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tv   Mad Money  CNBC  April 15, 2014 6:00pm-7:01pm EDT

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you. facebook. i love the way it traded. the fact that it reverses interesting. fb. >> tomorrow for more fast. "mad money" 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 camer qaa. my job is not just to entertain you, but to educate you so call me at 1-800-743-cnbc or tweet me @jimcramer. you want the two best words to describe this market? how about fear and loathing?
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[ booing ] >> you have to resurrect the words of the consummate stock genius, hunter s. thompson. the truly fathomed the depths of derision, professional money managers feel toward this market. the freight and the hate defined this darn tape even today where we ultimately rally with the dow climbing 89 points. s&p gaining .68% and the nasdaq advancing .9% and the bullish big boys run scared. so what do the pros fear? i think they actually fear four things. the first is japan. we don't talk enough about japan on this network and me personally because, frankly, what's happening there i regard it downright scary. the land of the rising sun is what looks like a failed strategy to get some sort of boom going. the japanese stock market is
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down 14% this year, by far the worst major market in the world. did you know that? country's retail sales have pummelled and pummeled. they plummeted after a recent hike in taxes, and the japan's inflation which seems comatose and is not responding to any meds. second, there's china. i kept thinking there had to be a way for the chinese estimates to be lowered so much that they could at last be beaten like an underpromised, overdelivered kind of thing, but no matter how low the estimateses go for purchase managing reports and no matter how they're slashed for imports, exports or money supply data, the actual numbers still disappoint. i think china's growth at one time in double digits is now falling from 7% to 5%. i know. i know. most countries would kill for that kind of growth, but in china they might kill their leaders if their growth trajectory keeps slowing. never forget, it's not earnings
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per share or gdp that they're worried about and it's a revolution and they're not reassuring for the long-term picture in china. third, there's ukraine. i think this issue is at the fulcrum of whats any wrong these days each though it seems to be side lined periodically. every time there's a provocation by russia, we sell off. every time. some of that is the knee-jerk following of the sell-off in europe and we worry about sanks that can be put on russia and we could be worried about sanctions in europe and no gas or oil coming to western europe, but you know what? that's all small change because if you live in europe you're only thinking of one thing. if putin doesn't stop invading the west, don't laugh. it's what they really worry about. you'd worry, too, if you lived next door to a country whose leader seems to be borrowing too freely from the nazi germany playbook. hitler created provocations everywhere and told the west
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they were simply protecting ethnic germans all over the place, czechoslovakia, poland, austria and to do so they had to annex those countries. think about it. isn't that exactly what putin is doing in ukraine? he's not hitler. they haven't taken a coherent stand again him. you can see the fear reflected in the bond market much of which i believe is russian which brings me to the final fear, u.s. bonds themselves. right now you can chart this market by looking at the tft, the etf this mirrors long-term treasurys meaning bond prices are going higher and interest rates are going lower and professionals fear this decline for all sorts of reasons. one is that it shouldn't be happening at all. we've had strong retail sales, strong employment numbers and companies that reported, even tonight and yes, even strong inflation that we have inflation numbers. ordinarily all of those things should be higher bond yields are coming, not lowerer ones. the professionals live in fear
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of the bond market now and every tickdown in rates which means higher prices for the tlt send shivers down their spines. it's a sign that something truly is very wrong and that makes these big money managers so nervous that every time the market sells off they stop it furiously, but no one's saying the selling's gone away and if the tlt stops rallying as the stock market -- as what happened the stock market goes higher and that's what caused the rally in the afternoon. the bond market going lower and interest rates are going higher. again, that is entirely counterintuitive. every since the bull market began in 1981 every time the rates went down it was considered positive and it was considered a buying opportunity for stocks. any time rates went up you were supposed to sell stocks. this pattern is so ingrained that when rates shot up last year the stock market was just crushed. so i don't know a soul who can explain coherently why for the first time in 34 years the stock market actually hoping for
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higher interest rates. people always fear the unknown and this new linkage where stocks and rates move in tandem, well, it's pretty terrifying. since we've never seen anything like it before, plus there are all these idea logs running around that the fed is propping up this market with the bond. that's just dead wrong. the fed can sell a trillion dollars worth of bonds tomorrow morning right in line, that's how much demand there is rightly or wrongly which brings me why the chief reason why the market is loathed. when rates go down you're supposed to buy the highest growth stocks because lower rates mean sluggish economic growth while companies do best in that environment, what are you supposed to buy and what does the handbook say? what about the biotech and high cohorts. what are the worst performers of the biotech down 22% for the year and those darn mobile and social which rally if you're in them, but who knows how long
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that this pattern is so true for so long now is now broken and just makes people angry because they can't believe sellers are in there every day knocking down what history says they should be buying. >> buy, buy, buy. >> sell, sell, sell! >> second hateful subject, the intraday moves. both yesterday and today we saw huge intra-day swings in high tech and biotech. the pattern of up openings followed by vicious swoons that may or may not precede a late-day will rally unnerve people and cause an unprecedented level of loathing. think about it. even morning we start high arer and sellers appear and start pummeling the stocks that history says should go higher. look at twitter and it roars up 11%. the buyers disappear midday. the sellers stupidly get even more aggressive, but then something will happen, and perhaps interest rates reverse intraday and head higher like we saw today and it springs back to life for no real reason at all and investors hate rallies just as much as they hate
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inexplicable sell-offs. so we end up with a market that defines market daily where stocks of companieses that have been left for dead like intel and yahoo are roaring like they did, while stocks with companies with amazing growth prospects get hammered every time they lift their head. each day there's one or two high growth stocks that shock you with the rally while others falter. today it was twitter which we told was important to watch. and work days turned to shine was today. netflix and tesla tomorrow? who knows? unless we see the end of all these counterintuitive patterns, the market will be feared and loathed and not to mention scorned and ignored as it's become too hard for many to fathom. until then the bottom line is that the market becomes one big crap shoot. i have to tell you, if i wanted to play craps i want to do my fear and loathing in las vegas than in wall street. let's go to bob in my home state of pennsylvania. hello, bob. >> hello, how are you? >> fine.
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how are you? >> been watching the show a long time and followed the natural gas plays and base of you i'm in kinder morgan and kmi, specifically and i wanted your opinions on tomorrow and keeping the stock going forward. >> the problem with this company and let me just tell you what people are saying and they're saying it's too big and it can't grow the way it used to and they can't maintain the distributions they used to. i believe in rich kinder. i think the company will be fine and i don't think they need to do equity offerings. how about colin in texas, please? colin. >> boo-yah, jim! >> boo-yah, colin. >> yeah. i'm calling about i particular e. should i continue to hold the stock? >> as long as interest rates keep going lower itc is doing well and it is atypical. i have to tell you, i look at it and i see the little yield and i tell myself if i had some i'd ring the register and half tomorrow. okay. until we revert to the old familiar patterns we're going to keep see this fear and loathing
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pressuring the market, and as always, you and me will get through it together. up, in, it's what google, facebook and yahoo desperately need to do to save this market, but will they do it? last time he was on, "shark tank" damon john set upon a portfolio that's blowing the s&p and let's see what he's got for us now. want to protect yourself from the sell-off? stick around for the tweet because "mad money" will be right back. ♪ ♪ ♪ coming up, profit predator. he smelled blood in the water when apple neared its top and called the decline in blackberry when it failed to wow consumers. want to know what damon john is spotting this time? >> i'm in. >> then stay tuned. don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets.
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send jim an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. [ hypnotist ] you are feeling satisfied
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you know how we solve the flut of new technology stocks? simple, google has to tripadviser. facebook has to yelp. salesforce.com has to acquire cornerstone needs to buy g2 holdings. yahoo! , good quarter ought it acquire opentable. priceline should take over bnb and why don't zillo and trulia merge? amazon could snare grubhub and mcdonald's can capture zoe's kitchen, but of course, i'm being fanciful and facetious because none of these things are going to happen. i know we had a good day today, but as i focus on all these newly public companies and their recently ipo brethren, i think people are missing something big. so many of these companies that
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hit the market would never have come public in the first place if their businesses were that good. that's right. if they're really good they should have been acquired before they had a chance to come public. the fact that they weren't and i'm looking at the crop in the last six months. that's a sign that the real economy didn't value them as much as the public markets. that someone like adam and the hard-charging ceo of the cornerstone and demand and the brilliant boss of work day didn't buy the human cloud plays that came public and the always-inquisitive sales force.com before they hit the public market tells you these newly public companies simply aren't as good as the myriad positive analysts seem to think they are. it's like like cornerstone and salesforce.com don't have currencies. they could easily issue the stocks to buy the companies they want and they could have when they were riding higher. think about it. if grub hub wasn't proprietary, wouldn't amazon have made a move
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there? how did they let zoe's come public? did they learn nothing from giving away chipotle? worse, as the seasoned companieses swoon, do you think there's hope that they'll be bought by the big dogs now? it's too high. i like yelp a big deal and i know big companies were interested in buying the yellow pages and google offered half a billion dollars for the darn thing. 500 million. now yelp is at 63 and worth $4.4 billion and still below the market cap when the stock peaked at 101. will anyone acquire them or will anyone merge with them? i don't think so because down here at 3 it's still triple where it was not that long ago. granted many of the online names came back with a vengeance and tripadviser is still down huge, 109 to 83. a year and a half pricelean paid 1. billion for kayache, a tripadviser like company and tripadviser would be a gigantic
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deal and one that i don't think anyone wants to do, but it's too high. fine company, but it's too much to acquire. i think if the $3 billion zillo merges with trulia it would be the number one player pretty much forever. meanwhile, i have to imagine google and facebook believe they can wipe out anyone else in their spaces and yahoo wants to buy up its own shares and not make big acquisitions and i don't see them snapping up the internet plays after they snap up the successful alibaba. they it should make us very concerned especially since facebook was willing to buy something like whatsapp for 19 billion and google has picked up a drone company and i guess they use these deals as a better use of the money than companies that keep going down. how do things get so out of hand? i think it was the twitter deal. the twitter deal truly wrecked the pricing model and you know no public could afford, and
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there was a time when microsoft could have grabbed a darn thing for a tenth of the current value. they made the bankers and insiders giddy. they viewed the public markets would pay anything for the internet companies well beyond the reason of the private markets. ever since then so many of the companies have been at ridiculous, out of reach levels and it is good to see that twitter can actually will rally as it did today. in part i believe because the biggest insiders pledged they wouldn't sell the stock so when the stock flew up you said they're not going dump it. that was the ticket to a $65-cent run and until the overhang from the new highflier companies will keep being a real problem for the market every time it advances like today. when will the smoke clear? that's actually easy. when you see an end to insider selling because the stocks have gotten so low that they'll be taken over and maybe the beginning of the actual insider buy. until then, these pricey stocks will be easily shorted and
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heavily sold by insiders on every lift who know the company should never have gotten where they've gone even as they've come down a great deal from their highs. >> can i go to james in texas, please? james. >> hey, jim, this is james upon. how are you? >> how are you, james. >> a big howdy from san antonio. >> uh-huh. and i basically call youed up i inherited a couple thousand shares of pepsi and i called because i didn't know to diversify it all and you told me to hold onto it, and i held onto it and about a year later the whole market imploded. >> right. >> and i've continued to hold onto it. it's quadrupled in price on my cost basis. i've put it into a drip program. >> good. >> i doubled the amount of shares i've got and you have
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given me the cornerstone for what is now a very, very happy retirement. >> excellent! >> and i real will leo you a lot. >> you don't owe me anything. i'm glad i can help and i have to tell you right now that i think that pepsico -- there are two ways to win pepsico. if they don't do a good number i think peltz steps up and saber rattles and gets the stocks rolling. you have two ways to win. i don't want you to sell a share of pepsico. there's an unhealthy overhang from some new companies that will exist even after today, and until we start seeing deals, it can continue to be a problem for this market. and uh-oh, do you hear that? stick around. this shark is in the building. damon johns swims by -- i'm sorry. damon john will swim bye to stick with cramer. and later, evasive maneuvers. when sell-offs strike.
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do you have the right plan in place. cramer is opening up his playbook and sharing the secrets. cars are driven by people. they're why we innovate. they're who we protect. they're why we make life less complicated. it's about people.
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we are volvo of sweden.
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>> had is a treat. if you want to beat the market you have to pay attention to more than stocks and ceos and publicly held companies. you have to find realec perts on
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subjects that matter to people and that's why you have to listen to them. that's why we're always thrilled to listen to damon john. he's the founder and ceo of fubu, panelist on "shark tank "qwest, shark tank tuesdays on cnbc and not to mention the brand of power. damon john is the king of branding and yes, this is something that can help you make money in the market. back in april 2010 he created the lifestyle brand index force. since then they're 92% and the s&p is up 54% during that period. he came back and updated the lifestyle brand a year ago. his stocks have rallied 34%. s&p up only 18%. that's what i'm talking about. that's bankable. with that in mind, let's bring him on. mr. john, welcome back to "mad money". >> thank you, jim. >> you know what? i want to give you some mission belts from "shark tank," after i wore this i'll never wear it
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again. no hole, it just opens up all of the time and you gave me a lot of great compliments and i'll put it up here to brag. >> i gave you compliments because you made people a lot of money and a lot of people know you from shark tank. >> and it's probably the biggest thing that's been going on here, but i also want to talk about how you knew things and i know i mentioned the index and first i'm going to say if you recall, you told me that you blew me away when you said, you know what? the iphone may not be as hot as samsung. apple was really high and it's come down a lot. is there any chance, just to follow up, is samsung cooler than the iphone? >> samsung is still cooler and samsung is spreading its wings a little and is grabbing enough people. you know what? i call it the say word factor. in my neighborhood you see something astonishing and it's the wild factor and you know the samsung does this -- say word. of course the analytics are all there, and i thank you for my guy, steve garber and andy chu
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who helped me with my brands and i look at the if iz calloway that it's cause the consumers to react i go to the malls. >> you see things. >> i see things, yes. >> let's go back to the big winners. in april 2010 you said underarmour would be the hot one. we didn't think that. it's up 522%. >> is it it still hot? >> smoking. some of the big guys are getting kicked out of the nba and nfl, and they're starting to see everything and you come up as an underarmour individual and they're coming into fashion now and underarmour is still smoking. >> okay. last time you were here, everybody was writing it off and you said facebook. it's now up 100%. >> with a billion friends and that imagery out there and you're becoming, grandma's on facebook, sometimes it's not cool, but at the end of the day you'll be able to sell to everybody. >> that's what matters. you're not satisfied because you never are. you have some new names.
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you talk about, for instance, walgreens. you know they own dwayne reed and the say word factor about walgreens they are beautifully lit. i go in, and i can't help it, right? >> the way they're designing it, it looks like severa for sandwiches. >> yes! >> i'm not going in there for drugs necessarily, drugs, sandwiches, peanuts and that's the case. i go to walgreens, say word, word? i go to walgreens every day. >> he'll listen to that. do we say word, tesla. you know what? let me tell you something about tesla. when you go to the mall, junior goes over to the arcade. mom goes over to sephora. you know where dad wanders? he wanders to tesla and he doesn't wander anywhere else. you look outside the luxury building, they're right in front. i used to give a guy $100 to park my car down in the front. that's a tesla. say word! and you know what they'll do? they're creating a more
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affordable car and that's why tesla is the say word. >> here's a tough one. amazon, sony, crackle and that's not the cereal and that's a new device that sounds hot. >> i'm in these rooms in hollywood and if two years ago you would have said the a-list artist would go on netflix and aol and have a show they would have smacked that manager and i can't walk anywhere without hearing, steve buscemi is on aol, say word. this is the new content that we love. >> okay. i love that. i think they're hot. >> here's one that's interesting because i know that you are with damon john shark associates are getting into what i regard as the cutting edge of real estate. you like wells fargo. obviously, you must see something in them apropos to the work you're doing in inner city real estate. >> here's why i like wells fargo because wells fargo their initiative is entrepreneurship. the reason why people learn from the profit from mad money and
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shark tank is because 50% of the millennials said they would will never work for anybody in their life and now that you have a computer you can any into business for yourself and i think if you're attacking prshship which is what this country was founded off of, but it's red hot. what i want to do with my shark associates is i think magic johnson set the bar really high, and i think that inner cities, i want to create jobs and we have a fund behind us and 500 billion and we have the money behind us to create jobs and bring them to the inner city. maybe the banks don't understand, but i'm your shark. i understand and i want to create jobs and i'm doing it in dallas and i'm doing it in miami and doing it in los angeles. >> two of the companies that have a long-term perspective and short term the stock is choppy are whole foods and starbucks. >> absolutely. they seem to understand your vision. >> they absolutely do. you have a whole foods in brooklyn. you go in there and they work hard and they want to eat healthy and you go into a whole foods, they're becoming a
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restaurant in there. soon i'll be able to get my haircut in the place. they're creating jobs and it's a double bottom line and the same with starbucks. starbucks did that a long time ago with magic. >> with magic. howard schultz always pointses out how proud he is that magic had the vision. >> people work hard and go home and when you work next to me in the empire state building you are used to starbucks and you see whole foods in midtown. when you go home you love that brand, why not buy it again. >> can i say say word about damon john? >> say word. >> that's damon john and you'll be able to see more of him tonight on "shark tank." i hope you got these ideas, because, boy, he's made us fortunes. >> don't jinx me. >> no! said it last time and you're even better this time. >> say word! >> thank you. coming up, evasive maneuvers. a sudden dive into the red doesn't mean you have to sacrifice all your hard-earned greed. tonight, cramer's sharing his secrets on how to avoid some of
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the pain. it's all part of his playbook. >> and later, playing defense. it's time to get ahead of the market's next move. tonight, a stock with medical might that's been immune to the recent weakness. find out if it can be ready to break out when cramer goes "off the charts." tomorrow, kick off the trading day with "squawk on the street." live from post 9 at the nyse. >> are you kidding? >> great stat. that's pretty impressive. >> it all starts at 9:00 a.m. eastern. eastern. [ male announcer ] the wright brothers started in a garage.
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as part of my never-ending quest to teach you everything you need to know about managing your own money, tonight i'll read you another page from my playbook, the segment where i any into personal finance and basic investing i pretty much ignore most of the stuff on pad money and figure i can add more value by focusing on the stock market. that was somewhat of a mistake.
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if you don't have a solid financial foundation then a terrific stock portfolio just ain't going to help you all that much. in short, before i can help you create and maintain a winning portfolio that matters, you need to know the basics as they are. i mean, that's why i take your questions @jimcramer on twitter and use the #getaplan. that's why i'm always telling you to check your money.cnbc.com. tonight we have a question from ab, underscore, prison art and do you use stop loss orders from protect yourself from a major sell-off? mash thatting, get a plan. i don't think regular investors who are at home not watching the market every second, will stop loss orders. it will let you sell a stock and it could be a great tool for profesh investors watching every minute, but that's not how i want you to play the game, people. i don't want to get into the differences between trading and investing where you're looking for real long-term opportunities
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that can can play over time and suffice it to say that i think you home gamers can approach the as investors and not traders. >> let's take a step back because what our tweeter aaron wants to know. how do you protect yourself from the sell-off like the hideous declines not to mention last week from what we saw earlier today. the thing about sell-offs is that they're unavoidable and imagine if you had a stop loss order and at 1:00 today you were blown out and at end of the day you say i did well. that's why i don't want you to do it. whether we're in a bull market or a bear market, we need a sell-off. that's why for those of you trying to build long-term wealth, the trick is not so much to avoid these declines and it's more about how you learn to stop worrying and maybe even love the declines. that's right. it may sound strange to you that someone says you want stocks to go lower especially when that someone is me given that i'm always trying to help you make money and my version of heaven is a world where stock prices never go down. in the real world stocks do go
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lower. i'll never root for you to lose money, however thinking about a sell-off thinking about how much money you can lose, that's drive ayn lot of people out of the market. that's short sided. when the market declines and declines hard, you have to take a step back and tamp down your emotions and recognize it for what it real look is. a sale. i'm always telling you that stocks are like other pieces of purchase, right? let's think about this. if kohl's has a sale on what i'm known for, fat pant, would you run screaming from the sor? if macy's had a sale on pv 8 shirts, would that make you want to sell the other shirts or never wear one again or maybe go nudist or take advantage of the sales and stock up on the purchase that's been marked down. it's a rhetorical question and americans are savvy shoppers. i want you to shop for stock the same way you'd shop for anything at the mall and that means trading a broad, widespread decline as opposed to what you want and you studied. the strategy worked and you've got to be prepared and that's
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why when you start investing you have to make a shopping list, of stocks to buy when they do get cheaper. when they do, you pull the trigger. a big decline is not just an opportunity to buy high-quality stocks on the cheap. if you lose stocks, you lose when the market goes down. it may put you in a position to make nice profits down the road, but that's what we do for my charitable trust, but it doesn't do anything to contain the near-term losses from the sell-off. as you've seen lately the sell-offs can be brutal in the portfolio especially if you own the stocks in the wrong moment. let's say you shouldn't avoid the pain of an oncoming decline. flipping in and out of your positions doesn't work. it takes a lot of time and a lot of attention and even then when they don't work, they end very quickly witha i whoosh bottom and sends stocks higher all over again and there's no guarantee you'll sell everything and get back in, think, if the financial world is coming to an end and the sky is falling i'll tell you
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like i did in the fall of 2008 because in those rare cases there's nothing wrong with selling anything, but that's the exception and that's something that will not happen more than once, maybe twice every decade. the rule is when the sell-off comes you just have to take the pain, but two things that are can make the pain easier. i'm always hammering this idea home and that's because it's the biggest money safer out there. as long as you make sure no one sector makes up 20% of your portfolio then you can contain the losses. think about it, this market is textbook for why you need that and suppose you had cloud-based software with the service technology names and when they're hot, you should be so happy. well, in that case this recent sell-off would have ripped your portfolio's heart out and eaten it right in front of your face. how about indiana jones and the temple of doom? but if you were diversified and if you didn't own too much biotech or cloud-based software you would protected from the worst brunt of the sell-off then they would have reached in and grabbed your heart. remember that? i always thought it was ready.
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i said this before, and it bears repeating. cash that will take advantage of the moments of weakness and having able to buy the decline you'll be ready for a pullback then. i had a lot of thoughts of the question in jim cramer's stay bad for life. here's the bottom line. just because the stock is down doesn't mean it deserves to be sold and remember that sell-offs are indeed unavoidable. as long as you have a decent cash portfolio and the stocks to buy on the weakness, when the decline is done, you'll be able to come out on the other side stronger than ever. "mad money" is back after the break. ♪ ♪ ♪
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cramer and your staff. >> thank you, sir. >> i'd like to know more about linkedin. >> linkedin i was too bullish in and i was bullish the whole way and i should have said sell it in the low 200s and now if the stock bounces back there. >> sell, sell, sell! >> and i do think if we get the nasdaq bounce that people are looking for. how about antonio in new jersey? antonio. >> antonio from big boo-yah from my kids anthony, and juliana. >> ocean grove boo-yah and tell you to buy stocks too far from its high. i like the stock. i'm not distressed by the chart. let's go to ron in florida. ron? >> this is ron in sunny fort meyers, florida, and and teva. is it 2 or 11? when you look at insider reports they don't show it, is that because it's a foreign company? and then the last question is should i sell and take profits?
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i bought at 38 or should i hold for better days? >> i want you to sell half of the p-e multiples at 11 and i don't know exactly why you're not getting it. that's what it is and i'm no longer worried about the situation. george in virginia. george? >> hi. it's great to talk to you. i have a question about foreman. >> fire away. i'm your man. >> first thing i want to know about what do you think of it as a long-term investment? second thing, is what do you think of their potential buying out that french company --? okay. i don't think they're going to get a bid. i do think that independently it can go much higher because it's a company that's doing incredibly well and i'm doing it in the fundamentals. let's go to matt. >> boo-yah from fort meyers. >> fort meyers, south florida and we're stuck in cold, wet new jersey. how can i help? >> all right. looking at dexcom, man.
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when is that going back to $50? >> everyone doubted me when i said i liked st. jude's. everyone doubt mead when i said i liked boston scientific and now they doubted me on the incredible edwards life science and i'm saying dexcom is okay. rich in virginia. rich? >> hi, jim. love your show. love your book? thank you, han. thank you. >> delta air lines. is now a good time to get into it? >> i love that the stock clie declined 18%. i think oil can peak and if it does, it can go forward. >> i need brian in california. >> jim, boo-yah to you. >> right back at you. >> i wondered what your thoughts are on colony financial. >> colony financial is one of these companies that does a lot of stuff that i don't necessarily am privy to what they own, but i will tell you this, it's run by tom barrack and tom barrack has money and i'm going to recommend the stock. let's go to brian in nevada. brian? >> hi, jim.
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how are you doing? >> i'm doing pretty good. how about you, brian? >> i just want your opinion on arna, arena pharmaceuticals. >> no. >> don't buy! don't buy! >> people were furious at me on twitter. those that continue to be furious at me on twitter, go ahead, make my day. and that, ladies and gentlemen, is the conclusion of the lightning round! >> the lightning round is sponsored by t.d. ameritrade. ri♪ 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.
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for those of you who have gotten sick and tired of these gut-wrenching seesaw-like moves how about we take a closer look at the stocks that have been doing a pretty good job of hanging in there lately? what's been holding up? among other things we've seen an incredible thirst for yield out well and that's the companies with consistent companies like dividends. the big pharma titan with the bountiful 3.51% yield and it's up more than 10% year to date. can merck continue to thrive? should they go off the charts to answer that question? he's a brilliant chartist and one of the founder and senior strategists at --.net and the trifecta stocks newsletter. they only recommend names that look good from a quantitative perspective and a fundamental perspective. if they don't have three they don't get behind it. lately they've gotten behind merck in a pretty big way.
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what's so attractive about merck? check out this daily chart. first of all, langdon likes that merck has proven itself to be virtually immune to the volatility in the broader market. look at the recent akd here. ever since the beginning of march, merck has been trading sideways and float along as they jerk violently up and down at a time when the day to kay movement has been exciting to say the least, merck gives you the ho-hum boredom that i'm sure many of you crave baz boredom lets you secure the knowledge that the stock is likely to be i haves rated when you walk in the next morning. consider merck the tortoise while the fast-growing biotechs are the hare and this is very much an aesop's fables kind of market. look at the utilities. not only is merck showing that it's immune to all of the volatility, but the sideways trading that we've seen for the six weeks is also what's known as a basing pattern. right now merck is basing at a high level and that's something
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lang likes very much because this kind of base is like a launchpad. so eventually when it gets built out enough, merck should be able to launch itself to the upside upon. now for the past three weeks or so, lang has seen something else he likes. merck has been seen rising, and it's been on expanding volume. remember, for charter volume like a lie detector and to know if he's telling the truth, lower volume could mean it could be a fakeout. no fakeout here. what else? unlike other stock in the market, merck is well above the 200-day moving average and many are flirting with it or taking it out. that's a long-term measure of the stock's trajectory. many stocks have broken down below both levels so from a chartist like lang's perspective, the fact that merck is holding up here is a major positive. a lot of stocks rallied today and some of them are still in technical difficulties. not merck. now i want you to look at the relative strength index with the
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isi momentum indicator and for the past few weeks it's been ramping up which tells lang that merck has much more room to run. how high can merck go? ever since late february, merck has been bumping up the ceiling of resistance at 58. lang believes the stock will be able to break through that ceiling and at that point there won't be any other technical levels holding merck back. hence why lang thinks a move over 58, well, that could send merck smoothly sailing to $70 a share. if you thought this daily chart looked good and iffing any, merck's weekly chart he thinks is even better. lang points out that merck has spent the last 16 months -- 16 months in a very strong uptrend. boy, is that unlike the biotech, huh? they're just hooked. the high levels of volume during the up weeks tells him that there's been a lot of buying from big institutions which can can be like rocket fuel even with slow-growing, big tech pharmaceutical companies and langness merck has developed a
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pretty long floor of support at $55 a share and that's over the past couple of months and that's less than a dollar where the stock is now. the stock could have a ways to fall if things go wrong here. however, the $55 floor will hold and the stock is more likely to head higher from here than lower. why? a lot of this comes down to the pattern merck's been having lately sxoots called a bullish flag pattern because as you guessed it, it looks just like a flag. by the way. if you want to understand the formations better and read the chapter on charting for fundamentals and the first time i've ever written about it and this is what chartists like to call the continuation pattern. typically when you see the flag formation after big rallies we've had, it means the stock is consolidating, catching its breath for a period of time before it resumes its march higher. well, almost never lower than i've seen. >> look at the williams
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percentage oscillator down at the bottom of the chart, measures whether the security bez come overbought or oversold. typically when one is overbought you tend to get a quick sell-off. sometimes the stock can become overbought and stay that way for a long time because it just keeps rallying. and when it comes to merck, this stock has been overbought -- well, i mean, look at this. since last fall. this is incredible. lang points out we saw this exact pattern in 20 tefl and when the stock bought month after month after month and kept roaring higher. if we get a repetition of the 2012 action lang thinks this rally could be far from over. here's my view, though. you know i like the company. it has a deep pipeline of drugs and development and terrific diabetes franchise and not to mention safers, the ground-breaking, antipsychotic drug and wait until they tend to go off their pleds and it it
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started me, and it was a potential breakup place. it's cutting a lot of fat from $10 to $20 billion. that could be the dividend and brook still has his animal division this week. let me so you the bottom line, if volatility starting to make you seasick, why not buy something -- the drama mean of the stock market in a world where the charts are looking hideous, merck's chart as interpreted by bob lang is a thing of beauty that suggests this stock is headed still high are. stick with cramer.
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you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires. at your ford dealer. what was it that everyone was saying the earnings would be bad this year? so far of the major companies i've only seen one bad one. intel looked pretty terrific to me. yahoo because of of alibaba looked fabulous. i'm not sweating the program so far. coke coal willa this morning looked great. johnson & johnson, best in show.
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what's everyone complaining about? maybe you ought to do some homework before you start complaining. i'd like to say there's always a bull market somewhere. i promise to try to find it just for you right here on "mad money." i'm jim cramer and i will see you tomorrow! >> all: cheers. tonight on the profit, amazing grapes is a wine bar and retail shop, the brainchild of a real estate developer who seems more interested in sipping than selling. this is ridiculous. even with more than $3.5 million in sales this past year, amazing grapes is operating at a loss and still can't pay down their mounting debt. this is a business without leadership or direction. i wish that you had passion for the business. you wouldn't be losing money. if i can't find somebody from within to take over amazing grapes and manage its assets, this business will be crushed. >> are you the grim reaper, or-- >> sometimes. my name is marcus lemonis, and i fix failing businesses. >> we're out of business. >> we were out of business before, we just didn't know it. i make t

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