Cramer says Tepper believes now is not the time for investors to try to be a hero

Published Tue, Jun 14 20229:43 AM EDTUpdated Tue, Jun 14 202210:27 AM EDT

Kevin Stankiewicz @in/kevinstankiewicz @kevin_stank

Jim Cramer on Tuesday discussed a recent conversation he had with hedge-fund manager David Tepper , relaying the Wall Street legend's belief that investors should not attempt to "be a hero" in this volatile market. "I spoke to my friend Dave Tepper last night," Cramer said Tuesday on CNBC, one day after a brutal sell-off that led the S & P 50 0 to close in bear market territory for the first time since the early days of the Covid pandemic, in March 2020. Stocks opened higher Tuesday shortly after Cramer spoke. "He taught me a lot that I know. He said, 'Jim, I've got to remind you once again this is not yet the time to make money. This is the time to not lose money.' ... Tepper is just basically saying, look, there's no reason to be a hero." Cramer also said that Tepper didn't rule out a market bounce. The S & P 500 tumbled 3.9% Monday, closing at its lowest level in more than a year and over 21% below its early January record high; a bear market is considered falling 20% or more from a recent peak. The Dow Jones Industrial Average and tech-heavy Nasdaq sank 2.8% and 4.7%, respectively, on Monday. The plunge Monday came as investors reassessed hotter-than-expected consumer inflation data released Friday and its implications for Federal Reserve policy. Some fear that more aggressive tightening from the U.S. central bank could tip the U.S. economy into a recession. The Fed's June two-day policy meeting begins Tuesday, and a decision on interest rate hikes will be announced Wednesday afternoon. The markets now expect a Fed rate hike of 75 basis points, something Cramer also alluded to in a note to Club members on Monday night. Tepper's history The founder of Appaloosa Management, Tepper has made some bold, timely calls over the years. His most well-known one likely came in 2010, sparking the so-called "Tepper rally." Another prescient call came on Feb. 1, 2020, when Tepper told Cramer the coronavirus could be a "game changer" for the stock market . At the time, only a handful of Covid cases had been confirmed in the U.S. On May 10, Cramer recounted another conversation with Tepper about the market . In that chat, Tepper indicated to Cramer that he covered a short position against the Nasdaq on the belief that the sell-off could be concluding. The market did rally for a few weeks into early June, before retreating and reaching their lowest levels of the year. Tepper is a trader, Cramer has cautioned previously, and can change his outlook as new information becomes available that challenges his view. (See here for a full list of the stocks in Jim Cramer's Charitable Trust portfolio.) 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.

David Tepper

David Orrell | CNBC