really, really high price to sales valuation. and this is, again, it's just another by-product of a world of scarce growth. and so there's always going to be outliers like zoom, like snowflake and other names that have really, really elevated valuations. those types of names today is where we'd be paring back. we expect there to be some volatility at the tails of the investment landscape. so the really expensive growth stocks that really haven't come into their mature part of their business cycle yet, and the really cheap, older economy value stocks which we think the economy's just not going to be strong enough to really lift those more broadly. we want to be careful with both sets of those areas in the market, so we've been suggesting more of a garp approach, basically being more in the middle. basic valuations, they don't have to be cutter cheap, but also -- dirt cheap, but also good fundamentals. you don't want to sacrifice quality for a cheap stock. maria: with so many people talking about a blue wave and the potential for j

current valuations. implausibly well. the value stocks have been savaged in no small measure because of covid. -- anothereristic characteristic is that profit margins are thinner. when you are looking at the value stocks, with the covid lockdown, the skinnier margins, the pre-existing headwinds, the national fear is, a lot of these are going to go bust. so far, relatively few have. isthe covid situation resolved in the months ahead, we will see how many bankruptcies you get. but you literally have to have half of the value stocks go bust in order to justify today's valuations. romaine: when you do get to that day where you see a broader recognition of whatever value is and whatever investors interpret it to be, does that create a situation where it pulls money out of growth into value, or is there enough money on the sidelines where you could see money rush into those value names without it being at the expense of those growth stocks? rob: it can be both. one of the things that fueled the growth bubble t

is this really the end of this valuation matter thing or is it valuations matter a little >> i thinkaluations are beginning to matter. good afternoon, jon. i thought the earnings after the october 13th close that led to a 30% decline the following day was potentially a canary in the coal mine in terms of the markets paying attention to valuations, and that paying 45 times sales maybe is a little extreme, particularly when a company which had a good quarter but had sort of needs ker guidance, and i'm not questioning the fundamentals of any of these businesses, it's really a question of what do you want to pay for that business? because we have to keep in mind that an earnings multiple or a price-to-sales multiple that goes from 20 to 30 is a 50% increase in the stock price without any change in the fundamentals. >> yeah. >> and vice versa to go to 30 to 20, the stock is down 33% without any change in the fundamentals. >> so how much do valuations matter because at beginning of the year, pre-pan democratic and all of that, apple was like at 60 and now even despite it's dropped, it's st

people will say no good on valuation.th the name >> tim,you actually tweeted about this you've been a shareholder of mcdonald's >> i have been look, when did mcdonald's get so hip? mcdonald's is defining hip i know it's crazy. this is where they are and they're actually finding cool there whether it's an oreo mcflurry or travis scott, i forget what his milk shake was but the bottom line here is through covid-19, obviously, the drive in, the takeout, the themes that mcdonald's have been a beneficial trend continue. but also the valuation that comes for diblgital and online d the loyalty programs is exactly why i think the stock moves higher >> hip or not, the drive through, the digital, karen, that is perfect for a pandemic >> it is the i mean, mcdonald's, there are a couple of them that were already heading that way of being more diblgital being more important. if you look at a starbucks, mcdonald's and then they accelerate into the pandemic i think obviously the stocks are doing okay i think the businesses will all be be

>> so valuation can't matter here because of the upside.f you look at where this thing is only 5 percent of this market in this latin american situation is using e-commerce so the ramp is so steep and so significant that the valuation will continue to expand because the money is going to keep coming, valuation is not compared the same as in the state because the market is so new. >> buying or selling his pitch guy 1234. >> - guy? >> i'm going to stay long into november 5th. tremendous power pitch, well done, james. >> tim seymour who has been known to traffic in this name. >> james this is a great, great call by you, nasty cheese up and in, by the way that's a map of south america, okay. yeah, i love the dem grattic story, i love the 4 percent penetration on e-commerce on 675 pops in latin america, it's huge, huge business. good job >> dan. >> very nice job, james. i'm not a buyer. i love the fundamental story this was a show that didn't look at charts and parabolic moves, the stock rallied 35 percent in the last month alone i suspect all o

but the valuations are, you know, unless you're really looking 10 to 12 years out, the valuations areow. i think there will have to be a correction before institutional investors really start buying back in the same numbers they did premarch or prefebruary. >> ross, but why do you blame retail investors for the sky y high valuations. they know how to buy but no idea how to sell. it is more volatile and problematic if they acted like day traders? >> yeah. it would by the way, i put myself into the retail category. obviously, i'm an individual investor as well we buy things based on brand and marketing and awareness. and then we buy based on, you know, media darlings versus, you know, things that get slammed in the press. so, you know, obviously what really happened say lot more people are at home with a bit more exposure. >> that doesn't give them a lot of credit, ross. >> say again >> you are saying -- that doesn't give them a lot of credit if you say things like they're buying on what they read and media reports. i mean, how can you classify this huge group of retail investors as suc

there was a time on valuation. they had visibility and a recurring revenue stream that gave them a multiple better than the market they are trying to get back to that in terms of the stock, in my opinion, i think you have been handed a gift. you have been traded up to and closed at a level we topped at on june 5th. to quote the steve miller band, i would take the money and run on ibm >> karen, what is is your thoughts this is a company known for financial engineer guy outlined the number of businesses they have divested over the year much is this part of a true evolution of its business or just making the business look better [ no audio >> i think we are having problems with karen's mike we will work on that i will pose the same question to you. >> on face value it is financial engineering. that fits the bill of the definition of what it is with that said, it is a matter of whether they can deliver. i can see value in focusing down on cloud computing if we look at some of the other companies, crowd strike, we could

now, then the question on valuation, health care -- francine: go ahead, martin. : health company valuationsck to the pre-covid 19 levels, and are actually now well above their 10 year average. very interestingly, meditech services are trading above pre-covid valuations despite generally negative share price performances. if you look at the valuations in particular, they are the highest level over the last 10 years. valuations are slightly down compared to pre-covid levels, and in line with their negative share price development. but it is fair to say that all forhis does not yet account earnings estimates, which we undoubtedly see in the q3 results. francine: thank you so much for joining us today, martin henrichs, the head of health care m&a at ubs. it is said that debt relief should be extended through the poorest companies through the next 10 years. he told jonathan ferro that the pandemic has worsened inequality, with developing nations suffering the most. >> it has already gotten bad. that is showing up in the numbers and is likely to get worse as we go into 2021. one notable part of t

another red hot valuation. it is actually profitable.eed to do more homework before i can recommend it. remember many super high-growth investors and money managers are repelled by earnings number nine, another old favorite of ours, cloudflare the stock splits higher and as much as i love cloudflare story, this is a $58 stock. it would be a $44 stock. don't be afraid to ring the register up here number eight is coupa software they got a proven roi if you hire them. they make it easier for corporations to cut cost bizarrely bill.com is more expensive even coupa got much better earnings. obviously you would put this one here and that one there if you really want to make any sense. a hedge fund will short this one and go long that one bill.com is very vulnerable. i want you to stick with coupa now this is another one that's a fair trade we got spopify and big commerce. big commerce just came in public so basically it is copy-cat. so many businesses need to go digital to survive i would rather own shopify it is already turning a profit with

and your answer is about, we worry about valuation all the time. answer to that to a certain extent is these are blowing out numbers. they continually beat and beat and they aren't beating by 10 cents. they are beating by multiples. at the end of the day it's where it areas just continues to exceed estimates so estimates continue to rise. herefore, supporting that valuation. that's where i would get concerned. meeting st now numbers and we're paying 35 to 40 times for these things for meeting their numbers coming in disappointing from that perspective. that's where valuation comes in but at the end of the day you have to buy something else, unless you're going to pull your money out of the market you have to go somewhere else with that and there is just not many areas that are executing in the way these now.ompanies are right so that's what keeps me in there and keeps us involved gradeient. it's the fact that they are beating and exceeding what they have said they are going to do faster thanwing anyone else. >> jeremy bryant, it was great to have y

for valuation, the more fanciful an distant, it seeps the better the stocks performs. is he right? are we in the midst of an enormous text bubble, pete >> i think we are in the midst of certain sections of text that are definitely in a bubble right now, scott there's no doubt about that. we look at some of these names that have absolutely soared to the up side. we all know those names. zoom would be the poster child you go across the board and say they're in the right place at the right time but are they fairly priced or are they a little bit in that bubble area i think many of them are but right now, scott, it's about growth and there has been growth and cash and last week we heard wre rick riether last friday and you're looking at growth and cash and other things. there's no doubt about it there are names up in the sta stratosphere i don't know you could say that about all of tech. we look at a name even like tonight we're going to be talking a lot about a name like microsoft, we're going to talk about apple, a lot of these various names where the pe levels these nam

that makes valuations different to analyze, but when you look at how low the yield is, a 4% dividend looks good here >> 2% looks good, anything these days seems to offer a little more value than the bond market. thank you both, we appreciate it today on these markets. >>> let's hone in more on the jobs picture which remains mixed. we had initial jobless claims aiming lower, it's a continued, but very slow improvement. the airline furloughs that could start today, if you include those, companies have collectively announced 72,000 job cuts just this week. at the same time recruiter.com's september report says recruiters this past mob have never been more bullish with me is evan seohn, great to have you back. do you mean they've never been more bullish on this recovery or never been more bullish, period? >> we were talking about this this morning it's inched up to 3.3. this is still out of a 3.5 sentiment number, so we're still low, but certainly see an up tick workloads have never been higher more importantly when we look at the time impact of covid on their activities, that's also dow

the market is conditioned and entirely dependent on ever more liquidity to support the valuations thathave right now. we just came out of a 10% correction on the s&p, 15% down on the nasdaq, so we just had a rally here obviously assumed by oversold conditions going into early october. but keep in mind even if we get stimulus, we're still looking at historic highest valuations in history, which is kind of ironic because at the same time, we have fed governor after fed governor come out and warn of dire consequences if there is no stimulus and that is how fragile the construct in this recovery really is underneath so i think participants are really dependent here on believing that ever more stimulus will continue to support ever higher valuations . >> as you pointed out, it affects the dollar and the dollar looks like it might be turning around higher how important is the u.s. dollar to the equity market >> it is fascinating late august, the bullish pattern broke out and equities dropped and so it was a really clear relationship and the bottom in equities came exactly at the point where

-- and better valuations.marie: if you take money off of tech, where are you putting that, sector specific? fabiana: from a sector standpoint, we have put that money in sectors such as industrials, such as materials. we like specialty materials. we also like -- we spoke about that earlier on -- the sustainable investment theme, ultra renewables. those have been the areas where we have deployed. also, from a regional perspective, we have taken money out of the u.s., deployed money in north asia. that was early this year. more recently, we have increased the weight in asia and we are still running a smaller weight muchrope, where we very like the specialty material, industrial sectors. annmarie: i know you like north asia followed by europe. what in europe do you like now, given how gloomy the european economy is getting given these fresh covid restrictions? fabiana: you have to have investment in there. in the shorter term, the european economies are going to get hit, no doubt. but if you look at it on a six mo

you know, valuations are extremely stretched.e fundamentals -- there is a considerable distance between the valuations, of course, and the underlying fundamentals of the economy. what does that mean to investors and how they should position? we still focus -- we think there is an economic recovery. we think it will be long, it will be protracted, there will inevitably be potholes, but we do think it will be there. at the same time, central banks have been the main driver of the markets over the last six months. they are still standing behind markets. there is a huge wall of liquidities fill in helping capital markets, so with that in mind, we do think that a correction is unlikely at this stage, so it means still risk on. given that uncertain environment, you need some kind of defensive positioning. we like mega cap tech as i said, for the next couple of quarters, it should be relatively safe. yousef: we will see how it plays out, seema. i always appreciate having you on the program. seema shah, chief strategist at principal glob

remain elevated valuations for real estate goes up go ouall the way down the chain i think what he's saying is right. i think a lot of people have realized that for a long time now. i don't think it's a newer or novel insight. maybe you could say post-pandemic it's like on steroids or been accelerated >> liz, spacs, the latest and greatest investment opportunity, i guess you would call it. how should our viewers view these right now relative to all of these well known investors who are now and even as i mentioned to chamath, even martha stewart has a spac. now today you have the very first spac etf that goes out for trading. how should we view these >> look, i think every five to ten years or so we get a new vehicle to invest in we get a new vehicle that's available to individual investo investors. this is another trend like that. i like the fact it's bringing more interest to the market. i want to go back to a point that josh made and really harp on something policy that we have gotten and sochl t some of the activity keeps prices elevated but it doesn't drive a rally from here. we

what about the valuation this is one of the most loved sectors of the market. is it high by historical levels? >> for pulte specifically, we find it particularly attractive. we added it to our analyst focus list this morning and as of yesterday an up side potential of 39% currently as of yesterday was trading at only 7.5 times our forward numbers against its larger cap peers at over nine times yet also having the best margins and returns in the larger cap space, rureturns outside of nbr that is in terms of the valuation for the group overall, actually it's trading right in line with the past cycle at this point in time in the cycle on a relative basis. so currently it's trading roughly at half of the market multiple and in the last three years, it been in a range of .4 to .6, right in line with the range it traded in the first half of the 2000 decade. >> yeah. as well as they've done, it still not screaming that it's overvalued thank you for joining me, appreciate it. michael rehaut of jpmorgan that does it for "the exchange." sick around for "power lunch." i w

this is about valuation. this is about driving the valuation. he's very satisfied with the third quarter momentum. the lines are on trading. what else are we seeing? annmarie: he doesn't rule out, nextext year -- out m&a year. he said the bank has outperformed its own target and he is laser focused on executing on his four year strategic plan. if the bank valuation were to recover, then maybe they would be in a better position. they don't want to be a junior partner in any sort of tie up, do they? manus: no, i think therein lies the point. if you think about the valuations, the market caps, deutsche bank is at $18 billion. have a look at the figureheads of may be the flavor of the deal. in comes ralph hammers. it could be a fascinating period a time next year if it was ubs potential tie up with deutsche bank. but of course nobody wants to be the child in the pram in that deal. we don't want to be the junior partner. hence the reason why you focus on that line about valuation. let's dig in. he spoke exclusively to matt miller. we see actually an

to justify its current valuation, are they doing a good job here i think so this is the idea that you not want to be on a zoom video all day, but you can transfer this to your phone and go for a walk when we are all working from home, that's appealing the transition is simple and quick to get on a videophone call and why bernstein, i believe, is saying there is room for this sky high valuation to go higher. >> they are saying the future of video conferencing is the conference call. it's such a tale of the biggest two tech high flyers zoom up another 5% even though fastly is getting creamed. there is a specific aspect of fastly where apparently they are losing tiktok business i am surprised that zoom isn't suffering more on this kind of nervousness about how much these shares -- >> you would think at some point maybe we get a broader rethink of exactly what are we willing to pay, valuation willing to apply to a company that is admittedly accelerating into a fast growing market. zoom is turning profitable they do have business describers but a $150 million market cap. for 2025 estimates

people would like to get back to this traditional valuation but valuations don't mean revert that's just the truth. over shorter time periods and your starting valuation has very little power in terms of your future returns most of us don't hold for seven to ten years it's a few years at best and sometimes it's even shorter i just want to underscore when people talk about the equity market being expensive, they're failing to consider that most of us have a full sweet are and other assets are more expensive than exwits so on the cross section, equities look food we're preeces risk differently we're all using alternative data and third-party vendors to validate a business model. against that back drop i think we can have more confidence in future earnings. we should allow the market t rerate, especially those in a tougher economic cycle >>> thank you so much for calling in i know we're going to be talking to you a lot in the days ahead dom chu looking it the leaders and the laggards here. >> we're going to put some numbers and charts behind this if you take a look at the s&p 500, we are do

but i don't think that the valuation is crazy given that wn >> and dan ives will exceed that of 2015 which was driven by the 6 plus where sales rose 52% in the following 12 months after that launch. history is fun, making those comparisons are fun, but we are in a pandemic. >> and history doesn't repeat itself, it rhymes. and you have to get 75 million shipments out there to get some of those numbers we've been talking about 5g for a nine months. i think today may have a lot to do with technicals and again the fluff in all of those names. the good news i think for the market is semiconductors made an all-time high and showing a lot of leadership. but nothing about today's news that makes me run out and buy the stock and i think valuations are a little challenges. >>> and coming up, we'll take a look in amazon ahead of its prime day. and later surprising call on what a win by joe biden could mean for the oil market. we're counting down to the election and trading the vote. ♪ you can go your own way ♪ go your own way your wireless. your rules. only xfinity mobile lets you choose shared

valuation chickens for a while.ng home to roost. >>> tesla rival fisker is making it's debut this week you can see it there, up autbo 6.5% don't go away. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity. with this seal, this restaurant is committing to higher levels of cleanliness. ♪ ♪ ♪ ♪ the expertise that helps keep hospitals clean, is helping keep businesses clean too. look for the ecolab science certified seal. new projects means you need to hire.gers. i need indeed. indeed you do. the moment you sponsor a job on indeed you get a short list of quality candidates from our resume database. claim your seventy five dollar credit, when you post your first job at indeed.com/home. it's time you make the rules. so join the 2 million people who have switched to xfinity mobile. you can choose from the latest phones or bring your own device and choose the amount of data that's right for you to save even more. and you'll get 5g at no extra

are there certain industries or certain companies that you think maybe the valuations are not so stretched think one really interesting industry that is making the transition to digital among all the examples is in the u.s. real estate market. where it's still very much an analog transaction despite a decade or more of turning that into dajta digital marketplace. this is an example of what is happening to older economies and older parts of the economy the they transition. so you have companies like zillo and redfin and open door trying to take an analog transaction and turn it into a diblgtal marketplace with he see certain really interesting characteristics like vertical integration matters, data matters, software matters, user interface matters these are all things in the analog part of the economy didn't really exist but now they're the things that create the winners and accelerate that digitsal transformation. >> chris, i want to pose a similar question to you. you're bullish about certain tech trends. what are the areas where you think there is still opportunity, you know, we could ta

it deserves that valuation by the way, it probably deserves more of that valuation i can make an argument just based on that math it should be a $125 stock but i think citi is in the dog house n the penalty box for good reason but that valuation specifically to me, even with all the head winds, with all the thing we are going to hear about it remains somewhat compelling to me in citi tim, you are in citi, correct? this didn't prompt you to reevaluate your position whatsoever >> chateau bow wow i didn't hear it the same way karen heard it today i respect karen's call citibank, which has underperformed jp morgan so relative to another money center bank best of agreed by 20% since that june 5th high, by 20%. and i think the issues for citi bank really are get on with the restructuring. the reference to whatever went on in today's call but importantly, the fact this has proven to be a company that isn't controlling expenses like they used to that was disappointing today, too. the best thing citi had going for it were reserves that were loiter than expected i didn't hear anything new, there wa

they did these valuations every three months. this is separate from airbnb's overall valuation.s is common stock. it shows that the airbnb and people who are evaluating airbnb believe it is improving from where it was in the depths of covid when it was struggling in the second quarter of this year. emily: what do we know about how the business is doing lately? katie: the ceo of airbnb has been public about how they have rebounded from the difficult period they were in a few months ago. he had gotten a hold of the financials a few months back and the revenues have fallen 67% for the quarter. what he is saying is they have seen a lot of people renting airbnb 's again, quarantine houses and local travel. the business has rebounded much faster than expected. it is what we why the evaluation is going back up. valuation earlier this year when they took on debt was $18 billion, down significant a from $31 billion, where they were valued at a few years ago. people close to airbnb say they hope to the value close to $30 billion when they go public in december, that is speculation at this

some of these stocks are trading at sky high valuations ubs today takes on one of the issues of their five key questions for the last quarter of the year and asks the question is the tech bubble about to burst they don't even think tech is in a bubble at all. they say current valuations appear justified given expected earnings growth of 18% i don't know do you agree with that are you comfortable with where tech is trading as a group >> as a group, yes, i am, scott. and, you know, we just heard with josh lipton talking with twilio ceo and i think that many of these areas will continue to grow in 2021-2022 and on now, will they grow at the same pace, which is a different question, i don't think so i don't even think apple will grow at that same pace i don't really think very many of us do but holding on to gains of the sort that you've seen out of twilio or even out of -- if you want to stretch tech a little bit, over to roku, there are a lot of these stocks, scott, that continue to grow, even after covid is in the rear view mirror because we've embraced them, we like the tech and becau

this comes at a time where we are seeing the s&p 500 valuations at record highs.s chart on the bloomberg showing forward p.e.'s at the highest in almost two decades. how impactful will the coming earnings season be given that really every dollar below estimate could have such a big impact? shana: i think it's very impactful in terms of where the market is going to go. i think the second quarter where we saw 84% of the s&p 500 companies surprise on the upside is indicative of how low consensus estimates are. and maybe valuations are not really reflective of the earning power of these companies right now. shery: what about specific sectors within the markets? because we have seen a lot of strength for semiconductors, we saw some dealmaking recently. is this something that still plays into your portfolio? shana: so, i wish i could say fundamentals were really driving market editions, and the market returns, but it's not. so, what we've seen and what we on,today is this, this risk risk off trade which is traditionally always been between fixed income and equities. but

that's pinterest it's one of those high growth, high valuation tech stocks that had a tremendous runl it? >> to us the reason why you sell it, you can only figure that out when you know why you bought it. we bought pinterest in march, the stock had been trading in the 30s and it fell to a low of about 11, had $3 of cash on the balance sheet and we didn't think that the pandemic should cause a two-thirds reduction in the price of pinterest the stock then went -- i think it hit a low of about 10 to today it's trading a the about $50 a share. so it's at five times the price it was in march. we don't think any less of the business than we did in march. we've gotten even more comfortable with it, but as a value investor, price matters. and at five times the price it was, to us it no longer looks superior to a lot of traditional businesses that we can buy that haven't fared as well in the past seven month ps. >> >> you're sounding like you're sayering that abo ing sa broader swath of the market and it's reminding of a painful period in the sector >> will certainty there will be a period th

those are exciting things, but the valuation is in that already. >> if you look at facebook, they hade runs which might play into your setups and going into next week, in that they might have made these gains already based on snap. what do you make of the trades >> if you look at qqq, it held a pretty major support level at 282 if you look at the price action this week, i think it's been fairly constructive for the index to hold this level, but one catalyst i am more concerned about outside of the earnings next week is the potential of a contested election i think that's the type of catalyst that could drive technology shares down 5 to 10%. i think mike's way is a good way for investors who want to remain to stay in and take a cheap way to buy yourself some downside protection down to the 2.50 level, which is about 12.5 level, only costing you about 1.5% of the etf value. >> if you are like tony, less concerned about what is coming up and want to buy the protection, you can take advantage of the elevated volatility by selling some upside calls a lot of these are selling close to their

the mega tech space are challenging here >> it will be the most effective on combination of both valuation and regulatory headline. i think it's microsoft i am not happy to say it, but probably also facebook it's about the strength of the medium and small sized businesses businesses >> coming up ♪ ♪ "hmm's and ahh's" heard in-call. ♪ ÷yyyy >>> welcome back to "fast money. ge stock dropping today. agency saying that they violated reporting laws they fell 4% today, thestock down more than 40% on the year tim, you are in this one >> look, i think the story around ge's accounting and particularly in this insurance unit is having regulators have been looking at for a long time. the insurance business notably and effectively it sits inside the ge cap business. it sounds like the regulators are grappling with how broad do they want to go. in terms of pragmaticism, it may be more important to focus in here is this material for the stock impossible to know if you look at one of their business units, ge's issues are about free cash flow and about the balance sheet. those are things i don't change i

people may say valuation has caught up. 203% growth, all strong numbers. people took this as an opportunity to take profits. i stay with the name >> tim, mcdonald's or chipotle >> mcdonald's. the last time i checked the burrito blowout was not anything sales growth of 8% with a 94 pe. i understand what digital has been, but this is a fast casual business color me wrong at the same time. i wouldn't be changing my tune their digital is impressive. costs were weighing down margins. they talked about no profit until fourth quarter next year i don't know why you chase it down if people are waiting to buy weakness, wait more. >> it's the way of the world for people who use tech effectively. you see it with this and with dominos, with the massive rise higher and with amazon. they are a book seller and do a massive business online. and you are seeing it with peleton, karen >> i am not sure what to make of the peleton. the future is on future subscribers. i am not sure how many there are, but chipotle, there were a couple of things in the margin i think went off th

allow people to focus on right now is that a lot of that price appreciation has come because of valuationansion. the multiple has increased right now it's trading at 28 times trading and 27 times forward. these are ten-year highs and it hit a 52-week high today although it didn't quite close on those high levels going into earnings, options premiums are slightly elevated and options premiums are elevated slightly generally and the election has something to do with that, as well what i'm looking at is the diagonal spread and you can pay $6 and a quarter of those when i was looking at them today and sell the november 140 puts at 2 1/4. net-net, you'd be spending $4. collect the elevated premium that you would see in the near-data expirations and make a bearish bet. one of the things i would also ask people to consider this is not a stock that tends to move violently out of earnings out of the last 44 reported quarter, there have only been two where the stock is down 10% and that's why i'm comfortable with the put we're not vetting that it will collapse, and we're looking for softness and th

when i look at valuation, i'm sure stacy will will weigh in on this, it had to do something organic growth isn't enough to match the value of the company there isn't any overlap but there is in some of the markets that i can see them getting in i see it broaden being in carrier play, with 5-g edge and also nch automotive. i think that the key part here is, sure, it's really big in high performance at pgas they also have advanced soc designs that have a different kind of processors on them requiring a hot of different software to go into it >> xasy, these deals are exciting and get the juices

and over the summer, private market valuations started catching up with the public comparables.ow could not be a better time for any entrepreneur to raise money at any stage. i suspect some of that does change. there is a delinking between late stage rounds and early investing. we don't really care what public markets are doing because we are investing five to 15 year i have when this companies are going up, so it would be irrational trying to project with the world is like is 2030. but what we are trained to do is build a company for 2030. the later-stage rounds, the companies are more familiar with, because more consumers use the product, almost by definition there is a relationship between how they are valued and their access to capital and how public markets perform. but those are more tightly linked and somewhat more in jeopardy postelection. 's keithounders fund rabois, we can always rely on you to keep us interested and entertained. tech"n "bloomberg as we take you into a socially distanced operating room. ♪ ♪ operating rooms, bustling with surgeons, aides, students, not

bad news is that my valuations will drop considerably whatever else i do that is not straight retailrect? >> yeah, i think that's right. so in our look at the data, it looks like the drop in value is about 60% versus what its use was as a retail space. but that is a big hit right there. and the other thing that complicates that, there is a limits to how much of that space can be turned in to e-commerce warehouses the issue is that amazon in terms of generating square feet, even if you swap dollar for dollar for sales, you only need about 15% of that space to be turned into warehouses in terms of what will potentially close >> wow, a 60% potential drop in valuation, if you change it into something else, ryan and your team, a fascinating report on retail and real estate valuations appreciate you coming on thank you. >>> on deck, why your next guest agrees with jim cramer when it comes to this stock which is down nearly 30% this morning who is that mystery chart? by the way, you can always watch or listen to us live anywhere on the go with the cnbc app what if you could have the perspec

do you think equity valuations have reached a run a little bit? some may look at the growth segment and say we are looking at lofty levels even with the correction in the last months or so. what ones do you like at the moment? greg: when we look at equities, if you look where premiums are in the u.s. relative to the international markets and we index, the fair value what we see is the u.s. markets are at the higher end of what we could -- would consider fair value. because of the difference in valuations, what is being priced in, we believe the equity markets over the next decade will probably generate better returns than what you will find in the u.s. markets. .t is difficult internationals have underperformed in the last decade. but because of were starting valuations are, we believe the returns in the market will be greater in what we would see in the u.s. markets. jonathan: we would like to get you on the show again. i appreciate catching up. greg: thanks a lot. jonathan: the week ahead, coming on mondayer coming from the united states. fed ja

-- recession and the discounted valuations will eventually be proven wrong.n: how dependent is that siri on what happens next in washington? much, not really that other than how is the economy if tax reform to happens, or what happens if regulation kicks back up again. the economy is going to go through the dislocation that has happened, well beyond which administration is going to be in place. there's things that are just going to change behavior that are going to upset the businesses. that has already been built into what we've experienced this year. tom: we've got wells fargo at 8:00. let's drive forward to the train wreck. how are they doing in restructuring? how are they doing in erasing 10 years of challenges? marty: at this point it is almost like there's two points on wells fargo. ae is what they have done as management team and been forced to do this year disconnects wells fargo from anything we have known before. the legacy of being a high-performing bank, a legacy of the gold standard, you can just throw it out the window. what we have now is it is

stocks have5% pe stayed in the same valuation range they have been in over the postwar era. when i look at 25% of the stocks out there, rates of return on equity were in one range through about 1990, and have gone into much higher ranges since, while the rest of the stock market, 75% of the other companies haven't seen that. my point is that highest part of valuation in the stock market, mainly made up by new era technology and coms, they are justifying their performance with excessively good fundamental performance, and i think that continues to be the case. the products that apple comes out with, you just cannot really 80% of the 75% to companies in the world. i think that growth against an economy which is growing very slowly, to percent, 3% for a decade or more, is just outstanding and probably worth a lot more valuation. jonathan: can to those margins either. jim, great to catch up, as always. jim paulsen of the leuthold group, thank you. minutes, we will get earnings from citi. one thing not talked about enough is the l performance of small caps through this month so f

this gives it a valuation of $313 billion again, this is largest ipo ever. we can take a look at some of the other ones that came close alibaba, $25 billion this is just massive what a time to go public john, takes a look at its valuation based on pricing last night, that $313 billion makes it bigger than many, many of our u.s. financial institutions, including all of the big five banks, jpmorgan, trading around $313 billion market cap. that is a monster. we'll see how it does. microsoft, adobe and c3.ai are taking on sales force in the crm space. joining us is tom seibel, seibel and crm are joined in the minds of people who do know tech how big of a deal do you think this could be? >> it's a big deal what's been going on is microsoft and c3.ai have been working very closely with new customers around the world and our customers have been asking for a new generation of crm that takes advantage of the full power of ai. microsoft had a very close relationship with adopey -- adobe so we put our efforts together for banking, for telecommunication, that take advan

there are tons of stocks in this market way too expensive by any traditional valuation metrics. however, that does not include facebook, apple, amazon, maybe alphabet say nothing of microsoft only netflix is one that i think is a bit of an outlier this is 2020, not 2000 that being the dotcom boom with the exception of amazon and netflix, all of these big tech stocks are valued based on their earnings, not their sales. the stocks are up, maybe the earnings haven't moved up as much but we're not talking nose bleed levels right now. apple, microsoft, alphabet and facebook all sell for 35 times earnings estimates apple used to sell 15 times before it developed that continual perpetual earnings revenue stream that comes from service. before you say 35 times earnings is too expensive, though, remember that these are some of the best businesses around the average s&p stock saw 25% earnings they trade at a premium than the average stock, but aren't they better than the average stock? don't they deserve a premium these companies are taking over the world. i don't think they're average. i

we think valuations look reasonable, not too stretched. not necessarily follow that tech will be the leader of a rally for the medium term or near term. what is really critical to look out for is that value premium which has disappeared, and value stocks and cyclical stocks in financials underperformed badly over the recent period. that could change. when value performs, when that valuation premium comes back, it tends to come back rapidly and powerfully, and the driving force behind that historically is a steepening of the yield curve. that has always happened after a recession and during the recovery. we have not seen it yet, because the fed is anchoring longer-term rates low and forcing them down. if the economy continues to recover and inflation picks up, and inflation expectations recover, you will see the yield curve steepen. that means cyclicals and financials could come roaring back suddenly, and the talk of a bubble on the tech side would dissipate, and there would be a sense of valuations not so stretched. it goes to our question