tv Street Signs CNBC December 6, 2012 2:00pm-3:00pm EST
that's why we have the sell-off. every time i see it putting a little bit after base, i buy it. i bought a little bit today. >> first solar, you mentioned on monday, what's it done? >> it's up 22% since we mentioned it on monday. >> take the credit. sue? that's pretty good, right? >> i think you should take the credit. it was a bold call. we're up 12 points on the trading day. steady as she goes, ty. >> that will do it for "power lunch." >> "street signs" begins right now. we'll see you tomorrow. welcome to "street signs." where "a" is for apple. we have a veritable cornucopia of apple angles for you. why it is down, is it undervalued and we put into perspective just how much it is really lost. jim cramer, the madman himself, is here. apple the latest company to say it will bring some manufacturing jobs back to america. we've got your good news
insourcing story ahead. plus, a five-star fund manager unveils what he thinks could be the next apple, of sorts. and the gold man himself, todd hoffman of "gold rush" is here. he will tell you why the fiscal cliff has him digging harder than ever. welcome to "street signs," everybody. mandy will be back tomorrow and hopefully stock buyers will be, too. i mean we're up but up hardly any. basically stuck in neutral. you got intel, cisco, mcdonald's, some of the better performers today. b of a, cat and boeing among the worst on the dow. but even on days without big moves there is still big news. let us get some with bob pisani. bob, let's step away from our markets for just a second. okay? what is this we hear about the possibility that the italian government could go away? >> it was a problem this morning. mario monty's government has survived the no confidence vote. looks like the italian government is going to survive. you see italian stocks were down throughout the day. the problem about this, the
structure of italian politics makes the country ungovernable. brian, there's 12 political parties in the chamber of deputies. that's the lower house. you get coalitions together and they routinely topple the governments. this has been a problem since world war ii. they've got to gig ofigure out better way to govern the country. we've got huge volume today on apple. it will do 40 million shares, probably twice normal. it went positive earlier in the day on that very good news about doing some production of the mac in the u.s. >> they've got too many and maybe we have too few. somewhere in the middle is the answer. bob pisani, thank you. your top stock story today is -- what else -- apple. it is making a small comeback after hitting a nine-month low earlier today but it's been a run to forget for one of the most owned stocks in the world. it's down 7% over the past week. here's your headline of the day. apple has lost $157 billion in market cap since its peak. that is a lot of dough.
but exactly how much is it? jackie deangelis puts that into perspective all to the tune of the 12 days of christmas. >> well, that is a ton of money, as you said. since its peak in september apple's market cap has shrunk by $157 billion. a huge number. easy to throw around as well. what if we thought about it in another way, as in the 12 days of christmas way? what's the value of that kind of money? how about one bank of america, maybe two comcasts, three nikes, or four pricelines. five yum!s, six estee lauders, seven cbss, eight dells, nine coaches, ten macy's, 11 ralph laurens, even 12 mattels. that's a lot of barbies. a few more good numbers for you on shorter time frame as well from the close on monday to now. apple has lost roughly $38 billion in market cap. that's slightly higher than one methlife. yesterday alone apple lost $35
billion in market cap to put that in context, there are 417 companies on the s&p 500 that have total market caps lower than what apple lost in just one day. >> it's like 50 rims. >> exactly? >> and 100 nokias. this is a serious topic. it opens up the question of whether apple shares should be bought or sold. that's the bottom line. joining us to figure it out, tony sakanagi, josh brown, and the one and only jim cramer is right here on set. i'm going to get to the other guests in just a second, jim. i want to begin with you. look at something that i prepared on valuation. so this is apple's trailing and forwce to earnings ratios against google, against microsoft, against amazon which is just out of left field. 12 times trailing. google is trading at about a 50%
premium to apple. is the stock undervalued? >> yes. i think it should be owned, not bought or sold but owned. because bought it basically feels like, wait a second, you should sell it. i don't want to trade it. there are a lot of different reasons why this is. when you listen to jackie's excellent report, remember they have $100 billion in cash. might have lost $38 billion in a couple days but their cash position is almost bigger than the other s&ps. apple's inexpensive but google is expensive. it is just apple's so many hundreds of billions in market cap that sometimes it is going to fall by its own weight. >> we can bring that back up, please. when i look at apple trading at 1.5 points more in forward pe than microsoft. one of those is mispriced. >> exactly right. that's why i look forward to the
panel because it is really ael ael braic. >> do you believe apple is fundamentally undervalued? >> yes, i do. i think one other point that should be made is that apple's cash balance is not only enormous at about almost $130 a share, but it's growing at $40-plus per share per year. so if you -- and this is after paying a dividend and repurchasing shares. if you roll this tape forward, apple is just an enormous pile of cash. that becomes a very, very substantial portion of its market cap. on almost any metric this stock is really inexpensive and its projects are still very, very bright. if you look at its core market which is smartphones, only 42% of all handsets sold globally this year will be smartphones. we think that percentage is going to go to 85% over the next
three to five years and that's going to drive very strong continued strong unit growth if apple's core market. >> do you think people get that there is a price where apple could trade where the market cap would be almost made up of cash and what cash they have a year from now and that the dividend wo would actually be big. if you kept at this pace, at this philosophy, we would hit that level soon. tony? >> absolutely. look, i think if you do the math we're at $130 a share in cash right now. over the next three years. we think that apple can add another $140 or $150 in cash. have you cash levels on the balance sheet of $250 to $300 a share. again in the context of a stock
that's trading at $550, that's really, really, really significant. >> agreed. josh, all right, tony and jim make great points. but, the stock has lost $150 a share-plus over a matter of -- i mean less than two months' time. is it because of margin requirements? is it because of capital gains taxes? is it because of slowdowns in smartphones? is it alien invasion? what is it? >> it is mayans -- i don't know. i'll tell you that i think the way to look at this is, everyone's getting very, very dramatic because it's a big price stock. it is $700 down to $500 or $550. it looks like it is this huge thing. in the meantime there have been ten of these 30% corrections in apple's run-up in the last five or six years. it is a very regularly occurring thing. it is just that it started from a very high base. the thing to keep in mind, there is going to be selling pressure on this stock just for the fact that he ever one's got big gains
in it and there is uncertainty about what the tax rate will be on capital gains next year. nobody should be surprised by this. what's very encouraging, in the wake of this stock coming down $150 a share and being such a huge weighting in the nasdaq and the s&p, the markets have essentially digested this move. other stocks have gone up. yesterday is a great example. i think if you're bullish on this market it is the end of the year, that's a real positive. the other thing on apple -- jim nails it, he is 100% correct. if you're an investor, you are not going to catch that moment where price diverges from momentum and all of a sudden the selling pressure starts to abate. you won't see it. you'll be at your day job. you'll be doing something else. if you're an investor, i would not be shy about buying this stock right in here, understanding the fact it could retest $505 very easily and that that's okay, most importantly. if you are are a trader that's a different story. technically the stock is in a n no-man's land on a short term basis. if you are an investor, there is
nothing wrong getting in at these levels. obviously you are buying a cheap stock. it may be the greatest company in the market right now. why try to nail it and pinpoint the exact bottom? i don't think most people can do it. >> tony, listen. in an interview at rock center which interviews tonight, program an nbc, the ceo of apple, tim cook, sort of hints to brian williams about tv saying when i look at my tv it looks 20 or 30 years out of date. that's all i can say. that's literally what he said. what's going to be the next great thing that then rejuvenates interest in this stock? >> well, i think there are a couple things. the story on apple is changing a little bit. this is a company that prior to the last two quarters had eps growth at 60% a year on average for ten quarters. eps growth the last two quarters has been in the 20s. that's still stellar particularly for a company that has 1 ii $00 billion in revenue. but the story is changing.
it's going from a hypergrowth story to what i think is a premium branded consumer company. this is a company like a louis vuitton or like bmw or like nike that has a very strong consumer franchise. they make premium product. people are loyal to that brand and they buy what it has. so i think this story is changing. off of $200 billion revenue base, it's very, very difficult to reaction sell rate growth to the kinds of levels we've seen before. i just think that's math and there's nothing that will enable and toll get there. there's no market big enough. now that said, i think there are several opportunities for apple to incrementally continue reasonable growth. certainly doing something in the television space. we don't think it is a television per se. we think it is redefining television so that you'll be able to play television in a very non-linear way, record shows and then watch them on any ios device at any time.
that would be a re-invention without doing the television. i think there's lots of opportunities given that apple has 400 million customers that are subscribed and have credit cards on its system for and toll do e-commerce, for and toll do advertising, for and toll do search. these are all opportunities that apple has going for it. >> tony, how big is the tv opportunity if they were to capture a meaningful share in terms of redefinition? i doubt they're trying to be the next comcast but how big could that potentially be the way you envision it? >> look, the television unit market is about $100 billion a year. if apple had 15% share, it would be $15 billion. again you're back to the law of large numbers where that's off of a $200 billion base that contributes but it doesn't dramatically change the story. >> would the margins hold up in tv? that's the problem. >> depends on the deal they'd cut. >> this is why we bash best buy. it gets hard to make money in consumer electronics unless you're apple.
>> they have to cut a deal with comcast, time warner cable, with charter. there has to be a deal cut. comcast obviously pays our check but i think that's important. i think bigger is the ipad. there's 2 billion install base pc, 80 million pcs sold a quarter. i think the pc is going away. >> the mini news has been quiet which makes me a little bit nervous. >> really? i think it is good for once we're not looking at hourly sales. we're looking at "the new york times" review which is fabulous. what affects this is the critics of "usa today," critics of the "new york times." when china deals with apple in a way that's reasonable for apple, apple is going to i think take over china. i respect samsung but apple still has cache. >> i think the bottom line from the stock perspective and getting away from the company a little bit -- because we all know all of the size of it and how much cash and all of that. just looking at the stock itself, this thing is up 8,000% the last ten years. don't think that anyone should be looking at it as having that
opportunity or anything even remotely close to that going forward. so when tony says the story's changing, it is changing, but changing doesn't necessarily mean it's going somewhere negati negative. it's just going to be a different type of opportunity. >> well said as always, josh. but you also probably made the case for the capital gains sale excuse that a lot of people have been throwing out there. >> it's up 40% this year versus an s&p that's up closer to 10%. don't be shocked. everyone owns it. >> tony is right, ecosystem is worth a great deal of money. if you split up the iphone, i-mac, the iphone, it wouldn't be the same. >> great apple discussion. we appreciate it. there was another big headline for that rock center interview with tim cook. >> we've been working for years on doing more and more in the united states. next year we will do one of our exirsing mac lines in the united states. >> how apple and many other u.s.
companies are starting to bring jobs back to america. the feel-good insourcing boom story is coming up next. also on deck -- which company might become the next apple? five-star fund manager is here. i'll talk about the metal market. look at that, folks -- "gold rush" todd hoffman from the discovery channel boom show is going to be here. why the fiscal cliff has him mining, panning and digging harder than ever. todd hoffman, "gold rush." jim, can you grow that beard? >> i love that show. i can grow the hair that he has. >> let's do it. we're back after this. americans are always ready to work hard for a better future.
since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪
come pre-filled with problems. enough is enough. introducing the chase liquid reloadable card. with chase liquid, there's no waiting and no fee to activate you can load cash and checks at any chase depositfriendly atm and there are no withdrawal fees at over 17,500 chase atms all for one flat fee of $4.95 per month.
get rid of prepaid problems. get chase liquid. why can't you be a made in america company? >> you know, this i phone, as a matter of fact, the engine in here is made in america. and not only are the engines in here made in america, but engines are made in america and are exported. the glass on this phone is made in kentucky. so we've been working for years on doing more and more in the united states. next year we will do one of our existing mac lines in the united states. >> wow. big news coming out of rock center. that interview with brian williams. and apple not the only u.s. company bringing jobs back to america. some big manufacturers like ge also stamping made in america on more and this more of their products. charles fishburn wrote about the insourcing boom in this month's
magazine "the atlantic." charles, welcome to the program. joining us from mexico city, i guess somewhat ironically, in a way, because 30 years ago if it were mexican factories taking u.s. work, then that moved largely to china. now some of that is coming back here. how come? >> it's coming back specifically because a company like ge has done the math and they figured out two things. first, the world has changed in the last -- certainly in the last 20 years, and even in the last ten years. transportation costs are higher. labor costs are higher overseas. and markets in this country move much more quickly. even for something like appliances. ge wants to be able to make dishwashers, refrigerators, washers and dryers, put them out on the market quickly. difference in transportation time, it takes five weeks just to get finished products to the u.s. from china.
from the factory that they're reviving in kentucky, it takes ge 19 minutes to get the products in to the warehouse and ready to distribute and product cycles even in appliances have been cut in half. people want their appliances up to date and they want to be able to put them on the market quickly. >> as you've pointed out, wages in china have been skyrocketing. they're still low compared to our wages but they're up five-fold in just over the past decade. but that would lead me to think that the factories would go from china to laos or bats withotswa vietnam. >> labor is increasingly a smaller portion of the cost of producing a product. so if labor is only 20% of the cost and you can save 20% on your labor costs, well, you're saving one-fifth of one-fifth, and yet the transportation costs
and the time while something moves along really hurt you. so what -- actually what ge's ceo himself said, chasing low labor costs is yesterday's game. you have to make the right product and you have to make it in the market you're trying to sell it in. that's what ge thinks they've discovered, making products in the u.s. is important to getting the product right in the u.s. >> charles, unions certainly took their lumps in the blame for why jobs have -- inability to negotiate strikes in this factory area in kentucky, huge number of strikes in the '70s. but let's give the unions some credit. how have they helped bring jobs back? >> well, the union at the louisville, kentucky facility is called -- it's actually called appliance park. it's a legendary factory in the u.s., factory so big it has its own zip code. and all the hourly jobs there
remain unionized, and, look, the union has negotiated a dramatically lower entry level wage. it's $13.50 an hour. that's $8 lower than what the previous entry level wage was. the wages do rise fairly steadily, which is nice. because $13.50 an hour is hard to make a living on. what the president of the union in louisville said to me was, we'd rather have entry level jobs at $13.50 an hour and grow this business back with ge in the u.s. than have zero jobs at $21 an hour. >> ge used to be majority, now minority owner of nbc and cnbc as well. but your article was about ge. we didn't ask you to talk about ge. i want to make that very clear. this is a story you found on your own. >> the article uses this idea that you can now make dishwashers and refrigerators and water heaters in the u.s., both smartly and in some cases
cheaper than overseas. and ge was just the place i went and found this. the other thing i think that's important to say is, ge rediscovered that making its own products in its own factories was actually a kind of research lab, a kind of r & d. every day -- and they gave me one example after another -- the people who make the products say to the people who design them and market them, you know, if you could only do this, it would be easier to make or it would be easier to use. and those changes are folded right back in to new product lines, literally in real time. every few months. so that's something american companies have kind of lost track of that the factory is itself a kind of r & d lab. >> charles fishman from "the atlantic," hey, great stuff. one of my favorite magazines and also a great story. thanks very much. >> thanks for having me. catch brian williams' exclusive interview with apple
ceo tim cook tonight on rock center. 10:00 eastern time on nbc. up next -- a big development in the john mcafee saga. yeah, we got another leg. and then the odds are somebody on your list is getting a gift from am done this year are high. we've got the wild story of workers living in parking lots to get that gift delivered on time. and we hop on to "street signs" time machine, taking you way back, all the way to 1884, sonny! 128 years ago today, the washington monument was finished. get this -- construction started in 1848. it took 36 years from beginning to end. well, you had a civil war in the middle there, too, but it does sound a little bit like d.c. these days, doesn't it? r look... ...at the best schools in the world... ...you see they all have something very interesting in common.
they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. i have obligations. cute tobligations, but obligations.g. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. military families face, we understand. at usaa, we know military life is different. we've been there. that's why every bit of financial advice we offer
is geared specifically to current and former military members and their families. [ laughs ] dad! dad! [ applause ] ♪ [ male announcer ] life brings obstacles. usaa brings advice. call or visit us online. we're ready to help. bob, these projections... they're... optimistic. productivity up, costs down, time to market reduced... those are good things. upstairs, they will see fantasy. not fantasy... logistics.
ups came in, analyzed our supply chain, inventory systems... ups? ups. not fantasy? who would have thought? i did. we did, bob. we did. got it. a big development in the strange life of john mcafee. yesterday we told you that he escaped from belize to guatemala. well, apparently he entered guatemala and has been arrested. robert frank, are they going to send him back to belize? >> they certainly are. >> oh, poor guy! >> he thought he had made it to safety when he reached the
shores of guatemala. but it turns out his problems are just beginning. basically the gig is up for john mcafee. now mcafee of course the tattooed gun toeth software tycoon that's been on the lam for three weeks after the murder of his american neighbor in please. police were questioning him. this week he fled to guatemala hoping to find safety and political asylum but his request was denied and police just announced this afternoon they're flying him back to belize. belize police tell me they'll be waiting. what happens now is anyone's guess. he could be brought in, charged, he could be released, or, as he told us, he could be made to disappear. but with all the public theater around this man, i find that, brian, very unlikely. >> he kind of -- i don't want to say bragged but he sort of showed off he was smart, he had this whole decoy, he went to guatemala. i made it! you're just like, you can't just come in to guatemala. that's sort of what happened. >> yeah. well the reason had he some
confidence, he hired the former attorney general of guatemala as his lawyer. guatemala of course is not a good friend of belize sew thought he was going into friendly ground there. and obviously he miscalculated because immediately they arrested him and are now going to send him back. big question is what happens. the u.s. did not really it seems help him in that political asylum. he didn't really have a case for cal asylum. he's wanted for questioning. >> when your book on john mcafee comes out, you tell me. >> we don't have the ending yet. >> no, we do not. robert frank, thank you very much. odd are that you bought something on amazon.com this season. because of that we've created a town within a town in nevada. jane wells is there to explain. jane? >> reporter: brian, this is the fernley rv park. we got a classic air stream there. that's called a holiday rambler. 60% of the people camping in this rv park are here for one reason, to work the holidays at
am done. amazon's even paying their rent. not just here but at rv parks around many of their other u.s. warehouses. amazon tells us it's hired 50,000 seasonal workers to meet the rush. we have some video here inside a fulfillment center we visited in the past in phoenix so you get an idea of what kind of work they do. a lot of temps are people who have taken to the open road but they need to make a little cash along the way. jim melvin working his second season for amazon. the 68-year-old retiree is saving a money to buy a car to go with his rv. says he walks up to ten miles a day inside his warehouse and he blogs at jimbosjourneys about the people he leads work camping. >> they're fun. they're really a lot of fun. you see the same people. when you walk in to it, you know you're going to work hard. it's not going to be something that's easy, easy money. >> what do you do for fun in fernley? >> oh, go to some of the casinos. >> have you made any money?
>> no. >> reporter: what kind of money does he make? the pay here is a little bit -- around $12 an hour, plus you get a lot of overtime. and also, as you can see, amazon, we're told, goes into the off-season to these sort of wintering rv parks to recruit for next year. >> i'm on jimbo's journeys blog as of right now because you said it on the air. i'm looking at his blog post. he's going from four ten-hour days a week to five 11 1/2-hour days. these folks are busting their tails. >> reporter: oh, yeah! and they're not young. he's 68. there's a lot of retirees to do this to fund their rv lifestyle and they lose weight. i mean they are walking, they are working. one woman when she gets home she wraps the gifts, puts them in the box, her hands and feet are sore. she loves it! >> you know, i'm actually looking on this blog, he says i called my investment advisor monday to sell some stock so i
could pay the balance due of something. anyway, hey, good nor jim -- >> was it apple, i wonder. >> it's probably winnebago, knowing jimbo's journeys now as well as i do for two minutes. jane wells, good luck in the casinos yourself. thank you. coming up, the ipad could be on the verge of a mid life crisis? plus, could the fiscal cliff become a plot line on one of the biggest reality shows? we're digging for answers with "gold rush's" own todd hoffman. coming up. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.
♪ [ male announcer ] 'tis the season to discover the kid in all of us. enjoy free shipping and great values on your holiday shopping from l.l. bean. i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground shipping at fedex office.
it is time for an extremely truncated version of street talk. boston property, simon property group, general growth properties an some other rates rising. ubc upgrading them to buy from neutral. smaller flames included were amoco, weingarten we willty trust and alexandria real estate. we like the reit space. men's warehouse, the stock is getting whacked. same-store sales were down last plont. it actually blamed the fiscal cliff in part, as well as super storm sandy. the ceo said consumers were
distracted by the cliff. the storm and the election. staying with clothing, vera bradley -- well, handbags. those shares also tanking and they are blaming sandy as well but also noted their holiday season is off to a slow start. jeffri jeffries raising the tart fro tm $22 to $20. not all bad news. finisar, higher demand for tranceivers. what else? the stock down 17% year to date. finally, zynga. take a look at shares. they are up nearly 7% because they filed for a gambling license. that is right. the virtual game company wants to become a real poker company. let's bring in julia boorstin with more on this zynga story.
seems like if they get it, a completely transformative thing. >> it would be transformative and zynga's definitely pushing forward with its plans to eventually make money from online gambling but the key thing here is that this is really a ways off. the stock soared as much as 9% higher this morning after it came out that zynga applied for real money gaming license in nevada which the company says will take as much as 18 months to get approved. but we have to remember that online gambling is still el legal here in the u.s. zynga has been lobbying for congress to change the law. texas's "hold 'em poker" has a million monthly users but it will be a long road to turn all of those people or even some of those people in paying gamblers. >> a long road with hurdles like you noticed, the biggest one to get congress to approval legalized online poker or other forms of gambling. but there's been movement for that. you talk to zynga insiders all the time. is this something people think could actually happen?
>> well, brian, the fact that the stock has jumped so much today definitely shows that people think there is a possibility. one thing that a number of analysts have pointed out to me is that if zynga can make it happen, it becomes legal, then there could be another wrinkle which is the fact that all of the regular casinos like caesar's will also get into this busy. there is no guaranteed success but zynga does need something because it is getting increasingly hard for them to get people to pay for virtual goods and gambling is obviously something people will pay for. now the results from our cnbc all-america survey are in. it when we ask people their views on the economy and their money. courtney reagan is here taking a look at what people told us about their most private thing. their spending habits. courtney. >> at least whether it comes to shopping, brian. that's right. if we can take a look at the cnbc all-america survey here at
the wall. we're going to reveal some interesting insights into consumer shopping patterns over the black friday weekend. largely contrary to what we've heard from other organization's surveys, many retailers early up their black friday into thanksgiving thursday. 45% of those we surveyed disapproved of those thanksgiving hours. 18% approved and 37% said i don't have an opinion on that. the 45% disapproval could have played into the responses when we asked which of the following days consumers actually shopped in store over that weekend. 42% of those surveyed shopped in store over some point during that black friday weekend but only 4% of them -- at least so they claim -- took advantage of those thanksgiving hours compared to 16% of those who shopped on black friday itself. when it comes to what consumers are shopping for this holiday season, it appears the tablet is again the hot item for christmas. 21% of shoppers do plan to buy a tablet in the next three months. of those who plan to buy a tablet, the apple ipad is the
favorite with 7%, followed by the android tablet and amazon kindle tied with 3% each. if you dig deeper into that data, we reveal a much closer race between the ipad and the android. at least among 18 to 34 year-olds. 8% plan to buy the ipad in the next three months, and 7% plan to purchase an android tablet. brian, i know you said yesterday when apple starts with 100% market share the only way they can go is down. be interesting to see if christmas other players start to eat into that tablet margin. >> should i take this time to remind our viewers that cnbc has an excellent app? >> we do. we have an excellent app. >> it's free, it's great. throw that out there. courtney reagan, thanks very much. up next, the five-star fund manager names names on some small caps that he thinks could grow to become very big caps. and "street signs" right now is going to test your ethics. what would you do if four
brand-new ipads wound up on your doorstep that you did not pay for but nobody knew you had? would you return them, would you sell them, would you donate them? it happened to one woman. we're going to hear her dilemma and what she did coming up. ing. i have obligations. cute obligations, but obligations. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.
when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. ...so as you can see, geico's customer satisfaction is at 97%. mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts. so we're taking you behind the scenes. this coffee cup, for example, is computer animated. it's not real.
geico's customer satisfaction is quite real though. this computer-animated coffee tastes dreadful. geico. 15 minutes could save you 15 % or more on car insurance. someone get me a latte will ya, please? i put away money. i was 21, so i said, "hmm, i want to retire at 55." and before you know it, i'm 58 years old. time went by very fast. it goes by too, too fast. ♪ but i would do it again in a heartbeat. [ laughs ] ♪ ♪
coming up on "closing bell," fedex ceo fred smith says it is a myth raising rates on the wealthy kills jobs. he'll join us exclusive to explain his reasoning. plus, one wall street street gist to predicts the fed will announce more economic stimulus next week. but is that really what we need right now? we'll look at that. another day, another deal for tv banks. ceo ed clark tells us if he's got more wheeling and dealing up his sleeve. maria and i look forward to seeing you at the top of the hour from the new york stock exchange for the "closing bell." see you then. >> thank you very much, bill. all big companies begin small. as they grow, investors along for the ride often get rich. while there may not be another apple out there, there are companies that mark travis says have lots of room to grow. mark is president and lead portfolio manager at intrepid capital funds. they got five-star ratings.
mark, welcome. there's no apple. that's a one-off thing probably. but starbucks started with one shop. and you got rich beyond your dreams if you bought that stock when it went public. what small caps do you think now that you own can become big later? >> brian, i wish i knew. just kidding. >> i was going to say, thanks, mark, for coming on the show. >> i think, brian, for being a small cap value investor, we really try to hit a lot of singles and doubles to find, in the words of peter lance, a ten bagger is unusual. a lot of smaller companies are too small frankly for the big fund complexes to own and nice balance sheets and generate a lot of cash. we're happy if they go up multiples but they aren't expecting it. we think they trade at a discount to a private market value at these prices. >> that's two ways to look at it. the undervalued companies that
you like like a speedway motorsports. speedway is never going to be apple because there's not that big of a market for nascar and you can only own so many race tracks. but you do believe it is fundamentally undervalued. >> well, brian, in the south you can't own too many race tracks. but they own a number of them. it's obviously a duopoly with international speedway based south of us in daytona breech. bruton smith is the founder and owner. i like to co-invest with something that's managing the family heirloom. it is about a $1 billion enterprise value. the market caps are around $600 million. you get paid 3.7% in a dividend. and people miss the fact that they have tv rights which is a large parts of the intrinsic value of the business. we think they trade at a discount here of several dollars relative to a $16 share price. so we're happy to sit and wait and if for some reason every community in the u.s. has a
speedway, we'll certainly make five or ten times our money but we aren't marketing it. >> marcus smith, bruton's son, was on with us when we were in charlotte recently. a name you like that's maybe a little more risky but has room to grow, iconics brands. not a household name but the brands might be op, famous for the five-inch inseam corduroy short of my youth in california. danskin. >> you miss one from my youth and mine, candies shoes. it was renamed iconics brands. but it is a neat business. kenneth cole, the shoe gentleman, his brother runs it. they have a lot of different brands. one i like probably the best is snoopy. every time i see the metlife balloon i smile. and the share price has come up a fair amount. we think it has a little room to
go from here and there's a lot of brands that need some help and they've been able to breathe life into them so we like that security. >> you really like world wrestling entertainment, huh? wwe? >> well, again -- >> because i'm not sure i smell what you're cooking. >> well, what you are buying at this share price, brian, is a market cap around $600 million. $147 million in cash. they're trying to develop a 24/7 wwe channel which we're not certain that that's going to work or not, but in the meantime, you're certainly paid to wait at close to a 6% dividend. all in all, vince mcmahon i think has been a very good friend to shareholders even though he's again in control much like bruton smith. so we're patient waiter at this price and we think that it's got room to go from here. >> mark, there's a good chance i'll start for the jaguars this sunday against the jets. travis, thank you very much for joining us.
>> go jags. >> good luck. they're both terrible. up next, breaking news from "consumer reports." they have put a popular hybrid's mileage to the test. and let's just say it did not live up to the hype. we are going to name that car and something very cool. the gold man himself, todd hoffman from the discovery channel hit "gold rush" is here. he'll tell you why the fiscal cliff has him doing that a lot harder than ever. americans are always ready to work hard for a better future. since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪
welcome back to "street signs." i'm sharon epperson. take a look at how u.s. markets interpreted what the ecb did earlier today, cutting its european growth outlook. we saw the dollar strengthen. that has weighed on commodity prices. energy prices in particular across the board with the wti contract closing at a three-week low. we're looking at pressure across the board in the energy sector. that's good news for people driving over the holidays. we're looking at gas prices coming down. futures market and prices at the pump, only ten cents higher than a year ago. back to you guys. >> sharon, thank you. well, consumer reports out with
a new report on ford's top hybrids and their big mileage claims. the results, let's just say, are not ideal for ford. phil lebeau joining us here. what is the news? >> essentially we're talking about the ford fusion hybrid and the ford c-max hybrid. both of those models claim, according to ford, they are believed to get 47 miles per hour. that's how ford advertises them. that's on the sticker eer on t windows. consumer reports brought them in, did the testing. according to consumer reports, the fusion and c-max hybrids do not get 47 miles per hour. the c-max gets 37 miles per gallon. those are dramatically lower than 47 miles per gallon. just for some point of reference, these are important vehicles for ford because as ford develops that hybrid platform, the fusion, they've sold more than 10,000 this year. they've sold almost 9,000 of the c-max hybrid. that's pretty decent numbers
considering ford was nowhere when it came to hybrids a couple years ago. big claims coming from consumer reports. >> okay. i'm not going to pile on to ford because we've seen this with other car companies. so in your long experience, phil, has there ever been a car that has really lived -- because i have never been able to -- i get about eight miles to the gallon less than i'm supposed to in my car, and i'm a reasonably conservative driver. i understand aerodynamics. i still don't get the mileage. does anybody? how do they come up with these numbers? >> first of all, there's sophisticated testing that's done. the auto companies all do it, and then they have the results certified and put on the stirks. remember, it wasn't long ago that hyundai had to take back its claims about the its models getting over 40 miles per gallon because the epa did investigations. it will be interesting to see if that's the situation here with ford. by the way, we did call ford for a comment. we have not heard back.
>> i'm sure you will. phil, thank you very much. gold making its way back to $1700 today, but will the fiscal cliff have impact on the demand for gold in a good or bad way? let's ask a guy who knows more about gold than pretty much everybody. todd hoffman, star of "gold rush" on the discovery channel. wearing his sunday finest for us. thanks for joining us. why do you think the fiscal cliff will benefit you and the price of gold? >> well, the fiscal cliff -- i think it's going to benefit me obviously because a lot of people run to gold for safety. that's why i got into it. you know, you look at everything going on. you look at raising the debt ceiling and the economy, and that's what drove me into actually digging the stuff out of the grounds. hey, let's go back to ford quick. i got 340,000 miles on my f-350, so hey, ford, come on, right here. hit the fat kid up with a new
truck, man. >> if you keep finding gold, man, you can buy ford. you'll just buy the company. >> man, yeah. there's a great idea. >> you don't need a new car. save that for portland where you can ride your electric bike. where do you see the price of gold going, todd? everybody wants to know. >> i've been expecting -- here's the deal. you lined up a bunch of guys on the street and said how much physical do you actually have, most guys want to have gold. the problem is they just don't have the noun actually grab some. every time you see a dip, guys are getting in the game. it does have a bottom. it seems like it's around 1650, 1700, then it comes up. i would have expected it to be, you know, 2,000 or 2500 by now. i don't really know, but i am -- you negotiation i'm nknow, i'm n
any gold. >> do you see it coming? >> yeah, i do. it feels like it. even if we get through this fiscal cliff thing, you know, the first quarter of next year we're probably going to hit the debt ceiling again. you know what they're going to do there. they're going to find another solution and probably run some more money up. well, you're watering things down. there's really -- in my estimation, there's only one way for gold to go. that's up. i don't think we're in a bubble. wro who knows. >> todd hoffman, in i'm ever in portland, i'll buy you a voodoo donut together and we can bicycle around portland. >> let's do it. hand in hand. >> there you go. take care, buddy. thanks for joining us. short break. we're back after this. [ male announcer ] this december, remember --
you can stay in and share something... ♪ ♪ ...or you can get out there with your friends and actually share something. ♪ the lexus december to remember sales event is on, offering some of our best values of the year. this is the pursuit of perfection. [ male announcer ] this is amy. amy likes to invest in the market. she also likes to ride her bike. she knows the potential for making or losing money can pop up anytime. that's why she trades with the leader in mobile trading. so she's always ready to take action,
no matter how wily... or weird... or wonderfully the market's behaving... which isn't rocket science. it's just common sense. from td ameritrade. well, having a ton of locations doesn't hurt. and a santa to boot! [ chuckles ] right, baby. oh, sir. that is a customer. oh...sorry about that. [ male announcer ] break from the holiday stress. fedex office. ♪ [ male announcer ] 'tis the season to discover the kid in all of us. enjoy free shipping and great values on your holiday shopping from l.l. bean.
IN COLLECTIONSCNBC Television Archive Television Archive News Search Service
Uploaded by TV Archive on