Jim Cramer Sells JNJ and BMY for His Charitable Trust
Several key areas are dangerous for investors in this economic environment, said CNBC's Jim Cramer, and his charitable trust is betting on this strategy. On the other hand, Cramer sees big potential in some other crucial areas that are set to benefit from a higher rate environment.
"I won't surrender to the crowd that says all good news is now horrible. All good news is horrible for Procter, it's not good for utilities. There are segments of this market that are horrendous, like the real estate investment trusts," Cramer said on "Squawk on the Street" Friday.
"At the same time, look at Citi. This is a stock that has gone from $39 to $53. Has anyone said anything? That's a quiet bull market that's happening because rates are going higher," he said.
"The components of the Dow that are interest rate sensitive or bond market equivalent, I don't like them," he explained.
To follow this strategy, Cramer's charitable trust has recently sold its entire positions in Johnson & Johnson and Bristol-Myers Squibb. "This is what's happening because these are the stocks that could be wrong," he said.
Instead, he said, JPMorgan Chase's earnings point to the company being "so undervalued" in an environment of higher rates. On Thursday, Cramer called the banks "the most undervalued group" in the market.
Another stock he likes is Intel, a company which he said should not be feared in this market. "I liked Intel at $23 because of the yield. I like Intel at $26, even though it's not there yet. Intel is the quintessential what I'm not fearing," he said.
However, Cramer's worried about Hershey. "Hershey is the kind of stock that you cannot own in this environment, even though it's a great company. I don't want to own it at $90."
"Then there's General Motors. GM is a win in this environment," he added.
Jim Cramer's charitable trust owns shares of JPMorgan.