you got your head in the clouds today, dani. >> yes. always. >> nice having you here. see you back soon. >> thank you, tyler. >> that will do it for "power lunch," sue. >> all right, ty. see you back at the ranch. "street signs" begins right now. have a great afternoon, everybody. and welcome to "street signs" everybody. i am brian sullivan. the dow is down again thanks to europe. it is on the razor's edge of wiping out the dow's gains for the past year. and we are raising the flag for america. and we will show you the top ten companies that make most of their money right here in the good old u.s. of a. there's perhaps no city more american than detroit. but it's fueling california these days because we are heading to the motor city to find out if tech can really rock detroit. and how much are rim's patents really worth? investors hope a lot. america's leading patent valuation expert is here. and a beatdown, battered, bloody stock brawl, which is a better

buy for your money, rimm or facebook? >> that's exactly how i like my brawls, brian. remember yesterday's gains? they're gone. and then some. the dow having its biggest one-day drop in almost two weeks although it's off session lows. it was down about 173 at one point. the s&p 500 had been up in five of the past six sessions, but obviously today it's also taking a hit. the nasdaq also sliding. it's now on track for its biggest one-month drop since december of 2008. check in with bob and rick. bob, first to you. it really felt as if yesterday was too good to be true. we are up on no real concrete or significant news. and today we're back to feeling about, i don't know, we're going into a another euro summer -- perhaps. >> if it makes you crazy that there's not a lot of fundamental change in the news between yesterday and today and yet we were all the way up yesterday and now down all the way again, welcome to euro summer year two. that's what's going on. but i wanted to point something

out because everybody's really worried. may 30th last year, essentially what we're down today essentially in the s&p 500 is unchanged in the last 12 months. everybody should keep an eye on that fact. the big volume today, two groups, look at what's going on in emerging market etfs, very heavy volume as they're sitting right near their lows down here. the other one is continued massive volume going into the tlt, that's the biggest bond etf in the world. and this is an historic high. this fund is ten years old and this is an historic high price for that one. a lot of activity there. >> a lot of activity there. ye yeah. rick santelli, i've only got one thing to say to you, how low can it go? record low for the 10-year yield and counting. >> yes. and, you know, we're under 1.30 in a bund. 2-year german note that was issued as a zero coupon is trading negative yields. how low can it go? what's going to happen with

spain, greece, portugal. if there's significant news in the months ahead, i guarantee you we're going to see lower. but the question is do you need a stopwatch to catch it or not? we continue to see orderly buying, mandy. and, you know, the 5-year, 10-year at record low territory, 20-year about 30 basis points away. this phenomenon just marches on. >> it certainly does. hard to think remember our dearly departed mark haines said he would do a refinance if the 10-year got down to 2%. look where we are now? let's get to jackie deangelis for a market flash. >> a stronger than expected quarterly profit earning 44 cents a share excludeing items. analysts were expecting 41 cents seeing growth in civil defense and intelligence businesses. also highlight a special dividend of $1.50 a share on revenue guidance they're looking for flat or low single digit growth. seeing the stock up 13%, $2 on the day, i'll take it on a day

like today. >> certainly, jackie. and business with the government still remains pretty good. jackie, thank you. may, go away. please. it has been a month of misery for the markets. the dow now down about 6% this month basically wiping out its gains over the past 52 weeks. in fact, we're up about .008% since this day last year. it's very easy to blame europe. but should we? joining us now paul christopher, chief investment -- international investment strategist at wells fargo advisors and mark tep it founder of strategic wealth partners. mark, should we blame entirely 100% of misery this month on greece, spain and the brethren in the eu? >> can i take 99.99? >> sounds good to me. >> europe is most of it. there's still lingering worries over china as its slowdown stretches into the middle of the year. a lot of people ourselves included thought they would have bounced by now. we still think that's coming

though. >> it's sbreing. there are so many possible outcomes with regards what's going to happen in europe and china for that matter, it makes my head spin. how do i navigate this in terms of what strategy's going to work whatever the outcome? >> it's really tough right now. i think a lot depends on what somebody's duration is. and what we've found is that our clients that focus the most on short-term performance, those are the least successful people in the long run. one of the biggest issues that we're seeing is in the long run we're looking at really slow growth. and we're concerned about that. already proven once debt-to-gdp ratios cross 90%, growth will slow by at least 1% a year. last month they just released another research report that says that once a country goes above that 90% debt-to-gdp ratio, they typically stay there for an average duration of 23 years. so if we're looking at 20 plus years of slower growth here domestically, i want to be in high dividend paying stocks and i want to be in high yield

bonds. i have to focus on yield. >> this time is different. probably one of the five best investing books out there. paul, let's get back to you and talk about june 17th. because we have a very important election going on in greece. majority of our viewers at home may be thinking, well, that's nice, but why do i really care? is the devil we know, ie, greece, in the euro than the devil we don't, which is greece potentially out of the euro? >> greece in the eurozone is still the devil that's better than greece out of the eurozone. the costs to the core countries of the eurozone with greece out very high in the short run. and the uncertainty would really pile on on top of what we already faced here in this country. >> you know, if we want to get back to individual names here, mark, you said a moment ago stick with dividend paying stocks. i know you also like high yield bonds in a slow growth environment. let me get back to what you said last time you were on the show which was the 27th of april. i'm going to hold your feet a little bit to the fire here. j2 global down 15% since then,

deluxe corp. down 4.5%. lexmark down 16%. are you still sticking with your strategy? are you still sticking with those stocks? >> yeah. the strategy's a great long-term strategy. if we focus too much on short-term performance, it's going to hinder our ability to fine tune in the long run. involve return on invested capital, a good earnings yeel yield and paying good dividend. each are paying dividends of 3% or 4%. very solid companies. as growth slows, as small business owners really need to become leaner and meaner, those are going to become great plays to focus on that part of the market. >> and, paul, where are you advising your clients to buy in europe? yeah, i said buy in europe. any place? >> no. not investing in europe. >> not nothing? >> no. look at countries like germany

that are perceived as safe havens. those are capital surplus countries -- trade surplus countries i mean. if europe has more problems, if greece exits, the countries that will be hit the worst will be those that have current account surpluses. that's what happened last year. so we would not want especially for the short run be looking for those types of companies here. >> but you've got to invest somewhere. so if not europe, where's the best single place to invest right now? >> right. we would be going on the defensive side. we like indonesia, we like malaysia, we like mexico. and on the developed side we like japan. on the commodities side we like gold but sell silver. these are all defensive cautious picks that have done really well this year. we think we'll stay there for the time being. >> i think it's arguable whether or not commodities are pretty defensive right now considering they're all getting slammed at the stronger dollar. but paul and mark, thank you so much for joining us today. >> thanks for having me. >> if you haven't noticed, folks, we're feeling a little patriotic today. we're going to forget about europe and focus right here on investing in america. >> up next we're going to show

you the top ten companys that get the majority if not all of their revenue from the good old u.s. of a. and you'll see which ones are worth maybe putting in your portfolio. >> all right. and inside rim and its patents, right? could it be as ob 1 said -- that was lea, excuse me. we're going to crack open to the guy who knows exactly what they are worth. don't miss that coming up a bit later on. "street signs" always on the side of the force. >> or was it yoda? this man is about to be the millionth customer. would you mind if i go ahead of you? instead we had someone go ahead of him and win fifty thousand dollars. congratulations you are our one millionth customer. people don't like to miss out on money that should have been theirs. that's why at ally we have the raise your rate 2-year cd. you can get a one-time rate increase if our two-year rate goes up. if your bank makes you miss out, you need an ally. ally bank. no nonsense. just people sense.

all right. welcome back. with so much talk about globalization, one can be forgiven for thinking every major u.s. company gets a big chunk of its business overseas. that is not the case. in fact, many big boys are purely home boys. so what do these ten companies have in common, right? lowe's, comcast, well point, verizon, cvs, kroger, marathon petroleum, all ten of these companies get 100% of their sales and revenue and everything else from the united states. i'm not a math wiz, but 100 is all the percentage. and a lot of dividends as well. comcast 2.24. if you go through the dividends quickly scan them with your eyes, you'll notice only three

of these names pay a dividend that is lower than the current yield on the 10-year treasury. mandy, we've said investing in america, being patriotic, big companies, 100% domestic, most of whom have a pretty fat dividend yield. >> that is all the percentage, but is just being proud to be all-american reason to invest? joining us now is paul hickey. could you possibly say that being global -- globalization and diversification don't necessarily make you stronger? >> yeah. i mean, if you look at it, i mean, being global was so last decade it seems. from 2001 through 2009 international stocks vastly outperformed the u.s. markets. and, you know, we saw that year after year. strategists were telling you to go to europe and avoid the u.s. but even beginning in late 2008,

2009, you saw a bottoming process in the relative strength. as of now the relative strength of the s&p relative to the rest of the world is at levels we haven't seen since october 2004. so it's a big -- it's a big shift that we've seen in the last two years. and, you know, investors should be cognizant of it. >> yeah. absolutely. does that necessarily mean that you should avoid the rest of the world? should you be really putting all of your baskets here in the united states at least for the time being? >> our view for the last year or two has been to focus more on the u.s. obviously you always want some diversification. but, you know, right now what we've been seeing is, you know, we're saying that the u.s. markets are down because of europe and greece. if you look at the last two months, we have seen weaker than expected economic data in the u.s. and we do have some unknowns on the horizon here. i think in the next two days we're going to see some important economic data which will help alleviate fears that

the u.s. economy is weakening or stoke the fire that the u.s. economy is weakening. that will be the tell the next few days with the employment data and ism numbers. we have to look forward to everyone focusing on the debt problems in europe now come the end of the year some of that's going to come back to the u.s. shores and we're going to have to focus on that. >> like the internet and air travel, clear globalization is a fad. when we dig into that and look into the names we have on this board here, you know, verizon, wow, the yield on that thing is monstrous. the yield in fact is more than the 10-year treasury note. have you guys ever run a basket poll where you say throw darts at a dividend wall and the higher the dividend minus a 15% dividend which implies business risk, that's a better strategy to invest in now? can you just blindly throw the darts? >> i wouldn't blindly throw the dart. last year the high dividend players were outperforming for a while. starting out this year we saw the dividend players

underperforming. i think the relationship between all these stocks yielding more than the 10-year treasury is more a function of how low treasury yields are versus -- it's not like dividend yields are high by his tor call standards by any stretch. they're below their historical average still just on an absolute basis. >> certainly getting easier and easier to outperform the 10-year treasury yield. >> yes. so it's very little income. and, you know, but the tax treatment of dividends, again, we have to look forward to the end of the year. how are dividend taxes going to be treated here? are they going to be going higher or stay the same? >> very quickly. the always smart tim backshau says, brian, don't compare dividends yields on stocks to 10-year treasuries. different asset classes. is he right? >> i think one of the things that we like to do is focus on the yield. it's an apples to oranges comparison. you want to look at the yield on

corporate bonds. here the relationship is still the earnings yield of the s&p 500 relative to the corporate bond yields is low, you know -- >> uh-huh. >> stocks are cheap relative to the historical relationship there. but still, you know, you have a situation where, you know, valuations are low by historical standards but you can't throw blindly at the darts. >> thanks, paul. finer wise words from my fellow countryman. >> on deck, will the motor city become the new silicon valley? we will head to detroit for a look at how the city is trying to woo some top tech companies. >> and later on which of these black eyes is a better buy right now? bruised, battered, beaten down stock brawl coming your way.

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it's known for motown and of course the birthplace of ice cream soda. who doesn't know that? now it wants to be known for something else, technology. brian shactman is there. all right. brian, first off, what is -- it is true. the first news radio -- >> i didn't know that. >> i wanted to throw that out there. and good hockey. i wanted to throw it out to you, what exactly technologywise is happening in the motor city. >> well, brian, actually i think two words you used are perfect. actually happening. it's not on some white board or city planning, they're doing something. this building right here was empty a year ago. now it has three venture capitalist firms inside with a slew of technology start-ups. the interesting thing is there's a lot of young people, educated, smart, hungry, up there, and they're working for salaries that are pretty competitive in new york and silicon valley. a lot of them, sully, are trying to live and some of them are living in downtown detroit. >> all right. so many cities, brian, want this

business. they are trying to get it, right? >> yep. >> what exactly is going to win the business -- win the future for detroit? how are they going to stand out on this? >> right. that's the huge question. and one we've asked because obviously a lot of people are pushing this message on while we're here. dan gilbert is a billionaire, he has moved his entire headquarters into downtown detroit. he's also bought a ton of commercial real estate. and he's also started one of the major venture capitalist firms that's in this building. so his next move is to get into residential real estate. he's basically trying on his own of sorts to try to do this himself when it comes to technology. and he's pretty credible, i'd say. >> i certainly hope it works. thank you so much for that brian shactman. in the meantime our daily check on facebook. it is trading lower today, but it is nearly 25% below its ipo price. it has many critics asking if

the social network king is heading the way of myspace. so let's find out what one of the co-founders of myspace thinks about all this. and he is with julia boorstin at the all things digital conference. julia. >> thanks so much, mandy. i'm joined now by chris dewolfe, who is now ceo of social gaming network. you were ceo of myspace for six or seven years and co-founded myspace. what do you think of the facebook ipo? >> i think it's incredibly interesting because on the one hand it's incredibly exciting. it's the largest tech ipo in history. and everyone's been talking about this for years and years. however, there's no real metrics to gauge what it's worth. is it worth $69, $89, $140 million. i think everyone needs to wait and see. >> you sold myspace, you didn't go through the ipo process. what would you have done differently? >> what do i think facebook did

wrong? >> in terms of listing on the nasdaq and the stock is way down since the ipo. >> yeah. i think they've done everything right. i think the one thing -- great thing about mark zuckerberg is he really focuses on the product. he probably doesn't care that much about the stock price, just putting words into his mouth. i think he's thinking about what's next. how to make money on mobile is one of the big challenges that he's going to be facing. i think another big challenge he's going to be facing is the new transparency of being a public company. meaning do you look at revenues? do you look at user experience? there's always that battle between the two. >> so we have a helicopter -- must be one of the ceos here flying out. but your new company social gaming network in some way built on top of facebook's platform. you have 80 million installs. why are you interested in building a company built on top of social media? >> so we build our platforms --

we build our games on every platform, whether it's facebook, whether it's ios for ipad or for the iphone or for android on amazon. so that's a great thing about games these days. it's been incredibly disruptive that you can now make money on four different platforms. and it's been incredibly successful. and we just heard from zynga earlier today. it's a fantastic time for them. >> but when you look at some of the concerns about facebook, perhaps not growing enough in the mobile space, perhaps their growth is slowing overall, does that concern you when you look at being on top of their platform? >> we're fully diversified. so we -- when we build, we look at our games very differently than other gaming companies. we build our i.p. once -- which i think is very different than other companies. >> do you mind if i just jump in here, julia? >> i'm interested in asking you, sir. you say a moment ago you think

facebook has done everything right and yet their stock price since the ipo is down about 25%. so what would you attribute that to if they've supposedly done everything right? >> i don't think we can really judge facebook right now. i think let's take a look at them in six to nine months. i think what's happened is there's a lot of people that have been trying to get liquid. there's been a lot of negative consumer sentiment. there's been probably a lot of investment from main street investors that use the service and just wanted to be a part of it. and i think from that perspective, you know, there's a run on the bank to a certain degree. and i think today or yesterday was the first day where the stock could actually be shorted. and that's causing a lot of the issues right now too. >> so do you blame morgan stanley and the nasdaq for the stock's decline? who would you blame? >> i wouldn't blame anyone. i would look at it again in six months or nine months and see

how they've done. again, it's a company that started in 2003, 2004. they've created somewhere between $60 billion and $140 billion in value. i think that's a job well done in anyone's eyes. look at how long it took news corp to do that or disney or anyone else. my hat goes off to them. in terms of the ordinary folks that invested in the company, i think it's a good lesson for everyone sort of buyer be ware. >> but do you think this is going to hurt the ipo market moving forward? you said buyer be ware, is that going to hurt the ordinary investor when looking at these tech companies? >> i'm not sure it will hurt the ordinary investor. i think that one was particularly speculative because of the high valuations. i mentioned earlier, all the metrics were completely out of whack. so there was no credible way to value the company. you couldn't base it on price-to-earnings ratio. >> okay. >> you couldn't base it on a

revenue ratio. >> thanks so much, chris de dewolfe. >> thanks, chris, thanks julia. a much nicer set than we do, right? >> except for zuckerberg zipping in his helicopter disrupting -- we don't know that. all right. up next, apple, spotify, sirius and now samsung all are in or getting into the mobile streaming music business. does that open a great big box of nasty worms for pandora? we will debate. >> and the foreclosure five. the five hottest spots in the nation to buy foreclosed homes. that's when we come back.

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welcome back to "street signs." i'm jackie deangelis. a quick market flash on oil. we are watching oil down about $3 on the day. $87 and change. look at this one-month chart. you can certainly see oil has come down in the last month or so, rather that is the daily intraday chart. in the last month it has come down. the big question right now are concerns over global growth going to keep the prices of oil low? or are we going to see geopolitical tensions flare up and spike those prices back up? mandy. >> thank you very much, jackie

deangelis. stock talk time. how's the newcomer doing? >> doing really well. crushed estimates on the eps and same store sales side. the stock is up 40% year-to-date. relatively new ipo. november 5, 2010, priced at $22 going right after whole foods doing pretty well. >> this is another fairly upscale retailer going at a kpletly different direction. >> they are tanking. absolutely crushed. weaker growth than expected. that stock hitting an all-time low. they ipoed july 28, 2011 priced at $17. not the kind of ipo you want. >> what is the bet in ten years time you're going to be driving a tata? >> for me in my size, zero. absolutely no tata nano for me and apparently not for as many people as well. the stock is tanking. shares still up 37% year-to-date, but watch india. you'll probably talk about it on your friday night show "trading

global" free tease opportunity for you. >> excellent tease opportunity. never give one of those up. and finally another international stock, sony. this is just depressing. >> there's no news on sony, all right? other than the stock continues to slide. kind of gets lost in the rim, facebook, nokia shuffle. folks, sony shares are now at their lowest point since 1987. sony at 1987 lows. this was at one point -- >> it's a sony meant everything. >> in some ways this was apple ten or 15 years ago. they made -- i mean, you can write a book on the mistakes they made. i'm sure somebody will. hopefully it will be in english. >> i know there's no news today but add in there the strength of the yen is slamming sony, panasonic and all the japanese transporters right now. pandora down again today. continuing to see weakness after samsung released new galaxy phone with a new built-in music service. pandora facing a competitive threat from the growing online spotify. faced with all that can pan do r

ra continue to grow? let's bring in pandora analyst and john able, columnist for reuters. john, to you first of all. in what ways do you think pandora can still win? >> pandora has a space to itself. i think of pandora as sort of radio on steroids. so if you like listening to the radio and have like organic discovery like ser ren dipty, pandora is kind of perfect. it's really good on mobile. interface is great. it's different than itunes or google play or apple -- or itunes match. this isn't your own collection. it's very sort of certain se ren diptous. >> does it do anything completely different from services such as spotify? if i'm not wrong, if i use pando pandora, i can switch to spotify without being penalized at all.

>> spotify is more of a record store experience and pandora is more radio experience. pandora brings value to the table. they have a music g nome project which is a search engine that works on music. what pandora does is it searches through the volumes of 14 million songs to find the songs that match up with your preferences. and that's one of the reasons why pandora is competitive in the marketplace despite all the new competition. >> john, i pay for spotify premium, i also pay for pandora one because you get more skips or whatever. can the two exist side-by-side? how many people out there like me are willing to pay for both? >> well, it's quite a bit. i mean, if you own an apple device or ios device, you've got itunes. spotify improves that experience by filling in the gaps in the way pandora and rap city used to do. you don't have to buy stuff. you can rent it so if you're in

that ecosystem already, that's great. you're still going to want radio. look at sony. invented portable music with the walkman. we've always had radio. we have always had or collection. they've been synergistic. so, sure, if the price is right, $10, that magic number, people will definitely do both. >> richard, you raised your target from $10 to $13 after earnings but a market perform. thank you very much rich and john. >> thank you. >> shares of universal display getting crushed again today. let's welcome in our colleague from the shadows of cnbc. >> shadows. >> out of the shadows. >> step into the light, carol ann and herb. >> universal display is the name of the company. widely viewed as a company with a bunch of patents on organic leds used on screens and mobile devices. as i've pointed out before it's always been a pretty controversial stock which is why this is kind of interesting. on may 17th the company issued an ak that said "the broadest

claims on several of its patents had been ruled invalid in japan." it learned of one of those rules on may 10th. not only that on may 9th the company said "it believes there is a substantial likelihood that the patent being challenged will be declared valid" but as i write on cnbc right now there is -- cnbc.com right now there is a twist. it appears the claims on the patent in question were ruled invalid in japan by the japanese patent office. why the delay in the disclosure? well, i've tried over and over in recent days to get a hold of everybody from the company's ceo and cfo and their outside pr investor relations rep. so far no response. >> what does that say to you? no response. >> i don't know what it means. either they don't want to talk to me because they don't like what i've said about this company in the past, or they don't want to deal with it. i don't know. but, you know, when you call a --

>> deal with it, right? >> you don't want to see these kind of discrepancies. call a company and say i have a question about the timing of things, you would think somebody would get back to you. >> so what you're doing on international television is sending a shout out to universal display, please call herb greenberg. >> if we've got it wrong, let us know why. >> open invitation. >> look how polite he is. >> thuank you, herb. another herb favorite punching bag. >> number five places to buy bank-owned homes. another way really of investing in america.

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coming up on "closing bell," morgan stanley down just because of european exposure. is it time to buy back into that stock? we'll look at that. and with interest rates plunging again, find out why that may actually be bad news for the housing recovery. and many americans are up in arms publicly about the growing size of government. so why is former council of economic advisors chair, laura tyson, saying americans secretly love big government, they just don't know it? she'll tell us what that means from post 9 here at the new york stock exchange. >> that last topic will start some controversies. it's disaster du jour time. an old di but a goody. herb, what's up? >> what's not up is first solar continues to decline. the one analyst who's been really the most correct on it is gordon johnson of axium

reiterating a sell on the stock. one to continue watching i should point out by the way bank of america came out reiterated a buy with a $30 price target or something. >> that's what i call a controversy. thank you, herb. it's hard to find a ray of light in today's sea of red. monsanto up about 10% for the year. foreclosure factor seems to be waning a bit. the stigma atoched to buying a foreclosed home is going away. foreclosures jumped 159% since october of 2009. with that in mind, where are the best places to buy a foreclosed home? diana olick is here, literally, here in englewood cliffs with the top spots. >> that's right, brian. we reported in the last hour investors are still feeding on distressed homes buying up

foreclosure likely to take advantage of sky high rents. if you're one of them, where will you reap the greatest rewards? reo or bank owned properties. take a look down at number five is san francisco where foreclosure prices are down from a year ago averages about $308,000. now, i know that's pricey, but the foreclosure discount, which is really what we're looking at and the primary driver of this list is 38%. and rents in san francisco are the highest in the nation averaging $1,900 a month according to the national low income housing coalition. so, excellent investor returns there close to half of all home sales in san fran are reos, that's the highest share on the list. all right. coming in at number four, we have tulsa. tulsa comes in four. lower prices on the reo but still a good discount of 38%. rents are not going to be quite as steep, but for flippers the discount does work. coming in now at number three, take a look. pittsburgh, where the average sale price of reo is down 12%

from a year ago giving it a whopping 48% discount to regular prices. number two, this one was a surprise because of how expensive the market is, but boston came in at number two. foreclosures will cost you close to $196,000 on average. the discount is big. 49% compared to regular properties. and boston is commanding high rents thanks to big demands there. drum roll for number one. kansas city, missouri. great place to buy a foreclosure. kansas city average distressed price just over $73,000. pretty cheap. and the discount to the regular market, 51%. so of course if that's where you're looking, i will always say that was my birthplace. >> really is like rummaging around in the bargain bin. tj maxx. >> i'm not that high end. rim is on the ropes. after the break we're going to look under the hood and try to gauge what rim's patents may actually be worth. >> and then it is the battle of

the embattled stock. which is a better buy, facebook or research in motion? we'll debate that coming up.

take a look at rim. you know the pain. you know the story last night. and the stock down another 7%

right now. a lot of talk today, too, about research in motion's ultimate future. where is it going to go? more importantly, where is the value? people are pointing now to the i.p., the intellectual property. it's nearly impossible to value unless you have a firm. let's bring in chairman and ceo of intellectual property, trade patents, everything about patents. jim's in the investors hall of fame, enough. let's get to the interview. jim, you've dug into the rimm portfolio, does it have value? if so, any way to estimate how much? >> so good afternoon, brian. thanks for having me back. we manage and watch the rim portfolio consistently. and it clearly does have value. they have approximately 2,800 patents. most of them or a large majority are highly rated. in fact, 41% are rated a or a minus on our platform. it will be interesting to see how this develops. >> so it is, okay, a highly

rated patent platform. we know back six years ago ntp won a lawsuit $6 million some. r.i.m.m.'s portfolio is worth in the billions based on that deal. do you think it will be worth the billions, in the b? >> i think it's hard to say at this point, in large part because it depends on who the buyer is. things have changed over the last four years, both in terms of the court system and how they regard patents. and i tell you what it's worth. try to guess who might be and the software and a lot of people in that space, who do you think would be a natural buyer for this. and i know there have been rumors, get into the smartphone

business, who may get and assets of this type, simply to go out and license the industry broadly. >> bottom line it for us, jim. there's a lot of talk that maybe r.i.m.m.'s patents are old, outdated, the company seems old and outdated to a lot of people. are the patents good? is it a good quality patent company even though they haven't had a hit phone in years? >> it's beyond the product. the key diligence point is to understand what extent it's focused only on r.i.m.m. specific embody product and then second to look at the encumbrances. who have they already licensed? what business deals have they licensed and how does that impact the portfolio, for better or worse? >> jim, great as always. thank you very much. >> i'm going to bring in herb on this. what would be better for r.i.m.m.? >> whatever it can get.

really, whatever r.i.m.m. can get. when i think about this whole r.i.m.m. thing, all i think about with this company is that it is a classic example of what andy gross said in his 1996 book, only the paranoid survive. this may be the best business book and you were a classy guy. you were buried and and it's not very easy, sir. i deserve that. >> you are a class act. >> it's not a glass and facebook ipo and r.i.m.m. is down 5% over that period.

so what is a bit of a buy right now? research in motion or facebook? it's hypothetical, folks. joining me is managing director of webbook securities and jerome. herb is staying in the conversation. steve, what do you recon? r.i.m.m. or facebook? which is the better buy? >> well, with r.i.m.m. you've got a business model that is largely the market has gone to iphone and android and it's difficult to see a scenario where it has come back to salvage value. that's always difficult to figure out. >> salvage value? >> yeah, pretty much. >> with facebook you've got a situation where the stock appears to be still quite expensive relative to most of the fundamental models that you see. most of the estimates that you see for the company out the next couple of years, still a pretty heavy valuation here. but with facebook you have a very popular franchise. we have a stock that the public is certainly engaged in and

cares about. and this is a stock that could trade to a higher valuation and continue to trade at an even higher valuation, based upon the sheer popularity of the site and the sheer popularity of the stock. so i would lean towards facebook, although i don't find either to be a compelling value. >> so you would lean towards facebook but you wouldn't own facebook and you wouldn't short facebook because it may have a potential to go higher. what are you backinging her her? >> well, if we had to bet on one of them, we would definitely choose r.i.m.m. according to the valuation model, facebook would have to grow at a rate of 24% every year over the next ten years in order to justify today's price of $28 and change. on the flip side, r.i.m.m. already has market expectations

baked into the price. in fact, earnings will have to shrink at a rate of 10% for the next ten years and they are doing a great job about it. however, based on our short squeeze indicator, which is a proprietary model, suggests that r.i.m.m. has a high probability of being squeezed if there was any hint of good news, such as a takeover or a new product. >> well, squeezed how high? that's a question. that's a trade more than an investment. in fact, both of these companies, i would say, are highly speculative at this point. when i talk to smart guys, i say, where would you go into facebook? $20 they will start thinking about it. that level. so you have two very speculative companies that you can't really, you know, get fully behind it at this point. >> right. according to our short squeeze indicator model, r.i.m.m. ranks in the top 8% of all u.s. companies likely to be shorted. >> and i see that facebook should be trading around 22 instead of 28 where it is now. steve, i want to get back to

you. do you feel that they are not quite at the bottom for r.i.m.m. but there's no reason for the stock to go back up. what do you think about maybe the bad news is already in here? >> well, i think the bad news continues to play out. i think that it continues to be a dying product and they can't get it launched. it was supposed to be here for back to school. that's not going to happen now. the earnings model continues to deteriorate much more quickly than most people thought. i see no reason, if the shorts to recover here other than -- >> steve, do you think r.i.m.m. is going to zero? >> no, i don't think it is. they have $4 a share in cash. i don't think it's going to go to zero. it's going to go to 6 or 7. and the patent portfolio, yes, there may be some value there but that patent portfolio is getting old and obviously it doesn't -- you don't see android infringing on them.

what's so great to begin with relative to smartphones. there may be other applications but i don't know how you draw real valuation there. >> steve, jerome, herb, thank you. the record breaking price for this cool piece of pink ice. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.

[ female announcer ] it's time for the annual shareholders meeting.

♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ here's a sign of the