The stock market has had a tremendous run on the prospect of deregulation, lower corporate tax rates and repatriation of overseas earnings under President-elect Donald Trump — but Jim Cramer sees trouble ahead.
"I can't remember a time in my investing career when we whistled past more graveyards. Things really could be this good, for sure, but maybe we'll realize that a cemetery can be a spooky place," the "Mad Money" host said.
After a historical rally, Cramer fears that investors could be set up to be spooked by the many issues that plague the stock market.
Cramer thinks Trump's new cabinet could begin to worry professional money managers, too. Trump's selections reflected to Cramer as a massive overhaul of some major departments, and that could be frightening to some investors who aren't used to this scale of change.
Once again, President-elect Donald Trump shook the business world with a tweet blasting another industry for overcharging the government — and Cramer is concerned about the risk that it could bring to your portfolio.
"I think you need to examine your portfolio and ask yourself, can you handle the risk of owning shares in a company that feeds at the federal trough? It's a new risk factor, and if you don't account for it, you could find yourself on the receiving end of the next presidential tweet," the "Mad Money" host said.
To be clear, Cramer isn't saying that all stocks need to be sold. But he did warn not to be fooled by Trump.
Regional banks have run up dramatically since the election, and while the stocks likely have a pending rate hike baked into valuations, Cramer thinks they could still have room to run.
What was even more remarkable to Cramer was that several of the regional bank players have been hit with downgrades, both before and after the election, and they continued to rally.
"Personally, I think there is no better evidence for the strength of the regionals than the fact that they can keep roaring in the face of these downgrades," the "Mad Money" host said.
Avago's $37 billion acquisition of Broadcom last year is increasingly becoming the greatest deal in ages to Cramer.
The joint company created the third largest semiconductor company in the world now named Broadcom Limited. Back in April the stock traded at $157, and now trades at $177 — and Cramer thinks it could head higher.
For those investors that missed the first leg of the newly combined company after it reported its first quarter, Cramer said not to worry.
"This has been one of the great growth stocks of the last decade, and I don't think it's done," Cramer said.
As investors brace for an expected rate hike from the Federal Reserve this week, many investors will continue to swap out of higher yielding bond market equivalents like real estate investment trusts, and go into bonds.
Cramer was on the hunt for REITs that have bucked the trend, such as DCT Industrial Trust. DCT owns bulk distribution warehouses and light industrial buildings. In a way, the stock is a play on ecommerce — the more people shop online, the more warehouse space is needed to store goods.
Cramer spoke with DCT's CEO Phil Hawkins, who encouraged investors not to look at interest rates, but look at the underlying business.
"As we go into this environment with a rising economy accelerating growth that is good for our business. Our business is focused on U.S. consumption. The better U.S. consumption is, the better we will do," Hawkins said.
In the Lightning Round, Cramer gave his take on a few stocks from callers:
Gilead Sciences: "Bruce Kamich who does the technical work at RealMoney.com said it looks like that stock's finally washed out. I've been waiting for that, I think it is being washed out. I would not sell the stock, I am more inclined to buy it."
PolyOne Corporation: "I like the chemicals here, but I am partial to Dow Chemical because I like the yield and I like the balance sheet."
Correction: This article was updated to reflect attribution to Phil Hawkins stating growth is good for business for DCT.