Cramer's Investing Club: We are using this pullback to add to some key positions

Published Fri, Jan 21 20229:34 AM ESTUpdated Mon, Jan 24 202211:01 AM EST

We are making a number of buys on the dip Friday morning. We are buying 800 shares of Bausch Health Companies (BHC) at roughly $24.78, 50 shares of Salesforce (CRM) at roughly $220.61, and 100 shares of Marvell Technology (MRVL) at roughly $72.90. Following the trades, the Charitable Trust will own 2,800 shares of Bausch Health Companies, 525 shares of Salesforce, and 1,300 shares of Marvell Technology. (We discussed further why we made the trades at our Morning Meeting live broadcast .) This buy will increase BHC's weight in the portfolio from about 1.25% to 1.74%, CRM's weight in the portfolio from about 2.65% to 2.92%, and MRVL's weight in the portfolio from about 2.31% to 2.40%. Markets are set to follow up Thursday's ugly reversal with another down day and the Nasdaq is poised to fall further into correction territory. Weighing on stocks this morning is the weaker-than-expected subscriber outlook number from Netflix, which is down about 20% pre-market in a move that we think may actually be an overreaction. Good set-up While it may seem tough to buy anything right now with the market as treacherous as it is, we actually see Friday's down open as a good set-up to buy into as usually it is the up opens that traps investors as soon as the buying momentum slows. And the S & P Oscillator that we explained Thursday in our Morning Meeting moved slightly deeper into negative territory after yesterday's sell-off, meaning that the time has come to hold your nose and find things to buy. From our vantage point, we have plenty of cash to work with right now. Remember, we raised roughly $92,000 in cash from the two big sales we made at much higher prices earlier in the week in our note here . Now we have done some buying over the past few days, picking up shares of high quality names Danaher and Eli Lilly, but we are still roughly $66,000 "net out" of the market. We do not want to be "net out" when the market is in oversold territory, so our goal for today is to end the week at roughly cash-neutral, meaning that we need to put in the market whatever we took out earlier in the week. To get cash neutral, our plan today is to start the morning off with roughly $40,000 in buys and leave the remaining $26,000 or so for later in the day in case the selloff picks up steam. Bausch Health Companies This stock has been a bit of disappointment since our initiation (as has most of the market), but we are not backing away from our thesis that Bausch Health's breakup will unlock value for shareholders. While it is true that it will be difficult to IPO in the current market environment, and rising interest rates are a headwind for the company, Bausch Health's different parts still screen inexpensive relative to peers and the cash proceeds from the IPOs will do wonders to the company's balance sheet. BHC is still one of the smallest positions in the portfolio and at 5% below our average cost basis, we see this as a good level to average down the position. Salesforce We are making a stand in CRM and adding to our position with the stock down roughly 30% from its highs. Although CRM has become a little controversial of late because it is a high multiple software stock, the recent action in some of the highest quality software franchises has been encouraging of late. The two tech stocks that led us down, Adobe and Salesforce have started bouncing early in the day, and that might be a sign that the worst of the selloff is behind us. Marvell Technology For Marvell Technology, you may recall on Dec. 7, we sold 200 shares of MRVL at around $92 after the stock rallied roughly 30% over three trading sessions. This was a tough sale to make because we are huge fans of this company for its peer leading growth rate and exposure to secular themes in the cloud, 5G, and auto. But discipline always trumps conviction, and our discipline said we had to book in profits and lock in gains after an incredible short term move. We bought back 100 of those 200 shares at around $78 earlier in the month in our note here , and we are buying that second tranche with MRVL set to open around $73, or roughly 20% below our sale price. For more information about the most recent Marvell quarter, please see our note here . Still Have Work to Do Outside of this morning's trades, we are still actively looking to add to some of our existing positions and for new names. Remember, if our goal for today is to be cash-neutral on the week, then we still have about $26,000 worth of stock to buy. Some ideas on our shopping list right now are Qualcomm if it breaks down to the mid to low $160s as we said in Thursday's Morning Meeting , or buy back the Estee Lauder we sold at $360 if it falls under $300, like we explained earlier in the week in our note here . (Jim Cramer's Charitable Trust is long BHC, CRM, MRVL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

People pass by the Salesforce Tower and Salesforce.com offices in New York City, March 7, 2019.

Brendan McDermid | Reuters

We are making a number of buys on the dip Friday morning.

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