tv Mad Money CNBC August 25, 2009 11:00pm-12:00am EDT
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"mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends -- oh, boy, i'm just trying to make some money, and of course entertain and educate, so call me at 1-800-743-cnbc. tonight we're making a cake. call me julia child. hey, call me a child. that's more like it. we have so much to celebrate that i am donning the chef's hat and making myself an oreo chocolate case to help usher in the festivities. got to go to the cramer cookbook for this one. recipe for a rally. what exactly are we celebrating? how about the good fortune of our country that ben bernanke
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will stay as head of the federal reserve. how fabulous is that? listen, we know he got off to a slow start -- they know nothing! at one point i wanted to throw a pie in his face, but he's the man who kept the atms running on time, prevented us from former bread lines, wearing sandwich boards "will work for food" creating apple stands, and most important from my time on wall street, no window jumping. i credit his decision to take radical action to bring interest rates to zero, among other creative programs as something that gives us, or at least me, another reason to celebrate. that reason is i'm not an idiot. two years ago this month when i thought bernanke was asleep at the wheel, i went on my big scream, and i guaranteed you would lose mine if you bought a house. i took a lot of heat for that rant, especially with the national association of
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realtors, but not as much as the ridicule that was heaped on over and over again last year when i predicted that housing would bottom. look, just take a look. >> housing sales will continue to drop. >> don't you dare buy a home now. you will lose money. >> so let's start the countdown. we have 309 days until june 30th of 2009, 309 days until housing bottoms. there's only 210 more days left before housing bottoms housing, housing, could it last and maybe bottom? it seems to be on track for my june 30th bottom call. i knew i shouldn't have worn this -- hey, i nailed that sucker. i took a lot of heat for those rants, specially for betting housing prices would stabilize and begin the process of going up. but here we are now, the 2007
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loss guaranty held up, right? the average home has lost about 20% of its value, up since i gave you my money-losing guarantee except for the 40% declines in california and florida, and the 50% slide in vegas, and then today we learned from the case shiller index, the authority on these matters we had our first month-to-month increase. when did it begin? june 30th. you with try to equivocate. you can run but you can't hide. i won't let you. you can't not have a bottom, to use a double negative, if you have an increase in price. and the housing bottom was reached on june 30th, just like i predicted. so i'm not an idiot. that's worth celebrating. i heard a lot of quibbling about my id yos -- idiosy today, or i took it personal.
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but the answer is that people who keep bringing up this foreclosure straw man don't recognize it's already in the numbers no heaven's sake. how exasperating. did they call a bottom? no. anyway, now people are saying the bottom will fall out again when the first-time homebuyer tax credit goes away. my, that's not why people buy homes, but the reason you buy a house is because you need one and it's cheaper, thanks to bernanke, than renting. it's affordable. do we have more reason to celebrate? sure. just this morning we got a consumer confidence number that i regarded as a thing of beauty, much better than expected. this is a big deal. it's the reason why, for instance, the target and walmart and kohl's has said the back-to-school season is encouraging. did you see that reported anywhere at all on this show? you had to get it from the raw data. now i have noodled long and hard why am i the only guy that thinks it's up given all the doom and gloom. look at this.
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here's a guy, double-dip threatens housing recovery in the negative street journal? now, i have one of these eureka moments. the consumer confidence is up, because people no longer read newspapers. of course, only svelt young 36-year-olds like me read the papers. you don't they don't even have them delivered anymore? no wonder people feel more confident. finally one more thing to celebrate. the retail investor is back. the money in numbers are terrific. they're terrific. as you can tell from the booming business at franklin resources, a mutual fund house that rallied huge today. regular people are putting money to work despite the media-inspired gloom. they know america is coming out of the this morass, that business is coming back, that the firings have at last run
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their course, and, yes, the hirings are beginning. these are fabulous reasons to bake a cake. you just have to kind of put it to work, you know? that's enough of that. anyway, but why an oreo cake? because oreo standing for other real estate owned, as opposed to high drox, they dunked better. when you think of housing stabilizing and going up, because the fed is going to stay steady, when the consumer is feeling frisky, you want to own the stocks of companies that own the most houses. would it be toll brothers, lenary? no, no, no, the biggest owners of home builders are banks. bank of america, wells fargo,
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jpmorgan, courtesy of the o.r.e.o. portfolios. we're in the cycle where they're going up in value, where demand is so high and inventory is so low, you want to be invested in companies that own homes. who owns more than bank of america, courtesy of countrywide, wells fargo courtesy of golden west. these guys own whole zip codes of homes. nobody got homes like these guys. they taste like coming home. the bottom line, congratulations to mr. bernanke. congratulations to the america consumer. congratulations to the investor. you didn't let the inglorious ones get you down, you stayed in the game. you stayed in the game, and now this oreo cake is for you. let's speak to rob in new jersey.
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rob? >> caller: boo-yah, jim from new jersey. >> holy cow, what are you exit 5 off the turnpike? >> caller: exit 4. >> you can stake 5 and -- go ahead. >> caller: i started investing a year ago, and i want to say thanks for all the help you've given me to stay in the game and make some mad money. >> my pleasure. >> caller: my question is about petstart. they gave guidance with expectations for a third quarter. i think people take better care of pets than themselves. what are your thoughts? >> you've got the wrong case there, my friend. the problem with pet smart is walmart. you don't want do go up against the monster, the king. walmart is destroying petsmart. don't touch that office product, either. that's not doing too well. adam from georgia.
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>> caller: on top of stone mountain georgia, jim. >> good you have to you here, chief. >> caller: i was wondering with this bad housing market, how is that going to affect home depot over the next, say, 12 months. >> this is in the eye of the beholder, partier, and home depot, which i own for my charitable trust is doing just fine. as a matter of fact, just so we put our cards on the table, the one thing we know about home depot is it's kicking butt and taking names. i like it. i'd like to go to the land of lincoln. brett in illinois? >> caller: boo-yah, jim. >> boo-yah, doctor. >> caller: i watch your show every day. >> thank you, thank you. >> caller: here's my stock, buckle, bke. >> you got horse sense. between aeropostal and buckle,
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monster performers. any weakness in buckle, i say buy. but they have distinguished themselves in this decline as having momentum and doing a good job. i include urban and tjx, but you know how i feel about tjx going forward. congratulations mr. bernanke. on your reappointment. congratulations consumer to feeling the good idea to buy a home. congratulations investors. what the hell. coming up, one upgrade and one downgrade, how do you sort it all out? turn to cramer as he decides whether one stock has run out of steam or just starting to heat up. plus it's a competition of warehouse proportions, a week-long competition continues as cramer pits two stocks against each other to find out if either one has what it takes to be crowned discount king.
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today the mammoth brazilian metal and mining company got hit with two dueling pieces of research. hsbc downgraded the stock from neutral to underweight, wall street gibberish from hold to sell, and morgan stanley upgraded the stock from equal weight to overweight. that has nothing to do with obesity.
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the analysts are saying the stock is no longer a hold, a buy, buy, buy, so which of these two combatants is right? which do i conscientiously object to? first, i own vale for my charitable trust, which you can follow. yeah, i tell you what i'm going to do before i do it. and you better believe i like it. i put my charity money where my mouth is. i think hsbc's downgrade is wrong and morgan stanley's upgrade is very right. even though i'm a fan of all thinks vale, including the ski slopes, jerry vale, i know where the analysts are coming from. the downgrade is more about the way that analysts at big brokerage houses operate than it actually sells about vale's prospects. hsbc downgrades vale on valuation and expects a falloff
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in chinese demand for iron ore, and the negative effects of a stronger brazilian real combined with a weaker dollar. morgan stanley upgrades vale on valuation. markets like europe, brazil, and the u.s., and potential stronger iron ore pricing. i know it's got to be confusing. one guy likes it because of its valuation. the other guy hates it because of its valuation? it may seem crazy that on the same exact day two analysts come out with diametrically opposing opinions on one stock, but that's not because it's a mad, mad, mad world, but because of the way things work behind the curtain, behind the "vale" so to speak. hsbc has had a neutral on vale since the stock was at 12 this march. now the stock is up more
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68% as the analysts just sat in the bleachers. after missing over $8 of up side, this guy downgrades vale to underweight, but at the same time even more curious, he increases his price target from 17 to 18.50. and he increases his iron ore price forecast from 2010 from down 10% to flat. even though the analysts think the business will do better than he thought, the guy still takes the rating down. i think we're going to start seeing this kind of behavior with a lot of cyclical names, because they downgrade because they're anticipating a v-shaped recovery. not just a slower u-shaped and certainly not an l-shape nonrecovery. hsbc's main concern is that china has been restocking its
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inventories, and when that ends, which seems to be happening right now, iron ore price also plummet. though the analysts expects better demand from around the world, he thinks it's already in the stock. and its richly valued, we're 66% of vale's shipments went in the most recent quarter. i think the guy at hsbc has it all wrong, and i think he's compounding the error with the sell call. the analyst is looking at vale's valuation when he should be looking at the prices of the commodities it produces. much better measure of raw material stocks. and i think he's nuts to suggest that the stock is pricing in stronger demand for non-china. when it seems like the market has given up on the u.s. and europe in terms of recovery. all right. how about morgan stanley? here's something that sums up why i've been buying vale aggressively. so hopefully i can give away a
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lot of money at the end of the year. the analyst here says the market is too darn focused. too china oriented. brazil, europe and the u.s. are recovering more than expected. steel output in europe, brazil, asia, going up for example. more importantly, steel outputs now increasing in europe and you need iron ore to make steel unless you're from new corps which they use scrap. the high quality iron ore that they need is what vale supplies. the big comeback in europe i think is what no one is expecting right now would be gigantic. europe made of 25% of the volume for vale. it had dwindled to just 7% in the first half of this year. i think any decline in chinese steel production will be offset by steel makers in brazil and europe which should allow iron
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ore prices to stay firm in 2010. frankly i think it will do better than that. he also sees nickel prices going higher, and no one seems to care about that at all, even as it could give the earnings some icing on the cake. morgan stanley sees vale as not being richly valued, but it's underperformed the brazilian market by 26% and underperformed the average brazilian steel stock by 46% so far this year. believe me, i would be flying down to rio to see what the heck is going on there, but boy, are my arms tired. here's the thing. i look at the downgrade and upgrade, i see them both making the same case. what matters is the iron ore prices. if that happens, vale with its high grade ore, low costs and world dominance benefits the most, and i think that puts it somewhere in the high 20s or even low 30s. hsbc, he thinks iron ore prices will be flat.
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which would still put them in the mid 20s. here's the bottom line, and this is really important the chi-coms may be the better more chico marx than karl marx, but the u.s. and europe are still huge, huge markets. bigger than the prc. and if they come back like the analysts at morgan stanley suggests, then vale will soar, even if chinese demand falls off a cliff. heck, even the guy that downgraded the stock raised the price target in the report. can you imagine what he would have said if he started to like the stock? now i've peeled back the veil of wall street. you know why i think it's time to buy, buy, buy vale. after the break i'll try to make you even more money. coming up, it's a competition of warehouse proportions, a week-long competition continues as cramer pits two stocks against each other to find out if either one has what it takes to be crowned
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discount king. plus the clock is ticking. call cramer at 1-800-743-cnbc to find out how to fire away at cramer on "the lightning round." can he withstand your thunderous onslaught of stocks? and later cramer puts the stocks against the fundamentals on an all-new off the charts. all coming up on "mad money." ws to stay on top of my game after 50,
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are working from the road using a mifi-- a mobile hotspot that provides up to five shared wi-fi connections. two are downloading the final final revised final presentation. - one just got an email. - woman: what?! hmph. it's being revised again. the copilot is on mapquest. and tom is streaming meeting psych-up music - from meltedmetal.com. - ( heavy metal music playing ) that's happening now with the new mifi from sprint-- the mobile hotspot that fits in your pocket. sprint. the now network. deaf, hard-of-hearing, and people with speech disabilities access www.sprintrelay.com. every day this week we're searching for the discount king the best of brie low-cost retailer that you can own, even if an environment where the economy is on the mend and the consumer could be trading down less and less, but not yet. i'm putting five stocks into the arena and comparing them.
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this is what i used to do at the old hedge fund. this is to teach you how to analyze stocks as a pro. how do we find the discount king? if you caught last night's show, i don't care for tjx right here, the parent company of t.j. max and marshall, because it has a sourcing problem. they depend on being able to buy cheap merchandise from troubled retailers that have too much inventory and need cash. but right now inventories are across the board, they're lean, they're down. nobody wants to off-load any unwanted merchandise, because there isn't any. that means they'll have to pay through the nose for product, making it more of a discount knight or rook than the discount king. what's next? we don't want a retailer with the same problem, so we need something with a totally different business model to compare? how about a discount clash of the titans? a competition of warehouse
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proportions, costco versus b.j.'s wholesale club, the two largest warehouse stocks. even though they're both trade down plays, they don't rely on castoffs, they drive low prices home to the manufacturer. they rely on operating efficiencies, bulk warehouse store model, keeping prices low so they both have more control of their destiny. neither stock has run very much since the march 6th lows. b.j.s is up only 5%. costco is up 27%. s&p 500 is up 51%. but costco has been doing awful in the last year. none of those are like the over extended tjx. that's up 78% from the beginning of the year. that's another reason why i decided that's not the right one. why warehouse place? because as the economy recoveries, companies that hit their customers with membership fees are more likely to keep those customers, you know,
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whereas, you know -- if they have more money and can afford to shop somewhere else. good or bad picture? can't tell. once you pay for the membership you're just not going to throw that money away by never shopping at one of their shores. how do we tell which one is better? in a steel cage death match, which one would come out on top? i think b.j.'s is the better of the two wholesale club stocks, maybe not the best place to shop. and that means i'm putting b.j. in the running for the title discount king. why? key metrics. that's how we measure the success of a company in given sectors. on most key metrics, bj's is a superior company with a superior stock. though i wouldn't go so far to say it's got a superior attitude and superior state of mind to produce.
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how stores that have been open for a year are doing now versus their sales a year ago. we compare identical stores, bj has stronger same-store sales. that's the key metric. it grew at 2.9%, excluding gas sales. which have taken a huge hit since gasoline came down in 2008. and they're expected to increase by 3% to 5% in the third quarter and 4% to 6% in the fourth quarter. costco same-store sales were flat last quarter. they were down 1% in july. who takes the cake when it comes to inventory? too much inventory in a retailer has to put an additional sales and promotions to get rid of old merchandise. inventories is the nemesis of retail profits. these warehouse stores are no exception. here costco has the edge. it beats b.j.'s. its average decreased by 4% in the most recent quarter, b.j.'s increased by 4%.
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that's a little scary, but the manager said it was due to soft trends at the end of july, which they noted had begun to reverse in early august. so costco doesn't wipe the floor with b.j.'s in this category. merchandise, what do i mean by merchandise? this is about which one has the most appealing products. the store that knows how to stock what people want. even though i love the ribs, and they're the best, but i'm thinking b.j.'s lately is the better merchant. it's increased the number of different items available, giving customers more options to choose from in a range of sizes. they have 7,200 unique products. costco has 4,000. so b.j.'s is in a much better position and can appeal to customers as more than just a warehouse store given its wider range of products. i hadn't thought about that when
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i went into this comparison. costco is considered the more upscale of the two has got the best crab legs, got fantastic birthday cakes, fantastic meats, good fish, it's also the place that it's chic to shop at. you'll see a lot more mercedes in the parking lot of costco than at b.j.'s. but costco has simply executed poorly this year. i expect improvement, but i can't wait for it when b.j.'s stock beckons. i want to make it really clear, i vastly prefer going to costco over going to a b.j.'s. i really prefer every one of my costcos, except one close to me, which i'm not going to mention. i don't want to hurt people's feelings. that just doesn't help when you compare the stocks. hey, we're comparing stocks, not stores. here's the deciding factors. this is because i love regional/national plays b.j.'s operates 180 warehouse clubs in 15 states. mostly in the northeast and southeast.
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costco has 557 worldwide, they're more concentrated in the west and south. retail stocks tend to run out of room to run higher when underlying companies expand. walmart peaked when they were basically in every state. b.j.'s plans to reaccelerate the store growth. costco is opening 15 this years, but it's three times the size as b.j.'s. it's only opening twice as many new warehouses. by the way, b.j.'s had always had a problem trying to site stores. they can add stores, because real estate is cheaper. that's not the case a year ago. but b.j.'s is a better company, b.j.'s trades at 12 times expected 2010 earnings, coastco at 18 times. costco is rich. again, because everybody loves the product. but the difference is not justified given the similar growth.
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9% for costco, 8% for b.j.'s. i told you b.j.'s has superior execution with store units. i think the valuations will reverse themselves and b.j. will trade at a premium. or at least not such a big discount to costco. here's the bottom line. b.j.'s is a contender for discount king and definitely the best warehouse club stock. better than costco, maybe not as a company, but certainly as a stock. robert in california, robert. >> caller: hey, a big boo-yah to you, jim, from carlsbad. >> holy cow, our first caller from carlsbad. >> caller: i used to live in iowa. about 25 years ago i noticed casey's convenience stores, and they've been growing by leaps and bounds. i've been in some of the stores, and they have maintained earnings and value throughout the economic downturn. what's your take?
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>> i have always liked casey's. i think you have a good call. i like it more than pantry. i think you nailed it. i don't know how much more i can possibly add, other than the fact that robert in california has what i call horse sense. okay. let's go to frank in new york. frank? >> caller: yeah, jimmy, boo-yah. >> boo-yah, frankie. what's on your mind? >> caller: what do you think about the supermarket sector, great atlantic in particular? >> i thought there was a good call to be had in this, but this is a company that lost its way. winn-dixie, which reported yesterday morning had a better quarter. the pecking order is krogers, then safeway, then super value, then winn-dixie, and then great atlantic and pacific. better than all of them is whole foods. forget about the ceo who has a political view that's a little off-course, i like whole foods. it's the battle of two wholesale retailers.
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i'm taking costs off my lost at discount king. my nominee from tonight, i'm keeping b.j.'s in the game. stay with cramer. coming up, the madness goes nationwide. as jim takes your calls from all across cramerica. >> boo-yah too ya from st. louis. >> boo-yah from seattle. >> in an all-new quick-fire "lightning round." and later, cramer puts the charts against the fundamentals on an all-new "off the charts." all coming up on "mad money."
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that's rapid-fire stocks, i tell you whether to buy buy buy or sell sell sell. i don't know the callers or their stock questions ahead of time. my staff prepares the graphics on the fly. we play until we hear this sound, then "the lightning round" is over. are you ready, skee-daddy? it is time for the "lightning round" on cramer's "mad money." i'm starting with lisa in maryland. lisa. >> caller: jim! a huge pink boo-yah to you. i love -- i love your stay mad for life book, and i am a subscriber to your action alerts. >> thank you so much. that's where i send out the e-mails beforehand, and we're doing okay this year. thank you so much. >> caller: my stock is mdvn. >> i feel like this is a speck stock, you know it's not making any money.
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you know it's got some revenues. i would tell you as long as you recognize this is your speculative option, lisa, i will bless it. if you're using it as your pharmaceutical or medical device, no-go. it does not take the place of a bristol-myers or stock like that. ron in pennsylvania. ron? >> caller: ron from erie, p.a. big boo-yah! >> from erie, we never get any calls from erie. how have you been? >> caller: living the dream. how about you? >> i'm doing darn good. >> caller: tell me what you think about f.l.y.? >> no, robin, it doesn't fly. you don't want this. this is in the aircraft leasing business, and i've been burned, sizzling, fooled by that group. i'm not touching that one. no way no how, to quote -- who is it the lion or the tin man? no, it couldn't have been the tin man.
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he was much more coherent. how about will in oklahoma? will. >> caller: hey, jim. >> will. >> caller: first time caller will, and i want to give you an oklahoma, moved here from dallas, home of the dallas cowboys boo-yah. >> let me tell you, will, you might have the opportunity of lifetime, because there's talk i'm going to go to the university of oklahoma soon to do my show. just idle chatter, just twitter. go ahead. >> caller: the company i work for, unp, right registered today when it backed off a bit. should i hold? >> well, i've got to tell you, that's a should have, would have, could have situation. you did it. congratulations on a great trade. union pacific is a great company that i think literally -- -- let me make it very clear -- any pullback i want you to pull the trigger. i think there's more room to run for union pacific.
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let's go to scott in minnesota. scott. >> caller: boo-yah from five-mania land, jim. >> i was going to give you an adrian peterson boo-yah to finish the oklahoma loop. >> caller: will c-span recover to the 20s or am i doomed? >> you are doomed. i would rather -- look, here's one. i would rather watch c-span than own c-span. and i'm speaking about the network versus the ships. no, man, i'm going to sentence you to watching c-span before you pull the trigger on c-span. stay awake. here's one, kyle. in florida, kyle. >> caller: how are you doing, mr. cramer? a big south florida boo-yah! >> south florida just rocks. what's up? >> caller: my stock, alcoa. i believe that an increased demand for cars will push prices of aluminum and steel over the
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next year higher, but if the dollar bottoms out near these levels, should i reconsider my long-term position of alcoa and u.s. steel? >> i think alcoa is literally dead money. i don't care for it. u.s. steel can make a comeback, but why should we buy second best of breed when we can buy nucorp. he's dynamite. let's go to tom in wyoming. tom. >> caller: hello there, jim. >> yeah, tom. i'm all focused. what's up? >> caller: i'm looking at this atlas pipeline company. i watched you yesterday, talking to the ceo about gas and the only way you're going to move gas off them fields is you've got to have pipelines. what do you think about atlas pipeline? >> you know where i'm going to send you, i like to go to kinder morgan energy partners, knp.
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8% yield, and you've got a toll -- it's going to make you money, no matter what. richard in california. richard. >> caller: a very grateful boo-yah! >> well, thank you, you're welcome boo-yah. >> caller: i forgot to mention that. jim, first of all, i want to tell you i love your style, i love your show, and that i learn more watching your show than ever did attending the wharton school. >> really? wharton had better cheesesteaks nearby than i have, but i agree with you. what's up? >> caller: i'm watching hxl, i thought that would track boeing, but where is hxl? >> boeing has been moving step by step in a slow fashion up to $48. and hxl stays at $11. i think boeing is too high, because they can't ship the dreamliner. i don't want to be in hxl.
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hey, go into honeywell. i yone that. hey, dave cody, he's shooting the lights out, he was next door to me and i kept playing it over and over again. kay in florida. >> caller: hi, jim, boo-yah. >> boo-yah, kay. i'm reeling from a $15,000 loss, and i want to know what i can do with the $9,000, what little i have left. i wonder about another bank like fnfg. >> first niagara? they just bought the bank in my old hometown, it's got a dividend. it's got the big branches from pnc that the justice department had to split up. think it might be best in show. i'd like to pull the trigger right here. it's got great pin action. how about brian in mississippi? brian. >> caller: yes.
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>> brian. >> caller: big boo-yah from mississippi. >> oh, mississippi oh, man, tupelo, hit me. >> caller: i've got a question about bz, hold or sell or buy? >> let me tell you ole miss, i i think ole miss that stock up already. that stock is up 1,000% for the year. i can't come on top of that and say, listen, it's too cheap. i would prefer you to buy wy, i missed that one, and i feel bad, but, hey, sometimes you just get had. how about we go to norman in kentucky? norman. >> caller: hey, jim bo. >> what's shakin' there, partner? >> caller: a big boo-yah from louisville, kentucky. >> louisville, one of my favorite towns. what's up? >> caller: i want to ask you about the ticker d.a.n., dana holding corporation.
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>> interesting speck on the return of the trucking and car business. i think it's right. i also like ford. i like ford. i gave him a twofer, because he's from louisville. i need more calls. i'm just getting started here. i have cake batter all over my pants. i'm not going anywhere, can't even do my fantasy link until tomorrow, and "the lightning round" is over. 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.
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but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network. only from at&t. others by the car of their dreams. during the lexus golden opportunity sales event, you can do both.
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special lease offers now available on the 2009 is 250. i switched to a complete multivitamin with more. only one a day men's 50+ advantage... has gingko for memory and concentration. plus support for heart health. that's a great call. one a day men's. i'm not showing you a chart tonight. i'm showing you the chart. the go-to pattern that you can use right at home, home gamers. all you have to do is trace it and you'll know you have a keeper.
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this chart comes from an old friend and a wise man who happens to be one of the greatest technicians of all time. and i'm talking about a guy you probably heard of if you watch the network, and that's john bollinger of www.bollingerbands.com. who introduced me to john many years ago put it, bollinger is one of the most intellectually honest technicians i know. he's a true student of stock market history and a pioneer in technical an less. when i got in this business, i never made a move without looking at bollinger bands. he's given a chart nice and simple. when you see this pattern, you buy. what's so fabulous about this chart? you can see a lot of these in the current market. it's called a completed basing
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pattern. take a look at cisco, you're going to catch this pattern. what makes it so bullish? after a big decline, followed by what's called the base, then it breaks out above that range, okay? here's the breakout. pulls back but right to the line, and once again begins to move higher. you got your entry point. bollinger likes buying on the final upturn because it represents the greatest risk/reward. if the stock falls and makes a new low underneath the immediately prior low, then you know you're wrong and you got to sell, okay? you don't want to take a lot of pain. if the stock sinks below this line, bollinger thinks it's sunk. that move down tells you the buyers aren't as interested in the blowout rally isn't happening. but it's only a short distance between where you would boy and where you made a mistake.
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the reward could be monumental. when the stock doesn't drop, you can catch a rally larger than the stock's trading range before the breakout. bollinger knows this stuff. best of all, you don't need any fancy trading programs or knowledge to make this work. there is no mumbo-jumbo chicken gumbo. you can plot these charts at home. you can trace them and just remember when you see this bollinger pattern, you know it's bullish. "mad money" is back after the break.
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money." i'm jim cramer. see you tomorrow. we're out here looking at bones just because they're inside you doesn't mean they're protected. oh, ladies. let's say you have osteoporosis. i do. you could be losing bone strength. can i get it back? (announcer) ask your doctor how to help treat osteoporosis with once-a-month actonel. actonel is clinically proven to help reverse bone loss and can help increase bone strength to help prevent fractures. so you can get back some of what you lost. do not take actonel if you have low blood calcium, severe kidney disease, or cannot sit or stand for 30 minutes. follow all dosing instructions. stop taking actonel and tell your doctor if you experience difficult or painful swallowing, chest pain or severe or continuing heartburn. these may be signs of serious upper digestive problems. promptly tell your doctor if you develop severe bone, joint or muscle pain, or if you develop dental problems,
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