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CNBC “Mad Money” host Jim Cramer stated that Big Tech stocks like Apple, Alphabet, or Amazon are a lot better repositories of wealth than bonds, owing to their robust stability sheets and monetary efficiency.
The TV persona and former hedge fund supervisor made that declare in a latest episode of the CNBC present, and used the Big Tech stocks as a instance of why buyers might have to “re-think [their] notions about stocks versus bonds.”
“This year we’re witnessing the passing of the torch. Bonds were the safest assets back in ’82, back when treasuries yield double digits,” Cramer stated. “Now they’re risky assets, maybe riskier, riskier than anyone thinks.”
Cramer stated that for a lot of main firms that he follows, the fairness aspect is way safer than bonds. That interprets to huge tech stocks like Facebook, Apple, Amazon and Microsoft being a “much safer repository for wealth.”
Although he cautioned that this is not the case for all firms, he stated that the Big Tech stocks are sitting on more money than most nations. Microsoft has $138 billion, Alphabet has $133 billion, and Apple has $192 billion.
“They survived The Great Recession, and what happened? They came out stronger. The countries didn’t,” Cramer stated. “In the great pandemic, they’re not just thriving but they are actually putting up unbelievable numbers.”
Cramer added that Facebook, Apple, Amazon, and Microsoft are the “Fort Knoxes of our era.”
Although the “Mad Money” host admitted that it is a model new thesis, he stated that the actual lesson of the period is that “stocks are the ones that don’t need government help here.”
“That means if you’re a young, wet-behind-the-ears broker at Goldman Sachs, I would tell you to forget all those bond ideas,” Cramer concluded. “Just tell your clients to buy the stocks of terrific companies with nation state-sized balance sheets. You’ll do much better with a heck of a lot less long-term risk and more dividends.”
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