tim? >> never leave your wing man, alibaba. i was waiting for picture. >> karen >> fedex. >> steve >> ge, staying long. >> altria, ahead of earnings. thanks for watching, "mad money" with jim cramer starts right now. here at 5:00. "mad money" with jim cramer starts now my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramer america. i'm just trying to make you some money. my job is not just to entertain, but educate, teach you call me at 1-800-743-cnbc or tweet me did you know i used to be a decent bowler? enough that you'd want me on your team. while my role wasnl wasn't smokg

hot, my pin action always surprised. getting me more than my fair share of strikes i mention this because i thought we'd see strikes galore today as nvidia -- but even though the dow sank 209 points nasdaq nose dived 1.1% we held up a lot better than i expected think about it, you have a company that's well-known for its jouts routrageously fast gr chips and remarkable management, and what happened? it took a ax to its estimates. you have caterpillar blaming weakness in china for its biggest miss in ten years? shouldn't we have been obliterated? nope instead, the pin action surprisingly muted

the kind of roll where you would hit the one pin, glance off the two, and then it goes right into the gutter, something that almost never happens yet that's what we saw in the market between invideo ya and caterpillar you had to expect all the -- semiconductor stocks right? these seemed like two easy, obvious strikes, people, so why didn't the weakness spread like it would at the lanes? simple because this is some wacky crazy sort of bull market. it's one that doesn't want to go down this is a market that has a lot of hope. that hope has indeed paid off since the bottom in late december, and now big money managers are willing to press their bets even in the face of ugly numbers like we got from nvidia and caterpillar rather than focusing on the current weakness, these fund managers are thinking about how things might look down the road. usually they don't look through that valley. it's incredible. the hope is so thick we'll get a trade deal with china.

i wonder if the criminal charges federal prosecutors filed this evening against huawei, which is china's largest smartphone maker will even dampen the enthusiasm. serious stuff that i believe -- let's put these bowling balls in context. caterpillar had a huge year in 2018, sales up 20%, records earnings per share they earned $2.55, sounds like a lot, but wall street wanted $2.99. that's a big differential, and their full year earnings guidance is substantially lower than expected. some of that bottom line disappointment came from higher raw costs but the most jarring part of cat's conference call came when the company discussed china. here's what they said, and i quote. we are forecasting the overall china market to be roughly flat in 2019 following two years of

significant growth china represents about 10 to 15% of our total construction in industry sales and 5% of total caterpillar sales and revenue end quote. book, that's what did it the strength cat saw in the rest of the world, especially in the united states couldn't offset that chinese weakness. why wasn't that enough to crush the entire machinery sector? for that matter, why was caterpillar only down 9% it should have been hit a lot harder there are two things going on here, one, the manufacturing stocks they already reflect plenty of pain from china where they stand right now >> the house of pain. >> caterpillar sells for just ten times earnings here. the company is forecasting still a modest gain for the year they're not forecasting a decline, that's the point. china may be bad now, but what does happen if we g et a trade deal i'll tell you what will happen i bet cat will surge from $124 to $150 in a matter of days, so why sell it at 124

the safety stocks didn't rally as much as i thought they would on this economic weakness. even as we know they can make the numbers regardless of what happens with the global economy. tremendous disparity between safety, paying too much and these industrials. maybe we're paying too little. how about the pin action from nvidia which used to be a huge cramer fave the company's still a fave, but the stock no nvidia was a complete blow up. weakness in china, in gaming and in the data center, and there was some anything pin action negative pin action to the cloud players, but the gaming stocks, i'll tell you what happened there. they've already been obliterated. they've been pummelled the data center provides, last week intel told us the business has some indigestion so maybe some of the worst stuff was baked in

even though n vidvidia was down% it wasn't down as much as you might have expected. it didn't get anywhere near its lows why wasn't it worse? first off, the stock had already been practically cut in half since september. second the stocks are widely viewed as being tremendously undervalued by most money managers we just heard from the semiconductor equipment maker and they indicated the industry is approaching a bottom. but then managed to stay standing no strike, no spare, just the lead pin now i have to admit, as much as i like the market at times since the bottom, i mean, we have so many potential nasty hurd lles this week. amd reports tomorrow apple reports tomorrow and they preannounced a terrible quarter. hard to believe things have gotten better, right no facebook comes on wednesday, a lot of chatter on a slowdown

there. we also hear from mike sochcrom. the data center isn't that problematic for these two cloud titans i want to wait and see before giving people the all clear because there's way too much uncertainty. that's not how the big hedge funds view this market they want to buy the 5g chip maker. the stock that actually rallied this morning they want broad come, which spent most of the session in the black. the company buys back a ton of stock every day. land research, western digital finished the day higher. i mean, come on. nvidia had that little read through. now there were plenty of stocks that weren't ding, the cloud force, they got hit but they were giving back what they hit at the end of the year however, i buy some -- today's big take away is this market is extroerdly resilient

many investors want to believe they believe in the possibility of a trade deal with china they believe the fed will stay on hold. it's just so hard to keep this one down you want one pmore close to home example, last night howard schultz pretty much announced his plan to run for president. what did we hear in the wake of shumts's announcement. on top of that you know schultz will have to sell a huge slug of stock to pay for any campaign. we heard a $300 million amount bandied about on "60 mtsinutes." there's always the possibility that starbucks will become more of a political football in china. how big was stock hit? $0.19. after what we heard from nvidia and caterpillar it should and could have been much worse now the market's resilience will be tested multiple times this week and some may turn out to be

worse than today for a moment this did feel like a glass half full kind of day, one that may continue in a very surprising fashion lets go to michael in new york michael. >> reporter: hey, jim, healthy and happy 2019 >> why not >> caller: hope that's okay to say. i'm calling about cleveland l cleveland-clif cleveland-cliffs correct me if i'm wrong, but i believe cliffs was the only stock in the sector that killed the dow and beat the s&p up about 6% last year >> right. >> caller: the basic term segment? >> it's basic materials. valet had that terrible accident and the stock was down 18% today. maybe someone is extrapolating and says buy cliffs. i don't want to touch that or freeport they're too levered to growth. they need china really to come back, and that really does worry me cliffs because they need iron

ore to tighten in priegce. >> paul in florida. >> caller: big booyah from florida. first time caller, but i've actually been listening to your show since 2006. i just happened to catch it the first week you were on >> that's fabulous, thank you. >> caller: i want to thank you for trying to make us all money. >> thank you >> caller: my question is on pfc corporation. the company prior to its earnings announcement said it was going to spin off its mature and declining jeans business, which includes lee jeans and wrangler. >> right >> caller: many of their brands continue to do well, which is reflected in their strong earnings report. >> okay. >> caller: last week on monday the stock jumped up $8 on that great news with the stock having a 52-week range of 62 to a high of 92, would you expect this spinoff to possibly cause another jump in

the stock price? >> entirely possible and i've got to tell you that conference call was one of the best of the year maybe it drops a little bit initially, but whu a fantastic quarter they had we're testing resilience this week so far i know it's only monday, but it's pretty extroeaordinare. wondering how strong the u.s. economy really is? i'll tell you why the rails could provide an answer. then, tensions between washington and beijing may be dominating the headlines, but that didn't stop chinese companies from flocking to the u.s. with a number of ipos hitting a ten-year high last year what the wave of new companies means for the swroeoverall mark and through all the ups and downs of the oil sector the past few months, he's one of the only guys who got it right, and he's joining me tonight don't make a move and stay with cramer don't miss a second of "mad

money," follow @jimcramer on twitter. 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.co when did sleep become something that requires effort, like an obstacle we have to overcome every single night? with tempur-pedic, it doesn't. and now is the best time to experience the most advanced pressure-relieving material we've ever created. so you get the deepest sleep you've had in your entire life. this presidents day, save up to $500 on select adjustable mattress sets. there's nothing like tempur-pedic sleep. find your exclusive retailer at tempurpedic.com.

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. all aboard. >> the rest of the world may be in rough shape as we know from caterpillar's dismal numbers, what about the u.s. economy? to answer that question we need to look to the railroads the rails are a terrific proxy for commerce in america, and after listening to the conference calls last week from union pacific, my feeling is we still have a strong economy. however, our economy also seems to be decelerating just enough to keep the federal reserve from hitting us with another rate hike, something i wish fed chief jay powell would acknowledge on wednesday. judging by the railroad's earnings, their dividends and their buybacks, there is no doubt we have robust economy they're experiencing a moment when it comes to rewarding their sloerl shareholders while their stock only gave a little upside last year, this is clearly a great time to be in

the railroad business. neither company saw a falloff in their business, but they both saw a deceleration in the growth of key economic cargoes, and that's what i care about at least in the case of union pacific, a lot of business was pulled forward as companies raced to beat the increase in tariffs with china this is a west coast tornado that does a ton of asia-related business including a tie with sm line out of long beach, california some of the strength that union pacific was likely an artificial spike related to tariffs, and it would be a mistake to extrapolate from all these numbers, but i fear that jay powell will namake the mistake, which is why i'm talking about it both railroads have plenty of bright spots, especially intermodal, we know the trucking market is still on fire right now, so it makes sense that intermodal would be in fabulous shape. however, here's another however, norfolk southern noted that the trucking shortage was beginning to abate as the year ended

i regard that as a warning sign. both railroads saw extremist cal carloads, but vehicles, cars, trucks no growth whatsoever. with neither company expecting much of an increase if anything, maybe a decline is more likely agriculture is almost always a bright spot for the rails but not this year. the tariffs crushed union pacific's ag line which saw a temporary decline in soybeans because the chinese aren't buying i was heartened to see a 10% increase this construction cargoes from union pacific, primarily driven by rock which is vital for new roads and a 19% rise in energy construction and manufacturing. that's part of the energy, refining and shipping renaissance occurring in the southeast. it's a huge source of job growth, at the same time if you're worried about inflation, you have to like that the labor costs aren't going up much at all for the rails. in fact, these companies are ingenious, ingenious in finding ways to lay off workers thanks to precision scheduling.

we saw faster freight turn arou around this process was pioneered by the late hunter hairson years ago and he brought it to csx before he passed away. as part of their embrace of precision railroading, and boy, i think it's going to change them a lot, the stock market expected great things. hey, you know, this stock went up more than ten points on the news put it all together, and the rails paint a picture that's consistent with what we're seeing from the rest of the economy. they have a deceleration month to month in the fourth quarter, fear of higher tariffs on chinese goods causing many orders to be full forward. at the same time union pacific and southern developed fantastic profits. i sure home jerome powell is looking at these numbers because they suggest that we really don't need a rate hike here. to the extent the rails had a strong fourth quarter, much of it came from the desire to beat

the scheduled increase in tariffs, not from an acceleration in our economy. when powell holds his press conference on wednesday, i sure hope he continues to hold off on any talk about the need to tighten. you don't tighten when the economy is slowing in its rate of growth. it just makes no sense, and it never has. stick with cramer. this is not a bed.

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what's going on here they want access to american capital. the question is are these chinese ipos actually worth investing in you generally do want to avoid them >> sell sell sell. >> or don't buy, don't buy >> every now and then there's an exception, a special situation worth investing. for the most part chinese ipos have not been good opportunities for american investors even if the people's republic was in great economic shape, instead of going through the worst slowdown since 1990, even if the trade talks were making fantastic progress and our tariffs on half of chinese exports weren't about the spike from 10% to 25%, i would still be hesitant to recommend these newly minted ipos. you should only invest in the stocks of the companies you understand it's very hard for foreigners to get a good read on chinese companies, which is why i often throw my hands up and say i can't give you what you want

how the heck are you supposed to get your arms around billy billy, which sound like when the eagles called that special play in last year's super bowl, but is actually a video platform for teenagers. china has a very different regulatory environment than the united states, and they have a very different economy than anywhere in the west we're talking about a communist regime here, people. if you really want to be specific and you took some of the courses that i did, but you realize china's really more of degenerated worker state either way, unless -- you can't expect to understand the chinese netflix, the same way you understand the actual netflix. that makes it difficult to understand which of these chinese ipos might be winners even in the best of times, and this is more like the worst of times for china. the performance of the chinese deals speaks for itself.

of the 31 chinese stocks that came public in the u.s. last year, only 13 are up from their ipo prices i call that bad odds make matters worse, some of the losers have been truly terrible. of the 31 chinese ipo names from the class of 2018, six have seen their stocks plunge by more than 30% since they came public three of them have lost more than half of their value plus, most of the winners took a lot less -- look a lotless attractive you can't get a piece on the actual deal. the second best performer, hue ya is up 74% from its may ipo price, but only up 30.4% from its close on the first day of trading. half the gain was from the first day's spike. its stock is only up 8.6% if you count from the close on the first day of trading then there's -- which priced at $7 and closed before plupgingin back to $9 on day two, and it's

been stuck in the single-digits ever since unless you got a piece of qutoutiao, you lost money. just because these stocks surge higher out of the gate, that doesn't necessarily mean the buyers have done their homework. like i mentioned before, there are some exceptions and the exceptions might cloud your judgment larger companies from china with higher profiles tend to perform better the four largest ipos all performed pretty well, and that includes 10 cent music, which we recommended hard last month. if you have to dabble in chinese ipos stick with the larger, high quality companies that we know more about, that even can be household names like alibaba i still like tencent music people describe this as the chinese spotify. i actually think it has a better business model tencent music makes money from subscriptions and ad sales but most of their earnings come from this kind of thing that's only

really in china. they're called micro payments. it's little gift cards this may be the best way to play it tencent music has given us a 12% gain since i recommended it, and i think it's got more room to run. it's a major company that's a subsidia subsidiary of one of the largest businesses in china. plus, when people call tencent music the spotify, it's not just an analogy spotify believes in the story so much they themselves own 9% of the company. most chinese ipos don't have that kind of sponsorship i want to review, i'm doing this because so many of you have asked me these questions i don't mean to brush you off. when you take a look at the 31 chinese companies that took their companies public in the u.s. last year, you see pretty much the same thing we've been noting for years, most of these chinese ipos are of dubious quality. with stocks that simply aren't suitable for the average

individual investor, unless you're a professional with an office in shanghai, most are not worth the risk 65% of these stocks are down from where they came public. again, lousy odds. and remember, this is assuming you can even get in on the ipo itself something that's hard to do unless you're an institutional money manager. if you bought these chinese stocks on the open market the returns are a lot worse. the few big winners tend to be snapped up early whenever you hear a story about a fresh new ipo from china who saw its stock soar right out of the gate, i'm begging you, please, would you take a play from the larry david play book and curb your enthusiasm only a little more than a third of these stocks are up from their close on first day nearly two-thirds are down that's terrible. look, i've always been skeptical about investing in chinese companies that take themselves public here in the united states for every high quality stock like tencent music entertainm t entertainment, there are a half dozen much lower quality names

that turn out to be totally toxic. this is doubly true now that the chine chinese economy is having its worse worst slowdown in decades. frankly if the white house wants to ratchet up the pressure on the prc they should start thinking about making it more difficult for chinese companies to -- it would give us more leverage in the trade war, and i think it would be a net positive for american investors, but i guess trump has bigger walls to fry. ryan in north carolina, ryan. >> caller: yes, sir, hey, jum. >> ill am doing well how about you? >> caller: not too bad today i'm calling in to ask you about a company called uxan. they're a company that operates an online use card transaction service platform it offers an online auction, an online retail and online financial services out of china, and the question i'm asking is

over the last couple of months they've been kand ind of all ov the place, and right when the market kind of crashed and took this last little dip, right before it took the dip they were up 200%. >> right, here's the problem i don't even actually like that business i don't like it here i don't know why i would like it there. when i'm going to like a business in china, it's got to be a big market cap. this is a billion. it's got to be a business i like, sorry to cut you off but it's not my fave let's go to jason in california. >> >> caller: booyah, jim. i'm in costa mesa, california. my question is about the stock camping world. camping world is below their ipo price, and it's a few bucks above the december 52-week low with all the tariffs on the aluminum and steel, the interest rate volatility and the trade war deadline in march, should i

increase my position now or wait until march? >> what we got to do, friend of the show, obviously a great show on our network, the profit, everybody loves that i talk to i think we have him back the stock is down when he was on, and i think it's a horse's mouth situation. i really don't think i can -- why don't you just get it from the guy and i'd love to see him. he's delightful, this stock has been disappointing. last year was the year of chinese ipos, a ridiculous amount, and quite frankly, most of them are simply not worth the risk i am not being xenophobic i am being empirical. one of the top minds in the oil patch, a guy who has made us a fortune, if we follow him where is the commodity heading i'm going to find out. then there are still profits to be made in the pot stocks if the new year can bring green for the group. and tonight's edition of the

lightning round, so stay with cramer

when the stock market melted

down the fourth quarter, the price plummeted from $76 down to $32. since then crude has rebounded 52 bucks a barrel, but lots of investors are nervous, that this week there's very strong evidence that we're seeing some sort of slowdown of the global economy. the s&p 500 seems to get hit on days like today where the price of oil goes down whenever i want to get a clear read on oil and gas, i always check in with rusty brizo consultant for rbn energy because he has such a track record i read him every morning, rusty, welcome back to "mad money." god to see you sir. >> thanks. you've got a website so people can read some of the things you do. >> it's free. >> right, it's free, and you'd be nuts not to do it because you've had a tremendous call for years and years now, so let's start with the news we just had happen we saw the treasury secretary talk about taking the -- not

remitting the proceeds for venezuela. does it really matter anymore? venezuela used to be the biggest and now it is very little. >> it's small. we're only getting 500, 600,000 barrels a day from venezuela it's not a big day it is a specific kind of very heavy, high sulfur crude oil, and if it were to disappear it wouldn't be a good thing for the refineries that run it they would have a problem making up for that kind of crude, but in the big scheme of life, let's face it, the permian alone grew by a million barrels a day last year, so that is more than twice what we're getting from venezuela now. in the big scheme of life, it's not a huge deal. >> okay. now you have followed the u.s. you predicted quite well, i've often gone back to how important is saudi arabia when we keep adding and adding, and you're not saying that we're not going to necessarily stop adding. >> we are going to keep adding, even though we're probably going

to add less than last year saudi arabia basically has one 201 weapon, and that is to reduce production, so they have the ability to basically forego market share to u.s. producers that doesn't sound like a really powerful weapon, does it >> no, it doesn't. okay and tell me why it has been all over the place it's very hard to figure we had huge frigid temperatures last week. we have frigid temperatures this week, it's plummeted. >> i guess gas prices were off like $0.25, $0.26 today. so supply, demand are basically at balance in the united states, so that means that any little thing that hiccups can push natural gas prices big time one way or the other, so we entered this heating season with very low natural gas inventories. why were inventories low partially because of weather that's one thing that always happens, but also we're exporting a lot more natural gas

right now, five bcf a day in the form of liquefied natural gas, lfg and five bcf a day to mexico ten bcf a day is going out of the country, plus the fact that we had some weather. then something else was going on, too, we actually saw higher use of natural gas by the power generation segment per degree day. in other words, for a given temperature, we're using more natural gas in 2018 than we did in 2017 and years before >> so this is renewables are good but when it's not sunny, they got to do something. >> that's pretty much it, so we are using more renewables. renewables are really gaining market share that's a wonderful thing whenever renewables gain market share they're going to push something else out right? so what's it going to be renewables are an intermittent source, so that means sometimes the sun doesn't shine. sometimes the wind doesn't blow, and when that happens, you don't go flip on a big coal fire

generation plant it takes three days for the thing to heat up three days for the thing to cool down no, you turn around and flip on a gas fired peaker, gas demand goes up. that's put supply demand at this knife edge point, and so every time it gets cold then you see gas prices go to the moon, and what happened over the last couple of days is the two-week forecasts came out saying that we're going to have mild weather not today, not tomorrow, but coming up, and because of the market's always anticipating, that meant the prices just got hammered today. >> when oil spiked up, you told me the futures curve indicated this may not last. what is the future curve saying right now? >> exactly what it said before. >> really, the whole way >> yeah. when crude oil prices -- you were talking about crude oil prices? >> yes, crude oil. >> so when crude oil prices got up to 72 bucks in october, the crude oil forward price in 2023,

2024 was at 58, 57 or so, so the future's price never jumped up into the 70s then as prices for crude oil fell from 72 down to wherever they are today, 52 or so down by 20 bucks, all that happened to the price in the future was it's down about 4 or $5, down to 52, 53 or so so in other words, the market has recognized that it was never going to be 70 it was never going to be 42. it's going to be bouncing back and forth between some number around 55. >> i did credit you. you said it was going lower, that was rusty's work. last thing, every morning i wake up or in the middle of the night, i see oil down and then i hear -- well, listen, oil's down because of weakness in china that is a news letterhead line does it make sense

>> sort of. >> really? >> natural gas production is going to be determined by crude oil prices, right? so if demand in china is down, if the economy and china's demand is down, that means the total demand for crude oil is going to be down if crude oil demand drops, then total demand drops, then natural gas price -- or crude oil prices are likely to decline, too it's not -- the linkage is not insane. >> it's not insane as a matter of fact, that's really the most important thing that's going on right now, and it's what happened back in 2014. in 2014 the economy got weaker, and when that happened, the market lost confidence in its ability to absorb incremental production of crude oil from the united states. that's exactly what happened in october. >> wow okay the presidency of rbn energy, thank you, rusty remember when it was at 70, he said go. i credited him, but i sure did do it on our show.

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it's time for the lightning round. and then the lightning round is over are you ready? we're going to start with nick in florida nick >> caller: hey, jim, what's up buddy? >> not much, how about you partner? >> caller: nothing much, man big old booyah from venice here. >> i'll take it. >> caller: curious i've been making some profit here in this neo genomics. >> cancer genetics is a very big great area i am not going to say that you can't speculate on that. i embrace it paul in massachusetts, paul. >> caller: hi, how you doing, jim? >> i'm doing well. how about you? >> caller: good, thanks. just want to know your opinion on vicor as far as a long-term play >> power systems, i regard it as a commodity. i've looked at the company over

and over again i'm going to say don't buy let's go jim in colorado >> caller: thank you for taking my call, mr. cramer. >> you're welcome. >> caller: a long-term ten-year plus position in a company that i think is a pinnacle of stability in this volatile market it's got a family of great products for home and industrial use. buybacks in the future, a growing dividend, sitting just below the high what do you think of the wd-40 company? >> i've always liked that, and i've always liked rpm. these are companys that when you stroll the aisles of home depot, what is there not to like. nick. >> caller: i was wondering what your thoughts are about the company -- >> a lot of people have turned a lot on all of these stocks that have to do with equities, picking equities this yields 3% it's a very well-run company i'm not going to tell you to go away from it i'm going to tell you to go toward it. let's go to chuck in california.

chuck. >> caller: hey, jim, how are you doing? >> i am well how about you, chuck >> caller: very well i have a large and varied portfolio, been doing it about 30 years i wanted to look at the overall data, so i bought -- >> i think that's fine you are paying a high -- for cl clorox, the high multiple you're paying for safety. i like clorox, it is an expensive stock and i prefer to get it at maybe a 3% yield instead of 2.6, but i finally saw the renew. i finally saw it in my rite aid chr which is very good sign. lets go to ahmed in michigan. >> caller: booyah, a long time watcher, first time caller, over decade watching. the question is cvs. i've had this stock for a while

now, not sure what it's doing. >> here's what i've been telling club members, i think cvs is one of the absolute cheapest stocks now that it's bought aetna in the country, and larry come on air and tell us about it and that, ladies and gentlemen is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade looked at chart patterns. 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. call for a strategy gut check with td ameritrade. ♪

on a hideous day for the broader market, but i admit it was worse at one point i search for the groups that manage to defy the gravitational pull today was the cannabis cohort, which blazed higher on no real news these pot stocks have been getting high pretty consistently from the beginning of the year the alternative harvest has pole vaulted up more than 30% for 2019 canopy growth has shot up reversing all of its losses from the margin fourth quarter selloff. this group was laid to waste last year and now is making a major comeback i hate to chase stocks that have run so i can't in good conscience recommend the marijuana stocks after this move today. i figure you get a better buying opportunity, but i want to give you the lay of the land. i still think legalized weed is one of the great growth stories of our era which is why we've had so many

of these companies on this show. hopefully to explain where they fall within the cannabis ecosystem. now, so for those of you who want to speculate on the bull market for bud, hopefully at lower levels than where we are right now, i've got five pr predictions for the future of the marijuana industry you might want to write these down because they're spot on prediction number one, and this one's kind of obvious, i know, the legalization wave that's sweeping north america will continue cannabis ended prohibition in october. here in the u.s. state after state has legalized or decriminalized or allowed for medical marijuana. nearly every time this gets put up for vote legalization wins. michigan just became -- get this, became the tenth state to end prohibition when they end instead november that doesn't go into effect until next year. the governor of new york came out in favor of legalizing recreational weed late last year, and given that his party

controls both house of the state legislature, this could happen sooner than you might expect these guys are all saying, hey, let's get the money and let's get the tax. it's going to help their budget. every state could legalize this and marijuana would still be against the law until we get action from the federal government however, william barr, president trump's new no, ma'minee for aty general has indicated he doesn't plan to go after marijuana users that are complying with state law. i think congress would be more willing to pass a law descheduling marijuana right now marijuana is classified like cocaine or heroin isn't that kind of crazy as our politicians realize this is actually a very popular very mainstream position. speaking of congress, brings me to my second prediction, the rise of cannabid oil cbd. about a month ago president trump signed the 2018 farm bill

into law why does that matter why should we care because senate majority leader mitch mcconnell stuck a little provision into that farm bill, and that provision legalizes the cultivation of industrial hemp, which is actually cannabis, which has very low levels of thc. hemp is no longer a controlled substance. you may have seen these cbd products already they're in a lot of stores i went to one of these rest stops on the highway, and they had all these different teas that were cbd. they tasted terrible now, we know marijuana's medicinal properties and in many cases they aren't associated with thc, the part of the plant that gets you high that's where cbd comes in, you get the medical benefits without getting stoned you can put it in food, beverages, you can put it in skin care. c canopy growth announced it would

be entering the united states to play the cbd market. expect to hear a lot more about cbd as 2019 goes on. i believe this could be a massive opportunity. prediction number three, last year felt like the wild west for the pot stocks you've got all sorts of players. in 2019, i'm betting we see the emergence of a handful of major operators. does that make sense this has happened already with canopy growth, cronos, tilray and aurora cannabis separating themselves from the rest of the pack those are the big four there's an even smaller subset of pot plays that have already built up a great deal of capital, canopy and cronos really stand out i think that gives them a huge advantage over the competition how will these leaders establish themselves in part they'll do it by scooping up smaller players. canopy already started going on a deal binge in november, and i think that's going to continue through this year, too fourth i predict 2019 will be all about branding for the pot

industry whereas mel brooks put it in space balls, merchandising, merchandising, merchandising by the end of the year i think the major marijuana brands will be household names i expect a massive marketing push as they go from distribution infrastructure to fighting each other for market share. i find this really fascinating. how often do you see an industry start from scratch with no brand loyalty whatsoever cannabis is about as far as it gets from the traditional consumer package good space. where you might wear old spice deodorant because your grand dad wore it. that kind of thing doesn't exist for marijuana, hardly. so if lawmakers allow it, expect a lot of slick marketing campaigns, celebrity endorsements and anything else that these companies can think of to grab your attention and build a name for themselves. finally, as the marijuana stocks get higher and higher, i think wall street will start giving more credit to a pair of marijuana adjacent bioteches called gw pharmaceutical, and

corbis which we have also featured these are not pot companies. they are drug companies focused on developing artificial ka nab opioids that mimic what cannabis does to your body. it's trieying to come up with treatments for inflammatory and fibrotic diseases like cystic fibrosis why do i see these stocks benefitting? as cannabis companies try to push clinical for medicinal marijuana, that's something that cano canopy's doing, they're going to run into a problem of dosing at the end of the day, we're talking about a plant here there's always going to be a lot of variability between one batch and another. drug companies don't have that problem. they can mimic the qualities of cannabis while giving you a consistent dose. as we get more and more data showing the efficacy of medicinal marijuana, i think more investors will embrace

actual medicines that do the same thing as marijuana, but they do it more reliably so you can get a prescription the cannabis cohort is red hot right now, too hot for me frankly to recommend, at least at these levels, and i have been buying canopy the whole way. the next time the group pulls back, immateri want you to thint where this industry is headed. this is a huge growth business, so i want you to put canopy and cronos on your shopping list, the latter had a big move today, and wait patiently for the next selloff because i need you to have a better entry point. stick with cramer. renewable energy goal. if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪ verizon provided us a solution that lets us collect near real time data on our power grid. ♪ if we can create our own energy, we can take care of this beautiful place that i grew up in. ♪

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when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. i'm bullish, but not as bullish as this market nvidia and caterpillar with no pin action, that was extraordinary, but here comes apple and amd, which was down big off of nvidia. i like to say there's always a bull market somewhere. i promise just for you right here on "mad money." i'm jim cramer, i will see you tomorrow

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