In the wake of President Trump’s latest tariff announcements and the subsequent market downturn, CNBC’s Jim Cramer is urging investors to revisit a winning strategy from the past: the playbook that triumphed after the dot-com bubble burst in 2000. Thursday saw a significant market correction, with the Dow, S&P 500, Nasdaq, and Russell 2000 all experiencing substantial losses. However, Cramer believes that certain sectors are uniquely positioned to weather this storm and even thrive.
Cramer emphasizes the importance of investing in domestic companies possessing robust pricing power and demonstrating consistent demand, even amidst economic uncertainty. He specifically highlights the healthcare sector, focusing on drug distribution, insurance, and pharmaceutical companies as offering steady, reliable growth. His top picks include Cardinal Health, Bristol-Myers Squibb, and UnitedHealth.
Beyond healthcare, Cramer suggests looking towards utilities, lower-priced retailers, telecommunications, and consumer packaged goods companies. These sectors are seen as relatively resilient during economic slowdowns. He recommends Duke Energy, TJX, AT&T, and Procter & Gamble as examples of promising investments in these areas. Furthermore, he points to companies in fintech (like Intercontinental Exchange) and real estate (like Ventas) with minimal credit risk as attractive options.
Interestingly, Cramer also identifies potential beneficiaries of the new tariffs. Defense contractors, such as Boeing and Lockheed Martin, could experience increased demand if other countries seek to appease the administration through significant orders. While acknowledging the allure of the high-flying tech and enterprise software sectors, Cramer advises caution, suggesting that investors temporarily pare back their holdings in these areas. He believes that the strategies successful in the aftermath of the dot-com bubble remain relevant today, and that the same types of companies will likely perform well in this new environment.
Cramer’s advice is to focus on the core principles that have historically driven success during periods of market instability. He believes that a well-diversified portfolio, focusing on companies with strong fundamentals and minimal credit risk, will be best positioned for success. While tech may return to its prominence, for now, a more conservative approach aligns with his current market outlook. He concludes by emphasizing the importance of learning from past market cycles and adapting strategies accordingly.
