Tumbling 5. 6 and the nasdaq 4. 6 and underneath the averages, though are pockets of real ugliness that as a matter of fact genuine bear market action. We have sectors groaning in agony now and its worth wondering if you can even buy their dips the way successful Money Managers have operated for years now without taking on a the house of pain a gigantic amount of pain. Lets take the industrials. They got a nice pop this morning. Theyre a part of why the market opened up so well because a wellknown analyst had the hurj to come out and tell people to buy a group thats been going down pretty much every day. I called it a totally contrarian call because if youre buying, say, one of the stocks you recommended, caterpillar, then youre buying the stock of a company that reported a not so great quarter and has been going down pretty much every day since then until today when it closed up 45 senns, but was up much more earlier, largely in reaction to this brave analyst call. Until this earnings season the market had been quite forgiving of Something Like what cat did. It was merciful the companies that performed poorly. That period is now over and not so halt resuot results that bec untouchable and unforgivable. Yep, this was the earnings season where people made judgments, severe judgments and now theyre going to stick with those judgments until Proven Guilty of being too negative. Why is it like that . What changed . I would argue that most of these International Industrial stocks were simply plays on a return of worldwide economic growth. They were all about europe Getting Better and asia Getting Better and an overwhelming sense that the world was returning to normalcy and the Great Recession was at last in the rearview mirror, you could say in retrospect that these stocks were all in their b. S. Period meaning before sochi, between russia and u. S. Relations. Go back to when the skiers and scare thes were cavorting with putin and you can get a real feel for what it was like to get the industrials rally pretty much, say consistently. Before sochi we had a real worldwide lovefest going. P. S. , it was such a terrific thesis. The u. S. Leading the world with better growth. You had china stabilizing and you had europe getting back on its feet and the best way to play off the stocks, very simple. You buy the stocks of companies that have fired so many people in europe that when business got better, and it was, a huge amount of the sales would go right to the bottom line profits. What do you do . You buy the International Industrials. Now we see china back in flat line zone and how do we know that . Because we look at the baltic freight index which has been at the 700 for some time, cut in half not that long ago, terrible sign for worldwide trade. We have italy back in recession. No growth from germany and im pretty sure france will be the next one to go negative. A lot of this is plain uncertainty involving putin. Last week the president said the news is tightening on putin so why let up. Obama thinks he has a Winning Strategy here. Why change it . Why not keep notching things up and thats not, however, what you want to hear if youre betting on a resumption of world wide global commerce, no. So we continue to ramp up the sanctions and they ramp up the sanctions and then we ramp up the sanks and what happens is business gets hurt. Were in so whose business gets hurt harder mode right now . But in reality, everyone who owns industrial stocks are the biggest losers. Obamas thesis is that russias fragile and putin is rung out of money and he likes money. Putins thesis is that when push comes to shove, ukraine will be his and we arent going to bring in an army. In thatt environment it mightin 8 to 10 . The short sellers will be right there offering you that stock supply and given that its august and i have to start emphasizing, it is august, people. I have to believe that the sellers will have real firepower and everything is exaggerated in august, particularly the selling. Of course, its not just the industrials that we can play the game with. How about the airlines . Jim, when will you recommend american . Listen to me. Right now we have three negatives on the airlines. We simply dont feel as safe flying as we did and thats anecdotal. Im still reeling from the poll that the street. Com did that showed 40 of the people who fly are now afraid of flying. Second, you have to believe that Airline Insurance is going up and that will hurt the numbers, but the the numbers havent been cut yet. They most likely will be, though. Third is the sank sanctions themselves. I even heard the report and its true that russia will not let planes fly over their airspace. Russia has a huge airspace and in order to get around that, fuel is the single most determined of airlines in terms of the number of seats they fill and the change in environment and change being code for worsening and the airlines were down pretty big for when they reported these great numbers and because of these concerns, though, you Better Believe that the moment and the analyst repeats the unspoken threepoint litany i gave you, there is another 5 to 7 that could be in the cards and even as these issues would ultimately prove to be ephemeral. The Airline Stocks are still up so much from a couple of years ago that its totally understandable if one analyst comes out and says the fleg tiff thi negative things i did. Given to create chaos, libya and crisis in iraq and how could there not be shutdowns in iraq with possible military action happening and it cuts more negatively than positively. So i know this thesis and itted floos the world with oil in order to make up the economic problems in the country and most likely, geopolitically, oil should be going higher here. Its not, though. Why . Because its linked to the dollar and the strength of the dollar means Lower Oil Prices and right now Lower Oil Prices are interpreted rightly or wrongly as negative for stocks and sure oil went up today, but the trend, not your friend, once again, do we want to get in the way of sinking oil stocks, betting the dollar will reverse and go higher against the euro. Something that cant happen without a resolution in russia and my stephanie link said well cut oil exposure and we have been. I know the analysts, theyre getting cold feet, they are soon going to be the enemy, not your friend. They will not hold your hand much longer. They cant take the pain either. Last time i interviewed rick camata, the ceo of adnet Huge Technology company that offers tech solutions. The company had a terrific quarter, really Good Business in europe and Eastern Europe and the stock went down in the end of the quarter and today, why . The exact same sequence. Avnet was good, but it cant be good because of russian sanctions and the retaliation of possible war were coming to expect that will happen. At a certain point the stocks will fully discount the negatives about russia, but that point cant come until analysts stop holding our hands and start downgrading the groups. They wont be able to take the pressure so we play adi twostep game. One, we watched stocks go down and then we have another rollover and two, we get analysts that cant take that pain and they ultimately downgrade and make themselves right for a couple of days, then and only then can you buy stocks aggressively. Thats my exquisite buy scenario, why do i know this . Its exactly what happened two other times before the beginning of both gulf wars. Stocks went down and down and down anticipating the number of cuts and when we got the number of cuts they went down briefly and bottomed regardless of when the canons started firing. Many bottomed ahead of the war, in each case, but not ahead of the downgrades and the estimate cuts. The good news here is that this is not our war even as it sometimes means that president obama might not want it to be. Second there might not even be a war if we get a diplomatic solution and the downgrades im still expecting and you might not get much of a chance to buy because the damaged stocks will then be off to the races. All of that said, let me give you the bottom line thats tricky and subtle. If you buy these groups that i just mentioned ahead of the estimate cuts you are going to have a very tough time when those cuts occur and you will know alas, why its so darn hard to go against the grain because going against the grain can be lucrative and long run, but you must remember this, theres no gain in the situation without first having more pain. Andrew in florida. Andrew . Hey, jim. Andrew. I was calling about Vitamin Shoppe. I want to know what you think about it. They just reported earnings and theyve been dropping and theyre 9 down and i dont know what to do. I had liked Vitamin Shoppe more than gnc, that was right. What i didnt understand was that both would be not so good. Vsi is better than Vitamin Shoppe. I am a bare of vsi here. I am not a buyer of Vitamin Shoppe. I need to go to jude in new jersey. Jude . Hi, jim. How are you . Im real good. How are you . I have a question for you. Procter gamble announced that theyre going to get rid of some of their less productive units up. Would that make Procter Gamble a good investment right now . This is really important for you to understand, i think that was really good news by proctor. The stock popped two bucks and it went down, if you can get Procter Gamble under 80 i think its going to be a real good investment. Going against the grain . I think you better think twice and be prepared. There is no pain [ siren ] and there is no gain without more pain and i am pretty much assuring some pain here. On mad money, walgreens is opting to keep the headquarters at home. The move on the stock was swift and buttal or was it the right call or could this patriotic act prove profitable. Find out what the technicals are signaling about the big retail names as chart week continues and a restaurant chain taking the restaurant by storm, how big is this taco shop yet . Thats on the menu next. Stick with cramer. 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. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com [ jackhammer pounding, horns honking ] [ siren wailing ] visit tripadvisor miami. [ bird chirping ] with millions of reviews, tripadvisor makes any destination better. With millions of reviews, if energy could come from anything . Or if power could go anywhere . Or if light could seek out the dark . What would happen if that happens . Anything. Even in the rocky market, there are stocks the owner of two fast casual chains, Pollo Tropical this time i pronounced it right, this which serves Caribbean Food in the southeast and taco cabana which is authentic food. And the hot concept is Pollo Tropical. The Company Reported on tuesday and fiesta delivered better than expected numbers with a onecent earnings beat, samestore sales up 6. 7 at Pollo Tropical, a strong number that was much higher than anticipated and taco cabana was also better than the analysts were looking for. And fiesta raised samestore Sales Guidance for 2014 and said the stores are tracking even with their forecasts or ahead of them. Fiesta is giving you a 5 gain since i recommended on july 16th and the stock is trading at 30 times earnings and is this a regional story that you should pay up for or should we be more wary about the stocks . Lets find out more about the company. Welcome to mad money. Good to see you, sir. Thank you. When a caller called, its an interactive show and i was embear ars assed not to not kno about your situation. How are you putting up the numbers and youre not the most talked about restaurant chain in the company . I think were a wellkept secret and we spun out of the Parent Company about two and a half years ago, may 7, 2012 and since then weve been out hitting the road and telling people our story, but its new and we just have to continue to put up quarter after quarter of good results. There are a lot of different metrics that i typically use for restaurantis and havent used this one which is a mistake. Industryleading average unit volume, how can Pollo Tropical be doing 2. 7 million. Thats extraordinary number per store. It is. When you consider that its only open for lunch and dinner. Thats honest to god its not 24 hours how are you doing those numbers . One customer at a time. Weve got restaurants in miami that do over 500 cars a day through the drive through. It continues theres a lot of different levers that we continue to pull that are driving samestore sales with technology and weve started eliminating some products that are kind of cumbersome in our restaurant which takes away from through put and that makes the kitchens less efficient and so in taking those away were actually being able to drive samestore sales and we continue to add restaurants in underdeveloped, and as it turns out were being able to raise samestore sales even higher. Carol spun you out. Do you need both taco cabana and Pollo Tropical under the same roof . I think as we move into texas, taco cabana will be of great help to Pollo Tropical. Is it . Well build restaurants out and well start out in dallas and fort worth, austin, san antonio, houston and we can afford to put in one restaurant as a beachhead because we can still run media costs with taco cabana. Is there something bigger going . Weve got this pollo loco came public and it became one of the most successful ipos of the year. Obviously chipotle is doing great, and i was shocked to hear what adobo is doing well and better than jackinthebox. Is there something larger going on with mexican food . Think mexican food, not only is it hispanics is the Fastest Growing demographic in the united states, but you know, there really isnt a National Player if you take chipotle out of the mix, but there are really strong regional players and thats why we think that we are very, very strong in texas and thats why with the addition of cabana grill heading east well try to capture some of that. You have industryleading earnings and tax appreciation. You have great samestore sales and average unit volume, terrific, why not just put one up in new york and one in chicago, one in philadelphia. I mean, are we going to see that within the next five years . I think we have every confidence that we can grow into a national footprint. I think that what we were planning on doing first is that were showing that it can transport and it can be successful outside of florida. Were very successful now in texas with our second opening. We have another nine under construction right now. Food costs, everyone is very, very worried because we know i mean, weve seen a lot of prices go up, even buffalo wild wings, we were there last week and people were worried about the food costs going up. Under control for you guys . It will be flat for the year. Wow from our money, the best supply chain expert on the planet, hes a savant. When i look at the larger trend of restaurants, it also seems like there is a place where people go and darden seems to have lost its way and mcdonalds has lost its way. Are you in some sort of third path where the cheap guys arent doing it and the kind of expensive guys arent doing it and youre in the sweet spot . I think we are in the sweet spot. I think when times are tough people trade down to us. When times are good they trade up to us. Explain the latter. When types are tough, people will trade down to us. I get that. When times are good people will trade up. From taco bell. From a fast food, theyll come to us. Thanks to our viewers, i never would have known about it, but this is the regional story that im working to get behindity and think the multiam may be high, but the con secht is fastgrowing and terrific. Thanks to the president and ceo of fiesta. This is something im learning about on the fly and you are, too. Frg, i theyve got some great presentations. You can can see where im so excited if you go into them. After the break ill try to make you more money. Sdwloo still to come, are you ready to go shopping with the charts . Chart week continues tonight and cramer is in the tank testing the technicals of jc penney, coors and deckers, twe tweet jimcramer chartnado. We might feature your work on the show. Did walgreens do the right thing by not cutting its tax bill . Wouldnt it have been better to take advantage of the law, a law that really and truly does support that notion that walgreens could become a genuine Foreign Company after it swallows european giant alliance boost . Did they do the right thing not to engage with 21st century fox on its 85 takeover bid . Has allergan done the right bid by fighting off the 180 hostile bid from valiant . All three of these stories right now could be breaching what some might regard as the high watermark of this current wave of mergers, acquisitions and inversions. A wave thats given a huge spurt to the market and one that needs quite badly right now especially in light of the new russian headwinds and all three of the stories require strong ceos that require to make money for you. Actually reaping profits from his industryhigh science spending and growing faster than any of the other major old Line Pharmaceuticals that time warner has done a remarkable job. Its creating amazing value thats been e miss rated by the predecessors and he spun off time inc. And the company is off front and center. Hes a sleepy regional to a National Story worldwide now dynamo with Alliance Boots giving it unprecedented power in the tugofwar from the drug companies. And the best discounts for you, the customer. I think watson will do whatever is right for shareholders and while some of the more aggressive shortterm oriented hedge funds wanted him to invert walgreens for a lower tax bill, i believe watson was generally concerned that his company would become the poster child for negative financial engineering. Its true that he has a much better case than the companies that have inverted and it was just a mail drop while Alliance Boot his 21 billion in overseas sales. I dont think that 40 of the combined Company Sales from overseas would shield walgreens from the wrath of a president who like walgreens is from chicago. Its just too visible. I think they did the right thing for you. I dont know. I think the shareholders were entitled to a discussion with fox to see how high murdoch would go. I believe in him in finding the value. If murdoch had been willing to pay 95 per share and 33 higher than where the stock was for the bid. I think that would have a thorough analysis. Allergan, i believe that before pyatt had revealed the forecast that he did recently, it did seem that no matter how reprehensible it was in the Research Like valiant it still made sense to sell. Once we saw the bigger numbers im comfortable that pyatt can steer allergan north of what that can take over time, still, still though, thoughtful engagement was merited and allergan hasnt chosen that route. Let me give outbottom line, in the end it comes down to short term versus long term. Tut simply it doesnt matter what watson ultimately did, the stocks ran up big on the inversion and the takeover bid stories. You have to exercise some responsibility yourself. No one kept you from taking profits then. You accepted the nuisance that the ceo would reject these in treaties so if you didnt ring the register, thats on you, not on them. Tom in florida. Tom . Hi, jim. Its tom from florida. Yes, tom. Thanks for sharing your wisdom with all of us. Uhhuh. In the past ive looked at ge i own a lot of ge, and i had been reading about the spinoff and thats why i asked you the 15 that showed sold and then they would spin it off to shareholders and then i heard it would be a swap. Would you hold on to ge . Theyll spin the rest of the stock off a very long time from now. What matters is the General Electric had 5 growth and a lot of the money would follow the bottom line. If ge which is a large position gets that right and is able to get those sales down and turn it into profits for the bottom line then ge goes back to 28, otherwise it will wallow here with the 3. 5 yield. Bill in california. Bill . Hi, jim. Thanks for taking my call. Of course. I have express scripts. Ive had it in my portfolio for a while. Last year it was sideways. Its come back. Its come back and i have to tell you its been over time a remarkable performer, but i prefer abc, okay . Amerisourcebergen and secondly, i prefer mckesson. I think those have been more consistent and i do not want to buy express scripts over 70. Allergan, and time warner and the stock went up and making their final decisions irrelevant. If you didnt take profits, thats no ones fault, but yours. Still more mad money. Is it safe to swim yet . Chart week continues with a hunt for signs of life from the murky sector and it helps some of the biggest businesses in the planet run leaner and meaner. Plus call me maybe . The lightning round is coming up next. Stay with cramer. Are you sure we should take this billboard down . People find out state farm does car loans as well as they do insurance, our bank is through. Good point. Grab an edge. Look theres two guys on the state farm borrow Better Banking sign. Nope for real theres two dudes on the state farm borrow Better Banking sign. [ reporter ] breaking news from the state farm borrow Better Banking sign. Were seeing two men that have climbed the borrow Better Banking sign gentlemen please get down from the state farm borrow Better Banking sign. Phil get the hose. Okay hes getting the hose. Alright, lets go. [ male announcer ] talk to a state farm agent about car loans that can save you hundreds. Thats borrowing better. Your studied day and night that can save you hundreds. For her drivers test. Secretly inside, you hoped she wouldnt pass. The thought of your baby girl driving around all by herself was. You just werent ready. But she did pass. cause shes your baby girl. And now youre proud. A bundle of nerves proud. But proud. Get a discount when you add a newlylicensed teen to your Liberty Mutual insurance policy. Call to learn about our whole range of life event discounts. Newlywed discount. New College Graduate and retiree discounts. You could even get a discount when you add a car. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. In a market without conviction like this one sometimes the best way to tell where a stock is headed is simply by looking at its chart. So its a good time that this is chart week when i bring in technicians to talk about what theyre seeing. Its a variable chartnado, and im talk to fitzpatrick, the founder and president of the stock market mentor. Com as well as being my colleague at realmoney. Com and were talking about retail. Specifically, j. C. Penney, deckers and the once red hot michael coors. Dan, welcome to mad money. Show us what youve got. Okay. First chart. Lets look at jc penney. Everyones hated jc penney for so long. Oh, yeah. Look at this long line here. Volume at price and what this is an indicator of is where has most of the trading taken place . So we can see over here where the stock has been trading for several months in a really, really, really tight range. Now 200day moving average right here and this has been drifting down and the stock got really extended to the down side and really, really oversold. A couple of things and we get a low here and look at the volume. Massive volume here and then we get a lower low, volume, not so much. So what weve got is a lower low on lighter volume. Thats it willy bullish just because its less bearish. Okay. Well look at it that way. So then the stock comes back up and its now drifting between say 850 or 950. Its been boring people to tears. Look at the volume here. There basically is none. Something will happen big and let leigh look at the weekly chart, the next chart. This is what im talking about and this is really interesting. L. S. , Left Shoulder, r. H. , right shoulder, the proverbial reversal head and shoulders. We love this. Volume at price, we have a lot of trading right at this level. What we have is the big volume climax here right here on the Left Shoulder so we have a head that goes down further on lighter volume. Thats bullish. Exactly, but then even better, as the stock drifts up here, weve got very, very light volume here. What were looking for is a breakout above 10 bucks. But you dont want to buy it until it goes above 10 . Actually, do i. This is such a strong pattern, i think you can Start Building a position. You dont have to load the boat right now. Thats another 10 . Gap stores had a good number and im game, game on j. C. Penney. How about the next one . Lets look at the next one. This is deckers. I was on cnbc back in june talking about this, its a head and shoulder pattern, a different path. Heres the thing. The stock had been drifting upward. And this is uggs, by the way. Tom bradys favorite footwear. Yeah. And really good camp. Thats good. Im not a new england fan, im a charger fan, but lets not talk about that. Lets talk about winners. Okay. Hthis has been drifting sideways and whats forming a pattern its the 200 and 50day moving average. We like to see patterns at key moving averages and by definition its not overbought and not oversold, physically like a goldilocks pattern. So then the Company Announces earnings. The stock gaps up and it is holding, bad line there. It doesnt have to fill in the gap . It can hold . It actually did. It barely filled the gap and now its drifting higher, and i would look at this as the handle will. Okay. This is a bullish chart, but lets see how far it can go. Go to the next chart, the weekly chart. Weve got a series of squeezes here. Meaning the shorts get caught leaning the wrong way. Yeah. And the stock goes into this volatility compression where its not trading in a really tight range. On this one, this is really important. Threeforone stock split and that floods the market with liquidity. People dont understand, if you have three shares, maybe you sell one and this is what happened here. Threeforone stock split, the stock goes up and it doesnt go down like mastercard and google did. Remember that . This moves up. It goes up like 55 in a parabolic move ultimately doubling. Here, we get a similar squeeze. 45 up and now its squeezing again and just breaking out to the upside so im not going to say exactly how high this is go going to go, but what im saying is if the pattern repeats itself and thats the definition of patterns. Then buy deckers. Give me another one maybe not to buy. Michael coors, not good. Here is the thing. This was a darling of wall street. The stock went up 300 or something since the ipo. Nice trend lines and everything great, but youll notice here the volume actually peaked when the stock was just at this level. They announce a great number here. Volume is not so high. Thats a bad thing and then another good news here. Less volume. So traders were getting less interested in this stock even as it moved up and now, back here it breaks down below the 200day moving average and this really, really long support line. Okay. If it breaks down i should be a seller of michael kors. Herb greenberg said i like this call. I want to sell kors and buy y. C. Penney and deckers is absolutely terrific. Great work, dan, really clear and concise, dan fit patrick, founder and president of the stock market mentor. Com and my colleague at realmoney. Com. Thank you so much. Thank you. Dont miss the last installment of chartweek tomorrow. And keep sending me to chartnado. You could be on your way to showing off your stuff right here. Mad money is back after the break. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. It is time it is time for the lightning round on cramers mad money, and its rapid fire calls. [ indiscernible ] play until we hear this sound and then the lightning round is over. Are you ready, skeedaddy . Im going to start with don in maryland. Don highways it going . Not bad. American airlines, ive give 10 a multiple and its a 50 stock. The Airline Group is pausing because of problems with russia and worries about Airline Safety and ive been using the term because is because the stock is coming down. I think some analysts will break ranks and cut numbers and that will be your chance to cut more. I have to say side line. Lets go to craig in georgia. Craig jim, thank you for your books. We really appreciate what youre doing. Youre very kind. Im signing books at charitable trust. Com. Bas, confusing signals for the 16 drop in midjuly. I have to tell you, this group will trade, even though it with baker hughes and chezes chezes. The oih is going down because people feel russia is shutting down the world oil trade. Thats not true, but thats what they feel. I cant recommend it. Lettay go to dwayne in south carolina. Booyah, jim. Booyah i havae a hundred shares of magnum hunter at 18, should i add more or hold . The Small Oil Companies are all coming down right now, many of them are rolling over and if you can get magnum hundred for what we call five plain, 5 i would do it. Anthony. Booyah, jim, how are you doing today . Im doing well, anthony. How about you . Im calling because im new to the market because i pick up the bad things and i bought some wwe stock and i have 53 shares. Thats just an okay stock. They have a difficult entertainment transition that makes me a little bit uncomfortable. I would rather see you buy a disney. Look at disney. Theyre putting an amazing quarter and the stock is back to 85. Buy two shares of disney it will do a lot better. The first thing i ever bought was a half dozen shares. Disney is right and paul in missouri will show me something. Paul . Paul . Yes booyah, jim. Thanks for taking my call. Of course, paul. Whats up . And the stock, edison. Yes. Years ago, they were back by the Investment Group and they put . A new president and i like their product, the silicone investment chip and i sold it when it was wafer, wafr and i got first solar, it reported a number and the stock went higher. By the way, i like solar city, too. I want to tell everyone, solar city and first solar, ar zella. Booyah from middletown, ohio. Booyah i have a question. Im trying to decide whether to hold or sell prospect capital due to their class action lawsuit. I know were in a midmarket. We cant find out what they really own. I need more transparency and i welcome them to come to the set. And that, ladies and gentlemen, is the conclusion of the lightning round the lightning round is sponsored by Td Ameritrade [ tires screech ] chewleys finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. Get the most extensive charting wherever you are with the mobile trader app from Td Ameritrade. Wherever you are with the mobile trader app where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com having a perfectly nice day, when out of nowhere a pickup truck slams into your brand new car. One second it wasnt there and the next second. Boom youve had your first accident. Now you have to make your first claim. So you talk to your Insurance Company and. Boom youre blindsided for a second time. They wont give you enough money to replace your brand new car. Dont those people know youre already shaken up . Liberty mutuals new car replacement will pay for the entire value of your car plus depreciation. Call and for drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch to Liberty Mutual insurance and you could save up to 423 dollars. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. Tuesday night we got results from a Small Software company you may have never heard of call pegas systems. Even after that move i thought the numbers were pretty impressive, impressive enough to worth introducing this company to you and people at home. Pegasus systems is in the Management Software business. This Company Sells to Huge Enterprises like aig, american express, cisco, j. P. Morgan and United Health among others who use it partially to automate complex business processes that require human involvement regularly competes against the Biggest Companies on earth and pegasus is the largest player in the space. To get your attention, it has major Cloudbased Software and this stock is high from a highflier that trades is the 20 times next years earnings. What about the quarter . Tuesday night it was a monetary revenue beat and it did miss the bottom line with the sales coming in 10 cents shy of what was expected. The can company did serious hiring during the quarter and because they booked business where the profits cant be recognized because of the way accounting is done, but the key with this business is booking and they were worth 74 and lets take a closer look at the founder and chairman of pegasus systems. Welcome to mad money. Thank you very much. Thank you for coming on. I thought that you made comments that for the first time ive never heard this term, but i have to bring it out because its emblematic of what you do for companies. You deal and succeed with generation deers. And what does a generation deer and why do i need pegasus to deal with them . We see it as gen coming and theyre folks that will devour businesses and the companies eat them up or demonize them and they try to assassinate them on twitter and social media and all sort of different ways so Companies Need to find out hu to be responsive and customer centric or theyll really suffer. Youre someone that says uhoh, a friend of the chairman is your take. Im a sales person and a customer calls what do i know because of pegasystems and how do i move them along . Ill give you a perfect example, maybe a Company Using sfdc, for example. We mash up into that front end and if you want to place an order, if you, for example, want to underwrite an insurance policy or youre giving the exact next best action offer to the customer. We look at the data and we pull together the business process and we continually optimize and we make it possible not just for you to make the order happen, but you execute it and it goes from order to fulfillment in record timing, wouldnt you be competing against him. We need to rap and renew the customers. Theyre large, complicated organizations and they have many systems. The point for us is to create a customer centric and processcentric approach. We yoo k use it as an alternative sales force or mash it. They come in and bring you in with them. We typically sell independently with them, but theyre a partner of ours and we have about 60, 65 of our clients are major sap users. Okay. That makes sense. One of the things and we rarely have this, sir, but you have two major firms that cover you and you own 52 of the company and is it hard to did that . Its all on you, isnt it . Well, i would like to say it is a whole company. Right. We now have about 3,000 people and they did a brilliant job of actually posting results and im a believer that ultimately the fundamentals matter and its growing a great business and having Great Companies that want to be a customer and that will make the stock and shareholders happy. In the interum thshgs is one of the most volatile companies they have on air. It has quarterly volatile they might be offputting to people. How can you change that . I think there are a couple of things that are happening and we saw much less volatility in the first half of this year. Thats why it was good to have you because it looks like something smooth here. Some of the volatility comes from the fact that we both offer the software on the monthly term subscription structure or we also offer it it on perpetual licenses. Sometimes Companies Want a perpetual license and we think its right to accommodate them as long as its commercially reasonable. However, the big perpetual license and the term license affects the common quarter a lot. If you do the math were very transparent with the numbers. Not only are you transparent, but you let the chips fall . You say on the conference call, we won on the big order and we cant book the way youd like us to to smooth things . Ultimate thely, the accounting happens as the accounting happens, and the business is whats really important and we have tremendous disclosures in our filings that would allow people to immediately see exactly whats going on. One last question. The work day has brought it to my attention that the best way to measure Companies Like yours is to say once youre in, do you renew. What is your renewal rate . Its better than that. Our renewal rate is in the high 90s and even better, 70 to 80 of the revenue comes from repeat orders from existing customers. We have tremendous growth rate and radiation rate and customers are finding that it helps them serve their customers. Thats what we want to hear and the renewal rates if you get the orders, well get a higher price to earnings multiple which you deserve. It helps. Now as we start and we crossed half a billion in revenue the next year. As the Company Grows youre less dependent on individual deales and more of a rhythm. The chairman and ceo of pegasystems. You go on the website and click on different icons and see how the software works. Thats what you need to know before you buy the stock. Stick with cramer. Its estimated that 30 of the traffic in a city is caused by people looking for parking. Thats remarkable that so much energy is, is wasted. Streetline has looked at the problem of parking, which has not been looked at for the last 30, 40 years. We wanted to rethink that whole industry, so we go and put out these sensors in each parking spot and then theres a mesh network that takes this information, sends it over the internet so you can go find exactly where those open parking spots are. The collaboration with citi was important for providing us the necessary financing; allow this small start up to go provide a service to municipalities. Citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally citi is there every step of the way. So the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge. Remember, im never against dip buy. There could be more pain before the gain if youre dip buying. Two stocks i like very much after the close, anet, i said that was the company that will give cisco a run for the money. It clearly is. Solar city where business is gangbusters. Those are two that are still going to work. I like to say theres always a bull market somewhere. Bull market somewhere. I promise to find it for you quintanilla from shoes to watches, purses to perfumes, the business of counterfeit goods is booming. If you can think about it, they counterfeit it. Its just amazing. Everything out there is counterfeited. Its not just about a Company Losing Money or an individual losing money. It creates health and safety risks, risks to critical infrastructure, risks to national security. Quintanilla this criminal underworld puts our economy and our lives in peril and nets billions in the process. Counterfeiters are unethical. Theyre dangerous. They kill people. What is the root of counterfeiting . Its the money