tv Mad Money CNBC December 19, 2012 11:00pm-12:00am EST
♪ introducing nook hd - the world's best 7" tablet made for reading and entertainment. your favorite magazines and catalogs look better than ever. and with scrapbooking, you can save the things you love, bring them all together, and be inspired like never before. scrapbooking. create yours with nook hd - and even bigger with hd+. find yours at barnes & noble. >> i'm jim cramer, and welcome to my world. you need to get in the game. firms are going to go out of business and he's nuts, they're nuts! they know nothing! i always like to say there's a bull market somewhere. and i promise -- "mad money," you can't afford to miss it. hey, i'm cramer, welcome to "mad money," welcome to cramerica. other people want to make
friends, i'm just trying to make you a little money. my job is not just to entertain, but i'm trying to coach you about this market, educate. call me at 1-800-743-cnbc. you know what? we always spend way too much time worrying, fretting about what could occur. and not nearly enough time thinking about what didn't occur. what didn't go wrong. i've pondered this positive observation all day. the dow ultimately diving 99 points, s&p giving up .76% and the nasdaq declining .33%. because, well, this might hold the key to why we have come up so far in recent weeks, didn't see it today, though, and why we may be in better shape than we realize despite today's action. yes, this stock market could do well over the next few months, even if the two sides in washington can't rise above politics and come up with a reasonable budget that has both
spending cuts and tax increases as seems to be the case right now after the president's discouraging press conference, which suggested that no deal's imminent. and the white house is quietly signaling that talks have regressed. what do i mean about our failure to revisit what didn't happen, what didn't go wrong and the impact on the market? well, let's start with today's incredible news about general motors buying $5.5 billion worth of stock from the u.s. government's t.a.r.p. program. and it was at a price $2 above where gm traded yesterday. that's right. we, the people, got a better deal than we could've ever hoped for just the day before. gm most likely would have been liquidated, putting more than a million people out of work, if the federal government hadn't bailed it out. nobody likes a bailout. people don't like to use the phrase bailout and the government isn't going to be made whole in this investment. i'm saying that point-blank. that's because it's so gigantic.
the simple fact is also not only does gm exist, but it was capable of throwing off $5.5 billion to repay some of the t.a.r.p. investment. this thing was at death's door, now it's thriving, just like aig which also shouldn't have come back, but it did. those are two 2012 success stories that explain how robust corporate america really is and how unheralded that development is. what else? how about that the united states is now producing more oil than any other time in the last 17 years and producing enough to make along with canada and mexico our continent self-sufficient? plus if we were ever to harness our bountiful reserves of natural gas as a surface fuel, surface vehicles, we would become nationally self-sufficient. can you imagine what that could do? the ability to put millions to work to move this stuff to where it needs to be, pipelines, drilling, or to make our nation a better, cheaper, safer place to build a business and ultimately lower the price of gasoline, at least in some areas.
this wasn't supposed to happen. as big a story as this was in 2012, you know what? it's going to be much bigger in 2013 as we hear about the new plants and factories we built here to take advantage of a relatively inexpensive oil and our incredibly cheap nat gas. how about the state of our companies balance sheets? again, not talked about enough. ♪ hallelujah weren't we supposed to be having a serious slowdown, one that would normally be cutting into our companies' liquidity? in fact, the opposite's occurring. as i'll talk about later in the show with the tremendous resurgence in oracle. the coffers are brimming everywhere and the bountiful lower interest rates courtesy of the federal reserve have allowed companies to refinance at amazing rates just like you can at home. they're doing it too. do you know in all of my 32 years of analyzing companies, i've never seen them in more amazing shape, better shape than they are right now. companies like whole foods, which you will hear from later
in the show when the co-ceo visits the set. returning cash to shareholders, brimming with cash. it's breathtaking, this undercurrent as my colleague david faber said today on "squawk on the street," we just don't talk enough about it. and i've got to tell you, that's got to change in 2013. then there's europe. today, just today, i am wearing a tie that commemorates a brilliant strategy. one which works so amazingly that i'm still dazzled by it. what's happening on this tie? it's a man, a man in a suit kicking a can down the road. you see, while the europeans were kicking the can, they gave themselves time to develop a plan to allow governments and banks to raise capital and fix their respective balance sheets at lower levels than anyone thought possible. coming into the year, you know what my number one worry was? we believe that every time italy and spain would have to raise
money, go to the debt markets, do those deals, interest rates would shoot through the roof, bankrupting all involved, sovereign countries, companies, banks. instead, by letting cooler heads prevail through can kicking, smart private sector investors kicked the tires, not the cans, and they bought the debt. hit home runs every time they did. as rates came down hard, courtesy of central bank backstops that really did work. the europeans realized if they stopped the can kicking game cold like so many investors claimed they had to do, well, europe would go into severe depression. they didn't want that kind of super austerity, their leaders bought time by kicking the can and that's what was most needed, time. they bought time. how well did it work? considering rates are not only not dramatically higher, they're dramatically lower, and the euro right now, strongest currency in the world. hmm, i thought the euro was supposed to vanish by this time
with the germans printing deutschmarks in secret cellars around the country. i thought greece was supposed to be kicked out of the union. instead, my advice, do what my charitable trust did today, buy european stocks. you know where else there's much more to come? yep, oh boy was this one a hated one coming into this year. yeah, you know what i'm talking about, china. how about that economy over there? after pausing because the government was busy whipping inflation, now, thank you, late gerald ford, now it's coming on strong. i think growth in china's accelerating. the stock market there might be the most undervalued in the world. the stock market entirely could be undervalued. how many short sellers told you to do the opposite and sell that market? after the steamroller the chinese stock market has been of late, what exactly are the short sellers saying now? i don't know, i'm not hearing them clearly. i'm not listening. i'm not, no, i'm not hearing. europe and china both were supposed to slip into oblivion in 2012. that was the easiest story, everybody wrote it.
turns out to be two fabulous places to invest. how about this housing market? most common worry, the dreaded shadow inventory. oh, the shadow inventory. >> the house of pain. >> so many banks and so many homes on the books they could never recover. wasn't that the narrative? now, where are we? the shadow inventory turned out to be illusory. the banks that were thought to be a ton of shadow inventory in the books, i hope they have some because they've been the hottest stocks around. especially bank of america, up more than 100% for the year, not shabby. the story of 2013, looming housing shortage. so many home builders disappeared during that last downturn that the remaining ones can't keep up with the demand, prices are going higher everywhere. the best investment may be for me to tell you to go buy a house before the affordability goes away. certainly lock in that low rate. with employment not growing
much, the consumer was supposed to be strapped and nervous in 2012. instead, last time we got figures from the federal reserve showing that household debt as a percentage of disposable income, 17-year low while spending on people's homes have been the strongest story out there. so they're spending and then they're not borrowing. you see, that's called nirvana, '94, that's what happened in 1994. we came in with a glut in every kind of structure. too many shopping centers. now we've got a shortage. pretty much in every category. as you know from the parade of real estate investment trust executives, i have them on the show because i need to know this stuff. what an amazing change. one that makes the likes of whole foods struggle for good partials to build on. how about the litany of companies that were supposed to
wither away or disappear in 2012 while the smart guys told us? netflix, wasn't that in a weird horrible debt spiral? but now, ever since doing a deal with disney, it's been about the hottest stock out there. i didn't think that deal would move it. it has. banks were supposed to be laid to waste by regulation, i hope you bought some. including one i think could go much higher, banco santander, which at one point today traded up $8. hey, this thing was at $4 in july! here's the bottom line, we fret about issues with abundance. but when those concerns are solved, we never seem to ponder how they were solved and what a terrific break it was they got solved for the stock market. my suggestion going into 2013, be skeptical, be wary, but don't be gloomy. and certainly don't be paralyzed by worry or fear. instead, look at all the things that went right when they were supposed to be catastrophic and respect the fact those who
panicked or were too cynical, too corroded, lost out and lost out big as the end of 2012 now dawns upon us. brad in washington, brad? >> caller: hey, jim, merry christmas boo-yah from kirkland, washington. >> kirkland, hey, i like kirkland brand from costco. >> caller: yes, indeed. well, i had a question about another pacific northwest company, gbx, greenbrier. >> i think the stock is inexpensive. i don't know whether -- i don't know who comes back, but i've got to tell you, i do a lot of work with the railroads and we need a lot of cars. i think this is a good buy. it's not going to be, look, if you want a rail, i like ksu. remember that? someone downgraded it the other day. i think that was wrong. how about chris in my old home state of pennsylvania, chris? >> caller: boo-yah from scranton, pennsylvania. >> what's going on? >> caller: not much, not much. i wanted to know what you think about lockheed martin.
i saw today the pentagon agreed to buy 30 of their s-35s. but the stock's down a little bit. i wanted to know what your take was -- >> all right. chris, this isn't dunder mifflin, it's a great american company. it's only a dollar off the highs, so i think lockheed martin with the good yield and so many worried about the fiscal cliff, i think it sees par which is gibberish for $100. things are better off than they're supposed to be. of course the bears are never happy. what are you going to do? give them some abilify, xanax? what works for them? i don't know, i don't think anything does. anyway, i want you to be skeptical going into 2013. i want you to be very careful. but i don't want you to be paralyzed with worry and i certainly want you to be opportunistic. "mad money" will be right back. coming up -- supermarket sweep. tonight, cramer's going food shopping. first up, you don't need to be on wall street to spot investing ideas. the next hot stock could be hiding in your grocery aisle. jim's slicing through the facts
to see if it could deliver hearty returns. then, it's been one of the street's greatest growth stories. whole foods market planted the seeds for profit when they introduced americans to healthier food and has been reaping the rewards since. but as competition closes in, can it continue its climb? cramer has the exclusive with its ceo to find out. all coming up on "mad money." don't miss a secon "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to email@example.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. hey! did you know that honey nut cheerios
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more easily understood entities, more edible. now that the year is coming to an end, it's time to see if the breakup thesis still holds major money. in the last two years i've recommended 13 different breakup stories. marathon, conoco, covidien, fortune brands, sarah lee, abbott labs, news corp., mead, westvaco, post, mcgraw-hill, and kraft foods. they're up 13% from when i recommended them and outperformed the s&p 500 by nearly 5%. so, yes, the evidence that these breakup plays work as a way to beat the market and beat the market handily, it's in. 5% is a lot when you're a portfolio manager, okay. now covidien and mcgraw-hill have been the best performers in the group. covidien we had the management on, splitting off the pharmaceutical division in the middle of the next year. up 34% since i recommended it in
december of 2011. mcgraw-hill up since i recommended it in may, shortly after the company announced they would break up, one focusing on education, one on finance. i still like both stocks, but no need to chase. you'll get a better chance to buy them if you wait for some weakness. look, like a day like today, the president speaks, market gets hammered, that's when you think about buying these. out of the 13 breakup plays i highlighted, 12 of them managed to outperform the s&p, that's pretty incredible. but there was one laggard and that's the stock i want to talk about tonight, because i owe that to you. okay. and the stock is hillshire brands, hsh, it's the old sarah lee, sle meat division. i recommended sarah lee as a breakup play back on april 12th. couple months later, the company did exactly what i told you it would do, split itself into two different businesses. sarah lee spun off the european coffee and tea business under
the name de master blender 1753. master blaster, master blenders, whatever, and the remaining company which mainly focused on packaged meats became the new hillshire brands. you know these big brands, who doesn't like sarah lee, right? jimmy dean, jimmy dean. ballpark franks, chef pierre. state fair, among others. the idea that hillshire would be the slower growth value play and the wake of the breakup, the stock pays a yield, i think increased down the line. now, right when sarah lee broke itself up, they paid you a $3 per share special dividend and that was very nice, particularly for low tax rates, right? but since the rump of sarah lee became hillshire brands, performance hasn't been particularly impressive. since my recommendation, hillshire's down about a percent, s&p up 3.8% over that same period. unacceptable. what went wrong here? why hasn't hillshire roared like the other breakup stories? well, first of all, we never
expected this one to make a ton of money immediately, not overnight. hillshire brands was always going to be a slow-growth company, that's more about margin improvement and increasing revenues like con agra and general mills. hillshire was in dire need of a turnaround going back to before the breakup. its brands have been losing market share at the old sarah lee and so far the company is trying to fix the pre-existing problems. does that mean hillshire's a failure? i don't think so. my view is that hillshire just needs more time and that is not an excuse. i'm not just alibiing for it. i really believe this. this is a turn around story that was always going to take years. right now hillshire's reinvesting in the business in order to take share in the future. hillshire ceo shawn conley, he is going to boost the company's revenues by 4% to 5% along with a 2% to 3% increase in overall individual volumes. meanwhile, he plans to eliminate
100 million expenses over the same time period. you want to be along for this ride, something you can do by buying the stock into this weakness. this is like all those companies that restructured then reaped the benefits later by making you wish you bought them while the restructuring was going on. companies coming out with new, innovative products. that was such a great re-invention. well, they're re-inventing, coming out with household name brands like ballpark and jimmy dean. they've got ballpark slider sandwiches, mexican flavor corn dog. beyond that, hillshire plans to revamp the packaging, freshen up the look a little in the aisles, make the merchandise more attractive, less humdrum, less old fashioned. boosting marketing support for the brands while the advertising guys come up with marketing campaigns to promote them. these are all the elements of the turn. and i believe they could ultimately lead to an acceleration of hillshire's
business. how about this? over the next three years, patience. the fact is, hillshire's still cleaning up its operations. the breakup gave them space to restructure. but that restructuring is going to take time. just yesterday, the company announced it's selling its australian subsidiary to mccain foods for $85 million. hillshire tries to make itself into a more focused business. but even though i believe in the long-term story here, the big worries about hillshire have more to do with what will happen over the next 12 months or so. people worried about commodity costs. roughly 60% of hillshire's cost of goods sold is commodity driven with 42% coming from meats, meat, 9% from packaging and freight, another 9%, other foods and baked goods inputs. the issue here is that this year more farmers brought animals to market because of the drought. so some people were worried there might be a shortage of
hogs come next year. this is hot links. where be the hogs? dramatically drive up the price of kielbasa and all these others. me, i think that's too far out to be concerned, frankly. i don't think it's going to happen. in a year, hillshire will have sold lots of new products that will allow them to offset any pain by higher commodity prices. that's an aberrant and minority view. when hillshire reported back on november 1st, look, the results were excellent. the company delivered a huge earnings beat, but management said they expect higher commodity costs. look, that's what caused the weakness. now, i think this is a case of management underpromising and overdelivering. i believe commodity costs will be lower than expected going forward and that along with the turnaround should allow hillshire to beat what are now lowered expectations. here's the bottom line, so far, out of all the breakup stories we've highlighted, only one,
hillshire brands, has failed to outperform the s&p 500. only one disappointment out of 13. but you know what? i don't think hillshire's an outlier. it's more that this is a restructuring story, it's going to take a little time to play out. when it does, though, i bet hillshire will be a winner, which is why i think it's buying this restructured story on any weakness. i believe it'll have a much better 2013 than wall street does. let's go to rick in florida. rick? >> caller: hey, how you doing, jim? >> not bad, rick. how about you? >> caller: great. how you doing, sir? i was wondering, i'm an orlando guy and i believe in orlando companies. and i'm calling today to ask you about darden restaurants. it's my portfolio's largest position. i was just wondering, with the stock dropping and darden lowering its guidance last week, should i brace for another drop tomorrow with earnings out? or maybe they're sandbagging, i don't know if that's at all possible. i was wondering, even though
they expanded olive garden and red lobster throughout and throughout the south rural areas what should i look for? >> well, look, i've got to tell you, darden -- the only people i know didn't like darden were the guys from the deadliest catch. darden doesn't give them enough for their crabs. and i've got to tell you, isn't that interesting? they get the stuff cheaply. i happen to love red lobster, love going to olive garden, long horn steak house is a favorite of our staff. capital grill, i was there last monday. these literally are the best brand names. the question, sir, is why isn't the company doing better? i think management's the issue. i'm disappointed in the way the company's been delivering, their ads have been missing, numbers going down. if it weren't for the dividend, the stock would be lower and i even question the dividend. i don't like darden on a bounce. exit. bob in connecticut, please, bob? >> caller: yes, jim. first of all, let me say boo-yah from connecticut. and, you know, a few months ago
i bought a keurig coffee machine. i was so impressed, i bought the stock, which was green mountain, i paid $57 for it. my question to you is, since it's gone down so much, started to come back up, should i hold on to it? >> i'm not -- i happen to be a fan of the keurig too, but unlike victor kayem and the old ad, he was such a fan of remington, he bought the company. i don't want to buy green mountain. it's got the red flag, the red flag of my friend herb greenberg, and when herb raises issues, i don't go there. herb tells me where battlegrounds are, and when it comes to a battleground, i'd rather eat a cold corn dog. well, check that. i like to revisit stocks i talk about on "mad money," and in this case like hillshire, i think it needs more time, this is a long-term turn-around story. i suggest getting it on weakness. listen, this tastes better than the dog food i ate my first year of the show.
after the break, i'll try to make you some money. coming up -- market must-have? it's been one of the street's greatest growth stories. whole foods market planted the seeds for profit when it introduced americans to healthier food and has been reaping the reward since. but as competition closes in, can it continue its climb? cramer has the exclusive with its ceo to find out. customer erin swenson bought from us online today.
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a lot of times i do introductions, i'm dispensing with that because you all know whole foods. we love it. we had a whole foods thanksgiving at pop's this year. delicious prepared turkey and all the trimmings. stock's up 40% from a year ago, but lately the shares have flatlined a bit despite a beautiful $2 special dividend and the best same store sales numbers of any chain i follow. has organic food lost the arter or has the stock fallen victim to its own success and greatness? maybe people are ringing the register. let's check in with walter rob, co-ceo of whole foods. find out how whole foods the company, not just the stock is doing. welcome back to "mad money." >> thanks for having me back. >> you bet. >> have a seat. >> you bet. >> i go on to @jimcramer. and i said, please, anybody have any questions for walter? why don't we have one in huntsville? how come we don't have any in toledo? what's the problem with
cleveland? we need one right now in downtown los angeles. there are 335, you can get to 1,000 pretty easily. >> all the cities you mentioned, we're on it. >> you're on it. >> downtown l.a., we're working on it. >> one of the reasons i ask that is because a fellow from northern ohio wants to know, gary500k, is ohio -- is northern ohio too blue collar for whole foods? >> heck no. we're continuing to find. this year we opened up in boise, idaho, right? next year we have wichita, kansas, lincoln, nebraska. >> and there's nothing there. >> we're going to go there. >> you got your first one in hyannis. the whole cape doesn't have. >> tough to get real estate. kind of pricey, but we did get a nice spot in hyannis. tell him thanks for the suggestions. >> i thought it was funny because i thought someone might say, look, tell him i wish you had more gluten and whatever, and you have a lot of gluten-free. but all people wondering why
they can't have whole foods closer to their house. >> 2012, the greatest year in the history of the company. despite all the noise out there, we're accelerating, growing, faster, it's good. >> within the stores, you talk about how you're changing, you've got new things coming out, you rolled out something i didn't think would be big, but apparently it is, organic nail salon. >> that's right. we're doing a trial in the organic nail salon. just an experiment. >> it's a super market. >> i know that. it's a lifestyle, it's a brand, it's an experience. that what we're trying to build. in austin, texas, you can have your choice in our flagship store, three restaurants. in the castro in san francisco you can have your nails done on your shoes worked on. so we're trying different things. >> what do we know is really working that can be rolled out nationally? is that something we're going to see? or is that just a boutique idea and you don't have enough room in some of the smaller stores? >> yeah. >> will we see these things in new york? >> you may see them in new york, but the best example we talked
about last time was the pub, the pub idea. >> yes. >> we had that and started out in one and now have 55. turns out people enjoy getting together and gathering and relaxing after work. >> okay. now, you also did a study most recently, a lot of -- a couple guys joked. ask him about whole paycheck and a lot of what i buy at whole foods is now cheaper than local merchants. >> right. we've talked about this. work really hard on our price competitiveness. quality and value, quality and value, it's always a dance. i think we are fundamentally more competitive. and i'm looking you in the eye and saying, hey, we are going to be competitive on like product because we're going to continue to grow the company. >> you have been doing terrific work rolling out private label. >> right. >> is there a balance? some people want to see those branded in the store, they don't want all private label. other people, some of the branded companies, they can't be that happy you're competing directly with them. >> we found in the downturn, they want their brands and they want the private labels. so i think we will strike a
balance, maybe 20% of sales is about the right balance for us. >> you don't want to go too much because people won't be able to see the brand they like. >> some of the european companies are 70%, 80% private label, we're not going to go that far. i think a nice balance of the brands, local companies in particular, and the private labels right for whole foods. >> i find that your company does not trade with kroger or safeway and trades more with starbucks and chipotle. do you ever find that to be odd that those are kind of the comps? >> well, i think they trade with us. you know, i think we've got a very nice valuation from the market. people, i think, appreciate our growth and our culture and the spirit of our company which, i think, is a little bit different. >> right. it's an ethos. now, i go to your store, i look now -- because i have two vegetarian daughters. i always have to look to be sure. what can you do to make -- i think vegetarianism is one of the biggest trends worldwide. i think if you go international, it's going to be a big trend. what can you do to make it clear
that this doesn't have chicken lecithin? i've mentioned this because trader joes, a competitor, has really gone out of the way to tell you whether something's vegetarian or not. >> well, i think -- that's a good question. i don't know, i'm going to go back and look at it after this interview. i'll go back and look at what they're doing and see how we can improve what we're doing. >> all right. thank you. >> you're welcome. >> good things happen when i come on "mad money." >> that's good, because you always want to be in a situation where you don't get blasted because you bought ramen and turned out chicken lecithin because your eyes aren't good enough to see the label. >> i think our company has led the way for transparency in the food marketplace. you look at our standards on meat, seafood, i think we are leading the marketplace and saying, here, this is what we're selling, here is how it's raised. i don't think there's any other company out there that has the standards we do in the food. >> and the reason we've been behind the stock, it's good -- i never expected to buy anything other than organic. there are no tricks. but i also find lately because i'm trying to be good and trying
not to eat meats, i worry about the calorie count. do you think one day you'll have to prepare foods, make it really clear? the turkey we had was delicious for thanksgiving. i knew it was fattening. it tasted too good. >> you see that in restaurants. new york has a law where you've got to post the calories. >> that's great. >> i think we will voluntarily go there to let people know -- i think it's the right thing to do. it may take a while to get there. it's not as simple as just saying what's the calories? you've got to work on a nutritional profile. but i think it makes sense to put that in place for customers to see. if you go in the produce department, we've posted up the kind of andy score for the produce. it's something in the future. >> last thing, what's the big thing next year? organic nail salon, the gluten, what is the thing you're looking at? because you guys are trend setters and that's one of the reasons the stock will keep going higher and higher while you grow. >> the big thing next year is growth. we opened seven stores last quarter, we have 11 more coming up this quarter. we are growing, accelerating,
our square footage growth into 2014, which is as far as we've given guidance. you're going to see a lot of new innovations and excitement in these new ideas. >> we have the shopping centers, there's not a lot of space left in the real estate investment trusts. does someone have to leave for you to come in? >> i would argue the internet is in the retail scene. there's space opening up. we're seeing more opportunity now across the country than we've ever seen, at good deal points. >> well, i know everybody wants you as the anchor. they don't want to say it on camera because then you're going to demand you get a better break in the red. thank you so much. that's walter robb. guys, best same-store sales unlike any other i've ever seen and multiple years of growth. i think this is going to be a fabulous stock for 2013. stay with cramer. coming up -- are you ready to get charged up? cramer cranks up the voltage and
the "lightning round" on cramer's "mad money." rapid-fire calls, you say the name of the stock, i tell you whether to buy or sell. play until this sound -- and then the "lightning round" is over. are you ready skee-daddy? it's time for the "lightning round" on cramer's "mad money." doug in illinois. doug? >> caller: hey, windy city boo-yah. >> sweet. go ahead, man. come on. >> caller: men's warehouse. >> men's warehouse. too inconsistent for me. i feel terrible about this because this winter has become -- i've got enough problems, i want to go with sweet, consistent, i want to go with urban outfitters. clyde in nebraska. clyde? >> caller: this is clyde, boo-yah, jim cramer. >> i like that. >> linn energy. how does the dividend look? >> it looks real good. these guys are smart as whips. don't forget, it's lnco.
jude in new jersey. >> caller: hey, jim, how are you? >> real good. how about you, jude? >> caller: okay. i have a question for you. do you think the acquisition of real corp by con agra makes it a stronger stock? >> yes, absolutely. i've got to tell you, i thought it was airtight, unassailable and a -- >> buy, buy, buy. >> david in california. >> caller: boo-yah, jim, from southern california. >> lucky man. what's up? >> caller: i wanted to get your opinion on ggc. >> i'm not a commodity guy, i'm a proprietary guy, commodity business offloaded by ppg, which by the way helped bring public while i was at goldman, and, i say buy ppg. let's go to ron in new jersey. ron? >> caller: boo-yah, buddy. >> liking that. what's up? >> caller: where do you see this new mondeliz? >> oh, i like it, mondelez, my charitable trust owns it. stephanie link was telling me this morning because we go over the portfolio, this is the one,
this is the one, not general mills, not heinz, not mccormick. this is the one. larry in washington, larry? >> caller: boo-yah from port angeles, washington, jim. >> i'm liking that. >> caller: what do you think about american axle? you recommended that a few months ago, are you still hot on it? >> yes, i am. i think that is absolutely terrific. it's going to be big, the trucks port is going to be big. i like it. i want to own it. now let's go to emile in new york. emile? >> caller: hi, jim, how are you doing? >> couldn't be better. how about you, partner? >> caller: doing great. what are your thoughts on a long position in transdyne group for the upcoming year? >> oh, man, come on, aerospace, i love it. the stock is up 50%. >> buy, buy, buy! >> i think it's a terrific stock and i want you to own it, particularly if it gets any weakness. i want you to buy, buy, buy. and that, ladies and gentlemen, is the conclusion of the "lightning round."
>> the "lightning round" is sponsored by td ameritrade. coming up -- waiting for washington to rise above? get your portfolio prepared for whatever happens. call, tweet, or e-mail and find your way to the latest edition of "am i diversified." so likes to ride her bike. she knows the potential for making or losing money can pop up anytime. that's why she trades with the leader in mobile trading. so she's always ready to take action, no matter how wily... or weird... or wonderfully the market's behaving... which isn't rocket science. it's just common sense. from td ameritrade. it'quanyone 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!
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let's just say the past few weeks have been marred by the failure of people to rise above and get over this fiscal cliff concern in washington. let me step back and observe all the positives we've seen this year. we can -- let's say we can be constructive. even if we fall off a cliff and bounce back. skepticism is important, okay? but fear shouldn't be an option. take a balanced, diversified approach to investing, stay on top, do your homework, then 2013 could be okay. let's play am i diversified? it's the last one of 2012. it's where you call me, you tweet me @jimcramer, tell me your top five holdings and i tell you if your portfolio is
diversified enough. let's start with a tweet tonight from @joeyleonard. am i diversified? silver wheaton, questcor, priceline, fastenal and eight by eight. all right. you know, this is -- when i saw this portfolio, you know what? this is well constructed, but it is a little too hot for me, but that's not what we do on am i diversified. industrial supplies is fastenal. this one we got sizzled in. questcor is that drug company that some feel is not going to get reimbursed by the government. silver wheaton i prefer the slv. priceline, red hot stock, too hot for this guy. and 8 by 8, an internet protocol, a drug company,
industrial company, good diversification, but i don't know. too easy. let's go to ed in pennsylvania. ed? >> caller: hello, mr. cramer, boo-yah from pittsburgh. how are you? >> oh, man, i'm doing great. i've got my pittsburgh steeler towel -- and you, my friend, control your own destiny. >> caller: absolutely. it'll be fun. >> thank you. >> caller: okay. my five stocks are, heckman, hek, cisco, csco, analy capital, nly, pfizer, pfe, at&t, t. >> i always said people from pittsburgh got horse sense, including chuck bunch, who runs ppg. cisco, very good technology company, it's doing much better than people thought. i hope they sell that linksys. hickman, the speculative play on fracking. annaly, i'm worried because the
late mike farrell passed away, the mortgage business is very good. at&t, very nice dividend and telco, pfizer, very nice dividend drug, it's drug, it's telco, it's finance, oil and gas, tech, that's the perfect distribution. i congratulate you and do i wish you luck this weekend in pittsburgh? yeah, because it could help me in fantasy. jim in new york, please, jim? >> caller: hey, jim. am i diversified? apple aapl, exxon, xon, abbott, abt, pfizer, pfe, and johnson & johnson, jnj. thanks, jim. >> oh, boy. the good is i think abbott is a terrific drug company. my charitable trust owns it. exxon mobile, not my favorite oil company, but obviously, you know, a good company. there are other oils i think are better. apple, technology company, my charitable trust owns. abbott, j & j and pfizer, we
can't let that stand. we have to make changes right now. first, i suggest instead of j & j, how about general electric? everyone hates the stock all of a sudden, that's wrong. and we're going to have to trade out of pfizer. and what we'll do instead of pfizer, do that mondeliz, get a little food growth in there, i know you like stability or you wouldn't be in all those drug stocks. wow, great players, "mad money's" back after the break.
i had to pinch myself. almost as if i were listening to a play staged among tech executives in a bygone era. we expect stocks to gap up and never look back. i'm talking about last night's oracle conference call. record numbers everywhere all around. new software and cloud revenues up 18%. unite states on fire, plus 22%, europe incredibly strong, 12% growth, and an expansion of head count because there's so much business to take. how strong was europe? a percentage point behind the great growth engine that is asia-pacific. get this, remember that sound you're supposed to hear at the end of every tech year, that sound of a budget flushing as companies spend their technology dollars before they go away. you can hear it loud and clear on the oracle quarter. just like the old days. you know what? it was actually better. get a listen to what oracle co-founder and chief financial officer katz had to say when asked about whether spending's been crimped by the worries over the fiscal cliff. quote, as you can see in our
numbers, people want to spend their budget, continue to spend their budgets. we're having an absolutely wonderful december so far. what's going on in washington? i don't know who necessarily it is influencing today, but i can tell you our customers have been spending money with us even here in december, end quote. blow away. just blow away. gets better. oracle spent $7.5 billion buying sun micro, initially perceived as some merit but was widely criticized as a gigantic waste of money. larry ellison stuck a fork in that negativity by saying with this acquisition, quote, sun has already proven to be the most profitable, strategic and profitable acquisition oracle has ever made. i'm sure the skeptics will say, whoa, hold on, this hardware purchase has been a gross margin killer for years and years, but ellison is telling us it's the program software that came with sun that's made a huge deal and that's made this trade a winner. and now that the hardware portion of the acquisition has been downsized, he expects the news will get better and better. what customers are buying this
stuff? who is spending? well, they give you a hefty client list because the skeptics have to listen up. their engineered products and that's what's doing the best. include united arab emirates, expedia, macy's, u.s. bancorp, chevron, time warner cable, vodafone and walmart. companies with lots of money that are growing, growing aggressively. and choosing oracle to manage the numbers and cloud migration. people are getting out of having their own dumb intel boxes putting their data instead in the cloud where it can be accessed faster and much cheaper, not real estate companies anymore. oracle made a big show of saying that it's taking share from s.a.p. in europe, something i bet bill mcdermott would disagree with. and a subtle undertone that suggested salesforce.com wasn't doing as well as oracle either. i know marc benioff would dispute and i bet would be right. whatever, let's just say business is very strong. cash is brimming, $34 billion, despite a buyback that's taken in 350 million shares, $10
billion worth of stock. at a time that headlines suggest a collapse in technical spending, oracle is saying the opposite. it was an amazing, affirmative call. and my hat is off to the entire team. we may have worries about apple. we may be concerned about personal computers, but overall tech spending with big data and storage, it's hard to be better than this. welcome to the future. at last, it's like the past. stay with cramer.
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