hopefully you should do both of those. >> i'm long calls in s.p.y. and short out of the money puts. >> xle energy, get long. >> sell call spreads in apple. >> happy 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'm just trying to make you some money. my job is not just to entertain but educate and teach. call me at 1-800-743-cnbc. or tweet me @jimcramer when is a loss a good loss when is it a bad loss? what makes for a strong investment versus a weak one

and what happens when the facts change tonight i'm going to show you in real terms what can go right and wha what can go wrong, because i want to teach you how to learn from both my wins and my mistakes so you can replicate the wins at home but avoid the losses ♪ hallelujah these are all taken from real-life investments made with my charitable trust where is we document every trade in real time so we know what went through the minds of both jack moore, our research director, and myself contemporaneously as we tell you what we would do before we pull any trigger so often we're restricted because if i mention one of the portfolio stocks on air on cnbc, the trust is frozen and can't take action. but we can tell you what the trust would have done. sadly, because of the restrictions, the trust can't do as well as you might be able do with the bulletins from acti

actionalertsplus.com but these lessons we learn tonight they encompass the moves we could have made and did make. i'll spare you the gritty details of the actual bulletins though we write them with elan i want to fill you in on the misjudgments that lead to losses and the correct thinking that leads to gains [ applause ] first, let me describe the process of how my trust works. i set it up to keep my hand in the stock market even as my contract wouldn't let me own or trade stocks so i coulding do the show for you without any conflicts. it's designed so any profits, whether from capital gains or dividends, go to charity we give away more than $2.5 million since we started, roughly the size of the fund it's had many co-portfolio managers and research directors during this time, and we've always worked hard, true collaboration, where decisions are made when the research director, jack moore, and previously co-portfolio manager stephanie lee, now portfolio manager at tiaa and still a

regular with "closing bell." at all times we try to run a diversified portfolio, seeking out the best ideas for value, income, and growth we divide the portfolio into these segments and rank the stocks within them so members who subscribe to the newsletter can pick among the stocks that suit their needs i like the idea even as i can often expose to an intense level of public scrutiny i didn't give up the lucrative worrell world of hedge funds where i managed to gain 24% per year versus 8% for s&p after all funds for a less remunerative world of pain and suffering. i wanted to show you how real portfolio managers think, an open hand when they make decisions so you can see how the sauce is actually made, so to speak, unlike the way these money managers present themselves on television i say that because when i see them on tv they never seem to make any mistakes, never seem to do anything wrong and i've seen thousands and thousands of

interviews that's just plain unrealistic. in fact, to g a step further, i think their mock perfection is very discouraging. it's led us to believe no way you at home could ever do things right so you might as well give your money to a robo adviser of an index fund. of the many misconceptions about me, the most wrong is i don't favor index funds. i say all your investigation should begin with index funds because i'm in favor of diversification as defense i am also a firm believer and always will be that if people want to own individual stocks, and they still do, although at decreasing numbers each year, they should have the tools they need to help them, and they need to understand what makes for a good stock pick versus a bad one. why would you want to own an individual stock if you use a fun that mirrors an index you're accepting the mediocre portion of the index along with the good portion.

plus, you know, you've often had insights that are useful in investing and they can be parlayed into excellent decisions. this didn't used to be such a radical idea the notion that individuals shouldn't own individual stocks has come into prominence in the last decade and a half as the index proponents have become more ascendant they come armed with statistics about how few portfolio managers meet the benchmarks but they never seem to be able to put a nail in the coffin of the individual investor's right to research and pick stocks of their own liking they can't refute it's a terrific thing to do and to be able to choose when you want to pay your taxes by selling or not. they don't extol the virtues of not having to report to other investors, something that hurts longer term decisionmaking and every hedge fund and mutual fund out there. that's why i said the industry of money management does you a disservice on television, because the combination of their seeming perfection coupled with

the debasing of your own abilities is a toxic brew for o do-it-yourself do-it-yourself do-it-yourselfers. even as brokerage houses extol your chances and ability to do homework that leads to positive conclusions. recently we've taken much more of a club approach, kind of a membership where we conduct forums to help each other with ideas and reassure others that they can do it too and you can do we have empirical evidence individual investing works beyond my own record as a professional is it all arrogance to think you can do it yourself and you shouldn't check some boxes and send your money to someone who's knowledgeable or won't talk to you or lacking in knowledge but has a handbook of answers or for that matter is just a machine? all i know is when i worked at goldman sachs advising wealthy people of their stock portfolios, i was astonished at how often they crushed the market simply by looking at companies and making decisions based on how those companies and

their managements might do these were my clients. that wasn a time when we had fa less information about companies. sure, information is more perfect these days, meaning that everyone seems to have equal access, not just those who can roam around the goldman sachs library and get the most up-to-date reports the simple fact is i watched people clobber the market regularly, and i've always therefore resented those who tell you that you can't do it yourself i saw it with my own eyes. doesn't it bother you to be told you're a fool and idiot trying to manage your own money it bothers me. for me it's like going to home depot, asking a question among the orange aproned salespeople and being told, sorry, that's only for the pros, not for the do-it-yourselfers. i would find that to be stupid and an arrogant judgment you should feel the same way about those who tell you that you can't do it yourself the only real difference is the home depot people aren't trying

to fete yoget your money from y, whereas those who denigrate those who try to do it themselves are getting you to vender your assets to them their business model they're not just questioned about their motives, which to be fair would be quite rude so, they look like they're always acting in your best interests and they might be most of the time, particularly if you don't have the time, the inclination, temperament or ability to make judgment about stocks and bonds. but say you have the time and the inclination, the desire to do it yourself say you want to save money, not pay a percentage of your assets to someone who may not be better than you are when that percentage can add up to big numbers over time. then you know what this show, tonight's show, it's for you. beth in connecticut. beth >> caller: jim, for my i.r.a., i have a 15-year time horizon. is it okay to be all in a diversified stock portfolio like

the s&p 500 index? >> yes absolutely that's exactly, beth, what i would recommend. i think that's a great way to handle it and i think that's exactly what you should do nick in arizona. nick >> caller: jim, boo-yah. >> boo-yah >> caller: so i had a question about with all the recent mergers and acquisitions going on, how does one maybe try to look for the next possible acquisition or how do you position yourself the maybe make money on that? >> you tend to look at the sector and see when the sector activity ramps up, like in the food group or the teleco group, look at those who don't have enough bandwidth to be bigger and someone else can gobble them up and raise their numbers that's the pattern i've used over multiple years. ben in florida ben. >> caller: jim, thank you very much for everything you do >> thank you >> caller: i listen to your podcast every morning on my way to work.

>> thank you >> caller: just a quick question i've called before and you've blessed my diversified portfolio, and now i need a little help on how to adjust my cost pay sis trabasis trading aa position >> unless a stock is going up 25%, i don't want to take any off. stock goes down say 20% and i buy back the stock i took off, it's in a bunch of my books. you know what, these days, i'm actually discouraging a lot of trading. i don't want to have too much trading because the trust doesn't want to incur the fees but it certainly makes sense if the market has a big spurt up and your stock went up with it, to take a little off the table ready to take your financial future into your own hands then tonight's show is for you i've got the lessons you need to know to get ready to do it plenty more "mad money" ahead. you've often heard me say there's a great space for speculation, but four rules you need to know before you buy them make sure you have them. then it's one of the worst

possible actions you can take when it comes to your money. i've made it myself and i want to help you avoid it find out if you're at risk and my cautionary comments when it comes to investing in commodities. stay with cramer >> don't miss a second of "mad money. follow @jimcramer on twitter have a question? tweet cramer, #madtweets send jim an ex-mail to madmoney@cnbc.com. or give us a call at 1-800-743-cnbc miss something head to madmoney.cnbc.com. it's time for sleep number's 'lowest

prices of the season' on the only bed that adjusts on both sides to your ideal comfort, your sleep number setting. does your bed do that? right now our queen c4 mattress is only $1199. plus 24 month financing. ends monday. visit sleepnumber.com for a store near you. ♪ let out your inner child at the lexus december to remember sales event. lease the 2018 es 350 for $319 a month for 36 months. experience amazing at your lexus dealer.

this show tonight is all about learning from my mistakes. [ buzzer ] and from what i got right from my charitable trust. we're starting from the proposition that you do want to do it yourself, meaning manage your own money, and what i would hope you do with this show is help yourself to try to figure out if you can actually do it on your own or maybe it's just too difficult, you have to send it to someone else. that's okay. no sin i want to start with a classic mistake, the choice of stock in a company itself less and less to do with investing in drug stocks ark sobering one for anyone trying to profit from pharmaceutical. we started from a schism proposition, buying companies doing breakthrough medicine that have something special in the pipeline, which could move the needle in an important way that's what drug stock investing is about

the idea behind this kind of investing came about from something that happened to me in the 1980s before i started my own hedge fund merck, at the time the greatest pharmaceutical company in the world, because of its magnificent reputation for new drogs and constantly improving on old ones, had pioneered work with the harvard medical school that showed a link between heart attacks and cholesterol. the company discovered a cholesterol-lowering agent it thought could save lives but wall street was skeptical. it was considered to be an unimportant new drugs. little did they know statins would become the greatest class in history the stock doubled when the sales came through, and ever since i've been looking for the next from a pharmaceutical company that has established able drugs. that's very important because what you want to avoid is a company that has only one or two drugs in the pipeline that one day might or might not be approved for use by the fda.

anything like that could be too risky for you. from the detritus of the biotechs we know this. the ones that never got approval and ended up limping along forever until they were put out of their misery. i've had tremendous success isolating these kinds of companies, the good ones, whether it be bristol-myers for breakthrough cancer therapy or celgene with its exploitation of a drug, or regeneron with its franchise. one of the most important kinds of stories you can own and you always should be on the lookout for the breakout in the last few years by research director, jack moore, and i have found two situations. both companies trying to solve the biggest crisis of the baby boomer generation, alzheimer's a couple things you need to know about alzheimer's. first is millions upon millions of people suffer and will suffer from it. second is there is no serious treatment that can hold the disease off or maintain it at an acceptable level third is many have tried and

failed to find a cure. but fourth and most important, if you have a medicine that can reverse brain plaque, which is thought to be the cause of the illness, it would be the biggest drug in the history of all time. billions of dollars at stake the company that's had the best success in early trials is eli lily, the indianapolis giant we've heard them several times over the years as they reported on the progress of the drug. we selected them for the charitable trust knowing they have a good balance sheet and nice-sized dividend. when we purchased the stock in the high 70s we had hopes it would reveal data points that showed some definitive success in its battle against alzheimer's. but in the past few times the firm has spoken about the drug we detected a more prolonged set of obstacles when they spoke not that long ago we sensed less optimism on the drug ice prospects, seemingly less to find success we weren't alone the stock dropped to the low 70s

after its presentation of some of the findings of the drug. out of frustration, the trust sold eli lily, not happy with how long it would take for this alzheimer's story to play out. weeneded up taking a small loss on the stock now, there are four lessons here first we were dead right to be sure that we had the upside of the other drugs, the reputation of the firm, and the good dividend it allowed lilly's stock to bottom at dividend and contained our loss lesson one, if you're going to speculate, make sure there's something to fall back on. step two is trickier the stock bounced back and we decided lily's prospects were better than we thought and there were other drugs in there and it didn't discontinue the work on the alzheimer's drug that meant the stock bounced and bounced hard after we sold it. so your take-away, if you didn't have homework to know enough of the drug and to keep the earnings up basically, you didn't need to sell the stock when this one drug didn't pan out. at the very least you could have waited for more of a bounce and

sold it at a higher level. really surprised we did this big mistake by me. third lesson, the time to buy a stock with a drug is after people have given up on it but before the trials are discontinued, which often hatches. that's when expectations are at the lowest we took a swing at lilry when many were excited about the prospects for the alzheimer's therapy. rather than waiting for the dying down of any talk about the medicine, so it was like maybe it works, maybe it doesn't the investor event where it was talked about first, the one that intrigued us, was very well attended we were far from alone when we bought the stock, so therefore we paid too much for the -- the trust overpaid it was far better to wait until it wasn't top of mind for any investors, and that would have been just a few weeks after the meeting. fourth and final lesson, when you're investing in a drug company that's going after a specially intractable disease like alzheimer's, be more skeptical than you'd be with a

disease that's easier to treat this happened with biogen too. so many drug companies have failed trying to fight alzheimer's that it's way too arrogant to bet that you're on the right path with any one company's research department. so here's the bottom line. kwhn you'when you're going to is a company with a potential cure for an intractable illness, make sure that company has multiple drugs away from it in the pipeline and a good balance sheet as well as a dividend to protect the downside second, if the drug doesn't initially work but it hasn't been written off, expect a bounce a better time to sell. third, don't buy the stock when there's still a ton of hoopla out there about the new drug wait until the fuss dies down to get a better price for the stock. finally, when you have a drug company up against a difficult disease that many others have failed to cure, please be more skeptical. there is a reason that others failed it's an incredibly difficult problem to solve the company you like might fail

too. investing can be a challenge, but now you've got the rules to help you invest. still more "mad money" ahead i'll help you avoid a rookie mistake that plagues many investors, even me and the truth about commodities could cost you dearly in your portfolio. and time to take on my biggest challenge of all -- your tweets. i'm answering the questions you've been sending @jimcramer, #madtweets stay with cramer ♪

[vo] progress is an unstoppable force. the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event.

tonight i'm teaching you the difference between right and wrong. sounds like a tall order, but since i'm a stock guy, not a philosopher, when i say right versus wrong, i mean what's smart versus what's dumb in the context of investing >> boo >> in the unlimited world of the stock market, right is whatever makes you money without breaking the law, while wrong is whatever loses you money. >> ahhh! >> as an investor, the easiest thing is after the fact. hindsight is 20/20 it's hard to get things right when you're emotional and

predict the future that's why i want to educate you about some of the moves of my charitable trust the idea behind the newsletter is we can help you become a better investor by playing with an open hand we tell you what we'd like to do in an ideal world with the trust trades with restrictions because of the show. fortunately, these bulletins give us a terrific glimpse into how we were thinking at the time, contemporaneously, we meaning my research director jack moore and i, which allows us to learn from our moves and make judgments about what we were doing at that moment that was so darn wrong. as a do it yourself investor, be patient. you don't have to punt or dump the stock if it doesn't work out immediately. you don't have clients breathing down your neck getting angry if you're not making them money quarter after quarter, month after month, or in extreme cases

day after day. unlike a hedge fund manager, you can wait for the story to play out itself you don't have to be so hard on yourself but it's a big mistake to forget that fact, something we did when the charitable trust bought tyson foods in the $40 range in 2015 jack had come from the research department at barclays he did a considerable amount of research on tyson, becoming more of a proprietary food company back in 2014, which you might recognize as the maker of ballpark franks, jimmy dean sausage. we wanted to be early, to get in before everyone else realized the transformation that would cause a rerating, so to speak, of tyson, meaning shareholders would pay more for the stock because it would have a stronger, less erratic earnings streak now it would trade as a full-line food company with lots of product line extensions, proprietary branding that would allow it to charge more for its merchandise, regardless of the

price of the food stuff. that's what happens. plus we believed the synergies of the two companies would become more evident. they often do early on in the merger and numbers would go h h higher than consensus we call it, meaning what the analysts who follow the company were expecting the company would earn when it reported there was just one problem the merger came together more slowly than we pated the result, when tyson reported, the street was disappointed. and you know what happened instead of raising the numbers as we're used to after these deals, the numbers cut >> boo >> i didn't see us as being early. i saw us as being wrong, and we told subscribers we had screwed up so we had the charitable trust cut its losses in tyson. it was small because we bought the stock. however, we did give up too soon sure enough, literally the next quarter, we saw the gains and synergies we predicted and tyson never looked back on a the way to a 50% gain from where we sold

it. >> the house of pain >> we had faith in the situation would totally work out in the end, but we didn't have faith in ourselves and our own homework we didn't have patience. we were too skeptical and the charitable trust missed out on a huge win in reality we should have bought more instead of cutting and running. there was no reason to take the action other than our own disgust that we did. that's never enough to justify what ended up being a terrific payoff yeah, we were just angry and bummed and we took action that was wrong. how about this one this was a doozy starwood hotel we had come to love the work of former ceo fitz van patrick, a frequent guest on "mad money." tremendous operating skills. turned the domestic chain into a worldwide powerhouse what we didn't know is fritz had a shareholder base that was unhappy with his progress, even if we thought the world of him when the company dismissed him, the stock fell and we were

mystified how anyone could find fault with the track record. not long after, it folded from the 60s and the 80s, and managed to sell some, which is a smart move then starwood dropped pack to the mid-60s where we got a hard to value takeover bid from marriott that failed to generate much support and the stock fell on the news. stayed low in fact, it kept going lower as it reacted to the world travel picture as well as the decline in acquiring the stock starwood was in one of the most painful positions the trust had in a long time and we weren't sure what to do. so we decided to hold onto it until the pain got too great when it fell below 50. first whenever we get a bid, this combination seem so great, i thought the stock had to go higher, not lower. that was a bad judgment. second, we totally ruled out the possibility another buyer who liked starwood in the 70s would

like it now in the 50s when it had a move back up to the 60s, boom, we booted it. big loss mistake number two, not long after, a chinese hotelier came in and offered a premium bid for starwood we watched helplessly as marriott and the chinese got into a bidding war and the stock soared $15 on the table after that loss. so we have seen the bidding war coming that's a hard one. but we should have been patient enough to wait for something good to happen we believed in the synergy between marriott and starwood. we had to stop caring we missed out on higher prices and were stuck with a failed combination when marriott stole starwood from the shareholders. we had several options we could have bought more in starwood when it fell which would have been a terrific idea. we failed to to do so. we failed when we bailed that would have made sense we didn't do it. or we could have just held starwood and stayed patient and

would have been rewarded we didn't do any of those things we got disgussed and took our bat and ball and went home worst possible choice. don't act on emotion, don't go against your homework. the you think a stock deserves to go higher because of a rerating or takeover or anything else that would produce a great gain, wait no one's looking you can afford to be patient don't dwgive up on your best ideas. don't give up on yourself. eric in texas. dew point>> caller: big san antonio boo-yah to you, sir. >> what's happening? >> caller: i have 50 stocks in my portfolio and they're all dividend payers, yield about less than 0.25%. can you tell me what other metric i can use to ensure the dividends are safe >> we have a cash flow analysis in "stay mad for life. it's a very in-depth analysis how to calculate the cash flow, which is more important than the earnings per share in terms of

trying to figure out if the company's dividend is safe tom in new jersey. tom. >> caller: hey, jim. thanks for taking my call. >> sure. >> caller: a week or so ago you mentioned that if you got a portfolio of about $10,000, you have a basket of stocks of about five stocks. >> right >> caller: if that portfolio grows with the help of "mad money" to like $100,000 or even a million, what would be the number of stocks you would suggest to be comfortable with >> i'll tell you, the problem is to really follow a lot of stocks -- we follow a lot of stocks for action alerts because there's two of us and we do a huge amount of homework. most people have a hard time following ten stocks if they have a regular job that's the max i would tell you you can handle that's after many years of looking into this. right and wrong, any investor in the world could be tougher than black and quite, but when you avoid making emotional decisions and rely on the homework you've

done, i bet you'll have positive results. more "mad money" ahead, including what you must know before investing in any energy stocks don't miss it. then you know i always tell you to lock in profits, but there are some times when selling can be just plain wrong. plus, this is the most interactive show on the planet for a reason your mad tweets are coming up, so stay with cramer.

she's nationally recognized for her compassion and care. he spent decades fighting to give families a second chance. but to help others, they first had to protect themselves. i have afib. even for a nurse, it's complicated... and it puts me at higher risk of stroke. that would be devastating. i had to learn all i could to help protect myself. once i got the facts, my doctor and i chose xarelto®. xarelto®... to help keep me protected. once-daily xarelto®, a latest-generation blood thinner... ...significantly lowers the risk of stroke in people with afib not caused by a heart valve problem. it has similar effectiveness to warfarin. xarelto® works differently. warfarin interferes with at least 6 blood-clotting factors. xarelto® is selective, targeting just one critical factor interacting with less of your body's natural blood-clotting function. for afib patients well-managed on warfarin, there is limited information on how xarelto® compares in reducing the risk of stroke. don't stop taking xarelto® without talking to your doctor,

as this may increase risk of stroke. while taking, you may bruise more easily, or take longer for bleeding to stop. it may increase your risk of bleeding if you take certain medicines. xarelto® can cause serious, and in rare cases, fatal bleeding. get help right away for unexpected bleeding, unusual bruising, or tingling. if you've had spinal anesthesia, watch for back pain or any nerve or muscle-related signs or symptoms. do not take xarelto® if you have an artificial heart valve or abnormal bleeding. tell your doctor before all planned medical or dental procedures... ...and before starting xarelto®-about any conditions, such as kidney, liver, or bleeding problems. it's important to learn all you can... ...to help protect yourself from a stroke. talk to your doctor about xarelto®. there's more to know™.

welcome back tonight we're learning lessons from my charitable trust, actionalertsplus.com, the good and the bad so you can be a

better do it yourself investor let's delve back into a series of costly mistakes i made from when oil peaked in 2013 right through the oil market bottom in february of 2016 there are so many mistakes it might take a whole segment to figure them out and explain them first, investing in commodity stocks you must immediately recognize it doesn't matter which one you hide in. better, worse, high growth, bare when the underlying commodity gets hit, they're all going lower. >> ahh >> i've tried to buck this principle by adopting a high-growth, deep-value strategy where the charitable trust bought the highest quality company, in this case eog, and the one i thought had the most takeover hopes, marathon oil i was wrong on both counts >> the house of pain >> first, even though eog had the best properties, ones that actually made money when oil was in the 30s nobody cared.

oil stocks traded like they were part of an etf and nobody compared eog might have been better or worse than the others in the etf everyone had spent too much money and weren't able to rein in spending fast enough to deal with the declining price of crude. marathon was worse they ste v decided to split offs refining and marketing businesses from its exploration and production business at what amounted to the top of the psych until crude. >> boo >> without that refining cushion, marathon was about as vulnerable as any of the cash-strapped independents we saw the stocks plum edmonton from the 20s to the high teens before we booted it. we dodged it down to 7 buck where is the company had to issue more shares just to stay afloat unfortunately, the trust took a major loss, which did not endear us to subscribers. it wasn't that bad in the oil patch, though, because we had some foresight when it came to the combination of kinder morgan and anthony ceo rich kinder put

together deciding to go after a big run. even though i've written up rich as brilliant and he insisted his company was a toll road than a play on gas and pricing he was the first ceo to slash distribution, which effectively revealed that kinder morgan had much more than toll road ex exposu exposure that was a sign the group had become unstable and the yield were unsafe even though he changed his company to a c korp. after examining the company to see which company could maintain the yield, we went back in and brought energy transfer partners, etp. not long after the stock spiked, and i was able to offload a considerable part of the trust position, but not all of it, as oil plunged, energy transfer partners plunged with it even with a big yield i thought would save it. buying some low and selling higher, it was not one of the

trust's finer moments. the moral -- don't think you can outrun a commodity grim reaper and there's no such thing as a toll road that you don't have to worry about even though i thought there were regardless of the price of oil see, if oil goes down, something does happen. companies don't pump enough, and if they don't pump, they can't pay the pipeline companies or they don't need them, and those very high yields could be illusory something good, how about this one of the hallmarks of the charitable trust since i've been working with jack moore is we let the best ones ride we don't take short-term gains on winners when we think they're worth a great deal more than they're selling for. but there are times when one of our stocks rally so far in excess of the fundamentals we have to take action, and that was the case of the 50% gain we had in starbucks' stock. near the end of 2015, they shot up to the sixty where it was selling for more than 30 times earnings at the same time, its earnings growth was about 17% now, you can pay up to twice the growth rate before you get

severely overrvalued, but we fel this run happened too far too fast and began to attract sellers from any sign of flagging growth. we decided to ring the register in this longtime position. sure enough, slight deceleration in same store sales in the united states and china. but the stock fell and fell hard, losing more than ten points almost instantly. at those levels it was no longer expense soif we started to rebuild the position selling starbucks near the top was a smart move because it's a rare stock that can equal the hype that comes with a 30 price-to-earnings multiple and even the great starbucks wasn't one of them. finally walgreens, bought in the low eighty because we liked the changes being made but we recognized the company wanted to do more acquisitions in late october 2015, walgreens announced the acquisition of rite aid and it stock went flying to 95 bucks i had little faith the deal

could go through quickly with the justice department's antitrust division so, we sold as much as we could before the stock started coming down. and man, did it come down. first low 80s, then the high 70s. were we able to replenish the position i only wish we had the same foresight with regard to allergen during pfizer's aborted takeover bid for the big drug company. you had allergen with an overseas mail drop able to pay much lower tax rates than it had been based in the u.s., was being bought by pfizer for a princely some of $360 a share. while the stock didn't trade that high, it climbed in the low 3 hurricane katrin 300 as waited for it to close. then allegations of allergen and pfizer crafted the deal to meet the terms laid out by treasury for approval but then the government totally changed the rules on the company, literally making so

this specific deal was spiked and not others i didn't see it coming and allergen quickly shed 100 points what did i do wrong? i trusted the government to keep its word love it. didn't see it coming and allergen shed those 100 points yeah you know what, in an era where deals have been killed left and right, with the most activist antitrust department in 50 years, i don't think there's necessarily a reason to believe that any deal is going to be a given going through, especially one that is now politically up p unpopular. yeah, i trusted the government to keep its word allergen and pfizer acting as rogues not true the government changed the goal post if i knew enough to take profits, why didn't i know it would be too dangerous to hold out for the pfizer/allergen merger simple answer. i was greedy and the bottom line

is in this business groo ed is just plain bad and don't let anyone on or off screen tell you otherwise. "mad money" is back after the break. (siren blaring) ♪ working as an emt in a small town usually means hospitals aren't very close by. when you have a really traumatic injury, we have a short amount of time to get our patient

to the hospital with good results. we call that the golden hour. there's nothing worse than when we're responding to the hospital, and the hospital doesn't have the right specialist. evaluating patients remotely, by an expert, is where i think we have a potential to make a difference. robots can do a lot in medicine these days, but they can't think. they're still machines. for nuanced decision making, we still need humans. we would save a lot of lives if we could bring the doctor to the patient. verizon is racing to build the first and most powerful 5g network that will enable breakthrough innovations to take place. as we get faster and faster wireless connections, it'll be possible to bring those capabilities to more remote sites, and be able to operate on a patient in a way that was just not possible before. when you think about underserved areas, you tend to think of remote locations. but the reality is, an underserved area is anywhere where the person that you need, who has the expertise for the problem that you have,

is nowhere near you. low latency is crucial for things like surgery, because the response time has to be immediate, it has to be real. i could put on vr goggles like these, and when i move my hand, the robot on the other side will mimic the movement, with almost no delay. who knew a scalpel could work thousands of miles away? (dr. vasquez) it's going to be life-changing, and life-saving.

boo-yah! >> for most of tonight's show i've been talk about what you can learn from the mistakes i've made running my charitable trust, actionalertsplus.com. it has a club feel to it now let's talk about what you can take away from some specific wins that did defy the odds and the first is facebook. hard to remember when facebook was considered failing to live up to its potential. it was viewed as a real loser or so for the first year after it went public. i was aghast at how it missed

the migration. confused how a bump of smart people could have been so baffled by this change in the way we consume information didn't they know better? i watched the stock get pummeled and saw a lot of famous people's names, some big-time names, give the stock the boot but i'm a huge reader of conference call transcripts so when facebook was trading in the 20s, they had a really good quarter. they talked about switching rapidly. you could tell the advertisers were flocking to it. however, so many people have been blown out of the water by facebook's disappointments they were in no mood to listen to the positive story given we didn't have a position in the stock and therefore didn't feel scorned, we weren't down, we weren't upset, we bought facebook for the charitable trust in the mid-20s and faced a rally after that how did we hang on each quarter showed an improvement this the numbers the price-to-earnings multiple wasn't expanding, and i always question that, you were paying the same amount for bigger earnings growth, the best kind of situation then panera bread, had lost its

way, the ceo has come on repeatedly talking about the flaws in the chain a place i love and order from my friend we had father's tay lunch there. but he said the lines were too long and you were standing in a mosh pit, his words, not mine, as you waited to order he said he was going to change all that to panera 2.0 when a chain decides to do a makeover, it tests things out in one city if the rollout is successful in one part of the country, you can bet it will work in other parts too so we made it the number-one pick for the charitable trust. sure enough, panera's stock had a great run over $200. that that's the power of a restaurant finally, there's apple i know there have been billions of blog entries and newspaper articles and pieces on television about how apple -- how it's doing and since the death of steve job, whether it's deteriorated so many people seem to believe the best days are behind it.

i see apple's reinventing itself with a service revenue stream that could only be large enough we could put a price on it, not yet. i see that stream easily augmented by v acquisitions. i see the iphone franchises be not nearly as global and i see tim cook spending a gigantic amount in research and development that i bet will pan out. there seems to be a hard bias against the stock. it stems from apple's own past success. it's stoiled us because it seems like the iphone can never be made better. because the service stream which currently come prs the fees used to back up your pictures in the cloud and the music stream seem like they're back door to a service revenue stream doesn't mean it should be dismissed. who cares how apple got there? the truth is the service revenue stream will transform apple into something bigger provided they can make acquisitions to augment that stream in a timely fashion. that's why i'm saying apple stocks should be owned, not traded whenever apple gets sold, wall street is frustrated you can't afford to take the

long view if it bolsters the service stream, which would offset any margin issues the bottom line, solid growth stories are hard to come by, and when you find them, you need to hang onto them for the ride. don't switch out into inferior merchandise simply out of frustration or out of boredom. stick with cramer. for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain.

with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember.

time to take some questions from the smartest viewers in

television if you've got one for me, send it over @jimcramer, @jimcramer@jimcramer, #madtweets what advice would you give someone wanting to day trade in this market? my advice is unless you want to quit your job and do nothing but stare at your screen, please do not do it, it's way too dangerous. even then, i don't think people will have enough edge these days and the market is too thin to do well and the algorithms are in charge i'm going to say don't do it next we have a tweet from athadbruins. what should i read after i finish "confessions of a street addict"? read "one up on wall street w00t" by peter lynch available on amazon. what you see can turn into what money you can make coming up, a tweet from @ksdnj1 asking about my garden do you start from plants or

seeds? on my way out to get stuff for a garden and i have never gardened before i do a mixture i like to buy some seed, particularly for radishes and oranges but also for -- i mean radishes and carrot, also for some tomatoes and definitely for beans. i never do anything other than -- although, yeah, there we go, other than in beans. now, look at that. nice-looking guy but here's the thing when it comes to the tomatoes i get from home depot, i've had fabulous success so my flats do work better, but i do want to thank some of my camera people like frac who gave me some good seeds that work very well. that's frac. he gave me seeds i'm not kidding. he did and i thank him now we have a tweet from padion who writes, thank you for being so nice to my friends visiting in the city. you made their day i always tell people i am so honored that i have a show and they bother to even watch it, so, yes, if you come up to me and you want to take your

picture with me, i am more than happy to do it, particularly on the floor of the exchange. people are amazed, wow, what a nice guy i'm supposed to be a mean guy? i'm thrilled i'm an older guy with, you know, taking a picture with george clooney in some movie about money. anybody see that one louis c.k. next up is a tweet from @ran dleclayton he asks, thoughts on trend of some restaurants charging more, paying employees more and banning tips i don't know i got to tell you from my small plate mexican restaurant, if you ban the tips, you ban the good people from working there, and there's not the way to maintain an establishment so why don't you stick with so why don't you stick with cramer the stakes are so high, your finances, your future. how do you solve this?

you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

i like to say there's always a bull market somewhere, and i'll find it just for you here on "mad money. i'm jim cramer i'm jim cramer see you next time.

yes! amazing speed, coverage and control. all with an xfi gateway. >> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ is jason lucash and michael szymczak with a creative new technology business. ♪ i'm jason... and i'm mike, and our company is origaudio. we love to travel. we're total travel junkies and have been all over the world. and we also love music. and the great thing is, our company combines both.