- "Mad Money" host Jim Cramer reveals the truth behind the apparel renaissance and why you should consider buying the group into weakness
- Cramer also unpacks the market weakness and gives his take on the trade war.
- In the lightning round, Cramer makes a new call on big tobacco.
The major averages may have ended Friday in the red, but CNBC's Jim Cramer didn't want volatility to scare investors away from a group that's coming back with a vengeance: Apparel retail.
"I'm calling it the U.S. apparel renaissance," the "Mad Money" host said. "Yep, we've gotten a series of strong numbers from the apparel makers and apparel-focused retailers, and while their stocks have performed remarkably well in a rocky market, I think they've got much more room to run and deserve to be bought into any weakness like we had today."
From Nike to PVH to Tapestry [formerly Coach], Cramer has watched the companies and their stocks tell a story of a comeback in the apparel space, giving him confidence that the strength isn't just a blip.
"Here's the bottom line: don't let a day like today scare you away from the stories that are actually working," Cramer said. "We are undergoing an apparel renaissance here in the U.S. and these stocks are worth picking at into any weakness that we might get on Monday because right now, they have the best fundamentals of any large group in the entire stock market."
After Friday's sell-off, Cramer needed to emphasize why investors must remain vigilant in this new, much more volatile stock market.
"The key is to recognize that you're only human. Your sense of timing is going to be fallible," he said. "That's especially true with this current White House and a Federal Reserve that's now tightening. You can't presume anything other than a good chance that when you buy, you're going to be wrong."
"In the end, you want panic working for you, not against you," Cramer said.
"The mercurial nature of the president's negotiating style, coupled with his determination to tame China even if it means hurting the earnings per share of our exporters and also, of course, hurting the spending power of our consumers, well, it is a recipe for daily panic," he continued. "That translates into lower prices, which is why you need to keep some cash available at all times [to] take advantage."
With that in mind, Cramer turned to his game plan for the week, which will kick off the market's next earnings season.
Cramer knows that Wall Street's hedge fund managers will undoubtedly have a strategy for approaching the United States' trade debacle with China.
"These hedge funds are putting on what we call paired trades, ... betting against one company with huge Chinese exposure and going long a similar company with little to no Chinese business," he said on Friday. "The idea is that whatever the industry, the stock with China exposure is going perform worse than the one without it."
While he admitted that it's hard to pit President Donald Trump — the man behind "The Art of the Deal" — against those who study Sun Tzu's "The Art of War," he wanted viewers to understand how the game is played.
"I want to make it clear that I am not advocating this strategy for you homegamers," Cramer said. "The issue here is that the president is OK with hurting American companies that do business in the People's Republic."
"When the averages are falling apart, the thing to focus on is the CBOE Volatility Index, the VIX for short, also known as the fear gauge, which was so heavily tied to the big breakdown in February," Cramer said.
But after reviewing the charts, Sebastian thought the action in the VIX could be trending more positive than negative.
"He thinks the action in the VIX is signaling that we might be bottoming despite today's horrendous action," Cramer said.
For Lee Bird, the CEO of big-box home decor retailer At Home, his business' advantages hinge on its "very efficient supply chain," he told Cramer on Friday.
"It's private label, private branded, so we're not paying other brands as well, and we have a very efficient labor model, low-cost real estate," Bird said in a "Mad Money" interview.
That model enables Bird's company to sell items at lower price points than Wayfair and even Amazon. It also allows for At Home to maneuver geopolitical events that could affect its business like the U.S.-China tariff debacle, Bird told Cramer.
"We've just moved to direct sourcing. That's going to grow," the CEO said. "We know where our footprint is. We've been moving and migrating to Vietnam and the Philippines and Thailand and so on, so we have opportunities to be very nimble."
In Cramer's lightning round, he flew through his take on some callers' favorite stocks:
Phillip Morris International: "We actually discussed this for my charitable trust. We sold a lot of tech last week. We just had enough. But I'm not going to recommend a tobacco stock. There are too many guys who are actually working on products right now that'll make it so there'll be a cessation in smoking. Don't forget, it is the single biggest cause of death that we can control, so I am not recommending the stocks. New position, I know. I don't care."
Iron Mountain Inc.: "Not bad, not bad, but look, a 7 percent yield will not protect you against if interest rates do tick up. But you can collect that income and it's a better income producer than most, but I've got to tell you, not my cup of tea."
Disclosure: Cramer's charitable trust owns shares of Amazon.