>> the post op there. exxonmobil. pete and i were talking about that. giddyup. >> i'm melissa lee. thank you so much for watching. see you back again tomorrow on "fast money." in the meantime, don't go anywhere. "mad money" with jim cramer make you money.c i'm here to level the playing field for allc investors, there is always hom-wt)k in summer and i promise to help you find it. mad moneyxdw3fálpjf starts now. >> hey, i'm cramer. trying to make youxd alp little money. my÷d job isw3 to teach and coacu so-call me at fáq1800-743-cnbc. we live in afáñr confusing mome someone yapping on the tv orñiç

internet tellingok you opposite than me. they sound lpintelligent. here at mad money,ñi we're not about savvy t(smart. it right, what to get these things right, i need you to make money. in all my 30 years plus in the investing business, i have to tellt( you the easiest way to g being rigorous as possible. there is no xdtrick. there is no five simplei] ruleso make you a multi millionaire. that's hogwash. if you do your wgr' and ñi something that might make you a better investor. a betters7 investor wants to ma more money than the other guy. that's the goal. for a better part of a decade

i've been running my own charitable trust. with the help of my research went wrong and where i went ♪ ♪ >> as part of the research for my latest book, get richfán carefully, i went backóomzo7 on years to analyze what worked and what didn't. you know what? i got a treasure trove of valuableñi information. tonight, i want to take youe1 through some of the most important lessons. bestw3 succe$ges and more important worse ñrblunders. ilp advice you to do the same thing. you can learnxd a lot by systematically going over past stock picking, know yourself and need not fear the result of 100 battles. let's get sta%;áejy

i notice something isxd counterr intuitive. sometimesc the best time to buya their estimates for the understand ore lying company. yeah, aren't we supposedfá to b buying ñiprizes? one of v(" best investorw#k thy of ok2009.xd caterpillar was going down and down and down for weeks on end aslp analysts raced their estimates ahead of what looked to be a bad quarter. the analyst, they all turnedñi bearish at once after and orders 4/8si.7áyday.y!e cf1 o ight at the great recession. when caterpillar rep:ááq", the quarter was uglier than an lists predicted and some from the year 50%. wspt)át but, and thislpk

important. catc stock barely reacted fallig returning to whereó[ it was whe the hideous earning announcement that's the classic sign you're looking at a bottom. right thenmnoñ cat was screamin look at me, look at me, all the bad news, the worstq is over. it can be dangerous, if you come too early and so often happens but sometimes theu@-arket willz% call the bottom for you and that's what happened in 2009 with caterpillar.xdt(v

keyword, trough. anybody could have caught this move by watching how the stock didn't get crushed like youok would expect after the hideous estimate cuts. maybe you're saying okay, cramer, t$cá was zv2009. example when it made sense.jf jpñilpñi morgan, remember the it jp morgan had in thefá spring o 2012? the trader that caused the bank to lose $6 billion by trading losses? as they try toxd get arçnç hand the t(magnitude, the stock goes low lower in sync with the cuts.

it might total $9 billion, and several if i recalls following itñi slashed estimates to match that new york times figure. however, justko like caterpilla march of 2009, the stock didn't get hit on the last' you heard me. i didn't get[hhit.t( instead, it flat linedfá andw3 it didn't stop ever so slightly when that news broke. the stock wasc telling you ÷ estimates came down too far. surew[/ñ tjjáuk after jpñi morg losses were notwh8 billion, the were continued at 6ñi million. that was the moment you had to sjeip z cf1 o the stock was down to $31 and if ìáhp &hc% failed to take the stock down, you caught an i menace rally, 31fá goes up 50 almost in a straight that is a 61% gain. here is the bottom line,?26=u reliable sign a stock isxd

bottoming? wait fg@!the moment when the estimates are so low they can finally at last be beaten. and lucky for you, thew3t( mark will almost tell you where that happens as we saw with estimate gets slashed, that'sx >> caller: hey,fá jim, look, really appreciate it.xd you helped me the lastjf couple years recoup thousands myçó so-called professionalfrijt)q) lose me. >> thank you for the kind words. we go at itxd every day and appreciate you recognize it. >> caller:çó you're helpingxm: make sure i have a fund setñi aside for my granddaughter's college.?; what's the deal for after hours t-p>> it's not a bad thing.ñiqo? so often afterçó hours trading misdirection not unlike+ thed quarterbacknb giving it to a ha back but not really doingko it.

he runs it, reoptionxd play. i feel strongly it's just a fak1 out city, wildxd west. i don't want you there. you can certainlyñr do it. why no information? that's just guessing. we don't guess on made1 moneyxd robin in california, robin? >> call>árb)rs fine, thank okyou. i am anq cramer gainer and i hae a question about market odders. >> okay. >> caller: i used to buyok open bought were higherpt+9 when i placed the orders so içó took yr advice which i heard you say to use limit orders and now the price i order thatb. matter sometimes uless. i was wondering, though, can i even improveui]lpe1t( on thatfii

]yrñ th. they set that -- anylp time you /uyuz it out of your ownxd hand and determine what price you ñpmarket's merc. there is times itxd doesn't matr and people say jim,jq 7 you're n tooçó careful. can you be too careful with your money? thank you for the comments. bottom fishing, everyone loves it. the market sends us signals when the stock had a slide and know what that is? that's the true sign of a bottom.ko don't+çóeájuj añ second of money" follow at jim cramer on twitter, have a qquestion? tweet cramer, hashtag mad tweet and send jim an e-mail at cnbt( cdot co -- cnb cdote1 come. missxd something?ñi

head to ñr money.cnbc.come. how much money do you have in your pocket right now? i have $40, $21. could something that small make an impact on something as big as your retirement? i don't think so. well if you start putting that towards your retirement every week and let it grow over time, for twenty to thirty years, that retirement challenge might not seem so big after all. ♪

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>> he knows he's just eye candy. blorpt, they said we're not going to split and stock is up big. sales force.com said we got to make our stock more accessible to retail. beauty is in the eye of the beholder on this. can i go to john in virginia? >> how what's up? >> here's the question. i have been very fortunate thank yous to you and i've done my research and your crack staff, back to even. i retired at 62. i have a portfolio that i'm really pleased with, and now my question is how do i -- in retirement, how do i protect it?

because i don't feel like i need to amass it. i just need to protect it. so i've been doing my homework and i came up with two options and ij wanted to get your read on them. >> sure. >> one this bond funds that are paying 7 3/4 and when you dig down into them, there's a few bonds in there, but there's a lot of deriftives and there's a lot of other stuff, that's one option, these bond funds at 7 3/4 with a monthly payout which will help my income flow and the second is these life insurance products that cap the down side and the up side, so you really can never lose your portfolio, but you know, you can be limited to 1% one year and 16% -- >> no, john. you never want to cap your up side. i think you should find yourself a bond fund that's very short term right now. interest rate is going to go

higher. that's because you are cautious. i think you are way too young for that strategy, sir. i have to always accede to the wishes who call. otis redding said it best. we can learn from our mistakes. a secondary does not always mean that a secondary is in trouble. some have been unbelievable. after the break, i'll try to make you more.

tigers, both of you. tigers? don't be modest. i see how you've been investing. setting long term goals. diversifying. dip! you got our attention. we did? of course. you're type e* well, i have been researching retirement strategies. well that's what type e*s do.

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yep. if ever there was a musician who understood the stock market, it was kenny rogers. you need to know when to hold them, know when to fold them, know when to run. you know you can follow along i've got some suggestions when you should fold them, if not walk away from your positions or

even run. before i get there though let me remind you that i'm not just blowing smoke. i'm not sharing my opinions. you know opinions, everyone has them. they all stink. i'm sharing the results of my research in into what works and what doesn't, research i conducted when writing my most comprehensive book yet about the stock market. in the spirit of the gambler, cash is not always king. if you buy a stock just because you are sitting on a mound of cash, think about it. what's does kiss sewco -- sisco, or ra kal or microsoft have in common? you heard this or that stock had a gigantic stock has cash, as if

cash is a bullish thing. maybe in a high interest environment it might be good because companies get some extra income. cash means very little by itself. what really matters is how companies put that cash to work. sure they might give you some nice sized dividends, those haven't met in terms of a floor, right? these tech titans have always bought back stock badly. they buy their own stock all over the place, at any height, at any time, oblivious whether it's attractive at the moment. in short, that cash has been wasted. when you see a company doing that, you should pass on its stock. time to walk away. sell, sell, sell! . here's what you might not even

know, it's win dam worldwide, holmes buys back stock aggressive and when it make a difference, when most of the ceos seem frozen and are unwilling to step in and take advantage of the weaknesses, market driven. even though the declines are truly not specific, because holmes thinks it's his duty to return his company's excess cash to its shareholders. i find that refreshing. he doesn't sit on it and do nothing and watch it grow. holmes is part of a new breed of executives. he wants to fulfill his end of the social compact with shareholders. you stick with him, you don't rent wyndham world wide stock. in return, holmes makes sure you

get your cut of the business. and he grows that business as fast as he could. he's the very model of what sisco, microsoft, need at the helm. someone who recognizes it's part of their job to figure out the best way to make it happen. let me tell you about another stock that you should fold the stock. if you own shares in a company and they blame -- sell, sell, sell. juniper was raiding -- trading in the low 40s. at the time the company blamed some nameless japanese customers. japan's teleco companies were user of juniper's products, and the country and the company got

hit by the tsunami. it was natural to think there would be a pause in juniper's japanese business after this ka tras frof tee. this time we heard the orders were from europe and the united states. i stuck with june per because the company had a ton of cash. i ascribed to the message that u.s. government had been a big june per customer. it wasn't until the stock dropped into 20s that i realized juniper's blame the customer act was a pretty darn lenient alibi. they were taking the market share the whole time. that is this, this was now. the juniper customers were sitting on their hands. they were just -- they were buying elsewhere, which i didn't realize until we dug deeply into sisco's quarters and not june pers. the information was there to be had, but only from a competitor

and not from juniper itself. when a company blames the customer, check to see whether the customer isn't actually still buying except from a different vendor. know when to hold them and more important, know when to fold them. that's a stock you do not want to own. when a company starts blaming its customers for shortfalls like juniper did in 2011, always be zep at this -- skeptical. those customers may simply be giving their business to another player. may i speak to larry in massachusetts? >> to prepare us for the next earning season, you hate companies who don't warn about bad news, you are a big fan of under promise, overdeliver. since the headline number is often misleading could you list some of the buzz words we should look for on a conference call to sniff out a wall of shamer versus a conservative overachiever. >> you actually want to see

right up front, avon had one of these. they said listen it was a bad quarter. you want to hear someone saying a bad quarter was a bad quarter. right before the q & a begins give us an outlook, it should include what you think the forecast is going to be for this quarter and next year. it should be reasonable if you want to raise the forecast, don't go nuts but show us some conviction that business is going to be better next year or shut up. let's go to tomy in maryland. >> i would like to know how can i identify a bubble stock and if i'm positioned in one, how can i strategically plan my exit. >> if i'm going to own a stock that you call a bubble stock, i would do deep it in the money calls that cuts off my loss. it's a stock that's measured on revenues or some other cockamamie way to measure

things. i like earnings per share. i do it with deep in the money call, all you are doing at that time is playing the greater fool. can i go to ian in new york? >> thank you for all that you do. i own goldman sachs and held on for 60% round-trip in each stock. jim, my question to you is what percentage specific decline in stock would you accept or would cause you to pull the sell trigger? >> no, it's always based on the fundamentals. when i was a trader, i would listen down 5% got to go. but these days, i'm not a hedge fund, these days if i do the homework and the stock goes down and i'm just drawn to that. i'm not saying you should chase bubbles. if you are going to do the basketball thing, do it deep in

the money calls. stock age kenny rogers says you got to know when you hold them and when to fold them. watch out on keeps sitting on cash. don't generate any returns for you. beware of any companies that blame the customers. where the reward was that what if tnew car smelledit card and the freedom of the open road?

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>> a huge part of this business can be boiled down to a simple thing, figuring out where a given stock is headed. of course, that isn't all easy. sometimes it's a lot less obvious than the other times. as i'm constantly telling you that most stocks strayed on their earnings numbers. actually figure out the trajectory of the earnings might take some serious homework. i said most.

most stocks. most of the time. you need to be aware that for some ministries, earnings are not the most important metric. you could end up being clobbered and miss opportunities. you need to keep track of the key metrics of everything you own. oil companies, production growth. tech stocks, it's the average selling price of their products. not the earnings. these metrics are more important than anything beating the earnings estimate out there. the company's production growth disappointed quarter per quarter. the stock went down because the production shortfalls. the earning per share number didn't matter. if devon would have reported lower earnings, the stock would have rallied.

it's no wonder that deny has been one of the most poorly under managed in a long time now. i totally missed the in micron. inpaying enough close attention to the real key metric here. the stock jumped. what did i miss? derams, deram pricing. dynamic ranted -- random access memory chips. it happens because the deram business has been so horrible, many companies had thrown up their companies and -- thrown

their hands up and gave up. microsoft went on to buy a competitor and it has been off to the races ever since from december 2012 to december 2014 -- 2013. triple. a metric that might not seen important. when a company is based in the united states, one of my best buys was picking up yum brands. the decline in chinese sales because of the tainted chicken scandal. the growth for this american company isn't in the united states, it's in china. so when the chinese kfc division had a shortfall, stock got clocked anyway. soon after the company demonstrated that it had a plan to promote china around. don't let it be known that its

earning would be slashed as it boosted chinese advertising. no matter, even though the earnings were about to get hurt, you had to buy the stock on that earnings shortfall. yum's chinese business began to turn around. the stock headed right back to its 52-week high. kfc sales growth in china is more important to yum's stock than the reported earning for the entire chain. sometimes the truly important metric can elude us if we don't keep our eyes on the ball. most stocks, the earnings per share number is the key metric. ever since the market bombed -- bottomed in 2009, i'm telling you that analysis was and is absurd. these so-called experts think they are being careful when they tell you to wait for revenues, but they are actually being reckless. here's the bottom line, the

earnings are not always all important. in some sectors like tech and oils, not to mention u.s. companies with overseas growth, those are the metrics you should watch. nothing is more important than beating the earnings per share estimates. stick with cramer. we needed 30 new hires for our call center.

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if there's one lesson i've learned from viewing all my trades from my charitable trusts, all the ones in the last five years, 14 in get rich carefully. the one i want to leave you with when you have a core holding in your portfolio, that you want to own for the long haul, don't sell it at the first little sign of turbulence. if you have conviction in a stock, you do need to let it ride. let me put this in sports term. when a football team wants to keep a player no matter what, they make him a franchise player. he can't be traded to any team. instead, we deem it a core holding and say we want to own it thick or thin, say we want it, that's the word operative say, but so often we don't follow through with that and it's almost always a big mistake. the temptation to take a gain is almost so palpable, it can take every fiber of your being to go

against it. when i first pinned that game to los, i was really talking about trading winds, not investing in gains. by all means, do your best to make it a franchise player. stick the nontrade label on it. you won't reget it as long as the fundamentals stays positive. you truly will be to blame if you go with the gains. that's the only time you should rid yourself of a core holding. all that great research you did out the window, once a stock is dubbed a franchise player, hold out for better prices. buy, buy, buy. when we own a stock that i think is materiel under valued, i have to do everything i cannot to

take the gain and eliminate it. that disparity between what it's trading and what it's really worth, you got to let it percola percolate. it's vital you keep enough left in your portfolio so it will still be meaningful. they are meant to be core positions. franchise players and they are supposed to be halohaloed ground. just because of some short term market turbulence. core position is what it says. something that's integral to your portfolio. it should not be so easily dislodged. i know we've been able to more core positions for the trust, we would be able to donate a heck of a lot more to charity than the $1.8 we've given away. resist the urge to sell your

franchise players no matter how tempting it might be. the only time it make sense is when the fundamentals take a nose dive. you need to let these these. keep it from getting too oversized versus the rest of your portfolio. mad money after the break. guys! you're not gonna believe this! watch this. sam always gives you the good news in person, bad news in email. good news -- fedex has flat rate shipping. it's called fedex one rate. and it's affordable. sounds great. [ cell phone typing ]

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>> we got to get to some of the tweets you've been sending me @jim cramer #mad tweets. how is your exit strategy before you buy a stock? if i sign it a franchise player, you can read all how i grade thing and price charts in our weekly bulletin at the end with stephanie link. two, let's go to tweet from andy soren citizen. best piece of advice you've actually gotten. they don't all go up at once. i used to get very upset that stocks went down on an up day. it would be just driving me crazy. they don't go all up at once.

keep that in mind. up next, a tweet from at sammy d 1,thoi, jim, are you a fan of selling puts in order to start a stock position you like? >> what kind of possible dock ka maim my strategy is that? our next tweet is when you have a price target what is the time of fru incision six months a year? >> no, there isn't, i just want to own it and the story keeps checking out, i'll stay it in it. if it starts getting worse, i'll go. >> my next question, my four-year-old son gets excited. hopefully all this stock advice will stick with him for life. i'm a huge believer if you get people in early they can make

mistakes and they got the rest of their life to make up for their mistakes. that's why i'm so passionate about early. let's take a tweet from barney at water m. is a buy order treated differently than a buy cover short order in the nyse order system? >> i don't know what your broker has. >> let's go to a tweet from katie. thank for everything you do for us home gamers, love the snow. you are very sweet. a tweet from at map it beck, how is a little guy supposed to get into a ipo? you need to get $20,000 to get a shot at the shares. it's up to the brokers. i know it seems unfair. it's the way it's been and i don't think you can buck the trend. this is for something that are good clients and the ones they give you if they are not a good client tend not to be that good.

it's a fact of life. life is unfair. stick with cramer. (receptionist) gunderman group.

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i like to say there's always

a bull market somewhere and i prom to try to find it just for you right here on mad money. i'm jim cramer and i'll see you next time. keep up with cramer all day keep up with cramer all day long, follow >> the following is a cnbc original production. >> it may be the most recognizable brand on the planet -- coca-cola. >> the heritage of this company is equal to none. there is nothing as global as coca-cola in the world. >> a $67-billion empire... sold in 206 countries... enjoyed in every house... and we mean every house. found in the most remote corners of the globe, melissa lee reports on the brand with a buzz. >> there was a wee bit of cocaine in the original coca-cola. >> and it's more than just coke. >> zico is 100% pure coconut water. >> 500 different brands to sati