Cramer rejects Buffett's stance on stock picking, endorses a hybrid investing model

  • "I respect Warren Buffett, but I'll always be a Peter Lynch guy," CNBC's Jim Cramer said in reaction to Buffett's comments recommending individual investors buy index funds in lieu of individual stocks.
  • Cramer provided a list of retail stock ideas for investors to test Lynch's principles.
  • The "Mad Money" host advised retail investors to take on a "hybrid model" of owning an index fund for retirement while owning stocks with discretionary money.

In this article

  • GPS
  • AEO
  • RL
  • SWK
  • VFC
  • PVH
  • WHR
  • LOW
  • COST
  • WMT
  • BRK.A

CNBC's Jim Cramer on Monday rejected Warren Buffett's assertion that Wall Street's new retail investors stay away from individual stock picking in favor of investing in index funds.

"I respect Warren Buffett, but I'll always be a Peter Lynch guy," Cramer said on "Mad Money," reacting to the comments from the Berkshire Hathaway chairman and CEO. Cramer favors the investment philosophy of Lynch, the legendary investor known for his management of Fidelity's Magellan Fund and his book on investing, "One Up on Wall Street."

Lynch's philosophy is based on an investor taking advantage of his or her ability to observe, study and take action on a stock, Cramer said.

"That's why I believe in a hybrid model. I don't share Buffett's contempt for homegamers who try to pick stocks, nor do I want you to go all-in on individual stocks," he said.

Cramer provided a list of retail stock ideas for investors to test Lynch's principles.

  • Walmart
  • Costco
  • Lowe's
  • Whirlpool
  • PVH
  • VF Corp
  • Stanley Black & Decker
  • Ralph Lauren
  • American Eagle Outfitters
  • Gap

"I don't mean to make it sound simple. If you want to invest like Peter Lynch you need to actually visit these places or try things on, whatever sparks your curiosity," said Cramer, suggesting that viewers read Lynch's book. "But I think one or two of these reopening plays go well with an index fund in your retirement account."

A spokesperson for Berkshire Hathaway did not immediately return a request for comment.

Disclosure: Cramer's charitable trust owns shares of Walmart and Costco.

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