from the heart of detroit to the health of the country, chevy runs deep. i'm jim cramer. and welcome to my world. >> you need to get in the game! >> firms are going to go 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! hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends, i'm just trying to save you some money. my job is not just to entertain but to teach and coach. so call me at 1-800-743-cnbc. on a day where the averages got pounded in the morning when european news predominates and rebounded later in the day as the american recovery comes to the fore, dow closing down 7 points, nasdaq sinking .16%, isn't it worth pondering whether this market is about to repeat

last year's trajectory all over again? remember a year ago? we took off like a bat out of hades, and then we ran smack into a vicious bear market. the industrials, the banks, even the oils all cratered because of european woes. tech was awful! led down by the semiconductor group with a contagion that spread everywhere except apple. now fast forward to 2012. once again, we have taken off with great gusto, the best rally since 1997 and it's been across the board with the financials and techs leading the way. and the industrials like caterpillar and honeywell following close on their heels. in fact, only the natural gas stocks have been left behind because the price of the fuel has collapsed. meanwhile, a rip-starter for last year's biggest losers like alcoa and bank of america. so given the similarities between this january rally and the move at the beginning of

2011, i think it's absolutely reasonable to ask whether this current selloff represents the beginning of something horrible, even though it was benign at the end of the day, maybe a reprise of 2011, especially because, once again, it's europe that's causing it, it's the bond vigilantes, those who seek to bust the treasuries of country after country, can get away from greece and are now circling around portugal. can 2012 be that different from 2011? don't we have to give up the ghost just like last year? isn't it foreordained, isn't it written? i say not so fast. i want you to think of the world as a four-legged stool made up of europe, the united states, china and the emerging growth countries. okay? four-legged stool. at the beginning of last year, the u.s. was doing nothing at all. europe was doing well enough for their central bank to raise rates twice, or at least the central bankers thought they were going well enough.

china, meanwhile, had to slam on the brakes to cool off an overheated property market, and the emerging markets, brazil to india, they had to raise interest rates, as well. in short, at the beginning of last year, one leg of the stool was wobbly, us, and the other three got chopped off. now let's look at where the world is today. europe, of course, mired in a terrible recession. i don't think it shows any sign of ending. some would say it's accelerating, along with the mandated austerity programs. these countries seem to know only how to cut growth in order to balance budgets and not encourage growth to raise tax receipts that can also help balance budgets. you know, after the close today, the united states was also showing numbers that the treasury has to raise less money. why? because receipts are good. that's not the way it works in europe. a lot of this is the angela merkel effect as the whole european system seems to be hijacked by this woman who is so given to brinksmanship, the only time anything gets done is when

they're right on the precipice. a la portugal right now or italy and spain. on the plus side, the european central bank has begun to undo the foolhardy approach of the previous regime, creating a lifeline to banks that has allowed some progress to be made. enough progress to make even a company like caterpillar believe that europe's economy can turn the corner in the not-too-distant future. and those guys are very realistic out there in peoria. how about the united states? we're enjoying a nascent growth spurt in oil and gas drilling and a remarkable turn in nonresidential construction, witness abb trying to buy thompson betts today. thompson betts, that is a total nonresidential construction deal. after last week's positive earnings news, including commentary from eaton, which we heard sandy cutler on the show, caterpillar, cooper, unbelievable. and honeywell. there can't be much doubt this resurgence is for real. we still need more job growth in

order to turn around the resistance to housing. but that can happen. in fact, tr horton says it's already happening in a very positive conference call last week. what about china, which is so important to everything from the metals and energy companies to tech to building? even starbucks to coach to mcdonald's. we hoped this would be the year that china would step on the accelerator. right now it's really tapping more lightly on the brakes. the emerging markets, however, they're cutting rates and we're beginning to see healthy signs in the countries, signs res natded in the quarters we have heard so far this year. so we added it up and what we see is a mixed picture with europe falling, maybe falling hard. the u.s. slowly getting better. the emerging markets struggling to improve and china moving along, not strong enough to ignite inflation but also not strong enough to be the world's engine for growth. it bothers me. china is key. in this world, the bears who have been so absent this year now have a cause celebre and it's portugal. yep, the bears can use that as a

wedge to stop this bull market in its tracks or at least they think they do and they certainly try in the morning. will we fall down the 2011 rabbit hole? i think it's likely we do very little. i read the s&p oscillator, get it delivered every weekend, it was a plus 7, has been almost the entire year, and that's plagued us, because it says, look, the market is overbought, moved up too much, too quickly. nonetheless, cycles like aerospace where boeing is in full production. the autos, existing car population over 10 years old. housing stock is depleted and new homes aren't being built with alacrity, and shadow inventory is unusable, dangerous, without services and as we saw in cleveland, subject to being demolished. under this scenario, what i see is an uneasy balance that can be tipped mainly by europe. witness honeywell ceo dave cody saying all bets are off if europe goes into severe recession. or positively impacted by

chinese rate cuts and a continuation of the strength in the emerging markets and, of course, continuation of the recent rally in america. in fact, what we saw today was a total microcosm of this market. as even the clock seems to be divided by europe. as long as european markets are open in the morning hours, we're terrified what could happen over there. so we sell u.s. stocks with european exposure, along with the s&p futures. but as soon as europe closes, we start to forget, we get amnesia and at the end of the day we think of portugal like sardines which is not that much, except when my mom made me that lunch with king oscar sardines, i was always embarrassed because it smelled so bad. greece feels like an afterthought. we google to see if it's defaulted. did we forget, have they defaulted or not? you wait long enough, and events that haven't happened, they start getting baked in, yeah, i think they defaulted last month. all in all, i think it makes for a push right now. it would be terrific if the

germans would allow for boosting inflation in europe which would tip the scales immediately. but this morning it was about that not happening. the rebound in the afternoon was about the amnesia factor. as we forgot about europe and focused on the good things happening everywhere else. unlike 2011, i think the afternoon is right! let's go to josiah in my home state of new jersey. >> caller: boo-yah, jim cramer. last year i shorted bank of america and jp morgan in february. what do you think of bank of america's future valuation now that they have added christian meissner? >> well, i don't think one man really matters that much. i did think the bank of america downgrade by goldman -- it might work. look, i am a u.s. bancorp, wells fargo afficionado, owned by my charitable trust actionalertsplus.com.

hey, let's go to steve in pennsylvania. steve. >> caller: a super bowl boo-yah from indian valley! >> no. a rehire juan castillo 8-8 season coming up again steve arooney mcfaddy. >> caller: make the giants and the points, jim -- >> i'm not allowed to talk about a strategy i would bet the house on. i can't even go there even though i think the giants are going to win so -- i'm not allowed to go there, steve. as much as i would like to tell everyone to put everything on the giants, i can't. >> caller: i have another question. as i add dividend yielding stocks to my portfolio like pfizer, altria and general mills, i can't help but worry about some head winds. when do the big fund managers who move the markets start looking at $100 oil, a slow u.s. recovery, european economic woes and the political theater in the u.s. and start selling into this market? >> well, i think the problem is, steve, what are they going to do with the capital?

put it in the five-year, which like yields nothing? you've got to break out a microscope for what the alternatives are, steve. and that's what matters. remember, they shop in the aisle where they get the best return and that's the aisle where the altrias are. you've got to stay there. today was a microcosm of the market. the four legs of the stool are making all the moves. and i got to tell you, right now, it seems pretty darn steady. "mad money" will be right back. coming up, head of household. one consumer products play is already up 20% in the past three months. find out why cramer thinks it could be just getting started when he highlights it, next. and later, indiscretionary spending? the only things we really need are food, water and shelter. but as the economy recovers, big-ticket spending on wants is coming back. all this week, cramer's finding the companies behind the toys for the wealthy. plus, the apple effect?

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around this time every quarter as we comb through the barrage of recent earnings reports, there's one thing you should always be on the lookout for. and that's improvement. even companies with lousy track records can be worth owning, as long as they're getting better. that's the thing about the stock market. it will appreciate a bad company that's becoming decent a lot more than, say, a good company that's only remaining good,

particularly if you know the products. so when newell rubber maid actually managed to report a terrific quarter on friday, caused the stock to soar nearly 8% in a day, it caught my attention. i was riveted by this. they have great brands in housewares, ones you and i use, home furnishings, office products, brands we all know, cookware, i love my calphalon. sharpies, people laugh. grayco strollers. haven't used them that much lately, as well as car seats. as well as tools. but some could never deliver on the promise of its brands, because it's been so poorly organized. poorly led. at least until now. because with this latest quarter, we have real evidence that newell rubbermaid has finally gotten its act together. think of this stock as akin to a

c minus student with b pluses with extra credit, coming in early, speaking to the teacher, a major improvement that makes parents happier than a straight-a student bringing home another a. and just as important, rubbermaid fits into our home improvement thesis. remember a few weeks ago when we ran a week-long series on housing and how the best way to play it was with companies that help fixing up homes, either to sell them or make them better. we felt lowe's and maybe home depot had run too much. with rubbermaid, we have a new way to play it. you need to see the return first, though. that said, this stock has lot a ton of money over the years. you have every right to be skeptical. in fact if you go back to the initial merger in 1999, within two years, newell shareholders had taken a 50% loss. rubbermaid shareholders down 35%. and as soon as the company seemed to be turning things around after years of struggling, they were almost

obliterated by the financial crisis. not only did newell rubbermaid hit you with a 69% dividend cut in may of 2009, man, was that bad, like getting hit with a frying pan followed by another 21.5% cut in 2010, the stock was thrashed, cut, mutilated. from its peak in 2007 to its trough in march of 2009, newell rubbermaid lost 85% of its value. bottoming with the market at 4.71. the stock has come back with a vengeance, nearly tripling from its 2009 lows. but a lot have, right? and the dividend has started to come back too, thanks to a 60% boost in the payout last may, signaling that things were getting better but the yield up 7.7%. used to be a magnificent yield here. in my view, you haven't missed a thing. it remains 40% off its 2007 highs and thanks to the recent turn-around efforts, this is a much stronger business than five years ago. so what's different? why am i now ready to endorse a company that's been a perennial

screw-up? it's not just because of the housing recovery, although that helps, especially since the company gets 70% of its sales from the u.s. but if that were the only reason to get behind newell rubbermaid, i would have included the stock in my fixer up series three weeks with ago. there are two other changes that make me feel much more positive about this company. last year, they announced a major restructuring effort called project renewal that is designed to reduce the organizational complexity, slash its bloated sales and administrative expenses. the company consolidated its three main operating groups, one for home and family, office products and tools and hardware into two segments. newell consumer and newell professional. i tell you, they could split these two and bring out value immediately. and they also cut their 13 global businesses down to nine. this was unwieldy, this company. this move, 13 to 9, allowed the company to lay off about 500 workers. we're not pro layoff here, but pro profit. these are the recent, most obvious efforts. the truth is, newell rubbermaid has been gradually improving itself for years but the evidence has been hard to see

until recently because of weakness in the broader economy. in the old days, this stock used to trade based on weekly resin prices. now its far less hostage to commodity costs. remember, this is all plastic, right? you used to say oh, how much is that costing? natural gas is what makes this stuff. how about the second element of the term? that's the new ceo, michael polk, who took over in mid july of last year. i'm thinking this guy is the real deal, to tell you the truth. his conference call was great. polk has a vision to reduce exposure to unprofitable categories that face too much private label competition, a lot do, or too dependent on commodity inputs like resin costs, because so much are related to plastic resin. before taking the helm, polk spent eight years at unilever where as president of global foods, home and personal care, he was credited with transforming and making them a more competitive, faster organization.

the guy is real good. he has street cred in the group. exactly the leader they need right now. we also know the company is set to borrow low enough that it can be beaten. only 10% of sales come from western europe. and when they reported on friday management factored in and was vehement about how bad europe is. you know what that does, it makes us less worried about europe because they dumped it out on top of us. newell rubbermaid has cleaned up its balance sheet and even can raise the dividend. even though the stock spiked on friday, i think it's darn cheap. it's a 10.3 times forward earnings with a 9% long-term growth that i remember when this company used to have a premium p/e, meaning the price to earnings multiple was higher. i believe the estimates are conservative and could easily turn out to be a number the next quarter or two that are way too low. here is the bottom line. newell rubbermaid may have

believe the stock still has room to run. it has fabulous brands. the brands were never diminished and now finally has the solid management and organization that was needed to be able to sell these brands. throw in the rebound in housing, i think that makes newell rubbermaid a buy. no reason to chase. take your time with this one and wait for market-inspired weakness before you back up the little tykes truck. after the break, i'll try to make you even more money. coming up, indiscretionary spending? the only things we really need are food, water and shelter. but as the economy recovers, big-ticket spending on wants is coming back. all this week, cramer is finding the companies behind the toys for the wealthy. and later, the apple effect? with consumers buying apple devices in record numbers, cramer is looking at one company that helps apple suppliers keep up with demand. don't miss jim's exclusive with kla-tencor's ceo, just ahead.

all coming up on "mad money." this is $100,000.

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♪ i'm always on the lookout for the next huge theme, next multiyear trend that can help make you money in the stock market. and today i think i found one. it's all about wants versus needs. for years, ever since the great recession hit, we have had to focus on the wants side of the equation, the nondiscretionary spending, the stuff you buy at a drugstore or dollar store that you really can't live without. but lately something has changed. people are buying more of what they don't need. the ultra discretionary consumer is back, and he's flushing his money down the proverbial toilet at rates we haven't seen in ages. and that's why all week we're highlighting show-off stocks. because we need to think like

the 1%, not the 99%. in order to figure out how to profit from the profligate spending of the wealthy. or if you find that too galling, consider this a market that now, animated by the spirit of the late, great stock guru, a man we have always relied upon, biggie smalls, aka the notorious b.i.g., as in -- ♪ my car go 160 swiftly >> biggie may be gone but there is no question we miss his flashy ways here in the usa. what a terrific almost diogenes-like legacy he left us. with the richest of the rich spending money on fancy toys and big-ticket items, what could be better? honestly, what could be better than a company like brunswick corp, bc, the number-one maker of boats on earth, along with boat engines, billiard tables, fitness machines and bowling equipment. okay, i'll admit the bowling business may not be ritzy, but it's the marine segment, the

fishing boats and motor yachts, bet you don't know motor yachts was a word that make up the bulk of business as boats and engines account for 75% of the company's sales. in fact, this may be the single-most brazenly discretionary company known to man. just listen to how brunswick's management described their business, and quote -- i saw this and said i've got to do this segment here. we laugh at this -- it's a quote. not me. we don't sell anything anybody needs, we sell things people aspire to. and going through the economic conditions we went through really tested our management team and tested our ability to manage this company as we went through the difficult economic conditions. end quote. i can't write stuff better than that. yeah, brunswick was tested. but they passed the test. during the downturn, the company took out $450 million of fixed costs so now that the business is finally coming back, they'll be more profitable than ever. and that's exactly what we saw when brunswick reported a juicy upside surprise last thursday.

they delivered a smaller than expected loss, boat sales up an astounding 20%. and thanks to the cost cuts, brunswick's operating margin increased by more than 600 basis points. this is now a lean, mean, yacht-making machine. and let's be honest, there is nothing more discretionary than a boat. if you can flush $500,000 down the toilet and not care, you are ready to own a boat. by the way, that's the reason i could never bring myself to buy a yacht. i'm too darn cheap and anyway i'm more of a boston whaler kind of guy. how the heck do you think i got rich in the first place? it wasn't by buying boats. it was by getting the early bird specials, eating from the unlimited pasta bowl at olive garden and, of course, shopping at dollar tree. we all know that. but don't go by my parsimonious habits. i think you could have a real opportunity to make, well, a boatload of money from purchasing bc stock.

why do i believe so strongly that the boat business is ready to roar? just like the average age of our cars on our country's roads -- it's up to ten years. the average age of the power boats in our marinas has increased from 15 years to 21 years. that's the average age. that's as old as miami vice, when boating was a necessity. and now that our economy is improving, especially for people at the top, it's a powerful incentive to replace those boats. we hear all of the time from obama about the haves and have nots. the haves are trying to figure out which republican they can vote for while they're tooling around in the 35-footers. it gets better. in the marine industry, 30% of the dealers have failed since the start of the recession. at the same time, brunswick's dealer counts remain flat. in fact, it's increased ever so slightly. in other words, they're the last boatman standing, kind of like bubba gump's shrimp boat and that's allowing the company to take a lot of market share in the boat business and boat engine business, something we

saw in 2011 that could accelerate further in 2012. last year, sales for the overall marine industry were flat, but brunswick saw its net sales increase by 10%. brunswick last week reported the strongest quarter, at least in terms of operating performance, since 2007. and thanks to the company's ability to execute and restructure, management is confident they can sustain revenue even in a relatively flat marketplace. in other words, if the boat business is just treading water, brunswick will still be able to move forward, just like they did last year. what if the economy accelerates? this is the kind of ultra discretionary business that's extremely sensitive to even the slightest improvement in the economy. and brunswick now dominates the industry in a way that would have seemed hard to imagine just a few years ago. so if rich consumers keep opening up their wallets, brunswick is poised to make a fortune. can you imagine if the 1% grew to, say, 2%? wowza. bc goes to the moon. occupy the yacht club!

seven years ago, this was a 50 stock -- that's right, $50 stock. the brunswick today is much stronger than back then. more dominant dealership base. sells at 42% less than when it wasn't nearly as good. meanwhile, the boat market which declined from 2005 to 2010 has not only bottomed, it's roaring back to life. and as business gets stronger, brunswic poised to do better than ever. how about the rest of the company's divisions? the exercise equipment, along with the bowling and billiards, you know, staying fit and healthy is another theme we love here on "mad money," so it should come as no surprise that brunswick's life fitness business has been driving growth in sales and earnings. it's not because of what i bought to stay as a trim 66-year-old. their bowling continues to maintain strong operating margins. speaking of no worries.

a on a day when we got hammered from europe, europe makes up just 18% of brunswick's engine sales, only 6% of boat sales. this company will not be brought down by greece. they aren't big bowlers, either. which explains why people from europe seem very effete to me. i got bowl cred. i got my own ball, and very important, as those who know, i got my own shoes! so far this year, brunswick's already run up about 16%, but it's barely up 6.5% in the last 12 months, so you haven't missed much. stock, $20.97, nearly seven points off its high. i think there is a lot of room to run. selling 11 times forward earnings, 13% growth rate. the bottom line, the wealthy are once again opening their wallets to buy things that no one needs. that's right, the aspirational, ultra discretionary consumer is back and bigger than ever. and what a better way to play than with the best of breed boat maker like brunswick. the rich are not only getting richer. they are in your faces, showing you they're richer and there is no better way to show off your bling than by buying a brunswick.

judy in washington. judy! >> caller: hi, jim! love your show. >> thank you, judy. >> caller: question. berkshire hathaway b stock. is it a buy, sell, or hold? and i also understand that berkshire hathaway has large ownership in net jets? what do you think? >> well, net jets is not the driver here. these days it's insurance. pipelines in burlington northern. my friend wrote a terrific piece that i tweeted that if burlington northern would switch to nat gas train engines, it would mean a great deal. i think burlington northern is doing well. the company came out after the close and said that. i think the insurance business is good. and i reiterate i like berkshire hathaway. brendan in connecticut, please. >> caller: what's up? >> not much. how about you? >> caller: still pretty well. boo-yah to you. >> boo-yah. >> caller: hey, what's your take on companies that sell luxury goods, now that the economy is rebounding and consumers have more disposable income? >> well, i think what matters,

it's got to be ultra-ultra luxury. in other words, the more expensive and more ridiculous, the more likely it's going to be purchased. if it has any utile -- i'm not kidding about this. if there is any utility to it, it isn't bought. this is a bling economy. it's a poor economy and bling. one or the other. there is no middle ground. okay. the rich are getting richer and you may not love their flashy ways, but they can make you a little bit of money with their purchasing. like with brunswick corp! bc. stay with cramer. ♪ coming up, 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 you withstand your thunderous onslaught of stocks? and later, the apple effect? with consumers buying apple devices in record numbers, cramer is looking at one company

that helps apple suppliers keep up with demand. don't miss jim's exclusive with kla tencor's ceo just ahead. all coming up on "mad money."

it is time! it is time for the "lightning round" here on cramer's "mad money." i take the calls, and my staff takes the questions. we play this sound and then the "lightning round" is over. are you ready, skeedaddy? it's time for the "lightning round" on cramer's "mad money." i want to start with kevin in north carolina. kevin. >> caller: jim cramer, big wilmington, north carolina boo-yah. >> got rejected there in 1977 boo-yah. what's up? >> caller: qualcomm's earnings came out. apple did great. what do you think of the future? >> i've got to wait to see qualcomm. i think it's going to be good, but then what happens, you go to @jimcramer on twitter and people say hey, cramer says buy, buy, buy. no. i want to wait and see what they say. let's go to mitch in arizona. >> caller: boo-yah, skedaddy.

>> how are you doing, mitch? >> caller: everything is great here in northern arizona t-e-x. >> i think that terex -- i like manitowoc more than terex. casey. how about casey? >> caller: a big sunny boo-yah from the pacific northwest. >> beautiful out there. what's going on? >> caller: the company i'm looking at is guidewire software, twre. >> i don't know it. i don't know guidewire software. i've got to sic the team on it. don't know guidewire. got to come back. john in maryland. john. >> caller: hey, jim. >> john, what's up? >> caller: i want to give you a philadelphia boo-yah. >> excellent. >> caller: my stock is poly com. >> you know, it was a bad quarter. we got crushed on this one. bad quarter and then good quarter. you know what i feel? it's too hard.

this is that videoconferencing. just go on cisco has gotten inexpensive. how about kevin in wisconsin. kevin? >> caller: how are you doing, jim? >> kevin, i'm doing great. how about you? >> caller: not too bad. i'm out ice fishing right now, so i'm not doing too bad. thought i would take a break here between the fish. and i wanted to ask you about under armour. >> i liked that quarter. it was a very good quarter. why? because of innovation, because of compression, because of all sorts of new products they got coming out. because kevin knows how to play the game. if the ravens had been in the super bowl, i think you would have had it all going your way. how about brandon in minnesota. brandon. >> caller: big boo-yah from the midwest. >> good to have you. >> caller: first time caller, the young alpha on twitter. nog, northern oil and gas. >> everyone wants me to recommend this stock. i've got to tell you, a higher-quality play is eog, or continental resources. however, these stocks have to come down before i tell you to

pound the table on these. these stocks have just gone up. we're going to get a day where oil is down 2 bucks and they're going to be down 10% and that's when we'll -- mohamed in illinois. mohamed! >> caller: boo-yah, jim. how you doing? >> really good. how about you? >> caller: thank you. i deeply appreciate you and cnbc media for apple prediction. i made some serious money on your prediction, jim, thank you. >> excellent. >> caller: i want to know regarding ibm. >> i think ibm goes higher. i think the numbers are doable. i was quite pleased with the last quarter. i think ibm is doing everything right. that was a monster quarter and i think they'll deliver another one again. how about sal in oregon? sal. >> caller: boo-yah, brother. >> boo-yah, what's shaking, partner? >> caller: i need you bad. aries capital corps, a-r-c-c. >> this is another one, i've got to send you to annaly. i know annaly is going to do well and mike ferrell -- it's got a higher yield and i know it's higher quality than any

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so far there has been a rebound in semiconductors that signals a genuine turn in the industry. and you know what chip makers do with cash, they spend it on new equipment in order to get an edge on competitors because the semiconductor business is in a constant state of war. and in a war, you buy the arms manufacturers. that's why i think semiconductor equipment biz is one of the best places to be right now. witness the incredible strength in the best of breed semiconductor tools maker, kla tencor or klak for your home gamers, when it reported a positive blowout thursday after the close. by the way, this was the best quarter in all of tech world, save apple. kla tencor makes tools companies need in order to quickly manufacture chips while minimizing waste and catching defects in the finished product.

stock shot up 5% friday. but it's pulled back $1.26 today and i think you could be getting an excellent entry point here. you have to understand, klak didn't just report an upside surprise, it crushed estimates, delivering an earnings beat on a 65 cent basis with revenues coming in higher than expected. this was unbelievable. orders up 95% from the prior quarter. even better, the company's outlook for 825, $975 million in bookings left the estimates in the low $700 million range. i want to talk to rick wallace, ceo of kla tencor, to find out more about the spectacular quarter. mr. wallace, welcome to "mad money." >> hi, jim. thanks for having me. >> i've got to ask you, rick. how is it possible that you can do 95% improvement? i mean, what happened in your business that everyone just said i've got -- i need kla-tencor to survive? >> yeah. that was quite a stunning quarter we had.

we felt really good going in, but we were guiding up 25 to 45. but momentum built. i was in asia in -- for about a two-week tour in december and i kept hearing from customers more questions about delivery and about slots. and i think what they realized was, if they're going to compete in this mobility space, they just got to have our stuff. so really, the story for us is mobility is now driving about half of our business. and it's grown 35%. mobility, i mean, smartphones and tablets. and it's just on fire. and the equipment we've got has seen great market acceptance right now. so we're really pleased with our performance. >> would you say that i would need your equipment if i was trying to make smaller devices to make it so that the machine -- the hand-helds were lighter, or is it better resolution? why do i need kla-tencor to leap frog over the other guy in this arms race? >> well, so what happened with mobility -- take the tablet a couple years ago. it came out and people were excited and started using it and they said we need more

performance, longer battery life. so the chip guys said we've got to get to the next generation of technology. and when they do that, they realize they can't make a yield, make it work. and that's when they come to us. now you've got unbelievable growth happening in tablets and smartphones so they need more functionality and less power. the big thing driving it is power. we all want battery life to be longer. >> now, there is a world, i know it's difficult to talk about one particular client. i can mention, i know you can't. but apple. they're not the buyer of your stuff -- you have semi conductor demand. but is there room in this world for more than just apple? because the companies that need chips that kla-tencor can help them build are the ones that have to get back in this race and take business from apple. >> yeah, but it's not just one device that's doing well out there. you know, you look at hand sets kind of across the board, they're growing. it's true that apple has been growing phenomenally quickly. but they're not the only ones. and there are a lot of chip guys trying to provide for them. so you've got that. but e-readers.

e-readers were on fire last quarter and our stuff supports the guys driving e-reader. smartphones, android-based ones. they're growing too. so we saw a broad support. and we haven't seen that in a long time, the level of depth and breadth of the demand for our stuff. >> now, at the same time, your company uniquely among the technology world has always given a good dividend. it's always been important to you. >> right. >> why is it important to you, and why is it not important to so many of your compadres? >> well, i can't speak to the second half of that question. but we looked at it starting in 2005, and we said, look, we think it's responsible to return cash to our shareholders. we do it in two ways. we do buybacks and dividends. and we've got a growing free cash flow that's been growing 12% since 2000. and we think the right thing to do is increase our dividend over time, which is what we have done. to increase our total shareholder return. so we think it's the right way to run the business.

and we've got an incredibly strong business model that can support that. being a cyclical company, you've got to have a strong model, because you've got to support it even when the cycle is low. >> well, what's difficult for me to try to reconcile, you have a great dividend policy, but you also say, listen, we don't have that good visibility short-term, we have great visibility long-firm. >> right. >> you are unique. i don't know any other business in the world that has -- can't see for the next mile, but has 12 mile on the horizon view. >> yeah. that's absolutely true, jim. we cannot forecast short-term as we demonstrated last quarter. but long-term, the secular growth rate, i think we're in a secular growth rate for mobility right now that's a super cycle that looked like the '90s for pcs. that's where we're headed with all of these mobility devices. and so we're investing for that. but short-term, it will be bumpy. but we got huge backlog and great revenues so we can handle the ups and downs of the availability volatility of the order side.

>> thank you so much for coming on the show. >> thank you, jim. >> guys, you heard what he said. a secular super cycle in mobility. you know it, because you use it. i know it, because i use it. this is at the heart of it. kla-tencor. i like this stock. it just had the single-best beat, other than apple. stay with kla-tencor. stay with cramer. ♪ a refrigerator has never been hacked. an online virus has never attacked a corkboard.

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now we know where all that

display advertising money went to. it went to facebook. facebook commanding 28%, followed by yahoo, with 11% and the others in low single digit dust. that shows you how strong the facebook story is. in the last year, facebook doubled its revenues. and we're not talking about a double off a low base. its revenues are in the billions of dollars. this company is profitable and it's the real deal. but it would be very difficult to figure out how much it should be worth, simply because it's such a moving target. the possibilities for monetizing the 800 million facebook users, a number in which itself is a moving target, moving upward, are only just beginning. what matters, facebook is mainstream and popular even with the most conservative and stodgy of advertisers. don't believe it? facebook was called out on a procter & gamble earnings call as a cheap way to target your advertising at the right demographic. in a world where the television audience is going down and the magazine and newspaper audience is dwindling by the day. and the other web companies having either lost their way or not emphasized enough by the display ad game, facebook is

game, set, match for all of these advertisers. it wouldn't surprise me if facebook actually drove all ad rates down as television and print have to deal with the efficacy. facebook users magnify the numbers as more are friended. what about the million-dollar question, should you be on the deal? my gut reaction is yes but only if facebook's management team and the book runners aren't greedy. remember how ipos work. you want to engineer a pop, the bankers limit the number of shares they offer. it's possible to price facebook at $50 billion by offering, say, a tenth of the shares outstanding and then trade up to $100 billion in the after market by forcing big fund managers to go into the after market in order to pick up enough stock to make a difference to their portfolios. in that case, of course you want in on the ipo because you might get a double. but the way the deal works to engineer a spike from $50 billion to $100 billion is to cut everybody back, everyone, so shares can be very difficult to obtain. that's what happened with linked in.

of course they could bet retail investors would go anyway and take it to a level that's pretty crazed. that's what happened with groupon where you still got a pop but it's also zynga, mispricing at its worst. had to sell the former and the latter got back to even. there is no way to determine which route the bankers will take until we get closer to a deal. it's the amount of shares not the valuation that will let you know whether to put it, hold, or flip the facebook shares. so don't make a move until we hear that number. stay with cramer. my job is to find the next big sound.

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lipitor is fda approved to reduce the risk of heart attack and stroke in patients who have heart disease or risk factors for heart disease. it's backed by over 19 years of research. [ female announcer ] lipitor is not for everyone, including people with liver problems and women who are nursing, pregnant or may become pregnant. you need simple blood tests to check for liver problems. tell your doctor if you are taking other medications, or if you have any muscle pain or weakness. this may be a sign of a rare but serious side effect. [ man ] still love that wind in my face! talk to your doctor. don't kid yourself about the risk of heart attack and stroke. if lipitor's been working for you, stay with it. lipitor may be available for as little as $4 a month with the lipitor co-pay card. terms and conditions apply. learn more at lipitorforyou.com. everybody is so focused on europe versus the united states, i want you to focus on business cycles. think about what rick wallace, the fabulous ceo from kla-tencor told us. do you think the cell phone cycle is bound by europe? it clearly isn't. we have a lot of good cycles go