tv Fast Money CNBC January 19, 2016 5:00pm-6:01pm EST
that does it for us. michael santoli and jon fortt on a big earning afternoon. we did manage to go out with small gains. the nasdaq couldn't join them yet. that does it for "closing bell." "fast money" starts right now. >> this is "fast money" starting right now. live from the merchandise market site overlooking times square. i'm simon hobbs in for melissa. good evening. our traders on the desk are tim, dan nathan, brian kelly and pete najarian. tonight on "fast," classic bear market behavior. find out what has the top technician on wall street drawing parallels now to 1932. plus netflix soaring on a big subscriber beat. the call getting underway right now. we have live coverage through the hour with julia boorstin and from sun trust, bob peck, who is managing the infamous red phone.
and later somebody is about to be wrong on apple. analysts or traders. we'll explain who and what it could mean for your money. but first, stocks surging. at one point the dow was higher by 184 points, only then to crash negative later in the day. the s&p trading below the august flash crash low. and then we reverse ending in positive territory. so the big question, is this a convincing bounce. dan nathan, is the bottom in? >> no. it is not in. but you will get bounce and counter trend rallies. the first bounce from 1950. i can't tell you from where. didn't hold the early gains here. but the fact they didn't fall apart in the afternoon is pretty good. the only thing i'll tell you is look at the performance today when most sectors gave it up, there were defensive actors acting well. consumer staples and consumer and telecos are not the things
you identify with raging bull markets. so investors continue to position defensively, trying to figure out whether that bottom is in or not. i don't think it is. >> and when you look at the other side of the coin, the resource stocks got crushed today. i look at one like clr, continental resources, heavily leveraged oil, down 14%, almost 15% today and oil was flat. so this is more from the commodities getting killed into the actual stocks getting killed. at some point you are looking at these washing out. i don't think it is there yet. sure, we could get a big bear market rally. but in terms of has anything changed in the last two weeks, for me, absolutely not. >> why does it have to be a bear market. why do we have to call this a bear market. i get it. look at a lot of the stocks. but my point is clearly since third quarter you look at the broad basket of stocks, almost down 30%. so the damage in the market didn't just start. and it has been going on. and i think it is painful below
the surface. but people want to make this out to be 2008 or the biggest, baddest bear market. >> tim, he's talking about u.s. stocks. you just said yourself. they topped out months and months ago. the path of least resistance is no longer higher. that is the way it had been for a better part of the bull market. >> but there is a 2008 moment going on in china. they are deleveraging. they had a huge credit bubble that is now popping. >> that will hang over the market until they solve that problem. and then we have the global economy slowing down from that. that is going to be something that overhangs. and then demographic trends. so it is the beginning of the bear market. >> i think it might help to understand where b.k. is coming here. he wrote for cnbc that he believes they will devalley by 10% to 15% and that was at the heart of the systemic argument. >> the heart of the argument is china is at a point like we were in 2008, they have too much debt
and they have to default or grow out of it or devalue. >> and i think they need to devalue another 10%. i'm not saying this ends tomorrow, dan. but there is an incredible move in stocks and the presumptive comments day after day is this needs to test through 1820 and go through 16 and 17. and there are numbers people are talking about. and we are in an earnings correction. the bar is low. to say we have to go lower because it is predestined is what i'm arguing against. >> it is a global slowdown. i don't think it is a u.s. issue. but the u.s. is getting affected by i.e. china. we look at energy. today oil was up. it was off to the races, everything was great. you look again. when we looked at the bank stocks, morgan stanley, that looked fantastic. bank of america, far better than people expected.
last week, jp morgan, but globally when you looked at oil, when it turned, we pulled down s&ps within minutes. and you look at the volatility. dan and i go back and forth. it won't crack right now. until we see something change there, the problem is we're in a situation right now where volatility is so extreme both in oil and in the s&p that we have to see that. >> then let's bottom line it. what do you do? what did you buy, dan? >> i covered a lot of shorts on friday. i expect a bear market rally. that is what happens. you get the counter trend markets. the bull market is over. bull or bear, it doesn't matter. but the rally ort momentum from the bottom in 2009 is done. >> give me some trades, tim? >> small caps stay a problem. so to me i trade the iwm to hedge my portfolio and i don't think we need to get complicated. agree with dan, the telecos will continue because that is the
rotation into value. >> if you have to buy something, i would sit on my hands, would you be short the market and sell rips, if you have to buy something, i think tlt is probably a no-brainer in this market. >> there are places that you could buy, but instead of that right now the one thing i would focus on completely is pressing on some of the shorts that has been there for a while now. look at freeport-mcmoran. could not get out of its way. look at marathon. names in the energy space. we watch oil every day. the napes could barely lift up and the second they do, the second we see the change in energy, those names get pressed. >> i think those things continue to go down and i continue to own puts in both. >> there were moderately bullish calls that we should mention on the street including deutsche bank which you are aware predicted a 5% trading rally. but our next guest said the bounce we saw today was a classic bear market move. let's get off to the charts with carter worth. take it away. >> that is just it.
5%. big portfolios can't move around like that, big money and endowments and mutual funds, they are not playing for 3%, 4%. and you have to rise to dip but if you are not rising any more, it is a dip and it is a down trend. and so let's see what we could do. i've pulled a few obvious very seminole periods in the market. if you are in an uptrend, okay. once you break trend, let's see how that played out. there is the circle. there is the before and there is the after. buying dips, trying to catch that. that is not important. the risk is this. now that 73 or 74, how about 2000 and 2002. breaking trend. and here is the circle. and again, another 40%. so are we playing for these little counter trend rallies? of course there will be those. but that is not important. how about 2009, breaking trend. another circle. we ended up going again, 40%,
50% from the peak. save the best one for last. does it have to play out like this? no. but we do know we are now below trend. 1929, there is the circle. now here we are now. we're below trend. how much -- that is anybody's guess. i have my own price objectives for the market. they've been discussed here. but do you have to find a stock to buy? it is a time for caution. >> carter, so maybe you could help with the dispute that we have. why are you calling it a bear market? is it because of the -- how far down you think it will go, 40, 50% or is there something else that defines a bear market for you? >> that is very important. so there is nowhere in the investment literal that 20% is a correction and 40% is a bear market. a bull is defined by a succession of peaks and troughs higher tan preceding ones as bears are peaks and troughs that are lowerment a.
and that is what we have in the market now. peak and trough. and so we don't have that. and a bull market is defined by broad strength where most sectors are participating. we don't have that. industrials and energy is not participating. and then as you all discussed, the internals. the medium and average stock and the russell 3000, unchanged now for 24, 26 months. that is not what a bull market looks like. >> thank you very much. carter worth. tim seymour, where does that take you? >> everybody is advocating caution. and i'm on board with that. there are volatility in the market. there are earnings that will give us new information in the next couple of weeks about their world not being as bad as people expect. >> intel on thursday night, they showed a level of confidence that we've not seen from a megacap tech company in ages about an emerging market. it is a huge fact for them. i said this on friday's show. i think you have to take cautious guidance about
executives about the info at face value. >> in the case of semiconductors, we've heard and seen that -- >> but it is still a -- >> it is not what i'm hearing from consumer companies or durables or from starbucks or kng and proctor and gamble, these things. so what we're talking about what will work in this market, those are working. >> what about the idea, once they've reported earnings they could return to buying back stock. >> look at where that got them over the last few years. >> look at the buyback index. it is underperforming all year. the market doesn't care about it any more. they want the growth. that is why the fang stocks outperformed and they want that growth. >> and if you have stocks that still look solid and there are a number of them out there but you look at the implied volatility, this is the opportunities you look for to buy great stocks. another great example today, we saw it happen, cisco is near the
lows but if you look fundamentally, if you believe in the fundamentals, i do. there is opportunities out there. someone sold 15,000 of the just out of the money calls out of february. take advantage of the situation. volatility, 26 in the s&p. we were at 27. higher volatility gives you an opportunity to protect some of your downside. >> cisco is also a high dividend payer and we'll come back to that later in the program. speaking of growth stocks, netflix soaring after hours on a big subscriber beat. we'll hear what the ceo had to say about his quarter and what netflix could mean for the rest of the high-tech leaders. plus dorsey's disasters. is this man becoming a liability for both twitter and square. which both hit new lows today. we'll explain why. and later, on the wrong side of the apple trade. analysts or traders are getting the apple story all wrong and that could have big implications for the market. the details when "fast money" returns. was engineered...
social media platform experienced a worldwide outage. mobile users noted that the service was failing to update. in the past year twitter has lost well over half of its value as you are probably aware. and that is not the only jack dorsey-run company feeling the heat. square, the mobile payment company that also sees dorsey in the ceo chair, and went public back in november, is now trading just barely above the ipo price of $9. so is dorsey becoming a liability now for both square and twitter? dan? >> well, listen, the lower they go, the more focus will be given on the fact he is the ceo of two publicly traded companies in very different businesses. >> and splitting his time. >> and the fact of the matter is the stock is down almost 28% on the year, just this year. we've been around here for three weeks now. that is a big problem. investors are speaking with their wallets. wabt to make one really important point.
if you with a sense of memory, the.com wonder-kins, sill von valley press farming all over them and we talk about them on this desk every day and we go into a bear market, sorry tim, and these guys are pariahs. and that is what is going on here. my point is we've seen this before and it is playing out again. >> and this is everybody loves them when everything is good. >> because they are concept guys and they don't have to run a company. >> could jack dorsey be named ceo of twitter in this environment today and it seems almost absurd to think about. and i own the stock by the way. >> as do i. >> and i think he is running both of the companies. i have a lot of trouble with that concept. >> that is exactly right. and he is a very smart guy. obviously. he came up with twitter. so that is fantastic. but so far he has not shown anything, at the helm of twitter, that saysco take this company to the -- that says he could take this company to the next level. >> i would disagree with that. >> he has a few things in the pipeline right now, quite
honestly. >> the character thing. >> the google character thing is a different thing. but that is something. because people do get frustrated with the 140 characters. >> 142. >> exactly right. but all of that being said, some of this is still out there. and the problem is, they are out there. and while you are waiting, just like you are with the biotech company, how long could people be patient. that is the problem. and they are wondering, could jack do both jobs. >> and say the opportunities arrives, potentially. >> you would think so. but the stock is going down every session for the last week and a half. it is literally just dropping, drop, dropping, at some point it has to stop. >> now this gets to a place -- now this stock, roughly ten times -- nine times consensus ebidta. that is interesting. for a company with 40% growth in advertise and monetizing. we know the maus are not what people want to see. >> are you a buyer? >> i'm a holder.
that is like being a buyer. because i could sell tomorrow. but monetization starts to matter and it is decent. >> i don't think valuation matters. it is all about growth. we all know that. we say it every quarter, geez, these guys from been stuck at the maus for how long? 500 million. for how long. i understand. it is frustrating watching this thing. but the problem is not about valuation. >> it has got tone a place where valuation is compelling. but do you think the growth is interesting, back to you? >> potentially -- the growth -- the google growth side does make sense. >> but they have to -- i agree. they have to stop focusing on the maus and say we have 300 million people that use it every day and we are here, users of it on the desk and nobody comes to me and says how is the product working for you. they are concentrating on taking over the world an that is a wrong thing. >> and one last point. a $9.5 billion enterprise with a ton of cash and there is no
growth. it doesn't matter about valuation. for me it is important about what is the value of this entity in the platform, in the future. and i think it is getting extremely cheap here. >> up next, apple noticeably sitting out the rally today. the stock has had, as you are aware, a rough start to the year. down 8%, in line with the market. and goldman sachs pounding the table today in support of the tech titan maintaining its buy rating on the stock with a price target of $155. saying the recent pullback offers the perfect buying opportunity. and this comes as the disparity between apple analyst ratings and the actual price is vastly diverging. so quick, pete, which one is right? which side of the argument is right? >> right now, you are starting to look at this and say, wow, all of these suppliers, they can't be wrong. the warnings we've gotten time and time again. >> cutting the iphone production. >> people are looking at that and saying this doesn't add up. one or the other.
and suddenly everybody said now this is priced into the stock. so is this a value? and also one other thing in the goldman sachs note that i think is interesting, they talk about the services and they say you have to value this more in that category which gives it a better multiple. so there is reasons to be excited about it. and i've owned this for a decade and i'm not planning on selling it but i'm frustrated like everybody else because this is a $120 stock trading in the mid-90s. >> a $130 stock trading in the mid-90s. >> who cares about that. looking at a chart and saying it was 130 and now $90. >> because stocks trade on sentiment. there is six holds an one sell and the stock has gone from 133 to 96. and when goldman sachs, a firm that has a lot of clout on the street and says buy it, and it closes down on the day, something else is going on here. and tim cook put his you know what on the line when he
e-mailed jim cramer. china, it was 25% of sales. if you seen a meaningful deceleration in the quarter, the stock is going lower. that is that simple. >> what do i want to pay for a company that has seen the best growth days and what kind of investment is this, a dividend play, where te continue to bring the cash back on shore. we're seeing analysts lower december quarter numbers. people around $75 million and lowering to around $55 million. that is at the high end. so we are at a place where i think expectations are moderate. the fact they are going to downgrade the stock in two weeks if it goes to 90, that means nothing to me. the first of the fang stocks out with figures. find out what the ceo reed hastings has to say about his quarter when "fast money" returns. i'm simon hobbs and you're watching cnbc, first in business worldwide. here is what else is coming up tonight. something is happening in the market that hasn't occurred
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welcome back to "fast money." i'm josh lipton. ibm stock down some 20% over the past 12 months. heading into this print, now slipping more in the after hours. you did see that beat on the bottom. even a slight beat on the top. but there were also some pressure points. we saw software revenue. we know that is under pressure quarter after quarter. slumping another 11% to $6.8 billion. that missed what the street wanted to see. the cfo of ibm on cnbc talking about the company's strategic imperatives. that is the move ibm is making into mobile and social technologies as well as the cloud. take a listen. >> in our cloud business, which again was $10 million la-- $10 billion. we clearly have a strong infrastructure as a service offering and when we look across
all of our service offerings, we finished 2015 with an exit run rate at $5.3 billion and that is across both the infrastructure, as a service, the platform as a service, and our software as a service offerings. >> now for the full year, the cfo is saying that revenue from the strategic imperatives did just 17% to $29 billion or about 35% of the company's total revenue. i'm going to hop back on the call and bring you guys headlines as they come. simon, back to you. >> josh lipton there in san francisco. pete, we should mention this is still a strong dividend play despite the fact is in a down -- >> and getting stronger all of the time. it continues to plummet. it is now paying probably north of 4%. it is incredible. the focus is on the cloud. they just aren't executing the way they need to. and when you look at the revenues for the next 15 quarters and stack this on top of it, this a company that continues to decline and that is what everybody is focused on and concerned. and all for the right reasons.
it was $170 last may and you watch it pull back. $140. now at $125. i don't think you need to step in front of this thing. don't buy it just for the dividend. don't buy anything just for the dividend. you have to look at the fundamental story and that has not changed. >> the core business here is just not picking up like they thought. there is a lot of promise here in ibm. watson, i think, is the future of the company, if they could turn that into something. but i don't think you could buy ibm at these levels. 4% dividend. and now you are through the 1999 highs which is 139.19 and i think there is more room to go here. i would stay away from it. >> and we have that conversation on this show. that is what we do. we look at all names. 130 to 132 is a level it has bounced at and the old pre-crisis highs. i tend to agree. it is a mult-year turn-around story in year two of possibly four years. but i think you're in a place with a company not terribly cheap but not expensive. and i think there is reasonable
success. i'm more sang win on ibm. >> hopeful? >> it means i'm calm. i'm more moderate. >> in the management direct ory as well. >> why is that a takedown, by the way. >> they are just sitting along during this whole thing and it is not working. >> so what is likely going to happen is a break-up. we've seen it with hewlett and other pretty complicated companies. the guys have huge headwinds with the strength of the dollar. as far as this quarter, it was low quality. tax rate was much lower than it was -- >> do you really think it will be broken up. >> or she will be out. >> and the buteauty of internet was sang uin means positive in a bad or difficult situation. that is exactly what it means. >> where is the reverse take down, please. >> i think this company's worst
sentiment days are behind it. >> it is an education. >> that is what we're here for. and netflix, we'll hear from ceo read hastings and his take on the business's blowout quarter. >> and carl icahn has been crushed in a number of energy names this year and there are one in particular that traders think will get even more difficult and we'll tell you what that stock is when "fast money" returns.
money." a major reversal on the street. dow was up 184 point this is morning. but stocks quickly lost those gains. the dow ended day only 28 points higher. the s&p managed to close up one point and the nasdaq ended in the red. oil took another leg lower closing at the lowest level now since 2003. here is what is coming up in the second half of "fast money" this evening. something is happening in the markets that hasn't happened since 2012 and it could be flashing a buy signal for stocks.
we'll tell you what that is later this hour. plus, tonight the planets are aligning quite literally. the strange celestial confluence as our sanguine traders are on the hunt for four names in particular. we'll explain. but first let's start with netflix. shares soaring after hours. julia boorstin has the latest on the conference call. julia. >> better than expected growth overseas and the netflix ceo reed hastings said it is about delivering must-see content. if the company continues to deliver, it is starting to scratch the surface. >> the big driver is getting people excited about whatever title we have. and then making it easy for them to join. so whether it is intergrated on the smart tv or into the mvpd set top or the apple tv, those are the things that make it easy to fulfill the desire. but the underlying desire is for the new titles, which is why we're so excited about the year
coming. >> hastings addressed the lowing growth in the u.s. but also said that with the right content he does think there is still growth potential here. the company cfo david wells talked about adding content at an efficient level and content chief spoke about the huge potential in family-friendly content like the fuller house show in the works. they are getting content not painful for parents to watch, calling that a hugely under-served market. and hastings talked about his rivals. he called hbo stand alone service a formidable competitor and working with the traditional tv studios to maintain licensing relationships with the likes of the cw. and he faced questions about the challenging of launching in china. they are talking to potential different partners but to t could be many years of discussions before they could actually launch. back over to you, simon. >> thank you for the update on netflix. let's bring in analyst bob peck of sun trust, robinson
humphrey. he covered it with a mutual rating and $150 price tarkt and listening to the conference call. what is the takeaway. >> the reason the stock is up on the guidance on net ads. over $4 million, which the street is $3 million. they are doing a faster international ramp. they are getting more penetrated on the competition as you heard julia talk about. and the speed of the international ramp, not to get too excited too quick. china could be a multi-year event. we're positive on the company but neutral on the stock. and because of valuation. it frads around 70 times -- trades around 70 times of ebidta of 16 or 40 times ebidta for 17 and sitting at $115 target. >> when you hear hastingss and the rest of the team talk about content and the quality of content you are able as analysts to interpret at all or is that way to quantitative for you.
you are like i don't have figures to back any of what you are saying up? >> we did proprietary analysis in our previews for this quarter as well and you could see the content and how it resonates between trends within searches. and we is a particularly strong and jessica jones was strong. so so you could get a growth and see how they range. >> when you look at domestic versus international, there is an argument that domestic is getting saturated. the first quarter estimates are down 40% or so. could you impute that on the international growth because i get they just went rest of world and i get there is growth there in early stages. but should i be disappointed that the domestic side is slowing down so much. >> the domestic side will turn to much more of a margin story, hitting 409% number. and the profits should fuel the growth internationally. the international markets, while they are doing the entire globe ex-china. we don't have a lot of content
and look for that to ramp up over time. >> bob, we'll let you get back to the call. bob peck listening to netflix which is jumping around after hours. let's trade it. pete. >> bob mentioned china and tim talked about this as well, but india, saudi arabia, pakistan. that was something brought up today by rich green field before earnings and talking about international growth and where could they grow at an accelerated pace because of english speaking. and other areas they have to roll that out. and bob talks about rolling this out for years. when you look at the numbers, what they are potentially are, it is understandable why they continue to trade at the high valuation. >> it seems like the easy money has been made. now you have the competition getting in and then getting into china will take several years. and for me, if you own the stock for a long period of time, one, why wouldn't you take profit and
it seems risky to take a new position at these levels. >> i would go back to what he said about formidable content from time warner and others. they have a $55 billion market cap and outperformed this year and there was rumors about splitting out hbo or something like that. but right now netflix has $50 billion market cap and they are expected to have $8.5 billion in sales versus time warner with $28.5 billion worth of sales in the current year. it is a no-brainer if you want to be exposed to this secular shift. back to brian's point about initiating a new point in netflix. it has to hold 100. i expect it fades the gains tomorrow morning. >> at the risk of singing the same song, but singing it differently. how about google -- it won't be a sanguine song, because that is coming from a negative situation. but i'm worried about this because it is a bad trade and the positions is very bad. the first of the fangs to
report, and we're at a place where facebook on the 28th and google on the 29th, amazon on the 29th, i believe and google on the 2nd. so we are at a place where we are starting to get numbers out of these guys. and this is ultimately the test for the market. i'm a believer these are the most vulnerable stocks in the market in a sideways market, not in a bear market. but crowded trades, bear multiples. >> but could it give you good enough numbers. that is my question. they exceeded the numbers -- >> but that is as good as it gets. >> they are starting to roll in china. >> they have been trying to roll. >> china is positive now. >> and i love how china is a positive thing again. people talk about it as a positive when they want to and it is falling apart -- >> china has evolved into something different that they were two or three years ago. for instance, starbucks, we could look at that as a positive, the 500 stores because that could prosper. >> i agree. >> if you are talking about international, though, with the strength of the dollar, the company has told us they want to
keep the price of a monthly subscription and it is much more expensive over there for countries with much lower average annual income. so to me it is not a layup that this le get 70 million subscribers outside of north america. they will spend $5 billion on original content, a billion dollars -- >> and they've had no growth in japan. there are some places where it is a big problem to assume they could do what they are doing in spain, across southeastern asia i think it is a big, big assumption. >> news out of the ibm conference call. back to josh lifton. josh? >> on the conference call, ibm just now giving guidance. the cfo saying they expect 2016 operating eps of 1350. the street was closer to 15. so a swing and miss there. you saw the stock tick lower on that headline. the cfo talking about currency a head wind.
a substantial impact on profit. a trend he expects to continue in 2016. and the broader story here of ibm continuing to make this transition, continuing to put more resources and time and money into the new higher growth areas like cloud, social, mobile analytics but a transition a bumpy one and with its own set of challenges. back to you. >> just to recut that. you said the ceo was bringing the numbers down, the guidance for 2016? >> correct. so again, they are expecting 2016 operating eps of at least 1350, simon. >> tim, this is your chance to be sanguine. >> what is the definition of sanguine? it is in a negative situation. >> trying to be positive. >> i think these guys have headwinds again. he talked about the currency headwinds $7 billion of an impact. where do you think the dollar will go? and i'm of the view, and this is a lot of views, is that the dollar has probably peaked. so i won't tell you ibm is doing great. i'm not here to say that. i think the key level is $130
and i think the company has had a lot of bad news priced in. >> i'm going to be anti-sanguine. >> critical? >> critical. i just don't -- i don't think there is any reason to even try to buy this stock. they are not executing on the turn-around whatsoever. they are going down. the earnings are going down. they are telling you they will be impacked by the stronger dollar. i think there is more value which will kill them. >> and when they lean on patents and how many patents they have, and this is a company with $20 in earnings in 2015 and now we're looking at 1350. are you kidding? >> one thing is for sure, the cfo put them on the front page for tomorrow. still ahead on the program, there could be a sign that the market is oversold. we'll explain what that is. and the stocks that could take off, after this quick break.
complicated. mike santoli is cnbc senior markets commentator. mike, what are we saying here? the number of stocks yielding more than the ten-year is growing? >> it has grown, yes. simon. essentially more investors have opted for bonds and it is a market of how oversold and indiscriminate the selling has been in stocks. most companies now have dividend yields above the ten-year treasury yield. many companies have a stock dividend yield above their own corporate bond yield. and i named some of these that have 3% plus yields. johnson and johnson, harley, cisco, met life. and it is not all of the food and soap and utility stocks. and i'm not saying this is an out-right buy signal for the overall market, but since the 2009 meltdown, when you have this situation when the stock dividend yield for a market is above the ten-year treasury yield, you have generally had a
recovery in stocks before very long. we could be in a new normal. i'm sensitive this is the world we now live in. before the late 1950s this is the way it was. stocks yielded more than bonds. so maybe we're entering something like that in the past. but to me it is a slight buffer if you wish or need to own stocks that you have a benefit of a yield tail wind versus bonds. >> and mike, it is tim. so need to own stocks is the key here because again, i look at where yields are and the ten-year is and there is a lot of ins fusititutions that could own bond at these yields. and that is another anchor or post in the ground for the stock market. and if you have cash risk good companies people will own them. and i disagree and i understand what pete is saying, you don't buy a company for a dividend yield because it could go down 5% tomorrow and there goes your div. but if you have a coca-cola, and a company i know will be there tomorrow and institutions are
taking this approach now and i feel good about the market for that. >> yeah. and again, for an individual, the stock won't do the same thing that a careful conservative portfolio bond will. the stocks could go down. it is not a straight substitution. but it is weighing over time which will deliver more to you when the stock dividends are probably going up over time on balance and you do just get that extra bit of return at the outset. and i think especially pronounced when it comes to the companies where you have the dividend yield above their own corporate bond yield. if you think about that, that doesn't make a whole lot of sense because you are betting on the sim company two different ways. apple is almost in that category. yielding something like 2.1%. it is being treated almost like a bond. >> raising questions about what ceos are doing more generally. long day for you. thank you very much. mike santoli at the new york stock exchange. what is your view, guys? >> there is a place for dividend stocks but you have to volatility adjust it.
stocks are more volatile so it is not the same type of yield. at the begin of the show i said tlt is no a no-brainer and this is a great place to bring it up. look at tlt. if we are going to new lows, people think new lows in the bonds and then a tlt at 137. that is 10% from here. and getting paid over 2% yield. that is an 11% yield. look at the other side. even on the most optimistic scenarios for the stock market, you are looking at single-digit returns. so for me treasury bonds offer much better opportunity. >> i would say that if bonds aren't your thing and if you like looking at stocks and rather than run for the hills and clear out of equity exposure altogether, verizon, 5% dividend yield, it is down a few percent on the yield and massively outperforming the s&p. another one would be some big pharma. and i know that is an area where pete is. but pfizer is at 3.5% difld yield and then utilities. so to me they outperformed the
broad market and had the embedded yield to them. and to tim's point, these are companies you want to be around. >> not because of the dividend. that is just a cherry on top. and i would add that to a cisco. cisco has shown that they have a little bit of growth left in the system. trades nine times earnings. 3.5 dividend yield. if you could create more yield on top of that by selling calls every couple of months in there, and click, click, click, if it doesn't perform at all, at the end of the year, you have the 3.5% yield and you could collect all of that. >> coming up in the program, for the first time in ten years sh the planets are aligning tonight. and they might be aligning for some stocks to the traders. i have four names after this break. plus chesapeake energy tanking today and traders are saying the worst is yet to come. we have the details up next. inju you're watching "fast money," on cnbc. first in business worldwide.
i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade. five planets, mercury, venus, mars and saturn and jupiter will align for the first time since 2005, right before dawn tomorrow. in fact, you could see them in a row tomorrow morning if the skies are clear. that got our traders thinking
about what stocks could soon be aligned for stratosphere returns. >> my pick is coca-cola. and that started in the last black. and i think the markts is aligning for owning cocoa coa-c. over the last 18 months it is an underperformer. it has not grown in three years. they will start to regrow in 2016. they've been reinvesting and divesting franchises. they are much more focused and aggressive and possibly some strategic interest in the company or some kind of takeover. >> i'm wonder what the new tag line was. taste the feeling? >> i don't know what you're talking about, simon? >> b.k., your age of aquarius. >> it is my time to shine, so to speak. if i'm correct, that we're in a slow growth to no growth environment and we have limited upside to the market, i want
something that has outperformed the market and a high dividend yield and with stand an economic downturn and that comes to at&t. a 5.6% dividend yield. outperformed the market this year. and if you look at it, most -- in a downturn, the last thing you will turn off is your cell phone. >> the pure randomness of this show gets me every time. what is your age of aquarius. >> i'm going with viacom. it starts a while ago. but i'm looking at what mr. jacks today is talking about, the active investor. it is giving you a great dividend yield and the individual in terms of single-digit p.e. stock in the 70s. now in the low 40s. you have to own this stock. >> switching gears. from warp speed, carl icahn has gotten crushed by his energy hoerlds in the past year and traders are betting on more painful one stock in particular. dan is at the smart board with today's "options action." >> that is chesapeake energy. when the stock was 3 and a quarter. there was a roll down.
the trader sold 5700 of the puts at 99 cents and opened 15,000 of the february 3 puts for 43 cents. those break even at $2.57 n. a month, down 20% from here. to pete's point, he is pressing the short in these names. i superintendespect this is pro. the stock has lost 30% of the value in a week and it is a capital structure trade where people are looking to protect something other than the equity at this point. >> dan nathan. thank you. and for more "options action" check out the full show at 5:30 eastern on friday. up next on the program, the traders tell you what they are watching for tomorrow in addition to the planets at dawn. that is right after this break. more "fast money" coming up. every day you read headlines about businesses
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>> very nice. >> clap the man. >> clap him out. >> clap him out. >> that is it. enough. i'm simon hobbs. catch "fast money" again at 5:00 eastern. "mad money" with jim cramer, thankfully, begins now. >> my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. >> hey i'm cramer. welcome to mad money, welcome to cramerica. my job is not just to entertain but to teach, coach and put it in context. call me at 1-800-747-cnbc or tweet me @jimcramer. how do you dip your toe in? how do you go against the selling grain