Jim Cramer Tells Caller to Average Down on Netflix (NFLX)

On the August 11 episode of Mad Money, Jim Cramer addressed a listener's question regarding Netflix (NFLX) trading about 15% below their initial purchase price. Cramer advocated a systematic approach, emphasizing that investors should focus on the stock's future potential rather than its past performance. He suggested buying more Netflix shares to average down the entry price, as the company's price-to-earnings multiple remained stable at 20.

Cramer's investment thesis has remained consistent throughout market volatility, even when Netflix faced headwinds such as its failed attempt to acquire Warner Bros. Discovery assets. Despite short-term concerns, Cramer believes the compressed valuation offers an attractive entry point and that institutional ownership and minimal short interest provide strong support for the long-term outlook.