Keep your rally cap on your head, because there’s nothing else to hang it on, Jim Cramer told his Mad Money viewers Tuesday. After another disappointing day in the markets, Cramer said investors are desperate to find something to hang their hats on. The only problem? There’s nothing that’s working.
Much of the recent rally was fueled by FOMO, or “fear of missing out.” But as we approach mid-September, timing is everything, Cramer noted, and it may no longer be prudent to buy the dips.
Today was the unveiling of Apple’s AAPL newest iPhones, and typically, the stock would run up ahead of the news. That made the dip that followed the announcement a buying opportunity. But not this year, as the stock is still reeling from last week’s court ruling. Then there’s Wynn Resorts WYNN, which was supposed to be a reopening play in both Vegas and Macau. That was until COVID saw a resurgence and China cracked down on gambling. Even the drug stocks are under pressure as talk in Washington of price controls resurfaces.
When is the right time to buy? When is the bottom really the bottom? Cramer said when stocks get bad news and they don’t go down, that’s when you’ll know the pain is over.
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Executive Decision: Palo Alto Networks
In his first “Executive Decision” segment, Cramer spoke with Nikesh Arora, chairman and CEO of cybersecurity company Palo Alto Networks (PANW) – Get Palo Alto Networks, Inc. Report on the heels of their annual investor day. Shares of Palo Alto have risen 29% over the past month and are up nearly 100% over the past year.
Arora said that the acceleration of technology adoption continues to be a growth driver for Palo Alto and there’s no going back to the old ways of doing business. Palo Alto invested heavily into their platforms when Arora first joined the company, he said, and now they’re able to deploy great new products and technologies to their entire customer base.
One of those products is Okyo Garde, a new consumer-focused router with a number of uses. Arora explained that Okyo Garde is perfect for employees working from home, small businesses that don’t have IT support and even basic consumers that just want added protection in their homes.
Arora noted that 75% of consumers don’t even know their home router password, let alone check and manage their home network security. But everyone is now learning that there is an economic value to staying secure, no matter where you happen to be.
Off the Charts
In the “Off The Charts” segment, Cramer checked in with colleague and commodities expert Carley Garner for a read on the rising price of natural gas, an important raw material for many industries.
Looking at a weekly chart of natural gas futures overlaid with the commitment of traders, or COT, report, Garner noted a familiar pattern. She said that when large speculators get too negative, there’s often a short squeeze that sends prices higher. The same pattern can be seen in 2014, 2018 and 2019.
The rally in natural gas isn’t likely to be long lived however, as Cramer noted that the cure for high natural gas prices is high natural gas prices. That’s because as prices rise, additional supply follows, making it a self-correcting problem.
Cooling natural gas prices may not be great news for gas producers, but it would be a big win for consumers and the economy overall, as it would once gain prove the transient nature of the price inflation we’ve seen in so many commodities this year.
Executive Decision 2: Tellurian
For his second “Executive Decision” segment, Cramer spoke with Charif Souki, chairman and co-founder of Tellurian (TELL) – Get Tellurian Inc. Report, a liquified natural gas exportation company with shares that have soared 279% over the past year.
Souki started off by saying that 15% of the world uses 40% of the world’s energy. That means the rest of the world has a lot of catching up to do. The energy market is now global, he said, and the U.S. is now a full participant in that market when it comes to natural gas exportation.
There is still a huge potential for the U.S., which has the world’s largest natural gas reserves, to become an even bigger player in the market, Souki added. We only need the infrastructure to move natural gas from where it is produced to the coasts, where it can be exported. The U.S. wouldn’t even have to add many new drilling rigs, he said, we only need the pipelines to move what we already produce.
Here’s what Jim Cramer had to say about some of the stocks that callers offered up during the “Mad Money Lightning Round” Tuesday evening:
The Original BARK BARK: “Go with Zoetis (ZTS) – Get Zoetis, Inc. (ZTS) Report or Idexx Laboratories (IDXX) – Get IDEXX Laboratories, Inc. (IDXX) Report but not Bark.”
Lennar (LEN) – Get Lennar Corporation Class A Report: “This market is angry, so this stock needs to come down.”
Quotient Technology (QUOT) – Get Quotient Technology Incorporated Report: “No, no, that one is too risky.”
Alibaba (BABA) – Get Alibaba Group Holding Ltd. Sponsored ADR Report: “I’m done with Chinese stocks. You just can’t touch them.”
Fulcrum Therapeutics (FULC) – Get Fulcrum Therapeutics, Inc. Report: “This is another one that’s too risky right now.”
No Huddle Offense
In his “No Huddle Offense” segment, Cramer weighed in on the debate of which is better, owning gold or cryptocurrencies.
Cramer said in many ways, this question is not even a debate at all. Gold and cryptocurrencies aren’t in competition with each other, he said. Gold is an insurance policy against inflation. It has a long track record and supplies only increase 1% a year, keeping prices boring and stable.
Bitcoin, on the other hand, is a speculative investment, one that’s exciting and volatile, with absolutely no track record to speak of.
So which should you own? Cramer said both can play a part in your portfolio, gold for insurance and crypto for speculation.
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At the time of publication, Cramer’s Action Alerts PLUS had no position in the stocks mentioned.