week. that's it for us this week. for the latest show updates, be sure to follow me on twitter, facebook and instagram, and i'll be back next week right heren "the wall street journal at large." thank you for joining me. ♪ ♪ >> barron's round table sponsored by: this week harley finkelstein on how the company is helping retailerses fight back against amazon. a barron's exclusive. why the sec is finally investigating, and barron's experts discuss how to invest in china despite ongoing trade tensions. barron's round table starts now. ♪ >> welcome to barron's round table where the sharpest minds on wall street meet to get behind the headlines and prepare you for the week ahead. i'm jack otter. we begin with what we think are the three most important things investors should be thinking about right now.

grubhub shares lost more than 40% of their value in one day. then pinterest plummeted. what's next? do you know enough about the stocks in your portfolio? we're now halfway through earnings season, and so far there's been little growth in profits. can the market rally be sustained in and in a barron's exclusive, the sec is now investigating why teachers across the country are being sold high cost retirement products, a story we first reported back in may. on the barron's round table tonight, ben, lauren and jack. jack, i'm going to start with you. the market took grubhub to wood shed this week. >> absolutely pounded, as you say. the quarterly results weren't great, the guidance was worse. there was a letter from management where, to their credit, they were pretty frank about some of the troubles to company. the chief executive said we believe online dines are becoming more promiscuous. you know, for the record, i'm not a swinger just because i don't care which which third party delivery company brings my

meatball hero. don't make me out to be a french fry philanderer, all right? [laughter] this company's having a hard time differentiating itself in a crowded field. >> when i heard that, it sounded like i could name a lot of companies that have that same problem. i mean, pinterest might be one with. then you've got the weworks and the ubers versus the lists. i think a lot of -- the lyfts. i i think a lot of these companies are getting disrupted by investors. >> it's a great point, and they can still continue that disruption. when you look at all these delivery companies, there are publicly traded pizza companies that have had a big advantage up until now, but suddenly every restaurant is a delivery restaurant. you could see them get hurt, but also the deliverly companies themselves struggle to compete with each other. go into any big market, you're going to see a half dozen different options for who can bring your food or how to pick up your food, order it online, just very crowded. jack: do you think more generally investors are starting

to get impatient with these companies who say, hey, we're going to grow forever profits? maybe not. >> that's been going on for some time with the storied stocks, there was stows supposed to be -- supposed to be a path to profitability. people are saying, wait a is second, this field is way too crowded. everybody's giving away freebies, i'm going to wait and see how it shakes occupant. jack: ben, tell us about the earnings so far. >> depends really if you're a glass that half full or half empty person. earnings have been -- company have been beating their earnings estimates no problem and at a higher rate than they normally do, and that's because the bar has been lowered really far. but earnings still aren't growing much, actually down a tiny bill. they'll probably finish up a little bit at the end of the quarter, but there's not much growth this to speak of. and that a hasn't been a bad thing for the market though partially because it turns out we don't need a ton of earnings growth -- >> that doesn't make sense. >> it doesn't, does it? but this is true.

over the long term, stocks follow earnings. but over shorter periods of time, the stock market doesn't do well if earnings are growing too fast or too slow, anything in between, they do just fine. jack: the goldilocks -- >> saw -- is that because people look forward? >> exactly right. next year probably around 9%, they're wrong, it's going to be closer to 5%. jack: and everybody knows that. >> everybody knows that. it might be a little higher or lower, but everybody know that. any growth is good. don't know what's going happen with the macro situation, global growth, etc., but earnings will probably be just with fine, and as long as that's the case, the markets should be okay. jack: let's move on to more of a pocketbook issue. lauren, tell us about annuities, teachers? what's going on there? >> as you say, barron's had an exclusive story in may highlighting what has been a festering problem, the practice of selling tax-deferred annuities to teachers for their

retirement mans. this is a ridiculous -- >> we should point out a 403b is a nonprofit equivalent of the 401(k). >> that's exactly right. this is a bad idea because young teachers in particular don't need to worry about having income in retirement, they need to worry about having income in the first place and putting money away and saving it. this is also, as i said, a ridiculous redundancy because their portfolios are already tax-deferred. so you don't really need tax-deferred product in a tax-temped portfolio. >> and their piece on annuities are quite high. in fact, some people say these sorts of annuities are sold and not bought, and the point is that they are great for the salesmen because they make a big commission, but what is a 30-year-old investing figure retirement -- for retirement 35 years from now really need in her portfolio? >> income through growth stocks. you need to buy things that are going to grow, going to compound and maybe some dividends.

but you really need to think about building a large portfolio. and you need to save. jack: that's very important. also you need the growth, and i guess what happens is because annuities can't really -- they have guarantees that stop them from going down, that sounds safe. but, jack, safety is not really what you need when, a, you have a pension and, b, i you have a job that's pretty secure for a teacher, right? >> it sounds too complicated. find yourself an index bond, set it and forget it. if you're young without a lot of money, you should be spending more time thinking about your job and less about your asset allocation. your most important asset is your present value of your future earnings. spend a little bit of time to get your index fund right, leave it alone, work hard. jack: not only think about it, but think about the right things. what's happening here is people who are not particularly financially savvy, right? and so when the salesman comes and says, hey, this thing is very safe, it's going to do

well, if you don't know any better -- >> the fees are high, it's too complicated, you can't do it on your own. leave it to me. it's not that complicated. read your barron's, you can do it on your own. jack: coming up, solid advice on how to invest in china. but first, shopfy's ceo is explaining how the -- >> we think that while marketplace may be a great place to access a different audience, fundamentally entrepreneurs large and small, they want to have a direct relationship with the consnsnsns ♪ ♪ ♪ ♪ ♪

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and is leveling the playing field for retailers getting crushed by amazon. joining me now, the coo, harley finkelstein. most people haven't heard of you yet, of course, they have used you. your stock is up more than a thousand percent, your company is now bigger in terms of market value than delta, ford, ebay. you've got famous clients, kylie jenner. so why haven't we heard of you, and what exactty do you co? >> it's very intentional. for a long time, shopify's been the brand behind the brand, trying to make entrepreneurs, small businesses and big businesses look really good by helping themself anywhere they want. the list riff to -- history of the company is we felt entrepreneurs had a hard time building beautiful online stores. it was out of their reach. going back to 2006 we created this piece of software to build a beautiful online store. and more recently what started happening is some of those stores got really, really big. kyler jenner, for example. so we began -- kylie jenner, for

example. around the ipo, 2015, we began to see the procter & gambles of the world, the gate raids of the world, the aerosols of the world began to come to shopify to build their own direct to consumer online business, and in aggregate we now have about a million stores in the platform that have sold more than $100 billion on shopify. jack: why is this such a big deal to create this platform? it's just soft area. can't -- software, can't anybody use it? >> the idea is if you know how to use e-mail, it's very, very simple. but as you grow to be some very large retailer, you never have to leave the platform. it's very simple to start and very scalable as you grow. and the other thing as is you may want to cross-sell on things like facebook, instagram or other social media platforms. shopify's really the world's first e tail operating is

system. jack: am vonn does this, ebay does this, why would someone want to work with you? >> whether it's amazon, ebay or any of the vertical-specific marketplaces, what they're effectively doing is they're representing customers to these brands. it is their customers they are saying to you you can use them if you want, but at a certain point, tough pay for them, or if we actually want to compete with you, you can't have those customers anymore. we believe independent businesses are much better, and consumers are demanding they want to buy directly, so we think that while marketplace may be a great place to access a different audience, fuldly entrepreneurs large and small, they want to have a direct relationship with the end consumer, and that's what shopify does. jack: one of the interesting things to me as i look at the economy right now, obviously, disruption is a huge part of it. but you are disrupting the disrupters, amazon, e -- ebay, and helping the old line mom and pop retailers.

your founder said that he was arming the rebels. so can you explain that analogy, and again, to me, it sort of plays into like the craft brewery thing and people wanting some veracity in the brands they're buying. >> so many great entrepreneurs are great at making a product, a beautiful pair of shoes or a motorized skateboard. the problem is historically they've had a how far time getting those into the hands of consumers, and they were forced to use an intermediary. and we really feel like consumers, they want to buy the products and people making the products. but that was out of reach for a very wrong time. and i think what technology has allowed shopify to do is build software that for $29 you can start your own business, and it can be really large without ever having to need anything else. jack: this is your new venture in a sense, you're doing fulfill m. you've got robots in the warehouse, and you're sending it in the store's own branded boxes. >> when we looked at our

customers, we're a global company, but the majority of our merchants today are in the u.s. we realized that one pape point was fulfillment, and there's all these warehouses that are sitting empty or have some capacity, but they're not able to access customers and brands who may want to use their warehouses. so we'll creating this network where we're going to aggregate third party warehouses all over the united states and using our own management system and some robots, we're going to help all these entrepreneurs better fulfill their orders and compete with some of the delivery expectations that consumers now have because those large marketplaces. jack: and make it affordable for them. >> very affordable for them. jack: you just announced this week you've with hit one million merchants, come back when you have two million. >> i love that. thank you so much. jack: coming up, our ideas on what you can do to improve your portfolio. but first, despite trade tensions between the u.s. and china, there are opportunities

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♪ ♪ >> it's hard to find a region that offers more opportunity and more danger for investors than china. this week's cover story, barron's helps invest terse navigate that tricky market. i want to start with you first, lauren. give us an overview, what are the big takeaways from the cover story? >> big takeaways are that while china's in the news for a variety of upsetting things -- the trade war, the hong kong protests -- in fact, it's a wonderful place for investment because the population of people with money is growing and growing very rapidly. so there's a whole array of consumer companies that are going to benefit from this, and we're not just talking about the

wealthy people in shanghai and beijing, we're talking about third and fourth tier cities which together represent a population the size of the u.s. jack: that's an amazing statistic. leon, we're journalists talking about this, you're putting money to work. to you agree with what lauren had to say? >> i think's totally correct. the story is around the revolution of the consumer, how changes in consumer behavior are happening as that consumer becomes wealthier, and they're going to make choices which benefit consumer companies that can serve them. jack: it's just hard for me to talk about china though without all of those headlines that lauren mentioned. the trade war must have some sort of an effect on the market, right? >> yeah, no doubt people are concerned about the impact of the trade war on corporate spending, for example, but the choices that the consumer is making is no different to the choices that we would be making. you spend what you need to do to get your kids to school. if you're changing your consumer habits, you do so as well. ultimately, those trends are still here, and they're going to last for a long time.

>> and we often hear about the questionable reliability of data coming out of china. you're not worried about that? >> well, at the end of the day i'm not going to say the gdp forecasts are perfect, but if they're going up, they're still growing at a rate that is faster than rest of the world, and you really want to focus what the result ares for the businesses look like, and those are still reflecting -- with the exception of a few sectors, the consumer is strong, and there's demand for businesses who do things right. jack: give us an idea of one of the sectors that you like. >> you want to be exposed to the consumer. it could be everything to do with education, it could be new technology like the, you know, food delivery apps in china are ten times the size of what you have in the u.s., so success. again, away from old china which is state-owned enterprises and much for more towards new china. >> let's talk about some companies. in the round table participants mentioned alibaba, jb.com, these

are companies that can be bought on u.s. exchanges that they really like. what are some of the companies you really like in the area? >> yeah. so i would definitely say ten cent and alibaba are incredibly well positioned. you have seen that baba continues to bang out extraordinary numbers. you could add a few other u.s.-traded ones like new rental education which is also incredibly strong. and food delivery, that's mei twan. jack: so, lauren, for those investors who may be worried about buying stocks in china, there are ways to play the chinese consumer without actually purchasing a chinese stock. >> that's correct. you could purchase a french stock, lvmh. that was one of the picks. the company has a big presence in china in luxe arely goods -- luxury goods, and this is for people who don't really want to buy the a shares in china, the h shares in the area but really want to stick to a u.s. exchange and to non-asian exchanges. >> we were talking about grubhub

early in the show. you mentioned the chinese food delivery market. you're not worried about companies there getting grubhubbed? [laughter] >> good point. well, again, grubhub is absolutely dominant. they've got one competitor that's less than half the size. they do ten times the volume. they take a lower take rate than what grubhub does, but because they're so efficient -- >> this is mei twan. >> yeah. jack: you don't just invest in china, you invest around the emerging markets. i've been saying it for a while only because i read it from some of these guys that are saying emerging looks like a screaming bargain in terms of the valuations of those stocks versus the rest of the world. at the risk of you having to talk your book, do you agree? >> valuation is important, and it's cheaper than other asset classes. you guys talked about this, earnings growth is still strong, the last five years have actually been the anomaly where earnings growth has been slow,

but we're still confident that it's here to stay. jack: i i'll talk your book for you. not only has your funden the emerging market index, you've beaten the s&p 500 which is a neat trick. >> not my bogey, but i'll take it. jack: thank you very much. up next, round table car like i treat mine. adp helps airtech automotive streamline payroll and hr, so welby torres can achieve what he's working for. about being a scientist at 3m. i wanted them to know that innovation is not just about that one 'a-ha' moment.

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♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ >> so, jack, sometimes there are conflicts between making money and doing good, but you seem to have found a great example of both actually working in concert. >> don't make me out to be some kind of sustainable investor here. i'm against public displays of affection, that includes tree hugging. but you don't have to be a treehugger to be, i think, excited about alternative

energy. there is rapid growth ahead for solar and wind. and it doesn't have to do with politics, it doesn't have to do with taxes. it has to do with costs falling. both of these are already quite with competitive with fossil fuels. jack: if you're a utility, obviously, the ray of sunshine, the i blowing wind is free marginally, but there's a big problem. i hear people say, great, what happens when the wind stops blowing and the sun stops shining? >> it's a really important point, and the key here is batteries. it's what's happening with the cost of batteries. it has plunged over the past five years, it will continue to bad luck in the years ahead -- plunge in the years ahead because everyone's making battery technology better. that same battery technology can be put to work by utilities to make better use out of their solar and wind power. when you put those things together, you've got really, you've got another big inflection coming. and this might not be a green new deal, but there's plenty of green to be made if you're a

stock investor here, you know, companies like first solar, albemarle, plenty of stock opportunities. jack: and very quickly, i hear about the loss of jobs, coal mind ifers -- miners being put out of work. >> politicians will have to address that, but there are also going to be jobs gained from people building these new generation capabilities. jack: we want you to go into the week ready to make your next move. lauren, ben, give us one actionable idea. >> i'd like to highlight a stock pick from our china round table, that's -- [inaudible] insurance. it yields about 1.8%. this is not only an insurance company, it offers fin-tech play, a banking play, a telemedicine play. it's a play on the rising china middle class. jack: and ben? >> buy the fangs with two as. some are doing well like apple, some are doing terribly like

netflix. we have two months at the end of the year where they're going to all start working together. jack: to read m check out this week's edition at barron's.com. that's all forw exclusively new york stock exchange week. have a great weekend, everyone. next week. >> from the fox studios in new york city, this is maria bartiromo's "wall street." maria: hello and happy weekend. welcome to the program that analyzes the week that was and helps position you for the week ahead. i'm maria bartiromo, thanks for joining us. coming up, the former ceo of ford motor is here, mark fields on the auto sec to. along with defense company annual industry's family palmer lucky. he'll talk about the ethics around the use of artificial intelligence and drones. but first, it was another busy week of data here including the october jobs numbers, the first reading of the gdp for the third quarter and the federal reserve cutting interest rates for a third time this year. here's some reaction to that october jobs