>> well, i think there's -- the color is going to be interesting. and given this giant transaction that's happened, which is a response to the dominance these platforms have had. it will be really interesting to hear how people respond and what analysts will ask those questions. >> a busy week. thank you guys for joining us on "closing bell." "fast money" begins now. >> "fast money" starts right now. live from the nasdaq market site overlooking new york's times square. i'm scott wapner. traders on the desk tonight. tim seymour, karen fine he wereman, dan nathan and guy adami. legendary investor bill miller in earlier today saying one stock is right for an activist. and the dollar did something that made dennis gartman excited. and 2000 etfs right now. buying the right one.

first, we start with tech's moment of truth. 35% of the nasdaq 100 reports earnings this week, and hitting a new all time high today. names like google, amazon hitting all-time highs as well. tech up 12% as we head into the thick of the big reports. is it too late to buy tech? i begin with my buddy, guy adami. >> hey, pal. first of all, scott, great to have you back. love it when you're here. thanks for filling in. next, is it too late? a name like microsoft, not too late. dan is in my grill now. at 19 times forward earnings, given the quarter they have put up, and the growth they continue to see. the fact we're above 99 highs, 1999 highs, at 19 times forward earnings, i think a justified multiple for them is closer to 22. you slap a 22 on that and get into 71 bucks, the price target now that everybody seemed to

ra ratchet up. >> i'm not going to get in your grill. where were you? you had plenty of time to buy it. one point about the nasdaq 100. apple, microsoft, facebook, google, and amazon. they make up almost 50% of the weight of the nasdaq 100. they are up almost as much as the nasdaq 100 is up in just cap market cap terms. this is a pretty narrow rally, i guess, is the point i'm trying to make. and people are crowded in -- >> you could have made that argument all of a year ago when it was the fang stocks. >> right. >> the breadth of the rally. >> now that we're back at highs and people are trying to make comparisons to what it was like in 2000, what it was like in 2007. we had a very narrow rally. >> what i would say -- what's interesting about this, valuation stocks and you've got total multiple euphoria or momentum stocks rallying here. amazon is the ultimate example. no one believes amazon can do

any wrong and is worth whatever number you want to put on it. i don't believe that and at some point we have gotten to a point where amazon has priced in an more must amount. and what's interesting, you've got microsoft trading at, you know, 18, 19 times, which is considered roughly expensive for it. yet again, relative to some of the other players in the nasdaq that are go-go, google is the place where you've got everything. a valuation, an argument, businesses that have not been monetized. i think there is a potential on thursday for amazon to really take all these guys back. >> so you go to a good place. and let's go there with karen. let's say apple, amazon, alphabet, twitter, all reporting this week. which would you be a buyer of, which would you be of a seller of? >> i own google and pretty good size, facebook in pretty good size. they should be at all-time highs. they're way higher growth companies than the market multiple. i don't love to buy a stock that's traded up so much in front of earnings, but i feel like to sell it, because of that

and hope to buy it back later, cheaper, just doesn't make sense to me. >> what about the argument that dan brings forth that it's the breadth of the tech rally is somewhat narrow? >> maybe not as narrow as the fangs. but not all that far. >> i agree with tim on a lot, actually. the amazon valuation, i can't get comfortable with. the facebook valuation. the google valuation, i think is very good value here. >> but my point is this. five stocks making up all the performance. it means a lot of stocks in that index of 100, 110 stocks not acting particularly well. as i look at as far as trading is concerned. so to me, you've had a big group within the technology sector, smukterror, certainly listen up a lot of valuations there. overall, not seeing particularly fantastic results. we know that pc supply chain is weak and we know the smartphone

supply chain is starting to weaken. >> what are you saying, short -- >> i'm not saying short anything. i almost agree with guy, you have a situation with microsoft, trading at 19 times. amazon and that sort of thing is a little different. to me, even if you want to look at amazon, 40 times next year, that's what bill miller was saying to looking at. is not crazy first stock growing sales 30% a year. but i can't buy it here. >> i think what we have seen out of the tech names, and so amazon may be the extreme example, the valuations we're at least attracted to. every one of these companies, including netflix, is validating a model that allowed them to trade at a multiple they didn't deserve. and they're growing into those multiples. the question now, is that multiple fair. and i don't think it is in the case of netflix. those numbers don't change that for me. i think you have to assess each of these companies. look at their ability to generate free cash flow and how much of this is strategic and how much is really them delivering on the expectation right now. >> so you can make the argument, like you just have, that, you know, it's concerning that the

sort of breadth -- are you saying it's right for a pullback as a result? >> intel bought al tara, a company for 17 times sales and then broadcom. and we're seeing the soft bank deal that was 30 times sales. we're seeing the mega smukter deals. and valuations we have never seen. i'm just telling you, put it all together and at some point when the rally is as narrow as it is right now, when everyone heads for the door at the same time, that's when you get the situation we had in 2000 and 2007. i don't know when it is. >> as these things have been going higher, are you now -- are you changing your tune? >> listen, i've always been in the mood that i think as we get into a political situation that is a little bit more predictable, that the market probably trades up in the -- guy, get in here. help me out here, brother. >> i'm enjoying the conversation. >> pal. >> go, pal. >> there are -- look at a name like adobe. that happens to be a $55 billion

market cap company that has had a tremendous run. so, yes, it's probably been narrow in terms of the scope of the move. but there are the companies that are participating. what we didn't mention is, one of the other reasons these names have been on fire is the company like salesforce rattled off a list of 10 to 15 names they could potentially be interested in. when money is as cheap as it is, where you have three pretty major deals, you can understand why maybe in terms of historic valuations are expensive. but in terms of where we are right now, maybe not so much -- >> did anybody buy anything today in the market? >> i didn't. but did you see that $1 billion netflix debt deal? i mean, they could just practically print money. >> they have to print money. they told us last week, they actually have commitments to pay $14 billion for original content. that's one of the things i know we're talking about, who is next, disney -- one of the things i want to say, if you think back in disney, the way they have bought content. ten years ago they paid 7.5 for pixar and lucas.

that's the equivalent to what netflix has admitted to paying for not franchises. what i'm saying is that some guys are really good at it, and netflix may be missing away money right now. >> that last quarter, even you would admit, the international growth everybody is saying is buying actually seems to have resurrected itself. the numbers they put up internationally were staggering. >> 30%, what they didn't have. what they didn't get the prior two quarters. >> yes. but everybody thought the numbers would continue to deteriorate. say what you want about reed hastings. but for a couple times over the last eight years, he's done everything right. >> we haven't even talked about apple which reports after the belle tomorrow. what's the expectation for a stock that has gotten going again and in a big way? >> the expectation is very different, obviously, than it was for the last quarter. in other words, suddenly people are saying -- these same people are not saying the iphone 7 refresh was going to do anything. we have momentum. this has not been about samsung.

i don't think samsung is apple's primary competitor. so ultimately, apple gets back to this argument. this is a decent valuation. a high free cash flow. i believe apple is slowly getting into the services business. meanwhile, their core business is getting you up along the way. is the stock fairly priced? i would be very nutd ral and wouldn't change my view. i want to own a little bit of apple, wouldn't add to it. >> i know you have thoughts on this one. >> i do. i think their services as they stand right now, it's in the low teens, percentage of their revenues here. >> that's exciting. >> it's -- >> the growth on a small base. >> it's -- right. you and i are on agreement like that. off a small base, not growing at triple digits. to me, kind of frustrating. i think the goldman report last week, when they're talking about the potential for apple prime, bundling services. that's interesting to me. that speaks to their ecosystem. they have to move towards that. it's been my view that services has not been in their dna. they have not done a fantastic job. you go back and look at icloud, you look at apple music.

their inability to have a video streaming service is a real problem. >> the stock doesn't need services. you have to believe in the future of services and ability to monetize it. and look at all these other companies we're talking about, especially on microsoft or guys moving from core business into an annuity-style business. we cut them a lot of slack. apple is not hurting you along the way. >> amazon launched this echo. in the home. apple does not have anything in the home. and their -- it's about as dumb an assistant as it gets. you bundle these services together. bundle video -- >> walt's -- you know -- >> do you think they'll look at time warner? >> i think we know they did -- looked at time warner and probably should have -- they probably should have done it. they really wanted content. >> i'm a big believer in symmetry. if you go back to last november, last year this time, the stock trading at 123, a very good feeling that's what you're going to see when they report this

week, up to 123 and talk about it when it gets there. >> look at a home kit. >> okay. >> we can talk about that later. >> in your grill. >> trying to get into your grill. you know, we've got to get his grill. >> we learned something important tonight on this desk. >> what's that? >> guy is into symmetry. >> huge symmetry fan. coming up, check out shares of visa. we hear from the latest -- we'll hear the latest later in the hour. >> legendary investor, bill millering . dollar and oil rallying together. how long can it last? dennis gartman weighs in. "fast" is back after this.

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welcome back to "fast money." earlier today, i spoke to legendary investor, bill miller, about his stake in twitter and that kicks off our top trades. i asked him if the social giant needs an activist intervention. take a listen to his answer. >> i do. i think an activist, somebody like carl icahn, can make a difference with respect to being on the board and new ceo. that kind of thing. >> you've done a lot in your career. maybe it's time for that. >> no, no, not me. >> look, i asked carl about this

when i was on our show. >> no interest. >> last week. i don't think so. >> what is he going to do? bill miller said it on your program today. he said, listen, it's kind of a joke this guy is a ceo of what companies where the stocks are acting the way they are. >> he said it was ridiculous. >> it's more of a problem with the board, right? remember when they were looking to replace and said they wouldn't consider a two-party system or whatever the heck it was. and then the stock went down 22%. looks like there were there was a bumbled process. the other take-away i had from his conversation of very unique property. we know that smacht has is looking for a 24 public million value. may come in q 1, 2017. i look and say they're not growing a heck of a lot. >> he said he could do a netflix thing, charge $1 billion -- $1 a month. >> how many are real accounts?

>> hard to control. >> remember there was talk about facebook charging -- not easy to go from zero to anything to charge people. and the disaster could be you decide to charge people -- a month -- >> netflix a couple years ago. >> go from 300 million potential users, only 25 to 30 million are paying a month. that 30 million revenue would be disaster in terms of the pr. it would have the opposite. >> the bigger question is, if everybody knows how valuable and intrinsically valuable and unique this property is, what's it taking? and so ultimately, gets to a place. think about what bob peck says. you get to a -- this is a depreciating asset. at some point, instagram and snapchat are owning this for lunch. and we know $11 billion isn't that much relative to the valuations. as a guy long the stock, i'm very puzzled. and part of it has to be the sea sweep. this is a company despite -- universally accepted cannot monetize and find a deal. >> are you concerned there were -- seemed to be a real

process, and those three players didn't have an interest? what did they see? >> they had an interest, but they quickly backed off once they, you know, reassessed. >> the shareholders want to know -- >> plus the stock. look where the stock went. >> for optics as anything. jack dorsey versus the founders of the company who want to see cash. got to go through the motions and look like all options. i think he is doing that. but to say they really went out and shot themselves, and why wouldn't you -- if you got a free chance to kick the tires at twitter. sure, i'll look at their books. why wouldn't they? i'm not sure this was a proper sales effort. i think this was a chance to apiece insurgency within, and a chance to show that at least the board is doing something with a board that's got a lot of -- >> are you long the stock for any reason, other than a transaction? >> i'm long the stock because i think the stock is cheap relative to its intrinsic value. i'm not in it for m & a. we know m & a makes the stock a 23, $24 stock. my average price in the stock is higher than that.

i don't -- you know, that is -- i could have gotten that two weeks ago. i stayed because i think the stock is worth -- >> bill miller told anthony noto, the cfo, dorsey needs to make up his mind. it's ridiculous -- >> the part time ceo, i get it as well. not having a deal might be the best thing that happens to twitter in the long run. if they do figure it out, in my opinion, i think they're worth a lot more than $25 a share. >> can we trade the stock quickly? i don't think anybody expects big numbers when they report thursday. obviously, it has a lot of really good support in the mid teens, okay? so if they don't put up a big number, don't show monetization, don't show their ability to monetize in an environment with these debates, their new nfl deal, people are going to sell it right back down there and then you'll have a shot -- >> in jeopardy of going back to 14. >> yeah. but to be very frank, i think with an enterprise value of 8, $9 billion, some of these people who took a look at the books say, yes. >> when they come back -- yeah, the stock price continues to go down. >> i don't know, if it's down 20% from here, it's $11 billion

right now. >> all right. let's move to the biggest deal of the year. at&t buying time warner for $85 billion. here's what the ceo of t-mobile said about that merger earlier on "squawk on the street." >> you don't usually always have to own and control and use your balance sheet. so i can certainly do a lot of what they do. certainly dish has tremendous licensing and capabilities. or maybe it will be somewhere in between. but i find this, david, highly exciting from a t-mobile standpoint. they're going to be very distracted. well, first of all, they already donate 50% of all my customer growth. they're going to be even more distracted and focused on this. >> all right. so is the deal just a distraction, like john ledger said, or could t-mobile soon find itself in a bidding war? karen. >> i think it is more of a distraction. i get such a kick out of him. >> is that -- that he's wearing? >> could be. the picking off -- >> merry go round?

>> that makes sense to me. here's an opportunity for him to, you know -- but i don't know. i can't see big m & e. >> it's not a cheap stock. >> it's not. >> 27 times earnings. i've got to tell you something. it was a good quarter, wasn't up 10% or 9.5% good quarter like it was today. so i hear what everybody is saying. if you really look at the numbers, it was a good enough quarter to have it up a couple percent, not 9.5 to 10%. >> there's some short interest in the stock. people think they cannot compete. people also put some type of an m & a premium and once it came out, i think the sentiment isn't very good. a third quarter beat. gave good guidance, yet a service -- revenue service-based beat and i think you have a company that actually is showing they can take some market share. so i actually think these were great numbers. and i think that alone is a reason to own this stock. in fact, i would say the street is probably missing some of that. >> you know, it doesn't creep you out, a my this, i that? what is that? he's the ceo of his company. not like he invented wireless

internet and devices and look how promotional they were with the iphone. so to me, i think that obviously someone believes there is a deal that's been rumored for years, them and dish or something like that. so i think the more likely sort of deals coming forward is putting together these different sort of content delivery mechanisms, right? so maybe that's part of it. but i don't know. and at some point, maybe the two and three players kind of merge. i know there has been some objection to the kind of horizontal stuff. but verizon and at&t are the two 800-pound gore yilas in the room. i know they have different technologi technologies, but who knows. >> since when is t-mobile? you guys are both saying you think this is based upon their ability to add to a content deal, as well. since when did t-mobile, first of all, have that kind of cash flow, that kind of balance sheet? >> they don't. he didn't answer the question. faber asked him -- as he's bragging about all of these subscribers. do you have the spectrum to do this, are you act actively bidding? he didn't answer that question,

which i have thought was really curious. they could find themselves back in the other side of this whole thing, as far as the network is concerned if they took too many subscribers on and don't have the peck trum, they go back to having the crappy service. >> i've been a t-mobile holder for about 18 years since it was omni point and all of these other things. i'm hanging in there. >> voice stream. remember that one? >> yeah. they had international and i could get gsm. >> i should have been dived -- >> i was thinking -- >> the jacket could have gone with your z calf reachees. do you remember those? >> guy does. >> don't throw it back at me! >> still ahead. check out shares of visa, the stock is moving lower after hours. there is the chart. we'll hear from the outgoing ceo next. i'm scott wapner, you're watching "fast money" on cnbc. first in business worldwide. here's what else is coming up on "fast." >> up in the sky, it's a bird. >> it's a plane!

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welcome back to "fast money." stocks rallying across the board today. the dow and the s&p closed up by a half%. the nasdaq 100 hit an all-time high today. here's what's coming up in the second half of the show. nearly etfs in the market. how do you find one? kevin o'leary joins us.

and traders betting on a tech stock when it reports earnings tomorrow. and here's a hint, it's not apple. we'll give the name and how to play it, coming up. first, we start with the massive move in the dollar. the u.s. dollar index hitting a fresh nine-month-high in today's session. how should you be playing the move? dom chu standing by with the three names you should be looking at. dom. >> currency traders have been paying attention, scott. but if others haven't noticeds the green back has momentum behind it. the dollar index continues to move higher and hit highs we haven't seen since early february. there are a number of factors at apply, of course, including bets on a possible interest rate rise, u.s. economic activity, the election, you name it. a lot of that stuff playing in. but over the last month, we have seen the value of that dollar index rise by over 3%. so we asked our data partners over at ken shoe to look at 2005 where the dollar index rose by 3% or more in a similar time

frame and what stocks tend to do in results. so among the best performers, auto suppliers retailer o'reilly automotive gains an average of 3%, positive 76% of the time during that span. you've also got edwards life sciences, which has an average gain of around 3.5%. it's been a positive trade around 65% of the time. and then one of the top performers is monster beverage, which has gained an average of 6.2% to positive trade 81% of the time. that's against an s&p 500. that in and of itself is pretty much flat and has been a winning trade just 51% of the time, with those parameters. so scott, if history does stick to form, the last decade or so we have seen flat overall stock action, but some names do tend to stand out to the up side. back over to you guys, judge, and good to have you on the desk. >> good to be here. you have a question fordom? >> as usual, dom has hit all of the points. i would bring it back to the desk. what do you think about dom?

>> i thought he made great points. we started the show with microsoft. >> i could get you maybe a question to him. >> no, he runs. he's got -- he's got a long day. he's gone already. >> what do you think about the dollar? >> i think the dollar will continue to rally and some companies will benefit. microsoft addressed it in their earnings release and said, guess, what, because of the falling pound, we're going to raise prices up to 22%. other companies lose to it. guess what, the rich get richer, companies like ibm continue to fall by the wayside. >> tomorrow night you get a great look. apple. there is a company that has more revenue that can be affected by the strength of the dollar that's here -- you know, headquartered here in the u.s., apple 60% of sales come from outside the u.s. we know they launched in dozens of countries all over the -- you know, all over the world with a new phone. but tim, you know, since they launched that phone in mid september, the dollar index, dixie, up 3%. >> who cares? >> the dollar has been flat for 18 months, and until it breaks 100 with decided force, it's stuck in the rain. >> i agree. >> it's not as divergent as

people think. and guess what, during this time where the dollar has been so strong, emerging markets have rallied. em currencies destroyed by the dollar kept pace and outperformed in the last week. oil outperformed the dollar. so i think that the dollar adjustment to the fed is something we saw two years ago. and it ended probably six months ago. but if anything, 2% move in the dollar until otherwise we get a more decided signal, is nothing for me to be concerned about. >> so you think it's already pricing in a december -- >> absolutely it is. >> so flat down -- >> i think we should be talking more about the ten-year. look at the ten-year, the 200-day, bouncing off of what used to be resistance on the ten-year, 174, 175. rates are going higher, i don't think they're going a lot higher. those are the things -- if rates start to shoot up dramatically, the dollar is really going to rally. if they just go up subtly, it's very good news. >> so can gains for the green backe continue? the commodities king says yes. dennis gartman and publisher of

"the gartman letter. >>" i think the dollar wants to continue to go higher for one reason. nobody paying much attention to the fact that the most important aspect of what the dollar is compromised of is the adjusted monetary base as reported by the federal reserve bank of st. louis. it has fallen rather precipitously over the course of the last 15 months. it had expanded under qe. other monetary authorities, the bank of japan, expanded their supply reserves. the ecb has expanded its supply reserves. but we are allowing our reserves to roll off. the adjusted monetary base, while the others have risen, have fallen from $4.2 trillion to $3.6 interests trillion. the fed has begun the process of tightening monetary policy and as long as that continues and i don't see that changing, the dollar will continue to get stronger. relative to the euro, japanese

yen, except and i will agree with timmy, except for the em currencies, they have done extremely well and likely will continue. >> those are good points, dennis. i think the dollar of the and the current account surplus in japan and europe, i think of the news out of spain that la jolla is actually going to have the ability to form his government. the socialists won't stand in the way. part of the dollar story was the euro falling apart at the seams and part was oil at 25 bucks, forcing the ecb to be more aggressive. we know our oil is. i think the same factors that drove that dollar move are not in place. >> let's give the spaniards the benefit of the doubt. the fact they have been able to piece together a government after several months of not is a real -- is a positive force there. but i think even more importantly is the fact that the would loania -- the lower half, southern part of belgium, has negated the ability for europe to vote on the free trade agreement with canada, which i think trumps all over concerns. i think that puts free trade or

freer trade a very decided disadvantage. i think that is the advantage to the united states, disadvantage to europe, which is responsible or which requires greater free trade than we do. we are an island to ourselves for all intents and purposes. they need to be able to freely trade and what is happened there over the past weekend is deleterious to the euro. i am bearish for the euro and continue to be. >> so you think crude is going lower then. >> not necessarily. i think crude is stuck right at -- >> you think crude and the dollar go up together? >> they can. they haven't -- >> they have been. i gotcha. >> they have in the past, they can do it again. i think -- i've been on here the past several weeks talking about the fact that crude at 50 t$50 $52 plus a contango to the one-year puts downward pressure on crude prices. at the same time, i find it difficult to believe crude is going to fall below 45 distracted. everybody is happy at 50 to 52

distracted spot wti. good to be here. >> dennisgart mapp, editor and publisher of "the gartman letter." >> karen first. >> well, to his oil -- i've been using shoring uso instead of using s&p puts. i think if we see oil come down that the market will follow or move in tandem. and i'm also -- you sort of have the -- let's say the opec deal sort of falls apart. oil comes down. seems cheaper than s&p puts to me. >> a name like halliburton. we talked about this, pal. i love that. so great. >> just seems like pal. >> i either see you buddy, pal -- >> chief. >> chief. >> champ, maybe? >> maybe governor. >> governor. governor! that's a very british term. now i'm off the rails. reported a good quarter. >> the dollar appreciates -- >> i think crude stocks here -- >> a name like halliburton will

look at it and say dagood quarter, valuation might be getting in the way. >> tim made a good point about the pmis. we haven't mentioned that. the one thing when you think about crude, trying to find a bottom here in that mid 40 to 50 distracted change and it looks pretty constructed. technically, there hasn't been too much talk about a pickup in demand or anything like that. you know, if you were ever to see some sort of reflation global, reflation, just on the margin and put together a few months and stuff like that, crude in the high 50s, going to go up. as a proxy. no matter what the dollar is doing. it has rallied in the last month or so. >> check out shares of visa as we head to break. that stock volatile after hours. the company conference call under way. we'll bring you all of the headlines, just ahead. plus, what's the best way to play the growing etf market? kevin o'leary, aka, mr. wonderful, is here. he's going to join us on this set with his three tips for vesting. you're watching "fast money" on cnbc, first in business worldwide.

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throwing a lot of new funds up against the wall, not many sticking. i compare it in a column on cnbc proto the smartphone app economy, which is they're great, cheap to use and create, but a small number of them dominate the activity and they're probably too many apps and etfs. 1,700 in the industry, $2.4 trillion. that sounds wonderful. but the top four forms have 84% of the assets under management. the top ten etfs have a quarter of all assets so not as much to go around. i think if you're an investor, all of the abundance can be great. the whiskey sector, for example, or the drone economy or highly engineered ones that embed futures and have some eroding values because of how they're structured. overall, i think this is great. this is the future. smart beta, embedding strategies and investment factors into etfs is the future. be very discerning. just because you can wrap something into an eft doesn't make it a wonderful investment

idea. >> stick with us. we want to talk more about what the qualities are you should look for when investing. kevin o'leary is with us, mr. wonderful. good to see you tonight. >> great to be here, thank you. >> too many etfs? >> there's 1,900 etfs now domestically. you want innovation. what we heard is this new concept of smart beta which means you invest strategies. if i found a great manager that made money and beat the market for serve years that had a distinct strategy, i can now use smart beta or multifactory effs, disstill that philosophy into an index, they disclose how they did it, and then we crystallize that strategy in a new etf that never has style drift again. that's the exciting innovation going on. this is not market cap weighted. this is not indexing. this is distilling great investment strategies in perpetuity forever. i'm excited about it, lots of

institutional investors are excited about it. many don't know it's happening, but it's coming big-time. >> yeah, but this whole term smart beta and factor, you know -- vesting is ultimately something overuse and had for investors, one of the key things is education. so every etf is an all-weather etf, so almost explaining, hey, in this kind of marketplace, you want this etf. talk about that. it seems to me that is not out there enough for investors. >> that's right. and that's the exactly the industry has. and rick just pointed that out. at the end of the day, a lot of these smart beta strategies are not sectoral. they're not thin, not vertical. these are long-term strategies in perpetuity forever. they're core holding. for example f i told you i want to hold stocks 20% less volatile. i want stocks that have a higher yield and don't use leverage to actually increase their dividend yield and ones that have high return on assets, those are multifactors. and such an index exists. it's outperformed the market by

400 basis points and continues to do so, because they're high-quality companies. you're going to see a lot of this. you're going to see a lot more. you know what i predict is going to happen? if you're a manager and i can take your strategy, you're going to be shining shoes on wall street. >> that raises the issue of whether there is a bubble in passive management. all this money going toward passive investing. folks suggesting it's sick little california, it's going to come back, it is a bubble and when the market has gone straight up like it's done for the last eight years, everything is great. but if you do have a sizeable correction, if not even a bear market, you're going to see active management return and those managers who are the best at what they do, the cream is going to rise to the top. >> active managers talking their book right now after five years of hideous performance. think about this way. smart beta means you start with the universe of 500 stocks in the s&p and whatever your smart beta strategy is or multifactor strategy is, you distill out the

stocks you don't want to own. you derisk the s&p. >> why is that derisking? >> because if i told you i don't want to own stocks that use sales accruals, because i wept through the world com blowup, that anybody that books a sale is radioactive waste to me, that's a factor. and as a matter of fact, i don't want to own a stock. i don't care if they're using sales accruals. that is radioactive waste. that's a strategy. i've now derisked the s&p. this is the kind of thing i'm talking about, this is where the innovation is coming. we're spending millions as an industry on it. our big challenge as you just pointed out is to market this stuff is complicated. we have to start with the institutions. we have to go to the money center banks and say would you put this on your platform, they say it's too new, we're not going to list it. all of those headaches. i don't care if you're a block rock or power shares, or whoever you are. you have to educate with a new product. performance isn't even good enough. you have to tell the market what you're doing. it's coming, though, and it's growing. and by the way, just a few years

ago, 80% of funds were actively managed. now 66%. the majority went into the etf market. >> michael? >> yes, sir. >> last word goes to you. >> what i would argue, it's not as much about passive versus active. most of the new etfs being brought out there are active to some degree. they embody some kind of factor or strategy that is an attempt to beat the index. but it's doing it at low cost with a transparent process. now all that's to kevin's point. what i would argue is, once you get one of these factors that seems to work forever, and you get it through compliance and marketing and it seems like something you could sell, is that factor going to continue working? the s&p low volatility fund is more volatile than the s&p because it became so popular and all stocks got too expensive. that's the hazard. >> it's a good point. but time will tell. performance after fees is all that matters. if you told me do i want to own a good balance sheet this deck made and next and after that, yes, i do. because i don't know when a good balance sheet is going to fall out of favor. that's one of the strategies that a lot of innovators are using.

mining for better companies that continually generate more cash. cash is the only thing i trust and cash, i think, the only reason we invest. i think we're in the beginning of something huge here. and aum will tell. doesn't matter what i say, what matters is where the money is going. and the money is going to multifactor etfs because they're kicking the heinie right off active managers. >> leave it there. kevin, good to see you. >> thank you. kevin o'leary. mike santoli, thanks to you, as well. trade it? >> i totally agree with kevin. this is a market continuing because of the scale and because of the expense load is to low. but it's making investors almost have to become more active. you think about what we just said. if you're in one of these actively managed etfs or a smart beta etf, you have to be more active than you might have been. so remember that. and i think there's some very interesting things. what he's saying, you can have sophisticated strategies and managing in the past and do that as a retail guy. >> all right. still ahead, visa shares

extremely volatile in the after hours. the company conference call just wrapping up. we'll bring the headlines moving the stock tonight. plus, traders betting on a huge move for one tech stock ahead of earnings tomorrow and we'll give you a little hint. it's not apple. the name when "fast money" returns. we love knowing what's happening. so the nest cam security camera looks after things and alerts your phone if something's up. hey, need a glass? no matter what it is. hey, dad. ♪

welcome back to "fast money." visa shares are volatile. aditi roy joins us with more. hey aditi. >> hi, scott. that's right, those shares going up and down. at the moment, down.2% after the company reported light guidance. visa projecting net revenue growth for 2017 between 16 to 18%, missing street expectations of 20%. the company also forecasting eps growth for the coming fiscal year in the mid teens. lower than the 19% growth the street was looking for. payment volume growth for q4, which measures the total dollar value of all transactions, was 1 $1.9 trillion or 47% higher. this number reflects the company's acquisition of visa europe earlier this summer. the company also says weakness in europe and asia hurt cross-border growth rates.

other head winds the company cited included uncertainty related to brexit. the earnings come one week after ceo charles sharve announced he is stepping down and replaced by board member, al kelly. he addressed the change at the end of his remarks. >> i'm so proud to have been associated with visa, its clients, partners and employees. i hope you feel that this is a different company than four years ago. and that the things we have done and positioned the company well for the future. >> the company also reiterating its focus on the competitive mobile payment space by announcing that it is expanding its visa checkout platform. back to you. >> okay, aditi, thank you so much. let's trade -- >> everything you just heard were seemingly bad news, except they beat by a nickel, beat on the revenue side. 64% operating margin. so it's still best in breed, along with master card. people have knocked these guys down -- >> you want them both? >> i think -- trade the same multiple. basically effectively the same

company. the short answer is yes. and until recently, you own both and do not own american express. although last quarter, might have given a reason at long apx for the first time in a while. >> what he said. i own mastercard, similar story to visa. it's the only tiny thing here is that it's priced for perfection, delivers close to perfection. >> does he leaving have any -- >> i'm in mastercard. the company is so much bigger. the space is so much bigger than he is, as good as he is. >> that's the thing that concerns you with a company trading at a very rich multiples. a lot of competition in the space. i think the ceo leaving is truly what it's supposed to be, for personal reasons. i'm willing to leave it at that. payp paypal, a secular growth story, taking the market share, they are the disrupter. visa and mastercard are the legacy model. >> since paypal broke out to all

time highs last week, the results people liked it today. a con surgeries of banks announced they are making a peer to peer competitor to paypal. here's another point i thought was interesting. the former president of paypal actually runs messaging over at facebook, they made an announcement there that paypal is going to be integrated into facebook messenger. that's all good news for these guys. the more interconnected it becomes with your mobile devices and apps and services, i think paypal has a first view. i think this one is a buy, as it gets back to that breakout level, 41, 42 in the last week or so. >> so for more on earnings, texas instruments reports on wednesday. dan gives us a preview at the smart board. >> talk your time, dan. >> after the close. texas instruments, the implied move in the options market is -- >> he loves this part. >> 4.5% in either direction. that's shy of the four-quarter average. 5.75%. again, this is a stock that's been an absolute monster.

we are talking about the reliance on the pc supply chain and the smartphone supply chain. these guys are not there. they are to some degree, but really more focused on industrials, internet and things. that sort of stuff. they have not been in the squags game like i said earlier, $200 billion in semiconductor deals over the last 18 months. i expect these guys with their stock up, if you look at this, up 30% on the year. they have gained about $22 billion in market cap. this on a year where they've actually had sales be flat for the second year in a row. i just want to make one last point. we were talking about microsoft earlier, trading back where it was in 1999, the high tick right before y2k. look at this, the high tick for texas instruments back in the day was $99.78 or something like that, just below 100 bucks here. obviously, traders have long memories here. this one sees really no overhead resistance. the results, if you go back to this chart here. the consolidation tells you that, you know, there is a potential for a breakout here.

i would not expect an in-line quarter and a mild guide down to kind of break this thing out dramatically. so i would expect the stock to be range-bound. probably within that 4.5% either direction. >> i have seen this segment before. is this where you vote to see where he gets to come back or just let him go? >> off the island? >> sometimes when the argument is so compelling, it speaks for itself. >> bring him back? >> yeah. >> guy, do you have a comment? >> texas -- if you like tech, given what they're doing, you've got to love microsoft at 19. i do think texas instruments can continue to rally, 2.2% dividend. i think you own it in earnings. >> dan is back. >> giddyup. >> dan knows a lot. what will dan do next? >> for more "options action," check it out at 5:30 p.m. eastern. after the break, more "fast money" is coming right back. [pony neighing]

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today i am helping people everywhere do what they do... better. i work with startups like alpha modus to predict markets five times more accurately. i am helping tv networks use social data to predict what people want to watch. and i worked with marchesa to turn fan feeds into a dress that thinks. hello, my name is watson. working together, we can outthink anything. time now for "final trade." around the horn we go. tim seymour. >> etfs. dvye, the dividend yield fund, very interesting.

>> bridge bank. a couple weeks ago, bought some calls. roll up or sell some. >> qqq, a good hedge. >> red hat, gets you done. i'm scott "mad money" with jim cramer starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you some money. call me at 1-800-743-cnbc or tweet me @jimcramer. >> right now we are dealing with three markets that are really amassed as a single one. first there's the stock market that every day seems so darn heavy.