Investing Club: We're going to be buyers in Thursday's Russia-driven stock market declines

Published Thu, Feb 24 20227:54 AM ESTUpdated Thu, Feb 24 20228:23 AM EST

The long-awaited invasion has begun. Markets are expected to open sharply lower after Russia launched an attack on Ukraine. We have expected this and we have been waiting for this shoe to drop. It is why we have been so chary with our buys, gingerly adding to positions when they hit key levels with respect to dividend yield or basis. But with the broader market expected to open sharply lower Thursday with the S & P 500 off about 2.5% and the tech heavy Nasdaq down even more, finally we are at the point were the levels of many stocks that we have been looking for have been taken out. Qualcomm (QCOM) was below $160 in the premarket, Morgan Stanley (MS) finally has a dividend yield above 3%. So we will buy some of each. Two that we are restricted from buying today, Cisco (CSCO) and Walmart (WMT), have finally come in significantly since reporting great quarters. You are now getting those great quarters for free because they are below where they reported. We will also put small amounts to work in our big drug stock, Eli Lilly (LLY), which we have refrained from doing so. Drug stocks will do well because of fear of recession. What do these companies have in common? Let's take a look at the proximate cause of the selloff. Stocks are lower because oil is spiking on news of an invasion. All of the stocks listed above should be unaffected by what is happening in Europe. Of course, all of Nasdaq is falling but we cannot predict how low these stocks will go because, unlike Cisco and Qualcomm they are still highly valued. Cisco and Qualcomm are unique in that they are reasonably priced with teen price-to-earnings multiples and pay dividends. The one other stock we want to buy is Disney (DIS) as it is well below our buy from yesterday. We'll save that for later as it will be a long day. We'll fund some of these purchases with a sale in Chevron (CVX) of a few hundred shares. Now you may ask why sell an oil stock when it is the only group working in the market? The attack was the catalyst we have been waiting for. And what a great opportunity it is to sell a stock that is expected to be up 2% to 3% on Thursday to buy many others that have nothing to do with Russia-Ukraine but are down 2% to 3%. It is difficult for us to act on more stocks because we want to keep a decent sized cash position, and Thursday and Friday could yield to more weakness, but today is a day to put to work some of the cash we have kept on the sidelines. We will continue to sell Chevron to sell buys as it is too high versus the rest of the market. We know and are not ignoring Advanced Micro Devices (AMD) or Salesforce (CRM) or Google-parent Alphabet (GOOGL) or Microsoft (MSFT) — but we need to save some buys for later in the day or tomorrow and, of course, next week as we don't know if Ukraine will and can resist or if it is going to be relatively bloodless. An invasion occurred and historically when this happens you had to do some buying. We have held powder for this moment, so it's time to go to work. This is our game plan for Thursday. We'll be following up later this morning with the specifics around our trades. (Jim Cramer's Charitable Trust is long AMD, CRM, GOOGL, MSFT, CVX, LLY, DIS, CSCO, WMT, MS, QCOM. See here for a full list of the stocks in Jim Cramer's Charitable Trust.) 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.

Russian military tanks and armored vehicles advance in Donetsk, Ukraine on February 24, 2022.

Anadolu Agency | Getty Images

The long-awaited invasion has begun. Markets are expected to open sharply lower after Russia launched an attack on Ukraine.