Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money.
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 8/12/24
This episode is brought to you by Merrill. With a dedicated Merrill Advisor, you get a personalized plan for your financial goals. And when plans change, Merrill's with you every step of the way. Go to email.com/ bullish to learn more. Merrill, a bank of America company. What would you like the power to do? Investing involves risk, Merrill Lynch, Pierce, Finner, and Smith Incorporated registered broker dealer, registered investment advisor, member SIPC. Take your business further with the Smart and Flexible American Express Business Gold Card. It's packed with benefits to help unlock more value from your business purchases. That's the powerful backing of American Express. Learn more at americanexpress.com/businessgoldcard. My mission is simple. To make you money. I'm here to level the playing field for all investors. There's always a more market summer, and I promise to help you find it. Man money starts now. (dramatic music) - Hey, I'm Kramer. Welcome to Man of Money. Welcome to Kramer, America. Other than my friends, I'm just trying to make a little money. My job, not just entertain, but to educate, teach. Hold me at 1-800-743-C or tweet me at Jim Kramer. If companies would just own up to their changing circumstances, things would be so much easier for everybody. But who wants to admit that they made mistakes? If they just own up, I think they'd earn a lot of credibility for themselves. Leading the higher stock prices down the line. Instead, their stocks languish. As investors try to assess what's really going on, and they presume the worst, not the best. And that's what I've been thinking about on daily today. We're the Dow lost 141 points. As we've basically unchanged, now it's like advanced 0.21%. Because there's so much information and misinformation flying around at this point in early season that it's very easy to be led astray. So let me give you the most egregious examples of a mission that I've seen this earning season that will cause you to make faulty decisions. Notice, I didn't say anybody's lying, but they're leaving out important information that can cause you to make mistakes. And it's you that I care about, not them. First, despite the fact that roughly 20 million of our kids are said to be taking the GOP-1 weight loss and diabetes drugs, no, none, no food or beverage companies will admit that these drugs have hurt them at all. They won't even hit at it. Now let's puzzle over this. We know that people eat much less when they take these GOP-1s. We know that they consume a lot less snack food, for instance, because the drug tamps down on cravings. Do you wake up in the morning and drink alcohol? No, of course not. But after work, it tastes pretty darn good for many Americans. Natural, right? But that's not likely in GOP-1s because when it comes to liquor, it always feels like it's seven in the morning. There's no real taste alcohol, so why drink it knowing that it's not good for you? Why do you prefer grape juice? Again, no cravings. These drugs are incredibly powerful. The idea that they aren't doing any damage in the snack food companies or the liquor place is just insane. Yet, here's more, or, apparently, on the verge of buying snack food maker, Kalanova. Here's Smuckner's Thrill with its acquisition of Hostess Brands with its flagship Twinkies. Here's Brown Foreman with horrendous sales. But it's, you know, I don't know if you know why. Any, like, Tennessee? Because I've got to tell you, there's stuff. When you drink Jack Daniels, it is filled with sugar, okay? And that is really being impacted, but they won't say what it is that's hurting. They say it's not cannabis, they say it's not GOP-1s. But same thing with the audio, the liquor company. Why is Casamikos down 20%? No one will say anything. I've got to tell you that the refusal to attribute any of the sweetest to GOP-1s is just hogwash, okay? Hogwash. If you didn't know better, you might think that these companies all got in the room and said do not mention GOP-1s, no matter what, no matter what, analyst says it, no matter what, reporter answered, do not let it be known. I wonder how long they can maintain this fiction. It would be better if they just own that it's a problem rather than ignoring it. The price-turnings, multiples are shrinky as it is. I mean, is anyone fooled? Who knows how much they're really being hurt? Unless someone we've decided, somehow we've decided that 20 million people eating about half of what they used to and drinking dramatically less doesn't matter to these companies. And the GOP-1 users tend to be gigantic consumers of the worst, that's what they do. So you've got the biggest consumers to eating much less, come on. It drives me crazy. Second connoir, nobody has to lower prices. Everything's fine. Very few companies have reduced prices post COVID, no matter how much they raised them during the pandemic. Costco and Walmart have pushed prices back. No coincidence that they've been among the best performing retailers. But the airlines, endless underperformers, simply want to have any need to roll back prices. They act as if they didn't even take them up in the first place. Hotels and entertainment are no different. They raise prices drastically during COVID. They won't cop the raising prices too much, even as the forecast will come down hard. Many of the restaurants have asserted that their price increases haven't really heard sales. Or in some cases refuse to admit that they need to roll them back. Starbucks, for example, gives good deals to its rewards members, but they can't seem to get new people to join. I think that's because there's no entry level coffee offering with a low price to get people in the door. They don't want to go there. Is everyone in the industry up to send in denial? No, just like Costco and Walmart, chipotle, arguably the best-run restaurant chain, admitted to raising prices too high in California because of the impact on the bottom line from the state minimum wage. It hurts sales and they acknowledged it. Hey, is there any reason why chipotle does the best-acknowledged, best-run restaurant chain with the best stock? They own what's wrong, and they change it. Third-card, we're constantly being told that none of the big companies spending a fortune on Nvidia chips for AI has seen any meaningful return on that investment. They're only doing it to prevent their competitors from getting an edge. That's what we keep hearing. That's absurd. Memo to the coolest naysaying individuals. Have you seen what meta platforms have been doing with their computing power? They have, out of nowhere, become one of the most popular gender of AI platforms with meta AI. You have to try it. I have switched to it. It is that good. Meta's been using their Nvidia versions to make Instagram and reels much more relevant to you, much faster, cleaner. Meta has the best numbers of any of the tech titles. You think that's a sort of coincidence? Google and Amazon aren't buying because they're worried that the other guys might do something. They're specifically worried that Meta's gonna catch and pass them, and they should be. Nvidia's Jensen Wong has been telling you, you can get four times your money if you buy his chips. Four times returner. I think Meta could end up getting that. The others, they actually have to spend to play catch up. It's not mythical, it's reality. How much money have you made over the years betting against Jensen Wong? Fourth-carded, and it is a good one. That has fooled many of people. Many of people. Intel's fine, better than ever. Don't worry about it. I keep hearing that Intel's gonna make a huge comeback. That is catching up to the others in the data center. That has an Nvidia killer in Gallery 3. That it's using the chipsack running for further installments. Dream what? Have you seen Intel's Balanchy? Can you re-one? Do you think a company cuts its dividend last year and then suspends what was left of it this year in order to assert its dominance? Well, this is not the Intel of old, even though he wanted to be. When it was the classes that destroyed the universe. AMD isn't nipping at their heels. AMD is dominating. It's actually taking gobs of market share. And Gallery 3 is not a factor when it comes to Nvidia's high end chips. Despite Intel's port stations, I wouldn't want to be Intel's partner. Not that, again, anyone would ever admit to that, whether they're in government or whether they're in business, whether they're clients, whether they're customers, fifth and final. We're told enterprise software is doing better than ever. Forget that this is the single worst area that's talking about. It's a wasteland, people. As companies cut back on their spending on software that's meant to help them run their businesses better. Perhaps they can't figure out the return investment in a world where AI could make all sorts of employees redundant with the acceptance service now. And by the way, no, you need to tell me that I'm doing it right service now. Accepted service now, so many of these enterprise software companies reported so-so are just plain bad numbers. We don't know why, but it would help if anyone in the segment would own up to what's alien. They won't because they're so used to delivering blah on numbers that keep hoping it's gonna come back. They don't know how to explain away the disappointment because they refuse to even acknowledge it. Bottom line, that is a short list 'cause I don't have all day of obfuscations, canards, and downright refuse to recognize the problems and hurdles businesses are facing. Maybe they think if they ignore the problems, they'll go away. Let me ask you, has that ever worked for you? Denial is a powerful defense mechanism, but it is a terrible way to run a business. By the way, Kesha was quite wrong. When she said, brush your teeth with a bottle of jack, there is no time that that is a good idea. All right, let's go to Steven, Arizona, Steve. - Hey Jim, how you doing? - I am doing well, Steve, how about you? - Good, just signed up a call number last month. - Yes! (audience cheering) - Yeah, you know, I'm looking for myself, the level investor, I'll make it quick. There's just two things. I just wish some of your callers, went bother spending so much time going over a stock chart, endorsing a particular stock. I'm sure that leads everybody's time to agree with that. - Everybody's nice who calls, I'm thrilled. And everybody's right here, everyone's very graceful and gracious and so am I. So go ahead, Steve, but. - Yeah, Taiwan, semi, I mean, you know, out here there's got a $40 billion plant. You know, these guys are just, I know it's the whole geopolitical thing, but I mean, it's, wow, I mean, these guys are-- - Oh, I think they're fine. I mean, I do think that there is always gonna be a worry about Taiwan. I think that though, if you go back to what Lisa Sue, the great Lisa Sue said, may and D, she didn't tell you not to worry about it 'cause nobody says that. She says, you know, look, this one is not going to be a problem and I am with her. Let's go to Sharon in Minnesota, Sharon. - Hey, Jim, thanks for all your help. I just wanted to ask about ELF. It's gone down in price, but with the lower guidance, do you think now is a good price or would you hold the bill? - You know what, I am, I don't usually say this, Sharon, but I am, it's just concerning to me that Ulta hit a low. The action in Estee Lauder is so horrible that they ought to just issue a release saying, we don't know what we're doing and we're gonna just go away. So I'm worried about ELF, just because the competitors are flailing so badly. I will give Tarang his due though. He'll come out of it first, but this is the single worst neighborhood I have ever seen in this market. Let's go to Jack in California, Jack. - Who, yeah, Jim, fight on from Southern Cal. - Love it. - I was curious as to what you think for the future of Paramount Global, considering the merger with Skydance Media. - I think this is a fabulous time to sell it. It's a fabulous time to sell it 'cause you're still gonna get 10 bucks. They can't take that away from you. Kind of like, who's that Gershwin? Anyway, that's the deal. Look, maybe all these companies wanna believe that if they ignore the problems, like pricing and Juby, that's once they'll go away. I say that's hardly ever worked. - Well, man, tonight, still making a Cleveland class hit a new 50-week low today, red flag or buying opportunity. I'm hearing from the CEO. Then I'm taking a look at one sec that I think will benefit the feds environment for the rest of the year. You won't wanna miss it. And not many companies can say they make ice cream machines, outdoor fans, and hairdryers older, one roof. I'm getting rid of the consumer with the CEO of Shark Ninja. So stay with Kramer. (upbeat music) - Don't miss a second of Mad Money. Follow @chimcramer on X. Have a question? Tweet Kramer, #MadMensions. Send Jim an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. Miss something, head to madmoney.cnbc.com. - At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care. And we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best, it's possible. 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Join more than three and a half million businesses worldwide that use Indeed. Listeners of this show will get a $75 sponsor job credit to get your jobs more visibility at indeed.com/madmoney. Just go to indeed.com/madmoney right now and support this show by saying you heard about Indeed on this podcast, indeed.com/madmoney. Terms and conditions apply. Need to hire? You need Indeed. Breaking news, the peanut butter group and Chocolatey Corp have merged to create PBC Inc. And the byproduct of the merger is the new delicious Jiff peanut butter and chocolate flavored spread. I got the press release and get this. Critics tried to say it creates a monopoly on cravability. But obviously, it's not illegal to be irresistible. Calling it now, this will revolutionize the snack industry and the contents of my pantry. Visit PBCincorporated.com to try the flavor merger of the century, Jiff, PBC. (upbeat music) We're in a tricky moment for the cyclical stocks. On the one hand, these are economically sensitive stocks and perform worse than when the economy is slowing. Yeah, and it's definitely slowing. On the other hand, though, they're going to be a huge boost along with the broader economy and the federal reserve eventually starts cutting interest rates. And I think that's coming. When we look at the materials companies though, right now, they're trading like our session is inevitable. And the Fed's too close to do anything about it. Even though it's completely wrong. Take Cleveland Cliffs, a major American steel producer with a focus on value-added sheet products, especially for the auto industry. Here's this stock that's down 45% from as high as in April. Just when it looked like it was stabilizing last month after a solid quarter, people started freaking out about the economy. And Cleveland kids became a house of pain even though it delivered great numbers. It's having a new 52 week load today. But man, the moment that the Fed starts cutting rates, people will be kicking themselves for not owning the steels, including maybe especially this one. So do not take it from me. Let's check in with Lorenzo Gonzalez. Now, Lorenzo is the Chairman, President and CEO of Cleveland Cliffs to get a better sense of what's happening here. Mr. Gonzalez, welcome back to Mad Money. - Thank you, Jim. Always a pleasure speaking with you. - Okay, so let's go over this. I know as a former hedge fund manager that the stock you wanna own when a Fed rate cut is coming is the coiled spring kind of stock. And that would be a company that reported great numbers, but people don't like it 'cause of the cycle. That would be you. Could you please explain to people the way the market and the steel market work and how important this is to be able to try to start buying the stock? - Thanks for the opportunity, Jim. That's the right question at the right moment. Cleveland Cliffs is a cyclical stock in a cyclical market. And cyclicality is a friend, not an enemy. At this point, we can only go one way and the way is up. The economy continues to be in decent shape. Of course, the Fed will have to start acting on interest rates. All the things that were indicated was that would allow them to be paralyzed are moving up. So it's about time for things to start to move in the other direction. Our business continues to perform. We are taking actions on our side to do our part. So there's only one way to go and the way to go is up. - Well, now I searched the entire panoply of what can go on in the steel business to try to figure out why the prices keep falling. I come back to maybe a lot of people are using Mexico to bring in steel like they shouldn't 'cause that's just patently illegal. - Well, prices at this point kind of stabilized. Stabilized at a low level, but it's stabilized. The prices are no longer going down. As far as Mexico, Mexico is a big problem. Mexico is not a friend. Mexico is a dumping ground for transshipment. Mexico will be taking care of in the next revision of the USMCA in July of 2026. We can no longer afford this situation with Mexico taking advantage of our free trade agreement with the United States and Canada. Both countries are being damaged by Mexico and this is about time to start. - I'm glad you mentioned Canada 'cause I think that Stelco is a really excellent company. And if you get that deal done, it will just make it so your company is, I think, even a little less cyclicality, but tremendous value. But is there a chance that any one of these regulatory agencies can get in the way? I know Canada's in favor of it. I know the workers are in favor of it, but I don't trust our governments to be able to favor it. - Well, deals are approved because the deals make sense and the deals do not cross any lines or do not inflict any damage to important constituencies as the union. In our case, we have union support. We have support from the province of Ontario and from the federal government in Canada. We are doing a good thing for the country of Canada and we are not buying anything that would conflict with the business that we have in the United States. Actually, Stelco is a big player in the portion of the market that Cleveland Cliffs is not strong. We are strongly high-value added, high-end, automotive, stainless, electrical steels. Stelco is in the commodity side of the business. So it feels a void in our portfolio and we will not have any problems in clearing antitrust or anything like that. - Excellent. - Would you be as moosey or gonna be done by way before the end of the year? - Okay, well, let's talk about another deal that I think you're not a big fan of, the Nippon Steel buying a letter X US deal, which initially you wanted to buy. You reference it actually, you talk about it in your most recent club school, you talk about Mike Pompeo, who's got an interesting piece in the journal, not that long ago, and that he may be damaged goods. He's obviously at the forefront of trying to get this deal done. Do you think of success when current President Biden and potential President Trump are saying this one's dead in the water? - Look, there are very few things that can unite both sides. The opposition to that Nippon Steel deal is one of the very few. Neither the Harry side nor the Trump side would support anything related to the Nippon Steel deal. That said, Mike Pompeo being a paid supporter of the deal, just signed off not to be part of any possible Trump cabinet going forward. So like I said in the conference call, damaged goods, Mike Pompeo and hundreds of other paid opinionators that were hired by either US Steel or Nippon Steel. It's not advancing the ball, and the fate of the deal is being decided. Good luck to both the US Steel and Nippon Steel. I'm focusing on the steel core right now. That's important for us. - Understood, but you have done two deals in one year. So you actually are capable of doing many deals if you'd like to do. If you think that they're valuable to shareholders, I know you will do them. But I would think that buying your own stock down here versus buying another company after Stelco might be a better investment. That maybe your stock's a better buy than owning US Steel. - At this point, we are the most undervalued among all. And we are the ones that are focused on the high end. We are filling the gap by acquiring Stelco and playing a bigger role in the commodity side of the business. So we're very comfortable where we are at. We will continue to build the business. We are going downstream with the production of Transformers. We are doing what we do best. We are doing what we have to do in order to continue to generate real value for the shareholders. Unfortunately, in a silica of business, that doesn't happen every day. And eventually that doesn't happen every quarter. But in the long run, that's where the value is. We will continue to work that way. - Yeah, I'm sorry that we do not get to talk about we're in and the Transformers, 'cause that's a fantastic business that you're going into. And I feel badly, I would have liked to talk more about trade policy, 'cause I think that what you said about Mexico, unfortunately, is true. They have a new president there. I was kind of hoping things would change. Hasn't changed yet. Anyway, that's Lorenzo Gonzalez. He's the chairman, president, CEO of Cleveland Clips. Guys, if you want the coiled spring, you just heard it. That's this one. Lorenzo, thanks for coming on the show. - Thanks, Jim. Always a pleasure to be with you. - Thank you. May have money's back here for a break. (upbeat music) - Coming up, not feeling at home with a pure play housing stock? Kramer shares a few alternatives. Next. Walmart Plus members save on meeting up with friends. Save on having them over for dinner with free delivery with no hidden fees or markups. That's groceries plus napkins plus that vegetable chopper to make things a bit easier. Plus, members save on gas to go meet them in their neck of the woods. Plus, when you're ready for the ultimate sign of friendship, start a show together with your included Paramount Plus subscription. Walmart Plus members save on this plus so much more. Start a 30-day free trial at walmartplus.com. Paramount Plus is central plan only. Different registration required, so you want more plus terms and conditions. - Earning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track. We care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. - Imagine your future differently at Capella.edu. (upbeat music) - Call me a wide-eyed optimist, but I think we're actually in pretty good shape right now. Sure, there are signs of economic deterioration all over the place and it probably would have been helpful if the Fed had cut great to that last meeting. But if you're tearing your hair out because we'll likely get a rate cut in September, rather than July, I think you're missing the big farce with the treats. Even though the economy has slowed, we still got solid growth, 2.8% GDP growth, the second quarter, and the Atlanta Fed estimates it'll be 2.9% of the current quarter. The unemployment rate has ticked up, but it's still at 4.3%. He said, celebrate that level. Until seven or eight years ago, every economist in America had thought the world would have told you that we're basically at full employment with that number. Corporate earnings, of the SB 500. We've already heard from 45 of these companies and on average, earnings are up more than 9% year over year. Best of all, because inflation now looks to be fully defeated and the economy's cooled down, the Federal Reserve can start to reach into trade cuts in September, giving the economy a boost. We're actually in no man's land, but it's no man's land going to something good. With the prospect of rate cuts on the horizon, it's time to start betting on the return of housing as well as the repair and remodel market. By the way, that's been what's really weighed down on this group and that's heavily fueled by home equity loans and thus very much hostage to interest rates. And that's why those are by warehouse. And the largest owner of Timberland in America, back on July 10th, it's probably almost 10% since then, even as the SMBs down 5% of the same period. But if rates are coming down, then there are many other ways to play the housing and this R and R thesis, prepare remodel. Let me walk you through these 'cause they're really interesting and we've had a lot of them won. Let's start with builders first source. That's the nation's largest supplier of building products, value added components, services to professional builders, that's what they really serve, okay? Not you, both for new construction and remodeling. These guys have distribution centers all over America and they're consolidating what's historically been a very fragmented industry. Home builders and contractors have professed love for this company. Plus during the terrific rent for home builders over the past few years, builders first source saw its stock rise from $9 in March of 2020. Okay, COVID crash lows. They're just below $215 that it's peak in March of this year. Since then, it's pulled back nearly 29% from its eyes, but that's kind of where these stocks have gone. It's in the 150s where the stock looks pretty darn good to me selling for less than 14 times this year's earnings estimates, look, speaking of earnings, last Tuesday morning builders first source reported an interesting quarter. While the company essentially matched Wall Street's revenue estimates, they blew away the estimates from the earnings front, making $3.50 per share. And it's one of the looking for $3.02. However, management also took this opportunity to cut its four-year sales guidance. (screaming) Wow, $1.2 billion at the midpoint of the range, while trimming its earnings before interest taxes appreciation and immunization guides by $300 million. That is brutal. While that guidance cut looks bad, management didn't seem the least but downbeat though. In fact, builders first source actually announced that it'd repurchased nearly $1 billion with the stock in the quarter and told us the border authorized another $1 billion buyback. I mean, keep in mind this company's significant. This company's only an $18 billion company for every second. At the end of the day, I think this was an appropriate reset of expectations for the year, but also a demonstration that builders first source can still perform well on a tough environment and a huge vote of confidence in the future. If I were then, knowing that rate cuts are likely in the cards, I'd be authorizing huge buybacks too. And that's why the stock rallied 4% in response that would look like a terrible forecast. You know what, I'd still be a buyer because I bet builders first source has a lot more to run. Don't buy it all at once, it's a wild trader. And that's why I also like Ferguson. That's a leading distributor building products, especially for plumbing and heating, ventilation, air conditioning systems. First is very similar builders first source, but the main difference is that they serve both the residential and non-residential construction markets. 5M and 8, though it's both residential and non-residential benefit from lower interest rates. This stocks had a nice move since the company moved this primary listing from London to the New York Stock Exchange in the spring of '22. Ferguson climbed from just below $100 and it slows in October '22 to a high of $225 in change at the end of July. But the stocks been knocked down 30 points or more than 13% from that high in less than two weeks without any company wide specific numbers, at no developments. I think you're getting a nice chance about a quality stock at a discount. Before Wall Street goes crazy for Ferguson again, once the Fed starts cutting rates, who else? There's a reason we own Stanley Black and Decker for the travel trust. This toolmaker saw it stock drift lower in the first day at the year largely because of a slowdown in home building, repair and remodeling, but then Stanley Black and Decker caught fire after the cool June CPI meeting, then jumped higher still after the company reported a strong quarter at the end of July. If these guys can deliver small revenue beat in a 25% earnings basis off an 84% basis when times are tough, imagine how much they can make when the Fed starts cutting rates. In response, the stock jumped 10% in a single session, but that was right before the market started rolling over. Since the stocks erased all of its gains and then some, you're now getting that excellent quarter for free, including a raise for your earnings forecast. If you believe that lower rates are coming, then Stanley Black and Decker is another really great opportunity. Now I will be discussing Stanley Black and Decker at our CNBC investing club meeting Wednesday, noon, so be sure to join us. Remember, we sold some higher, trying to figure out whether to buy it back. I'm gonna talk about that. Now there's one name that could potentially fit this theme, but I'm holding off on a recommending round. That's Home Depot. Home Depot, which I'm hesitant to recommend because it reports some arm warning. I think there's a good chance that despite a soft numbers for the reported quarter, the three month period that ended with July, that said, the reports could still be a very positive catalyst if management paints at all a positive, enough picture of its outlook in the back half of the year as rates start heading higher. Either way, I'm not gonna stick my neck out. I mean, let's just wait 12 hours to see what they say. Bottom line, if you, like me, think we're not headed for a recession, taking it off the table, the Fed will soon start cutting rates from a position of strength. Then you should be looking for groups that benefit from lower rates and a relatively solid economy. Groups like the Home Building, repair and remodeling plays like Warehauser, Builders First Source, Ferguson, club names Stanley Black and Decker, and potentially after the model, Home Depot, depending on what they have to say, and of course, they're around 6 a.m. How about Matt and Pennsylvania, please, Matt? - Hey, Jim, how are we doing? Go for it. - Go first, yeah, we're heading to New England right now. What's up? - Absolutely. All right, my question is, Jim, thanks for taking my call. I've recently built a retirement portfolio of dividend stocks that include Procter and Gamble and Colgate, and recently I picked up shares of real-tea income. It pays a monthly dividend with a steady increase in price per share. What insight or advice could you give me about these dividends? - I actually really like real-tea income. I know that there's some concern that some of the companies that are inhabitants, the ones that they use, like the drug store companies, could be in trouble, but I think you're up to like, the monthly dividend is terrific, and the stock has been a rocket ship, and I think it's gonna stay strong. It yields 5.23%, pretty good, and thank you for the call. If you're an optimist, like I am, and think the federal cut rates before we get to recession territory, I think you want to look at the Home Building and remodeling plays. That's a book that will benefit from lower rates and a solid economy. I just gave you some good news. Much more man money, including my suit, with a Shark Ninja SN. As the consumer faces inflationary prices, could a company like Shark Ninja pull ahead with its mantra of high-quality low-cost items? I'm finding out more with the CEO, and they have a lot of cool stuff in the stores. Then we're all still trying to understand the implications of last week's major 1,000-point drop in the towel, but I bet the explanation is simpler than most people think. I'm gonna share my thesis after being on the street for more than 40 years. And all your calls have forced rapid fire tonight, since it's the lightning round. So stay with Cramer. (upbeat rock music) (upbeat rock music) I can barely believe the run in the shares of Shark Ninja. Let's make Shark Brand cleaning products and Ninja Brand kitchen appliances, among many other things. They have to quietly list these shares in New York Stock Exchange, but a little over a year ago. This stock is more than doubled, including a monster 17% jump after the company reported really impressive beat and raise diet last Thursday. Even better Shark Ninja gave an excellent full year forecast, talking about 20 to 22% sales growth, when the analysts were only looking for 15%, and they detailed how this is gonna happen. So we gotta find out how they've been able to pull this off. Let's take a closer look with Mark Borocas. He's the CEO of Shark Ninja, who will learn more about the story. Mark, welcome back to Bad Money. - Thanks so much for having me back. Of course, now there's a great moment in your conference call. Most people are not as illuminating as you are in a conference call. Where people are asking, why are you so good? And you say, it starts with identifying a known or unknown consumer problem and trying to solve that problem. Talk to our viewers about how you do that in some of your verticals, 'cause it's quite exciting. - Jim, I mean, we do that in so many different ways. I mean, we're in hundreds of consumer homes every year. We're scrubbing social media. We're scrubbing online reviews. We're in restaurants and commercial environments. We're in offices watching how people clean. And we're looking for that consumer problem nugget to try to come up with some way to solve. And I think we've done that across 34 different product categories over the course of the last 16 years. And some of the really exciting products that we've done that with recently have been are Ninja Frost Vault Coolers, where we identified this problem of the soggy sandwich. Or we just recently did this with a new product that we launched called the Ninja Slushy that's bringing convenience store slushies to your countertop. So we've been able to do it across big definable markets. We've been able to do it across markets that have been smaller, that we've enlarged the size of the market. But that's really the drive and the passion of the business. - All right, let's think down to the slushy. A hundred thousand weightless, which is really incredible. And I sat into my wife and I showed her to her. She said, "I've always said, "How come I have to go to the movie theater "to get this darn thing in? "It's so expensive. "How did you figure it out? "And how did you get the people to want to comply "who were involved with this?" - Well, look, Jim, I think it goes back to, let's start with the Ninja Creamy that has over a billion views on TikTok and Instagram. And has been a real success. We identified this lover excitement that consumers would have for making ice cream at home. And we're always looking at ways that the consumer is enjoying or doing something outside of the home that they're not able to do inside of the home. And the example that you just gave is the perfect one. They might go to a fast food restaurant, they might go to a mall or a convenience store, but they're something that they can't do within the home. And another great example of that is the Ninja Cafe Luxe that we just launched. I mean, being able to make espresso and coffee and cold brew and so many different coffee drinks on their countertop, again, something that they were doing outside of the home in a place like Starbucks, but now we're able to do it inside the home. - All right, Mark, let's dig down on that one too, because the fact is, as I bought it yesterday at Best Buy because I wanted the espresso martini. And I'm tired of paying $1,100 for a competitor. You and I both know that it's a very good machine with a lot of good stuff in the mall. How are you able to come in $500 less than a competitor that we know is a very good builder? (indistinct chatter) - Well, look, one of the things that we're looking at is how do we enlarge the size of the markets that we participate in? So in the example that you just gave, the market for espresso machines in the United States is less than 1% household penetration, but it's something that consumers wanna do, but they told us that one, they're too expensive, and two, they don't give enough versatility to the consumer. So we looked at that market and we said, let's not just offer espresso, let's offer drip coffee, let's offer it in a 16 ounce travel mug size, let's offer cold brew, ice coffee, cold presso, let's not just froth the milk, but let's be able to froth non-dairy milk as well as dairy milk or froth cold as well as hot. And when you put all of those things together, we really look at what are all the features that the consumer will be willing to pay for, and we came away with the fact that consumers through our testing was $4.99 was the right price for that product, and you might think, wow $4.99 is expensive, but as you said, these products can cost over $1,000, and so with what we're offering from a versatility standpoint and a value standpoint, the product's doing great right now, as you pointed out in Best Buy, on Amazon, and also in our direct-to-consumer sites. - All right, now you have a terrific group of engineers, I know you're still adding a large number of engineers, and so you're handling that side well with an election coming where there are some presidential candidate really doesn't like China, no one doesn't seem that fine of it either. Are you ready to be able to move the rest of your supply chain out, if it turns out that you have to cost, that you especially mean suddenly it costs $1,000 'cause of tariffs. - Well, regardless of who wins the election this November, we have been working for the last five years to diversify our supply chain outside of China. Today, we make all of our 301 tariff products outside of China, and by the end of 2025, we will be making all of our US products outside of China. So again, regardless of who wins, we think we're really well positioned to avoid any of the geopolitical challenges that may exist. - And where's that Vietnam, Malaysia? I know you're doing some of Vietnam, but I'd like to know who our friends are, where else do we get things done in this? It oversees it like us. - Yeah, so it's really all through Southeast Asia. As you pointed out, Vietnam, Thailand, Malaysia, Indonesia, we're looking at Mexico, we're looking at doing some manufacturing in places like Brazil. So we've really kind of opened up the global market to figure out where is really the right place for us to get the quality that we need, the fast turn time, and the extraordinary value that we deliver to consumers. - Well, whether it be, though, how to use social media or knowing how people buy things and where they buy them or where to build them, Sharknids, you guys are very, very impressive, Mark. I wanna thank you, Mark Brokis. He's the CEO of SharkNidja. What a stop. Thanks for coming along. Really excited. - Thanks so much, Jim. - All right, may everybody's back yet for the break. - Coming up, hit us with your best shot and electrified fast fire lightning round is next. (upbeat music) (upbeat music) - Hey, it is Tom. It's up to the light round. Come on, let's talk a bit about bye-bye, bye. So let's just turn on the call so you can play this out. (buzzer) And then the lightning round is over. Are you ready, ski, guys? Over to the light round. Here's a bunch of them with Tim and Wisconsin, Tim. - Hey, Jim, I wanted to get your opinion on half flash right now. It's the buy still and throw those points. - Yeah, you know, it's not my faith. It's not my faith. I do like chubbing insurance business, but that's really about it. Let's go to Joanne in California, Joanne. - Hi there. - Hey, Joanne. - I need to visit the mite show himself. - All right. - I've been through health science with my some homework assignment I have for my TJF, 12 girls in finance. - Well, all right. - I like that club. - Yeah? - I like that club. - Anyway, how come to help? - We're trying to give her some time and we have nothing in the health care sector. So I came up on, well, actually we'd like to find a smaller midcap, but they're hard to find. So I came up on an element, ELV, ELV, ELV, ELV, ELV. Just want to do your thoughts on it before I... - Sure. Okay, ELVitch is the old anthem and people keep thinking, well, why does this brand new ELVitch? It's not new. And that's why I'm suggesting, even though Anthem is okay, the United Health is still the cream of the crop. I couldn't believe how they've been able to accomplish so much during this period that nobody else has. Let's go to Matthew in Texas, Matthew. - Your spare, Jim, thank you very much for taking my call. - Oh, absolutely. What's up? - I have been looking for a good lithium miner for quite a while and I've had my eye on ELV. - Yeah, it's a good lithium miner, but in business that we don't want to be in. I mean, this is just an EV, BVs are not ready yet. There are enough charging stations, a lot of other different issues. So we're going to steer clear about Mark. Let's go to Gary in Texas, Gary. - Hey, Jim, thank you for taking my call. - You're welcome. I'm 74 years old, I'm always concerned about my vision, to my eye health, to follow a lot of small companies that make eye products. But one in particular follow seems to have an outstanding management team that always delivers all its promises with consistent growth. It just had a fantastic quarterly letter in stockholder and earnings. What is your opinion, sir, of HROW, Harold? - I don't know. I don't know. - HROW, I'm going to have to come back on that one. I'm going to talk to my chief scientist and research director Ben Stoto, and we'll come back with that. Let's go to Noah in South Carolina, Noah. - Hello, my name is Noah Jacob. I'm a rising senior at Brigham Young University. - Yes. - And a beginner investor. Back to the tragic Maui wildfires last July, Sheriff of Hawaiian Electric plummeted from $40 from $13, and have been hovering there the past year. What are your thoughts? - Man, I'm telling you, this was a good Nundrum. They had some bad stuff to say today about their concern, about their ability to continue, which of course is not a problem, but they need a seasoned person. They need a patty-poppy to come in there, like TCG, because they really do. I honestly, I'm not sure they know how to handle this situation. I really, I'm not sure. Let's go to Tyler in California to be Tyler. - Hey, big boy from California. How you doing, Jim? - I am doing well, how about you? - I am doing good, thank you. With Snapchat being down 50% in the past month is now a good and buying opportunity. - No, they could use patty-poppy too, frankly. I think that Snap is really not, it's not investable. When I was in that comm school, I just have to tell you that they seem like an irrelevant company. I know that's a tough judgment, but that's what I'm paid to do. Let's go to Germany in California, please, Jeremy. - Hey, Jimmy, chill. - Yo, man, what's up? - Oh, doing good, man. I bought into this company around about $40, $50 a share. I've been loving the ride the last four years. And recently, after the night of Chick's chips funding, I was curious, what do I do with AMAT? We got earnings looming next week. - All right, look, I think that the companies doing well, I think that the government is not crazy about their posture because they do so much business in China. Now, I think that's a shame. I mean, to criticize a company or to be skeptical of a company that, frankly, has done a great job, does rank only, but I think that AMAT's a buy, okay? Let's go to Antony, North Carolina, Antony. - Mr. Kramer, who ya? - Yes. - Who ya? - Yes, indeed. - I got a rather, I got a rather large position in a monthly paying dividend stock. One of your opinion on it, the stock is Main Street Capital. - That's a business development company. I have never trusted business development companies. I don't care. I don't know what they own. I am not gonna recommend one. I've actually scared clear of them and really helped a lot of people doing so. Let's go to Jerry in Illinois, Jerry. - Hi, Jim, I need your help. - Yeah, sure. Didn't go right place. - This Thursday, Ollie Bobber reports. Do you think they can finally start turning things around and you give them a gold medal? - Okay, here's my problem with Ollie Bobber. It is an incredibly cheap stock, all right? They're gonna port a great number and then there's always gonna be something that people don't like. And then they sell it down, but I'm not gonna tell you, I'm gonna tell you it is a cheap stock. And that, ladies and gentlemen, who couldn't have the lightning round? (buzzer buzzes) - The lightning round is sponsored by Charles Schwab. - Coming up, making sense of a sell-off, Kramer waged through last week's manic Monday for answers. Next. - Jim Kramer, it's die hard of a dollar. - Hey, Jimmy, love the show. My five-year-old grandson loves to watch your show. - I have to thank you for making us money when it's there to be made. - Our world is a better place with you in it. (upbeat music) (upbeat music) (upbeat music) - What did happen when the market fell apart a week ago? Why is it so opaque? Simple, nobody in this business required to talk about how they blew it. How they said we didn't know what they were doing and lost a lot of money because your portfolio can get hammered as collateral damage. That's how we ended up with the disaster we had last week and in swing combat we had last Thursday. When you get a sell-off you're always trying to figure out what's really at stake. What's going wrong? Go back to one week ago in the Japanese market fell apart. We saw most of our big caps stocks fall apart with it. We witnessed the collapse of the small cap trade. We further of the sudden decline in the financials. It's always interesting to watch the process and decline unfold if you do it clinically. It began with an examination of the bond market. We saw a dramatic decline in yields. We couldn't get a straight story. So journalists have just been to their sources, claimed that our economy was headed for a hard landing. Of course, that was totally false. Big bars and charges were related to the Japanese meltdown. Nothing more. The huge tech sell-off, we heard all about how AI had been defrapped at last and companies buying amounts of chips from Nvidia were all marks. The rumor that Nvidia's new high-end chips were running late became common parlance. The point where we decided that the whole company was being set back by the product's lateness. Nvidia became the go to the game. That whole anti-tech thesis to lingers. But here comes Nvidia jumping 4% today. All very positive UBS pieces had the whole Blackwell disaster, which was not to be much too bad, nothing. In short, there's nothing new at all here. And even if there were, the company's current iterations of high-end chips, the H-200, can fill in the gap. Now look, I fully expect the stock to get hit again tomorrow. Many of its holders know a little about the company. They really, they just tell you they love it. But it was a huge buy a week and 10 points ago. The banks, we tried to blame the decline on commercial. Real estate was, but that turned out to be a tough sell. Given that tons of people have come back to work five days a week, making the Class A office buildings pretty valuable again. Well, yes, there are plenty of out-of-date buildings that are for sale, but it looks like the woes are manageable. Obviously the bank stocks are still down. I think there are a percent real value here. The small caps are trying to come back, but there's a big issue here. Turns out that the small cap trade was really hard unwind without pressuring the stocks, 'cause no one actually bought the stocks. They bought the ETFs and buyers in non-dated with stock, walked away when the sellers came out of the Warbrook on Tuesday. Is the trade done? The buyers will nibble. But we now know that it's easier to get out of small caps than it is to get out. I get me to do some easy getting to get out, and I've got to tell you, a lot of this stuff is not done. That is still unwinding. Now let's go back to the Japan pop. We keep hearing that there was this great unwind of the again, carry trade, but that's authentic Wall Street gibberish. The reality is that a bunch of money managers took advantage of how you could borrow against Japanese bonds, which had a very low interest rate, and then had relatively free money, which you could then put the work in stocks all around the globe, including here. The managers who did this trade, and it was many different firms, didn't anticipate that the long-dormant in the back of Japan, would wake up and put through two rapid-fire rate hikes. They owned a lot of stocks around the world, and they had to sell because they were playing with cheap money that suddenly became a lot more expensive, and that caused the sell-off no more no less. Now, if we'd known who these ill-advised managers were, and how big their positions were, then that would have been the story, as opposed to all the bogus pin-the-tail and the sell-off headlines we got last week. Of course, that doesn't happen because secrecy is everything on Wall Street. These client's names were protected, but if their story had been written, everyone would have had a different attitude toward last week's decline. We've had so many sell-offs based on mistaken strategies by large institutions that forced journalists and commentators to create bogus alibis, explaining why the market's going down. Their torture analysis could be avoided if we knew the identities of the near-to-well funds, along with their strategies, their leverage, their destruction. We can't do that, though. We can't find out the names, but let's remember, last Monday's sell-off, and consider it might have been about nothing more than flailing money managers, which is often the case with these big market meltdowns. Like I said, as always, bull markets are on my palm start finding, just for you right here, man. Money, I'm Drew Kramer. See you tomorrow! All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Jim Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com/madmoneydisclaimer. Imagine earning a degree that prepares you with real skills for the real world. Capelli University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capelli can make a difference in your life at Capelli.edu. [BLANK_AUDIO]