>> and the nasdaq lopping off .8% although still above the 3,000 level. >> it looks like the s.e.c. is going to bring enforcement action against eagan jones, the small rating agency. we talked to shawn eagan earlier about that, and i'm sure there'll be more details to come out throughout this evening here. >> that does it for the "closing bell." thanks for watching. they're going to talk about that on "fast money," which starts right now. ♪ come on and dance ♪ come on and dance and here we go, i'm simon hobbs in for melissa lee. here are tonight's top three trades. making money in many bull markets from the cloud to biotech, we're breaking down stocks and sectors that sizzle today, and making the call on whether you should stick with the trades moving forward. also ahead, is housing on shaky or solid ground? an analyst making the case for why the recovery is real and giving you the names to play. also ahead, big day on deck for blue jets -- let's get to what was working today.

>> i know the heimlich if you're in trouble. >> last night we talked about ffiv, f-five networks. and this was absolutely on fire, simon. f five got down to around 110 last night and traded up nearly $140. looking at the 52-week high, if we can get to there, you've got to sell everything you got. we got right to that 52-week high, the stock dumped $6 from there, kachl back down to $133. same story in vmw, vm wear. pulled back dramatically, did set a new 52-week high, but if you hung around too long up there, shame on you. it's another one of those things where you get up to these where a stock is either to the downside support like apple or resistance to the upside like vm wear and f5, and you take your profits, turn and run, and don't wait for the big stick to hit you. >> there's another stock that

stood out to me and we'll talk about others in a bit. but ebay, look at the performance in ebay today up 13.5%. but i caution folks, hopefully you've been in it. because we've talked about e bay for a while. paypal to me is worth $28 to $30. here's a stock that traded close to -- excuse me six or seven times normal volume made basically a four-year high. we're now at levels we've last seen in 2007, 2008. so if you've been fortunate enough to be in the name, i would absolutely be taking profits. a lot of people might jump on it tomorrow. i say wait for a pull back off of this move. >> did you see the way the market slipped late in the day off that turkish headline? i thought it was off dow jones. but not a lot of participants saw that headline. possible nato action. the market slid. that to me, yes, there's a bid, but it's very squeamish once you put pressure on the market. >> that's a financial term. >> yeah, look that up in your

investipedia. >> nice. the level we bounced from, recall, that was resistance for a long time a few months ago, we finally traded through it and traded up to 1,422. resistance becomes support and we have found it. but i'm in steve's camp, it was not an impressive day at all. off the back of yesterday, 1,370 needs to hold or i believe we're going to test that are 1,340 level, the low last month. >> and the speed bump in the way, sorry to grab it this way, but 1,357. your want to look at that level and then the level of 1,340. below that, it's freefall and get back down to 1,305. i have mentioned i believe we'll see flat on year once again 1,257, and that will scare a heck of a lot of players out there. >> let me take you away from it -- forgive me -- >> take us away. >> the market. let's talk about. >> let's talk about the individual stocks, apple in

particular. after falling 38% today and now 9% since the april 10 high. concerns growing, clearly after verizon reported a 25% drop in iphone activations from the previous quarter. suspicion, therefore, that perhaps it could miss certainly on that metric when it reports next month. jon, how worried should we be here? >> well, we do have- put it in plain terms, the market is telling you that there are -- if it was an ekg and this was a loved one, you'd be very worried. because the stock has been rocketing up and down, making 4% moves, it's had two $32 moves this week back-to-back. that's huge for apple. normally with a stock like this you get a bit of good news, stock could make a 4% or 5% move to the upside and then flutter around. this one's going up and down very violently. i've got to give some of the hft or high frequency traders some

of that credit or some of the blame. >> if you give them credit, does that mean the move is less important? that it doesn't tell you where you're going in the future? >> it is trading violently within that range. roughly 575 -- >> i -- i don't know if i'm disagreeing here. if you discredit the move, the moves are just exacerbated by hft. >> yep. >> the moves are there, the levels are there. they might bring that price point there quicker. but they're not to blame for it. i'd rather get to the end of the dance sooner rather than later. >> i just think, you know, it's traded valuation swings are $20 billion, $40 billion, within two or three days. i -- it's trading on rumors and fears and all that. we are going to have so much more information on this stock tuesday night than we have right now. and to extrapolate and think, oh, iphone sales aren't as good, we just don't know. this happens every quarter, but either it's bullish -- >> this is a company that's not highly leveraged as someone pointed out before we came out

on air. >> that is high lly leveraged? >> no. >> exactly, it is the opposite. the swings that are -- it's absurd. i know there's net cash so the swings aren't as big, but they are still -- >> going down from here? >> i think we don't know until tuesday, these swings don't give me information. tuesday's earnings release, that gives me information that i will use in valuating. these swings don't give me information. >> stevie wanted to get to the end of the dance quicker because stevie knows what happens. >> i'm finally -- >> i would like to see -- i would like to be at the dance, i used to have fun there. with that id, going to see these moves in apple. but these moves to the downside are frightening. but again, we talked about this last week, this is exactly what people have been waiting for. go to 100 people on the streets, i want to buy apple, you get a pullback and then they're too

scared to jump in. and my sense is, we're on the verge of a similar move taking place. >> let me bring in steve at the prop desk. steve? >> mike. >> mike cove. >> yeah. well, you know, it's just interesting. one of the points that karen was making about how heavily levered or not levered the company is with $100 billion in cash, it's not a levered business. as the market cap rises, though, the deleveraging effect of that huge cash balance diminishes. in other words, if you have $100 billion and you're a $200 billion company, then obviously, you know, 50% cash. if you're $500 billion company, you're only 20% cash. the moves you're seeing are all bets on a very big business. a big business of iphones and the big business of mac computers and so on and the ipads and that's essentially what people are pushing this thing around with. you can take advantage of it, though. this thing is now trading with more than twice the volatility of the nasdaq, which is pretty surprising when you consider how

stable the growth has been in this business. so one of the things you can certainly do if you happen to own this stock, you could look to sell some calls and take advantage of the fact that options premiums are being elevated by a lot of speculative bets here. there's over 2 million open interest on the call side. most of this is buying. and now you can sell the july calls for more than 5% of the stock price. that improves your yield on a stand still basis. you still have an opportunity if you do get called away at 620. 653, the premium you collect, that's actually higher than the all-time high in the stock already. that's a good way to try to take advantage of the fact that people don't know what's going on here. they're bidding up those options and that way you can be long the stock and insulate to the downside. build some yield and still have upside. >> and remind you to cap catch more "options action" tomorrow and every friday on cnbc options to get con strant trade updates. >> only because we never talk about apple, i just want to

lengthen the conversation. >> is that sarcasm. >> a little bit. so when you were at the dance, did you have a three-piece white suit? >> no, listen, funny guy. i had the nice ruffled shirt. but that's what they wore back in the day. >> right. >> this is talking late '70s, early '80s. >> apple, 572 was the recent low when the stock fell out of bed a week or so ago. you want to look at that level. but for home gamers, look at the 50-day moving average. if it breaks that, you must get out -- >> let's go around the horn here. buy, sell, or hold apple going into earnings? >> i'm going to wait. i wouldn't do a thing right now. if i'd own it, i'd scale out a little bit. >> i think you see it early and buy that flush and trade it for $25. >> karen? >> i'm holding, calls again. >> i think very similar to guy. what you do is play this range and you've got three more days to do it. friday, monday, tuesday. you buy it below the 578 level, sell it above the 610 level, i

think you'll get a couple more chances to do that based on the recent history we've seen here and i like mike's strategy upstairs with option action that he said collect that $33, keeping in mind that if it does run to 610, you'll be able to get $43 for those july options, that's what i'll try to do. >> next trade. shares of microsoft really popping off in the first quarter release. announced better than expected revenue and earnings per share. is this a window of opportunity to get into the stock? karen? >> i'm already in. but, you know, the 80 cents it's up in the after market or so doesn't make that much of a difference. i'd like to hear more on the call about their business. but this is another one. valuation very cheap. another balance sheet. hugely, you know, heavy in cash. they've done a better job paying out the cash. i like the story still. >> still about windows 8 ultimately. >> it is. and that's a fourth quarter play really. there will be computers designed for the windows 8 operating

system that we won't see until late summer. but this is very strong move out of microsoft here. you have to like how well they're doing and this is one of those disintermediation plays i've talked about because of the xbox, because people consume content. they don't just play games on that xbox. whether it's netflix, espn, or any of the other offerings, all the rest, you can consume a lot on that xbox. don't think that balmer and the guys at microsoft don't know that. >> let's bring in collin dennis, he is an expert in this stock. would you be a buyer at this stage, collin? >> i so am, simon. we like after earnings. this is a good value play. it's a nice, stable name. it's grown earnings twice as fast as revenue. and all of this talk about the pc market dying is a little bit overblown. this is the seventh consecutive quarter in a row this company has put up north of $5 billion in net income. you're talking $650 to

shareholders every single second. >> your price target isn't ambitious, though, is it? >> it's a name for value players and people who are seeking dividends and the technology space and also for people who want a little bit less volatility than what you're seeing in apple and google. it's slow and steady, growing 6% on the top line. we'll probably have to adjust up on good cost controls. this is not a rocket ship. this is a nice value play that pays a good dive end. >> my overcaffeinated friend, weren't you a bit surprised? microsoft has been a chronic disappoi disappointer on these things. i'm surprised, i'd thought you'd see a pullback at $30. here we are at $32, you say there's still further upside. i understand this, i own the stock. do you still think there's room to run? >> yeah, we're clearly at the top of the range, but you know, they are starting to show that they're able to address the weaknesses that have kept them in that range, which has been

primarily tablets and phones. i do think you're going to see traction with the windows phone with the nokia platform. i think you're going to see traction in the tablet space with windows 8. and then on the connect side, right, the whole natural user interface to recognize gestures and hand gestures, that could be a new leg of growth for them in 2013. so i like what they're doing, i like the product, like the valuation. >> collin, jon najarian, the coo w c.o.o. was talking on the conference call. they're being rewarded because of public/private, various cloud plays associated with microsoft, a company that maybe not a lot of people do focus in on just as i was saying about the disintermediation of content, a lot of people probably don't look at microsoft as strong of a cloud player as they are even though they run ads on television saying we're a cloud play. they're clearly saying they're a cloud play on the conference call and they're saying they're being rewarded for it now. >> you know, john, and in fact,

you were talking i think earlier about the xbox community. 40 million members on live. not only a cloud play in the enterprise but the consumer side. and they're the new number one cloud player out there when you talk to enterprise i.t. managers. much more than amazon or google. >> if you are optimistic on the phone, would you ever take a shot at nokia? >> so i don't have a rating on nokia. i think there's a lot of dog days ahead of nokia that are going to be thin margins while they take share the only way they can which is on price. but, you know, ultimately that strategy should work because they have a lot of marketing muscle behind that. we certainly know clients in nokia and are in it for the long haul. >> collin, if i believe the market is coming in, which i do, is this the best play as you said before? microsoft is your yielder play. is this the best play in tech for a safety bet for me or are there other ones we should be in? >> we tend to like more of these

1.0 companies. we love ed ebay and we liked microsoft. again, it gives you that exposure to the mobile marketplace and gives you exposure to, you know, the enterprise refresh. it gives exposure to search. so, yes, if you're looking for some stability, you're looking for a place to put money and get a yield that's above the average s&p 500 yield, microsoft is a name you should look at. >> collin, thank you very much for joining us. >> thank you. we have now breaking news -- >> oh, whoa, whoa -- >> what were you going to say? >> don't you love him? this guy brings the energy every time. >> caffeinated. >> overly caffeinated. but he's like a rock star now. he can't walk down the street. he gets accosted. >> that happens to you i imagine. >> no, no, no -- >> how many years have you been doing "fast money"? >> 17 1/2. >> unbelievable. >> started when i was 8. >> okay. just come on the program, we're going to talk about the action.

still we have to talk about chipotle, and mcdonald's, which is reporting tomorrow. what the read through might be. and we are anticipating also breaking news as soon as we get that, we will take you back to headquarters. in the meantime, we going to take a break, guys? >> sure. let's take a break. 15 minutes of fame? we can't promise that, but what about 15 seconds on "fast money," go to tout.com/cnbcfastmoney and submit a question for the traders. we'll play the best questions on air and download the tout apps to your smartphone or submit to your computer.

♪ ( whirring and crackling sounds ) man: assembly lines that fix themselves. the most innovative companies are doing things they never could before, by building on the cisco intelligent network. the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number.

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the cnbc newsroom with a new development in the case of former goldman sachs board member gupta who is battling charges that he supplied illegal tips to raj of the group. a different u.s. attorneys office, this one in los angeles is investigating another goldman sachs employee for allegedly passing on tips to raj

rajeratn rajeratnam cnbc has confirmed an investigation is underway. the stocks involved reportedly include apple and intel. no word on the identity of the employee, but the employee does still work at goldman sachs. this would go to gupta's claim he wasn't the tipster, someone else would. no comment from the attorneys office in los angeles or goldman sachs either. we're contng to follow it. simon, back to you. >> thank you very much for that breaking news. let's get to more of the after hours action. chipotle moving higher after the first quarter results beat estimates. we were 4 cents higher than consensus. do you like this stock, jon? >> i do like the stock. i don't trade it very often, simon. this was extremely active, by the way, the weekly options were just boom, through the roof. they're usually very low volume in this particular name. partly because it's a $400 and some odd dollar number and the spreads are quite wide usually in the options. for whatever reason, the

speculation was really strong to the upside in here. i have no position. but i do think it might be a nice read through to mcdonald's tomorrow despite some of the nervousness about mcdonald's. >> why do you say that? because the concerns about mcdonald's are more about europe -- >> because i don't think europe is at all what other people are telling me about europe, simon. i know you're not one of them. but there are these doomsayers about europe that i think have been completely wrong in terms of consumer spending. and in particular, at a low-end consumer spend like mcdonald's. i don't see that being a cutback. i see that being a potential ad in a downturn. >> warning that tomorrow could be a major feature. >> no, i love -- we've liked the stock for a while. the problem is people have bet against this for a long time on valuation. and i can see why at 40 times earnings, but they will get squeezed again tomorrow. their comps were great and their operating margins were better than expected. so i think this is a stock that's probably going to push around toward the all-time high

again, which is not much of a reach here, another $7 or $8. there will be an opportunity to sell the stock, i don't think it's now. >> i can't get on board this kind of valuation. great company, love the product, but i think 10% short interest is actually pretty small considering how big this company is now. >> this will interest you. our next guest says chipotle is among six momentum stocks that are now overbought. good evening. >> good evening. >> what does overbought mean? >> it means we look at momentum oscillators. i looked at the relative strength index, rsi and they give us traditional overbought and oversold levels. overbought means the stock has gone up too far and too fast and chipotle i think is one of those. >> will it fall? >> i think it will fall. look at the after-market activity today. we haven't gained what we lost in the regular market activity during the day. it's down from where you were 24 hours ago, but now we know what they did during the quarterly earnings.

earnings weren't enough to drive the stocks to a new high. it's overbought, gone up, we should take profits here. >> are you looking at the 50-day? that's what i found to be most useful? and chipotle around 405-ish or so? >> i also believe in round numbers and 400 is a nice round number. what you said, steve, before the commercial break, i think the market is getting choppy here. i think we may be due for a little bit of profit taking. you want to look at these momentum names like chipotle. >> what are the other names? >> one of the others was verisign, family dollar, sherwin williams. you lost money on the stock. starbucks is another name. you know, so those are the names we think are overbought. >> of those, which are the most overbought to you? >> i think the most is probably chipotle. it's a name i hear about quite a bit. >> and the next one? >> starbucks and starbucks is reporting next week. >> talk me through starbucks, then. >> the line on the bottom you're

seeing is the rsi momentum oscillator and we want to see that right in the middle. and if you look at the price action on starbucks, it was going up steadily for the last month or so. the angle of that increase has gotten a little too steep. i think starbucks can come back and i think you want to take profits ahead of earnings. >> just to push back. if these stocks flat line for a while, won't those rsis by definition come down a little and allow you to have the next leg in some of these moves? >> absolutely. that's the way they work. but i don't think they're going to flat line. i agree the market's getting a little bit choppy. one of the things, one of the reasons that prompted me to come out with these names. i'm getting a lot of calls from our clients asking me for momentum names to take profits in. i don't think it's going to flat line. i think it'll -- >> dr. jay, you're plugged into a lot of metrics, will this be at the top of your list? >> there's a lot of folks that believe, simon, that people are raising money for a whole variety of reasons. because stocks have made dramatic runs like apple, like

price line, like google, like chipotle and like starbucks. there's certainly a lot of folks that are in those high names and that are looking to take some off the table, whether it's for the facebook ipo or whether it's just that they say i'd rather not wait for earnings just as you said, sir. for that exit to come around. but my question to you about starbucks would be. so if you see a pullback, do you see it pulling back to around 52 or so? or do you think the pullback gets worse than that? or is it just a mild pullback? >> 53. so what we did was drew a support line underneath the prior trend and gets you right back to 53. >> you like those round numbers because it's 53 and a nickel basically? >> exactly. >> i'm trying to marry the premises. they've been a flight quality. so is that why the 50-day should be somewhat a support in these names? because people still love them? >> well, you've had pretty significant runs in a lot of the stocks i'm talking about, 25%,

30% runs and i think -- it's hard to see -- >> but the only problem -- i'm sorry, the only problem is people are told that their best bet of return is in the equity market. so even though they want to leave the equity market lock in profits, they don't want to leave anything on the table. so they wind up selling half and holding on half of a name like a starbucks. >> right. these are momentum plays. and i'm saying the momentum plays are going to get hit first when we do have that correction. >> nice to meet you. thank you very much for coming in with that. just play that where we are now, mike. what's your view and what you've heard? >> it's interesting because a look at the starbucks or u take sherwin williams, a lot of these names as interesting as it may be, these stocks are up a lot. the options are not outrageously expensive here. things like put spreads can really position you well, i think, for a potential pullback in stocks like this, especially if you're having a hard time getting rid of your winners. you know, that's actually one of the strategies we recommended in chipotle. you were able to insure about

10% of your downside going into some of these catalysts. and i think what you really want to do here in cases like apple, you've got these stocks rolling over and the options are big, sell it, in situations where the options don't have too much of a bid, people are acting complacent. that's when put spreads can be effective. >> let's play the volatility play book. the big sell just 1% today, but had some relatively violent moves throughout the day. where does that leave you now? >> well, we keep getting down and testing down to about the 50-day moving average and we can't break down through it in the low 17s. but we've gotten down there twice this week, simon, and then we've popped right back up, gotten above 19 and into the 20s. and we can't hold that either. so i'd look for the vix to continue to trade more or less in that range roughly 17 to 20, i'm a seller up on the upper end of it, a buyer on the lower end. october options come onboard next monday. so those will be listed for the vix. and i'd also point out echoing what mike said about apple.

apple a month ago was moving about $13 a day. apple the last five days has been moving almost $24 a day. it's moved $32 as i've said twice this week. $32 moves. and that's not with all of the ups and downs, that's just from the high to the low. >> if you were raising alarm bells over apple and therefore perhaps the broader market, wouldn't the vix naturally be higher than where it is at the moment? this is a very low level. >> it's a relatively low level, i agree, and i think based on the earnings reports that we've seen thus far, though, i think we're justified being around that $18 level for the vix. as far as apple, it's certainly living up to this much higher volatility right here with the uncertainty. one day somebody says it's max, max sales are going to miss. the next day is today, verizon, somebody's got to read through there that they're not selling as many of the iphone 4s. i think the volatility's here to be taken advantage of in apple.

>> more broadly, why was the volatility index down today with the market actually down? >> professionals that are really active in the trading of the vix rather than other derivatives have just been aggressive sellers of it in this range. i mean, like i say, it gets to the upper end of that range, aggressive sellers, down to the lower end, they're buyers. >> next on the program, we're going to talk about housing. has housing finally hit its bottom? a tough analyst reveals why the recovery is real in his view and the names that you should move into in order to play what he believes will be a significant rebound. more "fast money" comes up next.

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the big action tonight dropping in a flash down almost -- >> oh, that's clever. >> 8%. they come through, obviously, the main concern with sandisk is that the guidance, the range of guidance they're giving for revenue for the next quarter is at best at the top of that range $300 million below where the street was. >> so they have function -- just a function of pricing, lack of pricing power. is it being kmcommoditized. i would think it's sandisk and the space specific. they go down very quickly. if you want proof of that, look at a company like cree. the couple years prior, the run it had. once again, a competitor comes in the space, they get beat up again. i wouldn't look at too much of a read through yet. >> one sign that absolutely to what guy is saying here is that they were cutting dramatically -- they were cutting price to try to move

stuff it appears. and by that, i say you take a look at the gross margin, down from 43 to basically 35 and change. that's a really bad sign. in other words, they're really having to cut price to move any of the stuff. and that's why as you said, simon, they're going to be about $300 million on the estimates on the high end of what they're offering now as guidance. >> would you read that through to any other companies at all for tomorrow morning? >> i would not yet as far as anybody other than sandisk on this side. but this is certainly not good for them. >> all right. let's talk about housing. despite starts falling to a five-month low. our next guest says housing recovery debates could soon be settled and he's increasing the price targets across his coverage universe. welcome to the program. so without question as far as you're concerned, we have the recovery that so many times people have bet on before and failed. >> yes, that's correct. i think the debate goes on in the market about whether

housinhouse i ing's recovering orn not. showing a recovery already in place and happening. for example, we get some order data from markets around the country. those numbers are up 35%, 40% over the year. the macro data seems to be confused, but eventually those two should converge. >> let's get to the stops. the important thing about your research, you're saying to people, look, you've got to frame the way you see the home builders on an asset-based approach. and that is a game-changer from your point of view. explain that if you would. >> sure, exactly like builders basically investors should view them as land funds. and so the more, the more capital you have to invest into the recovery, the better. because remember, we have to double or more housing starts. so our focus -- look, there was a trade in the home builders from about october to about march or so. but going forward, it's going to depend on the pace of the recovery, of how much they can earn. you want to own the guys with quality balance sheets because

they can invest more into the recovery. >> before we open it up to discussion, what therefore are the strong buys in your view? and what upside could you see in the stock. >> well, the strongest return potential in our view is on mdc. the other names that you should be looking at are names like dr horton and toll brothers which we upgraded today. and the turn potential, trading about 1.3 times book value. and they could have earnings accretion and that number could range as high as two times in a recovery. >> i dig what you're saying, i don't agree with all of it. in your model, where are you factoring in interest rates to be six ninth, 12 months? that seems like that could throw a monkey wrench into your whole scenario. >> yeah, that's a good point. that is a risk. but it's actually not the main risk that we're worried about. on the interest rate front, interest rates are so low and home affordability is so high, we can stand volatility in rates

without damaging the really strong affordability of homes we have. so even if they rise as the economy -- if the economy continues to improve, that wouldn't be a bad thing. that would actually be a good thing because it would mean that the employment numbers continue to be strong and economic growth continues. >> there's no margin on the construction of sale and the house? >> well, that's a classic debate in the builders because you can't really parse the two. i would say that the builders basically make their margins from taking the risk of development. so from turning it into a raw plot of land developing and putting out homes and selling it one-by-one. that's where the margin is. you don't need to assume home price appreciation or land price appreciation to get earnings to normalize for this group. >> have a good evening. thank you for joining us. let's trade it around the desk. >> i wouldn't play with a home builder. i'd play it with a little bit of a safety bet with a home depot where it's right around 52-week high, yielding over 2%. so just in case you get a little

bit of a pullback or maybe he's wrong, now you watch your money just sit there a little bit safer than watching a real turn around story. a lot of these home builders heading south. >> yeah, home depot and not that it plays into it necessarily, but look at temperpedic. you can make the argument that sort of plays into the housing thing. well, if that's the case, what they said is not very good. karen? >> well, i feel like my bank of america position, i have home -- i have home price exposure, which is certainly correlated to an improvement in the home market. >> and that's enough? >> it's been more than enough. >> jon? >> i agree with karen and guy as far as select comfort, also good numbers last night, look at the reaction during the day today. down over ten at one point in the after hours tonight. so i don't think you want to chase these things late. he could be right, but i think you can wait until after these earnings come out.

>> microsoft clearly the stock that reported after hours and the conference call is about to start and we will link you live into exactly what it's being said. windows 8 clearly a major focus. coming up next on the program, we're also going to search for the best safety plays right now. your "fast money" portfolio is up right after the break. [ 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. ♪ ♪

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welcome back to "fast money" live from the nasdaq market site. we want to link you now in live to microsoft's earnings conference call. what are the headlines so far, jon? >> couple details, simon. one, development of windows 8 on both intel is on schedule. that's the most important thing. also, couple of details, business pc demand is up 8% and enterprise contracts doing quite well. unearned revenue stands at $15.2 billion, up 17%. back to you. >> thank you very much. next trade as volatility continues to shake up the market. investors scramble for strategies to overcome the turbulence. our next guest says now it's time for growth stocks and high-yield bonds. charles cantor joins us now on "fast money."

for the "fast money" portfolio. good evening. >> good evening. >> fundamentally you think that stocks are cheap here? >> i do. i think investors are mispricing risk. if you have the longer term view, i think there's a large margin of safety in equities. as we think about valuation, we think the stock market's pricing in about 1% future earnings growth into the future on average s&ps through any ten-year cycle delivered 4% to 6%. willing to take over on 1% for american ingenuity and global focus. >> interesting. guys, what do you think as a hypothesis? >> does that leave you to heavy equity portfolio? you're an overall -- >> we just think it makes sense for those that have the capital that have the longer term view, we think it makes sense to invest in equities and high-yield bonds, which would typically be classified as the riskier piece of the market. and in our judgment people are paying too much for safety. everyone's setting out large amounts of cash. at the end of the day, i'd rather invest into skepticism

than safety. of course, that's not true for everyone. because not everyone can afford to take the longer term view or have the capital for that. but the market is fundamentally cheap. there's no question that it's an unusual environment. but i'd rather allocate capital into risk assets into skepticism, which there's clearly a lot of than into an environment of euphoria. >> so when you look at very solid metrics like the amount of money that corporations are clearly stashing away, if you look at -- as you say the nervousness of the retail investor on the sidelines or you look at the nervousness of central banks with what they are doing with this massive injection of liquidity, how do you discount that and say actually, no, now is the time to be bullish? how do you discount what they are saying? >> i think the move into riskier assets doesn't happen over night. i think it happens over time. so it will take time to get people to reengage into assets.

my basic premise is, we understand that the world is uncertain. the headlines are imperfect. and the markets more than discounting that. and my bet is over time our companies that have a global focus can deliver more than very, very modest earnings growth. but it's going to take time and it won't happen overnight. >> so as those 17 companies that make up the eurozone, what are you factoring in? how many years of muddling around is factored? >> there's no question you need the central banks to stay firm on their commitment to keep those markets liquid. and if that happens over time, risk assets will find a -- will find a more normal level. but it's not just about europe. there's the rest of the world that is larger, some places more stable, some places grow more and over time this will shake it up. but it's not for the faint of heart and it doesn't happen overnight. >> of cantor's top holdings, it's an interesting list, which most appeals to you? of which are you most aggressively confident?

>> well, there's two types of businesses we generally like. the ones that grow that have a business strategy and very high returns on capital. they're a focus on something like duncan which enjoys about a 5% franchisee from the franch e franchisers and we anticipate about 15,000 new units to open over the next ten years. that's believable, long-term, we've got more duncan units west of the mississippi. another one would be something like target where strong balance sheet, investing in canada, canadian folks spend about the same on retail goods as you as investors. and there's an example where the market just fundamentally doesn't believe the long-term earnings profile. stated publicly anticipate that the dividends will go 18% from $2 to $3. and i think they can earn $8 in 2017. market believes it can't grow from here. >> great to meet you, charles. thank you very much for that. charles cantor joining us here

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capital one earnings tonight, $1.56, the stock reacting after hours. are you a buyer, jon? >> i was not a buyer just because if you beat by 20 cents and $500 million on the revenue side, you'd expect any of these other stocks to make massive moves here. capital one just kind of languishes. so i don't trade this one very actively. it's not on my radar, simon, as one i want to hold. >> record low, natural gas prices. a negative impact on capstone turbine. since the low prices are actually fueling sales of their low-emission turbines. let's bring in the president and ceo darin jameson. good evening to you, sir. what is the technology, then, in this environment?

>> it's like a small jet engine. it's clean, it's small, lightweight and easily retrofit into buildings, automobiles, almost anything with an electrical power source. >> you came to the attention of the producers because you seem to be getting orders left, right, and center. how good is business? >> business is great. we're growing 30% year-over-year. obviously in an economy, it's extremely tough with a lot of head winds. europe is always one of our better markets, it's a little bit soft. we're seeing great opportunities in the shale gas market in the u.s., oil and gas opportunities in the russian market and australia. more importantly with record lows in natural gas prices, we pñn produce energy for a customer at about 3 cents a kilowatt hour. free energy for heating, cooling, or processing steam. great opportunity for customers to manage their energy comps and control their futures. >> the shale play as a number of

my friends on twitter including real fly have said just recently. they say, sir, that you're really knocking the ball out of the park and they're very impressed with how well the shale is playing for you guys right here. partly, i guess, because a lot of these shale plays are kicking off a lot of the natural gas that you're then using right there on site, right? >> absolutely. they've got natural gas on-site. with natural gas prices, why buy power from the utility when they can use their own product on-site and have the same reliability or better with our technology. it's a no-brainer. getting over the new technology the capstone brings, it's the biggest hurdle. we got chesapeake, anadarko, marathon, they keep coming. it's a fairly small community. we have a lot of folks in one lease next door. they see each other, they talk about new technology. so the word is spreading very quickly. >> good to meet you, sir. unfortunately we're tight on time. darren jameson with the latest on that play. coming up, we're trading your tweets and touts.

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and welcome back to "fast money" live from the nasdaq market site in time square. let's take some of your viewer tweets this weekend. karen, you recommended a while back, are you still a buyer? >> i am still a buyer. this has been a very disappointing and frustrating one for me. i rode it up through the low 20s and all the way back. disappointing earnings last night. i actually bought some more stock today, but i have not done a good job with this one. it's ridiculous. >> let's tweet one more. one of the latest thoughts on flow serve. and i think this is to you again, karen. >> i'm long some flow serve. they do a great job, i just think i probably would not be a buyer right here of a new position. >> okay. your first move tomorrow. when we return, more "fast money" up next. the drive to live longer, healthier lives is causing vitamin stock to bulk up lately.

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