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tv   Fast Money Halftime Report  CNBC  May 10, 2012 12:00pm-1:00pm EDT

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and this one, "i'd start a deep sea fishing tour company with tiki bar and small batch rum distillry. might keep the facebook dress code." very creative. a change in the market today. for now, let's go to vegas and get the "fast money halftime report." >> carl, thanks so much. welcome again to the salt conference out in las vegas. big lineup yet again today. joel greenblatt is with us, the legendary investor, really the king of value investing. he's literally written the book on value investing. he's going to join us. i have it here. the little book that still beats the market. we'll talk to him in just a second. we're watching the markets, as we always do here. we're holding on to gains. cisco is weighing on the markets. disappointing outlook. tech is definitely a lagger today. it seems as though, once the european markets have closed, the markets are drifting off better levels. dow is still holding in positive
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territory as is s&p 500. dow down six straight days, s&p down 5 of the last 6. nasdaq is the lagger today, down seven points or so. oil is up for the first time in seven sessions. that's an interesting story we will talk about today as well. you take a look at what's happening in the euro today as well as the bulls bet on the resolve of those nations and what the currency is going to do there. certainly the elections over the weekend continue to be a big story, and the fallout can be seen in the currency markets as well. with me now, as i said, is gotham capital's joel greenblatt. he looks for times like the last several days to look for this in the market. anthony scaramucci, who put together the salt conference, is here with us. and also jeff greenberg. as i said, you literally wrote
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the book on investing, and i should say books because we do have many of them out now. let me get your high level, 30,000 feet vision of what's happening across the global markets here. certainly, there's been a lot of turbulence in the markets over the last several days as we assess what the fallout in the european elections is going to be, what the situation in europe is going to be, and how all of that funnels down to what the u.s. market performance is going to be. how do you see things? >> we're value investors. we look at values. how companies are doing and how they're valued in the market. we've actually looked over the last 20-something years, 23 years, we looked at the markets and compared the free cash flow years of the s&p 500 and the russell 1,000 over that period, and right now we're in about the 92nd percentile the way we measure towards cheap, meaning the market's only been cheaper than this 8% of the time over the last 23 years. when the cash flow yields have
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been this cheap -- and we're talking about the u.s., large cap stocks, returns have been about 20%. that doesn't mean it's going straight there. things were this cheap, let's say, in november of 2008. yet the world almost came to an end. through march of 2009, it fell another 20%. if you went a year forward, it was up significantly and was a good prediction. it's really a long-term valuation prediction. >> we'll go through the portfolio and talk about the individual names, and all of you, i'm sure, will get a lot out of that conversation. as i mentioned, anthony scaramucci is with us again. what would you sum up from this conference, with so many high level investors, what the overall mood has been? is it fair to say it's been cautiously opportunistic? people have their eye on what's happening in europe, but they're always looking for opportunity? >> yeah, i do think that europe was a central overhang in this conference in terms of what people were talking about, but i don't think one panel left the table without opportunities. we were talking about gary, with
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paul singer and the sovereign debt crisis, and there could be a short opportunity there among a cross-section of the sovereign debt. a lot of people are talking opportunistically about stocks the way joel is. i actually have a question for joel. you wrote two fantastic books, one that started the little book series, and those books talk about your metrics, what you look for the dashboard of valuation. has any of that changed since you wrote that book as it related to the macro economic environment that's we've been discussing here at salt? or are you a pure stock analyst, joel? or have you brought more of that into the game? >> i've been teaching at columbia the last 16 years. what i teach my students the first few days, if you're good at figuring out what the company is worth, the market will agree with you. just won't tell you when. could be two to three days or two to three years, but i've found that two to three years is enough time for stocks to get to fair value. it's a question of whether you're good at valuing stocks.
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>> so those metrics really haven't changed. you've stayed consistent in that zone. >> right. that doesn't change over time for us. >> i would say that's different from a lot of hedge fund managers here. they're building more macro economic factors into their stock selection, right or wrong. >> yeah, we're getting a little comeback today gs but you almost get the feeling, as the last several days have started out fairly bad and come back. now we're starting out fairly good and come off. >> what we're looking at is exactly what the theme is for this conference. people are searching for multiple different areas in the market and thousand they want to attack it. they're looking for opportunities to put more capital to work. they're looking at deals and valuations but also looking for growth. i would throw out to joel, where are you seeing the best opportunities? you brought up cash flows. is it still just technology or medical technology, or there's obviously areas where there's a lot less of the capital input,
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and yet they are seeing great cash flows now. >> it's a combination of things. it's really valuation versus the cash flow. and so you're finding value where you would think you'd find value. things that are -- some have head winds in front of them. retailer worried about the consumer. if the fed stops pumping at some point, how artificial are things? health care comes up cheap because people are still worried about obama care and all the repercussions of that, read in the paper about that. >> let me ask you quickly, though. on the issue of a stock being cheap, let's look at cisco, for example, today. i know you may not hold it, and it doesn't really matter if you do. the point i want to make is the stock is obviously getting hit today on a disappointing outlook. how do you know when a stock you want to buy is cheap or cheap for a reason? there's a big difference there. a stock could be cheap and the
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upside can be big. it's cheap for a reason. you may be able to get it at a lower price down the road. you're taking a calculated risk in the way you buy stocks to some respect. >> one way we try to avoid a value trap you want to call it. maybe it's deservedly cheap. we're looking for companies in general that have high free cash flows, high returns on capital. so we're not looking at the typical low price to book, low price to sale stock. these companies are earning a lot of money and earning it very efficiently. then the question is what are the projects going forward? most of the companies that come up cheap that we find should low expectations built into that. if the low expectations come in based on things you read in the paper, you don't tend to lose much money because it's already built into the stock price. if you do a little better or a lot better from the stocks built in, you have asymmetric on the upside. if you put together a diversified portfolio of the companies that are out of papfa for all the reasons you read in
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the paper and you see on cnbc and they're high free cash flow generating and good businesses, that combination is very powerful over time. >> let's talk about a stock that has certainly not fallen out of favor at all, yet you see value in apple. it's one of your holdings. >> the power with apple is it's doing too well. people don't think it can continue. they've hit home run after home run after home run, and people don't think it's likely to continue. and that may be true. and all these things are true when -- there's an element of truth in all those companies where people are skeptical. the question is, when it's usually on the front page of the paper, it's generally widely held. it's usually overcompensated for. the world has become much more short-term oriented. managers look to make money in the next year or two. when you look at something that may have headwinds in the next year or two, most people don't look there. they're systematically avoided. >> i have one of the holdings you have as well, hewlett-packard. is that a trap, or should we
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both be getting out of a name like that? over the next 6 to 12 months can it perform, and will it out perform competitors, ibm, dell, some of those names? >> i short answer is i don't know. from a statistical standpoint, it's priced so low that a lot of good things could happen. if you have a bunch of these investments, you probably would do quite well over time. there are a lot of things going on that are interesting in hewlett-packard. in other words, if things can't continue, they usually stop. in this particular case, new management came in. you know, meg whitman wants to do something important in restructuring the next time. i think it's potentially a special situation sometime in the next year or two. in other words, it will be either reorganized or streamlined, or maybe there will be some spin-offs eventually.
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something has to happen. i think it's primed for something good. even their computer business is a high return on capital business. you think it's a high manufacturing business, but they slap their name on it and distribute and it and design it. it's a high return on capital business. >> let me ask you about microsoft. the stock that's finally performing. it's actually performing in a stock that, as everybody knows, has not done much over the last decade or so. what is your outlook for microsoft. is it still cheap? is it still a value play? >> looking at the numbers, there's not many places to invest your money. looking at bonds, you're making a few percent. this is a huge company that puts out a cash yield even at these prices, and they have a nice franchise that i can't really opine on whether this particular
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one will work out over time. >> the panel yesterday talking about microsoft said that this will be the breakout stock over the next half decade. the point he was making is this operating system for the phone they developed. >> windows 8 mobile. >> windows 8 mobile is going to start to eat into apple's share and some of the phone carriers are tired of subsidizing the iphone on their networks. what is your reaction to that? >> in general, microsoft's cheap because of the cloud. people are moving away from the traditional strengths of the desktop/laptop. so this is new operating systems are things that are just like extras. it's very cheap just on what they have right now. companies are always trying toi do better and create new things. they have such a strong franchise, they're able to try these new things, and some of them will take, that would just be gravy.
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their current prices justify the prices now. >> staying on technology, do you see any scenario? do the metrics ever, could they ever align where you would be interested in amazon, which is trading at a high valuation? a price line, which is at a high valuation. a linked in, some of these media stocks that trade at a high valuation. you may like the companies. would there be a way that you would buy these stocks? >> generally not if they're very high priced relative to their cash flows. it doesn't mean they're not good buys. it means that the way i look at investing is figure out what something's worth and pay a lot less. that's the way i look at it. some of those prices are already discounting some really nice performance over time from the company level. those are things, if i can't predict, it's very hard to value those things. if i don't have to pay much for things, it's a lot easier. >> i want to get your opinion
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certainly before you go on to facebook and the highly anticipated ipo again. there's a number of opportunity in the market, over the last few days when the market started out big and pulled back. >> i think on these pull backs, there are great opportunities to step into some of these names and sell some upside calls. this elevated volatility is allowing us to get into price entries even cheaper than we think because with the elevated volatility, the premiums with the options are allowing us to get into these names. i would throw out a name like southern copper. that was a name i held for a long time. yesterday i was able to buy back calls going to go out worthless in a week. buy them back now, roll them into june with the volatility index. trading at 20, that volatility index is giving me a lot of premium to sell upside. >> on that note in cisco today, as people are placing their bets that that stock seems to have bottomed, at least they're thinking it would by the amount of activity. >> to joel's point, the one issue, you still wonder with cisco, there is the issue with groeth. this is a company that does have
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some cash. they look at things right. you look at the valuation and say it's too cheap. there are big bets out there right now saying in the options world, it is too cheap. positioning yourself now for $1 yourself to the upside if it went a little lower. >> the market holding on to gains, albeit slightly, up four points. next on the halftime report, starbucks chairman and ceo howard schultz is talking coffee wars, consumer spending, and also why he left the groupon board. another interview you'll see first on cnbc.
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financials are staging a comeback today based on bernanke's comments that conditions in the banking sector have improved significantly over the past few years. i'd love to get your take, both pete and anthony, on whether
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you'd be buyers of financial stocks here. >> i'll let you start on that one. >> here's what i would say. the financial stocks seem very cheap on a long term metric analysis. we're bullish on financials, and there still is a good carry trade. what we are negative on, though, is the yields are so low in the sovereign area. if this crisis does explode in europe, the financials are going to be the first ones to get hit. we're a little lighter now than we were at the beginning of the year. >> that might be why we've seen the financials, far less paper coming in. the paper flows really almost came to a stop, scott, in the last couple of weeks, the volume has really dried up across the board. i still think, if you're looking for any one name in the area, though, wells fargo. the way it's been tied to some of the housing and you look at some of the housing stocks -- we'll talk about that later. the performance there, and you wonder why wells fargo holds up the better than the rest of them. i think there's great opportunities there.
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but i think jp. morgan. >> jp morgan, and there's a lot of hedge funds short morgan stanley. i think morgan stanley is doing way better than the hedge funds think. >> let me get a quick opinion on whether you like financial stocks and are finding value in the banks? >> they're still coming up very cheap for the most part. they've moved quite a bit since the beginning of the year, but they still come up cheap because they came from a deep hole. >> is there value in investing? whitney of t-2 partners believes so. take a look at what the legendary value investor said last week about his changed position from short to long on barnes and noble. >> we found a great write-up making the long case on a website that's one of our favorites called value investors club. if you value the declining bookstore business, the stable college bookstore business and the nook business, you take those three pieces, that particular analysis came up with
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about a $37 combined sum of the parts valuation for it, and we said, do we really want to be short this at $13? >> joel, you're the man behind obviously the website that whitney tilson was talking about. tell us how people can access it, or is it just available to higher level investors? >> basically, it's called valueinves anyone can really look at the ideas on there, but there's a 90-day delay. the only way to look at the current investments -- they're value investing, so they're long-term investments. it's a good way to see the way value investors think. >> it's like social media for higher level investors. you're sharing ideas. >> what happens was, when we first started, i started with my partner john petri, and i've been teaching for 16 years, and i'm always grading papers. he said, if you could get an
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a-plus in my class with your investment idea, we'll let you into our club. we have about 250 members in that club that we've put together over the last 12 years, and they share ideas with each other. those ideas are accessible but with a delay to people who aren't part of the club. >> are you an easy grader? we've got a lot of kids here that figure out if they want to take your class or not. >> i once looked, and i'm probably the easiest grader at columbia, but i only give a very few a-pluses. >> let's go down to the institute company meeting in washington where tyler mathis joins us with a very special guest. tyler? >> thank you very much, scott. i'm here with an acquaintance of yours, howard schultz, chairman and ceo of starbucks, and he is here to give the keynote address in just a few moments to people at the general membership meeting of the investment company institute. mr. schultz, welcome. when you go into starbucks, what
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do you order typically? >> a double short nonfat latte. >> let the record show. >> however, in the morning, a double espresso mack macchiato. >> beautiful. let's talk about the subject you're going to talk about in a moment, and that is corporate values. you say the value of your company depends on the values of your company. you're going to be talking inform201,to 1,500 financial services executives. the value has come down. >> in the past few years, starbucks had record revenue, record earnings at a time in america where you know consumer confidence is down. at the same time, we provided health insurance and equity stock options. the health insurance line cost $260 million this year despite the pressure to cut that benefit. what i'm here to say is you can't build a company solely based on the singular focus of creating shareholder value
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unless you create value for your people and the communities you serve. and my message is about achieving the balance between profitability and a social conscience. >> do you think that financial services companies, broadly speaking -- i realize i'm tarring everybody with the same brush. do you believe that their values are aligned with the way they should be running their business, or is there a deficit there? >> i'm not here to criticize what their values are. what i'm here to do is to demonstrate that i believe very strongly that those companies that embrace value organizations, not because of press release, but do the right things and add significant shareholder value. those are the kinds of companies they should invest in because they will endure. >> mr. schultz, it's nice to see you again. i want to ask you a question about starbucks in just a moment. certainly, there was a lot of talk in the marketplace when you decided to leave the groupon
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board in just 19 months. i'm wondering if you'd be able to shed a little more light on why you made that decision, why you chose to leave immediately, and what does it say about groupon's leadership? >> i have a lot of confidence in andrew mason and the groupon team. the truth of the matter is, when i came on the board, i only committed to one year. it just so happens my exit from the board was timed with the problem they had last quarter, and no one should read anything into that. >> are you still confident that they're -- some of the criticism, i guess, that you would hear about groupon is they need some adult supervision. and then a guy like you, a credible adult, leaves. >> as i said, i'm no longer on the board. i've got confidence in the company and andrew, and that's all i can say at this time. >> let me talk to another company -- go ahead, scott. finish up. >> i was going to ask a quick starbucks question as it related
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to green mountain. howard, you're coming out with your own single service machine later in the year to compete with the keurig from green mountain. is that a sign you're unwilling to make a long-term commitment to green mountain and the k-cups you currently have a partnership on? >> i think the partnership with verissimo coming out this holiday is misunderstood. it's not in competition with green mountain. it's a complementary machine. starbucks will have the upper hand because the platform we're on with green mountain, they have 12 different machines install base. that's going to grow with us and them. and we're coming out with a machine that's going to do something no other machine does, and that is make a perfect latte because we've cracked the code in terms of the technology with fresh milk. it's a stable machine. i've talked to them. you have to separate their problems and what happened with
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their chairman. their install base is 12 machines, and starbucks customers want k-cups, and we're going to honor that. >> refriends, are they enemies, are they frenemies? what is your partnership with green mountain? >> we have a very good partnership with green mountain. they knew all along we have interest in the espresso platform. it's going to be a game changer but not at their expense. >> the market misunderstood that? >> i think the market has overreacted with regard to us coming out with a machine they believe is going to be competitive to green mountain. we will coexist. we will sell k-cups in a big way and create a next generation game changing machine this holiday in every starbucks store and every retail store in the country. >> let's go back to scott. >> tyler, thanks so much. mr. schultz, it's nice to see you again. we'll talk to you again soon. pete, trade starbucks. you talked about it almost every
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show. you own it. >> i do. >> you like it. >> i own it a little higher. >> would you add to it because the stock has peeled off since the recent earnings report? >> it has. when i look at the earnings growth and the record earnings they reported as well as he addressed the revenues. when you look at china and look at growth, and you also have to wonder the margins. i'm impressed with the idea the margins could maybe expand because of the explosive growth in these frozen drinks that we all know it doesn't cost as much to produce the frozen drinks that are getting a real premium dollar amount. i have to think that's going to be another area we're going to see some of the growth. i love the name, yes. >> let's take a look at what the s&p 500 is doing today. again, the markets have been fairly turbulent this week. the s&p 500 holding on to gains. it's up five points or so. dow up about 50. nasdaq is the lagger today largely because of cisco's disappointing outlook. coming up on the halftime report, we're going to get more value plays from gotham's joel
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welcome back to the "fast money halftime report" live from las vegas and the salt conference. take a look at that. shares of green mountain spiking
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on the comments from howard schultz, chairman and ceo of starbucks, saying that he considers green mountain a strong partner. as he said, starbucks is coming out with a machine which some have interpreted to be a rival to the keurig machines from green mountain. he calls that more of a complementary product. green mountain shares at the highs of the day now, up .5%. the tech sector has been holding up well. >> if you look at dhi and pulty, go across the entire list, incredible opportunities remain in the derivative names. everyone is talking about home depot and the show has talked about lowe's as well. look at a name like bed, bath, and beyond. it's very closely tied to housing and spending. if you're seeing it in the other areas and seeing it there, they made a big acquisition yesterday(5) $00 million acquisition of cost plus, yet the stock continues to move to
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the upside, 52 week highs. the stock is way too cheap in the retail space. s >> joel, let me bring the conference back to you. i want to talk about the value weighted investing strategy. i think it's especially relevant to the individual investor who's watching today. can you describe what that is? >> sure. most indexes people are familiar with, either the s&p 500 or russell 1,000 are market cap weighted. the larnler the market cap of the company, the more weight it has in the index. that's not necessarily the best way to invest. what we put together was a quote, unquote, index, where we have 800 to 1,000 stocks. instead of weighting them according to how big they are, we weight them according to how cheap they are, and we rebalance it daily. we end up owning the most of the cheapest stocks. >> you have something called the formula investing funds. i want people to understand, yes, joel greenblatt runs a hedge fund and an awful lot of investors with an awful lot of
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money, but you have products available to the individual investor through their own broker, whether it's fidelity, schwab, or others. >> we have four investing funds. one is diversified domestically, 800 to 1,000 stocks, and it's weighted daily. we have a team of analysts that help us value the companies, and we reweight them daily to own the most of the cheapest. it seems so simple it's silly. actually, our research shows that we get significantly higher returns over time, at least our 20 years of back tests following this strategy, just to make clear, show 700 basis points and volatility. it's pretty powerful it works that way. we also have a select fund, which buys more towards the top of the list, meaning just the cheapest. and we do the same thing internationally. we have 400 stock diversified strategy and selective strategy.
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>> one of these value versus value trap discussions can certainly be had about best buy. it's a stock that's in your portfolio. it's a stock you like. tell me why. >> one of the reasons i guess we -- it appears to be cheap because it's really hard to like. everyone knows what's wrong with best buy. consumer is tough. everyone goes in there and buys it on amazon. they go see what it looks like. >> even you've heard that. >> i think everyone's heard that. it's been in every newspaper. everyone knows that it's a dying busine business. so i can't imagine that's not reflected in the stock price. doesn't mean this will work out, but it means that very low expectations are put into the current price. if they just do ao little bette, a lot better than low expectations, you have a chance for big returns. if the low expectations turn out to be true, you probably don't lose much from here. i want a caveat. you have to buy a group of these companies. these are difficult bets. you don't put half your net
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worth into any one of these things. if you have a grup of 50 to 100 companies all similarly out of favor, all big cash flow generating, all high returns on capital, on average, over time, it ends up working out very well. >> let's talk quickly about kohl's. it's another stock you own. it's making news today. certainly the outlook below analysts' expectations. you barely pay attention to that stuff when you own a name like kohl's, right? >> it's still earning a lot of money and priced relative to expected earnings this year and based on trailing earnings. it comes up cheap. that doesn't mean it works out. only two-thirds of our picks wind up actually beating the market, but hopefully on the ones that don't, we don't lose very much, and the whole package is a good deal, and that's the strategy. >> the ones that do beat the market have such tremendous upside to you, it outweighs what you could hit on the down side. >> and you didn't pay much in
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the first place when they do go to the down side. >> coming up on the halftime report, dan niles of alpha one capital partners tells us which tech stocks he's bullish in. live from salt next given a key day for tech. december 21st polar shifts will reverse the earth's gravitational pull and hurtle us all into space. which would render retirement planning unnecessary. but say the sun rises on december 22nd, and you still need to retire. td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans
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welcome back. salt in vegas. cisco, once a bellwether for tech stocks, getting hammered today after poor guidance and cautious statements about spending. other big tech names are hanging in there today. why isn't cisco dragging the rest of the sector down with it? it's interesting, pete, when you look at the heat the map with the nasdaq 100, apple is higher, some of the other names are higher. why isn't cisco wrecking the whole thing? >> cisco has lost the effect on the marketplace. there are other names that replaced it quite frankly. you look at the other names that have outperformed, especially if you look at the next three months, six months, year. it's intel and apple. some of the other names in the space. many of the tech names, including the texas instruments of the world, they're in the right space. focused on laser focus in the right areas. intel with the romney chip that goes into the serve that helps
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into the cloud and all of that. seems like they're much more pinpointed on where they want to see that growth. >> next guest says they're at the smart phone inflection point, and his strategy is to invest in the transition of smart phone and tablet. steve niles with alpha one capital partners is with us. let's talk about tech in general. you have a heavy tech focus. how concerned are you today? how concerned should we be by what cisco said about overall tech spending? cisco is down. juniper is down. there's another tech names sort of around that area as well. >> i think you need to be concerned because cisco is still really big. they do $40 billion in revenue a year. a year ago, i was on your show at that time. cisco had first started talking about issues in europe. all their competitors were like, oh, that's a cisco issue. now all the competitors,
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juniper, et cetera, they've all come out with problems. just given cisco's size, you need to pay attention to what they have to say. >> are you buying technology stocks in are they still attractive to you as you strip out cisco? as pete was saying, a stock that's lost its bellwether status in the technology space. how does it translate to the stocks you would lie now that are in tech? >> what i'm looking at is stocks that are already beat up. i'm fairly negative on the market between now and year end. i'm not bullish at all. what i'm looking at is names like in the mobile industry, which we'll get into, but other names in the l.e.d. space, like kree or the glass space, like corning, which we have an investment in. we're looking at stuff that people already hate but we think things are going to improve. >> obviously, corning plays into the smart phone, tablet, gorilla glass, the apple story. stock's down 30% plus over the last year, where a lot of these stocks -- >> why are you looking at that end? >> i think people have been
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ignoring a lot of the negative data points coming out of europe and asia. people have built this snap back rally. >> you're using a macroeconomic overlay to your stock decisions then? >> yes, but also we didn't like cisco coming into today. we're short a lot of things around the cisco food chain because our belief is things are slowing down in europe. we're negative on priceline. we heard what they said last night. they missed the revenue, you can say what you want, and they lord the board numbers. they're really doing well in that space. it's not just them. a lot of guys said similar things. yeah, things may not be horrible, but we have to cut the numbers. >> you're still on the microsoft bandwagon. >> i am in a sense when you look out a year -- it's not one of our bigger positions, but we have a small position. this is the most important product cycle for microsoft since 1995. right now they have no answer for apple in touch, in sma smartphones, or in tablets, and come about october they're going to have a piece of software that
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enables you to be able to touch your portable you have here and be able to do what you can on your ipad or smartphone. >> we mentioned your ideas in mobile. let's talk about some of the names that you like, whether a veriphone. gluu is another company i want people to pay attention to. we'll have charts up. it's not something a lot of people follow. it's a stock we don't talk about too often, but it's glu mobile on the right of your screen. >> we're all spending a lot more time whether it's this or this on tablets or smartphones, not as much on your desktop or portable. what you're doing in an airport, you're trying to figure, okay, what can i do? playing games is one of those things of the you've got about 5.6 billion people out there with phones, but only 800 million of them are smartphones. three years from now, they're all going to be smartphones, and you're going to be pulling up games in the airport or restaurant, and glu mobile provides a lot of great fremium
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games, and they're 100% focused in that area. >> when we come back, i'll talk to you about facebook as well. coming up on the halftime report, we'll trade yahoo!. much more on what third point's dan loeb told me exclusively about the company here at salt. and a controversial socialist who could be the next prime minister of greece. does he want greece to stick with the euro? michelle caruso-cabrera has a cnbc broadcast exclusive at 1:00 p.m. eastern time. between black and white answers... ...and 1,000 shades of grey duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens
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coming up today, 1:00 p.m. eastern time on "power lunch." facing facebook's problems. it isn't all rosy a week before the ipo. smt biggest names in the mutual funds are weighing in on where they're putting their money right now. and why it's such a big deal that dunkin donuts is opening in california. meantime, third point founder dan lobe taki loeb taki shots at yahoo!'s leadership.
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i spoke to loeb last night, and he said his issues with the board comes down to accountability and lack of values. my next guest disagrees with lowe and says yahoo!'s scott thompson knows tech well and is just untested as ceo. gene, welcome to the program. are you saying the issues raised by loeb about the resume aren't serious enough to be concerned? >> that's exactly what i'm saying. i understand there's integrity issues around this that you can kind of go back to, but the reality is this. when you make this kind of hire, yes, it's an oversight. does it really matter what this person did in college? it's more about what they did recently. there's certainly things that scott thompson can do to fix yahoo! and to change leadership at this point seems like it's not the right thing to do. >> but potentially lying on your resume, as loeb alleges, sounds to me to be more than an
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oversight, as you would put it, gene. it seems to be a potentially serious offense, especially for the credibility of a company that seemingly has no credibility in the marketplace, but for a new ceo, especially who's trying to turn around a company that has so many issues. >> that's fair. i think it's going to challenge yahoo! in terms of recruiting. if scott thompson stays, it's really about getting new people on board. i think that would be a challenge. i just think in the grand scheme of things, i don't know what went into that being on his resume. i'd like to hear more about that. if that something was clearly he was trying to pump up his resume, it didn't seem like his resume needed much pumping up. i'd like to hear more about it. if i can feel good about the integrity of scott thompson, i think it's the right choice to keep him. >> you're telling me right now you'd buy these shares. right here is a buy for yahoo!? >> i think it is a buy, and i think part of the reason is not
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just what's going on fundamentally. i think there's some things that they can fix. also, i think these asian assets which we keep holding out for, but that is going to be positive for the stock.right. yahoo!'s up 1%. gene, thanks so much. >> thank you. >> all right. let's go back to dan niles. love your quick comment on whether you'd buy yahoo! here given the situation loeb has raised. and then i want to talk facebook. >> i think for me there are easier stories to deal with. i've got other things that are more interesting. >> would you be a buyer of facebook share sns. >> you have to remember there's a difference between a great company and a great stock. if you look at groupon, linkedin, zynga, they came out and a month later you lost 20% to 40%. facebook is going to trade in that first instant at some ridiculous valuation. the question is do you want to own it at that price? i'm willing to sit back and see where it trades first. because you've had those three
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companies are growing faster than facebook on a year over year revenue basis and they all went down. that's the thing you need to think about it. but long-term, yeah, it's a great company. >> scott and i had dinner with maybe 15 different hedge fund managers. the consensus 150 billion to, what do you think? >> it wouldn't surprise me in the first instant of trading. i don't want to own it at that level. >> my mom has to buy shares, i know we're in trouble. >> my mom did too. >> facebook -- >> we're not selling shares of facebook on the ipo. >> mom knows best. >> back from salt in just a moment. an investment opportunity you didn't see before. fidelity's next generation ipad app lets you see what's trending around the world,
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the world's biggest steel maker surging today after posting first quarter profits that topped estimates. the steelmaker citing strong demand in north america that offset declining revenue and demand from europe. >> i love the names. i always go to the derivative. the steel stocks are so different. u.s. steel for a trade, sure. but i still look to the met coal space when i look into that area. >> obviously you can see it on your television, we saw another ponytail like way across the room there. so we ran and grabbed dr. j, pete's brother. you've seen a lot of unusual activity. it's vegas, i'm not talking about that. >> yes. and what happens in vegas stays in vegas even at salt. >> i don't know that. >> but what we've got is a very
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unusual activity in a financial stock. they own colonial penn, cno. the stock has been slammed pretty hard. not surprising to see somebody playing for a dead cat bounce, judge. >> coming up, we'll get final thoughts back here in las vegas from the salt conference next.
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welcome back to salt in las vegas. let's take a look at the markets here. you can see that the s&p 500 is once again approaching the highs of the day. the jobless claims story seemingly offsetting some disappointment from cisco. jobless claims coming in better than expected. market as you see has been up and down throughout much of the day. but the s&p 500 is near the highs of the day. guys, pete, what are you watching today? what's your final trade? >> the theme coming away from this whole conference of salt, great job, anthony, has been opportunity. a lot of people are talking tech and valuations. i stick with intels and microsofts of the world. i think they still work. >> jon.
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>> listen to what he said. u.s. demand is strong. that's strong enough to offset weakness overseas. i will buy cisco on this dip, by the way. >> what do you think the big take away will be from salt, anthony? in past years there's been a unique knack to time the market, to call the market top. >> yes. it could also be the sell in may and go away because that's what's been happening. i think you have to worry about sovereign debt. worry about europe. but what's interesting, this morning we had carl rove and robert gibbs fighting it out over the stage, the former pres secretary for obama and george bush's political aide, it was a pay per view fight. so expect that for the november election. very tough stuff in there. we're going to put a satellite dish here and charge people to see it next year. >> people are opportunistic when we tie it back to the markets. >> no question. i think they're opportunistic. be careful on the sovereign debt side. if you're holding fixed


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