tv Fast Money CNBC January 2, 2014 5:00pm-6:01pm EST
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here. happy new year. "fast money" is coming up. i think you guys have got weather plays? >> we have the ceo of two companies that might actually benefit from the storm. a top performer up 57%, maker of generators and also compass minerals which sells the ice to highways and businesses. >> i think we should go long chocolate makers, too, just from personal experience. >> that's what you do on a snow day? >> absolutely. a little nestle. >> we'll trade it. "fast money" starts right now. here is tonight's line-up. apple starting the year off in the red. but we have got an analyst who says the stock is still a buy. and it's not all bad news. gold starts the year off shining bright as metal shows new signs of life. will it last? we have got the two ceos of two companies who might be pretty happy. our traders tonight are tim
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seymour josh brown and guy adoni. it is tech stocks and small caps that led the way here. the first day we had a down day the first time since 2008. >> i'm not going to get crazy here. the faster, in my opinion, we trade down to to me it is a constructive day. so i think today's a good first step towards what i think will be an important correction to the downside. correction in my world is 1760 is where we bounce from. >> josh brown? glass half full? >> yeah. i have been that way for a couple of years. i'd love to say i don't think
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people's attitudes towards the equity markets are going to change. the important thing is last year is the first year in half a decade where you had positive fund flows on the equity side. and animal spirits are starting to cake over almost anywhere you look. once they get going they don't stop on a dime. these things take a long time to run their course. for that reason i think you could remain positive and it's actually great if guy is right and we get a pull back. what a wonderful set up that would be. >> we haven't seen the 200 moving day average in the s&p. that has not happened in -- i think a lot of people are in a place where one, people are attributing some of this to the tax selling. they were actually buying some of those today but people were selling to lock in some long term capital gains. nothing changed overnight.
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what happened in the ism says u.s. manufacturing is relatively near multiyear highs. in germany and italy in all places which are actually better. the world on the ma crow, nothing changed. >> you would have thought that today would have been an up day. >> look at what the marks did. you had a -- the s&p that was down, you had oil which was down which in a good economic environment should be up. and you had yields actually came down. and if you look at the sub components, the employment part of that, it suggested that non-farm payrolls is probably going to be a lot better than what people are expecting. so today's the day you can't read much into. >> some. >> you had insensitive sectors.
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there is a lot of weird action. >> one of his big charts was the january chart talking about the first five days of january. >> very good memory. 76% of the time that january is positive and if january's positive, the year is positive 82% of the time. >> she gave you -- >> here is the problem with that. nobody tells you when you're in the other 20%. >> thanks, mel. >> yep. >> appreciate it. >> let's talk about apple. it kicked off the new year today. they are actually pretty positive in terms of the catalyst they outline. but they say that a lot of the upside is already priced into the stock. it's fully valued.
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>> so on dez 23 we closed at 570. incremental additive is 3 to 4% in the next year or two. i think all the things that are refreshed, we're about to talk about this, this is the stuff that you really need to get behind fundamentally. >> i think that's the story. it had a decent run from the lows here. it's going to have to hang out here for a bit and just die jest the news. i wouldn't panic. >> let's bring in brian marshall. he's got a strong buy rating on the stock. happy new year to you. >> you as well. what do you think is valued in the stock and what could provide the upside? >> it's going to be a big deal. for a long time, apple has been
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decelerating. we're going to grow faster on the top line versus what we did in 2013. and importantly, eps declined this year. we're actually going to grow above double digits on the bottom line. so the growth is slowly starting to come back. you know, we mentioned china mobile. that's not in my numbers. that's a big opportunity. it could be more than the low single digits. i think that's a big deal. >> what do you make of the argument that the power is going to rest with the carriers this year? for the first time in a while and apple's not going to be as profitable on iphone 6 and whatever is to come as a result of new deals like that? >> there is no question that that's going to happen. apple is almost going to ship 200 million units next year. that's all at the high end. so there is so much more at the low end and they are almost
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tapped out. growing 15%, smart phones for apple. clearly there is pressure down here. the guys are no fools. they have strurtured these carriers for a water fall effect. i think it will be a slow decline but clearly they are going down not up over time. >> so the revenue gains are not going to be offset for decreasing margins because i think that's the real fear. >> we forecast flattish margins. apple obviously has done a zbood job. learning from their mistakes and trying to factor that into new product ramps going forward. i think they're going to be just fine with the margins going forward. they were con sirvetive on some accounting going forward. so i actually think that 37 is a
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good number for next year. >> how do you get around the multiple compression in the stock relative to the s&p. this is stock that seems to be languishing 9.5 times or something like that. so this is a place that a lot of people are scratching their heads saying this is why this is a value trap. >> that's the biggest problem. how do you change investor mind set with respect to the multiple? very difficult to do. i think samsung is in the same area. we could see maybe a turn or two but it's not going to go to market multiple 15 times tlchl is companies in technology that are still growing. that's where investors really want to go. large cap tech they are gravitating around ten times forward. >> so that's the new norm? >> unfortunately i think that's where we're -- for a large mature company that's longer
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term growth, it is pretty anemic, that's the right multiple. >> ces is coming up next week. what stock would you watch closely? >> ultimately, ces is about consumer devices. dell is obviously a private company. at the end of the day i think what we're going to see is more services be announced at this ces. 150,000 people come to this conference. interestingly enough we will see keynotes from the ceo of yahoo! and twitter. we're seeing more service type utilities as opposed to new hardware devices. we will see 3d and 4 k. at the end of the day, nothing really interesting. >> brian marshall, all right, what -- big cap technology, to say the new norm is ten times? that's an adjustment here. >> i think there are new
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technology stocks that people are willing to pay 20 and 30 times because they have the growth and the margins and there is not a ton of competition. >> like? >> we just mentioned 3d printing. next week they will be at ces. ddd will have their new consumer pruks out and i think it will ste steal the show. that's what i would be thinking about if i were a high growth investor, not smart phones. >> two offsetting trades. rally and ibm is giving an opportunity. i think the move down in cisco, it didn't bounce where i thought it would. sort of interesting going into their next quarter. >> en hit the floor, brazilian stocks hit their lowest level in nearly two weeks.
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i want to go to you first because you shorted brazil. >> that was really one of the only things we did. they have got a real problem with their economy. we saw this happen when we had the qe or the taper scare back in the spring. not only that they have inflation issues. it's just a mess. their current account. that's a place that you want to be short. it started off the day down about 1%. i think it goes lower. i know tim's going to talk about korea. >> that was ugly with two plus%. >> it was ugly with samsung and similar with apple. saying we need to be more innovative. but, you know, etc. samsung is 25% of the index in korea. korea suffering significantly. so, japan, which is stealing the
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cheap exporting route from korea. suffers more from this than anybody. hyundai, kia, emerging quickly, ultimately you have a place where you look at the eem, 40 bucks is the level. you get into a place, i would not stay married to this because of the currencies. >> i think em should absolutely be on your radar. if you look at the valuations here, typically adjusted pe on the entire emerging market index is ten. >> that's three years that it's been doing that. >> but at a certain point, that's where the big money is made. >> all right. got to move on. winter storm warnings stretching as the storm starts to beat
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down. it might be bad news for you, it is good news for some companies out there. we're talking to ceo of generator and rock salt company. stay tuned. she keeps you on your toes. you wouldn't have it any other way. 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 medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives,
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>> let's get to our call of the day. shares are up after citi upgraded to 19 bucks from $16. you have been pounding the table on this one for quite some time? >> yes. this is an overweight for us. we bought it in the middle of the fall. bank of america is up about 16% versus the bank index which is only up about 8. today was really an important event. it was a huge gap enroll massive green candle. there really was no resistance for this name and i wouldn't be shocked to see this at 19 or $20 in relatively short order. volume on today's break out was massive. and keep in mind, this thing did not split like citi group did. this is really just retracing
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years and years and years going back from the events of 2007 to 2009. >> when you highlight a massive green candle, how much bigger is it than -- i pulled up the chart, too, and it looked like another green kandle in november. why is this so significant? >> which was also a bullish event. >> it was. >> what that is is a confirmation of the existing trend. it's not a trend reversal because it's going in the direction. this thing has been breaking out since november of 2011. when you have major events like this it tells you that the buyers are ready to pay a new level and they are ready in large numbers. basically tells you. if you're a bull in the stock and long the name, you don't want to see it drip again tomorrow. you want to see it that's the way it looks for me.
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>> a massive winter storm is set to impact manies. thousands of flights have already been cancelled or delayed. generac is the world's largest provider of red desidential generators. aaron, great to have you on the show. >> thanks for having me. >> you raised your full year estimates but the forecast excluded major outage events. what does an average event add, potentially to sales? >> you know, we have called that out in the past. generally when you get some type of a large typical outage event, an ice storm or something like that, i wouldn't say it's on the order of a sandy, that can be a 10 to $20 million type of impact to us. as we have gotten bigger and
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broadened our companies, it is less of a significant impact to us financially. >> i see. there are some estimates saying 20 to $50 million could be added in revenues because of an average outage and that would be approximately 14% of last quarter's sales? . >> you know, it depends on the size of the storm and where it hits. if you hit in a populous area, that is probably a fair number for the type of metro numbers that we're talking about where this storm is centered. that's going to be something more. >> i want to talk about the home standby generator market since a lot of viewers are out there and maybe have a generator or thinking of getting one. about 53% more than half of
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sales. i'm just kaurs. they seem to be a better margin. it's a more favorable product mix. >> the trend has been fantastic. it's a pretty new market, still. only about 3 prs of homes have the product today. i don't know how many companies are out there that say 97% of all the houses are still a potential buyer. we think it's a penetration story. there's a lot of people that don't understand the category yet. it's fully automatic and permanently installed in your home. it protects not only your home but your family. >> if it's a penetration story and 3% of homes have it, what are your targets for the end of this year?
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>> it grows very slowly. right? >> with we really like the math on it. what people forget is the scale and size of the country. it's single family unattached housing stock. so that really represents 50 million homes. every 1% would be about 500,000 more homes. we think in the next few years if we can approach something closer to 5%, we think we would be on the right path there for the trend. >> aaron, thanks a lot for your time. appreciate it. >> great. thanks melissa. >> brian kelly, you have been in this trade. >> if you have a house that's worth 100 grand, nobody is going to spend 20 grand on a generator.
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i don't know if the market is that big. this stock has been a monster. love the stock. even up at these prices. i still think it has room to run. >> the majority of stocks fell today, twit ehren joyed the day in the green. as it gets ready to unveil a solar powered car. will it be a game changer for the auto industry? so ally bank a raise your rate cd that won't trap me in a rate. that's correct. cause i'm really nervous about getting trapped.
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now listen to me, duck. i have an associate that met with, uh, an unfortunate accident. while he's been incapacitated, somebody's been paying him cash. now, is this your doing? aflac? now, if i met with some such accident, would aflac pay me? ♪ nice. this is your stop. [ male announcer ] find out what aflac can do for you and your family... aflac? [ male announcer ] ...at aflac.com. >> a train carrying crude oil in north dakota north dakota. crude oil from one region may be
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more flammable than other crude. is there a trade here? >> you know? you can look at something like a railcar america. they make all the pieces and parts and have the transportation secretary talk about how you need to have maybe a double hull tanker. he bought a unit from phillips that actually speeds up the movement of petroleum through a pipeline. if you notice, some of the refining stocks, so, maybe there is something there, maybe not. >> you want to get to an opportunity, look at this relative to the entire sector. as much as i love kansas city southern, this is a pretty good pair trade. get long csx.
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get short ksu. >> gold starting 2014 off with a bang. >> i didn't think it would happen in the first 24 hours. i am so short gold. i do think that gold is going to benefit from an increase in inflation or the expectation of that encrease. >> you thought gold was going to stay mid year. >> give me the biggest market cap. it it still remains one of the most discounted gold companies relative to its size and peers. the gold miners are going to be a major trade when we think gold has bottomed. i think gold is going to 1100. >> let's talk twitter.
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setting higher online video ad estimates. >> kudos to bk who said the dip in twitter, this was the buying opportunity and off to the races ever since. what does that mean? topped out a few days ago. traded down to 58.5 or so. today is effectively a 50% correction of those couple of days. i think if you are in it, you have taken some off the table here because it's not a fundament al trade, it's a technical trade. >> did you buy it the day you said you were looking at it? >> i wish i had. but, around 60 bucks is about where i said that's where you got to get into it. if you were into it and you followed my advice, unlike guy, i would take off at least half of it. >> next up, planning to unveil a
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solar powered concept car. and fiat striking a deal to gain full control of chrysler. >> when you look at what would be the ultimate deal, few expected. >> why is this critical for fiat? first of all the stake at 3.65 billion, they are paying for this with cash from chrysler and fiat. they are not taking on additional debt. and he wants chrysler's fash flow for expansion. what expansion? they are not a player when it comes to luxury autos in europe and in north america. a little bit. a niche player. they want to ramp that up and be more competitive. look for it to go on sale.
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fiat shares today, the strongest one day games for this stock since april which is one they will go. this is really more interesting than anything else. we're not going to see that any time soon. now cmax will collect solar power from a can pi above the solar rayors panels on top of the car. they then concentrate those rays and put them into the car and in theory, this car will be able to drive itself around and recharge without having to be plugged in. weight and practicality is the bottom line. we will not see this any time soon. but when they show it next week they will get a lot of attention because a lot of people are saying wouldn't it be great if we could have a car that is completely powered by the sun.
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>> no thank you. maybe comes with a flux capacitor as well. >> this announcement that they're not going to the capital markets is huge capital. you could buy it on new york, too. in is 11 or $12 million traded today. very much an eastern european player. they're going to do an ipo at some point, too. >> 2014 already up in smoke. marijuana legal in colorado for recreational use. plus, as the winter weather rolls in, one company may be cashing in. that's next on fast. [ telephone rings ] [ shirley ] edward jones.
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site in time square. a mammoth winter storm sweeping across the country and showing no signs of slowing down. let's go to sarah for the latest. >> reporter: the snowstorm expected to get started around 6:00 p.m. we will see about ten inches of snow overnight and freezie inii tempts. officials caution anyone who does not have to be on the roads to stay inside. stock your home with the essentials, a flashlight, extra food and extra water. we have seen people going to the store today doing just that. we're seeing big travel disruptions.
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we are told some passengers are going to have to stay there overnight. back to you. >> compass minerals is one of the world's largest deicing mineral providers. a lot of people think of salt for the ice and they think of all the highway spreaders getting out there, but actually the bids for this storm season have already closed is that correct? >> that's true for the de-icing business for road salt. our bids are normally priced through the summer months and we are busy delivering that salt through the winter season. >> so highway salt is about 51% of your sales. i'm just curious if the storm season picks up and the weather gets worse for this season could that help pricing for the next season? >> it definitely will. we have come off of two below
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normal seasons in the past two years and our pricing has been down slightly. typically the market averages about two to three percent price increases over time. we're openful as inventory is taking out of the system that we will get back to a more normal price increase for the year. >> what are your internal forecasters seeing for the rest of it. >> it's been a very different season. probably slightly ahead of normal. it's difficult to predict the weather ahead. it really stretches from minneapolis to upstate new york from nashville up unto ontario and montreal.
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we hope they continue for our business. at the same type we are there to keep the roads safe for consumers and we're running flat out to do that right now. >> in fact in the latest quarter you reported a 16% increase in salt sales but it's the potash business, what are you seeing there in terms of sales improvements going forward? >> we had a slower third quarter on fertilizer sales, we think that was more timing. our pricing guidance didn't call for a decrease in pricing like there has been, more commodity potash markets. our farmers, tree and nut farmers, the economics of those crops have been strong. and we're busy producing
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fertilizer for their application needs. >> great to speak with you. thank you. all right. compass is is a stock for the past 12 months up 3.6%. >> bounced off the $70 level. i think you asked the exact right question. the pricing was a little bit better. if you see any pick up whatsoever in terms of demand, i think that gets your stock north of 90 bucks gep. i think risk reward, for getting on the whole deicing thing. >> i didn't think -- >> whatever you can do, when ever you can sneak them in. >> almonds, the tree nuts. >> talking about them now.
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>> first trading session of the years. dry ships. >> this was one of my best trades of 2013 and i said stay in in 2014 and hopefully you said -- that was tuesday night. because of an atm. this is what weighs on this stock even though shipping rates are going higher. i stay in the name. >> herbalife. >> the same analyst who nailed it last year is saying it's going to repeat again this year. the china business is exploding could be their number one market a year from now above the u.s. the shorts are still getting squeezed. >> big pop for molly. up 12%. >> this was upgraded by davidson
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today. up about 6 or 7%. got on tv here and said there is a lot of option activity on here and then the thing really took off. i'm not in it now and i don't anticipate it. >> a pop here. >> upgraded key bank. we had it right earlier this year. >> patron s of walmart may have to look elsewhere for their donkey meat. tests revealed that the product contained dna from other animals including foxes. >> come on. >> it is considered a regional delicacy in parts of china. >> wow. >> so in china, the fox says heehau. >> but it is considered a
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recreational use for the first time ever. it became legal there yesterday. we are following this development as it relates to the e-cigarette craze. this has to do with the fda? >> well, what's going on with the fda is very separate from what's going on with colorado. what we're focused on is the vaporizer device. that device in itself can be a significant risk to the branded e-cigarette companies. you can buy that device, walk into a store plus in colorado you have recreational marijuana and you can literally buy your own flavor, inject as much nicotine as you want or whatever else and get it at a cheaper price than the branded player. >> when you said whatever other flavor in colorado, you can use this to smoke weed?
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>> folks have used this -- >> we do it in new york. >> i don't know this. >> it is laced with thc. i don't really know that much about it. so, why -- wait. what's the bull case for -- >> they're just going to cannibalize their own product. you have got to expect margins -- i don't even know what margins are for the category. but you have to expect that it gets more competitive. why would we be more bullish on traditional cigarette companies? >> our call has nothing to do with the cigarettes. our call is about the core business. they're going to have 8% revenue growth next year. we only have 20% growth modelled in. if regulation doesn't incouple ber this category, if the
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vaporizer trend doesn't get out of control. >> what about the menthol regulation? >> it has been a big overhang. >> and for full disclosure, i agree with you. >> our history with tobacco for the last seven or eight years is these stocks can work with overhangs as long as the fundamentals are good. >> what is your top pick? >> i cover three sectors. tobacco it's lor rah lard and household care it's energizer. >> nick mode. you're long but for other reasons, not the e-cig. >> i like the growth prospects. there will be consolidation. that's not -- bidders are bidding against telecom stocks. >> that's right. specifically wireless.
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on the day when a take was pretty ugly. we saw 11 times the average daily put volume. we saw one and a half times the average daily put volume, leading at the back of the pack with put volume. but all of these big put volume s. sprint down over 3%. >> it's been in the news. the fact that we saw -- the most fascinating is the big guy of the april 18 strike put. in the money. so these are absolute pure protection. that means that they are expecting to be below 1535.
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>> check out the website, optionsactions.cnbc.com. >> coming up next on "mad money," what will the rest of the year hold? cramer is laying out the winners and losers and picking out one of his favorites for 2014. up next, you tweet it we trade it. welcome bahow is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.
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next is information and entertainment in ways you never thought possible. welcome to what's next. comcastnbcuniversal. >> take a look, live shot of times square, where the nasdaq market site is. it has not started snowing yet. although we're on watch. >> i don't have my -- my lace up gucci -- >> boots or -- >> beneath. i will tweet out what i shovel snow in. >> shorts and rubber duck boots. >> that's right. >> let's get to our tweets for our crew today. >> i mention ge yesterday. i do think you can stay in this part of the world. i'm a very big buyer of airlines, still.
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>> is pot belly a buy at current levels? >> josh bron. >> i like this stock. i like this stock in the very long term. they don't have a lot of stores. same store sales say solid for a while. immediately got a high flier valuation. this is the kind of stock you might get. for no reason. >> will you personally step in to be sure that sales won't suffer? >> bk, how about potash? >> how about no. it's going nowhere. ag in general has not done very well at all.
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then i get a lot more interested. if i had to be forced into the ag space, i will be on deer. >> how would you trade mastercard for the year? >> the stock opened on the lows. closed on the i-s. i don't think you would get another year like that. close to 30 times forward earnings. i like it. >> anybody else in the payment trade? visa? >> i own visa. 3.5 years. i think it's only going to 250. >> buynary. >> that's a great risk reward. i like it.
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>> you guys all laugh. >> excuse me. this is actually getting exposure to eastern europe. >> it is hot. >> is it? >> tell the folks out there. >> go get the great one. >> on any day, be careful. be careful when you drive. >> i hope it's a snow day. are we going to be snowed out? >> no. we will have a show tomorrow. we have your first move tomorrow when we come back. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading.
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hewlett packard, and disney both started in garages. mattel started in a garage. ♪ the ramones started in a garage. my point? you never know what kind of greatness can come out of an american garage. introducing the 2014 motor trend car of the year. the all new cadillac cts. ain't garages great? >> it is time for the final trade for the first session of the year. tim? >> the trade is definitely a trade. this is where you can buy this thing, 40, 39, 50 is your stock. then you sell it. >> the euro really looked like it cracked today. i'm short the euro. >> i really like the idea of a miners come back.
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high dividend. i think this one rolls higher. >> guy? >> josh clearly watched last week's show. crocs. good price action there. >> thanks for watching. we i'm melissa lee. see you tomorrow at 5:00. "mad money" starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you some money. my job is not just to entertain you but to educate you so call me at 1-800-743-cnbc. it's obvious that we have a bad year coming, right? isn't that what the stats say when you start off a
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