Transcripts For CNBC Mad Money 20161212

Time to become more circumspect about this remarkable run. There is so much that is positive, im beginning to rack up a few negatives, too. Weve been whistling past serious grave yards on the way to these new heights. Its worth shining a light on those grave stones as this market continues to break records. The dow made another new alltime high. S p slipped back and nasdaq declined 25. 9 . We recognize the three major tenets of trumps poll circumstance deregulation, lower Corporate Tax rate and tax holiday of repatriation of overseas earnings are terrific for the stock market. Weve run a great deal because of that triad. But you know what . We need to start asking ourselves how far we can go just on those three things when there are beginning to be other issues that just arent going right and weve got to talk about them now. Lets tick them down. First theres oil which was up sharply today. Oil rallying on better demand is one thing we like that. Crude simply climbing on production cutback . Thats a sign of pure inflation in a market that got used to not having inflation. Any increase in oil has been viewed historically as a sign the world is getting better. But this new rally with oil up another buck is based on nothing more than cartel discipline by opec as production by nonopec producers like russia. Its not good for the market. Trump doesnt like opec. He told me so personally. The biggest problem is something i never hear about i told but it once. Every time they lower Interest Rates, the cartel because i call it a cartel, the illegal monopoly raises oil prices, okay . The monopoly because thats all it is. The businesses ever formed opec, everybody would be put in jail. Here they are and every time a country hits oil, theyre invited in to the cartel. Okay . Its a disgrace. What happens if he takes issue with the production cuts . What if we have to start trimming estimates to the big years of oil mainly airlines and cruise lines. They were hammered today theyve been going up in sync with oil. Maybe we reached the outer limits where Higher Oil Prices are bad, not good. Even the oil service companies. Even those sold out at the end of the day. Trump is actually deadly serious about standing up to china. As we know from his china policy, one that embraces taiwan as a real country. The peoples republic is daring him to go ahead with a veiled threat to block the sales of u. S. Goods. China is a huge market for our goods. What if they ban the iphone or go after young china . We shouldnt get too cozy with any country with a gigantic chinese portfolio. Who knows where this confrontation leads and how long well be able to ignore it. This is where the rubber hits the road which is calling for a new cold business war. Where our president elect is trying to sacrifice American Economic interest short term for a pile of gold down the road. I dont know a soul who thought the breaking point would be this revision of our longstanding agreement to pretend taiwan doesnt exist. Trump seems to be betting that china itself is indeed a paper tiger. Maybe it is. All i can say if you own the stock of a company that does a ton of business with the peoples republic, thats become a risk factor. Third, the new cabinet. Taken in its entirety, it might worry professional money managers. The former executive of exxonmobil being secretary of state. That may be too frightening for some investors who arent used to this kind of change. Granted, these are all usually probusiness appointments as wilbur ross in commerce and gary cohn, the president and ceo of Goldman Sachs who had been tapped to run the economic council. This departure from more traditional cabinet picks might spook investors or big intuitions or queasy about what this Administration May be like. They didnt really think about this stuff. Fourth, the president elects calls and tweets to Business People may be too out of control or radical or unpredictable. Trumps tweet about Lockheed Martin and the cost of the f35 fighters and the implied threat the government wont tolerate this thing is one in an increasingly long line weve come to expect. Call boeing tomorrow and say sorry . You cant have that 16. 6 billion order from iran. We are paying full back for those air force ones. When we tweet the pharmaceutical companies are raising the prices too quickly. Is this how its going to be the next four years . If so, arent stocks getting too risky . Are we about to expand the trump stock . Not trump stock. Are we going to expand the not trump stock button . I dont know. Thinking about these ceos coming to new york later this week, they are tech ceos. Many didnt vote for him do. You think its going to be a wood shed lecture like he gave the media or will trump make a reconciliation . Do you know the answer . I dont. Interest rates keep climbing. The dollar keeps going higher. Historically, these are issues that gutted the market and hit stocks of International Companies particularly hard. The numbers might have to come down for these companies. Stocks go lower, not higher. Rates are going up that hurts the housing market. Real astatement Investment Trust seem to be overvalued and too risky for those who want yk versus what you can get with a riskfree 10year. Investors are so sure trump will pass this progrowth agenda they arent concerned about these things. I get that. Or it will prove too much and a Tipping Point might be in sight. Especially with fed ready to raise Interest Rates. We should be concerned because its inflationary pressures building from Higher Energy and potentially higher food prices, there could be four. Who knows how much inflation will surge if nafta is scrapped or tariffs get slapped on companies that move to mexico. If trump issues 500 billion worth a 30year make America Great bonds, could you see rates move up more quickly. The fed may need to keep pace all way. We have no resolution of the bailout of the oldest bank of the world we heard the company is trying to cobble 5 billion euros. 45 billion euros. I authentic fthink few investor for a bank failure here. Maybe it can be saved, but not by italian citizens and debt holders. What if there is a rebellion in congress . Maybe they wont go along with trumps agenda and the bank stocks dont get the relief we are looking for. After this magnificent run, ive got to admit there isnt much room for error. Against all these negatives is the prospect of a major pickup of economic growth, could be higher as 4 , lower taxes, deregulations. They are big enough to generate a real acceleration. I wish the market would take a pause to assess these risks. When i saw Johnson Johnson stock rally on a positive article in barrons, i said that was too giddy. There was nothing new in the article. Heres the bottom line, i, too, am excited by all this heady growth talk. I too like the markets animal bullish spirits. However, i cant remember a time when we whistled past more grave yards at once. Things could be this good for sure, but maybe well realize a cemetery could be a spooky place. After this monster rally, were set up to be spooked and i want you to be ready if it happens. David in georgia. David. Caller good evening from macon, georgia. Nice whats up . Caller 70 degrees and wonderful down here. My question is about the cocacola company. Ko. A negative yield this year. I lost more than the dividend. Do i continue to hold it or dump it . I think theyve done a remarkable job transforming the company. Maybe the new will get credit. Hold on to cocacola and youll be fine. Chuck in california. Caller with verizon being the traditional dividend play, i believe it brought them down with 146 handle. Back to 60 with interest in acquiring some content. To get to 60, aol will have to be added. Armstrong intends to do that. You need both Interest Rates to go down and aol to be immediately added for it to get 60. I think thats a bit of a stretch. I do continue to like verizon very much. Rita in south carolina. Caller hello, retiree from new york. I want to know what you think of twitter, being that trump uses that to communicate with everybody. I think twitter stock is overvalued versus its fundamental earnings power, but undervalue when it comes to someone who should buy it given the fact that it really did help elect a president of the united states. All right. Weve ignored the negatives far too long. It might be time to take a bit of a pause. Maybe see what Trump Presidency really means. On mad money tonight, onceignored bank stocks that have become goto names. Not all sectors are created equal. Im ranking the best and taking a closer look what could be considered the greatest deals the street has seen. Dont miss my take on the acquisition of broadcom. A company thats working with the likes of amazon, fedex and kellogg. You may have never heard of it. Ill reveal the name. Stick with cramer. Announcer 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. Why pause a spontaneous moment . Cialis for daily use treats ed and the urinary symptoms of bph. Tell your doctor about your medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis. Ever since Donald Trumps surprise victory a little more than a month ago, the banks stocks have been leading this whole market higher. Oncereviled groups became red hot. Investors started thinking about lesser regulation, faster growth and higher Interest Rate. Kbw bank index is up 22 since the election. Thats a remarkable move. These are banks, not small cap tech. Something else has been happening with the banks. We are going to call attention to it. Its really a very inside wall street story. A whole group has been powering higher, the regional banks got hit with a downgrade. These downgrades barely slowed these stocks down. Im considering it to be flies on the windshield of a speeding car. Today when financials finally seem to be taking a breather, we need to ask why are so many analysts bailing on the reelg nals when financials have become the sexiest group . Personally, i think there is no better evidence than the fact they can keep more in the face of these downgrades. Let me walk you through some of,000 favorites one by one. Why dont we start with plain vanilla beb t. From june to a few weeks before the election, bbt got hit with five accept brought downgrades. The conventional wisdoms with Hillary Clinton would win. Everybody was so wrong because that would have given elizabeth warren, the nemesis of the financial industry a powerful position in the senate and would you not want to own bbt. Trump won. We have a republican sweep. Whole landscape changed overnight. Did these people upgrade . No. They got downgraded to the once but twice. What do the analysts have to say for themselves . Morgan stanley put it out the Election Results were a big positive for the analysts. They said bb t had less cost savings acquisitions. National penn they snapped up for 1. 8 billion. We liked all that stuff on our show. How about bmo . They downgraded bbt after trumps victory. They raised the target from 43 to 45. Now its just under 47. They argue bbt has run out of catalyst to outperform in the new rate environment. The stock has run up 10 since the election. All i can say is, oops. Bb t is rising another 12 . Its up more than 9 since the downgrade. These guys missed the fact this market is seeing a wholesale whats known as rerating on the financial sector. All the banks are ready to roar in advance of this weeks fed meeting. Pretty much everyone expects a rate hike that will let the group make even more money. Turns out this market doesnt care about nitpicking when it comes to the bull market and financials. This is one powerful move. How about Fifth Third Bank . The ohiobased bank has 1,200 locations in the midwest and southeast. Like bbent t got hit with a whole bunch of downgrades earlier in the year, six leading up to the election. In the week after the election, would you expect everyone to be upgraded, right . Its such a good time . No. Three more downgrades. Ine before the election changed the whole picture, some analysts were talking about how the stock made a nice ketchup move. After the voting, some guys got more gun shy. Bear told us fifth third already baked in most of the upside from the companys Efficiency Program which is totally missing the point here. They could be the least Efficient Bank in america and still be poised to make a killing right now. Sure enough, fifth third rocketed up more than 20 since the election, including a 3 gain since that bear downgrade. Key corp, roughly 1,000 branches across the eastern and western united states. This one is really gold. Key got downgraded five times. Look over these downgrades, the reason is the same, valuation. For example, two weeks ago kbw lowered the rating from outperform to market perform based on the idea key corp had run dramatically and may not have the same momentum compared to its peers. Since that downgrade, key has rallied, there it goes, another 7 . Then theres the alabama financial. According to piper, it was already pricing in higher rates and wanted to take a victory lap because its been one of the better performing stocks. Valuation again. These valuations calls are making analysts look like they are rigorous. Regions rally is up 7. 5 since the Piper Jaffray downgrade. Fti, suntrust. Since the election, suntrust has been downgraded four times by Morgan Stanley and wells fargo and compass point. We are downgrading suntrust to market perform from outperform largely on valuation. Guess what . 6 since then. When will these guys learn . Finally us bancorp. That is a national bank, regional national. 3,000 branches across the midwest. U. S. Bank corp is exactly the kind of company that should make a killing from rising rates, a stronger economy, less actual regulatory an enforcement. The stock has been downgraded three times since the election by Morgan Stanley, Piper Jaffray. Piper said, this stock has difficulty keeping pace with peers that can more aggressively employ capital. Its up another 6 . The regionals have gotten more expensive since the election. Are they that pricey . Bbt, fifth third, regions, suntrust, 15 times earnings. Key, 14 times earnings. Lower than the s p. These stocks all continue to sell at a substantial discount to the average stock which is the 20 times earnings. Even if banks are seeing the prospects improve, they are improving dramatically. Yes, regional banks have run up dramatically since the election. Yes, their stocks already baked in the pending rate hike and some are better than others. When you see a group like this keep rallying as it continues to get hit with no sponsorship, just downgrade after downgrade, nobody pushing them, that means the move is for real. The regional banks can keep roaring because there are way too many Hedge Fund Managers that dont have enough financial exposure. These are classic you know what we call them . Trump stock, trump stock, trump stock. After the consolidation, i expect around the feds move this week, there will be a run that stocks anew. Stick with the bank stocks. Stick with cramer. Much more mad money ahead. Did you see those knockout numbers from broadcom . With the stock soaring, ill tell you if the company has room to run. Just 12 days until christmas . An unconventional holiday play. My exclusive with a company in a hand in many of your favorite ecommerce names. 140 characters gets what it did. It cost Lockheed Martin a lot of money. Stick with cramer. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Tonight we need to talk about whats looking increasingly like the greatest deal in ages. Avagos 37 billion acquisition of broadcom last year. A transaction that created the Third Largest Semiconductor Company on earth. Now named Broadcom Limited. I remember when people laughed at this deal. In april it was trading at 157. Its at 178 after rocking 5 higher friday. You know what . Even after this run, i think there is more room to the upside. The new Broadcom Limited reported real blowout numbers with a nice revenue beat, a big earnings topper and a very strong guidance, not to mention the announcement i thought was stunning. Theyre doubling the dividends, bringing the yield up to 2. 3 from great growth stock. Thats why as we approached the oneyear anniversary of the completion of this deal, ive got to revisit the story and explain why this companys doing so well and might you want want to consider the tech you should oin for 2017. The new broadcom is a leading maker of chips for wired and wireless communication. As well as enterprise storage, multimedia connectivity and the internet of things, thats their business, and right now business is booming. So how about this incredible quarter the Company Reported on friday . Eric johnson, he gave a terrific overview this weekend, explains the giant chip maker was able to deliver because it has excellent management. The team that used to watch avgo before the deal became Broadcom Limited. They built up a ton of expertise in integrating large acquisitions. The networking storage spaces, only in their purchase of the old broadcom. Remember again, people laughed the deal. They thought it was too big. They didnt know what they were doing. All wrong. It worked out spectacularly. The strength of this quarter was fuelled by Strong Demand from apple, thats why apple went up 2 on friday. Hard drive makers. Weve seen seagate and Western Division do well. Data Center Owners and rebound in industrial chip sale. Think about advanced micro whats going on there. Back in april i told you avgos acquisition was the best thing since sliced bread. I dont know if anyone was listening. I went on that way because the company was forecasting 715 million in cost synergy and look like they will come in ahead of schedule this. Quarter Broadcom Limited posted a 9 revenue increase versus the previous quarter. What it makes after the cost of goods sold rose to 40 . That beat wall streets expectations dramatically. As strong as broadcoms limited results were and robust as guidance was, what got investors excited was this announcement how the Company Plans to return 50 of its Free Cash Flow to shareholders long term. Plus management said they still have cash leftover to make Strategic Acquisitions thats been this companys bread and butter. Johnson notes the stock remains darn cheap. I have to agree. Thats the same argument when i pounded the table back in april. It was 157 and traded 12. 3 times next years earnings. Even though the stock has run up more than 20 points since then, it hasnt gotten that much more expensive. The earnings estimates keep climbing, too. Eight months ago the consensus on wall street was Broadcom Limited would earn 12. 60 in 2017. Now the Analysts Expect the company to earn more than 14 a share which is how the stock can still be selling less than 13 times earnings despite the rally. The estimates keep going higher. Estimates times the price earnings multiple equals the stock price. Perhaps the best thing about the broadcom story is we know exactly where the next leg of the companys growth is coming from. A little over a month ago Broadcom Limited announced a strange deal buying brocade communications. It was for 5. 5 about. They are a leading player in whats known Fiber Channel Storage Area Network switching. This business has become broadcoms management salivating. Broadcom limited expects the brocade deal to be immediately added. They expect to boost their earnings by a staggering 900 million. Buying brocade reduces the dependence smelling smart chips. The truth is one big reason avgo merged with broadcom was to reduce its smart phone exposure. Reduce that hold samsung and apple had on it. It worked out splendidly. Put it all together, this spectacular quarter reported last friday. The brocade acquisition announced last month. There is a strong case to be made broadcom ceo is the best chief executive most people never heard of. Tan is the architect of Broadcom Limiteds incarnation. Before the merger he served as ceo of avgo. Thats why the symbol is still avgo where he made a series of everlarger acquisitions that put his company on the map. This took form in 2013 when they snapped up lsi corp in a 6. 6 billion deal. That helped avgo diversify specialized products making it more of a mainstream semiconductor. The deal is paying off so well. This guy has a terrific track record. Acquisitions he deserves the benefit of the doubt when it comes to the latest brocade transaction. Under tans leadership, the stock rallied. Are you ready . More than 1,000 from its august 2009 ipo price of 15 up to 178 today. This has been one of the great Growth Stocks of the last decade. I dont think its done and i dont think most people know about it. Here is the bottom line. I hope you listened when i outlined why i liked the avgo broadcom deal in april. If you missed the first leg, the new Broadcom Limited reported a fabulous coquarter. The company is doing yet another deal with brocade purchase that will propel the stock higher. Broadcom is trading at less than 13 times earnings. Whats not to like about broadcom . Julie in new york. Caller jim, love your show. Thank you. Caller jim, whenever i see if yous about nvidia, it looks to be positive. With money recently rotating back into the tech sector, why has nvidia been going down so much . There must be profit taking and its heavily shorted, but should it be going down so much . I got a lot of tweets today about this same question. Ive got to tell you, i am always hesitant to criticize or knock a stock, sometimes stocks give you enough. This stock is up 171 . I think youve got people who say bulls make money, bears make money, hogs get slaughtered. Thats what its about. Business i good, but the stock had such an advance from the last quarter, i think its big stuff and youll see profit taking coming in. Youve got the right word for it. Ryan in massachusetts. Caller jim, ryan murphy in massachusetts. How you doing . Booyah. Whats going on . Caller so get ready for the pats game tonight. Before that, got a question about palo alto network. Its an expensive stock and this market does not like expensive stocks. Theres been a lot of turmoil in the Cyber Security world. Palo alto did not blow the number away. When your stock is as high as palo alto is, you must blow the number away or you must face the wheel. You think you might have missed the boat when it comes to avgo . Have no fear. I think theres still plenty of room to run. I like this monster. Much more mad money ahead. Investors have been running from riot reits and the sector has taken a hit. Ill reveal a name we never talked about yet. Its a new name on mad money. Then i take on the commander in tweet, donald trump. What does it mean for your money . All your calls rapid fire in tonights edition of the lightning round. Stick with cramer. Tomorrow, kick off the trading day with squawk on the street. Live from post nine at the nyse. You always expect a fed rate hike in an environment where Interest Rates are rising, like the real estate Investment Trust. Theyve been in the house of pain for months. However, there is one reit that seems to be bucking the trend. Talking about Dct Industrial trust. The company owns bulk distribution warehouses and Light Industrial buildings where the stock is only 3 off the high at these levels. 25 return. Dct is a play on ecommerce. The more people shop online, the more Warehouse Space is needed to store that stuff. The Company Reported a Strong Quarter a month ago. Plus robust guidance at new properties. Is this a reit safe to own in a rocky Interest Rate environment . Lets take a look. Find out more about his company and its prospects. Welcome to mad money. Nice to see you, sir. Its been ten years. Youre a Growth Company that happens to be a reit. Seems to lump you in with companies that interestrate sensitive is strange. Its been a great business to be in. We are so fortunate. Not look at Interest Rates, look at the underlying business. As we go into this environment with a iz roog economy, accelerating growth, thats good for our business. Our business is focused on u. S. Consumption. The better u. S. Consumption is, the better we do. Im looking forward to a high growth world. At one point your comps call, said is a slide coming on . Youve been able to raise rates regularly. The demand is so much better that we shouldnt worry about the fact youll be able to get a rent increase. Demand has been spectacular. Robust, broad. Your ecommerce as you mentioned has been a driver. Across all sectors. The consumer, brand of consumer companies, housing has helped kick in. Every Company Investing in the supply chain right now make it cheaper and faster and accommodate growth which has been great. The thing i worry what you worry about is demand. Supplies remain disciplined. For a variety of reasons. We have been an environment for some time where demand has far exceeded supply. I think thats going to continue for a while. It seems youre 92. 6 , rent rolls are incredible. They are up year over year. Seems if you do these places in urban areas which is what amazon needs and fedex needs to get us that stuff the next day. Everyone wants to be closer to the city. When they want real estate, its supply and demand. Weve been trying to focus our portfolio where demand is greatest, but its hard to build supply. To make money in real estate, certainly in our business, you need to be in locations hard to replicate. There is not a lot of land around. Thats what we try to focus our path in our time finding those locations, buying buildings and building new ones. Your comp call november 4th, someone asking are you seeing people accelerating decisions or putting them off . That was before the election. How about since the election . I would say no change. I authentic it was such a robust environment, our customers continue to make decisions. Its been a great environment. I think its going to continue for a while. Its been ten years. I noticed you shuffle. There are properties you decided to get rid of and other properties you buy. Looks Like Properties you buy have lower rents than the market. You can raise them over time. Back to looking for opportunities to grow. Growth is important to us. Both growth and value and growth in cash flow. We are focusing on assets we believe will be in locations where we can raise rents and have good broad demand. And selling assets in markets we fully realized the value opportunity or where we may believe that rent may not grow as well. Smucker, stanley, black and decker. When i see them as Large Consumer rents, what are they using you for . Distribution warehouses. Black and decker, a lot of that warehouse is used for ecommerce. Thats in addition for storing their customer storage. Does ups, fedex, amazon, they are renting space . What do they do . They rent from us. They also no doubt own, ill give you an example. Both fedex, we had a 50 acre parcel we assembled over a period of time in chicago. Right by midway airport, just outside of the city. Its close as you could probably find 50 acres. It was three different sellers. We aggregated that parcel and started with plans to build normal distributions. Fedex came along. They probably would have rather bought, but its not for sale. Youve got something you need, the result was we entered into a longterm lease with fedex involvement with ups. We had a property in hayward. The building that was vacant we bought it. It was a good building, but too big for the site. It wasnt enough parking for trucks or cars. Our plans were to demolish a quarter of it. We added value but its attracting brick and mortar. Sounds like business is good enough you can do that. You want to do that. Our goal is to create value, not just buy and hold, but buy and add value to our people and our ideas and our capital. Its certainly worked. You had better return than almost any real estate Investment Trust i fochlt its great growth model. The president and ceo of dct doing really well and not a bond market equivalent, just a growth stock. Mad money back after the break. It is time, time for the lightning round. Where i tell you to buy, buy, buy or sell, sell, sell till i hear this sound then the lightning round is over. Are you ready, skeedaddy . Jason in pennsylvania. Caller booyah, jim. Booyah. Caller all my stocks are doing well and enjoying this rally except gilead. Wait a second. They do great Technical Work and said looks like that stock has washed out. I think it is being washed out. I would not sell the stock. Buy. Jay in new york. Caller good evening, professor cramer. Booyah. Good evening. Caller poly one. I like the chemicals here but im partial to dow chemical because i like the yield and the balance sheet. Cameron in colorado. Caller hey, jim. Macon, california, took a big hit surrounding allegations, i took this as an opportunity to buy. That worries me. Ive got so many banks inexpensive. Im not going to go there. Sorry. Elizabeth in texas. Caller professor camer, you make learning interesting, fun and entertaining. Thank you. Caller take on mdr. Murder is what they call it on wall street. Its murder and it murdered people for a long time. No longer. This is an infrastructure play. I want to play with general electric, ge. Anita in florida. Caller hey there, cramer, how are you . How are you . Caller im good. I love your show. Love your energy. I got to ride on the nvidia wave. Thank you for that. I would like to know about two stocks really. Buy, sell or hold on cyber art and acia . Acia has one contract with china that brought the stock down. Cyber art is in Cyber Security. I like that one. Acia is going to be tough right here because of a potential lockup expiration. Evan in pennsylvania. Caller big booyah from chambersburg. Know it well. Caller potash . I think potash had a big run. We want to play ag, we play agco. Corey in florida. Caller hey, jim, big fan. Great. Caller my question today is on wynn stock. I was in las vegas. Trend seems to be going downtown in mid level casinos. Any room at this price . Wynn, the problem here, even though we like steve wynn, weve been recommending mgm. He was on last week. I referenced that because i thought he acquitted himself quite well. National harbor, new casino, excellent. Jeff in new jersey. Caller mr. Cramer, how are you . I am good. How about you . Caller doing great. The one company that im very interested in is transocean. Transocean does offshore drilling not onshore. That is concerning me. Oil at 55 does not get new projects done. I think that rig dont buy, dont buy. Sorry. Billy in new york. Caller jim, how are you today . I have 600 shares of smith and weston. Last month i was whistling dixie. Now i dont know where to go. I think this stock is too cheap at 21. People feel there wont be new Gun Legislation which drives things. Its a fine company. No one got hurt owning these stocks. Its a win. I want to buy it here. Do i have one more . Yes. One more. John in michigan. Caller hello. Youre up, its jim. Caller what is your opinion on Ford Motor Company . Fords good, but gm has more momentum. They also have china. Gm is doing a better job than ford. Ford is in the crosshairs of president elect trump. Thats the end of the lightning round hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Its the tweet heard around the world again. Im talking about the latest tweet by president elect donald trump blasting, still one more industry. Heres the tweet from the real donald trump. The f35 program and cost is out of control. Billions of dollars can and will be saved on military and other persons after january 20th. Lockheed martin makes the f35 fighter, but there are plenty of subcontractors. But lockheed stock brought the tweet. It was off more than 4 before rallying near the end of the session. All Defense Sector got rocked, though they were largely able to boups back from the worst levels. Northrop grumm Northrop Grumman sunk just 1 . The rally back was astounding to me. This sdwroint Strike Fighter program has a long history of billions of dollars of cost overruns dating back 50 years. The Defense Department decided to cut the cost of next fighter jets by 3. 3 . Lockheed mart yip hasnt agreed with that rollback. It sounds like trump wants to drive a much better bargain. Once again wall street has been thrown offside here. The defense stocks roared since the election. Trump spent the campaign talked about buying more military, but is against the swamp, the cozy, builtin relationship between the government and lobbyists for various industries with defense being the most egregious. Question is, does even the president have the ability to drive down the cost of this jet . S i think we would have assumed a promise about draining the swamp was Campaign Rhetoric and wouldnt make companies do what he wants. Then he called the ceo of United Technologies to persuade him out of persuading a bunch of carrier jobs to mexico. Greg agreed to keep half in indiana. United technologies is 6 billion in defense contracts. While trump didnt threaten to take away that business, hayes got the message. I was born at night, but not last night. I also know about 10 of our revenue comes from the u. S. Government. I know that a better regulatory environment, lower tax rate can eventually help utc over the long run. No threat necessary. Then weve got the bargaining over new air force one with boeing ceo agreed to talk to trump about lowering the cost of the two planes the government ordered. Boeing announced 30 increase by the way in the dividend in a new 14 billion buy back. Good for shareholders. I wonder if trump thinks, wait a second, maybe its time for a buy one get one when it come to the air force one order. Then last week we got time 2016 person of the year where trump vowed to go after the Drug Companies that raised prices xo xo wantly. If the Company Relies on the government for a big chunk of business, that revenue stream is in jeopardy. Who knows if trump calls the ceo of Lockheed Martin and says i want 2,400 of those planes but im only paying for the first few thousand, youre giving me the rest for free. What if he calls boeing and says i see you got that 16. 6 billion order for 80 jets from iran. Sorry. Were going toetotoe to redo our deal with iran. I have to kill that order. Well make it up to you. Put that buyback in the dividend boost, maybe he thinks he can go for it. Thats why you need to examine your portfolio. Can you handle the risk of owning shares in a company that feeds at the federal trough . Its a brandnew risk factor. If you dont account for it, you can find yourself on the receiving end of the next president ial tweet. Drug companies and defense contractors are the losers. You need to think about companies that need government approval like the time warn eer at t deal. Trump didnt like that. Manufacturers who want to move their factories overseas. Im not saying these stocks will need to be sold. Thats wrong. Im saying trump cuts both ways. Hes not just tweeter in chief, hes negotiator in chief. At least right now doesnt it seem he holds all the cards . Stick with crime ever. Ame ever. Weve got that good news after the bell, 30 dividend hike in a very big fortune billion dollar buyback by boeing. Lets not lose sight of the fact many of these stocks have run with more circumstance sum expect. I like to say there is always a bull market somewhere. I promise to find it for somewhere. Im jim cramer, this is mad money. See you tomorrow at a popular kitchensupply tostore in manhattan. Howard how you doing, ladies . Come on in. Lemonis . One of the owners is cooking up a catastrophe. Howie, why would you be ordering knives . Howard ill get approval. Dont worry. Lemonis are you being a dick . His reckless spending has put the business in the red. Howard were not choking. Lemonis can you close for a week to do inventory . Howard no. Lemonis then youre choking. His careless merchandising. Theres [bleep] everywhere. Has thrown this store into chaos. Howard thats a real machete. You dont see that in williams sonoma, do you . Lemonis and despite her mounting frustration, his exwife and partner. Howard who makes their wife 50 . Robyn so i havent done [bleep] here, right . Lemonis . Has been powerless to stop him. Thats not what an equal partnership looks like