tv Mad Money CNBC September 5, 2014 6:00pm-7:01pm EDT
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action.cnbc.com. we'll see you back here next friday. 5:30 p.m. eastern time. mike khouw, happy birthday. have a great weekend. >> phenomenal. my mission is simple -- to make you money. i'm here to level the playing field for all investors. there's always a bug market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. other people want to make friends. i'm just trying to make you money. my job is not just to entertain you, but coach you and teach you, so call me. or tweet me @jimcramer. huh? that's what i said when i saw this morning as nonfarm labor report, a stunning number, which
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showed only 142,000 jobs created? the slowest month of the year? and about 80,000 fewer jobs created than many were expecting? normally you expect stocks to get hurt, right? didn't much of this market's next move higher come from additional job growth? you would also expect interest rates to plummet, as almost always happens when we have a real employment shortfall. as the dow gained, and the nasdaq advanced, and bonds? they did nothing at all. what's going on here, people? i think a couple things are happening. first this monthly survey does have its flawing, meaning it frequently is revised, and august has the history of being the most wrong month. i think we have a revision upwards when we see the next figures.
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second, i think people are hearing too much empirical evidence, and from surveying involves construction. that's why one of the strongest sectors today was retail. totally counterintuitive. i'm not going to asterisk this number, but i have to be skeptical and conclude there's something wrong with this one, because the market chose to ignore it, and i'm in agreement with the market. plus as i write in "get rich carefully" never trust one number. it always takes two in a row, back to back, to change your mind about an economy's direction. this time will be no different. what are we looking for next week? what's the game plan? monday, wow, it starts with an absolute bang. the bang of the details about the alibaba, ipo, the large of of all time, as the road shows, present of what this company is all about kicks off, what a production this will be. i will tell you we've got a 321
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million share offering coming at you with a price range currently meaning it can be bumped up our bumped down between 60 and $66. i think the deal rightly or wrongly will indeed electrify wall street. even though that's a lot of stock, don't be surprised if your brother says you're shut only, because i believe the big mutual funds will want to make this one a core position, grows fasters, i'll fill you in on the details later, but for notice let me say i've been consistently recommending yahoo, assia hue is a huge shareholder on the company. more on that later, too, and i'm reiterating that stance. yahoo can take the money from the ail i baba -- it's still shares on the deal and there's plenty more behind it, and reinvent itself or buy back a
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gigantic amount of stock. something it's been doing very consistently all along the way. and it's working. either way, if you stay tuned, i'll tell you what worries me about the ali baba, and it's not a typical concern that you'll hear voiced next week. how about tuesday? talk about tell i graphed. right on tuesday we get the launch of what could be a breakthrough devices for apple. it's always been the holy grail of retail, and a wider screen variant, part of the market that samsung has been dominant. let me be clear about this. okay? i'm real el really urging you, i like apple, i've liked it forever. this is, however, an event that may have lost a lot of its surprise factor, and even if its wow factor because of news flow ahead of the media has been
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president clintone ee eclintone. after the close of tuesday, we get a key report, talk about a hot area, palo alto networks. i believe they have the most sophisticated software out there to stop attacks. secondly the attacks continue, but i want to caution you not to overreact. earlier this week in our fantasy football draft, i urged you to buy home depot right into the weakness, betting that its hacking problem would not result in a catastrophic situation for the retailer, sure new you have it bounced right back and then some. that said, the ceo has his share -- we only hear about the
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botched hackings, not the ones that are successful and ongoing, so bebe aware of the graphics nature as he sees it you want controversy? hose about bets being placed furiously on restoration hardware which we rather from on wednesday. williams sonoma obvious considered to be a restoration -- on the other hand we got the amazing quarter with home depot with big -- here's where i come out. this morning aaron reuben stein bumped up his sell to a hold, in recognition there had been some recent positive developments that make him uncomfortable recommending investors short the stock. i always take notice of thinks kinds of bullish developments on the eve of announcements. i think that restoration could
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go much higher, i believe the company is infancy, and i like -- i like this idea of not being shorted ahead of the quarter. speculators take note, i would buy deep in the money call options, just in case there is some short-term glitch in the story, stemming from the too heavy cat loan shipment, and some of our inabilities to lift it, like mine. it's tough to recommend any stock at a 52-week high, gull if we had an event and the world seems pretty crazy, right? that pulls down the whole market next week, you may want to pick up some kroger, the undervalued supermarket chain. it's ra terrific story. i at not recommending, not at all. i have backed away from it a while ago, but you know what? i think the deckers brands, which we met with yesterday?
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has the best way to play the growth in yoga. and that's the yoga shoes that deckers is now selling. remember, they invented the aerobics shoes, deckers hit a new high today. still, you want to invest in a story that is yoga, i want you to think about deckers, not lu lu. i say new, because this is a darden without the underperforming red lobster change of stores. with the addition of now in-house agitators. this could become more focused and just plain better operator. with a 4.5% yield, i say darden could be a buy, but there would be fireworks at this meeting, so strap yourself in. finally we get retail sales, you know what i think? that's an interesting code to you're game plan, because i bet it will show strength, not weakness. the total reputation of the employment number with el got,
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so here's your bottom line. if you don't own apple, wait until after the meeting, because the hoopla has gotten crazy. this i about speculating on the long-term growth renovation hardware, and i'll keep track of the big road show for alibaba, just for you. may i go to lynn in new york, please? listen. >> caller: yes, it's lynn. biggest boo yaw from the bronx, jim. >> bronx cheer, yeah, yankees have been good. what's up? >> caller: yankees always doing good. hey, listen, first of all, we love your high energy level. and we always keep your book right within reach. >> thank you so much. >> caller: you're very welcome. >> you why surprised how few people are also checking the market at 3:30. it's embarrassing. >> caller: it's amazing. let's talk groupon, an amazing ipo? >> yeah, i didn't -- i'm not
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going to give it the bronx cheer, but that last quarter was quite disappointinging. i've got to see two quarters before i get behind it. i do thank you for your kind words. let's go to lee in florida. >> hey, jim, thanks for taking my call. i have been following basic centering services, since you did a segment in june. really it's pulled back a little, and i'm just curious if you like the stock. >> oil is coming down, lee. that's because of the stronger dollar. i respect that. i let oil come in, maybe holds 93, 92, these stocks come down, watch schlumberger. there is a stock i would start buying here. how about don in california? don. >> caller: jim, boo-yah from california, original home of the fish taco and gateway to america's finest city.
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>> don, i've got to tell you when they did the san oy fiwise people are telling me not to get behind it. san ofee is doing such a good jon with rejenneren, but people smarter than me are saying, jim, don't believe the hype. next week is big earns. why not wait until tuesday's announcement to pick some up? consider speculating on restoration hardware. and the rest? i'll stay on top of it for you. on "mad money" tonight, the sea hack, r. sherman 25 made swiss cheese of the packers last night, but i'm here to make sure your portfolio doesn't suffer the same fate. i'll show you how to play "d". and why a big-time tech ipo
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could be more dangerous to the rest of the market than anything going on overseas and how you can protect yourself. even the best players can get tripped of sometimes. make sure you're ready for any bumps in the road when we play "am i diversified?" stick with cramer. don't miss a second of "mad money." take and... exhale.in...
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you would be a much better investor, means you would likely make a lot more money in stocks. don't get me wrong. i love my fantasy football league, also know as the shall lump league, but let's be honest, i love making money more, which is why i come out here every night to help you get better results -- though i did get a lot of money when i won the super bowl last year. now, we've already drafted a good deal of our fantasy stock. i've given you a couple tight ends, so tonight we're going to fill out the rest of the team, starting with some defense and special team players, including, of course, a kicker. first of all, let's get you a defense. this is one area where managing football, and managing a stock portfolio have a lot in common. it's bruising, punishing business, totally essential, but often totally unsung.
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they're not the sexiest names, but if for some reason -- and we just get a not so hot -- although i naeem to do so two bad ones in a row, your defense stocks will be able to keep rallies. that's how you protect your portfolio. whose defense would i draft? i've got a surprise for you. from my fantasy team, i like the rams' defense, because the rams represent value. you have to pay up too much for the seahawks after last night's annihilation of the green bay packers on nbc. that's right. defense can be too expensive, though i maybe no bones whatsoever of my ridiculous idolization of our sherman, underscore 25. that's right. the best defender of our era, who by the way, of course, is always welcome on "mad money." so i'm trying to get a fantastic defense without drafting one too high. that's what we say in the league.
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what can i get for money that could pay off better than something that costs more? how about the companies that benefit from the affordable care act, especially the hospitals. they're defensive. when they were putting the legislation together, they pretty much helped write the darn bill. the government of, for and by the corporation. ♪ hallelujah >> while you can argue about whether obamacare is helpful -- not my job -- no doubt it's fantastic for the hospital stocks. as a business, hospitals have very high fixed costs. no matter how many patients they get, they still need to pay for the buildings and the staff. so when you get a big increase in the numb per of patients who can actually pay, that goes straight to the bottom line. this is the first year that the affordable care act is fully in effect with millions and millions of previously uninsured people now having health insurance. that's proving to be fabulous for the hospital space.
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mime favorite player in i like the biggest and the best. hca. this darn stock still sells at a daunt to the s&p 500. that's prepose triers, same as the rams. sure, they've been kind of roaring with the hospital stocks, but crucially, because this is your portfolio of defense, they'll keep running regardless of how the economy is doing. hca is the largest for-profit hospital chain in the country, 165 hoptsds. it's not just a shutdown defense. i think it's going to score for you, which is truly what you must get out of a defense in a fantasy or reality portfolio of player. the quarter, my, it was fantastic. i think it will only get better from here. next up, you need a kicker. a lot of people don't think kickers are that important. in a tight game, a good kicker with a strong special teams could be the difference between a win and a loss. who makes a good kicker.
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here i like the natural and organic plays that consistently make the numbers. this is -- and while the natural and organic supermarkets are facing way too much competition from the likes of kroger, or even walmart, for the companies that actually make organic and natural food, they're seeing incredible demand i like steven gostkowski from the new england patriots. it's equivalent to organic family, whitewave foods. it gets 85% within the united states, and its most recent quarter was striven. terrific. and up side, what other food company calm up with that. they go up like clockwork.
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my conviction? i'm wearing a darn pats' jersey, in honor of this pick. that's hard to get me out of a eagles jersey. and i'm in fan of haush ka. and the greek gods, yogurt or many other bran. the thing about hain, is it's been a consistent performer for years, line haushka. had company is growing like a weed, expanding all over the globe. this is not just something that's happening in the u.s. and every supermarket in existence is trying to get in on this action, which is why the demand for hains is soaring, and
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why the stock which keeping rallying through the rest of the year, i think. i like phil dawson, consequenceant player. what company can match that level of consistent excellence? maybe only one, chipotle. the mexican fascial casual chains, putting up truly staggering same-store sales location. up 17.3% in the last quarter, chipotle is on a one-man mission geren the food chain, and total tapped into the psyche the the demo. the company seems to deliver in a pinch. don't worry that it's already up 26% year to date, as we head into the end of the year money managers like to bank on winners, not loser. pushing still higher through year end. oh, and let's drop it all right with the pollo loco. we had a great run.
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if history is any guide, time to ring the registers on these restaurant i want pos, after they report their first quarter, you know what? it's too dicey to call going into the next one. i like to take a profit. no one ever got hurt doing so. for your fantasy football draft, i like the rams defense, which translates into hca. when it comes to kickers, its gostkowski. i want stephen hauschka, or phil dawson. whitewave, hain celestia, and which i pot lace, a tryr trio of nflfrank in arkansas, frank. >> caller: hey, cramer! asking about -- wonder if this is a hold or sell. >> no, i'm not into post holdings. i was hoping it could -- i was hoping at the a breakup
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situation where i usually like to buy the broken-up players, but at this point it's been a disappointment. i'm just not going there. every portfolio needs solid defensive stocks and kickers to help. i like hca as a defensive place and whitewave, hain and chipotle. much more after this, including a breakout star that could help turn your money fantasy into reality. don't miss it. then the company about to go public bigger than amazon and ebay combined. what it could do for your stocks and how you should prepare. protect yourself from market swings, tonight when we play "am i diversified?" stay with cramer.
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to fin off or "mad money" fantasy stock football draft, we're going to focus on the sleeper picks, rookie players who could make a page difference. that means speculative names and fresh-faced ipos, which is why we saved it to friday. i have two i want you to focus on. first off, my number one sleeper pick, brandon cooks, the rookie receiver from the saints, his stock equivalent -- alibaba, the chinese internet company, it's
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coming public later this month. it's a sleeper now, but it won't be starting next week when it starts its radio show to sell 320.1 million shares at between 60 and $66 a share, but it could go much higher. cook's and alibaba are both rookies. neither one is really new to the scene. cooks had a great career at oregon state. alibaca has already become china's top internet company, but they're bot getting a chance to sip. just like cooks which has a tremendous opportunity, quarterbacked by the great drew bruce, alibaba is incredible. aung that market is growing as only 42% of chinese people are active internet users, because the infrastructure is still being built out over there.
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and just 20 years old, brandin cooks is a low-risk sleeper with huge up side. alibaba has years and years of growth, especially if this el can tap into adjacent markets. unless the pricing is ridiculously higher, saying it moves up dramatically, then i think you should try to get in on this deal. not only is alibaba enormous, last year their sites processed $248 billion worst of transactions, more than amazon and ebay combined, which is growing like a weed. last year the company's revenues increased by an astounding 62%. this year that number could be accelerating, plus because alibaba is not really a retailers, but more of a big online marketplace, people --
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they simply take a cut that someone using their website, unlike amazon, which has razor-thin margins alibaba is incredibly profitable. it has some of the best numbers of any company i follow. the growth here is absolutely astounding. i think it could be a runaway success. the only question is whether the hype has become so great that the bar could already be set high, but the legitimate chinese ipos have done pretty well. however, if alibaba sounds risky. well within the realm of possibilities, thin yahoo's stake would be worth $42 billion. of course, there's after-tax concerns. yahoo may not be the best
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company annual, once they start to monetize that position of which they are selling 21 million shares. i bet it's higher still our second radiosie sleeper, the rookie running back for the titans, a relative unknown, but following as injury to his teammate in the preseason, his draft stock skyrocketed. you. another chinese internet company 146% year to date. caught the market's attention. vip shop is a chinese online discount retailer. if you like the sound, you should know that it's growing more raptly growing. driven by 139% and of 166%
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increase. yes, it has earnings. now you've been telling you. it's monster stock, some 25% since i recommended it back in may. why is it still a sleeper. in honestly your guess is as good as mine, as the discount retail market in china is usually underpenetrated. they have no equivalent of t.j. max or ross stores over there. the [ s and mortar doesn't exist in china. they own the they have embraced mobile, which now -- and i think the stock keeping running for the rest of the years, just to show their investors show how smart they are, not only did i know about alibaba, i have vipshop. for fantasy stock football, i like the soon to become public
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alibaba and vip shop, two chinese plays that should -- and what's with the celek jersey? i think he's this sunday's sleeper, the guy who has one of the largest after-catch yardage in the league, plus it fits me better than all the other 20 jerseys that i have. mike in connecticut. mike? >> caller: boo-yah, cramer. boo-yah mike. >> caller: i have a question about plug power. it sounded like they had a report amount of earnings, but the stock went down. >> let 'be careful. you know, plug is actually not profitable, okay it's a speculative story that i have not liked for some time and i'm not going to deviate. i think when you have that kind
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of run, you've got to have profits, you have to have profits like vip shot to make me feel better. rookie players can make a major different in the field. in stock terms that means spec names. that means considering drafting alibaba and vip shop maybe on a pullback and for my entire portfolio, we had to madmoney.cnbc.com. forget the wars in the middle east, forget the fed, forget the biggest threats to the stock market. none of those, it may be the alibaba deal itself. find out how you need to prepare. then with the stock market goes to all-time highs, make sure you are protected. plus the lightning round, just ahead. stick with cramer. from 2000 to 2011, on average 17 manufacturers a day shut down in america.
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there's no reason we can't manufacture in the united states. here at timbuk2, we make more than 70,000 custom bags a year, right here in san francisco. we knew we needed to grow internationally, we also knew that it was much more complicated to deal with. i can't imagine having executed what we've executed without having citi side by side with us. their global expertise was critical to our international expansion into asia, into europe and into canada. so today, a customer can walk into our store in singapore, will design a custom bag and that customer will have that american made bag within a few days in singapore. citi has helped us expand our manufacturing facility; the company has doubled in size since 2007.
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make sure you have the best starting lineup. how do you do that? of course diversification. let's kick it off with john in california. what's you said? >> caller: a boo-yah jim, in vacaville, sacramento valley. >> i love sacramento. >> caller: i have cvss.cemex, philip morris. gilead, and my new one is aeo, american eagle outfitters. >> i respect specs, we know that, but we call them specs on this show. american eagle outfitters. that's a retailing spec, all right? cvs, one of the great drug story chains, it's done so well. i love the ceo the philip morris international. it does quite well. i prefer altria for the yield. gilead, don't worry about it, things are still on track with
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that, and cemex, we've been recommending that, construction, drug, bako, drugstore, different from drug, and retail. i'm blessing it. let's go to ralph in pennsylvania. ralph? >> caller: how are you doing? >> all right. how are you? >> caller: okay. i'm in florida right now, but looking at properties. why, i mostly want to know if i'm diversified. i have a lot in new york mortgage trusts, quite a bit in agnc, arr, w.i.n., when is windstream, and cmo. they all are high different stocks. between 9 and 14. >> right. here's my problem. i've got to tell you, these all trade together.
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and as far as i'm concerned, i don't trust any of them windstream i do, but even there i don't like the catch flows. i have to throw back everything other than windstream. they're yield plays. i think they're dangerous. i would far more prefer to see, honestly, why not see a kinder morgan or a royal dutch? let's make changes with yield that we can trust, not yield that's all undiversified, i don't -- ralph's a man, but this is the least diversified i've seen since we started the show nine years ago. hey, i've got to call them as i see them. it's not about friends, but about money. renato in pennsylvania. >> caller: thank you for taking my call. how are you? >> i'm real good on the eve of this weekend's unbelievable philadelphia eagles game. i'm fine, what's you have? >> caller: i wanted to see if i was diversified. it consists of number one apple.
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i'm way over the 20% mark on apple now, so i need some suggestions. >> that happens when a stock is that great. >> caller: ebay, southwest, facebook, and salesforce.com. >> oh, man. we've got some problems here too. tlisk airline, apple, you've got to go -- there's rules here. we follow the rules. ebay we could do anymore, because paypal will be in direct competition with apple. we'll get rid of ebay. facebook -- no, i can't make exceptions. i said kinder morgan for salesforce, mark, i've got to do these kinds of things, and royal dutch for facebook. by the way, facebook very big position in my charitable trust, but diversification is key, and i need to drill it home, even if it means trimming back fogs that
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it's time for the lightning round. and then when the round is over, are you ready skee-daddy? we're going to start with hiky in new york. >> caller: boo-yah, jim. just wanted to say washington could use some help, so i'm hoping to see a boost on the ballot for 2016, if possible. >> you're very kind. not going to happen, but go ahead. >> caller: my stock is freeport mcmoran. >> this is one of those stocks -- sometimes you have to buy stock that's not in favors. stephanie link and i preach this. we know it's not in favor. we want to own a copper stock in case china turns around. it's got a good yield, but we're buying it slowly in stage. doug, in florida, douglas. >> caller: a big shoutout.
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a question about -- pharmaceuticals stock. >> go ahead. about -- texmira pharmaceutical. >> i think they're played out. i just think this stock has had its day. i hope everybody's cured from this, but i don't think this stocks dr you're late to the stock is the way i would say it. frank in new york, frank. >> caller: yeah, hi, how are you doing? >> real good. how about you? >> caller: excellent, i'm curious about activision. >> you know, i like it, but my favorite at these levels is taketwo. how much do i like what is going on at take two? well, i'll tell you, it was downgraded from a buy to a hold, and yet it still went higher, well done. let's go to mark in tennessee. mark? >> boo-yah, jim.
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>> caller: my stock is esp. >> earlier i referenced freeport, you know, that stock is out of favor. we are do the exact same thing with esv. the quarter was good. nobody cares. i like it. i like to bottom fish sometimes. esv is my bottom fish. michael in pennsylvania. >> caller: a big pennsylvania boo-yah to you, mr. cramer. >> a lot of steeler other eagle fans. back to you. what's going on? thank you and your staff. >> i wanted your thoughts on te -- >> i thought summer sheffield's company would be doing better, but with oil coming down, everybody is freaking out and dumping oil stocks. i say you want to be a buyer, not a seller. royal dutch, i like that. i like defensive oil right now.
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alan in florida, alan? kl biodelivery sciences, we're seeing changes at the fda about how fda painkillers are scheduled -- >> i'm not going to disagree. i've been playing with that gw pharma, but this is a good spec. please remember it is a spec, and nothing more. that, ladies and gentlemen is the conclusion of "the lightning round." "the lightning round" is sponsored by -- it's time, time for "the lightning round" -- ♪ [ laughter ] all right. here we go. house of pain. >> now it's september which means it's time to say good-bye
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to summer and say hello to football. [ whistle blowing ] >> whoa. all week we'll be drafting my portfolio. hence while i'm wearing this getup. >> okay. the market is giving you mixed signals, which is why you need a running back to take you the distance. should i put on my eagles helmet? ♪ >> kyle? >> i've won the "mad money" league super bowl twice in a low, and i'm looking to three-peat. [ static ] >> kind of a big head here. >> stick with cramer. ♪ big business overnight? ♪
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where's all the money going to come from? what has to be sold in order to meet the supply generated by all the initial public offerings in the hopper. that's what i'm most concerned about right now when it comes to the direction of this market. i'm concerned about it, because everyone else i know is worried about everything else, from isis to ukraine to chinese trade wars to a too easy fed to a potential
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reckless european initial bank to a bottom in interest rates. i don't like to worry about what everyone else is worrying about, that's counterproductive for me, and for you, by the way. plus these fears are often discounted into the market, because everyone is so vocal about them. no,i it is newfound supply of stock that's gotten me most nervous. i believe that the upcoming ipo could be a big win in order to anticipate vlgs most of the big mutual funds are going to have to sell something else to take in some stock much the chinese internet giant. one of the oddities of this amazing bullmark. -- bull market is that it doesn't draw in new dollars. it putters along without any real fuel. those have been huge sources of capital, but what i call the overthe trance many money, the money regularly committed by individuals to stock picking mutual funds isn't arriving as i
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thought it would. tiny amounts. when money does come in, it usually finds its way into the hands of etfs or index funds which aren't by their own charter going to be able to buy ali baba. the funds that would be willing to buy alibaba are the ones that own especially the internet companies. these funds typically don't have a lot of catch on hand. i get it cash has real hind drans for the -- so i suspect that these mutual funds will sell apple, google, facebook, and other fabulous tech winners to fund their ali baba purchasing. if it were only the need to raise cash for the ipo, i would be less concerned, but as renaissance capital told usa today this morning, ipo fund raisings are up 46%, but --
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despite the circumstances, it's been the most money raised from ipos since the nasdaq bubble burst in 2000, a comparison that's already being made as witnessed the headline alibaba ipo revive, again, you could argue so what? if you sold stocks because of that kind of comparison anytime this year, you're already regretting it. however, it's what comes after alibaba that has me most worried. a host of deals that could have valuationses each north of $10 billion. companies like airbnb, dropbox and box, two competitive deafa stories, the algorithmic -- mutual funds might have to come up with as much as $75 billion, maybe even more. hey, $75 billion that these funds donnell have lying around. even more stock will have to be sold with similar profiles. i know that these companies are
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a heck of a lot bers. but that's not the point. we could see declining valuations of existing companies wholly apart from the fundamentals. supply overwhelming demand. look, we saw that happen in march of this year when the market was overwhelmed with new supply, and many of the higher valued technology and biotech stocks have never recovered to the pre-swoon levels. it is a real issue. i don't hear enough people fretting about it. so let me just add it to your litany of worries that could be minimized in part because while a fed-inspired spike in interest rates that so many still expect even at today's surprisingly tepid employment number can certainly slay a bull. an abundance of supply can also put real hurt to this market as remarkable animal spirits. stick with cramer. ♪ [ male announcer ] andrew.
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first deal. i'll say listen, it's too high. it depends on price, people. that's the way this business works. i'd like to say there's always a bull market somewhere. bull market somewhere. i pro >> a high-tech control room. >> he is looking at everything that's going on here. >> railroad cars hauling urgent cargo. >> get it into a railcar as fast as we can. >> on a mission to create the world's most popular brew. >> we have a presence in over 80 countries. >> it's a cultural icon -- a bubbling legend. >> probably the most recognized beer label in the world. >> an ultimate beer from the ultimate factory -- budweiser.
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