tv Fast Money CNBC November 14, 2013 5:00pm-6:01pm EST
at an all time high of 1790 with a gain of 8.5 points. thank you so much for being with me. we will talk to you on google plus and twitter. fast money begins right now. >> live from the nasdaq market site in times square, i'm melissa lee. here is tonight's line-up. ride the bull. the dow jones closing at an all time high for the 37th time this year but we have somebody who says the rally is far from over. con trarn call today, cisco clocking in after guidance sent investors into full on sell mode. investors say now is the time to buy. and the truth about trulia. we're going straight to the source with the ceo of trulia to separate fact from fiction.
let's get straight to our top story tonight and it is housing. stocks across the board getting a pop after the dovish comments from the woman expected to be the next chair of the federal reserve. >> we expect to maintain a highly accommodative monetary policy for sometime to come there after. you would not see stock prices in territory that suggests conditions. these purchases have made a meaningful contribution to economic growth and to improving the outlook. we have seen interest rates f l fall. >> so rates low or longer? there is still a boost to be had from low rates.
she also said that the benefits outweigh the risks. my favorite one and we have talked about this for a while is mhk. another all time high. 17, 18 times forward earnings. maybe it is getting a little bit stretched. >> rsh bottom line it's going to accommodate long time stocks. and look at some of the names.
this is is a momentum market. you have to go back to some of these names. zillow, 20% off of the highs. this is a momentum market. >> we are talking about ll a sifk. it has not popped. you look at the home depots and builders. this one should be rallying. >> how do you factor this into your view when it comes to mortgage originations? >> those are conflicting things, right? that's clearly good things. southbound like aback of america would be a beneficiary of that. i do want a steeper yield curve. i am not sure what we're going to end up getting. i am long the bank of americas of the world.
they make a fee on every transaction. the more transactions there are, that had a very nice move. >> i was chatting by e-mail with the home building analyst. and he said he viewed it as more of a debt balance. the home builders are going after a period where it will be much tougher to balance. what do you think in terms of the trade for the home builders specifically? >> dhi has gotten crushed and seemingly found a bottom. it didn't matter. the stock price reaction was that's what you're looking for. when they start to rally and what could be construed as not great news that's when you have to start to get interesting again. i get an 18 and three quarter level on the downside as well. >> and also take a look at tall.
toll brours is high end. that's where you want to be. >> there's a gap and a chart. if this crosses over 1492, there is is a huge gap right up to $20. >> shares falling today after the company shot down speculation that really was buying it. >> thank you. great to be here. >> tell us once and for all is trulia for sale? >> it is not for sale. we are building a fabulous business. it's a $24 billion market opportunity. we make money not by selling houses but by tapping into the enormous spend of the real estate. can enter consumers and that is
a tremendous opportunity. we partner with the substantial portion of the industry. pretty much all of the real estate brocker and partner for us. you see technology and where are the front and center of that and see a tremendous opportunity ahead. >> are you in the market for an acquisition yourself? >> well, we just announced earlier this year the acquisition of market leaders. they are leading provider software tuls and that's a big transaction. we close that in august of this year. and the focus right now is to integrate that. that creates a unique opportunity for us as a company. we focused historically on building the best consumer experience and providing real estate professionals.
so the marriage of the two is a tremendous opportunity. so we see a lot of opportunity in integrating that. but also the industry. but the space is changing. there is is a tremendous amount of disruption and change going on in the industry. driven by technology. and so we are very active looking at potential opportunities. i will give you a data point. so far this year we looked at over 35 individual deals. that's an average of about one a week. we are seeing the spaces start to consolidate. >> we have 16 different mobile applications.
looking to buy, looking to rent. professionals looking to run their business. it's increasingly growing at increasingly rapid. but the price out there is tremendous. so we see a tremendous opportunity. >> how do you see the average transaction being in two or three years? how is that different than maybe when i first bought a place years ago. there are some things staying very, very similar. think of the consumer. ten years ago a consumer would drive around with a map or a cell phone. real estate professionals are mobile professionals. they are using technology in
their day to day business so their rules are change iing interestingly, 15 years ago, the agents would disappear and they would be replaced by technology and that has not happened. twet squi fuch? is i can each house is individual. not only look at the information online. they work with the professional. it's a consumer with technology and also a professional. >> i got one last question. we're running out of time here. you are looking at targets on average. you have looked at 35 different targets. you look at the valuations. any pressure to snap up these
companies before they go public? you're obviously not putting your own valuation on your targets, i would imagine. >> certainly not a pressure. so there is absolutely no pressure. i think what a lot of players are seeing is a transformative change. and it's important to be part of an opportunity that we see. so there is no pressure. but the space is moving quickly. and the scale that we are at in a business is quite tremendous. so we went public. one rate is approaching $200 million. we are growing at the rapid
cliff. certainly we are not in need or under pressure to do m & a. >> i'm very clear about that. valuations are pretty high. >> valuations are very high in all of these names. you're not getting any bargains here. move.com. that's one. it has been on a tear. you can buy it for trade. >> housing is not the only sector. if you believe our next guest you should keep riding the bull for years to come. >> thank you very much. >> i am expecting that earnings will rise from 110 this year to
120 next year and 130 in 2015. 130 is what the market will be discounting. 15.5 multiple is not crazy. we're pretty close to that. now we will get you through 2014. >> what are your assumptions when it comes to taper and does it matter in your forecast? >> i'm getting tired of tapering and all of the tapering chatter. it's an ongoing issue. i think the testimony today made it clear that she is in absolutely no rush that there is absolutely no rush to taper. >> so you get $130 for next year -- >> for 2015. >> okay. >> the market will be discounting. where do you stand on that? >> i'm pretty optimistic about that. there is no concrete ceiling at the previous cyclical high.
i think when they called the trauma of 2008. companies five years into the expansion are operating like it could happen again. they are keeping a lid on their costs. >> give or take, the balance sheet is 4 trillion dollars. so far there really has not been any cost. cpi inflation remained extremely low. the main issue is whether this is going to lead to an asset bubble. >> i know you liked the financials. is that current valuation? >> the economy continues to improve, the unemployment rate cons to decline.
loan loss reserves and provisions continue to decline. there is opportunity for banks to make inventory loans. >> we are keeping you on top of the smart none money as filings roll in. find out where warren buffet and carl icahn are putting their money. and forget the burger wars. we're talking about the mystery challenge tonight. which one of these pictures is actually the mcrib. the answer may surprise you. more on fast. that's next. americans take care of business.
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shares. moving on to dan, third points, we know a lot of the headlines before. also taking a two million share stake in nokia and a 2.6 million share stake in act vision blizzard. he cut his yahoo! stake down to 16 and one last one, we have got to talk carl icahn. turns out he had a 3.8 million share. that is about $1.8 billion worth of that stock. >> interesting in apple. we also heard cooperman is out of this trade. >> i don't believe he bought it much more than a year ago. this is rms almost a day trade
in apple. >> do you still love it? >> we have been pretty steadfast in our love of yahoo! and it has done everything right. it's maybe late in the game here but i oom still in the camp. now everyone is starting to focus back on yahoo!. but you have got to trim some of this to be responsible. >> let's stick with today's top trades. >> the stock is moving higher in the afterhour sessions. you like this trade? >> not really. i think it's very warren buffetesque. it's boring, slow dividend paying stock. he's one of the best investors of all time.
it's worked for him. not for me. i think you have got to believe in crude rallying. >> we talked about exxon for a long time. we said look, if you're looking for an opportunity to get it, look. you have a nice double bottom. you said it's going to bounce. here's the bounce now. i hear what steve is saying. believe me, it under performed for a reason. >> this is probably going to take part in it as well. it will trade with crude. it is up 7%, year to date and the market is up 20. >> perry now holds .2 million shares of the company. i- >> another name that we have talked about for a long time.
we said give him time and he will sort it out and we have. yes, the stock has moved considerably since then. >> and lastly, leone cooperman's advisor is disclosing a new 2.8 million position. >> i can see why he gets into this but steve and i were talking about this today before the show. i'm short copper. there is is a huge difference. if you believe that copper is going to drop. >> we like to watch them. there are a number of enormous caveats that you should have in mind. >> that right. we always high lid.
which i think they should, you and i talked about that a lot. i think you could really get a sense. >> it wouldn't be so silly as to disclose the short that really crushed the pole. >> you have got keep those things secret. there are swaps, over the counter trades and option trades. and foreign securities are not included. there is is a lot of things that you don't see. you see a snapshot of something at some time in the past. >> we have got the con trarn analyst who says now is the time to buy cisco. and twitter options go live. first chance to short the stock
i put in the hours and built a strong reputation in the industry. i set goals and worked hard to meet them. i've made my success happen. so when it comes to my investments, i'm supposed to just hand it over to a broker and back away? that's not gonna happen. avo: when you work with a schwab financial consultant, you'll get the guidance you need with the control you want. talk to us today.
annual sale earlier in the year. that's at least part of what dragged down the company's earnings. >> you know, when you look at kohl's, what happened there, i mean, i actually like kohl's. i think it was overdone. >> our traders are fast but they're not always right. and guy certainly fell into that category. >> i just -- i was convinced,
actually, that last quarter they had a decent one going to in that revenues would be better. the inventories came in lower than i thought. made a huge revenue miss. a huge miss. i can't get, you know, when you're that wrong it's hard to get back in the pool. now is the time to get in but that was flat out wrong. >> i think maybe they were sandbagging a little bit. they did have problems with their internet. i think beyond my business was nowhere near where it should have been. but i think that's fixable. >> at the same time we heard from walmart and we talked about everything. and consumers are still feeling the impact of the 2% payroll tax. >> they are levered to that. actually with walmart is a
levered space. they are really changing their merchandise. they are getting into organic foods. you can do a trade, buy walmart and short whole foods. >> walmart had the inventory out a couple of months ago. they have all rallied aggressively. they all look to me like they are running out of gas. in order stroms looks like it is breaking out. >> you would like in order strom the best? >> macy's is really running right up into resistance. >> let's hit our call of the kay. ronny runs stan point research. great to have you with us. >> explain how you get to this. you covered 2,000 stocks.
>> it took me five years to develop a 155 variable computer model back in the 1990s that generates ideas for me and i apply heavy fundamental and sub. >> the flip side is that now cisco is oversold. >> you look at proctor and gamble, and it's trading at 20 times earnings. if you don't like cisco at $21 you probably don't want to be in
the market all together. if you would have gone in and bought it at that time, you would have made 30, 40% within 12 to 18 months. >> it's interesting and good to see you again. last quarter they had a similar move and you have got a little bit of a bounce but not much. this is a pile on to last course. it's two quarters in a row that have been disastrous. i think it's interesting. this stock traded a quarter of a billion shares today and the levels that we held are levels that we took off from back in april. if you're looking for an ent tri point. you're not buying this on valuation. you are buying it for a trade. i think this is as interesting as it gets for cisco. >> there is a couple of issues here. the stock did trade 250 million shares today and i think that
smart people were the ones buying as opposed to those selling where you have window dressing and tax loss selling. i saw the same thing happen that i'm seeing today with cisco when it broke below $21. >> ronny, great to have yo with us. what does the bk model indicate? >> you're not going to get hurt buying this. 20 seems to be 2 sporlt. i do think that cisco has some potential to get -- to increase their market share. . >> coming to a market near year.
>> i think when you're looking at situations like this, very popular ipos, one of the places you can look for guidance are at previous stories. i expect the options to be quite expensionive. what does expensive mean? maybe we might expect that the at the money put would cost more than 10% of the existing stock price. it would cost more than 5% of the existing stock price. it will cost quite a lot to make directional bets. i still expect people to do it and the reason is valuation in the stock. people are looking and thinking i don't want to buy a stock. here is what i would recommend
to people who are actually already positioned in the stock. if you bought shares, i think you might want to think about selling upside calls. >> all right. mike, thanks for that trade school. >> he makes a great point. look at that back drob. how many of that star there? just throwing it out there. i don't know. >> billion dollar valuations. the evidence stacking up and the internet stacker is on full on bubble territory. ♪ ♪
you in a couple of minutes. but again, we are still crunching the numbers right now. we will have more for you just in the little bit back here. >> thank you very much. it does look like he has sold some of his position. this was one of his winning positions for year. >> it is is a huge position. that was great. it's a nice one to hold on to. >> i think he probably still likes the story. i don't think anything has changed. >> let's move on here. internet stocks not slowing down quite yet. is the.com bubble getting ready
to burst? mark, good to see you many person. >> the twitter ipo, did it lift all boats in terms of valuations? does that help? >> nobody nels the group has those kind of fundamentals and that upside. >> i don't know how you can turn that up or down, honestly. i'm shocked that somebody would turn that kind of offer down. >> i thought that facebook offered $3 billion for it. >> there is two major debates on facebook. one is that young teenagers are -- we know that holder teenagers are going to
instagram. why not buy snap chat. >> so you would have been okay with that from facebook standpoint? >> i think it would have traded up. >> i believe it. >> picture me snap chatting you. >> see, now it disappeared six seconds later. it's over. >> i'm going to switch gears now. everyone is debating over yahoo!. looks like it's breaking the chart to me. where do you see yahoo!. it's had an incredible run here. do you think it's breaking out? >> it seems like it. but not for fundamental reasons. this is fundamentally underperformed. i think it's going to be six before this year is done.
that trade can still work for a little bit longer. >> let me go real old school on you. google. what do you think of it here? >> it's one of our top picks and our top pick netflix third. trying to get everybody to buy mobile search. they just got through ha and now the coast is clearer. two to three years down. i bet this would be the single best derivative play. it's got a nice core search business. a huge great asset. >> mark, good to see you. media earnings wrapping up this week. think the block buster returns could just be starting. what did you see? >> we saw quite a lot of call
activity and several media neems. it traded six times its average daily volume. fox trading about 5.5 times its average daily value. >> the interesting thing of the three was vie come. but what stuck out to me was the strike of those calls. in most cases it was at the money. the december 92 and a half calls, that's cheap. it should be. with the stock at about $0s it's quite a ways out of the money. one of the things that happens after earnings come out, the premiums drop and it's easy to make. >> and of course you get more options actions. that's tomorrow. and check out our web scythe, options action.cnbc.com.
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welcome back. in case you missed some of today's top moments, here is a look at what some of the biggest names in business are saying in tonight's executive edge. >> every now and then the markets behave like school children. we know we're going to have to take some. we know we're living in an artificial state of exses liquidi liquidity. >> internet sales in china are going to be bigger than you guys. people involved in the chinese consumer story, i would imagine are doing really well. >> we see them as not being
overly conservative with keeping their inventories. >> and that is significantly ahead of where we were. >> karen. >> i don't know if you have noticed but we have been purchased by the bbc. that was interesting. >> it was fun. >> yeah. but if you wade through the accents, the school children thing stood out to me. >> there is excess liquidity out there. >> let's move on. this is my favorite part.
it is curbing some appetites as it makes the rounds online. >> no way. >> so we will show the traders a picture and they have to decide if it's a frozen mcrib or something else. what do you think? mcrib or not? >> panda. >> it's not -- the wrong game. >> that is -- those are gold bars stacked neatly. allegedly fort nox. >> you're right in that it's not mcrib but it's not gold. it's the sole of a boot. that company has been on a tear this year, up 90%. >> i have exited on trade. i locked in some profits. the stock is still on fire.
>> now to our next image here. mcrib or not? mcrib or not. >> yep. >> that's pink slime. that's what it's all made of. >> all right. >> don't eat it. >> you're wrong. i don't think. >> it's a cloud. >> it's actually insulation from corning. which is also in the -- no no, no. part of the home building trade. we saw that pop today. do you like owens corning? >> if you think that homes are going to go higher and we're going to have better housing, then yeah, i guess so. >> mcrib or not? >> like the shingles on my house. >> i'm asking you that question. >> it's obviously a mcrib. >> one of them has to be. >> it is the mcrib.
that one is a mcrib. >> i would rather eat the insulation. >> you guys were making a big deal about this. do you know what sausage looks like before it's cooked? food does not look the way it looks. >> does it look like a gray slap of card board? it's an amazing transformation once it's cooked chl. >> you would eat a mcrib? >> how do they get the bones out? >> as if there is bones in the meat. >> boneless cows. >> they had an investor day and it's announcing that it will spent three billion opening 15 to 1600 new stores. mcdonald as a trade has been a lackluster one when you look at a chipotle or jack in the box. >> we flagged it.
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>> more breaking news on bill 5:00man. >> we have got some more news on a holding that akman is boosting just stock this is one he is doubling his stake in. also news that he has eliminated and exited his stake in an ocean freight company. it looks like between last quarter and this past quarter helloered his exposure to proctor and gamble shares by about $6.8 million. cutting back on the exposure, remember, on an options actions
style. he has options, call options and the stock outright to get his exposure. >> the exposure goes down on pmg. you tweet it we trade it. guy? this is for you. looks like jet blue is making a long term ride. >> that was a sort of previous high. finally, for the first time in a while some of the head winds have abated. i think it makes a push towards $10. rr i do think it's possible. i think there is -- they could earn at that for 15.
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>> moving higher by almost a percent here. brook shire disclosing a 40.1 million stake. do you like this as a way to play the oil and gas? >> i like it as a way to play gas. they are getting into more gassy assets. that's the growth area for exxon. >> let's go around the horn. >> continuing the theme of looking for stocks that have underperformed a bit, i'm looking at ebay. >> louisiana pacific. i mentioned it early on in the show. if you believe that housing is moving higher, keep it on a short leash. 15.5 is your exit if it doesn't work. >> tennessee valley authority announced that they will close down six coal plants and replace them with natch y'all gas. >> i still like liberty interactive. we will see some spin outs in the next six months or so. >> guy? >> we should -- >> mcrib. >> tomorrow -- it would be nice.
a friday show. apache. i think it finally broke out. >> all right. i'm melissa lee. see you tomorrow again at meli. see you tomorrow. meantime, "mad money" with jim cramer starts right now. >> my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull in the summer. i'll help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. call me. is there a bubble in the stock market? if there is a bubble, is it so inflated that it will lead necessarily to a crash? as surely as the behindenburg
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