Transcripts For CNBC Mad Money 20160914

That demand is waning in Many Industries just when the fed wants to tighten. Hence while we ultimately drifted lower again today, dow dipping 22 points, nasdaq advancing just 0. 36 . Thank you, apple, for that. But if demand is just fine, thank you, not falling off a cliff, then we can tough this market out together. Not everyone agrees. For example, at the alpha conference yesterday, the vast majority of speakers seemed to write off the prospect of any robust growth in demand either here or worldwide. If you had to boil down the barest thesis, it will go like this. Central bankers are out of bullets. Nothings working. Demands declining. So were headed into the unknown, and lurking in the unknown is a terrible abyss of losses for anyone who owns anything. Stocks, bonds, you name it. While i have a macroworld view, im whats known as a bottoms up guy, a person who looks at demand company by company and makes an aggregate case based on what i can put together. Now, i admit that the demand side worldwide is worry some, not dangerous, but worrisome. What we saw in 2007, that was dangerous when Central Banks generated Systemic Risk by tightening into an economic collapse. We dont see the big stimulus programs, you know, the governments printing money coming out of europe. Those governments led by germany are simply too cheap. I dont know what the heck the japanese are doing. Whatever it is, there seems to be more demand for the new soupsuper mario bros. Game than anything else. The demographics just dont support robust demand given japans aging population and ultralow birth rate. Latin america is trying but as long as venezuela is in trouble and brazil is transitioning out of trouble, dont get your hopes up. Two bright spots, india and lately russia. Good but not good enough. China, we just dont know if their growth is accelerating or holding standard. Yesterday amidst all the gloom, i interviewed a fund manager. His name is robert bishop. He recommended a resource stock, teck resources. He said chinas commodity demand is now climbing after bottoming out in the first couple months of the year. Then we interviewed joe tsai, the cofounder of al by baba. He said demand is strong for everything they sell. Alibabas stock is on fire. Have you seen that . I think speaks louder about chinese demand than any of the usual indicators. Which brings us to the united states. I find the demand story here challenged, okay . Maybe some ways impaired, but not down for the count. And certainly not at all dangerous. How am i measuring demand . One input that predominates, i think, falsely, is the price of oil. Weve been trapped in this macroworld as measured by commodity pricing meaning bigger Fund Managers look at oil as a virtual thermometer. Any time the price of oil drops as it did today, plummeting 1. 26 down to 43. 64 any time oils rally, thats a sign demand is picking up. I mean ridiculous. This is ridiculous. The price of crude is the sum of supply and demand, okay . With supply ready to overwhelm any demand, even demand thats 10, 15, 20 stronger than it is now. When u. S. Oil inventories drop as they did today, you have a fleeting rally in crude and then a decline because we recognize that theres still a glut. Too much oil being produced. Later as oil heads to 40 from 43, you then get a rebound because the countries that want the price higher spread rumors of an emergency opec meeting to freeze production. This rumor mongering works like a charm every time. In other words, the price of oil, its manipulated. Its bogus. And it has little to nothing to do with the real demand we need to calculate to make our world view, even as its the metric of choice for so many Fund Managers. Others use the price of metals like copper and steel. One of the reasons is copper has been displaced by other materials. Its an indicator of nothing. So what am i looking at . In the u. S. First its employment. Im still encouraged. I think employment is relatively strong. Its why i dont fear a rate hike as much as others. Thats based on my forecast bay looking back at what happened when the fed tightened in september. Next i look at housing. Housing demand remains strong in this country. Were talking to Toll Brothers later tonight and their view is pretty positive on that latest Conference Call. When housing is robust, that means spending to fix up a house is strong, and thats a major piece of our huge retail economy. How about nonreally construction . Big chunk. Big chunk of the business. I speak to several companies in every silo of nonreally from the Construction Loans in all geographies to the materials needed to erect buildings to the fixtures, heating, airconditioning, lighting, ventilation companies. My judgment . Things are pretty good. While i dont like the automobile stocks because the worldwide enterprise isnt as healthy as id like as i just said, the demand in the u. S. Is strong with suvs and trucks selling very well. Aerospace, strong out of boeing today. At the actual store level, it is mixed, not terrible. Casual dining is not good. Look at Cracker Barrel down 10 today. But some of that is because its just a lot cheaper to stay home thanks to the decline in the price of food mentioned on the Cracker Barrel call. I believe theres also been a tamping of demand from increased health care bills. Retailers, hit or miss. We see strength of walmart and amazon which are a huge part of the retail equation. Department stores, not great all we we had a key up grade at macys today. Back to school, not bad at all. Go and then theres perhaps the most overlooked gauge of demand in this country, and thats the huge and, yes, entirely unexpected increase in orders for apples supposedly blah iphone 7. When you have sprint and tmobile saying they have off the chart demands for the phone, when at t tells us today that demand is better than expected and verizon says its consistent with the predictions ceo Lowell Mcadam made on this show, that the iphone is indeed selling very well, then its an actual needle mover. Hence the terrific run in apple stock. The sessions leader. We know that millennials now represent about half the consumer demand in this country and they spend on way Different Things than other generations including my own. They like experiences. They like games. What can you play the most highpowered games on . The iphone 7. How do you share your expenses best . With beautiful pictures taken on your brandnew iphone. You have a billion iphone users and theyre willing to spend hundreds of dollars on their phones, these new ones that they otherwise would spend on Something Else because they want the processing power. They want the speed. Thats pure demand. Now, i know that my mosaic seems nothing but a series of anecdotes. We want someone from a we want a Commerce Department number to capture what i just put together. We want some grand inquisitor to ask questions and make sense of everything and then mind meld it with an algorithm that shows us what the economy will do given that set of circumstances. Thats never going to happen. Youre stuck with my anecdotes. Heres the bottom line, though. The plural of anecdote is data, and based on the data, i think we dont have enough demand to keep the market from going lower. But we do have enough demand to contain the decline to levels that arent dangerous. Thats why i keep telling you to stay the course, because it will ultimately be too hard to get out and then get back in at lower levels. Depesh in tennessee, depesh . Caller yes, mr. Cramer. Thanks for taking my call. I have a quick question about monsanto. It i was just wondering is it still trading at 106 and 107. Is the right time to buy . No, i dont want to buy because i dont believe the deal is going to go through. I think the farmers will fight it, and the companies themselves may be misjudging the opposition by the farmers. Mike in montana, mike. Caller thanks for taking my call. Of course. Caller im an investor in met life, and they are seeking to exit a u. S. Retail unit. They want to do it by spinoff or an ipo. What would be the effect of the stock if they do . I think its baked into the stock and youve got a 3. 65 yield. Its just an okay insurer. Its not fabulous. What can i say . Thats my judgment. Jerry in arizona. Jerry. Caller mr. Cramer, stock symbol, amba had earnings last week and afterwards it got hit hard. At this point would you consider this a buy, sell or hold. I was on the look, the business is good, but the stocks very expensive. I dont want to own ambrella stock. Ive got too many high quality stocks that are n the Semiconductors Business that i think are doing terrific stuff, all this drone stuff. Its too hot for this guy. Me no like hot. All right. Theres no Global Demand number. No heres where the World Economy is headed algorithm. You got to find the clues, figure out the answers and right now things dont look great. But theyre far from bad enough to have me telling you to run for the hills. I say stay the course. Tonight, the political rhetoric against drug prices has been tough. An investment in one major drug company. No, not yet. But ill tell you which play i think looks compelling just ahead. Then it may be fashion week in new york city, but the retails havent been en vogue on wall street. Is it time to circle back to the sector . Ill reveal the one stock that put its best foot forward. Is it time to make a house a home in toll brlths . Toll house. With Mortgage Applications rising this week, see if an increase in demand. I suggest you stick with cramer. Announcer dont miss a second of money. Follow on twitter. Have a question . Tweet cramer. Madtreats. Send jim an email or give us a call at 1800743cnbc. Miss something . Head to mad moisture. Cnbc. Com. Using 60,000 points from my chase ink card i bought all the fruit. Veggies. And herbs needed to create a popup pickyourown juice bar in the middle of the city, so now everyone knows. We have some of the freshest juice in town. 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. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. This has been a very tough 12 months for the drug industry. Were nearing the oneyear anniversary of the infamous hillary tweet where the current democratic nominee pounced on the martin skra really scandal to come out against price gouging. Ever since then, the pharma and Biotech Group have been stuck in the house of pain. That was just the first in a parade of negatives. Valiant went into free fall thanks to a vortex of accounting issues, disappointing number, for aggressively raising prices while slashing its r d budget. And the Obama Administration blocked pfizers attempt to take over of allergan, which would have been an amazing deal, by moving the goal post at the last minute. And then last month, mylan put itself in the crosshairs by dramatically raising prices for its epipen, a life saving product that went generic ages ago because for the moment, their main competitivor has been forced to pull its alternative off the shelves. You can understand why the stocks have been punished so severely, especially since Hillary Clinton continues to lead in the polls, even if the race has been tightening of late a. The pharmaceutical sector has represented by the power shares phar pharma as for biotech, the i shares nasdaq bioetf has fallen more than 15 this year. Its tumbled nearly 30 from its 2015 highs. Against this backdrop, you might think a person would have to be crazy to buy shares in a drug stock. At least until the dust settles after election day. Well, call me crazy because over the last few weeks weve been building a new pharmaceutical position in my charitable trust. We meaning me and jack moore, the street. Coms chief investment strategist. Yet weve been buying the stock of bristolmyers, the drug company ive referenced for years as the kind of high quality sec u lar Growth Business thats imniced against the slings and arrows of the federal reserve. Bristols stock had gotten away from us earlier this year, but lately its taken a highprofile beating. Coming from 75 down to 55 in a very short period of time. And to me at these levels, it just screams value, even as you might have to wait a while for this investment to pay off. Emphasis, a while. But before i explain a while like bristolmyers here, you need to understand how this 92 billion big pharma name could lose an astonishing 28 of its value in less than two months because you almost never see a large capitalization stock fall so hard and so fast, let alone a highquality, not one of these drug i mean debtfueled businesses, but a highquality shares of bristolmyers entered august just a few bucks shy of their all time highs. On august 5th, they plunged 16 . The cause . The company now said its flag ship oncology drug failed to meet its primary end point in a Clinical Trial for advanced nonsmall cell lung cancer, and that is a gigantic end mark. So this news was a huge set back for the companys most important drug. It particularly led to a slew of analysts down grades. But bristolmyers is a massive drug company with lots of products in the pipe. So then why did this one busted trial do so much damage . Until we got this sub par data, bristolmyers was widely regarded in the cancer immunotherapy space. Opp teva is already commercially available and and opp divas growth has been explosive. Last year in generated a billion dollars in sales and its just the fir as soon as we learned this drug failed to meet its primary end points in that lung cancer trial, wall street suddenly soured on the entire franchise, assuming people would switch to a competitor, and thats the drug keytruda that merck makes. However, the reality is far mu nuanced. The reason this drug failed to hit its end points is because brisz toll meyers sent the bar to high when they set the Clinical Trial. Opp teva freigoperates on a particular protein but when they set up the study, they included any patients who expressed that brigs toll meyers wanted to show that opp teva would be effective for every lung cancer patient, but even if they set the threshold at 50 , it would have demonstrated the drug could be effective for a huge number of patients. Because they set their sights so high, they got burned. So then why circle back to bristolmyers now . I mean isnt it just left for dead . Remember, the stock lost 20 billion of value the first day after the news broke and since then its only gone lower. Were only talking about a 5 billion stroke, right . 5 billion in lost sales. Big, but not 20 billion in market cut big. At the most basic level weve been buying bristolmyers because the pendulum has swung from opdivo estimates being too high to them now being too low. Now that analysts have completely stripped 9 nonsmall cell lung cancer numbers from their forecast, its just way too much negativity baked in. As the company pointed out, theyve still got a nonsmall cell lung cancer trial going pairing opdivo with another one of their drugs. If that trial goes well, the estimates will need to go higherment remember, even with last months setback, opdivo already has fda approval for a host of different cancers. I dont think the strength of this drug will be totally diminished just because it did poorly in a single poorly designed by the company study. The fact is bristolmyers remains a major player in the hottest subset of oncology, which is the cancer immunotherapy market. This is a classic Big Pharma Company with a host of different drugs for a variety of diseases from cancer to immune conditions to cardiovascular issues and nurologist and theyve got a robust new pipeline even after taking the opdivo cuts into account. The stock yields 2. 75 and even if the fed tightens next week, thats likely to be better than youd get from the ten year treasury. I think bristolmyers represents tremendous value at these levels. One big caveat. Bristolmyers is now a Value Investment and that requires a longterm time horizon. It could take a year, two years for the story to play out. Short term things could remain choppy and theres no reason it k7b9 go still lower. I like it into any additional weakness. As we told subscribers, well patiently buy more bristolmyers on the way down. So heres the bottom line. In this negative environment for the drug industry, i think bristolmyers has finally come down to the point where its simply too afracktive to ignore as a longterm investment. Sure, its not flying high right now. But bristol stock has been hammered before, and its always come right back eventually. I think this time will be no different. Much more mad money ahead. Has foot locker found its stride . The stock is up double digits. Then how will a rate hike impact the Housing Market . Im sitting down with the number one luxury home builder to find out. And why a company like Boston Scientific could have more of an impact on your portfolio than any fed action. Stick with cramer. Now that fedex has helped us simplify our ecommerce, 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. Are you or your spouse saved enough for retirement . 62 or older . A governmentbacked reverse mortgage enables you to turn the equity youve built into the retirement you deserve. With over 20 years in the mortgage business, lendingtree allows you to compare free reverse mortgage offers with no obligation. Just go to lendingtree. Com or call now to get started. Live in your home and get the steady income you need. Enjoy your family. Your home. Your life. Lendingtree when banks compete, you win. Narrator kubo est place come on, this way. E. Narrator . Is in the forest. Kubo wow. Narrator so grab your loved ones monkey dont even. Narrator and explore a world of possibilities. Kubo its beautiful. Narrator visit discovertheforest. Org to find the closest forest or park to you. Boy, it is tough to own a retail stock these days. The house of pain. Lately it feels like the whole group has fallen out of favor in the wall street fashion show, which has a whole different aesthetic from fashion week. Heres the thing. The consumer discreasary category makes up a little over 12 of the s p 500. Most of that being retail. Why does that matter to you . Because there are tons of hedge funds and mutual funds out there that dont feel safe unless theyre mirroring the sector rating of the s p 500. Basically they operate like an index phone with a brain. That way youre much less likely to in short thanks to what i call the mechanics of money management, many of these funds have a lot of cash that they need to invest in some sort of retailer. In only they could continue to mirroring the sector makeup of the s p 500. This may sound like a crazy way to invest, but its how a lot of these guys operate. Just look at the health care sector. The broader sec tore has been a dog all year, right . But the medical device stocks have roared higher because theyre the one segment of the Health Care Cohort thats actually doing well and is not in the crosshairs of the politicians. So all the hedge funds and mutual funds who need Health Care Exposure pul into the medical device stocks like Boston Scientific, whose ceo we heard from just last night. More on that later. Right now, though, its retail thats in the dog house. But we know that baskets of money allocated for Retail Stocks need to go somewhere. They need a name is what we would say on the desk, which brings me to foot locker. Yes, foot locker, the huge Athletic Apparel chain. Even though its pulled back a few bucks in recent weeks, i think footlocker is exactly the kind of retailer that the big boys will feel comfortable buying in order to get the retail exposure that they need to have. What makes me say this . Okay. The last time i talked to you about foot locker was in early june when the company had just stumbled. After a two year winning streak where they only delivered knockout numbers. The stock had gotten slammed and investors were writing this one off. They decided to forget about foot locker. Still one more victim, of course, of the death of the shopping mall. But i told you not to be disheartened by one missed quarter. In part thats because there were mitd gating circumstances like the liquidation of Sports Authority, a major competitor that at the time was furiously dumping its merchandise at fire sale prices before closing all of its stores. I also wointed out that once Sports Authority had finished liquid atding, their market share would be up for grabs and beyond that foot locker had a lot going for it, including a midge store innovation plan. Best of all, i liked that the stock was dirt cheap, trading at merely 10. 7 times next years earning estimates. Solid execution. Thats why i said foot locker looked like a steal back at the beginning of june when it was at 55. Sure enough, it didnt take very long for foot locker to come back with a event advantavengea. Its now at 65 and change. Most of that gain came when foot locker reported again in midaugust. This time the company was back at the top of its game, delivering a strong top and bottom line beat, solid 4. 7 samestore sales growth. Even better, though, the commentary on the Conference Call was terrific and assuaged all of our fears that had been raised by that last suboptimal quarter. Management said the traffic to foot locker staore was back o its old strong self again thanks to new product launches in the air jordan superstar, the curry, and the kyrie platforms. The ceo said, theres more work going on in basketball and well wait until the vendors really bring that to market to talk about it, end quote. Then he continued, quote, we see good things in basketball in the back half of the year, end quote. Back half of the year means holiday msnseason. One of the reasons i like they literally sell sneakers that you cant get anywhere else. They tend to be the best, most fashionforward of all the iterations of these sneaker companies. What else . The company put up very Strong Performance internationally. Gross margin expanded by 40 base poin points. They didnt have a lot of inventory. One more thing. Ive been a big fan of foot lockers Renovation Program because remodeling stores is a proven way to boost traffic. On the latest call, the company indicated they remodeled about 30 of the locations worldwide. Johnson said, the remodels outperformed the balance of the chain and in tow tality, they surpassed all of the hurdles that we have from a financial point of view, from a Capital Investment point of view. Put it all together, and thats a pretty darn good quarter. No wonder the stock surged up 11 that same day in response. Look, thats far from the only reason to like foot locker here. Theres also the adidas factor. We know the popularity of nike and under armor, but lately adidas has been making a come back after a long period. Theres a reason adidas stock has rallied more than 65 yeartodate. Theyve been gaining traction in footwear and apparel by offering new styles with more celebrity collaborations and athletic endorsements like aaron rodgers, james harden. Thats how their north american sales rocketed an incredible 26 in the first half of the year. In particular, adidas superstar shoe has experienced a major resurgence because the company introduced a huge variety of new colors. It doesnt take a genius to figure out how the success for a a look at this display from one of their stores. In fact on the latest Conference Call, foot locker called out the strength of adidas superstar. Obviously it was good for adidas may be bad for nike and under armour, but we dont care here. Why . Foot locker is agnostic. The better any of the suppliers do, the better they do. Even though foot locker has rallied nearly 18 since i recommended that means foot locker is trading at a huge discount to the broader averages, even. Still down yeartodate after recovering from a rough start to the year. This seems wrongly priced to me. Let me give you the bottom line. Can foot locker gets hit if the market goes back into sell off mode . Absolutely. Of course. But the company is doing extremely well and the stock is cheap. It will only get cheaper if it goes lower. There are a ton of Money Managers out there who need to own m Retail Stocks and right now there arent that many retails who are doing well enough. Foot locker is one of the rare few. Its going to be their goto name going into the holiday season. It should be yours too. Jeremy in california, jeremy. Caller hi, jim. Calling from claremont, california. How are you doing . Man, i love claremont. Doing great. How about you . Caller i am doing well, thank you. Hey, im calling about dicks sporting goods, ticker dks. Right. Caller ive had it for a too months, but it seems to be at a stalemate. Should i hold on to it . Had a huge rally after we realize the Sports Authority really was gone. I now would hold on to it. Dont be aggressive. I think you can come down into the next market selloff. Troy in new jersey. Troy. Caller how is it going, jim . How are you doing, troy . Caller doing well. How about yourself . I am doing well too. Caller question about skechers. Its come down a lot. Its an inexpensive stock. It has no there are a lot of momentum Money Managers in it and theyre all bailing. That stock is going to tell you when you can buy it. It doesnt seem like you can buy it yet. When you pull back the curtain on wall street, you can find some interesting activity. There are a ton of managers out there that need to own a retail stock, and i think theyre going to be looking to buy foot locker, which is still cheap even after this run. Much more mad money ahead. What should you do with im going oneonone with one of the top players to find out. The big time Money Managers might be looking at this market wrong. Ill explain just ahead. Tonights special edition of the lightning round. So stick with cramer announcer tomorrow, kick off the trading day with squawk of the street. Live from post 9 at the nyse. 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. What are we supposed to make of the Home Builders . Despite some strong housing data, the groups been a mixed bag in terms of performance. We have to worry about this all the time. We think that could put a dent. Maybe people wont buy as many homes. Still when Toll Brothers number one luxury home builder in this Company Reported a few weeks ago, they totally knocked it out of the park. It went from 29 to 31. What got people so excited . Toll delivers a nice top line beat but more important, headline numbers. They mattered, but it was the 18 increase in net signing contracts, 90 increase in their backlog. I thought that was amazing and the fact that management gave bullish full year guidance. Since then, Toll Brothers has pulled back to the point where its stock is now trading below where it was before it reported, like the past quarter never happened. Some of that is anxiety about a possible rate hike but given the stock is already down 13 yeartodate, i got to wonder if it could be just a buy. The ceo of Toll Brothers, find out how his company. Mr. Yearly, welcome to mad money. Ive followed your Company Since it became public and you know i know bob toll. Yeah. And youre a philly guy. Yes, i am. Hes a huge eagle fan like me. The one thing that has shocked me is that the whole time, you guys have never really been big buyers of stock. This year, its an incredible amount of stock youre buying. Tell us why you switched directions and just think that the stocks too cheap and you got to buy. We bought back about 7 of our stock in the first three quarters of 16. It was the opportunity. Our book value is in the high 20s. Our stock was trading in the high 20s. We have some of the best growth in the industry right now. Order growth is leading the industry or up there at the top. Our earnings are at the top. Our margins are at the top. Theres been this fear about luxury that were not seeing in this business. We saw where the stock price was laying around and this year was the time to buy a whole bunch back. We have a lot of retail investors. When you say book value, what youre saying is basically what this company is worth, its land, its prospects. Thats right. If we have the leading margin in the industry, you would think our book is pretty secure. Yes. Thats whats confusing me. One of the things that i want to go over, you mentioned about the high end. What is the sensitivity both to the high end because thats where you are, and then to the other end where some of these stocks are doing much better than yours, but i cant figure it . An increase, say, of a half a point in mortgage rates. Who does it hurt more . It hurts the lower end more because it comes down to affordability. It comes down to dollars and cents of what they can afford in a given month. Do they continue to rent, or is the rate such that they can afford to own . Our buyers dont max out their mortgages. Our average ltv is 70 pshsz, 20 of our buyers are all cash. This is their second, third, fourth home theyre buying in their life. While a major move in rate would hurt us, a small tick will have no impact. Ive always said i will take a rate thats 4 , 4. 25 in a Strong Economy over 3. 5 rate where weve been for a long time. Right. In an economy that is not as good. So when the fed talks about maybe theres a rate increase and the builders sell off, that, to me is good news there might be a small rate increase because the economy is strong, yet the market is reacting short term with a sell. Are you still buying stock . We havent bought any yet this quarter. Okay. But we will certainly continue to be in the market, and you will see us continue when the opportunity presents itself to buy stock back. Is there news that is going to allow you to buy it . Were always bouncing land opportunities we have with the money we have because thats our growth. Right. Versus stock buy back, and we will continue to balance. Lets talk around the country. California, how is it. Fabulous. Really . Fabulous. Were in coastal california, northern and southern. Were not inland. Okay. We did a huge deal two years ago when we bought chappelle, 1. 6 billion, which it transformed the company. We now have 25 of our business coming out of california. Orange county, l. A. County, ventura county, south bay and east bay of san francisco, fabulous. Average price of those places . 1. 2 million to 1. 5 million on average. Thats not a problem . Were killing. How about in the middle of the country . Our best market is detroit. Not a lot of job growth in the midwest. Were also in minneapolis, chicago. We like whats going on in michigan. Theres been more job growth as the Auto Companies have done better, but thats not a big growth territory for us. Florida . Florida is good. We need more land. Very hard to find land. Were doing very well in jacksonville. Were doing very well in orlando, which tend to be primary home markets. And then the second home market and the retirement areas of the gold coast of the east and the west coast, theyre good. We just need more land. Then round circle from what ha been not that great, northeast, great. Northeast is great. You know, we dominate boston to washington. Thats our home turf. Were out of philadelphia. Very few big National Builders are there, so we tend to dominate the land buying. We have a great brand because we grew up there. Right. Its hard to find land. Its hard to grow because its so difficult to get land entitled. It may take five years in new jersey to get a farm approved for houses. When you get it, its gold. I wanted to ask you, ive been looking at this apple home kit. Is that something is it Toll Brothers outfitted electronically to be able to do the kind of home kit things that we see . We do a lot of it. We dont use apple right now. Were looking into that. We use another Company Called control 4. But were all over it. Last question. The fortune rankings were pretty amazing. Tell people what you are and how that happened. Fortune magazine rank tsz the most admired companies by industry and weve been winning in home building. Then they rank worldwide of all industries for the quality of product. And all of a sudden little Toll Brothers out of philadelphia is number 6 on this list worldwide. The only companies in the world ahead of us are apple, amazon, nordstrom, google, and disney. Thats it. And then toll. I thought that was amazing. Youre the most optimistic ive heard you, and i hear you in all different venues, that i can recall. You know, jim, we announced three weeks ago, three weeks into our new quarter, that our deposits, which is an indicator of whats coming because its when somebody puts a check down on a lot, were up 23 for those three weeks. Were now three weeks further in. We are up 25 . Thats great news. Thats news. Were rolling. All right. Thats great news, and i did not know that. Thank you so off for sharing it with our viewers. Thats doug yearly, ceo of Toll Brothers. Mad money is back after the break. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. Enepeople want power. Hallenge. And power plants account for more than a third of energyrelated carbon emissions. The challenge is to capture the emissions before theyre released into the atmosphere. Exxonmobil is a leader in carbon capture. Our team is working to make this technology better, more affordable so it can reduce emissions around the world. Thats what were working on right now. Energy lives here. 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. Perfect driving record. Until one of you clips a food truck. Then your rates go through the roof. Perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you twentyfour seven. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. With dand bold styling to to stay ahe of the curve. E. The lexus rx, rx hybrid and rx f sport. This is the rx, elevated. This is the pursuit of perfection. 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. I want to start with sam in florida. Sam. Caller thanks for taking my call. How can i help . Caller my stock is macys. I bought it two weeks ago after bad reports. Should i keep it . You want to keep that stock. Saw the upgrade today. I say buy, buy, buy. Charlie in pennsylvania. Charlie. Caller what do you think about my local bank, Community Bank systems . The Community Bank . Caller Community Banks systems, cbu. Yeah, its okay. You know what . I mean that group is under pressure right now because of another bank, wells fargo. But i would tell you that i think its just an okay situation, not expensive, not cheap, not enough for me. No edge. Lets go to curtis in north carolina. Curtis. Caller mr. Cramer, thanks for taking the call today. I also want to thank you for your work on the ground zero program. Outstanding tribute to those who served. Thank you. Caller give us your take on smith wesson going forward. I like the stock. I think its too cheap. I think you want to own it during these periods where people feel its rolling over. Represents good value. Jimmy in chicago. Jimmy. Caller how are you doing there, jim . Im doing very well but i hope to be doing better after monday night when the eagles are going to play the bears. Whats up . Caller lets go, bears. But i had a question regarding alibaba. Ive actually held it sorry. What was that . Caller theres some action usually in october. What are your thoughts on the long term . On alibaba . I have to tell you when i sat down with i got to admit that stocks going higher. I dont like to recommend chinese stocks, but that stock has the most momentum of any international stock. I think you got a good one there. I was kind of shocked at how good it does sound. I know my friends who are bears on the name cant believe it, but, wow, there is momentum there. Lets go to jerry in new york. Caller jim, youre the master. Thank you. Caller seven years ago, you did a brilliant analysis on celgene and brought on your neighbor, the ceo. I was so impressed with your homework, i even got my friends and family to buy. We all literally thank you a million for changing our financial lives. Thank you so. That was a good one. Caller zika is now in 60 countries, and spreading like wildfire. Yeah. Caller there are over 80 reported cases in florida alone. It is spread by the aedes aegypti mosquito. Spring in South Carolina recently killed millions of bees, and god knows how many other bugs that are important to so what would the stock be in this case . Caller this would be the exxon the intrekon. I think its a good spec for zika. Its not my favorite stock because its expensive, but it is a good spec, and im not going to deny that. Dick in michigan. Dick. Caller yes. My question is, jim, spectra energy. I like that combination. Just the opposite of intrex son. That concludes the lightning road. Announcer the lightning road is sponsored by Td Ameritrade. So that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade everyone thought i was crazy to open a hotel here. Everyone said its so hard to be a musician, but i cant imagine doing anything else. Now that the train makes it easier to get here, the neighborhood is really changing. Im always hopping on the train, running all over portland. I ve to go wherever the work is. Trains with innovative Siemens Technology help keep cities moving, so neighborhoods and businesses can prosper. I can book 3 or 4 gigs on a good weekend. Im booked solid for weeks. It takes ingenuity to make it in the big city. How does the world look to you today . You could look at the environment, and i think its very dangerous. These days its just maddening at best. So ill punt. Theres just not as many opportunities. Thats the reality. I think its a very dangerous time in the global economy. If i got a hundred bucks for every time that i heard the markets around the world were dangerous yesterday, id be a rich man. Im talking about the discussions among big hedge Fund Managers i heard at the conference. These managers were almost uniformly concerned about the role of central bankers in propping up stocks or disporting the economy by creating artificial opportunities that will all one day be taken away, causing tremendous heartache and stress for investors. In other words, the feds set us up for failure with its easy money policies. However, im of a very different mind set. First i believe lower rates were and are a necessary evil, though not as necessary now because the true severity of the i just dont think these Money Managers know whats out there. They cant see the populist rebellion that if taken too far would actually be really dangerous for the global economy. And perhaps more important, they cant see how this is a market of individual stocks, not a market of markets as most imply. So theyre either hopelessly removed from the stock picking process or just dont care one bit about what companies are doing to improve their situations. Im in a different ballpark. Every day i interview ceos. I know some periodically admit their stocks are benefiting from the feds moves or lack thereof. But their own moves are often far more important, and i believe them. Yesterday, for example, after alpha concluded, i interviewed mike mahoney from Boston Scientific. What a breath of fresh air. I remember ten years ago when Boston Scientific paid a ridiculous 27 billion for guide ant, a heart device company, a bid so high they they almost destroyed themselves. I would say it was one of the worst acquisitions i can recall. Since then, it has strug theed back mightily under the leadership of mike mahoney, who has been at the helm for five years. Hes now developed products that are dazzling the rest of a very competitive industry. His business is on fire to the point where Boston Scientific has 10 organic growth. Not only that, but the company is beating its own projections, beating numbers it forecasted only a year ago. W why . Artificially low Interest Rates . Please, Monetary Policy has got nothing to do with it. Boston scientifics strength is about invention and ingenuity, and a competitive spirit coupled with leadership and sound financial management. But heres the issue. Boston scientific is merely a 31 billion company. Thats too small for most of the hedge Fund Managers i heard from yesterday. They have defaulted to the macro, so to speak becau. Some of these Fund Managers would have to own all of bsx to matter to them. Thats how huge these funds are relative to individual stocks. All the work that mahoney has done, all the innovation, me meaningless to them, but not to you. Not to home gamers. Not to the dying breed of stock pickers who would love to own a stock like Boston Scientific. When you hear how stocks are dangerously inflated, i want you to think of diligence and innovation. These arent manipulated by Central Banks. These arent supported by the European Central bank or the fed or any other government. These companies are supported by themselves, and frankly i dont care what they said at the panel. Boston scientific is trading at 23 because it deserves to be there based on what the company has done to save itself after that disastrous acquisition. That fact doesnt matter to these big dogs one whit, but it sure should matter to you. Stick with cramer. [click] man youre beautiful [click] im coming back to you [click] 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. Theres always a bull market somewhere. I promise ill find it just for you right here on mad money. Im jim cramer, and ill see you tomorrow. Trying to stay with curry. Catches. One dribble. Steps back, puts up a three. Wont go rebound tip taken by speights, final seconds. Its over its over cleveland is a city of champions once again i came back home to win a championship and energize northeast ohio. But in a place like cleveland, theres so much more work to do. 3300 acres of land sits vacant. Almost 2 of the population has left in the past three years. To revitalize cleveland, we need to work block by block. Straight up. And street by street. I wanted to invest my time and influence to create a movement that can maybe strengthen our community and transform neighborhoods. Im just like the underdog around here. So i recruited four local investors that share my passion