The Investment Committee is ready to go. The Halftime Report starts right now. Welcome. Good to have you with us on this friday our Investment Committee here today joe terranova, john levanthal, josh brown, and marc lasry is here. Lets fwin with the markets. Stocks extending gains, more trade optimism marc, good to see you again. Thanks for being here. Ill turn to you first were looking at the major averages dow is about 70 points from 28,000 what do you make of the markets in the here and now . Are you surprised we are where we are in. Yeah. Im very surprised, actually why so . Well, if you sort of look ate it, gdp growth is slowing down youve got issues sort of everywhere youre turning. And yet the market keeps hitting new highs. I think thats its great if youre an Equity Investor for what we do we need sort of the market and gdp to be around 1 to 2 . I think what we do, its great i think on the equity side, its going to be a tough year for the next year. You do . Why so because of growth expectations coming down . Because growth is coming down and because of all the issues youre having out there. You know, its funmy. You mentioned growth were literally getting forecasts as we speak talking about q4 gdp, new york fed, 0. 4 i could give you others, but the point is being made by that simple number really where we are on growth. Does the market deserve to be where it is in. When you see the moderation of the dprks dp in the fall fall back from 1. 95 back to 1. 82 . It fwoez back to the strategy of wait a a second. Last five days are underperforming growth back leading the market once again. Apple, microsoft, alphabet new alltime highs so i think growth as a strategy is back. Ive been speaking a lot about that in the last couple of weeks because i agree with marc. You are not going to see an acceleration in gdp. If anything, youre going to see further contraction. And thats going to bleed itself around the world does it all come down to the fact, you know, Paul Tudor Jones and others have say and maybe you believe this yourself. You have an engaged fed, right you have the insurance policy of the fed going to be there. Thats powerful. Thats one of the words he used, explosive. Is that fair i think it is what people have learned is dont bet against the fed, right . And if you sort of look at if the fed is going to keep on lowering rates, the fed is going to be and they want the fed to come pack, thats your osavig grace. At the end of the day, i do think when youve got the new york fed saying growth is going to be 0. 4, thats not good im sorry. I just dont think thats good if youre not going to have growth and gdp is going to go lower, thats not good news for stocks the fed will temper that, but i think people are putting too much faith in that right now what about for what you do, you suggested youd like growth to be higher than that as well for the strategies that you deploy i just dont need us in a recession. If were flat to up one, thats great for bonds. Its great for credit. Its not great for equities. I think what youll find is next year is a year of credit whereas i think this year has been a year of sort of on the equities side i think its fwoing to do a lot better next year interesting josh, what do you make of that i think the big story this year is the technicals have led the fundamentals and the economic commentary. And it should be that way. People are changing their opinion based on price it was a bank of america Portfolio Manager survey last week in which they recorded the largestever jump in Respondents Expecting expansion. A 43 percentage point jump from the prior survey why does Something Like that happen theres only one reason. Its not all of a sudden the economy got good its we had new record highs not only in stock but all over the world. Including emerging markets when youve got that technical backdrop of prices rising week after week, people start to change their minds so the lesson, scott, is to Pay Attention to what people are actually doing in their buying and selling and pay less attention in peoples opinions about the future because they will change based on what they see on their screen last thing i want to get into, buybacks are up 26 through the end of last week last week witnessed the sixth highest level ever recorded. And when you think about what that and tech, by the way, fourth highest ever. Yeah, there are probably people still very concerned about things like impeachment, the economy, et cetera but the mass buying of shares has continued throughout the course of the year and is hitting higher highs as we get into year end. Because there were existing buyback plans where they havent finished what theyve been authorized to do so if you know thats the backdrop, then understand the sales youre making are being made are being purchased by the treasuries and corporations. Are you talking about, you know, single digit returns for stocks that sounds reasonable to you weve had a great year no two ways to put it. Is that what were looking at, you think . I think so. I think next year will be five to ten what do we think on the desk about this look, i think we should not be surprised that Fourth Quarter gdp stinks right . Look at the fundamentals whether its the ism or even more microscopic. Look at in 2018 this year theyre 150,000. Theres no way gdp can grow massively with the Manufacturing Sector on its butt its on its butt because of china trade issues i know im a broken record, but this teeters on the continued improvement in china u. S. Trade tensions thats why i think were up today. I just dont see how we get the 10 earnings per share growth in the s p 500 which frankly i think, marc, is necessary for your not so lofty single digit returns. Why is it necessary we didnt get it thissier either had no growth in earnings. I know, josh, and i know you know this. Were not much higher than in january 2018 we talked a lot about that we were down masively last year. Look, its the same since 2016 i agree with that but wait a minute. Thats my point. Theres no linear relationship within any calendar year before Earnings Growth and stock market returns. If you average together 2018 and 2019, youre up 7 annually a year last year is minus five. Thats an average weve had an average stretch sense the onset of the trade war you havent got the commensurate Earnings Growth. So im not sure that were going to have Earnings Growth next year either. Im not sure youre saying Earnings Growth doesnt matter, but i want to put the narrative in here. January 2018 we were up about . It was after that that people started to realize, holy smokes, we got a lot of things going on here we may enter an earnings recession which is what turned out to happen. And thats thats why were rising but i think youll agree were supposed to see a 3 contraction in earnings in this set of reports and it was more like a 1 . Its the same number. Were doing okay. I think youll agree if we dont get 10 Earnings Growth next year, weve got a problem in the markets maybe i think so. Maybe do you disagree with marcs no, i completely agree with him. I think the best thing you could do after a year like this, you made 10 in bonds, 25 in u. S. Stocks, 16 International Stocks the number one best thing you could do is listen to marc and temper your expectations for next year. If youre investing as though every year is going to look like this year, 100 you will be disappointed so i think what mark is saying is the way everyone should go into every year. That if were lucky, well have a good year. But nobody should be expecting double digits just because you woke up in the morning are you worried about a recession in 20 . Not at all. I just think thats not bullish for stocks so if youre looking at it saying itll be 5 to 10 , thats how i look at it. I think thats feign i think there will be more opportunities on the credit side what about the idea going into an election year, the president wants to see a stock market go up he cares about that maybe as much if not more than anything else thats a powerful thing to have in your pocket as well and that relates directly to trying to do a deal with china where some say the president in their words needs a deal i think its exactly what youre talking about i think hes going to have to cut a deal and he will. And the question is when does he cut that deal . Youll see that deal get cut once you see the market going down and as theres more and more pressure on him, then hell cut that deal. So i think itll happen. Whether it happens in january or happens in june, you know, i dont want to say anybody is going to time it, but i think they will. You think weve pulled forward some of that potential like a lot of people agree with that and maybe were already baking that into the cake . Youd always like to think its priced in because it should be i think youre right but at the end of the day, the markets still going to react really positively to any deal or any nauz of this i think theres a bill negative though. If december 15th comes and the next round of tariffs go into effect, january, june, something has to be done about those december 15th tariffs. You can kick them down the road. But dont let them go into effect why dont you weigh in . I agree that its all about trade in my view its all about trade in erm thes of getting the markets to the next level is it going to continue to rally from hooe ehere we need some confirmation that earnings is real if we get the Global Economy acting better and that puts pressure on the dollar we need something to give us confirmation that Earnings Growth will, in fact, happen next year. But i also think, you know, were at levels right now from the valuation standpoint in line with historical averages so its hard to really argue for a lot of multiple expansion from here what we knead is confirmation of the 2020 earnings estimate and then potentially some upside from there to get us moving from current levels where do politics factor in since we went there a little bit with the trade strategy . Where do politics factor into your forecasting for next year as a risk factor there are some who say its the biggest risk fwoigoing into 202. Its a huge risk, it really is if you look at where democrats and republicans are, its sort of nugt and dight and day i think if trump wins, youre going to continue having sort ofless regulation. I think the market will view that as being positive you think if you have somebody like senator warren who is just a nominee, forget winning the election i think the market will start pricing that in. And the probability of her winning look, i think if shes president , markets down 20 , 30 i mean, its it is not good news and i think people are going to lose huge amounts of money in that and thats going to be thats going to have a huge impact on sort of whats going on. What do you make of where we are with this whole conversation that has now gone public and gotten personal . And she has a new ad running on this network i think its fair to say attacking people like you, wall street people whove made a lot of money youre a democrat and yet you say the market could go down 30 . Look, at the end of the day, im a democrat because i sort of believe that what we should be doing is helping others. Right . Will that cost me money . Yes. But ive gotten lucky so thats fine at the end of the day, i think someone like Elizabeth Warren if she wins, it is what it is, but the market will go down. I mean, its abundantly clear thats whats going to happen. If people want to see its not me people want to see their net worth if youre Middle America and you want to see your net worth drop, the question is does the market drop 20 or 30 . Its fine. People have the right to vote and do what they choose. And whatever they think is best for them i just think its going to cost people a tremendous amount of money. Does it happen, like, the day she wins or are you saying profitability of companies over time declines because of new regulations, new taxes, and its a slow grind i think you will end up seeing that if shes the nominee, that the market is then going to have to start pricing that in. And i think youll start seeing just the market going down and as new regulations come in, its not going to happen overnight, but i think it is a grind whether that takes six months or a year so supertuesday could take on a lot of significance for the stock market i think this is a little bit dangerous. And i think its too premature on this. But you could make the argument if shes the nominee, shes so polarizing its not just us on the desk its not just the investor class who says wait a second, if we ban fracking, were going to put a Million People out of work capex is going to go down. Consumption is going to go down. That doesnt require our collective brain power to come up with that i think the nomination with her might actually have the opposite effect we wont know or her bite is not as bad as her bark like almost every other candidate whos ever run for election as a chiropractor and she can have that leeway to tackle a little bit further away from the twitter left. And maybe be more of a centrist on certain things. And maybe the market gets over some of its worst fears. What would you i mean, some respects, maybe you end up shes going to find out some respects what youve said, right . People like you end up in commercials as i said that shes doing. What are you going to do you find yourself in a commercial, a new ad for Elizabeth Warren attacking you along with these other billionaires in. What am i going to do what do you make of the whole warren versus wall street deal its resonating otherwise she wouldnt do it i think it resonates with her base she has every right to say what she feels. She has ever right to end up trying to get her base to vote for her. I think thats what makes this country great. So i dont have any issues with what shes saying. All im saying is theres repercussions by doing certain things right . And that will end up i think youll have more regulation. Youll have things the market does not view as positive. And if people dont care about that, thats fine. Theres going to be some cost to all of this. And i think that cost if somebody wants my opinion, i think that cost is 20 and maybe greater. But theyre everybodys free to do what they want i dont have any issues with people disagreeing with me i think at the end of the day theres fwoung to be actions for that and a cause for that. Thes have and have nots and how to bring people together i think theres a lot that we should be doing. Like what in. One of the things the hardest thing people have look 60 to 70 of all businesses in the United States are Small Businesses how do you end up increasing that the biggest problem everybody has is access to capital why are we not creating sort of a jobs bank where we can end up people can borrow money. Ive got no issues with it ill keep working. But giving somebody an extra 500 or extra thousand, thats meaningful and helpful, but what you really want to do is how do you turn their life around the way you turn somebodys life around is give them a high paying job, give them a job theyre proud of thats what we need to do. And thats how we sort of lift everybody up Everything Else is just heres one thing why dont you cancel all the student debt give people the opportunity to at least now go invest in other things theres a cost to that i think were spending theres a big cost. There is. What do you say to somebody who says Health Insurance is the reason we dont have more entrepreneurialism people are relied on their job so theyre covered to go to the emergency room and if you nationalize that and took the onus off the people keeping the job, youd have more people feeling the flexibility to go out and join an industry on the rise rather than staying put id agree with that okay. Theres a lot of issues i think theres a lot of different ways of doing this the question is how do you make somebodys life better and how do you create a job for them where they can support their family id rather try to find solutions and try to work with people in solving those. What do you make specifically on the wealth tax idea look, i think at the end of the day, if thats where it goes, thats fine. Ill pay my fair share ill do whatever somebody says, i just think theres better ways of doing it. And one of those ways is if youre going to have a wealth tax, you have a wealth tax do something where that money is helping someone try to get out of where they are and build a business well, im listen im thinking of what josh said im going stock specific about the health care issue. Because i own cvs. I think about what you said that people in their jobs you can identify people who are not happy in their job but i think theres a lot of people who are happy with their Health Benefits and if the alternative is to go into government led Health Benefits, the problem is its probably not fwoing to be an efficient way of doing it. Youre probably going to put Health Care Insurers out of business and this is marc, im channelling you here we can go down that road if the population chooses but we ought to know what the cost is a lot of jobs and Health Insurance look, im going to channel Ronald Reagan right . The worst words is im from the government im here to help. Thats going to writ large if we have governmentled Health Insurance. My opinion who are you supporting right now . Do you know . Right now im supporting Kamala Harris still still okay. She wants a private option and public option for Health Insurance. So im my view is, look. At the end of the day i would like to have somebody whos in the middle whether that is center left, thats fine. But id like to have somebody who wants to work with people and solve problems i think shes that person. I think senator biden could be that person. You know, bloomberg obviously if he comes in would be one of those people if he comes in, would you support him or would you continue to support Kamala Harris im going to try to support whoever i can who i think is going to try at least what i believe in i dont know everything that bloomberg wants to do. I think i know what some want to do ultimately im going to try to support those people and hope they end up winning lets do this lets break away from that part of the conversation. I think weve taken that as far as we want to. Lets hit individual stocks, if we could, okay i want you to react to nvidia. The earnings there, good quarter. Price targets raised 225, 245, 220. Lets kick this around josh, you own it yeah. I would just point out this was 140 stock eight weeks ago so its had a dramatic rise running into these numbers and maybe even some of what they said on the call was priced in here you have a company with enterprise value of 120 billion. Not a lot of people would look at that and say this is an underappreciated stock but perhaps it needs some time to consolidate recent gains. If we pull back the chart a little further, when there was euphoria around these types of its somewhere in the middle of its three or four year range. I think its okay. Im not foing anywhere its down 30 from its october 2018 high. The indication is its a seasonality as it relates to gaming i dont own the stock. Well get to applied material which impacts that in a second alltime high for Applied Materials too. And you got the indication from lam research. I think we talked about that off of lams earnings that it would be positive for Applied Materials. I just think semis in general, you have to be specific and very sensitive to the overall macro environment. I think nvidia is one of those names that unfortunately falls on if we have one of those uhoh moments to the u. S. china trade dispute, youre going to fall back whats interesting about the semis, look at the smh this is one of the best in the s p 500. Theyve actually nonstraited a remarkable remove from all of the tariff stuff all types of products where they didnt exist cars being illustrative example. Theyve actually not been economically sensitive because if you thought of this sector as a, very susceptible to global trade, and b, very highly reliant on durable goods orders and inventories, the stock prices warrant stock up 108 . The best in the s p for 2019 if the year were to end right now price target fwoez to 50 today on rmd you want to short this thing in. No. Are these sustainable in the chip space the numbers are incredible i think when you have a consumer for the most part as an end market thats driving demand for these things, its a positive but i think we need, again, more confirmation that theres progress theyve gone up so much without it its the obvious comeback to that a lot of that has been on the equipment side again, another example on the semi equipment side. Its the equipment component that has led ems higher in 1. Qualcomms up 62 ,joe amd is up 112 . Beginning of the year there was channel stuffing, right . In the Semiconductor Space in anticipation of a trade deal not getting done that inventory has been worked through. Now whats going on with china u. S. Inventories should be good if youre going to get the growth that the prices are suggesting, you have to have the china trade deal come through. This is similar to industrials which are punching way above their weight class right now way above their weight class cat is the shining example of if you look at current fundamentals, you wouldnt own it but if you get a trade deal that starts to clear the way for trade to start flowing across the globe again, thats one you want to own. Both the semis and the this is a stock that basically grows at the rate of the Global Economy even where its trading, youve still got its still paying its still up 30 year to date. But youre going to have 3 yield, 50 higher yield than youre getting by holing the s p 500 and theyre buying back stock. It belies this idea that we need this trade resolution to come. These stocks went ahead anyway so did the overall market, right . I hear you in anticipation maybe all right. Well take a quick break we have much more ahead with marc lasry where does he see the best opportunities in the market right now . We will find out heres what else is coming up on the Halftime Report. Lyft shares plunging 40 i said its ipo but jpmorgan now naming it a top pick well debate whether its good for your portfolio in call of the day. And we want to hear from you the Investment Committee will be answering your questions to reach us, go to cnbc. Com halftime or tet uwes. The Halftime Report is back in two minutes. Sometimes, the pressures of todays world can make it tough to take care of yourself. But natures bounty has innovative ways to help you maintain balance and help keep you active and wellrested. Because hey, tomorrows coming up fast. Natures bounty. Because youre better off healthy. Or trips to mars. No commission. Delivery drones, or the latest phones. No commission. No matter what you trade, at fidelity youll pay no commission for online u. S. Equity trades. Im sue herera heres your cnbc nauz update roger stone has been found guilty on all counts of obstruction of justice, witness tampering. Sentencing is set for february 6th. Stone faces up to 20 years in prison President Trump will play host at one of his properties after all. Winter meetings for the Republican National committee will be held at Trump National doral in florida the president had canceled the g7 summit at the resort after he came under fire by lawmakers and others ford is issuing a recall on one of its best selling vehicles the automaker is recalling 2019 and 2020 f150 pickup trucks it says they may have an improperly secured part that will hinder braking. And Myles Garrett has been suspended without pay indefinitely and at least for the rest of the season this for fighting with Pittsburgh Steelers quarterback Mason Rudolph near the end of the thursday night nfl Football Game garrett ripped rudolphs helmet off and hit him on the head with it the steelers and the browns teams were each fined 250,000 tlrs you are uptodate thats the news update back to you. Okay. Sue, thank you i want to ask you. Youre a sports owner. What do you do when one of your players does Something Like that i would suspend him immediately. Its not even within the realm of what people should be allowed to do. So i just think its absolutely wrong. You dont even wait for the league to jump in in. No, i wouldnt even bother waiting for the League League get it right so far . I think what the league is doing is saying we dont know what to do so were going to suspend you indefinitely it gives them the option so but i actually think thats probably the right decision. I just wanted your take since we just watched that phil lebeau has an update on united airlines. As expected, united joining american and southwest in pulling the 737 max from its schedule to early march. So united is now saying that it planning on bringing the max back on march 4th. They also have a number of other maxes that had been scheduled to take delivery of those likely pushed out to next year right now when youre looking a the airlines, i know it says january 16 for american. Again, its march 4th, march 5th, march 7th thats when the three u. S. Carriers are expecting to bring the 737 max back into their schedules. Something tells me we might have to remake that wall a few times just based on where weve gone on this when we call it in, my producer calls it into our team that does the wall theyre like, okay, what day here its constantly changing so we shouldnt be surprised. Were making light of it, but we shouldnt be surprised if we do have to change it again . That one would come as a surprise because i think everybody realizes they see light at the end of the tunnel its not a slam dunk that this plane is certified by the faa next month as boeing is expecting. But were seeing all of the indications that were getting close to the faa saying, okay. Were almost ready to sign off on this plane. Got you all right. Thank you. Thats phil lebeau in chicago. Now to ylan mui on capitol hill day two of impeachment hearings. The ranking republican david nunes now has 45 minutes to question the witness marie yovanovitch, the former u. S. Ambassador to ukraine. The most dramatic moment so far came when the democratic chairman of the Committee Adam Schiff questioned her about this tweet that President Trump wrote thorpg this morning. He wrote, wherever yovanovitch goes turns bad stiened to intimidate, is it not . I mean, i cant speak to what the president is trying to do. But i think the effect is be intimidating well, i want to let you know that some of us here take witness intimidation very, very seriously. Now, the president has been very active on twitter today including pointing out that the stock market so far has not been impacted by the impeachment investigation. But scott, we do expect to hear from the president later on this afternoon and i expect he has a lot to say back over to you im sure we will. Thank you. Jpmorgan is out today with a bullish call on lyft in fact, they call the stock a top pick noting significantly improved revenue on earnings as well as market share for the ride hailing business. Josh, i turn to you for obvious reasons, i suppose you did at one point own uber. Are the prospects for these in tandem Getting Better . I think the prospects for the stock may improve, but i dont know that the prospects for the business so i think for technical reasons when you have a stock this despisedthats been this heavily shorted thats not an s p 500 constituent, these are the types of stocks that if you can generate a return here as a fund, its pure alpha. Its very big, its very liquid. You could put on a decent size position to make money here. That might be enough to spark a rally in the stock whether or not theres any improvement in the business, turning to the business, i really dont understand why anyone is excited about a taxi and Limousine Service on the publicly traded stock market i honestly dont so its not growing fast its maybe growing where the valuation is put that aside, stocks move in Mysterious Ways and you could see some of these things that have been thrown out toward the end of the year when the tax selling is over. Put on a decent move so jpmorgan might be right on the shares for reasons other than what theyre saying in the report top pick . Well, a top pick means you have to be a contrarian and youre going to get a lot of these. So this specific analyst, you have to believe facebook, amazon, netflix, the stocks not making new alltime highs. Those are the stocks youre going to grab onto for 2020 and believe it as far as the business, i agree with josh. Were having a conversation about income inequality. Lyft sits right in the middle of that conversation. Are they contractors are they employees theres the potential that these companies, these Ride Sharing Companies will be regulated at some point from the business model, no, i dont want it. Im thinking as were having this conversation about the reckoning thats taken place with some of these high flying high fwroet technology stocks, the wework and the like, i think about it in erm thes terms of wo in these businesses. Whap do you make of the reckoning that weve seen . Are you a bondholder of we, work not yet i think its great i need issues. A i need a lot of issues but you dont want to be under water. Correct but we havent bought it so were going to wait until theres issues i dont mean you dont. But bondholders in general dont want to be under water thats true i think part of it the only reason theyre going to end up being under water is ultimately as that equity value goes down right . If all of a sudden it drops by 40 , your bonz are going to drop a little bit because people are nervous about the business for what were doing today, i think its a wait and see. You answered that question interestingly. You said not yet tell me more you looking at it . Wework . Yeah, we are were trying to understand where you are in the capital structure under the new deal so is the half a billion of debt thats outstanding the problem with it is debt can come on top of you if that enz up happening, all of a sudden where you were the senior unsecured holder, youll have a couple billion ahead of you. And therefore, i think thats when youre going to have issues so a lot of it is really on the covenants youll have. I believe you said you thought debt holders and equity holders were going to get no, i didnt. I think the risk is to the equity holder. Id much rather be the debt holder because theres definitely a brand there. Theres definitely a business there. Its clearly not right sized you said the other day there wasnt the business. I think those were the exact words you used my personal opinion is all these leases theyve signed and they signed hundreds of them, i think what ends up happening is the landlord will say if we dont get paid, we dont need them as a ten napt all of a sudden you see companies decide theyre also in the coworking space. So if i had to be anybody many the equation and i dont want to be anyone, i would probably want to be on the debt side is softbank standing behind this debt what protections would you have going into this . I think you know yet. And i think youre dead right. The company lost like 2 billion. Theyre not good at it. So if youre losing billions of tlardollars, how are you turg this thing around . And is there a path to profitability . If there isnt, then everythings going to lose youre not interested in climbing on a sinking ship no. I try to get off and wave. 80 cents on the dollar now . Yeah. If youre right, youre going to make a 35 return. So until we understand exactly whats going on, the better part of valor is just waiting marc, looking for opportunity in credit, you mentioned 2020 is going to be a year of credit you did an unbelievable job in 2016 as it relates to Energy Credit now were coming into a year where youre going to have a significant amount of debt maturing are you going to find the same opportunity you did in 16 in 20 in the energy debt i think theres a huge amount of opportunity because you can find them at 2 of cash flow today the reason you can is because the market is saying i want nothing to do with energy. I dont care how cheap it is i think its just its going to get lower and lower so i think the challenge in 2020 is youre going to have a number of these opportunities who are going to be the winners. Right . Because youre going to have a number of these companies that are going to do well but youre still going to have a lot who are still going to have issues so i think next year at this time well all be talking about the ones that worked out and the ones that didnt but youre absolutely correct. It is shocking how much valuations have dropped in that whole market whats been your most if you can tell us or are willing to, your most profitable investment this year theres been a number i mean, i think its a lot of them have really been on the private side so where weve made money is where weve come in and lent people money and at the same time weve ended up getting warrants in that company. So we did a dmeel ieal in indona where we ended up doing 20 . We ended up getting paid and getting 25 of the company its a company thats worth, you know, today i think its worth between 150 on up. And youve got this 25 of this company. So what enz up happening in a lot of these situations is, you know, for us on the debt side, youre really around 60, 70 cents. In some of these situations, sometimes were able to get warrant. Its happening much more in europe it doesnt really happen here in the United States. Here the markets are too liquid. Its hard for us to do Something Like that. Where were making quite a bit of money is going to be much more in europe and much more in asia and i think the last time you were here you mentioned the lending you were doing i believe in china yeah. So its been in well lend people money in china. You know, theres a company that weve ended up investing thats going public i think next week theyre one of the largest Debt Collection companies in china. That company itself has seen growth of 100 theres Huge Companies that you can do extremely well where youll lend money and youll get warrants when you come into a company, its more than just money. Because the world is a wash in money. Yes you also bring, like, a reputation that i think in the market probably carries some sort of a halo effect. Almost like if you can get 100 million from anyone but you get it from marc lasry, its worth more than just the hundred million you can find from anyone else do you take advantage of that . We try. We actually do, yes. I think you absolutely take advantage of that. Because youre going to say, look were going to use our reputation to help you us putting money here is beneficial its like blackstone doing it. Any of these other firms thats why you get the warrants thats exactly why, yes you had an interesting quote in a story i read. I think it plays into this conversation i wanted you to expand on it theres a fear of governments and a fear of institutions theres been a paradigm shift. In terms of talking about lending. What do you mean what i mean by that is if you think about it ten years ago, no one had a problem going to a bank to borrow money i mean, you actually had no issues you thought that was the way to do it. Today what youre seeing outside of the United States is theres this whole shadow Banking Network thats come up and people had raised huge amounts of money where were able to lend money and youre able to charge more for that and the reason for it is because youve got right now individuals and Even Companies who are saying i dont want to deal with a bank i dont want to deal with the government knowing more of what im doing. So im going to deal with you having capital or black stone or with the gso group its better for us to be dealing with a private lender than it is to be dealing with government institutions and thats a paradigm shift. Has that gotten too big last week it emerged that kkr is considering the largest leverage buyout in the history of the earth. 53 billion for walgreens boots. Is that a concern to you as somebody making investments in the same realm and is in that private Equity Hedge Fund world of credit . The last tomb we saw something this big is 45 billion for txu in 2007. When you see echoes of that, has the world changed enough where its not a sign post or do you say maybe we should pull the reins back i think what youve got is because of negative interest rates. Liquidity banks yeah banks are lending. They want to do bigger and bigger deals because those are going to get approved. So im not worried about those as much. I think a lot of it is just because of where rates are so people are able to borrow more i think for us its hard to play in that space, because youre not you know, youre not getting paid for that. So we can only play in a space where people have issues and if youve got issues, then youll end up paying 10 or 15 . But in a walgreens, you know, in any of these types of situations, its not for us. And i think youre going to see private equity doing more and more of these deals. There is so much capital in private equity right now bubble . I dont know if its a bubble, but youve got i think the unfunded amount that private equity has is around a trillion dollars so theyve got to put that money to work. And banks are willing to lend to that look, are they going to keep on generating 15 to 20 returns . No but will they beat i think the Public Markets i think they will. You know, so therefore if youre an investor, youre going to end up doing that. Thats why the deals are getting bigger though. Thats also why theres people like kkr. I agree with that 2007 was a different environment. There was less liquidity it was a tightening environment. I agree with marc. Youre going to see more deals like walgreens but thats why you own some private equity publicly traded stocks if i could get more exposure, i would. Youll also see a push in the private equity market to securitize components and make them like wine, like art, like earnings theres a push for that because theres so much money there and the lack of return on Global Investment okay. Were going to take another quick break. Marc lasry at the desk ready to answer your questions. Were back in two minutes. As a principal i can tell you this. When one student gets left behind, we all get left behind. This is a problem that affects each and every one of us. Together with ibm, we created a whole new kind of School Called ptech. Within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. You know whats going up today . My poster. Today, there are more than a hundred thousand ptech students around the world. Its a game changer. Nongmo, made with naturally sundown vitamins are all sourced colors and flavors and are gluten dairy free. Theyre all clean. All the time. Even if sometimes were not. Sundown vitamins. All clean. All the time. Were answering your questions first up marc lasry. Okay. Josh in canada. I dont know why were asking you this but what are your thoughts on the recent retail numbers . In canada. Really . You have a pass on that yeah. Can i can i call a lifeline yeah, you can you can phone a friend. Can i phone a friend . Brenda. Well, didnt you invest in retail debt . Yeah, weve done Neiman Marcus weve done jc penny. We bought the bank debt of jc penny. I think they announced good numbers. But right now, for us were really focused at the top of the structure. Id be nervous of investing in equities. Okay. Well, you handled that well. It was a team effort. Team effort thank you. You pivoted well all right. Up next, joe from andy in georgia. Alltime high great midcap equity name. They just expanded the partnership with geico beyond texas. That is incredible and again, remember this is salvaged vehicles. Okay. Josh, canopy grove phil in oregon. Yeah. Terrible stock i bought a very small amount over the summer. I regretted it almost immediately. Now, i regret not having sold any. I might end up using it as a tax loss at some point between now and the end of the year. I have no opinion on it. These like every publiclytraded marijuana company, they way over estimated what the demand would be turns out people dont smoke that much weed theyre not eating an edible every day and the whole total Addressable Market thing is thrown out the window. So what you have is basically poorlyrun Companies Held by Fund Managers who are having money pulled away from them and they just go down every day. So i would not recommend going in and buying the dip on these stocks or anything like that. How do you really feel . Well, i have to be a little bit political because we know some people that raised etfs that are focused on this sector. Ill just say its a toxic sector and maybe that changes next year. But its its not going well for any of the stocks that are trading in either canada or the u. S. Was that political . Yeah. I think you probably need to take a hit oafter listening to him about this. At some point, these Companies Might at some point at some point, the expectations may get too hes still going. Too low and they may turn. But thats not the case right now. Jim, Marathon Petroleum from john in michigan. You still have the best of both worlds. All right. This is a company that generates a lot of cash flow and buys back shares you should own this. Brenda, daniel in new jersey wants to know about j j. Yeah. This stock is really a good fundamental story that has been masked by all of the Headline News so if you look beneath the surface, youll find that this Company Really has some great things going on. Particularly, on the oncology side company just recently raised guidance for organic growth looking for 4 1 2 to 5 . So i think its a good solid story. You just have to get beyond the kay. S. O well take a quick break well come back. Well do final trades next do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Thats what happens in golf nothiand in life. Ily. Im very fortunate i can lean on people, and that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. So why isnt it all about you when it comes to your money . So. Whats on your mind . We are a 97yearold firm built for right now. Edward jones. Its time for investing to feel individual. High protein. Low sugar. Tastes great high protein. Low sugar. So good high protein. Low sugar. Mmmm, birthday cake pure protein. The best combination for every fitness routine. Welcome back want to remind you once again that lloyd, the senior chief and former ceo of Goldman Sachs joins me exclusively on tuesday for a live interview obviously, lot to talk with lloyd about, including the fact that he was also in that new advertisement from Elizabeth Warren so well go there. Well go everywhere else, too, with mr. Blankfein lets get some final thoughts from our guests today. Marc lasry, leave our viewers with a thought about the market. Sure. I think the market, we talked about i think is fine. I think if youre looking for tun opportunities, you want to try to get into hard assets that today, like on the aviation sector, you can come in. You can end up getting paid somewhere around for 1012 . Try to find funds that are doing that anything that where theres a direct lending type of situation, private lending, where youve got covenants, youve got specific covenants, as opposed to the highyield market where theres no covenants, my advice to everybody out there would be try to get covenants and today youre getting somewhere around 1012 and youd be thrilled if that was your equity investment. If that was your debt investment so making 10 in a zero rate environment is actually really good. Cool. Good to see you again. Thank you for spending the hour with us. It was a pleasure. Marc lasry joining us once again. We have about a minute left. Brenda, why dont you start off with final trades . So this is a high Quality Company with a lot of diversity in the Healthcare Industry i think they should really begin to benefit in the First Quarter of next year where their ge bio pharma acquisition closes. Josh brown, what do you have . Very quietly last week, alphabet made a new all time record high. Nobody talks about it. I like that. This week, probably close at a new high as well 25 times earnings with 110 billion in cash. Id be a buyer right now. Farmer jim. Scotty, josh was earlier talking about psychotropic drugs. My psychotropic drug is roku the momentums here. Were not going to talk about valuation because you cant. Its momentum. Enjoy it, folks. There it is another 6 unbelievable. Its a bad habit i have. Stock of the year you can make the case i mean, lets talk at the end of the year still some time to go. Fair point. Joe, medical devices seems strong inflows perk and elmer good stuff dow closing in on 28k. That does it for us. The exchange starts now. Thanks scott and welcome everybody on this friday im in today for kelly evans here is what is ahead. Just one hour from now, the president expected to release a new blueprint for making healthcare pricing more open and transparent. Could have a big impact on drug companies, hospitals, and more and a bullish yet very familiar trade headline sending stocks to alltime highs today do the internals in the economy justify these levels, though plus, one firm says lyft gets no respect from investors and taylor swifts bad blood with her old