The best places to put new money
Every day, Jim Cramer receives numerous tweets asking for advice on the stock market. And while some can be answered with a simple yes, no or a quip that logs less than 140 characters—others cannot.
"It would be foolish to answer in 140 characters because you would have to be sweeping with no nuance, and nuance defines the art of good stock picking," the "Mad Money" host said.
So, in the interest of ensuring Cramerica receives the attention it deserves, Cramer has chosen to expand on what he feels is a very important question received via Twitter: What's the best place to invest new money—biotech horsemen, oil, cult, Amazon, Netflix, Tesla or semis?
To begin, he started with the easiest group, the cult favorites. Amazon, Tesla and Netflix are all part of what Cramer describes as cult stocks. Those are stocks that are not evaluated based on the traditional metrics of earnings reports. Instead, they trade based on press releases and sexy product announcements.
The answer to this question was simple: "I don't like cult stocks. That's because in the end, I am a classical evaluator of stocks. I like earnings per share and I don't like to value stocks just on sales," Cramer said.
Yes, Cramer knows that the Tesla car is cool. He thinks so too, but he is not willing to overlook important things like capital expenditures just because the CEO is cool. That would be irresponsible.
The next group is the biotechs, which were just slammed hard last week. Cramer was initially concerned with the amount of froth happening in that sector, but he is willing to bless what he calls the four horsemen of the biotech apocalypse. These are the same stocks he has been pushing for years: Biogen, Celgene, Gilead and Regeneron.
As for oil stocks, Cramer's trust just bought Schlumberger last week on a bet that oil could bottom $5 from its current level. However, proceed with caution!
Cramer anticipates that this will be a terrible year for oil stocks. Thus, he only recommended buying one or two positions just in case oil makes a turn, despite Cramer's thoughts. He likes Schlumberger and EOG.
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The last group he recommended adding new money to was the semiconductor space. In Cramer's perspective, the key to the semis is to buy those stocks that are all about connectivity. This is the year for the Internet of things. Thus, he recommended Qorvo, Avago, NXP Semi, Skyworks Solutions and Spansion are in the epicenter of this movement.
So, there you have Cramer's expanded answer to his fans on Twitter. In the end, these are all stocks that Cramer would buy and he is willing to bless as being good to go for your portfolio.
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