3 takeaways from Wednesday's meeting: Stay diversified, watch these stocks, why we made a trim

Published Wed, Sep 14 202212:07 PM EDT

Every weekday the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. ET. Here's a recap of Wednesday's key moments. Keep portfolios diversified and steady Quick mentions: SBUX, COST, JNJ Trimmed HUM ahead of investor event 1. Keep portfolios diversified and steady Stocks were modestly higher on Wednesday after the S & P 500 recorded its biggest single-session drop in over two years. We believe that now is the time for investors to refrain from making any hasty trades and instead wait out the turbulence. The stock market's performance this week is also a great reminder that a diversified portfolio is key to weathering any type of market. Investors are likely to remain skittish in the lead-up to the Federal Reserve's September meeting next week as they ponder whether central bankers will hike interest rates by 75 basis points or 100 basis points in their continued fight against inflation. The 100-basis-point move gained traction after Tuesday's hotter-than-expected August consumer price index. Wednesday's release of August's producer price index, which measures inflation at the wholesale level, ticked lower and largely met expectations. 2. Quick mentions: SBUX, COST, JNJ We remain bullish on Starbucks (SBUX) due to its ambitious reinvention plan that shows store expansions, revenue growth and the company investing extra cash in the business. "I wouldn't be surprised if a lot of the coffee companies don't go under because of what Howard's doing," Jim Cramer said. Costco (COST) CEO Craig Jelinek said Tuesday that the company isn't planning to raise membership prices right now. He also said that inflation should start to come down in the next six to 12 months. The company has done a great job of handling inflation without alienating customers, and the stock remains one of our favorites. Jim said that if it goes below $500, investors should consider buying. "If you want to buy 100 shares, maybe buy 25," he said. "It's that powerful a story." Johnson & Johnson (JNJ) is a profitable company with a great balance sheet – the type of company we like to have in our portfolio. The company announced a $5 billion buyback and affirmed its adjusted operational EPS guidance of $10.65 to $10.70, or 9.2% growth, making us even more confident in the stock. This may have been a simple reiteration of a previous view, but what it showed is that analysts are too downbeat about the company's prospects. The current consensus adjusted earnings per share estimate for this year is $10.10, according to FactSet. 3. Trimmed HUM ahead of investor event While we normally discourage making any trades on a stock ahead of the company events, we took off some of our position on Humana (HUM) due to Cowen's analyst note that pointed out hedge funds have bullish expectations about management's outlook. This could be setting the company up for a big sell off, as we saw on Tuesday, so we're cashing in a bit now just to be safe. Should the stock fall on heightened expectations, we would potentially look to upgrade our rating back to a 1. We realized a small gain with Wednesday's trim on shares purchased in April. Over that same period, the S & P 500 was down more than 10%. (Jim Cramer's Charitable Trust is long COST, HUM, JNJ and HUM. 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.