up as a thread the needle trade >> that does it for us here at "options action. we'll see you next friday at 5:30 with plenty more trades don't go anywhere. "mad money" with jim 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. 12 weeks a year, you have to be on top of the game playing above your head and deeply focused i'm talking about the three weeks each quarter where we get

bombarded with earnings reports that report all at once. so why don't we get right to the game plan for next week because it is an important week. monday, we have got martin luther king day so the markets are close. but tuesday we hear from johnson & johnson and ibm. i think both will be battleground stocks. well, j&j is doing very well with the strong pipe line. the stock hasn't recovered one iota since the big headline grabbing story about how they may have hid data that the baby powder allegedly contained asbestos i'm confident if all allegations are true which i don't think it is, it shouldn't have destroyed tens of billions of dollars. heck, even the guy who is suing j&j over this said as much will gorsky address, i don't know the currency will be a huge negative ibm wants to know if this 5% yield paid too much for red hat.

i think it was a bold and brilliant acquisition. but what i want to know if jim whitehurst the ceo of red hat will play a leadership role in the combined company and wednesday kicks off with comcast. we hope they'll give us some insight into the penny acquisition of sky, which was announced back in october. i think the deal is terrific because come cast has grown so large that the regulators frown on them making more acquisitions here in the u.s. the stock is flat lining maybe this conference call can get it off the schneid i can't wait for procter & gamble to report management has laser like focus on growing this company again. i think that they'll be successful this quarter. remember that last quarter was the beginning of proctor's outperformance check out the stock of abbott labs which is run by the incomparable miles white he's money and particularly in the glucose monitoring device.

i bet abbott tells a very compelling story i have owned it my charitable trust forever. i'm a huge fan of greg hayes, i like his plan to separate into otis elevators and aero space. and like dupont, the breakup is hard do and will weigh on the stock until we get closer to the corporate divorce. after the close wednesday, we hear from two quality companies with stocks that have been crushed. texas instrument on wall street and lam research texas has a lot of business with apple. it might be hurt by the slowdown in cell phones the far more interesting stock to me is lam the stock has been obliterated by the downturn in flash and memory prices. i think the quarter will be weak and there's a new ceo but with the stock down almost 100 points

i think you can start buying lam research betting we're near a bottom. well, i want won't happen all at once you need to pick some up if the stock gets hit that's right, i'm saying that lam one of the worst performers is at a good level to start accumulating last week at the jp morgan conference i listened to the ceo of bristol-myers when they report on thursday i expect he'll talk about how adamant this deal is for the business earnings. i think after thursday people are going to embrace this deal we've got dueling railroad reports on thursday, you know on the pacific and norfolk southern csx had a good number yesterday and it was initially panned. union pacific has a new chief operating officer who is the disciple of the late hunter harrison i would be a buyer of any dip. almost every line item was good.

you know i have been a huge, huge fan of mccormick the spice company. i bet we'll hear great things particularly from frank's hot sauce division if you see this label in the supermarket, snap it up. let me know. here's a wild one, freeport, cotton and gold miner. they have been perky of late my friend stephanie link was on halftime with me and she was talking about it it's interesting because copper has been a real dog. we have to find out what's going on here. i can't figure it out. but i like the way it trades i wish freeport had a better balance sheet. i can't wait until after the close thursday because that's when intel reports i wonder if they'll announce a new ceo. we spoke to interim ceo bob swann out in san francisco he was ebullient about the business how about starbucks? remember this stock took off last time ceo kevin johnson spoke on the quarter i feel he might have stolen his own thunder.

unless he has positive news up his sleeve about china there's nothing to propel starbucks higher, but if it falls in the 50s, you might want to snap up for this quarter listen, we have a crazy market you never know i'm hearing too much chatter about how western digital might be so concerned about the balance sheet that management may actually have to address the dividend currently yielding 5% western digital makes disk drive memory chips and they're seeing the pricing falling thousand the door i'm troubled by the stock that the earnings estimate will not be made. so stay tuned. on friday, we hear from colgate and dr horton. big home builder both are very important at this moment there's been a lot of noise being made right now that colgate may actually be ready to have one of the storied runs after years of underperformance. i don't know it's not cheap at 20 times earnings but if proctor starts

to do well, then colgate might be worth a little bit more too the housing numbers have gotten grim and the industry itself has been damaged by rising rates but mortgage rates have levelled off. it should bode well for horton still, i prefer lanier and kb home if it wasn't for the shutdown, next week's earnings slate is going to drive you crazy i can't recall a time when the forecast is much more important than the results stay close we have good ones that could pop including abbott labs and mccormick and maybe intel. especially if they get hit before they report let's go to matt in colorado matt >> caller: booyah, cramer. >> i like that what's up? >> caller: hey, jim, i'm a big fan of the show. >> thank you >> caller: my friends and i talk

about you all the time i'm a college student right now and i'm a first time investor in the market i opened up my own portfolio a couple of weeks ago. i'm wondering as a first time investor like myself should i invest look into the mutual fund or should i maybe experiment and look at individual stocks? >> okay. very clear on this the first $10,000 i have been saying this forever must be in index funds before you buy a "mad money" stock. you know what? it's funny not funny, the late jack bogle insisted that this should be my view, i never want against jack. first $10,000 s&p fund in honor of jack, vanguard. erwin in new york. >> caller: hi, jim how are you? we lost a giant, jack bogle, the inventor of the index funds. and my question to you is in this day and age do you feel that the dow jones industrial average of just 30 stocks is it true and accurate indicator of

market sentiment overall >> great question. i think it's a little atavistic. but when you talk about the market people talk about the dow. i have given in. i'm tired of saying to people you know what? dow doesn't matter what you should care about is the s&p. but you know what? erwin, life is too short i care about the dow all right, there we go okay next week is going to have you going crazy. forecast is key. even more than earnings results. and by the way, just so we're really clear this day is not only martin luther king birthday, but actually the birthday of my executive producer regina who got dressed up for the occasion. stick 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

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how can you keep track of a confusing market let me give you some advice that rarely ever steered me wrong there are two things i want you to watch one, macro, big picture and one micro, company specific. let's stall with the big picture. keep your eyes on the bonds. look i know the bond market is boring as all get out, but it's much larger than the stock market and more importantly it's very important to the direction of stocks. back in the day when i was running my old hedge fund, if i had to be away from my desk i would be asking where are the bonds? that's how much it mattered to me yet, stock market investors seemingly forget the bond market they forgot it in 2000 even though the market was softening. and would this cause this a

sell-off, they forgot it when the fed raised the rates 17 times in the lead-up to the depression there were taper tantrums as we call them where someone will have a hawkish tone. more recently we have had a kind of schizophrenic relationship with bonds when the yield on the ten year treasury started to break out above 3%, everybody panicked yet, when it pulled back far too many were quick to forget about the bond market. look, it should never come as a surprise that they're rising or falling. the bonds can punch your portfolio in the face. if you're not paying attention a lot of people don't pay attention. because as i said, bonds are boring that's why i say don't forget bonds. always keep those bond prices right in front of you. when i was coming up at goldman sachs i was trained to focus on bonds because bonds are the true competition to stocks. competition i most feared. when short term interest rates

by the fed go sky high, you have to expect that dividend stocks the stocks of companies with high yields like southern, they'll sell out when long term interest rates rise the one to watch is the yield on the ten year u.s. treasury you have to start being wary that all stocks might be worth less than they were trading before it's simple f the competition gets more attractive t stock market gets less attractive. this is a zero sum game. you should be especially worried about rising long term rates that are caused by a pickup in inflation. that's a toxic brew. inflation eats away at the value of long data assets like equities because the future earnings streams will have less purchasing power they also make it more expensive for banks to lend. and that puts a damper on the economy. for a long time we had an ideal environment. low interest rates and i don't want it to lull you into the false sense of security about the dangers of a big spike in

rates. that's why you have to watch the bond market. you know what? let me put this in another way if this were basketball i would be saying if you just watch the man with the ball let's call him citigroup, you don't want what the other team is going on defense, the bonds no way you'll get to the basket. the man can determine the stock action every time. many people who got in the game don't know what bonds are. yeah, that's how benign they have they're trouble when you say that the bonds went up today that think that it means interest rates went up, instead of going done. you'll be in a severe disadvantage when it comes to investing in stocks so keep your eye on the ball. and the bond that's right the bond without them. what else do you need to watch on the microlevel now micromeaning the company specific level, you need to be cautious when you see unexplained resignations by key executives when the chiefs resign, maybe you should go too. yet when you see a ceo step down

for no discernible reason, you should presume something is wrong and do some selling. i sold stocks because the ceo or the cfo the chief financial officer resigned if it turned out i jumped the gun i would buy the stock back in my whole investing career do you know how many times a ceo left for an undisclosed reason and the stock was still right there, once -- visa. i can't think of any other examples why? simple ceo's don't quit for personal reasons. not if they want to keep their bonuses. these are fabulous jobs. you're paid a fortune. you don't have to be a chief executive officer to be devoted to your family nobody gets one of the jobs without giving up a great deal of what most people enjoy about life things like family, friends, nights out competition for the positions so fierce that when you finally land one, you don't up and

leave. not for no real reason when up they leave it's because there's something wrong at the company. hence my rule, when high level people quit a company something is wrong aha, you say, i know a ceo who quit because he had an epiphany or someone wants to spend time with their family, okay, fine. here's the thing when you're investing in the stock market it's not the xep then sha matters but the rule there's some situations where it's a mistake to sell a stock when senior executives leave i don't care because most of the time selling is the right decision this is the kind of rule that helped keep me in the game at the old hedge fund and helping you avoid losses one way to do that is by not taking on unnecessary risk like betting on companies that the ceo just resigned for undisclosed personal reasons the bottom line -- if you want to get a handle on the stock market you need to watch what's going on with the bonds. that should be obvious at this

point. but it's something that people tend to forget remember that unexplained high level executive resignations equals sell. giorgio in illinois. >> caller: booyah, thank you for all that you do. i truly appreciate it. >> oh, thank you >> caller: my question is what percentage of a portfolio should be in index funds and held in cash with the volatility of these future markets >> okay. well, a lot of that depends on your age for instance, by the way, index funds are fabulous because you don't have to do the work on individual stocks and they give you a great diversification. when you're a young age you want 100% in stocks as you get older you want to take that money out and take the money out. i have in "get rich carefully" and literally all my books i talk about the different stages but as you get older you have to raise some cash. let's go to blake in nebraska. >> caller: booyah, jim

with the current market volatility, what advice do you have for the young investors >> ride it out young people have the whole lives to make back the money lost in the market older people, you can't make it back you have to be more conservative if you want to get in on the stk bond's the word and please, when executives steps down without an explanation, sell sell sell and stick with cramer. take control with the new mad money.cnbc.com full episodes, analysis, even your own sound board plus, special access to "mad money" 101 with rules and techniques to break down the market for all investors. >> the red flag that makes me drop a stock immediately is -- >> it's everything you need right when you need it the new mad money.cnbc.com

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before you are a good investor you need to be a realistic investor some people are not realistic. they allow their emotions to cloud their judgment or they allow themselves to be surprised by the inevitable. let's start with the inevitable. you think people would get comfortable with the idea that stocks can go down, right? after the dozens of corrections meaningful pull backs we have had in the last 20 years you'd think we'd get used to the process. you would assume that we'd say, hey, let's prepare for the inevitable correction because it's around the corner yet aside from the bears who think we're due for a pull back most people act like every correction is a total shocker. it never happens so every time

the stock market goes down, there's a huge contingent of people who are totally stunned just caught by surprise. you know what? that's a bad attitude. to me, the corrections they're like the rain. i know that rain is inevitable so do you. i prepare it to rain when the rain comes i'm ready, skeedaddy. i have an umbrella or a coat or stay indoors that's how you approach the possibility of a pull back. we're going to get one and so it's best to keep some cash ready on the sidelines in case that time turns out to be now. that's what we do in my charitable trust of course, plenty of corrections happen in recent times we have had a lot of major declines by which we made lots of money and everything looked peachy in january of 201 the stock market roared higher and then the averages got obliterated. why do i mention this? because the time to be most worried about a correction is

the moment when no one else is concerned. that's when we get the unexpected declines when everyone is euphoric when i made 2% in a day on the upside i knew i was too exposed. i knew i was too long. i knew i had too much stock, i knew my portfolio would kill me if we caught a storm so as the market lifted or as my performance was swinging too much to the upside, i'd pull back sometimes furiously selling right in the spread to prepare for the big down day that was right around the corner. sometimes i had to buy back the stock but when we got hit my clients thought i was a genius it wasn't genius at all. it was discipline and preparation and plus i had taken something off the table in order to raise cash i could buy all sorts of high quality stocks

look, we may not be able to predict what a storm is going to strike but we have barometric readings that are helpful. yet, if corrections are like rain then where should you get your weather reported? >> i pay for something that's right i like to follow the proprietary standard & poor's oscillators that tell us when the market is get overbought or oversold when it's at plus 5 or above we have come up too far too fast to the point it's gotten dangerous. a plus 5 reading means you need to pull back and wait for a correction what do i mean pull back aggressively if you're nimble -- a big if, you might want to ring the register on half of the portfolio. that's right not half the stocks but half the shares in each position. that way you'll have a ton of cash on the sidelines that you can use to buy back your favorite stocks at lower levels when the storm hits. even if you're not at a all nimble you should be selling something to raise some cash when that oscillator that i buy from the s&p company hits plus

5. and look i understand. maybe you want to take a little off. but people who are aggressive want to take a lot off by the same token when the oscillator hits minus 5, the market is oversold we have come down so far so fast that we're due for a short term bounce i want has worked like that for years. a good place to put your cash to work if you haven't already by that point -- it will sell off worth case scenario, there's no storm. i'll admit that's real risk but look at this way using the methodology i gave my investors the 24% return of all fees that was more than twice what the s&p 500 would have given them over the same period. that's pretty strong evidence that avoiding losses on big down days makes up for missing the partial big gains on the up days let's talk about the other component, yes, you need to accept that meaningful sellovers are inevitable like bad weather and you need to stop yourselves

from making the investment decisions from the emotions and the worst is hope. hope whenever i hear the word hope as in i hope that doom stock du jour will come back to where i bought and i can sell it off without a loss i get furious hope is not part of the equation don't hope for anything. hope is emotion. pure and simple. this is not a game of emotion or at least not your emotions every stock you own because you hope it goes higher is another position in your portfolio that's not being filled by a stock you believe will go higher yet, i hear hope constantly. that's fine if we're talking about religion or sports you know the coaches of some of these come from behind ncaa basketball teams keep their teams motivated through hope, but in the stock business hope is a mistake because it's reason, especially when we talk about the stocks that trade in the single digits. i bought this at $5, it's at $4, i hope it goes back at $5 then

i'll sell. how hard can it be to do from 4 to 5, wrong. most companies will fight tooth and nail from keeping their stocks from going into single digit territory. if you find something that sells for a few bucks the market has already rendered a harsh judgment when you let hope become part of the equation, you could end up holding these low quality pieces of paper waiting for something that will likely never happen. forget hoping. and forget waiting for higher prices i say the thing to do is to cut your losses. and move on to a stock you can actually see -- can see going higher in other words a stock you had done the work and you believe will go higher it's not because of hope but because of reason. the bottom line -- it pays to be realistic in this business so prepare yourself for corrections. big pull backs are like rain they're inevitable

whatever you do, don't make stock picking decisions based on hope you need to invest in the real world. not in a fantasy land created by your own hopes and dreams. let's go to dick in virginia dick >> caller: hi, jim i love your show i listen and learn and profit from your advice. >> thank you >> caller: and i have a general question about retirees and the stock market i'm now 72 years old, retired and wondered even though i'm well diversed in the favorite stocks i cannot risk a large market correction. i might not have enough time to recover. the stock market is the best vehicle for wealth building. should i consider derisking my portfolio by adding bonds even though we're in a rising interest rate environment or get rich carefully by being well diversified with stocks? >> i think at 73, you'll have many, many years but i think you should raise some cash i would say even i'm not sure

about your work status, but someone at 73 to have 25, 30% cash remember i believe that we're going to live much longer lives than most people think 25, 30% would be fine, because rates are going higher then we'll deal with it. pat in colorado. pat. >> caller: hi, jim this is pat from beautiful, beautiful colorado my question is this. i owe $189,000 on my mortgage. i'm concerned about a severe market correction. some time back you say they usually happen once every ten years and i have enough money in my mutual funds and accounts to pay it off now but should i save the tax ramifications of adding $189,000 to my income next january? thanks. >> tax things -- you have to speak to your tax accountant to be able to be sure i do think that you -- look, that's -- let's put it this way.

i think that each -- to each his own on that particular kind of thing. but i'll say that we have had corrections more frequently than ten years and that's the issue i expect them more frequently because we have a much more volatile market up a lot over multiple year's time it pays to be real -- realistic that is. "mad money" is back after the break. jim cramer, you're one of my heroes. >> i look forward to your show every weeknight. >> thank you so much for helping beginning investors like me. >> when you talk about the markets i just believe that you're spot on. >> oh, i love it thank you so much. every night we watch you, i have learned and earned

you don't need me to tell you that the internet has been kind of a double edged sword that's true in every area of life including investing sure the web makes everything more convenient. you have all sorts of information available at the push of the button something that was inimaginable

when i got started in the business it took real effort in the old days these days everything is searchable for all of the ways in which the internet makes the process easier it creates new problems and when we have new problems we need new rules to help contain them for example, you absolutely have to be able to explain your stock picks to another human being if you can't go that, you have no business buying the stock in question here's the thing in the old days this rarely came up but the rise of the internet took away the important breaks and one of the most important warning systems which is talking to another person about what you want to buy. it used to be that you had to talk to a broker now where the stroke of a key you can buy let's say a stock on a workday or a square. without having to tell another person why you're doing so why is that an issue why do you need to explain this stuff to someone else, anyone quels? it could be anybody. preferably an adult.

buying stocks is a solitary event. but we're all prone to making mistakes sometimes big ones to err is human. you should force yourself to articulate to someone else not just yourself why you like a stock. do you know how they make their money? do you know how their earnings are supposed to look if you don't, then you're setting yourself up for trouble. i always see this problem in biotech. including the questions -- like in lightning round people ask about. people buy the stocks without understanding what the underlying companies do or how they can turn a profit i urge you to be able to articulate a thesis for owning every stock in your portfolio to everyone think of it as a test of doing your homework. you'll know whether to cut or run or buy more. if you don't know what you own, believe me, you're going to get slaughtered on the next decline. and there's always a next decline. when i was at my hedge fund i made my employees sell me the stock. literally sell it to me like a

salesperson before i'd buy it. if you're picking stocks yourself get someone to listen to you and let you articulate your reasoning i also like to ask people, what's going to make this dog go up what's the catalyst? or have we missed the move in this overvalued stock up 100% already this year? and of course what's your edge these are all important questions and if you can't answer them you shouldn't be buying look, the ability to make hasty decisions is not the only thing to be wary of on the web there's something else to be aware of, the internet has vastly increased the power of the wall street promotion machine. i have long believed that home gamers and professionals don't have enough respect for the promotion machine. when wall street falls in love with a stock it will go much further than everyone expected to hype that stock to high heaven consider the case of valiant which is changing the name

valiant. the big pharmaceutical roll-up that was one of the most heavily promoted stocks of the last decade its shares soared to the $200 -- actually then some on acquisition after acquisition as analysts raised numbers. why? because management would slash cost and raise prices. then the numbers fell apart, and to make matters worse they had a bunch of shady practices to bolster the results. within a few months it had plunged from the mid 200s to 20s. and before then, it fell all the way to the single digits and on the way back it became bash health valiant shouldn't been trading above $200 in the first place. the only reason the stock had reached the levels to begin with considering the endless pyramiding of new companies on old was because the analysts'

promotion machine was so darn powerful so any time you see nearly unanimous from the analyst community on dubious merchandise i think you have to beware beware and please don't believe the hype one last thing this is true of all media. both online and off line whether you're watching tv or webcasts it pays to be a critic. it may sound crazy for the host of the tv show to make this argument but you can't believe can't everything you hear on television lots of times executives say whatever they want on air knowing they can get away with it lots of time, the fund managers tap their holdings and they have to disclose if they own anything but they rarely see if they're in it for the long or the short techl. you need to accept this as a given. my general approach when you hear on tv it's probably right but no more than that. same goes for the web. except you have to be a lot more careful because there's a ton of junk information online. that's just the world we live in so repeat after me, just because

someone says it on tv doesn't mean it's true i hate to say it but you're being naive if you believe everything you hear. that's why we only bring high level ceos on "mad money." if they lie about how their business is doing, the legal bills will start to add up but you see a lot of money managers coming on television for a lot of reasons they aren't always well vetted and so here's a good rule of thumb. if a money manager is on tv and he's moving his lips he's probably talking bunk. and when someone says a plunging stock is a buy, does that sound like an opportunity? no, you should wonder he must be stuck in that pit. be able to explain your stock picks to another human don't take it on faith not from the analyst community or the money managers who love to come on tv and talk their buck.

jimmy in delaware. jimmy. >> caller: hi, jim, how are you doing? >> i'm doing well. >> caller: my name is also jimmy. so i had a question regarding whether it's better for somebody who is getting in to stocks -- whether they should go in general knowledge or take the time and learn more, because i'm currently 19 and i have a lot of money in likecryptocurrencies i have been making money there i want to diversify my investment but i don't know about stocks should i buy in the general companies -- >> it's a great question i like to have the first investments be index funds and particularly if you don't have time to do the homework which i have described in the conference call, reading through the documents,seeing some analysts' research, then you should be in the index fund. it's no surrender, okay? after you build up that stake

and interested in wanting to buy stocks then i think it's okay. but to not have a lot of knowledge and buy a stock i think that's a recipe for defeat can i go to denise in minnesota, please >> caller: hey, jim, booyah and thanks for all of your hard work for us. >> thank you >> caller: so can you explain dutch auctions and why a company has them and what a shareholder should do about them >> the company is trying to show you the stock is worth more than it is and you want to tender to it and you won't be able to get all of your stock done it's a nice way to make a little money. i think companies that do it are showing that they have tremendous belief in themselves and the last one that i really love was the old jardin. be able to explain your stock picks and never take anything on faith in this business

more of my rules of engagement and your tweets after this so stick with cramer

no matter how smart you are, no matter how well informed, no matter how lucky soon ore later you're going to make some suboptimal stock picks it happens to the best of us the true difference between a good investor and a bad investor is how you handle your losers. people seem to have a natural aversion to selling their losers professionals an amateurs hate doing it they hope operating under the sinking stock is wrong in the direction. they rationalize that the weakness or lack of interest they see will be fleeting and that people soon will recognize the value of their stock the one that's in question that's all well and good until you need money maybe you want to raise some cash because your portfolio has gotten a little too stock heavy. maybe you have some real life extensions that require you to put together a lot of money in a hurry. maybe you're a money manager and that's really tough. ever read confessions of a

streed at dikt, ho-- of a streei have a whole chapter on that a lot of investors prefer to sell the best holdings rather than the worst performers. they'll sell their winners to subsidize the losers you then get a self-fulfilling spiral as the bad stocks stay bad. they usually keep going down and then your performance will get worse. this is particularly dangerous for hedge fund managers because bad performance triggers more redemptions from your clients and if you keep selling winners to give the money back it creates a vicious cycle down individuals do the same thing. you only have to a finite amount of capital to invest the loss -- you know, take a loss, far too many people prefer to hang on to their worst performers thus my rule never subsidize losers with winners. my advice to anyone who is stuck

in the position, sell the losers and weigh the debt if you want them back, go buy them back the next day i have to tell you, i doubt that you'll even be tempted to buy back that stock. by the same token you can't keep hanging on the low quality stock just because you're hoping for a takeover that's a real good idea. i get it nothing is more exciting than a takeover nothing is more as lucrative you can put on a lifetime worth of gains so people go to great lengths to capture the moves that includes buying bad companies. the funny thing about bad companies they get bids. what gets acquired are great companies with great stocks not crummy stocks that seem cheap but are expensive. people buy this junk merchandise because they think a takeover will save them brings me to the next rule. never speculate on takeovers on bad companies with bad fundamentals you'll go down -- you'll go down

much more than you ever thought. even if a bad company gets a takeover it might coming at a much lower price than what you initially pay for the stock. that's the thing about bad companies. the stocks tend to go lower deservedly you can buy a well-run company in good shape and can still get a takeover bid than for buying a company that's doing poorly and thus unlikely to get a bid not many bad companies get acquired because not many managers can turn the company into good ones don't wait for it to be taken over you can be waiting for a long time you could have bought the stock of a high quality company that's likely to give you a much better performance. in a well run company you can get away with speculating on the takeover because you have other ways to win. and when the stock of a good company goes down you can confidently buy more on the weakness that's not something you can do on a company going from bad to worse while you're waiting for lightning to strike.

never sell your winners to subsidize your losers. if you need to raise money, for whatever reason, just take the darn loss and sell something that's underperforming absolutely do not speculate on takeovers in companies that are deteriorating fundamentals if a possible takeover is a reason to buy the stock that's not something you should own stick with cramer.

this is the most interactive show on television i like to brag about having the smartest audience there is that's you, cramerica. let's get to some of you have tweets first up the tweet from @bull flags watching iron man with son. forgot action cramer lives in the #marvel universe that is awesome. that was just fun. i broke that cup, it was one take it was crazy i'm forever indebted to the fabulous people including jon favreau that do the movies here is a tweet from big dude who says i'm a new investor, less than three months in. i have been a great saver but how do i develop discipline as an investor? here's what you want to do as an investor why don't you just buy small okay this is what we do for the club and if the stock comes in you have more room i want you to do it so you don't -- the discipline is going

to make it so that you're not going to be able to necessarily make as much money as you'd like, but we're trying to cut off our losses that's why we start small. now a tweet from @darry 747639 line your pin number or something? do you ever sleep? i see you on tv early in the morning and very late at night and the answer is i rarely do sleep and i have pulled a huge number of all nighters within the last three years i wish that weren't the case but it's true. now a tweet from -- very much looking forward to some perspective tonight. is there such a thing as market inertia? with the amount of money moving in the market is this like steering a titanic versus a jet ski? no, it's not the money has been going out so the fact that the market has been going up is a testament to the fact there's a core group of people who are not leaving they are being just like warren

buffett. they're putting a huge amount of money into the index funds ands that's okay. that's another no inertia. that's believing in america and in progress. i have no problem with it. now a tweak twooet from @mike monroe, thank you for being the voice of reason and keeping our sanity amongst all this market craziness. don't know what we'd do with you. well, my goal is to make it so people don't freak out there were times that i would say, listen, you have to go. those have happened. when that's systemic risk meaning risk where you can't assess whether the system is going to hold. but most of the risk is market risk that are not in sync with how the strength of the country and the companies. i will warn you if i think that things are coming unglued but otherwise my job is to try to put it in perspective. thank you so much. that's a nice tweet. they're all nice

omg, jim cramer is part of jeopardy question. i would have got that answer right. my youngest daughter just loved that too she said, oh, dad, dad's made it and now she knows i have a show. thanks, cramerica. we really do have fun. stick with cramer. on. radar that senses things the human eye can't. busted. and the ability to make a thousand decisions before you even make one. was all this, really necessary? what do you think? ♪

his family. his steinway, which met a burst pipe. so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory, and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival. pure. love your insurance. weveryone, looknk isn'tat your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market! yes. when we do we launch?

unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market. i'd like to say there's a bull market somewhere and i promise to find it just for you at "mad money. i'll see you next time. hey, i'm cramer, i'm trying to make you some money welcome to "mad money" 101 the u.s. military academy at west point "mad money" is not a show about picking stocks for you it's a show about empowering you to think for yourself. you are the reason why we do this we want to level the playing field for you.

>> 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's steve gadlin and i live in evanston, illinois. (bird chirps) i live a really normal life. i'm a dad. i'm a husband. i love my family. i work a 9-to-5 job building web sites. a lot of that's just sitting at a computer staring at code all day. so i think it's important to fill your daily life