Jim Cramer: If I were running a hedge fund, I would make these short-term trades on China's bank stimulus

Published Wed, Jan 24 20241:48 PM ESTUpdated Wed, Jan 24 20245:00 PM EST

CNBC's Jim Cramer said Wednesday that China's big monetary policy easing overnight to boost its economy and stock market presents investors with a short-term trading opportunity. "If I were running a hedge fund I would make a trade. I would buy the stocks of Alibaba , Baidu , PDD Holdings and JD.Com ," Cramer said during the CNBC Investing Club's Monthly Meeting livestream. (The replay video is available to members). "That's right. All four. They are the cheapest they have ever been." These four Chinese stocks trade in the U.S. Cramer stressed these are not the kinds of moves he would ever make for the Club. But even as we are not buying them for the Club, we will keep you up on their progress. Remember, the Club is designed as an education vehicle to make members better long-term investors. We run a diversified portfolio of roughly 30 stocks that can perform in all kinds of economies and macro backdrops. Before he got into financial journalism, Cramer had a career on Wall Street, including a stretch at Goldman Sachs . He eventually ran his own hedge fund. Early Wednesday, China's central bank lowered reserve ratio requirements that lenders must maintain by 50 basis points. This is not about manipulating the stock market. This type of monetary policy stimulus is about giving banks more incentives to lend to kickstart the economy. The Chinese economy really does need a boost. It's been a major headwind for many of the stocks that the Club does own — including Estee Lauder , Starbucks and Wynn Resorts — due to the continued sluggish recovery since the Covid pandemic. Cramer never shies away from holding himself accountable for holdings that are not working, and he is not pleased with the performance of any of these China plays. But he said Wednesday that China's monetary policy move to reduce what banks must hold in rainy day funds could be the thing that helps the economy turn the corner. Selling these stocks right before that long-awaited catalyst would be a tough pill to swallow. While the Club waits for its China-tied stocks to bounce back, Cramer said during Wednesday's Club meeting that he felt compelled to share the China trades. Again, they are not being made for the Club. And of course, short-term trades are inherently riskier than doing the homework and picking great businesses to buy as long-term investments. Club members can watch a replay of January's Monthly Meeting below : (Jim Cramer's Charitable Trust is long EL, SBUX, WYNN. See here for a full list of the stocks.)