Controversies were all over the place in Monday’s tape, from Facebook to Uber to the banks, so CNBC’s Jim Cramer offered investors some advice on how to navigate the madness.
“The problem is that the controversies are real; they’re not faux concerns, which would make this kind of sell-off an easier, more natural buy,” the “Mad Money” host said. “The legitimacy of the worries can’t be denied. Don’t be afraid even to sell something in order to raise cash to prepare for still lower levels.”
Cramer was even a net seller for his charitable trust given the widespread weakness in the technology sector, which dragged the whole market down.
“There’s just too much that’s wrong to be whistling past anything,” Cramer said. “It’s a more difficult environment and you need to get used to it. There will be some stocks to buy tomorrow, but let’s get better prices and more oversold levels before we take the leap.”
As technology stocks sank on Monday, Cramer wanted to examine a name outside the line of fire: the stock of e-commerce platform Etsy.
Cramer was skeptical when Etsy first came public in 2015. But he changed his tune since the IPO, blessing the stock for speculation in May 2016 and recommending it again in August 2017.
Since last August, shares of Etsy have climbed 78 percent, and Cramer argued that the move was totally due to the company’s fundamentals — a good sign for prospective investors.
“A lot of people at one point were worried that Etsy would be steamrolled by Amazon after the retail ‘Death Star’ launched their own marketplace for handcrafted goods. Turns out Etsy is incredibly resilient,” the “Mad Money” host said.
Cigna’s $67 billion deal to buy pharmacy benefits manager Express Scripts is less of a routine acquisition than an expansion of what Cigna can already do, Cigna CEO David Cordani told CNBC.
When asked why Cigna, a massive health services provider, agreed to buy Express Scripts while developing its own pharmacy benefits management service, Cordani defended the decision.
“This is not the acquisition of a pharmacy benefit management company, it’s a broadening of capabilities,” Cordani told Cramer in a Monday interview.
The CEO went on to highlight the benefits of the takeover. First, Cigna would get 80 million more customers and a growing order book from Express Scripts, the largest pharmacy benefits company in the United States.
For the CEO of Emerson Electric, a sprawling international manufacturer that benefited hugely from the tax overhaul, tariffs were just “part of the package.”
“We took three steps forward, one step back. But we’re going to work our way through it,” David Farr, the chairman and CEO of Emerson and the chairman of the National Association of Manufacturers, told Cramer on Monday.
Farr acknowledge the trade discrepancy between the United States and China, saying that he had discussed the issue with President Donald Trump.
“There’s got to be a refocus in getting other countries involved and saying, ‘China, you’ve grown up. You’re no longer emerging. You’ve emerged as a global competitor. Let’s act like a global competitor and treat everyone fairly,'” Farr said.
Cramer couldn’t avoid addressing the stock of Facebook, which took a huge hit today after reports surfaced suggesting that the social media giant mishandled the spread of Russian disinformation during the 2016 election.
“Three things have to happen to the stock of Facebook before it can bottom,” the “Mad Money” host said. “One, the stock stops going down on headlines involving what I call soft issues, so to speak, that don’t directly impact earnings.”
Second, Facebook executives have to embrace a consistent narrative and accept responsibility to do no harm, Cramer said.
“Even if the company thinks this is all trumped-up nonsense, they need at least to pretend like they take it seriously,” he added.
Third, the Facebook sellers have to curb their enthusiasm.
“The big profit taking needs to come to an end, to the point where new buyers and sellers from much higher levels simply can’t believe they have a chance to buy the stock at such low levels because of salacious headlines and foot-in-mouth executives,” Cramer said.
In Cramer’s lightning round, he rattled off his take on some callers’ favorite stocks:
Synaptics: “I think a lot of people thought that they should’ve been hurt far more about the idea that Apple’s going to bring glass screens in house. It didn’t because they’ve got very good technology. We had the CEO on. I bless it.”
American International Group: “It does go down every day. When I was doing the charts this weekend I saw that they were really the only insurance company that’s not doing well. May I suggest you go with Travelers or Chubb?”
Disclosure: Cramer’s charitable trust owns shares of Facebook and Apple.
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