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Jim Cramer decided it was time to take a closer look at the slowdown in China, because there are so many moving parts related to it that it completely boggles his mind. Its tentacles pretty much reach everywhere, especially when it comes to Apple.
"Nowhere is the Chinese-Related confusion greater than in cellphones, where everyone admits there is a slowdown but no one wants to say who things are slowing for, or why," the "Mad Money" host said.
Cramer's attention was piqued on the topic of cellphones, because China is both the marginal maker and marginal buyer of them. It is currently in an infrastructure transition to improve speed by switching from 3G to 4G, yet, no one knows where the build-out stands.
And of course, China is where most of Apple's big growth comes from. Yet, Apple has indicated that despite the slowdown in the Chinese economy, despite the fact that the entire Chinese stock market crashed, and despite the fact that all of the economic indicators are tanking—things are excellent.
He could also suggest that the cellphone business has become a zero-sum industry, and Apple has totally crushed its competitor Samsung to take share faster than he's ever seen.
But there is one thing that Cramer knows for sure—the companies that have most benefitted from the strength in Apple's phones are hurting right now.
Both Qorvo and NXP Semiconductors represent the hottest portion of the semiconductor business, and have chips that go into everything from autos, to the Internet of things and cellphones. And while NXP was loved on Thursday, rising 6 percent, Qorvo took a total nosedive, dropping 14 percent.
Cramer could sense the total confusion emanating from Qorvo's conference call on Wednesday, which was widely viewed as a disaster. It portrayed the shortfall as a function of the big infrastructure transition in China, not Apple.
Yet, with all of the evidence, Cramer could argue that it wasn't just the infrastructure transition. It's an actual slowdown, which was aggravated by the crash in the Chinese stock market. No one can escape the slowdown, including Apple.
So, what is the truth here?
"My view is that the hot money made a bet that cellphone sales in China would be going strong. Now the hot money wants out of that bet, including Apple," Cramer said.
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Instead, money is rotating out of cellphones and Apple and into health care, soft goods, oils and possibly industrial stocks.
Cramer summed it up in just three letters: ABC—anything but cellphones.
By the time investors find out what really when wrong, Cramer suspects the market will have already bottomed and started to go up again. That is exactly why he reiterated to own, not trade Apple, for a bumpy ride ahead.