The history is very clear: At times like these, you need to stay the course, Jim Cramer told his Mad Money viewers Wednesday. As of Tuesday, the stock market had given back 50% of its gains since November. That’s an event that has only happened 21 times since 1929. And each of those events was the perfect time to buy.
It’s easy to be overwhelmed by the daily doom and gloom of everything that’s going wrong, Cramer admitted. It’s far harder to think of everything that could go right.
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What if… Putin simply can’t win in Ukraine and must accept a limited victory or no victory at all? As soon as the shooting stops, food and energy prices would collapse and stocks would soar.
What if… the economy responds to the Federal Reserve’s rate hike faster than expected? Supply chain problems would be solved and inflation would fall.
What if… the housing market suddenly slows due to rising rates and home prices? That too would hit the brakes on a large swath of the economy and usher in a recovery.
What if… the pandemic is really over? We can’t even imagine what things will look like as travel and restaurants and the world at large returns to normal.
Any one of these events could happen tomorrow and send stock prices higher. That’s why now isn’t the time to panic and isn’t the time to sell. Staying the course isn’t easy, but it’s far more profitable than giving up.
Executive Decision: F45 Training
In his first “Executive Decision” segment, Cramer spoke for the first time to Adam Gilchrist, co-founder and CEO of F45 Training (FXLV) – Get F45 Training Holdings, Inc. Report, the fitness chain that came public last year amid a slew of unprofitable SPACs and IPOs. Shares of F45 currently trade for 12 times earnings.
Gilchrist explained that F45 isn’t just another gym, it’s a community-based training program that is getting results for up to 350 people a day at each of their locations. F45 has a library of over 8,000 exercises available to members online, with a new, unique program every day.
F45 has predictable cash flows with very low churn, Gilchrist added, as the average member visits their locations three times a week.
Cramer said F45 may be the perfect reopening stock for your portfolio.
Never get so wrapped up in the present that you forget about the future, Cramer told viewers, as he recapped Nvidia (NVDA) – Get NVIDIA Corporation Report CEO Jensen Huang’s latest keynote presentation. Shares of Nvidia are off 40% from their November highs, but are up 850% over the past five years.
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Cramer praised Nvidia as a perpetual innovator, one which its competitors may never catch up to. The company’s CPUs and GPUs are powering the most advanced applications in the data center and its latest artificial intelligence and mapping systems are ushering in the autonomous driving revolution. Put simply, Nvidia’s chips are at the heart of every secular growth market in tech.
Nvidia isn’t going it alone, either. The company has partnered with the biggest companies in a range of industries, from Lucid Group (LCID) – Get Lucid Group, Inc. Report and retail, to healthcare, pharma and even Microsoft (MSFT) – Get Microsoft Corporation Report.
Nvidia now estimates it has a $1 trillion total addressable market, which is why Cramer continued to recommend the company as a long-term buy.
Executive Decision: Holley
For his second “Executive Decision” segment, Cramer also spoke with Tom Tomlinson, president and CEO of Holley (HLLY) , the aftermarket auto parts maker that’s another IPO outlier from last year. Shares of Holley trade for less than 16 times earnings.
Tomlinson explained that Holley is the company for people who love their cars and trucks and want to personalize them and modify them. The company has a long history of innovation and acquisitions that continually give customers new and exciting products, he said.
When asked about these acquisitions, Tomlinson said the company has a long history of successful mergers, thanks to a disciplined and methodical approach that never loses sight of customers.
Holley also has a robust direct-to-consumer approach that reaches directly to more than 15 million avid car consumers.
Tomlinson admitted that supply chain disruptions are an ongoing concern for the entire auto industry, but throughout the pandemic, Holley has been able to overcome them and continue its growth.
Cramer was bearish on 3D Systems (DDD) – Get 3D Systems Corporation Report, AT&T (T) – Get AT&T Inc. Report, Robinhood (HOOD) – Get Robinhood Markets, Inc. Class A Report, Scotts Miracle-Gro (SMG) – Get Scotts Miracle-Gro Company Class A Report and On Holding (ONON) .
Breaking the Cycle
In his “No Huddle Offense” segment, Cramer said we are at a key moment in our economic cycle, one where the Fed needs to break the cycle of inflation, and fast.
Jay Powell’s original plan for the pandemic worked, Cramer explained, perhaps a little too well. Our economy has remained strong throughout most of the pandemic and there are more jobs than we have people to fill them.
But as new variants wreaked havoc on manufacturing around the globe, supply chains continued breaking down, leading to a vicious cycle of inflation that quickly spiraled out of control. That’s why the Fed needs to act quickly and decisively to break the inflation cycle, before it undoes all of the gains we’ve made over the past two years.
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