When the market flies like it has, it's time to be selective, says Jim Cramer
Speakers
Jim Cramer
— Host, Mad Money
Summary
Jim Cramer explains how he would pick stocks in a market that has flown to highs, stressing selectivity and avoiding names that have already made big moves. He calls the recent purchase of an oil producer a mistake, warning that surging Venezuelan production could crush crude prices. He also says banks are cheap but bother him into earnings season, and he advises waiting for Jamie Dimon's cautious comments to hit JPMorgan before buying.
- Cramer says a market flying near highs demands selectivity, because starting to buy near the highs is often a license to lose money.
- He warns against chasing stocks already up 30-40% this year, citing Seagate and SanDisk, and says investors should wait for their pitch or simply pass.
- He says buying an oil producer near recent highs was a mistake; a dramatic Venezuelan production boost over 18 months would slaughter crude prices.
- Cramer says banks are chronically undervalued with tremendous franchises but he is bothered by the coming earnings season.
- JPMorgan reports in six days and trades at 16 times earnings, but Cramer is worried short-term about CEO Jamie Dimon's cautious commentary.
- He recalls JPMorgan falling from $370 to $290 after Dimon's 'cockroach' comments last quarter and expects media to take similar comments out of context.
- His plan: wait for the reaction to the earnings call and buy JPMorgan after Dimon 'lowers the boom,' not before.
Ideas
Venezuela supply boost will crush crude
Buying an oil producer near recent highs was a mistake: with the U.S. government now appearing to control Venezuela's petroleum, a dramatic rise in Venezuelan production over the next 18 months would slaughter the price of crude, making oil producers bought at these levels a losing position.
Venezuela supply boost will crush crude
Buying an oil producer near recent highs was a mistake: with the U.S. government now appearing to control Venezuela's petroleum, a dramatic rise in Venezuelan production over the next 18 months would slaughter the price of crude, making oil producers bought at these levels a losing position.
Banks cheap but earnings season worries
The bank group is starting to bother Cramer even though it is chronically undervalued with tremendous franchises, because banks are headed into earnings season, which creates near-term risk for the sector.
Wait, then buy JPMorgan after earnings
JPMorgan reports in six days and is way too cheap at 16 times earnings, but Cramer is worried short-term: CEO Jamie Dimon is a cautious straight shooter who, when things look good, tends to talk about what could go wrong, and the media will take any landmine or 'cockroach' comments out of context, just as last quarter's comments helped crush the stock from $370 to $290. The play is to wait for the negative reaction to the earnings call and buy after Dimon lowers the boom, not before.
