When Janet Yellen speaks on Friday, Jim Cramer thinks she could make a case for a strong economy that is ready for multiple rate hikes .
"I bet a small tightening will turn out to be a buying opportunity, even as there are always weak-handed traders who sell on any rate increase," the " Mad Money " host said.
When Cramer listened to the stellar Toll Brothers (TOL) earnings conference call on Tuesday, it was clear to him why the housing market is doing so well. Toll Brothers dominates the high-end real estate market, building homes that average $843,000.
"You have to remember … housing punches above its weight. Meaning, when housing is strong it leads to all sorts of good things for the economy, including the desire to spend money improving your house in order to augment its worth," Cramer said.
It was the combination of nationwide home price appreciation and consistent monthly gains that catapulted Toll Brothers' stock up almost 10 percent on Monday and Tuesday.
This was important, Cramer said, because until Toll Brothers reported there was a perception that the high-end home business was becoming weaker. Therefore, many assumed that home appreciation hit a ceiling and housing had peaked.
In the past six years there have been two flash crashes, including one that occurred exactly a year ago in 2015. Cramer will be ready for the next one, and wants investors to be prepared, too .
"Fool me once, shame on you. Fool me twice, and I'm an idiot who deserves the heat," Cramer said.
The term flash crash refers a special event when the stock market drops quickly, almost in the blink of an eye. It can result in a dramatic loss of about 1,000 points on the Dow (Dow Jones Global Indexes: .DJI). Both flash crashes had a similar theme: something negative overseas either triggered, or was thought to trigger an event in the U.S. that investors couldn't grasp. It caused an immense amount of fear and paralysis.
In Cramer's perspective, it's not a matter of if a flash crash will happen again, it's a matter of when. His first rule is to never use market orders. A market order is an order to buy or sell a stock executed at the current market price. Market orders can be messy, and have no specific price allocated, so investors can get crushed by machine algorithms, Cramer said.
And while housing has been on the mend this year, investors learned on Tuesday that U.S. home sales declined last quarter. This seemed like a high-quality problem to Cramer, because the decline was caused by lack of inventory. Meaning, people want to buy homes, there just aren't enough to supply them.
Still, Cramer declared that the housing market is once again on firm footing. Ellie Mae(ELLI) is a software service company that helps lenders to streamline and automate parts of the mortgage process. It is the only player with a one-stop-shop mortgage solution that can assist things such as determining if someone is worth lending to, federal and state regulations and collecting mortgage payments.
Ellie Mae's stock has been on fire, up 60 percent for the year. The company's CEO Jonathan Corr explained that Ellie Mae aims to enable the procedure, all the way from the borrower filling out the initial loan application to the funding process.
"It's an incredibly complex process. Historically, there is lots of paper involved, a lot of inefficiency, a lot of disconnected systems. And then on top of that, it's being done in a very tight time frame … what we do, is we automate that entire process," Corr said.
Workday (WDAY) is the provider of cloud-based software for human capital management, payroll, financial management and analytics. Essentially, it automates many of the non-revenue generating back-office functions.
Workday reported results on Wednesday, and while it posted a wider than expected loss, revenue actually came in higher than projected, up 34 percent year-over-year.
The company made headlines when it announced a partnership with Samsung. Cramer spoke with Workday's CEO Aneel Bhusri, who explained the significance of the deal.
"Samsung is going through a human capital management transformation project. They really took their time, did their diligence and selected us as a true partnership. They not only are our biggest customer in APJ, they are our first customer in South Korea. So, I feel like we are entering South Korea with a bang," Bhusri said.
No comments:
Post a Comment
If you have questions or a comment about this Blog or our Company please use this section. We will do our best to review and answer within 24 hours.