hi, everyone, welcome to on the money. i'm becky quick. memorial day, the unofficial kickoff of the summer. what will the hot investments be for the second half of the year? ebay warns you should change your password. target still feeling the pain. if you think your personal information is protected, think again. is it high times for legal marijuana sellers or are profits going up in smoke? big business of weed from a cannabis convention and if you have a newly minted college grad, what are the best cities for starti ining out? on the money begins now. >> this is america's number one financial news program, on the

money. now, becky quick. two important pieces of the puzzle in the housing puzzle were pieced together this week. new home sales came in stronger than expected with 433,000 units sold in april. another sign of the housing market's resurgence and rates rose to 4.65 million. that is the first monthly increase of the year. both numbers suggest a rebound. stocks rose mod esly on thursday partly on the housing news. the markets continued to rise on friday. the federal reserve released the minutes from its last meeting and talked about a rate increase, but showed no signs of toing anything soon. the fed discussed the housing sector, china and ukraine and some big retailers missed their earnings including home depot, lois, staples and sears.

many of those companies say things have picked up since then and while many of us count on our coffee for our morning jolt, coffee prices may soon be gettinging a jolt of their own. a fungus has caused damage. working with growers to try to eliminate the contamination and some are searching for other suppliers. stock prices creeping up. fed speak and the long holiday weekend for the markets. what will the rest of the year bring? joining us now is don hostages with about $2 billion in assets under management and thanks so much for coming in. >> thank you, becky. delighted to be here. >> it has been a tricky year trying to figure out the market. we're not seeing what we saw last year, but it's still nothing to sneeze at. >> i think we're in a good market, a positive market. but the nature of the market has

changed with high frequency trading, dark pools, i think traders are driving the market today more than investors. >> is that a good thing or a bad thing? >> on the surface, it's a bad thing. as stock pickers, it presents a lot of opportunities though if you're willing to pull the switch. >> what does that mean? if you see a big sell off, you think, hey. >> frequently, we'll see something decline seven or eight points. >> so, it creates more opportunities. >> it does, but it makes the market a little more hazardous at the same time. >> is it harder to be somebody who's a longer term investor at this point? is it a little more nerve racking? >> not so much. i think because we are long-term investors and we do look for value, i think we're more comfortable with a market like this than the person who's trying to trade and capture the small move.

>> you know, when you take a look at the different markets, there are a lot of mixeded signals. i've been a little shocked at interest rates. the ten-year still around 2.5%. does that surprise you? >> yes, it does, but i'm a little bit of the opinion they're going to keep the interest rates low until the economy really shows evidence of improving and i personally don't think we'll ever go back to the kind of full employment we used to have because technology has eliminated the need for as many employees. a company that used to hire maybe 40 or 50 employees can get by on 25 or 30 now because of improved technology. >> what does that mean for stocks though? if you expect interest rates to stay low for some time to come, does that create almost a gold lox scenario? >> where we look at individual companies, that's really our passion. investigating companies. we see value all the time somewhere.

stocks that are out of favor that you've for some reason think they're going to regain favor, those exist in the market at all times. >> what do you like lately? >> some of the oil and oil related stocks. still buying airlines. i think there's still some opportunity there. some of the industrial stocks. and i think maybe we're on the cusp of seeing some of the retail stocks return to favor. >> do you expect growth to pick up significantly over the rest of the year? because gdp was low in the first quarter, too. >> in some cases, significantly, probably on average, moderate pick-up. if you look at the whole marketplace. >> don, what's something that has surprised you the most? watching this market for decades, kind of seeing where we are right now after 2008. what surprised you?

>> the thing that surprises me most is the volatility in the market and the effect of traders and program trading. the program traders, they could care less what the stock's going to be in three months. they're looking for a nickel or 25 cents a share. in and out. in and out. in and out. and i guess i thought for a while that maybe program trading was somebody setting at a desk flipping a switch, telling a computer what to do. but the computers are preprogrammed. they identify certain characteristics and they go on without any urging from somebody. they just participate in the market and that changes the way the markets trade and makes you a little more cautious about what you do, but there's still plenty of opportunity. there always will be. >> that's good advice. don, i thank you very much for coming in. it's a pleasure talking to you. >> it's a pleasure to be with you.

>> up next, we are on the money from corporate espionage to credit card fraud. hackers are taking over much more than just computers. how your livelihood and reputation could be at risk and why the government is not equipped to solve it and then later, looking to live the good life? the best cities across the united states for all the recent college graduates entering the workforce and take a look at how the stock market ended the week.

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officials for hacking into the company's system for trade secrets. my next guest says companies can do everything right and still have a breach. joining us now is fireeyes ceo, kevin mandia. so, we know about target. about ebay, but that is just the tip of the iceberg. i know you know about a lot more and i guess my question is how bad is it out there? >> well, right now, i feel like we're getting sucker punched in cyber space. it's just the state we're at when you look at cybersecurity is the whole of the issue is going through a transformation of legacy security practices that have proven ineffective to more capable security practices. dourg that transition and we are getting better every day at cybersecurity at the retailers and a lot of these companies. during that transition, unfortunately, we can't pitch a perfect game every day. z zbh. >> but i'm sitting home read in

about this, i am a target shopper, i shopped during that time frame things were being stolen. i have an ebay account. how worried should by? >> i'm not that worried and i do both as well. in general, there are cybersecurity incidents and these retailers and companies are working hard to prevent the security, but just because you're compromised doesn't necessarily open up these companies for fraud. sometimes it does, but at least there's also fraud based security guards you can use after these intrusions occur, so, right now, it normally pans out that the consumers really don't have that risk in regards to the bottom line and to legal causing a credit cards to fraudulent use. >> is there anything that you would be telling me to make sure i do? should i be using different passwords, checking my bank account regularly? >> i think the things you can do and it's a hard thing to practice, is have a different user account and pass phrase when you can for different

online things you do. so, if you use amazon and g mail and facebook, try to make sure you have different pass phrases, therefore, if you have your account compromised, it doesn't allow the attacker to log into multiple accounts in your name across different companies. >> this week, we eric holder charged actual chinese officials are cyber hacking. i know this is something we first found out from you. you warned us that the chinese were doing this. did it stop when they came out with that warning? why is this united states now taking this back? >> we told the world in the mandia report, february of 2013, that there was a military unit in china that was compromising the private sector and conducting economic espionage. the difference that we saw after the exposures, did stop their attacks for approximately 40 days after they were the front page of "the new york times," but today, hundreds of days

later, they're back to their usual level of activities. >> so, what happened when eric holder made these charges? did it stop things or is it just really stepping up the potential threat? >> well, i haven't observed the data yet, but seems like a logical step in the incrementalism we've done. three years ago, the house committee told the world we are witnessing the largest -- in history, a year ago, the chinese military's behind the cyber espionage for economic gain in the united states. the chinese government can look at the mandia report and say -- but when the department of justice says, we know you're doing it, i think it does elevate the game another notch. we'll just continue to try to elevate it looking for nontechnical solutions. >> how is the government keeping up with all these ways the hackers can get our information?

>> they see it. the government isn't immune either. they're gettinging attacked every day. they have a standing army responding to the pack. so i'm pretty sure that while we're abreast of the latest techniques to get the government to break in and those are scaleable in the private sector. >> kevin, i know you told people, don't worry about it, for fraud, the banks, the retailer, somebody else will end up picking up any potential exposure. i think about worst case scenarios. if it's something like a bank gets hacked and it's compromised. your brokerage or your 401(k). do you print out, do you still get paper print outs of your bank account information, your 401(k) information, just in case? zwl well, i don't. >> i do. >> i know. you know, when i say don't worry, we still want to see e commerce take place. >> yeah, it hasn't stopping me

from shopping online. it is a pleasure talking to you. up nerks we are on the money. the top towns for recent graduates to put down roots. and later, it's growing like weeds. the pot business, that is. the problems abound for these budding entrepreneurs, so what are the dealers dealing with? we're going to find out.

can yo start tomorrow?

grad yats across the country are joining the workforce. if you are among them, how do you find the best cities? stacy rapacon is online editor and thanks for being here this morning. >> thanks for having me. >> so, what advice would you offer new graduates? what questions should they be asking themselves? >> first of all, they'll want to think b about the cost of living and we just ranked the cheapest and most expensive cities to live in, but the top priority, a good job market. so some of those most expensive cities are really favorable. >> what are some of those cities? are you thinking new york city? >> new york city is a great place to be, i love it, but it is actually a really tough market for especially for new grads. the unemployment rate there is high. it's about 8% and the cost of living is a stunning 120% above the national average.

so, when i say you know, we'd recommend some expensive cities for new grads, san francisco comes to mind. they have cost of living, 60% above average. washington, d.c. is another expensive good choice. where cost of living is about 40% above average. >> 40%, wow. >> boston, also, is about 40% above avrnl, but you know, the job markets in all those three expensive cities are so favorable and they're really good places for new grads to consider. >> so, if you are just starting out, how do you try and figure this out? crunch the numbers. here's the median pay. how do you make these decisions that might make sense in the long-term even if it makes you cash poor in the short-term. >> yeah, you really need to think b about your budget. a lot of these big cities, san francisco, d.c., boston, they do offer higher starting salaries for new grads, so, it does help

you balance out that cost of livinging, but you know, the point is that you really want to find a job after you graduate and especially if you're looking into certain fields, there are clusters in certain cities where you have to look. if you're looking for a tech job, you have to look in san francisco. even though you know, you'll pay $3,000 a month for an apartment there. >> everything we've been talking about, these are all the coasts, the east and the west coast. are there areas in the middle of the country that really stood out from those coastal cities? >> for new grads, i think that boulder, colorado, is a this choice and dallas in texas is a really good choice, too. and you'll find it more affordable. boulder tends to be about 5 to 10% average and dallas is 5% below average, but stay still offer good, hearty starting salaries, so you can really make your budget work there.

>> thank you. up next, we are on the money. we'll take a look at the news for the week ahead and the grass isn't always greener on the other side. colorado blazed a new trail by legalizing marijuana, so, why do business owners still feel like they are between a rock and a hard place?

for more on our show, you can go to our website. you can also follow us on twitter. here are the torres coming up that may impact your money. earnings season continues with results from michael kors and costco. monday, the markets will be closed. tuesday, orders for april and we'll see how home prices are faring from the kay schiller index. after discovering a $4 billion miscalculation last month. thursday, the second estimate for first quarter gross domestic product will be released. marijuana is lighting up colorado's economy, bringing in new business and jobs, but for those in the industry, going legit hasn't been as easy as you might think. with issues like banking and security, is the pot rush going up in smoke? jane wells is hear to explain.

>> becky, it is an industry trying to go legit under the cloud of federal illegality and a lot of the rules are still being made up. brook gering runs four marijuana stores in denver. >> and this tag, another expense -- >> and she has to follow a bunch of new rules. like keeping her pot and cash separate from her medical supplies. >> cash management is an entire individual sector. >> recreational marijuana is going mainstream in colorado and remains a work in progress. still no banking. this remains overwhelmingly an all cash business and even taxes are paid in cash. >> well, you have to be creative in the banking situation. unfortunately, we did lose our bank of three years. >> jennifer murray runs cam labs, which tested potency.

feeling the risk of accepting illegal money remains too high. >> and we just have other ways of banking. >> but none of that is stopping a green rush of entrepreneurs attending a state's first cannabis summit. tom cofouned zynga, but to -- which sells automated climate systems to pot growers, he says the system remains low tech. >> everyone gets confused, like why would you go from one to the other. it's pretty obvious. >> and there's one other trend becoming noticeable. a lot of women are running these businesses. >> i believe there's that compassionate edge to it that attracts most women to the industry. my lab director's a woman. i have a couple of other women lab techs and i was so excited when i look through resumes and there was a lot of women.

>> in fact, there's so many women getting into the industry that they are forming a cooperative, a mentoring group there in colorado, called women grow, to help each other get into the business. >> i think one of the most interesting thing is the way colorado is set up the tax system. where you pay one tax if you're using for medicinal reasons and a higher tax for recreational. i guess those people are trying to say they're still using it for medicinal reasons. >> well, that's why the bulk of the tax money in colorado is still on the medicinal side because it is a much, much lower tax. you can pay up to 50% tax total for the recreational side. so, people who have a prescription are still buying medical. a lot of the recreational purchases are from tourists coming in from out of state. >> you were at the cannabis summit. what was the most interesting thing you picked up there?

>> you know, it's the wide variety of people getting into this. on the one hand, you have shady characters. on the other end, you have really legitimate investors and you have all kinds of established vendors you never would have expected to be in the pot business. architects, plumbers. >> thanks very much. always a pleasure to see you. that's the show today. i'm becky quick. each week, you can keep it here, we are "on the money." we will see you next weekend.

good evening. thanks for joining us. i'm diane dwyer. >> we're covering breaking news in santa barbara. the three stabbing victims found dead in elliot rodger's home are all from the bay area. the victims are identified as 20-year-old chen yuan hong, george chen and weihan wang from fremont. they were found dead with