Jim Cramer says that when it comes to investing, you simply cannot hang your hat on hope alone.
Hope is not an investing strategy, even when it’s all you have, Jim Cramer reminded his Mad Money viewers Tuesday, after the latest Consumer Price Index reading roiled the markets into another day of declines. Cramer said positivity and optimism are good things to have, but when it comes to investing, you simply cannot hang your hat on hope alone.
Today’s CPI number was up 8.5% year-over-year, signaling the worst inflation we’ve seen in 40 years. Not only that, Cramer found little hope for the future.
The price of the average used car has risen 40% over the past year. And while ultimately, rising prices will eventually lead to demand destruction, the underlying reason for elevated prices are a lack of new cars due to semiconductor shortages. Chipmakers are trying to correct the problem, but it still may be another six months before supplies can meet demand. That means there’s no hope in sight for autos.
Russia’s invasion of Ukraine has disrupted two other key sectors of our economy, food and energy. Ukraine accounts for 13% of global calories produced, and that production isn’t likely to get planted anytime soon. The world is also scrambling to stop buying Russian oil and gas, supplies that will take years to replace.
Lastly, there’s China, which is battling a wave of Covid by locking itself down rather than asking the U.S. for our highly effective vaccines.
All of these things aren’t likely to change in the short term, Cramer concluded, which is why he can’t be optimistic about the markets.
To sign up for TheStreet’s free Daily Booyah! newsletter with all of the latest articles and videos please click here.
