in and out or pick this stock or that stock. just own the country. the best days of america lie ahead, and the best day of american investors lie ahead as long as they don't beat themselves. >> warren, thank you so much for joining us today. we really appreciate your time. joe and andrew we will all be back in new york city tomorrow, and the three of us will join us. we've got great guest hosts coming up including david rubenstein. that does it for us today. right now it's time for "squawk on the street." ♪ everybody dance now ♪ what a show. congratulations to becky and "squawk." good monday morning. welcome. i'm carl quintanilla with jim cramer and david faber. nxp buying freescale. we're going to talk to their ceo about his company's $12 billion deal in just a moment. meantime we begin the month of march with the premarket relatively steady. oil is slightly in the red and the ten-year just above 2.

personal spending was a disappointment this morning. we begin with the first trading day of the month after a monster february. with an eye on nasdaq 5,000, will the momentum continue into march? >> warren buffett on the record on the economy, ibm and the news that these were places amex as costco's credit card partner. the biggest acquisition in tech. exclusive with the ceo of nxp in just a moment. and after lots of leaks, it is official hewlett-packard also vying aruba networks $2.7 million when you back out the cash. a bit below the stock's close on friday. first up futures are mixed as we begin a new month of trading. china cut interest rates for the second time in just over three months. here in the u.s. february was a pretty nice win for the bulls. the nasdaq up more than 7%. its best month in three years. dow up 5.6. s&p, about 5.5, each posting its best february since '98.

interestingly, last february was also the best february since '98. so the pattern to the years has been pretty good for the second month. >> people take profits, then they come back and start buying unless the stocks get knocked down. candidly, i'm mesmerized. i have to say it right up front, becky quick, unbelievable three hours of warren buffett. i keep thinking about he's talking about the long term versus the short term. and february was great. it's just the kind of thing where he basically says look you've got to stay in. if you got out in january because january looked so good, you missed february. so just stop trading at over time. it was just a fabulous fabulous interview. it felt so great about owning stocks after that interview. and one of the things you really got was don't go in and out. you would have missed some month. >> absolutely. and talking about the economy, he says it's been 5 1/2 years. 2% real growth in his words, not all that bad. >> right. >> housing hasn't come back as quickly as he thought, but autos came back faster thaenn he

thought. >> yes, and he does own clayton homes. i just love this one. everyone has to read this note this weekend. the preachers of pessimism pralgds endlessly. i love the writing about america's problems. i've never seen one who wishes to emigrate. although i thought of a few for whom i would buy a one-way ticket. he's the master. brilliant. >> he really is. the in which he calls berkshire the gibraltar of american business. goes through all the business lines. it's essentially a treatise on the modern-day conglomerate and why berkshire is able to do things that others couldn't do. >> great using the balance sheet, what a couple dozen people in the actual main office. i was thinking about david when he just basically says this idea you build a conglomerate that you shrink to grow and it's been investment feed. >> you buy, you spin off. you buy, you spin off. >> but there are moments in this thing, there are very few people as candid as buffett. he says burlington northern

underperformed versus union pacific. he's not just saying that. he talked about how he blew the tesco investment. i mean this guy is just basically saying i am so not good. i bought -- i bought dexter for $440 million. i had to write it to zero. it belongs in the guinness book of records for the worst financial disaster because they got stock and they ended up with $5 billion. this is just masterful. >> yeah. and of course, a lot of focus on the letter in terms of his successor. >> right. >> 84 years old. >> munger. >> looking good on five cokes a day, had strawberry ice cream even this morning. that diet may be the new one to keep you going. >> interestingly, that munger is the one that mentioned these two, and they don't see each other's letters before it's published. they don't change anything. >> again, he did not tell us. >> my friends who are in the insurance industry he is the king.

if you take a look there's so much about insurance and how great the insurance business is and how the deals that he makes. no one wants to make the deals that he makes. and he gets the best return. he is responsible for the float. a lot of the exercise in the letter is explaining the float as his main advantage versus other investment managers. and this ajit j achltain, if he becomes the head of berkshire hathaway, i think he'll do fine. >> float's gone to $84 billion in 12 years. 12 years. it's doubled. >> staggering. >> that's the base of that earnings power. >> right. and i think that mr. jain is a competitor. i know that he is considered a shark in the business. he comes in he wants the whole deal. they talk about the size of these deals that he does that are just monstrous. a big insurance company might just say, listen i want you to reinsure all of our business. typically to be divided among

many reinsurers. and underlined throughout this letter is we've got the balance sheet, and a lot of that balance sheet comes from reinsurance. >> you want to go through some of the big investments? >> sure. >> let's do ibm. i like it he says. he likes the buybacks the move to social. he says one misconception is people think we don't like it when a stock we're buying goes down. >> well -- >> he bought more. and the fact is he did buy more when the stock went down. now, it is still trading, i believe, below his average purchase price, if i'm not mistaken, but he is extremely large shareholder there with over $11 billion position. >> right. now, i think it's important to remember he loves the buyback because it ups his stake by nature. i also feel -- i talked -- david had this great interview with the ceo. look, if they can pull off this transition, if they can become social mobile cloud security data analytics, then warren buffett's going to be right. if they can't pull it off, then it could be like the tesco investment that he made. >> then it's a shrink to grow. >> yeah that was a shrink.

>> yeah that's a shrink to shrink. it would be a shrink to grow. >> i think it's jump ball. i don't know if ibm's going to pull it off. that doesn't mean they're not. i'm just saying. >> they have in the past but it is not an easy task particularly given the competition ibm faces in various businesses. >> right. >> but his endorsement is not unimportant for that company. >> no it's very big. and remember, i have felt that if they didn't spend so much money in the buyback, maybe they could do a bigger acquisition a splonk something like that. not added but would very quickly change the mix which is what they have to do. ibm's been very humble. warren buffett -- these are really humble people. the reason i am saying that ibm may not pull it off is because ibm is not saying, listen, it's a slam dunk. they're saying anything but. so i feel like if they're reserved about it, i have to be. >> deere, he said faces several tough years ahead. >> something right up front. >> exxon confirmed their exit.

also called it one of the greatest investments in berkshire's history. >> but there are other ways -- one of the themes through the letters is that he finds new ways to deploy capital in a better way. people are buying deere, buying deere because he's buying it. he's basically saying i'm lowering numbers. deere, it doesn't matter it's a great manufacturer. you would not buy deere. he made the point over and over again, don't buy because i bought it. go buy an index fund. and i think that made sense because he did leave exxon. he did lose money in tesco. american express has been a terrible performer this year which is one of his big ones. so there are -- you know, he's saying, look my perspective is a 20 30-year perspective. if you're trying to gain me or -- he's not going to do that. i have to admit, american express, i am surprised this morning, again this costco deal goes to visa. >> yes. >> and that is a very bad thing for american express even though they'd say listen we're not going to give business away. 70 cents of their earnings power. >> you're still reeling from

that, frankly. >> would never have bought that stock for my trust. >> everybody was blindsided. >> never would have bought it. had no idea it was this big. i thought it was much smaller. and buffett wants to take a long-term view. they're buying back stock and that's great. there are issues when you lose a lot of your future. you basically are an america's best client the moment they do that. and this was bad. >> yeah. >> and i wish the company had been more forthcoming and saying don't worry, they're raising rates on small business. buffett's confidence in it makes me feel better but i would feel more confident had i known how important costco really is. >> visa will become the new credit card network. citi will be the issuer of the co-brand of credit cards. that amex deal goes back 16 years. >> in korea suddenly amex has got a foothold in korea. obviously american express felt they couldn't come to terms. this is one where a lot of

people feel wow, we didn't know how important it was, and double wow, why did you do it? >> we mentioned the macro viewbuffett. take a listen to this. >> it's gotten a lot better. and incidentally, 2% even 2% real growth is not at all bad. i mean if you think about it if population growth 1% and you have real growth of 2% that's 20% in a generation. >> he mentioned some average household income numbers. 100 and some odd thousand dollars. obviously, it's not equally as divided, but that got pushback this morning. >> right. i also thought it was great when he said our blue-collar borrowers for clayton homes turned out to be a lot better than some of the wealthier borrowers. there's a lot of theme throughout this about good underwriting discipline disciplined capital management. disciplined across all areas. and then pulling back the moment it's not disciplined. and i think that he has great

faith in the common man. and i know that's a term that sounds condescending. i don't mean that at all. there is an undercurrent about the great american worker and how that person is a very responsible individual. i don't know. i felt very good about america after reading this. maybe that's what he was trying to do in some ways. it's very hard not to feel better about america after you read this newsletter. when we come back the ceo of nxp semiconductor on his deal to buy free scale, biggest tech deal in the u.s. since facebook bought what's app about a year ago. he'll talk about hp buying aruba. the dow hasn't fallen in march since 2008. and it was down by 3 points that year in march. a lot more "squawk on the street" is back in a minute. ple a simple question: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs, who knows. umm... everyone has

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dutch chipmaker nxp semiconductor has agreed to acquire free scale for about $12 billion. kayla tausche is here along with the ceo of nxp. >> good morning. we're happy to have the ceo with us fresh off of the conference call this morning, talking to investors. an $11.8 billion deal one of the biggest ever in the semi space. i'm wondering how long did this take to come together? why did this happen now versus any point in the last few years? >> you know the real opportunity is with the progress that we've made over the last few years with our capital structure gave us the ability to

think about much more significant transactions to really bring together a true powerhouse in the industry. and so that's what allowed us to really be able to do this. >> a lot of the investor discussion this morning centered on synergies. you've called for $200 million in year one, $500 million after that. and then potentially revenue synergies down the line. how feasible are those targets to hit? >> so it's very clear, it doesn't require a lot of hard work. it's more support and g&a functions. it's not really anything that's significant, any program killing. it's really the ability to grow together and bring the fundamental core technology together. >> rick this is an amazing deal and the stock correctly is going up. one of the things i loved about it, you own the pay business. you really do. this is the auto business. i look at freescale from the motorola basically, the origins, they were the first transistor on the radio. this is about internet of things. it's about devices. together, what will the company look like and how will it dominate versus the rest of the

industry? >> so clearly we'll be the number one automotive semiconductor manufacturer. we'll bring a complimentary product portfolio together that will really make a difference with the automated driving in the future and driver assistance to make driving safer. but even on the other side we'll be able to bring our security and their processing capability to address the internet of things going forward. where we can drive a solution for our customers that's really very powerful and very safe. >> you also -- there's such a host of connectivity. i don't know if people understand the regular viewer even the semiconductor people because you know there was a semiconductor who was very negative on your stock, but you are the connectivity semiducter player. >> we are. and you know our focus has been looking at beyond smartphones and tablets, the opportunity for the connected world and bringing security to that. so that transactions can be safe. your i.d. can be protected, your wallet can be protected. so really the value for us is providing that security and the safety associated with it. >> the stock is up sharply, as

jim alluded to as a result of your cost synergy targets, i would argue, as much as $500 million. what about revenue synergy? >> it will be significant. it won't be for the first couple of years just because of the nature of the automotive design wins and some of the development of the internet of things. you go out a few years and it's an opportunity to increase the revenue by. >> the point of this deal is to be number one in the auto space. the combined company will have a 13.7% market share. but any time you talk about being number one in a market there are regulatory concerns. and thousand people are starting to wonder how much revenue will you have to sell to actually get this deal done? what's your stomach for that? >> so the only real issue that we have -- we believe we have a regulatory issue is is in the rf power amp business. and so combined we basically cover that market. so we believe that to be able to get the regulatory approval we'll have to sell our business. by selling our business we can do that before the closing so

that we can be in discussions and take advantage of that to facilitate the regulatory approval. >> you said on the call this morning you're already starting a process. you have a couple interested bidders. any price point you're expecting that to go for? >> it's too early to say. it's a relatively small part of our business. it's not a critical part of our secure connections activity. it's really more on the infrastructure side. so it really gives us the opportunity to really think about it. >> and do you need regulatory approval in china? >> we will. we will. and i think that's the reason we have to do something specifically on our high-performance rf business to be able to address that. >> 10.75% piece of paper that freescale has. it's still at a couple hundred million. can you just wipe that out tomorrow? >> they're actually planning to pay that down before the close. they've talked about paying that down in the past. over the next few quarters they'll be able to take care of that. >> they're going to need a shareholder vote creating one of the largest players in a

couple different areas. one always wonders given that possible somebody were to come over the top or make a bid for you. given this is a consolidating industry, i do wonder what your thoughts are. >> you know, for us, it's really about bringing the value for our customers and shareholders. we feel very comfortable that the value we can create the synergies and the ability to really address the customers with a very significant strategic bid will play out well. >> is there more deals to come in this industry do you believe? >> i think so. it's a consolidating industry when you think about the intellectual property requirements and the efforts associated with it and the large investments to be able to support that i think it's only natural that the industry continues to consolidate. >> just a quick note on your field, communications, which you dominate. i know there's a customer it's very difficult to talk about them. i'll mention the name apple. do you see the world going toward apple pay? do you see the world abandoning other ways, and can you get into a walmart with that? i mean some of these retailers are fighting. >> so you know we're the leader in mobile payments.

whatever form it takes, you know, we've actually announced the android pay in china, working in china aggressively to be able to address that. in the u.s. there are some retailers looking at other alternatives. i had a banker who told me he changed where his prescriptions were filled in new york city because the other organization accepted apple pay, and the up with he was using didn't. so as that happens, i think you'll see all the retailers really accept apple pay and move forward with it. >> a lot of tailwinds moving in your direction, rick no doubt about that. i'm wondering where freescale is concerned, 60% of that company right now owned by private equity sponsors. about 20%, i believe, of the combined company. do we have any reason to believe they won't just sell when this deal gets done? >> i don't think they will. they're really focused on the value opportunity and the opportunity to create value going forward. my understanding is they're excited about that. and so we clearly believe that it's a real combination that will make a difference and be a true powerhouse in the industry.

>> rick clemmer on a monday morning. when we come back cramer's mad dash the opening bell and a busy week with the jobs number on friday and a lot more. we're back in just a minute. woman: it's been a journey to get where i am. and i didn't get here alone. there were people who listened along the way. people who gave me options. kept me on track. and through it all my retirement never got left behind.

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cents shy of it. it's all about networking on the mobile platform. here it is jim. i ask you, it will deliver the next generation of converged campus solutions. >> well, you need wireless everywhere. and it's funny how pervasive -- we had mr. clemmer on. free freescale is about near-field communications. everyone wants to be untethered. what i ask you, david, where does this live within the whole new hewlett-packard? >> it will live in hewlett-packard enterprises, of course, the part of the company that will be run by meg whitman. she'll be chairman of both remember, but she'll be ceo of that. they will close this deal jim, prior to the split which will take place, let's call it november 1st, which is the beginning of their fiscal year. they hope to close this deal prior to that. and it will be part of hewlett-packard enter surprises. >> it is a proprietary technology. a lot of people are worried about the nonproprietary

technology. anything that brings hewlett-packard up the food chain of wireless of mobile of cloud, of connectivity as you heard from nxp, connectivity. this is about connectivity. higher value. >> enterprise networking needs and the like. of course, she complimented mr. chambers when we spoke to meg whitman last week. >> yes, she did. >> but this comes right at them in terms of networking. >> it sure does. i think that may the best person win. >> right. they're using their cash on hand. again, $2.7 billion, when you take out the $300 million in cash already in hand at aruban networks. >> this is ibm i was hoping would make these kinds of acquisitions, that would speed up the 25 to 27%, get it to 40% quicker. you always wonder do they worry about buffett not spending enough maybe they have to keep buying back stock instead of making a bolder move. these are companies that really are responding to many different coalitions. shareholders. >> we knew there was a window

for hp to make these kinds of deals prior to putting out separate financials for both businesses, really moving towards the complete split. then it becomes much more difficult to do a year. that's another reason. we'll watch hp stock in addition to aruban networks. we didn't even get to cortice. a lot more coming. "squawk on the street's" back right after this.

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you're watching "squawk on the street." live from the financial capital of the world. we'll get the opening bell in 60 seconds. as we kick off the month of march. a busy weekend, too, as buffett's letter china cut rates again. pmi there was not bad. the eurozone auto sales not bad once again. >> baltic freight up again, strarting to -- maybe it's leaving the station. i continue to think that the weight of accomplishments put in a bit of a bottle. aluminum doing well. keep track of the freight. it's a little better than expected in china. >> going to be a week full of data data. auto sales tomorrow. yellen. adp. jobs number on friday. a lot of people talking about the weather and the ports. maybe softening that number up. >> i think people -- look i own this restaurant.

i don't want to talk about it. but the foot traffic -- the foot traffic, it's so darn cold. the whole country. people aren't going out. just be aware the numbers may be a little damp after the previous number. >> there's the opening bell. a look at the s&p at the top of your screen. down here at the big board, sun life financial celebrating the 150th anniversary of his charter in canada. also at the nasdaq yahoo! celebrating its 20th anniversary. happy birthday to yahoo!. former chief sue decker on buffett's board, by the way, as we talk about berkshire. yeah. >> sue decker. god, remember tim cougle? >> i used -- did you speak to her almost every day. very smart. very smart analyst. good analytical mind. >> 20 years. >> it's going to be hard to beat lumber liquidators after the "60 minutes" piece last night.

>> formaldehyde very stark. lumber liquidators have been down in advance. people felt it was going to be bad but they didn't think it was going to be this bad. the impact after even not that great a quarter is what do we do? are people going to go there? remember, you can go to home depot. you don't have to go to lumber liquidators. >> it was interesting when they had guys in the factory saying that it's not what they said it was. >> it reminded me of a certain piece that was done by another network about the chicken. whether the chicken -- remember that? >> yes. >> i don't even want to go back to the company because it's not fair, but there was, without a doubt, a pause where you just said, you know what? i am not going to buy their product anymore. and that's what i think they worry about. the chinese, when i was talking, they were worried about chinese vitamins coming into this country. >> they have said that the company, quote, will vigorously challenge any false allegations,

we should make sure we say that. >> well absolutely. i mean the problem, of course is thatminutes" has a big audience. if you're sitting there and you didn't know all all the different hedge funds, you kind of woke up and said boy, this company was a once-great company. it was one of the great growth stocks of the previous year. >> it was. now, they did have the ceo -- i mean he did do an interview, and they showed him the behind-the-scenes footage that they had. >> formaldehyde -- >> look into it obviously. we'll see what the news is from lumber liquidators. this nxp is up over 13%, as we knew it would be. which, again speaks to why most likely we'll continue to see a nice beat of m&a. >> right. >> these accretive deals, even though this is highly levered, this company, nxp, we were talking during the break, we remember when it went public. and freescale almost went bankrupt after the lbo originally. >> right. and some of those guys are still under water. >> i think blackstone, they're

kind of break even. so to the point of the ceo earlier, they may want to hang in there. maybe now they're above. >> nxp, associate jack moore was reporting from action alerts spoke with mr. clemmer, they were growing three times the industry going into this. nxpi had a lot of doubters. and the company has steamrolled the doubters. good company. >> we didn't get to the health about $2 billion in cash jim. curious to get your take on what's going on here given how close you follow j&j. >> i think alex gorski does not want any piece of his business to not be number one. the war chest builds for j&j. they had $14 billion in cash coming in. you get another couple billion. could they do a giant acquisition? i think yes. >> they could do a giant acquisition any time they want. they're j&j. you think they may want to do

one. >> right. they have not made the gigantic $25 billion, $30 billion acquisition. could they do that? yes. the issue here is that gorski's got a lot of good things coming in the pipe for depression. he's got some fantastic drug coming, and i think that -- it's a huge, huge market. quettaket ketamine kind of euphoria and they have the possibility of a nonaddictive painkiller which is something that everybody has been seeking and no one's ever been able to develop, and i think they may have one. >> interesting. >> meantime jim, on a broader level, s&p has not been able to take out those december highs decisively. >> no. >> chicago pmi friday was lousy. spending today, even with gas prices, it's not that great. >> no. look, you know we're in a rotational mode where people going toward nasdaq and nasdaq for special situations like nxpi. no, we've been kind of stalled

here. a lot of good news has come out. we continually get retailers that are doing well within the confines of retail not doing that well. by the way warren buffett talking about the auto sales business being fantastic. we know ross stores was amazing last week. we know that kohl's is amazing. dillard's. it's just different places. we're used to having macy's be incredible. other guys catching up. i just say listen we're running in place here. we have some winners like an activist is a big winner. we know that apple's been a big winner. netflix, we haven't even discussed that. i'm on episode eight already. >> i'm on episode three. >> oh boy. >> you really binged. >> i binged big time. >> talk about the capital markets, though and their ability to reward at this point. you bring up activist. a $20 billion bond deal planned paid for allergan after the 8 plus billion in both converts and straight equities that they've already done. we're talking about two highly levered companies today, nxp and freescale being rewarded.

it is interesting, the time that we're in right now and the willingness of the debt markets to be, like okay. take it away and run. >> i think that we're so desperate. we want activist paper. i used to laugh that treasuries would never get to. but then again, would you prefer activist paper to italian paper? i would. >> you would? >> i think italian offers no reward. >> the risk/reward is probably better, yeah. >> right. now, look i've never told people to reach for yield. i do believe in the activist allergan deal. i think it's going to work. >> i do want to mention an activist settlement. you may recall he owned it. it didn't look like it was going to do much. then he decided to go for two directors. had he trouble with the governance at the spin with the publishing company, thut they've settled it. he didn't get any board seats. they'll be elected annually. that's the spin that will take place, let's call it midyear. special meet's going to be called by 20% of the outstanding

shares. if they have a shareholder rights plan it will expire after 135 days. and no super majority voting provision. so carl apparently gets some things that at least make him feel better about the corporate governance. what's more interesting, perhaps, you'll have an independent publishing of gannett, tribune. got "the new york times" news corp. and time inc. >> these guys will do it. i like this combination. i've been recommending it ever since -- well for a long time ever since larry kramer is running "usa today." we have it every morning. i think gannett, a great internet play a great print consolidator. lots of money to be made owning that stock. >> right. >> all right. dow's up 40 points. as we kick off march, let's get to mary tovrphompson on the floor. >> reporter: the nasdaq continuing its march to 5,000, right now 23 points away from

those levels today. what we're seeing is pretty much strength across board. weakness in utilities drug as well as energy stocks today. this as investors look ahead to friday's jobs report. that will be a focus this week. and in between we get data including the fed's beige book report to give us a sense of what's happening regionally. after today's data was a little disappointing with personal income, up pretty much in line with expectations. spending continues to be an issue as it declined more than expected despite those lower gasoline prices. but let's talk about the deals because we've seen them large and small. the largest being the deal between freescale and nxp. that is wrong. an $11 billion deal creating a giant in the semiconductor industry. then on the smaller scale, we have pacwest bancorp. the news of freescale is helping the semiconductor index. stocks higher across the board

in the wake of that deal. the semiconductor index now up just over 11%. that, too, is contributing to the nasdaq's 15-point gain. on the down side though we continue to watch energy as the markets remain sensitive to changes in the price of crude. which right now is down just about 52 cents. can you see the energy stocks lower as well. keep in mind that exxon mobil will be holding its investor day on wednesday. and this is important because the company is likely to give an update on what its capital expenditures will be for the year when it reports its full-year results, it didn't elaborate on that. they have been cutting capital expenditures for the last two years. we'll see if they take any more significant cuts to those during the investor day on wednesday. we also want to point out there's some news in the payments industry. most notably we've been talking about it this morning, costco tapping visa to be its exclusive network for its credit cards. citigroup will be the issuer. all of this replacing a six-year agreement that costco had with american express which was slammed initially when the news of that termination was

announced today. you can see modest gains there, but visa is the real winner on the back of this. at least its stock is. and then we want to point out that u.s. bank says it's working with samsung to provide a payment service for its credit card customers on that samsung galaxy phone. this, of course rivalry starts to heat up for apple pay. u.s. bancorp barely moving on that news. gannett, of course, david mentioned it carl icahn withdrawing his slate of nominees for the board there. you can see its stock up modestly there. the dow up 44 points. the nasdaq up 15. let's send it back to david. >> thanks very much mary. want to get back to warren buffett and some comments he made to becky quick involving something i had reported on previously of course. it's an issue that i think is an interesting one. perhaps it's not gotten as much focus because i wonder it will become something we see more of. that is namely a compensation structure for a nominee director that is different fromfrom the board of directors at the rest of the

company. but perhaps will be a way to actually nominate -- and this is an argument that certainly will be made by those doing the nominating -- directors who otherwise would not entertain taking a place on a public company board given all of the strictures associates ss associate with said board seat and somebody of a talent level where they would focus a lot of their attention on that company and therefore deserve to be compensated as a high level. i refer here to gm which, interestingly as i said, was something that becky asked mr. buffett about. now, it's something i reported on previously which is a group of hedge funds that control -- i think it's 31 million shares that have harry wilson out front. the gentleman, of course a restructuring expert who was also part of the team advising gm treasury sometime back who has been a longtime shareholder in gm. but would stand, of course to either earn 2% or 4% depending

on whether he is actually on the board of the appreciation in the shares owned by those hedge funds whom he would be their nominee. now, it's unclear whether approxified is going to follow and the permission he has to get, but that being said they may allow that to occur. they may continue to go ahead. and it's funny, when you talk to some hedge funds, they're very much in favor of the idea of this. whereas some institutions give it pause. here's what mr. buffett had to say. >> i totally disagree with the idea of putting somebody on the board who has an option on some other people's stock which is only good for two years. to have somebody sitting there in the boardroom who has a two-year horizon when they make money that goes to zero after that, it's just not the way to run a business. berkshire would not be where it

is today if we had had a bunch of directors over the years that are two-year time horizons on when they could make money on the stock. >> of course, many shareholders have less than two-year time horizons. in this case mr. wilson i have not had an opportunity to speak to him, but he did respond to becky and to me as well saying the whole underlying rationale of his candidacy is to help general motors build long-term strength. he points out, of course the fact that he was involved in the restructuring in 2009 that gave gm a new lease on life. he's been a shareholder since 2011 and he's also gone on to say that he's willing to take all of his compensation in stock and have it locked up for an extended period of time. i need to explore that a bit more in terms of what that means beyond obviously, the two and three-year provisions that would be part of an arrangement were he elected to the board of directors with these shareholders. i focused on this, jim, because

i think it's interesting as an issue. the incentive fee structure. we've seen it rarely in terms of these activist fights. dow has a couple with globe. hess removed it when -- elliott removed it from their directors when they won board sets at hess. i do wonder whether it's going to come around again because those in favor tell me, listen, you try to get somebody who we think would be a great director to actually take that on. >> nelson peltz, not of this ilk whatsoever. tries to get the best people on. has nominated some great people. has had great people and wants to be totally aligned with the board. not necessarily aligned with peltz. although there is obviously great synergy when you have a heinz ceo added to pepsico, he could be very very helpful, which is the case with pepsico. but that's not -- that's the opposite of general motors. >> yeah. >> the opposite. >> and buffett, of course also very much getting behind mary barra as ceo. >> yes.

>> let's get to rick santelli at the bond pits. rick, take it away. >> reporter: if you look at all maturities today we're a slight bit -- i mean we're talking one basis point higher on yields than we were friday. look at one day in a two-day of tens pretty much moving sideways. very good activity but sideways nonetheless. february 1st chart, so basically a one-month chart, can you clearly see that. this will be the beginning of the fourth week. so we've had 16 sessions. now, they've been in a closing yield range of 1.96 to 2.14. now, this isn't as tight as like in october, but it's pretty tight indeed. and if we look at a one-month chart of bund yields it's also pretty tight. and of course, the difference is their closing yield range on that chart you see, basically a whisker under 30 basis points up to 38. what defines this is important, isn't how much it's compressed, and it has, but the fact that it's riding an historical

all-time yields on a closing basis almost every session. if we look at year to date of the euro versus a dollar it's recently also in a compressed range. and its range is basically at 13-year lows. well actually since '03 so we could argue a little bit more. if we look at february 1st, one month of dollar/yen we're on the top pivot. if we look at the dollar index, we're also pretty much on top. and the area here is that even though it's compressed, it's compressing flip side of the euro. best level since september of 2003. mr. believe you're going to see a whole lot more for the euro when we start to see more details this thursday from the ecb and mario draghi and company regarding the quantitative easing purchases. so we're coiling these fx markets up. the real question is, will they pop or not? carl, back to you. >> all right, rick talk to you soon. rick santelli. meantime oil's having trouble getting out of the gate.

jackie deangelis is at the nymex. >> reporter: that's right. oil is lower on both sides of the atlantic. let's start with brent crude, down $1.47. on talks about iran and its nuclear program, a potential for a deal to be reached, we could see sanctions maybe eased and more exports coming out of that country. but also we're seeing more exports coming out of libya. so more oil in a market that's well supplied has us down. we are looking at wti right now, $49.17 $49.17. we did have the news of china's rate cut that sent the dollar near 11-year highs. and of course that's the dollar index. that is bad for crude as well. so that's putting pressure today. the next thing to watch, according to traders, in terms of the dollars, the ecb, we might get some more word from them on how they're going to deal with their crisis over there in terms of economic stimulus. that also could send crude lower in the coming days. i do want to talk about retail gas prices because we are seeing arbob take a little breather today.

but we saw gas prices, the average, $2.42 today. that's up from $2.30 a week ago. so a 12-cent spike in one week and traders are expecting retail prices to go higher from there. back to you. >> jackie thank you. when we come back shares of sonic trading near 52-week highs, up more than 50% in 12 months. we'll talk to the ceo of the restaurant chain. meantime, the dow is up almost 70 points. "squawk on the street" is back in a moment.

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lumber liquidators still haltingpending. "60 minutes" ran a piece basically alleging some factories mislabeled laminate. the company says it will challenge any false accusations. meantime, the dow is up 76. stock trading in jim in just a moment.

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this thing is 24/7 to make them for toyota bmw, it doesn't matter. harman, this is the play if you really like the auto. but congratulations again on that amazing deal for nxpi where they own the cash register and now some of the brains that goes right into harman. >> meantime, you've been mentioning some money going into big names. mcdonald's, a member of the $100 million for the first time since july. >> boeing terrific. it's almost as if there's a giant wave of cash coming into this market for the month of march. like maybe they held off or something, you get your tax return. this is a remarkable day. quite frankly, i can't find any news for disney. mcdonald's, they're having a meeting to turn around the company. boeing, no news. this is a big cap rally and it's very significant. >> some faltering momentum names, tesla is below 200 for only the second time since january. >> a lot of people talking about rivals coming in but nothing this year. i love tesla, the car. i do not like tesla, the stock. >> also numbers from china on

tesla at least that's being reported. >> who's that? >> warren capital. research. yeah, they do a lot of research on china. only ten imported units of the model "s" in 2015. ten. >> ten like five fingers? >> not scientific notation. >> 277 monthly average and 14.10. >> not really capturing the chinese market, would you say that? >> i would say that. >> on vacation. >> right. we know if they don't follow the same holiday schedule maybe they're on vacation for the chinese new year. whatever, i would have thought it was more than ten. frankly, at least double that. >> what's tonight on "mad," jim? >> randgold i'd like to know why gold isn't going up. he's the best in the gold business. and of course we'll analyze the freescale deal which is so exciting. >> we'll see you tonight. >> thank you so much carl. >> ism coming up at the top of the hour. don't go away. y back.

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new york stock exchange. buying going on. dow's up more than 80 points here along with oil to the down side as we digest a pretty good batch of data from around the world. china cutting rates, of course. the buffett letter over the weekend as the month of march begins. >> okay. let's get to our road map. the first one of the week. warren buffett speaking out this morning on everything from the economy to ibm and the future of berkshire hathaway. we'll bring you all the highlights. shares of sonic, the stock up more than 50% in the past six months. the ceo will join us for an interview. also ahead, "forbes" is out with its annual billionaires list. find out who made the cut. over to rick santelli. rick? >> reporter: well, construction pending, a bit light, but that's okay. we have ism, 52.9, that's a february read. and arguably within a smidge of what we were expecting, which was darn close to 53. if we look at how this fits in this is the lowest level at

52.9, going back to january of last year. so exactly one year and one month when it was 51.8. let's look through some of the internals. of course this week in particular, employment's going to take heightened awareness with adp and bureau of labor of statistics february report on friday. 51.4. that's down from 54.1. and if we look at what's going on with new orders, new orders are at 52.5 versus 52.9. construction down 1.1. down 1.1. thanks, nick, thanks, less cylieleslie. down 1.6, june of last year is your comp there. of course, we were expecting a positive number. and december's number for construction left unrevised at up 0.4. sara eisen, back to you. >> thank you rick. with the dow up almost 90 points, first trading day of the month, investors are still eyeing that nasdaq 5,000.

looks like we're inching ever closer. oil beginning the month in the red with brent down more than 2%. so as we kick off march, what can investors expect? joining us is fund strat advisers founder tom lee. tom, we talked to you a month ago after a disappointing january. you kept your optimism. we just had a tom lee-style month. are you still expecting double digits this year? >> yeah. i think -- i'm feeling a lot better after february. i'm sure a lot of investors are because we not only got better data but we saw the markets bounce nicely. and i think what's also been encouraging is the right groups are outperforming. utilities underperformed. cyclicals had a great month. growth stocks did quite well. you know -- >> you're feeling good. except for a lot of people are feeling good. sentiment is high. investors are pretty bullish. the vix is low. does that tell you that too many people are feeling bullish? is there any signs of exuberance and perhaps that means that the rally's not sustainable? >> you know i've seen the same data. it's just not matched with the

anecdotes. when we talk to clients institutional investors, they're still very skeptical. i've done a few presentations to investment advisers and they are still very nervous. so i don't get the sense people are that bullish. >> why are they nervous, tom? >> i think people still look at pe and say to themselves okay the market's not cheap. they look at europe and say the problems haven't gone away. there's still deflation risks out there. so i think in people's minds, the half empty is much greater than the half full is. >> for much of the past few years, the u.s. has outperformed. this year the outperformance is actually in europe. and you saw that in february big time. >> that's right. >> does that worry you about the u.s. relative to the rest of the world? do you just need to be investing where the stimulus is flowing? >> it's a good question sara. i think it's very bullish that europe's rallying because, you know, it makes sense. europe's currency weakened. it's underperformed. oil's a big boost there. so i would expect it to rally. and it has. and i think it doesn't mean that the u.s. won't rally.

i think this is a global equity rally this year. >> but hang on. i mean should we know at least owe some lip service to the fact that they're going to embark on massive qe of sovereign debt within the week? i mean that's an indication that actually europe isn't doing so well. surely if the ecb has to go through that process. there's some down side to that even if we dismiss it. >> yes. simon, that's right. and it's more than lip service because we know that it's going to have -- it's been very effective in the u.s. i would say that what we have to remember is european equities are a lot more like exporters, right? european companies are really multinationals. it's really sensing better growth in the u.s. in my opinion. so i think it makes sense that european equities are outperforming. i don't know what it means for corporate mean corporate bonds. >> we asked have you always been bullish? you said i wasn't born with cattle horns. this morning, the bull market turns 6 years old next monday if you recall march of '09, not a good month. only three other bull markets

out of 12 since world war ii have lasted this long. so is duration going to be a factor in when you stop being bullish? >> it's never marked the end of a bull market. if you look at those three precedent bull markets that lasted longer they all had a pre -- a precondition that marked the end. the two things were the long-term yield curve inverted. that's the 10 versus 30. still it's still 60 basis points, still positive. and is the other is investment spending as a percentage of gdp hit 27%. we're at 23% today. that's almost $600 billion of investment spending. so i think there's still longevity in this bull market. >> earnings are being revised lower, at least lower for 2015 versus where they have been. yes, we have a strong dollar. yes, we have lower oil prices but isn't there something beyond that in terms of the economic data coming in a little weaker than we saw at the end of last year? >> yeah, i think that if you look at the epicenter being oil and then industries tan general

sal tangential to it that's where receive even a lot of cuts. i know it sounds controversial, but i think there's two factors. one is that analysts haven't baked in the cost savings from lower oil for both consumer. cans and industrials, and it's about $100 billion savings. and the second is that cap ex this year is 5% above consensus and up 8% year over year. it's almost always associated with revenue growth for cyclicals, and estimates are much lower. so i think there's upside because of cap ex guidance and lower oil. >> so you're not worried about the softness in the data? today's consumption numbers were down for a second straight month. a lot of the data points have come in below where they were last year. >> i think it makes sense when you look at their softness but remember if there's a soft patch, it does also mean somewhat good news for the markets because i think it takes pressure off the fed to think about inflationary pressures. >> yeah. patient mode. >> correct.

>> are you worried at all about the fed removing that language and sparking a selloff in bonds, something we have not seen yet? >> i think the fed's been -- i think the fed's been watching the data very carefully. i think they've been very good at communicating. i think investors are starting to think it's more june. it would probably be positive if we're talking later than june. >> tom lee, always good to check in with you, especially on the beginning of the month with the dow up nearly 100 points and the nasdaq inch saysing closer to 5,000. okay we have breaking news on greece. let's get to michelle caruso-cabrera back at hq. >> it appears it is official. the negotiations are under way for the third greek bailout. this coming from the finance minister of spain. dow jones quotes him in pamplona. this should not be a surprise to everyone. we knew they were running out of money. the number may surprise everyone. $30 billion to $50 billion is

what the finance minister is saying. the number leaked last week was only $20 billion. do not confuse this with the round of negotiations that we just went through. those were negotiations about whether or not greece was going to get money from the last bailout that they were due, but they had never followed the rules enough in order to be able to get that money. this is money on top of that. so we will now go beyond $300 billion in assistance to greece if indeed they get this deal done. back to you. >> michelle thank you very much. michelle caruso-cabrera. when we come back the oracle of omaha spending three hours on "squawk," answering questions from everything about ibm to the succession plan. highlights on that. waiting to see what the news is as lumber liquidators is halted. and the nasdaq just got within seven points or so of 5,000. we're back in just a minute. . your friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families

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today could prove an historic day. we're closing in on nasdaq 5,000, as can you see. we'll keep you posted. the dow up over triple digits. meantime warren buffett spending three hours answering questions on "squawk." our becky quick is live in omaha with highlights. long morning for you, becky, but a great show. >> carl thank you so much. we did get the chance to sit down with warren buffett for three hours. and of course his conversation with us this morning follows us

that weekend release of his shareholders letter. that's his 50th shareholders letter. that's right guys 50 5-0, that he's written. this is the 50th anniversary. one of the longtime parlor games for watchers is who is going to succeed buffett as the ceo of the company eventually. and this time around he gave us a lot of different hints. a lot of tantalizing hints about what's out there. he spoke candidly and said that the board has one person in mind, and that person works inside the company. now, that got tongues wagging. if you look at the cover of the money and investing section of "the wall street journal," buffett successor, a jain & abel story. ajit jain and greg abel who runs berkshire hathaway energy. these two names were mentioned by charlie munger vice chairman of warren buffett this that letter. because those two were brought out and charlie said he thinks

either one of them would be great in the job, either one of them would have things they did greater than buffett himself, because of that tongues have been wagging, setting off a horse race. we asked buffett about that this morning. he said that is not the case. >> there's not a horse race. and that story comes from charlie saying that those two are world class, which they absolutely are. in fact, he said describing them as world class was probably an understatement. and i would totally agree with that. either one of those men could run just about any company you could name. it wouldn't just be berkshire. they are incredible managers. and we are lucky to have them. >> we also got the chance today to talk to buffett about a lot of things outside of berkshire including the headlines that we see in the news. and it seems like just about every day we've been talking about greece and the eu. michelle just talking about the latest negotiations that are taking place there. buffett actually had pretty sharp words for the greeks in these negotiations. he said, in fact if it were up to him, he would let the greeks

walk. here's why. >> look greece is exposed the weakness of the original concept. and theyed that you're going to link currency in lockstep among a large group of countries that have different fiscal policies different cultures different labor laws and everything it has a structural weakness to it. just imagine that we had a western hemisphere zone that we had linked ourselves to venezuela and you name it. it wouldn't work. >> we got the chance to ask buffett if he thinks the eu will still be around in 10 years, 20 years, in 50 years, and he said it would. he said he's just not sure it would be around in the same form. he imagines it would have to change over the time because it's not a strong enough union with enough things tying and binding them together. he also made the point that if you look back at the american constitution that itself has been amended plenty of times

over the last 200 years. so as he said things change over the course of time. he expects this will, too. carl? >> hey becky, one of the parts that i found most interesting is he didn't address in the shareholders letter some of the weakness in some of his investments, ibm, coca-cola. but you got at it with him during the interview. anything surprising that he said there about some of those underperforming stocks? >> well you know we knew that he was buying more shares of ibm. we got the chance to ask him just why what he thought about it. he did lay out a pretty strong case for why he thinks it's a powerful investment. he likes a lot of the stock buybacks that are coming from that. also talked a little bit about why he likes shares of deere. and sara one of the things that jumped out at me that at least surprised me a little bit, we asked him about exxon mobil. that is a position that the most recent s.e.c. filings didn't show berkshire having any position. before that they had owned about $4 billion worth of the stock. we weren't sure if that was because he had sold out of the stock entirely or if he was adding additional shares and was going to be able to amend those

filings later. turns out he did sell out of exxon mobil shares. saying exxon mobil is a very good company. he call it had a great company. but he just said that he liked that money to be spent somewhere else. he thinks he can do other things with it in the meantime. but that is one of the things that kind of surprised me. >> the advice to lebron james keep buying america. average cost he said you can't do much better than that, becky. >> that's right, simon. he's pleased with where things are going now. it was interesting. we talked about how growth has only been around 2%. he said that's still great growth for a country. obviously not what we're used to growing over recent decades. but 2% he said things are going well when he looks at the economy, he thinks that it will continue to do well from here. >> early start for you, but it was a great show this morning, becky. thank you very much. becky quick there from omaha. up next on the program, sonic tapping into the millennial generation investing a new technology in its restaurants. the company just reported an 11.5% increase in same-store sales.

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welcome back to "squawk on the street." i'm bertha coombs at the nasdaq market site where the nasdaq composite right now is just about three points away from nasdaq 5,000. just about 15 years after the index peaked just above that level. and this morning, it's definitely a big tech play with the big deal for nxp for freescale semiducter that $12 billion deal driving up chip stocks this morning. the philadelphia semiconductor index is up about 2%. and nxp is one of the biggest gainers here on the nasdaq. and you're seeing a lot of the chip stocks rise. overall, we've seen a modest increase or a fractional increase in a lot of different sectors here today. but it's definitely a big cap story.

and of course you can't tell a big cap story here at the nasdaq without apple. interestingly enough it is up right now over 1%. but it's still just shy of $130. guys, what's been very interesting is over the last week or so there have been days when apple hasn't been up and yet this market has been able to move forward. a lot of investors, a lot of traders coming. at this point it's just a momentum thing. they don't really see any kind of technical resistance for it to hit 5,000. but psychologically, they say this is kind of important since it has taken 15 years. back to you. >> definitely teasing us today bertha. thanks so much bertha coombs over at the nasdaq. we'll watch that. in the meantime as mcdonald's continues to lose sales and shed customers, not all fast food chains are seeing the same fallout. the nation's largest chain of drive-in restaurants, sonic, announcing its first-ever double-digit quarterly sales gains this morning. same-store sales up more than 11%. the company's stock has gained more than 6% at this hour.

joining us on set at post 9 is cliff hudson of course, the chairman and ceo at sonic. >> great to be with you, carl. >> that's a comp. 11 is a comp. >> it was a good winter for us for the quarter ended february 11.5% comp. as you said in our years as a company, the first time we've ever had a double-digit quarter. >> how much of that can you attribute that to gasoline? >> there's no doubt that that's a contributor. our average customer with income $75,000 or less probably has $215 a month in their pocket that they didn't have a year or two ago. there's no doubt that that's a contributor. yet at the same time our creators is working well, our prosecute motions are promotions are, whoing well. our media placement working well. so i think it's a combination of hitting on all cylinders with our business and then hitting some very good macro elements like mcdonald's struggles on the one hand and gasoline prices lower on the other. >> how much can you say about how much share you may have

taken from them or anyone else if. >> well a tiny share from them is a big share for us. and i suspect some of our competitors are experiencing the same thing. so as their sales have been flat or negative they are -- they're the 800-pound gorilla. so when their sales go negative there's a lot of gain for the rest of us. >> with the fast growth in chipotle, there is this notion out there that you have to be healthy and you have to show your ingredients and have a lot of transparency, but you sort of disproved that. sonic isn't exactly the picture of health. >> yeah. well, i think what we are is we're what our customers choose. so in other words, all our food is made to order. we don't make any of the food until the customer orders it. and because of that i mean another way of saying that there's only thing that we deliver to people and that is what they order. and we order it the way they make it. so i think with the younger customer, you could say it's health. i think a lot of it's authenticity. that they see it made when they go -- when we have a competitor that makes the food fresh on premises and the customer can see that, that's a big deal. but in our case the customer

knows that they can customize every single order. and i think that makes a difference. we've also brought along some products that i think would be perceived as somewhat healthier. a chicken sandwich that we rolled out in the last year. some smaller dogs as opposed to our footlong hot dog, the six-inch dog is believe it or not, a little healthier, all-beef product. >> that's hard to believe. >> yeah. >> it's a fascinating space at the moment. what did you think of the shake shack ipo? because they surged to a valuation basically more or less the same as you have but they've got 65 restaurants. you've got well over 3,000. >> yes. yeah. well, that is a fairly exceptional -- it doesn't hurt that shake shack started here. their base is here. and they have a strong awareness with the underwriters and with the investors. so this is something we've spent years overcoming because we don't have a strong presence in the northeast. so a lot of it with shake shack, no doubt speculation on where it's going to go and getting a pretty heavy valuation because

of that. >> what does it tell us about the space, though? what are we learning from you guys? >> i think what it does say, when you look at some of our competition, when you look at folks that don't have made-to-order food, don't have fresher products we do have real ice cream shakes and nice beef on your hamburgers and so on. if the product is -- has a fresher element, particularly from the standpoint our piece, and that is made to order, there is still space to move with customers that are looking for that. and if you don't have interesting new product news and the food's waiting for the customer already made when they get there and the customer's not -- it's coincidental to the process, the customer sees through that and you're not as popular. >> do you worry that we're in this peak burger period between shack and five guys and five napkin and everything else? >> well i don't worry about it because hamburgers are 17% of our sales. which is to say 83% of our sales come from things not hamburgers. so 30% of our sales are drinks.

10% is ice cream. 7% or 8% now -- well no pushing 10% with the growth 10% chicken. so we're getting good diversification on our menu and diversification across day parts. so i don't -- the answer is no i don't worry about that. >> can i ask you a question on labor real quickly? >> yeah. >> we watched walmart decide to raise wages for employees. are you starting to see any pressure on wages? >> well we have -- we have in fact, through the recession seen some. part of that earlier in the recession was a minimum wage increase. and so in fact we had to start diverting more of our revenues towards -- when minimum wage goes up, all wages go up. it has that effect across the board. so are we starting to -- are we seeing anything more recently with walmart announcement? not specifically. now, that doesn't mean we won't over time because i think it probably will have some broader impact, but we're not seeing it currently.

>> finally, you mentioned not big in the northeast. are you going to expand this way? >> well, we are. recently we announced our 45th state in which we started doing business, and that's rhode island. we can't put too many in rhode island. but it's nice to have the 45th state. >> it's like four sonics. >> that and montana. three stores and you're fully penetrated in the marketplace. so we are growing in new york massachusetts, as i said rhode island pennsylvania will probably have 25 stores. new jersey, something similar. so starting to grow in the region. >> i'll be watching the stock and the comps. thanks for coming in. >> yeah. good to be with you. thank you so much. also watching the nasdaq inching ever closer, a little more than two points away from 5,000. straight ahead, michael jordan joining the ranks of the world's billionaires this year according to "forbes." who else made the list? find out when we come back. and taking a look at the nasdaq once again, it's been more than 15 years since nasdaq 5,000. and now we are within three points of hitting that market

milestone. a tech milestone we're watching for you. "squawk on the street" is back in two. introducing preferred rewards from bank of america the new banking rewards program that rewards our customers, every day. you'll get things like rewards bonuses on credit cards... extra interest on a savings account... preferred pricing on merrill edge online trades and more... across your banking and investing get used to getting more. that's the power of more rewarding connections. that's preferred rewards from bank of america.

now with the xfinity tv go app, you can watch live tv anytime. it's never been easier with so many networks all in one place. get live tv whenever you want. the xfinity tv go app. now with live tv on the go. enjoy over wifi or on verizon wireless 4g lte. plus enjoy special savings when you purchase any new verizon wireless smartphone or tablet from comcast. visit comcast.com/wireless to learn more. welcome back. some breaking news. for the first time in 15 years, the nasdaq has hit 5,000. this is a level that it has cracked only seven times in its history. closed only two times above

5,000. you'll, of course, know 5048 is the classic all-time high from march of 2000. biggest gainer since then monster beverage keurig green mountain, tractor supply gilead sciences. this has been in the making for a while. and we'll see whether it holds. but not an insignificant deal that we've crossed that line. >> david was actually telling the story of how he remembered being at the highs of the nasdaq. >> march 10th i do remember that, 15 years ago. hard to imagine in some ways. interesting that yahoo! celebrates its 20th anniversary today, of course. that era certainly was one highlighted by the move up in market value of the likes of yahoo! and ebay. netscape for a time before it got acquired. and then the big deal of all, aol buying time warner and then the big whoosh. remember that one, simon, i guess you probably do don't you? >> i certainly do. >> from fromthat high of march 10th. >> everybody saying sit on your hands. the market will come back. >> they were right.

>> 15 years later. >> two biggest percentage winners are actually beverage companies. apple obviously in the top ten, but the beverage companies, monster and keurig. let's send it over to bertha at the nasdaq with a little more color on this major milestone. bertha? >> sara that's one of the things that's very interesting when you look at the makeup of the nasdaq composite. you no he back in 2000 the consumer-oriented stocks were maybe about five six, certainly less than 10%. now they make up more than 20%. granted, a lot of them are tech companies like an ebay like an amazon. but you do have those monsters on there and monster beverage and green mountain coffee keurig has certainly been one of the biggest gainers over the last couple of years. those stocks regularly at all-time highs. not to mention retailers like costco and ross stores. the discounter that really has been a juggernaut this year.

another element that is a bigger weighting within the nasdaq composite is health care which is now up to about 16%. a good majority of that is made up of biotechs. but you've also had some big health care companies now listing here. the biggest, of course being anthem, the large insurer formerly known as wellpoint. you also have walgreens, boot as lines which was formerly a retailer drugstore, but it too, is moving in a new direction. so it's really about the fact that you're seeing these companies that are much more sophisticated. their valuations are much bigger. they pay dividends, which is something that a lot of these companies didn't used to do. former sun co-founder scott mcneilly, i spoke with him on friday. and he was saying, you know we didn't pay dividends because we were a hardware company. we were building our companies back then. we didn't believe in paying dividends. we wanted to plow all of that cash back into the company. these days you get a hardware maker like apple that is in so

many businesses, it just mints cash even as it plows it back into the company, that cash horde continues to grow. it is quite a thing. and david, i can match your memory of yahoo! because i started as a reporter 15 years ago today as a reporter on this yahoo! finance webcast. i used to say about 13 people used to watch us because not that people had broadband speeds to be able to watch that in realtime during the day. >> 15 years goes by very fast. >> doesn't it? >> it does seem to. that period of time typified by so many companies that really didn't even have an earnings for the pe ratio. and their earnings was far higher than anything we're seeing today. hundreds of companies going bankrupt to continue to fund this hope for growth then

eventual earnings. and when time finally ran out on them, they ran out of time and that was that. >> that's the big reason why we were at 5048 and then in a year, we were down 50%. and then in 2002 you'll recall 1114 was where the nasdaq hit. from 5048 to 1114 in two years, that's pain. >> and that's why everybody's sort of renewing this discussion, is it a bubble? but obviously we hear from a lot of people including those pe multiples that this time is very different. you mentioned 5048. the all-time trading high in terms of an intraday was 5132. so wile while we're not at record highs, we are at that significant 5,000 level. what was the pe multiple at the nasdaq nasdaq? like 100? >> somewhere in there. >> remember how quickly we got there as well. this has been a 15-year run from those lows in '02 to where we are right now as opposed to -- we had what almost 100% in '98? >> 12 months leading up to the prior high it was 110% gain.

in 12 months -- in the past 12 months, we've done what, 15%? so basically one-seventh of what that run-up was like. it was a torrid time. >> it was a fever. you just needed to know that the tech company that was ipo, you'll recall this, the making of this network. you knew the name and you bought in you knew you were going to make money. not just as it came out of the gates with an ipo, but? the subsequent months and weeks it would continue. >> it was feverish. if something would be added to the s&p 500 index, it would go up 30%. if something announced a stock split, it would go up as you say, ipos were almost always gold until it finally shifted. no could really point to the one thing that occurred except we just finally sort of passed some point of no return even though there hadn't been returns on these potential companies for some time in terms of their return on equity or return on capital and shareholders. >> bertha mentioned sort of the multilayered fabric that is the nasdaq today. it is beverages and consumer products, tech and biotech.

a lot of this has been driven by m&a which is the number two sector behind health care at $47 billion. things like hp today, aruba, and freescale not hurting, hasn't surfaced health care yet year to date, but it's getting close. gap is narrowing. >> in terms of the makeup looks like only a few names remain on the top ten list in terms of today's and last time's, talking about names like microsoft, intel and cisco. i guess oracle would have been there but shifted back to the knock new york stock exchange back in 2013. >> these amazing networking models. let's bring in jon fortt who's in barcelona for the mobile world congress. jon, what's your take on nasdaq 5,000? >> reporter: well, simon, i remember well the last time the nasdaq was at 5,000. i was a pretty brand-new tech reporter in silicon valley had only been reporting on tech for

about a year and a half, two years. they had given me a couple companies that were on the brink of maybe not doing so well because i was new. those two companies were adobe systems and apple. if you look at nasdaq 5,000 this time around apple, obviously, is in a completely different position. i mean back then steve jobs was just announcing in early 2000 that he was taking the interim away from his ceo title. that was the beginning of of course, an historic run that let us to where we are now, where apple's weighting in the nasdaq is amazing. and it krblted significantly to this run to 5,000. and of course the look in silicon valley is entirely different. it's not just the hype about the internet, which remember was only about 5 years old at the time in its modern consumer form, the web browser itself was just really born in 1994. this time it's kind of reinvented itself yet again on strength, on the backs of your googles, your apples your facebooks. i mean there's really only one of each but those kinds of

companies redefining the internet space at a time when a lot of people figured the u.s. might be kind of out of the game. remember, in between 2000 and now, it looked like europe was going to be at the forefront of the mobile revolution. the gsm network in europe was huge. now the talk is all about those companies i just mentioned, apple, google facebook creating the platforms for this next mobile wave. and they are clearly just looking at those companies to lead. and europe and other countries just looking to kind of catch the wave and maybe have a bigger role in what's next guys. >> interesting. apple, at least for this year to date, jon, on the nasdaq 100 is the 11th best performing component. it's superseded by electronic arts and by amazon. of course the best one of the year by far has been netflix, up 40% since the beginning of the year. nasdaq has crossed 5,000 for the first time in 15 years.

we'll get a lot more on this after a short break.

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we have just seen the nasdaq hit 5,000, first time in 15 years. pulling back a few points here. but obviously a major milestone for technology and for the index overall. art cashen joins us here from the floor, of course on all of these major market milestones. i guess there's no nasdaq 5,000 hat for you. >> no we only do the dow hats. >> seriously, though this is psychologically important. a lot has changed. nasdaq then, nasdaq now. >> completely. back then it was an almost religious experience. people just believed things were going to go. they were talking about not earnings but eyeballs. how many eyeballs can you get? and remarkably it was not unlike other boons that we have had. the railroad boom the same way. they were looking for capacity

and trying to build workloads along the way, and that's what happened with the internet. but it got completely out of hand. people started talking about -- well, we had pet stores that were worth far more than anything around. we had travel agencies that were worth more than all the airlines in the world combined. things got to an extreme. and that's why i say, it was almost like a religious experience. >> do you see any signs of the overexuberance in today's market? we should mention that the dow is up now more than 100 points after that strong february. the s&p 500 also up nicely continuing this run in this bull market. >> well, you're getting a big benefit from a lot of the blue chips. you know visa disney et cetera. they're putting more than half of this rally together. as to where is the froth now, i don't think the froth is in the aftermarket. the froth is in the venture capital markets where you see companies that have little or no earnings getting investments that value the overall pot at

$20 billion and $25 billion. i think that's a little frothy. and that becomes somewhat reminiscent of 1998, 1999. not quite 2000. >> mark cougenuban has said the same thing. but at least people ostensibly know what they're doing. it's not a retail fenn on nan? >> i'm with you 1,000%, but i'm worried it's spilling over into the ipo market. and if they begin to absolutely without question accept those valuations and go for the pricing on -- you know i prefer the discipline of crowds. you get everybody to decide no i'm not going to put my money in there, that's when markets work efficiently. when people all buy into the same idea that's when you have the first nasdaq 5,000. >> they should be trading to a certain extent some of these veb venture -- i mean these companies should be trading on the public company comps to the extent of your point. >> absolutely.

that's where you want to see these valuations begin. i'll know better when i see the next couple of ipos. do they live up to the venture capital hype or do they come back down to earth a little bit? >> how much of it is about not just today but the last few years in this climb toward 5,000. central bank liquidity over the weekend, chibna cut interest rates. bill gross out with his outlook talking about the dangers of central banks and negative interest rates. >> there's no question this is not your father's economy, okay? the world is completely different. and they have raised asset values. we'll hear at the end of the week from mario draghi how he plans to go about things. it's very difficult for me to imagine the fed being able to begin to raise rates when everybody else is lowering them. particularly if you look at what the dollar is doing and how it affects the earnings of certain multinational multinationals. >> we don't have the conversation anymore about the

fed having inflated the equity markets, do we? the economy or the earnings seem to come behind that and backstop it in a much more solid way. it's not a common conversation like it used to be. >> no but part of that is mechanical. there is a financial reengineering going on. that ibm, for example, has lower revenues than five years ago. it bought so many of its shares back, and it's able to do that because rates are still very low. >> art good to see you. >> my pleasure. >> art cashin here at post 9. let's get over to dominic chu. >> along the lines of that conversation with art, we want to look at some of the big names driving at least the year-to-date gains in the nasdaq composite. now, many of the companies in the nasdaq composite are smaller, 20 30 $50 million tech, biotech, whatever type of companies out there. you may or may not know them. but here are the leading gainers for the nasdaq 100. the larger caps the brand names that many companies maybe our viewers know here.

netflix shares are up close to 40% year to date. a huge move higher. then you look at vimpelcom, monster beverage and avago. we remember how excessive they were from a price-to-earnings standpoint back then. these do trade at a premium to the market but maybe not as much as some of the ones used to back in 2000. netflix, for one trades about 110 times, trailing earnings. then you look at netflix, 110 times. maybe a monster beverage at 50 times earnings. again, sara interesting that yes, we still have premiums to the overall market for these big cap drivers, but they're not nearly as large as they were back in 2000 sara. back over to you guys. >> and the nasdaq to your point, dom is still in the low 20s in terms of price multiple evaluationvalue valuation. many of the names are on the

"boshz "forbes" annual billionaire list. while we're on this conversation, carrie about the nasdaq 5,000, how many newly minted tech billionaires were there on this list? >> newly minted tech billionaires, dozens of them. actually, what i find to be interesting is the conversation you've been having about the nasdaq companies doing so well. we have some newly minted beverage billionaires. so the two guys behind monster beverage, they're both new on the list this year. you mentioned netflix, rita hastings is new on the list this year. you also mentioned walgreens. there's an italian gentleman who is the ceo of the company. he's on the list. he's been on there for a while, but he's much richer than he was before. so a lot of the nontech names, actually, on the nasdaq have minted billionaires. >> that is interesting. and i know we hit the 7 trillion mark in terms of how much the world's billionaires are actually work. is that a factor of the fact that we've seen the stock market go up for another year in a row?

>> yes. i mean it's a combination. so we have billionaires than ever before on the list. we have 1826 up from 1645 a year ago. so there's just a lot more people. ago. so there's a lot more people. a lot of them are -- average net worth for the billionaires is slightly lower than a year ago. but if you look at some of these names that i've been mentioning, obviously they're driving the 7 trillion net worth higher. >> why isn't vladimir putin at the top of your list? >> can you help me do the research on his net worth? i would love to get your help. >> it's not something i do but then i don't work for the forbes billionaire list. you don't know how much gas stock he owns. >> right. right. there's a lot -- if it was clear how much he owned in various public companies, there's not a lot of great disclosure where putin has stocks in his country. if we knew how much he was

worth, we would put him on the list. >> according to reports, he would be in the top 15. >> who knows. lots of people throw around huge numbers. there's no disclosure on what he raemly owns. >> two other things i thought were interesting, one, the currency markets actually play add role. and a record number of women actually made the billionaires list. but still a pretty small percentage. >> yeah, russia lost a lot of billionaires. there were only 88 this year. and then on the women, yeah, 197 up from 172 last year. still of that group, only 29 are self-made women. so a lot of them are billionaires thanks to their fathers or husbands who left the fortune to the daughters or wives. >> we see the dow up 112 and the nasdaq around 5,000. thanks for joining us. >> thanks for having me.

>> two stand out stocks of february. price line and its smaller rival trip advisor. adding incidentally about $11 billion to the market cap of pcln alone. what happens now? we're in march. michael ole sopson is a senior research analyst. >> good morning. >> what happened to these two stocks during the course of last month? bovt of them obviously reported earnings. >> there was a lot of skepticism going into the reports. a lot of it was tied to concerns around europe travel trends. they actually improved a little bit during the q4 report. if you look at expectations going forward, there's no sign of seeing any declining in the key metrics we look at. so given each of them have a pretty significant exposure to europe. that kind of concern being

alleviated certainly helped. >> interesting. last year had not been very kind to this industry overall in terms of the stock market performance. you also have a survey out. >> we did a survey with 5,000 consumers. what we found is that the monday at theization of trip advisor is a lot lower than what it could be over time. a lot of people go to trip advisor just to window shop but they don't actually initiate a booking on the site. younger generations are very interested in actually also initiating a booking when becomes a revenue-generating event for trip advisor. we see that playing out over the next few years. >> you know, michael, you're joining us on a historic day here on cnbc the nasdaq has hit 5,000. what do you think will work best

moveing forward from here? >> well, the space that i cover is a combination of digital media, online travel skprks video games. and i look for things that have a lot of secular growth trends. when i look at our space, i think digital media and certainly online travel have a lot of secular growth themes. we look specifically at online travel, for example, only about, you know 20% of online travel is booked online outside of the u.s. and europe. so there's a lot of rest of world type of online travel bookings that are going to benefit, price line trip advisor, ex-paid ya and others. things of that nature, that would be companies like aclami e et cetera. >> michael olson there from piper jeffrey.

few points below at the moment. let's get to chicago. hey, rick. >> good morning, carl. i'd like to welcome our special guest steve lavigne, really quite a remarkable professional regarding batteries and battery technology. on a day where we're all celebrating a retake of 5,000, much technology yutss batteries. so steve, welcome. i guess let's start right at the main topic. no killer breakthrough apps and many don't foresee those any time soon. can you state your case sir? >> yeah. so there is a huge effort right now to create the super battery. and i've just spent two years looking at one lab out in chicago that's attempting to make the breakthrough. there's reason for skepticism. i go through this in the book. but the stakes are so high in

terms of geo politics wealth minting billionaires and the profit's so big that it's worth continuing the quest. >> you know, in your book, you talk about the gentleman from china who was so optimist, inc. and thought the task would be easily accomplished. yet he left with his tail between his legs so to speak in talking about the 10,000 credit towards batteries with 2020 in china. can you build on the notion of why he was disappointed? >> this is the chinese minister of science and technology. and in 2009 2010 at the same time that president obama announced we're going to put a million electric cars on the road, he did too. he had great hopes for doing so. but he like a lot of people

discovered that it's a lot harder than it looks. it's not like inventing a better silicon wafer. that's child's play compared with making a super battery. that's what the book is about. this is the description of how it really happens, not only in the lab with the sients but also getting the manufacturing right, getting the silicon valley quotient correct too. >> quickly have americans gotten a good return on their investment as the government trying to ork straight a breakthrough in technology? >> yes, it has. look at tesla motors. they have validated the electric car and its stock is -- >> high stock price doesn't validate a breakthrough on a battery. we're out of time. i'm definitely going to bring you back. we're going to go back now to the gang at "squawk." thank you for taking the time, sir.

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