It’s a bad idea to turn your portfolio into a religion, Jim Cramer warned his Mad Money viewers Wednesday, as he sounded off against the “true believers” that refuse to sell their favorite assets at any price.
This “messianic” trading began earlier this year when the Reddit traders piled into GameStop (GME) – Get Report, vaulting the stock higher and higher until finally, the hedge fund short sellers were forced to relent. These same traders hoped to catch lightning in a bottle a second time with AMC Entertainment (AMC) – Get Report and a handful of other stocks. When those efforts failed, traders then moved to other asset classes like NFTs and cryptocurrencies, ending with today’s massive debut of Coinbase Global (COIN) – Get Report.
Read: Coinbase Closes 31% Above Reference, 14% Below the Open
Cramer reiterated that while he likes the stock of Coinbase, he’s not willing to sell everything else to go all-in. He said the lack of sellers in Coinbase is worrisome, especially with the threat of sustained inflation beckoning. If the prices of oil, lumber, plastics and other commodities don’t relent soon, these high-multiple stocks will get pulverized.
Stocks are only pieces of paper, they shouldn’t be worshipped, Cramer concluded. You can’t just focus on the stocks you love and ignore everything else around you. Investing takes discipline, and that means taking profits and avoiding the urge to be greedy.
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IPO Update
After today’s high-flying debut of Coinbase, Cramer circled back to many of last year’s hottest IPOs to see if they’re worth buying now that the hype has subsided. After roaring out of the gate, shares of Ncino (NCNO) – Get Report fell to lows of $57, which was the best time to buy, according to Cramer. He recommended the stock under $65.
Cramer felt the sweet spot for Snowflake (SNOW) – Get Report was below $190 a share, and below $43 a share for JFrog (FROG) – Get Report.
Investors should avoid the stock of American Well Corp. (AMWL) – Get Report, even at $17 a share. Cramer was also not a fan of Asana (ASAN) – Get Report nor Unity Software (U) – Get Report, preferring Roblox (RBLX) – Get Report instead. He also steered investors away from Palantir (PLTR) – Get Report and DoorDash (DASH) – Get Report amid rising competition.
GoodRx (GDRX) – Get Report remains a buy in the low-$30s. Cramer would pay a maximum of $75 a share for Lemonade (LMND) – Get Report, which represents 50 times sales. He remained a huge fan of Airbnb (ABNB) – Get Report for its disruptive technologies.
Worst SPAC deals
When a SPAC company says something that’s too good to be true, it probably is, Cramer told viewers, as he counted down the worst SPAC deals in the electric vehicle sector.
Coming in at No. 5 was XL Fleet (XL) – Get Report, the electric truck maker that made lofty sales forecasts, only to slash them after being outed by a research firm.
At No. 4 was Canoo (GOEV) – Get Report, the EV maker that promised a modular design, consumer vehicles and a subscription sales model. After the company’s CFO resigned, the company canceled all three of those plans.
No. 3 was Lordstown Motors (RIDE) – Get Report, the Cinderella story of an abandoned General Motors (GM) – Get Report factory repurposed to make electric vehicles. After declaring thousands of pre-orders, Lordstown later recanted.
Coming in at No. 2 was Romeo Power Technologies RMO, a next-generation battery maker similar to QuantumScape (QS) – Get Report, or so we thought. After forecasting $140 million in revenues for 2021, the company later revised estimates lower by 80% to just $18 million to $40 million.
Finally, the worst EV SPAC of all was Nikola Corp. (NKLA) – Get Report, the electric truck maker outed for rolling its prototype downhill to simulate running on its own power.
Executive Decision: PAR Technology
In his “Executive Decision” segment, Cramer spoke with Savneet Singh, president and CEO of PAR Technology (PAR) – Get Report and Ron Shaich, managing partner at Act III Holdings and former CEO of Panera Bread, which today announced a major investment in PAR.
Shaich explained that for large-scale restaurants, the holy grail is one unified software platform that can manage it all, and that’s what PAR Technology has created. PAR’s solution replaces point-of-sale systems, delivery systems, customer systems and ordering systems, with everything talking seamlessly to the most important part of the restaurant, the kitchen.
Singh added that after years of stagnation, he focused his efforts over the past year on attracting and retaining the best talent and allocating the capital they needed to speed their development. The result has attracted the attention of Shaich and others, who see the potential of an enterprise-class system.
Shares of PAR have risen over 400% over the past 12 months.
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Apple: Own it, Don’t Trade it
In his “No Huddle Offense” segment, Cramer took issue with Apple (AAPL) – Get Report analyst Tony Sacconaghi, who recently cast doubt on the company’s prospects.
Cramer said he totally understands Sacconaghi’s technical analysis on Apple, comparing its sales to last year and looking for that “next big thing” to drive growth. But what Sacconaghi lacks, Cramer said, is understanding that for millions of people worldwide, they simply cannot live without their Apple devices and services.
Cramer recalled how just the other day he thought he had lost his Apple watch. The mere thought of a lost watch sent him into a panic. “Apple’s products mean a lot to me,” he said, which is why investors need to own Apple and not try and trade the daily highs and lows.
“Own it, don’t trade it,” remains his advice of the day.
Lightning Round
Here’s what Jim Cramer had to say about some of the stocks that callers offered up during the “Mad Money Lightning Round” Wednesday evening:
Keysight Technologies (KEYS) – Get Report: “I really like this one. It should be higher.”
Amarin (AMRN) – Get Report: “This is speculative and should only be bought as a spec.”
Paysafe PSFE: “I believe in this company. With shares down 10%, I’m a buyer.”
Xilinx (XLNX) – Get Report: “I can’t wait for the acquisition to close. I like it.”
Humanigen (HGEN) : “You want Regeneron Pharmaceuticals (REGN) – Get Report.”
TransMedics Group (TMDX) – Get Report: “This is a very hard problem to solve and I don’t think it’s going to be a profitable business anytime soon.”
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At the time of publication, Cramer’s Action Alerts PLUS had a position in AAPL.