Cramer: When You Don't Care About a Company's Price Hike, Buy Their Stock

 | Jan 19, 2018 | 12:48 PM EST
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What do you do about a company that raises the price for its products yet no one cares?

Simple. You buy the stock.

This morning we learned that Amazon Prime is increasing its monthly fee from $10.99 to $12.99, which amounts to 18% more than before and adds up to $156 a year.

It's a smart move: a year costs $99 and that's not going higher.

More important, I doubt there will be any resistance whatsoever because Amazon Prime is an incredible buy.

We instinctively go there. When I went to buy a dog mask to wear to Lincoln Financial where the Philadelphia Eagles play this Sunday I didn't think about it. I knew I could go to Amazon Prime to get the cheapest, the fastest and the best, with fabulous streamed programming to boot.

Eagles fans are showing solidarity with their players like Chris Long who donned a dog mask after last week's victory over the Atlanta Falcons in order to show that the team doesn't take the disrespect of being the underdog lightly. Amazon's (AMZN) got everything at your fingertips. I am predicting no resistance to the price increase whatsoever.

That's why Amazon's stock remains a go-to name for anyone wanting high growth.

Same goes with Netflix (NFLX) . Here's a company that raised its price a couple of bucks a month to $13.99 for its high-def product for up to four screens and, again, there was no resistance. It's a chief reason why investors keep bidding the stock up. Given that I pay $24 for two for the right to go into a movie theatre for one movie that might or might not be good, I am thrilled to pay a little more than half of that to binge on homegrown long-form product that's often of incredible quality. We all have our Netflix specials. Remember, there's an awful lot of artificial intelligence at work to figure out what you want to watch and Netflix has a worldwide handle on what that programming should be.

We recently got a price increase on our Costco (COST) cards and I didn't think a thing about paying up because Costco remains among the biggest bargains out there for all sorts of goods. We push not one but two carts around their big stores when we go and we often buy far more than what we ever thought we would, or intended to, simply because of the high quality and low prices. I often find that the house Kirkland brand is of superior quality to the branded version. No knock off there.

Same thing goes for Apple's (AAPL) cloud service to preserve my archives. That company could charge me pretty much what it wants for what I regard as an essential service and I have seen people literally go nuts if their phone breaks and they can't recall their pictures.

The stock of Sirius XM (SIRI) got an upgrade from Deutsche Bank today and I found myself thinking how much do I pay for that essential service? It's on autopay. I would only mind if it were shut down, not if I paid more.

Finally, not public yet, but I would pay more for Spotify because I want to know what I want, which is what the artificial intelligence behind that company's brilliance tells you.

I can't wait until that one comes public.

Next time you don't care about a price increase, pay it, but then pay up for the stock. In every instance here, it's been worth it.

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

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