nathan he is a good person. >> all million of you. >> and you should check out the website. pam is doing an amazing job. xilinx. >> see you back here tomorrow at time in the meantim my mission is simple to make you money. i'm here to level the playing field for all investors. there is always homework and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cray america. i am trying to make you some money. my job is to educate and teach call me or tweet me. i hate to say this, but in this market you cannot afford to take your cue from bob dylan. because you do need a weatherman to know which way the wind blows. yet this is not a subterranean

home sick blues moment on a record high day where the dow gained 129, the s&p dipped and the nasdaq declined, the stocks are being buffetted by headwinds and tail winds it's gotten hard to discern which is which you need to be able to tell the difference between a brief shower with.05 inch of rainfall and a downpour you are going to be ending up in a monsoon without a poncho take today this morning pepsico reported a quarter that was widely panned. >> bu! >> because the company cut the forecast by a nickel if you summon the weatherman you will find out there was a headwind, the strong dollar, a big and uncontrollable deal for international company like this one. when they originated their forecast they didn't include a stronger green back, something that turned into a headwind s it their fault? when i spoke with the cfo this morning he assured that the

problem was about the dollar and that's a purely cyclical headwind, meaning it's temporary. that's not what many investors are concerned about. what they are concerned about is the long-term secular headwind in other words, it's not that millennials are avoiding suggest ari drinks, it was the dollar. that's not in pepsico's purview. when i pressed what else might be holding back the numbers, the aluminum costs went up for cans, transportation costs went up as well as safety regulations they were able to raise prices to pass the costs on to the consumer, especially since coca-cola raised prices over the summer there is no need to worry about these cyclical headwinds we know that aluminum costs have been elevated by fee at thanks to the president's tariffs he said the transport costs are cyclical, that the rewards for being a truck driver today had

never been greater so while the average truck driver is 49 years old right now, he expects more workers to be drawn to the profession because of the high price which will push those costs back down. now, i wasn't buying it. i questioned whether that's a secular headwind because younger people might fear that once they learn how to drive a truck autonomous driving will take over he admitted that could be a negative then again once self self-driving vehicles we don't need to worry about labor costs. i didn't have a chance to ask about aluminum millennials don't want to add to the islands of bottles the size of antarctica floating in the pacific. you know what? when i pondered it pepsico lacks real tail winds but that retiring ceo had correctly combatted the headwinds with ingenuity, grit, smarts, and perseverance general electric, on the other

hand, has both headwinds and tail winds within the same roof. later tonight i will give you my take why john flannery was fired after 13 months on the job but ge is unique in that the company put itself in the path of its headwinds that's right it's their fault the company put money into fossil fuels doubling down as the price of oil collapsed a few years ago. they virtually stopped investing in two best businesses with fabulous tail winds, health care equipment and aerospace. there is endless demand for health care equipment that can save lives and save the system money. that's what ge is going for. abbott labs, others, have been such great performers and are in massive boom market mode aerospace, the tail winds are so strong that boeing just hit another all-time high today despite the fact that they could be one of the biggest losers if the trade war with china continues. doesn't matter there is so much demand for

aircraft worldwide that the chinese would have to be insane to cancel orders the wait list could be up to 20 years. people in the developing world we will thinker, more and more can fly. that's why general electric is so desperately needing a weatherman hopefully larry culp, the new ceo, knows which way the wind blows. what else? right now we are close to full employment in the united states with no sign of slowing. the federal reserve doesn't mind full employment. when the economy is this hot they start worrying about r runaway wage growth. it could be a major driver of inflation. that's why they have been tightening they want to head off the cyclical tail winds of higher salaries it sounds crazy that people making you more money is bad news, but, hey, i i don't make the rules. higher salaries may be a secular headwind for the stock market. today amazon raised the minimum rage to $15 an hour.

let me just say hammered does this mean the fed needs to tighten more aggressively? we'll find out on friday when we get the labor department's non-form payroll report. aggregate wage growth has been anemic for wages in part because of automation and in part, as i just told you, the fed has spent decades actively trying to prevent higher wages this is the classic case where what's good for you as an investor may be bad for you as someone who works for a living in other words, wage inflation is a tailwind that becomes a headwind when it gets too strong and forces the fed to take action right now the headwinds tend to be more visible than the tail winds. that brings the larger question. how can the stock market keep going up if the headwinds are so visible and bad? simple we got two colossal tail winds, bullish tail winds one is cyclical and one is

secular. these are hard to see. but i think the response from much of the market is levitation first, a cyclical boom in hiring when jobs are created more people put money away so they save and save. in part by investing in the stock market as long as employment continues to grow, this process will keep playing out. it's usually positive for stocks you don't need to pull out of your savings when you have a job and making more money. second, there is a gorgeous secular tailwind, a stock shortage caused by endless mergers and acquisitions and a torrent of buy backs there is literally not enough stock to go around the stock market is a market first and foremost you tighten up supply prices will go higher like the weather, the market is subject to change. any one of these cyclical tail winds can become secular headwinds. the web has made online advertising one of the greatest secular tail winds of our day. it's also been a vicious headwind to every other form of

advertising. but that might not mean a thing to, say, facebook, which is has kwau squandered goodwill with endless scandals it helps to know which way the wind blows before you pull the trigger. james in california. james. >> caller: hi, it's james calling from sunny san diego. >> nice to have you on the show. went to san diego last year. loved it how can i help >> caller: well, now that the music division filed for the us ipo, is one of your favorite subscription businesses spotify a buy? >> hold it wait for the ten cent music deal to price, stock comes down and pull the trigger let's go to paul in florida. paul >> caller: hey, jim. thanks yeah, i got a question for you about twitter. i really respect your opinion,

and basically twitter with it being in the politics and whatever is going on with it right now, you know, i am taking a hit on it. >> right. >> caller: i was curious what your opinion is. i bought it at 45. now it's at -- >> we don't care where stock came from. we carry where it's going to the problem with twitter is they have had a series of reversals in terms of the number of people looking at it. until they finish the clen-up, i think the stock will be under pressure amy in nevada. amy. >> caller: jim, how are you? >> good. how about you? >> caller: i'm great i'm calling actually today for a couple of things i want to thank you for all of your help. >> thank you. >> caller: yeah. i want to say that talking to you today would be the highlight of my day. i love your show. >> you are very kind. >> caller: yes, you make trading

entertaining. >> look, i want to make it entertaining, i want investing to be interesting, that way you do the work and be a better investor in case when i'm not here sometime. what's up? >> caller: yes well, my question is about adt a couple of weeks ago i got it after i heard about the integration with amazon alexa. i had high hopes for this stock, but then it's plummeting about 10% today or so. so i don't know. what do you think? do you think i should hold on to that >> well, i'm not a fan of the stock. why? it was a busted deal it's been going down there are many people who want to be in that business so my take is i would cut my losses i don't think there is a lot of up side to adt one of the worst ipos of the season all right. i don't say it often, but bob dylan got it wrong we do need a weatherman. tail winds turn into headwinds

and you need to figure out which is which before you pull the trigger. on "mad money" tonight i have a to-do list for larry culp to get ge back in action. which boxes he needs to tick off. then we spent last week in san francisco talking about the -- most of which were down today. how are the stocks faring? and paychecks has been a long-term winner for the show. with a strong economy, the stock should be soaring. what is it saying about the economy? i am talking with the ceo. so stay with cramer. >> don't miss a second of "mad money. follow on twitter. send jim an email to mad money @cnbc.com. or call us at 1-800-743-cnbc miss something head to madmoney.cnbc.com.

why did general electric fire now former ceo john flannery after just 13 months on the job. i keep hearing that it was about

speed. he wasn't turning the business aren't quickly enough. but it wasn't about speed. it was about the chargers that, quite frankly, shouldn't have been unexpected. when flannery inherited ge i called for the financial equivalent of a truth and reconciliation commission to deal with his predecessor. i said he needed to uproot and branch it was an open sec secret that the problems were much more all encompassing than they admitted. read the research. if you simply examine the reports at jpmorgan it was easy to see how the buy high, sell low philosophy caused horrific problems how much business did jpmorgan forego because of the negative analysis let's take long-term care. for agents this business was an asterisk the company off loaded insurance to genworth but kept the liabilities where middle aged people pay the pittance of

long-term care and health care was much, much cheaper i explained this to ge before and after the transition because my late father had one of these policies for a small amount of money he was able to have live-in health care for a long time if you priced it out, his policy was worth about 20 times what he paid each year how many smart people took this stuff? what ge did here was like the movie poltergeist where the housing development moved the gravestones but kept the bodies. and look, it's not like you need an anecdotal experience to tell this is a problem. manual life and aig suffered from the same woes i don't think they understood the obvious consequences of writing these nefarious policies that's why the $21.2 billion charge for the as terrisk was impossible to fathom then there is the energy

business ge bought for $13.5 billion. it's nearly impossible to lay anyone off it was a significant step, end quote, expect it was a transformation towards an industry vanishing before hi eyes flannery was involved in the transaction, too it was hard for him to admit that the deal needed to be written down by the time it closed i have seen these write downs but only as a result of fault, not bad business judgment. yet it was ridiculously bad business judgment. instead of building up aerospace or health care they doubled down on an industry in secular decline. no shock he did the same with oil and gas. doubling down when the price of crude ran to $100 a barrel when flannery didn't immediately take the big charge the one now necessary and he surprised the board after he said there would be no more surprises he couldn't keep his job it wasn't the speed. it was the fact he didn't see

the charges coming why did this happen? i have a theory. american business has a strange aversion to looking at what actually went wrong in the past, actually learning from history it's almost considered a sin to go back and examine a spre predecessor's mistakes think of it as like a mafia-style code of silence. larry culp, the new ceo, is not from within the organization he is from danner. he is free to take the charges ge needs he can cut the dividends and maybe do 100 million shares secondary offering to help fix the balance sheet. that was almost impossible for someone from the inside to do. culp doesn't have that problem which is why people are upgrading the stock. flannery got fired because the fwoord was clueless as to how bad things were because no one seriously examined the ml era. maybe they didn't want to hurt jeff's feelings. either that or the stuff was well hidden and we know it wasn't all you had to do was read the

research if i were culp i would hire steve tusan from jpmorgan. put him on the board you want no more surprise snz that's the move to controversial? yes. correct? absolutely tom in california, please. >> caller: jimbo, how you doing? >> good. >> caller: reliance steel. i they made a number of acquisitions lately. there is a one queer of 98 on it they made it up to 96 in june but it's dropped off about the mid-80s and been hovering for a while. >> i am not crazy about the steel stocks a note today downgraded letter x u.s. steel talking about how hot rolled steel prices have been going down looks like the tariffs are having the wrong affect on pricing and while reliance is of course got a lot of business, a sales business, i don't want to put any more money into the steel business one of the nails in the coffin for ge was that their board was largely in the dark.

one way to remedy that, i would put jpmorgan analyst steve tusan on the boards. all right. much more "mad money" ahead. which semi should be inside of your portfolio i am going off the charts to find out and my exclusive with the company paychecks. where does the company stand now? i'm talking with the ceo after earnings and was the obituary written for the off price retailers too soon i am giving you my take. so stay with cramer.

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leaving the boarder group directionless. tonight we are going off the clarts with the one of my colleagues at money.com. broden has a very good track record when it comes to technology in general. at the end of april she made a bold call that the nasdaq 100, the tech-heavy index, composed of the 100 non-financial stocks in the nasdaq composite was ready to roar higher it was at 6,500 back then. and she used her methtology to come up with price targets she said it could be headed for 7,420 as long as it held above the recent lows. she completely nailed it we have cleared that level with the nasdaq 100 at 7,628. i have got to tell you this is, well, she got her next up side at 7,719 that's some target, huh? she called a 17% move in not a

stock, but in an index and it took less than six months to play out. i think that's very impressive so why don't we use that same methodology to discern what's happening in the major semiconductor names. invidia, intel, texas instruments and broadcom let's start with the daily chart of invidia i like it so much, i renamed a dog after it computer graphics and data center, they have seen the stock roar of late she has been a fan of buying pull backs in invidia because it seems to always make a come back buy, buy, buy. it's incredible, isn't it? she likes to remember past swings in the security and run them through the pris much of the fibonacci ratios discovered by leonardo fibonacci, the medieval godfather of mathematics a stock is likely to private or change the trajectory, when the levels cluster together it means a reversal is at hand.

when invidia was at the high 250s a week ago, there were seven different fibonacci price relationships telling her that the stock would bottom and bounce sure enough that's exactly what happened boom and by the way, when it was here, everyone else was running for the hills. believe me now that they have rallied nearby $30 in eight days, what do we do broden says if you are not in this one, you are probably late to the party the stock hit near term upside target at 292 yesterday and while she could see it rallying ten bucks or 11 bucks from here, that's not a lot of up side. as much as i love invidia's business, we hate to chase on "mad money." which is why we let a little go last week for the charitable trust. follow by joining the action alert plus dot-com club. it was up too much in a shorter period of time in other words, we just thought that this was just too much of a rocket, okay i think that her charts say the same thing

next up, how about the weekly chart of a stock that led the market today intel surged 3.5%. it's pretty much lager. broden told me they could be ready to roar. i wish we ran this segment on monday you might have seen today's rally coming what can you do? what is going on here? it's about simmettry the idea here is that large swings in the same stock are similar in size. the last time intel had a brutal decline was in 2014. look back here, okay 2014, 2015, stocks shed, keep this number in mind, 13. 13 points, that is not percentage when intel tumbled $13 and change from its peak in june to last month, it gave broden the idea that the stock might be ready to bottom. i know it sounds like really simplistic, right? but it's real. and it's surprising how often to works out.

she also spotted a confluence of fibonacci relationships of 42 and 44 which gave the company stock a nice level of support. now intel is roaring back up to $48 and change how high can it go she says it's about to clear another important hurdle if it gets above $49, she thinks it could be smooth sailing to 61 $.28. but this works if intel falls around $42.50, all bets are off. but for now she thinks the bullish scenario is looking a lot more likely if they get their chips in time. remember that is a manufacturing glitch and she will be on that we don't know the answer all right. now let's take a look at one that has been a slow and steady wins the race. texas instruments. here is another example of simmetry the stock fell $16.23 from the june highs to lows last month before rebounding over the last

three weeks. guess what the last time texas instruments got hit in the april lows was at $16.16 decline years ago we saw another $16 decline. if it happens again don't be surprised if the stock reverses after a similar fall i know it seems sill lay. wall street would laugh you out of the room. what can i say truth is dumber than fiction so where does broden think texas instruments might be headed? as long as it holds above 102 intraday low, she thinks it could go from 108 to 122 she would be more confident if it rallied to 112 clearing an important skreeceiling of resis. well, she thinks it could fall to 94 otherwise. the future is looking good i don't think that's going to hachlt i think it's more likely it goes up the quarter actually the year has been quite good for the

company. finally, broadcom. wow. controversial. a long time cramer fave run by hak tan. now this stock has rallied 50 bucks from its lows. that's why they instituted a gigantic buyback after they failed to get the accusation of qualcomm given that the last big run lasted for 54 points, she is feeling weary here there is a ceiling of resistance at $251 up three bucks if the stock can clear that level she thinks it could be let's say a lot more upside. specifically, broden thinks to $309 before it hits another ceiling. i do believe she really would like to buy this or pull back. the stock has had an epic run from the bottom. the charts suggest that the neglected old school semiconductor, like intel and texas instruments, could be ready to roar. broad cam and invidia nigmight d to digest their fwans.

i'm with her of course, for fundamental reasons. let's go to john in illinois john >> caller: hi, jim thanks for having me on the show. >> of course >> caller: i am wondering about stmicro electronics. semiconductor based out of switzerland. they make chips called micro electromechanical systems used for the internet and things. what is your take? >> no real edge, to tell you the truth, john. it's here nor there. i am not as sanguine about the semi conductor costs as a lot of people people feel intel is not going to have a problem getting out of chips. all right. the charts are telling the fib queen that some of the old stand b byes could be higher others could be in for a breather as i told the club. i agree on invidia

much more "mad money." what does one of the largest payroll operators have to say about the current economic environment? then a bright and booming sector within retail. one analyst doesn't seem to think so what to make of the death of the off price retailer thesis. tonight's edition of the lightning round. so stay with cramer. >> announcer: tomorrow kick off the trading day with squawk "sqn the street". live from post 9 at the nysc. >> did you give me a pay cut i heard "mad money" cut my pay i mean, that's what they're like out there. >> it starts at 9:00 a.m. eastern.

on friday morning we get the labor department's all important non-farm payroll report. that could set the tone for the month. we get an early read by checking in with the payroll processors paycheck with a sideline in human resources outsourcing is becoming their main business the good news for companies like them, they know things they instantly become more

profitable every time the fed raises interest rates. they collect interest on the float. the money they are sitting on while they wait for you to cash your check they reported this morning they had a nice top and bottom line beat, the stock rallied 1.44%. the beginning of the year in the doldrums, it has been roaring of late let's check in with marty, the president and ceo of paychecks learn more about the quarter marty, welcome back to "mad money. >> thanks, jim good to be here. >> i got to tell you i thought everything came together this quarter. you have 15 holds, one sell, and only one buy i think they are going to be converted because you've got to tell people about all the sweet that you put together that i think is now complete and is making it so you are much more than just a payroll processor. >> well, i agree, jim. it really has come together. this has been a solid first quarter. 9% top-line revenue, 16% on that revenue, certainly benefiting from tax reform as well. we put a great suite of products

together that not only is payroll, but an hr solution for small and midsized businesses. >> you mentioned in the middle of your -- that we are experiencing a strong growth in work site employees that continue in the first quarter. that's good news for the economy and for paychecks. >> it really is. this is not only new sales, but it's growth and work site employees from our existing clients in the peo business which is really hr outsourcing where we help them with insurances, as well as total hr support, and it's growing double-digit really probably mid-single, mid-double-digit growth there. >> what was the influxion point? i read a bunch of reports. i don't think people recognize you would be at a fulcrum where it's really starting to get some leverage >> well, we started getting some good momentum the last half of last year. we put a number of new sales initiatives in place we expanded our marketing spend

giving the tax reform money. we used some of that money to reinvest in product development too accelerate a few products were working on. when you put it all together, including our new learning management system, which gives training to our small and mid-sized businesses, prepopulated and their own, you have a strong hr outsource product. that's helping these businesses grow. >> you said salesforce helped and virtual team inside. you are making efforts to data mine companies and figure out how best to give them the analytics to help them >> well, we are. we are using salesforce, we are having the sales reps really put a lot of data into salesforce which we're using to produce data analytics that is helping us target prospects, client referrals, cpa referrals we are getting more defined in the way we go atclients and be able to bring them the exact right value based on what they need we know all of their history all of their interactions with us all of that can be pulled together with data analytics

now. you're right a lot of selling is happening telephonically now our virtual sales, inside sales for the smallest of clients, under five employees is popular now. people want to go on the web, search, talk to you, demo it online and buy right away. >> let's talk generally. it looks like some people feel like full employment, some people feel like labor shortage. amazon raised their price to $15. what are you seeing? this seems like a good time to be an employee. >> yeah. i think it is. think i think that what you are seeing is they have more choices, and that's why, as an employer, you have really got to make sure your benefit packages are up very competitively and that you are offering personal development and training to employees to keep them it is a good time. we are not seeing the biggest wage increases this month around 2.3% overall over last year still seems a little bit on the low side i think larger employees are paying a little bit more, the

smaller businesses not quite as profitable, not able to raise wages as much. >> how about the new found competition? we meet with people from square. they have a good suite of products suddenly they are offering payroll processing can anybody just offer payroll processing and expect they will take a share >> we really don't see it as that big of a competitor they have good competitive products from the payment processing business. on the payroll side it's not a full-featured payroll system it doesn't handle all of the states you have to pre-process your payroll four days ahead based on what we have seen. it's not integrated with other hr products. this was a payroll product they moved to their mobile app and it is only for employers. our mobile app is for both employers and the employees, and there is a lot of self-service that they can do as well so it's really not a big competition from our standpoint from a payroll, but they certainly have good payment processing products.

>> finally, anecdotally, i am hearing, i just heard from another one this weekend, that people who have spent time incarcerated for white color crime, particularly for marijuana sales, are now able to get a job nor easily than any time this history. without being specific, are you seeing that kind of hiring going on >> well, i think, you know, we may have talked before what our hr -- you know, we have 500 hr specialists that help them with hr compliance. ser seeing smaller businesses and midsized businesses that are starting to waive some of the drug testing requirements because they are having so much difficulty getting certain employees. so you could have someone that becomes a little bit more lenient because it's so tight out there to hire employees. that's for sure. >> wow that is one of the condition consequences of full employment. thank you so much. the president and ceo of paychecks. look, someone is going to

hold -- hold to buy in a major firm this stock is not done going up. "mad money" is back after the break. hi i'm joan lunden. today's senior living communities have never been better, with amazing amenities like movie theaters, exercise rooms and swimming pools, public cafes, bars and bistros even pet care services. and there's never been an easier way to get great advice.

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>> it is time! it's time for a brand new dow record lightning round oh, man, money that's right and then the lightning round, are you ready? the lightning round, starting with albert in new jersey. albert. >> caller: big booyah, jim, from home dale in monmouth county. >> what's up >> caller: anyway, just thank you to you and your staff real quick. also, a couple of little parts cramer fame, research over 19%. >> remember, we ask have to get negative on that because we felt that the group known as the flash and d-rams got oversaturated. we are not ready to call bottom. ken in florida. >> caller: how are you doing >> well. how about you, ken

>> caller: great thank you for taking the call. wanted to check on proof point. >> a lot of people feel microsoft has gotten religion and is competing against proof point. i pull the trigger levi in montana. levi. >> caller: how you doing, man? >> well. how about you? >> caller: good. looking at pbco, paterson company. what do you think? >> i do not like the dental business i do not like it and i would say -- i got to tell you that business is cutthroat and not a place to be. bradley in colorado. bradley. >> caller: how you doing, jim? calling in about noble midstream partners. >> i don't like the midstream group. you are going to have to be paid more than 5% yield which is all that gives you i say ixnay. mike in wisconsin. mike. >> caller: jim, i am enjoying your show. i got a question on paypal back in early august i passed on square square was at around $68 a share and paypal was $89

i bought the paypal. today paypal is around $86 and square is almost $100. >> yeah. comparisons -- now, i got to tell you paypal has been a great long-term winner we tell the members, it was time to sell a little bit we sold some in the '90s i don't think it's worth selling the rest square is just what i can say, one of the great stories square is expensive, but square is really good we had sara fryer on, the cfo. she told a great story they are both good reef connecticut. >> caller: jim, nice to speak to you. how are you? >> i am good how about you? >> caller: i'm doing great hey, yeah, i'm talking about newtonics. i'm wondering what you thought. >> it's under pressure right now. i still, my favorite in this group is sales force i feel best about that

we were just with them last week crm. i see these stocks coming down knows necessarily the right moment to buy. let them come in a little bit more and then, one more. how about tom in new jersey? >> caller: hi. hey, how are you, jim? >> i am good, tom. how about you? >> caller: good. i'm calling about cypress semiconductor. >> yeah, this stock is falling out of bed i think it's ridiculous. i think a level 14, i think it's a plain out buy. and that, ladies and gentlemen, is the end of the lightning round! >> announcer: the lightning round is sponsored by td ameritrade i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job.

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i'm always telling you not to put too much faith in wall street research or anyone expert, including yours truly. if you are serious about managing your money, make your own decisions. the reason because everybody gets it wrong sometimes. when you're wrong, it is really helpful to know why you were wrong. you need to be able to identify where your assumptions were incorrect and you can't do that if you ways your whole decision on, well, i assumed this other guy knew what the heck he was talking about. a textbook example three months ago a highly respected analyst wrote out coverage on two dozen different stocks he was surprisingly embarrassed on the whole retail cohert

in particular, he argued that the off price retailers were in trouble long term. it's looking like not that good after call he is smart. everyone makes mistakes. look at me i thought stitch fix would be good i liked it for a long time it was down 35%. i liked it too long. but now that it's been a few months and we have heard from all of these retailers, i think it's worth explaining why sol has been wrong or why he has been early let's set the scene. what was his thesis? he said pick retail stocks when people are shopping more and more online. no argument. off price chains could be in trouble because they don't have enough of an online presence they are still very much brick and mortar experiences i have been a big fan because they have a great business model. when department stores have too much inventory, they buy up what's left over for a pittance

and they sell it to the customers at a mark-up that's much less than you pay for the stuff anywhere else. that's how t.j. maxx gives you better bargains than even amazon and why the off price stocks have been fabulous performers. but he told us the party is coming to an end in part because of their lack of online distribution and in part because they are running up against the law of large numbers. the bigger you get, the more new stores you need to put up to generate the same growth he says the off price business model is becoming, and i quote, antiquated now, this is a long-term call. he is not saying that they are going to slow dramatically overnight, but he thinks business will be more difficult over the next couple of years. these companies are being aided by the collapse of jcpenney who named a new ceo at least and sears, holy cow is that nothing. they will face nor competent competition as operators like macy's movie in the off price space. he points out if the off price retailers merely continue to

take the same amount of market share they have been taking they will grow president a 3% clip when wall street expects something lowstory 6%. the problem? they have 3% market share. he thinks it will be difficult to expand and that's something they don't really have to hit the consensus numbers tjx and burlington will need to annihilate the department stores because there is only so much brick and mortar market share to take as more and more apparel companies sell directly to the consumer, he thinks that that may reduce the amount of high-quality merchandise that's available in off price stores. he figures amazon will be able to offer the same experience online at least so far they are not coming true. burlington is up and tjx is up 12%.

ross is up 11% you know retail has been having troubles of late in part because of issues involving amazon raising the employee pay now, most of that is because when these companies reported the latest quarters, their numbers were fabulous. that's why i don't think his piece is going to be right tjx saw same-store sales increase 6%. that translated into a 12 cent earning speed. that's big business was great guidance was better. what drew the strength booming customer traffic ceo ernie herman explained that and i quote, we have been attracting new customers to our divisions, a significant share of whom are younger customers, end quote. every analyst loved this quarter except for jay sol they were up against tough comparisons. they translated into a major earnings beat, up 51% year over year and the company raised full year guidance for the top and bottom line.

5% same stores sales growth, wall street 2.7% a nice top and bottom line, a gigantic buyback ross boosted their store growth, look at this, they went from 2,500 to a total location of 3,000 meaning they think they can take a lot more market share than people are expecting. so where may jay sol be going wrong? they are not having any problems at all the lack of serious online exposure doesn't seem to be hurting them one bit for now the treasure hunt experience is clearly drawing in customers. ever since the great recession consumers are more frugal. it's a secular trend not a cyclical one that i think he doesn't get at the same time all three companies are a heck of a lot more profitable than they used to be. this is something sol seems to ignore even if he is right about a slowdown in sales, that doesn't mean you get a slowdown in earnings and burlington ross stores have

used the extra cash to buy back oodles of stock which boosted their earnings per share what about market share? maybe they will hit their ceiling in early 2021, but that gives them 2 1/2 years of turbo-charged growth they are putting up new stores at a rapid place at the end of the day i think he is painted with too broad a brush. yes, the web is concrete brick and mortar retail. bed bed and beyond have been absolutely annihilated. physical stores still have an advantage in some cases and this is one of them jay sol could prove to be right about these stocks longer term especially if labor costs go up dramatically like we saw with amazon if you think burlington and tgx are going to peak in two years you don't sell new he is very early with the call if he is right, i think it will be early for another year. bottom line.

don't sell a stock because of a theoretical long-term worry that could play out over the next three years. the stock market is a shorter term place, typically six to nine months. for now, they are doing very, very really. they have run a lot. i would be a buyer in any weakness here. his predictions may ultimately be right, but they won't be relevant until the end of 2019 or maybe 2020 at the earliest, and that's way too out there to take profits now stick with cramer. an old friend. a new beginning. some welcome relief... or a cause for celebration. ♪ what's inside? ♪ [laughter] possibilities. what we deliver by delivering.

there is a lot of selling pressure in the cloud king and cloud prince stocks. i see this kind of thing as day one usually lasts for three days don't be a hero. i would wait until the end of the week and let's see what that employment number has for us the industrials are where people want to be right now it could be lasting. i would like to say there is always a bull market somewhere and i promise to find it for you right here on "mad money." i'm jim cramer, and i'll see you

tomorrow >> 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." ♪ my name is brenda coffman, and i'm from kokomo, indiana. (whirs) i own and operate retail cookie stores throughout the state of indiana and florida. i am a hometown girl, and i married my high school sweetheart, and we have two wonderful children who are the pride and joy of our life.