Investment guru Jim Cramer said on Monday that “we’re in some wacko market” because normally chasing stay-at-home stocks trading at off-the-charts multiples to sales wouldn’t make sense.
Cramer cited Zoom Video Communications at about 50 times sales and cloud company Snowflake at about 100 times sales as worth owning, advising people to buy and invest in stocks assuming that the coronavirus pandemic is not going away anytime soon, CNBC explained.
“Zoom is doing triple what it was doing like three months ago. And I know it’s 50 times sales,” the “Mad Money host said on CNBC.
“I want growth that is pure and dominate,” Cramer added, advising people to buy and invest in stocks assuming that the pandemic is not going away anytime soon.
“Do I really want to be in a world where I think Covid is going to end and we’re going to start driving like mad and oil is going to go up? I’m not buying it. I’m not buying that better-than-ever world,” Cramer said on “Squawk on the Street.”
Meanwhile, a barrage of policy and economic shifts will temporarily put an end to the outperformance of technology stocks and instead lift laggards such as banking and auto shares, according to strategists at Goldman Sachs Group Inc., among a chorus of investors and strategists increasingly warning of an imminent shift in market leadership.
Rising bond yields, the expectation of at least one Covid-19 vaccine approval this year and the potential of a so-called Blue Wave in November’s U.S. elections could lead to a reversal of fortunes for the sector that has been the biggest stock market winner of the pandemic so far, a team including Peter Oppenheimer wrote in a recent note, Bloomberg reported.
The strategists cut their recommendation on technology stocks to neutral and upgraded banking and auto shares to overweight. They also lowered their view on food, beverage and tobacco stocks to underweight.
“In the next few months we expect some policy and economic shifts that support a temporary rotation; and these rotations can be quite large,” the strategists wrote. “The secular trends still favor growth or growth-defensive stocks.”
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