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Cramer Bemoans Market Rotation, Says FAANG Stocks Are ‘Still the Best in Show'

Jason Alden | Bloomberg | Getty Images
  • "I'm so sick of hearing that it's time to rotate into the small caps, or the oils, or the cyclical smokestack stocks," CNBC's Jim Cramer said.
  • "Let's remember what actually took us to these record levels in the first place because those stocks are still the best in show," the "Mad Money" host said.
  • "There are some stocks that become a lot less attractive when the world goes back to normal, but not FAANG," he said.

CNBC's Jim Cramer on Monday bemoaned the stock market rotation from the high-flying growth tech stocks and into lagging stocks in the market.

"I'm so sick of hearing that it's time to rotate into the small caps, or the oils, or the cyclical smokestack stocks," the "Mad Money" host said.

The comments come after the major market averages slid in Monday's session, though the trading day capped off a strong month of November for the Dow Jones, S&P 500 and Nasdaq Composite. The averages all put up double-digit gains this month for their best monthly gains since April.

The Russell 2000 surged higher than them all, advancing 18% for its best month on record.

All of the indexes are within reach of their highs.

"Let's remember what actually took us to these record levels in the first place because those stocks are still the best in show," Cramer said.

Investors piled into small-cap stocks in stocks in cyclical sectors, which powered the market higher as the public grew more optimistic about the ending the coronavirus and economic crises next year.

Most of the FAANG members — Facebook, Amazon, Apple, Netflix and Google-parent Alphabet — lagged the averages in November, posting low-to-mid single-digit gains during the month. Apple and Alphabet were the exceptions, both growing about 10%.

"These stocks have gone out of style in the Wall Street fashion show, lamentably," Cramer said. "The smart money keeps telling you to get out of these big tech stocks into small cap, Russell 2000, anything that needs a roaring economy to thrive."

The big tech stocks have been among the biggest winners in 2020, especially given that they all benefited from the stay-at-home trade. Now that Wall Street is keeping its eye on Covid-19 vaccine news to get a sense of the economic recovery, investors are swapping into stocks that would benefit from the reopening trade.

The aforementioned tech stocks, however, are not cyclical and are in control of their own destinies, according to Cramer.

"There are some stocks that become a lot less attractive when the world goes back to normal, but not FAANG," Cramer said. "They don't care who's in the White House or how soon we get vaccinated."

Disclosure: Cramer's charitable trust owns shares of Facebook, Amazon, Alphabet and Apple.

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