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tv   Mad Money  CNBC  March 14, 2013 4:00am-5:00am EDT

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to deal with the new levels we've seen. including today, when the dow
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gained five points and the nasdaq advanced .09%. i know even i, i've said i want to wait for a couple of down days after this winning streak simply because we haven't been up nine straight days in a row for the dow since november of 1996, and that -- ♪ hallelujah >> that's a stunning record to be tying and oh, my, were things different and so much better in the economy then. the economy, i remember it well. jobs were plentiful, easy to get. we had people hiring in everything from technology to finance, manufacturing, housing, retail was smoking. 1996 we were at the cusp of the technological revolution where the internet was just beginning to take hold of the consciousness of entrepreneurs. i was running my hedge fund back then and at the same time starting thestreet.com which remains an important focus for me now. i started the street because i
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envisioned a world where your personal computer married to a phone line could get instant information about stocks that you cared about. not just the ones that the day-old newspapers cared or even the television. the era where people would be able to buy or sell a stock with a key stroke using a personal computer with very low commission rates was just getting under way. what a remarkable time that was. the last time we were up so many days, okay? for the dow, that time. when you had a brand new pentium powered pc with microsoft windows and netscape browser and an america online diskette and a decent phone line you're about to become the greatest financial story ever told. the democratization of the stock market for everyone. it was in that context that we had the nine straight up days in 1996 and a benign time when our country was going from having high interest rates and low interest rates, but still plenty low versus where they were. the government ran a balanced budget which meant we were the strongest country in the world
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financially and whatever happened in the other markets was a sideshow. nobody really paid attention to overseas markets. it didn't mean much. there wasn't much international commerce. there were no financial crises on the horizon. mexican debt crisis had passed. the asian contagion where the stock markets fell apart, still a year away. let's just face it, the last time we were up this many days it was the golden age of investing. in fact, if i look back the only thing we really had in common between then and now was gridlock in washington. ♪ the government could get nothing done like today and it receded from the picture and simply didn't talk about it all that much those days, given washington's current powerlessness, we should be focusing on it much less than we do. however, we've got our own set of joys because there are some facts about stocks. not the economy, the stocks are
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very similar. first of all, we're also washington centric these days and so conditioned that the only thing that matters is tax policy even if taxes were so much higher in that roaring bull market that we're scared of their own shadows and they were hated or shunned by people who talk about it. case in point, retail sales. this morning it came out and they were terrific. you should not be shocked if you watch this show that we had the best retail numbers in five months, hardly a month goes by, and stores are telling me over and over again that the things are very strong and the thesis-mongering bears talk about gasoline is expensive and the expiration of the payroll tax holiday is devastating. the sequester is devastating, too. it is true that going over the fiscal cliff could have been horrendous and it destroyed confidence, but it certainly cured that. ever since then, the economy is better than anyone seems to want to talk about. we hear talk that it isn't. those bears endlessly drummed these negatives into our heads and they're thumb-sucking theorists. they're not schooled in the real world of companies as .
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they don't look bottoms up and talk to the walmarts and the costcos. they look top down and the bears are wrong. they'll remain wrong so long as they're focused on politics. if i had focused on politics in 1996 i would have had a horrendous year. same goes for you if you focus on politics in 2013. stocks are cheaper than they were in 1996 courtesy of the pessimism engendered by politics and the hang ore by the great recession. we see from the buybacks and dividend boosts and takeovers that they're deliciously low. corporate balance sheets have cash and any credit-worthy company can easily borrow to buy more stock or acquire other businesses and so can any individual for that matter, lowering any debt you may have on your home and the washington-fixated talking heads and may i add boring heads talk about when these low interest rates are going to end instead of focusing on how the money is being used to buy stocks by companies and by you.
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these eternal pessimists do not understand that a stock market that improves the value and the stability of a job leads to more retail spending like we saw today and more stock buying like we've seen these last nine days. you know what? they call it the wealth effect and it's a fact of life that gets overlooked if you spend all of your time hunting for the snipe of a washington grand bargain. i do hope we get a pullback. the dow is already up 10% for the year, the best performance since 1998. what has happened? what happened after a strong first quarter if we stay up this high? since 1950, it's only happened a dozen times. 11 of those 12 occurred prior to the year 2000. you know what makes me think? you can argue that a hideous bear market began in 2000. do you know in each of those years that we were up that much coming into the end of the quarter the index finished positive, how about 50? 80? how about 100% of the time and
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ten of the last 12 times we were up 8% and they managed to post double-digit gains in the year. let's put it all together. while there aren't many similarities between this moment and the last nine up days dow streak, when it comes to the economy, remember what tolstoy wrote at the beginning of his landmark treatise when it comes to stocks, anna karenina, each unhappy bear market is unhappy in its own way. maybe i was talking about families, but this is a true bull market like we had in the 1990s and it is true now. they are alike for stocks in the most important way. they make you a ton of money. and therefore your family's real happy. it doesn't mean every old stock goes higher. i still think the stocks at their all-time highs and i've been staying away from them. they're too high, but the stocks in tech and finance are the two largest sectors in the stock market and the s&p and the industrials and the oils are
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still so far off from their long-term highs and so cheap historically that they can be bought during the intraday dips that we have every day around here. it looks like we have to get our heads out of the washington sand because the bear can always and easily devour the unsuspecting ostrich. here's the bottom line. the bulls focused on charging higher, but as someone who used to own a bull, or rent one to service my cows, they get lazy. they ain't stupid and that's going to be your next opportunity to buy, so hop on it. get in the bull ring when the thing comes down and strap yourself on for the ride and be a happy family! joey in florida. joey! >> boo-yah, jim. >> boo-yah, chief. >> hey, what are your thoughts on high crush partners, symbol hclp. they produce sand used in the fracking process and they have rail infrastructure with union
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pacific so they can reach major shales and basins all throughout the united states? >> i think that -- i know the mineral company. i think that you mentioned two stocks i like. you can buy heckman if you want the straight out and union pacific if you want that aspect. i don't need to mix them. i like to keep them separate. this is peanut butter and jelly. i think it's union pacific and heckmann and that's what you should do. let's go to brandon in texas. brandon? >> boo-yah, jim! >> boo-yah, brandon. >> thanks for being informative and entertaining. >> when you're up this many days you hope people start catching on and maybe it's a good thing, go ahead. >> i have a question about the potential decision about the agriculture department buying the sugar up and artificially raise the price. how will it affect companies like hersheys and nestle? >> hershey, the wrapper costs more than the chocolate. nestle's shipping costs more.
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the sugar issue is not an issue. ethanol, by the way, i sat down with my friend dan dicker and did a video this morning for the street. ethanol is what we keep buying. the government is insisting that we use it. the bulls are seeing quite a run, but remember, the bull gets tired. i should know, i used to have one and when they lie down to rest, maybe they go down a little, jump on them and strap yourself in. "mad money" will be right back. coming up, flight path, the airlines have been flying high and with consumers looking for value in their vacations could a low-cost carrier like spirit continue to ascend? cramer's hitting cruising altitude, so don't go anywhere. his exclusive with the ceo is next. and later, rich and famous? looking to put together a portfolio that can help you live in the lap of luxury? tonight cramer's keying in on companies that attract an aspirational clientele. see which high-class stock could shine above the rest.
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last week i did something unprecedented on "mad money," i told you the airlines, a sector that i hated since i worked at goldman sachs in the '80s that they're all worth buying. these companies are no longer tearing each other apart with ruinous competition. sure enough the airline index hit its highest level since april 2007 and five hit new 52-week highs including u.s. airways which is up from where i recommended it last tuesday. they're doing a different kind of airline, a nimble profit-hungry player named spirit. spirit. that symbol is save. that's right, save for you home gamers. spirit and save, the small ultra low-cost no-frills operator
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that's racked up an incredible track record. spirit has been profitable every single year since the economy peaked in 2007, including when oil prices spiked $147 a barrel and when business travel went into a recession it didn't matter. these guys didn't skip a beat. neither of these stopped the company from making money and that's where we had more than a dozen airlines and bankruptcies in the united states and how does spirit do it in 2005? the company brought in a new ceo and he restructured the airline so it can make money in any environment. right now spirit has 45 planes and they use those planes more efficiently than the competition. keeping them in the air eight, 13 hours a day versus the same for jetblue and 10.5 hours for southwest. the company outfits its planes with more seats in the competition and the spirit airbus a-320 there are 178
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seats, so you have two pilots burning the same amount of fuel, paying the same landing fees and less leg room, but the ticket price is also much, much lower. plus unlike other airlines spirit unbundles everything. you want to check your bags and you have to pay for it. same with big carry-on bags and buying food and drinks. it has a clean balance sheet and $400 million in cash and that's incredible. it's also a growth story as the company plans to grow capacity by 21.5% year over year in 2013. they can triple the number of planes they have. the stock has more than doubled since they came public in may 2011. it's been trading at 11 times next year's earnings and let's talk ben baldanza. mr. baldanza. welcome to "mad money" ". >> thank you so much, jim. that was a great summary of our company. >> your business reminds me of a retailer that decided to make money where there's not a lot of competition. you're not giving the goods away.
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you're giving real value and the customer loves it. >> that's right. if we were a retailer we'd probably be a dollar general or dollar store. we like people who pay for tickets themselves and who are price sensitive and value conscious and want the lowest price to the total ticket and that's what we cater to. >> there are tears here and you are the dollar general which means, by the way, people go to you. i was at dollar tree this weekend, okay? and why do i go there? there are bargains and it is not the nicest store in the world. people are willing to sacrifice leg room and sacrifice fees for baggage in order to get value and that there is such a thing as value in your business. >> that's absolutely right and the use of fees is a little questionable in that when you buy a car and they charge extra for leather for the seating or
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they charge you extra for the bigger engine, do you look at them as fees or do you think of them as options? we think of them as options and they allow someone to go where they are going for a very, very low price and if they want something a little nicer they can pay for the option to do that, but if they're not paying for it, they're not subsidizing the neighbor. >> in the world of the web, what we know about amazon to get the best value over best buy and we find that spirit is the best value, isn't it? >> absolutely. if you look at d.o.t. data it shows that the total price people pay on spirit, the fare plus the fees or the options that they actually choose that are fee-based, the total price they pay is in almost every case less than their next best option on the other carrier. people fly spirit because they save money and we have low cost so we can make a nice margin on those low fares. >> truth to power, i like to say. you will never hear us say our goal is to have 150 flights a day in some cities.
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screw that. we just want to be profitable. this is you. this is what business people say. >> that's exactly right. in fact, when we talk to investors about our airline we start our talk with spirit's an airline that is run like a business and it's kind of unfortunate that in the airline industry we have to remind people that we are a business, but at spirit that's exactly the way we run the company and we're proud of that. >> southwest says listen, man, you fly bags for free? do i do better if i fly southwest than you? >> southwest's average fares are much higher than spirit's and what southwest really isn't telling you is that the cost of your bags is included in the price of your ticket. so the reality is if you check a lot of bags southwest may be a good value, but if you're not checking bags you're paying too much for your ticket. at spirit, we let you pay if you take the bags and we save you the money if you don't take the bags. so we think our process is much more customer friendly. >> in your conference call you addressed what i talk about on the show, the consolidation. even though i've been
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pro-consolidation your story isn't about consolidation at all, it's about where they're not! >> yeah, you know, consolidation in the industry has stabilized the industry in a lot of ways. it's a reduced total capacity and it's reduced the number of competitors in most markets and that has created a more stable environment for the industry, but it's largely as unaffected spirit's growth. we have a much lower cost structure and we when we enter a market we bring much lower fares than the market is typically seeing and we tend to add capacity to carry the growth we create. so we're not out there to take share from other airlines. we're there to grow the traveling market base and we carry that growth. so while consolidation is good for the overall industry we're independent of that and will continue relatively independent of that.
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>> which brings me full circle when i first started buying stocks in the early '80s. i bought people express and the reason i bought that they were a low-cost producer. they were just trying to take share from the higher cost producer. is it different that the take share game is a sucker's game? >> well, it is. what you have, one of the things that's true in the airline business and you know this, jim, average costs tend to be very high and marginal costs tend to be very low. so if the seat's going to be empty and it will be available anyway, they'll sell it for any price and that creates price competition and that's why if you're in a share steal game, it's hard to make that work because everyone will try to compete on the margin with you. >> one thing we know, the dollar generals and dollar trees, you're making fortunes and there's room for everybody and ben baldanza, ceo of spirit airlines. congratulations on the business model and the great performance of your stock.
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good to see you, sir. >> thank you so much, jim. >> symbol save. i like the airlines. i have to admit, they're not very well run. this one is an airline that's well run and therefore i think it can go still higher. s-a-v, spirit airlines. stay with cramer. coming up, rich and famous? looking to put together a portfolio that could help you live in the lap of luxury? tonight, cramer's keying in on companies that attract an aspirational clientele. see which high class stock could shine above the rest.
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>> just this morning we got some excellent retail sales numbers from the commerce department showing 1.1% increase from january to february. that's the biggest rise in five months and what was that gasoline thing, huh? everyone was fretting about higher income taxes for the rich and higher payroll taxes for everybody and not to mention the sequester. is that supposed to be hurting the economy big? at the moment there's a much more important metric to follow and i've been wedded to this concept on mad money and that's household wealth. right now the price of your home is rising just about everywhere. almost 90 million people in the country own stocks and the stock market's on fire.
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there's no question that on average the consumer is feeling wealthier. when brian interviewed him today and he's the home depot ceo, he said the same thing, why don't we listen to him. but there's wealth and then there's wealth. i reference the stock work of leo tolstoy earlier, and i'm a firm believer in some of the writings of f. scott fitzgerald that the rich are different from you and me, with, in this case, me. i want to get a read on how the rich are feeling. not that i care about their feelings, if they aren't happy, it's their own darn fault and they have a lot of money and there's a whole tier of the economy devoted to selling things to the wealthy or those who want to feel wealthy. aspirational. a lot of people want to feel wealthy, what can i tell you? they're not all flying spirit. on february 25th we wrote up the gatsby index on "mad money," it was to gather the end of the high-end consumer and it rallied 1.5%, versus 4.4% for the s&p,
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infinitesimal. however, the more i think about it and the more i read your tweets @jimcramer on twitter, i realized there were seven stocks, michael kors, ralph lauren lululemon, whole foods, panera and starbucks. we have some ritzy foods and fancy clothes covered, but that's it. we need more rich person diversification around here. so tonight i want to introduce you to the new and improved and expanded gatsby index in order to give you a better snapshot of the 1%. we can keep coming back to this index and see if they're rich and if the thesis holds up in this market. we're adding toll brothers. issued a sell on it tonight. huh? that's the highest end home builder out there. listen, where did gatsby live?
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he had an enormous mansion out there. bronson corporation, the number one maker of recreational sports and saks, you ever been to that shoe department? coach, for a more diversified view of expensive accessories. tiffany's because the gatsby index without jewelry? meaningless. estee lauder for fancy beauty products. that stuff costs a lot. i don't wear it. so what does our definitive gatsby index look like? you already know the high end food player. that's whole foods and you pay top dollar for the natural and organic seal of approval. then there's starbucks, the incredibly well run coffee shop, and then panera bread, the bakery cafe chain that's as close as you can get to luxury, and i like that 417 calorie chicken salad, hold the chicken, maybe.
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we have two fancy shymanskiy department stores, nordstrom and saks. nordstrom has been a laggard but the company gave weaker than expected earnings guidance in 2013, but the whole reason the whole stock disappointed -- >> boo! boo! >> management decided to invest much more heavily in building out new nordstrom rack outlet stores and the company posted a 3.3% increase, and their sales hit record levels and they have three straight years of double digit revenues and earnings growth. management has an aggressive buyback, they can retire 10% which you can join if you have actionalertsplus.com. 45 saks and the fifth avenue locations and they're closing some still and saks is the quintessential high-end department store and in the latest conference call saks said that the high end is stabilizing with the boost from the wealth effect offsetting the impact of
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higher taxes, again, the "mad money" thesis and then you have the retail names, michael kors with ultra fast steroidal growth. it has pulled back from $65 to $58 and change where michael kors, the man himself sold a huge slug of stock. do you know why i think this pullback is a quintessential buy? and this lululemon apparel store where people buy anti-stink pants and it is going to 250 down road and that's not even counting international opportunities and it's heavily shorted. ralph lauren is a master of high end apparel brands and these stocks are down. we have interesting opportunities here and today i want to add coach and tiffany's to the retail segment of the
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gatsby index. coach has made the difficult and some say treacherous transition from being a high-flying growth to a value stock. the way you usually make the transition is the way these guys did, having fallen some 30 points from his high and now trading less than 12 times earnings is coach. the company bringing in a new ceo at the beginning of next year. maybe some people are worried about that. lou frank should stay on as chairman and coach could take itself private or be acquired by a foreign luxury apparel. j. crew took itself private. it would send up the stock big. tiffany, the renowned jewelry retailer is another one that's had a tough year in 2012 and tiffany's been roaring and i don't see a single good thing happening and ever since the beginning of 2013 the disappointing holiday sales in
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january makes me think the bar might be set low enough especially with global luxury tourism starting to come back. i think it's a rumored takeover target and the fundamentals aren't good enough to justify where this is. we're just doing an index. estee lauder. this is a premiere player in cosmetics. estee lauder all sort of prestige beauty products has allowed them to transcend its earnings growth category and a stock that's a point and a half away from its heights, it belongs and a yachter a motor boat. i'm calling him discretionary, unless you have an item or something, and bowling and a rich guy's placement. this stock is on fire and it's up 18%, and it was in terrific shape. don't forget sandy got the insurance and you went and bought a new boat and up 64% since we recommended it in january of last year.
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our final addition is toll brothers and it's one of the good plays on the housing recovery. and i like bob toll so much, he's the chairman. make no mistake, this is a luxury home builder, the average selling price for a toll house is nearly $570,000. toll reports its latest quarter, it's a little lumpy and the stock sold off, but this is a case that no one did the darn homework. including the fact toll is raising prices in 60% of the communities and it is 49% rear. since then the stock is playing sideways and they remain horse bound in that side and the next quarter will be strong because they have some very big apartments coming on the market. here's the bottom line. so far our original gatsby index of michael kors, ralph lauren, lululemon, whole foods, starbucks, panera and nordstrom's has lagged the s&p
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but if they're truly going to keep track of the high-end consumer that's why i am adding the toll. i'm adding the bc, i'm adding the saks, the top and call it the great gatsby index. we will come back to these 13 stocks, lucky 13 and we'll see what they tell us. >> michael in utah. >> thanks for taking my call. nike, nke, i just wanted to know if i should buy and hold onto it for a while. >> dick's reported a not so great number, and right now you look at some of the china plays trading in the minerals it couldn't be worse. let's take a pass on nike and i'm willing to miss a point or two on the upside. let's go to zack in california. >> boo-yah, cramer . >> fabulous stuttering boo-yah from the west coast? >> what have you got? >> boulder brands. it's now roughly nine. do i keep or sell? >> i like hain, it's cheaper
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than that stock. i think the shorts are on to become it -- he's got a thing that's going on where everyone is blocking his shots like mutomobo. but i think he's going to win. let's go to marty new york, please, marty. >> jim, how are you? >> how about you? >> i would like to think of what you think of the upside potential of limited brands, and also, what about the possibility of them spinning off the sooning
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victoria's secret and bath & body works? >> the lifestyles of those that, and those who want to be and it's 13 names of living large and it's going to tell the tale. don't move, lightning round is next.
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all right, cramericans. the eighth anniversary show is coming up this friday and i still need to hear from you about your favorite moment. we've already received some great responses from you including this tweet somebody went to @jimcramer on twitter and this was @galawnpro who says just voted for the rant, #madmoney @jimcramer. i can't recall. >> bernanke needs to open the discount window. that's how bad things are out there. he has no idea! >> cramer -- >> i have talked to the heads of almost every single one of these
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firms over the last 72 hours and he has no idea what it's like out there. none! and bill poole has no idea what it's like out there! my people have been in this game for 25 years and they are losing their jobs and these firms are going to go out of business and he's nuts! they're nuts! they know nothing! >> i don't really remember that. head to madmoney.cnbc.com and put in your vote celebrating eight years of "mad money" and now, now it is time for the lightning round. sell, sell, sell. play until we hear the sound and then the lightning round is over. are you ready, skee-daddy? let's go to andy in massachusetts! >> how are you doing? >> real good. how about you, partner? >> the stock is -- what do you think? >> at this point we wait until the deal finishes and then we'll swing down and pick up some of these. stuart in new york! stuart!
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>> hey, cramer, you're the pope of wall street. my winner is micron technology. >> okay. >> a lot of people made a lot of money in it. >> absolutely. i want to congratulate the pope and i wish him the best of luck. it's very exciting. micron is on a tear. it is absolutely on a tear, but that doesn't mean it's high quality merchandise. i think the modern man can take it to $12 where i want to -- sell, sell, sell! carolyn in kentucky! >> hi, jim. thanks for taking my call. >> my pleasure. >> i want to buy some stock in cvs caremark. what do you think? >> i think that's a great idea. buy, buy, buy! the stock didn't go down and that's what i call power of positive thinking. let's go to jerry in texas, please. jerry! >> hey, jim, thanks for taking my call. >> no problem. >> i bought magic jack, ticker symbol c-a-l-l, at about $18 last november and it's declined steadily and now trading at $14. should i hang in there or cut my
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losses now? >> you know, this is one that i haven't been able to figure out the business model that well so i'll offer you a definitive don't buy, don't buy. i want to go to susan in california. susan. >> hey, jim, i have my grandkids here. say hi. >> hi. >> hi. >> we've been watching you since 2007. i got cummings for your recommendations. >> thank you. i think cummins you stick with. >> buy, buy, buy! >> and everybody is freaking out about it and the truck builds have been terrific and i think cmi goes higher. i don't want to sell it. i'm going to hope in new york. hope! >> hi. >> hi. >> how are you? >> fine. how are you? >> i'm good, thanks. basically, symbol pcrx. >> i know this company. i know it because i've been hit by guys in parsippany where it's located saying i should have recommended it and you know
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what? they were right and now it's run too far and i think they ought to take some profits. that place is right in front of me. like the purloined letter. let's go to joe in florida. joe! >> hey, jim, it's joe from new york. how are you doing? how are you doing there, star? >> doing great. i sent an email about jc penney and since then it's been hitting $17 to $20 in the midterm. >> i can't recommend the stock whose fundamental i don't believe in and that includes jc penney, and that, ladies and gentlemen, is the conclusion of the lightning round! "the lightning round" is sponsored by t.d. ameritrade.
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we've seen an amazing winning streak in this market. household names like procter & gamble, kellogg reaching all-time highs although i think you should schnitzel them, but if you've been listening to me then you know you shouldn't be blindly chasing these stocks. you need to look at those that haven't run yet, finance and tech.
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keep your mind for the right opportunities and yes, you need to be diversified and that's why it is so important we play each week, preferably on wednesdays. you know the drill, you call me and give me your top five stocks and i tell you if you need to mix it up and why don't we go to twitter where we can sample a very good irish whiskey class and broke down the winners. and actually had one. come on, man, it's night school. we'll go to @johnnybabes. also known as johnny b 1329. he asked jim, am i diversified? he has abbott, all right. he's got berkshire. he's got conoco, mcdonald's and pulte home. abbott, my charitable trust owns this and co director and on cnbc all of the time, she says we're still okay and it's kind of like needs a bit of a pulse there and mcdonald's is breaking out in
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the genuine wall street gibberish for 100 and berkshire hathaway and conoco oil and gas. home conglomerate, restaurant, drug, oh, man. johnny b. good. >> ♪ hallelujah >> let's go to paul in connecticut. >> a big boo-yah from connecticut. >> we have people in the staff here is all smiling because they're from connecticut. what's up? >> i have a question to ask you, i want to thank you for motivating me and giving me excitement to get in the game. i have a roth ira and it contains pepsico, pep, merck, mrk, oracle and emerson electric, emr and sun corps energy, su. and i just want to be diversified, but i wanted your opinion if i should dump sun corps energy and switch to the mondeliz international?
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>> no, keep the sun corps energy and once a favorite of gary kaminsky who i will miss a great deal. oracle bought that, and i think we have a good number last week and pepsico is a beverage company and snacks and emerson industrial and we have oil, we've got industrial, snacks and soft drink, carbonated and we've got water, too, and we have tech and we have drug. i don't know. that seems darn good to me. i wouldn't make any changes. >> let's go to john in wyoming. john? >> all right. i have center point energy, which is cnp. bristol-myers squibb, which is bmy, ge, ge in waste management and it's wm and kellogg. am i diversified? >> john came to play clearly from laramie? a national park, it will close because of the sequester they're worried about. we have cereal, okay?
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we've got consumer packaged goods and bristol-myers, my charitable trust owns, waste management and center point and high-yielding utility and you have utility, a waste company and a food company, man, what have we got? i have to get to wyoming. they have horse sense! stay with cramer.
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it's not too late for apple to buy netflix. sure, the stock's been up on a tear up $100, and the facebook announcement today and the sharing, well, let me just say it makes netflix the perfect fit for apple if the company is on the hunt. hey, why? apple's been lacking social. you need the holy trinity of social, mobile and the cloud to triumph in the brave new gadget world. he taught me that sales force to come. i know apple's been tantalizing with the idea of the itv being blown out. i simply did not believe the cable companies were willing to comply with apple which means ceding customers to them to have a successful itv iteration. it's what walter isaacson, steve jobs' biographer told me last fall. if isaacson thinks that even jobs couldn't get it done because you can't roll the powerful cable companies like the record companies as it did for itunes and you know this current management can't do it
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and jobs is a bully and they were simply tough negotiators and neither bullying nor negotiation will give them what they need and they're the names of 27 million compliant households in the country. netflix and those households don't care if they're being built by netflix and being able to rent moves on itunes or from netflix directly. you have netflix embedded in every tv clicker and it's what they need so quickly and it does need to do that to get it going. here's what's more important. $10 billion, and right now that $10 billion isn't doing anything for them and it earns almost no return because low interest rates mean you can't make a good return. in cash, the company hasn't been opportunistic at all in taking advantage of the huge price break to buy back the stock. hey, apple, the stock's down a lot. they haven't been using the playbook since the bottom of 2009 when worldwide, which has returned every dollar it could
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to shareholders to aggressively raise dividends and i know apple is up a lot from the bottom, but you know what? this is a what have you done for me lately business and like it or not. netflix, they've already managed to build a fabulous bridge with the entertainment companies and many who need and have to have netflix, and everyone's always talking around the water cooler like the microwave and it's virtually impossible to catch up with the via and netflix subscription and reid hastings and one of the most capable ceos of our time. funny guy. it's pretty simple. apple needs growth and it needs it in a visible, red-hot way and nothing's hotter than netflix and only the management would miss this opportunity that i'm giving them, right now. one that every other company would have to pass on with the tremendous rally in netflix share price and it wouldn't mean bubkes to apple.
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plus, if you take the longview, netflix isn't back to where it was two years ago when the stock was at $204 and everyone was excited about the developments that are transpiring right now including the original content and the facebook integration and it's worked through the execution issues that caused the stock to crater and now it's a much more proven story which is what people thought would happen during the last big run is actually happening. the warnings from the bears have failed to come true. tim cook better act fast because the longer you wait the more costly it will get for apple. can you imagine if apple announced a gigantic buyback on friday after the samsung galaxy launch? do not pass, just collect the $500. stick with cramer.
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