Transcripts For CNBC Mad Money 20131024

And everything we loved buy, buy, buy. Sell, sell, sell we now hate. Some stocks, the cyclicals and especially the oils were laid to waste while others, the Consumer Product stocks roared higher almost regardless of how theyre doing. All this action is masked by the averages. The dow sank 54 points and the nasdaq declined 5. 47 and underneath the market is seething and roiling and you know what . Its begging for prognostication. So what is going . Why are we tossing out the Natural Resource stocks and embracing stocks that do well in the slowdown . Three reasons, the United States, europe and china. Big reasons. All of the three legs are developing some chinks and theyre showing in a way thats freaking out owners of stocks that we havent seen since Interest Rates started to soar in the spring. First, as has been the case all year, everything comes down to this darn bond market. Interest rates which seemed to be on the brink of busting out of levels we havent seen in ages are on retreat at a pace that we only see when the economy is going into a real slowdown, if not a recession. Let me say immediately, i dont think were going into a recession. We have seen no Earnings Reports that indicate were going into a recession. Other than the disater of the day sell, sell, sell. Caterpillar, no company of any standing has complained with any real weakness of the economy. We keep getting surprised by the strength. When it comes to taking cues you have to understand that gentlemen prefer bonds. They turn heads and heads are being spun by the incredible rally in the bond prices. You can monitor those by how well the tlt is doing because the advance in bond prices with the concomitant decline in yields is saying that demand for money has indeed dropped off a cliff. You simply dont get these gigantic kinds of moves in Interest Rates with the tenyear treasury now under 2. 5 when it was about to break out above 3 not that long ago, unless somethings gone awry, and not just here, but there and everywhere. Lets go over whats hitting it with the three legs. The first, the United States its pretty darn obvious, right . The confidence in our country has been shot by the brouhaha in washington. Theres a tacit recognition that everything is going wrong from the botched Health Insurance website, can you believe that, to the obvious can kicking to the debt ceiling in congress. Investors believe that whatever weve seen and heard from optimistic managements this quarter has to be discounted because nothings been learned in washington and history is going to repeat itself, and they will sink below. They dont want to win us over. Second. Europe has been a terrific boost to Global Growth as of late. The bank has been incredibly easy on the continent. Looking the other way at the neerdowell bank, maybe its time to pay the piper and the central bankers want the banks, many of which would have been shuttered if they were in this country to raise some equity. That will slow things down for certain. Finally china which has been seeing a skein of better than expected orders and Economic Growth has a pushback from its own central bank which didnt inject reserves and the heavy lifting is done and its time for the economy to fend for itself, given that china exports 25 of its goods to europe and europe might be slowing down, that doesnt bode well for global demand. Now the question is demand for what . We know the bonds are saying there is going to be less demand for money, hence the decline in Interest Rates and more important in commodities. The most visible commodity being hit right now . Oil. Thats why we seem to have lost one of the most products to this market, the oil and gas stocks. Weve seen oil go down for days and days, but the stocks werent being clipped and now the decline is striking fear in the stocks that bid the stock up endlessly and oil has further to fall. Commodities are often traded on a technical basis and the chart of oil says its not stopping here. According to the chart, crude goes on 93, and one of the most ebullient parts of the stock market is being torn asunder right in front of us. Too early, people, to step in and buy. What else tells us that demand for commodities could be cooling . How about caterpillar . You dont get such a hideous decline, and it was about how poorly commodities are doing and theyre get worse and not better and thats more fuel to the fire and i dont want to go into how poorly managed cat is right now. I just will say in their defense that their machines are still the best in the world. Theres been a spate of Technology Companies reporting that havent had much good to say and broadcom and altera remind us how fragile theyve been and akamai are further reminders of the fragility of tech and much of the Government Spending component and needless to say, when i mention the word government that means shortfall. Money isnt idle in this market and it always is seeking whats working. Its taking the other side of the trade right now, so if commodities are coming down then the users and the buyers of commodities, how about the makers of consumer goods like hain celestial and cocacola, the spice company, kimberlyclark and kellogg. The stocks are all going up and money also seeks what will be working and not just what is working but what will be working. Houses and loans got too expensive and housing prices seem to have plateaued and Interest Rates have gone down enough to give buys are a Second Chance and Mortgage Rates are cut next week. Those that didnt act can be enticed again and the housing stocks are rallying and d. R. Horton, and home depot are starting to go back up after a reported great quarter and the markets also pull toward safe, nogrowth stocks and secular supergrowth stocks and the barbell that i often talk about and that always happens the moment the economy stalls out. Remember, secular growth keeps going even when general demand goes down, bringing the cyclicals. We know google has it because its figured out how to make money on mobile. I told you the stock isnt done going higher and it still isnt. Apple has secular growth because the tablets look like they will be another hit on top of the iphones and of course, they report next week. There are always guys saying the chart looks bad, this or that. I remain convinced that the stock is cheap and i dont like the stock that is generated by a tweet, though. How about boeing . We know from its Earnings Report and Conference Call that the Airline Super cycle is alive and well and its just killing it. Jim mcnerney, what did i tell you, the ceo, is he bankable or what . And what noGrowth Companies do okay when rates go down . Utilities, and thats why we keep them front and center. American electric power did amazing. Con ed, dont forget duke. Theyve done well since rates peaked and they will continue to do so until rates trough. We have a rotation out of what works when rates are going down and it will most likely continue as long as Interest Rates in oil continue on their downward trajectories. The problem with these rotations, of course, is that we dont know which is the stuff were throwing away or the stuff were taking in and perhaps thats why i always fall back on being diversified. You get less pain, and less pleasure, but sometimes thats the best way to make longterm money. We arent sure when the honeymoon will be over with the newly loved stocks and if theyll be over soon. We do know that the ink is hardly dried on the divorce decree or the marriage certificate and we could be off for a couple of more days until europe and china arent going the way of the u. S. If they arent, and i doubt they are because the communists and socialists arent as dysfunctional as the pseudocapitalists in washington and thats whats tossed today. It will soon be a buy and thats why the bottom line is if you pick stocks based on aerospace and the internet and you match them with companies that thrive in the Slower Economy along with the companies that thrive in a fast one, you hardly notice the turmoil today. If you go toward commodity growth you pay the price. Remember, it is never too late to be more diversified with best of breed stocks that have the commodity winds at their backs and not in their faces. Alex in new york. Alex . Hey, jim, coming to you from syracuse, university. I love that the orangemen orangemen stay focused. Go orange theres been a boom in Oil Production in the United States. Refiners have lagged the general market rally, so is now the time for american refiners to shine and more specifically valero . I think there was the time now. Valero has had a big move up as has holly. There was a moment where that was the right trade and we are no longer in that moment. We have to wait for a pullback. I want to go to don in new york. Don . Hey, jim. The symbol avax and its gone down 35 over the past two quarters, id like to get some insight, basically its short term and longterm outlook and at the current price which was told to accumulate. People did not like the revenue games there. They were pretty slight actually. We can do more work, but remember what we do say is that these Small Companies in that particular segment, we think and its the test analyzer, we think may be under some pressure, we can do more work, but that quarter was not what people liked. What we loved, we hate. When we hated we now love, sister, mother, sister, mother, diversification, once again, is our only free lunch. Mad money will be right back. Coming up, fire extinguisher . Palo Alto Networks had a red hot ipo but this firewall operator has cooled off since its initial spike. Is the decline offering an opportunity to buy into the next generation of Digital Security or will this wall come tumbling down . Find out in cramers exclusive. And later, tea time . This is not your mothers lipton tea. While the Worlds Largest coffee chain stock flirts with alltime high, its adding another flavor to its business. Will starbucks big plans for tea help keep it caffeinated . Dont miss cramers oneonone with Ceo Howard Schultz from its brand new flagship store. Plus, eco impact. Stress in our nations finite resources demands our next generation way to monitor every drop. Cramers finding out how Smart Grid Technology could power the future and which companies are leading the way when he heads off the tape. All coming up on mad money. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. [ horn honks ] [ passenger ] airport, please. What airline . United. [ indian accent ] which airline, sir . [ passenger ] united. Whoa taxi [ british accent ] what airline, then . [ passenger ] united. All right. [ spanish ] what airline . [ passenger ] united. [ mandarin ] which airline . [ passenger ] united. [ arabic ] which airline . [ passenger ] united. [ italian ] where are we going . [ passenger ] united. [ male announcer ] more destinations than any other airline. [ thai ] which airline do you fly . [ passenger ] united. [ male announcer ] thats great, big world friendly. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the american people. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try it today. Is it time to circle back to palo Alto Networks . Heres the next Generation Network Security Company with proprietary fire wall platform that allows them to have customized control over how their employees access through the internet. It came public at 42 with a bang. It rose over 26 in its first day of trading. The stock soared as high as 62. Since then the highgrowth, highmultiple tech stock has been a house of pain. The company stumbled when it reported in june. The most recent results in september were much stronger, inline earnings and they were up 7 year over year. After the insanity of the last six weeks its gone back to where it was before reporting. Palo alto gives strong guidance and the companys taking share. So what should we do with the stock . I think we need to do more homework. Hes this chairman and president of palo Alto Networks, mr. Mclachlan, welcome to mad money. Hi, jim. Glad to be here. Thanks. You guys are the cutting edge company, and in the most recent Conference Call you talked about replacing checkpoint with the Semiconductor Equipment company and you replaced cisco and a large Insurance Company and you were able to get into a larger european broadcast company. Give me your pitch about why you can topple a company like checkpoint that we regard as premiere and cisco which everyone says its best of breed. We developed the next generation Security Platform and thats the only thing in the market today that can have applications on Enterprise Networks and from a Cyber Security perspective, applications are the main way threats are getting on the networks. We have the next generation platform which is rapidly displacing all the Legacy Technology in cisco, juniper and checkpoint are using an old traditional platform. Do we have to worry about juniper . Jefferies says your litigation with them could be heating up, Summary Judgment in november, and this is something i want our viewers to realize that you could be living with for a long time. The litigation is what it is and we cant talk much about that. We are paying attention to the business which is growing very well because were delivering the best security in the market today. Global protects subscription, when a remote user logs into the device, it has the roaming devices that have a secure connection. How are the bad guys able to get in then because we know bad guys are getting in . They realize that the best way to get into an enterprise is through applications and that can be from a mobile platform and it can be from a desktop. We build as a platform that can cover from the data center to the perimeter and all of the way down to all of the mobile devices as well and were protecting the entire enterprise all of the way from mobile devices and all of the way to the data center against the Application Center and threats. I always thought blackberry had the secure system you didnt have to worry about. If someone has blackberry, they still need palo alto . Yes, you do. Not in necessarily because blackberry may be insecure. One of the more secure systems from the phone perspective and you need palo alto, because theyre coming from all sorts of places and mobile, and just one of those threat factors. Okay, on your Conference Call which was september 9th which was kind of a different world, your cfo, Stefan Tomlinson said with the government year end coinciding with the fiscal q 1, were anticipating to see decent growth in the federal business. Since then the world fell apart in washington. Can you still stick by that statement . Generally, the Public Sector has been a very strong vertical force. No vertical represents 12 of the business and if you look at what we do for a living theres a strong need for that in the Public Sector and the government space and weve done very well there. In other words, i dont need to worry that they shut off the spigot down in washington. Its business as usual when it comes to network security. It never helps anybody in government shutdowns and if you put that aside its a temporary thing. Big picture it was a pressing concern for the government and we have a platform that can really help. The group that youre in. You can say yours isnt and its prone to shortfalls. Given the secular nature of the bad guys always trying to crack in, why is this business so quarter to quarter for so Many Companies in your industry . Well, generally its because theres a cap ex expenditure that goes with buying networking gear, so there are ebbs and flows in capex expenditures as Companies Budget for those things, but as a general matter, cyber securities are a growing concern and the top three priority in the boardroom and i would expect them to increase over time. Thank you so much for coming on to mad money. Thanks for having me. Thats mark mclachlan. The greatest secular trend in the world, bad guys are breaking into your system. Palo alto has a solution. Stay with cramer. Coming up, tea time . This is not your mothers lipton tea. While the Worlds Largest coffee chain stock flirts with alltime highs, its adding another flavor to its business. Will starbucks big plans for tea help keep it caffeinated . Dont miss cramers oneonone with Ceo Howard Schultz from its brand new flagship store. One of my favorite Growth Companies is doing something brilliant. Tomorrow starbucks opens its very first teavana tea bar on the Upper East Side of manhattan. It was a place where you could buy tea bags and tea pots and not actual drinkable, on the spot tea. Starbucks is rolling out an entirely fresh concept that gives it one long lasting growth driver on top of the many others that have propelled the stock to 80, up 20 from the last time we spoke to the ceo just in the end of june. Now i had a chance to chat with schultz and get a sneak peek at his brand new tea bar. Howard, this is a different store. A lot of people told me why do they need teavana, they have already have starbucks, why dont they just run tea . I dont think so at all. Weve been in the tea business. In 1971, starbucks was coffee, tea and spice, but coffee completely dwarfed the opportunity for tea to have a real place at starbucks, and if you look at the category, and people dont really believe or understand this, its a 90 billion global category, twice the size of coffee on hot and cold that we strongly believe is rife for innovation. So we want to build the kind of stores that showcase these fine teas, that create a beverage opportunity where we can sample beverages and create a new destination for teavana in the morning, and bring to the tea category in a sense the romance and theater of what we did for coffee over the last two decades, and i think also unlike starbucks, where we spent two decades in the u. S. , teavana will be a Global Enterprise where we will leapfrog to places outside of the u. S. Before we go national throughout the country. Were not used to paying triple venti cappuccino with skim wet 5. 75 prices for tea, but i notice your prices are elevated. Whats the value added . Well, this is not your mothers lipton tea, in all due respect, in the same way it wasnt sanka or nescafe. Were you at my house . What were bringing to the tea category is fine, exotic teas and the art of blending and introducing flavors and profiles that people have not had before, and the customization. You will be able to come in here and we will blend your own tea and customize it for you. This is going to become a Meeting Place and it will become a ritual for morning tea and all afternoon, as well, and it will take on a life of its own, but it is a different kind of environment and a different kind of pace and we could never have done this inside a starbucks, but it does capitalize on all of the capabilities and disciplines that starbucks has honed for 40 years. Real estate acquisition and real estate design, sourcing of a commodity of highend tea and Retail Operations design, theater, romance, this is who we are. Panera reported last night and you and i think the world of ron shake. They talked about throughput problems. Chipotle, another management team, really extraordinary. Before they got back onboard there were problems particularly at lunch. I look at this and say this is a complicated deal, howard. How will you get people through the store in time to make enough money . Well, unlike panera or chipotle or for that matter starbucks, the average sale at a teavana store will be higher than the average sale of starbucks or the ones that youve mentioned, and so we do not need the number of transactions in a teavana store, however, the beverage component is going to drive incrementality, but this is a different environment. Its more merchandise. Its more highend tea and as a result of that well not have a throughput issue. With regard to throughput, i will stay that starbucks cracked the code with that over the last three years because of the loyalty card and because of mobile platform. We are now processing at starbucks almost 5 million mobile transactions a week, and clearly, there isnt a company in second place that is even processing a million, and that gave us the ability of speed, customer service, automatic reload and higher average ticket. Speak demographically. There is a movement from whole foods and chipotle that you want to be good and good for you. A lot of people feel that tea is better for them than coffee and obviously worldwide, tea is a first drink in many different places. Why not make the centrality of teavana india or china and then come back here and reverse the product . Well, i think given the infrastructure and resources that we have available in the u. S. , and the fact that teavana already has 350 successful mall stores, we believe that weve got the opportunity to leverage all of that in a way that we can do it and its very consistent with the core strategy of starbucks. One thing that people should not take away, this is not a distraction. This is absolutely part of the strategic opportunity that starbucks has to leverage our core capabilities. Weve been in the tea business and we will just elevate it and bring innovation, the likes of which has never been seen in the tea category before. News in china, obviously. We know that at times the chinese seem to want to pull back from certain american enterprises. You have to do certain things that they want. A teavana initiative in china, right time or wrong time given the resistance youre getting about the labor cost and the heightened notion of starbucks on the radar screen . I think this is a Good Opportunity for me to explain it and probably dispel any concern that people have. Anyone who is doing business in china, especially on the consumer side, understands that navigating through all of this at times can be challenging and you can misunderstand the situation. What has occurred here is that we do charge slightly more for products in china than we do in other markets. Were not hiding behind that. Weve been accused of something, and in the last 48 hours weve explained it and i think weve explained it to the right people. The cost of doing business in china for starbucks in setting up that business, in building the infrastructure, in building the supply chain and investing ahead of the growth curve for thousands of new stores has put us in a position where our cost structure and what we charge for products in china is slightly more. It is on par, though, with our competitive set who have matched us, but we have 20,000 employees in china and we have very good relationships at the highest level with the Chinese Government officials and other constituencies in china. This is not a yum situation, and were going to be able to overcome this with great respect, and most importantly transparency, and thats what weve done over the last 48 hours. With regard to your question about teavana, i wouldnt be surprised to see teavana open stores in asia over the next couple of years. Venti cappuccino, there versus here. Maybe 20 or 30 cents more. Thats all . Thats all. For teavana, ive met some people behind it. There are teaologists and people that are highly skilled. Danny meyer once told me he was concerned that starbucks would not be able to find enough educated labor force in america to be able to open starbucks all over the world and completely disproved. Are these harder places to open and a more difficult step . I dont think its harder, but i think it requires a level of sensitivity that tea is not coffee. It is an exotic beverage. It is fine leaf tea. It needs to be nurtured. It needs to be taught. It needs to be sampled, but again, going back to what i said earlier, this is not a high transaction business, this is not speed. We need to nurture the relationship with the customer and nurture the relationship with the staff. The training and the investment we make in our people is something that well obviously do with teavana, but lets not lose sight of one thing. Teavana has been doing it for 15 years and doing it well. We will enhance the quality of the brand and the experience that only starbucks can do. Tomorrow morning, 84th and madison in new york city, this store will open. Will this immediately be perceived as another third place and how is this third place different from starbucks third place . I dont think this will be a necessarily third place. I think it could be peoples first place. The store is beautiful. Id like to live in this place. The architecture is stunning. Its beautiful. I think people will use this for many different occasions. I think we are going build a morning ritual for tea that doesnt exist anywhere, and i think you will see mothers, you will see people on dates, and i think there will be a lot of curiosity about people really not knowing that much about highquality tea and making it at home and we will provide a primary level of education and tutelage. Okay. Education and tutelage. Also, will there be a moment here where you will also have a petition about bringing people together . A new starbucks initiative and a lot of people in the country are ready for it that may not have been ready before the debt ceiling and budget shutdown. No. I think teavanas brand and position needs to be viewed and judged on its own merit. Okay. And if starbucks enters things i think that will be skewed toward starbucks. Do you think is there any way, could someone cynically say you know what, that petition brought better samestore sales for starbucks. I can assure you this was not about marketing and pr. This was about the conscience of the company and recognizing that america in a way has been losing its conscience and we as americans should not be bystanders. Walmart, costco, target, big employers, any feedback from them, are they going join the cause . Because their samestore sales have been hurt. I talked to over onehalf of the dow 30 ceos leading up to the call together. Okay. We had many of them join the petition with us. I think everyone i talked to, 100 of the ceos i spoke to felt the same level of concern, disgust, shameful performance, and we need to do something about it. I hope they stand up. Youre obviously, youre right now, i think somewhat alone in this effort. Sometimes we need somebody to lead others. Thank you, howard schultz, chairman, president and ceo of starbucks. Teavana, tomorrow morning at 7 00, madison avenue . Thank you. That was great. Thank you so much. This veterans day, mad money honors those who defend our countrys freedoms by helping defend their financial futures. If you or someone in your family is proudly serving or has served in Americas Armed forces, we invite you to join our live studio audience on november 8th for mad money invest in america salute to the troops. For tickets, go to madmoney. Cnbc. Com. [ male announcer ] more room in economy plus. More comfort, more of what you need. Thats. Built around you friendly. Diarrhea, gas, bloating . Built aroconstipation,dly. Yes one Phillips Colon Health probiotic cap each day helps defend against these digestive issues. With three strains of good bacteria. [ Phillips Lady ] live the regular life. Phillips. It is time it is time for the lightning round on cramers mad money,. Rapid fire calls. Buy, buy, buy. Sell, sell, sell. Play until we hear this sound and then the lightning round is over. Are you ready, ski daddy . Its time for the lightning round on cramers mad money. Lets start with ed in new jersey. Ed youre doing a great job and ive even subscribed and ive got all your stuff going on. Youre great to be a subscriber. Appreciate it. My question for you, i have three stocks with the same question. Agco, rite aid and rvs, all of them with great profit in them. Okay. Those are all stocks, sir, that are very, very speculative. We know that opco coming in and i think the breakup value is very big. Rite aid, i think that one can come down before it goes up. The stocks are taking it on the chin right and you have to bear with them before they reload. Eric in illinois. Eric boo easy from the windy city. Thanks for taking my call, cramer. Im inquiring about omer. When i recommended last week to take profits in a lot of the small, speculative biotechs, thats what i want you to be careful with. Thats one, theyre up more than 100 and i think that what you have to do is take half and book it so that you do not give up that gain up 107 . Lets go to venu in illinois. Hi, jim i have shares of zynga and groupon. I was just wondering what you thought about it. I like groupon. Zynga is a cash value play. Groupon has a really good ceo and these are speculative situations but i do believe in them. Lets go to mark in nevada. Mark . Hey, how are you doing, jim . How are you . Im doing fine, thank you. Ive got a question about molycorp. No. Balance sheet doesnt have it. Lets go to jill in pennsylvania. Jill . Go ahead, jill. Jim, booyah. Booyah. I want to know if a couple of months ago you said was a hold. Should it still continue to be a hold . It had a move and they brought in new management. I dont want to overstay my welcome. And the old pitney bowes was not doing right and their they seem very together and that, ladies and gentlemen, is the conclusion of the lightning round the lightning round is the lightning round is sponsored by t. D. Ameritrade. Ly. A tough day like today reminds us if we can isolate Great American companies and just own them without the regard of the day to day vicissitudes of the Global Economy we can stand to gain much longer than those that roll the dice and risk it all what could be a fad or trend that might end at a moments notice. We here at cnbc are isolating some of the companies and you need to know about them and it is a privilege to be able to shine a spotlight in this nohuddle on Johnson Johnson, the best Pharmaceutical Company in the land with fantastic management, the best Balance Sheet and the fastest growth of any of the major drug companies. Those who watch the show know i like nothing more than to find companies that give you lots of ways to win, and that is Johnson Johnson to a t. Its gone from being poorly managed, and ever since William Weldon over the worst manufacturing bungling of any industry since the start of the new millennium decided to spend more time with the family and alex gorsky took over and the stock is up a fabulous 31 and you know what . I think its the beginning of the multiyear, not multiday, multiyear move. It has the best growth and its accelerating. We love accelerating Revenue Growth and thats whats so crucial is that this market thrives on growth and thats the best Balance Sheet in the industry. Say j j and the revolutionary antiblood cancer drug, and i think this drug which has shown an incredible 68 Response Rate on nonhodgkins lymphoma could do 6. 5 billion in sales. If the drug is that good, j j can just buy the whole company, a luxury most companies do not have. They create massive value by splitting themselves into three pieces. The Consumer Products division, also includes rejuvenated tylenol provisions under the regime and a best in class medical Device Division and the pharmaceutical business with the biotech kicker. Medtronics today of late and st. Jude, remember we interviewed jude, remember we interviewed them last week, its for new medical device stocks and the Consumer Products companies have caught fire in the last few days and its spun out and its just pristine and it could buy a host of companies to become a real consolidator in the space. The j j drug company has shown so much better than the slow growers like merck and pfizer, and it can give you the same awesome yield. There is just that much cash and sometimes were being given a real gift by the likes of having even a stock like j j. I always felt that the first stock i ever used when i was at Goldman Sachs selling stocks to wealthy individuals. We get that Balance Sheet, that cash, those drugs and the aaa Balance Sheet and the lineup of drugs, the brand names and we get that ceo all pulling for us, perfect in a slow growth atmosphere where were always one step away from recession. Heres the bottom line. J j makes you wish for a selloff to create for a buying opportunity and unlike so many other stocks, you can buy Johnson Johnson without fear and without worry that the stock will ever sink back to where you bought it again. This stock is a buy every time it goes down. With alex gorskis j j, this is the best buy and hold, a term i dont even like. Lets go to alan in new jersey. Ive been watching you since you were with larry. Larry kudlow i was watching him at the stadium and i probably even bought ice cream from you upstairs. So we are good fans of the eagles. Yes, when they were in the Frankford Yellowjackets i loved them. Jim, a while back someone called you and asked you about preferred stocks and you said yes, but banks only. Im looking at something on barrons here and they said the repackaged securities. There is a bkrhinco, and is it berkshire and if it is, would you buy it . Let me just say, the preferred. There are several Bank Preferreds that i do like, and what i was recommending is an etf Bank Preferred is the best way to do it. In other words, you dont necessarily want to have one preferred. I like to have a basket of them, and if you want to learn more about it, getting back the exact status and what you need to own when it comes to Bank Preferreds. All day we at cnbc have been highlighting americas favorite stocks. We had j j in our sights and the Balance Sheet and management is looking strong. I say up, up and away, j j. Stick with cramer. Mad about mad money . Immerse yourself into cramers world while you watch the show with zeebox on your phone, tablet or on the web, get sneak peeks and go behind the scenes and join the conversation. Download the free app today for the ultimate cramerican adventure. Huh. Fifteen minutes could save you fifteen percent or more on car insurance. Yep, Everybody Knows that. Well, did you know the ancient pyramids were actually a mistake . Uhoh. Geico. Fifteen minutes could save you. Well, you know. Were trying to get a better understanding of where particular industries are headed and sometimes in order to get your head around Cutting Edge Technology you have to drill down with privately Held Companies even though theres no way yet to invest with them directly. Thats why were going off the tape with census, one of the advanced metering infrastructure and an automatic meter reading business and sometimes you describe it as the smart grid. Census helps everything from water to gas and electric and heat and utilities by providing them about advanced measurement, Data Collection and control capabilities. It makes it possible to read your meter remotely and letting them conserve power or whatever theyre selling. Which helps customers save on their electric bill or gas bill. We want to dig deeper with the chairman of census and a respected Business Leader who was he ceo of Sears Holdings this year. Before that he was the ceo of avia and he worked at ibm and yes, hes a philadelphian. Welcome to mad money. Thanks, jim. Pleasure to see you. Pleasure to see you. We know from our work with honeywell and we know from our work with eaton that the greatest thing we can do in this country in term of saving energy is not finding oil, but its saving it for the buildings that are already there, but are there enough incentives to make it work . Several years ago the government had a large stimulus package, and obviously a lot of that was targeted towards a smart grid. Today theres very little government funding, but theres justification unto itself and when you employ smart meters you save money and grow revenue. Yes you provide society benefits as well, and if you think about it, all of the trucks that have to roll to check your meters. You dont need those any longer. A line goes down and you used to have to wait until someone calls in. You can put that line up and you can get the people back online much more quickly. The benefits, whether its saving costs and growing revenue and increasing Customer Satisfaction unto themselves makes sense. The justification is there. Its pretty clear that some of these state commissions arent sensitive to what youre talking about, and maybe the utilities should be given more money and a bigger rate increase if they do this stuff. Whats the incentive in the system . Well, the incentive in the system is frankly at the end of the day to help consumers. Let me give you an example. Go to the United Kingdom. The United Kingdom Just Launched a program to reduce Carbon Emissions 20 in the year 2020. Everybody around the globe bid on it. Census was the only north american provider to be part of that deal. What does the uk think theyre going save . Do you have any estimate . 10 billion. Why are they going to save the money . Because now the consumers armed with the data of how theyre using their energy, when they should use their dish washer or their washing machine, 8 00, 3 00, et cetera, information goes a long way. By adjusting now their Consumption Habits they will benefit significantly. You talk about the commissions as advocates to consumers, the consumers benefit. So do the utilities and the consumers do as well. How do you compete against it . Silver spring networks, hot as a pistol and they got 32 of the market share and how do you defeat them . Youre a private company. First of all, we are a multiple in terms of the size of silver spring. Notwithstanding the fancy press release. They do have them. It looks good. Good writers. It looks good. Ron has a history in the meter business. Silver spring is new to the party and they come from the technology base. What we bring at sensus is the combination of both. We have utilities of gas, electric and water, plus have the leading technology in the industry. Okay. So we believe its a false dilemma in terms of should you start with someone who has a background in utility and meters or technology. Its a false dilemma. You go with sensus and you could get both. You were trying to, when you were at sears, inject technology. Did it have an impact at sears when you were there . Its all about information. Its all about information. Sears has tens and tens of millions of customers gathering that information now to help predict what those customers will buy, has a big impact. At sensus now, the utilities understand, look whats happening at jim cramers residence. His lines down and i have that information now, or god forbid theres something going on with the gas line. Remember the old days . How did you find out if there was a gas line problem . Smell. You had to wait until the guys came. Your mother told you to get inside and hide under the bed. Exactly. I grew up in south philly. They gas guys used to come and they used to dig the ground up and we used to party until midnight because you didnt have school the next day because people were checking the gas line. Now we can identify, great. Look whats happening. Whats your concern . And now remotely, we could send the information to close the valves to prevent a disaster. So information goes a long, long way. Okay. Ive got to tell you, people will want a piece of your company. Guess what . Well see how things play out, jim. Right now were focused on building a very, very special company. Now, whether or not we take it public, whether we combine with others, well see how the whole industry plays out. But i like what youre doing, lou. Youre a technologist first and foremost. Lous trying to bring you these cuttingedge companies. This is the type of cuttingedge company you do eventually want a piece of. Stay with cramer. Tomorrow, kick off the trading day with squawk on the street. Live from post 9 at the nyse. This is a winner from the younger persons point of view. It all starts at 9 00 a. M. It all starts at 9 00 a. M. Eastern. Cramer, you are super you are awesome. Your show is the best. Im so glad youre on tv. You have transformed me. Thank you, cramer. So much craziness after the close. Akamai looked up and now its down. Fortinet which is in the Palo Alto Group that we spoke about earlier did do better. Symantec did do worse. That group is so volatile. You have to have a conviction about the longterm secular nature of anticyber crime. What a tough market right now. Id like to say there is always a bull market somewhere. I will find it for you right here on mad money. Im jim cramer and i will see you tomorrow im back. Its a new season of the car chasers. All right i buy, fix, and flip cars. This is a moneymaker. Sold but i dont do it alone. Ive got perry, a real artist when it comes to restoring cars. I think you should take these carburetors, just throw em outside. Meg, my better half. She keeps all of our spending in check. We dont do cars to set bars. We do cars to make money. And eric. He builds, he wires, he repairs. Im pretty sure this is legal. Theres nothing this mad genius cant fix. She is purring. Listen to that. My main competition is still