CNBC's Jim Cramer said on Wednesday not to agonize over investments as Washington edges closer to a debt-ceiling deal.
As investors saw on Tuesday, news about lawmakers' debt ceiling compromise often breaks after market's close, too late to maximize buying opportunities. To that, Cramer offered advice about how to keep cool and stay ahead of the curve.
"The answer to all of these issues is hidden in plain sight, like Poe's purloined letter," Cramer said, referring to one of Edgar Allen Poe's seminal detective stories. "Stay invested, but keep a nice chunk of cash to buy more into weakness. But if you haven't already put that cash to work at lower levels, you might want to leave on the sidelines for the moment and wait for things to cool down."
Cramer feels the debt-ceiling debacle illustrates why investing is so difficult: investors need to make predictions while ensuring they're ahead of the crowd.
"When everybody's betting on the same thing, there's rarely much money to be made by joining them," he said, adding that many investors lose sight of new opportunities when mired in market pessimism.
He highlighted Home Depot, the country's largest home-improvement retailer, whose second quarter earnings report showed revenue brought down by falling lumber prices and weather, especially torrential storms in California that obliterated many sales. The retailer was up 10 by Wednesday's close after a substantial drop on Tuesday.
"But students of the great orange know that what matters to their sales is the worth of a home and there's been a $15 trillion increase in home value since 2019," Cramer said, adding that even though people may spend less on housing this year, the demand for Home Depot products is far from gone. "Houses need maintenance, they need refurbishment, things go wrong, the housing center does not hold. So, Home Depot's sales will come back."
Cramer also opined the flawed logic of billionaires who prioritize caution and emphasize the market's danger. Billionaires have no need to take risks because, unlike most, their fortune has already been made, Cramer said.
"I want to remind people that you do not need to fret," Cramer said. "The amazing thing about the market is that it always gives you opportunities."
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