Companies 'can't really plan' in muddled economic cycles, Jim Cramer warns investors

CNBC’s Jim Cramer on Thursday advised investors to accept that companies will most likely continue struggling to plan for the future as they adjust to quick, constantly evolving changes in the economy.

“In that kind of environment, you can’t really plan — you just have to guess,” the “Mad Money” host said. “And 2022 will be known as the year when many businesses and portfolio managers guessed dead wrong.”

An unrelenting bevy of headwinds, including persistent inflation, the Federal Reserve’s interest rate increases and surges in Covid cases have rocked the economy this year as companies struggle to procure supplies and consumers as costs and shortages hit them on every level.

At the same time, these firms have had to contend with changing consumer habits spurred by changes in workplace norms and reopening economies.

Sales of personal computers have slumped since the height of the pandemic as people return to the office, Cramer pointed out. At the same time, gaming companies have struggled to keep their pandemic gains as consumers spend less time indoors.

Consumers have also scaled back on discretionary spending in general as skyrocketing inflation has hit their wallets hard this year, creating excess inventory at retailers such as Walmart and Target. 

At the same time, even companies offering in-demand products and services are seeing headwinds. Automakers are struggling to fulfill orders for electric vehicles due to the ongoing chip shortage and climbing costs for batteries.

“We have never seen so many booms and busts occurring almost simultaneously,” Cramer said.

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

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