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tv   Mad Money  NBC  January 7, 2016 3:00am-4:00am PST

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>> 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 help you make money. i want to educate and teach and put it in all sorts of context. so call me or tweet me @jimcramer. sometimes the market just wants to go lower. you can't let the fears and there was a lot of fear today of concrete positives that might be happening under your nose. and that's still true even when
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thermo nuclear war. speaking of weapons of mass destruction let's address the elephant in the room at the top of the show frflt the moment we learned last night that north korea may have detonated a hydrogen bomb or claimed they did you knew today was going to be a difficult session. markets like the people that trade them have always had a hard time factoring in potential nuclear catastrophes. it didn't feet great to rush in and take the other side of the trade. the combination of the unknown and inherently irrational north korean government and thermonuclear weaponry is reassuring as it gets. the stock market in korea seemed to take the whole thing in stride dropping about a percent
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rallying. it rallied hard and finished almost unchanged. there's no universe where we could be down more than south korea on these moves. at least no more worried than you were yesterday. remember the north koreans have had nuclear missiles for years now. they conducted the first successful test in 2006. all they have done here is go from having nukes like in 1945 to be able to build more powerful nukes like 1952. the north koreans are never going to use those weapons because even their supreme leader doesn't want his country wiped off the map in retaliation. beyond that though while everybody was focused on north korea's h-bomb, you may have missed the rate hike bomb. today we got a strong employment
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news. so-called bad news because it suggests the fed can keep tightening and yet at the same time this morning the fed's vice chair stanley fisher said in an exclusive interview that he wasn't nuking the market with rate hikes blindly this year. that would have been the previous laid out bland. it's not going to be launched at your portfolio either. i'm not saying it's time to be seguin about this market. that's wrong. the market closed up 2%. maybe things are working. i am simply urging you tonight to maintain a sense of perspective rather than losing your head and panicking.
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the day to do that. certainly not the intraday low and you'll get a better chance at higher levels sometimes if you'll be a little patient. i keep telling you that we're stuck in crazy town with good news for the real economy like lower oil crisis it's bad news. the fed is much less likely to raise rates repeatedly if oil stays down or goes much lower because the inflation fears don't come into play. we took that vibe to a whole new level. we're going to hear from the famed investor later in the show. we know that cheaper gasoline flows positively to your bottom line and the retailers and the airlines but don't bother to ask the sellers of the stocks why they're headed to the exits. you might get hit by the revolving door. do you know that ten out of ten sectors decline today? including many where estimates can be raged right here right now off the hideous oil decline. that's one flew over the coco
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while investors used any excuse to sell a hand full of high gross stocks managed to florish today. growth is so great not even icbm could stop it. although maybe that makes sense, i definitely want netflix. or here's another example of lunacy. is there a nation on earth that doesn't need nor arms? isn't that what this whole week has been about? doesn't south korea need more weapons or are they about to beat their missiles into plow shares? yet the defense stocks got slammed today. just to compound how ridiculous everything was today. i heard people talk about how korean businesses like samsung will be damaged by a nuclear war. as out landish and tragic as i think that would be, if we were to imagine our worst fears, you
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news for samsung competitor apple yet apple won't stop going lower despite the fact that their customers spent $1.1 billion on apps and app purchases ending january 3rd. i'm sure that many people watch jessica jones on netflixs and how about the fact that that was the biggest day in history? shattered the record for single day sales. when was that? how about last christmas. the only thing that made sense to me was that it's a tiny rally in craft heinz because they make velveeta cheese which i am sure will be just as fresh as the day it was manufactured even if you're stuck in your fall out shelter for decades in the wake of an actual detonation of a hydrogen bomb. if you want more evidence that we're too negative, macy's preannounced a not so hot earnings number per share after the bell. what did the stock do? it went down $2 because that's what people do and then it
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yeah. it's above where it went out. i know that none of these positives matter because we're in crazy town. i know that no one believes anything good can ever happen again. yield means nothing even throw there's high yielders because the collapse of dividend paying stocks is in an environment where fabulous balance sheets mean nothing even though many companies have the fire power to do something with their stocks: it was not wanting to lose money. they're losing money and refuse to commit that cardinal sin and they're selling things left and right. here's the bottom line. when sentiment gets this negative to the point where we're ignoring a ton of actual real positives, and you and i know that, maybe -- i'm going to go out on a limb, maybe you should be more calm. maybe be patient.
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favorite stocks as i finally did for my charitable trust today. follow what i did. i didn't dump anything. the trust didn't sell. it's worth staying the course. sometimes the most painful thing to do is the right thing to do. that's why i'm advocating the outrageous position of not having all your stocks because everyone else around you seems to be doing exactly that. >> thank you for taking the call as always. with multiple revenue streams already in place along with the recent contract to build the aircraft and rbc raising a card to $250 seems like lockheed has a lot of runway left. >> i saw the upgrade today and i was talking to jack moore who is the recent director and we just
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this is the most obvious thing to own in this market but it doesn't matter because right now we're in a moment where good news don't mean jack but have found in my more than 30 years of trading and investing that that that that has never been the case for too long of a time. i like your idea. let's go to collin in my home state of new jersey. >> hey, jim. i'm a big fan of your show and everything that you do. >> thank you. >> thank you for taking my call. >> thank you. >> i had a couple of questions and i wanted to know what your outlook was for 2016 after the fda launched an investigation on the pricing of their drugs and also had a question about their enormous free cash flow and if you think 2016 will be the year. >> yeah i think it's good. if you want to give biogen that was upgraded. it's not that expensive. i like amgen.
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and then let's put gilead in that mix. those are high cross stocks. they do better. i'm not as concerned or negative as most of the people although it did rally today. all right. sometimes the market wants to go lower. we have to accept that. when it gets this negative i am urging actually calm. i want you to consider even as the market goes lower picking a favorite stock that's now at your price. all right on "mad money" tonight i already examined the winners and losers in 2015. tonight i'm eyeing the nasdaq. could the crash in crude continue? mr. wonderful himself. kevin o'leary can brighten up a little bit of sunshine in the show. stick with cramer. >> you're out of your mind putting a $10 million value on this. >> don't miss a second of "mad money."
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have a question, tweet cramer. #"mad tweets." send jim an e-mail to madmoney@cnbc.com or give us a
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head to madmoney.cnbc.com. >> i am urging you to remember that stocks can go up too. it's in this difficult environment that you need to be more selective. all week we have been examining the biggest winners of 2015. first in the dow and then the s&p 500. see which could continue higher in 2016. it's time to finish one the nasdaq. we already covered a bunch of these leaders in last night's review of the s&p 500. netflix was up 129% last year. amazon gaining 119%. blizzard rallied 92 act and nvidia. up 105% is the only member of the nasdaq 100's top five winners that isn't also in the s&p 500 and to me this chinese online travel company is the sorry you're on your own selection.
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i want nothing to do with this one. while there's a lot of overlap in the top five, the nasdaq's 2015 winners start to get real interesting when you look at the next 7 names on the list. all would seem likely to be able to go higher in 2016 even in this miserable environment. that must include starbucks, insight corp. and alphabet, the artist formally known as google which all climbed 47%. electronic arts up 46% and ulta salon, t-mobile and expedia. now i just said that i don't want to go near any chinese stocks but i don't mind recommending a stock tearing up china. namely starbucks. this year's starbucks opens it's store in that country and given the huge increase in wages starbucks might be the single best. especially now that cell phones are said to be tapped out as a source of growth. but to focus on starbucks merely as a chinese play is to sell it
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if we didn't know the history of starbucks one of the greatest wealth creators of our era and most successful aside from amazon and apple we might say it's an incredible technology engine that is figuring out what consumers want to eat and drink and giving it to them in the most enjoyable way possible. howard schultz figured out the holy grail of capitalism. treat your workers as well as possible so they'll stay well and true while arming them so they can best please your customers. that sounds like a simple formula but only schultz brought it to fruition worldwide. at least the cramer is. here's the high quality. it needs more tech to meet demand. right now i'm hearing the footsteps of short sellers telling me that starbucks is rolling over. i say who cares?
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it's insight. here's a $19 billion company most of you have never heard of. run by an oncology titan that is not just one but two potential blockbuster drugs. that's solid tumors on its way to billion dollars status. what about the second drug that partner eli lily trumping at yesterday as being a big needle mover for the indiana pharmaceutical giant. the board of directors, you see him lots and julian baker from the best bio tech investors of our era. i feel like offering everyone that watches this show an apology. i should have been recommending this one for years. how about alphabet formally google? it's the cheapest of the fangs. facebook, amazon, netflix. alphabet doesn't deserve to be this cheap given it's search
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looking technologies that you're getting for free. bit this company can earn $40 a share next year and given a still explosive growth rate it's bargain. autonomous driving cars paying off yet. a little more problematic. right now it's trading over it's recent star wars that a lot of people don't think is selling that way. i say stick with activision blizzard. it has king digital. that deal is closing and it will be out of it immediate. ulta salon. their amazing loyalty program and fastest same store sales growth. the ceo better get the respect she deserves this year. should this really be only $11 billion company with so much weight space for expansion? i think not. it's not just curlers for heaven's sake. you would know that expedia is
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it's great technology, management, consistent revenue generator and always too expensive because it sales at a high priced earnings multiple. and to me the opportunity is too great to be contained by a $19 billion market cap. finally there's t-mobile: the last time t-mobile reported a lot of people announced the quarter sub par. i thought it was a difficult to understand quarter. given the 10% move up since then maybe people are getting their arms around. two ways to win. keeps taking share and goes higher or keeps taking share and doesn't go higher and then gets acquired. either way works for me. bottom line, i think starbucks, alphabet, ulta, expedia and t-mobile can keep going higher. they can certainly do better
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that's exactly what i'm expecting. much more "mad money" ahead. while the winners continue to tear up wall street they can't take you to the promised land. i'm putting up the worst performers to see if they can be avoided. they dropped to levels not seen since the global financial crisis. what does 2016 have in store. you probably know shark tank. tonight i'm sitting down with mr. wonderful himself to see where he's finding opportunity in this market. stick with cramer. (cell phone rings) where are you? well the squirrels are back in the attic. mom? your dad won't call an exterminator... can i call you back, mom? he says it's personal this time... you call at the worst time. it's what you do. if you want to save fifteen percent or more on car insurance, you switch to geico. it's what you do. where are you? it's very loud there.
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happy anniversary dinner, darlin' can this much love be cleaned by a little bit of dawn ultra? oh yeah. one bottle has the grease cleaning power of two bottles of this bargain brand.
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>> when you look back at the worst performers of 2015 the losers of the dow and the s&p 500 were heinous but the fears are different. they're not just about coal or oil or natural gas. consider the worst five performers in this cliche index: not only do these companies have redemptive qualities but i'd go so far as to say if there were such a thing as value buyers then all five names might qualify as stocks worth earning because they're profitable but don't have any real growth to speak of. they have seen so much value
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there's any money managers out there that have the patients to sit with these without worrying that their assets will be taken away from them while they wait for something good to happen. the percentage losses make the nasdaq's worst performer sound like a rogues gallery. listen to this, micron down. viacom is 45%. seagate shedding 44%. and bed and bath and beyond shedding. it's the pretty good balance sheets and all five are expected to have earnings growth both this year and next. there in lies the problem though. when you see stocks trailing price to earnings ratio. viacom. your most likely seeing what's known as the compression of the earnings and the price to earnings multiple at the same time.
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by. they're going to miss the earnings estimates and people will pay less for them because of that. does it have to happen? no. but let's take the cases of micro, western digital and seagate. all three of these companies are makers of commodity parts for all sorts of technologies but they're still regarded as place on personal computer growth and there is no growth. their end markets are in what we call decline. that's why the stocks are so hated. they're making acquisitions to become more than just personal computer components. they want to change their stripes but their diversification attempts aren't enticing any new buyers because the earnings estimates are coming down anyway. seagate is not doing all that much to reinvent itself but does have the 7% yield. don't get too excited though. that yield is too high to believe the dividend can be sustained if their earnings go into a prolonged down trend as
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as for viacom it's used as the ultimate bet against prox. it has all the entertainment that you can shift, slice, dice and cut the cord from. it's an equivalent of the media companies. except viacom makes a ton of money and it's run by tons of people. plus the company paying you in almost 4% yield while you wait for them to figure things out but they also have a lot of debt and no must watch now programming. funny how they are these days. disney has sports but people dob don't like that. this one has no sports and it's hated anyway. it's trading like a newspaper company. a wasting asset. i think it's better than that. but that's not enough to make me want to buy the stock although one look at time warner. rallied almost 5% today tells you again, don't give up the ship, at least not at these levels. finally there's bed, bath and beyond. bbby. what a hard to value company
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on one hand it generates a huge amount of cash and shrunk it's share count from 254 million to 165 million. but on the other hand everything they sell you can buy on amazon for less money. so the market is valuing bed bath and beyond a wasting asset slash value trap. there's the negative scenario. who is to say that buying back stock endlessly. the bottom line, i think that bet is worth taking. it's kind of intriguing to me here. even as i expected to deliver one more disappointing quarter. maybe has the chance to buy into even more. and as for the rest, i think it
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these dogs have plenty of fleas. but they can still bark. maybe they bark the way to higher levels than where they sold at today. >> jim, booyah. how are you? >> i'm fine. how are you? >> i'm great, man. i have a question about go pro. they have a new drone product coming out from karma and apparently that's a hot ticket at this consumer electronics show in vegas. what do you think? is this the right time to get in? >> i have so many companies with high yields of 4% with great balance sheets and descent growth products that i don't want to speculate on a go profor anything other than the fact that it could have a season ending back. it's already on kind to companies that have cool gismos and fit bit that has better
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there's so many defenses and let's go to robert in maryland, >> booyah, jim. >> booyah, robert. >> from maryland. >> nice. >> i want to thank you so much for all the wonderful advice and the encouragement you're giving. >> thank you. >> my question is on a bunch of the people in my neighborhood all seal to be happy to say they're saving money and everything. i went out and bought the stock and it's gone well last month and now seems to be stuck because of what happened in nevada. >> well, yeah, but look. let's understand, this market is turned wildly against fossil fuels. wildly. and solarcity is the antifossil fuel play. but how about an antifossil fuel play doing well in earnings that could go up gigantically. that's first solar.
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game. sure the low performing stocks of the nasdaq have some redeeming qualities but the only one i can give you my blessing on is bed, bath and beyond. wait to get in on more weakness when they report a not so great number tomorrow evening. much more "mad money" ahead. oil prices plunged again today. but could the drop continue? and then i'm sitting down with shark tank investor, the much loved kevin o'leary. get his outlook on the market and his outlook on optimism. muscle your calls. rapid fire in tonight's edition of the lightning round. stick with cramer. eye of the tiger tv anncr: good afternoon everyone. tv anncr: it's the perfect day for a game of football. tv anncr: this team is having a fantastic season. morning rituals are special. when you share what you love... ...with who you love. kellogg's frosted flakes. they're grrreat!
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>> when will the agony come to an end? do we just need to get used to oil trading in the foreseeable future. it's only being aggravated. or is it possible that crude could come back sooner than we think or there might be light at the end of the crude tunnel. it will be at low levels. you need to talk to an oil man. that's why i'm thrilled to have boone pickens. here with us tonight, it's the energy business and boom welcome back to "mad money."
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lower longer. it will go lower than we think. >> and i was just a year off. 70 or 75 by the end of the year. you know, if we go back and look at the long stretch we had in the 80s we had were 20% over supply. today the world was 5 million barrels a day. so it's not going to take much to balance the market and when you do, it will start to move up pretty fast. >> were you surprised that when we heard about iran and saudi arabia, saudi is cutting off relations that oil rallied but
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gain? >> no, that may be a real turning point is the saudi iranian situation. usually commodity market like that, you can have an incident that you can -- that marks the bottom. that could have happened on the saudi iranian deal. the world to me is numb to war. we had war for a long, long time now. if you would have had that happen a long time ago it would have shot the price up and not sold. >> do you think that maybe oil pump as good going to go down in the united states.
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>> we peaked at about 97 and we're down to about 93 now and i think this time, well, by the end of the year, that's a year from now that you'll be down another 500,000 barrels because you only have 524 riggs drilling for oil in the united states today when you peaked in 2004, 1609 riggs in 2014. >> well, then that would tell me as the stocks go down we're creating value ifs only because some oil companies are well capitalized and this could be the year that they buy companies that go under. >> well, you're going to have more consolidation. no doubt about it. the banks have been patient. and that's good. they're giving you a chance to recover. you, you know, our mutual fund, they have, but they bought the
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they bought pioneer, diamondback. they have the best properties in west texas. >> now you know pioneer did a big equity offering. raised more capital last night. is that the kind of thing that our viewers should be thinking these are descent levels for companies to be able to raise cash. maybe we should go long and buy on some of these equity offers. >> well, pioneers about 8% and you can live with that. scott sheffield is a guy that he has been through these before. he's not a kid. so he is getting himself in good shape. he is still drilling and he is going to add to his reserve base and his production this year. >> most people have been more bullish and didn't expect oil to get down here.
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blink. when we talked last year it was unlikely that oil could have come down to 33 dollars barrel. >> well, i didn't think it would go below 40. but the saudis had credibility and said they would not cut it and kept it above 10-3. i didn't believe they could do that. they did and here we are but it's hurting them, $500 million a day is about what it's costing the saudis and the russians. >> well, how about natural gas? at one point it traded below where almost every company could make money in this company. has natural gas gotten undervalued and have the natural gas pipeline companies? have they any interest for you? >> you know, the natural gas, it's unbelievable the reserves of oil and gas that the united
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we're the number one producer in natural gas. unbelievable that that's the case. over the history of drilling, over 5 million wells have been drilled and over half of them drilled in the united states. you wouldn't believe we still had the reserves that we do have. our industry has done a magnificent job of supplying oil and gas to the united states and i don't know. i made a lot of money off of natural gas and i lost a lot of money. you look at the guys that lost their jobs because of the price of natural gas and one is tom ward. boone pickens. doug miller. but natural gas is tough. >> well, look, i appreciate your candor. when you said you didn't think it would go below 40. i didn't think so either.
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certainly more outstanding than almost everyone else i speak to. thank you for coming on "mad money". >> sure. always enjoy being on with you. >> thank you so much and thank you for your efforts. thank you to boone pickens. founder and chairman bp capital. does think it's about the bottom. stay with "mad money." (cell phone rings) where are you? well the squirrels are back in the attic. mom? your dad won't call an exterminator... can i call you back, mom? he says it's personal this time... if you're a mom, you call at the worst time. it's what you do. if you want to save fifteen percent or more on car insurance, you switch to geico. it's what you do. where are you? it's very loud there. are you taking a zumba class? looking for 24/7 digestive support? try align for a non-stop, sweet-treat-goodness hold-onto-your-tiara, kind-of-day.
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>> it is time. it is time for the lightning round. >> and then the lightning round is over. are you ready?
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in missouri. michael. michael. okay. no michael right now. why tonight we go to ben. ben in new york. ben. anybody? >> hey, it's ben. how are you doing, jim. >> ben, great to hear from you. what's going on. >> listen i want to ask your opinion about a company i bought and sold a few times during 2015. i'm thinking about keeping it in my long-term portfolio. >> it's a very inexpensive stock. may i suggest instead that we go with them down 5% already for the year and great management. let's go to ann in florida. ann. >> my stock is orbital atk. >> i have to tell you, this is the stock for this environment. i have been recommending this forever saying defense budgets are going higher. 52 week high.
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ike in north carolina. ike. ike. >> booyah, jim. >> booyah, ike. what's happening. >> i love the show. i have a couple of questions. i'm looking at petroleum and ford motor company. is whiting low enough to buy? >> i have a high yielding oil stock that can pay the dividend. we don't want to go there. still don't see a reason to pull the trigger. steven in massachusetts, steven. >> hi, jim. my question is csx railroad company. >> i don't know. you know what -- >> bye bye bye. >> a.j. in north carolina. a.j. >> yes, sir, i have 500 spirit airlines. i bought it at $45.
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test >> do not confuse my patient and some what calm demeanor with complacency. i'm saying this is classic and i never have made money panicking. not sometimes but never. i don't think this time is going to be anything different. now i think that you have to take a look at some stocks that you may actually want to buy of companies that you think are good. be more like warren buffet and less like a guy jumping off of a pole. there's always a bull market somewhere. i promise to try to find it for you right here on "mad money."
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