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tv   Mad Money  CNBC  September 30, 2013 6:00pm-7:01pm EDT

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higher. >> i'm melissa lee, thanks so much for watching. catch more "fast money" tomorrow at 5:00. meantime, special edition of "the kudlow report" tonight at 7:00. i will see you there with larry. don't go anywhere. "mad money" with 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 is always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want the make friends. i'm just trying to make you a little money. my job is not just to entertain, but to educate and to teach you. so call me at 1-800-743-cnbc. why weren't we down even more than we were today? isn't that really the question you got to ask yourself now that we're staring down the
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double-barrel washington shotgun of a government shutdown and a debt ceiling crisis? really, how were we down so little? the given that our precedent was on earlier this evening talking about the federal workers who will go out pay and how we are entering a height of irresponsibility moment for the federal government. >> the house of pain! >> let's ponder. let's ponder while we're barely down, believe me, 0.6 on the s&p barely down. nasdaq down a quarter% after being up 25% for the year after coming into the session, that's barely a sell-off at all. first we have to wonder whether there was something mechanical today. it was the last day of the quarter. i told you endlessly that the big mutual funds like to show you they're right about the market by owning the biggest earner. they don't tell you when they bought it you have the assume they're brilliant, clairvoyant even. hedge funds like to stand underneath. meaning they're bidding below the market. this happens. they don't like to give up the
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ground they've taken on previous days. i saw buyers flying in, flying in and bidding the market underneath when it opened ugly. they supported the stocks, created pretty rosy you when you consider the washington doomsday machine. there is also a chance that the market has gotten oversold. we've been down a loft days in the row. that means bargains are being created regardless of washington shenanigans. plenty of money managers have been waiting for a retreat, and now you got one. it's all about the way the market works. something i think on the eve of our 2,000th show tomorrow that you otherwise might not know about, because we pride ourselves on telling you that kind of thing. we pride ourselves on showing you how the process of investments has driven and impacts the actual stock market. what about substance and matter. given we're down 19% thanks to the debt ceiling debacle of 2011, remember that? 19% drop. we were down almost double digits before the fiscal cliff fix, and the real ugliness hasn't even started yet, my
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answer to that is yes. yes. sure, it's true that every single time i has paid off to sit through these washington dogfights. that said, what would be much smarter is to sell some stock at the beginning and then buy some back at lower prices in order to augment your performance. some might say given the fool me once, fool me twice, shame on you aspect of the washington fiascos, it's not worth going in and out, right? you can't get out. you can't get in, you can't do it fast enough. well, i don't know. i say that when you consider the twin nature of the obstacles ahead of us, both the budget shutdown and then the debt ceiling, the prospect of something prolonged happening here that could hurt the economy i think is far worse than the previous government smackdowns. maybe some people on the sidelines are concerned that we could get a midnight deal, that there are separate talks going on that few know about? i don't know. when i heard the president tonight, i certainly didn't think that. there may be fretting some of these people that will miss an opportunity to buy ahead of a shocker, a surprise deal that is actually good for business? i come back and say sure, if it
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were only one issue, if it were only the budget deficit shutdown, that would be one thing. but there is also the second punch, the debt ceiling. and there is no way such a fractious body such as the house of representatives would get it together to solve one fell swoop. especially some members of the republican to default on government bonds to prove a point, a point that our nation's profligacy must end. i'm not all that worried about missing out on an upside here because of a secret deal because i don't think one can occur, at least not this early in the crisis there is always more brinksmanship, more rancor than we expected at the beginning. therefore, making judgments the market could be wrong here. and even though my charitable trust made small buys, that's because the trust has a very large cash position and it has to use the weakness to replace what it sold on previous strength. in other words, the trust has sold so much already because when the fed decided not to taper, cut this relief rally which was fatuous.
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the reason the fed didn't taper is because ben bernanke is worried about the potential impact of the looming government shutdown and the debt ceiling debate on the economy. and there is going to be an impact. it's not going to be positive. so let's talk about the fed and how important this last move is in relation to what is happening in washington. first, the feds deal wrecked investment alternatives. where the heck else are we supposed to put our money? gold? gold went down today. hmm. you put it in real estate now that housing has cooled down and we know it has cooled down? doesn't that seem to be the wrong call given the speculate of data showing a slowdown and the break this the ever rising home prices? i think you're going to have to circle back to the bond market equivalent stocks again. it's what i saw. the options are pretty unpalatable when you think about it. i look at certificates of deposit rates this morning. get this. a three-year cd, it gives you 0.5% return. that's what you expect from a checking account balance. a five-year? .8%. how about kinder morgan yielding
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2.6. the cd rates awful. might have been different if the ten-queer had kept climbing, if the fed had tapered off its buys. that could make for an attractive return versus lots of real estate investment trusts. let's not forget also that this time the fight in washington has a different overseas backdrop. in 2011 europe was just beginning to roll over big-time and there was lots of talk about the potential for the end of the euro and the potential for spain to default. i remember how we talked end lili how the italian bond market was going to crush it. it's a little insane when you think about it. plus, our banks were joined at the hip with many of the failing ones over there and the central banks raised rathers not once, but twice. you can see not only was europe still major trouble, but there were big trouble in big china. we were dealing with the series of a very disappointing numbers from china there was a ton of talking about how china might be falling off a cliff. the economy was rolling over, see through building, see through building, see through
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building. sure we can have numbers like last time's china's pmi. that means the market responsible for 25% of chinese exports coming back. that's a much better backdrop. hence why many of the cyclical stocks actually did well today. they would have been crushed by the last two washington round houses because of worries the capitol would drag us down to the level of our troubled trading partners. so here is the bottom line. while i think the market is being complacent in the face of washington transgenerals, you know i believe this. i can understand that people might be less willing to sell stocks considering the dearth of acceptable alternatives for cash, or they recognize that washington has hurt us but not killed us before. and maybe they recognize that things are better overseas. i say you're welcome to feel that optimistic. but please understand that the downside risk at least for this guy outweighs the upside risk for now, and a better entry point awaits. how about wesley in florida, please. wesley? >> caller: yeah, jim. thank you for taking my call. >> of course. >> caller: this is what i want
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to know. i want to know multibillion companies, stock $60 a share, all of the sudden it falls down a few years after it falls down to about below $10, below $5. the stock i'm talk about is blackberry and amd. >> right. >> right. >> is this because of the ceos, the managers or what? >> blackberry had a very complicated structure. it was a closed architecture in a world where people like open architectures. it was viewed as being very secure, but at the same time you couldn't use it in sync with other devices. other guys came up with a better mousetrap. amd never had the best mousetrap. intel always had it. you had competitors that came in with better product and it wrecked them. this is not cereal. you can't come in with a better form of cheerio and expect cheerios to go away. this is tech. tech goes away. gordon in louisiana. gordon? >> caller: jim, thanks for taking my call. and put in a big boo-yah from
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the bayou. >> right back. >> caller: i have a question concerning mosaic and the current indication of the potash market. the share price mosaic has taken a tumble since the cartel breakup in europe. and i'm curious whether you think this downturn provides an opportunity for me and other investors. >> no, no. it doesn't have that yield protection that i like and i don't like the fertilizer market and i don't even like the ag business. and i fear there could be, believe it or not, an actual cut in the subsidies for ag in this country. the cartel has to get back for me to like mosaic. how about samir in indiana. samir? >> caller: hey, jim. thanks for taking my call. >> of course. >> caller: boo-yah from minneapolis, home of purdue. my question is on -- a zynga, a pullback and social media iranian stock. where do you think zynga is going from here, and do you think it's a takeover target? >> i don't know if it's a takeover target. you always hesitate to recommend
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a stock on takeover basis if the fundamentals aren't that good. but this fellow who is rung it, don mattric. it's not bad for a spec. why weren't we down more today? nasdaq was down barely a quarter percent. optimists have kept it higher. but remember, optimism is very good when we're lower. not that good when we're up here. "mad money" will be right back. coming up, welcome home? home values are on the rise in 2013. and so is online real estate company zillow. its stock has more than tripled this year. but is the boost just another bubble or could the latest acquisition take the stock to new heights? cramer's exclusive with the ceo is next. and later, new frontier? it's one of the top energy finds in america, and the companies investing here are strike black gold. find out which slick stocks could surge from thousands of new drilling points in the heartland. plus, let's make a deal.
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from investor activism at apple and netflix, to mma activities during some big stocks, the headlines are causing this market to move. what is the next big deal on wall street's radar? cramer fills you in, ahead. all coming up on "mad money." don't miss a second of "mad money." follow @jim cramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to "mad money" at cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com.
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what is happening with zillow, the online real estate information hub that helps people through buying, selling, renting, and even borrowing, remodeling real estate. here is a company that came public a little more than two years ago and has done extremely well since then. 20 months after the ipo, zillow more than doubled its web traffic and loan requests. there have been naysayers along the way, but until the recent quarter zillow didn't give them much to work with. surged from $20 to highs of over 100 this summer. but this in august the company posting a 30-cent loss, 19 cents worst than what was expect, the stock got hit hard, falling from 90 to 83 in a single session, and then zillow sprang back to the low 90s before getting hid again when the company announced the second offering for $82 a share. the stock rebounding to 100 beginning of september before selling off in recent weeks, down to 8. many even worried that the cooldown in housing cause beside i the spike in mortgage rates could hurt this company. i never entirely bought that
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argument frankly, and now it looks like housing is doing better than thought anyway. meanwhile, billionaire jame packer. the stock has been a battleground. but the bulls have been winning the battle, which is why we have to dig deeper. let's check in with spencer rascoff, the ceo of zillow. mr. rascoff, welcome back to "mad money.." >> hi there. >> do you know james packer? >> i have gotten to know him over the past couple of months. >> did he buy stock before you met him? >> he has been buying stock over the last year or so. but then after spending time with management, he bought even more and we're happy to have him as a shareholder. >> so he is a cooperative guy. he is not saying sheer how you company should be run? >> no. you know, we've attracted a lot of interest from australian investors because -- >> why? i'm sorry. other than manned dirks i don't know anybody down there. >> because there is a company in australia that has a very significant market cap as the online real estate leader in australia. actually, about $4 billion market cap. >> bigger than yours? >> bigger than ours on a country
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that is a tiny fraction of the size. i think international investors look at zillow and say you're the largest real estate website in the u.s. certainly over time you should be able to get a lot bigger. >> your company turns out because you have accelerating volume, it seems to have no correlation with whether housing starts have stopped or started. no correlation i can find. >> we're a media company. we sell ads, not houses. so of course you're a media company as well. yes, we are impacted somewhat by housing. be uwe're not like a brokerage. and therefore we're not as sensitive to housing. >> now, it would seem to me that one of the things that happened to your company is that you're evolving. and the street easy deal is one that the rap against you had been that there are some markets where your software doesn't work. street easy always worked with the mls of new york. there other places you have to do a street easy like deal or is new york the only place? >> new york is unique in so many ways including real estate.
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zillow is the largest real estate website in every place in the country except for new york. >> because you didn't do street easy, the conversation would be very different. why didn't my zillow work. >> and zillow works here. it's just called street easy. >> okay. now, you claim on your website that you have preforeclosures. how do you get preforeclears? no one knows how to get that? >> we have a million foreclosures. if you're behind on your mortgage payment, if one is behind, that information would appear on zillow. to a home buyer looking at homes in the community, that shadow inventory is really interesting information because they can see more inventory likely to come on to the market as the preforeclosures become foreclosures and then become listings. >> okay. we have a relationship with yahoo, yahoo finance. you have the relationship with yahoo that have made it that you're number one by far it would seem. how did that come about? >> zillow has powered yahoo real estate or homes for several years now. zillow is the largest website. we're a media company, and
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advertisers follow audience. so it's very important to us that we have the largest audience on the web. >> right. now, there was a point where i felt that the real estate brokers were gunning for you. when did it switch to when you became their partner? >> well, we've always been their partner. >> well, when did they start liking you? >> i think scale helps. >> okay. >> i think for most agents, breckers, and mlss and most importantly, home sellers, they realize they want their listing to be on the biggest real estate site in their community. therefore inincreasingly every day the industry views us as more friend than foe because they view us as a which to market their listings online. >> it's funny, because there is an outfit, jim citron, they're in my face every day, regularly saying that you're not making any money at all and it's a house of cards. i know there is a big short position. at what point do you think the shorts recognize you have a real business. at what point you worry they'd could be right about something? >> you know, shorts have had a hard time with zillow all along
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the way. >> because they think you're what? a building company? what is the misperception? >> i think the misperception is a misunderstanding of our total addressable market. >> okay. >> agents spend almost $10 billion a year on advertising. and if you include the rental industry and the mortgage industry, there is around $30 billion in and around spent in our category. and zillow is going to do less than 200 million in revenue this year. we're just getting started. i think that is the big misperception. >> spencer, you have always been very open with us. check it out. stay with cramer. >> coming up, new frontier? it's one of the top energy finds in america. and the companies investing here are striking black gold. find out which slick stocks could surge from thousands of new drilling points in the heartland. he's been bringing main street to wall street for years. and for "mad money's" 2,000th episode, he celebrated by
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planting the cramerican flag outside the new york stock exchange, calling all cramericans in the new york area, you're invited to be part of history tomorrow. log on to madmoney.cnbc.com for details on how to join us. twins. i didn't see them coming. i have obligations. cute obligations, but obligations. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors
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so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. which is...pretty much what we've always stood for. so i can reach ally bank 24/7, but there ar24/7.branches? i'm sorry, i'm just really reluctant to try new things. really? what's wrong with trying new things? look! mommy's new vacuum! (cat screech) you feel that in your muscles? i do... drink water. it's a long story. well, not having branches let's us give you great rates and service. i'd like that. a new way to bank. a better way to save. bank. your money needs an ally. boo-yah! after a day where stocks got pole axed courtesy of worries about the pending government
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shutdown, that unless we get some kind of unlikely washington miracle, it's going to go into effect tonight. it looks like we could be in for a real shellacking, i believe, at least until our leaders stop being partisan ideologues and make a deal. we know stocks get head and hit hard and then bounce back, particularly stocks less vulnerable to all this political chicanery. what should you be prepared to buy in the event of a washington-induced debacle? i like the domestic oils. the companies have been finding massive amounts of crude oil all over america. no amount of partisan bickering is going to make that disappear. it might temporarily drive down the price of oil, but that creates buying opportunities all over the space. that's why we've been taking a virtual tour through all the best recent oil discoveries in the united states. regular viewers know all about the bakken shale and the eagle ford. i told you about last week the permean basin. so new i'm going to introduce you to the michigan naiabrara formation mainly in northeastern
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colorado, though it spreads into wyoming, nebraska and kansas. we do think of it as a colorado shale, okay. now this is a discovery still in the infancy with many companies leasing for land and there is a lot of future drilling ahead. it has a bit of a spotty history. cramer fans about thee or four years ago started drill and then gave up on it. wow, we expect them be, but the niobrara acreage was not so hot. so if eog gave up on it, why don't we dismiss it out of hand? because it turns out this is very hit or misplay. it's spotty. we heard the same thing from chesapeake energy. it's incredibly variable. some areas are practically bursting with oil. others have very little. 10 where is the right acreage and who has it? the niobrar sweet spot is right near denver, colorado, in what is known as the denver julesburg basin. companies that drill there see
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some of the highest rates of return among any domestic onshore oil rigs, including bakken. right now it can generate a 100% rate of return, making they're so much money they can pay back the entire cost of finding and drilling for oil in just one year. let's start with titans, anadarko and noble energy. anadarko has diverse assets across the globe. as management says has said, it's the biggest domestic play right now. they have 350,000 achers with as much as 1.5 billion barrels of resource potential. and another 350,000 acres in the more remote areas of the shale. at the moment anadarko, which my charitable trust owns, is the most active driller in the area, 150 wells a year. that's a lo, people, in just the niobara alone. up an outstanding 25% year-over-year. liquid accounts for nearly 60% of the volume. best of all, anadarko is the
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parent of western gas partners, a partnership that helps them get their oil to where they can sell it for the best price. it's not land locked. how about noble energy? here is another global player with major niobrara exposure. noble is raptly accelerating its development program here. the company is drilling 50% more wells this year than in 2012. what does that tell you? helping is noble's acreage could be worth, do the math, $13.8 billion, which is pretty huge when you consider the whole company is valued at about $20 billion. that's staggering when you consider that noble also has some incredible assets in the mediterranean. how about something closer to a pure play? there are a bunch of smaller companies. first there is pdc energy. pdce, has assets in the rockies, and the marcellus. but the core is their 98,000 acres in the niobrar shell. they recently sold some non-core
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colorado assets. and now 54% of the company's production comes from oil and nat gas liquids, up from 35% last year. plus, pdc has some results from some of their pilot wells expected some time in october. that's it. pdc is only for speculation because its cash flow doesn't cover expenditures, you might hit with a capital raise that could ding the stock. we've seen that before. and then another bun, bonanza creek energy. came public a little less than two years ago. since then bonanza has doubled production, boosted reserves more than 20%. they have acres mostly in the niobrar. they upped their recount to four rigs, drilled 20 wells. up from seven they drilled the previous quarter. management expects to see a significant boost in production the second half. or something smaller, there is bill barrack corp., bbg. it's an exploration and production company focused on the rockies, 40,000 acres in the hottest part. a lot of people still question their acreage, but they've
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already had 16 strong well results and they plan to drill another 60 wells by the end of the year, up from 13 wells in the first half. see what i mean? hot, hot, hot. beyond the core operators you, have you a couple of companies further into the outskits, whiting petroleum, that's a bakken play. they also have 88,000 acres in the niobrara. in the past they didn't have the capital to exploit the area. now they have the cash to really develop their assets, which could turn out to be whiting's next major growth platform. last but not least, carrizo coil and gas. the ceo just came on the show a couple of weeks ago. they have 27,000 net acres on top of eagle ford shaele. they plan to drill 21 wells for 2013. no matter what washington does to sabotage our economy, and you know i feel they're doing that. i think you can count on our great domestic oil finds like the niobrara. anadarko, noble, the big boys.
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closer to a pure play, pdc. they're all growing like weeds because of the bountiful colorado-based shale. let's go to robert in california, please. robert? >> caller: ba-ba-ba-boo-yah, gyp. how you doing? >> real good. how you? >> caller: i'm fantastic. thanks or the taking the time to hear me out. long-time listener, first time caller out here. >> okay. >> caller: i'm calling about ticker hk, wanted to get your sense of whether or not this is a good entry point. the stock is down, i don't know 35% year to date? >> the stock has been terrible. floyd wilson, who has been a miracle man in the oil patch is the chairman and president and ceo, and i would say stick with them because he is so good. but it has been a house of pain, and i recognize that. i still believe in floyd bilz wilson. but this is one of those companies that is pure spec, okay. it's not meaning sell. it means as long as you go in recognize this ain't no anadarko. how about tony in maryland,
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please. tony? >> caller: yes, cramer, boo-yah. >> boo-yah, tony. >> caller: okay. i'm thinking marathon petroleum, mpc. i've been averaging them for a while. what are we doing with that? >> yeah, you know, they've got very good acreage in the eagle ford. that's the problem. i'm looking at the other marathon. this is the marathon that is the refiner. and the refiner is not good. we're not recommending any refiners right now because of the end of the glut in cushing. my bad. that's the refiner. all right. well see this pattern. stocks will get hurt and then bounce back. use the chaos to your advantage. discover the greatest of the niobrara. stay with cramer. tomorrow, kick off the trading day with "squawk on the street." live from post 9 at the nyse. >> our companies are not mickey
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if you caught a glimpse of our scoreboard today, you may notice "mad money" is about to click over to a pretty big milestone. yep, tomorrow makes 2,000 episodes of "mad money." 2,000. and to celebrate, i'll be doing the show from in front of the new york stock exchange. figuratively, i've been bringing you guys the wall street for years. tomorrow we're doing it for real, right outside the new york stock exchange. so come down, see how we've been putting out the show all these years. head to madmoney.cnbc.com for details of how to join us. and now it is time, it is time for the "lightning round"! cramer's -- >> buy, buy, buy! >> sell, sell, sell! >> play this sound and then the "lightning round" is over. are you ready? skee-daddy. ross in illinois, ross? >> caller: cramer, boo-yah from the windy city. how you? >> nice! how about you? >> caller: doing well. hey, i got to give a quick shout out to my fiance avalon and shout out to next season's mvp paul george. >> yes, absolutely.
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thank you. >> caller: but my question is for sandisk. what do you think than one? >> i think it's fine. it's old tech but has flash. i think it's in good shape. in terms of being able to trade up. let's go to susan in california, please. susan? >> caller: hey, jim, hi. i just want to tell you how much i value your expertise and information you share with us. >> thanks very much. >> caller: i love you, man. i own visa. i'm very happy wit. where do you see its price in the year? >> visa is one of my favorite stocks. now, you can hear people say wait a second, travel going to shut down because of a government shutdown. i think that's an opportunity to buy, not sell visa. it's a worldwide company. from paper to plastic, i want to buy it. let's go to ed in florida. ed? >> caller: yes, from southwest philly, jim. >> wow. hey, good to have you on the show. >> caller: yes, thank you. i watch it all the time. anyway, i'm torn between philip
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morris for a dividend stock for my ira portfolio. >> yeah, mo, altria has the better dividend. pm has the better growth. but you know what? imooh going to bless that. i think pm is a good buy here. let's go to dave in wisconsin here. dave? >> caller: boo-yah! >> wow, nice. >> caller: rapco medical will shortly have a new drug used by dialysis patients that replaces iron in the blood with nearly no side effects. it will be a very cost-effective for patients. this drug should be a game changer for rmti. jim, what do you think about rmti? i don't know rmti. it sounds like a pretty interesting story. but i think the stock says that we're not alone that the stock has had a big move. let me do some homework on it. let's go to vic in california,
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please. hi, vic. >> caller: boo-yah from california. >> nice to have you on the show. >> caller: you are a triple threat, entertainment, education and profit. >> thank you very much on our 19,999th show. how can i help? >> i want to ask about pandora since anal is now pushing i radio hard. >> right. everybody seems to be thinking that you can write off pandora. i think pandora has the momentum. i'm not going to recommend it. i think it's a cold stock. it's more of a tesla and netflix. it has people who love it so they buy it. can't recommend it. can't tell you to sell it. let's go to greg in illinois. greg? >> caller: boo-yah, jim cramer. how you doing? >> all right. how about you? >> caller: i'm doing good. i have a question. lng. i've been in it since it was $7. >> if that's the case, come on, we have to ka-ching ka-ching. some of it has been a huge win. we like it. it's been amazing. let's not get too greedy. let's go to don in florida, please. don? >> caller: boo-yah, jim.
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this is don in florida. >> hey, don. >> caller: last week you talked a lot about pharmaceutical stocks. my stock is isis. it has a strong pipeline and it deals with -- >> we like that. we like isis. we think it's really good. we've been behind a lot of these. that's one -- oh, let's go to doug in nebraska. doug? >> caller: yeah, hey, big old ba-ba-ba-boo-yah to you mr. cramer. >> all right. >> caller: i got a quick shout out to the guy i call the jim cramer from freemont, nebraska, mr. gilfry. >> all right. >> caller: i'm looking for some of your thoughts on 8 by, eght. >> international protocol. it has moved up lot. it is too hot for me. it is just sizzling. and that group is very tough at this point. it's moved up lot like a lot of the others. i'm going to hold back my approval. let's go to tony in south carolina, please. tony? >> caller: yes, send you a clemson tiger boo-yah. the stock is ntcs. i know they're coming out with
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another drug at the end of the year. in about 8,000 shares. do you i should keep going? >> no. i didn't know they had another drug coming out at the end of the year. i know we had mr. nader on last week. they have multiple drugs, multiple drugs coming out, which is why we like it so much. so i am going to agree with you. don't pin it on one drug. this is one that has a big product portfolio, which is why we have been behind nps pharmaceuticals. and that, ladies and gentlemen, the conclusion of the "lightning round"! [ buzzer ] >> the "lightning round" is sponsored by td ameritrade. he's been bringing main street to wall street for years. and for mad money's 2,000th episode, he celebrated by planting the cramerican flag outside the new york stock exchange. calling all cramericans in the new york area, you're invited to be part of history tomorrow. log on the madmoney.cnbc.com for
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details on how to join us. coming up, let's make a deal. from investor activism at apple and netflix, to m&a actives during some big stocks, the headlines are causing this market to move. what is the next big deal on wall street's radar? cramer fills you in, ahead. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪
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more and more now it seems like we're entering the age of the activist, which is not as fun as the age of aquarius or the age of walmart for that matter ball. heck of a lot more profitable. fund manager who take big stake and pressure them to take actions that unlock value for shareholders. they're using that money to throw their weight around. this is something we like a great deal here on "mad money" because with a few glaring exceptions, what is good for the activist might be good for you. that's why tonight we want to talk to a man who understands this stuff better than anyone else i know, the great david
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faber, my brilliant co-host, yes, he is snickering, but it's true of "squawk on the street," celebrating its 20th anniversary at cnbc. david, congratulations. it's very big. >> thank you. it went by very quickly. of course you've been around for a lot of it. >> cow howe can you be younger and look a little better? lose weight in 20 years? >> actually, i've just maintained. it's all about maintaining. >> but during this, there has been a fabulous evolution, david, in the sense you started, the beat was not a real beat. you waited until you got the press release. maybe you got it earlier. you have changed the beat. you get it. and you get it ahead of print. how did this happen? >> in terms of mergers and acquisitions? >> yeah. come on. we both the bulldog edition. >> there has been an evolution in reporting that i would argue in many ways is not great, frankly. >> what do you mean? >> because these days you're getting information in bits and pieces from so many different places. and much of it is not completely right. and so i'm almost going back in some ways in our work on the
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morning on "squawk on the street." i think when we discuss something, try to go back to the old model in a way that get it right, don't do anything until you don't know. and if it means waiting, wait and give people analysis and insight that can help them. >> it is true. people in the know behind the scenes. but david, you got to go with this, you got to go. do you have it? do you have it? and there are other people who don't care anymore there is no fact check. >> no, there isn't. >> it's extraordinary. >> it is. and kit be very frustrating. i'm the dean of m&a reporting. it can be frustrating when you know more about a story, yet your only move is to go and correct most of what has been reported previously. >> but there is a lot of people who trust you and know -- a lot of insiders trust you, right? >> yes. that's one of the benefits of being around so long as well as the relationships. >> so talk about the arc here there was a time when the idea that carl icahn, and you studied him for 20 year, could have a view with tim cook, not, could
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influence companies as big as apple? no. what the heck happen here? how can someone take a 1% in microsoft and get the ear of the company of what is going on? >> i'm very glad you're focusing on that it is an evolution of great significance. and have i lunch with bankers and lawyers all the time. >> right. >> i can't tell you how often this has come up lately where they're about to visit or had been visiting with the management or a board of a large cap company that is at least just wants to get filled in. who might be out there that might be interested, an activist, what would we do? what are the rules of the game. >> what if they just tell them to shut up? what happened? >> you know, it's boards paying much closer attention, and it is activists being better at what they do. and perhaps some, because, you know, we label them all broadly, activists. >> right. >> but a lot of them have different playbooks. and there are those that will be in the position for a long period of time, will identify
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the large shareholders who in active, but are frustrated and can convince management and the board that they're speaking on behalf of them as well. >> but we like -- but we figured there is no way that the board would ever agree. >> right. >> let alone the management to relational. you know, timken splitting up. how did they not just tell relation to go sell the stock if they didn't like it? >> yeah, that's a great example. and relational is one of those investors that will typically take a large position for a long time. and do a lot of work. saying sat microsoft. but it is amazing. the fact is, $2 billion worth of microsoft, you're still barely moving the needle. $2 billion worth of apple with carl icahn, you're not showing any top ten listsand yet he gets to sit down because the boards are taking it much more seriously than they did. and because there is a sense on the part of the boards that they are embracing a lot of thought about from the rest of the shareholders and if it were to go and you had to fight a proxy
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fight, you might lose at least a board seat. >> now, you broke a story today about aubrey mclendon coming back. here is a guy that owned a company that everyone thought was his, chesapeake, and he got thrown out. how did that happen? >> buzz of some of the i'd deals and everything. you covered this closely. it was icahn and southeastern. now, in that case, they owned an enormous amount of stock. so there it was kind of more old-fashioned. i don't remember the numbers. it might have been 20%. it was a big number. it still is a big number in terms of the percentage that was more along the lines. it was big chesapeake, but more along the lines of where we might expect to see actvich. hess where we covered that with elliott, that may be of a size maybe, 4, 5%, you can do it. now we're talking 200 billion, $250 billion, how is that even possible? >> i don't know. but if you weren't break it, i wouldn't believe it. frankly, i wouldn't believe it. you have done an unbelievable
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job. you have made a career and a path that no one else has made in our business. you are the best business journalist. >> you are way too kind to me. >> no i'm not. >> it's only because you have to sit next to me every morning. >> no, i'm empirical. david faber, 20th anniversary. stay with cramer. one man. >> i just want to make you money. >> eight years. tens of thousands of miles traveled. hundreds of ceos. thousands of callers. millions of your e-mails and tweets. it all adds up to mm2k, tomorrow 6:00 and 11:00 on cnbc. [ taps baton ]
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jim cramer, you're one of my heroes. >> i look forward to your show every week night. >> thank you so much for helping beginning investors like me. >> when you talk about the market, i just believe you're spot-on. >> oh, i love it. thank you so much. every night we watch you. i have learned and earned. not all government shutdowns are obviously created equally. if you hop in the way-back machine and look at the 1995 '96 clinton versus gingrich shutdown, so remarkable. almost no impact on the stock market whatsoever. remember there were actually two two shutdowns. the second ran from december 15th to january 6th. during the first shutdown, dow gained 2%.
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then proceeded to rally another 3% during the shutdowns. during the second shutdown it was unchanged. after that the dow marked a remarkable 40% run over the course of the next year. so you could argue at least in the '95 and '96 class, the government shutdown had a positive impact. looking back so we draw this conclusion. we had a lot of confusion in washington but we didn't bother to think that much about it. in those days we were very earnings centric and we totally separated wall street from washington. what went on in the capital was a total sideshow. interest rates on the ten-year did go to 5.6 in january 6. that's a significant and positive move. one could argue that rates went down because washington became disciplined about spending and therefore the shutdown had a positive impact on the budget which resulted in lower rates. but rates went back a year later. so i'm suspicious. back then, we really didn't think the way we do now. oh, sure, we were embarrass by our government for certain back
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then. we knew we looked bad to the rest of the world. but it didn't change the economic landscape all that much. we were in the midst of economic expand and riding the technology and jobs were fairly plentiful to 5.4% during this period. what mattered were the actual pieces of paper we traded, paper backed up by actual companies that had nothing do to do with the government. and we didn't have the s&p futures nearly as powerful as they are now. when you consider the period we're in now, you recognize that the companies are almost all hostage to the hostile dynamic in washington. unless they get taken over or they're selling into rebounding emerging markets, everything from health to autos to retailers, they all trace back to washington in some form or another. either through legislation because of the fed. it's not so much intrusion, it's total immersion. my take is history teaches us nothing. and we're stuck with a government gridlock, sell the futures and buy them back later ra. pretty much the opposite is of what he had back then. the clinton/gingrich fracas seems almost kuwait. not a fight to the death about
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government versus no government. it wasn't existential back then, which is why it's so darn hard to figure out when this will all end. stick with cramer. boo-yah, cramerica. "mad money" is quickly approaching our 2,000th show. why do i come in here every night? to level the playing field torque fight for you, to remind you that the american dream is alive and well that you have a fighting chance against the big guys. to celebrate our 2,000th show, i want to know why you, the citizens of cramerica watch. so i ask y2k? why is "mad money" important to you? >> "mad money" teaches me about all the fascinating american companies we have in our great country. >> boo-yah, jim cramer. i watch "mad money" so i can afford bodybuilding. >> you have change mid future forever. thank you for being here every night. >> show me. send me a buy. make a video, tweet it, share it on facebook. use the #mmy2k and we might just use it on the air. >> can i get a boo-yah!
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revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business.
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at bny mellon, our business is investments. how's that for an encore? managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon. look, i hope to see you tomorrow as we celebrate our big day. i cannot believe we've done 2,000 shows.
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right in front of the new york stock exchange. you can be there. we're going to start around 4:00. it's going to be really exciting. you're going to see how the show is done. see a lot of the people whom i'm always looking at around here. it's going to be really terrific. i always like to say there is always a bull mark somewhere. ings here's what you need to know. the shutdown is almost a foregone conclusion right now as the house is about to vote on another budget bill that the senate has already vowed to defeat, but there is one wild card if some moderate republicans may bolt from the rest of the party. we will keep you updated. meanwhile, president obama took to the podium at the white house late this afternoon to warn the

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