Jim Cramer on Market Selloff, Palantir, Cathie Wood, GameStop

Jim Cramer discusses the Roaring 20's and what that means for L Brands  (LB) - Get Report and its spinoff of Bath & Body Works and Victoria's Secret and his thoughts on Tesla  (TSLA) - Get Report, Palantir  (PLTR) - Get Report and Cathie Wood in the video below: 

Preparing for the Roaring '20's

"There's more to a booming economy than tech stocks, Jim Cramer told his Mad Money viewers Monday. In fact, for most seasoned investors, high-flying tech stocks are a source of funds to buy what's really working," wrote TheStreet's Scott Rutt in his Mad Money recap.

"Never forget that stocks follow the laws of supply and demand. That means when the economy heats up, it's the physical goods that are in short supply, not the digital ones," Rutt wrote. "A booming economy is when you buy the mining and mineral stocks, the infrastructure stocks and the transports, Cramer told viewers. It's also when the home builders and home improvement stocks are in demand."

Palantir's Earnings

Palantir posted a first-quarter loss of $123.5 million, or 7 cents a share, vs. a loss of $54.3 million, or 10 cents a share, in the comparable year-earlier period.

Revenue jumped 49% to $341.2 million from $229.3 million a year ago and well ahead of analysts’ forecasts of $332.2 million. 

TheStreet's M. Corey Goldman noted that investors zeroed in on stock compensation costs, which more than tripled during the quarter, contributing to the wider-than-expected loss. On an adjusted basis, Palantir said it earned 4 cents a share, matching analysts' forecasts. 

How to Balance Too Much Supply With Too Little Demand

"In his "No Huddle Offense" segment, Cramer sounded off on the deluge of software-as-a-service stocks. He reminded viewers that nothing kills a bull market faster than oversupply," Rutt wrote. "Many of these software stocks are trading at huge multiples with no earnings to speak of. That makes them particularly vulnerable in an economy with rising inflation. Inflation makes future earnings worth a lot less. And while these software companies have growth, many of the industrials have growth as well, with earnings to boot."

"But the software stocks have other issues as well. Many are riddled with insider selling and looming lockup expirations. Many of them are performing secondary offerings that are hurting existing shareholders, and many of these names that came public via SPACs simply weren't that good to begin with," he continued. "That's why we saw declines like we did Monday, Cramer concluded. There is simply too much supply and not enough demand."

Hear what Jim Cramer is only telling members of his Action Alerts PLUS investing club in Tuesday’s Daily Rundown.