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tv   Fast Money Halftime Report  CNBC  October 21, 2021 12:00pm-1:00pm EDT

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and i wondered how much news they'll be holding back for that analyst day. >> and lots of earnings on deck, as well. julia, i know you'll be watching snap later tonight and we'll be huge in terms of the big tech players. nasdaq, the only major index in the black right now up a quarter of 1%. that will do it for tech check, let's get over to the half ♪ ♪ thanks so much welcome to "the halftime report." i'm scott wapner front and center this hour, the one question that matters most for your money are we poised for a big end of year rally we're all thinking about it. we'll ask several of the world's top investors that very day today. ricky sandler, keith meister, nancy davis and mario gabelli, all joining us exclusively this hour along, of course, with the investment committee let's begin with the check on stocks right around record highs.
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35494 is where the dow is. a loss of a third of one percent and the nasdaq is positive today. we always check yields on the ten-year and we're at 166 so we're creeping up a bit on yields this week let's welcome our first headliner of the day and he is ricky sandler, the ceo and cio of eminence capital. welcome back it's good to see you again >> good to see you, too, scott i can't see you. >> i can see you i hope you can hear me. >> i can hear you. >> hopefully we'll get to figure this out you were last with us in march, okay >> yeah. >> you told us then you weren't as bullish as you were the prior year you said clearly some parts of the market are extended and overvalued and you are seeing some signs of behavior that are less healthy as i said entering the segment, we are basically at record highs. how do you see the market today? >> well, i see the market as still constructive from a high level. i think when you -- when you
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look at where interest rates are, when you look at negative real interest rates that are close to 1%, an economy that still looks generally healthy broadly, it's hard to be too negative i'd say we are still slightly leaning constructively and slightly longer than average, but not exuberant. i think below the surface you will start to see a lot more dispersion where later in the cycle and later in the economic cycle you're starting to see a lot more earnings-related pressure starting to build and the fiscal cliff is coming. so i think consumer-related pressures particularly at the low end are going to start to build. you will start to see a lot more pressures in the margins so up and down the p & l and wage pressures and supply chain pressures and pressures on materials costs and tax rates will go up next year you certainly have a biden
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administration that seems to be a lot less business friendly we think there will be more dispersion and maybe the market grinds higher here, but maybe a good environment for stock pickers. >> it's interesting. i have your newest letter right in front of me it's dated from yesterday and you list a lot of the risks that you just laid out for all of our viewers, but you do counter those with a number of positives. you've got still the cheap cost of capital we still have to fully re-open, the consumer is very strong and companies have pricing power and there's still a lot of cheap businesses out there my question to you is do all of those positives carry enough weight to outweigh the risks >> you know, i think at a broad level, i think they do, and maybe just moderately. and so i think that's why we still have a slightly above average exposure, and i wouldn't be sort of ringing alarm bells that i want to kind of jump off the train and get negative on stocks here.
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when i look at negative real interest rates of negative one, if you look at inflation expectations at the ten-year level, they're 2.6% and we have a 10-year bond at 1.66 at a five-year level they're 2.8% so you get negative returns to invest in bonds. why not invest in companies that offer you pricing power and reasonable earnings yields so i think stocks are still kind of the place to be, but as i said, you have to be more selective and there will be earnings-related pressures, and we have a number of risks as i laid out before. >> so if inflation is a principal risk and i'm sure you heard what paul tudor jones had to say yesterday carl icahn the other day, talked a lot about the inflationary pressures that are out there you say in your letter, you're expecting more volatility, but not a dramatic decline
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so are you less worried about the inflation issue as some of the others that you heard this week >> no. i'm very worried about the inflation picture, and i think we are dealing with it in a couple of ways and one is narrowing the list of companies that we own and making sure we own good businesses and businesses that were priced for the inflation and where we think they'll be able to pass their costs on and they don't have inflationary pressures in their business and then we're short some businesses where we think they may not have these same benefits and we are short some fixed income in the treasury market as a natural hedge against where i think stocks are valued off of the risk-free rate here >> can we do some stock picking in the abbreviated time that we have i see number one on your list is ashland global i don't know if it's ranked by
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your largest positions to the smallest is that one of your largest positions? >> it is one of our largest positions. can you tell me why it's attractive to you? >> so ashland global has been in the midst of a transformation under a new ceo, guillermo novo and it is in the specialties business and a very attractive part of the medical specialties business and these are low-cost products that go into life sciences and consumer products that give these products their properties whether it's binding properties or color, taste, smell and he has just announced, recently the sale of one major business and been investing more in the growth areas of this sector and more on the consumer products part and the life sciences part of the business. we think it's an incredibly attractive business that should grow mid-single digits with
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margin expansion it trades at about ten times ebitda here where peers trade 15 to 20 times and i think it would be attractive to strategic partners we have a capable leader with non-cyclical growth at very attractive prices. >> midway through the list of say your top ten holdings. what jumps out to me is auto dealer basket, as you call it. asbury auto, group one, autonation we know what's happened with auto sales over the last 18 months or so and is that to play in that industry >> yes i mentioned this when i was on your show back in march. we own a group of them and none of them are particularly large capped and they're mostly service centers where about 70%
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of the profits come from the service of your car which will never be disrupted and that has secular tailwinds and the cars get more complex as people come back to the dealers more as they offer service brands and they want to protect it more, so that's a business that grows 5%, 6%, 7% and these are stocks that trade at six or seven times earnings and really cheap stocks and they're slicely over earning based on the shortage of cars right now, and so as that normalizes, they're still very, very cheap stocks, and i think people perceive these to be low-margin businesses that could get disrupted by, you know, the internet and they're really franchise businesses and local
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monopolies that service it and we think are misperceived businesses and are proven that and the downturn has been very resilient businesses and have good secular growth at very attractive prices. >> let's squeeze in a couple more if we could new relic i have as number two on my list and i don't think we talked about it before >> i think new relic is probably one of my most fife favorite ideas and it is a software business that is in the application performance monitoring and observeability business and this is software that monitors the infrastructure of an enterprise as every enterprise moves more of its business to digital infrastructure, just make sure that its infrastructure is running and allows you to observe it as more of this infrastructure is critical, as customers are paying its infrastructure, it's sales
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oriented and e-commerce oriented and the observablity space is one that is growing. so historically, maybe 10% or 20% of your infrastructure, you monitored that is continuing to growand so this big secular growth and data dog is the leader in the space or at least the perceived leader it used to be the perceived leader and i'd say fell behind several years ago on some product features we think they've caught up about two years ago and released a new product set and more recently, released a new go to market strategy where there are more pricing their product on the usage basis rather than a perceived basis and that is causing noise in the numbers and so the growth rate of both of those things caused the growth rate to slow down from the mid-30s to low double digits at about 9%, two quarters ago and it just started to accelerate and we think they will be
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re-accelerating back to 20+ percent growth as we exit this year into next year. it trades at five times revenue kwom compared to peers that trade at five times revenue and this is something we observed more broadly and there is basically winner/loser and the winner can trade at 50 times revenue and the loser can trade five times revenue and the truth is somewhere in the middle and it's actually found its way and we expect the results as the they report them over the next several quarters to prove that this is far from a troubled company. in fact, it's -- it's caught up to its competitors from a technology standpoint and so there is a significant re-reading to triple where it's at today >> we'll talk to you again >> congratulations on the show and thanks for having me on.
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>> ricky sandler of eminence now let's go to keith meister. it's good to see you welcome back >> hi, scott thanks for having me >> you were here in august where you said i don't think i'm as bullish today because the taper is coming. it's closer. it's getting ever closer does that mean you're less bullish today? >> i think when we chatted in august we were constructive on risk assets and it's hard to be bearish. there's so much liquidity in the system and the risk is does inflation come and we were long stocks and our hedge was long commodities and short rates. i think we're in the same position today that we were several months ago the markets continued to go up and we're getting closer to taper and we're getting closer to the 2022 fiscal cliff, but the -- the core economy is doing really, really well and the debate everyone wants to have on your network is inflation. >> it sure is. >> and the discussion is very binary it either is or it's transitory
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or pernicious or it's persistent and my guess is that's a question of definition, meaning over the next 12 months my guess is there will be a lot of false positives where inflation does feel like it's more persistent we're seeing it today and whether it ends up being persistent or not, you know, i don't think anyone actually knows today. >> my guess is it doesn't because of technology and demographics being very, very deflationary and a lot of the things that are happening in 2021 being one time and those burning off in 2022, but we'll see, but in this environment ricky said it really well. inflation is not bad for all stocks it's bad for a handful it's a lot worse for a handful of stocks. it's worse for stocks that don't have moats and don't have pricing power. so we want to own businesses that are high-quality businesses where they have a product where
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they can pass on price even if there's inflation. do i want to buy the s&p at free cash flow yield or the ten-year bond at a 1.67% yield. i know that my s&p companies if you look at the biggest s&p companies, the top four companies make up 20% of the index. >> right >> the amazon, the apples and the facebook they'll grow earnings at 15% to 20% for the next five years. do i want to own that and have a positive real return or do i want to buy bonds to make a 1.6% return where we have real inflation and guarantee i lose cap it will. it seems the obvious trade is to own eec us on quality. >> i do see a new position and i'm not sure if weave talked about it, and people been it,
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five nine >> this is new and a great example of taking advantage to buy an amazing business at an attractive price so back in july five9 agreed to be acquired by noon in an all-stock deal they were selling the company for $210 a share since they announce tad deal they reported second quarter numbers and filed a plan in a proxy. the core numbers are great and the business has grown just under 40% and they provided ten-year guidance of being a long term, 30plus percent top line grower with gross margins going to 75% this is a content center software business. there's 19 million content center agents globally and only 10% are in the crowd today one of the things that covid had was more distributive forces and more to engage their clients and contacts in the business from
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five9 went from being a 25% structural grower from pre-covid to being a 25% grower post-covid one plus one equals two merger with zoom to become a dominant, unified community. then there was a hiccup. it's become a verb and its had amazing growth because of covid. >> sure. it went from 400 million revenue and some of the early mid-sized, and the zoom stock went down 25-ish percent from the time the deal was signed prior to the shareholder vote so what happened was five9 shareholders woke up and thought they were selling the business at $210 a share, and by time it got to vote it was $140, $150. both sides did the responsible thing and glass lewis came out
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and didn't support the deal. i think investors were pretty clear to the five9 management team who did the courageous thing and walked away and said this may have been a good deal in a different world, we need a dirpt path forward they mutually agreed to terminate the deal on september 30th we bought a lot of five9 stock we got to buy a great business at a dislocated price and five9 will report earnings on november 8th and they'll have an analyst on november 18th and i'm not sure if earnings will be better than expected, but i do know by november 18th when they've said here is our five-year plan and this is a great business with 30+ percent growth with pricing power and trading at a very much discounted value because of the noise of the zoom merger so we took advantage, and i think we're getting into a market where finding and reducing opportunities will be
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better than just making a macro call >> let me ask you. let's try to make some news, if i could before i let you run >> you're on the board of mgm, and you're a shareholder, so i understand you may be restricted somewhat on what you can say and i'll push you anyway, and you're smiling and blushing because you know what's coming do you expect draft kings to formally make an offer because they just got an extension >> so i'm going to be careful what i say based on your buildup and i don't know what will happen whether draft kings and will hopefully get to the finish line on the transaction or not and ultimately that will be determined by the draft kings and the entertain board. >> what mgm has said publicly is we think the bet mgm business is doing amazingly well and we want to own more of that business and not less of that business. any transaction between
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draftkings and entain will acquire mgm's consent. i think they know that we're not going to stand in the way if we can, you know, achieve our objective about more of mgm, we're not going to be the reason why entain and draft kings does or doesn't do and that's up to their bores. >> whether it happens, while is this being -- has sports betting and i-gaming has taken off in this country and i commend the mgm team and entain for setting up this business that's been massively well positioned to take advantage of it this was a business that did not exist two years ago. you know, goldman sachs put out a report last week saying sports betting and i-gaming in 2033 will be a $50 billion game
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as mgm said we expect to have 20% plus market share. today in the states where we do business we have a 24% market share through august and entain put out that data last week. the september data for pennsylvania, michigan, new jersey shows that the market share has gone up. we are making 35% market share in high gaming in those dates in september data that's public so to say that we're going to have a 20% market share is not a stretch. that's what the analyst team put out. so a $50 billion market. that's a $10 million revenue stream we bet being long term with 30+ percent margin business and this is a profit pool that didn't exist for mgm 18 months ago and mgm owns half this business today and we'd love to own more and even owning half, we're
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really, really well positioned and we can afford to be patient and help, you know, drive growth at mgm and the last point we'll make about this is the vision of an omni channel experience is what's working and the ability to market with the almost 30 million people in the mgm database if you go online and bet, you can win points for bellagio and go to the lady gaga concert. all of that would have ultimately say, it can help position mgm is sort of this global, online and offline gaming company very much sort of what like business is doing in media, mgm can do in the global gaming world both online and offline. i do believe the omni channel offering will be a great differentiator. >> you gave me more than i expected and i'm sure our viewers know that. >> thanks. >> still ahead, our investment
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committee are here with quadratic capital's nancy davis along with mario gabelli he will join us as well and the legendary sport announcer al llchaels is back with us, as we we're back in two minutes. esg is responsible investing. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes. join the pursuit of outperformance at pgim. the investment management business of prudential.
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co-founder of market and nancy davis will tell us her best idea in the market as well it's nice to see you, nancy. thank you for being a part of this, as well. jim lebenthal, let's just react to what we just heard from misters m misters meister and sandler, yes, there are risks and it's hard to be overly negative given where real rates are i think that's the headline. >> i think that's exactly right. what i heard from them and it helped me crystallize something in my mind and i've been saying for quite some time that we are early in an economic expansion and frankly, scott, we may be moving into the mid-cycle of the economic expansion that's not necessarily a bad thing. it's just acknowledging this it's been a year and a half since the recession. if i ask myself as i do what can keep this going? i do think the fed is a non-issue right now. i think what comes out of congress over the next month or so is really what will tell us if this early economic phase continues or if we get into more of a mid-cycle because if you
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get that bipartisan infrastructure deal that's enough to kind of juice earnings, juice economic activity and revenue throughout 2022 i don't know what the reconciliation bill is going to do, but there's at least talk of taxes and maybe not even being existent and maybe not even being raised, that is all of which would be positive of extending this economic cycle. i want to be super careful, all right? relying on congress is not a good investment strategy all i'm talking about here is whether the early phase of this economic expansion continues or if we mature into something that's more mid-cycle which will still be good for stocks, but will willes in estate far more from stocking picking >> nancy davis, i will say one of the best when it comes to volatility and an expert in that area, understanding how markets react to various situations. how do you see things today
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relative to what you've heard from some of the biggest and smartest investors around? >> well, the volatility market is agreeing with all of the market commentary from the cio panel as well as other guests. the market is saying things are very good, the ball is very low across all asset classes and markets are very calm. the question is whether markets are right and whether there's more turbulence coming and it's not priced in right now to volatility markets and the volatility markets are very, very complacent about the future. >> what draws me from the way that you see things at quadratic is you have an etf and you call the ivol, i-v-o-l- and now you have a new etf that's betting on deflation. does that mean that your own personal view has changed? >> no. i do think inflation is
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something that all investors should have in their portfolio it's not really something that i think people should take a bet on whether it's transitory or not, we do live in a real world and i think inflation protection is an important component in investors' portfolio and ivol is a treasury, and another measure of inflation beyond the consumer price index. that is a policy mistake, deflationary fund in case the fed right now, right now there are five heights that are priced into the front end of the yield curve, so five hikes before the year end 2023. i personally think if the fed hikes five times or more that will likely topple the real economy into a low growth deflationary environment so the vndd fund is for investors who think it's
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transitory that low growth will happen and it's contrarian right now because most of the market expects there to be a lot of growth and ivol is really of treasury plus inflation-protected funds so it acts as another measure of inflation beyond just cpi. >> interesting josh brown, how do you see things relative to what you heard in the program already >> i think there's a lot of talk about inflation as though it's a negative thing, but the fed has spent the last ten years telling us they were literally trying to bring inflation about. now we have it and we don't like the reason for it. it involves supply shocks and things that really were a long time coming beneath the surface even before the pandemic so i'm not really listening to most of the hysterical commentary i think the smartest person going on right now is jeff curry. the idea that covid was really
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an accelerator the reality is capital returns on anything commodity-related whether it's oil, gas, fracing, mining were horrific for 15 years sense 2007 and 2008, capital returns in that sector led to lower investment and we're just not investing there anymore, and now all of a sudden, you see stock prices rising for copper stocks, for gas stocks, for oil stocks and you talked to the ceos of these companies, why aren't you drilling more and they're saying points-blank, how about i just let my stock price go up a little bit i don't get rewarded for adding capacity i get rewarded for my stock price rising and for my cash flow growing that's why they're not in a rush to come in and add capacity with all of these constraints we have and that psychology could persist for a while before they bite the bullet and say all right, let's add some capacity now so i think they're obsessed
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with the share prices and they should be. this sector, the energy sector shrunk to less than 2% of the s&p and 25 years ago it was 20% so those stocks are going to rise supply will be constrained nobody is rushing into the rescue and max pain might be a few months from now and we might not be in it yet, but you have to be able to see through that and to recognize that globally somebody is going to -- it won't be an esg fund, but somebody will come in with the money to add capacity and take advantage of these shortages you have to be smart enough to know that that's how these things always end. so i would not be loading up a portfolio with catastrophic inflation insurance just yet historically, a moderate amount of inflation has been good hopefully that's what we'll eventually get back to and the best inflation hedge in existence or the stocks themselves, reits as well and if you're worried about deflation,
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that's what treasury bonds are for. >> dr. j, i'd love to hear your reaction about what nancey had o say about volatility and it is not showing up in any way as you know in the market you track as closely as anybody, too. >> nancy, as usual, is spot on we are back down to the 13th of august lows for volatility, scott and the vix is down around 15, 20 or something like that. what vols get this low that's when pete and i are putting option spreads and getting out of stocks, quite frankly, and i have been doing that it doesn't mean we're getting short. it just means that the odds favor us being in those cheaper option spreads when the vol is in the other direction which happens very quickly, of course and we go into the 20s and the mid to high 20s very quickly after we've hit lows like this
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if that happens again on this cycle, we will do the same as we always do. we would be buying stocks because there's blood in the streets and selling that pumped-up vol. it's constantly getting us to shift back and forth and i think you take advantage of what the market gives you as far as over confidence or as far as fears. right now as nancy said it's either over confidence or sanguine about what's going on and usually we get disrupted by something and they've been running headlines all day about inflation and so forth and perhaps it's that, but it could be something else, scott >> you used the word sanguine and it's what i'm thinking about in the way that things have calmed down, brenda. we do have a relatively sanguine environment. we're sitting at new highs and all these risks that people are coming up all week and elsewhere on the network and talking about. how do you parse it all out? >> i think we have to take a look at the earnings backdrop
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and here and now we have two strong earnings quarter that were phenomenally better than expected and so far, third-quarter earnings are better than expected, too, and we still haven't heard from a lot of companies with supply chains because those we have heard from it sounds like more manageable than people thought it might be coming into this quarter. that's the backdrop of solid fundamentals also, of course, the interest rate environment that everyone talked about leaves little option for money to move elsewhere and i'll piggy back on josh's comment because i think that one of the bigger risks in our view is that part of the inflation story and that is the commodity price inflation stare is likely going to be more persistent than we'd like it to be because as much as we might see companies finally step up and start producing more or the same because of the esg influence and the world shifting energy, there is a huge disincentive for dumps to invest
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in more production of fossil fuels and we are seeing it trickle down in commodity complex and we think that is a risk that we could see more persistent, high prices and that impacts a lot of things and not just commodities and their inputs for a lot of different things and we think that could be a more persistent area of inflation that can end up leading the consumer. >> nancy davis, leave me with a quick thought fuld, a last word and is the risk more to the upside or down side for the stock market right now >> i think looking at the commodity prices they've already moved higher and commodities i 1980s and 1970s inflation and the shock that's happening right now and i think the rates market is a more simplistic way
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ofation, and the '70s, and the laptop and i'm enjoying this conversation with you on, it's cheaper, easier, and the u.s. is energy independent, so i would caution investors to just look outside of the commodity market, and look at other measures, think about what's going to happen in the future, not what happened in the past >> thank you so much for being a part of our special week it's been good talking to you. we'll see you soon. >> congratulations on ten years. >> that's nancy davis, mario gabelli, he's up next with his best ideas in this market. california has committed to cutting greenhouse gas emissions by 40% by 2030, and becoming carbon neutral by 2045 in order to reach those goals, southern california edison estimates that 50% of
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we are joined by super investor mario gabelli >> good to be on with you and the team. >> what do you think of the markets? i haven't seen you in a while so i'm interested in your view. >> we basically look at stocks with the microscope and look at the earnings, but we also talk to managements and for the first time in probably the 1970s i hear individuals that run companies saying that we're able to get a price increase much easier than we thought all we want to know is can we supply and you're seeing inventories bid up and so from that point of view of revenues, the real growth, plus nominal increases you're seeing significant revenues and the
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gross margin maintenance in dollars and some erosion and that will be taken care of and it depends on accounting and some other dynamics. and also some companies anticipated what they're going to need in supply and so they bought and hedged. those are running off and they have price increases and it's not rising as much as revenues and there's an increase in pre-tax profits and them the question you have to ask is both taxes are going up and cash taxes are going up independent of what's going to happen with the tax rate as an example, i bought equipment in 19 -- in 2016 i'm writing it off slowly and that gives me a tax deduction. after 2018 i get a 100% write-off. from the stock market's point of view, the big kahuna for me is what's the multiple and i'm in the camp that expects inflation to continue and as a result of that, rates go up and over the next five or ten years you'll have a fairly significant
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headwind on the multiple >> okay. so you expect the multiple just like paul tudor jones, if that happens and rates go up significant, the multiple on the s&p needs to come up significantly for 16, 17 times he was talking about that. >> i don't have a number i'm sure he's done more quant work bottoms up than i would do and we're looking at company specifics and we're saying do they have pricing power. how do i preserve my client's wealth and how do i preserve in an inflationary environment and management, management has gone through this in the 1970s. they understand inflation. which companies have accounting? what's the difference? so that's the benefit of taking cost accounting 60 years ago or whatever. >> i know you like genuine parts and you mentioned it out of the auto space and let me talk about a couple of companies and i know how tight you are on time. >> i'll be quick. >> i think it's interesting how
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you've been adding to some of your positions in the market msg and i don't know if you were at the garden last night, mario. that game was double overtime. take a category, scott and it's financial engineering and madison square garden has been up and they did a lot. the stock's 185. we think jimmy sold it somewhere in the next year and a half to 250 and tune in for games like that and don't ignore the other ones >> the braves. the braves >> this is a baseball. the atlanta braves are public. you can buy the shares in the tracking stock and i believe malone and mafey will sell in the next 20 years, and they control the vote my clients and others think they could be unwound and you'll get a $45 stock, and they own the franchises so i like that in part and
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you'll see more betting on sports and they'll benefit on that over time and there are some leg effects to the way they're structured, but that should be positive >> the stock's moving higher >> so in the beginning of the week i spoke with carl icahn and we talked about southwest gas and you've been a shareholder for 30 years he's obviously made that clear who's right? do you want to deal with the pipeline or not? >> they're both right. >> are you switzerland now >> i can solve, you know, taiwan, china next independent of that, the stock has 60 million shares, the stock is 70 with 4.2 billion they own a business that will own the infrastructure spending and i want them not to spin it off, i want them to sell a portion in the market and take that cash and use that to buy quest star so when pro forma and i do the math and i run the
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models including call, but also, john, and i'll be there two weeks with visiting with them, basically, what you see is a company with $4.5 billion in debt and about a 1.4 billion in the utility business and they own 80%, and a very attractive business in the construction business carl is right. he will basically kind of get them to focus on how to do financial engineering. he's already on the board of first energy and he also had gambling casinos in las vegas and he knows that quite well on the other side of the coin the manage am could buy this company and finance it better than what they're thinking of doing which is selling stock which makes no sense >> so you think a transaction may happen just not in the form that it originally seemed to be suggested, is that fair? and you'll be the peacemaker between carl and the ceo >> no. the point is that if i was doing
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this in beijing i would have a problem, but i'm doing it in the united states where the free market, the rule of law and carl icahn -- you have to have individuals like that focusing on companies so that we can, you know, have a point of view now some of his style may be different from what i would do >> we'll talk to you soon. i appreciate you being with us >> i have a bunch -- i'll do it quickly, $11, you'll double your money. televisa is $12. you have the latino market, latinx market and the case of new holland at 17 and it will go to 25 over the next couple of years. thank you. >> our producers will tweet those out to make sure everyone got those and the tickers. mario, always appreciate it. >> ten years from now, scott, on the next 20 years the dow will be 80,000 which is a 7.2% kegger >> you've made people very
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happyth issing that. >> mario, thank you. >> as we celebrate halftime's 10-year anniversary we'll be joined by one of our longtime frndanies d one of them is the famed sport announcer al michaels and he will join us next if you're 55 and up, t-mobile has plans built just for you whether you need a single line or lines for family members, you'll get great value on america's most reliable 5g network. like 2 lines of unlimited for just $27.50 a line. that's our everyday price. plus, our plans always come with unlimited talk, text and data included.
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♪ ♪ ♪ hall of fame sports broadcaster, friend of this program which we are which we al for, mr. al michaels good to see you, buddy great to see you as part of this >> you guys, this is the best show on television my best to you, to josh, to farmer jim, to the brothers, to shannon, to everybody. i want you to know that even when i'm playing golf, you're streaming in my back pocket. >> you're a good man, and it's mutual, believe me how are you feeling about the market these days? good or nervous? >> pretty good after a little bit of a, you know, mini meltdown a couple of weeks ago, we're right back. and every time you have me on the show, i put the kibosh on
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the market, but i'm sure it will be on tomorrow i see good things ahead. i don't see inflation being that big of a problem, though some people obviously do. i basically listen to you guys for all the advice that i need >> i know you listen to josh a lot. do you have a specific question for him? there was some news in kkr recently >> yep they set up a perfect succession plan with george roberts sort of retiring but i'm sure he'll be involved to some degree here's a question for josh i'm the kind of guy back in 1992 when i'm starting to invest, and i buy big blue, i buy ibm. and it's one of those things where it's all over the place, especially during the romeni era. i keep saying i wake up in the morning and say i got to get rid of this thing, and i should've got rid of it yesterday. where do you see ibm over the next few years it's one of those things where i
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see this every day for 25 years and i just have to keep it >> josh, it's yours. chanos is a bear, he's short he gave you all the reasons why. josh, what would you tell al >> so, declining revenue for ten years, al. this company has not been able to figure out how to turn this battleship in a decade actually, it's been in a down trend, the stock price since march of 2013. coincidentally march of 2013 is when the s&p 500 finally broke out to a new high from before the great financial crisis so, this stock has been going in the opposite direction of pretty much every technology stock in existence, and the overall market since march of 2013 so every day would've been a great day to sell. think about how long ago that was.
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breaking bad was still on the air. we were listening to gangham style in march of 2013 if chanos is right, he's saying ibm is overstating its earnings by 50% that's not my area of expertise. but if he's right, the stock is going much lower i understand the value, guys like it, it's cheap. it's been cheap, it's been getting cheaper. and i don't know that this brand is on the verge of resurrecting itself it reminds me a lot of general electric actually. so i would not be in it. i know nobody likes to sell a stock at a 10-year low i just can't find anything good to say about it. >> not even the 5% - >> other than that, it's nice. [ laughter ] >> josh, knowing that, i've just pressed sell >> you got the colts and the niners this sunday night biggest surprise to you thus far this season's what, how good the cowboys look
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what jumps out to you? >> cowboys number one, and arizona number two they've had an easy one this week they should be 7-0 so kyler murray, he's sensational. a lot of fun to watch. and all of a sudden this is a team that you have to watch. the arizona cardinals who've only been to one super bowl in 2008 when they came very close to being pittsburgh, they've got it going, they really do and dallas with dak prescott remember the only game they've lost is the game we had on opening night in tampa and they almost won that game. so, they're back and they have dan quinn as their defensive coordinator. that's made a big difference you know this because you're a big football fan i can't remember a season where the more exciting game's coming down to the end than this year it is just wild. >> it has been great we always enjoy watching you colts/niners sunday night. we'll be there
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again, thank you so much for being part of this >> good luck, guys another ten to you >> we appreciate it. doc, "unusual activity," paypal, pinterest, do you see anything in that >> pinterest on your show, scott, we brought out those calls that were bought at the 55 strike that expired tomorrow they were paying 30 cents for those calls. they went to $11 yesterday that was about a $12 million winfall for whoever the 12,000 call buyers were that jumped in there and bought all those calls. makes you scratch your head a little bit and makes you think somebody knew something. didi up, of course, chinese uber this one is getting a lot of love the november 11 calls are being bought in big numbers. those chinese internet stocks as well as some of these technology plays in china have turned around this is one that we're in right
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now. and just intel quickly they're mainly buying puts because they're not seeing that big upside speculation in calls. that's for intel today it's trading at about 57% puts nothing's terribly big though in intel. >> all rhtig, doc, we appreciate that we'll do "final trade," and we'll do it next with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential.
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we're going to go out with a bang tomorrow. we have a big lineup of guests
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noon tomorrow, please don't miss that brenda, kick us off. "final trades. >> well, brenda's frozen pharmagen. >> here's a stock i don't talk about that much. home depot, i bought it in january of this year it's actually done nothing but gone straight up, despite the fact that the housing market has been of question well, today's existing home sales gave no question that there is going to be a lot of renovating going on, and that's going to be to home depot's benefit. >> do you prefer it over owe's >> i do. >> dr. jay >> under armour. uaa, they're buying the next-week expiration next friday 21 calls, i bought those just before the show went on all. >> so some more "unusual activity," as we call it josh brown >> yes, sir. crowdstrike very quietly up 10%
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in the last month. looks like it's going to challenge that 286 high. i don't see any reason why it couldn't get through i'm long, i love the story >> we apologize that brenda's shot froze, but her pick is right on the top of your screen. it is walt disney. that does it for us. again, another big show tomorrow hope all of you will join us then that does it for us. "the exchange" begins right now. ♪ thank you very much, scott hi, everybody. i'm kelly evans. and here's what's ahead today on "the exchange. do you stick with the commodities craze? oil and metals are lower today oil having its worst month since august but still up 16% in recent weeks we'll look at whether you should stick with the trade and get some of the best ideas for how also, alaska air returned to profitability last quarter as both business and leisure travel have been picking up as we see rising fuel prices, we wonder if they'll hit the carrier next quarter we will speak with alaska airlines' ceo about that an


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