the door to negative preannouncements. >> lennar. i think it's got a 20% more room to the upside. >> all right that does it for us. i'll see you back here tomorrow at 5:00 for more "fast money." "mad money" with jim cramer starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job is not just to entertain but to educate, teach, put it in context. call me at 1-800-743-cnbc or tweet me @jimcramer. all right. how do we make sense of this seesaw of a market. >> -- buy, buy, buy. >> sell, sell, sell! >> that got slammed earlier

today then rebounded in the afternoon. >> house of pleasure. >> closing down 80 points. the s&p losing .42%. nasdaq falling .85%. i think what we're seeing here is nothing more than a wholesale repricing of stocks. as investors try to bake in all sorts of contradictory possibilities. the repricing ebbs and flows and you see intra-day rallies as people realize the businesses are actually pretty good and the stock market remains the best place to put your money. that's what happens when stocks fall if only because every other asset class is so unattractive does this occur. it's not because this one is that beautiful still, i think we have to have more pain like we experienced this morning, which is why you need to understand what striving when the pain happens, you're not paralyzed, because we're going to see it again and again. first, there is a whole camp of people who believes that our economy is headed into a recession. probably sooner rather than later. how do i know this because at the worst moments of

today's session, when the averages were getting hammered and it looked like the whole thing was going to collapse, buyers started standing up in the recession stocks think kimberly-clark, procter & gamble but these are not the kinds of leaders you want to see. they're just the exactly the kind of stocks that do well in a slowdown later the strength explode to adobe, mastercard, visa, nike among a most host of other stocs what do they have common they're not really dependent on the health of the global economy to make their numbers. domestic, yes. global, no they can make the numbers. second, there is another camp of investors who are trying to gain out the election oh, boy. specifically, this group wants to price in the possibility of elizabeth warren presidency. now warren has started to edge out joe biden, and she's no fan of certain industries, especially the managed care

ones i could have done another. there have so -- stick with me on this, because let me just deal -- i'll deal with the managed care in a second, but it's really extraordinary how bad they are today something happened that i haven't seen in a long time there was an analyst, a good analyst who said he had for the first time in 20 years, he had a buying opportunity, the best he'd seen, cigna okay i read the piece i said how much is cigna going to be up it is going to be so good. but then i realized if warren is the front-runner you don't want any exposure to the health insurance base so what happened this stock got hammered rather than rallying. the best pick in 20 years. best pick in 20 years. look what it does. what can i say i guess he picked the wrong day to recommend cigna it closed down $5.43 if warren can really pass something like medicare for all, a very big if, then the managed care companies, this is going to cease to exist i find that to be unbelievable and not true, but that's what

people are thinking. so then why the heck did i tell people the action alert plus.com club that they ought to buy united health, my favorite in the managed care plays there is the fact i've never seen it cheaper. roughly a 2% yield and the fact that u and h is down more than 70 points from the highs. mostly, though, we don't even know if senator warren is going to get the nomination yet, let alone win the presidency even if she does win, that doesn't mean she'll have the votes to pass single payer i think it's too soon to count out unh. it's too soon to write off cigna. it doesn't change the fact that wall street is terrified of a warren presidency, and you can see that fear everywhere ever since warren started pulling away from the pack, she is now the punitive leader a very good article about her being in front today while we're seeing aggressive selling in the market's biggest winners. here, twilio

we have had jeff lawson on last night, okta. why? because if you own these stocks, you know what you have you have huge gains. and you know what warrant wants to -- warren wants to do tax those gains. this is just one possible outcome. the people who own these stocks, they want to ring the register now just in case elizabeth warren raises the capital gains rate to the same as the ordinary income rate. between the recession fears and the possibility of warren in the white house, i think we can get more swoons like we had this very morning but hopefully the sellers will exhaust themselves like they did this afternoon still, as long as senator warren is leading the polls, you're going to keep seeing winners being sold, and they're going to be really sloppy. >> sell, sell, sell, sell, sell, sell, sell, sell, sell >> and you're going to ask me, jim, what's wrong with this thing or that thing. it would bent micron it will be something that's doing really well like twilio, like twilio. and the answer is people taking

profits. the third thing that gives the bears cover, impeachment now i'm not a political commentator. i never will be. but the hearings on ukraine today, i thought they were pretty brutal frankly. suddenly serious people in the media are talking about trump like he's toast. i think that's crazy the votes just aren't there to convict him in the senate, no matter what he may have done still, that won't stop the bears from using the story as a cudgel to beat the stock market lower it's going to be the narrative get used to it personally, i'm most interested in the political ramifications what marries to me is what impeachment means to the legislative agenda remember, we just spoke to speaker nancy pelosi last week, and she was sounding very encouraging about the possibility of passing an updated trade agreement with mexico, canada, something many businesses i know are counting on to make their earnings estimates for 2020 but i don't know a week later, maybe it's something that happened. i don't see it happening how is pelosi going to negotiate

with a guy she is trying to remove from office maybe it's possible. doesn't it seem unlikely to you? oh, and of course if the chinese smell blood, they're a lot less likely to make a trade deal with trump. they'll wait him out obviously, they don't know who senator warren is, believe me. if the chinese leadership is reading the same papers we're reading, they'll probably be emboldened to wait this president out with the hope they'll get someone more accommodating in 2020. the final piece of the repricing puzzle of why the price price-to-earnings multiple is going down, the ipo market is starting to fall apart listen, banker, listen, syndicate desks, your market is falling apart. i've been predicting this was going to happen all year i'm surprised it took until september. we've been overwhelmed by the supply of new deals. it's crashing the market, which is why the latest ipos have been so ugly. first the smile direct priced at 23 bucks and closed down 28%

less than $13. then there is that clone show of wework deal which got postponed that cost the ceo its job. and today peloton, peloton, yes, the sports bra hanger for my wife priced at $29 and started trading at 27. why not? it's exactly the kind of stock that this market is no longer interested in. i'll give you more on that later. it finished at $25.76. and yes, she does put some of those nice lululemon pants on it too. it's not just the nike sports bras i don't want to get to the wrong image. thank you. when you look back at the biggest deals of this ipo cycle like lyft and uber, they are down so substantially from where they came public that they burn your eyes out. put it all together, and i can understand why people were eager to sell this morning between a possible recession and

impeachment and of course ascension of democratic candidate perceived as hostile to big business because biden is going down in the polls, warren going up, you've got a lot to worry about. i think the fears are overblown, but on days like today, at least you know these are what's driving things lower this is a repricing of the stock market because of these four things remember, when president clinton got impeached, that only turned out to be a fabulous buying opportunity. i think the fed is too savvy to let a recession happen even if elizabeth warren whens the nomination in the general election, she won't have the votes to go full on fdr on us. until we turn off these deals, just say no to these deals there is not enough money coming in to soak up the new supply the bottom line, as long as investors have trouble understanding that president trump won't be removed from office by republican senate, elizabeth warren isn't some marxist insurgent out to destroy capitalism, we can have more difficult days like this one, maybe lots of them get used to it

touissant in north carolina, touissant. >> caller: yes >> yeah. >> caller: how formidable is roku as a streaming competitor against apple, google and amazon and is roku a good investment at these levels >> roku has gone up too far too fast, and it's now in a downtrend. while i like the company, people got carried away as a way to be able to play cord cutting. i want to let it cool off, and i want to see it bottom first. i know touissant that is not necessarily what you want to hear i would love to call the bottom on roku, but that to me is a license to kill my reputation. let's go to joe in new york. joe? >> caller: hey, jim! long time listener, first time caller i own united technologies, utx in my 401(k) how should i approach the upcoming company split

>> with pleasure, because that company is run by greg hayes he is no nonsense. the company is putting together. the company is splitting they're both going to be great we would own them -- we have honeywell for the charitable trust. you can follow along the only candle can hold a canned toll honeywell is utx stay with it nice going boy, i wish i could recommend that roku. i like it. but when these stocks break, well, it's tough to call the bottom look at micron we don't know yet. after the conference call. listen, it's not going easy to figure out how to price in' a recession, i mean impeachment, this is an erratic market. it's an emotional market, and you've got to steel yourself and get used to it and strap yourself to the mast on "mad money" tonight, herman miller should be sitting pretty after the rise in earnings, i'll give you my take and how much of peloton's moves

today were just spin i'll tell you if it could be a smooth ride going forward for investors. plus, take to it the house i'll check the foundation of the home builders with one of the leading players in the space may i suggest that you stick with cramer. >> don't miss a second of "mad money. follow @jimcramer on twitter have a question? #madtweets, or give us a call at 1-800-743-cnbc miss something head to madmoney.cnbc.com. tell him we're flexible.

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you can argue about whether or not that softness will eventually spread to the consumer, but it is not in dispute. that's what makes it so bizarre that the two big office furniture supplier, herman miller and steel case have seen their stocks catch fire in the last couple of weeks after both companies reported just fantastic earnings i know, maybe not hit your mental radar screen, but listen to this. don't you want this? look at this herman miller gained 52% for the year steel case is up 24% and i think both stocks could have a lot more room to run. but that still begs the big question if we've got a slowdown in the economy, how the heck are these two office furniture companies performing so well if business is slowing, how does it make sense? shouldn't they be getting hurt if executives are pulling in their horns, spending less money? it turns out it's a lot more complicated than that. i love this kind of story. i want you in on it. you know herman miller is the maker of really high end office

company like the aeron chairs with the lumbar support. i got one. i love it. as steelcase is the leading supplier of furniture and arc cher with the reputation for durability and reliability never have to throw out a steelcase. for most of the year, herman miller has been a phenomenal reporter just a phenomenal performer, putting up series of excellent quarters steelcase gave suboptimal reporting in march and both times the stock did get hammered but last week herman miller and steel of case each reported spectacular results and their stocks rocketed higher herman miller delivered a 6 cent earnings beat off of a 78% basis with better than expected sales up 7.4% year-over-year the guidance for the next quarter was encouraging. as for steelcase, they gave you their first clean beat in a while. a 7 cent earnings, up 14% versus last year. do you know that they had 9%

organic sales growth if you're wondering why steel case did poorly last time around, these numbers made it clear that those sales simply got pushed back. the ceo james keynes called it, and this is amazing, quote, one of the strongest quarters in the past 20 years, end quote and just like herman miller, the good night dance was positive. no wonder the exploded nearly 10% on the news. >> hallelujah! >> so how in the world are they putting up such amazing numbers with all the gloom we have to put up with all the time how is possible? when you go through the conference calls, first and foremost, even if you're worried about a slowdown, that's not really what these companies are levered to as they pointed out, fancy office furniture is tied much more, much more tightly to the labor market when employment is so strong that there is a real labor shortage, businesses are forced to shell out lots of money to make their work spaces more attractive to perspective employees.

harder to hire in other words, a tight labor market means workers have more leverage and when workers have more leverage, they get the nice office chairs with lumbar support. i want you to listen to andy owen, the ceo of herman miller when she was asked -- she's got to come on the show. listen to this if the macro situation is hurting her business she responded we're still hearing that the war for talent is really contributing to people looking at their work spaces, people understanding how they can provide places that people want to work we aren't seeing a slowdown there. it's not about the macro, people it's about the red hot labor market you ever hear that this is what i'm talking about you got to be on the conference calls, not the big mac crro numbers. this is real what this is what you make your decisions on let me give you what james keen at steelcase is saying why is the industry growing and why are we growing even faster customers really seeing the connection between their

business places and workplace. it's related to work for talent. the adoption of new work processes like agile and other efforts to improve workplace productivity he goes on to point out customer business to the headquarters in grand rapts are up last year and steel of case has a larger pipeline of opportunities. see, you probably don't know this man, and i totally get that i regard him as more important than any one of these federal people that i hear this is real world this is what determines our economy. long story short, as long as employment stays strong, these high-end office furniture plays are in great shape the second thing that jumped out at me, the trade war is hurting them less than you might expect. one of the fears is they would be disproportionately hit by the tariffs as they do a lot of their sourcing from china. but it turns outfalling commodity prices and better execution have offset. herman miller noted the gross margin, what they make after the costs of good sold was up nicely thanks to favorable price

realizations and lower steel costs, along with the company's ongoing improvements the trade war isn't hurting them same thing at steelcase as david sylvester, the ceo there said i'll start with the tariffs because they're impacting us, but they're not impacting us dramatically and really, our teams have worked very hard to offset much of that impact, whether it's through negotiating with the supply chains, adjusting our supply chains, taking price actions to offset it meanwhile, steelcase is getting a big boost from the decline in steel. put it together and you have a pair of stocks levered to the tight job market in the united states and they're not taking nearly as much damage from the trade war as wall street expected in fact, in a perverse way, the tariffs might be helping, because they're tributes to the worldwide slowdown that is driving down commodity price, giving herman miller and steelcase lower raw costs. best of all, both of these stocks after these runs are absurdly cheap, selling for about 12 times next year's earnings estimates in a market that is increasingly wary of high-flying stocks with

nosebleed valuations, these could be what the doctor ordered. this is the opposite of peloton. it's the opposite of smile direct the bottom line, as long as the job market stays strong, companies will keep paying up to make their work spaces attractive and entice the workers they need. that's why i think herman miller and steelcase, as boring as they are, are both wto buying even after last week's explosive rallies; i bet kit go higher still. stick with cramer. this is the family who wanted to connect...

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by the way, she's the it wasnext mozart.g day. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places. should investors pump the hand brake on peloton or will this ipo have the wind at its back >> let's face it we have reached the point in the ipo cycle where all the best

merchandise has already been taken public so the bankers keep pushing lower quality companies at undeservedly high prices without any regard for the buyers. buyers like perhaps you. sometimes it's so obvious that the deal ends up getting pulled or at least postponed like we saw with we work and my agent pulled its deal. this have evening. what do we do postmortem on the peloton deal so people won't get hurt again peloton active is a company that makes connected exercise equipment. every one of these things has a screen where you can stream everything from entertainment to exercise classes right in the comfort of your home the problem with this busted deal it is went immediately below its ipo price and then it kept going lower why? timing peloton's got great revenue growth but no earnings as recently as three or four months ago, wall street might have lapped it up now, money managers that want companies only that are profitable that's how you end up with the situation where retail demand

for peloton was strong but the institutional demand, which once again profitable companies was nil at 29. with the ipo price so institutional sellers were more than happy to book the stock out to wherever they could find, which is why it opened below the price. hence the failed opening where the big boys dumped the stock and take their lumps while the little guys get stuck holding the $29 bag, now retailing at 25 it was all too predictable, which is why i predicted it on "squawk on the street" this morning. all i can say is it could have been a lot worse just ask the people who bought smiledirect. the stock is down more than 10 bucks from that level. so is there a level where it makes sense to own peloton look, the economy is clever -- the company's got a great gimmick, i have to admit some people would say it's a skill set, using digital technology to create a more compelling exercise experience in addition to selling machines, they also sell subscriptions that give you access to all sorts of digital fitness classes.

regular viewers know that i am a big fan of both the fitness industry and the subscription economy. and when you look at the peloton financials, they're very impressive the company now has 511,000 connected fitness subscribers up from a year ago, and less than 108,000 two years ago. in a more normal less saturated with new deals market, i am telling you, we would have loved this company even better in 2019 fiscal year, peloton posted 110% revenue growth, and that was a terrific acceleration from 99% in 2018. investors typically worship at the altar of accelerated revenue growth however, if you look at the quarter by quarter figures, the growth peaked in the first quarter of the calendar year and slowed to 109 in the most recent quarter. still, the first quarter is by far the most important that's when you get all the new year's resolutions so maybe the deceleration doesn't even matter. what else? you can see that peloton is trying to shift from a hardware make were a service kicker into more of a razor blade business model.

in 2017, hardware made up 84% of the total sales. in 2019 down to 79%. you know i am a big proponent of the subscription economy, but it will take a long time for peloton to reach a point where the razor blades matter more than the razors. especially if their hardware sales keep accelerating. that's a high quality problem. all right. how about the negatives. one objection you hear is around a lot -- a lot that peloton's cost are simply out of control they're spending too much. the cost of revenue for the hardware business increased by 110% in the latest fiscal year, and the cost of revenues for the service businesses was even worse. it was up 127% in part because they needed to pay royalties on all the music they license for the streaming content. who wants to exercise without music? all told, peloton sales in marketing rose by 114%, even faster than the revenue growth they are heavy advertisers the ads are quite compelling,

but that's too high a marketing quotient for most institutional investors to stomach, at least in this new more skeptical environment. then there are the earnings, or more accurately, the lack thereof. peloton's money losing operation, it's the latest fiscal year, hey had $202 million in losses from operations, and their margins seemed to be going in the wrong direction with the operating margin down from negative 22% in 2019 however, most of that was stock-based compensation when you exclude that and you look at the adjusted ebitda margins, the most important metric here, they only declined from negative 7% to negative 7.8% we would have overlooked that six months ago we wouldn't have cared we wanted growth at any price. but those days are over. now this market wants okay growth with good profits, not to mention some hefty dividends and big buybacks that is the exact opposite of peloton. and when you look at this thing through a more critical lens, the bear thesis practically

writes itself. think about what this company really does. even better, take a look at this image from the second page of peloton's perspective. and i quote, we are a technology media software product experience fitness design, retail apparel logistics company, end quote if you have two quarterbacks, you don't have one meaning if you don't know for sure who to play your starting quarterback you don't have any good options i think the same goes for corporations if you have ten buzz words to describe your business, you don't have one this reminds me of when snap, the parent of snapchat came public and tried to call itself a camera company no snap, you're a social media platform similar, while peloton is pitching itself as family of business was huge cross-selling opportunities, at the end of the day they make their money selling fitness machines with screens attached and subscriptions to exercise videos and that is what really worries me when it comes to the workout business, peloton has some very serious competition, whether we're talking about the existing gym chains like planet fitness,

private, equinox or soul cycle or personal trainers or even something like fit bit, to say something of other companies that make exercise machines. i know they vehemently disagree of that characterization of themselves they think they're in the business of making home entertainment machines that make you look great for a small monthly fee, the opposite of showing up at a gym that you don't want to go as for the subscription side, there are already half a dozen apps to provide a similar service, and most are a heck of a lot cheaper than peloton's without the huge up-front cost of buying a new treadmill bike, a stationary bike or treadmill although i have to admit, they're tariff there are a couple of other major negatives here for one thing is another ipo where the public shareholders will have hardly anybody rights. there is a dual structure that puts all the hands power in the insiders once again, i think investors are sick of this kind of stuff the other big problem, peloton is being sued by a group of musical publishers who allege

the company is using music that their artists own without permission peloton seems to recognize this is going to cost them. although at the point we don't know how much. still, even with these negative, again, i would be happy to recommend this stock at the right valuation. there aren't many companies with 100% plus revenue growth that's accelerating but even after pulling back today, peloton has a $7 billion market cap, which means it's selling for roughly five times 2020 sales estimates too rich for an entertainment in-home health machine now it's hard to find agood comparison here. peloton is growing like zoom vidya, which trades at 30 times 2027 sales but zoom is down big from highs. i think peloton may have missed its chance it's just not the kind of stock this market wants. it's been left behind by the wall street fashion show people unless the investment bankers start pricing the ipos a lot lower, institutional investors will continue the greet them with the skepticism that peloton got today.

it will become the norm, not the exception. the bottom line, this is not the kind of market where you want to rush into a newly minted growth stock like peloton 2/3 you think this stock is enticing, just be patient. i'm betting you'll get a better price. hey, maybe somewhere between 17 and 23 until then, wait, because we're in a treacherous market for fast-growing companies with big losses untilchanges, stay away. frances, in arizona, francis >> caller: hello, mr. cramer pennsylvania boo-yah to you. >> yeah, man, big game tonight boo-yah. what's up? >> caller: well, i have a question in light of lululemon's recent earnings, will they still be able to spin straw into gold >> i thought that quarter was fabulous i think management is terrific i think we're still early on i think it's a high multiple stock. i think you'll be able to get it cheaper than it is, but i was blown away that was one of the best

conference calls of the season, along with nike. those are the two best i want you to be careful out there. particularly because now we've got this endeavor pull, but people are saying bad things about micron things are a little convoluted for the moment all right now you the skinny on peloton. it's not a bad story, but not at these levels not at these levels. hey, much more "mad money" ahead. the housing market starting to get a lift at last from lower mortgage rates i'm talking to the ceo of taylor morrison homes, one of the largest in the country, see what she is thinking. then i'm revealing two stocks that i know which way the wind blows. i'll tell you the names and what they're signaling, and all your calls in rapid-fire in tonight's ed additional of the "lightning round. so stay with cramer! ♪

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this is confusing and often downbeat market. but there are some real bright spots, like domestic housing ever since long-term investment interest rates plummeted over the summer, this industry has really caught fire, powered by cheaper mortgages. housing starts reaching a 12-year high last month. now that's a big deal, people. so it's no wonder the home builders have caught fire. so let's just take a look at taylor morrison, which has a presence across arizona, california, colorado, florida, georgia, illinois, north carolina, south carolina, and texas. this home builder is one of our favorites, and seeing its stock rally 62% year to date, and it just got a major boost last week when the company announced that it had seen a ludicrously high 33% increase in home buyers in july and august, even better than kb homes which you know i like can they keep climbing let's take a closer look with sheryl palmer, the ceo welcome

back to "mad money." good to see you. >> thank you. >> you're going to be hitting it on all cylinders. >> thank you. >> a lot of it is unexpected unexpected because people felt with the changes in salt that people wouldn't be buying homes and people also are shocked that there is such a big demand for homes immediately for renting and not just to living so tell us about these trends, because they are surprising to people >> well, it's quite a good time. and i understand that there has been a lot of movement with interest rates, but we're really in the largest expansion we've really seen and recorded history, right, and things are looking good but it's no surprise if you think about household net incomes are growing. people are doing better with their real estate. savings are up incomes are moving up. people are feeling good, and that confidence is absolutely showing in the real estate market and that's not even to mention the demographic tail winds we have with how the millennials are feeling about buying their

first or second house and certainly the boomers. >> and you've got a terrific price point for your homes. >> we do. >> that is good for both starter and for move-up, right >> we do we really serve all consumer groups and we have focused in strategically on that barbell of those millennials and the boomers. i mean, that represents 160 million plus folks >> right. >> it's interesting, jim, because everyone talks about the millennials like there is this one group of people and they're not buying we're just not finding that. in fact, we're finding exactly the opposite they're quite qualified. we actually take the millennials, we split them in half and say there is the older millennials and the younger millennial. >> so what would be the cutoff there? >> 30-plus. >> right. >> that's when we're seeing probably 75% of our millennials are buying their second house. >> second? >> older millennials and the ones under 35, about 45% of them are buying their second house. the average age of a millennial

wanting to buy is 32, 33 and that's generally directed through marriage. >> right. >> more important, children. and it's -- they're quite excited. they want exactly what they grew up with. >> you see, that's very different, you know that we have felt that millennials were a breed apart, that they would always live with their parents or maybe they would always rent. they got a little delayed, but they are like us. >> they absolutely and they're not running from us. >> no one is saying that except for you. >> that's too bad. >> you have data. >> and we spend a lot of time understanding our customers. about a third of our buyers are millennials. and if i look at that what that was five years ago, that's 20% of our buyers. so we've seen the movement consisting with the aging, and, you know, if we were to chart, jim, the last 30 years of home ownership, every two, three years, we would see that average age of home ownership move up. so it shouldn't be surprising

that this largest cohort is doing exactly the same thing >> let me ask you. our coverage -- everybody's coverage is filled -- "the wall street journal," i listen to you, not only do i think that gloom is inappropriate, but maybe we're in kind of a halcyon really great moment in the home building business. low rates, costs haven't gone up that much. i know there is labor issues, but you're holding them under control. we finally have a lot of buyers and there are different kinds of buyers buyers that will be renters, so to speak, but all sorts of different price points this is good >> this is good. the affordability issues are real market by market. >> okay. >> but not as real as i think sometimes the media portrays and i say that, jim, because once again, when we look at our consumers, even with our first-time buyers, they can afford a lot more of a house part of that is low interest rates. >> right. >> so they could either afford a higher interest rate somewhere to the tune of 3 to 500 basis

points on average, or a much bigger house so i think the consumer is changing their relationship. >> okay. >> with home ownership, which is a good thing and that's why we're seeing increases in their savings but as you said, we're just now seeing income growth interest rates are our friend. we have no supply. it's a really good time. >> so many people come on air and they say listen, low interest rates doesn't matter. it doesn't matter whether the fed cuts rates if the fed cuts rates, those get better i know the adjustables i'm still paying too much from my adjustables low interest rates matter tremendously, and the people who say they don't haven't talked to you and done the work. >> i think unfortunately we get locked in on these sound bites and we have to get under the sound bite and let the data talk if the information tells us that's what we use, we talk to our customers so many different ways and it's about building what we know they want >> you know what the facts are a breath of fresh air. >> all right >> thank you so much

congratulations on great numbers. great quarter. great things that you've done for shareholders that's sheryl palmer she is the chairman and ceo of taylor morrison homes. when we have light, i don't know, from the low 20s look at this thing go. "mad money" is back after the break. tv announcer: it's just as powerful as the lexus rx... as many safety features as the rx, the new...

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"lightning round" is sponsored by td ameritrade ♪ it is time it's time for the "lightning round" >> sell, sell, sell, sell, sell, sell >> buy, buy, buy, buy, buy, buy! [ buzzer ] and this the "lightning round" is over. are you ready, skee-daddy? let's start with jim in connecticut. jim? >> jim, it's another jim calling. no relation. i'm an action alert member. >> yes >> caller: it's been extremely helpful. >> thank you, buddy. really appreciate it >> amd i do not like the pin action. >> you are right reported a number today, nobody really likes it. i think amd is doing better than micr micron, but you know how it goes we written it all the time for club members these all trade together which is why we have taken our cash position up so high. you'll get a chance to buy amd

lower. mark >> caller: hey, jim, thanks for taking my call. >> of course >> caller: i want to thank you, great show. >> thank you. >> caller: i want to ask you the china scenario. >> yeah? what stock did we lose -- let's go to trevor in wisconsin. trevor >> caller: boo-yah >> boo-yah >> caller: what's up, jim? >> all right, what's happening >> caller: regarding activision. the stock has been down over 50% in the last year, however, it seems to be relatively stable in recent months. when you take into consideration they've got some exciting product releases, the new call of duty that is going to be the first game ever to be introducing compatibility to the gaming world you think we're looking for a buy here >> i think the stock is what i would call an up stock that's not really where i like to recommend things. i am if there were any zip, i

think what zelnick is doing is better than what is going on at activision betty in michigan, betty >> caller: hi, jim boo-yah. thanks for taking my call. >> boo-yah of course. >> caller: lyft? is it time to buy? >> no, not yet the company, it opened in the '80 80s. it might become literally a tax loss play between here and year end. let's go to darryl in tennessee, please darryl >> caller: hey, first time long time jim, g-e-l. >> very big yield, but i think it's too high. it makes me worried. that whole complex, i do not like i do not like at all dave in new york, dave >> caller: boo-yah, jim. >> boo-yah, dave >> caller: my question is about realg realgee, rlgy. it was a disaster and announced a partnership with amazon. since then the chart has been

looking a little better. i'm wondering is now a good time to get >> well, what can i say. it's cheap it's got a yield i actually believe it can support i do believe when you're buying something like, that a quality company at six times earning, it might be worth it, but they do have a lot of debt a stock down 56% has a lot of sellers because of tax law selling. i'm not going to object to buying a steak in realgee, but it is speculative. steve in pennsylvania, steve >> caller: how you doing, jim? >> i am good how about you? >> caller: i'm okay. i got a question you guys have been talking about cronos a lot the only time i missed is when is the time to buy. >> i feel the shorts took a big run at it. i thought grover did a good job on the show. the stock up is 6 when he came on i think you can speculate and buy a piece. and that, ladies and gentlemen, the conclusion of the "lightning

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♪ even on a not so hot day, we have some very powerful positive tail winds you just have to know where to look for them. for example, every time i see an earnings report from a company that has zero exposure to china, i get excited, because many of these companies have tailwinds that are totally separate, the macro that's talked about

endlessly as captured by surveys and sentiment and blatter from the federal reserve. but not everybody is hostage to the back row some industries have their own tailwi tailwinds, and you can make a lot of money simply by identifying these trends and knowing which way the wind blows. we mentioned steelcase and herman miller before now i want you to consider the cases of kb homes and jabil. here are two companies i've always been fond of each though they've never been market darlings kb homes is the most hated of the home builders but up more than 71% for thor. >> that's even better than taylor morrison because its position as major player in the housing market relatively inexpensive starter homes. as for jabil, this is a gigantic contract manufacturer, a company that makes things for other businesses whether we're talking about health care, consumer packaged good, ecommerce or energy or retail when you order something online, there is a good chance jabil help you'd with the packaging. you need some hardware for 5g

wireless jabil will have first dibs on manufacturing. health care on the wrist jabil. despite all the doom and gloom about the border economy, the truth is our economic economy away from the world trade issue is very healthy, and that's good news for these two companies and by the way, this is not necessarily going to be affected by the fed it's not going to be because the fed wants to cut rates it's not going to be affected by even the impeachment stuff i want you to listen to this quote from the chairman and ceo of kbh he says marketing conditions remain favorable supported by low interest rates, strong economic growth, high consumer confidence, and positive demographic trends while demand is healthy, supply continues to be insufficient to meet home buyers' needs, particularly at affordable price points where we operate, which is our key element of our success. simple, precise, making money for you. given that kb homes saw 24% net growth and the housing glut from earlier in the year has run off.

that's when everyone was so scare to have had stocks we told you please don't be scared of them, you have higher gross margins and more runway from home builders than i've seen in ages what is really in play is affordability for young families, and that's going the stay because the mortgage rates are so low how about jabil. think about what they manufacture. 5g is in its infancy the internet of things is exploding. the need for less packaging to please environmentals is now a must those themes all play to jabil's strengths. put it all together and i think too many of these wind bags who opine about the fed are missing the big picture. housing is 10% of the economy and it punches above its weight. a bull market in housing can drive the whole economy, even when the auto industry is floundering like it is now as for jabil settling products designed by other companies on a drawing board? that's only accelerated. the tailwind's from the economy right now triumph over the headwinds that fill head lies. but you have to read the conference calls from these two former ne'er-do-wells to know

that but both jabil and kb homes are very good, very well run, and they've got no flyers in them. they're easy to understood they're not beyond meat which trades on contracts like with mcdonald's and they're not peloton, today's bust which traded off sales, not earnings they're not micron which is going down after the close because of worries about gross margin they're simple, easy stories no jabil and kb homes, they're boring they're prosaic american companies. as i keep saying you do not need a weatherman to know which way the tailwind blows stick with cramer. it was sophie's big day.

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can you help with these? we're more of the plan, invest and protect kind of help... voya. helping you to and through retirement. plants capture co2. what if other kinds of plants captured it too? if these industrial plants had technology that captured carbon like trees we could help lower emissions. carbon capture is important technology - and experts agree. that's why we're working on ways to improve it. so plants... can be a little more... like plants. ♪ ♪ if price i like to say there is a bull market somewhere i promise to try to find it just for you right here on "mad money. i'm jim cramer i'll see you tomorrow.

and tonight, the american dream continues. who wants to help fidget man make fidgetland a household brand? barbara, stay in your seat! -aah! -pull! -whoa! -oh! you're scaring the hell out of people to cause them to buy something. it's not a tchotchke because it's functional. there's a huge market out there for our product. -what are your sales? -i've made almost $8,000. think of your next business as fast as you can. there's no business. i'm going to give you an offer. -whoa! -you guys should grab that money and run. -you're sassy. -do you ever turn off? our counteroffer is 25% equity. you've got to really get focused. [ sobs ]