i'm jim cramer. 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 a little money. my job isn't just to teach, but to entertain, too. call me at 1-800-743-cnbc. right now, two shortages are defining this market. a new home shortage and a gold shortage. they are sending strange signals and the market doesn't know how to interpret them positively. not negatively. witness the bruising the averages took today. dow dropping 115 points. s&p giving up .81%.

nasdaq falling .66%. every sell-off is justified but some are more justified than others. this wasn't one of them. let me tell you why. first, the rally in the philadelphia housing index which broke out this morning before pulling back this afternoon, and the rally in gold which is threatening to break out are both good things, not bad things. more important, they are the actual real tells of what's going on underneath. it's just that so few people believe in the housing recovery. most people think a rally in gold has to be bad for stocks. wrong and wrong. let's explain what is actually happening here. lately we have seen pronounced positives in the housing including numbers today showing 1.82% jump in u.s. home values. biggest gain since 2005 when the housing boom was raging. plus yesterday, toll brothers, luxury home builders, said every single area was strong,

something confirmed today. the federal survey showed the biggest gainers were in arizona, nevada. that's been ground zero for no recovery. the importance of these numbers cannot be lost on you. while we also want to see new home sales and permits go higher because that means more construction jobs, employment, rising home prices matter a lot more than rising home starts. that's because more than 10 million people are under water in their mortgages in this country. 10 million people trying real hard to figure out why they should bother paying their interest and not just walk away. others are trying to do a short sale. trying to sell their house. banks take a hit. banks have been dragging their feet endlessly on those deals. if you think your house will break even or go higher in value, keep paying your interest. according to zillow which monitors this issue closely, 400,000 homes moved from the red to the black. that's huge. it can break the cycle of shadow inventory and the newly above

water homeowners, most importantly, will be willing to spend money to make their houses more attractive. this is the key underlying current in american consumer spending today. i think it is behind the surge in spending from paint to furniture. think of williams-sonoma yesterday. and weyerhaeuser at a new high today. it could be worth it. you put in money and you may get more out of it. how about gold? we have a major rally in precious metal and many people don't understand it. if they did they would be more inclined to buy the stock market more than sell it. i know, counterintuitive. while we have been conditioned that gold is something you buy as a safe haven, gold is what you buy when you think your currency is about to be debased. a lot of currency debasing can be a good thing for the global economy in a deflationary environment. i think there is tremendous gold rally happening because of gold

buying from all over the world precisely because of this race to debase and the inability to find gold in more stable places without spending a fortune extracting it. supply and demand. normally i would worry more about debasing with europe, a giant dollop of currency debasing may save the euro more than destroy it. how can that be? simple. gold's rally is telling me that the european central bank will ultimately end up printing a lot of euros to bail out sick countries there. that's a positive, not a negative. again, i take my cue from the market and the dashboard i have explained to you many times. the fxe, it's been moving up, not down as you would expect if inflation were to rage or the euro were going away. let's put it together. the simultaneous rally in gold and the euro tells me the germans recognize if they will save the euro they have to stop fighting the spaniards and

embrace them by giving them money and giving the banks a bailout. i'm pointing out housing and gold, two positives, to distinguish between the minor chords and the major chords in the symphony of the stock market. the minors are the housing. remember banco santander is a key to the market. it dropped sharply and rebounded during the day. as long as it remains momentum and euro stays stronger and gold climbs i'm listening to carmen. i know he's french. i think the sell off is only a minor chord. the big issues are going the way of the bulls. i listen to the minor chords like whether ben bernanke can ease further, something i don't consider as meaningful as goings on in europe. minor chord of bullard speaking on squawk box today. i have to get a handle on this.

i also listen to the librettos of individual stocks like hewlett-packard that gives the appearance of a sinking ship but maybe can't be bailed out. if it is, it's not near this level. too much tech is going too high during the 10% rally. the right thing to do for stocks in the group is sell. never forget that housing is the backbone of this country, accounting for a huge amount of consumer spending, something i learned listening to home depot conference calls and was the proximate cause of the downturn. as long as housing is on a recovery path our economy will stay there though it will be slow going. on the other hand, i worry about europe. there is a direct correlation between the 10% rally here and the decision by the germans to capitulate to weaker countries and speak in unison. at the same time let's not forget if you want banks to lend more aggressively, they have to have homes less under water. housing can save or hamper bank of america.

in the end i care much, much more about what's happening in europe than what's happening here. at this point only europe can throw the world back into the great recession. i care more about banco santander than i do about banco america. nothing more than profit taking after a gigantic run. nobody ever got hurt taking a profit. i'm not judging anyone at home who wants to preserve gains. but today's drubbing hasn't changed this market's tune. the major chords are the ones i'm dancing to. sure, we have to make a rihanna-like appeal to germany. please don't stop the music. from what i heard today the band is playing on. chris in west virginia. chris. >> caller: boo-yah, this is chris from west virginia. how you doing? >> mountaineers unite. what's up? >> caller: my question is about microsoft. after the struggling reports

from dell and hp, you know microsoft has these new tablet coming out and the new logo coming out today. i was wondering, do you think this is going to help microsoft recover? >> well, i was dazed and confused by how bad dell was and i was sent off the deep end by how horrible hewlett was. it's had a big run. it's inexpensive but i no longer think it's one i want to buy at $30 given the fact two of the biggest companies they are affiliated with are [ screaming ] >> a sound is worth a thousand words. jude in new jersey. >> caller: your staff is terrific. i have an easy question for you. soros is investing in manchester united. is that a good investment? >> i pulled up one of the members of the u.s. olympic team

that got the gold. she was telling carl quintanilla my partner that she thought manchester united was terrific. it's terrific to watch. it's not terrific to -- i'm not going to say invest -- buy shares in that company. i'm a seller, not a buyer, if i had the opportunity to do anything on it. as market seer rihanna warns and she's done great prognostications here, please don't stop the music, germany. there are major and minor chords we should be listening to. learn the difference. >> announcer: coming up, cloud conundrum. the bulls and bears are battling it out over the cloud king. is it time to ride to cloud 9 or will it descend back to earth? don't miss cramer's earnings exclusive with salesforce.com's ceo next. and later, speed dial? sprint was nearly disconnected. after betting big on the iphone

and shoring up subscribers, the shares have dialed up a double in 2012. tonight, cramer speaks to the ceo behind the transformation to see if this rally is still running. plus, crisp quarter. hain celestial soared to a new all-time high after serving up tasty results when reporting. can they continue to feed the insatiable hunger for shares? don't miss cramer's exclusive with the ceo, fresh off of earnings, all coming up on "mad money." ♪ >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. ♪

>> few things are more stressful than owning a battleground stock. if you look up that phrase they might give you salesforce.com as the definition. i think it's terrific.

enterprise software as a service play that's the king of the cloud. it's got amazing software, fantastic management. revenue growth. this stock has been a terrific long-term performer but it's been stalled and it's down over the last 12 months including an after hours drubbing despite reporting blow away operating cash flow orders and sales. let's talk to the founder, chairman and ceo to find out more about the quarter and where the company is headed. welcome back to "mad money." >> thanks for having me. >> second quarter revenue growth was outstanding. most of the tech companies i dealt with had flat or declining revenue. who are you taking business from and where are you getting the numbers? >> we are having a great year, jim. you can see the numbers. 34% growth for the quarter was amazing. that's 37%, just like you said, on constant currency terms. we are winning major deals. we won our largest chatter

deployment ever at nestle. over 300,000 users. we won a deal at allergan. it's coming at the expense of the traditional enterprise software companies. the world is going to the cloud. companies want next generation solutions to connect with customers in a whole new way. salesforce.com is delivering that in spades. we have really honed our focus more than ever in sales, in service, marketing and we are helping these companies find their next generation revenue streams. we did a survey of our customers. they saw 47% growth on average. that's amazing. that's 47% more growth than their peers received. >> i need this because i've got everybody's attention and they want to figure it out. kimberly-clark. great quarter. cites salesforce as a reason.

what did you do for kimberly-clark? people say, jim, you love salesforce, what do they do? >> we are seeing it over and over again. we talked about kimberly-clark here on the show. they had a need to do exactly what i just said. they need to connect with their customers in a new way. the world has changed. we can enable them to do that through ipads, iphones, android devices. their sales forces, service organization and the marketing organization is reaching out through the network and in person and through social media. they are able to drive that top line number. >> it was this quarter. you've taught me the holy trinity. social, mobile, cloud. these acquisitions of which some people say he's overpaying for this and that. those are involving getting all three. you believe you have to have all three to be a 21st century tech company. >> jim, it was only a few years ago we were on the show talking about we were about to achieve our billion dollar run rate.

you can see, jim, in the next quarter we'll be at the $3 billion run rate. that extraordinary growth has been fueled by exactly what you have just said. that is, companies want to become social enterprises. they want to use the power of social to connect with their customers and they recognize, just like kimberly-clark did, if they rebuild systems using salesforce.com and our sales, service and marketing products they will increase revenues. kimberly clark did it. all of the customers are doing it. >> i have gone through the numbers. operating cash flow. people at home. ocf is the number one way i measure companies. 136 million. unbilled revenue increases, terrific. deferred revenue up 43%. they pick at everything, mark. this time people say you have to ask about the nongap earnings per share expected 31 to 32. he missed. i expected 34. he missed!

did you miss? >> well, jim. you have to recognize that we are making a major investment in the future. that's how we are achieving this top line growth. our revenue growth is kind of unparalleled. it comes at a price and that's why you don't see the dramatic increase in gap earnings. in nongap earnings you see that growth. we delivered 200 basis points improvement this quarter which is pretty solid profit growth for salesforce.com year over year. we'll continue to deliver bottom line growth and deliver world class top line growth, too. you have probably seen this year we have increased guidance by more than $100 million. >> you know i look at the numbers and at one point, each time you give us more numbers. the bears, look, we have to mention them. we're in jellystone national park for a moment. this time in the wall street journal. his revenue per employee is disappointing. is that a metric we should use to judge salesforce? >> no.

you should focus on are we achieving market share and top line growth? the wall street journal cited an analyst from bernstein. we have 44 analysts that cover us, jim. you know that. five of them have sells on us. he's one of the five. i would like you to go back and look at all of his reports. you can tell me, are they accurate? his research speaks for itself. >> year over year the stock is not up that much. he's been negative the whole way. >> he's been negative -- >> he's been wrong about the numbers. >> he has not been accurate. >> okay. that's fair enough. now, i want to talk about social media and marketing. social media has now become, let's say a despised class because of facebook. is social media a money maker? where do you fit in facebook? exact target?

millennial media? people have lost fortunes here. >> social media is the future, jim. let me tell you ibm completed an incredible ceo survey and ceos now say there are two critical things they need to do to connect with customers. one is salesforce automation. i'm a huge fan. the second is blowing out social media and connecting with customers on those social networks as well as using the social networks inside their companies. now what happens when you do that? you get extraordinary growth, extraordinary productivity and also better customer relationships. salesforce.com at its dreamforce conference september 19th, it will be the largest vendor-led tech conference ever. we expect to have over 70,000 people in person in san francisco and tens of thousands more online. we expect more than 100,000 total attendees. we'll announce the new marketing cloud which is about how to leverage social media to boost top line revenues. that salesforce marketing cloud which we are going to announce

is already managing more than 10% of facebook's ad spend. that's amazing. and the other thing that's really cool, jim, is we have bought two world class social media marketing companies. radiant six and buddy media. we've put those together and we'll introduce this incredible new salesforce marketing cloud. when you see it, jim, you will see just like salesforce for sales is a must have in a company, salesforce for customer service and call center is a must have in a company and salesforce for marketing will absolutely be a must have. i'm really excited. >> what would happen if you decided to please -- let's not be pejorative, but the nitpickers by deciding you will slow revenue growth and flip into earnings? what happens to salesforce? does it become hewlett-packard? >> it's a great question. what happens is this is the greatest opportunity in enterprise software. we are in the renaissance right now. we have seen great new

opportunities. are you willing to give up market share in the future and revenue in the future for profits today? that's the question that's on the table. i say, no. i say we have got to own the future. we have to own those future markets and that means we have to increase our sales organizations, increase our marketing organizations and we need to buy hot new companies so we can create these next gen products. we are creating a world class company. you go back and look at oracle, s.a.p. and microsoft when they were our revenue level, they didn't focus on profits. >> yes they did. >> they focused on revenue. >> you're right. i handled the microsoft deal bringing it to goldman. that's all they looked at. i was fretting. where's the dividend? chairman and ceo of salesforce.com. good luck at dreamforce. great to see you. >> see you september 19th, jim. >> thank you very much. after the break i'll try to make you some money.

>> announcer: coming up, speed dial? sprint was nearly disconnected. but after betting big on the iphone and shoring up subscribers, the shares have dialed up a double in 2012. tonight, cramer speaks to the ceo behind the transformation to see if this rally is still running. later, crisp quarter. hain celestial soared to a new all-time high after serving tasty results. can they continue to beat the insatiable hunger for shares? don't miss cramer's exclusive with the ceo, fresh off of earnings. all coming up on "mad money."

one of the greatest comeback stories i have seen, sprint, the nation's number three wireless provider has seen its stock double since last time we talked to the ceo back on may 8th. it was $2.35. now it's at $4.79 after going to $5.49. easy to say you missed it and move on. that would be a mistake. sprint is in the early innings of an incredible turnaround. don't think of sprint as a trade. that's what many people are doing.

it's a speculative investment. if you have olympics on the brain sprint is not doing the 40, not the 40 meter. it's running a marathon. it actually seems to be pulling ahead. what's driving this move? sprint has been winding down the costly nextel business which will be finished by next year. the only wireless provider in america offering unlimited data and the iphone, something coveted by bandwidth hogging smart phone users. they have reported breaking key metrics including the highest ever average revenue per user which increased. just as important they are cleaning up the balance sheet. the stock was trading $2. people were concerned sprint may not stay afloat. now the worries, i believe, are a thing of the past. sprint announced it would retire debt coming due in the next three years. who would have thought that? don't be scared by sprint's terrific rally. don't be scared away.

the stock pulled back nicely. this could be the right entry point. don't take it from me. let's hear from dan hesse, the ceo, to find out more about the turnaround. welcome back. >> hi, jim. good to be here. >> i want people to be able to spot turnarounds. tell me if i have the right recipe here. kind of one of those google recipes. one part service, one part new product and one part balance sheet. are those the three things that distinguish your turnaround? are they all in good shape? >> of those three, they are all important. the most important is service. we are in the service business. the first phase of our turnaround and you're right, it is a long-term turnaround with three phases. the first phase with investors took four years. at the beginning of 2008 we were not only last in customer service and satisfaction in the wireless industry, we were last by a lot. recently the american customer satisfaction index recognized us as the undisputed number one of

major wireless carriers and the most improved u.s. company, period, in customer satisfaction across all 47 industries studied. the only company that went from last place to first place. that took four years of hard work. the reason it's important is because our business model is pretty simple. it is about attracting and retaining customers which is all about customer service. good customer service costs less. when we were number four of the big four in customer satisfaction, we were spending twice as much on customer care as we are now. it's very important to the balance sheet and the financial performance of the company as well. as we talked about, we are beginning the second phase of the turnaround which is the investment phase. if we looked at ourselves vis-a-vis our two big competitors they had a few things we didn't have. number one was the iphone. it was going to cost a lot of money to carry the iphone. we wanted that. number two, they had one network

platform. we had two. so they cost a lot of money to keep those two networks going. we needed to spend money to go down to one. also they were investing heavily in lte 4g and we needed that. so we needed to stabilize the company, in essence get to the point at the end of '11 that we could enter phase two and invest a lot of money. >> they are investing very heavily in 4g. the lte. are you behind them now, dan? i was going to save it for my biggest worry. i know they are spending like crazy. as good as you're doing, you don't have their firepower. >> you're right. we started later than they did because quite frankly we didn't have the financial wherewithal. then at the beginning of the year. we also wanted to wait for something extremely important for us. that was a capability we called sprint direct connect which is a

very high quality push to talk capability on the new network. because a very important element to us financially is trying to recapture as many of the customers as possible when we turned their network off. >> that's nextel. >> nextel, that's correct. one of the things that's encouraged investors this year is recapturing a very high percentage of customers last quarter, 60% of them, better than double of the historical recapture rate of the nextel customers. >> in fairness, last time we interviewed you, you were worried about it. you said, look, if we don't get that rate up we won't be able to make good on promises. was that the service in that new system you had? because my take is that that's three times better than i thought you would get. three customers for every one i thought you would get.

>> what we have done is we've refocused our activities toward recapture and acquisition, if you will, of the nextel customers versus churn reduction or just saving them on the network. historically, as long as we had to keep the nextel network going we wanted them to stay there as long as possible. we reduced over the four year period by almost two-thirds, 66%. having sprint direct connect capability on the cdma network gave us a competitive advantage we never had before. we are executing on that plan well so far. it's no guarantee of future success, but the first couple quarters of this year have been strong. >> people told me you overpaid for apple. people said it's a make or break thing and it will break them. apple, the decision. how fabulous for you? >> it's been very good for us. it's made a big difference in our brand. we have seen improvement in customer satisfaction, customer

care. you are continuing to see very strong numbers. what a lot of customers or investors were concerned about is the commitment level, how many we had to commit to selling over a four-year period. we are well ahead of that so the volumes have been high. in particular what you look at to how profitable a decision that is to carry the iphone is what percentage of the iphone customers are new customers to sprint. bring in new revenue. we have been running 40% of the customers, the iphone customers are new to sprint. that's roughly twice the rate of our competitors. out's very strong. so far, so good. it's been a very good decision. >> one last question. t-mobile offering unlimited data. verizon or at&t being able to drive prices down by spending more money or the nextel, next level of turn-on, which of those are keeping you the most worried, most up at night? >> boy. i think they all do. what we can control is our own

execution. so what i tend to think about at night and in the morning is just making sure we execute on our plan which is implementing network vision on time and on budget and recapturing a high percentage of customers on the sprint platform. >> it's been a remarkable turnaround. i never thought you would come on. you came on, stuck your neck out. it's been a winning strategy. thank you for coming on the show. >> thank you, jim. >> it's not over. you heard the vision. they are getting the nextel customers, capturing that. they have apple. the iphone is working for them. i think it is early innings. i know you didn't catch it at two but i don't think it's going back there. maybe four is a pretty good level to buy it. >> coming up, crisp quarter. hain celestial soared to a new all-time high after serving up tasty results when they reported. can they continue to feed investors' insatiable hunger for shares?

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i may be a well preserved man but in spite of my strong spirit my staff is on the search for talent. i'm worried after the latest round of auditions. take a look. >> i'm talking about banco santander. >> i'm talking about banco santander! >> banco santander! >> i'm talking about banco santander. >> banco santander! >> a special shout out to br524 for getting his kids interested in investing. keep the tweets coming. [ bell ringing ] >> it is time. it is time for the lightning round. you say the name of the stock. i don't know the calls or the name of the stock ahead of time. i tell you whether to buy or sell. when you hear this sound -- [ buzzer ] -- then the lightning round is over. are you ready, skee-daddy? time for the lightning round on cramer's "mad money." starting with ronald in louisiana. ronald. >> caller: hello, jim. i want to thank you for everything. i'm very grateful. >> i have a great staff that helps tremendously. what's up? >> caller: i own shares in aig. >> okay.

always have to play with an open hand. today my charitable trust did a little bit of selling. just a little bit. because it's run so much. i still think it's good. mike in new york. mike. >> caller: meli. >> this is ebay without discover of latin america. i'm not as keen on it. i would like you on ebay. steve in florida. >> caller: booyah, jim. the stock is frx. >> carl icahn has done the work. he's the right guy to be with. [ buy, buy, buy ] [ buzzer ] >> oh, no, i'm not done. odie in alabama. >> altria. >> i am recommending a cigarette stock after this decline.

that, ladies and gentlemen, is the conclusion of the lightning round. [ buzzer ] >> announcer: the lightning round is sponsored by td round is sponsored by td ameritrade. vesting tools of walt

nothing better than a red hot secular growth stock with

the underlying companies charging ahead. take cramer fave hain celestial. the natural and organic food outfit you may recognize from soy dream, greek gods yogurt, earth's best baby food. corn and soy prices have gone through the roof. hain still reports a fabulous quarter. on top of that the company announced it is buying brands from premier foods and a great deal that should add 25 cents to hain's earnings per share. what's the secret to the success? this is not just a food company. it is a play on one of the hottest trends out there. something that can trump this miserable drought. i am talking about the embrace of natural and organic food to

the point you can have hain's products in walmart, target, kroger. that's why you have a spectacular 280% gain. not an error. in april of 2010. it's up more than 33% since last time we spoke to the ceo after the last terrific quarter. let's check in with the ceo to hear more about where the company is headed after the quarter and the deal with premier foods. welcome back to "mad money." >> how are you? >> have a seat. i will say it. congratulations. it's up on the quarter and it's worth congratulating. >> great year, not just the quarter. >> you're right. your conference calls are works of art. you have a moment in the call that might typify where we are going. i go to portland, maine. i have been going there for seven years. what changed in that good american city? >> i have three kids that go to camp in naples, maine. every year i have to visit the local walmart super store.

this year i walked through walmart and i was amazed to see close to a hundred of our skus in the store. as i walked through naples, maine, not new york city or los angeles, california. it's not portland, oregon. let me tell you something. i cannot believe how the shelves were picked apart whether it was greek gods, terra chips. everything. >> i've been in a walmart in massachusetts, it had nothing two and a half years ago. this is happening right here and >> that's our big growth. number one, we were all about whole foods and still are. today with walmart, kroger, target, amazon. three years ago we sold no products to amazon. one of our top five customers today. eating healthy is a trend. listening to my conference call

last night, i said 48% of consumers buying natural organic products are 40 and under. >> and your demo. >> the demographics of who will be buying. how we build brand equity with them, is tremendous. listen, tomorrow on cnbc you have a lot of people talking about health care. it starts here with eating healthy. >> one of the things that impressed me about this acquisition, it seems at this point you want to be a global food company. not unlike kellogg, general mills and heinz, but you want to be all natural. the acquisitions are not in america. >> when i started this company in 1993, first and foremost, my common denominator back then was being the largest natural organic food company. that's what i want to be. there are many times -- >> not genetically modified. >> this is a product today. if you look at hain, 97, 98% of our products are gmo-free. >> which people care about. >> there is a bill coming into

play in california which will be important. the united states, other than third world countries are the only country that allow gmos in their food. i say where do the allergens come from. kids with peanut allergies comes from genetically modified ingredients. it cost us 15% more to have gmo-free corn. do we spell it out on this product? yes. it's got to be gmo-free. it's going to get bigger and bigger. >> worldwide. every time i see you there is someone with an advertisement for you. last time it was pink slime. this time j & j does advertising for you. >> i'm just absolutely amazed. j & j, great company. they have had their issues. we all have our issues. on the call last night we got called out. here again we all have babies. i have four children. you have two daughters. johnson & johnson, no tear shampoo. they have formaldehyde in their products.

again, take your formaldehyde out but don't announce it. here we have earth's best products. listen, we have had diaper rash. we know about diaper rash. >> turning to my executive producer. >> we know about chlorine and diapers. these are natural ingredients. that's something earth's best products. there has never been formaldehyde. i would never allow it in the company. >> you are not afraid to shut down product lines that aren't making money. >> again, i'm not afraid to shut down product lines that are not making money. we own a good part of a chicken business that's growing nicely. there were many, many calls to get out of the uk. you don't know what you're doing. get out of the uk. now the uk is a profitable business. we went into the sandwich business there. we didn't succeed. we surrender and move on. we are about building brands. that's what hain has done.

i believe in brand equity. we have had a very successful blueprint in the u.s. and we believe coming across the pond we can expand upon that in the uk. >> most companies i deal with don't have brands up double digit. you have 11 brands up. >> 11 brands up double digits. four or five that are up mid single digits. the whole thing today, consumption. our consumption up 14% overall 10%. look at the big food companies today. they are trying to get 1% growth. consumers are eating products out there still. we have not all got on massive diets and said, what's happening? the conversion to natural, organic, healthy foods, fresh prepared foods. stay tuned to fresh soups instead of canned soup shortly. you will see a big transition. that's the next big idea. fresh soup versus canned soup. >> irwin simon, president and ceo of hain celestial. stay with cramer.

earnings reports from hewlett-packard and dell back to back. oh, how the mighty have fallen. reminds me of data general. digital equipment. symbol dec. these were two proud and powerful tech companies. digital equipment toppled ibm

with the speedy mini computers. data general, the soul of the new machine. the most reliable boxes. so good michael bloomberg selected them as the platform for the first bloomberg terminals you got at your office. you could take it on the road. both companies developed proprietary technology to put them above the competition. they were the belles of tech. the ones you reach for on any good tech news. there was such good pin action in both. [ bowling pins ] and then they were gone, just like that. defeated by more powerful yet cheaper personal computers with commodity, not proprietary technology. the model evolved and obsoleted. then the companies that ran hardest with it, ibm, hewlett-packard and dell. eventually ibm realized it had no real value added when it came to personal computers. they sold the pc business for $1.75 billion.

ibm has been getting a higher multiple ever since. the last few years the stock has been a total home run. dell and hewlett-packard stayed with personal computers. hewlett-packard had the superior printing business. it had a consulting business but made its bread and butter in the corporate pc market and consumer pc market. they spread it through the enterprise. hpq went the other way from ibm, doubled down when it merged with compaq. dell was the cheapest and best. michael dell sampled them cheaper and became the dominant consumer brand and the chief rival of hewlett-packard and the enterprise. both dell and hewlett-packard tried to branch out to higher value products. hewlett-packard bought a consulting company to compete with ibm and accenture. they provided more value on big contract wins. well, hewlett-packard took a big

write-down on its consulting business and dell isn't getting the big wins. neither was able to break away from the core hardware business. hewlett-packard made the decision to overpay for autonomy shelling out $10 billion for a software company. i don't know what it was worth but not $10 billion. we had a horse race over the pc champion. apple came with game changing technology with the iphone and ipad. poof, there went the business and the consumer they had. they now seem like two goliaths to apple's david. not unlike what digital equipment and data general became when there was the one-two punch in the late '80s. this time proprietary was a better university. people say, listen, you're nuts. don't worry. stop that. don't worry about hideous quarters. they will point to the balance sheets as evidence, but data general had a fabulous balance sheet. they lost the technology battle to the better mouse trap.

that's all there was to it. obsolete tech stocks never die. they just fade away. it's happened again with two disastrous quarters. hewlett-packard and dell are well on their way to being the next data general. without some miracles the end will be similar. digital equipment, just disappeared with the remains sold to, alas, compaq. they now rest in peace at none other than hewlett-packard. stick with cramer. road trip buddy. let's put some music on. [ woman ] welcome to learning spanish in the car. you've got to be kidding me. this is good. vamanos. vamanos. vamanos. gracias. gracias. gracias. ♪ trece horas en el carro sin parar y no traes musica. mira entra y comprame unas papitas.

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it's got that sweet honey taste. but no way it's 80 calories, right? no way, right? lady, i just drive the truck. right, there's no way right, right? have a nice day. [ male announcer ] 80 delicious calories. fiber one. the "mad money" family got bigger this week. welcome to bryli kathleen, an angel. and congratulations to kyle and gillian. sprint has come down a little. no mission accomplished sign yet. salesforce.com. if you want to own the stock, do it deep in the money calls and hain, what can i say? it continues to do the right thing. don't forget. hewlett-packard tells you that many tech stocks have run too much. it's okay to take a profit. do you have your gold? make sure you do