top, but i think with the trend continuing the way it is, really want to have concerns about dollar denominated debt. so, for that reason, i'm a seller of eem. >> all right, thank you so much for watching "fast." see you tomorrow on "squawk box." meti, dot goanmen' anywhere. "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 is always a bull market somewhere, and i promise to help you find it. "mad money" starts now. >> hey, i am cramer. welcome to "mad money." welcome to cramerica. now, my friends, i'm just here to try to help you make some money. my job is not just to entertain, but to educate and teach you so call me at 1-800- 743-cnbc. jim cramer. you want to know the single most useless thing you can do

in this business? oh, that is easy. the most useless thing you can do as an investor is to worry what everyone else is worrying about. the flipside of this is also true. there is no point getting excited about something that everyone else is eagerly anticipating. why? when the vast majority of investors agree something is going to happen, that thing is already priced into the stock market. the real economy moves at its own pace. for example, you have got to borrow money to manufacture goods and transport them and wait for the costs to come along and by them. the stock market does not have such limitations. stock stone travel at the speed of thought, but they come close. the economy is slowing or speeding up or flatlining. stocks start trading like that is already the case. usually, it takes some time to

build that kind of consensus, which is why you rarely see these moves happening instantaneously. you can be pretty darn confident that it is baked into the averages. this is some basic economics 101 stuff. now, i don't have a ton of use for economists as a professional on this show. you cannot take an ivory tower approach to this discipline. they have all sorts of models for how the world is supposed to work. but they rarely let the empirical facts get in the way of theory. at the data conflicts with the model, economists have a bad habit of throwing away the data and not the model. >> boo. >> however, as long as you keep that caveat in mind, for example, let's say somebody is -- we are going to get this together. the efficient markets hypothesis. this theory says at any given moment, stock prices already reflect all the relevant information that is out there. and when some new piece of

information comes out, stocks adjust. you will often hear purists citing this theory. whatever you know about a company should already be baked into a shareprice. as far as they are concerned, investigating the individual stocks is basically the same as gambling. if everything you could already know is possibly strut priced into the stock, then some random new piece of information nobody knows about. it has to be something totally unknown because if anyone did know, they would have act on it already. ergo, it would have been baked into the shareprice. the only thing that can move stocks are unknown unknowns. and if you are merely betting on unknown unknowns, you might as well be playing roulette. it is more fun. that is why advocates adore the efficient markets hypothesis. this theory tells them it is impossible for individual investors to beat the averages.

so if you want equities exposure, the only ways putting your money into a nice fund that mirrors the s&p 500. now, as anyone who watches the show regularly knows, i have no beef with index funds. i think the best way for the vast majority of people to invest in the market -- i have held that position since the year 2000 -- even if you got the time and inclination, you should still direct a big chunk of your avings if not the plurality into some cheap s&p 500 index fund. it is the safest way to give you exposure. it is perfect for your retirement accounts. it takes real work, which is why we try to help you if you join the cnbc investing club. but it is a relatively easy thing to be an index fund investor. you can gradually contribute overtime with every paycheck and as long as you believe the u.s. economy will keep growing, you can park that money into an index fund and maybe check on it once or twice a month.

you cannot possibly be the averages because of the efficient market hypothesis. stocks are always perfectly valued. you know what? that is just totally bogus. consistently beat the averages nearly every year on my own hedge fund. 24% compound annual return over 14 years versus 8% for the s&p. markets are not perfectly efficient. they are often irrational. that is a major reason why anyone can make money picking individual stocks. these anomalies are anywhere and they can be great for your portfolio. ironically, this corndog free market economics is a lot like communism. it makes a lot of sense in theory. makes a lot of sense in theory. not a lot of sense in life. such a boneheaded idea. even if the most extreme form of this theory is untrue, and it is not, we know for a fact

markets are all kinds of inefficient. it is still a very useful idea. the efficient markets hypothesis cannot help us but as a rough guideline it can lead us in the right direction. markets try to be efficient. the aspire efficiency. quarter stocks spike immediately. that kind of data can get taken very quickly when the federal reserve changes policy. we saw in late 2023, that is huge news and it takes longer to get reflected in the averages. baking that in can take months. even if the fed abruptly changes, like the end of 2018, rates will instantly sore but it can take days or weeks or even months for the averages to fully reflect the new normal because it takes time for portfolio managers to reposition. we are talking about huge stocks here. we do reach a new equilibrium so let me give you he mad

money version of the fficient markets hypothesis. when there is a widely held consensus you about something, anything, be it positive or negative, you have to assume that view is already being discounted by the stock market. so when everyone is feeling euphoric about the new stock market, temporary and mandated slowdown, hunkering down and fearing a bad earnings season. don't expect the stocks and get slammed. people are already anticipating a disappointment. in short, with all the talking heads in media journalism, managers are telling you to be afraid of the same thing. that might be the one thing you don't actually need to be worried about. let everyone else worry for you. when everyone else believes something is going to happen means wall street is already treating it as reality. yet it is so easy to fall prey to groupthink. a communicable disease, frankly. when you see all sorts of

experts coming on television and saying the same thing, when the newspapers print similar stories, it is only natural to assume it must be true. and you know what? very often it is true, but that does not mean it is going to move stock prices. by the time we get any kind of real consensus, it is probably over. you missed it. don't tear your hair out writing about the same thing as everybody else. instead, worry about the things everybody else does not seem to care about because the real threat is the one you do not see coming. let's go to mary and idaho. mary? >> hi, jim. nice to talk you again. i have a comment and a question for you. >> okay. >> the comment is regarding when you were talking about the conventional stupidity. >> yes. >> i sent you an email on that, and i hope you will have an opportunity to read it. i thought you would enjoy it. >> thank you.

>> the question -- the question is, what percent of increase in the stock should a person consider taking some or all of their profit, either to reinvest immediately or to just hold back as cash to buy something down the road? >> okay. let's take this from the point of view that you need to sell something in order to be able to buy something. what i like to do, and we talk about this at the cnbc investing club, if there are fundamental differences from what happened when i bought it -- in other words, let's say i bought a stock and subsequently it has two bad quarters. that is what i want to sell. missed a couple of quarters. then i boot that to buy something i think is better. there will be moments when a third quarter turns out to be good and i didn't get it.

what i have done is create a level of discipline. that is what you should do, mary. let's go to dave in colorado. dave? >> hi, jim. >> how are you doing? >> boo yah. long time listener. first-time caller. my mom got me into investing a long time ago. you are carrying on their legacy. >> that is how i got involved, too. so we are in the same boat. let's go to work . >> i am calling on behalf of my girlfriend who is in her early 60s. she retired with a state pension. investment firm managing 600,000 stocks. they are charging her 1% per year. >> okay. >> haven't kept pace with the s&p 500 and have actually avoided the growth stocks completely. she wants to manage her money on her own. two questions. how should she construct a

portfolio of her wn and over what timeframe should she make the change? >> okay. i would put two thirds of it in a s&p index fund. then one third of its structure around a portfolio of say six to 10 stocks in which two to three can be overweighted and large. mostly mag seven. cnbc investing club can help you pick those 10. pick 30 then take the 10 you are most excited about and no more 1%. you are now free to move. well, she is. and tell her congratulations for having saved up that much money. that is terrific. the most useless thing you can do as an investors to worry about what everyone else is right about. remember, the real threat is the one you did not see coming. i am giving you all my best practices for investing. sometimes you need to take a step back and evaluate not just what you are investing in but how. so if you want to better your

investing skills, i say yes, indeed, stick with cramer. >> don't miss a second "mad money." follow @jimcramer on x. send jim an email to mad money at cnbc.com or give us a call at 1- 800-743-cnbc. miss something? had to mad money at cnbc.com. m] a unlock your ambitions? oh yeah. consolidate bad debt and save money for your next goal. take a swing at your kitchen reno... meant that literally. or design your actual dream wedding. all your ambitions. all in one app. sofi personal loans. low fixed rates. borrow up to 100 k. no fees required. go to sofi.com to view your rate. sofi. get your money right.

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>> like i told you before the break, when you pack into a crowded trade, you are laying with fire. that usually means the easy money has already been made. that does not mean you cannot profit from something obvious, but when you're late to the party you will have lower returns and higher risks. that is just the nature of the

beast. no one is putting a gun to your head. in fact, you don't even have to think about spotting tops and bottoms if you don't want o. there are lots of different ways to invest. some of them take less work than others. for example, you could try to call every gyration for stocks poised from the bottom and selling them when they look toppling. you could take a large holding and lighten up when it gets overextended to the upside and buyback when the stock sells off. you can wait for the perfect moment when the whole market sells automatically giving you a chance to pick up your favorite stocks for much less than they are birth. my favorite. back at my old hedge fund, i love doing this stuff. if you have the inclination of the rights resources, it is a perfect way to make money. but if you have a full-time job, this approach is just nuts. that is funny. regular people who work for a

living do not have time to stare at the tape all day. even if you work the night shift, it is just not a good use of your precious free time. more importantly, trading this actively is just not worth the agitation. that is why i come here every night to do the show. i focus on the market like a hawk. i let you go to work and have a personal life. that is why i walk you through all these things when you join the cnbc investing club, which you know i really want you to do. so how should you invest in the market if you're not prepared to devote your entire life to watching stocks? for starters, let me say once again that index funds are a wonderful thing. if at any point if what i am describing sounds too daunting to you or too time-consuming please do not hesitate to say individual stocks are not for me and put most of your mad money, your cash investment that is not part of your retirement portfolio, into an etf. i say this before the brake,

too. being a savvy index fund investor is relatively easily. if you manage your homework well, i think you can beat the s&p 500 with a diversified group of individual stocks. but not everybody has that type of time. not everyone has that type of temperament. not everyone is comfortable taking on higher risks to chase that return. what suits you? so keep that index fund often in your back pocket. if you really do want to try to profit from individual stocks, let's talk about how you can do that without the stock market taking control of your life. the best is enemy of the good. there is no point in trying to buy ourselves stocks at the perfect moment. even making the attempt will drive you nuts. you need to accept results that are good enough instead of trying to chase perfection.

for example, if a stock you like it scampered down from $50- $60, and you pull the trigger? then it rebounds to $60. please do not kick yourself for making a mistake. you do not screw up. yeah. you could have made a couple extra points if your timing had been flawless, but a win is a win. regular viewers know i do not believe in the concept of buy and hold. i believe in the concept of buy and homework. if something is terribly wrong, you may have to bail. it is a good idea to buy stock slowly on the way down and sell them actively on the way out. do not be too active though. the last thing you need is to be flitting in and out of stocks with every gyration of the market. you think you can time things perfectly? but most things ocher in concentrated bursts, so you are liable to miss them if you are on the sidelines.

again, if you have the time and inclination to trade, that is great. however, most people don't. you need to be willing to sit tight with the stocks you believe in. there will be selloffs. there will be rotations out of one group and into another. there will be crazy action on a week to week and even day to day basis. you do not have to constantly adjust your holdings based on these moves. you should not own anything that you do not believe in. you should be willing to stick with it when the backup gets tough. ideally, be able to trade in and out. i told you, the best is the enemy of the good. in reality, when everyone is panicking over the latest crisis, you will be tempted to panic, too. get out now. you might even avoid a substantial decline by bailing on the whole stockmarket. sooner or later you will need to step back in. high and by stocks back at a lower level. unfortunately, it is hard to nail the timing here. i don't want you to do the

impossible. witness when the market bottoms like october of 2023. peaked and started heading lower. something almost nobody saw coming. what is the solution? if you don't want to give yourself a panic attack every day, do the homework so you know what you on. when the stocks are higher, ring the register. after 20%, you need to take something off the table. when your stocks get hit, ut that cash to work buying more shares at lower prices. but you don't have to nail every short-term top and bottom. let me give you the bottom line here. to trade or not to trade? that is the question. it is nobler in the mind to suffer the slings and arrows of outrageous fortune. you do not need to be perfect in managing your money. you just need to be good enough. you do not need to anticipate every little gyration in the market. take a page from jimmy chill

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>> the stock market talks to me. and i mean that figuratively, not literally. contrary to what you may have read on x, i do not hear voices. i do think my left molar crown does play music. i am constantly listening to the tape, not music to get a read on what money investors are up to so i need to segment the signal from the melodies. there might be monster moves in individual stocks. some are a lot more eaningful than others. so when you see the stock prices getting killed, for example the natural conclusion to draw is something must be wrong with the cloud. when a really low group

bounces, it is not much of a stretch to assume that the pain must be over. >> the house of pain. >> some of these moves are signal and some are noise. signal means something. it means the noise will probably keep moving in the same direction. noise, on the other hand, is noise. to borrow my favorite line from the, struts on the stage and then is heard no more. it is a tale told by an injury it full of sound and fury. in short, while signal carries a message, there is o real take away noise. and otherwise, shakespeare would have been a dynamite investor. so how do you tell when a major stock swing hurls for something longer? you need to understand that we get major single day advances and declines with no real significance all the time. stocks can get ahead of themselves riling too far, too fast before selling off. try to measure it but they also

later. where the williams percentage are also later, the legendary larry williams we talk about. when something is bought, everyone who wanted it at a given level has already purchased it. even the highest company can have a over purchased stock and you almost always get a pullback. but this does not tell you anything. take a breather. digest. at the same time, even bad stocks can rally, and for similar reasons. you tend to get a nice oversold bounce. once again, this is the sort of rally that does not convey information. it is noise. it can go right back down once it works off the bounce. i bring this up because when you see dramatic swings in individual stocks, your mind will try to draw connections to the fundamentals. how the underlying company is

actually doing. sometimes that connection genuinely exists. other times, noise, not a signal. those who want to know more about this can go back to the canon on stock markets. and that is confessions of a street addict. how easy it is to see a stock move a point and convince herself something is happening underneath. a really funny part of the block. in a way, that might be totally unrelated to the actual company. pretty funny. hey, by the way, this is something we are constantly walking through what the cnbc investing club. it is not just the technicals. there are plenty of reasons why a stock might explode higher or meltdown. sometimes the market makes a mistake in the mistake it's held back. maybe people misinterpret a good quarter as a bad one. something that happens quite often during earnings season because so many things at once. maybe money managers are dumping stocks purely to raise

money so they can buy another. yeah. one that is hotter. so what kind of action carries real significance? how do you know when they first big move is shadowing something down the line? all right. there is a lot of signal that is pretty obvious. a company reports a book and a stock roars. obvious. and analyst cost estimates and the stock plummets. obvious. that is just business as usual. a company catches and analyst downgrade and that stock goes up. my experience when a stock is lower on bad news, it is putting in a bottom and is ready to rocket higher. fantastic folder? the stock it slammed? that is the kind of signal i am looking for, too. it means wall street believe the company is looking at its last great quarter. when your stock falls on positive news, well, you may be

looking at the top. for the most part though you cannot decipher hidden messages in the way stocks are traded. you should not even try. it is important to know what is working and whatnot working. completely guided by what is in or out of style in the wall street fashion show. otherwise, you end up owning stocks just because they are going higher, and that is a terrible place to be because you will not know what to do with them once they inevitably start coming down. here the bottom line. pick from the fundamentals of the underlying company. do not put too much significance in the day to day titrations. a big move in an individual stock. it is telling you something you already know or it is just noise that means nothing. let's take calls. let's go to howard, new york. howard? >> this is how we from the bronx. first-time caller and club member. >> excellent. what is going on?

>> my grandson looks at my portfolio because he knows i am always watching "mad money" every day. thanks to your conference calls and alerts, he sees anywhere from 60 to 200% for some of my stocks. my grandson, he wants to be an investor, too. questions threefold. when do i start to trim? how much should i trim? and more importantly because i like these stocks so much and i believe in them, when can i get back in? >> these are really great questions and their fundamental because we believe in discipline and conviction. discipline must always trump conviction. 20% up between 5% and 10% and another 20%. same thing. if we really want to be able to stay in shape, we must buy some back. that is how we play it, otherwise we let it run. holy cow. ned in ohio.

ned? >> it is good to talk you today, sir. how are you? >> i am good. how can i help you? >> a couple months ago i was listening to warren buffett and you talked about five growth rate companies that eventually forge their own anchor. the company keeps expanding and its shares kept rising. would you explain that to me and is nvidia an example of that? >> okay. nvidia is a really great example. forward earnings or the estimates, it always looks expensive. than it so far trumps those estimates. it was selling at a remarkably low price. that has been the secret to nvidia literally since 2012. and credible. it just keeps doing that. please, do not put too much significant in day-to-day gyrations on the stock shareprice.

you need to know when it is signal and it is all sound and noise signifying nothing. pitfalls many investors think of as an honest opportunity. why you should be more cautious than you think. then investing partner jeff marks. so stay with cramer. ehh... hmm. oh, that's very, uh...

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>> all night, i have been warning you about the dangers of being a follower. there is a very good chance it won't play out as expected. that is what we call priced in. that is where you need to be extra wary of the ipo cycle. we have seen the pattern over and over again. at first many of them explode higher but they are flooding the market with new stock supply and that supply drives us down. i said it a million times. the stock market is like any other market. it is all about supply and demand. any other supply and the prices are going to be lower. then when the deals start attracting less interest, the exuberance turns into hostility and then the whole market, not just the ipos, tend to get

slammed. we have seen this so many times in 2020 and 2021. as many people invested their government stimulus checks on the hottest looking stocks in the market, get this, we had 400 traditional ipos, which were originally meant to be blank check companies that would make over time. startups began to use stock mergers as a way to evade the strict regulations that the fec committed. initially, there were some exciting ones that caught fire. for example, zoom video. this one came publicn 2019 and then stored to the stratosphere in 2020, at least during the covid year. you get deals that get people excited. 2020, we also had a ton of electric vehicle and charging station. these stocks were unstoppable. most of that was because this was a period of high risk speculation where people were

willing to look at anything with the right buzzwords. the benefit of the doubt. reminiscent of the.com era in the late '90s, the market was flooded with excess supply. i am going to give you a really concrete example. it is called quantum space, which in retrospect was basically a science experiment looking to develop better batteries for electric vehicles. anyone can develop quickly and make a killing. but quantum scape was a long way from having anything actually commercialized that they could sell. even four years later, these guys still do not have any meaningful revenue. back in 2020 and 2021, wall street was still giving benefit of the doubt to anything connected to electric vehicles. you remember, you have to be really skeptical. when that merger was announced,

saw the stock more than double in just two trading sessions. during this initial trading parade of maximum height -- i know this is going to be crazy -- then we started seeing short- sellers coming out of the woodwork arguing it was a scam. lost interest in companies with zero profitability, like quantum scape. no revenue. then the stock got obliterated by may 2022. bounce above those levels at times. and, look, quantumscape is hardly alone. i don't mean to pick on it. all sorts during '20 and '21. canoe. lion electric. lightning motors. faraday future intelligent electric. all saw their stocks punched. many, like nicola had some

fraudulence. their founder and ceo was sentenced to prison. again, we had roughly 600 companies come public trust in '21 and by the second half of the year, many of these deals were blowing up in your face because we had newly minted stocks. raising interest rates in november of 2021, remember that? spent the entirety of 2022 getting eviscerated. that is why came out here to warn you about the dangers of ipo mania like 2021. there was one sure way to flood a bull market and that is by flooding it with lots of supply. i also warn you that eventually the ipo bubble would burst you might be left. hundreds of really low quality companies came public in the 2000's arrow went bankrupt. 2021 was just as bad. in fact, you could argue it was worse. certainly overconfident long-

term forecasts that the fec would never allow in a traditional ipo. before the managers get excited about putting a lot of money work into ipos, they often need to raise that money by selling something else. 2021 was a little different thanks to the feds zero interest policy and all the stimulus checks that people got from the government. that is what happens. you sell it and buy it. the bulk of the new money that goes into the market goes into index funds, and they cannot participate in ipos. the management funds in the aggregate do not have enough cash coming in. they get in on a bunch of big deals without selling something else. there is the mechanics of it. next time we have a big wave of initial public offerings, i need you to remember that it pays to be cautious when the ipos are coming hot and hattie. the bottom line for the stock market, as a few massively successful ipos, you have got

to be careful when we get a whole wave of new issues. the ipo cycle tends to start off strong and then we get a lot of euphoria and it burns out. please, just keep in mind that concept the next time you get excited about a bunch of red- hot deals. and "mad money" is back in a minute .

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>> when you are picking stocks, you need to be very careful about doing the right thing for the wrong reasons. this happens more often than you expect. let's say you find a good company. good dividend. you by that company stock and it goes up. it is only natural to conclude that this stock is rallying for all the reasons you think in the first place. sometimes a win is a win. sometimes it is more complicated than that. if it moves up and down you will probably be more confused when it goes in the opposite direction. and when we are confused, we make really lousy decisions. maybe you want to buy procter &

gamble. lots of logical reasons to like them. like i told you earlier, logic is rarely what drives the stock market on a day-to-day basis. let's follow through here. suppose you have picked up some procter & gamble because you like the dividend or you think plastic and fuel costs are going down. so you buy the stock and then it explodes hard. what is next? well, you have to ask yourself why is it rallying. it is easy to tell yourself i nailed it. credit deserved. that means you were right. why would you second guess yourself when you are right? well, the answer is simple because maybe you were just lucky. as i told you before, it is better to be lucky than good. but in their way, you need to be able to tell he difference. you should ask yourself if you are right or you simply happened to be in the right

place at the right time. what do i mean? rotation. rotation. rotation. there are times stocks were higher for things that have nothing to do with the underlying companies. a recession stock. because it tends to hold up during a slow economy, we get roars. be if you buy the stocks because you believe in the business, you have still got a win. the bank cannot tell you that they cannot accept that money because they don't accept it, but you do not want to get caught with your pants down. really, it was benefiting from rotation. the whole consumer package. you know? this is what i meant earlier about filtering out the signal from the noise. and it is hard to do. why? because of something called confirmation bias. when you have a new thesis and new information seems to prove your thesis correct, you seem to think you were right all along. maybe you are right.

people are right about stocks every day. maybe it was just a coincidence and you should ring the register. the residential solar stock soared in 2020 and 2021. running into 2022. even when most were getting pulverize. if you owned it, maybe you thought you were winning because people were embracing renewable energy but in 2023 the residential solar stocks got obliterated. why? you know it had nothing to do with the popularity of renewable energy and it cannot be stopped by generous federal subsidies? instead, it turned out people cannot afford residential affordable without money which means they were not billed on solar but on financing and once people realized elevated rates for quite some time, the solar rights got crushed. and enphase was roaring in 2020 and 2021 when people could borrow money for next to

nothing. so let me give you the bottom line on this. it is very helpful to understand why a stock you like was going up and down. if you have a win, do not assume you will easily be right. you were merely in the right place at the right time. and please proceed with caution. stick with cramer. business. it's not a nine-to-five proposition. it's all day and into the night.

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appreciate it so much. thank you. doors are new beginnings. -surprise! -surprise! your dedicated fidelity advisor can help you open those doors. for you, mama. through personalized money management that can evolve with new chapters. and they can proactively view your entire portfolio. with an eye on taxes and the impact of risk. so you can enjoy moments together. because doors were meant to be opened.

>> tonight, i have talked to you all about economics 101. my viewers are smart, which is my favorite part of the show. i answer questions directly from you. tonight, i am bringing in jeff marks to answer some of your questions. do not get a swelled head. you

do a pretty great job. keep your head to e send get to the door here. for those of you that are in the club, jeff when he no introduction. jeff's insight in our back and forth are really what we are thinking is a requirement for being part of the investment club. thank you very much. first off, we have a question from jimmy who asks how can we identify the best companies within an industry? now, i have a way i like to do. i like to see who has the biggest growth margins. who can make the most money. the gross margin. >> yeah. that is a great way to do it. you can also look at who is calling the fastest revenues. another way is read the conference calls of the companies and their peers and the customers. that will give you a good tell about who is best and who has the best products and who is doing the best by their customers. >> that is a really good point

because i find that in the conference call you get a sense of whether the analysts hated it or liked it. whether they are in awe or they think it is something optimal. great point with the conference calls. next up, we have a question from ian in pennsylvania. you stressed the importance of being diversified. is there ever a point when you can have too many stocks to keep up with the homework while keeping diversified? pop, my father, used to have 40- 50 stocks. jimmy, i work a couple hours a day and then spend time looking at the market. now, he had time on his hands. most people don't. that is why i say try to keep it to 10. >> yeah. i think the benefits of diversification seem to diminish at a certain point if you keep adding and adding and

adding stocks. >> pick the ones you like. use your power of observation and curiosity. >> and as you do more of the homework, that is when you can start adding more. next up, we have a question from dean, also from pennsylvania. total stock market index fund for purchase. both seem to have very similar expects ratios and historical returns. what is the primary difference between the two? i want you , jim, the total stock market return of vanguard. why did he want me to do it? he said over the long-term, you will get a longer performance and end up picking some really good young growth stocks. >> that is exactly the deference. s&p 500. that will be more of the large caps. you will have the mid-caps. some of the smaller comps as well. there will not be much of a difference between the two.

>> right. but i ended up doing it because the father needed his fund. jack said jim, this total talk market return will beat it. anyway, i am just doing it out of homage to the late john bangle who was an amazing guy. what are your stages in "cutting bait"? up another 20%. we have been very, let's say, diligent about letting our great stocks run and cutting off the ones that aren't. that is the key thing. electric gray stocks run. you can minimize your losses. great cutting. >> you always have to remember your original thesis when it is not playing out as expected, that is when you have to make an adjustment and i know in some of those cases we often learned that our first sale is our best sale. >> and i think there is nothing

wrong with admitting that you have a loss. as we were talking the other day with roger federer, you just win more than you lose. that is what you need to do. you know what? we are going to have to save the rest of the questions for next time. i like to say this always. i promised you find it just be one "mad money." narrator: ...jason blum, the king of horror and the founder of game-changing production company blumhouse, returns to the tank. i can't imagine why he isn't the perfect partner. think hard about it. together: aah! you need me more than i need you. alright. if you want to make a complicated package, you just brought one to the shark tank. you have rocket fuel sitting at the end of this panel. the fact that i'm up here pitching you this is an absolute miracle. kevin, what's the score? it's totally rigged. what's the score? and i'm litigating! wow. ♪♪ narrator: first in the tank is a business making a killing.