The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Begins with back pain and a choice. Take advil, and maybe have to take up to four in a day. Or take aleve, which can relieve pain all day with just two pills. Good eye. Im jim cramer. And welcome to my world. You need to get in the game. Firms are going to go out of business and hes nuts, theyre nuts they know nothing i always like to say theres a bull market somewhere mad money, you cant afford to miss it. Hey, im cramer. Welcome to mad money, welcome to cramerica. Other people want to make friends, im just trying to save you a little money. My job is not just to entertain you but to educate, so call me at 1800743cnbc. Even on days like today where the fed didnt say anything we didnt already know, but people used it as an excuse, an excuse to take some profits. Dow dipping 44 points, s p sinking. 39 . Nasdaq declining. 36 . You can feel the pain the house of pain. Its the pain of the bearish Money Managers being overridden by the you guessed it. And thats precisely why i dont expect this pullback to last too long. Because we have a powerful force pushing this market higher. Im talking about the herculean attempts by Money Managers to keep up with the galloping averages and the heartache those averages are causing. All aboard all right. Lots of people have been talking about the return of the little guy to the market and how thats driving stocks higher. Oh, yeah, its a factor. Its only a piece of something much bigger that may be behind a huge amount of this historic january advance that i got to put in context for you and ive got to do it tonight. It all begins with a Fourth QuarterGross Domestic Product number we started the day off with. Here we go again,. 1 drop. Especially when you consider the 3. 1 gain we had in the previous quarter, thats amazing. This number was mindnumbing. When i saw it, i shouted omg. But of course, no one could hear me because at that moment i had no voice whatsoever. Instead of this ridiculous froggy master imitation im doing right now. All right. Anyway, the gdp number reeks of recession. But in truth, many things that are happening in this market stem from that number. I think two factors caused this incredibly poor gdp performance. One manmade and one caused by mother nature. Im talking about all that chatter about the fiscal cliff, and hurricane sandy. Lets start with the former. You know what . We never have a good memory for the fear certain events engendered, but it was only a month ago that our country seemed on the verge of an astounding series of negative events courtesy of that cliff. The air was thick with charges and anger and partisanship. Frankly it was kind of insane. The worst since congress after the civil war. It was a terrible time for the republic. We were the worlds laughing stock, it was impossible, impossible for individuals or companies to figure out what they could possibly do without knowing what would happen with their taxes. The uncertainty was horrendous, the mood sour. We were getting all sorts of cross currents about what would happen with corporate and personal taxes. Were they going to raise taxes, were Capital Gains going up . Would the alternative minimum tax ensnare millions of people . Would businesses have to start a whole brand new round of layoffs . Executive after executive came on this show to say, look, we cant do a thing. Whats the point . We will just have to undo it. Business confidence plummeted, and the idea of forming a new business. Well, remember when the ceo of paychex came on and talked about the paralysis caused by the cliff . Who would leave his job to start a new business in that environment . Okay. Retail sales werent that bad. But they nose dived right at the end of the quarter. Retailers were afraid to restock inventory, figuring that spending would drop off the cliff right along with the nations finances. It was all in all a very bad time for our nation. Now, overlay the storm of the century for the northeast, one that shut down the wealthiest area of the country for several weeks and caused what ultimately may be 100 billion in damage. You had the physical shutdown from the storm neatly and miserably dovetailing with the mental shutdown caused by washington. The result, the abysmal and artificially reduced Gross Domestic Product number we saw today. Most Money Managers are fixated on that topdown analysis. They look at those numbers, they care, they correctly detected the cessation the business in this country was undergoing. They pulled in their horns because of it. Some cases, dramatically. I understood it. Say we came in to 2013 over the fiscal cliff. I would say the vast majority of Money Managers out there believed we could be down 5 , 6 , 10 on the s p, and there was no sense in taking that kind of beating. Why not raise cash coming into the year . Why not raise cash the last week of december . At the same time, individuals wanted to beat the higher taxes. Many cashed out on their gains in their personal accounts, in their i. R. A. S. They raised cash knowing they might need that cash to pay much higher taxes, the taxes that a failed attempt to fix the cliff would produce. A huge amount of dough moved to the sidelines immediately. Companies themselves accelerated dividend payouts, putting tens of billions of dollars into the hands of shareholders who had no idea what to do with the money other than sit on it. So we came into the new year and we were paralyzed. Inventories lean, huge part of the country damaged by a storm, totally dysfunctional food fight animal house government, and were brimming with cash everywhere, for the biggest rainy day of all, the day we jumped over the cliff. But then we dont do the cliff dive. And contra to stock seer bob dylan, the hard rain, it didnt fall. In fact, we didnt get that much. We didnt get dinged except for the rich, who are the most able to handle it. All right, yeah, i can make a big deal about payroll tax thing, thats no problem. Nevertheless, its a small fraction of what we really feared. Stocks kept their favored status, including relatively low taxes on dividends. Something i do not know a soul who predicted. So we get a huge case of sellers remorse and the stock money comes right back in, the business that was put on hold comes pouring back, hiring begins again, business formation restarts, inventories get rebuilt and we get a totally different january from one that anyone expected. Sure we can try to make a big deal out of this sequestration. I wont. I think its a huge mistake to do so. We have a breakout of peace in washington and the big business money has flowed to eric cantor, not Speaker Boehner whos viewed with suspicion by corporate executives. And cantor doesnt want the business of the country derailed anymore. He recognized thats, well, bad for business. All aboard that means we get either a peaceful solution on sequestration or we get the government to cut. Which, by the way, most americans view as virtuous. On top of that, you know what we do . We keep those super low rates that Ben Bernankes fed committed to again today, making dividend stocks with their terrific tax status ever more cherished. Meanwhile, housing is gaining steam, inventories are lean. At the same time, we havent even started the massive sandy rebuild. This confluence, while fabulous for our nation, happens to be a nightmare for Money Managers. A ton of the money coming in is going right to the s p 500, and thats off like a rocket. Plus the dow jones average chock full of companies that benefit from overseas markets which are improving, including europe, yes, europe, well, theyre trooping higher too. That means bearish Money Managers, they have to scramble to keep up with the joneses and the s ps. Theyre competing with the passive indices to justify their own reason for being. The gigantic buybacks executed every day make the job more difficult. Theres not enough stock around to sate all these buyers. Okay. Now at a certain point, the markets got to cool down, as those who took the big risk of buying when others were selling, well, you know what . They ring the register. They cut back some of their holdings. Thats todays markets to a tee. Plus, when valuations get stretched, as theyre being now, earnings have to be pretty darn good to justify the runs, although we all know that disappointment produces dips that bring in buyers, not sellers. But good earnings like we had tonight from sky works, jdsu, qualcomm, citrix and, you know, decent numbers from facebook, they can and probably will cause a buying panic with all of their bright tidings. All right, heres the bottom line. Its clear. Fund managers have to chase stocks and put money to work. On up days and even down days like this one to keep up with the averages that are benefitting from washingtons exit from the business pages, and that robust Housing Market aided by the coming sandy rebuild. We can have breathers like today, but you know what . They are pauses that refresh and nothing more. Robert in new york. Robert . Caller long time listener from day one, mr. Cramer. Firsttime caller. Well, tonight will be a challenge to listen because of my voice, but i appreciate it. Caller clf recently announced a Fourth Quarter 1. 4 billion noncash goodwill impairment charge. Jim, can you please explain what that means and how it plays into dave einhorns bearish downgrade of iron ore and the rampup in china. Is cliffs a buy, hold, or sell . Im not a cliffs guy. They overextended themselves. If you want to play, my Charitable Trust owns vale. Theyve already reduced expectations and i think it can go higher. Theres a powerful force at work, people, in this market. Money managers desperate to keep up with the averages. I think it will make pullbacks like today brief pauses on a trip to higher levels. Mad money will be right back. Coming up core position . Oil prices are back in the rise and Domestic Production continues to expand. Wondering how you can profit from Americas Energy potential . Dont miss cramers earnings exclusive with the ceo of core labs to discover if its ready to cash in on crude. And later, battle of the behemoths. The prime time retail king that delivers everything to your door versus the maker of gadgets you never knew you needed but now cant live without. The markets picked its favorite, but could things be about to change quickly . Stick around for cramers take, all coming up on mad money. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Sic music make someone happy its so important to make someone happy. Its so important to make someone happy. Make just one heart to heart you you sing to one smile that cheers you one face that lights when it nears you. And you will be happy too. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Im always talking about the north american oil renaissance, that huge surge in Domestic Energy production made possible by both new discoveries and more importantly new technology for getting oil out of the ground. But i dont stress the value of the technology enough, and how its being used internationally, particularly to explore in deep waters where big oil finds are just now being exploited, given what many people believe to be the permanently higher global price of crude. Its a terrific time to come back to our favorite tech company in the oil and gas industry. Im talking about core lab, clb, a company that uses its expertise to help Oil Producers figure out how much crude they have in the ground. Core doesnt just gather intelligence, they also do production enhancement. They can tell Oil Producers the best place to drill their well bores in order to squeeze more crude out of the oil fields. They show their clients how to maximize their return on the investment in a given oil field. In short, if youre an oil company anywhere on earth, you want core labs to help you get the most out of your assets. Schlumberger and weatherford have started to compete in the space. Now, core labs just reported after the close today, delivered a real good quarter. Earnings coming in 1. 17, 4 cent beat, better than expected revenues, company gave upside guidance for 2013. This is a stock ive liked for ages. We spoke to the ceo one year ago, and since then, core labs is up 10 , good, not as good as s p over the same period. The longterm record here is tremendous. The first time we had core labs on the show back on august of 2006, stocks given you a 228 gain with reinvested dividends. Weve had him on the show seven times since mad money began, each time core labs was higher than the last. Youre going to want to pay close attention now that we have David Demshur back. Find out more about the quarter and where his companys headed. Welcome back to mad money. Hey, jim, thanks for having us back on mad money. Glad to be here. First, do we have a lot more oil than we realize both in this country and the world . Because the places youre exploring, most of them ive never even heard of. Well, yeah, jim, if you look at some of the Unconventional Resources in north america, theres a bountiful number of plays that are left to be discovered. And so the amount being produced today is at about a 15year high in crude Oil Production. When we look at plays like the bakken, the eagle ford, and core labs believes theres one, possibly two more Oil Unconventional plays left to be discovered in north america. So, yes, with added technology, with fracking and our fracture diagnostic technology, we are helping our clients recover more and more of this unconventional oil. There may be two more big ones that we dont even know about yet . Yeah, we believe theres one, possibly two more left in north america that will come out over the next couple of years. Thats incredible. Now, i also detect some countries, looks like to me that mexicos getting back in the game and starting to drill much more seriously than it used to. Yes, jim, thats exactly right. Mexicos looking offshore now in the deep water. As you know, the gulf of mexico deep water has been prolific, and that trend curves around towards mexico. So you will see over the next several years, a lot more deepwater plays offshore mexico. We believe theres potential there for billions of barrels of additional recoverable oil. If you look at mexican production, its off some two million barrels. They need this Deepwater Development and core lab will be there to help them. I know mexicos deregulating the gasoline. They have much more money. Theyre committing right now to much bigger projects. Yes, and this includes, again, the offshore where some of these wells could cost 100 million to 300 million to drill. And when wells are that expensive and these environments are that hostile, you need a lot more science to be used, and when a lot more science is used, they call on core laboratories. We look at their rock properties, their fluid properties to ensure that they recover the optimal amount of oil and gas every day, but more importantly, the amount of maximum oil to be taken out of that reservoir over the life of the production of that well bore. Youre also the First Company ive seen that is actually really starting to make money in iraq. Yes, thats right, jim. We now have 12 projects in iraq. They are some of the most profitable in the company. We are working on the redevelopment of those fields in the south. Some of the big fields there. But also, theres been discoveries in the north up in the kurdistan area. Its difficult to push more oil out of those. However, using core lab technology, were going to show our clients there whats the best way to have maximum recovery from these reservoirs that are undersaturated in natural gas. And youre going back to older fields. I know the north sea. We had statoil on. The north sea is supposed to be running out of oil, but theyre bringing you back in to find more . Thats correct, jim. Were working on a number of projects. A Record Number of projects in the north sea out of our aberdeen advanced technology center. And what were trying to do is lessen the amount of water cut and increase the amount of Oil Production out of some of these old wells. The north sea started to produce oil and gas back in 1975, so it is an aging petroleum province. Aging petroleum provinces are perfect for core lab because our technology will help them as you say squeeze more oil and gas out of those older fields. Last question, a lot of the other companies that i deal with and service, theyve been hurt by weak Natural Gas Prices in the United States. That is not hurting core labs, is it . Thats right, jim, if you look at our technology, its better applied to International Crude Oil related projects. So if you look at our revenue mix right now, we are fully 80 crude oil and 20 natural gas. Half of that natural gas revenue comes from large lng developments like we have novell in the eastern mediterranean, anadarko in east africa, chevron and exxon off the west coast of australia. So these large lng plays play into our strength, as well. Well, ive got to tell you. This is the best quarter ive had you on of all of them. So thank you very much, David Demshur. Thank you so much, jim. Our seventh time has been a real pleas