nick woodman. this was a tough quarter. given the run-up in the stock they had to produce, their guidance was great. gopro, the stock goes higher from here. >> again watching the qs in the after hours under pressure after the spate of earnings disappointments. i'm melissa lee. sigh 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 just trying to make you a little money. my job is not just to entertain you, but to educate and teach. so call me at 1-800-643-cnbc or tweet me @jimcramer. in this stock market butty is growth deep anything more substantive than that and anything that represents, say, value quickly takes on the appearance of being worthless.
[ screaming ] >> and that's basically how the dow can mruj 181 points while the s&p sits at 7.3% and the nasdaq declines .3%. i would say this market is enamored with growth meaning it would pay beyond reason for any company that's scoring much faster than the average name or company in the s&p 500. often, that gets hidden perhaps because of earnings surprises or takeovers. you may not see it that starkly as there could be momentary sparks of year-over-year growth for just about anything. sometimes, though, it's so stark as to be painful. >> the house of pain! >> and today was one of those days and it continued into the after hours. first, let's deal with the two stocks that caused the dow jones to yell timber in today's action. before we get to the confluence of stocks including apple, microsoft, and yahoo and goprothat reported after the bell and not to mention chipotle. the first utex that's how it's
known on the street has been considered the bluest of blue chips whether it's aerospace, defense, heating, air-conditioning or elevators. occasionally one division would spleet or another would have a fleeting downturn disappointment wasn't in the vocabulary. now, frankly ooh the lexicon i've come to expect in u nighted tech, with the owed us being particularly egregious. the big guide down the top on top of a previous shading down of numbers just a month ago is simply embarrassing and exasperating, even. you could always tell things were awry when you get open rebellion on the conference call between the top-notch analyst and greg hayes, the ceo of united tech. i don't know if you can hear it from your seat but certainly there's murmuring out there that something isn't quite right and it doesn't seem like the utx that we've come to know.
what is your confidence level now and where you cut things? how aggressive is the forecast as it stands today and where is the soft spit in the guide still in your view? ouch! that is complete heresy. smith's response echoed that sense of resignation. he was quoted as saying good question, jeff look to say i was disappointment would be a significant understatement and after describing some acuteness, what we have tried to do today is put a stop on the down side and i think the guidance we have given for both otis and the systems group is guidance that we feel confident we can hit and i am tired for delivering bad news and we've probably been more aggressive on the down side because we don't want to overpromise and underdeliver to what i say is wow, and that's how a strock can fall 7% on the quarter and it's down in the decline from the former paragon
of consistency. there might have to be a further discount because this company sticks of value and utx is now a pariah because its earnings may be shrinking year over year but consider ibm. the one-time tech titan that got clobbered today because it's trying to transition from value to growth and emphasizing divisions that have all of the right buzz words like cloud and cognitive intelligence and analytics while de-emphasizing all legacy information technology. the company is making progress. the businesses as ibm calls them are delivering terrific growth but the good part of the company cannot outrun the decline of the legacy businesses and ibm has had 13 straight quarters of revenues and it's committed to spending billions upon billions when i can argue that the money could be much better spent paying up for big-time acquisitions that would expand the big data offerings and i don't know spunk, but those would be the core shareholder
base which includes warren buffett. buffett loves the buybacks and dividends and manages buffett, but that means embracing value and the majority of investors. ibm sells at an astoundingly low ten times earnings and a hulg discount to the s&p and that's the kind of price to earnings multiple we expected with a company with no growth whatsoever. i can't recall when i've seen the stock so cheap of late. yet it's warranted. it's the paradox of value they keep alluding to. after the bell we heard from two companies, apple and microsoft that are caught in the same value versus growth conundrum/vice. apple is an incredibly cheap stock, valued at 13 times earnings, but that's because people are always worried that one quarter, one quarter next quarter, cell phone sales will be slower than expected and they power the stock. so tonight when they actually were slower the stock shed gobs of points immediately and took
down the stocks of the entire group of companies that sell into apple's iphones and faves like skyworks and ivago and how low can come it go given unlike ibm and tech its numbers in entirety aren't that bad. there is a tug-of-war being won by the bears. my view own it. don't trade it because unlike ibm the stock is too cheap to sell but still has growth and i still have to be ready for some downgrades based on the fact that there was a 3 million iphone shortfall, but how bad is that really? we don't know yet. meanwhile, microsoft like ibm, had down revenue, but much of that was currency and it's making a quicker surgency to the cloud. nfrn theless pcs hurt them like the nokia write-off, bigger than expected. i don't know, but again, the stock sells off. snap judge ams are the worst kind of judgment, and i see them being made all over the place tonight.
chipotle, for example, saw its stock plummet 8% immediately after the close on a headline number weakness that really was comerrickal and it rallied back gigantically after explaining thing his gotten better during the quarter. attention morons who sold the stock down 40. please stop trading on the chipotle headline numbers already. yahoo went down on earnings even what matters is cash generation from the sale of alibaba and we still don't have clarity on that. gopro rallied hugely on its reported number only then to fall on what? on apple's disappointing iphone sales and then it soared again when it became obvious that the guidance and the future numbers are going to be fabulous. they've got nothing to do with apple at all. i've got a take away and i say go buy some ann morel around this monster. no matter, here's the bottom line. this market has a curious double standard and if you have super
growth the stock will be rewarded with a super premium valuation like gopro or the disgraced and now not disgraced chipotle and no price is too high for the priceless, but the company represents value then it's plain valueless, ibm, united technologies and those in between like apple and microsoft, let's just say the markets are frantically trying to make up its mind but the pricers still in plucks pending more thoughtful judgments that i still think will lead to downside action. philip in alabama. philip? >> hello, jim and a big alabama boo-yah to you. >> i like that i need some royal crimson boo-yah. what's up? >> caller: thank you and your staff for all you do to help us with the financial education. >> thank you. >> caller: my question deals with insurance. what are your thoughts on -- [ indiscernible ] >> i like the combinations and i think they'll be good for price eventually and i think you're in great shape with etna.
let's talk to frank in idaho. frank! >> caller: hey boo-yah, jim. >> boo-yah. >> caller: from coeur d' alene, idaho. i have a position in lockheed martin for many many many years and this latest thing from sikorsky has really got my blood going. i'm thinking it will really take off. what's your take on that? >> i totally agree with you. by the way when you allow iran to come back that means you have to arm all of the countries that are against iran and who wins in those things? the arms dealers. who is the biggest? lockheed martin. david in illinois. david! >> caller: thank you for taking my call mr. cramer. a big boo-yah. >> back! >> caller: i have a two-part question on novartis. the earnings came out this morning and the earnings were dunn 7%. sales were down 5% but in a quote, unquote, constant currency basis earnings were actually up 7% and sales were up 6%. not too shabby. so of course the stock sells off 2% to 3%.
the question is what has to happen to let us get back to picking stocks without pickworrying about the strong dollar and the earnings growth, sales momentum and the second part of the question is the dollar so strong that it's negatively impacting foreign companies like novartis or is this still a residual from the swiss government depegging their currency? >> i think that you explained it better than i can. i think a lot of it is the swiss impact on the currency and but i'll tell you what's going on with novartis. people are figuring out how fast it's growing against pharma and it's not growing as fast as bristol-myers which people are back in love with and it's growing more like a j&j which people has -- i think j&j may like that growth but it's very hard to understand stock, and in the end it's a good company, but it's not one i'm recommending. let's go to kim in new york.
kim. >> caller: hello, dr. cramer. how are you, sir? >> i'm good. how are you? >> caller: good. jim, what can i do to get cnbc to rebroadcast "mad money" at the 11:00 p.m. time period so i can start my day and end my day with jim cramer? >> well i mean. wow, is that over my pay grade. >> caller: sir i would like to ask you one question. i want to thank you first. my portfolio has now outperformed the s&p for the past four consecutive years due to your wisdom. my question, jim, is in regard to tmst. i purchased it at $34 a share. i watched it drop for seven months down to 23 where i bought another equal amount of shares. i'm now averaging at 28. do i hold it for a long time or do i cut my losses now? >> they you know they split up the company in retrospect the company was split up at the wrong time and the stock is at its 52-week low and i think if it gets a bounce there you do have to exit because this is just not the time to own that kind of security not with what
i see going on in china which does matter and that's a slowdown. value versus growth. the stock market wants the latter right now, and boy, is it willing to really pay for it and will it punish those that just have value. "mad money" tonight, the time for preparing for rate hikes is right now, and i've got your guide to the group that could not be more excited about fed tightening. don't miss my take on the banks and it's one of the most watched media platforms on the planet with one of the more scrutinized stocks in the market and how did people miss the huge ral in netflix. understanding why white is the new black. not all of the james are the ones in your closet and i'll tell you what to shop and what to drop when we go off the shots so stick with cramer! don't miss a second of "mad money," follow @jimcramer on twitter. have a question? tweet cramer. #madtweets. send jim an email to
email@example.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms.
fed chief janet yellin has made no secret of the fact she wants to raise interest rates this year and while that could harm a lot of stocks that are some companies that benefit from the rates. that's why tonight i'll help you immunize your portfolio against a rate hike by giving you a list of stocks that may thrive and it may be interesting now that techs seem rocky tonight. you buy the banks especially the big money centers like bank of america, citigroup, j.p. morgan and wells fargo, but for ages this group has been troubled with persistent legal troubles by the justice department and not to mention a lot of banks that were unpredictable from quarter to quarter. all of the major banks and the big centers with goldman sachs and morgan stanley reported their earnings and they were pretty darn good which leads me to believe if they can do this well now they can do a heck of a lot better once the fed starts tightening. which why i'm going to walk you through the group after these quarters so you can be the one
that you feel most comfortable with. let's talk about the connections and the net interest margin which shows you how much money the banks are making off your deposits which are important for everyone except wells fargo because they don't dabble in through trading and the margins are getting better for a lot of these guys and i've got to tell you, i feel really good about all of the different investment activity and let me walk you through the quarter and first a week ago j.p. morgan reported a terrific earnings beat even though they shrank by ten bases points. j.p. morgan saw a dramatic decline in revenues and the net income increased by 15% thanks to the strength in equity trading up 27% even as fixed income was down 10%. j.p. morgan has a diverse business model and a strong balance sheet, but after the recent run the stock is not cheap relative to the other banks and there is a reason for the premium and j.p. morgan 2.5% yield, nice. next up goldman sachs posted a robust quarter with the company
delivering its highest first-half revenue in five years not to mention record first-half results in investment banking up and 13% and investment management up 14%. in a market where we've seen a lot of mergers, you better believe it is going to goldman which is the world's number one m & a banker and if not for the 1.45 billion hit that they took thanks to mortgage litigation the company would have blown away wall street's earnings estimates and the stock is up 23% over the past 12 months and maybe, i don't know, stay side lined. last wednesday we heard from bank of america which wonder of wonder beat wall street's earnings estimates by 9 cent off a 36-cent basis. extraordinary. bank of america turned things around with the net interest margin rising by 16 basis points year over year and 3.8 billion a year and down to just 59 million with an n this time around and bank of america is getting its act together and the stock is still cheap and $20 a share
seems within reason and how about wells fargo. a stock i owned for my charitable trust which you can follow along. and while it's the highest quality name of the group, still wells has the best potential for rate rise and the company has a 3.6% yield and warren buffettia bank and that's a nice endorsement then there's morgan stanley giving us incredible trading revenues. its stock had run up into the quarter and hence the muted reaction. morgan stanley's been more focused on wealth management business, its trading business is still doing extremely well. i think it's fine although the end of the big justice investigations for the other guys makes it less attractive than it was when they were the only mr. clean. finally, we have citigroup which regained credibility with its earnings and gave analysts a chance to properly model the company's business. you know what by any valuation metric, citi is now the cheapest and perhaps the most compelling name in the group, and i can see
the stock rallying dramatically if it can keep delivering quarters like this one and the fed raises rates several times. it everything goes well citi could earn $5 a share this year which means the stock is trading at less than 12 times earnings. oh boy, you better believe it will get a higher multiple when the fed tightens. you need to immunize the portfolio by picking up a bank stock. if you want an investment bank morgan stanley is the way to go but i think the best way to play higher rates is the money centers where citigroup is the cheapest and bank of america is finally on the mend, j.p. morgan is strong and diversified, but at the end of the day wells fargo is best of breed and will be the go-to stock, i believe, for portfolio managers when the entire market starts sinking on that first rate hike. more "mad money" ahead including my take on netflix and the key takeaways you need to know. time for breakfast at tiffany's. i'm dishing on the biggest names in retail when we go off the charts and an oil message you don't want to miss. stick with cramer.
all right. it's time to address one of the biggest conundrums of the last few investing years. i'm talking about netflix. perhaps the greatest growth stock of our era and once again the leader of the s&p 500 for the year or more specifically how on earth is it that so many people missed the flight of netflix? why did so many really smart investors, guys we revere give up on it or eachven bet against it fighting it the whole way up. >> sell! sell! sell! >> as the stock tped to power higher and higher. in other words, what kept you out of one of the most amazing moves -- >> ♪ hallelujah ♪ >> in recent memory and that's a seminole question when you think about it because netflix, the product was hardly hidden from view. netflix had rallied up more than
120% for 2015 after reporting yet another explosively better than expected quarter last week and honestly that's just the tip of the iceberg because if you bought netflix down in the dog days of 2012 when the short sellers held sway and the stocks seemed radioactive having crashed from 278 at its peak in 2011 down to the 50s a little more than a year later. partially because of management blunders but mainly because the sentiment on wall street went from overwhelmingly positive to overwhelmingly negative [ roaring ] >> in the blink of an eye, you've now got a truly magnificent gain of more than 1300%. the puzzling thing here for me frankly, when i look at netflix is that, you know even though netflix was one of the most obvious stories out there with a beloved product that represents one of the greatest bargains of all time somehow tons of
investors convinced themselves not to own the amazing stock of a product that they loved. a lot of your callers, a lot of the callers would call in. i remember some of them were just like they just didn't like it even though they loved the product. i wish i even remembered some of their names. i know there are hoards of people who are kicking themselves for not owning netflix just since the beginning of 2015 let alone the past three years and what makes it all the more infuriating is that netflix was extremely gettable and it's striking how the bullishness has changed over the years. back in december of 2010 when netflix was red hot and they had 100 or so points of upside, i pointed out that the bulls were saying netflix would have 50 million subscribers by 2015 thanks to the growth of the newly roll out international business. it was a pie in the sky number but i said those numbers could be too conservative and the company might hit 50 million well even before 2015 which as it happens is exactly how it played out except that each i
was too conservative and 55 million subs worldwide and the pie in the sky number turns out to be way too low. the crazy thing is while netflix stock has been tossed around like a football over the years and that bullish story never really changed. we knew netflix invented an entirely new way of watching show bingeing. we had a value proposition. come on it was so cheap. we knew it had an amazing interface and it was getting better all of the time and shows that you'd like and most important we knew netflix was going to take over the world with the international expansion providing a monster boost to the company's growth for many many years to come. if it was loved here why wouldn't it beloved over there. where -- wherever, and there is sure enough that positive story has played out just like you might have thought it would have in 2011 and 2012 and netflix is in canada and latin america and australia and new zealand and the new japanese expansion coming this quarter and every new tv in japan would have a
netflix button and by the end of next year netflix plans to be in 200 countries and the gigantic market that is in china where they're going to open with a movie and then back into a netflix. >> management has never once been anything but transparent the whole time. telling you that everything that happened could happen and even submitting themselves to an exhausting and exhaustive q & a with aggressive analysts with each one of its conference calls including people who didn't like the story. they were clear about the flan and they executed flawlessly even after the initial gaffe when they tried to split off the dvd business and leading to a brief exodus of customers. they changed quickly that course. isn't that what we really want and then they succeeded. you want a management that realizes it made a mistake, owns up changes course and wins. even the strength of the company's original content was somewhat predictable, wasn't it? netflix wants the first original show, the insanely popular
"house of cards" even in china number one show but if you were doing your homework you knew house of cards was coming two years before and anyone who had seen the original british series that it was based on knew it could be huge especially with kevin spacey and david fincher directioning the first episode. if netflix is this predictable and this obvious how come so many people missed it and bailed too early? there are two big reasons and lessons why this happened. the first is valuation. aside from 2012 a year where the whole market had turned on netflix and the stock was absolutely hated, this name has seem ridiculously overvalued with what's known as traditional metrics. at one point in 2013 netflix was turning at 600 times earnings and nobody could get behind that and that seems appallingly expensive and that was right at the beginning of the multi-year move higher and now it trades at 390 times next year's earnings estimates and again, these are too pricey for
the vast majority of money managers and as i've been saying for years, sometimes you can't use traditional valuation analysis to understand a dump and netflix is one of those companies and this is the company that's pumping the vast bulk to fuel ever more explosive growth which means the earnings are the wrong metric. hence, why everyone always focused on new subscriber growth. and, look even though netflix had seemed expensive that argument has cost you time after time after time after time and it was at 500, and 600, and a seven for one split and valuation has been a terrible reason not to own netflix and an even worse reason to short it especially even now, it's nearly $47 million market cap seems way too small to me to contain the scale of the opportunity particularly with china beginning in 2016. there is another wrinkle in the valuation argument which is that aside from the bottom of 2012 there was a point when you couldn't buy netflix without
feeling like it was chase being it. and i hate to chase things and chasing netflix has worked as as a strategy even though the bears were making the same arguments and rising content clause and the competition that never seems to put a dent in the netflix's business and the balance sheet. there were two reasons people missed netflix and the second reason is excessive focus the company's quarter-to-quarter performance even though they urge you to not judge themselves that way. netflix was always going to be a long-term story. they told you that in 2010 but the stock has been a real wild trader that rockets higher on positive earnings results and plummets lower when the company disappoints. if you were only focused on the next quarter you may have well missed the phenomenal three-year runnin' for certain. let me give you the bottom line here. the moral of the story is if you believed in the netflix thesis that they articulated five years ago. if you believe the total addressable market was as huge as they said. if you love the product as much as they told you you would, and the price as much as we know is cheap and figured millions of
others would, too, because you did, you ultimately made out like a bandit as long as you stuck to your guns you had conviction and on the other hand if you had a short-term disappointment freak you out and then you missed one of the best most obvious moves of our era. netflix is a sobering lesson that as important as discipline is to good stock picking, there are some stocks that can't be measured by the usual numbers. they have to be measured by conviction which in very rare cases truly does trump discipline and netflix happens to be one of them. hey, frank in maryland. frank! >> hey, jim, it's frank with a baltimore, first-time caller and love the show. i have a question for you about sienna corp. >> okay. it seems like it's been making a nice run from its lows at the end of last year but like always as soon as it tries to break out it retreats like it sees its own shadow and runs the other way. what's your take on it?
>> i don't like telco equipment. i think it's just too hard. i think that when the stock runs people will have to sell it when the stock's down and in other words, i think sienna is a trading vehicle and that's too hard for me. i don't want a trading vehicle. investing requires conviction. if you believed in netflix, you came out a winner. if you panicked no i never made a dime panicking and there's much more mad money ahead and including the high-end retail and why the charts say right now could be the best times to do some shopping and the domestic oil plays are in a world of hurt as crude takes a beating, but is there any hope for a turnaround? you don't want to miss my take with the mea culpa action and rapid fire in a very electric edition of the lightning round so stick with cramer!
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held best and bounced back from the market's last big sell-off history and that's why tonight we're going off the charts with bob lang a brilliant technician at explosive options.net as well as being the technical start on the three-man team i like to talk about behind the street.com's trifecta stock's newsletter take a lowser look at action in retail which has been holding up very well lately. lang thinks the technicals are very strong with the stock market accumulating major positions to get ahead of the big move higher and he likes that the rth and the key retail atf dropped in the last big sell-off about a month ago and it's rebounded like crazy making a big all-time high like thursday. he still thinks he needed to be selective in order to pick the biggest winners. first, let's start by taking a look at the broader sector with the daily chart of the rth again and this is the key etf that all of the money managers know. the market vector's retail etf and it's the collection of largest retailers out there and
it had been facing a powerful resistance at around $77, okay? a week and a half ago it gapped up over 77 causing the former resistance level to now become a new floor of support. now check out the moving average convergence line also known as the mac d. that's a terrific momentum indicator that chartists like lang used to predict changes in the stock's trajectory. in other words it moves ahead of when the actual stock moves and the mac d for this retail etf made a bullish crossover where the black line crosses over the red one and as we've seen repeatedly on off the charts there's been a pretty reliable tale of higher prices yet to come when the black crosses over the red and that's just underneath the yellow line is exactly what happened and then there's this thing with the indicator that we've been using and that's down at the very bottom.
cmf and it measures the flow of funds over the one-month period and gives you a sense of the buying and selling pressure as we call it and whether the big boys are building positions or liquidateing them. right now lang points out that the indicator has just moved from negative territory into positive territory, and the last time this happened the rth quickly ran up 10% and another indicator of what could happen in the future. within the broader retail sector though lang likes the charts of well-run high-end plays like nordstrom, restoration hardware and tiffany all that serve the hoytity toy and not the hoy-paloy. after tumbling 13% over the course of the spring and it was a brutal period and they missed a quarter here they had a series of higher highs and higher lows since the beginning of june which is exactly what a technician like lang wants to see in the chart and beyond
that this stockething remarkable from a technical perspective. about a month ago, nordstrom's short-term 50-day moving average and that will be viewed as the blue line all right? crossed below, below its lower 200-day moving average and that's what chartists call the death cross because it often heralds a hideous sell-off. remember, this is the crossover, but it seems that nobody told that to nordstrom. not only did the stock fail to sell off. it managed to roar higher rallying from 74 and change at the time of the death cross up to 80 last week before pulling back over the last few sessions to 78 and change. nordstrom indicated the rsi, we followed that at the top and important momentum indicator has been flying higher. you can see the direction of that. the mac d is giving us wildly bullish readings and look at that break through right there and the money flow is about to turn positive for the first time
since spring and all that made lang think that nordstrom headed higher and given the high-end department store chain and the gasoline in the country and next up, check out longtime cramer fife restoration hardware this by the way is pull krit udkri dued. restoration hardware has been moving in a straight line since last may and it broke out above the key $100 level that took my breath away and i said holy cow, what a breakout! making a brand new all-time high and it flashed at renew buy signal last week and the check and money flow indicator, we'll take a look at that bottom number remains in positive territory and he thinks that this best of breed high-end furniture and you can call it more than that and the house wears company can see the stock climb to 115 or 120 over the not too distant future which would give you a 16.5% gain from these levels, and i have to say i agree with them even after the
phenomenal run and you know i adore restoration hardware's merchandise and it's art gallerylike stores and i like the conference call and remarkable same-store sales growth and we've got the chart on our side. this would be some breakout. by the way, not a cheap stock. how about the daily chart of tiffany and company. tiffany gapped up big time after reporting the most recent quarter at the end of may and then boom it's up there and that's very impressive and the stock went from 84 to 92 overnight and that was on the outlook and not the quarter itself and tiffany has been basing at a high-level chart and that's the high-level chart for trading sideways you know as the stock consolidates its gains and very impressive and for weeks now tiffany has been slamming against the ceiling of 94 and langley will be able to break through the glass and roar higher sooner rather than later. that's a gutsy call i've got to tell you because i'm not on the same side as this one, but you
know what? he's hot on this group. in fact the pattern here reminds lang of the action and one that i really do love. ulta salon. before it took off to the upside earlier this month when it finally broke out after the terrific quarter. he thinks tiffany could follow in ulta's footsteps with the next leg of the rally taking it over $100, and if today's brutal action in the average is the sign of another market wide sell-off to come and then it's worth noting that tiffany held it strong during the market's last pack. with terrific relative strength no reason to believe that this time would be any different. wow! i can't believe this was not even that great a quarter. geez, the market loves this stock. here's the bottom line. retail's exactly the kind of sector you want to cozy up to when the global economy is not doing well and the price tumbled down to $50, and that means gasoline will be lower in the future and high end is strong because of job growth. based on the chart as interpreted by bob lang
♪ ♪ it is time -- it's time for the lightning round on cramer's "mad money." [ indiscernible ] >> play until we hear this sound, are you ready skee-daddy? chris in new jersey. chris! >> caller: hi, jim. i love your show. >> thank you. >> caller: i'm looking at acera pharmaceutical. >> i than company. it's in parsippany. they did news recently and half of the people said it was good and half of the people said it was bad and i have to come back to this local company. ken in new jersey. kenny? >> caller: boo-yah, jim. how are you? >> i'm doing great. how about you? >> caller: good. good. my question is chevron and its dividend. >> chevron is okay. the dividend i would sell it on the bounce or better and there are better higher quality oil companies to own that are down
much more. let's go to adriano in florida. >> caller: hi jim. how are you doing? >> good. how about you? >> caller: good. i'm calling about neophotonics. >> i am not going to be able to make a snap judgment on this company. i wish i knew it better. i have more work to do. how about david in georgia. >> caller: boo-yah, jim. thank you for taking my call. >> absolutely. >> caller: i want to get your thoughts on irc worldwide. i think united parcel is a much better situation and that's the one i would go with. how about jude in new york. >> hi, jim, how are you? >> real good. how are you? >> caller: okay. quick question for you. is black rock a good investment? >> yes. i think black rock does a terrific job and they have good interesting products and there were interesting statements back and forth, but when it comes to a well-run company, black rock is a well-run company and that's what i care about. steve in florida, steve. >> caller: thanks for taking my
call. >> of course. >> caller: what about mobile eye, mbli. >> i will see your mobile eye and go one better and i think ann borel which has intellectual properties and i like it but it also has drones and now we'll go to mike in michigan. mike? mike mike mike. >> caller: hey, boo-yah from michigan. i bought alcoa in march. >> when this deal closes is when alcoa will go up. the deal must close first. when it's closed you will get a revaluation and reranking and that's when alcoa will go higher. let's take one more. let's go to john in new york. john! >> caller: hey jim. how are you doing, buddy. >> good. how are you? >> caller: good. i want to get a feel on. >> cancer pain. we looked at this stock and have a high feeling for it. we think it's speculative, but it's a good one. and that ladies and gentlemen, is the conclusion of the lightning round!
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how could i have been so wrong? that's what i find myself saying when i stare at my screen and see breakdown after breakdown of high-quality oil stocks and, yes, master limited partnerships. i wonder how i could have been so wrong because these stocks are now so far below where they were. when oil was trading in the low 40s it was at 50 and change now and the oil companies were
fighting for their lives back then. so let me give you some insight into my confusion so you can learn from my mistake here. that's part of what we do on "mad money." i make a mistake, i own it open handedly and consider the case of whiting petroleum, long thought to be an ideal takeover target because of the excellent box in shale holdings and they wanted to buy the long-shot kodiak oil and gas for $3.8 billion a stock to make it the largest producer in the shale play. at the time that was rocking. if you get a shot of oil you can be sure of one thing. the oil market was about to get stronger and not weaker and it was in retrospect a poaching its high for the era and subsequently the whiting stock plunged with the plunge of oil and the terms of the deal didn't chaining and whiting bought doughed yack for $1.1 billion and it also assumed kodiak debt and it caused whiting to have to issue 35 million shares of stock
at $30 a share on march 24th, in a desperate gamut for liquidity. on that day, west texas intermeet atcrude had $47 a barrel. 47. keep that number in mind and keep today's closer price of just north of $50. whiting's desperate stock sale turned into a hugely successful offering as the stock quickly ran to $37 a month later as oil hit 59 capping off the big of the monthly gain in secures and that seemed to mark a bottom in the stock and there was a heady optimism surrounding all of us that we were somehow becoming into a v-shaped oil recovery after a smart snap back in the stock and the price of crude. >> let's look at the situation seven weeks later to understand where i went wrong. crude's fallen from $59 to $50. three bucks above where it was when whiting did its $35 million shares secondary offering. whiting, however, has fallen from 37 to 25. that's a much bigger percentage
decline than what we've seen in oil or to look at it another way and oil is up three bucks from where the 35 million shares traded at 30. now whiting is down five bucks from the offering and i find that arithmetic just baffling because in the end whiting sells oil and the price is higher and yet the stock is much much lower, a true conundrum and that gets at the guts of where i think i got confused or early or wrong. let's just call it wrong. i didn't think a stock like whiting would collapse from where 35 million shares were offered with a lot of demand each as the price was oil was up from where the secondary occurred. it just didn't make sense to me. so i figured the price of crude had to be too low. it couldn't be the stock because 35 million shares can't lie. well, they sure did. of course it's not just whiting. there's tremendous destruction everywhere among the oil patch, and simmrex and pioneer, you called it and you name it it doesn't matter and oil was well above where it was trading when
oil stocks were plummeting below these levels which brings me to my real conclusion and the relative valuation of the companies have turned out to mean very little if not nothing. i've search vr searched all over the place to find out how i could have been so wrong and the stock prices went much lower and i reached two conclusions and either oil is going dramatically lower and it hasn't happened yet and there's a gigantic liquidation by hedge funds that bor owed money to buy oil stocks and now we're in the hedge fund go wild period where the fundamentals don't matter. you take your pick right now though it doesn't matter. when it comes to oil if you are long you are wrong. since my charitable trust has taken on substantial oil positions on the way down i can only hope that crude stabilizes but as i say in all my books hope should not be part of the investing equation. stay with cramer. decisions with vectorvest mobile. the most powerful app or managing your portfolio from the palm of your hand. only vectorvest mobile analyzes ranks and graphs...
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young people are moving back in town the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. those who have served our nation.
have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. all right. once again, everyone says apple is over and how many times have we heard that? let's take a hard look at it and think for a second about it and unlike the people who sold chipotle at 40 points and watched it come back up and microsoft realized it's treading water or gopro down huge and it turns out gopro is an upside surprise. i always say there's always a bull market somewhere and i promise to find it for you on "mad money." i am jim cramer and i'll try to find it tomorrow.
lemonis: tonight on "the profit"... buckle up, because change is coming. ...a progress report. stephanie: this is so good! lemonis: over the past two years, i've introduced you to 30 small businesses. i'm 100% in charge of everything. i didn't make deals with everyone. you're a thief and a liar and a cheater. but today, i have 17 new partners. -do we have a deal? -jon: i'm in. lemonis: i've already invested over $30 million. nicolas: i've never seen a check that big before. lemonis: but the work doesn't stop when the cameras are gone. and success is never a guarantee. nicolas: i'm having a tough time. lemonis: tonight we head back to new york city to a company that buys used cars. you're taking...margin right out of your pocket.