Ways to Win In This Market
There are so many ways to win in this market, Cramer said Wednesday. The “Mad Money” host detailed a few of the many winning trades today.
First, consider hostile takeover bids. On Tuesday, pharmaceutical company Roche made a bid for Illumina, an underperforming diagnostic company. In turn, Illumina’s stock finished well above the price Roche had started bidding at.
Second, there’s the reversal trade. One of the most annoying aspects of the market last year was if the market opened down, it would continue to fall into the close, Cramer said. If it was up, it only stayed up long enough to sucker you in before killing you. The optimal situation is when the market opened down, you could take advantage of the decline and make money on a rebound. That hadn’t happened in a while, though, until Wednesday’s market.
Third, Cramer pointed to the “shrug off.” Giant downgrades of both Morgan Stanley and Goldman Sachs by JPMorgan Chase Wednesday didn’t seem to bother the market as much as it had last year, he explained. Anyone who bought Goldman down at $105 was able to ride it back up to $108.
“Faux earnings disappointments” were also at work, Cramer said, like how Boeing disappointed because of pension costs. He shrugged it off, though, and the stock bounced back.
Finally, Apple is the most obvious winning trade. A lot has been said about the technology company’s stock, but Cramer doesn’t think it has run too much. He’s hoping it retreats, though, so investors can buy more.
To Cramer, the Apple narrative is remarkable. A short while ago, nobody knew what to do with the iPad. Now the device has revolutionized so many aspects of people’s lives. Despite tablet glut having hindered business earlier, Apple has wiped out the competition. It’s sold more than 15 million iPads in a single quarter, which is double last year’s numbers.
Apple also sold 37 million iPhones last quarter. The iPhone 4s device is helped by the SIri service, an automated personal assistant that helps organize your life by providing directions, setting reminders, booking appointments and many other things.
Cramer said the way to win with Apple, then, is to continue owning shares.
When this story was published, Cramer's charitable trust owned Apple.
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