lower. >> that faux sausage. this is guy's quote, it felt like sausage. >> put that in your book. gm traded well today. i like gm. >> i'm melissa lee. thank you for for more fast. meantime, "mad money" with jim cramer starts right now. 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. and 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 funds, just trying to make you a little money. my job is not just to entertain you, but to educate you, so call me at 1-800-743-cnbc, or tweet me @jimcramer. now declining less than a point, s&p dropping, nasdaq plunging 0.91%. i think it's time to reflect on the virtue of falling prices. falling prices. and what they can mean for you

individual investors, because i think they're opportunities. we've heard a lot lately about the tax on the high-frequence traders place on the market, with the run-ahead tactics, taking your stock, marking it up, and selling it back to you. i've compared these parasites to mosquitos, which i thought was toxic enough. thank heavens someone from the brokage industry has final taken up the torch, none other than charles schwab, who seized my mosquito insinuation and raises it, by calling high-frequency trading a cancer on the system, that's abedded by hungry and greedy stock exchanges. i applaud his interest in the debate and hope others follow. i certainly don't mean to diminish the arguments against the pickpockets, which is what schwab calls them, but i want to talk about making some dollars now, not losing fractions of pennies to manipulation. i want to talk about opportunities that develop when a vacuum of buy owners occurs, not just the ephemeral orders of high-frequence trace, but actually real, giant orders, when some short-term news occurs that drives down a stock that

you don't own. what got me started on this thought is the bizarre trading in the stock of a company i like very much, monsanto. the biologically engineered seed company. in last week's game plan, i told you one of the most reliable trades i can think of is the instant decline in monsanto's stock after it reports. i said the company's cautionary statements on its conference call often turn owners into sellers and you have to use their quarterly panic, yes, quarterly, to buy the weakness. sure enough, monsanto opens and then immediately trades down. continues to cascade until about midafternoon, when the usual opportunists then come in. well aware of the pattern and then they scoop the stock up. monsanto then just ended up rallying the bell, actually did finish up. and again, not an unusual occurrence for this misunderstood company. where i always tell you, put that order in there, take that ride, okay? today, the stock quoted an

important upgrade. really important one from j.p. organ. jpmorgan noted that the commodity prices have improved from the seed business. something that's so important that farmers are going to use more of monsanto seeds to do some planting. plus, and i quote, we think there is a reasonable possibility of an activist appearance. the stock does nothing for a couple of months and that's what happened. the stock ended up closing up $2.64 on a very ho hum day. let's think about this arc we got with monsanto. a high-quality company like monsanto reports a very good number. no one disputes that. it's cautious, though, in the face of what's an actual improving backdrop, again, undisputed. it takes a few hours, but buyers figure this all out, that it's an underpromise, overdeliver situation, and they take advantage of the price break. and they get into the stock, only to be greeted with what i would regard as one of the more

predictable upgrades given this improving backdrop. the possibility of an activist making an appearance only confirms the undervaluation of this company, consider it a cherry on top. as much as i like monsanto, that is not the point of this exercise, because now that's already happened. instead, the need to get a better entry point to buy a stock that you like. and demonstrate that the market does give you real sales, sales that aren't blunted by the cancerous tax of high-frequency trading. i don't want that to blind us to opportunity. i don't want you to hear it's rigged and not take advantage of the next monsanto. of course, the monsanto example is extreme. the whole cycle took less than a full session. but we've got a host of examples where the exact same thing has occurred, and you simply had to take advantage of the declines and do some buying. so how do you know if it's worth pulling the trigger? i mean, we can't just say, oh, a stock's down. that doesn't make sense. but i do have one way that i think can truly help you identify these potentially positive situations.

the ceo him or herself. is that chief executive officer bankable? someone that can be relied upon to get the train back on track? >> all aboard! >> if so, you've been given a rare opportunity to get on board, one that you need to seize. this is not a shot in the dark, nor is it a needle in a haystack. right now we're about to journey into the post treacherous part of the year, earnings season. >> sell, sell, sell! >> we will be rife with the monsantos by the hour. at times like that, when confusion reins, you need to be ready for these buyable pullbacks. remember, as i trace out in "get rich carefully," when i detail the 20 most bankable ceos you should invest with on any price break, there are opportunities galore. you just need to think of these ceos as nfl coaches who may have lost a game, maybe two, but the great ones bounce back. last quarter, for example, we saw some serious declines in ppg and eaton, coached by chuck bunch and sandy butler.

eaton's cutler gave us an miss. both were tossed into the wastebasket, but then both started to roar and now the declines are distant blips on the charts, well below the current price. now we're in a what have you done for me lately market. and i always say those opportunities while emblematic of what may happen, don't help you make money now. but listen up. there's currently a discount, a couple of discounts i want you to consider right now, tomorrow morning. first, consider another bankable 21 ceo, manny treeco of pvh. we know that pvh has been derailed by the purchase of warnerco, which initially looked to be the son of tommy hilfiger, which created multiple-year upsides for those who owned pvh. warnerco did the opposite and the stock came down precipitously. but a couple of weeks ago, pvh

laid out a multi-year vision that's now within their grasp. and even though the stocks had a quick seven-point run from the bottom, i think the opportunity here is still alive and well. here's another, nike. this stock, which my charitable trust has been buying, reminds me of ppg's arc to higher prices. the stock rallied from $79 to $82 in after-hours trading when the release came out. i told you never to trade on after-hours, but people did. sure enough, management shaved down expectations during the conference call and that shaved nine points from that pinnacle after-hours. nine points! talk about extreme. nike's working its way back now, but not so fast that you've missed the opportunity. here's the bottom line. we can wring our hands about the fractions of pennies being pickpocketed from the big pension funds and mutual funds that are the repository of so many retirement funds by the high-frequency mosquitos. but we can more than make up for those pennies, by taking advantage of discounts presented by rare quarters and conservative views of the future from high-quality companies.

those opportunities trump the work of the pickpockets any days of the week. let's go to les in north carolina. les? >> caller: yes, this stock has been going up for the past few weeks. however, it took a big hit today. what's your take on lo? >> i was angry at myself that i missed this. i wanted very much to talk about it. you know we've been focused on smokeless tobacco stocks and this is one of it. i think this stock should be bought when it yield 5%, it's at 4.70, which means it has to go down. mark? >> boo-yah, friend. >> we like the eagleford, we like the permian, we like eog. how can i help? >> caller: i have some pepsico and have had it for about a year, and have noticed they've been on a downward trend, or, you know, even. and i've noticed that you've

been keeping coke pretty much showing it as a steady incline. should i get out of pepsi and get into coke? >> i would like to see you in white way, because i believe in plant-based beverages. i think that they are doing much better than either one of those carbonated soda companies. of course, pepsico does have frito lay with it. i don't want to own those companies, i want to own white way. i want natural and organic, okay km that's what you need to be in. all right, people, listen to me. you are getting your pockets picked by a bugs, but there are still opportunities there. and i will help. also, please, don't forget about the nca tournament coming up. yes, the tournament here, my bracket could make you some real bucks. it's a face-off between two of the market's highest fliers ever and it's coming right up. >> announcer: coming up, full coverage? big wall street firms are calling for insurance giant aig to double.

but the stock's been flat so far this year. as the economy continues to recover, will the company's $100 billion plus portfolio help the stock soar? stock soar? don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to mad money@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com.

on a soggy day like this one, you should always have something you can fall back on. in "get rich carefully," i give you a list of 21 bankable ceos who have delivered year after year after year. and when things get ugly, you can always circle back to the companies run by these terrific chief executives. take aig run by bob mow shay. when i say he's bankable, i mean he's transformed aig from a broken business dependent on a ridiculous amount of government life-support during the great recession, of course, into an insurance powerhouse that's given us some tremendous gains.

stocks have been stalled as of late. let's not forget it's given you a terrific 59% gain since we last spoke to the ceo back roughly 17 months ago. and i think aig has a lot more room to run, particularly if you believe janet yellen. see, a stronger economy means higher interest rates. that's terrific for property, casualty, and life insurance company like aig. why should aig benefit so much for higher rates? simple. the real profit driver is not the premiums you pay aig for insurance, it's how they invest the premiums in between the time you pay them and the company may or may not have to pay you for any claims. they can get a much better returns when they invest your premiums in longer term bonds. a very smart note this morning saying they believe aig's valuation can double over time. the thesis is aig is a high-quality global franchise and they have the earnings, which were terrific the last time the company reported back in february, will keep recovering very nicely. and the stock is still selling

at an astounding 75% of its book value. that makes it insanely cheap. i can't argue with that logic. let's check in with bob benmosche, the president and ceo of aig. welcome back to "mad money". >> good to see you. >> you've bought back. you have done a lot of things that have really returned capital shareholder. how come the stock still trades at such a discount to book? >> first of all, you have the whole issue of the federal reserve, and stress testing, and so there's a concern about will we be allowed to buy back shares? we feel as we go forward, we're putting a lot of energy into getting our stress testing right. >> okay. however, the marketplace won't see that until the first quarter of 2015. and so they're watching what happened. we did announce a dividend. we announced some a share buyback. they want to see how the rest of the year proceeds. a little nervous about that. and i think that's holding us back a little bit. >> let's talk about the little

nervous. because i have -- i'm involved, right now, in getting a policy, property, casualty. and i'm amazed that there's guys willing to play, there's guys willing to discount. i don't remember that in the old days. it seems like cutting in that property and casualty business. >> there's always been price cutting, depending on who you are and what you are. but keep in mind, this is not a commodity. >> okay. >> you're buying a company and you're buying props ining promi. we had a wonderful presenter for our top 200 people in new orleans. she was a client during katrina. and she talked about how she was restored by aig rapidly and she talked about a lot of her friends who got cheaper insurance, that weren't restored so fast. so we deal very well with the upscale market place. we pay our claims and we work hard to do that. we did that in sandy. altogether, between individuals like yourself, a little upscale, and so we want your business, so i should get an order form for the business, but also, when you

pay out $2.1 billion in claims, that's what a company stands for. so, yeah, price cutting is going to be there, but people buy us more than just our commodity. you know, why did 98% of the fortune 500s stay with us through this crisis? they told me, the quality of our people. >> and they stay. you kept them. >> so you're paying for our people, our skills, and our expertise as well. >> okay, now, did i pay for skills and expertise during the storms of the last couple of months, which were probably not in anybody's forecast? >> well, the people who got claims are very happy they had aig as an insurance company. >> all right, now, when i look at what i -- the expenses, you have cut out a lot of expenses. and yet, you still think that there's something to take out here? >> well, there's not -- there's a question of expenses and what you're spending it for. >> okay. >> we're building a world-class technology platform, we're building world class systems, because one of the things that happened to one of the banks was, it wasn't that they didn't

meet the number, but it was the way they run and operate their risk management and their systems. we are investing heavily to build very world-class systems, so when the fed comes in and says, can you buy back shares, and do you have enough capital, can they rely on the process we use to determine the numbers? and so, that's a huge investment going on. over time, that investment will get done. >> in the case of a city that did not succeed, you know, people say, that controls, and i've always felt controls form technology. i felt that was people, the way that jamie dimon had to add so many compliance people. are you telling me that technology is as important or more important than people who do compliance? >> you need to have people. and look, any company, what makes us great are our people. but in the end, when you're doing stress testing, you have to show that you have a technology that's able to project into the future, quality systems that have quality data. so that as you make an assumption that when the markets

come down, when credit spreads widen, when unemployment goes up and you hit a natural disaster, that you have done the right analysis of your numbers, and it's technology based. so, you know, you've got to be careful you're not too people intensive, because i hate to say it, sometimes you go out and hire a great technician and one of our training people from the outside talked about it. and instead of the technician showing up, a human being shows up. >> fair enough. >> and you have to deal with that person. >> a huge percentage of our conversation just now still involves the government. i see that you're having to sue the insurance commissioner who's trying to get you -- a new york state insurance commissioner is trying to regulate foreign insurance, which to me seems wrong, but the government is just in your face, all the time, still, bob. >> but we're a regulated business. >> that's true. >> and like it or not, one of the things i worry about is insurance companies, while they don't have government guarantees, we have to make promises into the future and we have to live up to them.

and you can see when insurance companies fails, what it does to a family down the road. and so, regulators want to make sure we're running our companies the right way, so that we're here to deliver on our promise. >> and the last conference call, i liked a lot of what i heard, your alternative returns were really good. your -- the non-agency mortgage bonds were good. is that continuing? >> that's -- right now the markets for us, we think, are doing well, continue to do well. you'll have a little bit of widening, a little bit of tightening, but i think overall, i think you see a good recovery in the housing market. you'll see a good recovery in the houses that survive the crisis, the mortgages that survive the crisis. so my sense is, if rates continue to stay low in here, we're going to see the pattern that we've seen. >> and if rates get a little bit of inflection, good for you. >> the markets could be a little bit off. you have mark to market and the actual accretion, to what i call, you know, expected. and so you have par, you have what you expect to be there, so

i think, in the end, if everybody pays the way we think we're going to be, there'll be market-to-market fluctuations, but we'll get the money i think we're going to get. >> and i want to thank you, because you paid back everything we always heard would never get paid back, and the people thank you for what you did, which was not cause the biggest black hole in federal history, though some felt that had to be the case. that's bob benmosche, president and ceo of aig. maybe we have to take our time. don't expect a huge buyback right here, but, boy the stock is too cheap to book. the cheapest esest of all the insurance companies that i follow. stay with cramer. >> announcer: coming up, buzzer beater. cramer's money madness tournament continues tonight. the stocks in the tech-heavy nasdaq are facing off, but only one will move on. you may have missed out on buffett's billion-dollar bracket prize, but you may still be able to turn competition into cash eth

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a biotech and a fuel cell play. take me back to 2000, the year 2000, because that was the last time there was such a speculative fervor that produced such amazing returns. but take me back to yesterday, when neighbors, the oil and gas driller, tomahawk tyson, in the spx finals, as we solve the question of who's going to be the best performer for the rest of the year for the first quarter. first, there's no denying that these two do deserve to be winners. intercept started the year at 68 bucks, finished the quarter at $329. gaining 383%. plug power gain at $1.55, charged up to $7.10 by the end of the quarter, that's a 358% gain. if you own them at the beginning of the year and sold nothing, well, then, you know what? i want you to turn me off. put another channel on. because i will have taught you nothing. normally, i would say take out what you put in, play with the house's money, but that's way too much to still play with.

sell three quarters and forget the stock and dream yourself a dream house. buffett should pay you a billion dollars for your brilliant bracketology. but let's deal with the matter at hand. as butch says to the sundance kid, who are these guys? intercept is the reason why i rarely tell you not to speculate in biotech, because i would have never have projected this trajectory when they became public at $15 a chair. it was up 29% in its first day of trading and ran up another 1,600% for a total gain of 2,100%. when you call in on a biotech on this show, and you ask me to opine in the back of my mind, i am always thinking, am i going to keep someone out of the next intercept? this company is an emerging leader in liver disease therapies and its key asset, which is this acid is to treat

primary billary cirrhosis. in dplienglish, it's a chronic r disease that can lead to death. that's the kind of drug that gets fast tracked by the fda, which is why the drug has advanced so much. but intercept is not a one-strike pony. there are other indications for this drug. by the way, the phase ii data is looking very good. soy simpo i simply don't want t think this one is just that one drug and then nothing. in other words, intercept is at the cusp of a major series of approvals. however, $6 billion basically reflects the approval of the first drug and the next one too. plug power provides fuel cells for warehouse equipment. it takes other people's fuel cells, mainly another strong performer of ballard, and intergrates them into forklifts. forklifts are a decent seized market and the company has announced some pretty interesting deals, fedex, walmart, among others, six walmart distribution centers will be using the company's

hydrogen fuel cell solution. the company made an important acquisition just last night, buying fuel cell component company relion for $4 million in stock. it allows plug to makes its own cells and maybe reduces its reliance on ballard. plug needs to keep a positive news flow going, because it is up 3,700 in the last year, 3,700%. now, it is important to recognize that we aren't critiquing the past of this segment. we're handicapping the future. that means we can't consider the runs these stocks have already had, and we can't hold those runs against the winners. so with that, let's put these two companies through the ten-part test for growth from "get rich carefully." question one, is there potential for multi-year growth we can put a value on? clear growth path with long-term visibility and multiple revenue streams? right now, all i can expect from intercept is the approval for that key anti-cirrhosis drug, the short is oca. plug's cover. it's got bookings of $32 million

a year, backlog of $50 million. in california, they're creating a hydrogen corridor with hydrogen stations along the way. plug power in the mix for that one. you have to believe it. and second, you have to believe if walmart announced a deal with this company, others can too. and you have to think there must be something proprietary with the company's technology or why would walmart deal with it. i am going to give this first query to plug power. because i think that the company's stock goes up on press releases. and there is to be really cynical to be about this, a lot of press release sustainability. second, total addressable market, is it big enough to sustain the growth? this is a tough one, because intercept an orphan drug company, so the total addressable market of patients isn't as wide as the price they can charge for product. you've seen what k loose to be outrageous prices for orphan drugs, but cheaper than the way they can handle it.

plug is constrained by its forklift designation. it needs to be more than forklifts to trump intercept in this quarter. it needs to power cars. it doesn't, at least not yet. three, need to stay competitive? i think the potential orphan drug status for intercept ends the competition. that's what the destination is about. i believe that plug could have lots of competition. and in its own filing, it doesn't have a proprietary protection for its product. gave to intercept. can it return capital to shareholders? no chance. five, are there international opportunities? plug is a domestic company. but intercept with an orphan drug approval will be able to sell its product overseas. six, how's the balance sheet? intercept knows debt plug powers very little, but they've done a slew of offerings to raise cash. is the stock expensive? wow, for plug, i am using pure valuation first, and it's the most expensive of the four publicly traded companies in its sector. i think the stock assumes sales growth of 100%, versus 19 to 30% for its peers. a lot has to go right. that worries me.

intercept is not that expensive when you consider the future revenue streams. it's a totally legitimate brokerage house that values the company substantially more than it is. they say it's worth 525. how about management? ceo mark kra sedanski has 15 years in the life sciences business. he's been a venture capitalist and he's been the entrepreneur in resonance at oak investment partners. sometimes you needed to put your personal knowledge to work. i know the oak investment partners very well. and i have to tell you that i think oak is absolutely one of the finest venture firms in the country. you couldn't be the entrepreneur in resonance in oak and not be topnotch. and the ceo of plug power, he wo worked at lucent bell labs, but unlike intercept, this is a company that has promised far more than it delivered. you underpromise power plug and overdeliver. total win by intercept. next up, neither company needs economic growth to make the

numbers. finally, how can the company maintain or grow its gross margins? plug power, i believe, will always be in a dogfight over pricing, until it's more proprietary. but an orphan drug company like intercept is per se granted amazing margins by the government. now, when you add them all up, i think that intercept is a pretty darned interesting company. i would be tempted after this exercise, actually, to play wit, in some deep in the money call options out until year end. but plug power, frankly, i don't care for the story. it's disappointed too many times. i would rather be a seller than a buyer, fearing that it fails to deliver on all those new orders, there's just too much hot money in the darn thing. here's the bottom line. i like biotech, i think intercept's got a real winner on its hands with this chronic liver disease drug. plug's a 16 seed that is bowing out of the final four for right here. on a day when speculators are being slaughtered left and right, i think this one is left to deep falter. intercept wins the nasdaq conference and goes to the finals tomorrow.

elizabeth in florida, elizabeth? >> caller: hi, jim. >> yo yo? >> caller: i have a two-part question about viva systems. >> the stock corrected and and do you feel now is a good time to get in? if not, what multiple should i wait for? >> this one has been breathtaking. there are shorts all over this, leaning on it. they offer very good software as a service, management, we had them on. management solutions for pharma. the company's a $3 billion company. excuse me, however, you have to understand, this is precisely the kind of company that is under attack right here, and i am going to tell you that while i think it can bounce, it is in a world of hurt, and the shareholders have got to be among the worst i've ever seen. so what we're going to do, we're going to hold off, and if it rallies, we'll have to lighten up. there's just too many bears pushing this one down. it's too painful to own. max in new york. max? >> caller: boo-yah, jim. >> boo-yah, max. >> caller: so i'm a newtime

investor and i'm wondering what stocks i should be looking at. max, a big boo-yah ya, jimmy. this is mark, max's father. we're looking at urban outfitters. >> that stock has been creeping back up, slowly, step by step, inch by inch, slowly, urban goes higher. i happen to think that urban is undervalued. if they get the core business right, then you'll see how good anthropology is doing. i want to own urban. i think the stock can go through the 40s. game on! intercept beats plug at the buzzer! it's the winner of the nas conference. tomorrow, they play the s&p winner, nbr, in the finals. who the heck would ever want to miss this one? stay with cramer!

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the "lightning round" on cramer's "mad money." rapid-fire calls, where i don't know the name of the callers or the stocks ahead of time. when my staff plays this sound, then the "lightning round" is over. are you ready, skee-daddy. time for the "lightning round" on cramer's "mad money." let's start with mickey in massachusetts. mickey? >> caller: hi, jim. >> yo yo. >> caller: my husband and i are regular viewers and we enjoy your books. >> thank you. >> caller: and i'm calling today to get your opinion on suncorp energy. >> i like sun corp. i like the oil sands. i like canada. stock's back in favor. it's going to go higher. that oil will be sent to china if weapon don't use it here. let's go to seth in minnesota. seth? >> caller: hey, jim, how you doing? >> not bad, seth, how about you? >> caller: i'm doing good, i'm doing good. my question for you is about sun caller. about january of last year, i got it a little less than $8 a share, now they're somewhere around -- >> well, you've done well, you've done well. but let's make it real, real clear what i like in this show.

i am a first solar believer pb that last analyst meeting was spectacular. joyce in texas. joyce? hey, joyce. >> caller: hi, jim. thanks for taking my call. i was instructed to talk quick. >> okay. >> caller: the stock that i'm interested is cdi. >> chicago bridge, we sold that stock to students, it's been a monster. i like infrastructure. goes higher. bob in rhode island, bob? >> caller: yes, jim, how are you? >> caller: h >> how are you, bob? >> caller: good. >> i was instructed to go fast. >> how about jbl. >> no, used to be good. sell it. charlie in maryland. >> caller: hey, jim, thanks for taking my call. look, i had my hour and my wife in money markets. they weren't doing anything, i so converted it to a self-directed ira i'm most involved in lng and it's made a ton of money.

>> it's recommended at $8. i have to be honest. i've been one of the biggest backers of cheniere energy that's been possible. credit suisse did downgrade the stock saying buy to hold, it's come up. i'm a little more in the credit suisse camp because this one's come up too much. frankly, it's too high. hey, let's go to mike in massachusetts. michael? >> caller: hi, jim. i want to start off by saying a big boo-yah from boston, the city of champions. >> it is actually a city of champions. i have to accept that. >> caller: my question is about priceline. why has it been -- >> priceline is all over the map. let's go long-term. let's not think about short-term. that is part of the new frugality. people like to order tickets on priceline, it saves them money. that's what people want. i like priceline. i think it only goes higher. and that, ladies and gentlemen, is the conclusion of the "lightning round"! >> announcer: the "lightning round" is sponsored by td ameritrade. coming up, tax torture.

it's that time of year again. and as we inch closer to the deadline, you may be thinking about shuffling up your investments. stop trading and listen up. cramer's got critical advice you need to hear before you settle up with uncle sam. became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade.

every week, now, i take a step back and try to focus on the big-picture issues involving managing your own money, with my playbook. this is where we talk about personal finance and general investing 101 questions that i know so many of you have. because nobody tries to teach this stuff here in america. if you've got a question, then go right ahead and ask me on twitter @jimcramer, #getaplan. don't forget to check out your m yourmoney.cnbc.com for more information. with april 15th a few weeks around the corner, it's time we have a chat about one of those thing unavoidable in life, and i don't want mean death. something that's much worse than death. taxes. i've been getting so many questions about this, like this one, she's asking, aren't the

dividends paid out also taxed at income level rather than the dividend rate of 20%. so let's go taxes. this year whether you fill out your tax returns on your own or have a professional do it, and honestly, the more complicated it is, i suggest you go to a pro either way, you might notice that your long-term capital gains and dividend taxes have gone up. capital gains issue has troubled investors for ages. you buy a stock and sell it less than a year later, your profits count as a short-term capital gain and they get taxed at the ordinary income tax rate, which can be as high as 39.6%. and thank you, mr. president, for bringing that top rate back, and i mean that insincerely as possible. however, if you hold on to a stock for more than a year and sell it, suddenly your profit magically becomes a long-term capital gain in the eyes of the irs, and even under the new rules, the long-term capital gain rate is 15% for most people. although if you're in the higher tax brackets, that becomes 20%,

still much cheaper than the 39.6% rate you might be paying on capital gains. and for those of you in the top three tax brackets, there's a 3.8% surtax you have to pay on your net investment income or your modified adjusted gross income, which means the actual long-term capital gains rate may be 28.3% in most cases. so here's the real issue. when many of you look over your taxes and see how much more you're paying for short-term money you've made in less than a year, i know you'll be kicking yourselves and saying, how could i be that stupid?! it's, well, if i just held the darn things for over a year, i would be in tax heaven with those still super-low long-term capital gains rates. and that's a problem. all else equal, i think it's a very bad idea to let tax planning have too much control over your portfolio. just think about this, okay? this is a perfect example.

imagine you owned all those bioteches in cloud-based softwares and service stocks that were red hot in 2013. let's say you owned them for the last nine months and decided, these gains are so huge, i don't want have to pay the tax man that horrible short-term capital gains rate. if i just hold them for a little bit longer, so the holding period is over a year, maybe i'll be in the clear. my tax bill will be nearly cut in half, thanks to the wonder of the long-term capital gains rate, that gift from the government. in other words, suppose you let tax planning drive your decision to, your actual stock decisions of buy and sell, when it comes to the established cloud names over the last three months. remember these stocks, once red hot in 2013, have been hammered since the beginning of 2014. the gain s have evaporated at breakneck piece. let's talk about a cybersecurity company, fire eye. a month ago, it traded 97, now it's at 54. slightly lower than where it

closed the first day of the year. if you held on to that stock, you have now round tripped it and have no gain at all. now you may not have to pay any tax on fire eye whatsoever, but that's because you may be turning a winner into a loser and pay no taxes on losers. when you have losers, they offset the gains for your winners. but given if it's already april, if you didn't do your tax loss selling at the end of the year, it's too late to do anything about it now. but we may circle back to this subject in december, because people love this get a plan stuff so much. i'm not saying you'll ever give up your gains every time -- you'll give up gains every time you decide to hold on to a stock for tax reasons, that would be extreme. but i am saying you should never keep holding a stock so you can avoid paying the higher short-term capital gains rate. that's not because i have a problem with tax avoidance, tax avoidance is great. you should avoid all the taxes you can legally get away with not paying. that's your right as an american. it's tax evasion that's illegal. the reason you shouldn't keep holding a stock for over a year to get that lower tax bill, because it might condone bad

informs i investing. you don't keep owning stocks solely to futz around with your investing. that's why when it comes to investing, i've had one simple rule since i started in this business, it's okay to pay the taxes, you don't have to like it, but you might have to accept it. whenever you make money, the government's going to take its cut. that's just how it works. but you really shouldn't let these tax considerations drive your investment decisions. it's hard enough just to do your homework on the companies you own, to keep track of what's happening with the underline business, by reading the quarterly conference call transcripts, the s.e.c. filings, and consider how the overall economic backdrop is affecting the company's sector, and looking at the stock's valuation to see if it's cheap or expensive versus the competition in the sector. you don't need to add another step to the whole process, how many more months do i need to hold the thing to get that lower capital gains rate? of course, if you've owned a stock for 364 days and decide to sell it, there's no more harm in waiting a couple more days and

cut the capital gains tax in half. but unless you're right on threshold, tax gains shouldn't be a factor. i know this is a very unorthodox view, but sometimes you're coming to me for a feud on what everyone else thinks. if you think a stock is a sell now, you should sell it in the near future. you shouldn't wait months and months and sell it at the most opportune time for your tax bill. if you think something should be sold, don't ride the darn thing down. ride the register and to heck with the taxes. there's a lot you can do to minimize the damage uncle sam does to you on tax day. take every deduction you can legally get away with. but don't let the difference between short-term and long-term capital gains rates drive what should be an investment, not a tax avoidance strategy. when you're investing in stocks, just tell yourself way used to tell myself at my old hedge fund. it's okay to pay the tax man, it's a sin to give up your gains. stick with cramer. th cramer.

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today, they simply took out the expensive stocks, the software the service cloud names, the internet pure plays, the mobile and social stocks and the biotechs, lining them up against the wall, and massacred them. i think they used .50-caliber ammo and shot them in the forehead individually jou lly j make sure the job was done.

no walking dead among these stocks. how can they give up so much in one session? let's examine now two non-walking dead names, the aforementioned the fire eye, down $6.63 just today, and splunk, off $4.76, which amazing amazingly, weren't even the big kes percentage decliners in the stock market. fire eye might as well be the exact same company. since 2014 began, fire eye is now round trip, going from $57 at the end of the first day of the year to $96 in the first week of march and now back to 54 bucks. splunk started the year at $69, rallied to $96, last week of february, and is now at $66. it's another round trip. what happened to move both stocks higher and push them off a cliff? the fundamentals don't clarify a thing, at least if you're a growth manager. they both reported phenomenal sales. plunk growing revenues of 53%. fire eye giving you an 81% sales

increase. these results were nothing short of spectacular. and no one can doubt that these are two of the fastest-growing companies in the universe, growing two huge secular growth themes. what happened to their stocks. take a look at the chart of fire eye, less than a month ago, when fire eye was flying high after its blowout quarter, insiders shared 14 million shares for sale, close to its all-time high, and ultimately the block traded all the way down at 82, okay? down 14 from the high. but an amazing 25 points above where it is now. i mean, it's crazy. fire eye stocks couldn't withstand that onslaught. it's now $54. how about splunk? when checked around, i couldn't find anything i could pin the decline on, other than an overall revulsion to tech stocks. recently, i saw a wave of insider selling and a mysterious large block of merchandise that hung over the stock. this block traded at $70, down some 20 points from its high. these secondaries and mystery blocks have become hot potatoes that no one seems to want to own.

i think this kind of selling is what's really killing these unseasoned stocks. i'm not kidding. i think it's the sellers themselves. these stocks went up a great deal on very small supply. they're not going to announce buybacks or dividends now to cushion the fall. there's no floor that i can necessarily see. they will, most likely, just give you more growth. but will that turn these stocks around, more growth? or will more growth just bring out more insiders who want to cash in on that growth? and given that there's a ready, new supply of ipos in the space, and more some tonight, why not ring the register ton these two and go home. it's not like they're cheap. they were never cheap. now, compare these two stocks with the industrials that are flying right now. they're the polar opposite of splunk and fireeye. seasoned companies that tend to have good dividends, good buybacks, and solid shareholder bases, with very little insider selling, very little huge insider stock to begin with. the industrials are so easy to own. but by comparison, splunk and fire eye and their ilk seem downright impossible to own.

and alas, that's exactly the comparison so many investors are making. stick with cramer.

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people expect that it's very strong, which is why all the software and service cloud and biotech names were down so much. i don't know. lack for those to repeat if it is a strong number. i like to say, there's always a bull market somewhere. i promise to try to find it just for you here on "mad money". i'm jim cramer and i will see you tomorrow! i meet michael and tina sena... >> three, one, three. >> experienced trainers who own a fitness studio. >> chest up. atta boy! >> the instruction is first-rate. >> nice, high thighs. >> but the business? well, that needs to be whipped into shape. you're not focusing on everything over here. >> i'm telling you, i did what i thought i could do. >> michael refuses to bring in workout equipment... >> i just don't want to be like every other gym. >> i wouldn't work out there. which holds back membership. >> i may challenge him. >> what we're doing isn't working. >> that's such crap, and you know it. >> but it's his ego that may ultimately bring down this business... >> nobody would recognize her name. they would recognize my name first. >> and possibly even his relationship. >> since we got married, you're always worried about your own identity. >> but everybody has their own identity. >> if