Cramer Remix: How to build a Washington-proof portfolio

As the market parsed Tuesday’s tidal wave of news, from a blocked Broadcom-Qualcomm deal to an ousted Secretary of State, CNBC’s Jim Cramer issued a warning to investors.

“Can we take a step back for a moment? This is not a good way to invest, people. Your strategy should not change based on every other presidential tweet,” the “Mad Money” host said.

“Instead of focusing on every little thing from the White House, how about evaluating companies on their own merits? Too old-fashioned for you?” he continued. “Maybe don’t stress too much about the tweets unless you want to invest in Twitter.”

While he didn’t want investors to ignore the president’s tweets or write off the changes to U.S. trade policy, Cramer did want investors to consider the circumstances before selling because of a tweet.

“I am saying that if you have a diversified portfolio — some health care stocks, some banks, some consumer packaged goods stocks, some tech — you won’t need to re-position every time the fickle administration changes its view,” Cramer said.

As business looks up for the newly refocused Twitter, the company’s tone has shifted from optimism to humility, the company’s new CFO, Ned Segal, told CNBC on Tuesday.

“We do feel a sense of humility, but we also know that everybody in the world could benefit from what happens on Twitter,” Segal told Cramer in an exclusive interview.

“Today, we’ve got 330 million monthly active users as of the end of the fourth quarter and we grew our [daily active users] double-digits for the fifth consecutive quarter,” the CFO continued. “But we feel like everybody in the world can benefit from what’s happening and what people are talking about on Twitter, so there’s still a lot of work in front of us.”

Segal, who became CFO of Twitter in July 2017, said that Twitter has refined its priorities in the last several years under the leadership of CEO Jack Dorsey, who is also CEO of Square.

Having rallied over 200 percent in the past year, Square‘s stock sets itself apart by its ability to bonce back from seemingly devastating declines, Cramer said on Tuesday.

Speaking from CNBC’s 1Market in San Francisco, the “Mad Money” host decided to look into Square’s resilience and explain what’s kept the stock afloat.

“Not once, but twice in the last four months, this stock has been hit with fierce declines,” Cramer said. “Both times it seemed like the beginning of the end for Square, and both times the stock managed to turn things around, coming back with a vengeance.”

For Cramer, Square’s true catalysts are associated with its core business, not the bitcoin-trading pilot program that was championed by Dorsey and led to the stock’s declines.

As such, Cramer recommended that Square executives downplay its bitcoin connection, saying that the company’s forecast of 37 percent revenue growth in 2018 is already a great story.

In the next decade, Applied Materials President and CEO Gary Dickerson expects nearly every facet of daily life to change, he told CNBC on Tuesday in an interview with Cramer.

“If you look at what we’re seeing today for our business — data generation, all of the smart devices in the world, the amount of data that needs to be stored, the processing of that data, the communication with 5G, all of those things — we’re really in the top of the first inning,” Dickerson said.

“Transportation is going to be disrupted, health care, entertainment, our homes, all parts of our lives are going to change in the next decade by far bigger than anything you and I have ever seen,” he told Cramer.

As a company that helps other build out these capabilities with its semiconductor manufacuring technology, Applied Materials’ top priority is the “speed of innovation,” Dickerson said.

To illustrate his point, the CEO brought Cramer a virtual reality headset that transported the “Mad Money” host to Applied Materials’ technology center.

“Our technology center here in Silicon Valley is the most advanced in the world,” the CEO told Cramer. “So now you’re seeing the products that create every chip in the world, the most advanced displays in the world.”

As Cramer analyzed the White House’s blockage of what would have been the largest tech takeover ever, he came to a conclusion about the Trump administration’s foreign policy narrative.

“The White House is taking a much tougher line on China when it comes to dumping raw materials on our markets and, maybe more important, stealing our intellectual property,” he said.

But some of the moves were “downright confusing” to the “Mad Money” host: even though more than half of Broadcom’s sales come from China, it is a U.S. company. And when was Qualcomm deemed a precious asset for the United States, he wondered?

“The Trump White House basically just declared China an official pariah in both name and deed, and that’s the main reason the Nasdaq got hammered today,” he said. “The message here is that this administration doesn’t want China’s business and it doesn’t want China’s money. That is a big deal, a lot bigger than people realized, until perhaps today.”

In Cramer’s lightning round, he shared his take on some callers’ favorite stocks:

Advanced Micro Devices: “I think it’s stalled right here but [CEO] Lisa Su is doing a great job. Don’t forget, she’s going up against Nvidia and Intel. That’s not easy competition.”

ImmunoGen: “It’s made too much of a move. It’s up real big – 52-week high. We’ve got to wait for a pullback. And by the way, I like Regeneron again.”

Disclosure: Cramer’s charitable trust owns shares of Broadcom and Nvidia.

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