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hey, i'm cramer. welcome to mad money. i'm just trying to save you a little money. my job is so educate you and teach you. so call me. your biggest enemy in this market is an unseen enemy. your greatest foe here is not europe, it's not china. it's your fellow shareholders who were breaking ranks with you and that's why the dow sank 140 points today. s&p tumbled 1.12%. nasdaq gave up 1.09%. so tonight in homage to the downturn, let's talk about the departure of your fellow shareholders and what it means for you and your portfolio. let's talk about the weak hands. the worrywarts. and the people who are bolting, who together have made owning stocks -- >> the house of pain. >> which of your brother and sister stockholders should you be afraid of?

first, there are the stock owners who never wanted to be stockholders. thought they could hide names like clorox and kellogg. what they have is cash. enough to grow their businesses with line extensions while paying shareholders bountiful dividends and buying back a ton of stock. that's part of the compact when you own these companies. problem is these stocks were yielding 4% not that long ago and because of buying from income seeking investors, the group rallied so hard their yields dropped to around 3%. the level where these stocks are no longer competitive with bonds when you calculate risk. so this has become a major issue because these stocks are now going down a heck of a lot in principle. the share price and their bigger yields protect. you buy one of these, you're buying a stock that can have 10%

decline. that's not enough. it's a total mismatch. it's kind of like insuring a million dollar house, okay, that's a million dollar stock, for $30,000. hence why the people who bought these stocks for little less than a year are panicking. these are unseen sellers and they can really hurt you because they never really knew about what they owned in the first place. they were with the wallenda and they thought it was like you know, ten feet wide. the earnings, well, let's just say it doesn't matter. second group of sellers are the sell what you can, not what you have to mob. these are fund managers that were reaching for yield, this time overseas, emerging and thin markets, now, they're getting hit by a strong dollar. the yield doesn't make up for the principal risk of the thai

currency or the filipino currency. the problem here is if these people don't think they can sell them to quickly, they need to raise cash and meet redemptions for the shareholder and sell the most liquid market, which raises money and keeps them in the game. they are meeting the redemptions and they are crushing you with their flailing. there are other big names, that makes sense. that's all over the place. you see these play out every day. stocks like adt, proctor and gamble. they moved enormously, but are short on yield. you give it back. i regard these sellers as rational. next set of sellers, those who bought american companies, china, more on these later. all the china trade plays. the makers of mine equipment, the rails who carry coal like norfolk southern, i don't see any way they can turn them because they have a double whammy of no demand from china and none in the united states either. brick by brick, this group's being undone for the first time

since they coined the acronym, bric, and that is just annihilating people. then there are the people who are selling anything linked to home building. i got to go get one before it's too late. the problem today may not be focused on rates. rates have risen so fast that too many people feel like, i got to pass. missed my chance. that's why the housing complex is so cheap, but it doesn't matter. these are sellers who think the cycle is done, and the stocks are all tremendous shorts. all of them. another set of sellers, because of cuts they see coming. they believe that numbers are going to be affected by this turmoil. first, the price of aluminum had already collapsed.

many said it couldn't go possibly lower. then it does. you have to beat these people to the selling punch and that's what's happening with those names, so sellers who suddenly don't feel so rich, they worry their house is going under value and they don't want to put any more money in it. that's caused a buyers strike in anything appliance, paint or real estate. then there are the sellers who fear the fed pop-ups. the fed won't let up and think the rate should go up now, something that would be totally devastating. the etf buyers who are purchasing bond funds are without a doubt a panic beyond

belief group because they thought they were safe. they don't want to buy anything now. they want to go home. where is home? >> the house of pain. >> how about cash? well, go into cash. that's just another enemy. the hedge funds were betting that the worst was over. they looked at the world a week ago and got long to say how bad can it be. they were early in my part of the world, early is plain wrong. those who figured the market's cheap versus historical standards and is therefore worth a shot. and compared with bond yields, it's the ladder that's come into play. so, these people are being blown out left to right.

particularly if they bought using margin or etfs, it would allow them to capitalize on sue per bullishness. those who are using the and i quote, i can't get back in with any end quote strategy, they're your only friends. your pals. these people have patience and they have time, however, they're not going to commit new capital until they kno this quarter closed in terms of earnings. that doesn't make them your enemy unless you're playing with borrowed money, and if that's the case, the cavalry will not get here in time to save you. get off margin.

here's the bottom line. as long as the unseen enemy of higher interest rates rages, unseen that is by except those who watch that tnx that i told you follow, you're not going to be able to fathom when we will get the all clear sign. most likely when we are most oversold. 3%. that's phenomenal move, really. 2.6% right now. it can be very lucrative just a few weeks from now. bonds calm down and companies talk sense to sellers on the cusp of being your enemy. bob in georgia. bob. >> my question is with the home depot supply having an ipo this

week, that's a spin off, is this a good time to go after an ipo with the housing and construction industry so vacillating? >> this is one where they're going to have to, you know, i know, i don't want to punt on this. if this is priced correctly, it will be great. if they understand the chaos out there, it will be great. if they try to make too much money from the sellers, it will bomb. we have to get closer to that before we make a judgment. we don't know what the price is going to be. investing with the enemy, let's make it really clear. your foe is the higher interest rates and everyone who's worried about them who owns your stock. they are not to be trusted. "mad money" will be right back. >> coming up, invest in america. all this week, cramer's looking at what is driving our nation forward. tonight, our oil and gas revolution has been fueling economic growth and moving us towards energy independence. but which of the stocks that could still power your portfolio higher.

and later, ink fading? the stock of this printing play was all but scrapped at the market moved to new technology. cramer's finding out if it could be about to print you profits. all coming up on mad money. ♪

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looking at the across the board red on the ticker today, the weakness in china and europe and brazil, it hit me. you may not believe it, but the united states of america just might be the strongest economy in the world right now. that may sound like faint praise, but it's still true. while the rest of the globe struggles, our country's

experiencing an industrial renaissance. that's why this is invest in america week here on "mad money." we're going to be focusing on high quality american companies and their stocks that should rocket. make no mistake, our economy is improving. this is the thing. it has everyone worried. it's what's causing the stock markets around the world to get hit. the better things get in this country, the more likely it is that ben bernanke will stop his bond buying support that's been keeping interest rates low across the board. frankly maybe thinks are so good that interest rates are going up, but maybe everyone's panicking. we're the best ship in the ocean. we could potentially go off life support before year end because of this. now, i think it's shortsighted that people are upset about ben bernanke. the only reason bernanke would

take us off life support is if we simply don't need it anymore. if this happens, the companies that do better when the economy improves are going to soar and to get to that moment requires swimming a channel that's like today. so tonight, i want to start talking about america's industrial renaissance and to do that, we need to begin at the beginning. it's begun with energy, finding more energy than we knew. one of the things that's making our country increasingly attractive to do business is that we have discovered so much new oil and gas in north america. that prices on this continent are much lower than in the rest of the world and this makes up for the fact that we tend to have much higher labor costs and tougher environmental regulations that don't allow businesses to simply pollute as much they want to versus mexico, versus china, versus southeast asia. okay. we're constantly talking about the huge oil and gas discoveries that are and will be game

changers for our economy for many years to come. i just want to look at the oil side of the equation of u.s. energy information. we're going to get to the other side. u.s. emergency information says we have 40 years worth of drilling in our major oil basins with greater visibility than at any other time in the last four decades, so who's going to make out in this portion? who benefits directly? first of all, if you've got 40 years worth of drilling, that's real good news for a driller, for an oil service operator like halliburton. it's integral to the drilling process. tremendous amount of domestic onshore exposure. coming in at 56% of the company's revenues. the u.s. onshore market bottomed out the fourth quarter of last year. halliburton expects another 80

or so oil rigs to be added by the end of the year. it's starting to come up again. plus the whole domestic oil boom is about using new technologies. halliburton is integral to fracking and they should have terrific pricing power in this business in 2014. on top of that, the company's been aggressively buying back shares to the point where they could acquire 5% by the end of the year. it's a really good sign, because hal hasn't been repurchasing that much stock over the past four or five years. i regard this as a very positive tell. remember, we met a terrific halliburton executive in the bakken, and he was talking about how fabulous that was for hal, but prices peaked and we got hit. houses are coming back now. now, once you get the oil out of the ground, you need a pipe. got to take it to the refiners and that's where kinder morgan energy partners is.

this company is a long time cramer favorite. the largest pipeline player in the united states with businesses operated like a gigantic toll road and a fabulous management team created by rich kinder. lately, kinder morgan has gotten slammed. fell from 92 to 77 at one point today. part of the selloff of master limited partnerships that have fallen from grace. at this point, i think k and p has done enough that it's safe for you to start a position. stock yields 6.45% at these levels. the latest quarter was excellent. they said they were going to have to raise the distribution. i think you want to use this weakness as buying opportunity. the chart said it could go as low as 76. i think kinder morgan, purely a buying opportunity. it's given a 153% return since i

started recommending it near the last peak, in april 2007 and i don't want it will start letting us down anytime soon. you bought some at 90, buy some at 80. some stocks do last and are for the future. next, you want an oil field technology play. core labs. i started recommending this stock in february of 120. i bet the stock still has plenty of room to run. core is all about using technology to help oil and gas companies figure out where to drill and how the squeeze the most oil out of existing reservoirs. company has built out a nice u.s. business that represents 30% of all u.s. sales. all these shale plays, they wouldn't be worth drilling if we didn't have the science to make them economical. core labs is the scientist of the oil and gas business. there could be two other big shales in our country. how about a straight up oil producer, eog resources, one of the largest and best in the country.

even more important, eagle ford shale in texas. the two biggest discoveries more than a generation ago. it was fantastic. highest drilling rate of return in the company's history and a 33% increase in oil production. now, the ceo is talking about what could be the next big oil find, the delaware basin in west texas. also in a bit of new mexico. i think this could be huge for them. finally, it's worth mentioning we're producing so much new oil that our existing pipeline infrastructure can't handle it, so companies are finding all sorts of ways to transport the stuff by barge, truck and rail. i like the rails, in large part because they are a slap happy oligopoly with only four major players and in particular, i like union pacific because the company has gotten aggressive about shipping oil. last quarter, union pacific's oil buying rose 11%, doubled year over year, that's incredible, people.

shipping oil from the bakken down to the refineries, the gulf coast and up to california. you get the oil to the gulf into california, it can be sold at higher international prices versus the lower intermediate prices. plus, union pacific is a western based railroad, less vulnerable to coal. the long-term prospects are looking brighter by the day which is why i like halliburton for oil service, kinder morgan energy partners, core labs for oil so you can find out where that oil is, eog resources, the lowest finding costs and union pacific for shipping it to places where the pipelines either don't go or don't have enough capacity. stafford in oregon. >> how are you doing today? >> good. how are you? >> i'm hanging in there.

oasis oil. i bought it at 28. now, it's 38 and change. i was wondering if i should buy more, sell or hold. >> i don't want you to buy. no. i mean, honestly, i think that you've got a really good gain there. it's up 20% for the year. i would probably sell a quarter of my position. i still think oil's too high versus the rest of the commodity, so why don't you make that move. frances in illinois. >> boo-yah, jim. my husband just loves your show. >> tell him thank you. my question is with the energy revolution taking place in north america, what do you think about amlc? >> okay, this is -- i don't know. it's an etf. i think it's good. i've not done enough work on it. i believe that owning individual mlps is a better do though. that's why we spend so much time

identifying the better mlps like kinder morgan. why do i want to own an etf that has good and bad when i can select the best, which is kmp? oil. ain't that america? you bet it is. we're investing in america this week. you will not believe the guests we have and right now, the sub text is the domestic energy renaissance and what it's meant for manufacturing. after the break, i'll try to make more money.

the china trade. it feels over. it feels done for. >> boo. >> could be just history. i don't know. big problem. china trade has been an inspiration for years and years, and now that it's unwinding, it's crushing the stocks. dozens of companies. any company that made inroads into china made a terrific story, given its supercharged rate and any company that sold commodities was in amazing shape. there was no end, growing and growing, the great migration

west, east, 400 million people. but now they are no longer growing at that pace. i don't know if they're growing much at all. 6%. i know. relative. that's not what it counts. and i think it's time to examine the fall out. they may still be growing 6-7. first, we had the machinery trade. with endless orders, china was an annuity stream for cat. not anymore. caterpillar stock is now cheap. got to be a huge share in china. let's call it a tail wind to a head wind.

secondly, coal. we always figure if our country were to start burning less coal, then our coal companies would be bailed out by the chinese and their voracious demand for energy. the president, epa, and environmental groups are gunning for coal. swamping by utilities and natural gas by environmentalists to stop new coal exports made it so there's no place to put our coal resources. meantime, coal to china, i don't know if it's going to happen. that means the coal group has become a pinata for all. peabody's been crushed and i'm tired about their debt position. i don't trust coal. a lot of people choose to ignore the coal trade. inventories have gotten lower,

the rails, can take coal to ports where it can be shipped overseas. these companies do not have enough business although i do love union pacific. then there's the apparel business. part of the business that i'm worried about could be china. coach can make up for what i bet will be a slowdown in china. we know yum brands, a health issue there, but worrisome given how much they love kfc. question is, will starbucks see the same thing? last time, chinese business was incredibly strong. it was blowing. now, we'll need to wait to see

if that's the case. there are many reasons why, china does produce more than it needs. it hasn't shut down and turned out coal to import. i think you'll see that weakness where the concern is copper. it's a fiasco. don't know where to put the copper either. china is the reason freeport mcmoran can't compete. sell, sell, sell. that's what offsetting weakness, but in a true chinese clause, what we should expect, buyers. general motors has moved so

aggressively that the company might call itself general tso. the people's republic is now a fulcrum market for gm. that's now all in jeopardy. you can't have the autos just rely on latin america, united states and europe. if you're gm, you simply won't make enough money. china is that crucial to them. but china's not good. when chinese make too much, they flood the world. that's the way the chinese play. that is their way. nobody stands up to them. so every steal company gets hammered. same with iron players. cliffs natural resources is the one i'm most worried about, clf. that's a nasty chart. what about tech in china? well, for apple. the key to the massive deployment of smart phones is china. but they've rubbed china the wrong way, so apple's chinese sales are simply unimpressive.

you can't have that happen. numbers keep coming down. the consumer packaged goods, numbers are are always trying to crack into china, which of course this week had done their best to play up their chinese exposure. right now, china's not doing it for them. china picks up, yes, china doesn't, no. how about the casinos? oh, my, the casinos. macao sands, i'm sorry, las vegas sands. lvs. wynn clobbered mercilessly. hearing about a potential slowdown in china, how about imax? they're putting up movie houses, that growth slows too in this scenario.

plenty of conglomerates rely on china to boost their earnings, including technologies in boeing as owners have been terrific. they need those orders, which is long-term to stay real. but they, that won't happen at this pace. general electric and travel trust owns it. big builder of travel plants. no more plants equals a potential falloff in orders. same with emerson electric. i'm even worried about chart industries, which plays a terrific play. remember the natural gas, does have a huge business in china. that's what made him shoot the lights out the last quarter and i'm going to be sensitive to the slowdown. you want some real irony? the best performing new tech stock is google. riddle me this. what does google have that the other companies don't? zero china. that's right. political concerns kept in the people's republic, so we don't have to hear about chinese weakness when it comes to google. china's growth matters tremendously. it's the pervasive issue. riddled with american stocks like a chip that's gone haywire.

my list does explain a lot about how difficult it is for so many parts of this market to expand if china goes off the grid. in many ways, american manufacturing might need this critical outlet to make its numbers. china's hurting the u.s. and if they don't get their act together, i suspect that we'll see another decline when all these companies report and tell us just how lost china is. lost as surely as general stillwell and the state department did indeed lose it in the late 1940s. joan in pennsylvania. >> so happy you took my call. so delighted to hear from you. i was with baidu. after this morning's news, i don't know whether to keep it or not. what do you think? >> no. i want you to sell it. simple as that. i don't want any chinese stocks. i think that country's in a multiyear bear market and we are not through the worst of it. i know that sounds unbelievable. i just don't trust the chinese

stock market as an enterprise, as a value, as a business. that bull has left the china shop and that matters to some american companies and the weakness in china is taking a toll. let's just hope it goes back to being fine china some day. don't move. lightning round is next. i want to make things more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better.

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it's time. it's time for the lightning round. fred in new york. fred. >> i want to give you a special brooklyn boo-yah and a shoutout from the greatest place in new york, brooklyn, new york. i want to talk about my stock. world wrestling entertainment. >> it's had a decent run this year, but i don't see a lot of growth. i say ka-ching. austin in new jersey.

>> wants to know if it's a good long-term investment. >> i like the airline business. i think it's good. oil coming back down. robert in new york. >> hey, jim. this is robert from brooklyn, new york. >> another brooklynite. i'm not crazy about that one. the liquid crystal displays, not so good. go with the sporting good quarter. gary in texas. >> boo-yah from the lone star state, jim. >> great that you called. how can i help, chief? >> rdsv. >> i like royal dutch. it's the cheapest of the majors. let's go with wally in colorado. >> hey, boo-yah, jim. listen, i've got to tell you, i followed your advice.

i am enjoying a very, very fine retirement. it's been a lot of time with my 4-year-old granddaughter. my question is what do you think of prospect capital corporation? >> it's got that really high yield which means a red flag and a lot of the higher yielders have been trimming that thing, and i'm going to bless it. i've known them for years and i'm going to bless it. gray in california. gray? >> i call you jim cramer and i think you are awesome. >> fabulous. thank you. >> and a big boo-yah! >> boo-yah back at you. >> and california, chevron. >> chevron. holy cow. great major oil companies in the world. go to jim in massachusetts. jim. >> yeah, hi, jim. boo-yah to you. >> right back. >> we all love you and your show.

>> thank you. >> and i thank you for taking my question. >> thank you, jim. listen, soft bank is buying sprint, you predicted that some company might, and the shareholders can sell their shares in one of two ways. either to accept cash or to receive shares in the new sprint company and i'm a shareholder and i was wondering what i should do. >> get some cash, get a stub. i want to own. the new split. i think it's going to be terrific and so i want you to own that stub. i think it will be fantastic. marilyn in florida. >> hi, jim. boo-yah. i'd like to know if i should hold or sell. >> ring the register. both guys want to do something, but both involve loading the company up with debt. i need to speak to ken in california. >> boo-yah, jim. >> boo-yah.

>> thank you for what you do. i've got two quick questions. what do you think of suntrust bank, and the second question, what happened to the investors that ever sold aig? is their stock 42-43? no. they did a reverse split, so fraction that. government took over almost the entire company. sun trust is a terrific buy. you can get it at 29. i would pull the trigger. that's the conclusion of the lightning round. [ ghosts moaning ] surprise -- your car needs a new transmission. [ coyote howls ] how about no more surprises? now you can get all the online trading tools you need

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day, take a look. i'm talking about rrd for you home gamers, a company that i have gotten a ton of calls about. rr donnelly is an industry most people forgot about. company's a commercial printer. who reads stuff that's printed on paper anymore? didn't e-mail and the ipod destroy this? this industry frankly should be done for, but it's not. in fact, commercial printing is still a $110 million business here in the u.s. that's a lot of money. why the heck has rr donnelly the largest commercial printer in america rallied 45% year to date? how's it have a bountiful 8% yield? can that be trusted given the industry's decline? books, directories, forms and labels all which lead to weak prices. the bears see the company's

underfunded pension liability and they work. so, how has this stock managed so hard to work in 2013? the clients haven't been as bad as 2012. it's a change. plus, donnelly has a logistics business and international printing that are holding up better and the company has become a trusted indicator. in fact, if you want to know what's behind the return from the dead, let's start with the fact that company's metrics looked like they started improving across the board, plus, the company has landed some major deals. here's the deal. sure, commercial printing in general may be decline, but this is a huge and fragmented industry and donnelly is the largest player in the group. might have another 1.7 billion in pension liability and the web may have made the business obsolete. none of that seems to be stopping rrd's stock from rallying higher though. but you know what? while rr donnelly's never going

to be a turbocharged growth stock, company seems to be just fine. we're looking at a business that can generate 1 to 3% organic growth, but acquisitions could add another percentage point or two. it's now a company that's growing very rapidly. how come rr donnelly is not in decline? well, they are the largest with 60,000 commercial customers. can you believe that? while commercial printing might be on a major down trend in general, this is a hugely fragmented business where the top 400 players control 35% of the market. for example, rr donnelly's the printer that serves 100% of the fortune 100. the sweet spot in the industry is serving mid to large size corporations. while the web is making printing less necessary, the truth is big companies still generate packaging, pamphlets and labels. it's not like these guys are blind to where the industry is headed. they know digital is the future. that's why the company has an

ebook business and then distribute those ebooks. plus right now, rr donnelly is aggressively trying to grow the number of products it sells from 6 to 10 per client. so the company's squeezing more business out of existing customers. think about that. when a business sets up shop with call centers in asia, that requires more coordination. you need to communicate with people a half a world away and you're constantly shipping things from the home office to the outsourcer and vice versa. that's part of the business. meanwhile, the companies get aggressive about taking out capacity and cutting costs. they suspended the 401(k) matched employees. it's good as a shareholder. other post retirement benefit plans have cut back. they've also been moving operations overseas, where it is indeed cheaper to do business and yes, you get it. china. in short, the reason rr donnelly

stock has risen from the grave is that in 2013, the company's been doing a lot better than anybody imagined. the most recent report was terrific. people were stunned. stock rallied 15% of the news. yes, i'm calling it safe, 8% yield. a buck 60 per share, plus the company's throwing off cash, specifically between 500 million. $3 of cash flow per share. again, that's almost double. here's the bottom line. sure, the commercial printing business is long-term decline. absolutely, but this industry is so large and fragmented that a high quality operator like rr donnelly can thrive and keep

paying to its shareholders. the stock has rallied and never should have been down so much in the first place and believe it or not, i still think it's a buy if you're looking for a slow and steady business with a slow and steady huge yield. "mad money" is back after the break.

there was no right time for the fed to do what it did.

that's why people shorted stocks, why we rallied each time that the bond buying program to keep rates low wasn't ending until now. as usual, people were shorting the wrong markets. i think our stock market's not good. i see only a handful of groups that can withstand this onslaught for now, but it's the foreign markets that are really hurting here and we can't insulate ourselves from them. we can't insulate ourselves because there were so many knuckleheads reaching for yield. that we have to endure the whole painful unwinding from all over the globe because of these morons who reach for yield. does anyone really think that brazil isn't falling apart, especially with the world's richest man and some sort of unraveling that seems to impact every portion of the brazilian stock market? the mexican market, it's breathtaking. an amazing fall from grace and of course, there's china. did ben bernanke see the pmi falling when he planned his exit?

so we had been crushed from the outside as well as within. i was struck by the fact that except for a scattering of insurers, a handful of regional banks and hmos, every one of these stocks is broken. that group is so bad, i have to believe that some of them are going to go bankrupt. that's a recipe for a wipeout. so it plays out dutch boy even. fingers in the dike. have you heard a peep out of the philippines yet? indonesia? thailand? all those could be a source of amazing financial stress when we wake up tomorrow morning. communist, fascist, will companies will nationalized? i don't know. will the olympics be canceled? heck. that would be something. all these questions should be on your agenda right now. when the yield goes to 3%, then

there will be no reason to reach for yield outside the bond market and everyone but the people who just rode those prices down will be flocking here taking advantage of the higher rates and the stronger dollar. so even when the rates settle into so much higher level, the turmoil goes on until people realize the stocks in our country represent great value and should no longer be sold. in the meantime, brace yourself for a wild ride.

patience is a virtue. i'm jim cramer, see you tomorrow. >> what do we with them now? >> god help you, girl. you don't have the good sense god gave a goose. >> this debt has just got us by the throat. >> i just -- i don't want to lose everything. [ sniffles ] >> ♪ money, money, money, money, money, money, money ♪ ♪ money, money, money, money, money, money, money ♪ ♪ money, money, money, money, money, money, money ♪ >> i'm a fashion designer. i design a line of handbags. >> i work for a big-box store, and i earn about $40,000 a year. >> i don't really know how much