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Watch Jim Cramer's breakdown of the stocks 'that are no longer working' - YouTube
Channel: CNBC Television
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my mission is simple to make you money
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i'm here to level the playing field for
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all investors there's always a bull
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market somewhere and i promise to help
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you find it mad money starts now
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hey i'm kramer welcome to mad money
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welcome to craig america i'll be with my
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friends i'm just trying to make you some
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money my job is not just entertaining
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but the educating teacher so call me at
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1-800-743cmc or tweet me at jim cramer
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going to the fed meeting let's talk
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about what we've lost
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the groups that are no longer working
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the ones that need to turn around if
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we're ever going to get a sustainable
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rally and out of this miserable period
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these stocks are former leaders that
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have been taken out and shot
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just shot endlessly
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even as the fundamentals are often in
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tremendous shape
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not good
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not great shape
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fabulous shape
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after captivating the market for ages
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they've become millstones around the
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necks of investors everywhere and that's
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how you end up with a situation where
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you had a day like today
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kind of a somber day not a day of real
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interest not a special day dal up 67
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points s b gaining points worth eight
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percent nasdaq hinging at 0.22
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and it actually counts as a tremendous
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session a huge win for the bulls that's
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where we are now
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the first group of dethroned leaders
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let's just rip break throw up the meme
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stocks
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the meme stocks
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i say this because these people stick by
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me through thick and thin and i love
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them
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i i regard myself as the leader of the
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meme team
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not
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all right these were exciting as long as
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they lasted i mean a little less than a
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year ago amc entertainment was a 63
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stock now it's 15
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still a victory versus where trade at
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the beginning of the pandemic but unless
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you got in early this one's crushed you
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that's what i was trying to help by
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telling people maybe at the 60 level
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wasn't so good but i should have kept my
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mouth shut the next meme name gamestop
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powerful backer chairman ryan cohen but
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the problem here is that the market
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proceeds that the gaming cycle seems to
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be winding down availabilities become
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much easier for all sorts of consoles
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and most people rather buy their games
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over the internet i went to the website
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today to see what the top brands were
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the website didn't really work yeah i
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get that
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anyway throughout the gamestop frenzy
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the stock had a legitimate prop the new
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hardware was flying off the shelves and
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you couldn't play i couldn't find a
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playstation 5 for love or money but now
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they're plenty full and that means
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there's much less reason for anyone to
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show up at a gamestop remember to those
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who disliked me for saying this i
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suggested you go take a classified ad
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out in a newspaper
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because jimmy chill is done with your
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moronic scatological tweets and hopes
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you never come back from your permanent
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intellectual vacation the other meme
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names never had longevity amc gamestop
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the reddit crew loved that corsair
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gaming that that guy couldn't have they
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tried to run and gun wendy's but it said
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six right in their threw a bacon
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in it right in their faces and then it
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came down to amc in games up they were a
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two-stock club with the collapse of
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robin hood's stock making for i think
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what's called a fitting coder uh guys
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enjoy talking to yourselves no one else
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is ever going to listen
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then there's housing now we thought we
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had something goldman this is a
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leadership group oh i love them right
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because a lot of stuff goes into housing
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punches above its weight but the home
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builder stocks not the companies
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the stocks have been crushed as mortgage
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rates have risen to 5.5 here's what you
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need to know well these stocks might
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look cheap as so they're trading right
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now four or five times earnings that's
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most likely because the earnings
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estimates need to come down perhaps
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organically housing affordability is the
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worst it's ever been that's bad they
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can't like that in the first quarter
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well let's say you got double-digit
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price appreciation and 70 of the amer of
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the metro markets in america 70. the
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median single family home price has
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risen nearly 16 year-over-year up to 368
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000 according to the national
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association of realtors that is just way
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too hot that's smoking out that's not
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acceptable the fed will have to crush
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these figures because housing inflation
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is devastating and look even though the
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home building stocks have been gutted i
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doubt they fully reflect that's
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how bad things can get the best housing
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analyst from i know is element
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associates so i went to alan ratner he's
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one of their associates and he pointed
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me toward book value data which showed
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conclusively that price to book value
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models tend to trough at the end of a
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rate cycle not anywhere near before then
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we're at the very beginning
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some housing stocks continue to fall
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even after the titan cycle was over
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ryden also mentioned that on the average
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home builders saw their price earnings
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multiples shrink by 27 from the
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beginning of tightening cycle to the end
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there could be some intermittent rallies
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during these periods but they all end up
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badly unless the fed stops raising rates
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that's exactly what you'd expect who
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wants housing exposure or mortgage rates
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are on the rise and a quarter of the fed
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announces a rate hike the home builders
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have underperformed the s p 569 percent
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of the time finally don't trust anything
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that trades at four to five times
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earnings that's called a value trap all
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right so housing stocks
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oh i forgot
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that's because i'm friends with the mean
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people next how about the financials we
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made a stab at owning the banks order
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this year for the charitable trust these
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stocks soared in january and wall street
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thought the fed could raise interest
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rates ever so gently without scaring the
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consumer that assumption is going out
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the window as investors increasingly
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feel that we're headed for a hard
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landing we should have sold every single
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one of them
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in a hard landing the banks get stuck
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with lots of bad loans that offset the
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easy gains to make from your deposits
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banks had a refund relief value today
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that's all it was by the way i can
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continue to think that the consumer is
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so strong that i don't have to worry
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about it but
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minority
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fourth the software is a service or
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software's or whatever stocks spent your
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sorting in the stratosphere stratosphere
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fueled by their fabulous revenue growth
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but when the fed declared war on
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inflation last november this whole group
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got crushed in a way the endless cloud
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ipos and spac stocks were the most
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inflated part of the economy and they
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crushed the market in the end hey you
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know fang fizzle too
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it wasn't just because of netflix it's
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also good amazon so google plus goes to
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facebook that's pretty much every letter
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i never said the single worst quarter of
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the majors and it dragged down every
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other company that was trying to do
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streaming or gaming that's not done it's
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still doing it
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google what a stench google's coming
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back as people realize there was more to
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the quarter than youtube's sweet
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distance out of europe but i'm a
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standard i'll terrible at amazon quarter
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was i read it over again last night i
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said i'll just read it over maybe i
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missed something no
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uh hey meta facebook's finally put up
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some decent set of numbers uh but that's
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after the stock plummeted back to pre
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pandemic levels i do think that at this
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time next year we'll say what was tick
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tock maybe a communist chinese invention
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because we have reels fang my favorite
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acronym it died
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it died this quarter
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hey i used to write a race for a
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living i know when something's dead
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oh we used to have the semis remember
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the semis they were great leaders with
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nvidia being the greatest of all time
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and amd coming in close second but they
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too have been crushed by the decline of
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gaming even as no one in the video game
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industry even thinks that's the case now
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i wouldn't believe it either except
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microsoft did say it was down high
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single digits who wants to disc with
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microsoft now i saw amd's numbers
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tonight and i love them but there are so
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many naysayers out there who knows if
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they will stop selling even on great
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numbers perhaps the fin the most
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horrendous fall of all was the
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e-commerce hit and saturation it wasn't
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all by amazon the great e-commerce
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deceleration has hurt everybody from the
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box makers to fedex ups we know that
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shopify is down nearly 75 from its highs
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during this period etsy struggling to
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find its old self they just aren't like
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anymore hey same thing goes for the
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adjacent fintech names like square a
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firm don't look at a firm no matter what
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you do do not look at the firm finally
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the ipos and smack stocks did us in even
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though there's been a 71 drop off in
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space wins to begin in 2022 these new
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deals stopped up a lot of capital that's
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now being drowned in the toast and
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lemonades and by the way that's not
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toast except toast is toast but that's
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not toast and that's not lemonade okay
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those are companies and oh unity
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software which actually i kind of like
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long-term roadblocks i like them too
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doesn't matter
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just ipo roadkill plain and simple some
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of these are genuinely good companies
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but their stocks are totally toxic did
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these fallen ipo and spac names slay the
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bull
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no they were just the wretched excesses
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of an already bygone era that we wish
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the fed had stopped but it was kind of
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helpless to do so it had to be the sec
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and the brokers
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and they never did it
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now anyone who watched me this morning
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knows that i am sick and tired of the
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critics who keep trying to belittle or
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humiliate jay pal the fed chief who will
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be on tv tomorrow who arguably did more
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to save us from a pandemic induced
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depression than anyone else in the
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government
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the act like pal should have known
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omicron wouldn't require lockdown we'll
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tell that to communist china apparently
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they didn't get the memo but here's the
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bottom line
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j-pal measures his words he wants to
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take the air out of everything i just
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mentioned okay and guess what if you
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look at the stock market sadly for the
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bulls but perhaps good for the economy
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and the country
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he's winning
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frank in california frank
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frank yes can you hear me you're rock
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yeah i hear you're pretty good even
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though my right hand is completely
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clogged because i flew with a cold
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what's up
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oh
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hey so i'm a first time caller and i'm
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calling about uh roku
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and i bought in at 63 i bought in again
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at 83. i watched it go up to
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490 or so
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come back down i think it's sitting at
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105
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now country and i wanted to know yeah
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i know anthony woods and his team are
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very uh positive on the stock but i
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wanted your opinion is it time to get
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out or should i hold on i you know what
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this is one of those names it's got hurt
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because it's also owned by kathy wood or
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she's viewed as her company um you know
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what look i think it's six or eight
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dozen another i mean if you go up 10
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o'clock down 10. there's absolutely no
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edge to owning roku right now because it
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has to do with streaming and people
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don't trust streaming let's go to
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bretton texas please brett
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hey my stock reports on the 17th of may
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and is expensive at 70 times earnings
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with many high multiple stocks getting
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punished this quarter even after
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reporting solid earnings is palo alto a
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buy into earnings well when it's the
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only segment left of this economy
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that has a tremendous demand simply
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because there's so many bad guys
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there's just i mean it is an incredible
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business because there's because the
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enemy is just so everywhere and that's
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why i like palo alto and i'm willing to
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pay up only
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for cyber security companies because the
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people who want to get into our machines
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and into our heads and our everything
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else are relentless and very smart
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stephanie in massachusetts stephanie
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booyah jim booyah stephanie
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i've loved your show for the past 12
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years wow
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thank you currently sells for 21 times
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earnings and has a 2.5 yield it just
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recently launched breakfast in canada
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however rising inflation is affecting
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the fast food industry and my stock hit
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a new 52-week low today going into
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earnings next week what are your
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thoughts on wendy's
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um i think wendy's ranks after
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mcdonald's and chipotle of the ones i
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want to own i think it's good i think i
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think chipotle's great i think
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mcdonald's is so loved by institutions
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that they just won't sell it no matter
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what happens it's one of the few stocks
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that are completely completely seen to
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be immune from selling and for that i
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frankly don't know why jay pal measures
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his words he wants to take the air out
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of everything i just mentioned and guess
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what if you look at the stock market
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he's winning
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this is our group that we've saved if
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that group can can can hold the line
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maybe others will too i'll make money
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tonight logitech hit a fresh 52-week
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load today so does this tech play have
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what it takes to connect with investors
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once again i'm checking in with the ceo
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then rockwell automation plummeted today
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after earnings i'm running through the
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numbers with the company's top brands
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and it is worrisome then airbnb reported
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at the bell so does the home rental
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kingpin deserve a home in your portfolio
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i like the numbers
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don't miss my exclusive it's david
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kramer
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[Music]
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don't miss a second of mad money follow
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at jim cramer on twitter have a question
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tweet cramer hashtag mad tweets send jim
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an email to madmoney at cnbc.com
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or give us a call at 1-800-743-cnbc
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miss something head to madmoney.cnbc.com
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shepard smith here thanks for watching
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cnbc on youtube
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