Investing in high - quality growth stocks
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Jim Cramer’s guide to investing: Pick out the obvious winners
CNBC· 2025-12-29 23:32
Core Insights - The article emphasizes the importance of identifying high-quality growth stocks with a strong track record, particularly focusing on well-known companies that have consistently performed well over the years [1][2] Group 1: Investment Strategy - Investors should look for "hero stocks" that are obvious winners, rather than picking randomly [1] - Cramer highlights the performance of FAANG stocks, which have outperformed the S&P 500 and achieved double-digit gains over the past decade [2] - The article warns against investing in stocks that appear to be doing well without a solid pedigree, as many gains are driven by market enthusiasm rather than fundamental strength [2] Group 2: Historical Performance - Research by economist Hendrik Bessembinder indicates that a small number of stocks account for the majority of market gains from 1925 to 2023, with only 17 stocks delivering substantial returns [2] - Notable high-yielding stocks mentioned include Boeing, IBM, Coca-Cola, Deere, and Johnson & Johnson, which have provided significant returns compared to the broader market [2] Group 3: Future Opportunities - The search for the next big growth stock continues, with the belief that there are always new opportunities waiting to be discovered, similar to the current Magnificent Seven [3] - As long as proven winners like the Magnificent Seven remain strong, they will continue to be favored investments [3]