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Mad Money w/ Jim Cramer 11/25/24 - Mad Money w/ Jim Cramer | Wave AI Podcast Notes

Mad Money w/ Jim Cramer 11/25/24

Tue Nov 26 2024

Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money. Mad Money Disclaimer

Summary

Mad Money w/ Jim Cramer – Episode Summary (11/25/24)

Release Date: November 26, 2024

Jim Cramer returns to "Mad Money" with a comprehensive analysis of the current stock market landscape, delving into political influences, speculative excesses across various sectors, and providing actionable advice for investors. This episode is structured to guide both seasoned and novice investors through the complexities of Wall Street's latest movements, emphasizing the importance of strategic profit-taking and cautious speculation.

1. Market Overview and Political Impact

Jim Cramer kicks off the episode by reiterating his mission:
"My mission is simple to make you money. I'm here to level the playing field for all investors."
[00:48]

He delves into the recent political shifts, particularly the implications of the incoming Trump administration on the stock market. Cramer contrasts the market-friendly approach of Trump with the Democratic Party's perceived disconnect from Wall Street. Highlighting the market's immediate reaction to Trump's victory, he notes:
"The Dow getting 4,400 points to an all-time high. The S&P advancing 0.3%, the Nasdaq edging up 0.27%."
[04:10]

Cramer introduces Scott Besson, the Treasury Secretary Designate, and discusses his "three arrows" policy inspired by former Japanese Prime Minister Shinzo Abe. This policy aims to reduce the national deficit, stimulate economic growth through deregulation, and increase oil production by 3 million barrels per day by 2028. Cramer expresses skepticism regarding the feasibility of the oil production goal:
"Even if you opened up every acre of federal land, the most you could add right now is probably about a million barrels a day."
[06:45]

He commends Besson's approach to deficit reduction, stating:
"His plan to cut the deficit to 3% of GDP by 2028 makes sense. It's prudent, frugal even."
[07:30]

2. Speculative Excess Across Sectors

Cramer shifts focus to the rampant speculative behavior in the stock market, particularly in sectors like quantum computing, artificial intelligence (AI), fintech, insurtech, ad tech, space exploration, alternative energy, and select Chinese companies.

Quantum Computing

Highlighting the surge in quantum computing stocks, Cramer points out the lack of substantial fundamentals behind the hype:

Quantum Computing (CUBT): "This is happening six years into the quantum computing pivot, yet Cubt is a $910 million company with minimal revenue."
[13:45]
D Wave Quantum and IonQ: Both have seen significant stock increases without proportional revenue growth, raising concerns about sustainability.

Artificial Intelligence (AI)

AI-named companies have experienced explosive gains, often without corresponding financial performance:

Unlimited Group: Up 49% in November with no revenue or earnings.
[14:30]
SoundHound AI: Surged 60%.
C3: Up 54%, trading at nearly 13 times sales with only 23% revenue growth.
[15:15]
Cramer warns of "excessive speculation" in AI stocks, emphasizing the importance of evaluating true financial health over trendy nomenclature.

Fintech and Insurtech

The fintech sector is not immune to speculative fervor:

Robinhood, Upstart Holdings, Affirm Holdings: Each up around 60% for November.
[16:20]
Cramer acknowledges their potential but cautions against their high valuations:
"Robin trades at 50 times earnings, Affirm at 42 times earnings."
[17:05]

Insurtech companies like Lemonade, Root, and Hippo Holdings have also seen dramatic increases, despite ongoing unprofitability. Cramer labels these moves as "totally excessive."

Space Stocks

The space exploration sector has witnessed unprecedented growth:

Rocket Lab USA, Intuitive Machines, Redwire, Global Star, Planet Labs: Gains ranging from 71% to 137% in November.
[18:40]
Cramer describes this as "irrational exuberance," noting that none of these companies are expected to be profitable this year.

Alternative Energy and Chinese Stocks

Bloom Energy: Up 170%, primarily due to a major deal, yet his skepticism remains high.
Chinese Companies: Stocks like Kingsoft Cloud Holdings and Yoks soar amid shifting geopolitical sentiments, though Cramer remains cautious about their stability.

3. Caller Interactions and Stock Recommendations

Throughout the episode, callers seek Cramer's advice on specific stocks, providing real-time insights and reinforcing his points on speculative behavior.

Matthew from Massachusetts inquires about the impact of Trump's tariffs on overseas companies like Alibaba.
Jim Cramer responds: "If Trump implemented hard tariffs, Alibaba stock would go down."
[08:21]
Jeff from Missouri discusses his partially liquidated position in Hertz after a 50% surge.
Cramer advises: "You're fine as long as you take a profit. Otherwise, you'd join the nation of scolds."
[08:56]
Grant from New York asks about Taiwan Semiconductor's performance,
Cramer recommends: "Hold on to it. Take some profits where you can."
[31:04]
Joe from Virginia seeks opinions on Lindy TLC (LTL).
Cramer endorses: "It's a very good company. Lindy is a terrific company."
[42:36]

4. Lightning Round: Buy, Sell, Hold Recommendations

In the high-energy Lightning Round segment, Cramer provides rapid-fire stock recommendations based on his analyses:

Buy Recommendations:
- AI Robotics: Profitable AI sector play.
  [40:09]
- Brookfield Corporation: Smart asset management company with strong fundamentals.
  [43:23]
Sell Recommendations:
- Hertz: Although recovering, consider taking profits from high-performing speculative stocks.
  [08:56]
Hold Recommendations:
- Taiwan Semiconductor: Maintain position while monitoring for profit-taking opportunities.
  [31:04]

Cramer emphasizes the importance of disciplined investing: "If you're up big, you need to take something off the table. Otherwise, you risk letting your gains turn into losses."
[43:06]

5. Key Takeaways and Strategic Advice

Cramer concludes the episode with strategic advice for investors navigating the current market:

Recognize Speculative Bubbles: Be vigilant about areas of excessive gains without solid financial backing.
Profit-Taking is Crucial: Secure profits from high-performing stocks to mitigate potential downturns.
Don't Fight the Fed: Align investment strategies with Federal Reserve policies, especially during rate-cutting cycles.
Diversify Wisely: Limit speculative investments to a portion of your portfolio (recommended around 20%).

A notable quote encapsulates his advice:
"Take what's been given to you, give thanks for your gains, and make sure you're not letting wins turn into losses."
[43:19]

Conclusion

In this episode of "Mad Money," Jim Cramer provides a thorough examination of the stock market's current state, highlighting the intersections between political developments and market performance. His analysis of speculative excesses across multiple sectors serves as a cautionary tale for investors, advocating for strategic profit-taking and measured speculation. Through real-time caller interactions and a dynamic Lightning Round, Cramer reinforces the importance of disciplined investing amidst a backdrop of economic and geopolitical uncertainties.

For those seeking to navigate the volatile market landscape, Cramer's insights offer both warnings and actionable strategies to optimize investment outcomes.

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Transcript

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Jim Cramer (0:48)

My mission is simple to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere and I promise to help you find it. Mad Money starts. Hey I'm Kramer. Welcome to Mad Money. Welcome to Kramer. Other people who make friends I'm just trying to make you a little bit of money. My job is not just to entertain, but to educate, to try to teach you. So call me at 1-800-743-CBC. Tweet me jim Kramer. Call it the firmament. Not Wall street, but the firmament. That's where Scott Besant, the Treasury Secretary Designate comes from. So the fence sitters and skeptics are jumping on the Trump bandwagon as if the President Elect said higher stock prices and lower taxes for all. And that's how you get today's action. With the Dow getting 4 and 40 points, this is to an all time high. The S and P advancing point three percent, the Nasdaq edging up point two seven percent. Now we know there was going to be a quick burst of buy not when Donald Trump won, but when Kamala Harris lost because despite the fact that the stock market did incredibly well under her boss Joe Biden, their administration was seen as a wild soak. The rich White House. Didn't matter that Harris tried to be more pro business in her campaign. Didn't matter that her brother in law, a huge campaign advisor, was the general counsel of Uber. When you're a former senator from California, one of the most progressive states in the nation, Wall street is not going to believe you're a friend of capital. A fancy word for the money at interest. This is no longer the Bill Clinton era for the Democratic Party. When I met with Clinton back then, he was fascinated by the market. He had some genuine knowledge, but even more important, he had intense thirst for how it worked. These days, the Democratic Party at best has no thoughts about the stock market. I often get the word stock and market, when put together, become an ugly epithet not worth uttering. On the other hand, President elect Trump was all about Nielsen ratings when he was on the Apprentice and as president, he repeatedly said the Dow Jones Industrial average all time high and The S&P 500 were his new Nielsen ratings. He likes being rated. He likes to win. He wants that stock market to go up to ratify his performance. That's a big reason why the market exploded higher when he won. But soon after the election, we heard that the euphoria was over. You heard that, right? You heard the whole thing. The market was dead. Because Wall street loves a Republican trifecta. It doesn't love Trump's tariff proposals. Tariffs are basically a selective sales tax that only applies to imports and the countries that get hit with them tend to retaliate. Very unpopular on Wall Street. Now enter Scott Besson. He is a consensus candidate, very different from the kind of guy we thought could get the job. A measured former hedge fund manager who formerly worked for George Soros. Of all people, that he's a pure surprise. He's the kind of pick you make if you're trying to be as reasonable and responsible as possible. Part of the modern firmament that stands for the money classes, but also those who aspire to be a part of them. What does Bessing give you besides a good pedigree and sop to those who want things to be somewhat normal? Well, he brings the three through three policy that's borrowed from former Japanese Prime Minister Shinzo Abe, someone who's been revered for putting the sole in Japanese economy on firm footing. Back in 2010, it was called the three arrows play back there. Three arrows. Three, three, three. How does it work? We have an out of control budget deficit in this country. Something that should give us pause. $1.8 trillion alone in this fiscal year that ended in September. That's insane. But not nearly as insane as the $36 trillion in national debt that we have run up with no obvious way to pay it down. Anyone who tried to put pen to paper during the Trump campaign figured that he'd take the already busted budget and bust it even worse if that was possible. I know that the progressive wing of the Democratic Party in their postmortem. Just like Vice President Harris, the House. She presented herself as the saner person when it came to the budget, because why Goldman Sachs said she was. Goldman's the most liberal of the investment houses, but in certain circles it's regarded as a bastion of right wing, rapacious potters like from It's a Wonderful Life. Trump, on the other hand, couldn't be bothered with anything involving the budget except to have our allies and enemies pay it down with tariffs. Even if that argument was absurd in the face of it. He doesn't care. Trump's the self described king of debt, but Besset will his plan to cut the deficit to 3% of gross domestic product by 2028. Well, it makes sense. It's prudent, frugal even. And it shows that Trump must be taking this stuff seriously or he wouldn't give this guy the job. Now, there's two ways to make the national debt manageable. You can inflate your way out of it in Weimar style. Buy More Bad, where you can grow your way out of it. That's where the second part of the three arrows comes in. 3% GDP growth, helped along by deregulation. It's a Goldilocks story. Not too much inflation, not too much deflation, and enough growth that we can gradually shrink the deficit without having to implement draconian spending cuts. Are there really that many restrictive regulations that make it so that things are slow in this country? Okay, Goldilocks, it was a fairy tale. But there's a theory that says the financial system has been held back for ages by federal regulations and impede growth. Now, in reality, supposedly state and local regulations that impede growth, but there's plenty that could be rolled back at the federal level. I say that as a small business owner, serial small business creator, not a journalist or whatever hell people think I do for a living. Finally, the third of three arrows produce an additional 3 million barrels of oil a day. Now, this one's a pipeline dream. I thought that myself first. I don't. I don't know if it's really possible. Even if you opened up every acre of federal land, which you won't be able to because there are laws protecting that land, the most you could add right now is probably about a million barrels a day. You need all sorts of new technology. Get beyond that. Plus the oil industry would hate it. The price of crude would fall through the floor if we added that much production, because there's not that much demand, that would lead to a self Fulfilling set of cutbacks that would then sudden oil back probably to where it is now. That's a round trip. It does nothing for anybody. So you might say I'm a skeptic about all the threes. I do, however, like the best. It also held out that he doesn't favor jamming on huge tariffs all at once. A phase roll is much more my style. It's certainly his too. Can there be a legit top to bottom line change in the efficiency of our government and the costs associated with it? Count me as a skeptic about any attempt to change the government, including Elon Musk and Vivek Ramaswamy's Doge thing. Because every penny of spending in the budget has a constituency. And when you add all those proposed cutbacks together, you run into tremendous amount of opposition. But that's not the point. What matters is that this Treasury Secretary designate is a serious person. Not only Steven before him. And those who believe Trump couldn't get a dollop of rigor in the cabinet, well, they've been proven wrong. Don't take my word for it. Take the bond market's word for it. We were all fretting about the 10 year going to 4.5% just a few days ago and now we're cheering about a 4.28% yield as recent plunge in the announcement of best in getting the job. There really isn't anything else. You may regard this as splitting hairs, but when you're dealing with credit, which is the largest market on earth, you see these numbers and you think happy days are indeed here again. What a switch from just a week ago. I'd like to say that every basis point counts and there are hundreds of basis points rates. But when rates go low, housing gets revived, car loans get extended, the parts of the economy that are ailing can recover. Bottom line. That's what's being celebrated today. All from one nomination, then again for Wall street and for the firmament of moneyed interest. Sometimes it's really all that matters. Hey, why don't we go to Matthew, Massachusetts. Matthew.

Jim Cramer (13:11)

For the past couple weeks, we've seen signs of excess bubbling all over the stock market in all sorts of places, to the point where I feel like devoting the whole show tonight to laying them all out for you so you're prepared. Be ready. All in all, I think it's perfectly reasonable for the S&P 500 to be up 4.9% for the month November given that we got Republican sweep on Election Day with promises of lower taxes and deregulation, something Wall street always adores. Plus we got a rate cut from the Fed a few days later. The Magnificent Seven haven't gone crazy either. They've actually been pretty tame this month. So if it's not in the averages of the Mag 7, where's all the excess that I'm talking about? Frankly, it's everywhere. It's all over the place. We'll have a remarkable rally for one off stocks one day, then something similar in another stock the next day. You can see it on the crawl at the bottom of the screen every session, particularly after the bell. And very early in the morning, gains in names you never heard of. And that's why this week, what during the weekend what we did was this. We ran a simple screen looking for US listed stocks that are large enough to talk about on air with total returns of more than 50%. 5 for the month of November. As of the close last Friday, there were 66 darn stocks that fit that bill, which is an insane number. 66 stocks would take oversized gains well, but people are really making money, provided they are also taking something off the table. No money made until something off the table. When you dig in this list, what you find are several baskets of stocks that people can't stop buying. They just can't keep their hands off. And some of these are actually a lot less legitimate than others. So let's start with the unprofitable quantum computing plays. Because the best performer of the Weber, at least so far, is a company called Quantum Computing. That's Cub for you Home givers up and astounding 588%. That's closely followed by two more quantum plays, D Wave Quantum and Ion Cube, both of which have more than doubled month to date. That last one sounds like a TV station I'm not working for. Honestly, I have no idea what's behind the sudden interest in these quantum computing stocks. Don't ask me to explain the gods of either. You need a physics degree to get your head around it. And trust me when I say that most of the buyers do not have one. While people have been talking about it for years, it's still highly experimental. But I do know stocks. And when you look at the history of CUBT, you know that this was a beverage company until 2018 when it pivoted. Pivoted to being in software for quantum computing. Now that failed to inspire much interest. So in 2022, Cubt acquired Q Photon, which is developer of quantum photonic systems. Right now they're building a semiconductor plant in Arizona to make specialized materials for quantum computing. And the stock seems to be running on the fact that they're on track to open this facility in the first quarter of next. And this month they announced the first few orders for their planned Arizona Fab. Again, I have no edge in quantum computing, but I do know that CUBT is losing money and has hardly any revenue. Through the first nine months of the year, it only racked up $311,000 in sales. This is six years into the quantum computing pivot, people. Somehow, Cubt is a $910 million company. Excessive D Wave Quantum came public via a SPAC a couple of years ago. Always reassuring, and it's also improbable. But at least it's on track to make about $9 million in revenue this year. Is that enough to justify a $647 million market cap? The last one, IonQ is surprisingly, an almost $7 billion company after more than doubling this month. They're on profitable too, though. IonQ is expected to reach 41 million in revenues this year, up about 88% from 2023. I like that. No disrespect to these three companies, but I think people were just reaching for anything with the name Quantum. You know, in it, Quantum this, Quantum that. That seems to be a theme across all the pockets of excess that we're going to discuss. Which brings me to the next group. Anything with AI in the name, and that starts with AI. Unlimited group. That's up 49% in the month of November. Then there's SoundHound AI up 60%, Big Bear up 42%. C3 up 54%. That unlimited group company was previously known as Lever Global until a name changed in July and hardly had any trading volume before this month, when the company completed three acquisitions in the fintech and travel industries. But for now, just know this. Unlimited is one of the hottest stocks in the market, despite having no revenue, no earnings. What can you do? The other stocks with AI in the name are a little bit more legitimate in that they all have revenues, even if they're unprofitable. Take C3. They're on the show a lot, right? We've had them on the show. The analysts are expecting 382 million in revenue from 2024, up 23% year over year, even as the losses have also steadily grown. Now, this thing came public in late 2020, and there's never been much interest in the stocks until a few weeks ago. The only catalyst I can find is that they announced a strategic alliance with Microsoft last week, which set the stock up more than 24% in a single session. The stocks now trading at nearly 13 times sales, which is absurd for a company with only 23% revenue growth. Again, excessive. The rampant speculation. Anything with AI in its name has also bled into the enterprise software space. So take Inner Data. Okay, which is actually on our homework list right now. The company describes itself as a quote, global data engineering company. Yeah. And it has AI all over its website. And the data is actually profitable and touts relationship with seven customers. But multiple short sellers have targeted the company this year, including one who alleges that MAG7 relationships are vastly overstated. The stocks up huge after Inner Data reported a huge top and bottom line beat earlier this month. The darn thing spiked more than 75% in a single day, even though the company also disclosed that it's received subpoenas from the SEC and Justice third quarter. They say it's related to conduct alleged in a shareholder lawsuit. Personally, I'm not going to pay up for a stock that's being subpoenaed by both the SEC and the Justice Department. To me, I'm calling that fraud. A bunch of other enterprise software plays have shot up more than 50% from November. Like Bill holdings and Palantir Technologies. Those are more justifiable. But both companies are turned to profit. Both reported strong numbers earlier in the month. But Bill holding sells for 52 times this year's earnings expectation while Palantir trades at 170 times earnings. I love Palantir. I'm calling it a tax. I can go on. There's Applied opto electronics with 143% return November. They make optical equipment for the data center. There's Canaan, up nearly 80%, which is focused on, quote, high performance computing, chip design, chip research and development, computing equipment production and software services, end quote. That's kind of everything, right? Then Geometry, which rallied almost 66%. It calls itself a quote leading global AI powered manufacturing marketplace, end quote. Pharaoh Technologies, up 53%, described itself as a leader in 3D measurement, imaging and realization solutions. AB point, AV point at a quote is a global leader in data security, governance and resilience, end quote. It's up 50%. And indie semiconductor makes semiconductors, photonics and software platforms, end quote. For autonomous driving, it's up more than 63% in November. Five of those six companies I just mentioned are unpropable. The loan exception is Farrow. That's another one that's been around for ages. But investors only started caring about it past month. Bottom line. All right, we're seeing signs of excess all over the place, people, especially in tech. And it's making me a tad nervous, if only because some of these stocks simply have good names and almost nothing else. If it was just tech, well, believe me, I could handle it. But the excess is everywhere. So stick around after the break and I'll walk you through some more of them. They have Money's back.

Jim Cramer (22:47)

Like I told you before the break, we're seeing areas of speculative excess all over this market. Getting nervous. Quantum computing, anything with AI and it seems some parts of the enterprise software space. They've all had absurd gains this month. Frankly, they're just the tip of the iceberg. This dynamic goes way beyond traditional tech stocks. Take the consumer financial technology space or Fintech, Robinhood, Upstart Holdings, Affirm Holdings. These are all up around 60% for November. So far is rally more than 40%. Those are all high profile. There are also some winners. I've never heard of a Dave. I was making fun of David Faber. He hates the name Dave. Okay, but you don't call him Dave. But I'll call Dave. Dave. That is a digital banking app. It's up 121%. How about sizzle? No, not sizzle, Sizzle. A buy now, pay later. Challenger has run 116% money line which calls itself a top consumer finance super app. That's about 102% now these moves are tough to definitively call bubbles. Robinhood, upstart in a firm all reported better than expected or at least better than feared quarters. I think there's some truth to the idea that Fintech will get a lighter regulatory environment under Trump. That makes sense, doesn't it? Well, firm enough started losing money. They're both expected to begin making money starting next year. And Robert Solid solidly popped up right now. In fact even Dave Sezzle and Moneyline are expected to turn a profit this year. Lightly used. The only problem is their stocks have gotten very very expensive. Robin trades at 50 times earning. Cecil's a 42 times earnings money lines of 46. I don't know if these valuations are justifiable, maybe the earnings going to just huge renaissance but it's certainly, let's just say these are heck of a lot higher than they were in October. Maybe that's pause. Okay, that's pause concern. Beyond Fintech there's been huge rallies and anything with a tech suffix insurtech many insurance companies with some sort of tech kicker. That's word of just gigantically. Lemonade up 150%. Root uses tech and data science to offer better car insurance rates. It's up nearly 60%. Hippo holdings, they love these animal names these days. Is tech enabled home insurance with a nearly 50% gain for November. I think these moves are totally excessive because all three companies are deeply unprofitable. Lemonade's on track to lose more than $3 per share this year. For heaven's sake, here we go. Then there's ad tech app love. It helps mobile game developers grow and monetize their franchises. And its stock is up almost 90% this month. Via Technologies has software that for pro programmatic advertising purchases it's up 60%. Programmatic advertising, people love that. But let's focus on that problem for a second because this is a great case study of what we're really seeing. This one was already hot before November. It's up now 700% year to date. Now Applovin is a fine enough company. They're solidly profitable. They report a strong quarter this month. But was it strong enough to send the stock up 72% over the course of the next two days? At these levels, AppLovin is a $106 billion company even though it's only generated a little more than 4 billion in sales over the past 12 months. To me that's excessive. Maybe that's all it is. Maybe it's just excessive. What are others that we On Friday night we started this discussion of excess in certain pockets with Rocket Lab USA. That's a space focused company. The stock that's up 117% for November at the time when we ran our screen this weekend, we found several other space stocks that have screened higher in November. There's Intuitive Machines which makes equipment for space exploration, including some of NASA's recent lunar missions and that was up 88% November Redwire says that it has quote valuable IP for solar power generation and in space 3D printing and manufacturing. End quote. And stock is run 79%. Global Star offers low earth orbit satellite based communications just like StarLink is up 78%. Planet Labs it does satellite imaging and data insight services stocks up 71%. The strength in space stocks has extended to some other adjacent markets like drones and electrical. Vertical Take Off Landing plays Red Cat okay, Red Cat's a drone maker and its stock is more than tripled month to date. Archer Aviation is one of the two best known electric vertical takeoff names. It's jumped 137% for November. Are these moves excessive? The potential for the space industry does feel limitless and these stocks have scarcity value in the absence of a publicly traded space X. But at the end of the day this seems like irrational exuberance to me. Not a single one of those space stocks is expected to make money this year. Maybe they were all too cheap in the previous month, I don't know. We've seen some alternative energy plays pop onto the list, even though that's not exactly a priority for the incoming administration. Hey has to stop Bloom Energy, a barely profitable hydrogen energy play from rallying 170% this month, mostly thanks to a deal Kramer Faith a Mercury power to provide energy for data centers. That's a great win for Bloom Energy, but it doesn't justify the company going from 2.2 billion in market cap to almost 6 billion. Hey, speaking of energy, the nuclear power complex keeps roaring. Especially the smaller, riskier, deeply unproppable nano nuclear energy, new scale power. They both fell below the 50% mark today, but they've been up more than 60% as of Friday's close. There's highly on holdings with the nearly 60% gain that was the product of a SPAC boom four years ago. Originally it was working on a hydrogen engine for trucks. Now it's pivot to making more sustainable generators. No profits de Minimis of revenue. No, thank you. Finally, some Chinese companies are starting to pop up on our radar while most Chinese stocks are down, which makes sense given President Elect Trump's attitude toward the People's Republic. Some specific stocks, well, they've soared. Near the top of the list is Kingsoft Cloud Holdings. That's a Chinese cloud software provider with 152% gain for the month. There's another company called Yoks and Yukson Jackson. That's Uxin. Basically it's the Chinese carvana that we would have included before it fell 20% today. Kango, a company that appears to have just pivoted from used cars to cryptocurrency mining, is up 62%. Hey, by the way, I'm incredibly skeptical of any company that totally transforms its business model overnight. Regular viewers know that I'm not really a bunch of a fan of the Chinese stocks, aside from the true heavy hitters like Alibaba. But I bring these speculative ones up because this week we get the second largest Chinese IPO of the year when Pony comes public. Now, this is an autonomous driving play. It's seeking a $4.55 billion valuation. The company raised the number of shares its offered last year last week amid rumors that Uber would be buying into the deal. I've got no edge on Pony, but I'll just note that Zeekr, the largest Chinese IPO of the year, hasn't done much. It's up about 2 bucks from its May 2024 offer price of $21 for less than 10%. Game SP is up nearly 15% of the same period. You want autonomous driving? I stick with the much easier to follow and close to home Tesla, which I like very much. You want pony? I happen to like, and this is my own analysis. I like Pink Pony Club and I saw Chapel Roan at the Saturday Night Live, which is worth a lot more than most the companies I've now described. Bottom line, when we come back after the break, I'll cover the final group of November red hots. You probably want to write them down, the Trump trades. Those are harder to figure out because the companies in question should generally benefit, really genuinely benefit from the new administration. Even if their gains are excessive. Maybe it's justified excess. So stick around for the next store of bilge, please. Hey, how about we go to Grant, New York. Grant.

Jim Cramer (31:04)

Okay, now see, here's the problem. Taiwan Semi was up at 95 and now it's 185. Was at 95 last year, almost this exact week. So just, you know, to criticize a company that's doubled up is really, really hard. Grant, I understand how you feel. I think Taiwan Semi is a great company. I would just hold on to it. Now we're seeing areas of speculative access all over this market. It does make me look. I'm nervous. That's why I'm doing these pieces. I think could be an opportunity to take some profits where you can and then if they come down, you're fine. That's all I'm looking for much more money, including my final look at where excess could be popping up with Trump policy winners. Then how should the Fed be shaping your moves in this market? I'm breaking down the don't fight the Fed mentally and all your calls rapid fire to the lightning round. So stay with tonight. I devoted half the show to calling out some areas of excess in the market, areas of irrational exuberance that concern me. We've seen multiple groups make extreme moves to the upside. Quantum computing, anything with AI at the same, some parts of enterprise software, fintech, insurrect, ad tech, not to mention the space stocks, a few alternative energy plays, a handful of speculative Chinese stocks on and on. But there's a couple more groups that have had huge gains this month. It's just that those gains are maybe much easier to justify. I'm talking about the Trump trades companies that should benefit enormously from Republican trifecta. In Washington. For example, the two big private prison operators, Geo Group and CoreCivic, have rallied 85 and 59% respectively since the beginning of November. These tend to be winners whenever the GOP is in power, but they're rallying particularly hard this time because Trump ran on an agenda of mass deportations. Keep in mind though, GeoGroup and CoreCivic roared from the 2016 election to Trump's Inauguration Day in January 2017, but then they spent most of the next four years going lower. My view, legitimate thesis here, but the gains are so extreme that I worried they're running out of upside legitimate. Another example, a handful of smallish oil service stocks have popped this month. Now one of the few things that we know for certain about President Elect Trump's economic agenda is that he wants our country to produce even more oil than it's doing. His new pick for Treasury Secretary that Scott Besson has advocated for the country to produce an incremental 3 million barrels of oil per day. As I said at the top of the show and his proposed energy secretary feels like an oil exempt from the 1980s. The drill may be drill agenda is fairly obvious Good news for the oil service plays the company's involved in getting the resources out of the ground even if it might hurt because the producers will be putting is be putting a lot of downward pressure on oil and gas prices. By the way, that's what happened in 2016. The big three oil service names SLB, Halliburton and Baker Use are all up big for November, meaning some smaller operators came out of nowhere and landed on our list of the market's hottest socks. Solaris Energy Infrastructure specializes in distributed power generation systems and managing raw materials used in oil and natural gas wells. It see the stock jump 73%. Aris Water Solutions offers water management, recycling and supply solutions to Frackers in the Permian Basin. It's up more than 63% in November. Chart Industries makes highly engineered equipment used in the engineering and in the energy production process and it's run up 57%. That's a stock we used to recommend all the time when we first started the show. Once again, big moves there. I can't say they're unreasonable. These are three very profitable businesses, reasonable valuations. They're about to face a much more benign regulatory environment. What else? Oh, here's a tough one. Fannie Mae and Freddie Mac, two government sponsored enterprises that pop up the mortgage market, have seen their stocks more than double in hopes that Trump will recapitalize and release these these companies. I don't know if you remember them from the 20 from the Great Recession. Oh boy, they were front and center. I don't get too deep in the weeds on this tonight because it's a complicated situation, but in general it makes sense for Fannie and Freddie to rally on this Republican sweep. There are plenty of one off Trump trades too, like Tesla, which is up 35% for November. This is all thanks to CEO Elon Musk's special relationship with President Elect. Of course, if Musk starts getting on Trump's nerves, well you could see a serious pullback. But you know what? I'd be a buyer. And weakness though, because I'm a believer in musk leadership. How about natural grocers? Buy Vitamin Cottage, which is up more than 71% for the month. This stock, which I've never heard of, is presumably rallying on the appointment of RFK Jr. Aka Bobby Jr. As Secretary of Health and Human Services. He's got some nutty views on vaccines. A little critical big farmer there, but he's also a health food nut. Still, that 71% run in a little known natural grocer. I'm quite excessive. Kramer Fave Sprouts family markets have only run up 15% month to date and it's part of the same theme. Then again, Sprouts was already doing great on its own before the election because it's a really high quality operator that I like very much. Finally, there's the big one. And you know what that is? That's Bitcoin. Bitcoin itself has climbed from just under 70,000 as of election night to just a shade under 100,000 on Friday before pulling back to below 95,000 today. Now that rally is taking up practically the whole cryptocurrency ecosystem. Mara holdings, not related to the one that gave away Saquon Barclay, that's right, up 57%. Coinbase is up 74%. And of course Microstrategy, a former software company that's now pretty much a leveraged Bitcoin finest. Sharp, 65%. Obviously the gains in crypto, especially the bitcoin ecosystem, seem excessive, but again, they aren't without reason. We're going from a Biden regime that was pretty antagonistic towards crypto to a second Trump administration that promised to be incredibly crypto friendly. What should that be worth to the bitcoin related stocks? Well, we are going from journalistic government which has tried to rein in the excess of crypto, to one that actively supports bitcoin, although the other forms of crypto seem to have been left aside. When a president talks about a strategic bitcoin preserve, you are going to see hoarding of Bitcoin and it's going to work in favor of the holders, or at least the Hodlers as they call themselves. Plus let's accept the owning actual Bitcoin or an ETF that tracks it as a nice hedge against our government turning on the printing presses to paper over the deficit. So call me in favor of owning Bitcoin and also, by the way, buying some Ethereum which I own fallen badly behind bitcoin. I'm a believer, but these are hedges for me. And if you're hoarding crypto, be ready for the breakdown no one thinks can come so what's the takeaway from all these excessive moves that I've been following? First, I certainly don't love seeing so much excess in the market. I did my best tonight not to get too specific with any one of these red hots. Some of their gains may well be justified. Most I suspect, though probably not. That said, I'm not trying to separate the wheat from the chaff tonight. I just want you to know that there's an insane amount of undisciplined buying in this market from people who seem to have no sensitivity to prices or valuation. And that does concern me. It makes me think that we could be closer to a top, at least in this kind of company, even if it's just a short term top, than we are to the beginning of this move. Then again, I don't want to come off as a scold. I don't be a school. I'm generally pretty encouraging speculation. I'm probably the only person on TV who is I in favor. But you got to be smart about it. And you only do it with money. Say let's 20% of your individual stock. But I know more than that. Please. However, when you have so many enormous gains, you can't just keep going all in. You have to ring the register and take something off the table that's prudent speculation. And call me a prudent speculator. So here's the bottom line as I see it, with a nod to the holiday week that just begun. If you had the good fortune to participate in some of these seemingly excessive moves, I think you should give thanks to your gains. And that means taking some profits. If you're sitting on huge win, especially anything like a double or triple in just over three weeks time, it doesn't mean you have to sell your entire position. Not at all. You can keep some on, but trust me when I say these types of runs are highly unusual and they do tend to fizzle out eventually. So take what's been given to you, give thanks for your gains and make sure you're not letting wins turn into losses. Do it for me. We will all feel better with some money in the bank. If you can take out your cost basis, do so and then you can let the rest run. You'll never turn a profit into a loss that way. If you take the initial capital off the table, mad money is Back after the break.

Jim Cramer (43:54)

You may be sick and tired of hearing it, but it needs to be said. When the Fed gives you a rate cutting cycle, you have to suspend your critical factors. At least hold your nose and just. Bye bye bye. The Fed is your friend right now and trusting your friends is a good bet as we've seen over and over again. Consider the case of Home Depot. When reported the quarter was okay. Nothing to write home about. Filled with negative same store sales numbers both future and past. The despot reported when long term interest rates look like they were headed higher. Maybe watch higher 10 year traveling from 4.2, 4.5 from 4.3 just a couple of weeks ago, even though the Fed was cutting rates, it looked like it wasn't having much of an impact on the stock market. I had faith the long rates would come back down like they did today. But only because I learned from the best. When I first really got into investing in law school, I'd watch Wall Street Week, this fabulous Friday night show on PBS hosted by Lou Geiser. Time would just stop for me. Let everyone else go blow some steam off. I didn't care. I'd sit back in front of my little black and white TV and I'd learn. Each week, Lou would have a special guest, often a person who is from Wall street who knew a great deal about a group of stocks which I later learned were people from research departments in the strange world of brokerages. The real star though. Oh, that was easy. It was always Marty's. Why? This incredibly understated money manager and professor who when he spoke even as a panelist, ever so briefly. Well, I would scream at anyone saying shut the heck up. Marty's talking. I love Marty's simplicity. There was don't fight the tape, which I would still distill into something like when stocks are going higher, buy them and when stocks are going lower, sell them. And then there was that don't fight the Fed. Now this was a phrase that totally mystified me. How could you fight the Fed? I mean, how could you befriend the Fed? What does it mean to be the Fed's bud? The answer. It means that when the Fed's trying to reignite the economy, you need to get on board. You had to find stocks to buy and buy now even if you didn't like them. You had to be thinking the future. Marty, who passed away a long time ago, would tell you that near term gyrations do not count. If longer term rates went higher as the Fed started cutting rates like they did this time he'd say that couldn't last. The Fed's just too powerful. Even more powerful than the bond market. So if you get a chance to do some buying because things seem weaker, you have to hold your nose and pull that trigger. Don't be misled by the action. Just trust your buddy pal friend, the Federal Reserve. Now we've been buying Home Depot for the Travel Trust. When imported and sellers amass their stocks and they just kept hitting any bids that there was, including mine, I didn't care because I was armed with the market history that suffused the modi's. Why the well informed mantra, don't fight the tape and don't fight the Fed gives you the confidence to buy when everyone else is selling. When you get lower short term rates, that leads to a lot of home equity loans to repair and remodel. You get cuts in short rates, you will only see longer rates coming down to. So it doesn't matter what Home Depot says, it only matters what the Fed does. And that's how you get this terrific run in the stock. Including today by the way, when the stock rallied 8,000 change and at one point hit a new high. And that's how you get a Ford, Stanley, Buck and Decker. A company we interviewed just this week where management wasn't all that bullish about business until 2027. But the stock's been running big since then. Why? Because the Fed can't be beat now. Some of these gains also came because the treasury secretary did talk about gradually phasing in tariffs, which could give both companies more time to adapt to what will be a costly adjustment. But what really matters is that when the Fed wants the housing market to come back to life, we have the least turnover in 30 years. It's coming back to life whether it wants to or not. Something for all of you bears out there to think about, alex says. Always a bull market Summer, I promise. Just for you, right here, mid Money, I'm Jim Kramer. See you tomorrow.