>> first quarter driven by defensive, consumer staples and health care, i like conoco as a name that pays 5% dividend. >> guy? >> got me thinking about mollex, but no, aph. >> thanks for watching, we'll see you monday. "mad money" with jim cramer starts right now. i'm jim cramer and welcome to my world. you need to get in the game. going out of business and he's nuts! they're nuts! they know nothing! i always like to say there's a bull market somewhere -- "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money," welcome to cramerica. other people want to make friends, i just want more quarters like this one. my job is not just to entertain but also to teach and educate. so call me at 1-800-743-cnbc. finally! finally on this last day of trading of the week! of the month! of the quarter! we took out the all-time high for the s&p 500.

and we did it in the face of all the usual suspects, the twisted italian politics, a faltering chinese stock market. down more than 3% last night. and, of course, the e -- >> sell, sell, sell! >> we finished strong. the dow gaining 52 points, s&p rising .3%. by now you've heard the statistics, know the dow finished up 11%, that is a staggering amount, people! that's a terrific harbinger for the year. since 1950, there have been 12 other times it's rallied more than 8% in the first quarter and in each of those years, the index finished positively and an astounding how many times? 100% of the time. you know this market's been led by the transports, the single most important general, the one the rest of the troops will follow, that's a great sign. it makes me feel comfortable going into the next quarter

despite the worries and woes and economic weakness surrounding the nation, the world, europe china, doesn't matter. what does happen? what happens now? what happens when we turn the page of the calendar over to april? i'll tell you what happens, we get a whole new set of gloomsters and doomsters that tell you woe is me. first is sequester. we're going to hear those layoffs will kill the consumer, crush the market. hey, i'm just telling you what's going to be said. second, no sooner than we have finished the hideous cyprus ballad, we are about to hear, i'm not kidding, i did not make this up about the collapsing banking system of a whole other country you know nothing about. sloven slovenia. i googled slovenia to find the capital, and it's much easier to pronounce.

all right. ljub -- like ll cool j., l-j-a. trust me, it is going to be rolling off of everybody's tongue a few weeks from now. same deal as the other countries, banking system run amuck, bad loans up the sava, which happens to be the largest river in the central european country. finally, here's the one you're going to hear as early as monday. i think i actually heard it today but i just had to tune it out because it's too repulsive. sell in april and go away. and that's to get ahead of the sell in may and go away crowd. seems like -- remember how christmas comes even earlier every year, it's four weeks before thanksgiving, halloween, well selling in fear of may, a tough month comes earlier every year. nobody seems to care that since 1950, april's been the best month for the stock market. and the best! posting an average monthly increase of 1.97%. better yet, how about this one?

in the last 20 years, april's been up an average of 2.7%. but the drum beat will only ratchet up, why? because the first quarter was so strong. why don't you and i start by understanding each other? i don't rely that much on calendar projections and historical analogies let alone rhymes like sell in may and go away. so clever, let's do it. i care about the fundamentals. and on that score, we may actually be okay. of course no one got hurt taking a profit, right? i said my hedge fund we were up this much, 10%, 11%, going in after the first quarter, we wouldn't press our luck. we would take something big off the table. we weren't pigs. and we just go to the movies all the time. didn't give it back. but you aren't hedge fund managers. i don't want you to time this market, i want you to invest in it. let's see what awaits us fundamentally. not the sell this and that and

this in slovenia. let's go over what's going to happen the first week including the quarter. and numbers that will control most of what happens with the american stock market. first, when we come in monday, perhaps we'll have gotten some answers about what the heck is happening in china. to me, last night's huge decline in the averages said that china's in disarray with a banking system that seems much more stressed than those capitalist communists are willing to allow or admit. but we get the china pmi manufacturing index overnight and if it shows a contraction under, you're going to see another wave of selling in the american industrials that use the chinese market to, well, they make more money in china than they do here. and i'm thinking about the copper companies, iron ore companies. and yes, the earth moving companies. now, we get our own big indicator of economic activity, the march ism index on monday morning, it's going to be not too strong as to rattle the fed into tightening and not too weak to believe we're slipping into

recession. that's call eed nirvana, period. we have a test case of this gigantic rally i keep talking about and the consumer products companies. when mccormick, the spice company. isn't it great when you see that and know what it is? isn't that great? i know what that is. that's the spice company that i recommended, the stock, remember, last month after it flat out missed the quarter, it was horrendous. i said the company's stock should be bought. betting that the mistakes of that quarter would be one off. do you know the stock is subsequently shot up 10 points. well, let's see how right i am. although, i know that we are nosebleed territory for the stock of this perennial long-term winner. i am not going to blame a soul. if you watch the show and you wanted to ring the register on some of mccormick ahead of the release. yes, again, nobody ever got hurt taking a profit. wednesday, we've got two winners reporting. two stocks i have raved about for ages, one is monsanto the other is con agra.

there's been a question mark, mostly for dupont. frankly, not monsanto, they were in good shape. and it caused mon to stage a gigantic rally. i don't know if the best of earnings can build on top of that patent driven gain. plus, given how grain prices have been coming in and how weak the stock of pharma equipment maker deere's been. do you see that stock? now, again, i would take something off the table of this genetically modified sea company. you sell a little mon here. as for con agra, we're going to get a great guide up there. yeah, when they report, courtesy of the integration and because general mills are saying things are going the way of the food companies. look, what do i really want? i want to come in so maybe you can buy some. wednesday also kicks off a parade of what the talking heads are going to have -- look, this is talking headville. it's a parade of central bank chatter that will be deafening. i'm going to be like the gollum

next week. i'm not listening. even that's going to be drown out. we've got an announcement for the bank of japan telegraphing the next big move. why do we care about japan? because it's in a warpath against the own currency. and the fact that japanese auto companies are taking share all over the globe. people think it's unfair, alan mallali complained about it from ford. get some long awaited growth going, something that's eluded the country for more than a decade? we will know after this meeting. thursday, we hear from the desperados from the european central central bank. and let me be clear. the lack of a plan for growth, the lack of central regulation for the off the rails banks, the proactive measures including cutting of interest rates, threatening to destroy the entire european union and, of course, the euro. i see nothing good coming out of

this meeting. i'm just giving you a little heads up here. but no one else does either. so perhaps that's a silver lining of the eu playbook. finally friday we get the most important number of if whole month. yeah, comes right at the beginning of the month. not that much to look forward to after. the nonfarm payroll report. and those who fear that the fed will tighten because employment is getting better. you're in for a shock, sit down because the government layoffs mandated in part by the sequester mean this number, if it's good will be considered the last good number and if it's bad, well, let's say we know rates will stay low for a long time, which means game on for the consumer product stocks that led us in the first quarter. here's the bottom line, i cannot stop people from saying sell in april and go away. even as the second quarter's been up the vast majority of time when we've had a strong first quarter. but i can tell you this. i can tell you that the stock market is headed into the second quarter with a full head of steam. unfortunately, it's headed right into a central bank and ton of stats showing the economy's slowing.

plus the u.s. remains the best place to invest just as it did in the beginning of the first quarter in 2013. let's take questions. let's go to tim in missouri. tim? >> caller: hi, jim, love your show. >> thank you, tim. >> caller: i'm a metra pcs dealer, and the company's been cheerleading the buyout from t-mobile. now, came out today urging shareholders to reject the idea. i don't understand the stock split in the t-mobile offer as it relates to shareholders. what do i do? >> sell, sell, sell, sell! >> you made the money, let's run, this is not the kind of takeover that -- i've only been to one or two takeovers in the whole eight years i want you to stick with, this is not one of them. let's go to jackson in texas. jackson? >> caller: hey, jim. long-time viewer. >> thank you. >> caller: my question concerns halliburton ticker h.a.l. given a mixed outlook from schlumberger highlighting north american revenue, ubs raising

the price target yesterday afternoon to $53, should i take profits? >> no, no, stephanie link who is co-director of my charitable trust, we were talking about halliburton and how much we wanted to buy it for the trust, here's why, we think there's firming in international halliburton, we know north america's not that good but the rest of the world could be firming. it could go to 45 or 46. sell in april go away? not so fast! sure, we can be entering a time of central bank chaos, a lot of bankers would be squawking, but u.s. companies moving at full-speed ahead. we closed the first quarter terrifically. we could actually get more of the same. "mad money" will be right back. coming up -- payday, paychex investors a steady check. but could an improving u.s. economy provide a bonus? or is it time to cash in and head elsewhere? don't miss cramer's earnings exclusive with its ceo. and later -- eye on biotech. cramer's continuing his efforts

to keep your portfolio healthy by examining the best in biotech. next up -- one of the top-performing stocks for a better part of a decade. but can its pipeline of drugs keep it in top shape for years to come? all coming up on "mad money." 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. (announcer) at scottrade, our clients trade and invest

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our leaders in washington are paying lip service to the performance of small business as they posture and generally do nothing constructive to reach a fiscal cliff deal. but if the politicians cared about small business, you know what they would do? stop talking and listening to paychex, payx, the processing company for small businesses that reported earnings last night. and what did they say? well, paychex reported a solid quarter, it was a penny above

street estimates and reaffirmed its total guidance for 2013. thus continuing its mid to high-single digit earnings growth. waiting ining for a big burst hiring, but giving a big yield and today hit the 52-week high. let's check in with the president and ceo of paychex find out how the company's doing and get a read on the hiring situation in this country. welcome back to "mad money." >> thanks, jim, good to be here. >> we saw some good trends, some a little bit -- big on a percentage basis but still small numbers. what is going on that you're getting? are you starting to get more business formation? or is this more checks per customer? >> well, we're certainly seeing the more checks per payroll and this is the 12th consecutive quarter we've seen a growth in checks per payroll. that's good for the existing businesses, i think the new formation is still a little bit slow. but as you've said on the show before, i think you're starting to see housing, the pricing pick up. as the inventory dies down,

we'll see more small businesses start around housing. so i think it will be picking up, it's just slow. >> okay. now, are you starting to see some real geographic pick-up? we are getting two countries, i think. we've got countries that are involved -- part of the country's involved in oil and gas, part involved in manufacturing and oil and gas and part of the country that's kind of involved with finance and that's not doing that well. are you starting to see regions that are genuine growth regions? >> a little bit. i think, again, it's that southeast and southwest that is building starts to take off again, you'll see small businesses around housing and around that expansion start to take off. and we are seeing a little bit of that in the florida area, in the arizona area, and those spots like that, we are starting to see it pick up a bit. >> all right, now, in the areas that aren't picking up, what do you think is behind that? because we're seeing this -- as you mentioned, we're seeing housing come back in value, i'm trying to figure out what does it take? the fiscal cliff behind us. are these people worried about

sequester now? what is the big worry and big headache that's keeping people from doing something? >> well, i think you still saw consumer confidence fall in february. and i think that's still a concern. if you're going to open up a second business or start your first business, you're still a little worried about getting started. i think on top of that, of course, health care reform has caused concern. that's driving a lot of concern in small business as to what they're going to be responsible and what they're not. so i think that's still going to kind of put a little bit of a wet blanket on us this year. but i think companies like paychex, that's what is going to help. it's going to give us opportunity to invest and get the clients to come to us to help them out. >> is there a number that we should be looking at? for instance, payroll numbers next friday. is there a number where you can accurately say, you know what? we're going to go from that 200% to the 300%, 400%? >> i don't think so, but if we could get the new business growth back up to where it was a number of years ago. you get over 800,000 new business starts and then you'll start to see the client growth

will pick up. we're still running about the same kind of percentage of sales of new business growth that we have been, but we need the more businesses to get started. but in any case, you know, we're trying to do a lot of things to get it started, the work with franchises and banks to give us more referrals starting to help us even when the business market isn't growing that fast. >> all right. one of the things that astounds me. you've got an hr business that is terrific. another workday, it doesn't have any earnings, it's got $10 billion evaluation, big revenue growth. do you have -- will you eventually have two companies? one a software service, which we know makes a fortune but does not get the multiple that a workday does? >> well, you know, that's always can be looked at from a strategy standpoint. but, you know, really i think our whole business will move to software as a service anyway. right now, our clients even though they're using a payroll specialist have a software as a service product, even at paychex not just payroll. you can go in and do your own

payroll, call the specialist next week, your cpa can be in on that product at the same time you're on it. really, i think the company actually you'll see it move more to all software as a service combined with that total dedicated person to help you in the future. it's more of a hybrid. maybe we'll get that multiple in the future anyway. >> i know we don't have the hiring in this country we need to accelerate the business aggressively. do you think when you hear the federal reserve talk about potentially raising rates some time in the future that the back end, what you can do with your float will ever be able to get a return like we used to get? >> oh, i think it's going to happen. you know, as you see more expansion, i think the economy's going to come back, it's a slow recovery. and i do think that will drive the interest rates up and that will certainly bring a lot of revenue to the bottom line for us. you know that goes right to the bottom line and we're not waiting for it. we've really when you look at our past five years, we've made up for that interest revenue that's dropped off. made up for it in the hrs revenue which continues to grow

at double digits. >> terrific job. some of these analysts who have sells on it, they've missed the last seven points. we haven't. thank you so much for coming on "mad money." >> thanks for having us. >> okay. that's president and ceo of paychex. i've liked this one from the first time we had him on. it's got great yield. fabulous balance sheet, nice growth and if we ever get rates higher or some job formation, this one's to the moon. stay with cramer. coming up -- eye on biotech. cramer's continuing his efforts to keep your portfolio healthy by examining the best in biotech. next up -- one of the top-performing stocks for a better part of a decade. can its pipeline of drugs keep it in top shape for years to come?

all week we've been telling you about the past and future of the pharmaceutical industry. back in the 1990s, during the heyday of big pharma. the mercks, pfizers, they were thought of as rock stars, growth stacks and they sold for as much as 30 to 40 times earnings. the biggest patents expired, the growth diminished or vanished entirely and big pharma became a nice defensive place to find stocks with high yields, fixed income alternatives. but the truth is, inventing new drugs can be a fabulous growth business. maybe the best there is. just these days the real

innovation is happening at a different set of companies. that's why i've been saying the important biotechs of today represent the future of pharma. they are well on their way to being the next big pharma names. so far this week, i've recommended celgene, gilead and biogen which you might have heard earlier today on "closing bell." today i've got one more biotech. this stock exemplifies the growth trajectories i'm talking about. i'm referring to regeneron pharmaceuticals. right now it's up $176 $12 off the 52-week high. it's got a market cap of $17 billion. do not let that high share price scare you away. let me tell you a little story. so you understand where this company's coming from and where i think it's going to. those of you who watched "mad

money" two weeks ago, you might remember it's one of the top eight performers of the last eight years. more important, though, i actually recommended regeneron a couple months after this show started, in 2005, after a great interview. at the time, it was trading at less than $5 a share. it was a pure speck. i presented it to you as that. the company didn't have a single drug on the market. they had been toiling for about 17 years. at that point come up with nothing they were able to commercialize. we saw some green shoots. and since then, let's say regeneron has been unstoppable, up more than 3,400%. if you bought 1,000 shares eight years ago for $5,000 you would have an investment worth of $175,000. that's enough to flat out buy a very nice condo most places, maybe a little ski house. hey, maybe more ambitious you can use it as a down payment for a really big house. regeneron was up 209%.

can you believe this? okay. 2013, up 3% since the beginning of the year. however, i think the stock has plenty of room to run. i'm going to tell you why in a moment. you need to understand that regeneron is not like celgene. the other stocks have terrific growth. one of the reasons i felt so confident recommending them is as they have ridiculously low multiples. in other words, they're cheap. they're cheap when they're growth rates. you can make a case that celgene, gilead and biogen are actually value stocks at these levels, even after the remarkable runs this week. i don't know what got into the stocks this week, they did kind of go nuts. i don't think it's the series, that's where the money's gone. now, you cannot say anything in the same sentence. regeneron is a 29% long-term growth rate. it's a turbo-charged growth stock and that's exactly how the

market treats it. of course, there's no reason the stock can't trade up to 40 or 45 times earnings with that growth rate. you can say it's a good opportunity here, but you can't say it is cheap. so why do i think it's a good opportunity when i gave you that caveat? first, there's ilead, the regeneration drug that put it on the map. can prevent blindness in people with eye problems was approved back in november 2011. the sales of this drug have repeatedly blown away the estimates. in large part because it needs to be injected only half as frequently as the competition. but the same results, what would you like? it's injected in your eye. would you like twice the number of injections? no. did 838 million in u.s. sales in 2011. only started selling internationally in the fourth quarter of last year, that's a basically untapped market. and the company studying this drug for a host of other conditions. in phase three trials for diabetic as well as for vein occlusion and in phase two for

central retinal vein occlusion. and when you include each of these indications, could be possibly doing $4 billion in sales. this year alone the drug is expected to pose 50% sales increase, and that is huge, especially this is by far the largest product. but what else? okay, a bowl cancer drug on the market which helps destroy tumors. they're partnered up with sanofee. the drug racked up $36 million in sales for 2012 which was a solid start. meanwhile, got european approval last month. then regeneron has a third drug, for rare inherited auto inflammatory conditions, but this one isn't expected to amount to more than $50 million drug. beyond these, though, it is a research and development machine. the company is an incredibly antibody discovery platform that drives its new drug pipeline. and this platform is so good

that they made a deal to provide $160 million in annual funding for preclinical work. good, that costs a lot of money. pays for basically all the clinical development costs and in exchange they pick the antibodies they want to develop within the partnership. keeping 50% of the profits in the united states and anywhere from 35% to 45% internationally they did good on this deal. right now, four products they're developing. by the way, actually owns 16% of regeneron and giving them the freedom to purchase up to 30% of the equity. that would be huge. within the pipeline, a bunch of potentially hot drugs i like and have looked at. a hypercholesterol product that's entering phase three. and this could potentially do $3 billion in peak sales. it's an alternative, by the way, for those like me can't tolerate anticholesterols. there's a lot of people who can't. it's a very big market. they've got an arthritis drug going into phase three that could be worth $750 million at

the peak. as well as asthma drug in phase three. do $500 million in peak sales. here's the bottom line, you know i hate to chase and only a handful of stocks up as much as regeneron, but this biotech play is for real, an up and comer and it's not finished going higher. put simply, the growth story, it's far from over. doug in florida. doug? >> yeah, hi. hey, jim, boo-yah. >> boo-yah. >> caller: great staff and they laugh at my jokes and convincingly, too. >> i tell them if they don't, they're fired. >> caller: long time no speak. i was one of your first callers, your first week of "mad money." >> thank you. >> caller: march '05 and just to claim my just due, that call proved to be prophetic as i then predicted, one, you'd be the lewis ruchiser of the new

millennium and they know nothing outburst moment to which i cheered about time someone wakes 'em up. >> thank you, doug. i thought you were going to -- i thought you might say lewis c.k. which would not be so great. but he's pretty funny. go ahead. >> caller: somebody on the staff didn't know who he was. anyway, now regarding the amgens and biogens and health care in general. >> right. >> caller: as the scientist, it seems obvious to me that classic big old pharma is out and cutting edge biotech is the future. so who, what, when how is the best way to play? and thanks and kudos on our eight years. >> well, you are terrific to say those kind words about me and our staff is fabulous and thank you. i'm agreeing with you entirely. that's why i like celgene, biogen. look, i've got to tell you, i think regeneron is really great, gilead, amgen's great, we didn't

make the cut, didn't have fast enough growth. it was more like old line pharma. all right. i think it is time right now to -- to ride the innovation wave in biotechs. this week, look at this, these are all the companies that are making the big initiatives. you should have one of these. not just the income-producing drug stocks, which, by the way, you know i like too. and regeneron may be the fastest grower of all. don't move, "lightning round" is coming up next. [ male announcer ] i've seen incredible things.

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call... today. liberty mutual insurance -- responsibility. what's your policy? it is time -- it is time for the "lightning round" on cramer's "mad money." rapid-fire calls. you say the name of the stock i tell you whether to buy or sell. my staff prepares the graphic. we play until this sound and the "lightning round" is over. time for the "lightning round" on cramer's "mad money." joe in florida, joe? >> caller: jim, long time listener. thanks for your help. >> thank you. >> caller: i listened to an earnings conference call from sxl, sonoco longistics.

>> i like it too. it's a good yield. let's go to reed in florida. >> caller: boilermaker boo-yah from purdue university. how are you? >> oh, man, twhat's going on? >> caller: well, my question's about nucor. >> i think it's going to do terrifically in the future. they've been taking advantage of america's huge reservoir of natural gas and building a new plant and i think nucor is outstanding! >> buy, buy, buy! >> only steel company i like. let's go to diana in new york. diana? >> caller: hi, mr. cramer, should i take my verizon profits which are growing with the dividends? based on the t-mobile news about subsidies. should i be concerned about -- >> no, however, no one ever got hurt taking a profit, the stock is up huge, it's been one of my best recommendations since i started the show. i still like it, but it is up a huge amount.

let's go to sandra in north carolina. sandra? >> caller: boo-yah, jim from greensburg, north carolina. >> oh, yeah, serious, serious ncaa territory. what's up? >> caller: got a question on cvr energy. ticker symbol cvi. it went up, about 55 -- >> right. i want you to stick with it. it's a refinery with a good yield. let's go to terry in virginia. terry? >> caller: hey, mr. jim, big, big, big boo-yah from virginia. >> what's up? >> caller: hey, little while back y'all had on millennial media on your show, they sounded good, i did the technicals, they looked good, i took a position on them. but unfortunately since then, the value of the stock's dropped about 50% and i'm wondering if you could tell me what's going on there and -- >> the long -- the long knives are out for that company. i've got to tell you, at six bucks, when you say something like how do you lose at six? it goes to five, but i got to

tell you, paul came on, they missed the quarter, but it's just not that bad. okay. i'm not going to write these guys off yet. i want to take another call. alan in illinois. where are my illinois university business school last night. what's up? >> caller: i've got a two-part question to ask you. you know how you cover biotechs? >> you bet. >> caller: you should cover reits too. and my stock is anheuser-busch. >> bud, this is a business, i decided not to make an oligopoly, comes in, takes share, but bud is terrific. i want to own it. i want to own diagio, i want to own brown forman, i love the liquor business. and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade.

coming up -- healthy outlook? cramer's covered the best in biotech all week and tonight he's capping it off with a look behind the curtain. don't miss an exclusive with the former ceo of a medical power house. could his insight help you spot your next pharma play? ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. has an equally thrilling, lesser-known counterpart. conquer them with the exhilarating is 250. get great values on your favorite lexus models during the command performance sales event.

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when you're trying to pick high-quality stocks, there's there huge component that cannot be quantified. a lot of what goes into making a company great has to do with management and the way people at the top execute. but these are things you can't evaluate in a spread sheet, you can't put a number on the thing. we know phenomenal executives when we see them and need to learn from these people if only we can spot when someone else is doing something similar. that's why i'm thrilled to be talking to the former chairman and ceo of shearing plow after first turning it from a down and out -- money losing company to a drug power house in record time. partner and managing director,

the boutique investment bank also works as the chairman of the board as well as being the recently installed nonexecutive chair of avon. always been a transformational leader. someone you can bank on to lead the company to a better place and he's come out with a fabulous book called "reinvent" a leader's playbook for serial success. i always tell you that management is important, this is a terrific opportunity for you to learn something from a true master. so listen up, welcome back to "mad money." >> it's my pleasure, jim. >> good to see you. have a seat, have a seat. we are constantly fighting this battle on the show. we know there's a manager who is terrific. we try and relate the priced to earnings multiple, try to relate the four walls of the canvas of a business. how much -- how important is the ceo to a stock and to a turnaround? >> jim, you said that before and i fully agree. any stock before you invest in it, look at the ceo. look at the person's

authenticity, sense of direction, willingness to make the sacrifices and to be a leader and to get the people to move in the same direction. if you don't see those qualities, i would not invest in that stock. >> okay, now, do you see it in the landscape now? are there people who resemble what you did at schering, coming into companies that are really left for dead and turn them around quickly? >> that's the interesting thing in my book. there are some common characteristics that really make a difference. and if you look at the landscape, there are some very good chief executives. david novak. >> remarkable. >> just look at ford. alan got them to focus on the business. >> right. >> and he built a culture of accountability. and he led the way himself. david novak empowered his people, all these kfc restaurants, they felt they were owners. and even in tough places like china, they are able to do well

even though they're a u.s. company. these are ceos that really drive the business forward. >> it's interesting you mentioned two men who are inspirational and have passion. >> passion. >> i see a lot of people be very cool, be very ascetic, that's not the style. >> you've got to make an emotional connection with your people. if you want the energy out of your people, make the emotional connection. and passion, courage, tenacity, which i call the power trident in this book. passion, courage, and tenacity makes a good ceo into a great ceo. i would look for those traits before i invest in the stock. >> okay, well, you would look for those traits before you become chairman of a company? for instance, there's a company that's been troubled, avon. you are now non-executive chair. does she have it? >> so she had the courage to take the job. >> courage. you said you've got to have courage. >> she had the courage to take the job. it was a tough situation. she was a vice chairman of

johnson & johnson. so, she takes on this very difficult -- that tells yo uh something about the person. >> okay. >> then she has not made a lot of bombastic stuff, she is there with the countries working the system. she's established some very clear cultural standards, culture of accountability. she's going to hold people accountable and she's starting to assemble some good people. there's a good person who runs latin america, which in that business is a very important part of the company. you've got to put the strong people in where the important areas are. she's got a very good person in charge of latin america. she's making the move, she did do a very good turn around in pharmaceuticals at johnson & johnson and we're very hopeful she's going to do that here too. >> you talk about the abc, the attitude, behavior, the culture. when you got to schering-plough, they didn't have a great culture, is it better off than when you came into schering?

>> the advantage of the old culture, it's a strong culture, but it's very hard to change. that's one of the hardest things for change leaders is how do you get a culture to change? and the important way is you've got to get people convinced that they need to change. and you've got to show them a direction. and you've got to role model it and you've got to be patient and tough and you've got to make sacrifices and you've got to fire a few people and you've got to send messages. it's a tough, tough journey, but it can be done. >> all right. you reinvented schering, a company we knew was kind of a bleed-off company, like a lot of big pharma. why is big pharma struggling here? why are the celgenes, the biogens doing all the inventing? >> reinvention is what i talk about in the book. i think there's a need for big pharma to reinvent. because some of these older approaches are no longer working. you just heard today, and i think your analyst carrying the news, biogen is the company,

specialty products are the new way people want to have their drugs come to them. the primary drugs are starting to get a little old. >> right. >> so those that embrace specialty pharma do a lot better. also, your r & d, you've got to take that research and development and seriously, and if you spend your time as ceo doing a lot of other things, probably you're not focusing on the most important thing. but pharma is ready for a reinvention. and there are companies like novartis, large company, approaching cancer in a very special way, targeted therapies, gene-based approaches and they're going to make a big difference. people like david epstein that runs the pharmaceutical business at novartis, he knows the business and going after that area. so i will still watch for the top people. >> one last question, does it work for every industry? we've got turnarounds we're following, blackberry jc penney, these seem like really difficult turn arounds. could you get in there and change? >> this book is meant for all industries. >> right.

>> it really does work. it always starts with people, comes up with culture and ends with execution. if you have these three legs of the stool, it's going to work. but the ceo has to make the people part work, the culture work and the execution. >> tougher than most people can handle, fred. >> it's tough. >> most people can't do it. >> and that's why looking for great ceos is critical. >> absolutely. that's fred hassan, a moneymaker, he's author of "reinvent: a leader's playbook for serial success" which is exactly what he had. and still has in business. thank you so much, fred. >> thank you, jim. >> stay with cramer. jim cramer, you're one of my heroes. >> i look forward to your show every weeknight. >> thank you so much for helping beginning investors like me. >> when you talk about the market, i just believe that you're spot on. >> oh, i love it, thank you so much. every night we watch you. i have learned and earned.

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when you get the price breaks, do you take them? when you see a sale, do you run to the stock or run away from it? i think most people don't take the sale. they don't it because they don't know how to spot a bargain. and frankly because it's not always obvious. it's not like the fight i got into at vanity fair factory

outlet in redding, pennsylvania, a couple of years ago over a pair of lee jeans. no one's pulling one pant leg while you're pulling the other. needless to say, i got the pants, the other guy didn't pull hard enough. much more subjective, much more. but certainly still doable for you at home. particularly around earnings announcements provided you have a clear head and you know what you need to read in the press release here in the conference call to pull the trigger. let's take the three sales that the market put on last night. the discounts on the stock of red hat, pvh, and five below. each has its own reasons for being marked down and not all are worth buying because there could be more sales and markdowns ahead. just remember, just remember, those jeans that i stole at vf for seven bucks, they didn't go down in a straight line from $26, there were many sale stops in between. first, when red hat reported the headlines, they were dismal. lots of worries about slowing

sales, endless chatter about a weak government vertical meaning red hat didn't sell enough service contracts to slimming down governments worldwide. to me, though, red hat is part of a secular wave of glory where companies save money by going to an open source system, the cloud. and when i got on the conference call, the worries that took the stock down 10%, they seemed way overdone. it was a fabulous opportunity, but you had to buy the stock from panicers, that's never easy. it was there for the taking, though, for anyone with an understanding of red hat and of the mild mannered ceo who has been on the show numerous times and told you not to worry it was all good. and it was. stock finished up. then there's five below, oh, got a lot of cat calls @jimcramer on twitter about this one. this $5 and under retailer is growing by leaps and bounds. we will be able -- they are going to be able to add ten times as many stores as it has right now. and they'll do it without a problem. the quarter they just reported with a thing of beauty, but the

company offered light guidance, in part because of the cold weather, in part because of the distribution center problem and in part because they were being a little more cautious about the future. to me, this is a regional and national retail story in the infancy, a terrific concept with amazing management and growth path that could stretch for years and years and years. and when you get a price break, you've got to pounce. monday's business, people, get some. and then there's pvh, the toughest of the lot. because the ceo told us the lowered guidance and had to reset the whole year. to me that meant be careful. you could have a lee jeans situation. i will sit out that sale and let things shake out. no hurry. we will get a chance and we have to take the chance when we get it as if i don't think the sellers are finished yet and the stock could be in the penalty box for a couple of weeks at least. it was a truly disappointing quarter versus what i was looking for. we can always circle back to that one. remember, when you go shopping, you now know to look at the web

for competitive information before you buy, right? same with stocks, forewarned is forearmed in the market. if you don't make money, stay away from this mall. you'll just get fleeced! stick with cramer.

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