×

Cramer Remix: Breaking down Buffett’s cues for when to buy

Jim Cramer was shocked when Warren Buffett revealed to CNBC on Monday that Berkshire Hathaway had more than doubled its position in Apple, to 133 million shares.

"We got more investing wisdom than most people can consume in a lifetime," the "Mad Money" host said about the interview.

Buffett revealed to "Squawk Box" that after Jan. 1 and before Apple's earnings on Jan. 31, Berkshire Hathaway purchased 120 million shares. That put Apple neck and neck with Coca-Cola as its largest position.

Cramer marveled at the simplicity of Buffett's approach when he explained that when he takes his great-grandkids and their friends to Dairy Queen, they all have an iPhone. That prompted him to do homework on the balance sheet, capital allocation, earnings and decide that Apple was a good buy.

Buffett also said that one never knows when there could be panic in the market, but that is the best time to buy. More important, Buffett pointed out that if investors have a long-term perspective, the best time to start buying could be now while the market is not in a bubble.

"What is amazing about this is that Buffett did what literally anyone can do," Cramer said.

He started with an idea, did the homework and realized it was a great stock.

Warren Buffett
David A. Grogan | CNBC
Warren Buffett

Virtually everyone on Wall Street assumes that President Trump's agenda for taxes and foreign assets must be passed in order for the stock market to roar higher this year, but Cramer disagrees.

"The idea that we MUST have corporate tax reform and repatriation is something I no longer feel is as imperative as it once was," Cramer said.

There was certainly no denying that Trump's championing of these issues and his endless parade of meetings with executives has helped the investing climate in the U.S. But that doesn't mean the stock market should throw away the necessity of growth and earnings as a dominant force.

"As long as we get worldwide growth like we are beginning to have, than in my view, we don't really need these two initiatives to propel this market," Cramer said.

One company that is growing is Marriott Vacations Worldwide, the vacation rental business that was spun off by Marriott International back in 2011.

The stock has been on fire lately, up 13 percent this year. It finally got a much-needed pullback on Monday when shares fell 2.31 percent. The company reported earnings last week and delivered a 9-cent earnings beat from a $1.74 basis, even as revenue came in light due to Hurricane Matthew.

More important, the company's management provided strong guidance in 2017, forecasting 9 to 15 percent sales growth this year. Cramer spoke with CEO Steve Weisz, who said everything finally came together as planned.

"Back in 2015 we had an analyst day we told people that our plan was we were going to add new sales centers and new resort locations, and we were going to have new marketing programs that delivered more tours into our existing sales centers. And in fact, that all happened," Weisz said.

Donald Trump
Getty Images
Donald Trump

Shares of Martin Marietta Materials rose more than 2 percent on Monday as infrastructure stocks spiked thanks to news of President Trump's agenda for infrastructure.

Martin Marietta is the maker of aggregates, concrete asphalt and other basic materials that are used in construction and infrastructure projects, making it the perfect beneficiary to a major infrastructure bill.

Cramer spoke with the company's Chairman and CEO Ward Nye, who said this is the strongest outlook the company has ever seen.

"We went so far down when the housing fell off, non-residential went away and we didn't have a highway bill. So now what's come back if you think about it we actually have a highway bill that's multi-year, housing is much better than it's been. It's still has a long way to go. And we feel like in our market, non-residential is going to be good. So if we rack those three things up, it's a big piece of our volume," Nye said.

Workday also proved that its momentum of sales continued to gain strength when it reported fourth-quarter earnings on Monday. The company's CEO Aneel Bhusri said that Oracle's acquisition of NetSuite helped bolster the best quarter in history for Workday.

"We saw quite a bit of turmoil within the NetSuite customer base, and I think it's only at the beginning. My guess is that most of the NetSuite management team will be gone in 12 to 18 months," Bhusri told "Mad Money" host Jim Cramer on Monday.

"And so most of those companies chose not to do business with Oracle. I think they might come back to market and create an opportunity for Workday."

Oracle announced it would purchase cloud storage company NetSuite in 2016 for $9.3 billion in a move to ramp up competition in the cloud.

In the Lightning Round, Cramer gave his take on a few stocks from callers:

PayPal Holdings: "I think PayPal is not inexpensive, but at the same time great growth with a fantastic CEO Dan Schulman."

First Solar: "No we have enough problems with so many of the great energy companies right now... this company just had a big jump up after really getting clobbered. We want to stay away. Too rocky."