Tens of billions of dollars. You said thats it thats the top of tech the nasdaq was 4400 that week uber High Valuation Companies and use that as your justification to reposition your portfolio. Im not fan of it. Doesnt really work. It makes for better tv than it does for portfolio you dont take a step back and say its 100 times sales this thing has an incredible first day and you dont take a pause. Its not the whole landscape and say i dont think this is good weve seen a million kpaemexs of this. Its not in the s p 500. Investors dont own this in their 401 k its not an important stock. Its a great stock to watch fp lets address it in those terms. Now the stock is getting crowbared. Kramer makes a point. We have this tweet he had on nvidia as well and zoom. It underscores, if you will, i think, very well the landscape and what may be a pull back in some of these loved names especially over the last few months for what its worth, i dont know what octa does. I think that is indicative too they are trading at tiny valuations and cash flows. Guess whats up on my screen today. Centurylink is up. Verizon is up. Those kinds of companies are up. That maerpts i dont think its just the snow flake thing. I do think that the party lasted a little too long and valuations expanded a little too much things got too crazy now were seeing a reconciliation of that its healthy its great lets look at whether a docusign stayed at the party too long the stock is up 158 year to date. That list is long and distinguished. It does raise some sort of signal of how far we have come in those names i would agree with you. I would say the name were talking about here, crowd strike can go through, all these names that have flown to the upside and its been a magnificent thing to watch it gives you a good representation of why we should be putting ourselves more on the trading side of some of these rather than the ownership side of some of these names the reason i say that is you could get slammed on the ownership side that side of it really is and can be very brutal not just a 3 move here and there but off of those highs 3 , 5 , 8 of those moves to the down side are going to be very, very painful for people if that continues. The great thing about the derivatives world and we had these record numbers and talk about it each and every day, 30 million contracts per day in 2020 this is an unbelievable number the reason for that is because of the fact that we have the opportunity, volatility has come down to some extent, at least in the Bigger Picture of the vxx and so forth i think these names can be traded i dont know that you dont want to be owning a lot of these names when they are up there spot on they dont have earnings in so many different cases. I love what you just said you completely set us up for where i wanted to go next. That is a view that investors need to have when it comes to stocks like snow flake and soom of t some of the others think about how investors should think about they risk tolerance. Well talk about it on the other side you really need to take a much longer term perspective and be willing to tolerate draw downs in the stock if youre not willing to tolerate that then you shouldnt be investing in growth companies. Michael, you always talk about longer term horizons its the way i think you think and your clients think about inve investing. Does this mean we need to even open our eyes and minds wider and be willing to sit longer than maybe we thought we had to in first place theres so few inefficiencies that you can exploit anymore as an investor. Information is instantaneous and everybody has access y its inefficiency of time. Its not my approach i dont know how to invest or trade or do those things thank god for john and pete because i couldnt get through without their advice on this longer term, i need company that will make money. I need to own a company that doesnt have too much debt i saw the froth yesterday in snow flake i was reminded of some of those stocks in 1999 that were here one day, gone the other. They didnt have any earnings and couldnt keep it up. One of those companies, though, back in the late 90s was amazon its not my kind of company. I am going to stick with those companies that do have earnings, Balance Sheets and products. Snow flake in this cloud sfas is in the hot sector. Theres still no there there you might make a ton of money. I cant do there but not for now. I think you have to be cautious and look for the long term josh, its a good conversation in market psycholo psychology it can also be the most worry many at the same time. Do you think the nasdaq is vulnerable today and do you think well look back at a snow flake and say, its always hard to call the moment as you said but well look back and say that was certainly if not it, close to it. Ill it will you what i think maybe one of the other things may be but lets address this first. I called it a spectacle and i agree with that. Wall street look at the reception that a stock like snow flake gets and they say guy, lets go whatever they have to bring public, they will throw it at us now. That supply will drag down multiples by virtue of the fact at a certain point they will put enough ipo and secondary supply out there to sop up a lot of liquidity thats chasing the stuff. I 100 agree most ipos are small floats which means wild trading i agree with that. Snow flake could be profitable tomorrow if they decided that was important. Its not important they are in the nascent stages of what could be tam of 100 billion a year in annual spending why would they be why on earth would a business person who owns that business say the most important thing now is 20 Profit Margins its not its a land grab its market share. They are positioning themselves to win theres a phase where you spent money to get big and theres a phase where the spending slows down, you flip the switch and the cash flow explodes if youre an investor in snowflake youre not like i hope the company can generate mid single earnings. Will they be right im not in it. I think its 100 times sales is a little too rich for my blood i dont like that were throwing in Companies Like crowd strike with what we saw yesterday just because they happen to be four letter tickers, trade on the nasdaq and be talked about by traders maybe you know the answer to this question because i honestly just dont im going to ask you and do you know what crowd strike trades at in terms of what the multiple is times sales. They are like negative 3 there are or something, right . I dont know. Its over 20 times sales. Here is what you have to understand i couldnt tell you off hand exactly youre like, im going to put my sprinting shoes on and reall get out of here. Whats the sales growth and the prospects for profitability and do you to brads point, do you have a time horizon in which this company could grow into those multiples and some people dont they are kidding themselves and paying any price in the case of crowd strike, this company is going literally going to be the sales force of siebCyber Security they are taking share from every one. They have 7200 corporate custome customers. They have 49 of the fortune 100. This is not 1999 were talking about now are companies that have been shepherded through the process with the understanding that there will be a time to reap the harvest of profits now is the time to grow. If youre not into that, dont buy it there were still Real Companies though, josh, that got chopped at the knees in 99 and have they ever made it back . The answer is they have made it back. Can i Say Something here . Jenny, go ahead i was in the heart of this in 99. I was at goldman sachs. I was on the trading desk then in internal trading group. I saw that deal pipeline dry up. Josh says two really interest things here that are really important which is one, its all about growing market share right now. Also that people are willing to pay any price. That is not different than 99 what we need to remember here is that all these companies that have negative earnings, are all trying to grow market share. They are theyre not all going to be existing because many of them will ultimately compete versus each other things like microsoft will start to get into the docusign space there are echoes that are quite strong to 99. They are booking on their growth right now in terps ms of clients. They are not going to exist. Its not only about market share. You p know they were like 200 of them then and 5 or 10 of them still survivor and thrive now. There arent going to be 200 that thrive in ten years from now. Some of those Companies Got cut off at the knees its a huge line up. As an investor, they shouldnt be trying to have earnings on the bottom line right now. This is the land grab. This is when they grow this is how they do it. Im not calling anything in terms of whether it is a sign or it isnt a sign. You take note when you have a deal going on and we have a wall that shows you the famous names in it. People have a spak whether we look back and say that was a sign of something. Reduce waitings in tech. We have been overweight tech for in years they are talking software specifically because its topical via snowflake. Been our largest overweight for the last decade. Now they are lowering their weights of software for strong overweight to overweight of course they still like it maybe not add much given what were talking about. Jonath jonathan, technician closely followed by a lot of people on wall street and on this show often. We continue to think risk is lower in nasdaq megacap growth what do you think . I have names for 15 or 20 years. I have other names i traded on daily or hourly basis. You have to know who you are and what you do best the reality is that a lot of these Companies Continue to invest in the future and the problem is that while they are doing that as brad points out, y youve got to have tolerance, youll have to have the tolerance that is willing to say i could lose 40 or up to 50 of my investment at my moment in time because of the fact of the risk and the volatility thats involved in some of these names. I think for my per spefct ef yo have to look and say this is my bundle, my hybrid model and this is the side with the stock with the stock side its almost a 50 50 split for me twr you will not find when you look through my list of stocks that i own very high p es of any of these names. They have great management they have great fundamentals they are going to probably grow much slower but im going to sell options against these every time i get the opportunity to do so im going to trade options in all of these high flyers judge, you could have built a portfolio at any time over the last ten years where the predilection was low p es and w you would have substantially underperformed the market and built a portfolio of value energy stock and buy the names with dividends and looking at anywhere from 50 to 70 losses on those inexpensive or fairly priced value stocks. These are not the metrics that determine the outcome for stock prices i know in a perfect worl they would and every one wants to buy something at a 10 p e and have the company grow earnings 10 a year and have the stock double it would be great if thats whats happening thats literally not whats happening and some of the cheapest areas of the market over the last few years have been in areas where laden with e traps. We can go on and on. I dont think its as black as white as its a good valuvaluatn its not. Also. Jenny, sorry. Ill let you get in on the conversation i want to bring in our next guest as i tell you about pulling down the rating on tech and software. Thanks the one of our viewers for sending this in. I hope youve heard our conversation to this point it is one of stocks that youre added to tell us why and how you view everything right now in tech through the prism in which youre viewing it. Thanks, scott great to be back in technology, its had a pretty incredible run we have seen multiple expansion across the space its instructive to look underneath the hood to see what the drivers are. There is some reason for that. If you look at tech has been positive earnings particularly in a megacap growth names. Its been exacerbated by Strategy Bank liquidity thats pushed investment dollars toward higher risk assets weve got this chasm between wall street and main street thats existed for some time. To the extent that one sort of believes in version to the mean, it kind of puts things into perspective. I dont think we will realize the magnitude of downside. Unless theres some event but in terps of where we are and where we have been positioning, we have been buying but selectively buying. We have been constructive on a crowd strike, buying the dips. We have been keen on a couple of value names. They have been focusing on areas where they are number one or number two particularly Cloud Data Center networking, 5g wireless where apple is their largest customer, storage and Mission Critical software they are made a purchase in semantic on the Cyber Security side they have been executing well. We have talked about the wireless side. Its also increasing content, chip content as well im thinking youre supposed to join us for a few minutes stick around with us till the end of show. I want to take a quick break well come back. Jenny, ill let you make your point. Well hear from the gang as well about a mystery chart as well. The stock is up 35 in six months it just got a bullish call well debate that, next. A reminder you can watch or listen to us were back after this. Our Retirement Plan with voya gives us confidence. Yeah, they help us with achievable steps along the way. So we can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Oooh, well. Im good at my condo. Oh. I love her condo. Nana throws the best parties. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Welcome back here is your cnbc news update. New york state is filing civil insurance frauds charges against johnson and johnson. Accusing it of down playing the risks of addiction in opiod marketing materials targeting elderly patients its latest in a series of actions against several pharmaceutical companies j and j tells us its markets wa appropriate and responsible. It may have all of its employees. Perhaps 60 to 70 will eventually return with a rotation system. You can go to cnbc. Com to see why he thinks that would be good for firm theyre back in the office at the uk film set of the batman starting Robert Pattison theres controversy for disneys new mulan movie theres no sound of opposition as the film quietly opened in that city. Scott, back to you jethro said Something Interesting and we had not gotten to it yet fedraising rates from here to eternity. In a world of low growth, in a world of low rates for the longest period of time than anybody can imagine, this is what you get where else will you pay up to get growth in this environment is that right or wrong its exactly right and the ability of company to fund itself and grow into a massive behemoth and take on a entire industry of incumbents is a direct response to the fact that money has become very cheap. Intel is up 45 over the next five years nvidia is up 2000 over the next five years why . The starting level of a p e ratio is not what matters in the current environment were in if Jerome Powell like a groundhog just came out of his hole and said, three more years of relentlessfunding of Growth Business models, well, do you want to be in a Disruptive Company and i can give you million of examples. September of 2008, Blockbuster Video was trading four times earnings netflix was trading 13 times blockbuster was a third of the valuation. Just say the most expensive stocks will have the worst returns and the cheapest stocks will do the best we know thats now how it works. I works sometimes. In tech, almost never. Its one of the reasons why tom low has dont fight the fed. Dont fight the fed as the reason why he thinks stocks can go up and a lot in all caps. Other areas beyond tech that have thad a nice little run here youre adding more to materials. Tell us. Yeah, the reality is, scott, when youre talking about that, i think its important to say its not necessarily people selg out of tech. We talk about how much money has been sitting inting on the side. It could be the money from the sidelines given Jerome Powell has the place to make money will be in the stock market i think thats part of what were see going on here too. The material space is absolutely gotten bigger and faster and im seeing more and more basactiviti there whether its freeport or we see china with demand for iron ore and steel thats moving that market as well ive got about six or eight different areas of that entire material space freeport. Building upon what were seeing across the board. We continue to see very, very large option paper in a lot of these various names. Do i think they are done running to the upside, i dont i still think theres plenty of upside for a lot of these different areas of the marketplace. Terms being one of them. The other one thats been on fire for the mother part that doesnt get talked enough about is bio tech which continues to have good days even when the markets often times has bad days im still looking at, i think there are certain names out there right now that still have plenty of upside in areas that maybe had lagged your view matches that as well this tale of two city, if you will the tale of two markets that we need to talk more about. You have like value in terms of just the multiple and you have value in terms of the philosophy saying some things are trading at a lower price where they deserve to be traded at you have growth which sgrois gr. Thats where the markets gotten all messed up. What we have seen in terms odd broadening, this interesting, i look at the whole s p 500. The companies that were up over 30 year to date, up until the market peaked a week and change ago on september 27bd, those guys are actually down 5 and change percent the companies that were down 30 or more are up 2. 5 . Were seeing that gap between growth, value have, have notes were seeing that narrow which means the expansion of stock s bro broadening if we look at one year from today, i bet you intel share price and ill happily pay if i lose but ill win. Im willing to pay 12 times earnings for that. If i can get it at eight, all other people will pay 12 two theres been a lot of Earnings Growth thats lowing. I dont know what ive got im not going to get the cash flow to pay you back for that. Do we have a burger bet or what . Ill make the bet but over a one years period she could be right. I want point out not only did intel so substantially underperform that on a price chart, you cant see the two stocks together but well put that aside thats the past. Intels multiple also shrunk by 36 in that five year period this is a stock that went from 15 times earnings to nine times earnings not only depends on the time period. With the execution fumbles. Go heres the thing. The last time i own intel, i think i bought it in february of 2009 the point is, from this point forward, there could be a lot of growth not in earnings but growth will be modest. Its not gone. I think thats where the reconciliation will start to show up in these little conversations, nvidia versus intel. I would never say thats not possible its really the conversation. Whether we truly are broadening out, whether its lasting and what you think it means. Just getting topical. You get these growth to value rotations. It can be a powerful trade although, inspite of that the multiyear trend has not been broken in any sustainable way. You look at the trend over the last nine or ten years its been a down trend growth versus value or growth is like crushed value were watching this lohclosely. Looking for a sustainable break out. Well talk to you soon thank you. We still have a lot more to do pete has his unusual activity for us today i want to show you the s p sectors now as well. Materials and industrials. Nice little goe of of it just underscores these two sectors have done well theres technology in the middle rba aerhinse. The dowid wee ckft ts. Machin xus es. Every curve, every innovation, every feeling. A product of mastery. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. Good morning, mr. Sun. Good morning, blair. [ chuckles ] whoo. Im gonna grow big and strong. Yes, you are. Im gonna get this place all clean. Ill give you a hand. And im gonna put lisa on crutches wait, what . Said shes gonna need crutches. She fell pretty hard. You might want to clean that up, girl. Excuse us. When owning a Small Business gets real, progressive helps protect what you built with customizable coverage. And im gonna eh, eh, eh. Donny, no. Oh. Were back on unusual activity time. Amd. Pete, what do you see . This stock had great run in august where it went from 77 to 90 and pulled back toward the 77 and below that number. Today were seeing some aggress ifr b aggressive buying. Making a bet that maybe were going to get a bit of a bounce today, were seeing bit more on the drag side of it as we get into the deeper part of the afternoon. That is something thatpeople are betting on i bought these calls im going the take a shot and see what happens if r this stock in a very short period of time these expire tomorrow. I want people to fully understand that. Secondly i got bausch. Yesterday stock was trading about 16. 5 they had buyer of 8,000 of the october 18 calls today the stock is little bit higher trading around 17 when this hit they are buying the 17. 5 calls that expire tomorrow also. Those are very inexpensive they are about 20 cents. Looks like they have a good shot to make a move to the upside im in both of these names a little bit longer in the bausch but very aggressive buying in that name. Pete, i also notice its not relative to this segment per se but you have been adding the calls and applying materials too. Yeah. That was one i just yesterday. Im seeing some opportunities. We had a pretty decent pull back i dont know that its enough and whether or not these are going to be able to perform or not. I like what were seeing we have seen buyers and buyers recently on some of these pull the long run okay. God stuff. Thank y. Thank you for that reach out go to cnpc. Com halftime. Were back right after this. Its made for this guy a veteran who honorably served and its made for her shes serving now we made it for all branches and all ranks whether they served one tour or made a career of it. We also made usaa for military spouses and their kids usaa is easy to work with and can save you money on auto, home and renters insurance. Become a member today. Get an insurance quote at usaa. Com quote usaa. What youre made of were made for with the icon that does the same. The rx, crafted by lexus. Lease the 2020 rx 350 for 409 a month for 36 months. Experience amazing at your lexus dealer. If i could, baby id e how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Lets do socme of your questions now. I bought danaher it helped me with my worst skill set as an investor, when to sell its great question. It may be hardest thing to do. Whats your opinion . John, congratulations you bought a stock thats done very well. You can always consider trimming but i own danaher. I will continue to hold it they are consolidator in the Life Sciences space. They created ton value over the last 25 years. Its not cheap at 32 times next years estimates they are great i quiacquirer i could pair it back at some point in the future. Good company but not cheap josh, to you. What about uber . What should i do with it yeah, here is another one of these money losers if its bothering you now, you will really hate it when it breaks resistance at 40 and go straight to 50 this is the ultimate reopening play from my perspective ubers Business Needs that roping and will respond incredibly on a fundamental basis when we get closer im in it. Im sticking with it not to get hung up on se manics but when you say reopening is that same thing as vaccine or are we thing ago vaccine or two Different Things no, they need to uber needs the real thing they need people to get on planes to go on a business trip. They really need the reopening, but this company will still be a utility and i think its going to work. Pete, to you. Ibm has lange wished is it ready to move now . I think when you consider the redhat acquisition and how they can absolutely move that long, but with the 5 dividend yield, you sell calls against this position, this is a stock i think well worth owning. When we come back, well talk gold. The 23rd promises low rates forever, metal is up nearly 30 this year. Where do prices go from here jeff kilberg will tells you in ex in our futures segment. Some see a Grilled Cheese sandwich and ask, why . I see a new kitchen with a grill and ask, why not . I really need to start adding less to cart and more to savings. Sitting on this couch so long made me want to make some changes. Starting with this couch. Yeah, i need a house with a different view. And this is the bank that will help you do it all. Because at u. S. Bank, our people are dedicated to turning your new inspiration into your next pursuit. This was the theater i came to quite often. The support weve had over the last few months has been amazing. Its not just a work environment. Everyone here is family. If you are ready to open your heart and your home, check us out. We thought for sure that we were done. And this town said not today. Makes it beautiful. Stateoftheart Technology Makes it brilliant. The visionary lexus nx. Lease the 2020 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. Were back gold is lower, as i said jeff kilberg has the trade for us hey, jeff. Hey, judge, how are we doing . Pretty interesting reaction. Were seeing a countertrade theyre selling gold as youre seeing the equity markets have a bit of a temper tantrum. I want to be a buyer at 1935, looking for a move up to 1965, but be mindful i believe with the uncertainty on the horizon, ff will see buyers of gold je. Thank you well talk a quick break and come back with the final trade we got no free pass. Everything we have, weve earned. The unmistakable lexus is. Get zero percent financing on the 2020 is 300. Experience amazing at your lexus dealer. An extra 15 credit on car and motorcycle policies . Thats great thats 15 on top of what geico could already save you. So what are you waiting for . John stamos to knit you a scarf . All finished, jean. Enjoy thank you. I give. The stitch work is impeccable. Its just a double fleck pattern with a reverse garter stitch. No big deal. Is your hair this soft . Softer. Geico. Save an extra 15 when you switch by october 7th. Geico. I keep working my way back to you, babe with a happiness that died i let it get away servicenow. The smarter way to workflow. Every curve, every innovation, every feeling. A product of mastery. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. All right. Were back pete, before we go, i want to get another one of your call buys today las vegas sands. Sure, that one is pretty interesting, because of the fact its pulled back pretty dramatically recently. When we saw some call buying, it intrigued me i jumped on these. They went all the way out to november weve been talking short term. This is november this gives you more time i bought those 50 calls as well. Lets do final trades. Jenny, youre up first. Sure, chevron the share price isnt currently reflecting the stability in the oil prices with a 6. 6 dividend yield. Michael farr, good to see you, man what do you got for us good to see you, valmont. Josh brown . Bullish on uber and Jenny Harrington you better get that burger money ready, thats all im saying. And burgers pete. Im going for the one with the gold on the bun. Either way hes a winner, right . Im going to give you i think theres material space ready to the up side. Hes eating a burger, no matter what. Its whether hes buying it. Everybody, thanks for watching q. The exchange begins right now. Thank you, scott. Hi, everybody. Theyre taking the lead from technology with the nasdaq languishing down 10 from its highs. Can this new group keep the market going forward