Jim Cramer decided to get his hands dirty, digging into the Dow Jones industrial average to figure out if the move to 20,000 was justified.
As of this point in earning season, 15 Dow members have reported earnings. Of the 15, Cramer found at least 13 with numbers that indicate the rally is the real deal.
« This move is not alchemy, it is not animal spirits. It is the earnings, which is the best reason to rally, » the » Mad Money » host said.
Cramer was particularly impressed with JPMorgan , which just delivered the best quarter it has ever reported, came in at number 8. On virtually every metric, the company simply has no peer, Cramer said. Yet the stock is still cheap at only 13 times earnings.
Cramer is bringing back the tried and true method of « riding the tiger » for Micron , Seagate and Western Digital .
The phrase « Riding the tiger » refers to investors buying a wild, fast and ferocious stock— riding it until they get to where they need to go, then selling it before they get bitten.
« Few stocks embody that wild ride better than the commodity semiconductor names and disk drive makers, » the » Mad Money » host said.
These stocks tend to be the biggest boom and bust stocks on the market, with dramatic moves up and down.
« When these cycles are in the sweet spot, as they are now, you are riding a turbo-charged tiger. It doesn’t matter who is president, as long as there is no new capacity, these stocks will keep roaring, » Cramer said.
Cramer considers Disney as one of the most controversial stocks in the market. Now that it has finally climbed back to $108, however, he said it has more room to run.
« It never should have traded down to the $80s in the first place, which is why I regard the stock’s rebound back to $108 as being simply the first leg of a longer-term rally, » he said.
Disney’s stock peaked in the summer of 2015 at $120. Yet investor worries that cord-cutting could cause Disney’s ESPN property to lose subscribers sent the stock tumbling, hitting $86 last February.
With OPEC cutting production and Trump’s energy initiatives, Cramer also thinks 2017 is going to be a great year for the oil industry, especially oil service plays and pipeline operators.
Core Laboratories uses its technology to analyze rock and fluids in oil reservoirs in order to help clients determine where to drill and how to best increase production. Thus, more drilling means more business for Core Labs.
Cramer spoke with Core Labs CEO David Demshur, who confirmed the optimism in the oil patch.
« The energy complex is tight and it gets tighter. Energy prices go higher, activity levels go higher. Core Labs stock price goes higher, » Demshur said.
In the lightning round , Cramer provided his opinion on a few stocks from callers:
B ox : « I thought Aaron [CEO] did a great job in the last time he was on. I said buy it, it was at $14. It’s at $17, I think it goes to $20. »
Chemours : « That one has already left the barn. I’m way too late on that. You had to buy it in the single digits. «
