Oil is slowly rebounding much to the concern of the Street that the bull outlook in the stock market might be over. Energy stocks led by W&T Offshore, Inc. (NYSE:WTI) are slowly bouncing back thanks to oil prices climbing above the $60 mark. CNBC’s Mad Money Host, Jim Cramer, believes it may be high time to borrow a leaf out of Warren Buffett’s playbook in terms of long term investing. Despite Walt Disney Co (NYSE:DIS) sinking in the market on posting impressive second quarter earnings, Cramer affirms it remains a strong pick based on its long-term prospects and solid fundamentals.
The velocity at which the stock market has resorted to the downward trend continues to be of the biggest concern to investors who fear the sell attitude could creep in. Instead of judging stocks by sudden unexpected changes in the market, Cramer affirms it would be appropriate to go long on stocks based on their long-term prospects.
The fact that supply and demand issues have not yet been sorted out does not guarantee a bull run in oil prices going forward as the downward trend may still come calling. “[..]That’s when Warren Buffett warned us not to judge our stocks on the day to day basis like today but to use the market gyration to give us prices that we like for stocks of companies we like,” said Mr. Cramer.
Taking into consideration the ongoing pessimistic views in the street, Cramer believes Walt Disney Co (NYSE:DIS) remains a strong pick having posted impressive earnings. The solid earnings came at the back of the company not posting any major announcements in terms of a big launch or the unveiling of a huge movie in the quarter.
However, the stock closed the day on the red as soon as people started panicking on the potential impacts of oil surging above the $60 mark. Cramer believes the market is only overreacting and that the theme park stock remains a solid pick based on its fundamentals.
“Think like Buffett for heaven sake the market is throwing a sale because the price of oil rallied equivalent of a couple of pennies at the pump. You have to take advantage of the sale to buy stocks of high-quality companies like Walt Disney Co (NYSE:DIS) that you may like at discounted price. Perhaps you might end up kicking yourself for missing out when the selloff comes to an end,” said Mr. Cramer.
Cramer does not believe oil prices will either drop back to the $40 mark and one of the reasons of him remaining long on EOG Resources Inc (NYSE:EOG). The stock has seen its prospects in the market come under immense scrutiny after billionaire David Einhorn questioned its prospects.
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