3. 75 . I say that with an air of surprise. Just because the discounts are so extreme. 75 at bloomingdales, the same at saks. You have to wonder whether their earnings will be there in january. Finally, on the 10 year, we are bumping up on three percent. This whole paper thing taper thing, it is real. If it drives Interest Rates up, we will see what happens. Julie hyman is keeping an eye on stocks. I want to look at ebay. Comscore coming up with the latest numbers. ,hey say ebay sales are up 9. 6 but that is actually deceleration. The 15th. Up through maybe you saw a bit of a slowdown. Amazon saw the same thing but not exactly the same. Twitter is up a sixth straight day, at a record since its ipo. What is driving it . Not necessarily fundamentals. We will talk about that later in the show. Certainly, no fundamental news driving them higher today. Tesla motors has been on a hot streak lately. Dailytoday after china reported that they would be expanding into firsttier chinese cities. There is already a dealership there that has been doing well. Luxury auto sales have generally been strong in china, so i hope running on those new dealerships. Now onto our big story. An avalanche of online orders overwhelmed ubs the season and the company failed to deliver some packages in time for christmas. Ups says all the packages should be delivered today. Ok. Not on christmas, though. Is attempting to make amends to customers, offering a 20 gift card and refunds on shipping charges. 2013 may be seen as the year that americans fully embraced e commerce. Its fleet ofh 100,000 vehicles come a was not ready for it. How can Delivery Companies keep up in this amazon economy . Several guests here for our roundtable. Julie hyman, lets begin with you. Lets walk through exactly what happened. I had ordered some toys on amazon, a little lastminute, i , but anyway, we ordered some toys online. They were not there on christmas eve, like they had been promised. My initial frustration was with amazon. I wonder also how damaging it is to other brands relying on ups. Amazon is pushing this off saying that they fulfilled their orders, and the fault is with ups. What is interesting is how much ups anticipated the holiday. They hired 55,000 extra people to help them over the Holiday Season. Up theirly beefed staffing, facilities, logistics. To analysts,lk this preparation is a collaboration process between ups and fedex. They plan together, ahead of time. Blame ispartially to higher than estimated demand. Amazon did say that one million signed up for prime in the first week of december. There were also some issues with the weather, although you should argue that they could have anticipated that as well. You cover logistics, you know the ins and outs. Where do you think ups really went wrong at the end of the day . The crux is they were not able to protect the weather. There was a shortened shopping season this year by about five days because of where thanksgiving fell. Demand just over exceeded their capacity. Shortterm, not a great aim for ups in terms of the pr story, but longterm, it is a great aim. Ecommerce is picking up faster than people think. Ups and fedex are huge beneficiaries of this. Is that really the message here . We are not buying at brickand mortar stores, we assume that we can do everything online. I think what we saw this Holiday Season was traffic down at Retail Stores 20 into the holidays. And then what we saw here was this ecommerce story. It is bigger than people think. The department of commerce has always said ecommerce is six percent of retail sales. That has always been a low number. It is much higher than that. Retail sales on ecommerce in the week leading up to christmas was 14 of sales. The problem is, consumers are left with less trust in the system the closer you get to the holiday. So i come away with a more on that if i better make sure i buy it in person or order early. That it isargue making us procrastinators and perhaps these hiccups will make us order earlier. That is my take away. You have to order early or you have to shop in the store. I wonder what it will mean for sales next year. If you look at amazon, every quarter, and jeff bezos is spending millions on additional gesture grecian centers, put geomet centers, bringing them closer to the big markets around the world, knowing that the volume is surging. If you speak to amazon, they fulfilled their obligations. Ecommerce, these companies are making huge investments because they know this will become a bigger part of the economy. Will you think ecommerce morph into brickandmortar commerce . You have to have the pope geomet centers closer to people. It sounds that way. You look at the amount of money these companies are investing into their full film and centers, if you think about it, sameday delivery is coming to a lot of product categories. What do you have to do for same day delivery . You need inventory on the ground in local markets. I was really hoping for a drone. Amazon is pushing off the blame to ups, but to your point, which is what a former guest said, amazon could have done better to manage those expectations. Would it have been so bad to say, you cannot get it by Christmas Day. I wonder if next year you will see a shift in customer patterns. That said, you know that amazon and ups will move heaven and earth to prevent this from happening again. Amazon, ups and fedex are pretty much the only game in town. So again i come back to that collaborative relationship. They have to work something out themselves. We are looking at fedex stock come up one percent. Do they come out the winner here . Think if we did not have the Severe Weather that we had earlier in the month, we would not be talking about fedex or ups. We would probably be talking about wrapping up the year. I think the weather played an important role. It did create some bottlenecks, which when they were opened up, flooded their system. Are we supposed to be prepared for that . We will be running a piece later today. Arent you supposed to be able to manage this . You are hedging it out. As you know, when you listen to the weather for report before you go to work, it is difficult to predict the weather. You could hedge it, but there are no Better Networks than fedex and ups, coupled with the service they offer with the usps, every home is touched. You can get strawberries from Central America shipped to california, covered in chocolate, and then deliver to maryland. We have an incredible robust supply chain. We do, but it just broke down. Question to you, as the transportation and logistics analyst, as you look at the systems, what do these Companies Need to do to do better . How many packages were really impacted . We do not know what that number is. It could have been 10, it could have been 1000. After one hundred 50 million packages, 1000 is not a disaster. Of 150 million packages, 1000 is not a disaster. Amy they need to look at some thirdparty carriers, if they were the issue. We really do not know yet. I am sure they are doing their postmortem now and they will be telling customers and investors what happened and what they will do next year to make sure this does not happen again. This is not the first time this has happened with packages not coming on time. It happened a couple of years ago with ups. It was weather related. You have to have a plan b. Rest assured, the kids still got there gets. Daddy was in charge of that lastminute shopping. Thought those things ahead of time. Coming up, from zero to hero. Why last years worst stocks were this years best performers, and how you can repeat that this year. As we look ahead to 2014, we got some advice from dr. Doom himself, nouriel roubini. He is talking about where he would put 1000 right now. He is a bit more optimistic than you think. Shall be first, at least pretty close. Time for a bit of insight and action. Let me show you something. 2012hree worst stocks of made it into the top 15 in 2013. Best buy was dead last in 2012, down 49 . What happened . A new ceo, and it is up 239 . Hewlettpackard, the same thing. Pitney bowes, third worst. Number seven this year. Maybegot me thinking, they are not first but they are in the top 15. So who was last this past year . Look at what we found. There are the three worst performing stocks in the s p 500. Newmont mining, cliffs natural resources, peabody energy. What do they all have in common . They. Out of the ground. Pull stuff out of the ground. Serious that this is happening as the imf says it will be upping their global forecast. Down, maybeave been just in time to catch the upswing. Newmont,er of fact fine. Gold is miserable. Gold has lost money for the first time in 12 years. Just focusing on cliffs and peabody. Talk about a cycle stock. If you catch these cycles correctly, you set yourself up to potentially make some real money. Finally, over here, peabody. Same story. All we are talking about is getting the cycle right. I think i would rather be long on this stock, rather than short, especially as the imf says growth may increase next year. Losers the three biggest to the three biggest winners. We focus on netflix, micron, and best buy. The head of north American Research for bloomberg industries. He has been top ranked by institutional investors. Always a pleasure to have you here, paula sweeney. Netflix, best buy, two of the top three. They are up more than 240 . Terrific performance. Theyuestion is, have tapped out, can they see this continued upside into next year . Netflix books story is an incredible story. Consistentlys been in momentum stock driven by subscribers. If you think about netflix, are they continue to add subscribers oblique . Bulls think they are, the will tell you that is the driver of the stock. 30 million subscribers in the u. S. , 10 million outside. The bulls will tell you this is entering into a global story, it is about the growth of online video. That is what will be needed to drive subscribers. Carl icahn was a big supporter. I also spoke to his sons partner. It was interesting because carl decided they needed to get out. I do not know if that sentiment was echoed across the board. Brett love david and the company and spoke a lot about the potential would subside subscriber growth, and that was the key. Karl says that when anything is better than 300 , you take the money and run and you do not want to push your luck. I wonder if investors are looking at the Stock Performance so well and they say, maybe i need to look at the bottom of the barrel, such as you pointed out. One of the bullish case for the netflix story is the Global Growth of broadband connections. If you think about how you will get online video outside of the u. S. Where you do not have a robust cable or telco plan, it is wireless broadband. If you look at the longterm projections over the last next five years, wireless deployment in europe and asia, some very bullish forecast. If you think that will come to fruition, that would drive consumption of online videos. Which companies are doing the best . Theme,agree with that the buildout of broadband, who is doing it best . In europe, Liberty Global is one of the larger companies. If you think about the european cable companies, they are deploying broadband fiber points to drive wireless consumption on your devices. Wise, i was speaking to someone in hong kong, and they said they could not get it looks there. Are their contact content agreements . Tough, that could be a issue for the netflix of the world as they negotiate contracts. Is a key theme. Glad you are here, paul. How should you invest in 2014 . It turns out dr. Doom is not as negative as you might think. We will talk about where this legendary bear is putting his money now. And the little blue bird that keeps on flying higher. Twitters unbelievable surge. Theouriel roubini is economist known as dr. Doom, and he was given that name because he correctly predicted the collapse of stocks and real estate in 2008, at a time when those markets were at alltime highs. Stocks and real estate are surging once again, so what is his prediction for 2014 . The outlook may surprise you. Every day you have to wake up and make sense of this consecrated world. I preferred to be called dr. Realist. I am neither a pessimist or an optimist. In 2007, i predicted the Global Financial meltdown occurring. Because of that, i got the name. Are too optimistic took on risky assets. If they had followed my advice, to be underweight in u. S. And global equity, we could have reported that correction between novemberf 2007 and 2009. March 2009. Right now there is a Global Economic recovery, so you need to be a realist about what can go right and what can go wrong. You do not want to listen only to people that agree with you. It is more important to see why people disagree with you. I make a special effort to listen to those who think they are better because that pushes me to ink harder about whether my views are correct. First of all, you have to be diversified. You need some of your money in the u. S. , abroad, in emerging markets. Interest rates will rise, so you want to be on the upward bound. The Global Recovery will occur, so you want to be marginally overweight in equities, a bubbly global equities. The most exciting ipo of the year is getting more exciting, twitter surging and since then look at how the stock has performed. In december alone, shares have climbed to 70 , a market cap of 40 billion. Just to show you how big that is, twitter is worth more than Companies Like target, cbs, and delta airlines. Shares are surging on no news. Not reported its firstquarter earnings yet. What is behind the hidden rally . We want to go to our panel for this. On . E, what is really going i have a theory. I have a area a lot of people in there want to be social networking space. That means facebook and twitter. Facebook is old and twitter is new. Some of it. Robably you are talking about sentiment. We have been talking about twitter improving its mobile ad strategy. So there is a fundamental basis underlying it. But then you have the sentiment you are talking about with status, achieving cult this move that does not have to do with fundamentals. Stockis one interesting sage who weighed in recently on this, he tweeted about it. He said had is a company have stock value of 41 billion . The coming crash, he says, will be horrific. Even analysts who were bullish have price targets below where it is right now. You scratch your head and say our people really going to get burned . Matt drudge seems to think so. This is a classic case of quarter and window dressing. A lot of Portfolio Managers had this in their account from the ipo. They probably need to make sure wey have it so they can say were big investors and twitter, one of the best ipo. What is happening is that people are buying the stock, they are pushing their discounted cash flow models out many years to bring a discount back to today. It is certainly pricing in growth over the next five or six years. It is a steep valuation considering everything. This thing is incredible. Let me show you a few comparable valuations. What were talking about is cash flow. The total stock market capitalization plus all of the bonds and then divide that by the cash flow. Just another way of looking at value. Like price to earnings but there are no earnings. Google, 12 times. Facebook, 20 three times. And now look at twitter. 301 times. Talk about expensive. It is off the charts. Charts,e have done bar these three would have been so low because the scale would be off. I can remember in 2000 my mom would want to buy a particular stock because it was kind of like as cool as having the latest handbag. Cmgi was one of them. I was able to scoop it up. I would say, mom, do the evaluation. You wonder, is this the same thing where you have a lot of inestors saying i need to be this space. I need to own this. This is the hottest thing. They are demanding it. And also Portfolio Manager saying i have to have this because my investors are going to demand it so there is a race to get it. Is partially the case. One of the issues is some scarcity value. If you are able on social media and you recognize one of the sources in growth is on social media, there are not too many ways to play it. It is facebook, twitter, maybe linkedin. It is a limited love stocks. That might be a little bit of the scarcity issue driving the names up. Look at what facebook has been able to do on the mobile advertising front. Twitter trying to follow in those footsteps. You think about video with mobility, and it is a very real possibility that this is the future. This company does deserve this kind of valuation because there is that opportunity. Yes, it is possible. It is just a matter of showing the growth is potential the Growth Potential is going to become reality. You can talk about the targets all the want. Aree fair valuations meaningless to people why to buy the stock. Eventually it is going to meet these growth targets. Arecurrent valuations meaningless to some extent. Who thought that flicks netflix was worth what it was trading at . Into 2014 itoing would have been the best performing stock this year. Adam, i know you have a beautiful stock chart to show us. If youre not afraid of heights. Look at this thing. Early november. It was 40 for a long time. Look what happened. North of 70. In just ay doubled matter of weeks. There are a lot of believers here. A little scary. Thanks, the whole gang. Closerup we will take a look at americas aging credit system. His target really to blame for the data breach . What wente to deliver wrong at ups. We are digging up clues to the delivery rose next on street smart. A two companies are having rough Holiday Season. It is making it tough on you and me. Were talking about target and ups. Very different situations, starting with target, the data breach exposing credit cards used in stores hand has resulted in a classaction lawsuit, 11 customers are claiming target was negligent. They may have a hard time proving it. For more on the legal ramifications we are joined by a libya. So what does target we are joined by olivier . What does target say . Customers are furious because this alleged breach started on november 27 and it was not until december 19 that they started to notify customers. Customers are furious. Understandably so. I did not realize it was that long. People had money siphoned off. I have your name, card number, and the security code. All of the information to make a fraudulent card. You do not hav