Mad Money w/ Jim Cramer 12/20/24
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We used to call days like today exquisite moments. Those are moments where the Bears overreach.

And they get ahead of themselves because they don't know when to quit. We had one this very morning. I want to teach you how to spot them so you can pounce the next time this happens. These moments can yield big gains as the market opens incredibly weak and then kaboom! The average is reversed to finish up used. Dow gaining 498 points today. S&P vaulting 1.09% and the Nasdaq jumping 1.03%. This exquisite moment, that's now come and gone. But there will be others. You need to know when the next one could be coming.

First, these kinds of moments always start with a market that's deeply oversold.

Just bought that. I use the S&P Oscillator by a company called Market Edge. This is a unique tool that shows when there's too much buying or selling pressure. The Oscillator starts at zero, which is a neutral zone. Neither too hot nor too cold. As it goes higher, we begin to get nervous that the market's being overbought. When the Oscillator gets to plus five and say, I want to buy something for the Chappell Trust, I don't. I just walk away. At plus five, you are overreaching, and the odds are no longer in your favor. No!

So you probably won't get a good cost basis and you could start a position in the hole. The house of pain. But when the outsider goes negative, it's actually the same story but in reverse.

Once it touches minus five, you need to hold your nose and start buying. Buy, buy, buy, buy, buy, buy, buy, buy, buy. No matter how bad it looks. Because minus five means we're oversold and we're due for a bullish bounce. And when the oscillator goes below minus eight, as it did last night, the only thing you can do is buy hand over fast. Buy, buy, buy, buy, buy, buy, buy. Under no circumstances should you sell with the oscillator below minus eight. Because at that point, the selling ship has sailed. Sailed, sailed, sailed.

The odds are against you if you sell into an extremely oversold market. You might be selling right at the bottom of the

bottom. Now, I asked the good people at Market Edge to run me the data on how you would have done if you buy at minus 8, and the results are extraordinary. If you buy the S&P 500 index after the oscillator hits minus 8, you would have averaged a 2.88 gain within the next 30 days. That's over a 10-year period. We had this in the median of 4.7%. It is even better 60 days out. The average gain was 8.93%, and the median was over 9%. Those are some huge moves.

How about your odds? Look, 30 days after the oscillator hits minus eight, as it was last night, the market was up 70 percent of the time. 60 days after the market was up 80 percent of the time. That's an extraordinarily reliable pattern, people. Nothing in the market is a sure thing, of course. But the frequency of those gains means the odds are heavily in your favor if you buy in an oversold market.

This time we anticipated the oscillator, which gets reported after the close on yesterday's investing club meeting, which was intraday, of course, at noon. And we put a lot of our reserves to work right into the weakness. It's why I keep emphasizing the club, because it's such an excellent compliment to this show. If you were watching the oscillator, you knew we were due for a day like this one.

Second time with the exquisite moment when you have a big decline on day one, followed by an up opening and then another big decline on day two. Totally disheartening, right? I mean, just makes you want to cry. And then on day three, the market also opens down, down big. And that's when you have to have your shopping list ready.

This was day three, and that's what today's market was all about. Now, you can use this method of buying to your own advantage, even with individual stocks. So let me give a textbook example of a stock you'll know. Let's talk about NVIDIA. NVIDIA's stock has been under huge pressure for weeks. It got hammered down to 128 and change on Wednesday. It opened strongly on Thursday at 131.

But then it kept going even higher. It reached about 134. It looked terrific. There was no positive research. It just looked terrific. In fact, we kept hearing the company was losing market share to Broadcom and Marvell Tech, even though they're partners and they don't even directly compete.

But you know I like NVIDIA, but I had to tell people to stay away from that spike yesterday. Never buy a spike, no matter what. Next thing you know, the stock is down in tax. It gives them all those gains and going down hard. Finish the session back down at 130 and change. A lot of disheartening people. Routine reversal. Oh, but today, today with a down opening, we got a very different story. When NVIDIA opened deep in the red, that was your sign that it was time to buy, buy, buy, buy, buy, buy, buy, buy.

Because that's the kind of action we're looking for. Sure enough, it ran like a rabbit today right into the clothes. Exquisite.

Next up, the sensible reason why we had a decline at the opening was the lack of a budget agreement in Congress. Wall Street never likes it when we seem to be headed toward a government shutdown. But people forget that no government shutdown has ever caused the stock market to stay down. Instead, they always produce viable moments. As I said this morning on Squawk on the Street, sure, there's always a chance that this one could be different. Perhaps because, say, Elon Musk was involved. He isn't elected, so he's not really accountable to anyone.

Again, though, when every previous government shutdown has produced a buying opportunity, you don't want to go against it. I think it's entirely possible that because the event is so telegraphed, all the selling occurs ahead of time. By the time the feds start running out of money, that's already baked into the market and you have to buy. Next up, you look at the approximate cost of the sell. In this case, with the feds hawkish rate cut on Wednesday.

That's what we've been calling it, at least. You need to recognize that the Fed, unlike most institutions, can have subtle do-overs. You just need to send out some Fed coverage and put a better spin on things. Make us understand there's no chaos out there. Sure enough, we got them in spades today like clockwork. They ameliorated the coarse and discordant nature of J-PAL's press conference. Then you need to see the bears overreach in some frighteningly moronic way.

that demonstrates their overconfidence. We got into some crazy early morning short selling between 4 and 5 a.m. this morning of key stock names, the ones I follow, Palantir, Apple, Nvidia. They were going down on no news. They were going down hard. They were being shorted by people who believe that they were shooting fish in a barrel. I love when the bears overreach like that. They put their necks right into the news. Perfect!

Finally, you need some data point about that. Say that everybody cares about being asked when we're overbought. You get a major data point. It means, well, let's say it needs to be pictured perfect or the market will roll over when we're oversold. It's the opposite. A bad number doesn't do anything. A good number causes a short squeeze.

And that's what happened this morning when the personal consumption expenditure price index, the Fed's favorite gauge of inflation, actually showed a slowdown in inflation. Just 2.4% when 2.5% was expected. That kind of verified what J-PAL did. On that day, that was an easy call to buy the down opening. And the bottom line?

Well, that was everything you need. Just enough overconfidence by the Bears. Suddenly, the count of the bad news has started to decline. A positive data point that goes against the downturn. And most importantly, the oscillator that measures extreme negativity. It was indeed an exquisite moment this morning. They don't come along all that often. But when they do, you have no choice but to pounce. Let's start with Ed in Texas. Ed. Gun barrel city, Texas, Jim.

Perfect. What's going on? All the way. About two or three years ago, before it went all the way down, I bought it at the very top, the afternoon at the very top. And I've been riding it all the way down. And I'm wondering if you've noticed in the last 10 days or two weeks, it's starting to move in against a down market. And I'm hoping you'll tell me it might be one of the big surprises for next year. I think if Kelly Ortberg, the CEO, is able to execute

and he seems so far to be pretty hands-on, then you're going to be right. Why have we not bought it for the Chapel Trust? I think it's a very tough stock, but I do think it's bottomed, and I do think that he might do a good job. But I'll tell you how I'll know. If Kelly Orberg comes on mad money, I will know. Let's go to Bob in New York. Bob!

Hi, Jim. How are you? I am good, Bob. How are you? I'm glad you're watching. My question is, I'm a longtime holder of Cisco Systems. What's your take on it? I think it's a buy. I think that Chuck Robbins has got the ship righted. I think that there's lots of orders. I think that this is an excellent moment to own the stock of Cisco Systems. How about Brandon in California? Brandon.

Bo-bo-bo-bo-bo-bo-booyah, Jim! How you doing? I'm doing well. How about you? I'm good. Thank you. Merry Christmas. Happy New Year. Same to you. So a question for you. C-A-V-A. What are we doing? C-A-V-A.

Kava is a winner. I think the way I would approach Kava is if you want to get back into it, it's coming back down. It's up 176 percent for the year. I would wait until January. I'll let it come in a little, buy some stock and let it come in again. That's how I would approach it, because it is extremely volatile stock. Let's go to Bob in New York. Bob.

Hey, Jim, how are you doing today? I'm doing well. How are you, Bob? What's going on? Jim, over the last couple of weeks, my family, my friends, we've all been doing our Christmas shopping, virtually all of it at Kohl's. The stores are crowded, the parking lots are jammed, and quite frankly, if Kohl's starts closing stores, it would be extremely disappointing for the community. What does Kohl's have to do to stay viable?

All right. This is a very good question. They've got a good board, but I just saw the retirement of a terrific executive. I think that Kohl's is viability is in question in itself. And that's because it's brick and mortar. And I don't know exactly why. What is the raison d'etre of Kohl's?

Tough verdict. Got to call it like the... I just... I got to call it like it is? Explicit moments like this don't happen very often, but when you get as much build-up negativity like we had this very morning, you have no choice but to jump in and buy.

I made money tonight. Shares of Agco dipped on yesterday's annual estate. But what could prop the stock to plow ahead? I'm getting a lay of the land with the CEO. And what should you make of CBS Health at these incredibly low levels? I'm digging into the decline and giving you my take. And after another Investing Club Monthly Meeting, I want to take time to answer even more questions from our amazing members. So stay with Kramer.

Don't miss a second of Mad Money. Follow at Jim Kramer on X. Have a question? Tweet Kramer. Hashtag Mad Mentions. Send Jim an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com.

When you check out at the pharmacy, you see the journey from idea to medicine, thanks to our intellectual property system, or IP for short. IP safeguards inventions, like a new way to prevent seizures or lower cholesterol. And IP supports competition from other brands, then lower-cost generics, which are 90% of prescriptions filled in the U.S. Innovation, competition, lower costs, thanks to IP.

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Before investing, consider the funds, investment objectives, risks, charges, and expenses. Visit ssga.com for perspectives containing this and other information. Read it carefully. DIA is subject to risks similar to those of stocks. All ATS are subject to risk, including possible loss of principal. Alps Distributors, Inc. Distributor. What's happening in the agricultural space? Last month, we got a tough quarter from ADCO. It's the maker of big-ticket farm equipment. Yesterday, ADCO hosted an analyst meeting. While they set some encouraging long-term financial targets for 2029, their forecast for 2025 came up a tad short. But

crop prices aren't in good shape. And when farmers make less money, they buy less machinery. As a result, Agco stock dropped more than 3% yesterday. Even though it erased most of those losses today, it's still down over 20% for the year. So could this be a good entry point? Or do we need to worry about more pain to come? Let's check in with Eric Ansotti. He's the chairman, president, and CEO of Agco. You get a better read of the situation. Mr. Ansotti, welcome back to Mad Money. Hey.

Happy holidays, Jim. Oh, same to you, Eric. Now, I've got to tell you that there's been times when the farmer did badly and Agco did worse. I think you've changed that. I think you can now kind of outrun the cycle because of changes that you've made. And I want you to tell people how this is no longer you're not hostage.

Right. This is a fundamentally different company. In the last cycle, at the trough, we had 4% margins. At the peak, 8%. We were like a 6% company. When I first came to Wall Street taking the job, we said, we're going to be 10% at the mid-cycle. We hit that. Then we raised the bar to 12% a couple years ago. We're on track to hit that. And yesterday, we announced we're going to be more like 14% to 15% over the next few years. So

excited about the structural change we've been building into the company. Well, I'm glad you had the analyst day because I think people do remember the old one. And that's why the stock is down so much, because your technology that you're offering, the need to be able to get new equipment if you want to be able to be more productive, is so self-evident that it's not the agco that I, you know, I always liked the agco ball. I don't want to disparage. But this is a very different agco.

Absolutely. You know, we closed on the biggest ag tech deal in the history of our industry this April. It was a big tech deal to accelerate our journey on tech. We're controlling what we can control. We're gaining market share, investing in technology, improving our margins. The cycle of the whole industry is down right now. Probably will be for a little bit more, maybe a couple more quarters, but 25 is going to be the bottom.

And when this market starts taking off, which it will, this company is ready to run. I'm also glad to hear, I've always heard gem, gem, gem when associated with Fent, but I never saw the money put behind it. That's changed. Yes. Fent is one of our big growth drivers. We've moved it out of a European tractor business to a full line equipment business that we're taking global, especially in North and South America. And the customers that get to appreciate the Fent experience love it. They won't go back.

Do we even tell people what they do? They may not be as familiar with it. Yeah, so Fent is our premium brand that sits at the very top of the market. It's the best of the best tractor, combine, planter, sprayer. And essentially, it's best in technology, best in quality, and then our dealers are trained to have best in support. So it's just the best of the best for the most demanding farmers.

And this Fent experience is one that once customers taste it, they really love it and they won't go back. So we're steadily growing in both North and South America. At the same time, the farmers like let's take South America. I look at some of the countries that they'll have a terrible weather position. And then that does really severely impact your sales.

Weather is something the farmers can't control, but they kind of know that. They have years where things go their way and sometimes they don't. So they know how to manage that. They kind of keep an equity position in their business. And that happens every year somewhere in the world. So farmers understand that.

Well, here's what I'm going for. Yesterday, I had Sean Connolly. He's the president and CEO of ConAgra Brands. Yeah, I saw that. And he was saying that inflation is intractable because of eggs and animal protein. Now, I hear that and I think, why can't they produce more and take advantage of these higher prices? It just doesn't work like that, though.

Well, poultry is going to respond faster. And that's what he had said as well. Beef takes a little longer. You know, beef was under such pressure. And so the herd was reduced quite a bit. But now it's being built back. It just takes two or three years for those those that cattle to mature to a point where it's it's beef ready. Now, what are the what is precision ag doing for someone who wants to take advantage of the need to have more animal feed? What can they do that they couldn't do before?

Well, essentially, our precision ag is to help the farmer grow more yield, have more bushels per acre, and manage their inputs more effectively. A couple of the exciting ones, we're now selling an autonomous kit. You put this kit onto a tractor, and it allows you to pull the operator right out of the seat. No person in the tractor.

So as the combine, which is harvesting the crop, is harvesting, as it fills up and gets full, it summons the tractor. The tractor drives alongside the combine, no operator in it, locks in with the combine, the combine unloads the grain. In fact, I think you're seeing it right here. Well, this is forage, but the one before that was grain. It unloads the grain when the combine's empty, it hits release, and the tractor drives off. No operator in it at all. So those are all things that help with labor and help with keeping that combine running at full optimization.

We have an AI operation or AI system on our sprayers where the cameras can tell the difference between a weed the size of a dime

versus a corn plant or soybean and only spray the weeds instead of having to spray the whole field. Saves a lot on input. So one's helping yield, the other one's helping inputs. Those are all to help make the farmer more productive. How is the average tractor in the world? I mean, there must be a refresh cycle. You can't just keep... I know you can take care of these and the farmers are incredibly resourceful, but at a certain point, don't they just say, listen, I can't get the yield that I would if I just go to ADCO? Well, so this is a really important point. ADCO is the only company in the market

that thinks about retrofit. So a typical tractor lasts 15 or 20 years, same thing for, but that technology gets refreshed much faster than that. So we have a whole tech division, which was accelerated by the tech business that we bought this spring, made a joint venture, and essentially we'll sell a module onto an existing planter or sprayer

and it doesn't matter which brand. So we serve all farmers of all brands. It could be our competitor number one or competitor number two, could be five years old, 10 years old, and we'll upgrade that machine directly for the farmer to make it more, have new capability. Well, look, I've got to tell you, uh,

I just feel for you because the farmers, they've got, you know, the weather has been bad. But you know what does matter, though, is that if they want to get more out of their field, which is a substantive thing, they can go to AGCO. And that's why I think, as you said, when 25 comes around, you have to be in. There have been some runs in AGCO that are staggering.

They're just staggering. And I think these will be a little smoother, which means that it's not going to be as tough for the portfolio manager to buy. I want to thank you, Eric Hanson, Chairman and President and CEO of Agco. Very cogent analyst day. You can find all about it. If you like ag, this is the way to go. May money's back after the break.

Coming up, what's ailing CVS Health? With shares well off their highs, Kramer's sharing his diagnosis on the slew of issues facing the healthcare name and writing up his prescription for profits. Next.

When you check out at the pharmacy, you see the journey from idea to medicine, thanks to our intellectual property system, or IP for short. IP safeguards inventions, like a new way to prevent seizures or lower cholesterol. And IP supports competition from other brands, then lower-cost generics, which are 90% of prescriptions filled in the U.S. Innovation, competition, lower costs, thanks to IP.

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The shockingly smooth taste is rich and aromatic with distinctive hints of toasted oak from the bourbon casks, making it perfect for cocktails. Martell Blue Swift, defy expectations. Enjoy our quality responsibly. Things went from bad to worse for CVS Health this weekend. I don't really, I don't know, I don't see anything turning around.

Now, it's been problem after problem for these guys. First, the drugstore business has been hit hard by rampant theft to the point where they now lock up a lot of their merchandise, making the shopping experience suboptimal, a huge pain in the neck. Hence why they keep losing market share to Amazon, where many of the items CVS carries can be delivered to your house same day.

CVS has tried to turn things around by closing their worst stores, opening health clinics, and doubling down on their non-drugstore businesses like Aetna for Health Insurance Caremark, their pharmacy benefits manager, PBM. They now have more than 900 minute clinics and over 200 Oak Street health clinics.

Strange moves, though, given that Walgreens has been scaling down its clinic business and more important, Walmart decided to get out of the clinic game entirely because they can't find the workers they need. So therefore, they can't get a good return. Let me ask you, if Walmart, the most powerful and wealthy retailer, can't make a go of it, how can CVS get a good return?

Second problem, six years ago, CVS bought Aetna, making them one of the largest managed care providers in this country. But this industry has been struggling for a year and a half as people catch up on procedures that they delayed during the pandemic. So now Aetna has to pay for those procedures. At the same time, Aetna dropped the ball with its Medicare Advantage plans for seniors. They made the plans too cheap, bringing in lots more people. But it's come back to bite them as people use more health care services and the government's starting to get stingier with these reimbursements.

Eventually, this cascading set of problems cost now former CEO Karen Lynch her job. After a heinous quarter in August, the company booted president Brian Cain and Lynch said she personally oversee the insurance business. But she never really got a chance to turn around or the rest of the business. She was fired abruptly in mid-October and replaced by David Joyner, who previously ran the company's Caremark Pharmacy services business. Not surprisingly, CBS also preannounced terrible third quarter results.

So, yeah, this stock's been a disaster all year. But after trading sideways for much of the summer and fall, everything fell apart this month. It feels like investors have just given up entirely with the stock down more than 25% for December.

Now, some of that's because health care stocks have really fallen out of favor since the election, something I've been talking about all week. Some of it's because the whole health insurance space has been doing poorly since the CEO of UnitedHealthcare was murdered on December 4th. Even though the shooter did something horrible, you can't just shoot people because you don't like their business model. It's generated a lot of negative headlines for the industry, and that includes CVS, the parent of Adeno.

Then this week, the entire pharmacy benefits manager and health insurance cohort took it on the chin when President-elect Trump talked about cutting the middleman out of the health care industry to bring down costs. While Trump didn't say exactly who he was talking about there, investors went ahead and assumed he was talking about the PBM and the insurance companies. Between Aetna and Caremark, CVS is in both these businesses, which is why it fell 5.6% on Monday and then 5.5% on Tuesday.

Then on Wednesday night, the Justice Department filed a lawsuit against the company, alleging that, and I'm going to quote here, CBS knowingly dispensed controlled substances in violation of Controlled Substances Act, end quote. That word knowingly is very important when we come to court. Ouch. For background, two years ago, CBS was one of the several pharma-related companies that agreed to a $21 billion settlement with many states and towns.

over the opioid epidemic. CBS agreed to pay up to $4.9 billion over 10 years, which actually sounds like a lot, but considering the present value of money and the multiple year spread, isn't really that much of a hit as it seems. At the time, we figured this put the opioid-related litigation risk to rest. That was it, right? But crucially, that 2022 settlement did not involve the federal government, which is who came after CBS this week, the Justice Department. Now,

Now, as a Harvard Law graduate who never really gets used by law degree, I like to read the complaints when there's these big justice cases against the company I cover. So I took a gander at the 97-page complaint against CVS, and I got to tell you, frightfully damning.

Justice has incredible detailed information about individual patients who died of drug overdoses with specific details about how many painkillers these individuals were getting from CVS. It is hard to imagine how any legitimate pharmacist would give anyone such high doses in such a short period of time. The detail is excruciating and it's unimaginable.

Horrendous. That's the eye-catching part of the complaint, as are some individual examples of CVS filling prescriptions for doctor's offices that were known to be pill mills, meaning drug dealers with a medical license.

Then the Justice Department alleges, again, quoting, CBS prioritized profits over safety in dispensing controlled substances. CBS knew that its pharmacists lacked the time to comply with their professional practice obligations, including their exercise of corresponding responsibility.

CVS also knew that its staffing policies and compensation and performance metrics emphasize speed over safety, end quote. Justice goes on to say, as a result of these policies and practices, CVS caused its pharmacists to knowingly dispense controlled substances pursuant to invalid and dangerous prescriptions. These problems persist. I mean, I got to tell you, it's...

This is not good. Something I think CBS will find very hard to combat if this one ever goes to trial. Stock fell another 3.3% yesterday in response to the lawsuit. And we certainly haven't heard the last of this. Assuming the Trump administration's Justice Department pursues this lawsuit and the evidence is strong enough that I have to believe that they will keep going hard, even though it's a Biden justice suit, then we're probably looking at either another multibillion-dollar settlement for CBS in the future or maybe there is no settlement. Maybe justice is willing to...

willing to go for blood here. The arguments are so powerful. Now, after reading the complaint, and I read it twice because I thought it was so bad. I actually read it last to my wife. I was like, I couldn't believe it. I felt the need to take a fresh look at CBS's balance sheet. And I did not like what I saw. The company has about $59 billion in net debt with another $17 billion in operating lease liabilities, both of which would be fine if CBS was still putting up

good numbers. They did $20 billion in earnings for interest, taxes, appreciation, and amortization in 2023. They had over $10 billion in free cash flow in each of the past five years. So, you know, that's more than enough to cover these.

But this year, CVS seems on track to post a 25% decline in EBITDA. The analysts are looking for just $14.5 billion. Their free cash flow should come in around $6.8 billion. Suddenly, the company has a lot less breathing room, which is really a big reason why the stock's for sale. Now, imagine they have to come up with a few billion dollars more to settle the federal opioid cases. Things could get really ugly real fast, although maybe the feds would stretch it out again to give CVS some breathing room.

Listen, with a 6% yield in the national footprint, I'd love to be more constructive on this one. But the retail stores are challenged, and I don't know if they can turn that around. Their insurance business has been crushed this year. If they offer less generous Medicare Advantage plans for next year, that'll help with profitability, but then they'll lose a ton of market share. And the Kmart PBM business, well, now that seems to be in the crosshairs of the incoming Trump administration. Who knows if Trump falls through? He has had similar dust-ups to this one with other corporations that gradually faded away. But do you really want to stick around to find out if that's what's going to happen here?

And that was all true before this incredible Justice Department opioid lawsuit. Here's the bottom line. CVS Health has a cascading set of problems. And while I'm rooting for them to turn things around, I definitely would not invest in it. Let's go to Joe in New York. Joe. Yes, Mr. Kramer. How are you? Everything OK? Everything is fantastic. Thank you for asking.

Doing a little Christmas shopping now. Okay. I've owned Merck for many years, right? And I just recently added to my position. It's a great widow and orphan stock. I love it. But it

but it keeps going lower, but they got Keytruda, the cancer drug. They, they, I think it's been approved and I'm thinking that maybe I should add more to my position. Should I? Joe, you should, you should. I think this is part of a sector move. Okay. There's nothing wrong with Merck of anything. I think that, that, uh, Rob Johnson, Rob Davis is doing a remarkable job. I find this one, uh, cheaper than J and J, uh, cheaper than Pfizer. Uh,

I think it should be bought. They've got good growth. I think you're really on to something, and I hope you have a good holiday. Let's go to Larry in Illinois. Larry.

Jim, Jim, thanks for the call. I'm taking my call. Yeah, Jim, I wanted to ask you with the introduction of the highly effective GLP-1 weight loss medications that are now becoming more widely prescribed. Folks are getting healthy, losing a significant amount of weight, but they're also losing muscle mass.

And, you know, I can really see a much larger market for protein shakes in the years ahead as more people take advantage of these medications. I wanted to ask your thoughts on Bellring Brands. We actually did a nice profile of Bellring Brands, Larry, and you're absolutely right. It's been a real horse, though, since we did the portfolio.

did the download on it. I'd like to see it come off a little bit because it sells at 34 times earnings. But yes, we think the world of that company would really like that. You've really drilled down on the reasons why we do. All right, everybody, look, CBS Health has its work

cut out to turn things around. And given all the problems it's currently facing, I can't advise you to invest in this turnaround. Now, much more may have money ahead, including a look inside the investing club by answering some of their members' pressing questions. And later, I'm addressing the trading activity in this tape and telling you where I stand on my investing fundamentals. I don't want you to miss that. And all your calls rapid fire in tonight's edition of The Lightning Round. So stay with CRIM.

So yesterday we held our investing club monthly meeting. Once a month, Jeff Marks and I get together to walk club members through our thought process of how we make decisions for the portfolio. We discuss our current holdings and we take questions from our club members. Now, my favorite part of these meetings is taking your questions. And since we didn't have enough time yesterday to go through all of them, I'm going to give you an inside look at what we do for the club tonight.

So the first question is, Mark is from Mark in the U.S., who says, Hi, Jim. I love the club. Thank you so much for educating me. Apple is my biggest holding, consistent with the club, and has been doing great lately. I'm concerned it may now be too large a weighting in my portfolio. How do you determine when to trim a holding to keep it from being too large? Okay, typically, these are cross disciplines. We like to have...

No more than 5% in one particular stock, but we also have a discipline which says own, don't trade Apple. The result is that we're at cross-purposes, and so it's a little bit more of an art than a science. We like Apple enough that we're willing to go and continue, but I want to tell you something. If you are even the least bit concerned, the least bit concerned, then you sell it down. Take it down to 5%. We do not want any investor to be concerned about the size of a stock. That shows you that they can't live with it.

It's got to be changed. Next up, Dan in Colorado asked, Jim, 2024 has been a good year for the market and the portfolio. Knowing hogs get slaughtered, what strategic advice would you give in trimming our portfolios and taking some profits by the end of the year? Thanks for all you do, and thanks for all you and your team do for us. Thank you so much for thanking the team. It means a lot to me. All right, now this is a really difficult problem.

because I go through this with Jeff, and I've said that we were way too greedy, for instance, on Broadcom. We had a really huge game in Broadcom. It spiked gigantically. We made a lot of money in a short period of time. And I said, got to take some more. It doesn't matter how much we love Broadcom. It's got to come off. So if you see some situations and you're up huge,

on where you bought it, you take something off because we do not want to be pigs. That's why we took off some Broadcom. That's why you have to go down your portfolio and see what you're up big and take a little off. Now let's hear from Kim in Arizona. She said, hi, Jim and Jeff. What is a good entry point to add more Eli Lilly? Thanks for all that you and your team do for us members. The answer is right now. Lilly today in the, uh,

The morning market before it opened was up 80 points. By the end of the day, it was barely up. Why was it up? Because Novo Nordisk had a competitive new drug that was not able to meet its standards of what people were looking for. It disappointed. That left Lilly pretty much best of class away from its competitor, Novo Nordisk. This shouldn't have been up 10. It should have been up 30, a minimum of 30, maybe as much as 50. So I've got to tell you, I think, Lilly, this is where you buy it.

Next up, Stephen in Texas wrote, with the incoming administration and potential geopolitical risks that could occur at any point, is it still feasible for oil to approach $100 a barrel or higher in the next 12 to 24 months? If so, what is the best way to put this? Okay, I'm never going to say it's inconceivable because let's say—

President-elect Trump says, that's it, Iran doesn't get to ship anything, you'll have a big spike. Or something happens to Russian production, you'll have a big spike. I don't think it'll happen. We own Cotera, which is 50% natural gas, 50% oil. I have to tell you, even today I wanted to buy more Cotera because natural gas went to $3.50. And Jeff correctly pointed out, it's really just a hedge. We're not in there to make a lot of money. The answer is, if you felt like you'd make a lot of money, you'd buy Chevron, good yield, buy back.

the balance sheet, but I'm not recommending it because I don't expect that to happen. Next, a question from Joe in Minnesota. I established a small position in Palo Alto in mid-October. Would you suggest adding it to this time? Actually, what we did was we added to CrowdStrike. CrowdStrike fell precipitously, almost 10% over a period of a week with not

going on whatsoever. Therefore, that was a disparity with the fundamentals, which I think are excellent. So the one to buy right now at this moment is CrowdStrike. Starting to bounce back. That's the one that is now playing offense. We had George Kirchner, the CEO, he had to visit 130 companies in 100 days in order to be able to become what he called the apology tour for the outage that occurred in the second week of July. Third week of July. I really like that one better. Now heading to Paul in the U.S., he's wondering, is AT&T a buy?

Why? Companies expecting profit gains and planning to return money to shareholders through share buybacks and dividend increases. Okay, I will tell you this. While I don't want to own AT&T, your description of what's going to happen is very true. AT&T has reformed, better company. Why do I want to own it? Because if I do want to own anything in that space, I want to buy growth. If I want to buy growth, that means I want to buy T-Mobile. And Mike Siebert is doing a terrific job. The stock has been incredible. It's been a horse. They've got great relationship with Apple.

I'd rather be in that and forego that dividend, which just can't be nearly as important as the capital gain stream that you'll get from being with Sievert and T-Mobile. Next, Harry in Florida says, Dell has sold off recently considering a future replacement cycle. Is Dell a buy, sell, or hold? Dell did not have a good quarter.

really was a disappointing quarter. I agree with people, even though I think the world of Michael Dell. However, I think that Dell's second half will be much better. I do not think that much of its first half. If you have the patience to be able to own the stock here, I don't think there's a lot of downside, and I think there's a lot of upside. However, we own other stocks in the portfolio that I think are better, even at this price. Do you know that I actually like NVIDIA at $134 more than I like Dell? Just saying. All right.

And last but not least, Stephen Richard in the U.S. writes, I currently have a substantially large position in Netflix, NFLX, in my Roth IRA account. Heading into the next year, 2025, is my current position a hold, lighten, or sell? You know what? Those options are not good enough for me because I would actually add a buy.

You've got Squid Games 2 coming up. You've got NFL game Christmas Day. You have management being vastly superior. You've got an ad tier that is just going to me. Put a huge amount of money in the coffers of Netflix. This company has been consistently underestimated by Wall Street, and I think it is sensational. Bad Money is back after the break. Coming up, Kramer takes your calls, and the sky's the limit. It's a fast-fire lightning round. Next. Next.

It is time. It's time for the White Mountain Crab Show. And then the waiting round is over. Are you ready? It's the day. It's time for the White Mountain Crab Show. Let's start with John in Michigan. John. Hey, Jim. I love the show. Thank you. I just wanted to know if I could get a twofer.

I'd like to know what your thoughts were on exporting LNG and Chenier Energy in particular. Okay, I like the LNG market now that we have President-elect Trump coming in because he's pro-LNG and Chenier is a terrific stock. It's up 20% per year. I think he'd still do well. Let's go to Frank in New York. Frank.

Jimmy, how are you after the commotions week? I tell you, what a week. What a week. Listen, Jim, I'm looking at this stock that I think is really in the sweet spot. It's got plenty of juice in the tank. What do you think of Arista Network? Jay Shulal, she is some incredible CEO and that business is smoking hot. I would be a buyer of Arista. Let's go to Stafford in California. Stafford. Hey, Jim, happy holidays. Same to you.

Hey, I wanted to get your thoughts on Texas Pacific Land Corp. All right, this stock has been just a horse, but all it really is is just royalties off of oil. We have liked it, but it's now going up so much, I've got to tell you, I want to hold off. Let's go to Tim in Idaho. Tim. Hey, Booyah from beautiful Boise, Idaho. Oh, it must be great there.

It is beautiful. Hey, Jim, Under Armour, Kevin Plank's back. Looks like they have a little bit of a turnaround going on. Here's the way I look at it. I think it's a great spec. We have to have a couple quarters that are good. Remember, Nike just had a real hard time. Hard to imagine everybody doing well if Nike's coming back with a vengeance. So let's be careful, but it is a spec and a good one. Marvin in California. Marvin.

Hi, Jim. A special booyah from Central California. Excellent. Perfect. Gracias, Dr. Kamer. And happy National Elvis sweater day. I just want to thank you and your very hardworking staff for doing such a great job and making the sacrifice it takes every day. We do have unbelievable staff. Thank you so much. We had a great party last night with the team. It was really fabulous.

Thank you. So last week, I took your suggestion and rang the register on some really high flyers, and I was able to pay off my student loans early. So I want to thank you for that. Oh, you're quite welcome.

So my stock has a very low price to earnings ratio. Should I buy, sell or hold Wells Fargo? I like Wells Fargo right here. I think it's going to be a fantastic year in 2025. I would be a buyer of Wells Fargo. Let's go to Kurt in Nevada. Kurt.

Who are you, Jim? This is Kurt from Vegas. Long time viewer, first time caller. I have a quick question. I bought Carvana two years ago at $11 a share. $11 a share. Well, I'll tell you, you're up a lot. You take that, double your cost basis, take out $22, you'll have quite a double, and then let the rest run, and I'll feel terrific. I won't have to worry about you. Let's go to Alex in Texas. Alex. Jim, Kramer, how are you doing? I am doing well today, Alex. How about you?

I hope the Eagles win this weekend. Oh, I hope so, too. We need to beat the Commanders. I'm worried about them. We've got this guy, Ben Stoto, on our staff. He won't stop irritating me about how great the Commanders are. Enough already. Let's put them in their place. How can I help?

So I've been holding this stock for a very long time, since I was really young. And I just want to know your thoughts on CSX Corporation. Oh, I couldn't believe the CSX fell this low. And by the way, I'm going to give you a twofer. I think the Union Pacific is great right here, too. These are all worried about tariffs. I'm not worried. These are really good companies. You have to buy them when they're low. Let's go to Terry in Florida. Terry.

Hi, Jim. I wanted to ask you about a stock that you recommended in July of 23, and I bought it 206. And last month, it reached an all-time high of $2.

377, I believe it was. And whether or not I should, it's been down ever since for the past month. It's Eaton. You want to hold, you know, Eaton is a buy and hold story. They've really done incredible work to be able to revolutionize that portfolio. They are pure winners at Eaton. Do not sell. Own. And that, ladies and gentlemen, concludes it. I'll be right back.

The Lightning Round is sponsored by Charles Schwab. Coming up, have some traders on the street turned investing into gambling? Kramer's revealing why he's calling for an end to the market's newfound addiction to short-term day trades. Next.

Booyah, Jim! Your integrity makes you the Booyah Saint of Wall Street. Booyah, Jimmy Till! Booyah, Jimmy Till! Booyah, Jim! Quadruple. That's a lot of Booyahs. Booyah!

Today, The Wall Street Journal ran a brilliant article titled More Men Are Addicted to the Crack Cocaine of the Stock Market. As the piece points out, investors are hooked on the market's riskiest trades. The result? Listen to this. At times, the trading led to mood swings, sleepless nights, even depression, not to mention spiraling losses.

Reading this piece, I felt like I was talking about me and my hedge fund days. At one time, I was known as Reverend Jim Bob from the church that was happening now, an epithet coined by the late, great Mark Haynes, former anchor of Squawk Box. And I was deeply involved in day trading. But remember, I was a professional with huge amounts of resources and full-time research staff. That was 24 years ago. Since retiring from my chart, I've gone away from day trading and now emphasize only buy and homework, which is my twist on buy and hold, because things can change with the company.

when i created my travel trust which you can follow by joining the cbc investing club the whole philosophy is rooted in owning stocks not trading them unless you're professional i am dead set against day trading particularly the kind that is based on zero days to expiry or zero dte options these are options that expire the same day they're no different from gambling on any time touchdowns on draftkings except draftkings offers much safer trading with better warnings

Let me say from the outset that after reading this article, I want to immediately call for an end to this nonsense. We must police ourselves. There's no reason for these things to exist other than trying to get people hooked on the fentanyl of Wall Street. There's no reason to push people into zero-day options other than pure greed. The industry is encouraging bad behavior. That's just plain wrong. After reading this article, people who created these things should be embarrassed for doing so. They should read this story and repent.

I know what people are gambling on, and so do you. They're constantly trading the cryptos. They're day trading all these uranium and commercial space and quantum computing and future mobility stocks. They think they can game the un-game ball. I don't know who dreams up these stocks, but we all can see the volume. We know that they're mostly day trading vehicles.

Can we stop this gambling behavior? No, it's an instinct. But can we certainly make a value judgment? And my value judgment is that those who have a huge stake in promoting options, brokerage houses that rely on feeding crack to the investing community, they need to be held accountable. We need to help those who are getting addicted and we need to stop those who might become addicted. After all, the markets were created for investing, not day trading on the direction of stocks. There's a big difference between making informed investment and pure gambling.

I honestly think we should just merge these kinds of trades with the gambling that DraftKings encourage. DraftKings has plenty of warnings about what can and will go wrong. They provide resources for those who feel like they might have a problem. And they offer tools for safer gambling, like deposit and wagering limits. I like that. It's much more honest than accurate.

our industry. So we have to help the people who've committed, who've gotten addicted to insanely risky trades by making it more difficult than at least slapping a warning label on the crack cocaine, even if we can't get rid of it. And I sure wish we could. I know it would crimp profits, but so what?

But after reading the article today, I think this is pretty urgent. Wall Street is hurting people, real people. They aren't doing it just by themselves. Do the people who push these products need the money that badly? Shame on you if you do. Shame on you. The answer is if you need that money, just go set up a casino, darn it. At least then nobody will have any illusions about what they are doing with their money. I like to say there's always a bull market somewhere. I promise I'll find it just for you right here at MadMoney. I'm Jim Cramer. See you next time.

All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC, NBCUniversal, or their parent company or affiliates, and may have been previously disseminated by Cramer on television, radio, internet, or another medium.

We'll be right back.

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