Transcripts For CNBC Mad 20240703

And by you, of course i mean me. Thats why every year i like to hold a day of atonement to help you learn from my worst mistakes. Tonight i will demonstrate how we can all approve by showing calls we made on mad money explaining why they occurred, what went wrong and what you can do to learn from me and do it better. Before i get into the specifics, though, let me give you a sense of what i see are the biggest kinds of errors i see that i have made and how i will vow once again to try not to make them even as different ones pop up to haunt me. Most of the things i do wrong these days after 40 plus years in the business arent rookie mistakes. It is rare now i suggest a quick trade the things goes awry because everyone knows i have moved away speedily against trading and spent most of my time trying to cajole you into investing. Day trading or quick trading or even options because i think it will hurt your chances to make money. It is wrong to trade unless you are doing a fulltime job. Even then i wouldnt recommend it. My mistakes have to do with not doing enough homework. These days im doing more and better homework than i did in my hedge fund. But savvy people that have been with me for some time are really fabulous. If anything, i am crushing it and being crushed by my homework as there are hundreds more companies now than when i started. No, if anything, it is the opposite of rookie mistakes that im making. I call them veteran mistakes. My errors are rooted in overconfidence and areas of juchlt and too much belief in whats worked before that it has to work again. The blunders i make because i feel like i have seen the movie before and i know how it ends when the great challenge of investing in the stock market means in reality, it is much more like you dont know the outcome of what it will be and just when you are sure you do, thats when you get the big upset. The worst errors i made have to do with trust, either by being too trusting or not trusting enough. Told me not to worry about things, that all we needed to be worried about, these are usually people with a lot of creditability. But eventually you could start believing your own b. S. At the same time, there are other executives i didnt trust who perhaps upon closer review actually deserved a little more credit. Most of all, though, i do this night of selfcriticism and i do it all the time. I do it to remind me and remind you that when i come out here daily to try it to get it right, im only human, and i fall prey to all the misjudgments that anyone else might fall prey to, but we have to learn from them nonetheless. Let me start with a story that gets me down and let you down. It is a story where i have too much faith in managements power to triumph over an objective tale. Im talking about johnson johnson. We finally threw in the towel and gave up position in the summer of 2023. Its because something changed in the company or in the industry or the stock hits our price target and we dont want to be greedy. We set price targets if you subscribe to members of the club. See, we care about chasing profits. But as we teach members of the club, which chronicles the moves of the trust and details any trades before the trust makes them, we care far more about controlling losses because when you control your losses, guess what . The gains take care of themselves. But we didnt sell j j because of the fundamentals. I still believe j j has one of the best pharma pipelines in the industry. No, we gave up on j j at a small game, mind you, because we were tired of being hostage to legal decisions that had little clue with the greatness of the storied company. J j was neck deep in lawsuits involving its talc powder. 20 years ago, i would have known instantly thats a asbestos lawsuits mean sell, but its been so long since we had one of these that i forgot how ugly it is. I thought j j lawyers had control of the situation because they had good resumes. But you could have said something about all the good defense lawyers that lost all thes a asbestos cases in the 80s. When these first exploded, i said i know how to deal with this. After a considerable amount of research, i thought j j acted in good faith. I was convinced there might not bes a asbestos in them to begin with. That was a misjudgment. Since then, there have been a seemingly endless number of cases piled against j j. While its one many of them, it lost big ones, including a 2 million judgment that made me believe i wasnt taking the plaintiffs side seriously enough. 20 years ago i never would have bet on a Company Involved in asbestos litigation. Thats a great way to light your money on fire. I forget the Great Companies that went under because ofs a asbestos. Deserves, of course, has nothing to do with it. 8. 9 billion to the plaintiffs as part of a global settlement that would have put this all behind them and put immediate money into the hands of the plaintiffs. Good for everyone. Many plaintiffs lawyers agree. I started feeling hopeful. Another mistake. The Third Circuit court in philadelphia, i found out later absolutely hates these kind of agreements, these bad settlements. Thats what they think. How could i not see it coming . Because j j lawyers were so optimistic. The Consumer Products division was hugely successful. We thought we were betting on the fundamentals of the company. But we were actually betting on the thing that controlled the stock, and that was the litigation. You never want to play that game. It is a game. A settlement would protect their shareholders through losses of the bankruptcy code. The fed sided with the plaintiffs against j j, so the company once again found itself at the mercy of the lawyers being suits for the extremely sympathetic clients. The court ruled j j was not in true financial distress, so it didnt have a right to the bankruptcy court. Thats when i knew it was another precision of hard to predict progress. Hence why i gave up on j j for the travel trust. See, it didnt matter i thought they werent particularly culpable. It didnt matter that the underlying fundamentals were terrific. What matters was through this litigation, they were potentially on the hook for billions and billions of dollars in losses. You dont want to have a position as precarious as the lawsuits, not because of the final rallies. This business is hard enough without playing litigation rou roulette. I dont want to wake up one day and discover some runaway jury, not the stockholders but the sick claimants. I have seen this happen several times where the company absolutely had it comes. I dont think j j is one of them. But so what . It doesnt matter what i think. It matters what the juries think. And you dont bet on friendly jurors when you are looking at ans a asbestos suit in a rich company. A well endowed company allowed them to file for bankruptcy. Given the nature of our legal system, there is really no telling how bad this one could be, which is why we had the travel trust done. Bottom line, i like betting on businesses, not lawsuits and lawyers who gain them. If you ever find yourself betting on a brutal set of lawsuits, dont try to fight it just because you love the company like i did with j j for so long. Believe me, there are better and easier ways to try to make some money. Lets go to eric in florida. Eric . Caller thank you for taking my call. Of course, eric. Whats up. Caller so my question. So you advise investors or home gamers to take their first 10,000 and stick that in a low cost index fund. Yes, i do. Caller my question for you is as home gamers build wealth over time, the waiting of that initial 10,000 from an overall portfolio perspective, if you are doing it right, you know, becomes less significant. What do you recommend home gamers maintain as a waiting in terms of that position . And would you also maybe advice adding qs or iwm . What a great question. I have to tell you yes, indeed. I think more about the smaller investor than i think about the larger one. But if you save over time, what you want to do is link it up so that about 50 of your portfolio at minimum is the index fund. And then you could have other stocks and maybe mix in bonds as you get older. But i do believe that the index fund is the bedrock. Thank you for recognizing that. Thats my feeling. Lets go to sean in m massac massachusetts. Caller thank you for taking my call. You talked a lot about s p 500 or something similar to. My question to you is should i change my Current Investments in my 401 k plan through my employers with a van guard index at 100 or split it up with the Current Investments i currently have in the plan . Look, i am very concerned. To me you want to be diversified. That means index fund best. But it sounds like you are doing it very right. I am incredibly concerned when it comes to retirement money. If you find yourself betting on a brutal set of lawsuits, please dont try to fight it because i did with j j. You must believe me when i say there are better ways to try to make money. Silicon valley bank to boeing, im sharing the pain i have experienced in the years i have been around. I have to tell you something the house of pain. The best strategy of how to handle it is what i will discuss tonight, so stay with cramer. Dont miss a second of mad money. Follow jimkramer on twitter. Have a question . Tweet cramer. Madtweets. Send jim an email. Or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. There are some things that go better. Together. Hey like your workplace benefits. And retirement savings. With voya, considering all your financial choices together. Can help you be better prepared for unexpected events. For a brighter financial future. Thanks. Ahh, pretzel and mustard. Another great combo. Voya. Well planned. Well invested. Well protected. aidyl hi, im aidyl, and i lost 90 pounds on golo. Voya. Well planned. I struggled with weight loss and weight gain my entire life. With all the yoyo dieting i did in the past, i would lose 20, 30, 50 pounds just to gain them over and over again. In one year, ive lost five sizes, and im on my way to lose another three. With golo, i can do it. announcer change your life at golo. Com. Thats golo. Com. In the market, just like real life, failure is a brilliant teacher. What can we learn from the failures over the last year . What do i need to atone for . Let me talk about one of my most eye catching fumbles. Looking for stocks that keep winning through the rest of the year. One of these stocks was a Company Called Silicon Valley bank which went on to collapse a little more than a month later. When i talked about it in february it was up 40 in the year and everything looked line. That was a huge and ridiculous mistake. Silicon valley bank experienced a bank run, kicking off the whole mini bank crisis for a year. I got thrashed all over the place. You know what . I actually dont care. Any one of these glass house critics could ever be. But i think its a teachable moment. Almost no one saw it coming. Thats no excuse. If you look before the collapse, it had buy or hold on it with an afternoon. Morgan stanley, congratulations. But even he had a 90 price target on this thing. Even the most negative was a 90 stock. And to be sure, its no excuse that everyone got it wrong. You dont watch a show about everyone. You watch the show because of me, and i let you down. In short, it blind sided everybody. How did we all get it wrong . Let me tell you a little story. Silicon bank really did have a fantastic business going. This company got its start as a normal Regional Bank in Silicon Valley thanks to its footprint in the land of invasion, it became the bank of choice for a huge chunk of our nations startups, including founders and top executives. In the end they were doing anything and everything for these guys, even lending them money using nonpublicly traded stocks as collateral. In more recent years, they went into research and Investment Banking all for the same time of customers. Given their relationship with tech startups, you had a lot of reason to believe their strategy would keep paying off. After all, for many years, it was incredibly successful. The average deposits grew from 20 billion in 2013 to 48 billion in 2018. And then 186 billion in 2023. And their stock caught fire along with the ipo market, skyrocketing to an alltime high of 763 right before the fed declared a war on inflation in 2021. Stock plummeted back to 200. Higher rates made it higher for startups to get funding and the ipo market shut down so the more mature ones couldnt become public. You dont want to be the banker when the ipo market is frozen. Like the analysts that covered this thing, i assume that was baked into the stock price after it plunged from 763 to under 200. It did. Why was i so optimistic it could go higher when i talked a month before it went under . Thats because the banking crisis came out of nowhere. Right after a Prominent Group of great analysts sold themselves to these guys. Theyre such smart people, i thought they would have checked this out better. I dont know. It seemed reasonable, but it was wrong. Remember, i need to get it right for you. Remember how 2023 started . In january we had weaker macro numbers which led many of us to believe the fed was winning inflation and could stop raising Interest Rates. They figured the fed right begin cutting rates at the end of the year. Although i never bought into that, thank heavens. If that scenario had unfolded, the ipo would have opened up again in the first half and svb would have been just fine. After all, they were in business for 40 years. The flatout wrong. First, not long after an illfated commentary, the Economic Situation turned on its head. We got stronger numbers and inflation started heating up again on february 14th. Valentines day. We quickly realized the feds far on inflation was far from over, something powell confirmed when he made harsh remarks on capitol hill. It is no coincidence that svb imploded days later. It had not one, but two problems and neither one were readily apparent until they smacked us in the face. First, the deposit base was way too concentrated in the portfolio companies. Second, they took this money and made some very aggressive investments in longer Term Government bonds so they got extra interest, investments under water because the fed rate hikes crushed places. Wait until maturity, get your principal back. Big deal. But when the depositors seemed to demand their money overnight, this company was forced to sell its bond portfolio at huge losses. In the banking business you need both a steady source of capital. Silicon valley bank had neither. A real bad mismatch somehow blessed by the regulars. Svb needed capital badly, but they couldnt raise it as they were coming fast and furious. Even being tweeted on like, hey, it is time to get out. The regulators see the bank closed. Better late than never, i guess. So thats what happened here. When we talked about svb in early february, we were giving our best opinion on the story with the information we had at the time, information blessed by the regulars. Shortly after the macro Economic Situation changed, i wish i circled back to this one and told you to forget about it at that point. But, man, none of the southeast analysts got this right either because svb wasnt that forthcoming about the level of risk they were taking. We only realized right before the bank went under. They were running their money in a way that made them insanely vulnerable to losses. I also didnt count on those that departed yelling fire in a crowded theater, of course on twitter. They practically willed the bank into existence. Who could have thought they would do that . We chose to rely on public documents that hadnt been vetted by regulars. We should have gone deeper than that because we came to learn while that regulators were strict, they were more lenient with banks nonsystematically important like svb. So many of us got it wrong because we relied on the regulators who were also wrong. Although, they have gotten a lot more aggressive once the horse had already left the farm. Still, it is no excuse. We need to be better than the regulators are, and in the case of svb we werent. When i get it wrong, i always atone for it. Mad money is back after the break. Every day, businesses everywhere are asking is it possible . With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Unnecessary action hero missing punches . Unnecessary check reversals . Unnecessary time sheet corrections . Unnecessary unentered sick time . Unnecessary go unnecessary go unnecessary when you can take this phone, youll be ready. Make the unnecessary, unnecessary. Let your employees do their own payroll. Your shipping manager left to find themself. leaving you lost. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire this is Spring Semester at fairfieldsuisun unified. They switched to google tools for education because theres never been a reported Ransomware Attack on a chromebook. Now theyre focused on learning knowing that their data is secure. while were on the subject of the mistakes i made and the desire to learn from them, we need to talk about some trust issues. Sometimes i am way too tough on management and sometimes i think they get too many free passes. Right now i want to highlight where i made a mistake. Sometimes a company is in such bad shape that there is no coming back from it, even if they bring in a tremendously talented management team. It is a process that can take years and years. It is not something you want to bet on out of the gate. Thats exactly what i did with footlocker in late 2022. He is a retail legend. She transformed ulta beauty into a powerhouse. By the time she retired in 2021, she is a legend. So when footlocker hired her, i figured she would be to breathe new life into it. We brought her on to the show. While she stressed it would take a long time, i thought she told a compelling story. She put the money where her mouth was. She had a plan to close down stores. I was confident she would meet her match against foot locker. Thats why we went as far as buying this one from travel trust in a small position. But we bought it. In retrospect, that was a huge error on my part. I knew turning around footlocker would be a huge task, but i had so much confidence in her leadership, i thought everything would be fine. Great management and how terrific ceos can accomplish things here. There are real world constraints on what they can accomplish. So the great man or woman theory of investing only gets you so far. Look, its not mary dillons fault i got this wrong. She didnt mislead us. When we paugt the stock, she hadnt been there long enough to accomplish her comeback. It was my screw up. While id love to pass the blame to my colleagues and the people who run footlocker, the buck stops here. I said turning around footlocker would be a huge task. No matter how great the ceo, they cant fight the laws of nature. That includes the mercyless laws of the retail industry. It went from 41 to 30 in the same session. But the august quarter made that look like childs play. I told members of the investing club that it would be a horrible quarter ahead of time. I had no idea how bad this could get. My first loss would have been my best loss. See, footlocker reported one of the worst quarters i had ever seen. Not only did their sales sink year after year, but their earnings plummeted 96 . That was an inline number because they understood footlocker was also. Management announced a pause in its dividend payments. Just a horrifying sign that the company didnt see anything Getting Better any time soon. A lot of people were in this one for the payout. And they immediately lost the best reason to stick with the stock. Dividend cuts suggest lack of confidence. That suggests a different kind of confidence, confidence that business will be awful for the foreseeable future. Imagine consumers as they go away from nike and a tough environment, one hurting their core lower Income Customers particularly hard. Mary dillon outlined her turnaround plan coming off a holiday season. But by the summer of 2023, the company had seen a weak start to an after School Season and a much more cautious consumer. As a result, footlocker aggressively discounted its merchandise. You know how bad that is and simply complete for market share. It got to the point where they were burning through cash so badly it looked like they would have to tap into a credit line to stay in business. They lost a third of its value. It is much worse than we assumed. Any potential turnaround would take longer than we were prepared to wait. Of course, by the time we figured that out, the stock came down so low that it didnt seem to be selling at all. But the worst part is i really didnt see it coming. I was blinded by the spectacular track record. It is not her fault that the stock got killed in the year after she took over. It took some time just sto access the full extent of the problem. I still believe shes a great ceo. However, i always tell you never want to own the best house in a bad neighborhood. One of our best rules. And footlocker wasnt even the best house in a bad house. It was a bad house in a bad neighborhood. It just happened to bring in a good contractor to fix things up, but there is only so much a contractor can do. When you are running a mallbased store base, it is insanely hard to launch a comeback. I should have learned this when i recommended Urban Outfitters after it peaked in the summer of 2021. Then i thought a mallbased stock like footlocker could be anything more than a product in this environment. I should have never stuck my neck out on this one because sometimes leadership is not enough. I had too much faith in a person, was too blind on what was happening from a Good Management team. And american eagle, one of my worst picks. The bottom line, management matters, sure. When you bring in a new pilot, they cant defy gravity. Foot locker was a disaster waiting to happen. That kind of comeback can take an extremely long time. We never should have bought this so early. Hubris is an awful trade when it comes to investing. I allowed it to cloud my judgment like a rookie would. Shame on me. Lets go to mike in illinois. Mike . Caller hi, jim. Thanks for taking my call. No, whats up . Caller im looking to open a 529 for my twoyearold granddaughter. Excellent. Caller and i wonder what your opinion is, where i should invest it, where is the appreciation for the 15, 20 years. Lets just start by building up a nice position in index fund. I think what you probably want to do, i might even put maybe 35 index funds before you even start thinking of some individual stocks. I just think it is very, very conservative time, and thats what you want to do. Index funds is the way to go for 529 plans. Vinny in connecticut. Caller thank you, mr. Cramer, for taking my phone call. I am a club member. If i buy an individual stock and it goes down, what percentage do i think about selling it . Okay. Well, look, if we change our thesis that you should sell it or if i say, look, i dont like this one. Im trying to hold it for the long turn, but its really rough, then i think you should sell it. Those are the guidelines. Thats what i standby. Irwin in new york. Caller hey, jim. How are you . Im okay. Not bad. Caller i have a question. I know you have a wide range of listeners and watchers and all different degrees of investment. Some small investors. Some are medium investors. I have i know you had to have people having more than five or six stocks in their portfolio. Thats fine. Thats fine. As long as you are excited about it. Caller i have ten stocks at various prices. I dont know how to balance the portfolio. Okay. Caller lets say i have ten stocks, and i have 10,000. Now, it is very easy to put 1,000 into each of these ten stocks. But that doesnt seem like it is an equitable way to balance a portfolio. Well caller what is the proper way . You know i like to rank my stocks. Not all stocks can be ones. Ones, twos, threes. Threes if they go up, sell. Ones you keep. Twos are in flux. Lets pit the stocks against each other and maybe just pick the best five. Universe is an awful trick when it comes from investing. You should never allow it to cloud your judgment as i did mine. It is a rookie mistake that even seasoned professionals like me often make. Watch more mad money ahead. I will revisit a couple more bad calls i made, including stocks in terrific Companies Like disney and boeing. Plus, jeff marks and i are about to take your questions about investing, retirement and more. So stay with cramer. You know when you have those moments . That time to reflect. To be like wow. What did i do to get here . city ambient noise right. Work. You worked hard and its time for a bank thatll work hard for you. Everbank brings security and a guarantee. That youll earn a yield in the top 5 of competitive accounts. Going, got you where you want to be. Were the partners for your next move. Everbank. Advantage, you this is american infrastructure, a prime target for cyberattacks. But the same aipowered security that protects all of google also defends these services for everyone who lives here. All night, i have been highlighting my biggest mistakes because i believe the only way you can become a better investor is by acknowledging your screwups and learning from them. I guess there is a little masochism in there too because they dont exist. We atone. We adjust. And we are all the better for it. Thats the mad money way. Has been since we started. Let me tell you, as much experience as i have, as long as i have been doing this, which is basically forever, you are never of falling in love with a stock. Let me give you a cautionary tale, my bad romance with disney. Not to totally mix diva references, but the stock saved demi lovato. Once it was at the end, the day i first met you, you told me never fall in love. Yet, did i listen to demi when i came at disney . No. Of course i didnt. Now, i fell in love with disney anyway. When you fall in love with your judgment, your judgment goes out the window. What happened . I made a judgment that disneys franchise is worth any amount of money between the theme parks and the streaming platform, everything on tv, i didnt consider a weakened Balance Sheet and bungling management could overwhelm this amazing companys franchise. We own it for the travel trust. We stuck with disney from thick and thin from early 2021 through summer 2023. The darn thing lost more than half of its value. Shameful. Even as the situation deteriorated and they were obvious to me, i refused to let this one go. No, pride. One of my favorite stocks to the point where i had one share of disney hanging in my office. You know, you give them disney. Get involved in the market. All nonsense when it comes to the losses we had here. This company did a lot of physi foolish things, buys fox in 2013. That turned out to be a massive overpayment i thought hurt their once pristine Balance Sheet. Second, they promoted a theme park by bob chapin from november 2022. They spent a fortune building out disney before wall street stopped judging subscriber growth and started caring about profitability. Chapin didnt get a bad hand. The moment he took over, the pandemic hit. But over time, i figured he would resurrect it, improve the Balance Sheet, restore its dividends. Instead, he seemed to loss control of disneys various divisions any time something went wrong. As this situation deteriorated, he increasingly became how about unhinged from reality . At least thats how it sat on the conference calls. He assured me things were Getting Better and he could turn the ship around. Like a sucker, i believed him. Finally disney reported a truly abysmal quarter which he tried to spin at a victory. At that point, i started calling for his resignation. It didnt take long for the board of directors to oust him and bring back his predecessor bob iger. The stock rebounded like crazy because of suggestions from activists were accepted. He spent the nine months steadily trending lower because the problems were too difficult to transcend overnight. I still believe disney has a great set of franchises. They generate a ton of crash. I think bob iger can turn things around especially now that hes working with smart activist investors to get costs under control. I could see iger making more progress with the Balance Sheet. With the acquisition of hulu can be bought without reaching. Thats the reason why we brought this to the travel trust. But it was a mistake for me to believe in disney when it was trading in the 180s. It was a mistake to keep giving bob chapin the benefit of the doubt when he did next to nothing to earn it. In the end, even the best franchises cant overcome cash flow shortages. Disneys illadvised purchase of fox should have made me cut and run. Made it a broken stock for multiple years. Now it is far more important than the franchise itself. Even when they brought in better management, it took time before the business kept turning around and the stock kept going lower for the better part of the year. No matter how fantastic a Company Might be, do not fall in love with its stock unless you give serious consideration to its Balance Sheet because when the Balance Sheet is bad, it is like marrying someone with horrible credit. You will be paying for that mistake for ages. Do i think disney will come back . Yes. Thats not the question. Why did i buy it so bad . I was obviously in love with a piece of paper, something that should have never happened. Mad money is back after this. Hows the chicken . The prawns are delicious. Oh, i have a shellfish allergy. One prawn. Very good. Did i say chicken wrong . Tired of people not listening to what you want . Its truffle season ah thats okay. Never enough truffles. How much are they . Its a lot. Oh okay im good, that its like a priceless piece of art. Enjoy. Or when they sell you what they want . Yeah. The more we understand you, the better we can help you. Thats what u. S. Bank is for. Huge relief. Yeah. Hi, my name is damion clark. And if you have both medicare and medicaid, i have some really encouraging news that youll definitely want to hear. Depending on the plans available in your area, you may be eligible to get extra benefits with a humana Medicare Advantage dualeligible special needs plan. All of these plans include a Healthy Options allowance. A monthly allowance to help pay for eligible groceries, utilities, rent, and overthecounter items like vitamins, pain relievers, firstaid supplies and more. 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So, if you have medicare and medicaid, call the number on your screen now and speak with a licensed humana sales agent. If youre eligible, they can even help enroll you over the phone in a humana Medicare Advantage dualeligible special needs plan. So, call now. Humana. A more human way to healthcare. There is nothing worse than making a call, getting something dead right and then just crushingly horrible execution. And you know why . Because you got frustrated or impatient, and you couldnt wait for your thesis to play out. Thats why we consider the classic unforced error that the trust made with the stock. Now, this was a core holding for the travel Trust Company coming out of the pandemic. As we told members of the cnbc investing club, we thought 2022 would be the year of growth. We figured they would get their aircrafts back in the sky and see a wave. This was ironclad for one special reason. No matter how badly doing screwed this up, and at the end of the day, there are only two major manufacturers on earth. The other being airbus. When there is a boom in demand for planes, airbus cant fill out of the orders. The airlines wait forever, but aalso buy from boeing. As long as you got into the stock at the right price, you were bound to a winner. The airlines would desperately need that capacity. Eventually the earnings would go through the roof. And, hey, whenyou take a long view, thats more or less how it played out. If you were smart about your engine point and bought going in the spring of 2022, you would have made a bundle over the last 12 months because of the post covid travel run that we were predicting. Problem is, we got it in much earlier. This comeback story ended up taking longer than we expected to play out. In the meantime, boeing continued to do what it did best, mismanagement so bad its comical. Except it is hard to laugh because planes can crash and people can die. Of course, i knew it was a clown show. No matter how bad they messed up, i saw a wave of demand coming from the airlines. I was sure a rise in tide for them. I was right. When boeing stock ran up in 2021, we got a nice dip there. That was back. Just patiently wait for the travel bull market to kick in, causing a wave of orders from the overburdened airlines. I had to plug my ears and just ignore all the negative press that boeing seems to generate. But, man, that is hard to do, especially when the company in question gives you a reason to sell. The border macro situation became more and more favorable to my bold thesis, boeing kept dropping the ball. Years into the horrific accidents, it was taking them forever to get the planes back in the sky. By the spring of 2022, when we finally gave up, thousands of these jets were still grounded. Even though the orders had started coming back. But just when it seemed like they almost finished fixing the 737, the federal Aviation Administration made them hold the dream liner, their largest commercial jet. From the spring of 2021 to the summer of 2022, boeing couldnt actually sell them to customers. China is desperate. Theyve got they havent flown a plane in china yet, and they need to show that if they have any fealty at all, boeing is the traditional way of our trading partners to send us an olive branch. Many congressional districts as possible. Boeing is also a defense contractor. So creating jobs for members of congress is how they keep the orders flowing. But our relationship with china never seemed to thaw, a huge source of frustration. If i stuck around since june of 2023, it paid off as boeing started making extremely optimistic relationships. But i didnt have the fortitude to wait it out. I just couldnt take the house of pain. In january of 2022, boeing recorded a hideous quarter. Skyrocketing labor costs, nasty costs and the company taking big charges. Now they have a 1. 5 billion charge from delay of the 777x. They even messed up on the air force one contract. At this point, boeing had huge credibility problems and the stock came down to the 120s. What does management do to fix things . They decided to move the headquarters from chicago to washington, d. C. Finally, i gave up. The endless trip of bad news and botched quarters was like torture to me. So we sold boeing in the spring of 2022, right when we should have been buying it at discounted prices. What did i do wrong . I didnt have the patience or the pain tolerance to stick with my original thesis, which was dead right all along. That was ammunition for us. No matter how bad these guys drop the ball, boeing will make up for the bull market. Sure enough, we sold our final shares in boeing at 121 in midmay of 2022, which is only a few points above where the stock bought them. We would have seen this stock shoot above 200 as the bull thesis played out perfectly. The less son here, if you believe in your own thesis, you cant let the nay sayers scare you away. I knew it was flooded with demand because of aircraft. Did i miss a spectacular rally here because i didnt trust my own work and couldnt take the pain . Heres the bottom line. The moral of the story is simple. If you have a thesis that looks like it is going to play out, dont let its unrelated negatives scare you away. Boei boeings performance was not a reason to sell. It was a reason to buy, but only if you had the fortitude to stick with it, and i didnt. But stick with it. Meet gold bond daily healing. A powerhouse lotion that moisturizes, heals, and smooths dry skin. With 7 moisturizers 3 vitamins. And. New gold bond healing sensitive. Clinically shown to heal moisturize dry, sensitive skin. Gold bond. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. I always say my favorite part of the show is answering questions directly from you. Tonight im bringing in jeff marks, my partner in crime. He will help me answer your most burning questions. For those of you part of the investing club, he will need no introduction. For those of you that arent members, although i hope you will be soon, i would say he helps me do a great job on mad money viewers and members of the club, and i think that i need the yin and the yang here. Why dont we get started . Were starting off with pete many michigan who asked bulls make money, pigs get slaughtered, how does this apply to the dont trade it stocks . A lot of times a good day for nvidia, a bad day for apple, it challenges these. When i come back and say it is okay to have a cheat day. This is what i have been working on. Yes, we have been pigs theoretically in apple and nvidia. But what we find is those stocks are not piggish if we look in forward numbers. So it looks like nvidia is expensive. Then it turns out that its cheap and it justifies owns it. Does it justify keeping this much . Thats a subjective question. I have often felt that its okay to say, all right, we say own it, dont trade it, but you can trim. I have been reluctant to do that. What i would add to that is when we do look to it, usually at a certain point when the stock becomes too large as a percentage of the portfolio due to that outperformance. Of course, we usually have it around 33 stocks in the portfolio. And nvidia, sure. When one of those apple, just to pick on apple, whenever it gets too large as a percentage of the portfolio, we trim it back because it had a good run. Thats not it doesnt deviate. It is a nice discipline. All right. Next up, were taking a question from mike in florida. I have been doing a lot of profit taking and im 50 cash. Should i get back in . At what level should i start buying . Here is the way i look at it. Go back. Im not saying right now. Im saying when we have these situations where Interest Rates have spiked, when the market is very oversold on our oscillator, which we have a special deal with for our subs, then you need to pick. But the market must be down. We dont pick high. We pick low. And thats why you have money in cash. Im not saying go take that and throw it in the market. Im saying gingerly apply. No, thats exactly it. You want dollar cost average, if you do have that large cash position, dollar cost average into the market. Do it on some type of regular schedule, what works best for you. Thats what i think. Every two months with a paycheck, monthly, Something Like that. And that way you will get the best prices over time. Right. And, remember, when you have these situations where everything is going wrong, it only takes one thing to go right, and then the shorts who have had the run of the place changed their mind. So you want to understand when you earn 5 , that means you will miss some opportunities. Now, 5 is great if you are already rich. 5 doesnt cut it if you are not. How about a barbell . Some 5 and some stock. Lets take a question from bennett who wants to know what is the maximum explosion to any sector or stock . We dont want more than, say, 10 in one stock. The sector is a little harder. Yeah. Well, look, you can always try and follow the s p 500, but be overweight, underweight based on your convictions in those stocks within those sectors. I will give you a good example. Entering 2023, we didnt own any real estate or utility stocks in the travel trust. Why . We listened to the fed. The fed said they needed to raise rates. Keep rates higher for longer. We know those stocks tend to underperform as rates go higher. Of course, you could always do mixing and matching within it. Track the index. Precisely. I hope all this helped you. We try to do, of course, much more than this with the club. But these are the questions we answer every day and we use stocks were buying from the travel trust as more of the teaching moment. But this is representative of what you get. I like to say there is always a bull market somewhere, and i promise to find one just for you right here on mad money. Im right now on last call, when will it end . The House Speaker crisis somehow getting more chaotic. We will dwoe live to capitol hill. A seismic shakeup for real estate, why the government may have commissions in the cross hairs. Waving the ev white flag, a shock over the electric car future. House prices headed up and up and up but one American City is kicking all all others to the curb. And a new king of media is