>> ahead of earnings. i think the mobile nber is going to be great. >> and you're -- >> i do a little facebook. >> i'm melissa lee. thanks for watching. see my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. >> hey i'm cramer. welcome to "mad money" welcome to cramerica. other people want to make friends. i'll just trying to make you a little money. my job is not just to entertain but educate and teach you so call me or tweet me @jimcramer. could a clueless market be gained. can the dazed and confused market like this one which makes

bizarre correlations taking the averages down with it. down later in the day actually allow you to make any money? is it possible to navigate your way through a day like today after really nasty initial decline. the dow only gain 13 points. s&p did backslide .1% but the nasdaq advanced .05%. do you know what the answer is? yes. but first you must accept and come to terms with if not love the basic stupidity of the markets day-to-day and hour to hour judgments before you pull the trigger. let's start with the central premise of this market and that's the primacy of hedge funds over everyone and everything else. all of you out there including mutual funds managers and index players you mean nothing.

you are nothing. you are captive and hostage to the hedge funds who every day were all at the market. you are pawns in their game. which means you're a captive to the judgments that their machines make. again as silly and wrong headed as they are because they manage much more money than you do and make decisions in order to out perform every single day. let's start with hedge fund premise number one of this session. when oil goes down sell the entire market. oil goes down and then ask questions later. hedge funds enter inputs into machines. the prices of bonds, the dollar, the fed, the 200 day moving averages, the commodities and the machines spit out game plans. one of those that seems all important is oil. when oil goes down, the majority of the programs say the s&p 500 should go down too. now this is where it gets really interesting. a common sensecal person knows

it's good for company. it acts as a tax on businesses and you. the common line is the impact is positive right? is it better for you if you pay more for gasoline? however it has changed this die gnattic a bit. suddenly rather than anybody benefitting from a decline in oil the machines assume it's negative. while there are 34 states that are pure takers of oil we have 16 states where energy is a job growth. so the economy will slow and it is oil going down and many companies will fail because oil is going lower. these failed companies including the stretched oil producers with budgets are dedpent upon crude being much higher than where it currently stands can have an overall negative horrendously negative view for the economy. a reverberation.

again, that's their thinking as oil goes lower there will be more and more failures and reversal in employment which so far is pretty good. not only that but lower oil is viewed as a sign that the economy is slowing down which will hurt profits and cause short falls that the stock market isn't priced in. it doesn't matter that oil might be going low curtesy of the crude that we keep pumping. the presumption is entirely that the demand side is very much in dow. if that's the case then china must be falling off a cliff according to this theory and europe must be rolling over too. so if you have all of these worries right in your faces simply because oil is going down. what happens when you get that oil induced weakness? pretty simple. interest rates also go down. why not? you have to presume there must be less demand than we thought or oil wouldn't be going down to begin with. bonds will go higher and interest rates go lower. this happens every time that we

see oil go down. now, after you get oil down, stocks down, and rates lower, do you know what happeneds? individual hedge funds and mutual funds that aren't run by machines but have real thinking brains then come in and buy the stocks of companies that benefit from lower oil prices. some of the buyers try to figure out who benefits from lower oil prices but doesn't meet the consumer demand to stay strong for fear that the machines could be right and economy is slowing. so what do they buy? pepsico, procter & gamble. they all use oil. they burn gasoline to get their products to market and their products are bought even if the economy gets weaker. in the meantime their dividends exceed the coupons on bonds which means they're superior bond market equivalents because they yield more and in the case of procter & gamble management

is slaughtering duracell to make you even more money. that's not the same old proctor. then a second group of buyers the skies are more bullish. they think the lower price of gasoline will fall right to your bottom line and the bottom line of industries economically sensitive, namely the airline which is are doing quite well with cheaper jet fuel as we learned last week when we saw their earnings. their profits should be larger as the biggest costs goes down. the big variable costs, make sense right? united parcel and fed ex. have you seen those? under this theory their numbers are going to be and their stocks are furiously breaking out and that's right. now the real risk takers believe that the original sellers, the ones that think the economy is weak as judged by the declining price of oil so you have to sell everything they think that those people are dead wrong. these aggressive bulls buy the companies that benefit from lower commodity costs like lower gasoline that will get more customers spending more.

because they'll have more spare change. and that's how you get chipotle going higher. they're natural benefits of the few more dollars in the pockets of consumers thesis. but a few others believe if oil is getting shelled it's a sign that economic activity is deaccelerating traumatically. they're amazingly strong. it makes sense in real slow downs exemplified by oil going lower the only things you need to get drugs are the life saving drugs of biotech plus their consistent high growth will be amazing versus all the other companies where growth must be impinged or oil wouldn't be going down. along the way there's buyers of companies with lower numbers. that's moved the disk drive companies. micron followed up with the billion dollar buy back. it's good for this technology. social media is going down but that's going to be a buy too and i wouldn't miss that opportunity.

i think this whole game is insane. you pick stocks based on the prospects for the long-term future. long-term. you try to buy stocks of companies that are doing better than the average company. the ones that benefit from lower oil but people just don't know it yet or maybe you buy companies where you think there will be self-help or take oefrs in the fundamentals are strong. you can be opportunistic but let me give you the bottom line. the moves you see each day like the big decline at the opening are all derivatives of hedge funds making bizarre leaps of faith every session that are most likely wrong. lower oil is lower tax. it's a huge win for you. which is why the central premise that the market must go down on oil's weakness is just hogwash and long you use common sense you'll be able to profit from it but if you buy into the action, like the opening of today, you'll simply be one more victim of the rise of the machines. how about we go to susan in maryland? susan. >> hi, jim, thanks for always

being so positive. >> you know what, i see a lot of things where people send stocks down and they don't know what they're doing. people get too negative. starting to drive me a little nuts. what's up. >> i'm with you jim. that's why i love you. i've been buying stocks for my grand children for their education and have some money to buy more stocks and i want to keep it in long-term. how about johnson & johnson. >> yes, bingo. okay. people aren't really crazy about it. my trust owns it. you know what, sometimes you have to sit back and say you know what those that were selling it down to $98 they will regret it. what happened to people that sold it down to 98? bingo they already regret it. marianne in indiana. >> caller: hi jim. happy booyah to you from indiana. i'm asking about ford. i've been watching it's paint dry for a year and it still looks wet. >> the quarter was not good. there we go. i didn't say the quarter might not have been good but it wasn't that good. gm was my travel trust and had a

better quarter but doesn't matter. people decided that the aerospace and auto cycles are ka put. i disagree and i want to go against the grain but ford is not as cheap as gm. you should not be in ford and you should be in gm. paul in michigan, paul. >> caller: booyah professor cramer. >> booyah right back. >> caller: how is life treating you? >> you know what, if the eagles had won it would be better but my fantasy team won so i guess it's okay. how about you? >> caller: very good. listen nice call on palo alto i made a lot of money this morning. >> thank you. i know they reached out to me they have a situation that makes it so that the 110 strike is now as damaging as i said it would be on friday but that wasn't the point of the piece. the point of the piece was that bulls make money, bears make money and hogs get slaughtered and i have been behind this thing way too high for way too long but why don't you help me with a question. what have you got? >> caller: alibaba's ipo you

said to wait until the price point hit the low 80s but it never made it there. made it to about 85. now after the buy rating and the price target at 118 what should we home gamers do. >> i kick myself. i make a lot of mistakes. i think i make fewer mistakes that right calls but i should have patted the table when it dropped down to 84 because i think it's going to 110. i'll give you this one i think alibaba is going higher. i did say to own yahoo! which was the way i said to play alibaba. i reiterate that. twitter, i'm going to take heat and i'm going to say it here. twitter is a great long-term investment. let people throw it away and let people criticize me. you know what, i have real things to criticize me over. don't criticize me over liking twitter and don't criticize me over liking yahoo! and saying alibaba is good but i missed it by $2. there we go. it's a clueless market and that will help you gain it. accept the facts of the daily

judgments but then realize they could be wrong before you pull the trigger. why not try common sense. let me tell you what's on tonight. there's a big call on wall street tonight driving the industry lower. the only problem it could be dead wrong instead of creating a big buying opportunity. why focus in on the move to healthier food i have a company buying the whole organic and natural trend and ceo behind allergan. he's at the center of a big battle and he's speaking out only on "mad money." stay with a combative cramer. >> don't miss a second of "mad money." follow @jimcramer on twitter. have a question, tweet cramer #mad tweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com.

>> for those of you that think the stock market is inherently boring take one look at the soap opera that is the continued

hostile take over bid for allergan. ever since they made the offer in april they have been fighting tooth and nail to stay independent and they're still fighting even as valiant upped it's bid twice. the reason? they're a giant roll up. they acquire giant drug companies and slash to boost profits including research and development spending but allergan is focused on developing new drugs or new uses for old drugs like botox to move it's business. they have taken action to boost earnings by restructuring the business and that's paid off it has company keeps reporting fantastic results. earlier this month they preannounced the upside and then beat the preannouncement. off of a $1.76 basis with higher than expected sales of 17.2% year over year. also this morning valiant sent a letter indicating they might be willing to raise their bid to 200. it feels like what they're

saying is if allergan would quit criticizing our stock our stock would soar to new highs and that would make the stock portion of the hostile take over much more valuable. let's take a look at the chairman and ceo of allergan and get to the bottom of the situation. >> thank you. >> all right now, you're one of the longest running guests on our show. how is the company able is make so much money now versus say a year and a half ago before valiant got involved? >> luckily for us if there was a time to be dealing with this it's a time when you have a huge momentum in sales growth and this last quarter you gave the number 17% dollar growth. it was the very best quarter in all of our 64 years as a company. >> now, some of this is botox but it's the logical that really shocks them. where is that major growth

coming from? it's always been good but now it seems great. >> yeah, there too we have great momentum. this past quarter about 14% worldwide growth. that's in the market growing about 11%. so again we're exceeding overall market growth driven by multiple products. some that we discussed before. restasis growing double digit in volume. our glaucoma products. growing also 11% and then finally a new product for diabetic edema and i actually let the number out how much we sold this year. almost $120 million in the first 9 months and we have a lot more to come because we just got fda approval and european approval for die mettic m-- diabetic macular edema. >> why do you have to consider

making any acquisitions? >> valiant is really trying to buy us with our own balance sheet. we have been very disciplined about how we deploy our capital. we have currently $4 billion in cash and we ourselves could make a big acquisition if it made strategic sense but only if we continue to add to the value of the company. >> people not that close to acquisitions might say if it's really so great why doesn't allergan buy valiant? >> they're very strong organic growth and we would like to watch. >> organic meaning they actually do it through rnd and through own strength of -- of management as opposed to buying someone. >> and building and creating markets. we have created botox cosmetic, this year, restasis easily a $1

billion drug in the united states. and then of course the greatest story right now is volumizing fillers, just going gang busters. >> which i know that the former metasis ceo thinks you have the best product. >> he does, indeed. this culture dermal fillers have grown worldwide. >> metasis was bought by someone else. >> it's a small industry and we all know each other. >> you talk about on the conference call that this offer that's being made is on the table substantially undervalues the company. so it's not a very long or difficult exercise. then why does this continue? >> well, today's letter was a little strange that it kind of, as you referred in your introductory remarks it talks about an aspirational $200 but really doesn't explain how you get there. it doesn't talk about an increased cash offer. it doesn't talk about changed

exchange ratio of their stock to ours. so it's kind of as you said if valiant stock were to move up the offer would be higher. well, i could also hope that our stock is $300 pretty soon and believe me i'm working on it. >> let's talk about things you haven't talked about. i have a piece in front of me from the national institute of health that says roughly one quarter of u.s. women effected by pelvic floor disorders i know from the work done around the country that's only having a long-term effect against pelvic disorder is botox but that is not in any of your numbers. when can you start a study for 25% of the women in this country? >> well, so far that is not a program we're pursuing. >> how can you not pursue this program? >> well, obviously after this hot tip i should go back to our chief and say hey we got to look at it. but just for grounding us, the products approved for two indications in this country.

spastic bladder or just regular severe incontinence after drugs that dry you out don't work adequately. >> so what is exactly, if we just have to put it out there because i want to end this. let's just end this, what's your message to valiant right now? >> i think more the message is to our stockholders and the general public to say let's go back and see what is the intrinsic stand alone value of allergan and if you look at research, as of a couple of hours ago they put a target price on the mean at $210. so if you think of that $200, whatever or however you get there that seems inadequate and then of course stepping back on to things like price earnings multiples. if you apply historical or even conservative numbers you get to 200 or higher than 200 on a stand alone basis.

>> absolutely. i think the notion that valiant says that without their offer your stock would be lower, i would easily say using conventional methods to get it to 210. you're voted one of the five best ceos bihar vard business school yet i keep reading that you're putting yourself first? that you're selfish. that you're not doing the right thing for shareholders. what is your response and how can you not be visibly angry about these charges? >> well, at the end of the day i think people in a situation like mine should just remain cool and only one thing counts and that is creating greater value for stockholders. people like myself, the rest of management, we are somewhere way in the background. >> i know that's absolutely right. thank you so much. the chairman and ceo of allergan the stock would be as high if not higher with all of this

distraction. only ten people are distracted the rest of the people are busy making money for you. "mad money" is back after the break. people with type 2 diabetes

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maybe this time goldman sachs got it right. i studied two pieces of research today. the first is from this morning saying that brent crude is heading lower. perhaps as low as $80 barrel by the summer of 2015 and roughly $5 from where it is right now. this is a radical change from the previous protection of $100 but i'm also looking at a note from january of last year where goldman said it could hit $150 barrel by summer of 2014. they said oil would soar two years ago and now says it will plummet. let's go over the two. the blown one because it never got too high. and this one made today that scared everybody. last year when the influential

goldman sachs oil analyst made his super spike call he said despite the u.s. boom the price of crude would remain high because of sanctions related supply disruptions from iran. at the time the saudis were pumping at the 30 year high imlying, that's right, the note implied that the huge producer was giving it all she got but while global oil demand has increased at a slower pace it's still growing faster than the production increases. the goldman client note from back then says we're not out of the woods yet. upside risk include low inventory levels and capacity and geopolitical risk which are near an all time high with production in a large number of countries at risk. all of this was happening when chinese growth is expected to include. it implied a 30% increase in the price of brent. really scary.

and as it turns out really wrong. how about this latest piece of research this morning that rocked the street. now after oil has already plunged more than 30% from its highs this past june already and 23 companies out of the energy sector components in the s&p are down more than 20% in the last three months. it's now suddenly time for goldman to sound the alarm. why? let's tick down the reasons. in a piece titled the new oil order this same analyst puts his name on a compelling theory that one, accelerating nonopac production will leave the oil market oversupplied. wait a second, i thought this guy didn't believe that nonopec countries could make a difference. number two, it's driving the global cost curve lower. holy cow! weren't we supposed to be oversupplied despite the u.s. boom? in fact it looks like the u.s.

production needs to slow to get the price of crude stabilize. increed bli the geopolitical tensions he was worried about last year must have lessened. desite the russian gas and the china demand, that didn't materialize. according to the note they're losing pricing power. the same coordinations that were able to maintain price last year. of course this new coal is wreaking havoc within the entire group despite the pressure it's been under already. in particular continental resources really got slammed off of it. maybe i'm being a little too cynical here but what happens if this year's bearish call is just as long as last year's super bullish call close to the peak in the cycle or what happened ifs the incredible declines in the big s&p 500 oils the worst performing part of the group are beginning to accelerate, what happened ifs that doesn't happen? i don't know. they're already down so much.

i don't know. maybe here's the bottom line. judging by the record of the firm, i'm saying maybe, call me skeptical and you have to call me a gentleman too because there was a time when i would have burned the whole goldman research group and put dummies in them. instead i'm looking at this call crushing the oil patch long after it's already been spent, mutilated, and spindled. brenda in california. >> caller: cramer, a booyah from los angeles. >> that's interesting. what's up. >> caller: bought it at 37, now it's at 30. what should do? >> you know what, there's just -- there's another labor problem now. we're talking about a strike. this has been a disaster. my charitable trust made big mistakes this year. i have to own that. made good calls too. people are going to say you own twitter that was moronic but

freeport was bad and we got out and took a loss and that might have been the right thing to do. joe in iowa, jo. >> caller: thanks for taking my call. i purchased wpz this last year mostly for the dividend. i was curious what your thoughts are on it and would you give it a buy, sell, or hold rating? >> it's a buy. it's a terrific company. putting together one of the great, great pipeline companies this country is ever going to see and i want you to own the stock. maybe goldman gets it right. you know? it could be. analysts, they're not always right which is why i'm looking at scans. about this call on energy prices after they're already down so much. call me skeptical or call me a gentleman. there's much more "mad money" ahead including one of the biggest players in getting natural and organic food from the farm to your table. i'll see if this under the radar distributor of healthy food could be about to sprout. and then striker helps people

get back on their feet but can it keep running on wall street? and lightning round is coming up. stick with cramer.

when it comes to the organic

and natural foods one of my favorite long-term themes as i tell you in get rich carefully my advice is you want to avoid most of the supermarkets which are competing aggressively in this category. still like kroger though. and white wave foods is a big winner. it will remain so. but what about united natural foods? it's also know as unfi by people. it's a leading distributor of natural organic and specialty foods from general groceries, produce, frozen foods, food service products and even personal care items. united natural buys various food products for more than 6,000 suppliers. and then it distributes these mainly natural and organic products to more than 40,000 locations. mostly supermarkets. whole foods being the large e customer. lately because whole foods has been having trouble that's been a drag causing the stock to decline 16% year to date but

this company has a solid business with a history of making smart acquisitions most recently buying tony's natural earlier this year. the latest quarter was better than expected on the top line and bottom line and last week they had a pretty positive analyst. it's time to buy this organic and natural food distributor that's down? let's take a look at the president and ceo of united natural foods and learn more about his products. welcome to "mad money". >> thank you. >> thank you for coming on the show. >> all right. i think there's guilt by association here. your company has just had each year bigger and bigger. you got so big you had to spend a lot of money building out distribution and yet it seems trapped by the stocks that are in the area that are all fighting each other. aren't you an arms dealer or don't really care who wins as long as more and more supermarkets are supplied? >> yeah at the end of the day we're happy that consumers are demanding more and more natural organic and specialty products so we build a lot of capacity in order to satisfy that demand and

we have been the lucky recipient of seeing the demand grow over the last couple of years and hope that it continues. >> i would see the revenue growth 12%. one of the things that struck me when i went through your presentation is its clear that you have to spend a lot to be able to build out a natural distribution network but it also seemed the national distribution network is almost done. you'll see the fruts of the distribution without the spend beginning in a short period of time. >> in our business you have to have the capacity. so the industry grows 10 or 11% we grow organically 13 or 14%. we're up in the high, you know, 18, 19, 20% range. and we have to have capacity to satisfy that demand. so that's why we have been building out these big beautiful centers around the country. we think that construction is going to bait sometime in fiscal 2016. >> the earnings could shine through. >> the earns have been strong.

>> they have been strong. there is some mystery because i think that what you're doing is amazingly strong and yet because i think people see whole foods down and some of these other stocks down they presume your business must be hurting. >> well, i mean, there's a lot of increased competition in our space, especially in retail as consumers demand more and more natural and organic product they're more concerned about ingredients, products that are good for you, the retailers are carrying more of the product. that's good for us. >> that's a win for you. >> we talk about the center of the supermarket being challenged. you're the other part that's not challenged right? >> we have always been experts in the center of the store. core commodity dry refrigerated frozen but we also have the country's largest organic produce company. we just acquired a terrific company on the west coast called tonys which is a perimeter company. does specialty cheeses and meats. our view is we want to build out

the store. we want to make sure tt when a retailer wants to buy as many products as they possibly can in our space we can provide it to them. >> you give a recent example, dr. oz said vitamin d is good, fish oil is good and i'm going to mispronounce it. it's good. and the stores didn't have everything that oz wanted but you did and you rushed it over to them. >> yeah, we have 35 or 40,000 skus per location. it's more than any other competitor. >> right. >> and so the beauty of our system is a lot of skus, a lot of concentration of distribution centers. we can get the product the consumer demands into the shelf really quickly. >> where are we in the revolution of wanting natural and organic? younger people? older people? baby boomers? how broad is the demand for products like these? >> i think that them it's a lot

of demand but people my age we call them cross over consumers. they buy a little bit of both but i believe that cross over consumers are continually buying more and more products in the natural and organic space and that's going to continue. >> a cross over therefore would be say being able to buy some of these on e-commerce right? how is that business doing? >> i think e-commerce is still small. there's certain categories of products that work really well in e-commerce but a lot of consumers still like to go to the store. what we need to do is make sure that we give our customers an e-commerce platform so if they choose to go to market either to the house or to the store we can provide it for them. >> you're in a great growth business and i think people are confusing your stock with those that are in a war of which you're the provider of the arms. that's the president and ceo of united natural foods.

you have to look this stock over because it's much as a discount to where i would have expected it to be given how strong their business is. "mad money" is back after the break. an unprecedented program arting busithat partners businesses with universities across the state. for better access to talent, cutting edge research, and state of the art facilities. and you pay no taxes for ten years.

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it is time. it is time for the lightning round. >> had sound and then lightning round is over. are you ready? time for the lightning round. we'll start with steve in michigan. steve. >> caller: captain cramer. a big booyah from michigan. how are you doing sir? >> i'm doing fine. how are you? >> caller: i'm good. how do you feel about shares of pea body energy? >> i'm very skeptical. i can't back away from that. this is the best one if you're going to be in the group but i'm very concerned about coal. >> ellie. >> caller: booyah from richmond va. i'm calling for cofax watching a steady decline since july. i know the third quarter results aren't helping.

i wanted your thoughts. >> this is one of those companies that does fluid handling which is a long-term great business. i'm not going to recommend selling this. now i think the world is going to slow down, i want to take the other side but like many things i like it's not going to happen tomorrow. so those that think it's going to go up because as i said it's going to go up and you'll buy it for tomorrow you'll be wrong. let's go to alex in california. alex. >> caller: hi, how are you doing? >> how are you alex? >> caller: good. big fan of the show. >> thank you. >> caller: thanks for taking my call. my question is about irbt. i want to know what your thoughts are. >> i like the defense aspect of it. i think it's an inexpensive stock. i'd like it to come down a little bit more because the market is dicey here but it's okay. let's go to brian in massachusetts. brian. >> caller: jim how are you doing? >> i'm doing well. how about you? >> caller: not bad thanks. i'm heavily invested in real

estate and i'm looking at stock i wanted to get involved with and one that came across my desk is solar. >> remember the solar stocks are going down with oil. it gets hit pretty much every time oil gets hit so i don't want to get you into that. eddie in florida. eddie. >> caller: good afternoon, jim. >> yeah. >> caller: thank you for taking my call. >> of course. what's happening? >> caller: okay, we spoke many years ago. anyway one thing i want to ask you, please talk to listen to the messages and leave a phone number there to call me back. the issue i want to ask you about i cannot ask on the air but there's thousands of us small investors and you may be able to help us all. >> thank you. >> caller: so please do that and anyway the stock is auto zone. >> auto zone is excellent.

terrific last week. that's o'reilly automotive. auto zone is the best against the buy. i want you to own it and that ladies and gentlemen is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. where the reward was that what if tnew car smelledit card and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet,

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>> if you want to know what's really working right now take a look at the medical device

companies. consider stryker with a stock only a couple of points away from the 52 week high that's we've been behind for years. it's a diverse mix of business making everything from knee, hip and joint replacements, surgical equipment, neurosurgical devices as well as spinal implants and neurovascular devices. they delivered a healthy 1 cent earnings beat off a basis. we have the double digit thing going year over year and management up over all of it's segments. meanwhile striker is about $2 billion in cash. management reaffirmed their full year guidance for 2014. since then the stock has been working it's way pretty hard. by the way it was up $52 just two years ago. can stryker keep climbing? let's check in to get a better sense of how the company is doing and where it's headed. welcome to "mad money".

>> thank you. >> you're the baby boom stock as we have to get replaced and it's pretty likely we might find they are putting in stryker parts. >> exactly. we just recently acquired a total ankle to fill out our lower extremity portfolio. our foot and ankle business is growing for the last 8 quarters and people want it to be more active and they're going in for surgery much more sooner. >> at what point and i think our viewers want to know this at what point is it so painful you want to do that. >> hip replacements hurts all the time. so that's why the hip volume was very very strong. you saw our performance was terrific in the quarter but if you go back over the last two years we have been growing close to double digit over the past two years. knee is more deferrable. you can get injections, shots, you can stay off of it but

there's pent up demand in knees and we expect to see more volume in the knee replacement area. >> how much would affordable care act matter to you and how much is elective. >> so far we haven't seen much in terms of volume increase in our procedures. hospitals are seeing more patients coming through their doors at least for benign treatments and overtime that should lead with more insured, more people seeking elective procedures. >> why is it there's such pricing pressures for some of your businesses? there aren't that many players but they're very competitive. >> it's a competitive market and it's in the bulls eye of a lot of hospitals. they're targeting it and there's a little bit of consolidation so we have two of the players that we'll be consolidating shortly that will take us to four players but it's a very competitive market and high individual dollar items so that's in the bulls eye of hospitals and physicians and hospitals are becoming more aligned whether through being employees of the hospital or working on sharing programs so we're seeing more of a bit of a trade off of volume for price

but it's declining in the 2 or 3% or 3 or 4% range. >> versus the volume. >> absolutely. >> one of the things that strikes me i typically don't ask this but how are you going to say independent? i have to believe that there's big companies that say i want products and the hospitals don't want to deal with a lot of companies. they want to deal with two or three companies. how are you able to maintain your independence? >> we're strong in three service lines, orthopedics and specialist surgery and neuro. we're not in cardio and other areas and hospitals don't buy that way. their pnl is structured by service line. we've done five acquisitions in the last year and every one of them strengthened our presence. and especially surgery and strengthened our presence in neuro. >> some people worry about the maco acquisition. can you address that? >> it's a disruptive technology.

>> isn't that like isrg. >> that's very similar. we're a hard tissue robotic company. the only one on the market. it's very polarizing. even as they have been polarizing in soft tissue. people either believe in it or they don't. they believe they can do the procedure themselves without the need of a robot. we believe it's going to charge form orthopedic surgery. it's a game changer. it's going to take time. we have to put our total implants, we're going to make them compatible with the robot and they'll be on the robot next year so we'll see the upswing toward the end of next year. >> which of the joints. >> today it's just on the partial knee as well as hip. >> right. >> and they're the old mako implants. we're going to put our stryker total hip and total knee. we believe that's the killer application for the robot. >> they do churn them out right?

how many knees do they do in the day? >> there's a huge variation. some centers will do 10 or 12 one surgeon can do in a day. but the vast majority is done maybe 20 in a year by surgeons. >> so if your hospital gets a mako how many can they do? >> it's all about having precise procedures and for the average surgeon we believe you can do at least one extra procedure in a day. so it enables consistency and turnover and change over in the room to happen very fluidly. precise positioning of implants. robotics works in all other industries. it's late to arrive in health care. >> you have a great stock and it's been a winner this year and multiple years and it's because the trends are all going your way. well, anyway, that's the president and chairman and ceo of stryker. first time we've seen this ceo. it's a good solid story of whether the market and the economy slows or stays strong. stick with cramer. people with type 2 diabetes come from all walks of life.

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