r, remember -- true artistry is measured by a passion for bold design and advanced technology at the lexus december to remember sales event, with some of our best offers of the year on our most luxurious models. this is the pursuit of perfection. >> 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. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm trying to save you a little money. my job is not just to entertain you but teach you and educate you about how the business works. call me at 1-800-743-cnbc. blame it on the fugitive. that's what i think is behind a lot of the action in the soggy market. dow dropped 104 points today.

s&p declined .38%. nasdaq up most of the day but slid .14%. yep, blame it on the movies. let me explain. back at my old hedge fund, we had a year, 1993, 20 short years ago, where we just shot the lights out of the market. we were on a major roll. we were up more than twice the s&p. my stock picking, it couldn't have been hotter. everything i touched went higher. it got to the point where i actually believed that if i bought it, it would go up. >> buy, buy, buy. >> it's kind of like how i am with the philadelphia eagles. i wore a signed brent celek jersey the other day, the eagles tight end, and the straw hat to the home game we finally won after a huge streak of losses. i wore the same thing last weekend. i'm convinced it's why they beat the lions in the snow bowl. it's weird if they lose. that's how i was with stocks in 1993.

i even wore a green gap shirt to work every day. i convinced myself that as long as i was wearing the shirt, as we called it, i had the mojo to pick winning stocks. karen cramer was running the trading desk back then and we saw "the fugitive" over the weekend. it was a great american drama. that and "shawshank redemption" are two movies i always stop at when i channel surf. call me obtuse. one day i come in, karen said she couldn't deal with me anymore and the huge bets i was making, larger and larger each day. she said, that's it, we're done, we're up enough for the year, we're finished, it's time to stop this nonsense. i told her the partners would take their money out if we stopped working, we owed them a good day's trading effort every single session. she laughed. i asked her, what are we supposed to do? what do you propose? she said, why don't you go see the "fugitive"?

i said, that's insane, it's the middle of the day. go knock yourself out. i asked her what she was going to do while i watched the "fugitive ". sell everything. sell everything? get out of here and go watch the "fugitive." i said it was irresponsible. just like sam says to dr. richard kimball when he pleads his innocence before jumping into the deep, she said, i don't care. so began a streak where i went to the movies pretty much every day. every day for ages. the "fugitive" first over and over again and then anything i liked. karen would day trade to keep our hand in but keep about 90% of our fund in blissful cash. yep, we had won for the year in 1993, we had won big. at that point we could only lose if we kept playing. so i left the table and went to the movies. you know what, in an up 25 year for the averages like this one, if you're a money manager whose performance is anything near

that, believe me, you're going to go see the modern day equivalent of "the fugitive." "catching fire," "gravity." nelson mandela biopic. these managers are clearly cleaning their desk, and day trading momentum. a couple bucks. the rest sits in repurchase agreements, equivalent of cash. buying twitter, taking in facebook in the morning and let them go at the end of the day. a lot of day trading guys. look, we did the same thing for my charitable trust today, actionalertsplus.com. the trust is up nicely for the year. we decided, what the heck, let's trim winners, sell a couple hundred shares of j&j, procter & gamble. plus, my co-portfolio manager, stephanie link, on "halftime" today, the judge's show. she believes those kinds of soft good stocks won't rally as hard as the industrials and techs when the lock-in period is over. i disagree. i felt more like these were actually what we were doing

while we were just, these were maidens in the volcano. another old cramer company tradition. when things got bad, we toss a couple of shares of procter or j&j into the volcano. sure enough, the gods were clearly at peace and the market rebounded a bit, just as it's supposed to. it's only weird if you lose. these two stocks were down hard today. the real crime, they were up a lot. might as well be talking about pepsico, general mills, or coca cola. these profits can be generously applied against losses. the purists out there, okay, let's parse the day. we had a couple of substantive issues that might explain some of the selling or at least cloak going to the midday movies with some alibis. creep higher, the five-year treasury yield and newfound weakness in europe taking one step forward and another step back. i think, excuse me, the

continual rosy view coming from washington, where the republican leadership is emboldened against the insurgents or told the corporate interests weren't going to contribute to them in 2014 because of the havoc the tea party caused for the economy. maybe that's behind it. i reiterate my view that the tea party isn't done with the disruptions and the president isn't done calling for higher taxes. i've been watching off the front page a couple days, front page of the business section. that's blissful. ♪ hallelujah sure, there's tons of talk about how a deal in washington means the fed won't be that helpful anymore. i think "the fugitive" has more to do with the selloff than potential taper which we may learn about at next week's fed meeting. the last scheduled big, bad event before the end of the year. i'm not denying there will be selling when the fed doesn't buy as many bonds as they're buying now. rates are creeping up already. the gop's newfound first-do-no-harm attitude is more helpful to the bulls than the fed's wavering is to the stock market.

in other words, if they stop the papering, it's pernicious, but if they don't the market will definitely go higher. please, let's not forget "mad money's" recent drill-down of retail is showing the consumer is spending far more than the broader numbers the media talks about would indicate. that's indeed bullish. the tremendous ceo of home depot told us last night, the strong holiday season the company is having. a housing shortage, higher home prices, going to home depot to invest more in your home. these are long term trends. they're not going away but increasing in performance as home prices around the country recover. macy's is saying the same thing. sales in so many parts of the store, perfume, athletic apparel, handbags, warm weather, clothes you need to stay warm. they're all incredibly strong. let's remember this market is willing to withstand a lot of news that would have normally nuked stocks. for example, jp morgan rallied today on negative news about the government's investigation into whether the bank ignored warnings of the madoff fraud. $2 billion. hey, big fine, right? what did the stock do? rallies 27 cents. imagine that happening last year.

bottom line, portfolio managers are locking in their gains. i bet many of them are spending more time on their fantasy football picks than on their stock portfolios. it's like the last lines of the "fugitive," where richard kimball says to sam, i thought you said you didn't care. the portfolio manager's response, i do, just don't tell anyone i locked in the gains and went to the movies. mike, mike, in new york, how are you? >> caller: this is mike from new york. i just want to thank you for what you do for us home gamers. you made a difference in a lot of our lives. >> thank you. >> caller: my question is on the energy sector. me and my home gamers, we have a lot of difficulties because there's so many. i recently purchased novo but got in at a high price in the high 60s. i don't have much of a stock. i have 250 shares. my question with the low dividend and yield, is this a hold broke story, with a downgrade to a hold, do you see

potential for this thing to grow at my level? >> i thought the downgrade was fatuous. there's an upcoming analyst meeting. this is also the largest natural gas field perhaps in the world, off the coast of israel. central europe is no longer dependent on putin. that's worth the price of the stock, itself. buy some. cynthia. >> caller: i want to know about roundys. especially since they suspended their dividend. >> roundys i blew. i recommended it with when they came public. they told a bigger story than they could make. worked its way back. you know what, once burned, well, let's just say i'm twice shy about roundys. if i want to own a supermarket, i'm going to recommend whole foods. what does the "fugitive" have to do with the market?

everything right now. you've got to learn to deal with it. i'll help you. coming up, the right step? netflix, amazon, tesla. they've beaten back the bear case to become some of the market's most successful stocks. cramer thinks one social star may be ready to follow in their footsteps. find out which, next. and later, star of the season? christmas spirit is no stranger to this miracle on 34th street, but does macy's have enough magic to shine brighter than its competitors this quarter? or will the holiday price wars rain on its parade? don't miss cramer's exclusive with the ceo of the world's largest department store. plus, three of a kind? gambling is about more than just a casino. the slots, the computer screen, and now even your social network factor into gaming giant igt's revenue.

will new jersey's newly approved online gambling industry prove lucky for its stock, or should you sit this game out? 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. if every u.s. home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes? 1 million? 2 million?

3 million? the answer is... 3 million homes. by 2030, investments in energy efficiency could help americans save $300 billion each year. take the energy quiz. energy lives here.

i got a confession to make. i want my family to love me the way the market loves twitter. the way it loves tesla, netflix and amazon. it's that kind on unconditional love that means you never have to say you're sorry. it's the sort of love that's sweet and kind, and with you every day. it's a gentle hug, a warm holding of the hands. it doesn't need any reassurance.

it's a love that -- things out of a billy joel song, i'll take you just way you are, don't go changing. i'm jealous of the affection the market shows to stocks like twitter. it's an affection i'll never get. it's so pure. oh, i'm not the only one who's jealous, by the way. the poor guys who compete against tesla, netflix, amazon, twitter, they're jealous as all get out. you could even call it covetous. you often don't hear that word outside of the old testament. the managers that go against these companies, whether in auto business, entertainment, retail, even online, they're not just green with envy, they're riveted with envy. i can't count the number of retail executives who told me how unfair the market's adoration for amazon is. when do they have to make money? the whole retail industry, the amazon drone delivery stunt, yeah, stunt. they always say amazon doesn't play fair. what these execs mean is investors love amazon so much more than they love any other

retail chain that it doesn't even need to show profits. i wonder how much amazon's stocks go down when it starts being bound by earnings instead of dreams per share. then again, a jackson pollack painting is a heck of a lot more than the rembrandt, the old gold standard. how about the auto companies going up against tesla? people at ford worked hard to get the costs down, boosting sales, tesla gets a valuation that's downright outrageous versus the 25,000 cars they made this year. ford sells that many cars in a day. tesla is worth $17 billion and ford is worth only $64 billion. no one seems to like the car catching on fire but i'm sure the execs at the other auto company want to see something than stop the juggernaut that is tesla. the days we go without a new fire, the higher the stock will go. how can a business thrives when it owes as much money as netflix does and at the whim of the entertainment companies and at the mercy of the cable

companies, too? the buyers prefer netflix to tv. members of the younger generation who are drawn to stocks want to put their life savings in the darn thing. they're thinking of "walking dead," if they're coming in late, "boardwalk empire" and "homeland." the companies who make the stuff are beholden to netflix. "orange is the new black," "house of cards." "arrested development." spoiler alert. that's about netflix. they ought to call the company spoiler alert. binge on netflix to catch up. the younger generation likes the ability to watch what their friends are watching, and cool documentaries are available. why should they love the stock? brings me to the ultimate love affair, the one if i just had it at home, i'd probably quit my job. talking about twitter. you hear about how corporations are embracing twitter and love the format. unlike with facebook, they don't even have to pay for the good word of mouth. why is the stock trading at much

more than twice the valuation of facebook on any metric you can imagine? simple. users love twitter. they love it so much, they bought the company. how long will these amorous relations last? i have no idea. the bottom line is those who thought amazon, netflix, tesla, would somehow have jilted customers, slash investors by now, lost fortunes betting against the love. i bet the same thing will happen to those who bet against the crush these buyers are showing for twitter. they love re-tweeting and favoriting over and over and over again. this is just the beginning, people. just the going steady phase. just wait until they get engaged. joshua in florida. joshua? >> caller: hey, jim. big boo-yah from jacksonville university. >> oh, man, jax, what's shaking? >> caller: i just have a question about priceline. >> okay. >> caller: all right. so when i look at pcln, i think that this is an expensive price to pay per share of stock, but i know that it always outperforms.

that's being said, should i stay long with these, or should i start thinking about shorting them? >> shorting priceline? shorting the way that europeans book hotels? shorting the way that south america does -- is doing all their business? sure, priceline with your -- just don't do it. here's you in front of priceline. [ train ] do not think about that. i would buy it, not sell it. it's got the real momentum. on the wrong side of that trade, my friend. john in washington. john in. >> caller: how you doing? boo-yah from the great northwest, jim boy. >> i love that. seattle is going to be in the super bowl. i'll probably you see there. >> caller: i'm a little south of that. i'm down on the gorge. >> where? >> caller: in the gorge -- >> oh, that's so gorgeous there. you're so lucky. has going on? >> caller: right now, we're supposed to get some freezing rain. >> us, too. i hear you. what's going on? >> caller: you guys had a heck of a battle on sunday. it looked dreadful on television.

i'm looking at cliff natural resources. i've owned it for a while. i sold a third of the loss. i'm sitting on the other two thirds. it went up to 28 in early november, or late november, and, of course, gone back down. it dropped a dollar on yesterday's big mess. what's your thoughts on hanging on? >> yeah, you got to hang on. it's really undervalued. frankly, there were some good notes about it today that were a hold. it wasn't a buy. i think it's too low to get rid of. don't forget, there's a lot of tesla selling. don't get dissuaded by that. the stock is worth more than it's selling for. the market is enamored with amazon, netflix, tesla, and now twitter. how long will the relationship last? i don't know. but i do think this is still, well let's just say the carpenters were right. they've only just begun. when we come back, i'll try to make you more money. coming up, star of the season? christmas spirit is no stranger to this miracle on 34th street, but does macy's have enough magic to shine brighter than its competitors this quarter, or

will the holiday price wars rain on its parade? don't miss cramer's exclusive with the ceo, from the world's largest department store.

after a day where stocks got hammered, let me take a minute to remind you this is a moment you should be salivating for lower prices. today we got a pullback in macy's. while the stock is only off a couple bucks from its highs, take advantage of any weakness to do buying in a terrific retail stock. macy's is an incredibly well-managed company under the ceo terry lungren. the company knocked it out of the park when it reported about a month ago, 8 cent earnings beat off a 39 cent basis, stronger than expected revenues and a 3.5% increase in same-store sales. even better, macy's is taking market share left and right. retail is all about execution now and these guy executing like crazy. earlier today, i caught up with terry lungren of macy's. take a look. beautiful store. beautiful quarter, too. a lot of retailers have faltered. macy's reported better than

expected. what's the secret? >> well, we got a great strategy. it's called m.o.m. we've got the best talent, and the most talented team in all of retail. >> better -- don't use the acronym with our viewers. m.o.m. stands for -- >> you know. m.o.m. first "m," is for my macy's. localized products. not just right brands, right inventory, by color, by stores. all the details. o is for omnichannel. we made a better experience for our customers no matter how he and she shops. last, magic training, to be the best they can be. >> the first "m," notion of my macy's. we are in my macy's. i'm in this area. how important is this store in terms of the actual move the needle of the company? >> this is the largest store in the world, so obviously this has an impact. in the case of macy's, we have 800 locations. it's not significant to the total.

bloomingdale's, 59th street, we have 37 bloomingdale's. >> one of the things i hear is highly promotional, highly promotional, highly promotional. you've not used those terms. is it promotional for the other guy or is this a new normal and you adjusted to it ahead of them? >> every year we talk about how promotional this year is versus last year. we are a promotional department store at macy's. we're in control of our promotions. >> okay. what particular items are on sale that draw people in, and what are the items you can't -- you can barely keep on the shelves? >> well, first of all right now, in most parts of the country, it's cold, and that's a really good thing for our business, because we're probably the largest seller of outerwear, cold weather products, women's boots. you go on and on. even in home textiles and comforters and the like.

that's been really high demand. there's a lot of great value there. the things that are selling like crazy are handbags right now, women's shoes, and the beauty categories. anything cosmetics and fragrances. again, we're the largest seller of fragrances in america, fine fragrances. hot, hot in demand products. >> what could that mean for the economy? what you just described are things we could live without. they're selling well. doesn't that say something that the american consumer is now willing to spend on herself? frankly, in categories where it's expensive. >> in many cases, you know, this time of year, customers are coming in to buy gifts for someone else. while they're here, they're often buying for themselves. the beauty category is a very key to that, that whole part of the business. and i think that that's indicative of how the consumer is feeling. they're feeling a little bit better. at least they are for macy's, and bloomingdale's. the customer's doing a little bit better than they were a year ago. >> that matters. that will be one of the big stories i think of this holiday season. the papers don't make it seem

like it's better. >> that's right. >> the consumer spending, it could be gasoline. is it jobs? is it a sense that washington is out of it? what's behind the thing? >> first of all, you point that out, and that consumer definitely in general has not been responsive. you've seen retail performance be very mixed out there. not everybody is winning. i think we are definitely taking share, have been in the last few years, frankly, and i think we should continue to do that. not everybody is winning. we seem to be in both macy's and bloomingdale's. >> you mentioned technology. one thing i think you guys have done, you have spent more, you've done very good analytical work about what discounted brings people in. what does it show? >> first of all, what it shows is that consumers are shopping in a very different way today. >> from previous years? >> oh, yeah, definitely. consumers are using their phone, first, to decide where they're going to shop. they're still coming in. they want to touch the clothes, try on the pant or sit in the chair before they make the purchase, but they may not buy it right then. they may think about it, go

home, do some comparative shopping, then pull the trigger on their laptop or their ipad or tablet device. >> you're not the showroom for amazon. >> no, no. the thing is, what's happening is good for us, with 46% of what we sold at macy's last year was either exclusively sold at macy's or in very limited supply. and since we're the largest seller of all the major brands, they do things for us that are unique to us. only with products only in our stores. >> i want to talk about brands because it's something i keep hearing. this has been a great brand holiday season. in, when you're dealing with the great merchants in drugstores, they're going it tell you, our private level is really taking share. in supermarkets, consumers discovered our private label is every bit as good. when you're dealing with department stores, it's not working. brands are loved. people will pay more for kors even though it's the same kind of materials. why are brands resonating in the department store? >> ralph lauren, calvin klein,

tommy hilfiger, michael kors, kenneth cole. they trust those brands. they know the fit. they know when i buy a size 6, that size 6 fits me. they know when i buy a shoe in a size 8 shoe, it fits me. and so that, they trust these brands. they trust the quality. they know it's going to last. these are the things that make people come back for these important brands and that's why we do so well with them. we also do a very big business with our own private brands as well. >> right. not to slight those. i know. you're talking about some companies we like very much. pvh. we've been liking, of course. you mentioned cold outer wear. that's great for vf. >> we're a big north face retailer here, but overall cold weather business has been very good. >> let's talk about the capital structure. you've had a great run here. 547 million shares in 2007. down to 380 million. is that the way to go? i know you've got a fantastic cfo and you're always trying to figure out where to put that additional dollar. it's not building a lot of

stores. it seems to be returning capital to shareholders. >> well, we talk about this subject all the time with my cfo, myself and our board. and always looking for what's the best way to use our cash? and, you know, giving returns back to shareholders is primary on our agenda. so we're always thinking about new ways. we've got a strong dividend, you know, relationship -- >> that's going to continue. >> that will continue. >> that's one of the reasons we love your stock. >> absolutely. we've got a good buyback program. we're always looking for new ideas of investments and if something strategic happens out there, we'll be definitely looking that direction. >> all right. you now want to go into the regional. i'm trying to click down on the m.o.m. without being too heavy handed about it. are there regions doing better? when you see regions doing better, is it because of the particular region that you've addressed with your apparel? >> you know, i think we've been able to do this very, very well, but there are certain areas have been more responsive and particularly the southern areas have been more responsive. >> why is that? >> because we, frankly, jim, in december, didn't have enough of the warm weather products in florida, in southern california,

in arizona, in las vegas, places like this. so now with my macy's, we're moving deliveries up earlier, and we've got enough stores where we can actually have critical mass for the vendor to cut product just for us early. and that's made a huge difference. so when people are leaving cold new york or leaving cold minneapolis and going to the west coast of florida, if that's where they're located, they're finding products that they're not finding, you know, up north. and so i think that's really made a difference. so that southern tier has really benefited from this program. >> okay. now i just want to get the actual feeling right now for the holiday season. we have the shortened season. some people complained it wasn't enough time. your customer, how are they doing? >> they're doing fine. first of all, there was a big buildup in november, so retailers should have done well in the month of november. that's where you're going to get your head start for the same reason that you've got a compressed calendar in the month of december. so you got to look at the two months together for sure. and, you know, we obviously feel good. >> now, you mentioned the competition, taking share.

we all know, i tend not to want to -- i know you're not saying you're going to bash somebody, but we know the the 110,000 people working at jcpenneys were dealt a bad hand by previous management. do you see that chain coming back? you killed those guys, frankly. took a huge share. killed them in a competitive way. didn't just do anything that was nefarious. can they come back? do you see the customer that you picked up from penney staying with you? >> in our case, we could be with everybody, jim. that's one competitor. there are other competitors that are out there. sears is in as many malls or more than penneys is with us. there's lots of competition on the mall, off the mall. in spite the ups and downs, macy's has been a continuous growing retailer because of our strategy that we've been talking about. >> we had home depot on the show last night, frank blake talking about the importance of housewares. you never gave up on housewares.

>> customers really respond. talk about a holiday, when you put the nutri bullet out there, you know that thing, you can throw rocks in there and it will grind them down. it's unbelievable. throw a whole orange in there. put the peel in there. it doesn't matter. everything zaps it and makes a great protein drink for you. these things, i love the housewares. we never gave up on it. it's a very important business for our company. >> how about for furniture, anything that is an investment into your house? people going there? >> definitely. you know, when the housing market started to improve earlier in the season, we were right along with that trend. people when they buy a new house, they buy new furniture, buy new sheets and towels and all those different things. we benefit from a positive housing market. >> it doesn't seem to me that anything you're telling me is short term. could continue 2014, 2015. don't give up on macy's because of the fed taper. irrelevant. >> i'd like the fed to do all the right things.

i'd like very much for the economy to do well. i just would like us to do better. i think in spite of all of those things, we got the right strategy, the best people in the business and that combination is a winner. >> thank you. terry lungren, chairman, president and ceo of macy's. >> happy holidays, everybody. tomorrow, kick off the trading day with "squawk on the street" live from post 9 at the nyse. >> i have a poster that i bought when i was in college. >> that's nice. >> it all starts at 9:00 a.m. eastern.

it is time. it is time for the lightning round on cramer's "mad money." what is that all about? rapid fire calls. >> buy, buy, buy. >> sell, sell, sell. >> play this sound and the lightning round is over. are you ready, skee-daddy? time for the lightning round. cramer's "mad money." start with darren in washington. >> caller: boo-yah from seattle, washington, home of the 12th man, sir. >> well, i got to tell you, i beat russell wilson last

weekend. what's up? >> caller: hey, listen. had a question. i bought bp three years ago at 50. i was wondering what do you think -- >> i think you buy more. >> buy, buy, buy. >> by the way, i have to tell you something. where is bob dudley? i welcome him on the show tomorrow. bp is a very undervalued company. i want to be a buyer. let's go to dunham in vermont. >> caller: hey, jim, how are you doing? >> pretty good. how about you? >> caller: good. i'm interested in tkr. >> i'm heartsick about tkr. my charitable trust bought it after the myriad interviews we did with the company and then they blew the quarter so badly. i'm ashamed to be affiliated with what happened to tkr. i'm very upset about it. we're down and losing money in the trust. i don't like charity getting hurt by timken. dave in michigan. >> caller: hey, jim, love the show. >> thank you. >> caller: jim. i'm retired. i'm looking at kkr as a dividend

play. >> that's one of our strongest recommendations. the stock has moved up big but i still think -- >> buy, buy, buy. >> i like it. let's go to utah, new york? utah? >> caller: yep. boo-yah, jim. what do you think about commvault? symbol cvlt? >> the stock has taken a real fall. i don't know why. i have to go do work because it's just down too much for me to say oh, it's x, y, z. that's a shocking decline. let me come back. barbara in wisconsin. barbara? >> caller: jim, we love you in wisconsin. >> i don't know whether to play lacey or stark, so i love you guys if one of them i play wins. >> caller: abbott labs, give me your take. >> it's is well run. the guy who runs abbott, i got to tell you, is a genius, and this was just absolutely a tour de force move when they split the company up. i want to own both pieces.

thank you, miles white, for doing so much for shareholders. kevin in pennsylvania? >> caller: i'm teaching myself spanish. boo-yah dita amigo. my stock is apo. >> leon black is a very smart guy. i always bet with leon black. i prefer kkr more and blackstone. you know, good manager. that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade.

what should we do with international game technology? maker of games and gaming equipment for casinos with a juicy online game. on the one hand, when igt last reported a little more than a month ago, company posted an earnings miss and the stock got put through the meat grinder. on the other hand, igt has a darn compelling long-term story and the stock has been punished for the earnings miss. selling for 12.2 times earnings. remember, igt has some exciting web initiatives including doubledown, a social gaming play they bought last year that offers real online gambling in

the state of new jersey. we will hear more about that because that's where our show is. the only state where online gambling is legal at the moment. perhaps they'll expand to others as states could raise revenues, change their laws. igt also has a casino-style game on facebook. they're very popular even though no actual gambling is involved. of course, they make the machines for real world casinos. they just had an annual investor day today. why don't we check in with patti hart, ceo of international game technology, to hear more about her company and its prospects, and by the way, she was on remote last time. this time she's in the studio in new jersey, where the online gambling capital of the world may be. welcome back to "mad money." you must be thrilled to be in a state that is forward enough to think about raising revenues by using igt. >> we actually have an enormous appreciation for the boldness of the state here in new jersey, for their real willingness to go first, because it takes courage, as we all know, to go first in these kinds of markets. and it's been about a month now.

i would say we're very happy with the early things that we're learning. the market's telling us there's great demand for online gaming, that it is an infrastructure play. >> right. >> right. you have to get payments processed and what have you. but, i mean, you know, you can -- our numbers are anywhere between 30,000 and 70,000 new online players, which you may look at and say, hmm, it should be more than that, but if you put 50,000 new people in atlantic city next week, people would be really happy. >> that's a good way to look at it. how about we look it from the handle, the size of money involved. >> people are saying the market is between 200 billion and 300 billion. who knows. i think these markets are all so new. one of the things we found, as we think about this business in europe, because we've been very active in the real money wagering business online in europe and mobile and in the desktop, is that the cannibalization myth is actually not true, it doesn't really cannibalize the bricks business, and customers like choice.

i think new jersey, different than nevada, has really taken a big, bold step and gone outside of just poker and added bingo and slots and the content i think people love and consume. >> as someone who lives in new jersey and works here, i have not felt like there's big visibility to the initiative. >> i think, you know, for us, the visibility is very different because we actually have our content in everybody's platform. >> right. >> we have a lot of horses in the race, which is exactly -- >> a huge number. >> huge number. >> yeah, huge number in the race. i think it's not up to you do to that. i was just surprised that the state isn't more vocal about its own -- >> yeah, well, you know, i think that you have to, you know, maybe you and i aren't the target market. >> true. >> actually, i mean, i think that's really a possibility. i think you have to really market and make the awareness, build the awareness where these people are, which is in the online space. >> the casinos, themselves, are not -- shouldn't be opposed to it, judging what you said about europe. >> the casinos, actually, we've

been delighted with the energy that the casinos put behind us. it's a new way for them to reach a new demographic, a player, which is very important to our industry. they've been, i think, very successful. the early returns would say the casino operators have done a pretty good job here. >> patti, i think the company is in transition. a bunch of analysts are quite negative. they think it's a gambling play, the brick and mortar casino is not growing like they used to. there are others who realize this could be an online gaming play. the ones who realize it could be an online gaming play are rabidly excited about it, and the ones who think it's brick and mortar aren't. which will be the real driver of earnings, not just the picture of the company? >> i would say earnings for the foreseeable future will be primarily driven by the core business.

we're the market leader when you know enjoy 45% of the market is in transition. it's not just the company's in transition, right? the company is in transition with an industry that's in transition. but having said that, you know, i think that the real -- sometimes the thing that people miss about our business is that our business is a huge cash generating business. >> that's why the accelerated buyback, the dividend. >> right. >> to me, these are cushions. you take a shot -- this isn't zynga. it's a social gaming play with a cash cow. am i looking at it wrong? >> i actually think you're looking at it exactly right. i think, you know, when you look at our conversion to cash, we convert about 26% of our revenue to cash. we've been very responsible in returning that cash to shareholders. i think $1 billion in the last 4 years we've returned to shareholders. we've taken shares outstanding down to 15%. >> i've seen the numbers. it's a very big chunk taken out of the market.

>> it's a big chunk taken out of the market. again, well above the s&p 500, which added shares on average. it is a cash play, but i think it is this bet in online gaming, in social gaming, that people are still a bit mystified by. it's very different metrics, different leading indicators, different lagging indicators. like we, as a company in our industry, are having to reinvent, our analysts are going to have to reinvent themselves, too. >> i think that has to happen and the stock makes a big move. that's patti hart, ceo of international game technology. new jersey. pioneer. i don't see why any other state wouldn't want to follow. who doesn't want the revenue? stay with cramer. [ male announcer ] here's a question for you:

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we're just two weeks away from christmas. hopefully you crossed a few things off your list. wait, before you buy any more stocking stuffers, there's one priority that needs to move to the top of your holiday to-dos, and that is to diversity ♪ hallelujah ♪ the holidays can be expensive. make sure your portfolio is in tiptop shape. let's go to am i diversified. let's start with a tweet from @grandpabruin. what does he like? he likes facebook, seagate, priceline, amazon and google.

amidiversified madtweets? and also -- [ buzzer ] -- because this one is not. i don't know where to begin. seagate is a hard drive company. facebook is a tech company. amazon is a tech company. google is a tech company. this is a retailer. we'll do that. seagate is a hardware company. priceline, we'll say, is a travel company. i'm not trying to make excuses, but i can't own all these. google is cheaper than facebook. we'll get rid of facebook, we'll add the requisite bristol-myers. we'll get rid of seagate and put in tomorrow united technology will probably be down. pick up some of that, because that way you have a diversified portfolio. you were way overweighted. let's go to gloria in new york. g-l-o-r-i-a. gloria? >> caller: hi, jim. i watch your show every night. you're dynamite. >> tnt. yeah. thank you. thank you. >> caller: anyhow, i have -- am i diversified? i have hershey, jp morgan, coca cola, verizon and kimco.

>> let me go to work. thank you for the fine comments. i like being dynamite. okay. yeah. wages are inferior -- okay. hershey's is food. going to get right to it. coca cola is food and drink. can't have that. keep hershey's. it's a faster grower. get rid of coca cola. i don't like diet soda, regular soda and some water. verizon. jp morgan bank. kimco. a nice yield brewing here. yes, we'll do it again. pick up more yields. we'll take out of that and we will, indeed, go to my friend, bristol-myers. bristol-myers is a rubric for a clorox, colgate, that kind of thing. peter in massachusetts. peter? >> caller: hi, jim, peter from fall river, massachusetts. my five stocks are dorm, dunkin' brands, dnkn. amazon.com.

johnson & johnson, j&j. and home depot, hd. >> wow. wow. okay. okay. okay. all right. dorman is similar to home depot. we can't have that. johnson & johnson is a drug. amazon is online retail. dunkin' is terrific. great stock. we take dorman and out, put in, again, revert to united technologies. why am i focusing on that? they preannounced a number tonight that is not that bad. stock's going down. that is where opportunity beckons. >> buy, buy, buy. >> stay with cramer. mad about "mad money"? immerse yourself in cramer's world while you watch the show with zeebox. on your phone, tablet or on the web, get sneak peeks, go behind the scenes, and join the conversation.

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buying bonds for now, going to cut back, then the market will get hit. i'm not trying to minimize that. i'm saying that when that happens we want to be ready with the stocks we talk about that we like. because that's going to be the last buying opportunity of the year. i believe. i like to say there's always a bull market somewhere. i promise to try to find it just for you on "mad money." i'm jim cramer and i'll see you tomorrow. "american greed"... >> that's right. we're breaking the [bleep] law. >> narrator: scott rothstein, always the life of the party, a guy who wants the world to love him. >> we're lawyers. if we're not gonna break the law, who is? >> he was a larger-than-life type of person, very charismatic. >> narrator: he is raking in hundreds of millions of dollars. >> you saw scott, you're thinking money. >> narrator: and he spends it like it will never run out. >> he amassed over 200 watches, a hundred suits, 9 or 10 cars at any one point in time, a number of homes. >> narrator: but the money does run out, and scott rothstein is