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Cramer: If you're investing based on Trump's tweets, you're doing it wrong

CNBC logo CNBC 3/14/2018 Elizabeth Gurdus
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As the market parsed Tuesday's tidal wave of news, from a blocked Broadcom-Qualcomm deal to an ousted Secretary of State, CNBC's Jim Cramer issued a warning to investors.

"Can we take a step back for a moment? This is not a good way to invest, people. Your strategy should not change based on every other presidential tweet," the "Mad Money" host said.

"Instead of focusing on every little thing from the White House, how about evaluating companies on their own merits? Too old-fashioned for you?" he continued. "Maybe don't stress too much about the tweets unless you want to invest in Twitter."

Cramer turned to the technology space to illustrate his point. Paired with the blockage of Broadcom-Qualcomm, fears of Chinese retaliation to President Donald Trump steel and aluminum tariffs fueled investors to sell out of tech stocks in Tuesday's trading session.

But Cramer wouldn't fold so easily.

"Look, there's China-oriented tech and non-China-oriented tec — you can have a smattering of both in a diversified portfolio, which you know I always preach, or you know what? You can just ignore Chinese exposure completely," the "Mad Money" host said.

Read more from Jim Cramer and other top money experts

For example, the high-growth stocks of Amazon, Netflix and Google parent Alphabet are all insulated from any pushback from the People's Republic, Cramer said.

Cramer added that his newly anointed "cloud kings" were also safe, non-China-oriented investments: Workday, VMware, Salesforce.com, Red Hat, ServiceNow, Adobe and Splunk.

But investors who sold their shares in companies that Trump directly attacked in his past tweets weren't exactly playing it safe, either, Cramer argued.

"Suppose you only invested in the companies that President Trump has directly attacked in his tweets," Cramer said.

"First he went after United Technologies for wanting to move a Carrier plant to Mexico — stock's up 23 points since then," he said. "Then he trashed Boeing for charging too much for the new Air Force One. That $152 stock back then has gone to $338. Then he went after Lockheed Martin. You left $81 bucks on the table if you walked away from that one."

While he didn't want investors to ignore the president's tweets or write off the changes to U.S. trade policy, Cramer did want investors to consider the circumstances before selling because of a tweet.

"I am saying that if you have a diversified portfolio — some health care stocks, some banks, some consumer packaged goods stocks, some tech — you won't need to re-position every time the fickle administration changes its view," the "Mad Money" host said.

And with the president using the stock market as a rating system, Cramer argued that it wouldn't be in Trump's best interests to seriously debilitate stocks anyhow.

"If you're going to react to every gesture, every comment, every tweet this president makes, you're going to end up losing sight of the bigger picture: as much as the president wants to be tough on trade or on companies that take our jobs offshore, he wants the stock market to go higher even more," Cramer said.

"Look, it's an unholy alliance. But judging by the stock market's trajectory since the election, it's one that favors the bulls, not the bears."

Disclosure: Cramer's charitable trust owns shares of Broadcom and Alphabet.

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