tv Street Signs CNBC December 19, 2013 2:00pm-3:01pm EST
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con c conagra up 5.35%. >> the top story could have been real estate. it didn't make our cut, but there are signs that 2014 will be a very different year in real estate. >> absolutely. especially if interest rates go up. >> that will do it for this edition of "power lunch." thanks for joining us. >> "street signs" begins right now. could the dow actually carve out a 25% gain for the year? we are getting close. we are higher again today. the impact of santa bernanke's slick move on your money coming up. hi, everybody. here are the other top stories that we have for you on this thursday. why what's good for stocks has been awful for gold. your votes for the worst ceos of the year, and herb's got his. and a look at our predictions for the year. what we got right and where we just completely win. >> hello, everybody. well, this time yesterday the market was gyrating to the down side in a knee-jerk reaction to
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the birth of the baby taper. but after the big move to the upside thatle toed, we asked our friend from a little indigestion today. the dow has barely moved. the nasdaq and s&p are very, very slightly lower. brian? meantime, gold is doing something it has not done, mandy, in more than three years. it is falling below $1200 an ounce. gold right now at 1195. let's get right to jackie deangelis at the nymex. you know when we're leading with gold, it's probably an ugly day. >> good afternoon, brian. ugly indeed. gold closing just a short while ago, down $41 on the day. a couple of reasons to are this, according to traders that i've been talking to, the first is that we're seeing a rush of shorts into the market. but also as we approach the end of the year, you've got a lot of investors and hedge funds particularly rebalancing their books for tax reasons. so that is another reason why we're seeing some selling pressure. but the good news here is that it does potentially present us with a buying opportunity. and most traders are saying they do expect to see a little bit of a bounce here. one of the reasons for that, of
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course, is because the fed has been worried right now about deflation. the fed issing ingoing to be encouraging inflation in the new year. the same hedge fund that sold by the end of the year, they're likely to put those positions back on on january 1st. talking to george from rbc capital, he thinks early next year we could see gold back up to 1300, brian? >> frank mcgee, head precious metals trader. i know you've been negative on gold for a bit. you've been right. how much lower do you think it's going to go? >> well, i have to tell you, i think that 2014 is going to see a continuation of this slide. i think that the sentiment has definitively changed. we're seeing a significant rotation out of the metal into u.s. equities. that's going to continue through next year. the context here is that you have a market that has almost no inflation inside of it. and with that aspect up, the fear has left this market. that leads us one direction to go, and that's lower. >> one direction to the downside. >> absolutely.
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my projection, as i've told you in a number of instances originally was the 1,000 to $1,100 range. i'm revising that down to about $900 probably sometime in the middle of the summer. >> what could change sentiment? what could come and turn things to the positive? >> probably only short-term spikes, and they're going to be met fairly well with mine selling and hedging. if you had an unraveling of the iran negotiations, that could do it. additional problems in syria. but the real issue that you have right now is economically, the u.s. market looks like it's on the mend. you're going to have some significant energy favored shifts over the next six or eight months. it's going to continue to help the economy mend. and in a noninflationary slow-growth market, where's the fear? where's the rally? i mean, i like the long side of the market usually, but after this last 18 months, 2 years, you have to go where the market says it wants to go. that is lower. >> elevated down to $900 an
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ounce. fran frank, thank you very much. >> always a pleasure. another big story we're following today, target. it is at the center of one of the biggest breaches in consumer data in u.s. history. it's a story that impacts millions of americans, and it could have huge impact on the safety of your money. mary thompson has been working the story all day. what do we know at this hour, mary? >> what we know right now is that up to 40 million target customers could be impacted. the data breach occurred over a 19-day period from wednesday, november 27th, through sunday, december 15th. the breach doesn't impact target's online shoppers, just those who shopped at target's 1,800 stores in the u.s. and paid with a credit or debit card. target says the data contained on the stripe on the back of those cards, the cardholder's name, the card number, the expiration date and security code is what was stolen. now, target is telling clients to monitor their bank and credit card accounts for any suspicious activity. card issuers like amex, jpmorgan, citi and capitalone are doing the same and monitoring accounts.
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if you're concerned you could be one of these customers, you may want to put a freeze on your credit card. and among other steps you could take to protect your information, you could find a list of those suggestions at streetsigns@cnbc.com. i would urge people to look at that if they were one of those shoppers. >> scary stuff. why don't you stick around. we're going to bring in somebody else as well and try to answer a very simple question. is it actually possible to keep your plastic money safe? joining us, c-net editor in chief lindsay. what do you think? credit cards -- first off, credit cards are probably going to go away in the next ten years and we'll go to smartphone apps like we already are. are those going to be any safer than a credit card? >> you know, it depends on how they're set up. i think what we really need is something like two factor authentication for your credit cards. you need the data and the approvals to be stored in two different places. so any time a store intercepts your payment information, then it's vulnerable. if that store gets hack, it doesn't matter. >> for example, and you say two-step verification, i know in
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gmail, you put in your password, you have a code to be sent to your cell phone via text? is that what you're talking about? >> exactly. the store says okay, sends information to an app to your phone, to the bank, says we're about to -- we want to approve this sale, you get a text or an alert on your phone. and you say yes, i approve this sale. it can't happen without that second step. >> but already a lot of credit cards in places like asia and europe have computerized chips embedded in the plastic that help verify purchases. why don't we have that system? >> you know, change is slow. it's really difficult. that system may help, but, you know, that's the verification of the sale. it doesn't really protect the data. >> ah. okay. so your identification is still at risk, mary. >> still at risk. and you know, that's something these emv chips are something that the u.s. is moving towards 2015. but, you know, as you suggested, there is still the data protection. so lindsay, how do we -- how do retailers go about ensuring that they are better protected that their customers are better protected? what are the other steps that
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they need to take? >> well, they obviously need to hire top-notch security. and this is an arms race. it's very, very difficult. i think the best way is to invest in systems that will help them do this offsite, right? like i said, store data in different places. if there's a single point of sale storing all the data, all of that data is vulnerable. if you keep it in different places, if one system fails, the other one is still hopefully protected. >> one more thing -- >> you can't -- cash, while expensive, is unasaleable. if you carry cash, it could get stolen from you personally, but at least you know when that happens. >> cash is king. >> cash is king. i want to point out, too, what's happened, one thing that has actually happened in the wake of all this is that the target website that deals with credit card inquiries is down. there was such a flood of inquiries that the website has actually been shut down. so, again, lindsay, i'm sure a lot of people are sitting there saying, should i cancel my credit card? because is that the safest way to protect myself right now?
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even if there is no suspicious activity? should they be doing that right now? >> i'm going to. i shopped at target during that period. i used my debit card. probably as soon as i leave the studio, i'm going to walk over, call my bank and say, can you issue me a new card. >> good advice. >> you know what's amazing, too, i got ripped off last year. i don't know how they did it. they rang up a bunch of stuff about three days before american express called me. i asked them if they were going to go after them. nah. they didn't care. i'm not blaming amex. i'm just saying credit card fraud is so pervasive. it was $1,800 or something. they put it back in my account and that was it. never heard about it again. so weird. >> and apparently the u.s. accounts for the lion's share of global credit card fraud. 47% of global credit card fraud. >> because we account for more than half of global credit card use. >> use. >> shocking. >> yes. still to come on "street signs -- mary, thank you. we're going to bring you a post-taper playbook.
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the playbook is dead. let's welcome in the drift. that's your new word. plus, a big mcwoops for mcdonald's. plus, the moment you've all been waiting for all year long. herb is going to reveal his pick for the 2013 worst ceo when "street signs" returns. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the all-new fidelity active trader pro.
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we had the big news. the fed was taking its foot off the gas pedal also known as the taper. let's welcome in the drift. as we've talked about, the fed is not stopping. it is maybe simply changing. so what does that mean for your money? where should you invest in this brave new world? let's bring in paul hickey. i know you were probably not surprised by said taper, now drift. but have you changed your investing outlook at all? >> the investment outlook hasn't changed, brian, as a result of yesterday's developments. i consider this a dovish taper. yes, they began to produce foreign purchases, but they have made it even more dovish in terms of how long the zero interest rate continues to be present. and while the economic forecast was somewhat more upbeat than before, brian, they also are going to continue with a zero interest rate for probably a couple of years more. what does it say to you about
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the strength of the economy that they need zero interest rate for about seven or eight years running? >> k on. i'll follow up on that on what you're calling the zero interest rate policy. so we've had the zirp for a few years and stocks have rallied. if we continue to the zirp, will stocks continue to rally? >> for that you go back to 2006/2007. when you have a rally going and when there is a bubble building up, the stocks work until they don't. so essentially, they are going up, but what you see is you look at the fundamentals. you have the economy growing subpar, less than 2%. corporate earnings growth for the year going to be 6% or 7%, but equities are going to be up 30%. and that is an unsustainable combination. the question is, when does it give up? when does the bubble burst in and that's the difficult question to answer, brian. but the bubble breaking is, i think, yet to come.
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>> and because you have that scenario in mind, i know that you're saying significantly lighten your weight in equities. but paul, you've come along today with a couple of sectors and even one specific stock to watch. tell us. >> what we want to focus on here is the immediate aftermath of the statement we saw, the dollar strengthen, which is good for domestically based companies with domestic revenues. and the strength we saw was in the financials and consumer discretionary, more specifically the media sector. so in the financial sector, we think that will continue to do well. steeper yield curve benefits them historically. the volcker rule is behind, you know, we have the terms of that. that worry is behind us. you know, we have to live with it, but we know what it is now. and in the consumer discretionary sector, that is also done well when we have a yield curve at current levels. in the media sector, we like discovery and cvs. and more broadly based in the consumer discretionary sector, one we like here is ftd.
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and what it is is it's a spinoff of united online. it hasn't done much in the past two months since it was spun off. but what you typically see in these spinoffs, the child stock tends to lag the market and overall in the first two months when it's spun off and people see it in their portfolio and sell it off. but over the long term, say after three months or so, they start to rally and outperform. >> what two names do you like in the financial sector? >> in the financial sector, we have to focus on the big banks. wells fargo and goldman sachs are two names that currently look attractive to us here. >> thank you very much for joining us today. >> thanks. since we're talking about the taper, whatever happened to the taper, by the way? the taper effect is on. and one impact, and we've just been talking about it a little bit with our guests, is a stronger dollar. with wall street bullish on the buck for 2014, it could be a headwind for some of america's biggest multinationals. let's welcome in one of our newest members, sara eisen. >> what's your favorite show?
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>> "street signs," 2:00 p.m. >> always. >> always. seriously, this is a big theme shaping up for 2014. a stronger u.s. dollar. and they're getting increasingly bullish. bank of america, merrill lynch, an 8.5% drop from here. strong dollar, weak euro. against all sorts of other currencies. and it could be a huge headache for some of america's multinational companies. some of the most recognizable ones. if you look at today's news, for instance, on mcdonald's, saying mcdonald's japan forecasting profit will be 60% lower than they were expecting for fiscal year 2013. and in large part because of the weakness of the japanese yen and the strength of the dollar. >> so to what degree can these multinationals hedge against this? >> they can. they've been dealing with currency fluctuations for a long time. it hits them on two parts because it makes their products less competitive overseas, more expensive and also with they bring those profits back home, it's worth a lot less.
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you can really break this down by sectors. materials are ones that tend to get hit. we got research from citigroup's chief analyst. materials, food, i mentioned mcdonald's, staples like p & g which get a majority of their sales outside of the united states. >> i love the weaker yen. >> have you been to japan? i was in japan. i love it had. >> you'll find out -- >> propelled one of the stock markets high we'll be talking about later on in the show. >> and by the way -- thank you, kyle. you're the man. thank you. >> the sullivan charity cause. >> what is that? >> by the way. welcome to "street signs." we have the taper jar. anytime you say taper, you're supposed to put a dollar in here. people got cheap. bill gross paid up. >> i think you should change it to the zirp jar because you said it three times. >> we'll have the zirp bag. this is the taper jar. when it gets filled up, the entire "street signs" team, we'll go out for adult beverages. >> there's about $60 in there
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which is ridiculous considering we say it at least 60 times a day. >> do you have any yen that you could add? >> i do actually have yen in my wallet. i was just in japan. i wanted to mention there are some winners from the stronger dollar because this is sort of counterintuitive. but there are businesses that deal in the united states like retailers, for instance, that tend to do well. >> thank you so much for joining us, sara. see you again. still ahead, herb one step closer to revealing his pick for the worst ceo of the year. plus, forget about leonardo dicaprio. we'll be hearing from the real wolf of wall street when "street signs" returns. the american dream is of a better future,
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energy lives here. markets must have run out of puff after all that energy yesterday, have not moved at all since we last talked to you about 20 minutes ago. okay. the wolf of wall street is expected to be one of the hottest movies this christmas. it is based off a true story, though. the story of a young money-hungry booze-drinking, womanizing finance hot shot who had a lot of fun and who thought he was completely untouchable.
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>> and it wasn't brian. >> it wasn't brian, but he's like a wolfette. you're not quite that crazy. >> a wolfette? >> like a little mini wolf. >> a wolfette? you could have said coyote or -- wolfette? >> dog. okay. who is the real wolf? introduce us. >> all right. i did meet him back when he was releasing the book in 2007. and here's why that's important. he's talking to me before the mortgage and banking fiascos are revealed. and while bernie madoff is still in business. the more things change. >> my name is jordan belford. >> he met with me in '07 describing a path of nearly unbelievable debauchery and criminal behavior bilking his firms out of more than $100 million through pump and dump of stocks and little-known companies going public. the salesman, while admitting his crimes, even then it was hard for him to admit he was selling junk. were any of the companies total garbage? >> you know, define garbage.
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>> in your opinion. were any of them worthless? >> no, none of them were worthless. none of them. >> garbage would be, then, worth less than what you're paying for it. >> correct. worth less than what you're paying for it. inflated. i'm not saying that's right. it's just as bad, but it's not worthless. >> so some companies were garbage, but they weren't worthless. >> correct. >> sort of like that. he makes a living as a motivational speaker now after serving nearly two years in federal prison where his cellmate was tommy chong. you can see the entire profile we did on cnbc.com. >> i love the way he likened wall street to basically adult disneyland for dysfunctional people. instant gratification, always happy, you know. >> the ironic thing -- >> sounds a little bit like silicon valley now. >> yes, yes. >> wealth everywhere. just because you wear jeans and a pulled out shirt doesn't mean that instead of brooks brothers -- >> i don't think we're seeing that sort of debauchery.
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22 different drugs he was taking at the time. buying coco chanel, balancing it out. had coco chanel's yacht which he sunk in the mediterranean, flew his own helicopter on convey le quaaludes. >> interesting stuff. thank you. now, this is the moment we've allwaiting for. herb joins us with what could have been worst ceos of 2013. herb, who almost made your list? >> brian, well, john chambers of cisco almost made my list. doug of caterpillar almost made my list. and jeff smizek almost made my list. i anguished over it. i'm going to explain it all. i have a piece coming up on thestreet.com in about 20 minutes. i have to tell you something. i have to tell you, like obse e
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oberhelman, this is a guy who should be on the list. he way overpaid, but a chinese company that turned out to be a fraud. he has no credibility left when it comes to making acquisitions. why isn't he in my top list? well, because he's in the mining business now. he bet the ranch on it. so is joy. deere is what caterpillar used to be. all of these companies are underperforming the market right now, doing really horribly. if you single him out, you've got to single some of the other guys out. he gets a pass. there are no more excuses for him. chambers, when you go back and look at the stock price, this stock is down 10% over the past ten years. it's underperformed the s&p 500 the whole time. i was surprised to see that. when you come into this year, where the companies were badly and big surprises on the down side, you say, wow! you know, wait a minute now. look at the other big tech companies. you could say the same thing about, you know, oracle and larry ellison, the same thing about ibm. you go down the list. so i say that he gets a little bit of a break here.
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but it's going to be interesting to see if he can turn the company into what he expects it to be. then you have united airlines. look, the stock is up. a lot of investors like this company. the stock is up. the company seems to be turning around. i received hundreds and hundreds of letters, e-mails through a writing campaign that occurred from former united -- listen to this -- former united and couldn't nemgntinental employee and current united customers, all of them saying the same thing. this guy has done one of the worst mergers around. and by the way, in the airline industry, he probably is the worst ceo right now. he can't match what delta has done. >> but he still didn't make your list. >> and it's appropriate we end on an airline because herb hijacked that segment. >> did you like that? >> like the politician. three minutes, just barrel through it! fantastic. >> you guys didn't have to do any work. >> herb, do not go anywhere. we've still got some work to do. we're going to bring you back and reveal your pick for the
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worst ceos of 2013 and all three guys you barrelled through did not make that title. we'll bring you back at the end of the show. stick around. next, tesla getting whacked again today. we're going to dig in on exactly what it is and why. and mcdonald's miskag cl miscalculating. plus, a stock that one analyst sees going up more than 30%. we're back right after this. [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade.
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"street talk" time. investment advice. others are not giving to you. we deliver, though. first up, we have medical device company zimmer holdings. >> yeah, initiated overweight. atlantic equities not helping the stock today, but here you go. their target on zimmer is $105. that's about 14% more than the stock is right now. again, not helping the name, but just something to be put out there. >> we've also got chipmaker semtech hitting 52-week lows. >> down more than 10%, up to 25.15. the company cut guidance. they blame delays on phone carrier capital spending problems. b. riley says you've got to sell the stock. they cut the target from 22 to 30. however, sticking with it. they got a buy.
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they say the slowdown is temporary. by the way, the stock off about 33% from its 52-week high. >> the market is telling rv maker winnebago to just hit the road. >> shares slammed even though profit rose. the reason, revenue missed estimates, and they were very high, folks. the stock's up 98% even with this drop over the past year. a lot was expected. they delivered a lot. >> yeah. >> they just didn't deliver enough. the stock's down $3.50. >> remember how we were all saying it was the winnebago debate. people getting back out there and making big purchases. worthington industries trading higher after reporting higher quarterly net sales. >> yeah, i don't think this is cal and his dog spot. stock's up 3.5%. 44.19. a metal processing company. 770 million. the estimate was just under 700 million. a big beat on rev few, but be careful. i looked at facts before this, the stock at 44 bucks is about $8 above the consensus analyst price. they've jacked their estimates up or they think the stock's
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coming down. just something to watch on wor. >> tableau software. what's going on? >> again, not a move, but something to be paid attention to. cantor fitzgerald initiated the company with a buy. so here's why we p up it in. the target is $88. the stock's at $65 and change. that's about 33% more than the current price. so we're trying to find stocks that people are talking about, maybe quietly not getting -- pisani's not going to go after them, not big enough. 33% gain, data is the ticker. tesla shares down about 6% today following reports of a fire-related -- and that's key -- to the tesla model "s." the company released a statement yesterday that said, quote, based on our inspection of the site, the car and the log, we know that this was absolutely not the car, the battery or the charge electronics. apparently there was a fire in
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the wall socket where the model "s" was plugged in, but the car itself was not really part of the fire. now, this is the fourth report of a tesla-related fire, although i would even say it has nothing to do with the car itself. the stock is getting hit, though. we know that it's had trouble recently with these things. let's start talking numbers now on tesla. rich ross. we've got him and brian kelly. brian, i don't understand why we're even talking about tesla and this fire. it's a wall socket. i could have had a voellkswagenn the car. maybe it got too hot with the plug, but does this have any impact long term? >> i don't think so. it is on the market, but that's why it's a buying opportunity here. the guy plugged in too many christmas lights. he burnt out his wall socket and they're blaming it on tesla. it's crazy. tesla itself, when it's down 6% here, you have to look at the company like a venture capital type of deal. you have a management team that has a history of transformational technology. you're never going to be able to look at a traditional metrics, not at this point in time. but the cars are fantastic cars. they're changing the way that
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automotive technology is going. and so i think down 6% on a crazy story about a light socket having a problem, it's a great buy. >> do you think that, rich, the charts are also backing up the theory that it's a good buying opportunity? >> well, mandy, i do agree that it's an incredible car, but the chart is actually more dangerous than the car at this point. i'm a seller. let's bring up that year-to-date chart and i'll show you exactly why i would still sell tesla here. yes, the stock is on a fantastic run. after a 40% decline, we build a nice little base there at the 200-day moving average. but rerally 33%. now resistance comes in multiple ways overhead. first from that 50-day moving average. second at the neckline where prior support becomes resistance, up around 155. and also we still have that trend line in place from the september high. so with resistance coming in three ways here, you want to be a seller, intermediate turn down trend intact. there are much better buys.
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look at gm, bmw overseas. much better autos out there right now. >> technically, he says stay away. bk likes the long-term, i guess, what did you say, venture capital-type view? >> absolutely. that's how you have to look at it. it's a venture capital deal. >> all right, thank you very much. rich, thank you. and folks, be sure to check out the online edition of "talking numbers." up next, a mcmighty misstep for mickey d's. say that 1,000 times really fast. plus, a brand-new take on mexican pizza. and herb is coming back with his pick for the single worst ceo of the year. later on, we'll recap our predictions for this year. what we got right, what we got wrong, what we just stunk up. first, bill and kelly, what's coming up on "closing bell"? >> we've got a couple hours loaded with exclusive interviews. >> existing home sales fell to the lowest level in a year. zillow will tell us if the real estate market is running out of
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mcdonald's deeting with a mighty foul flop. "the wall street journal" reports mcdonald's has 10 million pounds of unsold mighty wings. the wings were a short-lived menu item. you might remember them, that just didn't really sell back in the fall. 20% of the 50 million pounds ordered are just sitting around in freezers, "the journal" says the chain plans to try and sell them again soon at a discounted rate. >> add some flavor. chipotle has been one of the hot tamale stocks of the year. it conquered the burrito and now it's hoping to take a big slice of another pie. the pizza market. partnering up with a colorado pizzeria with a plan to roll out more. it's all in the hope of making dough for investors. joining us, steve anderson and from piper jaffray, nicole miller reagan. steve, is this going to -- it's one pizzeria, it's a partnership. i mean, when you talk about nation, this is it. is it going to mean anything to
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chipotle at all in the next year or two? >> not immediately. in fact, they do own another concept called chophouse asian kitchen. it's had minimal impact right now. if there's a way cha chipotle can take over and grow the concept and meld it within the existing food integrity ethic, this is something that a lot of people will watch and could in the long term have a meaningful impact on earnings. >> of course, if we ask the simple question of why pizza, nicole, i guess it's cheap to make. everybody loves it. it really boosts margins when you put it on the menu. is this a good strategy in your mind? >> absolutely. i mean, i think the impact for investors is getting, you know, to see into the future. and that this could be a multiconcept portfolio. just really looking at chipotle not as mexican cuisine, not even as pizza not even as asian, but really for the economic engine that it is. >> but when you have an overweight rating on it, are you factoring out this pizza move
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considering, as brian said, it's only one location so far, and not even a majority owner in it? >> well, basically, its a call option. it's a way to say unit growth stays double digit. margins stay sky high industry leading where they are. it's just support for the stock from here on up. >> i guess what troubles me, steve, though is, you know, shophouse, what, about eight locations now. now this. do they feel like their core market is slowing? because this is a momentum stock. >> well, certainly that's the case. as nicole just mentioned, we still think chipotle still has low teen unit growth ahead of it in the next several years. and this is a way of saying that down the road that there will be other growth catalysts once chipotle growth starts to level off. >> you downgraded it to a hold, though. what was the reason for that, steve? >> it was mainly a valuation call at that point. the shares of chipotle were up nearly 70% for the year. it had been one of our favorite stocks for the year. for the fact that it's a sales
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strengthened throughout the year and it was an early play on falling commodity costs. it met our objective at that time. >> steve and nicole, we're going to leave it there. thank you both so much. appreciate it. >> thank you. well, we are just two minutes now away, folks. try to hold your breath, from herb revealing -- >> i'm on the edge of my seat. >> i know, worst ceo of the year. who gets the honor? we'll find out. >> he's going to tell us who it is. why he picked the ceo. and then it's our turn. we're going to be recapping our predictions for the year. that's next. life's an adventure when you're with her. and it always has been. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain,
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we learned earlier in the show who is not on the list. so without further ado, drum roll, please -- herb greenberg, who is your worst ceo of the year? >> michael jeffries of abercrombie & fitch. there is nobody, nobody who is more -- who is more deserving than he is. when we went back and looked, we look at a variety of metrics,
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abercrombie is the only nonmining, non-natural resource stock that's been in the bottom 25 stocks of the s&p 500 over the past one and three years. if you look at the performance, it's been horrible. you have a board that all they could basically do is extend his contract for a year because you know that he's long for the world. i don't think he will be in this job a year from now. i would be surprised if he's in this job. >> is it true that if he was replaced -- and i know there was shareholder activism to try to get him out of the company, but if the board did replace him at the end of his contract, he would get something like $100 million? is that true? >> well, what i can tell you is, i'm surprised when i look at his compensation what his compensation is, even with this very bad performance, if you go back to last year. i also want to point out somebody who is a runner-up here. and that is clarence otis of darden. this is a fascinating situation. and i think that with otis, today, the company said it's going to spin off its red lobster division.
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remember, they own red lobster and olive garden. these have been terrible performers. otis got a lot of credit back during the recession when darden did very well. now you have it out of the recession, it's lagging the group. you wonder if another ceo could have -- would have either spun off red lobster sooner or perhaps they wouldn't have had to spin it off at paul. >> they had to spin it off because those restaurants aren't growing, right? i do like the move because now they're putting the growth companies in one company in stock, and they're going to put sort of the slow and steady i guarantee you they'll have a dividend increase or something like that with the olive gardens and red lobsters because they'll be slower growth and we're just going to kick off cash. >> you just said something very interesting. it was dividend increase. they actually increased the dividend. as i tweeted out this morning, in talking to restaurant -- this is very interesting because you could argue they're spinning off red lobster because they've got to pay for that dividend which some people would argue they couldn't afford. moody's has not been very friendly toward this company. you've got a company with a lot of turmoil. there's been management turmoil at the top. people have been calling for
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clarence otis's head now for a number of months. and it will be interesting to see. by the way -- >> the stock hasn't done that bad. >> i don't believe -- pardon? >> the stock hasn't done that poorly. >> well, that's because if you go back and look at the point in october when bearington capital came in as an activist, that helped the stock. had they not come in there, this stock would have most likely really been pummeled. >> abercrombie & fitch, $32 stock, this was an $80 stock in 2007. i know it came off its crisis lows like everybody else, but this has just been crushed in the last five or six years. >> you know, i had even missed -- jim cramer put this on his wall of shame. typically i don't like to follow him. i didn't even know it when i started doing research on the company because it's so obvious. it's so mismanaged. it's not just a -- teen retailers themselves are difficult. remember, this is the guy who made the infamous remarks about, you know, cool kids, cool teens, we want to appeal to -- you start looking at the bad
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performance of this company going back to those comments, and i think you start seeing why this company isn't doing so well. he's out of touch. >> yeah. >> and perhaps he's 69 years old running this teen company. maybe, you know, he's the guy who does a lot of the micromanaging. who knows? no one more deserving. >> not just the cool kids comments, there were all kinds of other things that make him an increasingly controversial figure. being around for 16 years, herb, thank you very much for joining us. that was great. that was great. >> he's out of touch and we're out of time. herb & oates. up next, a trip down "street signs" memory lane. brian and i will be revisiting our 2013 predictions. the correct, the incorrect and the downright crushed it. bny mellon combines investment management & investment servicing, giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments
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and go. you can even take a full-size or above, and still pay the mid-size price. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we. go national. go like a pro. we could like to provide you with what we think are promising predictions for 2013. >> my first prediction here is i believe in 2013 apple is not going to get back to its record high stock price. i believe microsoft will continue to lose relevance and may actually cease to exist in its current form in about five years' time. i feel that chinese stocks are going to really rebound. they're going to get their house in order in terms of stimulating the economy again. i think that maybe, just maybe, we could see the big comeback for chinese stocks next year. >> those were mandy's predictions for 2013. the hair. you look flo.
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>> i could have added the prediction in 2013 my hair would slowly deflate to where it is now. let's run through these. number one, apple, that prediction was correct. >> apple was 300 a share below the price when you made the prediction. >> well, it is correct nonetheless. over the past year it's only been up about 4%. currently sitting at 546. clearly well below the 700 plus it was at its record high. >> i predict apple shares will not hit 6 trillion by next year. >> i think you might be correct on that one. okay. as for china, i am wrong on this one. >> close, though. >> you know what was happening here when i made that prediction it was shooting up at the end of last year. there was optimism building into the chinese market. it peaked out around february of this year. got absolutely slammed in june along with a lot of other emerging markets. did i mention the taper didn't help and all that kind of thing. over the past year it is down by 1.6%. >> you were close. >> 1.6% away from at least it finally breaking. >> you were close. it probably happened. you might just be a month late. >> we still have a few -- we still have a few trading days
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left in the year. >> in 2011 i said gold will drop 10%. it dropped eight. you said ten. really? i'm supposed to guess precisely? >> i'm 1.6% away from it finally cracking back into the black after a few years of losses. >> huge swing and a miss on microsoft. >> no. okay. hear me out on this one. let me finish, by the way. losing relevance. it depends on who you ask. but i did ask around. i did a little research. i personally think it is still losing relevance. for example, jon fortt says the decline of the pc is still a bigger deal than the gains microsoft is making in cloud entertainment. he believes it is losing relevance. henry says microsoft could be completely irrelevant in three to four years. gatner report says microsoft could be obsolete by 2017. this year saw the beginning of reorganization. many feel it could be breaking up. when i say five years, breaking
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up a company needs a runway. >> i don't question any of that stuff at all. we've said it for years. i said microsoft would probably be broken up two years ago. >> mm-hmm. >> you're supposed to make a prediction for one year. >> you're right. >> in five years i will have less hair, a bigger gut and my ears will probably still stick out. >> google owns the internet, facebook owns the media, what does microsoft own? >> i agree. i'll push back a little bit. it's been a pretty good year for the stock. >> stock price has done well. that was not part of the prediction. >> the prediction was for five years. in four years we'll come back. that's broad, though. >> i know. i know it was only supposed to be one year. >> you were doing double duty that day, by the way. down at "closing bell." had to race down to the new york stock exchange. clearly in a convertible to get your hair like that. >> three hours puffing it up. >> you will be right. microsoft will be three companies in five years. >> i'll guarantee it.
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>> right there with you. >> okay. let's listen -- two out of three, then. i missed on china. >> 2 1/2. 1 1/2. >> still got a week's trading left. could still be right. let's listen to brian's predictions. >> i've got a hunch that the dow will hit a record high next year. my second prediction, the best performing developed stock market in the world next year will be japan. my last prediction is a total hunch. total guess. oracle could make a bid for all or part of hewlett-packard. >> well. two out of three. >> and i got close with hp. because they made that deal with oracle. about a couple days ago. >> yeah. the agreement. according to jmp securities. >> listen. hewlett-packard. 330,000 employees. it's too big to succeed. >> mm-hmm. >> i just thought meg whitman would have to break it apart or do something. also -- listen, it was a complete whiff.
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i whiffed hp. they made a deal together. the stocks up 97%. they did a splash. not in the way i thought. that was really -- i even said it's an outlier pick. >> i'm going to give you a third of a point for that one. >> thank you, teacher. >> okay. >> dow record high. >> yes. bingo. >> i said above 14,500, 16,000. we're actually now above our inflation adjustment high from january of 2000. feel pretty good about that. obviously, you know, listen. our viewers, regular viewers for a couple years since you and i've sat down in these chairs know i've been bullish on stocks for a couple years. everybody's like, you're an idiot, whatever. stocks keep going up. thank you, ben bernanke. fed. whatever it is. i don't care. 401(k) of our viewers. they're happy. >> the third one is for you to stand up and go, yay, like this! >> i don't think i'm going to do that. listen, i said the nikkei would
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be the best performing developed market in the world. we made these predictions december 2nd, i think. it is. it's actually the best performing developed market in the world by about 15%. argentina has done better. but that's emerging. >> yes. developed. >> in fact, it actually pretty much took off right after we made our predictions. no way am i saying i had anything to do with it. but, you know, listen, you get something right like that. they say even a blind squirrel can find a nut. listen, if you thought the u.s. -- first off, also, technically the nikkei tends to hold at around 8,000. if you liked -- people said, okay. the u.s. stock market's only up because ben bernanke is printing and the whole thing is a house of cards. it will eventually come down. fine. maybe you'll be right some day. if you believe equities were pushed up here and in europe because of that then they must be pushed up in japan. as you know as somebody who speaks fluent japanese and has
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lived in japan, okay, they are going to do everything they can to weaken the yen. >> absolutely. and they have done significantly. >> they are doing money printing albeit in a slightly different way than -- it's basically bigger than ours in certain ways. if you thought our stocks rose because of that, how could you not like japan? >> good point. >> next year i think it'll continue a little bit. it's not one of my predictions for next year. after that kind of a run -- >> it's a hard run to replicate. >> i don't think i could ride the horse that long. secretariat will get tired. >> as we learned with multiple rounds of qe there's a lure of diminishing returns. >> i appreciate the kudos about japan. i'm more proud of three years ago saying gold was going to fall. nobody else was at the time. and i just thought central banks would stop buying it as currencies became more stabilized. all part of the -- >> i'm not going to, like, be a spoiler and steal your thunder for tomorrow, but i'm going to guess there will be a gold prediction in there for next year. >> you know, there is a gold prediction. i've been killing gold for three years. right? by the way, i think this is an important thing we have to say because the show is over.
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we don't own any -- we own our comcast 401(k). nbcuniversal 401(k) plan. that's it. we're not trading on any of this stuff. just for fun. >> tomorrow, indeed, we'll bring those predictions for next year to you. what will 2014 look like? find out tomorrow right here on "street signs." >> thank you for watching, everybody. and welcome to the "closing bell." i'm kelly evans at the new york stock exchange where stocks not really giveling back the huge gains we saw yesterday, bill. one of the strongest rallies of the year. >> it was huge. i'm bill griffith. we are the day after the fed announced tapering will begin in january. unlike expectations where everybody thought once they start announcing tapering, the market would sell off, a huge rally. almost 300 point gain on the dow yesterday putting us in record territory. any positive close for the dow or the s&p today will be another new all-time
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