During the January Monthly Meeting this previous Wednesday, we took questions instantly from Investing Club members. Here are Jim Cramer’s and Director of Portfolio Analysis Jeff Marks’ responses. Their solutions have been edited for readability. 1. What is an efficient entry level for Eaton ? It does not appear to need to go down! (Brian) Jim Cramer: I knew we had a sizzling inventory with Eaton due to how a lot of the corporate is devoted to local weather controls and information facilities. But I had no concept it could be this sizzling. I’ve all the time instructed you that our uncommon self-discipline can damage us. I concern it’s doing simply that with Eaton. Remember, we even have Abbott Laboratories within the Bullpen . I just like the title however you’ll be able to’t purchase forward of the quarter as a result of they do not know how to inform a very good story. But they’re fabulous producers. Jeff Marks: We’re ready for Eaton’s earnings report on Feb. 1. The CFO stepped down every week in the past and that was a little bit of a shock. There’s additionally a CEO transition which might be introduced quickly. But the corporate continues to be properly positioned to profit from the continuing buildout of knowledge facilities and extra broadly, demand for electrical energy. About 15% of its revenues are from its information heart/IT channel. Artificial intelligence information facilities are an extra tailwind as a result of they require excessive energy and excessive energy density, leading to increased electrical content material. 2. Jim, you appear to be souring on Morgan Stanley and gravitating in the direction of Goldman Sachs . Might this merely be a case of UPOD (under-promise, over-deliver)? And what are your ideas on new Morgan Stanley CEO Ted Pick. Is he the man? (Luca) Jim Cramer: I get over the ache of Morgan Stanley however not the simmering anger. They should not executing properly sufficient on Wealth Management they usually appear to be ready round for IPOs and M & A exercise whereas, say, Goldman Sachs, is pulling out all of the stops to get the job executed. I await to see what the brand new CEO, Ted Pick will do however, identical to I stated with Disney , I’m not in a tolerant temper in 2024. The inventory must be doing properly when the Fed cuts charges. Jeff Marks: We’re beginning to see the inventory come again a bit because the market embraces the reset of Wealth Management margin expectations. There’s additionally a pleasant dividend that pays you as you watch for the Fed to begin reducing and for the IPO growth and M & A to decide up once more. 3. With Palo Alto Networks , Eli Lilly , Microsoft , and Nvidia operating a lot, how do you establish what stage to add shares that may clearly violate your value foundation? Do you simply pull the set off on any down days you could get? (Jenny) Jim Cramer: Eli Lilly is an organization that nearly trades like a Nasdaq inventory. I believe that it is going to be a trillion firm. Even although it is a large firm they nonetheless haven’t got sufficient Mounjaro – the availability does not meet demand. I’m not going to let go of an organization that may’t meet demand of the most important metropolis within the nation, New York City. Jeff Marks: A normal rule of thumb is search for a pullback of about 3% to 5% to put some on. It might really feel like these shares by no means go down, however all of them undergo gentle stretches at occasions. Usually, it is round earnings when the expectations get too sizzling or the market focuses on one weaker line and misses the larger image. We’ve seen that repeatedly with Microsoft. It pulled again on earnings and we have used these pullbacks as shopping for alternatives. We’ve additionally seen Palo Alto pull again on earnings lately and that proved to be a very good shopping for alternative too. 4. How many particular person shares ought to somebody personal if you’re additionally balancing an S & P 500 fund? Thank you on your time and the efforts you and your employees put into the investing membership. (Dan) Jim Cramer: This is hard. I’ve all the time stated you possibly can do 10 as a result of we’re in a world the place you’ll be able to look issues up and we offer you with a variety of data. But with the Club, you get all of the analysis and will add extra. Jeff Marks: You ought to do what you’re comfy with however a normal rule of thumb is 5 to ten. If you could have sufficient time to analysis and keep up to date with extra, do it. But I believe 5 to ten at any time is a lot and you will not run into hassle monitoring so a lot of them, particularly on this risky surroundings when issues can change shortly. 5. I’ve been shopping for Coterra Energy beneath $25.50. What wants to occur for the inventory to get again to $30 a share in 2024? (Max) Jim Cramer: If I’m proper about my China commerce ideas ( Baidu , Alibaba , Pinduoduo , and JD.com ), which means China goes to be re-stimulating, which suggests they are going to be shopping for extra oil. And our oil and gasoline skilled Carly Garner stated oil can go to $100 per barrel. Coterra has the power to change from oil to pure gasoline and vice versa, so I actually prefer it. Jeff Marks: We would want to see a giant and sustained transfer excessive within the value of oil and pure gasoline. The final time CTRA traded close to $30 was in mid-October – you had geopolitical tensions within the Middle East at a excessive and oil was at $90. You in all probability will want to see oil not less than above $85 for that to occur once more. We’re solely down to one oil inventory as a result of it is nonetheless a “hedge” towards one thing occurring geopolitically. If the Pioneer takeout did not enable us to exit that one at a excessive into power, we might in all probability solely be holding that one proper now. 6. I’m involved that Ford goes to go the best way of Estee Lauder . Yes, it pays an honest dividend, however at what level can we lower bait? (Kimberly) Jim Cramer: I’m involved each minute about Ford. The firm’s stability sheet is sweet and I do know the gross sales are going to be good for the Bronco and SUVs. I do know the F-150 is promoting like sizzling muffins. But I do really feel your ache. I believe the dividend goes to preserve it going. If the Fed begins reducing, Ford shares will soar. Estee Lauder, nonetheless, is hostage to one other nation, China, and I believe the CEO and CFO did not acknowledge that. Jeff Marks: What actually plagued Estee Lauder was a list problem. The one good factor Ford is doing is avoiding this challenge by scaling again electrical car manufacturing to match demand. This is a constructive. We need them to maximize earnings and money move – to do that, they want to concentrate on ICE (inner combustion engine) autos and hybrid. It was the corporate’s high quality points – warranties and remembers – that upset essentially the most final quarter. 7. Do you suppose the market baked in too many rate of interest cuts, main to a downward development at first of the 12 months? (Mike) Jim Cramer: I see no proof why something has to be lower regardless of what the all-knowing yield curve and its accouterments like fed fund futures are telling us. If you recall I used to be early on in saying that charges have been going increased and early on in saying that unemployment was going decrease which gave us the gentle touchdown we’re presently embarking on. I’m really bullish about the place issues are with the financial system as a result of I believe the Fed actually has an opportunity to crush inflation by staying tighter and inflation is essentially the most ruinous power for us. We don’t need cuts as a result of the financial system is weak. It is not. We don’t need cuts as a result of the inventory market wants it. Cuts with inflation will not assist the inventory market. Jeff Marks: I believe that is performed a task within the decline within the small-cap/broadening out commerce that dominated the tip of 2023. The market acquired a little bit forward of itself. The likelihood of a fee lower in March has fallen.One week in the past, it was round 66%, and one month in the past it was round 88%, in accordance to the CME Fed Watch device. We’ll see how the information performs out over the following month nevertheless it’s positively a purpose why. 8. What is the exit technique for Caterpillar ? I do know we’re ready on infrastructure spending, however I ponder after we can contemplate that potential as “baked in” to the inventory value. (Austin) Jim Cramer: We made a pleasant sale in CAT, offered half of the place. If it will get to $300, we would promote some extra. Maybe we promote some extra even earlier than it will get there. And the explanation I need to do that’s as a result of it is a win. And I do know Caterpillar. In 1982, I acquired lengthy Caterpillar. In 1983 I shorted Caterpillar. In 1985, I had an entire homerun from August to September as a result of that they had a very dangerous strike they usually broke the union. So I do know Caterpillar in addition to CEO Jim Umpleby does however I’ll inform you this, I do know when I’m up and I do not need to give it again. (One day after Wednesday’s Monthly Meeting, we exited Caterpillar at round document highs.) Jeff Marks: One may argue it is not absolutely baked in due to what number of bears there are on the inventory, anxious about peak pricing, peak backlog, peak margins, and peak earnings. Consensus forecasts for 2024 anticipate CAT’s earnings to be flat to barely down from $20.68 per share in 2023 to $20.54. But if infrastructure funding helps demand and the financial system proves to be higher than anticipated prefer it was final 12 months, these estimates will look too low this time subsequent 12 months. However, it has not been an ideal earnings season thus far for the economic financial system. Many first-quarter guides have been mild. That’s why we offered half our place final Wednesday as a result of when management offers their qualitative view of the 12 months, it would in all probability be conservative. 9. With China beginning to look worse and worse, when will it’s time to promote shares corresponding to Wynn Resorts and transfer into extra home gaming growers corresponding to DraftKings ? (Bill) Jim Cramer: I talked to DraftKings CEO Jason Robins since 2015. I believe Jason is an incredible operator. I labored with DraftKings a few years in the past. It’s a implausible firm. If they get extra states, they’ll simply blow away the quantity. They’re nonetheless not in California or Texas. This is a good inventory. Jeff Marks: Sentiment round China is horrible however their ends in Macao have been sturdy. China is trying worse nevertheless it hasn’t actually proven up within the Macao gaming numbers, which have been extra resilient. DraftKings has been very stunning although. They are nonetheless shedding cash on an earnings foundation however have made the pivot to profitability. The health of the business has gotten higher as a result of it is not hyper-promotional prefer it was at launch. 10. When you’re taking some earnings in your positions, what are the elements you contemplate in deciding how a lot of the place to promote? (Sandy) Jim Cramer: Let’s take CAT for instance. The purpose was to determine how to not have a DuPont and likewise ring the register. I got here on this morning (Wednesday) and stated, we both promote half or promote all of it, and we hashed it out and we stated, promote half. I sort of needed to blow it out as a result of it is such a giant acquire (in fact, the Club did the following day). I assumed there is perhaps much more acquire. But the reply is: this inventory went up dramatically on the pivot by the Fed, not on the numbers by CAT. Jim Umpleby, appreciated DuPont, acquired hit final quarter, so I believe you are going to see extra gross sales from Caterpillar. Jeff Marks: How a lot money we wish to elevate goes into it. If you’re right-sizing a winner , how giant it’s within the portfolio is an element. For instance, if a inventory that was 4% of the portfolio, rallies laborious and turns into round 4.3% of the portfolio, we might look to take it again down to 4% and pocket the money. If it is a inventory we’ve got much less conviction in, we might promote some to restrict our draw back. That might be taking a place down to 1% to 2% of the whole portfolio. (Jim Cramer’s Charitable Trust is lengthy ETN, MS, DIS, EL, CTRA, LLY, PANW, MSFT, NVDA, WYNN. See right here for a full record of the shares.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll obtain a commerce alert earlier than Jim makes a commerce. Jim waits 45 minutes after sending a commerce alert earlier than shopping for or promoting a inventory in his charitable belief’s portfolio. If Jim has talked a few inventory on CNBC TV, he waits 72 hours after issuing the commerce alert earlier than executing the commerce. 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