The following passage was part of Jim Cramer’s prepared introduction to Wednesday’s June Monthly Meeting of the CNBC Investing Club. I want to try to make sense of things that elude pretty much everyone these days. And, I think I know why that is. The stock market is enduring a tremendous tug-of-war between two often opposing forces: passion and rigor. The problem is that most passionate people think they are being rigorous, and most rigorous people have more passion than they realize. That’s what’s going on right now in tech, as I will show you in a moment, but also at the Federal Reserve, where new Chairman Kevin Warsh is about to give his first press conference Wednesday afternoon. There is a debate among the cognoscenti over whether we will have to raise interest rates once or even twice this year. Me? I think the Fed should either stay the same or get ready to cut rates at least once, when we see the decline in the price of oil filter through everything from dry goods to groceries to plastics, now that the war appears to be over. The rigorous are thought to favor hikes. The passionate folks, those who worry inordinately about those who are less well off, are dismissed as emotional dreamers. Recently, I spoke with Kevin Hassett, the director of the National Economic Council. He’s President Donald Trump’s main White House economic advisor. We interviewed Hassett on “Squawk on the Street” on June 5 after the Labor Department reported surprisingly strong employment numbers. He was proud that jobs were being created at a solid pace. Me? I started talking about what Walmart , Dollar Tree , Target , and Dollar General were telling me — that costs had gotten out of hand for many Americans and, with higher oil prices and inflationary pressure stemming from them, they were just trying to get by. I could tell by his dismissive tone that he thought I had brought passion to a discussion where only rigor was allowed. I think I nailed it. We are two countries now, we see that by the day: the very well-off, who seem to increase their wealth by offering stock, and those who are struggling to make ends meet. Given that oil, housing, insurance, and autos are now headed down — and they had been big inflation sticking points — we have to be ready to cut rates. That’s a principal reason why I think you can be bullish right now. I still believe rates can come down. I still think when the pump returns to its rightful place and the fuel surcharges are repealed — and they will be — it will be time to ease. Rigorous? Passionate? Maybe both. With billionaires being minted by the day, but poverty always lurking in such a visceral way, it can be very hard to tell. In some cases, tech investing may be getting too passionate, especially when I see a top-five market-cap stock turn into a meme stock right out of the gate. That’s just plain out of hand, and SpaceX has been able to move up through forced buying only because its float is so small. I don’t like it even as I like the company. The rigor in me says it is absurd that SpaceX is bigger than Amazon and almost bigger than Microsoft . It’s just pure passion pouring out of the mesmerized. I can try to make sense of it — did so Tuesday night on “Mad Money,” calling it the cult of Elon Musk. But it doesn’t mean I like it. I spend a huge amount of time trying to control the passion. But stock picking isn’t always that rigorous. When you watch the levitations of Sandisk and Western Digital , you know that they have been going up on the same old story each time: endless accumulations of price target raises, one after another. I can’t believe it is still working. Seems totally devoid of rigor. Everyone knows that companies are doing well, but the passion toward their stocks just gets the better of us. I try to compromise in those situations, playing around the edges with better companies like Dell or AMD , or Intel of late, but then those stocks don’t come down, and I let my lack of passion get to me. When I get too aggressive, I end up buying at too high a price, as I did yesterday with Intel. All I can tell you is that this is a teaching product. I want to teach you never to fall prey to your emotions. But this is a market where if you don’t fall prey a little bit, if you only buy what looks cheap, you will not make as much money as a more passionate investor. So, my advice? Just as I advocate some speculation as long as it isn’t too much of your portfolio, I want to advocate for some passion in a somewhat rigorous framework. I bet you will make more money with a mix of rigor and passion, call it maybe four-fifths rigor, one-fifth passion, than being devoid of one or the other. I think that will work in a high-strung, high-performing market that defied war, didn’t blink at high inflation numbers, and even managed to hit all sorts of new highs. It happened while the mood of the nation turns ever more sour, the politics ever more toxic, and the gulf between rich and poor grows as wide as I can ever recall. (Jim Cramer’s Charitable Trust is long INTC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. 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Investing in this market requires rigor and passion — not in equal parts
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