The next time you hear someone call for a supercycle, Jim Cramer wants you to run — not walk — straight for the exit. A little over a year ago, Cramer warned that sand plays were in danger. He wasn't just worried that the price of crude had collapsed; he was worried that the word "supercycle" would take this group down the tubes.
Commodity sand stocks refer to companies that provide sand for hydraulic fracturing, the drilling method that has been essential to unlock oil and gas reserves in the U.S. Cramer's fear was that sand stocks such as Emerge Energy Services, U.S. Silica and Hi-Crush Partners had skyrocketed immensely, and would not be able to withstand the cut in oil prices that has plagued black crude in the past year.
What really alarmed Cramer was when an analyst from Morgan Stanley came out and called for a fracking sand supercycle. His opinion was that there was a prolonged period of production growth and stronger pricing for sand plays as part of a secular shift in the oil industry.