Looking up for the economy and then suddenly we got negative data points that changed everything and made the recession a plot more likely sure, that may be the profrnl mat cause of todays decline, losing another 494 points, s p 500 plunges 1. 79 . Nasdaq plummeting 1. 76 . Sell, sell, sell, sell but the truth is a lot simpler. We were due for a selloff. How i do know . Because thats what ive been telling you for weeks. A month ago i told you about the s p 500s short range oscillator indicator. This is a tool i pay a lot of money for that tells you almost with uncanny accuracy when the market is overbought or oversold, overbought meaning due for a pull back, oversold means you have to start buying when the oscillator is above five, it always almost means we came too far too fast. And you need to do some selling. Well, when its well above 5, you need to aggressively raise cash as i told you last month the oscillator went extremely high reading, told you we were due for a bruising i stwuck with my discipline there was too much thumb enthusiasm for the market and time to raise cash thats what we did for the Charitable Trust which you can follow along where i said on a Conference Call, dont like it at the time, i said to start selling even though, you know what i had no idea what might go wrong. I didnt know what might derail this stock market. I just knew the oscillators almost never wrong i didnt want to get more negative it was more muscle memory from the days when i was a Hedge Fund Manager working with karen cramer, my now former wife then known as the trading goddess karen didnt pretend to know the ways to the fed or any of the economic mumbo jumbo or the lead if the president ial primaries. The she knew you need to sell when that darn oscillator gets really high. I would be adamant that we own stocks and Great Companies we shouldnt be selling she would say who cares if the companies are any good the stocks suck word i can now use on air thanks to Mark Zuckerberg and Elizabeth Warren who used it yesterday and the president who said something a lot more careless via tweet. Times were completely divorced from the stocks underneeng times when the oscillator is extremely overbought my analysis meant absolutely nothing to her and it had to be blocked. Now on this side, i wouldnt budge. Im a rational gichlt i went to all sorts of good schools. I took economics with john kenneth at harvard i learned the hard way we work for wall street and intersecretaried water street. One day she sent me out to get her a hot pretzel and a diet coke when i came back, she sold everything we owned. I was lived. She said, hey, if you dont like what i did, why dont you buy them back . But remember, the oscillator said im right i didnt have the conference to buy them back. Good thing then the market rolled over big time just like it did over the last couple days. That was the first time. It wasnt the last time. Sometimes when the oscillator are outside and red hot, she made me get her a water ice. Bam, i return and the positions were gone. Sometimes when i screweded up, she would make me wear a postit on my forehead with the symbol of the stock i lost money own and walk all the way arent building aefr trading position was off the sheets oscillator of look, i thought it was absurd that some ridiculous technical tool is calling the shots here i was supposed to be my job. But karen, head trader, 50 , explained, its for the best you need to be oibtive and clinical and check your emotions at the door before you sat on the trading desk with her. She always had ice watter in her veins. The oscillator turned out to never be wrong sure there is the var event it would lead us astray the post it, pretzel, water ice trum whap my home work is telling me that stocks were divorced from the companies they were supposed to represent i had to accept that i do now karen reiterated that advice at the beginning of last month when the oscillator hit eight. She was as unwaivering now as she was 30 years ago and once again, she was right. We didnt know why the market would get hit. The oscillator predicted pain. I had no idea this ukraine story would break and democrats would decide to go for impeachment i didnt know the purchasing index would plunge into recession territory. I didnt know that gm work woer would go on strike i didnt know that the president would press his bet in the trade war with china or with europe as did he tonight after big wto ruling against europe for unfair trading practices revolving around air bus. Tariff thats include a 25 hike on french wine let them drink cabs. I didnt know the peloton deal would stink to high heaven or that the joint would get torn down by the we work ipo yeah, pulled because of outrageous self dealing horrendous debt. That could have crushed us the only thing i knew was that the patriots would be in first place thanks to the real easy schedule so what do we do now for now, we wait after market becomes overbought, you wait until it gets oversold. Then you pounce. You can pick certain stocks on the way down like what . The food stores. Everyone has to eat. I have one thats in the food aisles later on in the show coming up. These days you think about walmart, target. Two of the largest grocers dont forget dollar tree that one, they had nice grocery stuff g prices anything with a big yield can work as long as the dividend is safe you cant pick at anything that is hated though. If its hated going in, its going to be hated going out. I think the oils you can still sell here. Were still not yet near minus five getting there. But you sell only if you want to free up to buy something else. Thats where we are in the equation now as muches a didn as i didno go negative. Its hard to go positive when the market is cascading down everyone is scared about impeachment and worried that senator warren is going to take it to wall streeters thats when you have to start to hold your nose and begin buying. No one wants to start buying now when theyre at the ugliest. Its terrifying. Let me give one more example 21 years ago next week i was nervous, worried, selling, selling hard into a very oversold market. My hedge fund is down more than 100 million for the year. That was 100 million was a lot of money at the time karen hadnt been working ages, she stayed at home with kids. She came back one day, cure why us to see how i could lose so much money she wants to know when i was selling when the oscillator is giving us a huge oversold reading. She took out the catalogs. The lands end and she told me, go get her some french fries a lot of catchup by the time i came back, she put hundreds of millions of dollars to work. She said if i want to, i can sell everything. Everything she just bought i didnt the oscillator the day wlere learned the we up the restst year made a big percentage of the money we lost. When the market closed, got the catalogs including the martha by mail she loved the martha by mail she walked out nothing more never came back. Ever look, i dont know where this market is going to bottom. Its darn ugly i know she doesnt like it yet but she still thinks she likes to hear that recession talk. Likes the negativity likes my twitter feed. Hates the negativity to me likes the fear instilled by Hedge Fund Managers. Really like it when they come on the air and trash the market without revealing if they missed out the whole year yeah they lost, didnt get any gains. Bottom line, oscillator still isnt down enough for me to turn positive so find some stocks that can work in this environment and pick at them slowly. Beyond that, stay patient. Be optimistic for once and recognize the sun does come out although tomorrow at least on wall street its supposed to rain keith . Keith in nebraska. Caller yeah, go big red from nebraska all right caller my stock is amt American Tower corporation it pulled back from 242 i believe in the ceo story and got growth United States and worldwide. But it is another victim of the growth rotation and out of it. Yeah, you know what this is precisely the stock you have to start picking. Is this stock ever cheap no is this stock just come straight up . Yes. Now that its coming down, do you say its scary no you start. You start. 5g which the president referred to today, 5g, wasnt finished. And thats because theyre making nokia over there. I think its a good stock. Dont be aggressive. Go to kent in kansas kent caller yes, sir, jim thank you for taking my call first of all, id like to thank you for being a lighthouse of sanity in this immense red sea of media insanity. Well, you know, it is a kind of weird time. But thank you. Its a weird time. Its not not a just weird. Whats up . Caller im almost 65 and healthy. Im not dependent on my portfolio but i would like it to work as hard as i have to keep it earning money. My holding is blackstone, its one of my Major Holdings its been a great dividend appreciation i see its been favorite target of short sellers the blif Stephen Schwartzman has been impressive chairman and hes got great insight theyre buying more holdings every day like a drunk ensailor. He is very smart fellow very charity habl, by the way. I like to point that out and i think this yield is four thank you, stephanie for telling me about this one 20 points ago. I try to be as enthusiastic as she s i still like it yielding four it comes down, i would buy more. Thats what youre supposed to do hoy painful is it to do that i dont know i dont know when it bottoms i say do you some picking. If you do any selling, put it into other stocks and hydrate. Oscillator rarely wrong. Mad money, another tough drop. Are the Capital Markets losing on the markets then from salt and pepper to more exotic flavors, you can likely find consumer giant mccormick in your Kitchen Cabinets but is the stock the secret ingredient for your portfolio . Want a head start on fridays jobs report . I have the largest payroll players in the land. Dont miss my exclusive with ed paychecks. He may Say Something surprising. Surprisingly positive. Stay with cramer devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Stock markets exist for a reason, though it can be tough to remember, when your eyes are glued to the tape. The whole point is they let you raise money, build a business. That business grows, sha shareholders rewarded. Much what happens if the market can no longer fulfill that function i think thats actually what were seeing right now its not good. So let me explain. Recently you had three kinds of investors. Large investors and they are called institutions. Small institutions you had individuals. Large institutions both traded known stocks, smaller tended to buy stocks and generally own them until something led to change as for individuals, they bought and held thats what yearly everyone in the business told you to do. Buy and hold never buy and home work. The large institutions traded themselves into about a livon. Hedge fundsment to do well have been serious underperformers on average. Dont take it from me. The Warren Buffett holds the truths to be self evident. The smaller institutions, they tend to see a lot of mini crashes, real crashes, scandals. Its that the stock markets become too dangerous and asset class so why dont we err on the signed of bonds . Why not . Bonds are safer. People own them actually made a killing. Perhaps the biggest shift has been with individual investors though these days the conventional wisdom no longer tells you to buy and hold stocks. Instead youre told its too hard you put your money in index funds. Thats the new gospel. When i say gospel, i mean it do not get me wrong. I love index funds if i see on twitter tonight that i blasted index funds, im going to come at with you everything i have i think a low Cost Index Fund is a Perfect Place for your retirement money but if you have the time and inclination do the home work, i think youre also capable of picking good stocks. I dont think youre too dumb to do that like most people do. Still, think about the situation we find ourselves in rightnow. Large institutions are tripping over their own feet. Small institutions are fleeing from the stock market and the bond market and individual investors have little interest in individual stocks how are companies supposed to come public in this environment . Where is the cash going to come from 60 st money sin decis indexed they cannot participate in ipos. They only buy what is already in there. Right . Thats whats in the index these are passively managed. That is the whole point if you invest, you cant invest in uber or peloton they dont have an index throw in the fact that capital is migrating from stocks into bonds, you have a problem here the situation is fine if we only had a few ipos, right . Every once in a while we had big ones lately weve had deal after deal after deal and theyre not done. Many are big losers, both to the companys insiders and the new shareholders you have to wonder, if everybodys putting their money in index funds or bonds, who is left to pick up the slack . Pun intended without institutions and individual investors, picking actual stocks, buying the chewys, its become much harder for companies to raise capital maybe Charles Schwabs latest move to give clients Commission Free trading will save the stock picking business i dont know flab are good enough ipo winners like beyond meat even though it shouldnt to be save the day heres what is happening i think were approaching a day of reckonning. They better start recognizing they may be better off staying private unless theyre desperate. We really dodged the bullet. Sooner or later, there is no place to put it. It feels like were almost there. Stay with cramer after the terrible, horrible, no good, very bad okay, were sellers, of course, panicked in response to some tepid data yesterday was the ugly pmi today is the subpar payroll report and, of course, just general overall gloom, how do you protect your snefl ive been warning you to raise cash and to a pull back. Now that the market is being hammered, what should you be doing as it retreats heres an idea when we started rolling over yesterday, what was the best performer in the market . It was mccormick the worlds leading maker of spices and seasonings with a stock that matched 10 even on a hideous day. Now some of that is because the Company Reported an okay quarter. There is another component here that we need to talk about they didnt rally in spice of yesterdays selloff. It rallied because of yesterdays sell yacht mccormick is the perfect stock for this moment. Todays market wide meltdown, can you buy this thing lower than it was yesterday. So what exactly happened with the thing yesterday . And why i do think it may be time to be big in this stock as it goes down mccormick is an uber long time cramer favorite. You know that. They dominate the spice aisle at your local supermarket they have a big Food Service Business in a moment of brilliance, they bought a bunch of brands from others like franks red hot which is beloved and i understand seem to put it on a lot of different things. One of the few wakes to make the same cheap awful food taste different is add spice you pour stuff on and tastes different every night. The stock is up 140 over the past five years. I recommend it again and again and again as the ultimate play on the stay at home economy. And i love that theyre dealing even though the analysts hated it i told you to buy them ahead of the quarter. What made me so confident going into the Earnings Report simple the stock had back slid substantially over the previous six weeks. That means the expectations are easy to beat youre looking for a stock that is big and then can bounce they downgraded them from hold to sell in august. Arguing the stock is fully valued even though it is best of breed, the analyst believed it ran out of upside. Which brings us to yesterday mork when the Company Reported an okay quarter that could easily be described as frankly mixed. All right. So it wasnt great mccormick delivered a 17 cent earnings beat over the 129 basis, sales came in weaker than expected up 1 year over year on top of that, management lowered the full year sales forecast, even as they raised the full year earnings forecast. Initially wall streets reaction was predictably lukewarm in fact, j. P. Morgan downgraded them in august, he was out there right in the chutes saying the stock deserves to be off a bit today before admitting that, the shares can go either way. Th this is you have to wait to hear the Conference Call on that call, management painted a much more bullish picture than the headlines. Now not only did ceo who is really one of my favorites say everything you want to hear from a chief executive on day when the averages were tumbling based on worries about a slowing economy, first he explained the breadth and reach of our portfolio across segment geographies and product offerings, wow, balance portfolio to drive consistency and performance in a volatile market it is a classic stap that will can hit the forecast even if the economy falls off a cliff. Now even though the sales came in weaker than expected, margins were better than expected. Hence the terrific earnings per share. How do they do it . They point to cost savings led by our comprehensive Continuous Improvement program, cci, and favorable product mix. In other words, execution, execution, execution there is a healthy grilling season it was not summer. Right . Which drove Significant Growth in grill mates, stubs barbecue sauce. And franks hot sauce and, yes, frenchs mustard we had a debate about frenchs mustard during the show. We were making the thing i have to tell you, a lot of people felt that the only thing they really liked about it was clue, you know, i mean, in is it mr. Mustard colonel mustard . In the library with the knife the i think its better than that i put it on my soft pretzels when im in the box at the eagles game. That deal is paying off. And i cant stress that enough stubs is growing faster than the barbecue category. Frarpgs hot sauce is in house old penetration. This is very personal. I also have frozen chicken wings, seasonings, blends, dry recipe mixes, candle sticks, just kidding across the whole portfolio, mccormicks will double digit consumption growth as for frenchs mustard . Its taking market share thanks to what they describe as a focused marketing support. What does that mean . The company is trying to get more bang for the buck for each dollar they spend on advertising. So when frenchs created the aptly named frenchs National Mustard day, the origins is con testd, they were getting the social media going the campaign earned 15 times more media value than actual investment and created quite a buzz around mustard flavored ice cream. Bad with over one billion impressions. Then he continues, were making Brand Marketing investments like this across our entire portfolio and it was evident in our Third Quarter consumption and sales growth mccormick understands how to advertise the products in the new media environment. Just so you know this franks has this kind of hold on media you should look at what they say about this stuff i mean people just love to talk about it millennials, theyre nuts. Anyway, finally, some of the secular trends powering the story. Were alined with the consumers continued interest in bolder flavors, demand for convenience and focus on fresh, natural ingredients. You ever look at the number of ingredients in mustard theres none yeah mustard. Anyway, as well as emerging purchase drivers around the source of the quality of food. The ive said this before. Im going to say it again. Millennials want convenience, theyll play for Natural Goods and transparency about where the footd comes from me like i said. This is so great on philly soft pretzels im going to have two of them this weekend when the eagles play the jets and it might be most exciting thing that happens that afternoon good Conference Call can have a lot of impact. Conference call was up it finished up 6. 8 . While the call was good, it wasnt rally 10 in a single day good what else allows them to explode higher simple when the ism purchasing managers reading came out, the averages plummeted as investors freaked out about a recession. Mccormick is the defensive safety stock that people love to buy when the economy goes into slowdown mode. Suddenly that big earnings beat matters a lot more than the small revenue. Pt the quarter her hair on it, beats me that was good. It was good for them to remain attractive as a safety stock this thing is less enticing than it was two or three years ago. It sells at 27 times earnings. Yields is 1. 4 p stocks run so much the bottom line, in an incredibly unpredictable market, a straight forward consumer staple play like mccormick is just what the doctor ordered as long as the market remains choppy, i think this is the kind of stock you buy on the way down it beats buying candle sticks, right, and where is the candle stick from colonel mustard . The library and i like it even more after todays pullback lets go to joe in new york. Joe . Hello, jim. Thank you for answering my call. I was wondering, i bought your chewy a week ago it dropped like a rock i thought it was get ag good price. I was wondering if i should add more or sell is or just hold it and what is your snn. It doesnt make my money. The market switched. Once they became possessed with consistent earnings, what happened is nobody wanted to buy chewy chewy cocoa puff you still see a lot of ups men taking it. Well, lets just say the mans man is get giving me a paper towel. In a brutal market, you need a straight forward consumer staple play and you know what i think . I think mccormick rocks there is much more mad money including the nations biggest payroll players. What can paychecks tell us about fridays job report . Ill as the ceo. And then Charles Schwab helped usher in the golden age of low cost online trading. Could it kill the model and tonights version of the lightning round. Stay with cramer your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. Healthier brain. Better life. Now that recession as made a timely come back, fridays big nonfarm payroll report is more important than ever. We got mixed signals everybody is focused on adps payroll report a subopt mall number you know what . This morning we also got results from paychecks the second largest Payroll Processor with a substantial Human Resources outsourcing division and we learned about help nly business formation among small and medium size enterprises. They delivered a solid top and bottom line beat, even better, management raised their full year forecast slightly that is how the stock was able to rally 1. 8 . Then a hideous tape. It got a bountiful 3 yield. Check in with the president and ceo of paychecks to get a better sense of the quarter and the companys prospect welcome back to mad money. Im going to say, you know i think the analysts that cover you and are negative are wrong the headline is results better than feared. Marty, the results were good who is fearing these results given the fact youve been putting up incredible numbers for years now. I dont know, jim we had a solid First Quarter it carried through if last year. 15 Revenue Growth part of that from our oasis acquisition. We had 9 operating Income Growth really felt good particularly about our mid market sales and our repositioning of the company for technology and h. R. Focus. One thing that we have well, no the just our network, but everybody, papers, whatever, have been convinced that were having a serious slowdown. And that there is going to be big layoffs and recession. Marty, im looking at your transcript you talk about job growth actually ticking up a bit. What is wrong with the end of the world picture . Well, yeah. In september we released our Small Business index these are businesses under 50 employees. It actually ticked up for the first im in a few years so we saw, you know, one month doesnt make a trend we saw job growth pick up a bit. Its down 1 from last year. The job growth level but thats because its a tight market its tight for Small Businesses to hire and retain folks but right now, you know, were feeling pretty good on the Business Sentiment when i read your transcript, i said to myself, oh, boy. I have to temper the negativity. You represent too many companies. Further, you did a survey of your clients about the trade problems with china. What did that say . Well, about 25 of our clients are feel like theyll be impacted by trade and tariffs. But three quarters of the clients, you know, these are businesses under 50 employees. Theyre pretty regional. Theyre local businesses doctors office, restaurants, contractors, theyre not impacted by the pairives of those, that quarter that, is you know, well have a tougher time leveraging, changing supplier routes and chains and so forth but three quarters of them will not be affected based on our surveys. The first thing i asked with the second, that tells me there is still good hiring if they can find people despite the trade war. There really is, jim. The other thing that picked up on our Small Business index was the wage rate. The wage rate went to 2. 8 weve seen it around 2 1 2 to 2. 6. So our feeling is that while businesses are a little concerned overall about the economy, the demand for their products is still there. And the theyre out trying to hire the biggest challenges, hiring people to fill the demand that they have. Thats good news the. Thats quite different from the biggest challenge being that they had to fire a lot of people 401 k s, you have a huge business in that now you probably get a pretty good look about from Human Resource people and people enthusiastic about investing here they really r the retirement business is continuing to be very strong for us you know, weve introduced online on the mobile app you can enroll as a participant from the client the employee can enroll in four clicks on our mobile app that has double digit increases in Participation Rate in the clients 401 k s thats good news for the clients. Theyre getting more people into the 401 k s, good for retention. So this is really helped us a lot. Im going to encourage Small Business listening, you should get this service it is very difficult and cumbersome for a lot of employees to go to the 401 k , this makes it easy as does the wearable watch idea which i imagine the clients must be excited about they really are the this move to wearable thats weve introduced now takes a lot of the power of our mobility app and our on line apps on to the wearables. Can you punch in and punch out as a time clock. It has geo fencing can you pitch in a different area the client can set up. There is a lot of remote workers. Can you do a number of things on your smart watch and thats going to continue to grow so we really feel like we position paychecks from the Service Business that it has been for a long time to be a technology and hr focused business that is all good for us and our employees moving forward and for our clients. Last question since everyone thinks there is going to be recession except for maybe you and me and the millions of people who are doing the hiring in this country, the difference between your company now and ten years ago . Yeah. Big change very Much Technology weve always been about service. Service has changed. Its very much about the clients and their employees having the opportunity to do things themselves when and where they want to do it. Do it on a mobile app which were very happy with the five star mobile app under paycheck flex and can you do things on wearables. It is service but an Hr Technology focused company very different than where we were ten years ago and very much positioned the support our clients and the value we bring the same in terms of trying to return capital. Share holders with great dividend paychecks president and ceo. Good to see you, sir thanks, jim its been 50 points since weve been behind this were not changing still good mad money is back after the break. It is time for the lightning round buy, buy, buy, sell, sell, sell. And then the lightning round is over are you ready . Im going to start with rodney in california. Rodney caller hey cramer, booyah booyah, rodney whats up . This. Caller the reason im calling, well, we can both agree that streaming tv is growing, right . Absolutely. Caller you agree okay so the stock that im calling about is somewhere at the Westminster Dog Show hanging out and the turn out best in class at the end of the day. The trade desk look, trade desk is a stock that as it goes down, you can pick at slowly it reminds me a lot about shopafy. Same deal. Dont be aggressive. Youll end up being burned joe in new york. Joe . Caller hi. Hi. Caller how you are, cramer im good, joe how about you . Caller im good. I inherited biolight solutions, dlfs from my father. And it is recently taken a pretty significant hit i was wondering what i should do with it. No biolife. I have to do work on that. What is biolife . I know edo smith more than i know biolife let me go to work on that. Lets go to cindy in georgia cindy . Caller hi. Cindy, how are you . Caller im fine, thank you im a bee keeper in georgia. Id love to invite you to go on a hive some time and get local honey. Do you know i have to get a hive this year sim o the bees werent on any mi flight path i had so many problems with my flowers. Go aed had im sorry. Much whats up caller well, i was calling you about crisp per stocks specifically save therapeutics and want to know your opinion . Jeff jonas, im a believer in if jeff jonas. This is the stock thats going to keep going down the market doesnt favor growth and youll say why didnt i buy a little save therapeutics lets go to armo inn in texas caller i have a question from Iron MountainIron Mountain always had a high yield people think it doesnt have the groenl i like the Company Record storage, 7 yield i think its good. I like the yield by the way, i like ve. This tas too deb is doing great job shes doing great job. Lets go to henry in maryland. Henry . Caller hey, jim. How you doing today . Im having a good day how about you . Coil im doing all right too the company i want to talk about sci. Its got the act together hit a little problem its not a happy subject it is a happy stock. Its a good stock. And that, ladies and gentlemen, concludes the lightning round the lightning round is sponsored by t. D. Ameritrade li. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. Why would you give something way for free if you could charge real money for it instead . A lot of people are asking themselves that very question yesterday. Charles schwab the big on line Brokerage House announced theyre getting rid of commission onz certain trades, stocks, ongss, etfs rather than making money it commission, they make money from the net income interest and the cash balance, margin lending and selling of order flow now judging by the way the brokers reacted, you think this news came out november where schwab plunged 10 he etrade was down 25 schwab up ended the whole industry, forcing everyone to react. After the close, Td Ameritrade decide they had would offer commissions free trading and then etrade did the same thing after the close today. The companies have radically different revenue structures all the mod thalz wall street has thrown rup wrong safe to say that wall street isnt thrilled all three stocks got hammered again today. So what in the heck is going on here schwab is going to charge zero a trade. How do they do that . Simple all these on line Brokerage Houses are under attack from smaller privately held upstarts that are disrupting the entire industry like so many other industries that have been disrupted by technology. They already offer free stock trading. Millennials love them. When enough of the competitors start giving away something for free, it is harder to for you to charge in other words, this was inevitable schwab saw it coming and chose out to get ahead of the leading bit. Just let me look at the action all three of the stocks got eviscerated yesterday. The whole group peeked 18 months ago. Schwab, e trade and ameritrade crashed head first into a retaining wall sell, sell, sell even before yesterdays breakdown. Schwab stock fallen 30 from the highs in 2018. Etrade is down 24 why . Because theyre being disrupted. Thats what it looks like to be disrupted. Think about amazon and retail for heavens sake. The smaller millennial focus on line brokerages have been eating them alive they offer fre trading in stocks, cryptocurrencies and taking market share ever since they have six million acts you also have acorn, cnbc partner, specialize in micro investing not to mention m1 finance. But its not just the small Venture Capital backed firms that are shake things up even some Major Players like j. P. Morgan are dabbling in Commission Free trading. The writing is on the wall thats why schwab did what they had to do. The ceo explained, were seeing new firms trying to enter our market using zero or low equity commissions as a liefer. Were not feeling Competitive Pressure from the firms yet but we dont want to fall into the trap that a mere yafd other firms and a variety of industries have fallen into and wait too long to respond to new entrants it has seemed inevitable that commission was head towards zero so why wait sure makes sense to me smart guy. What does it mean in terms of the numbers . Theyre sacrificing 90 million in total rev knees Commission Per revenue trade are falling for years. The stock is down 10 yesterday. Now after taking the day to think things over. Td ameritrade came out after the close, decided theyre going to get rid of the commissions too, etrade followed of its very difficult to keep charging money for something that your competitors are giving away for free. All this is starting to sound familiar thats because we heard the story before a host Different Industries online brokerage space is the latest area to be disrupted by Venture Capital backed competitors. If they only care about Revenue Growth, itsees i easy to jut e rivals for years, grubhub dominated the industry very little way in the way of meaningful competition now the money losing dpetors started expanding aggressively from the uber eats and door dash wow now grubhub needs to fight tooth and nail for every basis point of market share. The stock is crushed how about align Technology Maker of the braces, the ones that people love the patent expired now theyre facing competition another unprofitable venture cap backed company that is trying to disrupt that industry. Now smile direct is a ugly performer. Uber and lyft did the same thing to the taxi industry as long as the disruptors can keep securing new funding, they can wreck the margins of the competitors. Now weve had so many of these money losing ipos that market got sick of them thats really neither here nor there, is it the spoint thpoint is there is n established pattern. While the market may have been surprised by the news, anyone paying close attention to the industry should have known it was coming i think its too risky to start bottom fishing in the stocks not in this hostile market its the disruption that results in prolonged periods of weakness that said, if you put a gun to my head, please take the gun away from my head but i would look at schwab only 6 is commission. Right . So its not really sacrificing much that cfo said it is more like the 3 to 4 hit commissions make up 16 st total. No wonder ameritrade got hit the hardest. Schwab is more prepared for this and competitors, they plan it and they also have the most incredible asset gathering machine i have ever seen in my career bottom line. Thanks to smaller privately held players like robin hood which with lose tons of money to grow fast Td Ameritrade and etrade have been forced to offer Commission Free trading this is not some one off out of nowhere event. Schwab made the move because they were being disrupted. While this should give them more breathing room, i dont think it changes the core dynamic here at the end of the day, you dont want to expose your industry that is being disrupted. Schwab is positioned better than the other guys it might turn out to be just the best house in a very bad neighborhood stick with cramer. [spokesman] if youve tried college but never finished, group cheering snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu you dont need me to tell you how hauf it s but it goes down, high quality stocks get cheaper and you do a little nibbling, not all at once. We dont know when its going to bottom i have to tell you, to sell now, you better have something to buy when you do it i like to say there is always a bull market somewhere. I promise to try to find it just for you right here on mad money. Im jim cramer and ill see you toim and tonight, Alex Rodriguez joins the tank. When i was a 10yearold boy, i had two dreams. I wanted to be a Major League Baseball player, and i wanted to be a ceo of a major company. This baseball legend is also a business heavyhitter, with over 20 years of experience in entrepreneurship and investing. Theres smart capital, and youre not gonna find smarter capital than these sharks. Yeah. We actually just hit our milliondollar mark in gross sales. What . Did you read my book . [ chuckles ] the ones that have made me the most money have always been the craziest. We are. All the gronks my dogs are barking. Oleary im a huge fan. But i want to make money. Im a shark. I would give you a Million Dollars for 10