The market has so much technology that it cannot see the forest through the industries. If it’s not the slowdown in the cloud, it’s who’s leaving private Twitter now, or how disappointed CEO Bret Taylor is about to leave Salesforce ( CRM ). Meta Platforms ( META ) Mark Zuckerberg could sneeze and Amazon ( AMZN ) CEO Andy Jassy could cough, and it’s a bigger deal than United Airlines’ ( UAL ) order of 100 Dreamliners from Boeing ( BA ). We don’t pay much attention to industries anymore. There aren’t many of them. We are so used to being held hostage by negative forces that they are not worth our attention. This is wrong. The Dow Jones Industrial Average has done so much better than the average semiconductor company or even the above-average enterprise software company that it’s crazy that we even care about some of the latter. 600 companies founded in the last two years even rent most of your brain. Advertising, which turns out to be the Achilles heel of the Internet and all things media, has seemingly disappeared. It’s not enough to feed all the players, and it seems no one can reach the 18-24 year olds no matter what they spend. So they save a fraction of what they spent before. It’s so bad that we cheer when a semiconductor company like Marvell Technology ( MRVL ) guides lower and it pushes the stock down a bit. This gives the market hope that the inventory glut for chips is coming to an end. Meanwhile, uncertain industries fly in any S&P 500 run, where you’ll never find enough stock to find sellers. I’ll touch on the intriguing ones – but first let me say that the biggest problem with most of these technologies is that there is so much supply at each level. Someone is always the seller. There is always a penny worth of goods. And it’s big. The orders, if you can hear them, are, “Sell 50,000 shares at five cents apiece to the next dollar, and if there’s enough time left at the end of the day, I’ll reload when I get my report. I don’t want to hurt the stock too much because there’s a lot behind it.” There’s endless sales in all things cloud-related, and it’s not just about lowering the price target. It’s from insiders who feel an era is over and now they’re all competing with each other, even Amazon, Alphabet ( GOOGL ) and Meta are getting it. The biggest problem with meta is how much time Zuckerberg is actually working on his alleged metaverse pipe dream instead of his highly profitable but slow-growing Instagram, you know you’re too deep in the weeds. Now I want you to buy Caterpillar (CAT) stock. When you’re in the deep stages of Federal Reserve interest rate tightening, I’d normally say this might be the best short film in the book. Shorting a stock means betting that it will go down. But not this time. There is no way CAT can fulfill their orders. Whether it’s coal because Europe is taking so many nuclear plants offline, natural gas is so expensive, or the bulldozers needed for all the roads this country is about to build, every industry needs more than it produces. democrat’s infrastructure bill favoring local produce. Meanwhile, its raw material costs are going DOWN. Caterpillar emphasized China and emphasized oil and gas. While state-owned companies are slowing drilling, private equity firms are drilling like crazy to cover cash flow. Take a look at how CAT has performed on days. Not on sale. None. It’s a decent day, and always Caterpillar shares are up three points. Why not; there are 527 million shares outstanding, down 20 million shares. What enterprise software company can say that? There is no compensatory issue with the stock base. The stock is valuable. CAT sells at 17x REAL earnings, not FAKE or MADE up earnings. We have to call this non-GAAP adjusted earnings per share nonsense from the West coast, which is very similar to what General Electric (GE) was doing before the collapse. My order to buy 100,000 shares of Caterpillar puts it ahead by 2 points. In a year where the S&P 500 has fallen 14%, CAT has gained 14% year to date. Not to mention its annual dividend yield of 2%. Last week I met Lal Karsanbhai, CEO of Emerson Electric (EMR). It transforms this old-but-great manufacturer of valves and appliances into a company that digitizes your equipment, automates your factories while cutting waste. In less than two years, Karsanbhai sold slow-growing units, bought faster-growing businesses, and co-founded others in ways arrogant software types could only dream of. Like Caterpillar’s stock, EMR is flat: up 4% year over year. However, the shares have gained 18.5% in the last three months. I think the idea of bringing in an Emerson to innovate, to automate and to be cleaner—which also has a big job in improving the environment—is one of the first calls I would make if I ran the industry. This is a stock at 18 times earnings. Anything that happens to Boeing, I’m always bittersweet. We sold a little high, we sold a little low, but most of all we were annoyed by his constant mistakes. We wanted to play aerospace with a lot of travel, so we did that with Honeywell (HON). Here is another story that never ceases to amaze. Another company reconfigured some of the most important parts of the plane, including not just Boeing, but also Airbus, with process cleaning chemicals, machinery that automates factories, climate controls and the cockpit. Honeywell shares trade at 25 times earnings, but its growth is accelerating and it has cash and a balance sheet ready to work for whatever it takes. HON is another, up 5% year-to-date and over 17% over the past three months. We know that we have gone through an arsenal of low-tech military equipment like NATO. But last week’s big funding boost will give Raytheon Technologies ( RTX ) the orders it needs to boost its numbers for 2023. I think the anti-missile products that Raytheon specializes in are now being sent to NATO members to do whatever they want. That means taking them to Ukraine to protect them from Russia’s now nine-month occupation. Meanwhile, Raytheon has a backlog of orders in aerospace, both military and commercial. The buyback is in place after being reconfigured as part of the merger between United Technologies and Raytheon. The only thing holding this company back is a lack of engineers. Can people in the West study military engineering? They learn to do it better. RTX is up 17% year to date. I can include many companies like Eaton Corporation (ETN) for pumps, valves and what you need for electric vehicle charging; Illinois Tool Works (ITW) for equipment such as welding, automotive and polymer growth parts and all kinds of high demand products; or Agilent Technologies (A), is a test and measurement company for all types of industries that require precision and accuracy. You just can’t have them. You won’t know when they stop going straight up. And you can’t just buy them. Jeff Marks, portfolio director of the Investment Club, and I went to him last week, and I said we need to own Emerson as soon as we can. But one look at the stock tells us it’s moving too fast. The thing is, they all have it. I say let’s take a serious break from the software companies that allegedly ate everything for breakfast and start discussing the real winners since the November pivot—the companies that should have collapsed, but instead reinvented themselves and became part of them. a new industrial economy that is automated and digitized and does not need customer relationship management because it has many customers. (Jim Cramer’s Charitable Trust is long CRM, META, AMZN, GOOGL and HON. See here for a full list of stocks.) As a subscriber to the CNBC Investment Club with Jim Cramer, you’ll receive trade alerts before Jim makes a trade. trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY. 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Jim Cramer on the NYSE, June 30, 2022.
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The market has so much technology that it cannot see the forest through the industries. If it’s not about the slowdown in the cloud, it’s about who’s leaving private Twitter now, or how disappointing CEO Bret Taylor’s departure is. Salesforce (CRM). Meta platforms‘ (META) Mark Zuckerberg can sneeze and Amazon (AMZN) CEO) Andy Jassy cough, and it’s something bigger United Airlines‘ Order of 100 Dreamliners from (UAL). Boeing (BA).