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tv   Fast Money  CNBC  September 2, 2021 6:00pm-7:00pm EDT

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edition of "fast money." i'm melissa lee. jim cramer is off tonight. the northeast trying to recover fro the deadly storm massive flooding and even tornados forecast for the rest of the season and the plan to beef us ourinfrastructure. an plus a new crackdown in china. president xi wants to set up a new stock exchange to list there. what impact could this have on our markets. and later, so long seltzer, bye-bye beer bellies, booze
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stocks falling on hard times as tonight guy adami and mike khouw. but we begin with hurricane ida that ravaged the gulf coast over the weekend. record breaking rains, epic flooding, a number of tornados more than two dozen people have died so far. this is what parts of new york city subway system looked like last night, nearly four inches of rain blanketing the city in one hour and a baseball stadium in new jersey, wnbc chopper 4 capturing these images the aa affiliate of yankees played there and look at water up to the roof of the cars. the streets covered. thousands in the northeast still without power in the gulf coast, that number is still hovering around a million so what could we expect from the rest of the hurricane season let's bring in dan leonard from
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the weather company. great to have you with us. >> hey, melissa. >> it hasn't been good so far and we're entering a very active couple of wieeks ahead. >> it is unbelievable, who would have thought flooding in the northeast. but just amazing but that is what you get when you get two months worth of rainfall in a few hours. it is just catastrophic flooding in the northeast damage from this storm alone is going to be in the bills of dollars. and we haven't even reached peak hurricane season yet, that comes september 15th but some of the data is suggesting that we may quiet things down a little bit for the second half of september which would be a great break right now we're in a period of enhanced tropical activity thanks to the wave that goes across the globe every 45 days or so. right now it is over the atlantic sos that why we've seen so much tropical activity. you have this enhanced convection and more likely to
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get storms but i think that wave is going to continue to move across africa and back into the indian ocean and then the atlantic will quiet down and if all goes according to plan, we should have a drier second half of the month than the first half of the month. it looks like we have a couple of more weeks of very active weather and then we should start to quiet it down a little bit more. >> are we looking at more disruptions to the energy industry, dan? >> well it is funny, the disruptions, you look at it and you had a category four hurricane go into one of our business yes energy ports in the country, port fourchon and you pretty much knocked everything offline and you have a ton of shut-ins so you expect prices to spike because our supply was disrd disrupted but a lot of traders say there is a difference on the supply and demand side you have rain and power outages
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from the wind and then your demand for electricity goes down so there is a balance there. even though your disrupting the supply, you're disrupting the demand as we saw yesterday in new york city, the pulls down the demand for cooling. so that is what you get in these kind of situation where's there is a lot of price volatility but at the end of the day you're trying to find a balance between the demand and the supply. so i think going forward what we want to look for here is if we could get a hurricane into texas. that is a big supply disruptor into some of the busier ports between houston and corpus christi. but right now it doesn't look like that is going to happen it looks like the atlantic seaboard if anybody is under the gun over the next month or so. but again that is something we'll have to watch more closely over the coming weeks, melissa. >> dan, great to speak with you. dan leonard of the weather company. guy, i think that is interesting in terms of the balance there and so we haven't seen that
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translate into a spike in energy prices as we have in the past. >> yeah, it is interesting people try and obviously we're tasked to trade around these things but we're not -- we are sensitive obviously to loss of life and the loss of goods, services, all of those different things so let's be respectful there but that being said, trying to trade commodities is difficult to do. home depot will winter this. the stock is obviously sold off over the last couple of weeks but it found some footing today. so if you're trying to figure out who is the ben ferashy here, my sense is home depot is at the top of the list. >> you need plywood and dehumidifiers. mike khouw, where would you go. >> i think home depot would be a good choice. there are more do-it-yourselfers that would bolster they are
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competition in the form of lowe's and home depot being about 40% of the revenues from the professional side and i expect to see a pick up over there. and lowe's did get a boost and home depot did not and i think home depot is the bet play here even though it is slightly more expensive. >> when you see what the storm does to our electricity, guy, it puts it out, basically, does that make you think that infrastructure is a better bet i mean infrastructure has been sort of a slow-moving thing that is happened in our stock market and we thought infrastructure, infrastructure and it is sort of in a current in the market for months now but does this sort of underscore the need and therefore underscore the importance and profitability of this sort of investment >> without question. and you're starting to see it in the form of a lot of the stocks that we talk about on "fast money" each night, u.s. deals had a big move but look at what alcoa did today. and does that fall under the infrastructure umbrella.
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it absolutely does you're talking about a stock that back in the spring of 2018 was seemingly making a new high every single day only to be thwarted by the tariffs that the trump administration put in place. whether for good or bad reason, i don't want to play politics, but then you saw the subsequent move lower over the last couple of months, this stock to me is going to continue to go higher. i think you'll see analysts start to upgrade this name into their earnings release in the fall so how do the stocks play out? i think right under the infrastructure headline is names like alcoa and freeport macmoran and u.s. steel >> mike, what is your take. >> in addition to materials, names like that, i think some industrial names might be poised to benefit as well i mean first of all, when we think about infrastructure, we should probably be thinking beyond just these one-off incidents and also be thinking a little bit about whether we do at the end of day get a big infrastructure package and that could be a tail wind for some
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stocks that are not like the market trading at all-time highs like caterpillar, that is one of the names that i might take a look at. although technically and this is where i have to defer to guy, it is not looking that great. i look for points of support there. but i do think that this might be a better opportunity provably than it has been when you consider that the stock hit its highs a little bit ago. >> let's talk about infrastructure and a infrastructure bill passing. the monster storms overwhelming our power grid as we saw our roads an rails and ports you name it. let's bring in trevor higgins from the center for american progress great to have you with us. >> thank you very much. >> do the storms that we've seen resently, does it change your the prospects of the bill passing? >> i think so. i think that congress is poised here to deliver major investments and the storms are terrible tragedy that highlight the need for this type of investment and we're looking at weeks without power in louisiana and the deadly flooding showing in
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new york it is a wake-up call and it follows on a heels that a summer saw drought and wildfires and massive flooding if it feels like we're facing disaster on all fronts it is because we are this is what climate change looks like and it is only going to get worse from here so the pressure is on congress to act. >> we think about upgrading the grid and our infrastructure in general, we're thinking about making it more modern. when we think about forging ahead to a greener future to putting more evs on the the road, et cetera, are we able to imagine a bill that will support a grid that could not only just support our needs right now and bea little bit more weather proof, but also support the ambitions of the biden administration and others who want to put many, many more evs on the the road. >> i think the good news is that these things work together well. if you think about in a disaster
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situation, we need yes to harden and bury transmission lines and also need to make our power less on single points of failure, like solar panels or back-up generators and if you have, if your library is able to maintain electricity because of the solar panels and maybe a battery, well you would go charge your cell phone or charge your car there if you had an electric car. so there are redundancies and multiple overlapping systems strengthens or dealing with disasters and the investments that congress is proposing is interlocking they have new money to help with the wiefls and reduce greenhouse gas emissions and new money for transmission lines and new money for energy storage, both of the things i was just talking about. clean electricity and for electric vehicles. and all of these solutions are going to work together and
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building them is actually going to really be great for the economy. >> trevor, we're going to leave it there thank you so much for your time. we appreciate it trevor higgins mike, as an investor, do you think about, well these issues in general, but also whether as we as a country are thinking about our energy sources from a diversified standpoint we make much of that when building a portfolio, but when it comes to our energy reliance, do we think about enough other sources of power like hydrogen or are we just thinking too much about electricity? >> well, i mean, of course when you're talking about hydrogen, it is usually to create electricity. when we think about the honda hydrogen vehicles and so on. ultimately it is going to come down to electricity as far as personal transportation whether you're doing that with a
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battery, via solar or wind or built up a better electal grid infrastructure i think tesla, speaking about the generation side in texas, is clearly indicating that they see it as all basically part of the same story and one of the things that we've seen in the utility space is that this actually is going to smooth out so when we think about increasing the capacity on the the electricity side, weoch just think this is creating a huge demand and that huge demand is unmet but our generation. but it is important to remember that this smooths out of the demand typically speaking our electrical grid experiences the highest demand during the business day but for those people are electric vehicles, we have a couple of them and it is plugged in at night and that could improve and smooth out something that has been very hard to contend with which is spikes and troughs in demand for electricity. but we do need to build up the infrastructure and something that creates some security on
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location for people to have these batteries in their cars and if they build something like a power well, they could supply energy to the car and demand from it. but i think utility prices have demonstrated that some investors recognize that this increased demand and also the smoother nature of that demand is obviously a boost for them >> i mean, when you talk about increased demand, the average electric vehicle requires 30 kilowatt hours to travel 100 miles and that is the same electricity an average american home uses in a day so that is a big strain. but if you could smooth that out, maybe with smart grids, smarter features in the grids, that could really help >> and b.k., he talks about tesla being that play for years now. and look, the stock sold down to 550. but very kai quietly tesla has put in this without people paying attention this stock seems like it wants
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to make the next leg higher and that could very well be to $900, the previous all-time high so tesla in a very bizarre way might take care of all of your needs to the things we've been talking about for the last 10, 15 minutes. >> up next, china's crack down on businesses big and small continues. the latest move by president xi to keep capital on the main land so long unicorners hello dragons. where wall street is hunting for a mythical beast this episode of "fast money" will be right back with directv stream, i can get live tv and on demand... together. watch: serena williams... wonder woman. serena... wonder woman... serena... wonder woman... ♪ ♪ ace. advantage!
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and there you have it— -woah. wireless on the most reliable network nationwide. ♪we got it, yeah♪ wow! -big deal! ...we get unlimited for just $30 bucks. sweet, but mine has 5g included. relax people, my wireless is crushing it. that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one upping itself. switch to xfinity mobile and save hundreds on your wireless bill. plus, save up to $400 when you purchase a new samsung phone or upgrade your existing phone. learn more at your local xfinity store today. welcome back the chinese government continuing to flex its muscle with the business community. president xi anouning new moves on the main land euniceon filed this report. >> during a virtual speech at a
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services fair, the president announced that china would deepen rear forms of the new third board and set up a beijing stock exchange making the capital a center for innovation oriented smes. not much detail about the new exchange though china stock regulators say they are very excited to implement president xi's order separately, china tightened controls on show business, promising to reign in salaries for celebrities and ban artists who have incorrect political views. krp companies are scrambling to fall in line alibaba is investing more than $15 billion to support the common prosperity goals and weibo shut stock tips accounts with millions of followers this they were deemed by beijing as bad mouthing chinese financial markets. >> thank you for more on the china crack down let's turn to joyce chang at jp
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morgan great to speak with you again. >> great to be with you, melissa. >> you're a long bull on china but right now you say it might be pruden to be on the the side lines. why. >> it is for the equity markets good to be on theed side lines when china talks about common prosperity, they're talking about long-term. acleaving common prosperity by 2035 so i think it is difficult i think you could see this extend further and they've been very clear if you look at the five-year plan, at the sectors that they're going to target, that is related to innovation and also to the green agenda and it is also focused on income inequality so you could see more measures that are coming out that effect the housing market, and higher property taxes, and also more pressure to increase wages given the level of the disposable income in china, it is still quite low compared to the cost of housing and many
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goods. so i don't think this is over yet. i think in the chinese equity market you're better to stay on the side lines right now. >> you're been a china watcher and i'm wonder if there is anything different about this round of reforms either the cadence of it or the areas it is targeting versus in the past. >> well this is a focus on the new economy. but this is something that we've seen in china before for sectors that had to have very rapid expansion in early stages, china has clamped down we saw this in the past on the telecom sector we also saw it in shipping so this is not new nor is it anti-capitalist. there are long-term goals china is trying to achieve and they focus to focus on consumer and social welfare so this does mean a much greater focus on the cost of housing, of transportation, of education, of basic goods that are consumed as they developed a larger middle
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class. so i think you're going to see this ongoing tilt. and the focus is on self-sufficiency they want to own their own supply chains and the listings on their own exchanges and remember also in the last days of the trump administration, all of the proposals about delisting in the u.s., they want to get ahead of what some of the measures could be that could come up in the u.s. congress after we're done with budget reconciliation, the infrastructure and tax package, there are a number of bills focused on china that have bipartisan support that i think you will hear more about later in the year. >> joyce, you've been right to be cautious. obviously since halloween these stocks here that trade in the u.s. have not traded particularly well. but the question is, seemingly so much has been discounted already in the stocks, is that a fair assessment or do you see still further headline risk in these names? >> i think you're probably more than hafrl way through this
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round of the cycle but make you're at the 60%, 70% point of it but you do see the companies in china are trying to react to this and come out with measures that promote common prosperity given the government's long-term focus. but i think there is more to come you could see this going into 2022 valuations are getting more attractive right now and i think just simply looking at five-year plan, the sectors that they have recommended still have opportunities as well and so i think that the finding is difficult right now and what we have been recommending that investors do is really stay more in the government bond market for china. and there we have seen this having very little impact. the yield deferential is still attractive and chinese government bonds are going into the index. we do think that as there are more concerns about growth in china, we have flattish numbers for the third quarter that you could see more rate cuts coming as well. so i think the right way to play
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china right now is through the chinese local government bonds where we have an over weight recommendation. >> joyce, as s.e.c. chair againstsler has said it is time to comply with u.s. regulators demand for more information and more transparency and that could be into their books, into their contracts, et cetera you name it. is it a possibility on the table in your view that major chinese tech stocks in the u.s. could get delisted because they don't want to comply with this standard >> well, i think that you have seen that the rules that will go into effect on november 1st will require greater transparency so i think on both sides, you see just more these regulatory measures coming on online. and in china itself it is looking at regulation at three different levels at the sector level at the security level and also at the cyberspace level so do think the u.s. and china
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are similar in they are trying to reach usher their own self sufficiently working on making less supply chains where they're not as dependent on each other and it is moved from a trade war to more of a tech and cyber war and i think that is with us to stay that is the long-term strategic full fledged competition between the u.s. and china >> joyce, thank you so much for your time. we appreciate it joyce chang of jp morgan mike khouw, you could get in any of these chinese tech stocks is there value here you're willing to take the risk for >> well there is value i think it was about six or eight weeks ago we were having this exact same conversation and i think at the time my words were that i thought that the chinese stocks were uninvestable one of the things that i said which is that baba is growing at
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about 20%, if it was a u.s. traded company, a u.s. company, probably would have been out to $400 a share and i think it was $210 a share when we have that conversation now it is at about $170 and to your point, i do think that there is a line in the sand that we should think about which is that china is not going to dismantle these companies. these are halo companies for china and of course they provide economic benefit i mean the issue is also as we were just discussing, that it was important, it is important obviously for some additional regulation on the securities side but i'm not talking about information security, that sort of thing i'm talking about a maturing capital markets in china and there were some short comings there with respect to how transparent the companies were both locally and abroad with the true state of their economic affairs. but i do think that some of the bigger companies like baba begin
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to look for attractive on a valuation basis. but i wouldn't expect that the weakness in the share price is completely over. >> but, guy, you've said that you think baba is tradeable? >> absolutely. and if you watch "fast money," which airs each night at 5:00, you go back to halloween, bobby t -- boo by the way and in the spring of this year we talked about that in earnest saying there is nothing really here and i will tell you, on august 23rd something changed stock traded down to 152.80 on a significant amount of volume we talked about it that night. that was a capitulation day and i think you have a window of opportunity to continue to trade these stocks specifically alibaba on the the long side and it could still be in the down trend of lower lows and lower highs an trade up to 205 and that would be in tact. and i think we're heading there
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which percentage wise is significant. not to dismiss anything that joyce or mike just said. you still have some serious headline risk and i think there is an opportunity in the next couple of weeks to be long this stock. >> up next, you heard it time and time again, one man's trash is another man's treasure and for some investors today that is music to their ears. we'll explain whether this special edition "ston" llonoffa mey baaam. internet that doesn't miss a beat. that's cute, but my internet streams to my ride. adorable, but does yours block malware? nope. -it crushes it. pshh, mine's so fast, no one can catch me. that's because you all have the same internet. xfinity xfi. so powerful, it keeps one-upping itself. can your internet do that?
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welcome back it. check out shares spl of the trash stocks first up waste management hit an all-time high today. best level in the company's history. it is up more than 30% next up republican services dating back to the ipo back in 1998 shares surging more than 30% this year. trash or treasure, guy i feel like that is a new "fast
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money" game. trash or treasure. >> i like that game. i know you're a molly hatchet fan because it is not a band and when they're album came ut, i know that was on your play list. >> that is a trick question. >> there is no trick questions one song was another man's pleasure is another man's pain and that is woo what we're talking about. waste miami and wrm and rsg and republic services continue to make all-time highs. servedly so. but at a certain point, valuation will matter. they're both trading close to 28 1/2, 29 times forward earnings with 11 1/2 growth and they both could continue to rally into mid-october or so and that is the first time at 6:00 in the history of this network that molly hatchet has been mentioned. >> i think you are right on that one. i can't remember another time.
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mike, too expensive, these stocks >> yeah, i mean, guy sort of read my mind on that i mean the last time that we saw va valuations like these and these are growing businesses and stable businesses and i think we'll see about 5.60 or $5.70 for 1 1/2% yield and there was only one time prior in the last 20 plus years that we've seen something like that. and that was actually in the tech bubble area, we're talking about 1999, 2000 and this hasn't been near these multiples since then so this is a situation if you're looking to buy these stocks at these valuations, the risk-reward relationship doesn't look that favorable in my view. >> still could tom, shares of bud taking a beater and the analyst said the company is not doing enough beyond beer what exactly that means. we'll talk about that. but next we're on the the clock.
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the countdown to on to tomorrow's job reports steve leishman will join us for the set number the special edition of "fast" will be right back t of convenie, or necessity. we can explore uncharted waters, and not only make new discoveries, but get there faster, with better outcomes. with app, cloud and anywhere workspace solutions, vmware helps companies navigate change-- meeting them where they are, and getting them where they want to be. faster. vmware. welcome change.
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the countdown is on for tomorrow's jobs report and beginning this weekend millions of americans will stop collecting their specialcovid unemployment benefits. let's get to steve liesman on the the state of the job's market steve. >> good evening, melissa another strong jobs report expected tomorrow but there are indications of down side reports. we have the adp and suggesting
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that the delta variant may have dented but not derailed it you have claims on the steady decline and you have back to school and hiring and education and the people home to go back to work because the kids are going to back to school and jobs have been robust and you have the delta variant hitting the south hard and some leisure and hospitality jobs, looking for 720,000 to be reported for august after a really strong 943,000 in july, the unemployment rate seemed to drop to 5.2 to 5.4 about ten million americans stand to lose emergency unemployment benefits on september 6th, eliminating some $6 billion in payments that is trying to be replaced with salary and wanl income but economists think jobs could come
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later. most studies show ending benefits is only a minor increase in employment if any at all. one that i was reading the other day the others at harvard and elsewhere found that 25% of those who lost expended benefits found work after they lost that check, compared to 21% that found work while still getting the check. still modest deferential there jay powell calling for the taper this year. but he may want to see how some of the risks develop like ending the unemployment claims and the delta variant. but a blow out number tomorrow could change that giving more support to the many fed committee members who want to announce that taper in september. >> the thing, though, is that if he decides to wait because there are unknown factors involved, the next jobs report will not be clean either because of the impact of the hurricanes now, it is going to be sometime before we have a quote/unquote clean report to actually glean
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anything from. >> you know, i think the fed, and this is some reporting that i did this week, is going to be less worried about the noise from the hurricane they actually have a lot of high frequency data and direct data that lets them pinpoint the source of weakness relative to a hurricane or a natural disaster. that began by the way post katrina and then it improved under harvey and matthew and some of the other hurricanes the fed gets a lot of realtime and very, very specific geo coded data on what happens with some of the natural disasters. i think they would look past that and their much more interesting in the delta variant and the lasting effects of that. >> steve liesman, thank you. >> pleasure. >> we live in a world, guy, where good news is bad news. bad news is good news. so, what are we hoping for tomorrow
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>> in a world, you like how i did that you were setting me up for that. i'm going to use this term and you're going to sort of wince when i say it, but it is probably going to come out just where the market needs to it be because that is what we've seen over the last couple of times. the unemployment rate is what we're looking at correctly so but the number i'm looking at is where were we on the wage inflation metric maybe mike has some thoughts on that as well to me that is the final piece of this inflation puzzle when we see wages increase, now does that sort of put the fed now back in play in terms of this taper happening sooner rather than later and maybe the rate hikes happening sooner rather than later so i'll be looking at all of these things but it the wage number that i'm looking at most closely. >> let's dig deeper into this with kiss mar. ocean first bank great to have you with us. >> great to be with you.
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>> and you see what businesses are seeing and so what are they seeing right now in terms of the strength of the economy and labor shortages? >> yeah, the labor shortages are acute. the labor market is so hot right now. so i think the issue is finding the people in the right geography with the right skills to get done what the economy needs to do. our customers and we span a wide market we cover from baltimore through boston our customers are uniformly telling us they're having great difficulty finding labor in all sorts of disciplines and i think that is a persistent issue. >> is that hampering the business's ability to do business and to bounce back? >> there is no question that it is restraining our ability to move the economy forward we have the kind of twin evils of the supply chain issues and those are coming unstock a little bit at a time but the labor issues are more pronounced a customer does a steel
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manufacturing business and they're seeing early retirements in numbers they have never seen before because people that took time off during covid are re-evaluating the way they want to work post covid and i think wetalked about school safety and parents not willing to go back to work until they understand better what that school experience is going to be for their kids so this is going to take some time to sort itself out and we've to get get around the labor shortage and turn to automation to fix it. >> chris, i don't know if you heard i said before you came on. but wage inflation to me is the final piece of this puzzle that we've now been talking about seemingly for the last five years. how important are those numbers in your opinion? >> oh, they're very important. we're seeing shocking increasing in wages across the board. so when you talk to for example our customers that employ tradesmans, they are demanding
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and getting 20% increases to stay on the the job they're on and the real question is is this a transitory thing where those kinds of demands and the ability to meet those demands is temporary. or whether that is going to persist throughout the fall and the spring and it is really just a function of the backlog our clients have more work than they could deliver so their willing to pay more for labor and materials in order to get that work done. >> are they then charging the customer more for whatever goods or service they are providing? >> that is a great question. not only are they charging the customer more, but customers are willing to pay more. so in ordinary times, that kind of price resistance would be out there, our customers are charging more, they're getting more and we're hearing store yours like people say hey look, i don't care what i need to pay as long as i have certainty to keep my business moving forward. so it is a very unusual world out there and it takes some time to figure out where it goes.
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>> chris, great to have you with us chris mar of ocean first bank. mike, how do you think this all shakes out yes, wages are going up. but businesses are able to pass on the price increase. >> yeah, which is basically another way to say inflation is not transitory but real. obviously we saw walmart announce today that they're increasing the minimum wage. not up to the levels that some people who talk about these things all of the time would like to see, $12 an hour is what they're talking about. but coy tell that you certainly anecdotally it appears that people are having a hard time filling jobs and we have this question about whether supplemental your unemployment insurance was creating a drag or friction on getting people back to work where we're probably going to get the answer, the differences between the businesses saying that it is a problem and economists who say it isn't, including your alma mater, we're
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going to start getting an answer to that. but the if the inflation could force the fed's hand and if it does that turns what has been a consistent and persistent tail wind for risk asset in general potentially it goes away and it could turn into a head wind. >> up next, after parties during the pandemic, beer stocks are sliding this summer and it is not just beer. the hard seltzer phase is fizzling out as well but booze never goes out of style. so will the stocksoue ba stay tuned
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welcome back to the special edition of "fast money." beer stocks having quite the hangover after a big spike during the height of the pandemic anheuser-busch and inbev falling 3% and jp morgan downgrading the stock. and it is not doing enough, quote/unquote, beyond beer and this is nothing to do with meatless beer. the rest of the sector falling boston beer down over 1% over last three months it dropped 45% and coors down today over 20% over a three-month period as well so, i mean, is hard seltzer five minutes ago. enough with the beer, guy. i thought these were reopening plays in terms of people going out once again and going to venues and that is where they might consume much beverages. >> perhaps first of all, i hope that the
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hard seltzer fad is come and gone that is me you could at me if you like. but it is not lost on me by the way that boston beer company traded up to $1,300 and whether it is coincidence or not, when they started playing the insipid commercials that say from boston, which makes me want to scream, the stock has gone nothing but down the stock traded down to 560 today. cohen a week or so ago lowered the price target from 825 to 400. they might be right. there is still down side in the names. so i take some glee in this and i shouldn't but i think you could see what is happening here the stocks are all under pressure, rightly so. >> but a tenant of your argument, guy is that boston beer brought it upon themselves with terrible commercials. >> i don't know what tenant means. >> a pillar --
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>> yes, then you're exactly right, mel 100%. >> i agree i hate those commercials, no comment on the stock from me, though but mike, what do you think? >> well another tenant of investing is valuation and in the case of boston beer works it went a cheap company and it isn't a cheap company. but i don't think that applies to all of the companies. when you look at anheuser-busch, inbev, this is not a massively expensive company now. if you take a look at the last ten years of their performance they've seen probably 31% retch growth over that period of time. where the problem lies is they've seen 46% increase in the cost of goods sold and perhaps what we're seeing is a dichotomy between what they're charging people and what they're being charged. but i do think that of those companies, and i agree it doesn't necessarily look like there is a bottom in any of them but of them anheuser and inbev
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is the one that i would pick on the the long side if i was trying to pick any. >> all right up next, a flurry of complaints about the mcdonald's mcflurry and the government is on it. wall street has spent the last year trying to find unicorns now they're hunting bigger money beasts dragons. we'll explain. stay tuned that building you're trying to buy, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you see it. you want it. you ten-x it. it's that fast. if i could, i'd ten-x everything. like... uh... these salads. or these sandwiches... ten-x does the same thing, but with buildings. sweet. oh no, he wasn't... oh, actually... that looks pretty good. see it. want it. ten-x it. yum!
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welcome back to the special edition of "fast money." a few years back, hot private
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tech companies became known as unicorns start-ups worth a billion dollars or more. but now one of the folks behind the name thinks we need a new one. a billion is nothing these days, right. he wants to call the private monsters dragons dan permack with is us now what is a dragon >> a billion dollars isn't nothing. and you can't scoff at it. if i create a company worth a billion dollars i'd be pretty happy. the dragon the way we're defining it is $12 billion valuation after you subtracted the money they raised from venture capitalists because some of the companies have raised over a billion dollars >> i like that you have it not to be distracted entirely by your background but you do have a unicorn. >> i told my daughter she needs to paint a dragon. that is on the the -- >> that is on the to-do list i'm sure guy has made this point that there are so many unicorns out there, it is sort of undermining
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the whole term unicorn because it should be a wear mythical beast not a common one and it is becoming a common thing in the financial markets now to have unicorns so what happens with valuations overall. >> there is over 800 of them as of last week that is goble and not just in the u.s. i think we said there was 19 of them globally, half in the u.s companies will still go public there is no shame in going public as a 2 or $3 billion company. the pipeline is full of them but the question is when the dragons go because these are the hugs ones that move markets. if you think back to when facebook went public, it was a unicorn when that meant something. so these other companies strike, spacex and companies like that, when they go public it is something all of wall street watches. >> what unicorn is in the pipeline at this point -- i mean dragon. >> there are not a lot to go
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public one of the reasons that companies could grow to this side because they've waited, take strike and spacex, they could go public at a drop of a hat and they've actively chosen not to. >> dan, i think a lot of function of the fact that they're now unicornies are everywhere, spacs and so many spacs out there, so few targets. is that a function of this driving up valuations maybe unjustifiably? >> i think a little bit if you're a venture capitalist and driving up the valuation in the private market, generally speaking you've gotten paid for driving up the valuations. there hasn't been any harm in it but stocks as a piece of that, it is certainly inflating it but ipos have as well. most companies that have tried to go public via an ipo has v done so successfully and a good premium to trade in the private market several years ago there was a bunch of sass companies that went public and underperformed and became what we called
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under-corns at the time. billion dollars companies that came under that. we're not seeing that any more. >> just curious, were there any other mythical beast in the run, i mean was cammera was in there. >> i've been made fun of twitter who wrote the age of unicorn with me. and there was a few things but dragons are rare they destroy kind of everything in their path. and they're known for hoarding wealth >> that is a good one. i think it is catchy dan, thank you always good to see you >> thanks. >> dan from axios. should we thank jerome powell, should we thank the fed chair basically, mike khouw, for dragons? >> well, i mean it certainly helps when you have $120 billion a month of asset purchases coming from the fed. but that certainly is not the only thing really it is privateinvestment fueled into this area.
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so i mean obviously it going to flow across the markets both private and public and it has done but i think in this particular case, i mean there has been a lot of enthusiasm and it tends to grow upon itself. when you have a couple of unicorns and a billion dollars company becomes a $40 billion company once they trade in the public markets and there is a lot of private capital that could build it into something without fear that they have to depend on an upcoming ipo to give them capital, one understands why that is going on i do think the valuations look a little heavy though. >> as we wrap things up, we want to leave you with some unjust desserts the feds fed up with mcdonald's over the broken mcflurry machines the fec is reaching out to franchise owners seeking answers to why the machines are melting down consumers have a right to the mcflurry and being denied their
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treat. guy? have you ever ordered one? >> false if you're going to mcdonald's for a mcflurry, you're doing it wrong. you go to mcdonald's for cheeseburgers and large fries. you go to dq for that. don't go to mcdonald's for ice cream. >> thanks me old school. thank you for the special eye decent of" fast. \s i'm kelly evan in for shepard smith. this is the news on cnbc. >> road turned to raging rivers. waterfalls in the subway multiple tornadoes destroying homes. emp . >> just ever is decimated. >> the fear they m


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