CNBC’s Jim Cramer on Thursday advised investors to accept that companies will most likely continue to struggle to plan for the future as they adapt to rapid, ever-evolving changes in the economy.
“You can’t really plan in such an environment – you just have to guess,” said the “Mad Money” host. “And 2022 will be known as the year many companies and portfolio managers got it completely wrong.”
A relentless bevy of headwinds including persistent inflation, Federal Reserve rate hikes and surges in Covid cases have rattled the economy this year as businesses struggle to source supplies and consumers as costs and shortages hit them at every level.
At the same time, these companies have had to contend with changing consumer habits driven by changes in workplace norms and the reopening of economies.
PC sales have plummeted since the peak of the pandemic as people return to the office, Cramer pointed out. At the same time, gaming companies are struggling to hold onto their pandemic profits as consumers spend less time indoors.
Consumers have also scaled back discretionary spending in general, as skyrocketing inflation has hit their wallets hard this year, leading to overstocking at retailers like Walmart and Target.
At the same time, even companies that offer products and services that are in demand are facing headwinds. Automakers are struggling to fill electric vehicle orders due to the ongoing chip shortage and rising cost of batteries.
“We’ve never experienced so many highs and lows almost simultaneously,” Cramer said.
On the consumer spending experience side, airlines have had to scale back after taking on more than they could handle during the summer travel recovery, resulting in flight cancellations, delays and lost luggage.
“These changes are happening everywhere with miserable consequences. … Nobody knows what to do,” he said.
Jim Cramer’s Guide to Investing
Click here to download Jim Cramer’s Guide to Investing free to help you build long-term wealth and invest smarter.