saw that tweet this morning at 4:30 on the day where the dow gained 30 points and nasdaq advanced .15%. and it's always been like this. and the tweeter came back, so investing in stocks is betting on the fed? is that why small investors always get in at the top? in other words, this guy just doesn't think the move is right. i think that the word "right" has to be the most expensive word in the english language. this is not an ethics class, people. it's not an exercise in some bizarre form of justice. it's not right or wrong! what seems obvious to me appears incomprehensible to others. i sound like someone who wants to get away with something, while those who think it's not right somehow represent the true path of reason. how the heck did this happen? how could so many people feel

like @paulkingsley, who penned the tweet? i think it's central to finding out the next leg of this market. it holds the key if stocks can rally higher from these elevated levels. and i know they're elevated. so, first of all, there is no smell test. when you invest in stocks, you're trying to divine the direction the market will take. that requires lots of history, lots of pattern recognition and lots of homework. some people like technicians often think that pattern recognition is all that matters. others believe the whole exercise is wrong and they view stocks entirely as one asset class that's done well over time, so you need some exposure to it. but still others, myself included, like the pattern recognition and the quality of the asset class and believe if you find out the best of breed stocks and invest in them, then the class can be discovered and exploited for profit. notice, nowhere within the trio of reasons to own stocks is a smell test. when you're betting on what you're betting on here, what

you're betting on is when you invest during these bad news is good news moments, is the history leading up to when the economy flips into high gear and good news becomes actual good news. every time we've ever been in this situation before, it's been an explosive time for the market, and you had to invest during the bad news is good news phase in order to reap the biggest gains. in other words, you have to be early and you have to anticipate. if you wait for the market to smell good, as the tweeter i mentioned once, then you'll likely miss a great deal of the move. hey, that's how retail comes out. too late. now here's where a lot of judgment gets clouded. there are plenty of people who believe that the federal reserve is life support for the stock market, and when you take away that life support, what happens? the market dies. these people simply do not know the history of the market as encompassed by my constant admonitions by don't fight the

fed, don't fight the tape. they're blinded by politics, thanks to the polarizing world, now affects even the process of trying to make money in stocks. i think it's a totally false linkage. those who avoided this rally because they believe that it is somehow politically incorrect, as the tweeter alluded to, missed out on making tons of money. i also think they don't care, though. that's because these people are not really investors. they're politicians and polemicists masquerading as investors. their views have to be avoided at all costs because they have nothing to do with the actual process of trying to make money. they act like this tweeter did, as if they're protecting the small investor from people like me, and otherwise if they're not careful and i keep doing what i'm doing, the investor will come in ultimately at the top. i say tons of small investors watch this show every day, and they've been reaping some terrific gains. lay off them. i read their tweets @jimcramer. you can, you'll see. stop bad mouthing people trying

to make money, because many of them are succeeding. they are laughing all the way to the bank. second, those who think the stock market can never transition to an earnings derived advance don't understand the idea of sector rotation. when they say this market, they're simply being brainwashed by trading the futures of the market, like that risk on, risk off stuff i was able to kill. yeah. that is not investing. that risk on, risk off asset classes. that's not investing. that's rolling them. we don't roll them! asset class choosing, it's been dead wrong. the dominant asset class success story of my lifetime has been in the fixed income world, not stocks, the 30-year treasury offering by far the best risk/reward over the course of my career. that's right. 30-year treasury has been fabulous. you know the most enjoyable, predictable element of the market comes when the earnings aren't manufactured by cost cuts, but are generated by higher sales overlaid on an organization with big shares taken out by stock buybacks.

that's where we are now. we're getting many signs that the international companies based in the country are now experiencing the transition from earnings oriented investing, something bountiful, to sales oriented investing. when that occurs, the market can really gallop. there are plenty of people betting the fed will hold off on tapering. those are what i call the clorox investors, still attracted to slight growth with some yield. there are so many hedge funds betting against the securities like clorox that there's this bizarre funnel effect of shorts covering, longs unwilling to sell because of gains and a nice dividend and outright share buybacks. there were 153 million shares of clorox a little more than five years ago. now there are only about 132 million. that missing 21 million shares explains much of the move. much more than people realize. makes for hard short selling and easy owning. now, it is true that we could lose clorox in the transition to higher earnings. anyone who knows the history knows we should now be shifting to the banks, the bank, the

financial part of the market is the largest, and the banks make up the large part of the financials. the money should come out of the nonbank financials as well as when the rest of the market flow into the banks. the government keeps them from doing so, but it could happen soon. these investors might be drawn to technology, especially now that the personal computer class of tech seems to have bottomed. at least we can see that from microsoft, western digital, seagate, hewlett-packard and intel. and they might be interested in retail, recognizing things can get better than they are right now if the economy improves. only because of the possibility of more jobs, therefore more disposable income, and sales numbers out there than the ones we get to see because they're with the big boxes typically and not the omni channels. the political types are citing the new health care regime as a reason to sell stocks. that might prove to be wrong. the large companies are precisely the ones that can navigate these new waters. their smaller capitalization and smaller company rivals will fall by the wayside under this new health care system.

that will soon be logical to everyone. and it's seeing if the people in the white house had some business savvy, they, too, would've seen this coming. they didn't see it any more than they saw the website issues. so to sum up, the smell test does get vindicated backhandedly by a transition that historically occurred in the cycle. the investing that has come before this moment is from people who recognize that bad news has historically led to good news and they've been driven by individual stock performance as well as pattern recognition. the asset class hunters and corporate buybacks have been convenient props to the whole process, which is why this move's so explosive. the rally that shouldn't be happening is, indeed, prevailing. i feel badly for people who want to wait for the smell to improve. they might be confused by politics in the media, politically driven need to have a balanced debate between bulls and bears. wow, the bulls and the bears are going at it again. but in the end, these are people who convince themselves they were right, and doing so, they were perfectly willing to forego the incredible gains to date.

and i think they'll most likely forego the next set of gains too. they've been brainwashed into thinking it's all phony. here's the bottom line, though. a combination of blindness instilled by the inability to believe that stocks can really rally under president obama, coupled with an underestimation of the federal reserve's will, historical buyers who are not now going to turn sellers because they know the history and fear of stock shortage among seasoned equities, could end propelling us to the next level. believe me, to these purists, the next move, it'll stink to high heaven too. can i go to gerard in south carolina? gerard? come on, this is the real usc. >> caller: hi, jim. >> how are you, gerard? >> caller: i'm well, thank you, sir. about a month ago, a caller asked about noodles, you had recommended to hold it. i have a fairly large position. i am down about 11%. friday when the market was up,

the stock tumbled 6%. my question to you is this, jim. they are coming out with a new offering at a cost of $39.50. now, my cost basis is higher than that, and i was wondering going forward, generally speaking, when you see this happening within a stock that you own at the repurchase -- new offering price will be less than what your cost basis is, is that a sign to sell? >> i didn't think they should have done that deal. the stock had been down because of the big colorado flood. 39.50, you know, to me come you come underneath that now, you get a better basis. stock goes back to 41, sell a little, but you have to buy some here. you cannot sell it here, gerard, and they shouldn't have done that secondary. i wish they had not done that, but they did it. and it was negative for shareholders. bill in missouri, bill? bill?

>> caller: yeah. hi, jim, how are you doing? >> real good, bill, how about you? >> caller: i'm doing great. okay. my question for you is i noticed recently that autozone had been downgraded, and i own quite a few shares of o'reilly automotive. i'm wondering if i should be concerned about it. do you think that'll affect -- >> no, i like o'reilly more. but remember, autozone reports tomorrow, and the pattern has been autozone gets completely hit right after they report and then you have to -- >> buy, buy, buy -- >> so don't worry about o'reilly's really good. the roses, they -- you can stop and smell them. if you wait until the market smells right, though, you might miss the big move. and that's just one of the truths of investing. but we'll get through it together. stay with cramer. coming up -- fashionable financials? tommy hilfiger, calvin klein,

izod, van heusen and speedo, the bevy of brands from pvh given an unprecedented look at the consumer. the earnings are out and cramer's got first crack to hear what these numbers may mean for the holiday season ahead. and later, neighborhood watch? housing is back. and that's meant boom times for many of the brands you find around your home. but does the rebound in real estate make these household names a buy, or has the comeback opened another door to invest? plus -- instant gratification? do you swipe for points, money or miles? millions of consumers use reward programs when they fill up, fly or grab the latest fashion. and alliance data is behind the transaction. can the stock still provide a bonus after its rally this year? find out in cramer's exclusive. 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. every day we're working to be an even better company - and to keep our commitments. and we've made a big commitment to america. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger.

we've been in a really choppy moment for retail, especially apparel. so how is pv, company you know as calvin klein, tommy hilfiger, izod and arrow, holding up in this environment? king of the dress shirts in department stores all over north america. back in february, pvh bought warnaco, bringing calvin klein jeans and underwear back under the same umbrella as the rest of the brand. pvh just reported at the close. and while the revenues came in a bit light, they delivered a 5-cent earnings beat. management maintained guidance rather that raising it. maybe they're trying to be conservative. let's take a closer look, hear more about the quarter and where the company's headed. manny, welcome back to "mad money."

>> nice to see you again, jim. >> are these the calvin klein jeans we're worried about? >> yeah. >> are these the ones we want to see because you are abject in the conference call -- in the statement that you're unhappy with calvin klein jeans in the sales. >> yeah, that business has been under pressure from before we acquired the company. we've been pretty consistent. we talked about the second half of 2014 where we really think we'll start to see the turnaround associated with the cleanup of sales distribution and also really focusing on new product. >> you use these -- do you use the two terms i'm getting used to and don't want to be. very competitive and highly promotional. that to me says, i understand why the stock's trading down in after hours. manny is saying, manny who is so confident is saying, look, this is not that kind of holiday season. >> well, look, it's -- we've gotten off to a reasonably good start in november, but the environment is very promotional right now. that's what we're seeing pretty consistently at the mall level, department stores, also in our own retail stores.

so we're taking right now a cautious look as we look into the fourth quarter. we'll watch the next three or four weeks, and i think we're in as good a position as anyone to outperform. but right now, we're being cautious. >> well, i feel like i've got to divide between a business that's really on fire, which is tommy hilfiger, and a business that i think you still sound unhappy with, which is this acquisition. if i look at tommy hilfiger and look at legacy, you have to be thrilled it's hanging in there so well. >> well, i think so. based on the performance we had year-to-date, we've had a terrific year. and the big outperformance of the third quarter was the calvin klein business. we have a problem in jeans. >> right. >> jeans is a big business, but the calvin klein brand is an $8 billion business, jeans is about, you know, 15% of that. clearly the other 85% is putting up big increases across the board. >> this surprised me. you talk about having -- you're not happy with the quality and

the design of the jeans. can't you just get new people? you often -- you also say you're trying to fill a significant number of open positions. what's happening? >> well, look, when we acquired the business, we talked about it, the need to invest in the business, both from a product point of view, design point of view, a sourcing point of view. we thought the business was not run appropriately, particularly at the jeans level for calvin klein. we're making those -- we've made those changes. everybody would like it to happen overnight, but i think you understand, you've been in the business -- lead times in this business are eight to nine months out. so we think we'll have an impact on spring '14. but we really think the big impact will be for fall '14. plus, presentation at retail. we really need to make those investments, and that's what we're in the process of doing. >> well, help us through the idea that something's promotional. well, why can't macy's be

promoting your stuff and that comes right to your bottom line. why is promotion necessarily bad for the guy who is being promoted? >> well, i think a promotion overall is the question of the average unit retail out the door. what we're talking about is the goods are moving, we can't have any kind of inventory problem. we've had a strong third quarter, what we're talking about is how promotional is the holiday season going to be? how much support do we have to give to our retail partners? what kind of markdown rates will we have in our own stores? the initial indications with this tighter holiday season, less calendar days, it just feels like it's going to be coming later and later at this point. >> how about this november jc penney number up 10%? jc penney, previous guys became real good partners with you. they're using legacy. that's been good, right? >> very strong for us. the izod business continues to be very strong. and what we really saw is -- i think i've been on there a couple of times. i've been critical about the lack of classification inventory product like dress shirts and basic sportswear.

what jc penney is known for. those inventories really got back in line in the third quarter. and you started to see that sell through improve in october, dramatically improve in november. and i believe those trends have continued as we're going into december. >> calvin klein europe jeans. how much the design and the quality, how much the fact that southern rim still not really turning for you, but northern pretty good. >> yeah, i guess different from the tommy business where we're 75% in northern central europe. the calvin business is really very much 75% to 80% southern european business. spain and italy continue to be challenged markets. and as we've talked about, our european business overall in calvin klein is about a $500 billion business, and we're breaking even in that business. our tommy business, which is three times that size, earns close to 15%. just to give you a sense of what we think the opportunity is for the brand and how we're going.

it's the investments that need to be made now in order to get that business right. but in saying all that, we still beat the quarter by 5 cents a share. >> i know, stock's down and i'm going to tell people, look, if it's a 2014 story, and over and over again you say it's a 2014 story, i'm not going to say it's a 2013 story. because that means i'm not listening to you. i'm not even including what could go on in asia, which is downplayed because you're so forthright about what's not working and you're not that -- and you're totally humble about what is working. asia seems to have worked. >> yeah, particularly calvin klein, very strong jeans, underwear business and our sportswear businesses throughout asia. china in particular, and in southeast asia. those are real growth areas for us as we go forward. >> well, that's what i want to focus on. give us more bright spots. i think the stock is going to come down. >> another big bright spot for calvin klein continues to be latin america. and then anything in north

america, with the exception of jeans. our calvin business overall is up about 8%. that's with our jeans business down double digits. just to put that in perspective, our other businesses are women's businesses, sportswear businesses are up double digits. that trend continues, the business is coming together, the investments we're making. people, product, we really think looking out second half of '14, '15, we really think they pay big dividends going forward. this is a story about taking a big acquisition, right sizing it, fixing it -- >> no regrets. >> no regrets at all. >> and it could be more in the same name plate. there is still some more calvin klein out there. >> absolutely. double-digit growth in this calvin klein business going forward. >> well, i'm a believer. made me a believer before, i'm a believer now. you'll see the stock come off because it didn't do xyz. think about next year. think about it as you would any company that is in -- that is saying, look, next year's going

to be better, that has made you money year after year after year. and that's why you shouldn't be selling pvh, you should be buying. stay with cramer. coming up -- cramer's got another read on retail ahead of the holiday season. whether you're buying pumps or pumping gas, more consumers are hooked on rewards programs than ever. find out if these benefits could provide you a bonus. and just ahead -- the rebound in housing has caused a rally in everything, including the kitchen sink. is that where you should be looking next?

all coming up on "mad money." who should you trust? one of the toughest things about the market is for any given stock, you can typically find very smart people on both sides. you have brilliant bulls, hyper intelligent bears, all saying contradictory things about the same exact company. take today, just this morning, goldman sachs came out with a sprawling report on the building products plays. totally high-quality research where among other things they initiated coverage on masco, maker of paints, plumbing products, cabinets, installation. and two minutes later, credit suisse comes out with a little

note reiterating the buy, buy, buy on the same stock. it's like chinatown. sister, mother, sister -- who's right? the bears at goldman, smart. the bulls at credit suisse, all right, little spoiler alert here, everybody. my charitable trust owns masco, so guess what conclusion i'm going to reach. but, anyway, because you're always going to have to sort through conflicting opinions to decide whether or not to buy a stock, i want to go through the negative research by goldman sachs. it was very high quality, shows you why i think the bulls are right, i hope. first, though, a little background on this company called masco. one of the leading players in home building products with some iconic brands including delta faucets, craft made cabinets, bear paint, among many others. masco is mostly a domestic player, 70% of the sales come from the united states, most of the remaining comes from europe. small but not insignificant 4%

yield and up 29% year-to-date, and that's not too shabby. if you think housing will stay strong, something that's totally believable after those terrific october new home sales numbers we got last week, then masco is an excellent way to play it. if toll says good things tomorrow, masco going higher. why does goldman sachs say it's a sell then? first of all, the goldman piece is not just about masco. it's a pastiche about the industry, about the whole building products cohort. and their main thrust is that nonresidential construction is really starting to heat up. you want to swap out of the residentially focused plays like masco and swap into names with a lot of nonresidential exposure like armstrong world, the flooring and ceiling play and mohawk industries, the flooring play, both of which spiked nicely today off this report. i think goldman makes a really compelling case for nonresidential construction. i agree with that. that doesn't necessarily mean you should sell things that are housing related. i think they're wrong about

that. they're wrong about masco. meanwhile, the credit suisse note was to tell people they like masco. but the firm's last report from the end of october made a bullish case for the stock. while the masco bears at goldman believe that housing will keep accelerating next year, they think it might not pick up until spring. that's a gap. more important, they think masco's installation business, where they sell insulation, gutters, fireplaces, garage doors, roofing, they think that could be damaged because of the slowdown in housing over the summer, as there tends to be a one to two-quarter lag between when new homes are sold and when things like masco's insulation get installed. i totally get where goldman's coming from here. the fact is, this part of masco's business accounts for 16%, 1-6, of masco sales. the company actually gets 73% of its sales from the repair/remodelling market, which

should stay strong for a long time to come. remember, the rise in home values means that people are much more likely to renovate. homeowners who aren't under water in their mortgages spend three times as much money on their houses as those who are under water. thank you home depot for giving me that statistic. they do try to throw some cold water on it, saying the repair/remodel activity is close to the historical average as a percentage of gross domestic product. i think that's the wrong way to look at it, mr. goldman and mr. sachs. as the job situation in this country gets better, so will the home improvement market. home improvement spending is still 14% off the 2007 peak. next up, goldman doesn't like how masco gets 40% of its sales from home depot and lowe's. they think this concentration limits the company's margin expansion. those are powerful vendors. especially with the increasing consolidation in the space. you know what, i think that's slightly misguided. masco has exclusive agreements

with both companies, home depot and lowe's, representing huge sales platforms. they're as crucial to driving revenue growth. that's right. and might not be as limiting for the company's margins as goldman thinks. i like home depot and lowe's said they're seeing a pick-up in kitchen and bath. they've indicated consumers are willing to pay up for better brands and higher quality products, which is also good news for masco. the bears at goldman think we could be disappointed by the margins of masco's cabinet business. they check these boxes off, and 30% of the sales and a lot of the growth come from the lower margin direct to builder market which is so nonlucrative, the competitor fortune brands, another stock we like, has gotten out of that distribution channel entirely in certain regions. i think it's worth mentioning that masco's management has taken out $600 million in costs since 2006. the latter of which they've restructured pretty dramatically. the company's margins are now on the rebound although there's room for improvement.

masco is guiding for 30% of incremental margins. but it's been conservative since the housing bubble burst. i wouldn't be surprised if masco saw incremental margins in excess of 40%. with more on the way in 2014, on top of that credit suisse thinks they can boost margins by raising prices. and i've got to agree, i think they've got pricing power even as goldman thinks it doesn't. goldman says masco won't be able to return capital aggressively to shareholders because they're still cleaning up the balance sheet. on the other hand, masco does have $1.2 billion in cash right now, and they should generate $1.5 billion in free cash flow from 2013 to 2014. no, i don't expect massive buybacks any time soon, but i wouldn't be surprised to see masco returning loads of cash to shareholders. got to buy now for then. during the last housing upcycle, they were shareholder friendly, bought back 43% of the float. enough about masco the company, how about the stock?

goldman gives it a $20.50 price target, $1 below where the stock is now. ouch. they get there by assigning the company an enterprise multiple, the enterprise value, the market cap plus the debt, minus the cash, divided by the earnings before interest, taxes, depreciation, amortization of 9.8. credit suisse gives it a $25 price target. the stock still has plenty of room to run, if that's how you want to value it. meanwhile, it's trading at 19 times next year's earnings, which is well below the five and ten-year averages and not too pricey considering it should be able to grow earnings at a 40% clip next year. the bears at goldman think it's time to sell masco and swap into some nonresidential construction plays as that space starts to turn. i think they're wrong. i think they're wrong to write

off masco and i agree with the bulls at credit suisse, believing this stock could have more room to run. i say stick with masco and stick with cramer. lou in oregon, lou? >> caller: boo-yah, skedaddy. >> i'm not booing, i'm louing. >> caller: hey, about six months ago, you recommended and i bought two stocks, american realty capital properties and also health care reit. i'm wondering, should i by more? >> i would. look, these are all about -- this group has been killed because of rates going higher. and when we get the ten-year at 3%, which i think it's going to, that's when i want you to buy. not until then. these stocks are under huge pressure because of the backup in treasury rates. i understand that's what it is. it's not because of the fundamentals, they're good. 7% yield is always good to get. two companies with competing -- when you have a stock with two views on it, okay, you've got to figure out which the one is the best.

i know goldman doesn't like masco. credit suisse likes masco. i think the bears are wrong. tomorrow, kick off the trading day with "squawk on the street" live from post nine at the nyse. not a lot of things, land mines. >> it all starts at 9:00 a.m. eastern. [ male announcer ] here's a question for you: where does the united states get most of its energy? is it africa? the middle east? canada? or the u.s.? the answer is... the u.s. ♪ most of america's energy comes from right here at home.

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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. are you ready, skedaddy? it's time for the "lightning round" on cramer's "mad money." david in california. david? >> caller: hey, jim, how you doing? >> real good. how about you? >> i work for a company called wso, i wanted to know what the long-term would be. >> oh, man, i love wadsco. this is like the quintessential american stock right now that is

going to work -- and you also -- well, it's the yield is not so great, not so much, but hvac, hvac is one of the strongest currents right now in the action. all right, let's go to lois in florida. lois? >> caller: merry christmas, jim, to you and all my fellow cramericans. >> thank you. >> caller: i bought in at 77 on biomarin when it was supposed to go up. of course it hasn't. >> i remain a buy of biomarin as i do celgene, gilead, regeneron, steve? >> caller: boo-yah. my stock is fedex, fdx, what do you think about it? >> i prefer u.p.s. to fedex. but fedex is real good. tom in connecticut, tom? >> caller: insurance international group holdings, eigi. >> do not know it.

do not know endurance. do not know it. let's go to john in new jersey, john? >> caller: mr. jim cramer. >> what's happening? hit me. >> caller: dgo -- >> no, no, no, no -- >> sell, sell, sell -- >> you want a gold stock, you've got to go to rand gold. i prefer the gld, understand that gold is not going up right now, but we can stay long it as a hedge. it's a currency. jay in new york, jay? >> caller: manhattan boo-yah. >> nice. brooklyn boo-yah back at you. what's up? >> caller: guidance. i need some guidance on a stock you seem to like, sirius xm satellite. >> analysts were lukewarm on that last quarter. it wasn't that big a miss. i think you should buy it. i like sirius. and i particularly like -- i like that guys running that company. i think they're very good. you want to be long sirius satellite. and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is

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pretty much everywhere you shop these days, they ask you if you want to join the loyalty program.

these things have become crucial in modern retail. giving retailers a new way to connect with customers. how can you play this loyalty card explosion? how about with alliance data systems, ads, the company behind a host of customer loyalty programs as well as data-driven marketing services and private label retail credit card programs like you'll find in a lot of mall-based retailers. ann taylor and victoria's secret, among others. this stock has been on a tremendous run. it's up 70% for 2013. up 254% over the last three years, talk about a stealth bull market. company's latest quarter was terrific. and even up here, still only trades 24 times next year's earnings. let's check in with ed heffernan, learn more about his company and its prospects. welcome to "mad money." >> thank you. >> have a seat. okay. i know two companies located in plano, and one is big and failing or at least looks failing, which is jc penney, and then there's another one, it's yours and i was embarrassed to know -- i'll admit, how little i really knew about how all of us

have touched your company in one way or another without knowing. >> right. we're pretty much behind the scenes. we put our clients first, and then we're all the stuff making the watch work. >> explain to me how you could have 100 million customers as varied as merck, ford, fedex, dell, procter, jp morgan. are there commonalities of all of those that you do? >> sure. and this is one of the big macro trends that are going on, is that more and more companies out there are looking to learn about their own customers, and in order to do so, one of the best tools out there is to put together a loyalty program. by having a loyalty program, i'm able to then understand what you're buying, when you're buying, how you're buying, what motivates you to buy, and our job is to then figure out what can excite you to come back one extra time this quarter, two extra times this year.

and if i do my job right, the roi on those types of investments are huge. >> whose ideas -- are you implementing or are you also coaching these clients? >> it's a combination of both. so you're talking about these massive, massive programs, everything from the city bank thank you network, hilton honors rewards, to a number of private label programs like victoria's secret and ann taylor like you mentioned. it's a combination of us providing a platform and also providing the ability to extract that deep sku transactional information that's so important. >> because of your panoply of retail and because you say in your most recent conference call that you are very optimistic of things, but you're doing twice as well as a lot of your competitors. where do you feel right now about the holiday season? >> actually, what we saw in the holiday season goes against a little bit of what you're seeing out there in the marketplace, what you're hearing about. what we actually saw for our

clients was a pretty strong -- >> okay. >> -- five-day period. and, you know, which would suggest to me that this is going to be a pretty decent holiday season. >> could that be because you also say you have omni channel, a relationship with paypal. you have a lot of the channels that are not talked about in the media. >> right. and our clients, you're not talking about these huge big box retailers. you're talking about retailers such as pottery barn, crate and barrel, ann taylor, victoria's secret, names like that did quite well. whether it's bricks, whether it's online, whether it's through catalog. the multi-channel approach actually looked quite strong over the holiday. >> i think you have a better handle on it than the media does. when i go online to check, what do you think they say? they say why doesn't he split the stock? well, it's a great question, and i guess it's a little one of my pet peeves. we started, we went public in

'01 at $12, and it's been a pretty nice run up to $250 or so. but from my perspective, splitting the stock doesn't add incremental value. it's just basic old school and that's the way i am. >> but what does add incremental value is the slingshot. strong growth in business combined with share count takedown. >> right. yeah. we're looking at our model is such that if you look at where the dollars are going in this industry of big data, digital marketing, all that stuff out there, we're comfortable saying that we can grow organically our top line at approximately 3x gdp, and that combined with the fact that our share count is shrinking 10% going into next year, you're going to see an acceleration in eps. >> when i looked up epsilon, that seemed like the forerunner to facebook started by a bunch of kids at harvard business

school trying to keep track of everything. is that how it started? >> well, it goes back a long, long time. it's not one of these things that popped out. but it's now grown into a very, very large successful digital agency platform, loyalty platform, and most of the large loyalty programs are run by epsilon. >> you get fees from that and you have some credit. for your credit card, you have that great mix of fees and finance charges. >> right. our view is we have a number of platforms that appeal to different verticals. so specialty retail, jewelry, home furnishings would be more likely to have a private label card because of the liquidity factor, whereas a lot of the other verticals, like financial services and pharma and places like that would prefer big loyalty program from epsilon. at the end of the day, i don't care. >> right. >> and our goal is to extract the type of information that those clients need. so to your point earlier, we have information on roughly 230 million people, and we have a beautiful view into their

behavior, which helps our clients immensely. >> well, and i want to thank you. i wish i knew more about your company beforehand. you have a great business. >> this is great. >> thank you very much. the president and ceo of alliance data systems. a.d.s. look at this company, the website has everything, watch the videos too, you'll understand it. stay with cramer. where is flo? anybody know where flo is? are you flo? yes. is this the thing you gave my husband? well, yeah, yes. the "name your price" tool. you tell us the price you want to pay, and we give you a range of options to choose from.

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at the top of the show, i told you why stocks are going up. today represents a textbook case of why so many go higher. it seems one off and you see the full mosaic and it becomes thematic. these two companies are emblematic of a huge undercurrent at the moment. buying competitors to raise margins and gaing market share. white wave bought earthbound farm and the acquisition is immediately accretive. this line extension from whitewave, makes it much more valuable to shareholders. positions them to become more like hain celestial and it reminds us how companies build up heft in their industries have more bargaining power with suppliers and vendors. no wonder it rallied 5% today at an all-time high. sysco shows us the power of deals to move the needle in a spectacular fashion. this stock's been stuck in the low 30s for ages. suddenly it burst out by buying

closely held competitor u.s. foods, including stock, it's offering stock. nearly 10% gain at one point today, a 30% gain at least in the early morning hours when the news broke. that's remarkable. at another time, i would fear antitrust regulation, but not with this antitrust department, the one that blessed the american airlines deal. it was a deal that started trading today and i think after some initial disposal of stock by debt holders and workers who don't know what to do with their stock winnings other than sell them, american will soar higher, too. mergers are behind the strength of micron, gaining another 3.5% today in part because it bought a failing japanese conglomerate which competed with them in the d-ram market. that's allowed the company's d-ram business to maintain price, a lack of capacity for the second line of business, flash has kept pricing strong for that commodity, too. it has as both personal computers and cell phone sales have gotten a tad stronger here. an acquisition is behind the recent out-performance of linn

energy, otherwise down market for oil and gas producers, linn is buying barry petroleum. and that deal will soon close allowing analysts to raise the numbers. and then there's celgene, revealing positive data on the blockbuster drug for multiple myeloma, that brings it still closer to being the first line treatment around the world. that puts the possibility of $17 of earnings power on the table as soon as perhaps 2015 which makes it an incredibly cheap stock even after the 2% run today. finally there's the refiners, a group that's been down and out not that long ago as the price of u.s. oil has come up so much that the refiners weren't able to arbitrage the difference between cheap west texas crude and expensive brent. refiners were able to buy crude, here or over there, refine it and sell the gasoline at the global price which is priced off of brent, the higher one. the u.s. glut has brought down domestic oil prices, that's good for the refiners, they can coin

money, the brent prices sell much higher and sell it at the gas station for the same price. you don't know the difference. the price they're buying that crude is much lower. emblematic of a discerning market. oil stocks are headed down even as the refiners are headed higher. that's just how it should be. rational reasons for stock rallies. just what's supposed to happen as we get the transition from a fed-assisted stock market to one based on earnings. stay with cramer. ♪

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cisco. tomorrow starts here. i like to say there's always a bull market somewhere, and i promise to try to find it just for you right here on "mad money." i'm jim cramer and i'll see you tomorrow. >> narrator: in this episode of "american greed," fen-phen, the miracle weight-loss drug of the '90s, turns out to have a serious side effect. >> for some of these patients, this was very scary. this was a death sentence for some of them. >> narrator: when the story breaks, ambulance-chasing lawyers rush in, exploit tragedy, and pilfer their clients' money. >> these lawyers were already going to legally be paid fees in the amount of $60 million, but that wasn't enough. so they took $126 million out of a $200 million settlement. >> they wanted their rollses. they wanted their planes. they wanth