tv Mad Money CNBC February 6, 2014 11:00pm-12:01am EST
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that really is you? if they're not a cfp pro, you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard. 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 just want more days like today. my job is not only to entertain you but to educate you, so call me at 1-800-743-cnbc. on a terrific day for the averages, where the dow climbed 188 points, s&p gained 1.24% and the nasdaq jumped 1.14%, it's
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worth remembering that companies can and do change their stripes, actually improving the business all of the time. sometimes the moves are revolutionary and sometimes they're evolutionary. today, we heard from a cavalcade of companies that had changed their stripes, and the results are remarkably positive and they made you a ton of money in this fabulous session. why don't we start with the most obvious one, green mountain coffee roasters, which after today should rename itself green mountain coke refrigerator. that's because last night coca-cola bought a 10% stake in the company and they are going to partner with them to develop a cold soda maker, similar to the keurig, yep, a keurig for soda. until last night green mountain had clearly peaked with slowing numbers. and the two high valuation. but brian kelly, green
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mountain's chronically underestimated ceo saw the weaknesses and thought big, partnering with coke to have a disruptive machine from the looks and the sound of it will be much easier to use and therefore better than soda stream. plus, coca-cola's international distribution can blow out the sales of the product. in one fell swoop it became a terrific draw. then american airlines, a company that not long ago was bleeding red ink. now that it's merged with u.s. airways, you can see how the company has been transformed. that's why when i picked up the paper today, lead story in "usa today" 49,000 flights have been cancelled. i no longer fear for american, even though at one time i should have been shorting it aggressively on the cancellations if i still ran a hedge fund. the airlines are a heck of a lot stronger, thanks to all that consolidation. hence the stock's conclusion on the 52-week high list, not the low list as you would have expected at one time. then there's aol. remember those guys? well, it had initially a
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positive, but then switched to a negative reaction to the earnings today. aol's reinvented itself, this time as a play on video with advertising and search. meant to rival the traditional broadcasting cable companies. it's doing remarkable things as it blows out revenues. it's a big buy back. while it didn't put much money on buying the stock this year, i think it will be back in if the stock doesn't higher. this was a dial up non-content company that's now capable of rivaling google on content at least. it has been transformed by the ceo tim armstrong. >> hallelujah ♪ >> how about facebook? think about it, 18 months ago facebook was a slowing desktop billboard company with a product that simply didn't transfer well to mobile. fast forward to today and it has the best interface for both
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advertisers and users. the worry that business has peaked is behind it, and i see multiple years of growth, and we'll look back and marvel at how inexpensive the stock was. one has to hope that twitter is able to reinvent itself too, so its users' growth can regain the luster of a year ago. it worked for facebook, it can work for twitter as i'll detail later in the show. i'm hopeful that management, very good as they are, will be able to get that user engagement rolling again. of course some of these transitions take a long time. bob iger, ceo of disney, has worked hard to get content providers, pixar and and marvel now lucas film, the studio behind star wars and they have been able to create new movies like the pirates of the caribbean franchise or cars and now frozen. that later could be monetized across broadway stages to theme parks. disney has been transformed into a business where it could be a regular hit maker.
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and i think that this quarter you saw the end to movies that aren't franchises and the beginning of multiyear rollouts of what are almost guaranteed to be hits. that's why bob iger is one of my bankable 21 executives in "get rich carefully." and we know the companies like marathon oil have created tremendous value by breaking up, and last night when i interviewed the ceo of marathon, i was shocked to learn how much they could do to bring out more value, and i think it's a good example, and it refuses to stagnate. who knows how much value chevron, exxon or royal dutch could bring out, and i still think that occidental petroleum will do well. we know that lynn energy did, virtually overnight transforming from a slow growth natural
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gas company to the natural gas tail by the way, those mlps are going up. i don't think it's too late to buy lynn energy, my charitable trust is doing it. think of how strong martin marietta materials has been after its purchase of texas industries. the stock soaring again today because of good numbers. how weak could the country be if these companies are doing so well? and pvh and vf corp, both bankable ceos, have repeatedly reinvented themselves with acquisitions. the apparel stocks have been a total bear here of late, because of worries about retail sales, but today we got numbers from kohl's and ann taylor that weren't very attractive at all. yet, the stocks roared. so perhaps people are too negative about both vf and pvh. i think all companies with stagnant share prices should be thinking along these self-help lines in order to create more value and give the market what it really wants -- growth. for example, i reiterate that if apple wants to give its stock a
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growth injection, don't buy back stock. make a synergistic acquisition to your itunes business and that would be to buy netflix. microsoft's new ceo needs to do something to advance social mobile cloud and connectivity. that means buying a company like aol. neither acquisition would be a strain for apple or microsoft. here's the bottom line. this market wants growth. whether it comes from dividing a company into two pieces to bring out more focused businesses that can grow faster under one roof, or from reinvention with new products, or from acquisitions that take out competitors and increase pricing power. when we get that growth, the stocks get bit up. when we don't, the stocks tend to sit out, even on the day like today. it's a vital lesson for corporate america that far too few management seem to understand. but when they do figure it out, the rewards tend to happen rather quickly for those opportunistic enough to take the chance. now i go to alex in new york.
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alex? >> caller: booyah, cramer. >> nice booyah on this, the best day of the year for the dow and the s&p. what's going on? >> caller: first of all, i have to make a birthday shout-out to my super stock bro, c moose. >> of course. >> caller: anyway, i bought american eagle fairly low, $13.04. should i sell shorts on it? or save that bad boy for the long haul? >> retail is having a couple day's bounce. if you get the bounce you have to go. come on, man, we're going high quality. can you imagine you have a nordstrom's down at 57, 58, gap stores by the way, which obviously did not have that bad a quarter, is now just reported some very good numbers. go a little higher quality. move up on the food chain. can we go to charlotte in missouri, please? >> caller: yes, i own akamai. it went up today finally.
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will it continue or do i take profits? >> no, i was on that conference call, i have to tell you, it's up 10. when you see a stock up 10, buyers are coming into it. why? apple is not opening up the content delivery system to compete agaisnt akamai. don't forget, the backbone system is akamai. i like the stock. some companies can change their stripes, all the market wants is growth. we see companies create value by doing self-help, get bid up huge today. it's a vital lesson and we know andy dufresne teaches it. got to get busy living or dying. "mad money" will be right back. coming up, catching a break? from fitness to fresh air, it's behind some big brands in recreation. can this exposure be a strike for investors or are concerns about the consumer enough to sink the shares? cramer is making a splash with the ceo.
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plus, remember roth? whether you have got it or think you should start it, you probably got questions about the roth ira. tonight, cramer's laying out the strategy for how to succeed, and offering some unexpected advice when he opens up his playbook. and later, looking for an investment to fall in love with? there are more than 4,000 companies trying to connect mr. and mrs. right, and with valentine's day around the corner, cramer's calling in a specialist for a closer look. all coming up on "mad money." >> announcer: 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 you wear a denture, touch it with your tongue.
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that we're in a difficult moment. but we did bounce today. at times like this i need you to remember something that f. scott fitzgerald was right about, the rich really are different, not just because they have more money, but they keep spending it even when everyone else is hunkered down, waiting for the pain to stop. consider brunswick corporation, a maker a play things for the rich, including fishing boats and motor yachts like my own beloved 17 foot boston whaler, and fitness machines, got one of those of theirs, and bowling equipment. fully three-quarters of the company sales, although, come from boats and boat engines, which is why i made brunswick a member of my gatsby index, designed to measure the strength of the high end consumer. they reported at the worst possible moment last week, right at the start of the three-day period when the market got eviscerated. they earned 15 cents a share, two cent beat on higher than
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expected revenues that rose 8.6% year over year. i think the guidance was conservative and the stock jumped 2 bucks from 40 to $42. that's a pretty heinous day they reported. since then, brunswick has given up most of that move. now i first recommended this stock two years ago. since then, it's given you a 97% return. lately, though, it's pulled back about six points from the highs. this could be the rare buying opportunity we need for a fabulous company? let's check in with dustan mccoy, the ceo of the brunswick corporation. welcome to "mad money." how are you? >> thank you for having me. >> i have to tell you it's funny. you're synonymous with everything i love. i love to bowl. i have your life fitness workout machines in my place and i have a boston whaler, and it's unbelievable. >> we love people like you. >> no, it is. i really don't think of them as brunswick. i think of them as the individual companies. is it just you have so many different labels under the roof
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of brunswick, do people really know it's all you? >> actually they don't. any time i meet people, hey, you're the bowling or the billiards guys and people don't know we're in the boating or the fitness business. >> when i bought it, i looked at the consumer reports, what was the best. what was unsinkable, it was you. i think a lot of your boat names, people aren't familiar with. they know them as the best of breed. >> that's right. and actually we do that on purpose because we want our brands to have their own identity in the marketplace. it's a very fragmented market. they need to compete well without having the brunswick name tagging along. we do a good job. >> you sure do. let me ask you, it was brought up on the conference call, but it's an interesting issue. my generation, we can afford it. i have done well, and when you do well, you get -- the harder thing for me to find is the slip to put the boat in. younger people aren't doing as well. the incomes aren't up. it's so much harder to find a job. is there a problem here with
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just the age group and having the wealth to buy your products? >> actually not. we follow statistically what the age of boat buyers are. we did have a dip right at the recession, with people let's say 25 to 35, we began to notice the last two years that hasn't begun to pick up. we have actually seen a few more buyers over 65, but we have also seen more in the 45 to 55 range. and here's a bunch of research we have done. we surveyed people in europe, canada, the united states and brazil. those are the biggest boating markets in the world. and the fundamental question was, is boating still going to be relevant? >> that's what i want to know. i think it is. >> the answer is yes. we had two findings from that, both of which are very good news for us. first, the people we surveyed, this is in the 90th percentile. all believe that boating is one of the great recreational activities in the world. >> it is. >> when you start there, then everything else becomes easy, right? then you have to get the product
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right, get the cost right and the styling right. add features, et cetera. that's what we're working on. >> that's great. i'm one of the people. i'm one of the people. a great recreational thing. now, the numbers out of the united states, the numbers out of europe were incredibly strong. how do you explain? >> this is in the fourth quarter. >> yes. in the fourth quarter. how do you explain europe being so strong? >> a couple of things. we brought a bunch of new models to the marketplace there, and again in any product company, new sales with great features, we really hit that market hard with a bunch of new models and great features. here in the u.s. a couple of things happened in the fourth quarter. the aluminum markets, let me put it this way. anything with an outboard on it, pontoon, salt water or fresh water fishing, have been growing significantly. we wanted to get boats positioned in the dealer network as we come into the season so they could do well. and smaller fiberglass products,
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which is a difficult place to be, we had a bunch of new product coming, so we wanted that in the dealer networks so we could get ready for the selling season. >> it all worked. >> we're confident to sell it at the retailers. >> the life fitness, which is what i have, is not a cheap machine. these are expensive machines, but your numbers are up big. is that clubs buying them or is that people having in-home gyms? >> no, we don't really go after the consumer to any great extent. only about 10% of our sales are into the consumer segment. so we position ourselves to be high end, very high quality. >> right. >> to go into a club, hospitality, hotels, et cetera. and all the growth in the fourth quarter was led primarily by clubs, and in fact that was global, jim, not just the united states. >> okay. >> and hospitality. >> all right. where are we with bowling? where is bowling right now? again, i mean, you know, i'm pretty good. i'm not as good as i used to be. i just always find that bowling
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is something that when you have kids that's what they want to do. >> sure. >> it's where my parties have been. we just like it. is that generational? is that the new generation liking bowling as much? >> something very interesting is going on in bowling. so we're working hard to participate in it. bowling for decades has been built around the league bowling. >> yes. i always hated it because they had the good lanes. >> yeah. the league bowlers in general have begun to decline in numbers. >> okay. >> that's probably because it takes a lot of time, you have to make a commitment for a long period of time, et cetera. so what we had begun to notice, there's a new class of bowling center that involves much more fun than bowling as a sport. good food, great customer service, big game rooms, et cetera. what we have been doing this year, we opened three pilots, two in the atlanta area, one in chicago area. entirely new concept for us. the atlanta area's concepts have
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been open for six months, a home run. chicago one we opened in october, got a little more work to do to prove the concept. but we're very relaxed now that we know what the centers of the future look like, and that way we can formulate a plan around that. >> one last question. because brooklyn bowl is a big, hot place where i live. >> sure. >> people who had their boats destroyed in sandy, they all got new boats, didn't they? >> not yet. >> no? >> not yet. they first need to take care of their home, then their car. then they collect their insurance money. and when we had all the hurricanes in 2005 on the southeast gulf coast, we saw those people begin to come back two, three, four, five years out. >> so that's still ahead for you. >> that's still ahead. >> what a great story. dustan mccoy, ceo of brunswick corporation, a great american company and a great american stock. stay with cramer. coming up -- time to take control of your future, cramerica. cramer's reimagining your roth ira when he opens his playbook.
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and later, perfect harmony? when you're looking for love, people do strange things, like spending loads of cash. online dating has become a multibillion dollar industry, and to give you the outlook on where the money is headed this valentine's day, cramer's calling in a specialist. go off the tape with eharmony just ahead. plus, the bird didn't fly today, so what do you do with twitter now? all coming up on "mad money." for over 100 years,
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as i was reading through the fabulous hash tag get a plan questions on my twitter feed, i came across one that just screamed out to be answered tonight for cramer's playbook. that's our new personal finance segment where i go back to basics to help to educate you about financial literacy. the question comes from @realrobbiecf -- by the way the fake robby did not ask this. 21 years old, where do i put the first $10,000 of my roth ira?
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s&p fund or individual stocks? this is essentially a question about how to get started. and i think it's very good one. first of all, @realrobbiecf, you have horse sense for using a roth ira rather than a regular one. roth makes more sense for younger people and workers aren't making that much money. unlike a regular ira where your contributions are tax deductible, you do pay taxes on the contributions to the roth ira, but you're then allowed to withdraw the money without paying taxes or penalties at any time. so you have more access to your cash than the traditional ira. ultimately, with the roth ira, you still get to invest for decades without paying capital gains or dividend taxes within the account. the difference is you pay your taxes at the beginning whereas with your regular one you start to pay when you start to withdraw when you're older. if you just started working and you're in a low tax bracket, a roth might make more sense for you. same if you think you might need to withdraw a decent chunk of
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change before you turn 59 1/2, the age where you can withdraw money from a normal ira penalty free. thank goodness i'm 20 years away -- okay, 20 days away. you're much less locked in. that's why i think this is one of the greatest savings vehicles out there. of course there's a hitch. you can only use a roth ira if you make less than $127,000 a year if you're single, or $188,000 a year if you're married and filing jointly. so this is a terrific option for the 95%. while it really would be nice if the really wealthy could take advantage of this too, a roth is designed for people who aren't in the top tax bracket. by the way, please check out yourmoney.cnbc.com. it's a pretty good resource to help you figure out how to manage your money. let's get at the real meat of robby's question. he's investing $10,000 because there's a $5,500 per year
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contribution limit if you're under 50, and he wants to know if he should buy individual stocks or a basic s&p 500 index fund. this is a real fundamental question that every single investor has to ask herself. regular viewers know where i come down on this. i actually think the optimal strategy is to own a diversified portfolio, five or ten individual stocks, and keep track of everything you own, and i outline it pretty carefully in "get rich carefully." in my opinion, that's the most effective and efficient way to make money in the market. if you do the homework, keep track of everything you own, then you should be able to beat the performance of the s&p 500 pretty regularly. i know many of the viewers say this to me. if you can't keep up with the averages, picking your own stocks lets you sidestep much of the decline when we're in a bear market, which is very important. because making back money you have lost is much harder than getting started. because you've got less capital to work with. however, as much as i like to
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advocate owning individual stocks, i recognize that it's not for everyone. a lot of people simply aren't cut out to manage their own stock portfolios, and that's okay. the truth is, managing your money is hard work, it's time-consuming. you have to read through the conference calls, the transcripts, the 10-k filings, they can get boring if you're not a total stock junkie like myself. the annual report is the most fun part of the things i read. i think the reward of a chance to beat the market is worth the effort, but let me put it like this. managing your open portfolio is like flying an airplane. you don't sit down in the pilot's chair unless you know you can stay alert and attentive for the whole flight. just like a plane, if you try to fly your own portfolio and then ignore all of your instruments, maybe take a nap, hmm, well things don't turn out. i don't want you to get burnt. so if you don't have the time or the inclination to do the homework necessary for managing a portfolio of individual
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stocks, i think you should put your money on autopilot. what does that mean? index fund, actively managed mutual fund. the vast majority of cases, just buy a cheap index fund with low fees that mimics the s&p 500.. that way you've got exposure to the stock market and over time your returns will mirror the gains from the s&p. although they will be slightly lower because even an index fund has some fees. the fact is that most of the time index funds will outperform actively managed mutual funds. the trouble with an actively managed fund is that right off the bat you're paying much higher fees. so every year it's going to be that much harder for an actively managed fund to catch up to the index fund. that said, there are some worthwhile mutual funds out there. it takes time and effort to find them. the best actively managed mutual funds act like an index fund with a brain. but really good mutual funds, ones they respect their investors will close off their funds to new money because after a certain point having more assets under management makes it much harder to put up stronger numbers.
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in most cases, i think an index fund makes more sense. until you have $10,000 saved up like @realrobbiecf, you don't have the capital to invest in individual stocks and still be diversified. so i think you should stick to an index fund for diversification until you hit that $10,000 threshold. here's the bottom line. you have got horse sense for using a roth ira when you're young and getting started. for new investors, remember my rule. you can own a portfolio of individual stocks as long as you have enough time to do the homework. but if that sounds like too much for you, just stick with the simple low cost s&p 500 index fund rather than gambling on an actively managed mutual fund. keep those #getaplan questions coming to my twitter feed, @jimcramer. can i go to mike in new jersey. >> caller: hey, jim, booyah. how you doing? >> what's happening? >> caller: not much, my friend.
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life lock has become a spec play and i was very happy to see it on your show recently. a very high evaluation of 575 times earnings seemed off the charts for me. profits look stretched, but i have a hunch here. what are your thoughts? >> you know what, i have been watching the stock. we first profiled it a long time ago, and then we had the terrific ceo on. i have now seen it really roar. people keep thinking that if i get life lock i won't have a problem with say what happened with nordstrom's. remember it's a different function, and while the commercial is very honest obviously, they tell you that, but i'm not going to disagree with you. it hit a 52-week high today. if people want to take a little off the table, no one ever got hurt taking a profit. let's go to celeste in connecticut, please. >> caller: hi, cramer. i know you can't tell us when spring is coming, but hopefully you'll be able to tell me -- unfortunately. you could tell me about autozone. what a great day they had over 6%. you tell us to look at the best in breed, the store is crowded every single time you go near it. did we miss an opportunity?
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>> no, i have been recommending this stock for years. it's been a great one for us. this morning advance auto parts reported a good number. as much as i like them, i think autozone is even better. stick with autozone. they have been buying back the stock, it's an incredible run. i'm proud that while everyone else gave up on the stock, at 300, 400, 500 -- buy buy buy, i'm still there. james in texas. james? >> caller: booyah, cramer. >> yo-yo. >> caller: i started to listen you in eastern europe. i'm an action alerts subscriber. >> thank you. >> caller: and i have appreciated the news, your information. you're always helping us little guys. >> thank you. >> caller: you told me last week that i needed to get out of phillip morris. i drug my feet. it's down to 77. do i hang in here or go ahead and sell? >> i don't like phillip morris. you're getting a little
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bounce here. i think the regulatory regimes all over the world are really coming down. this is international, a lot of countries that are on the ropes are starting to tax this stuff. i do not want you in phillip morris. saving for a retirement can be overwhelming, so let me help. i suggest a roth ira if you're young and just getting started. you know how i feel about owning individual stocks, but if you can't do the homework, an s&p 500 index fund is fine. i need you to keep these tweets coming. #getaplan. i find them terrific and i'm trying really hard to help you at home do this stuff right. stay with cramer. tomorrow, kick off the trading day with "squawk on the street." live from post 9 at the nyse. >> i'm calling an audible right now unlike my friend r. sherman underscore 25. >> it all starts at 9:00 a.m. eastern.
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let me talk to you about retirement. a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable, professional. would you trust me as your financial advisor? i would. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro, you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org.
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round on cramer's "mad money" rapid fire calls -- you say the name of the stock. i don't know the calls or the name of the stock ahead of time. i tell you whether to buy or sell. when you hear this sound -- [ buzzer ] -- then the lightning round is over. are you ready, skee-daddy? time for the "lightning round." vicki in wisconsin, vicki? >> caller: hi, jim. thanks for all your help in making us understand the stocks. >> that's what i want. that's what i want, and thank you for saying that. >> caller: i bought excelus in september of 2012 after you talked about it. how do you think it's doing now? >> i think it's a great defense company. get rid of the sequester, it goes to 25. dean in new york? >> caller: hi, jim, long time, first time. i commend you on the work you do on making investing fun. your take on clne -- >> we haven't switched to natural gas as a surface fuel, and as long as we haven't, the clock keeps ticking.
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he's up against too many odds. that's why i can't push that stock. may i go to mike in wisconsin. mike? >> caller: hey, jim, how you doing? >> real good, how about you, mike? >> caller: i'm doing all right. hey, i'm kind of new to the show. been watching for a couple of weeks. i need to buy your book. i'm wondering about your thoughts are on cal amp. >> that's just a great sweet spot, telco play. i really like that area right now. i think you're in the sweet spot. let's go to andy in massachusetts. andy? >> caller: hey, jim. what do you think of the recent earnings announcement of general motors and the impact on ford? >> i'm going to be very clear on this. i do believe that gm had better earnings than ford. i was upset this morning when people were so quick to say that gm's quarter wasn't that good. it was exactly what i was looking for. it wasn't better. but gm is a buy right here, and
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that's why stephanie link, my co portfolio manager of actionalertsplus.com bought gm and so should you. marilyn in michigan? >> caller: booyah, jim. this is marilyn calling from michigan. how are you? >> good, thank you. >> caller: what happened to viva? >> people didn't like that quarter. i didn't mind the quarter. the software as a service for health care and i think it's terrific. by the way, speaking of health care companies, congratulations to mr. bush for athena health that delivered another terrific quarter. tim in texas? >> caller: thanks for taking my call. seaworld, can they continue with the 10% dividend, and where do you see these guys going? >> i think it's fine. but esv, do we get back in, that yields six, day rates are coming down. that means that everyone is worried about that dividend. understand i think the dividend is safe, but that group is in harm's way. that, ladies and gentlemen, is
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the conclusion of the lightning round. [ buzzer ] >> announcer: the lightning round is sponsored by td ameritrade. coming up, valentine's day is coming. you've got the flowers, chocolates, even the jewelry. are you missing an investment in the $2 billion online dating world? we are going off the tape with eharmony. who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. get live squawks right in your trading platform [ mala body at rest tends to stay at rest... while a body in motion tends to stay in motion. staying active can actually ease arthritis symptoms.
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with valentine's day only slightly more than a week away, i think it's worth talking about one of the hottest businesses out there. online dating. listen to these figures. there are 54 million single adults in this country who aren't currently in a relationship, and within this group only 2.6 million pay for some kind of online dating service. but that number has been rising steadily. i bet it continues to grow as more and more young people who are more comfortable using the internet for just about everything start thinking about getting married. the biggest player here is isc interactive, which owns match.com and ok cupid. but the most effective player, the one that gets the users the best matches with the lowest divorce rate in the country is the industry's number two. and that's the privately held
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eharmony, which is why tonight we're going off the tape to take a look at how these guys do business. because like it of not, these online matchmaking sites are the future. eharmony costs $59.95 per month or just $19.99 per month if you sign up for a full year. they use a proprietary 29 dimensional compatibility test to scientifically match up potential partners and now they're expanding into new markets. right now they're making a job matching service, which i think can be huge if they can connect people to jobs they will enjoy. last month, they launched a premium service, eharmony plus, which can cost $5,000 a year and involves the services of a human matchmaker. i think this is intriguing with the big future which is why i'm thrilled that neil clark warren, the clinical psychologist who was the chairman and the ceo. welcome to "mad money." >> jim, thank you so much for
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having me on. >> well, i have to tell you, i'm thrilled because not only are you a great doctor, but you're also a great businessman. and the more i thought about eharmony, and we're very excited to have you on, the more i realized you have harnessed, social, mobile, cloud and connectivity. your company is actually the modern day fantastic user of all this great technology. >> well, you know, we spent 40 years, jim, trying to figure out how a man and a woman or a man and a man or a woman and a woman go together in a way that will last a lifetime. and now that we have the technology to take this to the world, we're really excited. >> well, it would seem to me that when you're doing something that involves the kind -- the idea of a job, there's a lot of similarities. a lot of similarities between a corporation and a marriage. a lot of similarities between how someone can find out what they want to do and that these
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are very harmonious. >> yes, that's astute of you to see that. 65% of all the people who have a job in the united states today don't like that job. they'd like to have some other kind of a job. so we want to try to get them into a job where there's really harmony. in order to do that, we've got to make a good match. in order to make a good match, we have to get companies to give us a lot more information about the job and the person they're going to report to. >> well, would that be analogous or in partnership, say at least theoretically, with an outfit like linkedin, is it something like that? >> yeah, it's a little bit like that. but we go a lot deeper because we have a lot more psychologists working on the matching. and we try to understand, you know, the matching of people is an extremely complex enterprise. and we recognize from the very beginning that we had to have a lot of people do this who didn't graduate necessarily from business schools. i mean, too many people make mistakes by hiring people who
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graduate from business schools, and they just figure out that these people can make the business work. we try to come at it another way. we try to take people who really understand people, who came up through the social sciences, and really understand how to put two people together, or a person together with a job so that person can feel really great about it. >> well, doctor, one of the things that we all grew up in nurturing homes, my mother always said there's such a thing as chemistry. you have to find the right chemistry. that was a theoretical wives tale, but there is. you have identified the 29 data points of chemistry. >> well, we have -- we do. it's kind of an interesting way to put it. i never heard anyone put it that way. we have 29 dimensions on which we match people and one of those dimensions is straight on chemistry. but i can tell you this, that you're much more likely to have
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real chemistry between two people if their ambition is a lot the same. if they have similar values, if they have intellect that's about the same. if they have sense of humor that's very much alike. we have 29 values. we only call one of them chemistry, but we call those other 28 probably do produce a lot of chemistry. >> all right, dr. clark, i know my friends at tcv were involved in your company. you had some great venture capitalists, you left the company for a while and you came back. when i look at iac interactive, i don't want a lot of that, but i do want to own match.com. that's a great secular growth story. we're not going to get a chance to own eharmony, are we? >> well, you know, that isn't fully decided yet. we have a wonderful board of people, and they want us to wait a little while to make that determination. let me say this. as for me, this whole enterprise is a very sacred enterprise, because you're putting people
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together with the person they're going to be with all their lives. you're helping them get to know themselves better. i wouldn't sell this company myself. but i -- while i own a fairly good piece of the company, there are other people who own parts of it and down the line, you know, who knows what -- we haven't ruled anything out. >> got it. well, look, dr. clark, you have built an amazing business and helped a lot of people's lives. thank you so much for coming on "mad money." >> thank you, jim. >> all right, we like to go off the tape with new and different ideas. we've got one for valentine's day. that's dr. neil clark warren, and i wish he'd let us own a share. stay with cramer. vo: whatever trip you're imagining,
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on expedia you can book any flight, car and hotel together to save even more. plus, get an extra $100 when you build your custom trip. expedia, find yours. i have a big meeting when we land, but i am so stuffed up, i can't rest. [ male announcer ] nyquil cold and flu liquid gels don't unstuff your nose. they don't? alka seltzer plus night fights your worst cold symptoms, plus has a decongestant. [ inhales deeply ] oh. what a relief it is. [ inhales deeply ] phone: your account is already paid in full. oh, well in that case, back to vacation mode. ♪boots and pants and boots and pants♪ ♪and boots and pants and boots and pants♪ ♪and boots and pants... voice-enabled bill pay. just a tap away on the geico app. ♪ huh, 15 minutes could save you 15% or more on car insurance. yup, everybody knows that. well, did you know that some owls aren't that wise.
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on the one hand, there's yelp, a company that delivered accelerated revenue growth with expenses going down as a percentage of sales, and those sales are flying through the roof. on the other hand, there's twitter. a company that measures itself by one big metric -- monthly average users. and it seems to be attracting fewer and fewer new ones. that's why yelp soared nearly 19% today, and isn't by any means done going higher, while twitter plummeted 24%, and might be headed still lower if it doesn't do something quickly to entice more users to its
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platform. both companies have articulated what matters and one overpromised and underdelivered while the other severely underpromised and overdelivered. more and more people were coming to the platform and therefore the advertisers were growing happier. twitter had a huge ipo branding event that i thought would have caused even more people to clamor to be users. but it didn't happen at anywhere near the pace that i or the analysts, now in a race to downgrade, thought was in the cards. instead, for whatever reason, and believe me there was no clear one on the call, there seems to be a more finite number of users than we thought. the numbers actually made me think at one point that twitter might be more of a craze than a consistent business, and that the company wisely came public when it did before engagement obviously went cold. i don't want to believe that, because i like the platform so much. but i wish i had been more wise to management when it was promoting its stock for the ipo. i just wish i had been smarter about it. management correctly pointed out
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that advertisers seem happy, but without fast growth, twitter will lose its cult status and become just another stock valued like any other stock. if you did that and you gave it a multiple on future earnings like say facebook, you come up with a $20 price target, well below where twitter trades now. don't laugh. using that same multiple, i can arrive at $100 price for facebook, and that's entirely doable. on the other hand, yelp they told us to measure success by revenue growth and advertisers who re-up once the programs have run their course. by both standards yelp reported outstanding numbers with 72% year over year revenue growth, up from 65% last quarter. local ad revenue grew 71%. gross margins are sensational. it's all user content. for free. you're getting accelerating revenue growth with the domestic international model. hard to match from any company, harnessing the social, mobile,
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cloud and connectivity trends that i write about in "get rich carefully." yelp is the local, mobile version of google and the yellow pages, and it's paying off huge. yelp may literally have too much business to handle. i can see it going from 89 and change to $100 in a very short time. i'm sure glad we stuck with it during its dip into the low 60s when we met the ceo at dream force, the festival of all things cloud, run by marc benioff of salesforce.com, which hit an all time high today. yelp has no fence for revenues in sight. if i were apple, if i were microsoft, i would buy them. twitter, on the other hand, while loved by me @jimcramer and so many other users has a $30 billion market cap. it must now grow into that market cap. i don't think that -- look, that's possible. definitely possible. because twitter is what's happening now as opposed to
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facebook, which is a memory book. but the engagements has to be made easier and the architecture less forbidding for it to get back on the growth path needed to take the stock back to where it was a short time ago. stick with cramer. for over 100 years, bp has been committed to providing energy for america. but this winter, it will come from a different source. we bring the energy to represent america. i have the energy to take on the world. it's an amazing feeling. this is our moment. bp is honored to support team usa, and committed to american energy, wherever it comes from.
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look, i'm not crazy about the valuation of twitter. i think we'll get it together. but it's a reminder of just how much more facebook and google are worth. there's always a bull market somewhere, right here on "mad money," i'm jim cramer, i will see you tomorrow. "american greed"... meet the organized-crime gang bent on bringing down the house. they are the tran family, one of america's most successful rings of casino-gambling cheaters, winning hand after hand. >> many times, $30,000 to $90,000 a day going out of this casino. >> narrator: they use one of the oldest tricks in the book... >> it looks as though the cards may have been mixed. the cards were not. >> narrator: ...with a high-tech twist. >> the person is speaking into a microphone that has been wrapped around their neck. and what that person's communicating is the order of cards. >> narrator: and at each casino they hit, corrupted dealers are willing to play along.
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