CNBC’s Jim Cramer on Thursday gave investors the green light to buy stocks of high-value companies that reported bad news, but still managed to keep their shares afloat.
“The lack of new stocks the moment you buy them, and the horrific declines in high-value companies, have coalesced to create an environment where Wall Street is willing to overlook some of the flaws. But some,” said the host of “Mad Money.”
“You’re free to overlook a few blemishes, and because stocks have been so crushed in anticipation of multiple rate hikes, you can be bold enough to buy a discounted product without much hesitation. I think we’re at that level. have achieved,” he added.
Cramer highlighted several instances where investors ignored “bad news from the textbooks” of a company, pointing out that shares of Nvidia, Microsoft and Salesforce all fell after reporting disappointing financial results or forecasts, but managed to recover.
Cramer said he believes Wall Street’s new forgive-and-forget attitude could be because IPOs fall by the wayside, while even high-value companies are seeing declines.
“We’re finally at the point in the stock cycle…where the insurers are no longer pumping out the bilge, these deadly IPOs that there’s no appetite for at all,” he said. “Enough money has been lost in the new, why go back – why not go back to the old?”
Disclosure: Cramer’s Charitable Trust owns shares of Microsoft, Nvidia and Salesforce.