reasons i can give you for the selloff with a total straight face. i'm going to give you ten totally authoritative explanations. wherever things look dicey. you know what, we ought to call it something. let's call it the bear boilerplate special. here we go. one. the economy's weak. we should sell stocks. two, fed policy isn't working. why don't we sell stocks? three, revenues aren't any good. maybe we should sell stocks. four, europe a not getting any better. so you should, yeah, sell stocks. five, china is getting worse. time to sell stocks. six, it's may. bad month poetry wise. rhymes with go away. of course we should sell. seven, markets run too much. unload stocks. eight. stocks are expensive. hey, we should sell stocks. nine, stocks are going higher. sell stocks fast. ten, earnings aren't so hot. sell, sell, sell. how is that? good? why don't i come out here and to this every night? perhaps in a continuous loop, do it from this side, do it from

this side, do it down here. make it interesting. why don't i give you those reasons? how come i don't want to sound smart, too, particularly on a down day? i could be so smart. how about because i would rather be right than sound smart. let's use the down day for a premiere here. the bear boilerplate orthodox. you know all ten of these reasons to sell could have been for the last 4,000 dow points? that's right. 4,000 points ago. >> sell, sell, sell, sell. sell, sell, sell, sell. >> dow 14, 700-ten of those pearls of wisdom could have been said by me any day i chose for the last few years. i could please many of the critics that don't like i say i say certain stocks and i think they should be bought. simply by coming out here and mouthing one of these saints like utterances, i can get my reputation back. you know what that would mean? i could have more friends on facebook.

more followers on twitter. i mean, those are the twin keys to happiness. i could have been giving you the boilerplate special for so long i could have helped you stay out of the whole move. i don't know why anyone who says these things would have any credibility with you at all. even as they always seem to have credibility with those who believe stocks have no right to be as high as they are, maybe even go up at all. you know, these ten evergreen bits of genuine wisdom ring true every day the market is down. i can't blame people. the great thing about spouting these truisms, they're never wrong. what could be wrong with saying, for example, stocks are too expensive? that has a great ring to it. i got started buying stocks in 1979, the dow was at 8,000. i'm sorry, the dow was at 8,050. i couldn't remember because it was so low. tonight it closed at 1,470. that was 13,850 points ago.

back when i started buying stocks we had roaring inflation, an unstable government, we had a recessionary-like environment. by the way, we had terrible leadership. we had a cold war, a periodic spike of bad will. suffice it to say, when i belt it, dow 8,050, stocks were expensive. let's say i had "mad money" in 1979 and said, you have to sell, sell, sell. i would have been wrong. 13,850 points wrong. i would have cost you a chance to make a lot of money. but i might have sounded really smart. second, we are not s&p traders here. i don't recommend owning the s&p 500. all those ten negatives that would be applied to the index. lots of people you hear spouting them are index fund people. they look at owning stocks as if they're one stock. they don't like to look underneath the hood. those who make sweeping judgments like the ten brilliant points i made earlier, they can look really smart on a down day, but if you watch this show or have watched it any time in the

last eight years, you know i'm not about the market. i'm not about saying, wow, risk on. no. risk off. i know you. i know you are trying to find the next dominos or the next regeneron, trying tie void the next zynga or groupon. these stocks have nothing to do with the ten reasons to sound brilliant and look smart but about discerning what to buy on days like today when a market throws a real sale. don't believe me? we're going to use another analogy. get out of the stock world because it confuses people all the time. i live a mile down from the short hills mall. i walk there, but it's hard to get home. interstate 78, there's a sign that says retailers in the short hill malls are throwing a sale. everything is being knocked down in price because the stores all trade with the short hills mall futures. it trades in chicago. they're putting tremendous pressure on the prices of all the merchandise in the mall. wouldn't you say, holy cow, i

got to stay away from that mall, wow? something must be wrong with the jewelry, probably holes in the fendi gloves. i don't want to pay $70 for four inch jimmy choo high heels. is there suddenly less toe cleavage? did those things i liked so much go out of style? how about the glassware, it must be cracked. have the true religion jean shorts become baggy? are you like me and hope for an across the board sale to occur, even as you know you're never going to get that lucky? how about assumptions that stocks don't deserve to be high. what does that mean? deserve? i mean, is that because they have a grand jury somewhere, like a federal judge of stocks who's going to definitely put you under arrest and the buyers and you're going to be sentenced to doing a lot of community service for paying too much? is there some law, perhaps something in the constitution i don't know about? that says you are mandated to avoid buying stocks and must buy

bonds because they're intrinsically safer, like the bond commerce clause? i don't know. i don't know that law. i've never heard of the judge. unless judge judy has started giving investment advice, how about, i've got another idea. stock miranda warning. let's get grandular. yesterday we had on pat doyle from dominos pizza. up day, one where there was no sale being thrown. look at his earnings report, look at the stock and say that was a good one, but i aught to buy it. today thanks to the sale dominos dropped 56 cents. does that mean the quarter wasn't as good as we thought? maybe it was bad. if the market is down tomorrow, we got to presume something, that doyle is now serving up rancid pizzas that aren't as tasty as the corrugated box they come in and the cheesy bread gives you hives or maybe you're getting a better deal on dpc. we had sandy cutler on of eaton. a remarkable quarter with clean runway. the stock went up.

today it was down. does that mean eaton actually had a bad quarter or mean when the fact goes down it has a greater impact on a stock like eaton than other stocks because eaton is a wild trader? the market is give you a chance to buy dominos at prices you shouldn't be able to get at based on the remarkable performance of the companies. i would differently if something actually happened today that drove stocks down. if the fed said it was going to tighten and stop buying bonds, if president obama was going to push for a 50% transaction tax tax, if europe decided to raise rates, if the chinese communists mandated lower prices for all stocks including those overseas because they're really powerful. none of those things occurred. we've been up a lot. people want to lock in profits. they don't want to give up gains. nobody got hurt taking a profit. stocks went down. it happens. did you know -- it could happen again tomorrow. maybe in the next day. just maybe the sale continues. long sale, it's a buy one, get one. i don't know.

it's a lot smarter to shop on days when things are on sale at the mall than when they weren't, as long as not damaged by fire, flood or infestation of moths. don't lament it. a ton of companies reported earnings that were good and their stocks got out of reach. that doesn't mean their companies are less valuable. just the stocks themselves. that's actually making them bargains and maybe, just maybe, we'll get bigger bargains tomorrow. let's go to nathan in california, please. nathan? >> caller: jim. how you doing? >> boo-yah, nathan. >> caller: what an honor. big bull market boo-yah to you. there's a lot going on with sirius xm satellite radio. they're reporting earnings. ceo. liberty taking over. streaming features. what do you think. >> sirius is funny, it's not a play on music, not a play on howard stern, not a play on the unbelievable baseball channels they have. it's a play on auto sale and auto sales are looking up.

therefore sirius is pretty good and the renewal rates are good. i like sirius. goes up 50 cents. sean in florida. >> caller: jim, honor to be on the show. i'd live to give a shout-out to my grandfather and sigma fi guys at florida university. >> i like those guys. i don't like the gators, okay? >> caller: me neither, man. >> bury them. >> caller: yeah. okay. my question today is about zts. the other day you accurately predicted it would beat analyst estimates in its first quarterly announcements, and you're right. it beat both the estimates for earnings and revenue. do you think the earnings and revenue growth will support the high p/e ratio? >> animal health and animal health science one of the greatest businesses in the world. if merck were to spin out its animal health business, merck's

stock would break out of the 40s and go right to the 50s. more important, you would want that business, too. i think zts is absolutely terrific. let's go to donna in texas. >> caller: boo-yah, jim. >> boo-yah, donna. >> caller: thank you for inspiring me to get into the game. >> okay. >> caller: last week my husband and i stopped at a cracker barrel for a late lunch. >> uh-huh. >> caller: and i noticed a charging station for electric cars in their parking lot. with summer and road trip season ahead, i would like your opinion on that stock. >> okay. you know, i think it's a little -- i don't think that's a needle mover, that charging station. i will say this. that cracker barrel has one of the most amazing buybacks in the world. okay? this is a company that had -- let me get the number. this is a company that had a 31 million shares not that long ago. now it has 23 million. they buy back, buy back. the only problem is you always have to pop a lipitor before you have the cheesecake with vanilla ice cream and slice of cheese on top. boilerplate special. you had it right here. serving up market bargains on a silver platter.

you can actually believe in all the bear things. they've worked for -- they worked. they sound brilliant. but then again, maybe they're only brilliant on days like today. "mad money" will be right back. coming up, time for tech? with pc makers struggling and concerns over apple's staple of "i" products sending shares of its suppliers tumbling, where do you turn? cramer is browsing supermarket of net to find out. later, getting hot? trains, and automobiles. find engineering all over the world and beyond. but is the stock as strong as the steel? cramer speaks to the ceo just ahead. all coming up on "mad money." >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc.

miss something? head to madmoney.cnbc.com.

so far this earnings season when it comes to the technology

stocks, we have a lot of mixed signals here. major players like ibm, oracle, qualcomm, intel, people thought they disappointed. we got a better than expected report from microsoft and broadcom, big semiconductor play there. apple supposedly disappointed. there wasn't a lot to like if the quarter except for the dividend boost. maybe that's all it took. the stock's been roaring back. how do we puzzle out what's going on with tech? simple. you want a read on talk? talk to avt. the company i always call the largest supermarket of technology on earth. over 100,000 customers. at this electronics business is the world's number one distributor of electronic components. among the biggest distributors of information technology, hardware, software and services out there. avnet reported last thursday, reported a 3 cents earnings beat off 87 cents basis with revenues higher than expected. the company had its analyst day today which makes it the perfect time to check in with rick to find out more about where his company and industry is headed. welcome back to "mad money." good to see you, rick. okay, rick, i know one of the

pieces, i want to use the title, it says "fiscal 3q '13 results rating for macro leverage." you're not waiting at all, are you? >> no, we can't stand still. we're taking the position, the era of uncertainty is the new norm. we have to improve the results no matter what's going on. we were proud of the sequential increase off the quarter. year on year we have gaps in performance. that's what we're working on. >> the one-stop idea you just came out with reminds me of nordstrom, neiman, a guy who knows you, who's your salesperson, knows what you want. it isn't just you go to the store and pick it off the rack. >> we're about solutions, jim. we're about in the components world, design chain and connecting the supply chain. in the i.t. world it's about those total solutions. it's the eco system, the partners we use to provide the coverage to the mid-market that is valuable to our key suppliers. >> who would want that special services versus going into the big rack store?

>> yeah, so a medium business might have a challenge by integrating an existing, new solution with existing legacy systems overall. go to software as a service model to add a new application, but you've got to interface that application with a lot of existing data or systems already there today. that's not plug and play. that's not like downloading an app from itunes and plugging it in. takes a little more work than that. that's where we work on a needs analysis by customer and come up with a solution for them to make sense. >> let's go back to the apple instance. what i'm seeing is there is very little to no growth in a bunch of segments. pcs are negative. tablets still got something going up. the dumbphones, bad. i'm trying to figure out where, what's going so well it could make it so your second half would be better than current? >> jim, as you know, we cover that broad industrial segment. >> you have auto, everything. >> think of the broad brush.

it was in decline in 2012. though they expected a growth year, we were down 2.7% i think many 2012 in the total semi business. the industrial space was probably one of the net losers. overall, we look at projections going forward. we're not forecasters. the return to growth for some of those key segments we believe could help provide great leverage with us. >> i was with the ceo of t-mobile. the device revolution, it is so dramatic. is there anything about the device revolution that would make you feel like no matter what happens things have to get better? >> let's talk about the internet of things. it's a lot more than phones. some suppliers are talking about 10 million connections moving to 50 billion connections in the not too distant future, maybe 2020. a lot of those are machine to

machine, machine to person. not simply a mobility device we're going to hold in our hands. by the way, every new million and billion of those devices requires more infrastructure to be able to support the bandwidth for us to be able to enable these wonderful new applications that change our lives. >> speak geographically, some of our guys this week say asia, they see a turn. some gs are saying europe has bottomed. is there anything you think the conventional wisdom is wrong with? >> no, i tell you, when you use the term mixed bag, jim, that's the first thing we would say, but within our three major regions of asia-pacific, americas, and europe, our example for our european components business. in fiscal '11 up 30% year on year, followed by a recovery down 12% year on year. they look like they're ready to cross over. >> cross over to --

>> year on year growth. >> that's a stock trading moment that you said that. that's very positive. >> we don't want to overplay it, but it's good to see creeping back closer to the crossover point. asia crossed over year-on-year growth a few quarters ago. the americas is the lagger from the major three regions. it is a positive trend on a sequential basis. >> every time i talk with you, you have a great problem, high-quality problem. you always have cash. >> right. >> you're a conservative company. you have cash. when the stock went to 35, 36, we talked about that it might be too high. you didn't buy back a lot of stock. the stock finds itself at 31. the 28, 29 level, you've come on the show, say we're not going to -- that's a good level for us. are we nearing the good level or the last piece i saw, it's really m&a. >> we prioritize the allocation and like investing in organic growth. when we have an uptick. we like deploying it when we can

get the returns, sustain through cycles. when have excess liquidity, we'll consider return to shareholders and opted for and preferred buyback because of what happened to the price of the equity. we've never been specific about where we get in. obviously as we start to head down and head maybe toward the proximity of book value or, by the way, an intrinsic value calculation, we do certainly based on forward projections,s that's when we're active. we. >> if the stock goes to 28, 29, you're not going to put a flag out and say this is where we're buying. historically that's where you buy. >> that's right. >> that's good to know. ceo of avnet. the best company in a tough neighborhood right now, but it is by far the best. stay with cramer. >> thank you, jim. coming up, getting hot? train, planes and automobiles. you can find timken's advanced engineering all over the world and beyond. is the stock as strong as the steel? cramer speaks to the ceo just ahead. ♪

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on a difficult day for the market. i need you to ask yourself what happens if the pessimists are wrong? europe bottoms, china turns around, we get worldwide growth going again? despite what you might hear in the media, it's not a pie in the sky forecast. there are real reasons to believe a global turn might actually be let's say second half of the year. if that's the case, you're going to want to own something in your portfolio that is cyclical. something like timken, tkr,

which makes mechanical component, including wheel bearings. they're the largest manufacturer in the world, by the way, as well as making high performance alloy steel products. timken has its fingers in industrial equipment, train, oil and gas, that's pretty important for them. i like this company so much we own the stock in my charitable trust. actionownersplus.com. we visited timken outside canton, ohio, last year. since then the stock rallied a hefty 30%. timken reported last week on april 24th. the company beat the street's earnings estimate by a penny off a 79 cent basis, revenues came in a tad light thanks to lower demand over most of the company's end markets. over the quarter timken has become a controversial stock. a pair of major holders propose the company break itself off by spinning off steel operations from the rest of the business.

timken's management says the breakoff wouldn't make sense at all. the shareholder meeting coming up may 7th, terrific time now to talk to jim griffith, timken president and ceo to hear more about the quarter and why he thinks his company should remain whole and not be broken up. welcome back to "mad money." >> good afternoon, jim, great to talk to you. >> i know the numbers weren't exactly as you wanted. the progression as you said in the conference call was actually okay. and that maybe we saw a trough month and things have gotten better. >> i think reinforcing the points you were making, we came into 2013 believing we would have a weaker first quarter and things would strengthen through the year. the quarter came out just about the way we expected it to do. we're beginning to see the orders pick up as the quarter ended and we went into q2. we're bullish on the second half of the year.

>> what are the orders picking up? i know aero and auto are better in this country. >> auto has improved, from the truck market. interestingly we have begun to see a pickup in orders in china which is a nice thing to reinforce, the moves being made by the chinese government are going to support growth in the second half. >> let me go over china. you also do a lot of business with the joy globals of the world. they are not seeing that much of a pickup in china. some of the companies we've had on this week, eaton, ppg, are saying they are. why is it uneven and sporadic in china. >> i think what we're seeing on a global basis is the big commodity markets, whether it's oil and gas, or mining, are down year on year because the commodity prices have come down. the miners are pulling back. the capital goods companies that serve them are slow on a global basis. on a regional basis, though, the chinese economy is coming back and we're seeing orders from chinese oems and global customers who produce there.

>> now, to switch to this proposition that's coming up. i'm looking at a chart, admittedly, prepared by you. it's the steel companies. it's last three year total shareholder return. timken, 111%. altra, 79%. pulling up the rear, a.k. steel down 76%. u.s. steel down 55%. allegheny tech, good company, 27%. why do you believe your company is a target of a breakup analysis for poor returns when your return is by far the best in the industry? >> well, just to be clear, the timken company across the cross put a business model in place where we take the knowledge of the company, take it to the market and create unique value. differentiated value. and that has generated top shareholder returns for us. it's also pumped our profits up shareholder returns for us. it's also pumped our profits up to the point that the market's not believing that those are sustainable and, therefore, the multiple is not there. and relational is looking solely

at the multiple thinking a breakup will unlock that value. in fact, it's solving the volatility, consistently providing the profits at that level that will deal with the undervaluation of the earnings. >> well, let me just play devil's advocate. i assess, glass lewis, these guys don't have a dog in the hunt. they're good objective people. they're saying this was a good idea. they favor this. are they looking at different data than you? honestly, i think you're honest brokers. >> you spent 12 hours in our steel business and understand the role of technology in the steel business. very difficult for a financial investor to understand how we leverage technology. they're looking at the numbers from the outside trying to analyze it. you looked at it by doing the research on the business and understand fundamentally how we create value. that's the difference of the conclusion that you reach. >> i appreciate that. i would tell you i feel that the

>> i appreciate that. i would tell you i feel that the companies that are doing worse in your industry, when you look at the returns, a.k. steel, u.s. steel, they tend to be the companies that you would get if you did a split-up where you could jump the company up, one place with commodity, then think you could actually bring out value somehow by creating that company. >> yeah, again, those are companies that focus on manufacturing steel. timken used to be one of those companies. today we focus on what we know and leveraging it to create value and that creates top earnings margins, return on invested capital and obviously from a shareholder point of view, returned to our shareholders. >> at the same time why are the utilization -- you're making a lot of money at 55% utilization rates. what would it take to see 75%, 80%? if you got there now with the cost taken out, would you have your best year even if you didn't get to 100% utilization? >> first half of 2012, we were 75, 80% utilization at that point.

what it takes is to get through an inventory right-sizing going on in the mining industry and the oil and gas industry and some of the distributor industries and simply get back to today's level of economy, for example, in the oil and gas industry, drilling's down 15%. our volume in the first quarter was down about 50%. so if we simply get through that inventory adjustment, we'll see much better earnings in the second half and much better utilization in the second half. >> okay. one last question. when i hear what you're saying about china, you've got a gigantic china operation. is that what -- which would they give that to if these geniuses were to separate the company? >> well, the challenge is not what it effect our china operation but our ability to sell steel in china? $40 million is u.s.-made steel we export to china because of the relationships we've built over there by having a bearing

manufacturing business there. >> right. that business would conceivably go away from the high-profile proprietary business if you separated. >> that's correct. it would be very difficult to leverage the synergies of being a global company if, in fact, we split the two companies in half. >> the whole time we spent there, i didn't know about relational at the time. all we did was talk about how great it is you have the synergy versus the other guys. i think you tell the truth. i thought that when we were out there. i appreciate you coming on the show. >> jim, appreciate the time. you've invested to understand timken and you're helping spreading that message. thank you very much. >> appreciate it. thank you very much. that's jim griffith. the reason we went out there, this is the one steel company that figured how to make money in good times and bad times. stay with timken. stay with cramer. still ahead, you plan, you play. you try to perfect.

but can your strategies stand up to cramer's test? call, e-mail or tweet @jimcramer to find out if your portfolio has what it takes in "am i diversified?"

>> announcer: lightning round is sponsored by td ameritrade. >> it is time. it is time for the lightning round.

you say the name of the stock. >> buy, buy, buy. >> sell, sell, sell. >> when you hear this sound, then the lightning round is over. are you ready, skee-daddy? andrea in north carolina. >> caller: boo-yah, professor cramer, from durham, north carolina, the tastiest town in the south. >> i didn't know it was that scrumptious. terrific. let's go to work. >> caller: i'm a member of the ladies investment club. we're interested in buying phm. >> this has got to be a stock, a little more speculative for that group because it doesn't have the yield we like. but it does have a great quarter and i am thinking very bullishly about housing. >> buy, buy, buy. >> let's go to jacob in louisiana. jacob? >> caller: from south louisiana, calling about martin midstream. mhlp. >> nice 7% yield. the stock has been red hot. >> buy, buy, buy. >> i think they go to a 6% yield because it's going higher. >> caller: boo-yah. i was fortunate enough to get on workday, wday.

i've done my home work. i cannot find anything negative on the stock. it's more than doubled in price. what do i do, jim? hold, buy more, sell? >> it's son of salesforce.com. this is a company that hay lows you to be able to save and get smarter. i'm going to say it's still a buy even though a lot of people including the good folks at paychecks tell you it's radically overvalued. i don't think so. jim in montana. >> caller: boo-yah, jim. calling from whitefish, montana. expedia. expe. i bought it 63 several weeks ago -- >> i think think you're fine. that quarter was okay. i do like priceline, too. people think priceline's too expensive, but these are companies that revolutionized travel. expedia is good to go. i like it. robert in washington. robert? >> caller: jimbo, boo-yah from the nation's capital. >> okay. >> caller: my question is about safeway. yesterday the company named a new ceo, and the stock dropped

4% on the news. i bought the stock back in february mainly because it had a low peg ratio below 1. and a good yield. 3%. and at the time, i also noticed it had a high short interest. and i thought maybe there might be a potential for a short squeeze. >> well -- >> caller: anyway. >> we're not going to play short squeeze/not short squeeze. that's a sucker's game. i tell you this. that quarter was a quarter from -- i can't believe how bad it was. they'd done the blackhawk spinoff. with 3% yield, it's good. believe it or not, i like kroger better than safeway. kroger is executing and those guys are not. jeff in california, please. jeff? >> caller: hey, cramer. it's jeff from san diego. wondering about tsrx, biofarm company that's locally made here in san diego. wondering if it was a good time to double down. >> i don't know it.

i don't know that stock. we will do homework on that stock and come back. i do not know that stock. it could be like cubist for all i know. remember the guy came on, has the hospital problems there, hospital solver against the superbugs. we'll do work on your stock. let's go to chris in louisiana. chris? >> caller: boo-yah, professor cramer, this is chris from the big easy. >> nice, my daughter's down there. tell her i said hi. >> caller: i will. >> text her. people don't call. >> caller: i'll say hey to her for you. jim, this one has been trading lower since the 159. to you still believe in the gentlemen at goldman sachs? >> goldman sachs. i miss the previous cfo whom a lot of people counted on. the new guy is getting started. i think the mna business isn't that good and one of the reasons glenn is going to bring that back. he's terrific. i think you buy it. i think that's troughing. that said, because it's $140 stock, it's often a source of funds for people. >> buy, buy, buy.

>> goldman sachs. jenny in california. >> caller: your fan club leader, you're the greatest, and a shout-out to valdona and katie. my stock is a product that i love, but i don't know if their stock is good, tumi. >> valdona and katie are people in our phone room. tumi, i thought the quarter was really good but this is a retail stock that can bite us. i use their products. people say, wow, their products are great, we have to buy their stock. i'm unsure. let's go to pedro in california. pedro? >> caller: hey, jim. thanks for taking my call. >> my pleasure. >> caller: my stock is anheuser-busch. b-u-d. >> we did a huge breakout analysis of bud trying to figure out honestly -- we did the college show in villanova.

i said, what goes better with wings than beer? i said let's do heineken, bud, boston beer and we hated every one. >> sell, sell, sell. >> we couldn't find a reason to own any one of them. sell, sell, sell. that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. switch your car insurance to geico and we could help you save on boat and motorcycle insurance too. other insurance companies are green with envy. oh, no, no, no...i'm sorry, but this is all wrong? i would never say that. writer: well what would you say? gecko: well i'd probably emphasize the savings. ya know...lose that green with envy bit. rubbish. it's just a reference about my complexion. writer: but the focus groups thought that the... gecko: focus groups. geico doesn't use focus groups. uhh...excuse me. no one told me we were using focus groups. vo: geico. fifteen minutes could save you fifteen percent or more on car insurance. are proven to be effective pain relievers tylenol works by blocking pain signals to your brain bayer back & body's dual action formula

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is yesterday's record breaking high s&p roller coaster ride followed by today's dow dive? too much for you?

maybe it's too much for your stomach? potential for an up and down, not so merry go round month of may leaving you queasy? fear not, my friends. strap yourself in. keep your hands and feet inside the ride at all times. and of course, get diversified. we play my favorite game. call me or tweet me @jimcramer. i tell you if your portfolio is diversified. why don't we start with ruthie in my home state of new jersey? what do you got for me, ruthie? >> caller: hi, jim, this is ruthie. i want to thank you for taking my call. i have johnson & johnson. j & j. i have seven company, s-o. pepsi, pep. wells fargo. and i have merck. mrk. my son thinks i should let go of one of the pharmaceuticals. he said, ask jim cramer. >> i've got to tell you, your son's got sense. this is going to be hard. my charitable trust owns merck and j & j. i think they're both fine. merck has five drugs coming out of the pipeline.

eenie, meany, miney, moe. we're going to get rid of merck. you need an industrial badly. why not say, eaton? off two points today. we'll put an eaton, wells fargo, great play. johnson & johnson. pepsico, boosting dividend last night 7%. southern, i'd take that out and put in aep, but the southern guys are nice. utility, soda, consumer package, drug, wells fargo is a bank and my eaton. i say, your son is right. freddie in new york? hi, freddie. >> caller: jim, a beautiful spring boo-yah to you. >> what's up? >> caller: i want to see if i'm diversified enough and in the right sectors.

my holdings are ford, cms energy, cms. adobe, adbe. and united health group, uhc. and lockheed martin, lnt. >> wow. that is a really good portfolio. [ buzzer ] lockheed martin, come on the show, you know i'm begging you. you're doing a great job. not as good as humana, but still pretty good. ford is a breakout. i think the stock can go to 15%. i think gm can break up to the upside. cms energy is my favorite utility. adobe an okay company. tech, health care, automotive company, that, freddie, has got game. i like that. let's go to john in california, please. john in. >> caller: hey, jim, boo-yah from sacramento valley. >> sacramento, tenth and "p" where i parked my car and lived. >> it was a nice neighborhood. still okay? >> caller: how about isis

pharmaceutical, qualcomm, allison transmission, and nike? >> wow, man, these are some of the more creative portfolios out there. nike, the stock is breaking out and absolutely has a tech -- i'm calling it a technology company these days. okay. an industrial. isis pharmaceutical. qualcomm, disappointing quarter. probably at 61% is okay. a tech, a spec, an industrial, and a drugstore chain. that is perfect. ♪ hallelujah >> that was easy. >> great portfolios and terrific new names. "mad money" is back after the break. [ female announcer ] switch to swiffer wetjet,

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jim cramer, you're one of my heroes. >> i look forward to your show every weeknight. >> thank you so much for helping beginning investors like me. >> when you talk about the market, i just believe you're spot on. >> oh, i love it. thank you so much. every night we watch you. i have learned and earned. listen. no matter how many times i say it, people don't seem to get it. the pharmaceutical business is not near-term earnings. it's not about the next quarter even.

it's about the pipeline. multiyear. what's in the works? what could be a blockbuster? we saw that play out in today's trading. merck reports a quarter, people decide merck's has it. merck has 35 drugs in the pipe. many can be additive to earnings in what's known as the out years. that's why merck committed to buying $15 billion of its stock now because management knows the company has some huge drugs that will be terrific in the future. why not try buying back $15 billion in stock or 10% of the company now and then also give people a dividend that amounts to 3.75% yield. paying them to wait for the phase two and phase three drugs powering the numbers when 10% of the company was bought in on the cheap. but if pharma stocks can live by the pipeline, wow. you know what, they can also die by the pipeline. which brings me to allergen today. you know i have high hopes for this company's macular degeneration drug prospect. it's a fabulous pipeline. the drug is being delayed because results now, well, we saw they're not up to snuff. the stock falls more than 13% one session. meanwhile, though, this is great news for regeneron, the best current drug for macular degeneration and competitive woes from a much more established company just vanished this morning.

that gives it more money for its pipeline. it doesn't help the stock was shorted because it was added to the s&p 500 last night causing a spike the wise guys thought would end tonight. we have tremendous earnings disappointments from high profile drug companies that ended up meaning nothing. eli lilly didn't hit the numbers. so what? it has a valid drug to perhaps treat alzheimer's. those stocks did legitimately sell off. pfizer, bring up valuable in any way possible. the animal health company. so their pipeline isn't as important as others. bristol does seem to have a gap and that's why the stock is not balancing. j & j, johnson & johnson, has a terrific pipeline and chance to break itself up. it's worth betting on. listen, the best of the best might be old-fashioned glaxosmithkline. very similar to a merck situation which, again, obviated worries of the near term.

glaxo didn't get hit when it missed its sales estimate. whey why am i so sure? in the 1980s merck seemed to be out of gas. merck was working on a promising anti-cholesterol drug that works quickly. the science behind lowering cholesterol was unproven. we didn't know what it would do to your heart. merck thought it could show over time the value of an anti-cholesterol agent. cholesterol was unproven. we didn't know what it would do to your heart. merck thought it could show over time the value of an anti-cholesterol agent. they thought the drug could be worth $200 million to merck. turns out it was one of the largest contributors to merck's earnings in history. the big move in the stock occurred as we follow the drug through the pipeline. i watch merck double and double again as clinical trials come through. i made so much money on that for my old hedge fund i renamed my cat merck. lived happily, well, for, okay, a couple years.

amazing thing about the anti-cholesterol franchise, pfizer sensing how big it could be bought warner lambert, that was a company that had an anti-cholesterol lowering agent in its pipe. lipitor, their drug, did $13 billion in sales in its last year before going off patent. if you focused on pfizer's near-term earnings during that period, near-term earnings, you would have been shorting the heck out of the stock. you would have been crushed because pipeline is what matters and you would have been dead wrong. stay with cramer. ven way to sle. where sleepless nights yield to restful sleep, and lunesta eszopiclone can help you get there, like it has for so many people before. do not take lunesta if you are allergic to anything in it. when taking lunesta, don't drive or operate machinery until you feel fully awake. walking, eating, driving or engaging in other activities while asleep without remembering it the next day have been reported. lunesta ould not be taken together with alcohol.

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i hope you'll join me tonight at 3:30 a.m. as we await the ecb decision that a lot of people felt is going to be negative and that may have been the reason why we sold off. we're in europe's hands tomorrow, not our own. you know what, that doesn't make me feel all that good. i think it's a major reason why we had a selloff. there's always a bull market somewhere and i promise to find it for you right here at "mad

money." i'm jim cramer. and i will see you tomorrow. [cc] >> announcer: it's time to pack your bags for a beautiful cruise to the bahamas. introducing caribbean cruise line's deal of the day-- an incredible $99 cruise to paradise. this tropical cruise for two includes an exclusive private stateroom, all of your gourmet meals, constant buffets, 24-hour complimentary room service, las vegas-style entertainment, two exciting onboard pools, the biggest dance party at sea and so much more. you'll be departing from beautiful palm beach, florida, and setting sail for grand bahama island, the jewel of the caribbean, where you'll enjoy white sugar sand beaches, warm caribbean waters, tropical drinks and endless duty-free shopping. imagine: an international cruise for two to the bahamas for just $99. these deals are extremely limited and when they're gone, they're gone, so call now right or log on to www.cruise99.com.