Buy when Wall Street overlooks “bad news in textbook”

CNBC’s Jim Cramer on Thursday gave investors a clear signal to buy shares in valuable companies that reported bad news, but still managed to keep the shares afloat.

“The lack of new, ruined-at-the-moment-you-buy-it-shares, and the gruesome declines in very valuable companies, have merged to create an environment where Wall Street is willing to overlook some of the imperfections. Not all “But some,” said the “Mad Money”[ads1]; host.

“You’re free to overlook a flaw or two, and because stocks have become so shattered in anticipation of more rate hikes, you can be brave enough to buy a discounted product without much hesitation. I think we’ve reached that level,” he said. he added.

Cramer highlighted several instances where investors ignored “bad news in the textbook” of a company, pointing out that shares of Nvidia, Microsoft and Salesforce all fell after reporting disappointing financial results or forecasts, but managed to rise.

Cramer said he believes this new forgive-and-forget attitude from Wall Street may be due to stock market crashes falling while even valuable companies are seeing a decline.

“We are finally at the point in the stock cycle … where the guarantors are no longer pumping out the shock, these deadly IPOs that there is no appetite for,” he said. “Enough money has been lost in the new, why go back – why not go back to the old?”

Disclosure: Cramer’s Charitable Trust owns shares in Microsoft, Nvidia and Salesforce.