Skip to main content

tv   Fast Money  CNBC  January 25, 2016 5:00pm-6:01pm EST

5:00 pm
non-systemically financial institution so to hear what that company has to say will be nothing short of interesting. >> kayla and mike, thanks so much. that does it for us on "closing bell" on another market selloff in the first month of the year. "fast money" begins right now. >> live from hollywood, no, not that hollywood, hollywood, florida. this is "fast money" coming to you from the world's largest etf conference inside the diplomat resort along the beautiful beaches of florida. etfs are now a $3 trillion industry, one of the most popular tools for the retail and institutional investor, and that is why we are here tonight to bring you some of the hottest trends and best ideas from this fast growing asset class. welcome to the show. i'm melissa lee joined by tim sure and guy adami and also joining us is our good friend dennis gartman, his latest view on the markets and the plunging price of oil in just a moment. first the guys made it through
5:01 pm
the snow. all made it through the snow. all very happy to be here in sunny florida, albeit a little bit windy. here's what we have planned for you tonight. looking to buy an etf, kevin o'leary "shark tank's" mr. wonderful, says there's three things you need to lock at before you do. he'll explain what they are when he joins us in a few and the words of wall street, jeffrey gunlock speaking here and unleashing a very bold warning about the state of the markets. we'll hear from him in his own words. first, we start off with the markets, of course, and we're going to start not with crude itself but with the sector that's moving the most off of oil's decline and that is the financials. in fact, if you didn't check this out today, check it out now. shares of bank of america hitting its lowest level since july of 2013. citigroup touching a three-year low itself and deutsche bank, a name we've talked about a lot in this show. that stock hit an all-time lot and are banks telling us that the banks are about to trigger a
5:02 pm
larger event? >> i think the big part of it is a flattening yield curve. kruld oil has been the story for the last nine months and now people are finding out maybe it does become part of the banks and maybe it becomes a bigger problem. deutsche bank has been referring to something commodity-related when it was a $34 stock. you can't dismiss the fact at all-time lows deutsche bank is probably the largest derivative bank in the world is trying to tell the rest of the market something. >> the thing is we've already had a number of earnings from the key financial players. i talked to a lot of guys who invest in financials and do it in a way not only in terms of the public markets but the private markets. banks are not complaining of credit contingent outside of the trusts and possibly regional banks in the oil belt, so at this point to say that this is a credit crisis for financials, i mean, i have to push back on that. i think it's concern about investment banking activities. let's face it, if we're in a
5:03 pm
place where the market is more concerned. all the dead issuance that was driving at least a lot of the dividends and the buybacks and the things, the m & a activity, listening to the big boys, the people we care most about the credit quality of this country and the banking system, nothing, nothing that resembles that. >> when we take a look at those charts and they are tom brady awfully, right, yes? >> yes. >> bank of america, $13 a share, what is that telling us, that the economy is much worse than we all expect? are they just completely disjointed from what is actually going on in reality? >> there's pockets of strength. i won't say the economy is horrible. you saw the numbers out of dallas, energy-based, but those were disastrous numbers. we can find good and find bad. i try to say all the time, i try to keep my personal doing ma out of it, but i don't think there's any denying that crude oil in my opinion has more broader ramifications. i think the one reason the banks hung in there over the summer into the christmas season was
5:04 pm
that people thought oil was in janet yellen's terms transitory. i don't think there's anything transitory about it. >> inflationary or deflationary forces the fed is trying to tell us are transitory. i'm not sure about that. when i listen to what the financials are telling us, first of all, a second- or that's underperformed for 18, almost two years, 18 months to two years. >> right. >> so it's not just this year. i think the reality is people are very concerned about their ability to generate earnings that were formerly a big part of what you saw in economic expansion and a lot of people were expecting that over the last two to three months. >> let's bring in our friend dennis gartman, an expert on markets and oil. we've talking about the financials. at these levels, are these companies able to make a profit and are they under duress of some sort? >> many oil companies that can still make a profit. some that will are so good at manufracturing i like to call it that they can make money. the vast majority of the small
5:05 pm
enp in the barnett shale, the marcellus, they will have problems. we might not have problems with bank of america or problems with the large money center banks but the banks down in texas have real problems and those things are going to start coming to roost very, very quickly. >> talking about oil specifically, but we've been talking more broadly about commodities and the commodity crush. we're talking about deutsche bank and it being a short because of the crush that we've seen in copper, in the miners. so this could be -- may not be a credit event for oil equities necessarily. >> no question that big miners have a lot of problems. dennis made some interesting comments on one of his panels this morning. interested to hear your thoughts. some of this stuff started to look interesting to you, steel companies, people with balance sheets or at least -- i don't see any relief in sight for steel prices especially in a world where china has pulled back, so that's interesting stuff, and i think people want to hear that. >> if you look at those companies, coal companies, that freight companies, baltic
5:06 pm
freight is down what, 98% from its highs. if you're going to be a buyer of something, you need to be a buyer of things that nobody wants. nobody wants coal or shippers, nobody wants copper, nobody wants steel. i want to at least take a look at them. do i understand the balance sheets of united states steel? no. do i look at the stock price down as much as it's fallen saying am i interested beginning the fact that nobody else is, yes? am i interested in coal at these prices? yes. is time to buy them right now? probably not. one of these the days you'll walk in and see coal stocks opening 50% higher, easy to open 50% higher when you're trading $1.50 and they won't trade lower and then they say now is the time to come in and beat it. you want to be a contrarian. >> let's take a listen to what goldman sachs ahead of xwhod tis jeff curry said moments okay on "closing bell." >> well, when we think about where we come up with 40 at the top and 20 at the bottom, 409 is what we call financial stress. it's a price level in which when you drop through you start to
5:07 pm
create real risk of credit default, in real shifts in companies' behaviors because of the company stress. at the bottom, the $20 a barrel, we generate that off of cash costs. >> i get that the banks didn't talk about distress in the past earnings season, but aren't stocks, don't they tell us things in advance? >> i believe so. >> are they telling us something in advance of this credit event? >> we may agree to disagree on this thing. i'm not certain what it, but you mentioned copper. you know what's very interesting over the last few months, as freeport-mcmoran has gone when carl icahn announced his stake to the levels you heard currently, not heard one word from him about this stock. it's interesting, as far as i can tell are, he's not added to that position. to me that speaks volumes as to what's going on. dennis said, timmy said, it these are highly levered companies and you'll walk in one day and they will be up 50%, but i don't know if it's up 50% from $3 in the case of fcx or the case of $1.
5:08 pm
>> it gets into the whole concepts and the broader commodity complex, spent so much time talking about oil companies, sideways oil company, $25 oil, $35 oil has a major major problem surviving and when you look at rio tinto, these are companies not pegged solely to iron ore or company, in the softs and in the bulks, and if you're trying to wade through and pick stocks in this environment, you have to go best balance sheet. you have to find companies that are diversified that don't rely on china solely because structural there's no question that technology has been a disruptner creating a demand in change cycles. >> heard so much of the correlation between brent and the s&p a hundred over the past 20 days, a 77% correlation. >> probably a 101% correlation. what's your call on oil and, therefore, the call on the markets? >> first of all, i'm not a great believer that the correlation between crude oil and the stock markets will last for a very long period of time. it has lasted for the last
5:09 pm
month, month and a half, i understand that. at this point i don't think i want to be short crude oil, been very bearish. the time for being bearish for crude a sever a. >> so we've bottomed? >> i think there's a possibility that we have bottom the. do i wish to be short? no. do i wish to be bullish on crude oil? i don't want to be bullish either. on the stock market, i'm still relatively bearish. i don't think it can go down dramatically. i don't think it means a recession. i'm short and i'm short a little bit at this point. >> dennis, thank you. >> thanks for having me here. >> good to see you. in cold southern florida. >> it's balmy out. >> it's all relative. >> coming up next, one dow component just made an all-time high today and all it took was a little bit of buta. we'll tell you the name and how to play it and jeffrey gundlach was here at the conference and what he had to say and why it has everyone's scared. >> mr. doom and gloom marc faber
5:10 pm
said there's one thing he's actually buying. we'll get into that. much more "fast money" live from etf in hollywood, florida, coming up right after this. e*trade is all about seizing opportunity. so i'm going to take this opportunity to go off script. so if i wanna go to jersey and check out shotsy tuccerelli's portfolio, what's it to you? or i'm a scottish mason whose assets are made of stone like me heart.
5:11 pm
papa! you're no son of mine! or perhaps it's time to seize the day. don't just see opportunity, seize it! (applause)
5:12 pm
it's gotten squarer. over the years. brighter. bigger. it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv.
5:13 pm
welcome back to "fast money." we're watching shares of athletic apparel-maker lulu lemon up by about 1% in the after hours trade and 100,000 shares worth of volume. an regulatory filing lone pine capital, a hedge fund, has disclosed in the regulatory filing it's taken a 5% stake in the can. aga again, shares moving higher by 100% after lone pine capital, a hedge fund, reports it's taken a 5% stake in the company. as of its previously -- previous regulatory filings at the end of september, didn't appear as though they did have a stake but something traders are paying attention to. lululemon just to put it in context, guys, down about 12%, 13% and up and an outperformer so far in 2016. melissa, back over to you guys.
5:14 pm
>> thanks so much, dom chu. >> how much of that buying interest maybe technically is in the price? last year they gave very good sales guidances, a company where to the extent people have been looking at a bunch of retailers and say they are broken companies, this is a company that is starting to get the mojo back and at least the financial performance of the company is something that i think people may have overestimated how bad it was. i think things are a lot better there. >> to the point about retailers, macy's had a horrible day, a lot of stocks did. go back to when macy's reported a couple weeks ago, the knee-jerk was to take it below 45. this was a stock on friday that gave up the ghosts today and to tim's point, you wonder. there's certain names where every piece of bad news is probably priced in. >> the retail sector, in a place where everybody is screaming, let's save the cliche the fire in the movie theater, but people are complaining a lot of these guys are structurally broken and the business model has changed. i don't think that's the case. if you're a differentiated brand a lot of this stuff is starting
5:15 pm
to play into it. >> tough day, very tough day, in fact, for shares of twitter. kicking off our top trades tonight, falling by more than 5% after the company announced major management shake-up which includes the departure of several top executives and changes to its boards, a total of seven executives leaving twitter, the biggest upheaval since dorsey returned as interim ceo in july. tim? >> this is wrong time for a company to have this kind of upheaval. i've heard people saying, you know, these people were not as important as the new people that have come in, but ultimately it's your product head, it's a marketing head. i mean, these are people for a company like this it's very important. i'm long the stock. i have to tell you that i think while i expect the numbers could get a little bit worse here. this is the kind of news flow -- this is more uncomfortable to me than maus because this is ultimately a case that it's a company that appears very rudderless and it's disappointing. >> he's interim ceo for how long now? wasn't it about time that he removes the people already there
5:16 pm
and puts in his own team? i mean, isn't that what we wanted at twitter. apparently these people in those jobs, they weren't doing it fast enough, weren't doing it as effectively. >> i think that's fair. >> kudos to david sieberg who is watching this in new york and this thing going straight down and here it is. i've tried to explain why i think this is a compelling, just in terms of their product and what they have to offer. doesn't seem to manifest itself into the stock price. you know, there's no news out there right now that can seemingly take this stock higher. good days it goes down, bad days it goes down lower. >> that's not true. >> i just don't know where the price is right now. >> the news is actually these guys are central arterying to generate more user, broader users, whether it's the google searches. obviously not about maus, the user time and the advertising trends. >> minutes, users. >> obviously this is a company that you can't talk valuation but it's a company with intrinsic value, a very unique company and i don't think this company is done. in fact, i think it's very, very
5:17 pm
much the opposite and i think that's a big opportunity. >> maybe they made a tactical error going to maus. maybe twitter never should have done that in the first place. i can make that argument. i agree that it's a compelling property. i also would submit and tim would agree that the stock can't get out of its own way right now. >> next up, new all-time high for the golden arch eds, talking mcdonald's, the biggest fast food chain beating the street's fourth-quarter estimates and its all-day breakfasts helped to boost sales across the board. they added real butter, real butter. >> huge. >> to the egg mcmuffins. >> as opposed to what? >> fake butter. apparently fake butter. >> i don't know what that means. steve esit estabrook is moving e right direction. >> timmy had mcdonald's dead on. over the summer this was a $13 stock, seemingly rudderless and here we are all-time highs. jim skinner when he left felt as though mcdonald's lost its
5:18 pm
moggeo. estabrook has come back and might be a better ceo than skinner if possible. tim talked go b why they should be bullish, knocked against 22 times forward earnings. comparative to the other guys i think that's still cheap. >> great news in the stock for a guy that's been long it, and two ways to look at this. >> you sound like you're backing off a little bit. >> here's what i would say. it's not cheap anymore, and in an environment where i think a lot of people are looking for safety outlets. this may be a place with more room to run. on validation it's 32 times. like to see this stock pull back a little bit in order to add some but in a place that i want to know what's going on. talk to franchisees. these guys are so excited about easter brooke. this is part of the story are the all-day story is a much bigger deal. the kiosks giving people a change. >> you tried the kiosks. >> gourmet burger. >> you know, by the way, dennis
5:19 pm
gartman is here. that's where we're going after. we ain't going drinking. we're going to get a couple of -- >> mcd's. >> have an egg mcmuffin with real butter. >> huddled on the beach in hoodies. >> here's the ultimate question. mcdonald's win is whose loss? >> what's going on at chipotle is not helping. maybe -- >> chipotle. >> maybe i can't walk in there anymore and maybe i'll go to cafe mac. i'm not sure who is losing. mcdonald's was winning a couple years ago, lost its mojo. they have it back now. >> what do you think is losing? >> very critical of the uber high multiple fast food diners, shake shack and pot pelbelly, e loco, a place where casual dirns or the fast food names that were the hot ipos, momentum names in 2015, and, again, look at mcdonald's stock if you want to bristle and move off of the '95. this stock has moved sideways for the last 4.5 years so it's a
5:20 pm
$95 stock. >> still ahead. apple shares back below $100, and this, of course, ahead of, and you won't believe just how much some traders are betting the stock will move. we'll break down in a special report. i'm emilee you're watching a special edition of "fast money" first in business worldwide. live from sunny hollywood florida. ♪ under the boardwalk noins nouns looking to buy and etf? >> come on down. >> announcer: before you do, "shark tank's" kevin ollie, aka mr. wonderful himself, says there's three things every investors needs to know first. he'll explain. plus -- >> global thermo nuclear war. >> music to marc faber's ears who says stocks are set to crash, and this time he really means it. he'll reveal the market's hidden dangers when "fast money" from hollywood, florida returns.
5:21 pm
ey mt products and services, but they demand the best shopping experiences. they're your customers, and as you strive to meet their digital expectations, they're enjoying more choice and greater power than ever before. at cognizant, we're helping the world's top global retail companies face the demands of today's digital economy by blending physical with digital to create more responsive, more rewarding retail models... ones that transcend channels and locations, anticipate expectations, and create new ways to engage consumers at every imaginable touch-point. it's a new day in retail, where a company's ability to influence a purchase decision is only as good as its digital model. together, we're reimagining the store of the future, and building customer loyalty. digital works for retail. let's talk about how digital works for your business. ♪
5:22 pm
5:23 pm
iall across the state belthe economy is growing,day. with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating next generation technologies. let us help grow your company's tomorrow, today at welcome back to "fast money" from hollywood, florida. we are at the world's biggest
5:24 pm
etf conference. get this. there are over 1,700 etfs today so how much bigger can the industry get? cnbc's bob pisani is also down here with us. bob? >> reporter: thanks, melissa. despite higher volatility and lower returns, 2015 was a big year for etf flows. $222 billion in net inflows, an increase of about 10%. 2.1 trillion assets under management and while that's still small in comparison to the roughly 11 trillion under management in mutual funds, mutual funds have steadily been using assets. three hot topics, smart beta. etf weighted some other way than market cap and goldman sachs weighted three etf by volume, quality and low fees. the big question do they outperform market-weighted indices, the jury still out. active management. so much money is coming into etfs that it's attracted the active management crowd that insists they can outperform passive index funds. the industry is split on this.
5:25 pm
half say who needs them? we don't need them. the other half says there's plenty of room for other kinds of investment styles. finally, is the s.e.c. going to tighten regulation of etfs? they recently announced that they would be looking into the suitability for investors of complex etfs like leverage than inverse etfs and looking at limiting the amount of leverage that could be used in an etf portfolio. back to you, melissa. >> all right. thank you, bob. we'll see you later on in the show. many know kevin o'leary from his role on "shark tank" but he's also the chairman of o'share investments and has five etfs of his own. ketch, great to have you here on "fast money." >> wonderful to be here in this wonderful sunny florida weather. >> exactly. much better than snow, right? >> terms of etfs, there's a lot of volatility in the market, and there's some debate as to whether or not etf contributes to that volatility. what's your take? >> i think what we're going through right now is a new generation of etf product. what's so exciting about this conference, they are calling it smart bet a. i call it
5:26 pm
rule-based. got to remember the first generation of etfs were index trackers so someone like me who has a covenant in his family trust that doesn't allow me to owe more than 5% than anyone named can't use inddeese because names like apple end up being 10%, 11%, 12%. i can't own more than 5%, want 20% less volatility and want five tests on the balance sheet, asset turnover, quality, turnover, things like that and that's the kind of innovation we're seeing. i'm one of the companies doing it with o shares and there's many others. if there's room, there's plenty of room for better product. innovation always matters. >> is that a round about way of telling me you believe etfs contribute to the volatility by saying there's room for better etfs? >> there's always room for innovation financial services. >> right, right, but in terms of -- i mean, you're coming out with five new etfs. every day i feel like i read about whatever company coming out with all sorts of etf, etfs that track companies that start
5:27 pm
with fs and etfs that track semiconductor companies. are all these etfs contributing to the market volatility? this indirect way of asking are you part of the problem? >> no, i'm part of the solution, and why i say that is what's so beautiful are etfs is the total transparency on price discovery. the only thing that matters in etfs at the end of the day even though there's 1,700 of them is performance and i say this to everybody. if you can buy a better product than o usa for me i'll buy it. you can't right now. the rules really matter and they are outperforming their p-s. >> let's walk through how do you know which etfs you're buying and what are some of your rules? >> my rules are all about stability, quality and above all i have to pay out of my trust 5% a year so i need to solve for that. i have to figure out how can i use an etf strategy to say solve half my boeing, 2%, 3%. i'm getting 3% out of my own etfs and i buy those and i always say to people, saw plenty of people here today, show me
5:28 pm
something better i'll buy it. every year i have to make 5%. many think it's easy but you know it's not. >> a lot talk about portable outputs. hedge funds using etfs, a lot of the world down here is an advisory community and people that are slower longer term. how about fast money in the etf space? how about guys that are looking to invest in really interesting ideas, is there enough liquidity, and is this, again, i've got to go back to one of the things melissa asking, is this part of the problem for the etf community to really be almost integrated into the hedge fund and the big institutional environment? >> you're right on one aspect of the etf market. it's not around equities because we have enough liquidity globally, whether europe or asia or stateside here. fixed income is a problem because one of the outcomes of all the regulation was to get money center banks out of trading fixed income so there's no liquidity in that market so the problems we're seeing and the concerns that the regulars have and the investigations that may occur will be around what's happening on the fixed income side, but you've got to remember
5:29 pm
something about the etf market. can't just throw it out there. you've got to convince an index like ftse, russell or nasdaq or somebody else or the nyse to work with you to develop a strategy. otherwise, you know, you can't really get where you want to go. you've got to back test the stuff. you need 140 guys to do the work. it's not that easy. this is a tough business, but liquidity is really around the fixed income side, not the equity side. >> you know, kevin, you talk a lot about dividends and we've had conversations about it on different shows. let me ask you question. as dividend yields are rising for the wrong reasons because stock prices are going lower, specifically in energy. is there a certain point where the dividend yieldsration a red flag for you? >> yes. because your rules have to test for increased yields because of equity collapse. i mean, you don't want to own a stock that has 11% yield that's lost 70% of its value so certainly they are probably going to cut that dividend. there's problem with the business, but that's why the new rules-based etfs screen that
5:30 pm
stuff out and they protect you against overconcentration and utilities, for example, or in banks or in energy itself. you can own some energy as long as it passes the test of the rules. right now you're going to be guided to names like chevron or mobil exxon that have really high quality balance sheets if you have rules because everybody else is going to zero in energy if energy stays down under $30. >> but let's say in the energy patch, you know, you have the case of an exxon and a chevron, and you also have other cases where the dividends are approaching 5%. they are not necessarily 11%. how do your rules suss out companies that may have some stress where you could suffer on the equities side a sharp decline even though the dividend may not get cut but it won't compensate with a 6% margin on the equities side. >> you look at assets and productivity. the outcome of strong dividends has nothing to do with screening for dividends, the outcome. rules that are testing for strong balance sheets to generate cash. the fact that you get a strong dividend yield out of something
5:31 pm
like ousa is the quality of those companies is generating cash, and they -- they elect to distribute it to you. i like dividends because they provide less volatility. if today, if you own dividend payers only, today we lost 80 bips in the s&p. 144 names that passed the screens i'm talking about were only down 40 bips. that's a 50% savings on vo lvmt i love cash. in cash i trust, and i think everybody else is going to love it by the time this year is over. >> we lost fast cash, fast money. >> came down to hang with us and he's unbelievable. >> he'll stick around, by the way. >> stick around, kevin. >> so windy here i used to have hair when we started on this show. >> i'll lend you some. >> we just heard from kevin o'leary and his rules for investing in etfs. coming up next, he'll tell us the two markets buying right now. europe and asia and why they are so attractive. plus, is marc faber, mr. gloom and doop taking his happy pills? he says there's one thing every investor needs to buy right now.
5:32 pm
he'll tell us what that is. much more "fast money" live from hollywood, florida, right after this.
5:33 pm
so attractive.
5:34 pm
♪ light piano today i saw a giant. it had no arms, but it welcomed me. (crow cawing) it had no heart, but it was alive. (train wheels on tracks) it had no mouth, but it spoke to me.
5:35 pm
it said, "rocky mountaineer: all aboard amazing". welcome back to "fast money." we're live from hollywood, florida, this evening. here's what's coming up in the second half of "fast money." jeffrey are gundlach raising eyebrows with what he said as this very etf conference. the comments that has everyone buggs and are we about to experience a 1987-style crash? why one market watcher is sounding the alarm on stocks. but, first, let's get to international markets. all eyes are focused on china. there are other markets out there across the globe in turmoil. let's get to cnbc's done chu who is breaking it back at headquarters. dom. >> melissa, many of the
5:36 pm
countries have country specific etfs that trade here that have been allowing some investors to capitalize on the rise or fall of the markets but let's take you through a quick reset of what's happening with these markets. we do know that here in the u.s. we are something called correction territory. that's when an index or a stock or any kind of asset follows 10% or more from its recent highs. just the name that some traders call it. if you look at some of the markets that are in that area right now. in correction territory. it's also india with their index, the sensex. the know kay and japan, in france. those have all pulled back by between 10% and 20%. now, if you take a lock hat the bear market side of things, we know a lot of the global turmoil has been emanating from china, also brazil, russia, even germany on the developed market european side of things is showing real signs of weakness. they are in bear market territory, something referred to in an asset or index falls greater than 20% from its recent
5:37 pm
highs. the interesting part, if you look at the european stocks because we think of them as our developed market cousins across the atlantic. about 14 members of the euro stocks' 50, like a blue chip european stock index, 14 members are trading at below their book value. so in valuation terms, many of those, melissa, are european banks. you look at names like bnp paribas and banco centera, a lot of them european banks, france, spain, germany, deutsche bank as well trading below book value so it brings into debate how much of these stocks traded the very discounted valuations on the european side of things. back over to you guys. >> all right. thank you so much, dom chu. kevin, you will actually like some of these markets. >> i have to admit i do. you know, we have to think about the last ten years, and people have forgotten this. if you look at a heat map of where returns have come from from freeing physical like asia
5:38 pm
or europe or stateside here, we only beat the world markets 50% of the time, so if you are only investing stateside, you're missing performance all over the world. you can't know with certainty. last year, for example, europe, 14 point plus returns and we were sitting basically flat in the s&p so needed to have exposure there, going with the dividend, large cap strategy. my strategy was to take the same rules that we built for osua and apply them to europe and asia so it screens out, you know, obviously financial services is pretty bad. when you talk about lower than book value in a bank, there's a reason for that because there's a lot of incertainty about draghi is going to do and his policies and there's nestle and toyota, companies with these huge dividend yields that have had absolutely you know what kicked out of them in the last correction are very attractive to me. the pes are low and the cash is high. i like it. >> okay. two points here. one is that the ecb is still in easing mode. learned that last week. the fed is in tightening mode. why isn't europe a slam dunk?
5:39 pm
sounds like it's a part of what you're saying and i think about gucci or ferrari okay, you know, names that trade here, and the luxury market is shot by china, show how do you reconcile that? >> so i think to myself, okay. what's the heat map going to look like in 2016, 2017? i can real el only see 24 months out in terms of allocation. this year going into this year i'm going to go 25% in europe, 25% in asia and, remember, asia is not just hong kong, it's australia and malaysia, thailand, japan. >> japan. >> tiptoe through those tulips right now. there's fantastic value. it doesn't mean they will outperform us and the pes are lower and the cash is high. the thing that's the override ing things is our dollar is on fire. a huge headwind and if you're selling a japanese car part in the united states, you've got a huge advantage. if you're selling cosmetics or nestle is selling food goods,
5:40 pm
you've got a huge advantage. the only way i can play that is i've got to own some of those guys. >> sure. >> that's how i'm doing it. putting 25% in europe, 25% in asia and i don't have to be on hedge had. i can hedge it and i've decided for this year i'm going to go basically unhedged. >> i love your optimism and love your view on the markets but 1010, 15 years ago most people couldn't name a central banker and now we hear from them seemingly every day, not only in the united states but overseas. does the fact that the they are part of the conversation now concern you at all? >> you know, i share that concern all the time, but then i go back to our '07-'08 and '09 with paulsen. you think they are spending money. remember what we did here. we spent billions of dollars to prop up our markets and they learned from our playbook and liked what happened in the states and said we'll do the same thing. draghi said i don't care how much i've got to spend, i'm spending it. i'm listening and saying free money and i'm going over there and buy into names that i think
5:41 pm
will be the beneficiary and not knowing with certainty but half the time they outperform us. >> are the u.s. investors are spooked? do you think u.s. investors are well educated enough and that you guys can bring that perspective to them because i get the sense that at a conference like this that people will still feel that this is the place they have to be invested and the place they can only trust the governance? >> i think that's a fair statement, but that's why i'm 50%, you know. in the united states i trust and in the u.s. dollar. >> i don't agree with that view. >> that's why i'm 50%. but my investors feel that way, too. but i'm pointing out looking at just history. you only have to go back ten years and you can see so much performance came out of asia, came out of europe because they have big companies. i'll tell you something that we've all forgotten about. two years ago was the turning point. there's more billion dollar market cap companies outside the united states than it it today. >> right. >> only 3,700 public companies and all of these indian, asian companies and all kinds of sectors have gotten really big because they have enjoyed gdp growth twice ours for a decade
5:42 pm
now so, you know, you can't tell me that a company in india that's bigger than gm shouldn't get some respect in ought motives. >> sure. >> i'm going to throw them a bone. >> kevin, thank you. >> take care, thanks. >> great to see you here. kevin o'leary of o shares. would you buy or sell any of what kevin likes? >> first of all, as far as japan goes, what's really interesting is companies in japan years after years, the lost decade, everybody is learning about it, roe much better in j.the ecb, a lot of people, and this point was made by a couple of people, the diversions between central bank policies like this and gdp differentials are getting a lot closer, why wouldn't you be in turp? >> if you look at the rigor ketch put together in his etf you have to look there absolutely. it's clearly well thought out and clearly under some incredible scrutiny in a world that needs scrutiny. i'll say this. india has been an outperformer and germany -- there's -- i understand deutsche bank is a huge part of it. just the performance of the daxx
5:43 pm
again gives me pause. >> the perception is that they are china blanks and europe is the biggest exporting economy in the world. >> all right. up next, double line capital's jeffrey gundlach sounding the alarms on the markets right here in florida. and marc faber is making moves. the one thing he's buying right now hand his thoughts on whether we're still heading for an '87-like crash. much more "fast money" from hollywood, florida right after this.
5:44 pm
5:45 pm
5:46 pm
>> welcome back to "fast money." we're large from the world's largest etf conference right here in hollywood, florida, and cnbc's bob pisani is back with the key takeaways from the conference. jeff gundlach was bun of the highlights. >> or lowlights. >> never seen him so bearish. jeff spent the first half of his presentation railing against the fed rate hikes. >> i don't think it's any
5:47 pm
surprise that markets around the world have been collapsing in the aftermath of the fed raising interest rates because they continue to idiotically say we're going to raise rates eight times by the end of 2016. the fed has to dial this rhetoric back or the markets will humiliate them by further declining. >> profit margins fat, oil can't rally and manufacturing going down. he was very bullish on india. elsewhere bill mcnabb the ceo of vanguard gave the keynote address and took the opposite attack of gundlach and advised investors to stay the course. >> we're telling investors that this volatility may be with us for a while, but it's very important to stay diversified, keep a long-term perspective and so far the behavior is actually reinforcing that. >> finally, one sign that the etf business has hit the big
5:48 pm
time, gaks is in it. they opened three new etfs in september. got decent assets under management. we asked them why are you going into the business, and they said they told us their clients were demanding it. >> this is a new business for goldman sachs' asset management and it's real driven by client demand. increasingly our clients are moving towards rules-based strategy and they real like the etf wrapper for the traditional rafters of intraday trading and tax efficiencies. >> that was the head of etf strategy for goldman. goldman has the head of etf strategy, who would have thought that. the biggest worry sheer assets under management have been growing for ten years in the etf space. we see outflows this month, rather significant for mutual funds and etfs. they are a little concerned now that perhaps this might be the year when we get flat inflows. that's sort of the big, big concern right now. i think -- >> peak etf? >> i think it's a little
5:49 pm
premature, and that's actually an issue. >> it's a case, first of all, at some point do we worry that etfs are faster money within a slower money construct and that's one of the concerns that people trade them much more actively. dunlap versus vanguard. think about each guy's book. >> yeah. >> not surprising. i would like to fall somewhere in the middle. >> fast versus slow. >> and what's vanguard going to say and gundlach, gundlach is a bond guy largely and the doom and gloom coming out of that to me ultimately is going to be about pushing yields lower and lower and buying bonds, and also being very bearish on credit which he was. >> peak etf in terms of number of etfs or in terms of -- the asset base, maybe it will flatten for a while. >> yeah. >> seems like mutual funds are headed the wrong way. etfs are headed the right way. >> 2.1 trillion assets under management, been going up 10% for years now, and i think that's the question. whether a peak asset under management. i don't think so. i think they are a little bit premature. 1,600 etfs i think we've got right now, 70 etf providers.
5:50 pm
that's going to go up dramatically this year because active management is coming in in a very big way. we'll see dozens of new active management products. there's an idea that i'm not particularly big on, but guys are looking at it. the guys who run the mutual funds are seeing assets coming out of mutual funds and into etfs and saying we've got an idea and can do a lower cost. >> bob, great to see you. >> pleasure. >> nice shades. >> great having bob here. >> bob runs this place, by the way. >> love being. >> flocking around bob that he's the man. >> i'm just here hanging out with you guys. >> coming up next, dr. doom and gloom has a warning for the world and this time he really means it when he says stocks are set for a major crash. marc faber joins us in just a minute. you're watching "fast money" on cnbc, first in business worldwide. son. trendsetter, tastemaker, and teenager. watson, you sound like a fan. millions look to you for advice. i know... i can't believe it. i am learning to analyze social media to spot trends and predict demand. sounds like you spend a lot of time online?
5:51 pm
i constantly absorb online content to follow shifts in pop culture. so... you're learning to think like a teenager? yes. how am i doing? well... uh... can a a subconscious. mind? a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?
5:52 pm
>> kimberly clark's brand touched one in four people in the planet daily. falling knife or op it's hard to find time to keep up on my shows. that's why i switched from u-verse to xfinity. now i can download my dvr recordings and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come!
5:53 pm
can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. welcome back to semi-sunny and very windy hollywood, florida. gold is up, the ten-year is below 2% and the vix is surging all things that bring a smile to the face of marc faber. dr. doom himself, editor and publisher of the gloom, doom and
5:54 pm
boom report here with us here at the etf conference. marc, great to have you with us. >> thanks very much. >> been a very volatile couple of week for investors. what do you see for us? is this the start of something bigger? >> before it was not volatile enough and now it's more volatile than maybe it used to be, but i think that's the pattern. it will remain very volatile because interventions, especially monetary policies instead of lowering volatility, they post pope it and then it explodes, and this is actually what monetary policies shouldn't be designed to do, but that's the end effect. and so i think that volatility will stay very high and that it will hurt a lot of investors. >> hurt by how much? on january 7th you said that the s&p 500 would fall between 20% and 40%, and this prediction you've been making consistently over time. i mean, in july 2015 -- in july
5:55 pm
of 2015 -- >> it would crash up to 40% and in august 2015 you said the u.s. would stall a bear market. you said we'd be in style for a 1987 crash. where are we with all. predictions? >> i didn't say there will be, i said there could be. >> okay. >> and i want to say one thing about the u.s. market. as you know, the average stock in the u.s. from its 12-month high is already down 26%. there are lots of stocks that are down 50% or more. the indices, they have hidden the weakness beneath the surface, but basically the market has been weak for a long time, and incidentally, the u.s. market is just one market in the whole world. all the other markets in the world are down meaningfully since 2011, especially in u.s. dollar terms, so the u.s. market
5:56 pm
that is been holding up much better than other markets, and now it's adjusting to reality, and the reality is that we're already now almost in a recession. we're in an industrial recession. >> in an industrial recession, okay. >> but, of course, media people and financial people, they don't feel the recession yet because they are in the wonderful service economy that is booming. >> right. >> okay. >> and ordinary people are not booming. that i assure you. >> unfortunately we have to leave it there. thanks so much for joining us. it's a pleasure speaking with you, marc faber. >> two things i would say. i think some. things marc says it means that the dollar probably i think has peaked for at least this part of the cycle which more bullish and all the assets destroyed by the dollar. >> the dollar is peaked, something going on in gold. it has performed well. gld. >> all right. coming up next, final trade. stay tuned. competition, it's protecting customer trust.
5:57 pm
every day you read headlines about governments and businesses being hacked, emails compromised, and intellectual property being stolen. that is cyber-crime, and it affects each and every one of us. microsoft created the digital crimes unit to investigate and fight cyber crime. we use the microsoft cloud to visualize information, so we can track down the criminals. using our advanced analytics tools, analysis that used to take days to run, we can now see in real time. and we're building what we learn back into the cloud to make people and organizations safer. when it comes to the cloud, trust and security are paramount. our passion is making life tougher for cyber criminals, and making it safer for you and your customers.
5:58 pm
5:59 pm
ma already time for the final trade. tim seymour? >> buy the leather jacket and pony tail, i would be fading a little bit of mcdonald's here.
6:00 pm
this is a case where we have -- starbucks. i this i it's a case where the thing has run too far. >> welcome back. great to have you back. i'll get crushed for this. amazon earnings on thursday. setting up for another big "mad money" money is up next. 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. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you some money. my job isn't just to entertain but to educate and teach you. and put it in perspective. call me at 1-800-743-cnbc. or tweet me @jimcramer. in a world where stocks trade in lockstep with each other, totally linked with the price of oil, can any one business leader do enough to break the strangle hold? on a day when


info Stream Only

Uploaded by TV Archive on