Cramer’s Mad Cash Recap: Wells Fargo, Barrick Gold

September was the cruelest month of the year for investors, Jim Cramer reminded his Mad Money viewers on Monday. That is why it is advisable to get ahead of the crowds and start raising funds now.

Last week, Cramer checked in with colleague Larry Williams, who noted that September 17th is historically the high point of the month, followed by market-wide declines. In the meantime, we will likely see a changing line-up of market leaders, few of whom have staying power.

Today we made gains in the oil field with stocks like Occidental Petroleum (OXY) – Get Occidental Petroleum Corporation Report 6.6% up and Devon Energy (DVN) – Get the Devon Energy Corporation report Win 3%. However, Cramer noted that as soon as oil prices get too high, producers turn on the tap to bring prices back down. Confusion is compounded by shutdowns caused by Hurricane Ida, which again weighed on oil, chemicals and manufacturing.

COVID also remains of concern as outbreaks in Vietnam have sent shares in Nike (FROM) – Get the NIKE, Inc. (NKE) report 2.4% lower.

Wells Fargo was one of the few bright spots, said Cramer (WFC) – Get Wells Fargo & Company Report, which ended the day up 3.2% despite an additional $ 250 million fine for its previous indiscretions. Cramer said the fine, while heavy, is less than many investors feared.

We’d love to see more rolling corrections like we’ve seen today, Cramer concluded, which will require investors to dig up cash and buy some gold before September 17th.

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Executive decision

In his first “Executive Decision” segment, Cramer spoke to Mark Bristow, President and CEO of gold digger Barrick Gold (GOLD) – Get the Barrick Gold Corporation report.

Bristow said business at Barrick “couldn’t be better” as the company continues to invest in its future while delivering stable cash returns to its shareholders.

After all, mining is a consumptive industry, said Bristow. For every ounce of gold you pull out of the ground, you’ll need to replace additional reserves. Because of this, Barrick has a long history of delivering sustainable, profitable growth.

Even in Nevada, a state long thought to be largely gold, Barrick has discovered new opportunities that Bristow called “huge.” The rewards in Nevada will be fantastic, he said.

When asked whether he would rather invest in gold or bitcoin, Bristow finally said that gold is still the only way to really hedge your risks. Bitcoin depreciates as often as it goes up, he said, leaving gold as the only stable asset reserve.

IPO rules

When it comes to investing in newly minted IPOs, steer clear of obscure companies with sky-high valuations, Cramer told viewers. With the IPO market in full swing again, it’s worth doing your homework. That’s why he took a closer look at three recent travel IPOs.

First was Clear Secure (SHE) , the biometrics company that has gained over seven million members for air travel, sports venues, offices, and other safe places. Cramer said this company may have great technology, but it doesn’t offer investors much clarity about its growth. The company only has an 80 percent retention rate but is valued at 25 times its sales.

Next up was Blade Air Mobility BLDE, the short-haul air and sea service that provides members with quick access to destinations primarily in and around New York City. Blade has seen impressive growth and only trades for five times sales, making it a buy on Cramer’s list.

Finally, Cramer checked out Wheels Up UP, a private jet membership service. Unlike Blade, which is resource efficient, Wheels Up owns many of its aircraft and also has a partnership with Delta Air Lines (FROM) – Get the report from Delta Air Lines, Inc.. Cramer felt that Wheels Up was a buy too.

Executive decision 2

For his second segment, Executive Decision, Cramer spoke to Matthew Prince, Founder, Chairman and CEO of CloudFlare (NETWORK) – Get Cloudflare Inc. Class A Report, the network and cybersecurity provider celebrating the two year anniversary of its IPO. Since then, Cloudflare’s shares have risen 700%.

Prince said Cloudflare is building a better network and continuing on its mission of execution and innovation. The company has developed over 1,000 new products in the past two years, but is “just getting started,” he said.

Cloudflare recently won a lucrative contract with the federal government. Prince said they won this deal because of their unique ability to provide fast, reliable, and secure network services. This enabled the company to achieve a net retention rate of over 100% on a US dollar basis. Every year customers spend more on their services.

Prince also called rival Amazon (AMZN) – Get the Amazon.com, Inc. Review because they charge too much for bandwidth access to their network. He said Amazon did an amazing job lowering prices for customers in almost every other area of ​​cloud computing, but when it comes to bandwidth, they were “hollowing out” their customers.

When finally asked if he would invest in cryptocurrency as digital wallets have become a hacker’s favorite, Prince said that he would definitely be comfortable using these wallets using Cloudflare.

No huddle offensive

In his No Huddle Offense segment, Cramer told viewers that lawsuits are messy, but in the battle between Apple (AAPL) – Get the report from Apple Inc. (AAPL) and Epic Games, the makers of Fortnite, the experts got it wrong.

When the verdict came last week that Apple would be forced to allow app makers to connect to third-party payment systems, it was widely seen as a win for Epic and a loss for Apple. But wait a minute.

Cramer said the real question was whether Apple was a monopoly, and on that issue the judge ruled that it wasn’t. That makes the ruling a huge win for Apple, which can continue to right its customers by offering safe and convenient payments.

The fact that Apple also has to allow links to other payment options is not an issue, Cramer concluded, because the decision that power is not necessarily a monopoly is much more important.

Lightning round

Here’s what Jim Cramer had to say about some of the stocks callers offered during Monday night’s Mad Money Lightning Round:

BorgWarner (BWA) – Get report from BorgWarner Inc.: “Wait two more months, then pull the trigger.”

The Lion Electric Company (LEV) : “This is the best company in this group. I would hold on to it. “

Academy Sport and Outdoor (ASO) : “It has not yet peaked. You are as good as ever.”

Magna International (MGA) – Get report from Magna International Inc.: “Magna is good. I would wait a couple of weeks and then buy more.”

The big 5 (BGFV) – Get the Big 5 Sporting Goods Corporation Report: “Let it come in a little and then buy more. Much of what they have is sold out. “

IronNet (IRNT) : “This is a meme stock, and we’re not meme people on this show.”

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At the time of publication, Cramer’s Action Alerts PLUS was long WFC.

Greater Gold Value Is Not Correlated To Cash Provide Development

Indeed, it is considered almost biblical canon that a huge increase in money supply will inevitably lead to a huge increase in money supply Gold price. Historical examples of France in the late 18th century, Germany (Weimar Republic) in the 1920s, and more recent Zimbabwe or Venezuela are often cited as evidence of the relationship between money supply growth and its effect on the price of gold.

However, this is not the case. Below is a table showing the relationship of Gold prices on the monetary base from 1918 …

Since the gold price peak in 1980, the rate has fallen sharply. The low point (0.28) was reached in December 2015. All of this decline occurred in the context of quantifiable greater growth in the supply of money and credit.

More tellingly, all of this decline occurred while the price of gold rose from $ 850 to $ 2000 an ounce. The decline in the ratio occurred between 1934 and 1970 while the price of gold remained fixed at $ 35 an ounce.

So we have a steady rise in the price of gold, but the ratio of the price of gold to the monetary base continues to decrease. Seems like it should be the other way around. Or maybe it is not the growth in the money supply that determines the price of gold. Perhaps the price of gold reflects something other than the amount of money.

Indeed it is. The higher gold price correlates with the loss of purchasing power of the US dollar.

It is equally important that the US dollar’s loss of purchasing power is NOT quantifiable and predictable. In other words, doubling the money supply over a period of time does not necessarily mean that the US dollar will lose half of its purchasing power.

The expansion of the supply of money (and credit) is inflation. The effects of this inflation, such as the loss of the US dollar’s purchasing power, are volatile and unpredictable.

(Read more about the US dollar and the price of gold in my article Gold and US dollar hegemony.)

Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT IS NOT AND WHO IS RESPONSIBLE FOR IT and Everyone welcomes the FED!