Tech Is Defenseless – Cramer's Mad Money (9/6/18)

Stocks discussed on the in-depth session of Jim Cramer’s Mad Money TV Program, Thursday, September 6.

The selloff in tech continued on Wednesday and everyone is looking for a reason. “Is it a slowdown in demand for digitization? Is it regulation cutting into growth? Is it a change in consumer behavior? It would be so darn easy just to say, ‘A-ha, this is the big reason, there’s a sea-change and it explains everything’,” said Cramer. When people are hell-bent on finding what’s wrong, they end up being wrong most of the time.

“That’s because there’s no sea change in this technology business. Not at all. This sell-off is all about the mechanics of the money management business,” he added. A typical stock has 3 shareholders: mutual funds, hedge funds and index funds. Mutual funds are overweight on tech as they own more tech-related holding that’s in S&P 500. “If they’re up more than 35% a stock, they’d be reckless not to sell some. You can’t defend against that,” said Cramer.

Hedge funds, on the other hand, tend to be more exclusive and higher risk, use algorithms and ETFs to make buy or sell calls. Hence, when a Facebook (NASDAQ:FB) starts selling when it appears in front of Congress, it drags other tech stocks with it.

The index funds focus more on investments and basket of stocks regardless of the sectors. “They’re already stabilizing the packaged goods stocks like Clorox (NYSE:CLX) and some of the industrial stocks which don’t have big gains. So they’re not falling victim to profit-taking,” said Cramer.

The chaos in tech sector will get over only when shareholders get shaken out and low prices start attracting buyers again. Till then, health care and retail spaces are safer areas. “The bottom line is tech’s defenseless. It’s getting toasted. It’s basically the wrong bird tonight — it’s a Falcon, not America’s bird, the Eagle.”

Football

With the football season kicking off, Cramer interviewed Philly’s Brent Celek, former tight end for the Eagles.

Celek is excited for the season and will be cheering his team. He added that life after football could be tough for athletes as media highlights more athletes that lose it all after they retire.

Celek is paying attention to his finances and he is a believer in index funds. He invested in restaurants which taught him the value of real estate and is now building a mortgage and title company which is growing. He also holds Tesla (NASDAQ:TSLA) in his portfolio.

Fantasy football style stock picking

Cramer provided a list of his stock picks in fantasy football style. His picks make a diversified portfolio as teamwork is best when it comes to football or stocks.

For the running backs, he chose Home Depot (NYSE:HD), Abbott Labs (NYSE:ABT), Intuitive Surgical (NASDAQ:ISRG) and Dexcom (NASDAQ:DXCM).

For the pair of wide receivers, he chose Salesforce (NYSE:CRM) and Alphabet (GOOG, GOOGL); Comcast (CMSCA) as his quarterback; for the pair of tight ends – Take-Two Interactive (NASDAQ:TTWO) and Activision Blizzard (NASDAQ:ATVI).

For the defense, he chose Clorox (CLX) while Constellation Brands (NYSE:STZ) and Canopy Growth (OTC:CGC) made the kickers.

CEO interview – Comcast (CMSCA)

The stock of Comcast is down 10% for the year and it trades at 13 times earnings. Cramer interviewed CEO Brian Roberts to know what lies ahead for them.

Roberts said that cord cutting is not a bad thing for Comcast as they are not only a content company but a connectivity company. More cord cutting means consumers moving to streaming services which means more broadband services. The broadband sales for Comcast have been the best in the last 10 years. “What does that mean? It means in a couple years, we all want to be what the power user is doing today, so our capacity is great,” he added.

Commenting on the failed Fox (FOX, FOXA) deal, Roberts said that they are interested in boosting up their content portfolio but that does not mean making acquisitions at any price.

“We saw content being more valuable over time. And now, of course, everyone wants to get into content and they’re looking for what we bought eight years ago, nine years ago. So same thing, we think, can be true in international, it can be true in connectivity, in broadband. Our job is to be one step ahead and then eventually come to the investors and try to make the case once we’ve got the goods to prove it,” he concluded.

Viewer calls taken by Cramer

Fortinet (NASDAQ:FTNT): Cramer likes cybersecurity stocks in this order – Proofpoint (NASDAQ:PFPT), Fortinet, Palo Alto Networks (NYSE:PANW) and CyberArk Software (NASDAQ:CYBR).

Marathon Petroleum Corp. (NYSE:MPC): It’s the go-to stock for oil.

Under Armour (NYSE:UAA): Nike (NYSE:NKE) is still doing better.

Will NAFTA ignite the car industry? No. Cramer thinks that Union Pacific (NYSE:UNP) is the play on NAFTA.

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