Cloud Princes

Jim Cramer has been talking about “Cloud Kings” and “Cloud Princes”

The Cloud Kings are stocks like: Salesforce, Adobe, ServiceNow, WorkDay, VMWare, Splunk. He says they’re good companies, have outpaced the S&P, but the problem with them is that they’re large and so the Law of Large Numbers inhibits their growth. But, good for retirement accounts.

He says if you have a separate, more speculative, account then you should consider the “Cloud Princes.” These includes stocks like Coupa Software, Tableau, HubSpot, New Relic, Okta, and Atlassian. You’ll recognize 3 of those names as Saul owned stocks (I think Saul’s out of HubSpot now though).……

I’m not a Cramer fan, but it does appear that in this case he’s thinking along some pretty good lines.


It’s funny because Atlassian, a “prince,” is actually a larger company (by mkt cap) than Splunk, a “king.”


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As if you’d be crazy to have a retirement account holding both Splunk and Okta…

Cramer isn’t always wrong, but his signal-to-noise ratio is quite low.

As if you’d be crazy to have a retirement account holding both Splunk and Okta…

I hate being put in the position of defending Cramer, but I certainly wouldn’t broadcast a generic recommendation for people to invest Saul-style. Most people don’t pay nearly as close attention to their investments as we do, and they’ll certainly lack the analysis prowess and agility needed to pull it off.

Like anything else, the advice for experts is different than for laypeople. I wouldn’t tell most people how to drive turns on a twisty mountain road - many would crash. However, serious amateur drivers could share tips and techniques, whether heel-and-toe, engine braking, or ideal path through s-turns.

I think Cramer struck the right chord in saying that such investments should be in a speculative portion of one’s portfolio. We know better because we know and continually analyze and react. Most people listening to Cramer just write down the names of companies he likes to buy and hold.


Everybody is always bashing my poor buddy Cramer. Keep a few thoughts in mind about his show:

  1. It’s free
  2. It’s a great source of information and ideas about stocks
  3. He tends to appreciate a lot of the stocks and secular stories that we follow here.
  4. He does some solid CEO interviews.
  5. He does a better job than anyone else I have ever heard explaining the vagaries of the market.
  6. He is the most accessible of the worthwhile pundits
  7. It’s free