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The term "bear market" is starting to be used quite often, but it's no better to say that we are in a bull market when times are clear, said Jim Cramer to his Crazy money viewers on Wednesday.
The important thing is what to do when you see a bear, said Cramer.
He recounted a climbing trip several years ago, when he and his friends discovered a bear looting their camp. While the others were leaving, Cramer said, he was standing up, even going so far as to beat the bear by encouraging him to eat a bowl of M & M candies covered with hot sauce. True story. The bear took off and, said Cramer, he went the other way.
Cramer said that he was not saying that you could outrun a bear because you could not. Also, you can not let him eat all your food and hope it does not turn you on. You must remain calm and use your head.
Thus, after another painful and bearish day on the stock market, investors are more and more worried. But Cramer said that they should not panic but rather look for smart opportunities. In fact, he has three surefire ways to thwart bears … uh, sellers.
First, look for companies that are doing well. Some sectors and indices may suffer, but this can create short-term opportunities for high quality actions.
Take Home Depot (HD), for example, who has good business and a strong balance sheet. It is based on the redevelopment and repair of housing, not on the construction of new housing, the latter suffers from rising interest rates. If this stock was still north of $ 200, investors could justify selling. But less than $ 180 after such a good quarter? Not really.
Secondly, Cramer said, this selling pressure comes from two artificial catalysts: President Trump's tariffs and the Federal Reserve's interest rate hikes. Do your best to avoid the actions directly affected by these problems.
Finally, look for stocks that pay high dividends, but only do so because they have been unfairly punished. Cramer added that they also had to have excellent balance sheets.
Cramer and the AAP team integrate into CVS Health (CVS). Find out what they say to their investment club members and join the conversation with a free trial subscription at Action Alerts PLUS.
Executive decision: SVMK
In the Executive Decision segment, Cramer met Zander Lurie, CEO of SVMK Inc. (SVMK), parent company of SurveyMonkey.
When the company went public at $ 12 per share and quickly climbed to $ 16, Cramer felt it was too expensive. But after falling nearly $ 10 in October and making a profit earlier this week, he wanted to talk to management.
Cramer wanted to know: did the IPO give more publicity to SVMK?
The IPO was a great opportunity to introduce the business platform to companies, said Lurie. He explained that companies use SurveyMonkey not only to get feedback from their customers, but also from their employees. Things like they like the workplace, is it inclusive? These are important questions to ask, especially in a labor market as tense as this one.
The company also partners with Salesforce (CRM) to collaborate on product development and marketing initiatives for its customers.
Regarding the lack of profitability, Mr Lurie said that SVMK was an incredible cash generator. With this "super sticky customer", he explained that 90% of the company's revenue is based on subscriptions, while about three-quarters of next year's revenue will be accounted for or renewable from the previous year. here the end of the year.
This generates a lot of money and profits will eventually follow, said Lurie.
About the real money, Cramer recommends monitoring retailers who deny or have too much confidence in the impact of the rates. Get more of his ideas with a free trial subscription to real money.
Decision of the Executive: Six Flags
For his second executive decision segment, Cramer met with Jim Reid-Anderson, chairman of the board of directors, chief executive officer of Six Flags Entertainment (SIX), to understand why the stock had dropped 16% after the publication of its third quarter results.
Reid-Anderson said weather conditions were one of the main reasons for the company's disappointing results, in which earnings, revenues and attendance were below expectations. This did not help Six Flags publish results at a time when the market was breaking down.
However, Reid-Anderson pointed out that the company was about to achieve another year of record earnings and earnings, while paying a 5.5% dividend. Cash flow is good, international growth remains a powerful driver, and opportunities for improving US operations are multiple.
Yet investors sell the stock, apparently every year at this time. However, each time, the title reaches new records. What causes this seasonality, Reid-Anderson is not sure, but he thinks it's a good buying opportunity.
It has not commented on any information regarding an acquisition or agreement involving SeaWorld Entertainment (SEAS).
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