Transcripts For CNBC Mad Money 20161101 : comparemela.com

CNBC Mad Money November 1, 2016

Points. S p losing ppt 68 . Nasdaq tumbling ppt. 69 . This is the shacka can movement. You have to tell me you like. There has nothing with a lot of stocks today. I counted seven reasons why stocks were right to go down and no reason why they should balance because nothing good happened. Let me give you my proprietary turn upside down. Let me tell what you spooked the market so badly. First, the election. The market loves certainty and it hates uncertainty. So you can have the most antibusiness candidate in history running for president as long as we know what degree of certain that i person was going to win. Or we can figure out what to do. Typically theres a thesis that can work for anyone. Like Hillary Clinton like post democrats she wants to put people to work. There are a lot of stocks with that scenario. Or maybe you find Common Ground where there isnt something similar in question like defense. Maybe if we were confident Hillary Clinton would win based on poll be there would be ways to make peace with it and make money. But now the polls have tightened. This close to election day with two candidates with such different agendas, it is harder to gain. It is easier to sell and circle back next week when we find out who wins. The tighter the poll is, the more sense it makes to sell. Who wants to deal with that kind of uncertainty. Donald trump prides himself on being unpredictable. Thats what he says. Doesnt mean he is erratic but does mean he can be awfully hard to get a bead on. With these new Clinton Emails we had gone from a situation with a done deal with a frontrunner gainable to a tossup situation where one candidate doesnt want to be game. With new emails we have an overhanging issue that wont be resolved until after the election. If hillary wins can i easily see trump arg not wanting to succeed. Arguing that he would have won if she was indicted. This is saying we well get it both before and after election day no matter who wins. Number two tell me something bad list. Oil keeps going lower. And it is now down five straight odd dollars. We havent lost that linkage. So has the market. We now know that saudi arabia claims of opec deal to support price says nothing but poppy dock. But when it is closer to 48 i think crude will run higher all over again because traders are in control and they do whatever they most fear. Tell me something bad number three, apple. Apple has come down for five Straight Days after a good quarter the Company Reported last week. When this stock goes down it is subject to all sorts of negative stories and rumors. I heard a whopper today. Demand for the new mac book isnt strong. Why do i find that hard to believe . I was all over the place this weekend trying to buy one for my wife because it is her birthday today. She wont watch the show so she wont know the difference. You couldnt get them. None available. I couldnt get one. You cant get one. But no demand . Fine, whatever. Fact is, decline in this large cap dal lags stock owner is a you will over the entire nasdaq. Its been down for a week. For now, if you and apple, i feel your pain. The fourth wound, were back to retail hell. One of the best retailers outbrands owner of pink which does well, bath and body works and victoria secret. I dont know what happened but it is not doing that well. Its stock got crushed. Two troubling elements of this decline. First, while numbers were lower than anticipated, especially victoria secret, they werent so bad that you have a reaction, second last week matthew boss of jpmorgan one of the best retail analyst in the business told us that l brands would have a shortfall if reported. He laid out the story exactly as it happened. So in a way, there shouldnt have been a surprise when the top analyst tells you what is going to happen, you should be ready for it. Thats a bad sign for future retail reports. It says that bad news is not in the stocks. Tell me something bad number five. Tweet from senator Bernie Sanders questioning drug prices. Why is insulin gone up 700 in 20 years sanders tweeted. Simple, drug industry greed. Ouch. Never mind there is a price war on insulin. Right now. One that drove insulin kingpin over the stock from 41 to 35 a heart beat last thursday. Tough conference call. This is exactly what most Health Care Investors fear. A series of actions that roll back price increases which have been mothers mixing of profits in the farm industry. The Earnings Period is the decline of fall in drug pricing. We see it all, not just dry, but device, whoel sailing, see it from 3m, eli lilly, and pfizer getting hammered mercilessly because of a competition. Competition is all over the place. I thought this was supposed to be monopolies, whats the deal . Holy cow, how did this get so anemic. Numbers sharply worse than expect, stocks got just slaughtered. Many investors have been gravitating towards these cyclic els, given they seem safer than health care stocks. Thats dubious distinction. They seem untouchable here. Looking for down grades. Finally unlucky 7 bad boy, the inability of stocks to bounce even for day answers day answers days and days of going down. Yesterday on halftime with Uber Cramer Scott and we were talking about how Merrill Lynch downgraded nike and talking about how obvious it was given the fact the stock has been down mercilessly since reporting a straight line. I said it didnt matter any more. Thats become the new normal. Just because stocks were down doesnt mean they will continue to go down. Gross stocks just keep going down without much after bounce al aught pl witness home depot. Witness under armour. Their stocks are unindated. Even with a ree re leave to break out of the house of pain has become a constant for the last month and has people really spooked including yours truly. Here is bottom line. Remember this is one day. We have been told a lot of good things of late. Takeovers, upgrades, excellent job numbers. But today, today we got told something bad and nothing else. This is exactly the kind of day that you get when rufus and shacka khan dont get their way. Ed in massachusetts, ed . Caller hey, jim, booyah to ya. Ive been trying to get a hold of you for years. Ive been around. Ive been around. Caller i have a brandnew stock. Ipo on friday, called a cush net holdings, also known as titlist. Golf on the stock ex change, golf, as in golf balls. Right. Caller im wondering if you have any golf in your portfolio and what do you think of that stock . I like to diversify than just golf. If golf is really coming back, dicks has some golf in it and dicks is Sports Authority collapse benefit. Very nice people there. I met them. Terrific people. But i do like Dicks Sporting Goods better. To steven in pennsylvania. Steven . Caller hey, mr. Cramer. How are you . Caller good. With tesla making cars driverless in the future and with microsoft in the studio and new surface book as well as growing revenue stream in the data revenue service, what do you think of n individunvidia g . I like nvidia. I would buy some before and after. Lets not go crazy. The stock immediately plunged 5 . Then went up 5 . So be careful and listen to conference calls. A lot of erratic trading but i think nvidia is good. By some before and after. To my home state, george . Hey, booyah, buddy. Love the show and love your absolute political neutrality as it pertains it making money. Thank you. Thats what it is about. Im from montgomery county. Im from the coal region. How do you like that . In wyoming, okay. Yeah. I spent time at temple. There you go. My parent went to temple. Whats happening . Caller i got a question. Here it is. Ive been a valued player for some time. And some of the best dividend payers have been the reads of course. Of course. Caller i do not like to sell because im generally a buy and hold guy. I like that. Caller but im big in realty trust symbol o. And with the ongoing fed speak regarding rate increase, im wondering if the loss finally baked into the stock price or are we going to see further potential losses . You got 4. 25 yield. Ven toss to me is the bell weather. And ven toss has not stopped going down which tells me, i think we got to be very, very careful because if that goes down i dont think letter o is done going down either. Because you know, i think so much of cavaro. So they have to have a couple points down before we call it quits on that one. Anyway, days like today will knock your pride aside. But remember what chaka khan said and remember rufus did most of the heavy lifting here. You have to do something good and thats not what we heard today. Mad money might surprise you tonight. But one of the oldest production firms is exploring. Im Digging Deeper into the latest discovery in the oil pack. See if you can push the stock high earn young brands opening first kfc in china. Spin off of its entire chinese division. Im talking with yum brands to find out what is next for the company. And apple stock dropped this week. Is it pineapple picking season . Or has the stock fallen too far from the tree . Im going off the charts to find out. Stick with cramer. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer. Send email to jim cramer on th nbc. Com or give us a call at 1800743cnbc. Miss something . Go to madmoney. Cnbc. Com. 18007. Miss something . Go to madmoney. Cnbc. Com. The price of oil may be pulling back right now. Just realizing the opec production freeze the saudised to us about probably wont happen. But there are still presentee of terrific opportunities in the oil patch. For example, oil and Gas Companies making acquisitions in lowcost areas are seeing stocks higher in recent months and viewers know im a big fan of this theme. But what if there is a Company Getting its hand on more oil the oldfashioned way. Not by making acquisitions but by discovering new reports on land that it already ownes. Thats what seems to be happening with one of americas oldest exploration and production firms, apache. What about a New Discovery, alpine high in reefs county texas, alpine high, thats the name. Part of the Delaware Basin ive talked about. The stock jumped 14 over the next two days climbing to 59. Since then there hasnt been that Much Movement and running up to mid 60s but it is back now at 59. I that i if it goes below these prices, you are getting an incredible buying opportunity because when investors start to fully appreciate this new alpine high discovery, i think you can propel apache stock much higher. Why am i excited about this new perm yum play . There is a lot to like. But it first, let me give you background on apache then drill down. For those of you not familiar with the country, apache is one of the larger Exploration Production companies always e aep ps. Smaller in egypt, used to be bigger. Gulf of mexico. As well as shale in texas, Permian Basin and texas. The super cost Delaware Basin with one of the hottest Oil Producing areas in the united states. The great boom apache was a real and other Oil Exploration companies were finding shale all over america. There is a lot of shale oil patches everywhere. Apache had the wrong focus. In about a dozen states. But apache wasnt playing. They were fast with growth Plate International and used cash from solid American Assets to finance what i regard as risky ovseas acquisitions when they are are in the second half of 2014 and clobber along with it but unlike so many of its peers, apache stock had been doing nothing over previous years. So longer performance versus the rest of the industry. Steve fairis stepped down in 2014. Man named John Cristman was the chief officer as well as more importantly the overseer of the expansion in west texas. The location of the Permian Basin and crispin is man with a plan. Since taking over the apache Business Model these days they focus on creating organic growth that means growth from within. The company uses catch to drill in north america particularly the Permian Basin which is how you end up with big New Discovery like the one they announce in Early September. They now hold 1. 75 million acres and Third Largest producer in the region. The transformation is very helpful for apache. In the Second Quarter the company produced 165,000 barrels of Oil Equivalent per day down from 172,000 barrels a day in 2014. However the companys generating that production with much lower costs because the permian is such a cheap place to drill. With the price of crude around 50 bucks the company says the region can have a hundred percent rate of return. Thats extremely profitable. So how about this big New Discovery in the alpine high. On september 7, apache used the barclays ceo Energy Power Conference to announce this fine. After two years of work, the company confirmed that it is sitting on a vast quantity of oil in the Delaware Basin region. Apache spent the last 18 months leasing 307,000 continuous acres in this region which covers the vast majority of the alpine high plate. Now the alpine high actually represents 4 to 5,000 feet of Staff Resources and across five distinct form nations including some we have from time to time that are very good. Pennsylvania, havent mentioned that one before. Barnett, wood ford shales. Pachy thinks it is setting on 75 trillion feet of natural gas. This is more after natural gas place than oil. Then identified from 2 it,000 to 3,000 potential drilling locationes. Thats right, 2,000 to 3,000, not hundred. The real impressive thing is how they did it. In 2015 when Energy Prices were in a freefall, apache started accumulating the alpine with averaging about 1300 an acheer. Probably go for like ten times that, now, no, probably about 20 times that now. This part of the permian was once very complicated area to extract gas and was written off by the industry for years. As they explain, apache took the time to study the region. The the rest of the industry thought the area had high clay content and made it harder to drill. When apache did homework they realized it had low clay content. Turns out it is an easy place to drill because it is right smack in the middle of the oil and wet gas window. Thats called the sweet spot. It is incredibly profitable. Now crispin spit out these numbers at the conference and they are staggering. Get this, anywhere from 10 cents to 40 cents per million british thermal units which means they are coining money because gas is around 3 bucks now. I will quote him, he said, get gas for virtually free. And in the alpine high only worth 4 to 20 million. Thats right, from 4 to 20 million. Even at the lowest end of the spectrum, val id at 4 million could be worth 8 billion and even with oil and gas stay wrg it is. Apache is a 22 billion company. We havent talked about it if prices go higher. Especially around the gulf of mexico. They are set to make a killing with oil in the 40s. Now i goot caveat. Apache reports thursday morning. For the opening. I dont expect them to see much benefit in this quarter. After all, they just started drilling. So the stock sells off after apache sport. Thats why i recommend buying more now and waiting for the quarter so let me give you the bottom line. From the downturn stronger they use it to opportunistically use it. They are getting killed now. Thats what apache did. They bought in an area known as alpine high. I bet their work will pay off for years. They are a longterm story. Dont expect to rocket higher if the Company Reports on thursday. But any weakness coming from those who are disappointed there is an instant success here. That could be your best clans to get in for the long haul. Much more mad money ahead. If you live taco bell, kfc or pizza hut like i do, dont move. Im going to look at yum brand to see if you can take off your portfolio after those spinning off today. With a nasty drop, how should you play the tech type . The answer could be hiding in the charts. And our home people on a Shaky Foundation . Are Companies Like whirl pool and is her win williams tanking . Stick with cramer. This morning the yum brands of parent of taco bell, kfc, chung china holdings, under the ticker of yumc, add the c, ive been a big fan ever since yum announced the win last year. They are on the rising middle class of the peoples republic. And yum brands is more of a stud steadiedy. If youre the old yum, you have a share in the east company. Now that that split is happening i can get a better sense of what is happening here. The ceo found out what is next for his company. And mr. Cramer, welcome back it mad money. Good to see you. Thank you for having me. This is a stunning success. The buying today in yum china took pli breath way. A huge amount and people went nuts for it. This is the single best way now to play the explosion middle class in china. Absolutely agree. It is what we said. We wanted to create shareholder value by creating two powerful independent growth companies. And what market is reacting to is the huge Growth Opportunity in china and the story for us is where do you grow . Faster than people think. But also obviously return a lot of capital to our shareholders and become a capital like business. Lets talk about that. There are a lot of doubters. Sure. Yeah. They say wait second. Issues about food safety. Issues about w

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