“If you own the turbocharged growth stocks … you either have to toughen up for the pain or cut your losses on the next big upside, because we’re in a new market that’s very different from last year,” the “Mad Money” said the host. “What worked in 2020 didn’t work in 2021 and it won’t change, so get used to it. “
This explains the bombardment of stocks like Tesla, Teladoc Health, Square, Roku, Shopify, Zillow, Twilio, Spotify, Coinbase and Exact Sciences, Cramer noted. Most of their stocks are down double digits in May.
Cramer called them “WoodStocks”, nicknamed in honor of Cathie Wood, portfolio manager of the famous company Ark Invest. Ark’s largest holdings are stocks, whose exchange-traded funds include ARK’s branded funds of Innovation, Genomic Revolution, and Fintech Innovation, among others.
“Cathie Wood is fantastic at identifying [long-term growth] stocks like Twilio, but it’s not stocks for all seasons, ”Cramer said. They don’t work in this environment and… they really don’t work in an inflationary environment where bond yields are rising. “
Commenting on the pullback in tech stocks, Wood told CNBC on Friday that she “loved[s] this setup “for the long-term prospects of the business.”
Cramer expects more pullback in the tech cohort until inflation fears dissipate.
“It ends when inflation disappears or is tamed in some way or another,” he said. “With the exception of wood and some semi-finished products, there is no indication that the raw materials are getting cold anytime soon.”