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tv   Mad Money  CNBC  April 7, 2015 6:00pm-7:01pm EDT

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looks like it wants to trade north of 55 bucks. >> i'm melissa lee. thanks for watching. see you tomorrow at 5:00 for more "fast money." don't go anywhere. "mad money" with jim cramer starts right now. my mission is simple to make you money! i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now! hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm trying to save money. my job is not just to entertain but to teach and coach. call me or tweet me @jim cramer. at last some things are making sense to me. at last ceos in this country are
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realizing just how lucky they might be thanks, to the strong dollar and they're taking action on that. it's one of the chief reasons they have rallied most of the day. a late afternoon decline, the dow is dipping, nasdaq sliding .14%. yes, today, we got a graphic example of what can happen when the u.s. executive decides to think big! and that's exactly what fred smith the ceo of fedex did this morning when he announced this company's $4.8 billion acquisition of tnt express. a company that has huge market share in europe. this fuel i heard say it wasn't that transformative. will you stop? this encaps lates all the good things celebrated or talked about on most tv shows and
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written about in the papers or the web. no one is talking about this. first, fedex is getting tnt for a fraction of what rival united parcel wanted two years ago. they blocked ups' $7 billion takeover attempt because they saw a lot of overlap, firings, there is no overlap here. this is much virgin territory for fedex. when i interviewed smith this morning on ""squawk in the street," he told me he expected this would create more jobs instead of reaching throughout europe. second unlike ups, which would have had absorb he was kwlily loss hefty losses, it's almost as if it was perfectly timed with the beginning of a european renaissance kick-started by an aggressive policy meant to bring back the entire year of euro
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zone economy, which is starting to impact europe in a very positive way, according to data i look a. now that decline in energy cost is also fantastic for fedex. i think this move shows us the 48 companyfreight company needs to strike. i don't believe oil is going back to where it was before this, but smith told me the combination of lower fuel costs being freight for fedex's bottom line and fabulous for europe's economy is a huge driver of this deal. third, smith may not be calling a top in the dollar of this move but it is safe to say if you thought the euro was going to tumble further from here he would have waited to snap up tnt. it's not like u.s. can step in and front run him. i think this is fred smith the economist. he is a great one and fred smith the businessman saying hey, the dollar is not going to stay this strong forever. it's not wosht takeworth taking
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chances which will make eight much more hugeer deal in the. if you think of how bullish this is for europe people and the euro, for a man that makes his living sending pack anls back and forth overseas wants to do a deal now. of course, we seen deals, theball ball corps tie up with the before ram can maker. i was next. recollectionam rexal is a euro company a. currency that the whole world seems to be betting against, he is taking the other side of that trade. i wondish if this deal might take people's etched in stone deals about plummeting you're. >> reporter: it should. typically, i wouldn't throw that much emphasis on what an individual on a you're row is doing. fred smith is no ordinary ceo. as i said in "get rich quickly," he is the most important and
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cerebral ceo. what exactly are the implications if smith gets the right? first, you have as to wonder if we don't have to revise our assumptions about the weakness in europe. sure the euro may not be coming back hard. perhaps more importance is there could be more business being done in europe. remember fedex isn't an important company. the amount of volume in a given area might be generating. smith is getting better as he clearly must right, if he's making a judgment on shipments and more shipths means more orders. in other words, it's not iowa. so even if the dollar remains strong, at least our companies might be able to make up the currency weakness related with higher volumes. that's what this deal also says. that's superb, by the way, for technology companies, which do a ton of business in europe and i think it explains a lot of the strength in tech for most of the day. we have to consider fedex doesn't see a slow down in the
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u.s. how could this company mid make a gigantic acquisition as we are so worried about the stockmarket in the downturn of the u.s. economy, it wouldn't surprise me the quarter is good for fedex. let's circle back to the original context. almost everybody seems to presume there is no upside at all to a strong dollar anywhere. have you heard of anything good to say about other than my friend jim stewart wrote an article in the new york tiles, he cale on cnbc talking about how italian suits have come down for americans, a couple bargains and hotels. other than that excellent piece, can i not think of a single word or prognosticator that came on suggesting any positive object the greenback being as strong as it is. while a stronger dollar makes it harder to compete overseas. it means they can get a better dollar for their buck. we all do things statically as if companies can do nothing but
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a beat down going into the earnings season because of the weak dollar. can you imagine if other companies would take advantage of the dwlar like fedex did. and i would not be surprised if they did. either way, we have a data point if it's showing a european come b.c. good numbers last night. europe is not small. there are 770 million people there. they're twice as big as us. it was a tremendous market at one point. everybody chased it. all the costs about this being a lost decade for europe i think seems sham low in light of the data we have gotten in the last three or four or five weeks. you think that's done idly? no there are main cheap opportunities over there, banks do the favorable exchange rate. i have to wonder if our companies can afford not to take action after this bold move by fedex. all right. fedex is only one company. even if it's run by one of the foremost economists. that was his real profession
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among all ceos. let's face it. even if they're wrong, they're a lot less wrong than ups was when it tried to buy tnt. here's my bottom line. this fedex-tnt transaction is not one ordinary one off dismissable deal. you would be doing that at your own peril. i bet it's the beginning of a trend. as a dozen of other ceos are waiting on the side lines for someone to move and get the all clear. that's what they got today, a benchmark. but by profit pure and simple. and it opens the doors for everyone else to make a move. especially given the biggest rally fedex triggered and it's own stock. why don't we start with morrow if texas. morrow! >> caller: boo-yah, super cramer. >> boo-yah. >> caller: you are the smartest man on the palestinian et. my question is about haliburton riding a 39 should i buy more
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or wait for a full deck? >> it's time to buy slumberge. why slumber him? because you need the technology. you know the r&d of slumberge is bicker than all of the budgets of r&d for everybody combined. sld, also known as slob. that's the 21 to boy. all right, this is just the beginning. the fedex deal i'm telling you, it's the start. brace yourself for a trend that is going to take the market by storm on "mad" tonight. i have a steal caged deck back literally, only one leaves this steel cage. don't miss an epic smack down over the fate of important steel stocks. all aboard? a series of disasters sank the stock but it's too late to book a trip? i'm diving in. plus, planes train, profits, i'm going off the charts with transports you may not like what you see. hmm, maybe it's time for an
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emergency exit! p stick with cramer. let me talk to you about retirement. a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable professional. would you trust me as your financial advisor? i would. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way!
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i have no financial experience at all. that really is you? if they're not a cfp pro you just don't know. find a certified financial planner professional who's thoroughly vetted at cfp -- work with the highest standard. stick with cramer. new york state is reinventing how we do business by leading the way on tax cuts. we cut the rates on personal income taxes. we enacted the lowest corporate tax rate since 1968. we eliminated the income tax on manufacturers altogether. with startup-ny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. all to grow our economy and create jobs. see how new york can give your business the opportunity to grow at i'd like to put in my 15-year notice. you're quitting!?
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technically retiring, sir. with a little help from my state farm agent, i plan to retire in 15 years. wow. you're totally blindsiding me here. whose going to manage your accounts? this is a devastating blow i was not prepared for. take charge of your retirement. talk to a state farm agent today.
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over the past year metals and mining sectors have been the absolutely gross worse. all things steel in particular with the s & p metals in mind that's the x down nearly 37% over the last 12 months.
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here's the thing though it's a washup and the estimates have already been slashed across the board. eventually the socks in question will go so low that they've baked in all the bad news. at that point they may be cheap enough in buying the better stocks in this place. the question is have we reached that point with the loathsome steel stocks? has this group come down enough that it's safe to pick a few winners? are things too dangerous? i bring this up last week we saw an honest to goodness analyst gunfight in the steel sector --. specifically last tuesday, j.p. morgan's metals and minal raised the price targets for many steel producers nucor and steel dynamics, also adding them to j.p. morgan's very exclusive u.s. equity focus list.
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he's got an overweight rating on both stocks. it's a pair of ratings like nucor steel dynamics and the integrated steel mill names like a.k. steel and u.s. steel. still, though j.p. morgan is basically pounding the tiebl on two steel producers here -- table on two steel producers here. however, coincidentally the very next day, kurt woodworth at nemura cut estimates from nucor steel dynamics and downgrading them from buy to neutral. they getting negative on the steel stocks that j.p. morgan says should be bought. geeze, this business is hard. isn't it? in short, we're looking at the kind of analyst showdown that we love here on "mad money." buy, buy, buy, sell sell sell nothing helps you understand the stocks better than hearing the arguments of both the bulls, and the bearles. this is exactly what's happening here. this is something i always encourage, by the way, among the
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analysts at my old hedge fund before we ever pull the trigger. let mem e them duke it out. who is really right? the more bullish analysts at j.p. morgan or the more bearish at numera? the steel stocks have been in the house of pain for the last year. even as they've recently rebounded a teeny weeny over the past couple months so what is numers a argument? while drastically cutting the estimates? before we get into the true bear thesis, i think it's noted until last week nomura had a buy rating on these stocks for ages. that's been dead wrong. still, it's a pretty rigorous piece of research. nomura sees the spread for dmeens companies, the difference between the price of materials and the finished product
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narrowing gross margins, many take scrap metal and turn it into steel. look at these charts. nomura points out the price in scrap metal in cost here appears to be floored in early freb e february whereas the price of rolled steel is falling. that's just incredible at the same time and not in sight. in other words, nucor steel dynamics can pay more for scrap as they pay less and less for the finished product. it's something to cut the gross margaret and invis rate the estimates and the analysts believe the u.s. market is getting flooded from competition from steel producers who can undercut the price, simply because the dollar is so strong and the currencies are so weak or they're dumping. that's bad enough what it's owned. if the cost of scrap metal keeps climbing, too the likelihood could be put through the proverbial steel meat grinder.
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how about the more bullish call from j.p. morgan which is recommending nucor dynamics with price targets of $54 and $25 respectively. nice gains. even though they cut estimates on these two companies for 2015. they raised their estimates for 2016. think of. that what's happening here? it's not that the analysts at j.p. morgan and nomura live in different universes, this is not when the worlds collide. not at all. the bullish j.p. morgan analyst is quick to point out that he's still cautious on the whole metals and the mining sector. he doesn't expect the prices to increase on steel prices any time soon given the flooded market. where do these guys differ? simple t. bulls believe many steel makers have suddenly become the low-cost producers vicious the integrated steel place. the price of iron ore has been falling continuously since 2013.
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now go back to that chart of scrap metal, remember is the main ingredient. we visited that steel company in louisiana. that was nucor. they used scrap. for years, scrap metal-based pricing was basically flat. in the last few months the price plummeted from 400 down to 255 t. move sheer almost straight down. j.p. morgan thinks nucor steel dynamics benefits from much slower scrap prices. with the huge decline overnight, the analysts at j.p. morgan will be able to use the new found cost advantage to take market share from the likes of u.s. steel and na k steel. even barn steel producers who benefits, the places in louisiana had those great pellets they were using. >> that someplace a low cost producer. it doesn't matter, so far the numbers have not been good. but that doesn't mean we don't have an interesting verdict here. where do i come down? first of all, i think nomura is
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late to the party. second, i agree with j.p. morgan that scrap metal prices now do have a nice cost advantage over more traditional integrated steel makers. we know that both nucor and steel dynamics gave good quarter guidance and the estimates of the first quarter have been slashed accordingly. but the consensus estimates for the rest of the year remain much higher. for example, while wall street sees nucor earnings 16 cents in the first quarter the consensus for the second quarter is 53 cents the third quarter is 72 cents. >> that means either business has to improve dramatically or the numbers are way too high. however, while the estimates may need to come down i think the stock prices could soar. that's because steel dynamics and nucor are protected by strong dividends. i like nucor more and probably because it has the 3.2% yield than the other yield and better managed. plus in february when nucor
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dropped to the 42 43 level, it stopped going down and then rebounded pretty rapidly. oh and if the dollar does get weaker which is a definite possibility, then things would become much more positive and you will want to own nucor. here's my bottom line. now this has not been a good environment for any steel producers. if you have to own a steel stock, nucor could be the one to buy as an investment starting here. near term the bears could be right as estimates may need to come down. longer term, new for is a well-run company with the cost advantages paying you to wait for businesses to turn around with a terrific dividend. to me nucor represents the quintessential positive risk reward at work t. risk of the stock going down from big from here which is what i say a sell recommendation seems fanciful to me the regard i think 12 is definitely worth taking a chance on. there is much more "mad money"
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ahead, including my take on the turn around and truths. stocks cruising again, let me test some waters here. the transports have been hitting the brakes but is this a buying opportunity or a sign of more road blocks ahead and the signs are about to take a dive? how the ceo of restoration can help you better invest in biotech? yeah furniture and biotech. i would stick with cramer.
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yeah, furniture and biotech.
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look at me. i am the captain now. how the heck is carnival cruise ccl, a company associated with a string of zaers sunk ship engine room fires, sick passengers, with the stock getting another 52-week high after catching today from wells fargo. they can be benefits from the miraculous turn arounds i have seen which is why we had to investigate and figure out once this company managed to pull it off. first, though let's remember what carnival is bouncing back from. in 2011 you had massive disruption to the cruise business off the coasts of the middle east. then there was the tragic
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japanese tsunami that same year. a relevant negative for all things. they had to deal with rising fuel costs as the price of oil surged. then the first of any carnival specific calamitys occurred. the concordia disaster in january, 2012, a horrible tragedy where one of the company cruise ships capsized causing 32 fatalities. after that the problems came on an afternoon basis. andrew caught fire leaving it adrift in the gulf of mexico for four days. documents uncovering multiple generator maintenance problems. talk about a public relations nightmare. last year they had to deal with a glut of cruiseship inventory in the caribbean. to top it off the float, back in october at the height of the ebola virus scare, carnivale realized a nurse handled a blood
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sample from thomas duncan the first person to die from ebola in the united states. it was another pr fiasco with both belize and mexico refusing carnivale's ship to dock. at the time it felt like no one ever would want to get on a cruiseship again. some of this has had an impact on the industry. many of the disasters were company specific. plus the entire industry they have the most exposure to first time xaengs passengers and these are the people most likely to be scared away by debacles like a sunken ship or engine room fires or fears of a shipward ebola outbreak. at its lowest eb in october, corn veil traded to 33 and change where the stock may have been reflecting a boarding action by the pirates of the care bone and also probably had the ss minnow as one of its fleet. but since then, the stock is coming back.
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rallying 44% in less tan six months. that's extraordinary, no more uss minnow. a week and a half ago, carnivale reported an amazing quarter. i remember i was on tv when it came out, holy slimmering timbers. it sent the stock flying. it's practically become a new one since. how did they turn things around? there is no question some of the strength has to do with a rising tide with every single boat. obviously, carnivale the largest cruise line are huge beneficiaries who decline in oil prices, as few as a major cost if you are running a cruise line. that's why i went very positive on the group at the end of the september. it can't all be industry specific. because since that recommendation, carnivale stock has managed to slightly outperform royal caribbean, it's next closest competitor didn't have the track record remember, it was carnivale with the october ebola scare. clearly, carnivale is doing something right now, something beyond riding the 38% decline in
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fuel costs versus last year. >> that did give the earnings share 17% boost in the latest quarter. pretty significant considering they only own 30% per share. finally there is no glut and they control 50% of that market. they severely damaged the pricing power. at the same time the european cruise market looking much better. carnivale called out china as a major positive. noting this year roughly 1 million passengers are expected to cruise in the chinese market. all these international positives may sound like tail winds. remember carnivale is the largest and because of that, world wide it has more than double capacity of the closest peth competitor. 42% of the revenues come from oversea, world caribbean has merely 12% for the up and coming norwegian cruise lines. in an environment where the
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cruise market is getting stronger carnivale is the company to own. that's a big reason why the company raised the four year net yield from 41st to the 2 to 3 range. the net yield tells you how much carnivale is squeezing out of its passengers on an average day on this ship and any increase here can lead to a major uptick in earnings. in the latest quarter, carnivale delivered a net yield. that was a gigantic positive given the only flack to 1% growth. bookings for the remainder of 2015 are running well ahead of last year substantially higher pricing, too. carnivale saw 8% on board revenue growth. a nice increase which find more ways to get customers to spend more on ship casinos, many bars communications. they charge him for a wifi. on top of everything else, though carnivale has been trying to repair the public perception of its brands.
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the company has been giving larger commissions to businesses away. that's a smart move given 70% of cruises are still booked through travel agencies, basically. it's the only area where travel agents are a swing factor. carnivale has made a concerted effort to improve safety measures on the ships. that's something the ceo pointed out. in short, businesses improved dramatically across the board. carnivale has taken a number of steps to insure it benefits from this rise in tide rather than screw things up as it's done so many times in the past. it's got it going now, corn veil trades at 15 times next year's numbers, which makes the names substantially keeper than the average stock. it has a much better than average long-term growth. >> that seems absurd to me now they've gotten their act together. carnivale gets hurt by the strong dollar. if i'm right the greenback strength could be peaking, that should give the stocks the one more leg higher. some are now spect lateing the company can raise its dividend in the not too distant future
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which would make investors happy. it's had a great yield. here's the bottom line. there is a rising tide in the cruise line space. nevertheless carnivale has still executed a magnificent turn around and although the stock made a new high today, i think it does have more room to run. >> that said obviously, i'd like even more on a pull back caused by the next market wide sell-off by the way is now overdue given we had three back-to-back days where the market was actually okay in this very twenltd 15. why don't we start with frank in california. >> hi, jim, this is frank from california. >> hi, frank. >> caller: my stock is disney. i bought it about two weeks ago. i bought 30 shares and i plan on holding it for five years. >> i think that's got horse sense. you will be owning it right through what will be some remarkable new star wars. you got that you will have
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disney china, during that period. i think that's a great idea. i like your choice of stock. okay, guys all aboard! there's a rising tide in the cruise lines. carnivale is riding it higher than all of its competitors. we got so much "mad money" ahead including my tank on the recent slow downs in transports. can plains and trains start flying again? we will go off the charts to find out. for those of who have a negative bend i have something for you. it's a game changing liter who set a nud standard for furniture. like could he also help you pick a winning biotech? what a head scratcher! i'll explain. plus rapid fire in the lightning round just ahead. stick with cramer! .
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regular viewers know that the transports are one of the most important groups out there. one that you always need to watch, because when the transports are strong it means commerce is picking up and when they're weak typically it means commerce is slowing down. this sector gives you a powerful read on the entire economy. while the averages had a couple decent days in a roy, it makes
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me feel concerned when i think about the fact that the transports have been performing pretty terribly relative to the rest of the marketplace. this super significant group, frankly, it's just plain ugly. that's why tonight we got to go off the charts and physical out where the heck the transports are headed. we will use bob lang the brilliant technician as well as being the technical guru of the three-man team behind the's terrifically performing tech stocks. lange believes after the recent weakness in the airlines the railroads, the trucking stocks and the delivery services there with could be more downside to come. in his view many of the components of the index have just just broken. they've broken down. it's no surprise last thursday when the crucial dow transportation index fell below it's 200-day moving average, for the first time from the monster rally in mid-october.
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lange points out they rallied sharply off to the low. right now, at these levels they're off the recent highs. according to lange, the turnover has been heavily skewed towards selling lately. as far as laerng's concerned, the transports they're falling. he thinks it's dangerous to catch this plummeting group. you'd be much better off to wait for a bottom than prove itself. right now the big boys are unloading stock in this group left and right and to make matters worse, lange thinks the charts are telling him they're prime to lead the market lower. there is a very bearish call. so for starter, take a look at the day lay chart of the dow jones transportation index. like i mentioned before lange thinks it's ominous the transports drop below the 200-day moving average. just last week. which for many chart waters is
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probably the most negative development that could occur. plus, the trannys, as they're called in the broker's industry also broke down below their long-term floor of support. so at least on the chart, there is nothing stopping this index from going lower. to make matter worse, you can see how the volume has been rising lately as the transports have been hammered which tells the big institutions are selling hand over fist. then we got to deal with the moving average or the mack-d the momentum indicator. i tell you every week they use it ahead of time. usually, i'm telling you about a bullish crossover in the mack-d. in the dow transports, we recently got a bearish crossover where the black line crosses below the revrona. mr.-t style the only thing we have to look forward to in this group is pain. there is one more thing lange wants to you look for the money
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flow. that's created by a famous analyst and market interpreter. it measures the flow of funds into and out of a stock in one month period. it arrives at an accumulation distribution number. now in negative territory, it's clear the cash is pouring out of the dow transports a very bearish sign. what is the weekly chart of the dow transports look like? take a gander. this chart is not necessarily outright bearish. it definitely gives you costsle for trouble. until lately, they have been making a multimonster move higher him lange notes the dow transports are currently testing their long-term support. okay. at the 50-week moving average, which is not great. better than we saw on the daily chart. it shows a bearish crossover back in january, still very much in negative territory. on top of that lange points out the money flow indicator, weekly
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chart, it just went negative. right here. troublesome. by the way, that's the first time in three years that it's done that. again, not a good sign and if the transports can't hold above the floor support of the 50-week moving average, this whole group could have another big leg down. all that said if you really want to understand the incredible transportation mix, you got to break it down. tonight we will look at big representative names and start with the daily chart of ups. for lange, this is just plain hideous. ups plummeted in january and since then the stock has continued to churn lower. phss! wow. lange things they have a floor of support at 94. he also believes the upside is likely to be capped by consumer resistance at 99 t. money flow index for ups hugely negative and perhaps worst of all, last week ups experienced what is
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known in the industry as the death cross, where a shorter term 50-day moving average, okay crosses below the 200-day moving average. wow, many charters view that as the kiss of death for stock. meanwhile, i am totally enamored of fedex acquisition of tnt this morning which is a deal that they bought. it's a constant reminder how management can't hold a candle of that to fedex. nasty. okay. so in the ups freight business seems not so hot. how about the airlines, a group leading higher for ages. check out the daily chart of united airlines. wow, it's been dinged lately because of the price of crude 43-53. just like the transports index, ual just fell below its crucial floor of support on high volume with negative territory in the mack-d. okay. wow. this is just like awful. at $60 ual is well below it's
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50-day moving average and the 200 day could be at the next level. that's at 55. finally, houb a railroad? take a look at the daily chart of the well run csx. this is the only chart we have seen in the transports that lange says is not horrible! it's not great, though either maybe not good. it's also not terrified. csx managed to find a support of the 200 day average, the.flow index is positive. yay! indicating big institutions are cumulative in this. it can make a bullish crossover. >> that would be positive. >> that said csx trades at $33.55. it has a ceiling resistance at 35. lange believes that will be the only hurdle. according to lange, csx is the best of the bunch. this is the one he picked. although, that's not saying mump, given the watch in the weakness of the entire group. you know transports are extremely important to a lot of the thinking behind "mad money"
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and the charts interpreted at least by bob lange suggests this key group could head lower. which confirms my belief the economy is slowing here. i don't want to be bearish because i think many of the stocks are reflecting a strong dollar. i'm beginning to question that assumption, given the nation's strength in europe i talk about at the top of the show and fred smith's bold purchase of tnt. by fedex. "mad money" is back after this.
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it is time it's time for the lightning round. are you ready, ski daddy? we start with don. don! >> caller: jimmy how are you? >> real good. >> caller: my patience is wearing thin. i had mankind in my portfolio. >> that's why you should sell it. i like red sox. travis in north carolina. travis. >> caller: hey, jim, thank you.
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i'm worried about the rest of the year and sales force. >> i like sales force. what's not to like? sully in maryland sully! >> caller: greeting cramer from the swampbs of cra-maryland how are you? >> i'm okay man, how are the swamps been doing? >> caller: they're treating me well. >> good enough. >> caller: my question is ali baba. >> no, no no here's ali bab barks here's yahoo. and there is a residual that's much done glad is in indiana. glad is. >> caller: boo-yah, jim, thanks for all the information you have given us over the years. i had husseins brands for about three years. recently they had a four for one split. i wondered what's up.
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>> remember what matters is the momentum to earnings. it is terrific hbi. one more tom in new york. tom. >> i'd like to act knowledge your staff. so professional. >> we went out last night celebrating it and it was fantastic. >> my question is a two parter. quickly. i'm a shareholder of john sonson control do i make a swap? >> no we like that transaction. ladies and gentlemen it was on the lightning round. >> sponsored by td ameritrade. 5 tech stocks with more than a 10 percent change in aftermarket trading. all the tech stocks with a .
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. all right. it's pretty rare really rare actually, to hear a ceo basically telling people stay away. do not buy my stock! you almost never catch a ceo saying something like if you are not in it for the long term if you don't know or don't care about what we're trying to do here, then please leave my stock alone. if that's pretty much the distillation of the restoration hardware ceo gary freedman soliliquey. he is inventing the category of
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classy museums for furniture and fixtures. allowing you to see the merchandise in a context that gives you ideas and forces you to think big as i did when i remodelled a couple rooms. gary is about creativity. more importantly, he's about playing a long game. he wants shareholders to play along with him or else. when the quarters reported you saw the traders hit the road. the stock got hammered. not understanding what gary has been accomplished. even as the investors flock to the stock and took it back up. they shared his vision for the future of bricks and mortar retelling and masked by the video he set the music to. i'm thinking of gary's strategy. you know what it is sorely needed for a hft of other stocks, too, especially the biotechs that are trying to do things new and different with the long range view like gary. i keep waiting for just one of these ceos in biotech to step up
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and say what gary said which is basically, look if you don't understand what we're doing. if you can't take the time out or figure out we aren't going to build blockbusters in a day, then get the heck out of my stock you flippers and traders. i say this because the last ten days i have been in on twitter at jim cramer with questions of what to do with these stocks now they're down t. truncated plea goes like this. at your recommendation 20 points higher now what do i do? to me what this says is that the person bought the momentum when it was running, which i typically don't can sell and didn't in this particular case where i was warning people to take the profits. few have no idea what ceo is doing for them and continues to do including the asthma and cholesterol budding franchises that could be huge down the road. you know what?
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then you should get the heck out of this stock. it has gotten' bad when isis pharma got to the mid-70s, the all time high i told people i would no longer defend its stock and that no one should complain because everyone even the late comers now had a profit. so no one could say, i bought it 20 points ago, because of you. because it was at its high. but you know what i couldn't be gary freedman. i couldn't say, get the heck out of my stock. well isis isn't my stock. but i was sick and tired of people in 140 characters or less why i liked it. sick and tired of telling him why i liked it and what drug you had in the pine line 47bd and u is u. no you either physical out what you got or you don't. i'm done holding hands. isis. and that's why with the biotechs running most of the day, this is a good moment for anyone who owns biotech stocks to reassess
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them. ask yourself do you know why other than the searing momentum other than the good looking chart, do you know why you own shares in this company? what are the catalysts? what's the pipeline look like? what's at stage two? what's at phase 3? do you understand the ceos vision and what has to go right and how many different products it has or if it's a one trick pony does it have enough cash? does it into ed to raise money? that's what you need to know. and if you don't know have him give free you, it's like exodus, i'm giving you the chance to sell. this is your chance to recognize i can't always be there holding your hand. i like certain biotech stocks. i have endlessly identified them. i'm not going to do it again here. few don't know them already, don't get rich carefully. i'm not pounding the table right here. i don't want you necessarily to buy them. they've all run enormously and a better claens to buy them could soon be at hand and i'm sick and
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tired of people saying i bought it at the highway, i do. in the end i want you to think like gary freedman of rest rakes hardware. i want you to buy in and buy in for the long term and if you don't, well what the heck are you waiting for hit the darn road. stick with cramer. .
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like i said there is always a bull market somewhere. i'm jim cramer, see you tomorrow!
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>> in this episode of "secret lives of the super rich"... the most expensive home in all of america will make your head spin. how many people can fit in this room? >> i would say, over 1,000 people. >> they're drillproof... bulletproof... and sometimes rigged with explosives. >> we did a whole vault just for shoes. >> the ultimate luxury safe. you have to be super rich to buy a mega-yacht. meet the man who bought 18. how much do you spend, in total, for those 18 boats? >> i never try to add that up. i'd be scared. >> all-gold everything, from shoelaces to chopsticks. the man with the midas touch. "secret lives of the super rich" starts now


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