Transcripts For CNBC Mad Money 20160912

So the value of waiting for a better time to sell. That said, i want to spend a lot of time on this show tonight getting you more prepared if the fed decides to take action this month. You can protect yourself with a little more cash than you currently have, but not anything wholesale, not anything dramatic. I am not in favor of that. If anything, i suggest you stay the court if youre a home gamer. I want to explain to you why i feel were facing a decline of moderate proportions, one worth riding through if you can stomach it. Only the super nimble need to take action on what im about to tell you. Let me explain to you how i envision the risk reward versus some of the other declines weve seen in the last eight years. We have had several major selloffs during that period, and each one has had its own coloration. But only one was worth selling a majority if not all of your holdings into. The actual decline that cut the averages pretty much in half. Yes, the Great Recession decline. Thats the tremendous one that occurred when so many of our institutions, mainly household financials but also many industrials that we had thought withstood the test of time went belly up or claim close to collapsing. We thought the financial world was close to be terminated. We even wondered if our atms were going to be able to spit cash out. It was that bad. Thats called Systemic Risk and that means its time to do some major league selling. Forget that. Were not faced with Systemic Risk. Then there were the second kinds of selloffs. This time typified by the 2011 decline of 21 from peak to trough. We had the possibility of a major collapse but not from here, from overseas. These markets are big and their power to pull down the world is so great that it was hard to assess the possible decline. We stopped at 21 because it created ways that the European Central Bank Launched to save the day. Finally there are these individual crises we have had to deal with, the possible collapse from china last summer, the giant bear market threatened to swamp the western world with eastern pay. We dropped precip tuesdayly aided by the fact that our fed was going to raise rates but then they took a pass so we bounced back. A decline that led to financial concerns about the solvency of our Largest Oil Companies and the 400 billion in debt they had on their books. Finally we had the brexit vote where we had so many funds that were out of position because they didnt expect the result of the vote. So we saw huge selling. Now if you look at each of these selloffs that we get, you could possibly get from a surprise rate hike, i would take off the table any Systemic Risk. Were taking that off. That removes exhibit a for certain. We may never see that kind of risk again in our lifetime. Even as you often here were about to have it every time we have like a down 400 day as we did on friday. How about european debacle, 2011. This is again is a classic case of something that could be systemic, but not systemic to us. Still, would we have gone down more than 21 if italy had defaulted . Unequivocally we would have. That could have easily led to a domino situation where spain, portugal, ireland and greece could have collapsed, but it didnt occur. Systemic risks that almost lead to a collapse as poe toezed to cypress or greece, theyre for real. Those are for real. The big systemic continental risks, and theyre tremendous cause for concern. We just definitely arent staring one of these in the face. Taking that off the table. Okay. Now how about that chinalike decline . All right. First lets talk china. I put a collapse in china would be worthy of a potential 20 selloff in the u. S. Im talking about something that would lead to a revolution that would cause that country a gdp to go negative. But we never even entered that realm last summer. We were dealing with a stock market collapse, not an economic collapse. Still that is far worse than what we are facing with one hike on the horizon. Nope. China, no. The ill dive in february i think was a very significant concern. Not just because the Oil Companies but the banks were into them so badly. Again, though, this has been cured by heavy equity issuance. Even if oil were to go back to the 20s, the impact this time around will be far, far less. There would be a bit of a cushion. How about this brexit . Could that be like what we could have with a rate hike . What can i say . We simply havent seen any of the negatives in britain yet. I believe there will be a lot of Financial Firms that will have to leave london to put their offices on the continent. I believe there will be many Construction Projects that will have to be canceled. I do believe that a bank rescue may have to occur and they do not have many big banks there. Hence why theres been no systemic collapse anywhere. So where does this leave a now unexpected rate hike given the fact that we just had a big rally, which seems to be based on the possibility that ones not forthcoming. I think it leaves us to be somewhere less than the 2,000point decline we saw avenue the december rate hike because we dont have the oil problem. Although that started from a level that was 500 points lower than this one. China put the percentage to it, and im saying that maybe on a rate hike thats a surprise, we could fall 7 from thursdays high, okay . Thats kind of where i come out. So what does that mean, say, for an individual stock . Lets deal with the stock, not an average. Why dont we take the case of apple, which stock benefited today from the obvious woes at samsung. I dont think those woes are going away easily. Apple stock fell hard beginning thursday morning when the Company Announced it wasnt going to release any numbers for the weekend. The market immediately deemed that as extremely negative. I didnt read it that way, not that anyone paid attention to me. But i focused on the fact the company reiterated its guidance. Thats a bullish fact. Its a fact that didnt need to be revealed. Lets say you are concerned about apple sales and you didnt sell into the panic on friday. Let me ask you, if the stock were to go down as much as i am forecasting for the market, if the fed surprises us, you could see this stock, which trades as high as 108 last thursday and went out at 105 today, you could see it go down 5. Whoa, it could go down 5. Do you want to sell the or do you want to own the stock, not trade it, betting that the weekend read would have been meaningless now that we know now there are little rally hundreds of thousands of channels. To me, this is a pretty decisive choice. I think you understand pat. I simply dont believe it is worth it to try to dart in and out of a stock like apple, even if you think there would be a rate hike. Its a perfect example given the various declines weve seen. I dont think you need to take any action. I know that sounds boring, but thats my feeling. You know what, you can raise some cash into other positions but i dont want you to dump anything whole say. The panic on friday, those people feel terrible. You know what i am in favor of . I think to sell everything would be wrong, but to take some profits, thats cool with me. But remember you may have to get back in. Let me give you the bottom line. Is it worth it, say, to sell the most widely held stock in the world because of a rate hike knowing that wow have to get back in a few bucks lower . Do i really need to answer that for you . John in texas, john. Booyah, jim. Kudos to you and your team on ground zero rising. Thank you so much. You know, look, its the story that tells itself, and i was just thrilled to be working with a fantastic documentary team that, believe me, made me look really good. How can i help . Yeah, it was awesome. A twopart question. What are your thoughts on the music streaming industry and, in particular, Pandora Media . You know what, i think that industry is way too competitive. I dont want to be in it. I think pandora is look, if apple were to buy pandora, that would certainly make sense to me, but theyre not going to do. They want to do it themselves. I dont know who would necessarily have to buy them. I think theres like three up, three down. Thats not compelling enough for me. How about pete in illinois . Pete . Booyah, cramer. Booyah, pete. Hey, at the end of august, you had the ceo of taser on the show, and you commented that taser had a good Competitive Position and growth runway. The next day the stock declined 8 . I know. On no news at all. And since then, 15 in total. So do you still feel bullish about taser . Yes, absolutely, pete. I think that a series of articles have said theyre system is too expensive for cities. I think thats whats really got the stock going down. I personally think its a great opportunity to be buying the stock of taser, not selling it. I like this selloff as a way to get in. Lets go to larry in illinois, please. Larry. Good evening, jim. I enjoy watching your show. Thank you. Every day. I have a question for you about a foreign bank. I am interested in looking and buying credit suisse. Would you please give me your opinion . I dont see a lot of momentum there. I dont see a lot of earnings power. I just see a stock thats managed to bounce off the bottom. You know, this, deutsch bank, theyre all kind of the same. I would prefer for you to be in a United States bank. If you think the rates are going to go higher, i would be in bank of america. And if you like the worldwide situation and wanted to be in a credit suisse, may i suggest you buy citi. Thats right, letter c, citigroup, which i think is well below book value. My travel trust owns it. I very very kf that stock is going to go higherment nobody i repeat nobody ever got hurt taking a profit. But this isnt the time to cut and run. Thats not what history tells us. Whats a quarter point to the economy with the fed in focus . Despite the markets move higher today, im prepping you for the unknowns that come into a selloff. Telling you what plays could be worth circling back if it really comes true. And a company that do not miss my take on no, im not telling you what it is. 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 1800743 cnbc. Miss something . Head to madmoney. Cnbc. Com. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Its a very specific moment, the launch window. We have to be very precise. If were not ready when the planets are perfectly aligned, thats it. We need really tight temperature controls. Engineering, aerodynamics a split second too long could mean scrapping it all and starting over. Propulsion, Structural Analysis Maple Bourbon caramel. Thats what were working on right now. From design through production, Siemens Technology helps manufacturers meet critical deadlines. I think thisll be our biggest flavor yet. When you only have one shot, you need a whole lot of ingenuity. Hey, its just a quarter point. Its already baked in. A terrific one with 32 years in business said that to me in an elevator in asbury park this very weekend after i told her i was concerned about the down side from a possible rate hike. Sure i said it should definitely be baked in. No doubt about it. But these things never seem to be discounted well enough. I believe that even more strongly after todays rally. She said byebye and disappeared down the block on a gorgeous night in a city fighting to make a big come back. Her decision looks right for the day. Shes right that a quarter point rate hike really shouldnt be a big deal at all. I wanted to tell her that. That doesnt mean you cant be concerned, especially after a big up day that needless to say did not get us back to where we were last thursday. Lets use the selling respite to talk about the two worrisome issues here. The first is whether the fed tightening matters at all to the economy. I personally dont think its a good idea to raise rates into a expect that seems more tapped out than it was a few months ago. I also know that the fed may feel like it has to get on with it because were in emergency low rates without an emergency either here or overseas. Just because i dont want a rate hike doesnt mean we arent going to get one, which is why ive been willing to say that im okay missing a few Percentage Points the upside, especially when there might be so many bargains ahead after the fed takes action. But its the second reason that made me disagree with our very pleasant elevator companion. The issue of a rate hike being baked in and thats really what i want to focus on. All my froeshl life, i felt things that were so obvious, so right in front of our faces, things that everyone had to know about turn out to be shockers. I think a rate hike is like that, particularly after todays strong rebound, which couldnt have happened if people were as worried about a rate hike as i think they should be. First there are the rational people who say, yeah, the fed tells us theyre data dependent. Theyre going to be on hold to stay. Theyre not going to do anything. They look at that last employment number and say they cant raise rates now. Other people say whats a quarter point to the real economy . These people are confusing the real economy with the stokt market. For stocks, it doesnt matter what will happen to the economy, it matters what people think will happen to the real economy. This second camp may think theyre ready to buy, and will say so right up until the moment that the selling gets thick. But believe me, they just arent that brave. When stocks are going down and going down hard, these people dont stop and say, were these sellers really caught unawares . No. They say, wow, there must be something really wrong i dont know about. Maybe im being too glib. The result . What you thought was a really known and obvious event, like a rate hike, turns into something thats a nightmare for the bulls. I always say you can really very rarely go wrong betting that someone is going to do something stupid or ignorant on wall street. Its a much better bet to presume foolishness than to presume rationality and clear headedness. I wish it werent like that, but it is. Which is why i could not agree with the woman in the elevator despite her many years in the business. Heres the bottom line. We all have to wait until the fools come to their senses or get blown out of the market until its really safe to go back into the water, once everyone knows about the rate hike. Because if you know that will be the case only after its already happened. Jim in new jersey, jim. Hi, how are you . Im good, jim. How about you . Im doing great, thank you. My mother im calling on her behalf. She has shes invested only in bonds, and the market value of her bonds right now is actually fairly higher than what she purchased them for. And an investor basically told her that she ought to sell her bonds right now, take the gains, that the bonds have had a good run and that, you know, once the fed raises rates, that that run is probably going to end. I was just wondering if you had an opinion on it one way or the other. Jim, i got to tell you, i actually agree with that. I dont think i want to own a lot of bonds that are well above par, well above 100 that can go back down. And they can get hit on a rate hike. I think ringing the register on some of that is not bad. Now, look, if you have bonds that yield a huge amount, okay, i get it. You want that income. But i think that her friend may be right. Lets not fool around. Take something off the table. I think weve seen the low rates for this cycle. The world of investing can help you make money, but it wont always make sense. While you might think a rate hike is a foregone conclusion, others may have blinders on right up to that event, particularly after todays rally. Theres much more mad money ahead today. Dont let todays higher move fool you. A selloff could still be waiting in the wings. Tonight im preparing you for a yellenindugsed pull back and give you my list of stocks. Then theres a new chip on the block entering the exciting new business of the internet of things. Im diving deeper into impinge to see if the remarkable run can continue. Can Charles River labs give your portfolio a healthy boost in an uncertain stock market . I suggest you stick with cramer. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov i dont want you to get complacent after todays terrific rebound. Like i mentioned at the top of the show, were not out of the fed woods so how can you prepare for a potential pull back if you think the fed could be up to its old confusing. Why not take this halcyon moment, rather than a panic of friday, to tell you about what happens in a selloff and if it when it does occur later this year. I dont like getting negative in the midst of a rout like friday. That sends you the wrong message. I prefer to wait for bullish days like today. If you want to take some profits, you can do so in a calm and deliberate way. The thing about selloffs is the best stocks tend to go down the hardest. But this and this is a big but. Theyre also the first to come roaring back. Why do the highest flyers go down the hardest in a major selloff . Because of doctrine. The doctrine that says never let your gains turn into losses. The stocks im going to highlight are all up magnificently for 2016. For professional money matchers, theres nothing worse than giving up these gains. Plus in september, so if youre a Hedge Fund Manager whos lucky enough to own some big winners, why not just take some profits and coast for the rest of the year . Thats what people do. If you own the stocks i am talking about, these sellers, not the fundamentals of the companies, theyre your real enemy. But why do these winners also bounce back the hardest . Because of what caused them to run in the first place. They didnt need the feds help to arrive at their lofty destinations. Theyve defied the naysayers all year and theyre armed with stories, which means they arent going to be harmed by a quarter point or even a halfpoint rate hike. Otherwise, they never would have gotten this high to begin with. So which winners are likely to get hammered and then rebound following a rate hike, and how did i find them . Well, first, i took the list of the best performing stocks in the s p 500. I did the same thing for the nasdaq. Then i added in a scan of the best ipos for 2016. Next i took out stocks that were on the list because of takeovers. Those are one and done. Then i cut the pure commodities stocks since they usually got on the list because they were down so much coming into the year that their percentage gain simply reflects the fact they were able to rebound from what many viewed as a terminal condition. I also eliminated any gold stocks because they often depend on the desire of Central Banks worldwide to keep rates low. So what does that leave us with . Primarily a handful of stocks, many of whom are in the semiconductor business, largely connected with the internet of things, with apple being a small part or no real part of their existence. Thats an important criteria given suspicions that the iphone 7 wont be a strong performer. Suspicions i want to make clear. I do not share in fact, i think the 7 is going to surprise us with its popularity, especially in light of the not so easily solved battery woes of principal competitor samsung. Other stocks on my rebound list represents value versus where they were trading because they turned out to be doing better than people thought. Finally there were companies that simply have a better mouse trap. Im going to start from the bottom up. Heres my top 10 fall and rise stocks for the next big selloff. Number 10 is micron. Moo. Heres a company that makes two kinds of basic commodity chips. A ton of other device applications. Micron, like western digital, which owns sandisk has had Great Success of late in the flash business as new product cycles have kicked in. We know with hp inc. Reported. It talked on its Conference Call about a shortage in both d rams and flash. Micron is a winner in that sej ario. Qualcomm is next. This Wireless Technology stock pulled back because it lost some apple business to intel and because its been fighting with some chinese communication companies. But these disputes have been resolved, and the negative apple news, im calling it water under the bridge. Then we have two medical Device Companies that have produced the better mouse traps. Theres Edwards Life Sciences with its revolutionary device that lets surgeons perform a heart valve replacement without cracking open the patients chest cavity. I think well look back and wonder how we ever thought to do it the old way, open heart surgery. Then intuitive surgical, with its Da Vinci Surgical Robot and his razor blade Business Model which continues to defy the critics and put up better than expected numbers, pretty much endlessly. Six, lots of people thought that sem an tech yes, ymc, had been left behind by other better cybersecurity plays. But then in january, they shelled out 4. 6 billion to buy a Company Called blue coat, a private equity led Security Firm that blocks out threatening and inappropriate websites. It was a twofer because sem an tech, which had been poorly led got blue coats ceo to take the helm. Im expecting it will come just right back. Heres an odd one. Microchip technology. Dont talk about much on mad money. Its another basic Building Block Semiconductor Name thats come into its own. Its on fire because its viewed as a terrific way to play both the internet of things and perhaps more importantly a potential takeover in the sector. We know the consolidation is ripe here. Next were not fans of retail, but we do like the suppliers that have come back into back to School Season with lean inventories. The one that comes to mind is pvh, the maker of calvin klein and Tommy Hilfiger products. It could be a big winner in whats regarded as being a pretty nonpromotional mall environment. Same things goes for urban outfitters, the retailer that scored big with fashion even though its in the mall. The Flagship Store had been in the dump for years. Second and now were getting to the tag ends here, one of the best performing groups this year is the Semiconductor Equipment industry, not the chip business, but the companies that make the chip equipment. And this is what happens whenever the chip makers have underinvested in new equipment and their end markets get stronger. Now, i happen to be partial to lam research, a. But platt materials is the star of the show. Amat has the most upside surprises in a row. That should continue as this company was supposed to be left for dead when its deal dissolved over antitrust concern. Finally, gaming chips. Thats nvidia, wiz you know i have loved. It takes a big market wide selloff to rein in a horse like nvidia. Th this one has perhaps the most momentum. Twillio and acacia. Its clear that its Software Platform which Powers Communications for netflix, facebook, airbnb and uber, has the best client list on earth. These companies cant live without them, which is why twillio is able to take a cut from every transaction. Acacia is the best of communications equipment. Its stock is expensive as all get out and it has some amazing momentum which is what youre looking for after a fed induced trashing as those are the ones that are going to bounce back the hardest. First they got to come down. Heres the bottom line. Ive waited for a supremely up day like today to tell you what i think could happen when not if, but when we get the next selloff, especially if the fed gives us a rate increase soon. When it occurs, expect the biggest winners to get hit hard as the hot Money Managers take the money off the table, giving you a chance to buy these stocks at much more palatable prices. I doubt youll be able to get out and get back in in time to participate in the next move higher once the smoke clears. Ann marie in new york. Ann marie. Hey, jim. Im calling about ventsa. I listened to you on friday about raising additional cash, did my analysis over the weekend, and told ventas which ive done really well on this morning. Did i just sell a star and i could end up with a no, no, no. I mean, look, heres the deal. The yields 4. 5 . The real estate visit trusts are really in the crosshairs of what happened when rates go up. I think you did the right thing. I think its doing an absolutely terrific job. I do believe you can get in the stock lower, and i would encourage you to do that. But right now, i think it makes a ton of sense if you wa nt to ring the register. Nobody ever got hurt taking a profit. On wall street, the bigger they are, the harder they fall. Thats just the chance to buy them at more palatable prices. Much more mad money ahead as the world becomes increasingly connected, but how do we actually connect those objects . Then Charles River labs is helping biotech discover potential blockbusters, playing a role in more than half of fda approved drugs. So stick with cramer. Announcer todds a great guy. I mean, look at him. What. A. Sweetheart. Attabo wait, todd, what are you doing . How totally selfish and untoddlike of you. Come on, todd, come on, man. Hey, its been crazy with school being back so were constantly going over our data limit. Oh, well, now all of our new plans come with no data overages. Wow, no more overages . So that means. Go on. Say it. Well finally be in control. And were back. Introducing new at t plans with no data overage charges. I want to introduce you to a freshly minted ipo thats rocketed higher. More than doubling since it became public at the end of july because i think it could be a terrific buy if we do get one of those kind of fedinduced pull backs that has to be expected sometime this year, maybe as soon as next week. Im talking about impinj. This is a smokin hot play on the internet of things. Now, the internet of things is all about the connectivity revolution as everyday objects like appliances, thermostats, medical surprise, apparel and food become connected to the web. How do we connect these objects . Thats where imping comes in. It gives clients what they call item intelligence, the unique identity location of a given product. In other words, their platform allows companies to get all sorts of data on where the goods are and where theyre going. The technology acts as a replacement for manual inventory checks which makes it invaluable to customers across multiple industries from retail to health care to automakers, just about anybody who has large quantities of inventory that need to be tracked. In part because of the internet of things is one of the sexiest trends in tech and in part because its First Quarter as a publicly traded company was impressive, its stock has been on fire. Climbing still higher to 34 as of today, less than two months later. That is a magnificent move. Like i mentioned before, i think all this markets bigger winners could become vulnerable to profit takes as soon as next weeks fed moistueeting. In that case, youre going to want to have imping on your Shopping List so you can buy it into weakness rather than chasing it into strength. What makes me think this stock is worth owning on a pull back. First theres the right of the internet of things. These things anything ask be connected to a network if you slap a radio frequency id tag onto it. Theres still tons of connectible items that remain unconnected. In most cases, they lack the physical infrastructure to make it happen, so they end up relying on stone age technology. That means having real people actually count things one by one. Thats the way inventory used to be done. Imping exists to help solve that problem. They use rain, a Radio Frequency Technology they pioneered along with google and intel. Currently rains spectrum is available in 78 countries that collectively represent more than 96 of the worlds gross domestic product. How does it work . It tags a given item with a cheap disposable radio frequency i. D. Chip. When i say cheap, i mean it cost pennies. Then they set up readers that can wirelessly detect these tags. It aggregates the data from its readers so its clients can keep consta constant track of their inventory. Last year, 5. 3 billion items were tagged with rain chips, and that number is expected to reach 20 billion by 2020. The real opportunities here are in retail and health care. For retailers having realtime intelligence of all of their merchandise helps them avoid running out of stock or having to mark down merchandise because they have too much inventory, which is the bane of their existence. You know what, it also helps prevent stealing. Plus as more retailers try to compete online, especially with amazon, knowing where everything is can make their omnichannel operations much more efficient. Thats why walmart, lululemon, co macys have all adopted the platform. The total Addressable Market for these tracking systems could be worth 5. 4 billion in 2020, just within retail. The second biggest opportunity for imping is in health care. According to Transparency Market research, it could be worth 5. 3 billion by 2020. What makes this technology so valuable in the Health Care Space . Hospitals lose fortunes on expired medications and consumables. Simply keeping better track of their inventories is a big money saver. Medicare reimbursement rates for hospitals are now linked to patient quality of care, which gives hospitals an extra incentive to have Realtime Data on their medical specimens, their medications and their instruments so that everything runs smoothly. Its not just re tail and health care. In the auto history, audi uses the technology to tag their parts and cars to make sure everything gets where it needs to go. Cocacola uses it in their freestyle soda fountains. Right now imping is the only company that sells as part of a single platform. Now theyre the market leader. So far thats working pretty darn well. It reported its First Quarter as a publicly traded company on the last day of august. Th the revenue came in higher than expected, up 36 yearoveryear. Management gave robust guidance for the next quarter and that is why the stock rocketed up nearly 21 the next day. Dont get me wrong, its a speculative stock. The companys operating is new and unpredictable market. It gets most of its sales from third party distributors. While currently it has more than 60 market share, its not too hard to imagine a deep pocket competitor one day stepping in to take some of that business from them. Its expensive any way you look at it. Trading at a little less than five times sales. Up here at 34, i recommend taking a pass at this very moment. However, if we get hit with a nasty selloff like friday again where all this years biggest winners get hit the hardest, thats when you should pull the trigger on imping. I think its absolutely worth owning if you can get the stock under 30 bucks. I think it could go there on a big decline for the overall averages. Impinj saw a new opportunity emerging thanks to the sbngtd of things and they pounced. Becoming the first mover in the item intelligence space. Their Technology Provides the metaphorical oxygen to retailers that are being choked by amazon and the hospitals that are being suffocated by rising costs and regulations. But the stock has had a big run since it became public in july. Thats why i want you to put this speculative name just on your Shopping List for the moment and wait for the stock to come down before you do any buying. Dont worry. I bet you get the chance in the next couple weeks as volatility is back, and we know volatility cuts both ways. Mad money is back after the break. Its scary when the lights go out. People get anxious and my office gets flooded with calls. So many things can go wrong. Its my worst nightmare. Every second that power is out, my citys at risk. Siemens digital grid manages and reroutes power, so service can be restored within seconds. Priority number one is keeping those lights on. It takes ingenuity to defeat the monsters that live in the dark. Announcer lightning round is sponsored by td ameritrade. It is time it is time for the lightning round when you hear this sound [ buzzer ] then the lightning round is over. Are you ready, skeedaddy . It is time for the lightning round on cramers mad money. Jeff in new jersey. Jeff. Mr. Screcramer, how are you doing . Im good. My question is on amd, i know they just did a bond offering and some secondary. What are your thoughts about the stock . Yeah, i think this pull back is an opportunity. I mean, look, they had to fix their balance sheet. Thats good. I like their business. Thats fine. I just think that once they put all that liquidity out there, you have to wait a little bit. Dont expect it to bounce right back quickly. Lets go to mark in texas. Mark. Cramer, whats up, dude . Miami mark calling from austin, texas. How is it going . Doing well. How about you . Good, man. Good. Love your show. Love what you do. One of the first stocks i purchased, believe it or not, was gw pharma. Were big fans of it because they have the actual pill of pure marijuana. The problem is now its up on a takeover spike, and it maybe it gets one. Remember, you cant make thats a class one felony to do what theyre doing in the United States, but theyre over there in london. I say you know what, sell half. Youre just starting. I dont want you to give back that big gain. Lets go to joe in jersey. Joe. Caller hello, cramer. Yeah. Caller i watched ground zero rising last night, and you did an amazing job hosting it. I loved it. Thank you. Thank you very much. Really appreciate it. I hope everybody does watch it because i think its really important. Thank you. Caller my stock is vector group. Buy, sell or hold . Vector group has got a disparate group of assets but it yields north of six. Almost 7 . I like that. I like the yield. I think the business is fine. Lets go to jeff in new york. Jeff. Caller hey, cramer, this is jeff in upper manhattan. When is the summer going to be over . When is the summer going to be over . Caller yeah, when is the summer going to be over . Yeah, i wanted to know what you thought about pet ex. It looks like an interesting pet speculation. You know what, look, if were going to do pets, the only one i want is idex, okay . Thats my pet play, and im not going remember, they came up with the humanization of pets. Were talking about humanization of pets. David in california. David. Caller hey, jim. Booyah. Booyah. Caller hey, my stock is ip, international paper. Okay. International paper has made a big come back. Why . Because apparently some of the rates for are going higher. Its got a good yield, good worldwide business. I say stick with it. Dave in illinois. Caller dr. Cramer. Thanks for that. Caller recently adding a stem. Google like abbv. I think this is a great long term position. I dont expect anything big until after the election. But abbv, ill give you a twofer. I actually like abbott labs despite the different news about it. I think its a good situation. And that, ladies and gentlemen, is the conclusion of the lightning round. [ buzzer ] announcer the light round is sponsored by td amer trade. But why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Remember here at ally, nothing stops us from doing right by our customers. Whos with me . Im in. Im in. Im in. Im in. One, two, wait, wait. Wait wheres tina . Doing the hand thing . Yep we are all in for our customers. Ally. Do it right. It was a fabulous run today but lets not get ahead of ourselves. What kind of stocks might be worth buying if our worst fed fears come true . How about Charles River laboratories, provides pharma and Biotech Companies with everything they need to discover new drugs and conduct early stage clinical trials, right down to the lab rats and mice used for safety testing. I like to say that Charles River is indeed an arms dealer on higher prices this year, the fact is these companies are going to keep spending money on research and development no matter what. Those companies can raise prices. It doesnt matter if the fed tightens or the economy slows. If youre a pharma or biotech firm, youve got no future if you arent investing in r d. In many cases that means giving money to Charles River. The Company Reported a very Strong Quarter at the beginning of august. Since then its pulled back about 7 . No news. This is the exactly kind of stock that could be attractive in weakness. Theyve been making a series of smart acquisitions including buying wil research for 585 million in cash. This company is a cash machine. Lets check in with jim foster, the chairman and ceo of Charles River laboratories. Mr. Foster, welcome back to mad money. It caught my eye that you got something new. Humanize mice. Making mice more like humans. This sounds like the innovation that can take share from others. Humanize mice is really Important Technology where youre making an animal model to be like a human avatar. Youre getting much better results that are going to show you how the drug is likely to work in people. This is translational medicine. When youre doing animal work, its about information you get doing animal work, is that translatable to humans . Is that a predictor . Is that something we can use well . So, yes, i mean were really excited about that. We have technology to do that. Its relatively early days, but i think these animal models will become increasingly more important and significant for Drug Discovery because, you know, helping the Drug Companies determine whether to continue with a drug can be better than an animal that is likely to predict how it is with people. When youre doing a terrible cancer trial, a lot of times people cant live through the trial. This may be another way without worrying about the fatalities. And also animal models live a much shorter period of time so you can see the so the time elapsed in a juvenile and an adult and an elderly person. So animal models are giving you much better information potentially. You had a fantastic quarter, and im concerned obviously its an election year. It seems like the politicians like to beat up on the Drug Companies. So, therefore, perhaps the Drug Companies pull in a little on their reins or theyre worried about drug prices going up. Is that something thats good or bad for Charles River . I think that where we are is weve got extraordinary companies now developing drugs for indications that no historically you couldnt make drugs for. So we have antis that are come of age. We have gene editing thats come of age. We have the immune system that is actually working, and i believe that the Capital Markets and the Insurance Companies will pay for drugs that are breakthrough drugs that keep people alive longer or cure diseases. So i think thats good for Charles River. I think thats good for society as a whole. I certainly think its good for the Drug Companies. I think most of the Drug Companies that are working hard at drug innovation and r d and are making breakdrthrough or drs for especially small groups of patients are doing really important work. And so i do think theyll get paid for that. We had an ipo boom for biotech, and now we have a bit of a bust for all ipos. How much does that move the needle . A lot of these Companies Still have a lot of money left over. Are you worried that, say, a year from now its going to run out . A lot of cash came in in 15. So far in 16, theres more cash than came in in 13 and 14. Not as much as 15. But we think theres flthreepl years of cash available. We think pharma will fund at the same level or higher since the Biotech Companies are becoming the discovery engines for pharma. Pharma is going to write those big checks. And, again, just to go back to the prior question, i dont believe that the Capital Markets wont pay for Great Innovation with great drugs. Okay. Now, you continue to be inquisitive because you generate a lot of cash. At a certain point i mean youre up to 50 market share for some things. How much room is there to gain . Our strategy is to continue to build a large portfolio of services. I think the more services that we can add to our portfolio, either on our own or through acquisitions and a lot of it will be through acquisitions. That along the Drug Development pipeline. So if the Drug Companies shrink their own infrastructure, we can do more of their work. And the Biotech Companies never had the infrastructure. The broader our portfolio gets, the more therapeutic area specific it gets, the greater impact we can have and the more important we are to our clients, helping them understand the molecules and helping them to make these go and nogo decisions, which is why we worked on more than 50 of the drugs the last two years. Theres a reason for that. Last question. You get to see things that are in the lab that might not be out for five, six, seven years. Will major cancers be cured in seven, eight, nine years from what you see . I think that were making an enormous amount of impact on cancer. A lot of cancers now have become chronic, meaning theyre treatable. A lot of cancers are actually being cured. I do think immunooncology is a massive, major breakthrough. I cant give you a time frame, but i think certainly in the next decade, were going to make Great Strides in improving health care and particularly cancer. Congratulations on a great quarter. You defied a lot of sceptics. We got it right because you keep doing great things. Jim foster, ceo of Charles River labs. Arms dealer to all the Drug Companies. A terrific business. Stick with cramer. Using 60,000 points from my chase ink card i bought all the framework. Wire. And plants needed to give my shop. A face. No one will forget. See what the power of points can do for your business. Learn more at chase. Com ink see what the power of points can do for your business. Now that fedex has helped us we could focus on bigger issues, like our passive aggressive environment. Were not passive aggressive. Hey, hey, hey, there are no bad suggestions here. No matter how lame they are. Well said, ann. Ive always admired how you just say whats in your head, without thinking. Very brave. Good point ted. Youre living proof that looks arent everything. Thank you. Welcome. So, fedex helped simplify our ecommerce business and this is not a passive aggressive environment. I just wanted to say, you guys are doing a great job. Whats that supposed to mean . Fedex. Helping Small Business simplify ecommerce. But the best place to start is in the forest. Kubo i spy something beginning with. S beetle snow. Kubo no. Beetle snow covered trees. Monkey nothing to do with snow. Narrator head outside to discover incredible animals and beautiful plants that come together to create an unforgettable adventure. Kubo wow narrator so grab your loved ones monkey dont even. Narrator and explore a world of possibilities. Kubo come on, this way. Narrator visit discovertheforest. Org to find the closest forest or park to you. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Tomorrows a big day. Ill sit down with joe psi of alibaba, and the ceo Everyone Wants to hear from. Wells fargo chief. Theres always a bull market somewhere and i promise to find it for you right here on mad money. Im jim cramer, and i will see you tomorrow [ bell rings ] you dont send a swan down a sewer to catch a rat. [ knock on door ] you send a bigger rat. The u. S. Government spends billions of dollars fighting powerful mexican drug cartels. They have a heavy investment, and theyre willing to kill for it. But the americans stand accused of getting too close to some of the worlds most notorious criminals. They are making deals with them. They are in bed with the enemy. The big question here is, what does cocaine and heroin trafficking have to do with u. S. National security . [ wailing ] as a brutal drug war raged in mexico, american law enforcement