We recently compiled a list of the Jim Cramer’s Latest Game Plan: 15 Stocks to Watch. In this article, we are going to take a look at where Berkshire Hathaway Inc. (NYSE:BRK-B) stands against the other stocks in Jim Cramer’s latest game plan.
Jim Cramer, host of Mad Money, recently weighed in on the factors that will shape market movements this week, pointing to the Federal Reserve’s upcoming meeting and a slew of corporate earnings reports as key developments. However, despite the importance of these earnings, Cramer believes that the presidential election will take center stage and dominate the market’s attention.
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While acknowledging the significance of the election, Cramer emphasized that the Federal Reserve’s next decision is perhaps even more crucial for the markets. He noted that the bond market has been moving in an unfavorable direction, with the situation further complicated by a disappointing non-farm payroll report.
Though this report was skewed by hurricanes and labor strikes, it initially sparked a positive reaction in the bond market, pushing rates lower. Cramer had hoped that this would signal a positive shift, but the optimism was short-lived, as bond sellers quickly drove rates back up to their highest levels since early July.
“In my opinion, the Fed needs to cut rates again. In the last couple weeks, we’ve heard from too many businesses that have made it clear that we have a real slowdown on our hands. Economy’s a little shaky.”
Cramer also reflected on the Fed’s decision to reduce rates in September. He acknowledged that the bond market reacted negatively to the rate cuts at the time despite an economy that appeared relatively strong and a healthy labor market. Cramer discussed the possibility that if the Fed were to cut rates again, the market could see another unfavorable response. However, he remained unconcerned about this potential backlash, arguing that a rate cut could help to generate optimism in certain sectors.
“At this point in my view, if the Fed cuts rates next week, psychologically there’s some hope that we could see a pickup, particularly in housing and autos, two industries that seem to be losing strength by the day.”
Cramer highlighted that both presidential candidates appear willing to expand the federal budget. His main concern, however, was whether either candidate would be able to push their proposed agendas through Congress, a process he described as extremely difficult. Cramer noted that, in his opinion, presidential candidate Trump would likely be a bigger proponent of increasing the budget deficit than presidential candidate Harris, particularly due to the tax cuts Trump favors, which tend to result in larger deficits.
Stating his bottom line, Cramer said:
“… At the end of the day, the market’s still going to be hostage to the election, and perhaps more important, to the Fed meeting.”
Our Methodology
For this article, we compiled a list of 15 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 1. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of insurance professionals in a boardroom overlooking a city skyline.
Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 120
Cramer commented that Berkshire Hathaway Inc. (NYSE:BRK-B) tends to experience good quarters and praised Warren Buffett.
“There’s no such thing as a bad quarter at Berkshire, right? Because we’re dealing with Warren Buffett. I do want to know what he thinks about the election… he’ll make money no matter what.”
Berkshire Hathaway (NYSE:BRK-B) operates globally through subsidiaries in insurance, freight rail, utilities, manufacturing, and retail, providing a wide range of services including insurance, energy generation, and various consumer and industrial products. The company also engages in logistics, construction, and distribution across diverse sectors.
In the third quarter, the conglomerate’s operating earnings decreased by 6%, totaling $10.1 billion compared to $10.8 billion in the same quarter of the previous year. This decline follows a record high of $11.6 billion in operating profits reported in the second quarter. Revenue for the quarter reached $93 billion, a slight decrease of 0.2% year-over-year.
The company’s net earnings per average equivalent Class A share stood at $18,272, while Class B shares reported net earnings of $12.18. At the end of the quarter, its cash reserves rose significantly, exceeding $325 billion, up from $276.94 billion as of June 30, 2024.
Furthermore, during this latest quarter, Berkshire Hathaway (NYSE:BRK-B) reduced its stake in Apple, the leading smartphone manufacturer, as well as in Bank of America, the second-largest lender in the United States, by over 20%, as indicated in its recent quarterly filing.
Overall BRK-B ranks 1st on our list of the stocks in Jim Cramer’s latest game plan. While we acknowledge the potential of BRK-B as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BRK-B but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.