topic on "fast money" in a few moments with melissa lee. >> with y-2k, a lot of people are fretting they missed out on this market run. we have answers, stocks that have underperformed this market rally and are due for a little bit of catch up. >> all right. over to you guys. >> all right. thanks a lot. "fast money" starts right now. live from the fax markets in new york city time's square, as the record breaking day for the s&p 5 luchl. our traders are tim seymour, dan fa tan, guy adami. march 2,000 have been about monster beverage, celgene, apple, gilead. so is that growth trade the way to keep playing the market? it was interesting today on the march to this new closing record high, we saw the russell outperforming the broader indies

ses tim. >> i don't think you can cherry pick it. if you want to look at the market now at s&p 2,000. look at the sectors playing at a discount. where were we at s&p 1,000, it's technology, it's trading about is.3 times to where it was. energy, it's trading cheap. the s&p in general 14 times federal government year's earnings is not expensive here. everyone is freaking out. i don't think stocks are expensive here i think people need to relax a little bit. >> we've also had record buybacks here. look at the way they've managed the earnings. >> it's healthy balance sheets. >> it does. they cut costs down to the bones. >> which is why technology -- >> it's getting better. but the point being isitative cut costs. we still have, cisco is embarking on another 6,000 job cuts. it's a third round of restructuring. >> there is a lot of competition in that space. >> i understand. the point you are making is

these companies are buying stock hands over fist. earnings growth was 7.5% in q2. it would not be what it was the way they have been. >> our stocks are going higher. >> they are. so you think we're going, we're going to sling shot up another 10% here. i'm saying the rich reward from here on out. buying the stocks you are talking about at these valuations the list of the names. >> hold on. so in terms of where do we do from here? >> i think if you look at where the s&p is on a valuation basis, at the end of the 2014 is trading near 2,100, absolutely. it's 5% from here. in absolute terms, it's 100 points. when s&p was at a thousand, 100% move. it's not that big a deal. when you look at where valuations are, it's not that big to ask. >> they are about the same if 2007 on the market peak than the s&p 500. that argument is out the window. should we, why?

>> because, it depends on how you look at rawation. >> on a pe basis. >> on a pe basis. >> they're going to fold. >> let's look at warren buffet's favorite indicator, which is market cap, total market cap to gdps. we're at highs we've only seen if 2000 and 2007. so the market is at least fully valued. really what it comes down to, i think this is what dan was getting at. it comes down to interest rates. as long as interest rates stay low, the sparkt can go on for as long as they can engineer, as long as there is mergers and acquisitions, that's fine. nobody cares about 2,000. >> guy, you believe interest rates will remain low? >> epic. >> lower longer. >> i think the russell the iwm, tim my talked about that. i think it's imperative it gets above that 121 level. it double topped at those levels. i thought it would trade at 128. it didn't. it got down to 1 so and change.

you need it to get above 121. not sure that will happen. the crash in '07-'07, the market was reasonably fair. i'm not saying it will have another outcome like that. that's not the reason is stockmarket sold off. there were other things that we haven't seen yet. >> getting back to growth leading this market higher, do you believe we will see this will continue in the markets. over the past month, ibb, russell outperformed the s&p 500. >> one of those ten names are biotech fames. i think you absolutely see continued growth in that space. are you going to see the tame i same ability of growth? probably not. celgene, gilead, biogene, regeneron, all great names still despite the move they had. >> hot ipo mobileeye getting a boost today. it comes after a few banks have positive ratings. we followed it earlier today.

a buy rating at a $48 price target was stuck on it. eli, thank you for being with us. >> thank you for having me. >> you have an forecast of 67%. you say there could be upside. analysts are so bullish. what would that upside be to a 67% forecast? >> so, mainly, the 67% forecast essentially assumes that actor safely will perform the same way we seen seatbelts, airbags and electronic stability control in the past. we seen this penetration in the past. where we think we are being conservative, we are not assuming any close margin expansion out there, even though the company's next generation of products will be of higher asp and pricing as safety into autonomous capability t. you a on the pus market is two to three times with higher margins. we think the upside there. our 2025 revenue over 3 billion

is over consensus, it's over the market of $15 billion plus. >> you believe there is actually a market that most other analysts are not addressing. >> that would be sort of the ret to fitting the existing vehicles out there that would need these updated safety features? >> mobileeye is a leader there as well. we are intrigued with the idea of combining heads up displays with after market camera devices, particularly, mobileilaunching the next generation chip in the after market, itself. so we look at the personal first halfgation device market out there. relative to what we are assuming for 2025. the pain story with mobileeye if still on the oep side. the after market shouldn't be ignored either. >> you mentioned very briefly margin compression or price pressure. where would that price pressure come from? i mean, it seems clear in your note you believe possiblyeye is the dominant player and will continue to be. though it does compete against the global supply in the same

area. where does that price pressure come from? do you think you were discounting the idea just as possiblyeye, it's not a fly by fight company. it has been around a very long time. there are a lot of other companies including the auto industry developing technologies that would, fact, compete with mobileeye technology. >> absolutely. it's a good point t. key is that their technology is the low cost solution even though they have high margin, what they eeshlly did, they disrupted the after safety market by allowing for and developing sophisticatedal go rightle bs and self design hardware to do capabilities for minocular camera sensors, radar and stereo cameras. i think they're being paid for their value add. we have flat to slightly down pricing. structurally, they face far, far different pricing, meaning better pricing than a lot of the other typical auto companies because of the value add. it's always important to note the reason they are successful is because they went with a lower cost, lower weighing more

exact device than the mono camera and developed algorithms that were able to do the algorithms better tan their competing sensors. 'years ago, they didn't they they would be able to do what mobile issy brought them to. that's occurred literally in the last couple years. when you look a the positioning in the next q chip launching next year and autonomous driving. it looks like that dominant position is expanding from active safety to autonomous mobility. >> thank you, we appreciate it. initiating on mobileeye along with a lot of other analysts out there. what do you make of it? >> it's a cool story. it trade 80 times something ridiculous like that. i think it's a great story. you can make an architect it will be commodity adverticomoot. you have to ask yourself, is this a stock -- >> why not? google had the self driving car.

why can't they comb into the space, give it to every single automobile dealer they can collect the data from it. it seems to me, if it's that popular, why wouldn't google interthat space? >> they're all fusion vision radar and they have things to encroach upon. we talked about growth. this is a kane that will double revenues in the next couple years. that's a pretty exciting case. this is a case where people throw the valuation out the window, tis larks they're not talking auto production at least that's the thing i would focus on. >> what's the bear on this? >> that's the key, tesla went to 32 billion now. it could be this could double as the revenues double. i would not step in front of this on the short side. you have to have conviction. this has to fall into the speculative big of your portfolio where you do it in a size it's okay 10, 20%, it can and probably will. >> if you feel you missed out on

the rally s&p 2,000 don't worry, our traders will reveal their picks for cap up trade coming up next. plus american airlines ditches orbit. will other airlines follow suit? that's coming up next on "fast." there's no reason we can't manufacture in the united states. here at timbuk2, we make more than 70,000 custom bags a year, right here in san francisco. we knew we needed to grow internationally, we also knew that it was much more complicated to deal with. i can't imagine having executed what we've executed without having citi side by side with us. their global expertise was critical to our international expansion into asia, into europe and into canada. so today, a customer can walk into our store in singapore, will design a custom bag and that customer will have that american made bag within a few days in singapore. citi has helped us expand our manufacturing facility;

the company has doubled in size since 2007. if it can be done here in san francisco, it can be done anywhere in america.

. an earnings alert with morgan brennan on smith and wesson getting crushed in the after hour session. >> the gun maker beat by a penny on earnings. it's sales were below expectation on a weaker demand for guns. the company issued tlirk and four-year results below forecast. sith & wesson currently trading down 12% in the after hours. >> thanks a lot. it sounds like an inventory issue. they built up an inventory after a previous surge in sales. >> these stocks definitely got ahead of themselves. this has come down from what 17 or so. it's a bit priced in here. the place i would go is a cabela's. if there is not a demand, that's what they sell. with dick's and golf, they had a tough quarter. >> shares of amway, on news they will have long guidance, pat, thanks a lot for taking a little time out of the am-world to join

us. we appreciate it. >> thank you very much. melissa, great to be with you. >> it was the guidance, a lot of analysts say sixteen 15 were if lipe t. giants was 16 and 17 what was disappointing. at the same time you addressed it to about $60 billion by 17 and you have announced a lot of products. the addressable market is bigger. you got few products. yettial you are taking down guidance for '16 and '17. what is going on here? >> we didn't create guidance. we set a framework for about 15. we heard from a number of analysts, that wasn't consistent with how at companies have been providing guidance before. so following many of the analysts feedback, we said we will follow best practices and not give that two, three-year out kind of perspective. you know, that was a little of a mixed message to the analysts. most of them said it was a the right decision for us to follow. >> that is true. in terms of it being lower tan what analysts were expecting for 16 and 17, can you address that

and what is going on behind that? >> yeah, we didn't give guidance for 16 and 17 as a result. we left that opened. we will get to that as the business progresses and we get to those respective years to give specific gains for that year. >> i want to talk about the specific products you are introducing at the am-world, you have a tool that manages data centers. is a software that uses quote/unquote containers. both are seen as traditionally alternatives to the am-ware. companies can use these alternatives in order to cut down tear bills and stop paying you as much money. is this essentially acknowledging that these are emerging competitive threats that you've got to address? >> what we heard from customers is they wanted more choice and in open stack, the opportunity to use some new capability bus have the breast of brooed in the am-ware tech following. the containers is a new toke e technology. we are working with the leaders leak our announcement with

google, a doctor to krad that to the vm ware stack so we give our customers more choice. and it it developer can say the best possible way to take advantage of some of those new developer tools is using the best of breed secure and manage vm ware infrastructure. so it's the best of both. we call it the power of and, new tools and the best infrastructure coming together to expand our growth opportunity. >> i got to ask you about water going on with elliot. since the last time we spoke, elliot announced a one billion strak i stake. emc, elliot is the fifth largest shareholder, the chairman and ceo actually addressed this issue and he said that he'd be willing to meet with the folks at elliot as he does with large shareholders periodically. he said the emc federation is very important. vm ware being a part of it. do you know this meeting has taken place? are you invited to take part in

that federation of kansas that tucci says is so important? >> yeah, i believe that meeting has occurred. em: has met with elliot. i didn't participate if it. i have gone on record saying we believe the federation model is clearly the best one for vm ware and the federated company. we sea value and the financial and structural models right in our reach right into the market with customers an even this week at vm world, we announced products and capabilities we have done jointly with emc. we are comfortable this is right for today and into the future. >> the bottom line is you would be against emc spinning off the vm ware? >> we believe we are on the right course with the structure we have today. we see value every day from our examiners, our shareholders and our authority. >> great to speak with you. thank you for your time. >> since 2011, if you woke up january, 2011, bought vm ware, guess what, are you flat.

it's basically the same price. it's vacillated $14u6789 bucks. the s&p has probably gown a thousand points over that time. there is disconnect for the shareholders. the stock versus not moved effectively in the last 3.5 years. >> it's interesting joe tucci is supposed to retire, the window of opportunity to push forward some sort of change that could by a yettive acretive to shareh. >> they reasserted what you called with the stack. ultimately, have a lot of new products and this is early stage. what guy is say, we're all saying, this is a future tral. it's a hold. the cart doesn't look -- the free cash flow is kind of where they should be trading. this company is not giving you long-term guidance and you don't even know. >> one other place i would look in this is microsoft where they have been making inroads in this. so to trade it. i would wait for a 48 of 45

first half before i got into it and use 45 for your stop. so you got a real nice risk reward there to get into microsoft. >> coming up next, american airlines and usairways saying they will stop listing fares on travel web sites. what it might mean for priceline next. next, our traders layout the stocks that still have room to run later on. .

. welcome back to "fast money" i'm morgan brennan.

kleiner perkins is investing in snapchat worth $20 million. i values snapchat at forly $10 billion. snapchat is raise agnew round of funding. it is disclosing for the first time it's monthly active users saying about 100 million users. keep in mind they reportedly rejected a $3 billion offer from facebook late laughter year. so this valuation is something to take note of, back to you. >> thank you, morgan, $10 billion valuation. >> one of the great entrepreneurs of our time is the owner of dallas mavericks, mark cuban. he created cyber dust. he's sitting watching this show right now thinking he's on to something. we should have him on to talk about snapchat but cyber dust. >> best buy posting better tan

expected second quarter profits helped by cost cuts. the big box retailer warns it expects consumer electronics to remain weak. traffic at brick and mortar stores continue to decline as consumers choose to research and buy online. surprise, surprise, tim. >> so we sat at the desk and talked about possibly how the apple 6 was going to be good for best buy. we watched the stock go down 67%. this is a company at one point if time is one of the cheapest hard wear retailers out there. i want to on it. there is a lot of callous in the second half of the year. >> is there a reason? they've had this problem for years. we thought a store within a store would solve it. for me it's why? >> this is not a company with proven miles, it's in transition. they're improving the bottom line. they've absolutely transformed their business to be competitive

on the cost basis. they no longer have guy adami sitting on a couch in best buy and watching and ordering on amazon. he was a big problem for these guys. >> i think 11 times one time, 29 bucks you have good support technically. this is not a stock i will fall in love with. >> why do they take down guidance? why do they think sales will be soft the next two quarters? if they're a catalyst the holidays, did not materialize. >> holiday season purely on a calendar season, they have better comps year over year. also the consumer, we know it's going on in the space. to me, few want to belittle this company, you should be going after every hard lean retailer that has the same consumer issues. >> do you think tim will be sorry? it may backfire later on? >> think circuit city. listen, you may have a trade back to the low 30s, something like that. like he said, he's not going to fall in love with it. these guys, it's going to zero it's just a matter of time.

>> whatever prediction. >> i think tim it was 2013, it went to 40. that's while everybody bought a bed at circuits city. with your stock being basically between 40 or 50 cents. i think it's interesting. >> next up orbit, a tough day after american airlines announced it is pulling its shares from the website effective immediately. a message that reads, you won't find fares at orbits, the reason behind this move, booking peas. >> winners and losers in this space. we tried to point this out many times on the show, winners, orbits. >> that last quarter auto of pcln was outstanding, a lot of analysts back on board if terms of the stock. a lot of the guys and gals with $1,500 price target. winners, losers, priceline is a winner. you saw it, it didn't move. >> i think it comes down to what does orbits provide for that? look at trip adviser the last three or four day, it has been on a monster run. you get something. the consumer gets something.

so that i think you stay away from orbits. you go to something with a value add to it. >> time for pops and drops, big movers, a pipe for isis pharmaceuticals up 11%, guy, it was your final trade? >> yes, it was. the space is very interesting, the noon news, isis is in the middle of it. too es are short interests that sell off earlier in the month surprised me. i think this is a stock thatps to go a lot hard from here. >> ds wu up 9%. dan. >> it's still down 25% for the previous highs. the put space is doing pretty well. >> put space. >> you is saw foot locker. >> the foot space. >> we are going into the foot space 200 million bucks. for the. this stock is obviously a bit of a short squeeze here. i think you see it move back to the mid-30s on the continuation of isuza. >> we will have a drop for trina

solar. >> they are in the solar space, they missed on revenues almost by 10% even though these their 14 cents earnings is a good number. some pressure here. >> drop for sanderson farms down 6%. >> here we go with the meat space, most particularly the poultry space, lower hat trarksdz smaller breasts on the chicken. >> that didn't work out for them. i think you get out of them. >> you love pig feet, don't you? >> what. >> pig foot. >> i don't dine on that. >> what's the word you say that. >> i am chinese. >> it's pig's feet. chicken feet are also a delicacy. >> i prefer the pig belly. >> anyway, coming up, the rally if long-term treasury prices, should you buy or move or steer clear? tim says for the, guy says yes, it is a street fight headed your way. the inside scoop on why burger king pay be overpaying for it's java and donuts later on. spary tdd#: 1-800-345-2550 can take you in many directions.

tdd#: 1-800-345-2550 you read this. watch that. .

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you coming up. find out why burger king was willing to pay a high premium. one trader is making a bullish bet on abercrombie and fitch. we bought the details coming up. first we start with the s&p 500 closing above for the first time ever. ari walls is a strategist at oppenheimer and company. how does the chart look? >> s&p 2,000 question we got all day, it too late to get in? or answer is. looking back to last years ago it's paid to stick with the greinkeou breakouts. the breakout occurred recently. we moved above the july peak. we like this. looking back at the last year the one time the breakout didn't quite work was in march. after the march move, index moved rather sideways over the next few months. i'm okay with that risk for the chance that this could be a breakout like october 2013 when games i gains continued or moved

like late may as well. so i want to stay in this index. 1900, excuse me, 1990 is support. >> that will be the breakout point. looking at in terms of outside objectives. this consolidation was 80, 85 points. think which we can get that on the upside. in order to get there, we need stocks that have been participate to begin to participate. one stock i like a lot is halliburton. it has lagged over the course of the last month. it has pulled back within this very strong long-term uptrend. i think this long-term uptrend resumes hire. we see it stabilizing above the 100-day moving average, break along the upside at the $70 mark. i think you can buy it now in anticipation of new highs. >> brian, i'm curious we talked at the beginning of the show about relative value. that's what matters here.

how does bond and interest rates lay into your breakout story on the s&p 500? >> right. i heard your comments on the beginning of the show. agree wholeheartedly. it is not a warning. every time the s&p 500 pulls back. that difference is ever more in favor of the s&p 500. i think there is a floor for stocks here. i think every pullback will be met with demand. >> so basically, when we extrapolate on the yield side of things, ari, you think the charts say yields will remain lower longer? >> from a term perspective as well. we do not see a case where yields are in position sustainably higher. the trend is lower. i think you stick with that trend until sentiment reaches extreme and sentiments aren't yet an extreme in terms of the bond market. >> thank you for stopping by. i appreciate it. first of all, what do you think of halliburton as a catch-up trade? >> to me this is a stock at the end of january was trading 47

$48 and traded up to 70. there is no major catchup. if ari is referring to this stock essentially hitting all-time highs, great. i think the entire space is very interesting. i wouldn't characterize that as catching up. the all services space is on fire and has been and will continue to be. >> on the flipside, we want to know what you guys cap the trades are. what do you say? >> general electric, he's a great ceo with a stock that has not perform now for many years, unfortunately many years. they lump ge capital with ge. you see the deal. they've spun off crony financials. so i think they're getting to be where honeywell is already. it trades at a very reasonable valuation. the stock has not performed last quarter wasn't great. if you look at their growth areas, there are tremendous opportunities for them. to ge has not participated enough. they have been long for a long time. i think they will catch up and do it quickly. >> dan, water yours?

>> twitter. this i bought prior to the q2 earnings. when you think about snap chath, twitter has somewhere less tan $30 billion. that helps the valuiation argument. although you would not buy or sell twitter based on valuation. i see some potential callous here. we have the u.s. open starting this week here in, for the. let's see how twitter does with the same sort of stuff they did in the world cup in june and early july. we have the start of the nfl. i think this will be the key to engagement on twitter going forward him we will get a good look if early november. this is when i think it technically looks ready to break out. if it gets above 50, there is loose sailing higher. >> tim seymour. >> procter & gamble. the horses that have been very tired. the company fourth quarter call, there is a lot of urgency to spin off the portfolio, to tighten up the portfolio. to get behind brands that have more, they don't have enough power behind them.

i think the spin-offs will be general. some might say there is a rick there. again, they could be taken out bad prices, historically, relative stock not expensive, now a catalyst. i think laply is back to the future and it will work. >> free port max fcx. copper could be an a tail and a deficit the year. two, gold, low interest rates, i think at the very least they stay below interest rate, positive for gold. finally the natural gas almost, i bought some today, natural gas appears to be bottoming. going into the winter. that's the place i want to be. >> the s&p is just up 8% year-to-date versus the tlt the long-term treasury bpf. that's up nearly 15%. is the tlt tapped out? you out there, the viewer will

decide who wins. log on to cnbc.com/vote. we will have the results live at the bottom of the screen. can you vote as many times as you want. you know the drill. guy adami is the tlt bull, tim seymour is the bear. you have 40 seconds to make the case. >> i have been a bull, i continue to be a bull. i am convinced rates are going down to 2%. if the economy globally was as strong as the s&p 2,000, why are rates going down instead of higher? if you asked tim seymour, he would be the say, s&p 2,000 in august, where is the 20-yearfield yield? german yields less tan 'than 1% him something is going on. i think inflation has been the enemy all along. rates are headed lower. >> i tell you water going on, yeels are artificially low globally. there are people that play in

the fixed income space. that's why yields are where we are. look at where we are in terms of jobless claims. look at where the economy is as i said earlier in the show. we are mid-cycle. the labor market is set up for rates at zero. we have been in the seventh year of the upontary experiment. this is a case where if you see the end of the two-year and three-year highs. the five-year levels, you want to look at. the curve is flattening. don't be confused. inflation at 2.4% epi. the fed is paid to be behind the curve. they're not supposed to be. looking out there, they're reactive. they're missing this. having said this, basis points aren't going up 60 points tomorrow. they will go to one-and-a-half before they do to two first half. they had a good run. a great trade. >> that trade is over. >> i don't think so at all. it's at least in the fourth inning. rates are below 2%. dan spoke ability earlier, it's the only reason -- >> it's time to hang them up.

>> dana nan, continue voting. we're not closing the vote yet. >> guy has been right on this for 15% in the face of the taper. you know, i'm going to stick with him here. i think you guys are all living in the matrix or something. if you think rates are going lower, the s&p is going to continue to go higher here. something is going to give if we see 2%. >> why? >> it's exactly what's keeping it off. there is no place. it's negative real rates. if rates go higher. >> if you think it's going to end well. how's that? >> that's a different story. >> okay. >> but the markets could still go higher. >> this is a terrible financial experiment if you believe that this is all going to be -- the fed is pushing -- >> you are a bear, are you a tim in there i am a tim, unfortunately. i regret it. >> i really think bonds are very difficult here. i think they're a harder short than they are aening lo. so i'll go with guy on this. >> oh, a split on the desk.

all right. let's close the vote out here. it's split on the desk. guy, vacate%. 58%. 17,000 votes so thank you out there for voting. >> oh, well. >> i have a bad finger. coming up next, is burger king everpaying for its coffee? the burger chain finalizing a coffee and donut shop tim horton's. it's costing a premium. we're breaking down that deal next. we're continuing our trade school series with video questions from you viewers at home. we are revealing questions and answers right after this break. it's estimated that 30% of the traffic in a city

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sends it over the internet so you can go find exactly where those open parking spots are. the collaboration with citi was important for providing us the necessary financing; allow this small start up to go provide a service to municipalities. citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally citi is there every step of the way. so the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge. you just have to win 70% of your points at net. and keep unforced errors under 10%. on the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. data can help show you how to win, no matter what business you're in.

today there's a new way to work. and it's made with ibm. burger king acquiring hortons for $11 billion. did burger king pay too high a price? now, jk flash. >> that's so hot. so great. >> the only person at cnbc with his own sound effects. j.j. good to see you. a lot of people might think merger, you might save on costs, on tacks, you say that itself

not going to actually pan out for this. >> that's right. a little back story here. my sources tell me tim horton's has been sue pursued for sometime. >> by burger king? >> yes, compare it to the last couple days, it doesn't look huge, going back, it's a 50% premium. it's double what everybody else has been paying for deals in north america. in the last couple days, people have been talking about this tax inversion thing. you might be thinking about cost savings. they said this is absolutely not driven by taxes. they were explicit. people asked over and over again. it's not changing. even cost savings, same thing. they said it's not determined by synergy. believe it or not. i believe this is an expansion story. they can roll out the franchise stores that they're not operating now. if they do that, they will collect a royalty. it can work. it's a really big premium. i think people might be surprised because yesterday the

whole story was tax inversion. they said a 15% tax rate in canada. that's not it. >> what kind of growth does tim horton's have, why haven't they expanded rapidly overseas right now? >> that's why i think this story is a little hard to digest. right now they're in the northern u.s., they're up in buffalo. a little like canada, go play hockey. >> buffalo is a little like canada. >> it's close. it feels like canada. but they're also strangely in the middle east, too. i don't know how that works out. they have done some lights in there. the bought too many line is they haven't gone far afield. i think the hope here is burger king knows how to do that. they're not quite international as mcdonald's. they're still much, much more all over the place than tim horton's is. can they bring that brand abroad? i'm not sure. >> j. j. thanks for coming by, i

appreciate it. j.j. flash, aka john jannarone. guy adami you said on the 19% burger king shares it was still a buy. now what? >> i think burger king works regardless. obviously, this huge move yesterday, sold off today. i like bkw. i like mcdonald's. given the choice between the two, i think more beta in mcdonald's. >> did the stock go around when they said they were not doing it? those all sound like good reasons yesterday, the stock was up, all time highs. you have to wonder, if it's a build out this brand globally. >> tim horton's. >> it seems like a good choice. >> pete najerian made a good point. burger zinc king is in the big space. more importantly, though, this deal is going to be one of the most important deals that's done because of this inversion, i think mr. buffet's involvement is very important. i think this is a --

>> that's why it's the gains. >> it's a wake-up call. i think this deal is huge. we will be looking back on this day. it will have a big impact if washington. >> today we are continuing our back-to-trade school series. traders answer your questions live an air. it comes all the way from israel. take a listen. >> hi, this is david from israel. py question, is how should an amateur investor go about shorting a stock? thanks. >> very serious. the question again is how does the average investor go about shorting the stocks, dan? >> i would say very carefully in a raging bull mark. listen, you place an order with your broker and you short it. i would just say this. you know, there is different times to short stocks, right? do you have spec stories and individual fames where you see a catalyst? i think you want to do so at opportune times.

you don't want to do it when it's oversold meaning there is a lot of news in the stock because you have the opportunity to get called caught in a short squeeze. listen, the short of the stock is asymmetric risk tan when you are a longer stock. if you a longer stock, you can only go to zero. on the flip side, it can go to the moon. >> there are also options. >> there is a program on this fine channel called options action here, we talk about -- owning a put gives you -- but we talk all the time about defining risks, owning puts, put spreads. >> all right. our next question is from mike. it came from twitter. so mike asks, can you explain what a company's pe number means? pk, why don't you take that one? >> the pe is price divided by earnings, how much you are pailing for a dollar of earnings over time. really what it is is, it's a way to compare two companies to each other. so you may have revenues of a

billion if one company, revenuesles of 500 million in other. how do you know the one the mark is valuing correctly? you go to the pe ratio, how much is the market willing to pay a dollar? a core larry is pe expansion, which everybody is talking about right now. which really is a silly wall street terms, that means somebody is willing to pay a higher price for the same amount of earnings. it means the buyers are aggressive. >> here's a couple companies that they're trading the same sector, you are comparing pe, how about disney versus cvs? disney trades 19 times multiple. they're 21 on the current on the future fine. cvs is twoefl.6. so ultimately, which company deserves that multiple? disney we talked for many months how their media content continues to grow and the value of their theme parks. this is company with fantastic eps growth, it's apples to oranges, you can compare them in

some sectors. pe means nothing. in, ba, i look price to books, for example. >> you can keep sending your video questions to us via twitter. we will be fee curing your videos all week long some please send them in. coming up, abercrombie back in fashion. the teen rea tiller, some are betting on much more upside ahead. with egot the details ahead. .

. welcome back to "fast money." tivo posting second quarter earnings of 8 cents a share. third quarter sales below the forecast. the dvr maker announced share buyback plan. that stock is trading down 1.5%. >> thank you, morgan brennan. >> with this buyback coming in there, i don't think you get heart in the name. it's probably not a double. if you buy the 1370 in after

hours use 13-and-a-half. that's a good risk reward. >> good day for abercrombie and fitch up to 52-week highs does the options see more earnings? >> the company reports q2 earnings friday morning. there was a big trade in the options mark, a call spread or a call fly about 2500 times, options volume ran three times average daily volume. someone committed $87,000 that the stock would trade above 4785. the stock closed about 4480. that's up about 7%. the packs gain on the trade is at doctor 50 on friday's weekly expiration. i want to quickly go to the chart here. look at this thing, like mel said, this is a break even on this trade, they are threatening the needle. playing for a move by friday's close. >> you catch more options action every friday. check out the website options action.cnbc.com. you got your first move

tomorrow. we come right back. stay tuned. [bell rings] ♪ time and sales data. split-second stats. ♪ its so close to the options floor, you'll bust your brain-box. all on thinkorswim, from td ameritrade.

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. >> i didn't see this yet. >> i feel i'm out of place in games. that brown movie. >> which one? >> i don't know which one it's called, james brown. >> you want to go? >> the s&p 500 closed above 2,000 ever. on that note. tim seymour. >> a name not a part of that is best buy. we talked about the numbers. i think this is a chance to buy a cheap catalyst. you don't fall in love with this. there is a trade, best buy. >> in this raging bull market you don't want to go for the junk out there. last week i property sprint at 5.40. stick with it. i think it will pull the gap back to 12k3w4r7 speaking of the raging bull market, it's all about interest rates are lower than the rate of inflation.

as long as that continues it will be great for precious metals, buy silver. >> i think thc is the best it's breaking out. tenet health care. >> i'm melissa lee. thank you so much for joining us. meantime, don't go anywhere. "mad money" with jim cramer starts right now.