i'm melissa lee. tonight's top three trades s.two better than one? google splitting its stock, but the move isn't exactly shareholder friendly. monitoring the conference call and breaking down all the after-hours action. plus, is health care the biggest bubble since the health care bust? health care spending is making our economy sick, and rise of the machines. a sea of ceo of irobots says how his company is morphing from vacuum cleaners into robots. an effective google stock split, two sure holders, but what's the

catch here, karen, because there is a big one? >> the catch is this is non-voting shares so to the extent they issue these shares to new employees or employee compensation it allows for the shares which are the shares that the founders own to maintain control. although they are ready in effect have a control right now. just -- they essentially won't be diluted. it's very disappointing. in terms of corporate governance not really ideal, but also i was really hoping to see maybe see something with the cash. i was thinking when i first saw the headline go across it was the dividend that made the class "c" shares that everyone would get one that actually had a dividend. no, not the case, and, you know, the split. i always think that splits, this math is nothing -- you're not getting anything. >> so from a shareholder perspective in terms of trading the stock, really doesn't make that difference. doesn't give you any more voting power in the stock. you have what you have, and it's times two. >> yeah. that's correct, and the -- the market reaction initially was very positive. gaggle came out. beat street estimates. moved up and then pulled all the

way back very quickly, and we thought there might be charges or something else as we were watching this, and then it came out just as karen detailed about the stock split. it immediately jumped back to the upsides we've seen two v-shaped moves in the after-hours session, and then it sold off as people started to absorb what karen said about this being a distribution where some of those shares don't have any voting rights. >> right. >> i think the point here, the question i have, is if i'm a share holdner google, the management seems as if they are trying to take away all of my rights, and i don't want to be involved with that. google had that, not going to be the big bad company. they would put down microsoft at the very beginning, if you remember. well, it seems to me that google is doing the exact same thing that they said they weren't going to do and if i were a shareholder right now this would be my exit point. >> let's go that one step down thatty in favorious road, if the google ceo is not thinking about the shareholder, not doing anybody a favor, not giving you a shareholder any more than what you had prior to the split,

correct? >> right. >> offering nothing more. >> that's right. >> allowing their stock to be traded more freely and more easily in the options market. >> and they are not mincing any words here, being very transparent about what they are doing, being nefarious or transparently nefarious so the point is you've got a stock that's trying to make a new -- basically a three-year high. a lot of things have to go right, not surprised to see what john just said. it will whip around the highs. 658, looks like resistance. >> think of the way they run this company already. i'm long the stock. build an extraordinary company, that goes without saying, but the expense control or lack thereof, this sort of one-off programs that they have that they find interesting to do, just as -- >> self-driving car, solar plants. >> right. >> the space program. as a public shareholder, it's really disappointing. i don't want to have search and space. i just want the search, you know, but i don't -- >> space. >> call me crazy, but i -- i have no choice. got to take the space with the search. i wish i didn't.

>> it will be interesting -- a question is search strong enough? is search vibrant enough as it transitions to the mobiles and the margins are pressured? >> and did they miss out on the instagram acquisition, because clearly that's what a lot of people are talking about. there's a reason that jeffrey zuckerberg paid double what settled three days previously last thursday when instagram led that round for a $50 million raise for half a billion dollar valuation. three days later zuckerberg buys them facebook. buys them for $1 billion. now, it's a lot of the same ownership. almost like moving cards around under the table between these guys, but, on the other hand, this is something google desperately needed in my opinion was something like this in the social media space. they like to think that chrome and some of their other applications are in there. i don't believe they are. google plus is not doing it for me or anybody else. so to karen's point, all you're getting here is search, and then some of the wacky things that they do, like giving away free docs and things like that.

>> let's bring in colin gillis of bcg financial, and the conference call has been going on for a half hour's time. anything interesting on the call? you do say the quarter is basically mediocre. >> yeah, that's right, melissa. a couple of things to keep in mind. one, revenue was a little bit light in the earnings beat. that's a low quality earnings beat. all coming from the tax rates, the lowest tax rate in about 17 quarters. all right. the second thing is when the cfo tells us that the business is healthy and not to worry about the decline in click prices, well, it does make us worried, right. this is a very steep decline, and it's -- it's an abnormal pattern for google. to see people paying less for clicks is not a positive, and the third thing we're highlighting is the stock has traded down five out of the six last years in the june quarter. just not a good time to getting into google, particularly with the motorola acquisition in front of us. >> all right. any mention yet on motorola and whether or not they intend on entering the hardware space which would in theory put pressure on margins even further? >> yeah.

it's going to rip out about eight points of margins, right. so you won't expect to hear much commentary from them on the deal because the deal hasn't closed yet. no commentary yet when i jumped off to come join you, you know, but the key thing here to bear in mind is that this is a business that they are going to need to sink a lot of money into to -- to rev up. motorola has been running at, you know, losing money to barely break even for the last several quarters, and they are going to go into the hardware business. they are likely to do so by subsidizing this hardware. it's going to be a drag on margins for some time. there may be a nice long-term payoff, but this isn't called long money. this is f-fun, and for the fast money trade you have to be careful of google over the next 90 days. >> still a great business. we all knew cost per clicks would come under some pressure because of the mix. the stock is up $15 going into today. up another 3 bucs or so right now. want to do one quick thing on the math just to show you about the control. the share olders, the "a" shares everyone owns, that's 258

million shares. bryn and page each own 258 million votes, not shares, but votes already, so they already have a two-thirds majority. there is no change of control here that this c-share. corporate governance issue not great. doesn't change anything. they are already firmly in control. >> i'm curious what your opinion is of the effective some split, and is your view that this could move the stock around a little bit more because this becomes more of a trading vehicle now that it's two for one even though nothing else effectively changes? >> i'm very interested to see what tis count the c-class shares trade because it will eventually tell us what the market views as the controlled premium or lack thereof. the reality is, as karen just, you know, assessed so nicely, these guys control the company, right? they have got that 10-1 super vote, and so this is no change in their mindset. it's not really about the fact that there's no voting rights with the c-class shares. it's about the fact that larry and sergei and to a lesser

degree eric are controlling this company and if you don't like that as a shareholder, can you only vote with your feet. >> absolutely. i couldn't agree more, and that's the point i wanted to make. agreeing with care, it's obviously a world class company and world class organization. however, right now with the way they are running this company, the question i would have is why don't they just take it private? if they want to control everything themselves, why not just take it private because it doesn't seem like a very shareholder-friendly move that they are making here. >> el with, you know, they do need a vehicle to sell their shares out over time, and that's something that's going to happen. >> colin, the q&a portion of the call is just beginning. what's the question you will ask first? >> the key thing we want to see is what is the impact for mobile on the cpc decline, right? because if you look at some of the studies that are out there, particularly one from efficient frontier, showing that mobile monitorization. we want to know when is mobile going to come up to speed, particularly as the company

invests so much money in that area. >> it seems like it would be easy to point to mobile saying that's why we have a bicker cost per click decline but on the call there's commentary that you can't tie the declines strictly to mobile. is that troubling in your view? what else could account for the greater than expected decline? >> it's absolutely troubling. we can talk about the international mix shift, right, versus emerging markets. people aren't paying us as much and google is certainly growing a little fastener international markets. again, why their tax rates were lower than expected but to see people value their clicks less and significantly less on a year-over-year basis in this quarter is not good. we prefer to see google growing both pay clicks and the price people pay for clicks, because once you have one of those metrics turning negative, you have the other one turn negative then, of course, you're seeing revenue declines. >> colin, what is your thought regarding facebook and their corporate governance since they are virtually a mirror image of google going forward, and as you

and karen both said, you might love the company, but do you love the fact that you don't have anything to say about the direction of the company. in other words, this is a trade. it's not a long-term hold because you don't have any control going forward if you think these guys are going off the rails. >> yeah. got to just be aware of it, you know. i'm very active with a lot of startup communities and, you know, a lot of the founders view that companies out to run that way tend to be better run and will have a better long-term share performance, you know, but a of the fact that they are not influenced by the 90-day decision cycle of wall street earnings, so, you know, again, just know that larry and sergei are controlling this company and that they are going to do what they think is right. for a long-term view, that's great, but certainly something you have it be aware of. >> colin, i know you're cautious on the stock, but after this quarter are you more inclined to the upside or to the downside? what's your bias at this point? >> downside, right. >> downside. >> like i said before, the last five out of the six june quarters, june quarters historically the weakest quarter. the stock has traded off the last five of the six june quart

errs. plus, got to worry about the motorola impact and make sure everyone digests and understands the strategy once the deal closes and that should happen in the june quarter as well. >> colin, great to have you. colin gillis of bgs. want to go to our jon fortt out in silicon valley monitoring the conference call in about 40 minutes. what's the latest? >> just so happens, somebody asked the question that colin said he would ask which is about mobile cost per click. here's what they said. they would like investors to think of the mobile cpcs as such a big opportunity. there's such growth there, and they haven't been able to figure out the format issue. formats are still evolving. right now mobile formats are where desktop formats were in 2002 to 2004, and so over time that should improve and then larry got on and said, you know, over time with local transactions coming in, he expects that possibly the trend could reverse. mobile cpc could actually get better than desktop and offered clicks to call as things that

could drive it so it wouldn't necessarily be cost per click but maybe cost per interaction that could go up if google solves the mobile question, and he says they are putting a lot of resources towards that. melissa? >> you know, just trying to assimilate all the information and the c-shares which is a little bit of noise. you still have an extraordinary business, an extraordinary formidable market share that is -- i mean, nobody has been able to touch it and a valuation that still seems quite reasonable given the growth that they still believe that they have, plus the cash. >> i'm curious. a lot of companies out there have tremendous market share in their markets that have great balance sheets, but the stock doesn't necessarily do anything for a while. what makes you think that google will have that catalyst to the upside when it comes to the stock price? >> i don't know when it will be? >> this is the kind of investors we are though. we wait. the value is there, and it's not -- you know, it's not been a disaster at all. >> sure. >> just trailed this year. it's flattish. up a little maybe today.

>> john, i'm curious. when you heard of the effective stock split, did you think ahead to perhaps the facebook ipo and making these shares more tradeable as facebook comes to market? >> are you asking jon narnlgia on jon fortt jon fortt. i didn't really think about facebook when i looked at this. what google was saying had a lot to do with the dilution that they expect from the stock-based compensation. this is about their internal needs, not so much about what's outward facing. google seems to know that their investors won't like this very much. >> jon, more updates from you a little bit later on in the show. meantime, do want to go on because there's a lot of after-hours action. coin star moving higher nicely in the after-hours session after raising its first quarter and full-year guidance. it says that it experienced increased consumer demand for its red box services. take a look at the nice pop there in the after-hours session. in fact, interestingly a noted

short seller this morning on "squawk box" talked about coin star. take a look. >> dvds as a percent are now beginning to do what vhs cassettes did ten years ago. inexorably you reach a tipping point whereby dvds then are supplanted by streaming. >> right. >> and coin star will be facing that at some point in their future. >> all right. i said i think joe but it is, of course, jim chanos. >> you said john. >> too much jon on the mind here. >> i called facebook ceo jeffrey zuckerberg and, of course, it's mark zuckerberg. >> good old-fashioned dvds are behind us. >> not surprising given what's been transpiring with netflix, and -- and the -- the move to streaming and yet people still want something immediate and something that they can walk away with right away. that is, of course, the red box. do it with blockbuster and so

forth. i think jim chanos is right. overall it's just a matter of time before this model goes away and the streaming model takes over. >> got to wonder if shorts like jim ch ho nos have been coming in. >> yeah. if you're short of a stock, getting short google ahead of the quarter or apple or jim ch ho nos on coin star, you better have the catalyst right. >> coming up next, it could be the biggest bubble to hit the u.s. since housing. find out why city economist steven wieting is prescribing drastic changes for the health care industry, and later robots revolutionizing all sorts of places from your home to health care. we're trading the next big thing. much more "fast" straight ahead. o work hard for a better future.

since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪ then don't get nickle and dimed by high cost investments and annoying account fees. at e-trade, our free easy-to-use online tools and experienced retirement specialists can help you build a personalized plan. and with our no annual fee iras and a wide range of low cost investments, you can execute the plan you want at a low cost. so meet with us, or go to etrade.com for a great retirement plan with low cost investments.

♪ and then treats day after day... well, shoot, that's like checking on your burgers after they're burnt! [ male announcer ] treat your frequent heartburn by blocking the acid with prilosec otc. and don't get heartburn in the first place! [ male announcer ] one pill a day. 24 hours. zero heartburn. departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz.

every time we've gotten into the low 14s on the virks, i've shorted the s&p 500. if it goes to the low 14s i'll

do it again tomorrow. that's our playbook, and we're going to stick with it. >> that was two weeks ago on "fast money." let's take a look at the volatility playbook. what happened? >> so what's interesting. on march the 26th the vix bottomed at 14.26. same day the commodities topped, same day that the russell 2000 topped. so for all of you that are looking at the interconnectedness of this huge rally and people getting sucked in. the best way that you can basically risk manage around that is watching this vix level of 14 to 15. today the vix came down 14%, but guess what? in between then and march the 26th the vix was up 43%. so, again, since 2008 we have seen multiple, and i mean multiple monster rallies in volatility. off the 14 to 15 range. do you not want to be a sucker at those levels, and just get yourself out of the way is the best way to protect yourself. >> michael on the options desk, what are you seeing in the future when it comes to volatility in the market? what does it tell you about market moves potentially in the coming weeks? >> it's really interesting,

because for a long time we talked about the fact that the vix term structure, that is to say the vix futures, were trading at a big premium to spot vix which is the number that they keep talking about there. when we see those types of spikes because longer-dated expectations for the markets' general level of volatility don't change as quickly as our day-to-day expectations might. what happened the term structure really flattened out the exact opposite has happened now that the vix has come in a little bit. that term structure is starting to steepen a little bit. if you looked at the price of options on a fixed strike basis, what you're going to see is in fact options traders actually were bidding for a little bit of spx options despite the fact that you saw the decline in the vix and the reason you see that is because the two are negatively correlated. as the spx rises the vix will fall, all else equal. if you look in a more granular fashion, you'll see the options trading ms more spreadable. >> mike had mentioned the fact that obviously the s&p went up

as the vix basically collapsed today. mike murphy, would you say that this was a china-fueled rally that we saw today? we saw distinct strength. yes, distinct strength across the board, at least early on in the session, especially materials, some of the more china-lefrd sectors, and i ask you this because we are expecting gdp data out overnight. >> yes. i think today what started this rally was the expectation, or there was a rumor floated that the china gdp number would come in, expectations around 8.4. the rumor is that they will come in and print a 9 number in front of it. if that happens, materials, anything risk entred will be on and the market should really ral frethese levels. yesterday we talked briefly about caterpillar. caterpillar is a great way to play exposure to china because whether this number comes in at 8.4, 9.1 or somewhere in between, caterpillar still has strong upside from these levels because the stock had a 13% pullback, and as they expand market share, they are going to be able to increase earnings. >> yeah. there's a couple things that went on today.

china's one. that's a rumor. number two, and more important number one is the dollar, started to get completely pulverized after janet yellin started to speak last night in new york. again, if you debotch the dollar, you'll get the inflation trades going. people can convince themselves that's chinese demand but reality is there's a big difference between growth and inflation. big inflation trade in the market today. a lot of v-bottoms versus the day prior. >> really interesting tomorrow morning on "squawk" we have john rutledge, one of the experts on what's going on. boots on the ground china. he trades the china wealth fund, among other things, as well as being an instructor over there, so when he comes out with the numbers, not he comes out with the numbers, but his reaction to those numbers, that will be very interesting and must-watch tv. >> he might have told them what numbers to report. >> may have. >> may very well. >> they might listen to john. >> i thought it was interesting to see apple in the market go their separate ways for once. >> right. >> not for once, but that hasn't happened in quite some time.

maybe thrill start to diverge now. >> what were you seeing in terms of the apple activity in apple? you're pointing this out. how many days of underperformance when it comes to apple versus the s&p 500? >> the last three days it's been down. >> it's been down when the market has been higher. >> yeah. what we were looking at, too, melissa, apple when it has -- this will be a fabulous day, while it's a great day for you today if you were a seller of google straddles because there were about 40 bucks and google's unchanged in the after hours right now, you won't get all that have 40 bucks but you'll get an awful lot of it tomorrow morning, and these are for options that expire on friday. so apple will probably carry premium of about $25 into its earnings which are eight trading days from now, april 24th, so that volatility will probably be more like 65%. in google today it was up over 122%. so virtually double where apple was, and people are protecting with apple, but they are not bailing on apple, at least not yet. >> right. >> you talk about asymmetric

risk in the market with an event this apple quarter. if these guys as much as sneezed the wrong way into the clean "x." this is going to be tightly wired. 17% of the xlk are the tech etf is apple. a huge percentage of the s&p and really represents why the s&p is outperformed something like the russell 2000 on the drawdown in the last couple of weeks. >> let's move on to the next trade here. the health care the biggest bubble since housing? citigroup says u.s. health care spending is growing faster than incomes and our cost of care has doubled the average of other developed countries when you take a look at drugs as well as procedures. let's bring in one of the authors behind this very fascinating report, citigroup economist stephen weiting. i take a lack at report and look at all the data it is very clear that health care as a cost, as an industry is growing tremendously. what makes this a bubble which would imply a popping of the bubble at some point? >> well, we described it as a fundamental bubble. having a large influences on the economy. it's not a single asset price

that's about to price, and it doesn't have sort of the cyclical component that housing, for example, but it's growing much faster than the incomes than we are willing to support it with. it's growing in employment to a great deal, and -- and having, you know, very large influences. it's the largest future influence on the u.s. treasury, and -- and as such, if we don't recognize these costs, there's ultimately a price to pay for it so it's having fundamental effects. >> a lot of people who would would say when it comes to health care people will pay it costs. when you need surgery you're going to have surgery, when you need the medicine, you'll pay for the medicine, when it's a life-and-death situation but at the same time you make the case that there could be pushback, that it may not be as elastic or as inelastic as we think and you have to take a look at where the funding is coming from. do you think we're at a point that the funding, wherever it's coming, from may be reaching a tipping point? >> well, it's not a trivial cost anymore, and to the extent that

health care is only a very small amount of it is being paid for out of pocket. in those areas you do see, you know, demand effects, you know, when you have problems with pricing, and -- and the rest of health care that's being largely hidden and on cured with transfer payments, but ultimately it's going to have a very big effect on budgets. it's going to eat up a much larger share of government revenue, and unless we're willing to provide the tax revenues for it, it will end up being a deficit finance to an extent that we have, you know, never seen before, and so there will be pushback effects in terms of having to raise taxes or drive up budget deficits in order to finance it, and it's already crowding out other priorities like education and infrastructure. >> it's karen. let me ask you something. where do you think that the most prep will be, those involved in the end-of-life care? where do you think the bubble

will start to burst? >> you can think about this in some ways if we were to go back and start from scratch. price would be a consideration in health care. you could easily see ultimately when the pressures are there it may come back and hurt things that aren't, you know, at the core of the cost problem. you know, when you look at, you know, pharmaceuticals, there's not a tremendous share of the cost, but the differences between the u.s. and non-u.s. form are an area where policy-makers may look for savings, so there are all sorts of things that aren't, you know, ideal in this but we have other industries that are paid for out of government revenues that have budgets, and when you put a budget to it, you're ultimately going to see more regulation of the industry, and some budget constraints. >> when you call something a bubble, people definitely perk up their ears on that. i need to see a long-short

strategy so what are your long and short positions as a way to play this? >> i'm the economist and not the strategist of the firm. you might ask our strategists on this, but i think the things they have pointed out were areas that are high margins, that are highly domestic areas where the types of firms that are involved in these sorts of businesses wouldn't expand overseas because the margins aren't as good, but i don't get involved when a particular company calls or security calls on this. >> steven, great note. thanks so much for your time. >> thank you. >> mikeal, i know that you've been taking a look. he points out the higher margin areas may be the places that should see their margins squeezed. >> yeah. >> so where does that bring you? >> yeah, i mean, one of the things that would do, of course, would require you to sort of thread the needle to figure out when you're going to start to see some of that margin compression and maybe a better way to play it looking for relative value is looking at players in the space that are

doing well. you also have a situation where one is a little bit pressed for cash and one of hem, hch, has also weathered stormed like this in the past with the national health care service in the uk so if you're looking for an opportunity to buy one of the better players and possibly short one of the weaker ones, community health, that may be a way to play it without directly exposing yourself figuring out when to time the bubble bursting that he was talking about. >> all right. >> i think you also want to watch intuitive surgical, very expensive. a lovely machine but extremely expensive. that and some of the medical device-makers like striker. those would be ones that i would watch if indeed you think things might get done with the health care deal. i think that's bad for these guys. if they don't get done, i think

they keep going up. >> got to take a break here. do want to take one check on google. it has pared its gains, now up about $1 or so from where it closed in the regular session. still getting headlines off the conference call. the google cfo saying there's nothing to announce regarding the cash strategy which would imply no news, folks, on any sort of dividends here. we, of course, are on that call. we'll check in with jon fortt a little bit. will jpmorgan and wells fargo kick off earnings with a bang? taking our positions ahead of their first-quarters results right after this. zap technology.

arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. for a hot dog cart. my mother said, "well, maybe we ought to buy this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said, "look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years.

[ nadine ] buzzzz, bzzzz, bzzzz, bzzzz, you know, typical alarm clock. i am so glad to get rid of it. just to be able to wake up in the morning on your own. that's a big accomplishment to me. i don't know how much money i need. but i know that whatever i have that's what i'm going to live within. ♪ ♪

departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. welcome back to "fast money." we're live at the nasdaq market

site in new york city's times square. bank's first-quarter earnings kick off tomorrow. let's take our position on the bank stocks ahead of earnings. karen, i know you've been watching jamie dimon. but he's been out all over the place. >> nothing to do with jpmorgan. will you let's talk about jpmorgan. >> he's been out talking about the health of the economy and housing, et cetera. should we expect any surprises? >> not really expecting surprises. you know, parts of the business are smooth. parts of the business are lumpy. i think we'll continue to see a little bit of improvement in credit. i don't know if we'll see any more credit on the mortgage issues which bank of america and others face as well. i think we'll see some trading revenue. a look-through to some of the others. optimistic on the long-term story. still long jpmorgan. >> agree with karen completely here. the point, is remember, for the last few years, the banks have been getting crushed, and you have some of the smartest minds in the world, arguably maybe, but trying to figure out how to become more profitable and now with housing at or near a bottom

i think it's kind of no longer an argument whether it's there or close to there. it remains to be seen, but trading i think will be a big point and karen brought it up. i think the large banks have figured out a way, whether it's goldman sachs, wells fargo, jpmorgan, morgan stanley, bank of america, they have figured out a way how to be profitable again, and i think they have cut down a lot of overhead. they have cut down a lot of staff, and i think numbers will surprise to the upside here. >> let's stick with banks here and hit options action. got a trade on goldman sachs. >> yeah. i think one of the big issues with goldman sachs is you would like to see an uptick in the revenue side, not just cost-cutting as a revenue mechanism. one way to play into catalyst such as earnings is take advantage of the fact that the near-term options tend to be bid a little bit better and take advantage of that by selling those. what i'm looking to do here is the april-may 115 put spread so sell the april 115 puts and collect $1 and use the proceeds to help finance the purchase of the may 115s which are 290, and

what we're playing for here is the they're-dated options there are going to decay more rapidly than the longer-dated ones. that's one way to play the cat lifts. leaning a little bit bearish, maybe more skeptical than my colleagues on the desk. >> keith, goldman sachs, you skeptical as well? >> yeah. i'll tell you. i'm long the stock and it scares the living daylights out of me. i don't know how else to tell you that. look at the industry. basically a gong show from a volume-trading volume perspective. keep that in the back of your mind. bought banks three, four weeks ago also looking at a yield spread which is a lot wider. you've seen the long end of the curve come down and come down fast. that's not as good as jamie dimon's earnings, goldman's earnings or anybody's earnings. >> xlf, a lot of speculation in this which, of course, they are playing off of jpmorgan's earnings tomorrow, and they are setting up for the rest of the earnings cycle coming in next week, and they are bullish right now. they are buying out of the money calls pretty aggressively. >> catch more options action tomorrow friday, 5:00 here on

cnbc. well, coming up next, the moment we've been eagerly anticipating all show. irobot ceo is on deck with details about the next big thing. find out all the new places that robots are ready to roll into. that's when we come back.

well, we've been showing you this. the robot, hands-free robotic vacuum that will clean your floors at the push of a button. there's one that can mop as well called the scuba. how about an app-ready robot that services our health care, retail and security industries. robotics company irobot said its product ava can do just that and we want to know if it is going to be the next big thing. colin angle of irobot joining us us from boston with the 5.2-inch robot. colin, what sort of market are you anticipating for this? >> well, this is a -- a robot that is going to bring many different applications to market. you can see right here what you've got is an ipad on top of a device that can create maps of your home or office or business and basically make information

portable and actively go track you down. whether it's -- whether the mission is running a face time like application doing a security task or allowing a doctor or nurse to visit you at home, this maris mobile technology with robotic technology. >> how much does this thing cost? i'm asking because some of these industries are very pressed. when you're talking about security and national defense, the budgets are under pressure. when you're talking about health care, those are under pressure as well. >> well. the -- this is a demonstration prototype. the pricing -- it's made out of technologies which are fundamentally very affordable so as we go through our launch process for the robot, i'm not so concerned. really what we look at is the cost of doing it with people and the cost of doing it remotely use the robot, and as long as we have a good cost advantage, we're in the right place. >> so walk us through actually

how this would be used and let's use the health care environment as an example. in your view, what is the best application for this? what is the most likely? >> well, the first applications are actually going to be in hospitals where you've got situations where you have an acute need for a specialist, for example, to be providing a diagnosis on a patient that say comes in the hospital with a stroke, and the specialist who makes the diagnosis is not in the hospital. this robot could allow someone as far as the other side of the world actually to come in and make that critical decision to make sure that patient gets the right care. a difference of a good outcome and a bad outcome and good business for the hospital as well. >> hey, colin, it's mike murphy here. i know back in february i think it was in the last quarter the stock really got hit hard. what have you guys done to put in place to kind of i guess maybe from a cost structure standpoint, to make sure that doesn't happen again, and, b, the recent acquisition by

amazon. does that transfer over into any of your business? >> well, the stock was -- was impacted based on uncertainties around the rate of acquisition of our military systems and the fact that we needed to -- to incorporate that into the guidance we provided for the year. certainly in washington we still see a situation facing questions around sequestration and a continuing resolution last year so that has not yet cleared demand from the d.o.d. and continues to be extremely strong, and the projections that we gave, i know the last call-around, the consumer business which represents over 65% of our revenue and earnings are very, very strong. so we're riding this one out just fine, and -- and, you know, we'll be announcing our second-quarter earnings at the end of the month. >> within your defense products, you've recently had an order for first-look robots which are

small, light, throwable, five-pound devices that survive 15-foot drops. also got, of course, the rumba we've been showing on our air as well as scuba. how is demand for let's say the consumer products and the government products, because even though the budgets are shrinking, maybe more of that budget is still going to things like the pack bots? >> the secretary of defense has gone on record saying that of all the different spending, unmanned is going to be an area that will outperform so we're very excited to hear that from him and look forward to seeing how that translates. the growth on our home sector last yesector, last year we grew, particularly overseas and we're seeing some nice impacts domestically as well. the company is very diversified. over 70% of our home robot sales, in fact, happened overseas, and -- and places like

spain, one out of four vacuums being sold today, vacuum cleaners, are now robots, so we really have sort of crossed over there, and you have to ask yourself, well, if you're still pushing that upright, why? >> all right. colin, great to speak with you. hope to see you again here on fast, colin angle, the ceo of irobot. shocking about spain, considering there's 24% unemployment. >> think they would have time. >> they would have the manpower. >> maybe the government bought them, i mean, who knows. >> who knows, but in terms of you had mentioned the amazon acquisition of kiva, a $775 million acsimpingts the market cap on this stock is slightly lower. dr. j, does this stock intrigue you at all? >> i actually have a roomba. >> what about the corners?

>> i basically put it in the tile floor in the bathroom and it goes around vacuuming up dog hair. great for that. as far as doing lots and lots of carpet. >> you only have the device, not the stock? >> right. >> 13.5% short interest. you can drop the thing out your window, 15 feet, doesn't hurt. the stock blew up and now he's got to prove himself, and it sounds like he thinks he can. >> interesting story. coming up next. looking for diversity in your portfolio. it might be time to bank on bonds. a money manager who oversees $85 billion. we'll tell you where to look. more "fast money" straight ahead. are you still sleeping? just wanted to check and make sure that we were on schedule.

the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. we asked total strangers to watch it for us. thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? if your bank takes more money than a stranger, you need an ally. ally bank. no nonsense. just people sense.

my dad and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door, it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, and it can be done well. [ ilona ] i came to ge after the plant i was working at closed after 33 years. ge's giving me the chance to start back over. [ cindy ] there's construction workers everywhere. so what does that mean? it means work. it means work for more people. [ brian ] there's a bright future here, and there's a chance to get on the ground floor of something big, something that will bring us back. not only this company, but this country. ♪ demand media expands on the big board.

welcome back to "fast money." live at the nasdaq market site in time square. lee partridge is chief executive officer where he manages $17 billion. named small fund manager of the year and he says now it the time to look to diversify your portfolio and he's brought along a few high quality ideas on how to do just that. lee, it's a pleasure to speak

with you. >> nice to speak with you as well. >> a good teal of your portfolio is in high quality bonds and a good portion of that is developed sovereign bonds. what's the thesis behind that, and what sorts of countries are you in? >> right. that's a great question. so one of the main things that we focus on in diversifying our client portfolios is to not have too much exposure to any one -- >> i think that we have lost lee. >> won't have too much exposure to him. >> hopefully we'll get lee to talk about. but he's 40% in developed sovereign bonds. 10% in emerging sovereign bonds and also has a pretty big position in mlps. >> well, developed sovereign bonds. actually own german bunds which is a developed sovereign bond so that's what he was talking about. when you look at u.s., people get centered in on how the u.s. recovery is going. lack at germany. a tremendous unemployment situation going. 6.8% unemployment. fiscal situation under control. they don't have congress. there's a lot of reasons to be

long german bonds. >> lots of unusual activity here. sanridge, that's what you're taking a lack at. >> yeah. they had been buying short-term calls. they have moved those all the way out now to september, so they are buying the september 8 calls and bought really big numbers of these. it's just a single digit stock but people think that by september it might be a much higher double-digit stock. >> okay. meantime, as we try to get lee back, hopefully he's still there, we're going to take a quick break and will try to bring you back. also, trading your tweets and touts right after this. [ female announcer ] e-trade was founded on the simple belief that bringing you better technology helps make you a better investor. with our revolutionary new e-trade 360 dashboard you see exactly where your money is and what it's doing live. our e-trade pro platform offers powerful functionality that's still so usable you'll actually use it. and our mobile apps are the ultimate in wherever whenever investing.

no matter what kind of investor you are, you'll find the technology to help you become a better one at e-trade.

all right. we've got him back. lee partridge joins us now. apologize for the technical difficulties. a big portion of your portfolio is in sovereign bonds. which sovereigns are you in? >> sure, we look at six different sovereign issuers that have an issuance of home currency so they not only have the positive intent but the full wherewithal and ability to repay their debt at any point in time

with money that they can issue internally so that would cover australia, japan, the uk, germany, canada and the united states. >> oh, okay. and your top mlp pick, mlps are great ways and their yields are very high, paa, can you walk us through why this is better than the rest. >> we like them because of their strong balance sheet growth and repositioning of the balance sheet and now they are able to withstand any shocks to the overall economy and really have a good growth pan in place for energy infrastructure overall. and one thing that i would just point out within the energy infrastructure market, it's not only finding the raw hydrocarbons that's important, but once they are identified they have to be extracted, proce processed, shipped, stored and marketed across the united states to hit the vital energy centers that we're involved, and

we think that that's just a very attractive sector to be in as well. >> we're, unfortunately, out of time. do appreciate t.hope you'll come back soon. lee partridge of salient. you were talking about german bunds in terms of mlps. are in those to get any commodity exposure? >> not here, not now. >> any reason? >> the main reason is people have been chasing yield. one of the big places where they have parked that big chase, and i don't like to chase. >> right. how but, mike? >> couldn't agree more. same exact thing. lynn energy, great story. the ceo was on during this week, great dividend but same thing. too many people have been chasing it. i think you can find better growth elsewhere >> got your first move tomorrow when we come right back. >> tonight i'm giving my prognosis on two companies with healthy potential for growth. plus, i've got the dish on a split that could cook up a win for shareholders.

hungry? "mad money" coming up next. it's very important to understand how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies.

tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones. tdd# 1-800-345-2550 and i can trade wherever i want, tdd# 1-800-345-2550 whenever i want. tdd# 1-800-345-2550 the kicker? tdd# 1-800-345-2550 i pay $8.95 a trade. tdd# 1-800-345-2550 that's a deal in any language. tdd# 1-800-345-2550 open an account tdd# 1-800-345-2550 and trade up to 6 months tdd# 1-800-345-2550 commission-free. tdd# 1-800-345-2550 call 1-877-480-9802. aye, or...a mornin' of tiny voices crying out,

"feed us -- we've awakened from our long winter's nap and we're peckish to the point of starvin'"!! i don't understand... your grass, man! it's a living, breathing thing. it's hungry, and you've got to feed it with scotts turf builder. that a boy, mikey! two feedings now...in the springtime strengthens and helps protect your lawn from future problems. [ scott ] get scotts turf builder lawn food. it's guaranteed. feed your lawn. feed it! time for the final trade. >> mike? >> short community health. >> mike murphy. >> buying polti homes and also uri, united rentals. >> keith? >> i do not like the situation politically in france. short france. >> short france. >> karen finerman. >> cvs. i like it. it's underperformed. express scripps, better. >> jon? >> sunridge