The hate for this market knows no bounds, Jim Cramer told his Mad Money viewers on Wednesday. This hatred is certainly justified, given the number of stocks that have suffered huge losses in recent months. But that doesn’t mean investors aren’t equally responsible for the carnage in their portfolios.
Many investors follow the strategy of buying what they know. They like a company, so they buy stock in that company. But Cramer noted that liking a company is just a starting point. Investors also need to look at the fundamentals. Are they making money? Do they have enough money to deal with rising interest rates and a possible recession? Do they have too much competition that will make a recession unbearable?
Big companies don’t always make big investments. That’s why stocks like AMC Entertainment (CMA) – Get the Class A report from AMC Entertainment Holdings, Inc. fell from $62 last fall to just $12 per share on Wednesday. This is why GoodRx (GDRX) – Get the Class A report from GoodRx Holdings, Inc. plunged from $47 to $7 and Teladoc Health (TDOC) – Get the report from Teladoc Health, Inc. went from $154 to just $32.
Stocks like Carvana (CVNA) – Get the Class A report from Carvana Co. made sense at $370 last August when the auto market was hot, but with rates rising and sales cooling, the current stock price of $26 is much more realistic.
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Now is not the time to abandon equities as an asset class. Cramer said investors just need to know better about what’s happening to companies at this point in the business cycle. EVgo (EVGO) – Get the Class A report from EVgo, Inc. and Roblox (RBLX) – Get Roblox Corp’s Class A Report. were excellent last year, but that doesn’t mean they will be excellent again this year.
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