i understand the valuation argument. we know valuations are a very poor timing indicator but i think the really important theme here is the u.s. dollar. u.s. dollar if that continues to strengthen and it has reversed, a 30-year down trend, commodity prices like oil are in secular decline. they're going to remain pressured. these commodity stocks are going to remain pressured with it. at least on a relative basis these are not the stocks to own. >> all right, ari, thanks so much for joining us. have a great weekend. ari wald of oppenheimer. we have much more on potential dividend cuts in big oil later on this hour. up next, grilling up profits. other two fast food stocks seeing big gains but which is a better bet? fast casual battle. shack versus the golden arches next. plus will the magic kingdom come out on top when disney reports earnings next week? traders take their positions. and later spinning toward a healthy lifestyle or spinning out of control. soul cycle filing to go public after planet fitness last week but is

emily: hunter what do you think about this $50 billion valuation?e have been talking about it and now it is confirmed. are they worht tth that? hunter: the valuation is almost secondary. we have seen these rounds of growth capital. you are pretty sure you will get at least that back if you are putting money in. uber is in a phase where you can imagine them doing anything. they have talked about experimenting and other adjacent markets. other companies that have invested in them -- they remind me most of amazon. they start moving into adjacencies. emily: that is interesting. bob: i agree on one hand. on one hand -- i look at uber and i'm like really? $50 billion? that seems like a business that could be upset relatively quickly by a number of different factors viabe it political issues licensing issues. emily: one person told me thought it could be a $500 billion. bob: to hunter's point, if they move into a lot of different areas we have not thought about and driving efficiencies in existing systems and they can figure out interesting ways other than

in a world where valuations have re-rated, this is -- this is an opportunity. joe: what about the overweight call, with easy the other investors do not see? >> you seem surprised this is come out of energy. this is the same thing. investors are underweight. the economy has been week and we are looking for in the second half, -- dramatically so, but everywhere you look whether it is europe or the u.s., you are seeing stronger economies being flashed -- being slashed. also, in a world where we have had massive declines in interest-rate has really helped some segments of the stock market and has not helped other. commodities has been part of that. provides another tailwind for commodities. this is the biggest underweight out there and we're looking at that. alix: you brought up central-bank e-zine, what easing happens, what happens with that and currencies? >> has been down and quite a lot of it has happened in the past year. people suddenly very afraid of a rerun of 2013. it is qqq people out of emerging markets. that is a big opportunity. this is a triple discou

emily: what about valuations in general?it is high, but the opportunity we see in our portfolio, never in the history of this business have we seen companies are the revenues as fastest they are doing it right now. i think that is what makes this top. valuations are hard love of the growth is higher -- hi, but growth is higher. i do not know -- in general unit counts are seeing private because there are a lot more hospitaltible then the public. emily: you think square does not have a choice? >> i do not know specifically why square is doing it. i would just say in general unit found wants to stay private because it is a much better market in the public market. emily: the biggest unicorn out there uber at a $50 million plus valuation. the rise of the 1099s economy, uber saying they are not full-time employees, and they do not want to be full-time employees. but this is in the national spotlight. hillary clinton is talking about it. if you look at macroeconomic data, we're seeing people are choosing full-time jobs and there is

janet.com launches this week with the highest valuations of any text are to. do they have what it takes to take on amazon. even longer it will take a look. gold prices drop sharply overnight hitting a five-year low in china selling the talk of a u.s. interest rate hike later this year. take a u.s. stock market futures ahead of the opening bell. green to tell you about. the nasdaq adding to that record high from friday. good morning everybody. i am dagen mcdowell and for sandra smith. i'm joined by lauren simonetti entrance eyes. welcome to "fbn:am," the latest breaking news and what to expect for your day ahead. breaking news this morning to tell you about. a family spokesman said the chattanooga shooting suspect suffered from depression and drug and alcohol abuse. he also lost his job over a failed drug test. the spokesman said relatives of mohammed abdulazeez is at the heart of the shooting that killed five u.s. service members. for marines were killed in a day of the shooting and a sailor wounded in that attack died on saturday. the united nations said to e

and so, it seemed like an insane valuation. i think many people looked at that and said dave sze and greylock have lost their minds. i think, and not just from the outside, i think partners inside greylock said this is insane and this is not what we do. emily: who said that? [laughter] david: we do have partners and i think one of the characteristics of our partnership is we like to disagree. we like to push each other. there were some partners that were saying this is going to ruin the firm. this is a huge mistake. emily: facebook is going to ruin the firm? david: ruin the firm. emily: do these people still work at greylock? [laughter] david: some of them do, some of them have retired, but not because of that. emily: now john, you're behind some of the newer hits -- dropbox, instagram, tumblr. how do you fill the big shoes of david sze? john: what i've earned is that you probably don't try. and for me, instagram was a good example where i brought it in and people didn't love it. emily: really? john: yeah, i mean, reid wasn't q

it seemed like an insane valuation. i think many people looked at that and said, dave sze and greylock lost their minds. not just from the outside. partners from the inside said this is insane, not what we do. emily: who said that? david: we had partners. one of the characteristics of our partners is we like to disagree. we like to push each other. there were partners saying, this will ruin the firm. this is a huge mistake. emily: facebook is going to ruin the firm. david: ruin the firm. emily: do these people still work at greylock? david: some do, some retired. not because of that. emily: john, you are behind some of the newer hits -- dropbox, instagram, tumblr. how do you fill the big shoes of david sze? john: what i learned is you probably don't try. instagram is a good example. i brought it in and people did not love it. emily: really? john: reid was not sure it would work. i believed in kevin and had enough affinity for the category and the product that i really wanted to do it. emily: why didn't reid think it wou

valuations are just numbers you put in. until these become liquid, you do not know what the numbers are. david: if you want to be a public company, you will have to cross the chasm of public metrics. if you cannot cross the chasm, valuations from the early days can hurt you. then there is the opportunity to be acquired. you need acquirers willing to value you for whatever reasons and have the wherewithal to buy you and justify that. if you do not have those things, you get in trouble. emily: what about burn rates? do those can turn you -- concern you? john: what else matters beside how much you are spending? emily: have you been warning companies? david: at the end of the day, private companies run losses. we have cavities with so much castle -- capital that it becomes hard to frame the burn rate too high. emily: is there too much arrogance in silicon valley? john: there has always been too much arrogance. look like andy rose or steve jobs. move out of my way, i will make this happen. there is a lack of fear. that is a litt

guest: i think valuations are high, but the difference is these companies have revenue.you look at y combination or, they are figuring out there business models very hard. it's not a question of can they make money, it is can they tweak things to make it a big business. i don't think we can look to the past and say this is just another remembrance of 2001. tech companies are legitimate and creating real products and real revenues now. emily: what do you think about valuation? guest: i think you have to take it company by company. there's a lot of money chasing the next good deal. but when you see something like an area -- like canary, which is a smarter security device or activity tracker has raised $55 million of easy money. it's because they have huge sales. i think it's interesting, but the valuations are high because not enough good deals for the money that it is chasing. emily: thank you both. that does it for this edition of "bloomberg west." ♪ . . . john: i'm john heilemann. john: -- mark: and i'm mark halperin. and "with all due respect" to mark: -- to john heile

david: valuations are just numbers. liquidhese things become markets, until you have buyers and sellers on market, you don't know what the numbers are. if you want to be a public company, you have to cross the chasm of being held and accounted for on public company metrics. if you can't, the valuations you carry from the early days can really hurt you. is the opportunity to be acquired. you need a choirs that are -- aquirers who have the wherewithal to buy you. emily: what about burn rates? do those concern you? john: sure. what else matters besides if people love the product. day, private the companies run losses. that's why venture capitalists exist. we have a weird situation wire -- where we have companies that have so much capital that it becomes really hard to frame the burn rate too high because they have enough capital to go on for years. you think there is too much arrogance in silicon valley? david: yes. people who change the world believe in themselves pretty robustly. fearnk there is a lack of which is a litt

so how -- >> no, not a valuation, the valuation, stock is down -- >> it's not a valuation story. is, pure and simple, is you're in the name. you're betting. >> the ability to pay off that's investing, you don't have any way of knowing. >> wasn't the valuation if you were negative on the stock always your issue? >> goldman went from -- my point is if you want to find a negative on this with valuation you could have done this from the get-go, right? >> goldman had a neutral on it a defacto sell on wall street. so going from a neutral to a sell after a 35, i don't know anyone who trades or invests that way. >> rinse and repeat, you run out of money at a certain point. >> it was always a vags. if you want to be negative on this name, on valuation then you never should have bought it in the first place. >> you certainly shouldn't have been coming into it after a parabolic move. it had an eiffel tower chart. it ran from 70 to 90 series i think in three days. any time you see a stock do that. you do not buy that name. it's retraced pretty much all of that it's still where above that in

charles: on a valuation basis, it shouldn't be serious.as long as there's not an event, it's one that you want to buy into. but not the crazy names. charles: steve, i know you're having trouble finding value here. market under some pressure. we're only off a percent i think on all-time high, and just coming off all-time high for the nasdaq. nevertheless, what should we expect for the market for the rest of the week? >> i think we're overbought, at the high end of the trading range. the markets will trade down a little bit. energy names, group smells like it's bottoming here. value in energy, but you got to pick the right names and keep an eye on bond yields. ten year stays below 2.4, it will help the market eventually. charles: the one-year yield was the highest sense 2010, that spooked the markets, steve. >> i think i said yesterday i like buying them. knight transport knx, i want to see an all clear. charles: old dominion rail, trucking showed a little life. jim likes value but weight, hilary is saying buy momentum names on a dip. everyo

in terms of the valuation, i think it was fair. a tremendous is upside potential and the risk investors are taking war that upside. buyingmily: when you are some of these items from retailers, how do you offset those costs? is going to bet hundreds of millions of dollars to bridge to scale. that is part of the game with e-commerce. it is a scale game. that is why there is no number two player. amazon is 10 times the size of the second largest competitor in walmart. scale game and a requires a lot of capital and investors to believe in the team and the idea. explain how shipping works. all we want is immediacy. sure. you're probably not the customer. $50 a year and you're going to save hundreds of dollars. we will get you your everyday essentials like your diapers, toilet paper. overnight or in two days. get that fast. the other products 2-5 days. the type of person that wants to pay a premium for getting faster delivery, that is not jet. it is about spending money. emily: who are your main suppliers and shipping partners? marc: we

paul: it is pretty much the ones with the high valuations.he three with the highest valuations are airbnb, dropbox, and stripe. emily: did you know early on that they were going to be hits? paul: we knew the founders were good. emily: what was it about drew houston and brian chesky? what was it about them that -- paul: it was different things. jessica: yeah. paul: different things about the two of them. in drew's case, he was the guy who could write this software. dropbox suceeded by solving an almost impossibly hard problem. whereas airbnb is different. airbnb is like this mass movement, where everyone is staying in other people's houses worldwide. jessica: we were skeptical, though. i just remember thinking, we don't really care what the idea is. these founders are awesome. we are funding them. paul: patrick collison from stripe, i have known since he was, like, 14. back when he was this high school kid in ireland, he used to email me questions about the lisp programming language, and i had no idea he was a kid. emily: now that these compan

michael: i think valuations are high right now. the difference is these companies have revenue. if you look at why commentator, they are figuring out their business models -- their business model is very hard. it's not a question of can they make money, it is can they tweak things to make it a big business. i don't think we can look to the past and say this is just another remembrance of 2001. i think tech companies are legitimate and creating real products and real revenues now. emily: slava what do you think about valuation? slava: i think you have to take it company by company. public companies are funded well, pride and think there is a lot of money chasing less good deals. here we have seen something like a canary, a smart security device. they have already raised $30 million or $40 million. it's because they have huge sales. i think a lot of this is happening off of revenue, and i think it is quite interesting, but the valuations are high because there are not enough good deals for the money that it is chasing. emily: thank y

, do you think these valuations are getting ahead of startups and their ability to grow?ohn: we are in a rare time of normalcy. good companies can go public and bad ones can't. in the private market, there is pocket of valuations that are too high, and some too low. emily: no bubble, the sky is not falling. john: this is a boom, not a bubble. it is a long boom. that is because of the effect that these devices have had. we have 2.5 billion people carrying them around. another billion to come. an entrepreneur can create a new product or service and in a week have a billion people using it. that is different. emily: what is also different is the amount of capital flowing into silicon valley. private equity firms, hedge funds, people like carl icahn. what do you make of that trend, is it creating more competition for you? beth: it is incredibly competitive out there. we have to wake up every morning and compete to win and work with the best entrepreneurs. john: never been a better time than now to create a company. emily: is it great for investors? john: if the markets were n

if you take valuations in this country versus valuations in europe, they are about the same. but the prospects for european earnings to improve from here, we think they probably have more forward momentum then u.s. earnings due at this point. when you consider the differences in the cycle, europe looks rather interesting. we would not encourage europe and japan over the u.s., but we think the fair valuation does not mean that the u.s. is more or less attractive. we would continue to emphasize buying the u.s. and europe, at the expense of especially the developed markets, fixed income. pimm: we have seen a big energy deal today, markwest and mplx. what you say about the energy situation in the u.s.? should people be buying energy stocks? it is probably too early, and our equity team would agree with that. further consolidation has to take place in energy prices. our research indicates you have to have a sustainable recovery momentum rally in energy prices before you start seeing people willing to take a bet in energy and energy earnings in the stock market. brendan: you are he

the other part of the story is valuation.ther it's ibm, intel, microsoft or et cetera, they all have these incredibly forgiving valuations with the dividend yield, that you just mentioned on microsoft. you've got a tradeoff there, right? if you're going to buy the netflix, the amazons of the world, you've got to pay up, pay the higher multiple and you've got to be comfortable with that. to my main point there's more than one way to make money in this market. right now value is out of favor. the deep value that i hold to. but it will come back in favor. history shows that it does. >> i think one more rebuttal i would have here is we don't think of ourselves as momentum investors, it's more about thinking where the secular growth stories are and sometimes we need to think about whether or not the valuations for those sectors and those industries should be completely rerated. i think with some of these high-flyers it makes sense to think about a higher normal valuation. >> that's dangerous, kate. but keep in mind -- >> history s

now a lot of people argue about valuations. i don't find them that stretched other than amazon which is a $500 stock that's going to make 46 cents this year. i don't see the numbers as crazy. facebook a little bit. google and apple are positively modest valuations at this point. melissa, the thing is, this is not a tech bubble because technology in 2000 was in a bubble, everything went up. we're not in a tech bubble. we're seeing a growth problem. they're paying up for anything that has any kind of growth, and in this case right now, it's four very narrow stocks. >> you make the point the valuations aren't high, bob. should we be worried? does it matter that the four biggest stocks account for 31% of market cap if those stocks are not overvalued? >> reporter: i think it does matter because historically when you get new indices at new highs with narrow leadership, that's a technical definition of a problem. traditionally those have been signs of at least short-term market tops. i do think it's encouraging that apple is only 15 t

facebook to the investment, the violation was $500 million which seems to most people and insane valuation. many people look at that and said they lost their minds. and not just from the outside, i think people inside greylock said this is insane and this is not we do. we do have partners. i think one of the characteristics of our partnership as we like to disagree. there were some partners that were saying, this is going to ruin the firm. this is a huge mistake. >> to these people still work there? >> some of them do, some of them have retired but not because of that. you are behind some of the newer hits, dropbox, instagram, tumbler. hattie filled issues? >> i've learned that you don't try. an example of where brought it in and people didn't love it. i had enough affinity for the category in the product that i really wanted to do it. why did you want to do it? >> he thought it was interesting, but i huge. is there a science to it? toi think it took me a while convince them to raise money. airbnb is another example. when i was like i don't get it. he was on the other side of that and push

get your free online valuation now at webuyanycar.com >>> for an hour and 40 minutes tonight police chase add white van through south jersey into philadelphia, back into south jersey, and finally into philadelphia again. at times, it was high speed, at times it was slow speed. but finally it was no speed. as a philadelphia trooper brought this bizarre odyssey to an end. monday night, the big story on "action news," the night-long effort to catch a thief. it began at 8:00 with what they call a shotgun robbery. the police began a slow chase towards the walt whitman bridge. the driver went over the bridge into a navy yard where it hit a police car. the oaklyn police were still giving chase as it headed back into new jersey. and the deptford mall it made a tour of the parking lot. residential neighborhoods, and believe it or not, back to the walt whitman and into philadelphia through old city the historic district center city and back south on 95. that's when the police tried, and almost succeeded, in boxing him in. and it seemed that he was

i never said valuations are too high. i do not see a lot of valuations -- maybe gopro.on't see -- i look at facebook or google and they are trading at very low p/e's actually. i do not think we have a valuation bubble, my bigger concern has to do with the large burn rates. emily: if it does not pop, what happens, is there a downswing? bill: there are two things that could cause a correction. one is a macroeconomic. very hard to predict. the second would be the firms that are doing the late stage investments might change their criteria a little bit. i think that is probably the more likely near-term catalyst for something like this, where they start to ask questions about, do these companies really have a business model that can go the distance? we are more cautious. we are still making new investments, but we are more picky for sure. emily: what does being more picky mean? bill: you will see the uber for this or that. ideas that are a fraction away from something else on the dial, that is a bad sign. emily: so do not invest in uber for -- bill: i think anything that is

if a company is at too high of a valuation and that they are raising too much money, that is not goingo last forever. john: companies will fail, you can only lose one time your money. but you can only lose one times your money. if you invent a really valuable new service or kind of product, that makes the world better. emily: john, you put bets on google and amazon early, what do you see out there that could be the next google or amazon? john: gosh, there are three areas i am really excited about. one of them is a revolution in education. education is one of the largest parts of our economy and it is well positioned for improvement. emily: but there haven't been many multibillion dollar education companies. john: but there will be. second, on demand services. yes, we are investors in uber. if you look at doordash, other devices, they are a remote control for the world. you can summon services and you can take friction out of all kinds of everyday activities. emily: it is interesting, chris sacca just told me he did not invest in those kinds of companies, because he thinks uber will do

as the valuation hawks view this as a commodity hardware retailer, with a product that can eventually be replicated by the competition and when that happens it will do serious damage to the company's growth profile, but the case might seem a bit more complicated. the bulls believe that gopro has a lot more time before some competitor designs and equally good action camera and because they have faith in the company's new products like the four-session camera not to mention the quad-kopter drone that they're launching next year or the virtual reality applications and the software that's embedded in this and then there's the intangible component and the fact that gopro is building out a media ecosystem with millions of users using the platform to show videos with each other and videos that cause nothing to create and they have social media and the goat riding the surf board with this on its head or the board. did you see that one that has it on the head of the surf board? these are dreams come true and they're the hot buttons in the google-loving stock market so it's easy to identify. it

david.hang spoke with he says private tech valuations are get rich. asked to take on a lot of risk. there's a lot of optimism causing pricing to be higher, causing expectations to be higher. riske asking to take high since 1999. pimm: with me is the general partner at benchmark capital. welcome. what do you think of what he said? >> i think david is right, although i don't think he was saying it about uber. i think he was saying about the market in general. expectations now -- valuations have clearly risen in the capital markets. this, in orderh to make the kinds of returns that our limited partners and investors are looking for, when you extrapolate with those companies need to be worth in order to do that, the kind of profit and multiples they require start getting fairly challenged. you start extending the time. maybe they can get there in five years instead of three years. it just becomes a market where you really have to pick your spots carefully. scarlet: you talk about how they might be -- where is uber? >> is a different animal. to me, uber is

i get the valuation is extended. right behind, though, is a 10% move in google over the last couple days that the rest of the gang with k. speak about. >> and that's sort of interesting ahead of its earnings report, google. >> it has been sort of a stealth move. we don't really talk about it that much. it's a name i've been long for a while. last year did nothing, this year had an okay year. i would love to see expense control. there's a lot of hope that we see a different kind of cfo function and always capital allocation. please, please use the money. buy back stock, dividends, something. >> doesn't that make a little nervous to see the journal article today talking about expense control a day before the earnings? to me that's one of the things -- it sets up a little poorly. you have a new cfo. you've got to imagination the whole thing. you don't want to drop bochbltz first call is one of the worries i have. >> i think the interesting thing about google and netflix are the runs we've seen in the stock prior to earn

the first is valuation.de from 2012 a year where the whole market had turned on netflix and the stock was absolutely hated, this name has seem ridiculously overvalued with what's known as traditional metrics. at one point in 2013 netflix was turning at 600 times earnings and nobody could get behind that and that seems appallingly expensive and that was right at the beginning of the multi-year move higher and now it trades at 390 times next year's earnings estimates and again, these are too pricey for the vast majority of money managers and as i've been saying for years, sometimes you can't use traditional valuation analysis to understand a dump and netflix is one of those companies and this is the company that's pumping the vast bulk to fuel ever more explosive growth which means the earnings are the wrong metric. hence, why everyone always focused on new subscriber growth. and, look even though netflix had seemed expensive that argument has cost you time after time after time after time and it was at 500, a

i would not expect this to result in a bear market be you could get a good valuation. charles: you say these are dictating the next movement? >> broad and outdoor you topped the indices'. there chasing grows in the economy that is not growing as fast as they would like. with my 50 years in the business it has always been an egg - - j dash - - eight dash. >> telling investors to chase is incredibly dangerous and vice. >> but you could go well with a fast girl flow will burn you or mary to spend the rest of your life. >> but that is crazy and that might very well be from google. charles: those of the market longer term i cited difficult to have that average investor long term is more than 24 hours if you say you are an investor if it goes down 10% you cannot sell it to. it is hard up to give information or help if they always have to be on the winning side. you cannot always be on that side. what do you say? are you letting the tail wagging the dog? >> i don't see that amazon or google or facebook they are long term buys and that is the differentiator. apple will report

but there are still areas where valuations are quite inflated.ith a lot of height -- hype. but happened with different perspectives is going to be quite important to watch. nda: they want to go back into, but we need to look at monday as example. the perception was that the government has stepped away and took the money. we saw those shares take the big fall. that will be their problem going forward, managing perception until investors know they can go back in. rishaad: there are risks if they exit too soon. this is the thing, isn't it? 2013 when theyn ,tarted to signal the tapering we supping tumbles -- big tumbles. it is a conundrum for policymakers, they are now engaged to make extraordinary support measures. tim: part of this can come from global investors and the institutional development of investing in china if they let the policy continue to go forward. fromed to see the shift retail momentum speculation. part of that will be the confidence policymakers have not to diverge the course. rishaad: what about the historical context? aboutked a

the valuations are nothing.t is crazy. emily: what is it without alibaba? >> a really good advertising company. maybe not the leading one, the most impressively growing one, but it is an impressive advertising company with a lot of unique users a day. i would go back to the point about private versus public companies. any private company right now at 600 million users uniquely every day, even if they had not figured out how to make money, would be cherished by investors. this one is being treated like a nobody because everybody is focusing on alibaba, and maybe there is the sexism about laura said. i think she has a higher bar that she has to meet and other ceos. emily: you think because she is a woman she has to get a higher bar? >> shocking. >> i do not agree. i think marissa has done a great job at this company by any measure. however, what you are starting to see in this company is the battle they are going to have to fight to be relevant. they have to do to things. they have to spend an enormous amount of m

emily: and our valuations good from your perspective?it is not terribly controversial to see -- say that valuations are relatively frothy. there are a number of companies we are excited to be with, so it is an interesting time. emily: so is crowdstrike the latest unicorn? what valuation are we talking about? gene has deferred to you george. george: we are not specifically given -- giving out specific numbers, but i would say unicorn is a good way to describe it. emily: ok, what about your plans to go public? george: really what we are focused on his customer acquisition geographic expansion, building out our falcon platform and working with the security market where other technologies are falling down. emily: ok. approaching unicorn status. i will take that, george and from google capital, thank you both. still to come, max's creation of hit after hit. we will check out his latest creation, after the break. ♪ emily: it is time now for the daily byte, 2.1 billion dollars and that is the value of short sale positions tied to just $5 billio

valuations of companies no assets, no resources, no prior sales. i have to go to the bank and when i need to borrow money, i have to basically convince them that i don't need their money, and i have to show them revenues, infrastructure, so, again, we're repeating those sins of the past if you will. and this is a lot of money that they're generating. i don't see how people are willing to make these types of investments especially when you're competing with some of the largest companies in the world that can play this game. if jet.com wants to raise to the bottom in pricing, it's going to hard to beat the amazons and the walters of the world that are tried, true, and tested >> yeah. they might be tried, true, and tested, but you also look at the fact that amazon itself keeps building and expanding and piles up the revenue doesn't necessarily pile up the earnings >> that's right. and that's the -- >> go ahead. >> thanks, neil. and it is great to have you back. and ryan makes some good points that there are some valuations that are really height. but