tv Fast Money Halftime Report CNBC December 30, 2013 12:00pm-1:01pm EST
in-door plumbing. >> the golden girls age of technology. >> "golden girls," a great show. >> thank you for being a friend. we're worried the stocks are getting old, right? >> a fair worry, correct. >> worry about for a while. dan, thank you. great having you. jon, see you tomorrow, i hope. back to headquarters. melissa lee and the halftime. here's what we're following today. 400 club, home runs and grand slams, trading six stocks with gains of more than 400% this year. check your statements, you may own one. david versus goliath, betting on small stocks, russell 2000 up 37%. time to go big or go home? small caps, big runs with b of a head strategy. hold them or fold them? a banner year for stocks, we are
tackling the question on everyone's minds, which stocks and which sectors should you hold and which shoeld you fold? it's halftime, steve weiss, what are you holding, what are you folding? >> one group holding, gill add, i don't own bibb but i continue to look at it. the stocks are cheap. leak the merck's announcement they said maybe we're not doing the right thing with the pipeline, let's create research centers. guess what? that's what big cap biotech is, and it's cheaper than big cap pharma on a p/e and growth basis. a couple of stocks i'm not going to hold on to, i don't owe them, yahoo! the val situation reflect -- valuation, it's put up or shut up by marissa mayers. she's limited in terms of the competition with dole and others. getting rid of the high flying internet stocks. not talking about a priceline which is reasonably valued, i'm
talking of the twitters, facebooks. those stocks have to grow into their valuation this year and i'm not sure they're going to. >> dr. j., biotech, bone of the top of performers. a source of beta. i'm wondering where you stand on that. are there particular names. >> i like biotech, but it wasn't one of the areas of focus for me. pete is actually more positive on these guys than i am. i would not exit, i'd be in steven's camp. i would not exit biotechs, i still like them. ones to hold, i'd say likes of southern company, a utility, likes of bank of america, because i think merrill lynch is not getting its fare due in the company. i would look at some things going on on the other hand with nvidia, a big consumer electronics show next week. i think their seven inch tablet
supposed to be the fastest out there. that will get buzz. those would be holds. ones i'd fold, too easy to value, at least too easy in my mind to value. twitter, that's tough to value, but i think garmin's easy to value, tesla, and i think netflix are fairly easy to value. all are overpriced. >> why do you say tesla's easy to value? are you looking at as an alternative energy stock, automobile company? >> no. automobile stock, and i'm also look at bmw and volkswagen, two companies making cars for about 100 years, and doing a fabulous job, by all reports, with their new versions of plug-ins or hybrid electric cars. i think that will bring these guys back to earth. you have a benchmark to measure them against. as everybody else starts doing this, forget about those two for a moment and go to audi and
mercedes-benz and the rest. they're priced less than tesla, bringing a lot of expert ease to the situation, and i don't know how tesla holds on to the valuation. >> i doubt any tesla investors, very few, at least, in tesla because they're looking at it purely as automobile stock and looking at it compared to gm or a ford or an audi or a volkswagen. >> that's a problem with it, frankly. it is an auto company. they need infrastructure in terms of dealership and service stations, despite the fact they say they're easy to service. so they need that. and guess what? they're overvalued on any metric. bmw put $35 billion into their manufacturing facilities over the last number of years. ha that dwarfs tesla's investment. you'll see cheaper, efficient cars copping out. we still don't know about tesla's potential recall because of the fires for the undercarriage. >> what do you like. >> holding, folding? >> i have to disagree with my friend mr. weiss there. a lot of strong momentum in the
social media stocks, yelp, facebook, secular trend too strong in 2014. we're seeing a dip now. i think materials space looks very good. talked about on the show, my favorite pick next year fedex, that's the best way to play a global economy. folding them, multinationals, honey welles, ges. >> industrials. >> industrials, rather. oops. someone didn't like that. anyway, did you say something, weiss? i thought they bleeped you out. i was saying, they've got 30% exposure internationally, i'd avoid those names. momentum names, stay long going into 2014. >> josh, you agree with that in terms of holding on. it's hard -- you have to have a strong, let's say, stomach, to hold on to stocks that are already up, what, 200, 300, 400%. >> ordinarilied a like for what hasn't performed well but in this case, solar stocks, i think you really have to take a longer view and look at eight years.
they've underperformed for a long time. and i think they're worth holding into 2014. 2013 was just a wake-up call that this company's legitimate and real, and about to become hugely profitable. there's growth happening here like almost nowhere else in the global economy. i think the trends for solar are so strong that it's worth hold on to these companies, regardless of the fact they've made us a lot of money in 2013. my fold picks, i think that a lot of old school tech companies got the benefit of the doubt this year. i think a rising tide was very helpful for the intels, hewlett-packard and microsofts of the world. i would not be walking into 2014 long the names i'm done think they deserve an at mark multiple. i think they've got enough credit for that. returning cash to shareholders but i think the world wants growth now. that's going to be the new trend and people will ignore these stocks next year, though they've
had a good 2013. >> golden girls aren't going to make a comeback? >> i don't think the golden girls will make a comeback. >> microsoft is bea arthur? what's the metaphor. >> ibm is the sophia. >> yeah. >> i would say microsoft is probably the dorothy. >> dorothy. >> we're going way back here. ciscoclanahan, the southern one. >> you don't like any of them, bottom line. there's not a case to be made to be in a company that pays you a dividend that is stable, that -- >> i don't think they're going to kill you. >> underpinning of financial engineering in terms of buybacks, no case to be made. >> as weights go higher, have we seen the peak in what buybacks are going to be or double down and do a new round? i doubt it, to me, there are more exciting, interesting places to be. i don't think the stocks will kill anyone. i don't see catalysts for cisco
or hp going into next year. >> financials, doc touch on b of a, i think one of the top groups because of steepening yield curve. >> whether hold or fold, we mentioned twitter. after a immediate orric run, the stock pulling down fast, 17% in the past two sessions. our next guest did fold the stock. the senior portfolio manager with turner investments. great to have you with us. >> thanks for having me. >> what point, because twitter is essentially in its own bear market from its high. it's down 24% or so. what point would you say twitter is now a value, it's time to get back? >> i don't think we're that close on a price basis. other opportunities, you mentioned that are better opportunities in the short term and intermediate term and longer term. google and facebook and are better investments than twitter at these price. twitter, not a lot has changed
since ipo. it was a great ipo. company has great opportunities internationally. overall, the opportunities still much greater at facebook and google. >> chris let me ask you about facebook. a market cap larger than disney, which i can't mentally process, quite frankly, nowhere near as profitable, maybe at some point in the future it will be. in the meantime, we're seeing headlines like the story in the guardian this weekend that teens in the united kingdom, for example, have basically left facebook for dead. they wouldn't dream of going on there. is that a legitimate risk, something that can happen in the u.s. and canada, japan, or is that overblown? is it really worth paying $140 billion for the company? >> well, first off -- >> i'm glad i made you laugh. >> you -- yeah, it it was great. we went through a gambit of thing there's. we do like disney quite a bit. yeah, buy disney. two facebook, trading at 20
times ev to ebida. i can hear you fine, can you hear me? >> uh-huh. >> go ahead, chris. >> in the case of facebook, trade agent 20 times ev to ebida. and that's on 2014. growth rate on that ebida is in the 50% range. we have opportunities for facebook to exploit throughout its network, especially internationally. so, if i were to think about a theme for 2014, i would talk about companies that have the opportunity to monetize europe in a better way they did in 2013. europe is certainly bottomed economically. the case that europe is st. louis a couple years behind the u.s., as far as use of social networking, facebook is one of the few companies that offers a critical mass for advertisers. this is an advertising business. 90% of its sales is done through advertising networks. in the case of q4, for example, expectations they're going to grow sales 16% sequentially, up
from 13% expected growth just two months ago. i think they'll upside q4 and upside 2014. 20 times, yes, it's expensive, not a cheap stock. don't care -- none of the stocks are supercheap, not looked at by value buyers. for the growth rate, we like facebook quite a bit. >> got it. thanks for joining us. happy new year. top picks google, facebook, priceline. could you buy any of those stocks? >> disney's kind of interesting. but i do worry about the networks of the stocks that they mentioned because you've got such a competition now for cable, networks, facebook, with google, with all of these companies, not to mention amazon, netflixes. facebook, i'm not a believer of it. >> i agree on the priceline. secular trend is so strong i
can't see it stopping in 2014. >> what did you do with twitter? we were here thursday, twitter at its all-time high, is this the top in twitter. it's down 17%. you might take profits. >> no, i own it at 40, it's crashed to lows of last tuesday, which is cause for concern. but i mean this is a long-term investment. i don't think i have any edge on what the next five points are up or down. >> you're not looking. holding and not looking. >> i hope it gets killed, i'll buy more. i think it's a continue-year investment. >> they haven't monetized. >> the problem is, i mean -- >> they're already monetized. >> we can agree that you can't buy on valuation but the problem, tesla was earlier or facebook, a lot of momentum in the stock, there isn't a big flow. >> i don't think anybody's say short, on this desk, no? >> i've got traders trying to short the stock. i think they'll get their pants burned like tesla. there isn't a large flow. there's a lot of sentiment on
retailers who want to own twitter because of the tweeting. >> i'd be hard pressed to find a manager shorting the stocks on valuation. whenever they've tried it, they've gotten hurt. you have to wait for the second and third break, probably third and fourth. >> get your members-only jackets ready, josh brown. six large cap companies up 400% this year. someone here at this desks one of them in the 2014 play book. major gainers next. an investor says one of the year's top indices in for a rough spell in 2014. what should you hold? what should you fold next year? if you're living with moderate to severe crohn's disease, and it feels like your life revolves around your symptoms, ask your gastroenterologist about humira adalimumab. humira has been proven to work for adults who have tried other medications but still experience
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four trades in four stocks making news today. apple, board recommending shareholders vote against icahn's proposal apple buy back $50 billion in shares. simon? >> there you have it, basically. the big question, do you want to own the stock fundamentally? a big distraction to the company. dividend's gone up 53% since mr. jobs passed away. they're trying to do things structurally with the stock. what are you going to do with the cash? it's a no-brainer not to vote against the dividenden do you want to own it go into 20 sh14?
for us it's a hold. >> josh? >> this could be a really interesting special situation, i love it see a hedge fund get involved here. in june they said they would merge with a competitor based in india, street hated it, stock down 30% since june, which is rare in the market right now. now they just called off the merger and they're talking about returning more of the capital, shareholders, instead. stock is selling times next year's earnings, probably the most hated name you can find. this is the type of situation where, once the dust celts, there might be more options other than the merger out there and maybe the stock's due for a run. i'd keep it on the radar screen and read up on it. >> after $200 million investment from blackstone, the ceo will retire in april. josh? >> yeah, i just i think this is the kind of thing where they've got a trendy business, but it seems to ebb and flow, just like deckers with style and with trends, but in this case they
have a financial backer. there's a preferred issue that's going to put a floor under the stock. and so if they can get growth trends right, if they can get the mix in the new stores, maybe it's got potential. i try not to bet on fashion trends. >> we have the footwearmakers up on the back of this. look at the move in deckers, makes ugg boots, i don't know if you find value in any of the names. >> i like deckers, that was one of my final trades a month ago. sort of the retail space, that's the only type of names i'd be owning. >> i would stick with nike. i think it's probably much more fertile ground, given the world cup coming up, the olympics. >> nike, that's partly footwear, and i agree with you on nike, a great stock. >> world cup, olympics. >> a proper sport. >> you can find value but not fashion anywhere. >> that's strong coming from you, weiss. >> let's move on.
more bad news on target's credit card breach, backtracking after assuring customers pin numbers were safe, weiss. >> that's unfortunate, but the stocks continue to move up once it traded down to around 60 since the news was coming out, including theunforgivable. i own target. i think it's a cheap stock, one of the cheapest retailers where we'll see great growth. when they report sales from christmas over the online sales site. >> forget singles and doubles, a handful of stocks up 400% this year. sheila joins us with the rundown on 2013's extreme gainer. >> extreme winners of 2013. we screened the russell 1,000 for stocks that have 1 billion in market cap and members of the 400% club. solar a big theme, sun power, up 420% this year. also canadian solar, get this, up a whopping 750% this year as
investors rewarded the company for transforming itself from being a solar panelmaker to a power plant. 2013 was, yes, a big year for solar stocks, as companies cut costs, demand grew. but 2014 could be a bit more challenging. second up, biotech, another big theme. biopharmaceuticals, members of the 400% club. a big kidney drug winner account ford the spike. analysts telling me market potential for the drug under estimated to we could see more of a pop in 2014. finally, rounding out the list, telecom and tech name. on the telecom side, next door broadcasting, they did a lot of acquisitions which accounted for the pop. high max a taiwanese display company, under the radar until google glass, the manufacturer for google glass' displays.
2014 is all about whether google glass takes off in the new year. >> thank you, sheila. talk about high max, not a tame we typically talk about, a couple billion dollars in market cap. you like it. >> i like it. that's one of my top picks for 2014. yeah, it's up 400%, all of the reasons she said, momentum's still strong. google, potential catalyst, taking an option and buying 8.5%. going to the ces conference in vegas, it's talking about the wearables and the google glass. a long way to go. josh, a little dig, 400, stocks up 400%, no etfs, josh. >> i don't get it. i saw they mentioned sun power and it was up 400%. >> he's not making a deal with your dig. >> understand, this is a company trading 24 times earnings, projected to grow earnings by more than 30% for each of the next 5 years. backlog is done for 18 months. they couldn't make more if you begged them to. i think that the growth rate of
the stock price is matched by the growth rate of the fundamentals. and that's an important distinction when look at stocks have have come a long way. >> momentum going into 2014. i think -- those are the names, hedge funds are looking at. >> 24 times earnings, buying twitter at 24 times sales. >> i'm talking about stocks that are going higher next year, not based on valuation. i'm talking momentum stock, positive catalyst to go forward and this is going to go higher. talking about solar stocks up 600% going in. we're talking about stocks which hopefully will go higher, have a good theme, good catalyst. >> i don't see the argument, but happy new year. >> tomorrow. >> let's move on. good discussion, guys. big wishes here, russell 2000 up nearly 37%. should you hold small caps into the new year or time to fold? running small caps strategy at bank of america joins us now. time to fold, why? >> i think we've had a great year, total return, small cap up
38.6%. so it's been a fantastic year. and what you've seen is that the absolute p/e of the russell 2000 gone from 15 times fair value, 15 times, to about 19.5 times, very close to all-time high. when you're this high on valuations, performance tends to slip in the next 12 months. so, we've had a great run. the valuations reflect that. and a lot of it has been in valuations. >> so, i'm an investor in the russell 2000, i should be concerned. which sectors are triggering the most overvalued? >> the domestic oriented groups have done well, consumer staples, discretionary, utilities because of the yield play. those are groups that were underweight because they're expensive. looking towards the global cyclicals. one of your guests mentioned europe starting to see an uptick here. so a way to play that is look at industrials, you also have
manufacturing coming back to the u.s., so that works well for the industrial sector, in addition technology has a good play, good -- a lot of overseas exposure. that has -- not done as well as some of the domestically oriented groups. from us, valuations look attractive for tech. >> i agree with a lot of your different themes. one of your themes, you think m & a will increase next year, too. isn't that a scary place for the small caps? people get into small cap increase in m&a activity. that is offputting? >> the problem that is if you look at m&a activity in the past, they coincide with peaks in the market and you have big upticks in m & a but don't see small caps outperform like 2007 and 1999. there are specific areas where you'll see m&a activity pick up like health care, technology, industrials where you're buying into the whole growth theme and
i think one of the guests were talking about large cap pharma companies buying, you know, biotech ideas. that would be a perfect idea that would play into our health care theme and larger companies buying smaller companies, perfect and works well for our overweight on health care. >> steve, going to let you go. thanks yfor your time. guess who's back? dr. j. is back. we had a problem with his satellite. we weren't ignoring him because we wanted to ignore him. small caps? >> small caps, ones that i think that steve identified as some risk, small cap side were utilities because people chased in there for yield. that's where i'd avoid though i'd say southern, which is not a small cap, that's a big cap stock on the utility side. i think they've got a lot rolling forward. i like southern a lot. that's where i'd go on the big cap. small cap, i would heed his advice, stay away from the high
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welcome back to "the halftime report." a winning bet, shares of wynn resorts up more than 15% this month, hitting all-time high today. time to cash in chips? doc, kick it off. >> all right. the number one thing is steve wynn himself because the man's a winner. he's been a winner since he started in vegas. this trend continues. also, they've partnered up with 888 holdings which is online gaming for nevada. that's going to be huge. they already have world series of poker wsop and 888 poker. also, 70% of their income comes
from asia. saying what if the u.s. slows down? china's been slow this year, by all accounts and still 70% of the revenue came from there. any uptick there is going to be huge for wynn going forward. lastly, vips, josh, nobody treats them better than wynn and they continue to flock there. >> josh? >> all of that is true. this is a great company. they've got great casinos, properties, i like the china angle. the problem is you missed the trade. this is already more than discounted all of that great news and all of these great properties. this stock is out of the stratosphere. it's selling for 30 times earnings, only expected to grow revenue next year by 7%, earnings by 4%. i don't know a lot of ininvestors who have gotten rich on street buying companies selling this much on overvaluation on important metrics. i love the stock, i want you to be right i think investors will get a better entry point in the
name, maybe if something happens with a u.s. stock correction. >> but that's always what you and i both say, about stocks. i'd love it 15 lower. i'm not getting that chance today. >> what's the catalyst to justify the valuation at this point? one of the things you said, if there's uptick in china, that will make a big difference but that's not a big catalyst for 2014. >> why not? they haved that foot on the brake. >> unless you're saying china's coming back big. >> i do think so. online gaming, online gaming, this is going to be huge for these guys. >> this is news that's well known. >> not priced in, josh. >> why not? >> what do you mean why not? just started. online gaming started innier je in the past month. starting in nevada now. this is in its infancy. >> simon? >> i've got to go with josh. i said i wanted to avoid multinational globals and 71%
revenue, over in asia would scare the living daylights, i'd avoid it. >> i'd stay away. china's going the other way. it's a house of cards, seeing credit implode. japan in the stock price, that's five years out. >> if five years. we want to know who you thought won the debate. >> i like when you weigh in on my side. >> i'm not weighing in. >> keep doing it. >> #bull or #bear. the u.s. was the place to in vest this year, but will 2014 tell a different story? we'll talk to someone who says it is time to look across the pond and add risk. find out why stephen weiss got a free ticket to the west coast and simon baker's paying. and ah,
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jpmorgan funds which has $400 billion under management. if you believe in europe, do you have to believe that china is at least stable? >> i think the china story is probably in the a hard landing. having said that, we are starting to see some stabilization that won't lead, in my eyes, to faster economic growth. european story's about europe. it's about europe coming from a recession to acceleration of growth, won't be more than 1%, but for the small caps, mid cap names driven by europe, they'll probably see pickup. >> you want domestic, european companies as opposed to exporters? >> exactly. >> josh, you're in the small caps, european small caps. >> i just, when you -- when you compare and contrast small caps of europe to the united states, for two years now we've been playing this u.s. is the best house in a bad neighborhood game and that's fine, but now they're selling for 20 times earnings, where do you see opportunity in europe specifically with small caps? do you have to be country-specific or is the
continent cheap enough? >> great question. europe's a big place. i think southern europe looks more appealing especially countries like spain, that are implementing big reforms. they're painful now but they'll pay dividends later on. owning names that are going to benefit from a pickup, even if it's a pickup of no growth to a little bit of growth in places like spain -- >> buy italy for like a ten sicklily adjusted p/e. >> the at country level, italy, in my eyes might not be the best place to be, remind me of france, moving in that direction. spain is starting to behave like a european country and implementing pay now to pay dividend. >> the cross section of where you see value. you like southern europe, spain specifically, ones that are s p small cap, domestically oriented. give us sectors in the countries. >> sure. i think retail names look appealing. they got beaned down
unemployment under 25, we're 50 in spain, that's going to affect retail. industrial names are going to benefit from two recessions, not one. some pent-up demand in europe and should help industrial names. >> building, cap x spending. >> exactly. >> what are names you like in the u.s.? >> i think, even though small cap and mid cap have done well, especially small cap, it's a u.s. recovery, again going back to what you're saying, it's not emerging markets leading wait when it comes to economic growth. valuations are no longer as appealing as they used to, i think there is pent-up demand, m&a -- >> like the financials sectors? >> financials and industrials are my favorite. they were this year. but going into next year, nothing has changed, still the same story of economic recovery that took a while to happen but now it's happening. >> you're not taking risk off in the u.s. at all? >> relative terms, we are more geared to look at europe than the u.s. but versus the other regions of the world, u.s. is
overweight. >> what are you teselling in u.? >> defenses, utilities, yes, they didn't perform compared to some of the industrials and financials, but they're still up in double digits, right? if we believe rates are going to continue to rise, which we do, i still think those sectors won't perform as well as the interest rate rate sensitives. >> top sector in the top market, if you had to say your favorite place in the whole world, regardless of geography and size, et cetera, what would it be? >> what sector? >> yes. >> i think machineries, if you go one level deeper. goes back to pent-up demand that we've seen, not only in the u.s. but the developed world, and we're seeing europe, japan, u.s. picking up growth. >> plumultinational machinery companies. >> as well as mid caps. >> great to have you with us. happy new year. >> happy new year. >> "pops & drops."
pop for walt disney, up 2%. >> upgraded to buy at guggenheim. stock's not that cheap, but it is the classic stock for that group. that's why it's moving. could go higher 2014. >> pop to move 1%. >> nothing exciting with this stock but the sector's been doing very well. seagates a stock we own long in 2014. nice to see it going higher. >> key mobile, a big pop, 17%, the move, doc? >> yeah. and melissa, as you know, underpressure, muddy waters, everybody else all over this one. as it breaks down, all of a sunday, morgan stanley discloses 5.2% stake, stock zooms on that and hasn't stopped yet. a lot of a short squeeze going and it could continue for a couple of days. >> pop for whole foods up 2%. josh brown? >> i like whole foods the business. they've got a lot going for them, much higher margins than costco and walmart, better growth, opening 40 stores a year. but i think the street's already
priced all of that in. selling for 39 times earnings. just like wynn resorts, i've got to wait for some pullback before i pull the trigger on a long position. >> drop for the hotel mini bar. so long, solitary snacks, survey by the website tripadvisor.com found hotel mini bars the least popular amenity for u.s. travelers and may be headed for extinction. restocking costs, disputes over bills and a general trend of socializing in the lobby, not to mention potato chips are $10. pricing is ridiculous. >> simon does make us for the rest of us in terms of raiding mini bar. >> i have friends in the lobby. you're sitting with the mini bars. >> you guys are so mean to each other, it's amazing. so bad, they're good. coal stocks among the worst performers in 2013. they will energize your portfolio next year, he'll explain why and how to trade it. higher than this price today
by the end of the year, i'll get you a first-class ticket to california and back. >> round trip, too. how did that work out for simon? california in first class, trading airlines, next. [ male announcer ] once, there was a man who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection.
money. "halftime report," more of them, 400% club, of course. retailers that went big this season outperform in january. so we're tell you which stocks are on that list. our series, game changers. innovations that will change the way we live in the next five years. today, it's protecting your online identity. back to melissa and the halftime team. >> not so fast, simon baker. our traders are quick but not always right. august, simon made a barrick call on delta. >> if delta's higher by the owned of the year, i'll get you a first class ticket to california and back. >> it's not california, baby. >> i think that was a no. >> since that call, the stock has rallied nearly 40%. so, simon, what say you? >> well, really smart editing going on. >> oh!
>> the clip where they said that, it was not edited. >> i know. >> it was in its entirety. >> i'm teasing. tip my hat to mr. weiss. it is higher. i have a great red eye flight back to california any knight you want. the stock's done nothing since october. it's down 6% month to date. i think -- >> just concede. >> i made a mistake. weiss is a better investor. >> i tip my hat. the red eye flight. >> two connects. >> two connections. via puerto rico will be on your desk tomorrow. >> stephen weiss? >> facts speak for themselves. what it shows, not only are the traders not always right, they're not always quick, either. that took ten minutes to excuse himself. >> what do you do with delta at this point? >> i like the airlines. >> airlines have been great stocks. >> it's still a small sector, by the market, so plenty of room to go higher, number one.
>> why, i don't get that logic? they're a small percentage of the market cap. >> stocks are a commodity like anything else. if you want to get exposed, there only a few stocks to play. i believe ininvestors want exposure because there's enough naysayers, including warren buffett, the sector's not for real. you fly you know it's for real. you're getting charged for everything and not getting free tickets. >> it's not even etf out there. that's how unpopular the stocks have become. they closed etf. you only have four, five legitimate options if you're a large money manager. there just aren't a stock market littered with airlines. >> listen, it's 2013 trade. it was a good trade. it's not a 2014 trade. >> absolutely is. still cheap stocks. >> josh, what do you say, 2014 trade or no. >> i'm on the fence. i want to see more. >> doc, quickly, top airline pick? >> save, spirit air, love that
one. although i fly american everyweek, and love them, too. >> they charge you unless you go to the airport and print your tick. they charge you to breathe. what are you going to do about it. >> i asked if -- >> it was tried, didn't like it. >> all i can say is fly virgin. >> all right. >> whatever. >> begging for a free meal or something. that's shameless. >> a bar on there, which is great. virgin america, great, girls are quite pretty. >> from high sectors, high flyers to sectors grounded, investors are dumped coal -- i can't believe you cited pretty girls -- many utilities switch to cleaner and cheaper natural gas, our next guest says coal stocks could be a diamond in the rough. larry mcdonald joins us live from new york city. i meal like whenever there's an election, there's a notion coal
stocks would come back in faber. why is it different? >> since 2012 election the coal names are down 30% after president was re-elected. one interesting thing, i was on the show in late november, i mentioned bonds outperforming the equity. now it up 20%. i'm seeing the same with btu, credits outperforming equity. bond are well bid. natural gas, lng exports, a big political issue next year. republicans in meetings that we've had behind the scenes with senior republican officials, when my partner, we're hearing that republicans are going to use energy to force democrats to the middle heading toward the midterm elections in november. that i think, softens some of the negative vibes towards coal. >> larry, it's steve, how are you? >> steve. >> great call, by the way. let's talk about coal for a
second. i'm not as positive on china as other people are. if china continues to experience tighter credit, don't you think that will hurt the coal stocks, infrastructure stocks like steel? >> china's a big question mark but if you think about it, steve, question mark. the spread between where european -- europe is in the dark ages in terms of shale. so the spread between u.s. natural gas and european natural gas you can drive a truck through it. you have these lng export locations being built around the united states and you'll see natural gas being the next port which will drive up. natural gas is pricing in this higher natural grass price for 2014. that increases the competitive pricing power for coal and i think that's the biggest issue in terms of positives. >> if the rules around lng exporting don't loosen up so
it's conducive towards that industry does that mean coal is less attractive? >> the negatives around natural gas for coal have been all priced in. when natural gas is down 80% since 2007, so the negatives have been priced in. natural gas is break out. i think a lot of the negatives in terms of natural gas killing coal have been priced in. you could have a very substantial positive move in coal in the first quarter. not just on tax loss selling like we have been talking about but this natural gas price surge. >> larry, happy new year. larry mcdonald of newedge. would you guys invest in gas or coal? >> i think i would. it's speculative. but a little bit where solar was. it's an uncrowded space. it's unpopular. kol is an etf in that space.
>> the key to playing these and these are playable, i feel the same way with coal stocks when go with companies with the best balanced sheets. they may not have the best upside but if you're wrong and things get worse you have less down side than the overall sector. i would err on the side of quality which if you really want to do this trade. >> steel has done so well. just for a trade but we're not going to be any better off -- >> if you're betting on it for steel you want to go net coal as opposed to thermal. >> absolutely. i would go btu. >> not a falling knife tipped with poison. >> regular sharp edge. >> right. >> all right. >> speaking of 2014 playbooks, we want to remind you with portfolios with purpose. it's a stock competition. you can play as well. the deadline to sign up is
tomorrow. check it out, portfoliowithpurpose.org. it's as simple as this. at bny mellon, our business is investments. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon. ask me what it's like
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problems with dr. j. let's go to some tweets. dr. j can you hear me the tweets. micron, stephen weiss, buy or hold? >> everybody is waited with bated breath. it will take a while for capacity to come back on. the stock will continue to play in the first quarter, maybe first half of 2014. >> all right. dr. j, can you hear me now? >> i can. >> the mining sector. >> rio tinto. up above the call. >> final trades up next.
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