Jim Cramer, the host of Mad Money, expressed strong views regarding day trading on Friday, urging novice investors to avoid the temptation of risky market practices. His warning followed an article from The Wall Street Journal, titled “More Men Are Addicted to the ‘Crack Cocaine’ of the Stock Market,” which discussed how an increasing number of investors are developing serious gambling addictions through speculative trading. Cramer emphasized:
“Unless you’re a professional, I’m dead set against day trading, particularly the kind that is based on zero-days-to-expire or zero DTE options. These are options that expire the same day.”
He compared these trades to gambling, urging that they be stopped, as they serve no purpose other than to hook people on the addictive nature of the stock market. Cramer, who highlighted that he has moved away from day trading since retiring, stressed the importance of a more cautious and informed approach. He now advocates for “buy and homework,” his version of buy-and-hold investing, which reflects his belief that things can change with a company and require continuous evaluation.
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Cramer called for self-regulation within the industry and said:
“There’s no reason to push people into zero day options other than pure greed. The industry’s encouraging bad behavior, that’s just plain wrong.”
Cramer further pointed out that day trading is not limited to options but extends to other high-risk investments, such as cryptocurrencies, uranium stocks, and emerging technologies like quantum computing, commercial space, and future mobility stocks. While he expressed confusion over who creates these stocks, he noted that their volatility and high trading volumes indicate they are often used as vehicles for speculative trading rather than sound investments.
Cramer questioned whether the markets could eliminate this behavior, but he firmly believes that a collective value judgment can be made. He particularly criticized the brokerage houses that profit from encouraging risky behavior, stating that these firms must be held accountable for promoting an environment that feeds into people’s gambling instincts.
“After all the markets were created for investing, not day trading on the direction of stocks. There’s a big difference between making an informed investment and pure gambling.”
He called for stronger measures to protect individuals from the dangers of day trading, suggesting that, while it may be impossible to completely eliminate high-risk trades, at the very least, these products should come with warning labels. He condemned those who continue to push these high-risk options, asking whether they truly need the money so badly, and saying, “Shame on you.”
Jim Cramer’s Latest Lightning Round: 8 Stocks in Focus
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For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 20. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
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Jim Cramer’s Latest Lightning Round: 8 Stocks in Focus
8. Texas Pacific Land Corporation (NYSE:TPL)
Number of Hedge Fund Holders: 20
Cramer mentioned that he previously liked Texas Pacific Land Corporation (NYSE:TPL) but also cautioned to “hold off”.
“Alright, this stock has been just a horse, but all really it is just royalties off of oil. We have liked it, but it’s now gone up so much. I’ve gotta tell you, I want to hold off.”
Texas Pacific Land (NYSE:TPL) is a company focused on land and resource management, water services, land leasing, and the sale of materials. According to management, the company is able to take a more proactive approach with its surface assets, allowing greater control over how and when these assets are developed. Although revenue from non-oil and gas sources is currently minimal, it has signed numerous contracts over the past few years to diversify its portfolio.
Over the past 24 months, the company has contracted over 700 megawatts of solar energy projects that are currently in development. Additionally, as per the management, the company is actively involved in several other projects, including seven utility-scale battery projects, four Bitcoin mining operations, and 78 megawatts of active power generation, with another 50 megawatts in development.
Texas Pacific Land (NYSE:TPL) management has expressed confidence in the opportunities emerging outside of the traditional oil and gas sector. They noted a growing interest in wind power and mentioned ongoing work in the data center space, a sector the company has been exploring for some time. Furthermore, management emphasized that the company is well-positioned to provide both land and water solutions as these new opportunities continue to unfold in West Texas, an area where the company has a significant presence.
7. Under Armour, Inc. (NYSE:UAA)
Number of Hedge Fund Holders: 28
Cramer called Under Armour, Inc. (NYSE:UAA) a “great spec” and remarked:
“Okay, here’s the way I look at it. I think it’s a great spec. We have to have a couple quarters that are good. Remember, Nike just had a real hard time. Hard to imagine everybody doing well if Nike’s coming back with a vengeance. So let’s be careful, but it is a spec and a good one.”
Under Armour (NYSE:UAA) designs, markets, and distributes performance apparel, footwear, and accessories, offering products for various sports and activities. A significant part of the company’s business model has been its loyalty program, which plays a crucial role in fostering repeat business and attracting new customers. October marked the first anniversary of the U.S.-based UA Rewards program, which has grown significantly over the past year.
Early in the second quarter, the company upgraded existing accounts, bringing an additional 6 million ua.com members into the program, increasing the total number of members to nearly 13 million. As of now, active members contribute to roughly half of the company’s direct-to-consumer revenue in the U.S.
The benefits of the loyalty program are evident, with members showing nearly double the 90-day repurchase rate compared to non-members, resulting in approximately 50% higher revenue per consumer. Across the U.S. and Asia-Pacific regions, Under Armour (NYSE:UAA) now has over 28 million members, a number that continues to grow. Despite the success of this program, management has provided guidance for the third quarter of Fiscal 2025, anticipating a revenue decrease of around 10%.
This projection reflects ongoing challenges in North America and a deliberate reduction in promotional activities within the company’s DTC operations. Additionally, revenue pressure is expected to intensify in the fourth quarter due to timing differences in the flow of business between Q3 and Q4.