Forget about using the futures market as a weathervane, Jim Cramer told his Mad Money viewers Monday. Use it instead as a buying opportunity.
On Monday, in the early pre-market, the futures signaled a weak opening for stocks. But Cramer noted that these futures are thinly traded and are often dead wrong, as they were today.
That doesn’t mean the futures are worthless, however. When used opportunistically, Cramer said, they can create great bargains.
It all starts with your world view. Cramer explained that his world view for the next six months is positive. We have mostly transitory inflation, gridlock in Congress and great earnings. There’s also a ton of new money coming into the market, which doesn’t signal a top, it signals that stocks are still the only game in town with bond yields so low.
So when the futures send shares of Walt Disney (DIS) – Get Report lower, that’s the time to pounce. Shares of Disney closed up 4% by the close thanks to a strong opening weekend for the movie Black Widow.
The futures markets also created an opportunity to trade both Goldman Sachs (GS) – Get Report and JPMorgan Chase (JPM) – Get Report, Cramer added. Both stocks were sharply lower at the open, only to rebound hard by the close.
As long as you’re opportunistic, and don’t buy all at once, Cramer said the futures are a great way to snap up bargains. Just never use them as a gauge of where the markets are headed next. Use your intuition and your world view for that.
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Cramer’s Agenda for the SEC
Now that Securities and Exchange Commission Chairman Gary Gensler has had a few months to settle into his new post, Cramer said it’s time for the regulatory agency to get to work, and boy, do they have a lot on their plates.
Topping Cramer’s wish list of priorities the SEC must address as soon as possible is cracking down on Chinese IPOs. Chinese companies simply don’t need to abide by U.S. accounting rules and most companies are far inferior to their U.S. counterparts. Cramer said he’d ban all Chinese IPOs that fail to comply with our rules.
Over on Real Money, Cramer says he doesn’t know why the U.S. government doesn’t demand the same level of disclosure for Chinese IPOS that it insists U.S. companies give. Why should we let the Chinese off the hook? Read more of his investing insights in The Didi Fiasco Makes Clear Not to Invest in Chinese IPOs.
Second, Cramer said the SEC needs to take ownership over cryptocurrencies and ensure transparency and a level playing field for all investors. Next, he would crack down on digital pump-and-dump schemes that recently took up shares of Wendy’s (WEN) – Get Report and NewEgg (NEGG) – Get Report, only to see shares crash back down after the pumpers exited with their winnings.
Cramer said the SEC must also tackle institutional manipulation. Hedge funds are being allowed to borrow far too much money with excess leverage and every time a firm goes belly-up, we all pay the price.
Rounding out Cramer ‘s list of priorities were crackdowns on SPACs, many of which have no real business, only hopes and dreams. He’d also clamp down on robotic trading that shuts out individual investors who can’t access the markets in milliseconds.
Finally, he’d add new rules for members of Congress, who are profiting while serving thanks to blind trusts and shell corporations.
Best Ways to Invest in Solar
With environmental social governance activists putting pressure on companies to address climate change, and our failing electric grid creating more and more prolonged power outages, the demand for solar energy is only getting bigger. Cramer offered up his list of the best ways to invest in the sector.
First on Cramer’s list was First Solar (FSLR) – Get Report, which has avoided tariffs by making it’s proprietary panels right here in the U.S. With the company’s 2021 production sold out, along with most of its 2022 production as well, Cramer said First Solar is a buy, even trading at 21 times earnings.
Next up was Enphase (ENPH) – Get Report, the leader in micro-inverters that make solar panels more efficient when converting DC power into AC current for your home.
Third was generator maker Generac Holdings (GNRC) – Get Report, which in addition to gas-powered generators, also makes solar and battery backup solutions to help homes and businesses weather storms and prolonged outages.
Finally, Cramer endorsed Tesla (TSLA) – Get Report, which is leading in solar, just as it did with electric vehicles.
On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.
Executive Decision: MongoDB
In his “Executive Decision” segment, Cramer spoke with David Ittycheria, president and CEO of MongoDB (MDB) – Get Report, the database provider with shares up 173% in 2020.
Ittycheria said it’s been five years since MongoDB unveiled Atlas, its cloud database platform. Today, Atlas is the majority of its business, growing at 73% year-over-year.
MongoDB software has been downloaded over 180 million times, Ittycheria added, which is an impressive feat given there are only 25 million developers worldwide. People choose MongoDB for its flexibility, scalability and performance, he said.
When asked about profitability, Ittycheria said it would be silly for MongoDB to optimize on profits given the opportunity still in front of the company. They will continue to focus on expanding reach and building market share for the foreseeable future.
Shares of MongoDB trade for 30 times earnings, while rivals like Snowflake (SNOW) – Get Report trade for over 70 times earnings.
The Impact of Irrational Behavior
In his “No Huddle Offense” segment, Cramer reminded viewers that sometimes people don’t behave rationally. Case in point: vaccines. No one wants to get COVID, so it seems rational to think that everyone would want to get the COVID vaccine. Yet our country is still only 50% vaccinated thanks to skepticism and conspiracy theories.
Irrational behavior is hard to model, Cramer concluded. We simply can’t know when things will return to normal, or when people will go back to work, or if those who don’t go back will lose their jobs. That’s why this quarter’s earnings season is so important. It’s when companies will provide us with more clarity on what the second half of this year might look like.
Here’s what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Monday evening:
FireEye (FEYE) – Get Report: “Right now you want CrowdStrike (CRWD) – Get Report, Zscaler (ZS) – Get Report and Palo Alto Networks (PANW) – Get Report.”
OncoCyte (OCX) – Get Report: “I like diagnostics. I’ll bless this one for speculation.”
DermTech (DMTK) – Get Report: “Anything that can detect skin cancer early is a buy.”
3D Systems (DDD) – Get Report: “No, no, I’d go with UnitedHealth Group (UNH) – Get Report.”
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At the time of publication, Cramer’s Action Alerts PLUS had a position in the stocks mentioned.