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tv   Mad Money  CNBC  October 11, 2021 6:00pm-7:00pm EDT

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tells you all you need to go, t.a.n. in the energy space. >> guy >> karen trying to curry favor with the aforementioned jamie dimon. [ laughter ] i like what she did there. alcoa, mel. >>"m mey> adon" with jim cramer starts right now "mad money" starring jim cramer starts right now 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. 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'm just trying to save you money. my job isn't just to entertain but to educate and put it in context. call me at 1-800-743-cnbc. or tweet me @jimcramer after a rough day, dow only losing 250 points.
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s&p sinking 0.69%. nasdaq declining .64%. you know what everybody's talking about? they're talking about stagflation. yep, stagflation you hear it everywhere and the trump people went into overdrive this weekend, like it's all the '70s again. sounds pretty bad, doesn't it? baby boomers like me fear the '70s in the same way our parents feared the great depression. stagflation is as ominous as it gets called me a cockeyed optimist but i don't buy stagflation. we've had inflation for a bit, i'm not going to sweep that under the rug. we just got a negative read from kraft heinz.
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the ceo of kraft heinz explained he's raising prices all over the world. why? because of the inputs he has corn, sugar, palm oil, soybeans, coffee, they're all rising costs, and the industry has to pass the price increases on to you, or as the headline says, people have to get used to higher food prices that's bad what about the stagnation side of the equation? that didn't seem to be a problem until friday when we got a weak jobs number. the stagflation story seems so obvious that we had two pieces goldman sachs says stagflation is bad news for everything but health care and energy stocks, that's a flimsy read to hang your hat on plus it doesn't help that oil prices keep marching relentlessly higher. the white house wants the oil
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companies to get busy producing but they're making too much money by being disciplined and letting the prices run biden can't call pioneer and say, put more oil into the gas tank it's an inflationary nightmare that has to add badly, right not so fast. my experience, when everything thinks something's going wrong, going bad, you have to be careful not to buy into it i don't know of a soul who thinks we can get out of this moment without much, much lower stock prices permit me to take the other side of the trade see, there is a big, big difference between now and the stagflation of the '70s. i'm talking about the pandemic remember covid we want to pretend it's over the united states is way behind europe when it comes to immunization and we have plenty of groups pushing for the right to stay unvaccinated
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what a hill to die on. kro crucially, many of our problems are indeed covid-related we still have tons of absentee workers. there aren't enough people to get the job done, because people are scared to death of getting sick they don't want to get long covid instead of short flu covid or, worse, die i think there's a huge disconnect between how wall street sees the pandemic and how the rest of the country sees it. when 700,000 people die before their time, when we're getting contrary messages from the health care apparatus in this country, millions of people want to crawl underground and hide, they don't want to work. the federal government went all in on scaring the heck out of us so that a lot of people said, uh-uh, i'm not driving that school bus, i'm not going back to that. older people are leaving the workforce. why would you take the risk, if you don't have to work
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younger people feel less pressure to find jobs because there's a moratorium on student loan repayments. but businesses are desperate to hire people, they have a voracious demand for labor that's nothing like the stagflation of '70s. i argue that our current bout of stagflation will be short-lasting. sooner or later, let's stop pretending heinz is right, we'll all have to pay more for pretty much everything until harvests are bigger and we have the supply chain nightmare worked out i know people complain there are no rollbacks in pricing. but you know, that's not true. in the past, the biggest retailers, the ones with scale like walmart and costco, can come in underneath their competitors, especially the brand guys and the raw costs will eventually come down, and you'll be switching to their product. it won't come back to where it was but it doesn't have to
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we can get used to paying more for some things. eventually all these stories about supply chains will go away trucking companies will realize they need to pay more. listen, it's a trucking job, it's a big job, pay them more. the longshoremen say they can't work 24/7. let's go back to the stock market the last time we had real stagflation we didn't have automatic investments in stocks like we do now i just contributed money to a stock mutual fund for my retirement account it's automated it's a very different environment. sure, the professionals analyze everything through the binary prism of buying and selling. but the home gamblers, the young ones, they're not thinking, woo, stagflation, better head for the hills. instead in this environment they're thinking, it's easy to get a job, i can buy a house, cars are harder to find, but only because they're not making
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a lot of them, not because i can't afford one why is it harder the chip storage like with so many other products, i think the chip shortage will ultimately be conquered by this incredible thing called capitalism. somebody will put up factories and solve the problem. it will take time, possibly a long time. in the end, time is what this moment is all about. we need time to beat covid, time to plant more acreage, time to get more chemical plants online, time to build semiconductor factories, time for people to realize they're running out of money and need to get back to work the people whose money they run, they do not share that pessimism. they know that investing in stocks has been sensational. while we wait for the world to go back to normal, don't wait for the stagflationistas scare you away from the market i think it's bogus they get the stock market lower but that's an opportunity. we don't really have a stagnant economy. to the extent it's slowing, i'm betting that will be pretty
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temporary. as for inflation, it's real. but we just need to buckle up and stop trading off every little tick of oil or every dime maybe you have to drive out of your way to get to a costco. maybe you have to return to the workforce once we beat covid it's not the end of the world, people do not panic and you'll be surprised how quickly things get better right when most money managers think all is lost brian in of new jersey >> caller: hey, jim. it bounced back pretty quick to its pre-covid levels, but we've been trading between 20 and 24 with the exception of a brief stock in june. i want to know where you see this stock heading >> continue to be a huge believer in todd penagore, he's doing an amazing job
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wendy's got hit by this mean thing, took it all the way up, got bad money in it, it's come back down. i like these guys. i say buy, buy, buy. julie in missouri. julie. >> caller: hi, jim i've been a long time watcher of "mad money." >> oh, thank you >> caller: i just recently enrolled your investing club so i appreciate all the education that you send our way. >> thank you, that's the goal. educate. >> caller: i took a position in airbnb about a year ago during the covid lockdown, thinking that would be a good buy for covid times. >> sure. >> caller: i haven't been happy with the results what's your opinion? >> i think you've got to let this one play out. i think brian chesky is one smart guy. airbnb is a category they innovated, they've made, it's gotten better and better with each iteration let's hold on to airbnb. i think they're going to accomplish great things. and thank you for the kind words
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about the investment club. our second brian, in california. brian. >> caller: hey, jim, thanks for taking my call >> of course >> caller: hey, i've been watching fedex for the better part of a year now it has come way down it's bouncing around its 52-week low, pd ratio is about 12 1/2. and christmas is coming. so i wanted to get your thoughts on what you thought this trade should be. >> i'm going to be candid. i happen to like them very much, but that last conference call was suboptimal they took -- they really, frankly, made me feel like you can't own this until you see the next quarter the trust is putting up a lot because of the investing club. check with your boltons, you'll see what i mean. listen, i don't want you to panic.
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this stagflation nieces, they want you to panic. it may surprise you how quickly things will turn around with technology and time. tonight, emerson technology announced it's going to merge. i'm breaking down the details with the ceo of a great american company. then we're heading to the farm a look at jfrog, which sounds like a character out of one of these reality shows and data dog which sounds like something on saturday morning and plug power got caught up in the meme mania, a lot of people lost money. now the stork is back to earth i'm talking to the ceo so stay with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter have a question? tweet cramer, #madtweets send jim an e-mail to
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we learned that emerson electric, the big, diversified industrial conglomerate and long favorite to buy is merging two of its industrial software businesses with a little company called aspen technology, an asset optimization software, to create a new company that will dominate the whole space in addition emerson is kicking in $6 billion in cash in exchange for a stake in the combined entity which can now go and buy other companies. this could be a smart way for emerson to unlock value. they don't get enough credit for
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its software exposure. earlier today we checked in with the new ceo of emerson, lal karsanbhai he is the president and ceo of emerson electric after many years of david farr who we had on the show before this. i wanted to learn about not just the deal but his vision for the company. take a look. you announced an incredibly exciting transaction today that i think is going to accelerate growth in all areas that our people want. why don't you tell us what you're doing >> thanks, jim, great to be here, thank you very much. what a great opportunity for emerson shareholders and aspen tech shareholders to really transform and scale what is an high growth industrial software space. over a $60 billion opportunity, high growth, and with lots of opportunity to do more m&a and to grow organically as well. so we're very excited about that proposition. synergies on both sides of the
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table. and a very important day for us. >> it seemed complex to me, but it really is not you're giving some money, you've got this unbelievable partner that's been growing fantastically, and then you have this new vehicle >> it is phenomenal, you said it right, jim $6 billion in cash, $2.5 trillion contributed assets. emerson shareholders get to take advantage of the ownership structure, 55% obviously there's a control premium in there they take advantage of the synergies at aspen tech, 55% of those, and 100% synergy created at emerson, that's $110 million of ebitda as aspen, $45 million in emerson then the public currency vehicle to do more softer deals at that multiple, jim, for us is very, very exciting. >> sometimes you hear these companies, i like to think i know a lot of companies, the ceo of dallas, how about these guys,
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he said they help optimize manufacturing process, saved $700 million what kind of company can save $700 million for another company? >> absolutely. this is essentially end to end software you start with the design and engineering into the production and operations element into the asset optimization piece that's an incredible amount of value creation you design in a very optimal way. you optimize as you're running the place. it's a tremendous amount of value they create and into the energy future as well. >> so let's be devil's advocate. i happento love emerson, i've loved emerson for a long time. >> you and i both. >> you and i both, and mr. farr. i cannot believe what a gem. but are you going to break it up >> that's a great question look, the name of the game is value creation >> yes, indeed >> for us as a management team and board, what's important is thinking about that over time. and we have a unique
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opportunity. it's culture it's the portfolio and it's the phenomenal execution. >> okay. >> david left me a phenomenal company. but now it's an opportunity to take it forward and to think about how we can elevate the underlying growth of the company and the portfolio is a great way to do that >> i cannot resist, because we're focused on hydrogen. you have a deal, a hydrogen company which tells me hydrogen. you don't do anything if it's not commercial >> correct >> tell me if i hydrogen in our life will be commercial. >> absolutely. the value chain will be the challenge. it's very simple to do it in production but how do we get it to where it actually meets an energy need? there's a whole infrastructure that needs to be built for that to exist we have the technology to do it. but the investment dollars, whether they come from the public market or the private space, we'll wait and see. but we're ready, jim, we're poised >> i see the hydrogen coming, if you hadn't done this deal with
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aspen, i wouldn't suggest it hydrogen companies are exploding, everybody is excited. go to your website, there are pieces of emerson i want, okay i want that piece and i want to have it associated with another company and a vehicle. and therefore i've got the unlocking value without the break ju breakup of the company, which i don't want >> there's a lot of potential there. we've just got the value of the assets now going into the aspen tech multiple which is essentially double hours, that's a huge value unlocked to begin with within the automation portfolio and the commercial residential portfolio, there are tremendous renewable technologies that will be very meaningful going forth, jim. >> you could be looking at things for residential >> absolutely. absolutely we have an incredible climate business that is essential for carrier, for trane, for many others in delivering a greener planet >> i can't resist.
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business is pretty good? >> things are better we reaffirmed guidance today, you saw that, jim. we feel the team worked hard this quarter the environment is challenging, but we're working through it >> easy to get workers, impossible, they're missing? what's going on? >> yes, yes, and yes, jim. >> you're in st. louis, you're grounded i'm in new york, i don't know anything >> the middle of the country, high turnover. so we look at wage rate inflation. we're looking at automation, more automation in the plants. and absenteeism. people are tired, jim. across the entire -- you talked about ships the other day and truckers people are tired >> you and i aren't tired. >> certainly not tired >> this is a factions deal, sir. lal karsanbhai, emerson electric, a company i've revered for 40 years thank you very much, sir, good to meet you.
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coming up, a frog and a dog walk into a bar. the punch line some good old fashioned stock research, next don't like surprises? [ watch vibrates ] proactive notifications from fidelity keep you tuned in all day long. so when something happens that could affect your portfolio, you can act quickly. that's decision tech, only from fidelity.
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we got this call from jay in tennessee, about a fast growing software company called jfrog. i promised to circle back. for those who don't remember, it's an enterprise software, not something you or i would use, that became public as part of a huge wave of deals 13 months ago. at the time i told you i liked the business but the stock was way, way too expensive given that it was trading 40 times sales. just an insane valuation jfrog closed under 65 on its first day of trading and that was too rich for me. the stock shot up in late october of last year and quickly
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made back those gains. now a little more than a year later it's been trading at $32 and change because this is the most interactive show on television, tonight we're going to check back in on jfrog and throw in another animal named software stock. this one is going to be data dog. it's been a huge winner since it became public two years ago. two for the price of one the frog versus the dog. sounds like something out of aesop's fables one group of people handles development, and another handles operations, making sure the trains run on time it's much more efficient to have these groups collaborate, which is what jfrog is all about.
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again, jfrog has always been a good company when it became public, the stock shot into the stratosphere i couldn't justify buying it, even for speculation there are very few companies that deserve to trade at 40 times sales. again, we like times earnings. times sales is dicey since the ipo jfrog's results have been consistently pretty good i wouldn't call them great more importantly, they've gotten less and less impressive with each passing quarter in may they reported a top line beat but their forecast is unchanged and their guidance for the next quarter is in line, nothing to write home about there. the stock lost 15% of its value in a single session although it made up some of those losses within weeks fast forward to late june. jfrog tells us they're acquiring
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a little company but they preannounced results, on top of that they said the deal would shave 9 to $10 million off earnings stock fell from 50 to 45 jfrog released full second quarter results and while the numbers came in at high end of management's forecast, the guidance was disappointing they started predicting a four-year earnings loss. maybe this shouldn't have been a surprise given the update in june they told you they were going to take a hit and i guess the analysts didn't listen because these numbers caught them with their pants down i think they thought they were just trying to low baltimore darn thing j frog raised their sales forecast yet nobody seemed to care within weeks it was stuck in the low 30s where it's stayed ever since. i said jfrog is a sales growth
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story. but when you look at the trajectory it's more of a decelerating sales growth story. in the first quarter of last year they were growing a 55% clip, 39% by the fourth quarter, last year, then under 34%, the most recent quarter. going the wrong way there, friends. jfrog is a very fast grower, no longer an insanely fast grower right after we got those results morgan stanley sliced their price target down from 63 to 40. j frog is up against some real competition, including, oh, man, everybody seems to be up against microsoft. how about the valuation here at these levels the stock is now trading at 12 times next year's sales estimates, okay. in the past that would have been very expensive these days the hottest software names can trade at 50 times sales. jfrog is not one of the hottest software names out there this is a tough environment for
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the fast growing software cohort this group does poorly when inflation is on the rise jfrog reports in early november, can we wait and see? if you want to be a hero, i think you should find something better than that one forget the frog. you know who we want we want the dog. datadog. this is a software as a service company that handles cloud infrastructure monitoring and security with a side of analytics. unlike jfrog, this stock has been on a roll people wanted to buy this. there's a lot of companies that were trying to buy this company. datadog became public two years ago. since then it's continued to roar rallying under 142 today what sets this one apart from something likej jfrog
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its growth has been a lot more durable. in 2019, datadog was growing at an 83% grip. meanwhile, the company reported meaningful upside surprises as of ate jfrog gave us disappointing guidance since the year. since then they've consistently beaten the numbers has it gotten too pricey datadog has given us a huge win but in a market like this one that isn't super friendly to tech, you have to be careful i recommend a pullback,buy it gradually on the way down. do not chase this one. when the environment turns against tech, you need to be
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selective when it comes to picking fast growing software stocks i would much rather own a datadog than a jfrog even then you have to be patient and wait for the right moment before you pull the trigger. we like the dog. we no like froggy master no all right. let's go to mike in kentucky, please mike >> caller: hey, jim, thanks for all you do long, long time. first time based on the long history of successful spinoff investing, conoco, raytheon, spo, our group has been scaling into dell prior to the vmware spinoff. what's your prognosis of the two companies post-spin and do you have any plans to revisit training as home gamers on spinoff investing? >> look, i just want to own dell i feel awful that my travel
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trust did not pull the trigger we had it in the bullpen i don't know sometimes it happens you follow -- look, i like to play with an open hand we missed this one i did a whole lecture about it, it still gets me mad but own dell michael in new york. michael. >> caller: hey, jim, thank you for taking my call on behalf of all investors out there and myself, thank you for making us money. >> well, i'm doing my best i want everyone to learn that's the goal. how can i help >> caller: the stock i'm calling about is taking on competitors like square and paypal with two new point of sale devices, giving small businesses the ability to sell, track, and manage sales more places than any other platform the stock i'm talking about is godaddy. >> people love square. financial technology stocks are coming down. we're going to say no to the
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godaddy. we like the datadog better than the godaddy. with the big plug symposium event scheduled for this thursday, could this be the next catalyst to electrify what was once a very electric stock then wall street is skittish could there be a boom/bust situation? i'm breaking down the difference between cyclical and secular growth and your calls, rapid fire, tonight's edition of the lightning round. stay with cramer >> announcer: scan this qr code and become a member of the cnbc investing club with jim cramer get access to the moves jim is making before he makes them. in depth unless from this wall street legend. join the cnbc investing club right now.
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for decades we've been hearing about the possibility of hydrogen fuel cells. that's a cleaner, greener way to propel cars and trucks and maybe much more. until recently, hydrogen -- that changed over the last year and a half take plug power, it's finally starting to bear fruit when we talked to management in july of 2020, plug power was still a single digit stock it's now 27 and change after a brief detour to 75 it became a meme stock i'm so angry that happened because a lot of people got hurt this is the kind of long term speculative story. however, plug power is holding a big event on thursday where they could lay out the future of hydrogen it's take a look with the president of plug power. welcome back to "mad money." >> hello, jim, great to be here. >> so andy, i'm demanding a
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little bit of a -- let's just say sneak preview of what you're going to talk about at your analysts meeting >> jim, you'll hear from all my general managers, from all our divisions. but 23 people from around the world. you'll hear from the ceo of renault. you'll hear from andrew farr who leads one of the largest mining companies in australia, who is looking to turn australia into an exporter of green hydrogen. of course you'll hear from sk, our new joint venture partner. and our senator from new york, chuck schumer, will also speak at the event it's a worldwide event, not only hearing from the plug folks but from folks all around the world. your listeners, if they go to our web page, they can register for the event. >> i want them to do that. my ears perk up when you say senator schumer, of course the
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state senator from where you're located. there's a senate bill and a house bill and both of them get closer to the dream of making it so green hidydrogen could be less expensive. what do you think senator schumer would say? you know plug power would get a very substantial boost if they did something good about hydrogen in washington >> well, i've sat side by side with senator schumer only a few weeks ago in new york, where we're building the largest green hydrogen plant in the world. and he tells me green hydrogen, fuel cells, that there will be very, very interesting tax breaks for our technology. and i know your listeners will say, there's lots of noise in washington but my experts tell me come december, it will all come together climate will receive a high priority and hide reydhydrogen, especially green hydrogen, will be highlighted in the bill
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so i'm really excited. i'm not going to let the noise that's going on disturb the direction we're heading. >> okay. now, i've always been familiar with the fact that walmart's a good partner, amazon, a good partner, home depot, a good partner. i was interested to see gm is a good partner obviously i think long haul, not material handling is the future. what's gm's role in plug power >> we are working with them in the material handling sector, jim. we're also working with stelantis. in europe we're very close with renault. plug power is providing the fuel cell technology. renault is the second largest electric vehicle provider in europe for commercial vehicles we're combining our capabilities and the van, the renault master van, which both of us are unveiling on thursday, so there is a scoop, jim, that will be both a plug power and a renault van. >> that's very important,
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because what that says to me, though, andy, they're even getting further ahead of us in europe and we've got to reclaim this. i like this new fresno, california clean hydrogen facility is that on par with what they're doing in europe? >> that is on par, jim and look, i am a real believer that america can lead in this activity and the green hydrogen plant we're putting there is actually ahead of much that's going on in europe it will be powered by solar power to generate green hydrogen, over 30 tons a day, using plug power electrolyzers the water we're using is wastewater we're cleaning it up and the commuting at van dota will be able to use that also. it's a win-win-win >> people tell me, jim, this thing has been around since 1999, get off the horse. i always remember what you said about the telephone, and
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cellular, people thought they were silly, and then they hit critical mass. we're closing in on critical mass >> we're closing in, jim the green hydrogen highway, plug is building with 500 tons by 2025, will start per day, will start getting us over the hump and i think critical mass is now. we're real here today. >> wow, i've got to tell you, that would be amazing because we went from having those unfortunate difficult accounting issues which you confronted with me deirectly, now looking at ebitda, i don't know what you'll say for 2024 for ebitda, it sounds like plug power doesn't need any money, let's put it that way >> jim, with the buildout of our green hydrogen network, we'll be well, well-positioned from a financial point of view. >> what is going on with amazon? we know that they want 100,000
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i met with the director of sustainability amazon is the leader right now in driving everything in our country. what else can you do, what else can plug power do with amazon? >> well, i can tell you we're looking at large scale stationary power products using fuel cells we're engaged in ground support equipment for their rollout in airports we're looking at drone activities so there's a lot going on with amazon, jim. as well as on-road vehicles, i should not forget what we're doing, what we're positioning with renault >> that's good, that's what i want, because i think, you know, that's the future. on-road is too inexpensive, you have to make it work we're looking forward to thursday's meeting we appreciate the heads up on what you're going to talk about. i get a sense this is plug power getting back to the way it was before people churned it, flopped it, and chopped it maybe we'll get away from that andy marsh, great to have you on the show >> thank you, jim, always a
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pleasure >> excellent more "mad money" after the break. >> announcer: coming up, a storm is coming. so give us a call. cramer's got the answers to all your burning questions the lightning round is next.
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>> announcer: lightning round is sponsored by td ameritrade >> it is time. it is time for the lightning round. you say the name of the stock. i don't know the calls or the name of the stock ahead of time. i tell you whether to buy or sell. when you hear this sound -- [ buzzer ] -- then the lightning round is over are you ready, skee-daddy?
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mike in arizona. mike >> hi, jim, how are you today? >> i am doing well, how about you? >> good. it's less than 150 degrees out here in scottsdale so things are pretty nice now. >> there you go, that pretty much explains everything what's going on? >> what do you think of the lithium stocks dcrn and solid power? >> i can't look. stop someone wrote me today and said i have three spacs, i want to talk about it. i just said, i'm not going to hurt anybody life's too short i don't like these it's time for them to stop now, ford is involved with one we had last week, i like that. but i'm not going to sit here and recommend the stocks and people should stop filing them let's go to susan in connecticut. susan. >> caller: hi, jim, it's sue i'm actually in rhode island, a great place for you to bring
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your wife for a vacation for a weekend. >> we had a great time in rhode island what's going on? >> caller: i have a comment and a stock pick one, i know you say we should have a small percentage of our portfolio in riskier stocks. >> yes >> caller: i think you need to have a five-minute high flier segment on your show every day my stock for today is macy's >> i like macy's very much but it's not a high flier, jeff is doing a very good job, actually a phenomenal job. if we get anywhere near the immunization we should have, that stock should go to 30 i just feel it's had a nice move but it's not over. how about we go to rich in new jersey rich >> caller: how are you doing, jim? first time caller. i'm interested in noodle company. >> no. i know it's been around, maybe it's making a comeback, but it's
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been two steps forward, two steps back i'm not going there. daniel in new york daniel >> caller: booyah, jim, how are you? >> good, how are you >> caller: i'm doing great my question is chewy >> it's fallen out of favor when people realized amazon won't let them do anymore. it's a good stock. i'm not going to back away from chewy. let's go to mike in new york >> caller: booyah. evs and big auto companies, we're going to need a lot more charging stations on the road. >> yes, we are >> caller: a company called charge point holding >> i know it, it's out of favor. we did a piece recently about how we had to be very careful, again, the spacs, the evs, these are companies that have hurt too many people. you can own it strictly,
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strictly, as a speculation, nothing else natalie in virginia. natalie. >> caller: jim, good evening, jim. >> good evening. >> caller: first i wanted to say thank you for all your investment wisdom over the years. i'm a long time fan. >> oh, thank you thank you to all the nice people who came up to me when i was in midtown and asked for pictures and stuff, you were really nice and i thank you. so go ahead. >> caller: i just joined your investment club, an aa plus member jim, my question is, given the government's massive infrastructure investments, should i invest in companies that will supply equipment and materials, i.e. tractors and cranes i am specifically interested in caterpillar. and i read on action alerts plus, friday i believe it was, jpmorgan is bullish on caterpillar. >> i mean, for the investment club, we're not interested in
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caterpillar. i think new corps is a better way. if you want to invest in infrastructure, it's going to be new corps, that's the one you want to be in. i like caterpillar that's the conclusion of lightning round. >> announcer: the lightning round is sponsored by td ameritrade coming up, it's time this chip shortage stops being something to fear. let cramer help you make it just another data point in your quest to tame the market, next
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we keep hearing about the semiconductor shortage, about how so many industries are hobbled by the semi business so i got an idea why don't we figure out how to profit from it wall street is terrified that the industry that could solve the chip shortage, which is called the semiconductor capital equipment industry, is about to sow the seeds of its own destruction. historically this is a boom and bust business. right now the concern is it's about to go bust i, on the other hand, i think it's crazy the chip shortage is long term, which means the demand for
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semiconductor capital equipment will be long term. when so many ceos tell me they can't get enough chips for their devices, that tells me this industry is as far from a bust as it gets but first let's stress the big word the semiconductor capital equipment stocks are considered cyclicals. that means they have a business cycle. because typically when there's endless demand and tons of price hikes they ended up making too much to try to cash in on that demand, demand collapses and the profits vanish when you're dealing with cyclicals, you can't afford to overstay your welcome. once it goes high, and believe me, our producers will pump like crazy and the price will come back down. it hasn't happened yet i don't think that kind of logic applies at all here. they're a lot less cyclical than they used to be. right now they can't produce enough chips to meet demand. wall street assumes it's only a matter of time until that changes and they flood the market with silicon. they could not be more wrong i believe there's no longer
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possible the demand for all sorts of chips in all sorts of industries sx and the nature of the shortage tells me you should buy asm holdings, kla, applied materials, or amat, and lamb research we don't have any for my travel trust because i got bamboozled by the talk of cyclicality i'm beginning to think the demand is so strong, the stocks are no longer expensive. we won't have to wait long to see if i'm right on thursday, taiwan semi, they're the largest chip manufacturer in the world, they buy tons of machines from the capital equipment makers if taiwan semi talks about how they need more machinery, wall street will be skeptical but if taiwan semi simply said we don't need more machines to need multiyear demand, then i'll
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be right plus we know taiwan semi's r rival, global foundry. what's the best one to buy asml, a dutch company, is intriguing because they have a monopoly on their business kla is a big industry because it never talks which never brings me to lamb research, lrcs. the travel trust had a big position in lamb a few years back when we cashed out. we sold it because i was worried the semiconductor makers were double ordering as the supply of machines were so limited i was right temporarily but then it came back that has never really end.
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that ebbed i think you can buy lamb research as not just a trade but a powerful, long term american industrial investment. i like to sa there's always a bull market somewhere and i promise to find it for you right here at "mad money. i'm jim cramer se southern california neighborhood multiple homes on fire we're live on the ground with the latest i'm shepard smith. this is "the news" on cnbc pandemic game-changers merck requests emergency use for its antiviral pill, as astrazeneca says its new drug both treats and prevents covid southwest airlines cancels more than 2,000 flights. >> why didn't they cancel them sooner or try to reschedule them


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