Transcripts For WHO Mad Money 20151023 : vimarsana.com

WHO Mad Money October 23, 2015

The herd was thundering today all right with the dow roaring 321 points, the s p pole vaulting 1. 66 and the nasdaq screaming higher 1. 65 n. The last 24 hours we have witnessed some of the greatest short gains i have seen as well as downright disastrous bets against companies that manage to produce herculeanly fabulous results. Today it did so in breathtaking fashion. Before the winners and the losers let me say unlike almost any other time i can recall its the action of the panicked short sellers that are in charge here. They are controlling the prices you see. They are the ones who are moving stocks in either direction. Sure today we were helped by the European Central bank staying easy for longer than many thought. Whats driving the market on a moment to moment basis is short bets that are gone awry where where big hedge funds buy s p futures in order to cover shorts against the market or short sellers who had to cover shorts by buying stock because the sellers never materialized and there was furious buying instead as hedge funds came in to get some more action. Now i actually like short sellers. The shorts play a key role in the market. Short selling is a vital part. It exposes frauds and faults. They make money when companies falter or when shareholders capitulate to fear even if nothing is wrong. The shorts lose money when the story is stronger that be expected and they have to buy back shares they have shorted or bet against. Sometimes for much more than they initially soldle them for. Today we saw a ton of short bets go bad creating spectacular wins for the longs and it only got more difficult for the shorts after the bell. Gains. Lets start with the huge triumphs. How about alphabet known as google and amazon. Both of the companies which have had incredibly inconsistent earnings making them, of course, Fertile Ground for the short sellers just crushed the numbers after the close today. Its been difficult to figure out how google was doing when it reported in the past. Not this time in its new alphabet iteration. We saw amazing gains across all lines of the company and a 5 billion buyback to boot. Thats a shorts pulverizer. How about amazon . Holy cow. Tonight amazon reported an actual profit. You heard me. Amazon reported a profit, one that walmart would no doubt be je louse of. In the last two days we have been hearing, o geez, when you went on the floor of the exchange down there all we kept hearing was people were shorting fang, facebook, amazon, netflix and google. They were acting funky and betting against it. Netflix may have failed to deliver. But the a and the g are roaring in after hours training and so the facebook. Right on the back of short sellers who have been pressing them down for days. The only fly in the fang outlook what do i do with the g . Fana . Thats not much of a name now that googlele is alphabet. These are moves sending up tomorrows session. Thats just the tip of the iceberg. There are other groups where the shorts have been obliterated albeit not as dramatically as fang. Where did the shorts go wrong . Thats the essence of what really happened today. Not that things were so spectacular. They werent as bad as we thought. Lets start with the banks. Hedge Fund Managers believed that the fed would not raise the rates figured the banks which need higher rates to make money. If we dont get higher rates they are a natural pushover. When they reported they did go down. The earnings werent that horrible. The possibility of a rate hike is within our sites. The group failed to produce sellers which is what you need. The remaining shareholders didnt capitulate. There is too much profitability especially with the possibility the regulators will be going for larger buy backs that was the hallmark before the great recession. Look no further than jpmorgan. Remember when it was going to have a disappointing quarter. There was hammering, crying and fear. Stock is up big since it reported. The industrials were part of the rolling market we know is pressing down health care pushed down by weak china sales, hailed as dangerous by the feds fears of the weakening economy and victims of the strong dollar. The industrials seemed like sitting ducks. Going into earnings season. General electric reported first. It delivered a spectacular quarter. Since then we have had Company Reports with a little bit lesser gains. 3m like today. Yet they are anyway. Simply too cheap. The shorts were betting against them. Boeing because the ceo of delta last week said there was a glut of wide body airplanes. That struck here fear in the hearts of every long and emboldened the shorts. In retrospect it looked like a canard that forced the shorts into an ever rallying market. Meanwhile the dollar is stronger but it doesnt matter. There is a sense that china is improving or about to do huge stimulus as well as the fact that the chinese stock market refuses to go down. Lest i forget about todays bullish comments from the European Central bank. The markets were up huge. It spread to ours. Clorox, kimberly clark, pepsi co and cocacola have been viewed as bond market equivalent s. When hedge funds were concerned rates would go higher they shorted the stocks. The added layer of security that they would succumb to the dollar. But the fed didnt tighten and the worries diminished. Almost all these Companies Beat estimates because of declines in raw cost. The fantastic numbers we got from mcdonalds today were the coup de grace which was seen as a faltering company with little hope of recovery. Nope. Too cheap. Real turn around. More on that later. Finally over looked because it was linked to personal computers was old tech. The internet of things has replaced ailing devices as the main driver of Companies Like intel and texas instruments. Amazing quarter last night plus endless consolidation. The Western Digital san disk has helped the group. Why . Firmer pricing, better profits for the companies. Then after the close today we got an incredible number from microsoft. A huge earnings beat sending that old dog soaring in after hours in part because of a stunning increase in its cloudbased business. Looks like the old tech move has more legs than people thought. Do you know whats incredible though . The shorts may have been skunked by what the europeans did to spur growth. They have to be shocked that f. A. N. G. s got fangs again. They have been coining money in an area that was the biggest generator of profits for ages health care. Thats right. The bets are playing off huge here. I want to give the shorts their due even on a huge up day. First they nailed drug roll ups to the American Companies with european headquarters. They used tax regimes to acquire bases and cut the tax bills immediately. Specifically the shorts have just been obliterated. Questioning the accounting not to mention the business model. They have made fortunes. Valeant traded at 88 yesterday. The hospital stocks have completely collapsed. These former darlings have been the big winners from the Affordable Care act as millions got insurance. But the patient count slowed down and the hospitals are disastrous. Community health systems, a beloved Company Since obamacare, plunged 35 . How long did it take . Today. One day. 35 . Every single hmo is being slammed from the pit action. A wholesale slaughter. Finally the biotech because of unpalatable drug pricing. Thank you for nothing valeant, you wrecked the sector and the group has been hit hard. I dont think it will snap back. Not quickly. We are in an election year. The shorts go but health care has been amazing. Amazingly bad. The bottom line this market has been turned on its head with what looked like fabulous shorts turning into magnificent longs and vice versa. Its this sea change, not the numbers, not the reports that explain so many of the moves we have seen. They are exaggerated moves since the start of earnings season. Three short weeks ago. The seachange for the most part is proving to be astonishingly bullish because it wasnt supposed to happen. Things werent supposed to be than anyone thought, least of all short sellers who bet against them. Lets start with calls in ovin in maryland. Caller booyah, jim. Booyah. Caller im in howard county, maryland. First, thank you for taking my call. Im a first generation investor. I manage my portfolios and both are up because of you. Thank you for that so much. Youre welcome. Appreciate it. Thank you. [ cheers and applause ] caller my question is in relationship to the stock i purchased at 35 cents a couple years ago. Now its up to over 4. The stock is sirius xm radio. I listed a Conference Call and im excited about it. You should be. First, congratulations. Fantastic work. I think it goes high. A lot of cars being sold, 18 million. A lot of cars are staying on the road and they want to install sirius. I think sirius is a necessity for many people. Stock goes higher. Mark in new jersey. Mark. Caller big jersey shore booyah to you, jimbo. Ocean grove booyah back at you. Caller ford motor company, f. I took a substantial position a few dollars back. It was a nail biter for a while. Now that its trading roughly 15. 58 do i do the moron trade and put more on or take the money off the table. As you know from action owners plus. Com i dont like to violate the bases. I dont like to pay up. But ford is just a quarter or two behind gm and will catch up. You know i think china is coming back. Gm has big business in china. I like ford. I think its fine. All right. We saw some of the greatest short gains i have ever seen including alphabit and amazon. We are seeing shorts turning into longs, putting the sea change in charge of the market. Tonight one of the great American Companies you may not know about. Sitting down with the ceo. And talk about a happy meal. Mcdonalds reporting increase ing sales worldwide. I will tell you if the turn around has legs or if its time to exit. And could all the deals push cyprus semi higher . Ill sit down with the ceo to find out. Why dont you stick with cramer . Dont miss a second of mad money. Follow jimcramer on twitter, have a question . Tweet cramer, send jim an email to madmoney cnbc. Com or call us at 1800743cnbc. Head to madmoney. Cnbc. Com. Lets talk about a high Quality Company thats really working now snap one incorporated, maker of premium tools and equipment for everything from water repair, agriculture, mining, military, Power Generation clients. That is stock thats been climbing steadily for ages. Up 20 year to date but not enough people have heard about it. Looks like snapon has more room to run. They just reported a robust quarter. Four cents off 1. 94. The sales came in low but it didnt matter. The company is seeing some of the highest. One of the stocks shot up 2. 5 . Lets dig deeper into the story with the chairman and ceo of headed. Welcome to mad money. Great to be here. When i say organic growth and you have a huge organic growth you have invented new things that are driving sales. Not like you bought a company and tacked it on. Thats right. One of the things about us is our people are in garages for more hours for more days. I was just in a garage riding in one of the trucks. During that morning two people suggested a different product to me, one to take off the oil pan on large trucks and another for toyotas to get inside the wire harness without disrupting it. That drives the business. We make hand tools, for example. We guarantee them for life. How do we have a business . Cars keep changing. Like this. This is a brand new one. This didnt exist. It didnt exist three months ago. It just came out. Its setting records. By the way, this thing is faster, lighter than ever before. It has more data, more data. I hook it up its wireless. Its a laptop. You plug it in plug in a special module to the car and walk around wirelessly. It allows you to observe the computer codes in a car, watch the cars heartbeat. Allows you to put the car through the paces. In other words make the diagnostic system in the car stand up and do dog tricks and tell you what its doing. Then you can look at what the manufacturer says to do about the data. Then you can do our special proprietary data that will tell you, boy, 90 of the time when the car says this, this is what you do. Short cut all that stuff. Nothing like it. You have basic stuff people dont have that are equal to the times. Right. Talking about hybrid cars. They have 300 to 350,000 volts kicking around inside the car. This thing will insulate you to 1,000 volts. You dont want to fool around around the batteries with a tool without being insulated. We have a line of tools that will do that. Every time a car changes we have new things to bring out. Thats what organic growth is. If you are talking 7. 3 in growth you are talking about bits, bites, tools, liners and lifts that we sell more year over yearle. Thats what happened this time. We talk a lot about the internet of things and the connected car. We dont talk about the fact that they cant be fixed by aaa when they come to see you. Exactly right. Today, cars are more and more complicated. It used to be measured in the 90s you measured engine codes on a car in the tens. Now its in the thousands. This is the wave of the future in diagnostics. This thing i talked about is the wave of the future. If you go to independent fwrajs, older cars garages, four in ten repairs need this. With newer cars its 7 in 10. Soon everybody will need this and we have a full range of products. This, top of the line that deals with complicated repairs. This one i talked about last time on the show which just the maintenance repairs. If you want to change a battery, sometimes you have to reprogram sml. If you want to change oil you have to do some things. Were not just talking over seas. China, weak. Military is weaker. Right. Oil and gas. Why has it not brought down earnings . We have a lot of places to go. We are just penetrating. Just starting to penetrate some of those things. Military was down. Oil and gas was down but mining was up. General industry was up. Heavy truck was up. Are there more car dealers. No, no. Technicians. Its the drive of the different changes in vehicles. People ask us, there are a lot of new cars out there. They will sell a lot of new cars. 18. 5. The vehicle park in usa has aged every year since 1980. People asked me a great question today. They said, you know, we have head winds. I know. I talked about it, yes. They said our o. I. Margin was up 130 basis points. They asked me, are you cutting . Have you cut back . No. We are investing more because we believe in the runways for growth in this kind of thing, new product and in extending to other industries. We have faith thats going to lead us to bigger and better. It has continually. One of the greatest stories we have had on. I wish more people knew about snapon. We are not going to stop because youre not stopping. Nick pinchuk of snapon, one of the greatest stocks on mad money. Stay with cramer. Of a saggy diaper its time to dance freely thanks to new pampers cruisers the first and only diaper that helps distribute wetness evenly into three extra absorb channels. So it stays drier and doesnt sag like other diapers so wiggle it jiggle it and do, whatever that is, in new pampers cruisers love, sleep and play. Pampers bring us your aching and sleep deprived. Bring us those who want to feel well rested. Aleve pm. The only one to combine a sleep aid. Plus the 12 hour pain relieving strength of aleve. Be a morning person again with aleve pm. I know blowdrying fries my hair, but im never gonna stop. Because now ive got pantene shampoo and conditioner the prov formula locks moisture inside my hair and the damage from 100 blowdries is gone. Pantene. Strong is beautiful. Well, things in the bedroom have always been pretty good. Yeah, no complaints. Weve always had a lot of fun, but i wanted to try something new. And im into that. So were using ky love. Its a pleasure gel that magnifies both of our sensations. Right, i mean, for both of us, just. Yeah, it just takes all those awesome feelings you usually feel and it just makes them. Rawr. You know whats the greatest most remarkable thing about the turn at mkd we saw this morning . Its in the first inning, thats what. Yep, its only just beginning. I dont like to chase stocks at their all time highs but i think they are in place for a multi year move. First the turn around is about ago and decided to fix the fundamentals. Took out the difficult menu and long lines that hurt at the drive through. He moved menu items that gummed up the works and emphasized mcdonalds was going back to good tasting consistent convenient food. He did what many thought would be impossible. He got the buy in of franchisees who run the day to day stores and explained he wanted quick change. He wasnt going to fall back on Something Like, hey, you know, well try this and that. Weve big. It will take forever to fix. That was the mantra. That was the excuse for so many failed initiatives in the past. Instead he tested new menu items including more chicken one month in. He got feedback from the franchisees and millions of customers and rolled out month. It might have been difficult for even chipotle to get it out that fast. You have to be amazed at the local test to nationalle distribution speed. It was lightning. Once the franchisees caught the excitement they added new workers rs cleaned up, put more money in. Easterbrook knows food retailing is a psychological game. You start to see better results, the people who run the store are en er jazzed, pick up the pace to the point where 98 of owners bought into these changes. Thats a phenomenal turn for an organization that is supposed to be disspirited with angry franchisees who lost faith in the headquarters like we read. There are no champagne corks yet in illinois. Hes just getting started. Hes rolling out all Day Breakfast and introducing new Technology Like the computerized selfordering kiosk in australia where you park, and the food is drivethru lines. There is a hand held app. Its going to get better. The focus is on the u. S. Which hassle real growth and thats a big deal. Over looked in the stories i read and the Conference Call was the shocking comeback in china where same store sales rose 28. 6 . Bringing them back to where they were two years ago before bad pub lisly knocked them down. Its just the beginning of a major turn as the chinese are flocking back to mcdonalds though they are staying away from kfc and taco bell for now. I need to do more work on yum. It could be a turn around. I have been a fan of easterbrook since he came in. He knew things were broken add he had to get it right fast as he had done for the companys european division. He knew simplific

© 2025 Vimarsana