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tv   Fast Money  CNBC  March 15, 2012 5:00pm-6:00pm EDT

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it has changed quite a bit you want to talk about that among many other things. that does it for closing bell. thank you for watching. >> fast money starts now on this thursday. we had three major milestones. >> we have. what a day. >> i'm scott wapner and here are the top three trades. milestones and s&p. the blow off top in what should you do not. tiffany and ebay. what other top flyers should you hedge in your portfolio. we have the bullish and bearish sides here on the desk. live from the nasdaq, this is fast money. start trading and get to the market. stocks continue their climb higher. major indeces above key round number levels today. buy signal or short signal?
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>> neither. it's nice that we can go back to 2008 and say the s&p hasn't been here since then, but we are rallying for the right reasons. there is growth in a better place and qe 3 with the strength and that strengthens the dollar. s&p around 14, 14.5 times earnings. it's also not a terribly expensive lace to own it. with the macro, you mentioned china. we will talk about that. that's people's biggest question here. no one expects ee t print big numbers across the economic board. we controlled the risk in the short run. we saw the transports which was encouraging. we have seen the amazing thing that i don't think we would have expected a rally like this without the participation. materials are still lagging here. >> we have seen enough. you shorted the spiders. >> i also shorted the full
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disclosure at 1388 on tuesday and today at 1401. what we are looking for, you have to have a catalyst. options ex-operations and we are looking at another cpi number that is up year over year. when you look at that, i'm looking for 2% downside here on the s and p to 1372 that. should skmoeld if it doesn't, that's my asset for once. >> what are determines whether tomorrow's rally continues. do we have to look at the treasury and see that that this rise in yields pulls a bit? >> i don't know if it's data driven or just the idea of funds chasing performance. there is probably a little bit of that last year and a difficult fund for hedge funds to match the performance and now it's happening again and maybe as we get to quarter end, you start to see the buyers. >> keith brings up a good point. this will lead us to a hangover
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monday and tuesday. i'm curious about the levels you are choosing. we have been talking about the s&p at different levels. that's a great way to trade. i'm curious how the pick the spots. >> that's right. when we think about managing risk, we think about the risk of the range. i'm tasked with not losing money when you have these. we had big drawdowns from these levels. 2% to 3% is what you are looking at. the options are definitely an important point and to the point on performance, you cannot under state the performance pressure. for three years people have not been paid and now they are told. you are sitting at the seasonal shift. are we going to peak again? we could. that's the big risk. >> you have to be careful if you can get a rotation as well. you get run over on the short. >> that also happened last year.
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this was the sucker move last year. treasury yields spiked and everyone said i have to buy stocks and growth slowed. that is what we believe happen when is oil is tracking anywhere above 96. never mind over 106. growth slows as inflation accelerates. you can see that and that was a february number. we are starting to see it worldwide. tim was pointing to the industrials. you are not getting clean cut signals. >> perfect segue to you. >> and you are clean cut. >> i am clean cut. >> i wouldn't go that far. >> you shaved today. >> i shave is mondays and thursdays. >> they started the show and this is how we think it's going to play out. the banks will pass and maybe not -- they will pass and surprise people. maybe we will see this move to 14 and a quarter in the s&p and keith will respect this.
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potter stewart who is a yale grad said in 1975 at the hard core pornography is hard to define, but i will know it when i see it. i will know them when i see it. i haven't seen it yet. although we are making this move, we spike up to the 1420 or 25 level. >> the financials in fact. let's move on to the bounce for the banks after the stress test. bank of america topping $9 a share. sun trust up 9% in two days despite failing and regents financials up almost 14%. >> he likes his own material. >> you need to get him in a fast money show. >> i thought it was barefoot sanders. >> pornography. >> i know what you -- neither
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here nor there. google it. >> up 3 and 3/4%. maybe i was reading that wrong. >> let me talk about the financials. they had this one on called. rf sold off the stress tests and subsequently has gone straight up. i will say this. we have talked about this a number of times. what will wind up happening, a lot of people have piled in with beta and sort of avoided the stocks in the banks that don't have that much. usb has done well. i think what's going to wind up happening is people will start to scale out of the banks and tremendous moves and get back into the banks. that's why i think that usb is worth a look. >> what banks would be best here. >> bank of america is volatile, that's for sure. yp morgan is the stallworth. even with this run up, they are
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trading at significant discounts and probably not so expensive on a normalized earnings. i owned bank of america for a long time and it bounced, i'm not selling it. could it go down? absolutely. i'm not hanging on. >> can we get to a position where left year or even early this year despite the run in the banks, it's mostly people talking up the regional banks. everybody loves the banks, but they don't love the big bangs. will this with the year? >> on the money side, that's fair. the hedge fund community in particular, you have the mercy crush. if you among them now, you are seeing the community chasing them and you are under accumulation between people being overweight or under weight. that's a big factor and i think that supports the center banks. >> rpf.
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>> we are hearing the story telling which is it's cheap. i think that there is performance risk. there is a drawdown risk associate and there short selling opportunities. i wouldn't go to the banks and we shortened capital one. reason being, if jobless claims miss on one day, these stocks will go down. high r squared. >> what about the credit data? does that make a difference to you? >> it's better. >> no doubt it's better. >> the optionality, we have been bullish. >> does it read through to capital one? >> the big thing with the credit card companies, the r square to the jobless claims. that is high. not sure why we found it, but
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that's what we are looking for. they are not shorting it. we don't have a catalyst. they can be at thursday morning. you see jobless claims and there is a big seasonal factor and starting to move to the upside. >> the correlation. >> what you need to know with why the stocks move. >> quickly with the financials, people will be surprised at how they are printing money. watch deutsch bank and if you want to take a look at a place where you are not the environment and they would think otherwise. at least on a yield basis historically, you should be paying 8%. not to say that everything is okay over there, but the treasuries of these banks are borrowing for free and printing money and i'm sure the is better than people expect.
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>> talking about china, is that in a hard handing. steel production and real estate and factory output. they are selling off as a result. how are you trading this and do you agree with the argument that china is in a hard landing? >> she a highly respected guy. they are on the ground seeing a pick up in the property transaction and they are starting to move. i think if you listen to what was coming out of the people's congress, all they focused on was the downgraded gdp and the property sector with the blow ups. there is an increase in loans and they are coming back and the lull in demand will have troughed in the first or second quarter. it doesn't mean 2008. $600 million of energy, if you
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listen to ge, they add 600 gigawatts of power capacity in the next five years. the five-year plan. they are worried about it. the premier is worried about a cultural revolution and have to do everything to avoid that. the hard landing is missing the point that it can't. it's not tolerated right now. i think also the markets are looking at this saying this is what's holding back the names. that's why that's an opportunity to buy a lot of them. >> the bomb line is they will do whatever it takes. that's not a hard landing. >> they come back and steels come to mind and the call. if you want to look at a stock, look at the action today. btu made a 52-week low. they wound up closing higher on the day and closed at 3170 around the highs on the day.
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they bring it up because they traded two times normal volume and meaning today's low is lower than yesterday's low and we close on the high. we want something low risk and this stock is crushed. you have given the movement and peabody energy looks interesting. >> let's get back to you for a second. what do you want to buy as a result? >> they gave production guidance and everybody is aware of the major strike down in indonesia. this is probably 4 or 4 1/2 times ebitda. it's probably 3.5 times ebitda. best in the bunch, this is the name that people are reluctant to own. they have not traded well. it's starting to turn. you want to buy the miners and the metals if you think china is not dead. >> caterpillar and if you don't believe china is dead.
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the commodity names. >> the hard landing thing is hard to swallow. people trying to make headlines, hard landing is hard to see with this machine printing whatever they need. i don't think the short the equities. there is a difference between looking at chinese equities and what can happen if the dollar starts to rally. what i would expect to see is a deflation and the inflation. if they start to under perform, it would be long. if you get the inflation out of the way, you get the stock market to go up. that's a big deal. the stock market has been down for two years and again you want the infligz out of the way. if you see that and get that through strong dollar, you buy chinese equities and stay away from the bigger industrial stocks or metal-oriented stocks. >> erin? >> i think that the industrials are attractive here. they moved a lot, but names like
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this, they are still on this. upside calls to take money off the table. i like this. >> next up on fast money, consumer discretionary stocks on the verge of breaking out or breaking down. we will check the charge. more fast money up next. tdd# 1-800-345-2550 let's talk about fees. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee.
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>> welcome back to the market site. let's go to the charts for insight into the markets. chief market strategist at oppenheimer is here to talk technicals. >> i have a bunch of interesting things, but let's start with consumer discretion. much more than market year to date. we have to look at two time frames. this is five years since the all time high in 2007. just to show you the spread now between one of the parts that comprises the whole. this is one of the parts versus the whole of the s&p 500.
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now take a look at the second which is over 25 years. we reached a point by my work where this is unsustainable. in fact not only will we reach all time highs, but relative all time highs. the trade is looking at the xly. they show what i think is an unsustainable angle. i mean there is a lot to the version in technical work. when you get too far above, above, above, above below, below, the throw back or check back. we are too far above and they are doing something. >> they are a big thing over the last several days. what do you see in terms of that result? >> all the elements of distribution. the average again and this case is turned down for the first
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time in almost three years. poor relative strength and compared to the s&p itself we think considerably lower. 1500 an ounce. we close at 1650. >> the options desk tonight on gold? >> i'm inclined to go along with carter and i think some commodities could be one of the places you might want to look. there is so many long hands in gold, it's hard to figure out who the buyers will be. i think carter is illustrating and the people might be getting tired and looking to sell it here. >> the correlation between the miners and the metals, it's a fantastic place to be buying gfi and au diversified and a couple of guys i wouldn't be involved in is harmony. we are in a predictable trading range and we have those guys who
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are unbelievable. with the dollar strengthening for the right reasons and the miners are unbelievable profitable. with geld at 1650 and i love gfi. >> we are talking about frontline? what's going on. >> frontline is bombing out. a well-defined bearish to bullish. there is a case if one wanted to do a trade, index versus bullion. that's more than owning gold stocks. >> on the frontline, right? >> i look at something differently than carter does. with the way i look at it, what's happening in the business. there is a few things in front that are interesting to me. the business model is one that we are starting to see a big move in day rates. when you have the model, they should be large fixed cost and small operating or variable costs.
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you have a balance sheet that is levered and you have turbo charged earnings because of the rates moving. all of that excess goes to the bottom line which makes this a hugely volatile stock. i'm long because i do believe that eventually there will be a movement and i think the greatest tanker trader ever. they saw three years ago that oil tankers were not where you wanted to be. he was out early, but he does everything right in a bag way. they are starting to see a turn now. if they see it, i want to be where they are. >> i agree with karen. we are very invested across both ports and i would be curious if they think it's a remnant is something people watch. they have been at times an
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accurate front running leader to what's going on. it's also an erroneous red flag. red herring. it looked like it bottom and are you following that at all? >> following very closely. i concur it has the elements of a bombing out thing. the principal is just as karen starts to like it fundamentally and someone else is an expert starts to make judgments, that comes out. someone buying. the price suggested. this group is buying. >> good to see you as always. talk to you again soon. let's hit options action. >> i'm looking at btu. he was mentioning that earlier and they saw that reversal and there might be positive drivers here as well. bopping out here and see strengthening in the coming couple of quarters.
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this company has less exposure and we are in a seasonal strengthening president and go to chinese steel markets. thinking it might be bombing out and a good way to play is to collect about 2.05. that's about a 6.5% yield in only about 90 days. >> right. you can catch more tomorrow at 5:00 p.m. we will be here to follow the show on twitter. cnbc options to get constant trade updates. . >> we want them both actually. >> are this year's high flyers heading for a fall. we are trading tiffany's to ebay. more up next. so, how was school today ?
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welcome back to fast money. live in the markets, stocks up 17% in two months. the next guest said he doesn't accurately reflect the fundamentals. analysts for oppenheimer. >> how are you doing? >> good, thanks. >> the company reported a week of an expected holiday sales. i don't think the business is here and the stock set up a big empire. the longer term prospects. >> a lot of people got spooked and then the ship seemed to
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right itself. a lot of them were written off and it tracked with a lot of the other retailers. why did you think it was a one off thing? >> it's interesting through the holidays that tiffany was the outliar with weak results. >> totally. >> almost all indications said they held in really well around the world. i think that reflects a lot of factors. live annie had maybe merchandising issues and tiffany was overindexed or overexposed to the markets like new york and london. it wasn't playing in other categories that have driven better results. there were a number of companies that led to this weak holiday sales. >> the concern is not translating into your call. you haven't outperformed? >> it reflects my positive views. i am cautious here. looking towards the company's fourth quarter report next
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tuesday. i think it can prove the negative. >> it would ensue, yeah? >> if you have to break the time, you look out over the long-term. i would be buying tiffany. >> downgrade the stock and upgrade the stock. differentiate the timeline. if you look at the stock relative to why people are not selling it. they are going straight up and they have the same market cap asative 18. people trying to justify not selling because michael has this kind of evaluation and what's the story? >> tiffany has the performance over the last several weeks. it's mirrored the performance of other similar stocks. what the market may have and looking past it are unique issues facing tiffany. >> sorry there another luxury name you like better that hasn't had the stumbles?
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>> with my luxury, tiffany's hasn't had a luxury name. i like home depot and lowe's. with luxury, it's only tiffany. >> nice having you. talk to you again soon. >> just on the other side of that, today the guy reiterated and made it all the price and that makes markets. >> he gives you both sides in the same thing. >> not to defend him, i'm siding with you. the guy tells a story that the stock will go down. if you look at the chart, the lower highs from july. you have a little bit of a double bottom. tiffany's is okay and i think that the private equity gets on again, that would be a prime suspect. >> we talk high end. you talk about tiffany, but not
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others. >> that's the middle part of that and selling the high end and the low end. the deep discounters and buying the middle class. if we are getting this traction and you saw it in the jobless claims and the housing market, this is what you start. >> you want to say something? >> you look at the stock and tiffany's has dynamic situation with the precious metals valuation. if that were to strengthen and gold came down, the cost of goods maybe on a basis that could be an opportunity for you. that's one unique situation. that's why i wouldn't short tiffany here. >> let's stick with the concerns they have. ebay downgraded based on that. they see less upside than stocks up 24% this year. should we be concerned about other high flyers?
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we can take this specific valuation call. >> like apple? >> i don't know. apple or priceline and others that had good moves and getting up expensive and not on a valuation standpoint. none the less, they are expensive stocks. >> ebay is not cheap. even though it changed and it's much cheaper than guys, the pay pal initiative is something that i single driving any of the growth here. that has to be exciting and they continue to roll and get acceptance that has been fantastic. they fight trends and has upside. >> when tim said ebay, what do i say? mercado libre. very well. we talked about ebay a couple of months ago when it was trading 28 or maybe an earnings myth. we said pay pal alone is probably worth that.
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you have seen the subsequent move. you just said that that's a $40 price. that's sisignificant move from here. >> cisco enters the video wars and did k it compete with intel and netflix? more fast money up next. ♪ ♪ [ female announcer ] you're the boss of your life.
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welcome back to fast live at the nasdaq market site. who is righting apple's coat tails. we will learn more about it when it goes on sail and according to i fix it, they have a broad com base band chip. they give that stock quite a lift. they trade the whole ecosystem here. >> a couple of things. we said it for a while. that's the 38 level in terms of being at the top. the valuation is still the place to go. the stock still should go higher. we can play with the tower names. not that they have necessarily anything to do, but the name like american power has been on fire as well. out of the three, qualcomm and amt and broad com. >> we talked about samsung and what they have going on in china. >> this is the competitor's
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trade. they are cheaper than epile and the growth is better. they are more diversified and 37% across the flat screen. who doesn't own a samsung? this is where the guys are broader based. it's chasing apple to the top of the charts as well. i would argue it's winning and as a longer term growth path because of the diversification of the product line. >> don't correct me in public like that. it's compelling. you had me. >> what are you, struggling down? just our squares back. best buy which has been left for dead is all on the ipad today, but up 5%. stocks are still cheap. it's dangerous.
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>> own any apple products? >> apple product and hair product. a lot going on. what do you do with this thing? >> this thing what everyone has an opinion on. i don't know what to do with it. >> from the heavens, apple is the most active option we have seen for the last couple of months. it's interesting because for the first time, we are starting to see more. that combined with the price action in the stock, people have to remember and ultimately a technology company and they came out with the products and everyone talks about the valuation. months ago they come out with something else. let's talk about cisco with the $5 billion purchase and the video software. the big bet with shareholders. senior technology analyst with stern, forgive me, but let's tie
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up the apple conversation. >> let's talk to someone who really know what is they are talking about. bernstein raises the price target and piper is at 7:18. the high conviction list at deutsch bank. stock hits 600. at what point do you become less bullish? given the continual increase in the shares. >> the stock his a huge move and it's vertical. i think the thing to look at after product cycles, what was mentioned earlier. you have to keep on coming up with products. it's obviously ipad and the new ipad or ipad 3. we think in the fall time frame, there will be a new iphone.
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this stock as much as it's run, we will likely continue to work. >> at what does it have to reach where you take it and say it's getting expensive for my taste? >> i think -- >> what's the number. >> it's hard to say. the reason why it's hard is the numbers keep on moving higher. the street can under estimate the earnings potential of apple. it may look expensive, but they launched a new product. the brand-new product cycle. 20 to 30%. the stock looks cheap. people thought it was fully baked. 450, but they had the product cycles. now they have the new ipad. iphone 4 s, that's really a product cycle-driven story and that's the catalyst that can cause the stock to go either way. >> the company had possible made a big effort to peel back a
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little bit and they had job cuts and go back to the future, doing another deal. $5 billion to get further in. what do you make of the chambers? >> we like this move. the reason why is that unlike the other acquisitions like they did with the flip video camera, also linksys, this is more software. software and services, higher margin. the more moves they do like this is positive. it was also enhanced with the margin profile. >> we shouldn't expect them to get away from the routers and switches. >> that's correct. then this software with the box space, the more complete solution. they don't have to play in the more commodities. they are going to transition to
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more of a software model with higher margins. this is a smart move. >> you look at the stock's actions and it was awful. you said you like what they did, but the market did not. did you get a lot of calls? my model broke down in a big signal. they broke a trade line of support and it's basically can't get above the february highs. a lot of calls on that or not? >> we did. the number one concern with the acquisition is that there is some hope that it would get out of the business. it is more of a commodity market. there is hope of that and they did it. they are basically doubling down. what the street and the market didn't quite understand is that what they are doing is transforming more of a software model. software and services will be margin-enhancing. sometime the price actions, we try not to focus on a given day. we think this is a good
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opportunity to buy the stock on this pull back. >> what's interesting is they use $5 billion of offshore money. a company with 47 billion in cash, this is free money for them. i don't care wa you say. lobbying for this tax holiday where they get to live by different standards, i live on the ground and worked and form and paid taxes there and the government got my money. this is a pedestal of mine. you should like the deal if you find a way to repatriate the rest of the money and do it in a way that has value. it's more about spending money offshore that they can spend while they can. >> thank you very much. good to talk to you as always. welcome you back soon. >> thanks. >> let's trade cisco. >> the chart has been tremendous. the stock got whacked from of the last couple of months. technically it looks nice to me.
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here at 19.5, i think it's a constructively charge. >> next on fast money, we are heading to the twitter verse. more fast money up next. olar. the two trains and a bus rider. the "i'll sleep when it's done" academic. for 80 years, we've been inspired by you. and we've been honored to walk with you to help you get where you want to be. ♪ because your moment is now. let nothing stand in your way. learn more at keller.edu.
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dr. cramer is giving a prognosis. one will be admitted to the cellblock. jim is drilling down to find you a new tech stock that can make you slick profits. all coming up at top of the hour. the dollar weakens as risk increases. what are the dollar fundamentals saying? let's get your money in motion. i find it interesting. john taylor on the halftime show. both he and brianicle oat desk today like going wrong. we see you do too. why? >> i like it. i think everyone is caught up in a rate differential. i still think it was a possibility that the dollar is going to resume decline. you want to be a stock picker and pick up a strong currency like mexico. weak numbers out of mexico and they are expected to pick up in
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12. the good news is 80% of exports come from the u.s. you want to be cher that they ease the trade and do did against mexico. we have a bank that will stay on hold and the market is talking about pricing in a hike in 12. that will lend strength. you can go short. it is outperforming next to the downside. they are beating the doctor. you can go short around current levels. that's where we close and stop around 12:75. >> i agree with the call and the other part of the question, do is this an emerging market and you expect all emerging markets to outperform or is it a u.s.-mexico call? >> look at what norway did?
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they cut interest rates by 25 basis points. enough of this currency strength. australia is taking it on and new zealand. in the far east, they come to canada and new mexico. >> i think we are in the middle of a canesian bubble. that will be possibly for the dollar. you want to run around with mexican pesos. >> the ten-year yield up around 2.3%. i don't think the administration will let us get to that. this long dollar is overblown. there is technical resistance and will to keep it below. i'm not buying that.
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>> see you tomorrow night. you can catch more strategies on money in motion tomorrow. 5:30 and every friday only on cnbc. next on fast money, is bill gates behind the next big thing in music? fast money continues. what makes the sleep number store different? the sleep number bed. the magic of this bed is that you're sleeping on something that conforms to your individual shape. wow! that feels really good. in less than a minute i can get more support. if you change your mind once you get home you can
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welcome back to fast money. licensing music for professional use used to be a difficult process and now of bill gates's companies is making it a lot easier by developing an itunes for professional licensing. green light music is say new effort and gary shank joins us now. welcome to the program. how are you? are. >> great to be here. >> you have to this deal where customers license photos from you like the images. that's the space they are talking about. one of the competitors. now you are involving into music? >> they started by bill gates and we are most known for the photo licensing business.
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how can we bring more products to the customers and entertainment is a great way to breakthrough the cluttered world we live in. we have done a lot with bringing entertainment opportunities to the customers and green light music sits right in the center. >> how big is market? >> we think the market is about an $800 million global market, but the potential is double that. so much music is being used illegally or people don't license because it's so complex. it would take weeks if not months to get all of the approvals you need. with green light you go to the platform and search over a million tracks with the music companies and quickly get access to all of the ryes you need to go forward. who will supply the music to you?
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>> all four of the music companies that could for 80% of the music business and universal, warner, sony and emi. >> what will it cost for somebody to license a song? >> it depends on the use. you search for the song and there is two ways that you can license. 500 are preclear and two or three clicks. you print it out and you are good to go. there is another section where we give people guidance. we have been in business for years doing thousands of music clearance. we guide people to a price and they make an offer to the music companies. the platform very easily settles that in just a few days. it dwe pepds on the use, but it can go from 5,000 to 1,000.
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1500 or $2,000 for an a level song. the ones that are advertising. internal presentations to external trade shows and sales meetings. presentations. all over the web. the corporate presence. bringing a sound track to the website on you tube. on stage productions from tiny and theaters up to the largest jumbotrons and stadiums. like the wedding or your you tube video, bring a sound track can double the size of the music licensing market. >> we have to run. >> did bill gates's green light green light? is he involved in the business? >> he is about bringing the music. >> got you. we have to run. thanks so much for coming on.
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