Jim Cramer Says Investors Should Focus Less on How China Affects American Stocks
Jim Cramer, CNBC's Jim Cramer, said that investors shouldn't invest in American firms based on their sole business in China.
Cramer told his audience to "imagine how China exposure could boost the growth of American businesses." "But I'd rather find a Chinese firm that can grow faster in America because we are in a much better position than they are now."
CNBC's
Jim Cramer
On Monday, the Wall Street Journal advised investors to stop worrying about China's impact on American stocks.
Cramer stated that "no matter how dismal the growth numbers are from the Chinese economy - and they are quite disappointing - people continue to want to buy American stocks with major Chinese exposure."
"American investors will not give up. They need to be able to support the thesis that China is still the promised land to anyone who can sell into its economy, despite the fact that it's in a state of collapse.
Cramer highlighted construction equipment manufacturer
Caterpillar
He said that the "China story" is not one of "a fantastic story," but rather a story about "the United States." He said that Caterpillar's performance is more influenced by the U.S. infrastructure, data center, oil and mineral markets as well as global markets.
Cramer said that retail behemoths are also a concern.
Nike
It is not a China stock because, although the company has a large following in China, the country only accounts for 14% of its business, as opposed to 42% in North America and 26% in Europe.
Cramer did acknowledge that China has an impact on certain companies like
Ralph Lauren
He also mentioned that the Chinese market is experiencing significant growth. He also mentioned
Starbucks
He said that the company plans to open thousands more locations in China within the next few years. He said that he would support buying stocks in these companies, as long as they continue to do well in America. However, he warned investors not to invest in businesses solely based on their activities in China.
Cramer told his audience to "imagine how China exposure could boost the growth of American businesses." "But I'd rather you find a Chinese firm that can grow faster in America because we are much stronger than they are now."
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Disclaimer The CNBC Investing Club Charitable Trust owns shares in Starbucks and Caterpillar.
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