Companies ‘can’t really plan’ in confusing economic cycles, Jim Cramer warns investors

On Thursday, CNBC’s Jim Cramer advised investors to accept that companies will most likely continue to struggle to plan for the future as they adapt to rapid and ever-evolving changes in the economy.

“In that kind of environment, you can’t really plan – you just have to guess,” the “mad money“The host said. “And 2022 will be remembered as the year many companies and portfolio managers got it wrong.”

A relentless host of headwinds, including persistent inflation, Federal Reserve interest rate hikes and surges in Covid cases have rattled the economy this year as businesses struggle to secure supplies and to provide consumers as costs and shortages hit them at every level.

At the same time, these companies have had to deal with changing consumer habits spurred by changing workplace standards and the reopening of economies.

Personal computer sales have plummeted since the peak of the pandemic as people return to the office, Cramer pointed out. At the same time, game companies have struggled to hold onto their pandemic gains as consumers spend less time indoors.

Consumers have also cut discretionary spending in general as soaring inflation has hit their wallets hard this year, create excess inventory at retailers like walmart and Target.

At the same time, even companies with in-demand products and services are experiencing headwinds. Automakers are struggling to fulfill orders for electric vehicles due to the continued shortage of chips and escalation charges for batteries.

“We’ve never seen so many booms and busts happening almost simultaneously,” Cramer said.

On the consumer spending experiences side, airlines have had to reduce after taking on more than they could handle during the rebound in summer travel, leading to flight cancellations, delays and lost luggage.

“These changes are happening everywhere with miserable consequences. … No one knows what to do,” he said.

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