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 just want to help you make money. my job is not just to entertain you but to educate you. so call me 1-800-743-cnbc. sometimes investors get trapped on the wrong side of a trade. they get their heads blown off. today the market confounded everyone with the averages getting slammed for most of the day before going on to rebound hard in the late afternoon.

dow closing up 4 points, s&p down, nasdaq advancing .02%. all the bears were befuddled. stocks and ended up getting crushed. first let's set the day up. we had a ton of bad news this morning. i mean really bad news. i've been impressed all year with the pace of retail sales as expressed to me by the individual companies i talked to. yet today we got aggregate retail sales from the commerce department and they are just plain putrid. it's half of what we were looking for. copper fell again today, dipping below $49, critical level, after being as high as $51.50 last year. it seemed like copper was breaking out. then this morning the red metal was breaking down! third, we were looking for any resolution on the greek bailout when the european finance ministers get together tomorrow

for a confab about greece and whether they've cut the budget enough to merit more funds. what happened? the meeting got cancelled! they're having a conference call instead. that meant a selloff in the euro, which i said has to stabilize. when the euro is weak, these companies just don't do as well because when they repatriate their euros, they can't exchange them for as many dollars as they could if the euro was strong. the fxe, the etf that tracks the euro versus the dollar, dropped 70 cents. it was 132 and change last week. these are big moves. all of these negatives. >> the house of pain! >> were enough to send many a stock down for most of the day. then word of out of europe that

greek naysayers were getting a tad more positive about giving the country more euros. they got hurt but not nearly as bad as those targeting some individual stocks that they thought were ripe for a beating. allow me to explain. there's been a ton of talk lately that the smart money, typically described as the hedge funds, has started to short stocks aggressively, meaning they're now betting hard against the stock market and individual securities. you make these bets when you think a move up is unsustainable and you think stocks will reverse hard. but which stocks do they go after? what do they target? here's the irony. many managers don't just bet against the s&p 500. they pick on individual companies. i know what kind of stocks these guys go for. they look for so-called expensive names that seem to be ready for a fall, because they've gone up too much too fast and they think the fundamentals don't justify the

valuation. today was a real bad day for people who bet against these hyper momentum stocks. going into today's session, one of the most overvalued stocks out there was a brand new issue, michael kors. we would have recommended this a week ago but it violated our rules for not pushing a stock that sells for over twice their growth rate. all right, i missed it. but that's not the judgment you get from an experienced manager. if any stock is ripe for a fall, it's this one. it's going to rip your heart out! nope! not this one. kors supported a gigantic number today. it was a colossal earnings gain that included a phenomenal 35% growth in europe.

here you bet against a handbag maker. the darn thing surprises to the upside. the next thing you know it leaps -- no, it tears up $9! 27%. you might think that's from aggressive mutual fund buying but i think the marginal buying came from hedge fund managers who made a short bet and that short bet had gone awry. kors also shredded those who bet against fossil. it looked like the growth rate was slowing and the wonder story, spurred on by the once famous sitch from the "jersey shore" had finally played out.

when fossil failed to break down early, it led to a whole new level of short stocks. sell, sell, sell. sure enough the company took it upon itself on its conference call to be about as bullish as i've heard them, making clear that earnings are about to accelerate and that the very guidance issued earlier would be crushed by the next quarter. no ossification here for fossil. it was an accelerating story. it leaped more than $15! 14%, taking apart anyone who bet against it. i don't know if it's done going higher. what spurred the terrific growth? a gigantic surge in fossil's michael kors business! kors slew not one but two groups of short sellers. these short sellers probably feel like sticking their heads

into some airtight michael kors handbags, and who can blame them? netflix ramping up $4.74. a research house told you not to worry. meanwhile apple and chipotle, man, they started rising even before the greek word came out. it was that kind of day. bottom line. when hedge funds go after stocks they think have gone up too much and seem overvalued, they better have more to the negative story than too much price appreciation. memo to short sellers -- bet against companies when something's wrong, not when their stocks seem to have run up too much. trying to pick a level where a stock is too expensive is like trying to value a pollock, a van gogh, where the beauty is in the eye of the richest beholder. take it from this ex-hedge fund manager, who knows better. unless the darn thing is a forgery, you may just get your

head handed to you in a handbag! rachel in florida. >> caller: hey, jim, happy valentine's day. >> same to you, rachel. >> caller: with monthly retail sales missing expectations, should investors worry about the strength of the overall economy? >> i don't trust the commerce numbers which i regard as being -- they seem empirical. i regard the work i do from the bottoms up to be better. i'm not sweating the program. alan in illinois, please. >> caller: yes, jim. this is alan from chicago. booyah. i watch you all the time. i got a feeling, i know it's risky. looks like greece is getting a tad better. i'm interested in buying some more stock in the national bank of greece. what's your opinion on this? >> it's a decent spec. it's a $3 spec.

i think all these banks have to be recapitalized, which means they have to issue more stock and be able to make it so that their balance sheets are better. and, by the way, if they are kicked out of the euro, that's going to be devalued nine ways from sundays. a wise investor likes to know what he's betting against and that there better be more to the story than just the fact that the stock went up a lot. "mad money," we'll be right back. coming up, the big picture. cramer's screening a stock with a new movie franchise that could reach twilight status. could this big screen bellwether help you create a blockbuster portfolio? stick around to find out. and later, breaking up is easy to do? in relationships, calling it quits breaks hearts. but in the markets, it could have investors falling in love.

plus dow 17000? cramer turns to the technicals to see if the bears are retreating to their caves or preparing to claw their way back in a new edition of "off the charts," all coming up on "mad money." miss out on "mad money?" get your "mad money" text alert today. text mm to get cramer on your phone. the employee of the month isss...

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when you're trying to pick great stocks, you can't afford to be credulous. every time a company comes out with a new product or franchise, we subject it to a simple test. is it big enough to move the needle?

how much of an impact the event could have on earnings, not just headlines? could it provide a serious boost to the numbers or will it barely make a dent in the estimates? companies try to hype new products all the time. very rarely do you find a true needle mover, a genuine catalyst that could drive the stock much higher. however, that's exactly what we've got this time around with the hunger games, a new movie coming out in march, generating a ton of buzz on the street and in this case i think the buzz is actually justified because this film's a needle mover for the studio that made it, lionsgate, lgf for all you home gamers. that's why i think you need to get in this stock ahead of the march release date, even as they've already had a big run since the beginning of the year, rallying 35%. all on the buzz for "the hunger games." i had to go back about 25 years

before you say one that worked for me. the "harry potter" films were barely enough to move the needle with time warner why do i think the hunger games will be different? harry potter helped but it was part of a pastiche. lionsgate is a small, independent production company. market cap at just $1.5 billion. so it takes a lot less to move the needle here. that may be the secret. but there's more to it than that. for the last decade, lionsgate has had a volatile earnings history. over the last couple years the company was embroiled in a deeply entrenched takeover battle with carl icahn, which lionsgate finally won last year. meanwhile they've built a terrific tv business from scratch.

what makes this movie so big is the "hunger games" is based on the first book of a trilogy by suzanne collins, more than 23.5 million copies in print, the thing hollywood loves because there's already a huge fan base with built-in sequel potential. the story is about teenagers in the dystopian future who engage in an annual televised fight to the death with the winners securing food and other supplies for their home district. believe me, i was skeptical, but my 17-year-old told me that "hunger games" was a must read. i sat down to read it on a saturday and finished it sunday. i immediately got the rest of the trilogy, finished all in one week. these are some the most exciting books i've ever read, fabulous dark heros, tremendous tension, not to mention biblical and

mythological overtones. there's some pretty serious father/daughter discussions in my house. perhaps yours, too. lionsgate plans to turn this series into four movies and there's every expectation the first one will be a blockbuster. i've seen the trailer for the first one and watched it a dozen times. i'll be there opening night for lionsgate and i've only done that twice before, "terminator 2" and "titanic." let's say it grosses $200 million, that would be reasonable given the buildup. doable. the entire franchise could be worth $400 million to the company. that's just here in america. they've already licensed it overseas. lionsgate has 143 million shares outstanding. the first film alone could be

worth .87 a share to the bottom line. just one catalyst, albeit a gigantic one. there's a lot more going on. back in january lionsgate concluded a merger with privately owned summit entertainment for $413 million. in exchange they get the right to a bunch of titles, including the twilight films, another father/daughter thing i engaged in -- i do that stuff. stop laughing, i do! already the fourth largest -- sometimes -- franchise in box office history behind harry potter, star wars and james bond. it will help stabilize the company's cash flows, giving them the financial wherewithal to compete with the big studios. the company's already developing

more young adult pop culture books to adapt into movies in order to find the next "hunger games," though that might be too hard. this is not a company that's been hitting the ball out of the park. it reported a loss of a penny. analysts looking for a 9 cent profit. the stock popped 7.5% the next day! i think it was in anticipation of "the hunger games," as well as other titles in the pipe like charlie sheen's "anger management" debuting on fx in june and the final "twilight" moving coming in november. so do you buy it here despite the recent run? i think lionsgate is actually cheap at this level. this could be a $15 stock masquerading as an $11 and change stock. but i wouldn't mind waiting for a market-inspired pullback

before trying to build a big position. every once in a while there's a movie big enough to move the needle for the company that made it, and with "hunger games" i think it is a giant needle mover. the stock is the place to go every time this takes a dip between now and "hunger games" opens in a theater near you. after the break, i'll try to make you more money. coming up, breaking up is easy to do? in relationships calling it quits breaks hearts. but in the market, it can have investors falling in love. and later, dow 17,000 doubters? cramer turns to the technicals to see if the bears are retreating to their caves or preparing to claw their way back. [ male announcer ] there's been a lot of talk about the chevy volt lately.

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showing people getting together. that's why tonight i want to celebrate the notion of breaking up. not because i'm a heartless, jaded cynic, but because this show is about helping to make you money. while romantic breakups will put you in a house of pain, corporate breakups are all about a house of pleasure. when you and your girlfriend split up, cause for crying. but when a company in your portfolio splits up, you should cheer. just ask the shareholders of yahoo!. tonight i want to look at post, which was spun off to emerge as a small cap pure play cereal maker. breaking up, we'll let's just say it's never been sweeter.

call it breaking good, not bad. you know post is a house of some of the most recognizable cereal brands in america, including honey bunches of oats, total, pebbles, shredded wheat, golden crisp, grape nuts, raisin bran and honey combs. it's an iconic household name. yet despite the power of its brand, post has been one lousy performer ever since kraft sold to ralcorp back in august of '08. turns out the post-ralcorp deal was not a match made in heaven. post makes higher priced nationally branded cereals. while ralcorp liked the fact that post had heftier margins, they didn't know how to manage the business. for the three years post was married to ralcorp, there were all kinds of self-inflicted screw ups. ralcorp didn't support post's brands, they didn't spend enough money on advertising, something

that's absolutely crucial when you're competing against the likes of kellogg and general mills with gigantic marketing budgets. their stock was punished to the point where a breakup was the only move that made sense. post was spun off on its own separate stock just on january 27th and ralcorp only kept a 20% interest. it's like they didn't even stay friends and now they're talking trash behind each other's back. now that post is its own company, all the problems that held it back under ralcorp can be corrected and i think the stock has a whole lot more room to run. its stock surged almost $2. while i'm unhappy that the surge occurred before we could bring you the segment, i believe the run is far from over. you have to look at this breakup as being very similar to when tina turner left ike.

with post standing in for tina, rolling, rolling, rolling up the stock start. the company can spread its wings. we don't need another hero. when you look at post earnings before interest and taxes, now is a 16% margin. the company keeps 16 cents out of every dollar before you factor in interest payments and taxes. that's 8 percentage points from where it was before ralcorp bought the business. i don't see why post can't get that margin back up to 24%, especially when you consider kellogg and general mills have ebitda margins in the mid 20s range. post 11.5% market share. now the company plans to stabilize this market share and start taking share again. the important point to recognize here is that the expectations

for post are extremely low. so any improvement at all will be viewed as a huge positive. why do i believe post can turn itself around? because the new management seems to understand all the company's problems and what it needs to do to fix them. post has decided to increase its advising promotion budget by 400 basis points. ralcorp had dramatically underspent, which is a big reason why post lost so much share under their previous administration. plus, post has decided to invest heavily in innovation, something they haven't done for over a decade. i've got some ideas for innovation. yum. then there's pricing. historically post's sweet spot has been price points that are below kellogg's and general

mills but higher than private labels. now post intends to get back to that historical sweet spot and hopefully take some share doing it. i also am a huge believer in post's new management. the ceo has a long track record creating value through improving ongoing operations and taking strategic actions. he's a breakup artist supremo. quote, nothing is off the table, he said. obviously they have to wait a little bit, the tax laws. even though post moved up big today, still only 3 points from where it was spun off last month and selling at an 8% growth rate, not too expensive in the consistent world that is cereal. plus right now there's very limited analyst coverage and you want to buy post before it starts gaining sponsorship. here's the bottom line, breaking

up, it ain't that hard to do and sometimes it's extremely profitable, which is what i think we'll see now that post is independent. it could take some time for post to turn things around. i think the stock could drop back a bit because it rallied today for no particular reason but you want to be in this one before the earnings turn happens or alas you'll be burnt to a golden crisp or shredded into chaff, not wheat. let's go to steve in new york. >> caller: good evening, professor cramer. limited brands, parent company victoria secret. what a great day to talk about victoria's secret and limited brands on valentine's day. >> oh, right, i forgot what they sell there. >> caller: i've owned this stock for 25 years, jim. it's one of the best retail companies in the world. every once in a while i'll take profits off the table as you recommend but i always go back in and buy the dips. i've been richly rewarded for that.

the company is too darn large. it owns seven different divisions. wouldn't it be better for shareholder value to break the company up into two different divisions? >> as you know, les wexler, they named that med school after him in ohio state. if he thinks it should be spun off, it should be spun off. who am i to challenge one of the serial dividend raisers. if he wants to keep it together, i'm not one to challenge him. we're going to the bakken now. let's go to glen in north dakota. >> caller: glen, a big bakken booyah to you from the great state of north dakota. i'd like to wish my beautiful wife, joslin, a happy valentine's day.

i'm rocking the bakken out here. i heard of a possible takeover. do we buy or do we wait? >> whoa, whoa, whoa, we do not talk possible takeovers on the show because then we get everybody riled up and if there's no takeover, everybody gets unhappy. i have to come back. i do not know the oasis story as well as you do. we'll do the metrics versus brigham, whiting, continental resources versus eog and get back to you. memo from post to ralcorp, forget about it, breaking up isn't so hard to do after all! stay with cramer. >> coming up, are you ready to get charged up? cramer cranks up the voltage and goes electric on an all new hyperactive lightning round. and later, dow 17,000 doubters? cramer turns to the technicals to see if the bears are retreating to their caves or preparing to claw their way back

on an all new edition of "off the charts," all coming up on "mad money." [ sniffs ] i have a cold. [ sniffs ] i took dayquil but my nose is still runny. [ male announcer ] truth is, dayquil doesn't treat that. really? [ male announcer ] alka-seltzer plus fights your worst cold symptoms, plus it relieves your runny nose. [ deep breath ] awesome. [ male announcer ] yes, it is. that's the cold truth! [ tom ] we invented the turbine business right here in schenectady.

without the stuff that we make here, you wouldn't be able to walk in your house and flip on your lights. [ brad ] at ge we build turbines that power the world. they go into power plants which take some form of energy, harness it, and turn it into more efficient electricity. [ ron ] when i was a kid i wanted to work with my hands, that was my thing. i really enjoy building turbines. it's nice to know that what you're building is gonna do something for the world. when people think of ge, they typically don't think about beer. a lot of people may not realize that the power needed to keep their budweiser cold and even to make their beer comes from turbines made right here. wait, so you guys make the beer? no, we make the power that makes the beer. so without you there'd be no bud? that's right. well, we like you. [ laughter ] ♪

love is a many splendored thing. love is all you need. on this st. valentine's day we celebrate with a special journey. take a look. ♪ we belong to the light, we belong to the the sound of the words we've both fallen under ♪ ♪ i still haven't found what i'm looking for ♪ ♪ i still haven't found what i'm looking for ♪

♪ in your eyes i am complete, see the doorway ♪ of a thousand churches, resolution ♪ >> thank you, ben bernanke, for all the great work you've done to sustain this bull market. and now it is time for the lightning round! are you ready, skee-daddy? i'm going to start with justin in new york. justin! >> caller: hey, jim! big time valentine's day booyah to you. >> sweet. >> caller: yeah. i love you, your show and your books. >> thank you very much. >> caller: hey, you know. so, we're talking about apple play, i'm talking about tango.

>> that came public this summer. i have to do more work on it. people say it's the ultimate cloud play. let me do work on tango before i go tangoing with it. jules in louisiana. >> caller: a big bayou bengal booyah to you. >> what's your your mind, boss? >> caller: my stock is sasol. >> i've been a buyer of sasol. i like the yield. >> jim in florida. >> caller: booyah, jim. >> booyah. >> caller: my stock is cf industries. >> i'm not abandoning it but i do like the story, it could roll over a little. robert in connecticut. >> caller: jim, booyah to you. >> what's on your mind? >> caller: i would like your opinion on activision.

i'm not a buyer, i'm a seller. i think the gaming business is too difficult. i like simple. >> caller: booyah, jim. halliburton. everybody is killing this stock. >> halliburton, they were the guys that were not all that bullish about near term earnings. i've got to stay on hold. let's go to dan in colorado. >> caller: professor cramer, booyah from colorado high plains country. >> how's it going, man? >> caller: doing pretty good. i like cyber security. i granted it spec stock status. what do you think of web sense? >> web sense is good but i'm going to see your web sense and

raise you fortinet. let's go to david in california. david. >> caller: booyah from southern california. how's it going today? >> real good, thank you. how about you? >> caller: can't complain. last year you got my interest in these mezzanine investment companies and i ended up selecting prospect capital corporation. i like their monthly dividend and a real good yield. >> you're more on the case and more up on it than i am. i can't bless prospect. i got prospect and tango now i got to do work on. better to own it that you don't know it than cuff it. joe in new york. >> caller: jim, a great big west babylon booyah! >> what's on your mind? >> caller: wanted your prognosis on health south. >> talk about a stock that i got

wrong. i thought they were going to really just roll the money. i like the rehab care business. however, they didn't. i'm on hold until they give me better numbers. let's go to josh in arizona. josh. >> caller: yeah, booyah, jim. >> booyah, josh. >> caller: i wanted to ask you about the stock called egp. >> we recommend it when it's much higher yield. it has a smaller yield now. how did that happen? because of price appreciation. let's go to david in new york. david! >> caller: good afternoon, jim. this is dave from new york. booyah from new york. you're my teacher. first time i'm raising my hand. i like the stock tivo. what do you think? >> it's a pretty good. did have a big move.

i want a pull back before i can get all excited about it. that is the conclusion of the lightning round! >> let's go to kentucky! >> a hill billy booyah! >> here's a big las vegas bing bing bing, ching ching, ching booyah! >> long island new york, forget about it, booyah! booyahs come from all across america. let cramer help you channel yours.

yesterday everybody was talking about the big cover story from barrons this weekend, enter the bull. predicting the dow jones industrial average heading to 15,000 or even 17,000 over the next couple years, a lot of people scoffed, that the 15,000 target was like dow 36,000, the outrageously irrationally exuberant book written at the height of the dot-com bubble that forecasted massive gains

for years to come. that was right before the market imploded. but i think the time we're paid to always be more cynical, i think it's passed. it's only after the last dozen or so years where every bull market has been viciously torn to pieces, every shred of optimism has been beaten out of most investors that we're instinctively suspicious of anybody that says stocks are headed higher over the long term. for the dow to get to 15,000, it's a little less than a 17% increase where we are now and the prediction is it would happen over the next two years. we're only talking of annual gains of 8%. if some guy says the market will give you 8% annual return over the next 24 months and that's considered a super controversial statement? somehow considered dangerous? it seems like we've been scarred by the market's hideous performance. we're so traumatized, we can't recognize a potential bull market when it's staring us in

the face or goring us with its horns. being too optimistic has been dangerous. being a permanent bear, it has paid off big time. what if i told you our dozen years in the stock wilderness could be coming to an end and we could be returning to a general bull market like the '80s and '90s. i know it's tough for many of you to swallow. for those of you in the younger demo, you only know the bear market. for those of you trading in the '90s, it's so long ago that many of you don't remember. that's why tonight we're going off the charts to show you why the bearish patterns of the last 12 years could be coming to an end. and we're doing it with the help of scott redler, an excellent technician and chief strategic officer at t3 trading, in addition to being my colleague at realmoney.com.

check out this chart going back to 1998. you can see how we've been trading sideways. if you bought the s&p in 2000, you're back to where you started. no wonder people are so skeptical stocks can make you money over the long term. however, when redler looks at this chart, he doesn't just see that lost generation of stock investors. he's looking with the eye of a technician and those eyes see a pattern that indicates the sideways action of the last dozen years could soon be over, giving way to a much more bullish uptrend that could actually be sustained. the era of stocks is an asset class being dead, no money being made? he thinks it might be over. what makes redler think this? if you look at the peak in the year 2000 and the peak in the year 2007 right before the financial crisis, sure enough

there's that dreaded double top. we're still away from the high of 1576, but if we can break through the level of the double top, then redler believes the sky is the limit. the next stop could be 1,700. redler thinks that's doable. the reason? the incredibly powerful uptrend that began at the bottom in 2009. let's look at the uptrend, looking back at the s&p 500 going back six years. the long-term move higher that began in march of 2009, believe it or not, it's still very much intact. when you take this big picture monthly view, the action of the s&p 500 looks really fantastic to a chartist like redler. ever since the generational bottom, we've been making higher highs and higher lows, classic signs of a healthy up trend. the s&p has to break out of its

high from last year to continue the pattern of ever higher highs. once that happens, he thinks there's nothing standing between the s&p 500 and its all time high of 1576. keep in mind, this is a very long-term oriented monthly chart. many times on twitter people ask me what is the time frame you like to look at? i like to look at the long-term charts. i look to look at two years but i'm willing to go back further. if the s&p can break out about 1576, which is the level of double top from the previous chart, no ceiling of resistance left for the s&p. of course there will be pullbacks along the way, but his chart work suggests the era stagnant markets could be coming to a close. the bottom line, i'm not saying that this market will definitely go much higher but after looking at redler's chart work, you got to be a little less skeptical

about the power of this bull. or to put it another way, since the turn of the millennium, the s&p 500 has been obeying some kind of law of stock gravity where what goes up must come down. but now it seems very likely that gravity has been suspended and the s&p can have big multi-year moves higher. darn tooting. time to take a dis to isaac newton. they say money never sleeps. neither does jim cramer. ♪

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i never like having to tell you some stocks should go down. you might own them. you might therefore think it's my fault they go lower. believe me, i'm not that powerful. amazon and google disappointed badly in my opinion. they didn't deliver what we thought they would. i thought they should both go down and stay down. yet with the exception of today's minor dips, they've been creeping right back up. i struggle over these moves. if anything, things have gotten worse for these guys. google is about to close the motorola mobility deal for $12.5 billion. the problem is right now apple's pulling away and i don't think this deal will let android catch up.

nor do i like the google tv story. i want to see advertisers get higher rates online. i don't think these opportunities are as great as we once thought. amazon, i don't know. you got to believe they were wildly under promising in that last quarter but that's not their style. i think amazon like google is trying to take on apple, this time on the hardware side with kindle fire and i feel it is going to cost a lot more money to do so. amazon got knocked down today midday because bloomberg came out with what i thought was a blockbuster story saying the company has far fewer prime subscribers than many analysts think, maybe half. then the thing bounced back! finished down only 29 cents. that's nuts. that story was powerful. what's going on here? why have google and amazon been stronger than i think they should be? first, maybe they shouldn't have dropped as much as they did in the first place. these are still excellent companies with fabulous growth prospects. second, lots of hedge funds were

short amazon and google and pressed their bets when the companies failed to deliver. like kors and fossil, they're competing with each other to buy stocks. it's been a long time since we had investors say i don't care about amazon now, 2015 rules. under that rubric, maybe it's cheap. i don't like this kind of buy. 2012 has been a year where all is forgiven and forgotten very soon. why believe in that? stick with cramer.

after the close apple's ceo tim cook had a lot of good things to say about the momentum of the business. remember what i've been saying about apple. typically a stock would have gapped much higher. it took out my $500 price target. i think it's moseying its way on to $550.