The stock market is pricing in a ton of negativity right now, Jim Cramer told his Mad Money viewers Thursday, and it's doing it a lot faster than you'd think. And when the negativity is done, investors need to be prepared for a big rally.
Today capped off the worst quarter for the stock market since March of 2020, right at the onset of the pandemic. Back then, everyone was positive that Covid lockdowns would send us into recession, which led companies everywhere to cut back on their orders.
But, as it turns out, everyone was wrong. Dead wrong. Companies shouldn't have been hitting the brakes, they should have been shifting into overdrive and ordering more, lots more.
Why? Because Covid created a fundamental shift in our economy, ushering in the remote work revolution. That revolution led to the need for more technology, more home offices, more homes in general, new cars and even new places to live. People flocked from the cities to the suburbs, fixed up their homes, quit their jobs, retired early, and countless other things that no one predicted.
Flash forward two years and we may be over the hump, with supply chains finally catching up and prices, hopefully, poised to head lower. We're beginning to see home prices plateau and autos return to dealer showrooms. In fact, we could suddenly find ourselves with too much of everything.
That's why stock prices are retreating. Between the Federal Reserve raising interest rates, Russia's war with Ukraine crimping oil supplies, and two years of a pandemic, our economy may already be self-correcting. We just don't know it yet.
Executive Decision: Palo Alto Networks
In his first "Executive Decision" segment, Cramer spoke with Nikesh Arora, chairman and CEO of Palo Alto Networks (PANW), the cybersecurity company helping to keep us all safe in the digital world.
Arora said that in today's world, everyone is vulnerable, which is why it's so important to be vigilant and prepared for attacks when they happen. Many hackers have gone from hobbyists to professionals, he said, and they're targeting digital infrastructure, including services, software and frameworks that everyone uses.
There are also cyber threats from Russia that everyone needs to take seriously. If Russia attacks, they won't be looking for ransom, they will be out for chaos and destruction.
Palo Alto Networks is constantly scanning its customers, looking for anomalies and using artificial intelligence to stop attacks as they occur, before damage can be done.
Which Dollar Store Has Value?
When inflation rears its ugly head, America flocks to the dollar stores. But not all dollar stores are created equal. One one hand, demand is up, but so too is the cost, packaging and transportation of everything the dollar stores sell.
When forced to choose between Dollar General (DG) and Dollar Tree (DLTR), Dollar General had been the winner for years. Shares of Dollar General were up 193% between 2015 and 2020, compared to Dollar Tree rising just 50%.
But with pressures rising, the two companies took different approaches. Dollar Tree opted to raise prices, while Dollar General doubled down on lower prices. When Dollar Tree last reported, they delivered strong earnings and strong guidance, while Dollar General was only able to squeeze out a penny-a-share earnings beat.
Dollar Tree also has the added benefit of an activist investor pushing the company to deliver on its promises. That's why if forced to choose today, Cramer's going with Dollar Tree.
Cramer Does His Homework
In his "Homework" segment, Cramer followed up on a few stocks that stumped him during earlier shows. He said that Alto Ingredients (ALTO) is a highly speculative stock, but one that might deserve your attention. That's because the company, formerly known as Pacific Ethanol, has now diversified into bio-based alcohols used in everyday items including health, beauty and food. Plus, with gas prices at record levels, ethanol is also making a comeback.
Next up was Gladstone Land (LAND), an agricultural REIT that Cramer said is very well run and in demand as food around the globe is disrupted by Russia's invasion of Ukraine. Unfortunately, the stock is already up big, trading at 46 times earnings, which means investors need to wait for a sizable pullback.
Lightning Round
In the Lightning Round, Cramer was bullish on Tesla (TSLA) and Kosmos Energy (KOS).
Cramer was bearish on EVgo (EVGO), Gevo (GEVO), AT&T (T)and RADA Electronic Industries (RADA).
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