CNBC’s Jim Cramer said Monday he believes investors can search for beaten stocks to buy after a difficult time on Wall Street. But he emphasized the need for discipline.
“At the moment there remains a big risk, although with the Nasdaq damage and the overall market 5% below the highs I am not trying to tell you, ‘Oh, here comes the sell-off’,” said the “Mad Money,” said the Host after all three major US stock indices were in the red. “We can start looking for buying opportunities on the way down.”
“But we have to buy stocks bit by bit on the way down,” added Cramer, “because if you just get in on every dip, well, you get slaughtered.”
The S&P 500 fell 1.3% on Monday to close at 4,300.46, its lowest close since July, while the tech-heavy Nasdaq Composite lost 2.1% and is now 4.7% down over the last five sessions. The blue-chip Dow Jones Industrial Average fell 323.54 points, or 0.94%, on Monday.
Although certain stocks reached attractive levels, he warned, Cramer said it would remain a “tough” market. Investors are no longer reliant on just buying every dent after Wall Street’s robust rally from March 2020 lows, and high oil prices are causing inflation concerns, he said.
There was also “tremendous” profit taking on technology stocks, which weighed on the market as a whole, Cramer said, and continued uncertainty about Washington politics and Beijing aggression.
“Against all of this is Merck’s Covid pill … it’s a good start,” said Cramer, referring to the company’s oral antiviral treatment developed with Ridgeback Biotherapeutics. The drug manufacturers say it reduces the risk of hospitalization or death in patients with mild or moderate Covid cases by about half.
“Getting Covid under control is incredibly important, even for inflation. I think if stocks fall we could expect an oversold rally, ”said Cramer. “Nothing beats lowering stock prices to make the market more attractive. Plus, if oil prices ever fall, averages will skyrocket.”