In this market, investors should opt for individual stocks instead of exchange-traded funds, which often lump together shares of companies with conflicting trajectories, CNBC’s Jim Cramer said Tuesday after a turbulent trading session.
Using the technology sector as an example, the “Mad Money” host outlined the crosscurrents making the group particularly “complicated.”
Apple’s stock has been dragging a lot of tech stocks lower on iPhone sales worries, and shares of AMD and Nvidia have plummeted on confusion over demand for some of their semiconductor products.
“I can’t in good conscience tell you to ‘buy tech’ here, but I can tell you to buy some specific parts of tech,” Cramer said. “The data center, the cloud, PC, security, autonomous driving — they are all very strong. This is why you pick individual stocks rather than wasting your time with sector-based ETFs, because there are plenty of winners out there.”
How to play this ‘treacherous’ market
Between the mixed messages on U.S.-China trade and concerns about an economic slowdown, day-to-day stock-picking is becoming very challenging for the average investor, Cramer acknowledged on Tuesday.
“We’ve got to call a spade a spade. This market isn’t just volatile, it’s treacherous,” he said after yet another wild trading session on Wall Street. “I don’t want the treachery, which is not going to go away, to get to you. Use it to your advantage.”
The best way for investors to take advantage of the swings is to ignore them altogether, Cramer said. Instead, he suggested focusing on long-term themes “that hold up through this madness” because they aren’t tied to China or the welfare of the broader economy.
Click here for his recommendations.
Cronos vs. Canopy: Who’s winning out in cannabis?
Tobacco giant Altria Group’s investment in cannabis company Cronos Group may have been a smart move for the cigarette maker, but Canopy Growth Corp. remains the best investment in the cannabis space, says Cramer.
“Even with Altria investing in Cronos, I believe that Canopy Growth remains the best way to play the Canadian cannabis market,” Cramer said Tuesday.
Altria announced its $1.8 billion investment in Cronos on Friday. The companies cast the deal as mutually beneficial, with Altria getting an edge in Canada’s newly legal cannabis market and Cronos being able to expand more quickly and get ahead of U.S. regulatory hurdles.
But even though some Wall Street analysts embraced the deal, with one calling it a “unique entry into cannabis” for Altria, Cramer said Canopy Growth’s scale gives it a significant advantage over Cronos. Canopy has the added advantage of a multi-billion-dollar infusion from U.S. alcohol producer Constellation Brands, he noted.