couple of years time the power of compounding usually, you need a couple of decades to play out. power of social media is like compounding on steroids. that does it for "the exchange." time to join tyler for "power lunch" which begins right now. >> nice phrase, the power of social media it's on steroids thanks, kelly. see you in a moment. i'm tyler mathisen right now at 2:00, shares of general electric are tumbling this hour after comments from its ceo, to analysts, the details of that straight ahead and more troubles for the one time most valuable company in the world. china slashing its growth targets and warning about a hard struggle ahead is it time to sell out of stocks and bet on bonds plus, a cure for hiv major breakthrough in the aids epidemic that has biotech buzzing. and the real read on real estate, the "power lunch" exclusive with tarek el musa

we'll break it down. not such big moves in the major averages as "power lunch" starts right now. >> the big moves are in some of the stocks today so let's begin with the big drop in shares of ge just the past hour or so the stock down about 6%. the low about 4.5% right now this after comments from ceo larry culp morgan brennan is tracking that from the nyse. >> reporter: those comments from ceo larry culp continue. he is currently sitting down and having a conversation at the j.p. morgan aviation industrial conference with really, wall street's biggest bear, j.p. morgan's analyst steven tusa the comment that sent shares tumbling they had been in positive territory before that. total industrial cash flow negative in 2019 that the plan is to step up

restructuring spending in power and elsewhere. also, adding he's going to be talking more about those restructuring plans when the company outlines more specifically its 2019 and beyond outlook next thursday. but some of the other comments that came out of this as well affects meaningfully less in terms of the head winds to cash flow in 2020 or 2021 also, saying that organic revenue up mid to single, excuse me, low to mid single digits and health care organic up low to mid single digits and then power down, flat down market and talk about capital, noteworthy because that's an area investors have been very focused on and that steven tusa put a note out, very critical business within capital this morning g cast, the aircraft leasing business to that, he did say that capital in the future expected to be more straightforward and it will

probably include that jeep has business sees it as a good business, a strong profitable business and talking about that long-term care insurance that's been a big issue for ge particularly in the last couple of years with reserve charges, that insurance will be with us we don't want to assume someone will come in and help us work that in the near term and better understand what we're dealing with and they are open to something creative. covering a lot of stuff in this discussion right now it continues in the meantime, shares are down about 4.5% back over to you. >> thank you very much, morgan let's bring in bob pisani for more on ge morgan will stick around as well bob, what levers are left for mr. culp to pull >> reporter: that's a good question you know, the bulk is on ge, tyler. always has been, we have these fabulous assets that we want to sell and the market doesn't fully appreciate the value of our assets because the market does not know how to value conglomerates. jeff used to complain about this

for many, many years and he does have a point the bear case is, well, wait a minute, you've got yourself into a terrible dilemma with the debt you've got including ridiculous pension obligations and essentially, you're slowly having to sell off the pieces of the company. sometimes, at fire sale prices and this seems to be what tusa is saying here with the thing and the whole thing that's going on with ge financial which has been a problem for many years so it depends on what side of the equation you're on but it gets tougher and tougher to sell off all these assets. >> is there risk to the pension? he asks with a personal stake involved >> well, ge, this is the largest public, private pension in the united states. 650,000 people depend on that pension. so what they borrow, $6 billion last year. it's never good to borrow money to pay off pension obligations and morgan, i guess they owe another, i don't know how much since they sold off parts of the

health care operation. it's down to now but maybe $20 billion, something like that. still pretty big. >> and they've been starting to chip away at it but from an absolute numbers standpoint, i believe it is the most underfunded pension in the s&p 500. i have to double check that, but certainly, huge numbers and what we've heard from executives in the past, they're not going to be touching that and that is staying put and they are continuing to fund it. but again, it does raise that question about cash and cash flow which is the big thing that investors want to know what's going on with that as this company tries to remake itself. >> you can't talk about industrial turnaround globally because this is a restructured place. it's really complicated when you talk about ge. you can't just say the global economy is getting better and industrials does better because ge is more complicated the restructure. >> thank you very much bob, morgan. appreciate it. let's get to the big red flag in this market. china. the world's second largest economy cutting growth target and announcing major stimulus. it's the stimulus part that's

sparking the rally cnbc's eunice yoon in beijing to see this dichotomy hi, eunice. >> reporter: china's premier kicked off the national people's conference a big political event here by saying that 2019 would be a tough struggle in the chinese version of the state of the union address, premier said the gdp growth target drops to 6 to 6.5% and the economy creates 11 million new jobs significant because it's down from the actual number in 2018 of 13.6 million. job stability guides policy so the deficit to gdp ratio was raised to 2.8% and the budget will now include 2 trillion, about 2% of gdp of extra tax cuts and lower fees to help companies survive the slowdown bank for smes are green lighting

and local bonds from last year that surprised a lot of economists here because of the number to fund infrastructure and all of that, of course, to help stabilize the slowing economy. guys >> thank you very much eunice hedge fund manager brian bass expects a pullback here in the united states. bass making a big call on where interest rates may go from here. >> looks to us like southeast asia is headed for a recession, 2019 europe headed for recession 2019 and the u.s., the kind of fiscal impulse from our tax stimulus going to be wearing off towards the end of 2019 where i think the u.s. will, you know, the world's not going to have a recession and the u.s. is going to keep growing. so i think you're going to see the u.s. have a minor pullback in 2020. >> is bass right and is it time to get back into bonds let's bring in brian belski with

bmo capital markets and then air force of international equities with harris associates brian, you say kiss my bass, kyle >> wow >> yeah, i do. i don't understand sometimes when we hear these people make binary calls that say bonds are going to zero. i don't understand that. everybody knows you take the chinese gdp number, divide by two. that's rule of thumb, number one. >> and always has. >> we believe the united states stock market entered into a 1995 type of phase. >> i was around in '95 but a lot has happened since then. a lot of brain cells have gone >> the fed misstepped the '94. market took off in late '94 in november and 1995 was the start of the nifty fifty and sought liquidity and came back for

stability and great companies. >> do you think lower interest rates are possible right now because that would seem to be a key plank of a bull market argument in stock? >> you heard on tv in terms of the goldilocks the earnings recession i can debunk all of those. earnings recession is not happening. earnings revision. >> do you think interest rates might be structurally lower? talk of so much debate right now. the labor market so strong and what happens if we have an expanding economy and growing stock market and low interest rates? that's what kyle bass is kind of talking about directionally, could that impetus be lower without it ending the stock market rally >> i hate to tell you, but we've been looking for inflation for 36 years >> exactly that's my point. >> we think interest rates are are here for a while and it doesn't mean structurally lower but the levels for a while given the fact that growth is pretty good. interest rates, again, are low and the economy isstarting to tick up a little bit earnings are better.

so we think actually that is an explicitly positive symbol for stocks >> let me get your reaction to the conversation we've been having and also, if china is going to be weaker, if it is going to be a tough year ahead, what does that say, not only for chinese stocks, but for stocks in asian markets and the developing international markets? >> let's put this all into perspective. this notion that southeast asia is going to a recession and europe going to a recession, the u.s. is going to an economic slowdown the data just doesn't explain any of this. china growing at 6 or 6.5%, i wouldn't say divided by two but take three quarters of it. you have a population over a billion people with a purchasing power parity of justice. gdp. $14,000 and if you grow that at even 4%, 5%, 6%.

that is a healthy addition to global gdp and southeast asia, frankly, doing okay. it's doing just fine europe seems to have bottomed at this 1.5, 1.75% growth the latest data showing a tiny bit of a pickup and u.s. at 2% growth when you roll it all in, it's 3.5% global growth i don't see this global recession. >> david, how would you invest though the situation in china, kind of suggests you can have a slowdown and still have rallying stock market because of liquidity. where would you invest >> we're value investors we look at the price we're paying for what we're getting. can't just look at growth and everything else. you have to look at the price you're paying and right now, all the bad news, most of the bad news in the world today between brexit and the fights between the italians and the europeans, all the bad news is in europe and it's overly reflected in

valuations of european equities in our view. if you want to look for a place with depressed stock market values and depressed currency, so you could buy cheap stocks with a cheap currency. >> that's a great point but you are depressing brian belski over here you don't think that's a savvy move >> i don't because i was schooled in the art of looking at valuations where i was a strategist at merrill lynch. there's something called a value trap and i don't see tit my european clients told me to buy europe. >> david, we'll give you the last word. >> you don't look at where a company is based but where the company makes its profits and this is the market inefficiency you could exploit. you can't paint aeuropean company with a certain color brush just because it's based in europe you have to look at where it makes its money, where it earns

the cash flow and that's globally >> folks, we have to leave it there. brian belski, always good to see you. coming up on "power lunch," target and kohl's. can these retailers continue to rally? a second person seemingly cured of hiv how close are we to a widespread cure ar're talking housing with the st of flip or flop tarek el moussa coming up. this is your invitation to be our guest. this is the invitation to lexus sales event. lease the 2019 rx 350 for $399 a month for 36 months. now thru march 31st. experience amazing at your lexus dealer.

shares of target higher right now. the retailer reporting the best sales growth in nearly 15 years. the very well rested courtney reagan spoke with the company's ceo after a long flight from las vegas last night >> hi, good morning. good afternoon >> whatever day it is. >> so target beat analyst expectations for earnings, revenue and comparable sales for that holiday quarter, the retailer also forecasting stronger earnings for the full year the retailer sold the -- saw the strongest comparable q4 data with strong in-store traffic and 31% growth online. two years ago, target laid out a multi-year $7 billion investment plan with a really big emphasis on the stores. they're going to remodel hundreds, building new smaller formats and this is a time when many competitors are doing the opposite closing locations. investors are skeptical but it's working. >> the investments we made in fulfillment are connected with the consumer they're taking advantage of

ordering online and picking up in store they're driving into our parking lots they're shoppers now taking advantage of same-day delivery so all those elements are coming together >> using stores as fulfillment hubs gets online orders faster and lower target's cost. fulfilled 75% of all online orders through a combination of order pick-up, drive-up, that shipped same-day delivery option and shipped from store in fact, in 2018, those programs all together helped lower the average fulfillment cost per item by 20% which i found fascinating because we're talking about so much about how expensive it is to actually grow the market share online. >> it felt to me like a vuictory lap. >> we asked mr. cornell if there was a victory lap and he said we don't take victory laps. >> but yes. >> we're proud of the work we've done and continuing it two or three years worth of work

in 15 months >> thank you, courtney reagan. stacy, we've got so many movers between target, kohl's and all the rest what, to you, is the standout? >> i think, you know, target is clearly the standout because i think as you look at retail, a lot of these retailers are driving their costs or same-store sales through average ticket and that's it there are a lack of retailers actually driving traffic if you look at target's almost 5.5% comp, half came from store traffic. that's incredible in this environment where that is such a hard thing to come by and really, target is thinking like a digitally native brand listening to the consumer and they're coming up with their own private label brands at great value to fulfill what consumers want >> so you would say this is a victory lap and the reason i keep coming back to that, target was really hammered a couple of years ago for an investment cycle basically. should investors look to the results here, look to other

retailers and demand investment similar to target and say, you can also pull off a transformation like this in just 18 months time >> that's such a great point i think a couple of years ago, walmart in the same bucket and target, both embarked on a very capital intensive plan and originally got punished for it but guess what now it's paying off. you look at walmart's valuation, high target still quite a bit lower in terms of valuation. earlier investment cycle but paying off investors need to listen to that and, you know, eventually target's multiple, i think, moves up towards walmart's multiple. >> what does target's business mix look like in three to five years in terms of digital versus in-store sales >> good question, tyler. certainly the apparel business, doing so many creative and interesting things with, that will probably could represent 25% of the business at some point. clearly, they have a big grocery

business and that's something they've really been focusing on. they're doing a great in-store pick-up business as courtney said, three quarters of the fulfillment in store which brings down costs but i think that business gets bigger and bigger yes, comes at a lower margin but it's driving people into the store. it really is as they're picking up items. >> kohl's up 5%. what's going on there? quick thought. >> kohl's, you know, two year comp about 7% here february a little weak but investors look past it while february short on performance, they are incredibly long on initiatives. they're talking about millennial bars they just signed a partnership with planet fitness. will be rolling out in some stores the new ceo, michelle, incredibly focused on traffic. an alliance with aldi and amazon wholesale now. putting everything up to drive traffic into the stoers and that's probably the next leg of

the story here. >> it's fun to watch to see how these stores are reinventing themselves to stay modern. thank you so much. >> they're trying to make it an experience, shopping and that's what it has to be. >> with the men's store you went into bring trdrinks. >> serving cocktails i spend more, i promise, the more you give me walgreens boost alliance after named by the fda as a violator of rules selling tobacco products to minors e-cigarettes to the latest on the fda crackdown next and the dow down 7 out of 8 sessions and make a u-turn "trading nation" is next on "power lunch." we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world

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it can do so much for your business, the list goes on and on. that's the power of &. & when your patient's tests come back... welcome back to "power lunch. i'm michael santoli at the new york stock exchange. time now for "trading nation." transports underperforming the markets over the last week down 7 at the last 8 sessions. could this be a warning sign for the rally or the economy let's bring in matt nalee and erin gibson to weigh in on that. matt, i mean, transports sometimes invested with some significance on a technical basis. what's the pattern tell you right now about the forecast for this group or the markets?

>> right now, we have to break it down for the groups within the transports because we are seeing weakness in the airline stocks down 18% from their 2018 highs andrew sork down 13% but railroad index is testing its all time highs so, you know, part of that has to do with precision railroading, helping their margins and things and economically sensitive group so if this group can break out in a meaningful way, it should help the transportation turn back around and move higher which would be good for the broad market if they roll back over, like they did just before the correction of early last year in 2018, and the one that started in late 2015, it could be a good leading indicator of some problems so right now, very important critical stage >> so seems like a bit of a bell weather. do you feel it's an opportunity? some of the weaker groups within transports or the rails because of what's happening in that industry >> actually, i see some of the

weakness in the airlines as an opportunity. valuations really coming down and have the higher growths and with respect to an indicator of the economy, this group, even when you look across all the industries, their estimated for this year and next stayed remarkably stable, basically hasn't moved at all since the beginning of the year when the broader market almost cut in half so this group looks very stable. we're looking at stable revenue growth and this is really more about valuations coming down and giving a few opportunities, railroads being the tpriciest bt airlines being the cheapest. >> a lot of cross currents in here and by the way, the guys at fedex are the ones weighing on this market down 30 something percent. matt and erin, thank you for joining us today for more "trading nation," head to tradingnation.cnbc.com or follow us on

twitter @tradingnation >> thank you, mike ahead on "power lunch," a major milestone in the race to cure aids and got the world of biotech buzzing. the fda putting retailers on notice how the government is targeting the sale of tobacco to minors. flip or flop, hg-tv stock, tarek el moussa. more for him coming up >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> every trader should accept that losses are a part of the process. so in an effort to reduce your risk and to find your max loss, consider using stop. this approach can help eliminate a motion from your decision making and set you on the path to consistent trading. i'm joanna and schwab is the better place for traders

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. hi, everybody. i'm contessa brewer. here's your news update this hour papa john's reached a settlement they will mutually agree on independent director to replace him and if not named prior to shareholders meeting, his term

will expire and drop two lawsuits against the economy audi is recalling nearly 75,000 cars and suvs in the united states because fuel leaks in the engine could start a fire the recall involves the model years 2015 through 2018. jeff bezos with net worth. and kylie jenner the youngest person ever as a self-made billionaire on this list worth more than a billion because of a cosmetics company the first major parade of mardi gras this fat tuesday morning. the zulu parade had several floats and a marching band formed in 1909 to pay homage to zulu warriors. that's cnbc update

>> thank you morgan brennan for the market flash. >> kelly, another stock that's moving back towards session lows right now. that's transdigm aerospace parts provider to the defense to the department of defense and elsewhere. got a tweet actually from congressman tim ryan of ohio saying transdigm is price gouging the federal government and we need to put an end to it. congress cannot allow government contractors to take advantage of the taxpayers and calling out these abuses, not the first time he's done this via twitter but adding a link to an article that references a pentagon inspector general report released last week that found transdigm with excess of 47 parts purchased by the dla and the army down 2% right now and had been higher prior to this comment from the congressman. back to you. >> morgan, thank you very much

the fda has cracked down on retail chains including walgreens that it thinks are not doing enough to prevent minors to buy tobacco products. hi, aditi. >> reporter: scott gottlieb said the agency has done more than a million inspections and are concerned about the rates at which some chains are selling tobacco products to kids among top 15 offenders, walgreens, exxon, shell, 7/11, kroger and walmart the fda sent a letter to walgreens specifically asking for a meeting to address whether there's a corporatewide issue, the top violator among pharmacy chains and wall dwreegreens hasa zero tolerance policy towards minors talked to squawk box today about the findings and consequences.

>> they have a lot of repeat violations across their individual outlets >> reporter: the fda sent letters to more than 40 companies. the agency said might be marketing e-cigarettes illegally. back to you. >> aditi, thank you. big deeper into this issue and several others as we're joined by dr. john torres, nbc's medical correspondent. welcome. good to have you on "power lunch. let's start with the fda sort of putting 15 national retailers on notice is there anything the fda can do that is really not already in the law or is it really a case of the fda using the bully pulpit to put public pressure on these chains >> i think it's a combination of multiple things. they can put pressure because right now as scott gottlieb mentions in the past, we have an epidemic of these type of e-cigarettes in teenagers and that's a huge concerning thing

but also, the power of the law behind them becaus law recently changed to let these nicotine delivery devices as we call them and looking, basically the who's who of retailers. corner convenience stores, the biggest farm spharmacies out thd walgreens want to talk because they had a violation of 22% on the ones they inspected, meaning when they went in there, selling these products to teenagers at that rate of 22% and so it's something very concerning especially from a health perspective. >> this was not just the e-cigarettes that he was driving at here as i understand it but also tobacco products where i believe in most jurisdictions, it's forbidden to sell to people under the age of 18, some cases even 21. let's move on to another story really alarming and that is a very sharp rise, more than 150,000 americans died from alcohol, drug induced causes and suicide in 2017. that's more than twice as many as in 1999

it would seem that the three alcohol-related drug related and suicide are part of a similar picture. >> they are and like you said, doubled, more than doubled since 1999 to 2017 but the big driver behind that are the drug deaths that are coming about because of opioid deaths from either prescription or over, non-prescription they get off the street, synthetic opioids. the example i can give you, two decades ago. synthetic opioids accounted for a thousand deaths a year fast forward, now it's a thousand deaths every two weeks. that's how prevalent these have become and dangerous they've become but on top of that, the alcohol-related deaths and the overall suicides as well so the big concern here, there's a couple of things one, what we seem to be doing isn't working well as a lot of people would like. myself included. so there's something else that needs to be done and some experts say we need more systemic changes across the

country and hopefully that helps out. >> let's move on to item number three and that is the reported cure or long-term remission of a patient with the hiv virus and it was achieved via a bone marrow transplant. my question is, as a long-term treatment for hiv, is bone marrow transplant a scaleable, affordable kind of treatment or is that not likely to be the way we ultimately subdue hiv and aids >> i think it's the latter i think it's not likely to be the way we subdue hiv and aids if you think about it, 2007, the berlin patient, been hiv free ever since and now the london patient and also the deuce

--- -- can't be done on anyone with hiv or aids but people with blood cancers and they needed that kind of treatment, so they adjusted treatment to hopefully get rid of hiv as well and looks like they've done it in these cases but what it does do is kind of opens up the box to research saying, okay, we have an understanding of what's going on we know what to target, what genetic mutation to target on the one certain cell and hopefully gives more advantage in the future going forward. >> that sounds like a biotech solution rather than a bone marrow transplant solution. >> and hopefully that's what comes about because it needs to be something scaleable across the world to not just us but developing nations as well and get them in the hands of those that need them on an obviously very cost-affordable basis. >> dr. john torres of nbc news thank you very much. appreciate it. >> you bet >> what would a cure for hiv mean for the biotech space let's ask alithia young.

there have been companies leading the charge for hiv treatment. what does it mean for gilead >> very interesting what was announced at this medical meeting around the patient with the bone marrow transplant but i don't believe it's particularly scaleable. you think, 950,000 patients diagnosed with hiv and about 800,000 patients in the united states on therapy. you can't do bone marrow transplants for all of them. with gilead, we're made positive on this company. gilead is a leader in the space. 80% market share in the united states they also are, you know, innovating so much that, you know, it's almost casual to take their drugs, like an oral pill once a day with very limited side effects and very good efficacy so overall, right now, they have been able to almost functionally cure and have people live almost in a remission for years >> so you're saying for now, this doesn't represent, you know, and i say a threat, it's fabulous news that these could

be cured all together but gilead could continue to have these treatments on the market why is it that bone marrow is so hard and dangerous to do and could that be an area of innovation, if it does mean cures? >> it's done in oncology fairly often with some cancers but basically taking the stem cells out of the body and putting them back in. so it's a complicated process that has some level of mortality rate to it so it's not like taking a pill or an injection, it's a procedure and it has real risks related to, this is something a little bit different than scaling for that many people that would have hiv. >> sure, and so patients might feel like it's not worth the risk, basically kind of live while taking this other treatment. backing out from this, we do seem to hear about a lot of treatments these days that are advancing cures even in areas from everything ranging from eye problems that lead to serious blindness to some other things like we're talking about today

is that because there's been so much research and development during this bull market? why is that and how much longer do you think this could persist. >> that's why i love my job because this is very sustainable. we're in an innovation boom in biotech and it's led by small mid caps as well so many small mid caps on the scene that are doing very interesting things, whether cell therapy, gene therapy, rna interferen interference and gilead bought a company that has a cellular therapy as well and a lot more innovation with novel modalities rather than taking pills and able to get more gentlemetic causes of these diseases. >> this is a big perhaps naive and sort of fresh question but where is biotech likely to have the greatest medical impact and which companies are likely to reap the rewards of that is it in cancer? where is it? >> that's definitely not a freshman question. very, very complicated and

interesting question let me call out a couple of areas that come to mind. certainly, oncology and we have learned the power of harnessing immune system. hematology and oncology with cell therapies and modifying cells, allowing the body to fight the cancer so that's definitely a big innovation. a lot of companies that have the buyer on that. a lot going on in rare diseases like muscular dystrophy and companies i cover where these were diseases you had to live with and progressively get worse and curing these diseases. sma has been a very big case where gene therapy has led the charge and patients are potentially going to live longer because of the cures they're seeing there. >> alethia, where would you say, under the radar but big opportunities in the next couple of years >> i don't know if it's under the radar but two or three

companies i like leading the charge in rare diseases, focused on these dystrophies one is serepta all of these companies have in common, using novel modalities to address causes we weren't always able to get to. >> i just like saying novel modalities making me feel healthier and more well informed thank you for joining us. >> thank you very much >> alethia young what's driving these movers, plus, flip or flop's tarek el moussa will join us with his take on housing. that's coming up duncan just protected his family

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welcome back to "power lunch. let's check on some of the movers today willis towers watson higher on reports that eiffel aon might make $24 billion takeover bid and shares sinking about 7% today in willis towers about the same amount. align technology falling had to close all 12 stores as a result of arbitration with the

rival. down 6% and we end with the chinese internet company yy beat expectations for both earnings and revenue and you can guess the ticker shares up nearly 14% the bond market we go on rick santelli who tracks the action for us as he does every day at the cme rick >> good afternoon. yew be you've been scratching your head why are interest rates not more responsive looks like they were two and three quarters maybe going for the 277 high close for 2019 wasn't meant to be everything backtracked you could see more clearly on two day of 30 year bonds and pick up the theme of equities versus interest rates. s&p on top of ten year rates from mid 2018. clearly see they correlate but the last go-around, racistes ar kind of stubborn and variety of issues, the dollar index, melted a bit but darn close to 2019 and

even close to challenging the 97.50 high of 2018. >> thank you, rick up next, a look at the state of the housing market with the star of flip or flop. can you make money flipping mes? we'll ask tarek el moussa when "power lunch" returns. alpha seems more elusive today.

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welcome back home flipping returns are sliding to a seven-year low as reports point to a slowdown. u.s. single family flipped homes and condos down 44% let's talk to tarer elmoussa thank you for joining us. >> how are you >> how's business and the season kick off >> man, we are cranking. keeping super busy shooting season eight right now. flipping a bunch of houses, buying rentals and continuing to grow the company. >> what's your average profit? i know the most you ever made business 200 grand how would you say that your average profit stacks up to recent years

fallen a little bit? prices are all up. >> i mean, there's obviously different things affected the market and the profits vary on average we are running a net-net profit of $40,000 to $60,000. some houses we make $200,000 some we might lose $5,000. if we lose going into the deals we know we might lose. we lose 5% of the time. >> is it harder? >> it is harder. there's more homes for sale, more competition in general, the market is changing and as an investor i need to study the market and make sure i'm ready for tomorrow and focus on today. >> how do you know when a house is a good flip candidate and when it isn't? >> you know, ultimately it's what is this house going to sell for? after i take the purchase price, the construction price, what is that home worth? so when flipping houses you make your money buying the house. just because it's a piece of

junk doesn't mean it's a good flip you always make it when you buy and got to buy right. >> a thing we wonder is how many homes to have simultaneously going to turn a profit what happens when the more projects you have goingthe mor people involved on the job does this scale? how many projects do you have going right now? >> that is a very good point the most projects, most flips i have add one time is 74. i can tell you right now that was very, very stressful and right now, i think i have 29 flips going which is less than 74 but my profitability is probably the same because it's easier to manage those houses and there's a lot of costs involved. >> as you look at the entire waterfront of potential flip houses, is it easier to make money in lower priced houses where you may get them for a cheaper price, number one, and then you may because of the

neighborhood, whatever, employ less expensive fixtures and so on and so forth or make more money at the high end? >> you know, it is a case by case scenario. i'm in new port beach, california there's developers doing the super high-end projects. i stay away from those projects. if i come across a really good deal, i'll into one of them. i like turn and burn get in and out fast and the amount of risk is a lot less because in real estate it's all about time and doing a project to take two years the risk of the market shifting is really high versus in and out within 90 days and coming to risk the lower priced the better. >> also in your area, i would imagine labor costs are pretty high and with the market so strong do you have trouble finding guys and women to work on the on-demand you are in california which, you know, there's some red tape involved, too. >> yeah. you know what? so i've been flipping since 201

an my teams are really, really good they're rock stars and they're a huge part of the team so i have a set core group of people and we're really just killing it to be honest, i focus on out of state rentals. just bought ten more properties in georgia, oklahoma me and my business partner own that. >> how fast do you flip your typical property how long does it take? >> on a typical flip close and everything, between 120 and 150 days >> so four to -- four months roughly? >> yeah, somewhere in that neighborhood. >> can you come finish my kitchen? >> yeah, sure. where do you live? >> jersey. come on over. >> it's a long uber. >> yeah! you don't want to do it by uber. >> exactly. >> how do you manage properties in georgia and elsewhere are you going to them or do you have people on the ground? >> i have people across the u.s. on the ground floor helping me out. i have in-house property

management that manage the managers and out of state properties so over the years i put together a fine-tuned system and great team, great support and to be honest i say this all the time i'm not quitting buying the representals until i own 10,000 houses and i'll do whatever it takes to get there and super excited about it and motivates me and drives me and why i get up every single day. >> is christina holding you back >> me and christina, we run a lot of businesses separately and the rental properties are my properties and some of the flip stuff we do separately, as well. >> is there going to be a tarek show 10,000 -- come on. the tarek el moussa show. >> i'm shooting a pilot right now for my own solo series with hgtv and then i'll get a solo series the concept is i go in there and mentor new flippers, rookie flippers and make sure they do everything to be successful. and a lot of times i might be

going in there and bailing somebody out in trouble by giving advice and holding their hand through the process to make sure that they're a success and the current episode i'm doing is a young couple and they have the life savings on the line and if it goes wrong they lose money and not a good thing so i'm giving it everything i have. >> have you met the prophet marcus lamonais? >> oh, i've never met him but that is a great show he has a great show. >> well, you are talking about there sounds like it tarek, thank you very much check please, if we have time for it. probably just ate it just ate the check okay, paint a picture for me.

uh, well, this will be the kitchen. and we'd like to put a fire pit out there, and a dock with a boat, maybe. why haven't you started building? well, tyler's off to college... and mom's getting older... and eventually we would like to retire. yeah, it's a lot. but td ameritrade can help you build a plan for today and tomorrow. great. can you help us pour the foundation too? i think you want a house near the lake, not in it. come with a goal. leave with a plan.

td ameritrade. ♪ thanks for watching "power lunch. that was fun. >> great hour. really good. "closing bell" starts right now. ♪ good afternoon welcome to "closing bell." i'm wilfred frost. >> i'm sara eisen. >> airline executives speaking out today. what southwest, delta and united have to say about global growth, u.s. growth, consumers, competition, oil prices and much more those exclusive interviews coming up. plus more chevron ceo michael wirth is here. we have had three different rally attempts up and down and up and down. higher right