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tv   Street Signs  CNBC  August 20, 2012 2:00pm-3:00pm EDT

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sector. in the last few weeks, there's a little bit of catch up going on today. not surprised to see a selloff. >> thanks very much. sue, that does it for us here down on the floor for the show. >> thanks, simon. all right. see you tomorrow. "street signs" begins right now. welcome to "street signs." would you day trade your 40 1k? >> apple tv, don't build it. buy it sayings one analyst. we'll tell you who he thinks apple should buy. plus, how to deal with this meh market. and the man who runs sin city's hottest hotel is here with a las vegas update, mandy. >> we begin with president obama at the white house wrapping up a press briefing. john harwood wraps it up for us. john?
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>> reporter: mandy, president obama had been taking flack for not having press conferences and not being available to the press. he chose today in the aftermath of the comments of congressman akin saying that people who have been the subject of what he called legitimate rape can't get pregnant or usually don't get pregnant, that's been denounced by a wide variety of republican politicians. president obama came out, said those were offensive comments. he went on to make some other political points. among them, he was talking about the things that he wants congress to do on jobs and in what may qualify as the understatement of the year, said he wasn't expecting much returning from the august recess. here's the president. >> i would love to say that when congress comes back they've got a week or ten days before they go out and start campaigning again that we'll see a flurry of action. i can't guarantee that. >> reporter: but of course, the
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predominant reason because congress isn't going to do anything business political for this news conference. the president was asked whether he was running a very negative campaign. he tried to step away from that, said the campaign had not gone over the line and former governor romney has gone over the line and hit governor romney not releasing one year of taxes so far. >> this isn't sort of overly personal here, guys. this is pretty standard stuff. i don't think we're being mean. by asking you to do what every other presidential candidate's done. right? it's what the american people expect. >> reporter: the president was trying to make his political points in a sober tone. he was asked whether or not his campaign had suggested that mitt romney was a felon. he said that was not true, although one of his campaign spokes people did say based on the conflict of governor romney's statements and
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documents with the government that either he was running bain capital or a felon. people point to that saying the president was a little bit too e fusive defending the team. >> john, can we ask you why you believe the president chose to have this surprise press conference? do you believe he feels he has momentum? gop's on the heels given the akin comments, the stuff that came out about the sea of gally l galile? >> reporter: there's some pressure that gets applied especially by the media and the other party. against a president and say why are you hiding? why aren't you interacting with the reporters? he was critic on "entertainment tonight" soft focus interview opportunities and so he happened to pick a moment when we knew, sully, the first question about the akin comments and that is a beautiful thing for a democrat to be able to tee off in a
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political year. democrats see them as a place to go on offense. >> absolutely good times i guess. thank you very much for that. let's get back to the markets because stocks are posting modest losses at the moment and still a possibility to take out some multiyear highs by the close. the dow needs to get to 13,279 to chock up the highest close since december twen. the s&p 500 also down slightly at the moment and same time illustrating how steadily the recent melt-up has been and biggest in nearly three weeks. the nasdaq is also down a bit today but nonetheless leads the major averages with an august gain of about 4.5% so far. but here's your shocker stat of the day. americans are collectively $6.6 trillion short of the amount needed to retire comfortably. half have less than $37,300.
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brian? >> you can file this under the heading bad idea. to make up the big buck holes, retirees are trading the 401 ks. joining us is senior wealth financial adviser. herb is also with us. you have been complaining, really, well, for a decade now about this -- about nest egg returns. welcome. >> and various other things. >> actually everything. we'll get to that later on. mark, you write about the trend. people day trading? this is really bad idea? >> i couldn't agree more. it is a really bad idea. one of the biggest challenges and risk that is our investors are facing is longevity risk and the risk they'll outlive the assets. the assets have to outlive the investors and so i advise my clients in that group, i have a handful of those type of clients this is a high-risk proposition.
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that we have to very, very careful and this is not what you do with your core investment strategy. >> well, let's be clear on something here. if you talk about day trading a 401( 1 k, you have to have something to trade. we're talking about the trend of etfs in 401(k) and then -- >> are you against more etfs and 401(k) plans? >> i'm not but the high frequency trading or investors at that level, that economic level wanting to roll or churn their investments like that. >> how many of a percentage overall baby boomers doing this day trading? >> i see it becoming prevalent but, again, if an adviser advising the clients properly they won't allow them to do that more than a satellite portion of the aloe case and investment portfolio. >> look, look. we have a situation of fees upon
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fees upon fees in 401(k). the fees of trading eat you up. they're there for a reason. you do need to actively manage a 401(k). and that is different than trading. but there's a line. i mean, you know, unfortunately too many people sit there and don't look at it. they don't know how to get in to the 401(k) because it's so darn complicateat a firm. >> you make a great point, herb. most investors don't take the time to go online. they have access with the plans. investor that is have access to their i.r.a.s, small business owners and individual i.r.a.s they're starting to do more of that. i'm not suggesting they don't do it but they need guidance. >> is there a good time to do it? >> never a good time to do it without guidance with a financial adviser. because you can risk losing your nest egg and i think a percentage of 5% if someone, if someone feels that they have the rest of their portfolio intact with the right investment goals and strategies in place, they
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can consider doing it but not without -- >> you can be profitable with the rice advise. in other words, still not advise because it's risky. >> the clients are profitable with more leverage. they can buy more shares. >> afford to lose to it. >> of course. >> high net worth wouldn't they do it outside of a 401(k). >> generally it's independently welty and having a retirement fund is an earned account. >> the numbers that mandy talked about, 6.6 trillion. not million or billion. trillion shortfall. >> yes. >> what the hell will we do? >> work longer. investor haves to work longer or get really smart investors. >> shows the desperation. the fact that people have resort to potential day trading tactics shows the desperation out there. >> i think that's partly it and maybe lost trust and confidence in the markets. they essentially want -- feel
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like they can take matters in their own hands. >> where do you see the markets go? >> up. i advice the markets in the process of consolidating for a second half rally and going up. i see volatility ahead and i think there will be a pullback. >> politically-induced second half rally? >> before the presidential election, certainly. afterwards, i'm not quite sure yet at this time. >> thank you very much. appreciate you coming. >> thank you for having me. now to mary thompson with a market flash. >> shares of hibbetts sports today. raymond james cut it. the reason on friday reporting weaker than expected second quarter revenues. up only 4.8% and saying maybe the valuations for the stock don't suggest upside going forward. the stock up 23% year to date and right now down 6%. back to you. >> thank you very much. on deck, if you're going to
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day trade your 401(k) and you shouldn't but if you did it would be in a virtual ghost town because volume's all but dried up this summer. when's the best strategy for trading this meh market? >> it's the big talker of the day. augusta national inviting women to be members. no one ever thought they would see the day. so, you can tweet us your best idea for what's going to happen next, what you think is a long time a-coming. keep it clean, folks. we are a family channel. [ male announcer ] more power. more style. more technology. less doors. the 2012 c-coupe. join mercedes-benz usa on facebook for the best summer sweepstakes.
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we asked last week if dividend stocks were getting crowded. paul hickey told us on friday that over 50% of s&p 500 stocks more than a 10-year treasury at 1.8%. sounds like pretty good news, right, bob? let's start with rick santelli. what do you make of this? >> makes perfect sense to me. i'm surrounded by traders that trade a lot of interest rate futures but the common investor comments are about how to squeeze as much return out of any sectors investments they can. the dividend stocks appeal to many traders on this floor but as interest ratds move up, the competition shifts and i suspect this is going to ebb and flow continually, especially when you consider how quickly we came off the 138 historic 10-year notes up to the 180 to 183 level.
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>> yeah. absolutely. i believe the 10-year yield back above the 2% risk less than half of the s&p 500 stocks have higher yields. bob, back to you. looking to stocks for the higher yields and with the market at multi-year highs and sometimes doesn't feel like it and volume is just so low, my question is, why is the volume so low? >> it's low because there's devastation from the 2008 financial crisis, real estate being down, forced to sell it and sell stocks near their lows. no wonder people have trouble with the whole thing. putting up the volume. this is a four-year chart of -- this is the vix and talk about the volume. four-year low. moving down for four years now. if you look at it, there's a trend line happening for a while now. this didn't happen just overnight, mandy. you can't play volume but volatility. that's something i try to tell people. look at the vix. a four-year low in volatility and there are various exchange
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traded instruments to have. there's a four-year low on the vix. popular one, i talked about this this morning. a vxx. a b a way of buying in to the volatility. you can buy futures contracts out and if you think volatility will pop short term this is a very interesting way to play it. take a look at the trader talk note this afternoon. i talk about the pros and cons of investing in volatility in this low volatility environment right now. >> we'll check it out. thanks a lot for that. the dow may be up more than 8% this year but volume is anemic and many people calling it a meh market. we might disagree given greece, election, china and everything else. perhaps meh is good. how do you play it right now? let's get advice of president of kinsdale trading.
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i understand the comments of volume and volatility, but if i was just looking at volume and volatility as a reason not to get in the market, i missed the run on the dow. >> you sure did. there's headline volatility. but really, in welcoming at the market we have been with the exception of really june and a little bit of july just in a constant grind higher. i mean, averages are up. s&p up 12.5%. that's a huge year. >> you know, i want to just get down to details in terms of some of the trading ideas to play this long, tom. there's one that really stood out for me. up over the past year, 216%. the pro shares ultra short yen. is short yen still a good position to hold? >> yeah. i think it is. one of the thing you do for a meh market is you have to look beyond the traditional, you know, stocks and mid cap, large cap, to different sort of commodities and currencies.
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cramer says there's a bull market somewhere. the fundamental data in china is weakening and in japan they want a lower yen to help push exports higher. so that tells you the fundamental and technicals in favor of a lower yen. the ycs is one way to play that. >> all right. i'm not trading the yen or the aussie, the swissy, the yue rochlt give a stock or two to buy, tom. >> refiners. you are looking for where there's clarity in markets and if you look at the difference and brent and wti crude, the global crude versus american crude, wti, we produce here, the spread nearly $20 which is close to an all-time high. that's a boon for refiners, specifically tesoro and phillips 66 to profit nicely from that using very cheap crude of the shales as an input and gasoline based on brent prices so again looking beyond the comfort zone
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for ideas where there's clarity. >> thank you so much for joining us. just ahead on the show, an auto chocked block. can the new accord do for honda whaut camry did for toyota. we showed you this amazing mercedes last week. wait until you see which car beat it by a mile. plus, mandy, my favorite story of the day. a 102-year-old woman driving her 80-year-old car nearly every day. you have to see it to believe it. she's awesome. >> you have to see it to believe it. well somewhere along the way, emily went right on living. but you see, with the help of her raymond james financial advisor, she had planned for every eventuality. ...which meant she continued to have the means to live on... ...even at the ripe old age of 187. life well planned. see what a raymond james advisor can do for you.
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toyota had great success and now honda hopes the new and improved accord will get the struggling automaker back on track, as well. >> reporter: it should help. this is the bread and butter car for honda and rolling it off the line beginning today at the plant in ohio. here's the new honda accord, 2013 model. doesn't look a lot different. it is slightly smaller than the previous design, updated styling. much improved styling we should add and they think it's going to
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compete in the mid size category of fusion of ford and the malibu and other vehicles. you know, that's a tough, competitive market there. the 2013 accord, built in ohio, honda because of the problems after the tsunami and earthquake fallen to number four in u.s. with 9.7% market share and year to date sales up 18.5% and the accord is once again in the top 5 in terms of vehicles sold in the united states and here are the top five right now. it had dropped down to number eight last year. so they need the accord to come back, especially because all the competition that's heating up looking at the mid sized car category and quickly a look at shares of honda versus toyota and trading in tandem although toyota has done a little bit better than honda over the last year when you compare both of the japanese automakers. but this is a huge car for honda. they need it to do well because of the competition. >> absolutely, phil. all right. well, speaking of cars, on
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friday, we showed you amazing cars hitting the auction block of pebble beach. the autorati, sure they were sure the mercedes would bust records. it went for a lot but not a record. robert frank was there. i misspoke. i'm a car freak. the mercedes was the highest priced auction car and didn't break a record. >> that's right. all-time for a price sold. i'm just glad i didn't break the steering wheel getting in and out of that car because it sold and we'll tell you in a minute but sold more than $260 million worth of cars, that new record. comparing last year, they sold $197 million worth of cars. now, the highest priced car is that mercedes roadster, 1936 car. take a look at the moment, the surprising moment when the hammer finally came down. >> the mercedes goes at $10.7
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million. all done? sold! your car, sir. >> congratulations! >> so that does not include the auction premium of a million dollars so the buyer actually paid $11.7 million. in second place was a vintage ferrari. these are the blue chips of the car world. that 1962 gt sold for $5 million. the big surprise is third place car, it was a ford. 1968 gt 40. part of that gulf racing team. sold for $11 million. the highest price paid for an american car. that car was built to compete against ferraris in the 1960s and it shows it can still compete with ferraris on and off the track for price. brian? >> i want the know what you were doing inside that car to break the steering wheel. >> these are small cabins. people were smaller. you climb in to the 1936 car. huge car. very small cabin. really hard to get in and out
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and without breaking something. >> imagine brian in and out of that. >> no, no. i would rather get in the gt 40 and the le mans winning team in 1968. steve mcqueen drove them on the side. >> this car, it has a steve mcqueen connection. glad you brought that up. >> i didn't know that. >> it was used as the camera car in the famous film "le mans." this car drove 150 miles per hour while they were filming. >> wow. >> those were the days. >> those were the days. >> next year i'm getting in your steamer trunk and coming with you, man. >> going together. >> thank you very much. all right. this story gives new meaning to classic cars. meet margaret doning. 102 years and owned that 1930 packard roadster more than 62 years. she showed off the car this weekend in pebble beach and she did her own car maintenance including crawling underneath to change the oil. she's little hazy about exactly
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when she bought the car simply stating it was in the '40s and estimates 20,000 on it over the years and still driving it at 102. >> good for her. >> awesome. >> that is. what's her secret? >> driving. >> driving. clearly. all right. microsoft goes back to the future. analyst initiating a buy on old softy. >> johnson & johnson makes a list of america's favorite stocks but the company has been plagued by recall after recall. is it enough to make the street squeamish? [ male announcer ] at scottrade,
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welcome back. time for "street talk." look at what's happening with microsoft. you know what? had a pretty good year and is it ready for another breakout is the question people are asking, brian. >> a smaller sell side firm thinks so. a buy and a $36 price target. not only would that be a 14% increase of here on top of the pop it had year to date but microsoft, we'll get to that in a second, microsoft has not been at $36 since a cup of coffee in late 2007 and before that 2001
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and longbow with a 11-run price target on microsoft. optimistic. i want to show you something, mandy. not just mandy but everybody. now can we bring the chart up? windows mobile phones, look at this, i don't know who this speaks more volumes to. this is windows phone here. market share's been weak. blackberry share. they're merging. basically later this year windows mobile phones surpass blackberry in terms of u.s. market share. >> the writing's on the wall or literally on the plasma streen. >> this is my ski slope. this is yours. they will -- >> i go up? i go up? i am damn good at skiing, aren't i? i can go uphill. >> poor research in motion. >> we've just taken a look at rim. let's take a look at another stock. >> and a store. >> let's take a store that's a stock and a stock that's a
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store. research in motion. >> it was upgraded buy to hold at bank of america. that's pretty much what i've got. up a little bit. not a lot of big movers out there. upgraded buy to hold of bank of america. >> price target hiked, as well. usht diageo, will they be the only booze company around? eventually, by the time they go up with every other single booze company, what's sfleft. >> not many are left out there. london times, sunday times and they didn't cite any sources on this but they said that maybe a deal for jose cuervo in the cards. a $3 billion price target of diageo buying it from the beckman family but as herb says -- >> but. >> but, diageo nearly to close the deal in may.
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it's not new. they're up 44% over the past year. "usa today" i don't know if you saw the story. newest trend in liquor. >> sounds so disgusting. >> spiced ice cream sandwiches. >> we had rum raisin. >> you have to go after the -- >> a milky shake with a big -- >> going after the kid's market. nothing left. >> keep the kids happy until they fall asleep and mommy can go out and play. this is your favorite. lurking in the shadows there. >> missed estimates. right? sales dropped 3% year over year and guided down. new enrollment. >> that's the most important part of the story. looking at the numbers. they're while this is going on, ceo using the "c" word. that's challenges. he talked about the challenges going word. >> that "c" word? >> whatever they used, that "c"
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word, an important word to -- hey, i've been talking about this for 20 years so anyway, so used it. came out. talked about new enrollment down, flat. and that is not what people wanted to see. >> okay. zag tanking. makes the accessories with the key boards with the ipad and stuff like that. down 14%. >> could have been the disaster. herb has more on this, too. the ceo unexpectedly stepping down. downgrading this. more to the ceo stepping down. margin calls. stock sales. >> you just said it. >> i pulled a mandy. >> you stole your thunder. your lightning and your hail. >> thunder stealer. >> very good at that. no. >> that's a lightning bolt, thor. >> ceo, the news came out late friday after the close. bad news. been with the company six years. known as an entrepreneur. such a tug of war with the short sellers, grumpy old accountants
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went after them. the ceo sells a big chunk of his shares, not all of them. >> right before -- >> and leaves and the bottom of the filings it says margin call and this is -- remember, this is what we saw at green mountain kauf fee. a concern you have when -- the company put in a clause for its new corporate governance saying no more margin using our stock for margin. >> i have read a report saying there's a potential silver lining and lifts an overhang relating to the ceo's inexperience. no? don't buy in to that? >> this is a battleground stock and continues to be a battleground stock. >> like zuckerberg. he founded the company. >> yeah. another name on the radar is a little fruit company of apple. yet another all-time high for apple and yet another milestone for apple. apple is the most valuable company ever. in the history of the world. surpassing microsoft's number
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back in 1999. hard to believe. let's bring in shaw wu and also with us albert fried and he's got an idea for apple to make them more valuable. that in a second. shaw, to you, what else can you say about apple? where's the next hundred bucks a share going to come from? >> yeah. so we think china's going to be really key for the company. and for the stock. china they still have, you know, they have been doing well there. but they don't have the largest carrier there. china mobile. with $650 million subs. they currently work with china unicom with 180 million subs and china telecom with 90 but haven't gotten china mobile, the big one. we think that could be a huge catalyst for the stock. >> nonetheless, shaw, what would indicate an interim peak? what would make you start to get
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nervous about the lofty levels of the stock? >> so the stock tends to trade well in to product announcements and big one is the iphone. the next generation iphone. aka iphone 5. so we think the stock likely to trade well in to that but after that it takes a little bit of a breather. you know? short term. if you look at the previous launches, iphone 4, 3gs. a near term thing that could put a little pause to the stock. >> all right. thank you very much, shaw. now i want to get here to rich. rich, all right. you don't cover apple but everybody's talking about this potential apple television, whatever you want to call it, even though they have a -- they have apple tv. we forget that. you think that they should buy tivo. how come? >> all right. so apple tv is the black sheep of the apple family if you will. it's been out for roughly three years. it would cost the average family watching 151 hours of tv a month about $6,000 a year for paid tv
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if they get the content through apple. apple's been talking about coming out with an stb platform. retail price of $650. it sounds too us from what they wanted to do that they should buy tivo because tivo has the formcipate building out. tivo has streaming capabilities. they have a graphical interface capables. they have the ability to target and through the latest announced deal with paypal they have the ability to collect money and sell you a product through your tivo box. >> i want to ask you, though, rich, an outperform on tivo. they have a 15 buck price target. how much of your recommendation on tivo is an assuming there's some kind of bid from apple? >> absolutely none of it. okay? we're not speculating that tivo acquired tomorrow or the next day. we think that the big value
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driver in the near term of tivo are these dvr court cases with verizon, cisco, time warner and motoro motorola. we think they're settled out between $500 million and $600 million. >> they have to settle them, rich. i'm sorry to interrupt. they have to settle them or win them. they're leasing dvrs to more and more people every month. eating tivo's market share. >> that's absolutely right and one of the reasons why we think apple or microsoft should buy tivo because they have customer relationships with comcast, with charter. with virgin media in the uk. with australia. with rcn. covering about 78 million subscribers of the pay tv channels that tivo had relationships with. >> okay. rich and shaw before that, thank you very much for joining us. i like the title of the report. stop banging your head against the wall.
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buy tivo already. sin city sunshine for you. plus, we'll get the scoop behind the rather strange ad from the cosmopolitan hotel's ceo. >> thunder bolt or lightning? very, very frightening me. >> gallileo. >> i'm a poor boy nobody loves me. it's something you're born with. and inspires the things you choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people
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when technology works for you. to dream. to create. to work. if you're going to do something. make it matter. well another great thing about all this walking i've been doing is that it's given me time to reflect on some of life's biggest questions. like, if you could save hundreds on car insurance by making one simple call, why wouldn't you make that call? see, the only thing i can think of is that you can't get any...
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coming up at "closing bell" stocks posted hot summer gains but investors pulling money out of stock mutual funds s. that a sign that this could be a head fake rally? plus, facebook shares nearly half of their $38 ipo price. you know that. is it time for the founder and ceo mark zuckerberg to step aside and let somebody with business experience run the company? we have a bull and bear debate coming up on that. chess champion to champion of democracy in russia. coming up, garry kasparov discusses his recent arrest for free speech in his home country.
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first mary thompson with a market flash for us right now. >> shares of coventry health care up. other insurers are down on the news because they have big medicaid businesses. reason, of course, purchased coventry and so there's pressure on the stocks because many believed they would be the next take-out candidate. centene down and molina and wellcare down on the news. mandy? >> thank you. betting on a little sunshine, wynne resorts up on comments that gaming revenue run rate could be monthly record rates in las vegas sands up. >> you stopped using conjunctions at some point? >> you know, we want to like cram as much information in to a very short amount of time and decided to lose conjunctions from now. speak very fast and short. >> another las vegas hot spot cashing in, sunshine slot machines. cosmopolitan, las vegas.
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the unemployment rate is 12.1%, one of the nation's highest but the ceo says he sees thinking getting better. european tourists helping local economy. i'll go back to conjunctions. joining us is ceo of the cosmopolitan of las vegas. i haven't been to las vegas in a number of years but you are the hot spot in vegas. so tell me about the occupancy rates. where do you stand now versus one year ago? >> we have been open for a year and a half now and since opening we have been running market occupancies so that market of 150,000 rooms runs about 85% occupancy. we are slightly above that with the highest average daily rate in the market. >> so you have the highest average daily rate and slightly -- so how do you do that in this economy? >> we create an economy that's a point of view and an experience that's different. try to cut through in a sea of sameness and resonated with customers. >> in terms of the ad, showed it
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with the viewers, you really do have kind of a different in terms of some of the ads with people fluttering around with money and on the gaming tables and whatever and you have bohemian rhapsody as a point of view. has that changed business at all? have you had a good response to? >> a great response. awareness numbers are up. we have got a tremendous amount of business both domestically and internationally. people talk about our commercial. they love the cosmopolitan it's different than what else is offering in las vegas. >> you have a lot of demand i believe from, germany, for example. >> we do. our international business is growing. as a market, our international market is grown about a third since 2007. we are up to about 16% of the business internationally. we opened a brand new international terminal at mclaren airport so june 27th and we have just expanded in to
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latin america in a big way. copa airlines now comes to las vegas five times a week. they open up 50 different markets with direct service of latin america and already expanded to -- announced the expansion to seven days a week. >> deutsche banc controls you guys. talk to sell the company. what's the status? can you give us an ownership status? >> they have been great partners for us. they have given us the resources. the management team is committed. we are on a great trajectory. we are at plus 50 million of ebita compared to last year of minus 10 and trajectory is strong and building a brand and a business. >> deutsche banc had the recent troubles. you know a month ago announced layoffs. declining investment revenue. no possibility for them to raise cash and sell you, for example? >> well, that's difficult question for me to answer. we're employing 6,000 people in las vegas. it's very strong for the las
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vegas economy. and our business and our trajectory is really strong. we're both looking for -- >> what's your favorite restaurant? >> in new york? >> no. las vegas. >> that's like asking which one of my kids is my favorite. we have a great restaurant collection. resonated well. travel & leisure announced in the 2012 awards, best of awards. cosmopolitan is one of the top 50 big city hotels in the world. no other casino resort in las vegas. >> depends on the mood and same for kids, right? like -- >> normally i have one kid, one favorite. thank you very much. good luck. >> great. pleasure. coming up next, america's favorite stocks. johnson & johnson is a focus today. >> looking to restore confidence after a series of recalls, integrations, new acquisitions. two top analysts to talk about a favorite and widely owned stocks. johnson & johnson. stick around.
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all day cnbc has been breaking town america's favorite stocks. today we are focusing on johnson & johnson. a favorite of dividend seeking investors. over the past decade that stock is up about 22%.
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but j & j has had its share of big problems as well. it's nearly impossible to find tylenol on the shelf these days. >> that's interesting. johnson & johnson has had to face a number of product recalls over the past couple of years across several business units. here are a couple of the notable rahms. one you mentioned, of course, extra strength tylenol was recalled back in june due to a musty odor. tylenol cold gel caps recalled shortly after in august. in december of 2011, motrin was recalled due to some potency issues. aveeno baby lotion in january. in february, liquid tylenol for infants after parents complained about the dosing method. while the consumer side of j and j's business -- investors are more focused on j & j's strong
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growth in pharma which brought in $6.3 billion last quarter. in an effort to further shore up consumer trust, j & j last november said it is planning to take potentially harmful chemicals like formaldehyde out of baby products. last week j & j announced it's on track to have those products including no more tears shampoo reformulated with safer ingredients by the end of 2013. some of its adult products like aveeno and clean and clear by the end of 2015. beyond restoring products back to store shelves, mandy and brian, the ceo says j & j is focused on integrating its largest acquisition to date in the medical device space and lastly build on momentum of its pharma business. >> thank you for that. it seems as if the recalls have not affected the stock necessarily negatively. but have they maybe been holding it back? our next guest says j & j's consumer business will be the new ceo's top priorities and the
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sector will only get butter. joining us now, tony butler, managing director of barclays. is it possible to surmise if it hasn't had problems with recalls what the stock would have done? over the past decade it's up 22%. >> it's a great comment. there are three businesses as you pointed out in your vignette earlier. i'm not sure if the stock would have done better if the consumer recalls had not occurred. the pharmaceutical business has had its challenges as well. they've had a number of patent expirryes. importantly those patent expiries for a short period of time seem to be behind them. the momentum of the pharmaceutical business as commented by alex gorsky is clearly important. that's to be driven by a number of new products, some laurjed last year, some launched additional in other geographies this year. of course, the integration of
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sinthies. it makes j & j a stronger business globally. >> any reason for them to bust up into a few parts? look at the success abbott has had over the last ten years or so, tony? a lot of people questioning the current structure of j and m. >> it's a fair point. number one, in my humble opinion that's a short term solution to the reason the stock behaves the way it does. on a consolidated basis maybe you can actually look at the breadth and depth of j & j products. if you believe hospital consolidation will continue, the argument is to be a one stop shop may be the best opportunity for the business. that's at least what the ceo believes. it has been the focus of j & j over the past several decades. >> we've got to leave it there, tony. thanks for your insight. up next on "the closing bell" google, it's another widely held stock star. will privacy issues stop the momentum there? stick around for that. up next on this show,
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augusta finally does the right thing. we've been getting a ton of responses. we're going to bring you your thoughts from twitter, next. [ male announcer ] this is rudy. his morning starts with arthritis pain. and two pills. afternoon's overhaul starts with more pain. more pills. triple checking hydraulics. the evening brings more pain. so, back to more pills. almost done, when... hang on. stan's doctor recommended aleve. it can keep pain away all day with fewer pills than tylenol. this is rudy. who switched to aleve. and two pills for a day free of pain. ♪ and get the all day pain relief of aleve in liquid gels.
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opens for the season. rich learner of the golf channel, this kind of came out of nowhere? why the move by augusta now? >> well, i think it was time. it's that simple. and i think -- i'm not going to tell you that i knew this was happening. but billy paine, the chairman of augusta national and the masters tournament, i think gave us a window into what he was thinking at his annual, sort of, state of the masters press conference just before the tournament. he talked about growing the game around the world. and the natural follow-up question was, well, if you're going to grow the game around the world, don't you have to include women? at that point, he wasn't prepared to make the public statement. but you could see it coming. and, in particular, paine has been a forward thinking man, going back to his days with the 1996 summer olympic games in atlanta. so i think it was just a matter of time.
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so why now? because this is to be exact the time of year when invitations are extended to members. and keep in mind, too, that ms. moore and ms. rice presumably are not the only two to have been granted membership. the only two women. not the only two people. >> thank you very much for fiming fim i -- filling us in. golf channel and cnbc are part of the comcast family. we should note our chairman brian roberts is also a member of augusta national along with other top business world names like warren buffett, bill gates, jeff welch and former ibm chief sam pom san know as well. we have certainly been getting a lot of twitter responses to our segment earlier today about more baby boomers who are trading their retirement funds. shadow stocks says i make more in day trading than investing. >> christopher moulton says i have no problem trading my


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