>> god bless. 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. i'm just trying to make you some money. my job is not just to entertain, but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. nobody -- i repeat nobody ever made a dime panicking. friday was pure panic. today where we saw the dow gain 240 points, the s&p gain 1.47%. so the value of waiting for a better time to sell. that said, i want to spend a lot
getting you more prepared if the fed decides to take action this month. you can protect yourself with a little more cash than you currently have, but not anything wholesale, not anything dramatic. i am not in favor of that. if anything, i suggest you stay the court if you're a home gamer. i want to explain to you why i feel we're facing a decline of moderate proportions, one worth riding through if you can stomach it. only the super nimble need to take action on what i'm about to tell you. let me explain to you how i envision the risk reward -- versus some of the other declines we've seen in the last eight years. we have had several major sell-offs during that period, and each one has had its own coloration. but only one was worth selling a majority if not all of your holdings into. the actual decline that cut the averages pretty much in half. yes, the great recession decline. that's the tremendous one that occurred when so many of our institutions, mainly household financials but also many industrials that we had thought withstood the test of time went belly up or claim close to collapsing.
we even wondered if our atms were going to be able to spit cash out. it was that bad. that's called systemic risk and that means it's time to do some major league selling. forget that. we're not faced with systemic risk. then there were the second kinds of sell-offs. this time typified by the 2011 decline of 21% from peak to trough. we had the possibility of a major collapse but not from here, from overseas. these markets are big and their power to pull down the world is so great that it was hard to assess the possible decline. we stopped at 21% because it created ways that the european central bank launched to save the day. finally there are these individual crises we have had to deal with, the possible collapse from china last summer, the giant bear market threatened to swamp the western world with eastern pay. we dropped precipitously aided by the fact that our fed was going to raise rates but then they took a pass so we bounced
concerns about the solvency of our largest oil companies and the $400 billion in debt they had on their books. finally we had the brexit vote where we had so many funds that were out of position because they didn't expect the result of the vote. so we saw huge selling. now if you look at each of these sell-offs that we get, you could possibly get from a surprise rate hike, i would take off the table any systemic risk. we're taking that off. that removes exhibit a for certain. risk again in our lifetime. even as you often here we're about to have it every time we have like a down 400 day as we did on friday. how about european debacle, 2011. this is again is a classic case of something that could be systemic, but not systemic to us. still, would we have gone down more than 21% if italy had defaulted? unequivocally we would have. that could have easily led to a domino situation where spain, portugal, ireland and greece could have collapsed, but it
to a collapse as opposed to cypress or greece, they're for real. those are for real. the big systemic continental risks, and they're tremendous cause for concern. we just definitely aren't staring one of these in the face. taking that off the table. okay. now how about that china-like decline? all right. first let's talk china. i put a collapse in china would be worthy of a potential 20% sell-off in the u.s. i'm talking about something that would lead to a revolution that but we never even entered that realm last summer. we were dealing with a stock market collapse, not an economic collapse. still that is far worse than what we are facing with one hike on the horizon. nope. china, no. the i'll dive in february i think was a very significant concern. not just because the oil companies but the banks were into them so badly. again, though, this has been cured by heavy equity issuance. even if oil were to go back to
there would be a bit of a cushion. how about this brexit? could that be like what we could have with a rate hike? what can i say? we simply haven't seen any of the negatives in britain yet. i believe there will be a lot of financial firms that will have to leave london to put their offices on the continent. i believe there will be many construction projects that will have to be canceled. i do believe that a bank rescue may have to occur and they do not have many big banks there. systemic collapse anywhere. so where does this leave a now unexpected rate hike given the fact that we just had a big rally, which seems to be based on the possibility that one's not forthcoming. i think it leaves us to be somewhere less than the 2,000-point decline we saw avenue the december rate hike because we don't have the oil problem. although that started from a level that was 500 points lower than this one.
and i'm saying that maybe on a rate hike that's a surprise, we could fall 7% from thursday's high, okay? that's kind of where i come out. so what does that mean, say, for an individual stock? let's deal with the stock, not an average. why don't we take the case of apple, which stock benefited today from the obvious woes at samsung. i don't think those woes are going away easily. apple stock fell hard beginning thursday morning when the going to release any numbers for the weekend. the market immediately deemed that as extremely negative. i didn't read it that way, not that anyone paid attention to me. but i focused on the fact the company reiterated its guidance. that's a bullish fact. it's a fact that didn't need to be revealed. let's say you are concerned about apple sales and you didn't sell into the panic on friday. let me ask you, if the stock were to go down as much as i am forecasting for the market, if the fed surprises us, you could see this stock, which trades as high as 108 last thursday and went out at 105 today, you could see it go down $5. whoa, it could go down $5.
you want to own the stock, not trade it, betting that the weekend read would have been meaningless now that we know now there are little rally hundreds of thousands of channels. to me, this is a pretty decisive choice. i think you understand pat. i simply don't believe it is worth it to try to dart in and out of a stock like apple, even if you think the rate hike. it's a perfect example given the various declines we've seen. i don't think you need to take any action. i know that sounds boring, but that's my feeling. you know what, you can raise some cash into other positions but i don't want you to dump anything whole say. the panic on friday, those people feel terrible. you know what i am in favor of? i think to sell everything would be wrong, but to take some profits, that's cool with me. but remember you may have to get
let me give you the bottom line. is it worth it, say, to sell the most widely held stock in the world because of a rate hike knowing that wow have to get back in a few bucks lower? do i really need to answer that for you? john in texas, john. >> booyah, jim. kudos to you and your team on ground zero rising. >> thank you so much. you know, look, it's the story that tells itself, and i was just thrilled to be working with a fantastic documentary team that, believe me, made me look really good. how can i help? >> yeah, it was awesome. a two-part question. what are your thoughts on the music streaming industry and, in particular, pandora media? >> you know what, i think that industry is way too competitive. i don't want to be in it. i think pandora is -- look, if apple were to buy pandora, that would certainly make sense to me, but they're not going to do. they want to do it themselves. i don't know who would necessarily have to buy them. i think there's like three up, three down.
pete? >> booyah, cramer. >> booyah, pete. >> hey, at the end of august, you had the ceo of taser on the show, and you commented that taser had a good competitive position and growth runway. the next day the stock declined 8%. >> i know. >> on no news at all. and since then, 15% in total. so do you still feel bullish about taser? >> yes, absolutely, pete. i think that a series of articles have said they're system is too expensive for cities. i think that's what's really got the stock going down. i personally think it's a great opportunity to be buying t stock of taser, not selling it. i like this sell-off as a way to get in. let's go to larry in illinois, please. larry. >> good evening, jim. i enjoy watching your show. >> thank you. >> every day. i have a question for you about a foreign bank. i am interested in looking and buying credit suisse. would you please give me your opinion? >> i don't see a lot of momentum there. i don't see a lot of earnings
managed to bounce off the bottom. you know, this, deutsch bank, they're all kind of the same. i would prefer for you to be in a united states bank. if you think the rates are going to go higher, i would be in bank of america. and if you like the worldwide situation and wanted to be in a credit suisse, may i suggest you buy citi. that's right, letter c, citigroup, which i think is well below book value. my travel trust owns it. i very very confident that stock is going to go higher. nobody -- i repeat nobody ever got hurt taking a profit. but this isn't the time to cut and run. that's not what history tells us. what's a quarter point to the economy with the fed in focus? despite the market's move higher today, i'm prepping you for the unknowns that come into a sell-off. telling you what plays could be worth circling back if it really comes true. and a company that -- do not
telling you what it is. stick with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer. #madtweets. send jim an e-mail to email@example.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. why are you checking your credit score? i wanna see if it changed. credit scores don't change that much, do they? really? i'll take it. sir, your credit... -is great right? when was the last time you checked? yeah, i'd better check my credit score. here, try credit karma. it's free. all right. no more surprises.
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hey, it's just a quarter point. it's already baked in. a terrific one with 32 years in business said that to me in an elevator in asbury park this very weekend after i told her i was concerned about the down side from a possible rate hike. sure i said it should definitely be baked in. but these things never seem to be discounted well enough. i believe that even more strongly after today's rally. she said bye-bye and disappeared down the block on a gorgeous night in a city fighting to make a big come back. her decision looks right for the day. she's right that a quarter point rate hike really shouldn't be a big deal at all. i wanted to tell her that. that doesn't mean you can't be concerned, especially after a big up day that needless to say
let's use the selling respite to talk about the two worrisome issues here. the first is whether the fed tightening matters at all to the economy. i personally don't think it's a good idea to raise rates into a expect that seems more tapped out than it was a few months ago. i also know that the fed may feel like it has to get on with it because we're in emergency low rates without an emergency either here or overseas. just because i don't want a rate hike doesn't mean we aren't going to get one, which is why i've been willing to say that i'm okay missing a few percentage points the upside, especially when there might be so many bargains ahead after the fed takes action. but it's the second reason that made me disagree with our very pleasant elevator companion. the issue of a rate hike being baked in and that's really what i want to focus on. all my professional life, i felt things that were so obvious, so right in front of our faces, things that everyone had to know
that, particularly after today's strong rebound, which couldn't have happened if people were as worried about a rate hike as i think they should be. first there are the rational people who say, yeah, the fed tells us they're data dependent. they're going to be on hold to stay. they're not going to do anything. they look at that last employment number and say they can't raise rates now. other people say what's a quarter point to the real economy? market. for stocks, it doesn't matter what will happen to the economy, it matters what people think will happen to the real economy. this second camp may think they're ready to buy, and will say so right up until the moment that the selling gets thick. but believe me, they just aren't that brave. when stocks are going down and going down hard, these people don't stop and say, were these sellers really caught unawares? no. they say, wow, there must be something really wrong i don't know about. maybe i'm being too glib. the result? what you thought was a really
rate hike, turns into something that's a nightmare for the bulls. i always say you can really very rarely go wrong betting that someone is going to do something stupid or ignorant on wall street. it's a much better bet to presume foolishness than to presume rationality and clear headedness. i wish it weren't like that, but it is. which is why i could not agree with the woman in the elevator despite her many years in the business. here's the bottom line. fools come to their senses or get blown out of the market until it's really safe to go back into the water, once everyone knows about the rate hike. because if you know that will be the case only after it's already happened. jim in new jersey, jim. >> hi, how are you? >> i'm good, jim. how about you? >> i'm doing great, thank you. my mother -- i'm calling on her behalf. she has -- she's invested only in bonds, and the market value of her bonds right now is
she purchased them for. and an investor basically told her that she ought to sell her bonds right now, take the gains, that the bonds have had a good run and that, you know, once the fed raises rates, that that run is probably going to end. i was just wondering if you had an opinion on it one way or the other. >> jim, i got to tell you, i actually agree with that. i don't think i want to own a lot of bonds that are well above par, well above 100 that can go back down. and they can get hn i think ringing the register on some of that is not bad. now, look, if you have bonds that yield a huge amount, okay, i get it. you want that income. but i think that her friend may be right. let's not fool around. take something off the table. i think we've seen the low rates for this cycle. the world of investing can help you make money, but it won't always make sense. while you might think a rate hike is a foregone conclusion, others may have blinders on right up to that event, particularly after today's
don't let today's higher move fool you. a sell-off could still be waiting in the wings. tonight i'm preparing you for a yellen-induced pull back and give you my list of stocks. then there's a new chip on the block entering the exciting new business of the internet of things. i'm diving deeper into impinge to see if the remarkable run can continue. can charles river labs give your portfolio a healthy boost in an uncertain stock market? i suggest you stick with cramer. i absolutely love my new york apartment, but the rent is outrageous. good thing geico offers affordable renters insurance. with great coverage it protects my personal belongings should they get damaged, stolen or destroyed. [doorbell] uh, excuse me. delivery. hey. lo mein, szechwan chicken, chopsticks, soy sauce and you got some fortune cookies. have a good one.
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moment, rather than a panic of friday, to tell you about what happens in a sell-off and if it when it does occur later this year. i don't like getting negative in the midst of a rout like friday. that sends you the wrong message. i prefer to wait for bullish days like today. if you want to take some profits, you can do so in a calm and deliberate way. the thing about sell-offs is the best stocks tend to go down the hardest. but this -- and this is a they're also the first to come roaring back. why do the highest flyers go down the hardest in a major sell-off? because of doctrine. the doctrine that says never let your gains turn into losses. the stocks i'm going to highlight are all up magnificently for 2016. for professional money matchers, there's nothing worse than giving up these gains. plus in september, so if you're a hedge fund manager who's lucky enough to own some big winners, why not just take some profits and coast for the rest of the
if you own the stocks i am talking about, these sellers, not the fundamentals of the companies, they're your real enemy. but why do these winners also bounce back the hardest? because of what caused them to run in the first place. they didn't need the fed's help to arrive at their lofty destinations. they've defied the naysayers all year and they're armed with stories, which means they aren't going to be harmed by a quarter point or even a half-point rate hike. otherwise, they never would have gotten this high to begin with. get hammered and then rebound following a rate hike, and how did i find them? well, first, i took the list of the best performing stocks in the s&p 500. i did the same thing for the nasdaq. then i added in a scan of the best ipos for 2016. next i took out stocks that were on the list because of takeovers. those are one and done. then i cut the pure commodities stocks since they usually got on the list because they were down so much coming into the year that their percentage gain simply reflects the fact they were able to rebound from what many viewed as a terminal
i also eliminated any gold stocks because they often depend on the desire of central banks worldwide to keep rates low. so what does that leave us with? primarily a handful of stocks, many of whom are in the semiconductor business, largely connected with the internet of things, with apple being a small part or no real part of their existence. that's an important criteria given suspicions that the iphone 7 won't be a strong performer. suspicions i want to make clear. think the 7 is going to surprise us with its popularity, especially in light of the not so easily solved battery woes of principal competitor samsung. other stocks on my rebound list represents value versus where they were trading because they turned out to be doing better than people thought. finally there were companies that simply have a better mouse trap. i'm going to start from the bottom up. here's my top 10 fall and rise stocks for the next big sell-off.
here's a company that makes two kinds of basic commodity chips. a ton of other device applications. micron, like western digital, which owns sandisk has had great success of late in the flash business as new product cycles have kicked in. we know with hp inc. reported. it talked on its conference call about a shortage in both d rams and flash. micron is a winner in that sej ario. qualcomm is next. this wireless technology stock pulled back because it lost some apple business to intel and because it's been fighting with some chinese communication companies. but these disputes have been resolved, and the negative apple news, i'm calling it water under the bridge. then we have two medical device companies that have produced the better mouse traps. there's edwards life sciences with its revolutionary device that lets surgeons perform a heart valve replacement without cracking open the patient's chest cavity. i think we'll look back and
then intuitive surgical, with its da vinci surgical robot and his razor blade business model which continues to defy the critics and put up better than expected numbers, pretty much endlessly. six, lots of people thought that sem an tech -- yes, ymc, had been left behind by other better cybersecurity plays. but then in january, they shelled out $4.6 billion to buy a company called blue coat, a private equity led security firm that blocks out threatening and inappropriate websites. it was a twofer because sem an tech, which had been poorly led got blue coat's ceo to take the helm. i'm expecting it will come just right back. here's an odd one. microchip technology. don't talk about much on "mad money." it's another basic building block semiconductor name that's come into its own.
the internet of things and perhaps more importantly a potential takeover in the sector. we know the consolidation is ripe here. next we're not fans of retail, but we do like the suppliers that have come back into back to school season with lean inventories. the one that comes to mind is pvh, the maker of calvin klein and tommy hilfiger products. it could be a big winner in what's regarded as being a pretty non-promotional mall envirot. same things goes for urban outfitters, the retailer that scored big with fashion even though it's in the mall. the flagship store had been in the dump for years. second and now we're getting to the tag ends here, one of the best performing groups this year is the semiconductor equipment industry, not the chip business, but the companies that make the chip equipment. and this is what happens whenever the chip makers have
and their end markets get stronger. now, i happen to be partial to lam research. but platt materials is the star of the show. amat has the most upside surprises in a row. that should continue as this company was supposed to be left for dead when its deal dissolved over antitrust concern. finally, gaming chips. that's nvidia, wiz you know i it takes a big market wide sell-off to rein in a horse like nvidia. this one has perhaps the most momentum. twilio and acacia. it's clear that its software platform which powers communications for netflix, facebook, airbnb and uber, has the best client list on earth. these companies can't live
from every transaction. acacia is the best of communications equipment. its stock is expensive as all get out and it has some amazing momentum which is what you're looking for after a fed induced trashing as those are the ones that are going to bounce back the hardest. first they got to come down. here's the bottom line. i've waited for a supremely up day like today to tell you what i think could happen when -- not if, but when we get the next sell-off, especially if the fed gives us a rate increase soon. when it occurs, expect the biggest winners to get hit hard as the hot money managers take the money off the table, giving you a chance to buy these stocks at much more palatable prices. i doubt you'll be able to get out and get back in in time to participate in the next move higher once the smoke clears. ann marie in new york. ann marie. >> hey, jim. i'm calling about ventas. i listened to you on friday about raising additional cash,
i've done really well on this morning. did i just sell a star and i could end up with a -- >> no, no, no. i mean, look, here's the deal. the yield's 4.5%. the real estate visit trusts are really in the crosshairs of what happened when rates go up. i think you did the right thing. i think it's doing an absolutely terrific job. i do believe you can get in the stock lower, and i would encourage you to do that. but right now, i thi i a ton of sense if you want to ring the register. nobody ever got hurt taking a profit. on wall street, the bigger they are, the harder they fall. that's just the chance to buy them at more palatable prices. much more "mad money" ahead as the world becomes increasingly connected, but how do we actually connect those objects? then charles river labs is helping biotech discover potential blockbusters, playing
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i want to introduce you to a freshly minted ipo that's rocketed higher. more than doubling since it became public at the end of july because i think it could be a terrific buy if we do get one of those kind of fed-induced pull backs that has to be expected sometime this year, maybe as soon as next week. i'm talking about impinj. this is a smokin' hot play on the internet of things. now, the internet of things is all about the connectivity revolution as everyday objects
food become connected to the web. how do we connect these objects? that's where impinj comes in. it gives clients what they call item intelligence, the unique identity location of a given product. in other words, their platform allows companies to get all sorts of data on where the goods are and where they're going. the technology acts as a replacement for manual inventory checks which makes it invaluable industries from retail to health care to automakers, just about anybody who has large quantities of inventory that need to be tracked. in part because of the internet of things is one of the sexiest trends in tech and in part because its first quarter as a publicly traded company was impressive, its stock has been on fire. climbing still higher to $34 as of today, less than two months later.
all this market's bigger winners could become vulnerable to profit takes as soon as next week's fed meeting. in that case, you're going to want to have impinj on your shopping list so you can buy it into weakness rather than chasing it into strength. what makes me think this stock is worth owning on a pull back. first there's the right of the internet of things. these things anything ask be connected to a network if you slap a radio frequency id tag onto it. there's still tons of connectible items that remain nn in most cases, they lack the physical infrastructure to make it happen, so they end up relying on stone age technology. that means having real people actually count things one by one. that's the way inventory used to be done. impinj exists to help solve that problem. they use rain, a radio frequency technology they pioneered along with google and intel. currently rain's spectrum is
collectively represent more than 96% of the world's gross domestic product. how does it work? it tags a given item with a cheap disposable radio frequency i.d. chip. when i say cheap, i mean it cost pennies. then they set up readers that can wirelessly detect these tags. it aggregates the data from its readers so its clients can keep constant track of their inventory. last year, 5.3 billion items were tagged with rain chips, and that number is expected to reach 20 billion by 2020. the real opportunities here are in retail and health care. for retailers having real-time intelligence of all of their merchandise helps them avoid running out of stock or having to mark down merchandise because they have too much inventory, which is the bane of their existence. you know what, it also helps prevent stealing.
amazon, knowing where everything is can make their omnichannel operations much more efficient. that's why walmart, lululemon, macy's have all adopted the platform. the total addressable market for these tracking systems could be worth $5.4 billion in 2020, just within retail. the second biggest opportunity for impinj is in health care. according to transparency market $5.3 billion by 2020. what makes this technology so valuable in the health care space? hospitals lose fortunes on expired medications and consumables. simply keeping better track of their inventories is a big money saver. medicare reimbursement rates for hospitals are now linked to patient quality of care, which gives hospitals an extra incentive to have real-time data on their medical specimens, their medications and their instruments so that everything runs smoothly.
in the auto history, audi uses the technology to tag their parts and cars to make sure everything gets where it needs to go. coca-cola uses it in their freestyle soda fountains. right now impinj is the only company that sells as part of a single platform. now they're the market leader. so far that's working pretty darn well. it reported its first quarter as a publicly traded company he last day of august. the revenue came in higher than expected, up 36% year-over-year. management gave robust guidance for the next quarter and that is why the stock rocketed up nearly 21% the next day. don't get me wrong, it's a speculative stock. the company's operating is new and unpredictable market. it gets most of its sales from third party distributors.
hard to imagine a deep pocket competitor one day stepping in to take some of that business from them. it's expensive any way you look at it. trading at a little less than five times sales. up here at $34, i recommend taking a pass at this very moment. however, if we get hit with a nasty sell-off like friday again winners get hit the hardest, that's when you should pull the trigger on impinj. i think it's absolutely worth owning if you can get the stock under 30 bucks. i think it could go there on a big decline for the overall averages. impinj saw a new opportunity emerging thanks to the internet of things and they pounced. becoming the first mover in the item intelligence space. their technology provides the metaphorical oxygen to retailers that are being choked by amazon
suffocated by rising costs and regulations. but the stock has had a big run since it became public in july. that's why i want you to put this speculative name just on your shopping list for the moment and wait for the stock to come down before you do any buying. don't worry. i bet you get the chance in the next couple weeks as volatility is back, and we know volatility cuts both ways. "mad money" is back after the break. but you have got a full day ahead of you, try mucinex 12-hour. only mucinex has a unique bi-layer tablet. mucinex is absorbed 60 percent faster than store brands. while the blue extended release layer lasts a full 12 hours. relieve chest congestion with mucinex, and enjoy living well. the roses are blooming in herbal essences hair is delightfully fragranced with notes of moroccan rose and the freshness of springtime
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>> mr. cramer, how are you doing? >> i'm good. >> my question is on amd, i know they just did a bond offering and some secondary. what are your thoughts about the stock? >> yeah, i think this pull back is an opportunity. i mean, look, they had to fix their balance sheet. that's good. i like their business. that's fine. i just think that once they put all that liquidity out there, you have to wait a little bit. don't expect it to bounce right back quickly. let's go to mark in texas. mark. >> cramer, what's up, dude? miami mark calling from austin, texas. how is it going? >> doing well. how about you? >> good, man. good. love your show. love what you do. one of the first stocks i purchased, believe it or not, was gw pharma. >> we're big fans of it because they have the actual pill of pure marijuana. the problem is now it's up on a takeover spike, and it maybe it gets one. remember, you can't make --
what they're doing in the united states, but they're over there in london. i say you know what, sell half. you're just starting. i don't want you to give back that big gain. let's go to joe in jersey. joe. >> caller: hello, cramer. >> yeah. >> caller: i watched ground zero rising last night, and you did an amazing job hosting it. i loved it. >> thank you. thank you very much. really appreciate it. i hope everybody does watch it because i think it's really important. thank you. >> caller: my stock is vector group. buy, sell or hold? disparate group of assets but it yields north of six. almost 7%. i like that. i like the yield. i think the business is fine. let's go to jeff in new york. jeff. >> caller: hey, cramer, this is jeff in upper manhattan. when is the summer going to be over? >> when is the summer going to be over? >> caller: yeah, when is the summer going to be over? yeah, i wanted to know what you thought about pet ex.
>> you know what, look, if we're going to do pets, the only one i want is idex, okay? that's my pet play, and i'm not going -- remember, they came up with the humanization of pets. we're talking about humanization of pets. david in california. david. >> caller: hey, jim. booyah. >> booyah. >> caller: hey, my stock is ip, >> okay. international paper has made a big come back. why? because apparently some of the rates for are going higher. it's got a good yield, good worldwide business. i say stick with it. dave in illinois. >> caller: dr. cramer. >> thanks for that. >> caller: recently adding a stem. google like abbv. >> i think this is a great long term position. i don't expect anything big until after the election. but abbv, i'll give you a
despite the different news about it. i think it's a good situation. and that, ladies and gentlemen, is the conclusion of the lightning round. [ buzzer ] >> announcer: the lightning round is sponsored by td ameritrade. take one of those pillows and take a big smell. they smell really fresh. what if we told you we washed these sheets 7 days ago. really no way downy? downy fabric conditioner. give us a week, and we'll change your bed forever. want more freshness? add new downy fresh protect. all i can to help prevent another one. a bayer aspirin regimen is one of those steps in helping prevent another stroke. be sure to talk to your doctor before you begin an aspirin regimen. what makes a lipton meal? first you start with this. these guys. a place like shhh! no. found it! and definitely lipton ice tea. lots of it. a lipton meal is what you bring to it. and the refreshing taste of lipton iced tea.
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it was a fabulous run today but let's not get ahead of ourselves. what kind of stocks might be worth buying if our worst fed fears come true? how about charles river laboratories, provides pharma and biotech companies with everything they need to discover new drugs and conduct early stage clinical trials, right down to the lab rats and mice used for safety testing. i like to say that charles river higher prices this year, the fact is these companies are going to keep spending money on research and development no matter what. those companies can raise prices. it doesn't matter if the fed tightens or the economy slows. if you're a pharma or biotech firm, you've got no future if you aren't investing in r&d. in many cases that means giving money to charles river. the company reported a very strong quarter at the beginning
no news. this is the exactly kind of stock that could be attractive in weakness. they've been making a series of smart acquisitions including buying wil research for $585 million in cash. this company is a cash machine. let's check in with jim foster, the chairman and ceo of charles river laboratories. mr. foster, welcome back to "mad money." it caught my eye that you got something new. humanize mice. this sounds like the innovation that can take share from others. >> humanize mice is really important technology where you're making an animal model to be like a human avatar. you're getting much better results that are going to show you how the drug is likely to work in people. this is translational medicine. when you're doing animal work, it's about information you get doing animal work, is that
is that something we can use well? so, yes, i mean we're really excited about that. we have technology to do that. it's relatively early days, but i think these animal models will become increasingly more important and significant for drug discovery because, you know, helping the drug companies determine whether to continue with a drug can be better than an animal that is likely to predict how it is with people. >> when you're doing a terrible cancer trial, a lot of times people can't live through the trial. this may be another way without worrying about the fatalities. >> and also animal models live a much shorter period of time so you can see the -- so the time elapsed in a juvenile and an adult and an elderly person. so animal models are giving you much better information potentially.
and i'm concerned obviously it's an election year. it seems like the politicians like to beat up on the drug companies. so, therefore, perhaps the drug companies pull in a little on their reins or they're worried about drug prices going up. is that something that's good or bad for charles river? >> i think that where we are is we've got extraordinary companies now developing drugs for indications that no -- historically you couldn't make drugs for. so we have anti-s that are come of age. we have gene editing that's come of age. we have the immune system that is actually working, and i believe that the capital markets and the insurance companies will pay for drugs that are breakthrough drugs that keep people alive longer or cure diseases. so i think that's good for charles river. i think that's good for society as a whole. i certainly think it's good for the drug companies. i think most of the drug companies that are working hard at drug innovation and r&d and
for especially small groups of patients are doing really important work. and so i do think they'll get paid for that. >> we had an ipo boom for biotech, and now we have a bit of a bust for all ipos. how much does that move the needle? a lot of these companies still have a lot of money left over. are you worried that, say, a year from now it's going to run out? >> a lot of cash came in in '15. so far in '16, there's more cash not as much as '15. but we think there's three-plus years of cash available. we think pharma will fund at the same level or higher since the biotech companies are becoming the discovery engines for pharma. pharma is going to write those big checks. and, again, just to go back to the prior question, i don't believe that the capital markets won't pay for great innovation with great drugs. >> okay. now, you continue to be
at a certain point -- i mean you're up to 50% market share for some things. how much room is there to gain? >> our strategy is to continue to build a large portfolio of services. i think the more services that we can add to our portfolio, either on our own or through acquisitions -- and a lot of it will be through acquisitions. that along the drug development pipeline. so if the drug companies shrink their own infrastructure, we can do more of their work. and the biotech companies ne the broader our portfolio gets, the more therapeutic area specific it gets, the greater impact we can have and the more important we are to our clients, helping them understand the molecules and helping them to make these go and no-go decisions, which is why we worked on more than 50% of the drugs the last two years. there's a reason for that. >> last question. you get to see things that are in the lab that might not be out
will major cancers be cured in seven, eight, nine years from what you see? >> i think that we're making an enormous amount of impact on cancer. a lot of cancers now have become chronic, meaning they're treatable. a lot of cancers are actually being cured. i do think immuno-oncology is a massive, major breakthrough. i can't give you a time frame, but i think certainly in the next decade, we're going to make great strides in improving health care and particularly cancer. >> congratulations on a great quarter. you defied a lot of sceptics. we got it right because you keep doing great things. jim foster, ceo of charles river labs. arms dealer to all the drug companies. a terrific business.
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there's always a bull market somewhere and i promise to find it for you right here on "mad money." these are not deplorable people, that i can tell you. >> my wife and i represent non-deplorable people. >> i am probably a lot of deplorable is not one of them. >> as donald trump tries to capitalize on his opponent's "basket of deplorables" description of his supporters, a fight breaks out at the trump rally in north carolina. >> this as hillary clinton phones in to television and fund-raisers to discuss her pneumonia. bizarre moment for ryan lochte as two men crash the stage during "dancing with the stars." >> the ncaa brings down the