tv First Business KICU November 28, 2013 4:00am-4:31am PST
you're watching first business: financial news, analysis, and today's investment ideas. good morning everybody. i'm angela miles. just ahead on first business...how to avoid feeling the stock market chill this winter-- with words of wisdom from our pro traders. in today's cover story...tastemakers hit the road as food trucks steer toward profits. plus, he's one of the world's most successful investors. the life and money lessons warren buffett has passed down to his son and grandson. and will paramount cash in at the box office with the latest film about wall street -- first business starts now.
but first...we'll start the day with matt shapiro, president of mws capital. good to have you on the show today. > >thanks angie. > >you are here to talk about the santa claus rally. that is the big rally that tends to happen between christmas and new years. i feel as though this market has just been the gift that keeps on giving all year long. so what do you anticipate this year? > >profits have been booked. it's been a blockbuster year. things are gonna quiet down and it's gonna be tough for anybody to push the market either way but it has been those momentum stocks of course that people are gonna want in their portfolios as they look to 2014. a lot of that is what's behind the santa claus rally. portfolio managers putting in the best stocks into their portfolio towards the end of the year in quiet and relatively thin markets. > >how should the average investor handle that? > >it's a good time to start picking through your portfolio and put together the package that you think is really gonna do well for 2014. my forecast is that we got a good chance that we have another blockbuster
year actually. a 30 percent chance or so that things will be somewhat indifferent like 2005 when the blue chips just sort of were very heavy and then some of the speculative stocks still had some momentum.and of course we could always have an off year. remember the market does not go up every single year. > >exactly. and sometimes a santa claus rally doesn't come exactly during that time period. what have you seen in the past happen? > >usually the beginning of the year shows you what's gonna happen. so it's not just what's gonna happen late in december. there could be some profit taking. for me, what's gonna happen is how do things look in january. how does quantitative easing and all of that play out through the first quarter and how does the market react and what happens to interest rates? thank you matt, have a good holiday. > >you too. this holiday season has been extra stressful for retailers. on the heels of mediocre back to school sales.... several discount stores and deparment stores are concerned about how this year's numbers will shape up after the last holiday items have been
purchased. macy's had great expectations for the holiday season-- while walmart and best buy prepared for the worst. "i think the ones that are maybe going to face a challenge are going to be, yeah, macys, they are going to find it a little tough because they're still playing right in the middle, and the middle is not the place to be right at the moment." adding to the stress for retailers-- the national retail federation estimates the holiday season can account for 20 to 40% of annual sales. this holiday season, one of the hottest toys turned up at specialty stores. giving a boost to smaller retailers. diane moca reports on the "wow" toy of the year. train music every year as parents struggle to find that special toy that will make their child's eyes light up on christmas morning. retailers stock their shelves with what they hope will make their cash registers sing. but at specialty toy stores owners are marching to the beat of a different drummer. "i think it's a very tough market. a lot of big giants have a corner on the market. that's why retailers like
myself champion for smaller companies." like the michigan-based family business that produces "rainbow loom"... one the hottest toys leading into the holiday season. "when we looked for it a few months ago, it was hard to find." that's because the hugely- popular rubber band kit used to make bracelets... necklaces... keychains and more.... is only available in places like building blocks toy store... learning express and michael's arts and crafts. "never before have i ever had a toy craze like "rainbow loom" that i've been so excited about. creativity and quality are top criteria used by 17-year business owner katherine mchenry... and other members of the american specialty toy retailing association... when they choose the 'best toys for kids award winners' that often sell well during the christmas shopping season. toddler puzzle "bunny boo" and building sets like "q-ba- maze"and "squigz" are among this year's top picks that aren't in any big box store. "thousands and thousands of products are made new every year. some never make it to a shelf. many hope to make it into a store like ours." katherine says toy makers can call her directly to try to convince her to order their latest innovation. "the most likely chance for a small company to be successful is to market to a store like
us." "they have more unique things. the rainbow looms are the real draw." other new toys that are hot this year and only found at the small stores include kinetic sand and living sands... aaron's putty... master kitz -- which includes step by step directions and everything else needed including to recreate a painting masterpiece... stuffies -- functional stuffed animals with seven zipper pockets... and story time sets. boogie board -- for writing that disappears with the touch of a button... and tobbles neo... which is flying off the shelves faster than owners can re-stock it. even the twilight turtle night light that illuminates the ceiling with stars is selling briskly here mother jeannine vradenburg picked one up for her 7-year-old nephew... after her two kids -- ages 7 and 8 -- fell in love with the but even if a new toy makes it to the shelves of katherine's store... the real test is not in the pocketbooks of parents... but in the hands of the tiny consumers who push it to the forefront with their undivided attention. diane moca...for first business news. just in time for the the holidays-- tech companies delivered hot new products to the market. microsoft released it s next generation xbox one.sony came out with its play station 4.apple souped up its tablets by stocking shelves with the ipad air and a new ipad mini...then added snow flakes to its stores to to get customers in the mood to spend. not to be outdone...google launched pop-up retail shops called "wonderlabs" in new york, dc, chicago, la , new jersey and sacramento. google's wonderlabs will carry nexus smartphones and tablets. "retailers and online stores are really going to be pushing video games because of the two new consoles playstation 4 and xbox one and any toys that have
a digital angle, products like tablets." analysts suspect e-readers and tablets will turn out to be the biggest tech gadget sellers of the holiday season. consumers are preparing for a holiday debt hangover. our money man greg mcbride of bankrate.com joins us via skype this morning. good morning greg. how likely is it that americans will overspend during the
holidays this year? > >it's as much a tradition as apple pie and grandma's house. unfortunately this is not an unplanned expense, we've known it's coming all year long. there's no better time than the present to really make a plan---not only for this year, but then as soon as you get beyond the holidays it's time to start planning for next year so that you can have that money set aside in advance and not be scrambling at the eleventh hour. > >what are your tips to avoid putting a strain on finances into the new year? > >sit down and make a plan. who do you have to buy for? what do you have to buy? what other holiday related expenses do you have on tap? is it travel, are you hosting meals? you want to get a total tally. the next job is you gotta figure out where that money is coming from. the idea being that you want savings and the ability to set money aside ahead of time to absorb these costs as much as possible so that you're not stacking it on high interest rate credit cards that are gonna carry over into the next year.
> >what's your advice for consumers who are in a panic over holiday debt? > >you have to make at least the minimum payment on all of those payments every single month. you want to funnel as much extra cash as you possibly can toward the highest interest rate obligations. and then as you get that knocked out you've got that much more that you can apply to the next highest interest rate obligation. you have to make this priority one. get that knocked down as soon as you can. then you can start planning on next year. again, setting aside the money that you need for who you have to buy for, what you have to buy. that way you have cash on hand when next holiday season rolls around. > >thanks for your help today greg. > >thanks angie. entreprenuers are steering to success-- by you can count on a few things with food trucks.you'll never be asked, "is it for here or to go?"and getting started in the business will likely take more than you'd expect, as our cover story explains. dan salls says most people will need about 60-thousand dollars..for the truck, outfitting it for cooking and all of the permits. not everyone can find an ice cream truck for 45-hundred dollars and
convert it into a red salsa truck. but not everyone who does this began as a chef, either. "i was a financial advisor. i was 24, but i wanted to give this a go." jay and carrie sebastian got started for about 30-thousand. partly because the work of converting their small, electric truck into the bridgeport pasty pie wagon was kept in the family. "i have a brother-in-law who's a machinist and put in the oven. we did it over a long period of time." new food trucks can cost 75- thousand. equipment and plumbing if you're converting one--up to 15-thousand. insurance can be 3-thousand. paint--a thousand or vinyl wrap ads to brand your truck--5- thousand. not counting food storage and prep facilities, you're talking serious money. but think of all that business, not to mention the "coolness factor."
"i think they're cool. they're different." "it's cool that you can try these different trucks and follow them on twitter if you like them and keep following them." "this is a a very good business. i love working with my wife. this is the best be-your-own- boss work, i've ever been in." mobile cuisine magazine estimates there are about three million food trucks in the u- s.they face a variety of municipal regulations. but most flourish in large cities-- particularly in sections where there a lot of people work but with few choices to eat nearby. thank you chuck! still to come a trading pro tells us his plan of attack for weathering the winter stock market. plus...we're joined by warren buffett's son and grandson, who have advice on how to change the world by "sharing the wealth." but first...will the story of a wall street legend steal the show at the holiday box office? stay with us.
hollywood is counting on the holidays for an end of the year bonus at the box office. joining us now is erik childress. he's our money man all year long. good to have you on the show. will there be big numbers for the holidays? > >i think there's gonna be a lot of money but sort of evenly spread around. we have a lot of movies opening on christmas day this year and so the audiences are gonna be sort of divided on what they can go see. but there are a lot of choices for sure. > >here's the list...47 ronin. that's with keanu reeves. it's a martial arts movie. believe---justin bieber. the beebs. grudge match, the secret life of walter mitty--i can't believe that's coming back, and the wolf of wall street---which we have been waiting for. > >it was actually delayed from it's november 15th slot. it's opening on christmas finally. i think of all the movies that are opening that day, that's probably gonna be the breakout. i don't know if it's gonna do
django or les mis numbers that we had from last christmas. but i think it's that kind of movie---all the people are buzzed about and really want to go see. grudge match could be a surprise little hit. you got deniro and stallone. the guys from the 2 greatest boxing movies ever made---rocky and raging bull---getting in the ring together. so that could definitely do well. walter mitty---we'll see. 47 ronin--- big budget that universal's gonna be sweating out. that could be a real disaster for them. > >what about believe. > >unless it's a film about justin bieber's exploits in brazil, i really don't care. > >ok, moving right along. there are some other films that are coming out around the holidays or on limited release but you have them on your list. august:osage county and that's with meryl streep and julia roberts. big names. > >a certain oscar nominee for meryl streep. > >mandela: long walk to freedom, the invisible woman, and lone survivor. > >lone survivor is a film with mark wahlberg based on a true story of navy seals who went in to capture a taliban leader. there's been a lot of really good buzz. started to screen around november so there's a
lot of really great buzz about that. it's probably going to pick up some of that zero dark thirty or the blackhawk down audience. it's opening limited in december and opening wider in january. > >what about the invisible woman. > >the invisible woman is ray fiennes' latest directorial debut about charles dickens but it's about a secondary character in dickens life---it's not very good. > >and mandela? > >mandela i haven't seen yet. idris elba is playing nelson mandela in the film. it's gonna get kind of a small release. not a lot of great buzz on that one. > >let's see what happens there. but definitely meryl streep is going to come to the top as she always does. > >she's going to be nominated, but she's going to be fighting sandra bullock for gravity and maybe judi dench in philomena. so it's gonna be an interesting race for best actress. > >good to have you on the show. thank you eric. > >thank you. coming up...trader tips on how to handle the stock market during the holiday season...and warren buffett's son and grandson share their life lessons after the break. we'll be right back!
making the world a better place. that's according to a new book by billionaire warren buffett's son and grandson. the book is: forty chances: finding hope in a hungry world. we are so pleased to have howard g buffett and howard w buffett on set with us this morning. good morning. so what about the name of this book---forty chances? > >it's about more than philanthropy actually because it's about how you take your forty chances, forty years that we kind of all have and do the best with it. so it involves everything from philanthropy to business to whatever you can do as an individual to help. > >we only get forty chances? > >he keeps telling me he's gonna get sixty. if you think about it, when you get out of school and you get a little experience you really have about forty prime years to reach your goals, to build a legacy---whatever it is you really want to focus on. so it's
trying to create a mindset and it's true, some people get a little more than forty chances but it's a number that we could make sense out of. > >what is the takeaway from this book? just give us a little nip. > >i think the takeaway is that as big as all the challenges are in the world today, if we're willing to take more risk and we're willing to be more innovative and we're willing to fail and admit our faliures then i think that will lead to more success and i think it's really important that we don't focus only on the easy things. > >care to talk about some of your failures? > >the list is quite long. > >but that's a good thing. > >absolutely. one of the number one things my father pushes through is that my grandfather has pushed down through the family line is that we have to take risks. we have to be willing to fail to learn from those failures in order to adapt and take them with us to the next chance. > >it's always easier to be comfortable and stay where you're at and not worry about it. i think most of my life i had a mom and a dad that just encouraged me to go outside
that comfort zone. you always learn more from going outside that comfort zone than you'll ever learn by staying in it. > >is it easier to take a risk when you have a lot of financial backing? > >it's easier from the standpoint that if something goes wrong you don't suffer as much but i think in our case the risk we're talking about is relative to the amount of money we have to invest in the future to try to change things. and i'm willing to take a big risk and big bet with that money. > >how can we actually heal the hunger problem in this world? > >one of the big things we profile in forty chances is some of the people that are doing things differently. there are everyday heroes out there. it's easy to get caught up in the magnitude of the problem and overwhelmed with the problem but everytime that happens to me i meet somebody else and i see something that somebody's doing and it's really encouraging.
> >i know you're always thinking of the next big thing---so please give me one idea of a risk area or an investing area you are currently focused on. > >i'm actually now in chance number 3 when it comes to farming. we have a family farm in nebraska that my father's allowed me to start participating in take some of the management role. that's been an eye opening experience, learning about agriculture hands on and understanding stewardship of the land and it's really been remarkable. > >we are actually building the largest infrastructure project in eastern congo in the middle of conflict zone. we have to negotiate different rebel groups to be able to do it. we have to work with the government to do it. if we get it done it will bring electricity to 130,000 people and create a lot of jobs, and be a demobilization strategy. whether it works or not, we're gonna find out. > >much success to both of you and again the book is forty chances. great to chit-chat with the buffett's this morning. > >thank you very much. > >thank you.
in chart talk this morning tim biggam joins us. good morning tim. > >good morning angie. > >going into the end of the year, traders have a lot to watch with the holiday trade. what do you think is likely to happen here as you're watching, perhaps we will see volumes with big upticks our downticks in the market? > >yeah, absolutely. volume tends to be historically lighter than normal. certainly this period from now until year end tends to be a very bullish period in the market. but given the move we've had so far year to date in the market, it remains to be seen how much is left in the tank to the upside. the one thing i always examine is maybe look at adding some of
the underperformers---the apples of the world. the dogs of the dow theory to add to the portfolio, trim out some of the winners. i usually do that toward year end. over the long course, things tend to revert and that tends to be a winning strategy. > >let's talk more about those stocks that are hot and not. what are some other stocks that you see as 'too hot to handle?' > >the big momentum names out there, the tesla's of the world, certainly the netflix of the world, the three d's---ddd. a lot of these stocks have been off to the races. i think it be time to trim in some of those gains. and then look to put it toward some of the stocks that underperformed. like i said, apple--some of the high yield names have come down here lately as well, so maybe going to value from momentum. certainly momentum has been a big outperformer so far this year. > >what do you see as far as sector rotation into the end of the year? > >yeah, i think the same kind
of thing here. tech has kind of stalled out here. some of the oil names certainly have finally gotten a little legs under them and the commodities stocks to say the least---gold certainly has been underperforming. so i'm looking to rotate out of some of those higher beta names to smaller caps and go into some of the commodities space and some of the large under caps that have been underperforming. > >tim, thanks as always for coming on our show. > >you bet. thank you angie. that's it for now. as always feel free to follow us on facebook and twitter or send us an email. we look forward to hearing from you. from all of us at first business, thank you for watching and happy holidays!
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