Cramer's Stop Trading: Whirlpool

Key Concepts:

• Tariffs
• Whirlpool (WHR)
• Market Distortion
• American Manufacturing
• Overseas Competition
• Cost Increase
• Government Intervention
• "What Is to Be Done?" (Lenin & Chernyshevsky)

Whirlpool and Tariffs:

The discussion centers on the potential impact of tariffs on Whirlpool (WHR). The speaker believes that the government's decision to support Whirlpool through tariffs against foreign appliance manufacturers could significantly benefit the company.

• Valuation: Whirlpool is currently trading at seven times earnings.
• Price Target: The speaker suggests the stock could quickly reach $120 due to the anticipated market dominance resulting from the tariffs.
• Market Rationalization: The speaker has been anticipating a scenario where the appliance industry rationalizes, implying a reduction in competition.
• Tariff Impact: The tariffs are expected to be substantial, making Whirlpool's products comparatively cheaper than imported appliances.

Arguments for and Against Tariffs:

The conversation explores the pros and cons of tariffs in this specific context.

• Pro-Tariff Argument: The speaker argues that American manufacturers have been "crushed" by overseas competition and that tariffs provide an opportunity for these companies to recover. The speaker implies that many American appliance companies were sold to Asian entities.
• Con-Tariff Argument: A counterpoint is raised that tariffs will likely result in higher costs for consumers. This is framed as a situation where the government is prioritizing workers' interests, even if it means consumers pay more. This is described as not socialism, but a government intervention.

Geographic Considerations:

The discussion touches on the location of Whirlpool's manufacturing facilities.

• Location: Whirlpool's factories are primarily based in Michigan.
• Relevance: The location is relevant because it highlights the potential for job creation and economic benefits within the United States.

Historical and Ideological References:

The conversation takes an unexpected turn with a reference to political literature.

• "What Is to Be Done?": A participant mentions "What Is to Be Done?" by Lenin.
• Chernyshevsky's Precedence: Another participant corrects the attribution, noting that Nikolai Chernyshevsky wrote a book with the same title prior to Lenin.

Synthesis/Conclusion:

The main takeaway is that tariffs could significantly benefit Whirlpool by reducing competition from foreign appliance manufacturers. While this may lead to higher costs for consumers, the argument is presented that it could revitalize American manufacturing and protect American jobs. The discussion also highlights the complexities and potential unintended consequences of government intervention in the market.