Transcripts For CNBC Squawk Box 20171110

That today, we are here with ron baron at the baron onference we have a lot of things coming here the resort ceo will be joining us and hyatt ceo is going to be here these are three invesmentes of baron funds. Two of the three, baron already made over 1 billion on. Im not going to tell you which two. You have to stick around to find out. The other made several hundred Million Dollars already. We are going to talk about these issues when we sit down with ron, he talks about the broader markets, which he is very positive on them we are going get to that in a moment and we talk story stocks. Stories he sees from this bottom up investment that he does where he looks at things very, very closely, he and analysts we are going talk about the bargains they see along the way and the deals that are out there on the horizon hes sitting out there with us we are going get to him in a moment guys, its coming up in a few minutes. He did not invest 100 billion dlar to make a billion. He is far less than that, right . Reporter right exactly. He didnt invest 2 billion and now its worth a billion no, no, he made a billion dollars. We invested we had 100 million reporter dont say which one. 190 toet l for the firm we made 23. 5 billion. The old saying. A small fortune you have to invest a large fortune. Reporter no, not the case here we are going to dig into the details in a bit lets check out markets after all that movement yesterday after the Senate Introduced a bill that delayed the Corporate Tax cut. Other things in there that maybe are a little bit better, according to the wall street journal and the lead editorial. When you look at it, really not that far apart well see. Theres equity futures 37 points. Market was down 250 at one point yesterday, closed a little over 100. Nasdaq down 16 and s p down six. Overnight, in asia, the nikkei, which sort of hit resistance yesterday turns around and some attributed that weakness to the beginning of the sell off that we saw in the markets. Then you have the hang seng and shanghai is up hang seng is down. In europe, not a lot to talk about. Fractional losses across the board. Take a look at crude, which i did see was interesting. Almost 60, but not quite, 57 now, wti, a barrel President Trump talking trade at a meeting of asia pacific meetings in vietnam saying the United States could no longer tolerate chronic trade abuses and insist on fair trades. Make bilateral deals with countries on the basis of Mutual Respect and Mutual Benefit the white house said President Trump will not meet with his russian counter part, Vladimir Putin on the sidelines a scheduling conflict ruled out a formal meeting spokesmen said it was possible trump and putin could bump into each other well have more on the asian trip in a few minutes. Our top story of the morning is there, disney shares on a roller coaster ride after an earnings miss. They dropped, then did an about face as it has Conference Call got under way. The turn around happened on comments ceo bob iger made about pricing with the new branded app. We have given a lot of thought to pricing, both espn and disney brand of service. I cant get specific with you, yet. We havent officially determined it we said we will be forthcoming with you on this sometime after the first of the year. I can say that our plan on the disney side is to price this substantially below where netflix is iger said disney struck a deal with the last jedi. There will be a new trilogy and star wars for disneys streaming service. The new Star Wars Trilogy raises hopes that the companys fortune will get better. Joseph is this better for you . Are you up to speed on this . Yes, but i dont want to go off track because we are still on disney and i know you have bart and crockette here. Okay, but as far as the 30 , is that better for you, on this . For me . Yeah. I mean, that was a problem for you in the past. How about the estate tax yeah. All helps. You think it matters if we delay it to 2019 or gets done and its permanent the lower, the top rate doesnt go up. Theres a lot of elements that i think are better. Theres a lot of daylight between all the sides. You were busy yeah. Were you able to watch this at all i did i was in between things at lunchtime. Thats distracting. You know this gentleman was related to the guy at the alamo, right . Isnt that true, bar ton lets bring in barton crockette. Werent you related todavey . Tied to an uncle of davey crockette. You believe that . One of these days you are going to come on dont. In one of those hats disney was down. It came back, but it didnt exactly surge after this im not sure based on it is it because some of the content will only be on streaming so that shows they are serious about putting premium content on streaming is that why people said hey, this is interesting and cheaper than netflix look, i think nobody really knows. I mean, we are all grasping at straws to figure out what exactly will be the initial investment they make and how to think about the subscriber opportunity. You know, its certainly encouraging to think about disney leading to something that is going to be priced low, disney branded content i think one of the things that drove the rebound is they called a bunch of onetime items, eps and the miss wasnt nearly as bad. With disney stock, you are stepping into the void of faith right now. Do you believe that these guys can get out of the kind of muted growth secular questions and turn into a story people have more confidence in whether its more supportive of the multiple . We are not sure we are there yet. We are seeing in this earnings cycle evidence that the secular concerns are easing for the group. The number of subscribers to the paid tv services that declined lessons in disney, they flattened at fox and cbs is showing growth the big impact content network plays are benefiting from the skinny bundles thats a light at the end of the tunnel for the secular concern that is killed the stocks the past couple years. Disney was the canary for all this if you look at the stock, it started being effective. I guess it was did it start with espn and numbers, which it indicated cord cutting that was two years ago when is the last time disney hit a new high its been a long, long time. It was then it was august, an Earnings Report where theres a little slippage in espn low single digit slippage but i think some of the peers are showing they can stabilize that and grow it with the platforms the hope with disney is they can get there with skinny bundles and their own overthetop service if its priced attractively with arc of the story, maybe it will change in a couple years. Is there a problem thats specific to espn some of the cutbacks were, i dont know whether its good or bad for the stock. They were deeper than people thought. Is that a cord cutting story or does espn have issues . Nfl . People think its political. For a long time, it was the crown jewel of all cable its really lost some of that luster yeah. The viewership problem at espn is focused on sports news. How much news are you getting on your local phone and other sources. Theres been a plroliferation o games. Theres more games on fox, nfl that, i think, is weighed. On top of that, there eelss a o bad press for the nfl. Espn has those challenges. Disney is cutting back their expenditures on that part of it and leaning into their entertainment, their kids brands with this online subscription push that is, you know wharks they are saying is thats where they want to go as opposed to fighting the battle in sports. Do you rate stocks as buy, hold or sell do you have price targets . Of course where are you neutral on disney i have a 101 price. The secular concerns are not enough where i want to put my next dollar in disney. I recommend cbs, cheaper equity, better exposed to growth opportunity, i think theres opportunities in the tv Station Companies trading at four to five times free cash flow, but close to the growth size of broadcasting barton, im hearing voices in my head. Thank you. Great, thank you. Okay. Thats the capital right now lets get back to becky quick at the baron Investment Conference. You are back take it away reporter im back. We have been here. We have been listening its been an interesting morning, already thank you, joe our cohost for the next two hours an host of the 26th annual baron Conference Today at Lincoln Center is ron baron, the ceo, cio of baron funds. Thank you for joining us thank you something went wrong with my ear. Thats okay you dont need it for the moment this is the 26th annual conference you put a lot of effort into it every year explain to people what it is and why you get folks together we are trying to let people understand when they invest with us, they are not investing in us, they are investing in the companies we choose. We keep investing our business, hiring, retaining people so they can identify businesses that are going to grow a lot and theres something about them that is competitively advantaged we can hold them a long time the average Holding Period for our funds is eight years, maybe. For baron growth fund, the funds i manage, the largest, 14 or 15 years. Publicly owned companies whats cool about that is, even better, that fund has outperformed the market by 500 or 600 points a year since the founding which mean what is in terms of overall growth . Compounding is 13 some on percent and the index competing against is seven its with 80 volatility what we are trying to do is show people its not really us, its these companies we have invested in long term thats what they are invested in we want them to see the executives, look them in the eye, see if they feel like they are smart, honest. Theres a lizardlike, gecko gene you have that lets you understand if people are honest, straight or smart. You can figure that out. We want people to see these executives and do that for themselves, and thank them the theme for the conference is disruption. How did you come up with that theme . By reading the papers and understanding what is going on in the country everything is changing political norms through being disruptive and, you know, theres a lot of parts of foundational elements of our democracy, which are being attacked whether its freedom of press or freedom of speech or freedom of religion. A lot of things are under attack thats disruptive. So, thats where the idea comes from when i was thinking about that, i started thinking about, gee, this is like what happened in the 1960s and 1960s, you had vietnam, you had civil rights rk womens rights, marches on washington and you had all these things and this very rough assassinations of president kennedy, his brother, Martin Luther king, incredibly disruptive period, then a few years later, impeachment of president nixon or he resigned before he was impeached. This length of were you pinging that to now . I thought it was companies disrupting and as a result, getting ahead of competitors the point i make is the positive disruption you are describing comes from this incredible disruption in society happening all around us. In fact, i looked at this period in 202017 it is very, very disruptive period not just for politicians we have now, but if you think about 9 11 and you think about the Afghanistan War and iraq, you think about all the things that have happened, financial crisis, almost a depression. Think about those things, oh, my god, this must be awful. Stocks keep going um thats for 17 years during this period go back to the 60s and see the same thing then go back to the 1930s and 40s and its the same thing from disruptions, thats what creates opportunity. That creates ability for growth. Thats the point i want to talk about today. The market has been phenomenal over the last year, since the election or what we have seen taking off you told us in the past, when you look at stocks you see 35,000 to 40,000 for the dow you now think its a lowball estimate it may be low we are talking about it, market is 18,000 or 19,000 and the dow made 23,000. The dow jones, as a shortcut, you compare to the gdp of the country. They were both, you know, economy was 20 trillion and maybe the market was 18 or 19. A little underpriced now the economy is a little over, the market is a little over that. The idea is, the stock market relates to the economy sooner or later, they get to the same plalce, not at the same time, but at the same place whachlt happens is sometimes it gets out of whack and sometimes the economy keeps growing and the market doesnt or sometimes, at the end, its the same. Thats 6 or 7 a year, including inflation. 2 or 3 real, 4 inflation. People say theres no inflation. Thats ridiculous. There is inflation, think of anything you buy and salaries. Six or seven is the economy. Double 11 or 12 years. The stock market doubles every 11 or 12 years so the stock market will be 30,000 that may be low because Interest Rates are so low why do you think growth is going to be faster a couple really important factors, well, three since 1973, thats when opec raised the price of oil from 10 a barrel to 30. Thats the oil embargo, people waited in line that messed up our economy then it got to 147 a barrel 1030 to 147 in 2008 that was a big penalty on our country for growth that was number one. Number two Interest Rates, when i started in business in 1982, Interest Rates were 18 now, they are almost nothing now, you have the banks have all been recapitalized, you have lots of capital. Capital is not a constraint on the economy. You have businesses because of technology becoming capital light. Then you have technology, which is reducing costs for businesses and making a lot of new businesses that didnt exist before and a lot of extra services you didnt have before. Essentially, you have low cost energy, low cost money and Technology Driving everything. Thats on the positive side. The other side is the value of your money everything you keep in your pocket and savings account is falling in value every day the only thing you know for sure, you dont know if the market is going up or down the value of your money is going down what we think of that is taking the value of your money, taking money, sitting in the bank, you know its falling in value and lose zing. Take that money and buy something that is increasing in value. You are protecting yourself. Thats the concept ron baron is our guest host for the next two hours we are at the annual baron conference in the meantime, when we come back we have a lineup from the baron con frenls later this hour, we have veil resort ceo rob katz. Then we are talking with the ceo of Charles Schwab. Walt stay tuned lots to come well be right back. The amazing new iphone 8 is at at t. And we know youll love it. Because we know you want more. More great camera features and more power. And more than just unlimited data, we give you unlimited plans with hbo included for life. Because you deserve more entertainment. And more spokespeople. Talking like this, saying the word more. At t. Its time for more. Am i too close . I feel like im too close. Get the iphone 8 and with all at t unlimited plans, get hbo for life. Only from at t. Swho live within five miles of custyour business . 54, like these two. And that guy. Or maybe you want to reach women, ages 18 to 34, who are interested in fitness. Namaste. Whichever audience youre looking for, well find them were the finders. We work here at comcast spotlight, and we have the best tools for getting your advertising message out there. Anywhere, any way your audience watches. Consider them found. If youd have told me three years ago. That wed be downloading in seconds, what used to take. Minutes. That guests would compliment our wifi. That we could video conference. And do it like that. snaps if youd have told me that i could afford. A gigspeed. A gigspeed network. Its like 20 times faster than what most people have. Id of said. Id of said youre dreaming. Dreaming definitely dreaming. Then again, dreaming is how i got this far. Now more businesses in more places can afford to dream gig. Comcast, building americas largest gigspeed network. Welcome back to squawk box. In washington news, the senate gop revealed the new tax plan as the house ways and Means Committee advanced their version of the bill. Its like, things are moving people cant believe it. They are fainting. The two broadly overlap cutting taxes on businesses and making changes to the individual tax system there are differences. The senate plan doesnt repeal the estate tax, just doubles the amount thats exempt and leaves the mortgage Interest Deduction unchanged at 1 million, not 500,000 President Trump left china and is in vietnam today. Overnight, he sent out a strong message on trade at a meeting of asia pacific countries kayla is here to bring us up to speed on what he said. Kayla . Reporter joe, President Trump was the opening keynote at the apex summit, a gathering of 21 nations that is grappling with his decision to withdrawal from the Transpacific Partnership early in his presidency a group of countries, led by japan and excludeing the u. S. Is set to agree in principle to a deal that represents a third of the gdp of the original deal in his speech, President Trump took the virtue of America First and the bilateral deals. What we will no longer do is enter into large agreements that tie our hands, surrender our sovereignty and make meaningful enforcement practically impossible reporter in his comments, he undercut the World Trade Organization calling it inefficient and called out rule breaking members like vietnam and china and the competition by joint ventures, forced technology transfers, cyber theft and state owned enterprises. Thats coming after a relatively friendly summit where president xi and trump got along famously. They said that summit where there were a slew of ceos in attendance broke new ground for business we have 18 facilities here, 5,000 employees, all of them locals what does it mean in terms of growing up for china and can you grow from inside china out most of us are growing from outside china, in. I think thats what we are going have to figure out the next few years. The one thing that is key is turning up that eels why im here you have to be part of the shift and understand it from their perspective. Reporter if you want to know how that visit is playing in the papers here in china, we poke up this morning in beijing to china daily, sign of u. S. Ties at new historic starting point. Then the South China Morning Post has a little more of a couch view red carpet for trump in beijing, but tough tests still to come. Theres disagreements on north korea. Trade investigations are set to wrap up in a few weeks well see how it plays out between the two countries. All right, kayla. Thank you from across the world. Good to see you every morning. Whats coming up, andrew from across the world to across the block well get back to becky quick at the ron baron con frenls the conference here in new york. First, Business Leaders make it to a con frenls. We are going to bring highlights from the ceo east of at t, uber and a lot more as we head to a break. Look at yesterdays s p 500 winners and losers it was wonderful. Bravo i love that it was great. Pretty good wasnt bad. Parts werent good. It could have been better it was terrible. It was bad. Awful boo what we do every night is like something out of a strange dream. Except that the next morning it all makes sense. To power global ecommerce Fedex Networks are massive, farreaching and, yes. A little magical. Fedex. Com slash dream welcome back you are watching squawk box, live from the Nasdaq Market site in times square. Futures at this hour are a little lower the dow down 36 points, almost 37 down six and change on the s p nasdaq down about 16 points. News out from the New York Times, a deal book conference i was hosting, has been dal stephenson refuting reports he offered to sell cnn for the merger with time warner. One of the key benefits of putting these two companies together is to standup a new advertising capability we have built an amazeing distribution platform. 150 million mobile subscribers, the largest tv base in the United States, a huge broad band base theres a lot of information in data we think can be used to standup in advertise zing business pairing that with the turner advertising inventory is a powerful thing, we believe that is what we aspire to do selling cnn makes no sense in that context Government Official told cnbc the d. O. J. Presented with several options to settle antitrust returns, but never demanded a cnn sale. We talked a little bit i kept saying, is it possible theres a misunderstanding here . He talked about the idea, there is a bit of asking i think its hard to try to understand how one side feels one way and one side feels the other. I have to say, randall is a straight shooter we know him very well. We have had him on the program so many years. We was very adamant that what we have heard from these sources is not right. So its possible that the leakers dont know what they are talking about or are low level and that doesnt mean that the people they leak to isnt going to run like its fact. Thats a problem nowadays. Take that problem and cube it and it becomes fake news thats where the term comes from no one in this is low level as far as the Justice Department or at t lets not say where how can they someone got something wrong, somewhere or someone is not being totally truthful somewhere thats the part we are trying to figure out. I dont think its truthful this is, you start a deal book this is true. They are lucky. They got in early with you i think the negotiations, you should have insisted on being the end. You were young, though im happy its the New York Times. Ubers ceo spoke about his turn around plan for the company. Hes never spoke publicly before ubers Business Model is working in certain parts of the world and could be profitable after ease easing back. He addressed their difficulties. We have a product and brand that this Founding Team, travis and the Founding Team built is extraordinary. The talent of the company is extraordinary. The culture went wrong the governance of the company went wrong and the board went in a very bad direction but, if their product is good, then if you can bring good leadership and ultimately bring it together. I think we are on our way. Speaking about a soft Bank Investment, it hasnt happened, yet, but says it will. Meantime, we are going to get back to becky over at the baron Investment Conference. Becky . Reporter andrew, thank you very much. Talking about interesting companies. We have been listening in on that we are here at the baron Investment Conference with ron baron, the cio atbaron funds we are here where he is getting ready to take the stage. One of the things we talked about with you is about how you have come up with a winning formula. Your fund made how much money over the time of its exist tense . Funds made 23. 5 billion since 1992 of that 23. 5 billion in profits, 10 billion comes from 15 stocks, correct isnt that amazing . Being a longterm investor is how we have made the profits we have been investor since 1997 we have been an investor in hyatt since the 70s and since its been public again, six or seven years. Investor in Charles Schwab the stocks hit 45 or 44. Our cost is 88 cents a share in veil, our cost was 22 or 23, its now 220 those are two stocks you have made a billion dollars in each one. Hyatt our cost is 25 and its now 70 i want to talk about tesla. This is a stock you have been a longterm investor in and you have high hopes when you look to the future you have made money in tesla about how much money have you made to this point about 150 million so far we have been an investor for about three years. Its a 500 million investment, presently. I think we have a chance to make 20 times the money over the next 15 years, 1015 years. People dont have that much to invest we look at tesla and elon musk who does things people dont think are posz zable he does this by making such huge bets and taking on such huge challenges along the way, its gotten him into trouble there are questions about the production and whether it will be able to produce as many cars as they need what do you think . Thats the most insane thing i have ever heard but you are right, that is what people are talking ant, whether he can make cars you know, his history, we invest in people. His history is, he built a business when he was a young man, sold it for 10 million or 15 million, built papal, sold it for 150 million. His share. He could retire. He took everything and put it at risk to develop electric cars. I spoke to him or sent an email to him a weekend ago and we were talking about he was saying how much he appreciated our support in difficult times when hes gearing up to make the cars. I said i think you are going to be very, very successful whether you are or whether you are not, the whole earth should thank you for moving forward with electric cars, which never would have happened not for him. All the interests are aligned against the Automobile Companies, the oems, hundreds of billions invested in plants that make engines there arent going to be engines in ten or 12 years no more. The oil industry doesnt want this to happen the dealers, they make their money on servicing theres not going to be service. Unions dont want it to happen because it takes fewer people to make the cars that are electric. What he does, it reminded me of Robert Kennedy the talk is about disruption in his times and he said that he sees things the way they are and other people would say why he says he thinks about things that never were and wants to know why not this is a guy who thinks about things, why not. When you think of rocket ships going to space, ill get to tesla in a second, rocket ships going to space, then see them dropping away. They cost hundreds of millions of dollars every time you do a launch the fuel cost, 250500,000 dollars. Why throw away that investment doubters aside, you are a believer then we are talking about him, what hes doing to tesla. Whats interesting is theres as much value being createed from the making of a car as the car itself the idea is that the cars are historically made with a lot of labor, then went to robots he looks around and says, gee, this is how fast a human walks and how fast the robot walks why cant we have the robot . We have to have more robots. Then says why have the robots go this speed why not have them go five times as fast . We are trying to make it more productive all the other Automobile Companies have to do this sooner or later, but hes doing it now. They cant catch him it may take a while to get to where he wants to be he described himself as being in the circle of hell with the latest production issues hes sleeping in the floor at the plant. Its not easy to do what he is doing the valkyrieuatvalue he creatu open a restaurant and serve hamburgers, everyone can do that everyone cant do what he is doing. When you stee strobe lights, things move so fast. The strobe lights in some of these things my idea is, when you are out there and doing something thats never been done before, doing robots and a guy is supplies robots to you and they are supposed to be meeting a deadline this is what you are supposed to be doing this is the software you need and it doesnt work exactly right. Okay, it will be a week later, then a month later you have to fire him and do it yourself they do huge amounts of work they have the best engineers reminds me of a story we heard with jeff bay bezos. Does musk have the same patience from investors if you have a 50 million market capitalization, people are being patient with you reminded me of when i came to wall street or began to be interested in stocks in the 1960s, then Federal Express comes along and people tell you, sell it. How can it have this value we invested with steve, we made 1 billion with steve wynn with elon, it will be 4 billion or 5 billion. With wynn we tripped in 2007 and we were a founding investor in wynn resorts we made a billion in 20012002 he comes, calls me up and says, ron, i just had a meeting with investors. Im profoundly depressed he says one of your best friends comes to my meeting and says, steve, you have made me so much money, but i cant invest with you until three or four years from now because i havent, you are not going to have im going invest when it opens he says mario, i cant invest with you he says theres not going to be five years from now if i dont get the money now. The same thing with elon people studied his business. People that talk negatively about him, they have never met him or talked to his engineers you have to understand then you make a judgment about what risk you learn to accept. When you think about sending a rocket into space, having orbit and not falling away and coming back to land you okay you want to share my water i have some right here. How can you think this incredible fete, where you come back to earth and land in a spot and you are within ten or 12 feet the next one is going to land right on the spot. He will be upset if it doesnt land on the spot you cant make a car when you can land a rocket from space on a little quadrant . How is that possible you have been an incredible judge of character not in picking the winners, but which ones to avoid. Later, well talk to ron about an investment he passed on thats investing with Harvey Weinstein. Right now, back to you yeah, that is the intersection of everything thats going on and that will be interesting to hear. Talking about character issues and the like we look forward to that. Coming up, new york mayor, bill deblasio. He will be with us fresh off his reelection win. He wants to weigh in on the gop tax reform plan. He absolutely loves it no probably no apparently he does not well get his comments on that then well get the senates version with senator pat toomey. Then remembering our vets. A former cia director and David Petraeus is here and well talk to him about containing north korea, the saudi purge and other things you are watching squawk box on cnbc whoo woman class, lets turn to page 136, recessive traits skip generations. molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. i am the proud father of aeness very strong little girl named adelaide thank you. Who was diagnosed with infantile spasms an incurable and debilitating form of epilepsy. Its been a devastating journey that has robbed my baby girl of normal development. Thats why i have launched the my shot at epilepsy campaign and im asking you to join me. Take your shot at the hamilton pose, donate to help us find a cure, and lastly, share it on social media. This is our shot to take. Learn more at myshotatepilepsy. Org stocks to watch today, shares are trading higher. The companys Third Quarter rurts. Hanley topping estimates thanks to surging revenue from the core gaming market. That stock indicated up 4 or so is kramers dog named in the video . Krarm talks about nvidia a lot its got pictures of his dog i love dogs. Who doesnt . You dont because you are allergic, our producer nordstrom lower sales. They say hurricanes hurt traffic in puerto rico, florida and texas. News corp. Beating the street on the top and bottom lines the company says results were driven by a tight control on expenses and revenue across all of its businesses. Coming up, we are going hit the slopes with the coo, of Vail Rob Katz and ron baron, coming up after the break some moments can change everything. You cant always predict them, but you can game plan for them. For 150 years, generations of families have chosen pacific life for retirement and Life Insurance solutions to help them reach their goals. Being ready for wherever life leads. Thats the power of pacific. Ask a Financial Advisor about pacific life. Welcome back, everybody. We are live at the barron Investment Conference at Lincoln Center today the countrys largest ski resort operator has seen its shares climb 50 over the last year the company has focused on strategic Growth Opportunities and also integrating technology into the Consumer Experience on the slopes joining us right now to talk about all of this is rob cats. The chairman and ceo you mechaniced earlier youve made a billion dollars in this stock, and this stock was the biggest positive contributor to the funds performance in the current quarter. Why were you first attracted to vail we first started investing in vail because of the unique asset that we had that vail had when we started to invest, all the things that i thought were a good idea, the executive who was running the business then, didnt agree with, and wasnt doing. I used to say that we invest in people, not just buildings, but in his case we invested in the building just teasing he is a good guy i didnt like how he managed the business for the first ten years that we invested in it, we had faith that sooner or later they were going to change the management and follow policies that felt more rationale at the time they were charging 44 a day to ski at the mountain we thought if you made the experience better, instead of 44, you could charge 1 00. What happened is that then rob comes along, and he takes over 19 in 2006, and at that point for nine years we had made 70 or 80 nothing special. Then 1996 when rob came over, they did all the things that we thought were should have been done where investing in a mountain, new ski lifts, investing in the town, new restaurants, new facilities. Then made ski passes a really huge part of the business, and then built a network of other mountains that enabled him to sell ski passes in other places instead of just where we are right now and that ski pass business represents a very large percentage of the companys cash flow right and so its been brilliant. This is the network effect, and then we keep buying these other mountains at attractive prices that are fitting for us to own, and he has built it. Hey, rob. He made it. Part of what you have done with building this network, though oh, and, by the way, the stock since we started until now, the stock was 25, and now its 225, and thats because of him. Rob, kudos. Watching whats played out this way. We now have some competitors who are trying to copy what you have done ksl and aspen are some of the resort competitors theyve seen what you have done with this pass going across. Theyre trying to do the same thick. What does that mean for you . I think its good i think, first of all, new competition is i think a positive for any industry. New ideas. I think my hope for them is that they really put together a pass thats compelling for skiers and riders you know, something where you really get unrestricted, unlimited skiing like weve had at all of our resorts at this incredibly low price the benefit of this pass is that our guests see it as this incredible value a steal almost our company sees it as an incredible value because were selling all these passes before the season begins. We take all the risk of weather, of economic fluctuations right out of our season before we even start. To the extent you have the company and your consumer loving the product, its amazing. I think with these competitors, if they offer something thats truly innovative, truly compelling, that will be a positive for the overall industry because it will remind people that they have to buy their season pass before the season begins. Our data marketing and everything that weve put together, we know well be able to compete just fine very quickly, when you look at your next opportunities, are you going to continue expanding internationally, or do you see areas here in north america . I think there are daeshl areas in north america we see japan as a terrific opportunity and europe, which is the largest ski market in the world. Five times bigger than the u. S want to thank you for your time today we really appreciate you joining us thank you great to be here great to be here with ron. You thought you were going to get away with this ron looks at people so closely and judges his manager so closely that he notices that rob had an earring hole. Rob said nobody has ever noticed that before. Noticed that i appreciate that, and i appreciate you mentioning that on air you thought you were going to get away thanks, rob we appreciate it we do have much more from rob bar ron, and he will talk about why he passed on investing in the Weinstein Company eight ar nine years ago very interesting story well talk to the ceo of Charles Schwab about Investment Trends and market strategy. Also, the ceo of hyatt hotels nfen joan us here at the barron coerce stick around squawk box will be right back. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley and in this swe see. Veryday act, when we give, we receive. I am the proud father of aeness very strong little girl named adelaide who was diagnosed with infantile spasms an incurable and debilitating form of epilepsy. Its been a devastating journey that has robbed my baby girl of normal development. Thats why i have launched the my shot at epilepsy campaign and im asking you to join me. Take your shot at the hamilton pose, donate to help us find a cure, and lastly, share it on social media. This is our shot to take. Learn more at myshotatepilepsy. Org squawk box special event. Were special e spending the morning with investor ron bar ron. His best ideas straight ahead. And bill de blasio will join us in studio find out why he is worried about the plan coming out of washington plus, checking in to hotel squawk the ceo of hyatt joins us with a unique take on the Global Economy as the second hour of squawk box begins right now. Live from the beating heart of business, new york city this is squawk box. Good morning. Welcome back to squawk box here on cnbc were live at the Nasdaq Market site in times square im Andrew Ross Sorkin along with joe kernan. Becky is at the barron Investment Conference taking place just a couple of blocks from here at the Metropolitan Opera House. Shes joined by ron barron were going to hear from them in just a moment. Hi, becky. Its nice to see you hi, andrew. Were going to check on the markets and come back to you show you whats going on right now we are in the red. It looks like the dow would open off 40 points. Nasdaq off about 16 points s p 500 off about seven points heres whats making headlines at this hour we have this run of retail reports. It continues this morning. Were expecting the latest numbers from jc penney thats at the bottom of the hour Company Expects to post a quarterly loss of 43 cents a share with a Third Quarter on revenue of almost 2. 8 billion Comparable Store sales expected to increase by half a percent. Also, automaker joseph we always go back and forth about this automaker i think that i think the public theres confusion in the public i just want to make it clear. Hyundai may be shifting more. You usually put about six sill bells in there. Hyundai they say the company considering moving production of its tucson and kona suvs to its alabama plant. It could be moving it to tucson. Just slielgs lower than the october reading and still near the highest in a decade. Wildly it swung after the bell yesterday julia borstein joins us now with the reason julia. Well, joe, disney shares dipped after missing expectations on both the top and bottom line. Largely thanks to lower than expected results at the Median Networks division which includes espn the stocks didnt turn positive during disneys announcing of the disney app launching in 2019 will be priced substantially below netflix as disney looks for a broad Subscriber Base. Our goal here is to be viable in the direct to consumer space. We also believe that our brands and our franchises really matter, as weve seen through netflix and all other platforms. Our Strategic Acquisitions have been a key driver of historic performance weve achieved over the last decade. We believe its another gamechanging acquisition, and were confident in our ability to generate maximum value from it iger deflected various questions about whether disney needs more scale he says the company is strong asis. Also, he said you could never have too many valuable movie franchises back to you. Thank you, julia. Now we want to get back to becky, who is at the barron Investment Conference at the Metropolitan Opera House becky. Andrew, thank you very much as you mentioned, were here at the annual conference for barron funds shareholder, with ron barron, the ceo, the cio, and the Portfolio Manager for barron funds. One of the things we talked about at the top of the show, for people that may be joining us, about an hour ago we were talking about where do you see stock prices headed. Youve thoed told us in the past we could see dow 35,000 or 40,000 by 2030 you are say that could be a low ball target. We were thinking the economy growth is going to accelerate, and that means the stock Market Growth accelerates, and that means Interest Rates and other valuations should be higher. I think the most important thing for most people to think about is about being an investor for the longterm. You dont have a lot of money to become wealthy its worth 890,000 5,000 a year. Basically people dont, you know they get worried about what the president is going to do or whats going to happen with the price of oil or whats going to happen with Interest Rates or whats going to happen with taxes, so its always about the shortterm thing, and everyone what makes you know more than anyone else and the answer is maybe you do, but even if you did, you wouldnt know whether the stock market already reflected that or whether it didnt the key is to just not think about that thing, not be deterred by what you see happening in the world in your opinion of what that means for investing, and just know that the value of your money is going to fall in half every 17 years, and the stock market could double every 10, 11, or 12 years, and keep investing straight ahead the reason you do better in the margaret, of course, is that if the market is based on companies drawing 6 or 7 all we do is run 15 a year basically thats the reason youve done better you make it sound very easy the idea of just finding companies that are going to grow 15 a year, and we talked this morning about how a lot of it for you is investing in people finding people that you think are going to be these fantastic managers i would argue that the other side of that is really knowing who not to invest with you need to be able to be a judge of character and know more importantly than ever when you should not be putting your money down you have a great story that you mentioned in your letter that you just recently wrote about how you were given an opportunity to invest in Harvey Weinstein eight or nine years ago. What happened . An investment banker brought them to visit us harvey and his brother, robert, bob. We spent a day and a half speaking with them there were some issues were top of mind when they came originally talking about accounting and expenses and allocation of personal expenses, business expenses. They were harvey was this fantastic producer and it would make great movies and Great Television shows we were interested in invest not guilty a small amount even though it was a Smaller Company because we thought they would become successful. Then i said, well, i have to do some work and then well get back to you. In the next couple of days we talked to people we knew in the Entertainment Industry eight or nine years ago eight or nine years ago. We talked to, i dont know, ten people, five people, 15 people uniformly we had the same story of the events that are being written about today. We knew that eight or nine years ago, and all the people we spoke to knew that as well its amazing to me that this is eight or nine years later and you are seeing it for the first time in the papers how did this happen . How was this allowed to happen incredible you just develop it further, and you happen you happen you just think about people, and you think about who is smart, who is nice, who is kind, who you think works hard, who you trust, be and you develop patterns you know, its like playing poker. With other people how they bet you know behavior. Behavior is evident in who you are talking to people and it becomes, you know, visible, and then when people confirm or, you know, make you think that youre wrong, you did not know it was right, but you are right most of the time you mentioned that you have been doing this for a very long time, making judgments on people, going all the way back to when somebody stole your cartoon your comic book collection when i went to college. When i went to cleanly, when i was a kid, i managed my comic book collection, and then i had this comic up in my attic, and i go to college, and i come home, and theyre gone i say what happened . Any mother said, oh, well, i gave them to alan next door. I said you gave away my comics and my baseball cards . Youre kidding then this person became a very successful writer for a television show. A very well known youre not going to mention names . No. Very Popular Television show i was trying to think about how i could can i give a hint without saying the actual like shlameezel shlamazel thats the guy. He calls me up five, six, seven years ago and he says i has become successful and he read a lot about me and he wanted to know if i could help him out i said, alan, in 1961 you stole my comic books when you give them back, you can call me again. I dont want to talk to you now. Hung up the phone you wasted my time. How could you do that . I cant remember who hung up on who, but we were not it wasnt a pleasant conversation we have much more that were going to continue to talk with ron about. Including how he judges people and some of those managers that he thinks have been worth investing in, once he gets that feeling that judge of character issue coming up. Andrew, right now ill send it back to you. Thank you thats a great conversation that you are having, and the ceo of Charles Schwab, we should tell you, is coming up. First take on the state of the individual investor. 7 30 eastern time new york mayor bill de blasio will join us on set. He is worried about the impact of the gops tax plan on the big apple. Plus, later hotel squawk going to check in with the ceo of hyatt 7 40. Stayun ted youre watching squawk box here on cnbc what we do every night is like something out of a strange dream. Except that the next morning it all makes sense. To power global ecommerce Fedex Networks are massive, farreaching and, yes. A little magical. Fedex. Com slash dream for years, at t has been promising fast internet to Small Businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than at t. We do business where you do business. Welcome back, everybody. We are at the barron Investment Conference, and theres one investment that ron barron admits has paid off for him in a very big way thats Charles Schwab. Its a stock that made him 1 billion. What was your cost average going into it . 81 cents you paid . 81 cents a share if you take a look at the stock since he has been an investor in 1992, youll get an idea of how successful thats been this is one area that you know all too well where do you think things stand right now just in terms of trying to Bring Technology into trading and getting people to think that your platform is the way to do it sure. I think in our industry whats occurring is very consistent with whats happening in the economy overall, and that is a breakdown of longterm traditional views of tradeoffs that you can have world beating price, world class service, and high quality advice all in one thats not something that in the investment world people have traditionally believed is possible thats whats happening today. Of course, were riding that wave whats different . How are you ableto do that people have always thought, okay, the way to get the stock trading prices how much it cost me for every trade way down is to stream lien it. No people involved make this a simple transaction scale is playing an enormous role today at schwab we have our clients that have entrusted us with over 3 trillion. When you combine great scale, technology, and people, thats where you can get to that no tradeoffs world when we started to invest in schwab in 1992, its 60 billion of assets at schwab. Its now 3. 2 trillion 60 billion 60 billion to a good month or two now. Now were getting 200 billion a year i think a big deal is when you have this 200 billion of close a year, why . Well, i think theres several things you have ferocious competitors. We do we have wonderful competitors, and were happy we have wonderful competitors because what competitors do is they not only serve investors well, but they motivate us they drive us forward. I think in terms of our growth, chuck was on to something 40 odd years ago, and that is transparency and using the knowledge that you have in your industry to do the right thing for clients. I know that sounds trite and maybe overly simple listic through clients eyes where. Thats been our strategy for four decades, and i expect it will be for four more. One of the things that weve been watching very closely is the tax bill has made its wau out of the house weighs and Means Committee. The senate has its own version of the bill. What you do i think of him being in there were not done with this tax bill yet we dont know what the final versions will look like. You have to look at the fact that the rothification isnt the end of the world if we were to get a reduction in the 18,000 limit, there are still benefits to save you can say that the vast majority with of 401k participants arent in a position to put away 18,000 as long as they figure out some level that takes into consideration that the average citizen, the average investor should be able to maximize in a contribution whenever they can, i think its possible to lower the 18,000 limit without creating a major problem in Retirement Savings in our country. Can we go back for a second to back in 1992 . At that time the reason we have a business its because of Charles Schwab, and we had a business at that time in 1992. We had 100 million under management 5 million was in mutual funds we could not make our business grow Charles Schwab revolutionized the way mutual funds were sold in the marketplace you could buy our mutual fund through Charles Schwab, and you pay Charles Schwab for the privilege of being on their platform did you do that before you were an investor yes in fact, the reason i became an investor is that people auto would have to send money down to north carolina, they would have have to open up the envelope, have to cash the check in order to get your money back, you would have to call them back and get a signature guarantee. 50 million fund it was impossible. We get into the marketplace, and all of a sudden we get 5,000 a day, 10,000, 50,000, 100,000. Oh, my gosh, we better look at this company thats the reason we invested. We started working on the compan company. You have been an investor since 18992. Its 25 years. Your average holding time is usually 14 to 15 years why such a Long Investment here . Because the opportunity is still tremendous theres 200 billion a year of new money into this firm, and theyre unique i think in this instance were going to double our money again in the next five or six or seven years after weve held it for all these years. I dont see anyone thats a threatening competitor despite the fact that the people against whom theyre competing are these really tough, rough fidelities of the world and ubss and Merrill Lynchs. Somehow the offering that they have is this compelling offer where theyre showing people you can trust us its a rep taegs its just not, okay, come bring here with this platform. Everything they do is from the clients eyes about the people with whom theyre dealing. Thats what Charles Schwab is. I want to thank you for joining us today we really appreciate your time thanks much appreciate the invitation. Joe, well send it back to you. 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Still warning that it would have to lift spendings it sbrz a period of weaker demand also, toshiba reportedly considering a 5. 3 billion capital injection. That company said to be weighing the idea of offering new shares in a Third Party Allotment equifax posting Quarterly Results since the data breach. Revenue fell short results were hurt by costs reeld to that breach whole foods and its new Parent Company amazon are teaming up to offer in store black friday discounts on amazon devices, such as the ek quo and fire tv. Amazon will add popup stores staffed with its own employees at select whole food locations in five states thats kind of cool. Interesting. They already have the brick and mortar thing going with whole foods, and someone is thinking about all these things apple just released this. A patch to fix the auto correct bug that popped up in its ios 11 the glitch changed the letter i to an a and a question mark in some users texts. This was happening, by the way, to my wife we were trying to figure out how to fix it. The new update fixes an issue why siri stopped working thats crazy selfcorrect loildelao in the big apple za we will talk taxes when ek and the wolf huffed and puffed. Like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. 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Among the stories front and center, u. S. Stock funds that are centered on technology saw a record clars is. 3 billion of in flows in the week ending this past wednesday thats according to new figures from bank of america, Merrill Lynch. Investors all soured on junk bonds withdrawing about 600 million from high yield bond funds. Meanwhile, shares of cable operator altice are higher in chief market trading the chief executive dexter goya has been given the additional title of ceo of altices french based parent meanwhile, former ceo michael kohn resigned after disappointing earnings resulted in a sharp drop in the parents or, yeah, stock prices you can see there wow. All the way down to ten. He had been in the ceo job for only a little over a year. The National Federation of independent businesses issued a statement of support for the Senate Version of the tax reform bill it follows a similar statement about the latest version of the house bill its a turnaround on the original house bill, which the Small Business group said it could not support in its then current form okay. As that tax reform battle continues on capitol hill, new york citys mayor calling the republicans plan the biggest current threat to new york city. Joining us right now is new york city mayor bill de blasio right here on set. Were thrilled to have you where, you wrote an op ed where you said that you might as well ask new yorkers to take 1 ,000 out of an atm and give it to a Hedge Fund Manager if thats what this tax plan entails look, its going to transfer a tremendous amount of wealth to folks who are doing very well and to corporations when, in fact, what we need is a government thats investing in this country, investing in our cities, investing in our economy. When you look at this, its almost as if the plan was created to take away the potential to fix a lot of the challenges we have how are you going to see an infrastructure plan, for example, after this . If you balloon the federal deficit, youre never going to see a Real Infrastructure plan if you take away a 1. 5 trillion in federal revenue, longterm, how are you going to see an infrastructure plan . How are you going to see investments in affordable housing, for example, which is needed in this city and cities all over the country i dont go et it i think in the end the notion that theres any semblance of a positive impact here for the places where where the economy is actually growing like new york city where are the jobs are being created, where the revenue for the federal government is being created, its actually going to set us back let me ask you this, though do you believe ultimately that we need higher growth rates in this country and that could come from tax cuts. No. We had the highest number of jobs weve had in our history, but our infrastructure is falling apart, and a lot of cities across the country you can say the same on. We cannot possibly fix that on our own. We need a strong federal government wrshs. How about if we use the repatriated stuff . Thats a real possibility what im troubled by is if you approximate do a massive transfer of wealth to rich folks and to corporations and you balloon the deficit and then theres no potential for the federal government to be an active partner in infrastructure, where is it coming from . I just dont buy trickle down economics. I would like to see a structural focused federal role this takes that off the table longterm. Thats part of whats not being talked about enough here lets just say, just for arguments sake, that if corporations somehow became more competitive globally from a lower tax rate rrks therefore, you know, maybe they start doing more business here lets say they start expanding more, theyre able to invest more capital, theyre able to hire more people and eventually you see some wage gains come from that. Isnt there any way that you can connect the dots to where that could grow the pie and then i mean, once you have growth, all of this stuff you want to do becomes much easier. All the education or infrastructure, you get 3 or 4 , and suddenly youre able to do some of these things. Theres no way that happens. You think all these guys are either misguided or just trying to help their friends . I think theyre trying to help their friends i think, two, some have an ideology thats rigid, and that is a supply side ideology. Of course, i want growth democrats, republicans, we should all want growth heres the challenge the thing thats not being fixed. Were not fixing our infrastructure were not fixing our educational system in a coherent manner. Were not making it easier for kids to go to college. I mean, the problem here is this is the table setter for everything that happens after. Speak to this weve been having a big debate on this set about state and local deductions and what should happen obviously, im a new yorker. He lives in new jersey we pay a lot sure. We will lose that deduction right but there is an argument to be said that you want to level the Playing Field among all states that is the argument that you hear from the gop. What does the mayor say about that listen to the trap here state and local deductibility has been in place since 1913 it is something agreed upon by democrats and republicans without. Once it is gone, you will never see it again you start with double taxation for a lot of people not just new york, new jersey, but its 100 million americans that will be subject to double taxation immediately. That puts downward pressure on state and local revenue of where were going to be having people saying you have to lower taxes therefore, we cant provide much police, fire, schools, et cetera the seconds problem is the federal government then at any point can start raising the federal tax rate again theres no prohibition you lose the protection for homeowners for everyday people, for middle class people this is why in the end a lot of middle class people will see a tax increase practically speaking from this plan. I love. You are on the record now you dont like double taxation news flash. We have to get rid of the estate tax look, again, let me talk about dwight eisenhower. The golden age its your now when you die, you get taxed again thats not fair. Thats like listen, what will be good for the country. The golden able of this country, one could argue. Now you do like double taxation when republican divide eisenhower is president , we had a strong federal government helping to spark the economy, investing in education, research it worked. We saw it with our own eyes. This makes it impossible to regain that ground i bet half the middle class pays a tax increase here. What would we do with education, though . I want we want to fix it. We want to fix it. Right got to invest what about choice what about the relationship between unions and really not being able to spending throwing so much money at it more than any other country. We dont get what we pay for lets recognize were not investing at the level we should in education and, again, lets you see any problem with teachers unions . I have a lot of respect for the union movement, but i also want to see the best efforts for our kids i think the city is a good example. We push back and forth with the union to get to the right outcomes weve had Graduation Rates go up steadily were at the highest Graduation Rate ever. By the way, Mike Bloomberg and i didnt agree on a lot of things, but he got mayoral control of education in our schools it was a great move on his part. Since he got that, 13 years, our Graduation Rate has gone up 50 . 50. With education unions that i think are willing to work with us, but because weve also heavily ininvested i created prek for every child in new york city you dont get that for free. Of course, its constantly improve the educational practice train our teachers better. Push them to do the best they can do look, if you are not investing in Early Childhood education, if youre not were doing a. P. Classes, advanced placement classes in every high school in new york city, thats telling kids theyre collegebound that takes money, but its money well spent i have a totally separate question yeah. Now that you have won a second term, does it change the dynamic for you . Look, when you have that second mandate, it allows you to get a lot more done. I just mentioned that we have prek for every child in new york city. Thats something we created in my first term. I want to do the same thing for 3yearolds now. I think it will revolutionize our approach and it will take a financial burden off working parents too, and i think this is the kind of thing the country needs to look at how do we give our kids a strong start and lighten the burden on parents, middle class parents, working class parents who are struggling to make ends meet its wonderful to be able to do these things big scale, fast in a place like this, and the mandate allows that to happen. And given that mayor bloomberg set the pace, you want to go for a third term oh, no. No . Oh, no. Again, i had differences with michael bloomberg, and things i really appreciated, and i think it was a mistake to go for the third term two term limit the people chose it, and the people are right go out and give it eight years leave it all on the Playing Field. Thats the way i look at it. Being the mayor of new york, obviously, it helps if we have a vibrant wall street, a vibrant Financial Sector im just back to wondering whether theres any way that we can get corporations not to want to open offices abroad or move headquarters over there or move operations over there and leave the money over there because its taxable is there anything you would do for corporations to level the Playing Field that you wouldnt just call or just hoping big corporations where you could see that helping the private sector would end up helping the people that you want to help and narrowing incomes . Sure. What should we do then. I dont pretend to have i amagic formula its not my area of expertise. Do i think theres a version of figuring out Corporate Tax reform. Is there a way to get the money back that would be fair and keep it here i do think you see this across the spectrum. People think there are pathways that could be fair i think thats a different discussion than the one before us how on earth are we going back to supply side after it has been proven wrong thats then i would say that what we try for the past eight years and that is trying through maybe redistribution or trying to make looking at your notes, you said i like the tax reform to include helping the income inequality, and i assume you mean by that giving tax breaks to people in the lower how do you do that when they dont pay tacks . Its hard to do it lets talk entitlements, isnt it . Middle class and working class people backbone of the country. Middle class and working class people if this tax plan were about them, it would look entirely different. If we said lets just focus on the vast majority of people and theyre struggling right now. We know that what would you do for them . If you want to give them a tax break without what if the lower 47 dont pay taxes federal income tax in the first place wouldnt they rather have a job and then pay some taxes . Everyone wants a job. The question is what spurs a healthy economy, right lets go right back. Im arguing we have not invested in it this country you could say the last eight years, though youre infrastructure 3 trillion over there 3 trillion. Think what you could do. If you do not have a Public Sector run when i mean run, meaning Public Sector funded infrastructure plan, it wont get done it wont get done and history suggests when that has happened, it has spurred the entire economy im not talking about the stimulus under obama, which i think was only a glimmer of what it could have been and should have been. We have real live examples in peace time and in war time of what a proper stimulus does. Look at our competitor nations what is china, germany, everyone theyre investing in infrastructure, education, research, and what are we not doing . Theres somewhere we could agree on this in talking about it great minds think alike mr. Mayor, thank you for coming in. Thank you congratulation on your reelection. People said you wouldnt show, but here you are right on time right on time i think its the squawk box effect its the new term, i think. Feeling good. You dont want to be here every day at 6 00. I was thinking it could be a side gig like his. Oh. Were coming back. Coming up, ceo of hyatt hotels its a Global Company with more than 600 properties. A unique take on the world economy. First, as we head to break, check out the shares of jc penney the retailer posting better than expected results, including a gain in samestore sales of 1. 7 3 stock nah. Not gonna happen. Thats it. 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At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. Joipgs live right now is mark, the ceo of hyatt hotels. Barron funds, by the way, has been invested in hyatt since 2009, and, mark, thanks for being here today thanks for having me. You know, i want to talk to you about whats happening with the stock and what your plans are for the company. Earlier this month the stock hit a new alltime high after you announced that you would be divesting 1. 5 million in real estate why that move . Whats going on . Well, back drop is that our core business is actually doing very well, so our results are quite strong in particular, our feebased business, management feebased business has been growing at a significant pace it gives us a lot of flexibility to be able to manage our capital base differently, and weve been actively recycling our assets, but we rlsz that we can actually sell some of our hotels, it realize great value for our shareholders, and also accelerate the move towards higher portion of our earnings coming from our feebased business what do you do with the 1. 5 billion that you raise where does that money go were looking at new investments, of course were always looking to reinvest in the business. Weve made a lot of investments. In hotel businesses, management companies, but also with the advent of real focus on experiences for consumers, weve been extending our grand beyond the Traditional Hotel business we entered the wellness space this year, which means we bought a highend Destination Resort company and another brand called exhale, which is a fitness and spa business as an alternative adjacent platform to really enhance the offerings we got for the highend travellers with th serve. Ron and i were talking about that earlier when you look at the other hotel companies, some of your biggest competitors, marriott that is 1. 1 million rooms, hilton has 800,000. You have 180,000 how do you compete against some of the Bigger Companies . What do you do that relative scale is not new. Weve been at this for a long time in that same position what is new is a real focus on thinking about what we can do to deepen our relationships with highend customers wellness is the first really significant area that we are getting into it is in high dough manned Wellness Travel is growing at double digit rates, and it is the number one thing that our Customer Base is looking for really differentiating the experience on property is our strategy one of the themes for the barron conference is disruption. Thats the overall theme that ron is going to be talking about today. When you look at the hotel business, there is certainly disruptions coming in from places like abnb you have a new investment that you have made in oasis how does that compete . Well, air bnb has done great things for the industry, which is opening up and expanding travel initially their focus was really very much focused on the Human Experience at the touch point of staying somewhere, and weve actually piggybacked on that in some ways and gone back and disrupted our own company, if you will, by looking at ways in which we can bring humanity back into hospitality, try to get rid of some of the Standard Operating Procedures and things weve operated with in the past and really encouraged our colleagues to really bring their who wholese wholeselves to what they do. We can also look at alternative combinations, and weve made an investment in a Small Company in london a few years ago to sort of wade into it and understand the business, and most recently in oasis it is definitely an area that were going to continue to focus on you give so much authority to people who run authorities thats out of the norm how do you control Services Like that to make sure that its operating properly the answer to that is we a decentralized operating mandate, which is we really push a lot of responsibility and accountability down to the hotel. Every one of our general managers is really running their own business and really focused on what they need to do to deliver a Great Service to our customers, and also care, which is really beyond service these people are all in some way networked with each other and sharing best practices and showing what works and what doesnt work exactly we do have i would describe it as a framework, but lots of flexibility within the framework. Yes, theres also friendly competition internally if someone is doing something that is really working well, others will Pay Attention to it and study it and adapt theyre aware of it through these supports exactly International Opportunity yeah, growth is significant we have a very large pipeline of hotels, and about over twothirds of it is outside the u. S. In china by far its the single biggest market about onethird of our total pipeline is in china what are the reasons they like to do business so much is because of and the opportunity we have here is that we have this brilliant architecture its true we have quite a few hotels that were designed by architecture award winners, including the park hyatt here in new york. In china we have a bunch of Iconic Hotels that really have garner aid lot of cache. I want to thank you for joining us today we appreciate your time. Appreciate it well send it back to you in the studio thank you for that. So terrific. Still to come, we have much more from ron barron, including his best investment ideas. Then at the top of the next hour senator pat toomey will join us in studio to talk taxes. Then at 8 30 eastern time david p petraeus will join us to mark the nations veterans day. Welcome back to squawk box, everybody. We are reporting live from the 26th annual barron Investment Conference in new york this morning. Our special guest for the morning has been ron barron. He is the ceo, the cio, and the Portfolio Manager for barron funds. Ron, i know you have to leave us in just a moment because your guests are here. Youre about to go up and take the stage and kick things off. Before you go, what message would you like to leave for people who are watching from home so when i was walking in, theres monitors downstairs a level below, and they were playing a lot of montage of president kennedy. This happens to be the 100th year that he was born. 100th anniversary of his birth may 29th i was thinking about that, and its very touching just watching this and thinking about all that he was trying to accomplish and what he did accomplish and what his brother accomplished and im thinking about how much better our lives, you know, were and have been because of those people as i think about the health care that he started, you know, that his program was in the peace corps and civil rights and all of what this base we have comes from that was the disruption, and were having disruption now. The same positive feelings i have now or whats going to happen i think that the key message i would like to leave people with is that they should remain optimistic and not be upset even though things dont go exactly the way they want. Ultimately, it will. It goes one way and goes the other like a gyroscope you shouldnt be upset everything will work out well. Stock market is essential an examp certainly an example of that over the last year thank you for your time. Appreciate it. Joe and andrew, back to you. Okay. Thank you so much for that coming up, were going to talk taxes with senator pat toomey. He will join us on set straight ahead. Youre watching squawk box here on cnbc volatile markets. Something we all think about as we head into retirement. Its why Brighthouse Financial is committed to help protect what youve earned and ensure it lasts. Introducing shield annuities, a line of products that allow you to take advantage of Growth Opportunities. While maintaining a level of protection in down markets. So you can head into retirement with confidence. Talk with your advisor about shield annuities from Brighthouse Financial established by metlife. You myour joints. Thing for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Well talk to a key player senator pat toomey former cia director general David Petraeus joins us on set final hour of squawk box starts right now take me to new york i would love to see l. A. Live from the most powerful city in the world, new york. This is squawk box. Good morning. Welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square. Becky quick is at the ron barron conference, which is now actually just the conference itself is just getting underway. Lets get a check on the markets this morning and check out the futures. Down five on the s p 500. Nasdaq down eight. Yet was a volatile session, which we havent seen much of lately at one point it looked like things were going to get substantially worse. Down over 250. The pullback maybe it was something to do with the tax plan jc penney out with results in the last hour. What do you say about those . Our friendly friends at jc penney i said they were better they were better. Its up 15 i called it a 3 stock. I did i dont think youre allowed to there are certain things that happen. Its like a penny stock almost you know, if you are a new company and you are a penny stock, its one thing, but if you are an iconic, you know, u. S. Company and you are a penny stock, its probably says things havent been going so well but better better the retailer lost and adjusted 33 cents per share. Thats smaller than the expected 43 cent loss revenue also topping expectations samestore sales rose by that was higher than some estimates, and as joe mentioned, trading at 3. 18 right now. Also, take a look at shares of disney this morning. They are rebounding after initially dropping on an earnings and revenue miss subscriber ad revenue. Also, poeed a decline. Heres what happened bob iger says disney has struck a deal with ryan johnson, director of the upcoming Star Wars Film the last jedi to create a new trilogy set the star wars universe and an action tv series also being developed for disneys streaming service. His comments about the streaming service and the plan to price it competitively with netflix that has seemed to give the stock a little bit of a boost back President Trump is overseas, and talking trade at a meeting of asia pacific countries in vietnam overnight. He said the United States could no longer tolerate chronic trade abuses and would insist on fair and equal trade policies what we will no longer do is enter into large agreements that tie our hands, surrender our sovereignty, and make meaningful enforcement practically impossible all right separately, the white house said President Trump will not meet with his russian counterpart Vladimir Putin on the sidelines of the meeting a scheduling conflict ruled out a formal meeting, although a spokeswoman said its possible that trump and putin could bump into each other at the summit. Well talk more about trumps asia trip with general David Petraeus thats coming up at 8 30 a. M. Eastern time now to tax reform. Senate republicans unveiling their plan with few key differences from the house bill. We are joined from cnbcs headquarters good morning good morning, andrew. There is still a lot for these two chambers to iron out the big difference on the business side is that the Senate Delays the reduction in the corporate rate until 2019. In the house the rate goes down immediately. We also have completely different approaches to passthroughs. The senate gives them a 17. 4 deduction against they are income the house cuts their tax rate to 25 and sets up new guardrails to keep this from becoming a loophole for the wealthy now, for individuals the senate does keep seven tax brackets, but lowers the top rate to 38. 5 . The house has just four brackets with the top rate at 39. 6. The house and the senate will still need to pass their own versions of a tax bill before lawmakers can worry about working out their differences between the two plans, and there is a grumbling, of course, coming from both ends of capitol hill in the house, representative Leonard Lance says he is mad about the cap on the deduction for property taxes and over in the Senate Jeff Flake of arizona says that he is concerned about the plans 1. 5 trillion price tag. New projections show that the senate plan does comply with the rules that theyre using to fast track this bill, but, joe, there is another rule that requires it to be deficit neutral in the long run, and the bill might have to change to hit that target back to you. Under 1. 5 is what they needed to do, and there was concern thank you, though. There was concern. We have senator corker here a while back maybe theres its justified because there are still some sacred cows and theres going to be some lobbying joining us now is a key player in the senates tax bill, finance Committee Member senator pat toomey we should also have the camera running maybe, senator i said when you sat down, i dont think these plans are that different, and it looks like they could be reconciled pretty easily i think i also said to you that initially the markets looked at that delay of 2019, but once they looked at the business expensing, if you can get it, you got to get it under 1. 5, and its hard to get it anywhere else ask if you can do it that way and get business expensing, its not that bad because its permanent too to 20. Thats right. Business gets to deduct the expenses against a 35 rate. Right thats a big deduction. Thats almost as good as having it happen now maybe even better. It really is. Im very open to the discussion about moving that date forward that would not be a terrible thing. There are tradeoffs, as you point out. Theres a limit to how much revenue we can forego. I have to tell you not that different. Its not that different the fundamental principles are the same tax savings for middle income families a dramatic reduction in the Business Rates so that we can compete. Moving to a territorial system so we dont double tax business overseas the architecture is the same i think well be able to iron out the differences. What about the delay on the corporate rate thats the big issue you get business expensing. Its even better than the delay. Then you get it under 1. 5 trillion you have to get it somewhere look, were on our side i think were going to be open to have this conversation i mean, we think about it, and were not that far apart weve got the goal is 20 permanent. One starts on january 1, 2018. The other starts january 1, 2019 i think we can find a way to bridge that difference its harder to make it permanent if you start it immediately. You are over 1. 7 trillion, which wont pass muster. You already have flake already talking about not wanting 1. 5 the journal says that the senate plan improves on the house plan in several important ways, but it ends by saying the details matter, but the larger story is that the senate, which was the cemetery for the health care bill, is has joined with the house. It could be i can see how there seems to be people said virginia could go either way with whether it helped or hurt this effort. I think it lit a fire under some of these guys. Weve been working all year long on this, working closely with the white house, with our colleagues in the house, and yesterday we unveiled the details to the entire republican conference in the senate now, weve been discussing the major elements for a long time, but it was really well received across the conference. Now, weve got a hold on almost everybody, and we understand that theres a lot of enthusiasm because its going to encourage Economic Growth and investment in the United States the journal says the wealthy will still duck the tax by moving their assets into truster foundations or sell businesses prematurely. It diverts resources from the economy. There is a growth reason to get rid of the death tax . Absolutely again, its a matter of what pieces we can fit into this box. We lift the exemption to 11 million for an individual and 22 million for a couple that really covers a vast overwhelming majority. If you add that wont work for him if you add if you are still going to be sorry we left you behind. Im left behind by that plan. Is the passthrough this seems the passthrough is better. 100 100 its much simpler it captures a lot of you know, weve talked about reagan would never raise the high would never have add an additional bracket for wealthy individuals, which the house does i mean, thats like philosophically not where a normal its not where we were in the Senate Finance committee how do you think that gets reconciled between you do you guys win . Theres going to be a long list of things that we have relatively modest here, again, its one point. What do you think trump does . He always talks about bob kraft says he would probably preefr the house bill were arguing about this t y tiny, tiny difference, and i think President Trump would be okay with either outcome its a tax savings for the middle class, and it makes business competitive its going to encourage tremendous investment. Its going to be very progrowth were you surprised at how quickly it got out of the committee in the house its actually moving it is moving. Its very good news. I think they held every republican on that vote. Theyre making Good Progress where. In terms of how this moves forward to the extent that you think it is close, just to help us understand where the fault lines are within the house relative to when this comes back you mean in the policy or where the challenges are i think its the things weve been talking about were going to have to reconcile slight difference on the top individual rate. Were going to have to reconcile the timing by who do you think will go with you and who is not will you lose some of the red statehouse guys with you mean blue statehouse guys blue state house guys one guy already said look, i think well figure out what it takes to keep everybody on board in that respect. I think its good policy to disallow that deduction. Why should my constituents in erie, pennsylvania, be subsidyizing the cost of high taxes in new york city and San Francisco . I think if you were in the senate and lets call you an independent because youre right in the middle. Thank you i think with this passthrough change and with being able to bring the money back and the territorials, all the things that are in there, i think i need a full score i think you are almost there. Under 1. 5 trillion can you make up for a loss in the republican side of things . I always thought would you get him to 51 if its scored closer to 500. Were not getting another 800 maybe you take a chance. You spent 10 trillion. You spent 10 trillion in the last eight years heres a number to think about. 4 of extra gdp growth completely fills in the hole. 4 on average for the full budget window. Dont you think you are going to get that come on, andrew. Come on, andrew come on. I hear you. No, no, i hear youre not ready to make a decision you got to talk to your wife thats what my clients always used to say. Got to talk to my wife. Thats my answer im using that can i call you tomorrow . I need a lifeline. I need a lifeline right now. Senator, thank you. Thanks for having me. Its a big step forward. Not usually that exciting to tax about tax reform, but its kind of interesting. Its interesting hopefully not just to us. Its also interesting that the market is at least initially took it one way 90 points well see thank you for this thanks still a lot to come on the show when we return, at ts bid for time warner, ubers ipo timeline, and the reason why twitter Ceo Jack Dorsey did not attend those congressional hearings on behalf of his company. The headlines from the New York Times dealbook conference i hosted yesterday ued tun yore watching squawk box here on cnbc i think its terrific. Your kids go to college and you start trading. Yeah, 5 years already. 5 years, hmm. You ever call your broker for help . Once, when volatility spiked. And . By the time they got me an answer, it was too late. Td ameritrades elite service team can handle your toughest questions right away with volatility, its all about your risk distribution. Good to know. Thanks, mike. We got your back kate. Does he do that all the time . Oh yeah, sometimes he pops out of the couch. Help from real traders. Only with td ameritrade. There still seems to be clear difference on both sides literally about just what even happened at that meeting i mean, clearly, welcome to the Media Business, right . Thats what i think randall is facing at this point by the way, really great job on that interview yeah, there was a big gulf between what was reported in terms of, hey, we need some structural remedies here we probably need to sell something off, and him basically saying, you know, well, i wasnwasn wasnt i think they have a long road to go to figure this out. You may not have been watching yesterday, but because you were doing this. We had a media reporter on for one of the big newspapers. He told us that he knew for a fact that trump was still mad at zucker because he gave zucker the apprentice ratings when zucker was in charge of nbc. Zucker still trump still is mad. Told the Justice Department to enforce a sale of cnn. He said he absolutely knew all these things you know, thats a really sexy story. Just like randall just said. Number one, would he know those things, and can you just say that off the top of your head and pretend that its true i mean, its a sexy story. Is there any veracity there . We really dont know. The one thing thats so fascinating about this is the new head of antitrust enforcement was interviewed when he was still a professor, before he even got this job, and he was asked on television what he thought of this transaction, and he said on the merits of antitrust law this should pass. Not a problem. So there is no hold on then he goes from being a professor. Suddenly. Into the administration if you will, or into the department of justice, depending whether you think its a political job, but it is a politically appointed job, and has a potential change of tune my question for ed is, clearly, the message that i heard from Randall Stevenson yesterday was that he is prepared to go to court. We are now in a grand game of chicken. If you are the government, how do you think about that . Well, i think if you are the government, if you are the antitrust guy at the doj who is now questioning this deal, you dont want to go to court because i think at t has the case, as he has pointed out, to vertical merger, which means ur auto not taking competition out of the business. If you are a consumer, you still have the same choice out of this they have i think theyve got a Slam Dunk Court case for this. Im really curious to know what made him think needs to be done here he is a conservative the way they tend to approach these types of deals is what we call a structural remedy as opposed to a behavioral one. When comcast bought nbc, thats the closest example here there are a lot of behavioral remedies that was born out of that one this time around if he is holding true to his it feels like at this point, though, that it may be hard for the doj just to say, okay, were passing it asis, given the commotion thats being created is there anything you think they could ask at t to do that would be acceptable from either a dive divestature or behavioral standpoint from a behavioral standpoint, theres a lot they could ask for that would be fair, right, in terms of, you know, if you are a showtime or a stars, you might have an argument that, hey, i dont like the hbo is now part of at t. Im worried that at t wont properly market my channels now because now that they own hbo. There are things like thatting that i think would be a legitimate concern thats all they got we kept asking its small things like that what is the rationale for saying this is anticompetitive or you cant do it all they can really say is that there is none what they kind of make this leap to, well, they could control some content and it would only be on there and they would charge more thats the thing. I think a lot of people dont understand the mechanics of the Media Business theyre worried about things like, well, youre only going to keep hbo within at t they dont want to do that it doesnt make any sense. If you own hbo or cnn, you want it to be as widely distributed as possible. Thats how tv works. You have really come a long way since youre i have always felt this way, joe. Since your neutrality rants you are very free market about this we all evolve. We all evolve. Hey, ed, we want to pivot right now to the other big interview with ubers new ceo. He was speaking out for the First Time Since taking the helm heres what he had to say about the ride sharing startup going public we have all of the disadvantages of being a Public Company as far as the spotlight on us without any of the advantages of being a Public Company. Travis and the whole board now agree that we should just go public the numbers support it the Systems Support it, et cetera speaking about a soft Bank Investment, he said it hasnt happened yet, but it will. Talking about whether it will, ed, we still gather that there is some commotion on the board about how this deal will go down and, therefore, whether it will. Well, so there are all these questions about, you know, sort of rights in terms of what kind of Voting Rights would come out of it after the soft Bank Investment wants thats the money theyre going to get its also about what travis will get out of it. He is no longer part of the executive team he is still, of course, on the board and a founder and significant shareholder. Basically the other shareholder, the other benchmark, in particular, which is the vc that backed this company in the early days, they dont want travis to have as much of a say as he has had before that seems to be the big sort of holdup. In addition to price, of course. Everyone wants as much as they can get out of it. Real quick, in one of the other interviews i did with jack dorsey, we had a fascinating conversation about square, but then we got into twitter i had said to him, you know, have you ever thought about going to congress the last week, you know, all of the big tech giants ended up sending their lawyers. He said i absolutely would go if invited to represent the company. You have a story this morning on that issue yes well, we checked with our sources, and, you know, we asked our congressional sources, and they said,a you, he was invited. We would have loved to have him come in. You think they all were invited . You think all theyre all invited of course. If congress invites your company to testify, the ceo should show up or at least the presumption should be that, hey, the guy in charge, the person in charge, should be there. Yes . You know they were invited by name or the companies were invited the companies were invited. I dont think he was singled out by name. I think you kind of split hairs at that point, though. Ed lee, thank you, sir. Good to see you. All right were going to talk about siemur fi with David Petraeus former cia director general David Petraeus will join us, and we will ask about putting vets to work. Tomorrow is veterans day the north korea threat and trumps asia tour. Were right back you know what, im not buying this. You gotta come a little harder dawg. You gotta figure it out. Eh, i dont know. Shaky on the walk, carriage was off. Randy jackson judging a dog show. I dont know dawg. Surprising. Whats not surprising . How much money lisa saved by switching to geico. Wow performance of the night. Fifteen minutes could save you fifteen percent or more. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Up next, general David Petraeus is here do you know what birthday it is . The marine corps birthday . Guess how old. Every day, on every street, in every town, across america. Small businesses show their love to you. With some friendly advice, a genuine smile and a warm welcome they make your town. Well, your town. Thats why American Express is proud to be the Founding Partner of Small Business saturday. A day where you get to return that love, because shopping small makes a big difference. So, on november 25th get up, get out, and shop small. Okay, great. Welcome back to squawk box here on cnbc live from the Nasdaq Market site times square stocks on the move this morning. Nvidia is rallying it earned 1. 33. That was well above estimates. In fact, it beat it by 39 cents. Stocks up 4. 5 there was Strong Demand for gaming news corp. Shares are higher this morning the wall street journal publisher earned 7 cents a share for its First Quarter compared to the consensus estimates for a penny. Nordstrom shares are lower in premarket stragd trading the company did beat estimates, but Comp Store Sales fell more than expected. Andrew, i have 242 years for the marine corps, which is before 1776, which is what we think of as the founding of the but it was in a tavern down in philadelphia and a brewery where they were recruiting for the revolutionary war. Thats happy birthday to the marine corps we have general petraeus you rememb you were he remember a, but we love all of our going to get a quick Market Update from dom chu dom. You can see we have paired some of the losses in the premarket trade in the future side of things if you take a look at the price action yesterday, theres a reason why some folk out there dont believe that yesterdays move was the precursor to anything deeper. At least not right now the reason why we did see some pretty big moves in the s p and nasdaq yesterday we finished well off of those lows for the s p 500 we actually closed right about where we open all of those exacerbated losses intraday evaporated by the time the closing billion came around, and you have reeled off a number of positive stocks today two sectors to keep an eye on with regard to the sentiment out there. There are two of the more momentum centric sectors cyclical sectors thats technology and financials take a look at technology, first of all the spider etf that tracks that ticker, xlk, actually took a pretty decent dive yesterday, but finished right where it opened up, like the rest of the market did financials as well we watch Interest Rates here as part of this story the xlf, this is the spider financial etf, actually finished higher than where it opened yesterday as well. It was still down marginally on the day, but, still, a lot of people rushed in to buy technology and financial stocks. Those are two of the more momentum centric parts of the market i would also point out, joe, andrew, and general, the idea that the markets right now could be poised for a fall is something a lot of people are watching one thing that they are keeping pretty close eye on is whats happening with the high yield or junk debt market a couple of the etfs that track these over the course of the past couple of weeks have actually taken some pretty decent dives versus the overall stock market if you are looking for that cautionary sign out there, maybe high yield debt is one of them, although i would point out the same thing happened earlier this year as well, and it bounced back to hold pretty stable in terms of yeartodate gains. Something to keep an eye on. If you want more in the story an interesting note out from bank of america, Merrill Lynch on our website, cnbc. Com right now saying this latest pullback may be just the dress rehearsal for the other big ones to come, guys its interesting to watch, though we hear its not a barometer it is a barometer. Were right in the middle every day. Were seeing the tax bill move out of committee, and then were seeing a Senate Version. The market kind of does this and that its going to be interesting to watch as this plays out. Its near term, dom, and were at alltime highs. Its going to be interesting absolutely. I would point out this has been a staggering run for stocks, right . Were still trading well above our average price over the last 200 days okay. Thanks, dom. Tomorrow is veterans day joining us now David Petraeus, retired four star army general, who is currently chairman of the kkr Global Institute he heads their vets at work program, which has hired over 50,000 veterans since its launch in 2011. General, its great to have you. Thanks for being here. Good to be with you we have, unfortunately, been hearing some anecdotal things about what happens to our vets that isnt always great, and we wish they could be perfect all the time for these guys. Obviously. You have some positive news, which we dont always hear i think the big news this veterans day is that the Unemployment Rate for veterans is now considerably lower, according to the bureau of labor statistics, than is the National Employment rate. Thats a very big deal and it hasnt thats quite different from what it was a number of years ago. I think its a result of a number of factors. Its the smart thing to do, and that has been the case at kkr and in companies in which were invested, which, as you mentioned, are kkr vets at work program has broken through 50,000 just in the last six years since that initiative was launched and were not only trying to provide veterans jobs, but we also realize we need to provide them careers we want to help them by investing in them, indicatieduc them, training them, mentoring them, having focus groups. All of the elements that help someone who brings extraordinary skills many cases off the battlefield knows how to lead, how to follow, how to adapt in the face of a resilient enemy and very tough weather and terrain conditions all of these experiences and attributes and so forth are being brought to the civil work force. They just need for firms to invest in them and give them more than just a job, a job opportunity, but an dunt at a career theyre making the most have that a lot of the other issues that have been highlighted this week, this overarching theme would help that. We heard about vets that are hungry and dont have access to food sure. We hear about the v. A. Get private Health Insurance or do they still use the v. A. When theyre employed they have access to the v. A again, i think the v. A. System is gradually improving i think that bob mcdonald started that by the way, we honored him last night. Really . At the iraq and afghanistan veterans of america annual gala. I think the who, of course, moved up in the organization is very much continuing that. The initiative congress and the white house to give additional authorities to the v. A. Secretary i think are very positive as well we can then speed the delivery of services and the bureaucracy that, you know, used to take a year or more you just get a bill paid all the challenges a veteran has, at least we can get their bills paid for v. A. Care and so forth on time. I just wanted you to reflect on your own career in the military just given this day and sort of how you feel about beyond the sort of bigger issue well, look, i think serving ones country in uniform is the greatest of privileges, and beyond that its an even greater privilege to serve with others who all feel the same way. Regardless of how americans have felt about the policies that weve been implementing, they have generally been supportive of our men and women in uniform. Unlike the vietnam era, weve gotten it right this time. You feel the support . Very much so. This goes way beyond thank you for your service as important as that is, this is into a whole bunch of tangible if youre not politically divided the country feels right now, do you think that that may have any bearing on the not the support from the military, but for the men and women that are in service i think across the board by and large americans support their men and women in uniform, and their veterans and, by the way, their families as well. I think theres a very, very considerable level of support, and it stems to our universities i am a chair at the university of taught here at the university of new york theyre all trying to provide better for our veterans. The private universities are making up the difference between the gi bill and the cost of tuition with something called the Yellow Ribbon program. Usc does that for all undergraduate majors now and just about for graduate school as well. The v. A. , getting better, absolutely always need for more improvement. Yes, we still have to cut down the suicide rate of veterans and also deal with veteran homelessness and a variety of other issues i think a lot of positive developments there and, again, the most significant this substantial reduction in the rate of unemployment for our veterans its a complete the suicide rate, we had the secretary on the other day, and we asked the question, and i thought we misspoke about it then i have been thinking about it yesterday is it really 20 per day . Certainly in that realm the rlast time i saw it do people know this yes oh, very much so i think everybody. Certainly in the veteran community if you lose a helicopter and, you know, for days it kind of hangs over the consciousness when we lose guys. When you are talking about 20 this has a face on it all of us know veterans who have committed suicide, and its tragic again, Something Else that weve got to continue to attack, without question as far as readiness currently five, ten, 15 years ago, where are we in terms of military readiness . Do we have the funds and the suppo support . Tnumbers that i have seen thi year are hardening because there are areas of readiness challenge without question a lot of those caused by sequestration a few years ago. When you allot 50 billion or more out of the budget in midyear and then you fence certain areas that you can affect, what you end up doing is basically grounding the aircraft, tying up the ships and parking the tanks that are not actually in war or preparing to go to war. That still exists. Then theres marine aviation, Airline Pilot shortages and a variety of others, and as we saw with these naval accidents, weve been using the fleet very, very hard and clearly that has resulted thats certainly a very significant factor in these accidents. I wanted to ask just one news item curious what your take is on whats happening in saudi arabia right now. Well, this is very, very interesting. You know, someone the other day said, you know, saudi arabia is in transition. I think this is a revolution moderate form of islam he has called for women can drive. Entertainment available for saudi citizens and so forth. Then, of course, you see a very significant change in how the country has been run, basically, to where it used to be sort of a consensual different family members and now he is very much consolidating power, i think, because he feels that he has got to drive this forward and the Anticorruption Campaign thats now ongoing. I know you were just saw principal alwalid, and, of course, he is now caught up in this internally it feels like theres a lot of support for an anticorruption effort a huge amount of support by the youth of saudi arabia for virtually everything that he is doing. The question is, you know, how will this play out how are International Investors thinking about whether you want to put money in that country given the crosscurrents of whats happening . Well, just in recent days, if continued, again, we have to wait and see this is going you have to assess the environment certainly. Again, the aggressive revolutionary move in the economic realm, the soernl realm and so forth should give us hope, but then we also have to see what is done with the Anticorruption Campaign thank you thank you pleasure. Thank you. Thank you happy birthday, marine corps. You just had a birthday. 39 again tuesday . Yeah, 39. Thats right happy birthday. Coming up when we return, a stock that seems unstoppable nvidia shares up 100 so far this year. You would have liked toown thi for the past couple of years were going to dig through the timap kers with an analyst right after the break. Win an uncertain world . K predictable income pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over 120 billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. I thwell wait. What did you meetthink about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . 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Computer chip maker nvidia posting a Third Quarter result above analyst expectations thats beating on the top and bottom lines with strong chip bemanned boy, would you have wanted to own this stock show a chart its really quite something. Anyway, joining us right now for more on whats going on with nvidia and also the chip sector, which seems to be in the news like crazy between broadcom and qualcomm and amd, and intel. Chris, the Semiconductor Analyst and manager at Raymond James good morning good morning. Thank you. First of all, can this run continue well, you know, if you go back a year ago, you know, a lot of nvidia was based on the promise and kind of hope for Artificial Intelligence and data center now youre actually starting to see it kind of really happen and really putting up the numbers. You know, compared to where we were last year, the stock has doubled about over the last year, but estimates are up quite considerably as well okay. Thats the question. Given the estimates, theyre still beating, but where do you see this 12 months from now . We just put a 250 price target on the stock this morning. You know, really the key here is we think youre in their early days of the Artificial Intelligence rant. Theyre very well positioned in that they have a new product that came out in the last few months addressing that market with higher price i think the momentum is still there. Its still awe large market. Its frank ly difficult to quantify that market given the early days, but it certainly seems that its going to get larger than it is now. What is your take on the whole broadcomqualcomm deal if you were a shareholder of qualcomm, what price would you need to actually fall into their hands . Right well, we did upgrade qualcomm earlier this week too. Its been, as we said, a busy week and the thought process there was that not necessarily that the deal goes through with br d broadcom its a 70 offer price, but theres a couple of things happening. They are trying to acquire nxp, which is quite a thing for them, and it would get the stock up if that were to be completed and they drive it. The other is theyre in this dispute with apple, and, you know, our view is those are the two things that they need to focus on in order to, you know, get the stock up if both of them happen, well then probably you make a case to investors that as an independent company, you could see better than 70 70. You know, i think the likelihood of none of that happening at this point given the fact that the offer is out there is pretty low. Pretty low. What would be your takeout price . I mean, the offer from broadcom is 70. We have a 75 price on qualcomm right now. From an investor standpoint, you have to say management has to convince me that theres more than 75 worth of value. Pick a number ahead of it. How do you like intel, and that made its own joint partnership amd. Theyve been butting heads for years. Now theyre going after nvidia we have been more cautious on intel, and relative to the rest of the group, and i think people know the story there hatch of their business is pc. Pc is declining in market. What intel is trying to do to manage its credit is they realize that theyre trying to make bets elsewhere. Our issue with intel is more about the return on investment of some of these other investments. Graphics, they partnered with amd for this one product, but at the same time theyve redoubled their efforts to do their own internal graphics, which is something that theyve tried over the years now, you know, for intel to be successful and to screen graphics, they would have to take on nvidia theyre doing very well right now, and my feeling is the r d efforts that you spend on that i just dont think the roi is going to be very high. Certainly not as high as the pc market where you have a monopoly and that comes down over time. Hard to replace monopoly type revenue. Check out the shares of hertz, despite canceled reservations in the hurricane impacted parts of the United States hertz warns it will have to list spending as it enters a period of weaker demand. Disneys roller coaster ride in the past 24 hours the highlights from the house of mouses latest quarter thats next. Up 2. 45 here are futures, weak most of the Early Morning session but now those are the best levels ive sn,ee down nine points on the dow. Well be right back. If youd have told me three years ago. That wed be downloading in seconds, what used to take. Minutes. That guests would compliment our wifi. That we could video conference. And do it like that. snaps if youd have told me that i could afford. A gigspeed. A gigspeed network. Its like 20 times faster than what most people have. Id of said. Id of said youre dreaming. Dreaming definitely dreaming. Then again, dreaming is how i got this far. Now more businesses in more places can afford to dream gig. Comcast, building americas largest gigspeed network. Now more businesses in more places can afford to dream gig. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. 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Get there sooner. Shares of disney are rebounding after an earnings miss we want to catch up with julia borseten joining us right now. Good morning, andrew, disney shares dipped after missing expectations on the top and bottom line, mostly on weakness at the media Networks Division the stock turned positive during the Earnings Call as the ceo detailed his direct to consumer apps in the potential and potential for disney announcing the disney app in 2019 will be priced substantially below netflix as disney looks for a broad direct Subscriber Base we believe creating a direct to consumer relationship is vital to the future of our Media Businesses and its our highest priority this year our decision to acquire control enables to launch robust offers and immediately provide us the tools we need to stream video in scale to acquire and retain customers and greatly enhance our Advertising Opportunities on digital platforms, and to use consumer data to provide a better User Experience iger said they are benefitting from new subscribers to offer top bundles and optimistic about the future of espn because its included in the skinny bundle. He did talk about the transformative power in general, marvel and lucas film and bam tech, disney didnt need greater scale but you can never have too many movie franchises, iger announced new trilology around the last Star Wars Films which got fans pretty exciting. Julia, thanks, nice move today. That should help the dow a little up next, dont look down at least at your phone. Chicago considering a surprising punishment if you text while crossing the street. Details next tmobiles unlimited now includes netflix on us. Thats right. Netflix on us. Get 4 unlimited lines for just 40 bucks each. Taxes and fees included. And now netflix included. What we do every night is like something out of a strange dream. Except that the next morning it all makes sense. To power global ecommerce Fedex Networks are massive, farreaching and, yes. A little magical. Fedex. Com slash dream the markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Two chicago lawmakers are proposing a City Ordinance that would fine people for texting or talking on the phone while crossing the street. Fines would range from 90 o to 500, 70 pedestrians have been killed so far this year. The bill has been sent to committee for review a similar bill went into effect in honolulu hawaihawaii when youre walking along and see someone almost run into you doesnt that irritate, you look up. Dont you get mad when they are doing that but im the person im the one doing it so we have not talked about shawn parker saying what are we doing to our children . Have i not been telling you that social media a cesspool, go millennials, meet someone in person and talk to them. I want to see you get off of twitter. I dont tweet, i just look, i like to watch. If you love mcdonalds ice cream is it ice cream not youre saying it real ice cream . I dont even know if its dairy. It probably is, im kidding. Theres an app to tell if you the machine is working before you get there. Ice check. It lets users find their closest mcdonalds and whether or not the mcflurry is up and running and anything derifd from Dairy Products in it it also lets users view the status of the machine. Make sure you join us on monday have a spectacular weekend. Happy veterans day squawk on the street begins right now. Good friday morning, welcome to squawk on the street. Im carl kiquintanilla. Cramer is off today. A lot to Pay Attention to including disney and nvidia earnings and president in vietna