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tv   Mad Money  CNBC  December 18, 2013 11:00pm-12:01am EST

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but it doesn't usually work that way with health care. with unitedhealthcare, i get information on quality rated doctors, treatment options and cost estimates, so we can make better health decisions. that's health in numbers. unitedhealthcare. >> my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make a little money. my job is not just to educate you, but entertain you and call me at 800-743-cnbc. let me see, we're supposed to sell stocks like crazy. >> sell, sell, sell, sell! >> when the fed is helpful in keeping interest rates down.
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we were supposed to be in a panic sell-off mode, right? the market plummeting instantly and the fed slowed down the bond buying? so many allegedly intelligent people have been yelling this from the rooftops for years and i've accepted it as conventional wisdom. why did stocks rally beautifully on the news that the fed is starting to cut back on all of that bond buying? the dow soaring, and the nasdaq jumping 1.15%, simple. the fed knew what it was doing. because ben bernanke knows what he's doing. because in this one case, the one rare case we have a part of the government smarter than the people who trade stocks and bonds for a living. we might have to endure endless attacks from ben bernanke and the president and the policies that hurt growth. we can digest the endless slagging of this outgoing fed chief for creating balloons and the disciplines that so many
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ideologues dogmatically think are right. however, in the end, though, and today is the end, the last meeting of the ben bernanke era, he got it right. it was the critics who got it wrong. with this rally in the face of common sense decisions to cut back on asset purchases, the economy and we have the reason not to own stocks that one day the fed will begin to slow down as bond buying and it was fabulous, plus the worry is now behind us. we saw today a glimpse of the future and they tried to prop up the bond market, and they know the economy is growing enough that the fed doesn't need to keep pumping in steroids and rates are still going to stay low perhaps to 2015 and beyond. bernanke confounded everyone. in true cartoon fashion, bernanke was indeed smarter than the average bear. let's go over his tenure. two bernankes. there was an initial bernanke who was in august 2007 and he had been taking rates higher in lockstep and going in serious overkill and not realizing how it was part of the bond market
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bubble. he reali asset prices were plummeting, that he was wrong in not seeing the serious recession in hand, he switched everything. he admitted it was wrong and went all in with ultra low interest rates and bernanke being allow ultra low rates and the 401(k) to recover. he wanted that, and he knew the low rates could possibly make it possible to get rid of expensive debt and start hiring again. he knew it. he knew low rates would help highly leveraged companies staying afloat and would counteract president's dud of a stimulus plan. after he got out of the recession, bernanke recognized he had to use the ultra low rates to keep him there to make up for the lack of hiring and business expansion caused by washington's inaction on the debt ceiling. he understood the environment of perpetual crisis created by elected leaders would be on lit
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what he tried so hard to inspire with super low rates. he persuaded the bank to take their rates down to ultra low levels and he threw out a financial lifeline when it looked like there was a depression. he's more responsible for the european comeback since general george marshall. what he thought was stupid, reckless and even evil. throughout the period he took the counsel of almost no one. he wasn't going to let 1937 repeat itself here and the central bank got too hawkish. he wasn't going to let the german experience of the 1920's repeat itself either, because he knows how that ended. he told you exactly what he's going to do. none of that opaque nonsense. he did everything he was going to do and it worked. it is amazing, even today when only 40% of the managers thought he would be tapering, despite everything he said he would do, because he's endlessly misjudged, because he's always on the right thing for markets,
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even as many people think he always will be the wrong thing. we had a rally today, meaning another rally that can occur now that the big bad event is behind us. of course, i'm being facetious. it was a good event, just like so many other occasions when he takes action. buyers now recognize there is nothing, at least on the calendar, left between now and dec. 30 first that can stop this rally. there is no reason not to buy and plenty of reasons to buy, including under investment in the beginning of 2014 and the need to show bullishness by having 100% investments in stocks so your shareholders can see that. the statements that rates will stay low longer than people thought is an imperative to buy bonds and sell more stocks. barnaky is taking away any reason not to own equity is. i'm not surprised we didn't really work. the most important take away is this great man isn't considered great at all. he's like a deck of 400 hitter who gets booed if he strikes out. he's like a coach who wins game after game even if some of the winds are downright sloppy, and
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he's catcall that the post-game press conference. and think a lasting legacy will be how the heck did people not see how right barnaky was well he was taking his actions. why didn't people see it contemporaneously? this guy is a modern-day van gogh. don't touch your ear. what was so hard about recognizing all the tremendous things he's done to get the economy moving? was it because he's a mild-mannered, non promotional man in an era of bombastic and spiteful politics? was it that he never took any credit for anything because as long as unemployment is high there is nothing to take credit for? was it because no one lynn, chris evert championed him and obama pushed out the door instead of thanking him for what he couldn't do, help the economy along? i know when he kept raising rates i went ballistic about it, but he changed course. i embraced it. it's been no fun to champion the guy and i am acutely conscious of that. by backing this man wholeheartedly, i find myself on twitter, thank heavens there and only 140 characters to bad mouth
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the. today's ravi is still one more repudiation of ben's critics, not that they would know the difference. here is my bottom line. thank you very much for all you've done to help get this great country back on track. tremendous job. we'll take it from here. kurt in connecticut. kurt? >> hey, jim. how are you doing? doing a great job. what do you think about frontier communication with at&t? >> fool me once, fool me twice and three times, enough already. i do not want you to own that stock. don't like the wire line business. ben bernanke, you got it right. thank you! "mad money" will be right back. coming up, best breaks. splitsville isn't easy, but it can spark serious profits. that's why cramer's calling out the names that could be better off alone. don't miss his take on who should separate. and later, stocking stuffers. cramer's getting you ready for the holiday hustle by picking out some of his favorite stock selections for a prosperous new year.
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tonight it's a tech two-shot. these chipmakers are banking on the mobile movement, but one special gift may set them apart from the competition. plus, natural progression? a growing portion of the population is embracing organic food and strolling past the old titans of the grocery aisle. so which brands are really cooking with the fresh crowd? all coming up on "mad money." >> don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer #madtweets. send jim an email at or call him at 1-800-743-cnbc.
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all year i've been talking about one of the most reliable ways for companies to create value and it's something that i know so well there's an entire chapter of my new book "get rich carefully" to this concept. i'm talking about companies that
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break themselves up and split. split into pieces. i'll explain why this process works so well, because it's bound to happen many times in the new year. first of all, the reason i keep pushing these break-up stories is it's a proven value creation. when you have a conglomerate of sectors in the economy, wall street doesn't know what to do with the stock. we now live in a world where the professional analysts all specialize in particular sectors, like doctors. they don't have the expertise to recommend stocks that are only partially in their comfort zone. how could an alcoholic beverage analysts cover the old fortune brands before the company broke itself up, because not only had a big liquor business, it also sold office supplies and home furnishings and golf shoes? the alcohol analysts couldn't cover the liquor business when it was part of a larger company, but after the breakup was able to gain sponsorship on wall street, which can be a very big deal.
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see, what this and pretty much every market really loves are stocks that could be considered pure plays. we may acts like money-management game, but the reality is people who run publicly traded companies need to make things simple for the hedge funds and mutual funds and big customers as possible. a drug company with a fast-growing medical device business buried with a slow growing form of business is going to get ignored in favor of a pure play if. a food conglomerate with a fast-growing international division will get a valuation more like a slow growth domestic play because it's hard for investors to handle any complexity at all. but break up these companies, okay, separate them into two or three entities, and the parts will almost always end up serbian worth far more than the hole. the fact is when companies break themselves up, there has also been staggering the positive overtime. a chief executive who splits his company is a guy who is basically saying look at me, look at these terrific bite
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sized, easily understood company said. don't you want to one of these in your portfolio? nenad what happens in the economy or what the fed is doing, these corporate to divorces create enormous value, and a great thing about breakups isn't that they make money, but that they do so in four easily defined stages. you catch a real break a story and you could have a fourfold win the. the first victory comes before anyone even knows anything about a breakup, as the market simply speculate that one might happen, sending the stock in question higher based on the behind the scenes chatter. then the second of higher occurs with the actual announcement of the breakup. the third stage of the rally comes as soon as the soon-to-be split of stock creeps toward dissolution, and the fourth games, after the breakup itself when the various components split into different publicly traded stocks and they pick up new support from the analyst community and that sponsorship that i love so much. no one will be distracted by running multiple disparate businesses. they can be laser focus on one
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industry. every stage of this before festus could be extremely lucrative, providing you have the patience to go along the entire ride. we saw this four stage process play out when kata kosta looks split into conseco for exploration and phillips '66 for reminding and marketing. with gas stations, we saw when abit labs spun off its drug business. we saw that when fortune brands split up into liquor and home and security for home building supplies. that fortune brands has been an amazing stock. but it wouldn't have been buried within the confines. all these breakups have produced a fantastic game each of the four stages. now that the broken up, still like all the companies, but the most money can be made by getting in on the action before the potential breakup is event announced, looking for something that might be. when it is still a glimmer in someone's eyes. you have to identify cats and dogs companies that can clearly
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be worth more if they broke up into more distant your place. the best example is the old fellow morris. it started way back in 2007 as it gradually broke itself up into a food company, craft, a domestic tobacco play and international tobacco click, philip morris international. consider how much value this brick has created and you'll understand why this is an empirical analysis. when the company got the ball rolling back in 1997 it had an evaluation of $175 billion. $175 billion was the whole company. fast forward to today. philip morris international has an enterprise value of $160 billion. it's worth as much as the entire combined business was and 2007. craft hasbrouck in itself again. those two companies have an enterprise value of $115 billion and lt bria has a price of $85 billion. add up these component parts of the old lamar sanders you'll see
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that the value has doubled, more than doubled lately, than the value of these pieces. same company split into pieces doubles. so how about some potential breakups that you can catch down the road? tonight at 1 to tell you about two of the ten possible break stories are recommending get rich carefully. the first name has all the necessary components of a successful break a story, and that name is a real laggards, merck. these days merck stock has become your classic slow-moving, big pharma dinosaur. the company doesn't get nearly enough credit for its incredibly deep pipeline or it's terrific diabetes franchise and it's great vaccine business, not to mention its groundbreaking anti psychotic drug that causes much less weight gain than the competition. that's a big reason people have to take these drugs go off the medicines, because of the weight gain. how can work to get credit for all the things it's got going
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under the corroded to of the company it is now? it needs to follow the same game plan that pfizer used when they spawn off their animal business. merck can spin off its own animal health business and produce a 10% boggan the company's value and it can spin off its consumer division that generates nearly $2 billion in sales and gets the credit because it is buried within the colossus that his work. merck can use the capital to either boost the dividend, or to increase its buyback. altogether i think this rally could cause a 20% rally with just the stroke of a pen. that's what would happen tomorrow if they did it. the other potential breakup is a sleeper called applied materials. here is a semiconductor capital equipment maker that manufactures solar panels in addition to a display segments where they make equipment used to create liquid crystal displays. with the semiconductor business being recovered, i think the best way for applied materials
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to create value would be to break itself up, splitting off the solar as the remaining semiconductor business would be worth more. when i was writing the book the stock had spiked because of the deal with tokyo but now the deal seems to be falling apart. something is not happening that we don't know about because the stock is going backwards. the stock had spiked at 19 before going back to the 16. that means they need to start thinking about splitting the company up, merger or no merger. if the merger goes through and they've got a solar division, split off solar please. here is the bottom line. breaking up is easy to do and it creates enormous now you. something we've seen all year and that i devote an entire chapter to explaining in get rich carefully. if you want to profit from these breakups, get in at the speculation stage, before any breakup has been announced. that's why i like burk and applied materials as companies that will make terrific great stories. these companies can shrink to grow, an idea i predict dozens of other firms will increase in the years ahead.
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after the break i'll try to make more money. coming up, stocking stuffers. cramer's getting you ready for the holiday hustle by picking out some of his favorite stock selections for a prosperous new yore. these chip makers are banking on a movement and one gift may set them apart from the competition.
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if today's action teaches you anything, the lesson should be that you can't get so caught up in fretting about big-picture issues that you totally ignore the need to pick individual stocks. for years, years, intelligent people would say as soon as the federal reserve withdraws the life support system that is the bond buying program, the averages are going to get pulverized, crushed. >> the house of pain! >> the fed announces a gradual taper and what happens? the averages instantly rocket higher in part because the big, bad event is behind us. the fed stayed in character and committed to keeping interest rates low for a long time to come. so let's learn from this moment, please. you would have done a lot better if you had forgotten about the fed entirely and picked stocks that can thrive over the long term, and that's what i'm going
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do to help. all week i've been giving you the stocking stuffers, my absolutely favorite publicly-traded companies. i love the stocks so much i own them in my charitable trust. these stocks are the gifts that keep on giving, and i think they make fabulous presents for your children as we head into the holidays, because these names will teach them about the joy of making money in the stock market. that's better than call of duty. they're always shooting people in weird -- whatever. that's why tonight i've got two more stocking stuffers for you. this is sienna and not like the crayon. this is c-i-e-n-a and they have strong secular growth opportunities in front of it, as companies upgrade their data center infrastructure. ciena is the massive buildout of cloud computing infrastructure with the growth of network traffic that requires ever-higher speed connections that are managed by intelligent software. like video, think about that stuff. people are watching movies -- i
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had the guy from the movie theater chain today, amc, and we were both joking that you can watch more movies on your cell phone. you need ciena to do that. let me make this thesis even simpler, as more people migrate to the cloud, you need more infrastructure buildout to allow people and companies to connect to the cloud, and this is where it comes in. it has a broad range of products to support voice, video and data services. ciena sells to telco companies as well as it sells to cable operators and enterprises and governments. back in 2010 ciena acquired nortel's old ethernet business, doubled the company, increasing its product offerings and growing its customer base. since 1998 ciena's made 12 acquisitions and they've addressed the key needs of its customers including the telco companies in a cost effective way. ciena's products that accelerate the ability of the telecom service for improved deficiency
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and fewer blackouts and to stop service interruptions. it has an optical transport portfolio that provides better bandwidth and data center connectivity, and video transport. productivity after cloud and mobile and social, i think connectivity is next. ciena's bread and butter is its long haul networking business. transporting data over long distances and they make up the bulk of the revenue, making sienna a major player here. they're in an arms race against each other. ciena is the winner. meanwhile, the company is running a red-hot equipment cycle. so last thursday, ciena reported and i thought it was pretty solid. people didn't like them. the company had a 2-cent miss off of the 13 cents basis and people were really lulled into thinking everything was fine. it is fine, but the stock got
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pummeled, falling from $29, and ciena has bounced back since then and it is still trading below $22. you can buy, buy, buy the stock at a discount especially if there's any future weakness down the line. next up, i have another tech stocking stuffer with a terrific long-term story that's trading lower than i think it deserve in part because the company again, posted a not so hot quarter the last time it reported in october. remember, you have to find stocks that have dents in them right now because boy, everything else is at its high. i'm talking about xilinx, the semiconductor company that makes what are known as programmable logic devices or plds. these are chips that can be programmed and customized for each customer as needed, very different from the semiconductor with the functionality is built in and can't be changed. because you can change the programming on a xilinx chip, it makes it much cheaper than the competition from traditional semiconductors. hence why these plds are critical for a host of sectors. again, communications, data
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processing, industrial consumers and auto, you need to be able to see video on your phone. programmable logical device business is a duopoly. i know you don't feel that way, but alterra. and the only thing better than a slap happy duopoly like this is an outright monopoly, the justice department tends to crack down on those. they outsource the actual manufacturing of their chips because that's a low-margin business and they've been able to keep its gross margin above the 60% level and why the gross margin is 64 and 66%. i like xilinx product and the end markets. big reason why we own it for the charitable trust, but the stock has been a laggard. it's not up nearly as much as the sox index.
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that's the philadelphia semiconductor index and it trades at a discount to the group, even though i think this company really deserve to trade at a premium, and it almost always has. some of that is because cisco is one of the ailing customers. when xilinx reported in october, the conservative guidance on the conference call and the stock got pulled and they said they would overdeliver. led by moshe gabriel, he's a frequent guest. he's been showing up at all sorts of conferences, saying that business remains strong. i think it's contradictory to what he said in the last quarter, i think it's much better. it will hit earnings and revenue targets. if they can make those numbers going forward, i think the stock could have a terrific year in 2014. right now the expectations have been lower, ratcheted down and xilinx had a potentially explosive catalyst and it had the infrastructure spending that i was talking about with ciena as the chips are using telco equipment.
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the company has 70% market share in the programmable logic device segment and the buildout of 4g, and you probably have 4g all over the world. again, xilinx chips are used in the infrastructure. the stock was up nicely today, they have a buy back and i'll bet they've been using it every single day. even high-quality companies with good management sometimes stumble and that's what happened to xilinx and sienna last week. these are not broken companies, people. they were merely broken stocks and i like that. i see them coming back with a vengeance, last year, that's why they make ideal stocking stuffers for 2014 as we head into the holidays free now of any of the taper worries and ready to roll! steve in florida, steve! >> i want to learn about ingram
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micro. i've owned it for quite a while and they reinvented themselves, oh, i don't know, five, six times. they have a lot of new management. i just want to know, i know the street's got a positive outlook on them. >> if you like ingram then you have to love avnet. i always thought ingram was a poor second cousin to avnet and you're right, they have reinvented themselves, but avt is better. i can get raj in new york? >> a big queens, new york boo-yeah. >> i'll give you a skillman street boo-yah, all right? pet >> thanks for taking my call and the investor education you provide. my mom and i have been watching you since you were on kudlow & cramer back in the day. >> thank you. >> i'm seeing more and more use of medical records in outpatient and in-patient settings. i want your take on cerner. >> i like cerner. i have to tell you when athena health reported and they guided
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down and the stock dropped 15 points and then came back, what that told me is they would report a good number. i think cerna is a good buy. i would stick with it. and athena, i still don't get why it's at 131. still chipping away at the list. stocks that are gifts that i think can go along. this is general electric. johnson controls and they had an analyst meeting and the stock went down. it was a bullish meeting. bank of america and some people are worried down 4% in the last few days. google? next to consider, they are both buys. stay with cramer!
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bid it is time, it's time for the lightning round. [ indiscernible ] rapid fire calls. and then the lightning round is over. are you ready skee-daddy? jonathan in new york, jonathan! >> boo-yah from st. john's university. >> yes!
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hard working, what's up? >> glaxo, what do you think? >> i like it, the 52-week high and look at kfm and what happened to kkr? these companies have a lot of hidden assets. i like glaxo and let's go to -- i have to tell you, this one in particular, i'm glad you recommend it. can i go to colin in texas? colin? >> boo-yah. >> boo-yah. >> gamestop. >> the company did say in november that things would get better, and i want you to buy the stock at 150. let's go to jay in new york. >> boo-yah. >> boo-yah. >> opk. >> there's been a real raid in israel. the stock seems to go down really, really hard and they're piling on and trying to knock the stock down. i like the company. please, phil, come back to the show. >> eric in new york. eric! >> rptp. >> yeah, rptp. you know what i'll have to do? i don't know rptp enough. i just don't know it well
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to be able to opine. i have to come back. let's go to pam in minnesota. pam? >> i'm calling, i'm a second-time caller. i'm calling about dva. >> this is the reimbursement for kidney. i think it is in good shape. i know that this is a company that i think is very, very cheap on 2014 numbers. let's go to harry in new york. >> boo-yah, professor cramer. >> thank you. >> my stock is cvk. i've made a few bucks on it, and i want to know if you say -- >> it's a woman's retailer. if you made a few bucks in a woman's retailer, you want to schnitzel. let's go to michael in pennsylvania. michael? >> jim, boo-yah from central pennsylvania. >> central pennsylvania is probably split between the steelers and the eagles, and le'veon bell and mccoy get the nod. what's up? >> my question, is, jim, what do you think of qwest diagnostics? >> the quarter didn't seem that good to me.
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i think there are better fish to fry in the health care year. let's go to steve in missouri. missouri looks good today. >> jim, a big record high boo-yah to you. >> i like that. what's going on? >> calling about kmt. >> i got to tell you, kmp was hurt by mark west. these companies have to step back and stop dishing all of that equity. it does have a 6.93% yield and it is rich kinder, but i have to tell you something, we need to see equities stop being issued. i will recommend the stock but i can't be that strong about it given the deluge of stocks. and that, ladies and gentlemen, is the conclusion of the lightning round! the lightning round is sponsored by td ameritrade. coming up, natural progression? a growing portion of the population is embracing organic food, and strolling past the old titans of the grocery aisle. so which brands are really cooking with the fresh crowd?
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okay. it was a monster day ♪ hallelujah >> courtesy of the good old fed. as everyone was celebrating an
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up session, there are down days, too. you have to remember that. as we know, it's been an epic and arduous journey to these new heights, and so we have to remain focused on longer term themes for the next downturn. for example, you have a change of epic proportions in the food and restaurant industries. if someone is taking it by surprise, neither saw the revolution coming and they're just now wising up to it, and it's coming very difficult for them. i'm talking about the revolution in eating, the wholesale transformation of what we're willing to put into our bodies because younger people, the millennials, have figured out the dangers of the chain that supports the processed food industry, and they're dragging the rest of us their way, kicking and screaming as we go. i've been thinking about this incredible change pretty much constantly for some time now. big theme in get rich carefully, where i recommend in benefiting from the stocks for the long term. it's the type of secular shift
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that's sneaking up on the analysts because it's not something they're used to or even comfortable with, but it's happening anyway. something that is obvious if you read the whole foods annual, as i did in the preparation for sitting down with the company's co ceos on the occasion of the opening of the brooklyn store of the not quite venicelike gowanus canal expect and right up front is they're much more savvy about what goes into the food they eat than they used to be. they figured out the link about whole foods between diet and health and they're not going back to their old ways and it's something that the ceo of costco told us at that harlem store that he's made his terrific chain go all in on, natural and organic. he now recognizes that it's not just a fad. they have a major commitment to natural and organic. i feel fortunate that the execs who are surfing this wave recognize my keen interest in the wholesale shift from eating only what tastes good to eating what's good tasting but more
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important, good for you. but like many things about investing, i have to tell you something, i just got lucky. i got lucky here, people. i have two kids who showed me the way just like they did when they urged me to buy nothing but apple products way back when the stock was in the $50 and they demanded ipod in different colors because it was the ultimate in fashion accessories. i'm not fretting about apple because of the extrapolation from jabil, and its orders were down and i don't know how many orders are really apple's. there are a lot of other customers and i don't know if apple took the business away, nor am i concerned about china mobile that they don't have a deal with apple as some people were chattering today because i'm confident the previous press reports couldn't be as wrong as they sound. for the longest of times, one of my daughters was a vegan and the other a vegetarian.
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both had a revulsion to the modern-day chain. they would drive out of their ways for chipotle vegetable burrito which they regard as pure and organic as you can find when they eat out. they used to love the salad at darden's olive garden. classic, hold the chicken, 417-calorie salad from panera bread. they never drink soda of any kind, diet or regular which they will lecture you about if you flaunt a soda in their direction. they use brita from the tap, and tight a is an they don't like anythin cannedor frozen. and unless it's fresh, they prefer tofu to just about any other food except fruits and vegetables. in our house, tofurky is a delicacy and a tofu turkey worked just fine for thanksgiving a couple of years ago. listen to me, it's not my fave, but if you smother everything with enough gravy it's got game. my kids were the reason why i went to whole foods. i did so out of respect for their ethos and their beliefs. whole foods is their good housekeeping seal of approval. it must be healthy or they wouldn't carry it.
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i went to walmart in massachusetts and they wanted to pick up some rice cakes for a dorm. they didn't sell it. instead the very nice clerk took us to the aisle where they sold rice crispy treats made by the evil empire of kellogg. they've embraced natural and organic of late, hain celestial, but i don't know if my daughter will ever shop there for food again except perhaps with a gun to her head. which brings me today's general mills and it had inflation costs and currency fluctuations. you don't have to worry about that stuff. when i was growing up, general mills was the equivalent of what whole foods is for my kids. if it had a g on it i knew it was good for me and cheerios, lucky charms and trix was the cheap, convenient way for mom to serve me breakfast.
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wheaties was the breakfast of champions and we knew that from the athletes on the front of the cereal box who clearly liked wheaties or they wouldn't let that help. was there anything fresher than the green giant vegetables? they don't sell them other than the summer. you can buy them in cans or in the frozen food section for quick serve. general mills allowed us to have foods that were too expensive in another time and you can buy the stuff even when it was out of season and it was fresh. now think about it. my kids think these cereals are awful. just candy and no nutritional value and they regard it as expensive and suspicious precisely because you don't have to throw it away after a certain date. what do they put in that stuff to make it last, they wonder. surely nothing good for you. those athletic endorsers. buying vegetables under the green giant name means something
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that nutritional value is sucked out while canned or frozen and this is their view. they don't like anything from cans because of the preservatives in it and the nutrition is sucked out of it. frozen means bad, and don't get me started on soups. progresso which was the fresh version of soup, just represents another soup that pales in comparison with the fresh soups made at the supermarket. general mills allowed us to have good foods cheaply. these days, general mills is bad food expensively and that's why i look at general mills quarter and i say hold it, why the excuses when hain celestial gives us double-digit growth? because of goldfish, it's why i wonder about conagra and how good the growth can be as the time goes on. same with kraft. i mean, like, dad, what's in velveeta that it never goes bad? clearly, nothing healthy. it's why i fret about how coca-cola can reinvent itself at a time when diet and regular sodas are under attack by governments and the public.
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and the company, unlike pesco, doesn't have much else to fall back on. any one of these big food companies should bite the bullet and buy hain, if only to raise the price to earnings multiple even if it's a solution to earnings and the old brands don't resonate to the new generation of consumers and the new generation of investors, and i don't know how they can change unless they change. i know people are concerned that there's too much competition, and i think whole foods will pull away and if the demand for products are -- they make you want to have the good stocks because of the dividend yields and that won't protect them in a rising interest rate environment as the fed reduces and tapers. here's the bottom line. i say toss out the old and embrace the new, including those that sell them. it's just going to be more and more obvious over time, especially as the generation that revered these companies as cheap purveyors of good food dies out and the millennials take over the earth. jerry in washington. jerry! >> hey, jimmy. >> yo-yo.
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>> a seahawk shutout, i miss mark haines boo-yah. >> i miss mark haines, too, and i got to tell you that 12th man is goign to give fitz another concussion and that's why he's sitting and le'veon bell is in the lineup. go ahead. >> i believe it. the last time i called i criticized your eagles and you hung up on me. >> that was justified. that was justified. you have no right to come into my house and hit me with that. that's all right. i'm a forgiving fellow like gandhi. >> i was in hawaii about a year ago and just recently in florida, and i went into a ruby tuesdays in both locations and god, they got a nice salad bar and there are a lot of people in there, especially my age or your age, and i thought at $6 and change, i think i've got to buy some. what do you think? >> mick jagger said it right, good-bye, ruby tuesday! i mean, really, i used to love the salad bar at mine, too, and the next thing you know that closed.
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ruby tuesday is trying to reinvent itself many times and you know what? i think it's out of reinvention. out with the old, in with the new. the millennials are taking over the pantry, and maybe your portfolio. you know what i think you should do? i think you should join them. stay with cramer.
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when i first broke into the business at goldman sachs in the
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1980s i was in charge of tabulating turnover which was then known as the security sales department. it was my job to keep track of who stayed and went and knew the details of each departure. goldman sachs tried very hard not to lose anyone if it wanted to keep, anyone it felt it was good at, and during the time i did the tallying and the divisions records was perfect on that score. when i was first assigned to this project, i had no idea why it was so important to keep track about how few people left the firm. we were losing people left and right, but once i was in the fold i realized that the close observance of the number had to do with the tremendous cost of training people and how departures of good employees meant a total loss on an important human capital investment. goldman aspired to zero turnover because it spent six months teaching associates and they were deadweight losses to the firm. trainees were sunk costs and you couldn't afford to lose the good ones and it could hurt the profit and loss statements. few issues could be more
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loss. few issues could be more debilitating than turnover. teaching people better and offering them more benefits than you could get anywhere else. it worked. the firm was by far the most lucrative investment house and it still is now, plus it maintains its excellence in training people. john mackey and walter robb, co-ceos of whole foods at the opening of the brooklyn store. they talked about how their turnover was the bane of their existence because it hurt all stakeholders and the managers left behind with the customers and shareholders. paying people much more that than the minimum wage and the retail world led to a remarkable cost advantage not disadvantage where the goal seems to be to squeeze as much out of workers as possible. there is a big cost to the firm when people leave. i can think of only three other companies that have emphasized to me their desire to pay top dollar for associates while offering the best benefits packages, starbucks, chipotle and costco. training people so costs to the bottom line. all three like to promote from within and chipotle going so far
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to take the next stem up in a consistent management basis. costco pays the people the most and the personal underpinnings by the bountiful profitability and the most revered retailer alive has insisted to me over and over again that costco has become great and there's virtually no turnover and the membership card is the real cost advantage, and 30%, and 40%, and allowing the warehouse club to have the lowest prices. at a time when we're beginning to see labor unrest, it's important to point out that the most lucrative players in the business aren't debating how little they can pay. they were thinking how much they can incentivize their good employees before losing them. that's a huge secret behind the success of whole foods, starbucks, chipotle and costco. i know it seems counterintuitive, but they figured out how to have the of
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the investment cost and the more the companies are to their workers the bigger the bottom line. hey, you can call it capitalism of the human face. i call it success. stick with cramer.
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another "american greed"
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fugitive has been caught. eric bartoli was on the run for ten years, accused of running a $65 billion scheme and a total scam. don't miss his story with an all-new update on his arrest. congratulations "american greed." i am jim cramer and i will see you tomorrow! face of business success. >> he was a deal chaser and a deal maker. you know, he was a mover and shaker. you couldn't hold tom down. >> $8 million house out in lake minnetonka, i think the one in palm beach was $15 million. >> narrator: a local boy made good, who never forgets where he came from. >> we are a very caring company. that's one of our core values. >> this is a hometown guy who cares about his hometown, who cares about people losing their jobs. >> "this guy is the real deal. nothing to worry about." there seemed to be no reason at all to suspect that something


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