Mad Money 07/16/26 | Audio Only

My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. WELCOME TO CRA. Other people make friends. I'm just trying to make a little bit of money. Now, my job is not just to entertain, but to do some educating about a crazy market. So, call me at 1800743 CNBC or tweet me, Jim Kramer. It takes a lot of hubris, a lot of guts to disagree with the market's judgment about a stock after reports. You're basically saying that the collective wisdom of millions of people and billions of dollars is just plain wrong. Yet at times I think the sentences pronounced against stocks are soyally wrong that you got to call them out right here. You have to appeal so to speak otherwise you're going to miss some incredible buying opportunities. My job is to show you. So, in a day when the Dow fell 106 points, that's declined.51% and the Nasdaq lost 1.47%. I want to go over some of the dumbest judgments that have ever been rendered so far this earning season, at least in my opinion. And none of them, thank heavens, are part of the hellacious tech unwind that everyone else is possessed by. The first is GE Aerospace run by the tremendous Larry Culp with a stock that fell roughly 4% today. The market's dead wrong here. First, the aerospace boom which started postco is still in full swing. There's been no serious demunition of travel. The market's always looking for a pure play on a long-term secular trend like aerospace. Boeing's too uh too risky, even as I I like it, for a long-term comeback and position. in it for the travel trust. People are too afraid to buy Honeywell Aerospace, which is just spun off from Honeywell Technologies. We own that one, too, because it's considered a fixer upper. Boeing and Honeywell Aerospace are works in progress in one of the great secular growth stories, aerospace. But GE Aerospace remains the best institutional choice right now. You never sell the stock of GE, by the way, before Farnboro. That's the big British International Air Show that takes place next week. There's a good chance G will win its fair share of business over there. YOU GOT TO BUY IT BEFORE THAT. PLUS, this company's raised its fullear numbers gigantically based on strong orders and improved execution. Its cash flow was the strongest in years. Planes are lasting longer and GE makes a huge amount of money servicing the planes, which by the way is the highest margin business. They're going to return a ton of capital to shareholders. And yet, the stock got slammed. I think GE Aerospace is so important that I'm actually going to go over in detail if you stick around. Next, another one. You may bank there. Wells Fargo. Look, we had five major banks reporting on Tuesday. Oh, my head was on a swivel for heaven's sake. I mean, geez, I tried to pay attention to each one. Sure, JP Morgan was terrific. Everyone knows Goldman Sachs. Wells Fargo, however, WAS SAVAGED WITH A powerful analyst who actually cut his price target. Most of the community, the community, don't you love that? Dismissed this company and its quarter, but I would contend that Wells Fargo's quarter wasn't just good. I thought it was terrific. The analysts are fixated on this thing called net interest income and also they care about net interest margin. They want banks to make more money on the difference between what they pay you for your deposits and what they charge you for loans. That is all they seem to care about. And sometime sometimes it's just so myopic. When I was listening to the Wells Fargo conference call, I had to hear analysts one after another condescendingly asked CEO Charlie Sharp, who knows a heck of a lot more about banking than they do. Why he isn't making more off the deposits in his loans. Oh, but Charlie, how about the name? Oh, Charlie, how about the NI? Meanwhile, Charlie was talking about turning Wells Fargo from a bloated underachieving lender into a merchant bank of the first order that's helping companies uh come public and do mergers and acquisitions where the money is. By the way, it's very difficult thing for a bank to change his stripes, transforming itself from a loser in these incredibly lucrative businesses to a winning investment bank. But when you look at how Goldman Sachs is killing it, you know, that's what Charlie wants to emulate. And I think that's a great plan. He's rapidly moving up the tables. Listen, Charlie Sharp is known as one brilliant banker. He saved Wells Fargo, as I'm concerned, and yet it got killed when it reported because of these naysaying analysts who don't understand that Wells is transforming itself into something much better. It sells at 12 times earnings for heaven's sake. I told CBC Investing Club members that today Wells Fargo was a steal. Next, the best pharmaceutical company saved Eli Liy is Johnson and Johnson. It's got a top tier oncology franchise. There are so many potential blockbusters here in the pipeline. They could withstand any loss of exclusivity. Its neurology franchise out of nowhere has become the most important in the whole industry with spado for depression, capill for major depressive disorder. Lots of people thought those would never be major drugs. They were wrong. Iotide a recently approved drug for moderate to severe plaques psoriis may actually become the biggest drug in JJ history. It's opthalmology franchise after years of suboptimal growth is starting to get hot. J&J's got a AAA balance sheet, even better than the US government. It's spinning out its prosaic orthopedics business, which will raise the price earnings multiple of the remaining company. However, J&J had a heart business that made about $150 million less than expected. Something I suspect would be corrected later this year. Now, let's put this in perspective. 150 million less than expected on what kind of basis? On a hundred billion dollar basis. I say that's the tree. Focus on the forest of green, not the 150 mistake. For all that though, what happened? The stock got crushed at one point, falling eight bucks in yesterday's hideous performance. It did rebound a little, but today analysts half-heartedly supported it. You usually do not get a chance to buy Johnson and Johnson $20 below its high. I would take it. What else? Levi Strauss is starting to get it due now, but it didn't when it reported last week. I was pleasantly surprised when CEO Michelle Goss came on Mad Money and talked about the incredible strength of the women's division. This is a man's business. The direct to consumer business is growing like bad. Yoga, the disaster, the bane of all power for everybody else. Not Levis's. Nice upside surprise. Tremendous cost discipline. Terrific ad campaign. Every line item work. Not a single miss KPI. And what happens? Levis's gets crushed, falling over 2% last Thursday after report. We have so many disappointing apparel companies. It's crazy to me that Levi Strauss the success got dinged. Even it was only temporary. Sucks now above where it was when the company reported, but it's way too cheap. Finally, there's one that you're going to hear all about tomorrow, but nobody talked about today. United Health. Okay, sure. It opened up huge up almost $40, but it spent the whole rest of the day giving that back and it closed up a measily five smackers. United Health had excellent margin improvement, much better pricing, great numbers from its formerly lagging optimization. It is back to being the leader of the managed care group in part because this the great the wonderful Steve Hemsley has returned as CEO. I know the stock's up more than 28% this year, but it was in a real canon for a long time and it is well below where it traded a couple years ago. I can't believe this Dow stock gave up the ghost today. It was a fantastic quarter. Look, I know we're all obsessed with tech. We'd rather hear about which fund blew up from the declines in SanDisk and Nebius and Seagate and Micron than those attractive buying opportunities that should go up gradually over time that I just mentioned. There are people who want to borrow hundreds of thousands of dollars to buy disc drive companies and CPU makers that will get blown up. They don't want to own jeans or a plane or health insurance or national bank or drug company stocks that you can buy and own for the long haul. They want to borrow money from brokers and buy the hottest stocks and they will be eviscerated. They want to play with the big boys, the hedge funds. Some of them are getting blown up right right in front of us and others are shooting against those same funds. Those funds got filed. I think it's a much better game to find mismarked stocks that analysts don't really care for. That I can telling you right now I know better than they do. They're good. Look, as I said at our monthly CNBC Investing Club meeting, we like a lot of these tech component stocks, too. But they're in the grips of terrible shareholders are now being taken out and shot by the margin assassins. The bottom line, it's much better to take advantage of a mismarked J&J or Wells Fargo for the long term than to try to figure out exactly when the margin traders are going to get blown out enough that you can buy a disc drive company. After all, you never know when the poor souls who are being margined out of that commodity chipmaker will finish. That's not something you even need to ask yourself when it comes to these superb companies that I've just mentioned. These you just buy and put away and be thankful that the market got them all wrong and gave you five tremendous buying opportunities. David in Texas. David. >> Yes. Jim, my question is about ACN Accenture down 50% this year. It's got a 4.7 dividend yield and a $7.5 billion fiscal 26 buyback. Nice bounce here in the last week or so. Where do you think it goes from here? Okay, look, it it could bounce a little maybe back to where it has a four 4% yield. But you see all of the work that I do and I don't I spent a lot of time on Claude, not that much, but all the work that we do on these particular kinds of programs that we're talking about in artificial intelligence, they duplicate a lot of what Accenture does, but for a much lower price. So, I'm going to have to say stay away. Even though I know it's a good company, boy, the times they are a changing. Let's go to in Texas. >> hello Jim. It's a great honor talking to you. >> Thank you. Thank you. How can I help you? >> Yeah, I listen to Mad Money and the Morning Investing Club 10 minutes every day as much as much as possible. I like the show. >> Thank you. >> And then sometimes my wife gets frustrated when I'm listening to Mad Money every day and she's like, "This is evening time, coffee time with me, not with Jim Kramer." >> No, no, she's quite wrong actually. I think that you've actually figured out the right time and I got to tell you, you and I are pretty much in the same boat and I think that we both have a lot vested here. So, let's go to work. >> I tell her if I don't watch it, Jim Kramer shows I cannot maintain my portfolio. I have to give it to some management company. Then now she's okay these days. Oh, >> okay. So, she gets that. Well, look, you and I together we're going to we're going to kick butt. That's what we need to do. And tell your wife, by the way, that you know what? She's sensational, but she's saving some money doing it this way. >> Thank you. Sure. Um, the ticket symbol for now is Baba. I've been holding it for quite some time. I have a big push and should I have patience and continue to hold? I >> I think you need to have patience here. I think it's just down on a dip. It's the really still the best way to play China. I know the GDP growth of China was disappointing at 4.4%. And by the way, I am a harder line on the Chinese than most people you see on air. But you know what? I want to try to help people make money and I think you can make money Alibaba and tell your wife, you know what, she ought to watch it, too. Maybe she learns. No, check. Everyone could benefit. How about that? Right. Now, listen to me. If you want some long-term winners, look at something like a J&J or Wells Fargo. The the world is not made up of Seagate and Western Digital. Now, at least until investors stop flitting in and out of chipmakers. That may be the best way to go. I'm Money tonight. Like I said earlier, I can't understand the reaction GE Aerospace latest quarter. I'm digging deeper into the numbers of what I think is one of the greatest companies ever. Then what did JB Hunt's latest earnings tell us about the transports? I'm running through report and taking a closer look at the sector. It's a key economic indicator. And a transport can make you a heck of a lot more money than you realize. And we held our investing club monthly meeting today and ran out of time to get to all the questions you want to answer. So tonight we're going to take a few more. You'll get a sense of what we're all about. And stay with Rymer. Don't miss a second of MadMoney. Follow Jim Kramer on X. Have a question? Tweet Kramer #madmentions. Send Jim an email to madmoney@cnbc.com or give us a call at 1800743CNBC. Miss something? Head to madmoney.cnbc.com. What the heck just happened to the stock of GE Aerospace? I mean, here's a stock that's been roaring ever since it was spun off in its old power business. GE Vernova in the spring of 2024, up over 150% in a little more than two years. One of my faves. But a couple of weeks ago, the market's hottest stocks started cooling off. That includes GE Aerospace as so much money went to the data center stocks. Then today, the company reported a quarter that was poorly received. Even though I thought the results look pretty darn good to me, this is a fabulous buy opportunity. I'm going to tell you why. When you look at the numbers, they're excellent. All right. G Aerospace saw total orders up 17% year-over-year. Revenue up 24% coming in much better than expected. And while their operating margin declined a bit, they still posted a 16cent earnings beat off of $186 basis. That's 22% earning growth. Oh, and by the way, as I told Larry Culp, the CEO, I cannot believe that free cash flow. It shot up 43% free cash flow for a company like this just now the company's seeing real strength in commercial engine services business that's the main where orders grew 18% and revenue was up 27% now much of that came from the service side but that's good because the service business is sticky with big margins plus equipment revenue was up 30% better than a sharp stick of the eye gerospace makes money selling you jet engines then they make more money servicing those engines for years and years in the future As for the other side of GE Aerospace's business, defensive proposal technologies, hey, that was really solid, too. Orders up 12%, revenue up 16%. I remember when that business wasn't so great. This part of the business is more dependent, of course, on government spending, the free market. But I saw nothing worrisome about the defense side at all. And that's not always been the case. Best of all, G Aerospace also raised its fullear forecast across the board. It now expects revenue growth in the high teens, up from double digits in the previous forecast. and they raised their earnings guidance by 50 at the midpoint, taking it to $7.65 to $7.85 range. At the midpoint, they're talking about 22% earnings growth. >> Very good forecast. And when GE Aerospace last reported back in April, the company similarly smashed expectations, but it had also declined to raise its fullear outlook because the environment felt too uncertain with that price of oil surging in response to the war with Iran. Now though they gave us a straight beaten raise even though we know things are a little uh well well you exactly know what Iran what's happening Iran or maybe but clearly investors were looking for more because the stock just got paxed sell it's down 4% today the reason well the one I saw cited the most came down to worries about a slowdown in order growth for context last year G aerospace put up 32% order growth and the first quarter of this year orders were up a whopping 87% So yes, when orders merely grew at a 17% clip of the second quarter, that's a deceleration. Technically, the sales and earnings growth are decelerating too. As I said though at the top of the show, this is a silly thing. It's not right. It's you've got the wrong way to approach it. G Aerospace is just a fantastic company and a great moment. Let's start with the idea that the orders are slowly. Okay, with the quarter, G Aerospace also disclosed that its backlog had grown to more than $210 billion. To put that in perspective, the company is supposed to do roughly 50 billion in revenue this year. So that backlog represents about four years worth of business. Orders in aerospace are famously lumpy. So I'm not worried, at least not too worried about quarterto quarter fluctuations here. What matters is they have many years worth of orders already in the bag. As for the company's gradually slowing sales and earnings growth, that's just the law of large numbers. It doesn't mean that there's anything wrong with a business. Plus, G Aerospace is famously conservative with its guidance, which is why they didn't raise their fullear forecast last quarter. So don't be surprised if revenue growth this year ends up coming in above the new high teens target. When I was going over with Cole B said, "Wow, I don't know how much things going to be up." But you know what? People take everything as negative these days. It's wrong to looking beyond those specific worries that punish the stock today. I am still bullish on the story because well, I actually read the conference call today. Like most of the sellers, I say that because if they had read the call, they would have heard about a business that's firing on all cylinders. Management cited strong demand for all parts of his business. The worst part of his demand, if you want to call it that, was aftermarket demand where management described it as quote resilient despite a dynamic environment. Basically, the airlines weren't flying as much in the first half of the year. We know that, right? So, they don't need as many replacement parts and services. But management said they quote expect a return to modest departures growth in the second half. End quote. That sounds good enough to me. Meanwhile, demand for new engines remains excellent, particularly for the company's latest generation Leap engines. These are the primary engines for some of the world's most popular narrow body jets like the Boeing 737 Max, the Airbus A320 Neo because they offer improved fuel efficiency, which we know we need because jet fuel is really high right now, longer service lives and a lower total cost of ownership. Finally, management said, quote, "Within defense, we continue to support robust demand for our services and products both domestically and with allied partners." End quote. The last part of the positive story. For years, one of G's aerospace biggest problems was that it simply couldn't make new products or get through its backlog of services fast enough. Largely thanks to bottlenecks within the company's own supply chain. I don't know if you remember, you watched our show up at Harvard Business School, Larry Culp described that was the old GE Aerospace. About two years ago though, after the old GE breakup was finalized, the newly independent GE airspace began enacting a new operating model that's dubbed quote flight deck all caps, which was all about continuous improvement and streamlining operations. This new model has gradually improved the company's manufacturing cadence. And on today's call, management touted much more significant improvements for the program. For example, management noted the total engine deliveries grew 31% in the first half of the year and uh commercial services revenue was up 32%. In some specific cases, the flight deck benefits are even more impressive. CEO Colt noted one facility in Lynn, Massachusetts, where G Aerospace makes its F-110 engine that's primary engine US and Allied fighter jets. Demand is increasing for the F-110 and the company used flight deck to reduce its overall production lead time for a critical component by 60%. The result, deliveries of the F-110 were up over 50% yearover-year. I I don't know many businesses that can pull this off. So, here's the bottom line. After today's 4% decline, G Aerospace is now down roughly 10% from its peak two weeks ago. And I think that makes for a tremendous buying opportunity. It's very rarely down that much from its high. Company report a terrific beat and race quarter. Yet, you're not just getting that quarter for free. You're now getting it for a sizable discount. Do you already own it? Well, I you got to hold it. And if you don't own it and you want a non- tech company with real growth, this is your chance to start a position. Bad Money is back after the break. >> Coming up, the trucking stocks were on a roll heading into last night's earnings, but did JB Hunt managed to deliver on that hype? Kramer is going under the hood to find out next. For years, we were stuck in a seemingly endless freight recession and the trucking stocks were dead money. No one ever talked about them. But over the past year or so, the groups caught fire again because suddenly business is booming. Take JB Hunt, one of the top trucking players with a stock that's up nearly 54% year to date, 97% over the past 12 months, including a monster 8% gain today in response to a terrific quarter. And to think it doesn't even sell a disc drive. When JP Hunt reported last night, the numbers were phenomenal. They reported big revenue be 19% growth. Earnings came in about $1.91 per share. Wall Street was only looking for a buck 74. That's 45% growth year-over-year for a trucker. Operating expenses consumed a smaller percentage of revenue with the operating ratio key number improving to 92.6% from 93.3% a year ago. Hence the surge in profitability. The two major subsections of the business intermodal and dedicated contract services both beat revenue expectations handily. Specifically, JB Hunt moved more than 578,000 intermodal loads this quarter. trucks on trains. Uh when analysts were expecting 537,000 loads, setting a quarterly record, volumes were up double digits for the first time in over a decade. And this is something that improved over the course of the quarters. June was much stronger than April and May. That's called the cadence. And the cadence was fabulous. When I covered JB Hunt two quarters ago, I told you they reported terrific numbers, but it seemed more about good management than a broader recovery in the freight market. This time though, CEO Shelley Simpson made it very clear that freight's booming. On the conference call, she explained that the supply of trucks has shrunk, something you'd expect after four-year freight recession, while the demand for those trucks has been gradually improving. Six months ago, she said the quote, "Freight market feels fragile." End quote. She's not hitting us with those caveats anymore. Hardly. Granted, JB Hunt isn't saying the freight demand has exploded yet. It's improved modestly. The real positive is that there just aren't enough trucks on the road these days, giving companies like this one a lot more pricing power. Here's how Simpson put in the conference quote, very eloquent. Quote, "We didn't spend the last four years waiting for the cycle to turn. We spent the last four years preparing for it." End quote. I like that's a great line. J Let me use that. JB Hunt spent the freight recession cutting costs, improving services, investing in in technology, and taking market share. Now that demand is coming back, and these investments are finally starting to pay off, it's like a coiled spring. In a normal freight cycle, rates rise, carriers make more money, and then new trucks and drivers quickly flood the market. That new supply eventually kills the cycle. This time though, h the barriers to putting capacity back into the system may be higher. Insurance is much more expensive. Equipment is more expensive. Driver recruitment is harder because who wants to learn how to drive a truck when everyone's saying the autonomous driving is the future? Regulators are more focused on fraud, safety, and who's behind the wheel. that could make this freight upcycle much more durable, much more lasting than the last one. At the Walls Fargo conference last month, JB Hunt said customers routing guides are beginning to fall apart. Now, this was quizzical to me. See, historically, a shipper might reopen bidding on a couple of lanes or a few hundred loads. Now, management seeing what used to be called many bids turn into rebids of entire networks, sometimes involving tens of thousands of loads. That means truckers are rejecting more freight, customers are scrambling for capacity, and this industry suddenly has something it hasn't had in ages, pricing power. I can't recall a better time to be in this business in this environment. Jamie Hunts in a terrific position. By the way, now let me be clear. I also like FedEx Freight. Now, that is a new company recently spun off from FedEx. CBC Investing Club members heard about that story in today's conference call and it's a terrific one. Of course, JB Hunt's quarter wasn't perfect. Their truckload business posted weaker than expected operating income. The independent contractor market remains difficult, forcing JB Hunt to rely more heavily on third-party capacity at current spot rates. Management said pricing implemented just a few months ago is already insufficient for today's cost environment to say. Basically, the trucking market's in great shape, but that also means this company needs to pay more when they outsource independent truckers. Meanwhile, their final mile business saw an actual decline and that's sales down 6%. Operating income telling 30%. Final mile is the part of the trucking food chain where they deliver stuff to your door. But a lot of the weakness here is simply because JB Hunt deliberately walked away from lower quality business. And besides this small piece of the pie. All told though, this was a terrific quarter which is why the stock justifiably soared. But after this move, okay, JB Hunt's starting to look a little expensive here. Trading at 38 times earnings. I thought it was expensive at 27 times ear earlier this year and while I bet the numbers will continue to improve 38 times earnings makes it a little harder to justify the numbers go up it won't be though seems told a terrific story in the conference call but a lot of what she said will happen already I don't know let's say it's been it's in the stock but this was still the quarter the bulls were waiting for the beginning of the cycle it's good news for more than just JB Hunt it gives us real reasons to feel much better about the entire freight market the turn may be driven more by a shrinking supply than exploding demand. A turn is a turn. JB Hunt is a market leader. It has scale, technology, multiple transportation modes, excess interotal capacity, and an investment grade balance sheet. It can gain share while smaller competitors simply try to survive. And those guys have been waiting for the moment to come roaring back and the little guys won't be in. Here's the bottom line. 6 months ago, JB Hunt told us the freight market was fragile and that it was not holding its breath for recovery. Now though, so much trucking capacity has left the system just as demand is finally starting to bounce back. That's how JB Hunt was able to report a much better than expected quarter. It is why I'm feeling more bullish on the entire group. That said, I don't know, don't want to necessarily chase the stock at these levels. You're already paying for continued recovery. But this story is fantastic. JB Hunt spent the downturn cutting costs, improving service, improving us, reducing debt, funding capacity, and taking share. If the freight cycle is genuinely turning and I think it is, these are the guys who should benefit first and benefit the most with the possible exception of the charable holding char holding of FedEx freight because there is so much improvement ahead for them and with self-help. In other words, what am I doing here? I'm trying to tell you about other companies other than disc drives, other than companies that make things for the data center. There's a whole world out there that you need to know. unlevered stocks with with people who own the stocks and hold them long term and aren't just trying to make a quick buck. And that's what JB Hunt is. Let's take a call from Kevin in California, please. Kevin, >> hey, booya, Jim. I'm proud to be a >> fantastic and I'm glad you are. How can I help? >> Hey, I think I missed the train at the depot, but since it's at an all-time high, do you re recommend buying Union Pacific Railroad stock? >> I did. I did some work on Union Pacific today and I have to tell you it's got great management. The idea that it's at alltime high doesn't worry me. This is not a company that makes semiconductors. It's a company that's dominant in a in an igopoly. You want to own the stock. Let's go to Sam in Texas. Sam, >> booyah. Jim, my brother Jason and I are longtime listeners, biggest fans of your book, How to Make Money in Every Market and Any Market. >> Thank you very much. Thank you. My question is about a stock that makes up about 8% of my portfolio. My cost basis is 88 bucks and it reports on the 23rd. Should I buy, hold, or trim into something else? My stock is RTX. >> All right. This Chris Calio who runs it the CEO. He's unharled. It's terrific. You know, you've got defense, but you have commercial. I like the mix. I think the company's doing terrifically. Greg Hayes left it in great shape. You want a more more Look, RTX down here. No, it was it was in one in the 170s recently. I would wait till it gets back to the 170s, but that's a very strong story. Now, if the freight cycle really is turning around, I think JB Hunt could be the one, let's say, one along with FedEx Freight. It's really going to benefit. I like them both much more money. We had our investing club meeting today as I had referenced, but I'm not done doing out my market wisdom. You see, I got a few more questions that we didn't get to from the club. Jeff Marks and I like to get to everybody. I always say, by the way, that panic isn't a strategy. So why are the chip investors not listening? I'm taking another look at the bleeer cohort and telling you what I think is really going on. You don't want to miss that in order to call us rapid fire tonight, the lightning round. So stay with great. Earlier today, we had our investing club monthly meeting where Jeff and I get together to walk club members through our decision-making process for the portfolio. Oh, I tell some stories. We discuss our current holdings. Then we take questions from club members. But since we never have time to get to all those, I'm giving you an inside look right now at what happens at the monthly meetings. Uh while also dling out, I hope some much needed advice about the market. I think if you join the club, you will get insights on how to manage your portfolio. You'll get some laughs, too. The stories tend to be some of the best I can jin up. Hey, by the way, if you want to be part of the monthly meeting, which I sure do want you to be, join the club. Just scan this QR code behind me or go to cmc.com/invested club. I saved my I saved some pretty good stuff for the club. Let's put it that way. Now, uh to start us off, we've got Daniel who asks, "I bought Oracle from my Roth IRA two years ago at $140. Should I leave it alone or sell it and buy something else? I don't care where you bought a stock. I care where it's going to. And I think that stock is going down. it doesn't fit in for what I would consider to be an IRA. I think it's too risky. I think you should sell it. Then we have Dennis who says, "With the November midterm elections closed, is it better to put new money to work now as opportunities arise or wait for potential post-election pullback in the market?" We buy individual companies that have stocks. If we think that the company's stock is low, we buy it. If we get another opportunity to buy it even lower from an election, we buy more. That's what we do. We are stock pickers. We are stock owners. We are not renters. Next up, we have John who asked, "The sector has taken a significant hit, but I think Dagio has historically been the best in class." Is there a point at which you would buy this beaten down stock as a long-term gain? I know this liquor business cold uh for some other things that are involved with my with my life. And I've got to tell you, I would not touch any liquor company right now. There are a lot of ones, the gins, the vodkas, the browns, they're all doing terribly. You don't need to try to call a bottom. Next up, we have Wade from Texas who says, "Jim gets a lot of questions about speculative stocks and made money, and he's always clear about allocating appropriately. The trust doesn't really have any spec positions, and I'm curious if Jim would ever consider adding one. Maybe the club doesn't need it because it's doing well, but curious your take." Well, it isn't. It's a terrible trust, so I always think that those shouldn't be involved. I do like speculative stocks. I hope one day to be able to talk and have some interesting products that are about speculation but it is not a charitable trust. Then we have big Mike from New York. Jim, with the first half of 2026 now in the rearview mirror, what sectors do you feel offer the best investing opportunities for the remainder of 2026? I like the banks. I like the pharmaceuticals. I like uh I I tell you I've got I I know it sounds crazy, but I love travel and aerospace. And then I will like tech when the big unwind is over, particularly some of the less speculative semiconductors that I think are really great and you're familiar with them if you watch any of the shows or uh stuff that we do with the club. Also, we have Joe from North Carolina who asked, "What general method would you recommend to reduce the number of holdings due to portfolio getting too large? I'm at 45 holdings and prefer to be at the 25 to 30 range. All of them are in good shape or strategic. It's going to it's getting tough to do the necessary homework. I totally agree. I talked at the end of the club today that I have 34. I want to reduce it to 30. Rank your holdings. A one means you got to own it and buy more if it comes down. A two means you're okay with it, but you're a weak holder. A three means you get rid of it today. You cannot possibly have all ones. There's nobody that has all ones. Do that and sell the threes. Next, we have Eric from California who says, "I retired a year ago and have a large position in company stock acquired through RSUs, employee stock purchases. It's now about 10% of my total portfolio. How would you reduce the overall waiting in my portfolio since I don't think it will grow as fast as other options? Okay. I you you may find this to be uh a little counterintuitive, but 10% is actually not that much. I think you're in good shape. If you don't like the stock, by all means, sell it. There's no reason to hold on to any stock that you don't like. I've got plenty of stocks in charitable trust. There's got to be one of those 30 and change that you do like more than what you got the RSUs in. Last but not least, we have Bob who asked, "If you were to get a new puppy and wanted to name it after a public company, what would you name it?" Um, well, I'd say by Tuesday, I might name it Intel. Thanks again to all our club members and Mad Money is back after the break. Coming up, he's the fastest mind on Wall Street, so we're putting him to the test with your help. Bring on the lightning round. Next, it is time. It's time for the white paper. That's right. I take calls rapid fire. You need the stock. I tell you to buy some sell the stock that time. I stay prepared to grab some of the five. We finally sell and then the lightning round is over. Are you ready Steve time start with Bill in Swed Alabama. Bill. >> Hey Jim, what's going on with microchip technology? >> Well, it's a semiconductor and all the semiconductor stocks are going down. May I suggest that you wait a few more days till we get rid of all the margin players and you're going to find a bottom? I don't see it yet. Let's go to Sunshine in Florida. Hey, Sunshine. >> Hey, Jim. Booyah. >> Booyah. Sunshine, what's happening? >> Hey, uh, Verd took a bigger hit today than my air conditioner does in a Florida summer. Should I keep cool and buy the dip? >> No, you have to wait. Verd of his inspective hands right now. The speculative hands are being margined out. They're going to get rid of them and you'll get a better price if you want to buy. We're not far from it, but we're going to get we're going to get a better price. Let's go to Romeo in New Jersey. Romeo, >> hey Jim, I'm calling in about a speculative stock this time. It's a AOI. >> Oh man, not now. I mean, we got to wait till this the speculative wave is passed. I mean, I'm not against speculation. People know that it's you can have up to 10% of your portfolio in it, but I want to time it when it's right. Right now, the speculative players are being margined out. We don't be part of their panic. Let's go to Lee in New York. Lee, >> hey. How are you, Jim? >> I'm good, Lee. How you doing? >> Excellent. Thank you very much. So, I I'm looking to try to find um a support company to build these data centers. >> And I was looking at electric or at least components electrically. And I look at a company like GE Renova, which would be great, but they have a three-year backlog. >> But the company that I was asking about thinking about was WCC or should I look at a different component to >> Yeah. Why why don't you you know quanta has come down a lot. It was a 788 it's 630. Why don't you buy quant? I think that's a better company than West. Let's go to Cameron in Colorado. Cameron. >> Booyah. Jimbo. This is Cameron. Booyah. >> Well, first time long time of the show. >> Oh, thank you. >> Right. So, Jim, here's what I got. I'm heavy in tech and all the AI and semiconductor craze right now, but I kind of want to diversify out of it. I think this time growth outlook. I'm talking about the bottler for famous drinks like Sprite, Dr. Pepper, and Coca-Cola. It's thicker coke. >> Well, it's real good. But, you know, take a look at the actual co. This is the stock, by the way, in April of of 2000 when we had the big reversal out of the dotcoms into stocks. They went for Coca-Cola and they went for Bristol Meyers. I would go for Coke. I think that's a better stock. Let's go to Matt in Ohio. Matt, >> hey Jim, thanks for taking my call. The stock I'm calling about feels like it's been trudging through the mud uphill. Uh I don't know whether to stay with it, whether to move on to something else. Stocking calling about is you know I read my first positive note about Clorox in a great deal of time today. That was a price target increase that made me say 5% yield. You know what? We want to buy it. By the way, price target increase in in uh Colgate and I think really incredible. I think this Kimberly tie-up with Ken Ken view is going to produce some terrific results. Let's go to Dolly in New Jersey. Dolly, >> hey Doll. Hey Jim, how are you? Um, I love your show. Just want to tell you that first. >> Thank you. >> Uh, I wanted to ask you what you thought of Nebus at this level with >> I think Nebius is at the nexus of the craziness right now. There are a lot of people now. It's not a crazy company. It's very good company, but there are a lot of uh there's some hedge funds that own it that I think are in a lot of trouble. There are a lot of individuals who bought it with borrowed money and the little options holders. The volume here is incredible. This stock is not done going down. There'll be another time to buy it, but that time is not now. Let's go to Joanne in California. Joanne, >> hi Jim, the magic guru. I'm calling from La Mesa, California. >> Okay. >> With my fellow better investing women's stock buddy, Judy. Our assignment, we were supposed to come up with something by Saturday morning's meeting and we're looking for a medium to small company. got too many large companies and the one that's cross on our desk is Excel Service Holdings, EXL LS. Can you give me your thoughts on that? >> I I don't know that company. I've got to do some work on that. Uh I I just it's a it sound, you know, I know I know the business is outsourcer, but I got to find out more about it. We're going to have to come back on that one. I'm sorry. We can do some homework. And that, ladies and gentlemen, is the conclusion of the LIGHTNING ROUND. THE LIGHTNING ROUND IS sponsored by Charles Schwab. Coming up, Kramer's explaining what can cause parabolic stocks to crater and how you can avoid the fall. Next. >> Oh yeah. Jim Kramer, >> I'm a firsttime caller, a happy club member, and want to thank you for being the people's champion of investing. >> Thank you for helping me become a millionaire. panic is not a strategy. That's exactly what I see happening in the stocks with so many of the tech companies that the inards in the data center like memory and storage chips, Micron, Seagate, Sandisk or the plumbing, like Corning, the fiberlink between chips. These are all very good companies that have more demand than they can handle. That's the wrap on them. When people hear that, they know that the numbers are headed higher when these companies report. But when you when you get these parabolic rallies that they've had based on overconfidence and leverage on the part of overexuberant traders, well, if you buy a stock thinking that it can fly all the way to the sun, you're going to get burned no matter how good the fundamentals are. Especially if you use margin, something I abhore and will be the bane of your existence if you're not careful. >> The house of pain. Most of us would would we we like to believe that when it comes to a stock, the fundamentals of the business are all that matters. As I mentioned during our investing club talk today, that's often the case, but not always. At some point, when a stock goes up and up and up, what we know will be a better than expected quarter. Well, you know what? You get a divorce in the fundamentals. When you get the divorce, you don't have a leg to stand on. When you watch corny go from $77 to $271 in a short period of time, you know that you have to sell some. Maybe you have to cut the position in half because the fundamentals are no longer in the driver's seat. The crazies are. It's the animal spirits of the market that are in control. Led by individuals and hedge funds using borrowed money and the holders of call options try to scalp a couple quick bucks. In some cases, leverage ETFs are adding fuel to the fire. These are emotional, often ill-advised buyers. They rarely take profits. They let it run. at the at at some point the professionals look at their holdings and know what we learned early on in our careers, you got to take something off the table. But if not, if you just let the monsters run, you could lose everything. When you get the professionals selling huge chunks of stock as we have right now, the margined amateurs and the call buyers and inexperienced hedge fund managers cannot possibly prop up the share prices. So what happens? The calls quickly cease to be worth anything. The margin buyers don't have enough money to fend off the margin clerks. So, they're forced to sell at bad prices. If they don't sell themselves, the stocks will be sold for them by the brokerage houses trying to prevent losses for themselves. It's a vicious cycle down people for the stocks of even some of the best companies like Corning. Parabolic moves unwind a lot faster than they go up. You know what that does? It breeds panic. At this very moment, it doesn't matter one bit how these companies are actually doing. Do you know that? What matters is how the margin clerks are doing. That's why, by the way, I like to wait until 2 PM to see if there's a real bottom. That's when the margin clerks are done selling for the day. We find out whether there's any sort of like dimmunition of selling. There wasn't. Right now, we're in the grips of the margin call moment for all these component stocks and even some of the larger companies, both semiconductors and server makers and even Nvidia. The parabolic moves get erased sometimes going back to where they started. Sometimes even lower if the fundamentals are flagging. I don't think the weak hands are done selling. The good news here is that the fundamentals haven't really changed. The bad news is that the margin clerk stopped for no man and we don't know when they'll be done with their work. Might be tomorrow, maybe it's next week. Now we've got hedge funds shooting against a couple of the young hedge fund managers that they think aren't any good. They're pressing down the likes of Sanders and Nebius and Bloom Energy to try to get a hedge fund out of the business. Great companies, perilous stocks, bad owners. I wish I could tell you when the panickers are done, but I do know this. The faster we get rid of those who borrow the money to buy an SKH Highex or Micron, the healthier this market will be. The unwind is good news. If you're borrowing money to buy stocks, I think you'll still have a chance to get out with your shirt on. But if you persist, you might be naked by Monday. And then you won't have enough money left that it's worth it to watch our show. I like to say there's always a market somewhere. I promise I'd find it just for you right here on May Have Money. I'm Jim Kramer. See you next time. >> All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its 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 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 or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full MadMoney disclaimer, please visit cnbc.com/madmoney disclaimer.