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Cramer: Will market reward brave investors?

Tuesday, 28 Jan 2014 | 6:00 PM ET
Buy low sell high, Apple included: Cramer
Mad Money host Jim Cramer explains why it is important to buy stocks when they are on sale and sell them when they are overpriced relative to the moment.

(Click for video linked to a searchable transcript of this Mad Money segment)

Had you the courage, taking long positions in a handful of stocks during the sell-off would have generated sizable returns, already.

"Take Google. Yesterday morning at one point this stock was down 39 points," Cramer noted. You caught a swing of 30 points if you were brave and bought when selling was at its most fierce."

And Cramer thinks buying shouldn't have been a terribly difficult decision. "Nothing was fundamentally wrong," Cramer explained. "The selling was triggered by raw emotion. Nothing more."

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The "Mad Money" host also noted that facing the fear in Netflix was also a winning trade. "We've often said Netflix stock is a buy on a pullback if you are lucky enough to get one. Yesterday, we got lucky." In just one day shares popped almost 7% with the sell-off generating an attractive point of entry before that sharp advance.

Cramer said the same philosophy applies to Amazon which has also marched significantly higher since only 12noon Monday.

Of course, all these opportunities have passed by. However, Cramer can't help but wonder if another stock is about to follow a similar pattern - Apple.

If fear is bubbling in any stock, it's got to be Apple. Estimate cuts have been rampant with some high profile firms downgrading the stock altogether.

Cramer, however, questions those cuts and downgrades.

"Last quarter Apple set out some sales objectives and ranges on its conference call. You know what it did? It actually beat the those number. Now, unlike many analysts think, the company did not lay out how it was going to hit the numbers. It never said it was going to sell 56 million iPhones, which was the estimate that the analyst community set. I repeat, it never gave you that number," Cramer noted.

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However, because fear has washed across shareholders, Apple fell almost 8% in Tuesday's session, alone. Could that fear be presenting opportunity in Apple in the same way it presented opportunity in Google, Netflix and Amazon?

No one can say for sure. However Cramer can say, "Buying on weakness, buying on a pullback, typically that's how big money is made," Cramer noted. "I like to buy stocks on sale and Apple Is definitely put on sale."



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