positions. plus, seven stocks to be bullish on ahead of their earnings the investment committee is ready to go. "half time report" starts right no now. >> welcome good to have you with us j joe, and cnbc's jim cramer you know him, the host of "mad money. s&p and nasdaq jim, i turn to you with the question we asked at the top, whether the market is over valued in a danger zone or not. >> i think it depends on tech. it actually depends on tech. 20% of the market is tech. you could have great numbers from facebook, which i think you could have it, amazon not being kept down from the fact that amazon services has bottom there had, versus azure. netflix, i didn't think, was that bad alphabet could be good i believe apple might be a real growth spurt f those happen, i think it's going to take up a lot of the worry and i think every one of them could. instagram for facebook has taken off as the single best way to advertise. i didn't hear anything at on the netflix call. >> on that point, new highs for facebook, new high for alphabet. in terms of tech, adobe applied materials, sales force, micron, service now, nvidia, texas instruments. you know where i'm going these stocks keep going up. >> i could tell you a story of every one of them. >> yeah? >> asml with a blow out. and nvidia this morning said it's back on its continuum it has new chips amd taking a lot of business from intel i could go on and on those stocks, those companies could have breakout earnings instead of this being on -- we don't really like it when we've gotten the so-called levitation. it then justifies the higher that might be happening. >> by my numbers, joe, so far minus 0.8% to cramer's point you've had multiple expansion, you better get the earnings growth to back it up. jamie dimon out in davos, market's in a goldilocks place yesterday, jonathan was raising his price to 3600 on the s&p they say there's more upside than you think bullish, bullish, bullish. maybe it's justified maybe that's just fine jim says you can make a story for the stocks that continue to go up. can you make a credible story for the mark that continues to go up? >> if you're focused on growth there's a distinction between growth and value a lot of the story is underneath the surface. look where the yield is trading for a ten-year it's 176 again what's that telling you? that the world is going to search for growth. look at the price of oil seven-week low for the price of oil. again what's the signal for that i've said ad nauseum and net overall seller of equities and that's the type of behavior that leads to a higher stock market but other stories are continuing the growth and momentum from 2019 look at private equity, blackstone up 10% so far year to date chipotle, 880, trading at 880 right now. mcdonald's, coming back. we thought we were going to leave that wasn't going to be an opportunity. 212 for mcdonald's so there's other stories but it's all about growth. i think that's where you have to focus. >> back to you for a second. i've heard on this desk the last several days people who were looking to trim some of the gains they had rather than putting a lot of cash, new cash to work in the market. you run your own book stocks how do you feel about -- >> we did trim every trim was wrong feel greedy. at the same time it was at 180 i know that's the problem. mastercard, bought at 305. pigs bulls make money, bears make money, pigs get slaughtered. people realize i don't have enough stock on. cloud stocks are expensive but geez, i don't know maybe they do the numbers. >> there are some people who are making comparisons to '99. let's remind you of what paul tudor jones said. >> we're in a crazy monetary mix in history it's so explosive. it defies imagination. i don't think anything has changed. it reminds me a lot of early '99. we had 2.3% cpi. we have the exact same metrics today. >> you have this powerful potion. >> yeah and, scott, one of the things you do so well is hold our feet to the fire guys, do we take profits here? guys, what are you thinking? is there still upside? is there anything left in th tank what inning are we in? we do all these games, right to paul tudor jones' point, in '99 the market was up 2.6% if you got out early in january or february 1999, you missed so much dow was up 25 points, s&p was up 12 we only traded ed 200 billion shares for the year. do you know how many multiples of that we do right now, scott yes, in terms of market meltups, in terms of moving higher, you could feel a little bit of that right now but it's all back to timing and if you're getting out right as a lot of these factors are coming to the floor, i think you're going to leave an awful lot of money on the table. >> i hear you. >> i've done it. jim did it, as far as when we've lightened up but i've had to do it. >> yes >> it's the discipline i have. and you have to take some profits. >> when did greenspan do irrational exuberance? it wasn't '99. it was '96 so to your point you would have left buckets full. >> gobs. >> we have to be disciplined this the investment committee. people will be saying i really love adobe and i don't even care what adobe is it could be pueblo hot this thing has gone up so much we have to take some off it's been the guiding light for me discipline should trump conviction. >> i'm glad you mentioned adobe. you sold all of it >> no, no, a small portion of it. >> you're trimming some of the profits as jim just said now growing by the day tleerks pages long of highs, 52 week or all-time adobe is on the list, all-time high since 1986. >> since i bought the stock in november it's up about 30% it became too big of a position for me so i had to trim some. i sold boeing. it's like gym class in high school, pass/fail. >> and not get beat up that was the key. >> exactly. >> survive the playground. >> some of the things joe said are things i'm worried about mcdonald's back. fundamentals respect back. stocks moved higher, chipotle selling at 85 earnings, that's not making me feel better. it's making me feel worse. clearly, you have to worry however, to what paul tudor jones said, fed funds was 6% in 1999 money is free around the world that's a major difference. by value that's, by definition, a relative term. free money, the momentum we're seeing jim is exactly right you talk about asml, they talk about some parts of the business but mention memory is picking up that's micron. there's a story for almost every stock. some there aren't, like mcdonald's. >> plus the powerful of ptj, paul tudor jones. >> i'm not concerned if any of those companies miss the thing that i like is that the market has gotten more rational for example, we have the flu coming out of china. that was not even a one-day event. so the market says i've seen this before. i'm not going to let it impact me not that pandemics really have they haven't. >> is tesla rational, 125% in three months rational? >> absolutely. >> you just said -- >> to me. >> that's short, scott, short in the s&p 500. >> some will point to that and say this is case a as to how out of hand the market has gotten. somebody coming on this network talking 6,000 price target for tesla. >> roadway. >> last week. >> that was just last week today it goes over 100 billion in market cap. i get some of it is short covering china, they've figured it out. >> it's a tech company here is why i say this first of all, when you start making excuses, it's cheesy to do, but nobody else is selling for the most part any evs. those of us who have driven it marvel about all the other things that are in a tesla then what happens if elon musk -- by the way, national treasure the guy who invented the wheel a lot of simple machines. >> what can you do about the wheel? >> it's copyrighted. i see everybody. >> telephone >> here is what really does matter what happens if he comes up with with 1,000, battery that lasts 1,000? >> that's what they're looking at with technology. >> that's the bad. >> tell me what you think, michael farr. >> i think there are similarities to '99 but not a lot of similarities to '99 this is it not a bubble time the word in '99 or through the late '90s, all you had to do was buy stocks because they were all going to go up that proved you right for a while. when the market gets this comfortable, i think you've got to be uncomfortable, right you can't just say i'm going to buy all the fang stocks. take a look at those stocks that have real growth a lot of these fang stocks have terrific balance sheets without a lot of debt. they're growing earnings as a growth manager when you're looking to buy stocks with earnings growth these are the best names you can find. look at other places around, too. you have to find that earnings growth it's a time in the market where you have to work twice as hard, make sure your balance sheets are solid. a lot of s&p companies have doubled the amount of debts they have debt doesn't matter until all of a sudden it does when it does, you don't want to be the one without the seat when that music stops. >> credit suisse say while tech enjoyed a stellar 2019 performance up 37% and valuation is more expensive today than in the past decade, sxeks are nowhere near march 2000 levels. >> nowhere near. >> i like the '87 example better people could say wow, that could be october, because we get october. you went up to 29 multiple a lot of that was japanese bond that came in over the top every single day we're nowhere near that level. i agree with everything. we've got good balance sheets, some earnings. i think what all of us would love, honestly, is come in here day three of a sars like -- we don't want stars, obviously. day throw of a pandemic and suddenly find ourselves thinking, you know what? amazon shouldn't be down 30 points i don't get that we kind of feel like it's parabol parabolic. everyone knows that parabolic ends badly but in the interim, wow. and we're afraid -- those of us who have trimmed know we're lagging those who haven't, and that's painful. >> i've also asked the question in these kind of conversations that we've had as to whether things are overvalued or whether it's time to fear or fear not. maybe it's all justified as you said at the very outset, if you can tell a credible story, backed by fundamentals. >> right. >> real things that are happening, then perhaps it is justified. >> david faber andsand i clashe, not just like we do on fridays when he doesn't wear a tie that's nasty but we clashed over the idea that perhaps apple has a gigantic upside. this thing took the world by storm. triple camera. i sent tim cook a picture. i did a portrait mode of my wife i thought it was better than -- you know these great photographers you pay millions of dollars to have your -- no. i am a great photographer. >> you mean annie liebowitz? >> yes i crushed her. the air pods -- who doesn't own an air pro this is like maxwell smart now we're really into a shoe phone it could have 13, $14 earnings power. so what happens you say holy cow, why did i sell at $11 >> i'm listening to all of this and thinking the biggest risk possibly is not that it's '99. maybe it's 2018 and maybe next week the federal reserve looks at all of this and sees that the only inflation out there is in asset prices that's the only pure inflation that you can find. what do they message to the market at that point if they're messaging something that's going to signal a little bit of a different shift, then i think you look at a softening in asset prices. >> we'll see i don't know if we'll go that far. let's get another voice from naples, florida. liz ann sonders, charles schwab chief investment strategist. nice to see you today. >> hi, guys. thanks. >> when it's comfortable, it's time to be uncomfortable. >> sentiment has clearly gotten stretched here you've spent a lot of time talking about valuation. first it's a description of what metrec you use if you look at equity versus premiums, relative to corporates, or the fed model, the market still looks pretty cheap. on more traditional metrics, it looks much more expensive. the reality or more important factor is that we think of valuation as this fundamental factor because the component parts of most metrics are quantifiable the reality is that valuation is as much as sentiment indicator as anything else i think that's what we're seeing a melding of right now you also talked a lot about the so-called trimming to early. the reality is if your only measure of success is to get out of the top and get in at the bottom, neither get in or get out is an investment strategy. that's gambling on two moments in time and none of us will be consistent doing that. the whole notion around rebalancing is what sort of generally keeps you on the right side of things you're trimming into strength, nothing wrong about that but you're making sure you're keeping overall longer term asset allocation in line without getting way out over your skis when you have the inevitable pullback or correction, you're not much longer in that particular asset class it's really back to the basics. >> what part of the market are you watching closer than any other to take your signals as to where you think this thing can go >> i think we are seeing some similarities to what we saw in the beginning of 2018. you're seeing a tremendous amount of speculation in the options market, a lot of really stretch behavior in terms of technicals we don't have the same vehicles in early 2018 like the xiv that imploded when the volatility index spiked but a lot of positioning has kicked in that is on the basis of an expectation that we're going to stay in this very low volatility, nothing to see here straight up. so i just think that there are ways that investors ought to think about sort of protecting, even if it's just, again, back to the simple strategy of being mindful of that rebalancing, which can really be just such a beautiful tool as boring, i suppose, as it is to talk about on a show like this. >> as always, liz ann is terrific and summarizes it perfectly. i remember going to minnesota to see the eagles crush the patriots but that was it. remember that friday >> yeah. >> we had the vicks. who is playing the vicks the cab driver i had what's going on with the eagles? no, no, the vicks. i'm short the vicks, the cab driver boy, was he wrong. now, of course, we are just a few days away from the same point. now what really happened we had a very hot employment number the fed starting panicking we had janet yellin. the volume was so great, right out of left field. it was the spirit. it was it was a personal foul what happened there and i think what happened wasn't foreseen and that's my biggest worry. i didn't see that vicks thing happening. i had no idea about the volume i know there's a lot of people out there. they had to sell the s&p at the same time the volume is too high you had your chance to buy. >> you never see the big event, do you >> no. >> liz ann, is there some level of complacency that's seeped into the market the more we've gone up with trade feels like it's in the rear view, impeachment doesn't feel like it's going to end with the removal of the president, which would certainly be disjointing to the markets. >> there's an extraordinary amount of complacency right now. save for mutual fund or etf flows which have been negative that's really been the 11-year story of this bull market. i put that aside the thing about sentiment, and you know i grew up in this business from '86 to '99, working for the late, great marty, who pioneered the whole phrase of don't fight the fed and the meaning behind it, but invented the pacaw ratio if he were here, and one of the things i learned from him, he would say sentiment in and of itself doesn't suggest that the market is going to turn in the opposite direction it's never wise to be a contrarian just to be a contrarian it does establish vulnerability to the extent there is some sort of catalyst. you mentioned catalyst, whether it's trade ramps up and concerns and tariffs ramp up with the eu as opposed to not worrying about china as much anymore. it could be something on the inflation front or on the jobs front. it could be something on the sars front so we don't know we just know that you're pretty likely more vulnerable in light of how one-sided sentiment and, in turn, much of the positioning associated with that has become. >> it's always great to get your insights liz ann, thanksso much for being with us. >> thanks, guys. >> that's schwab's liz ann sonders joining us again let's kick around some names as our last sort of segment we have as our a block netfl netflix, stock is down 2.25%, about $7.50. they're changing the way that they record views. have you to watch for now two minutes rather than 70% of a show that's peculiar in and of itself you have the news now that einhorn has added to his short jim i would like your opinion on this whole story they use the late '19 bounce in shares to make it a more substantial balance. winner take all or winner take most we believe this narrative is finally coming to an end to josh brown on this show yesterday said he agreed with einhorn. what do you do with netflix today? >> i think netflix is chronically over but the call was excellent. they are saying look, where are we in the continuum of time? there was a time broadcast was everything cable came along and destroyed the valuations then he's saying, look, these kind of streaming products are going to crush cable and so, therefore, a nice secular them which keeps artificial intelligence to read what you want, not necessarily selling you. there's a time and place let it cool off. i don't get the big short. i just don't. >> has the game not changed, though, in what was a, as einhorn suggested, a name like netflix has clearly changed and it's gotten much more crowded and fierce in the last year. >> so i suspect that being short and being long is going to disappoint you on both positions for netflix. i think netflix is in a place where we are now looking at it as no longer the hyper growth stock that it was in years prior. does it belong in the fang group anymore? probably not take it out. doesn't belong there netflix, right now, is not going to experience the multiple expansion that the rest of the fangs experienced in 2019. now there was a suspicion that was on the pre krchcipes of begg to get that multiple expansion, began to rally in the last couple of months the worst was past and this was going to be the quarter where you'll see better guidance and netflix will get multiple expansion. i don't think you're going to see multiple expansion on the other side of that, let's see what the competition really looks like from disney plus and apple when the promotions go away at the end of this year. >> hold on he just said that netflix is no longer a, quote, unquote, hyper growth company. >> i don't believe it is. >> doesn't it still have a valuation of a hyper growth stock? >> yeah, it does it does. in fact, scott, that alternative data that we cite all the time, this alternative data said it was going to be a bad quarter for netflix. not in terms of earnings in terms of subscriber growth or hanging on to international and things like that they blew out the numbers. this earnings report and the reaction to it tells you everything you need to know. and i say this as a short. i'm like einhorn in this one i am short in this. >> you're short netflix right now? >> yes, big. and the reason was -- i called our producer yesterday told him the positions i had put on and why i put them on alternative data told us that international, in particular, was going down for them. and they cannot afford that. >> it went up. >> it was good. >> the way they're measuring -- they measure a bunch of things like, for instance, india was supposed to be their big one right, steve india is not. >> i look at it like a port