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Cramer: Trade uncertainty gives investors chance to buy stocks at discount

Key Points
  • Predicting President Trump's next move in the U.S.-China trade war is a difficult task, CNBC's Jim Cramer says.
  • But investors can use that uncertainty to their advantage, the "Mad Money" host says.
  • "You should stop trying to bet on the trade talks and start looking for the stocks of high-quality companies that are worth buying regardless of how things go with China," Cramer says. 
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Trade uncertainty offers chance to buy stocks at discount, says Jim Cramer

The uncertainty around the U.S.-China trade war creates value opportunities for investors, CNBC's Jim Cramer said Tuesday.

"People are always asking me, 'How do you play the trade talks?'" the "Mad Money" host said. "I always say the same thing: stop playing and start investing."

But that does not mean investors should include in their strategy predictions about what President Donald Trump's next move in the long-running trade dispute will be, Cramer said.

That is a functionally impossible task, Cramer said.

"Even his closest advisors might not know what he'll do," Cramer said. "He might not even know himself until the moment he tweets or announces his decision at an impromptu press conference."

What investors should do instead, Cramer said, is stick closely to the facts on the ground for particular companies — not the news story of the day.

"You should stop trying to bet on the trade talks and start looking for the stocks of high-quality companies that are worth buying regardless of how things go with China," Cramer said.

Take Home Depot, for example.

Cramer said the company, shares of which are owned by his charitable trust, has come down recently to attractive levels. Part of that is due to an execution glitch and weaker comparable stores sales last quarter, Cramer noted.

But as a company widely viewed as in the crosshairs of the trade war, it is a strong possibility that Home Depot's stock would get hit if the next round of tariffs, set for Sunday, go into effect, Cramer said.

Those tariffs are still on the table, White House economic advisor Larry Kudlow said Tuesday, downplaying reports that the U.S. was considering a delay.

This would seem to make it an opportune time to sell Home Depot's stock, Cramer said — but not so fast.

That is because Home Depot management is expected to address the impact of tariffs Wednesday at an analyst meeting, Cramer said.

If that impact isn't too great and the stock gets hit Monday "after the trade talks potentially fall apart," Cramer said, "you'll be armed and ready" to buy into that undue weakness.

"Once you stop betting on the outcome of the talks and start looking for opportunities created by the ridiculous swings in the market every time there's some news about the trade war — whether or not the news is accurate — you'll be in much better shape," he said.

"Everything else is just rank speculation people, useless for investing and suspect even for trading," Cramer said.

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Cramer: Trade uncertainty gives investors chance to buy stocks at discount

Disclosure: Cramer's charitable trust own shares of Home Depot.

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