Transcripts For CNBC Mad Money 20151111

Spare cash . Whats the consumer buying . These are the questions that plague all Portfolio Managers as they try to follow the money. Right now theyre leaving you in some shocking directions including today where the dow declined. Nasdaq also dipped 3. 2 . First let me just say the single biggest buzz on wall street today, the most salient gut wrenching story is this shocking decline in the business in the stock of the iconic retailer that is macys. While few people actually expected macys to do well in an environment where the globe seems to be warming right in front of our very eyes, todays sharp selloff on some really bad earnings kind of took our breaths collectively away. As the chairman and ceo said at the very beginning of his really i think very disconcerting Conference Call, we had a very tough quarter. We are clearly disappointed with the 3. 6 decline in Comp Store Sales of owned and licensed businesses. And the 8 drop in earnings per share. We believe that the retail industrys going through a tough period that we seem to experience Something Like this every five to seven years or so. And this one feels familiar in that regard. Aha. Heres the rub. It may feel familiar in terms of the magnitude of the decline to mr. Lundgren, but it isnt familiar when it comes to the reasons for the dropoff. The last time we had such a sharp decline in sales as lundgren talks about later in his Conference Call was after the fall of lehman brothers. Sales just stopped back then. That was the recession and then morphed into the greatest recession. Were not experiencing anything like that cataclysmic systemic event right now. In fact, this is whats so hard to understand. Its just the opposite. Last friday we had the best employment report in ages. Less than a week ago. Were seeing meaningful wage growth, again a first. Unemployment below 5 . If you didnt know any better youd think its time for the band to strike up happy days are here again. Things are so strong on the job front we can fully expect Federal Reserve to raise rates when they meet in december. How can they not . If one of their mandates then a victory lap can be justified, even if i think its unnecessary. Plus, disposable income is on the rise and the stock market is not too far from its highs. Lots of moneys been made and taken off the table too. Sure Health Care Costs go up, but the out of pocket gasoline and heating bills are dramatically lower than a year ago. And thats like a gigantic tax cut. Also, lets not forget for all the talk that the fed has to raise Interest Rates, they havent gone up just yet. Credits getting a little more plentiful according to all of the banking sectors ive spoken to lately. And ive spoken to a great deal of them. So given all the bountiful pocketbook positives, what the heck has happened here . How is a company like macys, the countrys Largest Department store chain, doing so badly in such a benign environment . Come on, you got to admit thats kind of paradoxical. Why do we care so much . Thats simple. Twothirds of our economy is based on consumers spending. Twothirds of the dollars in our gigantic growing economy are going somewhere, and we if you and i, we, can figure out where since we know that moneys not being spent at macys at least the incremental dollars, we might be able to nail down excellent investment opportunities. Think positive. Remember what i said last night, be an optimist and youll make more money. Lets start drilling down. Figure out is the problem is it only macys . Has management lost it . Is there something totally awry with the Ceo Terry Lundgren and his team . I have to say unequivocally no. But terry was dispointed this morning on squawk and in the Conference Call, but its not like this great merchant done so much to revitalize macys over time has checked out. I can testify hes working harder than ever. Second its true that the weathers awful. Way too hot for Department Stores like macys filled with cold weather gear as youd expect. It is november. Its so warm out that the company was abject about the need to discount aggressively before the holiday to clear this inventory. Thats horrendous. It could leave the next quarter terrible too. But as bad as the weather is for retail, there is definitely Something Else at work here. I think the Consumer Habits have changed. And theyve changed not glacially as they typically do, but with lightning speed. Two years ago howard schultz, visionary runs starbucks famously opined what could be called the death of them all, the end of shopping as we know itd. He talked about time constraints, technological breakthroughs, cheaper prices at more convenient venues and cravings magnified of course by social media were drilling nails into the coffin of the traditional mall shopper. The Conference Call was a total show stopper. Ive listened to it three times because the numbers while soft that year didnt seem to fit with the dire thesis schultz laid out. I wasnt sure if the man was right. Turns out he was just a couple seasons too early because i think every single one of predictions, every one is now coming true. Heres what i want to do. I want you to take a look at these shoes. All right. I know they need a shine. But its raining. These are your basic Rockport Oxford wing tips which ive worn ever since i was a spokesman for rockport back in the late 90s when i could still do those kinds of things. I go through these shoes like leather chowed down by the hapless doon donner party in the winter of 1986. Thats the headliner of the Birthday Party we all celebrate of course in absentia this very evening. And went to macys to buy these wing tips. Im flooding here if you dont mind. They were 120 smackers, but once they wore out i went online to find replacements. Macys, which has a decent website, featured them for 109. But then i went to amazon where im surely a member of amazon prime thanks to my executive producer who told me what a bargain it is and i found these 109 shoes for 101. Click. And not just click on a desktop, click on a cell phone. Round the clock shopping right from this. And i sure wasnt going to go to any dreary mall for it. Im shopping like a banshee. Is it wonder amazon traded at an alltime high when macy fell back to where it was in february 2013 . I dont think so. Bricks and mortars aint working. And macys delivering alpha conference just this summer when macys was a 72 that they monetized some of the companys real estate into a Real Estate Investment trust, which caused further Downside Pressure when they gave up on that idea. Physical plants still cant effectively monetize versus amazon where im shopping right now. Just ordering and ordering. Second, the differentiation just isnt there. Almost nothing in macys is so different or special that it cant be bought somewhere else. Its a house of brands with brands too many places. Many of them discounted hence the big declines in all the apparel stocks today. We have too many Stores Selling too many of the same product when you can get it all on this thing any way. We know homes are rising in value. If the consumers going to spend at retail very clear spending will be directed at spending their house. People view this stuff as an investment rather than expense. Think home depot as the Department Store for this moment if not home goods especially with the faltering being endless source of customers. Fourth, when consumers feel like splurging, they do it on a trip, not at the ball, a budget trip. We know for example cruises are booked solid, so are theme parks. Consumer takes the show on the road not the mall. Making matters worse for macys. The strong dollar discouraged what you have is whats known as a secular shift away from the browsing mall shopper toward the user of the browser and cell phone who chooses among the most convenient offerings. It happened fast. Its happening now. And sadly at least for the moment its not happening at macys. Or pretty much any other old line Department Store in the United States. My own personal mall in my back pocket. Thats a microphone. Bill in ohio. Bill. Caller bengal bears have buck eye but not browns. Whats going on . Sun ed son, recently missed Quarterly Earnings in a big, big way, but up on revenue and margins. Given taken 85 haircut and theyre actually up on do you think the sellings overdone . Thats not a haircut. Thats a buzz cut. I think youre going to be calling that one sunset edison when this thing is through. That Balance Sheet is what i call stretched. And that means its a red flag. Reggie in new york. Reggie. Caller hey, jim. I wanted to ask you about cigna and all the health care insurers. They were doing great up until around june. And now all of them seem to be going down. And i dont understand cigna anthem promised to buy cigna out for 183 a share. Right. And i bought somewhere around 163. Now its around 130 reggie, i got to tell you, these are all in the grips of this fear about health care reregulation and the Democratic Party and what they will do whether theyll block these deals or not. By the way, bruce, the technician for realmoney. Com he has said this is a truly horrible chart. Now, i know that were not all charters, but i always like to be aware when you see a bad chart coming. And that one says sell, sell, sell. Tom in arizona. Tom. Caller yes, jim. How does the stock market effect the price of silver bouillon. Silver is uniquely levered to industrial uses, not just the precious metal that is gold where its other than jewelry kind of a more ornamental and silver with that industrial bent therefore comes under much more of the it shouldnt, i know, iron and copper, rubric, in other words being pulled down by the complex that is china. Stay away from silver. Okay. Is macys losing its magic . Its losing it to this. The consumer is changing. The retailer isnt changing with her fast enough. Just a sec let me order five pairs of rockfords for nothing at amazon. Mad money tonight, the name joss main become a battleground lately. Should you shop or drop wayfair right now . I have an exclusive with the ceo controversial. And you know whos single loving it besides me . Not true. Chinese consumers. Alibaba reported record numbers during the the Biggest Online shopping event. Is there more to the story . And going beyond the bar code to help businesses stay on top of things. A hint, it looks like a zebra. 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. Well, this is a first. At t and directv are now one. So get ready to laugh here and cry here. Scream over here and freak out over there and maybe go back to laughing here. And crying there. Try not to laugh here though, its rude. And maybe dont cry here, people will get the wrong idea. Introducing the all in one plan. Only from directv and at t. What the heck are we supposed to do with stock of wayfair . Thats the online per vaer of furniture and home brands. Of course wayfair brand which we will see in all the places i live or go to the beach at. Heres a company that became public a little over a year ago and been one of the most contentious and at times visually hated stocks out there to the point Short Interest represents more than half of the shares trade in the open market. Thats insane. Of course over the summer wayfair hit with a very damaging report from this now noted short Seller Citron Research caused stock to plunge from 53 down to 33. Plus the stock noted Hedge Fund Manager largest short position he thinks its going to ten within a year. Earlier this week New York Times reported brutal story with mention wayfair has been selling formaldehyde. Wayfair keeps crushing the estimates. Despite the big decline the stock had been rebounding in recent months to point where its more than 100 yeartoday. Bears say wayfair has a terrible business model, they want to know if online retailer can compete with the om any channel plays where you can see how the furniture looks and return it in person if you dont like it. Wayfair responds by calling sales crazy. Delivered some fabulously higher than expected revenues up 77 year over year. Substantially more than anticipated loss than earnings per share side of the ledger. Then management gave conservative earnings br interest taxes in part because its very difficult comparisons versus last year. So instead of rallying on its top and bottom, stock was hurt 13 fall. Today the market seems to be saying the stocks been punished enough wayfair rebounded by little more than 5 . That formaldehyde issue seems minor im only going to mention so management can explain how small it really is in relation to the short seller case. Whos right . The bulls who believe in this companys growth or the larger bears contingent who say its hyped and overvalued. Lets dig deeper with the cofounder, cochairman and ceo of wayfair find out more about the quarter. Welcome to mad money. Good to see you, sir. Thanks, jim. Thanks for having me. All right. Have a seat. Its extraordinary that you could have such incredible success in the sales line and yet i know youve attracted attention from this fellow whitney tillson. First, lets just say give people the growth here. Because growth is the elixir of a market. Absolutely. The growth is because customers love what were doing and keep coming back. Were up to 4. 6 million customers. In the quarter we just talked about yesterday, the q3 quarter we grew sales 90. 9 in our direct Retail Business up to a 2. 4 billion run rate. Fastest growth of any retailer on our offline . I think so. No, thats my word. Yeah. And its on the back of repeat. Repeat has accelerated. So we keep getting new customers, more than weve ever gotten before. But repeat growth is really off the charts. Thats whats making it all work. That matters because those customers are kind of bought and paid for so to speak. You dont have to spend money to find the new ones because theyre already there. Yeah. Two things, so one absolutely. Thats where the advertising leverage comes from which was a big question people had about our model, does it work. Now theyre seeing it does work. And we knew that. Now everyone knows that. But the second thing is honestly a retailer does well if customers love what it does for them. And the repeat whether they come back or not is the whole key to the whole thing. You can get them the first time with marketing. You cant get them the second time. You get them only if they really valued what they did. Thats why we use you, frankly, this is personal experience anecdotal versus imperi imperii impeer kal. Many products you can find cheaper on amazon, who can live against amazons dynamic price. So, the thing about amazon is amazons an incredibly good retailer, but when you get into home and you know this. In Home Products are found through visual browse. Theres the emotive piece, you want a unique item, environmental photography, the keyword search box doesnt really work because these are nonbranded goods. You cant type in duracell or bounty. How fulfillment works, logistics, all of this is different in home. This is all we do in home. And i think the thing about these short sellers like citron i think to be honest to a high degree they look for stocks they can knock around and make a quick buck or two. They know short position expecting a big secondary, expecting guys blow out of it and make a profit. I dont even know if its that. My belief because they basically open up a short position, they publish the research theyve published to be honest i think if you try to get a job at a respectable Financial Institution with this type of research i dont know youd last very long. But theyre saying its not profitable. Youve been in business for a long time and not showing profit. Ill remind you, jim, were 13 years on. Not only were we ebitda profit nl, we raised money to launch the wayfair brand. For two years cash flow neg fif, 2013 back to Free Cash Flow positive. In 14 we leaned in on the marketing proven worked in 13. Went back and now all of a sudden in 15 right now were Free Cash Flow. We had 33 million of Free Cash Flow last year. But you gave what i regard conservative guidance. Said really its the highlight. So its entirely possible this could be a year over year better than you think. Youre just a conservative guy. If youre in a 2. 4 billion run rate and direct from 64 to 81 then up to 91 , you know, youre going to have to give some range on guidance. And to, look, folks would love you to nail it down and tell them exactly whats going to happen. What we said is the quarter up and through the Earnings Call had been growing at a rate similar to last quarter, is what we said. Right. But the quarters back ended and we had a Great Holiday last year. So how are you going to predict it exactly . Youre talking big numbers. Right. But at the same time some of these guys are saying, listen, if you cut down the spin, the keyword spin, it will be overstock, which is not necessarily a bad thing and the company does well. It just doesnt grow like it used to when they decide to spend less. You know, i understand folks are going to take shots at our business. Thats fine. They can stand and watch how it plays out. Were very confident. Overstock spent more in advertising and growth decelerated to 11 . We spent less and percentage drop and growth accelerated to 91. Thats customers making a pretty concerted choice there. Formaldehyde thing i wanted to mention, but tilson will be out telling this story, this is not lumber liquidators. As soon as you heard one of your suppliers had some sort of laminate problem you pulled it. How many customers were actually effected . Ten orders. We do a million in a quarter. Ten million. Ten orders. Its 0. 02 . In fact, we had already pulled the product even before the New York Times who Whitney Tilson managed to get to write the story for him. I hear you. Look, i dont blame you. It was when i read it i said how could more responsible could a company be than what you did. Absolutely. We care a lot about safety. We have a lot of safeguards to make sure all products meet all federal, all state, all local laws. And we actually collect all this product safety data. So i think were actually a great place to shop. Well, i mean, again personal experience says yes. But i think that does matter. But i want viewers to know both sides. Its really important when you see that biggest short position understand what the bears are saying and the bulls are saying. Ceo and cochairman and cofounder of wayfair, stick with cramer. Is the consumer in the peoples republic shopping more than ever . Alibabas ceo delivered some big news today. Yesterday evening we crossed 86,000 transactions per second. What do these numbers mean for your money . Cramer declares the winners. What exactly do we want from china . Do we want the chinese to buy steel . Or do we want them to buy nikes . Do we want them to buy coal or lattes from starbucks . Would we rather have china consuming iron or iphones . Is it better for us if they purchase aluminum or huggies and pampers. If youre hoping china will buy metals and renewable, were in worse trouble. Chinese production growing at 5 to 6 . And there are companies that cant survive unless that number goes back to the high Single Digits where it used to be, not the 5 or 6 level we sold during the great recession. But if we want china to buy nikes and starbucks and iphones, then the 11 growth in chinese retail sales that we heard about last night blows the record breaking singles day that totally made up consumption holiday blessed by the government that were having right now. Is the chinese equivalent of nirvana for american style exports. Theres a lot of hammering about what it means for the global economy. But i think a lot of the fretting is lets say stupid if youre an american stock picker. No, its not dumb if you work at freept which is in many ways a Natural Resource conglomerate hostage to Chinese Industrial growth. Nightmare if youre running a u. S. Steel producer because appears chinese are allowed to dump all the steel they want in this country. Is there any other information for the pathetic stock prices for ak steel and u. S. Steel, have you seen those . You need this to see them. The coal stocks arent just going to oblivion because of our governments war against fossil fuels. The Chinese Communist party has also pivoted and is trying to wean its country off coal now that a Million People are dying of respiratory illnesses every year over there. And while we hear about a deficit in aluminum, china is making more than they can use and keep trying to sell the rest overseas. These are all bad signs for some of our basic industries. These companies have now lost their best market. But unlike say brazil, which is pretty much all basic industries, our economy is not about the basics. The other side of the coin though is that if youre in the business of making retail goods, remember twothirds of our economy is based on consumption and service. The chinese let you sell them. And they actually enforce your intellectual Property Rights when youre a win ner this new environment, not a loser. Thats why im heartened when i see chinese consumption. I dont live in brazil. I dont live in switzerland, which is another nofly zone because while the communist party is indeed encouraging consumption to the point where its putting an end to the onechild policy, something seemed to come just in time for singles day i might add, still doesnt encourage conspicuous consumption, like expensive swiss watches. But the United States i think were net winner in a world the chinese are buying more finished product where theyre going on websites and buying u. S. Merchandise, where theyre letting apple and nike and starbucks sell unlimited goods. Who knows next year theyll probably want everything sold in cvs or kroger or home depot. You think were a loser in that case . Hardly. Were the winner. Now to be sure there are plenty of Capital Goods Companies that wont do as well even though theyre not basic industries, united technologies, they sell otis elevators, but theyre not going to sell as many. Caterpillars there in the crosshairs of the new china. Truck engines and engines themselves that just ant needed as much. What is china doing to American Technology . We dont know where the government stands on a daytoday basis. Looking better because of a change in tax policy . Case by case. We have to face facts our economy is driven by consumption. If the Chinese Government wants to recreate their version of our economy, who can do it better than we can . Bottom line look at it at a netnet basis. I can easily declare us the big winner in the global trade war except the us is a different set of winners this time than the ear ear ear early 2000s when chinese commodity peaked and may be downhill for years to come. Dave in illinois. Dave. Caller dr. Cramer, the only city on the planet where bulls and bears play each season. Thats a very good point. And maybe ill start cutler some day, but right now im starting cam. Whats going on . Caller jim, my question is about yahoo on the alibaba component where yahoo holds a 15 stake. Now completing 3. 6 billion acquisition on the remaining 82 of chinese video streaming company, the youtube of china. Jim, with jack mas appearance on todays squawk on the street addressing future Growth Potential of the company and compelling single day sales at 14. 3 billion nearly double the 8 billion last year, might these be important catalyst for the stock higher . No. Its interesting. Thank you for the doctorate. Yahoo and alibaba have very little to do with each other. They own a slug and theyre going to sell the slug and rest of yahoo being valued at less than zero. Which is why i think you cannot own alibaba, which is not the same as shorting, but you cant own yahoo if you know what i mean. Kurt in minnesota. Caller jim, how are you . Im all right. How about you, kurt . Caller good. Lets talk ibm. Sure. Lets do that. Caller i bought ibm in the middle of october this year at about a buck fifty because it was at significant lows, off its alltime highs. Since then its continued to get pummelled. And im wondering what the outlook is in your opinion. Im looking at this as a longterm investment ten years and want to know what you think about it. Well, ibm now unfortunately the stock with Interest Rates going higher because of the fed, this is my view a 4 yield wont protect you. Its like a 3 yielder when rates are low. Heres the problem with ibm. They twice suggested that this might be a breakout quarter where some of the faster stuff is growing much better and not and able to offset the bleeding stuff. It hasnt happened yet. Ibm is a show me stock and i cant get behind it until the good part crosses over and bad part diminishes. And that has not indeed occurred yet. And they will tell you that thats the case. Joan in new york. Joan. Caller hi, cramer. Yes, i had a question. My Financial Adviser recommended i purchase wdc, he said for the longterm. I wanted to know what you think . What is he doing that for . Does he know its a disk drive company for even sake. I mean, what does he know about it . What do you know about it . Its a commodity i once went to a toy store, guy selling toys, i said why dont you buy hasbro, a ten and went to 60. Western digital was 60 and went to 10. You dont know western digital, how about like disney. Any way, in this global trade where were the winners, its just a different set of winners than the 2000s and the ones winning then are losing now. Much more mad money ahead. Zebra technologies might be exotic to you but no stranger to the worlds biggest companies, amazon, walmart, but the company just reported disappointing quarter. Im going to take a look. Then, im making sure portfolio is in check. Companies i hope you know what they do, and the storm of stocks is headed your way. Are you ready for the lightning round . Stick with cramer. We got to talk about this because the markets become absolutely merciless to the formerly high flying stocks come out with report some thing are optimal numbers, i dont think they are. Ebra, maker of specialty printers including thermal, label and repeat printers. Ones with radiofrequency solutions and motorola, closed a bit more than a year ago. This acquisition was supposed to be game changer because made zebra game changer in mobile leading and bar code and data capture location Motion Management solutions, cloud based device management, the internet of things. Now, initially zebra was on fire with stock roaring as high as 117 over the summer. But then in august zebra reported what people called a disappointing quarter and pretty much downhill since then. At the time management onetime problems but then zebra reported again yesterday. While the company delivered a strong 16 cent earnings beat off of a buck 23 basis, came in a tiny bit light. What matters is the guidance for the next quarter which was lower than analysts were looking for and stock got crushed falling 8. 7 yet. At these levels 12 times next years earning estimates. At certain point you have to wonder if this has become a value play or too soon to start bottom fishing. Lets take a closer look with the ceo of zebra technology. Hear more about the quarter. Welcome back to mad money. Thank you. Weve got to solve this puzzle. I went over the Conference Call, listened to the Conference Call. I think theres a disconnect. Not that i can get you to do a doover on mad money, but i think there was some confusion on the call about exactly the synergies that you were talking about and the growth rate. Because i cant get to 12 times earning. And i just want you to walk through, youre the heart of internet of things. Yep. I want you to walk through what happened in the transaction versus what the analysts seem to think is happening. So so far weve held the same longterm model in tact. So when we announced the deal we said we expect to be able to get the 150 million of synergies by the end of 2016. And well get to an earnings model of 4 to 5 Revenue Growth and ebitda margin. And weve upped our synergy target but have not changed the model per se. Thats where the confusion is. I mean, for instance when i was looking at what the incremental acquisition costs were, some people felt that you guided incremental acquisition costs you said the firm expects total 216 million but 180 to 200 million, now is that right . Because that confused me. Yeah, so what we decided we wanted to do is give a sense from today whats left. Whats left to have to happen. So its not from the beginning. Its from today. So we said 180 million to 200 million including cap x to complete the integration of all the companies. So that is somewhat incremental to the original target, but as part of that we also announced basically 50 million of incremental synergies and we said that after were done with integration we will also be able to gain greater efficiencies. We would have an i. T. System thats much Cost Effective and efficient, drive less annual ongoing cap x. And we will be able to drive an increased 5,200 basis point of gross margin and 250 basis points of ebitda im sorry. Okay. I typically dont go into this on the show because i think youre right in the middle. Everyone knows you are bar codes, theres a fabulous video on the website. Its a twominute video tells you exactly how theyre in the center of everything. I know it looked like to me one point on the Conference Call say on the negative side the complexity of the Information Technology systems had been greater than expected. It made me think, look, as interesting and as important as the motorola acquisition was, maybe it was a little more difficult than you thought. Well, i think we still feel very good about the overall transaction. You do. But obviously you have reservations in retrospect. Only retrospect to the complexity of the i. T. Integrati integration. Apart from that revenue is running very strong. The customers are liking the story. They are we are winning in the marketplace. And our profitabilitys good. Were looking at this nfl football thing behind you. Now, just want to back up get through the forest from the individual trees. It really is true, you are the Market Leader. Theres really no one i know you mentioned some chinese competition or something. Who are you really up against . Well, obviously competitive market. Theres many different players, but we are the Market Leader in three main product categories. Right. And youre also, i think, when you look at the legacy business growing at 8 , enterprise 5 , then you got a 12 times earnings multiple, again, im trying to puzzle over why your stock is where it is. And ive come to the conclusion, tell me if im wrong. Yeah. That next year at this time a lot of what were talking about now will be history and youll be looking at the Market Leader in the internet of things that really is able to handle all of the mobile and all the mobile technology and Cloud Technology on a wand. Yeah. I certainly hope that youre right. We feel very confident and very enthusiastic about being able to execute on the plan that we have laid out. And eventually i think the market will come around. Do you think that the expectations are final lly wrenched out . I know there were some people who got ahead of themselves because they saw this combination as being so perfect. Do you think thats all gone now and everyones pretty realistic about what you can do . I believe so. Thats very important. And do you think that theres a possibility when i look over one of the slides that you have about all the Different Things you said chief synergies, execute integration, identify key areas for growth and delever the Balance Sheet. Will you be generating enough cash that i can see a much better Balance Sheet at this year next time . Yes. So this year we paid off 150 million principle. We said were going to pay off another 300 million next year. You think you can do that . We believe we can do that. Geez, a fast growing stock and 650 million the next two years. All right. I hope so. Ceo zebra technologies. I urge you before you think about buying this you click on that video. You will see exactly what they do. You cant believe how at the heart of the internet of things this Company Really is. Mad money is back after the break. Before we get to the lightning round i want to take a moment to say how much i appreciated the chance to shake the hands of some american heroes yesterday. For those who missed it our studio was filled with cadets from the u. S. Military academy at west point and veterans from other ends of the armed forces. Pretty much everybody was represented. We were humbled by their presence. Its a highlight for me and our entire team each year. And to all those who have served, thank you. And once again, im going to suggest that people go to the World War Ii Museum in new orleans. It is maybe the most exhilarating museum i have ever been to. And we honor all of you vets out there tonight. And now it is time for the lightning round on cramer mad money. Whats that about . And lightning round is over. Are you ready . Its time for the lightning round. Cram cramers mad money, start with mike in illinois. Mike. Caller boo ya from chicago. Home of the chicago bears. Whats going on . Caller will Berkshire Hathaway stock price rise . Well, what were going to do is were not going to think shortterm about berkshire hath ai way. Were going to own it. We like the stock. Is it going up tomorrow . No, thats not the point when we invest with warren buffett. Lets think years not quarters and months. Lets think luke in washington. Luke. Caller boo ya, jim. Boo ya, luke. Caller spirit airlines. That was a tough one. Remember that last time when stock was down 50 straight points and here i am still telling you to be in delta and if not delta then southwest air. They have better growth prosp t prospec prospects. Go to brian in new jersey. Brian. Caller hey, jim. Acp, buy, sell or hold. I was speaking with brian the other day. Cut back, heres why, they raised the distribution, which is what made me encouraged enough to tell you to buy the stock, and then they didnt cover the distribution when they announced their quarter. And that is not what you do. Still own some for the trust but it was very disappointing. Please kel si come on the show and tell us how that could happen. It threw me for a loop. Mark in kentucky, mark. Caller hello, jim. Mark from kentucky. How are you doing . You must be lucky from kentucky. Caller blast our system no, were not going to be. The trucking right now were going to stay away from the truckers. This is part of the complex i dont like. By the way that expo just went up a great deal from when gentleman was on recently. Lets go to mike in florida. Mike. Caller first time caller. Excellent. Caller nice florida boo ya to you. Sin kronny financial. I think underowned and i think by the way a twofor. Ge is not stopping at 30. Its one of the better active stocks in this market. Maybe the kind of rolling bear market will end, and that ladies and gentlemen is the conclusion of the lightning round. The lightning round is sponsored by t. D. Ameritrade. Ki . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. Thats why i switched from uverse to xfinity. Now i can download my dvr recordings and take them anywhere. Ready or not, here i come whispers now hideandseek time can also be catchuponmyshows time. Here i come cant find you anywhere dont settle for uverse. X1 from xfinity will change the way you experience tv. Earlier i spoke about china and how its effecting stocks here at home. Its really days like today when i want to make sure your portfolios as diversified as possible so you dont run into any big problems. As china moves more toward a consumer economy, the industrials are really getting slammed, which means you dont want your portfolio made up of just the industrials. As tempting as that was just a few weeks ago. Thats why we play am i diversified. The object to be as diversified as possible so you can protect yourself from things like this in the market. Tweet me, sorry absent today tweeting and tell you whether your portfolio is diversified enough. Lets get the ball rolling here. First up to bat, weve got j. Childers who says jimcramer am i diversified, apple, twitter, sonic and at t. Well, no, the answers no. Okay. At t is telco, sonic is restaurant chain, no one likes restaurants right now but when they do that will come back in vogue. Apples tech, intels tech and twitters tech. Keep apple, but i want you to own apple, dont trade it. Put Bristol Miers in and then were going to add a defense play thats my new thing because were not the worlds policemen anymore. Make those changes we add. Ill feel much more comfortable with this portfolio. Lets go to jeff in texas. Jeff. Caller hey, jim. Hey, jeff. Caller first thanks today. Its a big day. Im going to be celebrated yesterday with our cadets, but today we celebrate everybody in the armed forces. My daughter went to the World War Ii Museum and thats a great idea too in new orleans. Go ahead. Caller excellent. Stocks in my account ive got apple, costco, ford, microsoft, exxon mobil, is that a good mix . Or should i reallocate lets take a look at this. We could make some changes here. Costco, man, my costco was good this weekend. Holy cow. They got those giant bears. Very fitting for a fed rate increase. Weve got exxon mobil which is the largest oil company. Apple, well, you know own apple, dont trade it. Microsoft, cant have them both. Dont take this personally, i wear a black tshirt anyway, but well keep the apple, keep ford automobile and what you really need place hold with the proverbial brisal myers so you get a sense you need a Little Health care. I like that portfolio. Lets go to my home state. Lets go to patricia in new jersey. Patricia. Caller hi, how are you . All right. How are you . Caller good. Excellent. Go ahead, give me some stocks. Caller okay. Disney, should i give you all five . Yeah, i would give us all five. Caller okay. Disney, starbucks, diamond rock hospitality, apple and alibaba. Alibaba. Okay. Here we go. We got a lot of work to do here. Boy, we got a lot of work today. Thats what were paid for. Were paid the big bucks because we work. Disney, i like disney. Ive mentioned it in passing the other day. Bob iger going to get that team. Alibaba is a retailer in china and apple this time we have no conflicts. Apples technology, that portfolio works. The only overlap is igor on the board of apple. Thats not much overlap, i can handle that. I like that portfolio. Well done. Well played. Wow, the game is getting harder than ever. Take the points. Stick with cramer. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive ive been coming out here every night telling you retails bad, apparels bad. But i did not know it was this bad. At macys quarter was a wakeup call. This is just not going to be a good Holiday Season until we get a cold snap. And right now there isnt one. Say theres always a bull market somewhere. I promise id find it just for you right here on mad money. Im jim cramer and ill see you tomorrow. Cate welcome toto the blues jean bar. Lemonis . A chain of bluejean boutiques built around one big gimmick. Lady our slogan is, you belly up to the bar, and well cover your ass. Lemonis the owner is clinging to a questionable sales strategy. Youve taken up a lot of space with a dead shoe bar that could have been a cashmere corner. And her mothers legacy is on the line. Lady to lose her money would be doing her a disservice. Lemonis theres no supervision at the top, and roles are confused. Tasha if i had more direction, i could have done better. Lemonis i need to sort out the staffing problems, get rid of stagnant merchandise, and give this retail chain a brandnew identity. Lady oh, my god. Lemonis or the blues jean bar will be a wash out. Lady im consumed by fixing this problem