September is the cruelest month of the year for investors, Jim Cramer reminded his Mad Money viewers Monday. That’s why the prudent thing to do is get ahead of the masses and raise cash now.
Last week, Cramer checked in with colleague Larry Williams, who noted that September 17th is historically the high point of the month, with market-wide declines likely thereafter. In the meantime, we’re likely to see a rotating cast of market leaders, few with any staying power.
Today, we saw gains in the oil patch, with stocks like Occidental Petroleum (OXY) – Get Occidental Petroleum Corporation Report up 6.6% and Devon Energy (DVN) – Get Devon Energy Corporation Report gaining 3%. But Cramer noted that once oil prices get too high, producers turn on the spigot to bring prices back down. Adding to the confusion are shutdowns from hurricane Ida, once again weighing on oil, chemicals and manufacturing.
Among the few bright spots, according to Cramer, was Wells Fargo (WFC) – Get Wells Fargo & Company Report, which ended the day up 3.2% despite being fined an additional $250 million for its past indiscretions. Cramer said the fine, while huge, was less than many investors had feared.
We’re like to see more rolling corrections like we saw today, Cramer concluded, which is why investors need to use any strength to raise cash and buy some gold ahead of September 17th.
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Bristow said the business at Barrick “couldn’t be better” as the company continues investing in their future while also delivering stable cash returns for their shareholders.
Mining is, after all, a consumptive industry, Bristow noted. For every ounce of gold you take out of the ground, you must replace it additional reserves. That’s why Barrick has a long history of providing sustainable, profitable growth.
Even in Nevada, a state long thought to largely be out of gold, Barrick has discovered new opportunities Bristow described as “huge.” The rewards in Nevada will be fantastic, he said.
Finally, when asked whether he’d rather invest in gold or bitcoin, Bristow said that gold remains the only way to truly hedge your risks. Bitcoin goes down in value just as often as it rises, he said, leaving gold as the only stable reserve of wealth.
When it comes to investing in newly-minted IPOs, steer clear of opaque companies with sky-high valuations, Cramer told viewers. With the IPO market back in full swing, it pays to do your homework. That’s why he took a second look at three recent travel IPOs.
First was Clear Secure (YOU) , the biometrics company that’s signed up over seven million members for air travel, sports venues, offices and other secure locations. Cramer said this company may have great technology, but it doesn’t offer investors much clarity into its growth. The company only has an 80% retention rate, but is valued at 25 times sales.
Next was Blade Air Mobility BLDE, the short-haul air and sea service that offers members quick access to destinations mostly in and around New York City. Blade has impressive growth and trades for just five times sales, making it a buy on Cramer’s list.
Finally, Cramer looked into Wheels Up UP, a private jet membership service. Unlike Blade, which is asset-light, Wheels Up owns many of its aircraft and also has a partnership with Delta Air Lines (DAL) – Get Delta Air Lines, Inc. Report. Cramer felt Wheels Up was also a buy.
Executive Decision 2
For his second “Executive Decision” segment, Cramer spoke with Matthew Prince, founder, chairman and CEO of CloudFlare (NET) – Get Cloudflare Inc Class A Report, the network and cybersecurity provider that’s celebrating the two-year anniversary of its IPO. Since that time, shares of Cloudflare have soared 700%.
Prince said that Cloudflare is building a better network and continues its mission of execution and innovation. The company has created over 1,000 new products over the past two years, but is “still getting started,” he said.
Cloudflare recently won a lucrative contract with the federal government. Prince said they won that deal because of their unique ability to provide fast, reliable and secure network services. That’s how the company has been able to deliver over a 100% net retention ratio on a dollar basis. Every year, customers spend more on their services.
Prince also called out rival Amazon (AMZN) – Get Amazon.com, Inc. Report for charging too much for bandwidth access to their network. He said Amazon has done an amazing job driving down prices for customers in just about every other area of cloud computing, but when it comes to bandwidth, they’re “gouging their customers.”
Finally, when asked whether he’d invest in cryptocurrency given digital wallets have become a favorite of hackers, Prince said that if those wallets used Cloudflare, he’d definitely feel comfortable using them.
No Huddle Offense
In his “No Huddle Offense” segment, Cramer told viewers that lawsuits are messy, but in the battle between Apple (AAPL) – Get Apple Inc. (AAPL) Report and Epic Games, makers of Fortnite, the pundits got it wrong.
When the verdict came down last week that Apple would be forced to allow app makers to link to third-party payment systems, it was widely seen as a win for Epic and a loss for Apple. But hold on a minute.
Cramer said the real issue was whether Apple was a monopoly, and on that issue, the judge ruled it is not. That makes the ruling a huge win for Apple, which can continue to do right by its customers by offering secure, convenient payments.
The fact that Apple must also allow links to other payment options is a non-issue, Cramer concluded, because the decision that being powerful is not necessarily a monopoly is far more important.
Here’s what Jim Cramer had to say about some of the stocks that callers offered up during the “Mad Money Lightning Round” Monday evening:
The Lion Electric Company (LEV) : “This is the best company in this group. I would hold onto it. “
Academy Sports and Outdoors (ASO) : “This has not peaked. They’re as good as they’ve always been.”
IronNet (IRNT) : “This is a meme stock and we’re not meme people on this show. “
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At the time of publication, Cramer’s Action Alerts PLUS was long WFC.