work. we are seeing right now in a very public way with high profile apple shareholders doing just that. so today we saw $28 billion deal by berkshire hathaway to acquire heinz. of course, we saw two behemoths in the airline industry come together. oddly, no real market reaction to those big deals. however, given the level of funding which is rock bottom, and the amount of cash on balance sheets, i would expect plenty more where that came from. and stocks should react accordingly. we're also a few weeks away from the federal reserve, responding to the banks' proposals for aloe indicating their cash and news about the bank stress test, the so-called c-car announcements coming in march. the outcome of these events from many banks will result in higher cash dividends, and buyback plans. one fly in the ointment, of course are the guidelines of a global banking agreement, known as bazel 3, are not finalized yet but expect banks to show

well above 2013 and 2014 guidelines of bazel. it's hard to believe the forces that will send stocks higher will reverse any time soon. in any sell off will be met with a buy on the dip mentality. cash will not be king anymore, but quite powerful. before we look at the day on wall street, the dow jones industrial average tried to go positive and stay positive to no avail. the dow industrial down 9.5 today, 13,973. nasdaq higher, but it had been negative at one point. nasdaq, s&p 500, up a fraction on the session. that will do it for "closing bell." thank you for being with me. hope you follow me on twitter and google plus at maria bartiromo. have a fantastic night. happy valentine's day. "fast money" begins right now. have a good night. ♪ nasdaq market site, new york city's times square, i'm melissa

lee. this valentine's day evening, big air, mega mergers the hot ticket for airline investors but how can the smaller guys compete? dave barger gives an explanation as to why he thinks smaller is better. pain at the pump. why steve grasso is betting the refinery run is not yet over. and active management. how can you make money by riding the coat tails of carl icon, and dan lowe. first to the markets. another day of going nowhere for stocks but traders making money trading. so what was your top trade today? >> when i was younger, i was excellent at that game, one of these things is not like the other. remember the "sesame street" thing? >> really, your forte? >> what i noticed about the market, both bonds went up and stocks went up. i think it's a good thing. the worst thing in the world to me is yields rising for stocks. so i think that lends itself to a buy. tlt, name i talked about before, can go along with the spy i talked about a week ago. >> hmmm. >> so many things are working

here. two-thirds of the overall market trades, two-thirds of all stocks trade with the overall market. so you really have to buy and stick with what you want until this market breaks below 1,500. it's that simple. >> is that the philosophy you're employing, beaks, stick with the trade? >> if you look at europe, it's not working. europe starting to break down. but here in the u.s., keeps working. and it's boring and clearly there's more cash to be put to work. >> it is boring. one thing that's not working right now is technology. and this is a sector i'm focused on. >> your top trade. >> yeah, my top trade. listen, this is hard-picking tops here, people, right? but at the end of the day, we have a lot of the super sectors in the s&p up 8-plus percent. look at the xlk, etf up 13%. no leadership here. i believe we're going to roll over pretty soon. i think we'll need a 5% sell off. i think tech -- >> is google working? >> google is one of the big ones that is working. >> and that's the one. if you look at amazon, look at apple.

one takes it right from amazon, goes into apple or vice versa. and if you look at google, they're the recipient of all the money flow. >> yeah. >> no doubt. listen, there's very few things working well in technology. if you look at ibm a great example of a company th that beat -- filling the earnings. >> there ways to express a negative outlook on technology without going ultra short on the cue. >> so as a trader, this is a great example. i'm looking for a little juice here, okay? i want to catch that reversal. i bought the qid, double short nasdaq etf. this is a trading vehicle and i'm going to trade. >> i'm looking at xlk now and i see it had a nice reversal day. i love days like this as a trader. we gap lower, reverse goes higher. that's what i asked -- i would like you -- >> boring out there right now. i'm looking for excitement. >> shorting a boring market is a dangerous sport. just buy the qid, put it away a

while. >>. >> all right. that's key, though. that's key for the little guy at home. karen, what was your top trade? >> we sold some realty today, came out with earnings. the story is very much intact, looked great. it opened with a big pop. and it was just -- it's had so much positive momentum, you have to sell some into it. so sadly, had to take some ticks, closed the day down. i still like the story. but you just had to take some off. in april, the lockup expires. so -- >> careful of that. >> supply coming our way. >> portfolio management trade today. >> yes. >> grasso, you? >> for me it was still google. i'm looking at it. clients seem to be trying to scale out of their longs, because they think maybe the market is topee. that's been said for the last 80 handles in the s&p. >> so this is why you guys are going against each other. >> but for me, know, i look at look at google, i'm in and out of the trade and back in. i continue to buy this thing on dips. but it's -- >> i worry at all-time highs. >> i do as well. and you know what happened, i

got flushed out of my amazon for just that reason. bought at 274, flushed out at 259. >> i don't think the action names like amazon -- >> back up to 270. so bad sell. i got flushed out to be prudent because as a trader, you need to be disciplined above all else. so even if you fall in love with a theory of premise, watch your technicals, because more often than not you'll win if you do that. >> let's move on. we want to get an update on the big money filings after the bell. cnbc's kayla tausche back at headquarters with the latest. >> probably the most notable information we've seen is a big battle over apple. of course, we could see this spring from a mile away. david einhorn, his green light capital ups its stake in capital to 1.6 million shares, really showing some skin in the game there. now part of that stake is in call options. 275,000 call options, worth about $145 million in equity, as well. dan lobe at third point cut his entire stake in apple.

moving on to what each of the funds is doing, very interesting. green light also took a brand-new stake in google, about 63,000 shares in google. he also increased his stake in microsoft. cut his stake in yahoo! by 5%, now owns 4.8 million shares. that's green light. moving on to third point. here's the big one. herba life. third point had 3.1 million shares of herbalife as of the fourth quarter. so we are seeing that stake that everyone has been talking about, the interesting thing here, though, is that he's not as long as ackman is short from what we know. 3.1 million shares in herbalife. also a new 7.8 million share stake in morgan stanley. and his fourth quarter investor letter, loeb was saying from his conversations with management felt there was still a lot of turn armed. he felt the compensation structure was bloated. finally, a new 7 million share stake in news corps. six months before they finalize that spinoff so loeb feeling positive about how the spin-out

is going to turn out for news corps. medical list? >> kayla tausche back at headquarters. what is interesting, apple is emerging as a battle ground stock out there amongst investors. some people really seeing the value with einhorn going keeper into apple and others getting out like loeb. and yesterday we heard aboutly on cooperman. you can make the case for valuation all day long. could have made it for the past 100 or 200 points. and yet here we are. >> apple in particular. i would be a little careful about saying these guys are going head-to-head. somebody could have sold it over the quarter at $700. and it's obviously a much better value at $500 or $480. so in terms of apple, i still think you're looking at a shock whose shareholder base is turning over, not going to be the same stock that it was six months ago or a year ago. you're not going to have those rapid runs in my view. great company, but you're just -- it's not the same stock. you get different buyers. >> what i think is important, you have to look at apple on a technical basis. once it bounced around a 435

level, you had the new buyers come into the stock, look for maybe a dividend as green light pointed out. maybe they're looking for a dividend play. maybe they're looking for a buyback. >> a less aggressive investor, i guess is what i'm trying to say. >> exactly. but you didn't want to sell it ahead of that goldman conference, and they don't want to sell it ahead of the investor meeting which is at the end of february. >> yeah, you know, i think the stock has problems here, february 27th is shareholder meeting. i think anything short of accelerated buyback or some big dividend raise or something like that, i think the stock is going to go retest that 435 level. there are no product catalysts in the first half of this year. >> i'm still long, but waiting into that meeting for the sell. >> i'm glad you mentioned the timeliness of these particular filings, as of the most recent quarter. it is a backward-looking snapshot at some portfolio as opposed to an activist filing, much more current up to date, because it could have been filed within days. >> right. so it's 45 days old so it could have turned over completely. one thing that's sort of interesting about the herbalife loeb's take is it's a 13g. so he does not have the

necessary disclosure one has when you have a 13d. he can be a -- sort of under the radar in this trading. and on the short side, obviously, no 13d position to be -- i wish there were, to see if someone were short five. we don't really know -- >> plus, managing a boat lode of money. not turning around ships. this is not a speedboat. the retail people that watch, they're traders. there's a lot of people that can watch that can turn around their ship a hell of a lot quicker than investment managers running a ton of dough. >> did you need to cover your ears for that? >> well -- my kids are watching for the shoutout. i'm just saying, herbalife is an interesting one, though, when it comes to loeb. don't be mistaken, though. yes, these guys don't turn their portfolios over frequently but this has to be a portion of the trading position, especially when you saw that thing go from 45 down to 25, you know. this stock can't get out of its own way. i can't see, you know, somebody being tuopportunistic, take mon off the table.

>> let's move on to one of the stories of the day. american and usairways creating the largest airline in the united states with all these mega mergers. are you can an independent carrier compete? no better person to ask than the ceo of jetblue. dave, always good to speak with you. >> melissa, thank you. always great to be on the show. >> let's break it down to two parts in terms of how this may impact you. near-term, do you see any advantage as these two large carriers combine? >> well, there absolutely is. as we look at this consolidation, this is maybe the last chapter of the network or the legacy airlines. when you look at delta, you look at united, now the new american, this consolidation is right-sizing capacity in the industry. that presents near-term and long-term opportunity for carriers like jetblue. >> how does that impact you long-term? you're the kind of carrier who likes to create dominance or build dominance in certain markets. we have seen it in boston, seeing it in san juan, for instance. how does this impact your strategy longer term if you have

these two big guys joining up? >> well, you captured it right on, me lista when we look at the combination. our continued focus in terms of growing boston. obviously, our presence in new york with the largest domestic airline in all of new york, across florida, in the caribbean. so i think we're going to continue doing the same thing. when you put airlines together, capacity does get reduced. and, again, that presents opportunities for us, if you will, to shoot these gaps. at the end of the day, we're only 5% of the industry. but we're very meaningful where we're focused on these focused cities. >> david, it's karen. let me ask something. a big merger like theirs, i would think, invariable has some integration hiccups. how do you take advantage of that? >> you know, karen, it does. we look at delta and northwest, united and continental and now american and usairways. and let's face it. these are companies that are going to be very -- and they have been very inwardly focused, if you will. and quite frankly, i think the

industry has done a really nice job with some very tough consolidation. but jetblue, we're focused on our independence path, organic growth, our own people, our own airplanes. and i'll tell you, the traveling public, we added service from boston to -- as we talk about boston to washington. new service will be philadelphia. traffic is up 100%. so -- and the fares are down 30%. this is how we're going to take advantage of these kind of opportunities. >> dave, i'm going to switch gears. you've always been very open about your company's past black eyes. and here we have one on carnival cruise lines which, you know, the stock continues to fall as this "triumph" -- i want to say tragedy, but situation continues to unfold. near mobile, alabama. i'm wondering, you know, what is your opinion as to -- if carnival is doing the right thing. if they're doing enough to fix this bloo black eye. because obviously black eyes are surmountable but are they handling it in the right way, in your view? >> melissa, when you look at disruption, and let's be transparent, we've had

disruption. and obviously as we look at what carnival is going through, it's a tough situation, there's no doubt. are they doing enough right now? listen, as i look at jetblue, we could have always done even more when we start to look back on an event, whether it's a snowstorm or, even with the most recent handling of the storm that we had here with sandy. this is tough when you have that many people and you're towing something in, and really the kind of services aren't available on a ship, it is tough. i think what's most important, after action. whether it's a jetblue, whether it's a carnival or whatever the case might be and i'm sure carnival will be doing that. >> always a pleasure to speak with you. hope to talk with you soon. dave barger, ceo of jetblue. i don't know where you want the to go in terms of the airline stocks. but you reduce capacity and that could mean higher ticket prices. >> could mean higher ticket prices. and i haven't traded the airlines in a long time. but if you want to play this, i actually think jetblue does have the advantage here. because they're smaller, because they're more flexible. last time dave was on the show, we talked about being able

within a day adding flights from baltimore down to the super bowl. so that's the type of company that's going to do well in this environment. i think you stay away from the bigger names. >> okay. coming up next on "fast", call of the bull. why one top market strategist believes her wall street colleagues are not bullish enough. we'll get her top plays. and later on, is your portfolio in a rut? you may want to start following some of the moves of activist investors, like carl icon. be right back. know can hurt you.what you don't 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 ♪

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[ wind howling ] easier than actually going to the bank. mobile check deposit. easier banking. standard at citibank. breaking news regarding carl icahn and a new stake in herbalife. scott walker on the fast line. scott. >> melissa, thanks so much. i guess it's my understanding now that the 13d has been released by carl icahn. and it does show he's taken a 12.98% stake in herbalife. that's 14 million shares. mr. icahn telling me just a short time ago over the telephone that he's done a great deal of research on this company. that he does not make an investment like this lightly. that he has spoken with the ceo of herbalife, michael johnson, several times and thinks he is

doing an excellent job. he also went on to say that bill ackman is completely off base in what he has been saying about herbalife. so this is really, guys, game on now. this is really big ackman versus carl icahn for real, as carl icahn is making a bet that herbalife is in fact the legitimate business he believes it is and it's not a pyramid scheme, that bill ackman has alleged ever so publicly. i should also tell you that obviously in something like this, there are so many questions that remain. and carl icahn is going to come on our show at noon tomorrow, sometime between 12:00 and 1:00, where we'll be able to ask him directly, you know, more of the thought process behind this investment, what he plans to have happen, but we can all read what was in the 13d and surmise, sort of, where things are going from here. but at least now we know that carl icahn believes in herbalife and he not only believes in it,

he's putting his money where his mouth is by taking that 12.98 million -- or 12.98% stake in the company, and, again, you know, the number of shares that i just told you, 14 million shares. 12.98%, carl icahn joining me live in an exclusive on cnbc tomorrow between noon and 1:00, melissa. >> look forward to that, scott. thanks for phoning in. appreciate that. this could really be a game-changer for bill ackman. >> it could. there's two things of interest here. one -- several things. obviously, carl's stake is huge, talks about it going private. that would -- that would be taking the whole company private. but also in the 13d they use the term recapitalization, which could end up being some sort of levered recap or something like that. that has the potential to cause an enormous squeeze, i think -- this something we talked about for a while. you've got to be very nervous if you're ackman. even if you believe -- your whole story is fully intact, it might not matter. >> the mechanics of it lead to a

short squeeze. >> so how would the recap cause that squeeze? >> if -- if carl and somebody else were to do a tender offer -- let's just throw out a making this up, i have not heard this anywhere. let's just say they were to do 50 bucks for, you know, 50% of the company or 60% of the company. you -- one cannot be short going into a partial tender. i mean, one cannot short after they announce a partial tender. can't do any new shorts. and there will be, i think, a -- you know, some havoc in back-office lending areas around the street. what do you do in this type of situation. i think it has the potential -- >> let me back this up. people who have lent their shares out to be -- >> they need to call them back in tender. they're going to need to tender. now, i have no reason to think that big ackman's short is not secure. i would bet he's very smart guy, i would bet he has a secure a borrow as one could possibly have. however, there's the rest of the

stock. and i think this really has potential to be a very problematic situation. >> this is why you don't get involved in the short side in a lot of these plays, because it's very difficult. and as soon as you saw those titans go head-to-head, that's what makes the shorts a little bit more -- i should say, a lot more risky. and it's definitely not where you want to be in the -- >> that's why this is a story that keeps on giving. not only is it fascinating -- a stock story, but it's a fascinating wall street personality story, because when you saw these two guys in the halftime report duking out against each other, you could have thought for sure that icahn was going to come back with a move that said you know what, bill ackman, i'm going show you. and tonight -- this potentially is -- this is for you, bill ackman, happy valentine's day. >> actually, now that you say it -- who knows? >> this stock closed -- this was january 25th on the halftime show those guys were duking it out. the stock closed at 44.5. it wept down to the low 30s and now where it's trade nth after market is about 44.5.

when you think about the price action going on here, it's been a trader's dream, especially for guys looking to accumulate possessions. i'm sure icahn was not dying to buy the stock in the mid 40s. so people have had their opportunities, just like loeb did on the initial ackman news. >> i don't know if you can separate ackman as the fund manager versus ackman as just the guy en tangled with carl icahn but in terms of managing the position now, somebody with such vitriol against you -- >> right. how do you put that in your model? >> exactly. how do you put that in your spreadsheet, vitriol. is there a lever there? i don't know. recover you're short -- if you're so convicted to stick with your short, if do you that, despite the harm you might be causing to your shareholders, which, by the way, include potentially institutional investors. >> which -- yeah. it's a very difficult situation. i don't know. >> no one gives on positions like this. someone gets carried out and someone wins. that's exactly what happens,

we've seen it in the past. >> scott is still on the "fast line" with us. scott? >> yeah, melissa, listening to the conversation, the one thing that pops up in my head that a lot of people have learned over the years, carl icahn plays to win. and when you pick a fight with carl icahn, a lot of times you have come out on the wrong end of the stick. now, nobody knows where herbalife is going to go from here. nobody knows whether bill ackman will be right or carl icahn is right. but what we do know, you get real good insight, sort of, into the mind set of a scrapper and a fighter who has been doing this for many, many decades. and if you pick a fight, he's willing to go to extraordinary lengths to win. he obviously believes very clearly that herbalife is a good business. how much of this is motivated by that? how much is motivated by the disagreement that he's had with big ackman for all these years? nobody really knows. they're the kinds of questions we'll certainly ask tomorrow on

the halftime show. but icahn is a fighter and he's showing it yet again. >> he's a fighter and might not matter at all what it's worth. >> right. >> if carl is willing to just say, you know what, i'm buying this just because i can -- >> or offload a tender just because i can. >> it's like pocket change for me. >> but does this -- this, actually -- it's a small little picture into what happens with wall street, and no matter how much work you do on a stock, and how convicted you are, you still can be wrong. and i mean, i think it goes to you have to have stops. we talked about it earlier in the show. you have to have some kind of exit plan in case something happens that you did not expect. >> here's one. this is a brilliant day chart here, the stock up 6% off the opening lows. somebody got the heads up here. maybe some of these -- >> it could be icahn himself buying stock. we'll see. we could look at his 13d and just -- >> we should note too -- englewood cliffs has been combing through the 13d here, and take note that part of the

possible scenarios that could happen that were listed in 13d is possibly taking the company private. >> right, right. >> so possibly taking the company private would be absolute -- >> that may be actually better than a recap. a recap could cause more of a squeeze in taking private. here we see his -- we see his trading. i don't see anything in the last -- actually, up through today. >> all right. well, herbalife's shares obviously spiking. icahn taking a 14 million share stake, 12.98% of herbalife. and part of the strategy could be taking the company public. carl icahn will be -- private, excuse me. carl icahn will be on the halftime report tomorrow at noon so you will not want to miss that. coming up, why one of the top strategists on the streets say it is time for the bulls to take charge. and why it may pay big dividends to emulate the biggest active investors like carl icahn. more details straight ahead. at tyco integrated security, we consider ourselves business optimizers.

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crawling the wall of worry in the slowest rally ever. could it be the street just isn't bullish now? joining us, the head of equity and quantitative strategy at bank of america. always good to see you. key to this whole thesis, sell side indicator. basically, right now, it's had its fifth straight or fifth time it's gained in the past six months. what does that mean? >> what this means is that strategists are get a little bit more optimistic on equities. but i still think that the tenor is very bearish. so what we look at is just the average equity allocation that strategists are recommending on wall street. we found this is actually, sadly, a rereliable contrary indicator for what you should do with your money. but the idea is that when everybody is saying buy

equities, chances are all that good news is probably priced into the market, and the market is likely to disappoint. today i would say the strategists are still fairly luke warm, and, in fact, quite negative on equities. the average allocation to equities that's recommended is sub 50%. so strategists are really recommending an underweight in equities and slight overweight in bonds and cash which i think still suggests this rally has been met less with optimism and more with skepticism. >> it's kind of funny you're ragging on your counterparts on wall street saying whenever they say buy it's the opposite and vice versa. >> i think it's the idea, it's not that we're all a bunch of idiots, hopefully but really the idea that when everybody is looking at the same stuff, and all of the data is overwhelmingly negative, and everyone is talking about it, that's not going to be what blind sides me. >> okay. so based on the sell side indicator, the expected 12-month return would be up 24% which would get you to 18 to 24 on the

s&p 500. >> that's not our base case. but i think what this sentiment indicator is telling me is that we're not at a point where everybody is all in. we're still at a point where everyone is pretty nervous and there's still more flows that are going to come. >> so sectors you want to be in if you are a believer there is more to room to run in this rally. >> sure. i think we're at a mid cycle pause right now where we have avoided a recession. last year it was like everything that could go wrong didn't go wrong and we managed to avoid a recession. we sort of got to a better place. this year earnings were looking pretty good. i think we're kind of heading into that cyclical recovery type of a market where you want to be overweight the gdp sensitive sectors and stocks like industrials, tech, energy, i think energy could do something pretty interesting this year because it's kind of a global cyclical play. the sectors i would avoid are expensive bond proxies, namely utilities and telecom. i think they have run up, it's all about a search for high yield and i think we're kind of at the end of that ride.

>> thanks for joining us. bank of america, merrill lynch. grasso, bullish? >> here's the problem, exactly what she said. a slow grind higher, because everyone feels as if we're going to get that saelloff and no one is all in. and we might get them all in right around the all-time highs. >> and you're hoping she is wrong. because you're short -- you're ultra short. >> ultra short. i think that stuff is completely mental. everybody i listen to, see, anywhere, read, is bullish to all ends and the market is stuck at 1500, 1520. we went through this chart last week on the show. every time in the last 15 years, the s&p has gotten a 1600, it's been massively rejected and had a 30 or 40% drawdown. i don't think putting new money to work makes sense. >> got to take a break. let's take another look meantime in shares of herbalife surging on word that carl icahn has taken a 13% stake in the company, 14 million shares.

4550, last trade. next on "fast" how you can make money by betting alongside the likes of icahn and other heavy-hitting activists. stick with us. ou keep an older car running like new? you ask a ford customer. when they tell you that you need your oil changed you got to bring it in. if your tires need to be rotated, you have to get that done as well. jackie, tell me why somebody should bring they're car here to the ford dealership for service instead of any one of those other places out there. they are going to take care of my car because this is where it came from. price is right no problem, they make you feel like you're a family. get a synthetic blend oil change, tire rotation and much more, $29.95 after $10.00 rebate. if you take care of your car your car will take care of you.

activist investors like carl icahn make a whole lot of change, but does it pay off to follow into their footsteps. ken squire is the founder of the 13d activist fund, averaged a 28% return since its inception in 2011. ken, always good to speak with you. >> nice to be back. >> i've got to ask you about icahn taking a big stake in her herbalife. what's your take on this? >> i obviously respect bill and carl very much, as do the market. when bill disclosed he was short, the stock went down. when carl disclosed, it went up. i think it's going to come down to whether this is a pyramid scheme or not and whether the fda investigates -- >> why? when you have the personalities

going against each other and let's assume that some of the animosity that was shown in their last sort of, you know, battleground, is the reason why they're, you know -- carl icahn is taking this stake. then icahn's main objective is to see ackman squeezed out of his position. and we don't need an fdc investigation to squeeze ackman out of this position. >> i doubt that carl would do it solely because he wants to get back at bill. i think he probably likes the investment. bill, obviously, strongly believes it's a pyramid scheme. yeah, carl could end up buying the company, right? and then it could -- there could still be an fdc investigation and they could both end up losing. >> let me ask you this, then. in your mind, you see opposing positions by bill ackman and carl icahn. who has a better track record? who would you be more likely to follow? >> i don't -- i look at the situation. i don't just follow the activist blindly. it depends on what sector they're in. it depends what the shareholder base is. i look at what's the chance of

activists' success in that situation. so i have a lot of bill's position to my fund, a lot of carl's positions in my fund. they're both -- this is like the super bowl of activists, right? how can you pick one -- >> what do you do right now in herbalife? you're tracking both of them. and here's the follow-up so you can answer both. how long do you hold that position? are you just a straight momentum on the play or is this a longer endeavor for yourself? >> no, i would -- i hold the 13ds general until they're no longer required to be a 13d filer. so i hold it as long as they hold it. i haven't seen the 13d yet, i haven't read it. i haven't spoken to carl. i don't know what his investment thesis is. i don't know what the activist catalyst is, so i'm not sure whether i'm going to take a position or not. the fact that bill is on the other side of it, obviously, is meaningful to me. so we'll see what the 13d says. >> i want to go to some of the activists you do follow. just generally, people want to know what the secret to your success and interestingly carl icahn and bill ackman are among the top four that you do follow,

along with dan loeb. can you walk us through some positions that you're most optimistic about? >> one i like is dine equity, a position by a fund karld called marcato management. i hop and appleby's chain. pure royalty stream. the company is doing great, a lot of cash flow. and the thing i like about this, it's not an activist situation where you're telling management they're doing a bad job. they're doing a good job, there's so much cash, they just need to figure out the best way to use the cash. and marcato is proposing a $6 dividend. >> we're just about out of time. i want to run quickly for the viewers out there through your other picks. agriem, and also motorola solutions for value act capital. ken, great to see you. >> good to be back. >> time now for pops and drops.

a pop for gmc up 10%. karen. >> yeah, this is a great earnings release for gmc. also seems to be kicking in. it's not expensive here either, but i wouldn't chase it today. >> pop for the vix -- or drop for the vix, 2%, which is interesting. sorry. >> this thing hasn't been up in months. >> i know. >> the volatility on the s&p index, it's not volatile at all. the last 30 days have been 7, near multiyear lows. this thing is going to need some sort of eevent to get volatility back. >> venue tree, trailing. >> they cut their dividend, one of those proxy names everyone was buying. if you're in this one, $31 might be support. look for a bounce off that, and then i would get out. >> got a pop for best buy, up 3%, grasso. >> the founder had hopes of taking this baby private. and you see that's the pop you're looking back into.

it looks like january here. it's had a hell of a run recently. i think now he's running into a wall with finance. the step back and take a look. don't be in the name. >> drop for trip adviser, down 7%. mike. >> a mild miss on earnings, a little less than 3 cents a share. investors are concerned about declining, they talked about headwinds and also talked about making longer-term investments. that said, the stock is a little bit pricey. i certainly wouldn't chase it. i think this is going lower. >> a pop here for valentine's day. since it is valentine's day. sometimes love stinks. for the second year in a row, the new york city department of environmental protection offered unusual valentine's day trip. a select number of lucky couples take on a tour of the city's wastewater treatment plants in brooklyn. highlights of the tour included romantic views of the sludge treatment area and a hike to the top of the plant's digester eggs. >> did that last year. so over that.

>> all right. coming up next, the stocks our creators are courting this valentine's day, but first why traders karen and dan are at odds over a major financial firm. he'll deliver the most compelling argument. find out when "fast money" comes back. (announcer) at scottrade, our clients trade and invest exactly how they want. 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. [ engine turns over ] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus.

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financials hitting all-time highs this week. jpmorgan helping the rally, the stock trading at hits highest level. should investors ride out the rally or take some profits? kicking with the bulls, karen finerman and dan nathan, 90 seconds to make your case. karen. >> always to me it comes to valuation. and the valuation here is not expensive. even with the run up this stock has had. you think about where this stock peaked, it was at 53, 54 before the financial crisis and at that time, they only earned 4. 31 for the year. this year i think they could earn closer to 5.5 bucks. you put a similar multiple on that, that gets you somewhere in the mid 60s. so i think there is plenty of room to run here. it is more expensive than the

other one, a price to book but a premier franchise for sure with the best management team there is. you cannot say the hot factor is not worth something. i concur, there is the hot factor. but really it's valuation and the premier franchise. that's what i'm going with. ♪ you sexy thing >> it's on a loop in your home. >> yes, it is. >> what do you have to say for yourself there? >> to me, yes, it's trading near one times book versus let's say citi and bac, 7.6. so on a relative basis, it's a little more expensive. here's the thing, okay? karen just mentioned, this thing is trading at about $50. it's traded there on a technical basis. you know, multiple times over the last five years. so if you look at the chart, and we have one up here, very interesting to me. you know, this stock in each of the last five years has had drawdowns of at least 27%, peak

to trough. you are buying this at a five-year high. so me, i see trouble brewing -- hold on a second here. i see trouble is brewing in the european financial sector. the euro stock banking index down 7%. >> i'm sorry to put in here. i'm not part of this debate. all these withdrawals have happened after the financial crisis. it doesn't matter we're now emerging theoretically from the financial crisis and might trade differently. >> i guess my argument is this. as karen just mentioned, peak earnings back in '08, a company not expected to grow earnings year over year or sales. flat this year and only expected to grow marginally next year. you've been buzzed now twice. three times. >> nobody is counting. >> i don't think putting new money to work in a stock trading at five-year highs where valuations were expensive relative to its peers makes sense. >> grasso. >> i'm going with karen on this. my favorite is goldman sachs, we looked at it, you could have said the same thing of goldman

sachs at 119, 130, 140. now trading at 155, head to go 180. >> what about your technicals? >> i know. that's why i'm trading goldman on technicals. broke through all resistance. so did jpmorgan. probably both still a buy. to dan's defense, if the market fades, these are obviously going south. >> beaks. >> i've got to go ultra short dan over there. at these valuations, at one times book, no, you can't buy them. the technicals say you can't buy them. and still think europe has been broken. not fixed over there. a lot of problems with their banking system. and i think ultimately it comes home to roost here. >> all right. going to switch gears now. tide. tide. let's talk whole foods. supermarket chain plunging. mike, what do the options traders see? >> some of the options traders are doing probably what some people are tempted to do in the equity which is try to catch the falling knife. what we saw people doing, buying the february 90 calls, paying 40 kemts. these are bets the stock might

rally above 90 in a relatively short period of time. i would say, though, i think that if you're climbing to go long, i would rather do it with the calls in the stock. in these situations, the stock can trade off for another couple days. i wouldn't buy it here. >> thank you. we're going to take a break. but if we can, can we show an after hours chart of herbalife, because they're ticking to 46 bucks a share. the story continues in the after hours session as it is revealed in a filing that carl icahn has taken a 12.98% stake in the company. we are now up 20.4%. on this one. coming up next, traders pucker up and reveal the stocks they're wooing this valentine's day. stay tuned for the trades you'll absolutely love. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats.

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the good, the bad and the ugly starring our own brian kelly. back in november, looking forwards japan for a trade. here's what he said. >> i would actually go over to japan. and look at japan. because they certainly are going to have to print an awful lot of yen. great for the stock market, dxj,

a name i've talked about. short yen, long japanese stocks. great trade. >> nice call here, bk. shares of the dxj popped 21% since then. what do you do now? >> i think you take profit. i think it was the end of january said to take profit. so i would probably -- left a little on the table here. i think this trade works for a long period of time. but right now it's pretty extended. >> now into the bad. just last week, bk donned his bear suit, the one that zips up the back for a bank trade. take a listen. >> you know, what's not working, i don't think here, bigger banks. barclays in particular, i would be short. ltro loads being paid back and banks selling off the bond. >> getting a big pop this week on news of a restructuring plan. how do you manage this? >> yeah, hot in the bear suit on this one. i still don't like the name. they're restructuring, so great, the stock gets a pop. but doesn't mean their business is doing any better. the way i would trade it here, i

would use two days ago's high as your stoppout, if you're short this and use that as a stop and say if it gets there, you know, bk was wrong. >> all right. in honor -- >> does the bear suit respond -- is that about his hairy back or something? >> no, it's a suit that zips up the back. >> pretty hairy. >> the whole suit is hairy. >> let's move on. this is going nowhere. in honor of valentine's day, stocks you love but out of your league. beaker, which stock are you asking to be your valentine? >> starting with me? i've got this prop. and it's oil uso. that's the oil itself i have been out of. i've been bearish on, primarily because there is a lot of oil in canada. yesterday opec talked about 90 million barrels a day, the demand going up. if that happens, you will start to see oil go much higher, could be bad for everybody else. but uso is the way to play it. >> all right. so you're waiting. >> i'm courting it.

>> you're hoping that will come around to your advances. >> yeah, you know, i'm doing my thing. >> all right. let's go out to mike co. mike, what's your valentine's day trade? >> this stock might -- not seem expensive at face value. i'm looking at ford and one of the things important about looking at a company like this, you need to cyclically adjust earnings, because it's a cyclical business. i like the company, their products, they have a tail wind right now basically with auto demand, an old fleet. so this is a stock i really like. i would like to see it cheaper and definitely would be a buyer. >> at what price do you think it would be consummated at? is. >> it actually has fallen a little bit. i'm almost getting tempted here but i think i'm going to wait about a buck and then i'm in. >> ooh, a bucko owe. >> he's got no heart sign. >> i don't know. >> we all have these heart -- where is your sign? >> he has to get to work. >> i have a heart. >> team player. >> let's go to karen now. >> well, this is sort of an

interesting one. i have been watching weight watchers. for a while. and then today is the kind of thing we're like, you know, wow, i thought they were really hot but then i look at them and i'm like, wow, not as hot as i really thought originally. you know? >> yeah, yeah, yeah. >> i don't know if i had had beer goggles on or what. doesn't look as attractive today. >> everybody can relate to that. >> but maybe there is a great personality and i will come back to it. but at the moment i just am going to wait. >> yeah. >> you're going to wait. yeah. and you're also waiting from afar on -- >> okay. okay. all right. jamie dimon. but in my own defense, we had a conference called today, i said i'm just staring at the flowers he sent me and you all believed me when i said that. he did not send me flowers. a joke. >> let's go through these guys here. >> this is one i want to play. the smartphone space is littered with these hardware guys just not doing what they need to do, margins getting squeezed. qualcomm is a name expected to

grow earnings at 11% this year. sales at 20%. i think in you can get this stock at 6 2, you buy it. >> grasso. >> 3d systems, 3d printing. a lot of hype. where is the camera? >> go. >> boom, easy. right now it's a lot of hype behind this whole thing. about three key players in here. but the truth is, i'm waiting, because sit ron put out a research report that took a chunk out today. stock rallied right back. maybe one day i printout a carb carbon copy of my wife here. >> oh. final trade after this. ♪ ♪

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