management team, because he is the head, so it start there is and i was surprised that he went there with the pot smoking comment because you could be critical of twitter for a bunch of reasons, even though they have doubled, as you said, since the ipo, but i wouldn't be critical of costolo and the management there. >> have to leave it there. thank you, everybody, for being here. so much news to get through today. i think we did it that does it for us on "closing bell." "fast money" begins right now. live from the nasdaq markets, new york city's times square, this is "fast money." i'm melissa lee. tim seymour, pete najarian, brian kelly and guy adami are we me. the day the markets releasing for, the fed leagues the latest statement this afternoon and fed chief janet yellen didn't just give stocks considerable time, she gave them the all-clear. >> i want to emphasize that there is no mechanical interpretation of what the term "considerable time" means. i know considerable time sounds like it's a calendar concept,

but it is highly conditional and it's linked to the committee's assessment of the economy. >> those words sending risk to the upside. small caps, biotech, tech stocks all popping higher so is this the all-clear for stocks now? pete najarian, seems like we got what wement with aed, rates will remain low, sort of a goldilocks environment? >> does feel that way now, i think when you look at the volatility index yesterday, i think a lot of folks started to read between the tea leaves and understand where the fed stands. we do. we understand where the fed stands and how the rates will be for quite some time. volatility went down again today, once that fed statement came out. it was creeping back up towards that 200 day, pulled right back again underneath 13. you could really see where folks were actually trying to allocate some money. look at the financials, one of the better-performing areas, big cap tech, another area, industrial metals that has been an area absolutely on fire, particularly in steels, obviously, news attached to that as well, u.s. steel. look at steel dynamics, look at

that entire sector, not just a single stock, the industrial metals going to the upside. >> not the mining stocks that include gold. these things will continue to get torched because the guidance here on the dollar is all you need to know, competing forces, all that was good today out there, i tend to disagree out there, i think there is a lot more volatility out there and the dollar takes you there, stuck at 8430 last week on the dxy. this week started a rally -- started to give up space, on the announcement, the dollar index heading to fresh new highs, more pressure on commodity prices, also this race to the bottom with global central banks, china did more of that last night and a case where the dollar will continue to rally, you have got guys pushing through an open door on policy and i think the dollar strength will equal volatility, not just in commodities, but also in dollar-sensitive stocks, certainly multinationals. >> push back real quick on that and stay is about global tensions, i think this movement in the dollar and the rest of that, pay attention to that but we have been facing ourselves into the face of a lot of these commodities moving all over the

place, up and down and moving around very volatile. when you look at the markets, look at the measure of the volatility. tim, you can protect right now, buy volatility under 13 over 50-day moving average, the 200-day moving average >> i think volatility is going higher. [ overlapping speakers ] >> what you are saying about the global environment, geopoll six in. >> geopolitics. >> that has not moved the dollar. >> you care about the dollar, i'm talking about the movement in the stock market. could i care less about the stock market. >> i want to go to bk here, he trades currency, basically, tim, think what you're saying is the dollar going higher, basically what the fed sort of telegraphed today with what they said -- >> will be bringing volatile wit it. because of the exposure. in fact, we have already heard from companies and analysts who are concerned about the strength in the dollar in the third quarter and what it will do to third quarter earnings. >> right so all about how high and fast the dollar goes relative to how good the global economy is. so, if your earnings can outpace it, type. so far, the u.s. dollar strength

has not hit the stock market at all. you started to see the bond market sell off today. i thought today was a really interesting day because to me what the fed said is we've got another year here for stocks. it's, you know, lower for longer and not only that, even when the economy improves, we might stay on the gas pedal a bit because we think there's this cyclical problem going on where if we stay for a little bit long other, things are gonna get better. i would disagree with tim, i start to look at commodities, as we get into the next year or so, that's when you're gonna want to be in these industrial metals, you saw materials do well today. so, that's what i think. it's like if you were at a bar on the day you turned the clock back, right, and you think it's last call, all of a sudden -- >> yeah, another hour. >> then they go, hey. and so stocks are partying, bonds are worried about the hangover. that's my analogy. >> quite an analogy. guy? >> i was typically in the library when that happened. >> me, too. what i would imagine happened. we are at a bar the day turn the

clocks back. anyway. >> fortunate i don't speak yellenship. he confused me more today, it was as cryptic as she's ever been in my opinion. i think the two things you take away from where i'm sit, the strength in financials, pete banging the goldman sachs drum, a four-year high today, the continued strength in transports, not given up the ghost at all. the russell been getting whacked around a little bit, the transports continue to perform, fedex a big part of that today and the continued weakness in the bond market, it looks right now like timmy's going to be right in this. i think rates go down, but been a tough two weeks. >> part of the transport trade, strength in the dollar pressuring oil, therefore, helping transports. >> i they running their -- i'm sure that helps, a tailwind, no doubt, but running their businesses more efficiently, talking about the railroads all the time, talking about federal -- >> all about price and power for these guys. >> where they have the pricing power, been in the airlines because of the fact we have seen this consolidation, look at the rails, cp, ump, the names continue to move to the upside it used to be the story about

coal. then we shifted from coal to other areas, automotive, the rest of it, moving parts everywhere right now and that's what's really kicking these things into overdrive. >> we have told you what you should buy. here to tell you what stocks you should avoid the decision is behind us. paul hickey, co-founder of bespoke investment group. great to have you with us. >> good to be here. >> what normally happens? you are taking a look at the period post qe, in the sort of new world we are living in this terms of being an investor. what happens typically after a fed decision? >> this is short term. since the taper last december, tend to see, positive returns in the market following the rate decision on that day in the week following investors go home, sleep on it for a while, they know, the tapering, the fed is becoming less loose and raise rate, tend to see selloff and reversal of those gains in the days ahead you tend to see some short-term weakness here and also confusion on the part of investors. saying we shouldn't focus a certain number on considerable period. she is the one that said it was

six months. investo investors confused and rightly so. looking it at the sectors underperformed short term, consumer discretionary, transport, industrials, all under er form the market, negative more than half the time since those -- that first december taper. and even the s and p 500 averaged decline of about a basis points the following week and positive half the time, down half the time, a coin flip, overall, tend to see most sectors more often than not since the taper first announced down in the week following. >> i want to drill down and get to stocks specifically, you said consumer discretionary, the with unthat feels the most weakness, post fed decision stocks. start off with lbs. >> the dollar strong, focus on companies with international exposure, in the consumer discretionary, las vegas 12% of revenues domestically, the rest overseas, macao slowing, smoking ban hurt, attendance at the casin casinos, workers protesting for higher wages, just a name we don't want to be in right now,

we would avoid short and longer term. >> cat falls in that category? >> 25% of the sales in europe, africa and the middle east. and if you look at a newspaper that is not an area you want to be doing business in right now. less than half their revenues are domestically in the u.s. where they are seeing some strength. the stock had a nice rally off its august lows, failed to make a new high, rolling over a little bit here. >> boeing? >> boeing, again, overseas exposure, stock had, again, rallied a little bit off those august lows, but we have seen good news this week in the stock and just hasn't bounced on that news, when stocks don't rally good news, want to avoid them. >> you are in the same camp as tim, you think the dollar strength will be some sort of a headwind for the multinational companies, is the extrapolation that you see volatility in the stock market in the weeks ahead as we start getting earnings in? >> i think the short term it the end of this quarter, multinationals, tim was saying, come out and i think a lot of negative warnings, we saw tariks guide terror week, that bodes

poorly for caterpillar. we head into the last two weeks of the quarter, this isn't necessarily the high international exposure companies don't want to be involved in. >> paul, great to have you with us. paul hickey of bespoke. >> caterpillar, take that first, largely a good run, as paul pointed out, they have a huge earnings headwind that.coulds from europe with the u.s. policy what it is and also even places like brazil, effectively recessionary, china import growth is out. >>, 19 times earnings, back to where it should be, had a good run, sideways lately, exactly what we are talking about, a case where i don't think you need to buy this. and by the way, i'm someone that thinks the world is a lot healthier economically than most people do i don't think the u.s. stock market is going down. i do think that we have been at historically levels of the volatility, a rising dollar only going to inject more uncertainty into this. >> right, you have made the point time and time again that the moves we have seen on the dollar, they are massive moves. >> huge moves. >> that we don't see in the currency markets. >> look what happened to the u.s. dollar is/japanese yen,

moved 1% from top to bottom, like the stock market moving 10%. >> currencies. that he is are massive, massive moves. i agree with tim, if there's one trade you want to put on for the rest of the year, it's long volatility. >> so quickly, want to rethink your disagreement with tim in terms of the strong dollar being a head wind for stocks? >> a headwind for some stocks, not all stocks. i think tim would agree. absolutely agree r >> the bigger picture of which stocks where i want to be? i want to be in the financial, you looking at a majority of you financials, goldman sachs, bank of america, silty more exposure, parts of the market, mel is a, i think we have huge opportunities to the outside. >> earnings alert on pier one importeds, get back to dom chu at headquarters. >> pier one moving lower by 10%, whatful a million shares of trade so far in the after hours. the company posting weaker-than-expected profits and sales and cut the full year earning guidance lower than expectation. ceo alex smith said in a statement they see continuing pressure from slower sales traffic and pressuring on profit

margins but their omni channel strategy, while costs will incrementally increase temporarily, they do expect once scale and size return, that they will restore their margins and the new business model will drive strong profit growth. so a little bit of a mixed pitch terror still. the stock is down, melissa by about 10%. back to you. >> thanks, dom. interesting, dovetails nicely with what paul is saying about consumer discretion. >> talk about wicker. >> that was gonna get a second sentence. and wicker and papa san chairs and scented candles. >> you got to be careful this is a name you would think like pier one imports, a huge short interest, it doesn't, lead miss he to believe they are going to lean in this for the next couple of day thinking about buying this dip, i would say think again. >> u.s. steel up 10% today and more than 100% over the last 12ant mos. our own man of steel, that would be guy adami -- >> yeah, buddy. >> stock for at least a year, tell us whether it is too late to get in the action. that's next. home builders popping today

before today's fed decision, an analyst here to tell you which build verse more room to run. that's coming up next on fast. ♪ the all new, head turning cadillac ats coupe. it's irresistible. ♪ it's in this spirit that ingu u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya.

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what is that? >> not good. >> peanut gallery. >> pier one. >> pier one. >> general mills and kellogg kicking off our top trades tonight. general mills getting rocked after reporting first quarter profits femme 25%, citing weakening demand from u.s. consumers and soft jen taking kellogg to a hold from a buy, general mills to a sell from a hold. interesting given the recent acquisition. >> right. that's probably why we are seeing the acquisition because quarter after quarter after quarter, general mills continues to disappoint folks. they actually talked about the advertising costs and cutting into their margins. there are some major issues going on right now and certainly, the pressure is on general mills. i don't think it's time to try to catch this falling knife. i do think there's more downside. you can understand why they are trying to shift some of their makeup of who they are as they move forward in 2015. >> some stopoint, story might b interesting. they have an acquisition already to get into a higher growth

organic business. >> a stock something to prove, a very difficult operating environment but the packaged food space trading you at a multiple because there's a lot of acquisition, pinnacle foods is a name i'm long on the back of the tyson hill shire struggle. i think you can see that stock back in play. >> i don't think you try to get the general mills knife. i'm with pete on that the first is enis recognizing the problem, i believe you have nine other steps after that, i think they are only on one step, i would stay away from it >> have you checked out haines chart of late, up 25% past month or so? >> the last time -- when the monster deal happened, mnst, we talked about stocks potentially that could rise on the back of that i think trading at $89 or something, looking at the nice move. he has done everything right. how many times have we had him on the show? >> a dozen. >> at least a dozen. >> co-take your chair any time, bro. saying he is that good, knows our show that well. >> voting a guy off the island. >> wow.

>> wow. >> i love guy. he knows i'm joking. >> voting him off the island. next up, u.s. steel rallying on the back of restructuring moves, steammaker putting canadian unit in creditor protection and canceling 800 million of capital investments. the entire steel sector seeing huge gains today. guy? >> got to give a shoutout to the morgan stanley analysts, finally on back of early september. i no he pete talking about this for a while, new corn steel dynamics, the space works, u.s. steel specifically works because they are running their business better and they have pricing power and you have seen the leverage, when things turn and you can use the leverage that's been bedded in your company this is what happens, stocks go from 20 to 45. what now will you say is the obvious question, 45. they report i want to say the end of october, i don't think you have to own it until then, you will continue momentum in the stocks, people talk to the options, pro belie still favor the upside of these names. how far? goldman sachs raised the price

to 58 bucks, quite an upside from here. >> multiple different name, new core one of the names, they continue to roll and roll and roll, you can see where they've got energy, they have got construction, automotive, a lot of different reasons why certain names are really working right now, new core is another one of those names moving to the upside, steel die nammishs another one of the names, this sector red hot, absolutely, the options continue to say it's going higher. >> the reason why it's not just the sector, u.s. steel going higher, this is a there is an formational part of their business stopping unprofitable business, getting into the carbon al lows, a la alcoa. kudos guy, the buddy just wanted to get voted off the island. >> now you love him. you want him off. now you love him. >> absolutely nailed this stock, on it every time after a rally saying don't sell it stay in it i think that's it. >> everybody likes the space, bk? >> yeah. bk? >> yeah. >> no, i'll tell you what, i will go downstream on it cliff's natural, that stock absolutely decimate, iron orr prices down

at the lows, last couple of days, it's perked its head up. that interests bk. i said it before, gets down to 14 he is gonna get interested. >> some courage. >> gutty call, bro. >> i tell you what, if this is a change, a sea change in the steel industry, iron orr prices probably bottom, cliff natural's, buy stock. peter thiel trashing twitter's management earlier today, claiming the c suite is filled with pot smoke. that's next. later, the home builders locking in solid gains on the back of the fed today. which ones have more room to run. that's later on.

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silicon valley venture capitalist peter thiel playing fast money's favorite game, that would be "would you rather," did this on "squawk box" this morning, listen to which company woe bet on if forced to chute between apple and google. >> i'd probably still go with google. the risks with apple are that at some point the -- they lose the pricing power on phones, risk of google is the e.u. antitrust stuff. those are the basic risks, but there's probably more upside with google than apple over the next decade. >> so he would rather google. so, let's take it on to our home court here and play "would you rather." tim seymour, rather google or apple? >> as a total return play, apple bringing their dividend up to levels, i think gonna go even higher and may be a function of where growth is not. google. because right now, these guys have figured out how to stay and keep growth over 20%, a multiple

that makes sense. they are going to start. planted seeds in terms of their venture capital stuff in addition to the core business model gets stronger and stronger. pete? >> i would go with apple. >> why? >> i see more growth with apple. >> over ten years? >> ten years -- >> yeah, yeah, yeah, that's true. at this moment. >> but at this moment, i like at apple and i look at the opportunities that they have in front of themselves in the asian markets, specifically in china, see the opportune wits this iphone 6 and the 6 plus, back into the competition once again with everybody else in the space and because of that they don't own the market share. they don't out market share. google ounce the market share. they can only lose some, i think, over time and because of that, i look at other areas in apple, i hate the i watch, but i think evepgly, they will figure out theism watch and that's another innovative spot that actually i think adds to growth as well. >> i would agree with pete but then we would both both be

wrong. guy with google. a huge achilles' heel comes to am, the pricing power coming from at&t, verizon. if don't go eat free phone, people respect going to pay $600 for their phone. not only that, have to come up with a new product again, reinvent tv. google has a whole bunch of really smart people always working on. ing new. for ten years. [ overlapping speakers ] >> i like pete's point about their market share to lose where it's apple's market share to gain. i haven't thought of it that way. thank you very much. a really interesting point. but i -- my instinct was to go with google, stay with my instincts and go with google, ten years from now, god only knows iffer with talking about apple or they become commoditco

>> what does that mean? >> interesting decision. >> drawing you 20% aer i don't. >> more from thiel. he got into trash talk about twitter and how the company is run. take a listen. >> i -- twitter's hard to evaluate. they have a lot of potential. it's horribly mismanaged company. the people -- probably a lot of pot smoking probably going on there. >> wow. what do you really think? >> but it's such a solid franchise maybe it works even with all that. >> ceo of twitter, dick costolo, did reply to the allegations on twitter, of course, by saying "working my way through a giant bag of doritos, catch one you later." >> what does that mean, mel? [ laughter ] i'm just trying to understand. i don't get what that means. >> if i understand it, when one is high hurricane you get the munchies, therefore, he is working his way through a giant -- >> is that true, brian? >> tim, you -- >> purez the driven snow, my

friend. >> as am i. here asking questions. >> good questions. first of all, you are the one in the rock 'n' roll band. i read all the books, pal, i know what goes on backstage. >> thank you. >> can we get back to this, please? >> i tell you what though, he makes a point here, if -- if -- let's just assume the allegations are true, right, and bob marley's hanging out with him at the headquarters at twitter, the product is so good, it's still working so imagine if they get management and they actually have just hired some excellent management, imagine if that isn't there what the stock can do, so i think this is a buying opportunity. >> if they have got bob marley at their headquarters, man, should all go there, a trip worth taking, these guys continue to grow in a way, the digitization, what they showed last quarter, if -- really tough to keep a straight face here. >> keep going. >> this is tremendous growth, actually -- >> giggling? >> tremendous surprise. i wish someone had a bag of dorit

doritos. >> i look at it as mobile ad growth, their mobile ad growth is dominating, they come from a smaller slice than everybody else that you want to compare them to right now, but because of the fact that they come from a smaller area, their growth trajectory much faster now and the focus everybody has is mobile. because of that i think twitter has a lot of room to the upside. all right, still ahead, the home builder rally heard around the street. tell you which names have room to run when we come back. later on, why the king of valuations says stay far away from the alibaba ipo. back in two. chimes sfx: ambient park noise, crane engine, music begins. we asked people a question, how much money do you have in your pocket right now? i have $40, $53, $21, do you think the money in your pocket could make an impact on something as big as your retirement? not a chance. i don't think so. it's hard to imagine how something so small can help with something so big.

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welcome back to "fast money", live at the nasdaq markets at types square. still ahead, who to you play the housing market. tell you which home builders are worth buying after today's big run and the king of valuations says ali baba is fairly valued but he still would not buy it find out why coming up. and one trader making a bullish bet on whole foods. we have got all the details. but first, got some breaking news out of the house of representatives. so, let's get to john harwood in d.c. for that john? >> melissa, just had a strong bipartisan vote in favor of the continuing resolution to keep the government open past september 30th, to extend the

export/import bank until next june and to approve the authorization for president obama, his administration to train moderate syrian rebels, though not in syria, in saudi arabia. this was expected to happen but this house vote clears the way for the senate to follow suit and members having put these issues behind them can go home and campaign for midterm elections, melissa. >> all right, thank you very much, john harwood, for that. brian kelly, you actually have a trade off of this? >> i would watch boeing tomorrow. the ex-import bank is very important to them, where a lot of their customers get their financing. now that that is off the table and boeing has been consolidating, we will see what kind of reaction it has, boeing breaks out tomorrow, might be worth a trade. shares of home builder soaring on news the national association of home builder showing the most confidence in the industry we have seen in nine years. which of the stocks more room to run? bring in rbc capital markets director bob wetten hall. good to see you. >> thanks, good to be here. >> our earnings, tremendous speed. spectacular. >> in terms of the fed and what

janet yellen said or did not say today, does that change your outlook for the housing sector? >> we came from walking dirt in west texas, in houston, we are seeing the return of the first-time home buyer which represents a powerful source of incremental volume. so actually, which are going to 2015 juan incrementally optimistic view. we have been cautious most of the year. lennar is doing some fantastic thing, got great management. they posted best profitability in the industry and the strongest asset base. so, things are looking up. >> if you had to poke one hole in the lennar earnings to extrapolate beyond lennar -- >> without -- >> that would be the slowdown in the price hikes, correct? >> so, we have seen moderating price throughout the year. the question is how do you respond to this modest headwind, radioity, three years of great price appreciation, starting to slow down. the print today from lennar was extraordinarily strong. i would qualify it as bulletproof. it also has positive ramifications for guys with similar geography, similar overlap regionally, like dr horton and kb home.

so, other guys will benefit from the same trends, which is helping put some wind in our sales. >> so, when you talk to your companies, lennar, dr horton and seeing this first-time home buyer what is the credit situation? janet yellen mention there had is still some credit tightness in housing, if that relieves, i would think that would be very positive for the home builder. >> the logjam creating the bottleneck from really getting housing reingauged to making a much larger contribution to gdp because right now, it's really tough, post today frank for the average person to come in and buy a home. we can somehow get movement in d.c. to open these flood gates, you really could have a good upward move in housing but absolutely correct, that is the gating factor to a housing recovery. your picks are horton, pulte and kb homes. >> and lennar as well. >> and lennar. outside of builders, downstream, do you have picks as well? >> yes. we still love fortune brands, fbhs has continued to deliver, riding the repair and remodel wave, mohawk is doing extremely

well, we also like the masco story. repair and remodel has won the day in 2014. these stocks are doing really well, expect continued strength. >> just quickly, we like to play "would you rather." would you rather housing downstream or home builders, if you had to put fresh money to work right now, which bucket would you choose, which is going to be the outperformer? >> the operating leverage we think you are getting from r & r, depot and lowe's, great same-store sales, probably slight bias right now toward going into the building products downstream. but you got to say, we saw great results today from lennar, very encouraging, going to be watching closely. >> didn't play the game right. didn't play -- would you rather? he didn't -- >> i'm going to -- >> downstream. >> downstream. >> then said -- >> but the bottom line is downstream. bob, thank you. >> thanks a lot. appreciate it. >> guy, same question to you. >> i will plate would you rather. i think kbh in earnings the 32% short interest, report on 294th, i would rather that. how do you like them apples?

>> nice job by you. tim? >> rather go back into home depot after consolidation and also a pop in lennar,thyic is very interesting, the numbers very good, some of the parts, people reporting that, go back to what he said, be more emphatic and count more on follow through and not need regulatory, stay with home depot. gonna go with whirlpool. i think all of these home builders -- >> sales are slowing. >> maybe they are slowing but like at their growth and why they are trading. >> no the playing as well? >> he said downstream. downstream. >> going downstream. i would rather -- i like the mow hawks of the world and actually think something like whirlpool, i luke at what these guys have been able to do the last few years, everybody fires against them, everybody tells us the slow downs and all the stock dos is push toward 52-week highs. >> a giddy up. >> giddy up moment he is. >> yeah, baby. >> time now for -- pops and drops. you guys go downstream together. a drop for sony down 7% after warping the wider loss. pete? >> these earnings, just continue

to be something very difficult for the ceo, sixth time in two and a half years, the outlook terrible, look at this can, they talked about the dividend and having to take that off, i think you stay away from the name. >> active vision, 3% down, unimpressed by destiny's seam he is. >> the stock has been off quite a bit in the last week. this is a problem with a lot of the stocks, you have a dud and the stock gets killed that being said, it stopped today at resistance, now support, i don't think you have to bail out of it, you see if it holds, call 2140, might tiptoe n >> a pop for trina solar, up 7% after deutsche bank gives positive comments on solar stocks, specifically ones leveraged to china, tim. >> last week, solars got crushed, we said this could be a possibility to buy this week, but deutsche bank talking about increased pickup in china, modular prices higher, utilizations higher, ts almost the cheapest and most profitable of names, long this, i am long this, maybe against a yuengling. that's good trade.

>> massive drop, massive drop for rack space down 18%, ended efforts to find a possible buyer. >> those efforts, i don't think this chapter in this story is over at all, six times normal volume, i think the journal said the stock is expensive, you buy it here for a trade. i think there be will will be more headlines that will be positive in the next week or some >> we got a pop for raging rent. >> what? >> the "new york post" reports after robert de niro moved into one of manhattan's most expensive rental apartments for $125,000 a month, the 6,000-square-foot flat features five bedroom, seven baths and a library. the high-price pad comes with some scenery serving up 360-degree views of central park, downtown manhattan and the hudson river. >> what's your favorite de niro film? >> "heat." >>? i go with "heat." >> probably "the untouchables." >> "untouchables." >> a good one. >> talk about you. >> you know i can't remember which movies i've seen. >> "raging bull" is mine.

the guy was a genius. genius. should have stopped after that, in my opinion. >> "casino" is a good one. >> "fast money." >> i thought you were going to say "analyze this." your type of movie. >> point. >> time for some unusual activity, pete. your flagging a move in met life. >> yeah, a company when you look at it and you look at the forward earnings now, talking about single digits and the stock is not that far off the 52-week highs. today, somebody was very right early august, buying the september 55s. but they selling the september 55s today and they are actually rolling out to the 57 1/2 calls, that was done over 7800 times today, large trade, somebody look fogger more upside, already been a nice move, buying multiple months out so there's plenty of time for this move to occur. i like this trade. >> you are in it? >> i am not in it. tried to get in it. >> just like it? >> i missed it because i didn't want to chase it, so maybe any kind of a pull back and looking out three months. i have a little bit of time to think about it. >> okay. the king of valuations says you

should stay away from this ipo. he will tell you why even fair value is overvalued in this case. that's next.

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that's thrilling, music, gets me jazzed up. i'm in. i didn't say thriller. >> tomorrow, e-commerce giant alibaba expected to price its ipo, while demand for a peas of the profits is surging, the king of valuations says you should not go near it. nyu professor of finance joins us with his reasons why investors should not buy the hype. sorry i mangled why you are last name. call you professor. >> the first thing i would say, if you are a trader, i don't even know why you would listen to me. i'm the last person you should listen to as a trader are, because i wouldn't have bought twitter at any of the prices it's been offered at. >> with that said though, you do -- you do think basically at the range, it's essentially fairly valued? >> the first ipo in a while that i've actually valued where the price has been and the first reaction i had is what did i do wrong, because it's -- they are two different processes.

there's almost complete coincidence when it does happen, but i think the fact that they have so much on the ground that you can value makes it easier to price a company like this than a company like twitter. so i think -- it's an incredibly profitable franchise and i think it's worth a lot of money, but i think that's why the pricing was a little easier as well. >> okay. so, why not buy it if it's fairly valued? >> because i'm not getting a piece of a company, i'm getting a pest of a shell that owns a company where a politburo basically sets the board of directors. and if you're a trader, you really don't care. you're going to be out in six months, three months what do you care that jack maher has power for life. the way i see it, traders date companies, investors marry companies and if you marry a company, you have got to be in here for the long term and it scarce the heck out of me, to have absolutely no power over how this company will be run or what can happen in the future. >> so, as you value this company, one of your indisputes the discount rate, how much risk

you attach to the company, the corporate governance risk and sounds like you are attaching quite a bit, might be cheaper, which people think it is relative to its peer group. compare it this to a badu, put this into an apples-to-apples thing and help us understand why, you know, why this might be that much more something you're apprehensive b >> corporate governance is very difficult to bring to this country, because it's the fear that something bad will happen and you can't come out of t they have a well-managed company like badut or alley ba bat. how much of a discount would i need to be offered to be okay in jack mar east outhouse while paying five-star hotel prices because it's no the that i would not buy alibaba at any price, but to pay a fair price and get treated as a second-class citizen strikes me as not a good deal. >> so, professor, let me just push back then, when we talk

about china, it's a different type of economy there. and so you have a state-sponsored monopoly essentially with alibaba and a guy who's in with the state. wouldn't i want to have that in a stock? >> oh, sure, and that's built n the fact that they have a 75% market share is not just because alibaba's a great company. it's because the right people in the right places so the connections are actually built in. and my fear is there are people building in this expectation become a global technology company and i have a he seen no evidence of that yet. i mean, it's actually become more china focused in the last year than less china focused. it's never been a particularly innovative company. this isn't google. this is a merchandising company does well, made a lot of money in china but nothing they have done that would lead me to believe that i can attach a 250 or $300 billion value, which is what i would get if i gave a global technology premium to them. i don't see those pieces in play yet. thank you so much for coming by. >> thank you. all right. so let's trade this.

>> yeah. >> it -- do you agree with him that the corporate govern naps aspect of it is enough to keep you away? >> yes, keep me away from investing. the only thing i would marry in my life is my wife and after that, nothing else, no stock ever. >> great answer! >> no stock ever. but i think there are multiple traced and i know you get who trade, i will continue to pound the table on goldman sachs. i think the way goldman sachs has been able to be on every single ipo, the idea the capital markets coming back and the strength i have seen from the company, why is it moving toward 52-week highs, look at goldman sachs as another stock that benefits off of this alley ba bat. >> i think you go with these big state companies, betting on board with the state at times is very beneficial in emerging markets, i'm going to own badu, 30, 35% growth, more more, better valuation, even though i will own alibaba. >> you know, the professor makes an excellent point that if you're going to -- can this company become a global technology leader, think that's unproven, i wouldn't buy it for that i'm with tim in that you

buy companies that are state-sponsored monopolies, certainly not going to be in this for five years or so as a trade, i think it's all right. >> do it is need to become a global technology company, can't it be just the best whatever it is marketplace in -- china is a pretty big place. >> it's massive. the consumption growth on a relative basis is the best in the world for an economy that's not a consumer. >> i think do themselves a disservice if they try to be anything but, and quick lynn at yahoo! thing, i think we have been in lockstep along the way in terms of where we thought it was going, i sort of now take a pass now, i thought 42 to 45, trade at 44, i'm still in the take profits camp, yahoo!, not short it take profits. >> tomorrow, do not miss an exclusive interview with susan decker, the former president of yahoo!, on "squawk on the street," 10 a.m. eastern time. she was at yahoo! when the deal with alibaba was made. it's must see ahead of the alibaba ipo. share of whole foods down 30% this year, traders are betting the trends are about to reverse, we will break down that trade. that's next.

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whole foods had the options market buzzing today after the organic growsary numbers on it had would open its first had in-store brewery at a store in

houst houston. mike doing on the ground research. mike? >> traded to times its average daily option volume, two times call volume and options most activity november 40s, paying about 1.65 for the options making bullish bets the stock could be above 41.65 by november expiration. a lot of the pressures whole foods faces is an i shall a you of margins as other growers get into their space and compete by offering organic products of their own is a pressure that they will continue to face. for consumers, that's probably good. for shareholders, i'm not so sure. options seem like a wiser way to make a play i might go further out than november if i was going to do that >> thanks for that, mike. catch more.toss action every friday 530 p.m. eastern time. check out the website, optionsaction.cnbc.com. you tweeted, we trade it let's get some of your tweets today, for pete. pete, i can see american airlines union vote spooking airlines a bit, but not this

much in stagnant of late. like them here? >> i do like the airlines here. i is i will continue to like the idea that they have got the pricing power. i understand that this is a very unique situation where they potentially are seeing these little bumps right now and you the movement to the downside. i think each and every time we have seen the opportunities in the airlines, on the pull backs, weather related or whatever the news related now, i think the pricing power allows these stocks to go higher. >> business or beakers, your target own blackberry, assume you still own it? >> i still own it, own stock and long calls on it and my target is i'm a longer term, 15. >> 15? a lot of upside. think the next quarter or two, as this turn around continues to gain traction, blackberry will do pretty well. notice on the down days we have had in the market, the last couple of days, blackberry has held up very, very well there's something else going on there, if we can get through 11, 20, call it the high was recently, think it's off to the races.

>> this one for timmy, tim tim the recent downgrades giving mgm a case of get built by associat? >> everyone is concerned about macao. m go. m concerned. if you look at where the growth is coming from, certainly not the vip, the mass market. this is ultimately very good. i think we are in a place where a lot of these guys who have been wasn't up start to look interesting again a built of a raintree, as you can see on the chart, owning at these levels, have the consumption growth story in the region is something i would do. >> well, if you like this show, that's clearly yes, right? >> whoa. >> yes. >> how could you not? >> you're going to love the new cnbc app. go to the app store right now, download the new cnbc business and finance news app. you can see all of your favorite clips from "fast money." this is the app right now, this is on my phone and already, the top of the show, trading the fed, the paul hickey interview, that's already on here. you can actually create a play list of all the videos you want to watch from cnbc. stay your ascrolling through,

see this video you watch, don't have time, put it on your play list, say i want to hear everything pete najarian has to same it wouldn't be guy adam mir, i will create my pete najarian play list and listen to pete later on in the evening. easy to use. i used it today on my ride in, able to watch live cnbc while i was driving in the car. pretty good. >> the best of all worlds, want you a stock list, call specific stock, right there for you, right on the screen at the same time, best of cnbc, best of guy adami, i mean, what more could you ask for? >> can't beat that. >> very. >> shout out to those application designers back there doing a great job. >> surprised you even know what an app s and what app stands for. >> coming up next hour on "mad money", would you change the name of your company if it were called isis? cramer asked isis pharmaceuticals ceo just that. >> the name, okay, so i

mentioned to people that i have isis on tonight, isis pharmaceuticals, we know the unfortunate connection with an outfit that the president calls isil. what do you tell people? >> we have been isis for 25 years and i don't feel like i want to capitulate to these terrorists by changing my name. they can change their name. >> well full interview, top of the hour, "mad money." ♪ when the world moves, futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with paper money to test-drive the market. all on thinkorswim from td ameritrade.

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time for the final trade, around the horn we go tim seymour? >> happy birthday kevin rooney, you are the man. badu, chinese internet names, the one i have the most confidence in, it has a proven track record and evaluation i can dig on. >> pit boss? >> talked about met life earlier, unusual activity, i a lous some time, didn't have to jump into it today, i missed it, i think there is opportunities all the way up through december where the options were trading, there's more upside to come. >> beekers? >> hong kong dollar is tied to fed policy, tied to the u.s. dollars, fed policy accommodate, buy hong kong, ewh. >> ah. guy adami? >> everything traded on the cmself. moving, the stock higher, kevin

battling an insid i don'ts disease, kevin rooney watching the show a long time, thinking about you, happy birthday, brother. >> come to visit many time, happy birthday, enjoy. i'm melissa lee. thanks so much for watching. see you back here tomorrow at 5:00 for more "fast." don't go 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. i'm cramer. welcome to mad money. do you want to make friends? i'm trying to save you money. my job is to educate you and teach. call me or tweet me. news flash, the federal reserve is run by intelligent people who make judgments