>> fed eck >> taiwan semi >> nvidia. >> guide wire software up to new high us. >> i was waiting for you to ask yourself what your final trade was. >> still talk iing to himself >> a few companies hemt care, yes >> good stuff. thanks for watching. >> thanks for that welcome, everybody here's what's ahead. a rare call on apple today as one analyst cuts the stock to a sell rating. we'll talk to him about the risks he sees as the stock hits all time highs plus sh, it's officially the longest bull market in history, but are signs emerging that we could be starting to get a bit frothy we'll explore that topic and who knew there could be such big money in a product at the low, low price of free. but we begin with today's markets and seema with all those numbers. good afternoon >> good afternoon, dom

u.s. markets, here's where we stand. we're lower, fractionally for the dow, s&p and nasdaq s&p still well above the 3,000 mark. here's what's leading us lorwer. a lot of weakness in technology led by shares of cisco citing more competition from lesser known hardware makers, cisco shares on track for its worst day since early august down 7.6%. other names, broad com and apple tuning down as well. big question, what this will tell us about nvidia both chipmakers reporting earnings after a the bell. applied materials up 74% and nvidia up. those results due after the bell >> thank you very much we begin todaywith the tale of three big dow drivers. you've got apple, walmart and disney all hitting lifetime highs today in what's been an amazing comeback for these three stocks take disney, first off

the stock did plunge when ceo bob iger warn ed about his cable business back in 2015. it then traded and treaded water r for the next three years but in 2019, it's up 37% as it's it streaming strategy is start iin to pay off then there's walmart that stock sunk 10% when it slashed its sales forecast as it invested heavily in e commerce initiatives. today, it's up u 79% since then then the dow was rampant in january when apple warned that iphone sales could take a big hit due to chinese ksconcerns since that time, the stock is up 66% and apple is with where we begin with the rare downgrade of the stock to a sell. i'm joined now by the analysts behipd the call miguel and na hall, this is an amazing issue right now because there have been so many questions brought up about happening overall with

apple. but you say that all those issues will result in a lower share price eventually, so what's the thesis behind that? what's going to take apple down? >> sure. so we conducted a survey online survey of 600 u.s. consumers and found that iphone sales will be b down at least 5% year over year in 2020 are you going to have a 5g cycle? sure, but do you want to pay pique multiples on pique earnings jongs. so now back to the 5% year decline we expect for iphone revenue. not a big differential but here's the thing december quarter, you always have piquing in year over year growth for iphone and you always have bottoming in year over year growth in the march quarter and so we expect and usually about 1,000 basis point differential between the december and march quarter in terms of iphone revenue. so we take that information, knowing that what guidance is about, 3% year over decline,

believe that iphone revenue is going to decline 3%. where as consensus expects acceleration that's shown to be wrong so that's a big delta this that's the big catalyst for drivering the compression the that we have seen compress back the multiple expansion we've seen over the past six months. now there's a ton of bull arguments out there that have been driving that multiple expansion. we could probably spend an our here talking about why that multiple expansion is or is not worth it i'm happy to go into that in more detail. >> we know kind of your negative thesis there have been other angalysts who say that a driving force behind this stock is not necessarily just the iphone upgrade cycle or what's happening with services. it's fkt that the cash balance at this company is so massive that they can afford to pay off shareholders and dividends in stock buybacks and that could drive multiple expansion do you buy into that z >> no, so they've been buying back shares.

been increasing debt, however, i would point out that over a past five years on average, what you've seen is an offperating profit of about 60 billion plus or minus 50 billion. when we do projections, we don't see that changing a lot. what you did see in the past fiscal here is that product gross margins came down about 200 basis points year over year. that more than off set the increase in services gross profit, which is tied to that install base and that install base is not growing. rig right? and so you know, yes, you are getting more value from services from your installed base but there's a limit on that. and we've done extensive work on what that limit is and we think we're getting close. growing 11% year over year after fiscal year '20 because what new services are you going to layer on right? then you look at what their product gross margin is relative to other consumer electronics. there's still a significant

premium. we expect that to come down that's why we expect '20 profiting to be town year over year a much different call than what everybody else is talking about. >> thank you very much one of only 16% of analysts who have a sell rating on that stock. walmart hitting a high before losing some momentum. the company extending its streak of growth in the united states to 21 consecutive quarters and raising its outlook for the second time this year alone. online sales grew 41%. that's the best quarter of the yore so far for it the company highlighting grocery as a strong driver of that growth but while growth is great, walmart still faces competition from the likes of target and costco, which are outperforming it this year through all three here are ahead of amazon in terms of that particular metric. for more on this story, i'm now joined by scott sh, founder and ceo of our five capital and our own courtney reagan as well.

thank you very much and courtney, perhaps we'll start with you just to set this whole thing up it wasn't that long ago that walmart got punished because it was so far behind in e commerce. it said it was going to make sheez investments. seems like it's paying off now >> i remember the day clearly. probably many of us do we were surprised about the announcement to invest billions in e commerce as well as the supply chains. we hit it from all angles and the stock sold off sharp ly, bu even then, the analysts said look, it was shocking. didn't know it was going to happen, but it's needed and now, you're finally seeing that pay off. we talk so much about the stores and online tokt and this is oon example a company that's really worked that strategy well. and it's paying off for the consumer >> and what it doesn't have, scott, amazon does not have this brick and mortar perresence in any way, shape or form in terms whof what walmart has. what has you excited about the

walmart story as it compares to everybody else in the competitive landscape? >> i think there's two things. ni channel and automated their processes. if they're able to do that, we think they're win a lot of market share >> so one of the things we talk b about with driving market share, the grocery side is low margin very volume driven and very cyclical with regard the how people shop because they kind of look for the best prices does walmart really have an advantage when it comes to the grocery side of the business compared to all of other stores out there and even kroger, which does it for a live something. >> that's a really great question walmart's the number one grocer grocer in the u.s. we talk about omni channel, micro fulfillment. that's really going to drive their grocery business and their prices are fantastic if you look at our price check, walmart is investing, continues to invest a lot of money in their prices

>> so courtney, every time i go to a walmart or any grocery, the one thing i use to benchmark prices is the price of bananas it's fairly tight. pretty cheap walmart seems to always have the cheapest prices on those bananas when i go and find them. is that grocery key to walmart's success going forward do they need to perishables business rather than anything else in the store? zpl we talked in general b about grocery and yes, grocery in general, yes, it's part of those online delivery or pick up program, but fresh food in particular was a call out. they didn't go as granular as bananas and you know jeff bezos really loves bananas so they're pretty priced pretty low at whole foods as well, perhaps better than some of the other products you see there so that's a funny one to pick out. it's a repeat traffic driver you have to refill groceries often. i asked today when we had a media call, are you picking up new customers or is this an old grocery shopper that is using new options to get groceries like the delivery and as you

might expect, thiey sort of sai a little of both but there's new business being generated we don't have real metrics yet, but it seems to be moving more in that direction. >> the idea of omni channel, there are so many ways to get groceries. there's third party delivery services walmart has been advertising a long time the pick up option how important is that side of things to growth versus the traditional i go into the store with my cart and then go and pick things out? >> so going with that courtney said about fresh, the money they're putting into omni channel, that opens up a new channel to walmart on the coast, they don't have a lot of market share. places like new york and san francisco. so we think for the work they're doing in fresh, it opens up enormous potential for walmart to grow their share over the next couple of years >> one more comment scott to you before you leave

what would derail this thesis, this bull run for walmart shares from record highs that it's at right now? >> i think the thing we worry about most, their foreign forays, the money they lose overseas if you look at the results this morning, fantastic, but the u.s. is carrying this business. absolutely carrying it if you look at the international businesses, they're still struggling so we would say you know, it's nice that the u.s. business carrying it, but be careful about the international. sxwl scott and courtney, thank you very much. great discussion on walmart and by the way, if you want to hear a primary source, walmart's ceo will be setting down with becky quick at this year's evolve summit in los angeles tuesday. you can still register and attend in person head over to cnbc. disney rounding out the dow darlings, the stock is still the best performing stock in the dow this week up nearly 8% on the strong launch of its disney plus service. now that service surpassing ten

million sign ups with a good portion of new subscribers coming from its deal with verizon. so will these subscribers stick around with us u now is managing director at ubs. he covers media and telecom stocks as well thank you very much for being here 10 million some of them are verizon are they going to stick around and continue to pay that monthly bill >> well, verizon subscribers will definitely stick around it's a 12 month deal but i think the percentage of contribution from verizon was low versus the ten million we don't know, but our guess is it's in the sort of f two to three maybe four tops. i think a lot of these subscribe ers came on before the verizon deal was announced >> so if that's the case, can we say that the bullish move that we've seen over disney stock in the last couple of days is justified given that kind of shocking number? especially when you compare it with the total number of subs that perhaps a netflix has in the u.s. or what hulu has in

general. is that a fair comparison to make. >> yeah, it's early days for disney i think the demographic that disney's going after is narrower than what netflix is i think the agreement with verizon is a great deal for both companies. it hasn't kicked in yet. you're just starting to see the marketing and i think that the contribution from there is yet to come so we think a lot of growth left on the domestic and international side for disney plus u >> is there a worry at all that you take a look at these streaming services, it seems as though there's an a la carte option for just about everything out there. that it's becoming like a la carte cable all over again, traditional cable, and eventually, people will start looking at making competitive decisions about which ones they want to keep and pay for as opposed to just having one together in one massive bundle >> yeah, and there's more to come we're going to have the hbo max in may we've got march, we're going to see the launch of peacock from nbc universal comcast and cbs

all access is investing in more con tept apple's going to bulb bulk up. there's more to come you saw a recent announcement from fox that they're going to be putting, number of other carriers they're putting content that's on live tv on to their platforms sooner so the world is changing very quickly. i think it's going to put additional pressure on the bundle right now, we're seeing 4 to 5% declines in the number of customers or subscribers that have the pund l. we think that's going to continue there's a lot of change going on for sure >> there was a time when we were on this network talking about this idea that netflix had left disney in terms of market can and now it's back the other way around disney right back on top again so as you look at netflix versus disney, is there one that's better than the other specifically when it comes to streaming? >> specifically when it comes

the stream iing, we have two different stories. a lot of the value certainly the majority of the value is being derived from disney. their media business generates a lot of cash. still growing nicely with great roi but even the consumer products business is set up for a good 12 months as it relates to stream, netflix is the behemoth right now. they have dominant market share in the u.s dominant market share dploeblly and we don't see that changing soon but if you look at the up and comers, the guys that are new to it that are going to make we think a lot of money down the road, disney is leading the pack we're very emotional about hbo max and at&t so there's the old landscape and the new and disney is going to do very well on both >> john, thank you very much for joining us on those disney thoughts right now, we've got a news alert on the cdc and vaping and frank holland has those details. >> latest numbers from the cdc

show another uptick in deaths and illnesses related to vaping. they're now reporting 42 people have died from vaping related illnesses. an increase of three from last week they increased nearly 6% from last week. vitamin e acetate has been identified as a possible cause, however the investigation is still ongoing. back to you. >> thank you very much for those numbers on the cdc and vaping. here's what else is ahead on the exchange >> coming up free maybe the key to future profits for brokerage firms. we'll tell you why plus, consumer reports is back on tesla's side. the company made a profit. and the stock is up 47% in three months is the tesla turn around for real and lower prices, higher stock a look at what could be the key to peloton's future.

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new account openings rose 30% after cutting stock trading commissions to zero. other major firms followed that. investors are focusing more on the increase in accounts rather than those zero fees in the last month, schaub,

e*trade and amer trade are higher by about 10% so why are investors worried about that move to zero commissions let's bring in steve grasso. steve, i remember when this happened all these stocks tanked. for a good reason. what has now change d? what are investors eyeing to make up for that lack of $5 trade commissions that was industry wide? >> it's the net interest margin these companies make their money from the share from when you look at an e*trade or schaub or td amer trade. mer trade has the lowest come frs that revenue source if you look at shub, 64% so if you look at all of those names, when you really you know take an aggregate of them all, they're making the bulk of their income away from where we think they're making the money from, which is

fees >> when you say net interest margins, you're referring to the fact that when i open an account at schaub or td, i put cash in there and then they make money off the asset or cash that i put into those accounts, right >> exactly so what they're borrowing money for in the spread of what they're paying interest to have accounts that are sitting in cash and actually what they could lend that money out for. so a charles schaub makes about 58% from that procedure and e*trade makes 64% of theirs from there. tda ameritrade doesn't own a bank they only derive 27% of f that revenue from net interest margin where as the others are double that and a little more than double >> there's also a controversial topic about what's called payment for order flow

that's because many of these brokerages do not execute the trades that you and i put in as retail investor, somebody else does how much does that factor into some of the bullishness? >> so i think that's the head wind where a payment for order flow dynamic to this, but i think more importantly, what are they going to make off that, the bulk of the new accounts that are going to be there? there will be upsells to this business model, whether it's on margin, they'll loan them cash on margin. so don't get enamored by the lack of fees that's what the clientele or the investor base is focused on better earnings going forward. what they're going to do with that cash when you look at someone like a charles schaub who gets a 31% increase from month over month in the amount of accounts they open up >> all right, thank you very much coming up on the show, we

are now official ly in the longest bull market in history and one of our next guests says we are not done yet. he's going to tell us why and where he's putting his money, but first, the warren versus billionaire battle heats up. peloton is pedalling new products and apple is throwing shade am chrome books and the ray czar zone. at a aadn e her side of this break ♪ ♪ ♪ ♪ ♪ ♪ ♪ - when i see obstacles, i create opportunities. (soft music) - when i see adversity, i find a way.

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it's time for rapid fire and here with their takes, bill griffith, rahe lerks and robert fral and robert frank >> we are ready to go. >> first up, fire it up. the war of words between senator warren and billionaire investor leon cooperman continues cooperman responding a short while ago on the halftime report to warren's wealth tax ad campaign that aired on our network this morning, cooperman claiming the tax makes no sense and may even not be constitutional cooperman did say he's willing to work with is that right warren on the wealth tax plan although he wants to be done with politics at this point robert, seems more logical to start with you you do deal with the world of wealth and billionaires. what exactly do cooperman and

warren have right or wrong about this scenario? >> we're in a very interesting political environment. there's this famous line from fdr where he said i'm proud to be judged by my enemies and he got elected that year basically because his enemies were the big utilities that the rest of america hated. and elizabeth warren has found a pert villain and foil in this election of billionaires who are complaining about the wealth tax but because they're being taken out of context, can be seen by the rest of the public as playing victims or whine iing au they don't want to pay more taxes. e they have only helped her campaign perhaps more than any other segment of the population. they have been a gift to warren. note to all the billionaires out there, either be quiet or say i'm lucky, we are fortunate, we want to pay more, but here's another way to do it >> all right so this is interesting because the point's been brought up a lot that we are just amplifying these conversations by putting a slight in the media on it.

because these billionaires take to twit ter, lloyd blank fine di in just the last hour. i remember another quote saying if a forest falls in the trees and no one's around to see it or hear it, did it really fall? is that the tactic you should be taking with these rich people out there with warren and sanders and the progressive left. >> sure. i agree that maybe they need to be a little more grateful for wh they have at this point and not be so combative with their messaging. but name me another country on the planet that does as much soul searching politically and economically than the united states maybe great britain with brexit but we are constantly battling here we're like a start up that we can't decide what business model we're going to use are we a capitalist society? socialist? hybrid of the two? you know and you know, what's going on between lee and senator warren is hardly unifying for our country. >> hardly, but just to your

point, i agree that my speaking on it, you're amplifying the issue, but i can also eed out by name, wanting to defend yourself >> and lee's not a shrinking violet z >> no and if you haven't seen his colorful comments, go to cnbc.com >> we can't say them here. >> why can't we say them here? >> all right guys, next up, our shares of peloton about flat today after spiking yesterday on a report it is set to launch some new fitness products including possibly a cheaper version of its treadmill and new applications so who are we going to turn to diana oleic joins us with the latest there she's our fitness gur. is this something we should all be paying attention to for peloton? >> i think so, but peloton is nort confirming or denying report of a new rowing machine, but i interviewed the ceo when

the treadmill was still in testing about two years ago and he claimed that $4,000 price point was much lower than comparable slat technology treads which can cost up to $15,000. he also pushed the zero down finance, u putting it at 110 bucks a month. as for introducing the tread and other products, he said peloton was never just about the bike. >> this has always been in the cards. we have more products on the horizon in the coming years and we're going to be you know at our core, we are technology and innovation shop. >> given that, the report of peloton on apple tv or the apple watch, not out of the question dom, discuss >> oh, should we i'm going to start with you. you seem like you're a fitness oriented person. are you a peloton customer. >> so, so i was a huge soul cycle person now i go to equinox. here's my thing. i don't know the price point is what's exclusionary to me per se i would just love something

smaller to fit in my tiny new york city apartment so i would love to see something that works for sort of urbani trtes who lie if modest apartments >> bike is big and heavy >> are yougoing to spend $4,000 >> no and i don't know that the answer to peloton's problems is slightly cheaper or different hardware what they need to do to move upstream and frankly start making money because if they can't make money on $2,000 bikes and $4,000 treadmills, they're not going to make it on cheaper hardware they need to figure out heart monitors and apps. the service side that's where i'm curious about these apps and what they're going to do. that's where i think their growth hto be as o opposed to we're going to keep doing hardware tons of bikes, hardware, mirrors on the wall. there's a lot of that. someone can replicate that

it strikes me that if they want to set themselves apart, they have to move up. >> when they launch add tread, they said it was never about the tread. it's the jai nor mouse screen. the yoga, boot camp, then they push it on to the apps then you u get more people. but you can't discount the fact that peloton is a cult and i do not use this word lightly. you should see the facebook page the spoupporters. the size of the treadmill versus the bike people in apartments, i know lots of them, have the bike in the apartment. i think that price point on the dread tread you know, i will say that i like the tread. i have walked into the store many times and walked on it and walked out because of that 4, 0 $4,000 price point >> it's a big price point. diana oleic, our fitness guru, thank you for dropping by. >> could i watch an old movie on one of those things while i walking? casablanca >> nothing gets your heart rate going like an old movie.

>> a top apple executive is facing now backlash today after saying students who use google's chrome books are not going to succeed. now in an interview published yesterday, the company's senior vice president of marketing said quote, chrome books have gotten to the classroom because frankly, they're cheap testing tools for required testing if all you want to do is test kids, well maybe a cheap no notebook will do that, but they're not going to succeed now after facing backlash online, he took to twitter to clarify saying quote, every child has the ability to succeed. helping them do that has always been our mission but it seems like a pretty big mishalf from somebody who some say should have a eye for a message, you're a marketer, about whether or not you should be hocking products that way versus another >> i aagree. but once upon a time, apple owned a education business >> i remember them >> and little did they know they

were grooming a whole generation of people to enter who was to become the apple ecosystem, however, we are a testing obsessed education system in this country and until you change that, you're not going to gain any market share in the market for education getting an alternative to chrome book in there because apparently, it is the device of choice for those students who have to take these tests >> it's aneconomical reason though this is a $240 laptop as opposed to going to buy a thick pad. >> it's one thing to just trash a competitor that's fine to say their product is inferior. the education market is so sensitive because you're dealing with opportunities and the success of children and education, which is so fundamental. that i think in that arena, you just have to dial it down and say rules for going after your competitor in education have to be a little soft rer than regular. >> also, i feel like make your prices more competitive when trying to sell to schools.

i don't feel like school districts with all the other expenses they're dealing with, also teacher pay, that they should be spending a lot for laptops and technology >> to bill's original point, that's what apple did back in the day. gave steep discounts to educational institutions finally, we'll stay on technology mote rola is announcing that it is bringing back its famous razr flip phone, but with a 21st century update the new one is now an android based smart phone. it features a six inch touch screen as you're seeing there. instead of a key pad but will still fold in half like its original iconic design preorders begin the day after christmas and will begin ship ing in january, but techies, take note, the phone packs $1500 price target and yes, that makes it higher than many high-end versions o f the iphone right now. >> according to ortan, it doesn't have the highest most

powerful semiconductor in there. it is has last year's operating system if i understand correctly and there are others -- >> battery life probably not going to be -- >> and an average camera >> an average camera gasp oh, no no in this millennial like instagram obsessed society, absolutely not >> would you get one of these >> no, but to be fair. >> rath eer spend $4,000 on a treadmill. >> i would i always the last. when i'm into it, i'm into it until the wheels fall off. i'm an apple person so i will be until something super compelling gets me off of it. i love the look of it. i had a razr >> i'm all for throwbacks, but how about throwback prices $1500 is crazy for a phone like that. >> but 4,000 for a treadmill is not. am i right

>> i'm a proud owner of a dad bod and it's not going to change >> as am i >> golfers unite >> i'll walk more. as opposed to taking carts bill, rahel, robert frank, thank you very much. so here's what else is coming up u on the exchange. >> ahead it's officially the longest bull market in history. but are investors getting too euphoric is tesla at the start of its big turn around and cisco's big warning sinks the stock. that's all ahead on the exchange problem is corporations and the people who run and own them have purchased our democracy. here's the difference between me and the other candidates. i don't think we can fix our democracy from the inside. i don't believe washington politicians and big corporations will let that happen. the only way we can make change happen is from the outside. for me,

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all right. welcome back to the exchange leets look at some of the top stock movers of the day so r far. we'll start with shares of kis sew because the networking equipment maker down about 7 to 8% it's worst day on pace for since mid august despite up on the top an bottom line that's because the company lowered its forward guidance citing a slowdown in global spending due to trade uncertainty. sending the stock down to about 7 to 8% then we've got shares of

kraft hines down around 6 to 7% right now at this point. now that, those shares are being downgraded to sell from neutral at goldman sachs the bank has pointed to cost pressures and underinvestment in some areas then shares of beyond meat are actually up today merely by about 5% some analyst commentary coming out of that stock sending those shares higher. we are watching some of those moves in beyond meat specifically because there's a $100 price target on those shares now over to rahel who's got a look at some other news items of the day. >> and here's what's happening at this hour a los angeles county sheriff says the suspect in the high school shooting in santa clarita, california is in custody and being treated at a local hospital for a self-inflicted gun shot wound. according to the hospital, one female has died. two males are in critical condition. one male is in good condition.

zblncht mike pompeo is pushing member to fight the islamic state to take and prosecute citizens of f their countries detained in iraq and syria >> we must make sure isis never again flourishes that work begins with carrying out justice with those who ceo serve it coalition members must take back the thousands of foreign fighters in custody and oppose accountability for the atr atrocities they have perpetrated. >> and cigarette smoking among u.s. adults has reached a low. a decline of about two-thirds in the more than 50 years since the first surgeon general's report data still wshows that nearly on in seven u.s. adults continues to smoke that's the cnbc news update at this hour. dom, back to you >> thank you very much for those headlines. the bull is now still charging and investors are still optic. cointoacrdg a new survey. but is that move sustainable

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all right. current market boom is now officially the longest bull market ever with a total return of 468% over the course of the past decade. meanwhile, the latest aaii investor sentiment survey finds that more than 40% of investors are bullish. that's ajump from last week an above the historical average so does this mean the bull run won't be over anytime soon and what are they getting frothy from it? let's talk about all this with chief investment officer at center stone investors, also rich weiss at multiasset strategies at american century investments. i'll start with you here let's talk about whether or not this bull run still has legs because we've heard it before. bull markets don't die of old age. so i shouldn't pay attention to the longest one inry does this still have a ways to

go >> i guess it depends on what market you're looking at even within the stock market, there have been plenty of some sub sectors that have lagged behind >> although sentiment has been improving, it's at a stage where i don't consider that a negative or positive. just an indication f how people feel i'm looking at of more interest is the types of stocks that are really starting to kind of participate in the upside here so you had banks, transportation stocks, value stocks generally speaking, european stocks really lagging the u.s. indexes and recently, you've seen a lot of tail winds build behind the nonindex names that we've been focusing on. for me, it's too much cynicism to just say since people are bullish, you should be bearish, but looking underneath the surface, there are plenty of reasons to be optimistic for the

next couple of years >> all right so there's opt michig michigan m out there as the point points out in his twitter, we are at record highs. is this a time investors should be more cautious because it's now the longest bull market in history? >> yeah, there's a lot of reasons to be cautious, dom. i mean first of all, this bull market and this recovery now critically depend on the u.s. consumer we're not get iting help from overseas the manufacturing sector is weak growth is deaccelerating globally, so all eyes have to be on the u.s. consumer and when you look at things like retail sales, the housing market, even the r record low unemployment, you would expect more strength in housing prices, mortgage apps, et cetera so we're worry ied about that also, you got to keep your eye on interest rates and earnings the market is not necessarily horribly overvalued right now. but if interest rates stay where they are, if the fed's on hold or move higher and if earnings continue to decelerate or go

into a recession, that means this bull market is on thin ice. zpl a z >> abe, are there places investors should be looking towards or places where they can go to find that next leg of growth in this bull market >> i think well my independent of what kind of market environment we're in, at center stone, we always suggest people be diversifdiversified, or not o what's going to be the next big thing. over time, the it's been a better option to have a broader basket of names. ourselves, our preference tends to be towards or for non u.s. names, oftentimes domiciled in europe of high quality companies that have been kind of looked over or maybe have been under the spell a little bit with the negative headlines when it comes to european gdp and trade and

manufacturing growth and the brexit drama also weighing on stock prices, so we suggest caution in a general sense but not as a default in any particular given market and how we express that is to be diversified. >> i wish we had more time because it's a topic i think a lot of investors are curious about. thank you. we appreciate it shares of cannabis growth. a look at the problems facing the entire cannabis industry that's coming up mortgage debt rose $31 billion in the third quarter as consumers took advantage of low interest rates total u.s. mortgage debt now stands at a record $9.4 trillion higher than the pique hit in 2008 - at southern new hampshire university,

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well amid that sector having a rough time in 2019 with tillray as the biggest losers down 72% on a year to date basis. shares of tesla are surging over the past three months climbing more than 60% is tesla finally in a true turn around mode. that's coming up next. behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places.

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tesla sells have tumbled 39%. they also announced a surprising profit the stock is up 63% in that time span can tesla's turn around keep going? joining me is charlie grant, columnist for the wall street and collin over at oppenheimer thank you very much charlie and collin for being here. perhaps, charlie, we'll start with you you're the guy setting up the story. as you follow tesla, how is it looked and is it justified to be wear it is given the amount of optimism coming up over the past few months >> i've got to hand it to elon musk because i did not expect a

profit in q3 and i did not expect a $20 billion market cap on $135 million. that's impressive any way you slice it ternings report has plenty of weakness that should not be ignored. 39% decline in revenues in the united states. that's a problem for any growth stock let alone one trading at 30 times value >> that's an interesting analogy. collin, this has been the bare case on tesla for quite some time the metrics are not there to justify the kind of valuation it has. there's a reason why folks are picking up the stock take us through why it's justified. >> tesla have a material lead over othersin fleet. tesla has a two year lead in terms of their ability to deliver cars their demand supply at this point and a real serious way they allocate outside the u.s. which impacted their u.s. sales

in the third quarter at this point, we think they have a material technology lead in the drive train and their beat battery technology that leads to 15, 20% cost advantage as we see new products come to market we think they will be better, faster and cheaper than the competition. that justifies the earnings leverage that we see them demonstrate over the next several years. >> charlie, you brought up a good point it's at the center of a lot of this a lot of this company and success has been about buying into elon's vision buying into him as a visionary buying into him as somebody who can change the world is this very much about elon and his kind of personality or is there fundamentals that can justify it it's absolutely about elon and the lead in the new products that are coming and we have be pick up, cyber truck, i believe

it's called. let's review since the model 3 watch that's not made money over a cycle. the heavy truck in 2017, none of these have come to market. none of these exist in the world today. where are they where is the capex coming from the growth does not add up especially when home sales are going. production constrained or not. >> collin, as we take a look at some of these production issues, is this something you feel can be justified or rectified in the coming months and what will be you will looking at in the next report that makes you feel justified about the numbers. >> that queen made some material mistakes of the last few years one with the modelx design or the factory design it's an organize that learns from its mistakes. we think they are starting to hit their stride at this point

it's called elon are getting tired at this point. the company is generating positive cash flow they are taking market shares from competitors and developing products that are well out in front of their competition from our perspective, we see them continuing to extend their lead here. it really going through a full transformation >> all right thank you very much for that that does it for the exchange. power lunch begins now thank you, dom here is what's new at 2:00 walmart delivers on earnings the stock hitting a record high and it's not just e commerce boosting its business. we'll explain. another record day for dynamite disney the stock is now up more than 12% for the past week. is this as good as it gets for share holders. later, stop trading.