Transcripts For CNBC Power Lunch 20131107

Were going to dig into that number. There is also evidence of a great rotation. The nasdaq falling today. The russell falling. Some say thats where rebalancing would begin. Older blue chip, oldschool names like dupont, ibm, ge may be the beneficiaries. And europe making a big move today. Cutting rates. But was it too late . And speaking of big moves, the fda officially proposes banning artificial transfats in foods like frozen pizza, cookies, crackers, refrigerated dough. Thats a food group unto itself. Frosting and coffee creamers. First, though, to sue. At the nyse. Hey, ty, its great to be here. Twitter, as you know, went public this morning. It went flawlessly. And im standing right here at the post where twitter now trades. And this is the guy, glen, come in here for one second. I know you dont have a mike. Glens the guy, the designated market maker. He opened the stock this morning. It was a flawless debut. Congratulations. Thank you. Were going to be all over twitter throughout this hour. But theres also another big story that were talking about. Ty mentioned it. Its that upside surprise. And it was a big one in gdp. Basically, its the best weve seen since the Third Quarter of 2012. And that was a big upside surprise. Were going to talk about that. Economists were looking for about 2 on the trading session. So ty, im going to send it back up to you. But that is one of the reasons that we saw the bond markets sell off this morning a little bit. Its come back now. But that number really blew everybody out of the water. It really did. We want to talk more now about gdp, europes surprises and your money. Michelle and steve are here. Lets start with that surprisingly robust gdp number. Take us below the headline. Okay. So where we have the strength was in housing, up 14 and change. We had strength in durable goods purchases by consumers. Where we didnt have strength, inventories. That was a big part of the reason. Thats why people are not that optimistic about this number. Two things. This was businesses restocking. Restocking. Rather than individual spendi spending. Consumer spending was a very weak 1. 5 . We put a lot of stuff on the shelves in the Third Quarter. The idea is they work it off in the fourth so dont order a whole lot of new stuff. Also concern about the government shutdown, how that may work its way through the numbers. A little bit of exuberance, but tempered exuberance on this number. How surprised were you . I was not surprised at all. Weve been talking for a week about a potential surprise. Im surprised this number was not higher. They tracked it at 2. 7 . I dont know why the consensus was so low. Lets talk about europe. Surprised everybody this morning. Mario draghi cut Interest Rates by a quarter point. Theyve been so unwilling to do this it seems for so long. He did it and the reason is because they have started to see signs of what we call disinflation, which means they still have inflation, but only a tiny bit. Its not enough. And theyre worried about deflati deflation. Thats when prices fall. What did they think was going to happen . The writing has been on the wall for this for a very long time. It strikes me that there really look at that. Thats showing inflation in the eurozone right now. Which direction is it going to go next month . Its like draghi is making Monetary Policy with his head in the ruins, really. The best way to put it, maybe. Theyre not looking forward. Theyre waiting for the number to hit them and then saying lets do pause. This has been the case throughout the financial crisis. The counter to that is europes got a lot of problems that cant be fixed with Monetary Policy. They have labor laws that are so restrictive. They have tons of things that they need to do, and easy money doesnt fix those. Some people would argue it actually makes them less likely to do them. I suppose some people would say that hes doing what bernanke did several years ago, cutting rates. Theyre going to do a lot of monetary stimulus. That may forestall deflation, but it hasnt certainly not this this country the connection between Economic Growth and those steps has been tempered at best. Lets be careful not to mix something up here. It may not be the fix as michelle just said, but i think getting Monetary Policy right is a necessary precondition for getting the economy right. Necessary but not sufficient. Necessary but not sufficient. Germany has been a stalwart yes. This is all germany, yes, absolutely. And they dont want they do not want inflation. They fear that. They dont want deflation either. They also do not seem to be following the same philosophy. So whats the impact on your money of all this . I think that europe is good for growth here in the u. S. In part because i think that the euro has gotten to be too strong, and i think having a strong european economy, something that will help, if we can get europe and japan going at the same time, thats going to be helpful, i think. The Economic Data has been okay. Final thoughts . Certainly for stock assets, assets looic that, for equities. Four Central Banks in the world, easy. Yeah. Dont fight it. Right. Dont fight the fed wherever they are. Folks, thanks. Lets go to dominic chu with a market update. Or how to play it. One Place Investors are looking for this easy money trade is in those dividend stocks. Companies with relatively attractive yields can give the opportunity to be in stocks but get paid a regular dividend or income check as well. So i spoke to Edge Asset Management president jill cuniff about this subject. Her firm manages around 25 billion in assets and specializes in this kind of investing. Among her best idea are stocks like Farm Equipment maker deere, yielding around 2. 5 , and the company has grown the dividend by 13 a year for the past five years. Deeres fallen out of favor because of crop prices, but the longer Global Growth story is perhaps impact. She also likes abbott labs which yields around 2. 3 , just raising its dividend by 57 . She likes its prospects in segments like nutritionals and diagnostics. And how about some fun in games to cap things off . Hasbro, another one of her top picks, yielding over 3 . Its grown its dev dend by ivide. Back over to you. Thank you very much, dom. Twitter, of course, is the big story down here at the nyse. However, the bigger tech story is up at the nasdaq. The composite right now is down sharply. Most of the major tech stocks in selloff mode. Sheila is following that story for us. Up to you. Hey there, sue. Nasdaq getting smacked around a little bit today. Both the nasdaq composite and the 100 down by more than a percent. Heres the thing. Its really a broad selloff. In fact, about 90 of the nasdaq 100 is in the red. Lots of different pockets of weakness we are seeing. On the one hand, you have weak earnings from Companies Like qualcomm and also whole foods weighing down on the index. Also, despite all the enthusiasm around social media and the twitter ipo, not so much for other social media names like facebook, zynga. Also google, microsoft and cisco, finally seeing a selloff. The momentum names, all the names that took up the nasdaq like Green Mountain and netflix, those stocks taking a hit today. Some traders saying there might be repositioning happening. Basically traders want to be light on their feet if this bull run is going to come to an end, sue. Thank you so much, sheila. Im here with kenny and bob to talk about twitter, the markets, rotation in this market. But you need to start with something on the otc market. Yeah. The otc markets are the pink sheets. They are essentially unregistered securities. The quote system for the pink sheets for otc markets has been down all day. Ive contacted representatives to get some information. Were waiting to hear back from them. But again, this is not an exchange, the pink sheets. Exactly. You know about this. This is the unregistered part of the market. Trading in unrecommendinger is it unregistered securities. Kenny, we were talking during the break at the top of the hour about the fact that the market feels a little frothy at some point. Were seeing the rotation from certain stocks into other stocks, which we expected. Right. But it makes sense because when you see the russell coming under weakness, small cap names which lead when the economys doing better. In the sense when people start to get nervous, you see money coming out of those names because theyll tend to get hit the hardest if the markets start to turn. And that money going into the safety trade. The dow stocks, tyler said, the ges. The proctor gamble, americana names, names that people feel comfortable. I do want to fogt, we saw the internet names, the big momentum names yesterday and today. Even today, consumer discretionaries have been on the weak side. So staples is down, ralph lauren. What worries me is we are starting to see investors, the retail investor, take their money out of the bond fund and put it into equities. After the market has run almost 24 . That worries me. So how do they put in protection . Maybe a short etf . You can do that. My overall advice is that if youre in the market for the long term, then stop worrying about whether the next two or three months, baby boomers and im a baby boomer right now are underinvested in their retirement and the stock market, and i think people need to look at that longer term. Baby boomers today, average age, 57, 58. Theyre going to live another 25 years. They dont need to be worried about what the markets going to be doing in the next two to three months. You need to stick with a plan, but there are ways to protect your portfolio, too. You can. One of them, as you said, if you want to take some protection on the short side, the broader market, but maintain your long position, if thats one way. The other way is take advantage of the weakness. Listen, im a baby boomer, too. A little younger than you. Only 52. Ive got a little more time. Thank you, i appreciate it. I was having a really good day until you came on. Thank you very much. But i think youre right. Ill leave now. I think youre right, they need to stick with the plan. Dont worry about what the markets going to do in the next two months. Have the longer version. What i have a hard time with, people who are long bonds and underinvested in stocks. 70 in bonds. 30 in stocks. The way some 60yearolds have. I need to turn you to twitter. You did a great job this morning, bob. The offer went flawlessly basically, but you make the point that this is good for investor psychology because of the transparency. Its not just good for the nyse that it went well. Congrats to the nyse. There has not been a lot of emotional involvement invested in the stork marngt. Yet the public doesnt seem to care about that fact. Perhaps this will get them more interested and involved. Im not even talking about whether its worth that much. By the way, its traded in a very narrow range. All those people said its going to go crazy, its been 45 to 50. Examiwhich tells you it was d right this morning. Thank you very much. Ty, im sending it up to you. All right, sue, thanks very much. With all the hoopla surrounding twitter as ipo, dot forget that the company has yet to make a profit. Julia boorstin is outside the headquarters in San Francisco. Julia . Reporter heres the thing, tyler. Twitter may not be profitable, and half the people on twitter have never noticed its ads, but the company is generating growing revenue. Heres how. 230 million twitter users dont pay a penny to create about 500 million tweets every day. But this twitterverse still generating 422 million in the first nine months of 2013. The vast majority of that from sponsored tweets, or ads that appear prominently within a users twitter stream. It can target by demographics, location, who you follow and even the device youre tweeting from. But advertisers only pay when users engage with the ad by clicking or retweeting it. So twitter only makes money on ads that are engaging. Theres also money generated from users like xerox that want to promote their twitter handle to draw more followers. Another stream comes from promoted trends. Advertisers like the nfl will pay big money so that all day thursday, this hash tag appears at the top of twitters trends list. Even though there are 140 characters or less, billions of tweets add up to a mountain of data. Companies pay twitter to see it. Yet another way, the little blue bi bird, the Ceo Dick Costolo there as well. Seema mody is also on the twitter beat. Thats right. Ive tapped into one of twitters key demographics, High School Students and found investors in that crowd. See why theyre not putting their mouth where their tweets are next. Some historic tweets, the tweet that started it all. Twitter founder jack dorsey sending the first tweet ever, just setting up my twttr. Election night 2012, president obama tweeting out three simple words and that photo, four more years. Well be right back. Here we are, me and you on the road and we know that it goes on and on [ female announcer ] youre the boss of your life. In charge of making memories and keeping promises. Ask your financial professional how lincoln financial can help you take charge of your future. Oh, oh, all the way oh, oh welcome back to power lunch. Check out mens wearhouse. Our own david faber citing sources said Eminence Capital has taken a 9. 8 stake in the company and is urging it to solicit takeover bids. He also wants mens wearhouse to speak to joseph a. Bank who earlier this week said its willing to raise its bid for the company. Those shares are also up, tyler. Back to you. Thank you very much. One of twitters key demographics is, of course, the socalled millennial generation. But what do High School Investment clubs think about twitter the stock . Seema youve been looking into this. Wall street cares about what these teens. Remember last week when facebook said teen usage is decreasing, the stock moved lower. Now, these student investment clubs we spoke to all said that they use twitter, but that that could change. Were going to talk about the twitter ipo. Reporter at Warwick Valley High School in warwick, new york, twitter is a hot topic with the schools investment club. How many of you use twitter . The groups been looking into the ipo and considering if they would pick the stock for their fantasy portfolios. Its going to go up, and its going to go up quickly, but when it peaks, its going to go down very quickly. I think i will sell it before it gets to a longterm investment. Reporter the advertising model is one of their longterm concerns, as is the cool factor. We went from myspace to facebook, twitter. Whats going to be the next thing . I think when the parents really start coming into twitter, i dont see myself being on it as much as i am now. Reporter future wall streeter Greenhill School outside of dallas, see it another way. Right here they thought it was a bubble. Reporter they may use twitter, but they wont be investing in it, at least not yet. We dont really plan on investing in twitter because were more of the longterm. Thats not to say that in the future, maybe in a year, we might invest in it. However, if i were to personally invest in twitter, i would probably wait a week or so because the stock, in my opinion, will be sort of like facebook. And it will go down at first but eventually will go up to exceed expectations. Reporter and their instincts have been pretty spot on. So far this year, Greenhill Schools investment club, which uses real money, has been tracking the performance of the s p. I think its very exciting to see us actually making a profit. Now, all of the students we talked to really stressed advertising as the biggest challenge for twitter. Being twitter users themselves, they say the ads that exist now are generally ignored. But if ads become as in your face as they are on facebook, these teens say theyll start looking for the next big thing in social media. Tyler . Youre a twitter user. I am. I dont tweet very often. Sure. Have you noticed the ads on twitter . Ive got to say i never have. I notice them from time to time, but i have to say i dont click on them. I couldnt tell you who they are. Obviously i dont know who the advertisers are. Thats not a good stickiness quotient. Right. Absolutely. But the kids dont like the idea. We were talking just a moment ago, if twitter charged you per tweet after 100 tweets a month, a dime a tweet, would you pay it . I think that would limit the amount i tweet on a daily basis if i knew i was being charged per tweet. Come on, its free right now. Appreciate it. Dont miss our cnbc original documentary. Our chief tweeter, carl quintanilla, the man tweets with his toes while on set. Hes going to take you inside the twitter revolution. That is tonight at 8 00 only that is the only place youll see it here on cnbc. Sue . Well, ty, we went to Stanford University to see what the we hads who will likely lead the next Tech Revolution are saying. There was a time when i think i would have just because i thought it was new and edgy and something fun. But given some of like the more recent launches, im a little bit skeptical, and i think i would wait a while and see what everybody else does first. Im not super eager for it this time around like i would have been for facebook. I dont invest in any tech companies. Specifically twitter, i dont even know. Are they making money at this point . And so its just not for me. I dont see the monday advertea that. Theyre not going to make it much bigger than they already are, right . They have such a massive presence already, and this, to me, doesnt seem like a getrichquick kind of idea. I see much more potential for them to take a big hit. All right. Well, moving southeast from stanford to austin, texas, scott rochelli is at the university of texas. Hes also consumer analyst and trader of the nba Investment Fund which is run by the nba students at the school, and they have some 16 million worth of assets under management. Good to see you again, scott. Welcome back. Hey, sue. Thanks for having me on. Appreciate it. Irs if of all, what do you think of the launch of twitter here at the nyse, and would you invest in that stock . Yeah, i think twitters really exciting right now. At the Mccombs School of business, were a startup community. So just the excitement around the ipo is awesome. We like to see it. As far as business from twitter, we really like the business itself from a qualitative standpoint. Its got signet work effects. Right. More users it gets, the more brands and powerful it becomes. We believe its kind of the Cable Company of the internet. So were looking at the stock now. Thats a very interesting perspective on that. You know, it also comes at a time where we have the market overall up significantly. Its been a fantastic year. Where are you putting your money to work these days . Thats a great question. We keep struggling right now, coming up with new ideas. Were trying to find companies that really havent seen those returns on capital now. With everything overvalued right now, its really tough. So were looking at growth names, looking more towards value, but were always looking for the next big thing. Twitter fits that demographic right now. All right. So you like twitter, but look out 25 years for me. What do you think will be and this is not an easy question, obviously. Thats a tough question. Zmoo thats thats a tough question. If you could put that crystal ball to work for me, where do you think technologys going to take us . What would be the next big thing . Well, youre always worried about disruption. Facebook now, i feel, is all cat videos and baby photos. Twitter is really taking share from them. The next big thing, i know its stereotypical, but google i think can really take over the tv market, the mobile market and the computer market. I also, as far as the next big ipo, i think square is very interesting right now. As a millennial. Dirty little secret, we hate coins. We hate cash. And we hate checks. Right. Square is on the forefront of being able to do mobile payments, and we would love to have that. And cofounder was, of course, one of the gentlemen also involved in twitter. Hes doing all right for himself. Yeah, he is, definitely. But so you are. Youve got a very good return for that fund. Thanks, scott. Great to see you. Thanks, sue. Take care. You, too. Ty . Scary. Well all be working for him soon. Soon. Huge story from the fda. They want to ban artificial transfats. So which foods will have to change and how quickly . The list is long. Weve got much of it for you next. And forget twitter, facebook and all the other tech ipos. Dominic chu looking at the nontech names that have had a huge pop on their first day. Dom . It seems like Everyone Wants to talk about the tech one, but some of the best performing ipos are nontech related. After the break, were going to show you some of the best oneday pops over the past few years. Heres a hint. Were going to show what you brown did for investors on its first day of trading. Thats next on power lunch. Keep it right here. Thanks, dominic. And on the day twitter goes public, this is how it all began. This is the early Business Plan scribbled by cofounder jack dorsey on a notepad. It looks like a simple enough idea. Looks like something i might have sketched out but nothing ive sketched out is worth 32 billion. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. 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Your ford dealer. So i can reach ally bank 24 7, but there ar24 7. Branches . Im sorry, im just really reluctant to try new things. Really . Whats wrong with trying new things . Look mommys new vacuum cat screech you feel that in your muscles . I do. Drink water. Its a long story. Well, not having branches lets us give you great rates and service. Id like that. A new way to bank. A better way to save. Ally bank. Your money needs an ally. Welcome back. A im Sharon Epperson at the nymex with final krad trades in the pick. Looks like its going to close at a threeweek low, prices down about 9 or so, just above that 1300 an ounce level. We did see a brief pop in gold prices to around 1325 an ounce earlier this morning. But that was shortlived with the strength in the dollar, were seeing a considerable drop in gold prices. As i mentioned, at a threeweek low and as the dollar has gained ground on the positive data we got on gdp, thats part of the reason why were looking at gold prices faltering. Back to you. Thank you so much, sharon. A new front on the war on obesity. The fda wants to ban artificial transfats from foods. This is going to have some huge ramifications for the food industry. Think doughnuts or burgers or cookies, crackers, even frozen pizza. Eamon javers is in washington with more on the story. Hi. Mmm, doughnut, sue, you already got me thinking about lunch here. What were talking about here is partially hydrogenated oil. Take a look at your nutrition label on food. And if you see that, youve ever wondered what it is, thats what were talking about here. The fda saying that they would like to ban transfats, partially hydrogenated oil being the source of those transfat, from the American Food supply. They say theyve made a preliminary determination as of now. Theres going to be a 60day period here where they take in comments on this proposed rule. But they say that theyre asking the industry now how long it will take to remove transfats from the food supply. And they say that transfats increase the risk of coronary heart disease. And they say that they are still the industry has made some huge progress in removing transfats from the food supply. Theyre still found in some microwave popcorn, frozen pizza, margarine and coffee creamers. Of course, not all of those again, check your labels on those and how do transfats get into the food supply in the first place . The fda was asked that on a Conference Call they had. They said it simply was independent judgments by the Food Companies over the years that they said this stuff was safe. Now the fda saying its not safe. And it could be an open question now how long its going to take to get it all out of the u. S. Food supply. But tyler, they say the industry has already gone to huge lengths to get transfats out of the food supply. This may not be a major disruption for a lot of people who saw this coming. Eamon javers reporting. Theres been a lot of focus on tech ipos. Of course, twitter today, facebook, linkedin, yelp. But there are a lot of nontech companies that have a big pop on days they went public. Dominic has some details. Sboo interesti interesting names, names we all know. Follow me because visa, the huge credit card payments provider, they went public and they shot up huge. They were up 28 back in 2008 when they went public. Thats one big name. Then all of a sudden theres u. P. S. , a huge cargo carrier, up 37 back when they went public in 1999. On the other side of things, the nyse is in focus. I. C. E. , the intercontinental exchange, it soared 50 in its debut back in 2005. And speaking of soaring, guys, heres one for you. How about jetblue. Jblu shares went public back in 2002. They went up 67 in just the first day of trading. So these hot ipos, sue, theyre not just techs. Some of these traditional industrials have done pretty well as well. Back over to you. They sure have. Thanks for putting it all in perspective for us, dom. Appreciate it. All right. Were going to go to the bond market. We should note the stock market, though, is down 80 points on the dow. And were down 1. 3 on the nasdaq. And we can, we saw big movement in yields earlier this morning on that gdp report. How are inc. Thises looking now . Reporter the gdp report was better than expected, but it definitely seems as though the biggest input of the day, the input was the ecb cutting rates. And that moved all markets. But much temporary. If you look at the stock markets in europe and even our stock market, the dax was the only one that closed up. The cac didnt, ftse didnt, our market turned around based on those benefits. Look at a chart of 5s and 10s, each down 4 basis points. Dont want to dismiss that, but part of that is getting on track, that as stocks move lower, i would expect a little purchase going on in treasuries. But the yield curve hasnt changed. Still 26month high on the difference between those two yields. If you look at europe, it was down six basis points, one basis point away from the lowest level on a closing basis since august. And of course, the last chart is the euro currency. No surprise there. It is off its lows. Looks like to be the lowest close since midseptember. Tyler, its all yours, sir. All right, rick, thank you very much. That beatdown of tesla shares rolling on after reports of another fire involving a tesla. Wow plus, americas booming business of pot, weed, that is. Jane wells live in auburn, washington. Jane . Reporter tyler, im at the National Marijuana business conference. These are some ginger drops with 100 milligrams of thc. Mostly illegal. Numbers suggest the legal side could reach 10 billion in five years only if people are willing to pay taxes. That later. The American Dream is of a better future, a confident retirement. Those dreams, theres just no way were going to let them die. Like they helped millions of others. By listening. Planning. Working one on one. Thats what Ameriprise Financial does. Thats what they can do with you. Thats how ameriprise puts more within reach. Thats how ameriprise puts more within reach. The world is changing faster than ever, creating new opportunities for those who stand ready to seize them. In a time when the biggest risk is playing it safe, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, our flexible, collaborative approach helps forwardlooking companies not only run better, but run different. To give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because now more than ever, the future belongs to those who challenge the present. Welcome back to power lunch. Shares are soaring to a fouryear high on heavy trading today. Thats on positive data for its drug. They say 22 of its trial patients treated with its experimental blood trial were cured. The stock is up 300 . Tesla shares continue to get battered. The stock down for the month. Today we get news of another fire. Look at that falloff just in the past couple of days for tesla. Another fire in a model s. Cnbcs phil lebeau is following this story. Hi, phil. Reporter hi, tyler. This is one thats still under investigation. We want to show you some pictures from the tennessee highway patrol. This is of the model s after the fire was extinguished. It happened yesterday, yesterday afternoon, in murfreesboro, tennessee. The driver, by the way, escaped this without any injury. The model s did not hit another car in this incident. Instead is drove over a trailer hitch. That hitch that apparently punctured the battery compartment underneath the model s. And again, the driver escaped without injury. This is the third model s fire in the last six weeks. Remember there was one in suburban seattle, then one in mexico and now this one. Tesla is sending investigators to tennessee to look into whats happened. What about the federal government . Will it now investigate the model s . The ntsb says it will contact the local authorities who are looking into the incident to determine if there are Vehicle Safety implications that merit agency action. Keep in mind, tesla has sold more than 19,000 model s vehicles both this year as well as last year. And remember, after the seattle fire, ceo elon musk went out and said the battery packs inside the model s are safe. In fact, he said youre safer driving a model s than you are driving around with a bunch of flammable liquid in the back of your vehicle. And if you take a look at shares of teslas or shares of tesla since september 30th, thats when it hit its alltime high of more than 190 a share, it is down 27 . Sue, thats the latest on the model s fire. Back to you. Thank you so much, phil. Appreciate it. Well, twitter and equities, not the only way to make money in this market. A lot of investors have been finding great returns in the highyield corner of the market. But if youre going to jump into what some consider to be a riskier asset class, our next guest says make sure to stick with the sleepatnight highyield paper. Kevin laurens is at tiaa cref. Welcome back. Thank you. Nice to be here. Highyield corporate paper, you can get a pretty decent yield these days. What do you look for in terms of adding some corporate paper to your portfolio . What is the criteria . Sure. Tiaa cref has been investing in highyield bonds for 50 years. We have a really welldeveloped concept for analyzing. Cans. Were looking for companies that can consistently generate Free Cash Flow in the future. So were looking for companies that have a good, strong, Competitive Position in stable and growing industries. You mentioned to me when we were talking during the break that the horizon looks fairly benign right now. You do expect defaults eventually to increase, but thats not because of a market event. Thats just the way the sicycle whos. Exactly. Right now defaults are running 1. 5 to 3 . Thats kind of a trough level. People are predicting thats going to continue for the next couple years. We dont see a catalyst for that to change. Right now corporate Balance Sheets are in good shape. Lets go over some of your picks. Intelsat is one you like i assume for the yield which is 7 , but what else do you like . Indeed. Int intelset, companies that can generate free stable cash flow. It starts at the revenue line. We really like the fact that the companys customers are under longterm contracts, typically seven to ten years. Right now we have a backlog of over 10 billion. That represents over four years of revenues. On top of that, if they have a strong Competitive Position, theres no barriers to entry. And as a consequence, their Profit Margins are close to 40 . And the last thing that happened most recently, they did an ipo, paid down some debt, and the Management Team now is looking to continue deleveraging. Okay. The next one is ferrell gas, the yield 6 . Ferrell gas is one of the largest domestic propane account dr. Ers in the country with a strong except tif position also. And its a business that is utility like. Customers are heating their houses, hot water heaters, cooking. So that creates a very stable demand. I want to get to univision. The yield is 5 . Thats a growth story. It is indeed. Thats a company we began investing in in 2010. At that time an investor, televisa made a large investment, strength. Ed the Balance Sheet and entered into a very longterm supply contract for programming. So we think the operational risks declined significantly, companies that grow fast. Kevin, thank you very much. Some great ideas to add a little yield to your portfolio. Appreciate it very much. Thank you. Ty . Up to you. Sue, thank you. Twitter shares soaring on their first day of trading. Instant millionaires and billionaires being minted left and right. Well introduce you to some. What should they do with their newfound cash . Twitters home in San Francisco. How much house your money buys in the city by the bay after this. Plus, in honor of twitters ipo, check out these historic tweets. Warren buffett, the man who admitted not knowing how to check his email, he did join twitter. Today hes only sent out four tweets, but hes got 700,000 eager followers. And Anthony Wiener trying to make light of his situation after he accidentally tweeted out an explicit photo. Hmm. Power is back in two. At a ford dealer with a little q and a for fiona. Tell me fiona, whos having a big tire event . Your ford dealer. Who has 11 major brands to choose from . Your ford dealer. Whos offering a rebate . Your ford dealer. Who has the low price tire guarantee, affording peace of mind to anyone who might be in the market for a new set of tires . Your ford dealer. Im beginning to sense a pattern. Get up to 140 in mailin rebates when you buy four select tires with the Ford Service Credit card. Whered you get that sweater vest . Your ford dealer. Geothe last thing i want iswho doesnto feel like someone is giving me a sales pitch, especially when it comes to my investments. You want a broker you can trust. A lot of guys at the other firms seemed more focused on selling than their clients. Thats why i stopped working at my old brokerage and became a Financial Consultant with charles schwab. Avo what kind of Financial Consultant are you looking for . Talk to us today. Coming up on street signs at the top of this hour, the surprise rate cut in europe potentially changing the investing game. What does it mean for you . Also, a classic bull bear throwdown of microsoft sitting at a 12year high, thank you very much. And we all knew walmart was a discounter but not this much of a discounter. Youve got to hear this story. All those things and a lot more at the top of the hour. Make sure you tune in. Back to you on power lunch. Lets go back up to dom with a market flash. Thanks, sue. Jc penney at session highs. The embattled retailer reporting its first monthly samestore sales gains in nearly two years, this on the back of deep discounts and a decision to resume selling popular brands like st. Johns bay which former ceo ron johnson, sue, got rid of. Back over to you. Indeed, he did. Thank you so much. Todays Yahoo Finance question of the day. Where do you think twitters stock price will be one year from now . 26 say well above the ipo price. 51 , though, say below the ipo price. And 22 say it will be relatively unchanged. We will see. Ty, you have a sixmonth bet going. I do indeed. Not looking so good today, but well see in six months time. This right here is the original twitter home page. It was launched in 2006. Today that idea, of course, has turned into billions of dollars. Hundreds of millions of users. Lets take a look at the stock. Up big from 26 a share at the open to something in the mid40s right now. 46. 04, thats a 20 profit right off the bat. That means new billionaires, and that means some of those twitter guys are now eligible to be covered by robert frank. They are. You know, it was a 4 billion jackpot just today for these three twitter honchos. I did a little imaginary shopping for them. They all lead humble lives. Cofounder ed i wiwilliams, he expected to become a billionaire, of course, but now hes a double billionaire. Somewhere in the 200th richest person in the country. I did a little real estate shopping for him and found this mansion in the Pacific Heights area. Only 30 million. Jack dorseys shares worth just over 1 billion. He was already assumed to be a billionaire with a value of his twitter shares and stake in square which may also go ipo in the next few weeks. Dorsey loves to travel around the world. Heres what i picked out. A g650. Of course, dicks famous for his stylish glasses. I went out shopping, maybe warby parker. He could buy the whole company. Some estimate its value at 300 million. None of those guys can sell them for another six months or so, but for now theyre worth a lot on paper. That is a beautiful thing. Thank you very much. Follow me, folks. One of these things these guys could do with their money is maybe pick out property out in twitters hometown. San francisco. Robert just told you about one who did. Jamie is with mcguire real estate who is outside of twitters headquarters. Welcome. Good to have you with us. Great to be here. Im delighted you are. Less than five miles from twitters headquarters where you are standing now. Lets first check out some of the stats. 1. 293 million. That is up 23 year over year. The house is only on the market for about 33 years. Condos, average selling price, a little under 1 million, 973,000, thats an 18 gain, 5 days on the market, and that numbers been coming down. Jamie, first listing, a condo located at 988 fulton street. A mile from where you are. Theyre asking 560,000, taxes about 7,000. Tell me about this one. This is a beautiful onebedroom, onebath condo. And it makes all the sense in the world to buy this because in 2012, we saw rental rates rise 14 . So with 20 down, you can buy this condo for about the same amount of money that you can rent it. Demonstrating that our market is employing solid fundamentals, and people are spending their income wisely. That looks like some nice interior space. You think one bedroom, its got to be small but it looks very open and airy. My first condo was a onebedroom, onebath. Look at that. It uses its 662 square feet exceptionally well. The layout is phenomenal. Whats more, it offers beautiful green outlooks and onecar parking. Coveted in San Francisco with a market value of 50,000. Second listing, singlefamily home. Four miles from twitters hq. Threebedroom, twobath, 1. 25 million, just shy of 1900 square feet, about 16,000 in taxes. Theyre tooting their horns out there, jamie. Tell me about it. Well, that is a beautiful one to toot because it was arts and crafts architecture which were famous for here in San Francisco. We received six offers on this property. It was listed at 1. 05 million. Both the buyer and the seller were thrilled. Lets move on to our power house of the week. This one is a beautiful loft, your specialty, two miles from where you stand. 200 brannen street, 1. 68 million, two bed, two baths. 1939 square feet. Why is it so special . Yeah, 200 brannen was built back in 2004. This loft offers sparkling bay views. Weve received two offers. The loft space has gone through the roof. In fact, this particular category between 1 million and 2 million has 172 gain in a single year. Why . Because the tech buyer loves it. Its the sexy black dress in their closet. Its the thing that looks great on everybody. Its innovative space. And its beautiful to entertain in. And its offbeat and different just like our tech workers. That sexy black dress looks great on me. Jamie, appreciate it. Thanks for having me. Sue . Ty, marijuana in america is booming. With 21 u. S. States offering legalized medical pot use. Cnbcs jane wells is live from the National Marijuana business conference in auburn, washington. Janie, over to you. Reporter its like any other business conference, guys in suits and name tags, manufacturers of this, this extracts oil from the cannabis plant and can be yours for 63,000. The business of legal pot when we come back. The Marijuana Industry is booming in america, but whos profiting . Jane wells is live at the National Marijuana business conference in auburn, washington. Jane . Reporter tyler, this piece of equipment made by apex out of ohio, theyve already sold 70 of them. Again, 63,000. Pot is on the front burner, so to speak, in america. Election night saw promarijuana laws passed in washington and maine. Gallup says more than half the country now wants marijuana legal. Medical marijuana is already legal in over 21 states and dmplg dmplgd. C. Recreation pot is legal in washington and colorado. And pot has been decriminalized in a half dozen more seen there in gold. At this conference, investors like tripkeeper say the federal governments recent decision to hold back enforcement as washington and colorado roll out their programs has unleashed interest from places like hedge funds. Three years ago there was nobody that was interested. But just yesterday, i met with a hedge fund, i met with Institutional Investors and approximately half a dozen credit investors. So thats really an indication of where were at. Reporter two big issues for maine. Will traditional banks now move in since the federal government is holding back . And how high is too high for taxes . Its going to be over 25 in colorado when you throw in sales tax. Over 50 in washington. In the end, you know, its a couple extra bucks in colorado and maybe double that in washington to the consumer. But, you know, the thinking is that people are still going to pay for that because of safety, because its regulated and its legit. Youre not going to someones basement. Today happens to be topshelf tuesday. Reporter he runs several medical dispensaries in seattle, applying to sell recreational pot. Washington wants to get rid of medical, which is completely untaxed. Move everyone to taxable recreational system. A lot of people here not happy about it. I dont think it has gone very well yet. A lot of patients come in here and theyre upset that medicals going to be gone. And theyre thinking, wow maybe my vote should have went the other way. Reporter finally, new Research Released here today says legal pot is going to grow 64 in terms of revenues this year. Could top 10 billion in five years. Seems optimistic. Were going to have to see how this rolls out, sue, as these Recreational Stores actually start to open, that probably wont happen till the spring. Back to you. All right. Thank you very much, jane. Three big winners in todays trading and in honor of twitters ipo, check out these historic tweets. The i. T. Consultant who knew something was up tweeting one night Osama Bin Laden was captured and killed. And the hack that had the markets tanking back in april. The a. P. Twitter account was hacked, saying that there was an explosion at the white house. We all know that that was not the case. Back in a moment. [ female announcer ] its time for the annual shareholders meeting. Therell be the usual presentations on research. And development. Some new members of the team will be introduced. The chairman emeritus will distribute his usual wisdom. And you . Well, youre the chief life officer. You just need the right professional to help you take charge. To help you take charge. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Twitter may be doing well today, but the overall market is not. The Dow Jones Industrial average is off 86 points. The s p is off 15. But the biggest percentage loss today comes on the nasdaq, ty, which is down 1. 3. Twitter itself, up 80 on its opening day here. And last trade is at 46. 88. That does it for us. Theres a look at three more winners. That does it for power. And street signs begins right now. Tweet tweet tweet tweet in your hot topics today, your headline by the news that is gripping america if not the entire world. The surprise Interest Rate cut by the ecb. What happened . Why . And why you do need to care about it. What walmart is doing that is likely to make even some walmart fans angry. The debate over the tech stock that has quietly become a stock star this year. And mandy, yes, we do have this little thing called the