Audioburst Search

Mad Money w/Jim Cramer 10/04/18


My mission is simple to make you money. I'm here to level the playing field all investors. There's always a bull market summer and I promised to help you find it may have money starts now. Welcome to make money. Welcome to Kramer. Other people wouldn't make friends. I'm just trying to make some money by job census team, but educating teacher. So call me at one, eight hundred seven, three CNBC or tweet me action Kramer it's official. This has become a good news, bad news market, the Dow plunge, two hundred and one points today. Plummeted point eight, two percent NASDAQ nosedive one point, eight one percent. Because we got the best jobless claims number forty, nine years economies too hot. So people worried about the fed justify and they're worried that long term bond yields are spiking and might not stop here. When you have a sell off of this magnitude, you kind of have to wait it out a little. I'm not telling you panic, but you definitely don't want to be at the front of the failures. This is not the time to be hero at moments like this. You need some touchdowns to figure out when the pain is likely to end. So I'm here tonight to give you some guidance. I paraphrase Tolstoy and Anna Karenina all happy rallies or like every unhappy selloff is unhappy in its own way. In other words, every decline is different from each other and when it comes to this decline, I think it's too early to be really aggressive, although I think it's okay tomorrow. If we're down for down to start buying slowly, why not be more positive? I am worried about your fellow shareholders. They're your worst enemy straight here. Many of them are people with big profits. Renters who are just along for the. A ride, they don't want to give up their games. So what they're thinking given the damage is. That rising bond yields can do the stock market. Well, they're thinking it's only day one of the sell off and it's true. We should have been down yesterday. Rate yields were spiking what the heck was that while we're up? So I'm saying, be patient certainly pick again if we're down you pick but don't try to call the bottom second. This climb, we're time maybe some price. It's going to take some time for these week. Candid sellers get flushed out regardless of how low ego we just been up for. So darn long. Investors are only now getting so memo. Considering the strength of today's jobless claims figures I gotta be worried that tomorrow we spoke at hot employment number at eight thirty AM, and that could spur even more selling and speedy a benign opportunity. So with those caveats, what do we need to see before we can be more confident that this I'm happy so of has run its course, and you have to use it to buy ten telltale signs I want. I'm watching free you. Okay, I, this is a sell off. That's led by fag Facebook, Amazon, Apple, Nep. Listen Google. Now. Alphabet in the past. FANG has always pounce back, but only it doesn't pass until only after the obituaries and finish the coroner's inquest. The problem I actually read one single death notice for FANG today, and that's very big news fan bottoms after journalist, Bill oceans of ink about how group is outlived, its usefulness. We need stories, but how pace books the canary in the coal mine how industry sources say that Apple's buying fewer components, how Amazon's margins are being squeezed by the fifteen dollar an hour, Gabe, how European governments are putting the jackboots on alphabets neck. Once we start getting those premature obituaries, then FANG may be ready to belts in even established a leadership role again. But for now it's not happening of these. By the way I told travel trust member actually, plus dot com. Club members this evening, Amazon's the most attractive. Second, the drug stocks have been rallying furiously for days. We've seen Algan March higher, Pfizer, Merklein no real news Lewis now at nearly twenty straight points spinning off a long ago and now a new drug, the combat. Obesity diabetes there too high. Why these big pharma names are bellwether inflation stocks. They all pay Gibbons in these dividends get less attractive when bond yields arise. So they tend to get clobbered in this kind of environment and haven't been yet. I feel more comfortable when Merck goes back below sixty eight and five or six below forty. Third on a similar note, dividend yields are offering no protection here because they're too small. The swath good stocks stabilized when their yields hit three point, five percent right now, it's up to be much of a cushion. Frankly, again, this is all about bonds. Many people expect the tenure will go from three point, two percent at three point, five percent in a straight line. So what good is a three point, five percent yield of a stop. That means the pain won't necessarily stop until bond yields stop going higher, or the dividend stocks go substantially lower fourth, you need the watch the Wall Street promotion machine for sign that things of bottomed. There's a very common trajectory. The market's going down. I try to keep recommending stocks. And they're going to be completely Noordh when they raise the price targets or even upgrade from hold the by and no one listens. They're going to switch directions and they're gonna start downgrading. When those downgrades stop sending stocks lower, then you'll know bottoms at hand, but we're not there yet. Fifth markets generals the stocks have been leading us higher, will they be marched out and shot. Lately cyclicals been the best leaders right? Because of a belief that we may be finally beating the Chinese in this trade war, but the Chinese Caisley hold out until the mid terms, and they may decide to do that since the polls aren't exactly looking all that great for the president's party. The truth is we have no idea what's going on with China. Most of what you hear on this issue is mere speculation. And when the market turns ugly, you better believe the speculation we'll get more negative. So we got to expect the cyclicals and the rails will roll over. I am concerned about the rails. Once stocks, your derailed will. Then you start thinking about buying them six when the market gets hit like this, the charter soul go negative because they're seeing double tops, Ed shoulders patterns. I reversal. We saw an AMD stock yesterday. And then again, today you wanna wait until they're negativities. Bake did seventh last week was terrific. Terrific for the cloud kicks, they all moved up in conjunction with Salesforce dot com's annual dream force conference, but that was a spike and I think the cloud stocks could easily see a ten percent correction here. I wouldn't touch them until they're maybe I'd say eight to nine percent from their highs. Although at this pace that compete tomorrow, worst case scenario, they don't go down that much and you miss a minor buying opportunity as much as I love the cloud companies. Salesforce service now Dobie VM where spunk the group is simply wait too hot right now. Let's them in cool. Eight oil needs to start Cohen. Lower today's to two dollars decline wasn't enough market. Doesn't mind higher oil prices as long as they rise slowly, but ever since the president reinstated. Sanctions when ran the price of cruise been roaring and that's brutal for the earnings of every company that consumes oil, which is most of them the put back to seventy four good start. But we need to see more weakness knife. I cannot stress this enough. Jay pal. Our new fed chairman has to stop talking about overshooting stop. Inflation list. Ninety said that that may need to rise, raise rates more than might be palatable. In other words, pal. He may need to destroy the economy order. Save it. That's deadly. The market camp bottom. When we're hearing this kind of chatter. Investors already justifiably of the fed pals adding fuel, the fire tenth, somebody needs to dethrone, king dollar numbers are coming down all over the place because the dollars too strong. We saw that from PepsiCo. Nobody kit that the problem was currency related. They acted so the weakest was organic. That was dreadful. The stock can't stop getting shelled. Now, there are a lot more signs that could be worth watching for the super red hot stocks like Roku square. Cool, that's good. Same goes for everything from the off price retailers to Twitter to my favorite in video toil. But the bottom line is that the long overdue, so of has arrived. If you try to pull the trigger, do some by before some of these boxes or check. I think you're I by won't be your only by so be patient pick if you bus, but leave plenty of room for still more than side garden variety, cleft correction. It's here Glenn in New Jersey. Glenn. Jim, thanks for taking my phone call. I really appreciate it. Absolutely hit my question. My question is about ticker symbol a. m. r. n. just had a real big run-up and I'm a long-time older. Accumulate in for the last six years. I got a lot of money, lot of profit and a lot of skin in the game. But my question is, should I buy. Your, you're takeout your capital, take out what you put in, let the restaurant, but please, please. Please do that spike Jerry in West Virginia, Jerry Jim mountaineer area. All right. Question Jim is on skyward solution. The latest pair of the apple phone, free chips. Sky work was in the phone. You'd think this is enough to get the stock. Now we're to wait on that one. We've got other semi descending doctors or down here. It's too early. It's truly by David. No, hi, David. Likely to take my call. Thank you. The new action alerts member. Thank you for joining up. You're just finishing up your get rich carefully book, and it's lightning. You also have a very professional, but a fun team behind you in the business best in the business. My question is about at the o. d. I liked your interview with the funny group doesn't feel as. And that story. Now with the announcement yesterday of it back position of clouds and its recent pullback, although I bought early and have been adding to my position on the way down, you think this is a good entry point or would you wait till now Wayne comes down with the kind of stock to cut down still more. I don't want you to buy anymore right here. Wait until comes, and that I think you'll do great. This is the long overdue sell off. That's okay. It's okay. We're gonna get together. I just start buying too early some hand sitting in boxes get checked, maybe pick on the way down tonight. My exclusive constellation brands Cup was able to brew profit in the stock soared on the news kid. Keep up the momentum, then it's national taco day. People got one way to sell, right. I'm sitting down with two police top executives to talk about the company's tour around and your stocks that what it takes us. The unknowns in this market they drop. I'll be the judge when we play. I do. I buy to stay with Kramer. Don't miss a second of that money follow at Jim. Cramer on Twitter. I have a question tweet graver hashtag mad tweets, send Jim Email to mad money at CNBC dot com or give us a call at one eight hundred seven, four, three CNBC miss something Ed. Tha mad money, Dutt CNBC dot com. Day in the stock. It's always nice to see a recently downtrodden dot catch fire, especially in this talk belongs to a high quality company constellation brands as it three years of phenomenal outperformance stock in start to lag over the past few months constellation, the beer wine and liquor company. You probably know as Kuroda Delo fell out of favor with Wall Street fashion, show import because the rest of the beer business to be slowing and apart because they made a couple of major investments in canopy growth. That's the best the Canadian cannabis companies. A lot of people thought constellations embrace of buddy marijuana business. As this time there's something was wrong, and the whole side of things turns out that couldn't be further from the truth. This warning constellation beautiful quarter and is a beaten race. Kuroda Medella growing at a ten percent clip in response to stock surge more than eleven dollars or five point, five percent remember. So really bad day for the market, I wouldn't be surprised more room to run. Don't take it for me. Let's think with rob say it's the sea of constellation brands to more about the company's headed Mr. sands. Welcome back to make money. Thanks, Jim. Okay. So rob, I listened to package good company package. Kuka me this thrill with three, four, five percent growth. How are you able to have double digit growth in a category that is not doing well in a group that has almost. Well, it's really all about the subcategories that we participate in gem. So we participate strictly an imported high end Mexican beer. Contrary to the performance of the rest of the category, do a lot to demographic trends and and and really the strength of our brand. This segment of the businesses been a very robust part of the business from growth point of view. And we, of course, have been leading that growth, but you've also introduced a new beer that is red hot premier. Also, some of your older brands like Pacifica, fict- Victoria. These are prints have been around the growing double digit. I don't even know. I don't know where these customers coming from for this. Well, you know, these are brands that have traditional following and Mexico. Victoria's one of the biggest brands in Mexico, for instance, and therefore gained a lot of popularity, especially with the Hispanic demographic in the United States. Pacifico is a brand that has really taken off in southern California and now is expanding throughout the rest of the country. So we've got a great portfolio of brands. We've got some very strong growth drivers. We've got great NPD, as you mentioned with corona premier, which is our low calorie, low carbohydrate version of krona and familiar, which is a very sort of traditional and retro package that is very popular in Mexico and has now become very popular in the United States. We also have, you know, a very strong wind portfolio with our premium brands. That's another segment that has very strong growth from a consumer products point of. You high single digit growth, and we have some of the leading brands in that category with brands like the prisoner and MIO me and Kim Crawford. You know, these are all stalwarts when it comes to growth. Well, there were two things that told me that the narrow Abacha companies very wrong one is that incredible numbers to you bought one point nine million shares of common stock during this downturn. That's four hundred and four million dollar purchase. Obviously, that shows the great faith. Yeah. And actually during the first half of the year, we but five hundred million four hundred million in the last quarter approximately. And yeah, we have a lot of confidence in the business. The first quarter. We told everybody what was going to happen in the first quarter in that we front loaded, our marketing, especially for our beer. New products are NPD premier and for millionaire. And so we expected to have a relatively muted first quarter and those investments in the first quarter paid off pretty much exactly as we expected if not better, you know, you look at our NPD again premier familiar air. Primarily the increment Taliban on that is well over seventy five percent, which for line extensions is almost unheard of in consumer products. Well, because we know you're doing well in that it's obvious that you're taking the offense, not defense when it comes to cannabis in your one of your presentations. Cannabis once a century disruptive market transition, you put more money in this category than all the companies combined, and you're actually talking. In this conference call that this is the future's now for these products. Well, absolutely. The future is now look, I said a couple of things that I think are important and you said it number one, we're playing offense. Not defense, this isn't this has nothing to do with the core business or defending against, you know, the potential cannibalisation of beverage alcohol by cannabis. There's really no evidence of that and our core business as we've demonstrated in the first half of the year and this quarter is stronger than ever. And really what we're trying to do is take advantage of our are strong position, our growth and invest in a line category, which we think is the incrementally will be one hundred percent and is truly a new frontier of a category that will be at least a couple of hundred billion dollars globally over the next ten or fifteen years. We also have invested in the largest producer of cannabis in the world with a leading. Brands, an organization that you know, I think will certainly be a leader in the industry going forward. So we couldn't be. We couldn't be more excited about our canopy investment. All right. So my partner, David favors what happens if you go get a CBD can of whatever is it water was seeming is it tastes thing, isn't mixed with why don't you tell us what will be able to do with the CBD something or other? If we go to a bar or go to convenience store. Yeah. So. First of all, most likely the products that will be produced as it relates to beverages will be non alcoholic beverages. There may be a beer analog. There may be a champagne analog. There may be a spirits analog. There may be a water analog at t. analog, etc. All containing some version of cannabis CBD. Interestingly enough as the non psychoactive component in cannabis, which we expect to become legalized potentially as soon as shortly after this election, because there's a, there's a provision in the farm Bill that will actually legalize CBD the non psychoactive component. And I think you'll see a lot of beverages introduced, probably non alcoholic or in I would say, most cases, non alcoholic. To take advantage of at least the CBD legalization THC containing cannabis. That's going to be some time off. But I would say that the political front is developing very quickly there, and I think that in the United States, you know, we believe that it's an inevitability that the cannibal cannabis will be decriminalized at the federal level. And as we already know, a lot of states have legalized. It recreationally. The majority of states have legalized it, at least for medical and. You know, there's a number of states that have recreational legalization on the Bill, this November, and there's quite a number of states that have medical marijuana legalization on the Bill as well. So it's moving fast. Also. I mean, I think you shouldn't lose sight of the international opportunity. There's huge countries UK's looking at medical legalization. Germany has already legalized medical marijuana. These are all places given our canape investment that that we can play. We think it's important to be able to play an all channels and all segments not just beverages that you're going to own that just recreational. You're gonna be owning it rob because you spent the money and you've got the share that's rob saints. Constellation brands. This stock is back. The company never left back into. Don't on integrity and cultivated with passion. This company has reinvented fast. After a chain of negative incidents. The stock has gotten scored with Chipotle. Looking fresh again, can continue to cook profits with a side of one. Make it to police earlier this year, the beaten down Mexican chain look like it was on the verge of having a remarkable researchers. If you're spending years in the wilderness, probably those Healthcare's twenty fifteen stocks. We're fifty percent for twenty. This gains coming after former Taco Bell. CEO Brian nickel took the helm on March fifth for while it's like it would be smooth sailing for the new in July Puerto fabulous plow quarter in the stock word to five hundred dollars by middle of this. It's highest level in ages. Then the company had yet another food safety system in Ohio causing multiple analysts to downgrade the stock which is now down sixteen percent from institute. 'cause that's always been kind of a battleground stock there. Plenty believers Blida sales, keeping Justin Shane coverage with an app performing last night. Also plenty detractors. So who's right? Longtime followers of the show, I feel like, but let's go right to the source effective with Brian nickel, police, new CEO, and Jack Carson, the chief officer to get a better sense of how companies doing Mr. Mr.. Heart-lung. Welcome to national talk. Day buddy to be here. Thank you spoken to Jack many times, welcomed the money. The first time I'm gonna go right to what you said has to happen, and you tell me how you're doing. Give me your report card in your July. I constantly said becoming more you want to be five, six becoming more culturally relevant, engaging brand, the bill's love and loyalty. Digitizing rotten ours, a restaurant experience hit them more convenient, enjoyable guessing spirits running, great restaurants, great hospitality throughput being disciplined and focused to enhance our powerfull economic model and building a great culture that can innovate next to across digital access menu and the restaurant spears. These are lofty goals. How you doing? What grade do you give yourself? I think we are well on our way in making great progress in each of those areas. We just came back from our manager conference and tell you what the culture of people were on fire. They are so excited about the purpose of AAA and they're so excited about our brand being more visible with our purpose, really engaging with folks on real ingredients, real cooking. And what they do in our restaurants every day. And we just released our most recent round of advertising, which I think our team members are hugely proud of. We got to go into a couple of restaurants and couple of guys had cut out the New York Times ad where it talked about, here's all our ingredients. The toughest ingredients pronounced police AAA, and it's hanging up on the billboard in the back of the restaurant. So guys are feeling great about the business and the commitment to purpose and getting much more visible about all the good things we're doing for food culture as well as giving people access to great right now, Jackson you throughout and Jack, I think that there was a period you and I talk a lot where the company did get defensive, even the loyalists didn't understand that. We insist it happens. It happens in this business, but the company stopped talking about how good the company is. Yeah, you know. Jim, we got knocked on her heels a little bit. You know, we've always been a company that's about food real food, real ingredients, real cooking and people making sure that we hire great people invest in them so that they can run great restaurants. We got knocked on their heels a little bit. So we stopped talking about the things that may police special, the great during now about since Brian joined, and we brought a new team together as we're back on our front foot. We're talking about our food at this conference. I talked to a lot of longtime managers. They're the most excited they've ever been. Dave come up to me and they'd say, Jack, we're back talking about food or back talking about culture. They're more excited about the future than ever and that that just warms my heart because it feels like we're on the right track. Terms of just being defensive. Also, I was going to ask you about minimum wage, but you know what you guys have always been above that and you've been educating people giving people all sorts of perks that other guys talk about, and there aren't as good as yours. Arly rate is over twelve bucks. Some of our minimum wages and areas of the country are at thirteen fourteen dollars per hour, but we give a lot more than just an hourly rate when somebody comes to portray, we give them a future will invest in them so we can teach them how to run a kitchen so they could become the kitchen manager, teach them how to, you know what great customer service looks like a service manager. We'll teach him about the business so they can become a salary manager. And that can happen in a matter of a couple of years. And you can go from an hourly of twelve or thirteen dollar an hour person up to a salary person. You get a company car, you can get options. We pay people bonus for delivering for developing crew into managers. And so there's lots of opportunities to have a long, healthful career at USC the same people, which is what I like. I don't want new people. Now, some of the things that you've invaded, I think as you go equal to your goals. You're starting to delivery, digitized and loyalty. I've always wondered where is a program late Panara where I get a meal free after spend a lot of money. So we're really excited. We just started our AAA rewards program. So the more you AAA, the more free chapel you can get. And that just got started in three markets. So we're in Columbus, Phoenix and Kansas City. And part of the reason why we're so excited about doing it. It's one of the number one requested things. People are asking about, like, how about a loyalty program, and you know we're early days on it, but what's great is it's bringing in some laps users new users to our business because we digitize the business, this mobile app that we have. People find it a very easy way to access AAA and with millennials and jen's e, it's frankly their preferential way to interact with AAA. And we have the second make line that that was a huge advantage where we can take these orders off. Of that frontline, put him onto the second line, and then we've got shelving so you can just walk in grab your food and go. I mean, the convenience level is phenomenal different from the old days very different than when you put on top of it. The idea that will reward you for accessing the brand through new channels. It gets really exciting for customers. Okay project because you've been through the worst so to speak. I see today police searching for new food safety head, James Morrison. I remember when he joined Kim cities, you really terrific higher, but it was time for him to move on. What happened is. Been great. You know, he retired. He was a professor right tired. We needed somebody like him. You know, he came on board helpless, create a food safety council. He's still going to be with us thrown into next year. He's still going to be honor food safety council. He's been fantastic, but he's gonna go back into retirement and so that's. We're lucky that we had them for the time that we had and a world class people in our safety council and food safety is going to be something that's always going to be a high priority for. That's not going to change. People always ask me. You came from Taco Bell where they do have preservatives in. Yeah, there's been you're you've been wore kind of, but never by the way. Never sly always tried to get into slide Taco Bell. You would never do it, but. So people say, well, that's why they never had a safety problem, but that's not true. It has nothing to do with preservative not preserver ingredient non-agreed. Right. Just doesn't. That's just a Canard. Yeah. Look, the thing that I've been most impressed with since joining AAA is the commitment to food safety. I believe this company before I got here had a passion to be a leader in the space. We're going to build on that and what we definitely are committed to doing is real ingredients truly fresh. And that does require different food safety standards to be in place. These wellness checks that we do in other protocols that we've execute. You're not gonna find that in a lot of other restaurants because we are handling fresh food and we're truly cooking every day in a restaurant. So just demands that we have higher level of commitment to safety, and we'll always have to be passionate about being a leader in that space. Shareholders Bill, ackman. All fine, right. Does check in with you periodically Lord shareholder? Yeah. Yeah, they've been great partners. Okay. And then finally, just in terms of of the zeitgeist of the company. I mean, I know because I don't Mexican restaurant. I mean, I've always felt that we try to get letters and you have those behind the counter you. There is an ethos to your company. It was never lost right? Because you know, I was a believer threat. I don't mind saying never lost faith, you know, but the has for being despite those the bumps the road. Yeah, absolutely. The the purpose of AAA doing, you know, food with integrity and the mission of cultivating a better world. It never stopped resonating with millennials in jen's e and a lot of our employees. I think fifty sixty percent of our employees are millennials. Jen's e and not surprising. We way over index with young people as customers, they just believe in the purpose. They love the food and then you know the strategies that we're implementing around how we're gonna turn around AAA. I think the more visible were on those purpose. You know, the more connected engaged will be with those young people. Consumer cares more than ever about their health. Absolutely more than they know more than ever they demand more than ever and the more they know about the more likely they're gonna convict poll. Terrific. Let's leave it at that. Thank you so much, Jeff, for being with us all through this for providing nickel new person coming in Brian Nichols g-o-v, Polly and Jack heart tongue. CFO thank you so much. Have you really appreciate it? Man, monies back after the break. As I told you earlier in the show, the warriors are making themselves known. And when you have a sell off like we had today, it reminds you that you have to build a portfolio that is prepared to handle anything. That's why we play 'em diversified this where you call you. Tell me your top five holdings. I tell you if you're portfolios, diversified enough, maybe mix up little. Why don't we start with a tweet Scott on Twitter at Ascott Kerensky who got right to the point. He has lows Disney, apple Alibaba, and activision blizzard. Okay, terrific. Terrific. Obviously, actual club name, same with apple. So we got entertainment. We have technology. We have retail more of Nelson's making major trait change there. We have gaming activists doing quite well called duty and Allie baba, which let's just call it a Chinese. Chinese retailer. So we have retail we've, but in China, retail America, do it yourself. We've got entertainment, tech and gaming. I think that's perfect. I really liked that port floats little gogo for my taste, but I do like it. Let's go to Greg in New Jersey, Greg. I'm Greg jersey Middletown, New Jersey on twenty three, and I wanna know if I'm diversified. Okay. I Google is ni Amazon AT and t. and mom, it's real estate investment court, mom, it's we had them on that's a long time ago. Okay. So all right. So you don't really need income right now because you're younger person, but that's all right. You got some gross stocks got some income players, Amazon, obviously, I think on web services, what I've been working. Fantastic. That's a great by ride your Disney, we covered that earlier. So we have retail and also tech. We've got entertainment telco. We have tech now I would tell you because of the FANG problem this, and this are little too much alike. You can keep the mammoths I would actually this point let you get rid of Google. Even though I've big position for actual orcs and Atta healthcare company, United health might be good opportunity. You're to clustered, even though you're young, you're still a little too. Cluster. Let's go to Charlie in Texas. Charlie. Jim. What the what the market daily do have some mad money tray with. But I have some off a longer term. Also one I call my super portfolio. Okay. Apple, Amazon, EP, and and adobe in two. Collisions on the pullbacks taking some profits when they run up what you. All right. Let's go to work power our favorite utility. So that's easy enough. Amgen, actually, Lord, Strug name, which is terrific was down way too much. Saves good opportunity. We talk about that tomorrow and now here's a problem. We've got at Amazon Apple and adobe. Now these are going to trade together as we saw today. So I would keep up. I would keep apple. I am. I keep Amazon. I know that's two together and then the other I would indeed toss. Okay. All right bowl that instead dopey that should go Amazon now can stay and David play my diversified monies back after the break. It is time. And then the lighting round is over. Are you ready skid that is over the live around because I'm gonna tell with Rico in California Rigaud. That that that. Extremely talented if I say so myself, what's up. Do I remember you? Of course, remember kidding me. It was like yesterday, the hell is this. The hell is this November. We were talking about that, but was member. I quit drinking put down them, but and I have my whole four one k. in that. I got you. So let's go to work. Let's work together. Well, what was his dog. Like cement heads. That's what we used to call them, and I was caught up with cement, it's okay. Listen to me and listen, good. We do not want anti Bush. What we want is constellation rans s. Really porter. You gotta be an SEC. That's the one that's going heart. John, Pennsylvania, John. Hi gain. Lem really concerned about the recent pick clients with some of the mid caps offer is service stock ethically. It's the Pacific Leigh's. The fifteen percent pullback in out Terek fund is run too far too fast shit up by more. Percent. It's almost thing I should institute some rules and it's up more the hundred percent mcadoo like, would it cool? I say this one is one of those that I talked about. The top of the show, seven to ten percent pullback totally realistic, let it happen and then do a little game. I need to go to Tony in Georgia, Tony. Hunker down. Welker done. Lot dotted in may fifty forty one. It's been going down the tubes about secondary percent since then. Three now? No, it doesn't have a good yield is isn't inexpensive stock, but I have no edge. No reason that I can think you wanna be a commercial real estate Pinson services. We like CBRE for awhile. That's okay. But we can't. It just doesn't have what it takes right here just doesn't. Let's go to Bill Missouri pill, hey, Jim. Bill. Listen. I've been looking at some five g. investments and I already own Invidia and Intel and Qualcomm and rice the AT and t. but I ran across this company called Zales z. y. oh, and I was wondering if you or with them. Dark fiber. I've gotta do some work more work on this. I keep hearing about an ongoing dark fiber shortage. Maybe Zale group is the way to play it. We will do homework and we will come back run in New Jersey, Ron Mulia. Hello, Jim. Hey, rod, great. Thank you for all your help with the home gamers. Of course, my stock is k. t. o. with, okay, this is very interesting one Crato we recommended it. Everybody pre out a lot of hate mail. Lott I hate tweets. A lot of people talking about, well, the stock has been just a huge over Cheever. But at this price. I don't need it, not gonna push it here would prefer to be in Raytheon. Jabba trust owns Raytheon. We'd be talking about this Tober thirteenth teaching. This is the cheapest defense. Why? Not dependent on US buying. It's much more of an international play by patriot missiles as the way to placate our president. Let's go to Maureen in Florida. Marine. Jim, are you for helping people like us get a better handle on our phasing on the same issue? I mean, I just wish her the show when I started what's going on. I started buying stocks and Seventy-nine what's up. Purchase Johnson Controls in the mid nineties by drip program, often stocks and I find it until I got a job with 401K. It served me well for years, but not so much lately. I just don't know if I need a push to sell it, or should I keep it what's. What's. Johnson control Johnston trolls problematic a series of bad quarters, new CEO new guy comes in that not demonstrably successful yet we see more tell you this is the proof is in the pudding. We don't have any proof yet. I don't like this industrials. One of the industrials that I'm just not a back rub go to Scott, Marilyn, Scott, Jim. Yup. Yup. Jim, I got trapped looks like a bad Sean pattern on neck tour therapeutics, and it's all over the place and I'm gonna house a pain, hold it or or a great spec. It's got a big pipeline and drugs. I look to speculate stocks aren't working well right now, but I don't want to sell the stock in your. I think that'd be big mistake. Let's go to John in Michigan. John. Jim, John. Thank you for everything. You do. I, but you're quite welcome. I wanted to ask you at what level would you by align technology? All right. A wind technologies, invisible line. This is the stock. Everybody knows. I like it's up sixty percent. It's only down a few percent from its high. This one has to go seven to ten percent. Let's say, now, you know the stock is too hot. I think it's got a good three. Fifty seven, three thirty five forty, but that's what I'm talking about. Just like I said, the toughest show stage by nothing aggressive. We don't know how long this is going to west and that Lynghjem conclusion of the lightning round. Mike big round is sponsored by TD Ameritrade. What did you think? What happened for heaven sake? When bond prices. Plummeting bond yields soar to Bill to go in there and to start buying slow. Slu willy nilly, queue up for Colgate, take even more PepsiCo down. No, that's not how it works. Nothing these off. Good staple companies do really matters her their stocks all trade like supercharge bonds that plunge right along with treasury prices. And hey, it makes perfect sense who the heck wants core ox with his puny two point, six percents yield. When you get nearly three point two percent from the benchmark ten year treasury, do you really want to pay twenty two times for company with a meager seven percent long-term growth rate at time when it's close, Morton's are under attack from commodity inflation and rising transportation costs. This thing is a bond market equivalent here and bomb market equipment, get slaughtered in this kind of environment. I liked the pips co quarter. Put that was reported the other day comfy saw an acceleration, the area we were most inserted about two quarters ago soda. Sure. Peps go had to spend to get growth up, but you're getting Guoqing in four point, nine percent much better than most other players category in a plastic bomb market. The stock would be worth buying only right here. Sadly this is not a possible market anymore. And pep has very few defenses against the rotation out of these kinds of stocks. This rotations happening faster than usual because we're not used to rate screaming higher, so rapidly, PepsiCo go has three point, four, five percent yield. The tenure gives you nearly three point, two percent and unlike stocks, it's risk-free. So peps go stock it Trump's like a stone. I don't know what to say about Colgate. Two point, five, five percent yield global volume of just one point, five percent and businesses. So Manningly inconsistent. You might as well buy something like they tenure. So the obvious question to ask is why not throw away these stocks? All of them. Why not just sell sell sell. So undersea might ask who needs corks measly dividends fill up shoes, tenure yield. Okay, we'll tell you why. I'll tell you why short-term these stocks are facing withering interstitial fire like soldiers in the first day of the battle, the song, and I can't ask anybody over the top that hail of selling boats when days like today. The only thing that matters is that bond yields are having their biggest one day move since President Trump took office and the bomb market is Mercifully whipping around the much more stock. However, bonds have a way of attracting buyers as they go down in price up and yield. They tend to quickly reach a level where money manager stop selling them on this or more accurately the computer stop selling. Then you have to look at what's been thrown away and think about what management can accomplish this environment active. We're being management. We don't think about that. When we look at Staples, I want you to think of it like this in nineteen eighty nine. I owned an apartment in Brooklyn. And I decided we, we had to rent it moved to the suburbs. We're making about six percent investment for the ram while I said that could be, I could return. So we booted the place for little more than we pay for my. Now we put the money with what's municipal bonds risk-free. What I didn't count on is the twenty five years later. The same apartment would sell for seven times what I sold it for because it appreciated in value. I thought it was six percent income stream better. It was the appreciation I forgot about. It's right now stockholders to deciding whether they went the two point, six percent return on the Clorox apartment or the nearly three point. Two percent return from the tenure looks like easy choice, but ten years ago, Clorox traded fifty, nine dollars. It's now at one hundred forty six and that's without calculating the return from the difference. Of course, that move came during a period of incredibly low interest rates. But how about this? When I sold at prime Brooklyn real estate in nineteen nine, you know, we're Clark. Stop is trading. Seven bucks it would have given you in nearly two thousand percent return over the past twenty years, including a lot of tightening cycles. You're never going to get that kind of game from bonds. Don't get me wrong. These market Turner stocks are behaving. Hideously recognize that the hedge fund playbook says, you need to stay the heck away from the entire group as long as it's just rates are rising on not telling you to try to be hero, please, as I said at the top of the show way for them to go little lower. But if you have a long term time horizon, if you're gonna Ford to be patient than you may want to think about buying the consumer packaged goods stocks Oso Quedgeley into this horrendous weakness again of rush, but remember the appreciation stream dividend street. That's the real pot of gold at the end of a very torture rainbow. You have my permission to pick, but only if the market is down hard otherwise missed it, there's what nature of the bomb markets billion stocks. So we don't want to be Christian. Let it come down. It's okay. It can come down like, so there's always more could summer I, I find it just for you right here, mitt money. I'm Jim Cramer, and I will see you to borrow.

Coming up next