tv Street Signs CNBC February 4, 2013 2:00pm-3:00pm EST
involving all those animals, but yes. >> how much has that production made. >> oh, my gosh. a gross number pushing $5 billion. that's how much we made opinion how much it grossed. we made a lot of money on it. >> shoemaker's track record, impressive in an industry where the success rate is around 20%. >> so this is a tough business. >> yes. but if you hit it, it is almost more like venture capital. >> don't miss maria's betting big on broadway tonight at 9:00 p.m. eastern and pacific here on cnbc. sue, as an aside there, the brother after dear friend of mine, was hired in 1995 to be the production or stage manager for the original lion king. and my friend at the time said -- my brother now has greater job security than you or i will ever know, and he was absolutely right about it. >> oh, absolutely right about that. it is a fantastic show, if you come to new york, you have to see it. >> let's check markets for you.
ty, down triple digits. down about 124. s&p is down almost 1%, about 14 points. and nasdaq is real laggard to today's trading session. down almost 42 points. profit taking and down day but could have been much worse. ty? >> you have to figure we are due for a little bit after sell off after the runs we had in the month of january. that does it for this edition of today's "power lunch." thanks for watching. >> have a great afternoon. ty and i will be back tomorrow. "street signs" begins right now. >> and week starts with a whimper. stocks selling off, has the rally finally run out of steam or is this the pause that refreshes? that and the one thing that scares the deckins out of our guests. facebook is now nine years old, most of you love it, but what
can we learn from it. the author of speak like zuk is here. social media, is it to blame for all those boring super bowl ads? after nine months, the big month is here. no, not that. but will craft the winner. >> the s&p and nasdaq this year, backing way from 14,000 on the dow after fifth week of gains though. thank you, very much. s&p 500 as you can see, is now below 1500 after finishing on friday. only about 3% belowity record high of 1565. brian, in the meantime, let's get down to the floor of the new york stock exchange. a bit after whimperish start to the week and where do we go from here? >> yeah, look. is the raleily over? people are concerned because this is the first time we have come off lows.
flat lined the whole day. i'm not that concerned right now. a lot of this seems confined a little bit to europe. take a look at the down side here. look at italy down 4.5%. united states, dow is down 500 points on comparable number. even in spain down 400 points today. can you see the damage is very much limited to europe. though some of the foreign etfs, indian and chinese etfs are down as well. there is concern in emerging markets happening today. i just want to show you the dow. we have gone from 13,000, january 1st, to 14,000. that's where we've gone. we are down a hundred points today and everyone is wondering whether the rally is over. this is nearly a pause unless news gets worse in europe. you want the obvious support level? it is right here. back to september, 13,600 or so. drop another several hundred points. even then down less than 3%. i bet you see buying interest if
we were down 3%. back to you, mandy. >> thank you very much for kicking it off for us. in the meantime, treasury yields pushing higher. ten-year. late on friday, will they continue to climb this week? rick santelli? >> i think all we have to do is list kbren to what bob said. even though we aren't as bad as europe when you think about ford and weakness, you think about europe. there are lot of multinationals, lots of global growth issues that are weighing on equities, at least percent. today down a half dozen basis points mandy. and 20-year chart shows us that the rough average is around 4 3/4%. we are still low but maybe the surprise for the rest of this year is maybe we will find a whole lot more treasury about guilt buyers than sellers
considering that growth percentage for the globe doesn't seem to be enthralling any investors at this point. >> right as always. thank you very much. let's dig into the markets now. joining us, mark travis, president and lead portfolio manager at intrepid capital funds. and analyst at s&p dow jones industries. howard, let me ask you first of all, even though this is not the best of days, we've had a pretty straight move since late december. what corally this valley for real? >> it is going on for longer than that here. we could use consolidation on that. companies may want it take it, individuals may want to take it. also you have the sequester coming up after earnings season. layoffs in defense. retail. european issue this morning. as well as washington's inactivity. a lot of things that could impact this market at this point in time.
>> mark, what is your biggest fear. >> politicians and or central banks. i think there is always an opportunity out there. just matter of finding it. that's one reason we like to have cash available when the market seizes up. if you go back 25 years, there are intermittent surprises in the market. one this year that is kind of remind me of it a little bit is 1994 which you may recall we had the valentine's day massacre when the fed surprised the market with 25 basis point increase. i don't really anticipate this february of 2013. but that was a very difficult year in the capital markets and it's been interesting to me to watch the ten-year treasury tick up here since the fiscal cliff was supposedly resolved right at your end. we have ten-year up over two and you raise the discount rate on the cash flow and terminal valuation will be lower.
so i think that from my perspective, fully vested today is assume there is better deals tomorrow. i don't operate under that assumption. >> howard, i want it play the devil's advocate here. i would never cheer lead for the market but this this is an a teflon market. none of those things are new yet we marched higher. why would those things, as i say, old things, derail the market now. >> the good news, we haven't had the negative news. we didn't go off the clip. tax rate didn't go off that much. dividends tax change was a gift, if anything. the negative news that was there, actually is being taken as positive. investors want back in. an lot of alternatives here. of where to put your money and they see this big rally coming in. there is a lot of info. they have very good cash flow earnings, dividend, balance
sheets. however, we have had a nice run here and some consolidation should be expected. not all straight up pch can't be. >> agreed, mark, to howard's point, if the market went up everyday, that would scare me more than anything. you have to have healthy pull backs. we seem to have, now that election is behind us, a little bit more back to normal, if you will. >> brian, i would contract tdic this point. as i've said to other people i think that as howard has eluded to, i think there is a fed committed to buying 85 million a month in treasuries, trying to suppress rates. that makes the treasury at two looking atrikt. now they are into the equity
market. and have you the central bank of japan doing the same thing. you have a competitive currency devaluation going on around the globe and the market -- >> i'm so sorry. you know, you said mark, your biggest fear is d.c. guess what, ours too. i have to cut you 06 because i have breaking news from more politicians in washington right now. >> shocker. >> yeah. we have john boehner on the house floor speaking. >> -- proposed this sequester in 2011. >> the president's budget is not coming out this week. do we want to listen to him speak for a minute? >> with on who sense reforms that reduce spending and preserve and strengthen our future et for generations. >> brian, you hear the president -- or speaker going on about the president. he is going to criticize the president for not submitting a
budget this week. the president delayed that until at least next week because of fiscal cliff negotiations. i think the good news is the budget issue after being off of the front page for a couple of weeks in deference no issues like guns and immigration is returning to the floor. we've only got three weeks or so a little over three weeks until we hit the sequester deadline when the indiscriminate deadlines take effect. then the legislation at the most basic leveling will expire. so i think the gears are starting to engage again between the congressional republicans and the president on the budget and that is probably a good thing. >> yeah. we thankfully sort of have our own black out politically, right? a couple weeks where it was off the front pages to your point. so give us then the play book. you mentioned a couple of weeks. is this, by boehner, the first salvo ramping up again?
what is our realtime table here. >> well, march 1st is when it will be sequestered, if not replaced by other cuts. even democrats say we can live with that. we can can live with the results of the across the board cuts. i think the administration would like to not do that. i think the deadline will get punted in a couple of weeks. maybe a month while they head toward the government funding bill. i think that's where we have the possibility of the next significant round of deficit reduction which will probably include both spending cuts and revenues if the president gets his way. >> thank you. in the meantime straight it mary thompson. i believe have you a developing story for us. >> that's right. dow jones reporting department of justice with state attorneys general preparing civil action against the rating agency standard and poors. it relates to firm's ratings prior to the financial crisis of 2008. if correct this would be the
first legal action taken by the government against a rating agency for the activities leading up to the financial crisis. it reportedly comes after settlement talks between the two sides looks down. unknown right now is whether other rating agencies, including moody's, will be charged as well. investigations frequently point to the ratings agencies as contribute together melt down. linked to the risk of sub prime mortgages linked to investors. the ratings were granted by the rating agencies. e-mails to standard and poors were not returned and attorneys general's office were not available. sec spokesman declined to comment via e-mail. a big birthday for face ball. incredible growth in just nine years. so what can you learn from zuk? we will find out.
>> don't worry, niner fans. you weren't the only ones breaking down. we will show the big ad losers. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime. tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums.
on this day in history, nine years ago, mike zuckerberg, even more fresh faced than he is today, launched the facebook at har shard college. social networking website has more than a billion active users. the company went public, you might remember, in may of last year at 38 bucks. the stock now is down 28%. don't i know it? because that was my stock draft pick. the company has come a plng way, hasn't it? but are its best days behind it snrs let's ask the author of think like zuck. great to have you on the show today. it is turning nine today. what do we have to thank facebook for? >> mandy, i think a number of things. one is the way facebook revolutionized communication, how it made the world smaller, open up a whole new way to
connect with people around the world. and i think make the world more transparent. >> did it halama onnize the internet? >> absolutely. >> in what way? >> the whole -- the whole approach to a like button, and just kind of the news feed filtering of getting the most relevant news about not only your friend but also the brands and the way people talk to each other. we went from, one way monologue, to two way dialogue and talking to all friend and even our fans, as brands, in a human friendly way. >> ekatarina, for our viewers that probably won't create the next facebook, no offense to them, but it is hard, how can they take the lessons of zuck and turn that into help for their business no matter how small right now. >> think like zuck is more of the mentality of a leader that
leads with passion, has very clear purpose and focus in front of him or her. builds teams in a creative way. and partners smartly. so the five ps discussed in the book are meant to look into lessons of facebook and other successful companies of our time. >> listen, he's an softy, okay. i interviewed eduardo in singapore. we had the chance to speak on and off air. we know the movie. zuckerberg could be ruthless when he needed to be, right? >> i think zuckerberg has character. he is so darn focused sometimes o on what he want to do and achieve and take the company, that sometimes you know, his actions are regarded as arrogant or ruthless. but i do believe he has character as a heard. >> what do you think facebook will look like nine years time from now? it will even exist? >> absolutely. zuckerberg is all about
long-term strategy. they have announced a big question that they are a mobile ad network. they just launched money-making sites i would say. they do have challenges though. i don't think they are getting into chien kra any time soon so they need to focus on emerging margaret and growth and revenue there. and generation z is coming of age. would they like to use facebook or something else. >> you said facebook h. >> you know, i think it is both, not just facebook. moving to digital communication that needs to have a balance between what is happening face-to-face and on-line, what facebook has created is they try to come as possible as possible to the way we communicate in real life. and i think they are doing pretty good. >> thank you very much for your
insight. we appreciate it. have a great day, all right? all right, coming up, street talk time. a brand new day for old blackberry. we mean it because they've got a new maple. >> they sure do. we will have the analyst, why he said payroll tax is to blame. "street signs" is back after the break. hello! how sharp is your business security? can it help protect your people and property, while keeping out threats to your operations? it's not working!
happy monday, everybody. street talk time, hitting all the stock stories you need to know about, at least five a day. okay. we've got first up, we have a new name. not a new company but a new name. and it is now blackberry. >> how sad for people that like to make puns off the old name that we won't get into. the company is blackberry. why is it bbry. should be bbm for blackberry messenger. bernstein, a heady $22 target. my friend, that's an upside from
here. they see a strong launch for the bb 10. they think it will swing blackberry back into the black. >> that stock has to come up a very low base. in the meantime, panasonic soaring overnight. >> we threw this up there. the one stock, we usually talk about sony. this is a cousin of sony. we can't talk b enough about the yen. mandy, you know all about this. what they are doing, money printing that's going on. weakening the yen. but it is seen benefiting people like that. selling giant tvs to american consumers. >> and helping the nikkei which is slanting that way. >> and that is totally self serving since panasonic is my trade. >> jp calling 2012 the year that
wal-mart was. downgraded in part because of the low hanging fruit. easy stuff behind them but they partly blame the payroll tax because they think sales could peak out for plateau after three years of gains. >> let's bring in the analyst who made that call. we have chris at j.p. morgan. in your own words, give us an explanation here. >> there are three reasons. wal-mart add three-year turn around. straying from leadership. bill simon got it back. comps accelerated. we did a 2 .6 in the first quarter of last year but wal-mart is a $2.6 million grocer mainly. that is like bed and bath sales increase. they have this hard compare because of low hanging fruits behind them. you look ahead, they have average household income of 42.5 and that payroll tax is greater than 2% income hit.
the stock is not cheap any more. >> so you don't hate it. you say, it had its run. if you missed it, you missed it. >> yeah. i don't hate the company. i think the law of large numbers is very real for wal-mart and it is hard to outperform to get more customers to come to the store to have them put more in the basket is tough. and you think about the long-term growth rate. it is an inflation plus type sales growth business. eps, 8 to 12%. trading 13 times. just not a good time to get in there unless you think there is increase coming and we don't think that. >> you don't think that. obviously a lot of it is rivals and competitors in space hit by 2% sales tax. are there any other sector that you prefer. >> absolutely. >> everyone will get hit. if you look across the income spectrum, target has $64,000 average household income. costco has $96,000 average
household income. if you are looking at value money, i'm buying target. durning cheaper on valuation multiple. earnings growth is accelerating. then on the costco side, 5% footage growth international growth. just a phenomenal retailer and a long-term core holding. >> thank you very much. let's get to street talk with final stock, yahoo! >> lower despite a big buy with $25 target. we will speak to the analyst in a second. this is an asia centered call. but there is something to note before the interview. one of the best investors out there just sold 11 million. sold 11 million shares of yahoo! but may not be a fundamental call. either way he owns about 60 million shares. he is not out of yahoo! but dan
loeb did sell. something to keep an eye on. >> something to keep an eye on. why don't we bring in the analyst who made the call. are you making anything of the dan loeb news there, jordan? >> not really. if he thought the prospects for yahoo! or investment was different, he wouldn't have is you sold just 11 million shares, would he have sold the whole thing. that's not what is happening here. what is happening is yahoo! is finally getting recognition for the asset value it has to 24% owned yi yahoo! and yahoo! japan from itself has been on a tear. in addition, the company bought back nearly 1.5 billion worth of shares in the fourth quarter. and that's more than double the -- or about double the 750 million hours looking for and i was aggressive with my assumptions.
they continue this, then from a sum of parts basis, valuation will almost be forced to go upward. both because the company taking any shares from weak-handed shareholders and retiring them. and because the denominator, if you will, the value of the assets goes up or stays flat to up only a little bit, but the number of shares goes down to say 8 or 900 million. stock is almost forced to go up. >> you say in your report, quote, it remains difficult to be excited about the core u.s. business. when can we get excited about the core business? >> given that i just upgraded the stock and am looking for reasons to be excited in general, i just don't know. do i think that marisa mare has a chance of figuring things out? perhaps. perhaps. i think is more intellectually honest to say, hey, i'm looking for the core business to be flat over the next few years. not come up with any -- not
catch lightening in a bottle, as they say, or any way it revitalize yahoo!. if the management team there can cup of something off and pull something around from mobile or social, that's all up side. >> we appreciate the intellectual honesty. thank pup. you /* now david, what do you got? >> we have a response from s&p to what is expected to be a civil lawsuit by the doj against the rating agencies and can give you a bit more background on this expected lawsuit. again, walla walla street journal saying it is coming. that does appear the case. s&p out with a detailed press release responding to the as yet to be filed lawsuit. which will be filed under the act from 19 will 9. that is dealing with snl loan crisis. a number of prosecutions by the
doj of mortgage related violations by big banks for example. but this would be the first time we have seen rating agencies taken to task or at least become a focus of such a lawsuit. it approves in a sense, criminal and has a civil burden for collecting really what our criminal fraud charges and in way, although this is again civil. nobody would go to jail. a couple of things i want to share as well that are not in the release but i'm hearing from sources, there have been settlement talks between s s&p and doj as you might have been indicated. they are looking for a settlement and also want an admission of wrongdoing by s&p. 10 figures plus means over a billion dollars. that's a lot of money, even in this day and age. does need 30 triple aceos.
>> those are debt obligations, rated triple a by s&p. rating agencies reaction during the financial crisis in the lead up to it during the housing bubble have been examined by any number of commissions and congressional committees but this is the first action at this point at least -- >> david, david -- >> yes? >> why now? why now? you and i went through this. you were of the lead guys this entire world, digging into these problems in '06, '07, '08. it is 2013. what has taken so long? >> that's great question, brian. i can't give you a specific idea. i would point out another question i have and i want it share something as well with you. this does not include moody's. other major rating agency, that rated the ceos.
you know, brian, also rated essentially triple a. this is only s&p. there is one company that downgraded the u.s. government. there are those can i tell you, th, wondering about some political pay back. nonetheless, there are these beliefs among some people i have spoken to, why own state agencies. they have this idea of political pay back of s&p for the u.s. federal government. >> potentially broad reaching implications. sort of system, if you like. you know, the way it is all set up. we have to leave it there. i'm sure there is plenty more to the story. thank you. in the meantime, mark set having a case of the mondays. we are seeing the biggest losses this year. we are all over this day, ahead. >> you know what this market needs? more flair.
js just got to say, congratulationses to the baltimore ravens. you won the super bowl and since i throughout to denverouplweekse broncos, i have to take credit, you're welcome, baltimore. we won't get into the highlights of the game but we will get to the big business and bring in, brian here, also smart and handsome. >> do you also take credit for the sunshine and rain and everything else that good lord bestows upon us. >> i've been to three ravens
games and they won all three. >> good fan. >> there you go. >> i want to start on the field. and i'm also going to add in one from the corporate world to think about moving forward. perhaps the biggest winner is joe flacco. super bowl mvp, about to be a free agent. made about $7 million this year. if he gets something similar he could triple, about a hundred million bucks. that's not small been. >> not a small man. no, i saw him in will el i have the elevator once. tall man. now what dominated the week? don't look at teleprompter. performance enhancing drugs. concussions. anti-gay blips. is football popular enough to weather the storms in keep it in mind. then in new orleans, split
decision. economic impact, about half billion dollars. streets were safe, restaurants were packed, people seemed to have great time but will it pack the city's desire to host again in 2018 in rothy goodell said today, i fully expect to be back here for super bowls and i hope we will be back. we want to be back. end quote. at least that is satisfied. a sneaky corporate story. hundred dollar german software company. what are they doing in football? trying to get into the sports globery and u.s. providing the software platform for fantasy football. more than 30 million people play fantasy football. billions of dollars. keep an eye on sap. >> i'm shocked people had a good time in new orleans over the super bowl. >> yeah. breaking news. people having a good time in new orleans. >> bourbon street, beads -- >> and various other things. >> and baltimore's beat down. >> okay. let's's talk about the ads, right? so much more than just the
sport. personally, i tuned in for the ads. overall feeling from our staff was a collective, meh. julia boorstin, who was the biggest winner in the ad world? >> the biggest winner wasn't an advertiser but social media andand twitter in particular. and over 24 million tweets about the game and halftime show alone plus millions more additional tweets about the ads. perhaps most importantly, twitter helped advertisers make the most of the 34-minute black out wasting in time, ads around surges for power outages began four minutes after the lights went out creating a surgeon ad mitting which could translate into a surge of translating for twitter.
oreo tweeting, power out? no problem. you can still dunk in the dark. retweeted 10,000 times in one hour. now, an ad asking people to vote for the cookie or the cream, it has 36,000 instagram followers. another savvy black out move was audi which tweeted, sending leds to superdome. it's been tweeted nearly 10,000 times. and tide tweeted, we can't get your black out but we can get your stains out. one of the most controversial ads was godaddy's spot. sparking 50,000 tweets in 20 minutes according to a site called social zoo. it it is largely theic factor of the kiss. negative comments. but don't they say that all publicity is good publicity, mandy? >> absolutely they say that. let's bring in someone who should know about that. his name is james cooper of ad week. james, who do do you think are
the winners or losers? when when you talk about the the ick factor -- >> well, the kiss with the pudgy nerd, but the sound wag nass na. i think that's the big winner. for the winner i pick chrysler and audi and mercedes benz and hyundai having good ads. >> hang on. you say good godaddy with the noise and kiss, why is that a loser? if you talk about bad publicity is good publicity. isn't that what advertisers want to do? >> yeah, they are talking about it but in a negative way. ace metrics, has it at almost
the very bottom basis points. did not do well in terms of effectiveness. people are talking about it but i don't think in a good way. >> james, can we change the topic here. i was thinking last night that social media is ruining the advertising business. and listen to me and tell me if you think is complete bunk or if there is something to it, which is this. ads were boring. they were boring. pretty meh, across the board. that's my opinion. i thought, there is so much ease in creating outrage these days. let's face it. somebody is outraged about everything. i could say 2 plus 2 is 4 and someone will be insensed about it on twitter. do you think companies are so terrified of any backlash for what they do that they are becoming safe and boring? that the voice of millions is squelching them? >> i think you have to look at inestment these guys are putting into ads. for a minute it is $8 million. i think you're right.
because the long tale prior and post, you know, these ads are out there on the marketplace for a long time. if they are too edgy, they get crushed on social media. even the vw spot -- >> people call that racist. can you google it. hundreds of articles about that ad. >> that ad was incredibly sweet. even the jamaican tourist board had no problem. so you have to be careful and social media is perhaps damping down creative media. >> and these days, everyone wants interaction, like for example, the coke ads. vote, who you think will win. that kind of thing. >> definitely the most democratic super bowl ever. the crowd sourced people like crazy. people voted for the outcome of ads. i think that's another trick for people to get people vest need their brands. prior to the game, during and
after. they feel like they have ownership and throw in an engagement factor they are owning up there. >> thank you. at the end of the day, everyone has their own favorite. you know, ick or not ick. >> i think they are boring. and everybody gets outraged about everything these days. serve outraged. it is outrageousness overdone o or something. >> yeah, something like that. ? terms of markets, setting up far huge finale, even in the last 90 minutes of trade. we are all over this market, do not go anywhere. >> also ahead, move over ravens. another champion in the house. minutes from crowning the first ever cnbc stocks draft champion. the most dramatic that i can say. >> we are very democratic. we are talking about the loser as well. >> even the middle guy.
and clorox, that stock at an all-time high. the ceo joins us to talk about the growth for the rest of the year. maria and i look forward to seeing you at the top of the hour. now back to "street signs," guys. >> thank you, very much. today's things that makes you go hhmmm. a gigantic soccer fixing match scandal. this is a big story, honestly. 680 games. european officials investigating games around the world as high as champions league, even maybe world cup qualifiers saying as many as 425 officials, executives, players and criminals from at least 15 countries were involved with games going back to 2008. if we lose faith, mandy, in european soccer. what can we have faith in? everything. all right, final countdown. who will win the cnbc stocks draft? the big reveal is next. le annou- you're having triplets. [ babies crying ] surprise --
your house was built on an ancient burial ground. [ ghosts moaning ] surprise -- your car needs a new transmission. [ coyote howls ] how about no more surprises? now you can get all the online trading tools you need without any surprise fees. ♪ it's not rocket science. it's just common sense. from td ameritrade. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day after day... block the acid with prilosec otc and don't get heartburn in the first place! [ male announcer ] one pill each morning. 24 hours. zero heartburn. more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online
21 stocks. seven traders. just one winner. which stock was the best performer in the 2012 cnbc stock draft? will it be a superstar? >> apple. >> a veteran? >> i'm going with dell. >> or will it be a long shot? >> my first pick is research in motion. >> who will it be? the wait is over. "street signs" crowns the first annual cnbc stock draft champ now. >> it is the moment at least 20 to 30 of you have been waiting for out there, america. it is time to crown the champion, the winner of the first-ever cnbc stock draft. >> yea! >> reggie with his pick from goog google. >> presented with the inaugural plastic medal.
his pick gained 26% from our stocks draft through friday's close. google had an interesting run. we have a lot to talk about. we're going to dive in in a few seconds. enjoy this moment, reggie. >> okay. we also have to crown thebigges. the biggest loser in the draft. paul hickey and his jcpenney pick. we apologize. >> too afraid to show his face on the "street signs" set. >> in. he's going to join us anyway. >> he's just struck in traffic. >> we're going to be joined by paul on the phone. we have herb as well. reggie, congratulations. >> thank you. >> i would like to ask you if we did that stocks draft today, would you still pick google considering it's scaling at all-time highs? >> absolutely. >> why? >> of the 21 stocks we gave? we didn't say you could pick
anything you wanted. would you pick it out of the 21 or every stock in the world? >> i definitely would have picked out of the 21. every stock in the world, that's a tall order to ask from me. >> and we also have joining me here -- you picked jcp. >> i lose so you put me on 90 minutes of traffic. >> what would you pick today if you had the same choice of stocks we gave you last time? >> if i could redo it, i would have picked google. >> no today. >> if we could pick it today, i'd say apple's a name that's pulled back here a lot. the valuation is relatively attractive. you know, name. but what a lot of us tried to do in this was pick high risk, high reward stocks. and the less volatile stable names are the names that would have faired you better like a johnson & johnson. >> of course. because johnson & johnson, everybody hated it.
and it was also -- it had a good dividend. new management trying to turn it around. was i number two? >> there were only two up. i think it's important to tell the viewers what you were saying. we asked people to take a flier. we picked seven high risk, high reward, seven boring stocks. herb dove into that bunch. and seven high valuation names. soweren with this. it's important for people to know that. >> of the names picked, i think the average of all the names down about 4%. the ones picked were -- the ones drafted the average return was down. >> and these were names in the news too. >> here's what's lost. i'm generally known for raising red flags over something. reggie has made a career for raising red flags out and the two of us picked the winners that are in the green. which i think is actually pretty good. >> it was interesting. you said you would pick google
today. yet today bmo just downgraded the stock. not because they think it's bad. it's just come up so much, right? i think it's come up about 39%, 40% or something since june of last year. versus the s&p's 14% gain. why would you pick it again? >> because google is misunderstood. think about an iceberg where you see the tip of the iceberg but the vast amount is under water. most people don't understand google's business model. they think search engine. they're number one in display ads, number one in soon-to-be competitive number one in mobile computing. there's -- it's expanded to the point it's ready to take over two to four high growth industries. >> 90% of their money comes from search ad revenue. the rest is a hobby at this point. but you believe they will begin start to monetize that and take over the universe.
>> i don't know about the universe, but they're taking over several of the industries. if you take a look at -- understand that most people when they view a company, they don't look into the future. they look in the present ofr the past. apple's a very strong company. but from a technological perspective, apple's already lost the race. okay? same thing with many other industries that compete with google. >> okay. we've got to leave it there. thank you for participating. hope you come back again if we do another one. >> paul can do a remote next time or we'll send him the chopper. coming up next, the big losers on this down day. [ woman ] if you have the audacity to believe your financial advisor should focus on your long-term goals, not their short-term agenda. [ woman ] if you have the nerve to believe that cookie cutters should be for cookies, not your investment strategy. if you believe in the sheer brilliance
of a simple explanation. [ male announcer ] join the nearly 7 million investors who think like you do: face time and think time make a difference. join us. [ male announcer ] at edward jones, it's how we make sense of investing. it's delicious. so now we've turned her toffee into a business. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom.