Mad Money

Cramer: Keep cash on hand as 'insurance' against a Warren victory in 2020

Key Points
  • Investors who are formulating their 2020 strategies need to be cautious in case Sen. Elizabeth Warren ends up winning the presidential election, CNBC's Jim Cramer says.
  • "Whatever you think of her policies, Wall Street's terrified of Warren, and anything that scares the market is bad news for stock prices," the "Mad Money" host says.
  • Cramer says any Democrat besides Warren and Sen. Bernie Sanders would, at worst, be neutral for the stock market.
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Keep cash on hand as 'insurance' against Warren victory in 2020, says Jim Cramer

Investors who are formulating their 2020 strategies need to be cautious in case Sen. Elizabeth Warren ends up winning the presidential election, CNBC's Jim Cramer said Monday.

"A lot of business people are just terrified of her, and they're going to view everything she does through an extremely uncharitable lens," the "Mad Money" host said.

"So if Warren wins the [Democratic] nomination and the general, unless she immediately makes nice with health care, with banks and all sorts of other big businesses — don't bet on it — I think you'll want some cash insurance."

As for how the market might react to any other Democratic presidential candidate besides the Massachusetts progressive and Sen. Bernie Sanders, I-Vt., Cramer said it would be "neutral for the stocks, at worst."

That was the case under former President Barack Obama, who may have seemed "indifferent" to stocks but still oversaw a "terrific market, even if it started from a very low benchmark," Cramer said.

Democratic presidential candidate Sen. Elizabeth Warren (D-MA) speaks during a rally in Washington Square Park on September 16, 2019 in New York City.
Bauzen | GC Images | Getty Images

But Warren, he said, "is a wild card ... and, honestly, it's not even about her."

"Whatever you think of her policies, Wall Street's terrified of Warren, and anything that scares the market is bad news for stock prices," he said, pointing to how bank and health-care stocks reacted as Warren surged in the polls. "Bad until proven otherwise."

Wall Street's negative views toward Warren have been well-documented. Cramer previously said financial CEOs have told him "she's got to be stopped" and he recounted many of the fears again Monday.

In addition to opposing some of her proposed policies such as a wealth tax and pledges to rein in what Warren calls corporate greed, Cramer said his conversations with Wall Streeters have turned up dissatisfaction with how she treated former Wells Fargo CEO Tim Sloan and billionaire Leon Cooperman.

At the same time, Cramer has said he believes the fear of Warren, who at one point led in an average of national polls, is overblown, arguing again Monday that she may be more moderate than it seems.

Warren's momentum has cooled in recent weeks as she stands in third place in national polls, behind Biden and Sanders. South Bend, Indiana, Mayor Buttigieg, who is in fourth place nationally, recently surpassed Warren in polls in the early contest states of Iowa and New Hampshire.

Ultimately, Cramer said, the contest for the Democratic nomination and the results of November's general election remain highly important as investors prepare for the new year.

"Because if you want to know where the market's headed next year, you need to have a sense of who could win the 2020 election," he said.

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Cramer: Keep cash on hand as 'insurance' against a Warren victory in 2020

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