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Jim Cramer (0:11)
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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. Man, money starts. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Cramerica, friends. I'm just trying to make a little money. My job is not just entertain, but to explain. So call me 1-800-7-3 CBC tweet me at Jim Cramer. We focus on the 10 year treasury, we focus on the Fed, we dwell on Friday's employment report and a bunch of important surveys and inflation reports. These are indeed all important, all impactful to stock prices, including today with Dow gained 107 points, estimate advanced 0.16%, NASDAQ Diploma 0.06% by the way these prices rolled. Nice recovery. Very ugly moments middle of the day. Mostly driven, yes, by the vicissitudes of the bond market, which ended up where it started after some pretty wild gyrations. But what we don't focus on enough here or anywhere else frankly, is fraud. Yes, fraud. Specifically the negative correlation between the love for the red hot stocks of flavor of the month companies that aren't doing all that well. When these firecrackers get severely overheated, you've got to be very careful because it means buyers are getting carried away with concepts, not earnings, not sales. And when that happens, the market's driving us through the danger zone. Yet we are in Kenny Loggins territory. I started telling you to worry about froth at the end of November, just for Thanksgiving. Many of the red hots peak right then, but some others just kept running. Much to my own chagrin back then, I Highlight a whole bunch of overextended groups with my own monikers like companies with AI in the name and ambiguous enterprise software and Real Company Crazy rally. But also some traditional sectors like alternative energy, consumer fintech, enterprise software, space and Trump winners. Those were the results of a screen we had run searching for stocks that had a total return of 50% for the month of November. That is a red flag if I have ever heard of one. Since then there's been a real downturn in most of these stocks, which is a very good sign actually. But there were some that just wouldn't quit, which is a very bad sign. Until yesterday. Until yesterday, when the worst of the excesses, the real helium, the balloon, quantum computing stocks finally got skewered and done by none other than Jason Wall, the man behind Nvidia. Now you know my position. I'm an apostle of this company. I think it's the vanguard of the new industrial revolution, one that's going to touch every aspect of your my lives. In short time, I expect robots will dominate many workplaces, including some surprising sectors. Autonomous vehicles, digital factory twins, health care costs. These are all coming and they're all good. We're looking at the era of Agent X where machines augment humans and often do a better job, especially when we're dealing with humdrum but labor intensive tasks. Nvidia stock often gets a lot of heat for being too high, but none of what happens there is froth. The revolution is real. And more important, the company's sales and earnings are real and they are spectacular. Which is why I always tell you to own this one, please don't trade it. This positive productivity story can play out over multiple years. I think it will benefit numerous companies, but it can also spawn froth as speculators seize on businesses that could potentially do even better than the accelerated computing and artificial intelligence that are the hallmarks of Nvidia and that I love so much. The worst. And I mean by I'm talking about the worst, the most chimerical, the most dangerous, least popular, most hyped quantum computing stocks. Some amorphous method or reality, some wizardry mixed in with a dash of alchemy that represent the worst of all worlds. Yesterday, an unlikely source flattened the froth of quantum computing and I for one actually breathed a sigh of relief. Yesterday, Jensen Huang told us the truth about this group and I want you to listen. Well, probably somewhere between in terms of the number of qubits, you know, order of five orders of magnitude or six orders of magnitude away. And so if you kind of said 15 years for very useful quantum computers. That would probably be on the early side if you said, you know, 30 is probably on the late side. But if you picked 20, I think a whole bunch of us would believe it. But what we're interested in is we want to help the industry get there as fast as possible and to create the computer of the future and we'll be a very significant part of it. 20 years. I mean, holy cow. The quantum computing stocks got crushed from those words. I mean annihilated. Many people thought the future was now when it came to quantum computing. They thought it could be a valid competitor in videos accelerated computing this year, next year. You got it. The panic sellers, well, they got quantum wrong. This quoting the most important person the business. And I bet these stocks have got more downside, maybe a lot more downside. Similar to the Icarus. Like dot coms of a different era. You can still escape them before the insiders take advantage of the windfall that many of you have given them by bidding these silly stocks off. I don't want you to get hurt. You're getting your chance to get out and you need to take it. Jensen not only pushed out the timeline for this technology, you know what, he even questioned the use case of quantum computing altogether. He said it's good at small data, but it's not good at crunching large data. And the new industrial revolution runs on large data. Nvidia said wants to solve problems that normal computers can't. Quantum computing needs normal computers to work. And that gating factor, because they're so slow could make quantum computing less important, less germane than their promoters think. Ouch. I focused on three quantum computing stocks for you in November. I, O N Q Quantum Computing and D Wave Quantum. They were on earlier today. I listen, I haven't changed my mind. And subsequently also mentioned Brigadi Computing. All these companies share a couple of trades. They're losing tons and tons of money and they almost have no revenues. One's got okay revenues, but really this rigidity that represented the worst excess. Its stock was below $1 back in October when it got to $2. By late November the company issued 50 million shares to raise $100 million. It is a market offering and then we're in 21 bucks. That's the definition of froth. That's what you never want to see if you're a true believer in a bull market. Today we're getting stock got crushed by Genesis comments falling from 18 to 10. And again, it's not too late. To sell. It was at a buck a couple of months ago. Give me a break. Same with the three we highlighted back in November. IO and Q plummeted 39%. D wave quantum dropped 36%. Quantum computing nearly got cut in half, down 43%. When you do this kind of speculation, you have to know that you're playing a dangerous game of musical chairs. I think all these frothy stocks remain vulnerable. You own a stock with AI in the name, you could be in trouble. You own a hyped up alternative energy company, especially one connected nuclear power. You need to ring the register tomorrow. They've come too far, too fast for technology. Can take over a decade to deploy. Now, I wrote a piece this weekend for the CBC Investing Club talking about how much I wanted to buy the stock of Palantir. The enterprise software companies growing incredibly fast can revolutionize everything from military procurement, health care. The stock just wouldn't quit. And I had a huge case of fomo. Fear of missing out. I said it's the quintessentially wrong move for the trust to buy a stock that's run from 16 to 82 in one year's time. But I felt it, I wanted it. And of course, that was the top. Palantir stock, which fell again today, is at 68 now. Can't seem to stabilize. Ultimately it will, and that's how much I respect them. But it has to churn and burn base before that happens. Shaking out all the hot money. I see that happening in every one of these speculative categories. And while I hate to watch anyone lose money, all I can say is told you so. I can't be part of this froth. I've seen so many investors in my time get caught up in electric vehicles, charging station stocks, alternative fuels, small caps, Chinese stocks, Internet infrastructure stocks, the early generation enterprise software stocks. I always want you to stay in this game. But I couldn't save the people refuse to sell their red hots. They were too greedy and then they were too poor. Look, I take this stuff personally. I don't play for dinner anymore, but I used to, so I know what you're going through. The D waves, the new scales, the rigidis, you can make money in them. But these are not stocks you buy and hold or invest in. You got to buy them to sell them. Bottom line, if you haven't sold, sell. If you actually think these moves are sustainable, you need to take a breath, limit your risk, and above all, take profits so that you don't have to play for dinner either. Robert New York. ROBERT well, Jim, it's great to talk to you tonight. I'm on the show. Glad you're on the show.