reason bear iing the image and likeness of the lord of loif. we we have responsibilities one to another. we do not each face the world alone. in the greatest of all responsibilities is that of the strong to protect the weak. the truest measure of any society is how it treats those who cannot defend or care for themselves. [ applause ] each of these moral ideas, each of these moral ideas is essential to democratic government, to the rule of law, to life in a humane and decent society. they are the moral creed of our

country. as powerful in our time as on the day of america's founding. they are self-evident and unchanging. and sometimes even presidents need reminding that our rights come from nature and god and not from government. [ applause ] the founding generation secured those rights for us and in every generation since the best among us have defended our freedoms. we honor them and all of our veterans and we thank them. [ applause ] the right that makes all the

difference now is the right to choose our own leaders. and you are entitled to the clearest possible choice because the time for choosing is drawing near. so here is our pledge. we will not duck the tough issues, we will lead. we will not spend the next four years blaming others. we will take responsibility. we will not try to replace our founding principles, we will reapply our founding principles. [ applause ] the road will be hard. these times demand the best of all of us. but we can do this. we can do this. together, we can do this. we can get this country working again. we can get this economy growing again. we can make the safety net safe again. we can do this. whatever your political party, let's come together for the sake

of our country. join mitt romney and me. let's give this ef eff everything we have. let's see this thing all the way through. let's get this done! thank you, and god bless you all. thank you. [ cheers and applause ] >> paul ryan wrapping up a speech with rousing plin. a number of big lines in there. a number of big points and direct shots right at the president and the current administration. and we welcome back in larry kudlow and john harwood. we spoke before the speech. you said you wanted to hear more on growth. ryan talked about bringing down federal spending as a percentage to about 20% of gdp.

that takes two things, numerator, spending but the denon-may tore, growth. did you hear enough about growth plans? >> right at the beginning he talked about growth and jobs and he made that point several times during the course of his speech. in all honesty, i thought there was too much emphasis on debt and not enough emphasis on growth. he cited my friend jack kemp. i liked that. kemp was the author of the reagan tax reform. there was a line in there about tax fairness. i find that very ambiguous. i don't know what tax fairness means. there was no mention of the 20% tax cut. no mention of the corporate tax kupt. no mention of energy independence and no mention of a 4% growth target. he did mention bringing spending down from 24 to 20%. it was a powerful speech and it is being well received, on the

question of growth, i was somewhat disappointed, i must tell you. >> john harwood, what i thought was more interesting part of the speech came very early on is when he referenced the general motors plan that closed in 2009. there was a discussion about spending but it almost seemed as if ryan was blaming, perhaps, the obama administration, for not doing enough to save the m jamesville speech. >> he is blaming obama for pretty much everything. it was impressive for somebody who has not been on the national stage very long. he hit all the points that he needed to hit on that speech. he did a strong and powerful defense of medicare. he cited the care that his mother had gotten. he introduced his family to the country. right at the end when he was,

the applause was building, he drove right through it. the applause kept building. it was quite an impressive performance. you will have a lot of delegates in the hall wishing he were the nominee. unlike chris kristie's speech last night. this speech did everything that romney wanted it to do. >> dan, welcome. to larry's point, is this the time for specifics? is this the time to get into tax policy and direct growth objectives? or should it be rather, sort of a rousing here's what we're going to do in a big picture type of way? >> i understand the point that larry is making this was a spectacular speech. the basic goal of a vice presidential nominee during a convention is to articulate the indictment against the administration. against the opponent. in a very meticulous way in a

very plain spoken way, a very effective way, paul ryan tonight totally dissected the broken record. it was a powerful speech. it was a well delivered speech. very impressive. he exceeded my expectations. he has not been on the national stage like this at all and for him to do what he did tonight was quite effective. >> i have got to say, this is why mitt romney picked him. what he presented and not just in the cut away shots when his gorgeous kids and his very attractive wife were featured, was youth, energy, confidence, conviction. all the qualities that people think are lacking in politicians. the prescriptions that he is prescribing on medicare are very controversial. they will be litigated. democrats will come back hard on that. we will see whether or not he's right when he says we will win the debate on medicare.

but on all the qualities that paul ryan was conveying tonight, very appealing. >> can i just weigh in on this? it was a powerful speech. he had a lot of good applause lines. going after obama care was great stuff and it brought the house down and saying that success in business is a good thing brought the house down. but i will repeat my thoughts. i am somewhat confused by some of the terminology regarding taxes and regulations and economic growth. that word tax fairness sticks in my craw. that's a democrat's word. that is not a supply side or a republican word. and i am concerned that if the romney ryan ticket runs on debt, they're going to miss the point. debt does not have meaning to someone who is unemployed. and i think they have got to be very careful about that and i don't want to see this election run on debt.

and paul ryan spent more time on that than he did on tax cuts and even spending cuts. >> if you think that paul ryan is a rhino on taxes, i will fall off the stage. >> i am not saying that. i worry about what his instructions were and how they will define this as the campaign goes on. paul is a genuine supply cider. i have known the guy 20 years and we both come from the jack kemp camp. but it's not in the text. and i read text very carefully because the written word is very important. so we will see how mitt romney expands upon this tomorrow night. they may be saving it for mitt romney. >> that's a very good point. guys this is a very good point. no nomination has been won by a preside vice presidential speech. mitt romney has got to deliver the goods. >> dan, larry brings up a good point about debt. as we know, politicians tend to get elected telling people what

they are going to get, not what they are not going to get. can the republicans go -- even though people rouse and cheer when we talk about bringing down the federal deficit, is there a risk that when they close the curtain there will be a concern that some of their benefits will be taken away? >> yes. big time. >> i understand. tonight this week is about setting a tone and a narrative for the fall campaign. we have got 76 days left in this campaign. the debates, the presidential waits where the two candidates will go after each other on this very point and mitt romney will have to litigate that case in an effective way. those people are holding out. it will make the difference in our election. he has to convince them that he has a plan that will bring prosperity and growth. not going to jeopardize their security. >> you see, the point that i want to make is this. i know paul ryan is a supply sider in his heart.

i understand that. but, i think the best part of this speech was he ripped obama apart and he ripped obama's economy or lack there of apart. terrific. but did he sell a romney ryan alternative? i'm not so sure. it may be lieft to mitt romney o do that. certainly we're okay with that because he's the president on the top of the ticket. >> don't you think you have done enough bashing republicans? >> i call them as i see them and sometimes the republican party loses its compass when it comes to growth. >> larry, don't forget about the so-called michigan democrat. there is a secentrist out there >> larry just doesn't know him. >> we will get back in just a bit. plus we will run you through the

scary situation in the gulf coast. hundreds of thousands of people currently without power in abbe goldstein, mississippi, and louisiana. the worst might not yet be over. as one parish president said it, this storm has been worse than hurricane katrina. we will get you caught up on the forecast when we come right back.

>> we will get back to tampa in

a few moments but first we need to get back to the gulf coast. this is plaqworse than hurrican katrina. >> this wasn't supposed to be a katrina. it's turning out for the east bank to be as bad if not worse. >> that is a highway folks and it is completely underwater. part of the problem is the storm not moving. >> this was quite a storm considering it was only a category one, right? take a look at what is going on as the storm changes its complex.

the winds were very strong earlier, dying down a little bit but look at some of the damage they caused today. trees down. it was a really long haul in terms of the wind that was going on and in fact it appears that at this time things will settle down overnight slowly. so there will still be a few tree limbs coming down here and there but nothing like what we saw in new orleans here today with winds gusting as high as 113 miles an hour. that must have been on the coast right? no. that was actually in part of new orleans. so one of the gusty thunderstorms that moved through peeked out at 113 mile answer hour. in general they stayed around 75 miles an hour. it wasn't a katrina by any means. at least not in new orleans it wasn't. but they did have the big winds. now to talk about are the cust mers without power because of all the wind. but now let's talk about the future of the storm.

a tropical storm that will keep hammering at northeastern sections of louisiana into mississippi and all the way up into the midwest and that's where the story will change and move in the next several days. >> todd, thank you. in new orleans they are watching the levees and they are praying their hold. scott is live in the heart of new orleans. scott? >> reporter: they very well likely will hold, ryan. seven years ago today, they failed catastrophically. this storm was no katrina, the comparisons are inevitable. this time around they were prepared at the federal, state, and local level. take a look at the national guard that has been ever present here before, during and now after the storm. the police presence has been widespread and people have been heeding the curfew. three quarters of a million people without power but the

levee system that was refurbished and it cost 14 billion dollars has handled this almost like a gentle rain. not the case about ten miles from here in plaquemines parish where the flooding has been so severe that they now expect to intentionally breach the levee to relieve the pressure. that will compasser bait the flooding but at least give them some control. they will do that as soon as the weather allows. it's one of the wrenching decisions that comes with a story like this. tropical storm isaac now slowly making its way out of here. they say in new orleans good riddan riddance. >> back to the convention now. senator, i want to get your thoughts on what we should hear from governor romney tomorrow. but first, the speech is sure to

be getting high marks from the gop, i would like you to adopt a more bipartisan view and as a member of the republican party what do you think paul ryan cough done a little better and hit a little harder? >> good point. i thought he started a little slow. paul has really stepped up to this national role that he is playing, but i expected him to be a little tentative. but man he really worked into it. i thought his points about medicare were first class. he made the point that the white house is the one that has taken 700 million dollars out of medicare to pay for obama care. when he hit on his personal stories, i thought it was powerful. by the middle of it he was going strong and i thought he finished very strong. >> i think maybe the undecideds out there are maybe confused. they are hearing from the democrats that the republicans would like to gut medicare and

now paul ryan saying that it is the democrats that are trying to take away medicare. how does the gop sell the message? >> the white house itself said, he said i won't sign if it if it increases the deficit and how do they keep it? they looted medicare. i don't care if you are republican or democrat, if the seniors let people start treating medicare as a cash cow to pay for completely unrelated new programs yourks can wave good-bye to it. i think paul is right. his reforms, whatever you think of them, and i think they are great. medicare advantage and medicare part d but they are designed to save medicare. what barack obama did was designed to pay for his entirely new program that nobody wants. that is a debate that we will

win. i believe it strongly. >> of course democrats always use scare when republicans want reform. that's what the democrats do. but this time they made a very big mistake. this whole business of the $715 billion being taken out of medicare and putting into obama care was one gigantic mistake and has put the democrats on the defensive. i don't know if the republicans can win this issue. traditionally, the republican attempt is just break even on medicare. and i think this is going to help with break even. it was a big mistake by obama. >> i think the least that happens is that we break even. seniors know deep down that we need to reformorm medicare to s the program. okay? now they may like or not like a particular program. but i'm telling you, they are not going to like taking money out of that program and fund something entirely different.

we will go from one good but troubled program to two troubled programs? >> who created medicare? who has been the most aggressive defender of medicare? that is the democratic party. paul ryan assumed the same savings that president obama took from medicare in his own budget. and there is no question. if you look to the long term of what both parties are envisioning, republicans would cut more. that dupt mean worse health outcomes for seniors but they would cut more than democrats. there is no question about that. >> there is a question about that. there is a question, john. in their plan if you look at what ryan and romney have come up with, they keep medicare where it is. the issue that the senator is talking about is to try some competition. it is like medicare advantage. >> it's like the health care

exchanges in obama care. >> but without the state. >> medicare is a state? >> medicare -- medicare -- you should look carefully at the medicare advantage program. and you will see that 11, 12 million people signed up for it. the thing has come in cheaper and more efficient than anybody dreamed possible. >> but which romney and ryan are essentially campaigning on now, though they haven't said how big the vouchers are, it is like the health insurance exchanges of obama but with the public option being medicare. >> the insurance exchanges are run privately and you don't have the one-size fits all that is the big problem which is what the companies are all rebelling about. i don't expect the republicans to win this battle. i just think the democrats have made a big mistake and they won't have the mediscare victory

that they usually have. >> we have a tight ship to run here. thank you, sir. we are going to bring in former white house political directorless also under president george w. bush. but let me bring in a democratic strategist from new york. your thoughts and response to the speech? >> i thought paul ryan gave a very powerful speech tonight. it was well received by the faithful in the audience. i thought it was an incredibly dishonest speech. john harwood just mentioned the part about the medicare. the idea that the republicans are playing on the democratic turf is an indication of how much the progressive agenda has won. now they have resorted to the fak tick of demagoguing and accusing president obama of cutting medicare while they want to cut medicare and paul ryan's

budget includes the same savings that president obama included. the comments about the jamesville plant, it closed under the bush administration, he never acknowledged that. he made it seem as though it closed under the obama administration. there was a great deal of untruth in what he said. >> you know, i want to ask you, too. you can write the headlines tomorrow morning, i suppose. where do you think that democrats will come at the speech the hardest? it won't be jamesville and gm. what will it be? >> i'm not sure. there is a hypocrisy element about it all. i think the idea that paul ryan is a great deficit cutter yet he voted for two wars and two tax cuts. he voted for the prescription drug bill. he voted for the wall street bailout. he voted for the auto bailout and now he is a great deficit hog.

i think the democrats will come after him for that. but i think ultimately, it's a combination of issues. this is the guy that mitt romney chose to by b his running mate and he's so far to the right that i think the american public will not buy into it. i thought it was a wonderful speech for the faithful in the base but it was not a good speech to reach the independe independents. >> there is an advantage in going second. you can hear the talking points and you can respond. what do you expect to hear from the dnc? >> that's a good question. i think the democrats will go after a lot of what paul ryan said. but i think mitt romney is really the subject that the democrats will focus on the most. paul ryan is an issue because romney chose him as his running mate, but there is is a range of issues where the two of them are trying to figure out what they believe and how they will meld their opinions together. this issue of inconsistency and

hypocrisy will come up again and again from the democrats in charlotte next week not only on the budget issues but the social issues. how do you meld the moderate mitt romney of the past with the conservative paul ryan of today. and that's going to be a tough issue. >> all right, keith. now we can bring in sarah fagan. i will ask you a question that i am curious in. who are the voters that the republicans and democrats are trying to sway. who is the undecided and what ha do they want to hear? >> it's a very narrow universe. probably about 7 or 8%. i think they are largely suburban working women. a lot of mothers with kids balanced jobs and children. and i think that's what is really going back to last night what ann romney was really trying to connect with. that is the key voting block at this point in the election.

>> the other thing that democrats will say next week, you were asking keith this question. they will have a lot to say. they will say the speech was a lot of partisan band blame shifting. there was one line that was similarly over the top. zefrg free except us. that is ridiculous. but, it was effective in this hall. >> i don't know. it may be ridiculous but at the same time there are a lot of americans who are independents, in the middle, who do not like central planning. who do not like central planning, who do not trust in government to direct the economy and are concerned about large scale government spending so i think the democrats will have trouble with that issue. >> sarah, larry, john, we have to leave it there.

but do not worry. we're going to have much more coverage tomorrow. thank you all for watching special coverage tonight and our convention coverage will continue tomorrow morning on worldwide exchange at 4:00 a.m. eastern time. >> i'm jim cramer and welcome to my world. >> i always like to say there's a bull market somewhere. >> matt money, you can afford to miss it. >> welcome to matt money. other people want to make friends. in the face of crushing declines and uproareous rallies and plain jean garden variety days there is a mad money tool box to help you through and help you become

a better and wealthier investor. so listen up. if you're going to manage your own money you have to recognize the value of one of the most important issues out there. sometimes i'm going to be wrong. sometimes i'm going to be surprised. and sometimes my stock picks just won't work out. i of all people understand that humility doesn't come natch raylogical to some people. but staying humble is more important. nothing has cost people more money than arrogance. if you own stocks, you have to accept the fact that you are going to be wrong, perhaps even often. >> your portfolio will get hit by things you never saw coming. things you never thought was possiblement the one thing you can be sure of is that at some point something is going to go wrong and it will hit you

totally out of left field. unless you take the appropriate precautions, you will end up being run over by a train that you actually saw coming. how often have we been clobbered? every time we wonder maybe the worst is past, there is a hideous headline out of greece, spain, our italy. and the s&p 500 gets bashed down by a torrent of selling. that's why it is so important to prepare yourself. expect the unexpected so you can make money in any market or at least lose less and not just when things are going smoothly. you have to build this up into your world. you have to assume somewhere sometime something will go

wrong. i have watched the market climb way too high and make people too much money to be that closed minded. there are professional short sellers out there. hats off to them. they have turned pessimism into profits but i don't recommend trying to follow them at home. uh never recommend short selling. out's more risky than being long. it's just a basic question of arithmetic. let's go through it. when you short a stock or bet against it at best the stock goes to zero and you have 100% gain. at worst it could never stop going higher. you could lose 200, 300, 1,000%. you could lose infinite money if you're short. when you own a stock the most you can lose is 100% of your

money but you can quintuple your investment. ask anybody who bought apple near the generational bottom in march of 2009 when it pulled back to less than a hundred bucks. over the next five years they scored a 580% return. [ applause ] ♪ hallelujah >> that was easy. >> i'm not telling you to be afraid and pass up on that gain. it would be silly not to make sure you are prepared for the next market disaster. we know these things happen. we shouldn't let them stop us from trying to make money but we should protect our investments in advance. how do you get ready for a calamity when you may not know what it will look like? how do you expect the unexpected as an investor. one magic word. diversification.

it takes people -- i can't make thousands of percent with diversification. it's the most important key to avoid losses and stay in the game which is the goal. that's why i play am i diversified on wednesday, why i call it the only free lunch in the original investing gospel, jim cramer's real investing. why i push so hard in getting back to even. if your portfolio is diversified you can handle any setback. you can come back from any financial disaster. i mean it. normally i mean making sure all your stock eggs aren't in one sector bass celt like i saw in 2001, 2002 when people left the building because of technology stocks. it means no one sector, one segment of the economy should account for more than 20% of your portfolio. if you own five stocks only one can be tech, health care, financial, energy, industrial

and only one food & beverage. what if you're not sure? err on the side of caution. if two stocks trade together you're not divert identified. an oil driller and producer, we get that on wednesday. they're both part of the same sector. software and hardware are both techs whether we like it or not. i'm not trying to make it difficult for you to pick stocks. when you get too concentrated in an area the moment something bad happens you will want to throw yourself off a bridge because the losses will be enormous. imagine if you own too many industries. fast growing emerging markets like china slammed on the brakes with higher interest rates. you got obliterated. what about if you owned too many banks before the financial crisis. people had such good yields. too many stocks into the dot

come bust. something soured an entire generation. the goal of diversification is to spread your money in unrelated sectors so when one goes down hard the rest are unscathed. sometimes they go higher. that's diversification. it is mandatory in cramerica. you know what, if you're going to be prepared for anything it's not enough to make sure your stocks don't overlap. you need a portfolio that lasts in all markets. it's what i call the new diversification. how to protect your wealth and ensure you own something that works in a chaotic, difficult, unforgiving, nauseating, miserable market. we are diversified bisector alone and it's not enough. it's all about the right kinds of stocks. there are five areas you need to cover for maximum protection and upside. you need gold, a dividend stock with a high yield, growth stock, speculative. i believe in that. and something from a healthy geography. cover all five bases and you have a portfolio to win in any market.

i will explain what makes the areas so essential. teach you to analyze stocks by yourself so you can fill every position with the best possible names. bottom line. a good investor knows to expect the unexpected meaning staying diversified with 20% of holdings in one sector and following the new diversify fi indication. speculative, geographically safe. stick with cramer and i will tell you how to pick the best plays in each crucial category. loretta in arizona. [ male announcer ] it's a golden opportunity

to experience the ultimate expression of power... control. [ engine revs ] during the golden opportunity sales event, get great values on some of our newest models. this is the pursuit of perfection. >> caller: hey, jim. we're sitting on a bunch of shale gas. there's natural gas under my town. it's a game changer. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it. design the wells to be safe.

thousands of jobs. use the most advanced technology to protect our water. billions in the economy. at chevron, if we can't do it right, we won't do it at all. we've got to think long term. we've got to think long term. ♪ to dabble with the idea of hybrid technology, it's already engrained in our dna. during the golden opportunity sales event, get great values on some of our newest models. this is the pursuit of perfection.

tonight i'm teaching you a novel way to fill those five slots in your portfolio, the five types of stocks that represent new diversification, not just bisector but by style and strategy so if executed correctly you will always own something that works and holds your interest, keeping you in

the game even when it feels so excruciating you don't want to stop looking at your statement when at the same time you have positions that will go higher. what's the most important category? yield. you need to own at least one stock, possibly more with a big high yielding dividend. unlike diversifying bisector owning multiple high yielders could be a good thing. i wouldn't own five dividend stocks because then you could be vulnerable through bonds or if taxes went up. your whole portfolio could get hurt. if you own one stock with a really large yield and one or two of the others have decent dividends once they get raised that's not bad. i know dividend-paying stocks may not be what people consider sexy but dividends make money. to me that's the definition of sex appeal. i have a warped social life. my perception may be skewed but

buying high yielders and reinvesting back into the stocks is one of the greatest most reliable ways to make money. it allows the investment to compound over time. in other words, over time the money from past dividends pays dividends giving you compounding terms. there is a misconception about this. people think high yielders are about safety or generating income in retirement. if you go back to january of 1926 the, 40% of the return from the s&p came from reinvested dividends. percentage is even high. of course the income stream but that's wall street gibberish for growing money. dividend stocks aren't just a place to hide but they represent a fabulous safe haven in difficult markets. they are not just for retirees who only care about capital preservation, but they do a terrific job. investing in high yielders is one of the smart strategies for making money and one of the safest since dividend stocks have a yield support which helps them hang in there when

everything else is getting eye annihila annihilated. eventually it gets to a level too attractive for most to ignore. devoted a chapter to it in surviving and thriving. that cushion is the reason why i like accidental high yielders. i call them a.h.y.s. when you can find them. these stocks yield north of 4%, not because of dividend boosts but because the share price is falling so far, so fast causing the yield to skyrocket. we have seen them bottom or at least slow counseling. happened during the financial crisis provided they could pay the dividend. we have seen it in big industrial stocks hammered by european woes. once it hits 4% backed up by the cash flow the stocks tend to slow or stop. they are a fabulous bargain longer term. i like the stocks in companies that have raised dividends.

it's one of the clear signals about the strength of business. a company that can raise the dividend has a steady growth. also a company that you can be sure won't be cutting the dividend any time soon. even better are outfits with dividend increases for 20, 30, 40 years. that's stability and that's part of it. other than accidental high yields how do you analyze a high yielding dividend stock? think safety first. high yielders are attractive but

we never reach for yield. a very high yield can be a signal that the dividend is unsustainable and will have to be cut. that's why we have to put stocks through a rigorous safety inspection. i'm throwing the red flag. the dividend is sound maybe they can raise it, but if it seems in danger, [ sell, sell, sell ] you have to sell. consider two real household names. radio shack and super value. in the first half of 2012 stocks were pounded so hard the yields were in the stratosphere. in each case the yield was a red flag flag. sending a signal that the payout would be cut. sure enough they eliminate ed dividends and the stock fell through the floor. with super value the ceo told me a year before he cut it that the dividend was safe. what do you look for? first, above and beyond everything else we look at earnings per share. if earnings are greater than twice the dividend payout they can sustain it when earnings shrink. i think you're almost home free. you can't be certain about anything but the dividend is

secure. if not, go to step two. the cash flow is important in dealing with companies with heavy capital investments. cable companies cause them to repeat high yield. communication networks don't come cheaply. these depreciation and amortization costs don't come out of cash. they do skew the earnings lower which is why the cash flow can give you an idea about the health of the dividend. a lot of callers say why do you like at&t? it's the cash flow. you have to look at the balance sheet to be sure there isn't debt coming due in the near future that can necessitate a dividend cut. lastly you have to know how to collect the dividend. forget all the jargon like record date, x date, declaration, no. on "mad money" we care about one date with dividend es, the must own date. the last day you have to buy the stock in order to claim the next dividend payout. it's the day before the x date. if you want to be prepared for every kind of market out there you must own at least one high

yielder. dividends protect your stocks. they are also a terrific way to make money. what's not to like? mary in missouri, please. >> mr. cramer. i read in the wall street journal a small article on the dividend bubble. i would like to know what that is and how it might affect my utilities dividend income. >> i'm glad you asked me the question. for two years now most of the cognizanti have been saying it's going to crash. all a that happened is interest rates went lower and the dividend got more attractive. the dividend bubble is something i don't think exists. we are not paying much. there is not much interest in the stock market versus the 10-year or 30-year, you're fine. it's a competitive situation. ron in texas. ron. >> caller: yes, sir. >> what's up? >> caller: so how do you know when to get out of a stock? say you are doing well. it's got a dividend but -- how do you know? >> one of the things we like to do is stay in touch with the

fundamentals. we don't do buy and hold. we do buy and homework. if you see that the company has a change like a cfo leaves, ceo leaves. in general we don't like to be greedy. bulls make money, bears make makeup and hogs get slaughtered. if you can make enough money to play with the house's money you're golden. your portfolio should be able to dividend and conquer. make sure you have one high yielder. that will help with diversification. after the break we'll try to make you even more money.

so, what's the problem? these are hot. we're shipping 'em everywhere. but we can't predict our shipping costs. dallas. detroit. different rates. well with us, it's the same flat rate. same flat rate. boston. boise? same flat rate. alabama. alaska? with priority mail flat rate boxes from the postal service. if it fits, it ships anywhere in the country for a low flat rate. dude's good. dude's real good. dudes. priority mail flat rate boxes. starting at just $5.15. only from the postal service. mom's smartphone... dad's tablet... or lauren's smartphone... at&t has a plan built to help make families' lives easier. introducing at&t mobile share.

one plan lets you share data on up to 10 devices with unlimited talk and text. add a tablet for only $10 per month. the more data you share, the more you save. at&t. [ wife ] your dad's really giving him the business... the designated hitter's the best thing to happen to baseball! but it's not the same game! [ wife ] wow, he's really gonna get us a good deal. it's better! no it's not! the pitcher comes up and he's out! [ dealer h he can bunt! whatever. but we're good with 0% apr for 60 months? oh yeah, totally. thanyoyou so much. that must've been brutal. [ male announcer ] ththe volkswagen autobahn for all event. at 0% apr for 60 mons,s, no one needs to know how easy it was to get your new volkswagen. that's the power of german engineering. 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.

all night i have been talking to uh you about the new diversification, a way to diversify by strategy, not just sector. we still believe in the old kind of diversification by group but we have a new prism going here. you need a high yielder in the portfolio, a big dividend paying stock for downside protection and the massive gains from reinvesting dividends. you must reinvest. second you need a way to profit a lot when the market is in good shape. sometimes it is. still keep delivering gains if things get worse which is why you wrus have exposure to growth. particularly when the earnings have powerful momentum. then you need a speculative stock that trades for less than $10. either a company left for dead by big money managers on wall street or one you have never heard of. it keeps you engaged, keeps you doing homework, keeps you from not opening the statement.

i hate it when people put a statement in the drawer. fourth, something from a safe geography. either a foreign company or a domestic security play if the rest of the world is stinking up the joint. last but absolutely not least, you need some gold. gold has a special property. one that makes this metal precious to any diversified portfolio. gold goes up when everything else goes down. consider it your insurance. consider it insurance against uncertainty and inflation, things that cause most stocks to decline but cause the price of gold to rise. i like to think of the gold position as a stock insurance. would you own a home without homeowners insurance? buy a car without car insurance first? don't invest without gold exposure because gold pays off when everything else fails. it's the best performing asset year after year for a decade racking up gains where every other class disappointed. owning gold isn't about the upside. it's about minimizing risk to the down side.

at any given moment there will be a host of sectors poised to outperform gold but none works like the insurance policy of gold, even in currency. it's insurance against currency. how do you own gold? the easiest way is through the spder gold shares. you probably have heard of gld. right? it owns the metal and does a terrific job of tracking the price. you can potentially buy bullion, the physical bars of gold as opposed to the cubes i like in my soup. that only makes sense for investors with a lot of money who can pay to store it in a bank. i have to tell you, i like it. you can do it. what about gold miners? if you pick a company with low cost it can outperform the commodity for a time. remember it won't trade in lockstep with the commodity. the same thing that makes gold valuable is the scarcity. it's hard goat ouft ground cheaply and there aren't a lot

of new mines. plus gold miner have debt, finding costs, management teams that can make mistakes. a lot of geographies have gold they are afraid to go to. they have shut downs at the mines, higher than expected cash costs. expropriation. every time something goes wrong the stocks are hammered so i decided to stick with the gld or the physical commodity. bottom line. if you want exposure to gold and you need it it's your portfolio insurance policy. everybody should have some. then you can do the easy thing and own gold through the gld, not a gold miner who's only loosely connected to the price of the underlying commodity. that's safe. this is gld. stay with cramer. there's always a bull market somewhere and i promise to find it for you right here at "mad money."

>> i like to say there is a bull market somewhere. i'm jim kramer and i'll see you tomorrow. so... [ gasps ] these are sandra's "homemade" yummy, scrumptious bars. hmm? i just wanted you to eat more fiber. chewy, oatie, gooeyness... and fraudulence. i'm in deep, babe. you certainly are. [ male announcer ] fiber one. the economy needs manufacturing. machines, tools, people making stuff.

companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference. ♪ try the #1 gastroenterologist recommended probiotic. align. align naturally helps maintain digestive balance. ♪ ooh, baby, can i do for you today? ♪ try align today. 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. i very rarely put gas in my chevy volt. last time i was at a gas station was about...i would say... two months ago. the last time i went to the gas station

must have been about three months ago. i go to the gas station such a small amount that i forget how to put gas in my car. ♪