Jim Cramer's Thoughts on Investing in Companies With Cash to Spare

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Jim Cramer has some thoughts about whether or not investors should invest in companies that have cash to spare. 

Think companies such as Facebook  (FB) - Get Report, Apple  (AAPL) - Get Report, Alphabet  (GOOGL) - Get Report, etc. 

Watch the full video above for Cramer's thoughts. 

Video Transcript:

Katherine Ross:
What about the companies that are positioned well? What of the companies that you mentioned in your Real Money column with a lot of cash on hand, which is the FANG stocks? If I'm an investor, should I be padding my portfolio more with those kinds of stocks of companies that have cash to spare?

Jim Cramer:
I think absolutely. We have not sold any of those with cash to spare. You know why we haven't sold those with cash to spare? Because they're going to be not just winners, but they're going to be rulers. Now, the issue with FANG is the government, but Facebook can't buy anybody, Amazon can't buy anybody, Netflix maybe, but Alphabet can't buy anybody. Apple can't buy anybody without real scrutiny, interest scrutiny. So it's not worth wasting their time, Katherine. But boy, the balance sheets they have are so great that you start thinking, "Wow, maybe other companies can go under and they're going to own it." This is... The one that I pause it right now, Home Depot and Lowe's. If you own home Depot, which we did, and I feel somewhat bereft that we didn't stay long in this. It was such a good stock. Two, that I regret that we sold the Home Depot and Cisco, but we wanted to raise some capital for others, which was in many ways better.

Jim Cramer:
But Home Depot has a lot of True Values it competes against, still a lot of mom and pop [inaudible 00:05:02]. And they're not going to make it. You can say and Lowe's is going to make it too. So those two are going to have a duopoly on hardware, and who knows what they can charge. Now, I think they're both geared for giving the consumer the best value typically, and definitely the contractor. But Katherine, I mean, you have two stores dominate a hundred... I don't what the total just in markets, but that's going to be amazing and it's going to make it so you really want own those two stocks. You.

Katherine Ross:
You just said something that was really interesting to me. Backing up to tech once more, the FANG stocks can't... The FANG companies can't really buy any other companies right now because of the government as you said. But what if... What M&A activity at this time, when smaller companies could be laying off people, could be preparing for bankruptcy, would it help to allow the FANG companies to buy smaller companies?

Jim Cramer:
Well, I mean, I don't think these are bags. I think there's a lot of companies that don't need to be protected. I think that there are... By the way, I do think the airlines [inaudible 00:06:14] worry about this. I think the airlines... We don't want fewer airlines. We like the competition, but I just think that a lot of companies aren't needed. Katherine, a lot of companies came public in the last two years. You'll see the research. I get a run from Ben Stoto every morning, different research, he's hitting up research. And I cannot believe how many companies we created that we don't need. We don't need the 50th restaurant. We don't need the 40th retailer. We don't need the 30th mid-continent pipeline company. We don't need the 60th wheat.

Jim Cramer:
They all got jammed through. And I just cannot believe how much crap there is that they just went, they brought public during this year or when... I kind of didn't keep track of how many crummy companies they brought public, but those are the ones that are weak and those are the ones that have... They played a role in terms of being able to... for people to work, and it's one of the reasons why we had such low unemployment those days. But wow, I mean, there's a lot of companies that can go under, and they will not be missed.

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