Cramer: ‘Own the Best, Short the Rest’ in Sector
By: Bruno J. Navarro
Producer
Producer
CNBC
|
Exchange-traded funds have
affected the way investors should look at individual sectors, “Mad Money” host
Jim Cramer
said Friday.
For instance, when looking at the
retail sector in the current economic climate, Cramer prefers such names as
Dollar General
[DG 48.00
0.27 (+0.57%) ]
and Dollar Tree
[DLTR 39.03
-0.50 (-1.26%)
]
because they have the most inexpensive momentum, as opposed to ETFs.
“I can lose less than those
playing the earnings momentum game because I own the best and I’m short the
rest,” he said.
Some ETFs, such as technology,
include such a broad range of companies that focus on everything from
manufacturing computer hard drives to social media, from cloud-based services to
flat-screen monitors.
These days, just knowing the
sector isn’t enough.
Cramer said smart investors know
the subsector, as well as the growth rates within the group.
“Nothing’s worse than owning a bad
stock, as defined by weak earnings, in a bad sector neighborhood. Nothing’s
better than owning a good stock in a great neighborhood.”
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