Stick to Profitable, Recession-Resistant Stocks to Avoid a “Crisis”
CNBC’s Jim Cramer reminded investors to hold profitable, recession-proof stocks rather than concept stocks after major tech stocks fell on Thursday.
He noted that while stocks have taken a hit, they are still “great” and stand out from the uninvestable names for two main reasons.
Investable stocks “have a definite downside because of that dividend and their lack of interest rate sensitivity. … The other reason: they are mature companies that have been through recessions before and are coming out of them even stronger” , did he declare.
“If you own the tangible stocks I’ve highlighted, you have the ability to buy more into weakness. If you’re stuck with the conceptual stocks I’ve warned you about, you have a crisis,” he added.
Some of the tech names that have dropped include Meta, Amazon and Facebook parent Apple. The rest of the market also fell as investors eagerly await May’s consumer price index to shed some light on the state of inflation.
Cramer took advantage of the day’s declines to remind investors of his mantra for holding stocks.
“As I’ve said many times, you want to own companies that are doing real things and doing real things and making profits in the process, with relatively cheap stocks and good dividends or buybacks,” a- he declared. “This group is…losing money, but it’s stuck.”
Disclosure: Cramer’s Charitable Trust owns shares of Apple, Amazon and Meta.