Bubble talks grows louder, but informed?

Cramer's strategy amid bubble talk

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

If you're listening to earnings calls, you'd beinclined to think bubbles are everywhere, kinda' like that child's toy from Whamo-O.

Remember, Zillion Bubbles? No?

Well suffice it to say if made a lot of bubbles.

And after listening to the questions on the Facebook and Starbucks earnings call, it seems analysts are very worried about popping.

Pat LaCroix | Stone | Getty Images


Although Facebook results blew past expectations, on the call, "it seemed as though all anyone could focus on was a comment about how younger teens have decreased usage," Cramer noted. Also analysts seemed preoccupied with "how the company doesn't expect to significantly increase ads as a percentage of news feeds."

As a result shares slipped; with "the Q&A turning the biggest upside surprise of the season into a downer."

But, to mix a metaphor, the Mad Money host doesn't think those bubble-poppers were seeing the forest for the trees.

They all but ignored that, "Ad revenue grew by 60%, or that mobile ads are now 49% of the business, or that he company generated $1.8 billion in ad sales," Cramer noted.

Cramer thinks those metrics matter much more. They show meaningful growth. And growth matters in this market.

In fact, Cramer believes there's plenty more growth to come.

"The average person now spends 315 minutes on the Internet every day. On desktops Facebook controls 1 out of 8 of those minutes, while on mobile it'smore like 1 in 5."

"There's no slowing here," Cramer insisted. But you'd never know it listening to the Q&A


Again, after listening to the earnings call Cramer couldn't help but wonder if some investors were circling Starbucks with pins – just waiting to strike.

"Despite an incredible quarter, the Starbucks call had a denouement feel about it. There was a foreboding sense among the analysts that Starbucks can't possibly exceed what it's done already," Cramer said.

Pros just seemed to ignore, "the fabulous packaged goods initiatives, theTeavana rollout, and the day-part expansion," Cramer said, all of which should continue to generate growth – not only in the US but also overseas.

Yet the stock decline before later recovering.

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Cramer doesn't get the bubbalicious phenomenon in the market.

You have to trade the market you have, and in this market growth is trading at a high premium.

"Starbucks trades at more than two times its growth rate while Facebook sells for over 60 times earnings," Cramer said.

That's how it is.

"The kind of growth that Facebook and Starbucks are both exhibiting is hard to come by," Cramer explained. That's why they command a premium. It's not a sign of a bubble.

Therefore, "I would buy, not sell. They're both best of breed companies with clear long-term growth paths. "

Now, put down the pin.

Call Cramer: 1-800-743-CNBC

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