Transcripts For CNBC Mad Money 20160105

That was easy. At one point today when the indices broke down, i heard a collective sigh. And i was pretty shocked that i didnt get hit by a white flag of surrender after i walked down wall street after the show. But the facts refused to align with negative story. I think today was one of those times. As we saw a terrific rebound in the averages, after a second bout of hideous selling this morning. The dow closing up two points. The nasdaq declining 2. 4 . First, lets deal with the negativity. Its coming from four different directions. Sell sell sell sell. Sell sell sell sell. Worry number one, chinas falling apart. No matter that its been falling apart for ages or the chinese stock market is not creating wealth, many cant handle the stress of waiting for the other chinese shoe to drop after mondays break down. Suffice it to say theres big trouble in big china. Negative number two, the fed has gone from friend to foe. Theres a narrative out there right now, now that we have started to raise rates theres no return to the practical policy of data dependence. This thesis says that were on autopilot mode like the prebernanke fed. Well get a shortfall in earnings. Third fear were in the high peaks region of the economic cycle. Everywhere i go i hear that all sorts of cycles we have the peak in cell phones which caused apple to drop like a stone and taking the Semiconductor Stocks down with it. A new story about a possible 30 decline in apple component orders sure didnt help, nor did stories making the rounds that were peaking in autos. One of the chief engines of u. S. Growth. I think the numbers we saw this morning were good. Well, good, they never less buttressed the case of the bears which would make lower Interest Rate incentives harder to come by. Given they sold 17 million vehicles, it is reasonable to think that things cant get better. We have peak housing stories floating around. Way too high prices because of a scarcity of inventory. Peak cell phones, peak autos, peaks housing thats apox on peak in three components. Finally, the oil glut. Yeah. Remember were in crazy town. Crazy town where we care more about an energy decline, down again today which is negative for about half a dozen states. Then we care about the potential increase in Consumer Spending than the cheaper gasoline can cost. Low gasoline is good. But the market doesnt think so. What happened today, the up opening, a total pickoff, the obvious decline, then shockingly to some the rise in stocks makes us wonder whether the it has to go down in 2016 narrative has already gotten too pat. I say we rewind the tape. We have a dramatic selloff yesterday that was largely related to china and the 7 decline shut down. When china didnt fall apart last night that was the key to the potential rally. However, one pattern works almost every time. You sell any market that opens higher after a big down day. I loved when stocks looked like they were going to open down in Early Morning trading. But when the s p 500 futures caught up big before the opening i knew we were goners. Its just too juicy an opportunity for those smart enough to buy to the depths of yesterdays trading to ring the register off that pickoff jubilant open. When those sellers materialized the market fell apart again and we got an amazing resurgence of negativity. We heard the usual refrains as first day and second day goes, so goes the whole year. I even intraday that we were suffering through the worst new year beginning in ages. I opened up a journal of the plague year, from dale dafoe to see what lay ahead of us. What ended up happening . First despite the decline in crude, the oil stocks themselves rallied. Hey first time i can recall in asia that they bucked the price of crude. Maybe theres too much oil negativity . Second, it got frigid cold out. Al roker top of the news flash cold. I thought the decline in the Retail Stocks in the face of the Lower Oil Prices have been one of the biggest dampers on the stock market. Its not encouraging. When you see walmart down 30 and not rallying disconcerting. When you worry again about the health of j. C. Penney thats daunting. I have said that weather is the crucial variable in sales. Not Consumer Spending but weather. These are the the cold weather clothing doesnt sell when its 60 degrees out, but when its 16 degrees stuff flies off the shelves. The cold weather ignited this group. One look at walmart and target, both up a buck and change tells you what you need to know. When we get a whiff of a recession, we have got to get used to a surge in household names. I love a tape that marches to the tunes of the mcdonalds. And i told you that would be a power house again. Kimberlyclark, two best run Consumer Packaging companies and pepsico will be a winner again. Finally, everyone pounces on eli lilly for cutting its guidance and the stock gets obliterated from the get go and then they review the mega blockbuster alzheimers drug and its rises like lazarus. I like a market where the facts go net the way of the negative story. Opportunity knocks when the market got knocked down. With a victory for the bulls that was snatched from the jaws of the bears who seems so greedily triumphant this very morning. James in connecticut. James . Caller happy new year. Same. Caller im thinking of buying some match group mtch is the symbol for my daughters birthday. I wondered if you think its a good buy. I think its a great buy. I cannot believe the retention. I cant believe how the success it just seems too cheap and im with you. I think its a nice present. How about kathleen in new york. Kathleen . Caller happy new year, great prince. I took a recent large position just under 16 in pandora. Should i add to my position . There was a recent downgrade. Oh, i would be a clown prince if i said buy this one. I have to tell you that other than a takeover basis i cant remember this stock. I do think that apple should buy them, but i thought apple should buy harmon, particularly since they added the security blanket to the brains of the car. Apple has to get out of just being a cell phone company. Give me a little mobility when it comes to cars. Today we saw the facts get in the way of the negative story and thats the kind of market i like. On mad tonight, the rock stars of the s p crushed it last year, but which ones can sing the same tune in 2016 . And the losers im eyeing the worst s p performers to see if they could be worth owning. And time to toast the beverage stocks in the new year. Im poring over the charts. Stick with cramer. Announcer 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. At the beginning of every glorious year, i like to remind people that this show is showing you how the professionals pick stocks and giving you the tools that they use to isolate the best opportunities and ideas for yourself. Now, that doesnt mean that you should always do what the pros do. It doesnt mean that youll netly make money in a given year. The entire market goes down as most people think it will, you hope to contain your losses. Nevertheless f i can make you a better investor then i have done my job and youll have done yours. Now, 2015 was a totally insane year because only a handful of stocks were responsible for whatever gains that the market registered. Most stocks went down. But if you want to know which stocks make the not so great year, somewhat more palatable, look no further than the top performers of the s p 500. Amazon is up, act avision, with 92 gain and nvidia rallied 63 . And cablevision climbed. Here on mad money we dont care where a stock comes from. We only care about where its going. You cant make any money from where it happened. Which is why tonight i want to give you my analysis of where the s ps winners will be headed in 2016. Before we get started though, i need to make two important points. First is thattal will all of the winners were gettable. Meaning that you most likely either used the products and probably love them or at the very least you knew of them. Possible exception is cablevision. Many of the real winners last year was those who got takeover bids. Thats how cablevision got so high. I think we should therefore remove that Cable Company stock from our purview and add in hormel, the food company which only finished 0. 4 behind the regional cable player and really, i mean, just for a moment, the cablevision was gettable too. If you simply watched the morning show squawk on the street where david faber made it clear that 2015 will be the year of cable consolidation, cablevision fit smack in the middle of that thesis. Not often that watching a news program can make you money. But david faber is not your typical reporter. Hes a rare breed whos owned the merger and acquisitions beat for several decades now. Im proud to call him my partner. Can any of the s p 500 top performers repeat in 2016 . Lets start with netflix and amazon, the a and the n in f. A. N. G. Which includes facebook. Formerly google which ruined my acronym with the coolio name change. First, net flex and amazon dont play the same rules as any other company. Netflix didnt rally last year because of the fabulous earnings. Amazon didnt advance because it got recognized for the glory. No, theyre momentum. Meaning they represents shifts in the fast growing revenues and theres a whole cohort of Money Managers who believe if you buy those with hyper sales growth not earnings youll end up with winners. Most of the series professionals that come on our air havent recommended a stock with gusto. And that tries to isolate the value. The analysts search for stocks that are cheap versus the fundamentals. These two stocks are anything but cheap. So why have i championed netflix and amazon for so long . Simple. I have always felt that in any given market, there are stocks that can be embraced for the enormous potential if everything goes right at the companies because sometimes with the help of fantastic management and amazing opportunity they do if you wait long enough and hold them long enough you can be surprised thats what happened to these two giants in 2015. Yep, last year we discovered that amazon could be profitable simply if it wanted to be. We saw that because the Company Actually broke out roughly how much it was making not losing but making with the gigantic web services division. We got a different revelation with netflix. It was a hit machine with content beloved worldwide. It deserved a bigger market capitalization than 12 months ago. Did you fall under making the murderer hole . My staff cant a stop talking about it. My sister cant either. I caught up with jessica jones. I guess i have to find some time to binge, find out what all the talk is about in the office. At least until season 2 of narcos premieres. Jessica jones, man. Smoke show. How can we not pay for more more for something it turns out to be as popular internationally as it was domestically, why should that stock be valued the same when its a hit overseas, how can we not pay more for something thats not as popular specially as domestically . Netflix and amazon became the poster children for something that there isnt enough of pure oxygenated growth. Most companies are starved to produce it. These two have it in spades and thats the chief reason why i believe that after some stuttering at the beginning of the year, both netflix and amazon could see their stocks rally some more. Oh, not as much as last year. Those moves stole a lot of the thunder of 2015, but the scarcery value is there. And these two names like that uber growth manager thirst. Next up, Activision Blizzard. The amazing ceo, doesnt get enough credit on this show. My bad. Activision launched call of duty, black ops 3. What can i say, i was dazzled by this and im not a gamer. Thats not enough for coe tech though. He shelled out 5. 9 billion and bought the huge digital platform with candy crush. Thats what theyre play on the subway. Its deal thats additive to earnings thats before all the cost promotion you can do. Then yesterday, activision bought major league gaming. Is this guy never satisfied . It will monetize fabulously. Can it repeat the 92 gain, but the company is over 27 billion valuation actually seems low to me. Given all that intellectual momentum and i knew him when he was 20. The company has turned itself from the fast pc chipmaker into the juggernaut at the internet of things with the best graphic chips for gaming, as well as chips geared to the cloud and to cars. I have to admit i misjudged the company. Like so many others and was shocked when the head of audi america said his company swears by nvidia chips. Like an audi, like xbox 1 . That should have been the signal to pound the tables. It was clear this is no longer just a fast graphics chip play. I think theres still more positive news ahead, because nvidia has only beaten the wall street estimates for two quarters. I think this will be two more there will be two more fabulous quarters ahead. How could intel not have acquired the guys . Consumer electronics nvidia, one and the same. Finally, hormel. Its a fuddyduddy company with a great Dividend Company into a juggerna juggernaut. They have skippys Peanut Butter and muscle milk. Theyre the polar opposite of spam. The Company Keeps applegate under wraps. If you put the hormel name on the search bar, nothing comes up. Spam and applegate, the same roof. All the better to preserve the 70 million acquisition. Hormels richly valued at the earnings and all keep reinventing themselves. Keep beating the key metrics. To me, that means the bottom line here is that you can buy small amounts of the stocks but only on weakness. Only if you recognize that with the exception of the ridiculously cheap Activision Blizzard and the unheralded nvidia, youre coming to the Winners Circle of the s p 500 steeplechase. Much more ahead. Im going to focus on the biggest losers of the s p 2015. Then its time to protect your portfolio. Find out which of the liquids can put up a solid defense in 2015. Dont forgot who makes the rules on chinas stock market. Ill tell you how its affecting the average at home, so why dont you stick with cramer. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Now that ive gone over the best performers in the s p 500 from 2015, its time to do some serious dumpster diving through the pool of the worst performers. Because you never know when youll stumble on a hidden gem among the losers. In the past we have seen the Airline Stock goes from zeros to heroes. And who can forget when micron morphed from the biggest loser to one of the biggest winners in a few years. Its the stuff dreams are made of. But sadly i dont see a lot of dreams among the dirt pile of underperforming stocks and in fact i see pretty much the opposite. That said, you never know. Im approaching the new year with the open mind. Because no one knew about micron or the airlines before the big come backs or no one who is saying. Now, i have to be a little creative in going over the stocks at the bottom of the heap because too many are all the same piece. Fossil fuel laggers where theres not much hope unless we get major unfortunate geopolitical events. Think of it, if the saudis have severed diplomatic relations with iran shouldnt we presume we have an Oil Supply Problem . The sad fact is that oil couldnt hold a 1 gain after that news. And after the price had fallen by twothirds at in a little more than a years time. Thats extraordinary. In normal times this would have produced a jump of at least 10 . Natural gas is just as bad. Although it managed to struggle above 2. 20 recently, thats a gigantic move from where it was from where no Natural Gas Company can make a profit. The oil and gas complex has gone down the rabbit hole and thats what makes sifting through the stinking rubble so unpleasant. Lets start with Chesapeake Energy which had the misfortune of watching the stock decline 77 . They have made many smart moves in trying to stave off a negative outcome for shareholders. Chesapeake had an incredibly well timed sale for 5. 3 billion. Back in october of 2014. Brilliant. At the time chesapeake stocks stood at 20 bucks. It seemed like the situation could only improve for this heavily debt laden company that had been outspending by billions and billions for years. Now with nothing really to show for it, if you had the misfortune of being a shareholder. But chesapeake cant stay ahead of the debt posse and the stock has fallen down to 5. Because they wont pay the myriad debt orange obligations, nobody wants it. Without the price of crude going up dramatically its hard to see why you want to own the stock. If you want to make a bet on oil and gas, there are plenty of more solid, better ways to do it. Including companies that let you sleep at night without having to worry about whether or not they can pay their debts. Next up, Console Energy which was in a real horse race with chesapeake for the most god forsaken equity in the s p 500 and it was beaten by a nose. Can 76. 9 finish. You know what . I looked this over. Wall street still seems to love console, even after the first class beatdown. Ten of the 20 analysts give it a buy rating. Are they living in bizarre world . Do you want to own the stock of the seventh largest coal producer in the company and they need much higher gas prices to make money . I know the Hedge Fund Manager david icon called it a favorite. Oh, far cry from the 8 level where it currently resides. Again, you might want consol as a rising coal and natural gas prices, you might look it for january given the end of tax loss selling and they have some assets that can be monetized. I think any company levered to coal or natural gas is not something i want you to plunk down your hard earned money on. Their worst performer is none other than southwestern energy, the sucker that bought the chesapeake properties. This is one of the best run Natural Gas Companies in america not that long ago when its stock was at 32 and shelled out that 5. 3 billion to get the chesapeake assets. Talk about buyers remorse. The darn stock at 7 bucks. When we look at stupid acquisitions this has to be one of the dumbest. Because it not only amounted to a double down on natural gas at a terrible time when natural gas was much higher it also wrecked one of the most pristine Balance Sheets. I dont know what to say about northwestern. It should be a takeover target because of the fabulous assets and low debt. Now the assets seems suspect in the Balance Sheet wrecked. Again, youre going to get a bounce from the end of tax loss selling and saying goodbye. I cant believe theyd have been that dumb or unlucky. Oh, gee, out of the frying pan into the fire with freeport mcwren which nosedived 71 . There are few commodities that are more toxic than oil and gas. Free port gives you the whole shooting match. Not wanting to be beholden any longer to the fading fortunes of china, the chief export market for copper, freeport shelled out 20 billion to get some oil exposure. Buying planes exploration, and in retrospect was the exact top in oil and gas. The stocks went straight down and when carl icahn took an 88 million share in the stake, freeport leapt from seven to ten on the announcement. Now today its back to 6. 6 and change. They have since curbed Capital Expenditures and the Company Still barely dented the Long Term Debt picture of almost 20 billion. Freeport may have the worst Balance Sheet of any company in the s p 500 including the other losers i just mentioned. Its positively pornographic. I mean that in a bad way. Paraphrase the Great Supreme Court Justice Potter stewart i know a pornographic Balance Sheet when i see one. Finally, theres fossil. It figures that the unfortunately named fossil would trade like a fossil fuel stock. Even though it makes watches. Maybe the market has a sense of poetic justice. Wholesale stock Market Rebellion against apparel and worries about the apple watch, theyre trying to get smarter with the misfit brand. That has and worked so hard. And not that fitbit is doingny better. Then the ultimate indignity. In a fit of active management for a socalled passive index, the guys who run the s p 500 kicked the stock of fossil out of the darn basket. I think the estimates are too high, too early to buy fossil. Its not too late to sell. The bottom line, its just a nightmare out there. A fossil and fossil fuel nightmare. While i search for one of the losers most likely to bounce, i keep coming back to something that is my mantra for three decade, buy best of breed. These stocks are the corollary, and thats exactly what you should do with all five of them if they give you any bounce. Or maybe even if they dont. Mike in indiana, mike. Caller hey, jim. Macys, 5 runup on big volume. Short term weather effect or has it finally hit bottom . I think the stock hit bottom. Macys was at 4 with a pretty decent Balance Sheet. Maybe time to buy. Of course that happened on the first day of the year. Macys had a big inventory problem with warm clothes. Guess what . Its freezing out and that will take the pressure off. Does it make it so they can charge more because its cold out, too late for that. But i do think that macys who got too cheap. Remember it was at 72 in july and it got down to 34. And that was not a two for one split. The house of pain. Bob in florida, bob. Caller hey, jim, first i want to thank you for everything you do for us little people. And i want to ask you about black stone. I bought it a couple of years ago around 22, 23. When it hit 40 i sold a quarter of the position and figured when i had a double id sell more. And it never didnt keep going up. All of a sudden, you know, it started going down and it just continued to go down and broke down below 30. Now even though its got a hefty dividend im wondering do you think i should continue to hang on . Bob, its never been a good bet to bet against Steve Schwartzman up. Yes, its true, they cant give you the same kind of distribution from when the equity market was hot and they could do ipos. I would not sell that. By the way congratulations on taking that nice profit and that makes a lot of sense. Dont buy it back. I wish this werent the case. But i just dont see any hidden gems among the losers of the s p. In fact i see the worst. You sell worst of breed. Much more mad money. Coke, pepsi or another beverage stock . Im taking the lid off the beverage players to see if they could have serious pop in 2016. Then if at first you dont succeed, you try again. Its the China Economic game plan and plus your calls, rapid fire, the lightning round. After the markets not so hot performance in 2015 not to mention yesterdays brutal thrashing, if we want to know what will work this year its worth considering what groups worked last year. The p beat b and j. The Beverage Industry put up a solid 7 gain. Albeit by less than a per sefrnt. If you bought it back in 2009, youd be sitting on the 200 gain. Right now you need a bit of a defense, dont you, and the food and beverage stocks are as defensive as they get. So tonight were going off the charts. With the help of bob lang, a phenomenal technician, the founder and senior strategist at explosive options. Net. As long as being the technical star in the threeman team behind the trifectas stock newsletter. I urge you to check it out. Why dont we start with cramer favorite pepsico, which gave you a robust 8 return last year including dividends. If you look at the daily chart, lang points out theres Little Movement in pep over the past two months which suggests to him big institutions have been holding on to the stock rather than dumping it aggressively. In fact, lang thinks theyre building a base at a high level to trade it sideways see, thats the base in recent weeks which is a precursor to the next move which is higher. What else makes him believe that pep is ready to run . Well, how about the relative strength index, the rsi. Its trending higher. That means above the green line and same with the money flow. Thats data at the bottom here which technicians use to measure the level of buying and selling pressure on a given stock. Pepsico went positive. I cant tell you how important that little move right there is. It suggests that buying has just begun. Plus, lang likes the stock is sitting a couple of points above the floor of support of 97. Theres your floor, okay. The floor was tested yesterday during the selloff. It held. Whats not the like. Next up, how about dr pepper snapple which i used to drink when i drank carbonated beverages. We like this on mad money. One that gave you 30 return last year. Its been a model of consistency, but what lang likes here is the fact again, the money flow. That hes the oscillator is in very positive territory. That indicates the big institutions have been loading up on dps. So no surprise, Everyone Wants to own a winner going into the end of the year. But dr pepper snapple has begun to pull back, even as it rebounded nicely today. Lang thinks it will find a nice floor of support at the 50 Day Moving Average which is at 90 bucks. It could be ready to resume the long march higher. What about monster beverage, thats the titan, 37 higher in 2015. Its now more than downed since i started to doubled since i started to recommend it aggressively. Lang finds this picture to be a bit tedious. Monsters still involved in the long earn term 200 Day Moving Average the line in red. But with the stock slipping below the violent selloff, monsters chart is in neutral. At least for the moment. If monster is tedious, Katie Courics cocacola chart is is of riffic. The stock pulled back below the 50 Day Moving Average. 50 day being the blue. Thats not a good technical sign. Lang thinks it down a point or two from here. And the chart doesnt give you too much to be excited about frankly. So what Beverage Company can we get excited about . Aside from the aforementioned dr pepper and pepsi . How about a brewer . Oh, boy, long time fan, long time fan know this one. Im talking about constellation brands, pushing higher for ages because its the maker of corona and pacifica. A favorite at my restaurant and not mentioning the great wine and liquor business and the tequila. The blue bottle. Check out the daily stock. It roared 45 in 2015. Lang said theres more room to run. Constellation fell from fell to 140 from 144. When it got hit, it hung in there at the 50 Day Moving Average. Thats a champ. Well, it got hit with a ton of high volume selling yesterday morning and the stock only rebounded almost back to the high of the session. In other words, the floor of support was tested in one of the most brutal selloffs we have seen in ages and it held. Now, constellation rarely gives you any kind of pull back. When that happens, well, lang points out that buyers tend to back up the truck which is what we saw today. Every recent pull back to the 50 Day Moving Average has priced to be the nice launching pad for the stock, something we saw in august. Then in september. Then november. And then again in december. This one is like clock work. While constellation is roaring today, lang thinks it has more room to run. Why not wait until the Terrific Company we heard from mr. Sands last month, reports on thursday morning. Hopefully you can buy it into weakness because the stock has gone up into the quarter. It does have a nasty habit of selling off after issuing even the most robust of results. Thats when to pounce. Heres the bottom line. As 2016 begins youd be crazy not to have something in your venture portfolio and few groups are more defensive as the beverage plays. It held up all well last year. Now, the charts says that pepsico and dr pepper and snapple can outperform this year. I would wait for stz to report in a couple of days before pulling the trigger on that one. Mad money is back after the break. Announcer lightning round is sponsored by td ameritrade. It is time. It is time for the lightning round. You say the name of the stock. I tell you whether to buy or sell. When you hear this sound [ buzzer ] then the lightning round is over. Are you ready, skeedaddy . Time for the lightning round. Im starting with jack in florida. Jack. Caller cramer, my question is on fiesta public storage. Does it have room to run . You know what, i happen to love this stock. I love it since i was told about it. It was cut to neutral by goldman yesterday and i said to myself, this one is the great real thing baby boom play. How about nick in virginia . Caller booyah. My wife inherited a bunch of exelon. Should i hold or sell . Im not crazy about exelon. I wouldnt bother to sell it here. Its getting hammered already. Jim in florida. Jim . Caller booyah from sunny naples, florida. I love naples whats happening . Caller we got rid of a bunch of mlps im not selling this stock at the 7 yield. I dont think its that bad so to speak. How about jim in pennsylvania, jim . Caller how are you . I have a question, there was a publish on the street article about why could be the next big buyout. My question is the buyout, who does that and how could that reflect on the stock . You know what, i saw a piece on the street about how cash flow problems at hog. Heres my issue with hog. Lets be real blatant about it. The japanese are subsidizing competition to harleydavidson and our government doesnt stand up to defend our great manufacturers and theres the problem with harley as it is with polaris. Frank in new york . Caller whats your take on new star energy . Im trying to avoid that whole yield complex, i dont trust the yield. Philip in new jersey, philip . Caller a big happy new year booyah, jim. You are the man, the myth and the legend. I kind of own some shares of alliance technology. I want to buy more to add to my position. Is this a good stock to add to . Periodically, i get a stock that stumped me in the past. This is one of those. I didnt have the right call on it. Its been a real good stock but im not the act, so to speak, when it comes to a line. Caroline in maryland. Caller thank you. I need your help with Uber Corporation people think its an oil and gas company. When it yields more than 3 it would make a higher yield. Let it come down a little more. If you own it, i dont expect great things. How about brad in pennsylvania. Caller hey, jim, huge booyah from electric city, scranton, pennsylvania. Nice. Nice. Caller all right. So i have a question on scripps network. What do you think of the stock price, keeping in mind the nontraditional cable packages . Cable is so out of favor right now that it doesnt matter how good theyre doing. Theyre doing well. Im reluctant to sell a stock that sells that cheaply, that is that good management. That, ladies and gentlemen, is the conclusion of the lightning round [ buzzer ] announcer the lightning round is sponsored by td ameritrade. Sup jj, working hard . Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. It hit me today, the chinese communists are running their stock market by trial and error. On monday they tried Circuit Breakers to curb the decline, that was an error. So last time they put billions to work to stabilize the stock market, trying Something Else to prevent it from crashing under its own weight. They can demand that households only be allowed to buy, not sell or make short selling a capital crime. That sounds preposterous unless you understand how the rule of law works in china. Its very simple the communist party runs the show and theyll do whatever is necessary to keep the balls in the air. And do it longer than anywhere here in the west believes possible. Go back to the dog days of summer. Back then the shanghai composite plunged to 2,927. Remember that was right on the heels of the decline from are 5200 on june 12th to 3500 on july 8th. A bonus rebound. Read through the market commentary about that perredio. It was about how the chinese couldnt stop that, we were possessed about the collapsing stock market. Where it stops nobody knows. Wise people said over and over again that no government can stem that tsunami of selling. They were wrong. No democratically elected government bound by rules like a commitment to free markets or checks and balances could do it. But china doesnt play the rules. The rules see them as archaic to protect the individual individualist to create selling. Say what you want about the peoples republic of china. Theyre not willing to allow anyone to destroy the wealth of others. Unless of course the communist party is destroying. They want to create less pollution and spend like we do here in the u. S. The china stock market is tinkering with the notion with how to make it work. Their market is still in the infancy and theyre pretty much making it up as they go along. Communist party now recognizes it was too easy in the way it allowed individuals to borrow and open new brokerage accounts. The party recognizes it gave rich industrialists too much leeway. It recognizes that it let hedge funds drive stocks down with short selling to profit from the declines. Even in the stocks suffered from another abstraction overvaluation. So now the party is trying something different. Creating things that either dismiss as silly or condemn as making the market rigged. I find the dialogue ironic. On the one hand, the ideal logs carpet bombed the market for being low. On the other hand the chinese dont fool around. When they want to rig the market they rig the darn market. They just create the prices of stocks where they want them without impacting the real economy. Via low inflation rates. Communists they cut to the chase. You need to learn from what happened in august. China is a communist deck tatersh tatershtate dictatorship and theyre real keen on executing people for white collar crimes. If the communist party wants the shanghai composite index to stay above 3,000 theyll find a way, even if it takes not a village but a firing squad. Yep. They did whatever it took last time. Why cant they do it again . But how is this even doable . Go back to my consent of trial and error. Theyre working out the kinks over there. The people running china take a view of things. They got too rambunctious, they thought things calmed down since summer and they made adjustments. Are these phony, not if youre making the rules. In china, the communist party makes the rules or at least they make up the rules as they go along. Stick with cramer. Okay, you saw the network has Stanley Fisher on tomorrow. He has been a guy and i revere him, but hes been one of the guys who says we need to have multiple rate hikes. So be prepared to give up what we saw today. I promise to find a bull market for you somewhere. Im jim cramer and see you tomorrow. Tonight on the profit. I go inside sweet petes, a confectionary shop whose candyobsessed owner has created a huge variety of sweets. Thats the caramel. That is good. But with a horrible location. Part of location is having foot traffic. And i dont see that here. A partnership gone bad. Im calling you out on your integrity. Its crap. And an outdated kitchen that wont allow him to keep up with demand. There is a limit to the output, and youre the limit. If i cant turn this business around. I dont see how i can go forward. Sweet petes will come to a bitter end. You guys misrepresent my integrity. No, im calling you out on im sorry. My name is marcus lemonis, and i fix failing businesses. We made 10,000 together. I make tough decisions. Well change the recipes. I mean, that would be the last thing id want to do