CNBC’s Jim Cramer offered advice on how to deal with declines, using Tuesday’s drop session as an example. He encouraged investors to use widespread losses as a buying opportunity, noting that the index had managed to rebound on Wednesday.
“If you trust the market and don’t believe that one stock dominates the whole tape, if you don’t consult fear, if you consult opportunity,” he said. “Days like yesterday might be a way to finally get a chance to start working on it. Not all at once, for fools, but gradually.”
Major indexes fell on Tuesday, mainly due to Palantir Investors are concerned about the inflated valuations of many of these tech companies, and artificial intelligence stocks are no different. Palantir’s losses come on the heels of the company posting wins on the top and bottom lines and providing stronger-than-expected guidance.
On days like Tuesday, Cramer suggested it would be wise to look for stocks that just reported strong quarters, but whose shares have fallen due to Palantir’s losses. He recommended that investors choose companies they are familiar with and have done extensive research.
He named two companies that he believes are good buys based on their weaknesses. Shopify and mcdonalds. Shopify is a major futures trading company, Cramer said. He noted that management has said it expects a strong year-end sales season, and suggested Tuesday’s decline in stock prices was due to a sharp decline rather than a problem with the company’s performance. Mr. Kramer said he was not concerned about McDonald’s poor performance, saying it was a difficult time for the restaurant industry as a whole. Mr. Kramer said that unlike some of its burger chain peers, McDonald’s has immense size and strength and is working to lower prices as consumer spending slumps.
“As we saw today, yesterday was a good time to start buying,” Kramer said. “And even if you miss it, I hope you keep this experience in mind the next time the average is broken.”
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