fundamental basis, absolutely. this friday, the automatic spending cuts are likely to take place. that is $85 billion in spending cuts in defense and discretionary areas. probably leading to job cuts and a construction of economic growth. the bigger problem, of course, is the long-term debt that is fast approaching $17 trillion. there seems to be no plan for a grand bargain to lower the dealt and deficit. instead, we get more of the same. tax, spend and borrow. but the market doesn't care right now. why? ben pbernanke to the rescue. >> the committee remains confident that it has the tools necessary to tighten monetary policy when the time comes to do so. as i noted, inflation is current it will subdued and inflation expectations appear well anchored. neither the fomc nor private forecasters are projecting the development of significant inflation pressures. >> so, we wait for any signs of the fed taking its foot off the pedal and rates move higher. any hint of after this is, of course, bad news for the stock market. but so far, that does not seem

to be in the cards. also, watch the ten-year yield earlier in the program, hedge fund manager bob olsteen said he would not be worried until the ten-year yield hits 3.5%. take a look at where it is. comfortably below that 2% level. this market will likely suffer many selloffs, but that's likely to be met with a buy on the dip mentality. like we saw earlier this week, after monday's selloff. it could happen again soon, by the way. spain is coming up to an interest payment on its long-term debt, which could potentially send rates there higher. that could dent down markets here. in the meantime, you have to be courageous to fight the fed. investors who have tried continue to lick their wounds. we'll keep watching it. take a look at the day on wall street it was a good one for the bulls. the dow jones up 175 points, just shy of the gain of better than 200 at the high. 14,075. nasdaq up 32. s&p up 19. financials, tech and economically sensitive names the highlights on the upside. that will do it for "closing bell." 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. rally mode. forget washington grid lock and the italian elections, the bull run is back on. we have your top trades. rotten apple. no new cash for shareholders. why a top-rated growth manager is sticking by the stock. and regis on the markets. mr. millionaire himself joins us on set with his latest stock picks in another "fast money" trading exclusive. but first, to our lead story. a monster day for the markets. the dow within 1% of its record highs set back in 2007. the s&p closing in on those levels, 3% away from its high. guy, what do you make of -- >> gad you're back. >> down there? >> crazy. regis is here -- listen, we talked about the markets for awhile. we had a couple outside days, now lower. what we're setting up for is the

potential in the s&p for an outside week higher, which could be very powerful, might get us to the 1550 level. a lot of people pooh-poohed today, saying volume isn't there, but guess what? if it's one share or one billion, you made money if you were long today. i still think we are headed to the 1550 level. >> in terms of industrials and materials, investors believe there is growth out there to be had. >> right. tomorrow, we're going to get gdp. people will be looking at the inventory levels, which people think are low and think there's a lot of tail wind to rebuilding inventory. that's why the transports got the legs. financials been a big part of this, too. italy issued $6.5 billion in debt today. the volatility of monday from the elections is a rear view mirror event, at least shortly. we said monday night on this show, what happened on monday was a reminder, but it was a vol extreme event for a market that had not priced vol effectively at any realistic level. so, if you bought the v-2 x,

which is euro volume, we went up 25% on tuesday to trade in on monday's numbers, fell back today and i think we stay some what subdued here and people feel like things are better. >> vol down 13% on the vix. what do options traders see in terms of the curve? >> came way down. just as we said -- it's funny how this stuff actually does make sense and plays out, folks. but it's mathematics. and when you see the futures not moving or barely budging to the upside, and you see the spot jumping dramatically, people, if they could, would bring that to market, would bring their vix that they've got out there on that curve, bring it to market, sell it at a higher price. why wouldn't you? that's exactly what they did. they've hammered it since tuesday afternoon. they continued to hammer today. now down four full points from the highs put in monday, four points and then some. >> you buy here? >> would i buy the vix or the market? >> buy the vix.

>> no. >> are you buying volatility? >> no. because it's pulled back but it's still whatever, 1460ish, 1740. i think, tim, it easily trades back into the 13s here on this particular -- >> we forgot about -- >> you think thets will go higher? sequester is a of the barbs th tr ng the senate needs toet off its ass. say that word because the house speaker used that word. >> yes, he did. >> ass, a-s-s. and then harry he'd said that the house gop is parked on a ben bench. we're just days away from the sequester here. so, the barbs will be more heated and frequent as we approach that deadline. >> however, this is the third time we faced the issue. last august, the disaster. then we had december 31st, which was also a nail-biter. and now, i think the market is getting some what numb to these kind of, you know, big fights in the press and i don't -- nobody that i know thinks that there will be in resolution by friday. so, we -- i think that's priced

in fully. >> so, we're -- >> yes. >> we have to talk about today, though the second half of the bernanke testimony is usually a yawner, because we've gotten it out yesterday. it was as the market needed reaffirmation from big ben today. considering the move the stock market had today, the fact that bonds didn't really sell off, that's an extra positive, because the reason bonds were selling off because the fed took away the punch bowl, et cetera. so, that had a lot to do with today's price action. we had two days to listen to the fed saying, look, the labor market is still in a period of weakness, we think we're in a place where we can spend $85 million a month. >> let's welcome back keith mccullough what's the next move here? >> i think we go higher. i think we're going to test year to date highs and then the real games start. at the end of the day, i think pretty much -- that may have been, melissa, the biggest head fake in the last three years in

one day volatility. and, you know, jon spoke to that. i think the fear is more of a, the curve or the fear of expectations. people continue to predict or attempt to predict end of the world type stuff and i think if you look at the vix and the move that it pulled back, you know, on here, i think the more important move in the vix is that it's down 35% and you mentioned boehner, from that boehner moment, that last week of december, so, you know, volatility is making lower lows, stocks are making higher highs. bond yields held, at least the level i'm looking for and at the same time, the biggest debate now between the bulls and the bears is come mod tips being down a bullish or bearish signal. and i think it's good for connell sumers, reflecting the strong dollar and that's really the core to my bull case. >> the reason weapon got vol spiked up is something that's staring us in the face. we're in a place where we have a very weak government in italy, we have a place where much of

europe actually could be going through votes that are similar to italy. we have a place where people know the fed is beginning to think about when they taper, even if that's not tomorrow. why has that change and why can stocks with a sequester on the horizon go to the moon? >> again, i think that's more of a fear than anything else. i mean, think of how far back, tim, we have to dig to find these things. i mean, italy, not a small country. i'm not being complacent about italy, but if you are really wore roy rie worried, just sell italy. issues in italy, issues in japan, i think from a fund flow perspective continues to auguster very bullishly for stocks in the u.s. i'm not trying to be completely complacent here. but one way to trade the risk of the range, again, this 40-point range in the s&p 500, where you either freak out and sell low or you buy the dip, which, again, that's about what we need to do on "fast money." >> so, keith, i have to ask you, in terms of your recommended portfolio allocation, does this

bullishness, is that reflected in that allocation? last i remember, a bulk of it was in cash. >> yeah, because, again, well, it's not a bulk of it anymore. we're down to 36% cash, but again, it's a global model. so, to define that, we are very bearish on commodities. very bearish on treasuries. asset allocation, all of fixed income, zero. so, again, when you put zeros on those, yes, i like cash instead of those places, and i love equities where i'm invested. >> all right, keith, thank you for calling in. appreciate it. so, we asked the traders, with all that said, what are the top trades in today's rally session. dr. j? >> top trades were in the transports. in particular, pete was just pounding the table for not just ch robinson, which is delivery and so forth, but the rails. you take a look at cp. they're getting the strength

from it, because they serve it. and rumors about ksu, which i'm going to let guy have the thunder in that, but perhaps again rumors about them doing something with kinder morgan or others. there's going to be a lot of oil extracted out of the backen and one of the ways you do it, right now you the only way, right now, is through these trains. >> and tim, you are -- >> yes, no pun intended. >> i don't go to you just because we're talki ining trann. but your top trade fields into the global growth story. >> and unlike keith, we think that maybe come mod tips aren't in a super cycle as they were in 2007, but were oversold. we're actually buys calls very vale, going into their numbers after the bell, which could be coming out at any point. part of this is a call on a company that's been beaten down and has domestic issues in terms of sucking them with taxes and other things to support their economy. but these guys, look, if the transports are rallying because guys are filling up their

intermodals with freight and other things that need to get from a to b, vale is doing very well. it's a broken company that expects a pop. >> and karen, though there's some doubt about the consumer, you stuck with your consumer names. >> yeah, for me, macy's is the biggest consumer position that we have and i still think the macy's story is very much intact. the valuation is very attractive. we will touch on it later with the jcpenney news tonight, those terrible same store sales, obviously, somebody like a macy's or a target is likely to be the beneficiary of that. >> we will get into that later, but it was a miss and the trade is trading lower. guy, your trade, is this a defensive trade? >> no, it's not. this is a momentum place. tenet health care. yesterday, reported a fourth quarter that was lackluster at best. given the move the stocks have, that stock should have been obliterated yesterday. it really wasn't. today, it performed well, up 3%. but that to me still has the momentum behind it. maybe guidance was cautionary or maybe they were just

sandbagging. but thc still has movement. >> health care names, are they defensive and momentum -- can they be both? >> i think some are momentum trades and others are defensive. we talked about pfizer forever. that's been a defensive play that's provided you with some momentum. pfizer, since you started booth nine, what -- >> post nine. yes, thank you. >> pfizer is one of the best performing stocks down there. let's move to apple, holding its annual shareholder meeting. jon fortt has all the details. jon? >> yeah, melissa. tim cook really wanted to send the message today, i feel your pain, to investors. in kind of the clearest language ooich heard him use, he said, i don't like it either, the stock drop from september to now. the board doesn't like it. apple management doesn't like it. he tried to make the case that the way to fix this is not some cash distribution. not preferred shares, it's innovation. he said that apple is working as hard as they ever have on that.

ticking down the list on things they got done at the meeting today, the entire board did get re-elected. and by a healthy margin, as usual. also, two proposals that apple wanted voted down actually did get votedd apple executives to hold onto a third of their stock until retirement was one of them that really, you know, didn't seem to get much shareholder traction at all. the other one had to do with human rights committee, some shareholders wanted the board to form a special sub-committee on human rights. the shareholders overall voted that down. generally people here, it's kind of a hometown crowd. pretty bullish on apple. the questions are, what are they going to do about emerging markets, how do they feel about samsung and google? tim cook said, i could push a button and churn out more devices than they are, but that wouldn't be good for apple shareholders. i'm pretty sure he was referring to margins there. people seem pretty happy with things which you might take surprising, given the stock is down from where it was a year ago when the overall markets were up, guys.

>> jon, thank you. down 14% since last year's meeting. karen, do you think apple is at all responsive to share holders given they said, you know what, you may think what you want in terms of what we should do with our cash, we're very, very actively discussing it and that's it. >> maybe they don't know what the word active means. that could explain quite a bit. here is the thing about tim cook. i don't hit the he actually should -- i don't think his job is truly to worry about where the stock is trading. i'm not being sarcastic at all. i do think it is the job of the board and ceo to allocate their capital. and that's where they've been remiss. they haven't been doing that. >> he hasn't -- jobs didn't have this problem. he didn't have $137 billion. >> he had 24 and 50 and he did nothing. that's like me buying a new desk saying, that's my acquisition strategy. that's how much money they spend. it's ridiculous. jobs did it, too. >> the optics are different, too. steve jobs didn't have a stock down 37% in a matter of months. >> puts pressure on the guys. i like the fact he didn't kowtow

to this today. >> coming up next, why the nation's top growth fund manager is sticking with apple. his recipe for soaring returns. and later, from who wants to be a billionaire to who wants to make some fast money, regis philbin returns. he reveals which stocks he's betting on right now. and look at some of the afterhours movers here that we are tracking here. jcpenney, we mentioned, a miss there. the stock is down by 9.6%. groupon, a bigger miss, down 24% and monster disappointing, the stock is down 3%. much more details on these stories coming up when "fast money" returns.

welcome back to "fast money." want to give you an update on jcpenney. look at the shares moving afterhours, sharply to the downside. this is why. jcpenney putting a loss of $1.95 a share. wall street was expecting 18 cents. those key same-store sales for the fourth quarter, down nearly 32%. wall street thought it would be bad but thought it wouldn't be as bad as that. they estimated down 27%. gross margin took a big hit at 23.8%. it does look like there's $930 million left in cash on the

balance sheet. something else that we're watching closely, the conference call going on right now. so far, ceo ron johnson is just talking about the year's accomplishments, but did admit big mistakes were made last year, collarly in pricing and he does take the responsibility. we'll bring you more as we have it. melissa? >> all right, courteney, thank you. and karen, this goes way beyond just missing the metrics here. >> the numbers are terrible, but not so shocking. i think everyone was expecting horrible, pretty bad same store sales. to us, what's looking interesting is, they are stretching out their accounts payable. that's a way for them to generate cash. they pay out more slowly and they are able to amass the cash. i think that is something really worth digging into and we will, because it looks to us like that was the methodology that generated -- >> they're not paying their bills right now, they are stretching it out to later. >> i'm not saying they're late, not saying anything like that. >> stretching it. so, it's like a shell -- i don't want to say a shell game, but you're just moving around what

you owe and when you pay it. >> that's how it seems to us, which is very different than generating cash in what you think of a more typical way, selling goods. >> i think but for the fact that there's a 45% short interest, this stock is only down 9%. this stock, given what we just read, should be down more like 15% to 20%. that's the only thing holding it up right now. i never understood the ackman case. i still don't. i think the stock should be down a lot more than it is. >> mike khouw, are we at the point where if ron johnson resigned, the stock would move higher? >> this is a challenging situation. ill think a lot of people think that ultimately ran johnson's strategy might be the right one. you have a company with $2.5 billion in net debt. you have concern whether or not they're ever going to make it and see that thing live to fruition. if you look at the options market today, they were telling you the same thing. we saw buyers, the most active option today was the weekly 17 1/2 puts. we're not down there yet, 19 bucks. this thing was predicting is 15%

move today on earnings. we're not quite there. but i mean, we're getting pretty close. and it really is an issue of leverage and survivability. as karen pointed out, they can live to play another day if they can sort of manage the better cash position, but ultimately, the options market sees a lot of danger here. >> the conference call under way in ten minutes and courtney will bring us the latest as we have it. one of our most talked about sectors here on "fast," the transports. the index jumping 3% today. guy had a great call on one transport in particular. take a listen. >> great story, decent report, still love the name. i think there are better places to play in the rails, ksu. >> all right, ksu, up 10% since that call. so, let's go off the charts here, guy, and today, a credit swisse note out about building a terminal -- >> third party energy company. that sent the stock up huge and traded huge on big volume. i mean, we've talked about ksu for a long time now.

people are shot against this on valuation. but if you look, we have an overlay in terms of how it trades against the do. completely outperformed now. specifically today, what do you do? a monster volume day today. it traded off in the afternoon, while the tape was going higher. that givens me a little bit of concern. hopefully today wasn't your first foray into it. hopefully you listened to us. today is a great day to take profits, look for the pull back. >> are you a believer in all transporments across the board? are you a believer in the dow theory that the tans importants are going higher, and so, the dow should move higher? >> we've sat next to each other for awhile and my premise all along has been, the s&p is headed to 1550, the vix was going to go to 12 and the ten-ye ten-year-year-old w ten-year-year-oten ten-year yield was going to 2%. i think it's a lot of trouble at 1550, that could be the end. that's what i have said for

awhile. >> the other side of this, guy, if you look at what's going on with housing, the permits, all the things that are leading indicators of moving stuff around. we're buying rails in emerging markets where they are shipping oil product to china and things are getting going. so, the valuations, if all those things are happening yet to come and watch gdp tomorrow, this is leading for transports, where outside of ksu, i don't think valuations are terribly stretched. >> you make a fair point, timmy, and i'm walking and talk -- >> you can walk and talk? >> i think in a lot of ways, i think that's why they've gotten the valuations that they've had, so, these rails have -- a number of the rhames have outperformed, ksu being the one that's jouts performed. a lot of it is imbedded in the stock now. great story. i think as the s&p moves to 1550, the rails are going to hit a pause. >> let's talk apple now. down almost 1% on the day. of its annual shareholder meeting. the stock is more than 36% off of its high. is it worth holding onto?

according to the portfolio manager of morningstar's best performing growth fund in the past two years, it is. joining us is mack mur mark mul. mark, it's great to speak with you. >> thanks, melissa. >> you actually think apple is still a growth stock. why? >> well, the sectors are still growing. the idea that the ipad or the tablets and smartphones, i mean, i think i saw data on the smartphone business growing about 26% the next couple of years worldwide. they'll be part of that. will they be number one as they were last quarter, i don't know. but they'll participate in that, i'm sure. >> were you adding to the position as the stock was going down from seven something to where it is now. >> yes. >> you were, okay. and in terms of what your standards are for the growth fund, apple still meets the criteria. though we're seeing decelerating

trends, it still meets the criteria of the growth fund? >> it is decelerating, but if you look at consensus, they have at 19% growth rates. and you're buying the stock at ten times earnings, net cash eight times earnings. you have to look at both sides of the equation, what's the growth and what are you paying for it? it always think once a stock corrects 20%, which it did in mid-november of 2012, in my mind, it takes a year, year and a half to get back to at least 85% of where it peaked out. it will take time, but no, i still have very, very high hopes and it's been a headache, owning apple the last three months, but not a cancer and i -- >> mark? it's tim. so, what you're going through, though, might be what a lot of investors are going through with apple. at one point, 15% of your fund, which is a massive weighting, way more than i would have in one name, but we run things differently. investors have invested a lot of their capital.

at what point you have questioned, that, i own a cheap stock that's getting cheaper. and though i love what's going on and i believe in this company, i have to cut some bait, not all of it. >> well, one thing i can tell you, what i probably will do, i haven't done it yet, i will take some tax losses from the stock that i bought on the way down and only reason i'm willing to take a chance of doing that is just because i still think it's going to take a year to get back on track. and even doing that, it's going to be a little bit of a gamble. you have to give it a 62-day cycle to be able to take some losses. but no, outside of that, if i was, you know, i was higher than i probably should have been, you know, but i never knew how these things are going to turn out in the short run. if i was in that 10%, i'd be taking it up to that or above it. because it has other things i love. it's value, growth, momentum. no momentum right now, but great growth, still, and has great value. >> all right -- >> if you can get all three, it's perfect. two out of three is pretty good. >> mark, i want to move onto

some of your other picks. your fund has performed very well overall. cabela's. is that really a gun play? >> well, i think that's -- i think that effects the trading, which i know your program focuses more on. we've owned same thing -- we've owned that since 2008, and they went from being a real value, you know, play, and now it's kind of a value and growth. they held up opening their stores during the downturn and now they're beginning to pick up that pace. so, i think the stock can grow 14%, 15%, 16% over the next three to five years and you're buying the -- even right here, only about 16 times this year's earnings. >> mark, it's karen. sorry to jump in. a name you and i both own, mastercard. what do you think of the valuation here? >> it's done great, but you're looking at a, still, kind of a 20% grower and you're effectively 20 times this year's earnings. so, yeah, it would be nice to get it cheaper, but it's not --

it's a peg ratio, and that's wonderful. actually our second-highest, you know, projected grower, so, in this part of the cycle, i still want to own growth stocks. >> mark, thank you for phoning in and hope to talk to you again. >> thank you. >> mark mulholland of the matthew 25 fund. dr. j, what do you make of the picks? interesting ones out there. >> absolutely. and the cabela's trade is equally as good as his apple trade in terms of the timing of that and the entry. obviously, selling these things at the highs is always something we all wish we could do, put a timestamp on that, but good portfolio, i'd say. and in particular, i think the challenges that apple's meeting right now, the galaxy note 8, which is their fablet, the bigger tablet. i think what they're going to address next is something like that. >> gescreen size. >> yeah, the bigger phone with the screen size, because people are spending far more time on the come suitor side of that

device than they are on the phone side and i think that's where samsung is winning. >> going to take a break here. ahead on "fast money" -- >> i plan on coming down there and taking notes, as you guys talk, every day at 5:00. >> regis philbin is making good on that promise. he will join us this hour to reveal his new celebrity stock picks. but first, is coach a fashion faux pas for investors? karen and tim duke it out in our street fight. jpmorgan, goldman, citi, all rising 2%. much more "fast" straight ahead. tdd#: 1-800-345-2550 opportunities are waiting to be found in faraway places.

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welcome back to this special rally edition of "fast money." look at the consumer staples continuing to hit fresh highs. campbell soup, germ mineral mil hormel. consumers are all about buying spam, jelly, spices and microwave popcorn. >> and the clorox wipes. >> the bunker trade going on, even as the dow is at five-year highs. >> it's worked. you look at hormel foods, the quarter they just reported wasn't fantastic. i don't think it necessitated the move that we've seen, but all these stocks are on fire right now. they're all huge momentum stocks. i mean, this has absolutely gone parabolic. i do still think that general mills works. we talked about that. and inabsolutely still think that clorox works here. >> and the buffett deal for heinz helping a lot. luxury names in the meantime, more of a mixed bag here. coach finally getting a bounce today after speculation that the company may be exploring a sale. but is that enough to get the stock moving again?

let's have a good old fashioned street fight on coach. karen is our bull. tim is the bear. you have a total of 90 seconds to make your best case. karen, you're up first. >> actually, tim and i both have our street fight jeans on. >> that's right. >> anyway, to coach, i'm always a value girl. i like to look at that first. and coach to me is really interesting value proposition right here. we haven't seen this multiple for years. i understand that they have lost momentum. but i think this is a very enduring brand. i think they have an excellent management team. but i think that the bench is deep. this valuation we haven't seen in a long time. and i would not buy it at all on speculation about today -- i don't believe it at all, actually, there's anything going on right now. however, i did happen to look. they are some what vulnerable. they have a non-staggered board that is interesting. but even here just on the valuation alone, it's interesting. and you get a theoretical take overfor free. i wouldn't pay anything for

that, because i don't think that's happening right now. still, compelling right now. >> tim? >> sounds like value is the call here and karen makes a great point. but the trade-off between visibility here. effectively this is a company that's changing its focus. feels a lot like jcpenney. because of slowing margins and slower top line, they're going for new strategic initiatives. they're going to be a life style brand. even if guy is buying more man purses for himself and his buddies -- >> look who is talking. >> the exciting thing for coach is something that i follow often. this is a multinational that's getting 30% of its sales out of asia. but to me, the low hanging fruit is very much gone there. they have to reinvent themselves in asia. this is something that i think with intense competition, michael cokors, other people in this space already, very difficult. karen -- i'm still on my time, no? >> ah, no, are you? >> i'm sorry. >> finish. >> the takeover route, they're too big to take out. people that want them have what they have. >> go ahead, karen, quickry. >> i want to say, i'm offended

by the jcpenney reference -- >> not the man purse? >> not the man purse -- it doesn't offend me. i don't know if it offends you. but they're incrementally changing. they have an excellent business. they have an enduring brand name. they need to tweak it. that happensluxury brands. they haven't ruined that business at all. this is not a jcpenney. >> all right, we have to call it here. we have to get in here. >> let me do it, because he -- first of all, it's called a m s murse, wise guy. >> man purse, murse. >> but to finerman's point -- >> satchel. >> where we traded yesterday in the stock was basically where we traded down to in the middle of 2011 and bounced. monster volume day today. you washed all the suckers out. i think, given what i think is going to happen in the next couple of days, that coach is worth a look. >> it washed out who? >> i think you -- the volume that we've seen, i think, new

buyers have gotten back in. big selloff from 60 something a few months ago. again, we bottomed out here, the same levels we traded down to yesterday, we bottomed out in the middle of '11. the volume we saw today flush e a lot of the people out and i think it's headed higher. >> they have a lot of work ahead. >> karen sides with guy, but we want to know what you think. tweet to us and we'll have the results at the end of the show. coming up next, is twitter worth 10 billion bucks? we're going to get some answers. he's a tv icon with the talent for stock picking. this is next, after twitter. which of these stocks has netted regis philbin a 100% return? is it micon, goldman sachs, emc or wynn? we'll get the answer when regis joins us live, straight ahead on "fast." ♪

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welcome back to "fast money." just want to update you on the information we're getting out of the jcpenney conference call. traffic for thes fourth quarter down 17%. remember, that was a holiday quarter. that's worse than all of last year for the traffic numbers. not a good thing to see. conversion down 10%. ron johnson did say, however, that traffic on valentine's day this year, remember, they

reintroduced that vannen tine's day sale. and joe fresh performing very strongly online. at least compared to liz claiborne, but online sales down 34%. as you can see, shares still down, fairly sharply afterhours. we're going to continue to watch, because this conference call is ongoing. >> thank you, courtney. let's bring in stacy witlitz. stacy, what do you make of this quarter? >> hi, melissa. well, as courtney just said, traffic was terrible. it was down 17%, but here's the news. ron johnson basically just admitted that he's made a mistake. that is consumer has voted and they vote for discounts. so, he's going back to discounting. his company spent $1 billion in the last year to take away discounts and do a 180 and go back to where they came from. and he still is choosing to call the discounts a gift. >> so, it's karen, can i ask you a question?

do you think that the consumer will buy that, will be happy or pleased with that gift or do you think that he's lost that consumer for good? >> well, i think he's lost a good chunk of their consumers by taking it away. and over a year, they've learned the fact that, you know, that discount is not there and they've gone elsewhere. i think if they get aggressive and reach out to their old consumer, say, hey, we're going back to where we came from, potentially he gets some of that traffic back in the stores. and as courtney just said, they did talk about valentine's day and the promotions, the traffic picked up a little bit. but you have to look at what that does to the gross margin. i mean, margins were down 600 basis points this quarter so, the question is, how long does he have to get that customer back in the store? >> stacey, quick last question. is ron johnson safe or because of bill ackman, can he stay in his job? i'm just wondering, from a shareholder perspective, you finally have this guy admitting they made a mistake one year later and it seems like too little, too late at this point. >> i would agree with that.

i think it took him a year and a billion dollars to unroll -- to roll out a strategy, number one, that he did not test. so, you know, it took him that year to make the mistake. now, he's admitting it, but you know, we could have avoided this by testing it, so, i think that's -- it's a tough one to keep him around. >> all right, stacey, thank you for phoning in. appreciate it. stacey widlitz. our next guest sounded the alarm on groupon's business model and today, he joins us to break down twitter's valuation, one of the most anticipated ipos. welcome sam, ceo of a form that analyzing major privately held companies. so, twitter, is it $10 billion worth? >> not quite, but it's act chlly worth very, very close. >> really? >> we value it at $8.6 billion. the valuation data points, blackstone group, which is obviously smart money, just did

$9 billion valuation. on secondary private stock markets, it trades at roughly $8.5 billion. it's very close. the fact is, twitter, frankly, is a low cost cash machine. and they've just turned on that cash faucet last fall. let me give you some points. number one is, it's the, what's called rtm, real-time marketing, which is something that a lot of people, unless yourself in the digital media social space don't understand. perfect exactly, espn, right? they spend big money, advertising now on twitter and if you are -- during the super bowl, they have a promoted tweet, so, as, literally, as the score changes, who is ahead, that ad continues to change in real time. >> right, so, obviously, very different from some of its competitors but in terms of applying valuation metric, you have the blackstone stake to help you compute that. but can it be -- is it comparable to others -- can we say facebook trades at this and

it's worth x per user and so therefore -- >> let me give you secret information -- >> love secret, go ahead. >> only if we can trade it. >> you can trade it. last year, they did $245 million in revenue. this year, going to exceed $500 million. a billion next year. 40% operating margins. it's literally a cash register. so, when you are buying into twitter, you are buying a cash machine. how do you trade it, is the question? basically a couple of ways to trade it. one, you can actually buy it, if you are an acredited investor, saying you are wealthy, but not really as wealthy as it used to be, because they haven't changed the stan ard. a million in financial assets or earn 250 a year. if you do that, you can buy it on private stock secondary markets. where, again, currently, you can get it for $18.50, just under 9 billion. we think in a year, going to ipo at double that. we think it's a double in a year. >> buy it on the secondary market right now -- >> yes. >> and you'll see a double in a

year. >> exactly. if you cannot buy it on secondary markets, you can actually do it indirectly, not a pure play, but through a couple of public vehicles. there's ken landis, first hand technology fund, roughly 15% of the fund is twitter. >> those who have access to the secondary market. okay, quickly, quickly -- >> and those are public vehicles. >> i want to touch on the eyeglass online site. that's hot. recently, it's been working with google to make the google glasses cooler and this is another hot one. >> it's a very hot one. a little earlier stage. now, they -- two days ago, they just raised $41 million. value in the company at $225 million. what they did, they closed the round officially a couple of months ago and reopened it a few days ago for two strategic players, which gives you some hints now. number one, american express. so, now, they're basically partnering with american express to work together, a new marketing campaign. number two, they allowed mickey drexeler, ceo of j. crew.

what does that tell you? they may have expanded to custom shirts. warby parker has been called the zappos of glasses. not true. they make their own. their costs are so low. they don't have to deal with the online shopping bots. they keep pricing down. >> sam, thank you for coming by. really appreciate it. and, he made a great call on groupon. the stock getting hammered in the afterhours session. mike khouw, what do you see in the options pits there? >> we saw really big institutional one by two call spread. i think this was probably a big holder of the common, looking for a fast rebound. kind of a stock recovery strategy. they didn't spend any money for it, so, if the stock rallied, it would have helped them, but it didn't. coming up next, he doesn't need a lifeline when it comes to stock picking. regis philbin tells us how he is playing the market right now. much more "fast" straight ahead.

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and now, it is the moment we have all been waiting for. tv legend, former host of "regis

and kelly" and "who wants to be a millionaire," regis philbin is here. always a pleasure to see you. >> great to see you. i watch you guys most every afternoon and i love all of you. i have a couple of edges to clear -- >> get it out, yeah. >> no, no. i have been fooling around with this apple stock, you know, for years now. >> you and me both. >> guy had a little advice for me when it was $300, and he was right. i bought, i sold uphigh, i made some money, let it go down again -- >> regis, we have a clip from the last time up were on the show talking about apple. let's take a listen. >> let's hear it. >> i love to play with the apple stock. am i crazy? when it goes down to $330, as it almost did today, i thought it was going into the 20s, i buy it, 1,000 shares and wait. and sooner or later, it goes back up to 350, maybe 355 and you have enough money to buy guy adami a good italian meal. >> and look at how well fed he is. >> first of all -- >> tell you what.

>> who paid for dinner that night? >> you did. >> but it was a great time. >> what happened to my stock, guy? i used to buy it at five and sell it at six and change, you know, and then it -- i kept buying it and then guys like you that i would hear on cnbc when yell out, it's going to 1,000 -- >> no, no, no, reg, i never yelled that. what does your friend pete say? you have to have a plan and you have to have protection. we talk about it all the time. >> what's my plan? >> the stock is not participating in a broader market rally. you have to ask yourself, if it hasn't gone up now -- >> i'm asking you that. >> cut half your position and look to buy it back lower. when i say lower, i think below 400. how you like them apples? >> it's going to go below 400? >> i didn't say that. you have to have a plan. >> buy it below 400 and where does i got from there? >> that's -- you have to ask yourself, regis, it's sony 1980 or apple a new company.

>> what is their problem? a new company, tim cook, what is it? >> when products lose their cool factor, bad things happen. and we might be on the verge of that now. >> every six months they put out a new product -- >> reg -- >> why do they have -- >> regis, it sounds like you are answering your own question. >> you people know the business! >> and i tell you what, this sounds like a segue into another challenging stock pick. you are known as mr. micron. >> thank you. >> what's regis doing in micron? >> i was the first one to tell you that and i heard scoffing and mocking laughter. >> you're right. our bad. >> look at the chart, reg. since we came on -- >> it's climbed over eight. >> we're down a little bit since your big message on april, let's see, may 23rd, 2011. i don't want to call you out on it right to the spot. the point is, what people want to know is, do you still believe that with some of the things that apple is going through, e

seeing something similar? i think this is some of the pressure on micron. are you still a holder? are you still there? >> micron's never been higher than it is today. >> what are you talking about? >> it's over eight. >> it's over eight. >> $12 stock, reg. >> so, you are saying -- >> i'm saying, have a plan. get out of some of your position tomorrow, regard lels. look to buy it back cheaper if it goes up. you can come back. >> are you willing to sell? >> no, i'm going to stay with it. i stay with stuff. >> you are a buy and hold guy. >> wait a minute. najarian. >> let me ask you a question. do you, because you said, for instance, you bought apple at 300 and as it went up, you sold it. this is something that i think smart investors do. they take money off the table. so, kudos to you for doing that. if apple, if i were to say to you, apple, six months from now is 550, how much that you have on now would you take off six

months from now? >> oh, these najarians, they have -- whole life to pursue. um -- i would hope it would go to 550 and i'd be willing to sell it then, because that's my break even. >> so, you take that -- >> break even is irrelevant. >> no kidding? really? >> absolutely. >> yes. >> i'm long, too. i've been long. >> so, would you sell right now? >> no. >> would you sell at 550? >> probably not. >> there you go. this is -- this is the only person who knows! >> regis, regis, regis, we have to wrap it up here, but last question, yes or no, are you talking to fox sports about a new show? >> all i can tell you is this. there will be a major announcement coming out next tuesday. that's all i have to say. >> all right, regis. stop by any time. >> i love all of you. thank you for a wonderful afternoon show. >> thank you. tv legend regis philbin. much more "fast" straight ahead.

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