said, with Johnson & Johnson (JNJ - Get Report) surging 1.3% today. With nearly 50% of Johnson's sales stemming from overseas, currencies are beginning to have a big impact, but so far, Wall Street hasn't noticed.
It doesn't take much to get a healthy rotation going, Cramer concluded, which is why investors need to observe and understand in order to make sense of the action.
Over on Real Money, Cramer explains his rules for spotting rotations. Get Cramer's insights with a free trial subscription to Real Money.
Analysts Don't Get Millennial Mindset
It's amazing how fast consumer behavior is changing these days, Cramer told viewers. Nowhere is that more evident than on Wall Street, where non-millennial analysts struggle to make sense of what's hot with younger generations.
Many analysts were not impressed by Apple's (AAPL - Get Report) new iPhone, but for many millennials, the phone is a must-have. Perhaps that's because younger consumers use and adapt to new technologies in ways that older folks don't. It's just a different mindset, Cramer explained.
Cramer said he takes many of his cues from his kids, who explain to him the importance of augmented reality and how to post selfies to Instagram. For this generation, Cramer said Apple products are a necessity, and experiences that can be documented, like cruises, are well worth the price.
Cramer and the AAP team say they are making a few ratings changes in their portfolio, including for Apache (APA - Get Report) and General Electric (GE - Get Report) . 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: Brunswick
For an "Executive Decision" segment, Cramer spoke with Mark Schwabero, chairman and CEO of Brunswick Corp. (BC - Get Report) , the makers of boats and exercise equipment that last posted strong results with a top and bottom line beat and strong guidance.
Schwabero said the value of boats is only increasing and customers are expecting more and more from their boats. Whether it's fishing with friends or spending time with the family, Schwabero said, boating is appealing to a broader audience every year, most of which are average, middle-class Americans.
When asked about the effects of the recent hurricanes, Schwabero said that parts and accessories, which represent 25% of Brunswick's boating business, will be the first segment to see the effects. Most replacements, he said, typically appear 12 to 18 months after the event, once families have had a chance to rebuild their homes and the rest of their lives.
Turning to Brunswick's fitness business, Schwabero explained that 90% of their business is commercial, with 60% of that number stemming from fitness clubs, and the remaining amount coming from verticals like hospitality, apartments and the military. Brunswick has made three acquisitions in fitness to become a leader in the space.
Best Buy A Buy
When a high-quality stock gets beaten down for the wrong reasons, investors should take notice. That's certainly the case with Best Buy (BBY - Get Report) , the retailer that was squarely in the sights of Amazon (AMZN - Get Report) , but has managed to grow its share price 400% over the past five years.
Shares of Best Buy plunged 12% after the company reported earnings two weeks ago, but Cramer said this move was a mistake, as Best Buy has done a remarkable job expanding its in-home service offerings for things like home theater setup, something Amazon simply cannot offer.
The company is also shareholder friendly, with regular dividend boosts and special dividends, and a $1 billion stock buyback program that was followed by another $1 billion buyback program.
Cramer said that Best Buy's six-cents-a-share earnings beat last quarter was impressive, even if management said it might not be able to maintain the 5.4% same-store sales growth it saw in the quarter.
With the continued strength of gaming hardware and the upcoming iPhone launch, Cramer said he'd be a buyer going into the company's analyst day next Tuesday.
Executive Decision: Brixmor Property Group
In his second "Executive Decision" segment, Cramer also sat down with Jim Taylor, president and CEO of Brixmor Property Group (BRX - Get Report) , the retail REIT with share down 28% over the past 12 months.
Taylor said that the narrative has been that traditional retail is directly opposed to online retail, but in reality, those retailers with an integrated strategy are thriving. In fact, retailers are learning that if you close stores, you also lose the internet customers around that closed location.
Taylor said he's not worried about Kroger (KR - Get Report) , one of his company's larger tenants. He said that the grocery business has always been competitive and Kroger is an excellent operator. What's important for Brixmor, he said, is to have the right properties in the right locations so Kroger can thrive.
When asked about the recent hurricanes, Taylor noted that while they had 130 centers in the path of Irma and another 30 around Houston, they came away with only minor damage in most locations.
In the Lightning Round, Cramer was bullish on Activision Blizzard (ATVI - Get Report) , Take-Two Interactive (TTWO - Get Report) , International Flavors and Fragrances (IFF - Get Report) , Schlumberger (SLB - Get Report) , Lockheed Martin (LMT - Get Report) and Raytheon (RTN - Get Report) .
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