← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 9/30/25
00:44:20
Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money. Mad Money Disclaimer
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Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people make friends. I'm just trying to make a little money. My job is not just to entertain, but I'm teaching tonight, so call me at 1-800-743-CNBC tweet meyimkramer an individual stock can change your life. If there's one overarching theme of how to make money in any market, which today came out, this is the first day, it's that one stock can create tremendous wealth for you, provided that you own it for the long haul. You don't trade in and out of it and you let your gains compound. What does that mean in the heat of the bull versus the bear that goes on every day here? And the minuscule stuff that you have to think about. Well, I mean Today Dow only gained 80 points. S&P climb.4.1%. Nasdaq advanced.3% There may have been millionaires made today. It means that you can't afford to trade out of your favorites just because, you know, for instance, September is typically a terrible month for stocks. Hey, this one wasn't at all. Or that there's a government shutdown on the horizon which really has any impact on the stock market. Or there's some squabble between the Fed and the President. Again, a sideshow These are sideshows to the performances of companies themselves and we make too much of the sideshows and not enough of the boots on the ground business realities. Let me give you real life example that I heard back from hundreds of people, including a dozen just today when I had a Barnes and Noble book signing in Midtown Manhattan and how to make money any market. I tell the story of how in video changed so many people's lives from the day in 2017 when I renamed Everest my rescue dog in video simply as a frustrating way to get the word out about the greatness of this company and the man behind it. Turns out I succeeded beyond my wildest dreams. The stock at the time was at a split adjusted price of just under $4 back then. Now it's at $186 and change new high. I do a lot of bottle signings, my wife's mescal plus 4o and people show me their statements, they bring them to the signings and they show me how much they've made because they're afraid I won't believe in them. Same thing today at my book signing. It's a highly emotional thing and I have seen a lot of tears of joy from that one stock. A lot of lives changed for the better. That would never have happened if it weren't for the greatness of American business and the amazing talents of Jensen Huang and the Nvidia team. It's for real now. I know it sounds like winning a lottery game or maybe a hole in one, but we're not golfing here. I mentioned a huge number of hole in ones in this book, including my recommendation of Fang, Facebook, Amazon, Netflix and Google in February of 2013. And then Fang when I added Apple later. The performance here have been staggering. But you only made that money if you didn't get shaken out. We are all told to love just index funds and if you invested $1,000 in S& P index fund when we created FAANG here, well, it would have been worth almost $5,000. But if you invested in Google it'd be worth $10,000. If you invested in Amazon $16,000. Apple 18,000, Facebook 21,000, Netflix $36,000. Now we are told it's too hard to find stocks like that, right? I mean those are just where I picked really abstruse names. But first we trumpeted those names almost nightly for years and I would say all them are of the household variety. I call the book the most radical tract you're ever going to read about your finances because the prevailing Orthodoxy is that regular people like you can't successfully pick stocks. How would you know about Apple? How could you know about Facebook? How could you know about Google? You'd be much better off in index funds. The general attitude on Wall street is that you aren't smart enough to build your own portfolio. How this happened, I don't know. Wasn't likely when I got in the business. And it was much harder than to build a portfolio. Instead, I suggest a bifurcated portfolio where you put half of what you can save into an index fund. See, I'm not forsaking them. But the other half goes into five stocks, including one informed speculation. And then of course, some insurance. You do it in crypto, you can do it in gold. You need insurance in a portfolio just like you need insurance own a home or a car. I want you to do it as a program, putting a little money away each month. Go light on the market, skip the triple Vette cappuccinos with skin wet and put that money in the market. Specifically, I want you to put it in growth stocks. Only the earlier the better. It is not too late. Why? Because I want to try as hard as I can to encourage you to own these things, not trade them. And it's much easier to stick with growth. You can't grow rich trading in and out of the best stocks. You will buy high and sell low. I promise you that. You know, I hadn't written a book in over 10 years. I just thought that it didn't matter anymore. I got the show, I got the investing club and what else there to say. But as time went on, I came to realize things about this moment that I detail on how to make money. First, we're witnessing the greatest wealth transfer in history. $1 trillion. Going from one generation of baby boomers to millennials and gen zers who don't know how to invest. And they tend to just trade or on prediction events or zero day off anything other than investing. They have no concept of using compounding to get out of the game. They don't know buy and homework and they don't know not to trade to this new generation, which I believe it doesn't believe. They can be wealthier than their parents and that is a shame. They don't even bother to invest something because they have so little hope you want little hope you want it. Even when I lived in my car in the backseat of my Ford Fairmont for six months in la, I believed I could have more money than my parents. I ended up pulling that off too Just by putting a little bit each month into an account of fidelity. And 3. The process of making money is so much easier now. I'm on these chatbots every day. They just get better and better. A company's website has so much on. It's all your fingertips. It was unavailable when I started. I dedicate the book to my mom and dad because they emphasized to me that I had to save to get rich. They weren't. They knew to save, but not the right way. My father was buried by a tip to buy National Video, a vacuum tube maker, right before solid state circuitry came out. Zero. Meanwhile, one of pop suppliers just sat there. He bought Merck all the time. He said, that's a great company. He became a millionaire when millionaires were like billionaires. Mom. She bought a few shares of stocks in companies she liked. What she didn't realize is that that's the starting point, not the end point. Don't just go to a store and sell by the stock. I show you how a stock price is created to what the price earnings multiple means and how the multiple can change. She never did any of that. She didn't make money with her observations and buy strategy. Although in fairness, she was pretty good at bed in the ponies. Go figure. Still, as brutal listeners say, Pepsi shouldn't be worth twice what Coca Cola is worth because PepsiCo was at 100 and Coca Cola was at 50. I never got to explain to her the concept of the price earnings multiple what it meant. She passed away before that could happen. Honestly, I don't even know if she would really understand it. That's because I didn't know how to explain it back then. Now I do. I always vow to tell people how stocks work. It was too hard then. It's not anymore. It's all in here. And I think I do it in a breezy and let us, let me say, edible way. My most amenable part of the book is when I said that, hey, maybe it's late to buy Fang, which is such a fertile place to buy. It's pretty plowed over. Although there's still money to be made there. I give the younger and young at heart the stories of the stocks that I think could be the next things. That's what you want. I tell you why. They could be the stocks that could change your life. And for those who want compounded income, I'll give you some of that too. Although I want you to find these yourself. But mostly I call this book a celebration of individual stocks of individual companies and Their power to transform your life. I know that's not in keeping with the current orthodoxy. The experts say you can't do it yet. Turn it over. That. Let them buy the funds. I look at things differently. I know you wouldn't be watching unless you thought that individual stocks could create miracles. But of course, also lose. You accept that. You want to cut down the losses. You want to identify those with the best potential. I like that. I'm not going to patronize you and say that you can't possibly figure it out. Instead, I show you how the pros do it because you deserve it. I want to democratize things. Here's the bottom line. We've been blessed with a tremendous market here. I know that. But it won't always be. You have to learn to trust the market and recognize that even if buying on the worst days possible in last 40 years has still worked out fine, provided you chose growth stocks with good pedigree. There may never be a stock as incredible as Nvidia, but there are amazing stocks out there that can and will change your lives for the better. But only if you let them. Jude in California. Jude. Booyah. Jim, longtime listener, first time caller. All right, what's happening? I want to know your thoughts on Northrop Grumman. I've been buying since April. Is this a good time to sell or should I let it ride? No, no, no, no. It's a high quality company. Very good company. Good balance sheet. Smart people. I want to own the stock. Own it. I'll give you RTX, too. I think that works in a similar fashion. Let's go to. Oh, no. That's it. I went on too long about. Yes, how to make money in any market which went on sale today. Banks fertilized individual stocks can change your life, but only if you stop trading and you back them. Man. With the government shutdown looming, I'm checking in with a private player that has some of the more robust employment data out there. Don't miss my exclusively paychecks then. Could private equity be an interesting investment space? To find out. I'm going off the charts to find out with Bob Lang, who helped me create faang. And it's a big year for CEO shakeups and C suite turnover. I'm speaking with the incoming and outgoing CEOs of an integrated logistics company, ArcBest. So stay with Kramer.
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What happened today to the stock of Paychecks. The payroll processor of Human Capital Management company caters to small medium sized businesses. After putting what to me seemed like a real solid set of numbers this morning, the stock plunged 7% early in the trading session largely because I think some people felt the margins are taking a hit. But as I've told you repeatedly, this stock tends to sell off response to earnings even when the numbers are good. Maybe Wall street got the memo because ultimately paychecks rebound and finishing the day off nearly 1.4%. That's a little tricky in a declining interest rate environment. There is a payroll processor issue. The company actually makes more money when rates are high. But if your employees, if employers pre fund their payrolls, Paychex collects interest on that money for every minute before is deposit in your bank account. Now, but that used to be a big issue. But the company's gotten well beyond that. It's a lot of other levers that it pulls. So let's take a closer look with John Gibson. He's the president CEO of Paychex to get a better sense of the quarter Mr. Gibson, welcome back to May have Money.
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Jim, thanks for having me. And congratulations on the new book released.
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Thank you, John. Thank you. I really appreciate that. We did a nice book signing today. Midtown. Well, I want to cover something that I think people have to realize. You, even though it's still early in your fiscal year, you felt confident to raise your full year outlook. So anyone who thinks that the stock should have gone down at the beginning, I don't know how to drive that. You put a pretty good, you gave a pretty good outlook here.
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Well, Jim, I'm going to have to read your book to understand the markets.
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You know, I can't figure out.
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Yeah, so, so what I'm telling you, look, we're off to a strong start in our fiscal year. This year we delivered 17% revenue growth. Not too shabby. We beat earnings per share by $0.02. We had adjusted operating income growth of 15%. And, and quite frankly, you mentioned margins are adjusted margins, 41% still industry leading. And really that performance is reflective of really continued progress on our paycor integration acquisition. We completed earlier this year continued sustained demand for our human capital management, our HR outsourcing solutions. And then quite frankly, Jim, it's really in a backdrop of what we're seeing is a very resilient and stable small business employment market. And so those three things together gave us confidence. We actually raised our earnings per share guidance to 9 to 11% for the full year. And we reaffirmed our revenue guidance between 16 and a half and 18 and a half percent. I think those are solid numbers. And remember, early in our year, our big selling season gets started here in the second quarter and third quarter. So, so we felt good at this point time based upon the success we're having at paycor, based upon what we're seeing and driving operating efficiencies as part of the acquisition and continuing to leverage technology to drive margins, we felt confident we could raise earnings per share for the year.
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Well, I'm glad you said that. When I first saw it, man, I'm on the desk. Listen, you know, Carl and David and I are talking and I said, oh my, maybe I didn't say it out loud because I didn't had done the homework that maybe small business and maybe he lowered the boom on small business. And then I was thinking, wow, he speaks to the Federal Reserve. This could be a chain reaction. But then once I read the call, it's very clear that there's I think kind of an old untold amount of strength in small medium sized businesses. Given the Gloom we keep hearing about.
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Yeah, Jim, I tell you, you know, I hate surveys. You know, I hate random surveys that we have. There's a lot of numbers going around. I look, I like to look at the actual raw data. I like to look at credit card receipts which you can get on a real time basis. I look to, like to look at accounts payable, accounts receivable data and I like looking at payroll data. We just reported our jobs report a few hours ago and the labor market for small businesses continued to have a very slight change to what we've seen all year. It's a stable job growth. Wage inflation continues below 3% and there's really no signs of recession. We continue to see strong demand for our solutions which are all indicate to me that small business are resilient in this economy.
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Well also, I mean I think that in terms of this real world, this non political real world that you're in, you talk about how with rate cuts and the tax bill renewed business confidence, that confidence is higher than people think.
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Yeah, yeah, Jim, we talked about it the last time. There was a high degree of uncertainty the last quarter when we talked about and you look today, now with the tax bill passed, remember just a few months ago, small business owners, business owners did not know whether or not those tax rates were going to expire and everyone was going to have a tax increase next year. You're thinking about capital investments, you're not sure what next year is going to bring. There's more certainty there. The R and D tax credits that were passed in that bill, all the other parts of the tax bill that I think are very encouraging for small business owners. Then you add on top of that we've got the Fed starting to move, you know, and I think that begins to show a sign to small business owners that there may be some relief from an interest rate perspective. And so I think there's more reasons for them to have clarity about what the future holds. We still have a lot of uncertain issues, as you know. But again, those are two things that I think are leaning in the direction of small business owners being more confident to invest in the future.
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Well, yeah, I mean, I'm glad you said that because it's also clear that the stories are that they're the ones who are being hurt the worst by tariffs. Again, I didn't get that feeling after listening to your call.
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No, Jim, I'm not saying, look, there is no question that there are segments of small and large businesses that are being hit by tariffs. And then there are many segments that are being squalls by terrorists. What I might mean by that. Now this is anecdotal meeting with one of a wholesaler of Windows and Doors gets their product, some of their product from Canada. Talked to him the other day and he says we're splitting the tariff between the Canadian manufacturer and hem. They're not passing it on. I asked him what does that mean to do have to do with your employment? He says, you know what, John? He says, I'm not hiring as many people as I expected. I'm still hiring for growth, but I'm not hiring as many as expected. And that's what we're kind of seeing. You know, Jim, for, for an economy growing at 3.8%, we should be seeing more robust job growth. That doesn't mean we're seeing layoffs. And particularly in small businesses, that's not what we hear from our clients. In fact, from our clients, they're talking to us more about employee training and reskilling and investing in their employees. Those are not signs of employers that are about ready to lay off their employees if they're investing in them.
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Not at all. Hey, one last one. I. It sounds like to me that the integration with paycorp is going terrifically and that's going to be accelerating growth probably by calendar year, next year.
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Yeah, yeah, Jim, I've been very happy. The integration continues to exceed our expectations. Cost synergy targets that we originally set and then we raised, we've beat. We, we've actually seen additional opportunities we talked about today, not only for further synergies, but also investments we can make to accelerate growth. We've had some notable retention wins. We've had some large HR outsourcing wins very early on. And so if I begin to think about our HR outsourcing business moving up into a thousand plus sized companies, that's a game changer at Paychex. And so we're really excited about the cross sell opportunities in the pay core. 50,000 clients. We started that. We're seeing progress. So again, we're seeing early signs of progress. We still got a lot of work to do, but I'm very happy about where we stand right now.
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And you don't think it's small business not that concerned about the shutdown worries? Right. Because I mean they just kind of separate what's going on in Washington with their own profits and they don't see a lot of overlap.
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Yeah, yeah, Jim, we've seen this shutdown models before. Again, we'll see how long it lasts now, you know how long it lasts is important again, but you're going to have pockets certainly around the D.C. area. If you're owning a restaurant, you're this is not good, good news for you, you know. So again, but you're seeing pockets in segments. You're not going to see, I think any type of wholesale major issues. Now if we get into something that's a long term, we'll have to reevaluate. But, but again, I don't see that as being a big factor at this point in time.
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All right, terrific. John. I'm glad that we got the straight dope from you. That's the only way to really understand things. JOHN gibson, Presidency CEO of Paychecks thank you for the kudos of the book too. I really appreciate it.
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Jim, congratulations.
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Thank you. May I want to be back after the break.
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Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella. Eduardo Ah, dsw Earth, place of the humble. Brag here, the shoes are so good, no one would ever know how little you paid if you didn't go telling everyone that is. And with never ending options for every style, mood and occasion, all at really great prices, we'll definitely give you something to brag about. So go ahead, stock up on fresh sneakers from your favorite brands or try those boots you always secretly knew you could pull off. Find the shoes that get you at prices that get your budget at DSW stores or@dsw.com Let us surprise you.
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I've told you before, this is very business friendly White House, but it's more friendly to some businesses than others. For example, it's incredibly friendly to private equity firms. Used to be that regular people couldn't put their money in many of these early stage private equity investments, you had to be what's known as an accredited investor. An accredited investor means someone with deep pockets. Now though, they're coming up with new ways to let non accredited measures maybe you just speak thanks to ruling from the Trump administration over the summer going forward, regular people can invest in these vehicles and that should make big money for the major private equity firms here. I'm speaking of kkr, Apollo, Blackstone and Carlyle Group Those are the four we think of. These names trade in the public market and they've been led by some of the best money managers of all time. At the same time, interest rates are coming down, which is great news for the private equity firms because these companies all do leverage buyouts, which requires lots of borrowing in order to take publicly held companies private. Today, this whole group got hit with a nasty pullback. But the private equity stocks are still up big for the year. Could they be worth buying? The weakness? Kind of intriguing. To answer that question, we're going to go off the charts with the help of Bob Lang. He's the founder of Explosive Options.net and the author of the Know your Options. He's got a simple answer. This is a buying opportunity for the whole private equity cohort. And when you get, when you see these charts, you might think so too. Let's take the big ones one by one, starting with the daily chart of Carlyle Group. This is one of Lang's favorite. The stock's been in a strong uptrend for months now, setting a series of higher highs. Okay. And higher lows. Practically a textbook picture of what you want to see in a chart. Now, back in July, the stock reached steeply overbought levels. Okay. And this has kind of changed things. But it never really sold off in response, just traded sideways gradually became less overbought over time. Meanwhile, line points out the Carlyle's got good volume trends with the stock generally rallying on strong volume and pulling back on weaker volume. Although we had a notable exception just this last week. What else? Take a look at the on balance volume right down here at the bottom. This is a volume based technical indicator that uses a running volume running total of trading volume to predict price changes. Basically, it adds up volume on up days and subtracts volume on down days to gauge buying and selling pressure. With Carlyle, the on balance volume looks bullish, really bullish. Although it's come down from the recent highs as the stock pulled back over the past couple weeks. If you're waiting for a pullback, this Stock was at $69 less than two weeks ago and now it's at $62 and change. So Lang says, time, time to buy. He sees Carlyle moving up to $80 in a few months and possibly $100 by next year. I like that risk reward. I think he's got a winner here. Next up, how about the daily chart of Blackstone, which has always been one of my favorites. And I pound the table on it for I don't know probably the last hundred points. Lang points out that the stocks had a similar move to Carlyle with a powerful rally over the course of the summer. Although the stocks now pull back hard hard over the past couple of weeks. When you look at the moving average convergence divergence line that we call that the MACD line down at the bottom here, it does look weak. Crossed over, that's not so great. But Lang says that's because the stock got overbought and gradually burned off that condition over time. Still, the MACD line to me it's a sell. On the other end though, Lang notes that black stones had good volume action of late, rally on strong volume and pulling back on weaker volume. You can see that the down days, the dark, it doesn't have as much volume. What you should look at is this, you can see that it's that it's actually got the right kind of volume. This company's got heavy exposure to real estate. Blackstone real estate is an enormous business. So if the Fed keeps cutting rates, that's likely to push earnings higher. Might be a good plan. A rate cut right now is $170 stock lengths. It can rally to $200 over the next few months. Did spend time. This is when they had a problem with their real estate division and they came on air and said that they could not to worry about it. But they didn't say it in a, in a flippant way and they were dead right. It was a terrific opportunity to buy. Then there's kkr. That's one of the oldest private equity firms. An old fashioned corporate raider from the 70s. Check out the daily chart. After rally nicely in the spring and early summer, KKR traded sideways in August and most of September for pulling back hard in the last couple of weeks. You can see that one's really getting hit. In fact, the stock's now at a deeper Correction to the 200 day moving average. But line points out the KKR has often bounced from this level in the past. However, even though the stock's been hit, it's been falling on lower and lower volume which suggests the sell off might be running its course. Remember, this is the lower lower volume. We always want to see stocks fall at lower volume if we're going to be able to be able to make a buying opportunity at the same time. The MACD line and the balance on balanced volume now, they're not good. Okay. Wang thinks that that can change on a dime if the stock rebounds back above its 50 day moving average. KKR is now at $129. He's thinking 150 to the next ceiling of resistance and then maybe 170 by the end of the year. So again, you can imagine what a buying opportunity. I'm just going with what he says here. The ones, let's put this way, because interest rates are coming down. I like it. Finally, there's Apollo Global Management. This is the toughest one for me to spoil. It's been hit much harder than the others. It's been a much worse performer year to date. Powell is now trading below its 50 and it's below its 200 day moving averages at 133. Lang says it faces stiff resistance in the mid-140s and again at 155. Meanwhile, it's sitting right on top of floor support at 130. I don't see it go through that. Lang points out that the on balance volume down at the bottom started heading in the right direction again a few weeks ago. Well, that would be good. Paul can get some momentum here. He thinks the stock could perform much better, possibly rallying back to its February highs around 175. With interest rates coming down, he expects this one to improve maybe dramatically. Putting all together, I agree that this feels like a good moment to get yourself some private equity exposure, especially given how hard these stocks have sold off in the past few weeks. You're getting great bargains here. My only reluctance with this group is that so many financials are doing great this environment. So maybe it's better just to own one of the big banks. But the bottom line charts as interpreted by Bob Lang suggest that the private equity stocks are ready for a rebound, maybe a big rebound, especially Carlyle Group and Blackstone. I think he's right and those are the ones that I would pick too. Let's go to Steve in big Missouri. Steve. Hey, Jim. I always appreciate talking to you, not calling today to talk about our football team, how it fares up against the Eagles. We're interested in one of our great club stocks. We've Capital One in the portfolio. There were two analysts today, Evercore and Morgan Stanley, that lowered their price targets and the stock was down as much as 6.7%. Do you think that's the reason or the looming government shutdown? And in fact it's fallen again after the close, even after it rose some. Yeah. Look, I think that this move is an overreaction. I think that periodically people think that as the economy gets weaker, this is the one to bet against. I would tell you that when the rate, when the economy gets weaker and the Fed moves and cuts rates. This is the one you want to buy. So I think being very short sighted, I don't think they understand who really runs this bank because Fairbanks really unbelievable. I think the stock deserves to be at the 230 range. I'd be a buyer heavily here. I think these analysts are going to miss the next big move and they're making a major mistake and I'm calling them out on it anyway. The charge endured by Bob Lash just that pibetic restocks might have more room to run here. I'm inclined to agree, but not on all of them. Now there's much more. Matt Bunny, including my interview with ArcBest, I'm hearing directly from this logistics company's top brass. Been a really challenging environment for the global supply chain. Now my newest book hit shelves today. I'm giving you a sneak peek at one of the biggest pieces of advice I share. And of course, oil calls rapid fire in tonight's edition of the Lightning Round. So stay with Kramer. This summer, ArcBest, a trucking logistics company, announced a leadership transition with chair and CEO Judy McReynolds passing the torch to President Seth Windsor. Now, unfortunately, this comes at a tough time for the entire industry. Back in 2022 went into what people are calling a freight recession and we're still kind of stuck in it. In fact, it got worse this year thanks to the tariffs. ArcBest itself has reported a couple of soft quarters this year. Understandable. It's what the industry is doing. So what's the argument for owning the stock here? Yesterday, ArcBest made the case for its stock at an Investor Day event here in New York City tonight. I want you to hear the case directly. So let's check in with Judy McRell. She's the chair and outgoing CEO of ArcBest, Seth Renzo, who's the president, CEO elect. Judy. Seth, welcome to Mayor Buddy.
- [31:53]
E
Well, thank you.
- [31:53]
D
Thanks.
- [31:54]
B
Well, okay. So you've kind of reinvented this company, Judy, and now you've had a Great run since 2010. Please tell us why you felt this was the right time to move and why Seth is the right choice.
- [32:06]
E
Well, as you know, executive leaders need to have development and succession plans. And you know, that's something that's really important to me. And so I identified Seth as well as others and our board was involved in that too. He's been working together closely with me for the last four or five, five years developing and, you know, Seth is the right person. He's, you know, Has a sense of urgency, a bent toward growth, continuous improvement. He's been with us for two decades and just, he's just ready and it's right. And I've got some personal passions that I want to spend time on and I'm going to continue as chair of the board. So I'm excited to watch Seth be a great leader for us and I look forward to it.
- [32:53]
B
All right, so set. Judy's put your company on a path to have some really what I think high level logistics, some real value added versus just say regular trucking. Not that that is value added itself, but will you continue to move that along? I know for instance you've got Vox Technology, one of Judy's project, but you've got upcoming ARC Best view technology. How will this differentiate you from your competitors?
- [33:16]
D
Yeah, so when, when I entered the ARC Best president role, the role that I'm currently on, I went on a listening tour and listened to our customers, employees and it really reaffirmed our strategy that we have to build technology around what our customers are looking for. And VUE and Vox are great examples of that. So the Vox technology opens up a $50 billion market for US in the intra logistics space and we feel like our solutions differentiated because we're the fastest way to market on getting technology into an autonomy, into the warehouse operation. So view, what that's really going to do is it's a new customer service platform that we announced at investor day yesterday that's going to combine all of our modes into a seamless place for our customers to quote, book, track, do all of their logistics needs in one singular platform.
- [34:06]
B
So they would have a dashboard that everything they need and they would know to work with you guys because it's pretty transparent what you get. Absolutely.
- [34:12]
D
And it's across modes too. So whether it's ltl, truckload, expedite, you can have complete visibility of your supply chain and we think that's differentiating in the marketplace.
- [34:21]
B
Excellent. Now Judy, I want to get a high level update on where the, where freight is and we hear about freight recession. Let's just some of your competitors and talk about it and we start thinking, well wow, this is an industry that's not doing as well as I thought it would given the fact that we might have say 35 point percent, a little bit stronger GDP. What's going on in the industry that there are competitors who just openly speak about a freight recession.
- [34:44]
E
Well, if you start and look at what are, what drives our business, 40 to 50% relates to manufacturing and wholesale and so, and that's where the weakness has been. It's, you know, the manufacturing PMI has been in a weak place. So that's where it starts. But, you know, the way we look at it is, you know, we still have opportunity. What I've loved about what Seth has done is reorganize some things, our sales efforts and how he's targeting, you know, the different modes. He is really putting together plans and executing plans, you know, to grow despite this weakness. And one of our shining stars in all of that is our managed transportation. It's grown 45% compounded annual growth rate since 2017 when we birthed that. And what that is is really a place where we come together with customers that we have a good trusted relationship with and we're managing their supply chain. And as things have gotten more complicated, complex, the cycles up and down, you know, what we're doing is really trying to make sure that if it's efficiency they want, we're doing that, or if it's capacity they need, we've got it. And we have access there to 95% of the LTL capacity and 70,000 truckload carriers on behalf of our customers. So that's what we're executing on for them.
- [36:07]
B
And so how did that help to try to help these, your clients, with tariffs?
- [36:12]
D
Yeah, I think what it does is we build our customer relationships on Trust. So 80% of our revenue comes from customers who've been with us a decade. Decade. So why we're seeing the growth in managed solutions, like Judy mentioned, is because they're coming to us during this time of disruption and saying, hey, we have to reorganize our supply chain. We have to switch from one mode to pool distribution. So they're really coming to us for optimization of their supply chain to combat some of the cost increases or just how they have to source their products.
- [36:42]
E
Like diversification.
- [36:43]
D
Diversification.
- [36:44]
E
Diversification really helps.
- [36:46]
B
Yeah.
- [36:46]
E
You know, for. If you're trying to limit risk.
- [36:48]
B
Right.
- [36:49]
D
And to Judy's point, our pipeline's grown over $1 billion in that managed solution. So it's resonating with customers now.
- [36:56]
B
One thing that I am concerned about is we do a lot of work with autonomous, and a lot of people are worried about what I would do to someone's job. I'm worried about what an autonomous driver would do to a truck or trucker. And these are really hard jobs. And I don't know if I would want to go into it. If I would think that maybe five years from now I'd be Replaced, union, workforce. Maybe they can be protected, but I'd be concerned about my livelihood. What's going to happen?
- [37:26]
E
Well, you know, I think what's great about us is we stay close to that. You know, we have a great innovation team that stays close to what the ecosystem for startups. And so we're interfacing with autonomous companies and you know, we're watching that. But I'll let Seth talk about how it impacts the operation.
- [37:47]
D
Yeah, really what we're looking for is any technology that could be disruptive to our, to our business model. So what we always say internally is focus on disrupting yourself before someone else does. And that's why we invested in this innovation team to stay close to these startups to make sure that we have our eyes 5, 10, 20 years down the road. We're a long term company, we've been in business 102 years now. So we're always focused on what's in the future and what's ahead.
- [38:12]
B
What do you think? I mean, I know that I've, I've seen FedEx using robots, obviously we know autonomous drivers. We see them sometimes even when we're next to. We say to ourselves, wait a second, this thing's happening faster than we thought. I mean, how do you, what do you say to the workforce so that the workforce is, is not thinking it's about to be disrupted itself?
- [38:31]
D
Yeah. So we work closely with our workforce and we think we have some of the best drivers in the nation. Safe, reliable, friendly to our customers. But what we do is we negotiate on those type of technology changes with Teamster leadership. So it's something we're keeping an eye on, but it still has a long way to go from a regulatory standpoint and just a public adoption rate.
- [38:53]
B
All right, that's good because, because I think a lot of people think that things are happening too fast.
- [38:56]
E
And I'll give you another example. Completely different. Vox has another product than the one we've talked about before. It's called Smart Autonomy and it's autonomous mobile forklifts driving inside the walls of a warehouse. But on each end of the action that they have to take, you have to have a human in the loop. And that's actually really helpful at getting started, you know, with the work that needs to be done. And so there's examples like that, I mean, other technologies, I think Seth could talk about AI, but what we see most often is, yes, that, that technology is driving change, but people actually make.
- [39:37]
B
It happen to be a hybrid situation, we want that, we want people in the room. Well, I want to thank Judy Cross, the CEO of ArcBest Moving on from but to chair right. Seth Runser is the CEO elect and president of ArcBest. Look, this is the kind of company you buy if you think the economy is going to get hot again as I do when the Fed starts cutting their money. Back in for the break. It is time to be famous about the buy sell search. We get another culture on my Stepford and then the lightning round is over. Are you ready Ski daddy? Cover the lightning round. Chris with John in North Carolina. John. Yes. Yes sir. Got a question about Arista Network symbol A N E T J Sri Yalal is unbelievable. I was talking to her neighbor today. Literally came to my book signing and we were both marveling. I got to get her back on the show. That company is doing so well. Great call. Let's go to Todd in Connecticut.
- [40:40]
C
Todd.
- [40:41]
B
Hey Jim, how you doing? I am doing well. How about you, Todd? Thank you. Doing great. Hey, how about Applied Digital Corporation? Apld. Look, it's intriguing but it loses a lot of money. I mean you want a company that's in the same business. It's. It's Nvidia and they make a lot of money. Let's go to Josh in California. Josh, Booyah. First time, long time, Jim. In any market. You betcha. I don't know if it's in the book or not, but do you like the use of margin and how do you like residual technology? Margin. It did not even bother. I mean margin. I wouldn't even use it in the game of Monopoly. You do not want to use margin in stocks. You might as well. You can't live in a stock if they take it away. I mean no margin is. No. Okay now residia the interesting idea, interesting spin off of Honeywell but it's kind of played out. Had a big move. Let's go to Mike on it though.
- [41:32]
A
Margin.
- [41:32]
B
Let's go to Michael in Arizona. Michael. Hello Jim, thank you for taking my call. I made a small purchase of a stock at 22 in middle of July. It's at 33 today it's up 50%. It's a company that develops coal mines while branching out into rare earth elements and key minerals. They benefit. I believe they benefit from tremp Trump era tariffs and the onshoring trend as well as the President's preference for increased coal production and the need to compete with China on rare earth elements. All right, they just had a dividend increase. And what, what's the stock, what's the stock the stock is Ramaco Resources. I don't know Ramaco Resources. We have to do some work on that one because it's dangerous for me to say, hey, coal's good because sometimes it isn't. Let's go. I will work on that with Ben Stodo. Of course. Let's go to Ricky in Texas. Ricky. Booyah, Jim. This is Ricky calling from Frisco, Texas. Love it. Hey, we're in Frisco. Second time caller. All right, second time caller and long term listener and proud club member. Hey, I'm tired of making money. When are you going to stop? All right, let's lose some money. Let's call this lose money, which is that. Yeah. So I'm calling about this grocery stock. With the rise of organic and healthy eating trends, what do you think? This grocery company headquarters in Phoenix, Arizona, price to earning ratio 22 and 40% down from its top price. What do you think about the stock? Stock name is Sprouts Farmer Market. Something's wrong with Sprouts. Stock keeps going down. I don't get it. I'll tell you what we bought today for the Chapel Trust, though. We bought Costco. We waited and waited, waited. 1,078 goes down to 900. That's the one you want to pull the trigger on. And that, ladies and gentlemen, conclusion of the Lightning Round.
- [43:34]
A
The Lightning Round is sponsored by Charles Schwab.
- [43:45]
B
When you write a book called how to Make Money in Any Market, which came out today, by the way, you're naturally drawn to stocks that pay big dividends. Why not? I mean, what else can stop a bear in its tracks more than a dividend that's very large. It could be a trampoline. Correct. But a funny thing happened on the way to the bookstore. When I was writing the chapter about stocks and big dividends, I realized that I run the risk of really gaffing people. If I blessed all the high yielders, some of those yields go sky high. But because Wall street doesn't believe that dividend is safe, and it's often that Wall street is right about this survey, this landscape, you can understand my concern tomorrow. Conagra Brands report. Solid brands, right? Birds Eye Hunts. Boom. Chicken Pop. Plastic Pickles. Household names, along with many others. Plus the stock yield, 7.6%. What's not to like? Precisely. What's not to like is that 7.6% dividend yield. How can a packaged food company offer you such a great return? Well, it's because most investors don't believe they can keep paying that dividend. At current levels. Now, you might be tempted to buy Congrega. It's a solid company, but I'd rather go for it when it yields seven, which is going to six, because then I'd be less concerned. If you buy the stock right now you're reaching for yield, which is something you should never do because if a dividend gets cut, stocks going to get hammered no matter what. And let's not forget, when the yield was 5 or even 6, it didn't stop the stock from going down, did it? Congress not the only food stock with an outsized yield. Campbell's has been fighting the bears for years. Talk about solid brands. New one rails, but also Pepperidge Farm, Cape Cod potato chips, V8. All solid stock yields just under 5%. Kind of tempting, but why is that yield that high? I think the only way to justify buying this one is if you're waiting for a takeover. And at least so far that's not been a real good bet. Pivot over to the transports and you see UPS with a 7.76% yield. Management repeatedly told us the dividend is a top priority iconic trusted brand, really one of two in a nice duopoly. But I just can't go there because that 7.76% yield is what I regard as a total red flag. I'm concerned that a real slowdown would force them to cut the dividend. Now I wrote how to Make Money in Any Market over a period of two years in the chapter on dividend stocks. I initially included Stanley, Black and Decker and Best Buy as interesting prospects. I think both of these are well run companies and they yield 4.5 and 5% respectively. I took them out though in the next pass because unlike the food stocks, which really don't even need a strong economy, make big money, best buying, Stanley, Bock and Decker actually need strong consumer growth and tariff relief. That's just too much of a lift for me. Now I wouldn't be surprised if one of these stocks I just mentioned ends up making me look bad and becomes a good stock. I know this because, see, we bought both Stanley and Best Buy for my travel trust and we were shocked to see them shoot higher immediately on word of rate cuts. We sold a big chunk of those positions up higher but then subsequently got rid of the rest of just okay prices because we were worried. In retrospect, we got lucky, I think on the higher prices because I believe that those rallies were simply short squeezes. We definitely aren't going back into either those two anytime soon. Oddly, these two stocks got me to come around to the radical thought though, one of the many that I have in the book, which is that the only real safety is owning a stock that has a company that's growing. If you have a company that's growing nicely, it's a much better bet and safer than any of the so called safe dividend stocks I just mentioned. As I write in how to Make Money in Any Market, growth is the real only magic elixir. Yields, not so much. Don't reach for yield, go for growth. And believe it or not, you'll feel a heck of a lot safer than some stocks with yields that are much higher than the rest of the market. Those are the ones in the danger zone. Alex says always bull markets are my problems. Just for you or your man Money, I'm Jim Cramer. See you tomorrow.
- [47:30]
C
All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of cnbc, NBC Universal, or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, Internet, or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kremer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please Visit cnbc.com madmoneydisclaimer at Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the courseroom to the workplace. A different future is closer than you think with Capella University. Learn more at Capella. Eduardo.