While the much-respected Jim Cramer is looked up to by many when it comes to making savvy stock market picks, sometimes he makes mistakes – it’s only human, after all.
Cramer took to X, the site formerly known as Twitter, to share about one of the calls he made over the last few months that he feels terrible about. That call was about legacy beauty company Estee Lauder EL, which plunged to a six-year low Nov. 1 after reporting a surprise fiscal first quarter profit but a painfully dim second quarter outlook that was far below expectations.
Related: Jim Cramer explains why retail stocks are suffering with one chart
“When you fall on your sword publicly it is humbling and humiliating,” the CNBC pundit wrote in a Tweet on the morning on Nov. 1. “I believed in the ceo, i believed the turn could happen in time to save $EL shareholders but, fortunately i did not tell people to buy it. But it is undeniably painful nonetheless”
When you fall on your sword publicly it is humbling and humiliating. I believed in the ceo, i believed the turn could happen in time to save $EL shareholders but, fortunately i did not tell people to buy it. But it is undeniably painful nonetheless
— Jim Cramer (@jimcramer) November 1, 2023
A few months earlier in September, Cramer spoke about the stock on CNBC during his “Stop Trading” segment, warning investors to be careful and saying the quarter “will be bad.”
Estee Lauder has been on a steady drop since February, forcing it to cut its 2024 forecast. One of the reasons is China’s prestige beauty market, which has fallen far below market expectations in the second half of 2023. One-third of Estee Lauder’s business is from China.
More Investing:
Why the recession never really hit — and what indicates that it still couldJim Cramer and Dan Ives say a powerful technology will give the markets a boostHere’s what companies Nvidia is joining in the $1 Trillion market cap club
Another contributing factor may be the crackdown on “daigou,” grey market resellers who buy items and resell them to Chinese buyers. Hainan, China’s main duty-free spending center, has been coming down hard on daigou since April, leading to a 34% drop year over year in July 2023.
Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
