With some parts of the stock market down sharply, Jim Cramer says investors need to take advantage of the declines and find something to buy.
If the market opens down Tuesday, look for something to buy, Jim Cramer told his Mad Money viewers Monday. But if the market rallies at the open, take a pass.
It’s a tumultuous time for stocks, as investors readjust their portfolios for a rising interest rate environment. But with some parts of the market down huge, Cramer said investors need to take advantage of the declines and find something to buy.
Stocks like Adobe Systems (ADBE) – Get Adobe Inc. Report were panned in mid-December when it reported earnings, but after falling almost $200 a share, Adobe is now too cheap to ignore. That’s why shares were able to rally 2.9% Monday. “Price matters,” Cramer reminded viewers, and Adobe at $700 a share is very different than Adobe at just $500 a share.
Real Money contributor Paul Price writes, ‘We’re in a murky market environment right now. Many big-cap stocks appear grossly overpriced. … At the same time, I’m finding tremendous bargains on healthy, highly profitable companies.’ Get more of his investing insights on Real Money about the stocks he says are selling ‘for extremely low absolutes, and relative to history, price-to-earnings ratios. Some are paying generous dividends.’
When stocks are falling, they not only get cheaper for investors, they also get cheaper for other companies to acquire them. That’s why game-maker Zynga (ZNGA) – Get Zynga Inc. Class A Report soared 40% on news it would be acquired by rival Take-Two Interactive (TTWO) – Get Take-Two Interactive Software, Inc. Report.
There are still some areas of concern however. Cramer told viewers to avoid industrial stocks that have not yet come down from sky-high levels. The bank stocks are also coming into earnings season too hot for his liking. Then there are the fintech stocks, which seemingly have no bottom, as they continue to decline almost daily.
Get more trading strategies and investing insights from the contributors on Real Money.
Other than these few sectors however, Cramer urged viewers to take advantage of the weakness and at least buy one stock if the market continues its decline Tuesday.
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