american greatness for our children and grandchildren. god bless you and god bless america. america! and that was chris christie gives ag fiery of a speech as expected. what were your thoughts? >> i think it was effectively given. it was a little light on mitt romney, and in some respects, parts of it were a little empty. he talked about telling people to accept shared sacrifice, but he did not back that up with examples. he talked about cutting taxes,

seniors being willing to take on part of the burden. that's not what we're hearing from this campaign, we're hearing them attack barack obama. nobody is saying you need to september less in social security and in benefits. it was very well delivered. >> i don't know, i loved the second american century, and that sense of opt him, and having what he calls principaled compromise and leadership. that was his style in new jersey and i think that's what mitt romney is going to try to do. in some sense, this is the blueprint of what romney will do. most of all, principaled compromise and leadership which is exactly what president obama has not delivered. >> what struck me is what he did not talk about. not one single mention of the so called social issues.

if you think back to 1992 when pat bucanan gave the same speech about the culture wars and religious wars, the republican party is delivering a message much more focused on the economy instead. do you agree with that? >> no question about it. the republican party does not want to talk about social issues at this election. it was no accident that chris christie talked about the health care plan and we said we will not put bureaucrats between her and her doctor. that was a message to suburban women. >> this theme of truth telling will be a big theme. christie was a truth teller, paul ryan was, and mitt romney

as the financial guy, the turn around guy, is a truth teller. i think that christie was flagging. he was predicting the key themes in this campaign. >> larry, let me ask you about the truth telling thing. if you're going to tell the truth, wouldn't it be to say to seniors you can't grow as fast as they have been growing, you need fewer medical procedures. they're telling people within ten years of requirement will be protected. >> that's true and i think that's very good politics. but you're not going to -- >> politics are not truth. >> i don't know about that. he is saying in effect that down the line, entitlement wills have to be reformed. he is not being specific tonight, but he is says don't kid yourself, there is bankruptcy out there like i faced in new jersey and you will

face out here. in my way of thinking, you will see a cap put on social security benefits across the system. oddly enough, obama and republicans and ryan have a cap on the global spending for social security. that's different than taking their benefits aa way. i think what christie is saying is don't kid yourself about entitlements, budgets, and taxes, and it was a much harder hitting speech. i don't think he mentioned obama's name. >> once. >> but it was very clear who he was talking about when he said they this and they that. and he did say mr. president. i think that's really a much tougher hitting speech and i think quite effective. >> let's expand the panel, we have dan bartlet, and david bernstein, jared, what are your

thoughts? >> i think there is a head scratcher going on here. i think if you're one of these people not in the base and not responding to a lot of the red meat the way that larry kudlow responded, people are saying i don't get it, what's in it for me. there's a lot of 40,000 feet stuff. i don't know that people are hearing enough about solutions to the problems they face. in the job market, the mortgage market, just getting by day today. they're hearing about love and nice personal things about different people's attributes, and i think it could hurt them when people try to figure out what's in it for me? >> i can't agree with that. there's two objectives of this convention. the most important was delivered by the wife, ann romney, is can

you trust this man with the biggest decisions in the oval office. that's always the biggest hurdle. her job tonight was to say to the american people i know this man, you can trust him, and i think she effectively delivered that message. when it comes to christie, there's another major sentiment throughout the american people, and that is that washington is broken. and there was no better person to stand up and say washington is broken. i know the problems look impossible to solve, we did it in a state like new jersey with a republican governor who is conservative and a democratic state. i thought he did very well. john makes a point that it was a lot about chris christie, but i thought it was a powerful endorsement at the end. both achieved the objectives they were looking for. >> michelle, hang on one second, i want to answer my friend jared by playing a tape of what i

thought was the key policy in the whole thing about cutting taxes in the state and balancing the budget. i think we have that tape. i think this was the meat and the potatoes of the whole speech. >> they said it was impossible, they told me, to cut taxes in a state where taxes were raised 115 times in the eight years before i became governor. that it was impossible at the same time with a deficit. we have three balanced budgets in a row, with lower taxes, we did it. >> all right, again, i would say this is not a policy detailed blueprint budget. but what he's talking about there is the notion of lowering spending and lowering taxing to grow the economy and balance the budget which is essentially what he did in new jersey, and that is precisely what mitt romney wants to do for the country. >> i think those are great points, but you have to look at

some of the under lying realities. the unemployment rate in new jersey is 9.8%. 8.3 in the nation, and it's higher in new jersey than in michigan. i'm not sure if beneath the surface some of this "i fixed it" stuff works. the problem is that the tax cuts are so much deeper than the spending cuts, that the nonpartisan looks at this and say we're look at big deficits unless we get some of the supply side, magical stuff that you believe in much more strongly than i do. >> don't be surprised. you know there will be an economic growth incentive. don't be surprised if team romly and team paul ryan slash spending from the current services baseline more than anybody dreams possible. do not be surprised.

romney is -- that's romney's goal. he is a turn around guy. >> jared, you said i think independents listening will think "what's in it for me"? and i thought the entire speech was about saying the democratic party is always assuming people will be selfish and focused on self interest. >> i don't think it's about self interest. when you have politicians up there telling you they've broken the economy and we can fix it, that is very much the theme of chris christie, you have a responsibility to say how you will fix it at a level that people can relate to. if you're just talking about 40,000 feet up and a second american century. i get that, it's red meat and it resonates with me as well, but you're not answering what people need to hear. >> and michelle, i don't think

we should talk too much about self-interest. people want their lives better. whether it's cutting wasteful spending, cutting their taxes, they want that, but they also want effective public services. i agree with dan's point that the most important speech was ann romney, because what mitt romney has to do, he knows people are unhappy with the state of the economy. he has to be made acceptable, someone that swing voters can trust, and there is nobody closer to mitt romney than ann romney, so she delivered powerful testimony about him. >> absolutely. >> i think, also, my friend jared bernstein, who i love and respect, there's a lot of people -- >> i always get nervous when you talk about me like that. >> you should be, hear me well jared bernstein. a lot of people are worried

about the country. and the country's decline. and the country's bankruptcy, and the country's second tier status. it's not only what the government can do for me. it's what everybody will have to do to save this country from bankruptcy and second rate decline. >> larry -- >> i think you missed that point. >> larry, i want to respond because that was directed to me. can i respond? >> jared, go ahead. >> what is chris christie or mitt romney going to say? when are they going to tell them to take less benefits. >> can i react to it again to john harwood? if you look at romney and ryan's plan, they're putting a cap on the amount of money spent. >> but they're not telling the hard truth to specific people.

>> he's been very specific, people under 55 will be affected. >> that's ten years from now. >> the reason you do that is because if you don't, you become greece where you tell 85 year olds. >> this is a convention. the points that you're making are ones that will be litigated in a presidential debate. tonight, we're looking at this is where the narrative is set, the tone is set, you're trying to achieve very fundamental things. not the specific details on these cases or the points for seniors. i think anybody serious about entitlement reform will be inclined to support republicans and not democrats. >> factually, it's medicare, not social security. that's what cap is about. i think dan is right in normal times. these are not normal times, and

larry i thought you gave a couple very impassioned sentenced. i don't want to be pegged in a selfish or self interested mode. i agree that sacrifice is necessary, but also necessary is compromise. when i heard chris christie talk about that, i know it resonated with you. i love to hear it, but i don't see that at all in the spirit of the kind of politics that we're hearing now. >> okay, guys -- >> they're talking about massive. >> thank you. >> robinhood in reverse tax cuts -- >> larry, john, dan, much appreciated. good discussion. remember there is two more nights of this. next up, back to the gulf coast and hurricane isaac. we'll show you which parts of the country are in the target area. this video came in just before

nightfall from the alabama coastline. the winds are picking up and here comes the rain as well.

i want you on this screen,

this dock is being destroyed wave by wave. this was the scene in gulf port, mississippi. hello and welcome back to the cnbc special report. we're going to take you live to new orleans. todd gross is here with where it is heading. >> breaking news weather wise right now we have another tropical storm which has just formed in the last half hour or so according to the national hurricane center, but this one is likely to loop back out to sea. wait until you see the radar, it has really organized over the course of the last few hours. the storm center first moved in on the extreme southeastern tip and back over the water near louisiana, and it's going to move back inland. it has strengthenned with 80 miles per hour winds, but it

continues to look very organized at this hour. more than 200,000 people are without power. the reason for all of the concern is that the path is extremely similar, as you can see, right here to three previous storms. betsy which devastated louisiana, one of the costliest ever in 1965. that was stol lowed of course by andrew, didn't get as much coverage as florida, but it still was a bad storm, and of course, katrina in 2005. the wind speeds, looks like we're locking in. even if it strengthens to a strong category one, it's not the 24 to 28 feet storm surge that we saw from katrina what cover. at least we have that going for us at this hour. we're going to have several

effects. that storm surge i mentioned will cause some problems, especially to the south of new orleans. it doesn't appear that new orleans will have too much of a problem because the levees have been rebuilt and we're dealing with up to 12 feet, not 28 feet. secondly, power outages georgal and flooding rains, as much as 28 inches of rain is going to fall. >> we'll show you a live picture now where the winds are picking up. we want to get to scott cohen who is in the heart of new orleans, are they ready? >> they do seem to be ready. one of the other big differences here is the protections they have and also the consciousness. seven years since katrina but it's still fresh in people's

mind. we're feeling the rain and it's coming from the northeast that way, and the more it does that, the more it piles into lake bourn and that becomes a problem and a test for this 14.6 billion levee reconstruction. let me give you an orientation as to where we are. we're on canal street. the streetcars are shut down for this. the mississippi river is over there, seven years ago for hurricane katrina, this area was under water after the levees broke. there is likely to be flooding here. when you talk about 20 inches of rain. it will be an issue. people do seem to be heeding that curfew, staying inside, a

decent police presence as we wait and get wet. >> scott, when you're on the screen, we show frequently a live picture from a remote camera, and as the evening has progressed, you can see the wind starting to affect that picture and shake it more and more dramatically as the night goes on. isaac also having a major impact on the fuel production in the gulf of mexico. >> yes, it's been moving in for a couple hours, i don't really want to see a category four or five, it's pretty unbelievable stuff. we talked about the oil and gas base and with good reason. about a quarter of all oil produced comes from the gulf. the refinery story and it's shut down, and it means a lot more in

oil and gas, it's a huge mover of steel, rubber, copper, poultry. you name it. i had a conversation earlier in the day with the head of the board, and there were startling numbers when it came to the impact. >> after the rivers closed for four days, you have 300 million a day. that's a big impact on the united states of america, and that grows after the fourth day because of the law of supply and demand. four days and over $40 million, and 62% of consumer spending is on goods that come up and down this river and through the port. if it stays shut down, it could effect prices and the consumer. it's already under quite a bit of stress.

>> thanks so much. >> all right, following hurricane katrina and rita in 2005, the army core of engineers was instructed to design and construct a new system. the program is fully funded at $14.5 billion. the money has been sent to reinforce and improve barrier system that's include levees, flood walls, and pump stations. in the map, you see the three points in the barriers that have been completed. the red and the yellow points are the ones still in the process of being built. they are mostly green, so the project is nearing completion. the u.s. army core of engineers say they could defend against

another storm. many shops and restaurants in new orleans are closed in this hour earlier than usual. we have the coproprietor of palace restaurants, one of the most famous restaurants. i assume you're closed, what's the impact on your business. >> we only close for hurricane super bowls. we have been closed since monday and we want it to scoot on through so we can reopen. all of them are closed except for one cafe that's trying to hang in there. >> how much revenue do you lose. if you're lucky enough to have insurance, most of us don't, so you take a big financial hit, but we don't whine about the

minor inconveniences after some of what we have been through. we do what we need to do, make sure everybody is safe, and get ready to come up with fun specials to reopen. >> hope to mel you down there some day. a great places to have dinner. brad cohen is the director of operations at the hang out in gulf shores, alabama, how are thing where you are? >> surprisingly well, looks like we dodged a bullet, we still have power here at the hang out. we plan to hope tomorrow and have a great labor day weekend. >> that's great, and you think you will be able to open for business right away and that's crucial, right? >> yes, and we did, and power allows us to maintain our food and our product and to get open

to first reposponders or the public very quickly. >> talk to us about recovery after the bp oil spill in the gulf in the wake of the bp situation, completely recovered there? >> recovered and better than ever. they did a great job at clean up and the state did a great job promoting the beaches in alabama, and we're really happy with the past season and it looks like a great season next year as well. >> the hang out has been featured in some of the bp commercials. what is helping so much? >> it's a combination, and the beautiful beaches were a secret before the oil spill and people saw what we have to offer here and we had a great clean up. once you see it and fall in love with it, you want to come back. >> let's check in now in alabama where voluntary evacuations have been ordered samuel jones is on

the phone, have people been listening to the evacuation order? >> they have. they also cooperated fully. there's heavy rain and winds, and it's basically coming in spurts because of the band. so we have not seen any major flooding through far. that doesn't mean we won't. we expect the water to rise. >> any power outages? >> we have one, we have some i think on the other side of our area, really in another city, but i think they had an accident where they hit a transformer and took it out and that caused the power outage. >> thank you for joining us. >> let's check back to todd gross one more time. >> as you heard, all of the

action is over alabama right now. the big news now the big winds and the storm surge in louisiana. that informs the last couple hours. several times they reported that and the rains are going to follow tomorrow with up to 20 inches of rain in southern louisiana. again, as we reported just moments ago. it looks like just south of new orleans in the low lying spots, that could be a major concern. we'll keep a very close eye on that into tomorrow. >> this storm is moving so slowly, how many more days will we be covering it? >> another two or three days, and once the waters rise, they stay up there for several more days. >> thank you, todd, for being with us for that special coverage. that is all for tonight. our coverage of hurricane isaac and the republican national convention will return on

worldwide exchange and "squawk box." for john harwood, larry kudlow, and myself, you have a very good night. i'm jim cramer and welcome to my world. you need to get in the game. they're going to go out of business and they're 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 money. my job is not just to entertain i'm trying to educate and teach. call me at 1-800-743-cnbc. tonight's show is devoted to helping you avoid some of the most common and money-losing mistakes that investors continue to make. and recognizing misinformation when you see it. the best way to do this is with

discipline. and so night, i'm laying out these rules to help make money in what can be an incredibly bewildering, confusing and even infuriating, certainly irritating market. if you low my rules you should recognize an opportunity when you can see it and to manage not losing money if you don't have to, no matter what the circumstances. including a collapsing euro or a slowing giant or even skyrocketing oil prices. let's get down to business. here's the first one. i don't want you digging in your heels anymore when you're wrong. or in the words of the immortal words of john manor canes, when the facts change, i change my mind. what do you do, sir?

one of the easiest mistakes to make, i refuse to change my stance after the facts are in and i've been proven wrong. it's natural to dig in your heels and refuse to change in your mind when you think you're right but the market is going against you. it's also a quick and easy way to lose money. yet mad mailers, and particularly twitter followers @jimcramer refuse to believe this principle. i have been blasted into reality over and over and over again, whenever i dug in my heels on either side. you're always angry when you get run over and you're always willing to take it out on people own the other side. i am open about this whole process and i actually read the angry e-mails. oh, boy, in those tweets and i engage with people, sometimes in a cranky way, helps me to learn how to invest better. but it's also been an exercise in pain. >> the house of pain. >> when the e-mails and tweets are the most hurtful, that's when i know i'm the most right. >> for example, i got incredibly heavy volume of hate mail after

the market bottomed in 2009. when the dow jones industrial average was down to 6,500, pretty close to bottom there, i came out and said the down side was minimal. i didn't say the down side was done. i said it was minimal. i knew there couldn't be that much more down side. basically a model where the market would go in case the worst was in hand. but an honest to goodness depression. bottoms up, i tallied all the members of the dow jones have average. i calculated all the averages would go to zero. people considered this one a financial because of its big g.e. commercial division, citigroup and jpmorgan. on top of that, i also look into the total of 3m and added in alcoa, all pretty dire assumptions to say the least. and even under these incredibly ghastly conditions, i still couldn't see a low that took us

down significantly from where prices already were. from the moment i made that call, there were people telling me i was crazy and i had no idea what i was talking about. a month later, it was the dow 1,500 points higher. these people, what were they doing? they were still there. still sending me e-mails that were impassioned and claiming that it was still too soon to tell. telling me i had lost my rigor, i was no longer with a hedge fund and i didn't know what i was doing. if you find yourself making that kind of argument, you know what you're doing. you're digging in your heels when you should be changing your mind. this is something that's hard for the most emotional investors and traders to come to terms with. believe me. i know. but it's also crucial if you want to be a better investor than you are. people do this all the time with stocks. we would never let ourselves make the same analogy about sports. could you claim that your favorite basketball team still

had a chance of coming back from behind to win an hour after the game ended? what about a week? how about a month? of course not. if anyone did that, they would think you're insane. i'm just urging you to apply the same level of rigor to stocks as you would to sports. the facts are always changing in this business and at some point you should be willing to acknowledge the game is over and you were wrong. i'm not trying to be glib about this. it's part of the emotional side of training while difficult to measure justice as important as financial side. most people are embarrassed by this stuff. swallowing your pride is never easy. but the more time you spend digging in your heels the less time you have a chance to take advantage of the new situation and profit from it. how do you know when it's game over? if you try to come up with more and more excuses for things to go your way, maybe it's a good time to ponder why they haven't 37 and you've got this huge edge on me.

i have a national tv show, calling the market's direction. i mean, i try. it's so much easier to say just you wait and see and not have to eat any crow than it is to admit defeat. look, you don't have to worry about publicly embarrassing yourself. so focus on those potential profits and not your ego. also, i'm not a politician either. they can't change their mind without ridicule. if i don't change my mind, i lose money. that's a far higher judgment to worry about. here's the bottom line, when the facts are in and you' been proven wrong, don't dig in your heels. simply change your mind. >> ray in georgia. >> yes, sir. i have a question on stocks. i think i heard you one time say that you didn't like to use stops. and i'm just trying to figure for us home gamers, how do you protect yourself if you don't use stops or stops with limits? what do you think? >> okay.

first thing about the flash crash, okay? you're stopped out at some horrible price, who knows what you got then the market comes right back, you got hurt. more importantly, what are you doing here? come on, this is real money. you've got to stay close to your money. you're putting in some machine's hand when you do that. i want you to be able to say hey, how is the market doing? i want to be able to stay close to it. i don't want to go on auto pilot. putting in these stop losses in are auto pilot. i don't like it. stick with the facts. is it a buy or a sell. skip in new jersey. skip? >> caller: hey, jim. big boo-yah to you. >> i'm around the block from you in the summer. what's going on? >> caller: hey. i would like to know, national aluminum partnerships, an appropriate investment for i.r.a. retirement accounts? >> you have got to speak to your accountant for this. there's a penalty that can be paid if you have too much income from these in your i.r.a.

you do not want to run afoul of that penalty. let's go to anoup in california. >> caller: how you doing? >> real, good, man. how are you doing? >> caller: good. you mentioned that it's valuable to track a group of fundamentally good stocks and buy when prices are down, much like you microscope out a fancy watch at macy's and buy during the after christmas sale. >> right. as long as it's working. >> caller: i was wondering if charting the inflated price to earnings per share ratio for an equity could help to more appropriately time approaches? secondly, would tracking the inflation adjusted price to cash flow ratio be an even better method. >> we don't have a lot of inflation. i totally like that idea. that's really, truly rigorous. however, in the end what's going to tell you to buy whether or not is if a market brings a stock down, not the company's fundamentals but the

fundamentals are intact. if it pulls back 5% to 8%, that's when i want you to strike. okay, don't be stubborn when it comes to your money in this market. when the facts change, i'm urging you. don't dig in your heels. have some discipline. change your mind. "mad money" will be right back. [ male announcer ] this is rudy. his morning starts with arthritis pain. and two pills. afternoon's overhaul starts with more pain. more pills. triple checking hydraulics. the evening brings more pain. so, back to more pills.

almost done, when... hang on. stan's doctor recommended aleve. it can keep pain away all day with fewer pills than tylenol. this is rudy. who switched to aleve. and two pills for a day free of pain. ♪ and get the all day pain relief of aleve in liquid gels. trick question. i love everything about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer like demolition derbies. and drive thru weddings. so if you're one of those people who gets heartburn and then treats day after day, block the acid with prilosec otc and don't get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. zero heartburn. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city.

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welcome back to this disciplinary show.

based on 31 years of investing insights, among the most important, price matters. i know, it seems obvious but bear with me because it's anything but. price matters so much, you can buy the stocks of companies you don't like. that's right, ones you don't like, provided they go low enough. in fact, at the right price, even inferior merchandise is worth purchasing unless it's deteriorating. in the first place, just because they've become so darn cheap. now, i will never endorse a stock when i think the fundamentals of the underlying company are deteriorating. and i won't go near anything that could be headed towards bankruptcy because of a hardball lance sheet. you need to always look at the balance sheet. but there's a whole lot of space between a best of breed company and one that's uninvestable. okay? this is really important. in normal circumstances, the stocks of the lowliest companies that still pass the smell test

sell for much more than i would ever be willing to pay for them. there are some hopeful investors speculating unwisely and buying barely adequate merchandise because it appears cheap when, in fact, it's just selling for the appropriate discount. however, if the price drops far enough, then it's perfectly okay to buy a stock when you merely have a low opinion of the underlying company. that's how much price matters. i get vicious tweets on this particular subject. normally i recommend selling a company that i previously said i like. hey, cramer, how could you not like it now? it's hot. there are levels when worst of breed companies are cheap enough worth buying, even companies i slammed a the a high price. worst of breed is different than just plane worse. a worst of breed business may not look like much compared to

its best of breed business. but at least it can get into the dog show. how do you know when the price is right on something you wouldn't otherwise buy? obviously there's a sliding scale here. the better the company, the more you should be willing to pay for it. but if the street has it wrong, buying an unattractive company at an attractive price makes a whole lot of sense. at the bottom of the barrel, at the end of 2011, the regional banks, they began to break away from the international banks that were hostage to europe. i disliked these banks. banks like u.s. bancorp and wells fargo. but i had to warm up to them because employment was coming back. housing market was getting better. i held my nose and told you to buy it.

it worked. even though i was blasted for flip flopping on the bank group. i would leave the show, go to twitter and there it was. people just say may, i thought you hated the banks. at certain prices, can't hate. it's harder to find situations where something that doesn't interest you suddenly becomes worth buying simply because there aren't many times when a halfway decent stock will get hit that hard. but if you keep your eyes peeled on companies raising money through equity offerings, it doesn't take much effort in an environment where so many try to raise capital through secondaries. i'm finding this in some european situations. you can often find great deals on merchandise you never would have looked at once, let alone twice. these deals happen all the time. i try to get you attuned to them on the show so you can pounce when they come up. just in terms on price, one day, may 13 of 2009. i'll never forget this. both ford and bb&t, a southern regional bank that had a lot of bad loans on its books but i

thought looked like a survivor, sold stock at a radically discounted prices. ford secondary priced at a 5% discount to the previous day's close. and a 24% discount to the previous week's. and bbt sold at a 10% discount at the previous close and a 27% discount to the close a week before. before bb&t got the deal done the stock softened. they were worth a heck of a lot more after than before, the secondary offering was a steal. even if you had no prior experience before in ford or bb&t and thought they were mediocre at best. at discounts that steep, both stocks, the stock price changed my mind. those were great buys. i want you to always keep your eye on the price. because even less than stellar companies can turn out to be big winners if you get a chance to buy them low enough.

the ultimate example came at the bottom of 2008 with amd. a stock i've hated for more than 22 years i hated it when jerry sanders ran it. but when after its graphic chip division began to take share from market leaders like intel and nvidia, two much better companies, the opportunity was too great. i called this one a hold your nose and buy situation. if you listen to me, you could have caught a double in a matter of months. yeah, sure, you had to trade out of it because it got too expensive, but the trade was made, the money was booked. here's the bottom line. price forces you to make new judgments about bad merchandise, just as some fixer-uppers have a price you wouldn't want to pay in at another time, stocks get so cheap they become diamonds, rough diamonds, but diamonds

nonetheless. stay with cramer. two years ago, the people of bp made a commitment to the gulf. and every day since, we've worked hard to keep it. bp has paid over twenty-three billion dollars to help people and businesses who were affected, and to cover cleanup costs. today, the beaches and gulf are open for everyone to enjoy -- and many areas are reporting their best tourism seasons in years. we've shared what we've learned with governments and across the industry so we can all produce energy more safely. i want you to know, there's another commitment bp takes just as seriously: our commitment to america. bp supports nearly two-hundred-fifty thousand jobs in communities across the country. we hired three thousand people just last year. bp invests more in america than in any other country.

in fact, over the last five years, no other energy company has invested more in the us than bp. we're working to fuel america for generations to come. today, our commitment to the gulf, and to america, has never been stronger. trick question. i love everything about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer like demolition derbies. and drive thru weddings. so if you're one of those people who gets heartburn and then treats day after day, block the acid with prilosec otc and don't get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. zero heartburn.  on every one of our carda reminder...ate. that before this date, we have to exceed expectations. we have to find new ways to help make life easier,

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>> people on tv tell you to sell or avoid stocks and have to be telling the truth. they not any less television. we assume they own it and treat everything they say with a healthy dose of skepticism. we hardly ever reserve that for people who bad mouth the market. more often than not, investors assume they don't have an agenda or won't be pushing one. they have to be the right guys, right? they have the ethic.

to me, as son that brought in profits by shorting stocks, that's right, betting against stocks this attitude is totally surreal. people who criticize the market on television or in print or on the web. aren't necessarily trying to help you. when someone says they like the stock, they're branded a tout. but when someone says they hate the market, how often do you say wait a second. this person might be shorting the market and hoping to knock stocks down in order photo buy them at a lower price. f it's easy to recognize that many investors need stocks to go higher, but perhaps the idea of shorting stocks is less familiar to many home gamer, it's much less common to make the connection that some people need markets down. some people need markets to go lower in order to outperform their averages. in fact, in my professional opinion, there's probably more chicanery and disonestly from short sellers than the longs. that's right. you have to remember that there are people out there who want to

push prices down every bit as much at the touts who want to drive them up. the ones who want to drive them up are touts. both sides can be misleading. sure. they can be doing rigorous work, the shorts. they can also be pressing their truce, though, when it is most convenient. meaning when a short is going against them. tt other issue is when money managers come on television anticipate have to disclose positions, they never have to tell you, i'm underinvested. w i'm getting dusted by my competitors, so it's vital i knock the market down in order to give myself a decent entry point. if they don't own anything and they're not short anything, there's nothing to disclose. but they might still have an interest in knocking stocks lower because of how they're positioned. it's just -- you're just never going to hear about it. and believe me, there are people who benefit from a broad stock

market decline and are more than happy to go on television and make the case that the decline is going to happen and encourage you to get out while you still can. if stocks become stronger, all the edge funds who were either net short, they were betting on stocks to go down with more short positions than long ones, or simply underinvested, meaning they have much less in stock and much more in cash are nou underperforming and they are becoming more and more desperate. money managers who have been left behind by the market and their competitors start to feel like cornered rats getting ready to be butchered by a fer ril feline. see a lot of hedge funds can't afford even one year of underperformance. i was in this business for 14 years. i know it. no one else has a show. it takes a lot of build up, good will with your clients. you have to have a good record and ix plain how you barely made any money when stocks everywhere were soaring. by the time you're through with that explanation.

you have to be careful. many with the few hedge fund managers will happily plant negative stories in the press and try to take advantage of the immediate yach to spread as much negativity as possible to get stocks down so they can buy or because their shorts need to be able to work for them. saw this a lot in 2008-2009. since that's not the world we live in, the best way i know how to protect you from this kind of chicanery is shining a light on it and making sure you know what to watch out for. the bottom line, remember to always be on your guard. the people bad mouthing the market aren't one bit more altruistic or honest than the people who come on tv shows and tout stocks also for their own benefit. "mad money" is back after the break.