welcome to "lunch money." i am adam johnson. in sports, paper play. northwestern football players vote to unionize as the entire ncaa watches. today's investor, warren buffett response to david einhorn. gmt tire, for this time, not . water, water, everywhere. the challenge is cleaning it and then you have to get it to the people who need it.

how i hip-hop group is the revolutionizing how you are going to pay for usage. let's kick it off with what everyone is talking about, when you're president or anyone giving a news conference, you have to be quick on your feet. >> i absolutely would save mr. putin if you were drowning. i would like to think if anybody is out there drowning, i'm going to save them. to be pretty good swimmer. i grew up in hawaii. i'm a little out of practice. >> a little out of practice from answering questions like that. the president was asked if you would save a drowning vladimir putin during a joint news conference with the president of south korea. mind you, the country is mourning the loss of hundreds of people in the sunken ferry off the korean coast. needless to say, this was very awkward. in fairness, the reporter who asked the question was merely echoing a similar question that was put to president vladimir putin last year -- last week.

his answer, well, in addition to intergovernmental relations, there also personal relations. i don't think of a close personal relationship with obama. so they agree, but let's be honest, president obama does not enjoy the playful relationship that his predecessor george bush had with putin. and the current tension in ukraine and the sanctions, that doesn't help. >> i think is important not to anticipate the targeted sanctions we are applying now necessarily solve the problem. what we have been trying to do is continually raise the cost for russia of their actions while still leaving the possibility of the moving in a different direction. we will continue to keep some arrows in our quiver in the

event that we see further deterioration of the situation over the next several days or weeks. the tension is growing. another checkpoint outside the black sea port of odessa and southeastern ukraine injured seven people earlier today. they say unknown men threw grenade at the checkpoint which was manned by pro-regrade he and -- pro-ukrainian activists. new threats prompt it for mr. putin. >> this is simply a punitive operation. of course, it will have consequences for people who take decisions like this. it also includes relations between our state. we will see how things will develop and draw conclusions based on day-to-day realities. >> meanwhile, the top diplomats from both countries seem to have

dropped this whole diplomatic thing. survey live off says the u.s. ash circuit lavrov says he was is distorting an agreement by making unilateral demands on russia to disarm pro-russia militias in eastern ukraine. he also said secretary of state john kerry's tone was unacceptable and prosecutorial and he criticized russian state tvs coverage of the ukraine situation. used and is being used as a pawn in geopolitical games. every time the international situation is aggravated, they tell us we have to solve everything alone, said everything depends on us in ukraine. we are flattered, of course, but a state original significance cannot manage everything, so we stand for collective actions. kerry means john business, too.

that is him with his dog at work yesterday, but don't let the cute little yellow lab full you. >> let me be clear. if russia continues in this direction, it will not just be a great mistake, it will be an expensive mistake. already the international response to the choices made by russia's leaders is taking its toll on russia's economy. prime minister medvedev has alluded to the cost russia is already paying. even president putin has acknowledged. it. >> president obama says he is ready to pull the trigger. >>

it is a little private, that she's doing something for her dad, right? got it. >> should probably handle that better than her husband it with a whole drowning question. when the event ended, mrs. obama gave the girl another hug and reached back to grab the resume off the table. just another day at the office for the obamas. whyre going to discuss

ford. potentially changing college athletics. what is at stake. that is coming up. all in a days work, the first lady showed up last night on "parks and recreation." >> you know how i feel about chicago. >> you're from chicago, so you like it. >> and we need passionate people like you. they get hundreds of millions of visitors each year. are you nodding because you agree with me? >> i agree with you on all things throughout history and through the end of time forever. you and grant worked together? >> we do. getting kids outside, rock climbing, hiking. >> that is incredible. rate work. i'm sorry i'm talking so loud. my apologies. i hope you take the job.

change happens one person at a time. good to meet you. ♪

very sports, today is a big day for college sports. northwestern university football team is voting on whether to form a union. last month a national labor elections board regional director ruled their employees ineligible to form a union. the outcome of this vote will have huge applications for northwestern. they could divide the team and get some players against the school and coaches. they could shake up the $31 billion business of college sports. the president of the ncaa is not too happy about it. >> is so fundamentally changes the nature of what college sport is about and blows up what is one of america's iconic activities. i think it winds up in the supreme court. >> the ncaa's argument, it has been athletes get tuition, room,

and board and above all the get an education, in many cases, for free. the revenue helps fund a lot of the other teams. say they well, they see none of it. they need better health care and many times they don't even have enough food to eat. >> there were plenty of times where throughout the month i didn't have enough for food. 170,000 seats, buying tickets to watch us play. it is tough just knowing, being aware we had just won and had a good game. you go outside and hundreds of kids are waiting in the tunnel, you're taking pictures and signing autographs. i walked back and reality sets in. i go to my dorm room and open the fridge and nothing is in there. what just happened? why don't i have anything to show for what i just did? .> that was aaron foster

he played for university of tennessee. thehe is a pro bowler for houston texans. he is not the only one who has gone hungry. >> i don't see myself so much as an employee, your jersey may not have your last name on it, but you want something in return. sometimes it feels -- i don't feel athletes should get hundreds of thousands of dollars. there are hungry nights, that i go to bed and i'm starving. >> that was ucon basketball player. a few weeks before his huskies won the ncaa championship. a week later, the ncaa approved a limited meals for all athletes. that is one move. jeffrey kessler once more. he wants a lot more. he is suing the ncaa over rules

that limit the amount of financial aid players can receive. we spoke to him this morning on "surveillance." >> all of these struggles are about the same issue, which is right now in men's basketball in an football, you have very, very large amounts been generated in one amount to businesses and you have everybody sharing in those benefits except the very people -- the athletes -- who generate that money. >> but what is wrong was of the leading the portion of their sharing be a scholarship and education? >> in any other business, and we're talking about business -- university of texas makes over $175 million a year just from football. that is a pretty good business they are running. they have their own cable television channel. in any other business, no one would say -- because it is

illegal -- that the competitors can get together and say, well, the workers will only make this. fix the waves. that is what this is. >> share the wealth. >> that's right. we are not seeking to mandate anything. market.eeking a free let the schools decide if a school was to put aside money for a player every year and say, if you graduate, i will give you a bonus and i will give you extra money for staying in school every year, what is wrong with that? the ncaa right now would say, you can't do that. should college athletes be able to form a union? 60% of those surveyed in a new poll say no. ust up, an investor tells how to be a great many

miniature. his words of wisdom are coming up. and how to do clean up dirty water. a new venture we will tell you about. this is what it looks like when you're in a sandstorm. reality for people in china. sandstorms have grounded flights and in some cases visibility has fallen to 50 yards. that is half a football field. ♪

>> time for little investor talk. there's been a lot of talk of a tech bubble recently thanks to

in part david einhorn. he warned it is the echo of a previous bubble. are we going to witness a pop? ly says no.ive >> the word bubble, and this will come up with our guest, it is a contentious word. markets are wrong. i am in the middle. i think there have been a few bubbles, but they are rarer than the market tends to think they are. >> where do you think we are? >> i think there's a difference between an expensive market and a bubble. when you say something is going to return less than it used to because it is expensive, that doesn't mean it will crash. i think we are poised for lower returns over the next 10 to 20 years. >> the one and only mr. warren buffett agrees. he did not seem too worried about it earlier. >> there are very few tech

stocks i want to buy at the prices they sell for, but it is not remotely like the bubble existed 15 years ago or whenever it was. seeing total craziness or anything of the sort, but we're certainly seeing some companies go for high valuations and private transactions a pretty fancy prices. but i don't know those companies well. it is not something you can just go with any piece of junk and call it dot-com and sell it at huge prices. >> although, we have had that happen. >> we are not there, but i don't for myself tempted to buy anything that's coming out. >> you don't need warren buffett to tell you every that has some risks. howard marks says sometimes you even need to be wrong. everybody dares to be great. who would not dare to have great performance? the real question i ask in the memo, do you dare to do the

things you have to do to be great? >> what are those things? >> do you dare to be different? do you dare to be wrong? and do you dare to look wrong? you have to have all three of those in order to have a shot a great results. >> let's go into more detail about what it takes to be great. what do most institutional investors, money managers, what do they do and what to do want to stand out from the rest of the crowd do? >> the big question is, how much of your time, effort, and -- and will you self-esteem will you risk in the effort of trying to be right? and how much will you spend trying to avoid being wrong? they are two different things. in order to have a good shot at being really right, you have to be a shot at being really wrong. example, whereor would one say, we're seeing people try hard to get it right, during to be different? >> well, i think the people who

are buying the social media stocks at the high prices are trying to be great. they're crying -- they're trying to go from 10 to 40 and now they want to go from 40 to 200. i can imagine they think it is a low risk strategy. most people driving look at the rear mirror and see what is happening. >> are they afraid not to be on the train? last year when people thought they were. they were not long on the market, they piled in so they would not underperform the s&p. >> there is the fear of being out of step is a great fear. perhaps the most corrosive of all human emotions is having to sit there and watch other people make money when you're not. if you're a professional and other people make money and you're not, you could lose your accounts, your job, whatever it might take. >> there is no question you are

right. you feel that way and lots of people feel that way. then why is it that the majority -- the vast majority of investors are not willing to take those risks? >> well, because if you take the risks to try to be right, you know you're not going to be right 100% of the time. you could be wrong. if you are wrong a few times in a row, then maybe use your job -- lose your job or your client. >> is it because they are chicken? worried about losing their jobs, which is a legitimate fear for many people. or is it because in some cases, or commendation of the 22, their clients won't let them -- pension funds come endowment's, the folks who sign up institutional investors to manage the money one great returns. >> they don't want great returns, they want good enough returns. most of our clients in the professional world constrain us.

they say you can only have permits for industry, per country. we spent a long time negotiating these constraints. they don't say, if you think china's great, put all the money in there. they say, you like china? you can put in up to 6% if you put in all the money, you could be wrong. i say in the memo, and the one thing i've carried around that occasion a return of the topic was my conviction based on my experience. the main role among investing dotitutions, we would never so much of something that if it turned out to be a mistake, we would look bad. now, that makes perfect sense. nobody wants to look bad. however, you have to accept the converse is, we would never do enough so that if it turns out to be a good thing, we will move the needle. the two have to go together.

>> you can hear more from our on bloomberg.com/tv. coming up in company, how to get past that big earnings disappointment. and the planned to sell only one copy of this album. ♪ >> select our >> i mentioned tech earnings. amazon is the big one. shares are slumping to a six-month low as the spending

spree curbs profit. jeff bezos has been putting money back into the business, hoping to maintain the growth in shares. more on the markets in 30 minutes.

this is "lunch money." fully digital. we are everywhere. i am adam johnson. brazil, protesters took to the streets after young man was killed in a gunfight between drug dealers and pulleys. officials acknowledged the young man may have been shot by police. there was a power struggle between gangs and city officials. australia and new zealand are commemorating their version of memorial day. services, include

marches, and they honor those who have fallen in the line of duty. 80,000 people visited the shrine of remembrance in melbourne. it was special this year including visits from prince william and his family. is on the cuspii of the fastest canonization in recent history. he is on a double ballot for sainthood with pope john xiii. if approved, they will be the first double pope canonization since the middle ages. finishing up the earnings parade, ford missed analysts expectations. wiped out $800 million worth of profit. matt miller broke it all down with betty liu. >> $.25 a share is what ford came out with. investors and analysts were looking for $.31 a share according to our survey. it is interesting to see even

when you add in the additional items, when you just look at the bottom line, net profit, they're still down 39% from the same time a year ago. $989 million they made net. said, $400is, as you million in warranty and repair costs. $100 million in costs for the weather in north america. over $300 million in costs from the venezuelan do valuation. a lot of the same thing sitting other automakers are hitting ford as well. for some reason, they just did not telegraph as well to their analysts. i don't know why. >> well, that happens from time to time. a lot of focus is on seo alan mulally and when he will turnover his reign. >> that has been a story i think ford wishes had not stolen so much of the focus in the first quarter and is definitely stealing a lot of focus. people will be talking about it all day, even though it doesn't

have much to do with earnings in the first quarter. ford is in an interesting place right now. they're introducing 23 new models globally, and that will cost them a lot of money for cos. they will be below what they made last year. things like retooling the f150 factories cost a lot of money. that with a number of different models. it is important to have a steady hand on the tiller right now. as alan mulally prepares to exit, i think bill ford is hoping very much this can be a smooth ceo transition. that has not been the case in the last few ceo traditions. >> he also spoke with bob shanks about the company's plans to move forward from the big earnings miss. >> i think the fact we are still

generating positive cash flow despite what is happening in emerging markets, despite increasing investments for future growth, which is what all of this is all about, a set of year, if you will, for stronger results in 2015 and beyond, that is encouraging. >> in europe, d.c. real recovery there? -- do you see real recovery there? yep pretty stagnant market share. does it look like it is getting better? >> absolutely. europe is clearly in recovery mode. the industry level is rising a bit faster than we had expected. it increased our guidance for the full year in terms of industry volume for europe. our share was up. we are seeing positive results. we feel positive about the turnaround there. we're clearly on track for profit in 2015. >> china, your growing like gangbusters there. coming from a lower bar than your competitors, but you continue to see high double-digits?

>> i think we will still see continued strong growth. we still have four plants under construction in china, so there is capacity coming on stream. there are more products we will be adding to the portfolio. they're being well -received by customers. >> all in all, with the exception of investors looking at today as kind of a negative day for the stock, you're set up really well for when mark shields takes over as ceo, right? >> we are set up very well, not only for the balance of this and ithe going into 2015 think we feel very strongly about the guidance we have given. in the call, mark mentioned for bith america, with a little of luck and hard work, i think we might be able to get for the top half of the margin range. >> talk about hard work. getting water cleaned and in

getting it where it is needed most. how innovation is bringing drinking water around the world, coming up. and pop, we will hear from the clan's plans-tang for the new album. jumpsave cameraman base off the tallest building in the world. look at this. unbelievable. ♪

is "lunch money." we are streaming live everywhere. online, your phone, tablet, even apple tv and now amazon fire tv. today in innovation, all about water. we're going to start with how to clean it up. by robert kennedy junior sued the california department of transportation for

contaminating water along the pacific coast. what resulted was a partnership with a company using technology to make dirty water safe. >> there were thousands of storm drains along the california coast from the highway that were witharging toxic water viruses, oil, grease, hydrocarbons that were getting into the waterways, onto the surf beaches, kids getting sick. we sued them. we won the suit. it is a multibillion-dollar judgment. the settlement required us to look at technologies that would allow the state to remove the toxics from their bathing beaches. we surveyed a number of technologies, and came across the leading category technology that is essentially a sponge technology. molded in any shape or size. it is a single piece. we can mold it in any shape or size.

this demonstration really is a civil test tube demonstration. i will take some new york city water, which we all believe is andn, and used motor oil contaminated so you can see what would be running off our streets like body was talking about in california or it can a steel mill from an industrial facility or oil and gas operation. anywhere that is contaminating water. the idea is to clean the water well enough so you can swim in it, they then it am a fish in it, or reuse it in an oil and gas application. is is just a test tube demonstration. this is just a simple to menstruation or you can see the oily water going into the smart bunch. >> that is amazing. absorbed, what is absorbed is personally bound. you cannot squeeze it back out. it will not leach back out. go to a waste facility

burned as a fuel. you can use the power at the end of it. >> just so people can see, the residue there stayed at the top. frontiers the final for clean water, because when we passed the clean water act of 1972, it made all pollution illegal. elf onally focused its plans. there's a lot of imagery attention. people are looking to these kinds of solutions. >> cleaning water, that is the first step. then he have to get where it is needed. a new technology for developing countries of little infrastructure. here's frank says no. proving safe drinking water is one of the key goals and one of the greatest challenges a lot of people face. falls predominate

leon women and children. one of the underlying factors of non-attrition is not just access to food, but access to water for preparing food. if we can improve or lower the cost of water delivery, then we can bring access to water closer to people's homes. >> many people have to pay for water and don't were wasted. >> you get a smart card. you go to a shop and use a mobile payment, then you can go or send your kids. you start taking water into meters how much you consume. when you run out of water, it turns the tap off. to sue the latest ideas on

bloomberg west 6:00 p.m. eastern and 3:00 pacific. you can also go to planetforward.org. coming up, why you're seeing more records coming out on vintage vinyl and for millions, initial plan to release a single copy of a new album. ♪

this is "lunch money." every devicee on imaginable. i am adam johnson. in pop, we're all about music.

vinyl is one of the hottest growth areas. heart is like macklemore, it has become a powerful marketing tool. to one of thewent few factories where records are still made. >> long before there were digital downloads, this is how you made an album. a rainbow records, the recipe hasn't changed. final pellets melted into gooey bubblegum. >> heating up the dye, the hot vinyl, and hydraulic pressure goes under about 1800 pounds of pressure to squeeze it out. kind of like making waffles. dozenre inside just a facilities still pressing records. there were down to producing only 5000 lps a day. >> where 22000 and 25,000 a day. >> 25,000 here a day? >> six days a week.

>> last year, 6 million lp's were sold in the u.s.. 144% growth in four years. compare that to 54% growth for digital albums and a 44% drop in cd sales. if you want to know why it is hot, look no farther than rap artist macklemore. a year and half after the release of his hit album, rainbows busy manufacturing the vinyl version. there's a digital twist. >> when you buy the physical today, in certain cases like this one, they will give you the digital copy as well. >> that is common. >> they made it available at retailers like whole foods and urban outfitters where it quickly sold out. >> there are not only selling those units, but they have a 12 inch by 12 inch picture of themselves in a store that speaks to their brand. >> with music fans feeling

nostalgic, rainbow is scrambling to meet the new demand for final with old equipment. presses 35record years old and album testing takes place on a vintage turntable. >> this was converted for vinyl. vinyl?as converted for >> that tells you where we are going. >> talk about turning things upside down. hip-hop wu-tang clan will release only one copy of his new album. it is part of a marketing campaign that includes sending the only one around the world on a listening tour and auctioning it off, in theory, for millions. >> as annoyed as fans are about what we're doing, this is bigger than the fans. this is really a sacrifice.

also a silver ring produced for the wu-tang clan. the concept of the one copy album came to me three years ago when artist needed a wake-up call. i said, why not? in order to take a few steps forward, let's take 400 years worth of steps back to the renaissance age and look at it as a commodity from creation to exhibition to sale. ari you're looking at for comingari and a honda except the price difference. because it is tangible. when it comes to music, it is not tangible. it is digitized. it is insulting to me that a song from great artists like jay-z or kanye west is a people value to a box of paper clips from the dollar shop. that is not sustainable model. easily sellust to it off to record company or brand were association, it compromises the integrity of the project. in this whole thing becomes a publicity stunt am a cheap

marketing ploy. that is not what this is. >> [indiscernible] >> i can't tell you. in a way that i would produce between 1993 and 1997. the glorious reign of wu-tang clan, the particular sound, grittiness. that is going to be corny. >> this one-of-a-kind album has inspired several fans to kickstart a campaign. they want to buy at industry beta for free over the internet. that is not exactly what they had in mind. from one pop phenomenon to another. nintendo's game boy turned 25 this week. just an excuse to play these really cool commercials that show even working guys love playing tetris. ♪

you don't stop playing because you get old, but you could get old because she stopped playing. ♪

up 56 past theg hour. take a look at where stocks than halfway through the trading session. we continue to have this pullback steady throughout the day with the nasdaq down the most as we got worse an estimated earnings from amazon

among others. we are also seeing downward momentum in emerging stocks. partdeclines there, in tied to russia. there was an unexpected interest-rate increase their and also s&p downgrading that country's credit as well. for a negative week as well. take a look at treasuries with those concerns about russia, about emerging markets, buying of treasury. 10 year yield going down. we're seeing some buying in gold today. gold separates longest inning streak in about six weeks. two days of gains over the past couple of days. futures and oil, we have been watching. we see oil trend lower. we saw in inventory extension this week. that is one of the things pushing down the price of oil. from commodities, i want to turn

back to stocks. adam johnson is looking at some current investment trends in today's insight and action. >> there's a big shift happening right now and you need to see it. here it is. seeing is believing. so far this year, looking at the ratio of basically value to growth. you can see value is underperforming growth by about seven percentage points. in early march, that completely turned around. now value is outperforming growth. what we're really talking about is the fact all those momentum stocks, twitter, tesla, take your pick, they got hammered. now all of the cheaper value plays, the ge's, 3m's etc., suddenly they are more in fashion. it was jason hussein does this chart. if there's something that really stands out, it is the highest of the high flyers being

repriced. we no longer just have that rising tide that lifts all the boats. you have to find stocks to buy. that is where value guys come into play. we took the value index within and we looked at withthose with p/e ratios under 15 times. earnings growth with at least 15%. they're cheap and growing. i will show you 8 examples. there were 23 out of those 334 we found. these are eight of the 23 that made our criteria. i posted all 23 on twitter. they are growing faster than the market, trading cheaper than the market. that is value that is back in

vogue. >> thank you. i want to take a look at one mover in today's session worth highlighting. visa. increaseported a 26% in second-quarter profit, but revenue missed estimates and the ceo said the stronger dollar will continue to weigh on earnings growth growing forward. we will have more on the markets in 30 minutes.

>> welcome to "bloomberg west." hear fromnding by to spacex ceo elon musk who is holding a press conference momentarily that was announced just last night in a mysterious e-mail to reporters, all happening in just a few moments. we will take you there live. is it game over for google plus? their efforts in social networking have not been wildly popular and now google plus googlect is leaving but says its strategy isn't changing. first, check out the top tech headlines. shares of amazon are down abo