Im going to take advantage of it, because im trying to make some money around here. After an amazing week but a hohum day where the dow dropped 16 points and the nasdaq gained 0. 3 , i want to talk to you about buyable dips, google and ibm. You might think im sticking my neck out. What i am saying im doing is introducing the notion of longterm opportunity. Its not a copout. First off, we know google and ibm both disappoint ed people last night. We know that because they went down after earnings. Thats what happened. Its undeniable. In the trading world, a stock that goes up after reports is a good stock. And a stock that goes down after reports is a bad one. Pretty simple. Thats because anyone who bought the stock for the quarter, in other words, people are expecting upside surprise, simply got it wrong. In the world of trading you buy a stock for a catalyst. You sell no matter what, good or bad. Thats discipline. Having the discipline to recognize that you bought something for a trade and it just didnt pan out. But investing, which is what im trying to teach here, is quite different. It has a different set of rules. Plus a different mindset. Investing is not catalyst driven, its not about trying to predict the quarter and scalp a few bucks. No. Its about longterm decisionmaking when you were given a chance and even though the chance may seem scary, you have to take it. Which brings me to google and ibm. Any trader knows that google and ibm failed as trades last night, that is unless you were shorting them because they both got hammered. However, if youre an investor and trying to catch not just a few points but something big, meaningful, you have to buy, not sell these two stocks, counterintuitive . No. Listen. Lets start with google. What did cause it to go down . What was googles crime . Simple. It missed wall streets estimates. A company that misses estimates is a company that immediately gets put in the penalty box, immediately as in that minute. But understand something. Unlike most companies, google doesnt actually help the analysts make their estimates. Most companies do. Most companies provide guidance on their conference calls. Right before management takes questions, they outline how the companys earnings and revenues will likely be for the next quarter and the next year. Google, however, is a rare bird. It doesnt give guidance. The only other Major Company i follow that doesnt give guidance is berkshire hathaway. Warren buffett wants to win long term, same with google. Which is unlike the vast majority of companies you hear about, when google misses the numbers, its far less important than pretty much if any other company did the same thing. Thats because frankly, the analysts are clueless about what google can really earn when they try to get the numbers. Its not like they missed their own forecast. They dont make forecasts. The number that disappointed was only disappointing in the eyes of the analysts. Now, you might wonder who else matters in the process other than analysts. Big deal, jim. All that matters was the analysts. Thats where i can help you. The Portfolio Managers themselves matter. They look at google. In a couple of days they wont be looking at it in the vacuum of the internet sector. No, Money Managers will look at google versus all the other stocks in the s p, all the other stocks they own. Theyll see theyre missing an opportunity to own a company thats growing, remember these numbers, theyre going to be important, at a 19 clip yet it sells for 17 times next years earnings estimates. Remember how Money Managers value stocks. You always have to go back to this lesson. Make it an apples to apples comparison. To do that, they look at the price theyre paying up for the companys future earnings, also known as the pricetoearnings multiple. They pick googles growth rate against the companies that they currently own. Lets make it easy. Suppose a Portfolio Manager owns cocaco cocacola. Coke is growing at 6 . Whats the price to earnings multiple . 20 times earnings. Go back to google. Weve stipulated that it sells at 17 times earnings. Lets see. From the Portfolio Manager perspective, hes paying 20 times earnings for 6 grower like coke. When he can get a company that grows three times as fast for 17 times earnings, a discount. Many Portfolio Manager will be unable to resist google and will easily sell cocacola to pay for it. Not today. Its too ugly. Take panera bread, a 13 growth rate, sells for 24 times earnings. Why own panera . Google, these are just two growers. Why own panera when you can get faster growth from google. Kellogg grows at 5 but trades at almost the same multiple as google. These Portfolio Managers will wait until the smoke clears, the stock settles and theyre likely to sell a kellogg for a google. The fact is on a growth basis, google is cheaper than any almost anything in the s p 500. Believe me, in a week, most Portfolio Managers will forget google missed the analyst numbers and instead be saying thats too cheap to ignore. Thats how this terrible trade, terrible, turns into a terrific investment. But you might say what happens if google keeps deteriorating . As missing the analyst number applies . Its not deteriorating at all. Theyre spending a lot of money to promote future growth, something you want the company to do. You want your company to invest in future. Not all should be buying back stock and giving big dividends. Wasnt that was wrong at microsoft, hewlettpackard, dell . I think so. Yes but arent they being crimped by the desktoptomobile revolution . I think google has the best mobile product out there. I trust management when they say they have a game plan to make more money from mobile than desktop. You have to have patience here. Do you . If so, i think google is a fantastic investment, at a great price. How about this ibm, wasnt that a miserable quarter . No revenue growth. Revenue declined, right . Suspect cash flow. Miserable earnings that seem to be made by the skin of the companys teeth. The house of pain. Doesnt ibm has to be sell, sell, sell. Yes. If you bought it for a trade. Absolutely not if youre looking for a value stock based on next years earnings like Warren Buffett who is a big owner. Next years earnings will by this Time Next Year ibm should be hitting the mark because of the change at the company. If you wait until next year, the stock will be too high. It didnt turn around this quarter but i think it will. You have to get in on the weakness, even though you might hate ibms current configuration. Buy it now when its on sale. Google and ibm, two trades that went bust. Two investments that can now be started at excellent discounted prices. The bottom line, one mans trash can be another mans treasure. Provided that the first is a trader who only cares about the here and now and the second is an investor who cares about the future. Nick in new york, nick. Caller hey, jimmy, how are you . How about you, partner . Caller thanks for your insight and sticking up for us little guys. Thank you. Caller the voice of reason, all this crazy volatility, my question relates to b g foods. Its featured on your show. I bought it at 12. What is your advice now based on their recent quarterly result which is are shy on earnings . Right. Thank you for taking action. Thats my companion product that i do with my charitable trust. B g foods i felt was an attractive idea. It yields 4. 3. Was it a perfect quarter . Absolutely not. Is david doing a good job . Yes. Take out the invested capital, let the rest run. I think we helped you a great deal for b g foods. Thank you for what you are saying about the little guy. Dubravka in massachusetts. Caller i am here. I have question about zebra. You recommended it a couple days ago. It dropped like a rock 10 . I like to know, do you still believe its good or not . Oh, yeah, its real good. Sometimes the stocks dont do what theyre supposed to do. It went up 8, reversed 8. I think buying that Simple Technology business is a terrific business and youll hear much more about zebra from me within the next two weeks. Lets go to madelina in new york. Caller hi, jim, how are you . Im real good. How about you . . Good. Caller thank you for taking my call. I enjoyed reading your book. I have a question for you considering cldx, celldex therapeutics. We rated that our great previous analyst ted graham pointed that stock out in the midteens and we caught a double and left it and we have not looked back. I have not looked at it because it was a trade, a specler stock. It was done and im not looking back. Im sorry. One mans trash is indeed another mans treasure. Case in point, google and ibm, trashed by the traders, made treasure for the investors. Dont go anywhere. I have an exclusive with the bank that has had the best performance of any bank we follow. Fresh off earnings. Plus, there are concerns about the company that keeps the lights on in new york. Im checking if the future is still bright for con ed and the white hot utilities. To get a read on the economy, sometimes you need elbow greece, snaple and tools, coming up next. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet, madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Forget about all the problems we have with the stock market. When you look at the actual companies, especially the ones that benefit from the improving economy, they are doing pretty darn well. Take snapon tools, sna, maker of tools they mainly sell to auto repair shops. Through 3,500 vans in the United States. They sell to agriculture, construction, mining, Power Generation clients, have a bountiful european business, some asian. Snapon is a nonstop innovator creating new tools and diagnostic systems to make work easier for professionals doing critical tasks. The company just reported this morning and they earned 1. 62 a share, an 8 cents over year. In particular the commercial Industrial Sales rose 9. 1 driven by a fabulous surge in the european segment. Stocks has given us a 23 return since we spoke to the ceo last july. It has more room to run even if todays 3. 38 rally. Lets take a closer look with nick pinchuk, chairman, ceo and chairman of snapon to learn more about the quarter and the prospects of the company. Welcome back. Great to see you, jim. There were only 28 stocks on the s p that hit an alltime high. Yours was one of them. Right. I think its because you innovate even with such things as wrenches. Correct. Thats the thing. Snapon is a type of company thats actually a technology company. It innovates based on a practical understanding of the workplace and is associated with technology. Take this, for example. We can talk about a wrench. This is a tech wrench. It has to do with measuring torque inside an engine or inside an aircraft, an aircraft frame. It is the state of the art in terms of measuring torque and getting the right tightening for the critical task that take place in those places. You had this for automotive and it also goes into aerospace. Sure. One thing about snapon is its been an Automotive Repair company. We with realized that snapon means a lot to any professional as long as they are performing critical tasks, the need more repeatability and reliability is important. They have to perform with certainty. Thats aerospace, oil gas and aviation. We apply technology to that. For example, not shown here is one of these things where we have a smart toolbox. One of the big things on an aerospace line is dont lose a tool in the engine. Sounds like crazy stuff, right . A screwdriver. No dont leave the forceps in surgery. Exactly. We make a box that uses Imaging Technology that tells you, boy, jim cramer took out screwdriver a from door a and hes working in bay 6 on engine two. Before they button up, it checks the box to see if he returned it. Thats great. Thats driven growth. Cni was up 10 in revenue. Double digits. Its driven by the extension of critical industries. People value snapon. We have technology and insight to bring them. A lot of people felt you shouldnt be moving into europe or maybe try to minimize europe because europe was bad. Obviously they were wrong. Right. We have established a business in europe. I mean, i have welts on my back for europe. Last time i was here france gave me a headache. I didnt want to hear the word france. You said it. France is up now. Germany, spain is up now. The thing about this now, we spent a lot of time not taking down productive capacity. Right. Everyone told you to do it, though. We had faith it was coming back. We knew the customers were still there. We improved the efficiency and productivity. Before the revenues started coming back profitability was getting better. Now the revenue is coming back so were getting a double dip, both profitability, efficiency and leverage. What did you learn in terms of what youre going to do in asia . Well, the thing about asia, if you think of china, United States they both buy big cars. Yes. A lot of new cars. A lot of people in china. A lot of new cars, a lot of people in china. The u. S. Market a lot of cars on the road already and they are old. Yes. China, 11 1 2 years old and 300 million on the road. Despite the fact they are selling new cars in china there arent many on the road and they are all new. The repair wave is just starting. I lived in asia for 11 years. One of the things i learned is that you have to have the physical capability to take advantage of this. What weve been doing is building those physicals. When i arrived in china nine years ago, shanghai, the only people who worked for snapon in a city of 50 Million People came with me on the plane. How many years ago . That was eight or nine years ago. Came with me on the plane. 1,500 people, 31 offices, a design center. 700 distributors. We are building physicals because the wave is coming. Lets go back to oil and gas. Sure. We have been visiting the sites. We were on an oil rig off the coast. We were in utica shale, north dakota. You guys are there now . Yes. Were starting to grow this. Part of the snapon base is technology. But also an understanding of the business. We understand Automotive Repair very well. We have guys that can tell you why a mechanic takes his rag out of his pocket with his right hand instead of his left. Really . Is it an algorithm or something . No. They understand the work. The customer. When we visit oil and gas sites we see people welding things together that nobody makes a tool for. We are making them and starting to build business there. I love the people at stanley, black decker. They are terrific. Theyre not doing that. I love them, too. Its a different business. Different. Different business. Retail based business. They are professionals. Different business. We are based on criticality. The need for reliability. Nothing can fail like in aerospace and mining. Were based in technology. Take this thing here. This is a diagnostic unit. You plug it into a car and it give you what the car is saying in terms of the fault codes. It shows you the cars heartbeat, allows you to make the car run through tricks, sit up and do dog tricks. This one allows you to go to the internet to get special database. We have a database which we use our field information and we can tell you exactly if a honda is at 56,000 miles and it has these symptoms, heres probably whats wrong with it. You will get it through this device. High technology in an area which is increasingly dependent on high technology. People dont think of it that way. Its interesting. You are the only industrial and Technology Stock that hit an alltime high today in the s p. Now people know why. Nick pinchuk, chairman and ceo of snapon. Im sure you understand why i think this is a great company. Stay with us. In market thats gotten far too exciting for comfort todays hohum session notwithstanding maybe you need boring stocks like utilities which performed well in the past month. One of my favorites is consolidated edison, con ed, as you know it. You own the utility because it is low risk. Con ed is about as low risk as it comes. The company owns the largest under ground electric system on earth dae signed to supply the most densely populated city in north america but heres the thing, they dont own any Power Generation facilities. This is a wires company which means they are immunized against epa action. They are protected from rising commodity costs like the rally today. They have to face infrastructure issues and thats daunting for a utility. Con ed got slammed today. Falling 1. 09, almost 2 . Yearold is 4. 5 dividend declared today. They have been treating the stock as a fixed income alternative. When bond yields striked that made them look less attractive by comparison. The company has a lot going for it. Since we first had ceo kevin burke on the show in april 2009, con said has given you a 7 return after invested dividends. Not bad. Far less than gains in the s p 500 but thats good when you sacrifice upside and go for comfort you might fall behind the market. Doesnt mean you didnt get the dividends and live comfortably off them. Lets dig deeper with john mcavoy, the new president and ceo of con edison. He took over in january. Welcome to mad money. Nice to see you. Have a seat. Thank you for coming on. Pleasure to be here. You have challenges and Technology Working for you. I wanted to show people my electric bill spiked, ive got to tell you. Im convinced that if i had been sensitive to what my appliances were doing i would have saved money. You have a new device thats a cool stealth only the play with honeywell. How does it work . Im one of the few ceos that will tell you how we try to help our customer use less of our product. Thats what we are doing with our Energy Efficiency programs. These are two of the devices we roll out to our customers. This is a wifi thermostat, used for a central air conditioning system. There are 400,000 of those in our territory. We partner with honeywell. There are others available in the market. Many have that. The device here is the one thats unique. In our Service Territory we have over 6 million window air conditioners and you cant use a central air thermostat with that. We partnered with a Company Called think eco to develop this device called the