tv Making Money With Charles Payne FOX Business August 27, 2014 6:00pm-7:01pm EDT
report, have a great night, we'll see you back here tomorr tomorrow. charles: tonight on "making money," no way this is from the steve jobs play book, is apple ipad desperation a signal to sell the stock? what do you know about the sky sky-high valuations for companies? some say this is armageddon. there are ways to cash in. i give you the rules for buying the companies when they go public. >> uber bully or a smart business? is it playing fair? does it matter. not to late to get in on the rally, i have two more stock ideas for you tonight, so let's go make some money.
charles: i'm charles payne welcome to "making money," that is what we'll do, help you make money by investing and managing your stock market portfolio, we call it the real, real deal. headline on your phone tell but 1% of the story, you have to drill in there, here to help investment pros, hitha, a fantastic outfit. you love uber. matt mccall. and tracey from jersey. give it to me straight. and david nelson, a lot of stocks up today. let's dig into first real deal. retailers are higher, michael's arts and crafts, young adult retailer, express stores did
well. opera and tiffanys did well. we're looking at a market that is doing well, nobody knows it, and how long until we hit 20,000, that is my target on. think about it, tech is rocking, and financials are gaining traction, equity have grown to $66 trillion in value in the world. success begets success. this is a discussion we need to have. we have downplayed fashioed fact we're at an all-time high in a couple of indices. >> people say 20,000 -- >> you do 20,000 based on traditional valuation? like p/e ratio with this much more to go? price to sales? >> p/e rate now on estimates about 16, a little bit above average. when you top out of the bubble you are above 20, i give about
19. that. charles: that could be cautious. >> i think it goes to 20,000, maybe higher, once interest rates rise, people will take their money out of the bonds put it into equity. success begets success. >> interest rate goes higher than bonds are for attractive, people will put more money in that, that will hurt valuation metrics on stocks. charles: but we might get that long awaited great location that we've -- rotation that we've been waiting for. >> i would not coup on this, i think you have a better chance of seeing the market come down a little bit, i talked to a great friend on the floor, volume is anemic. what happens when they come back in september. charles: tomorrow we have a special show about thousand play this stock -- how to play the stock. >> i think that could be fantastic buying opportunity.
charles: tracy, the volume has been anemic. >> i can't go with that. it is always low this time of year. you could make the same argument every time you hit a milestone. we could have had the same argument 4, 3, 2 years ago. >> markets on air then? >> no, you are not using financial engineering to push market higher. i am not as bullish as matt. i think we will track earnings growth, to do what you want, you have to get more multiple expansion. charles: how do we get more people in to the market is the points. i do this every night, i talk to people, i get the same e-mails and tweets -- i am waiting, i am waiting, i want it to be a real rally. >> i think that has to do with
confidence. when people feel more confident is when people will get off of the sideline. but you are right, they can't just sit there. and we were talking about it some of the luxury stocks are on fire. >> i want to points ought after the bell, williams-sonoma getting slammed, i did not see the details. risk, we like to talk risk and reward. make sure that upside if we get in market right now knowing we're way overdue for a correction. >> multiple the are still, round average right now. if you top invest in stocks -- if you want to invest in stocks, you need to be in stocks right now. >> do you think that guidance going forward not so great, i think that the market is going to the moon. on a rocket ship? oil not sure. i'm not shire.
>> why does this have to be a rocket ship? charles: before this rallyy is over. >> it could be years. charles: let's blow whistle, open a page from payne's investment playbook, main street has been yawning at stock market rally. trust sharing economy is garnering the headlines, none as much as uber, it looks like this company reminds me of those run by famous robber "barron's," they would do anything. take slog, ongoing project to steel drivers from lift, you say that is okay. then, 5560 lift rides ordered by uber operatives, then cancels, ouch. and then, spying on lift operations. berlin bans uber for using
drivers, in an some cases they d no licenses or insurance. and accused of crony cral implement -- capitalism, some say eemmanuelle may have used his brother rahm emanuel. lly face it war has rules. is the real, real deal that uber is doing what it has to do to win and its rivals are whineers. or should there be a code of conduct? >> i think it is fabulous. what a fight g to town. it is causing so much buzz. you don't want more regulation, you don't' rules, the fact that there are rules in war is a oxymoron anyway.
just do what you g got to do. charles: throw the geneva convention out the window? >> throw it out, this is business as usual. >> morgan stanley has like say, they hire a thousand people to call up arrival and put in 2000 fake orders, buy me xyj and not pay for the stock. >> just put a small service change for canceling, they will have to do that anyway, they will all end up doing that. >> they are fighting the same enemy, they are both disrupters. they are fighting the establishment. uber has to realize, there is enough market share out there work together. >> fu funny you say that, uber said, this stuff about how mean
we are to lift is because lyft wants us to buy them. charles: maybe they will. >> we've seen this since 1800s remember that eerie war, they bought all stock of eerie railroad? charles: reminds me of the robber bea barons. >> but a whineer? charles: i am poseing the question, i posed o it on twitt. a fair amount of impeachment who said -- impeachment who said people who said, they will not use a company if they are using bullying. >> lets fight continue. >> it is market regulation, let competition regulate itself. >> that should hurt uber this is adding to a bad reputation.
>> that is corporate fault. >> there have to be some rules you put people in danger with unlicenseed drivers. >> then this is -- has to figure this out, as long as it is legal, anything goes, we have too many whineers, take your ball and bat and go home. charles: go for it. duke it out. latest development in cyber hacking against khoer jason ja . hacking occurred in mid august, that is when russian troops were amassing on ukrainian border, we'll bling you updates as we
charles: all right i'm back, and i'm going to open their page from the investment playbook, that trust the economy is all the raining, no doubt many companies turn longstanding industries' side down with a promise of faster liberateing services for customers, is it frenzy too much too soon? there will be growing pains and failure, news of a $20 million investment by kleiner perkins in may, propelled overnight snap chat -- to 10 million bucks,
joining drop box, andouple others, news propelled notion there is sweeping lunacy in the air, reminiscent of the dot-com era. in the day, a company called level 3, they raised $14 billion in their ifield, called best funded ipo in history, went to 117 in january 2000 before having a near death experience, it is back on the move, and interesting. not worth much more than snap chat. they do $10 billion, snap chat with 35 employees, level 3 11,000, how about revenue, we talk about a company not having earnings, how about not having revenue and you are worth that. at start of year there were 30
private -- back companies, since then, 3 have gone public, and they are mixed about respect to ammo, mayfair has something so do people who think this is a big deal. jd.com is huge. and mobil eye this week about right, and x net, 78 million, that is less, that is crazy, when you think about this, all over the board, something for everyone. we have megan hooper with us, founder of besmart joining, you were directive of operation at a growth management firm, help us deservdecipher what is going on. why would they throw money at snap chat at this valuation.
>> kleiner perkins, has anic len an excellent track record, they their investments are usually closer to 3 million, less preipo round, this says they have capital they want to deploy, and participate in the momentum toward a ipo. charles: you are saying, money to burn, the stock is going to go public, it is going do pop, they will get out. >> yep. charles: not necessarily kleiner perkins saying this is say valuable company we like it long-term. >> this is an accurate valuation, this is a better deal for them. >> even with no revenue coming in they feel this revenue is right? >> once public the valuation will go higher in which case, you and i it will be less of a positive investment. charles: we have this argument. the eyeballs. that is what scares people, we paid a lot of money for eyeballs
in 1999, 1998, 2000. forget about revenue. they have the eyeballs, you remember? >> i was there, i bought eyeballs like everyone else. megan brings up a great points this less about the valuation, a lot is about marketing. they understand what is going to sell, their payday is that ipo. that is what they get out. charles: kleiner perkins? >> yeah. charles: and average person? >> i do not want to be a buyer in the public market not at this value. >> this is such an illega an ild market right now. >> look at some of the ipos in a month it could be a half of that. >> i tell you, the young kids use snap chat, this is how they calm kate, they don't --
communicate, they don't text, they snap chat, look at drop box, my whole family uses drop box. i think there could be something here at the end of the day. >> where is the revenue stream. >> look at fac facebook there ws none, and none with priceline. >> if they could tell me that revenue stream for snap chat is through a device i get that. charles: megan, that is what the argument will be, this is a product with astl least 100 miln machinery users right -- monthly users right now, that could go up. you could monetize that with a small fee and make this a profit ib company. >> i agree that snap chat is an
obsession among millennials, it is accurate it is relevant. but the url, ban ser a problem -- banner is a problem. charles: facebook offered them $3 billion last year, they turned it down. >> moving to next part of the real-real deal, the guy buying hot names as they come public, make sure that business is not a one-trick pony or peeking. remember candy, you saw the numbers, make sure they do not have too many rounds of financing, round after round, not like that in old days, and micdo not chase ipo price adjustment, one day it is $18, then $19, then $20, facebook did this, they stock ever nickel out of the offering it was a
disaster, back to david's points, a lot of people laugh money. there was a wild west atmosphere associated with land graps, jessica alba raised -- for her venture, some say that is ultimate red flag. does her company deserve a billion dollar valuation. >> yes, because of -- >> because of jessica alba. >> it has something to do with it, moms have major purchasing power. there are 82 million moms in the u.s., her business is based in e-commerce, moms want convenience, and they care, have you a trend with moms about this not so perfect parenting, that is what she is capitalizing on, with this market scheme, a lot of this money she raised is really to do external marketing they based before on her being a
celebrity. >> i think capitalize on nervous first time mom, first time out you want to to it all perfect, by the time the second and third comes along, the lolly pop falls ofson the floor, you shake it o, and give it to them, but this is for the expenseive coastal towns. california and new york they will buy it up. >> looking at that revenue, i like that, i have to say that is why peoplwhy people are spendin. charles: you said magic word revenues. by the way in that whole space, i like, subscribers in jd .com, into mobile eye. i have a fresh stock idea coming up, think about this, magic formula for a stock going higher, sustained growth
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labs and -- here is the thing they are core technology, they cover fiber, led, lsi, motion control, encodeers, and rf, and microwave. areas that i love, they are in markets wireless, wire, industrial, and ente enterprise. on the web site, they say, that they are set to go, they have sustainable growth, margin expansion, and earnings leverage, i like this stock a lot. i have liked it for a long time, in my mind, i think it could go to 93 bucks, matt? >> i am liking it. it is undervalued, pegged below .0, roll out of 4g in china will help, one caveat i have, earnings tomorrow after the bell, we don't know what they will be once the deals are
worked in they could be better than expected. you do not know how investors rage, i tend to wait until after earnings to buy. charles: i am chimeing in for audience, sometimes there is investor behavior, knee-jerk reactions they have been sell offing the names no matter how good, workday was up 2 bucks before he started show now up a nickel. also you can en up chasing these names too, we respect 4 times a -- we report 4 times a year, but what about company with value. >> an incredible amount of revenue growth, 65% of actually revenue from apple and samsung growth, as 4g rolls out, and more of these ipads roll out, iphones, they will see a lot more of a bump in revenue. charles: a great thing if you don't have to pick who will bes wenner, you just know that people will keep buying gadgets.
>> like this a lot, i exited this stock about a month ago, it was a home run for us it is about 4 higher, i think this is say convict call you make in front of earnings, the lsirsi acquisition has been a rome home run. charles: two days ago i mentioned sanderson farm, the stock got hammers, got back half today, you bought it at -- >> no, no. >> you bought it at the open, i'm already making pho*u you money. what do you think about that? we know that technology world is always fast moving. idea that maybe you could make an investment you don't have to find big winner who'll have the hottest gizmo, but the names behind the gizmo? >> you are right, that acquisitions abode well for this
stock, and the valuation is in line. but i think that the sector as a whole in terms of technology will speak toward price and where that goes, i am more hold leaning towards a buy. charles.charles: okay hold/buy. >> what do you think? i think that everyone is using snap chat. charles: a decision of a lifetime, do you make one of the biggest decisions ever on a worth less degree or throw passion out the window for a good living? remember, all about making money. you have to make the right college decision. wondering what that is?
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charles: a page from investment play book, school is back, so are those grand hopes and dreams of parents and the students, off to college. a more business-like approach must be taken when you choose a school,s specially your major, class of 2014 on average will owrerbgss arswe $33,000 when th. forget passion, and forget those majors that will never help you.
world has entered a new knowledge-based economy, woe to those caring around cameras or digging up fossils. megan, you are accomplished, i see you did major in liberal arts, if you had a kid right now, you had a child going to college, would you let them take the same route? >> absolutely not, job environment since 2008 has changed. level of flexibility that millennial have to have when they approach highering process, they are over educated and under employed. i recommend is a business degree, engineering, computer science, something that gives them transferible skills among many industries, maybe they are not pursueing their passion but they may get a paycheck. charles: i am dealing with it next year one kid, hav you havea
lot of kids back-to-back, are you going to let them pursue their passion? you have kids with passion in sports, okay you say this is a tough new jersey tracy mom. >> his the new jersey mom who said to me, he who knows the books knows the business, you will always have a job, that is how i ended up knowing, she is right. i can do tax returns and feed my kids if this goes to hell in a handbag. that is going to pass on to my kids, if you want a minor in anthropology. go ahead. >> you have to wake up in the morning and enjoy what you do. >> eating and having a roof over my head, that is enjoyment.
>> you have like 6 guys scowling at you, with cameras. they have a good degree. >> parents should know, i teach at a private university here, a lot is overhead cost, you don't pay for the quality of education you get, you pay for stphazy fancy dorms. charles: but you are paying for it. >> you do. charles: where you teach, do they say that opportunities, you are not college material? or, don't do it? >> i teach at a school that is very liberal hearts heavy, they -- left rally art liberal arts . a lot of my students are there because they follow their passion uwhich is fashion, they want to be a designer. >> what is your sales pitch? >> you take --
>> you know, i think a lot of parents disagree with what i'm go to say, a lot of kids out of high school should not go to college right away, go out, get a job, find their passion, many. >> to school, it is a social experiment they have no idea what they want to do, they don't really apply themselves. charles: i disagree a little bit, i think that longer they delay, the less likely they go, i would rather say go to military efficient two years -- for 2 years. >> you grow up, get the heck out of the house, pull your own load. by going to to school, you are whether you are a business major or not, you are required to take different things to graduate, you see a little bit half is how the there. -- of what out there. >> and i think that millennials are creating this direction.
they are aspirational. their favorite second in the stay character was miranda. >> miranda. >> my son wants to go to school in tokyo or paris, that is a red light. update you on development over that hack attack against jpmorgan chase. one other bank, there are reports fbi investigating, whether or not the russian government is tieed to this cyberattack. now they reportedly looks like work of russian hackers, could be retaliation for u.s.-sponsored saptions we heard about. that have gotten stronger and stronger. focus on their biggest businesses and banks, the hacking occurred mid august. we'll make sure to bring you more details on the story as we get them. >> up next, my next investment idea, we know oil and gas, around the world, is not going away it is huge, i have a
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planning to unveil a largeer epad. we know that -- ipad, it is going to be massive, 12.9 inches. additional features will include more power, traditional laptop kind of functions and a keyboard dock. other companies have been larger tablets, consumer feedback, say lot of times people are saying they are too big to lug around. why this move with apple? sales have been down. matt, do you think that is an act of disperation or a smart move? >> i think it is great. i use this as laptop replacement often, i can a keyboard, a little bit bigger would be fantastic. i would not have to bring my laptop with me, it is not dispiering a, the numbers came
out, nelson mandela earning -- innel earnings. charles: you are almost making a counter argument. i am looking at trend. ipads came out the gate, and your laptops and all of a sudden, they may start selling more laptops. >> people still' laptops. charles: this looks like a flash in the pan. >> bigger one will be a tablet and a laptop all in one. >> people who don't want to replace their pc's frequently will get the tablets, when you get that pc, we saw pc shipments drop 6.7% last year, those people will go to tablets and ipads. charles: but not the case, in last couple quarters ipad sales are plummeting, what is going on? >> a largeer screen is not going to solve apple's problem. investing in a keyboard is what
will increase use value for the ipad. i upgrade my, phone, i use it so much, i break it the screen cracks. i don't use my ipad enough. >> i think because there has not been a big innovation for me to go out and upgrade my ipad, they need to blow my socks off. charles: size matters to tracy? >> yes. >> they are revolutionizing everything. charles: my second stock idea is coming up, one of the largest international oil, natural gas service companies out there. it has been in a rough ride, they stream line their, that means they fireed a lot of people, i will tell you what they are doing when we come back, we're here to make you money.
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charles: time to help you make money with a second stock recommendation, weatherford international, it all about oil and drilling. we know. this company is really positioned big time to benefit. i have been pulling it for year -- following it for years, first time i recommended was in 2002. we made money, but it was in trouble, but they stream lined their businesses, they are getting rid of a lot of segments at least 5 of them, last one they should be dealt with firsts for of next year, and building on core coptancey, drilling revenue last year, for this second am 25%, thisa operating
margin, operating margins, complying, a billion 23.9%. they have one segment called speupl layincallstimlation where negative, i don't know when they are going to do there. but overall they are amazing, here is what you don't see in this bull market, insidhe stockl be 25 bucks through there i like at 29, david? >> i like weatherford, it was up on volume and rumors today, a company that i own halliburton is considering buying this company. charles: here is an interesting thing, a term that is trying to buy find% of the -- 5% or 5 million shares for 20 something odd bucks, but today, the action
on a lazy summer day. >> the sector broke out yesterday, equipment and service for oil industry, the sector broke out, it will bring up stock. valuation, it is price to sales 1.1, p/e next year at 12, so much below the others. this is the one you want to be in. charles: this is one of the worse stocks in sector for a long time, i lost money in it. that stuff lingers with a stock for a long time, but i like it now. >> how much is the movement upward is because of the rumor that halliburton might acquire it. charles: well. >> i like they are getting ahead of the russian stkuf, they sold stuff, the they sold their land out there.
>> they never cutback on their r&d. they did great. charles: you know, we talk about solar and winds, it is sexy and fun, but oil will rule the world for a at least 30 more years. >> i think so. charles: when we come back. forget about mickey d's, talking about russia. they may go after one of our richest targets, details for you, when we come back.
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when folks think about wthey think salmon and energy. but the energy bp produces up here creates something else as well: jobs all over america. engineering and innovation jobs. advanced safety systems & technology. shipping and manufacturing. across the united states, bp supports more than a quarter million jobs. when we set up operation in one part of the country, people in other parts go to work. that's not a coincidence. it's one more part of our commitment to america.
isn't this a one-time that the government can back then. we do nothing about cybersecurity. they have executive thank files that are part of this. charles: to your point, everyone wants also pay for it. because they said we shouldn't pay for it, the credit card companies will pay for it. >> i think that these escalated pitchers between the united states and russia, that is the biggest risk for this market if there is one. charles: i agree with you. if russia retaliates with oil, oil and natural gas, i think that turns it upside down. >> i will tell you what i meant messing with jamie dimon is not the right thing to do. charles: it is time now to see what you are saying at home.
some of them i can't say on tv because the language. most of you are very passionate about the conversation. and it doesn't hurt. they said no kidding, my brother spent $400,000 and his kid got a ba in english and a huge waste of time and life. what do you think? >> you have a liberal arts degree. >> i'm always debating whether or not to write a post's from finance backgrounds. at the end of the day at the market is more competitive than it ever has been. charles: are you hiring people are you saying no, we need a morse civics lsat? >> i'm looking for people that are created risktakers. charles: fantastic show, i love it and appreciate it. ddr the show, a lot of people do that. a lot of people bid our very own
kate farewell. next we have lou dobbs and the markets, a lot of interesting things. lou dobbs knows how to put it together. so keep it right here on the fox business channel ♪ ♪ lou: good evening, everyone. russian president vladimir putin becoming increasingly aggressive and reckless in both the ukraine and now here in the united states. defense department officials say that russian ground forces are carrying out attacks against ukrainian troops within ukraine itself and attacking u.s. banking system with hackers from within russia. fox news has confirmed from senior u.s. defense officials that there is now evidence that shows the russian military firing artillery from within ukrainian military positions.