Mad Money w/ Jim Cramer Mad Money w/ Jim Cramer 7/31/25
Aug 1, 2025
In this discussion, Ernie Garcia, the co-founder and CEO of Carvana, shares insights on transforming the used car market through e-commerce. He reveals Carvana's innovative strategies and ambitious sales goals, emphasizing their unique seven-day return policy for customer satisfaction. Garcia also addresses the complexities of integrating technology into automotive retail, while reflecting on recent market challenges and credit scoring dynamics. His visionary approach to car buying is reshaping consumer expectations, making this dialogue a must-listen for investors.
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Valuation Matters Deeply
- Valuation matters deeply in the stock market and can define market moves, as seen with Figma's IPO frenzy.
- Overpaying based on sales instead of earnings signals dangerous market euphoria that can hurt investors.
Microsoft and Meta Earnings Strength
- Microsoft and Meta crush earnings fueled by AI investments, yet their valuations remain reasonable relative to earnings.
- These giants deserve higher valuations given their earnings strength compared to the S&P 500 average.
Fig Newton's Law Warning
- Figma trades at over 60 times sales, far exceeding reasonable valuation compared to Microsoft and Meta.
- This signals the arrival of "Fig Newton's Law" — lofty valuations that are unsustainable and likely to retract.
