join us tomorrow for larry ellison live from oracle open world in san francisco. "fast money" is now, and don't miss melissa with the traders giving us their top picks for tomorrow. see you tomorrow. stocks open higher, but then something funny happened on the way to the final quarter. >> we are well off of the highs today on wall street as we approach the final stretch. i want to show you apple because part of the reason this market is coming off the highs is a decline in apple. >> what's the problem, traders? you're getting what you want. >> tell me where there's a central bank not printing money and, you know, i'll give you a lollipop. >> and the bernanke was in a particularly jovial mood today. >> i was once a member of the national bureau of economic research and called the 2001 recession. so i know how it happened. it sort of happens over a nice meal in a french restaurant. and there's a discussion of the data and everybody says, what do you think? yeah, okay.

>> it's a final countdown. here's "fast money" on the fourth quarter. live from the nasdaq market site in new york city's time square, i'm melissa lee. wall street expects stocks to fall this quarter. the average target for the s&p 500, 1,412. do you agree that the street -- with the street that stocks are headed lower in the fourth quarter? joe? >> well, i think the strategists' targets are reflective of where the performance has been year-to-date. so the hedge fund community is clearly underperforming the market. however, i'm going to react to where the market is. right now the market sits above as long as it's above there, i think the market goes higher. if it goes below 1,422, then the overweight type of trade we've had since the end of july, you need to neutralize that. additionally, the one thing i will not do even though the market continues to move higher is chase what has underperformed this year. i think that's a recipe for

disaster, coal, steel, want no part of it. >> in terms of the consensus target, we polled the street and averaged up all the targets and that's how we got the 1,412 number. this speaks to the surprise we've had when it comes to third quarter performance and basically mid year to this point in terms of the rally we had. no one expected this. >> no one expected this. it has been a qe type of rally. i'm with joe on this, you need 1,425, i'm not as precise as joe is with the .328. so i'm not that precise, but the bottom line is that we've had this rally on anticipation of qe, on qe, on the omt in europe, and if this level cannot hold, the market's going to start caring about some of the data out there. the fedex warnings and that type of thing. at this point, i don't think it is, and the ism data was fairly good and fairly encouraging, but the market has to hold.

i say 1,425, we go higher for the end of the year. the bull -- >> the bull costume? >> exactly. >> is a spanish bailout wrapped up in your belief that the markets will go higher? >> yes. >> that has to happen? >> has to happen absolutely by the end of october. >> j.j., where do you stand? >> i think we're going higher also. and, you know, really i think we may go up and touch 1,500 between now and the year end at some time. i don't think we're going to settle that high, but i believe based on everything going on right now. the market and see people out in the spx, out buying the calls, have been doing so for the last few weeks. and all we seem to see overall is bad news, bad news, it hangs in there. i like to see go a little bit lower on the 1,410 level if we can hold that, but my real belief is we'll test this after the election, we may come back down to settle just slightly higher, but i believe we have one more really good run first.

>> when you say buying the 1,500 calls, what expiration? >> through december, particularly for december. >> all right. scott nation's on the options desk, where do you stand in the fourth quarter? >> i'm a little bit bearish for a couple of reasons. one, china pmi was not particularly good. talking about the spanish bank bailout because we found out today they're only about 60% broke as we were afraid of. and part of the rally that we've had over the last couple of months has been google and apple and it's been in due to an absence of any news, any news at all out of europe. europe is back, they're rioting, they're unhappy, it was three years to this month we found out that greece had a big problem and, you know what? the problem has spread all across southern europe. and unless we get some decisive intervention, then we're headed lower. >> i'm glad you mentioned apple because the price action in apple today was not good. and it wasn't very good last week either, guy.

and that is and has been a key to this rally, even qe-3 induced rally. apple was a big part of that. >> yeah, and we've had other instances where apple sold off and the apple story is over. and three days later we're making new all-time highs again. and i suspect that this is going to be a similar type of move. again, i suspect. if you want me to answer -- would you like me to answer this? >> i would like -- >> this question? >> yes, please do. >> we're all waiting with baited brea breath. this is not unlike going to mcdonald's having 19 cheese burgers, which i have done before. >> you have not. >> i swear to god that's the truth. >> how long? >> with that said, would you rather be right or make money? in my heart, i know this does not end well at all. but as long as we stay above 1,425, i believe that the market's going higher. so they've put me in sort of the bear camp.

i clearly, some miscommunications. >> but comparing the rally to eating 19 burgers at mcdonald's disgusting -- >> it's true. >> was that part of a contest, by the way? >> that was one of my buddies, we had a long night out. there was a walkup window on the west side, not a drive-thru, a walkup, and i ordered -- actually ordered 21, but only had 19. >> these things are really important, number one, you have to watch technology. technology has to be the leader again. if technology is not the leader and i think what you do here is you look at the conditions where the market is reversing or changing momentum. but technology should be a focus. the other thing, everyone here is looking at the same thing and that's kind of scary. everyone's telling you 1,420, 1,410. make sure you are first. when you get out. >> all right. let's move on here. q-4 shaping up to be a make-or-break quarter for

microsoft. the company getting a downgrade from rbc, a less than enthusiastic response and today google surpassed the company in terms of market cap. we ask the question, could microsoft be dead money once again? joining us now on the fast line is senior analyst at ubs. and brent, you know, the run in microsoft from december to date has been unbelievable. at the same time, at this point with more and more data points coming in from the pc industry as well as the chip industry, can you be a microsoft bull but also see and believe in the secular decline in pcs? >> yeah, i think you can be a bull given the valuation, reacceleration in revenue. and remember, no one wakes up and says they want a brand new os, they say they want a better experience, and the windows business is about 24%, 25% of the revenue. the other portion of microsoft's business is doing very well. the server business, the mdb, the office business. there are a handful of other areas doing very well. and offsetting the weakness in the windows business.

so we do think that, again, the near term risk is that q-1 looks to be a like quarter, the pc supply chain is extremely negative on pcs. and i think we're at a critical juncture. i don't think q-1 will be a make-or-break, i think the december quarter will be the make-or-break. we're going to be watching december very closely here. >> brent, brian kelly, you mentioned the new products for microsoft. i know a lot of the anticipation was the windows 8 and their mobile strategy and how that was going to work. there's been some bad reviews of windows 8 recently. where do you come down on that? will windows 8 and your mobile strategy work over the next quarter? >> i think windows 8 is a tweenor, it's not vista and not windows 7. no one is planning on moving to windows. it's more of a consumer-oriented

launch. i think microsoft will have to fight to get the respect from the cio, but i think what's interesting inside of that, they're still moving to windows 7. so they're still getting paid as they go up. and then what gets really interesting is the street has not given them any credit for a great server business. the server business is actually bigger than the windows business but no one talks about it, right? brand new version of the os on the server side, brand new version of the server. whole new product of data bas where they had a 20% plus price increase. i think they're doing a lot of great things. but again, it's so focused on windows 8, there is a bigger picture. this is an $80 billion organization in the windows business today again about $19 billion in revenue. >> so, brent, i think the real question for a money manager or even the investor is has microsoft now been -- is it in essence in income, not a growth

story anymore. growth is forever dead? >> it is, it is as i call it more of a value name. what's been consistent is the stock has traded up into the last three major product launches since 2007. that playbook played out again, what's been inconsistent is after the launch. and it's really been predicated on the strength of the product launch. so i do think, again, the dividend yield's close to 3%, we still think total revenue in earnings this year. but it's struggling to get the respect that salesforce.com, where service now you go through the list of these companies, they're certainly getting more of the respect and even as you mentioned earlier, melissa, google passing their market cap today. >> so microsoft is a great business, but you wouldn't recommend it at this point? >> it's a different caliber of investor. for our investors, you know, there's value investors that are seeking safety in income. that falls into microsoft. if someone's looking for large cap growth, salesforce.com,

vmware, there's a handful of other names that are way better positioned in our opinion. >> got it. thanks for the time, appreciate it. we have that massive run, sounds like that massive run may have petered out at this point. >> i'm still in the microsoft camp. i understand it can trade lower from here, but i think this is a stock and we've said this for a while now, you can own -- i don't think you're going to get low enough to be low in microsoft. i think the balance sheet is impeccable, i don't think it's going to $40 tomorrow, but i don't think it's going to $25. >> that seems to be the trouble spot. >> yeah, trades more like an old-school stock, so to speak. and i think, joe, you hit on something very important. if you want income for a stock that's probably going to stay in aing tight range, which we've seen it do recently, you know, above 32 would be a dream, but it seems to hang in there at the 26 level. you can get some nice return on it. so i think if you are going to

go in and buy it, that has to be your goal for that. >> what are you seeing in the pits? >> well, unfortunately the stock's had seven down days in a row. down to about $29.50 today. and option traders are starting to believe that windows 8 is not going to be the fire under the stock they were hoping for. we saw a giant put spread bought today. somebody bought 44,000 put spreads. so 4.4 million shares of the october 27, 29 put spread that paid 32 cents, that means their break even is 28.68, which is a really, really important level. that's a double bottom that we've seen over the past six months. so somebody's thinking that they want the pain to stop, they want some protection because they're afraid that if it goes through that 28.68 level, it's going to go through quite a bit. >> that's absolutely what's going on right now from microsoft. guy's camp here, in joe's camp, you want income, you buy microsoft, microsoft around 26,

27. >> going to take b here. it is the power house company behind hits like "mad men" and "hunger games." all about the fall lineup and what new potential blockbusters are headed to a theater near you. and stick around for that interview right after this break. [ male announcer ] the markets keep moving. make sure the news keeps coming with thinkorswim by td ameritrade.

use the news links breaking stories with possible breakout stocks, options with potential opportunity, futures and forex with in-depth analysis. it's an all-you-can-eat buffet for all things trading. thinkorswim by td ameritrade. it doesn't just deliver news. it's making news. trade commission free for 60 days, plus get up to $600 when you open an account. plus get up to $600 mike rowe here at a ford tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer. for the spender who needs a little help saving.

for adding "& sons." for the dreamer, planning an early escape. for the mother of the bride. for whoever you are, for whatever you're trying to achieve, pnc has technology, guidance, and over 150 years of experience to help you get there. ♪

since 2001, amazon's revenue, market cap, the number of customers were virtually identical to netflix in 2011. that's the kind of upside netflix has if it executes well. i see both of these as global businesses.

>> shares of amazon up nearly 1,400% in the past ten years, but could netflix have the same kind of growth potential? remember, if you've been following "fast money," you've heard him on this program explaining how he was short netflix not too long ago, he reversed the position, went long, but this degree of bullishness is in a league of its own. >> i mean, certainly whitney sees something that the rest of the market isn't seeing. there has to be a strategy to get it to be amazon. what amazon is great at, they're a fantastic online retailer and they can have multiple channels and multiple products. as i see it, netflix has one product with very low barrier to entry. but perhaps whitney sees something else in this, he's a very smart guy. so, i have to go with that. >> what i would have loved to ask whitney, what happened to the fear about content costs rising. we see with every single negotiation that comes up, they want exclusivity of content. >> yeah, clearly whitney sees

something, and i'll say it here, he's a lot smarter than me. but i think it's one of those things where if you get a little bit of a run in this stock, prone to placing things on the short side, it'll be a tremendous opportunity. >> going up from 800 million to almost 2 billion. you're talking about growth and talking about how do you monetize growth? you mentioned google before. the best thing they did was talking monetizing mobile. that's what google does. they monetize mobile they're at a 20 p/e, netflix, it's a 30 p/e. how is netflix going to monetize? how are they going to get the growth? that's the problem. >> we should say that whitney often sees things that a lot of other people don't and has made a good living on it. we'll follow that trade, of course. how are the major entertainment companies positioning themselves for more presents in streaming content? joining us now is michael burns. always good to see you. >> thanks for having me again. >> and of course, the company

produces the content, the distribution channel is a matter of who you partner with. does it matter that it's netflix versus amazon at the end of the day? >> well, i think you're right, we're pretty agnostic as to who is going to carry our content, who's going to stream it. we were very excited that they made a deal with amazon recently to carry the epics movie nine days after the traditional msos have it. so we have amazon as well as netflix. >> do you feel as a content producer you have more leverage these days when you're hammering out these agreements, you don't need to agree to exclusivity to content for one channel and you have more say in pricing? >> i think it's really just math. we look at it -- we would be open to the idea of exclusivity in certain territories as long as the exclusivity number was higher than the combination of the nonexclusive partners we had. >> michael, $800 million credit facility i think you just announced last week if i'm not mistaken. do you speak that or is that

sort of not that interesting. >> it's interesting to me, i think it's interesting to your viewers because it's going to save us a boat load of money. we're big fans of raising money when you don't necessarily need it. so you have a great, oversubscribed banks led by jpmorgan. so we have an $800 million borrowing base facility at libor plus 2.5%. so what happens is we'll be able to take out our more expensive debt with that at the appropriate time. >> so when you're talking about 500, 600 basis points, pretty soon it adds up into real money. >> we've seen a lot of films lately, not the upper tier, but kind of second level where they're releasing two theaters and on cable at the same time. do you think that's a trend we'll start to see more of? >> we have a sister company roadside attractions we do a lot of business. we did that with margin call. we recently did that with arbitrage. we think that is the future with the right type of movie. i don't think you're going to see us do it with anything like "hunger games" any time soon,

we're shooting the sequel now in atlanta. but my sense is for the right type of movie for the right type of audience, it makes sense. >> one analyst on the street is calling it one hell of a quarter. i don't know if you agree or not, but what's in the pipeline for the next quarter? >> well, look, i'll tell you that the majority of our money for "hunger games" dvd which is obviously a blockbuster, our package media side did a great job and jim packer on the digital side is sort of setting records. most of that money comes in october, which is in our third quarter. but i'll tell you we're comfortable with the directional guidance we gave with the $900 million of ebitda over the next three years. so, again, our story's pretty simple. we want to delever dramatically. that's part of the reason we took cheaper money right now and you'll see us continue to do that which obviously that won't affect your ebitda, but your earnings. >> everyone's looking forward to "catching fire." i am. >> to what? >> "catching fire." >> get with the program. >> i am too.

>> started production, right? >> it did. i was in atlanta thursday night and picked the right night to be on the set. francis laurence is directing the movie, looks like a giant blockbuster, which we sure hope it is. but we also have other things in our pipeline like "divergent," which is a book series we bought and a trilogy of books and it's outpacing both twilight the series of books and hunger games a the this point in the life cycle. that's exciting. >> i don't know if you whisper to anyone on anger management, but guy would be perfect to fill in on an episode of "anger management." >> yes, he would. we start airing the show in january. >> excellent. all this chase now for streaming content and you see what verizon's doing for coin star. do you think there'll be -- not necessarily with you, but do you think there'll be consolidation, acquisitions, partnerships that there has to be for this to perfect itself the transitory model to more treatment streaming content? >> i think they're ultimately in any sort of life cycle like this you're going to see

consolidation. but i don't think it's going to happen immediately. i think what we're seeing is actually new players emerging. for example, in the uk, which we couldn't sell our movies because there was a virtual monopoly on sky and the uk. amazon came in and has a deal with netflix. i think that's going to help around the world. >> we were just showing your feature film lineup for the rest of the year. if i can only go to one movie for the rest of the year, which one should i go to? >> it's hard to say. we think we have an award contender "the impossible," that comes out, that'll be a platform release in december and go wider. we think we have a chance to get awards there. "perks of a wall flower" which we'll be expanding october 12th, emma watson is fabulous in the movie and that movie was only on 100 some screens last weekend, did very well. i think you'd like that one. and i think that you'll end up, again, it's hard to pick a favorite child.

>> good answer. michael, always good to see you. thanks for dropping by. >> thanks for having me. >> vice chairman of lionsgate. >> michael knows, we've been behind michael for years now on this show since it was a $6 stock now close to $16. and even at current prices, now all of a sudden the analysts are getting onboard, bunch of people just upgraded the stock. i think piper has $22 price target on it. it's a great story, i think it continues higher. >> "catching fire." >> what is? the stock? >> you still don't know. >> that's a hunger games -- come on, i know. i feign ignorance sometimes. >> feign. yeah, that's your excuse. it is the first day of the q-4 and we here at "fast" are making sure you're getting off to a strong start. coming up next, the man telling you exactly what to avoid now through year end. and our trade of the day still on tap.

it's one that plants all the right seeds for profit. stay with us because we'll lift that curtain, reveal what it is later on in the show. when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers...

...so they can inspire our students. let's solve this.

welcome back to "fast" live, petsmart up 3%. in the s&p 500. >> great company. >> the dogs. effective after october. >> see that, you're just talking right through the dog barking. >> well, when i talk, i can't really hear what it is necessarily. and then i realized it was dogs and i made reference. >> that's our crack staff back in e.c. getting it done. great job. way to go. >> you can tell, that's the reason why they wanted us to talk about that one. >> can we talk about it real quick? >> yes. >> the quality of company it is. makes the 52-week high. i can talk right through those dogs. the growth -- got it and it's cheap. only trading at 22, i love those, i've got two of them. >> they eat better than i do

when i shop at petsmart. it's a great company, it's something i wouldn't cut back on so i don't think anybody else does. it'll be safe in a downturn. >> i think you have two dogs, as well. >> yes. >> -- in certain areas. no, keep them in the kitchen. >> i can sense the e-mails coming. >> just saying. let them cuddle up with you at night. >> all right. let's move on here. what are some of the mistakes you can avoid in the fourth quarter? let's asked rick edelman, rick, great to have you with us. >> you, as well. if you want to have a whole lot of fun, next time play a doorbell. every dog in america will be barking. >> we'll have real dogs barking. at this point, how are you recommending your clients position themselves for the fourth quarter?

[ doorbell rings ] [dogs barking ] >> is there a change in portfolio with the new quarter? >> specifically with this quarter, the elephant in the room is the election. there's so much uncertainty, not just because of the election itself, but all the other issues that we all know we're facing. our attitude is this is a period of time where we should -- it's not so much what you invest in, but what you don't invest in that will be making the difference. >> what should you not invest in? >> this is not the time in a nutshell to not make any big bets. and to focus as much even more so on risk as on return. so what we're doing for our clients predominantly is investing at a very extraordinary diversification mode where across the entire array of the global financial marketplace 18 different asset classes in market sectors, we're about 45% in u.s. stocks, which

encompasses the entire range. everything from the dow to the nasdaq and everything in between, small and mid large cap growth and value. we're using internationals, about 10% of the portfolio, maybe up to 15%. and, again, diversifying it across 40 different nations. the real key we're focusing on right now is the avoidance of something that might happen on the negative side as opposed to good news on the up side. >> hey, rick, so with that, what will it take for you to kind of -- it's a two-part question really. what will it take for you to change this portfolio? and you say it's 10% international. are there one or two countries in particular? with what's going on in europe, it seems hard to believe you'd have a lot of money there right now. one or two countries inope you're focused on? >> you're right, although we tend to take a contrarian view about it. since everybody hates europe and with good reason, chances are prices are a little low right now and there are bargains to be had. so while everybody is complaining about the country,

spain, for example, there'll probably be opportunities there because people are very nervous about it. but at the end of the day, we don't see any of the european bloc countries going broke. we believe they are going to work this out, but unfortunately, politicians tend to wait until the last minute, they love to take you to the edge, so when they vote for something unpopular they say, i don't want to but i had no choice, sort of what happened in august 2011 as we might recall. we're also very big fans of the far east. >> rick, unfortunately, we'll have to leave it there. we hope to see you again some time soon on "fast." by the way, when we said he was top-ranked, he's number one ranked by barron. >> top dog. >> top dog. all right. time now for pops and drops. and those you might have missed. >> barnes and noble, cut the price of their nook which will

affect their top line and with that they took a little bit of a hit today. >> got a pop for tenent healthcare. >> a three-point plan. well these guys had a four-point plan, not least of which is the stock buyback. we've talked about thc for two weeks and probably 11% or 12% higher, i think it still goes up. >> pop here for southwestern energy up. >> if you look at this year and look at the headlines on oil, look at the headlines on natural gas, you would think oil was up 30% this year, oil's down 6%, natural gas up 16% and j.j.'s neck of the woods is going to get cold over the next week. stay with natural gas overweight bio. >> swn. pop for macy's up 2%. >> yeah, it's time to think about the holidays, practice ps that chilly weather will get you in that mood. macy's said they're going to hire 80,000 people for the holidays up 2.5% over last year,

and a good day for good news. >> drop here for wendy's down 6%. scott? >> downgraded the company today to a hold. really interesting, they're worried about same-store sales, but in the long-term, this analyst still likes the name. so this is a short-term downgrade. >> and we got a pop here for russian friends. good news for you and your pen pal, facebook could be one step closer to opening a russian office. mark zuckerberg met with dmitry medvedev earlier today. he urged the founder to open a new office in his country. in a rare move, zuckerberg even left behind a hoodie and wore a suit and tie to meet with medvedev. >> let's just leave it at that. >> yeah. >> pop here for goldman sachs. up 2%, j.j.? >> we all saw that article on

goldman sachs, very positive, stock following suit today and may be upside. >> drop for sprint. >> raymond james downgrade, i think this is probably a good opportunity to get back in the name on the long side. >> big pop, cbr energy up 9%. >> big pop, this icon is very happy. we had a conversation with him way back when we said we didn't think he'd be able to find a buyer. what he did do, he does very well. he's going to make a lot of money on this deal. going to have a spinoff, mlp raising 300 million, refining sector on fire stay with it. >> pop here for delta airlines up 3%. >> yeah, actually, joe mentioned earlier that oil is down 6% for the year and the airlines are the ones that are the beneficiary. they've been able to raise the prices. i don't know if you've flown recently, but the planes are jammed, cut back on capacity. >> i was on virgin america. >> daniel jonas, big fan of the show. >> the wife of kevin. >> she's got her own show, "married to jonas."

>> 3m, up 1%. >> 3m has an advance ceramics maker paying $300 million, which is a 40% premium, but it's going to be accretive right away, the companies says. unusual in this the acquiring company is higher once they announced the deal. >> we've got finally a pop here for the cds. today marks the 30th birthday of the commercial compact disk. the sales have waned and hundreds of billions of cds sold in the past three decades, billy joel was the first commercial album available on cd. the first to reach 1 million in sales, brothers in arms released by the british rock band. >> it's the last new band i liked. >> the last new band. >> i don't know how, was i not clear? that's the last new band i liked, dire straits. just saying. all downhill -- >> downhill. you stopped. >> where do you store all your cds nowadays? >> got a huge case.

>> they don't make cases. >> that's one of those ghetto things you buy at best buy, i've got something nice. >> i went to sharper image. >> exactly. >> 200. little something called itunes. >> well, you might be in luck, up next we'll tell you about the fun that can get you in on some of the biggest activist moves on the street. stay tuned. [ mujahid ] there was a little bit of trepidation,

not quite knowing what the next phase was going to be, you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids. it's my world. that's my world. ♪

welcome back to "fast," live in new york's time square. do you like the way carl icahn invests in his funds, but you don't have the dough to invest alongside them? there is a way to do that and outperforming the market. returned 15% in the past year. for more on that, let's bring in the portfolio manager of 3d activist fund. good to have you. i'm curious of what your biggest position is and therefore in which manager you have the most confidence. >> well, my biggest -- i have a lot of -- it's weighted on somewhat of a disciplined basis.

haines celestial is a big position of icahn. a lot of these have done very well over the year. correction corps. >> and how do you use the information? because a lot of times investors get this information from the 3d filing, it could be dated. we don't know what the cost basis is, how they're investing exactly. if you get the filing, what do you do then? >> we do most of the time know what the cost basis is. it's in the filing and basically analyzing the event, the 13d event. i've been doing this for 13 1/2 years, i have great contact with pretty much everyone in the industry. so in my -- even in my research reports i send out, i have some commentary and color that is not in the 13d. and i also have spent years knowing the styles and philosophies and habits of the activists. so it's a lot easier to handicap

these types of situations. >> so you said that you're in touch with these activists, you have relationships with them. do you get involved in the activism, as well? >> no, i do not, you know, do not get involved in the actions. we generally will vote with the activists as investors coming into the fund are coming into the fund because they believe in activism as do we. we'll vote with the activists, but we don't take an active role. it's a passive investment. >> do you typically follow through until he or she gets rid of his or her position? >> generally, but an interesting nuance on the sell side is bill ackman or carl icahn will sell 1%, which they're legally required to disclose and i'll probably sell my whole position then, i don't need to wait for the 15% to come. >> let's walk through what is a great example today and that's icahn with cvi energy.

>> well, we tendered at 30 and we had the contingent value right, which i thought was a great, great -- which was a great decision at the time. even paulson at one of the conferences said his investment of the year. but, you know, because of the fracking spreads, obviously the stock is up to 40 today. and he makes more money, he does great in the public investments, he makes more money taking companies private, redoing them, selling them than he does publicly. >> are there positions activists have taken where they say i don't get that, i don't see where they're coming from? >> absolutely. >> and i'm thinking bill ackman, a lot of people wondering what is the strategy behind proctor & gamble. so i'm curious what your opinions of that specific investment, but also other examples of perhaps when you said, you know what? i'm not going along with them. >> well, proctor & gamble is not an investment we'd invest in.

it's not a 13d position, he only owns 1%. there are some activists that can do that. relational with pepsi and home depot has made a lot of progress there with 1%. and bill could do it at proctor & gamble. i haven't really focused on that situation because it's not a 13d, but, you know, i'll give you an example. john paulson at hartford insurance. i did not get involved in that because contrary to popular belief, paulson is not a real activist investor in the 13d filings. a lot of people think he is, he isn't. there are other activists i like them, for instance, in one segment like consumer goods and services, but not much in industrials. so i'll stay away from the industrials until i see a track record there and i'll put more money into the other sectors. >> ken, thanks for coming by, we appreciate it. >> thanks for having me. >> and you can hear more about bill ackman, his latest moves, next big trade on "squawk box."

starting at 7:40 a.m. eastern time. and tonight, still awaiting the headlines coming out of the value investing congress. coming up next, we continue to tell you what to watch for, stick around to find out, one big question that remains for europe this quarter. get the trade to help you play it. more "fast" just ahead. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong. tdd#: 1-800-345-2550 after that, it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan.

tdd#: 1-800-345-2550 with the new global account from schwab, tdd#: 1-800-345-2550 i hunt down opportunities around the world tdd#: 1-800-345-2550 as if i'm right there. tdd#: 1-800-345-2550 and i'm in total control because i can trade tdd#: 1-800-345-2550 directly online in 12 markets in their local currencies. tdd#: 1-800-345-2550 i use their global research to get an edge. tdd#: 1-800-345-2550 their equity ratings show me how schwab tdd#: 1-800-345-2550 rates specific foreign stocks tdd#: 1-800-345-2550 based on things like fundamentals, momentum and risk. tdd#: 1-800-345-2550 and i also have access to independent tdd#: 1-800-345-2550 firms like ned davis research tdd#: 1-800-345-2550 and economist intelligence unit. tdd#: 1-800-345-2550 plus, i can talk to their global specialists 24/7. tdd#: 1-800-345-2550 and trade in my global account commission-free tdd#: 1-800-345-2550 through march 2013. tdd#: 1-800-345-2550 best part... no jet lag. tdd#: 1-800-345-2550 call 1-877-561-5445 tdd#: 1-800-345-2550 and a global specialist tdd#: 1-800-345-2550 will help you get started today. if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help,

but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this. mike rowe here at a ford tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer.

♪ gains versus the u.s. dollar in the last three months. let's bring in the director of foreign exchange. amelia, good to see you. >> you too. >> one prognostication made by our own beaker on this staff

minutes ago is that spain will, in fact, ask for a bailout by the end of october. do you agree with that? and what is the scenario -- what do you think the euro/u.s. dollar does under that scenario and for how long? >> it's a good scenario because spain has regional elections on the 21st of october, and most think they're going to request a bailout after those elections. i think euro/dollar is going to pop on news of a bailout request. because every time there's a rumor that they're going to have a bailout request or make one, euro pops. the problem with being long euro, though is that it tends on a multi-week basis if you're long euro, euro needs continuing news to help it sustain those gains. i think it could move higher, say 1.34 on a spanish bailout, i think people are going to take profit or short it. i don't think investors are going to want to be long euro into the new calendar year. i think it's too risky. >> right. for now, though, you're recommending aussie dollar. >> tonight is an important event

for australian dollar. the market kind of split on whether or not they're going to actually cut rates tonight. the market's pricing an 18 basis points of 25-basis point cuts, but economists surveyed are split on whether or not they're going to cut rates tonight. i think it's worth a chance to short aussie dollar. i think they will cut rates tonight. i'd like to enter a short position lower than we're trading now, 1.03, i look for a move down to 1.02, and that decision comes past midnight tonight. >> all right, amelia, good to see you. see you friday. >> yeah, you bet. coming up next on "fast," a play that's sure to harvest a bounty of profit. stick around for the trade of the day after this.

when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen.

and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade.

welcome back to "fast money." breaking news on jpmorgan, a new york state attorney general's office moving to sue jpmorgan over claims that bear stearns had packaged loans and misrepresented the quality of those loans before the financial crisis. now we should note that this happened before jpmorgan

actually acquired bear stearns, these are legacy assets and legacy liabilities from the bank. and we should note also that a jpmorgan spokesperson says that the new york state a.g.'s office did decide to pursue these claims without giving jpmorgan an opportunity to rebut and that the bank does intend to contest these allegations though we should note that the "wall street journal" says this is the first of a series of allegations coming against some of these banks. we should note that it says the complaint seeks potentially billions of dollars in damages, guys, but jpmorgan says they will contest these allegations. back over to you. >> all right. thanks for that. the spokesperson also points out -- at the behest of the u.s. government, this complaint is entirely about historic conduct by that. so desires to separate themselves from these legacy potential liabilities that they might face. in terms of jpmorgan if it is billions, there's no reserve

fund that is that much. >> there is no reserve fundament and i thought during the deal, part of the deal was that jpmorgan would not be liable for these. so we'll have to see our this comes out. we only have a headline at this point in time. at this point, i wouldn't be selling jpmorgan on this news. >> i guess the difference paying ten for bear or paying two for bear makes up for it. >> stock not moving much in the after-hours, very light volumes. time now for the moment you have been waiting for. beaker's unveil trade of the day. >> dba, the etf, last friday we had the usda come out and say that corn, wheat and soybean inventories were really low, lower than expected, now we have the drought over, the harvest coming in and we have an awful lot of demand coming. i think agriculture's the place to be, dba is the way to play. >> anyone see the articles about the pork shortage? >> yeah. bacon.

>> well, apparently the farmers association calls it baloney. >> oh, come on. >> i'm serious. >> you trying to be funny? >> no, i'm quoting them. >> that joke's going to the dogs. >> there you go. >> bacon costs more money. it's not a shortage. >> then, that's the meat of it. >> coming up next hour on "mad money," cramer's seeing if now is the time to say yes to yahoo. and a read on the global economy from industrial real estate power house, plus getting set up for the fourth quarter coming at the top of the hour on "mad money." stay tuned. [ male announcer ] you are a business pro.

governor of getting it done. you know how to dance... with a deadline. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. this is awesome. [ male announcer ] yes, it is, business pro. yes, it is. go national. go like a pro. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity.

now get 200 free trades when you open an account. when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. [ male announcer ] for the dreamers... and those well grounded. for what's around this corner... and the next. there's cash flow options from pnc.

solutions to help businesses like yours accelerate receivables, manage payments, and help ensure access to credit. because we know how important cash flow is to reaching your goals. pnc bank. for the achiever in you. time for the final trade. scott nation? >> i might be the only bear in the group, but the vix has been up four days out of the last five, i'm staying long volatility. >> i'm going to stick with the agricultural sector, dba. still like it. >> the mcdonald's story got me thinking jack in the box. jack has been monster. jack. >> j.j.? >> if you are a believer that the economy's recovered home depot had a 52-week high. >> mcdonald's story got me thinking about eating a hamburger, but more importantly, talking about what's going on with russia,