Skip to main content

tv   Mad Money  CNBC  July 26, 2024 6:00pm-7:00pm EDT

6:00 pm
>> tim. >> great numbers by slb this week. oih looks very strong. >> karen. >> well, next week going to the dance with the girl that brought me, meta. >> bonawyn. >> i think the move is overdone, alphabet. >> thanks for watching "fast money." have a gatre weekend. "mad money" with jim cramer starts right now. >> my mission is simple. to make you money. i am here to level the playing field for all investors. there is always a bull market somewhere and i promise to help you find it. "mad money" starts now. >> hey, i am kramer. welcome to cramerica. friends, i am just trying to make a little money. call me at 1-800-743-cnbc or tweet me at jim cramer. the stock market is not always a friendly place.
6:01 pm
it can be painful. it can be just downright difficult. there are tons of big picture problems that can derail any rally. problems we do not have any idea about until they had a smack in the face. that is why i am so adamant about trying to make you a better investor. i want to teach the tricks of the trade so when the market gets negative, which it always does, so when it becomes hot, you will know what to do. i tell you about this constantly when you join the cnbc investing club. patterns that have worked for me and what hasn't. i have put together a set of rules, rules designed to protect you from the worst mistakes you can make in both
6:02 pm
good markets and bad. rules that now make up the investing club guidebook. and i am sharing that with you. as much as i might seem like an unhinged lunatic, maybe not as much as before, the truth is i am all about discipline. you are going to make mistakes in this business. it is inevitable. but if you stick to your discipline, if you stick to the rules, that should help you minimize your losses and maximize your gains. so let's talk about this one. i use this phrase constantly. why should you try to identify the stocks of the best run companies with the best prospects in each industry? let me flip it on its head. why is owning it even a question? when you're shopping for a car, due by the best you can afford? we pay for the highest quality brand because we know a brand and a good brand signifies reliability. it tells us that we can expect a higher level of service, a quality of ownership that will
6:03 pm
make your drive safer for years to come. no one would ever set out to buy a worse car. would they? so why is it that so many people seem to feel differently about the stock market? the penny stocks that are constantly talked about on twitter? it is the same reason so many people throw their money away buying garbage cryptocurrencies. many of us cannot resist what we perceive as a bargain, emphasis on the word "perceived." cheap, low-quality companies are more likely to lead to losses than to gains. now, let me be clear. i love bargain-hunting. but i only want genuine bargains where the actual underlying merchandise is actually worth something. you know what is not a bargain? buying junk merchandise just because it seems to have a low
6:04 pm
dollar price. skedaddle. if you love blah, blah, blah, then you will love procter & gamble. it is the kind of long-term strike that you can count on. it is an industry leader with a long history of dividend boosts. what makes a company best to breed? more like the late great supreme court justice and what he wants at about pornography. i know when i see it. i am talking about well-managed high-quality companies with great bounties like procter & gamble. if you can get proctor and gamble on sale, thence bill pay up for something similarly great rather than picking up penny stocks just because they seem cheaper but they are not. remember, at the end of the day, there are very few genuine bargains out there. their stocks may look cheaper
6:05 pm
but that is because they deserve to be cheaper. the businesses are worth less. do not worry about paying a higher price for a best-degree business. it may seem more expensive but you are also buying peace of mind. a great company like nvidia for instance always seem superexpensive. doesn't it? but the stock just keeps charging steadily higher like it has for a decade. now, once you find yourself a best of breed company i have got another important role for you. high-quality companies represent value. and giving up on value is a sin just because the stock does not act so well for the moment. i see so many throwing in the towel just because their stocks are not working right now. it is driving me nuts. well, patience is a virtue in this business. if you have a reason to believe in a business, do not dump it stock just because it is not getting any traction for the moment. you are not a hedge fund
6:06 pm
manager for goodness sake. you do not know how many investors are going to pull their money out from you. so just indulge yourself. you can afford to waive and let the stories play out. i say this because you will be tempted to sell even best degree stocks if they do not do something in a short period of time. this market can make it very difficult for you to stick to your guns. when you own a stock that is going down, you are going to feel compelled to give up on it but in many cases if you have done your homework and have conviction in the underlying business, that urge to sell will be a mistake. and, look, it happened to the best of us. in 2016 i did an interview with tim cook, the ceo of apple just after the stock have plummeted to $23 in a very sharp rate of time. i looked at the stock.
6:07 pm
a very low price. i looked at the service revenue stream. and, yes, the cash position value sheet. what the heck is the point of selling the stock of the company that sells some of the greatest most predominant products in history. they are always out there saying the company is behind. surveys of apple's survey suppliers as if the company is in decline. they do not give up. they do not go away. telling you to buy apple in $23 because it was a wonderful opportunity to pick up the stock at a major discount. it is a best-of-breed company so when the stock goes down, you know it is getting cheaper. a class example of giving up on value, and you would want to miss one of the biggest moves of our lives? there are no apologies, at least that i know of. law, in late 2022, many were tempted to make that same
6:08 pm
mistake with nvidia. but i learned my lesson from apple so we stuck with nvidia and the stock eventually tripled in a little more than seven months. do not be afraid to play for best-of-breed stocks. they are also much less likely to blow up in your face. the best-of-breed premium is worth it. do not let the bear scare you away. even if the stock is temporarily broken because patience is a virtue and giving up on a value stock is a sin. let us go to mandy in maryland. >> jim cramer, how are you? >> i am fine, mandy. how are you doing? >> hanging in there. thank you so much for taking my call. i love your show. i watch it. i breathe it every day. thank you for everything you do. my question is if you have
6:09 pm
$5000, how do you invest? >> okay. i have said for your first $10,000, and not before then, you should put that money in a s&p index fund. only after that because i care about diversification after that can you start buying individual stocks. how about jerry and majorie? >> hey, jim. thank you for taking my call. you stressed diversification all the time. but my investment strategy is mainly gross. things like growth, recession- proof stocks, and dividend stocks have all backfired for me. i prefer tech stocks. i currently have about 20% in cash, and i am waiting for a downturn so i can buy some more. a fairly diverse portfolio even though it is technology-
6:10 pm
dominated. what are your thoughts? >> look, i think we have to understand there have been times in our careers where that strategy has been very bad. so that is why you can have a couple tech stocks but if we get something like a 2000 or even 2008 or in 2021 where we then began to roll over i am worried about your position. so let us be a little more careful. a little less concentrated. please do not be afraid to buy best-of-breed stocks. do not let the bear scare you away. giving up is a sin. on "mad money" tonight, i look at one quarter of the market to help me get a sense. what it is and how you can learn from it, too. i will give you my strategy for handling whatever the market throws at your portfolio and rules for investing that may seem obvious but it is an easy step to help you design a high-
6:11 pm
quality portfolio, so stay with kramer!
6:12 pm
6:13 pm
with so much entertainment out there wouldn't it be great... ...if you could find what you want, all in one place? show me paris. xfinity internet customers can enjoy the ultimate entertainment experience and save on some of the biggest names in streaming, all for just $15 a month. get the fastest connection to paris with xfinity. that can be sold. we learned we
6:14 pm
could sell all of our policy, or keep part of it with no future payments. who knew? we sold our policy. now we can relax and enjoy our retirement as we had planned. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. >> how can you keep track of a confusing market? let me give you some advice that barely ever served me wrong. two things to watch. one macro, and that is the big picture, and one micro, and
6:15 pm
that is company-specific. you have to keep your eye on bonds. i know the bond market is boring as all get out. it is much more than the stock market. more overall, it shows the overall direction of stocks. from my old hedge fund, i will call in the same way. i had to be away from my desk and would say, hey, where are the bonds? that is how much it mattered on a day to day basis. yet stock market investors seem to forget the bomb market rules over the time. they forgot in 2000. they forgot it when the fed raised interest rates 17 times and then locked it up to lead to the financial crisis, signaling the worst financial downturn since the great . best time in years to by the industrials and even the homebuilders. look, it should come -- it
6:16 pm
should never come as a surprise to you that long-term interest rates -- you have got to know that. you simply must know what the bonds are doing at all times. now, bonds can punch your portfolio in the face. the yield curve. yes. where the two year is. the 10. the 20. the 30. that is why i say do not forget bonds. always keep those prices in front of you if you want to know what might be happening in the future. bonds are the true competition to stocks. the competition i most fear. when short-term interest rates set by the feds go sky high, i'm talking about high yields, you have to bet they will sell off because they cannot give you yields big enough to compete with the fixed income alternatives unless they sell off big enough that they are once again legitimate competition. who want to suffer horrible capital losses for a 5% or 6% yield. when long-term interest rates rise, the one to watch as the 10 year treasury. then you have to worry that the
6:17 pm
entire stock market will be worth less windy stocks rise. this can become a giant. of course, you should be especially worried about rising long-term rates like we saw during the great bear market of 2022. elongated assets like equities. futures earnings streams have less purchasing power. and that is really especially true for growth stocks. higher interest rates do not just make bonds more attractive. they also let banks lend and that puts a damper on the whole economy. for a long time we had an ideal environment for stocks. we had low interest rates. that is just fantastic. then the pandemic hit in the world turned upside down with the worst inflation in 40-odd years. the federal reserve lowered the bull market. let me put this another way.
6:18 pm
i am playing basketball. if you just watch the man with the ball -- let us call it a man with the ball sitting group -- then there's no way to hit the basket. the man without the ball can determine the action of the stock market so keep your eye on the ball and the bond without it. on the micro level, the company specific level, you need to be very cautious when you see unexplained resignations by key executives. to put it bluntly, when the chiefs resigned, you shall, too. yeah. when you see a ceo step down for a noticeable reason, you should assume something is wrong. i say shoot first and ask questions later. i have sold stocks because the ceo resigned. and if i turn out to have jumped the gun, i simply buy back the stock. but in my whole investing career, how many times can i recall a ceo left in a stock
6:19 pm
was still worth buying right then? on the top of my head, i have one. visa. they are just that uncommon. why? simple. ceos do not quit for personal reasons. not if they want to keep their bonuses. cfos do not quit for no reason either. you do not get to be the chief executive of a company by being devoted to your family. they give up a great deal of what people enjoy most about life. family. friends. vacation. competition for these positions is so serious and fierce that when you finally land one you do not get up and leave for no reason. when ceos leave for undisclosed personal reasons, it is almost always because something is wrong at the company, even if it is something they did. when high-level people quit, cell. a tiffany about climbing k2. you know what, there are
6:20 pm
exceptions. at some point somewhere a ceo really does step down just to spend time with the kids but when you're investing in the stock market, it is not the exception that matters. i don't care because most of the time selling will be the right decision. this is the kind of role that helped keep me in the game at my old hedge fund. it is all about helping you avoid losses. and one way you do that is by not taking unnecessary risks. like companies where the ceo just resigned for undisclosed reasons. if you want to get a handle on the stock market, you should watch what is going on with the boss, but it is something that people quickly forget once the economy resembles some normal and see. high-level executive resignations equal sell.
6:21 pm
you are bountiful. your skeleton can support two times your weight. it's in your nature to stand strong. supplement your bones with high-absorption magnesium. nature's bounty. it's in your nature.
6:22 pm
best thing i've ever done. that's what freddie told me. to change my life, it was the best thing i've ever done. really? yes, without a doubt. nature's bounty. i don't have any anxiety about money anymore. great people. different people that's for sure and all of them had different reasons for getting a reverse mortgage. but you know what?, they all felt the same about two things they all love their home, and they all want to stay in that home. if you're 62 or older and own your home, you could access your equity to improve your lifestyle. a reverse mortgage loan eliminates your monthly mortgage payments and puts tax-free cash in your pocket.
6:23 pm
why don't you call and find out what a reverse mortgage can mean for you? call finance of america and get your free, info kit. call this number clem's not a morning person. or a...people person. but he is an "i can solve this in 4 different ways" person. you need clem. clem needs benefits. work with principal so we can help you with a plan that's right for him. let our expertise round out yours. i'm andrea, and this is why i switched to shopify. it gave me so much peace of mind. if we make a change, my site's not going to go down. and just knowing that i have a platform that we can rely on, that is gold to us. start your free trial today.
6:24 pm
>> for you to be a good investor, you need to be a realistic investor. there are far too many people in this game are not too realistic. either they allow their
6:25 pm
emotions to cloud their judgment or they allow themselves to be surprised by the inevitable. stocks can indeed go down. there are been pullbacks over the past 20 years. you think we get used to the process of watching her stocks drop in price? something can happen and it will happen. if people were a realistic species, you might assume we would say something like let us prepare for the inevitable because it could be right around the corner. but besides for the permanent bears, they think it is a total shocker. the kind of thing that never happens. so every time the stock market goes down, there is a huge contingent of people who seemed stunned. to me, corrections are like the rain. i know the rain is inevitable. so do you. i am prepared for it. when the rain comes, i am ready. i have an umbrella or coat and i stay indoors. certainly we are going to get one so it is best to have some cash ready on the sidelines
6:26 pm
just in case that time turns out to be now. of course, they happen unexpectedly unexpected times. they are preceded by terrific days during which we made lots of money. in january of 2018, the stock market was higher and people were acting like we had this unstoppable rally but in february they got obliterated. in 2021, coming off a magnificent rally, practically everyone was making money because picking winners for just so darn easy than the home market rolled over and it took months for people to realize, no, this was not some temporary thing. it was a bear market for the last year. but there were some terrific days in 2021 before everything fell apart. the moment when nobody else is concerned. that is when we get these brutal, supposedly unexpected declines. i used to have a role in my hedge fund. if i made 2%, i knew i was too
6:27 pm
exposed. i knew i was too long, as we say. i knew my portfolio would kill me if we got caught in a storm. i simply had made too much money all at once. so as the market lifted, i pulled back. sometimes fiercely. i had to prepare for that big down day just around the corner. sometimes the corrections never came. i would have to swallow my pride days later and maybe even buy everything back i had sold but when we did get hit my hedge fund outperformed by so much that my client said i was a genius. i was not a genius though. i was disciplined. plus, i had been able to use that money to buy all sorts of high quality stocks at their weakest. we may not be able to predict when a storm can strike but we do have dramatic readings that can help us immensely. where should you get your weather apart? i have got one.
6:28 pm
i like to follow the proprietary market-edge oscillator. it tells us when the market is getting overbought or oversold. whenever this oscillator, which you can subscribe to it in the investing club at a pretty good deal, 5 or above tells you it has come up too fast. to me, a +5 reading means you need to pull back aggressively. what i mean by pull back aggressively? what do i mean? a big if. you may want to ring the register. a nice portfolio. we always, always, always advise you in the club. we always teach you how to sell discipline. then you have a ton of money so you can buy back her favorite stocks at lower levels when the storm hits. you should be doing something to raise cash in the oscillator. when the oscillator hits -5, it means the market is incredibly oversold and it is time to
6:29 pm
>> buy. buy. buy. >> it is a good place to put your cash to work, and some of our best work with the travel trust has, we tiptoed in down 5 on the oscillator. and when it hits -10, like where it was at the market bottom of october 2022, you think it moves higher so now we hold our noses. this tool can help you avoid bombs. you can sell something in a high level but there is no storm ever higher, which means you underperformed the averages because you have too much cash. i will take that risk. i will admit it is a real risk. using the same methodology i just described my hedge fund, i give my investors a 24% compounded annual return, and about three times what the s&p
6:30 pm
500 would have given them over the same period. that is pretty strong evidence that avoiding evidence on down lost days more than makes for missing some big gains on the big up days. you need to stop yourself from making investment decisions based on misleading emotions, and the worst of those emotions is hope. whenever i hear the word hope, as in i hope this doomed stock will come back so i can sell it without taking a loss, i get angry. always remember, hope should never be part of the equation. do not hope for anything. hope is an emotion, pure and simple. every stock you own ecause you hope it goes higher is another position in your portfolio that is not being filled by a stock that you believe that will go higher as opposed to hope, and yet i hear hope constantly. that is fine if you're talking about religion. it is good if we are talking about sports. you know those badminton and
6:31 pm
basketball teams? they keep the players motivated to hope. but here hope is a mistake. especially when talking about stocks and trade in the single digits. i bought the stock at 5. now it is at 4. how hard could it be to go from 4 to 5, right? wrong. no company ever sets out to have a single digit stock. most will fight tooth and nail to stop her from going into a single digit territory. it has already rendered a very harsh judgment indeed. when you let hope become part of the equation you could end up holding these low quality pieces of paper waiting for something that will likely never occur. cut your losses and move on to a stock that you can actually see that could go higher under its own power. not because of hope, because hope cannot be the reason. of course, there are times when
6:32 pm
hope pays off like in 2021 where all sorts of garbage one higher because there was so much easy money and so many investors look for easy wins, but the moment the fed took away the easy money, that whole playbook blew up in your face, and anyone who kept buying stocks, especially on margin or with borrowed money, basically got eaten alive. the bottom line. it pays to be realistic in this business. big pullbacks are like rain. they are inevitable. whatever you do, do not make stock-taking decisions based on hope. you need to invest in the real world, not in the fantasyland. let us go to denise -- dennis. dennis, dennis, how are you doing? >> i am glad to talk the night away here. >> you are very kind, dennis. >> i have a question, real quick. are there any kind of mistakes are pitfalls that people should
6:33 pm
make when managing their 401(k) accounts? >> based on thinking it is for the long term, they take flyers. now, i think it is fine if you take flyers when you're in the teens or the low 20s because you have your whole life to make it back but when it comes to 401(k)s, you went standard, strict evidence. being realistic is key. expect corrections. do not allow hope. please, no hope as an investing strategy. you know what? i am sharing why having a thesis for each of your winning strategies. then when it is time to raise cash, how do you know what to sell? i give you my plans. then one of my favorite parts of the show is getting to hear from you so i bring in my investing partner jeff marx to answer some of your most burning question so stay with
6:34 pm
cramer.
6:35 pm
[inner monologue] i needed some help. good thing i knew someone... ♪♪ or... some-thing. [a.i. copilot] glad you called, j. [a.i. copilot] it's time for an upgrade. awesome. ♪♪ [inner monologue] i knew what i had to do. because they never stop.
6:36 pm
no time to waste. this isn't sci-fi. this is precision ai. ♪♪
6:37 pm
>> you know you do not need me to tell you that the internet has become a double-edged sword. that has become true in every area of life, including investing. you have all sorts of information available at the edge of your fingertips. when i got started in this business, it was much harder. these days, everything is searchable. hey, and there is chatgpt. the internet is great for new problems, but when we have new problems we need new rules to contain them. you actually have to be able to explain your stock picks to
6:38 pm
another human being. if you do not understand it, you cannot justify buying the stock in question. right? the rise of the internet took away one of the most important warning systems, which is talking to another human being about what you want to buy. it used to be that you had to talk to a broker to buy anything. now, you can without ever having to tell another person what you are doing it. it is lithium. so you do not even have to pay a commission. to me, i would much rather have the commission then another real person. why do you need to explain this stuff to anyone else? it does not have to be a professional by the way. it could be anybody. preferably an adult. if you can find an adult who could babble about the market. buying stocks is a solitary event. too solitary if you ask me. two error is to human.
6:39 pm
if you want to cut down on these mistakes, you should force yourself to articulate to someone else why you like that stock. do you know how they make the money? do you know how their earnings are supposed to look? if you don't, then you are setting yourself up for trouble. i always see this problem in biotech. they do not have the faintest understanding. they have no idea what the company does or how it could possibly turn a profit. they do not even know the drug pipeline. they just know that it is hot, hot, hot, and that is a real bad reason to buy. make sure you have actually done the homework. that way, at the stock it's slammed you may even buy more. believe me. you are going to get slaughtered at the next decline. you are going to sell at the bottom. and there is always a next decline. literally sell it like a
6:40 pm
salesperson. i would pitch it to the boss. if you are in a position where you are picking stocks yourself, pick someone who would listen to you and articulate your reasoning. it will always help. hey, what is going to make this dog go up? what is a catalyst? or have we missed the movement on the stock that is up 100% already? and, of course, what is your edge? these are important questions. and if you cannot answer them, you should not be buying. and your ability to make hasty decisions is not the only thing you should be aware of on the web. it has vastly increased the power of the wall street promotional machine. most people do not have enough respect for the promotional machine. you do not have to like it but you have to acknowledge it is power. they will heighten that stock to high heaven. think about all the garbage- backed stocks.
6:41 pm
2021, 2022. merging with special-purpose acquisition vehicles. basically, big pools of money that existed to make big acquisitions. but in 2020, some geniuses realized they could use back starters to bring startups public while avoiding all the intense regulatory scrutiny. we had so many. how about the electric vehicles? jason's battlefield in 2021. a totally made-up forecast. it went up many years into the future. if you try to pull something like this with a real ipo, you might end up in prison. the s.e.c. would never sanction the stuff. if you went to a bank to borrow money with these projections, they will not let you out of the room. the investment bankers wanted the fees, of course. meanwhile, asleep at the wheel and you cannot count on it. wall street is a strange place. there's no one around who says, you know what, we should not crush people. we should not close our eyes to
6:42 pm
what we know cannot work because they want the money. they did not care that you, the people running this back target sell, and they do not tell us. who did police themselves because the regulators did not seem to care. eventually they got prosecuted, but not until they lost people fortunes. the level of hyped up legitimacy was ridiculous. it all started with nicolas, and i was an electric vehicle play with a stock that sword to the stratosphere and then we found it made outrageous claims that cannot be backed up by the facts. the electric truck, they rolled it down the hill for goodness sake to make it look like it was running on its own power. just the dumbest fraud imaginable. so i want you to do this. the next time you see this kind of enthusiasm from potentially
6:43 pm
dubious merchandise, take your cue from the public enemy. do not believe in hope. and one last one. this one is really true of all media, online or off. whether you are watching tv like me or scrolling through tweets. please be skeptical. my general approach is what you hear on tv is possibly right and no more than that. same goes for the web, except you have to be a ton more careful because there is a ton more junk information. and chatgpt, google it after. okay? so repeat after me. just because someone says it is on tv does not mean it is true. you cannot believe everything you hear. that is one reason you mostly talk to high-level executives on the show. they can still mislead you. but if the public company ceo outright lies about how their business is doing, let us just say their legal bills will really start to add up.
6:44 pm
get me? generally speaking, you see a lot of money matters coming on television, and for a variety of reasons these guys are not well vetted. they just cannot help themselves when it comes to being a promotion. here is a good rule of thumb for you. if he is on tv and moving his lips, he might be moving his book. some plunging stock is a buy. do you think that sounds like an opportunity. no. instead you should be wondering, he must really be stuck. is he dealing what i am buying? it is awfully hard to tell. here is the bottom line. please always be able to explain your stock picks to another human being, and never take anything on faith. not from the wall street promotional machine and especially not from money managers who love to come on tv and tell you they are right 100% of the time. "mad money" is back after this.
6:45 pm
6:46 pm
6:47 pm
6:48 pm
>> no matter how smart you are, no matter how well informed, no matter how lucky, will make some sub optimal stock picks. every major portfolio manager has a few dozen. the true difference between a good investor and a bad investors how you handle your losses. some people have a aversion to selling losers. believe me. i sure hate selling for the trust but it has to be done. but somehow we just keep hoping and operating under the
6:49 pm
assumption that a signal stock is somehow wrong and everything will be fine if we just hold on long enough. they have rationalized that the weakness they see will be fleeting. hope. hope. hope. that is all well and good until you need money. maybe you want to raise some cash because your portfolio has become a little too stock heavy. maybe you have some expenses that require you to put together a lot of cash in a hurry. maybe your money manager wants some money back for damages. how do you sell? losers have chose the sinister side. a lot of investors would prefer to sell their best performers rather than their worst performers. they will sell their winners to subsidize their losers. that is wrong. you then have a self fulfilling spiral. it will get even worse. this is particularly dangerous for a hedge fund because there are more redemptions from your client. a vicious circle.
6:50 pm
if you keep selling winners to get the money back it becomes a nightmare. vicious. individuals, the same thing. you may have a finite amount to invest. far too many people prefer to remain in denial and pretend the losers are not losing. you have done it. i have done it. never subsidize losers with winners. the position is simple. sell the losers and wait a day. go back in the next day and by. i bet you will not want to. once they are out of your portfolio, i doubt you will be tempted to bring it back. you cannot keep hanging on a low-quality stock just because you are hoping for a takeover. a takeover. a lifetime's worth of gains in a day. try to capture those moves. these include the "buy a lot of bad companies in hopes of catching a bed." in reality,
6:51 pm
great companies with cheap stocks. not crummy companies that seem cheap but are in fact expensive. so many people think a takeover is going to save me. never speculate on takeovers with companies with bad fundamentals. the odds are you will tend to own something that will go down much more than you thought. either the bad company gets a takeover and it comes in at a much lower price than what you initially offered in stock. that is the thing about bad companies. their stocks tend to go over. you can still get a takeover bid. it makes sense. not many back companies get acquired because not many ceos can turn bad companies into good wants. you could be waiting forever. especially in a world where some regulators have gotten more
6:52 pm
aggressive about blocking mergers. if you are betting on well-run companies only, even if a deal does not happen, there are other ways to win. plus, you can confidently buy more into weakness. that is not something you can do from a company that is going from bad to worse while you are waiting irrationally for lightning to strike. bottom-line. please, please, please, never sell your winners to subsidize your losers. just take the darn loss and sell something that is underperforming and do not speculate on takeovers for the fundamentals.
6:53 pm
6:54 pm
6:55 pm
welcome to the now way to network... they switched to juniper's ai-native network. and now everyone's so productive, they're operating at a higher gear... that's the now way to network at work—with real ai—putting you in the fast lane. with absorbine pro, thapain won't hold you backrk from your passions. it's the only solution with two max-strength anesthetics to deliver the strongest numbing pain relief available. so, do your thing like a pro, pain-free. absorbine pro.
6:56 pm
>> i always say my favorite part of the show is answering questions directly from you. tonight, i am bringing in jeff marks to help me answer some of your most burning questions. for those of you who are part of the investing club, he will need no introduction. but for those of you who are not and i hope will be soon i would say that jeff's insight and our back and forth helps me do a better job for you, and of course all you members of the club. we have monthly meetings where we look at our latest portfolio decision for the club. if you like, i would love you to be joining the investing club. so let us take some questions. first, we are going to nancy
6:57 pm
who asks, when you advise people to take out their cost basis and play with the house's money and let it run at what point do you suggest people take profits? i also do not want them to miss out on a big move. i still favor making sure they do not give back the game. take the cost basis out and then let it run but i don't know. >> absolutely. no one ever got broke taking a profit. i think of eli lilly oftentimes in 2022. it was a big al performer in what was a really tough year but because it was doing so well a lot of new drugs were taking profits every 20% or so higher. i think that is a great way to look at it. >> it is an art, not a science. but i think that staircase worked well from us. here we are taking a question
6:58 pm
from herm who wants to know, jim has been talking about the stocks that are going down. what does that mean? doubling down on a stock that is down from the cost basis. we want to try to get our cost basis lower by buying some but we also want to scale out if it goes out rapidly. this is, again, jeff, i think you and i go back and forth because when we are battling that means we are playing a little too much defense but sometimes we are just stock. >> we are trying to understand, do we have a broken stock with a company's fundamentals are good but not being recognized in the market or is a broken company where there is something fundamentally wrong. that is all part of the battling progress. broken stock, got to have patience. >> and broken company also. michael asks, can you name a
6:59 pm
view stock specifically for young children? many of us invest for our children or grandchildren so that will be helpful. there would have been a time when i would say go buy some disney. i find disney troubling. i would say, look, you have got to go buy some of the flaky cereal stocks. get something on the breakfast table or dinner table with campbell's soup. i think a young person should own technology. i am thinking maybe growth stocks, high-growth drug stocks. or maybe what you do is find some new kind of technology that would be really exciting years from now. that might be a way to look at it. >> i think you want to find companies that the young children would use every single day because it is a great way for them to learn not only about the company but if they have an investment with the company it is a great way to get started in investing, too. and it is never too early to
7:00 pm
get started in investing. >> it is just no longer the way i like to think. >> apple, amazon, alphabet -- >> they all work. >> people use these products every single day. >> absolutely. right here on "mad money," i am jim cramer. see you next time. be -- an ent. [ rapping ] ♪ sharks, give the kid a chance ♪ you have a winner on your hands. break down the numbers. $10,000 in sales. that's it? something's not adding up. your sales suck. i came with a very, very fair offer. are you crazy? another bad idea, but... another really bad idea. what happened to "the customer is always right," mark? yeah, that's wrong. don't be a chicken. oooooh. i'm just trying to think of how i could outwit these two other sharks. i don't have to prove myself. bwuah-ha-ha-ha-ha! no! ♪♪

52 Views

info Stream Only

Uploaded by TV Archive on