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Hey, I'm Kramer. Welcome to Mad Money. Welcome to Creamerica. Others want to be friends , I'm trying to save you some money . My job is not just to entertain you , but also to teach you . Call 1-800-743-CNBC or tweet me Jim Cramer . We are at a crucial moment where everyone is asking the same thing .
Why should I own actual stocks? Unless you own a lot of oil stocks, fertilizer stocks, and some chemical companies, you will face a huge loss. We may be near all-time highs , but to be honest , many stocks have fallen heavily, and more importantly, there is a possibility of further losses if the war continues.
So, on a day when the Dow fell 739 points, the S&P fell 1.52% and the Nasdaq fell 1.78% due to increased oil prices caused by the war , we need to know why it makes sense to own stocks at this time. I think I have some good reasons . The first reason, believe me, is that everyone thinks like you . Since Iran has decided to push oil prices to $200 per barrel , they see no way out of this, and they want to profit by firing missiles at ships of unfriendly countries and closing the Strait of Hormuz.
They are using cheap drones to target the oil infrastructure of Gulf countries . These oil facilities and refineries are very large and they are not built with defense systems . They are completely in danger . We know that the Iranians have more drones than their allies and that they don't care about creating new enemies.
These drones are not manufactured in huge factories and are not easy to find. So, if the price of oil is $200 , they are the only ones who can benefit . The strait is closed to all but their traffic . Could there be a better situation for Iran ? In addition, time was in their favor. The longer this takes, the more money they get as long as they keep using drones.
The only thing they can't do is make nuclear weapons, but who needs nuclear weapons when their conventional weapons are holding the world hostage economically ? I just mentioned a list of things that everyone knows. This is like a list to scare someone out of the market. This is enough to short the market for many hedge funds, especially funds that have no chance of making money from oil and are facing severe criticism from their clients.
So, what's the point of betting against the group right now? That seems like a real advantage to me, since the more the market falls, the more oversold it becomes. It's already at minus 7.5 on the SP oscillator I follow , which I've rarely seen in the past few years . Especially when everyone is thinking the same way , there is a greater chance of a spectacular snapback .
Think about this. Do you think President Trump is unaware of these dire circumstances ? I will admit that this war was not planned well , but the situation is clear now . Do you think he wants to have a bear market on his hands ? Remember how it changed the averages when he said the war was almost over .
Trump's style has been very clear during this presidential term . He is willing to make tough decisions that will send the market crashing , but if it hurts too much, he is also willing to change plans and show flexibility, just as he did with tariffs after last year's Liberation Day meltdown. That means there is a possibility of reaching an agreement .
Perhaps this could happen like this, through a secret route through Qatar, which is somewhat friendly with Iran. This could give the president a chance to claim victory. If Iran stops attacks on oil infrastructure and allows ships to pass through the Strait of Hormuz, we will stop bombing in return, but if Iran continues to develop nuclear weapons, it will start again.
It works. President Trump, who has weakened Iran into a formidable military power, could declare victory , and oil prices would fall so fast that you might as well borrow to buy stocks , but I don't like that at all . He wants the war to end for now . He needs an excuse to claim that he is quietly working behind the scenes to reopen the strait .
Do you know what's happening? That may be enough. Unfortunately , the Iranians do n't seem ready for negotiations here. Honestly, they have a new Supreme Leader , and he's out for revenge . But if Iran is not ready for a deal, is there anything our government can do about this other than accept permanently increased oil prices?
Remember one thing , I want this to be resolved diplomatically . I do not support a military solution that would cause mass destruction and deaths of innocent Iranians . I don't want to see another Operation Linebacker for Iran . But listening to the words coming from Defense Secretary Hake Smith, he certainly has the spirit of Richard Nixon .
And I can't say that Trump will rule it out. If the Iranians don't come to talks, that dramatic increase is the only way the president can restart this trade. And I think it's going to get much worse and worse . No one should want that. I definitely don't want to . However, I am not a military strategist .
I am a stock strategist. What I do know is that this war will never end. We don't know when it will end. We don't know how it will end. But at some point it will definitely end. If you don't have stocks before the ceasefire, you could lose money . Some non-oil stocks are rising here , that's true. But they are not enough to compensate for that loss.
However, imagine what it would be like if you weren't in the market when the war ended and oil prices fell and stocks suddenly rose. Look, it would be great if you could sell everything today, right now . Avoiding the losses that would be incurred in the coming days and re-entering the market one day before the end of the war .
That would be ideal. But, we don't know when the war will end. If someone in the White House is willing to engage in insider trading, they might be able to do so , but it's illegal for anyone to do so . But for most of us, we are groping in the dark . I don't like that . Let me tell you something else.
It is true that if oil prices increase further, we will face many difficulties in this country. But, the economic recession from 2007 to 2009 will not be as severe, despite what many commentators have said, which is not true. If the price of a barrel reaches $140 , it could increase by about $1 per liter from what it is now.
Okay, I know this isn't that good. However, we can tolerate this. We are not facing a situation that requires a massive solution here . If the price of oil reaches $200, our economy will be hurt , that's true, but it's not a life-threatening threat. Despite the constant criticism, the financial crisis could have been much worse than this.
Did you know that if you were in the market from 2000 to 2007-2009, it took you 5 years to get back to normal? Okay, that may not be such a great thing , but once you get back to normal, the result will be amazing . Again , even taking into account the damage to private credit, what we see now is less than what we faced back then.
So, let's stay in the market. The last thing to say is . Remember that even though the current situation is scary , the right decision is to go with the market in almost all situations . It must happen, as there will be a better chance of recovering your losses when peace is restored. Trust me, if you sell everything, you'll regret it later, watching the market rebound without your involvement .
And there are a lot of good things that are going to happen . That rebound could be quite amazing. Let's go to Bill in New Jersey. Bill. Hey Jim, boo. Booya, Bill. How are you? Let's get straight to the point . I have 1,500 Pepsi shares that I bought in 2008 for $40 . Do you know where it is today? About 160.
I want to know what's going on with them? Is this the right time to sell them? No, no. First of all, Bill, thank you for this call. This is the real point of what I am saying. I do n't like selling good stocks because of short-term concerns. You are getting 3.5% return . CEO Ramon Laguerta is doing a great job.
You have the best food and beverage stock, don't sell it. Now, let's go to Miguel in Massachusetts. Miguel. Hi Jim, how are you? I'm fine, Miguel. How are you? I feel very good. Progressive Insurance. Should you buy it, keep it, or sell it? I don't have much faith in these insurance companies, especially that policy .
Listen, if you want an insurance company, look at Berkshire Hathaway. They have a gecko . It's a better, more diverse way to be in the insurance industry. Chubb is also a better company if you want to look. Let 's go to Dwayne in California. Dwayne. Hi Mr. Kramer. I've been listening to your program for ages, and this is the first time I've called.
Very happy. I am hey. I really like your show . My question is about Bank of America (BAC). What do you think? Well, I think Bank of America is an excellent bank . I think financial stocks are down pretty badly right now . Could Bank of America, at 47, fall to 40 ? Maybe. All financial stocks are under pressure , partly because of this variant, and partly because of private credit.
I'll stay with Bank of America. I believe that a company like this with 10x revenue will give you good returns in the long run . Think long term. You must do that. Let's go to Ian in Florida, please. Ian. Oh, yes. Jim, how are you? I'm fine, Ian. How are you? I am very well. Thank you. Been listening for a long time, a member of the Happy Club, for sure.
Oh, very good . Thank you. Jim, I want to ask about a semiconductor stock whose CEO I think is great , I really like her. It is arguably the second best company in the industry after Nvidia. What do you think about investing in AMD ? Okay. This is a very interesting point, because we have a large stake in Nvidia, so I do n't think we should own AMD, its biggest competitor.
But, you know what? If I did n't have Nvidia, I would definitely buy AMD. This is a big fight, and Lisa Su is an amazing person. And thank you. Thank you for your kind words . Now, even though the current situation is scary , remember , in almost all situations , the right decision is to stay in the stock market and not try to get out and go back again .
That is very difficult. Tonight on ' Mad Money,' a new company that will soon join the S&P 500 gets a big opportunity. I'm talking to the CEO of Momentive . Wow. I am learning more about his company and the industry . Drones have fundamentally changed the corporate sector as we see it. So, how is Shield AI playing its role ?
I am checking with the CEO . When the market is volatile , I like to seek expert advice. Don't miss my conversation with Lloyd Blankfein, former CEO of Goldman Sachs . So, stick with Kramer. Don't miss a moment to Kramer #MadMentions. Email Jim at [email protected] or call us at 1-800-743-CNBC. Did you miss something? Visit madmoney.cnbc.com.
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