welcome to on the money. i'm becky quick. the berkshire hathaway meeting in omaha, nebraska. we'll talk to two of the best known value investors. is it right for you? a clear vision, how one online retailer is doing a reverse commute. and are you saving enough for retirement? tips that can help you jump-start your plan and just how much should you have socked away? "on the money" starts right now. >> this is america's number one financial news program, "on the money." now, becky quick.

>> here's a look at what's making news. a blowout jobs report for april. the economy created 288,000 jobs last month and the unemployment rate plunged to 6.3%. that was the lowest level since 2008. numbers for the previous months were revised upwards as well. that data all better than expected, but there were fewer people looking for jobs than there have been in about 30 years. after setting its first record of the year on the last day of april, the day kicked off may with a slight slum. the markets had plenty to chew on during the week. stocks fell on friday. as expected, the federal reserve continued to taper its bonld buying program by $10 billion. the fed does that to keep interest rating low. america's economy grew at an anemic pace. the gross domestic product, t broadest measure of the size and strength of the economy, it rose at just one tenth of one perc t percent. way below what economists

predicted. of course, the number was hurt by bad weather. also, slower experts. earnings season is still going strong. ebay beat expectations, as did twitter, but user dwrout was short of estimates. merck, exxon and mastercard came in ahead. sales rose by 8% to a rate of more than 16 million vehicles. gm was up 7%. ford was down 1%. chrysler was up by 14% and toyota, up by 13%. one of the big themes here at the shareholders meeting is always value investing. looking for equities that trade below their value. joining us now are two of the best known value investors out there. mario gabelli and david winters, wintergreen advisers ceo and gentlemen, thank you both for joining us. >> great to be here. >> quickly, some broad thoughts on the market and economy. we did get jobs numbers that showed conflicts signals and

mario, i just wonder when you add that up, what does it tell you about the market? >> i think the market is adjusting to the prospects that yellin will at some point, accelerate the tightening of the monetary supply and hopefully, hopefully, we get after the election in november, the fiscal dynamics in place. >> we also heard from janet yellin this week, david. she's talking about another tapering of $10 billion a month again. you think the fed's going at the right pace at this point? >> i think she's being very responsible central banker because you had the bust. she was taking money out of the system. i think the economy will recover. confidence is returning. and i think that you know, the prospects for hopefully a long period of time will be much better. you two are two of the best value investors out there. this weekend, the whole shareholders meeting in omaha for the berkshire shareholders is all about value investing. can you tell me how you two see value investing?

how it fits in with what warren buffett talks about? >> what do we know well where we can dominate the knowledge and understand the business. secondly, what price do you pay for the company and where is your margin of safety? that's the same theme that warren has. >> we have a global approach, we can invest in almost any type of security and we have what we call a trifecta and what we're really looking for is a business with improving economics. management that's working for all shareholders around like all us value investors, a low price. and you know -- >> margin of safety. margin of safety. >> and we think if you do this, what you do is stack the deck in the investor's favor. you take risk out of the equation and look at mario, he's compounded money for a long period of time. very little risk and he's made investors rich. >> there's no question that it requires staying power though because the other aspect is that if you sell something and you're

taxable, but not tax free, you're compounding the deferred tax. that's what warren does. deferred tax is an important engine of growth. >> we've been hitting new highs in the market. does the market here feel expensive to you? does it feel reasonable? is it cheap at this point and how tough is it to find good buys? >> i think there's lots to do. because the market movement has been in relatively few, very popular securities. and you can see the corporate mating dance going on and so, there's deals to be had and you know, mario's an expert on this. but i think that if you look globally and you're willing to really do the work, there's lots of gems that are mispriced. >> within the context of the market, where new highs on the dow and interest rates, the market has to at some point focus on when interest rates go back to a more normal le aal le.

is the market already discounted that? have they adjusted to the tightening by the fed? the answer is well, no, when it happens, there will be some hiccu hiccups. there's no margin of safety. for some shock, it could have the old fashioned 10 to 12% correction. >> we have seen a lot of mergers and acquisitions activity. mario, you've also talked about m and a activity. >> right here, the concept is growth. companies are starting to say, i need global growth. how do i participate in the growing middle class of china and india, the recovery of europe, how do i participate in taking my manufactured property and selling it elsewhere and do i do it faster by buying existing takens. >> i want to talk to you about coca-cola and what you think is excess iive pay for management there. looks like your pleas have been

heard to some extent. there is some expectation that coke will step back from that plan. do you want to talk more about why investors need to be speaking up in situations like that? >> the real issue is that even if the pie grows, if management takes too much of the pie from investors, they have less. this affects everyone in society. especially the teachers, the electricians, the hard working people in our country and you know, we need to have, it's great pay for performance, but if too much goes to management, there's not enough for performance. >> can i ask you both quickly, is there a stock out there you like? a sector you think is really great right now? >> i think the united states has to maintain its energy independence. we spend $300 billion even today. that we give to countries that are not necessarily going to be our friends. notice what's happening in russia. they have the gas. locked on parts of europe.

so, how do we create that? how do we allow american technology, america's ingenuity to get a good, friendly environment? planet earth, and also allow us to become energy independent and save money. fracking, so, a company like national fuel gas, which owns almost 800,000 acres, companies that provide the equipment that provide the infrastructure. >> david, how about you? >> a little by long the same theme of mario. we love the union. union pacific is one of the greatest companies ever. it's been around for 150 years. >> right here in omaha. >> so, the burlington is not available to you. >> well, you have to go to berkshire. >> they have this land bridge. they've run the company better, the management's superb and we feel very comfortable that they can compound our capital in a very conservative and responsible way. >> david and mario, i want to

thank you both very much for joining us and appreciate your time. >> well, you're the best and we're delighted to be here. >> thank you, guys. appreciate it. up next, we are on the money. the future looks bright for one start-up. warby parker is moving online with five stores. is it the right prescription for growth? and the bull market is certainly better for the account balances, but are you saving enough? right now as we head to a break, take a look at how the stock market ended the week.

traditional brick and mortar stores which have struggled against their web rivals might have more competition.

now, some e retailers are eyeing the path to success. warby parker has opened five stores in just the last year. we speak with neil blumenthal. >> which pair do you like better? >> this one. or this one. >> i'm getting ready for the summer with a new pair of shades. usually, a pricey purchase with my prescription, but not here. >> it's 95 bucks, right? all right. i'll pay 95 bucks. >> warbyparker.com hopes to help the near and farsighted. the founders are offering retro inspired frames for hundreds of dollars below other designers. >> we launched warby parker about four years ago out of our apartment. we are frustrated by how expensive glasses were. we couldn't believe it cost us 6 or $700 to buy a pair. we started researching into the

industry and thought there was no reason for them to be so expensive. >> 95 bucks, 150 total with the prescription lenses and even with the insurance and discount i got on the last pair, that is less than half the price i paid last time around, so that's already a good deal for me. >> because we design our own frames and work with manufacturers, we effectively cut out the middleman. the traditional retailers because we're direct consumer through our website, and now, our stores. >> you open it up -- it was warby parker's home try on program where customers are mailed five pairs to test out for free. neil and dave have now raised $115 million from j. crew, nikki drexler and they've opened five retail stores in new york, boston and l.a., but one analyst is skeptical. >> they've had a very successful

pr strategy. how financially successful they've been i think is still questionable. i haven't seen any publicly released figures that have been vetted and verified. >> what happened when you actually build a store? is it more of a marketing or do you actually make money on the sales? >> our stores are performing as any other best in class retailers. on a sales per square foot basis, we're on par with tiff y tiffany's. >> they needed to have some type of a physical presence. i think a significant part was to enavailable customers to touch and feel the merchandise. bonobos has a similar strategy. it's having a presence in physical stores. there are other online retail companies like endo c hrk ino

and rent the runway. >> let me ask you guys, warby parker, where did you come up with it? >> we thought naming the company was the hardest thing we had to do. took us over six months. we kept talking about different authors or artists that we thought represented the ideal. took a lot of time talking about the b generation. he wrote about a will the of characters with interesting names. one was warby pepper and zack parker. >> it does have a unique ring to it. like a snooty snoot without being snooty snoot. but is the unique brand enough to beat local eye doctor offices or -- which owns lens crafters and sun glass hut and others and generate sales of over $10 billion a year. the plan for stores, right now,

you have five. you don't see competing with that sort of thing, but you do see expanding additional stores? >> yeah, we don't have any immediate plans to have thousands of stores. we expect to open a few additional stores this year and more stores beyond that. >> do you think luxotica sees you as a threat? >> we've been a pioneer sells glasses online and now, brick and mortar. they just acquired glasses.com. >> have you heard from them? >> we've chatted with them a couple of years ago when we launched and i think they just wanted to get to know us and see what we were up to. >> but no plans in the work right now. >> we're just focused on

building warby parker. >> and by the way, i love my glasses. up next, we are "on the money." when it comes to your retirement, it's not just when you start saving, but how you save. you can find us on facebook.com/otm. [ wind howling ]

[ female announcer ] it balances you... [ water crashing ] ...it fills you with energy... and it gives you what you are looking for to live a more natural life. in a convenient two bar pack. this is nature valley... delicious granola bars made with the best ingredients in nature. nature valley. nature at its most delicious.

certainly means a stronger

nest egg for many americans. sie the worst of the crisis, 401(k) balances have surged. sharon epson joins us now. we are now five years past the market's lowest point. what's going on when it comes to american's retirement savings? >> we're seeing an impressive 92% gain in 401(k) balances since the first quarter of 2009, since the economic downturn and that's a tremendous gain, but we're only talking about the average balance being about $88,000 and about 75% of that money has been due to market gains. that's why we're seeing this increase. so, only about a quarter of that increase is due to people putting more money in their accounts. >> it's great news to see gains like that, but when you put it that way and so much is coming from the market gains and only 25% is coming from people

putting more in, it raises the question on whether people are saving enough in general. >> a study found about a third of workers who have access to a 401(k) are actually not contributing to it at all and many of them are not contributing up to a company's matching contribution if they're offered one, so that's just leaving free money on the table and of course, not taking advantage of one of the best things that you can do to ensure your long-term financial future. >> there are so many things to think about and i've thought about this myself with retirement. a lot of times, i can't figure out what i should be thinking about, you just end up throwing money there and hoping it will be enough, but what should americans be thinking about? >> one of the main things to think about is what you want to do in retirement. retirement today is not necessarily sitting on a couch of golfing all day. you might want to do some other kind of enterprise, so you may not have to completely retire, but the big thing people don't really factor in is health care

costs because those are going to skyrocket. there was a survey done that shows the average person retiring at 65, or average couple at 65 last year, needed $360,000 to cover health care costs alone. >> while you're thinking about your financial hemt health, you need to think about your health as well because it will have an impact on your finances, so what you can do while you're a working person, you're able and you're able to exercise to eat right and do all those things, you don't think about how that's going to impact your finances long-term, but it will have an impact on your financial health, so taking care of yourself now and also making sure that you are able to get the check ups you need, do the things you need. i know the health insurance debate is a big one, but making sure you're healthy today while you're able-bodied is going to be very important to your financial future as a retiree. >> how do you figure out what you need for retire, your magic number?

this is the million dollar question. >> how long are you going to live? how are you supposed to figure that out? >> fidelity has this rule of them that it's at least a starting point, a benchmark. so they say that by the time you retire at the age of 65, if that's the time that you do it, many may do it later, but you need eight times your salary at that point. your current salary and at 45, you should be saving about three times your current salary. 55, five times. so, think of it as a multiple of what you're making now and a lot of people are very worried about how am i going to be able to save that much. the good news is that people are saving more. about 8% of their salary in their 401(k). the bad news is it still may not be enough to retire. most financial advisers say you need to be putting away 10 to 15% of your pay and starting there and if you're late to start, you're going to have to up that to 20%. maybe even more. and so, it comes down to, if you want to have a financially

secure retirement, you may have to make some sacrifices today to ensure that you're able to do that. >> sharon, thank you so much. again, a lot to think b about. >> up next, we're going to take a look on the money at what's happening in the news ahead. also, what the annual influx means to the 42nd largest city in america and the oracle they call the native sun.

for more on our show and

guests, you can go to our website and you can follow us on twitter at on the money. here are the stories coming up that may move the markets and impact your money this week. earnings season rolls on with reports from pfizer, disney, whole foods, tesla and zillow. on monday, early twitter investors will be able to sell their shares since the lock up expires and then the ism manufacturing indeck is out. tuesday, we find out if the u.s. is importing or exporting more goods and on wednesday, janet yellin speaks before congress' committee. we are in omaha, where nearly 40,000 berkshire hathaway investors are gathering for the annual shareholder meeting hosted by warren buffett. it's 14,000 packed hotel rooms are averaging about 425 bucks a night. that's right. $425 a night. the steak house, a favorite,

expected to serve 1500 pounds of beef this weekend. now, the fifth most valuable company in the united states, berkshire hasn't always attracted the crowds. my, how it has grown since then. that's the show for today. i'm becky quick. thank you so much for joining me. my guests next week, alan alda. keep it here, we are "on the money." have a great one, everybody, and i will see you next weekend.

this is "meet the press remembers." . i'm david gregory. thanks for joining us for "meet the press remembers the military." in the 66-year history of this program, we have interviewed military leaders during every major conflict since world war ii. today we'll revisit the best of those conversations, one from each of the four major u.s. wars since 1947. we'll hear from then-army chief of staff, general j. lawton collins in a 1951 appearance about the relationship between the military and the president and the armistice negotiations during the korean war. then, the february 1968 interview with secretary of defense robercn