Don't Invest Based On Trump's Tweets - Cramer's Mad Money (3/13/18)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday, March 13.

Cramer started the show by saying chaos in the White House may be routine but investors should not invest based on tweets from Trump. He blocked the Broadcom (NASDAQ:AVGO) takeover of Qualcomm (NASDAQ:QCOM) and fired the Secretary of State. "Can we take a step back for a moment? This is not a good way to invest, people. Your strategy should not change based on every other presidential tweet. Instead of focusing on every little thing from the White House, how about evaluating companies on their own merits? Too old-fashioned for you?" said Cramer.

The news of blocking the deal certainly came as a shock for the tech sector and investors are worried about other mergers being in question. "Look, there's China-oriented tech and non-China-oriented tech. You can have a smattering of both in a diversified portfolio, which you know I always preach, or you know what? You can just ignore Chinese exposure completely," added Cramer.

Cramer still wants investors to evaluate companies based on individual merits. All the companies that Trump had once singled out on Twitter - United Technologies (NYSE:UTX), Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT), are all much higher from where they were during the tweet.

"I am saying that if you have a diversified portfolio with some health care stocks, some banks, some consumer packaged goods stocks, some tech, then you won't need to re-position every time the fickle administration changes its view. Judging by the stock market's trajectory since the election, it's one that favors the bulls, not the bears," concluded Cramer.

CFO interview - Twitter (NYSE:TWTR)

Twitter had a good last quarter and its stock is up 42% in 2018. Cramer interviewed CFO Ned Segal to hear how Twitter is changing after the rough patch it had.

Segal said that business is looking up for Twitter and they are a refocused company. "We do feel a sense of humility, but we also know that everybody in the world could benefit from what happens on Twitter. Today, we've got 330M monthly active users as of the end of the fourth quarter and we grew our daily active users double-digits for the fifth consecutive quarter. But we feel like everybody in the world can benefit from what's happening and what people are talking about on Twitter, so there's still a lot of work in front of us," he added.

Twitter has redefined its priorities under Segal who took over as CFO in July 2017 and under leadership of CEO Jack Dorsey. Twitter is now focused on helping their users find out what's important to them. Segal did not expect to see headlines like "Rex Tillerson learned he was fired from President Trump's tweet". "When I see Jim Cramer's got a million followers on Twitter and all the news that breaks on Twitter every day, I'm blown away. It's a lot of what attracted me to the company, a sense of mission that this is where people go to find out what's happening in the world and it's where people go to break news as well," he added.

They have lot of room to improve and grow, be it in machine learning, health of the platform, video engagement or business solutions. They are still working towards showing users what's local and they want to make Twitter a safe and constructive environment.

"We've got all these local businesses that are on Twitter, but they're not advertising on Twitter the way that they might on other platforms, mostly because we just haven't made it easy for them. We've done a lot of work there recently to create a subscription product for them so that they can advertise easier on Twitter, but there's still a lot of work to do to get more of them on Twitter today," concluded Segal.

Square (NYSE:SQ)

When investors are buying a stock, they should do it for the right reasons. Square, for instance is a great fundamental story but most investors are buying the stock as the company is experimenting with bitcoin as a payment solution.

"Not once, but twice in the last four months, this stock has been hit with fierce declines. Both times it seemed like the beginning of the end for Square, and both times the stock managed to turn things around, coming back with a vengeance," said Cramer. When CEO Jack Dorsery announced Square was experimenting with bitcoin, it ignited the stock to new highs but started trading with volatile moves of bitcoin.

"To me, this is a ridiculous linkage. Square has enough going for it that it doesn't need this tenuous connection to cryptocurrencies to power its stock to new highs. I think the best thing they could do would be to figure out a way to decouple from Bitcoin, which is incredibly volatile and really has very little to do with the core business," added Cramer.

Square turned to profit much sooner and has great fundamentals and growth. It is fending competition from other big players that are not growing as much as Square. "The company's been mixing its lucrative, high-margin subscription services that it offers to small businesses with healthy transaction growth, and the combination has made the stock incredibly attractive," said Cramer.

The bitcoin program is too small to have any effect on the company's fundamentals and hence that should not be the reason to invest in the stock.

CEO interview - Applied Materials (NASDAQ:AMAT)

Applied Materials had a good last quarter and also got analyst upgrades. Cramer interviewed CEO Gary Dickerson to find out how the new US-China rivalry will affect the company.

Dickerson believes that the battle of AI is the biggest in their lifetime and Applied Materials is leading the space by building the fastest processors for it. The disruption in transportation, healthcare and entertainment is coming soon and AI is still in the early innings.

"Our technology center here in Silicon Valley is the most advanced in the world. So now you're seeing the products that create every chip in the world, the most advanced displays in the world," said Dickerson. As all the devices get connected and capture more data every day, the technology to support it needs to grow at a rapid pace too.

China is a very important market for the company and accounts for $3B in revenue but he added that it is important to have fair trade.

Viewer calls taken by Cramer

Mattel (NASDAQ:MAT): Cramer wants investors to buy best of breed - which is Hasbro (NASDAQ:HAS). He will not recommend Mattel on takeover basis when the fundamentals are falling.

Alibaba (NYSE:BABA): Buy some now and the rest as it scales down. It's a good business.

Fiserv (NASDAQ:FISV): Don't buy more as it has made a good up move. Let it come down before buying.

Mastercard (NYSE:MA): Buy more on pullback. It is one of the best run companies.


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