Bobby kotick, is telling us how hes turning one of the most popular games into a Sports League of its own. First, the dow surging back after a spike in rates this morning. A loss is what happens when there are more sellers than buyers those losses were shortlived with the dow closing basically flat so with stocks near record highs again, we thought we would play a Little Mission impossible stock. Your mission, should you choose to accept it, find a cheap stock trading on the s p at its highest valuations in a decade we have our own tom cruise at the desk in the form of tim seymour. Maybe rob lowe. Jack wagner, maybe. We talked about if the airlines are cheap ill leave that to them, if theyre so inclined. Look at Prudential Financial that stock is trading ten times forward p e. They just raised guidance recently if youre looking for places that still offer value, and potentially a rising rate environment, a name like pru will get you done. Financials. With an insurance tail. Im going to riff off of that im going to be a little bit controversial, the p es here are not low. But take a look at the etail brokers, e trade, schwab. If rates are going up, these guys make a ton of money in that environment. Thats my play i like where bk is going. Clearly if its a market where its expensive, people are trading and these guys have had a massive, massive run i think the p es are excessive. Ill take guys financials ubs trades at. 86 times price to tangible book. European banks dont get the same bang for their buck, although some of them with operations here do very well i think the Interest Rate story that was also part of todays market but were just talking about stocks, i will say, as rates go higher in europe, european banks do better than u. S. Banks europe has gotten a lot of their capital issues in order. Swiss banks who are focusing on Wealth Management is especially cheap. Then i do have to go back to the autos, i look at gm and say, somewhere here around seven times, even with a big rally in the stock, based upon recent guidance we got on 2018, i would stay right there auto is a tough day today gm, particularly nafta is what gm. Im long gm, i do think its cheap. To me, the cheapest space, the airlines guy touched on it, there was recommendation change from underperform to buy on united and decent data out of united and american. I think theyre cheap here, certainly relative to the market, as they should be cheap, theyre cyclical, right . A lot of great things are happening in the economy, in their business they are a beneficiary of the tax situation. So i think theres room to run here i hate to say it on a day when theyre up so big. But youve been saying it for a long time. Ive been saying it a long time i still think theyre cheap. Delta, united, and american. Mr. Bill miller likes airlines as well, has liked them for some time. He clearly has been watching karen and tim on fast money at 5 00 let me talk about delta. I believe they report earnings tomorrow i also believe theyre currently trading around ten times or so forward earnings, theyll make close to 6 a share next year. They should have a bigger multiple than that even at a 11 multiple, its a 66 stock. Im with karen, these earnings should be good and the stocks are breaking to the upside i pointed this out for united, and ill point it out for the airlines last night united was up 6. 7 , the street was up 5. 2. Guy loves to talk about prasm, it will come in flat, it was expected to be slightly down as our friend hunter at wolff says, they may use this to set the table for 2018 i still think there are at least some choppinesses in terms of their capacity issues and efficiency issues for 2018 and it may not give you a lot of great stuff to go on even though last nights guidance was fantastic. Karen talked about relative to gdp. Say what you want about the airlines in terms of multiples, but relative to a 3. 5, 4 gdp economy, these are very cheap stocks theyre trading as if were going through a recession. Theyre not. Its important, cheap in value is relative in a market at record highs nobody has mentioned any dogs. Nobody has mentioned stocks that have been challenged over the past year. Ge is the biggest dog its not cheap right its really not says the owner of ge at higher prices. Says the owner of ge. I also think this eps guidance has been washed out. And i think these guys have intentionally said, were focusing on two or three core businesses and off we go i continue to maintain ge is very cheap thats what gives me the comfort to hold it its gm that got kicked in its doggie days. I mentioned this a couple of times this week, its controversial but thats my nature, ibm. Did you hear the Warren Buffett interview . It sounded like he was selling to me. It sounds like there will be big news about ibm not good it sounded like part of that was for taxable reasons, thats not necessarily a bad thing. Okay. Secondly, he bought that because of the buyback my view on this is whats the catalyst that will move ibm shares higher . They are huge in the two biggest tech trends we have coming up, ai and blockchain. Why wouldnt you want some of your portfolio to be in that ibm does not get enough credit for that therefore thats why its cheap and why i think its going to get more expensive and this is bk is on to something, tim gave him cukudosn it a week and a half ago maybe theyve finally turned this thing around and its very difficult to be short this stock in this environment into earnings when they potentially have so theres a very good chance ibm, i cant believe im saying this, will continue to run into earnings, i think its 2 1 2 weeks. Let me push back on this, because although i said it was a decent idea and i think it was now you walk that back . One of my better ideas. One of your better ideas, which is really troubling. No here is what i want to say about ibm. Theres a tendency at a time like this to say we have to find the next thing and dig under the rubble dogs are dogs, and ibm has been a proven dog for a long time its a company that needs to remake itself. Its engineered earnings for a long time. What theyre doing in mainframe in terms of infrastructure is very good in terms of infratech. In terms of what theyre doing in blockchain, i have no idea. I have to say im a little surprised it hasnt gotten more of a bid based on the kodak bid. Right thats why i think theyre not getting enough credit for it what ibm is doing in the Blockchain Space are what are called private chains, basically like when you had the internet, you had intranets within that doesnt get a high a multiple because it may not be as scaleable as people think that being said, its not that hard to pivot from a private blockchain to a public blockchain thats what people are missing with ibm our next guest says we might be on track for the greatest bull market ever, wow. It has been a while since weve seen julian emanuel, now chief equity and derivative strategist at bdig, congratulations its been nine glorious years built on gains derived from low rates, Earnings Growth, and you met expansion, significant multiple expansion however, the road to 3,000 we think is going to be a little different. We think the gains this year are going to be built on Earnings Growth and we dont actually need multiple expansion, because were going to have single digit, high single digit, low double digit Earnings Growth bolstered by tax reform. The question is, after gains of 305 , could this end up being the greatest bull market of all time quite possibly but if thats the case, were going to have to beat the bull market of the 1990s. However, in our view, if you keep Interest Rates in check, you keep this global synchronized growth metric in check and Earnings Growth continues apace, we think you could get there by the time this bull market has run its course greatest bull market ever shall we invite julian over . Come on over, julian karen will bring the chair in. Thank you, karen take a seat, julian. Welcome to the desk. Great to be here. Whats the thing, though, that could derail the greatest bull market ever its a couple of things if you get too far in the tenyear, 3 is too far, the distance between where we are now and 3 is going to be a reflection of a more growthier metric you get too far and stocks will have to start discounting the fact that rates are higher than expected the other thing of course would be if the economy starts to turn over we dont see that. Recession probabilities are very low. Things are growing nicely. If that happened to happen, and the fed continued raising rates, which is how bull markets typically end, thats where we run into problems as well. Fed missteps is probably at the top of your list of things that can go wrong. Yes whats the probability of that happening well, you cant discount it, because if you look in the past, when youve had fed leadership transitions, as were about to have, markets have run into problems it happened when greenspan took over from volcker in 1987. The financial crisis happened a year after bernanke took over. Markets tend to have to digest those werent selfinflicted, though this would be selfselfinflicted the fact is, its not just powell at the top that would be different, the whole leadership is going to change the market will have to get the confidence that the fed will keep things moving on the right track. Julian, ive known you for a long time. Hearing you this confident about markets, i mean, this is a very smart strategist, a guy who looks for whats wrong i know we talked about the fed, but isnt the fact that Consumer Confidence and Business Confidence are at record highs, doesnt that tell you that were at extreme levels, that a guy like you that thinks contrarian is wrong, that tells me thattings that in positioning is already here. It cant be that good. Fair point. Thats part of why we think that this years narrative is volatility moves higher. Thats a got to be a dose of reality. 2017 was too easy. The money was too fast, lets say. But for us, the fact is, is that this global synchronized growth metric, it doesnt die easily. And thats really significant underpinnings. And yes, were worried about valuation. Its a concern every day and we get lots of questions on it but until rates really start to move, we can move higher its not valuation, its confidence, to me. People are too complacent. Last question, julian, then well let you go 3 . Do we hit that this year we dont think you do were sort of keying off of consensus. Thats around 288, 290 so at least another year for the greatest bull market ever . Thats what were thinking. Julian emanuel, thank you btig what do you think . If you look at the market today, what are the risks out there . Its the bond market we saw it this morning, bond yields up all of a sudden for the first time futures why down ten handles that was like running around with your hair on fire big news. Its not really that big news. But for this market it was big news so i agree with julian, somewhere around 3 seems to be the trigger that most people are saying, you know what, this is going to start to impact valuations, were going to have to start taking our earnings down, start taking our targets down you might want to get ahead of it and start taking profits. When they get to 2. 9 what have you done today . What do you think of the whole greatest bull market ever . Im always long, thats my bias buy s p puts against it, thinking the volatility will spike higher, which happens for like an hour and they expire worthless, which is okay, it helps me sleep at night. Im long t t to me the biggest risk is Inflation Forces the feds hand. The market is okay with whats on plan right now. With a spike in rates yes, an unexpected, significant spike in rates what did you do today a stock that fits into our earlier discussion the jnk and the hyg were to the high yield etfs, trading today and yesterday through the 50, 100, 200 moving averages that to me is showing sensitivity to credit. Coming up, the dean of valuation says you cant value bitcoin. But theres one surge in cryptocurrency you can value hell tell you what it is. Plus Activision Blizzard is making a bet on one of its biggest games. Well talk to the ceo. And later, one retail stock is surging and someone on this desk thinks its the beginning of a major tnaurround. Much more fast money after this your bbf your backup singer. Your frenemy your boo your roomie so one phone for you and one phone for someone in your squad. Buy an iphone 8 and get a second iphone 8 on us when you have directv. Welcome back to fast money. Lets take a look at target, topping the tape shares soaring more than 2 today, now up more than 6 this week after the Company Raised guidance after stronger than reported holiday sales are target shares finally hitting the bullseye, are they the next walmart, karen . I dont know, maybe i would have thought the stock would be up more today i thought that was pretty good, and they see some momentum and, you know, i dont think this is an out over their skis kind of guidance maybe theres a possibility they do better than that. Its not super cheap but nothing is super cheap right now i think its sort of interesting right here forced to choose. Another way of saying would you rather, in disguise, my little trick. Target or walmart . Tgt tgt. We sat not on this desk, upstairs we are upstairs or downstairs this is upstairs. There is no upstairs it was 6 30 in the morning, target came out, stock was trading, i looked at you and said, dont fade this move, mel, remember that . Yeah. Except for a brief period of time a couple of weeks ago after they reported this, the stock has been a rocket ship no, its not cheap, but its cheap in comparison to walmart which gets to the conversation from the top of the show, is walmart value, is target a better value . Walmart is trading at two standard deviations. Walmart, its old self, didnt have this whole e commerce think that people think is going to compete with amazon. Target made some noise about their ability to compete in ecommerce this is where target is cheap to its peers, relatively in line with itself. Maybe that multiple needs to go higher theres a tiny chance that target could get acquired. I wouldnt own it, but it is possible i wouldnt pay anything for it but that is a possibility that walmart does not have. For me the catalyst here, i would pick target, to answer your question. Ive liked walmart quite a bit all through 17. Here i think theres just more upside surprise that could come out of target. I know what walmarts strategy is, its a good strategy but target has multiple strategies they could hit. Maybe theres a bid, they my get taken over i still think theyre a catalyst for 2018 Patrick Doyle is about to speak to jim cramer, his first interview since announcing hes stepping down from the c suite in june. Im melissa lee. Youre watching cnbc, first in business worldwide meantime here is whats coming up on fast. Warren buffett bashing bitcoin. But after you hear what he said about internet stocks in the 90s, you might go full crypto well explain. Plus shall we play a game . We shall. Video game stocks are on fire. And east port could take one of them to new highs. The name when fast money returns. In terms of cryptocurrencies generally, i can say almost with certainty that they will come to a bad ending now, when it happens or how or anything else, i dont know. But i know this. I get into enough trouble with things i think i know something about. Why in the world should i take a long or short position in something i dont know anything about . That was Warren Buffett sitting down with our own becky quick. This isnt the first time bust has bashed a speculative industry with sky high valuations take a listen to what the oracle of omaha said about internet stocks 20 years ago. I would say theres no one here that can understand some new Internet Company i said at the annual meeting this year if i were teaching a class in business school, at the final exam i would pass out information on an Internet Company and ask each student to value it and anyone who answered, i would flunk. Go gators, by the way thats what papa told University Students in 1998. Internet stocks have come a long way since then since the tech sector makes up a large percentage of the s p 500. Is this deja vu . Is buffett right about crypto . Or does one of the greatest investors of all time have it gone bk, youre going to say yes, he has it all wrong you know what, im not going to say hes got it all wrong there are parts of the Crypto Market that are in a speculative frenzy youre getting valuations in some of these things, im not necessarily talk about bitcoin, some of the smaller coins, youre starting to see speculative frenzy they dont have much behind them and they will end up bad in that particular sense an important thing to remember here is, you had a bubble in internet stocks, but it was still a Transformative Technology amazon, facebook, google, all came out of that era if youre looking at whats the next internet investment over a long time frame, then buffett is completely wrong im invested there. I dont know how were doing on valuations, brian. You talk about valuations being fraught. Im not even sure whats there im surprised mr. Buffett didnt talk about the equities that are attached to crypto and putting valuations and why he didnt reference a kodak, which maybe ill look even sillier when its 30 bucks a share, but to me, i dont understand this. I will say, and this goes back to the rbc interview we had the other night, the fact that its conceptual, the decentralization coming from crypto is something that a lot of people have a tough time finding an explanation for. Its there Aswath Damodaran is a professor at nyu and joins us from california. Is Warren Buffett right on crypto i think hes brushing the entire sector with too broad a brush. I dont think you can write off cryptocurrencies altogether. Will it end badly for some of the people involved . Absolutely, for those people who got on the bandwagon late and are playing the pricing game for some of them, its going to end badly. But looking forward, i agree with your panel that there is a future for fin tech. I think we mix together lots of different crypto investments in the crypt