When all else fails, well, that’s pretty much the bottom, Jim Cramer told his Mad Money viewers after another gloomy Monday on Wall Street. This was the day we saw the last beloved sector of the market — oil and gas — start to sell off. With nothing left to sell, the bottom can’t possibly be far away.
It’s hard to recommend stocks when everything is falling. Even a stock like Nvidia (NVDA) – Get NVIDIA Corporation Report, which now trades at just 30 times earnings, is cheap when compared to its peers. But with its peers also selling off, even that great valuation is being called into question.
There are still a number of different groups that are selling stocks. The first group is looking for income, taking refuge in the safety and 3.3% yield of the 3-year Treasury bond. Those investors aren’t likely to come back.
The second group of sellers are the money managers and hedge funds that are being forced to sell in order to meet margin requirements. A similar group of money managers is being forced to sell just to stay alive. With stocks like GoodRX (GDRX) – Get GoodRx Holdings, Inc. Class A Report plunging 33% and Rivian (RIVN) – Get Rivian Automotive, Inc. Class A Report falling 20%, there are few places left to hide.
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The fourth group of sellers are the individuals who bought meme stocks and other speculative things, like crypto, and now have been totally blown out of the water.
But all of this selling will eventually be a blessing, Cramer concluded. Eventually, the selling will end, and those of us who survived will live to play another day.
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