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tv   Worldwide Exchange  CNBC  January 4, 2014 4:00am-5:01am EST

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my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always some somewhere. and i'm going help you find it. "mad money" starts now. >> welcome to "mad money". other people want to make friends. i'm just trying to make you money. as the first day goes, the second day doesn't. the dow average is better than
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yesterday when the alleged has happened in ages. s&p dipped. there's this whole idea of any session meaning one thing. wall street gibberish. days alone do not set press dents. however, i'm a big believer in the idea that a year matters. stop sweating the one day program. you still have an average gain of 11%. that's not too shabby. still, i respect this is clearly a what have you done for me market. we'll find out what the market is going to do next week when we get the first earnings reports
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of next week and the first payroll report next friday. these are things that move the stocks. they are the fund mentals of why the stocks go up or down. we must never minimize them. the edge i bring to you.
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my edge, the edge i bring to you, the edge i spend a whole chapter explaining in my new book, how to read and dissect a conference call. how to get down to it. what you need to listen to, the metrics, the key pieces of information, the parts of the call that really matter. most people think the headlines tell all. that's lazy thinking, people. the headlines generally tell you nothing. without the real context that comes from the conference call, you're almost always going to get it wrong. that's why i don't like to talk to ceos without hearing the conference call first. where i haven't had a chance to listen to the call yet. so what exactly am i looking for? what am i listening for? what's in there? what are the nuggets? in every single call i wait and wait again for that one brief moment that -- that bit of info that comes between the long-winded statement at the beginning and the actual q & a, that's where if guidance comes in. and as i stress over and over again in get rich carefully for a stock to go higher, you have to hear about better than expected sales and earnings, better than the analyst who has the highest estimates on the street. then you need to hear an outlook. it's an outlook that must be better than people are anticipating. you get better earnings, that's good.
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stock probably won't go down. but if you get better than expected earnings, sales and outlook, then you have a trifecta that will almost always produce higher prices. because analysts, all analysts including the high demand will have to raise numbers and many will be forced to upgrade. that, my friends is the holy grail of investing around earnings. let's take a look at next week's game plan. we have a key number we're going to get monday morning, we're going to see it when we walk in. it's the hsbc china services pmi. a reading that better show some acceleration soon or we're going to have to deal with another round of who lost china. now, you know i'm u.s. centric, but other than yesterday, the industrials have been the leaders in this market. and these stocks rely on stronger economic numbers, not just from the united states, but also from europe, which is stronger and china. lately, i've liked the european numbers very much. but china's gone tepid again. if we get a strong pmi, then monday's going to be a terrific day for the industrials. they are going to rip. if not, they probably tread water until we see some earnings. tuesday, we hear from two companies with very different key metrics that need to be followed closely. we have the first report from the newly minted container store, a place that my executive producer never stops telling me is so fabulous. had to throw that in. anyway, we're going to be looking at same-store sales. given how expensive the stock
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is, we need to see mid single digit same store sales growth, management intends to accelerate the new store sales growth in 2014, that sends the container store higher! then there's micron, mu, which is all about what you don't hear from management. for this semiconductor company, we need to hear the questions about new capacity coming aligned. all you've got to do is look at the price of dram and flash memory chips. new semiconductor foundries being built will tip the scales of supply and demand making supply softer. i believe if analysts repeatedly ask if there's more capacity coming on somewhere around the globe, it won't matter what micron reports. stock will go lower. wednesday, we hear from two stocks that often react violently to earnings, often violently wrong!
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bed, bath & beyond, best buy, and monsanto, anyway, the latter's numbers on the surface are often not what you want to hear. and the stock got clocked only for it to go much higher a few weeks later. that's the nature of monsanto, a biotech in agricultural clothing. this time, the conference call could get more poignant. why? because general mills announced today that it's stopping the use of genetically modified organisms. yes, that's what gmo stands for, in cheerios. is this a beginning of a trend that could hurt monsanto? don't they make all those great seeds? i mean, bad seeds? i want to hear what they have to say. bed bath is a stock that seems to get crushed on the cryptic outlook. they do a truncated conference call. go read the chapter in "get rich carefully" where i totally blew it in the quarter and you'll know how hard this one is to trade. no trading at bbby. thursday is my first day of earnings season, which is a shame because there are conference calls after it that
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aren't as informative or entertaining. i'm talking about alcoa, aa, we'll learn whether he sees commercial construction getting stronger, whether the december auto numbers we get today are an aberration, power play and construction and airplane production. there isn't a piece of commerce that alcoa doesn't touch. i can't wait for this call. i urge you to listen to it and read the presentation that goes with it. i'm sure it'll refute the deutsche bank analyst that at $8 says it's a sell. i think so much of alcoa and the call i devoted a whole section of "get rich carefully" to show you how to parse the numbers. finally, friday, the employment number. i didn't mean to bury the lead. this number will create the prism it will appear to as we prognosticate about how the rest of the quarter is going. i promise to be with there with you as we puzzle over the number. let me give you the bottom line, i care more about you knowing how to interpret a conference call than i care about all the headline numbers in the world. let's listen in, let's figure
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them out, make judgments and modify them by friday's employment number so we can capitalize on the opportunities, earnings season always brings for the astute investor. i want to go to dave in florida. dave! dave in florida, dave? >> caller: yes. >> yo, how are you? >> caller: i am just doing great, jim. thank you for taking my call. and thank you for your fresh pragmatic outlook for stocks, which i take to mean for a company sound financials plus a sound management, plus a sound business plan just generally equates to a sound investment. i see this pragmatic outlook you talk about is similar to that of the late lewis roucouser. >> thank you. first of all, i wouldn't have gotten in this business if it weren't for him.
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he's up here, i'm glad to even be around here. xerox has not executed as well as i'd like, frankly. i think that the business plan is a good one, as you just mentioned, but the stock has had a big run here. i need to see this quarter, sir. it's just had a monster run without having monster results. maybe this will be the quarter that verifies why it went up to begin with. because i sure haven't seen one yet you do that. as earnings season's upon us, it's key to listen to these calls before making judgments. we're going to keep our powder dry but get through it together. oh, man, i can't wait until the matinee alcoa. "mad money" will be right back. coming up -- best of the bunch, from flix to flying, you don't need to be a wall street insider to spot the stocks that became 2013's top performance. but will these winners take a victory lap? or could new names take up the charge? and later, web war, you search, you shop, they are two of the
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hottest growth stories wall street has to offer. tonight, cramer compares tech heavy weights amazon and google to see whether droids or drones could help you profit in 2014. plus, looking ahead, 2013 saw record highs and help boost the bottom line of many investors. can this year follow suit? tonight, cramer uses the technicals to check if there's still room to rally when he goes "off the charts." 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.
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you know what's bizarre about the five best and five worst performing stocks in the s&p 500 last year? after tremendous advances in the
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winners, i still like most of them. and after horrific declines in the losers, i still hate most of them. one of the most important exercises in investing is to force yourself to question your own assumptions about your favorite stocks. and 2013's crop of beauties and beasts is no different. it's time like this you have to play your on contrarian, go against yourself to see if you can find an unloved ugly duckling that could turn into a beautiful swan or discover which beautiful swan may turn into a black one, obliterating your gains. today, i just want to look at the s&p's five biggest winners from 2013. we'll save the losers for next week and examine those winners through a jaundiced eye. i'm hearing a lot of feedback on twitter. monster beverage. first up, netflix, here's the stock that's rallied 297% last year from 92 to 368.
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hey, now it's got a market cap. netflix is phenomenal, one of the cult stocks along with solar city, twitter and amazon. those are cult stocks, although i say i do like amazon. i'm still recommending people own netflix. why? because i like to do market cap analysis and that's what drew me to netflix in the first place. when it was trading much lower, it was a tremendous number to satisfy users that attracted me. by the way, of which i count myself a member. my kids taught me about netflix before the 300% gain and showed me how to stream video over my wi-fi so i never had to mail in a disk again. we're not alone in loving netflix, more than 31 million americans use it along with 9 million abroad. when the stock was lower, i urged apple, microsoft, yahoo, or facebook to buy it. using some of their cash for growth as netflix represented a real chip in a new tech game that's working, the holy trinity of mobile, social and cloud that identify in "get rich carefully"
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as the most important multi-year trend out there. you know what? there is a simple dirty truth about netflix, i'm afraid to say it on air. it's true. we hate to admit it out loud, but we would be willing to pay more for the service! and that's how much we love it and that's the key! to me, that means there's no way it's worth merely $22 billion. it's a concept too big for the market cap. i think it goes higher until the subscriber growth peak. i say you should own it, maybe a switch deep in the money call options, protect yourself from the downside. the second best performer last year was micron, symbol m.u. and it was up from 6.21. i still like micron because it's part of that slap happy oligopoly. after it bought a giant semiconductor that had gone bust. and i like the exposure to flash, an amazing memory chip with ever expanding uses. but, would i buy micron? first, there's no doubt you're coming in late with this one.
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the fact is, makes commodity chips, so when pricing gets as strong as it is now, someone always blinks and decides to put up more factories to take advantage of higher prices, and the average selling price plummets -- and remember, that is the key metric for chip makers as i explain in "get rich carefully." and that's where we are right now. we're at the precipice right now because we're hearing rumbles of new factory additions. hence why this stock trades at ten times earnings. people expect those earnings to collapse imminently. the saving grace is the skeptics have been saying the same thing about disk drives, western digital and cgate, and they've maintained excellent price discipline. at $22 billion in market cap, i think it might be too late to stay long this gem, because it would make it oversupplied. and when you hear a whiff of plans for new foundry, you'll be shadow boxing with bears.
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we'll hear lots of analysts about new capacity coming on and despite the denials, i expect management to say that it's not going to happen. the questions will speak louder than the answers. third, best buy, oh, we sold this stock 236% last year back from the dead. came back to life, why? renewed management and vigor. i always wondered, why don't they close the bad stores? they did. offered competitive prices and the only game in town for those who need help buying and installing hard goods that can't be done alone or even lifted for that matter! there's only one problem, the stock has pretty much won everyone who has been a skeptic. the big analysts bashers are now big analyst backers. when that happens, it's better to have one foot out the door than in. i think best buy will have to come down to recharge.
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but when it does, the economy's strong enough, i'm going to tell you to pull the trigger, buy it on weakness only like i told you to do rite aid. fourth is delta airlines, it's one of the top five winners of the s&p. one that must be bought right here, even though it was up today because it's benefitting from the fantastically positive acquisition of american airlines by u.s. airways. the airlines just a couple of years have gone from being totally uninvestable to being among the best stocks out there, and even though delta was up 131% last year, can still fly higher as the stock roared on news of passenger and revenue numbers. now, i do prefer the new american airlines because of the synergies with u.s. air and i think the integration's going to go smoothly. some are worried about that. delta's transformed from a servant to the bond market to being a cash spewer and i think it's got a lot of room to run. delta is one of the stocks that shouldn't be allowed to make as much as it can now. that's given this company a multi-year runway to make a ton of money. buy it.
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and buy american every time they're hit. rounding out the top five winners is etrade, as the company made a major comeback at the same time that the individual investor seems to be tepidly returning to the market. i think even after the run, the stock's cheap, but at this point, i would prefer you to own kgc, that's the old knight capital group kcg. knight capital group. because the knight, players that benefit when individuals return to investing and get to increase in trading, something i think will happen in 2014, it has a terrible balance sheet. why would i like that? well, it can benefit from multiple refinancings like you may have if you have a high mortgage and that may still occur if rates remain dramatically low. versus what knight capital currently plays. it, too, has had a big run, but it's only worth $1.3 billion, much too small given the opportunity. remember, i'm using opportunity analysis here. of all of the 2013 winners, i have to say my favorite is delta.
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the main reason, as part of this exercise, you have to ask yourself, is the stock overly loved? i can tell from twitter @jimcramer that there's massive interest here. netflix has to be one of the most popular stocks with the possible exception of fb or facebook. etrade's going to need the fed to start raising the rates on the credit balances. but delta, i don't know a soul who believes in it, sadly, even the people who have already read get rich carefully where i praised the airline stocks to high heaven, they don't believe. the bottom line, delta's my favorite of the top five performers of the s&p 500. stay tuned next week for the worst performers in the s&p. maybe there's nuggets of gold in there. after the break, i'll try to make you more money. coming up, growth spurt, augmented reality or autonomist delivery? to find a winner between amazon and google.
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plus, new year, new highs? after nearly tripling since the generational bottom in 2009, can the market keep up its rally in the new year? don't go anywhere.
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there should always be a
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place in your portfolio for at least one turbo charged growth stock. and in the early days of 2014, it's worth thinking about what that growth stock should be for the rest of the year. how their valuations can be justified and perhaps more important, how you choose between great growth companies how you decide which one is the better stock. tonight we're having a clash of the growth stock titans. it's a battle royale between two of the best performing names. google and amazon up 58% and 59% last year respectively. these are two superbly managed best of breed companies that are both within striking distance of the all-time highs, although many people think they're expensive, bear with me. we've got to find out which one's the better one to buy. i like to be rigorous about these things, which is why in "get rich carefully," my book
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released earlier this week, i lay out a ten-point system. it's very long here. ten-point system for grading these super power growth stocks. not only -- let's look at google versus amazon, have a real shootout. show you how that system works, how you can use it to measure not just these two stocks but any rapid growth name using these going forward. and test number one, is there potential for multi-year growth that you can put a value on. in other words, a clear growth path that provides long-term visibility with multiple revenue streams. amazon has this in spades. the worldwide retail opportunity is enormous. amazon's in a tremendous position to take market share as people do more and more of their shopping online. particularly on days like today where much of the nation's commerce seems to be shut down, the storm. amazon's a global economic power house, it's an ecommerce juggernaut that offers the widest and cheapest selection of goods out there. the company could increase tenfold in the strength of the
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retail business, not to mention the kindle and the terrific web services division. how about google? well, here's a company that's the king of search, controlling 66% of search queries, 70% of advertising budgets. google's android operating system runs on more than half of the smartphones in the u.s. and the company should have a terrific multi-year growth stream from youtube. my one knock on google here is they do not do business in -- china! all right. yeah. that's right. it's the world's fastest-growing market for the internet. i'm giving amazon -- i mean big stick cramer is giving amazon a ten and google a seven. all right. get rich carefully growth test number two.
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is the total adjustable market big enough for the company to sustain its growth? this company is the walmart of the web. and there's still plenty of brick and mortar retailers to take share from. by the way, total addressable market is used as t.a.m. as for google, they sell in several different markets growing like weeds. the $45 billion search market is the smaller fragment of the $600 billion advertising market. i think the modernization potential for android and youtube could be ultimately gigantic. plus, google's moving into computers with the lean, inexpensive devices. i say google and amazon, i'm giving them both a ten. hard to miss. growth tests three from the new book. can the company stay competitive? amazon has developed tremendous loyalty in the ecommerce business as well as the fulfillment biz. even the kindle seems unable to
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be -- i love my kindle fire. i love it. took it on vacation. read that carson book to start. easy to read, probably because of the kindle, no the the book. as for google, i think the biggest risk is actually from the justice department's antitrust division if they ever wake up. don't laugh, they did come after microsoft. that said, i think you have to watch out for yahoo and the potential that facebook could cut into google's search business with clever graphical search that's more targeted. i'm giving amazon a ten, google an eight. growth metric four from "get rich carefully." can the company return dividend over time? or does it have a well-defined growth path we want them to keep putting their money back into the business in order to fuel more revenue growth? this is a two-prong test. i never want to punish a company because it's growing too fast for dividend or buyback to make sense. amazon, for example, has oodles of growth ahead and the company needs to invest in warehouses
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and technologies to take over the world. if they suddenly issued a dividend, i think the stock would probably plummet! as it would give the impression that the growth might at last be petering out. google has a ridiculous amount of growth ahead of it that require the company to keep spending. but the problem with google it often seems to spend a lot of money on projects that i deem uneconomic or even foolish like the $12.5 billion motorola mobility acquisition. let's give amazon a nine and google a seven. get rich carefully tests at number five. can the company expand internationally. amazon has an opportunity to expand worldwide. the company already has 13.5% of the transactions, but that's still less than 1% of global retail sales. i think the opportunity here is enormous. as for google, it already gets more than half of the revenue from overseas. the global search market is expanding rapidly.
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however, again, they don't have access to china. and long-term that's a big problem. i give amazon a ten and google an eight. test number six from the book. can the balance sheet support strong growth? amazon and google both pass this one with flying colors. i'm giving them a pair of tens! growth test number seven from get rich carefully, is the stock expensive on the out years? how cheap is it based on the potential earnings four or five years down the road? amazon is incredibly expensive on next year's earnings estimates and still pretty darn pricey on what it could earn in 2018. there's some risk here, i think it's justified as barring any execution problems, the company should keep beating the numbers year-over-year. google is cheap, trading with a priced to earnings multiple based on the earnings estimates five years down the road. that makes google substantially cheaper than the average stock even as it's much better than the average company. let's give amazon a five and google a ten! does the company have the right
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metrics? i think there's no doubt that jeff bezos is the right man for the job. my fear is i have no idea who is running the show besides bezos. as for larry page, co-founder, he's done a terrific job since he took over as ceo in april of 2011, reorganizing around individual product areas and empowering executives to grow their business lines faster. i give google a ten here, amazon an eight, simply because i worry about what happens if bezos ever retires. growth test number nine, does the company need economic growth to make the numbers? they don't need strength in the u.s. economy to beat the numbers. as advertisers tend to cut back on spending during times of economic hardship, i'm giving amazon a ten, google a nine. final growth test for get rich carefully, can the company maintain or grow the margins? google and amazon under pressure
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as both companies have been making substantial investments to spur growth and the market's been giving them the benefit of the doubt. i think google has the edge here because amazon is an ultra cheap online retailer. google, on the other hand has a low cost of goods sold because it's all done by computer or self-generated content or paying customers. google, ten, amazon, seven. here's the bottom line, when you go through all tests and add up the scores, amazon wins. if you put a gun to my head, will you please take the gun away from my head. and then i'd say, yes, amazon is the better growth name. tom in colorado. tom? >> caller: hey, jim. love the show, man. >> yeah. thank you. glad you like it. what's going on? >> caller: i'm looking for -- been poking around at robotics and automation. and it's broken up in the niches. you've got industrial, medical and, you know, defense and
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stuff. and i came up with a company i'm kind of interested in that had a strong run in 2013 as cgnx cognex corporation. >> i'm waiting to hear which name. there's been so much money lost in that area. i've known this company for a very, very long time. i think you're on to something. i want to stick with it. i think you're right. let's go to connecticut. >> caller: hi, jim, how you doing? >> real good. how about you? >> caller: good. my stock is citrix systems. buy more, sell, or hold? >> look, you know, obviously you're going -- you're thinking of cloud. i'm not going to send you to citrix, i'm going to send you to salesforce.com, crm. that's the better cloud play. i've made up my mind on that issue. i'm trying to give you the tools for smart investing.
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the list in "get rich carefully," it's a fabulous one and pits amazon versus google and amazon wins. stay with cramer.
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it is time -- it is time for the "lightning round" on cramer's "mad money." you probably ask what is that all about? rapid-fire calls. you say the name of the stock, i tell you whether to buy or sell. play until this sound -- and now the "lightning round's" over. are you ready skedaddy, i want to start with tom in pennsylvania. tom? >> caller: hey, jim, thanks for taking my call. a big pittsburgh boo-yah to ya, jim. home of the pittsburgh steelers. my question is this, last year
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you recommend eaton, around 52, 53, i took your recommendation, it's had a super nice run. it's about $75, $76 a share. what do you see out of the company? >> i debate this every day with stephanie link, we are owning it. we both think it can go higher. i don't want you to sell. i know it's been a good run. can i go to sue in california? sue? >> caller: happy new year boo-yah to the stock master. >> right back at ya, sue. >> caller: okay. listen, i'd like to buy l.o. is that good? >> that's okay. you know, look, here's the problem with lorillard. i don't like stocks with no growth. if i don't get growth, it's a tobacco business. part of the business is going up, that smokeless thing. no, i'm not going to recommend l.o. dan in oregon, dan. >> caller: hey, jim, how's it going? >> what's up? >> caller: hey, just curious, i was looking at a stock raidian
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group. >> i like it, but look genworth more. >> caller: hey, cramer, i have a question about groupon. >> i'm a backer of groupon. people laughed at me when i went positive on it. but that was because they changed management. i know him from aol, it made me want to buy it. that stock goes higher! i need to go to ty in indiana, ty? >> caller: hey, how you doing? boo-yah, jim. >> boo-yah. >> caller: i got a question about avid technologies, just holding for whatever else, it's a fluctuating one. pretty much goes up during the holidays and then comes back down. >> i've got to tell you, i've known avid for years. i was surprised someone didn't take it over and put it out of its misery. it's not been a great performer, but it's coming back.
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i think you should continue to hold it. it is not an expensive stock. can i go to mike, mike, mike in louisiana? mike? >> caller: jim, boo-yah. how are you? i'm calling about sierra wireless. >> i know this company is red hot. i know it's red hot, sandisk is red hot, but this is a component player and i'm not going to get caught up in a component player. i say you sell a quarter of it on monday. pat in washington. pat? >> caller: hey, thanks for taking my question. silicon graphics. >> boy, we recommended that stock many years ago and i can't believe it came back to life. this is once again another company that does high-end servers and emc does high-end servers, and i've got to tell you, i think the marketplace is crowded. i don't want to own it. let's go to miles in pennsylvania. miles! >> caller: big boo-yah to you,
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jim. spwr. >> i'll see your sunpower, and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade.
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as we kick off the new year, we want to get a sense of where as we kick off the new year, we want to get a sense of where the averages are headed over the course of 2014. last night i took you through the dow jones industrial average, stock by stock with a classic bottoms up analysis. we like what we saw. today we're doing something different. a special friday edition of "off the charts." we're going to use the help of bob lang, a fabulous chartist at the street.com as well as the founder and senior strategist at explosiveoptions.net. before we get down to the nitty-gritty, let me take a moment to tell you why we go off the charts every week here on "mad money" and why i devoted an entire chapter in my book. i'm not a chartist by nature, my method is about putting in hours to research how companies are doing. using that information along with my view of where the world is headed to try to pick winners.
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but i think the charts can be useful if you use them correctly. that's a big if. it's all about identifying patterns and stock patterns that tend to repeat themselves and using those to predict future moves. the chart guys, they can be very persuasive. but as i explain in the new book, you should never buy a stock on the chart pattern alone. if it doesn't pan out, you will be up the creek without a paddle. however, you can use the charts to improve your timing, and when you combine them with the homework i'm telling you to do, i think you increase your odds of making successful investments. i go over the technical patterns that have worked best in five years of doing off the charts here on "mad money" so you can use them correctly and become a better investor. let's get back to the nasdaq 100 or russell 2,000. check out this long-term monthly chart of the qqq. that's the etf that tracks the nasdaq 100. first of all, when you look at the williams percentage r oscillator down at the bottom, which measures whether security
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is overbought or oversold, you can see the nasdaq 100 has literally been in overbought territory since the middle of 2010. typically overbought is bad. it means you come up too far, too fast and are due for a correction. when something can stay overbought for 3 1/2 years, that tells you it's riding an unstoppable trend. stocks can stay overbought longer than anyone expects. and that's what's called embedded overbought. then there's the moving average convergence indicator or the macd. technicians use it to detect changes in momentum before, not during or after, but before they happen. the macd flashed a big fat buy signal where the black line crosses above the red one in the middle of last year, you can see that. and it continues to be positive territory today. the qqq hasn't had a serious correction in the monthly chart since 2012. but lang says the technicals aren't predicting one either. he's not going against this. he thinks it's a buy.
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take a gander at the weekly chart. according to lang this picture is downright beautiful. this is perfection, people. you can see the nasdaq 100 is an uptrend that's only given you one pullback over the last 12 months. the thing -- that's why it was up so much last year. the thing is the hottest trends rarely give you a chance to get on board. but when you look at the shorter term daily chart, it's possible we could be on the verge of a rare buyable pullback on this red hot index. on the daily the nasdaq 100 has been consistently overbought, that's according to the williams oscillator, but unlike the longer term charts, here you see occasional pullbacks out of oversold territory and we're seeing one of those pullbacks right now. this is the fourth time this has happened since october. and on each occasion, you caught a nice buyable decline in the qqq. lang thinks the qqq can pull back down to around $84.
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please don't freak out if that happens, but at that point, the 50-week moving average should act as a floor for the index. and once we get -- once we get that little correction, lang believes the nasdaq 100 will resume the long march higher. it could be a terrific entry point. and considering this is full of big cap techs or biotechs, not to mention the four horsemen of the apocalypse, i wouldn't be surprised if lang isn't dead right. how about the russell 2,000 index, as represented by the ishares or the iwm. check out the monthly charts to start. the last year this index was in overbought territory on the williams percentage r oscillator. it, too, is embedded. meaning the fact it's run up enormously is no barrier to the rally continuing. the russell 2000 was only down for two months. this is incredible. plus, lang also notes the first
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quarter tends to be fabulous for the small-cap stocks you find in the russell 2000. in 7 of the last 8 years, this index has ralied hard during the first quarter. this could be a terrific time to buy right here, right now. let's zoom in on the daily chart to show you what i'm talking about. lang points out the russell 2000 has been trending higher in a beautiful channel and right now at the higher end. he thinks this index could pull back by 1% or 2% in the near future, dropping three points or so, that 50-day moving average at 111. now, every single dip in 2013, every one turned out to be a terrific buying opportunity. and lang thinks this year is no different. no different for the russell 2000. let me give you the bottom line, as the new year begins, i think it's a mistake to trade based on charts alone. but if you know how to use the charts as i teach you in "get rich carefully," they can give
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you an extraordinary edge on top of the homework i'm telling you to do. and right now the charts say we could be about to get some very rare, very buyable beginning of the year pullbacks in the red hot nasdaq 100 and the smoking russell 2000. that's good news for tech and all sorts of small-cap names. in other words, the charts are confirming my fundamental view that it's a good time to buy, not sell your favorite stocks, or, yes, even the indices if you don't have time to research them the way i outline in my new book. stay with cramer?
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my "squawk on the street" partner david faber and i used to joke around in the late 1990s about what stock was the key to this market. he wanted to know what mattered, what people were keying on. sometimes my keys were the same for months. there was that run in yahoo, which i said was historic right up until it purchased broadcast.com to provide internet radio, kind of a watershed moment, the benchmark of overpaying insanity that defined 1999. before that it was pfizer, rallied like a small cap biotech right into the launch of viagra. i've been saying the keys of this market were tracker supply, little facetious there, but three fast-growing momentum stocks on the go. and i haven't been talking about how somewhat shockingly the stocks of acquirers like fireeye, the network security company that soared 38% today when announced it was shelling out a cool billion dollars to buy another company with expertise, tend to go higher as
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i'm sure liberty media will go on monday now it announced it's taking over the rest of sirius satellite in what i'm calling a virtual take under. today i said the key to this market right here right now is general electric. i said ge because this morning oppenheimer downgraded from buy to hold sensibly in a piece saying that restructuring is in a transitional period, which i think is wall street speak for a stock that's run out of gas. ge's ongoing minimizing of finance and maximizing industrial at this point is baked into the stock, the research piece implies, it's time to move on to others. why is this stock key to the market's next move? because if opko's right with the downgrade, that means we're reaching the end of the period that began with the strong labor reports on the first period. ge hasn't kept pace with the likes of gm or boeing, it did have momentum in the end with a company transforming itself from the financial dog, literally, with an industrial tail to an industrial power house dominated by energy, this one to me seems to define the moment of what can
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go higher. if the economies around the world improve, which is the thinking behind having my charitable trust own the stock. if the naysaying analyst is right when we're going -- then we're going to repeal some of these gains. and it's going to be a rocky place until we found new leadership. right now, it's not clear if we'll be right. have autos slowed? that would be terrible news for industrials. will it send us a negative signal that ge, a company with big chinese contracts could slow down? we have to be attentive to stay close to this international industrial conglomerate. my bet is this downgrade is premature, perhaps way premature and ge is going to return to trade as it was in the 40s. yeah, i think opko's wrong, and i'm putting my charitable trust money where i mouth is. i think you should too.
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a lot of you are going to feel real ripped off on monday because sirius satellite has gotten a bid from the real owner which is liberty. and the reason why you're going to be angry, it's probably not going to be higher than the three and a half area.
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and the stock wasn't for it. i wish i could do something to change that and make them pay more. but they really have all the cards. so do not expect a white knight to come forward, sirius satellite. i think it might be over. there's always a bull market somewhere, i promise to try to find it for you here on "mad money." i'm jim cramer. i'll see you monday. plus, you ask me, susie, can i afford it? >> i want a really nice car. i think i deserve a really nice car. >> my 2013 was the year of denied. >> denied. >> brakes. denied.

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