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tv   Fast Money  CNBC  October 16, 2017 5:00pm-6:00pm EDT

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was serious concern a. non -- >> it sat out the fang rally now it's been the outperformer to some degree people are hiding in this. so if that gets taken too far, it's not great, but for now it works. >> i look forward to hearing more on the call michael, thank you. that does it for us. "fast money" covers that and it begins right now. indeed it does live from the market side overlooking new york's times squares. i'm tom wapner in tonight for melissa leyland. tonight here mohammed el-erian, he has a big call on where to he'll bet there shored there
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and bob nardelli will be with us later on first we start with ned felix, a beat on both the top and bottom lines for both the united states and internationally. there's a look at the symptom, it is up after hours, the company saying it will spend even more on content, up almost 2% the stock has dominated the media space, up more than 60% this year, crushing its competitors, and with numbers like this, do you keep betting on this stock? pete. >> i don't know why you would stop the real answer is people have looked past the multiple forever, just like they always have with amazon, and they have looked at specific numbers i think that combination tells me that right now that is the
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space to be. not to hide out, but when you look at what tier doing, they're going to spend $7 billion next year people don't seem to have they have this dash burn in front of them for content that seems to be something that people, just like at amazon, they look past it, because they like the numbers, they like the user growth, particularly the international was absolutely incredible. >> is it a good enough beat? >> i care about the cash burn. i've been wrong for $100 in the stock, but i've been saying investors who care, it's very difficult for me to price in 2028 numbers unless they have a good read on where -- to get all excited, you should learned about this. >> they raised that number --
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the stock did not get hit. i'm not arguing with you they embraced that, and it's okay ritz snoot one they with leverage this is the one place where i think they have a strader line to taking out the competition. amplgts that's been my argument for a while. >> and the domestic ads were different -- not a huge deal, but international they got 4.65 million new ads they guided something like 3.7 probably a lot of truth to that we talked about it back in the october. when the fact -- to me it was a
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tell, because the only misstep that mr. under the cloak of darkness, and the po stock got obliterated. it's up 60%. >> that's why i ask, if the book was good enough. >> maybe not i do care about valuation, it's a great story, but to me that point was way, way, way in the past
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it's one of those things will you ever like the valuation of amazon in. >> unless it comes in substantially. that's more interesting to me. here it's a great product, just not even close isn't at&t distributing content through their portal haven't they always by the way for a coined -- and time warner, and look what's going on >> so you wouldn't own this stock? >> no, but i haven't for a long time it's a tough to be they continue to develop an amazing business
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to me the content is great, they've done a great job. >> do you buy it for content >> not at this price. >> why do people own netflix >> people subscribe for content. >> no, they don't own the content. >> it's a land grab them dove is better than -- the other concern has been competition i might be 100% wrong, but they're competing with themselves right now the people talk about it in the same. >> go down the list. >> but they dominate the space they dominate e-commerce, and amazon has been trying to compete with them, but netflix really is way in front of the
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competition. that doesn't mean it can't change pretty fast, but as of right now, netflix owns the space. who buys the stop today? >> i think if you enjoyed the run, you can -- i think -- listen, again they've made one mistake in seven or eight years. i think the fact that they can raise prices, and the stock still goes higher speaking volume we talked about options all the time one has been extremely active recently you look at semilike netflix, that didn't used to attract the same kind of option paper. bullish, bullish, and they've been right, right, right this entire way that's how you can play this name
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without getting your head taken off, if the thing droves by 20% in a single day. >> let's bring in mohamed el-erian, former co of pimco good to see you again, as always >> thank you, scott. almost unabated. this is a stock that's up 60% year to date. >> and it's a great decision it is a special stock, but the irony is you could be having that discussion on so many names on the market as a whole do you stay the course despite valuations despite all these disconnects? the answer is yes. the make rho drivers are really strong you need major disruptions to get a meaningful correction, so you stay the course for now, but be careful about how much volume at this time you're selling and how much
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volatility you're giving up. i hear you telling me this market is going to continue to go higher, because the backdrop will spot that, and i don't hear you saying it will end anytime soon. >> the marketplace has been conditioned to buy any dip, regardless of the sources of this dip why? the option reason is that central banks, the ecb continue to inject tremendous liquidity, and the corporate sector is flush with liquidity second the global economy is picking up third, there's a hope of a much-needed policy hand-off. i tell people, i understand why you want to put in more dollars in this market, but understand
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ultimately this is a journey, not a destination, and it can be really long, but be careful how many liquidity you give up in this process. >> might it be the ecb starting to turn and we could see a different policy what does that do to your bullish thesis >> karen, that's the key issue if it was just an issue with the fed, i would believe that the fed can beautifully normalize. it can raise rates a bit, it can slow by bring down the balance sheet without disrupting the market so if it were just the fed, why tell you don't worry about central banks, but what if more than one central bank normalizes at the same time the people's bank of china and you ultimately the bank of
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japan, there i'm less comfortable about that that's why i'm saying it's a journey, enjoy the journey, but understand that you may have to reposition yourself for a different destination at some point. so this is not something most people fell six months ago where in the globe to you put your money >> i think you want to go where more evil wailing are more attractive clearly europe has been a better place to be, so you want to go where valuations haven't been -- understand that there's another element going on, which is the role of passive products passive products have tended so far to attract a lot of money into the most public of public markets. so if you're going to take on
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more, more risk at this point, look at markets that have lagged, but also understand that you've got to combine it with a bit of a barbell, where you do have places you can gain quickly. >> mohammed, good to talk with you. >> he's talking about passing the baton on a seamless fashion. so far, so good. karen makes the analogy all bank robberies -- until you get out the door, and everybody's fine, you still have to get out. they haven't gotten out yet. that concerns me in the meantime, and we say is all the time in my world, it means we continue to grind higher. >> this is the problem of waiting for the pullbacks that never show um. >> we feel it in this country. what's going on in china is enormo enormous there's been an even bigger rally in companies that are
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almost as big that side of the world. relative to the cycle, there's still a lot more to go >> and most of the world has outperformed the s&p as good of of a year as it's been. >> today, i was just giving a note to tim, the nikkei has been on an absolute tear. ewj, so wherever you look, there are opportunities. not everything, by the way, is trading at valuations. there are many stocks that tradedvery fair valuations tha give you an opportunity. you can be on the ride with names that trade as a very palatable levels i'll give you a great example, the financials, i throw in the technologies take a look at what micron has
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done that tells you a lot $41, $2 billion they raised, yet the stock is going higher. >> putting a boom on the end of that. president trump taking aim at big drug stocks again today did any traders buy the dip in the group. plus bob nardelli is here. he was inside the c-suite at pge, he'll break down what the company has to do. what's the embattled retailer worth now w asnee a brand-ne"ft moy" game to figure it out. much more, right after this. my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen
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welcome back to "fast money. check out the shares of the pg & e utility company that services the california area, the stock having its worst day since back in january of 2001. this is on worries that electrical lines that were knocked down from a windstorm could have helped to spark the wildfires in california. that state's public utilities commission is investigating those claims now, karen. >> i mean, what's happened to
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the stock is pretty extraordinary. these things don't generally move that much this does seem overdone to me. one can't really know what the full extent of liability would be i have to believe there's some insurance there as well. it's actually sort of intriguing, but i would only do it through options, look out about six months until the dust subtles. the risk/rear ward seems far more interesting to me that is an extraordinary move. >> but if you look at utilities, timmy, in general, where yields may by heading, it doesn't bode well for that trade across the board, does it >> karen just said they're dividend plays. >> so we're talking about one particular scenario. i think what analysts try to do is what goes the probability of them being found liable and what could they be found liable for
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>> i think there's a place for utilities. i think we get where these get interesting, we know rates are going higher at some point, and i think back to what karen was saying about this company, jpmorgan did an analysis, they say $12 billion brings it down, world-case scenario, how can they know the worst case, i don't know >> they have $800 million of insurance liabilities on their side of the ledger, let's look about it that way. >> it's happen to them before, but now, and this has had a pretty prosip tuesday drop
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a week ago it was 55.90-ish at an all-sometime high >> so there's something going on, either the xlu -- maybe -- rates are moving higher, p and g. is sgloop still ahead, check out shares of netflix hitting an all-time high. we're watching the move ahead -- we're going to bring you the latest, in the meantime, here's what else is coming up on fast. deal or no deal. >> for nordstrom shareholders, it appears as if it's no deal. what exactly are shares worth now? our traders weigh in. >> muss white stocks make new highs, with you dow
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component is seriously out of moves. ♪ it's the general electric blender ♪ ge shares have been in the blender. the man who was almost ceo in the '90s is speaking out you won't believe what he has to say about the company. that interview when "fast money" returns.
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he's green money for spending today. you know, paying bills, maybe a little online shopping... makes it easy to tell you apart. that, and i am better looking. i heard that. when it's time to get organized for retirement, it's time to get voya. welcome back the dow hitting a record high, but the oldest component also happens to be the biggest lag guard. dom chu has the details. >> ge is a stock that hasn't exactly performed over the long term the way that a lot of the market has, so first up, you check out the stock price versus where it was at its peak
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rewind back to august 28th of 2000 near the height of the dot-com boom era and shares of ge were $60.50 today ge is worth around $200 billion. back at the peak, ge was worth around $600 billion. of course, dividends have been a bigger part of the story over at least the last couple decades, so investors had a big of that sting taken out of that large market cap drop. still some analysts are looking -- you have activists investors, they have a seat on the board in the form of ed garden, so those looking for a turnaround trade now have a seasoned investor in the space in the boardroom also, scott 9 average number has
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been getting lowered, but still at $27.50. that implies 18% up side, so there's more fuel for that debate overall, scott. back over to you. >> thank you very much dom. our next guest is bob nardelli bob, great to have you on tonight. >> a lively discussion >> dom chu's record was telling 17 years, $400 million market cap wiped out. what in the world has gone wrong? 4. >> i want to make sure that i'm happy to share a perspective, but jeff was there, so it's hard
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to know. again, probably what's most painful for those of us that poured our lives into general electric with jack welsch, who was an unbelievable leader, inspirational, really worked in a collegiate way the beauty about general electric was the portfolio if i was down a couple cents a share, somebody else would pick it up. jim mcnorthwesterny would pick it up. and that's probably what's missing a bit. if you look at the goes-in and the goes-outs, there's been a lot of goes-outs. >> they're criticized for selling finance, the bottom, getting into oil near the top. is that fair and if so, who deserves the brunt of that blame.
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>> i don't know that you point at fin ever at any one individual there was 15 or 16 women on the board, so none of these decisions were made singularly by jeff, so i think there's culpability across the whole spectrum again considerate of a sore spot with me, when i was running ge power systems, we bought nova pinioni. that business grew to $11 billion. you know, you'll have some cyclicality in those businesses. the key of the portfolio was to westerly that from a cap ex standpoint, and when you start ripping that apart, you have less to work with, and therefore more exposure, so i think that will be one of the challenges for john flannery. he has fewer cards in the deck to deal with what's always worked for me is enhance the core, extend the business, and expand the market. that's why we went from $4
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billion to over $20 billion in power systems in a five-year period. >> if you were running ge today, given everything that's going on, what the stock has done, would you cut the dividend >> that's really going to be -- we'll know about friday, i guess. that's going to be a really tough -- people that have stayed with general electric, voted with their heart instead of their head, have been counting on the dividend. remember what happened when jeff had to cut the dividend. if you're in your 401(k) and in the twilight years, you are counting on that dividend, because you're not getting any value. it's a dividend stock. if that's cud, the company told cnbc it was a, quote, top priority to keep the different jim cramer criticized that comment as not being strong enough what does top priority mean to you as a ceo is one of the things john will
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have to say is i'm not cutting the different to remove the doubt and speculation out there. there's a lot of discussion among the analysts that he will have to do that. you know, he has a financial adviser on the board now -- not an industrial operating expert so i think we're going to see a period here, you know, we talked a lot about this market going up i think what will happen with a lot of these activists is when the market cools, the cost of money goes up, where you can't buy stock to engineer earnings per share. i think that whole thing would reach a point of inflection and is going to die away >> now, i've talked to a lot of ceos, and some welcome an
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activist on the board, because it raises the bar for the directors who are on there who kind of rip open the fedex box the day of the meeting and look at the material, so it causes other directors to send of step up that's a good thing. if they're disruptive and looking for the short term, then you'll soo he a lot of carve-outs and exits, and hopefully a bourns in the stock, and then they're in and out. >> ed garden is a bright and well thought of guy. what does ge have to look at this point >> i think john probably felt why take that battle on. so why crazy the distraction of fighting, bringing him on versus focusing the entire team on, trying to get the revenue, the performance and the globality of markets out there where you can start to get some earnings you feel it gets worse before it gets better?
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>> i think we'll soo friday. john may have to clean the board, so he can set a more realize -- >> you mean kitchen sink the quarter, so to speak just get everything out? >> i don't want to say kitchen sink, but i think he'll set expectations i don't know that he'll be able to get $2 billion out, are you with me, over in 2018. that's a tall order. i think he has no choice but to set the bar on expectations. >> i'm curious from a personal standpoint, how does it feel when you see a company like this that you have given 30 years of your life to, sort of this old guard the ge watching to what's happened to the company and the stock price. >> yeah. >> what goes through your mind as you're watching this --
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>> the operative word there was old guard. >> i say that with the most respect, you know that. >> no, no, i know. look, it's painful some of mice best days with the colleagues i had a chance to work with. i was blessed and fortunate to get mentored by jack welsch, if you look at the market cap he was ability to arrive, he created this collegiate competitiveness, as i said earlier. we would work hard, we would compete, but never at the expense of one of the other portfolios if i was off, jim would jump in. we all went through cycles, right? but jack continually drove us to continually improve upon everything that we do, both personally and within or businesses he had the confidence and the support to reach just a bit
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further. every employee in the company -- and i was blessed to have the best, right? -- shared that vision of competing, wanting to be number one and stay number one. the way you stay number one is you innovate or evaporate and never was more true than in today's marketplace from the outside looking at a conglomerate, for a while now, the market hasn't gives it a very good multiple is it possible that thatmodel is really not the right model to have anymore, and should ge break up into disparate businesses. >> i think, karen, what you're framing for us is that was the magic of jack welsch
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he was able to give him the heisman, if you would, and put that into perspective. he would have these intimate sessions, and explain. he would pull charts from all of us and show what each big is doing, how they complement one another, how when we're building plans in saudi arabia or wherever, ge capital was supportive with capital equipment. same thing with lock motives we sold the first 300 units around for china around the world. we developed the 15-year deals that carried continued revenue through the trough period of the financial meltdown i think this was a continual improvement, and jack was able to explain with confidence and deliverables why the portfolio was so good. if you can measure it, you can
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manage it, and jack was an expert at that. >> have you talked to jack lately about how he feels about it >> i've talked to jack yeah, i mean, i still have the utmost of respect and admiration for jack, and i'll be indebted to him for allowing me to do what i did at ge, and i think he's a special person. >> is he pained by watching this story unfold >> you know, we don't talk a lot about that you should try to get him on to talk about that. you want to trade the stock? it's gotten hammered it's no secret at this point is it attractive yet >> personally i don't think so i'm not saying that today. we've been saying it for quite some time. what's honeywell done over the last seven, eight years, compared to general electric
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you want another comp? look at united technologies, look how different 2015 was for that company, but look how quickly they were able to turn things around. to karen's point, yes conglomerates maybe don't get the multiple maybe they should, but companies have figured this out where ge has floundered. at a certainly.it's interesting, but i don't think -- >> what do you think about dave cody, who actually amassed a large portfolio. >> the best thing they have going for it, is expectations are not high the dividend -- i think if they keep the dividend, it trades okay if they don't, i don't know where it goes. >> i totally agree they have taken it from 2.10 a share, down to 150 at best dividend to me should not be difficult. this is not a company that's got a debt load they could service
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i think this could be more so. i any the stock is interesting i bought it a week ago it's a long-term holding it's a sum of the parts. i think there's great businesses there. they said two years ago it was a cyclical decline the question not market is is it a secular decline? >> i think the biggest problem is it's always been a reacting, not only the ceo, but the board. they have been reactive, and they bought oil at the top, energy at the stop scott, the problem is they've got to get beirut diamondback. until they can do that tryon is a great addition, but are you buying stock back because you're financially engineering? or because that's been your dna for the last 10, 20, 30 years? i don't anyone guys buying bock stock, but if they're financially earn, that's a different kettle of fish unfortunately the strength of ge has not come back yet. >> you have a final thought on
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what the desk has said here? and then we'll go? >> you know, i think they're all fair comments. i think we have to wait and see what john is willing to do he's put a lot of things on the table. he seems to be addressing the cost situation the key to this thing we learned under jack, you don't cost out to prosperity. you have to grow to prosperity so he's got to get what's left pumping on all eight cylinders, i think. >> thanks, one again to bob nardelli netflix at all all-time high, though giving back most of its gains at this moment plus president trump doubling down on his health care agenda, calling obamacare, quote, debt and gone, the comments taking the space down, he talked about drug prices. we'll bring you the latest details. much more "fast" is straight ahead.
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let's go to eamon javers absolutely heard some of this it was in the form of a surprise press conference, almost no
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advance notice alongside mitch mcdonald the purpose of this gathering was for the president and mvp mcconnell to show they have patched up their relationship. i had an opportunity to ask about drug companies and insurance companies. on drug companies, he repeated this refrain we've heard before, that they will get drug prices down here's what he said. a priors of mine, we're going to get in the other case. you have the drug companies.
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mean, i'm not interested in their money. >> we asked the president about insurance companies and what specifically he would like to see. he was critical, saying that they were -- here's what he said on that one. they have made an absolute fortune. we're talking about hundreds of millions a month and i'm very happy with what i did. for a short-term taking care of what we will call health care. scott, it was a wide-ranging press conference i also had the opportunity to ask about the economic development bill that he's been talking about in recent appearances. he said he has a proposal to roll out in the near future, but
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wouldn't provide any specifics about what will be in it or when he said the main priority is tax reform, health care and then this economic development bill. thank you, eamon, a beautiful early evening at the white house, eamon javers on the north lawn. drug companies getting away with murder, s. at the went negative on that is there something to be concerned about? >> you're talking about pharma stocks that have done nothing for the last year, year and a half i don't -- i'm not sure that the pharma companies will be the first play they can go after here if you look at pfizer or a merck, i think with the dividend and their pipeline, those are names you can own.
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>> you can peg the moment if you look at that intradade -- >> it seems shallow. i'm not overly concerned if it sold off more, i think tal be a great opportunity i own pfizer and merck pfizer was down modestly j & j off of 52-week highs i know that's all kinds of things, but when you look at all these companies, that creates opportunities. when we've seen tweets and/or these colts, they have been very, very brief, but reactive toward the stocks. that does create the opportunity. >> let they speak some plat attitudes, boatloads of money, hand over fist, and basically ripping people off, i'm here to tell you they're not ripping people off, number one i'm with pete. we'll learn more about unitedhealth tomorrow before the bell, which reports. the rhetoric will continue
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think this is think a point of diminishing return. no deed for in order symptom, tanking after the company said plans to take itself private are now on hold where should the stock be trading now? our traders will play "the price is right." much more "fast money" straight ahead. ♪ can i kick it? ♪ yes you can ♪ can i kick it? ♪ yes you can ♪ can i kick it? ♪ yes you can ♪ well i'm gone ♪ can i kick it? ♪ to all the people who can quest like a tribe does... ♪
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welcome back to "fast money. nordstrom sinking today after the company suspended plans to go private leslie picker has more on the story. >> nordstrom said in light of the difficulty of obtaining debt financing inned current retail environment prior to the conclusion of the approaching holiday season, the group has suspended the exploration for the remainer of the year in june they want they wanted to take it private, reportedly in talks with leonard green to partner on this deal sources i have spoken with today say the panks surrounding the financing have gotten skittish, worried about placing the debt, and if they were able to place the debt, they were word they could do so at reasonable
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prices retail debt as a whole has been -- and greater competition, and we have seen several does not retailer filing for bankruptcy this year but taking nordstrom private would have enabled them -- that the retail industry complaints about. in terms of a biotarget it's seen as a stronger industry because of its grewing online and off-price sales. they have, of course nordstrom rack the family said they may want to restart this process after the holiday season is over it would also attract bids to buy it outright. scott? >> thank you, leslie with no deal on thetable, and the stock near 52-week lows, we those this is the perfect time to play "the price is
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right. >> let's get to it, monty. >> who is the next contestant? >> from minneapolis -- >> hey, that's me. >> announcer: come on down >> all right i'm glad -- let me tell you something, take a look at this chart. >> i was supposed to ask you where should it be trading, but go ahead. >> here's where it should be trading, scott if you go back in time, we have seen some pullbacks, but this seems to be a level where it has stopped in the past. we have seen it here, we've seen it here, now right back here this $40 level, a lot of people who pick that hout huge day-to-day, everybody was disappointed, would private equity help them out was that going to work out
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debt became a big issue. i do think this is a company that actually has possibilities coming forward this is what i mean by that. the off-marked very strong if they can build on that, they're going to lose on some of the big stores, they will close and shutter those and move towards where they have the grout. if they do that, i think the area would be right in between so call this 37.50 i think that's where you need to own it. >> 37-50 pete says is the right price. should it be higher or lower they're writing it down. tim, you're first. i'm first, scott, monte, jack, bill, whatever your name is. i'm lower, but i think again they have more priced into it, i don't think macy's does. >> karen >> i don't know 23 i exactly
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fulfilled the rules of the gauge. >> spot on. >> i think there's a bit left. they did say we may continue exploring the alternative after the holiday season there's maybe a bit more in that for that so i don't think it would go much lower than that. >> c'mon, bob barker, you can't sip a spot on. >> why not >> it's perfect. >> it's not higher >> spot on is perfect. >> can you do better than? >> i'm going to say lower bob. i understand what pete is saying we bounced off last year's low, but macy's is trading 7 1/2, 8 times, nordstrom is closer to 14 it shouldn't be that much of a premium. i think nordstrom goes down, slap an 11 multiple on it, and
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you've got tim seymour, you have 33 bucks, but this is a company that has both. you guys are slamming around, you are wrong, w-r-o-n-g. >> i don't know if we made bob proud or in and out. anyway we're out of here which of those names could see the biest ggmoves? we'll give you some clues when fast returns next. your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory.
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you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade.
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ibm out with earnings, mike kuo as what we can expect. >> the options trader are expecting it to fall by 143 by the end of the week. >> mike, thanks very much. we'll see you soon let's go -- >> that was quick. >> that was question. >> you gotta move, man. >> pete, final tray.
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>> fcx, giddyap. >> dividend is out, ge is good >> thank for being here, scott, you've the man element vs >> it's been a pleasure. k for having me. that 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 cram america. other people want to make friends, i'm trying to make you money. my job is to ed kuwait and teach you so call me at 1-800-734-cnbc or tweet me

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