fell for the fifth straight day, the s&p losing a half percent and the nasdaq giving up three-quarters of a percent. i realize quotes from a tale of two cities have become cliched but in this stock market we have an epic of belief and epic of incredulity. we had a spring of hardship and now we're facing with a winter of despair. >> the house of pain! >> shortfalls, fiscal cliffs, chinese hard landings and european death rattles. each day the best and worst play out. though the overall averages have been in decline for what seems like an eternity, there's enough best of times action we don't want to get completely clocked. money can still be made here by focusing on the market's terrific domestic neighborhoods while skirting the international slums. for example, it's the best of times for the entire sectors like the utilities. oh, man, we have a good one

later in the show, for the real estate investment trusts, for the telephone companies and many of the retailers. when the market opened drenched in red today, as it seems to every day, who stood out as stalwarts? at&tverizon, walmart. are they that hard to find? in other words, the usual bullish suspects! the companies that are defended by our nation's borders. i'm talking about the america fisters. they're up 20% on the year. not from gigantic corporations. who else do we believe in during this age of slowdown? who else is giving you a season of light? how about the food and drug companies, the soda companies, the invested coffee shops. yes, that most american of industries, big tobacco. >> boo! >> yep, if you can smoke it, you can drink it, you can wash yourself with it or take it once each morning, then it's not just the spring but it's the summer of hope. that's how johnson & johnson turning itself into a recall foundry. it's why merck a company with

the hope of new yost yo osteoporosis drug can jump 170 on good news. sap a german consulting and software company, 168 on fabulous growth on information technology spending while a similar company based in india can crater $4.87 or 1% citing information technology weakness. dunkin' donutss has been a rock star while starbucks wallows as growth gets crimped by a european slow down. but still like them both. the worst of times. whole areas, wastelands, the industrials. sure, we can say the problem is geographic.

that's too clip. the issue in the dark geographies is a lack of demand for the products offered. it's demand. it's despair about demand. all the customers and potential customers aren't buying. awareness that many cases didn't even exist say as recently as two months ago. where is it most pronounced? let's take them down. we see the slowdown this demand for oil. something once considered a staple. so the oils and all their acute treements face what seem to be an endless drain. notebooks and desktops sales have been crushed, only some of which can be blamed on apple. the luxury shopper seems to be balky. even the buyers of blue jeans aren't buying as levi's said. how about companies that sell into the enterprise? huge corporation that is have

voracious consumers? flagging demand for companies that make tellico equipment, dell, hewlett-packard. dow chemical, caterpillar, alcoa, ford, general motors, they can bounce, some did today, but others like marriott, terrific hotel chain, dropped $2.45. as international hotel room profits fell more than expected. all those companies have had the foresight to expand beyond our borders because of our own economic maturation and stagnation -- >> house of pleasure. >> they're now being punished for that international emphasis. >> the house of pain. >> tomorrow we'll begin to found out whether that's demand for money. yeah. will there be pin action all over the place? we're going to be hearing from a couple large banks, going to spread the news to the rest. part of the largest sector out there. if they tell us there's flagging demand for money, whether it be from potential buyers of new homes or cars or for

corporations that want to expand, particularly domestically, then we're going to get hit again. it will be seven straight days down. we have to see some demand for credit because without it, we weren't going to get the much-needed growth in employment that can turn the worst of times into better once. why this exploitation of some old hack british journalists turn book writer, someone who will ultimately go down as a second rate author expired to, say, stephen king? why the fixation on this tale of two cities? shaw shank redemption? >> simple because too many commentators think that it's only the worst of times. and that's not wisdom. it's rank foolishness. the endless despair simply doesn't jive with what i see out there. just because there's some despair every day that doesn't mean you can't snare tom at&t or walmart, particularly on

weakness. i am not asking you suspend judgment. i'm saying it's not a tale of one dark city you have to avoid like the plague. you have to learn to discern. learn to discern. you can trade the industrials for a bounce, gain the financials. you can rent google or oracle but invest in a general mills or hershey. it is a keynesian market. there's positives and meg tiffs. that's why the whole market doesn't gel pulverized every day because that's what so many people expect. we don't have everything before us and we don't have nothing before us. we have a little bit of both. as long as you understand this dynamic you can triumph even if the hope of spring morphs into a winter of despair. becky. >> a major boo-yah from doylestown pa. >> what's up with chevron?

will it rebound in the short term, cbx. >> i think chevron is terrific. thaet they had a great report last night. i think chevron is the best major oil company in the company right now. let's go to charlie in texas. charlie! >> caller: hello, mr. cramer. a big texas boo-yah to you. >> i'm going to send that right back to you. >> caller: i am employee of tyson foods. i put 10% of my income in their stock purchase then. they contribute another 25%. i can put it into something else, like cell gene or harley-davidson, but i'm wonder if i should after that downgrade. i'd like to know what would you do if you were the ceo of tyson foods. >> first of all, you're kind of doubling down. you already work there, you get a paycheck, i don't want you to put more money in that. i respect the fact you have 10%,

that's not bad. but tyson is a company that's a commodity company and they are going to have to reline on the high price of corn, of the different crops, and i got to tell you, i think corn is not done going up. i think it goes higher. i got separate reports on my own. i say be careful. if i was tyson, it's the business you've chosen. there's not much you can do other than ride the wave. josh in new jersey. josh? >> caller: jimbo, boo-yah from new jersey. >> what's shaking there, partner? >> caller: well, i just got a question about johnson & johnson. there was some kind of recall. i'm very long on it and i was just wondering what your thoughts were, whether or not i should buy some more? >> yes. the answer is definitively yes. a stock that does not go down and at one point was up after reuters story saying there's going to be billions and billions of dollars lost because of another recall, that's a stock i would own. it is imnie immunized. let's go to ryan in new york.

>> caller: big boo-yah here. wanted to know your thoughts on genworth financial. >> they do have my life insurance policy. second, they'll pay, i believe. i don't want them paying. kind of the -- tind of a terminus point for the show. i believe that they are just okay. if you want insurance, you got to go aig. remember, he stood here and sat here and said a lot of good stuff. that's the way you go a aig. look, it may be the worst of times, but here is the thing, it's also the best of times. contrary to popular belief. i'm here to help you understand this dynamic and be able to help you tell the difference between the winners and losers. do you know what i say? i say stick with cramer. "mad money" will be right back.

coming up, flip the switch. this mega utility is creating intriguing headlines after a shocking change at the top. but could this debacle be your opportunity to juice up your portfolio? cramer is seeing if it's time to cash in on the controversy. and later shark bait. the street thought this health care predator was priped to sink its teeth into a hot growth trend, but it took a dive after horrific earnings miss. cramer is inspecting the waters to find out how this got this one so wrong. plus, domestic partner? a slowdown in china, fears in europe still top of mind. need a place to take cover? tonight cramer is on the hunt for homegrown profit potential, and he's found a candidate in commercial real estate. stick around for his exclusive

with the chairman of american realty capital trust. all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. send jim an e-mail to madmoney@cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. ♪ i dare you to dare me what's today's dare? erase the damage of 100 blow-drys [ female announcer ] with daily moisture renewal from pantene. the pro-v system nourishes to lock in moisture erasing the damage of 100 blow drys for a silky, soft touch. think only salon brands can do that? i took the dare. will you?

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it's embroiled in some sort of bizarre scandal, like duke energy? a gigantic utility that experienced a corporate coup just last week. if you haven't been paying attention, last tuesday duke announced the completion of its $32 billion merger. in a deal that creates the largest electric utility in the country. but there was some incredible machiavellian maneuvering at the last minute. william johnson, the chairman and ceo of prove gres, the guy everybody had been told would take over as ceo of the combined entity was knifed in the back! metaphorically speaking. and given the boot. instead jim rogers, the chairman and ceo of the old duke energy who was supposed to be chairman of the new duke will now be both the chairman and ceo. it's not the munich beer hall push of '23, unlike the leaders, rogers was successful and doesn't share the genocidal tendencies. it's not some piddly human resource issue.

a former member of progress energy's board of directors called the move, quote, the most blatant example of corporate deceit i have witnessed during a long career on wall street. and added one of the greatest corporate hijackings in u.s. business history. this is lousy corporate governance. it has real consequences. standard & poors has said it might cut duke's credit rating. the north carolina utilities commission has started an investigation into the move, and north carolina's attorney general is looking into whether consumers were misled about the merger. so what does this sordid tale mean for the stock? i am outraged by what happened here. it's horrendous, a total tragedy. an example of the worst governance i have seen. we want the bad guys punished, but, and this is a very big but, i still like the stock, and i

think duke energy is worth owning right now despite all the scandal because in this market domestic security of the weakest kind is better than the strongest international foray. that's the most important theme in the market right now. we see with retail, target, walmart, all incredible domestic stocks. we see the real estate investment trust, the housing companies. verizon and at&t, they're all american. we love the stocks in these companies because we don't have to worry about the break up of the eurozone or the slow down in china or the anger of the coal miners in spain. i had to be careful when i reach for the -- put that in the sheath. when it comes to businesses that are all domestic, it doesn't get any better than utilities. duke energy is really an issue of a not so hot house in a fantastic neighborhood. the fact is a miserable house or

even a fixer upper or even one where the general contractor might be unsteady in a good neighborhood is better than the best house in a bad neighborhood like tech or industrials that work so hard to go international. when you have a worldwide economic slowdown, utilities will outperform and duke is the biggest utility in the united states. there's more to this than the macro. the way i see it while the corporate governance issue that is cropped up last week don't exactly inspire confidence, the fact is utilities pretty much run themselves. the utility business, this isn't like a retailer where the guy at the top can have an enormous impact on how the company does? do i care if mr. rogers has an eye for lek tris i had the way mickey drexler has an eye for clothing? of course not. there's no intellectual fire power involved in running a utility. i don't even know if mr. rogers has a facebook page, no the that i want to go on it. or if he has a smartphone or a dumb one. i don't care. doesn't matter. and while i don't like skulduggery, i'm perfectly happy

with rogers as ceo because he's shown himself to be an excellent manager. ever since he took the helm in 2006, duke energy has given you an 88% return. let's get this straight, i don't want to be in the board room with him. it's tougher than being with doald tromp. i don't want to be his partner but i don't mind him running monopoly that i can own shares in. this is a nice consistent business that gives you a glorious 4.6% dividend yield. much better than treasury bonds even without accounting for the favorable tax treatment dividends. duke can raise its payout and they have done that every year since 2007. everybody seems to be missing the forest for the trees when it comes to the company's game-changing merger with progress. duke's down over three points or

4.6%. that's a huge decline for a steady utility like this one. but the real story here isn't about jim roge irs stealing william johnson's job. it's about a massive merger that can generate enormous cost savings. it's a move designed to save the company between 5% to 7% of its nonfuel operating expenses. the new duke will be able to reduce its head count via voluntary severance plans and, of course, the company can eliminate du plik ka tiff corporate functions. i also have to believe that the combined company will have an easier time dealing with epa regulation. we know mergers like this one have been a good way to make money because we've seen it play out before. back on october 10th of -- october of 2010, northeast utility announced it was buying n star and the stock has given you a 34% dividends. how about first energy when they were buying allegheny np since

then the stock has given you 39% difficult pends. i bet duke will give you the same kind of outperformance. that's not just moral indignation. that's right, profits are the real take away. here is the bottom line, yes, we're outraged by the long knives at duke energy, including the massive $44 million payout to johnson for his 15 minutes of ceo-ness, but, no, that's not a reason to sell the stock. don't let the scandal turn you off to a utility with a terrific yield and domestic security that should outperform. in this environment a utility like duke is still better than the vast majority of nondomestic stocks out there. the house, eh. the neighborhood? killer! stay with cramer. coming up, shark bait. the street thought this health care predator was primed to sink its teeth into a hot growth trend, but it took a dive after

a horrific earnings miss. kram serer is inspecting the waters to find out how they got this one so wrong and protecting from you what else could be [ male announcer ] this is anna, her long day teaching the perfect swing

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lately, scary shark stories have been dominating the headlines. everything from a great white chasing a kayak off cape cod to a woman in south carolina who got her catch stolen by a bigger

monster, but tonight i have one much scarier. there's blood in the water. listen up! you should never take your cue from the weakest player in an industry. that's true whether you're talking about food or retail or machinery or even robots. yes! robots! and, no, i'm not warning you to avoid investing in cyber dine, the fictional company in the terminator movies. i'm talking about maco surgical versus intuitive surgical. two very different high-tech medical equipment companies. best of breed player in this business. but lately it's stock has been slammed by troubles at mako. i'm here to tell you that this doesn't make any sense. bad news for mako is not necessarily bad news for

intuitive surgical. on monday night mako came out and cut its four-year guidance. they expect to sell fewer surgical machines than previously projected. the result, the next day moko's stock fell more than 10 points, 45% of its value. it shaved 20 points off intuitive surgical's price, although from a much higher $551 basis. here is the thing though. mako's problems do not have anything to do with intuitive surgical. they were easy to see coming. we saw them coming on requesting mad money" a month and a half ago. the issue here is mako has become a turbo charged growth stock, but its growth seems to be slowing. and to make matters worse, the people running things, they've done a terrible job of managing expectations. that's what tuesday's

shellacking is all about. it's why i've been telling you to stay the heck away from this stock. on may 7th mako reported a hideous quarter, a stunningly horrible quarter. >> house of pain. and they lost value. >> revenues came in later than expected and it sold just six of its real surgical systems when the street was looking for them to sell nine. the number of procedures performed was up only slightly versus the previous quarter. that's a nasty surprise. given that these companies operate with what's known as a razor razor blade business model, first they make money selling hospitals the machines and then they make real money selling dispoable parts. you can't afford to miss numbers like that and i can't afford to slow down. these stocks are like sharks, if they stop moving, they die. so it's no wonder that the aptly named mako got slaughtered in may.

and when a company screws up this badly, there's every chance they will stumble again. on may 24th i told you to avoid mako surgical for at least a quarter. i put it in the penalty box because i was worried we hadn't seen the full extent of the damage. at the same time though the analysts who cover mako were jumping all over themselves to recommend it. >> buy, buy, buy. >> piper jaffray told you it was a buy. william blair upgraded it to a buy saying the company was doing better. these analysts stuck their necks out on mako and sure enough they got beheaded this monday when the company dramatically slashed its full-year guidance and sent the stock down 43%. speaking of real value added research, goldman sachssachs, came out the next day and downgradeded stock to neutral. i say thanks guys. in the last four months they have fallen from 45 to less than 15. way to be ahead of the curve. you turn your adherence into chum.

you could have side stepped the latest beating here though if you just put the stock in the penalty box like i suggested. the issue here, expectations. if mako's management had cut guidance dramatically when they disappointed in max, perhaps the expectation would say have been low enough to be beaten and this week's crushing could have been avoided. as it was though, the expectations were still way too high and that makes it seem like mako's management may not have a good handle on its business. but the problem is it's with mako, people, it's not systemic. how do i know this? because when intuitive surgical reported its first quarter results on april 17th, the company blew away the numbers. earned $3.50 a share, a 35 cent beat. and the revenues came in higher than expected. the company sold 140 of the di vinci surgical machines and substantially better than 126 units the analysts were

participating. management gave positive guidance raising the full year revenue forecast. with those kinds of di vinci sales, don't you slap a mustache on the mona lisa just yet. but how do we know mako isn't the canary in the coal mine? because intuitive surgical is very different from mako. big established company, proven track record, huge installed base. the di vinci machine is beloved by doctors. i know, i went to a presentation. it is loved. and hospitals love it, too. why? because it saves them money and allows them to perform all kinds of minimally invasive surgeies that get people out of the hospital faster. they do sell into the same markets as mako although the machines perform different operations. mako is focused on orthopedics, but mako is the smaller, faster growing upstart. there have been no signs yet that the customers are cutting back. europe is going to be an area of concern.

given that the supreme court just upheld obama care, i wouldn't be surprised if hospitals all over the country are more likely to invest in this kind of thing secure in the knowledge they will have more customers as more people are forced to get health care. this ain't shark week. even if you back out their huge cash, the stock sells for 28 times forward earnings. it's not exorbitantexorbitant, but it is difficult. don't let mako's problems turn you off to intuitive surgical, especially not now when the stocks are off over 50 points from the high. mako is in damaged goods, but intuitive surgical is still in good shape. this is a high growth, high risk name. i will only countance buying it through deep in the money callouts and part of a diversified portfolio. sure, it seems intuitive to dump intuitive surgical, but strong di vinci sales makes that

judgment just plain wrong at least for now. tom and george and tom. >> caller: a big boo-yah from dallas, georgia. >> wow. >> caller: yes, sir. >> didn't know there was a dallas in georgia. dallas cowboys georgia style. what's up? >> caller: i want to see what you think about the medical device company met tronices ticker mdt, the company's currently paying a 2.7% dividend and looks to be in a great position to take care of the large population of aging baby boomers. >> i think it's okay. i got to tell you, honestly, i don't think it's better than okay. doesn't have a lot of catalyst. it's been sleep walking for a long, long time. device plays are very good stocks. peter in california. peter. >> caller: hey, jim. kand wait for the nfl season. >> me either. the commissioner is breathing down my neck to do that rather than the show. what's up?

>> caller: i like the medical device market where the trend is for more surgery to be performed via robotic systems. >> right. >> caller: the company i have in mind is aray. they have interesting cyber knife technology. however, mako surgical stock got hammered recently. do you think they could be the next intuitive surgical? >> i think it's too dangerous to opine. what we're going to have to do is do more work on it. we did look at it one other time but these things are what's the most current. there's no sense in pretending to be current when you're not. fins on the left, fins on the right. sounds like jimmy buffett. and mako is sinking all right, but lsrg doesn't have to go down with it. stay with cramer. coming up, the clock is ticking. call cramer at 1-800-743-cnbc to find out how to fire away at crimer on the lightning round.

can he withstand your thunderous onslaught of stocks? and later domestic partner? a slowdown in china, fears in europe still top of mind. need a place to take cover? tonight cramer is on the hunt for homegrown profit potential, and he's found a candidate in commercial real estate. stick around for his exclusive with the chairman of american reality capital trust. all coming up on "mad money." people save a lot of money. but today...( sfx: loud noise of large metal object hitting the ground) things have been a little strange. (sfx: sound of piano smashing) roadrunner: meep meep. meep meep? (sfx: loud thud sound) what a strange place. geico®. fifteen minutes could save you fifteen percent or more on car insurance.

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it is time, it is time for the lightning round. are you ready? time for the lightning roud. let's start with roger in florida. roger. >> caller: jim. moderate boo-yah to you. >> nice, sunshine. >> caller: i want to know what you think about the other lowe's. >> i think of the other lows. they've done a remarkable job making money. leonard in california. >> caller: boo-yah, jim. this is len in redwood shores, california. >> good to have you. >> caller: thank you. i am getting mixed messages on pay. i'm encouraged by a pe of 15, a projected growth rate that looks to be a lot higher, plus lots of

insider buying starting july 2nd, but a chart that's not clear. >> let's not go for the chart. i think this company is out of the penalty box and back. jumped nicely under a new contract the other day. i think good things are happening. i'm a buyer. let's go to tyler in texas. tyler! >> caller: jim, boo-yah from texas a&m university. >> aggies. >> caller: thank you very much. my concern is nike, nke. are these shares just diluted right now? >> i think nike is good to go. we pulled the trigger on nike. i think nike is going to reward patient people. not going to turn around immediately, but i like it. ben in minnesota. ben! >> caller: boo-yah from liberty university in the land of 10,000 lakes, jim. >> man, i tell you, the college kids lo love us. let's make money together. >> caller: i'm looking at apl, atlas pipeline. i have been in and out of the stock the last few years. i'm wondering if you see any more higher potential?

>> i think they're money makers. they made you money before. pocket that yield, reinvest it. i like it. let's go to jim in oregon. jim! >> caller: hey, jim. a boo-yah from track town, oregon, eugene. >> sounds good to me. what's up? >> caller: yeah. i have a question about the company is tjx, companies inc. >> they pack terrifically. they're the european equivalent of a dollar store. their european numbers are great. i want to go to todd in georgia. todd? >> caller: boo-yah from hot and humid go. >> doesn't matter, that's still the best boo-yah of the day. what's going on? >> caller: looking at universal health services, ticker symbol uhs. looks like a company with great management that may benefit from the recent supreme court ruling.

>> you got horse sense. that's a key across your base company. doesn't get much better than that that company is well run. and that, ladies and gentlemen, is the conclusion of the lightning round! >> the lightning round is sponsored by td ameritrade. our cells plays a key roleh of throughout our entire lives. ♪ one a day men's 50+ is a complete multi-vitamin designed for men's health concerns as we age. ♪ it has more of seven antioxidants to support cell health. that's one a day men's 50+ healthy advantage. [ dog barking ] ♪

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how do you protect your wealth in this difficult environment? the playbook is simple. we want companies with three things, domestic security, meaning they don't have much, if any, international exposure, high yields, and consistent business models. that's why i want to introduce you to american realty company

trust. company is not like other reits we talk about. arct owns 485 properties across 43 states and puerto rico and it has the sky high 100% occupancy ratio. how is that possible? company has a sale lease back business model meaning the tenants sell the real estate to american realty and they lease the property back to them. for example, let's say you're a company like walgreen's. you own a bunch of properties but you're really not a real estate company. walgreen's will sell the property to american realty to raise some capital and then rent it back on a long-term lease. this isn't a new idea but the sale lease back concept has become increasingly popular as cfos try to unlock capital. they don't have much ability to raise rates. you have to find out more about that, like more traditional real estate trusts. buying unwanted real estate and then leasing it back to the

current tenants. just today arct announced plans to buy $64 million worth of properties including seven ruby tuesday's, 16 family dollar locations. it didn't have a traditional ipo. it's been trying to educate investors. i think it's an interesting story. let's talk to nick, the chairman of american capital realty trust to learn more about his company. welcome to "mad money." have a seat. >> thank you. >> thank you so much. okay. you do some things that are traditional, what we know, which is that you have tenants that are broad range of companies and all over the country, but then when we saw the 100% occupancy we were shocked. that's because you don't do a traditional mall and then lease those properties. explain how this is better for shareholders. >> it's really all about the net lease strategy.

we're buying properties we have no cap ex. >> capital expenditures. >> right. we're buying properties that are diverse. we have 64 different industries and credits represented by 20 different industries. we're focused on durable income streams and when you really look at the strategy, we're not buying any properties with less than a decade of duration the day we buy them. also, no franchise credit. we're buying all corporates. >> again, remember, a lot of people are not that sophisticated. you're buying from big companies. >> correct. cvs, walgreen's, dollar general, advanced auto. all the kind of durable themes. we stay away from real estate that may be difficult to release such as movie theaters or car dealerships. >> or franchise. >> no franchise. >> and therefore could walk away from it leaving you with the building. you don't want to be left with the building. >> exactly. >> some of these guys we deal with, they don't mind a tenant

goes out and they can raise rates but this is a different kind of business. >> it also creates a bondable-type income. like a bond because the leases are actually corporate guaranteed. >> okay. >> so we're not dealing with rollover in the next decade. >> so today's announcement is actually pretty seminal because what happens when you do these deals, it gives hope that perhaps the dividend could be -- the distribution could be raised sometime in the next year. >> correct. we focus on accretive acquisitions. if you look at the debt markets which we're all doing every day, we look at the debt markets we see today, we're looking at ten-year treasuries around 150. >> making nothing. >> and our portfolio we're buying 8 caps and 7.5 caps. >> okay. given the long-term nature of these leases, are you disadvantaged because you can't get the benefit of rising rates? let's say the country comes back, a lot of these guys are

able to put through rate increases. we're kind of flat lining here. >> obviously, there's always a trade-off. >> right. >> right? so the trade-off between the risk adjusted yields of these high quality credits we're about 74% investment grade on our tenants, we do have top line rent growth. we have contractual rent increases every year. we give away a little bit of that potential pop, but we get annual let's say 1.5% to 2% growth on a levered basis. about 3% a year equity. >> now, you have got a broad array of properties all over the country. we hear despair every day. i'm not kidding. we hear despair, but you're dealing with enough companies you should be able to give us a snapshot of whether that despair is correct. >> the economy is flat. we could call it whatever we want to call it and there's some bright spots, but we basically look at the kind of everywhere america. we want to be diverse industry, tenant, and geography. so we're in about 45 states and we deal with about 63 different

credits. so i would give you the honest answer is the corporate balance sheets are getting better, but the volumes are basically stable and their earnings are growing. >> one last question. there's a promissory note that starts august 17th, 2012, that was hard to understand. it seems like there's a note that you are able to issue. is that something i have to worry about as a common shareholder? >> there's a note that -- >> yes, you have -- there's a listing over 30 trading days, august 18th -- >> okay. what we have -- >> fine print stuff but i got to learn fine print. >> i wanted to make sure i understood what you were asking about. when the company listed, we do not do a conventional ipo, so we listed and as part of that listing, we are -- our pay for the actual creation of the company is based on performance. pay for performance. and so it's measured 180 days after we listed, and for a 30-day period after that. that's created into a noninterest bearing note and it

pays out over three years so that management does not get the benefit of getting a cash payment before the investors have three years of trading history on the company. >> good. i didn't want to be obtuse but i also feel like i have to ask because that makes a ton of sense. >> pay for performance is really one of the core fiduciary duties of the management team. if we don't perform, there's no payment at all. >> i like that. this is nick. i'm so glad we have been introduced to this kind of company. go look at the breadth of the number of clients we have and you will feel as confident as i do. "mad money" is back after the break. thank you. we know a place where tossing and turning have given way to sleeping. where sleepless nights yield to restful sleep. and lunesta can help you get there, like it has for so many people before. when taking lunesta, don't drive or operate machinery

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we love big dividends on "mad money." and with good reason. time and gep we have seen outsized dividends hold off sellers and stop declines. we have seen the power of reinvesting in dividends to compound your gains. they have provided about half the return investors have gotten in the last decade. indeed, a dismal decade for investing. you pick stocks with good deaf dends, you're on the right track for successful investing. there's the catch, it's the phrase good dividends. what we have found is that not all dividends are created equally. take the sorry case of supervalu. a company that told us over and over again that it was confident in its dividend and it understood how important it was to shareholders.

when stocks go down, yields become larger. hence you get a bigger yield from the division. few stocks in the s&p 500 had a bigger dividend than supervalu going into the session. today we found out what happens when we see this process play out for companies with badder balance sheets and declining foretunes. the dividend gets slashed or in this case totally eliminated. despite all protestations to the contrary. assurances given to me last year by the ceo of comfort with that dispensation of cash directly from the company to you. the ceo when asked on the conference call last night about why the company had eliminated the dividend cited wholistic reasons for the decision, whatever the heck that is. all i can say is it was a mighty bitter pill for shareholders. 30 cents yearly, while not making up for the two-thirds decline in the stock since 2008, did draw in buyers with each

reiteration of confidence that the ceo made. nothing is going to make up for the $2.60 decline today, especially because when the smoke cleared the stock closed at $2.69. ouch. now, there are some important lessons here. first, the supermarket space has gotten incredible hard. a intings of dollar stores become more competitive and the low end name brand offers moving aggressive in the space and whole foods taking the high-end consumer. but second and most important is sometimes outside yields like supervalu are out and out red flags signaling their own reduction or elimination. been blindly buying into assurances, before thinking how can i miss with that yield protection, do the homework. supervalu was clearly in a long-term spiral down. you should have been more than skeptical in the company's dividends. to me it's a clear case of the need for not buying whole but buying homework. if you had done the homework i

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we are honored to have some very special guests here today. a while back we had a landmark 500,000 twitter followers and to celebrate we involved our lucky half million follower to hang out with us. our winner @kentuckyhoss, barry and his family came from the heart of america, cincinnati, ohio. thanks for following that krizzy @jimcramer guy on twitter. to the rest of you out there, keep the hash tags coming. let's get to a million. all right. understand we do not like a lot of the market.

there is the worst of times for a lot but there's a lot of bests. i will try to find it just for you right here on "mad money." i'm jim cramer and i will see you tomorrow! this morning on "early today," bain battle. mitt romney goes on the defense over discrepancies about his time at bain capital. pretty in pink. a stunning 8 carat diamond goes on display down under. and twice as cute. an adorable kitten is born in and twice as cute. an adorable kitten is born in rhode island with two faces. captions paid for by nbc-universal television hello and good morning. welcome to our viewers across the nation, including the pacific time zone.