Maybe it's take your dad to work day? That's how I felt, after I saw the action in so much of today's trading where, to make big money, you have to be in touch with your kids to know what to do.
So often I will credit my four blended-family kids for ideas I would never have known about -- and I marvel how people can even pick stocks without even having kids. Today, the stock of Snapchat (SNAP) exploded after the company delivered the kind of growth that we once believed it could put up. Revenues grew 52%. Earnings before interest, taxes, depreciation and amortization -- or EBITDA -- were $679 million and Wall Street expected just $557 million. More important, Snap's daily average users grew 19% to reach 249 million vs. 244 million. Why does all of this matter? Because of the demographic. A long time ago, we had a terrific guy on the TheStreet.com, an advertising guy, real smart, and he described to me that there's a small window where you can create habits that can last a lifetime and that window is in your teen years and it begins to close when you turn 20 and is shut at 25.
You are not switching. These people are very hard to reach. They used to like TV. But a combination of excessive, intrusive commercials and soporific entertainment not tailored exactly to them -- and dreadfully non-interactive programming -- has lost this cord-disliking generation. They like to sit around and communicate and have fun snapchatting to each other. The company's put some programming they like on the site and it gets views. Get views, will travel, as in advertising will travel from TV to SNAP.
How did I know SNAP? My youngest daughter. When the company was coming public, I got to sit down with CEO Evan Spiegel and I took a picture of myself with him to show her how cool he was, because he was known among teens as quite the heartthrob. What the hell did I know about that? Evan told me the picture was the equivalent of off-the-record, so I never noticed. But I did notice that the site was irresistible to my daughter. So, ever since it go out of its Android-troubled funk I have been thinking it's worth speculating on it because my daughter told me so.
One of my other daughters is a baker. This summer, she was always coming up with really cool ideas, something exotically good for when I got home. Wouldn't you know it, she wasn't using the Settlement Cook Book, she was using Pinterest (PINS) . I had already met the team at Pinterest and loved them, and, as someone who started a targeted web site, I thought Pinterest owned the whole demo if it paid attention. Nothing focuses the attention like not being able to go anywhere, including restaurants. It's a global pandemic -- so numbers overseas have been incredibly strong.
Now, you are not going to be able to use your kids to discover Coupa (COUP) or Visa (V) , but you will be able to find out about Amazon (AMZN) and PayPal (PYPL) . I couldn't wait to get a Macy's credit card to be able to get a credit history, way back in 1980. My daughter had a credit history with PayPal dating back to 2005. Why? Because of so much ordering on Amazon. I wasn't so stupid not to know about Amazon. I wrote books. But PayPal? I was a quick learner, which is why I knew this company would be worth a lot more liberated from its prosaic eBay (EBAY) .
One of my daughters is an artist -- and that's something that she discovered herself in middle school. In my time, you drew or maybe used water colors. Not here, she used Adobe (ADBE) . It was right about the time when Adobe decided to go all subscription and it is why I knew not to bail when everyone else was running from it. I have often told CEO Shantanu Narayen about her facility with his products and joke that you had to have a kid in middle school to tell you about the greatness of the products. Everyone has a story to tell, Shantanu says, and my daughter tells it with Adobe products.
What can you do if you are an artist making designs? You can dream of having your own store. Or you can just sell things like pillows and placements on Etsy (ETSY) , which my daughter did. Next would have been a virtual store on Shopify (SHOP) . Could be next. I knew Etsy when it was run like a charity. I actually came up with Shopify myself at $100, but only because my daughter wanted to open a retail store and didn't want her to have to sit alone in some showroom waiting for customers. What a crummy way to do business.
I know Alphabet (GOOGL) is now in trouble with the federal government for being too good and they would like to make it less good. Thanks for nothing.
But I discovered Google in the $80s, because I learned that kids were cheating on their homework with Google, and it was our job to police the crime. Now there's a reason to buy a stock if I ever heard one, which is why I came on air the day it came pubic and said this stock could triple from where it opened. I was criticized and pilloried immediately for being an aggressive pumper and the usual things that they call Jimmy Chill, but the one thing I wasn't called out for was being too small-minded as the stock has subsequently gone to $1,600. My bad. Thanks kids!
Of course, the three most obvious letters in FAANG, Facebook (FB) , Apple (AAPL) and Netflix (NFLX) were entirely my kids' ideas. What would I know about Facebook until someone at TheStreet.com asked me to have a Facebook page. I sheepishly had to go to my kids to get it set up, although I figured out quickly that the pivot to Instagram was a natural. Netflix? Remember, this is one of the "Magnificent Seven," which means you should buy it tomorrow as all of the "disappointment" will not be priced in.
And then there's Apple. I found out about Apple when my youngest was very young and asked me for a mauve colored iPod. I was peeved. What about the white one I had given her already? Did she lose it?
No. she wanted another, because it was a fashion accessory and just like with any jewelry, you needed more than one adornment.
That was at $5.
I never went away from it. There are always wise guys on Twitter who say "Cramer just said own Apple don't trade it and that's the signal to sell it."
All I can say is how would you have done betting against my daughter?
There are many others, they have augmented my view. My daughter, who had "fluent in Salesforce (CRM) " at the bottom of her resume. The Workday (WDAY) product used at college. The graduation party staged at Chipotle (CMG) . The vegetarian who liked Beyond Meat (BYND) .
Notice these ideas have survived the Great Recession. They have survived rates going up and down and up again. They have survived campaign assaults and congressional hearings. Now they are being challenged chartists who say they all have double-tops. Oh heck, these companies have had more tops than 46 mountains in the Adirondack High Peaks Region.
I know that's a lot of names. But you have to understand that if you just listened to Wall Street you would own some stupid exchange-traded fund and JPMorgan (JPM) , Exxon (XOM) , General Electric (GE) and Ford (F) . On Wall Street, you always want to know early. To know early, you have to go to those who are early in years. No, you still have to do homework. What if your kid liked Myspace? Fell in love with Fitbit. Dug Gopro. Could get ugly.
So watch. Listen. Focus. Maybe they'll take you to work and you can learn something.
(JPM, CRM, AAPL, GOOGL, FB and AMZN are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)
