Investors who want to record the sale of the market have much more to expect, Jim Cramer told his Mad Money audience on Thursday. Cramer reminded viewers that there are five stages of pain, even in the financial markets, but most investors are still stuck in denial.
We all know the five stages of pain. It starts with denial, then anger, then moves on to negotiation, depression, and finally ends with acceptance. The market’s recent fear of inflation and rising bond prices is something we’ve seen before, which is why Cramer has warned that we’re not even close to the bottom.
“We need to see a lot more anger, more negotiations to reach acceptance,” Cramer said. This process takes days and weeks and is painful. That’s why Cramer said the only prudent move at the moment is to raise cash and sell by force and not get “bought by leaps and bounds.”
There is only one short order at the bottom, Cramer added, and it is the one we saw in February 2016, when investors gave up en masse and the shares suffered a massive sale of “crescendo” over a period of time. two days.
It remains to be seen whether we will see a similar pattern this time.
Cramer and the AAP team look at everything from earnings and rates to the Federal Reserve. Find out what they tell their investment club members and join the conversation with a free trial subscription to Action Alerts Plus.
Executive decision: Splunk
In his first “Executive Decision” segment, Cramer spoke with Doug Merritt, President and CEO of Splunk. (SPLK) – Get the report, the data analysis company, which saw its shares fall by 2.6% on Thursday, after reporting a strong quarter on Wednesday.
Merritt explained that as Splunk moves from local software to subscription, they are the story of two companies. As for the cloud, revenues increased by 83% in that quarter and there are no signs of slowing down. However, in terms of premises, they saw some delayed acquisitions, while companies were considering whether it was the right time to move to the cloud. Splunk has taken steps to assist customers who are in these situations.
Merritt added that for customers like Shopify (STORE) – Get the report, Splunk proves to be an invaluable tool. Shopify is constantly updating its platform and adding thousands of new customers, he said. And with all these changes comes terabytes of data that need to be analyzed for values and information to keep their e-commerce platform at peak performance.
Cramer said Splunk is the perfect stock to put on your shopping list by the time the sale is completed.
Executive decision: FireEye
For the second segment of “Executive Decision,” Cramer also spoke with Kevin Mandia, CEO of FireEye (SHEET) – Get the report.
Mandia said he had been in the industry for 20 years and the attacks continued. Right now, FireEye is still working on cleaning up the remnants of the massive Solar Winds cyber attack, and just this week we learned of four new zero-day vulnerabilities on Microsoft (MSFT) – Get the report Exchange email servers. Zero-day operations are those that currently have no corrections or corrections available.
Mandia hurried not to blame. however, stating that software development is much more complex than most people realize, and companies are well-intentioned and do their best.
When asked how FireEye is able to detect intrusions and attacks, Mandia explained that their entire organization is built for large and small investigations. As soon as an anomaly is detected, they begin to act and deconstruct entire systems until they discover exactly what happened and why.
On Real money, Cramer participates in the companies and executives he knows best. Get more out of his prospects with a free trial subscription for real money.
Stock oversupply
The market is already difficult and is about to get worse, viewers warned. As we saw at the end of 2016 and the beginning of 2016, an excessive supply of new shares is about to overwhelm demand.
There are three things that keep Cramer up at night. First, the flood of new IPOs continues. Today I saw shares of Oscar Health (OSCR) – Get the report decreases 7.8%, totaling over 11% losses from the IPO. Investors are clearly losing interest in these transactions, Cramer said, and there are several on the way, including e-commerce in South Korea and several cryptocurrency players.
The second disturbing trend is the ongoing SPAC attacks. There are simply too many of these offers, Cramer remarked, and they are just getting more stupid and desperate. Investors have already begun to guard after being burned.
In the end, the worst offender will be the expiration of the blockade for the IPOs we have already seen. Stocks like snowflake (THE SNOW) – Get the report and GoodRx (GDRX) – Get the report it will soon flood the market with additional shares and there is simply no room for an already weakened market.
The stock market is after all a market, Cramer concluded. Too much supply can easily overwhelm the little demand that remains.
Relative investments
In his Off-No Huddle Offense segment, Cramer reminded investors that anything that rises as if it doesn’t have a ceiling can also fall as if it doesn’t have a floor. And the fall happens much faster.
It’s a dangerous game when actions become free of reality, Cramer explained. Just look at the stocks on social media. When Pinterest (PINS) – Get the report recorded better-than-expected growth last year, shares rose, valuing the company 100 times earnings. But if Pinterest is worth $ 50 billion, then what is Snap (SNAP) – Get the report is it worth it with a growth rate twice as high? And if Snap deserves Pinterest twice, then clearly Twitter (TWTR) – Get the report it’s even more.
All of these thoughts are great, Cramer said, until we have fears about inflation and the value of these future revenues is suddenly worth less. That is why we see stocks on social media falling, because their valuations have never been linked to anything concrete in the first place.
Lightning round
Here’s what Jim Cramer had to say about some of the actions offered by callers during the “Lightning Round of Crazy Money” on Thursday night:
Equinix (EQIX) – Get the report: “People don’t want to hold REIT when interest rates go up. I can’t recommend it.”
Walgreens Boots Alliance (WBA) – Get the report: “The model has also changed Amazon (AMZN) – Get the report it’s the way most people want to shop. “
The-SCI (MCC) – Get the report: “I think this is good.”
Search Jim Cramer’s “Crazy Money” trading recommendations using our exclusivity Mad Money Stock Analyzer.
To watch plays of Cramer’s video segments, go to Mad Money Page on CNBC.
To sign up for Jim Cramer’s free Booyah! newsletter with all its latest articles and videos please click here.
At the time of publication, Cramer’s Action Alerts PLUS had a position in AMZN.