Cramer Remix: Why Carl Icahn’s decision to sell Apple was the right one
The time is upon us where hedge funds file their 13-F forms and disclose their holdings to Wall Street, but Jim Cramer warned investors that piggybacking is often not in their best interests.
The "Mad Money" host recalled when legendary investor Carl Icahn sold all of his huge position in Apple when the stock was at $95 in April 2016, citing concerns about business in China.
Beyond that being an objectively bad time and price to sell Apple's stock, Cramer said that anyone who followed Icahn blindly deserves the blame for their loss.
"Icahn did what was right for Icahn. He didn't necessarily do what was right for you, because he doesn't work for you. He's got zero fiduciary responsibility to you. None. In fact, I consider it a gift that he even bothers to tell you what he's up to," Cramer said.
Cramer added that Icahn was right to worry about China, which did see a temporary slowdown that hurt Apple's sales, and that the investment guru sold at a massive gain — it would have been a cardinal sin to sell at a loss.
"The lesson here should be crystal clear: whether it be Bristol-Myers or Allergan or Apple or any other stock, you must do your own research," Cramer explained. "I want you to recognize that while you may not be a full-time money manager, there is no reason whatsoever you have be a full-time amateur."
While reflecting on the 20th anniversary of e-commerce giant Amazon's IPO, Cramer wanted to address the difficulty of staying in a good stock by looking at the market's "here and now."
"Lots of people have been opining about how this incredible stock [Amazon] could have eluded so many of us who were customers," Cramer said. "I want to zoom out and discuss some stocks that are hot in today's market and why it's so darn hard to stay in them, even as I think they could be incredibly rewarding."
Cramer started with Home Depot, a home furnishings retailer that many on the Street thought would, like so many others, fall victim to Amazon's influence.
"In some cases, that may be true," he acknowledged. "However, this morning Home Depot reported the best quarter of any major retailer relative to expectations, with same-store sales up 5.5 percent versus the 3.9 percent that Wall Street was looking for. So much for the shortfall thesis. That makes this stock exhibit A in the here and now for why people sell winners."
The tech sector is on fire, with semiconductor stocks seeing major gains almost every day, but Jim Cramer noticed that one name has been lagging behind the rest: Qualcomm.
"Here's a company that's in the middle of acquiring longtime Cramer-fave NXP Semiconductors, a terrific play on the internet of things and the connected car that my charitable trust owns, but Qualcomm's stock has just been a total dog," the "Mad Money" host said.
A key player in the telecommunications space that provides chips and other equipment to various smartphone makers, Qualcomm has seen its stock go down 15 percent since the start of 2017, while the rest of the Nasdaq 100 rallied 17 percent.
To figure out whether Qualcomm's stock can break out of its rut, Cramer turned to the charts of technician Tim Collins, his colleague at RealMoney.com with a strong record on predicting technology stocks' moves so far this year.
When it comes to banking, Social Finance Chairman, CEO and co-founder Mike Cagney wants his company's "members" — not customers — to feel like they are part of a community that helps them with everything from their careers to their money to their relationships.
That's why his fintech, commonly known as SoFi, is disrupting the financial services industry, a trend Cagney does not see ending anytime soon.
"I think what's going to happen is the banks are going to move towards our model over time. And so we certainly don't have the hoovers to expect that we're going to change all of banking, but we are going to drag them into a different kind of service model and one that's a lot more aligned to the customer," he told Cramer on Tuesday.
Cagney explained that this alignment with the customer is the key to what makes SoFi so popular with its growing member base.
Finally, Cramer sat down with Sheryl Palmer, the president and CEO of Taylor Morrison Home Corporation, to hear how the home construction and real estate space is faring in what feels to many like a refurbished economy.
"I think what we're seeing within the industry and within the consumer [is] that they are feeling good," Palmer told Cramer on Tuesday. "We're finally starting to see some income growth. They're not looking over their shoulder. They're feeling good about their personal balance sheet. And that's starting to show up within our industry."
And as business leaders hold their breath ahead of what the new administration promises will be beneficial corporate tax reform, Palmer said that it would unleash a series of opportunities for her company, which pays very high taxes.
"I think we continue to be opportunistic in the land market. I think we continue to invest into the business and invest into the growth of the business – the people, the technology, training. We'll look at our debt profiles. We'll look at M&A," she said.
In Cramer's lightning round, he rattled off his take on some caller favorite stocks, including:
Celgene Corporation: "You doubled your money? We sell half, play with the house's money, and let it run, because I think Celgene's prospects are being underestimated by the stock market."
Pennsylvania R.E.I.T.: "You know, this is the kind of shopping mall, strip mall thing that everybody's worried about, so I am not going to be able to defend it. This is precisely the kind of thing where people are saying, 'Whoa, I'm nervous,' so therefore I'm nervous because there are some very good people who've looked at these things and think that this kind of mall that they have – and I know some of their malls – [are] not what you want in your portfolio."
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