Jim Cramer on Whether Investors Should Focus on ETF's or Individual Stocks

Publish date:
Video Duration:

Jim Cramer weighs in on what investors are wondering about the markets.

Today, during TheStreet Live With Jim Cramer and Katherine Ross, Cramer answered a Twitter question, which can be found below.

Want to get your question answered? Send in your questions to @TheStreet and @ByKatherineRoss

Video Transcript:

Katherine Ross:
And, Jim, I know that you need to get to your Action Alerts PLUS call, but I do have one final question for you. And it's based on Twitter because I've been getting a lot of questions about ETFs versus individual stocks. And this particular one is from [Oh Hush 00:12:56], who asks, "In this kind of market, what's your better game, ETFs or individual names, for a seasoned investor?"

Jim Cramer:
Well, I mean, I think that, first of all, because I am orthodox enough, I do want people to do S&P. I do S&P. The S&P 500 is terrific. It's actually an actively managed thing. When companies go bad, they get out, and when companies get a bid, they get out and replaced with a good company. So that's actively managed. I like it. But I do think that we have eyes; we have ears. We can hear; we can see. We know that people are working at home, so we can buy ZOOM. I mean, it's one that I've been wanting to do for Action Alerts. Clorox. I mean, I need wipes. I'm using these 70% wipes from Walgreen. I think that they're insufficient. I don't want to get sick. You know that you had big lines at Costco. Okay? You know that Costco's doing incredibly well. So what do you buy? A ETF that includes Costco? Well, that might include Kohl's. Might include Macy's.

Jim Cramer:
So you need... First, bedrock, is the S&P 500, and then on top of that eyes, ears, homework. If you don't have it, then you have to do all S&P. Or, of course, you can subscribe to Action Alerts, where we give you a recommended list that you can say, "Oh. You know what? I shop at CVS. It's packed." Or, "Wow. They have Starbucks, and it just announced a buyback." So, I mean, that's why we started the thing, is to show you how to think like a manager. And what's a shame is the industry has said over and over again that you can never think like a manager. Well, we'll show you how to think. And there's a lot of things. I mean, I would say that a crossword puzzle is harder than what we do.

Jim Cramer:
I mean, you want a degree of difficult? Maybe a really good cast when you're fishing is harder than what we do. Hitting a baseball. I'll tell you what's harder than what we do. Throwing a pitch 55 feet. I practiced forever when I threw the pitch out for the Phillies. That was much harder than picking a stock. Much harder. But you would think that one of these professionals would say, "You know what? Here's the degree of difficulty." They make it sound like it's some sort of triple whatever in gymnastics or the Greg Louganis dive. No! No. It is easier than taking the ball out of the end zone without a defense against you. It's easier than that. I am not minimizing it. That's hard for someone my age. So I just want people to understand. Dow down a thousand. People are looking for opportunity. S&P first.

Jim Cramer:
And now I'm going to go talk to my daughter, and she handles her own money, and I have no influence. But she's been asking me all morning, "Dad, you've told me wait, wait, wait, wait, wait. Well, when?" And I'm going to say, "No [inaudible 00:15:43], there's this thing called the S&P. It hasn't taken out the 20... I want it to take out 20..." But I'm saying that younger people... She wants to learn. She handles her own portfolio. I don't manage her. I don't know what she's doing, but like everybody else... They want to hear. And if they hear that panic isn't a strategy, then they can say, "All right. Well, look. All these stores are going out of business. Here's TJX. It's at 38. It's an incredible company. It's got all this cash. Maybe we can't shop right now because of the gathering rules. But here you go." I mean, it's at 38. It was at 64. I think that that's a mistake, that that stock's that low. But if you buy it at 38, you may have to buy it at 30. So leave some room.

Katherine Ross:
Thank you, Jim. And stay safe. Guys, every day Jim Cramer and I are working so hard to answer just some of the questions that you have about this ever-volatile market and this pandemic, so please keep sending in your questions via Twitter @TheStreet or @byKatherineRoss. I am reading. I am watching. And I'm ready to ask your questions. And also, Jim and Jeff Marks, who is our senior portfolio analyst with Action Alerts PLUS, are going to be hosting the Action Alerts PLUS monthly conference call live at 11:45. This is not going to be one that you're going to want to miss, for all the reasons that Jim's already laid out. I don't even need to sell you on that one. I'm Katherine Ross. Guys, please stay safe out there. And we will see you tomorrow.

Catch up on the Latest Videos on TheStreet!

Related Videos