tv Fast Money CNBC October 24, 2017 5:00pm-6:00pm EDT
and both are sort of in a transition we'll see what the companies say about it >> meantime, all the companies report earnings tonight, regal cinemas is the only one that's positive >> regal is a good test of low expectations they maintain 5% dividend yield. >> good point. hey, that's it for "closing bell." the three of us are back tomorrow hope you are as well >> "fast money" begins right now. and "fast money" starts right now on a day where dow has gone wild, soaring 200 points. some of the heavyweights absolutely crush earnings expectations 3m having its best day in a year, 3%, caterpillar up 8%, at a high what can you buy at these record highs? guy adami. >> caterpillar, there has to be a cat tracker in front of every hole to be dug next year
those earnings were outrageously good, good for them, they've raised guidances for the third time this year clearly i missed that one for at least six months, probably longer but now you have to ask yourself, is valuation getting in the way so i would submit that cat maybe is ahead of its skis despite the ridiculous quarter triple m another one big valuation, great quarter what are you paying for these companies now at the end -- maybe at the beginning with cycle, but trading mid-20s in terms of price to earnings >> speaking of redic, how about that opener, tag team, whoop, there it is. how many shows on financial shows are doing that >> one, for good reason. >> i thought half of today's performance was really related to an inventory build. when i look at the reports that were out today and the places i think you can still buy, a name like gm, which is trading cheap, not only do its peer group but to its precrisis levels when it was a much less efficient, much
less cash flow generative company. things that should scare you, companies are earnings their way into this. what's happening with these numbers, unlike a multiple expansion, if anything, this should be bringing down the multiple >> shouldn't we be bringing down the multiple we have these companies that seem to be delivering on both top and bottom lines they're delivering time and time again. if one is to believe we're seeing coordinated growth around the world, blah blah blah, why not caterpillar? >> one would think that, right i guess the count argument would be twofold as you get a stronger dollar and higher interest rates, you'll pay less for these companies number two, caterpillar opened up, closed down near low of the days
caterpillar trades with eem, the emerging markets, like a proxy for that etf closed on the dead lows. you saw the stronger dollar, you saw some other emerging market currencies, not doing as well as you might think. >> and i get that. traders look for signs that say you get an outside reversal. caterpillar's performance going into this number was nothing short of spectacular people bought the numbers, you saw some people faded. a couple of analysts we will through and said we're going neutral on the stock i hear what you're saying. i think the em correlation is important. but everything caterpillar told you tells you why you want to go -- >> my concern, and one day does not make a trend, is this as good as it gets. we've been waiting all year for this massive, you know, global growth, and is that it are we done? >> why would you -- i don't know why you would think we were done i feel like we're just getting
started. >> the market is saying something different, right >> i don't agree i think the market is saying, wow, we're just getting started. >> they're on their lows today >> think about how far the market has gone up expectations were high going in. expectations for caterpillar were high going in gm, same thing, expectations were high and they came in way above that >> massive runs. >> on the back of huge runs, exactly, and high expectations going in so what does it say, that they're able to deliver and then some, crush expectations even more, rally even more, and now we've got these industrial stocks trading like growth stocks, effectively. >> go ahead. >> please. i would rather listen to you >> the industrial stocks were impressive i think that uris, a small position that i bought post-harvey, that's going to continue the growth. they had good numbers last week. they had not a great day two weeks ago. but i think for them, there's
only u.s something like a manitowoc is all over the world they're very levered outside the u.s. that could be hyperturbo charged to growth around the world on the em front, we're early, early stages >> we are when you look at, again, em relative to the s&p over the last five or six. this is what i always fall back on, em got destroyed against the s&p in developed markets for almost six years until it started to make that turn. brian is right, emerging markets peaked against the s&p in early august and they've been fighting to take a new level higher look at stanley works, look gm gm was profitable in latin america for the first time in three years. rates are breaking out around the world. we learned from the eu pmis that input and output prices, they're passing on prices to customers and getting away with it this is reflation. this is good >> you know what was interesting yesterday, and we talked about it, what's interesting today, one would have thought, if i had said, tim, yes, the dow is going
to up 160 points today, what's going to happen to the vix, i would have said it will close somewhere below ten or so. vix closed up on the day, second day in a row of what's been a couple of decent market days i don't want to make too much of it yet, but what did we say yesterday, that e-mail thing, every once in a while you can put the flag, day two, you flag it again, because now you have the vix two days in a row closing on the highs very interesting >> this could be the start of rotation in the markets. i know we talk rotation all the time, but we're basically at the tail end of f.a.n.g. having a difficult five-day streak. >> alphabet was worse today, i felt like, then yesterday. yesterday was down, everything was down today there was such an anemic rally. i think the only thing, they're going to report thursday, this is better, i think, to have lower stock price going in
hopefully they'll put up som good numbers and they'll be back on track but yeah, i think industrials, old kind of commodity-related, i do think we'll see the start of reflation, copper going up, oil also, but the rest going up as well >> what can we buy at this point? >> so we talked about, you know, i think you can still buy emerging markets, still buy gm gm's valuation, seven times yield. you've got everything you need to buy that stock. the banks, eu financials so ecb is going to meet on thursday eu financials have youth performed u.s. financials by about 12% since march. it tells you what's going on there. the european banks have been totally -- i'll save my profanity, but the ecb has not been nice to european banks. >> here's a would you rather i don't think i've ever uttered this pairing in my life.
alphabet or caterpillar. >> google. >> look what you're doing, mel >> there's a very good chance, very good chance we may have put in a double top in alphabet. i think caterpillar, given the amount of stock it traded today, given its valuation, you're asking me today. >> today >> yes, she did. >> alphabet. >> good question to you. alphabet >> i thought all of that was leading towards caterpillar. >> this is basically the question of, industrials right now as growth stocks >> right i think you sell caterpillar if you buy alphabet that's the rotation you have here the market is telling you something that we've ran up into this and it's as good as it gets >> i'll let you choose your own growth stock versus your own industrial basically it's a secular play here what do you choose >> xlk against xli
i'm sorry, technology against industrials. i would buy industrials. i think industrials are trading cheap relative to their history. look at the pmis we got out of the u.s., out of europe. they're telling you they're near multiyear highs, input and output i do think google gets the benefit over cater pailar. cater pill aare's numbers were great, as these guys set i think their margins are as high as they get in the third quarter. >> what's your leaning sector-wise? >> let's talk about alphabet there is more upside maybe in the industrials, right because they could really be breaking out but when you put it together with what's the downside risk, when i look at a business like alphabet versus caterpillar, it's not even close. >> or facebook versus caterpillar. >> it's not even close i think that is far more valuable, the risk/reward is more compelling, much bigger position >> if you missed the rally on
some of these names, don't worry. let's go off the charts with chris verrone. hi, chris. >> how are you doing exactly, it's a sleeper. it hasn't worked yet before we tell you the name, let's go back to the 15-year chart. trying to get through $35 for most of this decade on the bottom side, 15 has been support. that's a $20 range we break this thing above 35 we're looking at 55. so let's get a hint here what could this be it's in the tech sector. let's zoom in. shorter term going back the last two years. start at the bottom in late '15, early '16. we've spent most of 2017 sideways between 35 and 35 that 35 level, we start to break above 35, short term we target 40 another hit. what could it be the big reveal, what are we talking about? it's cisco it's been a market performer
this year, up 14%. short term target is 40. longer term coming out of this really big break, we're looking at a few dollars stock >> chris comes over, right >> 100%. >> arielle will bring the chair in, thank you, arielle so i'll play would you rather with you now, chris. >> yes >> cisco, that one hot chart, or caterpillar? do you want to go with what is working or what is going to work in your view >> i think cisco gives us a good opportunity for a long term chart here but we can't deny the strength the industrials continue to exhibit here the broader industrial sector, even with ge, new relative price hikes today. i have to respect tim and his view about caterpillar and what it says about em, probably what it says about rates too. it's not just u.s. rates, look german yields, uk yields, japanese yields. a global move in rates is
playing out. the global sector reflects that. if we're talking long term, the point of that 15-year cisco chart i think probably more upside in a name like cisco that lagged its sector. >> i look at this and say, we're up from 30 to 35 in the last six weeks or so, looks like it might be a little bit overdone in the short term what is your short/medium term >> i think through year end we're looking at a $40 stock, $35 today. looking over the longer term, several years where we would expect this to be a 50 or $55 stock. remember when microsoft finally broke out in 2012, that's a move five years later that is still going, the stock has doubled jpmorgan 18 months ago that stock broke out, still going today. that's the context with which we're viewing cisco here >> how much depends on the group itself cisco's mega cap, probably the cheapest one in the space. it's not doing what the others have done. why? >> it's suggestive that people are starting to look down the valuation scale a little bit
it's been one of the cheapest. intel also acting a lot better the last several weeks i don't think it's an accident that both cisco and intel, as perhaps some of the more expensive ones are rotated from those two stocks, stand. >> chris, thank you. chris verrone. guy adami, could you guess what that one hot chart was >> no idea >> one down stock and a 30, technology, smallest wait on the dow. >> of course i knew what it was. valuation 13 1/2 times forward earnings, it's cheap relative to where it should be they reported november 15th and recently said they're now going to report in five different categories why do i think that's important? maybe they're killing it now on five different categories. >> so they can break it out. interesting. what did you do today, karen >> i bought some tbt, actually >> high rates. >> yes, higher rates so i'm long banks. they should be a beneficiary of higher rates
two quickly moving higher rates could be a problem for the market that was a built of a hedge. >> i like that trailed you look at what happened with rates today, they broke with 240 on the ten-year. probably next stop, we're looking at 260 at those levels it gets dicey for stocks as a hedge, that's a great way to play it here. >> coming up, check out shares of at&t sinking. the conference call is under way. what the c suite is saying about cord cutting plus jpmorgan hitting an all-time high. we'll explain why it could be a good sign for the markets. with stocks at record highs, it's hard out there for short sellers. just ask david einhorn we'll tell you the stocks that tripped him up with "fast money" returns. who knew that phones would start doing everything?
entertaining us, getting us back on track, and finding us dates. phones really have changed. so why hasn't the way we pay for them? introducing xfinity mobile. you only pay for data and can easily switch between pay per gig and unlimited. no one else lets you do that. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit or go to xfinitymobile.com. welcome back to "fast money. an earnings alert on at&t. julia boorstin is at headquarters for the details >> reporter: hey, melissa. that's right, with at&t shares moving lower on the top and bottom line earnings miss, cfo
john stephens focused on regulator and tax reform, saying he's optimistic they will happen, which would be a great win for the company as well as the country. and while at&t's digital videogames failed to make up for its traditional video declines, stephens talked about the opportunity to shift their business further towards digital. take a listen. >> we continue to work to improve our linear video we are very encouraged by the rapid deployment of our dtv now offering we added nearly 300,000 directv now customers in the third quarter and have nearly 800,000 subscribers in total that's incredible scale in less than a year of operation >> reporter: as for the pending time warner acquisitions, the company says it still believes it will close at the end of the year as planned. they say time warner continues to perform better than at&t expected ahead of the deal closing, stephens said they're working to
reorganize, to make the most of the deal as soon as it closes. melissa? >> in terms of the directv subscribers that were added and touted on that conference call, julia, those were added at great cost, correct? they really had to discount tremendously they don't actually make money, i don't believe, on any of these subscribers. >> reporter: the whole thing about directv now, it's a different model, getting people used to the idea of subscribing to a different a little bit smaller bundle perhaps or a bundle that they're going to be paying for over the internet they would say that the directv now bundle is as robust as what you would get from traditional television, it's just a different model. that's really what they're trying to convince consumers but increasingly these companies want to hold on to consumers to make sure they're not only selling you a mobile wireless service, but along with that, also getting you locked in so making your partner -- making sure you're part of the triple play or whatever that play is these days it's really about locking in consumers into the idea they'll make money in the long run >> thank you, julia boorstin back at headquarters
this will go to 5.6% dividend yield and growing as the stock sinks. >> that seems like a red herring to me. in the last six weeks, the stock is down five, six bucks. more than twice. to have hope that -- >> there's 18% we just got done with the entire "a" block talking about reflation. you're not in it for that. utilities are massively underperforming. can we do another would you rather at&t and netflix at&t is basically getting beaten up and netflix, which to me is just a conduit to deliver content that i think at&t has got better, we know what's going on with linear tv, over the top is very aggressive but people are punishing them. out of at&t, i realize it's a broader business model with different margin pressures, but netflix at their core is doing
stuff that at&t is not -- >> i get what you're saying but netflix is also able to raise prices when at&t basically has to give away directv for free. >> they're not selling a product people want. when you have to pay somebody to take your product, that's not a good sign. netflix is out there left and right raising prices at&t has an awful lot going on it's not clear to me that they can turn this around or that the plan is going to work at least in the short term. i would stay away. >> this would be at a new 52-week low with open rate >> wet craig moffett on a couple of weeks or so ago, he spoke to several things that happened in this quarter mr. stephens painted a rosy picture. he cherry-picked the good stuff. there's bad stuff as well. ask yourself this question there's no e ps growth, what's the right multiple for at&t? i can make an argument that 11, 11.5 is not unreasonable as we said last week, that gets
you down to a $33 stock. before you start talking about what if anything to do with the dividend ahead, chipotle stock down around 10% after another big miss for the fast food giant why didn't it its new queso save the day? i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide. meantime, here's what else is coming up on "fast." >> i'm going to kill the bear? >> you don't need to the bears are already dead as wall street charts keep getting crushed. we'll give you the names tripping them up plus they're the questions that haunt us. what is time why does my father hate me what is bitcoin really worth the dean of valuation answers atason wn asmoy"th lt e,he"ft ne returns. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward.
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welcome back to "fast money. jpmorgan shares surpassing $100 for the first time ever today, underscoring a key trend in this market breaking it down is a man who knows a thing or two about the benjamins, cnbc's dom chu, hey, dom. >> reporter: melissa, i do like the benefit gentleman minujamint these days stocks are more expensive than they've ever been not on an earnings multiple basis but on a per share basis the average stock price in the s&p 500 has run 15-- $103.58 the mean is skewing higher according to the s&p dow jones
industrials indices, that's the highest it's ever been at the end of 1980, the average price was $37.40 they end of last year, it had trended to $89.24. yes, this doesn't get the overall market cap picture intact but it speaks to the scarcity of stock splits in the last few years we've had a total of five splits so far this year to date eight in all of 2016 and back in 1997, there were 102. this also helps explain the lower stock trading volumes in the market, higher share prices, of course, mean fewer shares traded for the sam dollar amount it may be a caveat to look at, melissa, whether it comes to comparing all those stock trading volumes over the course of the years back over to you >> thanks, dom dom chu back at headquarters so let's trade and think about the other stocks that could actually enter that club >> of $100 plateau
you wouldn't think of insurers, they would be under pressure, and in some cases maybe you're right. a name like allstate, talk about slow and steady wins the race. look at their earnings growth, high teens earnings growth for a company trading 14 times next year's numbers if you look at something that will get you the $100 plateau, i think the report on november 1st, that's suggesting it gets there then sometime before maybe the spring of next year, i think allstate gets it done >> that point that dom made, if he were still there i would ask him about it, the point that dom made about the trading volumes, because we've been lamenting trading volumes for so long, the dollar amount, because the shares are just more, right, the dollar amount may still be the same or greater and the shares smaller. >> exactly that's the problem for commission-oriented traders. >> yes >> i would agree with guy on
allstate they sent us a list, these stocks could be near and that was the one that stood out to me as well, because, you know, we have this terrible p&c, property and casualty, terrible. that normally means higher rates on the product with higher interest rates, these businesses generate an enormous float so the higher interest rates, are the more they earn on that float. the more they should earn. >> let's go to banks, jpmorgan, that's the one people will pay most attention to, they're the granddaddy, certainly the mothership for the financial sector they truly have a diversified business model and that to me is ultimately a company that is reflective of, remember where we were with this company or with the sector in 2009 and where they are today and how healthy this balance sheet is if we're playing a game of stocks going over a hundred, which apparently they are, that would be my -- >> a hundred and change. >> oh, my god, that's
incredible >> kudos, we give dan nathan a lot of grief >> he called it. >> sometimes justified >> dan does know a lot, and recently in the last month or so he said that jpm is going to print a hundred bucks, good job, dan. >> for me it's walmart, the only retailer that's doing things right out there. keeping it at 100, that's what the kids say ahead, a burrito blowout, chipotle down 10% after missing at the top of the bottom line. we'll tell what you is driving the stock. plus bitcoin serving 500% this year. what is it really worth? the dean of valuation will be here to explain. opportunities aren't always obvious. sometimes they just drop in.
introducing fast food's first made with 100% ribeye beef, fresh spring mix and provolone cheese on an artisan potato bun. yep, nailed it come try my new ribeye burgers. only at jack in the box. welcome back to "fast money. with the stock market soaring from record high to record high, it's been hard for short sellers. leslie picker is here to help us pick out the biggest bearish losers >> hedge funds are down more than 8% in the year through september. the worst performing strategy among 29 compiled by hfr david einhorn said his short in caterpillar was among the biggest detractors in the quarter, according to his letter distributed today a copy of
which cnbc obtained. despite the move in today's marks, einhorn is sticking to his guns, saying cat is likely to suffer from higher costs and lower revenue last year. that's also a short that jim tainos touted in the past although it's unclear what his exposure is now. another popular short, tesla that one fell 6% in the quarter. einhorn wrote, quote, we believe it deserved worst. tainos said in september that he was still shorte tesla and it wa a hold stock tripping them up was tech stocks the top 100 u.s. shorts, 34% are in the information technology sector that's higher than any other sector's proportion. shares of many other tech names keep climbing. things may be looking up for shorts that's based on sources in the market i'm speaking with in
recent months. this is why equity correlations are actually disintegrating, meaning they're separating the winners from the losers, providing opportunity for shorts einhorn's green light fund is only up 3.3% year to date but was up 6.2% during the third quarter, beating the s&p, guys >> leslie, thank you, leslie picker we talk about these a lot in terms of shorts, in which the short seller is very convicted, and they may actually be right, maybe on a fundamental basis, but the market just doesn't cooperate. the market doesn't believe it. and for that matter, you are wrong. >> it doesn't matter, you're wrong. you might have the greatest thesis in the world. but if the market is going against you, you are wrong that's what this game is about this game is about making money every single day for me, when i look at a position before i even enter it, i know where my stop out point is it's based on a three to one ratio. i want three dollars in gain
versus losing one. there's no question, when it hits that point, you've got to be out that's the only way to play this game in my view. >> you have a longer view, than some of the other guys on this desk >> for one, thesis creep, where you kind of rationalize, well, you can still stay short that's a difficult discipline to stick by you have to know when your thesis doesn't hold water anymore. if you were short netflix on the hope that subscriber growth was going to slow and in fact it hasn't, that would be reason to come out on a more quantitative, i would look at how big what i allow a short position to be the problem with a short going the wrong way is it gets bigger and bigger as you're wrong when you pick whatever it is, 2%, any time it goes over you've got to cover and trim. or, to brian's point, you pick, i'm willing to lose x dollars, once i breach that, i'm out. >> the problem is when you have some kind of a secular existential type of a change in
your underlying stock or the sector they're in, tesla is a great example. people are applying value to this intrinsic disruption. those guys, i agree with their view, those that are short but that's a difficult trade that people who are short to stop for investors there's a big challenge to, again, look at the world that is putting value in a different place relative to where bond yields are, for example. and something else, at least in defense of these guys. you hear about these single names. people act as if they were short their whole book on these names. niece guys have multiple shorts. they're some of the best in the world at it. in some cases, their benchmark is not the s&p a guy that does a lot of short work in some cases his portfolio is an entire short for people against their long book. people need to understand that >> i'll paint with a broad brush here people that play stocks from the short side tend to view themselves as maybe smarter than the rest of the market, because they see something that the masses don't see so what does that mean
it means ego plays into this in a major way. it's very difficult to say, you know what, i know in my heart i'm right about this fundamentally, but -- >> hubris? >> i don't know how to spell it, but that's exactly what i would say. the point is, conviction is one thing. but at a certain point, you're wrong. and you have to -- to bk's point, you have to have the gumption and put your ego on the table and say i have to get out of this thing. today one trader made a nearly $5 million bet against one hot bank stock let's get to mike khouw in boston hi, mike >> reporter: it was bank of america, the most active single stock option and the second name most traded. we saw a big buy of 25,000 january 25 plus they paid about $2.75 for those. that's interesting because of course they're risking around
6.8% of the stock price to make the bearish bet there. when you consider this is a stock that has moved 20% since september, if you're going to make a bearish bet against the stock, using options is a way to define your risk and time horizon. >> thanks, mike khouw in austin. for more "options action," check out the full show, friday 5:30 eastern time coming up, two big after hours movers, chipotle and advanced microdevices, down 10% apiece we'll tell you what has investors so worried plus, it's a bird, it's a plane, no, it's just bitcoin, serving 500% this year but what's it really worth rewi ban of valuation lle he to explain. much more "fast money" still amedicine. well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture.
>>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. parts a and b and want more coverage, guess what? you could apply for a medicare supplement insurance plan whenever you want. no enrollment window. no waiting to apply. that means now may be a great time to shop for an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. medicare doesn't cover everything. and like all standardized medicare supplement insurance plans, these help cover some of what medicare doesn't pay. so don't wait. call now to request your free decision guide. it could help you find the aarp medicare supplement plan that works for you. these types of plans have no networks, so you get to choose any doctor who accepts medicare patients. rates are competitive, and they're the only plans of their kind endorsed by aarp.
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watch out, piggies! (child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. welcome back to "fast money. advanced microdevices taking 10% in the after hours session josh lipton has been listening into the call moments ago. josh >> reporter: melissa, amd obviously under a lot of pressure in the last hours analysts made a beeline for that q4 gross margin guide that amd delivered of 35% that would be just flat
sequentially we're really hoping for an uptick there amd's ceo trying to set a bullish, confident tone. she talked about strength in the company's computing and graphic segment. that involves notebook and desktop processors and graphics chips for pcs. people use those chips to mine crypto currency. giving her outlook on crypto for the quarter ahead. take a listen. >> we're also predicting there will be some leveling off of some of the crypto currency demand as we look at it, it continues to be a factor but we've seen restocking in the channels and stuff like that we're being a little bit conservative on the crypto currency side of the equation. >> reporter: lisa sue also giving some color about some of those new products that include the processors for desktop where she's seeing strong demand, also a ramp of the epic line, that new line of processors for the
data center where amd is taking on intel melissa? >> josh lipton, thanks so much the two slices i want to get to here, in terms of the outlook, was it critical to amd in particular, the outlook would have been stronger why do you think the stock -- >> that's part of the reason i think she's being -- she's trying to be rational about something. they might have buried the lede here to me, they were looking at 17 1/2, 18% now people say it's too expensive on valuation. maybe. i think they're being too conservative i understand why they're selling the stock down but it's too much on the back of what was a pretty decent quarter >> on the crypto side of it, bk, does this forebode a decline in bitcoin? >> no, because you shouldn't have been buying amd for that
anyway the way crypto currency is mined is changing anyway chinese miners are getting a secondary price on the market. it's a smaller portion on their revenue. amd should not be bought as a crypto currency proxy. speaking of bitcoin, sound bite today's drop, bitcoin is still up 484% this year. our next guest says trouble could be brewing for the crypto currency he's known as wall street's dean of valuation aswath damodaran joins us now from san diego aswath, always great to have you here i think the burning question after a huge round that bitcoin has seen, is bitcoin overvalued? you're saying because it is a currency, you, the dean of valuation, can't figure out what the valuation should be. >> it's not that i can't figure it out it can't be valued you can't value the dollar you can't value gold a currency can be priced against other currencies
it can never be valued there is no valuation discussion around bitcoin the real question is, is it a worthwhile currency, a currency good enough to demand the price that it is that's really what the discussion should be about >> so do you think it is do you think that, for instance, the 484% rise in bitcoin, was that warranted given what the currency is right now? >> i'll give you a nuanced answer right now it's not a very good currency i couldn't use it in transactions in much of the world. it's not a good currency because it's not a good medium of exchange and it's not a good storer of value simply because it's much too volatile could it become a good currency? absolutely but i think we need to stop talking about how much it's gone up in the last year. a good currency is not something you boast about how much money you made in it a good currency is something you use to transact. right now all the discussion seems to be how much money you can make betting on the
currency, not how good a currency it is >> aswath, it's brian kelly. i'm glad you're calling it a currency, at least we're on the same page there. i guess my question is, you wrote some interesting stuff about relative value, what is one currency worth versus the other. let's talk about bitcoin versus gold so we have bitcoin at roughly $100 billion total valuation gold at $8 trillion total valuation. what percentage should bitcoin be as a relative value to gold >> i think gold has had a longer standing the $8 trillion reflects that much of that gold is buried in people's closets, it's not coming out in the market $8 trillion reflects the total accumulation over mankind's existence of paranoid people putting money aside saying, i'm scared of what's going to happen when i think about bitcoin's ultimate pricing, i think it becomes a niche currency, which is what gold is. gold is not a broadly used
currency its standing is going to be much smaller than if it comes in actual digital currency that people can use in transactions i think the better path for bitcoin is to actually make it a digital currency that you and i can take on our travels and use to buy stuff and sell stuff. if that happens, then i'm okay with the pricing at that doesn't happen, i don't see how bitcoin can have the staying power of gold. it could be just another fad, another digital currency could replace it >> i guess you can use bitcoin now, 100,000 different merchants take it at this point in time. you can use it to buy your trip at expedia so it seems to me it should be more valuable than gold, because i can actually transact with it today. >> i've heard those statements about how many people take it. i've actually tested that proposition out, because i often hear news stories about two montessori schools in new york that claimed they take bitcoin i called and asked whether they would tell me what the price -- i don't have any young kids but i acted like i did i asked them whether they would
give me the price of tuition in bitcoin. and they said we can't quite give that, but on the day that you pay, we can actually tell you how many bitcoin will translate into dollars that's really not accepting bitcoin. that's kind of cheating, if you ask me the same thing is true for microsoft and expedia, when they claim to take bitcoin. they don't state prices in bitcoin. what they say is we'll have an exchange merchant any door and you can come with bitcoin and we'll convert into dollars and take your dollars. so my concern is that it's really not doing as well in transactions i mean, i drew a graph that showed the number of bitcoin transactions is increased 32-fold since 2011 that's great but the pricing has increased a thousand-fold. my point is the pricing is getting out of hand 50 to its use as a currency. >> so let me ask you about the currency part. were you able to do it in swiss francs or rmb or australian
dollar they do the same thing >> exactly >> then why isn't it a good currency if i have rmb in my pocket, i can't buy anything in new york either >> it's a limited currency but if it's in your pocket and you're in china, you can buy lots of stuff. if you have fiat currency, you have a country where you can spend that currency. go ahead >> professor, it's tim seymour isn't the argument that ultimately you are able to transact it in new york, there's a rate you're going to exchange and you won't know what that amount is until you lock in at that time? that's no different than what brian is saying in any currency. i would add, currencies are expected speculated in all the time >> to me the definition of investing is there has to be a value out there. you can trade in currencies, you can trade on commodities, you can trade on collectibles.
currencies can be traded on. they can't be invested in. >> can i ask the bottom line, professor? this is what people really want to know. can you see a scenario, if you view this as a currency, can you see a scenario where this actually just implodes, this is a fraud like the tulip bulb mania, it will end badly because people investing or trading in bitcoin, whatever you want to call it, that's their biggest fear given the huge run-up >> i can see that scenario but i can also see a scenario five years from now when bitcoin actually becomes a legitimate currency that i can use in transactions around the world. i'm kind of split down the middle i'm not in the optimist camp but i'm not in the jamie dimon camp either where it's viewed as a fraud. i think there is some intermediate ground here why you can treat it as a currency >> professor, thanks so much for joining us, we appreciate it >> thank you very much >> very measured approach to bitcoin, which is very unusual
because it's usually very divisive >> it is bitcoin can do that. >> i know you're getting all red. >> exactly i think the professor brought up a really good point at the end in that if you look in the investment field now, where is your best risk/reward? if bitcoin does over the next five years become some kind of global currency, your best risk/reward is to buy bitcoin. but i wouldn't put all your net worth into it. i would put a portion in it. >> i speculate in currencies all day long i don't get it athitlead, you won't believe wh cpoe blamed their big miss on, when "fast money" returns. your joints... 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.
choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. welcome back to "fast money. i'm contessa brewer. chipotle taking a pounding in afterhours trading after reporting third quarter earnings the company missed on comps in both top and bottom lines. chipotle blames its 30 cent miss on a variety of factories. high avocado prices, store closings, hurricanes, and a data breach today chipotle's board authorized a $100 million stock buyback. its execution on its queso dip got a lot of attention, some of it very negative but chipotle remains positive. >> in lots of cases we added 6% to the comp in september it's adding an incremental 4 to 5% in october so far when compared to the negative 2.25%
trend pre-k-zone the initial boost came from a combination of increasing check as customers added quesos to their entries. a lot of new lapsed customers came into our restaurants. >> chipotle says it will focus on aggressive staff training, better customer experience, and new digital options for organized and paying, melissa. >> contessa, thanks so much. tim, what do you think about chipotle on the queso, adding same store sales, but analysts are saying people just wanted to try it >> i don't think queso was supposed to be manna from heaven we'll see where the stock trades >> time for a cheesy food fight. we're talking about quesos how does that stack up to its competition? we thought we would put a blindfold on guy adami and put it to the test so one of these is chipotle's
queso. the other is buffalo wild wings. all right. we're going to kick it off here. >> i like the music we're playing. it's festive okay do i eat the -- >> yeah, yeah. >> i'm trying to -- >> big bite. >> okay? all right. here's another one here, i'll just put it in your mouth. open up. >> oh, jeez. >> mmm not bad. watch what i do here >> okay, okay. >> the second one was better why? it had more ingredients. how could i tell there was a chunky aspect to it. what does that mean? it means the first one was the cheaper of the two the first one is chipotle. the second one more expensive, had more time to prepare
buffalo wild wings >> right on the money, guy adami. [ applause ] >> maybe thas t'chipotle's problem. up next, final trade businesses are thinking. factories are thinking. even your toaster is thinking. honey, clive owen's in our kitchen. i'm leaving. oh nevermind, he's leaving. but what if a business could turn all that thinking... thinking... endless thinking into doing. to make better decisions. make a difference. make the future. not next week while you think about it a little more. but right now. is there a company that can help you do all that? ( ♪ ) i can think of one.
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>> uup is the way to bite dollar >> how is your tummy feeling >> my final thank you, by the way, allstate, dance with the girl you brought to th . rl you brought to th my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere. i promise to help you find it. "mad money" starts now hey i'mcramer. welcome to "mad money," welcome to cram america. other people want to make friends i'm trying to make you money. call me 1-800-734-cnbc or tweet me @jim cramer we had a phenomenal run today with the dow vofltin