During the October Monthly Meeting , we took questions directly from Investing Club members. Here are Jim Cramer’s and portfolio director Jeff Marks’ responses. Their answers have been edited for clarity. 1. Why do rising interest rates have such a negative effect on technology stocks? (Rod) Jim Cramer: When the Federal Reserve started raising rates, we made sure to reiterate that we prefer companies that are profitable, generate cash flow, and return cash to shareholders because these characteristics help mitigate the risk of higher funding costs associated with higher rates. Mega-cap tech names have been holding up because they earn a lot of money. As an example, during the period when rates started to soar, Nvidia (NVDA) initially got hurt but the company proved resilient as it kept getting more orders from customers. Jeff Marks: It’s frequently viewed that the present value of a company is based on the sum of future cash flows discounted back at a certain rate – the rate often used to discount back is based on Treasury yields. The higher the interest rate, the lower the present value of each cash flow and thus, a low stock price. Funding costs also matter for growth companies, which are often in tech. If rates are higher, it becomes more expensive to borrow to fund growth and expansion plans if the company doesn’t have the cash. That’s why we made the change last year and said you have to own profitable companies that generate cash flow when the Fed starts hiking rates. 2. Why haven’t the stocks of oil companies risen at the same rate as the price of oil? Is this just a lag effect or are fears about a slowdown offsetting the higher oil prices? (Todd) Jim Cramer: I believe that the rally in oil was a short squeeze that is now over. I don’t think it deserved to be in the $90’s because it didn’t have the economic growth. President Joe Biden mistakenly did not refill the strategic petroleum reserve so he was not able to offload oil. I do think Russia ordered oil and sent it to China which kept it off the market. Our own producers surprisingly did not break ranks. What has happened is the artificial nature of the short squeeze engineered by traders and whole countries came apart when we realized that there were no bids and there was not enough oil in the market. We own Coterra (CTRA), our play on natural gas, which keeps edging higher. CEO Tom Jorden was right when he said that he was putting his bet on natural gas and he’s crushing it. If you don’t own Coterra, I think you’re making a mistake. Jeff Marks: I think the market sniffed out that oil was closer to making a near-term top and that’s why the stocks weren’t being priced like oil was making a run to $100. But if the price of oil stocks remains disconnected from the price of the commodity for long, then what tends to happen is you get some M & A chatter around one of the bigger fishes looking to acquire an independent. That’s exactly what played out last week when the story about Exxon’s interest in Pioneer (PXD) was renewed. And, that deal was announced Wednesday. We plan to sell our PXD stake as soon as our trading rules allow. 3. I am concerned with Apple’s decline. Is it time to begin trimming or still “own it, don’t trade it?” (Donald) Jim Cramer: Many years ago when Apple (AAPL) traded in the $20s and $30, Shark Tank investor Daymond John came on “Mad Money” and recommended the stock, saying “stick with it, it’s a winner.” John appeared on “Mad Money” on Tuesday and said he believes the upcoming Vision Pro from Apple is going to be a winner too. There’s an opportunity for Apple to create a partnership with ESPN and pull content onto the miraculous Vision Pro mixed reality headset. Jeff Marks: Still in the “own it, don’t trade it” camp. It’s served us well for many years – through rate hiking cycles, pandemics, and trade wars – and it’s been better to hold it through all those events instead of trying to time the sell-point but also the re-entry level. Our Club analyst Zev Fima recently showed us the math behind it . 4. I’ve had Salesforce for quite a while on your recommendation and have a solid gain. But It’s fallen roughly 10% in the past month – more or less in line with the Nasdaq. Do you still think this is a long-term hold? (Peter) Jim Cramer: Marc Benioff, co-founder and CEO of Salesforce (CRM), is determined that artificial intelligence is going to produce more profits for companies which will then produce more money to hire people. The stock jumped after it announced a better-than-expected quarter . There are people who say their business is weak but this business is on fire. Jeff Marks: Yes, I do, the company has made great strides expanding margins and increasing free cash flow, while keeping its steady cadence of around 10% revenue growth despite the uncertain macro. Salesforce has gotten better at managing dilution with its buybacks. The company is still the leader in customer relationship management and its generative AI tools could add a layer of incremental growth. 5. In light of the government’s anti-trust challenge, is Amazon “dead” money? (John) Jim Cramer: FTC chair Lina Khan does not have a strong antitrust case against Amazon (AMZN) – her arguments don’t make sense. Khan has had it out for Amazon since she was in law school and the case is garbage and it will be thrown out rather quickly. Jeff Marks: I don’t think so because I don’t think anything is going to come of it. And if anything, we’re in the camp that a breakup of Amazon into different parts could unlock value for shareholders. And by the way, I know Amazon recently has made great strides on the cost side and improving profitability, but if Amazon’s different businesses – the AWS cloud unit and retail – were independent, there would be increased scrutiny on each to expand margins and grow profits. 6. Over/Under in the next 12 months that Costco distributes a special cash dividend. (David) Jim Cramer: I spoke with Costco CFO Rich Galanti and he said it’s only a matter of “when, not if” the company distributes a special dividend. We love Costco (COST) because, unlike its retail peers, it doesn’t have theft problems. Costco is one of my absolute favorites in the portfolio. Costco is crushing it. Jeff Marks: I’m going to take “the over” on the special cash dividend because I think Costco likes collecting the 5% interest on its cash. But I’m going to “take the under” on a membership fee hike. 7. Can you review the concept of trading around a core position and give an example of how and when to do so? (Peter) Jeff Marks: What we did with Eli Lilly (LLY) recently is a great example. It’s been a core name since we bought it because we’ve been believers that Lilly had the best growth profile of any large-cap pharma name due to the value of its pipeline. But periodically, when everyone gets bulled up around one idea, the stock becomes a “crowded trade” and gets extended in the short term, which is why we recently trimmed some a few dollars below $600. Sure enough, the stock pulled back to the low $500s over the next few weeks. We didn’t pull the trigger and repurchase what we sold higher at those lower levels, but that cash became of good use when the whole market was getting clobbered last month. And, now with all the positive attention GLP-1s — those diabetes/weight loss drugs like Mounjaro — have gotten recently, the stock looks ready to break above that $600 price. Diabetes drug Mounjaro is expected to get approval to treat obesity soon. Jim Cramer: When you have a core position in a company where you have a long-term thesis, when the stock makes a huge move, you take a little bit of and redeploy it somewhere else in the portfolio. We did this in Humana (HUM) when we sold some HUM shares to secure a 12% gain. With the extra cash on hand, we felt that we had the case to buy, and traded around Procter & Gamble (PG). 8. Why do you like Stanley Black & Decker when you currently state invest in stocks that are making money and not losing money? (Norman) Jim Cramer: We like to have something related to the housing cycle that could make money. The decline in the stock is kind of ridiculous because this is the premier tool company in the world valued at $12 billion, has a strong 4% annual dividend yield, a management team that’s focused, and has gotten its costs down. Jeff Marks: Yes, Stanley Black & Decker (SWK) has had a few unprofitable quarters this year, but this is a special situation. Over the past year, the company was plagued by too much inventory, a bad cost structure, and a complex supply chain. But, the company is in the process of fixing all three. After losing money for three straight quarters, the company is expected to return to profitability in the upcoming reported quarter and the earnings recovery is expected to pick up into 2024 with expectations that it earns more that year than it did in 2022. 9. When you speak of buying on the way down and waiting for the next level, how do you determine what the next level down is? (James) Jim Cramer: This is more of an art, not a science. I learned a strategy from Michael Steinhardt, who is an unbelievable hedge fund manager, called a pyramid style of buying. It’s where you start small and build up, but only if it means it lowers your cost basis. Jeff Marks: You can do this a few ways. Sometimes we use a percentage basis – so on every 3% to 5% pullback. You could also use dividend yields – so if you bought a stock at a 3.75% yield, the next level could be at 4%. But conviction levels matter and what’s happening in the market is important as well. 10. I had a sizeable position in Honeywell for years and the stock is well off its 2021 highs. Should I continue to hold it? (Rhonda) Jim Cramer: We were expecting business changes at Honeywell (HON) and management followed through Tuesday when it announced a reorganization of the company. CEO Vimal Kapur, who replaced Darius Adamczyk earlier this year is reorganizing the business into different divisions starting in the first fiscal quarter next year. We want to see what he does with these changes but need to give the new leader some time to show us how he can bring out value for shareholders. Jeff Marks: I know CEO Vimal Kapur is early in his tenure, but I think the clock is ticking on Honeywell to bring out value and that’s worth owning it for. Yesterday (Tuesday) he announced the strategic reorganization of the company – that’s a positive first step. Next, I’d like to see acquisitions that accelerate growth and dispositions of non-core assets. Otherwise, I wouldn’t be surprised to see chatter around an activist wanting to break the company up, based on the success of the General Electric (GE) and Raytheon Technologies splits. (Jim Cramer’s Charitable Trust is long NVDA, CTRA, AAPL, CRM, AMZN, COST, LLY, HUM, PG, SWK, HON. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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During the October Monthly Meeting, we took questions directly from Investing Club members. Here are Jim Cramer’s and portfolio director Jeff Marks’ responses. Their answers have been edited for clarity.
Hyundai has unveiled the design refresh of its Ioniq 6 sedan, and announced that it will become a family of cars rather than a single model, with an N Line trim and upcoming N performance model, much like its sister car the Ioniq 5.
Hyundai has been doing great with its EVs lately, hitting sales records and getting great reviews.
Much of that focus has been on the Ioniq 5, an attractive crossover SUV with lots of capability at a good price – and a bonkers N performance version which has been breaking different kinds of records.
The Ioniq 6, conversely, hasn’t attracted quite as much attention, even though it has some records of its own (it’s the most efficient vehicle in the US… for under $70k).
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Between its admittedly odd looks – much more aerodynamic and rounded than the comparatively blocky 5 – and it fitting into the less-popular (but better) sedan form factor, it just hasn’t captured as much imagination as the 5.
But that’s about to change, as Hyundai is giving the model some love with a design update and some hints at new things to come.
We’ve seenspyshots of these design updates before, but now Hyundai is showing them to everyone at the Seoul Mobility Show.
Hyundai showed two models today, the standard Ioniq 6 and the “N Line,” an upgraded trim level with some interior and exterior changes to look a little more sporty. Hyundai has used similar nomenclature for its other models, and that carries over here.
Both have a redesigned front end, making it look more aggressive than the prior bulbous and aerodynamic shape, and narrower headlights.
The N Line looks even more aggressive than the standard model, though, with an even more aggressive front and rear end.
Hyundai says that the redesign will also include interior enhancements for “a more comfortable, intuitive experience,” with a redesigned steering wheel, larger climate control display, upgraded materials and redesigned center console with more physical controls.
Beyond this, the refresh was light on details – intentionally, with a full unveil of specs and changes coming later. We can imagine a lot of the improvements on the 2025 Ioniq 5 will be carried over, such as a native NACS port for example, and potentially a slightly larger or faster-charging battery.
We had also previously heard hints that an N version (yes, “N” and “N Line” are different, no, we don’t know why they used these confusing names) of the Ioniq 6 is coming, and Hyundai reiterated those hints today – even giving us a glimpse of the car in the background of one of its shots.
Now THIS one looks quite aggressive, with a bigger double wing and potentially some changes to the diffuser (it’s hard to tell from the shot, as the N Line also has a modified diffuser).
The ioniq 5N has earned rave reviews from enthusiasts for its bonkers driving dynamics and comparatively reasonable price for a true performance vehicle. But it’s still an SUV format, and frankly, an SUV will never be a sportscar no matter how many horsepower you put into it (I will die on this hill).
The 6, however, with its sedan shape and footprint, could make for a much more compelling sports package once it’s all put together. So we’re very excited to see what Hyundai can do if they apply the same magic they put into the 5 into a new 6N. Looking forward to July.
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Over the next two years, homebuilder Lennar is outfitting more than 1,500 new Colorado homes with Dandelion Energy’s geothermal systems in one of the largest residential geothermal rollouts in the US.
The big draw for homeowners is lower energy bills and cleaner heating and cooling. Dandelion claims Lennar homeowners with geothermal systems will collectively save around $30 million over the next 20 years compared to using air-source heat pumps. Geothermal heat pumps don’t need outdoor AC units or conventional heating systems, either.
Geothermal systems use the sustained temperature of the ground to heat or cool a home. A ground loop system absorbs heat energy (BTUs) from the earth so that it can be transferred to a heat pump and efficiently converted into warmth for a home. Dandelion says its ground loop systems are built to last for over 50 years and should require no maintenance.
Dandelion’s geothermal system uses a vertical ground closed-loop system that is installed using well-boring equipment and trenched back into the house to connect to a heat pump. The pipes circulate a mixture of water and propylene glycol, a food-grade antifreeze, that absorbs the ground’s temperature. A ground source heat pump circulates the liquid through the ground loops and it exchanges its heat energy in the heat pump with liquid refrigerant. The refrigerant is converted to vapor, compressed to increase its temperature, then passed through a heat exchanger to transfer heat to the air, which is circulated through a home’s HVAC ductwork.
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Daniel Yates, Dandelion Energy’s CEO, called the partnership with Lennar a “new benchmark for affordable, energy-efficient, and high-quality home heating and cooling.” By streamlining its installation process, Dandelion is making geothermal systems simpler and cheaper for homebuilders and homeowners to adopt.
This collaboration is happening at a time when Colorado is pushing hard to meet its clean energy targets. Governor Jared Polis is excited about the move, calling it a win for Coloradans’ wallets, air quality, and the state’s leadership on geothermal energy. Will Toor, executive director of the Colorado Energy Office, said that “ensuring affordable access to geothermal heating and cooling is essential to achieve net-zero emissions by 2050, and we’re excited to be part of such a huge effort to bring this technology to so many new Colorado homes.”
And it’s not just about cutting emissions – geothermal heat pumps help reduce peak electric demand. Analysis from the Department of Energy found that widespread adoption of these systems could save the US from needing 24,500 miles of new transmission lines. That’s like crossing the continental US eight times.
Colorado is making this transition a lot more attractive through state tax credits and Xcel Energy’s rebate programs. These incentives slash upfront costs for builders like Lennar, making geothermal installations more financially viable. The utility’s Clean Heat Plan and electrification strategy are working to keep energy bills low while meeting climate goals.
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Polestar has removed the Polestar 2 from its US website header in an early sign of how new tariffs will restrict choice and competition for American consumers, thus increasing prices.
The Polestar 2 is Polestar’s first full EV – the original Polestar 1 was a limited-edition plug-in hybrid.
It started production in 2020 in Luqiao, Zhejiang, China, where Polestar and Volvo’s parent corporation, Geely, was founded.
Unfortunately, that interacts with some news that has been getting a lot of play lately: tariffs.
The US has been gradually getting stupider and stupider on the issue of tariffs, apparently determined to increase prices for Americans and decrease the competitiveness of American manufacturing in a time of change for the auto industry.
It is widely acknowledged (by anyone who has given it a few seconds of thought) that tariffs increase prices and that trade barriers tend to reduce competition, leading to less innovation.
It started with 25% tariffs on various products from China, implemented in the 2018-2020 timeframe. Then, in 2024, President Biden implemented a 100% tariff on Chinese EVs, effectively stopping their sale in the US. These tariffs included some exceptions and credits based on Volvo’s other US manufacturing, which Polestar had used to keep the most expensive versions of the 2 on sale in the US, while restricting the lower-priced versions from sale. Nevertheless, they were a bad idea.
Now, in yet another step to make America less competitive and inflate the prices of goods more for Americans, we got more tariff announcements today from a senile ex-reality TV host who wandered into the White House rose garden (which he does not belong in). These tariffs do not include the same exceptions as the previously-announced Biden tariffs.
Apparently this has all been enough for Polestar, as even in advance of today’s tariff announcements, the company suddenly removed its Polestar 2 from its website header today.
The change can be seen at polestar.com/us, where only the Polestar 3 and 4 are listed in the header area. On other sites, like the company’s Norwegian website or British website, the car is still there. The Polestar 2 page is still up on the US website, but it isn’t linked to elsewhere on the site (we’ll see how long it stays up).
We reached out to Polestar for comment, but didn’t hear anything back before publication. We’ll update if we do.
It makes sense that the Polestar 2 would still be for sale elsewhere, as it only started production in 2020. Most car models are available for at least 7 years, so this is an earlier exit than expected.
So it’s likely that all of the tariff news is what had an effect in killing the Polestar 2.
Then again, this is also just the second day of a new fiscal quarter. Perhaps the timing offers Polestar an opportunity to make a clean break – especially now that the lower-priced version of its Polestar 3 is available.
Despite the lower $67.5k base price of the new Polestar 3 variant, that represents a big increase in price for the brand, which had sold the base model Polestar 2 for around $50k originally, before all of these tariffs.
Update: Polestar got back to us with comment, but understandably, it doesn’t say much:
Polestar is a three-car company and Polestar 2 is available for customers now. There are a select number of Polestar 2s in stock at retailers that can be found on Polestar.com, but Polestar 3 and Polestar 4 will be the priority in the North American market.
Volvo decided to build the car in Belgium and export it to the US, but now that new tariffs apply to the EU as well, maybe that low-priced, awesome, fast, small EV will instead stay in Europe instead of being shipped overseas.
This shows how mercurial tariff fiats from an ignoramus are bad for manufacturing, as they mean that companies can’t make plans – and if they can’t make plans, eventually, they’ll probably just write the country making the random decisions out of their plans so they don’t have to deal with the nonsense.
And we’ve heard this from every businessperson or manufacturer representative we’ve talked to at any level of the automotive industry. Nobody thinks any of this is a good idea, because it objectively is not. All it does is make business harder, make the US less trustworthy, make things more expensive, and overall just harm America.
Yet another way that Americans are getting screwed by this stupid nonsense. 49% of you voted for inflation, and 100% of Americans are now getting it. Happy Inflation Day, everyone.
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