Transcripts For CNBC Mad Money 20140322

Evolving into a notsohot session. The dow dropped 28 points. The nasdaq plummeted. 08 . To make matters even more difficult, it was themeless. The stocks in the same sectors diverged wildly and the initial offerings stole mine share and expanded the froth right in our eyes, right in front of us, from the getgo. As the ipos have for days on end now. A lot of the confusion comes from vicious rotational behavior where investors fled consistent growers and piled into least consistent growers that could benefit from a stronger economy, something ill address later. Part of it was also continuation of some fedrelated action, meaning the pronouncement indicated happier times are almost here again, so Interest Rates must be headed higher. A rise wont necessarily kill the bull. It does cause money to shift, to fall away from companies that do poorly in times of higher rates to ones that do better, especially the banks, which routinely make money whenever rates gradually move higher over time, and thats one of the reasons why that group is so strong. So these concerns in mind, what is our game plan . Well, i think we should use the reaction to next weeks earnings. Reaction. Not trying to make bets here. But reaction to the earnings to see if the rotation that im talking about will indeed run its course, and then well get a return to the classic growth and momentum stocks. Or will the more valueoriented trend toward cheaper cyclical names, including the lowvalued tax as well as financials, remain in full force . Guys, i have to tell you, this is the issue all anyone is talking about. The industrial talk, known as the cyclicals, because they do better when the Business Cycle gets stronger, theyve been able to advance ever since the fed said the u. S. Economy is improving. One of the reasons why that move has been sustained is that we havent had any data points in the last few days from china. And we know that almost all china information has been downbeat. Sell, sell, sell lately. With growth less than expected. I know, Chinese Market was up last night. Huhuh. Let me tell you something. Weve got to prepare we have to be prepared for a rollback in some of the industrial moves on monday, because we get the chinese manufacturing pmi, and that is the most important gauge of chinas growth. Im willing to bet that its going to show a further slowdown. People are starting to talk about, including goldman sachs, maybe a sub7 growth in china. That would be big, people. The cyclicals have been hot. But i think this number could cool the rotation into that group. Gotta watch the cyclicals monday after we see that number. At the same time, we have something you may not have heard of, but ive held to be very important if you care about the oil complex. This is the howard wheel energy conference. I know, a small firm. But id say most of the really important energyrelated companies, theyd make the pilgrimage each year. Look at the presentations after. What am i going to be looking for . Im watching ensco, because its so darn cheap. Almost 6 yield. It seems poised for a comeback. We have to hear about day rates. Maybe theyre going higher. A favorite of ours. Lng, the natural gas exporter so hot, and just wont quit. And schlumberger, and valero, a refiner that is having an excellent quarter. And could be good for a trade into earnings. Tuesday brings results from three companies that should give us an important clue about the ongoing nature of this rotation that im talking about, and thats mccormick, the spice company, walgreens, the drugstore chain, and pvh. Weve had all three of these companies on air. But mccormick and walgreens are like the classic Growth Stocks for no apparent reason. If we see good numbers and the stocks do nothing, or they fall, then we know were still in the tech bank haven and gross stock, were curious about pvas, because there have been so many downgrades, i think any decent number ought to send it higher. Thats what happened with the f corp. When it reported. Wednesday, the focus will be on the fed because thats when it released the comprehensive analysis review. Youll hear it called next week ccar. I cannot emphasize enough how important this review it. Because many banks are itching to raise their dividends and buy back more stock, but theyll need fed approval to do so. And this could be the day they get it. Pay particular attention to bank of america and goldman sachs, both of which might be getting green lights to return to shareholders, one of the reasons my Charitable Trust has sizable positions and many people the stocks have been going up in advance. Wednesday also brings earnings from a company youre familiar with, paychecks, and while we place significant numbering on the labor department, i wont disagree with that. I personally value them tremendously. What it tells us about Small Business growth, the personal bail bail baileywick because Small Businesses generate the most jobs. I want to find out has the Affordable Care act crimped business. Has the lack of open where fare between republicans and democrats allowed business to accelerate . I know that paychex can give us the answers. Finally, the biggest ipo in ages, the cane entertainment candy deal, which you might know as candy crush. The price were hearing right now, if it holds up and doesnt move up too much, i think the stock may actually be worth owning. As we get closer to the day, ill stay on top of it for you, because, yes, its that big and that important to the market. The reason . Its very interesting. If the king digital deal fails to do well when it comes public, i believe the ipo window, which has been open as wide as ive ever seen it, i think well at last begin to slam shut. Thats something frankly that needs to happen. Just eliminate the biggest pocket of froth weve seen in ages and ages, something that could be dangerous to the bull. Thats why i keep talking about it. Not to bore you. But to make you more skeptical and concerned, because i remember 2000 like it was yesterday. Remember how i said the superGrowth Stocks have been bowled over by this rotation . One way to find out if it continues is watch how the market reacts from the quarters from lululemon and restoration hardware. These are two highly valued, meaning expensive, Growth Stocks that have struggled of late and have been attempting to mount comebacks. If the stocks go higher, you know what, that could signal a return of cash into the expensive tech, biotech, retail, health care names which were leading the market before the rotation, and are now being systematically taken out and shot. Yes, some reports, like these two, they can be that important. Finally, we have the end of yet another parade of ipos with two cloudbased names, one launching with a plethora of disparate stocks, i cannot stress enough how typical of these two proud deals are. Theyre coming public at the exact same point when there is a landslide of sellers in the best cloud they software as a service company, salesforce. Com, crm, at a certain point this encompasses fellow and travelers work stone, it has to be braced. It has to stop. You cant have an unlimited number of brandnew untried and maybe untrue cloud plays going to a premium at the same time the best of cloud replays get hammered. Its a platform for online degree programs, and a Network Solutions company, how many do we have, must be watched closely. It may seem a little ten you waited to you but if the deals dont burst higher, that may be the signal, which has led us for ages but seem to crash and burn by the day. It is that zero sum. Heres the bottom line. Were looking for clues about the end of the supremely sharp rotation that royals the market daily, a rotation ill describe later in the show. I cannot tell you when it will end. I sure wish i could. I wish i had that crystal ball. Only the stock action as part of our game plan can tell you that, and ill be right here to narrate it for you. I go to joel, my home state of new jersey, joe. Caller hey, big jim, how are you . How about you, joe . Caller very good. Im vacationing down in miami, florida, now, south beach. I have to say its due partly because of all the great advice you have. Oh, very good. I tell you, this market is a very it can flummox anyone, so im glad im helping you find added value. Caller no, jimmy, youre the man, ill tell you. You have a great staff. Everybody is fantastic over there. Yes, we do. We had a tough week. Its great to hear you say that. Caller i know. Listen, my question, jimmy, is for palo alto. Its come down this week. Its been going back and forth. Already went up pretty good in november, as you know, last year. But its fluctuating, going down. Well, you know, joe, look, this sector whether it be semantech, largely because it was desktop and not mobile, or fire eye, that well talk about, that got killed because of a secondary, i think there are a lot of sellers in the security plays. You know what . I have liked palo alto. It is best to breathe, and yet i would still say do a little schnitzel. Were in a vicious rotation now. Were looking for clues where it will end. As to where it will end, i gotta tell you, only the stock action is part of cramers game plan. Well really let us know. Mad money will be right back. Coming up, fund fiasco . Where you choose to invest for retirement could be the most important decision of your life, and those decisions may be all wrong. Tonight, cramer reveals the most common mistakes that could be costing you. When he opens his playbook. Plus, dive in head first. Spring has finally arrived, and warmer temperatures could cause some stocks to heat up. Pool corporation is the nations largest swimming supplier. Will rising homeownership act as a springboard for the stock . All coming up on mad money. Dont miss a second of mad money. Follow jim cramer at twitter. Before you can really start making money in the stock market, you have to know how to handle your finances. If only so that you actually have some money to invest. Thats a major point. Its something we may have neglected on mad money over the years, which is every week were running a new segment called cramers playbook, where i teach you everything you need to know about the basics of managing your own money. You can send or post questions on twitter jimcramer with the getaplan. Please ask away. The more queries i get the better i can understand what youre worried about or concerned. Tonight i want to kick off with a question that made me want to tear out the rest of my hair. Not that easy, please. From harrydemp1, who asks whats your preference on etfs versus retail funds getaplan. I dont want to give harry a hard time. Im glad he brought this up. You never had more options when it comes to mutual funds right now. Theyre everywhere. At this point, there are so many different kinds of etfs, it can make your head spin. As a side note, i hate the way many of the sectorbased etfs, the ones that let you buy an entire sector, have been warming the way the stock market trades. Something you can read a lot about and get rich carefully. I outandout despise the leveraged etfs that play the market at your expense if you use them. The important thing is this, you have all sorts of etfs and mutual funds out there, and they can all advertise. The companies that run these funds want your money. And one of the biggest mistakes you can make as an individual investor is to give it to them with a few significant exceptions. Unfortunately, this is one of the most common money mistakes out there. In fact, most people in this country equate investing with putting their money in mutual funds. Some 80 million people, half the households in america, have exposure to mutual funds. Many of you dont have a choice. A lot of 401 k plans dont let you pick individual stocks, they just give you a menu of mutual funds to choose from which is why i think all else equal an individual retirement cap, or i. R. A. Is the better way to invest because then you can pick individual stocks in an i. R. A. What exactly irritates me about so many mutual funds again, some dont, but im speaking generally here. What am i really railing against in the general funds . Simple. If youre investing in mutual funds, you might not be getting as good a return as you should be. I dont want to paint too broad a brush. There are worthwhile mutual funds, and ill tell you how to find them in a minute. But first, you need understand the problem with the mutual fund model. My main beef here is with actively managed mutual funds, mutual funds are where people are deciding which stocks are other securities to buy and sell. Unlike hedge fund, Mutual Fund Managers dont get paid for delivering performance. They collect fees from their investors. People like you. And the amount of money they make depends entirely on the size of the assets under management. So theyre really being paid not on performance, but on asset gathering. And thats part of the reason why in study after study, year after year, its been shown that the vast majority actively managed mutual funds underperform. In other words, if you invest in an actively managed funds with the stocks, then its performance fall short of the s p. To make matters worse, even though actively managed funds consistently underperform the market, they have some of the highest fees in the business. Counterintuitive, right . Even if your fund does manage to beat its benchmark before fees, the odds are often good that any outperformance will be eaten up by big Management Fees and youll end up with an underpropering investment versus being in the s p 500 index fund. Of course, there are some actively managed funds with fabulous managers, who consistently deliver terrific results. Ill tell you how to find them another time. As a general rule, if youre going to invest in mutual funds, dont want to be in an actively managed one. The fees are too high, and they could underperform, frankly staggering. You know i think your best strategy is to manage your own portfolio of individual stocks, because i trust you. But for those of you who dont have the time to Research Individual companies or if your 401 k plan wont let you own them, let me tell you the smart way to invest in mutual funds. You want a cheap, lowcost index fund that mirrors the market as a whole. I like one that mimics the s p 500. Index funds have ultralow fees, and with the s p index fund, you have a vehicle that will let you participate in the strength of the stock market without having to spend the time picking individual stocks. You cant beat em, you join em. This may sound like a really simple solution, but i dont want you to overthink it. The whole point of putting your money in a fund is to save you time and effort required to manage your own portfolio of stocks. Thats why i think its insane when people start owning multiple mutual funds. By its nature, a fund should be a diverse fund. Now i know there are a lot of sectorbased funds and etfs out there, but theres really no reason for homegamers like to you have exposure to them. If youre going to take the time to play individual sectors, it would better spent picking individual stocks. You want the best one in the sector fund. The vehicles are for trading, not investing. Mean etfs require rebalancing any day, and that can take a longterm toll on the longterm performance. Theres some exceptions here. Its a very simple way to play gold rather than storing gold in your house or even in a bank. In general, if youre not a pro and not managing a portfolio, then individual stocks, then you probably shouldnt be fooling around with an etf either. And for etf index funds like the s. P. Y. , its better to invest in via mutual funds because they dont have the big daily rebalancing costs, and they as reenvest in dividends immediately which is exactly what you want. Im sure some will say thats too difficult. Theres always some etf thats better. I just like the pure and simple, lowcost, s p index funds. Heres the bottom line. At the end of the day, i think a cheap s p 500 index fund is the least bad way to passively manage your money. Better than the vast bulk of actively mutual funds. Again, vast bulk. There will always be exceptions. But an index fund owns everything. The good, the bad, and the ugly. If you do have the time, i think you can beat the performance of an index by picking stocks yourself. Its one of chief reasons i do the show every night. If you dont have the time, dont overthink it. An index fund indeed the best way to go. For more financial advice, please check out yourmoney. Cnbc. Com. Yourmoney. Cnbc. Com. After the break, ill try to save you more money. Coming up, ride the rotation. Theres a changing of the guard happening right now in the market, and if you dont adjust, you could be left with a sinking portfolio. Cramers got the moves you need to make right now. [ male announcer ] meet jill. She thought shed feel better after seeing her doctor. And she might have if not for kari, the identity thief who stole jills Social Security number to open credit cards, destroying jills credit and her dream of retirement. Every year, millions of americans just like you learn that a little personal information in the wrong hands could wreak havoc on your life. This is Identity Theft. And no one helps stop it better than lifelock. Lifelock offers the most comprehensive Identity Theft protection available. 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You have so much to protect and nothing to lose when you call lifelock right now and try 60 days of Identity Theft protection risk free. 60 days risk free. Use promo code onguard. Order now and get this document shredder to keep sensitive documents out of the wrong hands. A 29 value free. Jimmy, whats the matter with my stock . Whats wrong with it and then fill in the name of the stock. Thats what im hearing about tons of the highpriced earnings multiple stocks as the market has taken a fancy to the cheap and expunged the expensive. Sell, sell, sell its all part of one of the biggest rotations ive seen in years. Buy, buy, buy sell, sell, sell that im trying to teach you about, and there may not be anything wrong with your company. Nothing wrong. Theres just something wrong with the stock. Right now at this very moment, the consensus is shifting. Theres a belief that the economy is Getting Better and, therefore, its time to rotate into the stocks of companies about to produce sharply higherthanexpected results, because theyll be aided by a stronger economy. Theres nothing unusual about this move, except its been so long since weve had a genuine economic expansion that its taken a lot of people by surprise. They cannot understand, for example, how come a salesforce. Com or a workday, two incredibly good but highly valued companies can have stocks that go down while companies with prosaicic unexciting, more boring, slower growing, like hewlettpackard, can have redhot stocks. I know its one thing people cant get their arms around. Its why i wrote get rich carefully. I try to explain rotations. I dont want you to panic and blow out of stocks simply because the stocks are damaged, but the companies they represent are actually healthy. It is so seductive, though. The portfolio manage of my Charitable Trust, we talk about this every minute. Okay . Every minute. So lets consider hewlettpackard for a moment, because this is one of the classic ones. As the stock rises, and you know its been rising, were getting little snippets of good news that many think are driving the story. For example, it rallied from the 20s to the 30s. I hear some reasons in particular that explain it. Such as the companys decision to boost its dividend, or maybe even a brandnew threedimensional printing initiative which is rolling into x1 and 3d, and stratuss. Those cant always play a role, believe me. The main reason for this move up in hewlettpackard is the simple fact its considered a gigantic play on the growth of the economy. Not printers. The economy. And this normally slowergrowing company is about to have an acceleration in its sales and earnings. Thats what people are predicting. Why do people think this could happen . Complex question. But many investors put their faith in the Federal Reserve and in the fed chair, janet yellen. She made it clear just this wednesday that things are Getting Better in the economy. And that, more than anything else, not printers, not pcs, not anything involving the dividend, is whats driving hewlettpackard higher. You get more business formation, more growth for the enterprise, more computers ordered and a slowergrowing company surprisingly puts up better numbers. Its not just hewlettpackard. Companies like intel and microsoft are in a similar position. If hewlettpackard is selling more equipment, that means theres more demand for the chips inside and the chips invariably come from intel. We may think of microsoft as a loser in the big battle against apple when it comes to buying personal computers, in fact, though, microsofts biggest cash, its about the enterprise business, company, corporate. And that will grow faster if the economy is getting stronger. Even oracle as reporting a terrible quarter earlier this week is barely down because of the weakcompany, goodstock phenomena. This kind of logic is popping up all over the place. You may have noticed the sudden jump in at t. Hey that makes sense, too. If you use the same prism, because one of at ts biggest businesses is the irreplaceable land lines that still need to be installed in you open up a company. Expanding the corporate office. As long as new companies arent being created and theres no additional hiring, then demand for this kind of boring business is, indeed, the told doldrums. But if the environment gets better because the economy is better, youll see a dramatic increase in a business that has very large gross margins, and thats whats behind the move in at t. Not anything particular that is happening at at t, but the economy. How about the other side . Whats ailing . For example, salesforce. Com. The stock is up huge, probably almost any company i follow in the last few years. Heres the answer. Nothing is ailing salesforce. It will grow in the same consistent 30 category, one of the rarest breeds that can do that. When the economy was more stagnant, it was very attractive to mutual fund owners. At this very moment, that kind of consistent growth just doesnt have the appeal of, say, a microsoft with the episodic possibility of a big jump in orders because of corporate expansion. You must always remember Money Managers dont just crave growth. They crave the fastest growth year over year out there. And for 2014, the year over year growth for Microsoft Might be larger as a percentage than the year over year at salesforce. Com, or at least give it this. The earnings surprise beat may be bigger than what salesforce can offer. That can trigger the buying and selling. Not only are the Money Managers looking for the biggest earnings increases courtesy of an expanding economy, they also like to buy the growth on the cheap. Right now, the hewlettpackards are cheaper on a price to sell. They sell at a multiple to earnings. Not sales like the cloud plays. And their earnings multiples are much cheaper than the average stock in the s p 500. So these managers, they think theyre getting supergrowth at a very reasonable price. Now, this kind of rotation applies to all sorts of sectors. Have you noticed the decline in the most highly valued biotechs of late versus the ipos . I know you think of them as health care industry, but for the purposes of the stock market theyre consistently fastgrowing names like a salesforce or work data. I dont mean to pick on those, but those are really great companies. If you asked me to talk about sectors, id be tempted to tell you gilead is literally the same kind of company as salesforce, the kind that can do the number and regardless of the economic environment. An thats precisely whats not in demand right now with Money Managers. They want something they can have what i would regard as being called inconsistently strong growth. That might end up looking cheap when that growth occurs. Consider the conundrum of the stocks, companies tied to the economic cycle, that cant thats right, cant make the numbers without global growth. Caterpillar, the machinery company, and steel corp. , the Steel Company in louisiana. I got a call from a viewer yesterday who asked correctly how caterpillar can possibly rally in the faces of truly terrible monthly inventory numbers in this country. Its going to have a weak quarter but maybe not make the numbers. But right now, the world has been turned upside down. If caterpillar heats up like yellen and company believe the economy will, then it will be mana from heaven. Theyll meet the demand and wont have to cut the prices. Same deal with new core. Heres a company that preannounced the downside this speak. The stocks went up look what nike did. It did a great number. Only got it down for currency and slaughtered. Is it counterintuitive that new core could go up . Not at all if you think a manager wants to play a cyclical stock. Whats he looking for . New core. New cores exactly the right place to be. When does the rotation end . We dont know. If the economy expands, the rotation could go on for sometime. The history dictates that consistent growers will get too cheap to ignore, while the industrials will get too expensive once they deliver the beats, either because the economy weakens, and then its a wrong call. If you look at america like the fed is doing, another reason to Pay Attention to the chinese pmi report i just discussed. Thats going to come out when we come in monday morning. Heres the bottom line. Please before theres nothing wrong with your company. Sometimes bad things happen to Good Companies stocks. This just happens to be one of those times, thanks to this rotation out of consistent growers and into cyclical stocks that boom along with the economy. Graham in new york. Graham . Caller jim cramer yes. Caller my question, krispy kreme, low stalk price below where it was before the Fourth Quarter end of year results. Do you see this as a solid buying opportunity, or is the stock price in danger of falling even further down the doughnut hole . When you talk about krispy kreme, im going for quality. You look at a starbucks, Dunkin Donuts, theyre all in the same business, higherquality companies. Theyre more consistent companies, and they can do very well, because Dunkin Donuts is moving internationally and starbucks isnt just an american company. Round and round she goes, where she stops hey, its not the stock its the rotation. Sometimes bad things do happen to good through the stocks of Good Companies. Think of volleyball. Set, rotate, spike the growth and go with the cyclicals. Thats what the market says. Is it right . You have to decide. Stay with cramer. It is time it is time for the lightning round. Requesting. Sell, sell, sell play this out and then the lightning round. Are you ready, meg good round, chris in pennsylvania chris . Can sony help me get rich . You know what, i think its kind of a dud. I think its kind of a catalyst. Im going to say, dont buy, dont buy. How about brook in new york . Brooke . Caller oh, hi. Hi. Caller im interested in teledine Defense Space . Thats a good stock. Lets go to tom in pennsylvania. Caller jack. I think this is one of the best fastfood companies out there. I like the remake of the stores. Tony in new york. Tony . Caller yeah. Go ahead, tony. Caller hi, jim. My question is this. I want to find out what you think about unum. Its a very inexpensive stock. I say buy. Josh in pennsylvania. Josh . Caller hey, jim. I want to give a big booyah to our investment future guy. I bet hes done a great job. Whats up . Caller my stock is byou. Cyou . Okay, i like bidu. Thats the only chinese stock im recommending. And that, ladies and gentlemen, is the conclusion of the lightning round. Announcer the lightning round is sponsored by td ameritrade. Froth. Come on, has to be a beer, right . Yes, all these redhot biotechs represent the danger of froth. Certainly more frothy than this. Now flat guinness. Brilliant. Theres specific areas that are virtually overflowing with froth. It is st. Patricks day. Thats worth having a guinness over. Brilliant caller booyah, jim i hope youre not too hung over from the green beer. Jim, a big st. Patricks day, proud to be irish booyah. Hey, jim. You looked so cute last week on the oil rig with your hard hat. You liked that . I thought i would use it in this studio, but it seemed like artifice. About to head to the starbucks annual meeting. Its almost showtime. Its the booyah blend. Ah put your seatbelts on. Please welcome Oprah Winfrey oprah time you get a child, you get a child, you get a child. You get a child. You get a child. Everybody gets a child its timely upgrade yesterday by morgan stanley. The stocks are not expensive. Did you really get off a plane . Yeah. I dont believe it. I was in seat 4d. The rest of my team was in the back somewhere. The housingrelated complex, its coming back. Just take a look at pool corp. , pool. For you homegamers. A company that distributes all thing Swimming Pool related. The stock roaring lately. Now only a point away from its 52week high. Only 13 of its pool business comes from new Swimming Pool construction, but 29 has to do with replacement and refurbishment and a ton of catchup in this business, and the rest to do with maintenance which is something you want to do if you want to go swimming. Heres the thing about this business. You dont spend the money, refurbish your pool if youre underwater on your mortgage. But we know people spend three times as much on their property once its above water, and that transition from having negative to positive equity in your home has been happening for millions of people over the last couple of years. That means a lot more demand for their products going forward, especially since the median Swimming Pool is now more than 15 years old. At the very least, these pools are begging to be snazed up, if not replaced entirely, especially since it can help you sell your house. Not only that, pool corp. Is flirting with new highs. Even though we just got out of the worst time of year for this business. Just imagine where the stock can go over the summer. Oh, and the whole pool industry is very fragmented, giving this company a lot of room to take share. Lets check in with manny perez de la mesa, to find out more about how his company is doing. Welcome to mad money. Thank you, jim. Sir, i was looking at your financial results. And i see that your adjusted ebitda and operating income margins are just now getting back to where they were in 2006, and yet at the same time, in 2006 were building far more homes. Does that mean if we go to a level where were back to building a lot of homes that the ebitda could explode from here . Well, i wouldnt use the word explode, but it certainly could be a lot higher than it is. As mentioned in your intro, we are still in the early phases of recovery from a housing and certainly pool construction standpoint. And remodelling replacement activity really began modestly in 11, expanded a little further in 12 and 13. We believe we have a long ways to go there, as well. So both remodelling and replacement activity, as well as new pool construction, have a long ways to go to get to historical levels, and then the leverage there that you mentioned in terms of operating results, whether it be ebitda or operating income, was, i think, important to state is that weve continued to grow our business, adding to our networks whether it be opening of new locations or also layering in some small acquisitions. And, in fact, those new locations and small acquisitions come in with very modest to no ebitda per se. So when you look at our base business, excluding those acquisitions and new locations, we, in fact, in 13, were already above from an ebitda margin standpoint, above our highs in 2006, and thats still with new pool construction 70 below what they were in 2006. Thats what has to be happening. You have to be taking share. Because if you have this much revenue and this much earnings when were still nowhere near where we were, then it must be from maybe out of the littler companies that, you know, momandpop companies . Is that who youre taking it from . Well, were taking share across the board. We compete with both small and local and regional distributors, but we also compete directly with mass merchants that sell to that consumer that maintains their own pool. But whats important here and fundamental to understanding our story is we continue to invest, and we invest in our people. We have a great team of people, over 320 locations in 11 countries. And our people are what makes the difference. Thats a key differentiator that we have. And those people are armed with tools and resources that are unique in the context of this industry. And we continue to invest in our people and those tools and those resources through the downturn, understanding full well that the market will ultimately stabilize and eventually revert to normal, and, therefore, were looking to continue to capture share as we have historically throughout our history. Okay, well, today i got my bill. My guy said, listen, if you open your pool early, you know, well give you a discount. I said to myself, you know, its freezing. I dont even want to think about it. There are other years, sir, frankly where it was real spring, and i said i couldnt wait to get it open. This is happening across the country. Will the weather be a detriment to your business in this quarter . No. When you look at it and youre based in new jersey right, exactly. Where you are, typically pools are opened in the springtime. Whether theyre opened in april or early may. Thats normal. And the fact we had an exceptionally cold winter december, january, february, a lot of snow in your area, in fact, a lot of ice throughout the southeast and parts of the southeast and middle america. That really doesnt affect us, because pools are naturally shut down during that period of time. All right. And then, the last time what i wanted to think of, given the weather, i know my pool doesnt its cracking. You know, you have this 15year period. I know that i have to do more work because of the weather. Does that play a role in your business . Sure it does. Pools have two components. You mentioned earlier maintenance and repair. Right. Maintenance and repair activity is steady. In fact, during the course of the downturn, key products like chemicals, parts, accessories, we continue to grow our sales of those products, 2007, 8, 9, 10, as new pool construction was collapses 80 . The product categories revolving around pool maintenance and pool repair continued to grow. Youve got a great story, sir. I am so glad you have come on. Ive not heard from pool corp. Before. Its been a remarkable stock. Thank you for coming on mad money. Thank you, jim. Appreciate it very much. Thats the ceo and president of pool corp. Now you see why the stock is trading at a high. Its a terrific buy. Stay with cramer. Forget the brackets. You want some genuine march madness . Look no further than the ipo market these last few days. Its absolutely crazy out there, people, with small deal after small deal coming public, and immediately going to an outrageous premium. A10, border free, amber road. And literally about a dozen other companies that have taken advantage of the widest window i can recall to come public. This is an extraordinary moment. Extraordinary moment with many of the Companies Using buzz words, cloud base, big data software, companies that mimic salesforce or cornerstone or demand or work day and its froth personified. Lets not sugar coat it. The money pours out. In reality, theyre delivering great numbers. It doesnt matter thanks to the rotation i told you about earlier. I find this rotation to be i hate to use this word frightening in its speed and breathtaking in its frothiness. Why . First, we dont know anything about the new Companies People are plowing into. Half of them sound like beers for heavens sake. Sure, some of them are real businesses with real prospects. That brings me to my second point. Only a small floater is coming public. So the large institutions need to come in the aftermarket. Once the stock starts trading. To complete the buy. Remember, thats how you get these enormous day pop us. You restrict the growth and then you get 3 of the stock which is usually amounting to a position thats too small to matter to that client. Then the same client pays up in whats known as the aftermarket to buy whats necessary to get a full position. And is able to use a blended average to end up with a decent cost basis. So lets take a fine pillsner like amber road. Sorrier its actually a Management Software company for global logistics. At least its not a springsteen song. Its shares at 13 bucks and opens at 17. 50. How does that happen . Maybe a multibillion mutual fund got 100,000 shares at 13, the ipo price. But it wasnt enough to go around or make a difference to the overall performance of the fund. The fund can then buy another 100,000 shares at the opening and, therefore, own 200,000 shares at 15. 25 price, which might make it a full position. Thats not bad considering the stock ultimately closed at 17 today. By the way, i dont necessarily want to mean to pick on amber road. It does probably have pay, definitely tastes like coming home. A10, thats the champagne of bottled beers. I didnt mean to pick on amber road. 30 of the stock outstanding did come public, far more than its compadrie, a10. Borderfree and pay lossity. Plus, theres a lot more than some of the worst of the sliver of the float deals of this year, including yelp, only 10 of the float and linkedin just 7. If they worked fine, whats the fly in the ointment . First, amber road is a relatively unseasoned company, the fast Revenue Growth is losing a lot of money. Thats fairly typical of the deals. The appetite has been whetted. Its likely a secondary offering will come well above the ipo price, usually. That alleviates the tightness and tends to send down a companys stock almost instantly. Take fire eye. Heres one of the hottest stocks in the universe. An acknowledged leader in security software. The software flagged the issue fire eye had been a huge winner trading up to 96 not that long ago. Less than a month. Sure enough, the stock spiked to the level 96. The company filed a 14 million share secondary offering enabling insiders to cash out, and the deal ultimately priced at 82. Next then you know, fire eyes below 70 . Thats right. 96 to 70 in the blink of an eye. Remember, this company while losing money hideous decline occurring right as we learn the target turned off the fire eye program, which may have detected the hacking thats hurting them so badly. I think the cautionary note here is the yelps and linkedins are the exception. I think fire eyes the rule. Sure, you made a lot of money if you rode fire eye to the top but you need to get out when the insiders sold. So many insiders sold to the whole dot com edifice collapse. You can always get in later. All im saying, be careful. Theres froth everywhere in the ipo market and many of the stocks could get crushed maybe when they announce secondaries in the not too distant future. Dont confuse ipos with ipas, although both can indeed make you drunk if you have too many of them and you just keep knockin them down. Stick with cramer. [ male announcer ] meet jill. She thought shed feel better after seeing her doctor. 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So, for the 10 years that youve been married, youve been fighting about money. You have 9,000 in retirement. Thats thats bad. Thats bad, you guys. And you ask me, can i afford it . Id love to finish the basement, make it into a big rec room for them and also a man cave for the adults to entertain. A man cave . A man cave is something fyou. It has nothing to do with your wife