walking back a statement he made earlier today in the press briefing room suggesting exactly that melissa, back to you. >> eamon, thank thank you. >> that does it for us here on fast back here tomorrow at 5:00 for more in the meantime "mad money" with jim cramer starts right now. >> my mission is simple. invests 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 you, but to educate and teach you, so call me at 1-800-743-cnbc or tweet me @jimcramer. if there is one word, one word that defines this earnings season so far, it's nabaf! nabf oh, come on, it's a totally made

up acronym for not as bad as fear while it seems to gain on the surface, the nasdaq rising 0.40%, underneath there were some bewildering moves that remind us the market doesn't always behave the way we expect it to. in particular, a bunch of stocks rallied today, even though they reported what looked like simply awful numbers. if you're befuddled, you have come to the right place. how does the stock end up going higher in the wake of a seemingly ugly quarter, it's all about my buddy, pal, friend nabaf. let me show you how it works we start with the railroads. the railroads are the best example. >> all aboard! >> this morning union pacific reported by what even by its own admission was a disappointing quarter. [ crying ] their sales were weaker across every single cargo line. unreasonable downtown 20%. premium, that includes the position down 9%, ag off 1%. industrial down 1%

the cause of this weakness some cargos have been troubled for a long time, like coal but most of them are just plain economically slower autos, weaker lumber. and perhaps most importantly and troubling, the absence of agricultural exports to, yeah, what do i have to tell you, china. the market's reaction, horror. i saw the stock down 4 points. oh, man, we're going to have a rough day today. union pacific is one of my absolute favorite companies. but i know when you get such an ugly release there is going to be some fallout, some selling, some obliteration. >> sell, sell, sell! >> and there was fallout, at least until the conference call started. then the stocks start to rally before ultimately going positive it went up more than 2 bucks before trading finished it up 37%. still, think about it from down to up. because even though so many volumes were weak, union pacific, it still made a ton of money. it's a testament to the fact

that this is a changed enterprise thanks to tremendous expense control use of locomotives, precision railroading, knowing where all the trains are, getting them in time, layoffs. they were able to generate some monster profits in spite of the weak sales in the old days it would have just been a hideous earnings shortfall. union pacific is so much better run right now. plus pricing held up as well as some long-term contracts set during better times. as lance fritz, one of the best ceos in the business explained on the call, quote, we have been a little disappointed on the top from what we expected to occur i remember when he was here trying to find workers there was no workers now he is over here saying listen, we're going let some workers go even though union pacific's operating revenue was down 7%, their operating income declined only 2%. it's almost alchemy. that's how you get a not as bad feared quarter that's how a stock can rally off

a revenue shortfall. it's about nabaf we saw something similar last time from csx. their cargos weren't as weak as union pacific's, but they did the same thing which gave us another not as bad feared quarter. boy, they made a ton of money. what else? last night, as i was leaving the office, step by step, inch by inch, i saw the not so hot report from united reynolds. the largest equipment rental company in america and the stock -- how about that philadelphia accent? and then the stock collapsed after-hours trading. down one, down, two, down, three, down four it couldn't find a bottom. but then on the conference call we heard how united reynolds was able to rationalize cost to handle the downturn they anticipated. this is a classic sink or swim cyclical business that seemed to implode during times of weakness in the old days. the call we heard how the company presciently cut spinning avoiding key hits on oil and gas.

united reynolds ended up bottoming down 5% and then came roaring back this thing finished up 5% today. ♪ hallelujah because the quarter was nabaf. or how about cramer fav honeywell. i was momentarily concerned if not frustrated when i saw that honeywell's revenue came a little bit shy of wall street's expectations at another time, they might have really hurt their profitability, causing the stock to get crushed. but now hardly seemed to matter. the company earned $2.80 more. they boosted their earnings forecast, even though they also took down the high end of the revenue forecast taking down the high end of the revenue forecast used to crush a stock. plenty of investors were worried that honeywell might see fallout from the boeing 737 maxwells nope instead the aerospace business had 11% organic sales growth no wonder the stock ended up rallying more than 2% today.

and by the way, it's not done. you know what? the same thing happened to united health, unh so many traders were terrify about the managed care company's earnings that the stock had gotten hammered into 220 going into the quarter it reported unh tacked on another six bucks today, again it's not done. these numbers were much better than feared. so good that they allow buyers to stop worry for a few minutes about elizabeth warren and just enjoy how well the company's doing. then there is johnson & johnson, which is supposed to be hurt by litigation risks inste instead, the company proclaimed it was ready for any and all verdicts which have been going into their own direction, not that anybody is talking about it hints of an opioid settlement gave them another boost. the stock has finally broken out after languishing about asbestos in baby powder broke you've seen signs about plaintiffs winning huge damages, right? they rarely hold up over a lot

of scrutiny hen they go to appellate courts that and some fabulous blockbuster drugs and solid device numbers explain how j&j could have a nabaf the banks, nabaf all over the place. how many times do we have to hear that tin verted yield curve is this. those macro clowns the macro people who specialize in that, can they shut up? a bunch of mount banks trust me how many times did the sirens of skepticism tell us to avoid being jp -- even touching jp morgan, getting near jp morgan while the fed was cutting rates. truly, these knaves don't know jack it didn't matter thanks to robust consumer and fabulous expense control, we've seen nabaf from every one of these, literally goldman sachs, that had been such a -- did you catch that interview? guys throwing a couple of ties you're bankers and journalists

so you're in california. a lot of them walk around naked. anyway, i'll have more to say on netflix later in the show. the stock rallied even though the company suffered from slower subscription growth in the united states so why wasn't the stock crashed? netflix earned 1.47 per share. this has never been an earnings story. that's why the stock initially rallied as much as 22 bucks, closed up only 7 once again, we had a not as bad as feared result of course not everyone disappointment is a nabaf disappointment some are genuinely bad dark clouds with no meaningful silver lining. look at ibm, if you can. hold it just a second. i want to look at it where are those? >> merger. >> oh, there is the merger bot look at ibm. i mean, report is slightly better earnings but weaker than expected sales you can only look at it with these. these are special glasses that

protect you from the actual numbers that ibm reported. even though they recently bought red hat, a brilliant deal, it wasn't enough to move the needle and offset the enormous legacy business it's obviously what is happening here the doom and gloom brigade controls the narrative but the ceos that have reported so far saw the pain coming and took decisive action to cushion the blow they deployed new technology, made tough decisions and turned lemons into lemonade in almost every case, except for ibm the bottom line, all these not as bad as feared quarters are good news for shareholders, who haven't been shaken up by all the darnay sayers. more importantly, the reminder that execution matters perhaps with this industrial and enterprise showdown, it matters more than ever get used to the name, nabaf! and watch the guys on the day side pronounce it nabaf. steven in california, steven . >> caller: professor, this stephen michael calling from san diego, california.

>> san diego i spoke to adrian gonzalez today. >> yes, sir. >> he is a smart fellow. what's up? >> caller: i had a question on gw pharma manufacturers. >> sure enough >> caller: that i recall the only ones that have the medicati medicationepi dial that can stop seizures in children they received approval in the european union which gives them a huge market, but the stock has dropped. >> there has been this ongoing raid on the company that the stuff doesn't work i've not been determined that it doesn't. to me it does. and more importantly, it's part of the vast cannabis abyss that doesn't seem -- today it bounced a little for cannabis. i got to tell you, i think gw pharma is a good company with a good product, but the bears will not let go can i go to mike in florida, please, mike >> caller: hey, jim.

>> mike. >> caller: i see the broader market doing really well going up, but there is a pocket of stocks, there is some growth stocks/software companies. >> okay. >> caller: they're actually going the opposite direction. >> right the software is service companies. the highly valued ones. >> caller: i want to call out wasn't of them the ceo was on about three weeks ago, and just want to get your thoughts on z scale, down about 50%. >> oh, my. zscaler, this is one of heather gaines' favorite company when it comes to cloud strike. and by the way, zscaler and crowdstrike are in a civil war to be able to get customers. and that's why it's been bad i have to tell you, though i think that i've been watching palo alto network, and that stock is going up, even in my charitable trust sold it and it's really killing me now there is a prevalent thesis in town. it's called not as bad as feared, and it controlled today

act. really, today's action and that's good news for shareholders who didn't get distracted by the naysayers. nabaf! all right. on "mad money" tonight, what's going to happen to -- what's going to happen to the stock market if my old pal larry kudlow ends up being right i'm giving you my take then, is it time to tune into netflix really? i'll tell you if the company can be streaming profits in the future and it's a biotech up more than 190% year to date cramerica. could it be worth adding arrowhead pharmaceuticals to your portfolio i'm going to talk to the ceo stay with nabaf, and stay with cramer >> don't miss a second of "mad money. follow @jimcramer on twitter have a question? tweet cramer, #madtweets send jim an email to madmoney@cnbc.com. or give us a call at 1-800-743-cnbc

miss something head to madmoney.cnbc.com. here, it all starts with a simple...

hello! -hi! how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh.

sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. ♪ >> boo-yah

what happens to the stock market if larry kudlow is right? larry's a chief economic adviser to the president, and he has some bold things to say about world trade this morning on "squawk on the street. so bold, you know what they bear repeating. full disclosure. larry kudlow was my partner on "kudlow & cramer" which means i'm not exactly a neutral observer he is a friend but man, if you ever watched "kudlow & cramer," you know we disagreed all the time that was sort of the premise of the show. it's not like i've been accepting everything he said uncritically since the trade war got going. sometimes i think he is mistaken, and i never hesitate to say so this morning he made two points, important points we haven't seen anything positive coming out of china since the trade talks. told us not to give up on a deal larry said, and i quote, people shouldn't be so pessimistic on china. some good things could happen, end quote. he predicted that not only would china start buying agricultural

products like they promised, they'll also change their policy on forcing american businesses into joint ventures in exchange for act says to their gigantic market historically, here's what's happened the chinese government has only let our companies own 49% of these joint ventures their homegrown partner got the majority stake according to larry, that's about to change. our companies will be the ones who own more than 50%. that would be a major concession second, he said it's not too soon to give up on the new trade deal, the nafta replacement that president trump has negotiated with mexico and canada this is something that took me very much by surprise. larry think there's could be a deal in the offing to get this thing through congress yes! even in the middle of the impeachment inquiry, speaker pelosi has been accommodative about this trade deal. listen to what larry had to say. >> we may have disagreements on some matters, but i think usmca

has a lot of momentum. i think it will pass, and i think it will pass before thanksgiving >> before thanksgiving when i interviewed nancy pelosi a few weeks ago, i got the same impression but then, then the ukraine story broke, and you know what she embraced impeachment i think that would kill the new trade deal how are the house democrats going to work with a president who they're actively trying to impeach? it seems like it's impossible. nope according to larry, things are on track my view, look, i've known larry for years, an he has always been an eternal optimist. i thought he might be blowing smoke. gave him a chance to dial the whole thing back take back his comments by asking both points a second time. but he made it clear that his answers had been checked off by none other than robert lighthizer lighthizer and kudlow are typically in opposite camps when it comes to the trade war. light hisser is a hard-liner while larry has been more of a free trader at heart

normally when larry says something positive, the hard liners shoot him down a few days later. they've already signed off on several statements what happens to the stock market if larry is right and we get a new trade deal with mexico and canada before thanksgiving and we see concrete results from negotiation with china this that case, you know what? i think stocks will blast right through these levels and go much higher why? because most of the weakness in the economy and thus the market stems from barriers to world trade. well can get a really positive domino effect if we pass the nafta replacement bill and start getting even small concession out of china in that scenario, earnings will explode for the weakest part of the economy, the industrials on top of that, the administration can go higher which ends the nonsense about the inverted yield curve and we no longer need to worry so much about what the feds are going to do will larry be right? i don't know but it's a real possibility. and after this morning, you need to start factoring it in for you

start doing a lot of selling right into this market so stay with cramer.

oh, wow. you two are going to have such a great trip. yeah, have fun! thanks to you, we will. aw, stop. this is why voya helps reach today's goals... ...all while helping you to and through retirement. um, you guys are just going for a week, right? yeah! that's right. can you help with these? oh... um, we're more of the plan, invest and protect kind of help... sorry, little paws, so. but have fun! send a postcard! voya. helping you to and through retirement. fidelity now has zero commissions for online u.s. equity trades and etfs. and fidelity also offers zero account fees for brokerage accounts, plus zero minimums to open an account. and only fidelity offers four zero expense ratio index funds directly to investors. with all of those zeros,

there are zero reasons to invest anywhere else. fidelity. ♪ so maybe i'll win ♪ saved by zero ♪ what in the world are we supposed to do with the stock of netflix here yesterday afternoon the streaming video kingpin reported what many people are calling a better than feared quarter [ gunshot i'm hearing that it's time to take netflix out of the penalty box after it botched the last quarter in july, that this company has been redeemed, that they've done just enough to get themselves back on track i don't buy it after really digging into this quarter, i thought it was soft there is definitely not enough in here to take netflix out of the penalty box. that would be a mistake. if you still own it, i recommend taking advantage of today's big bounce to ring the register.

by the way, i like this company for a long time. you have to understand what netflix is up against, because when you look at these numbers in context, i think they're pretty discouraging. it was an okay quarter, but we don't live in a vacuum we live in a world where netflix is facing an onslaught of competition as everybody and their mother rushes to launch their own streaming service. i think i should have one. i'm not kidding. that's how many are coming while some of these are already out, the heavy hitters haven't even launched yet. apple is drawing out its video streaming platform in a few weeks. people are making a joke they don't have enough content. they have billions of dollars. they want content? they can get it. disney is coming out in a little less than a month of they're both going to be a lot cheaper than netflix, 5 bucks, 7 bucks a month. that's the tip of the iceberg. warner media is coming their last quarter preapple tv and disney plus. going forward, the big question is whether or not netflix can hold off these new rivals. and what we saw last night does

not inspire a ton of confidence for me i look -- you know what? i use the stock of roku to measure new competitors, and it went bonkers today sure sign more streaming services are coming online and this is not a kiss of the more is the merrier even before the disney apple tag team enters the ring, this company already faces real headwin headwinds. netflix was $385 in july $385, people then they reported a botched quarter and the darn thing spent months selling off, ultimately bottoming at $252 late last month. at those levels it started feeling too cheap to ignore, which is why it rebounded to $286 as of yesterday's close but man, oh, man, the bears has a field day with the last quarter. after pushing through a price increase earlier this year, the growth tanked. unlike most stocks, netflix doesn't typically trade based on sales or earnings. it trades on new signups that's the metric. so even though they reported

decent earnings beat last night, all anyone ever carried about were the anemic subscribers. wall street was looking for 5 million. that was awful the combination of a major shortfall overseas and domestic subscriptions that declined for the first time since the company decoupled the streaming service from the old dvd service in 2011 the source of the weakness management told us we don't belief competition was a factor since there was a cognitive change plus, new competitors were only popping up in certain regions. the culprit? management blamed the price increases and the fact that, i quote, q2's contents drove less growth in paid ad than we anticipated. they did note they did huge numbers in the previous quarter. so there may have been a pull forward effect in july netflix sounded confident about their ability to get things on track as long as they focused on the fundamentals they kind of were pretty bullish

here they told us that the third quarter started with the insanely popular third season of "stranger things" and the first two weeks were strong. at the time, the company said it expects 7 million new paid customers worldwide, 6.2 in the rest of the world, 800,000 here in the u.s remember those numbers now the stock's still got obliterated in july, and it kept falling until a month ago when it finally bounced off its lows. but that's the context going into last night. there was a huge subscriber shortfall last quarter management promised that they would be able to get things on track. so did they? well, look, if you only looked a the stock action today, with the stock ultimately rallying 72, you might think that netflix actually did deliver, and in some ways they did the company posted a gigantic earnings beat, earnings. they made $1.47. they're making a fortune thanks to the price hikes but what about the subscriber numbers? that's the real metric those numbers were a lot more

mixed. while international signups expected were a bit better than expected coming in at 6.3 billion, the nick numbers, wow, they stunk just 517,000 when management was forecasting 800,000. i know, 517,000 is a big number, but not when you're expecting 800. all told that. >> didn't quite hit the 7 million figure they guided for still, this was their most accurate forecast in recent history. what's holding back the u.s. business netflix blamed an uptick, quote, since our u.s. pricing increase retention has not fully returned on a sustained base decision cyst to preprice levels which has led to slower growth they're losing more customers than they used to, and that's weighing on the numbers. as barclay's put it out, a small increase like this can translate into real pain we're talking two million fewer net subscriber additions annually at this pace. that's a lot now some of the analysts were more critical. mcquarry downgraded.

they think the u.s. business has reached a pint of saturation where it's going down much harder time growing. especially with disney and apple plus coming next month mcquarry is betting it will make it much harder for netflix to keep raising prices. that's something i agree with. i didn't always. i used to think they could take it up lot. but not with all these competitors. plus, with so many streaming services that are competing for content itself, the cost of quality programing keeps rising. this is something the bears have been warning about for ages. but it never really mattered while netflix was a turbo growth stock. adding numbers of new subscribers. now it's not even though netflix has become quite profitable, it's still got negative cash flow their free cash flow came in at a negative $551 million, and they're expecting $3.5 billion cash burn for the full year. while that's an improvement and the numbers should slowly get better over time many the interim, netflix told us that they'll keep selling high yield bonds to fund their investments in growing the

business suboptimal for next quarter management's forecasting 7.6 million new signups. 7 million in the rest of the year that's much weaker than expected the analysts are hoping for 9.5 million not that long ago. ouch on top of that, their sales and earnings forecasts were actually pretty light put it all together, and i think netflix has reached a point of saturation domestically. even with "stranger things 3" they couldn't hit the forecasts. they had two subscriber shortfalls in a row, and that's before the new competition from disney and apple even hits what can save them netflix needs to start posting some extraordinary subscriber growth overseas. they may do it they have a lot of great -- a lot of great productions overseas so it can happen their understanding what people want region by region, it is unparalleled they do a lot of r&d about this. but they need to do better than they're doing. wan to give netflix more credit for its incredible profitability? this is a subscriber growth

story. if you value the stock on earnings, it's at 53 times that's not the way to look at it the bottom line, today netflix reported a quarter that was in many ways better than feared as i said at the top of the show. but that's all it was. i wasn't short netflix here. too risky. until we see how they handle disney and apple, i absolutely wouldn't want you to own it either andrew in illinois, andrew >> caller: hello, jim. this andrea, andrew's mom. we watch every day, and we really enjoy your show >> hi, cramer! my name is andrew, and i'm 8 years old. and i -- this is my second time calling you, and my question is should buy some more disney or sell it? >> why would you sell it, andrew you have your whole life ahead of you you're 8 years old congratulations. anded a drew's mom, fantastic too. disney is a buy. >> buy, buy, buy >> and it's one of the great long-term stories. my executive producer just got

back from disney world and you know what? not bad. not bad. she had a great time her daughter wanted to be like a jedi warrior instead of princess whatever all right. let's go to mark in new york, please mark >> caller: yes, hi boo-yah, jim. >> boo-yah >> caller: always a pleasure to be on the show and thank you for taking my call. >> of course >> caller: just a quick comment. a truly great to hear young people calling in the show lately the earlier they start learning about money, the better. because most of us learn initially by losing it first so i'd like to thank everyone on cnbc and i've been watching you show since day one >> yes >> so thanks very much for the education. >> fantastic >> caller: and tonight ipg it's interpublic group of companies. haven't heard much about it. it has a dividend of 4.5%, a forward p/e of 11. so jim, what i want to ask you is, is it a diamond in the rough or a dud >> no. the advertising stocks are just way too hard we're not going to -- look,

they're cheap. the stock is cheap but it's just too hard mark, you've been watching the show since it began. you know i don't like it hard. it's much better to find stocks that i think have the tailwinds, and i don't see a lot of tailwinds in that business taylor in north carolina, taylor >> boo-yah, jim. >> boo-yah >> caller: i'm a 22-year-old vaeser i've been watching your show with my dad since i was 15 years old. i was looking for some insight on the company slack for a invest were a long-term time horizon. >> i tell you, there is interesting data on the goldman sachs conference call that talks about what is known as a direct listing and how direct listings have been unable to find that really great shareholder base, and that's what happened to slack. it does not have -- because it did the wrong kind listen, companies that are thinking about doing, that don't do it. we can't figure out what the price discovery is, what it really is worth. so slack seems like it's

bottoming here, but i don't have a case to be made for it by the way, also now that schwab is doing partial stocks, this is a reminder if the companies only split their stock, they would have a lot more people like them. sure, netflix this quarter wasn't a total bust. as i said during this piece, but also at the top. i wasn't told blockbuster either i wouldn't short it. but i wouldn't own it. much more "mad money" ahead. it's a company up more than 350% over the past three years, and you may never have heard of it though some of our viewers have. i'm sitting down with the summer of arrowhead to see if it continues to rise ahead of tomorrow's big analyst meeting wondering if your portfolio has it what it takes this evening? i'll be the judge of that in am i diversified and the "lightning round. so stay with cramer. >> it's earnings season. >> the biggest companies in the world are set to report. >> and we're breaking down the numbers like nobody else it's about performance. >> and opportunity >> it's earnings season on cnbc.

sometimes, the pressures of today's world can make it tough to take care of yourself. but nature's bounty has innovative ways to help you maintain balance and help keep you active and well-rested. because hey, tomorrow's coming up fast. nature's bounty. because you're better off healthy. - stand up if you are first generat(crowd cheering)ent. stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent, but it doesn't equally distribute opportunity, and paths are not always the same. - i'm so proud of you dad. - [man] i will tell you this, southern new hampshire university can change the whole trajectory of your life. (uplifting music)

filmgate is growing really staffing a small bquickly and... is challenging. ...i needed to fill a production coordinator role. i was looking for someone with specific skills. so i posted a job on linkedin. maribel had all the skills i was looking for... and looking at her profile... . ...i saw shared connections. that was a plus. but the most important thing... ...is the ability to connect to people and she had it. and i knew... ...she was the one. post a job today at linkedin.com/grow

there are certain stocks we get asked about all the time, especially spectacular biotech names. when you really nail one of these, wow, the gains can be enormous, which is why callers so often get excited about them. take arrowhead pharmaceuticals this is a development stage gene therapy company. arrowhead is trying to treat rare genetic disorders by

effectively silencing, and that's the key term, silencing the genes that cause them. using what's known as rna interference technology. this stock has rallied to just over patchy fog, an 800% gain. no wonder we're always getting called about it. i gave my blessing to speculate on this one. since then it's up another 20% i like that arrowhead has a bunch of positive catalysts coming including r&d day in new york city, right here, that takes place tomorrow and before they talk to professionals, they're visiting us to share their story with you, the home gamers so let's check in with chris anzalone he is the president and ceo of arrowhead pharmaceuticals to learn more about his company and its prospects. mr. anzalone, welcome to "mad money. good to see you, sir have a seat. good to see you. well, our viewers are the smartest on tv because they see you have a lot of prospects, and more important, that you have great partners, big deep-pocketed partners that can do terrific things, including pay you some giant milestone

fees can you walk through what those are and why they're excited about silencing jeans, and maybe some new things that are going to happen that you'll reveal tomorrow >> sure, thanks, jim we have partnership with j&j for all our hepatitis b drug as well as three new targets they will bring to us that we will build new drugs around we also have a partnership with amgen for a cardiovascular drug we're developing they will commercialize that i think that what they saw was a really powerful technology that as you say can silence genes that cause disease and it is a hyper specific process whereby we can silence a single gene, and it is now a validated technology we know it works we know we can do it in a well tolerated manner and to the extent that we choose the right genes, we could have a substantial effect on people's lives. >> j&j, your deal there is humongous. it's 250 million more than $3 billion in milestone payments over time how does that work so our viewers know what to see. >> sure. so the deal is this.

it is for our hepatitis b drug that they have now moved into a phase 2 study. and it is also for three new targets they will bring to us. we view that as found value. these are gene targets they will bring to us, and we will develop drugs around them. they don't come from our pipeline so as we push those, or as they push those drugs through the clinic and into commercialization. that will pay us milestone payments and after commercialization, they will pay us royalties >> how about the amgen affiliation? >> very similar. that's for a drug against cardiovascular disease again, this is a drug we developed and they came in and saw that it should fit well with their portfolio and they will bring to it the clinic and then commercialize it >> so silencing a gene, can you silence more than one gene >> so that's an interesting question so the short answer until today really was not really. rna interference is a method of silencing a gene, and it can be used now therapeutically to

treat diseases we viewed two big possibilities with the technology that we wanted to advance. one was bringing rna interference outside the liver the field has gotten pretty got good at silencing genes within the liver there a lot of important medicines that can be developed by silencing liver-derived or liver express genes. also to your point, we viewed a big possibility of silencing more than one gene and tomorrow we'll talk about that a bit, but we have advanced that so now we can do two things that are quite important. a we can bring rnai. by the end of this year we'll have our first drug in the clinic that will be targeting solid tumors the middle of next year will be in the lungs with cystic fibrosis the end of the year will be in muscle cells we'll talk about the ability now to silence more than one gene, and that opens up a whole host of new diseases i think. >> i know cystic fibrosis is a really hard and horrible disease. how do you know that it might

work how do you pick these things these are complex diseases, and that's a disease that has been so difficult. >> it's a great question it's a broader question, and i'll tell you why. you know, biopharma is full of upside we all can look at diseases that are horrible, and there is a lot of value to be created if you can solve those diseases but you know what you got to be focused on is risk mitigation. we bathe in risk to the extent you can mitigate that risk, you can really build a more stable company. what we do, we focus really only on validated targets and what i mean by that, these are our proteins these are gene targets that we know if you turn that off, a good thing will happen, right? so we know that for cystic fibrosis, for the jean we're going after. it is called epithelial sodium gel. we know if that is turned off or turned down in cystic fibrosis patients, good things will happen so when we look at our risk profile, you've got two risks or two primary risks.

one is the target risk. >> right. >> and we can really walk away from that by focusing only on validated target the second of course is technology risk. you turn something off i think we've shown now in what, over 110 people that we can do that so we're excited about the technology we're excited about where we can take it next >> 110 people? really this isn't mice these are people. >> it's not mice we've been in 110 people, 160 some doses, and we haven't seen any so-called saes or serious adverse events and we've been able to consistently turn down these target genes it's really exciting times. >> that's sensational. well congratulations. >> thank you >> i can't wait to hear, get the big deck tomorrow. we'll be able to see because you have your big analyst day. that's chris anzalone, president and ceo of arrowhead pharmaceuticals. thank you to our viewers for bringing us to our attention "mad money" is back after the break.

"lightning round" is sponsored by td ameritrade ♪ >> it is time! it's time for the "lightning round. >> buy, buy, buy >> sell, sell, sell, sell, sell, sell [ buzzer ] and then the "lightning round" is over. are you ready, skee-daddy?

it's time for the "lightning round. i want to start with daniel in new york daniel >> caller: hi, how you, cramer. >> not bad how about you? >> caller: good. i want to know about smile direct club. is it a winner or is it a loser? >> daniel, my rother, i think the market has determined that it is a -- sell, sell, sell. >> it should never have come public in the first place. neil in ohio, neil >> caller: dr. cramer, a big ba-ba-boo-yah from the buckeye state. >> we love the buckeyes. they come on a lot we're trying figure out when we can get there to be able to do a show how can i help >> caller: yes i was on the action alerts call yesterday afternoon and wanted to say thank you for the sound advice you give to us club members. >> that's, that's the club i've been running for 18 years now and finally people are belonging. what's going on? >> caller: all right let's go to work my question is on zebra technologies we're about 13% off high how do you like it before the quarter and do you think this

zebra has room to run? >> i have to tell you that i was surprised at the lineup of honeywell that is similar to zebra was once again not great, and zebra keeps doing it great i got to tell you i am -- i am a believer i'm a believer i think that it's going to be able to demonstrate more growth than most people think and i say buy zebra technologies let's have them on again they're a delight. you know, i met them at the super bowl that's where i first saw them. let's go to sally in new york, sally? >> caller: boo-yah, jim. thanks for taking my call. >> of course >> caller: i just want to get your quick opinion about boston beer company >> you know i like it. i did that big piece on spiked seltzer. i mean, spiked seltzer, tastes great, less filling. this thing, the young people love this thing. and i'm in touch with them i'm in touch with young people all right. let's go to cybill in louisiana,

cybill >> caller: yes. >> sybil. >> caller: yes, sir. thank you so much for taking my call, mr. cramer. >> okay. >> caller: i'd like your opinion on cedar fair. >> cedar fair's symbol is fun, and that's what you have if you own the stock. it's been a winner >> buy, buy, buy >> and that, ladies and gentlemen, is the conclusion of the "lightning round"! [ buzzer ] >> the "lightning round" is sponsored by td ameritrade take control of your financial future with the new madmoney.cnbc.com. full episodes, analysis, even your own soundboard. ♪ hallelujah plus special access to "mad money" 101 with rules and techniques to break down the market for all investor. >> the red flag that makes me drop a stock immediately -- >> it's everything you need right when you need it

the new "mamadmoney.cnbc.com. ♪ ♪ ♪ ♪ whether your beauty routine is 3or 57,... make nature's bounty hair skin and nails step one. it's the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. nature's bounty, because you're better off healthy. the♪lexus es... ...every curve, every innovation, every feeling... a product of mastery. lease the 2019 es 350 for $379/month for 36 months. experience amazing at your lexus dealer.

...owning and running the biggesta small business is finding the right people. in hiring our first recruiter, we decided to post a job on linkedin. they had to have worked... ...at a recruiter firm and be bilingual. when we saw ana maria's profile... ...she had a ton of experience in hr. the interview went really well. and she seemed like someone who could really sell mckenzie to perspective employees. we found the best person to find the best person for us. post a job today at linkedin.com/grow

♪ nabaf is back, baby, and boy is it rocking the market but how you make sure these not as bad as feared quarters don't burn you with post earnings reactions that are just downright puzzling, you're reminded every single day now that diversification may be the only way to handle the pain -

>> the house of pain. >> and the gain. and that is why we play am i diversified. you give me your top five holdings i tell you if your portfolio is diversified enough people love this segment, so we keep doing it. this is my 18th year there you go all right. first we have a tweet. hey, congratulations to the guy who said i was at pueblo this weekend. first we have a tweet from @jeff underscore hill 99 who says fed ex pnc, itetsy, an splunk okay okay we've got -- i'm going to call it an online retailer. weave got a company that mines data we've got one of my absolute favorites as i told club members yesterday, cvs

we've got a bank that had a good number and fed ex that had a series of bad numbers. but starting to move in the transport. a transport, an internet retailer, we have got a health care company, a data miner and a bank you are right, sir, underscore sir, i am bullish on what you own. let's go to anne in indiana. anne >> caller: jim, thanks for taking my call. >> of course >> caller: you're going to be horrified. at what i'm about to tell you. my five stocks are nvidia, marvel, amazon, jp morgan, and abbott [ buzzer ] >> well, here we go. these are all club member stocks, and i thank you for being a member of actionalerts.com club. jp morgan best bank. never thought i would say that when i worked at goldman, but it's true. phenomenal quarter, jamie dimon. the more i think about it, the

more i realize that that's how he should approach us at cnbc. abbott labs turned out to be not as bad as feared drug company but really is devices. and nvidia happens to be a super chip that has artificial inference. amazon, king and marvell, which is the best 5 g play a 5 g play, a great bank, the king of retail and amazon web services too the best device company, and yes, the best technology chip company. and i'm going to bless it, even though the purists would say you can't have marvell and nvidia. this is 5g and this is gpu okay how's that hey, why don't we go to lawrence in texas lawrence >> caller: hey, jim. how are you? >> i am good how about you, lawrence? >> caller: i'm doing well, thank you. hey, i'm trying to find out if i'm diversified. >> okay.

>> caller: i have phillip morris, mcdonald's, apple, pfizer, and starbucks. >> ooh i find this senior growth portfolio to be very intriguing. yes. we've got phillip morris i'm not really a big fan of tobacco. somebody said i was a shill for tobacco and twitter, that person is a professional chowderhead. we've got apple, don't trade it. starbucks. some people worried about the hong kong issues will you give me a break mcdonald's, and a drug company pfizer i am going to have to make a choice here, and i am going to say that you should be in starbucks at 85, 86. we're going to add a diversified industrial, which is honeywell what a quarter today apple technology, pfizer drug. i do prefer merck, by the way, and then phillip morris. well, i don't want to say they're dubious because i've been so mean to big tobacco that i'm a shill.

that person is taking a permanent intellectual vacation and is in my twitter file. let's go the andy in kansas. andy >> caller: yo, jim. >> yo. >> caller: thanks. it's a pleasure to speak with you. >> same. >> caller: fly, eagles fly and i love the show. >> we're going down to dallas this sunday night and we either fly or -- well, never mind let's go >> caller: my five stocks are jones lasalle, starbucks, siriusxm, comcast and paypal >> hmm curious. okay jones lab. no one owns that stock that's a first time for us let my take a look at how that's doing. i like that stock. i like cbre. i like cbre more than them but you know what? okay, 11 times earnings. real estate, starbucks, we covered that one

that's obviously beverage and restaurant siriusxm, i was on this morning fantasy radio. paypal is payments and comcast is entertainment entertainment, sirius. let's change this out as the music plays and let's put in a health care company. let's do that abbott labs. their quarter was great. and we got, i don't know, what do you call it fast payments? entertainment, and real estate it will work i just wish that i had more time to parse that portfolio. make that change put in abbott, and i will be happy. and that, ladies and gentlemen, is our special edition of "am i diversifi diversified? thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown

to improve short-term memory. prevagen. healthier brain. better life.

why do the stocks of companies with bad earnings go up why, it's nabaf! i like to say there is always a bull market somewhere. i promise to try to find it for you right here on "mad money." i'm jim cramer we will see you tomorrow

narrator: it's been 10 years since "shark tank" ignited america's entrepreneurial spirit, and we're still blazing a trail for those who take their fate into their own hands. tonight, sara blakely, the founder of spanx and one of the wealthiest self-made women in the world, returns to the tank. i see so many similarities from my journey with you guys. both: thank you. you've made no money. that's very depressing. -oh. i feel like i'm at a wake. [ laughter ] both: oh, no! it's really starting to come down! when you're first starting a business, make it, sell it. we sold 20,000 units in four hours. -wow! -unbelievable. this is your moment. yes or no? -we'll make you proud. -aah! i can't see! i can't see! i actually think i'm growing hair on my chest. ♪