What Happened: The “Mad Money” host said he does not share Buffett’s views and advised individual investors to adopt a hybrid investing model, adding that he favors the investment philosophy of Peter Lynch.
“I respect Warren Buffett, but I’ll always be a Peter Lynch guy,” Cramer said.
Lynch is a legendary investor known for his management of the Magellan Fund at Fidelity Investments between 1977 and 1990. His books "One Up on Wall Street" and "Beating the Street" have been big bestsellers and are considered investing classics.
Lynch’s philosophy is based on an investor leveraging their ability to observe, study and act on a stock.
Cramer also recommended a list of stock ideas for investors to test Lynch’s principles. The list includes Walmart Inc. WMT, Costco Wholesale Corporation COST and Gap Inc. GPS.
According to Cramer, one or two of these reopening plays will do well with an index fund in an investor’s retirement account.
Why It Matters: At Berkshire’s annual meeting on Monday, Buffett had highlighted the importance of having a well-diversified portfolio that includes index funds, citing the uncertainty around individual stocks.
The billionaire investor and his long-time business partner Charlie Munger also criticized popular trading app Robinhood for encouraging a casino-like atmosphere and likened the inexperienced retail investors who joined into the stock market over the past year to gamblers.
The higher personal savings levels and stimulus checks from the government encouraged amateur investors to dabble in the stock markets and has helped accelerate the retail trading boom.
Shares of heavily shorted stocks such as GameStop Corp. GME and AMC Entertainment Holdings Inc. AMC have seen extreme volatility this year as retail traders belonging to the Reddit Investor forum r/WallStreetBets bid up the stocks to create a short squeeze.
Robinhood and other brokerages such as Fidelity, E-Trade, and TD Ameritrade continued to see elevated app downloads in February following the GameStop trading frenzy earlier this year.
Price Action: Berkshire Hathaway Class A shares closed 1.8% higher on Monday at $420,000. On the same day, the Class B shares closed 1.5% higher at $279.18.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.