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tv   Mad Money  CNBC  December 10, 2013 11:00pm-12:01am EST

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>> my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money". welcome to cramerica. other people want to make friends. i just want to help you make money. my job is not just to entertain, but to coach and teach, so call me at 1-800-743-cnbc. in the stock market, just like in real life, bad leaders can be extremely worrisome. that's right. sometimes we get the wrong leadership.
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the wrong stocks shoot higher. >> boo! >> while at the same time other stocks are faltering, and we saw that with the dow slipping. now, you might wonder isn't all leadership good? leadership from a market's perspective, isn't that what we want, no matter what? no. doesn't work like that. can't we just be excited that any stocks step up as generals, trying to lead the market higher? who exactly were today's generals? first, we got remarkable leadership today from social media stocks. twitter, facebook, yelp, and linkedin, all charged right over the top. general twitter, four star, came public at $26 to great fanfare at the beginning of november, and opened at $45. then traded to the high 40s that day before settling down around where it opened. then you saw twitter drift down to $39 in a matter of days.
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at that price twitter got hit with a wave of short selling aided by a strong push by several talking heads and hedge fund advisors urging people to dump the stock. i saw some of the short selling negative including myself. one devastating video couldn't have been more wrong, but, boy, that got people just piling on, and that's when twitter stocks started changing direction and powered higher. aided in part today by a research piece from sanford bernstein suggesting that companies finding great favor among advertisers right now. that's right. advertisers like the twitter product, according to bernstein. next thing you know, twitter is taking out its high, riding on the backs of the short-selling hedge funds that had to break down because all the hot social media stocks have broken down since they're overvalued versus traditional companies, right? the pattern that short sellers expected, a rapid spike inspired by individual investors followed by a vicious swoon as these retail investors panicked. well, guess what, this didn't happen. i think the shorts were too clever by half, and they're paying the price for it over a
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powerful multi-day move. twitter's so strong it has become an umbrella for a host of stocks, including good ones that i have liked in the past like facebook, yelp, and linkedin. when we think about the pattern of social media ipos the disastrous facebook deal comes to mind. well, then we understand why the short sellers got so greedy. after your pain facebook was sent back into orbit by success in navigating migration from desk top to smart phone. our charitable trust rode this to almost double. then we took profits. why? bulls make money. bears make money. hogs, they get slaughtered. stock then drifted down. felt like a genius. now that twitter's success is driving facebook right back up. in part, because facebook is much cheaper than twitter. if you believe in twitter, you should be a huge buyer of facebook. that's the relative valuation game. if you buy in an environment
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where short sellers are betting that it builds a head of steam out of nowhere, that's lieutenant general facebook to 18. yelp, a huge amount of stock and the deal -- i spoke to the ceo last month at dream force. we visited the cloud conference hosted by, and i thought this was a good company with revenues that has a story that makes a ton of sense. but yelp is in a land grab mode and is trying to take over the world and become the dominant worldwide on-line yellow pages. that's the real analog here. right now it's not focused on turning a profit. that was not considered acceptable to those twitter-led resurgents of late. now yelp's stock has found its footing, and it's turning around, and it's got the mo. linkedin has had a similar trajectory. this company wants to be the on-line catalog of professionals, white collar facebook so to speak. in none other than the growth stock person's favorite, china. the market didn't like that prescription for growth.
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the stock got hammered mercilessly after reported at the end of october. now linkedin is climbing back. many regard it as the amazon model. focus on growth until profitability comes back into vogue. amazon up, of course. all these companies have another trait in common besides being social media stocks. they are heavily shorted because they're wildly thought to be overvalued. let me just say that i never shorted any stocks just simply because it was overvalued. valuation is like beauty, it is in the eye of the beholder. you have no way to say, ah, this stock is too expensive because there are hundreds of billions of dollars managed by investors, but they are thinking ultra long-term. you think they're momentum people. go ask the people that shorted amazon or netflix because they thought it was expensive. how did that do for you? all four of today's leaders might very well be going on the out years, meaning how they'll perform a few years hence. don't laugh at this kind of investing. facebook bounced from $18 to $50 because it managed to pull forward to the people in the out years.
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they were wrong, wrong, wrong. they'll shrug their shoulders, and they'll say just you wait. let's go back to the leadership question. what else worked today? ulta salon. isn't that the poor man's sephora? green mountain coffee, that was driving greenberg crazy. pvh up $3. this once is bouncy and comes back. that's causing a short. green mountain is a -- the noise about a single server soda maker is causing the stock to get jiggy, and that, too, is against the grain short squeeze. can i get one of those machines? pvh is a simple case of the market not respecting the bank act of the ceo. conxwrat las vegas on being a
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grandfather. the stock has been heading down all day yesterday, and then when the earnings came out, they plunged another five. we like what we heard from manny. he sat right here and told us a great story. the panickers came out. the short sellers pushed it down. that kept the stock down. manny conducted a conference call where he reiterated and the stock rallied ten points to the short sellers. yet another squeeze as the stock finished up $4.44. >> all pros don't like a rally on short squeezes. they like to see it rally, not on the pain of those that held losing bets against expensive merchandise. they also hate to see -- brian williams has never done that. they hate to see the long-term leaders get taken down too, and we saw two terrific leaders of this rally get crushed today, and it really hurt the psyche of the market. starbucks and gilead. starbucks fell after a rumor from researchers that sales are soft. i've heard nothing about that from my sources. gilead was because of an interview given to express scripts where the company asserted it was trying to
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promote a price war among makers of drugs for hepatitis c. i'm suspicious of this kind of story. a rebuttal by brokers firm oppenheimer saying the comments were taken out of context reversed the direction, but not enough to wipe out the decline. we do have periodic bouts when victims of extreme short selling rally. i wouldn't think that much of it. here's the bottom line. the bottom line is that the market rotation is now extended to the social media stocks, while its senior growth stocks are resting. remember, i am not going to call any top in social media. if we get a second day down for gilead and starbucks, call me a buyer of those two long-term leaders. terrific entry level brought on by innuendo, misinterpretation and profit taking. joe in new york. joe. >> caller: greg. >> no, it's jim. oh, let's go to greg in new york. even better than joe. greg.
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>> caller: i bought the stock symbol enta a few weeks ago after they partnered with a promising new hepatitis c drug. it's been pretty much parabolic. should i ring the register? >> this is what -- they're pinning these guys against gilead. i think there's room for both. you know what i can do, i like to ka-ching. let the rest run. i feel bad for joe. let's go circling back to joe. joe in new york. joe. >> caller: this is joe from rochester, new york. how are you doing tonight? >> couldn't be better. how about you? >> caller: i'm doing well. i know today the 3-d systems got upgraded today. hewlett packard is talking about getting into the 3-d printing business, is this bad?
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>> it could impact the stocks eventually, and they do have an interesting israeli 3-d business. however, these stocks, another firm recommended them at the close tonight. i wouldn't get in the way. i would not short these stocks. these stocks are going higher. we like stratuses. we don't like fossil jet, but they are out of control on the up side. they are the true bubble in this market. it's a changing of the generals. the markets in rotation. social media is leading the way. the darlings, don't worry, see your growth stocks, they'll be back. "mad money" will be back. >> coming up, weather resistant? g-iii apparel knows how to keep you warm. better than expected earnings vaulted the stock over 15% in the past week. will the nationwide wintery weather help its outerwear sales soar or will the customer be snowed in? don't miss cramer's exclusive. and, later, tapping in. it's been a wild ride from the 2012 highs to its fall from
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grace, culminating in this year's 150 plus point rally. tonight cramer checks out what could be ahead for apple. plus, smoke alarm? increased regulation is causing its fair share of anxiety around the tobacco industry, but upstarts like electronic cigarette maker njoy have lit a new spark of interest. will innovation reignite investment advice? cramer finds outs when he goes off the tape. all coming up on "mad money".
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>> when it comes to retail, it's a tale of two cities.
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the apparel names are all about the have's and have-not's. tonight we have a chance to check in with one of the have's. giii apparel. here's a little $1.38 billion apparel company. it's up nearly 100% for the year. a significant 500% return since the last time we spoke to the ceo way back in 2006. that's a six-fold increase in less than eight years. pretty phenomenal long-term track record. what do they do? the company licenses big brand names, including calvin klein and tommy hilfiger, and they sell things like outerwear, sportswear, dresses, women suits and accessories. they don't just license clothing. they also have licenses with all four major professional sports leagues in the country, including exclusive outer wear deal with the nfl. you might have worn it and not known it. they have proprietary brands like carl banks, eliza g along with retail stores mostly under the wilson leather banner. now, g-iii reported last week. the company knocked it out of the park.
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substantially stronger than expected sales rose 23% year over year. no wonder they vaulted with a 13% response. can they keep up the momentum? let's check in with the apparel ceo to learn about the company and its prospects. welcome back to "mad money". how are you? >> great. >> the first thing that went through my mind was, well, they got lucky apparel. they got lucky weather. then, you know, i remember, no, this is an old family business. we don't see many family businesses left on wall street. family businesses, i think, do things differently from other public companies. do you agree? >> absolutely. it's a family business founded by my dad in 1956, and operates very much like a family business today. we've acquired companies. they all integrate, and i don't want to be trite and have these cliches that everybody is expecting, but it is a family. there's -- we acquired a business eight, nine years ago
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owned by a man named sammy aarons. sammy did a wonderful job integrating it into the family and creating a leadership role for himself and building calvin klein into a mega brand for our company. >> now -- >> there are many people like that in the company. >> what i think is important is for people to understand is that morris goldberg is fully invested in giii. this is not something you're going to go and then go to gm after this. when you retire, then you'll be like a fit investor. you'll be with this company. >> it's my company. i have been there for 42 years. where am i going? i'm not qualified to do anything else. >> let's talk about what you are qualified to do. you own stores. you put out some great apparel. you have defied a lot of what people think about what's happening in retail. what is your secret? >> my secret is we're an aggressive company. we've targeted diversity as our mantra. we've diversified the company from a leather coat company, as you knew it many years ago, into one of the dominant apparel
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companies in the women's sector, servicing every retailer in america, and one of our brands are private label and approximately an entity that today has a half a billion dollars of retail sales direct to consumer. >> we all know pvh on the show, could you talk about the interaction? pvh bought warnaco. you are calvin klein too. does pvh not covet your calvin klein? >> i'm sure they covet it. manny chirico is a dear friend and an amazing business partner. we licensed many classifications from pvh. we succeed in every one of them. the relationship has never been better. we collaborate on the future, the future that affects both our companies, and i couldn't ask for a better relationship. >> now, one thing that i really find compelling is the notion that americans still crave
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brands. they love them. even in hard times, right? >> they love them if you do them right. not every brand works. the underlying secret is the management team that builds the brand, the design, the pricing that marries to the brand, so it's simply not the brand. it's the collaboration of the brand and the talent. >> take ivanko. you just brought that in. it's doing very, very well. that's a name, but you are creating this brand. right? >> the brand was created clearly by ivanka. >> okay. >> she's very clear and very popular to her demographic. the 25 to 50-year-old customer loves ivanka. she's immersed in her own brand. she's, again, the collaboration between ivanka and g-iii is amazing. she's in the trenches with us, designing the product, designing the showroom, hiring the talent, so it has to succeed.
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the passion that she has, the inertia that we have going in the apparel industry is going to make this a power brand for g-iii. >> last question, morris, how do things look for the holiday season versus last year, including the fact that wilson just had 10% comps? how is the season going for you? >> the season has gone incredibly well through october. traffic seems to be down for the early days of december. we're hopeful that it recovers. our business has been great. the sell-throughs, a lot of our product is off the retail floor. we don't see any risk to our business. pretty much in all our brands. you know, we've got about 20 different brands, and they're all safe from catastrophe. >> i like that. i think that's terrific. i'm sure you join me in wishing manny chirico good luck as a new grandfather. >> absolutely. >> all right. morris, thank you so much. >> thank you.
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>> that's chairman and ceo of g-iii apparel group. it's been an outstanding performer, and, by the way, all the stuff that you can read about is very accessible for you, and you can find their stuff. maybe you should be buying their stock. stay with cramer. >> coming up, the apple stores may be packed for holiday shopping, but will that help the i-device maker touch its former highs? later, it's close, but it's no cigar. njoy has sold more than three million electronic cigarettes from over 80,000 retailers nationwide. is this the future of investing in vice? all coming up on "mad money". every day we're working to be an even better company -
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[ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. after spending about a year lost in the wilderness, apple has started come back with a vengeance. the stock has rallied from $400 to $565 where it is right now. that's a 41% gain. that said, even after this remarkable rebound apple still up only 6% for the year. you know this is double -- year -- it's more than 20%. that's because it spent the first six months of 2013 dropping like a rock. the question now is can apple keep up the momentum? can the stock keep climbing higher? in other words, is it too late to buy apple, or does this rally have legs? tonight we're going off the charts with the help of not one, not two, but three technicians
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to figure out where apple could be headed. you need more than one technician when you got a real problematic situation. this is problematic. let's start with carolyn boroden, a top notch charter, and she also has to be one of my colleagues at real she told us the charts were saying apple is headed higher. at the time the stock was trading below $500. she nailed it. okay. what now? take a look at this daily chart of the action of apple. boroden says she thinks it could make it up to $792. that's our ultimate target. price target is based on the methodology that uses fibonacci numbers, a series of ratios developed by leonardo fibonacci. they reoccur over and over again in order to predict future stock wins. her record speaks for itself. boroden is following apple. this caught my eye. she says the stock needs to clear a major hurdle that's going to keep moving toward her price target sooner rather than later. that hurdle, okay, boroden sees a tough ceiling of resistance running from $575 to $582. that's why i mentioned this twice already.
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it's because of boroden's work. like all important price levels, that ceiling comes from relationships. $5 for apple represents a 61.8% swing from the 2012 high to the april 2013 low. rallies often peter out around that 61.8% fibonacci retracement reversal. i have checked this hundreds of times. it's true. there are a couple relationships many the same sort of resistance. i don't know if you saw, but it quickly pulled back 15 points the next day. what's the matter? what's the matter? it was the chart. if apple can clear the hurdle relatively quickly, boroden hopes the stock will move on to rally. ultimately heading for the long-term target. if it fails to clear the hurdle from 575 to 583, she thinks it could get hit with a correction. that pullback would be buyable, but it would postpone the next leg of the rally. i can see a trend, yeah. you know, not going to say severely, but obviously if it loses momentum, it's going to
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get hit. the fibonacci queen thinks it's a make or break level. since this is a super important stock for all of us, let's get a second opinion. bob lange, another great technician who is my colleague at, as well as being the founder and senior strategist at, and the trifecta new product at the street where he just nailed master card. i wish i had done that. he thinks that apple has a beautiful, beautiful chart. check out lange's version of apple. in his view the stock is resting at a spectacular 10% run on strong volume. it took place over just eight trading days. now, look at the moving average convergence/divergence indicator. that's the bottom of the chart. this is a tool that technicians use to track changes in momentum or trajectory before they happen. with apple it is in positive terms since the stock broke out in september. it just made a bullish crossover where the black line crosses above the red one. you can see that. black over the red.
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you see, this bullish mac-d crossover, this thing right here, that's about as close as can you get to a neon sign that says buy, buy, buy. the rsi at the top of the chart is in very positive territory. this is a momentum indicator. it's just the line that apple could be resuming its place as a market leader. once it took out this is when it really started taking off. that's the momentum indicator. apple is only up 6 periods of the we're. it could be time for the stock to play catchup for the rest of the market. he sees the big rush to buy this stock through the end of the year. it's happening right now. lange believes it's going to propel the stock above $600, relatively shortly. three weeks. however, the real bullish picture for lange is apple's weekly chart. take a look at this. it's a thing of beauty. first of all, can you see for the last 12 odd months apple has been making, yes, a w formation. very reliable. one of the super bullish patterns we've been following. since july, this stock has been
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roaring as it traces out the right side of the w. meanwhile, apple showing very strong momentum on the relative strength indicator. that's always going to be at the top of the rsi, and the stock recently tagged a new 52-week high. when you look at the very bottom of the chart, that's the williams percentage r oscillator. that tells you whether a stock is overbought or oversold. just like the stochastic oscillator we also use on off the charts, in this particular case, the stock is clearly over bought on a weekly chart. whoa. be careful. this is good news normally. it suggests the stock is coming up too far too fast. apple is not your normally overbought stock. lange says it's embedded. in fact, it suggests that apple has the momentum, and it needs -- it will continue to roar higher. last but not least, got to bring in a third because now we have one person who says it's not going to make it. another person says it's making it right now. let's bring in tim collins, another fabulous technician. check out this apple monthly chart. i know it looks like a weather
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pattern, and a bad weather pattern. it looks like today's weather pattern. collins thinks the monthly is what matters here. he says that if you are willing to be patient with the chart, that it could be in the end stages of forming an incredibly bullish pattern. this ultra long-term chart shows a bullish channel all the way back to 2005. for eight years the stock has stayed above the floor of support level. that's extraordinary. even during the financial meltdown in 2008 and early 2009. the apple crash late last year, still above this trend line. the fact is this support line has never been breached. the stock came close to this past summer and spring, but since then it's come bouncing back. it's still at the low end of the trading channel. just as important, collins points out that apple could be forming, yes, another great one. the cup and handle pattern. okay. you see it starting to develop. remember, this is where you got a cup shaped bomb followed by a handle, where the stock trades sideways and then after the handle you tend to get a terrific rally. collins thinks that if apple can form the handle between 550 and 600 that any break-out could
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signal an epic long-term move. $900 price target from collins. perhaps as soon as late 2015. you got to remember this multi-chart, and it pays out over years. 15% high over 24 months. i can't time the next leg of the rally. here's the bottom line. can the apple comeback continue? there's some conflict in the interpretation of charts. bob lange says it's over $600. by the end of the year. carolyn worries that an immediate to clear the hurdle of resistance around 575, or the stock could lose momentum. the monthly as interpreted by tim collins saying that apple has never stopped being a
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terrific long-term story with enormous upside if you are patient. as for the fundamentals, i think the rest is pretty simple. apple is a buy. why don't we go to gbolade in texas. >> caller: hey, jim. how are you doing? boo-yah. >> i'm liking that. >> caller: jim, i've been watching this stock, and they released their earnings like a month ago or so, and they've just been going down. when i was reading in between the lines here, i heard that one of the reasons why they missed their target, they spent a lot of money on investments, so now it's gone down maybe 30%. is it a good time to go in now as a long-term? >> this is the most commodity-oriented part of the cloud. i got enough problems with, which i like very much, which is proprietary. i don't think that rack space has anything proprietary that makes me want to own the stock. i don't want you to own this. now let's go to mishal in florida. >> caller: hey, jim. how are you? my question is about netflix. actually, it's two-fold. they're off balance sheet. they've never addressed it before. the second one is about their so-called original content. from what i understand, they
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don't actually own the content. they just own what is called the first window viewing, so how does that factor into their valuations and do you think the street is misunderstanding this? >> no, no. this is a company that exists on subscriber growth. it's a simple metric. how much does it cost to have spiral growth? those shows are basically advertisements for netflix. people subscribe on that. i think netflix is the solution for a lot of companies to buy, including facebook, even twitter. i got to tell you, as far as i'm concerned, netflix has great momentum, and that means that momentum buyers will continue to like it, and there is also a monumental short squeeze going on in netflix, too. we're always getting to the core of the issue. there are two sides -- well, actually, no, make that three sides of apple's story. too cheap for me not to take a bite. look at this. it looks like it's going to be snow showers here and clear here and then, i don't know, hot, hot, hot. stay with cramer. in a world that's changing faster than ever,
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it is time -- it is time for the lightning round. rapid fire calls. buy, buy, buy, sell, sell, sell. you hear this sound, and then the lightning round is over. are you ready skee-daddy? let's start with tim in michigan. tim. >> hey. how are you? tim from michigan. >> well, i'm real good. how are you, tim? >> caller: what is happening with chevron? >> oh, chevron is going higher. trading off of brent. i tell you, exxon had a better quarter. it's got the backing of warren buffett. i believe that's good. let's go to sam in my home state of new jersey. sam. >> caller: hey, how is it going? >> real good. how about you, sam? >> caller: not too bad. not too bad. >> what's on your mind? >> caller: i was wondering, what do you think about the animal health stock zoetis, the symbol zts.
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>> we had the manager on last week. i think that's a terrific story. >> buy, buy, buy. >> we got to get into this zoetis, though. this stock is terrific. mike in new jersey. mike, mike, mike. >> caller: hello, mr. cramer. how are you? >> real good. i wish it were hump day. what's up? >> caller: i just added two stocks to my portfolio. one of them being halliburton. the other one cheniere energy. >> i like the cheniere limited partnership now. i like the lng, but i like the limited partnership more. when it comes to your -- to halliburton, it's a very inexpensive stock, but i prefer schlumberger. >> how are you doing? a big boo-yah from chicago. actually, naperville, illinois. how are you? >> i thought the mike ditka thing, i almost cried. that guy is so fabulous. in real life he is really nice. what's up? >> caller: real quick, i want to say hi to miss laura and my aunt diane. where do you think the stock is going to be one year from today and why, jim?
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>> you've got horse sense. recommended after the close today by citi. i think the stock probably could go to six. i have been behind it now for a very nice gain, and i don't think it's over because i think they're winning a lot of contracts in europe. i need to go to mark in ohio. mark. >> hey, jim. boo-yah for me and my young investment team in cincinnati. >> i love that. the bengals d better hold up this weekend. it's really important to me. what's up? >> caller: hey, tell me about accenture. >> the last couple of quarters people have been not liking it, and there's been a series of downgrades. i actually think it's a good stock. i want to wait until it comes lower to see what everyone is so worried about. i didn't think the quarter was that bad. stephanie link really likes it. let's go to silas in new jersey. silas. >> caller: hey, jim. how are you? >> how about you, silas? >> caller: doing well. from your hometown, summit. i just had a quick question. what do you think about sun power? >> i'm not buying any cocktails for you unless you buy first solar. you'll be going to some other restaurant because that's the
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one that i like. i'm not done. you know what, i feel like taking more calls. let's about to jeff in ohio. jeff. >> caller: monmouth realty? >> we don't like those stocks. we don't like the real estate investment trusts. if we're going to be in a net lease, we're going to buy arcp. as interest rates go higher, this group goes down. that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.
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>> supposed somebody invented the device that could make tobacco obsolete? the product that could give smokers the nicotine kick except without the smoke or the repulsive smell and the tar and carbon monoxide? wouldn't it a public health miracle? i'm talking about electronic cigarettes. while they're definitely being embraced by smokers as the kinder, gentler alternative to real cigarettes, they've become incredibly controversial within the public health community. that's why tonight we're going offer the tape to get a better sense of what's happening in this rapidly expanding industry with the help of njoy, a privately held company that controls 40% of the market for
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e-cigarettes in the united states. in just the past few weeks this has become a major business. electronic -- just in a very short time. a couple years. i don't know if you have seen this. this is a billion dollar market in the united states. this is a $3 billion market worldwide. it's been growing at 100% clip for the last three years. lorillard, the maker of newports has been getting a huge boost from the e-cigarette business, and phillip morris gets into the game next year. 40 state attorney generals sent the fda a letter to the attorney general asking for them to be treated like tobacco products. the new york city council held a hearing on whether to ban them in bars, restaurants, and public spaces. while most states don't currently target e-cigarettes with specific taxes, minnesota slapped a 95% tax on them last year, which effectively makes electronic cigarettes more expensive than real ones. that can't be good policy, can it? it brings me back to njoy, the maker of njoy kings, the most electronic cigarettes with the
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most traditional cigarette look and feel. i think this industry could eventually be a perfect place to invest down the road if the plays start to become public. that will only be the case if the regulators don't strangle this business in the cradle. let's take a look with craig weiss, president and ceo of njoy, to learn about this rapidly growing industry in an off the tape segment. mr. weiss, welcome to "mad money". >> thanks for having me, jim. i appreciate it. >> mr. weiss, i have to admit that the reason why i even have been doing this segment is i was sitting next to my nephew who happens to be my head writer, cliff mason, at thanksgiving, and he pulls one of these out, and it doesn't smell and it doesn't bother anyone at the table. it's a big family gathering. then i read a piece, and i cannot believe that people that -- that governments around the world don't recognize this is the way to keep people off bad tobacco. not start smoking. why are they so obtuse? >> you know, it's an emerging category. fortunately for us, some of the
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countries, like in europe, are starting to see that this is -- electronic cigarettes are really part of the solution and not the problem. i'm confident with the science as it gets published more and more that america will come around as well, but the data is extraordinarily encouraging when you start to see so many smokers switching to electronic cigarettes. it's very encouraging. >> now, are there studies -- i know there was a terrific -- watch the university professor with a terrific quote in the "new york times" basically saying, look, this is -- we know tobacco is bad. we know the anti-smoking movement is so opposed to the smoking that it transcended the science. this is a scientific argument that this is what we should be using. why is that holding no sway with the fda? >> i think part of the issue is i think it is holding some sway with the fda, but i think part of the problem is for so long they've been fighting big tobacco, and justifiably so, and so there is a little bit of -- you know, they feel like they've
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been burned before by whether it was the filtered cigarette or other products that were held out to be better for you tobacco products, and so it's a little bit of maybe a disbelief or certainly an initial apprehension or skepticism that these products, especially ones like ours, that look so much like cigarettes, could, in fact, be, you know, part of the solution, and so there's that skepticism, and, you know, i think unfortunately a lot of them full into this -- in joe's piece, as he talks about it. well, if it looks like a duck and quacks like a duck, but that's not science. >> wouldn't these, if they got widespread, wipe out the tobacco business? who would want to smoke something that gives you cancer versus something we know has to cut back on the number of cancers caused by tobaccos? >> well, that's the really exciting thing about the data that's emerging now. the cdc recently had this data that showed that as electronic cigarettes gained in popularity, tobacco cigarettes are declining. that wasn't what was happening
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just a few years ago. now in the last, you know, one or two years as electronic cigarettes are becoming more and more popular, tobacco cigarettes are declining, and i think that's something that public health should be ecstatic about, and certainly at njoy, our publically stated mission is to obsolete cigarettes. we're quite thrilled about it. >> i would like to go long your company, njoy, and go short a not great tobacco company. when are you going to give us an opportunity to do that? >> well, obviously my sole motivation would be to get back on your show, so that's going to be the driving force in any decision that we make about going public. we're seriously considering all of our options, but we certainly love the fact that we're independent, whether we're private or public. we want to maintain our independence, and we're going to continue in our mission every single day to figure out how is it that we can make better and better products so that we can accomplish, you know, our mission, and live in a world where, you know, where my kids can say, you know, you light these things on fire and you put them in your mouth, that doesn't
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make any sense. that's what we're aiming towards. >> do you have enough wherewithal to fight a new york city ban? if that happens, can you stop that? >> well, we're working to do that now. we've testified in front of the new york city council, and we've done so in every state or city that either tries to tax electronic cigarettes or do -- or promote an indoor smoking ban. what's really interesting is the leading anti-smoking ngo in all of the u.k., ash, action on smoking and health, these are the paramount anti-tobacco ngo in all the u.k., they're opposed to indoor smoking bans for electronic cigarettes, and so in all of these cases we keep saying the same thing. where is the science? where is the data? the answer we keep getting is, well we don't have the science and we don't have the data. we always ask ourselves the same question. is it really responsible for government policy makers to be making regulations when they say we don't have all of the information, but we're going to regulate? i don't think that's the
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appropriate way for our government to behave. >> i totally agree. i hope that you actually do come public, and i think as a branding exercise we could also get people off the tobacco just listening to you. thank you so much. njoy. great to have you, sir. >> thanks, jim. >> for those of us who have family members who smoke, it's a pretty darn good choice. stay with "mad money".
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>> where would j.p. morgan be if the volcker rule had become a reality years ago? i would say probably $65, almost ten points higher than where it closed today. where would goldman sachs be? maybe as high as $200, $30 and change from where it went out. it's hard to get your head around how wrong the media has been on this volcker rule stuff? we think he is a manchurian candidate. frank sinatra, aka major ben marco, tries to pull all the wiring out of the candidate's head, and he fails. that version, like the movie, is fiction. sure the banks fought the volcker rule tooth and nail because it is unreliable, namely from firms borrowing a lot of money and then laying down stocks. of course, they're going to fight for a opportunity to make money. that's what they do. plus, the rule creates more compliance costs than anyone who works at one of these banks and
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they know it's a dead weight loss and a huge pain in the butt to deal with. especially when it's rigorous, and not just there to for show. a lot of opposition to volcker was political. we care about earnings and not politics. how did the volcker rule impact earnings? let's just say that not only will it not impact earnings beyond maybe a penny per share, as people in the structure set up to comply, and that's already been taken. the banks might see a major windfall to not necessarily their earnings, but to their price to earnings multiples on those earnings. i think this rule could send them up. maybe even dramatically as we saw from the nascent rally in the group that we got just today. why? because the single biggest valuation since the great recession is what happened to jp morgan with the london whale incident. it's a lack of insight incident that cost them about one-third of their value. investors decided this group itself is filled with unregulated gunslingers who aren't reigned in by anyone, because if the gun slingers make billions in proprietary trading, then the bonuses will be
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fabulous, and if they lose a ton of money, they still won't lose their jobs. they can just blame the direction of the market and the shareholders are the ones that get clobbered. win-win. now those who play the whale will get hunted like moby dick. the ahabs are the ceos, could even be prosecuted under a loose interpretation of the law if they engage in or allow whale-like behavior going forward. that's a huge and positive change for the group. i think we'll presume there is less rogue behavior, the investment banks will begin to value these stocks like their investment streams, which was the case with morgan stanley, which stock has rallied and become a volcker compliant bank and done so with gusto. it's the biggest rally of the regional bank, and the nonbank financials like master card, which soared after a 10 for 1 split. big buyback. follow financials where a lot of investors got their monies because of worries if if they own a center bank, that the
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volcker rule applies to, it might blow i was up with trading or an embedded hedge fund or the kind that's been bad. no one was ever going to be able to put a pe multiple on proprietary due to the double whammy of inconsistency of the earnings streams and the possibilities of whale-like chicanery. why so much on the volcker rule? why so many articles why this is -- banks always fight regulation. that's what they have to do. any regulation of any kind. that's in their dna. second, because the media simply doesn't focus on the boring earnings or the equally boring process of figuring out the p.e. multiple, what will pay for the series? that's what this he do on "mad money". they left us this franchise. for banks the earnings streams are indeadible post-legislation, and it's much easier to understand, all thanks to paul volker and his merry band of p.e. raising congress multiples. thanks for driving stocks up for once. thank you. why couldn't you have passed this legislation two years ago? who knows how high the bank index might have been? stay with cramer.
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>> will the budget deal move the market? you know what will move the market is earnings. we need to see a strong set of earnings. in the interim we're going to keep rotating, like we rotated today into the social media stocks, to the short-selling stocks, and then we'll rotate
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back to the senior growth stocks. that's why i urge you to do work on starbucks as gilead as they come down, because those are probably the next places that rally. i like to say there's always a bull market somewhere. i promise to try to find it just for you right here on "mad money". i'm jim cramer, and i will see you tomorrow. >> narrator: in this episode of "american greed"... a crime spree on the internet using stolen information... >> it's basically a supermarket of cyber crime. >> narrator: ...where mysterious thugs trade your financial life story. >> this is not a victimless crime. they may think it is, but i was the victim. >> narrator: billions of dollars are at stake. >> they followed the money all along. fraud migrates to opportunity. >> narrator: and an unlikely computer genius fights to control it all. >> this was spy versus spy. it was quite an ego boost.


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