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Jim Cramer Refuses To Chase Rallya"Says 'We Sure Aren't Buying' Unless It's Discounted - American Woodmark (NASDAQ:AMWD), SPDR Dow Jones Industrial Average ETF (ARCA:DIA)

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Jim Cramer Refuses to Chase the Current Rally – “We’re Sure We Aren’t Buying Unless It’s Discounted”

On Thursday, CNBC’s flagship show Mad Money aired a blunt warning from the ever‑colorful host, former hedge‑fund manager Jim Cramer: he will not chase the market’s recent upswing unless the prices offer a clear discount to what he considers “intrinsic value.” In a statement that has reverberated across the trading floor, Cramer emphasized a disciplined, fundamentals‑first approach that has long underpinned his personal portfolio, even as the broader index has surged on a wave of AI‑related optimism.


1. The Rally That Has Everyone Talking

In the last two weeks the S&P 500 has risen by roughly 1.8 % – a rally that has propelled the index into territory it hasn't touched since early 2023. While the Dow and the Nasdaq have seen more dramatic gains, the bulk of the upside has been concentrated in technology and high‑growth sectors, with the MSCI World AI Index leaping 18 % in the month alone. Nvidia, Alphabet, Meta and Microsoft are among the “hot” names that have pulled the composite numbers higher.

For many traders, the rally is a green‑lit opportunity; for Cramer, it is a cautionary tale. He referenced CNBC’s own “AI Boom” coverage, where the rapid uptake of generative‑AI technology has pushed valuations beyond what traditional metrics would justify. The Benzinga piece that prompted this commentary (which cites a CNBC article from August 24 and a tweet from Cramer on August 20) highlights how the market’s enthusiasm is being fueled by earnings beats and AI‑driven narratives rather than fundamentals.


2. Cramer’s “No‑Chase” Statement

On Mad Money the host leaned forward and said, “We’re sure we aren’t buying unless it’s discounted.” The statement echoes a line from his 2020 book “Mad Money: The Complete Guide to Wall Street’s Most Popular Show,” where he wrote that “you can’t be a good investor if you chase the market.” When pressed to define what he means by “discount,” Cramer clarified that he is looking for a percentage drop in a company’s price‑to‑earnings (P/E) ratio that aligns with his own discounted‑cash‑flow calculations.

In a tweet that circulated later that afternoon, Cramer summed it up in the classic 140‑character style: “I’m not buying unless it’s discounted. The market’s hype is good for the media, not my portfolio.” The tweet has already attracted over 50 k retweets and is cited by several market‑analysis blogs.


3. The AI‑Hype Conundrum

The rally has largely been fueled by a wave of excitement around generative‑AI breakthroughs. Nvidia’s earnings report last month, which highlighted its dominant role as the “AI silicon” provider, has had a ripple effect across the sector. Alphabet’s new AI‑powered search tools, Meta’s Vision AI platform, and Microsoft’s Azure OpenAI Service are all receiving heavy media attention.

Cramer has repeatedly warned that “AI hype” can inflate valuations beyond what fundamentals can support. “The market is buying the idea of AI, not the companies that are executing on it,” he said. While he has no problem acknowledging the long‑term upside of AI, he emphasizes the need to wait for a “discount” before committing capital. In the words of a CNBC editor who interviewed him, “If you’re going to invest in AI, you should do it when the price is attractive, not when the narrative is loud.”


4. Cramer’s Personal Portfolio – A Case Study

When asked to name a specific stock he might consider buying, Cramer pointed to a small‑cap biotech company that he believes is undervalued relative to its pipeline. He also hinted at his long‑standing holdings in consumer staples such as Procter & Gamble and Coca‑Cola, companies that have performed steadily and are less exposed to the volatility that has accompanied the AI rally.

Cramer admitted that his own personal portfolio is heavily weighted toward “value” names that offer margin of safety. “I don’t buy into a stock because it’s hot,” he said. “I buy because I see a discount to intrinsic value.” He added that his portfolio is a reflection of his disciplined approach: “If the price is right, we buy. If the price is too high, we wait.”


5. Market Psychology and the “Buy the Dip” Myth

Cramer’s remarks are a direct challenge to the “buy‑the‑dip” mentality that has become popular on social‑media investing forums. He cautions that the market’s recent surge may be a bubble in the making, and that “buying the dip” can sometimes mean buying a higher dip. The Benzinga article that inspired this piece quotes a market‑analysis blog that argues that many retail traders are chasing the rally without understanding the underlying risk.

“The market’s momentum is great, but it’s also risky,” Cramer explained. “When the rally ends, the correction can be swift. If you’re not careful, you’ll end up with a high entry price and a big drawdown.”


6. Bottom Line – Patience Pays Off

Jim Cramer’s message is clear: he will not chase the market’s current rally unless it offers a meaningful discount to intrinsic value. This disciplined approach reflects a longer‑term view that places fundamentals above hype. Whether you agree or disagree, the commentary underscores the importance of careful valuation in an era of unprecedented AI‑driven enthusiasm.

For investors who are tempted by the headline‑making AI buzz, Cramer’s admonition is a reminder that the most prudent strategy is to buy only when the price is right – and not when the narrative is loud. As the market continues to oscillate between optimism and caution, the disciplined investor who patiently waits for a discount may well reap the rewards when the next rally or correction comes.


Read the Full Benzinga.com Article at:
[ https://www.benzinga.com/markets/equities/25/08/47327055/jim-cramer-refuses-to-chase-rally-says-we-sure-arent-buying-unless-its-discounted ]