Jim Cramer, host of CNBC’s Mad Money, on Wednesday, shared a practical strategy for navigating a hot market: be willing to pay a premium for high-quality stocks rather than risk missing out on strong upside potential.
Cramer emphasized the importance of discipline in a heated market. He recalled a lesson from his early career where a fellow trader would “divide stocks by 10” to make their prices seem more palatable. He used the example of Bloom Energy (NYSE:BE), explaining that a $230 stock could be perceived as a $23 stock, making it psychologically easier to invest in high-momentum stocks.
“Would it really kill you to pay $24 for a $23 stock?” Cramer said. “The answer is no.”
Despite being a “price-sensitive buyer”, the CNBC host suggested a flexible approach of applying this “must-own” mindset to a small number of high-conviction stocks, particularly in a stable interest rate environment supporting the bull market.
Cramer noted that stocks of chipmakers Micron Technology (NASDAQ:MU) …
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