"final trade," grasso. >> eqtp. >> short gold. >> long aig. >> garden. >> i'm melissa lee. thanks for watching. see you tomorrow 5:00. don't go anywhere. "mad money with jim cramer" starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to cramerica. other people want to make friends. i'm just trying to save you a little money. my job is not just to entertain you but to educate you, so call me. i got a news flash for you. the market is allowed to go down. it's allowed to repeal gains faster than those gains were put on. that's okay. as we saw today with the dow

slipping 139 points, s&p 500 falling 4.3%, nasdaq declining .89%. it's been allowed to go down for no apparent reasons or for reasons we can make up to suit the cause. i got an idea. let's go over some of the reasons i could give you for the selloff with a total straight face. i'm going to give you ten totally authoritative explanations we can try out every night when everything looks dicey. we ought to call it something. let's call it the bear boilerplate special. here we go. one. the economy's weak. so we should sell stocks. two, fed policy isn't working. why don't we sell stocks? three, revenues aren't any good. maybe we should sell stocks. nour, europe's not getting any better. so you should, yeah. sell stocks. five, china's getting worse. time to sell stocks! six, it's may. bad month poetrywise. rhymes with go away. of course we should sell. seven, markets run too much. eight, stocks are expensive. hey, we should sell stocks. nine, taxes going higher.

sell stocks fast. and ten, earnings aren't so hot, sell, sell, sell. how was that? was it good? now, why don't i come out here and do this every night? it may be a continuous loop. maybe do it down here, make it a little interesting. how come i don't want to sound smart, too? particularly on a down day i could be so smart? how about because i'd rather be right than merely sound smart. i say use this down day for a little primer. explain why i don't subscribe to the orthodox. first, you know that all ten of these reasons to sell could have been mouthed for the last 4,000 dow points? that's right. 4,000 points ago. sell, sell, sell, sell, sell, sell. dow 14,700, let's see, all those -- 10 of those pearls of wisdom that could have been said by me any day i chose for the last three years. i could please many of the

critics who don't like i say i like certain stocks and i think they should be bought simply by coming out here and mouthing one of those saintslike utterances. i could get my reputation back! you know what that would mean? i could have more friends on facebook. more followers on twitter! i mean, those are the twin keys to happiness. it's just that i could have been giving you the boilerplate special for so long, i could have helped you stay out of the whole move. i don't know why anyone who says these things would have any credibility with you at all. even as they always seem to have credibility with those who believe stocks have no right to be as high as they are, or maybe even go up at all. these ten evergreen bits of genuine homespun wisdom, they ring true every day the market's down. look, i can't blame people. the great thing about spouting these truisms is that they're never wrong. what could ever be wrong with saying stocks are too expensive? that's got a great ring to it. hey, stocks are expensive. i remember i first got started buying stocks in 1979. the dow was at 8500. i'm sorry, the dow was at 850.

i couldn't even remember because it was so low. the dow was at 850. tonight it closed at 1470, okay? 14,700, it was 850 then. that was 13,850 points ago. okay. back when i started buying stocks, we had inflation, an unstable government, a re'sarylike environment. by the way, we had terrible leadership. we had a cold war and one of those periodicic sos of bad will. suffice it to say when i bought it at 850, boy, stocks were incredibly expensive. they were hideously expensive. i guess i would have looked really smart then. let's say i had "mad money" in 1979 and said you've got to sell, sell, sell. i would have been wrong. 13,850 points wrong. i would have cost you a chance to make a lot of money, but i might have sounded really smart. second, we are not s&p traders here. i don't recommend owning the s&p 500 that would be applied to that index. and lots of people who you hear spouting them are just index fund people. they look at owning stocks as if

they were all one stock. they don't like to look underneath the hood. ever since they commoditized stocks, sweeping judgments like the ten brilliant points i made earlier, they can look really smart on a down day. but if you watch this show or have watched it at any time in the last eight years, you know i'm not about the market. i am not about saying wow, risk on. no. risk off. i know you. i know you are trying to find the next domino's or the next e regeneron. avoid the next zynga or groupon. these have nothing to do with looking smart. they're about discerning what to buy on days like today when the market grows a real sale. don't believe me? we're going to use a whole another analogy. get out of this whole stock world because it confuses people. i live about a mile down from the shore hills mall. you buy those big packages and it's hard to get home. say there's a sign that says retailers in the short hills

mall are throwing a sale. everything is being knocked down in price because the stores all trade with the short hills mall futures. don't know that? it trades in chicago. and they're putting tremendous pressure on the prices of all the merchandise in the mall. would you say holy cow, i've got to stay away from that mall. wow! something must be wrong with all that jewelry, probably holes in the fendi gloves. i don't want to pay $700 for four-inch jimmy choo high heels. i was paying $750 for them yesterday before the sale. something's got to be wrong here. is there suddenly less toe cleavage? did all of those suits i like so much go out of style overnight? how about all the glassware, it must be cracked. had those tight true religion jean shorts now become baggy? or are you like me and you hope for an across-the-board sale to occur? even as you know you're never going to get that lucky. how about all those assumptions about how stocks don't deserve to be high? what does that mean, deserve? is that because they have a grand jury somewhere that's like a federal judge of stocks? who's going to definitely put

you under arrest and the buyers and you're going to be sentenced to doing a lot of community service for paying too much? is there some law, perhaps something in the constitution i don't know about that says you were mandated to avoid buying stocks and must buy bonds because they're intrinsically safer like the new bond commerce clause? i don't know. i don't know that law. i've never heard of the judge unless judge judy has started giving investment advice. how about i've got another idea. stock buy miranda warning. let's get really granular here. yesterday we had on pat doyle from domino's. we could look at his earnings report, look at the stock and say, hmm. that was a good one. i ought to buy it. now today thanks to the sale domino's dropped 56 cents. does that mean the quarter really wasn't as good as we thought? maybe it was bad. and if the market's down tomorrow, we've got to presume something. we've got to presume that doyle is now serving up rancid pieces that around as tasty as that corrugated box they come in. and the cheesy bread, gives you

hives. or maybe you're just getting a better deal in dpc. the day before we had sandy cutler on, ceo of eaton. a clean runway but the stock went up before people could buy it. today eaton was down $2.14. it's down 3.5%. does that mean that eaton had a bad quarter, or does it mean when the market goes down, it has a greater impact on eaton than a lot of other stocks. to me this stuff is patently obvious. the market is giving you a chance to buy domino's at prices you shouldn't be able to get at based on the remarkable performance of these companies. i would feel differently if something actually happened today that drove stocks down. if the fed said it was going to tighten and stop buying bonds, if president obama was going to push for a 50% transaction tax, if europe had decided to raise rates, if the chinese communists had mandated lower prices for all stocks including those overseas because you know they're really powerful, but none of those things occurred. we've been up a lot. people want to lock in profits. they don't want to give up gains. nobody ever got hurt taking a

profit. so stocks went down. it happens. do you know -- it could happen again tomorrow. maybe even the next day. just maybe the sale continues. long sale. it's a buy one get one. i don't know. it's a lot smarter to shop on days when things are on sale at the mall than when they weren't as long as the stuff's not been damaged by fire, flood or infestation of moths. so don't lament it. here's the bottom line. a ton of companies have reported earnings that were good. and their stocks got out of reach because they were good. now the stocks are coming back in reach. that doesn't mean that their companies are less valuable. just the stocks themselves. last i looked, that's actually making them bargains. and maybe, just maybe, we'll get some even bigger bargains tomorrow. let's go to nathan in california, please, nathan. >> caller: jim. how you doing? >> boo-yah, nathan. >> caller: it's an honor. big bull market boo-yah to you. there's a lot going on with sirius xm satellite radio. and they're reporting earnings, new ceo, liberty taking over, streaming features. what do you think? >> you know, sirius is funny.

it's not a play on music, it's not a play on howard stern, it's not a play on the unbelievable baseball channels they have. it's a play on auto sales. and auto sales are looking real up. and so therefore sirius is actually pretty good. and the renewal rates are real good. i like it. up 50 cents. shawn in florida, please, shawn. >> caller: it's an honor. first a shout-out to my grandfather and all my brothers at the florida state university. go 'noles. >> go 'noles. i don't like the gators, okay? >> caller: yeah, me neither, man. >> yeah, bury them. >> caller: yeah. >> okay. >> caller: okay. my question today is about zotus, zts. the other day you accurately predicted that it would beat analysts' estimates in its first quarterly announcement and you were right. do you think that the earnings and revenue growth will be enough to support the high pe ratio? >> i've got to tell you, animal health and animal health science, one of the greatest businesses in the world.

if merck schering-plough were to spin out its animal health business, merck stock would go right to the 50s. more important, you would want that business, too. i think it's absolutely terrific. donna in texas, please, donna. >> caller: boo-yah, jim. >> boo-yah, donna. >> caller: thank you for insp e inspiring me to get in the game. >> okay. >> caller: last week my husband and i stopped at a cracker barrel for a late lunch. >> mm-hmm. >> caller: and i noticed a charging station for electric cars in their parking lot. and with summer and road trip season ahead, i would like your opinion on their stock. >> okay. you know, i think it's a little -- i don't think that's a needle mover, the charging station. i will say this. that cracker barrel has one of the most amazing buybacks in the world. okay? this is a company that had -- let me get the number -- this is a company that had a 31 million shares not that long ago, now 23 million. the only problem is you've always got to pop a lipitor

before you have that cheesecake with vanilla ice cream and slice of cheese on top. boilerplate special. we had it right here. we're serving up market bargains on a silver platter. you can actually believe in all the bear things. they've worked. they sound brilliant. but then again, maybe they're only brilliant on days like today. "mad money" will be right back. coming up, time for tech? where pc makers struggling and concerns over apple's stable of i-products sending shares of its suppliers tumble, where do you turn? cramer's browsing avnet supermarket of tech to find out. and later, getting hot? trains, planes and automobiles. you can find timken's advanced engineering all over the world and beyond, but is the stock as strong as the steel? cramer speaks to the ceo just ahead. 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. [ male announcer ] there are people who find their own path. and never back down. who believe the american dream doesn't just happen, it's something you have to work for. ♪ we're for those kinds of people. because we're that kind of airline. and we never stop looking for a better way.

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so far this earnings season when it comes to the technology stocks, we've got a lot of mixed signals here. on the one hand, major players like ibm, oracle, qualcomm, people thought they disappointed. we got a better than expected report from microsoft, big semiconductor play there. apple supposedly disappointed. there wasn't a lot to like except that dividend boost but maybe that's all it took. how do we puzzle out what's really going on with tech? simple. you want a read on tech? you talk to avnet, avt. the company i always call the largest supermarket of tech nothing on earth. over 100,000 customers. customers. electronics mark the businesses like semi conductors.

technology distribution among the biggest distributors out there. they reported last thursday. the company reported a 3% earnings beat with revenues that came in a bit higher than expected. they had the analyst day today which makes this the perfect time to check in. find out more where the industry headed. mr. motte, welcome back to "mad money." i want to use the title, it says fiscal 3 q 13 result, mating for macro lev annual. are you not waiting at all? >> no, we can't. we are taking the position the area of uncertainty is the new norm. we have improve the results. we were very proud of the sequential increase off the december quarter. year on year, we have gaps in pemancthat's what we are workin >> the one stock idea you came out with remind me of a nordstroms or a kneeman, where a

guy who knows you, he's your sales person. he knows what you want. it doesn't you go to the store and pick it off the rack. >> that's right. what about the components world the supply chain and in the i.t. world, it's about the total solutions. its the ecosystem, the bars and part partners we use. >> who would want that special services person just going into the big rack store? >> yeah, so, a medium business might have a challenge by integrating and existing a if you solution with a lot of legacy systems overottawa you may have the ability to go to software as a service model to add a new application, but you got to interface that application with a lot of systems that are already there today. that's just not plug and play. that's not like downloading an app from itunes an plugging it in. that's where our bars helps on a needs analysis by customer and come up with a solution for them to make sense. >> let's go back to the apple instance. what i'm seeing is there is very

little to no growth and a bunch of segments. and we know that pcs are negative. tablets still got, you know, something going up, but, you know the dumb phone, bad, i'm trying to figure out where, what's doing so well that it could make so it that your second half would be better than. jim, as you know, we have covered that broad segment. >> you have auto, you have anything. >> think of that broad bush industrial base. actually, it was if decline in 20 when th 2012. industrial space was probably one of the fet users. we're not forecasters, but if we look at what the industry exexperts are saying, the return to growth we believe could help provide great ledgers for us.

>> t. mobile came public the device revolution, it is so dramatic. is there anything about the device revolution that would make you feel like no matter what happens, things have to get better? >> jim, the explosion of, let's talk about the internet of things. it's much more than phones these days or tablets for that matter. some of our suppliers are talking about 10 million connections moving to 50 billion connections in the not too distant future. maybe 2020 a lot will be machine to person, machine to machine, not just a mobility device we will hold in our hands. by the way, every new billion of those need the infrastructure for us to be able to enable these wonderful applications that change our lives. >> speaking to you graphically, some of our guys have been saying, acia they see a turn. some are saying europe has bottomed. you got the vast panaplea. is there anything that you think the conventional wisdom is wrong? >> no, when you use the term

"mixed bag," jim, anything in our europe and asia, in fiscal '11, they were up 35% year over year. that followed a recovery and year-to-date, they're in the negative single digits. it looks like they're ready to cross over. asia is ready to cross over to year on year growth. >> that's a stock trading moment. that's very positive. >> we don't want to overplay i. it's good to see, creeping back closer to that point, asia crossed over a few quarters ago, americas right now is the lagger on a year on year growth basis, but the positive, it is a positive trend on a sequential basis. >> every time i talk to you, you have a great problem, you always have cash. now we know you are a conservative company of crash. we talked the other day it might be too high. you didn't buy back a lot of stock. now the stock is at 31. at that time 28/29 level you

come on the show and said that's a good level for us. are we nearing that good level sore it just the last pieces, it's that, you want na cash for mna. >> we like investing in organic growth when we have an uptick. when we can get those returns, when we have excess liquidity, we will consider return to shareholders. we have opted for and prefer our buyback. we never, like i said, we never have been specific about where we get in. obviously, as we start to head down and towards the proximity of value and an intrinsic value, we do it internally, that's when we're at, by the way, we still have $225 million on authorization that's opened. >> if the stock goes to 29, you don't put a flag out that you are buying. it's rick amotte the ceo offed

anet. it is by far best. stay with cramer. >> thank you, jim. coming up, getting hot? train, planes and automobiles, you can find timkins advanced engineering all over the world andion. but is the stock as strong as the steal? cramer speaks to the ceo just ahead. friday on "squawk box," get first word on the nation's employment picture. plus, more than 40 tough. shareholders make it quick, catches up with him in omaha, monday, spend a full 3 hours with the world's greatest investor. warren buffet following the shareholder event. it all starts on friday on "squawk box." 6:00 a.m. eastern on cnbc. lowered costs to savee redd businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years,

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[ music playing ] on a difficult day for the

market, i need you to ask yourself, what happens if the pessimists are actually wrong, we get world wide growth going again? looi like i told you yesterday, despite what you may hear in this media, it is not a pie in the sky forecast. there are real reasons to believe a global turn might actually be let's say the second half of the year, if that's the case, you will actually want to tone something in your portfolio that is cyclical. something like timkin, tkr for you home gamers, they make components of roller bearings. they are the largest manufacturer in the world as far as making alloy steel products. timkin has its fingers in a host of arrow space to industrial equipment, trains, oil and gas. that's important for them. i own stock from a travel trust. we visited the plant outside canton, ohio last october. since then, the stock has rallied to a hefty 30%.

timkin reported april 24th while they beat the streets by a benny, others came in a -- by a penny, odds came in light. beyond the quarter, tow, more importantly, timkin has become a controversial stock because a pair of major holders have proposed the company break itself up by spinning off its steel operations from the business. timkin says the breakup wouldn't make sense at all. partly because it would not be good to have a balance sheet. the shareholder meeting coming up. timken's ceo and president will talk about why this company should be made whole. welcome back, mr. griffin, to "mad money." >> good afternoon, jim, great talk to you. >> i know the numbers weren't exactly what you wanted. the progression you said in the kaumpts call was okay. maybe we saw a month and things have gotten better.

>> i think reenforcing the points you were making, we came into 2013 believing we would have a weakened first quarter. the quarter came out just about the way we expected it to do. we are beginning to see the orders pick up as the quarter end and we went into q2, so we are bullish on the second half of the year. >> which are the orders that are picking up. i saw difficulty in oil and gas. i know aero an auto are getting better for us in this company. >> aero is a good year-to-year or on comp. auto is improving from the heavy steel market. steel distribution came back before the end of the quarter. interestingly, we began to see pick ups in orders from china. which is a nice thing the moves made by the chinese government will support growth in the second half. >> i know you do a lot of business with the joint gloebls of the world. they are fought seeing that much of a pickup if china. some of the companies we've had on this week. eaton, ppg, are saying they r.

why does it seem so uneven or sporadic in china? >> i think what we are seeing on the global basis, the commodity markets, oil and gas or mining are down year on year. the xodity prices are down. the miners are pulling back t. capital goods that serve tell are slow on a global basis. on a regional basis, tow the chinese economy is coming back. we are starting to see orders from the chinese eoms and our customers that produce there. >> now, to switch to this proposition that's coming up, i'm out looking at a cart. admittedly, it was prepared by you, but it doesn't regard the steel companies. its last three years ago timken, 111 part. altra 79. kenemetal 60. ak steel down 56. u.s. steel down 55. allegheny tech could come 27. why is it your company you believe is the target of a breakup analysis for poor returns when your return is, by far the best in the industry. >> well, just to be clear, the

timken company across the company has put a business model in place where we take the knowledge of the company, take it to the market and create unique valk. differentiated value. that has returned top shareholder returns for us. it pumped our profits up to the.that the markets are fought believing those are sustainable and, therefore the multiple is not there and relational is looking solely at the multiple, thinking a breakup will unlock that value. in fact, it's solving the volatility consistently providing the profits at that level that will deal with the undervaluation of the earnings. >> well, let me just play devil's advocate. i assess, these people don't have a dog in the hunt. they're just, good, objective people. they're saying this was a good idea. that they favor this. are they looking at different data from you? do they not understand the steel industry? obviously, i think they're honest brokers. >> well, i think the key

difference, jim, between you and them is you spent 12 hours in our business in our skill business and understand the role of technology in the business. very difficult for a financial investor to understand how we leverage technology and so they're looking at the footballs from the outside trying to analyze it. you looked at it by doing the research on the business and understand fundamentally how we create value. that's the difference of the conclusion that you reach. >> well, i appreciate. that i would tell you, i feel that the companies that are doing worse in your industry when you look at the returns, ak steel, us steel, they tend to be the companies that you would get if you did a split-up where you would jump the company up one place with commodity and think you could actually bring out value somehow by creating that company. >> again, those are companies that focus on manufacturing steel. timken used to be one of those companies. today we focus on what we know. that ec yates top earnings mar

jim, and obviously from a shareholder point of view, top quarter returns to our shareholders. >> you are making money on utilization rates. what would it take to see 75/80. would you have your best year ever even if you didn't get to 100 utilization? >> i think if you look at the first half of 2012, we did see record levels of profitability. we were 75-80% utilization at that point. what it takes is to get through an inventory right sizing that's going on in the mining industry and the oil and gas industry and some of the distributor industries and simply get back to today's level of xi. for example, in the oil and gas industry, drilling is down 15%. our volume in the first quarter was down about 50%. so if ewe get through that inventory adjustment, we'll see much better earnings in the second half and much better utilization in the second half. >> one last question when i hear you are saying about china.

you've got a gigantic china operation. which would they give that to if these geniuses were to separate the company? >> well, the challenge is not what would it affect our china operation, but what would it affect our ability to sell steel in china? for example, we do about 300 million as a company in china. 40 million of that is u.s.-made steel that we export to china because of the relationships we've built over there by having a bearing manufacturing business there. >> right. that business would conceivably go away from the high profile proprietary business. >> that's correct. it would be difficult to level the synergies from a global company if, in fact, with espent the time. >> all we did was talk about how great it is you have those synergies. anyway, jim, i think you tell the truth. i felt that one out there. i appreciate you coming on the show. >> jim, i appreciate the time you have invested to understand timken and your help in

spreading that message. thank you very much. >> appreciate it. thank you very much, sir. >> the reason why we went out there was this was the one steel company that has figured out to make good money in good times and bad times. i can't believe the guy gets picked on. how about the companies that underperform? i would actually go after those. still ahead, you plan, you play, you try to perfect, but can your strategies stand up to cramer's test? call, e-mail or tweet@jimcramer to feind out if your portfolio has what it takes in mi diversified. fá7á#c#,d%et

it is time! it's the lightning round. we say bye-bye buy or sell sell sell. way to sell. then the lightning round is over. are you ready, steve daddy, coming to lightning round. i will start with andrea in north carolina. andrea. >> caller: boo-yah, jim cramer from north carolina the tastiest town in the south. >> i didn't know it was that scrumptious. let's go to work.

>> caller: our ladies investment club is interested in buying chm for growth. >> this has got to be a stock. you got a little more specialty for that group. it doesn't have the yield we like. it does have a great quarter. i am thinking bullishly about housing. buy, buy, buy. let's go to jacob in louisiana. >> caller: i'm calling about martin mid-stream. >> you got horse sense. the stock has been red hot. i think you can go to a 6%-year-old yield. let's go to ed in california, please. ed. >> caller: boo-yah, ed, this is ed in california. >> nice. >> i was foreignt to get in the ip -- work day. i have done my homework. i cannot find more on the stock. what do i do, hold, buy more? >> this is sun of sale force that allows you to be able to save and get smarter. so i'm going to sayhat still a buy, even though the

good folks with paycheckless tell you it is radically over. let's go to jaim jim in montana jim. >> caller: expedia espe, i bought at 63 several weeks ago. >> oh, i think you are fine. that stock got hit, it was okay. buy, buy, buy. i do like priceline, too. i know people think it's too expensive. but these are companies that revolutionalized travel. i like it. let's go to washington and robert. >> caller: jimbo, boo-yah from the nation's capital. my question is about safeway. yesterday, the company named a new ceo and the stock dropped 4% on the news. i started back in february mainly because it had a low peg ratio below 1 and a good yield 3%. and at the time i also noticed it had a high interest. i thought maybe there might be a

potential for a short squeeze. anyway. >> well, we are not going to play short squeezes. that's a sucker's game. we don't know if it will float or make them panic. that was a quarter from hades. i was quite surprised. it was a top 10 performer in the first quarter. i think in the first quarter it was good. i leak kroger more than safeway. croaker is executing. those guys are no. let's go to jeff in california. jeff. >> hey, cramer, jeff in san diego. i'm wondering about tsrx, a farm company locally made here in san diego. i'm wondering if it was a good time to double down. >> i don't know it. i don't know that stock. all right. we will do homework on that stock and come back. remember juvus, the guy with the hospital problems, the hospital soefrl against the superbugs. we will do some more work on your stock. chris in louisiana.

chris. >> caller: boo-yah. this is chris from the big easy. >> my daughter is down there, tell her i said hi. don't call her or tech her. >> caller: anyway, jim, this one has been trading lower sense 159. do you still believe in the gentleman at goldman sax? >> there is still people that want to work at the goldman sachs. i think it is terrific. i do miss the previous cfo whom i think a lot of people counted on. the new guy is just getting started. i think the m afternoon after a business isn't that good. i think you buy it. i think it's troughing. that said, it's often a source of fines for people. buy, buy, buy. goldman goldman sachs. ginny. >> caller: are you the greatest and a shout out to valdana and katy. my stock i love.

i don't know fits good-to-tomi. valdana and katy are people in your room. at the same time, this is a retail stock that could bite us. i use the products. some people say the products are great, we got to buy the stock. i am unsure. i tatter are t.j. x, a local stock that i think represents better value. let's go to pedro in california. pedro. >> hey, jim, thanks for taking my calls. >> steve: my pleasurier. >> caller: my stock is anheuser bush. >> we did a huge analysis, we did the college show at villanova. i said, what goes better with wings and the beer? i said let's do behind king, boston beer, we hated every one of them. we couldn't find a reason to own any of tell. so sell, sell, sell, that, ladies and gentlemen, is the

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is yesterday's rollercoaster ride followed by today's dow dive too much for you? maybe it's too much for your stomach. potential for up and down not so merry go round month of may leaving you queasy? fear not, my friends. tuck yourself in. keep your hands and feet inside at all times. i want to diversify where you call me or tweet me @jimcramer. why don't we start with ruthie in my home state of new jersey. what do you got for me, ruthie? >> caller: thank you, jim, i have johnson & johnson, j & j. i have company esso and pepsi, pep. i have wells fargo, wxt and merck, mrk. my son thinks i should let go of

one of the pharmaceuticals. he said ask jim cramer. >> well, i got to tell you, your son's god horse sense. this is going to be very hard. my travel trust owns both j & j. merck is doing good. we are going to do 18y, meany, miny mo. let's get rid of merck. you need an industrial badly. why not say eaton. they're off 2 points today. put in eaton, have wells fargo, a great bank, johnson & johnson. pepsico boosted a dividend at 7. southern take that out and put in aep. consumer slash drug. eaton and i say, but your son is right. let's go to freddie in new york. freddie. >> caller: hi, jim, a beautiful spring day boo-yah to you.

>> done your way. water up? >> caller: okay. i want to see if i'm diversified enough and in the right sectors. my ownings are offed for, cms energy. >> oh. >> caller: adobe, united health group, uhc and lockheed martin. >> wow that is a good portfolio. that is marilyn from lockheed martin. come on the show. i know you are having a great job. okay, so lougheed martin, the defense company, united health not as good as humana. fofrd, the stocks can go to 15. and i think gm, by the way, can break off. cmf energies is my absolute facilities. adobe is a defense company and automotive company and that, freddie, has got gainf. i like get let's go to john in california, please.

john. >> caller: hey, jim, boo-yah, from the sacramento valley. >> sacramento valley, i parked my car and lived. 10th and p. is it still a nice neighborhood? >> caller: okay. how about cbs, isis pharmaceutical, qualcomm and nike. >> wow, these are some of the more creative portfolios out there. okay, cbs, k-mart, good this morning. nike is breaking out. it has a technology company these days. isis pharmaceutical. we make that a spec. qualcomm disappointing quarter, is it okay. we got a tech, a spec, an industrial, let's call it an apparel company and a drug store campaign and that -- a dug store chain and that is perfect. mad mad is back after the break.

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it's fought about the next quarter, even. it's all about the pipeline, multi-year, what could be in the works? it could be a blockbuster. people decide that merck's had it. merck has 35 drugs in the pipe. many of these can be very added to what is known as the out years. that's why it committed to buying 15 billion of its stocks now, because management knows it has good drugs terrific in the future. so why not buy back 10% of the company now? they also give people a dividend amount, paying them to wait for the phase 2 and phase 3 drugs that will be powering the numbers when so% of the company was bought in on the cheap. but if farm pa stocks -- pharma stacks can live by the pipeline. they can also die by the pipeline. which brings me to aallergen.

i have great hope for their product. the drug is being delayed because results now, we saw they're not up to snuff. the stock fouls 13% off one session. meanwhile, though, this is great news for regenoron. it has the greatest drug for macula degeneration t. woes just vanished this morning. >> it gave them more money to develop its pipe liability assuring you more growth in the future. it doesn't hurt the stock was heavily shorted. it was added to the s&p 500 last night. oops, allergan's pipeline busted that trade. we got tremendous earnings from high profile companies that simply ended up needing nothing. it didn't hit the number, so what, it's got a valid drug to treat alzheimer's. you have the pipeline of pfizer bristol-myers. they committed to bringing up

value anyway possible. their pipeline isn't as important as others. bristol seems to have some sort of a gap. j & j, has a terrific pipeline. listen, the best and the best might be old fashioned glaxo smith-kline. very similar to the situation, which, again, ob i havated the worries -- obviated the worries. how am i so sure the pipeline matters to most of tease stocks? because in the 1980s, merck seemed to be out of gas. it's big heartthrob franchise was losing steam. merck was working on this giant drug that worked quickly t. science of lowering cholesterol was unproven. merck thought it could show over time the value of an anti-cholesterol achlth at the same time, wall street figured the drug could be worth $200 million to merck. it turns out one of the large

contributors in history, but the big move in the stock occurred as we followed the drug through the pipeline, not after it was approved by the fda. as i watched merck double and double again as the clinical trials came through. i made so much money, i renamed my cat merck. it worked happily well for okay a couple years. the amazing thing, pfizer sensing how big it could be bought, bought warner lam bemplt that was an awesome ran company. it had another lowering drug in its pipe. lipitor did $13 billion in sales this last year before going on patent. by the way, if you focus on pfizer's near term earnings like now, you would have been shorting the heck out of the stock. you would have been crushed because pipeline is what matters. and you would have been dead wrong. stay with cramer.

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people felt was negative. we're in europe's hands tomorrow, if not our own. you know what, that doesn't make me feel all that good. i think that's a major reason we had a sell-off. i'm jim cramer, i will see you leaf center, nazem kadri young but he is eager to test tuukka rask. next on cnbc.