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tv   Mad Money  CNBC  June 13, 2013 11:00pm-12:01am EDT

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s - making bp america's largest energy investor. our commitment has never been stronger. >> 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. [ applause ] hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm trying to make you money. although family is above all else, and i'm honored to welcome many cramericans here today.
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my job is not just to entertain you but to educate you! all right. kids, kids, listen up. both here in our family affair live audience show and at home, because the clock is ticking. sure we talk about the events of the day every day here on "mad money." we talk about where the averages go out. today is no different. dow climbing 181 points and the nasdaq advancing. a shockingly good session helped out by some quiet behind the scenes talk that the federal reserve is not done with its program to try to keep rates low. for those of you in the younger cohort, we got to do some serious long term work. right now, we got a lot of work to do. because here's the deal. if you start investing at this moment, if you start putting your money away now, you have a much better chance to see that money grow beyond your wildest
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dreams, which is why at the top of this special "mad money" i'm going to give you the starter kit you or your children need to get rolling. with five stocks, fab five that you can buy and hold, and follow for the long haul. because you know the brands. you're interested in them by nature. or you use or them or go to them already. long time viewers of the show will know these household names. i want to say a few words in praise of owning individual stocks. buying stocks remains the single best way to make money over the long term, we have never lost that mission. i know that sounds simple, maybe soporific to you but every year it seems that fewer and fewer people are willing to buy any stocks at all. whether it's because of the insider trading, a sense that
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the big boys get the key information first, which we know from stories that our own network breaks regularly is actually true. many people are simply revolted by the prospect of investing in individual stocks. meanwhile, it seems like lots of folks who opine on the market in all sorts of venues regularly do their best to scare you out of your stocks and your wits with worries about cyprus, italy, spain, or north korea, japan. china, or the european central bank. and of course the nefarious policies of ben bernanke. but we don't think that. as we saw from the terrific retail sales, lower jobless claims today. it seems like there's a negative imperative, a permission to be
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pessimistic no matter what. you need to give up, put your money in something more passive and forget about it. they want you to put it into the index funds. they want you in bogus etfs meant not for investing but for trading and bond funds that have totally annihilated you. all because they've told by the experts that they're too stupid to know the best of breed. and not only do they not believe in you, but they don't want me to help you. now, i think that's a cynical, demeaning stance. the simple truth is that we can together identify best of breed companies with terrific managements in order to invest in them. i can help you through this. how about the doubters, the patrician theoreticians and effete elitists who don't believe me or don't believe in you. well, four years ago on our family affair show, we created a
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kid friendly portfolio we suggested that parents pick for their children. then we did an update in 2010. take a gander at this. and how did we do versus the acknowledged benchmark we all pit our picks against, the s&p 500? our kids portfolio gave 140% gain versus an 83% increase in the s&p. random? guesswork? monkeys throwing darts or banging out letters on the keyboards? that's what they regularly compare the show to. maybe we're just real smart monkeys. the truth is you can beat the market by picking individual stocks, and we did it. we isolated some terrific names you all know. we told you to buy them for your kids and they trounced the averages and it was that simple. so terrific. do we pat ourselves on the back and say, nana-nana to the naysayers? no, of course not! hey, we like the so-called pros who think you're too dumb to even look at your money let
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alone invest with it, which is why they want you to send your money to them so they can take a cut off the top just for taking it in. that means that we can't just buy and hold these stocks from here to eternity. that's the bogus conventional wisdom. we got to buy them and do homework on them. drop, pick better stocks, eliminate those that might have lost their way, i think two of our original picks plus another name we swapped into need to be changed, because i believe we can do better. i believe i can do better. that's right. just because we recommended them doesn't mean we need to be wedded to them. take disney. all that happened since i picked it at 22 bucks, they have gotten better and better. theme parks strong. espn, what can you say about the best media brand in the business? acquisitions of marvel and now lucas film? only abc is now wanting and it won't stay that long. for now. because ceo bob iger has decided to take care of business.
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if your kids are like my kids or this kid of 63, then you're going there at least a half dozen times. me, i have been there ten times. who's counting? we're sticking with mcdonald's too. now that don thompson has taken it over and introduced new concoctions. we know they are doing well throughout this country and they're going to take the world by storm as we found out when they blew away the monthly numbers. i'll tell you, i was thrilled that they blew them away. that said, i'm not happy with hasbro. yes, it's been a huge underperformer of late. kids love toys, we like management. not lately. the toy business has been upended by the internet. so we've got to leave hasbro behind. we'll extrapolate youth and recommend that hasbro be replaced with whole foods. that's right, whole foods. i think the kids are recognizing
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organic and natural food earlier and earlier. we want to start them young on a good concept, good stock, and something that's right. nutrition. plus, whole foods can triple in size by the time these kids become adults. plenty of room to run. we tried to have an apparel company in the mix, and while we did well with nike, but the original pick for the spot we started in this portfolio. these days i actually worry about nike. it's got too much china, not enough america. so we're swapping that good growth stock with too much foreign exposure for one that's reinvigorated and domestic. we're swapping it for gap stores. ever since glenn murphy took the reins six years ago he's turned gap from a loser of a retailer into a power house that every kid and parent knows and likes. i see value not only in the chain but in the stock too.
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now, this is a tough one. i know it's not going to please everybody. but it is time to retire apple. when we first went in, they beat the estimates. yeah, it consistently -- it trounced -- it destroyed the estimates. but those days are behind them. we're numbers people on the show, so instead, we are swapping one household tech name for another -- google. why google? aside from the fact that every kid in this room, at home, everywhere around the world uses it? it's got a hammer lock on search, it can operate on many different platforms and it's profitable. unlike apple, google can handily and easily beat the estimates. yet, like apple it sells at a very low price to earnings multiple versus the growth rate although the growth rate is not declining. so here's the bottom line. when we know that when families invest in best of breed stocks that our kids know and love or will love, we know they can beat the market. that's why i'm recommending that you sock away some shares of disney, mcdonald's, google, gap, whole foods.
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start with five shares, start with one share, as long as you get started. get started now. so there's plenty of time ahead for the stocks to work their fabulous magic. let's take a question. >> hi, jim, i'm christina. this is my mom sue. my sister amy. we're here from northern michigan. >> oh, excellent. thank you for coming on the show. >> yeah. >> don't call her between 6:00 or 7:00 even if you're dying because she won't answer the telephone. >> she has horse sense and probably a -- you know, there's 11:00 to 12:00, no. 9:00 to 10:00, that's "squawk on the street." that's a good show. carl and david would be hurt. >> you recommend gold as part of a portfolio. >> yes. >> and with the market declining recently, would you recommend the gld as part of a hedge right now? >> i like gold coins more. gld didn't fare that well, but i think gold -- look, if you get
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insurance for a house, you don't expect it to pay for you to live in the house if the house is destroyed. i like the hedge and i like the coins. i like the bouillon. >> over here. >> booyah cramer! >> i like that. >> first off, i'm dead serious here. i honestly believe you should be chief of the federal reserve. second -- >> thank you. thank you. we have a fabulous chief -- we have a fabulous -- i appreciate that. but ben bernanke is as good as it's going to get. thank you very much. he's the best. >> secondly, the navy recently adopted a stealth drone they plan to add a fleet of these to their aircraft carriers. so would it be a good time to start investing in companies that have a stake in major defense contracts such as these or since it's in the prototype status, is it better to wait? >> i like lockheed martin and northrop grumman. i know that they're considered
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to be out of favor, but they have great cash flow, great dividends. those are investable stocks. yes? oh, okay. >> boo-yah! >> happy to be here. >> right out of new jersey, right around the corner. >> okay, excellent. >> love to watch your show. watch it every night. if i miss it i watch it at 11:00. this is my husband, karl. he does not like your show, but he has to watch it. >> hey, this -- hey, clear him out of here. yeah, and thank you, ladies and gentlemen -- no. go ahead. >> but he has to bear it for me. i really love your show and i love you, jim. >> thank you. thank you. >> you're really, really good. >> thank you. >> my question to you is, since the energy boom and everything, everybody says smart money is moving to the midwest where the energy is, where the oil is refined.
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and smart money is moving there, restaurants, everything else, you know, regional banks. i would like you to recommend a utility stock that's going to benefit from the people who are moving there and making their homes there. >> wow. >> i looked into a company, etr, but -- >> that's the one -- that's exactly what i was going to recommend. it's got a good yield and it's well run in new orleans, and my daughter is down there using the electricity like's going out of style. it's never too early to get the kids started. go with disney, google, mcdonald's, gap and whole foods, and there's plenty ahead on this very special family affair show. we'll be right back. coming up on a special edition of "mad money" -- it's a family affair. the right meds? pharmacy kingpin rite aid posted one of its best years in decades, but is it the best medicine for your portfolio or
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should you pick up a prescription of rivals wallgreen's or cvs? later, it's the final match-up between companies from san antonio and miami. and tonight, a showdown between two stocks that have been riding rough seas, carnival cruise lines and cloud play rack space. which least valuable player should you bench from your portfolio? plus, cramericans are all in the studio and the results can be unpredictable. >> will you marry me? >> stick around to see what happens this year. don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer #madtweets. send jim an e-mail to or give us a call at 1-800-743-cnbc. miss something?
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[ doorbell rings ]
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what the heck is happening with rite aid? here's a company that's always been the redheaded stepchild of the drugstore business, the questionable number three player behind walgreen's and cvs, yet they're jamming, with the stock up a whopping 132% since the beginning of the year. don't get me wrong. the entire pharmacy space has been roaring lately. walgreens up 35% and rite aid, the perennial underperformer in this group, has somehow managed to leave behind both of them in the dust. so what is going on here, and what should you do about it? first of all, this gigantic move with rite aid is what you see when a company that had been
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left for dead manages to turn itself around! ♪ hallelujah >> for years from 2008 to 2011, they struggled with earnings and massive debt load and people speculated the company might have to go bankrupt. that's why six months ago this stock was trading at just $1 a share. but rite aid has been trying to turn itself around, closing weak stores, partnering with gnc and carrying more private label favorites. well, it's much cheaper than the real thing. whether we are talking snacks or over the counter medicines and the turn is indeed for real. rite aid handily beat wall street's estimates when it reported back in mid april, delivering 11 cents of earnings per share when the analysts were expecting a penny. that's an astounding performance. then they announced they were refinancing high interest rate
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debt, and getting the much lower rates, thank you ben bernanke, available to them. they raised the guidance for the first quarter that we'll hear about when they report next week. they look like they have their act together, hence the ferocious snap back in the stock. but now i think after this run it is time for you to ring the register on some of rid. take out the cap, let the rest run, because you're in holy grail territory. you are indeed playing with the house's money. why bother to do that? why get off a winner? first, one of our cardinal rules here at "mad money", we never want a gain to turn into a loss. second, after this move, rite aid is valued on earnings. when you compare it with the two giants in the industry, cvs and
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walgreens, it's not the bargain it used to be. it's only marginally cheaper than cvs and walgreens. when you consider that cvs pays a 1.5% yield and rite aid has no dividend, they are among the best-run companies, not just retailers in america. these valuations don't make any sense to me. rite aid may indeed have improved dramatically, but it's nowhere near as good as cvs or walgreens. you should take profits and plow them into the best of breed in the sector. it is cvs or walgreens? there are a lot of good things coming for all these big pharmacies. you said 27 million people being added to the health insurance rolls thanks to obama care, yet baby boomers are starting to become eligible for the medicare prescription drug program. you have a boom in generic drugs
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which are much less expensive than brand name drugs, but carry higher gross margins for the pharmacies that sell them. i like both cvs and walgreens. both are going to benefit. however, i think cvs is the better buy. the reason? truth be told, not only is walgreens the largest drugstore chain in america, but it's the better retailer. that said, cvs is more than a drugstore. that's the difference. it's cvs caremark, a pharmacy that also owns a pharmacy benefit manager which is a third party administrator that helps insurance companies and hmos save on drug costs. cvs caremark is the second largest player in this terrific space, 25% share, and the company has really turned this part of the business around, after initial hiccups in 2010 and '11. and plus the largest of the
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pharmacy benefit managers, for months, express scripts was your pbn, you couldn't fill the prescriptions at walgreens. picked up roughly 24 million prescriptions. so far, cvs is keeping much more than i thought. as for walgreens, it has begun to recover from the express scripts debacle and more so. their remodeled stores are terrific, especially in new york city where they bought dwayne reed. manager thomas, i see him every day. i do regard it as my store. i like how they're going global with the big european pharmacy chain. but to a certain extent the company is still licking the wounds. that's why they extended the contract with caremark. so here's the bottom line. if you own rite aid, terrific, congratulations.
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but since the stock is now trading at almost the same valuation as cvs or walgreens, start playing with the house's money and swap into cvs because they're the better drugstore to own. let's take a question. >> boo-yah, jim. good to be here. i'm alex from new jersey. i want to know what's going to happen with myriad genetics after the supreme court ruling. >> i don't know. we're trying to figure it out ourselves. sometimes it's better to say it happened so fast. all day i have been saying i got to get to myriad genetic, but it's like an honest show and i did not get to it. i got to do the homework. it was kind of stunning. we were talking about it before the show and i said i hope no one asks me about myriad genetics, but i don't know the answer, but i'll come back. thank you very much. how are you? >> hi, boo-yah, jim.
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i'm tyler from villanova. >> go nova. >> i saw you there. it was great. >> it was a good show. we had such a good time with that show. it was really fabulous. >> so my question is about sprint. >> sprint? >> it's going with softbank. do you see value in the long term? >> yes, i do. because of the way my friend david faber talks about this, i'm proud of the work he did. because it's better than everybody else's. print, tv, doesn't matter. but there's what's known as a stub. you'll tender the sum and get back a stub. it will drop the stock. don't be confused. the combination of the two, sprint is nationwide, you keep it. i might revise my thinking if dan hesse ever leaves the company. he's notre dame's own. i do like him. thank you. how are you? >> boo-yah, jim, great to be here. >> i know it's a tough day in new york, it's busy and rainy but you got here. >> i'm sam, i have a question
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about michael kors. >> where are you from? >> new york. >> michael kors. >> the stock jumped up on a higher earnings report but has seen a pullback. i was wondering what your thoughts are for the short term? >> two things are going on. one, a rumor all day. a rumor that the quarter -- this quarter is weak. they just reported so i don't know how they can possibly know that. but second there's this kind of like tiffany's going down. the high end -- i like michael kors. i'm sticking with it. it's family affair night. we want to make sure you get a clean bill of health. at these levels, i think cvs is the better drugstore to own. much more family matters coming up later in the show. coming up on a special edition of "mad money," it's a family affair. it's the final match-up between companies from san antonio and
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miami. and tonight, a showdown between two stocks that have been riding rough seas. carnival cruise lines and cloud play rackspace. which least valuable player should you bench from your portfolio? vo: traveling you definitely end up meeting a lot more people but a friend under water is something completely different. i met a turtle friend today so, you don't get that very often. it seemed like it was more than happy to have us in his home.
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so beautiful. avo: more travel. more options. more personal. whatever you're looking for expedia has more ways to help you find yours. you hurt my feelings, todd. i did? when visa signature asked everybody what upgraded experiences really mattered... you suggested luxury car service instead of "strength training with patrick willis." come on todd! flap them chicken wings. [ grunts ] well, i travel a lot and umm... [ male announcer ] at visa signature,
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every upgraded experience comes from listening to our cardholders. visa signature. your idea of what a card should be. ♪ welcome back to our special "family affair" edition of "mad money." all week we have been running
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our parallel version of the nba finals, pitting companies from san antonio, the home of the spurs, against stocks that are based in miami, just like lebron james and the heat. so far, we have been searching for the best operators in each town, but tonight, we're not doing it that way. we'll do it differently. to put it in basketball terms we're taking the least valuable players from san antonio and miami, then having a sell block style this thursday face-off to see which is worse for your portfolio. we're pitting one nonstarter from the land of the spurs against a bench warmer, a swimmy from the heat. so who is the least valuable player based in miami? i think that singular honor has to go to carnival cruise. here's a giant cruise line operator, doing an effective job at making sure no one wants to board a cruise ship again. they stumble into big headline grabbing disasters.
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back in february, remember the triumph caught on fire and then spent five days adrift off the coast of mexico, no power, not enough food, and so much sewage that people called it a floating biohazard. this happened barely a year after another one capsized in italy. and at this point you have to wonder if these accidents are an annual occurrence. when the debacle happened it, it tumbled down. at the time, the floating biohazard would ding their earnings per share and we have to underpromise and overdeliver on wall street. in mid march they cut their four-year guidance from $2.24 down to $1.80 to $2.10. last month they lowered their
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earnings forecast again, taking it down to a $1.45. not only have prices come down, but as the ceo jerry cahill said on "squawk box" they're spending aggressively to get their ships up to snuff. >> basically, it's not a safety issue, but what we're talking about because all the ships have and continue to meet all safety standards. what we're doing is going above and beyond. the real dollars that are being invested are dealing with the comfort issue. not with the -- the fact on the triumph a lot of guests were subjected to a lot of discomfort. >> yes, they were. >> so we're trying to deal with that issue. it's not a safety issue. >> how about san antonio? do they have any companies that can rival carnival for least valuable player? in my opinion, they have a stock that believe it or not is even worse, we're talking rack space
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hosting. when we talk about cloud computing and money it's based on the companies that provide software as a service. they spend less on servers, it's good, it's cheap, saves money. that's the hot part of the cloud. rock space is the other side of the cloud coin. they don't have proprietary software. instead, they're in a commodity business. they're reselling data and leasing server and networking equipment to companies that use the cloud and need to get their computing power from somewhere. it had been growing very rapidly, but when a turbo charged momentum stock disappoints, it can keep getting crushed and crushed for years before its valuation comes back to earth. they reported a dismal quarter where numbers came in much lower than expected, which sent the
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stock plummeting from $75 to $60 overnight. ever since then it has been in free-fall. then in late february, rack space had cut -- had to cut pricing for the cloud bandwidth and content deliver services by 33%. a month ago, rack space reported another hideous quarter. it's become a serial disappointer and the stock dropped from $52 to $39 again in a single session. they're trading at $34 and change. i just don't see things getting better for these guys. in fact, it can get worse. they're still far from cheap. the stock sells for 40 times next year's earnings, and that's way too expensive. they have lost their mojo. it's kind of sort of what's happening here. amazon is in this business too. and just this week, amazon announced an 18% to 28% price
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cut where they compete with rack space. going up against amazon and ibm, getting caught in the cross fire of dueling giants, that's a license to be riddled with bullets and short falls for many quarters to come. here's the bottom line. i think san antonio's rack space hosting is far more dangerous than miami's carnival cruise. carnival has no real reason to go higher. believe it or not, it's been a great company. but at the same time, they have a healthy 3% yield. even with shoddy execution, i just don't see carnival going that much lower. hey, consider that a win for the heat, because they're actually owned by mickey arison, ceo of carnival corps. but rack space, i think it has room to go a lot lower which makes rax our least valuable
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player and gives the home of the heat a classic sixth man victory. stay with cramer! coming up on a special edition of "mad money" -- it's a family affair. experience the nonstop excitement as cramer answers stock after stock face to face on the "lightning round." ♪
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[ roars ] ♪ [ roars ] ♪ [ roars ] ♪ [ roars ] ♪ [ male announcer ] universal studios summer of survival. ♪
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"lightning round" is sponsored by td ameritrade. now it is time, time for a very special "lightning round," "family affair" style on "mad money." that's right. take your questions. sell sell sell. play this sound and then the "lightning round" is over. are you ready skeedaddy? time for some "lightning round." what have you got? >> boo-yah, jim. we're from lubbock, texas. >> holy cow. >> my two children know that when "mad money" comes on no
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more sponge bob square pants. >> that's a good call. >> what do you think about chewy's holdings? >> it's too highly valued. a very expensive stock and already up too much. i'm going to throw in bloomin' branch. thank you. yes? >> boo-yah, jim. i'm donna. >> i'm lauren. >> cecilia, from maryland. >> fantastic. >> i have a quick one. barnes & noble, should i pitch it or keep it? >> we saw what happens with best buy, they're the last game in town, i think it's okay. >> i'm tanya from ukraine. my question is, given the current worries around the global economic environment, what's your opinion on citigroup? >> i want to buy citi. michael korbeck is doing a terrific job. he's probably in ukraine. he's like in a hundred countries. i think the situation is good. a lot of people are spreading bad rumors, i think they're not true.
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i think citigroup is very undervalued, i want to own the stock. yes, sir? >> hi, i'm zach from detroit. detroit boo-yah for you. >> i'm going to give you a gm boo-yah. >> awesome. my question is about gigamon. they had a great ipo. they're down 8% today. >> that's your opportunity. it has both -- it has both actual profitability and accelerating revenue growth. it's going to be one of the best ipos i believe for 2013. yes? >> matt and gavin from new york city. on this rainy day, we are helping our family offices and we have a question for you today about utilities. >> a lot of our family offices and our high net worth individuals we advise they're looking to getting out of fixed income and come back into the equity markets. we have contracted income and what do you think about a duke energy? >> i like duke energy very much. i read a piece that said that
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duke, if it went just -- give you more, i think it's a steal. utilities -- that was a very big move. i think you're okay. duke, thank you. oh, wow. big crowd. what's up? >> boo-yah, jim. >> we're the quinns and the meyers from doylestown, pennsylvania. we are huge fans. we have -- we even got our license plate that says boo-yah. >> i love that. i have a horse named boo-yah. >> ethan has a little shark he wanted to add your collection. >> okay. >> you have the bulls and the bears. we thank you, jim, because you're a huge advocate for the little guy. >> sure do try. >> you keep the sharks at bay. we really appreciate it. >> thank you very much. >> thank you. >> that's it, no stock? >> how do you think about under armor as a stock? >> i think it's buy. we were trying to think what to replace nike with. i thought under armour was too expensive, but it's a good stock, i like it. and that's the conclusion of the "lightning round."
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>> the "lightning round" is >> the "lightning round" is sponsored by td ameritrade.
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♪ we have got our whole cramerican family in the house. let's see what questions they have. let's quiz cramer. who's first? >> i am. hi, jim. i'm robin from new york. i love you, the show, i love stocks. i'm an action alerts subscriber and if you're single i'm interested. >> oh! no, i better not. >> okay. but here's my real question. i'm also an insomniac and i'd like to know what are your hobbies, what do you do for fun other than answer tweets, listen to conference calls and read research reports? >> um, you know, i love to garden. i love to fish. i like to read history. i'm fixated on world war ii. i think i try to read every single new book that comes out. that's my pleasure. thank you very much. >> thank you. >> yes, sir? >> hey, cramer, jim from new
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york. with mike ermentraut out of the picture, what roadblocks do you see in the way of further growth for heisenberg llc? >> remember when we had heisenberg on, this is in reference to breaking bad. he compared his empire to apple. and i've got to tell you something, i think google is coming in and killing him. there you go. yes? >> hi, jim. i'm anna from new jersey. i have two students at wash u in st. louis just starting to invest. >> fantastic. >> how do i teach them to hold the earnings? they think it's a short term winning -- >> you have to tell them look, what do you think would look good in 2015? that's why i like celgene. that way if they say, you know, if you tell what will look good in 2015 they will hold it to 2015. listen, what do you think looks
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good two years from now? that's the way to do it. >> thank you. >> jim, we bought general motors stock in 2011, it's up 45%. the question is when do you sell a stock? >> general motors is going to have a huge year and i think china will come back. i think i'm the minority in that. i think it's a much better company. i would not sell this until they pay a bountiful dividend. i'm not kidding. i like ford more because i think europe is doing better for ford. they're both good stocks, congratulations. yes? >> hi, jim. scott and laurie from rochester, new york, by way of alaska. my wife has a question here. >> yeah, jim, i was wondering have you ever thought about traveling or have you travelled through alaska and have you done any research on the gold mines up there? >> i absolutely love alaska. i was up there, i visited the prudhoe bay to make sure they're not polluting, they're not. there's deer all over the place. i love alaska. i like alaska air. i think that's the way i would play it. i think you're in great shape up there.
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anyway, stick with cramer. coming up on a special edition of "mad money," it's a family affair. analyze this. every family has issues. tonight, dr. cramer is here to help you solve the financial ones. stick around for some family therapy that could help you create wealth for generations to come. ♪ so being an advertising
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[ roars ] ♪ [ roars ] ♪ [ roars ] ♪ [ male announcer ] universal studios summer of survival. ♪
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dr. cramer is with a patient right now. please leave a message. >> all right. we've got families from 13 states in the studio today. after the wild market we have been having i've got to prescribe some family therapy. maybe an unhealthy attachment to a stock, like a blackberry and well, the doctor is in the house. let's talk to some families and start the healing process. you're first. state your names and what do you need? what are you here for? >> hi, jim. i'm theresa from edgewater, new jersey and this is my daughter mckenzie who is 9. she has a business that she runs, a lemonade stand that she's been running for three years. last july 4th she worked all day. after she paid her two employees and her supplies she cleared $350.
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>> $350? >> in a single day. >> you don't need therapy, but there's all right. he's deal with it. >> i was going to ask how should i expand my business? >> how should you expand your business? congratulations, $350 is unbelievable. big boo-yah to you. i think first the way i would do it is -- i think this is what companies face all the time. do you expand the business or take some money out of the business and give yourself a dividend? i would take 10%, $35, and put that in the bank. go for better signs, better table, more employees, have a couple of corners. not just one corner. try to get a monopoly on the corner. the government is never going to investigate it and tell us what kind of lemonade you're using. or does mom make the lemonade? >> we have three different kinds. we have ice pops. like she keeps expanding her offerings. >> i'm going to tell you to buy general mills. that's what i'm giving you.
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they too are very good at the food business. and congratulations and best wishes. next up, how are you? >> good evening, dr. cramer. >> thank you very much. >> larry from boston and my daughter jo from new york. >> hi. >> boston -- red sox/yankees. that's difficult. >> this was from the first interleague play, red sox and the phillies. >> thank you. one time is doing quite well and the other team we won't talk about. >> don't ask who won. >> exactly. how can i help? >> jim, we have a situation with a family dispute, friendly, but some of us in the family wish to keep the principal very carefully protected in the retirement accounts. which i know you treat very conservatively. >> yes. >> but others of us, the certifiable cra-maniac --
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>> i like that. >> wish to expand the principal with a little bit of income so that we can retire eventually and maybe even leave something. >> i would like to spend some money. >> let's opine on some stocks here. >> we'd like to know what percentage of the retirement account should be in the boo bonds and what percentage should be in high dividend yielding stocks even given the craziness? >> sure. longevity and a belief that there's not a lot of value in bonds right now makes -- if you don't mind, can i ask your age? >> sure, i'm your age. >> then we're going to live forever. >> that's for sure. >> i think you should be 80% in higher yielding. we can always cut that back if interest rates go up. i'm giving you an 80 to 20 ratio for stock to bond. all right? >> thank you.
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>> thank you very much. and nice to meet you. "mad money" is back after the break. oh, he's a fighter alright.
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since aflac is helping with his expenses while he can't work, he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪ you got it! you got it! yes! aflac's gonna help take care of his expenses.
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and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at [ male announcer ] see what's happening behind the scenes so you can capture your receipts, ink for all business purchases. and manage them online with jot, the latest app from ink. so you can spend less time doing paperwork. and more time doing paperwork. ink from chase. so you can.
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to everyone here in the studio, and to all of you watching at home, thank you so much for making me a part of your families. i'd like to say there's always a bull market somewhere. i promise to find it just for you, right here on "mad money." i'm jim cramer. i will see you tomorrow. ♪
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"american greed"... lee farkas is a fast talker and master manipulator. >> lee was like a cult leader. he had the charisma of a gatsby. >> narrator: he invents fake loans to make his fortune, and funnels millions to support a fast and fabulous lifestyle. >> lee farkas turned into a very big fish in a very small pond. he had a jet, houses, expensive cars. >> narrator: and he levels anyone who dares to question him. >> being "farkased" -- it was the worst kind of domestic dysfunction.


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