tv Fast Money CNBC March 29, 2013 5:00am-6:00am EDT
congrats to all the people who weren't scared out of the market during the first quarter, you did well. there's always a bull market somewhere, i promise to try to find it for you here on "mad money." i'm jim cramer and i will see you on monday. time for action on "mad money." invest in dow. hewlett packard finishes the quarter in first place. a look at whether the stocks rally even higher. but first, the s&p 500 officially closing at an all-time high after moving sideways for the past ten sessions. will anything derail this rally
or will the bull run keep charging ahead? bk, all zipped up. >> all zipped up and is ready to go. >> it's getting hot in there, isn't it? >> we barely were up today on the end of quarter, end of month. it looks like we're probably at -- two weeks ago, i thought we would hit 1576, 86. i went short because of what happened in europe. the reversal in the european banks last week got me frightened. i'll probably have to have a little bit of pain. but my analysis hasn't chaengd. maybe 1% from the top. i'm okay with that. >> what was it like on your trading desk when the dow crossed, i mean the s&p crossed. did you throw the confetti out? the champagne? >> we were so excited. we were actually so happy, this happened going into a long weekend where all we're going to do is hear about this. and it did happen on low volume and at a time when we're essentially starting to see a spike in volatility. next week, four major central banks coming through and decisions, a lot of data, the china pmi sunday night. we effectively have ten speakers including the bernanke. now we go off to the races,
today is -- it's a moment we had to hit. we have the 1,576, intraday high from october 2007, this is the last thing we'll have to talk about. then this is out of the way. we've got chris on to talk about some of the technical elements of this. but i'm not terribly excited. so the theme in our office today, there's a lot of stuff going on next week. >> there is. >> a lot of people looking for the weekend and didn't pay attention. >> next week also, 1,576 which is the all-time intraday high, the party has not ended. >> this market, especially in the first quarter, the best offense is a good defense. the defensive sectors led one of the most bizarre quarters in that the market was up 10% and health care staples up even more. today, the theme continued. you saw amgen, biogen, gilead, hitting all time highs. i was long amgen, i sold it this week.
that's a big move for -- >> the leadership has been from health care? >> what concerns me -- >> staples in terms of stocks. >> what concerns me more than the price action is the fact that earnings, earnings going forward are actually not going to be that strong, and we've seen that from fedex, from oracle, but also if you look at some of the more cyclical sectors globally such as materials and energy, we haven't seen the strength. >> hi there. >> hi. >> there are a few things i like to live by. >> such as? >> you don't fight land wars in asia, people learn that the hard way. you don't get takeout food on a monday, especially after a holiday. >> why not? >> it's all the leftover garbage. >> okay. >> -- a doorway. >> or that. >> how about something that pertains to this show. >> the market doesn't give you this, and i say it all the time. the market doesn't give you this long to sell the top, which is
why we're going to continue to ground higher. i'm in the beaks camp. i'm in his camp. and a day will come we say that's the day. but i've said a number of times, we haven't seen it yet. the rally continues. >> we start the second quarter next week. let's get the top trades as we position ourselves for this brand new quarter. new beginnings here, guy. >> where's the graphics? >> what's your top trade? >> gold. >> gold, really? >> in the basketball game, it's 12 minutes, but in a quarter of a year, it's three months. i can explain to you why that is, we'll get into it later. over the next, i think, in this quarter, gold's going to wind up working. i think everything that brian just spoke about is going to lend itself being -- >> you probably would've said that last quarter, but i didn't -- >> i didn't say it last quarter. >> what did he do with the miners? >> she asked me that question specifically about a week or so ago. i said if my premise is right, then you want to stay away from the miners because you have market risk.
>> yeah. your top trade? >> i go with the geopolitical trade, as well. i think it's an easier trade. i think european problems will continue, i'm long fxe puts, i think that's a cleaner trade, risk off trade than trying to short stocks here. that's a theme we've seen in the pound and the yen and that's going to carry over now you've had the european banking stress. >> tim? >> we look for things that are contrarian and in emerging markets, we're going to talk about this later in the show as an asset class they've been destroyed in the first quarter. brazilian utilities even more so. there are reasons why this is overdone. utilities have the government leaning on their concessions, their tariffs. there were big write-downs that took out a lot of the big institutional players. companies, these trade on the new york stock exchange, cig, ebr, these are $10 billion, $5 billion companies. the worst is over, brazilian utilities, take a look at them, they're paying dividends and you're going to start to see big institutions who have to own these things come back in.
>> beakers, what do you say? >> i'm going to dip my toe in the hash tag emerging money pool over here and say south korea. ewys. south korea has had a housing bubble. those prices are starting to roll over. you're seeing unemployment increase in south korea. it is correlated to the u.s. it tends to be a lot more volatile than the u.s. and it's also highly subjected to chinese weakness in the chinese economy, which we could see over the next quarter given the fact that china are starting to crack down on the shadow banking system. >> you're negative on samsung? >> well, that's an excellent point. yes, i am negative on samsung because i think all the news and all the reason why you're long samsung is already out there. and their margins are lower. if you look at samsung versus apple, i think they'll be fighting each other, the margins come in, but i don't think samsung will be doing that much better. >> got it. >> let's talk about this rally because defensive stocks continue to lead this rally. our next guest was ahead of the curve on that trade. >> it's health care and no one's
talking about it. we're calling this the 15-year breakup no one's talking about. we think health care continues to go higher. >> chris is back with the second quarter playbook. and when you said 15-year breakout, i think a lot of us on the desk were a little bit surprised. you see more up room to run here? >> we still think it's a trend story, a leadership story. and what really strikes me is that the rally in the broader market's being discounted because health care's leading. just buy health care. when we look at a name that's very much hated, but turning out higher. coming out of a base, short interests are very high, broke out again this week up through 750, 775, we think that one's worth $10. we still think there are stocks worth playing despite a market that may be at all-time highs. >> i think it's not just health care, but it's what else besides health care that's leading this rally. we've got health care, also got staples, many of those stocks continue to hit multiyear
all-time highs every day when the s&p is hitting new highs. should we discount a rally that is built on the noncyclicals, you know, the ones that are sort of just the defensive names? >> we have to go back in history and look prior examples of when staples led or health care led. and what strikes me is coming off the august '82 lows, as the market was breaking out, for the next six, seven years, your leadership was consumer staples. this entire bull market, up through the '90s, staples were leading, health care was leading, i don't necessarily buy the argument that health care or staples is bad leadership. i would say just buy health care or staples. >> beakers? >> hey, chris, you were just talking about bsx and talking about the health care. i'm curious. it's a laggert, what is going on now? i know your not fundamental, but technically that gets you so excited about it after health care has had such a run. >> el with, let's look at the broader space right here. johnson & johnson, let's use that as an example, trying to get to about $75 for two years
it's $18 right now. when j & j broke out in 1995, it went up 15 of the next 19 quarters, we think this is a similar breakout. we like the space here. >> and you've been on the j&j train too. >> they look at it as a pharmaceutical, but i think it's a pharmaceutical with consumer brands. the multiple that trades that now, i think it should be greater. 14 1/2, 15 times forward. i can make an argument it should be at 18. i think it has more room to run the upside. >> another name, chris, which you want to highlight, it's not one we often talk about. >> technology name, what we like about the chart right here trying to break out through 28, 2011, can't do it. 28, 2012, can't do it. all along the while. higher low, higher low, higher low, gets through 28 this week. we think this one is worth 38 or
40. within a sector like technology, everyone focuses on apple or google or microsoft. here's one we think goes higher. >> let's take a look at the s&p 500 especially after we close at a new all-time record high. where do you see the s&p going? >> the simple example i would make is if we didn't know this was the s&p chart, i would say would you buy it? and i would. higher lows, up through 1,565 today, we think that projects to habit 1,590, 1,600. >> tim, you're skeptical? >> we have to go to the monster chart that takes us back to '97, right? >> mm-hmm. >> is this the place you breakthrough? >> let me make one point, when was put in the top in march of 2000, there were only 29% of the s&p 500 above its 200-day average. when we put the top in october 2007, only 45% of the s&p was above the 200. right now, 89% above the 200. we're attacking these levels from a much better trend perspective, which i think is important.
>> actually, i'd like to push back on that point, chris. only because in july 2007 we had i think 60% or 70% and april in 2007, about 80% of the stocks above the 200 day. do you see a potential top over the course of 2013 similar to the price actually in 2007? >> i do agree the easy money was made 1,600 is not the greatest move in terms of points. when we look from a bottom up perspective, there are so many names that are coming out of these 10, 15, 20-year bases. remember, no one knew it was august '82 until august '84. we may look back in march or april of 2016 and say, wow, how did we miss this thing? >> sure. >> back then. >> so the bottom line here is health care, staples can continue to run the s&p 500 headed higher in the second quarter? >> we like -- we like both groups. stick with the bottom up stories. >> chris, great to see you.
coming up next on "fast money," the hottest stocks of the year and whether they can grab more profits for investors in the second quarter. but first, straight talk on blackberry, the smartphone maker beating the street, but shares off 10% this week. we'll go behind blackberry's sales problem right after this. stay tuned. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪
one of the best ipos, biggest ipos in 2013, the stock is up 11% in the first day of trading. brands include duncan hines and bird's eye. also, by the way, got a 3.8% dividend yield. >> bk loves duncan hines, don't get me wrong, wait a couple of months. but i like tyson's foods. the meat space, any opportunity i get -- >> we know that. you enjoy your meat. >> well, that and duncan hines. there you go. hash tag rim shot. >> i think the trade has been. mondalese. but i think mondalese, if you look at where it is trading
around 20 times earnings, i think some of the best getting .and some of the best chow is no longer on the table, so to speak. >> oh, funny. very witty tim-tim. >> that's what i do here. you start to take some profits. this whole sector has gotten a run-up on the expectation that there were takeovers. this is driving the growth and you want to find the guys that at least have the most exposure. absolutely. >> this is a sector that gets a knock on historically high evaluations when compared to itself. >> and how long has that been a knock? >> for a long time. for a long time. many points, many dollars. >> general mills at 17 times forward earnings, that's crazy. it's a nice dividend, as well. >> 3.1%. >> thank you. >> lady in red. great song, by the way. >> huge seller. >> now i'm getting off on a tangent. >> a tangent. continue. >> the moment is still behind. i think general mills still wants to go higher here. >> let's move on to our next trade here. blackberry's wild ride. the cell phone maker stunning, commenting on his company's profitability on cnbc earlier today.
>> we have designed blackberry now in a way that its cost structure going forward is a very competitive cost structure. so what we're talking about is not a one-time effect in q4, we have established an efficient engine in blackberry that allows us going forward on the volumes that you will be seeing to be profitable in the future. >> joining us now is top-rated analyst of morgan stanley. great to have you with us. >> thanks. >> you made what turned out to be a great call on blackberry a couple of days ago, i think, it was an upgrade with a price to target increase. >> a week ago. >> a week ago, yes. >> based on the results, how does that meld with what you put forward in your note? which assigns zero value to the device side of the business. >> uh-huh. >> the way you've got to play this game is on the gross margin side. when gross margins are going up in handset companies, stocks work, down, the stocks aren't working.
gross margin going up, they had 40% this quarter, last quarter was 31.5%. >> how concerned should we be about that given sequentially this is the third straight quarter. >> it's not that big of a deal. so this quarter they did lose 3 million subscribers, quarter before, lost 1 million subscribers. you've got to look at the total base they have, the vast majority of those are still good high-end subscribers. there's a big chunk of them, 20 or 30 million or so, not good subscribers. they don't really buy high-end phones. they've been there only because of the last couple of years company's been discounting a lot of the low impact batteries like crazy and that's kept the number higher. if they lose those, it doesn't impact going forward. >> i think we can probably guess from what you just said about margins and handsets and what you think about apple and nokia. clearly this is a place where the margins are not sustainable and if they're going to grow, they're going to grow top line, they've got to drop the phone price and compete in china where that asp's not going to work.
first on apple, then on nokia, which i think has bottomed and starting to see progress. >> two good points. we look in the rearview mirror with both of those. looking forward what's going to happen. we do have someone to cover apple. she'll make the call on that stock. i can talk about what's going on in the handset world. people were anticipating this happening and as the gross margin started coming down and the mix starts changing, it impacts how people will look at that stock and the entire sector. she's still overweight apple and for a lot of good reasons and new products coming out. so the point there is can they get the gross margin back up again, can they turn it around? don't always equate low asp to low margin. they can make a lot of money on the low end. you know, i'm not going to go into a bunch of stocks of the companies that do that. but nokia did it, for instance, for a long time selling phones.
they have better gross margins at the low end than the high end. >> if i don't want to invest in blackberry, what's your top pick? >> qualcomm. you back up one step and say who is in all of the -- not all, but the vast majority of the smartphones, qualcomm. >> thanks for stopping by. appreciate it. beaks, where do you for this trade? >> blackberry has momentum, but i would not be buying it here, i would certainly just be getting out of it, taking some profit on it. i understand what he's saying. i guess the problem that i have with blackberry is that once you're in and the apple eco system, it's hard to steal people away from it. i've talked to more people. this is anecdotal. >> isn't that what they said about blackberry a couple years ago? >> they did. they did, but the difference is -- >> the corporate world -- >> the evidence that people i know that have switched back to the blackberry are going back to the apple iphone in the last couple of weeks.
>> i think the big bull case, meaning a doubling in the stock is based on the ecosystem developing. meaning, you need app developers to come in there and start developing the applications like you do in android or the apple system. i think that's the real big bull case. i think on a pullback to $12 this is still a value stock, it's $5 in cash on both and worth something. let's move on to pops and drops. the big movers of the day. we kick it off with a pop. up 3%. >> people were jumping out of buildings yesterday and you got sanity back in the stock today, iron ore prices are probably trending around 130 where i think they'll stay and a stock you can own at that iron ore price. >> pop for the maker of ugg boots, deckers. >> jeffries raised the price target to 100. this was a darling basically into 2012, fell off a cliff. with the volume, i'd say you sell it, but feels like the stock bottomed in november and wants to go higher. i think it's worth a shot. >> pop for celgene. >> biotechs earlier, all of them near all-time highs. celgene included. health care, i agree with chris, the sector you want to be in long-term.
i'd say this is a little bit extended. i prefer amgen on a pullback. >> pop for the ipath. >> what an awful day for all the grains here. the usda came out and said that stockpiles were larger than everybody expected but still at very low levels. but on the other side of that, they're going to probably plant as much corn or more corn than they have since 1936. this is probably better for companies like tyson rather than being in. >> it's interesting. they announced earnings yesterday and beat by about eight cents on ebs. their investment in warnaco might be higher than expected, probably going to cost about 25 cents a share to earnings by year's end. that said, the company looks fairly solid, i wouldn't buy it here, the stock closed on the lows. >> a pop here for karlie the cow, a dairy cow recently sold at auction for an udderly
incredible sum of moola. >> okay, that took a second but it's funny. experts say the value comes from her tall and skinny stature and her unmatched udders. they milked those features for all their worth. she sold for a record $170,000. i cannot claim credit for that fine writing. >> that's -- first of all -- >> there's a genius. >> genius. >> well, obviously the queen rises to the top. >> eat more chicken. >> that song -- what is this song? in the background there? >> i don't know. >> it obviously goes with this segment, but i can't figure it out. >> terrible. >> if you're tweeting at home, please let us know what this song linkage to the whole story of the cow means. >> let's go to break. coming up next, it is the dow's best performer so far this year, why the bulls could drive shares of this major computer maker even higher. and defense stocks firing on all cylinder cylinders.
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transports posting their best first quarter since 1991, the index up almost 18% in q1 with airlines making up the majority of the top performers year-to-date. amr up more than 420%, delta's up 40% rounding out the top five, united continental, kansas city southern and southwest. tim, i know you watch them a lot. >> i do, and i've been astounded at 25% if you look back over the last couple of quarters.
i was talking to one of the best transport analysts and he was telling me what he looks at here at the end of the day with the housing recovery, these are not all that stretched. if you look at the outperformance relative to the s&p it's overbought. if you look at the fundamentals, fedex outside the airline sector where i think things are more sustainable, it's not an expensive stock, this looks good to me. >> let's move on and talk about the dow's best performer in the first quarter. and that would be hewlett-packard, the stock goes up more than 65% this year. can hp shares go higher in q2? let's take a closer look at the stock topping the tape with brian marshall. always good to see you. >> thanks, melissa. >> of you got a neutral rating on the stock, correct? >> correct. >> the risk to the upside and downside are equal even though the valuations are really low and meg whitman looks like she
means business at hp? >> well, i think it's pretty simple. if the numbers are going down, the stocks are going down. stocks going up in the short-term. i think the last quarter, you know, actually our numbers went up. and so can the company string together a good quarter or two? sure. but at the end of the day, i mean, i think they've got a lot of wood to chop left. clearly, they've got a lot of issues from a restructuring standpoint. i think it just doesn't make sense right now to be long or short the name. i think you've got to watch from the sidelines. that's the current view. >> you know, hp bulls will say, you know, this is a company in transition. yes, it's in a secularly declining area, pc business, but it's working on software very diligently. at the same time, software revenues are only less than 5% of total revenues compared to, say, let's say an ibm, double digit, correct? >> correct, yeah. so i think within what we refer
to as a four-legged stool analogy of next generation data centers, what's required, the key really is the software because it's the intelligence or the glue which integrates or binds all four of those hardware legs together to form one unified architecture and that's the achilles heel, frankly, they don't have much in terms of software assets. you point out it's well below 5% currently. there's only two businesses that are actually growing year-over-year at hp right now, software's one of them. and it's, you know, we calculate the organic growth is actually mid single digits year-over-year. so that's not great. and then the other one is networking. hp networking is the number two player behind cisco. that's growing pretty well. but every other business at hp is declining year-over-year, and the actual second derivative is actually increasing so the declines are happening at a greater rate going forward. >> real quick, brian, if china demand is a driver for a company like hewlett-packard, first quarter pc shipments were down about 8%, i think, globally with china as a main concern. does that set up hewlett-packard for a month from now when they report a lousy quarter? am i reading too much into it? >> i think it's going to be problematic.
half of hp's business today, about $60 billion is both pcs as well as printing. those are two challenged industries going forward in our opinion. and so, i think, you know, the fundamental trends speak for themselves and the direction of that business is headed down. >> brian, thanks for your time, have a great weekend. >> you too. >> mike, let's check in with your for options action. how are the option traders playing in the second quarter? and how would you? >> i think they're treating it skeptically. the overall, about 70% more bearish bets than bullish ones, that would mean put buyers, call sellers. there was about 20% more volume than calls, 26,000 versus about 22,000. and the most active were actually the may 24 puts. looks like there were buyers of those over 7,000, traded at an average price of about $1.30. buyers would expect the stock to be below 22.70. that does come before earnings. obviously they're making bearish bets, the stock could drop over 5% in that time. >> let's move on.
hp may be the dow winner in q1, let's talk about the buzz kill. and that would be caterpillar, the worst-performing stock on the dow so far this year, down about 3%. what does the second quarter hold for c.a.t.? >> listen, we've talked about this. i know one of his big premises, the fact that how does a company like caterpillar, which since february of last year has totally underperformed the broader market? this was $116 stock, i think february 2012, trading $86 now on a tape that's been teflon. if c.a.t. hasn't rallied over the last 14 months, what's going to make it rally now? i'm not certain it's going to. i could see caterpillar even with the tape moving higher. >> well, let's factor in the whole corn move, right? because if they're going to plan even more corn, you would think that would be a good thing for a deere and caterpillar. >> well, deere's a little more levered to the u.s. agriculture. caterpillar trades more on the
china story and the miner story. and we've seen the commodities that have done poorly. i think that c.a.t. will be challenged especially since china's trying to curb the properties and cutting back on that shadow banking. it's going to be harder to put the numbers up they've been expecting. coming up next, the s&p may have hit a new high, but over the last month, defense stocks have done even better. jane wells tells you whether a danger zone may be ahead. plus, an extended version of hold 'em or fold 'em.
sacred cow, says one analyst. and most expect to see flat to negative earnings growth. now, defense usually underperforms after a presidential election. but sequester is a whole new ball game. stocks have held up pretty well, but b of a merrill lynch believes that's a mistake. quote, sequestration is not priced in. longer term, cowan & company predict lockheed martin could see cuts to future order ps for the f-35 and the little combat ship. north korea, though, is making threats and crt capital report says beefing up missile defense in alaska could benefit orbital sciences. that's your q2 channel check for defense. >> oh, there you are live, jane. >> there i am. >> wow, the magic of tv. >> i changed my clothes like that. >> very nice outfit, jane. i've got to ask you because the last durable goods report that came out, 68% rise in defense spending because a lot of orders were put in just jammed through
the pipeline. is that simply pull through from the rest of the year? and doesn't it balance out so they get the revenues? it's just earlier than expected? >> you know what? that's hard to say, melissa. only because the last quarter's earnings really surprised the street. and already everybody was factoring in a sequestration, defense cuts and all this. and yet the outlook was so dire during those calls for the most part that i think it took analysts offguard. i think it's really hard to predict what's going forward. yes, a lot of these companies have already prepared for downsizing. a lot of these front-loaded orders are in the pipeline. you don't turn off the f-35 now. you see ratian consolidating units. but i think it's a question mark on what their outlook will be when they get on the conference call. >> i'm curious because i've been surprised with the stock's performance, i think you've been. what do you think the bull case is going forward for these defense names?
>> oh, you know, it's hard to say overall i think it's a company-by-company basis. this whole north korea thing, that has come out of nowhere suddenly. we're beefing up our missile defense in alaska. that's good for these companies, orbital sciences was picked by fbr as a top pick thinking that it's a rocket and target business is what it does for missile defense could now be 25% higher than previously expected. so and, of course, china's building an aircraft carrier. though it doesn't have that fleet to protect it. those are the things as we switch the pacific that you have to watch and which companies are doing things that will be able to respond to that? >> jane, we'll leave it there. thank you and have a good weekend. >> you too. >> and today the philadelphia defense index hitting a new 52-week high. let's play the good, the bad and the ugly with guy adami tonight. first the good, last month guy was constructing a trade on a home improvement name. take a listen. >> regardless of the housing market we're in, it's a sweet
spot for home depot. they always overdeliver and their balance sheet is teflon. not only is the dividend secure, but look at the $17 billion buyback they had today. improving margins. >> nice call by guy, home depot on a tare, up another 9% since that call. what do you do? >> giddy-up. >> we talk about it. >> yeah. >> i like home depot. >> you hold it? >> oh, i'm sorry. >> no, that's not the game. but people want to know what to do with this. >> screwed me up. stay with it, stay with it. >> we're going to mix things up a little tonight. instead of doing the bad right now, we're going to do the ugly. guy and tim got in a street fight over best buy, here's what guy had to say. >> i think the consumers have left best buy, they show up there to do what you do at barnes and noble, go up, take a look at things, walk around and buy things online. they're going to get more revenues, but come at the expense of margins, they'll sell lower end products.
>> well, best buy is the second-best performer in the s&p 500 this year. shares have popped 31%. >> i know. that's ugly. >> ouch, that is ugly. >> that's ugly. and i've been giving him his props. >> good job. >> oh. that's the bad. >> that might be the ugly right there. >> what is that? how did you guys -- >> love that. is that a hidden camera? >> love that leather jacket. >> that's a slimming dress. >> that vest is going to show off the pipes. >> music is fantastic too. >> what's the name of that place? >> that was a forever 21. >> forever 21. right down the street. what did i call it? >> you called it german submarine. >> you know what, i was shopping. >> second generation. >> i know how you got it. >> the mannequins. >> with the cameras for the eyes. >> yeah, sure. >> all right.
coming up next on "mad money," is your paychecks, paychex your ticket to earnings? and a profitable inside look when he talks to the former ceo of a medical power house and the current chairman of avon, all that coming up top of the hour on "mad money." coming up next on "fast," we're kicking off the regional finals where your tweets help nail down the winning stocks. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪
time now for "fast money" madness. we start out with 64 stocks from four regions and have whittled the competition down to eight names. tonight, we kick off the regional finals which will determine the last four stocks to remain standing. let's start off with the first of tonight's match-ups comes in our technology region between two heavy hitters. number one seed google and number two seed ibm. where do you stand on this one? >> ibm is a name we've loved for a long time, but i fear it at this 212 level. i think there might be head winds in store. there used to be a lot of clarity. google's going to have ups and downs, a lot of swings, but i think in the end, the swing will be higher. i'm going with the goog.
>> the goog. all right. >> i agree with guy in terms of google. it's going to be a rocky ride. but they're developing applications in products in areas that are so far unconquered where ibm is a much more stayed environment depending on revenues for almost half of the revenues. given what we've seen from oracle and the global weakness, i go with google. >> i like what google's doing in mobile. mobile search has actually grown for these guys. ibm has a lot more competition in this space where they picked up a lot of their low-hanging fruit in software. you've got to go with google because this is a stock that could really surprise people. i say look out in 2014 for google but for now we'll say 2013. >> we have three for google and beakers, your vote really doesn't matter. >> that's pretty much always the case. >> but i'll ask you. i'm curious of what you think.
>> that's fun, you know, i'm not going to add anything great. i'm going to say google. but my pick on google is more about not wanting to be in ibm, especially after we saw from oracle, red hat, on a relative value play, i'd much rather -- >> he added a lot. >> he added a lot. >> we value your opinion, bk, we value it greatly. as for the viewer, doesn't make a difference because it was a clean sweep here on this desk, and you all out there -- >> the smartest people in the room. >> the viewer, that's the thing. >> ibm. the winner here, google, triumphs in the technology region. >> move on. >> let's go on tonight's second battle, this time in the health and home region. number 11 seed ebay which has upset several higher seeded names so far in the competition. call it cinderella up against insure r number five seed disney tonight, once again we go to the traders. so, beakers, your pick. >> i don't know much, but i do know that people spend a lot of money on their pets and their kids. and disney has the kids area wrapped up, not only that, they also have content and content is king in this world here.
i pick disney. >> tim? >> couldn't agree more, couldn't be more one of those parents who got back from disney a couple days ago. >> anyway, love the lucas acquisition, love exactly what beak's saying, they control content, which means they own you through the life cycle. again, back to the princess. >> i have nothing new to add on disney. i like walt as much as the next person. i think on ebay, though, the problem with the stock is that it's a paypal business with an add-on legacy business that's not growing. channel advisers had a report last month that showed online sales are lagging significantly year-over-year, especially when compared to amazon. amazon seems like they're eating ebay's lunch online. go with disney, as well. >> i'm mr. irrelevant. >> yeah, basically. >> from beakers to me. >> yep. >> i'll take ebay because i plan
on for the first time in my 49 years on god's green earth to use that ebay thing. >> what are you going to do? >> i'm not sure. >> do you know how to use it? >> no. >> it's a first for everything. >> ebay, but not that it matters because disney wins. let's see what twitter thinks. >> you picked ebay. >> guy and the viewers picked ebay, but advancing in this round is disney. disney's the winner here. >> why is disney at home and health? >> ask the executive producer john malloy who formulated these brackets. what is home and health? >> i think he made it up. >> but anyway, you did a good job, john. to see the pullback of all of the stocks in play in our competition, log on to email@example.com and you can get in on the game by tweeting us, tell us which stocks you're picking by using the hash tag madmoneymadness.
>> the audience is the fifth trader. >> love that. >> yes. >> very good. >> there are winners and losers in this world, people. >> not everybody gets -- >> this binary world. >> yes, sometimes it is. still to come -- >> no, all the time. the viewer tweets lighting up our twitter feed. we trade them live next. carfirmation. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.
emerging market stocks having a rough start to the year heading for their worst first quarter since 2008 dragged down by china. take a look at the etf down nearly 4% this year versus the s&p 500 which is, of course, up 10%. >> underperformance of 25% if you even go back, you know, nine months. and this is a story we've been talking about a lot on this show. talk about emerging money. the reason they're underperforming on an index level is because china. china is a major part of the weight. if you look at it, it's optically a little bit misleading. emerging markets if you look at vietnam, indonesia, turkey, the best-performing markets in the
world. what does this tell you? that the markets have a lot of hair on them. you're getting more government involvement. and places with a domestic consumer story are doing better. the places i want you to play going forward are the places that have been beaten up like utilities. i talked about brazil. places you can buy big companies are paying dividends. i think the consumer names and emerging are very expensive here. be careful with these evaluations, this is what people have been buying. >> give us one ticker. >> if you want to look at some of the markets that we think as a country, thd gives you thailand, we talked about the tur last night to play turkey which got the upgrade, all places interesting and places where i think you have to dig between the surface. and watch out for the heavy indexed names because they're the ones that will underperform. >> you tweeted, we traded. let's get to some of your tweets from our crew today. what's up with apple? positive momentum touched 740 and now a brick wall. >> spinal tap, of course, thank you, good call by me. >> spontaneously come bust. >> listen, dude, the tape's been
a monster. it's telling you something. mel and i stood over by that plasma, though, and showed you the down trend it'd broken up through. and mentioned it's going to continue to go lower. you've got to own it until it breaks back through that line. it's painful, i know, but that's the way you trade it. otherwise you move on to greener pastures. >> right. >> too late to buy puts on the fxe, does it continue to head lower? new positions today. opinions? >> yeah, i'm long january 14 put. i would go further out. i think europe's a long-term trend. you're going to see the dollar go higher over time. the european banking system is twice the size of the american bank system, $35 trillion if you count all the balance sheets up. any type of concerns on the banking stresses i think is going to cause a significant impact on the euro. >> all right. bk, this one's for you. they're listening to the top of the show. are you still wearing the bear suit?
>> yep. since the top of the show. still wearing the bear suit. here's the important thing, though. if i'm short the s&p, i trade about 40 to 50 different markets in any given day. so being short the s&p is only 140th my risk. if you want to be short -- >> are you serious? >> yeah. >> so they're all equally weighted in your portfolio? >> by volatility. the more -- my position size is based on how volatile it is. but they all give me the same amount in my portfolio. so my point in that is it gives me the ability to watch the market go up maybe 1% where i think we get up to 1,576 and still hold on to my short position. >> when you're wearing your bear suit at home and -- >> the -- is anyone else around? are you just alone? how is that going on? >> yeah. >> all right. now, the markets are closed tomorrow. tomorrow is good friday. so we have your first move for monday when we come right back. stay tuned.