Important points
CNBC’s Jim Cramer said investors need to stay in the game as the war between the U.S. and Iran continues, noting Tuesday’s partial market recovery proves how quickly the situation can change. “Think of these as companies that you’re investing in, not trading cards that you’re shuffling around,” Kramer said on “Mad Money.” Wall Street got off to an ugly start Tuesday, with the Dow Jones Industrial Average dropping more than 1,200 points in the early going. At session lows, the S&P 500 was down 2.5% and the Nasdaq was down 2.7%. Cramer said stocks are trading like investors are worried about a protracted war between the U.S. and Israel that will be difficult to win. Rising oil prices also weighed on stock prices in the early stages. However, stocks rallied throughout the day, with the index ultimately closing well off its lows, although it remains firmly in negative territory. President Donald Trump offered several comments that appeared to help sentiment, including saying the U.S. Navy would escort tankers passing through the Strait of Hormuz following Iranian threats to attack ships attempting to cross the vital oil waterway. WTI, the U.S. oil benchmark, settled at $74.56 per barrel, well below its trading high of nearly $78. “If you take action in the morning, if you do the proverbial ‘get out now,’ once the averages start bouncing off the lows, there’s no time to go back. That’s never going to happen,” Kramer said. “If you think you need to take action against every drone and every missile, trade in prediction markets. Get out of your house. That’s gambling,” he later added. “I like to focus on investing, which has less to do with war than you might think and a lot more to do with the performance of the companies themselves.” And Kramer said there are interesting developments beneath the surface of the index that investors shouldn’t ignore. Specifically, Cramer cited a group of enterprise software stocks that he calls the “Big Four”: Adobe, Salesforce, ServiceNow, and Workday. The group has been buzzing in recent weeks over concerns about AI disruption. But on Tuesday, all four stocks rose, led by Workday, which rose 7.2% and was the best performer in the S&P 500. Kramer said the gains in the “Big Four” were noteworthy because existential concerns about software are spreading and hurting alternative asset managers’ stocks. The bottom line, Cramer says, is that investors need to remember that “panic is not a strategy.” Disclosure: Cramer’s Charitable Trust, a portfolio used by CNBC Investing Club, owns stock in Salesforce. Subscribe to CNBC Investing Club today to follow Jim Cramer’s every move in the markets. Questions about Cramer’s disclaimer? Call Cramer: 1-800-743-CNBC Want a deeper look into Cramer’s world? Punch him! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Have questions, comments, or suggestions about the Mad Money website? madcap@cnbc.com
