As 2017 comes to a close, CNBC’s Jim Cramer has noticed that one of the market’s starkest features is its shortage of stock.
“We don’t have enough shares to go around. That’s how I feel about this incredibly strong year and the uber-bullish reaction to tax reform,” the “Mad Money” host said. “There’s just not enough supply, not enough stock to meet the demand from buyers who had to radically switch their orientation to deal with a much more positive backdrop.”
Ironically, Cramer found that two similar companies — Amazon and Walmart — best explain this oddity.
“When portfolio managers want to reach for a big company that’s a major beneficiary of the tax reform, you know what? They’re thinking Walmart, not Amazon,” Cramer said. “In fact, you can easily imagine them dumping the fast-growing e-commerce play for Walmart here.”
But sellers of Amazon would probably regret it once they saw the online giant’s likely robust holiday sales, and once the tax plan’s benefits to Walmart were priced in, he argued.
“I’d be a buyer of Amazon into any weakness,” Cramer said. “But given that the passage of the bill was a surprise and the analysts are just now putting pen to paper to figured out its impact, my guess is that the out-of-Amazon-into-Walmart trade … could continue for longer than people think.”