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fewer pieces left behind. charmin ultra strong. >> i'm jim cramer. welcome to my world. you need to get in the game. going out of business and he's nuts! they're nuts! they know nothing! . i always like to say there's a bull market somewhere. "mad money," you can't afford to miss it. i'm jim cramer. welcome to cramerica. other people want to make friends. i just want to try to make you money. my job is not to education, but to entertain. so call me. 1-800-743-cnbc. hey, how can this market go up when the news is always so negative? i look at the first page of the business section of "new york times" today, uh-oh, troubled airlines, airlines already suffering, the airline industry is in the midst of one of its most wrenching summers ever, and the fall/winter may even be worse. how about the front page of the times?

obama's choice of auto woes is leaving post. what's this one about? how the woeful auto industry lost the man who will turn it around? like anyone could? one of the most wrenching summers for the airlines. how about the last 80 summers? when was the wright brothers thing? how about lindbergh? the trouble with auto industry losing its savior, can henry did henry ford die? you know? woe is not me. these stories sound scary, but i don't think they count as real news. what is real news then? not what the press decides to highlight, but the stories that are surprising, the ones that you couldn't have anticipated, unlike airlines and autos. the items that are, well, new. we know good news doesn't sell papers, but preferring to offer

nonnews this is like d.a. probes rackets rather than the real thing. how is the troubled airline news or trouble auto industry news? they're the focus, but the airline industry has been in trouble since the day it was born. bankruptcy a practically a revolving door for the airlines. from the moments they succumb to the union and gave away the store at the same time when toyota made mass cars that people wanted to buy. somehow these are still the big stories when tuesday, july 14th, 2009. i don't think it's even news anymore. the papers might as well say dog bites man. because in essence, that is dog bite man. so since you're not going to hear it anywhere else, let me tell you the real news, why the market goes up on days like today. the real news, the stuff that

genuinely shocks people -- i'm talking about the stocks that moves up stock, it is stuff that moves up your portfolio. that kind of news. last night, csx, the best-run american railroad reported a hugely profitable quarter in spite of a decline in revenues. if your job is to sell papers, you don't have a story if you say csx is better than expected, since that's better than surprising, especially since csx is an industry that used to become deeply troubled whenever we entered a recession. in the past, this company and others like it will be producing huge losses at this point in the cycle. not big earnings beats, but it's a rail, an industry no one cares about, in a story that sells papers as the economy coming off the rail.

which is why csx -- how did that do? let's check. did they have it? i think they might have written about it. oh, yeah, look at this. 6 inches of ink today while the deeply troubled airline industry gets reams and reams of copy. believe me 6 inches of ink in this game is minuscule. and in the news business, size matters. how about novell. here is a company in one of the most cyclical industries in existence. a semiconductor crude manufacturer. it should be begging the feds for a bailout given how bad that business has been in. it's worse, i struggle, i struggle, and i figured it out. it's actually this industry is worse than counselor in training, which is what cit stands for, by the way. but while novellus saw a loss, an uptick in the previous quarter. and it's weathering the downturn spectacularly. 40% of its market cap is cash. it might as well by a bank. that's news, but if you're in

the news business, you just don't have a story about the great job this company has done surviving the multiple lien years. what's more surprising is the industries that were in decline when i got into business are now in trouble. is that surprising? no. i think what's surprising is the companies like csx and novellus aren't getting clocked. why have not the ceos of novella and csx had their lungs ripped out? the answer -- they took out costs, made the hard decision, and go back and the case of novellus expanded overseas and csx made itself more efficient and aggressive. trucks, doing great jobs of controlling labor costs. the managers of these companies did the opposite of their counterparts in the auto and airlines industries, assist that's why they're able to make money. at least in the case of novellus

save moneys of millions of dollars in the worst economy in 75 years. i think that's news. if you want to have any hope of making money in this market, then i want to see stories about the companies like these two. that have taken control of their own destiny. not the same stories about the airlines and autos that i've been reading for the better part of the last 30 years. you need to know about the first kind of stories to understand -- the kinds in this market. this is inconsequential. great picture, though. it's just not news -- look at that. fedex, that's not even a regular airline, but i guess, geez, that's wipe that out. it's not news when dell, a terrible company, and others screw up again. now we have people extrapolating from dell's bad quarter to the rest of tech. that's wrong. you can't take your cue from the worst company in the industry. dell's flubs aren't news anymore either, what's in it for me? what's in it for you if the papers want to focus on the same

stories instead of real news? like that of csx or novellus companies not being killed in this environment. because if i don't step in here, then the papers will color your view of the market and you're going to be wrong. my job isn't to sell papers, it's to help you try to make money and become a better investor. i am not being a pollyanna here. i am a realist. this stuff is unrealistic. their mission is directly at odds at mine. there's no editor in the world that will say this is not news when it comes to the airline woes, because stories about airlines have always attracted readers. i've seen the numbers. i've seen the polling. by the way, stories about car companies, they poll very well, too. they get readers ease attention. rail stories, semiconductor stories, they poll horribly. who cares? i do, and anyone that wants a feel for what's going on, not just in the stock market, but in the entire company should care, too. it's nuts that you think you

should ever own one, it's also news that mineral companies like freeport mcmoran, that they're doing well. in the midst of what's supposed to be an endless worldwide recession in which the government has raised an anti-business agenda. the whole end his heartbeat from washington. if you only paid attention to the press, you would think they're great shorts. you used to sell the minute mineral companies on weakness in the u.s., but now they're working. it's a break with the past. again, i regard this as news. actual news. and the immediate use will never focus on it, because news is about another country, china, not us. we're just starting to realize china has passed us, because we are capitalists who believe in social and financial engineering, while the communist chinese are just about engineering. the bottom line -- don't let the stories about this or that troubled industry get you down. the industries that are troubled have been troubled forever, there are no revelations, there is no news there.

the papers aren't meant to make you money. it's not in the job description. it's my mission to keep you from losing money because you're paying too much attention to the wrong sources and not noticing any of the truly shocking positives coming out of companies that shouldn't be positive right now. i have to keep you in the game, not out of it. the real news is major american companies that you've never heard of and can't buy more than 6 inches of ink are making fortunes when they used to lose fortunes back when every cyclical companies were as woeful as the woeful airlines and autos. not anymore, and that fact, not these stories about auto or airline woes is worth trading on and investing in. let's go to trent in california. trent? >> caller: hi, jim, this is big bay area boo-yah from san francisco. >> good pitching, too. san francisco good pitching. >> caller: i'm curious about trinity industries. they're a railcar manufacturer, but also diversified in other

sectors like manufacturing infrastructures, and leasing railcars. is that a good move for them? considering the rail profits as of late. >> okay. the problem with trinity is what they did -- this one of those companies, by the way, you've got to have an unbelievably smoking economy in order to buy -- to have companies need more rail cars and they don't need more rail cars. trinity went and did something that i thought was really good. they went aggressively into windmills, into turbines, and that business has also dried up, because oil as come down a lot. so trinity is not where you want to be, even though conceptually it might be right. bob in alabama, bob? >> caller: jim bo, how are you, sir? >> not bad, sport. what's up with you? roll crimson? s.e.c. violations? go ahead, bob, you're up. i got your attention, but it's

the right s.e.c., not the one in washington, but the one that matters. go ahead. >> caller: kbr, they've had a high cash per share holding. >> yes, they do. >> caller: but only paying a 1% dividend. they had a big order backlogged, but just lost a contract to flr. given the current economic political turmoil, how do you think their earnings will be from here on out. >> again they're infrastructure, in a very, very negative mode here. and i am not recommending any infrastructure company es right now, i even got off the foster wheeler bandwagon. i think oil is headed to 45 or 55, so even though kbr is in a terrific cash position, i won't tell you to buy it. i'm going to todd in north carolina. todd? >> caller: hey, jim. >> what's up, buddy? >> caller: a two-part question about the same stock. first risk of --

>> accidentally a bad quarter. we don't want to touch that. we don't care -- that company had a bad quarter. and my friend doug cass who writes with me at realmoney.com as part of the street.com where i'm chairman said that this one is not one to be touched. i don't want want to touch that one. and it's the yield's not high, it's only 2.3. let's stay away from that one, let's not touch it. we've got a lot of better fish to fry. don't let the negative people who put out papers, troubled airlines brace for new woes. you know what you do? when there's a summer day and there's nothing to write about, you gin up a story. how about troubled airlines brace for new woes? no how about novellus and csx blow the numbers away. don't want to overstate the case, but "mad money" will be right back. coming up, it's summer blockbuster season, but what's your way to cash in? cramer is taking a look at an entertainment stock that could

better your ticket to "mad money." plus, is it time for energy stocks to fuel your portfolio? cramer analyzes the technicals to find out which oil stock can unearth some profits on "off the charts." and later, the wizard of wall street kicking it into high gear to give your stocks their final judgment on the lightning round. all coming up on "mad money." she wants to make up.

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♪ this week's spongebob squarepants turn tense, so viacom is celebrating by ringing

the bell at the new york stock exchange on thursday. normally that's a story i can look at and think, can't make any money on it and who cares? but in this case, that would be totally wrong. the story isn't spongebob's tenth anniversary, the right headline comes from the marketing and media trade paper. and the headline is, how spongebob became an $8 billion franchise. now, i saw that, and i thought -- i was straightening my tie. how could spongebob be worth $8 billion? that's what it brings in for nickelodeon in revenue each year when viacom is only worth $12 billion. a total head scratcher for even patrick. this is just one show on one network at a mass -- thank you -- as a massive media conglomerate that has over a den

dozen different cable properties. mtv, vh1, comedy central, not to mention a huge movie business, including paramount. how does it make sense for spongebob to be worth 2/3 of the whoa company. i'll admit the show is brilliant with the cross-generational appeal that lets parents watch it with their children. no tv show is that good. candid, that episode two fridays ago where the bully never got his comeuppance, and emasculated his dad in front of spongebob, it was very upsetting and a bad lesson. the issue can't be that spongebob is worth too much. it's that viacom is worth far too little. it's being seriously undervalued by the street. i think as dumb as this may sound, many investors might reconsider their view of the stock and go more positive on thursday when viacom gets to ring the bell at the nyse for spongebob's tenth.

it's a pretty silly reason to recommend the stock. it is why i'm bringing it to your attention today rather than tomorrow, and do a little homework. when it'd be too late to act tomorrow. in case you want to get ahead of the rush and buy some in front of what should be an inconsequential totally irrelevant ceremonial event on thursday. but it did get me thinking. the only reason i might think it might matter is viacom has been written off. nobody cares about it. anything that serves to draw some attention to things no matter how trivial might help. we'll watch at 9:30, it'll be on "squawk on the street," we'll be hearing, erin will be batting it around with mark. think about it. even though we're talking about a cartoon, i'm not going to throw away my rigor. i know, it's hard to be rigorous, so let's get down to what i like about the fundamentals here. when i'm done, you can ask

yourself if that makes sense. it's a company that's disappointed investors since it split off from cbs 3 1/2 years ago. that's why nobody wants to pay attention to it, it's been a disaster, but now the film and cable business is doing better. sooner or later someone is going to care. cellulose aside, come on, "transformers" a huge franchise. this thing has brought in $703 million, the new one worldwide. and no one even liked it. it's already surpassed the domestic gross of the original film in just three weeks. but beyond one huge blockbuster, the weaker economy has made it harder for the indy studios to put out films. less competition for studios like paramount. which viacom owns. the number of independent movies is down 30% this year. paramount's market share is on the rebound. after falling as low as 6.7% in 2004, it's now around 19%. big issue with paramount has profitability.

it's lagged warner which is really the gem of the whole time warner complex. fox and it's also lagged disney. the main reason for the disparity is in the low number of produced movies and poor performers. that's changing this year. viacom has more films coming out where its larger ownership interest like "star trek." and the massive success of "transformers" should translate into higher profits. how about the capable business? it's turning around 50% of the revenues are from affiliate contracts. a little more value than you think. the problem with the cable side is weak ratings, but there's improvement here, too. third quarter of 2008, revenue ratings for all viacom's networks, i know it will sound bad, were down 9%. in the second quarter of 2009, they were only down 1.8%. we'd rather see them up, but that's better than viacom, it's not as bad as it used to be. valuation, nine times 10,000 times two earnings. more importantly i think the company is worth more broken up than it is as a whole, and that's really the story,

particularly because it's not an ad-supported business for the most part. it's a discreet set of consumer franchises with a lot more worth than they get under this umbrella. if we had transformers company, and spongebob, comedy central, i might short that one. music video company, you had would have a heck of a lot more than what viacom is selling for. maybe there's a red stone discount here. i'm not just being a crabby patty, or maybe it's two classes of stock discount, because that makes it impossible to take over. whatever the reason, the franchises are worth more than the company for certain, we just don't have a catalyst. here as the bottom line. spongebob has opened my eyes. not just to mr. crabbes, plankton, or patty. it's too cheap, it's too cheap, especially compared to media conglomerates using the spongebob message which is that the entire rest of the company is only being valued at $4 billion.

there's no short-term catalyst, but this one's parts, including mr. square pants are worth a heck of a lot more than a whole. i wish the bell would ring and he'd do something about the value discounts like when the value got too great versus the price the public paid it. maybe it's all wishful, but then again if some silly cartoon sponge is worth $8 billion, crazier things have happened. stay with cramer. coming up, is it time for energy stocks to fuel your portfolio? cramer analyzes the technicals to find out which oil stock can unearth some profits on "off the charts." and later, try to keep up with cramer, as he takes your calls "rapid fire" in an all-new "lightning round," all coming up on "mad money."

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i'm always telling you, you've got to try to get inside the minds of the big wall street money managers. but tonight i'm going to take that even further, explain the rules of the game they're actually playing by. their goals are not the same as your goals. cramer, i'm sure you're asking so plainly, aren't we all trying to make as much money as we can without taking more risk than we're comfortable with? that's what you should be doing. but that's not what your standard portfolio manager at a mutual fund is trying to do. they're not trying to win the way you or i would think of winning. they're trying to beat their benchmark, which in most cases is an index like the s&p 500. i'm going to give you some inside baseball stuff brought to you by allstate, brought to you

by state farm, last night's home run derby very disappointing, i have to admit. it's important to understand that it doesn't mean just owning stocks that outperform the s&p. that's what we try to do on this show. for someone running a mutual fund that uses the s&p 500 as its benchmark, winning is what's known as waitings, about having more money in the best sectors within the s&p, and less money within the worst sectors in the s&p. the idea that waiting weighting sectors could be confusing to you. the concept of weightings alone probably confuses you. so tonight i want to go off the charts with an example of this kind of thinking to help explain how the big boys invest. now, you know one of our favorite technician is rick "top gun trader" benson huhr, the chief market strategist.

on tv a lot also my colleague at the street.com where i'm chairman. he runs the top gun trader newsletter. i've learned a lot from it. he's made a call based on his reading of the charts, not the fundamentals that the energy sector names, the oil and natural gas stocks and oil service stocks, which have taken a severe beating lately, will soon stop underperforming relative to the s&p 500. now, what does that mean? the s&p 500 in this period has gone up this group has gone down. that's major underperformance for a sector worth about 12% of the s&p. rick's not saying that oil itself is necessarily going higher or that the energy stocks are, either. he's just saying they'll do better than the s&p 500. that's a wake-up call for portfolio managers. he says if you've dodged this bullet, you may have to get back in over the course of the summer if you're going to beat this. his reasoning?

take a look at the weekly chart on the relative performance. that's what he's measuring. the etf that contains the oil stocks, xle, his's looking at it versus this, and this gives you exposure, by the way, to the s&p 500, this is the chart that compares the performance of the energy stocks with the index as a whole. and it's approaching what rick calls the 200-week moving average. that's a technical measure of the long-term trajectory, which is sloping higher. to rick, this chart is screaming energy is going to start bouncing back relative to the s&p right here. he thinks you should -- that it should become a bigger part of your portfolio. in other words, he thinks you should overweight energy. when the line hits here, he wants you to pick up more energy stocks than you might have had otherwise. what exactly does it mean to us? normally we use technical analysis as a tool to figure out what the big boys are doing based on the clues they leave. i want you to understand the nature of rick's call to tell

you how the big voices think. energy is 12.4% of the s&p. if you think that rick's energy call is right, you would want to overweight the group, to have centering stocks make up more than 12.4% of your portfolio. that way you would have more energy exposure than the s&p 500 does, and if rick is right, that would cause you to outperform the s&p 500. in other words, right now having more oil for this period has cost you. now he's saying it will help you beginning right there. if you want an example, right now the energy exposure at my charitable trust which you can view is half a percentage point overweight the benchmark. that means while energy makes up 12.4% in the s&p, it's 12.9% in my charitable trust. i agree with rick. remember, it's to overweight the best sectors in the s&p and underweight the worst. he's saying getting some energy stocks, don't get left behind by

the coming switch even though you think oil is coming down as i do. believe me, i think his call will be heated because of the real portfolio managers or pms don't invest the way i advise you to do at home. these managers who do mutual funds, they cannot afford to underperform the benchmark. they have to beat the s&p 500. if they don't, that's a great way to lose your job, so think try to stick closely to it. the best way for them to control their own destiny is focus on sectors. that make sense, 50% of the stock's movement is based on a sector. to try to beat the mark, they have some real explaining to do, not if they lose money, okay? that's what you would think. they often will, because they're so-called long only. they have to explain if they lose more money than an index fund would. that's why this is important. luckily you're not a portfolio manager. you don't have to worry about managing tens of billions of

dollars. i think it's one of the reasons that playing their game is a sucker's game and your game's a better one. the home game. instead of buying an etf with the good and bad oil stocks, you can do what we advocate and buy the best oil stock. right now i think the best buy is chevron. which is why my charitable trust owns it, and why it's my largest energy position and bought it into the weakness last week. chefron lowered guidance and it's based on weak refining, it's an industrywide problem and, hey, johnson & johnson said it today. i likes it at the current prices. chevron has the highest production growth, should come in at 5%. ironclad balance sheet, the fund future growth increased dividends. i'm surprised it didn't raise the different this year. i like the focus on the production growth. meaning the street value's production growth more than any other aspect of the business, so the more production growth chevron has, the higher the multiple money managers are willing to pay.

from 2009 to 2012, compound annual production growth 4%. that is very big compared to other oils. look, exxon is the only one that comes close at 3%. now that it's lowered the guidance, the bar's been set very low. it should be easy to beat the street. plus the guidance shouldn't have come as any surprise. refining is bad for everybody. it wasn't some shocker, which is why, by the way, the shock that is bounced back. here's the bottom line, portfolio managers have to think in terms of weightings and relative performance. you should keep these things in mind, too. but you don't have to own the best and worst of every sector. you can pick the best ones. if you like energy based on the technicals or the fundamentals, i think you'll like chevron. that's the best of the group. chip in wisconsin, chip? go ahead, chip. . >> caller: boo-yah, jim. >> boo-yah, chip.

>> caller: i have a question about transocean. >> yeah, rig. >> caller: and i bought it a couple months ago, and i've been waiting on this global economic recovery and the market, and i heard a couple analysts were talking about oil. >> right. >> caller: and boone pickens was one of them. >> yeah. >> caller: and they were saying that foreign oil was going to get a little too expensive for us. >> yeah. >> he thinks that brill oil is going to be $80 a barrel by the end of the year, he thinks the way the market is, but my question is, though, i mean, i have gains on rig right now, but i've been looking at other companies and wondering if i'm in the best position or like a schlumberger or naybors. and that kind of field. >> does that about wrap it up,

skip? >> caller: yeah. >> i was try to go contingent at a time on that a little. as you'll see this evening. i think you're not going to get a breakout in this stock, because oil is going lower not higher. transocean's got long-term contracts. i'm not worrying about the stock having a freefall, but not where i want to be. if you're going to be in the sector with crude coming down to i think the mid-50s, you need dividend protection, you need yield, something that will make it so it doesn't go straight down. that's why i prefer chevron to transocean, even though r.i.g. is the best of breed in that business. dan in arizona, dan. >> caller: jim, a big 110-degree boo-yah from arizona. >> let me give you a donovan mcnabb receivers camp, including brett, a big supporter of our show. boo-yah. >> caller: i like it. my question is about nht, north american tanker. while doing my home work, i

noticed the earnings per share were lower. i know they have a strong balance sheet and strong cash position, but what does it say about the safety dividends? >> i talk to herb hansen all the time, he's the ceo. we know anything can happen in this business. remember we had -- we had frontier on yesterday and she swore up and down the dividend is fine. herb has sworn the dividend is fine. i've got to go with him. he does have that kind of cash flow which is how you measure the dividend by, not the earnings per share. okay. if you like energy based on the technicals of top gun trader benson, i think you should consider buying chevron, the best of breed right now with a 4.1% yield of all the oil. stay with cramer. coming up, a lightning round, cramer takes call after call, to give your stock its final judgment. can you keep up?

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no, it's not time just yet. i want to revel in the fact that intel showed you you should not take your cue from a company like dell. you would have missed a fantastic rally with much, much bigger revenues. i think you could help amd, the semiconductors are back and i think we should recognize the reason they're back is because business is better not because of some big short covering rally. now it's time to cover the lightning round. what's that all about? raid-fire calls one after another. you say the name of the stock, i tell you whether -- just to be clear, i do not know the stocks or questions ahead of time. you hear this sound and the lightning round is over. are you ready ski-daddy? it's time for the lightning round. dean in michigan. >> caller: hey, jim, this is dean with a triple boo-yah from the great lakes wolverine state. >> buy, buy, buy.

buy to the power of nine, wolverine. what's up? >> caller: i've been watching you a couple years, and i finally got into the stock market as of the end of march, and i'm having good luck with it, and i really like the drug pharmaceuticals, and i was wondering what your advice would be, and it's greatly appreciated on mankind corporation, mnkd. >> this is one with a lot of things in trial for diabetes and cancer. we know, unfortunately, those are growth markets. this is purely a speculative situation. i would prefer you to be in -- my charitable trust where is undervalued with very good congressional bill that just came out that's going to give them a very long period of patent exclusion, so i think i'd rather see you go giliad but i recognize you might want to speculate in mankind. but i recognize you may want to speculate with mannkind. >> caller: big kansas city barbecue boo-yah. >> wow, excellent.

we favorite that, though the royals are really bad. go ahead. >> caller: thank you for what you do for the little guys. >> thank you. >> caller: i have a question on tyg. >> yeah, energy infrastructure, we've already trash that during the show. i don't want you to be, i think there are a lot better places to go. i don't want to belabor the price of oil, i think that's a mistake. oil's trading $45 to $55 and gasoline's going $2.25 to $2.30. rhonda in kansas. >> caller: hi, jim, boo-yah. >> boo-yah plainstater. go ahead. >> caller: this is the heartland of america. >> you bet. >> caller: and we love you out here. you are the american icon. >> really? >> caller: yeah. you're the real deal. >> thank you. >> caller: i'd love your -- >> i've been trying to get this show to the university of wichita. kansas, i've harbored on the call, by the way.

go ahead. >> caller: university of kansas, wichita state university, kansas state university, we all love you. >> thank you, any of schools want to invite me, we would think about it. manhattan. >> caller: we would love to see you, but are so appreciative for your insight. it's --. >> thank you, rhonda. maybe we ought to get a stock in, too, while we're at it. >> caller: i'd like to know what you think about dbl. >> i think dolby is last year's stock. i understand a lot of people still like it, it's a good performer. here's my problem. in the end, i need home entertainment to do better. it's like why i don't like garmin. i need auto entertainment to do better. i'm not going to bless that stock, but thank you so much for saying those nice things. chris in michigan. chris, go ahead. >> caller: i've got a big corn-fed boo-yah to you.

>> excellent and different michigan kind of boo-yah to you. >> caller: what's the best way to play the utility dividends? should i do it through the select sector, or go with a company like florida power and light? >> ftl, remember we like to pick the individual stocks, i like ftl, i happen to be more partial to con-ed than fpl. one more, mike in iowa. mike? >> caller: a big grandview university boo-yah, jimmy. >> boo-yah back. >> caller: ptn. long-term investment, what do you think? >> i think it's terrific long term. i think, again, i prefer exlon. if you need in that area i would prefer you swap out dominion letter d, but yours is good too. a lot of utilities, a lot of

heartland, kansas, put that on the map. we're going to kansas and stay with cramer. >> the lightning round is sponsored by -- bull market or bear, traders are always hungry for ideas. trading is all about strategy. and strategy... is all about information. heat mapping shows me where the money's moving. twenty five hundred stocks... one quick look. that's where the action is. plus, this amazing gadget... it's called the telephone. i can call td ameritrade anytime and talk trades, strategy... anything. td ameritrade. built by traders, for traders. this is what i need. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account.

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back on may 7th, we heard from don woods, terrific ceo of frt, for you home gamers. one of mire favorite reits, one that specializes in malls. i talked about how federal realty was doing the right thing, paying in cash instead of stock. didn't overextend itself. i also told us we thought the worst was over in the property market. frt's down about 5.6%, 4.4% counting the dividend. the market's crumby. i still have conviction in this, and i think don knows this game better than anyone else out there. i'm thrilled to have him back in the studio. mr. wood, welcome back to "mad money." >> thank you, tim.

>> let me give you a thesis and you can shoot it down or say it's okay. we saw when gasoline went down last time more mall traffic, then gasoline shot up and we started seeing -- gasoline's going to $2.30, is it possible because i know you've got a portfolio around the country that we could see a resurgence strictly because gasoline comes down? >> no, i don't think you can. i don't think there's any one thing about -- it's kind of cool listening to your show and knowing how you do things, the conversation about real estate being a piece of everybody's portfolio i haven't heard in a while. and i wonder if we ought to be talking really about a company or picking the best in class companies that are always a part, long-term holdings. and i've got to tell you, i look at federal that way and i think any company that's paid its dividend and increased the dividend every year since 1967 should be talked about a little bit more than today and maybe that's related to the top of the show.

>> one of the things we've been preaching on the show is that if you have something solid that can compound, talk about how long it would take to double just the stock did nothing, then you have a reason to own a piece of paper. there haven't been a lot of reasons to own a piece of paper. >> that's for sure, but you're talking about a dividend yield, where are we today? probably somewhere around 5%, a little bit better than 5%, in the highest quality retail real estate portfolio in the sector, at least that's what i believe. with the track record that has produced outperformance against the bloomberg shopping center index every single year for the last nine. and by the way outperforms compared to the overall morgan stanley read index. you've got to look at that in a long-term way. >> people hear that and think, i live near the short hills mall, which is an upscale mall, they think best properties and they might think best high-end properties.

isn't the fact that diversification the key for best profits? >> yes, this is kind of a misunderstood point a little bit. we are not a mall company. it's not -- it's not one of the big mall companies like simon or a westfield, what we're about is high-quality retail and high-quality retail doesn't just mean gucci or something like that, high quality is target, is lowes. >> companies that pay their bills? >> high quality retail is putting the right group of retailers together in the best piece of real estate available so that it's a place that people want to shop and cross shop place to place. we also are 75% grocery anchored. there's a huge necessity base to this company. >> when you put that together, it's compelling. you mentioned there is no one fact in the gasoline may be just a fact. you have a great regional property. where we see housing bottoming, we've seen it in california, does housing price bottoming mean anything? >> well, sure. the bottom line, look, and

everybody that is watching this show tonight is a shopper to one extent or another. you have to feel good about your job, you have to feel good about your future, you've got to be able to be confident that you should be spending money. and there's no question, even in the retail numbers that you saw today, you pull out gas and autos and you still have absolutely a very tough time for retail sales. the bottom line is, though, that is starting to feel a little bit better. and as that starts to change, there should be some momentum -- >> one last question, not a lot of time, don. my friends, they are putting together distressed real estate. would you do that? >> we play off on the simplicity, the transparency, high-quality retail is the name of our game. >> thank you, don wood, federal realty ceo, come here to see me in all of my glory and professionalism and dressed up

like spongebob squarepants. thank you. ♪

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intel will move the q-2 cue tomorrow. stay on top of that. there's always a bull market somewhere, maybe it's in tech. i'll find it here for you on "mad money." i'm jim cramer, see you tomorrow. don't get mad, get even, more "mad money," catch cramer at 6:00 and 11:00 eastern on cnbc. welcome to progressive.com. you must be looking for motorcycle insurance. you're good. thanks. so is our bike insurance. all the coverage you need at a great price. hold on, cowboy. cool. i'm not done -- for less than a dollar a month, you also get 24/7 roadside assistance. right on. yeah, vroom-vroom! sounds like you ran a 500. more like a 900 v-twin. excuse me. well, you're excused.