[CNBC Television] Jim Cramer: It’s worth keeping new money ’on the sidelines’ until the stock sell-off ends
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“Mad Money“ host Jim Cramer said he’s remaining cautious on the stock market until the issues causing sell-off start to resolve. Subscribe to CNBC PRO for access to investor and analyst insights:
CNBC’s Jim Cramer said Tuesday he’s remaining largely cautious on the stock market until he sees tangible signs that the weakness is coming to an end.
“The sell-off will eventually right itself,” the “Mad Money” host said. “I just think it’s worth waiting on the sidelines with new money until we figure out how things can turn around, or your favorite stock gets clobbered to the point where it’s too cheap to ignore, like the brutal meltdown in Micron after the close.”
Cramer said there’s six main issues contributing to the weakness on Wall Street, including inflation that appears to be more sticky than the Federal Reserve initially projected, elevated natural gas prices and disruptions to the supply chain.
The other three, according to Cramer, are the coronavirus discouraging people from returning to the workforce, uncertainty around the proposed infrastructure bill in Congress and the semiconductor shortage.
“The idea that everything will continue to be awful, that all six of these dice rolls will come up snake eyes, that’s too easy. Something will go right with one of these — it almost always does,” Cramer said, after the Nasdaq Composite sank 2.8% in its worst session since March. The Dow Jones Industrial Average fell 569 points, or 1.6%, while the broad S&P 500 slumped 2%.
All three major U.S. equity indexes are firmly in the red for the month of September.
“At this point, it’s only safe to buy the stuff that’s been completely mauled or could be coiled springs,” such as these four high-growth tech stocks, Cramer said. “My charitable trust, we’re only touching stocks that have lost 10% of their value in a very short period of time. We did some buying today. We’re not selling. Why? Because we’ve got plenty of cash, and we like it when the market comes down so we can put it work.”
Despite believing the market will eventually turn around, Cramer said he understands it’s a challenging moment for some investors given the market’s persistent strength since March 2020′s pandemic-driven low.
“If you can’t take the pain, it’s not too late to sell something, but please only on a bounce, as long as you’re nimble enough to get back in at a lower level,” he said.
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