>> no, i was just starting on the smh. >> i think that one looks like the one to put on here to me, but i like defining a risk in wal-mart thaw guys for having me. have a great weekend that does it for us here on "options action. don't go anywhere. "mad money" starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica my job is to educate and teach you. so call me at 1-800-743-cnbc or tweet tweet @jimcramer the dog days of august are upon us that's when earnings season goes out without a whimper, not a

bang there is plenty of time to consider and make judgments the number of earnings report that happen each day, they slow to a trickle. let's see what we have in store. we hear from the ciscos, two ciscos, like the two jakes, the first, syy reports monday morning. sysco is important i never focused on this company's investment, just a barometer of how the restaurant business was doing that is until nelson peltz, the activist, whatever you want the call him investor, took a 7% stake in the company three weeks, three years ago and got himself a board seat now this stock's been an incredible long-term performer since then and i like sysco very much, ever since nelson got on and really made a lot of positive suggestions. and they're working. i tend to think of him as an intellectual investor. tuesday morning we get results from home depot, and it's hard to recall another time when people were this nervous about

this quarter for this great company. well, why? first, we know this spring was late the big spring planning season was bust because the weather was so darn terrible take it from this gardner, there was no way to plant in many areas in the northeast or in the midwest. that's not enough to derail this great company on its own, but we are also getting some weaker numbers from many of its supplier, masco, stanley, black & decker, they've all been stinking up the joint. home depot has been a much better performer than all of those. so there is a feeling the stock has to catch up or go down with the suppliers. i think the weather excuse is legit. but given the strength in the stock, it could be due for a pullback sin plus there is a since that home depot has had the run of the joint because lowes was so poorly run stay on the sidelines. only pounce if home depot gets

hit. this is one of the greatest retailers of all time. whenever it pulls back, i think you're getting a gift. by the way, how larry williams' call to take profits in costco sweet. now one of the things that stood out this earnings season is strength in accessories. look at this amazing quarter we got from michael kors on wednesday that was magnificent we know from the department stores that handbags are hot hot. so when tapestry, the artist oformally known as coach reports on tuesday, i think it's going to be very good. i recommend buying some before the quarter and some after after the close tuesday we hear from canopy growth, the canadian cannabis there are no real blue chips here, but we have to imagine what's happening with legalization in canada is akin to prohibition here and it could result in an explosion of things when things really get growing you like that? get going. subliminal i think canopy is the best of breed player because rob sands, the amazing ceo from constellation brands told us the company had great prospects, and

then he bought 10% with an option to buy more the stock has been a dog of late, with hot money trading out betting that the pot trade has gone up in smoke i think that's premature canopy i wouldn't be surprised if the stock is charging up to another run at the highs later this year. wednesday morning we get results from macy's. the stock has been stalled in recent months, and i want to know why does it simply need to adjust gains or does the consumer switch spending habits again all i know is this every major supplier in macy's has told us they're having a bang-up quarter. coar i'd be a buyer after the close we get the biggest earnings call of the week, the second cisco, csco construct robins is transforming this company into enterprise business focused on security that happens to sell a lot of hardware cisco has been awesome to behold

chuck and his team are removing mounds to create a monster amount of revenue. however, other companies that have done this, you might have growing pains through the transition i expect cisco will deliver a good quarter maybe it won't be the monster grower some want, but i believe the repositioning of cisco will take a little time be patient you have the stay in it for the inflection point, which could be right around the corner. call me a buyer. tuesday morning we find out if tim collins is right about the trajectory of walmart stock. on tuesday night, collins suggested that walmart might be on the verge of a breakout, which i happen to believe has to be from this quarter i'll say this. it can't be as weak as the last one. walmart has had toe spend a lot of money to stay compete weave amazon that said, it stores the fundamental of retailing, they look fantastic, and the prices remain divine. walmart has lagged the rest of the party recently i think it's cheap i think it's compelling. we get some fireworks after the

close. first nordstrom reports. to say last quarter would be a bomb is putting it way to lightly. we own nordstrom for my charitable trust, and i'm concerned. i'm worried this has become the gang that couldn't shoot straight and you are best to avoid it the company has inspired no one. while my friend guy adami recommended it, the nordstrom guys always seem to find a trois strew it up. i do admire their consistency. the last quarter was a downer. i think the company has gotten their inventories in line, and i don't think things have gotten worse. in fact, i'm betting like with the competitor lam research, the stock is trying to bottom. well await the conference call but the morgan stanley piece that came out yesterday was a downer then the big one for thursday evening, nvidia. not my dog, but the company. somehow not being candid the rest of the show, candidly, i

keep hearing whispers of a mixed quarter partly because of weaker cryptocurrency but partly because of rivals like amd winning business i just wish the stock would follow suit and cool off going into the quarter finally on friday we hear from a company that is at the heart of the tariff and trade issue, deere. the farmers of this country are starting to squawk that they aren't doing well because of the retaliatory tariffs from our trading partners and that means deere's quarter mace not be up to snuff that said, i think the ceo of adecco the bottom line, it's almost done we've almost made it through earnings season. i say good riddance. too much stress. but don't forget to look for buying opportunities among the stocks i just highlighted because many of them could be potential winners next week. let's go to justin in new jersey justin >> caller: hi, jim, i want to

say thank you to you and your staff. >> oh, thank you, man. thank you very much. >> caller: what i'm trying to say diversify, and i'm screening stock, sometimes when i like one or two, and i'll just pick one stock. >> okay. >> caller: other times is there a handful. when should i start to consider look at a sector etf as opposed to just pick one out of the bunch? >> okay. my feeling is this i think we're good enough to pick the ones that are good in an etf, and i don't fear the so-called single stock risk. i would rather use that as a hedge against good companies that we own. if i think you watch the show long -- look, we figured out fang we created fang. so i like to think we can create a lot of good ideas on here that are better than what the etfs have to offer. okay it's almost a wrap on earnings season, thank heavens, okay? and i got say a hearty bye, felicia. to this one. consider buying some of the

winners before good news sends them higher. i like this one a heck of a lot, and i like this one too. and of course, stick with cramer >> don't miss a second of "mad money. follow @jimcramer on twitter have a question? tweet cramer, #madtweets 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. . join "mad money" for must-see introduce you can't must-see introduce you can't afford to miss who would have thought,

who would have guessed? an energy company helping cars emit less. making cars lighter, it's a good place to start, advanced oils for those hard-working parts. fuels that go further so drivers pump less. improving efficiency is what we do best. energy lives here. improving efficiency is what we do best. at ally, we're doing digital financial services right. but if that's not enough, we have more than 8000 allys looking out for one thing: you. call in the next ten minutes... and if that's not enough, we'll look after your every dollar. put down the phone. and if that's not enough, we'll look after your every cent. grab your wallet. (beeping sound) (computer voice) access denied. and if that's still not enough to help you save... oh the new one! we'll bring out the dogs. mush! (dogs barking) the old one's just fine! we'll do anything, seriously anything,

to help our customers. thanks. ally. do it right. that's confident. but it's not kayak confident. kayak searches hundreds of travel and airline sites to find the best flight for me. so i'm more than confident. how's your family? kayak. search one and done.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. ♪ when there are huge losses in the market, you'll have opportunities to buy good companies with stocks that have become bad because the market turned down. you're going to catch me saying things like buy broken stocks, not broken companies, which is

the kind of saying which doesn't do you a lot of good on its own, unless we put into it a broader market context in a really serious question, almost everything will indeed go down right alongside with those that deserve to be lower. so i think the big question is how do you tell the difference between a broken company that's not bouncing back and a broken stock that could be a golden opportunity? tonight i propose to give you a new way to look at stocks during a big sell-off to help lead you away from broken companies and toward the broken stocks that i want you to own. what's a broken company? let's approach it like this. corrections have caused, right in 2007, for xample, we had multiple sell-offs related to a weak real estate market, lots of bad subprime and regular loans and then the shellacking taken by everyone that owned the mortgages. specifically bonds backed by the mortgages. you mixed the ingredients together and what you got ask a credit crisis. and along with that came your big sell-offs. in the wild summer of 2011 we had a combination of debt

ceiling concerns in the u.s. topped off with an s&p downgrade and liquidity concerns in europe boy, that was a nasty one. same with the analyst declines related to the battles between democrats and republicans in 2012 and 2013, including the government shutdown and that nasty sequester. and fofk you go back in time we had the meltdown in the year 2000, where many stocks just kind of folded up and disappeared. in each of these sell-off we had sectors with companies that were immune to the actual cause of the sell-off like the drugs and foods that rallied strongly after the nasdaq fell apart in march of 2000. and what an opportunity that was unless you were mesmerized by the dot bombs of the year. when you find yourself in the midst of a sell-off, look at the companies that caused it they're probably broken. in 2007, for example, that meant everything touching housing mortgages or reallied any kind of lending if you're looking at a company that is part of the reason for a

correction, you're looking at a broken company those companies are directly in the blast zone, and they might be certain to be obliterated then there is another group of companies that's not as bad as the first group, but is still pretty radioactive these are companies that might not be directly related to the cause of the sell-off, but whatever cause the sell-off should also cause these companies to make a lot less money going forward. their earnings will be hurt. while banks were in the blast zone in 2008-2009, almost all the financials became victims because they had invested in bonds that defaulted or came near to doing so they couldn't be lined the the crisis a company does not break just because its stock goes lower, though in 2007, a great example would be in of the great infrastructure stocks that would get marked down with everything else in a sell-off, or the oil companies, our agriculture none of these businesses was going to be directly affected by the credit crisis that caused the correction that meant the businesses weren't necessarily broken we saw this again in the summer of 2011, preventing many buying opportunities in companies that had very little to do withthe potential a default of the u.s.

government or in 2012 with u.s. companies brought down by european turmoil how about all those companies that did no business with the government but got bang down by the government shutdown and sequester? how about the fact that the defense stocks didn't go down, well, because you know what? frankly, their budgets were pretty good. now there often wasn't a connection to the causes of the sell-off, and yet these stocks get hit. so we need to think about this and what we did, i came up with something that i think will really help you. and i call it the bristol-myers syndrome as in what does that sell-off caused bay cypress bank failure or a mess in ukraine or a federal shutdown or an endless greek crisis have to do with the price to earnings ratio of bristol-myers? most likely nothing, which is probably why it's time to buy. it's worked every time since 1983 put another way, you don't want to buy the stocks that are leading to decline when you're looking for the opportunity to sell-off

you want to look for stocks in areas that are independent of the sell-off even if you think you're approaching the bottom, and the worst performers are about to become the best performers, that's rarely a safe bet once a company breaks, it's difficult for itself to mend and that's only more true for sectors which control half of the stock's movement here is the bottom line. in a sell-off there will be stocks that have clear reasons for going lower, and ones that just get sold along with everything else. the first are broken companies avoid them, please, at all costs. the second group are just made up of broken stocks about and that's exactly where you want to be still on "mad money" ahead, the opportunities created during a market wide sell-off how to zero in on the stocks worth buying and then the common stocks in corporate america could that could be a cause for concern and why vow you've should be watching some stocks rally yeah, bad stocks take control of your financial future with the new

madmoney.cnbc.com. cramer's exclusive ceo introduce, full episodes, analysis, even your own soundboard hello hello plus special access to mad money 101 >> the red flag that makes me drop a stock immediately is -- >> it's everything you need right when you need it the new madmoney.cnbc.com.

♪ welcome back to the special edition of "mad money" where i teach you how to and a half gate so-called market corrections with brutal declines in stocks that would ordinarily leave even the best of us in tears. [ crying ] if not heading straight for the dirty linoleum floor with only a brief layover at the liquor store to pick up some cheap

scotch to wash our troubles away now that's one way of handling a big market downturn, but that's not the way we do it on "mad money. and especially not if we're underage we've been over the big picture stuff, how sell-offs have to be relied on by every big investor. you know you sto have to circle the wagons around what you really like and leave the stocks you're not enthusiastic about in the dust there is a difference between damaged stocks and damaged goods when hunting for a bargain during a sell-off, which is exactly what you need to be doing. you need to go hunting a correction is just a mega sale on stocks, no different than what you might find in all kinds of things at your sam's club or costco any day of the week but now i want to get a little more specific with my method to the madness. tell you about a couple types i specifically like to hunt on for days that are down and the more brutal the sell-off, frankly, the more attractive these stocks tend to look to me first, i like to find stocks

that have pulled back from their highs during the sell-off. the new high list is always a great flies go hunting if you're looking for good investments stocks that are hitting new highs also tend to be expensive or at least they're thought of as expensive you might love the company and think the stock is a great buy, but just not on a 52-week high list and this is what big declines are made for you look for stocks that get knocked off that new high list, that maybe get pushed a couple of percentage points down, maybe 5 to 7% off the 52-week high, because of the market correction, and you're likely to find a lot of very good merchandise. not all of it is going to be worth buying some of the stocks that come off their highs are be going lower for intrinsic reasons. maybe they're damaged goods. but then there are only stocks that can be dislodged from that list because market conditions got so horrible that everything went down at once. when you find a stock that actually needs a correction the take it down, genuine wall

street gibber inch in the decline for average, you probably have something wonderful there. >> buy, buy, buy >> not all the time. you'll have to use your discretion but usually the ones knocked are the stocks that recover hardest and fastest from the carnage, unless they're part of the reason for the carnage meaning a damaged company sit under that damaged stock that's not a place you want to go anywhere near that's the first stock i want you to look at you should have one stock that's pulled back from the highs on your sell-off shopping list at all times, which is really what i'm trying to teach you to make here you want a list of stocks that you would buy if the market took a nosedive tomorrow. even if you would ordinarily take a pass on them because they're so darn executive. that way when the decline does come you'll take advantage of it rather than being a hapless victim there is a second kind of stock to keep your eye on and these are stocks that sell with huge dividends. dividends that become a whole lot more attractive obviously to the share price as it goes

lower, right and yield goes higher. stock goes lower just like you should be watching the 52-week high list for stocks you would buy on the downturn you should be keeping your eyes on stocks that you would buy if their dividend yields were higher a market correction will give you higher yields because it will send the stock lower. pardon me if you know this already. i'm trying reach everybody, though including second graders and 3-year-olds who really like the algorit algorithms. >> buy, buy, buy >> sell, sell, sell! >> the dividend size is 1 dollar divided by the share price say this is a 20 share stock 1 dividend dwighted by $20 stock. that's a 5% yield. sometimes you have a sell-off that is so severe you get what i call ahy, accidental high yielders, meaning stocks that didn't seem to be dividend plays but have fallen so hard so, fast that their dividend yield suddenly becomes meaningful or for a quick bounce back when

times get better you know what? they toned get better. i know dividend investing isn't sexy at all. but believe me when i tell you that nobody ever woke up unhappy the next morning after bringing home a stock with a big dividend yeah, trust me but especially when you're looking at a big decline, you want to get more conservative. you want stocks that are practically guaranteed to put money in your pocket and that's what a dividend does, of course there is no guarantees that any stock bounces back. again, don't buy a damaged company because its dividend has sky rocket it's f it's a damaged company, then you can bet that company might cut its dividend boy, we've got to avoid, that which defeats the entire purpose of hunting for stocks with newly attractive dividends look to company's earnings for profit if the expected earnings are at least twice the size of the dividend payment, i think the dividend should be reasonably secure some companies have giant cash flows, but this will do it for you. bottom line, a sell-off, it's an opportunity to buy, especially stocks that have just pulled off their highs and stocks with nice

yields that have grown larger thanks to the decline in the overall market these are the best places to bargain hunt in the decline of any magnitude. and i'll be right there alongside you, trying to spot them let's go to jada rose in new york >> caller: hi, cramer. >> hi. >> caller: long-time listener. i wanted to know how interest rates will affect my dividend stocks. >> okay, people will immediately sell higher yielding stocks when rates go higher. it just happens every time why? because you know what? bonds can offer more attractive yield with more safety so you swap out the alleged safety of some stocks and go for true safety of bonds this is the way some people think. i personally like growth and yield, therefore i would not be a sell of the stocks, but it's what happened in the marketplace. it already has it's happened since '79. get ready and don't be shocked jason in new york, jason >> caller: hey, jim, how you

doing? >> all right how with you >> caller: i'm doing great listen, my question is i have a lot of friends that do real estate investing for the monthly income how can i do the same thing with stocks, so basically monthly income with stock market investing? >> i have to do a sidebar there are some stocks that offer monthly income the ones that i know i'm actually not that fond of. i've got to find new one, particularly in the partnership sector that's where you find a lot of them but the ones that were doing it unfortunately turned out to be some of the more dangerous ones. let me revise my thinking. this market presents gifts to you all the time when there is a huge sell-off, use it to spot bargains to get in on stocks you should be in at prices that you like coming up on "mad money," when it comes to shopping for stocks, do you dare go up against the all powerful index funds i'll tell you how you can get your take on the averages and come out on top. plus, if you're getting ready to get back this the game, sometimes the warning signs aren't so obvious. have i all the details when a

rally could be a red flag. plus you tweeted, now i'm answering. i'll take some of your toughest questions. "mad money" will be right back ♪ before you can achieve a higher standard of craftsmanship, you need a higher standard of craftsman. see for yourself at the

lexus golden opportunity sales event. experience amazing at your lexus dealer.

♪ now there is an entire cottage industry of commentators and pundits devoted to telling you that you will never, ever, ever beat the market, that you cannot win so it's simply better to put your money index fund that mir trors market than to invest on your own i get that now look, if you don't have the time or inclination, or just too overwhelming, then the pundit is going to be right. and an index fund works fine for me you know i believe your first

$10,000 should be saved in an index fund nevertheless, yoyu can beat the averages, but only if you know what you're doing, using the presense we teach every night here that's why i do "mad money," why i spend so much time trying to educate you about how stocks and the stock market works again, as i always say, i want you to be a better investor or a better client. if you can't get advice, if you can do homework, feel free to pick stocks after you put away that $10,000 if you want stocks but can't do the work, higher a professional, preferably with someone would good word of mouth they can do the vetting for you. i'm devoting tonight's show with some of the most important lessons i've learned in more than three decades of trading and investing and these will lessons help you avoid some of the worst mistakes and pitfalls of investing especially when times get tough on the battlefield right now a rule from ""getting back to even." that was the book i wrote right

after the big recession. it's going help you avoid getting burnt. downtown put a lot of faith in buybacks they aren't created equal and they aren't a place to run to in a sell-off even though you think it's probably a nice trampoline underneath, a safety net in fact, many buybacks disappear when times get tough as we saw when the oils cape crashing down when oil plunged a lot of companies walked way from their buybacks. i used to believe that large buybacks where companies repurchase their shares in the open market is something that reduces number of shares outstanding and boosts the earnings share were always always worthwhile and the buybacks were the exception. buybacks like dividends are a way or the companies to reward shareholders with cash, a return to you of the money. but i like dividends more because of the superior downside protection and the federal taxation status. buy sbrax become increasingly popular companies have spent over a billion dollars and that's money i thought would

have been better paid right to you in a dividend. unfortunately, the buybacks haven't given us the value we thought they would in many cases. and in some cases they turn out to be huge wastes of money so when you see a company with a large buyback and a puny dividend, let's be a little skeptical. the track record looks better thanks to the huge rally at the beginning of 2009. but in the wake of the 2008 crash it's still not hard to find companies that squander money buying stocks back but some companies have been a whole lot worse than others. for example, here's a group that i like now, but they spend a lot of money doing the wrong thing the health maintenance companies. they generate a huge amount of cash, but they've always been stingy with the cash and have been elect to buyback cash when it would have been better if they could have given you the great yield they could have offered. that's the best combination in argument a market where low interest rates and growth. we've seen tech stocks which buy back stock at absurd prices. that did plague cisco for a

while until it decided to boost its dividend, which i think directly led to the stable higher run that that stock has had. that was a shrewd maneuver intel did exactly the same thing, was buying endest amounts of shares. really wasn't doing anything but a dividend policy it began a terrific rise. maybe the worst offender throughout is exxon. it buys back more stock than any company in the world but has little growth and much less dividend protection than fellow oil companies. i don't tell people to sell the darn thing it has a great balance sheet, whatever i like higher dividends and buybacks together. so why do executives seem to like buybacks so much more than dividends? a couple of reasons. since the company's earnings per share, its net income divided by the total number of shares, a buyback can be a great way to create the perception of growth, but it's just earnings growth. that's been the case of many of the old line pharmaceuticals in the consumer packaged good companies. the buybacks would be actual

anemic growth. that's how you can see low single digit revenue, in other words, not lat of growth at all for sales, and almost no growth, and yet low teens earnings growth for many of these stagnant businesses. yeah, that's right the sales aren't doing anything. but because of the buyback series per share go up other companies don't see growth opportunities. so they decide it's worth to keep buying back stock instead i got an idea. give it to shareholders and dividends, please. we want the income what the notion that a buyback can help cushion a stock's fall in a bear market by ensuring there is already a buyer ready to step in and buy stock ordinary sellers in a panic can almost overpower any company's buyback that even if it's trying to prop up its stock, especially as there are restrictions on how much a stock a company can buy on a given day again, a dividend does a much better job by creating meaningful yield support, especially in a low yield environment. dividends also compel short sellers because they have to buy short stock. they buy the stock first to sell

it short and whoever borrows the stock must pay the dividend to the real holder. you want futility in buybacks? more group is more aggressive and i say irresponsible than the banks leading up to the crash in 2008 buybacks didn't do an ounce of good it didn't hold the stocks up when faced against rapid-fire onslaught of short sellers that hammered every bank sight. the buyback as support gain, well, it was over. it gave you little to no downside protection. it's even worse with the banks they bought back all the stock then they had the issue, tons more in order to meet the regulators' demands. the power to destroy stocks was created by the short sellers by the securities and exchange commission when repealed in old depression rear regulation called the uptick rule, that previously forced short sellers to wait for above market prices before they could offer stock. you couldn't stop these guys with the biggest buybacks in the

world, especially when the fundamentals were deteriorating for some of the largest and the best banks out there you also see executives try to call bottom in their own stocks by announcing major buybacks we're putting it to work right here these attempts at babe ruth style cold shots almost always fail turn out to be a big waste of your money as it turns out, the executives try to turn the bottom off and understand why the stock market works that >> should watch the show or maybe they don't understand the way their own stock works. at least at volumious would expect consider thanksgiving work in the company. they poured fortunes in trying to create the appearance of a bottom while their business was still in decline the rare exception apple led by tim cook, which buys back tremendous amount of stock meaning they're in their own difs they have a buyback with a brain. yes, that's about the best buyback i have ever seen and it's a company buy a terrific dividend to boot. that's the company i want. disney too is extremely opportunist e niistic as it bou

the of its stock during the ebola stock in the fall of 2015 when the stock was getting crushed because people were so worried. bob iger wasn't worried. he was a buyer and autozone, there is one that has always been a buyer on weakness autozone is a tremendous buyer of its own stock and it shrinks the float and it has worked if you take a look at the long-term chart for azo. buybacks are no reason to own the stock and in some cases are reason to silt i think if you ever want to own a stock of a company that's wasting the mode to survive on useless buybacks or spending money it doesn't have on an activity as fruitless as repurchasing stock to call bottom, and you shouldn't rely to help prop up a stock if the situation's dire the way i see it, these are false signs of health, and too often just a darn waste of shareholders money "mad money" is back after the break. boo-yah, jim croatians on a great show. >> "mad money" is not a show

about picking stocks for you it's a show about empowering you to think for yourself. >> this is bill from new york. jim, thank you so much. >> this is curtis in north carolina i want to say thanks to you for creating "mad money." >> ba-ba-boo-yah >> the man, the myth, the legend. >> i want to give a big boo-yah. >> you are the reason why we do this my ambition is to get my 8 hours. because a head full of work... a husband who snores with gusto... and marvin... are going to need a bigger bed. ♪ ♪ ambitions live everywhere. synchrony helps make them happen with financing and partner offers at over 350,000 locations. ♪ ♪ synchrony. what are you working forward to?

♪ ♪

♪ now after a sell-off, in order for stocks to reverse and move higher, they need to have fuel, the fuel necessary for a rally. and what that fuel, what is it it's cash. so says the fuel comes from retail investors who are taking money off the sidelines and putting it to work back in the market after the decline like that. when money is flowing into stocks and hedge funds desperate to own stocks rather than shorting them, then you're in the land of the thousand bull dances you don't have to worry about where the fuel for rally is going to come. from you don't need me for certain. that's when everybody seems so smart. as long as more and more dough

is flowing into the stock market, it's easy to find groups of stocks that can go higher when the money is flowing into stocks at the same time the businesses are turning around, you've got to buy the dips each time it occurs it can take a long time for regular people to become accustomed to putting their money in stocks again after a serious sell-off it's scary now with no money flowing to the market or even without flows, you can still have powerful moves in the stocks and sec thoors are trying to assert their leadership in the turmoil. but the fuel to make the moves happen can't just come out of thin air it's money and it has to come from some where. if people are still reluctant to invest, then the money will simply be pulled out of the least exciting, least interesting groups of stocks as investors swap out of them and swap into ones with power, the sexier names, ones with more lift people on food and drug stocks will happily sell them to raise cash this churning move is called a rotation we've seen quite a few rotations since the market bottomed in

2009 there is one problem w about rotations. without new money flowing in, the advance often becomes zero sum and ultimately can and probably will run out of fuel. as soon as the selling in the defensive staples comes to an end, the leaders run out of steam. there is not enough left on the side lines to drive them higher if it comes in and investors on the sideline are reluctant to invest capital, something worse can happen you can get a rally in what i call the wrong stocks. that's right, the stocks that signal slowdowns or even recession. namely, the food and drug names that have been used as fuel during the previous advance. these stocks can become the market's new leaders and all the cash that investors pulled out can be poured back. in because the big money thinks another downturn can be ahead. and the food and drug stocks can go lower they're getting so cheap, they represent great value. a rotation could be at hand. i want you to be ready for it. you never want to see any of the consumer staples roaring higher in a sustained a vance where

they're the only ones going higher because it means people think the kpa economist is either going to get worse or simply stay in awful shape for a long time to come. that's why one of the most horrifying things you can see in the stock market is a powerful rally in the so-called wrong stocks [ buzzer ] what are the wrong stocks? i want you to think at try yarks coca-cola, general mills if that's all that's going higher, that's trouble the bottom line, there is nothing more disconcerting watching a drug or a stock plow its way higher until unless there are vast sums of money coming in from the sidelines, you need to be more cautious and less aggressive whenever you see the defensive food and drug names do the job as generals and leaders. watch the sector leadership to help give you a read on macro sentiment in order to time when to expect more of the sustained rally. in the meantime, look for opportunities to buy high quality names where the stocks

and not companies are broken and be wear of management tactics like buybacks that artificially prop up stock prices, only to see those stocks go right down from unstoppable high frequency bombers remember, the coast isn't clear until the vast preponderance of stock groups actually goes higher that's when you know it's really safe to go back in the water after the huge run we've had the averages, maybe it's something worth weight for "mad money" is back after the break.

if we just announced a joint venture with beijing automotive to design full electric vehicles and we're going to produce them in a joint factory there is so many opportunities copping up with autonomous

driving that lots of growth areas. areas. good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. you mighyour joints...ng for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life.

with pg&e in the sierras. and i'm an arborist since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.

my fingers are hurt from battling all the trolls. my new troll campaign. if only there was an easier way to answer all the nice tweets. hey, wait a second, i got a tv show let's give my poor hands a break, give you the answers you deserve. let's start here with @even after i get it, who let us know.

i let my nose run when i listen to jim cramer on "mad money" at cnbc, because when i sniffle, i miss something i suggest you get some kleenex that way you'll be in sync with what i say next, wondering @jimcramer, are there any benefits to purchasing silver over gold not really silver is a much less worthwhile commodity and gold is getting harder to find i believe that gld or actual bullion is a good insurance policy that has not paid off in a long time. but sometimes it's good when insurance doesn't pay off. here is one from @tiffany dunn you have jump-start mid addiction for investing early on in life. your valuable knowledge and energy is inspiring. thank you. i want you to tweet that every single day for the rest of your life because it makes up for lot of the treasure and trolls i have to worry about. thank you for your nice

comments here's one @jimcramer, you should have a short video made on jim cramer reads angry tweets against you that would be interesting and funny to watch and we're going to do that we're going do that regularly there is a guy who does it on tv it's very funny. it looks like there is a dilemma. what to do, what to do have enough stocks in the portfolio but too much cash. can't have the positions without violating basis. help at actionalertsplus.com which is my charitable trust, say you know what? then you have to wait. i know it's painful, but you've got to wait. don't violate basis. in 2014 i violated base circumstances and it was not a good year. i principally attribute that to violating basis, or not letting stocks come down enough to make the next purchase meaningful i like the space out the buys. here from @jimcramer maybe you could develop tech to charge your apple watch from your personal energy level

#energizer bunny i want one of those self charging tables, the cordless tables from integrated ti. that's what i really need. all right. here is @dmj my financial adviser always warned me about watching the market every day it's more frustrating than ever. okay i like to check in on the market if i were on vacation, whatever, to check in. don't be obsessive about it, because that is not what you're trying to do you're trying to buy good companies with stocks that are good at prices you like. okay and just to watch it all the time doesn't make that happen. much better do homework than try to find the next idea. next is asking me for information on how the do homework better. i just use google, but i think there are many better tech next. #matt tweetmad tweets the best one is still "real

money. but my most recent one which is "get rich safely" which has a whole chapter about how to analyze stocks i think that can really help and of course stick with cramer. let's call me. jim in new jersey. jim? >> he -- >> the highlighting -- sorry >> jim cramer, boo-yah boo booia! >> boo-yah, jim. >> we've all been conditioned to believe that ecommerce is a lot like highlander. in the end there can only be one winner did you know today is national cat day? how am i celebrating wall street hair is bad. his response was simple. he said there was a 50% chance that i don't even exist. that i was just a simulation >> help me, carl quintanilla you are my only hope

it was brutal. the last play of the game. markets absolutely getting hammered today >> i know it's not easy. but i promise to keep fighting for you. >> jim cramer leveling the playing field for all. >> the road is a tough one, but the payoff can be your greatest win of all >> join "mad money's" training camp week nights invest and volunteer in communities like yours. because the changes we make today... can you hear me? ...shape the possibilities of tomorrow. u.s. bank the power of possible.

it's time for your business of the week. in the summer of 2017 shepler's was getting complaints from all sides. from customers to local officials, they didn't have good answers to problems like why their lines were so long find out how this company redeemed itself and saved its reputation on your business, sunday morning at 7:30 eastern sunday morning at 7:30 eastern on msnbc with prebiotics and probiotics to help support digestive health.

♪

i like to say there is always a bull market some where. i promise to try to find it just for you, right here on "mad money. i'm jim cramer, and i'll see you next time. i'm opening up the lines to hear from you, the voices of cramerica, because it's an uncertain time i want to talk to you. >> mr. cramer, i just want to tell you, you are absolutely positively fantastic. >> thanks for helping us not panic in times like this the average investor, which we all know and love, you indicator to us. and we appreciate that for all you teach us >> i am not going anywhere you shouldn't either we will get through this together >> cramer has your back. call 1-800-743-cnbc.

and let's take on the market together together narrator: in this episode of "american greed"... vitaly borker rules an $18 million eyewear empire hawking fake luxury designs online. there is no crime that i've ever come across where you can make this much money and face such little risk. everybody wants something designer, something name brand for cheap. he had ray-ban, prada, gucci, chanel. narrator: customers think they're scoring high-end bargains. instead, they're getting hustled with bogus brands and violent threats when they dare to question vitaly borker. he just went nuts --