Skip to main content

tv   Mad Money  NBC  April 18, 2012 3:00am-4:00am EDT

3:00 am
the wines to help you get over the tax blues or anything, really. -- captions by vitac -- www.vitac.com world. >> i'm jim cramer, welcome to my world. you need to get in the game. he is going to go out of business, he's nuts, they're nuts, they know nothing. i always like to say there is a bull market somewhere. "mad money," you can't afford to miss it hey, i'm cramer. welcome to "mad money," to cramerica. other people want to make friends, i'm just trying to keep you in the game, teach you, educate you. my job not just to entertain, but on coach you, call me 1-800-743-cnbc. so many commentators are totally stumped on a day like today. their only condition, to play pin the tail on the federal reserve. especially when we rally this hard -- not bad -- with the dow soaring 195 points, so they
3:01 am
resort saying nonsensical things, you know why we were up today? ben bernanke committed to a course of rising interest rates. no, that's why the market fell. i'm sorry. fed chief singles rates stay lower. that's why we rally. with an all-knowning voice. if it's up more than 100, it must be ben. if it's down more than 100, it's definitely ben. today, they are jammed, stumped. he is stone, cold silent. no clue to explain this rally. because ben didn't say anything. in the rare case where is it isn't ben where he's on vacation where he said nothing at all, the punditocracy pins the tail on another pundit official. anyway.
3:02 am
some talking head that said something positive about rates. no one said anything from the fed. so these chumps, i'm pronouncing them officially stumped. they don't have a bernanke rein reason to pin the tail on. i call them the washington no nothings, they can only relate the rates to washington, not the companies. i wonder if they think ben bernanke has a five-year plan to take the dow to 15,000. that would certainly fit the world view, but they have to sound smart, though and no one ever got fired for citing the fed as an alibi for a big rally, however tenuous this time it must be troubling. they have to throw hands up in the air and say beats me. but others are more sly, clever. they can't blame it on the fed. no bernanke story, so what do they do?
3:03 am
make up whole new and useless terminologies to maintain the pa tina of graf i tass. gravitas. people put more risk. that was their explanation, risk on. my credentials. my cv. from the hedge fund world. been buying and selling stocks since '79. trained at goldman sachs, managed a $3 million charitable trust. i know what the lingo is. the real lingo, and i know what's bogus, unhelpful nonsense, and i know it's seeped into the lexicon like some bizarre rap lyric. kind of like financial gangsta rap. risk on, risk off. except here is what it really sounds like to someone who knows better.
3:04 am
it makes it sound like investors are applying risk, like they are applying she lack. risk on, break out the thompson's water sealer. risk off, peel the paint. it's that stupid. but it passes his intelligence. i always wanted to seem smart. anyway, why do i make that harsh judgment? what's it mean? what's it mean to you at home? that's what i spend my time trying to figure out. what's it mean to you at home? that you should apply a coat of risk schellac at home today. you know what this is really about? about substituting lazy thinking for critical analysis. they are about dodging the conference calls which i know are tiresome and dry and giving you something that sounds smart, even if it has no rigor at all. in short, they are just a way for pundits to avoid doing their homework. hey, i know it. listen. you got to burn a lot of time, valuable time, doing all this research. i don't blame anyone for not
3:05 am
wanting to do it believe me it can cause a lot of problems at home, if you know what i mean. but if you want to be any good at this, you have to do some sacrificing. i'm not saying anything efhermeal is gospel at best. you think i like talking about a spanish ten-year bond auction? hello? i don't even like to talk about bonds, let alone spanish bonds. i'd rather talk about barry bonds. i have no choice. wall street is at the end of a fashion show that's been importing many styles from europe of late. you can't ig for them. it drives trading so often. both in the morning because. spanish tail and in the evening, like last friday, because of worries that something horrible will come out of iberia, besides, yes, indeed, rancid paella. no denying that linkage in reality. even if theoretically it
3:06 am
shouldn't happen. we deal with reality on the show. so what's really going on? if it's not -- not risk on, risk off, that doesn't make any sense and if our friend ben bernanke didn't say anything or his minions didn't say anything, what's really going on? talk fundamentals for a second. two-card monty game i introduced you to last week. when china is easing. the china card. when they are in the change in the structure of the currency. and american companies shine, a pair of kings can take on the european weakness. oh, that's a good thing about a card. and the wild card last night that shocked me. india. india cut interest rates by a half point. last week i told you the rest of the world was a total low number card affair.
3:07 am
2, 3, 5, that kind of thing. i didn't see anything coming from the rest of the world, whether it by russia with pseudo capitalism, which allows two or three people to get rich, or from brazil, where inflation remains paramount, or indonesia, where there is a potentially con fiscatory government. or ar again tina, where there is a confiscatory government. we get a market, that suddenly people didn't know was beautiful, which is going in one direction, and the bears got it wrong. overnight, india became a wild card. and one of two kings, get this stand right. and the u.s. king, he's not the suicidal one that many people think he is. witness stupendous bank earnings. they convinced many of to you sell at the bottom, potentially if you sold at the regional banks.
3:08 am
they were supposed to do so poorly. of course, hitting the ball out of parking u.s. bancorp, charitable trust, gorgeous number. they no longer feared beard -- i mean no longer fear the bear now that it looks like it's out for earnings season. what are people so enamored? the real deal beside the growth. we have growth coming from sodaas, retailers and web, i have a hard time endlessly coming up with reasons why things are better, other than things are like better. sure, housing starts doesn't seem smart what can i do? based in fact. they weren't anything to write home about, but we need fewer homes, price of home is going to increase, factory production, not that high. but people and companies are
3:09 am
spending on goods and services and that's enough. here is the bottom line. get used to an environment where stocks trade on growth. because growth is what matters. that's what propels earnings and what makes stocks go higher. on growth, not on words from ben approximate bernanke. start thinking about stocks, that are undervalued and buy them, and not adding a fresh coat of risk on and yes, be careful of spaniards bearing greek like gifts. this is a game of investing in companies, not countries, about taking dividends. countries don't have dividends, for heaven's sake. the federal reserve doesn't have dividends. companies have dividends, take them, put them back in the stock, called reinvesting and build fantastic long-term investment. even if you think i'm dumber for not pointing out it's not a risk on day, or maybe a risk off day or perhaps even better, who the
3:10 am
heck cares? my job so explain and to coach, not to sound smart and confuse you. let's go to joe in connecticut, please. joe. >> caller: booyah, jim. i saw some old pictures of you with hair from my mom's old springfield year book from '71. >> i'm glad she saw the pictures. >> yeah, lots of hair. >> not when i went to abner wilson boulevard and -- never mind. that's different. go ahead. >> caller: i have shares of wyp, which, unfortunately, going forward, aren't looking so good after the arjen tina government is voting to nationalize it looking for your thoughts on that, especially since government of spain says they are going to launch a trade war against argentina too. >> you have to hope -- and, boy, hope should never be part of the equation. you have to hope that stock has
3:11 am
some value left in it, because, you know, this is like when -- this is very much like the chili in the '70s when they decided anaconda was no longer an american company. be careful. i don't known there is going to be anything left. it's like a mega millions lottery ticket right now. a lot of them won't pay off. pin the tail on the fed? i don't think some of if you want to validate today's rally, look at marks, earning, and growth. not risk on bernanke, not risk off bernanke, it's actual companies that pay dividends. that's how you make money. "mad money" will be right back. >> liquid asset. chenier energy getting approval to build the first plant to shipping natural gas overseas, shipping it could it make you a boat load of profits?
3:12 am
and trash to treasurer? earth week conditions with a look at a company turning trash into cash. waste management recycles more than 7 million tons of material a year, but can protecting the environment help safeguard your portfolio? cramer's exclusive with the ceo is next. after years of managed markets, volatility has become the new norm, but could we finally be in for smooth saling? or is there more instability ahead? cramer's hitting off the charts to find out. all coming up on "mad money." >> miss out on some "mad money" get your "mad money" text alert today. mm to 26221 to get cramer right on your phone. for more info, visit madmoney.cnbc.com. or give us a call at 1-800-743-cnbc.
3:13 am
having one of those days? tired. groggy. can't seem to get anything done. it makes for one, lousy day. but when you're alert and energetic... that's different. you're more with it, sharper, getting stuff done. this is why people choose 5-hour energy over 9-million times a week. it gives them the alert, energetic feeling they need to get stuff done. 5-hour energy...when you gotta get stuff done. is the pain reliever orthopedic doctors recommend most for arthritis pain, think again. and take aleve. it's the one doctors recommend most for arthritis pain. two pills can last all day. ♪
3:14 am
what do you do when you can no longer get around like you used to? when you fear losing your independence? who do you call? call hoveround now, to see if you qualify for america's premier power chair. hi, i'm tom kruse, inventor and founder of hoveround. now you can do more, see more, enjoy life more. here's why hoveround makes it easier than any other power chair. hoveround is more maneuverable to get you through the tightest doors and hallways. more reliable. hoveround employees build your chair, deliver your chair, and will service your chair for as long as you own your chair. and most importantly, 9 out of 10 people got their hoveround for little or no cost. call now for your free dvd and information kit. and now every hoveround comes with this tote bag and cup holder for handy access to your favorite items. you don't really have to give up living because you don't have your legs. call now for your free consultation. and right now, get this limited edition hoveround
3:15 am
america travel mug free with your hoveround delivery. call or log onto hoveround.com right now! since it's earth week at nbc unver versal, i feel compelled to point out, maybe for the zillionth time, our single best tool is a fossil fuel, it's natural gas, much cleaner than petroleum, a heck of a lot cheaper and so domestically abundant, we literally don't know what to do with it. this is the great tragedy of our energy policy. we have a chance to slash carbonneau missions and break the backs of opec and we're not taking it.
3:16 am
even though we don't want our natural gas, the rest of the world wants to get it. right now it sells just $2 per thermal unit. overseas, it's $16. in order to export natural gas you have to chill it to a mom come part liquid form and building big i had wefied natural gas terminals. enter chenier. they are going to create the first export terminal. last night, the federal energy regulatory commission approved cheniere, you know i've been a backer of the stock a long time. this is not just politics. it's giving a fabulous 115% gain. i'm thrilled to have charif souki here with us.
3:17 am
an historic day for this company to talk about the latest development and what it means for his company as well as the future of natural gas here in america. mr. souki, welcome back to "mad money". >> good to see you again. thank you. >> congratulations first of all. >> thank you very much. >> today is the day are you able to get started. a gigantic project, one of the large nest the country. what are your next steps? >> we are working on finalizing financing. we announced a few weeks ago that we had an agreement in principal, with black stone, so we are planning on finalizing the details for black stone, will contribute $2 billion in equity if everything goes right. we have to arrange an additional $4 billion of debt to start the first phase of the project, hopefully in the next few days. >> take on that debt. people see natural gas price goes down. $1.95.
3:18 am
how much demand is there overseas for your product, that the people will be willing to lend you $4 billion? >> listen, in the rest of the world, there is an enormous amount of oil products that are currently being used in stationary use, such as fertilizer production, none of this makes sense if you can buy american gas much cheaper and diesel fuel or other oil products that are currently costing closely to $20. so it's an enormous market. almost infinity. >> almost infinite. they have trains, why are they -- trains are awfully expensive. but it's worth it given the infinite demand. >> when, when we started, $4 gas prices in this country only a year ago and even they we thought it made a lot of sense. oil prices $120 per barrel.
3:19 am
so when have you this -- best advertiser i ever seen in my life. >> you set up the arbitrage everybody wants. >> didn't set it up, but i'm trying to take advantage of it. >> why not buy as many natural gas companies as i can? they reflect much natural gas prices and run the arbitrage right through? >> the small detail of the right location to find the infrastructure and spend a few billion to build it. it takes four or five years. and it doesn't sound like others will be able to get away with doing this. washington is concerned that perhaps we ought to be keeping our natural gas here, now that we have given cheniere, but maybe we shouldn't given other permits. >> i don't think so. i think the administration recognizes very much the fact that this is an enormous resource, a global game changer,
3:20 am
and i don't think the administration can reach the export targets without exporting natural gas. >> and you said 3,000, 4,000 people you'll be hiring quickly? >> we'll put to work 3,000 or 4,000 people for construction and we will put a lot more people to work in louisiana, delivering the gas through the facility. >> when you told me this would happen, frankly, i was subsequent i call. every step of the way you got the approval. >> but that's a testimony to our regulators. they are actually pretty consistent and they are pretty fair minded. >> most people don't have that feeling about regulators. did you know going in? >> you have to be patient. they are confronted with very difficult situations themselves. we offered them things to think about. it wasn't exactly intuitive to think we would export natural gas. three years ago, talking about
3:21 am
needing anything we could get and needing to import gas. that was only three years ago, so what happened in this country, is evolution. >> let me understand the economics. black stone will get some of the profits. they put in $2 billion. why do you think there will be anything left for shareholders of cheniere? >> four countries will pay us $4.5 billion a year after operating expenses. on that $2.5 billion a year, we have to, one, pay the debt. two, pay our new partner, black stone. and, three, rest is left over four shareholders. >> once put the trains are in, that's just the beginning. you did it.
3:22 am
>> thank you. and you were one of the first believers. >> i have to tell you. sometimes it's the moxie, sometimes it's just the intuition. i thought you had it, and a lot of people doubted, but i thought had you it, sir. thank you very much. >> thank you. >> thank you for being a supporter. >> ccharif souki, pulled off the impossible, and he's just getting start. stay with lng, stay with cramer. wish you could be paying $1.99 per gallon? up next, a company that could make it happen. make green by going green. waste management, coming up next. [ with secret outlast, conquer your busy day. ♪ burn! let's do it! hello, jenny! ♪ thank you. [ cellphone rings ] working on it. ♪
3:23 am
hi. hi. how are you? [ female announcer ] outlast your day, any day, with secret's 48-hour odor protection technology. new secret outlast. [ female announcer ] from special occasions to unplanned thursdays, it's one good time after another. town house®. where good times reside™.
3:24 am
3:25 am
it's green week at nbc universal in anticipating of earth day this weekend. for once there, is go to celebrate. for years, i've been waiting for the federal government to use natural gas as a cleaner, cheaper, and domestically abundant bridge fuel for cars and trucks, and i've been disappointed by washington. but huge private sector companies are saving the environment to switch natural gas vehicles without any subsidies for the simple reason it saves them a fortune. waste management, the largest waste disposal company in the united states. i like the stock forages, the management's consistent execution and juicy 4% yield. they have taken the lead in the
3:26 am
nat gas switch. they have 1,400 trucks fueled by compressed natural gas and 80% of new truck purchases will be powered by natural gas. this is a practical company, they make something out of nothing or electricity out of trash via 17 waste energy facilities. in 2009, solar power, the whole shooting match, produced just over 800,000 mega watt hours of energy. but the waste energy business produced 8.6 million mega watt hours. more than 10,000 times as much as all the solar panels in america. i talked to david steiner on location at one of his company's natural gas fueling stations. it was an eye opener. all of the companies we follow, waste management is the most committed to using natural gas as a surface fuel for vehicles, talk to me about the benefits, why you have done it, and why are you a pioneer and others should follow?
3:27 am
>> you know, jim, the spread between natural gas and diesel is at historical highs, and from an economic sense it makes good sense. but for us, it's more than that, right? you get virtually zero air particulates, a reduction in greenhouse gases and a quieter operating vehicle. so what's good for our business also happens to be good for the environment. and that's what we're all about. finding ways that we can do things that are both good for our business, but also good for the environment. >> i've been trying to explain to people that you in particular have an inner city based business. not just about the cost. but you fight -- i know in new york, there is inner city asthma, diseases, have you been able to cut back on possibly being linked to those kinds of things. >> absolutely. again, virtually zero air particulates and we're headquartered in houston and obviously a big drive in houston. places like new york city. not only are those zero air
3:28 am
particulates, but these are loud trucks that are operating very early in the morning, so having a quieter truck is a good thing too. >> that's not one of yours. that's an arrival. >> wrong color. always look for the green truck, jim. >> i'm looking at $1.99. everyone in this country is saying you cannot reduce -- all the politicians, there there's no way to do anything to reduce the price of fuel in this country. i'm looking at $1.99. that's actual dollars. >> $1.99. somebody said you're filling gas for $1.99. can i fill my car up? it's a different kind of gas, cng, not the type that goes into your car. at $1.99 per gallon in comparison to $4 per gallon, you can see the benefits. >> you have committed to 80% of new vehicles? >> probably higher than that 90%. the only time we'll put a diesel fuel truck on the road where we can't get access to the fuel
3:29 am
some of we're building -- we'll build about 50 of these stations throughout the united states to build the infrastructure, but you can see this say public pump. this is not only for our fleet but other public and private fleets to use compressed natural gas. >> given the fact you are a pioneer, have other ceos contacted you about the feasibility and pay back? a lot of people say, the upfront cost is too much for the pumps and actual trucks? >> absolutely. one of the greenest companies in the united states happens to be fedex. i serve on their board, and we're actually talking with them about how they can move more toward cng. they have a different class of vehicle. they can electrify their fleet. have you forward-thinking ceos trying to do what's right for the business and right for the environment. >> waste has a particular production of natural gas.
3:30 am
now, at what point does natural gas going down actually hurt the company versus -- can you make it up? >> it's interesting. as we look at our business, more so after the last five years, we have a lot of different commodities we have exposure to. one of them natural gas. we use them to fill 1,400 trucks. hopefully one day all will run on cng. oddly enough, the price of electricity is tagged to natural gas. we have a natural hedge there. when prices go up, our fuel costs go up, but we make more at our waste energy plants. a little bit of a natural hedge there. obviously as we move more and more toward a cng fleet, we have to look for other ways to get that natural hedge to make sure not just natural gas, but commodities, that we are managing them right. >> about 9,000 gallons? >> about 8,000 gallons a year of diesel we won't use by using cng.
3:31 am
>> and most of the fuel in diesel is imported. are you changing foreign oil into domestic independence? >> we are sit owning the saudi arabia of natural gas right here in the united states. if we can use it to manufacture chemicals for transportation fuel, we should be using that for electricity, we should be using natural gas for all business. we happen to be the pioneer in using it in the transportation business. >> are you able to lock in these prices? for instance, i'm not going to point them out. some utilities say, jim, are you bullish on natural gas, it could spike to $4 tomorrow. why don't you lock in the price? how long can you lock in the price? >> it's hard to lock in from a financial point of view for an extended period of time. that's why we're trying to look at natural hedges. with waste energy prices tieing
3:32 am
to natural plants, and we've invested in oil and gas properties to get a natural hedge and our biggest resource, 270 landfills across the united states. only 100 to 120 of them are mining methane gas that we can turn into natural gas right? we have this untapped resource of natural gas. >> companies making methane are making a fortune right now. >> we do something neat with the methane in california. we have a lnd fill in the bay area that turns that to liquid natural gas. the very garbage those trucks are picking up goes to fuel those trucks. it's what we call an environmental closed loop. >> the best clean and green story i know of. last night, the federal energy regulatory commission allowed cheniere to build a $10 billion plant in plaquemines parish, but
3:33 am
will also export natural gas. we are importing oil in countries that you and i might think are sketchy, a word my kids use and we're exporting natural gas. does that make sense to you? >> we're sitting on a large reservoir. first, we should use it domestically to replace oil. let's tuesday to replace coal in power plants and disease nell our trucks. let's use it to power the chemical plants that, again, down in louisiana, are using natural gas that -- and moving these industries overseas to get access to natural gas. let's exploit it here in the united states to take advantage of this huge natural resource we're sitting on and create energy independence. as you know, 70% of our oil goes through the strait of hormuz. why wouldn't we have it go through pennsylvania? >> i'm familiar with the contrast.
3:34 am
it's not just natural gas, you extract value from a lot of materials. i know from looking at your presentations, have you a big presence in aluminum. 70% of the aluminum ever created is still being used. >> it's the story of waste management over the last five years. which is how do we extract value out of the materials we gather every year? you put them in a can and call them garbage, we take them and say how do we convert this to something with higher value? we look at it as materials that feed our business, that make us money and save the environment. >> now, got to talk for a second about electric cars. a couple of guys in the business of electric cars. they say we have to be careful. we will never touch their batteries, filled with toxic stuff. recycling nightmare. you are the biggest recyclers in the country. are the worries unfounded?
3:35 am
>> it's like anything else, if you don't manage it properly, of course, there is an issue. that's what we're in the business of doing. >> you need professionals to dispose of those batteries. >> that's what we do every day. our biggest resource as a company is not the 30,000 trucks we put on the road every day, it's the expertise we've built up in our workforce to know how to manage every type of material you can possibly generate. we can figure out that solution, that's the easy part. i don't think that's any reason at all to not eelectrify our transportation industry, in the light trucks and personal vehicles. >> tell me about this facility. beautiful, but obviously it's brand new i guess, right? >> yes. >> and where do you get the truck engines? these are something like $30,000 to build? >> we have our public pump and that's fast fill.
3:36 am
you want to come in, fill up your car or your school bus, or your police car, fut here and it will fill it up just like a regular pump at a gasoline station. on the other side of the fence, we have our slow fuel station. we have 90 trucks that run out of here every day. 60 of them are cng. you line them up there. come in at night, line them up there, and put in a hose and slow fill overnight. you can get more fuel because it creates more pressure, and you don't have to every day the driver doesn't have to sit and spend 15 minutes filling up the big tank. it saves time, it's good for the environment, and you are able to get that natural gas both into the private fleet and into the public complete. >> what a fabulous earth week story. david steiner, thank you for spending time with us.
3:37 am
3:38 am
3:39 am
it is time. time for the lightning round. buy, buy, buy, sell, sell, sell. hear this sound, the lightning round is over. are you ready, skedaddy? i'll start with charles in michigan. charles. >> caller: booyah, jim. >> booyah, charles. >> caller: dndn. >> too speculative for this guy. don't buy. don't see enough to warrant a purchase recommendation.
3:40 am
how about kathy in pennsylvania. kathy. >> caller: chipotle. >> buy, buy, buy. i like it. could it go down like apple did in a part beat? keep your powder dry and then buy, buy, buy. gale in new york. >> caller: this is ben and gale in new york. my son has a question. >> fire away. >> caller: currently invest in exxonmobil and he was wondering if chevron is better? >> chevron is much better. here is what the issue with chevron is. as i said to stephanie, here is the problem with chevron, it doesn't yield enough. i want to wait until it yields 3.5% and pull the trigger. and i got to tell you, not until i get the yield. scott in california. >> caller: how you doing today? >> real good. >> caller: a company like ddd and stratus, a 3-d printing company. any up and coming printing
3:41 am
companies to look at long term? >> somebody asked me on twitter about this, i have to do homework and come back to you. sometimes it's like that. and that's the conclusion of the lightning round. so every year my family throws this great reunion in austin. but this year, i can only afford one trip and i've always wanted to learn how to surf. austin's great -- just not for surfing. so i checked out hotwire. and by booking with them, i saved enough to swing both trips. see, hotwire checks the competition's rates every day so they can guarantee their low prices. that's how i got a 4-star hotel on the beach in san diego for half price. ♪ h-o-t-w-i-r-e ♪ hotwire.com
3:42 am
when you're training to be the best, you gotta eat the best. [ male announcer ] try the sweet n' smoky new subway smokehouse bbq chicken. merely 6 grams of fat. it's a perfect ten. subway... the official training restaurant... of athletes everywhere.
3:43 am
3:44 am
after today's monster rally, have we finally climbed the wall of worry that has been keeping the market down for weeks? or is this just a sign that market is more volatile, swinging wildly day to day, like last year, when the average would get whipped around on
3:45 am
every piece of european data. i know many of have you despaired that the great bull run of the first quarter had slammed into a general thomas j. stone wall jackson style barrier of european woes that could not be overcome. we faced an ongoing battle of the wilderness. bears came out of woodwork to explain that everything that looked boss po was negative and negatives were catastrophic. we get an amazing day like this one. you remember why we liked that market so much in the first place is the ral efor real? or the market simply become more volatile? tonight, off to the charts to cut thoort of the question, by looking at the cboe volatility index. it's known as the fear index, the perceived level of volatility and uncertainty. s & p 500, we like certainty. a fantastic technician and chief operating officer of optionpit.com.
3:46 am
last time, everything was smooth sailing and the fear index much lower. but the vix, it's back. moved higher, spiked to 22.40, before closing at 19.45. uncertainty is back and on the rise. for the vix to go down and stay down, could that happen? a period of decreased volatility, a period when the market could steadily chug higher. and we are finally in one those glorious periods. sebastian says the fear index moves in predictable four to five year cycles, alternating between low volatility and high volatility. check out this chart all the way to 1992. from 2008 to 2011, the fear
3:47 am
index very elevated levels, but it seemed to have calmed down. we're in a new cycle of low volatility. with today's big decline notwithstanding, some people worried we could be transitioning back to heightened volatility and it will pull out of the market. sebastian says are you wrong, don't do that. the vix behaves a certain way when it's in transition. and you can compare that transition moment which we're going off the charts. let's hop in the way, way back machine to 1997. take a look. you can see for the first six months of the year, vix pretty darn plat. and we see the fear index beginning whip around violently from july through september this is the transition, at the end of september, the vix quickly sells off before exploding higher, through a new period of volatility, and tech bubble. according to sebastian, the up and down, back and forth, a classic indicator that it's changing.
3:48 am
and this was a rare case in 1998, where when the fear index was higher, the market nevertheless went lower and the summer from 2007 to 2008, and april to 2004 to 2008 chart this transition lasted longer than the '97 one. but we still see some similarities. moving up and down throughout the period. a long day and then the fear index goes through the roof. it kicked in high gear in week, years and years the vix remained at sky-high levels. fast forward to 2011. take a gander at this chart. for the first couple months of 2011, with finally reached a moment of calm, vix staying at
3:49 am
low levels and then the fear index just gyrates over the course of march. we go up here and when we reach this number it is a gigantic move, remember this when the rate down grades and shutting down the government, and right as the market got really awful. and this same chart, another transition period in november and december. when the vix gyrated wildly. already at elevated levels this led to 2012 incredible rallies. this is the transition this is the transition bad, this is transition good. where does it end? let's tighten up the vix? should we be worried about a recent spike. even after the vix is down? sebastian says no. this chart looks nothing like
3:50 am
those transition periods when the vix was whipping around wildly. nothing. how about the spike this week? as you can see, each of the last four months, we have a moment where the vix pops in a big way before siding back down. the overall pattern, the overall volatility declines and, therefore, so is the fear. what would make sebastian worry. and the vix makes another view higher and manages to break above 21, and the next low stays above 15.50, then you might get nervous you are in one those awful transition modes. things looking good. and that's the takeaway. the bottom rhine, don't let the bears ruin your confidence. we are not headed back to a period of heightened fear and market volatility that will leave to a big decline. he says we're still on track for a long streak of low volatility
3:51 am
where you can come back in and stop being afraid and start feeling good about investing in stocks again. "mad money" back after the break. and it's very affordable. it was very delicious. could you please taste car insurance y? this one is much more expensive. ugh. it's really bad. let's see what you picked. oh, geico! over their competitor. you are a magician right? no., oh. you're not?, no., oh, well, give it a shot. i am so, so sorry. it was this close. i'm here to unleash my inner cowboy. instead i got heartburn. [ horse neighs ] hold up partner. prilosec isn't for fast relief. try alka-seltzer. it kills heartburn fast. yeehaw!
3:52 am
[ female announcer ] from special occasions to unplanned thursdays, it's one good time after another. town house®. where good times reside™. n it's one good time after another. change your life. my fourth grade teacher mrs. hoffman encouraged me to fulfill my potential. she wrote in my yearbook, "one day you'll be the star of an award-winning show on nbc!" how did she know that? the more you know.
3:53 am
you got to take a moment out and wish one of our long-time heroes warren buffett in his battle against prostate cancer. is he doing well, feeling good
3:54 am
and significanting around headquarters while dealing with what is a very treatable form of cancer. i'm sure many of you who owned the stock over the years or perhaps recently bought it because i have been recommending it as a recovery play on the rust worried about this illness. maybe some of are you concerned that you have invested in warren buffett inc. and if buffets it is incapacitated, you get nothing. i think that warren buffett is the financial version of steve jobs. very few have spent as much time as buffett measuring who should be at the hem after he departs. and, again this is stage one prostate cancer and is, as he says, not remotely life threatening. i have as much confidence in whoever buffett has confidence in as steve jobs had in tim cook.
3:55 am
apple has been terrific. we know people who take responsibility think through these things and think through them for you as a shareholder. some people are really good at business and really good at leadership and warren buffett is one. how about warren buffett, inc. i think it's berkshire hathaway inc. and after years of struggling with bets on housing, they are set to profit from the stabilization. they have a huge paint business. after years of subpar insurance results, berkshire will benefit from the relenting of the price wars and notice how well insurers have been doing. pipeline business is shining. and they are benefiting from a bountiful chemical psychle and his railroad, burlington, northern, about to benefit from recovery in worldwide trade and i don't think coal will offset positives. we want warren to get better fast, but we want to be clear if anyone sells this stock down hard on this news, it would be i think a mistake.
3:56 am
one that can be rectified by your buying berkshire hathaway into any buffett health related illness. stick with cramer. when i'm on the night shift. when they have more energy than i do. when i don't feel like working out. when there isn't enough of me to go around. ♪ when i have school. and work. every morning. it's faster and easier than coffee. every afternoon when that 2:30 feeling hits. -every day. -every day. every day is a 5-hour energy day. [ male announcer ] 5-hour energy. every day. [ male announcer ] new from subway.
3:57 am
slow-cooked chicken marinated in sweet n' smoky barbecue sauce. merely 6 grams of fat. -can't beat that. -it's smoking! subway. the official training restaurant... of athletes everywhere.
3:58 am
3:59 am
guys, those of you who don't like the market, have you been given a huge dispensation, the stock market up. don't like apple? take your chance, get out of your apple. don't like the banks, an opportunity to sell your banks. me, i think you should stick around. jim cramer, see you tomorrow.

91 Views

info Stream Only

Uploaded by TV Archive on