and finally tonight, my observation on something that struck me in the president's state of the union address last night. listen. >> nothing i'm proposing tonight should increase our deficit by a single dime. it is not a bigger government we need, but a smarter government that seventies priorities and invests in broad-based growth. >> that statement sounded a bit to me like people who say, i don't work hard, i work smart. in reality, of course, those people are not working hard nor are they working smart. so, the american public knows better when they hear that more spending won't cost anything. the fact is, it will cost a lot of dimes. the country's national debt has increased by 58.6 trillion dimes under the president. with the country now facing $16.5 trillion in debt, these promises, of course, are getting

difficult to ponder. and to believe. what i thought was missing last night was anything of substance about the actual state of our union. i was hoping for a status check on where we are, rather than the broader rhetoric we heard. the president, of course, did not get into specifics about how to implement these proposals on education, infrastructure, and the big one, creating jobs. he said part of the costs of his plans would be offset by closing loopholes to raise more tax revenue. it is worth noting that he mentioned nothing about cutting our deficit. so, even if we did hike enough taxes to pay for these proposals, our debt and deficit would keep spiraling higher. it seems to me the state of the union was a platform for lofty ideas but the president prevented very little in plans and solutions and that, of course, is what this country needs right now. we'll keep waiting for that. have a great night, everybody. i'll see you tomorrow, same place, same time. stay with cnbc. "fast money" begins right now.

live from the nasdaq market site in new york city's times square, i'm melissa lee. here is what "fast" is following tonight. leon cooperman is liking facebook and selling out of apple. we're breaking down the reasons. great rotation. we have a bond fund manager who says the money flow into stocks is definitely happening. but will your bond holdings blow up? and smart money. are hedge fund managers really the smartest guys in the room? an epic street fight. first, let's get straight to jon fortt covering the cisco conference call. >> moving around a lot, melissa. it was down more than 3% at one point, but just came back as soon as cisco gave guidance. let me tell you what the numbers are. cisco guiding for fiscal q-3, the revenue growth between 4% and 6% year over year, assuming

they are able to spin off linksys successfully. nongap operating margin between 26.5 and 27.5%. nongap tax provision tax rate 21%. and they're guiding to nongap eps between 48 and 50 cents. that midpoint, of course, 49 se cents, that's exactly what the street were looking for. people were expecting worse news, i guess, because the stock went positive afterhours, had been down quite a bit. >> jon fortt, thank you so much. and we don't get guidance until the conference call. this is the first chance the stock has been able to react to actually a full earnings report here, guy. inline what whith what wall street was expecting. >> let's talk about how you trade the stock. i believe that things tend to repeat themselves. and in 2011, from the summer, into march of 2012, cisco traded

from about 14 1/2 to 21 1/2 and then sold off and, again, this year, from mid-summer or so, we've seen the stock trade from about 16 to current level. so, here at 21 and a quarter, wherever it is, i'm saying, if you are looking to foray into cisco for the first time, i think there are better places to be. you're going to see a little bit of a selloff, look at it then. with current levels, if this is your first trade, i wouldn't be buying it. if you are in it, i would take some profits. >> thought it was fun that claimer wills touched on all the hot topics. dividend, buy-backs, acquisitions. he's learned from the apple thing. so, now they are saying all the catch phrases. but to look at a chart, i think it's okay here. even though it does run into some resistance, it is making a pattern of higher lows, i think you are okay to dabble. wait for the first pop tomorrow. >> is it once again the well weather that it used to be. for the first time, it was a cisco specific story but now can we relate it back to the junipers of the world? >> i think you can.

and i think john chambers talked a little bit of what's going on in the government side of the municipalities. he thinks that things are better. he stated the obvious, but it is nice for him to say that northern europe is almost fine. and southern europe, we know is going to be a mess for long time, he doesn't see signs of improvement. in terms of having the pulse of what's going on, in the government side of the market here, i think things look pretty interesting. these guys are going to continue to follow strategy that has very low but steady growth. they're still ahead of their peers and in that regard again, you have to judge this on its own merit but they are a read across the board. >> let's go back to jon fortt. you got more from the call? >> i do. and i want to clarify, i see the wire headlines are saying 48 to 58 cents eps range. i heard 48 to 50, which would be a little less exciting, but more in line with what wall street is expecting. i think that's actually what cisco said. and partal of the reason why i think that, is frank said, hey,

look, there are political and economic headwinds. we are being cautiously optimistic with the guidance we are giving based on what's happening in the u.s. that's positive. we feel like europe has bottomed out and service provider leadership. but they told the analysts, be cautious in your modeling. so, they're giving these numbers, they feel like they can hit them but they are saying there are headwinds out there, so be cautious. >> jon fortt, thank you for that. keep in mind that cisco is notorious for being a conservative guider. meantime, let's get to the top trades for today. and tim, we go to you. >> well, i'm going to southern texas, also known as mexico, one of the best performing markets in the world. we are sellers of mexico, doing it through the eww. this has been one of not only the best performing markets in the world but a place people have expected higher earnings. they really told you that growth is slowing, so, mexico, i realize a lot of people may be a little bit out of your belly wick, this is an interesting

call -- >> is it very core lated to the u.s. market? >> it has been. and one of the reasons with the housing improvements and the big names in the mexican market, have a big rooting in what's going on up here. >> guy? >> belly wick? netflix! you know, jpmorgan has been ahead of the curve on this one. they had an overweight for awhile. they just raised their price target to $205. one of those names where it is going to overshoot. we talked about that at $120, $150. i think it trades either to $200 or a little north. >> have you watched "house of cards." >> never, nope. couldn't find it with a gps machine. i love kevin spacey, great job. i tell you what -- he's had some amazing roles. you have some breaking news. >> i do. a lot going on here. we want to check in on bill ackman, making comments at the hair bonn investment conference. let's listen in. >> i just want to quote the ceo

from their response, so, unlike kinder morgan, where, literally within a day, very short period of time, rich kinder, once the story got out with the shorts we're talking about, he went public with open line, i'll answer any questions, herbalife took three weeks to respond. they promised to shred every fact that we raised and they gave a very generalized response, not responding to many of the specific issues that we raised. they said a couple of things that gave us the opportunity. so, in the presentation, the ceo says, we're going to open it up for questions. and answers. because we've always been available to answer questions from anyone. anyone who really wanted to know about what our business is about. this is the ceo and that's, okay. looks for questions. now, we were not allowed to attend the presentation. we weren't able to ask questions nor was the press allowed. the press were kept in a separate room where they couldn't ask questions. the coo said, we'll show you that they're absolutely wrong. and they've just taken the time, if they had just taken the time to call us, we could have

corrected that, in fact, that's a halo statement for many of the misrepresentations today. so, what the company is saying, we simply should have called them, they would have answered all of our concerns and we would have been concluded that it wasn't that we were wrong. one more quote. and then i'll make my point. so, on a, one of the financial networks, not one of the ones currently mentioned, actually on fox, charlie said, you said today, i believe mr. johnson said today the company would answer all questions posed about it in the coming days. mr. ackman said he's going to pose some questions. do you plan to answer his questions? dez walsh, president of the company. it depends on the question. at this stage, we believe we have addressed in a very comprehensive way the questions that have been raised. we are committed to total transparency. well, if an investor came up with a legitimate question -- oh, right away. any legitimate questions. absolutely. we're going to answer them, because, remember, our commitment is to total transparency. so, if there is a question that we believe raises any issue

whatsoever that we believe has merit, then absolutely. we benefit from people understanding our company. our products. our business model and so we will answer any and all questions in that area. wouldn't it behoove you to answer his questions? sure, absolutely. we're happy to answer any questions that we can. so, when he sends them in, you're going to answer them? walsh -- we're going to answer them, providing we believe it's not something we've answered before and before and before. that's the full transcript. well, a week ago, actually thursday at 8:00 a.m., we put out some questions. we've heard, the company response was, this is a short seller trying to make money on their billion dollar investment, we're not ready to respond. well, it's a week later. every one of the questions we asked, a company that was not a pyramid scheme could answer within 24 hours and they are basic questions about the company.

it is remarkable how silent it has been. so, that was my point. i'm delighted to answer any questions that people have about anything, especially about things other than herbalife, but i'm a bit obsessed with herbalife. i'm happy to speak about it if people care. so, there are microphones, let's get it started. >> i'm sure we'll come back to herbalife, but i just wanted to ask one thing. you had early presented about the hong kong dollar and i was wondering if you could take a moment to update you on what your thoughts are on that now. >> sure. >> and what you're doing. >> so, about, i think around 15, 16 months ago, we gave a presentation about our view on the hong kong dollar and at the view was that it was the most undervalued currency in the world. because it had been pegged for, you know, almost 30 years, you know, to the u.s. dollar and it was pegged at a time when hong kong was a bit unstable. there was a run on the currency. the u.s. had one of the most

stable currencies in the world and to create financial stability for the country, not the country, but the independent region of hong kong, special region of hong kong, they pegged the currency. because it's been pegged for 29 years, the volatility of that currency has been very close to zero. so, the cost to buy an option on something which is very low volatility, it was very low. hugely undervalued currency. hong kong versus the united states has changed remarkably. hong kong has gone from being a exporter of textiles to a major financial center. >> we've been listening to bill ackman, the keynote address at the hair bonn investment conference here in new york city. the understatement of thor yao, he said he's a little bit obsessed with herbalife. he did spend most of his keynote on herbalife. he thanked carl icahn and dan lowe for making it a bigger story. and that the attention that it's getting means that regulators will pay more attention to it. he said the biggest risk in

getting into the story is that regulators wouldn't focus on the company, but now it looks like they are getting that focus and that publicity was the key to that. he was addressing the question on the hong kong dollar, his major call last year. of course, we'll be monitoring this story. we saw that herbalife shares were trading lower on the back of some of these comments. going to take a break here. coming up next, afterhours action. we are on the earnings call for the latest developments on cisco. leon cooperman signs onto facebook and logs off of apple. we tackle the reasons you may want to friend social media stock, as well. be right back. still to come on "fast," in a world where heavyweights battle it out right before your eyes, ali versus frazier. ackman versus icahn. >> you want to bid for the company? >> you don't have to tell me what i'm free to do. >> now, ka min ski takes on scaram usc. it's the ultimate showdown of 2013, ahead on "fast money."

[ laughs ] now this is a test drive. whoa! you really feel all 335 foot-pounds of torque. it's chevy truck month! silverado was also recognized for the lowest cost of ownership. hey, what are you gonna do with it? end table. oh. [ male announcer ] it's chevy truck month. now get 0% financing for 60 months, plus trade up to get $1,750 total allowance on a silverado all-star edition. or trade up and choose customer cash plus option package discount for a total value of $7,250.

welcome back to "fast money." i'm josh lipton. whole foods reporting after the bell. investors not happy. the grocery chain basically matches on the top line, baechlts on the bottom line by a

penny. maintained its guidance for full year earnings per share of 2.83 to 2.87, but looking ahead, whole foods says it expects weaker sales and margins for the rest of 2013. lowering its 2013 sales guidance and narrowing its same store sales expectations. melissa? back to you. >> yeah, not a good combination for a stock that trades at a 38 multiple, 33 fwad multiple. >> you hit the nail on the head. you have to nail everything at that valuation and the guidance has to be better. with that said, though, the stock is going to trade lower, a month from now, we're going to be talking about wfm at 100 bucks. that shows -- >> the bottom line -- >> antibiotic free meat for joe. he loves whole foods. >> passionate about organic foods. >> it's happened before. >> use the weakness to establish your position. >> yeah. specifically tomorrow. yes. >> how about you, steve? >> hmm. >> how do you really feel? >> so many jokes about good

likes a good -- >> that's steve grasso, so, good to the left side. >> i wouldn't be in the space right now. >> let's move onto the next trade here. facebook shares spiking above $28 a sheer on news that leon cooperman initiated a new 3 million share stake in the social media company. let's bring in the analyst at rbc, joins us on the fast line with more. mark, you like facebook and you think they've addressed two of the major concerns that investors had at the time it went public, correct? >> yeah, that's right, melissa. look, we think this is kind of a small buy here. 31, 32, where we think fair value is, putting a 40 multiple on next year. that's high, but you have good growth here and we do have comps. google at its peak did trade at those kind of multiples. we think the stock can go there. >> at the same time, mark, you highlight that mobile ad revenues doubled quarter on quarter. without much of a negative

impact on user or usage gout. the same time, you look at overall ad revenue, quarter on quarter, as well, that was only up 3%. so, are we at a point now where it's making progress on the mobile front, in terms of ad revenues but that isn't benefits them? >> yeah, i think it's just a matter of time. the most important read from the quarter is, in the last two or three quarters is, wait a minute, they went from 0% of their revenue from being mobile to 25% in three quarters, six to nine months. and they didn't impact their user growth or their user engagement. that was a very legitimate fear. who knew what was going to happen to facebook's user base when on their ad-free mobile devices, they had facebook ads. it tells you that facebook can probably implement other ad formalts on those -- >> mark? >> and it can still grow. >> mark, i'm sorry, we have to believe it there. thank you for joining us. i want to go back to bill ackman at the harbor investment conference. >> he did some things very

right. good examples are, the company's done a very good job on the cost structure, taking a lot of costs out of the business. that's very real and i think that's going to be a benefit going forward. number two, he had a vision for the future of the company that's he's launch and we've seen early signs of success. the shops per square foot and you've seen public statements by the ceo, the owners of izod, how well that business is doing and levi, et cetera, have talked about how they are happy about the shopper formans. i would say those are -- he's hired a great team on the design side, in the organization generally. and i think he's built a very good senior team. and he's done a lot in a, you know, again, about 13 months since he's been in the -- 14 months since he's been in the ceo seat. what he had a tougher time with is, he made the decision to completely withdraw promotions from the business. and this is, you know, this is a company where the consumers, the customers were almost addicted to, you know, the coupon a day,

580 promotions in 2011, you are getting 1 1/2 promotions a day, you know, people went to the store four times a year, they didn't respond to many of those and his view is, let's take the prices down to what people pay, the consumer clearly knows what the right price is, because, you know, even with all the promotions, when the price gets to the level they want to buy it at, they buy it. get rid of the noise, the frictional costs of retifkting, the store is going to look better. the other major accomplishment, which is very material. if you go into a jcpenney today, versus the way it looked 18 months ago, it's a completely different experience. and it's a great looking store, you know, uncluttered, major progress in terms of the way the store looked. the problem was, once those promotions were taken away, that had an impact on traffic. and also, one of the things i this i the company learned is that the consumer likes to have a reference price. you know, even though people know that kind of, that $40 price, where it was marked

originally and then marked down, well, is that really the real price for the good? it gave the consumer some point of reference that almost anchored them to say, well, this price at 50% discount or 70% discount is deep enough that i feel comfortable buying it. and what we didn't -- what ron didn't expect, remove the anchor price and push it down to the right price and people just know. the answer is, they don't. how has the company responded to these things? well, if you have seen the circulars that have gone out recently, there's one in today's paper, if you've seen the advertising, everything now has a reference price. in the jewelry, which was one of the worst-hit areas, people have the biggest difficulty, we got killed last year. same thing in home. what's a couch worth, what's the right reference price? so, in jewelry this year, the company, every item in the -- in the jewelry store comes with a third party, you know, the number one appraiser of jewelry appraises every piece of jewelry in jcpenney and gives an appraised value and the company

sells at a discount to appraised value and does promotions in addition to that. in fact, if you, you know, there's going to be valentine's day promotion, et cetera. and i think the impact now is the consumer now has a reference price that's real. they are buying at a discount to it. and that gives them a comfort factor. we expect. so, that's one significant thing. second thing is, he's bringing promotions back. not 580, but he's alluded to, you know, sales at relevant periods of time. everyone was having a mother's day sale, we didn't. we didn't realize how dramatic that would be. what do we have? better cost structure. we have much better product in the store. everything coming in now is picked by the current team. the current design team. we have the shops that are doing high sales per square foot. and, you know, the question for investors and again, the press has been unbelievably negative on the company. ron gets picked on more than any ceo in america. my experience is, when everyone thinks you are completely stupid, or they're very bearish on the company, probably a time to look at the stock.

so, the way that i look at it s is, it's hard for me to imagine how sales don't stabilize in light of returning promotions, putting in reference prices on every item, real reference prices. in the home section, it's the manufacture suggested retail price. went there isn't a direct msrp, they give a compare price to the same item at a competing store. that's very helpful. promotions are going to be he helpful. the new advertising is about product and price. and then we're opening joe fresh, i think, in march, joe fresh is the first new brand at jcpenney, the current shops were all existing brands that were kind of, we put levi's in a much better shop and with much fuller product line and we had a positive impact. joe fresh, a up canal of stores in new york, that's about it, in the u.s. it's the number one apparel brand in canada and it's a price point that fits our demographic.

the product looks great. the store looks great. and it's going to be in every jcpenney -- not every, the top 700 stores beginning in march. now we have reason for people to go to jcpenney. the only place in america, other than fifth avenue and madison avenue, one other store in new york, where you can get this product. the other thing that's happening that's significant is by the beginning of may, the whole home section is going to be taken to the best, kind of the vision. 17 shops in home. a collection of the best brands, very attractive price points, extremely -- if you go see the store, we got a prototype, you can have a whole section, unlike a few shops here and there that look nice, you're going to have a big percentage of the store square footage, one of the most important parts of jcpenney, in this shop format, which i think should have a huge impact. other than jewelry, home was down the biggest percentage. i don't know if we disclosed the number.

enormous, down 40% or so, you know, big, big number decline, maybe more than that. and now we're going to have the best product and a great presentation. but then your question, what if it doesn't work? all right, the answer is -- obviously, the company's not going to pour -- >> we've been listening into bill ackman here in new york city. the salesman in chief for jcpenney, talking about his long position in the company. we have seen the stock go higher by about 1.5% in the afterhours session on these comments. he said going into a store these days, is a completely different experience. there are a couple of catalysts here. promotions are coming back and price comparisons where consumers will actually have a reference point. he cited jewelry as one example. there's an appraisal price for every piece of jewelry in the jcpenney store and he thinks that is going to get consumers in there and more comfortable to buy. interestingly, the other news today with jcpenney increased its bank credit facility by $100 million. that may not seem like a like, but there's an accordion feature

where it can borrow more down the line. >> right. they, you know, a year ago they talked about the rock solid balance sheet. you don't hear them talk about that anymore. one thing the company's doing that i find some what disingenuous is, they have this idea in talking about the pricing strategy of, here's our private label brands, as seep, you know 15 bucks here, as seen elsewhere $20. if they are private label to jcpenney, they aren't seen anywhere else. >> right, you can only get that product at jcpenney. >> and they said, well, it's the same equivalent good. it's the same quality, it's the tame -- >> really isn't that reference point. >> no, it's not like, here's a pair of levi's here and elsewhere. >> with levi's, these are the exact same. i find that disingenuous. i think there's aothat's different. you know, they -- some of the stores look better. they've only built out 30% or 40% of the stores. they are spending a lot of money. we're short -- we're long puts, short some stock and short some bonds. this facility is not great for

the bonds. this will come ahead of the bonds, so, nothing, to me, has really changed. >> speaking of salesman and chief. listen to what the cfo said about this credit facility. he said this reflects the confidence of our banking group and our long-term strategy and strengthens our liquidity position. >> i believe it does that -- >> they have access -- >> getting more liquid. >> the credit risk profile goes up, obviously, with this. but what? >> even before these guys had probably 12 to 24 months sufficient liquidity. people don't believe they is re-educate their customer. >> do you think you can? >> aside from convincing steve going from chess king to joe fresh -- >> he loves it. >> i love chess king. a listening process. >> all right, let's get back to facebook. we were talking about facebook. so, mike khouw, what are the options trader s seeing for fb? >> the sentiment had been negative for so long but it

started to turn around, about two months ago and has been pretty positive this entire month. the top five most active options today were all calls. the most active were all the ones that expired this friday and the most active among those were the 28 1/2s, paying about 14 cents. the stock could be above $28.46. and we saw further out people trading the april 32s. so, the sentiment in the options market for facebook is pretty bullish. coming up next, the best way to play bonds right now as the great rotation picks up steam. and are hedge funds really the smart money? it's gary kaminsky and anthony scare scar moochie. they square off, right after this. scare moochie. ♪

[ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. [ engine turns over ] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus.

this is the pursuit of perfection. revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees.

reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. because what you don'tu know can hurt you.rance. how's that for an encore? what if you didn't know that weeping willows have invasive roots? what if you didn't know that a trampoline... could affect your liability? and what if you didn't know that most cars... get broken into when the weather warms up? here, buddy. the more you know, the better you can plan for what's ahead. get smarter about your insurance. ♪ we are farmers bum - pa -dum, bum - bum - bum - bum ♪

weight watchers. go to josh lipton at headquarters. >> we are watching weight watchers, which is getting clobbered here. fourth quarter earnings dropped some 9% at the company deems with higher costs. as for the outlook, sees fiscal year 2013 earnings of $3.50 to 4 bucks. the company saying they're disappointed by recruitment trends, current marketing hasn't been effective if this competitive environment. rivals here including jenny craig and nutrisystem. weight watchers down 16% here in the afterhours. melissa? back to you. >> thank you, josh. and on weight watchers, karen is coming off what should have been a seasonally strong quarter, which would include the new year's holiday, but the outlook is also bad. >> this is a great franchise. i would love to own it. i think we might get a chance

here. i wouldn't jump in tomorrow. i think this is a pretty significant miss, so, i want to really try to understand what exactly went wrong. i don't know if it's because jessica simpson is pregnant again, is that the issue? i don't know. but it's a great -- >> no, no, she's pregnant or that's an issue? >> that's she's -- it's hard to be on weight watchers, program, if you're pregnant. i don't know. >> stop right there. >> stop right there? >> you're a woman. you can say these things. >> it's a great franchise. at some point, it will be good to own. i don't think you have to feel that tomorrow is the only day to do it. >> okay, let's move on here. hedge funds said to be the smartest money on the street. but if you take a closer look at the numbers, are these funds actually not all they're cracked up to be? we've got a street fight of epic proportions. gary kaminsky and anthony scaramucci with us. you manage $7 billion right now. so, who wants to go first. >> take it away. >> it's going to be age before beauty? you want me to roll first? >> you started out as my college

roommate, now you look like my grandfather. >> wow, starts right away. >> first blow right there. >> weight watcher results. >> i didn't bring my high heels for the debate. >> this is why i'm here. >> much is a big picture guy. i want to go with the facts. anthony, i know you think very highly of goldman sachs this is from david cobston. this is the information he has. look at the numbers right here. guys, come in here. this is when you look at the top 100 edge funds. we're talking about long short equity players. we're not talking about emerging markets. simple stock pickers here. look at the numbers. look at that. does that look familiar to you? that is closet indexing. if you don't take away the consumer staples at -- the consumers staples as the consumer discretionary, all the hedge funds have done is made a 400 basis point bet in consumer discretionary and away from

consumer staple. that is closet indexing, my friend. >> they are getting short a lot of stocks that are going up in an acome dated fed environment. so, if you look to the show, which i know you do because you love melissa. >> right. >> i've said for a year that long short managers are not going to make money in this environment. you want to focus on one slice of the pizza for the hedge fund industry. the hedge fund industry adds value, deserves it fees for three reasons. number one -- look at all the mortgage-backed security guys and the money they've made. look at the event-driven guys. number two, in the worst times, in the 2008 crisis, they hedge themselves. >> we'll get to those numbers in a second. >> no. in an s&p 500 -- >> going back to goldman sachs. >> no, no -- >> this is the largest ten positions of the hedge funds at the end of last year. >> long-short managers. >> correct. >> look at the names. apple, google, aig, microsoft, qualcomm. >> you want to take one thing off the hedge fund menu.

>> hold on, guys. we can't get any points. gary, you finish your point. >> we're showing you that if you look at the two in 20 guys, not the mortgage backs, not the guys trading cmbs, not karen what she's doing in risk. this is charging two and 20 for a long short equity portfolio. one final chart here. guys, bring up that short. you bring back 2008, here you go. this is the two in 20 model. and this is the hfrx global hedge fund index. >> which is in the blue. >> the s&p 500, the viewers who basically buy the vanguard index fund and pay a basis point as it relates to the two in 20, you may defend the industry, anthony, they have not added any value. >> gary, it is all interesting stuff, but you are taking a cursory one derivative look at the facts and the numbers. great hedge fund managers performtacularry well. you have to pay like sky bridge, somebody like that, to pick the

sectors. >> again, you're a great big picture guy -- >> plus 17, minus -- >> down in atlantic -- >> the guy doesn't let you get a point in because he's wrong. >> right now, the numbers don't spell it out. melissa, this is a good book. "good-bye gordon gekko." >> written by anthony, by the way. >> he was also capable of dealing with all the diva money managers that newberg had on staff. i learned from him the virtue of dealing with them. gary kaminsky could drive bob cucoo. >> the bottom line is simple. the data supports the fact that if you are an investor today -- >> hold on. >> you look older than men buzz you're not wiser than me. >> holden, guys. >> gary's made his point. we took a look at one time frame and you can't deny the charge that the hfrx. your point, though, is, you have to take a look at a longer term

period. >> that's a cursory look of the numbers. one derivative simple look. >> a composite. >> if you want to crush down into the industry, you will find value. >> bring the chart up here. >> let anthony make his point. >> we are finding spectacular managers. what was our return last year, do you remember? >> i don't know. >> plus 21%. we beat the s&p. >> that's amazing. >> you find spectacular managers, you go with themes and concentration. you stay away from long short managers that gary is referencing here to make his point. >> this has been, we have really delivered on a promise. we have to leave it here. i know this is a topic we will probably revisit. there's a lot to be said. >> i want to sate one thing. >> last thing. >> we have not disagreed and the panel will agree with this. while anthony, i disagree with him, we do know he runs the best hedge fund conference. we know that salt is an excellent -- >> expect you to be there. >> bottom line here, the numbers

don't work. >> let the viewers decide. >> all right. thank you, guys. gary, anthony. coming up next, from street fights to cash hoarding, the companies besides apple with a stock pile of cash, plus, a deeper dive into bonds. where you can still find upside. much more "fast" straight ahead. ? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

investor. yeah, i'm a serious investor but i'm a busy guy. it used to be easier but now there are more choices than ever. i want to know exactly what i am investing in. i want to know exactly how much i'm paying. i want to use the same stuff the big guys use. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. is moving backward. [ engine turns over, tires squeal ] and you'll find advanced safety technology like an available heads-up display on the 2013 lexus gs. there's no going back.

markets are approaching all-time highs as investors continue to pull their money out of fixed income and put it to work in equities. for more on where you can find opportunity in fixed income, let's go to david gotlieb. he is a portfolio manager. david, great to have you with us. >> thanks for having me. >> in this great rotation is indeed happening, some out there don't believe it yet, because it's early on in terms of the trend. is there value in fixed income? i mean, this notion of money draining out of the sector, you would think that maybe it's not a great time to go in. >> the risks are asymmetric. at these credit spreads and these levels of rates, investors just are not being paid to own the long end of yield curves. to give an example, 30-year treasuries lost 3%. that was a 20-basis point move higher in yields.

one-fifth of 1%. so, it doesn't take a lot to lose an entire year's coupon, that's in the case of treasuries. >> all right, so, you don't want to be on the longer end. so, where would you recommend investors go at this point? >> we believe that investors are vulnerable to two things. one, a pickup in volatility and with that volatility, spreads are likely to move more multidirectional. one-way move in the spreads of late. so, we think that investors are supposed to be focused in the short intermediate part of the yield curve. there's less capital risk there. the fed is anchoring rates to system degree and the five year and under bucket. it's really longer maturities. >> five and under is the bottom line for you? >> yeah. >> karen? >> okay, so, what would you do then? can you make money? are you trying to just protect? or can you make money just staying on the very short end of the curve? do you short the long into the curve? how do you make money into this? >> the first thing you want to do is not lose. and the risks in the long end of

the curve are growing. from a spread standpoint and from an outright risk of rates rising standpoint. can you actually make money in the five-year and under bucket, you know, five years yield 90 basis points. you are not paying a lot to be in fixed income at all, which is one of the reasons why the rotation, if it begins in earnest, you're going to see it play out over multiple quarters, multiple years, and rates -- you're just not being paid for the risks. >> so, multiple quarters don't say to me a bubble. people are saying, a great bond bubble going on. is that the case? what is your opinion? >> you never know if it's a bubble until after the fact. i think we'll look back at this time and say, clearly that rates were too low, the fed is engineering too low rates in order to try to stimulate housing and the economy overall. but from the standpoint of whether it's a bubble and it will pop, it's not a tomorrow thing, but over time, relative to fair value, you will definitely see rates rising over

the course of, you know, many years. >> david, thank you for coming by. david gotlieb. still to come, jane wells gets dirty. >> whoa. >> while the coups get clean. jane? >> hey, melissa. nothing wrong with a little dirt on the farm. but farmers are into clean technology. take out this new device. looks fierce. wait until you hear what it's for, when we come back. tdd# 1-800-345-2550 you should've seen me today. tdd# 1-800-345-2550 when the spx crossed above its 50-day moving average, tdd# 1-800-345-2550 i saw the trend. tdd# 1-800-345-2550 it looked really strong. tdd# 1-800-345-2550 and i jumped right on it. tdd# 1-800-345-2550 tdd# 1-800-345-2550 since i've switched to charles schwab... tdd# 1-800-345-2550 ...i've been finding opportunities like this tdd# 1-800-345-2550 a lot more easily. tdd# 1-800-345-2550 like today, tdd# 1-800-345-2550 i was using their streetsmart edge trading platform tdd# 1-800-345-2550 and i saw a double bottom form. tdd# 1-800-345-2550 i called one of their trading specialists tdd# 1-800-345-2550 and i bounced a few ideas off of him. tdd# 1-800-345-2550 they're always there for me. tdd# 1-800-345-2550 and i've got tools that let me customize my charts tdd# 1-800-345-2550 and search for patterns as they happen. tdd# 1-800-345-2550 plus webinars, tdd# 1-800-345-2550 live workshops,

tdd# 1-800-345-2550 research. tdd# 1-800-345-2550 whatever i need. tdd# 1-800-345-2550 so when that double bottom showed up, tdd# 1-800-345-2550 i was ready to make my move. tdd# 1-800-345-2550 all for $8.95 a trade. tdd# 1-800-345-2550 can you believe it? tdd# 1-800-345-2550 i love it when you talk chart patterns. tdd# 1-800-345-2550 trade up to 6 months commission-free tdd# 1-800-345-2550 with a $50,000 deposit. tdd# 1-800-345-2550 call 1-800-790-3803 tdd# 1-800-345-2550 and open an account, tdd# 1-845-2550 now with no trade minimums.

(music throughout) why turbo? trust us. it's just better to be in front. the sonata turbo. from hyundai.

gets funnier every time. let's play the good, the bad and the ugly, starring tonight, tim seymour. first, the good. over the past couple of months, tim has been studying the beauty products trade. take a listen. >> i like the avon call. in fact, i got long a couple of weeks ago. risk reward basis, this is the ultimate emerging markets retail story. if i sold going into these numbers thinking it had a great run. put a price down, probably 2% below, up 10.5% on the day. it closed up 20% so i feel okay, though i'm really crying because i had a much bigger position two weeks ago. >> even tim missed out yesterday, the stock still had a

nice pop since that first call. >> part of it was saying that i heard some things in the numbers were very encouraging, including their growth is back and direct selling works in north america, not just down in brazil where they're kicking it. >> now to the bad. in his final trade on january 31st, tim made this bearish call. >> valero, you have to sell that stock. vlo. sell. >> valero is up 5% since that call and 35% year to date. i'm not surprised. it -- >> it was parabolic and it's that much more stretched. but this is the best of breed in a sector that is going through a structural transformation in terms of their business. these guys have access to the gulf. they are seeing a glut of crude. a lot of people think they are high and are going higher, so -- be careful. >> all right. >> can i say one thing about timmy? it's really hard to sell something and get back in. and -- >> brave and good call. >> it was to just try to be really objective, say, do i want

to own it from right here, regardless of what your trading history is with the stock. impressed, timmy. >> and to make sure it's not emotional. it's like, the stock's moved, you love it and sold too early. >> and just wish ill forever of it. >> i wanted to, but then i would have wished ill on myself. so -- >> all right, coming up next, stocks that benefit from trends in the heartland. jane wells has a special report coming up next. to compete on the global stage. what we need are people prepared for the careers of our new economy. by 2025 we could have 20 million jobs without enough college graduates to fill them. that's why at devry university, we're teaming up with companies like cisco to help make sure everyone's is ready with the know how we need for a new tomorrow. [ male announcer ] make sure america's ready. make sure you're ready. at devry.edu. ♪

♪ [ engine turns over ] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus. this is the pursuit of perfection. writing the next chapter for the rx and lexus. (announcer) at scottrade, our cexactly how they want.t with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.

the best place to grow your portfolio down on the farm? jane wells joins us for a barn-burning inside look at the world ag expo in california. >> love it. >> jane? >> pretty close, melissa. not a lot of people know what it is. this is the number one farm state and this is the world's largest ag expo. is anyone buying? supply constraints last year, but now saying they still expect growth in 2013, but maybe up only 5%. farm incomes are expected to hit a record in 2013, despite the drought and now falling grain prices. but the incomes will dive 30% in 2014, so, make hay while the money shines. >> equipment wears out. and southernry the farmer can

make a decision to patch it and go one more year or go ahead and replace. right now, i think there's certainly the farmers are saying, this is a good time to update. i've had a pretty good year. >> now, the shares for deere were down. more about concerns on its construction side and economic uncertainty. ag continues to do well. but one part of agriculture is not doing well, milk. dairy. people are not drinking as much milk and it costs a lot to feed the dairy cows. another round of bankruptcies here in the number one dairy state, and not just here. >> nationwide, there's -- there were bankruptcies and sales in texas. you know, there are sales in the upper midwest, because they're having a tough time paying their bills. it's a national thing. >> but even so, the dairy men are here investing in new technology and here is the newest thing. it's from delaval. it's called the sprayer robot. you can't get it yet, it's so brand new, it's very efficient

for best ssie. keeps her clean. can spray 400 cows an hour. it issed youerly amazing. >> ah, nice. >> just in time for valentine's day, too. >> wow. >> jane, you're in your element out there. have fun. jane wells at the ag expo in california. they said that grain farmers were benefits from the high prices, the cattle farmers were not, obviously, because the the soaring costs, so, they're feeling sort of a push-pull here. >> volatility is what took these guys down. though they raised their forecast and, if you actually look at the places where they could see more growth in their ag and turf business, latin america, again, kicking it. people are worried about the volatility here. >> i go to monsanto. my better pick. these stocks have been on fire. they continue to move higher. >> first move tomorrow when we

come back. stay tuned. i'm glad we got cdw and cisco to design our data center. yeah, the cisco ucsc series server, with the intel xeon processors, help us scale smoothly, like a perfect golf swing. how was it before? clunky and full of unnecessary impediments. like charles' swing. i heard that. whoa! you really feel all 335 foot-pounds of torque. it's chevy truck month! silverado was also recognized for the lowest cost of ownership. hey, what are you gonna do with it? end table. oh. [ male announcer ] it's chevy truck month.

now get 0% financing for 60 months, plus trade up to get $1,750 total allowance on a silverado all-star edition. or trade up and choose customer cash plus option package discount for a total value of $7,250.

little carl icahn discussion i had on cnbc, it's amazing how many times that thing got e-mailed around the world and i had phone calls with people that i haven't spoken to since i was

4