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tv   Fast Money Halftime Report  CNBC  April 28, 2016 12:00pm-1:01pm EDT

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and that should benefit the companies that are there and amazon is the biggest, and on the other hand, pcs and smartphones are not selling, and that is a big part of what amazon sells. >> linkedin is still down this year. >> party pooper. >> over to wapner and the headquarters with "the half." welcome in, guys. the facebook phenomenon, and that stock is surging this hour, and it is the new must-own name, and with us, joe terranova and jon and pete najarian, and the halftime resident shark. and now, let's kick it off with fa facebook, and sending the shares to a new high, and a number of firms are raising the price target to give a much needed bum bump to technology, and we are asking this question this hour, is facebook the new apple? kevin o'leary, $30 billion in
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market cap added and it is now bigger than j &j and creeping up on anal? >> well, it is, and the problem that it has has and the problem i have, is that i have voting shares for a whole host of compliance reasons, but what keeps it out of people's portfolio is that fact alone. >> well, doc, is it going to be in everybody's portfolio? >> i think it should -- >> well, where apple was, facebook is there now. >> well, i'm a trader and not investor. and for the wealth management clients, knock on the wood that we were loaded up on the facebook, and call spreads and naked stock, and it worked out well, and pete made a great call yesterday on the show about it. as far as me and a trade, once it gets up to the level of $1119, i think that you let it rest a little bit and it does not mean that it is not going to go to $125 and work higher from there, but i think that after
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this serious afterhours pop which has held now so far today, but basically not extended past, i think that you would get a couple of days or the couple of weeks to rest and consolidate, but, yeah, this is should be, and you have edison, churchill, steven jobs and zuckerberg has to be in the conversation. >> and pete, mobile ad power is huge, and the ad revenues jumped 57% 57%, and the mobile ads are 4/5ths of the revenues, and how can you not own this stock? kevin o'leary has specific investing rules for the average joe looking at the stocks, and that i say, i used to think that apple was that company, and maybe they think it is, but is facebook the new apple? >> well, maybe it is, and kevin would agree with this if you are looking at the valuation wise, it is difficult, and does it fit into the kevin o'leary world, and i would say it wouldn't, because when you are lookingt ta valuation, and that being said, judge, when you have the kind of growth that you documented -- >> and what a stupidly absurd
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valuation on facebook? >> well, it is not stupidly absurd, and when you look at the growth and the strategy, and what is compelling is very much like steve jobs and less than what we are e seeing presently from apple, and much like steve jobs where it is not a one-year or 3-year plan, because this is a 10-year plan, and they have made 50 acquisition, and where they have some of the potential growth and monetization, and in the billion-plus category, that is what you are seeing. messenger with nearly a billion, and whats app up, and you can see oculus down in terms of the vr and holy smokes, that is great. and now, to the point, i was a trader and out this morning by 9:35. the trade is there, but i dont n't know if it is necessarily something sustainable, and this is not going to stay straight up, because it is going to pull
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back. >> and why would the business pullback, joe? >> i don't see it pulling back. the user base continues to expand, and the mobile side continues to expand, and if it is going to pull back for the trade, great. but the thing that you have to focus on is that everybody has a singular strategy they focus on in the marketplace, and some may not like the valuation, and may call it richer above the pe, but you have the understand what is going to drive it higher and this is the institutional money, and longer term that is what matters and this is going to create the bullish trend. think for a second, because if you are a large cap growth technology money manager, where are you going if get the performance except in the name like this? your favorite son is gone. >> right. where you were. >> and apple is going to get it. >> and where you were getting the money, the performance in apple for a big growth name. >> and you know, joe, those words scare me, because i can go back to time over a decade and say the same words about yahoo!. it was the same story. the only way to get performance
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is to own this name, and institutional name, and went to $280 and never returned any capital to the shareholders and never paid a dividend and look at it today. i don't know how you can say that about facebook other than the very fact that this euphoria like this, and the institutional 4% to 5% waiting scares me. >> and this is a perfect segue to bring in this gentleman, josh brown on the phone, because he has a blog post that everybody should read. >> i am sure. >> and it is called the new religion, and that is what facebook is, and josh, are you there? >> i am here. >> and tell us the story, because it is a great read in what you are calling a new religion. >> well, yes, and i don't want to get, and i don't want to scare kevin any further, and i know that he is an excitable fellow, but here is the thing with facebook and not to justify the 30 billion stock, but maybe
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it is to justify owning it, is there any corporation, religion or anything that captured this many people's attention at any point throughout human history on any given day as facebook? 1.65 billion people every month. 88 -- excuse me, hundreds of million ofrs people every hour of the day, and we are spending an average of 50 minutes a day now, and that is actually going up and not down in contrast to something like yahoo! and the question is, is there another company that comes along any time soon that can claim anything like this? they are actually growing the time spent, and growing the amount of users, and so it is a stretch to get to where the stock is trading. the bulls are doing something like, let's say $35 billion in sales for 2017, and 30 p&e on the $30 per share, and they are using the enterprise value to cash flow, and they are finding a way to get to, let's say 130
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or 140 per share. it is probably a stretch, but the problem is that facebook does not disappoint even when it should. >> i am thinking that until it does. so i am going to be calling that the josh brown call. he called the high on the stock. if i ever heard a sell signal, i just heard it now. >> what did i say? that they own -- >> a skeptic like you to fall in love like this without even dating the girl. >> and i no, ma'am not falling in love and bullish for 100 points, but the point is that is what is going on right now. >> i don't care about yesterday, but talking about the future and i'm loving what you are saying, because it is telling me to sell, sell, sell. >> and josh, just a quick one for you and kevin, and i love the comments both of you on this. and one of the things that kevin brought up is yahoo! of course, a and he said, joe, that is the same thing that you could have said about yahoo! but one thing that you cannot say about facebook to the negative is that jerry yang left yahoo! and from the moment he left, the stock was straight down, and the
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visionary left the firm. if zuckerberg left there would be, like rats off of a sinking ship. but zuckerberg is not leaving, and he is a young man and he is going to be staying for quite a while, and he is giving a wway e wealth. >> but isn't it easier to let the company have a misstep or two before you decide that it is tops? in other words, i understand that the temptation to say it is euphoria right now, and things could never get better, and maybe it is true, and maybe this is the best quarter that the company ever reports, but why anticipate that? why not say, okay, it is obvious ly, the expensive stock, but it is doing everything on the planet to earn it. it is deserving the multiple, and we are in the market right now, and kevin will agree with this, and people are paying 20 times the multiples on kellogg's and coca-cola, and bidding up mcdonalds because they are launching breakfasts in the store all day, and if they are willing to pay the multiples like that for a large group of large cap names, and doesn't facebook deserve a little
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premium? >> well, josh, if you are a vampire like me and living and trading in investing for 260 years, you have seen this story before. and you have been at the movie. this is the level of euphoria and the level of ownership, generally gives you a top even though the company is performing and you are trading at crazy price at this thing, and remember, it does not return any capital, and for some institutions, they will never own it, because of the class. >> and why not screw it up first, because what if, what if they don't have a misstep, and they continue with this level of momentum on the revenue earnings, and user growth, et cetera. >> what if nay do have a misstep, and look out below, my friend, because it is going to have a correctional like you have not seen in a while. >> highly possible, and nobody would disagree with that. >> josh, see you back on the desk soon. and facebook, the new religion according to josh brown and for more on facebook, bring in aaron kessler who is going to raise the price target to 140 this morning, and aaron, good to see
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you. >> great. thanks for having me. >> would you weigh in on the conversation that you have been listening to? >> yes, we believe that facebook today is executing on all cylinders, and active users up 16%, and the ad growth is up 63% year over year, and so similar to yahoo! you don't get fired for buying facebook, and so with the ad inventory, it is going to continue for several years here sh, and facebook is in the relative early angst, and valuation is less than 25 times earnings even with the pop today, and the valuation is reasonable. we are cognizant that you won't trade at 40, 50 times multiple on the facebook, but the high 20 or 30s with the multiple give whaen you are paying for the traditional company is reasonable given facebook's growth rate. >> can i ask you if there is any concern on the ra radar screen regarding the channels of reven revenue?
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and you just said that they are hitting on every cylinder, but which cylinder is not firing for you, and or is it perfect? >> well, the instagram channels are going well with the video side, and what is less clear is oculus if that ever scales, and we don't believe it is a near term initiative in terms of how big that can be and messenger as well with the new chat bots, and less clear on the chat bots when those monetize in asia and you have not seen a model like that in asia or europe thus far, and it is less clear to scale that business in the near term. >> joe? >> why is it that we are talking and kevin mentioned the possibility that the model of facebook could be like yahoo! and why is it more aligning itself like the model of google, and the success that they have had over the last 10 to 15 years? >> yeah, so yahoo! view is more of the news content site, and often consumers change where nay go to get news as we have seen over the years, and now they are
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going the twitter or other sites or facebook, and facebook is a utility, and 1.6 billion people connecting your friends and family on to that, and less likely to leave the facebook ecosystem, ecosystem, and you could argue that people use it less, and that is a concern for the investors, and now using instagram, and smart acquisitional on the facebook's part, and good thing they acquired that, because it is a rapid growing rate as well. it is an ecosystem of properties and not just facebook anymore. >> and lot of euphoria, and aaron, what is the realistic risk in the story? >> yeah, we don't see much risk in the near term. you will get a little tougher come independence the second is half of the year as you are starting to anniversary the instagram monetization, and the video which is very strong and ramped up in the first half of the years, and so some tougher r ramps, and like google, decelebrate to 20% growth or 30% grow growth, and it is not going to
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obviously sustain 30% growth, and as that happens, you will get the multiple contraction and we are cognizant of that, and we are not using a stretch multiple in our belief. >> and aaron, a quick one in the ads in particular video, and facebook killed it in that category, and google did not, and as you said, google is doing a big number, but not growing as fa fast. that is going to stay the case going for the next two to three quarters that you will see. >> yeah. >> and in our view, google is growing at to a a slower pace, and the service is relatively mature to social, and so search is growing low double digits and you have youtube growth, and a few basis points on top of that, and they don't break it out the youtube results, but it is overall, google is mid-teens and long-term grower, and the current valuation levels on 15 times earnings and pretty reasonable valuation on google especially with the pgs of
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one-times. >> thank you aaron kessler, investor of raymond james. and speaking of facebook, don't miss jon najarian broadcasting on the facebook page at 1:15 p.m., and send in your questions. >> and we might have a special guest, and kevin might drop by for a couple of seconds, folks. >> all righty. >> we like that tease. here is what else speaking of the teases coming up on the the after halftime report. >> is the bull getting tired? mohammad alairian says not to get so comfortable, because a 10% drop could be in the guards. and exxon and others going to be reporting tomorrow, and why is kevin o'leary buyinging? and michelle cabrera caruso with a exclusive look at the business in iran. that is coming up on "halftime report."
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we focus on helping our customers understand it and be able to apply it in the best way possible. not only is it good for the environment, it's good for the businesses' bottom line. these are our neighbors. these are the people that we work with. that matters to me. i have three children that are going to grow up here and i want them to be able to enjoy all the things that i was able to enjoy. together, we're building a better california. welcome back to the "halftime report." i'm john harwood. former house speaker john bainer like many others in washington who dislikes ted cruz took a shot at him before an audience in stanford. he said that he would vote for donald trump before ted cruz and he called him the most miserable s.o.b. that he has ever worked with in his life. >> he allowed the inner trump to
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come out. i have never worked with john bay nor and the truth of the matter is a that i have never worked with the man. i have met him once or twice. and if i have said 50 words to john bay nor in my life are, it would be pleasantries, good to see you, mr. speaker. >> and he also called him lucifer fer in the flesh, and cruz who is trying to make a last ditch effort to stop donald trump for the republican nomination tried to turn it to his advantage, and when john bain -- john bay nor calls me lucifer, he is not talking about me, but you. we will see if it works. >> and reacting to the shocker out of japan overnight, the central bank is holding off on the additional stimulus plunges, and joining us on the set is mohammad alarnian from alihance, and good to have you here, and
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this is a shocker. did you see it coming? >> well, the shocker is whatever they do, they get it wrong. they ended up doing too much last time and suffered a currency depreciation, and now they have gotten the same outcome this time, and they have fallen into the trap that is not familiar to us, but in emerging economies. >> and so there is a discussion of whether our own central bank has lost the cred and another reminder that the conversation remains front and center. >> so if you are look at the line that separates policy effectiveness to ineffectiveness or counter productive the bank of japan is there. and next is the ec bshb, and af that is the people of bank of china, and then this fed. so we have a while to go, and there are other central banks ahead of us. >> in some respects, a wakeup call that the era, and that is what it has been an era of the central bank stimulus is coming to an end? >> well, it is not really a wakeup call that the central bank are less effective in
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delivering the financial outcome s. they are are great in delivering the financial outcomes, but not economic outcomes, and so we are getting nearer to the point where they will have difficulty to deliver them. >> and how should the investor and the traders around the table factor in what the fed could do in the months ahead and how the markets could react as a result. >> well, most of us have lived through a special period, because two things have occurred. fwroet has been low but stable. and central banks have repressed financial volatility when it is high. so both of them are aggression, and so name-specific elements are important, and tactical trading is important as t strategic positioning, and cash is the only risk mitt gator in the portfolio. >> mohammad, yesterday, dim lo said almost exactly that, that it is tactical, and the people going forward can't rely on the old trading paradigms and they have to be tactical and quicker, because that is what the markets
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are going to reward going forward and it has rewarded more this year, and you see more of the same? >> absolutely. if you are relying on the beta, and the market beta, and we have been in the incredible wayne's world. and we have -- >> everything is a beta of one, and it follows? >> yes, and two months ago people were talking about the recession in the u.s. and china closed captioning and the markets were near malfunction, and look at us today. the same thing happened in november and in the summer last year, and so we are in the rapg-bound world where you have to be tactical, and strategy won't get you there. you have to be tactical. >> and so listening to what you have said, and tell me if i am interpreting it, i want massive market cap, an pristine balance sheets and look for names that are low vol and i want to hang on for a crazy ride, because that is what it sounds like is going the happen. >> i agree with everything but the first one and then i will throw myself into the debate that you just had. i also want a name like facebook
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that can combine platform and content. that is the most powerful equation today. >> and you are make a sector call? >> no, a few companies that have the content, and are able to establish such a platform that they are going to become dominating, and that is very few of them, but they are going to be taking you for quite a ride, because it is a powerful equation. >> first time ever, mohamed el-erian, the stock picker. i look it. >> and now, the risk from the global environment to take is important development. it is going to open up the door a little bit for the june hike, and if the markets continue to behave, i think that we will get a june hike. >> and i saw op-ed on cnbc.com, and it said forget it june fans, because the fed is going later in the year, and others said, to, the feds set the table yesterday for june. and yet, again, we are confused. >> and did you not see the
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sell-off of tellco which is a sale for longer hike. the market is not i boog buying. >> that is because we have learned the market has learned to -- >> that is a scary thought. >> that is what we are conditioned to believe, whenever the markets have said, no it is not time for the rate hike, the fed becomes more dovish and whenever the market starts to feel maybe it is the time, the fed is more hawkish, and so we have learned or wrong or cop dissioned to believe that markets lead the fed and not the other way around. >> and now, back to the corridor in january what was the concern? devaluation. >> and think of february 10th. >> all right. but what happened in february? a g-20 meeting, did it happen in the back room and a global coordinated effort to make sure that we didn't get into the massive devaluation and now you have seen the u.s. dollar retreat, a and that is what has been, you know, a significant driver of whether it is oil price rising, the reflation
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trade but beneficial for the equities. >> i don't believe it is a deal there, and we have stumbled to where we are now with the countries pursuing their own national objective and nobody held hands at the g-20 and said, let's have a plaza accord. i'm not a buyer of that, but i don't know for sure, but i feel that we have stumbled like we have are before in which the period is aligned, but how long will it stay? keep an eye on the yen because at 108, it is not good for the global economy. >> and do you pay close attention to the volatility, and i ask because you say you have to be prepare for the downside, but are you paying attention to volatility in terms of the hedging or doing something to maintain a run with the bulls burk then protect yourself to the downside in case we see a 5% or the 10% correction? >> absolutely, but i have been wrong in the volatility -- >> but it is wrong, because you are willing to give up the insurance policy of the p protection and you will do better with the protection of the downside at cheaper levels,
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right? >> yes, and a better decision that cash will come to you natural i will to position yourself, but it is a period of incredibly low volatilitvolatil if you have residual faith in the banks, because it is a good repressor of the volatility people believe it can continue. >> and it is the volatility, judge, people constantly on the network all of the time, and pretty high volatile environment, but it is not true. because we have pulled all of the way back -- >> and look at the currencies and the swiss franc. >> and i'm talking about the s&p 500 and looking at the volati volatility and if you are looking at the bandwidth of ten years, we are at the low end, and '10, '11, '12, we are at the lowend and you should protect the portfolios right now, and that is what he is saying. >> do you own stocks? >> i do. >> facebook? >> recently in january and februa february, because i believe that you is to be tactical, and so i do. let me say one thing that the
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biggest surprise to me has been the three unhinged markets, high yield, currency and commodities didn't contaminate the rest of the financial sector. >> high yield has been a good hold for the last 90 days, and excellent returns, thank you. >> and i know -- >> so you don't like it, because they have come in beautifully. >> and the emerging markets are have done extremely well. >> you like that position? >> so among the top tactical trades toez are the ones, and i would fade those three segmens,s i would. >> and i would have better returns on the high yield paper in the compression of the spreads over the last 90 days than stocks. >> and how did you feel beforeha beforehand? >> and the point is that the volatility, and we don't talk enough about the vix income market, because there is a lot of vol, and it is senior to the dividend paid to the stock, and people don't realize it. it is paid first, and there is a lot of value in the high yield and if you own the stock and it is paper above you, why not high yield, too, because you are ache mag 6% or 77%. >> but you agree it is name specific. >> yes, and absolutely, and that what we do, and why we are here.
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>> yes sh, but i would not tell people to buy the high yield yet. >> and no, i don't buy the index indexes. >> you sell the treasuries're? >> well, that is a hard call. really hard call. i do not -- if you are holding the treasuries because they are hedging thek which ti, it is not going to happen, but treasuries as a true risk mitigation play are not priced to be a good mitt gator, and so you are holding them here, because you believe that the u.s. economy is not going to be bouncing back after what is a bad first quarter print. >> no doubt. great to have you. >> thank you. >> and thank you so much for coming on the set to kick it around for us. and exxon is set to report ahead of the bell, and with the expectations so low, could they surprise? in the top analyst on the street is going to join us. and amazon earnings after the bell, and will bezos report a
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hello, everyone. i'm sue her rera and this is th cnbc news update for this hour. violence intensifying in syria over the last 24 hours.
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authorities are reporting that at least 61 people killed in aleppo by air strikes. 27 of them at a pediatric hospital associated with the charity doctors without borders. former house speaker john bay nor as mentioned tearing into the presidential hopeful ted cruz. he referred to him as quote, lucifer in the flesh" in a stanford university forum yesterday. >> and the bombardier jet series is award ed to spacex, and they have been asking for $# 1 billion the stay afloat, and delta's new order is is not expected to derail the request. >> and a new contract for elon musk spacex because the military is giving them $83 million the send a air force satellite into space. the contract is a loss for boeing and lockheed whose joint venture has had a virtual mon p
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monopoly on contracts like that for years now. you are up to date, and more "halftime" after a quick break. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class. now receive up to a $3,000 spring bonus on the e350 sport sedan.
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man 1: i came as fast as i man 2: this isn't public yet. man 1: what isn't? man 2: we've been attacked. man 1: the network? man 2: shhhh. man 1: when did this happen? man 2: over the last six months. man 1: how did we miss it? man 2: we caught it, just not in time.
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man 1: who? how? man 2: not sure, probably off-shore, foreign, pros. man 1: what did they get? man 2: what didn't they get. man 1: i need to call mike... man 2: don't use your phone. it's not just security, it's defense. bae systems. we are back on the "halftime report" and exxon and chevron is
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set to report to today on the back of a rally for crude this year, year, and what can we expect? buys ahead of the numbers? let's bring in doug terreson, and you have urged people to buy exxon mobile, and unless your call has changed because of the credit rating change earlier in the week. is that impacting your look at this company? >> no, we believe that the stocks should be bought as they are all year, and we believe good results tomorrow, and part of the reason why is that most of the peers have exceeded expectations, and these guys probably will, too. but they are both near and long-term issues that tin ves or thes will be interested in. near term, similar to the ther companies that oil and gas prices were low, but we cut the costs, costs, and that supported the result, and by the way, i believe that exxon mobile is
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going to say they are cash neutral at $40, and conoco phillips announced $45 a barrel for the cash neutrality, and that is real progress, and good news, but what is not so good news is while the earnings bottom ed the results were 15-year lows and worse than the oil prices at this level which is the first quarter of 2004. the investment implication is that if the companies are earning less and less at the oil price level. they may have longer term issues than there are, and we believe that the companies are surprised friday and still overweight, and we believe they will travel higher over the next several months as the oil prices recover. >> and why shouldn't exxon cut the dividend? >> well, the reason is because it represents between 50 and 100% of the total return in the past decade, and so therefore, if, you know, the the companies were to cut the dividend, it would call into question the value proposition, and the business model by which they plan to the attain that value proposition for the
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shareholders, and it would not serve them well in my opinion. >> and i have kevin o'leary of the "shark tank" fame, and he has dividends that are near and deer to his heart. >> i have yoend all of the names, and just to keep egs expose sure to the energy sector in the downturn, because these names scream the best balance sheets of the energy sector, and i take credence in the balance sheets, and i can guarantee you as an investor if any of the guy guys that they did a material cut to the dividend, i would not own these stocks for 200 year, and that is absolute ti reason i own them, because i expect the balance sheet to support them in the down period and cut costs, but i assume that you are telling me they will do exactly that? >> they will do exactly that, and we believe that the industry which is growing at the expense of the reare turn since 2008 may be at a transition point. we think that they are beginning to real ize that maybe we shoul be more focused on the returns
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maybe at the expense of growth. conoco phillips spelled that out on their conference call, and if so, we could be in the sweet spot for the investment company, and the oil prices rising and using the e free cash flow to rebalance the sheet, and give dividends to the shareholders, and so the stocks have outperformed the market year to date, but the the dif send very important for the companies and if they cut them, they have a lot of questions to answer. >> doug, thank you for coming to the phone. doug terreson, the top rated oil analyst on the street. and conoco phillips cut the dividend, and they have done best? >> yes, because the balance sheet improved with the move. you are going to have to cover the balance sheet. >> why wouldn't the others? >> well, the time to own the energy is because you don't know when the sector is going to be
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turning and it is driven performance in a wildly upside wa way, and not only with the quantities, but the garbage has been moving more. so the question is when you buy a sector, do you take the garbage with you or live and covet the balance sheet? all i care about now, particularly after listening to mohammad enforce it, i'm a balance sheet dude. because i will get protection there on the downside. it is proven in conoco, because you got protection on the downside because of the balance sheet, but if it were a junk -- >> well, you not shaming them? >> no, because i was protected, but the thesis is to take the protection in the balance sheet, and even when the pooh-pooh happens and they cut the dividend, you have the protection of the balance sheet, and that is theme of 2016, and i'm sticking to it, my friend. >> all right. and rare look inside of the iran stock exchange. and our michelle caruso-cabrera. >> what iran lacks in size, it
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makes up for in heart. coming up on the halftime reare port, ri will teach you how to say you are bullish or the bearish next time you are in iran.
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coming up at the top of the ohour on "power lunch" this day of deals, a giant one in the health care industry, and the stocks that could be next in the s sector. the priceline ceo is out of here following what is described as inappropriate relationship with an employee he did not directly supervise. what a company needs to do to ease the investors' fears immediately after a scandal. and big interviews coming up, the ceo of hoe logic, and the stock is tanking on the back of the latest earnings. and billionaire investor carl icahn is going to join in the conversation, and more, and scott, you are going to be joining us for that, and i understand, and i look forward to that and what are the redskins going to do to the skin
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s in the nfl draft. >> oh, my. carl. tyler -- >> i wish i had carl's bank account. >> i do, too. and i am thinking of that interview. see you soon. >> and welcome back to the "halftime report" and what is trading looking like at iran's stock market. it is not bulls or bears, and michelle caruso-cabrera is looking live inside of that exchange. >> well, scott, shooting the story at the iran stock exchange was incredibly enjoyable, because you learn that people who love the stock market are the same all over the world. you walk into the teheran stock exchange, and right in the lobby and anybody can go in there and many people sitting there watch watching the stocks trade on the screen, and it is reminiscent of the united states in the 1970s and maybe the 1980s when people would go to brokerage firm in their lunch hours to watch the ticker go by long before you could watch the ticker on cnbc. and the minute we got there and people realized that we were from a network that covered the stock market, we were surrounded by them, and they had so many questions, and we had questions
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for them, the valuations like and the favorite sector, and one guy asked, can you corner the u.s. market, and i said, no, rules you cannot corner it, and he said, we need rules like ta here in iran. you can see the seats rented boit the brokerage firms, and it is electronic trading. they have a market cap of $100 billion, and little more than 300 listed stocks and the daily volume is 150 million. next time you are in iran, you don't say ta you are a bull or the bear. here, thaw have lions and foxes. so if you are a bullish, you are lionish, and if you are bearish, scott, you are foxy. >> i love, and i just love the access, michelle, that you have gotten this week from, you know, the oil story which is so important, and then this, and really unique insight. they have a bond market? in iran? >> yeah, they do. they do. it is small. it is $5 billion and here is
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what is funny about it. up until two years ago, all bonds traded at par. 100 cents on the dollar, and i mean n iranian money, and 100 cents on the dollar, you sold them back at 100 cents, and the understood writer wrote in the risk, and the people familiar with the capital market said it is not making sense and they should trade and you should let the interest rates fluctuate on the bonds, and that is what they are doing, allowing for more capital to come into the markets, and people to raise money that way. >> thank you, michelle. and stay safe, and we will see you back home soon. and kevin o'leary traded ap apple for microsoft, and he tempted to get back in after the drop? as we go to break, we are looking at the map. s&ps are up a couple, and the "halftime report "si back after this.
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we are back on the "halftime report" and another big mover is apple. the stock is down 9% or thereabouts for the week. almost giving up another percent today. kevin o'leary, this is clearly the biggest stock story in the market this week, at least until facebook, but you will get the picture. you traded it. so to speak. for microsoft months ago and you said it right here on the program. >> yes, i actually disclosed it to you in the third week of september, and we are rule-based investors and concerned about the balance sheets, and looked at the increase of debt repatriating because of the
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crazy tax laws stateside, and bringing it to europe to come back to distribute the d dividends, and that is going to break our rules for manifested september. that's when we sold the stock. and, of course, you know, obviously, you love it when you get it right like this. this has been a real winner for us. it kept our indices out of trouble. here's the lesson for everybody to learn about apple. when you buy indices and this is the mother of all index stocks, this is a double digit waiting and it trips up. remember there was euphoria in apple back last summer. total euphoria. when it blows up, it's almost impossible to recover. it takes you down so much because it's 14, 15, 16, 17% index and it krekcorrects like , you're screwed. i don't buy indices anymore. i won't buy an index anymore. >> where do you buy this back? >> $83 to $93 tripdz me into a
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positive feeling including the dividend increase, you'll get a really good return. i'm going to assume the stock goes flat between $83 and $93. you're going to get better than market returns on cash. >> do you think we get an eight handle on this one? >> easy. no sweat. >> if it doesn't get through the 52 weeks of '92, is there a point where suddenly you say i have to relook at this and re-adjust the numbers? >> here's what concerns me. >> i bought it yesterday. >> i'm going to give you full disclosure. i force myself to try all the products as soon as they get on the market. i got the samsung 7 edge, i own this name. this name is good to me. they deliver. they're up 14% in terms of sales. this -- i've always felt that the android operating system was a really crappy user interface. it kept me away from using it until i got this. this is a problem for apple. this is very beautiful, he will consequent and features these
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guys haven't even dreamed of yet. so that's a problem. and so they're going to have to catch up. the 7 model has to be better than this. they don't have time to change it. this washes your underwear this thing. >> who is taking the other side? >> i am because i bought it yesterday. i added to the position. i look at the services. i look at the ecosystem. you talk about this all the time. the reason i think that you're going to be incorrect on this is samsung has been in front of apple each and every iteration. they had the watch before apple. they had better phones. but people love the systems itself. >> let me take you on that one. i would have agreed with you a year ago regarding the ecosystem. the primary driver was music. they already had the 10,000 songs on itunes and stle to have the phone. guess what? nobody's doing itunes anymore. they're going streaming. whether you put spodify or
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itunes on your phone, that honey hums. that's what took me over the edge. i keep my own native files. my steely dan is full resolution every single song. now on the samsung, there is enough memory to put my entire catalog on this thing. >> did you say steely dan? >> i have every recording of "asia live" ever made. >> we were talk brg about sector allocations. you listen to mohammed. he doesn't think the u.s. dollar continues to go down. the contributions has been the commodity resource names. should we be very troubled by what we're seeing with technology overall in terms of earnings and performance? these names that are getting punished post earns, microsoft, netflix, they're not bouncing back. they're going down and they're continuing to move lower. >> yeah. it's true. so here's the only way to fight that that is ever worked for me decade after decade. you have to max out a sector at 20% no matter how much you love it, including tech when it was hot. you have to sell your names down every quarterback to 20%.
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because the reward comes when the sector falls out of favor. you know it happens like. that and if you're overwaleight, 30% in energy when it tripped over, you got killed. the only way i invest today. >> all right. coming up, amazon shares rising into the earnings number tonight. our experts take their positions on the stock. the halftime report is back after this. they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point.
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coming up, i'm going to take part in an exclusive interview with carl icahn. so look very much forward to. that that's coming up in "power lunch" just a few minutes away. amazon reporting its earnings tonight after the bell. it's been a huge week for tech as you know. that stock is down nearly 8% this year after outperforming in 2015. wonder what you should do when mr. bezos? do you bet on amazon or not? >> i never owned this stock. the only way i oenld it was a prep share they brought out. i don't get it. this is the only company on earth, on any other planet that doesn't have to make money. it just doesn't have to make money. it's not in the metric of how it's tested. it won't make money. nobody cares. they push it high. the multiple is infinite. >> it's tough to argue with. that we said that on the desk for a long time. i don't know how many of us have been in the stock. i know you traded options a few
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time. i've never oenld the stock. i've been in the options world. scott, it's really difficult because they aren't as transparent as we would like them to be. we know how good they're going in cloud. we know the e-commerce dominance. but the numbers just don't justify it to kevin's point. >> when does gravity hit this? >> why is the only number that matter be the up 15% in 2015 in the face of questions like the ones you're raising about the multiple being too high? you buy it, you deal it with. >> scott, what you said is unamerican. you must be kidding. that's how bad it is. that is unamerican. you ignore the pe at your peril. >> i say if you buy amazon, you have by virtue ignored the pe. >> it's insane. i totally -- i think this stock is -- if it's in a portfolio,
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it's a time bomb. whether this puppy finally meets gravity, grown men are going to weep. >> i'm long or short this name. going into the earnings tonight, the tell isn't there right now. basically, it's calls and puts. a lot of hedging going on, kevin, because of the $13 pop it experienced because of facebook, not because of amazon. so going into it, you got to be watching it into the final three hours of trading after this show. >> the show, by the way, went off without a hitch because of two special assistants we had with us today. it is take your kids to workday. we will to brit little guys up here. did you have fun? >> yeah. >> kevin o'leary, you have a charity thing with the -- you're auctioning off your art. >> yes. >> photographs. >> i was a professional photographer in the '80s. i traveled the world. i have a very large portfolio. they're going to show it at the
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new york art show. it's going to go to teenage entrepreneurs in grades 11 and 12. we showed it in miami at the art fair there. it did very well. >> good to have you here always. always great to get your insights. of course, they like the candy machine. >> i hear it going off over there. >> power starts now. ♪ >> well that muse sick very appropriate because today it is all about making a deal, hello, everybody. welcome to "power lunch." i'm brian sullivan with tyler mathisen. melissa is off today. michelle caruso cabrera will join us continuing hir amazing special reports from inside iran. it really is an all acc show today which we love. let's dive right into the deals we got today. you have abbott labs buying st. jude medical for $25 billion. that is the biggy. abbvie

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