It looked to Jim Cramer on Wednesday that someone forgot to tell Donald Trump about the Trump rally.
The averages quickly fell after Trump’s press conference in which he called for more price competition for drug companies. While the market managed to shrug off the comments by the close with technology stocks leading the way, it was a cause of concern for Cramer.
« I bet Health and Human Services is going to do something about this whipping boy that will involve substantive rollbacks before this episode is over, » the » Mad Money » host said.
Cramer said he has known Trump for years, and he is « not really a stock guy » and has never been that interested in the market. It was clear to Cramer that Trump’s love was always real estate.
However, Cramer reminded investors that just because Trump is pro-business, that doesn’t necessarily mean he is pro-stock market. In his world, he thinks if business does well than everyone does better. And he is OK with knowing that some industries will do worse if he believes they should be punished.
Trump has also made his intention clear to repeal and replace the Affordable Care Act when he takes office. The problem is that no one knows what he will replace it with.
« We are looking at a very confused environment for the health care sector, especially the health maintenance organizations that are so heavily impacted by the law, » Cramer said.
It could be impossible to predict what could happen to health care providers like UnitedHealth , Aetna , Cigna and Humana , along with the millions of people who will lose insurance coverage and their subsidies if Obamacare is repealed.
The only winner of the group worth owning is UnitedHealth, Cramer said, even as it has run 14 percent since the election. UnitedHealth has already removed itself from the health care exchanges. Other competitors are still participating and even profiting from the exchanges, which makes them more vulnerable of the repeal actually occurs.
Pajama traders that used to plague the stock market opening every morning have mysteriously disappeared since Election Day, and Cramer was determined to find out why.
The term « pajama trader » was coined by Cramer to refers to traders who control the opening of the stock market based on extraneous data, like the futures, and news events from overseas.
Yet, it seems that the volatility caused by these nefarious traders for years has simply dissipated. They were right there distorting the market open during the Italian bank restructuring, a struggling financial system and Brexit. Now they are gone.
« We are all for the better for getting rid of this artificial, silly, infantile, immature trading, » Cramer said.
Cramer is always a fan of break-ups that unlock value for shareholders. Even better, when a company creates a new spinoff as a standalone company, it’s always worth him taking a look.
AdvanSix is the new spinoff from Honeywell that is the manufacturer of nylon 6 resin, chemical intermediates and ammonium sulfate fertilizer.
« I could see how a fresh spinoff like AdvanSix might seem enticing, but at this point, I think it’s too speculative to recommend after such an epic run, » Cramer said.
However, Cramer does like AdvanSix’s markets amid the current economic environment, which makes him like the stock. He just wants it to come down a bit first so it is less of a risky play.
The NFIB Research Foundation issued a report this week that indicated that small business optimism just had the biggest increase since 1980, when Ronald Reagan was elected.
If this is an indication that companies are going to expand, Cramer said that means they must invest in new technology. Pegasystems is a software company that helps to develop custom applications for marketing, sales, customer relationship management and business process optimization.
Pegasystems’ client list includes AIG, PayPal and Kraft, among others. Cramer spoke with Pegasystems founder, chairman and CEO Alan Trefler on what makes Pega unique from the competition.
« We have three core technologies that we have put together into one unified platform. Very different from our competitors, which have bought lots of stuff and franken-stacked them and stitched them together, » Trefler said.
In the Lightning Round , Cramer gave his opinion to a few stocks from callers:
Berkshire Hathaway (B Class) : « If anything, I am interested in buying more. I think the stock is incredibly undervalued. »
Westar Energy : « A good utility company. I happen to favor Dominion and my charitable trust name American Electric Power. «
