they got marked down and did okay. >> i have a question for pedro what does america run on, pete. >> duncan. >> yes, it does. >> giddyup. >> that's do it for us on fast more tomorrow at 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 isn't just to entertain but to teach you call me at 1-800-743-cnbc. or tweet me @jim cramer. only one question that matters here right now was this a real bottom today we had an incredible reversal with the averages plummeting

this morning the dow losing 548 points for the whole market -- before the whole market turned down by the way it was down 30 in the last half hour s&p off 0.55%. is this a sustainable turn or another head fake like last tuesday? i want to go back to last tuesday. one guy told you the market wasn't done going down, mark sebastian. he's the resident volatility expert the bulls were trampling every kind of bear and things were sure looking up. so i asked sebastian if the move had any staying power as part of the off the chart segment. no, he said categorically not. based on the huge spike in the volatility index or the vix for short he predicted that we were about to have a vicious shakeout a total hammering. how will we know when the real bottom had arrived normally s&p 500 and the vix move in opposite directions.

because the vix is a very good proxy for the level of fear in market sebastian explained that the averages would bottom, if they made new lows and the vix did not make a new high. sure enough that's exactly what happened today, right before the market turned. yeah, you know, the vix despite -- had spiked to 29 right before the big sell-off and today in the midst of the sell-off what did it do? it only went to 24 big check for the bulls. second, the late mark hans said when you see down volume by 9-1 that means the sellers lost their minds. so we have that box check today. hey, by the way, a minus 5.7% reading on the s&p 500 proproitary oscillator and it says the overzealous selling pressure could be wrong here that level says too late to sell if anything, you have to do what

i did on the charitable trust, you have to start buying third it's painful by the way to buy, but you have to third, earning we know between the president's trade war and the fed's spending, we are in lock step here the u.s. was a tad softer than expected and mcdonald's rolls out delivery energizing the base, i believe that the american business will start to pick up too. hence why the stock gained today. honeywell reported much better than expected but the back drop is so hideous. today, united technology had a similar day. greg hayes says he believes he believes he can make the acquisition happen held up by chinese regulators. united technologies can break itself into three separate companies, aero space and climate control and elevators.

by the way the otis elevator business saw a 14% increase in chinese orders as the prc is aggressive about the building stocks. honeywell, you should say, listen, this quarter was every bit as gold as what hayes delivered. what else, how about verizon verizon, gave you -- very low churn. big boost in subscriber numbers. this sleepy stock, it closed with a 4% gain in one day. that's astounding. of course, caterpillar plunged 7.6% but i have never seen a two-faced analysis offered about this tremendous company. it was insane. do you know what the truth was they reported fantastic quarters but what you heard, excellent chinese orders the short wasn't as strong as the first quarter but so what, they told you it wouldn't be it was trading at $173 and now

$119 the stocks down is 31% and now the people tell you be careful fools. orders are better. i'd be a buyer, not a seller how about the break down of 3m is that glib no here's where i draw the line 3m's numbers were unacceptable unacceptable for the great company that it is they saw an inexcusable slowdown in a host of businesses including health care. down 2.8%. and consumer off 3.4%. i mean, that's just horrible now i can spin you a story about currency adjusted mumbo jumbo but at the end of the day, 34 m has an execution program if the new ceo puts up pitiful numbers i have to tell you i don't think he'll last for long. my trust owns it i was embarrassed. mortified even i have owned this company by 30 years and my father repped their

products in philadelphia this is not the 3m i know. now, here's an interesting exercise the averages hit the lowest levels in five months about three-quarters of the stocks in the s&p 500 are in bear market territory, but what about the dow jones industrial average that have reported so far during this earnings season so american express, verizon, mcdonald's, united technologies, johnson & johnson, jpmorgan, united health all reported sharply better than expected earnings ♪ hallelujah 3m and ibm were abysmal, although the latter seems to have bottomed here just as predicted last night what have we got nine good, oneok kay, -- one okay, two bad. i find that encouraging. how about you? because the tape acts so terribly nobody is willing to deal with the facts except for me because i'm bound by them not by the emotions. what else? i love it when a stock gets

downgraded the semiconductor group rebounded dramatically after being hit with a downgrade now texas instruments after the close gave us tepid guidance, but let's see if the group doesn't bounce tomorrow. watch nvidia they need to hold say 214, 2 is a. i told you to sell it higher, but geez, it's getting interesting. all right, let's get to the heart of the matter. what continues to go on is a vicious pincher movement the feds are running a hard-line against the economy totally undeserved many fed leaders said things are fantastic in the economy meanwhile i see no break through with the chinese on the horizon but we're getting a decline in housing prices and the oil has fallen off the cliff the rates i have to tell you here's what you haven't heard from anybody else, i think they

peaked for the remainder of the year the fed has to wake up to the fact that raising short term rates the ones they control is a silly way to fight our own tariffs. let's accept the fact that this market has gotten swindled for days on end because of inflation, anti-growth rhetoric from the fed endless chatter from the president against china. there's some so much we can go down on the same news. looking at the earnings i see inflation peaking, i see the fed being able to declare a victory. although whether they want to do is another question. i see a president who can stop being so darn ferocious about china. which should make it easier for the communist party to come to the table. i'm not saying i disagree with them i'm just saying maybe do it a little less let's say -- how about quieter? maybe that would be a way to get your job done, mr. president quiet. anyway, that's how we turned the terrible day into the pretty decent one

i think we'll produce buyers, no sellers. and we go into the end of the mutual fund selling and the haunted house of late october. in other words the bottom may be put in on the next swoon down. if it isn't in all already john in south dakota john >> caller: hey, jim, good afternoon. and a good booyah to you in a wild market day. how are you? >> i'm good. how about you? >> caller: pretty good my stock is polaris and i follow all your trending rules. and i subscribe to action alert plus but i'm entering the house of pain. polaris is doing all the right thing. they have beat earnings expectations three times in a row. they dropped the victory motorcycle line and went all in on the indian brand. i bought it last year and now they have a pontoon boats as well as cruisers

they're try -- and most importantly, i think scott smith is doing a heck of a good job -- he's addressing the tariff issue in a really unique way. >> but that's the problem. scott he does have to address the tariff issue and then you're considered to be a loser that's what happened to him by the way can i just say that that is one tough business and let's not forget that it's like thor, okay? it's -- it was a great experiential thing until it's not experiential anymore bill in florida, bill. >> caller: hey, jim, first time caller, long time listener back in the kudlow days. >> oh, wow >> caller: yeah, i'm calling from the florida panhandle and i'm calling about plan tronics in july they had the merger and the stock shot up to 82. i could understand some fallout. but not a hair cut like 33%. so i'm wondering is in a black sheep in this family >> i think people feel -- first

of all, i hope everyone in the panhandle is doing well. mexico beach, apalachicola, three of my haunts, i hope everybody is rebuilding. i know they're tough people there. plan tronics is too commoditized i felt it was nothing special. never harmon & cardin or logitech either. i believe the next decline will produce buyers, not sellers. on "mad money" tonight after a volatile day on the averages one managed to stay in the green all day. i'll tell you what the move of it can move for the overall market and i know the volatility -- the action can be scary, but you know what we'll talk it through. call me or tweet me. and then the nasdaq had tech stocks having a real impact on the market how is a fantastic company handling the current

environment? i'm talking with the ceo stay with cramer >> announcer: 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. ♪

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and now get $200 back when you buy a new iphone. click, call, or visit a store today. the most important part of the action today wasn't the averages, it was the stock of a single home builder, pulte group. we have seen them report good results and thing their stock got obliterated. they had some better than expected numbers but first time orders were down 13% and the ability to rally can tell you that this bedraggled cohort may be finding a bottom. you know i have hated the stocks forever. if you look at what led this market down it was housing,

housing stocks the fed's lock stop rate hikes stopped them in their tracks the thing that really boosted the numbers was senior living. they had orders up 22% basically fancy retirement homes the funny thing is that the housing stocks may become invisible because the fed has put the kibosh on existing home prices homes are now unaffordable for large swathes of the company and who the heck wants to sell their existing house with say a 3.5% mortgage to buy a new one with a 5% more damage the stocks were reflecting a collapse in the price of homes and now the stock has become more not less compelling if the stocks cratered ahead of the facts and then the facts go down, the stocks get more interesting that's the way that our business works real estate is a funny business. prices rise, multiple bidders try to buy the same home and then the price gets so high that the bidders vanish we are at that point in many

areas of the country in geographies like san francisco, new york, prices have started to go down in some cases very steeply but in other areas sellers keep waiting for the buyers to come in and kick the tires. but traffic is going way down because of this affordability issue i just mentioned prices stay the same for a bit okay, until the sellers figure this out and then they break price until the buyers come back it's substantially, that's the cycle. it is playing out exactly as the stocks foretold it would there are only two ways to get the real estate moving in. first, the fed is determined to slam the brakes on the housing the fed said we're good. clearly -- it's funny, the fed has already succeeded they just refuse to acknowledge it or they don't watch the show but that's fine too let them laugh again like in '07. this means sellers need to cut prices and offer incentives which is another win for the fed. i believe much of the country is now adjusting to the lack of

affordability. because there's a shortage of land you don't see the supply demand imbalance that would cause a genuine housing crash in 2008 but if the fed tighten four more times with the blinkers on, well let's just say it will be real will bad for homeowners. i don't want to be a downer, housing got too expensive. i have a 2.7% on my house and it's affordable. am i going to pay that double for a new home and you know i can't transfer my mortgage to that pulte, they're down for the year but the ultimate take away the whole group to roll over was the home builders and the 1% gain in the orders is enough to satiate

the sellers and to suddenly bring in buyers. the home prices need to go down and that'll take months. the fact that buyers can see value in the hideous group is the most bullish development in a bullish turn around of a session. stick with cramer.

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okay today was a wild one nobody likes looking down the barrel of a down market. least of all me, but guess what, i'm here to help we'll get through this together. we always have come on, 14 years, right pretty much what we're going on. let me walk you through a little time line of today a tale of the tape obviously, that was thorny, there was no reason for this to hold this is where we started to take a header and what's really driving it down here, okay 3m which was disappointing we talked about that at the top.

but you know what? united technologies was very good, caterpillar wasn't as bad as we thought. we actually hold for a little bit. then we try to take this out and what happens we don't take out the bottom meanwhile, the vix which spiked right here starts going down remember what i told you last tuesday that the vix would peak before the market. gave you a nice heads up this was going to rally we got that. now the rally started a little too soon why do i say it started too soon, because right here when you move up here, imagine this maybe you were courageous and you bought stock right here. what happens you flip it into this top of the day and then the market can't take out what would have been a fantastic comeback so what you're looking at is a very typical bottoming pattern why? because the next time it comes down here, the shorts are going to be afraid that it's going to be a snap back so we probably have seen the lows for this period we're more than minus 5 on the oscillator i follow. we had huge down to up

at one point as i mentioned earlier we had ten stocks down for every one up that is typically what the late mark gaines is told me is where you have to stop shorting and start buying i know it's a loss, right? maybe we'll say this is an "l" for the bulls. but you know what? if they hadn't run out of time-outs they might have won. roxanne in oregon. >> caller: how are you, jim? >> i'm doing all right >> caller: all right i wanted to ask you about oshkosh. it's getting kind of scary to watch this stock take such a dive back in january it was up to 100 and now it's all the way down to 56 >> right >> caller: and really dropped over this past week. is it because of the china thing or is there something else going on with oshkosh? that making it take such a dive

or the general market -- >> i think it's the military truck. i think there's a concern that the demes will take over the house. i think there are a lot of people who feel it's come -- that it's crunch time and that the democrats have a shot. if that's the case, then anybody who is buying companies who have military spend are going to lose that's why that stock is down. it's funny, i have to tell you something, roxanne if the democrats win at this point -- if the democrats win at this point, i think the stock will go higher that's how down it is. let's go to tyler in washington. >> caller: thanks for taking my call i have invested my money in the last few years and i was using it for a down payment on the home in the next two to four years. i'm starting to see that money disappearing what should i do it? >> when you're using a time frame my rule of thumb is you can't have as much money in the stock market

by the way it's up to five years we're -- where i don't think you can have a huge amount of money. look, there was one point where i said systemic risk and you know what, if you need money for the next five years you have to take it out and it was cut in half and people decided to take their money out of the bottom which is what i feared let's cut it back by 50. cut it back by 50% okay and then you can let the rest run. i'm not -- i do not want on my hands the idea that you're not going to be able to buy a house because the market goes lower. mary kay in colorado >> caller: hi, jim hey, i'm someone who has no financial background but you have really helped shape my into the decent investor. i want to thank you for that. >> oh, you're welcome. >> caller: thank you so given current market conditions i'm wondering what percentage of my portfolio i should be transitioning into cash or more defensive names right now. >> well, first if you don't mind, let me ask some questions. your age

>> caller: i'll say -- >> you give me a rough average my wife is in her 50s. late to mid to early 50s >> caller: okay, yes >> that too. similar age to my wife all right. look, in the old days when i got into this business it was in the early '80s the life expectancy is different from what it was now and our goal was to have you in 65% bonds. interest rates are still too low after the fed hikes to make a huge amount of money for you i bet you'll have a long and i hope happy and healthy life. i don't want you to have any less than 70% in the stock market you can put it in some one, three, five paper cds and if the market comes down i'm going to ask you to put more in the market because you won't get the return that you immediate to save up for retirement using bonds. michael in new york. michael. >> caller: hey, a big booyah to

you, jim. >> right back. >> caller: real quick i wanted to say i finished a couple months ago "get rich carefully" and it was helpful. >> that book took me more time to written that the others i was frankly -- i know i should do a revision of it. but you know what? the book business i'm going to be very candid is a very tough business now and frankly, unrewarding one because you don't get the kind -- one-on-one attention when writing a book. i know this is off category, but it just hasn't been fun to write. i love to write so much. but not books. not books. >> caller: as a new investor i would like to thank you. >> well, sure. let's go to work what do we have? >> caller: sure. my question is with the recent weakness in growth stocks would you recommend buying into growth if there was a better price point or switching over due to the weakness we are seeing >> no, go with f.a.n.g. and here's why f.a.n.g. has no china. and we obviously -- in october

4th, vice president pence wrote a speech that everyone in america has to read because it was very much like a containment speech against china and then the federal reserve has been on squelching inflation we have it can find it. when that happens the companies with the highest price to earnings multiples benefit what it comes down to is you have a two-fold reason why to own stocks that people have given up on. facebook -- they seem to have a hard time taking out 150 i want to go to jori in texas. >> caller: i want to thank you for the day to day wisdom in this crazy market. >> you're terrific someone stopped me on the street and said that. well, you know, i was in a hurry. i didn't want to stop candidly i was late for an appointment with workday but you know what? you stop and you talk and you learn. i learn not him. i learn. and i did. how can i help you

>> caller: well, my question is in regards to the airline industry with the exception of united, delta, american, southwest and jetblue are all down 10% or more since october 1. >> right. >> caller: oil has gone down from 75 to $66 and the airline historical peak is in december and january. is now the time to buy into the airlines >> yes yes. precisely what you said. jori and the only two people to look at this oil is getting crushed everybody lowered the numbers because there was an article today about cruise ships and the gasoline and what it can do to the airlines and jet fuel. it was almost like disinformation soviet style. the fact is that oil has come down and oil is the biggest cost. people are still traveling and i'm taking a hard look and urge you to look at southwest airlines at 57 symbol -- up down, up down.

can't stomach the wild ride, hey, come on, that's why you're tuning in. that's why we're in cramerica. i have you back in this volatility much more "mad money" ahead. how is a company like workday an outstanding company withstanding the unknown? i'm talk to the ceo? and the stock is down 10% what will it take for the stock to turn around? and all your calls rapid fire in tonight's lightning round so stick with cramer. tomorrow -- kick off the trading day with "squawk on the street." live from post 9 at the nyse. >> it gets very beleaguering. >> got tesla 5%. >> there you go, david way to nail it way to drive it home. >> it all starts at 9:00 a.m. eastern.

this sell-off has been brutal for all sorts of stocks but among the worst hit groups

are the cloud plays. the cloud was the sexiest story around, you had the fast growing software companies that were saving their customers a fortune because it's a lot cheaper than buying programs and storing them on your own servers. that's called on prem. it's very, very bad. and i have been telling you for a long time. now september and october tend to be very difficult months for stocks that are winners. as a matter of fact, winners have been getting obliterated but only because we're approaching the end of the year. the fiscal end of the year for money managers and they like to take profits rather than tell taking it away october, they're done with the selling which brings me to workday, one of our favorites. a cloud based software companies that helps to automate payroll and financial management jobs. you know i think this the world of this story. but in many ways workday the stock, well, it marked a high for the group. they had a terrific quarter and they got slammed then they had a bullish analyst

day and they got hit the darn thing has come down $28 or more from 18% from the september highs this weakness has little to do with the fundamentals which are excellent. workday tends to become less attractive to big institutional investors when the fed won't stop talking about inflation the actual company though is still doing great and that's what we care about on "mad money. in fact, they recently acquired adaptive insights, a cloud based planning platform for $1.55 billion over the summer. i think this is an important acquisition because it broadens the whole spectrum of what workday can do for you don't take it from me. we had a chance to check with aneel bhusri, the cofounder and ceo and the ceo of adaptive insights take a look. congratulations, tom, congratulations. when i look at this deal, it is not so-called a lot of money but i think it brings a lot of

scale. can you define how much this means in terms of new clients and in terms of upsell. >> sure. well, for us, it was a lot of money. >> right i know but i think it's going to bring a market cap that's much bigger. >> i hope so we had this vision for enterprise applications that starts with planning moves to execution and moves to analysis. and that's how business works. you come up with the plan, you execute against that plan. you analyze the results and you do it all over again we had tried to do planning on our own but came to the conclusion that we were several years behind companies like adaptive and needed to be in the market today it adds another $5 billion of market opportunity to us tom will tell you about how many customers they have, a strong customer base but it rounds out the vision where we're the first and only company that can deliver planning, execution, analysis as one unified platform. >> and tom, i think that when i

look at the clients it's a different base so it's therefore -- particularly if you use his fantastic enterprise sales rep group. >> right that's right, jim. we have over 4,000 customers using adaptive insights business planning cloud we have an opportunity to accelerate our business particularly with larger enterprise customers where workday has such a strong base. >> i'm loathe to talk about traditional rivalries but i went on gardner peer insights and sure enough what comes up, you versus oracle. and i have to tell you that t the -- let's just say that you fare very well when it comes to would you recommend and they don't. how does this help you given that that's clearly people who think it's competitive how does it help you take them on >> so you know it's all about solving customer problems and planning is a critical part of every business and getting into the cfo's office i think the thing that we have

and adaptive share is a very happy customer base. and that's what we're in business for that's the biggest advantage we are both born in the cloud. it gives you a huge advantage. no legacy baggage. born in the cloud, modern technology, happy customers. i think you know i think that together with the employee centric cultures i like our chances. >> just for the record, 93% said they would recommend you 62% said recommend oracle. tom, you guys go way back, you have been friends for 15 years at the same time, this deal happened rather rapidly. weren't you about to go public >> we were we were on the ipo road show and i think the key was the alignment of cultures of the two companies. very customer centric. very employee centric. and with the working relationship that we had, there was a lot of trust which is required to do a deal in a short time frame. >> when you talk about wholistic collaborative planning i'm sure that's some people saying, well,

that sounds like mumbo jumbo tell me why that's not mumbo jumbo. >> in business, planning sits at the execution at the intersection of execution and strategy and everybody in the business has to plan. and adaptive insights' platform makes it easy for people from across the business to do planning together. >> okay. now, my wife told me i should ask you, she's on the board of bucknell bucknell is a good workday client she believes that you can help keep the costs of tuition down which may be one of the most troubling parts of our country how can workday do that? >> well, in general the cloud, whether it's the workday applications or the adaptive applications run at a lower cost than traditional legacy applications and we think over a five year period we're about 50% of the cost of those legacy systems. and you can redeploy those

dollars into better classes, lower tuition. hopefully we can help. in the case of universities we have a student system as well. so really deliver the full scope of applications for universities. >> excellent all right. so tom, now that you're part of workday we look at -- you could have been public yourself. the market has been very tough it's been tough for cloud companies. how do you feel about now -- you don't have the individual that you would have, but the volatility is shaky to you. >> there's a lot of volatility on the market. but we're focussed on the long term and delivering long term value to customers and that'll create value and the opportunity to do it as workday company we think accelerates our business strategy. >> okay. now a couple of quarters ago, i should know it, but you talked about a glitch in your salesforce you said you get it fixed, and we were in a market that was unforgiving and figured therefore are you kidding me

who was this mr. bhusri, but you did. you were honest and it was se - self-inflicted and this time it's a vicissitude sell-off. >> well, business is good. nothing has changed this year. my plans are healthy, business feels good our win rates are exactly where we want them to be we were top ten best places to work and this past week we were number one on that fortune -- future 50. the companies that are the most innovative companies in the world. so it feels like things are continuing to head in the right direction. the stock market is very volatile and i try not to look at it. >> right well i congratulate you because i know that's a very hard fought honor to get tom, we'll leave it with you, i want to know, will we see you or is this it for tom bogan in terms of the exposure because i enjoy talking to you. >> you'll see tom. >> definitely. as part of workday >> all right so terrific.

aneel bhusri and tom bogan thank you. whooo! want to take your next vacation to new heights? tripadvisor now lets you book over a hundred thousand tours, attractions, and experiences in destinations around the world! like new york! from bike tours, to bus tours, to breathtaking adventures, tripadvisor makes it easy to find and book amazing things to do. so you can make your next trip... monumental!

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it is time for the lightning round. sell sell sell sell -- and then the lightning round is over. are you ready, skee-daddy? jack in ohio jack >> caller: hey, thanks for taking my call you have been helping out what it looks like the to be a good steady stock for my holdings the income ticker -- >> no, if i'm going with the real estate investment trust i'm going where there's not a surfeit of properties and that's nursing homes. let's go to mark in michigan >> caller: oh, maestro market, i seek enlightenment and how do they have -- [ indiscernible ]. >> because i think that means that it's the absolute peak. if i were i would sell sell sell

sell to sam in pennsylvania sam. >> caller: hey, jim, booyah. >> booyah. >> caller: hey, i have a question about st micro -- >> i have no interest in it whatsoever can't make a judgment on why to buy sd micro dave in ohio >> caller: thanks for your help over the years with the stock again falling to 52-week low earlier today, buy, sell, hold fifth third bank >> i'll tell you that i saw t s this -- stop it. i saw this group put this the bottom today i think you can pick up -- it's been a hideous decline for the stocks and i think that the decline is being put in the same way that i think the bottom in housing is being put in. i need to go to -- that's in the housing stocks i need to go to brad in missouri brad >> caller: hey, mr. cramer thanks for taking my call.

>> of course >> caller: and all you and your staff do for small investors i'm calling about huron therapeutics they're going to get up fda approval on a nonopioid pain killer what do you recommend? >> i'd rather see you buy canopy because that's a nonopioid pain killer canape is being used to get short -- the entire plethora of all of these pot stocks from canada and canopy is incredibly cheap. i'd rather you own that stock. let's go to joyce in new york. >> caller: hi, jim a belated healthy and happy new year. >> the same to you >> caller: i'd love to have your opinion on whether i should hold even if it's a long time hold or sell lkq >> the auction company, no

you can't sell it here this stock is in the house of pain but it's really ridiculous it shouldn't be this low it's a good company. a low p/e, i'd be a buyer. that, ladies and gentlemen, is the conclusion of the lightning round. [ buzzer ] >> 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 go

okay, the lodge -- the company that makes mobile speakers, video conferencing gear and remote controls all kinds of expensive high end gaming equipment has been a huge winner but logitech reported last night and while they had a modest top and bottom line bead, these were record numbers. when you see some areas of what i regard weakness. they misread the expectations in five out of nine product sectors and they maintained their guidance when investors were hoping they'd raise the numbers. now it's up 7% that's a bruising. so exactly how worried should we be i think we need to dig deeper with the ceo to get a better sense of the quarter welcome back to "mad money." >> hey, great to be here, jim. >> so bracket, i'm trying to decide which metrics i should count on

the gross margins were definitely what i wanted you have got incredible leverage to esports, egaming. i think that's great but then i'm drawn to the revenue numbers. i look at say mobile speakers, smart home then i say well maybe i'm being too bullish. could you explain and let's say solve my conundrum. >> well, let me relax you a little bit so first, the two categories that i would -- three categories are first gaming as you said, we grew 43% we're on a tear. you know the whole story you discovered it first. second one is video collaboration. it's our -- it's also on a tear. grew 25% actually the sellout underneath that grew 50 it's on a tear third, that old core business that everybody has given up on grew 8%. still a very healthy business, it's growing nicely. so those are the three numbers i would focus on the bluetooth speaker number we're bringing out two new versions of the boom and the

mega boom. so we're forcing out the old ones for the last 2 1/2 quarters and now we're bringing in the new ones so that's in transition. the home business is a tiny business for us, 1% of the whole business so i wouldn't look at it >> well, okay, so we have to define why the stock did go down i mean, the rap is that you did not blow out the numbers and we're also used to you blowing out the numbers. can we rationalize that expectations got too high and all you did was deliver your usual greatness? >> well, you know, here's the story. so we grew double digit. we grew 10%. we last quarter you'll remember we raised our guidance, both top line and bottom line so it would have been kind of odd to raise two quarters in a row. as you said, our gross margin which is the most important number on a p&l, we hit that number and we delivered very strongly on the profit so overall i think it was a

strong quarter. >> i know you were asked by a fellow by maine first bank i don't know about them about the processing intel shortage. what that did to you because your gross margin is so good it's probably a non factor but i'm curious to know what is going on in terms of a semiconductor's shortages and logitech. >> you know, i think -- semiconductors, we have to use a lot of chip sets through the different products but we haven't had a problem with chip sets or the other components that are running in shortages in china. we have a fantastic operations team very long standing relationships with our suppliers and we have been able to get what we need when we need it. >> all right so speak to me about esports because you know that when t the -- let's just say when the dust settles we'll be looking at the revenue numbers and realize between that and keyboard that's all we need to look at because that's what this company is becoming. if you wanted to shut the stuff that's slower right now, you can do that and raise the multiple

of your stock. it does appear to me that what was on fire is just getting hotter. >> it is getting hotter, jim you know, exsports we launched -- esports we launched one we spent two years developing it directly with prose, weighing 80 grams it's super light. then the other one we took the biggest mouse in the gaming business and we upgraded it with the best sensor in the world so it's on fire. so in our business -- it's super, super hot. >> so bracken, are you ready to do what i think smart business people are doing including a friend of mine, which is begin to get behind little league teams of gamers because we have a progression. if you're a baseball player, you have got little league basketball, i played basketball with the hopes of one day being a pro. that's pop warner. i thought maybe i'd be a pro you know what i'm talking about? now we have -- >> i know what you're talking

about. >> we have ncaa scholarships that are coming. a logitech branded 7, 8, 9-year-old team would make it so that your company would have gaming for ages and a stream of revenue that would be remarkable. >> we so believe in this, jim. you know, there's a company -- a start-up called super league gaming that has teams across the united states and all the major cities, it has the equivalent of little league and minibasketball and pop warner football all kind of combined. we have invested in that company because we do really believe in this so we're right on it. >> how about going on the software side what do you have >> well, you know, software when i started the company we had i think no -- we had firmware engineers but no software engineers. one out of three of the engineers are software engineers and we're adding software in our business in our air phone business now we have a really nice app where you

can customize the sound and you have an incredible equalizer so we have software coming into every product line we have ai in the conference video equipment which is cool. >> last thing i wanted to know, just in terms of your judgment, fortnite or red redemption 2 >> i'm going with fortnite >> whoa. i don't want to tell six pack sellneck that. he'll find you. >> don't tell him. >> you better be careful anyway, i think gaming is huge you didn't diminish my ardor for it one bit good to see you, sir. >> thanks so much. "mad money" is back after the break. 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,

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do not bite if the market opens up you need a down opening for real rally and nothing else i'd like to say there's always a bull market somewhere, i promise to find it here on "mad money. i'm jim cramer see you tomorrow vestment will fe

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