Skip to main content

tv   Mad Money  CNBC  September 26, 2012 11:00pm-12:00am EDT

11:00 pm
that's why every year at this time, i like to atone for my bad calls in keeping with the taken of atonement. in order to learn from what i did wrong and hopefully earned your respect for what i'm twrig to accomplish on "mad money" even when i don't get it right. there are always going to be calls that don't pan out the way we expect but good investors add in for self-flatulation to minimize the blunders of the costly errors repeating themselves. tonight, i'm going to renenstrate -- demonstrate a number of bad calls i have made on "mad money" in the past year. explaining why they occurred, what went wrong and what you can still do about it to temper the severe decree and make things better. before i get into specifics, though, let me give you a sense of what i see as the biggest kinds of errors i seem to have made over the last year and
11:01 pm
howly vow to try not to make them even as different ones pop up to houaunt you. this is a humbling market. the last year has been filled with instance after instance that should have destroyed the stock taking it back to the generational lows. we had crisis after crisis in europe involving potential implosion of whole countries let alone gigantic and reckless banks. it's unprecedented run on everything. and it is repeatedly threatened to trigger a lehman brother style crisis. we've had total gridlock in washington and face decline in federal spending. the fiscal cliff, you should call it the fiscal wall. we still haven't dipped below 8% unemployment. remarkable when you consider how long it's been since the actual
11:02 pm
economic crash. we have a federal reserve that's so exasperated with its inability to get the economy moving, it's taken the unprecedented position saying it's going to stay acome date. aka, print money. we still are one more unthinkable, a slowing chinese economy. the great growth engine -- the great engine of growth that has supported global commerce for years. >> all aboard! >> including the darkest days of the dark recession. what's happened? stock market never quit, never stopped climbing. it's had a remarkable run with every sector leading the charge at one time or another. before i get into the big remonstrations for the evening.
11:03 pm
i have gotten the big picture right. the europe, the slowdown of china and the perma low growth, the united states. some income producers, growth names and stocks with solid dividend boosts and, of course, some gold. these have been the correct calls to make. i've stuck with this market because i believe europeans are not suicidal. so far so good on that front. at least of late. i believe chinese economy will simply come back by virtue of the fact there's a tremendous urban migration within china. i believe the federal reserve's stance, brought about you by ben bernanke, will serve as a bridge over fiscal cliff and not take us down. the federal stance will take higher paying dividend companies into gems, seeking income, we'll band in bonds of cash poor countries and buy cash rick countries with yields that well exceed treasuries and still own a lot of gold.
11:04 pm
there's not a nation on earth that doesn't want its currency lower. that reserve currency is gold. also not to toot my own horn too hard, but throughout this period i recognized primecy of some bigger stocks, intel, wells fargo, verizon come to mind or the recognition you must own, not trade, own apple until it's too expensive versus it's growth rate and it's not near there yet. you have now heard pretty much everything. you've heard the last of when i've done over the last 12 months, at least for this evening. while i can already see the youtube about how cramer himself admits he's always getting things wrong, i thought for posterity i should lead with something more positive about "mad money," the youtube clips you post or go on jim cramer economics, hey, knuckle head, didn't you hear everything i got right? i'm going to give you examples
11:05 pm
mistakes i've made in true atonement. it's very rare now i suggest a quick trade that goes awry because anyone who has watched the shows knows i've moved away from trading. i cajole you into buying stocks, investing in stocks. my mistakes rarely have to do with homework. these days i'm doing more and better homework than my hedge fund with a terrific staff of savvy people who have been with me a long time. if anything, it's the opposite of rookie mistakes i'm making. call them veteran mistakes, rooted in arrogance, confidence, and belief what's worked before has to work again. blunders i make because i sometimes feel like i've seen this movie before and i know how it ends when the great challenge of investing in the stock market in reality it's like a close sporting event when you don't know how the outcome will be. when you're sure you do, that's
11:06 pm
when you get the big upset. the worst errors i've made have to do with trust. too trusting or not trusted enough. i've trusted way too many executives, for example, apple's dominance. or told me they wouldn't need to raise capital and they did soon after being on the show. who told me not to worry about a particular cycle, they could buck it, and then they didn't. other managers i didn't trust, execs upon closer review deserved a second look and more credit, something i'll give them tonight, because they, too, have changed. maybe for the better. i do this night of self-criticism show every year to remind you that while i come out here daily to try to get it right, i am only human. and i fell prey to all of the misjudgments humans fall prey to. i warned against battered first solar even as a representative gave me a terrific chance to
11:07 pm
buy. i had some that were couched as speculation, and i told you you could buy them if only speculative, and in your eyes they became blue chips gone awry and it was my job to make sure you didn't feel that way. most of all, i didn't believe in my own work and my frustration led me astray when the market was right when i was wrong. to be credible you have to be get rid of the incredible. it would be incredible if i was right every night, even if i claimed to be. although i did nail the big picture. sit back as i atone from my sins so we can learn from my mistakes and profit from them. i need to start the calls by going to ed in texas. >> caller: ed in houston i have a question about the fed's zero interest rate strategy.
11:08 pm
it seems like uncle ben has pushed investors into stocks, paying everybody, dividend payers, nondividend, even the pure chunk. i can see the merit in buying the high quality dividend payers but just like the growing split in our countries rich and poor, the lower quality nondividend stocks may soon break from the pack, falling hard and fast based on their fundamentals. >> it's funny, ed. david faber and i keep this all around, he's with me on "squawk on the street" and we say would wouldn't it be great if ben bernanke gave us rules for stocks not to buy. that is what i call collateral damage to a policy i think will ultimately get us out of this rut. cat in florida mror. >> caller: hi, jim. do you think the presidential election this year might affect the movement in the stock
11:09 pm
market? >> i care far more about who wins congress. if we stay split congress you we quoent do anything. if it's all democrats, have you to trim back dividend stocks i like because you'll have to pay higher taxes on dividends. tom in california. >> caller: boo-yah, jim. thanks for your help. several stocks i have followed have taken a 3% to 8% dive and then i read later that day the company is making a public offering. over the next several weeks the stocks rebounded. my question is, is this a pattern you think we can count on and try to exploit? >> yes. this is a pattern that will happen and i'll tell you why. lots of companies will expand, they have higher credit lines, higher interest and they pay down some of that with equity with the money they raised and they get a better credit line. i think we'll see a lot from the real estate trust industry and master limited partnerships. my favorite mistake, well,
11:10 pm
nobody likes mistakes. but in the wild world of investing nothing can be more valuable than the hard learned lessons. so, sit back and lets learn and become better investors. or give us a call at 1-800-743-cnbc. miss something? head to madmoney [ male announcer ] this is rudy. his morning starts with arthritis pain. and two pills. afternoon's overhaul starts with more pain. more pills. triple checking hydraulics. the evening brings more pain. so, back to more pills. almost done, when... hang on. stan's doctor recommended aleve. it can keep pain away all day with fewer pills than tylenol.
11:11 pm
this is rudy. who switched to aleve. and two pills for a day free of pain. ♪ and get the all day pain relief of aleve in liquid gels. oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. ♪ [ male announcer ] every car we build must make adrenaline pump and pulses quicken. ♪ to help you not just to stay alive... but feel alive.
11:12 pm
the new c class is no exception. it's a mercedes-benz through and through. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.
11:13 pm
♪ who let the dogs out >> stocks j.k. rowling told us in her commencement address so what can we learn from the fail you'res of the last year, you should always remember that even dogs have their day. when you've hated a dog with good reason all the way down and you've been consistently right,
11:14 pm
don't push your luck. eventually that dog will bite you. in other words, when you're saying that a stock ask-s a sell, sell, sell and it gets slaughtered day after day at some point you have to know when to declare victory and just move on. that's the lesson of first solar. in may i zeroed in on why i thought first solar was a value trap. a stock that appears to be cheap but going much lower because the business is in long term decline. i was feeling good about myself on that one. pat myself on the back. i was so pumped because i told you to get out of first solar when it was $138. it's been down, 60s, 30s, 40s, 20s and i thought it might be what we call a zero shot, meaning going all the way down to zero. i couldn't resist issuing one more sell call when it hit 13. i said it was untouchable as it depend on subsidies as they were going away. without those i said the products were too uneconomic to
11:15 pm
buy. i dismissed the antidumping tariffs anticommerce dumped on chinese solar imports. even as it was a major 31% tariff that made it so first solar was more competitive. plus i dismissed the importance of green energy to germany and orders kept coming through even as total allocation for solar power got cut back. then they got a slew of orders and the stock doubles. i was stock about the stock being a value trap. most important, i had a huge home run telling you to get out at 138. why did i press it? greedy on the short side as a stupid buyer is on the long side. with first solar i arrogantly failed to practice my mantra, that bulls make money, bears make money, and hogs get slaughtered. i was no longer just being a
11:16 pm
bear on first solar, i was being a hog. i blew it. when it was at 13 i should have bren changing my mind instead of digging in my heels. the stock is down more than 100 points from where i first told you to sell it, it's never too late to declare a victory, as well as atone myself when there were 13 points to the downside. the business is not so horrible. no reason to buy it but no reason to hate it either. is first solar a terrific situation? no. was it a value trap at 13? no. no more than darden was a value trap in september of last year when i said the parent company of red lobster and olive garden blocked in the cellblock. i love olive garden, route 22, usually too crowded on sundays and even route 202, forget about
11:17 pm
it. oktoberfest at red lobster and the scooter beer is to die for as long as you're not driving. after many months of subpar, they announced they were going down. olive garden represents 50% of the company's profits were notching a 2% sales. i opted you to get out and get into yum brands instead. i can pat myself on the back for this one because yum rallied 20 points before pulling back slightly. darden advanced smartly, too, gaining 14 points on 43 -- roughly 30% run. several lessons to be learned here. first of all when you own shares in a company dividend backed up by cash flow, you can afford to be patient and wait for a turn. they're paying you to wait. even if a turn doesn't occur, and i can argue it actually hasn't done all that much at
11:18 pm
darden, you don't need to throw in the towel at the same time when the stock was overly punished for its sins. darden isn't that much better but the stock is more attractive as a reinvested dividend, low interest rates, competition from bonds is small and possibility of a turn, major turn, not just little one, at some point in the future really matters. recently they talked about increasing earnings over 50%, gave a multiyear look at growth plans. company followed with a pretty good earnings report that showed re-acceleration in olive garden division. still waiting for red lobster. i should have known to give up when everybody else gives subpoena a rookie mistake. the balance sheet is good and brands are blah. the moral of the story, fine hated darden, there was a better time to sell. be careful of asserting something's a value trap because you feel trapped. sometimes there's value and it takes time to bring out. as long as the cash is there and the company is making money, it's worth waiting, especially when you consider i never lost
11:19 pm
my ardor for going to olive guarden and wearing cargo pants so i can stuff in the rolls. the never ending bowl of salad, every time i go there, i give them a beatdown. bottom line, even dogs have their day. i should have declared with solar power and recognize when you're selling too soon like darden.
11:20 pm
for 30 some years at manytendet different park service units across the united states. the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved. now, i'm going to be able to have the time to explore something different. it's like another chapter. [ horn honks ]
11:21 pm
hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving. with xerox, you're ready for real business. there's natural gas under my town. it's a game changer. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it. design the wells to be safe.
11:22 pm
thousands of jobs. use the most advanced technology to protect our water. billions in the economy. at chevron, if we can't do it right, we won't do it at all. we've got to think long term. we've got to think long term. ♪ booyahs come all across the country. ♪
11:23 pm
all night i'm highlighting my biggest mistakes from last year. there's a little massacism in there, i can't resist. we atone, we adjust, we're better for it. that's the "mad money" way. as much experience as i have, you're never too old to make the classic mistake of falling in love with a stock. which is too bad because it's the quickest way to wreck your portfolio. here's a cautionary tale, a love story. my bad romance with chipotle. they warn us at the end "the day i first met you you told me never fall in love" but did i listen to demi lovato?
11:24 pm
no. i fell in love with chipotle. i feel like my head hit the concrete. here's my background with chipotle. i have two vegetarian kids, they abhor traditional fast food and because chipotle is organic and my daughters love chowing down from a veggie burrito. i loved the food, the service, uniformity and i admire the company trying to do things right with food. encouraging healthy eating. i have go with gut with my kid. my daughter was practicing field hockey and we had to go to panera. nowhere near. the whole team eats there. chicken caesar, no chicken, hold
11:25 pm
the dressing. the stock is now 120 points higher. apple, 650 points ago -- wow -- i bought my youngest her second ipod. a second one of the same thing? jewelry, but more valuable? who has one necklace, she reminded me. don't get me stuck on shoes. the choices were always the same, i want the new ipod, new itunes card, 4s, the ipads 1 and 2. they didn't get all of them. i don't spoil them. i'm not in the 47% and i have spared the rod, mostly because of comfort services. when my kids get comfortable with something like panera, apple, i could be on to something tremendous. what they're not onto is
11:26 pm
valuation. panerra, chipotle, i liked it for years economy believed it had to go to the sky. i could not envision a world would it would run out of steam. it just got slightly dinged during the great recession. international, saving grace of mcdonald's and yum was rolling out europe. i like that next concept of the south house southeast asian kitchen in washington, d.c. when i visited and the food not up to snuff. i thought they would get it figured out. again, i was struck bit sensitivity to vegetarians and longed to take my kids there. i suspended my judgment and decided they were miracle workers. they figured it out quickly. third, i loved the video they made about how they were the polar opposites of other fast food. like whole foods, almost sainted and comfortably above the fray.
11:27 pm
i figured the value cops couldn't catch chipotle. too fast, too perfect, never weaving and never wildly accelerating and breaking like some drunk driver on the jersey turnpike, who is careless and gets his license taken away. that's why i could justify telling people to buy chipotle at twice its growth rate at 22%. 45 times earnings. which is what the stock got to not long before fabled 100-point decline day. 45 times earnings. what happened on that down day? the company revealed the same store sales growth decelerated from 12% to 8%. and the earnings would not be as robust as we thought. the international space didn't matter too much. suddenly we didn't care about some south asian understoodle thing going around dupont circle in washington. all that matter was 8% sales
11:28 pm
when it was 12% and chipotle's management suddenly telling us the weaker economy had caught up with them. huh? i always thought this company was immune to such pedestrian issues as economy and consumer spending. we were in chipotle because we didn't want to worry about that. i was wrong. they weren't wrong. i was wrong. i violated lovatlovato's admoni. i fell in love. i told a caller to play deep in the money call options. i said if something went wrong you could be stopped out at 350, well above where it went to. doesn't matter. i got carried away by consistency of management. my daughter's love for the food. how right their judgment had been in so many other case. therefore, my judgment was right. what should i have done? i should have said, you know what, i like chipotle very much but when it's trading at twice
11:29 pm
as much as rules, which makes it dicey and in the end they are just making burritos. they may not be causing cancer like the other guy but they aren't curing it, either. i should have been doing the value analysis, finding out where the stock is cheap not where it isn't too expensive. i'm just inclined to wait and see as i hear things are better. deep in the money calls is the only way to play chipotle because any stock that can go down 100 in a day is too risky to own. pay up, give yourself the premium and take the protection deep in the money calls give you. while we're talking about stocks where i suspended my skepticism and overstayed my welcome i should mention deckers, makers of uggs boots. i didn't get it that wrong. made us a ton of money over the years and when the concept broke down i told you to sell at yats. it's now in the low 40s. i should have told you to leave
11:30 pm
much earlier, much higher. . december 2010 i did something foolish in retrospect. i let my enthusiasm get the better of me and declared uggs were not a fad. not a fad. after that deckers did run up 35 points. then it peaked and since then it's given up more than 75 points when it turns out while uggs had staying power their growth was faddish. the shoe style was a long lasting and fad. fad nonetheless. the day will come when i have to leave deckers. i would exonerate myself. i was too confident. any points where i thought this was a permanent grower i gave up by not suggesting perhaps you would have to get out when there were signs, and there were ample signs, the fad was coming to an end. bottom line, take a page from demi lovato, who's brilliant, and never fall in love, at least not with your stocks. once you're smitten, you end up with mistakes like chipotle or deckers those are not the mistakes you want to make twice.
11:31 pm
jeff in florida. >> caller: boo-yah, jim, the heart of the i-4 corridor in florida. >> one of my favorite places. there's a crystal there. i've had a lot of crystal burgers and bucket. what's up? >> caller: the iphone 5, everybody figuring out things with the old iphones don't work now, they changed the plug. i'm looking for something to complement that, speaker, docking stations. what do you recommend? >> the apple plays have been, to say the least, dodgy. i heard some british guy say that the other day, and i wanted to incorporate it. you have to stick with apple. the ancillary plays are too ancillary and not responsive to the stock itself. sal in new york. >> caller: jimmy boy, boo-yah to you. i have a question about the premarket and after-market. >> sure. >> caller: usually bad news comes out late in the day, like
11:32 pm
4:00, 5:00. we get hurt, you know, from the after-market, and then the morning comes and we get hurt against. what can we do to protect against that? >> nothing you can do. do deep in the money calls and stop out, but trading after-hour, they're losing money. most are losing money. one or two get out but the most are getting pounded like you. let's not fret the program, let's not sweat the program. give your heart and your portfolio a break. don't fall in love with stocks. don't be blind. investing is about money and cold, hard facts, not your heart. stay with cramer. keep up with cramer all day long. follow at jim cramer on twitter and tweet your questions. now, that's what i call a test drive.
11:33 pm
silverado! the most dependable, longest lasting, full-size pickups on the road. so, what do you think? [ engine revs ] i'll take it. [ male announcer ] it's chevy truck month. now during chevy truck month, get 0% apr financing for 60 months or trade up to get the 2012 chevy silverado all-star edition with a total value of $8,000. hurry in before they're all gone!
11:34 pm
11:35 pm
while we're on the subject of mistakes i've made over the last year, we need to talk about trust issues. sometimes i'm way too tough on managements and sometimes i give executives too many free passes.
11:36 pm
tonight i want to examine two swayings where i did wrong by trusting too much in one case and tooings little in the othe i want to rectify them. i got disappointed with the serial of procter & gamble, the callings, lack of toughness, bob mcdonald's regime. i called him massively incompetent and said he turned proctor into a gamble. it was only fitting. mcdonald belonged on the wall of shame. now i'm thinking that judgment will no longer hold up under close scrutiny. yes,he did take his forecast down twice. yes, the stock had done nothing for most of his tenure as ceo and colgate and little church and dwight had been taking share. no longer, though. mcdonald's no dope. frankly you don't get to run one of the largest corporations on earth by having a moron at top.
11:37 pm
no. he saw what we all saw. back in february he announced a $10 billion cost savings initiative. my first reaction to that was to say, how could he have allowed so much fat to begin with? the stock languished after i put mcdonald on the wall of shame. the more research i did, i found out the $10 million cuts were needed because of the largese. mcdonald turns out isn't such a softy. this former army ranger has been true to his word and he's well ahead of his $10 billion target goals. mcdonald has made changes. he's done them quietly to the management of underperforming dwigs. he's not a guy that just throws out head for headline. he's introduced new products like tide pods and taken an amazing amount of share back from the other guys. one of the most remarkable
11:38 pm
transformations i've seen. rolled out niche products like zzzquill works for hard core insomnia cases, me, asleep in ten minutes flat. pulled out all the stops with ads that helped augment proctor's share gain and kept the new-found momentum going. changed from a strong dollar to a weaker one and declined the cost of raw goods that go into proctor's vast array of products. stock of pg is unstoppable because i think mcdonald's plan is working. i believe he had to deal with some of the same deelts with alex gorsky is dealing with at johnson & johnson. it is my job here to recognize when it's still early enough to matter that i may have been too quick to join the mob of anyway sayers of which there are multiple ones, howling for
11:39 pm
mr. mcdonald's head. although, believe me, he is more than willing to accept any blame for things that have gone awry during his tenure. you know what? i think mcdonald, after some initial, let's call them blunders, is turning the good ship procter & gamble around. i think he's more than atoned for whatever he's done wrong. i want to do the same, which is why tonight i'm taking mr. mcdonald down from the wall of shame. in fact, i'm tempted to buy the stock for my charitable trust, that is, if it ever comes in. have you missed the move? i don't think on. there will eventually come a day, one or two down days, where i can pick up some. given their buy back, cash flow and bountiful dividend i don't think any down draft will last very long. the trust will be in there buying along with you because of the turn mr. mcdonald is engendering. i was too hard on mcdonald. who haven't i been hard enough on? who have i been too soft on? how about kelsey warren,
11:40 pm
chairman/ceo of energy transfer partners. the stocky hate the most on my charitable trust. this is a remarkably poor performer. it's 8% plus yield. can't break the fall. why have they become such a loser? warren, ceo, lacks discipline. keeps buying and buying, piling debt on top of deb, thereby forcing his company to do equity deals, like he did after coming on this show and moved the stock higher with promises of good growth in 2013. talk about shameful behavior. my charitable trust wants to see what happens when the sunoco acquisition closings, which could happen next month. he hopes that will get them out of the natural gas deal he dug. i've lost faith in his leadership because he cannot grow distribution despite all the deals he's done. he's done the impossible.
11:41 pm
he's created an oil and gas pipeline that should have taken advantage of all the new finds of oil and gas in this country, like mark west, kinder morgan, enterprise partners, he should be raising distribution while growing earnings along with the industry but now he's given us a stock we can't sleep at night because we feel the distribution might be at risk. this may be the worst mlp on earth. i am blaming myself believing in this guy. i'm the chump for doing so. i'm not going to slap warren's mug on the wall of shame just yet. i want to see energy transfer partners pop when sunoco deal closes shortly. if it doesn't, and if warren insists on doing one more horrible equity offering on top of the last one he gaffed us with three points ago, then this empty space left by mr. mcdonald, it will belong to him. i don't even like putting these two men in the same sentence, let alone, the same wall. management matters which is why it's important you know how to figure out which executives
11:42 pm
deserve the benefit of the doubt and which ones deserve only skepticism. yeah, i should have trusted bob mcdonald and procter & gamble rather than sticking him on the wall of shame and i should have been more skeptical of kelsey warren at energy transfer partners. as they say, it's never too late to atone. if i weren't fasting, i would say pass me the crow, hold the salt. stay with cramer. [ engine revving ]
11:43 pm
♪ [ male announcer ] every car we build must make adrenaline pump and pulses quicken. ♪ to help you not just to stay alive... but feel alive. the new c class is no exception. it's a mercedes-benz through and through. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan,
11:44 pm
in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. e want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this.
11:45 pm
nothing worse than making a call, getting the substance right and then blowing the execution. you get frustrated, impatient and couldn't wait for your thesis to play out. consider this the classic unforced error i made with ensco, when it became clear oil wasn't going lower. i first thought about halliburton after we saw the firm's dominance in shale, since they are the technological leader in fracing. with no place to store the stuff, no place to export it, we have a glut of incredible
11:46 pm
proportions. every day we burn off enough natural gas to handle the daily needs of several major cities. with that i recognize that, well, halliburton couldn't and can't have breakout earnings until enough of business has switched over to oily fields which drew me to offshore oil because that's where the action is going to be for many years to come. in this place two true plays, transocean and ensco. transocean look the really good but the fleet was aging and balance sheet stressed by bp spill. i read a great article in "new york times" reading they had more to do with the spill than bp. ensco, much newer fleet of rigs, less maintenance, broader customer base, exxon and chevron, not bp. contract prices on the upswing and they got a tremendous deal. they say they stole pride
11:47 pm
international. another drilling concern. i said not only would ensco blow away numbers, but it had a multiple year earnings path as clients won't cancel deep water rigs because the oil pricings plummeted for a couple days. what happens? terrific quarter, oil goes up and ensco rallies around 14 points. i know it because i owned the stock for my charitable trust. i got greedy. trust trim a bit of position, took very little off the table. that's such a huge move, they need to take off at least 25% when you get a 25% increase in price. then price of oil plummets, goes down hideously. people can become concerned ensco won't make their numbers, that's how it works.
11:48 pm
one of the worst sins you can commit, round trip, gave up my gains, can you imagine? now you have to put yourself in my head with the 423 other people in there. if i can just get a little bit back more, a little bit back to even i'm going to get out of there with a nice yield gain. stock goes to high 40s. what do i do? a get out. do i care the earnings were better than expected multiyear? absolutely not. all i cared about is i made some profit now i was done with it. the next weekend ensco gets out of the s&p 500, i heard was going to happen. jumps three points. like so many stocks that get included, ensco keeps climbing. ten points higher instantly after i sold it. now, if you sit back and ask what i did wrong it's simple.
11:49 pm
i lost my patience. i couldn't take it. i was so angry at myself that i stopped caring if i was right or wrong. i wanted to get back to even and earn a few cents more. moral of the story is simple, if you have a thesis and it's playing out, don't let the action in the stock dictate your action. don't be so greedy you fail to take too much off the table when the thesis plays off. i many so angry i took esc off my screen. a fabulous company taking names, kicking butt that i simply got impatient with so i missed the gigantic score. stay with cramer. as the president urges big business to encourage our own ingenuity -- >> my message is, now is the time to invest in america. >> skramer is on the ground fining the homegrown bulls ready to run. >> this is about made here. this is about made in america and made great. >> "mad money" with jim cramer
11:50 pm
weeknights 6 p.m./11 p.m. eastern. ♪ [ male announcer ] introducing a stunning work of technology. introducing the entirely new lexus es. and the first-ever es hybrid. this is the pursuit of perfection. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars
11:51 pm
back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference. ♪ [ male announcer ] introducing a reason to look twice. the entirely new lexus es and the first-ever es hybrid. this is the pursuit of perfection.
11:52 pm
with over 25 years of bull and bear market, let coach cramer show you how to win. >> you and the staff are keeping us in the game. >> "mad money," weeknights on cnbc.
11:53 pm
>> day of atonement show can be complete without chest beating, since there's so much to learn every day in this game. the sin of believing some executives can do no wrong. isn't that what i committed by endlessly commitmenting jamie dimon, which to find out he's arrogant. pointing out a rogue trainer, the whale, to wipe out giant money. oh, memo to dimond, you want to seek redemption? say no to your bonus. to believe senate can override an entire apple-driven product. semimade the touch screen chips.
11:54 pm
i would have told you how wrong that is. what else? how about for the sin of not forgiving sirius logic for a miss before one of the greatest runs i've seen. even as i recognized jobs anighted service logic. left that on the table. for the sin of believing in an exec who kept making excuses after excuses after excuses for failure, jim hagerdorn, scotts miracle grow. issue a hard earning report. for the sin of thinking a company changed its stripes when it was only the ceo saying it had done so, in devin energy which i thought was moving to become another oil company but it was not ready for the glut. southwestern energy never pretended it was nothing more
11:55 pm
than nat oil company or capital oil and gas, which has the great growth i was looking for from devin. supermarkets cannot compete against dollar stores and walmart and target, whole foods, trader joe's are at the top. i'm throwing in the towel. don't own the stock. the sin of thinking coal was king after fukushima disaster. i told you to buy peabodiy energy moving from nuke source of power. i was too clever by half. stock was cut in half, a glut of natural gas and a slowdown in china i didn't see coming. i should have told you to sell coal that natural gas is so cheap we may never build another coal plant again. for these sins and for so many others, i ask for your forgivene forgiveness. i promise i'll do my best to make fewer mistakes next year, as i do every year. at least, alas, i admit i make
11:56 pm
them and i hope to temper any severe decree you might otherwise give me because of that. stay with cramer. does the market have you stuch stumped? no fear, cramer's here. e-mail him. [ man ] not only that, the silverado's powertrain warranty is 40,000 miles more than ford. and this workhorse gives you the power of a v8 with the highway fuel economy of a v6. incredible! right? an amazing test drive. i agree. [ male announcer ] it's chevy truck month. now during chevy truck month, get 0% apr financing for 60 months or trade up to get the 2012 chevy silverado all-star edition with a total value of $8,000. hurry in before they're all gone!
11:57 pm
11:58 pm
i'm an expert on softball. and tea parties. i'll have more awkward conversations than i'm equipped for because i'm raising two girls on my own. i'll worry about the economy more than a few times before they're grown. but it's for them, so i've found a way. who matters most to you says the most about you. massmutual is owned by our policyholders so they matter most to us. massmutual. we'll help you get there.
11:59 pm
that was one tough atonement session. like i say, always more, i'll find it for you right here on "mad money." i'm jim cramer and i'll see you tomorrow. fugitives"... they were the heady, get-rich-quick days of the dot-com boom. >> promising internet riches was the way to get into somebody's wallet. >> narrator: among the companies that raises millions -- an online-video start-up with a famous pitchman who exudes trust. >> i'm sure you've heard of it. it's called the "internet." >> narrator: but the website is a sham. its only purpose is bilking investors of millions, and when the feds come knocking, one of the men who's allegedly running the scheme heads to sea. but first, street criminals turn to white-collar crime. >> this is the first time that i had seen ppl


info Stream Only

Uploaded by TV Archive on