Skip to main content

tv   Fast Money Halftime Report  CNBC  October 24, 2017 12:00pm-1:00pm EDT

12:00 pm
of course, they have been killing it over the past few minutes. amd and nvidia used to be perennial losers to intel. >> and just like that, get the chart right up there also, it's interesting to watch the body language around this luncheon with republicans today. president trump, senator corker both there. >> yeah. >> let's get over to the judge and "the half. all right. welcome to "the halftime report." i'm scott wapner the index is the best performing of the major averages over the past throw months so how can it really climb with us joe terranova, stephanie link, josh brown and jon najarian and our special guest, leon cooper man of omega advisers, with us for the hour today from florida the dow almost halfway now to the 24,000 mark. lee, it's good to have you back. how are you? >> thank you, nice to be with
12:01 pm
you. thank you. >> so, when you were with us on august 7th, you said the market is fully valued. from then until then the dow jones industrial average is up 6%, the s&p% up 4 we overvalued now? >> not yet, no i would say that, you know, basically bull markets ended over valuation and i don't think we're overvalued use whatever adjective you want to describe it the market is not cheap and it's not expensive. so as i think i've been saying, i think we're kind of approaching normalization, and to me normalization is a 17 multiple on earnings and the trick is what is the earnings you're looking at? you know president trump and the republicans get their way, and we have a tax package, you can see earnings next year in the s&p about 150 and the 17 multiple and 150, i think it's 2550 that would be fair value, full value but fair values, and, you
12:02 pm
know, most bull markets end over valuations so took another 10% to 15% to that number. the trend is favorable and the conditions that normally lead to a big market decline, as i said, on august 7th just aren't present. you know, you don't have -- go ahead, i'm sorry. >> how much of the expectations of taxes, if any, are in the market now, do you think >> i would guess modest. i would think what's in the market is synchronized global growth, restrained inflation, stimulative monetary policies and deregulation, the pro-business environment that we're in, i think consumer net worth is up, you know. employment is up and credit spreads are very narrow, so i would say the market is discounting what it's seeing and what it sees it likes, and what normally ends bull markets, as i've mentioned repeatedly on your program, is accelerating
12:03 pm
inflation, oncoming recession, hostile fed, or some kind of significant geopolitical event that you can't foresee forgetting last one because you can't forecast it, the conditions that end bull markets aren't for the moment present. i don't see euphoria i find a lot of stocks that are very attractively priced the market as a whole, because money has been flowing to the index, doesn't seem all that attractive, but i think we're finding a lot of things to do in the market. >> let me ask you this david einhorn had a letter to his investors that cnbc has gotten its hands on, and there's a quote in there that i would love your reaction to it it speaks to the kinds of things that we've talked about on this program in the past and he says, quote, the market remains very challenging for value investing strategies as growth stocks have continued to outperform value stocks the persistence of this dynamic leads to questions regarding when value investing is a viable
12:04 pm
strategy what would your reaction be to what mr. einhorn has to say today? >> well, i think david is a very bright guy you know, look, we've been through styles i remember in 1972 i lived through the nifty 50 when sales people at goldman sachs were telling me you can close down the research department. all you have to do is follow 50 companies, and the philosophy was we don't care what we paid as long as they were a world class growth company that was avon, xerox, i'mm and 3-m and so on and so forth and that proved to be a flawed strategy and then we had portfolio insurance in 1987 which didn't end well. now we have the move towards passive investing. at the end of the day the market reflects economic fundamentals and you have to be patient, but, you know, what's value and what's growth you? know, my large disposition is google you know, google sells at 19 times next year's earnings it's growing at 20% a year it's got a fortress balance
12:05 pm
sheet and the main threat we see is from the government where the government is looking at these companies being quasi-monopolies and maybe they do something stupid, but, you know, i consider google a value stock but a lot of people call it a growth stock, so i think you've got to be careful with the labels, but there's no question it's a challenging environment the money is flowing into the index. you're not in the index you have more trouble performing but you just have to be patient. i'm a lot older than david and david is probably a lot smarter than me, but we just have to be patient. at the end of the day value will win out. sounds trite but that's what's going to happen. >> you think you can still be a value investor, and you made the comment earlier. i'm still finding stocks that look attractive, and you think you can do that in a dow 24,000 environment pause that's what we're living in. >> absolutely. you know value stocks will be -- look, all stocks have been helped by a monetary policy. all assets have been elevated by monetary policy. frankly, a given rise in interest rates in theory is more
12:06 pm
negative for growth companies than it is for low growth companies because of the change in the discount rate i prefer to take the market a name at a time, you know we find a lot of things. i look at my list of things to talk about amc networks, eight times earnings aetna 12.5 times earnings and shia pharmaceutical nine times earnings with a terrific business mix we just find a lot of things that we're interested in doing no question overall the market is reasonably fully valued but not overvalued there's a comment i've used for three or four years which i hear a lot of other people using which is the old line from john templeton which was very insightful bull markets are born in pessimism, growing in skepticism and grow in optimism and die in euphoria clearly we're in optimism. we can debate it, but i do not think we're in euphoria assuming no recession, no hostile fed,
12:07 pm
you know, slow rise in rates i was reading something the other day from jpmorgan where they said they didn't think a ten-year government would get above 3% any time in the next few years, and that's been the view well before them, my partner steve einhorn who does a great job in monitoring the macro scene has been of that view for quite some time. >> let me jump in and interrupt you because we're hearing from the president because we're talking about the stock market that we're hearing about right now. >> nobody even understood it and didn't know what was going on, and those days are over, so we're renegotiating certain trade deals, and we started the process for others it's actually a long process, as you probably know. you have statutory requirements and lots of other things, but the bottom line is step by step and we're getting it done and we're way ahead of schedule, i would say. >> yes, we are, mr. president. >> we started with nafta we'll see how that turns out may not turn out, and if it doesn't turn out, we'll have to do a new nafta or a new deal, but we'll see how it turns out
12:08 pm
thank you. i'm honored and thrilled to be with you this morning at white house and the oval office which is a very special place. i assume every one of you have been in the oval office many times, right >> well, it's an honor to have you now, can i tell you that i want to congratulate every one of the businessmen and women in this room and all that you have achieved, credible stories each of you has just a remarkable past and i think an even more remarkable future. i feel that. does everybody feel, that by the way? i think so. >> yes, especially with trump as your president each of you represent a critical american industry from construction to technology to manufacturing, but you all share in a common will and drive to succeed, and i salute you for that you need that drive to be successful
12:09 pm
mine north-owned businesses employ 8 million people and generate more than $1 trillion in annual economic output. the work you do and the products and services you bring into this world generate new prosperity across america for that we are in your debt you inspire our children to develop their talents and to always chase their dreams. you carry on our nation's proud legacy of innovation, and you breathe new life into the american spirit. a recent department of labor report showed the fewest jobless claims since 1973. think of that. 1973 we just had a report we have the fewest jobless claims i don't think the press -- the only word that i get that out there is if i say it because they will never say it my administration is deeply committed to empowering minority business owners. we're working to lift government barriers so that you can thrive
12:10 pm
prosper and grow and speaking of growing, our stock market just hit another record high. it's the highest it's ever been in history by far. we've created about 5.4 trillion only in stock market value $5.4 trillion, and we're very happy about it and a lot of jobs we have the lowest job number since i believe 16 to 17 years, wilbur, right? lowest unemployment. we're doing really well. we're doing well which makes it better for you as a candidate for president, i pledged to fight to deliver opportunity for every community in america all american children from the rustbelt to our inner cities deserve great schools, safe neighborhoods and access to hoy-paying jobs. i talked a lot about the inner cities on the campaign, and there's tremendous potential in the inner city and we're working on that very, very hard. critical to creating this future
12:11 pm
is reforming our tax code to produce now investment and development in our country we must bring back our jobs and rebuild america's cities and towns. this is what we're doing it's time to take care of our country and fight for our families at the center of our america first agenda is our commitment to ensure every child in america has a future of security and a future of hope we're one of the highest taxed nations in the world, anywhere in the world highest taxed costing us millions of jobs and drill yongs and trillions of dollars. our tax cuts will restore america's competitive edge and lower the crushing tax burden on the american people. it's also going to bring back, when we get this passed which i really believe we will i think we have to as a country. it's going to bring back, i would say, $4 trillion back into this country which right now cannot come back it's being spent in other
12:12 pm
countries. money that wants to come back into the united states cannot come back, but under our plan that money will flow back in it will be very quick, and it will be very easy, and it's a lot of money nobody even knows the amount it was $2.5 trillion a few years ago, so i would say now it's got to be close to 4 trillion or maybe above that number. we'll find out soon because it's going to come back very, very rapidly. under our plan more than 30 million americans who own small businesses will get a 40% cut to their top marginal tax rate. this will be the lowest rate in more than 80 years so this will be the lowest rate you have in more than 80 years that's 1931 is the last time there was a rate this low. we're going to massively reduce the corporate tax so that companies stay in america, move to america and hire right here in america in other words, they stay in
12:13 pm
america and don't fire their workers. that's what we're about. our plan can be summarized in three simple words jocks, jobs, jobs. the award-winning business leaders here today represent the best of america and our determination to succeed and to grow together we'll ensure that more american citizens can unlock potential of which they have tremendous potential, provide for their family and live out the american dream again, congratulations to all of the awardees it's a tremendous achievement, a tremendous achievement i have great respect thank you, god bless you and god bless america. thank you very much. thank you very much, everybody. >> thanks, everyone. >> all right president trump at the white house commenting on trade. his tax plan, stock market hitting another record high. you're looking at the dow jones industrial average as he is today, up nearly 200 points. our eamon javers at the white
12:14 pm
house watching these events. bugsy day for the president. he likes talking about the stock market as we know. eamon, and he does indeed like to spar with senator corker which he's been busy doing all morning long. >> reporter: it's really dominated the morning in terms of the news coverage and also in terms of the president's time over the space of about three hours occupied with this feud with senator coaching and it's not going to stop now because the president is on his way to capitol hill in the next hour. he's going to the republican senate policy lunch, a traditional lunch that they have every week up there. the president will be there and bob corker will be there at that lunch, so it will be interesting to see what the reports are out of that about the body language between the two men. but bob corker has been going on twitter and on television today making some extraordinary comments considering that he is the chairman of the foreign relations committee in the united states senate, talking about a sitting president of the united states of his own party, including a commentabout the president debasing the nation. here's what he said earlier
12:15 pm
today. >> the sad part from my perspective firmly, and i think that the worst of it is going to be just the -- a contribution that hurts our nation the most. >> you think the president is debasing our nation. >> i don't think that that's there ines way that that's the case just the way he conducts himself and goes to such a low level. just i do. >> corker also described his own interactions with the president talking about personal dealings he's had with the president and the staff here at the white house which gives some explanation for his thinking here about the way the president has been managing presidency here's what he said. >> i've had private meetings with him, dinners with him i played golf with him i've, you know, multiple occasions where the staff has asked me to please intervene he was getting ready to do something that was really off the tracks, and, look, i've seen
12:16 pm
no evolution in an upward way. would i say it appears to me that it's almost devolving >> reporter: corker there saying the president's behavior has been devolving, not improving during the course of his presidency for his part president trump blasting corker five separate times in tweets over the course of about three hours let's show you some of these tweets from the president of the united states. very personal stuff saying that corker helped president obama give us the bad iran deal. he said he couldn't get elected dog catcher in ten see he also said that he refused to endorse corker and now he's negative on anything related to trump. he's calling him -- corker a lightweight who couldn't get re-elected in the great state of tennessee saying he's going to fight tax cuts and he called him incompetent head of the foreign relations committee and said the entire world was laughing and taking advantage of the united states, calling him little bob
12:17 pm
coaching, so personal insults being hurled back and forth between the president of the united states and the chairman of the foreign relations committee in the republican party in the senate today. we'll see how this plays in the next hour in that lunch, burks boy, to be a fly on the wall in there, and one interesting observation from here on the north lawn, scott. i just saw ari fleisher who was george w. bush's press secretary in the early 2000s, he went in to have a meeting with sarah sanders, the press secretary, saying it was the first meeting with sarah sanders, never met her before and hadn't been back to the white house in quite some time so perhaps the establishment of the republican party sort of connecting with the trump wing of the republican party which occupies the white house right now. >> very busy keep us up to date eamon javers on the north lawn of the white house once again for us mr. cooperman, let me just come back to you. >> call me lee. >> call me lee, thank you. >> there's a lot to get to obviously on this. i'm just wondering what -- look,
12:18 pm
you've been in the white house, you've been in the oval. you've dined with the president. >> twice, twice, twice i've been in the oval office with president obama and president trump. >> i'm wondering what you make of what we just heard and the back and forth between senator, core and the president let me ask you that first and then i'll follow it with something else. >> just a common sense observation. basically president trump advantage kwished 16 opponents in the primary he won the election. who am i, a mere mortal, to tell him how to deport himself, okay? he's more confident in his view given his success in the election as a business person i would say that his behavior ought to be somewhat different and we're going to pay a price if it didn't different in the mid-term elections because the republicans cannot go into the mid-term elections 0 for 2, you
12:19 pm
know they didn't get anything done so far on health care, and if there's this great degradation on the debate on taxes and nothing gets done this country is going to move to the left the republicans have to unify and get something done and i don't think you unify by criticizing important leaders in your own party, but, again, i'm not here how to tell president trump how to deport himself. i listen to what he says and he's obviously appealing to his base, you know it's all jocks, jocks, jobs and his base wants to see it i don't think it's healthy i would rather him tweet less and try to unify we need a president that tries to unify there was a comment made the other day by carl bernstein which i thought was quite insightful what he said is president trump is the president of his base but he's not acting as the president of the country and we need somebody to be president of the
12:20 pm
country. we don't need a president that told the 99% they were being screwed by the 1%. we don't need a president that's appealing to 35% of the country. we need a president that's appealing to the entire country. again, i'm not in a position to advise him and, again, he won and won his way so we'll have to wait and see how things play out. when i listen to him -- >> no, i'm sorry finish your thought. >> when i listen to him talk, very different deportment, but little bit like, you know, ronald reagan in one sense ronald reagan ran on a platform, he said i'm going to restore the lost prestige of the united states of america and i'm going to do that through through rebuilding defense i'll get the government off the backs of the people by reducing regulation and reducing taxes. and i'm going to balance the budget, and the president reagan found out you could not do the first two without the third, and accomplish the third and he said the hell with the budget and busted the budget. nobody is talking about the budget, you know, so we have to wait and see how things play out. right now the market likes
12:21 pm
synchronized global growth it likes restrained inflation. it likes a cooperative fed, but things will evolve, and i think that one of the risks that we face is if we don't get legislation through, that the market is expecting, that will be a negative. whether it's a negative as steve mnuchin makes that out to be, it depends. i don't know. >> that's exactly where i was going to follow. let's just say as a result of any of this, if they can't get tax reform done anywhere close to close to the time frame that they would like, to what would the market reaction be the treasury secretary alluded to fact or seemed to suggest that the market would tank, my word, not his, if we didn't do that >> i don't think it would tank unless the economy got derailed, you know, so i would say that it's not a positive, but i don't think that market would get tanked over many, many years of doing
12:22 pm
this, over 50 years toe precise. i found the significance of an event is very much a function of what the market was discounting before the event occurred. if the market keeps going here, then i would say it's discounting some part of a tax package. if we don't get it, that would be negative, okay. on the other hand, if the economy remains strong and the feds fund rate remains below it% and the profits are rising, i don't think the market would mind that very much, so we have to wait and see how things unfold i don't want to make any blanket comment. right now i say the conditions for a big decline are not pent at this moment in time and if i had to look at 2018 a year in advance, i would say up 10 to down 15 would be a trading range that i could live with, meaning that i think that would be reason i wouldn't be shockedful market was down next year and i wouldn't be surprise federal it was up in line with earnings and dividends and plus
12:23 pm
7%, 8%. >> this is probably as good as any place to bring in the gang with the desk on me. joe, steph, josh and jon with russ what do you think on this very question >> first of all, good to see you lee and hear your comments. >> thank you >> but you talk about, okay, well the market is going to fall if tax cuts don't occur. you then have to believe that the market is rising because well expect tax cuts will actually half. let's think for a second just about earnings let's think about the facts that two-thirds of 3-m's revenue is outside the u.s. think about the bosstism pact of the u.s. dollar and think about caterpillar and the chinese construction, the positive growth we're seeing there, so, again, lehigh lights the synchronized global growth and that i think is most important the ten-year is the 2.40, the highest level since it was 2 hadn't 42. why, because it's about global growth and that's why the market is going up. tax cuts, forget it. >> and i would just add in
12:24 pm
addition to global growth, especially in the central industry, they have restructured for the last six to seven years. they have streamlined their businesses so when you get that revenue margins are staying firm and that's why caterpillar is able to raise numbers by the amount that they did and why stanley black and decker did and you are ri, united rentals did last week i think the industrial sector is actually really a strong one, and i think it's going to continue because of all of these things, and it showcased and highlightsed today. >> the thing that i will highlight with you, steph, is, of course, cat numbers spectacular. asia-pacific in particular, whether it was construction or resourced, i mean, it was a blowout number for caterpillar obviously the weak dollar helps to a certain extent but a good sign about the recovery we were talking about. the part that's worrisome is the numbers is the numbers in the whirlpool because whirlpool
12:25 pm
numbers, profits are decelerating because of material costs accelerating. >> and that's also execution. >> i don't know how many people still shop at sears, but i would say it's a significant number because it shows the inflation for whirlpool. >> they also can have pricing power. you saw cat get pricing power and united rentals gets pricing power. those companies get stronger if you do have pricing power. >> the world, if i can throw in, the world is cyclical, and there's no stock up without a reason there's no stock down without a reason and if you're you're an experienced investor it's your job to figure out if the numbers are rational or irrational. >> one of my positions that got killed the last ten days is united airlines. united airlines sincep 2014 i
12:26 pm
think, third quarter, they have bought back 93.6 million shares or 32% of their outstanding shares in the quarter that just ended they bought back 2.7% of the company at 67. the stock is now trading at 58. >> 59 as we speak. >> okay. 59 they have another 2.5% of the company they can buy back in the fourth quarter we think they will authorize a couple billion buyback next year which is 10% of the company. this company could earn ten bucks a share and thought it was chief at 67 and warren buffett owns so% of the company and this stock is trading less than six times that we think they will earn next year so everything has a season, you know, in favor, out of favor and our job is to figure out what makes sense and doesn't make sense and what the market has been telling you by its persistent rise is as quoted and said before the synchronized global growth. the non-competitive nature of
12:27 pm
fixed income you sit here and say to yourself, do you want to buy a 30-year bond or a ten-year bond yielding 2.4% where the average buyer of the bond may be paying away in taxes 40% of the coupon just after inflation and getting negative return? >> right. >> i'm holding >> we're going to put you in a holding pattern just for a minute we'll take a quick break, lee. we'll have much more with lee cooperman on the other side. more stocks he's watching and next he'll wade back into the battle over adp between that company and mr. ackman mr. cooperman has been very outspoken and on this program. we'll talk to him next on halftime his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it
12:28 pm
is really the value of a financial advisor. you myour joints...thing for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember.
12:29 pm
12:30 pm
welcome back to "halftime. the battle over adp. two proxy advisory firms siding with bail ackman's slate of nominees leslie picker has been following that story and joins us more with the latest as we also have lee cooperman with us. >> bill ackman, of course, getting a vote of confidence from two of the three major proxy advisory firms yesterday adp's lacks the urgency required to achieve the best potential outcome for adp and its shareholders egan-jones echoed that saying adp's complacency resulted to the board and management's failure to acknowledge the company's underperformance in recent years now, one major proxy advisory
12:31 pm
firm has yet to publish its recommendation but is expected to do so sometime this week. historically though, according to proxy insight, the firm recommends all dissident candidates 29% of the time while it sides with management about 44% of the time. even if ackman wins it's an uphill climb to november 7th at the company's annual meeting he's pushing for operational overhaul here with a focus on improving adp's efficiency and technology and thinks by putting himself on the board to execute the plan the stock price could double in four years adp, however, has been pushing back arguing that the current management team has produced superior returns and ackman's target mar gyp could be harmful for the business the company says ackman's free structure incentivizes a quote swing for the fences approach that may damage adp in the long run. scott. >> lee, glass lewis which i'm
12:32 pm
looking at their pretty hefty note saying, believe, we believe pershing square has argued the more convincing case why are they wrong >> i don't think they know jack about the company. let me just do this in a succinct tight fashion on friday night i got an e-mail from a mutual friend of bill and myself pointing out a presentation that a smart fellow made at the robinhood investment conference recommending adp and i sent our friend who will remain nameless with our e-mail with your permission i would like to take 25 second to read it says i think our friend, and i want to -- i'm friendly with bill ackman. i respect bill ackman but he's dead wrong here and let me just explain why. i think our friend bill's behavior is nothing short of disgraceful in this instance i'm not referring to the merits of his ideas or analysis but
12:33 pm
rather his conduct adp has been one of the great success stories of american business could they or any management do a better job quite possibly but with their track record you don't force them into a costly and time-consuming proxy fight this. company went public in 1961 with a market cap of about 15 million, if him reserves me right. today properly calculated adp blues broad ridge and cdq is near 60 billion in the value of the equity, a compound return over 56 years of 17% per annum there are very few companies in the public arena with that kind of record. they hearn 40% on shareholder equity versus 16% for the s&p and do it with no net debt versus 40% debt-to-capital for the s&p. the stock heelds a 60% payout ratio and the company has repurchased billions of dollars of shares at attractive prices i sat on the board for nearly 20 years and i can tell you
12:34 pm
management is shareholder oriented f.bill approached them price. ly with his analysis he would have gotten a fair hearing instead he asked initially for ceo replacement and goes public in his criticism why? frankly, because he's a hot dog, okay as you know, i've always liked and respected bill but his behavior here is terrible. i'd be very disappointed in our profession if he won the proxy fight. he told me he spoke to 80 plus former executives of the company who concurred with his views i know for a fact that he did not speak with the three prior ceos and the current ceo in advance of the proxy fight, and they all thinking he has no idea what he's talking about. it's also a fact in a adp has outperformed its peer group in the s&p the last decade. i could cite a bunch other statistics annual dividend increases for 42 consecutive years. they processed one of every six governmental payroll checks in the country, okay.
12:35 pm
personally if the company is as screwed up and as vulnerable as it zukts suggests it would be a short and not a long. >> let me ask you this. >> yes. >> i'm not here lee to argue bill ackman's case for hi. i would simply suggest at looking at the -- when i look at the glass lewis summation of where they end up, they raise points that say -- what you say may be 100% correct. >> how do you grow as rapidly as adp has grown and how do you earn 40% owningity if you're not running a good business, how do you achieve those results? think about it two and a half times more profitable than the average corporation in america bill says pay czechs profit margins are here and adp's here and therefore they are not optimally managed. >> pay czechs and adp are in somewhat different businesses. the analogy would i would use if goldman sachs said to me any
12:36 pm
time you aipac the ten cents a business and want to transact a penny a share give it to somebody else. adp has world class companies. they are providing a broad away of services and some have higher margins and others with lower margins but the overall mix, when the company achieves the record results that they have achieved they don't need somebody like bill ackman telling them how to do their bills. all of us could benefit from a set of eyes looking to business. there's a way of doing it. a public proxy fight criticizing a company with this track record is just counterproductive, and i'm arguing over process, not supposition of his recommendations. i know adp would have received bill with open arms, listened to what he had to say and if what he had to say makes sense he would have done it we looked at acquiring over a decade ago this company is not asleep they didn't get to where they got by being asleep. they are not complacent. they are always looking over their shoulder, and i'm just arguing about process. i'm not prepared to argue the
12:37 pm
merits of his recommendation because basically i retired from the board five years ago and made the mistake of giving all my stock away to charity should have taken cash i wouldn't be surprised if the stock quadrupled the next three years. i'm arguing about the prose process. it's wrong and all the proxy services are doing is saying, well, get another outside voice in there and see if you can mix it up a little bit what have you got to lose? >> they do -- the proxy service says the company is not keeping pace with smaller competitors, that it has an inefficient corporate structure and an insular culture and it performance can be significantly improved and -- >> and i say -- well, guess what they earn 40% in equity. why don't you give me a list of major corporations that earn 40% over equity. the answer is you're not going to find any, okay? i know financial analysis.
12:38 pm
very few companies with their record again, there's no company in america that can't do a better job than they are doing. is there a possibility for them to do things in an improved fashion, yes, my questions is the company it s ahead of bill ackman carlos rodriguez is a very good ceo. the management team there is very committed again, how do you go about doing and affecting change do you do it the way he's doing it he has no -- the three candidates, i don't know them individually, interestingly they have been totally silent in this whole process and don't have any particular credentials one gentleman, not to say anything negative, i'm 74, he's approaching 72 i believe there's a mandatory retirement age of the adp board. so if he won the proxy fight he couldn't serve unless they change the the bilaumpts i don't want to debate the merits of it. i just ask you, do you grow like this company has grown and generate the returns like this company has generate and have
12:39 pm
the client base they by doing -- by falling asleep and falling behind and i think the answer is clearly not and then you ask yourself how do you achieve change do you do it bush say this publicly i'm not attacking bill and i happen to like bill and respect bill f.bill called me up with an idea i would investigate the idea because he's respectful in that by tradition columbia sponsored a dinner the night before buffet's annual dinner in part because buff felt is a graduate of school and agave a speech and it was three or four years ago, 200 people in the audience bill ackman being one of them and basically i was -- after i made my speech, someone asked me if i was involved in herbalife and did i have an opinion and i knew bill was in the audience. i'm not involved but i do have an opinion number one, i want to make it
12:40 pm
very clear that bill is bright and capable and generous and a good human being but anyone who gets up in front of 500 people to tell him he's short 20% of the market cap of a company is allowing his arrogance to get in front of his intellect and that's what i said four or five years ago and icahn and george soros went after him and he was very wrong bob wilson, a famous short seller, deceased now, said no one ever got rich publicizing their shorts, and similarly he could have approached the company in a quiet manner, the company would have listened fanned there was merit to his suggestions believe me of they would implement it the. >> maybe there's an opportunity for the three of us to set down and have this conversation on television and figure out what happened from here. >> i know what happened. bill called me before all this was public i'm not involved and i'm not
12:41 pm
restrict and don't own a share of adp and called me up and said i spent six months studying the company and think they have serious issues i want to make my presentation to the board, but i don't have enough time and i'm not prepared to make the presentation now i want them to keep a nominating -- nominating window open for another 30 days, and i said i'm not calling the company to make that recommendation because there's no way that the company is going agreeley nor should they agree. if you studied this thing for six months you should have gotten yourself in a position to make the presentation before the window closed. given the company performance, why don't you meet with them over the next 12 months, make your presentation and if they ignore you and they don't adopt what you think you should adopt, launch a proxy fight and he didn't want to wait. i said i'd be more patient and i'm a lot older than bill and have less years and i believe in
12:42 pm
olesse oblige. we can have a get-together and nobody is going to convince me what i'm saying is wrong his deportment is all wrong. >> leslie picker here, if you were a share holder in adp and you are submitting your vote for the shareholder meeting on november 7th, are you looking at the conduct, or are you looking at merits of the sghas what should you be looking at for the future of the company? >> i'm looking at a 42-year record of dividend increases i'm looking at a 40% return on equity unparalleled in american industry done on a debt-free balance sheet. i'm looking at a record of outperformance, not only for 60 odd years but for the last ten year, okay i'm looking at a company that processes one out of every six non-governmental payroll checks in the country and looking at a company that bought back stock without anybody pressuring them at extraordinarily attractive prices over a number of years and a company that pays 60% of its earnings out to shareholders
12:43 pm
in the norm of dividends and if we cannot back this management and shareholder group there's no company in america that's protected. i'm not waving a flag here i'm just calling it way i see it there's a way of conducting himself. this is not an underachieving company. this is an outachieving company that does not deserve to be treated this way what the hell. this is my view, that's all, you know if the company can't get shareholders approving them, if i was the ceo of any company, i'd be very fearful about the future. >> can i just ask you, i'll change the subject for a moment but stay on the activist conversation as an observer of p & g versus peltz, what do you think of the way that that all ended up >> activism is a one-by one analysis as a generalization, hedge funds are having difficulty generating returns, so a lot of them are trying to generate the returns
12:44 pm
by becoming activists, okay, trying to force things to happen, and i've seen terrifically intelligent activism and i've seen dumb activism, okay, i'm not familiar and do not own p & g and don't have an opinion on that one. if i go through the intelligent activism and negative activism, i'm going -- to tee off a lot of my friends in the business, but activism must be looked at one at a time. all i'm saying here is we do not need a public activist at adp. again, i'm not adp i don't own a share of adp i'm talking as a private money manager who is willing to speak out on a subject where i think somebody is doing something wrong and i'm not saying bill has all poor recommendations but think adp achieved this record by being complacent and asleep they are in a very competitive business and very aware of desk top computing and how people can do a lot of what they do downmarket and replace them and
12:45 pm
they have been very active developing human resources capability and to think that they are asleep at the stick is ridiculous it it's ridiculous. we'll take a quick break we'll come back and guest more on the markets and lee's perspective there and we'll go to the future's pit to find out what's happening with oil today. we're back after this. "volatile markets." something we all think about as we head into retirement. it's why brighthouse financial is committed to help protect what you've earned and ensure it lasts. introducing shield annuities, a line of products that allow you to take advantage of growth opportunities. while maintaining a level of protection in down markets. so you can head into retirement with confidence.
12:46 pm
talk with your advisor about shield annuities from brighthouse financial established by metlife.
12:47 pm
12:48 pm
welcome back to "the halftime report. i'm seema moldy. watching oil rally for the third straight session what's the drive behind the move that we're seeing today? >> seema, a nice pop, about a 50-cent and he borrowed mario draghi's whatever it takes pledge they are getting back to the five-year averages they are talking about additional production cuts and will reduce spry couple that with geopolitical resertcation of iran. >> crude has been trading in air in ao range for much of this year do you see a breakout coming up? >> i do. we've seen a narrow channel upwards since the low in april, and we're going to continue that until we get some more news. news today, the fact that they actually have a plan or they are going to form lays a plan of
12:49 pm
tightening and quantitative easing >> on the live show we're joined by rebecca patterson who will reveal the single biggest risk to the market rally right now, plus, we'll bring you trade ideas for crude oil and the u.s. dollar that's all at top of the hour. scott, back to you. >> up next, we'll do final n ades with lee coopermaand talk to the folks at the desk as well about their picks we're back after this. this is where i trade andrs. manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.
12:50 pm
of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential. ♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to?
12:51 pm
today, the new new york is ready for take-off. we're invested in creating the world's first state-of-the-art drone testing facility in central new york and the mohawk valley, which marks the start of our nation's first 50-mile unmanned flight corridor. and allows us to attract the world's top drone talent. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov. to grow your business with us in new york state, ♪ it's not just a car, it's your daily treat. ♪ go ahead, spoil yourself. the es and es hybrid. experience amazing.
12:52 pm
buying right there also, they were buying here at the 13450 straight next week, with the stock just below 12. it's a name we don't talk about a lot. it was active. >> lee, you have the dow plus 201 opinion banks are having a pretty good day. the 10 year, do rates continue to incrementally rise? i know you're invested in some of these names >> we own some wells fargo,
12:53 pm
citibank look, i've been of the view that interest rates are below where they want to be. interest rates will rise i think the only bubble is fixed income i don't think equities are in a bubble i think that the market valuation as long as we remain in a recession, allows for higher rates the issue will be how high and what the sleep of the rise is, a year from today, we were a 3% 10-year government we had a pro business environment i would say the stock market would be higher i don't think on the set any more what should we tell the shareholder when they vote thank management for the fabulous job they've done historically we hope you listen to mr.
12:54 pm
ackerman's recommendations, and if they make sense you adopt them when i retired from goldman sachs in 1991, i got invited by adp to join the board. when i callinged john weinberg for some fatherly advice his dad, who was a wall street legend, sydney weinberg senior i asked him what he thought. his comment was, go on the board if you need something to dress up your obituary i went on to gain experience and see the other side of the fence. you go on the board, you become re12rik9ed you go on the board, you become restricted i don't think adp needs any direction. i don't think going on board is a wonderful panacea today,
12:55 pm
you're better off letting management do the heavy lifting. >> josh brown was attempting to ask you a question earlier, we do have some time. so go ahead. >> i forgot, let's -- i want to make a statement, and let you respond to, i know you've seen multiple errors of market history, if you had done nothing this year, and frankly, most of last year but follow trend, and not focused on overall market valuation, you had not been given a reason to sell since last june when we concluded the brexit moras that seems to be something that continues to work. we look at billable market and there's not a lot of signal there. crash of '87 happened, we were 25 times adjusted cyclical
12:56 pm
earnings why do we look at that, why don't we focus on investor behavior and try to pick up on a trend change instead >> we have to have information to appear on shes like mr. wapner's show. >> look, look, the reality is. the conditions for big decline are not present. i was on the program in january, february of '15 or '16 i forget the year, where the market had a big sell off in january or february, i didn't see the basis for it, i thought the market would sell at least 15 times earnings what you're saying is a trend is your friend, and the two day moving around is rising, stay engaged. some people invest that way, i invest on the fundamentals, i think they're reasonably favor bible. if i could buy united airlines at six times what i think they earn next year, or shy at nine
12:57 pm
times what i think they can earn next year, these are substantive growing corporations with good balance sheets i'd rather earn that over cash any day of the week. >> i know you are positioned for the move you have oil at 52 now. sfl sustainability >> absolutely, we own hess, wpx energy you know, the world economy is not going to grow 3, 3 1/2%. and i think the demand growth will outstrip supply growth, i think the prices will rise, i don't think it will rise dramatically, it will rise. >> you said there were stocks out there that still looked atractive, i'm wondering what you see when you look at a stock like ge? >> well, they have issues.
12:58 pm
again, i know a lot about what i earn >> have you been tempted to get into ge given the selloff and the shares >> i haven't looked into it. we have enough things that are working well when i dame to the program today, i wrote down facebook 20 times earnings we like amc networks, eight times earnings buying back a lot of stock. a new name for us dinone very interesting company, potential takeover candidate in a group where valuations are much richer. >> keith meister is involved in that, am i right >> i believe so. >> keith is a bright fellow. i mention the oil, hess is 7 times earnings, parsley is 8 times earnings i'm using 28 estimates
12:59 pm
there are a lot of things to be done every stock i own is a new high list if it's at a new low list, i'm out of business. i have a combination of both i'm most comfortable with value, so i'm 5% google 1 1/2% facebook, 50 basis points amazon i'm with the more value oriented names. google and facebook will grow less rapidly than amazon and netflix, their valuation is different. netflix is up ending the entertainment industry >> unfortunately, we're out of time i'm going to call this lee cooperman unplugged today.
1:00 pm
>> maybe we'll reconvene and have a conversation about what's happening with adp lee cooperman, with us give me a quick name in. >> chubb >> emerson >> power starts now. >> dow 24,000, here we come, and earning s palooza. the feud between trump and corker taking another nasty turn today. the president calling corker incompetent, koocorker calling trump completely untruthful. and a muddy offroad sign the consumer is feeling pretty good about life right now the ceo of this mystery high

35 Views

info Stream Only

Uploaded by TV Archive on