Skip to main content

tv   Power Lunch  CNBC  November 6, 2013 1:00pm-2:01pm EST

1:00 pm
sponsors. steve roth, simon properties. >> it's been great having both of you here. >> thank you. >> we'll do it soon. watching the market, the dow up about 100 points right now and that's pabasically where it's bn the last half hour or so. "power lunch" begins right now. >> "halftime" is over and the second half of your trading day begins now. >> thank you very much. recordbreaker, the dow hitting a new high, up almost 20% year to date on track now for its best year in a decade. watch out, a new wave of cyber crimes plaguing computers all over the country. the designer breaks in and then holds all of your personal things, music, photos, passwords, e-mails, for ransomp. you have to pay up to get them back. when the sun shines on solar stocks, this sector has been very bright for much of this year. is there more life ahead? first let's check in with sue at the nyse?
1:01 pm
>> hi, ty. the dow did hit a new record today. the s&p not yet, but 25 stocks in that index did hit new records. let's check the markets for you. the dow jones industrial average up 97 points off its high of the trading session. the s&p up 5 points. the nasdaq composite is really, perhaps, the most interesting index right now of the day. down 13 points. and look at that chart. it shows a steep drop earlier this morning. the nasdaq dropping in large part due to the fall of apple tesla and celgene. apple down.3%, tesla down 15%. joe is chief market strategist with u.s. trust division of bank of america private wealth management. bob joins me here on the floor as well to talk about this market. joe, i'm going to start with you. as we move into the latter part of the year after such a spectacular performance by stocks, do you think the s&p
1:02 pm
500's ten sectors will have a perfect ten all ending the year with double-digit gains? >> you know, sue, i do. it's very interesting, it hasn't happened since 1995. so even the so-called laggards, telecom, utilities, up 14, 15% and i think there's good liqu liquidity from the central banks around the world. a lot of retail investors coming back into equities. a host of reasons why i think we it continue to push higher across all sectors. >> now they've had pretty spectacular gains so far. how much more do you think is in this move and do you think that perhaps just a modest advance, that certainly would provide us with a very strong end of the year, but is there more after that or not? >> that's a good question, sue. i unequivocally i don't think we're going to repeat in 2014 what we saw in 2013. so positioning year ahead you have to be selective. we're looking at the industrial materials, information technology, some of these companies more leveraged to global growth because we see that picking up. next year you have to be much
1:03 pm
more selective. >> joe, we're all excited down here, bob pisani, by the way, twitter will be trading tomorrow right at the post behind us and the market is excited and aflutter about the whole thing. your thought on the markets and ipo business right now? what do you think of twitter and the broader ipo market right now? >> i mean, bob, as you've been reporting the ipo this week alone is pretty robust. to me that's a sign of confidence. companies are coming forward, investors biting. it doesn't mean a market top. it doesn't mean we're going to see anything negative on the outside. but i do think it's emblematic of more confidence, global growth, the u.s. economy picking up and if we don't get any problems out of washington this is going push higher. >> is that what keeps -- i'm sorry, bob. go ahead. >> go ahead. >> twitter boosted its price 23 to 35, thou25. are you interested in twitter? what are you telling your clients? >> we like information technology and the number i always use, remember two-thirds of the world has never logged on
1:04 pm
to the internet, which is another way of saying, whether it's twitter, whether it's all these i.t. companies out there in that space, there's a lot of global demand. there's a lot of upside set. we like i.t. for the long term. >> what keeps you up at night, joe? what does worry you? you mentioned washington. sounds as though this is on the list that might derail this move in the market. what else? >> i'm keeping a close eye on a relapse in europe. the recovery is fragile but that's typical coming out. i think investors aren't paying enough attention to the middle. there could be a shock out of there. i'm not worried about china in that sense. basically what keeps me awake is washington. we need a more business-friendly, functional washington, for the markets to have a good year in 2014. >> all right. joe, thanks for joining us. always a pleasure to speak with you. joaquinlan, chief market strategist. >> folks, thank you. the nasdaq dropping a bit today.
1:05 pm
there are several reasons why and you see that steep intraday fold. it's not all that dramatic, 13 points, it was higher earlier and then fell off the table. sheila dharmarajan is at the nasdaq. >> tyler, very unusual. you rarely see the nasdaq down on a day when the s&p and dow are so strong. but that's what we are seeing today, both the nasdaq 100 and composite down about .3%. a lot of selling happening. tesla, down more than 15%. of course that earnings report that deliveries number perhaps disappointing investors. you're seeing that pull down the index. also vareissic an lytics, down more than 8% after its earnings report. that stock down below its 200 day moving average. have to mention apple that stock down about .6 %. not the big declines we saw in the other names but, of course, having a huge impact on the index. when i talk to traders what's happening at the nasdaq they say it's a tough tape. they say these high beta stocks
1:06 pm
are now downlet that are gic, not a great combination because those are the names that brought the nasdaq up and that's where we're seeing the pullback today. >> sheila dharmarajan, thank you very much. what you will see in a second is not a movie. it is, obviously, maybe not so obviously, a video game. sales of activision blizzard's "call of duty ghosts" is off to a huge start. julia boorstin live in l.a. with all the money behind it and ahead of it. >> activist says "call of duty ghost" has sold more than $1 billion into retail stores worldwide on its first day, calling it the largest console franchise of this generation. this doesn't mean that consumers actually purchased a billion dollars worth of the $60 games. that's the amount retailers hands. it's an apples to oranges comparison to last year's "call of duty black ops 2" which sold half a billion dollars borts of
1:07 pm
games in its first day. they say activision is probably holding off on releasing the seams numbers because gamers are expected to wait until they can buy the game bundled with a new xbox and play station consoles which are launching in coming weeks. for now, grand theft auto 5 from take two interactive is still the top-selling game. in september, grand theft auto 5 sold $800 million in its first day on sale. activision's earnings call is after the bell today, so we will be listening for more details. tyler? >> let me make sure i'm understanding this. they, retailers have in their inventory, a billion dollars worth of at retail prices of that game. not that they've sold a million dollars -- a billion dollars. >> a billion dollars has shipped to retailers. some of that has been sold already. there were, you know, significant presales, there were lines outside games -- thousands of game stops opened at
1:08 pm
midnight, monday night, tuesday morning, but we don't know how much of that billion dollars has been sold. the fact that retailers -- >> sold to somebody. got it. >> have gotten a billion, means they expect to sell it eventually. we don't know how fast it will sell. >> thanks for clearing that up for me. appreciate it. the problem with obama care taking center stage once again on capitol hill. this time the health and human service secretary kathleen sebelius went before the senate finance committee. democrat controlled senate. compared with last week, bertha coombs where she was on the republican controlled house side. >> she still got tough questioning from both sides of the aisle. senate finance chairman max baucus, in fact, warning the secretary not to wait until the last minute if, in fact, there are signs that website will not be fully functional as promised by the end of this month. the republicans continue to hammer on the issue of plans that have been canceled and also on the issue of security both on the site and involving those in-person navigators not
1:09 pm
required to undergo federal screenings, here's senator cornyn. >> so a convicted felon could be a navigator and could acquire sensitive personal information from an individual unbeknownst to them? >> that is possible. we have contracts with the organizations and they have taken the responsibility to screen their individual navigators. >> reporter: secretary sebelius did not shed much light on just how much details she would have when she does finally report those enrollment numbers next week. >> the enrollment numbers, which we will release next week, which will be the first month of enrollment, are likely to be quite low, given the struggles that people have had getting access to the site and getting information. >> while her fellow asked her to resign right during the hearing today, orrin hatch said he was willing to work with the
1:10 pm
secretary to make this rollout work, although he doesn't believe it will. sue? >> wow. what a heated exchange. thank you very much, bertha. appreciate it. more new clues about the health of the housing. diana olick has them for us and also live in washington today. hi. >> hi, sue. lots of housing reports out today. let's get right to it. mortgage applications plunged down 7% week to week, even as rates fell slightly. refys down 8%, applications to purchase a home, down 5%. and looking back four weeks those purchase applications are down over 8% and that core lathed to the drop in signed contracts to buy homes. there's your downside. going up are home prices. so much so, that fitch ratings said the national housing market is 17% overvalued with prices up over 12% from a year ago, fitch is calling growth, quote, unsustainable. they're using the "b" word to describe many california cities.
1:11 pm
all cash sales in the state are about half the market indicating investor demand and foreign buyers. what's interesting, though, is that the report lists several markets that have seen big price hikes. so like las vegas, up 25%, stockton, california, up 26% be they consider those undervalued or sustainable. of course these were the worst hit housing markets from the time of the crash. another report today from the realtors says housing is still largely affordable for most americans, figuring the national median income of around 64,000 and the median priced home of 207,000. that with a mortgage at 4.4%. of course we know that home prices diverge dramatically across the united states, so here's my last report, i promise. caldwell banker lists the most affordable market as cleveland, ohio, and the most expensive, drum roll, malibu. there's plenty more on that on-line, realtycheck.cnbc.com. >> shocking to hear about
1:12 pm
malibu. thanks very much. a new computer crime wave is under way and it's a serious one. this time, whoever is behind it, is literally holding people's personal files, your music, e-mails, your photos, for ransom, and asking you to pay them hundreds of dollars per victim, to get your stuff back. how can you protect yourself? we'll have that story, next.
1:13 pm
1:14 pm
1:15 pm
welcome welcome back to "power lunch." big news on blockbuster. an end of an era for the video rental stores. blockbuster is shutting down its 300 remaining stores and u.s. dvd by mail service. both of these will be closed by early january. now this announcement was just made by blockbuster's parent company dish. ceo joe clayton saying in a statement the company continues to leverage the blockbuster brands in its digital offerings even as it shutters all physical parts of the business. this speak to the rise of netflix and other video on demand options. >> it's amazing the speed with which that store has now gone away. i mean you think back a decade, and how powerful they were. thank you very much. dominic chu, i've been missing you, dominic, so far. we're a quarter into our show
1:16 pm
and haven't heard from dominic yet. >> first thing's first, i will say, it says a lot about me, i still use blockbuster. >> really? >> i know i do. >> you are old school. >> i am old school. talk about our market flash. halliburton coming off its lows of the session, rising to session highs after announcing a 20% hike in its dividend to 15 cents a share. the ceo is saying that company anticipates more systemic buyback and expect announcements like this one to occur more frequently, so sue, halliburton shares, shareholders at least seem to like it. back over to you. >> they sure do. up 1.3%. a major hack alert. a new malware which is going around that holds your personal files hostage until you pay a ransom. john fortt is on the case and this is a very serious situation. john? >> yeah. it's called cripto locker. here's how it works. this file sent by overseas most likely appears as an attachment in your e-mail, tries to disguise itself as a pdf.
1:17 pm
if you open it up it's an executable file and it starts to communicate to an outside server and then encrypt the files on your pc. now, normally this might be a good thing if you meant to do it. keep other people from viewing your files, but in this case, they don't give you the key to unlock them. as a matter of fact, they put up a pop-up window then that says give us $300, payable in dollars or in bit coins, or we'll explode this key basically make it inaccessible to you and you never see your files again. over the past couple days, they started offering you a follow-up if you don't do it in three days, for five times more we'll give you access. how to avoid this. don't open odd attachments and make sure you have up-to-date anti-virus software. third, something i found i do quite a bit, work in the cloud that way you're not running executable files on your device either way, guys. >> that's a good idea, john. very good idea. and you've got more with eamon,
1:18 pm
right? >> yeah. eamon has done a lot of work on this issue from washington. also with is james, global head of research security, his company has been trying to spread the alarm about this. james, let's start with you. how widespread is this problem and how did you guys become aware of it? >> so this problem is astonishingly widespread and we're seeing thousands and thousands of cases every single day. it's not a new concept, this idea of ransom ware, malicious code that encrypts your data has been around for a while, but this is the most widespread example we've seen so far. >> eamon, how widespread is this particular type of attack where they're going in and locking your specific files and if you see how it works, it's actually kind of customer friendly except for the fact that they're fleecing you? >> yeah. john, i would be outraged if somebody did this to my computer and got my pictures of my kids growing up or something like that. that's data that i have a huge
1:19 pm
value for and maybe not anybody else, but i would be inclined to pay but i guess my question for james here, when you do pay up, if you say okay, i surrender, i'm going to pay you, do these guys actually unlock the files or just take the money and run? >> you know, it pains me to say this, but this particular cyber criminal gang is remarkably honest in the large number -- >> honest thieves. >> they actually do -- who would have thought. >> right. >> they do unlock the data. i suppose that's probably based off the economic theory that by word of mouth, they want you to hear that if you pay, you will get your data back. but remember, this is one example of this kind of campaign. other copycats will follow and they may not be so honest and some of us will have moral scruples about paying cyber criminals on principle. >> you guys have been able to do a little research here into how many bit coins have transacted as a result of this and where that money is going. can you give us a sense of how much money has been paid and
1:20 pm
does that tell you at all how many people have been impacted by this thing? >> yesp. we get to see the tip of the iceberg if you will. some of the bit coin currency is more traceable than some of the other conventional traditional electronic payments. and we're talking millions of dollars worth of funds here. >> wow. >> which are then disappearing off into very much the conventional black holes that criminal s our traditional criminals would use. this is a very, very big business. >> wow. holding your digital life for ransom. thanks, eamon and james, tyler? >> thank you very much, john, eamon and james. twitter, of course, gearing up -- if you're not scared enough, twitter is gearing up to go public tomorrow. reporter nick billton got access to twitter's founders getting access to hundreds of sources, documents, internal e-mails and a lot of internal disputes. we'll talk with him nextp. >> coming up, power pitch.
1:21 pm
start-ups give us their 60-second pitch and we give you inside into the fast paced world of venture capital. >> at lot of things they said i hear from other day care and boarding providers. >> i'm looking at the bottom line. >> do these founders have what it takes? >> are you in or are you out on canine resorts? >> stay tuned to find out. doesn't like being sold to. who the last thing i want is to feel like someone is giving me a sales pitch, especially when it comes to my investments. you want a broker you can trust. a lot of guys at the other firms seemed more focused on selling than their clients. that's why i stopped working at my old brokerage and became a financial consultant with charles schwab. avo: what kind of financial consultant are you looking for? talk to us today. sometimes they just drop in. always obvious.
1:22 pm
cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
1:23 pm
afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.
1:24 pm
after last week's power pitch tournament of champions, now we're back finding new people, the power pitch where we give founders 60 seconds to pitch their company to see if they have what it takes to become the next big thing. >> i'm julia boorstin and on today's power pitch we have a company creating a five-star hotel experience for your dog. jason and steven parker are the co-founders of canine resorts day care and luxury hotel franchise and they're also joined by their seven-month-old rottweiler pup enzo. when mom said no to having a dog they started a pet sitting business at 12 and 14 years old and now barking all the way to the bank. let's look at their power pitch. >> my name is jason parker and
1:25 pm
i'm the co-founder and president of canine resorts day care and luxury hotel. i'm also proud to be the youngest franchiser in america. this is my brother steven. >> i am steven parker, co-founder and ceo. over 56% of u.s. households own a dog. over $4.5 billion is spent each year in boarding and grooming alone. pet owners are tired of leaving their dogs in traditional boarding kennings where dogs return home dirty, sick and unhappy. pet owners were desperate for a better solution. in 2005, canine resorts day care and luxury hotel was born and revolutionized the pet care industry. jason and i said, if five-star hotels exist for people let's make one for dogs. >> canine resorts is an award winning pet care facility. we provide day care and cage-free overnight boarding to dogs. say good-bye to cramped cages and cold concrete floors. guests relax in luxury suites which are rooms with orthopedic dog beds and plasma tvs. canine resorts, come see, we're
1:26 pm
better. >> steven and jason on the right side of your screen. they can hear us but can't react just yet. on our power pitch panel, andrea arden, she's author, certified pet trainer and animal planet's dog's 101 host named the best dog trainer by time-out, quest and "the daily news" and joined by her pup nora. and kay, ceo and chairman of copvictims and company, her firm specializes in growth and marketing strategies for early to late start-ups. co-founder of spring board enterprises and founded usa network. let's huddle up on canine resorts day care and luxury low tell. andrea, start with you, what's your thought? >> a lot of the things they said i hear from other day care and boarding providers that it's luxury, that it's like home, but i would like to know the specifics. what does that really mean? what sort of training or certification do the providers in their facilities actually have. >> kay, what's on your mind? >> i would like to know what
1:27 pm
kind of occupancy is needed to make it a profitable operation. >> i am curious to hear how this business is going to work when there's so much competition. do they have to invest in marketing, et tceterap. now they're in the hot seat and time to get grilled. >> i would like to know what is the cost of the franchise fee that is being paid by the people you're licensing to and how long does it take them to break even on that fee? >> the franchise fee is a $40,000 fee paid to the company and the initial investment to get in ranges between about 696,000 to a little over a million dollars and we think that they should be profitable in about two years. >> i hear a lot of terms like cage-free and home like, but what are the real specifics of what you're providing that really sets you apart from the competition? >> actual cage-free suites, luxury suites with dogs, 9 by 9 in size, orthopedic mattresses, plasma tvs, outdoor window
1:28 pm
views. floors that have micro built in that will kill bacteria on contact. everything designed to be as close to the home experience as possible. the staff goes through an independent training program from the boarding kennel's association so that each staff member is certified before they can become a staff member at canine resorts. >> sounds like your dog has some very big opinions there. my question, what about all the competition, what does he have to say about the fact that there's so many other services offering dog boarding out there? >> we're the only pet care facility in new jersey rated number one by multiple major publications for the past several years. you walk into a canine resorts doesn't look like a dog hotel, doesn't smell like a dog hotel. special air filtration so there's a reason why we're the number one name in the industry. >> any final thoughts? >> i see that you have three locations and operation and you have ten in filing for the franchise. what is your plan for rollout? >> right now, our plan is 100
1:29 pm
stores within the next seven years but the stores isn't the most important to us. we would rather be number one in quality, number one in quantity, but to answer your question, our goal is 100 stores within the next seven years. >> well, it sounds like that rottweiler has very b big opinions. you heard what jason and steven had to say. are you in or out on canine resorts? >> kay? >> there's a lot of good attributes for their hotel, their five-star hotel, but for me, i think that the rollout is too slow and i think that when you really get down to the business i'm out. >> i would say i'm in because people spend about $4.5 billion a year on boarding and grooming and so i think it's a pretty big market and i think they have a good chance of succeeding. >> and i personally think this is such a huge market, people are willing to spend money if they can have asharnss their pets are well taken care of and i'm in. what's your reaction to the votes? >> we're glad we have two out of three people that have given us the thumb's up.
1:30 pm
that means a lot to us. >> this is a business that is franchiseble. we do have competition that has proven that model. they have over 200 units and we're looking to make ours bigger and better. >> thanks so much to jason and steven of canine resorts and kaye and andrea. that's the power pitch. >> well, with that rottweiler sitting there barking i would have voted i was in. no question about it. i would have said in. are you in or out on canine resorts? logon to power pitch.cnbc.com. or go to twitter and comment with the hashtag power pitch. gold prices closing right now. sharon epperson is at the nymex. hey, sharon. >> hey, tyler. we're looking at a little gain here in gold prices. gold is closing slightly higher and the fact that we're seeing some weakness in the dollar is part of the reason that has sparked demand for the precious metal. traders say it's stuck in a range here between 1305 and 1325 an ounce. what's key here for the next
1:31 pm
move in gold is what happens friday with the jobs data. back to you. >> all right. thanks, sharon. very much. to chicago right now, let's check in on interest rates and how they're fairing. rick santelli tracks the action at the cme every day. >> hi, sue. if you look at a 24-hour chart you can see that rates aren't at their highs of the day, but if you consider yesterday they're still holding their gains. how do we know this? look how much steepening is going on the fives to tens, the yield separation, you open it up, these are basically two plus-year highs. that is important because everybody loves the five-year but they seem to be selling long maturities. the last chart dollar index doing worse because all the majors are doing better. part of that is the ecb meeting tomorrow. back to you. >> all right. thanks very much, rick. hours to go until twitter goes public. so how did a fledgling start-up go to change the entire world? "new york times" investigative reporter nick billton got
1:32 pm
unprecedented access to twitter's founders, sources, documents and internal e-mails and we will take you inside twitter like never before. right after this. ♪ [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪ can help you take charge of your future. i have obligations. cute tobligations, but obligations.g. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors
1:33 pm
choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. at a ford dealer with a little q and a for fiona. tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee, affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. get up to $140 in mail-in rebates when you buy four select tires with the ford service credit card. where'd you get that sweater vest? your ford dealer.
1:34 pm
1:35 pm
twitter twitter starts trading tomorrow. did you hear about that? twitter. they're going to trade, ipo. should you get in and at what price if jim cramer had this to say last night on "mad money". >> i am giving you my blessing to pay up to $28 on twitter that starts trading on thursday, far more than people were talking about paying for the company even though nothing new has happened to it. >> first on "power lunch" "new york times" reporter nick billton his book "hatching twitter" a look at the betrayed friendships and power struggles among the four founders. and welcome, good to have you with us, nick. >> thank you. >> what a magnificent feat of timing you pulled off to have this book come out this week. >> i wish i could say it was intentional but a lot was luck. i knew it was going to happen around this time. >> accidents can be a good thing, nick. they can be a good thing. >> that's true. >> all right. a lot of this book focuses on
1:36 pm
the four founders and the new ceo. but let's talk about the four founders, glass, dorsey, stone and williams. did this company succeed, despite them, or because of them? >> well, one of the founders said to me that the company succeeded in spite of itself and i would agree with that. you know, these were four guys that came out of nowhere had no money and accidentally built something that changed the world. evan williams, he grew up in clarks, nebraska, a town, 262 people, and you can kind of see the way these people they came to the valley in search of gold money and essentially built this thing that has changed everything. >> i'm indebted to julia boorstin for some of these questions because she follows twitter, obviously more closely than i do. would this company be farther along or maybe even profitable, if the infighting, the political jealousies between the four founders, had been not so intense? >> i don't think so. i think that chaos is what led to the company being successful.
1:37 pm
i think you look at any company in the valley there's chaos throughout. it happened to apple, facebook, it's happened to pinterest all these companies and twitter as i talk about in the book you see all these instances of chaos, of one founder pushing the other founder out and it led essentially to, you know, what we have today which is the twitter that exists. and there are these great stories of jack dorsey who believed that twitter was about sharing what he was doing at that moment in time. you had evan williams who believed that it was about sharing the news and what was happening around you. the chaos between the two of them and pushing each other out of the company is the chaos to what twitter became. >> lots of users, billions of tweets, fair amount of revenue now, but no profits. why has it taken this company so much longer than it took facebook to turn a profit and whose owes to blame for that? >> if they wanted to be profitable they could be profitable today. stop hiring new employees, they're at 2,000 employees now, pulling a 600 million in revenue, over a billion next
1:38 pm
year, and i think that they're also buying a lot of companies and doing this to try to compete with facebook. and so they wanted to be profitable they easily could be. i think if you look at -- this is the whole story, the book -- >> much less adroit at the advertising game, wouldn't you say sp. >> absolutely. this is the thesis of the book, is this thing literally started as a little tiny project and next thing you know it's being used by everyone, revolutions and businesses, oprah, cnn, everybody is using this thing in all different ways and they couldn't build the advertising because they were trying to keep the company afloat. >> let's get to the sort of ultimate question. you're not a financial guy. you're a financial writer. you're not an investment adviser nor an analyst of equities, but you must be asked, just as i am, you know, continuously at social events, would you buy the stock. >> would you buy it if somebody asked you at its ipo price? >> i'm not allowed to buy stock at "the new york times." if i was i would buy it, this is
1:39 pm
not just a pitch for my book, i would say read my book first because the chaos and what this thing became, it's not over yet. it's not a finished done deal yet. the people that pushed each other out of the company are still, you know, they're on the board, they're still involved in some way and also, the whole thing, the question that people ask is, would you buy the stock but they also say, what is twitter? i think you really have to kind of read this or even understand the past to be able to actually understand what the future of the company looks like. >> we appreciate your being with us today. >> thank you. >> and making us high on your list of interviews. i know you're going to be much in demand -- >> are you going to buy the stock? >> like you, we can't buy individual securities. >> if you could, would you? >> i would not. >> really, wow? >> not at the ipo price. i'm very just constitutionally weary of ipos, frankly, and, you know, facebook is one reason why. >> we should make a $20 bet to see if it goes up or down. >> i'll do that. >> let's do it.
1:40 pm
you're on. >> all right. >> but six months from now. i want to know whether it's above or below. tomorrow it's going to trade above the offering price. six months from now let's see. >> just based on the numbers i've seen i think it's going up until 2015. >> nick bolten, there you go. here it is, "hatching -- there i am. hold the book by the face. there you go. "hatching twitter." nick, thanks very much. >> thank you very much. appreciate it. >> sue? >> ty, the day you buy the stock, you know the math is an indicator, the day you buy the stock everybody out there should short it. >> that is absolutely true. i have a long and inglorious history. >> i love you dearly, but yes, you do. >> so true. >> all right. so we asked the question, should you stay away from twitter? we asked our cnbc digital financial adviser council a group with nearly $23 billion in assets under management. how they are advertising their clients. we asked, are you recommending twitter to clients in its ipo or after it begins trading?
1:41 pm
more than half responded to our question and they all said no. a bit of a social media investing trend might be emerging. 67% said their clients stayed away from facebook as well. we'll keep you posted. coming up after a quick break, she is called the tiger woman on wall street. her powerful strategies for global investing from shanghai to new york, coming up next. plus on-line retail giant amazon making independent book stores an offer they can't refuse. but is it a deal with the defvi? the dow up 111 points we're back in two. ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor.
1:42 pm
get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. the ocean gets warmer. with the mobile trader app. the peruvian anchovy harvest suffers. it raises the price of fishmeal, cattle feed and beef. bny mellon turns insights like these into powerful investment strategies. for a university endowment. it funds a marine biologist... who studies the peruvian anchovy. invested in the world. bny mellon. stick with innovation. stick with power. stick with technology. get the flexcare platinum. new from philips sonicare. shhhh! i have a cold with this annoying runny nose. [ sniffles ] i better take something.
1:43 pm
[ male announcer ] dayquil cold and flu doesn't treat that. it doesn't? [ male announcer ] alka-seltzer plus fights your worst cold symptoms plus has a fast-acting antihistamine. oh what a relief it is! one of the one of the top ranking women on wall street. heading up the boutique equity
1:44 pm
research shop jl warren capital her book called "tiger woman on wall street winning business strategies from shanghai to new york an back." first on "power lunch," she joins usp. congratulations on the book. >> thank you. >> one of the things i enjoyed about it is, it's -- it writes about trading the market through your personal experience and your emotional experiences which is very different from a lot of other books on the market. one of the things you say is, this is a tough business and you really have to do your homework and you take exception to the idea that the market efficiency theory holds true. why? >> i think if there's anything, i hope the takeaway of the book, for the readers, is do your homework. and the purpose of the book is really to show how to conduct exhaustive, meticulous,
1:45 pm
investigative research and that's what we do day in and day out. there are a few good book on china out in the market, but most of them are, you know, sort of a journalistic approach sort of talking down, talking about the economy, talking about which sectors and industries to invest. i wanted to use something different, which is bottom up. sort of to show and not tell anecdo anecdotally talk about what each company tells me and the conversation i have with them and collectively connecting the dots that give me a sense of where the state of economy. >> you basically say, you have to do exhaustive research if you're going to be a successful investor and you also say one of the mistakes people make is, they buy a stock thinking they are buying the company. the heading in this chapter is "stocks are not companies." and now that we're having twitter ipo tomorrow. >> yeah. >> it is yet to turn a profit. but people are going to buy the stock thinking they're buying the company. would you buy twitter at this
1:46 pm
point given what you've been able to glean about it? >> i'm not an expert on twitter but i would recommend chinese twitter to our clients, sena, which is effectively the chinese twitter. it is -- i think it's an interesting trade because if twitter is priced about like 25, which looks like it will be, if not higher, much higher, then the market cap is about 15 billion market cap then it's on average i would say it's about 7 75s per user so theory it should be about 7 to 10 billion u.s. dollar business, then cena should be about 120 to 120 per share and sina trades at $80 per share. >> your pick to sina and it trades in the u.s. >> good luck with the book.
1:47 pm
and you live in both cities at various times during the year, so i know you know a lot about that. it's a pleasure to have you with us. >> thank you. >> detroit's newly elected mayor will have to tackle the motor city's ongoing pension problems. quite obviously, others are in the same boat. cities and counties owe $574 billion in the pension liabilities. researchers at boston college have found on average pensions eat about 8% of municipal revenue. on the low end, pension funding costs taxpayers under 3% of revenue, on the high end more than 12. the city with the biggest burden is little rock, arkansas. of the 173 cities analyzed, detroit came in 61st. there's the top five. amazon dangling a carrot over independent book stores. sounds enticing but should those book stores go along with the offer? or the author so to speak. colorado voting to tax
1:48 pm
recreational marijuana to fund public projects. are marijuana backed bonds next? would they go up in smoke? power rundown, 30 seconds away. coming up on "street signs," at the top of this hour, twitter is grabbing the headlines but so many ipos to choose from this week and year. which ones do you pick and how? also it is a stock that's gone
1:49 pm
parabolic over the past week, in an up and coming sector, what is it? a look at technical and fundamental case for it, but you have to find out what it is if you tune in or watch the show. all those things and, of course, lots more, guys, on "street signs." back to you on "power lunch." >> all right. thanks very much. we've been having too much fun here getting warmed up. power rundown time. michele caruso cabrera and john fortt, wall street focusing on a high stakes chess tournament in india, why, michele, is there such a fascination on this? the challenger is a 22-year-old norwegian from my father's home country. >> they call him the mozart of chess. because he is such a prodigy, he is mediocre rise and say he is the best player since bobby fisher against an indian guy -- >> why is wall street interested in this? >> many of them are absolute chess freaks. ken rowgof, frequent guest on cnbc, grand master, chris flowers is a big player.
1:50 pm
boaz winestein, also a big chess fan. a lot of chess fans on wall street. >> john, you have an oar in this lake? >> i'm not a good chess player. >> neither am i. >> we don't play the stock market either but they say stock market, it's chess, not checkers. i guess it makes sense. >> big on the internet. who else is big in this rex sinkfeld. >> okay. >> i believe he's a st. louis guy. >> angry birds tournament -- >> you're probably good at that, call of duty -- >> he's only 6 years old but a prodigy as many. >> portland, maine, legalizing marijuana and in colorado they approved a 25% tax on pot to fund school construction. here's what richard hefrack said about this movement on "squawk box." >> if you were bonding the revenue from the colorado pot tax, do you think that would be a more reliable source than the detroit real estate tax?
1:51 pm
maybe a high quality -- >> higher rating for sure. >> right. >> triple a. >> triple a weed. >> i mean, i guess it would be more reliable than detroit real estate but aren't you then sort of hooked into encouraging pot use. >> just like tobacco deals and everything else. >> money comes from all kinds of taxes -- >> richard lefrack was joking but being pressured. a marijuana muni bond is coming. >> amazon giving book sellers a discount on kindles and the stores will get a share of the profits from every e-book purchased on the devices only for the first two years. if you were a book seller, would you do this, sell the device that might ultimately mean you're not going to sell your print and paper book? >> i'm totally divided. i think that's what you're doing. this is the classic if you can't beat them join them question, right, but people are going to buy them no matter what.
1:52 pm
maybe you sell them and -- >> join the -- yeah. >> i think maybe you do it, but you can't rely on that to fuel your business. you got to sell more accessories. human interaction or you're going down. >> let's go to the last of four topics. c-ta c-tac washington, passed a resolution to raise the minimum wage for $15 for workers at and near the airport. it was $9 already in the state of washington. >> yeah. >> so 9 to $15 minimum wage hike. whoa. >> this is for baggage handlers, folks that clean the planes, fuel the planes, hotel workers. not for the people who work in restaurants. i'm not a big fan in general of high minimum wages but i think it would be great if they figure out useful work for folks to do good enough to get paid higher. >> there shouldn't be a minimum wage. every time you raise the minimum wage you raise unemployment. there's going to be fewer of them. they should know that. >> you raise the cost of something you get less. >> less jobs is what they've
1:53 pm
done. >> they need people to fuel the planes. >> most of the jobs i would think would be unionized anyway. thank you very much. we have to leave it there. sue, down to you. >> citi reports after the bell. shares have been on fire. are the solar stocks full of hot air? we'll talk about it.
1:54 pm
1:55 pm
solar city reports after the bell. the stock had a big run up, 400% this year. should you own solar? >> here's jackie deangelis. >> good afternoon. solar city isn't the only company in the space that's logged massive games. solar up nearly 100%, canadian solar up almost 700%.
1:56 pm
analysts are cautious. >> this is a commodity business. margins are going to be cyclical. they have picked up and there will come a time when they will come back down. >> there aren't some bright spots in the space. the chinese solar names, they've done very well. that's because margins are improving, volumes picking up and the government helping spur demand. u.s.-based companies could see some growth, domestically at some states providing special incentives, but these companies have international exposure as well. the industry is also going through consolidation phase and it's not just the larger solar players shopping around, it's also strategic players looking to get into the space so who could be next? >> advanced industries, market cap 800 million similar to power one, also in the solar inverter business, and the nice thing about that is unlike the package manufacturers, this is actually a much less commodityized
1:57 pm
business, higher margins. >> the bottom line, the bar is high for these companies. sometimes even good results aren't enough to keep the stocks moving higher. while these are high, they may not continue to be shining stars. sue? >> thank you very much, jacki. when we come back, three big winners. the dow up 111 points. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade-proud to be ranked
1:58 pm
"best overall client experience."
1:59 pm
i have obligations. cute tobligations, but obligations.g. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.
2:00 pm
with the dow up 11 points, three winners. that's it for us. >> that's right. "street signs" begins right now. got got beautiful wide open shot, kyle. thank you. everybody is talking twitter but will everybody try to buy twitter when it ipos tomorrow? should you bother? if you invest vested $1,000 in other high profile offerings like amazon how much money would you have today? some of the big numbers. other hot topics the retailer that may be the worst run of them all and a stock of a company of the company that could change the world or the way we build it.

145 Views

info Stream Only

Uploaded by TV Archive on