Action. Markets closed up, the dow rising 2 points, the s p gaining 0. 38 . Stocks are going up or down not because of Revenue Growth or lack thereof. Thats the simplistic way the newspapers are explaining it. Theyre going up or down because of expectations with a capital e. Often the expectations are just too great going into the quarter, or the expectations are negative enough that poor expectations should be the title of some of these Conference Calls. Take caterpillar. It reported a hideous quarter because it was the worst of times in china, the worst of times in china. Not the worst, but certainly in america. On top of, that cats management lost its optimism and started it, well, an attitude of resignation. Next year will be better. Thats the attitude that often precedes disappointing seasons in every sport, as well as disappointing numbers in the sport we play in. This was not kathmandu. It was catnodo. So what happens . The stock looks horrible in the premarket that time this when lobotomized players play out. If you only look at where the stack went out today, you would never have guessed caterpillar reported a truly horrific quarter. The house of pain thats the power of a company lowering expectations to realistic levels that we all figure could be beaten after its stock had been laid to waste. See, caterpillar has quarter after quarter chosen to give us a rosecolored glasses scenario. But the market wasnt buying it. Which is why the stock is off badly in what could be a very big year for equities. Part of that weakness is the endless rahrah that cats management insisted on giving us until today. Agh when they finally got realistic, pessimistic, and the market lapped it up. Cat lowered the boom on itself. It also noticed that inventories were low. Low inventories means very few discounts, and that means firmer pricing in the future. At least cat shareholders arent expecting a bad 2013. This makes this is highest manufacturer in the world. At last a lowrisk play if the Global Economy actually gets better. If it doesnt . Hey, it could be fine anyway, which is why my charitable trust, is in the stock after a long period of abstention because of the mrs. Havisham problem. You know who else was able to move up on horrid numbers . Some of the Semiconductor Equipment companies. That is who. We have been fans of this show for a long time for novellus. Remember, that was bought by lam research . That poor little lamb that lost its way. Had to. It allowed semiconductors to produce ever smaller yet more powerful chips for smart phones. This combination known as lamb has been among the worst performers in the s p 500 [ booing ] the house of pain but both for the quarter and for the year as semiconductors have cut back radically on their spending. Who can blame them . Lots of chips going into personal computers and those customers are in horrendous shape to buy anything. Theyre probably doubling up on toilet paper at these companies. Desperate times demand Desperate Measures lam was down 10 before it reported. The Company Simply reiterated it could do no better than it was doing, but didnt slash estimates, the stock reported higher on a really bad day, about a 10 gain. I call that rotten expectations. Again, it had nothing to do with revenues. It had everything to do with how the stock was going to be doing going into the quarter. Expectations are what matters. Lets talk about the crushing weight of great expectations. Lets talk what happens when your company is known as a serial beat and racer, one that blows away the estimates. The company that leaves you screaming encore makes you want to throw flowers at the Conference Call stage, and then suddenly it just lays an astonishing egg. [ buzzer ] thats what happened with google. A relatively google had let people know it wasnt facebook, that mobile was made for google. Like weekends were made for michelob. Now i know that Many Companies would kill for that kind of growth [ gunshots ] that google has. We were listening to slay their weekend. Im not kidding. Either it meant releasing the earnings too early in the day. Thats what the knuckleheads did as an agent for google. But google missed on so many levels, especially in mobile, that it was just a gigantic disappointment, i mean just an extraordinary one. [ crying ] and its one who has kept discounting, including today. The stock down another 3 bucks. I know numbers spoke for themselves, but this was a total tale of two cities. There was the city that googles management lives in. Lets call that backpack city, which they kept doing throughout the conference. At the end of the Conference Call, their arm was supposed to hurt so much. They had to go to the chiropractor im sure. And then there is the city that the rest of us inhabit which is the are you kidding me . That was the are you kidding me city. What happened to too much ad inventory . Higher costs, including extraneous ones where we have no idea what they actually do. These two cities are so far apart from each other, sorry, google, it was the age of foolishness on your part, and the winter of despair for everyone who believed in the company. At least they have some new products coming to disguise the bad odor of that call. Then there is chipotle. An entirely different expectations problem. Chipotle had done much to make people feel that things were slowing down, that the analysts should be cautious going forward. The problem is they didnt listen. The problem is chipotle always had a halo that made it seem immune to the economy. Even management said its not deserving of the halo because people do cut back on spending at chipotle in tough times, like the sodas. But now that the halo has been ripped off by a second disappointing quarter, chipotle feels like another company that has good consistent earnings like panera. The Company Performed extremely well, beat the numbers, but at the same time did see a slowing in the quarter, which is different, some would say radically different from the ceo just a few weeks ago when he said europe would be up, and i quote, low double digits. Instead it was up just 3 . The stock shed 7 quick points. I doubt the selling is over. And then the curious case of melanox technologies. The hottest stock in the world because of a device that helps with big data collection. It raised numbers to double, maybe even more. A really good quarter last week, certainly better than the estimates. You know what . The stock, which had been as high as 120 and went into the quarter 104 got pummeled down to 75 bucks. Up 132 for the year. Still, i dont think there is a number that would have satisfied that audience. And it remains unsatisfied, which wisconsin is why the stock dropped another buck 1. This is not how companies are missing on the top line. Thats simplistic analysis. The expectations are simply too great for Many Companies to beat. The good news . Expectations have come down. The bad news . It will last only 30 through the earnings season. But plenty of other companies with earnings expectations too high and too hot to handle. So you can expect more selling. Lets go to todd in north carolina. Todd . Jim, great big booyah in winstonsalem. Wake forest. The information coming out csx and peabody seems to conflict. Jim, what is your take on the coal stocks . You must think that romney is going to have a 50state sweep if you think coal is going to be good. I got to tell you, romney i was joking on squawk on the street, just joking, that its mitt peabody rom anymore. Like mr. Peabody. So you need a romney win in order to make that portfolio work. Lets go to robert in florida, please. Robert . Caller hey, jim. How do you think atk will perform as a result of this upcoming election . I happen to think that atk which is a bullet make erwins either way. In the end, i still think there will be an army that needs to train for warfare, and dont forget, they got a huge billion contract. Weve been behind that stock for some time. And were sticking by it. I need to go to josh in wisconsin. Josh . Caller hey, josh, big booyah to ya. Whats going on . My question is about phillips international. They have missed two quarters in a row. Is now the time to get in . No. I dont want to touch this yet. I felt that quarter wasnt good enough to merit a bottom. I thought research director, comanager of action alerts plus, we think the stock can come down more. How about waiting until 85 . There is no hurry. There is no marlboro burning in your pocket. All right. Great expectations . Or do you have the bestseller called poor expectations . Or if you really want a stock to fly you ought to check out rotten expectations. They all explain what is happening so far this earnings period. Mad money will be right back with a real bedtime story. Stay with cramer. Coming up, full speed ahead . Not snow, not sleet, not even sand has stopped polaris industrys stock from its nonstop climb higher it is. Ready to kick into a higher gear . Cramer looks under its hood, with its ceo, just ahead. And later, sour cream . From chosen to troubled, shares of ship poet lay chipotle got grilled and another disappointing earnings report. But after nearly 45 melt from its highs, could it finally be time to feast on this battered burrito maker . Or is the fire in their kitchen just too dangerous . Cramer finds out in his exclusive with its cfo. Plus, sale in aisle 4 . The brands of b g foods probably have a home in your pantry. But after a recent pullback, it the right time to make room in your portfolio . Dont miss cramers exclusive with the ceo, all coming up on mad money. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com. Or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. We got a real mom and the family car to do an experiment. We put a week of her familys smelly stuff all in at once to prove that febreze car vent clips could eliminate the odor. Then we brought her family to see if it worked. Tell me what you smell. Something fresh. A beach. Take your blindfolds off. Oh look at all this garbage febreze car. Eliminates odors for continuous freshness, so you can breathe happy. Have you tried this yet . Save on febreze car and other Innovative Products with the october 28th p g brandsaver. Anyone have occasional constipation, diarrhea, gas, bloating . Yeah. One Phillips Colon Health probiotic cap each day helps defend against these digestive issues with three strains of good bacteria. Approved [ Phillips Lady ] live the regular life. Phillips. [ Phillips Lady ] live the regular life. Wooohooo. Hahaahahaha oh. There you go. Wooohooo. Hahaahahaha im gonna stand up to her no youre not. I know. You know ronny folks who save hundreds of dollars switching to geico sure are happy. How happy are they jimmy . Happier than a witch in a broom factory. Get happy. Get geico. Fifteen minutes could save you fifteen percent or more. I was skeptical at first. But after awhile even my girlfriend noticed a difference. [ male announcer ] rogaine is proven to help stop hair loss. And for 85 of guys, it regrew hair. Save up to 42 now at rogaine. Com. It regrew hair. New pink lemonade 5hour energy . 5hour energy supports the Avon Foundation for women Breast Cancer crusade. So i can get the energized feeling i need and support a great cause . Im sold. Pink lemonade 5hour energy . Yeah and a portion of every sale goes to the Avon Foundation for women Breast Cancer crusade. Im sold. New pink lemonade 5hour energy. Get the alert, energized feeling you need and support Breast Cancer research and access to care. Do not be fooled. Do not be fooled by all the hammering about the weakness of the american economy, the tapped out nature of all american consumers. If you want to get a real feel for the strength of the economy, and it is underlying in there, then few things are more important than discretionary spending, the stuff people buy not because they got, to but because they want to. And few companies are more discretionary than polaris industries, pii. Snowmobiles, motorcycles, especially offroad vehicles, including both traditional allterrain vehicles, as well aside by side vehicles that seat two people. Some of these products are sold to military and some are sold to businesses. But mostly forget hasbro and mattel, because polaris makes some of the coolest toys imaginable. I think its worth knowing that last thursday they reported an absolutely blowout quarter. Polaris delivered a 13 cent earnings beat off, Company Revenues came in higher than expected rising more than 20 yearoveryear. They raise guidance handily for the full year. Snowmobiles in particular up 21 . Onroad vehicles which are mainly motorcycles up 78 yearoveryear. And the way i see it, you dont sell that many snowmobiles and motorcycles unless the highend consumer is doing okay. Now polaris is building out its International Business and in the last quarter asiapacific and latin america posted solid double growth. The stock is giving a 32 return since they first recommended at the end of january, though they pulled back nicely today. So it could be giving us a solid entry point. Lets first talk with scott wine, who was very bullish the last time he was on. What a good way to play it. He is the ceo of polaris. Mr. Wine, welcome back to mad money. Jim, thanks for having me back on the show. I got to tell you, scott, youre a man of your word. You did blow the numbers away. You also talked about the Conference Call on november 6. You said the president ial debate, the president s, the actual election is going to greatly affect your company. We have this debate tonight. Fill me in on what the difference would be between the candidates. Well, quite simply, jim, our Company Relies on a strong economy. And weve been very fortunate the last three years to deliver very strong top and bottom line growth in what has been a fairly meager economy here in the United States. As we see the Global Economy start to slow down, i was in europe a couple of weeks ago, and their look at the u. S. To continue to be strong. If we see a failure of washington to deal correctly with the fiscal cliff, it could be difficult for polaris to continue our strong performance. All right. Let me go to the latter, because president ial. The president can come in. He may not be able to affect the fiscal cliff because he needs the congress to work together. Jim we deal with many regulatory bodies. We have great relationships whether its nhtsa on the motorcycle side on the consumer safety commission. And we work those relationships hard. We just need to make sure as theyre imposing regulations that they keep the balance between safety that we always put at the paramount for our consumers, but the Economic Impacts in the states where we operate in and the dealers where they sell. Is that a republican democrat issue . I think it can be. Typically you see republicans favoring slightly less regulations, democrats slightly more. And i think both sometimes have the right approach. And we like to see them working together to deliver the best results for our industry. Look, ive got to tell you. I have a feeling today, vf corp. Said weakness in europe versus what they said. Obviously a bunch of Industrial Companies say not the right thing. Why are people let me just put this. Why are people buying your expensive stuff . You know, jim, i think there is a couple of very simple answers for it. Innovation is probably the key. We spend about 4 of our revenues every year. We have an incredible pipeline of new products coming out. And i think this year we introduced, you know, 22 new vehicles that consumers really enjoy. And thats a good balance. Our engineer, almost every one of them ride the products. So when we put out something new, its just not what we think might work, its what we have proven, the combination between the Engine Performance and the chassis performance that gives the rider the confidence, whether its a Work Environment or the recreational environment. And its that confidence. And you talked about passion earlier. The passion for our products across our Consumer Base is really unabated throughout the year, even if we have seen economies in parts of the world slow down. What is the technology in the ranger 900, the side by side, and what is the technology in the 2013 pro rmk sled that makes it so that you say i got to get one of those . The pro rmk sled was just awarded the snow goer sled of the year for 2013. I had a chance to go out and ride it quite a bit last winter. And again, it performs on the top of a mountain as well as any sled, in fact, any sled that has ever been built. We have taken a lot of weight out. Interestingly, for that customer, having the horsepower to weight ratio is key. And the way that our engineers dial the chassis in to let that consumer and that rider do exactly what they want to do on the mountain is really the key. And really, the same for the ranger 900. Thats our tag line for the ranger product line is hardest working, smoothest riding. And we have taken that to a new level with the ranger 900. So for slightly under 13,000, you can get by far the best performing product in the industry. We give it more horsepower, but really improved what we call in vh, the noise vibration and handling. Its just much, much better for that product than anything else in the industry. Do people buy these on credit or do they actually have the cash to be able to buy a 13,000 vehicle . You know, our Research Says about twothirds of the products are bought on credit. You know we have relationships with sheffield and General Electric to help them finance it if they choose. To they also go to the local credit unions. And many have tradeins as well. But there are about a third that do come in with cash. And, you know, weve seen credit come