Transcripts For CNBC Closing Bell 20140613 : comparemela.com

accomplished investors in their own right. plus there's so much to discuss. tyler, we're going to talk to the coopermans and the millers about where they see this market going. the incredible valuations we've been seeing in some companies like open table. speaking of that deal today. bought by priceline for month than $2.5 million. it will be interesting to hear about that. and plenty of other occurrences in this space. of course we've got to talk about oil, about some of these new tech developments and much, much more. >> apple's not falling far from the tree in those cases. interesting to hear how they invest alike and how they invest differently. in markets right now let's take you through the three major averages. the dow up 32 points. about .2 of a percent higher. the nasdaq a relatively small gain of about 12 points at 4309. and the s&p 500 moving up today by about five points, a quarter percent at 1935. joining our "closing bell" exchange, kelly connelly from jhs capital advisers, rich petersen from s&p capital iq, ken mahoney from mahoney asset management. john manley from wells fargo funds management. and our own rick santelli. welcome one and all. kelly, i want to start with you because you made the case that now is a good time from where you see it to take some profits that's different from the views of a couple of our other panelists which we'll get to in a moment. why do you say that? >> well, i think that we have to factor in some behavioral finance into the equation here. i do expect a pullback. we're going into the summer months which is typically very slow for the market. on top of that we've got the midterm elections coming up. and given the conduct of the government over the last several years, i expect more turmoil and more volatility. and the market doesn't like uncertainty. we're in the fifth year of this bull market. so i think that as far as the economic news we've heard as much good economic news as we're going to hear for a while so, i think people should take some profits off the table, and i am a big advocate of asset allocation. i like the short to intermediate-term bonds. i think you should keep it low duration. but i think there's some good value there. >> ken, a couple of key developments in the last 24 hours, and that is -- by the way, totally aside from this which we'll get to in one second, you have intel coming out shocking the markets frankly by saying it is seeing some strength in business spending on pcs and then you have priceline's splashing out $2.6 billion for open table. how do those two things change the dynamics here of markets if at all? mr. ken. >> oh, i'm sorry. the markets are going to remain choppy here, no doubt, but still an upward bias. and twoef kind of look at that old adage that's still working for investors, a trend is your friend. and until that's broken we kind of have to stay with it. look, the biggest story of the year so far is the low volatility. at least coming into this week. we see how quickly that can change. but even with the added volatility look what's happening. we have a lot more m&a activity. you have this monetary policy around the world supporting local markets. and on top of that you have pretty much a trend that's intact. at this point we just kind of stay the course, realizing we can take some incremental gains here and there, but at this point the bulls' case is pretty strong. >> even though, by the way, in britain -- sorry, tyler, i was just going to say they're not going to be quite as supportive over there. mark carney just came out and said, sort of sounded the message listen up, they're going to have to do more to raise rates. sorry. never mind. go ahead, tyler. >> i was going to turn to john manley and get him to address what kelly said about seasonal issues, the impending midterm elections, the idea that a lot of the good news is already in the prices. and yet you say that the market and some of the fundamentals that were relatively poor a year ago and went to better now can go from better to actually good and that's why you see the future looking a little brighter. >> i still think it's okay. seasonality. you can always talk about seasonality. but quite honestly i wish it were that simple. let's face, it with technology the summer's not the summer anymore. i'm still connected even at the beach. so i don't think things slow down that much. it's the fifth year of the recovery. last year was the fourth year. next year might be the sixth year. these things go on longer than people think. the fact is the fed is still accommodative and they're going to stay so for a while. the earnings numbers are still coming through and the valuation's okay. that seems to be okay. we can actually go from okay to good. you can still make money if things are in the good territory. it's not quite as fresh and snappy as a year ago but everything else is in place. >> rich, what do you think? what do we need to watch? >> i'm going to join the chorus with john and ken, my other colleagues on the panel. we're seeing positive numbers in terms of earnings. valuations look reasonable. m&a activity is very robust. but really the anchor of it all is an accommodative fed. commentary next week from janet yellen at the fomc meeting. the past two out of three scheduled meetings the weeks of those meetings the s&p's been positive. i think going forward that we're going to see incremental gains in the economy. hopefully we'll see improvements in industrial production on monday. gains maybe on tuesday. the philly fed on thursday. all in all it's a catalyst for better improvement. but really in the upcoming weeks we're going to the twilight zone. we're ending the first quarter reporting period and not going to see the second quarter earnings until sometime in early july. so that time a lot of -- holding the market capital, which. could be geopolitics. >> rick santelli, jump in here. what would you like to see? what do you expect to see? >> i like what our guest said, the trend is your friend. and i would just like to add, especially when the fed is part of the trend. and i think that really dovetails nicely into the notion that we will learn on wednesday of course if there was any changes. there shouldn't be. janet yellen's pretty much following the road map that was left by ben bernanke whether for good or for bad. we're going to see more taper. and eventually we'll move more toward what carney may have hinted at. and i think what mr. carney talked about from the bank of england on that talk the night before last is super important for a number of reasons because many look at the world as multispeed. you have the u.s. and the uk moving one way. you have stimulus in china, japan, and europe. i don't necessarily look at it that way. i think all stimulus is fungible, and i think that the relationship i would pay most attention to is how the guilt yields running up to the highest levels in april, 2.75, how it affects the relationship between bunds, 10s, and the u.s. securities. those will keep you out of trouble and the markets that still have discovery of sorts which is the global fixed income markets. only of sorts of course. >> i wonder, kelly, if what john manley's saying is the case and the summer really isn't as relevant as it used to be then what accounts for the fact that volumes have dried up in equities lately? >> well, i think that the global markets, people are putting maybe some money in emerging markets. i think there is some enthusiasm. i think overall the market looks good but i think in the short term we are going to see some volatility because of some of these issues coming up. we saw what it was like in the last election. there was a lot of uncertainty. i still feel that now would be a good time to take some profits and just sit on the sidelines or reposition a little bit. but i do think over the long term the prospects for the market do look very positive. >> ken, you mentioned, and i would note that of all the stories that have taken place for the first 5 1/2 months of this year the one that stands out to me has been the pace of m&a activity. do you expect that to continue, number one? and number two, apart from what it may mean in individual sectors, is that a constructive thing for the market more generally? and if so, why? >> look, i think it's going to continue. there's still some value out there. companies are not growing their top line. so they can't grow their top line. what do they do? they try to shrink their expenses. one of the best ways to do that is to merge with one of their competitors. on the second question i think it bodes well. supply and demand. you're taking some supply off the market. so i think the m&a activity is very strong, and if you look back on markets that have performed very well in years past we had allowed m&a activity. so that's a pretty high correlation to what we're seeing right now in this market. >> for the other market too is the activist investor, we haven't talked at all about carl icahn this week. probably wishing him a happy father's day. but the fact is he made the -- the family dollar store. the activist investor is still going to be a driving force in deal activity going forward. >> we talk so much about overvaluation in the tech space but it's some of these consumer names we're really seeing the premiums. >> bargain you're finding at the mall is not your shirts and suits. it's buying the companies. we heard the announcement today from sycamore partners. >> it's funny, john, because who would have thought? consumer discretionary is the poorest performing sector of the year. we're talking about troubles, problems with the u.s. consumer, top line isn't growing, and yet in the very consumer space and consumer staple space, by the way, there's been so much activity. >> staples are very predictable and people pay for that. i don't think that's necessarily wrong. i think it's worth noting when it comes to really high growth stocks they very seldom blow up forever because the valuations went bad. it's usually the fundamentals going down, and this seems to be purely a valuation correction and those things are very ephemeral in my memory. >> you know, john, you mentioned or one of my notes indicated you think investors are less scared than they were a year ago. this week would suggest that maybe they have more to be scared about than a week ago. >> and they could become much more scared but down 5%, not 20% or 30%. one of the keys of bull market correctionsize they're nasty and brutish and shirt. they happen very quickly, they come out of nowhere. and that's because the sentiment when it turns positive has no deep roots. people are easily uprooted in their positive sentiment back to where they were a year or two ago. >> all right, folks, thank you very much one and all. we appreciate it. fathers, have a great father's day weekend. and everybody have a good weekend. kelly? >> all right. 50 minutes to go until the close. looks like stocks are near the session highs with the dow up about 49 points ar a two-day correction here. >> intel hitting a high on upgrades. raised revenue guidance. but will this be a one-time pop? we'll talk to a couple pros next bin tell's potential to fire up huge gains in your portfolio. also ahead, open table soaring to new highs on priceline's $2.6 billion buyout, and that's got some other stocks surging on takeover speculation as well. seema mody will run through the winners live from the nasdaq. and blackrock's chief investment strategist for fixed income jeff rosenberg previews next week's federal reserve meeting. find out what he's expecting in the wake of this morning's surprise dip in wholesale inflation. plus we'll get his reaction to the bank of england governor hinting at a possible rate rise, maybe even later this year. but there are no branches? 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>> tyler, mary thompson now is rounding up some of stayed's big movers for us. mary, what can you tell us? >> well, kelly, modest gains through the markets but some bigger gains for individual stocks. we begin with international game technology, the biggest gainer in the s&p 500. reuters reporting it's drawn takeover ints from ron andrews, forbes, g tegg and carl isle. as a result its shares are trading up almost 10% in today's session. therapeutics surnging on positive phase one data for its treatment for multiple myeloma. trading at nearly 15 times its normal volume and its stock is up 66 1/2%. a different stoirm for onkamed. the stock is plummeting on news early stage trials testing on would of its experimental cancer drugs. this is due to concerns about bone damage. and the stock is damaged too, down about 10 1/4 percent. we end with intel gain ground after boosting its second quarter revenue guidance because of stronger than expected demand for business pcs. intel's stock is now up 6.7% at 20.83. kelly, back to you. >> thank you, mary. huge move anyone tell leading the dow right now. do these intel upgrades and the raised guidance mean you should add it to your portfolio? >> let's roll it out with chelsea adviser group's tom forte who says it's time to buy and tim lesco who says don't act too fast. tim, let me start with you. you're skeptical this is really a sustainable report from intel, their forecast of higher sales based on pc sales. >> well, that's right, tyler. i think this bump in intel sales were really on the heels of the windows xp support expiration. and we have a hard time wanting to invest in things based on a 10-year-old operating system expiring rather than something that's new and really moving forward in mobility. so while this is probably a relief to shareholders that things maybe are not as bad as they thought they were, i have a hard time really seeing this as a long-term earnings driver. >> tom, what about you? >> i think what you're seeing here is better than expected demand at the enterprise level for pcs and to some extent you're seeing a moderation of the decline. if you look at the idc forecast, they're projecting a 6% decline in pc units this year, which is an improvement from down 10%. so i think it's sustainable. we don't formally cover the name but i'm bullish on intel. >> let's go back to you, tim, and talk a little bit more. basically, what you're saying is the growth in pc purchases by businesses is being driven by the fact that they have to replace some of the existing stock because microsoft isn't going to support xp anymore. you still believe that the real endemic change is toward laptops and more importantly mobile products, the ipads and other tablets? >> very correct, tyler. if you look at it, most people are moving to six or seven screens in their life, but it's not because they're moving to a home computer. and the fact this is on the heels of enterprise sales really drives home that point. as businesses were forced to move oust their xp machines, as we were in our offices and we saw pc boxes all over the hallways of our buildings, we just don't think that that demand is sustainable through next year. it's a one-time event. if you remember, in the '90s we used to move forward because intel would move pc architecture up so markedly that you'd have to buy a new pc because it offered so much more. now you have pcs, a new chip doesn't really offer that much -- >> if you don't like intel -- >> you're really buying things based on how mobile they are and how useful they are. and all we talk about all week are the valuations of things like uber, the valuations of all these apps and technology companies and none of them really care if they have intel inside. >> forgive me for interrupting, tim, but if you don't like intel quickly-s there a name you do like in semiconductors? >> semiconductors are a hard space because most of them it's an aging business. so you can look at things like qualcomm. there's also arm holdings that makes the architecture of mobile chips. but most of the rest of the semiconductor business are mostly in commoditizing businesses. and it's very hard when you see a business that looks like it's going to have long-term margin zroux to get all that excited about down six pcs instead of down ten. >> but here's the interesting thing, tom, and i'm curious what makes your bullish case for them. these are well-known concerns out there in the market and even this issue about the pc upgrades spurred by windows, and yet look, people have had all day to digest this. the shares are still up 7%. >> yeah. i still think that there's a role for intel in the internet of things or in the tablet world. i don't think that just because you're seeing declining sales in pcs means that intel's stock is perpetually on its way down. so i think that clearly you're seeing the consumer and to a lesser extent the enterprise transition away from desktops and laptops toward tablets, but i think there's still opportunities for intel in that future environment. >> gentlemen, thank you very much. have a good weekend. we appreciate your being with us. >> thanks, guys. >> thank you for having me. >> 40 minutes to go until the close. the dow's up 32. and interestingly enough, tyler, because it's a price-weighted index that 7% move in intel just really doesn't move the needle that much. even microsoft trading higher on the back of it. but a company like walmart can offset a lot of that move as it's been weighing on the dow. the s&p 500 meanwhile, about 5 and the nasdaq 10. >> president obama says the u.s. is exploring options to help iraq's government but that we won't be sending our troops back in. an update on the latest developments next and how the oil market is reacting. plus, a global policy and security expert weighing in on the potential for civil war in the war-weary country. ♪ ♪ [ girl ] my dad, he makes underwater fans that are powered by the moon. ♪ [ birds squawking ] my dad makes airplane engines that can talk. 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[ train whistle blows ] ♪ my dad works at ge. ♪ one of those days where markets really sold off. looks like we're going to regain some footing. interestingly enough, tiler, fridays are now one of the better days in the markets in recent weeks supplanting the old turnaround tuesdays we used to talk about until that fell apart. meanwhile the dow up 21 points as we head into the final half hour of trading here. about the nasdaq up eight and the s&p up four. >> and this a friday the 13th, by the way. escalating tensions in iraq sparking a jump in crude oil prices this week. light sweet crude up about 4%. just since last friday. through see the price right now, 106.90. a rather moderate rise today. president obama making a statement on iraq earlier today. and he made it clear that u.s. boots will not be going back on the ground in that country. michelle caruso-cabrera has the very latest developments. hi, michelle. >> thank you very much, tyler. both the iraq government and the u.s. government struggling to come up with responses that might turn back the islamic insurgents that have taken over the northern -- some of the northern parts of the country. the iraqi government recruiting more men to join the military. those recruits will get one day of training before they are sent to defend the capital city of baghdad which the insurgents say they're going to try to attack and control. presumably these new recruits are to replace the u.s.-trained members of the iraqi military who abandoned their positions and disappeared in the battle for mosul earlier this week. what you're looking at, their discarded uniforms so that they could blend in with civilians. that's what you see in this video. president obama made clear today that u.s. troops would not be going to iraq and that his national security team is working on possible help for the iraqi government. but he made it clear that he placed a lot of blame on the current iranian government and prime minister nuri al maliki for not making tough decisions when he needed to and not accepting american help previously when it was offered. although oil prices rose sharply again today after falling back, thus far there doesn't appear to be any disruption to supplies. remember most of iraq's oil production is in the south of the country and military analysts are skeptical that the rebels have enough resources or members to get that far south, at least for now. guys, back to you. >> michelle, thank you very much. and let's get some more insight on this with david gordon, chairman of the eurasia group. mr. gordon, welcome. >> great to be here. >> i don't know quite how to express this but it seems to me based on what michelle just said about the iraqi mearmy melting away that one of the problems in iraq and by extension the other countries in the middle east is that there is more loyalty to ethnic groups and to religious factions than there is to country. is that partly right? >> yeah, i think that's in the levant, in lebanon, in syria, in iraq that's the story, is that the sectarian cleavage within islam, sunni versus shia, is really determining what one's alliances are. and when the army in the north of iraq collapsed it was because this was a mixed army and the sunni elements didn't want to fight and the shia elements felt that oh, my gosh, the population doesn't want us here and they just exited the region. but it's going to be a very different story as you come near baghdad. >> david, give us the range of possible outcomes from best to worst as you see them right now. >> yeah. i mean, there is no good outcome here. i think that the best outcome here would be that maliki gets it, cuts much better deals with both the sunnis, brings them back into the political process in a more meaningful way, cuts a better deal with the kurds, and you re-establish some kind of a political center there that's multisectarian that can slow ly recreate order. the worst case scenario, and it could very well happen-s that we get a resurgence of the civil war that we saw back in 2006 and 2007. that was really a horrific event. >> and back then there were american forces there. now there are not. >> that's right. >> and the limits of american air power in this case are extreme. >> will iraq ever -- can humpty dumpty ever put iraq back together again? >> that's the big question. they're not going to put it back together again on the basis of the kind of shia dominance that we saw in the period since the u.s. left. that period has been a time of real consolidation of shia control at the expense of particularly sunni influence but also kurdish influence. so that shia-dominated iraq a la the last three or four years, that's not going to ever come back. the question is can you put something back that looks a little more similar to what iraq looked like in 2009, 2010, when things were actually getting better? >> but david, here's what i don't follow. it sounds like one of the only real -- or one of the more possible outcomes here is that it is in fact that consolidation of the shia parts, around the administration, perhaps some southern areas of iraq, maybe kurdistan a separate issue up to the north, but the sunnis meanwhile are going to obviously come under the influence to some extent of what's happening with regard to isis aserth its territorial claims, be they what they are. why is that period you're referring to of a couple years ago seen as anything but a transitory place that we will never be able to get back to? >> well, i think that is more likely. i am not optimistic about the return to a multisectarian coalition here. i think the likely outcome, i don't think that isis is going to be able to take baghdad. i think baghdad is overwhelmingly shia. elite iraqi forces are in baghdad. the iranians are going to come in and give some help. the kurdish elements will come down to help. so i don't think isis is likely to take baghdad. but i think the more likely outcome is a very unstable situation where you sort of have this isis stand in the middle of iraq challenging the shia and the kurds along the line where the boundaries between the main sectarian groups are in iraq, and that could go on for a very long time. it will not be pretty. >> and in the meantime, oil is moving toward the highs of the session. we know some of those -- baichi, for example, that's one area that's currently -- whose future is unclear and has much of the refining capacity for the country. david, we'll leave it there for now but we really appreciate your perspective this hour. >> great. thanks for having me. >> 30 minutes to go here before the close, tyler. as prices have gone up a little bit markets are coming under some pressure in the back half of this hour. the dow only up about 12 points now. 2 for the s&p. up next, find out why blackrock's head of fixed income, jeff rosenberg, says the ten-year treasury rising to at least 3% by the end of the year. it's at 2.6% now. go figure. rosenberg will state his case. >> and in honor of father's day this weekend we've got a very special hour planned after the bell. two wall street titans and their sons on the show to talk about these markets and the economy. omega advisors' leon cooperman and his son wayne who runs a hedge fund along with llm bill miller and his son, also bill, at the same firm. you don't want to miss it. we'll be right back. what can your fidelity greenline do for you? 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with us now, jeff rosenberg, chief investment strategist for fixed income at blackrock. you know, jeff, at the start of this year no one thought paws the rates were at 3%, no one thought and i assume you were among them, that the ten-year would be a better returning asset than many other assets at this point in 2014. >> well, actually, we did have that view as well, but we did favor the longer end of the curve. we had this kind of funny outlook this year, how i stopped worrying and learned to love the bond was our lead theme from dr. strange-love. the back end of the yield curve has been the best place to be in fixed income even with a rising rate environment. you can reduce some of those risks in flexible products. that's what we've been doing. and really the risk, i know the focus so far has been on the ten-year but i really want to direct your attention to the risk is not in the ten-year, the risk is in the front end of the yield curve. that's where the volatility's going to be. that's going to be next week's story and i think that's a much bigger story for pups. >> wait a minute because this is fascinating. all anyone's been doing is piling into the short end to avoid the risk at the long end. so what you're saying everyone just jumped in front of a train? >> what i'm saying is people yumped out of the frying pan and into the fryer with that kind of strategy. that's rearview mirror investing reacting to what happened last year, hiding out on the front end of the curve. the front end of the curve is what moves most when monetary policy moves. we're getting a little bit of a preview of that over in the uk right now. the kind of moves we've seen in the two-year there. that's what you can see here in the united states. it only takes one word from the fed or enough data for the market to really move there. we think that's what's going to happen here going forward. >> what did you think of the chancellor's remarks this morning? or excuse me, the remarks out of england earlier today about interest rates. do you expect them to move before the end of this year, and does that quicken the pace of any rate hikes in the u.s.? >> twofold. first, the speech last night from carney was certainly setting the table for an earlier hiking cycle than the markets were expecting. you saw that priesded into the uk curve this morning. and the uk economy is a little bit ahead of where the u.s. is. it's a little bit of a preview of where the u.s. could be going. and maybe, just maybe we'll see next week here, june 18th, wednesday, we get the big fomc meeting. do we see janet yellen follow suit? because markets in the u.s. are very complacent. the same concerns that carney expressed yesterday, complacent about the timing of that first interest rate. we're pricing in none ever that as a potential risk. that's really where the bigger risk in not just the fixed income markets but for all markets for next week. >> absolutely. it's the number one topic of conversation this week, whether the fed might try to do something to kind of wake markets up a little bit. but i wonder after the ppi report this morning do you think, even with the geopolitical backdrop being what it is that the o'odds of that are reduced somewhat for next week's meeting? >> i don't think one report is going to do it. i think the total of the data has definitely gotten better overall. i think it tells the story that the economy's healing. inflation overall is rising. so it becomes a harder message for them to continue to say we don't have to worry about inflation. we've got to acknowledge the higher inflation. the statement of economic projections comes out along with the meeting next week. you'll see them have to upgrade their inflation expectations just in response to what's already happened. that might fuel some concerns about what's about to happen. it's going to be much harder for them to argue we don't have any inflation and therefore we can stay low for longer. i think they're going to have to eventually change the message. whether that happens this meeting or not no one knows but for the markets risk it's certainly the front end of the curve where there's a lot more risk for fixed income. >> and all this adds up to a 3, 3 1/410-year bit year end. >> for the year-end forecast it's a 3%. that's more of a gradual rise. that's reflective of a better economy in the second half of the year. you get a little bit of a modest increase in the back end of the curve. but again, you've got 2.60 going to 3 for the 10-year. you've got 43 basis points going much, much higher in the front end of the curve. so again, i think the focus is much more there. >> just a question. isn't it's case as well that the fdic and some others, the fed have been saying to banks that they themselves need to move to the shorter end of the curve to avoid interest rate exposure over the next couple of years? and do you have a sense that the retail investor there might be some big bank or institutional players who are vulnerable here? >> yes. i mean, it's been a very popular strategy. and really it's not so much moving down into the front end of the yield curve that has been happening. what's unique about this time is it's a zero interest rate environment. and a zero interest rate environment means that investors have been moving out the curve from cash investments. so you have a lot of short-end yield curve investments across retail, institutional, spectrum that are really cash surrogates. that's worked reallyrail to try to hide out in the zero interest rate environment. as you leave normal policy and zero interest rates that's going to be a very volatile transition because a lot of those investments don't really function as cash and they're kind of sitting out there in today's environment. >> jeff, you really rang the bell there. thanks very much. consider yourself warned, folks, if you're in those shorter maturities. thanks very much, jeff rosenberg. have a great weekend. we've got about 20 minutes of time left before the closing bell. right now the dow is up 21 points. >> our special father's day edition of "closing bell" is coming up. leon cooperman, bill miller, and both of their sons who are also wall street pros will be our special guests. wait till you hear where they see markets closing out the year. plus we'll also talk out some father-son issues. so stick around. >> up and next wait till you see which other stocks are surging on the heels of priceline's buy skrout of open table. seema mody has the news live from nasdaq. right after this short break. kid: hey dad, who was that man? dad: he's our broker. he helps look after all our money. kid: do you pay him? dad: of course. kid: how much? dad: i don't know exactly. kid: what if you're not happy? does he have to pay you back? dad: nope. kid: why not? dad: it doesn't work that way. kid: why not? vo: are you asking enough questions about the way your wealth is managed? wealth management at charles schwab. all stations come over to mithis is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. welcome back. heading into the close, markets have been fluctuating here in the last several minutes. we're up about 12 right now. the nasdaq's up 4. the s&p 2. >> and priceline's $12.6 billion buyout of open table sending the online reservation company's shares through the roof along with a few other stocks. seema mody is at the nasdaq marketsite. what's the deal, seema? >> tyler, that's right. priceline extending beyond travel with its acquisition of open table. this is a $2.6 billion deal. shares of the restaurant reservation site soaring in today's trade, up about 48%. speculation on which online booking company could be acquired next is providing a lift to some of the other stocks in this space. let's run through some of the names. yelp, which is more of an online review service. a big mover in today's trade. grub hub, a site used to order takeout, delivery, and read restaurant reviews. it went public earlier this year. that stock up about 8%. and groupon, a marketplace for retailers and merchants to offer deals. also higher on the day. buyout speculation helping shares move to the up side. i was speaking to one analyst who said it's clear that with this acquisition of open table that priceline is focused on creating this comprehensive booking experience for its customers. it will be interesting to see, guys, if other internet companies follow priceline's lead and also find value or make an acquisition in this space. tyler and kelly? >> all right, seema, thanks very much. we've got about 15 minutes before the closing bell. the dow is higher by about 6 at 16,739. despite that the dow and s&p heading for their first down week since mid may. two of wall street's biggest names, leon cooperman, and bill miller, will be speaking with us next about where markets go from here. and on father's day we thought we'd invite along their sons, who themselves are investment pros. that's right. don't miss any of that special coverage coming up, next hour on "the closing bell." financial noise financial noise financial noise all right. the dow industrials right there roughly between 10 points higher, 20 points higher. right now 15 points higher at 16749. nasdaq up about 5. and the s&p at 1932, about 2 1/2 points. joining us now, independent investment consultant david darst. david, as always, good to see you. what will you be watching this week and early next week? what are the keys you'll be focused on? >> well, you're going to have a bunch of news that obviously you've got a two-day fed meeting next week. you've got the lead economic indicators. so you're going to watch that. you're going to see how the nahb, that's the housing confidence number, tyler. so you've got a whole bunch of things. basically, the market has handled a lot of tough punches this year. they all start with the letter c. china slowing down. the crimea situation. the collapse of many of the biotech stocks. and finally the change in the fed tapering pace. i.e. they're coming down 10 billion per month here. and the market's been able to take this. if it takes, i'm amazed at how many people i talk to in the investment business, tyler, kelly, that basically say i'll buy the market 5% to 10% lower. and that is always -- you go back, that is always a sign that it keeps moving on higher. now, 16 -- i'm quoting henry mcveigh here. 16 of the last 20 mayes the may to october period, you have a correction, 16 of the last 20 of 5% to 10% during that time period. so we're due for a pullback. but it just doesn't seem to want it. the big negative is most of these strategists have a 2014, 2015. that's only a 4% to 5% gain from these levels. you're staying for the party for one last little shake of the rattle or one last little canape. but those canapes are looking a little tired right now. >> so you think that those -- instead of raising their price targets that the market continues to perform well, instead that people say well, that's it, we got all the gains in the first half? >> that's why everybody i know loves you, kelly evans, because you are so smart because that's what they will do. they will do that. they will raise their targets if we get -- if we go to 2015. >> morgan stanley as an example. because adam parker has a 2014 price target. >> he just raised it for 12 months ahead to 2050. you love that? >> well, he did, but at the same time i say -- >> 12 months ahead. >> exactly. 12 months ahead. so it's not necessarily changing the view for the rest of this year. >> but that's only a 4.4% gain from last night's close of 1930, kelly. so that's up -- profits are supposed to be up only about 6%. that having been said, the jobs market is good. four months in a row of over 200,000. the ism manufacturing, ism services. the chicago, the philly fed, we'll get empire state next week. these things indicate what this economy lacks in strength it will make up for in length. it just keeps grinding ahead, energizer bunny style. >> so david, you know, with me all metaphors either have to do with food or sports. and i like the canape metaphor, which suggests that there's not much left on those little canapes now. so what is the implication of what you're saying for what i should do with my money? >> i think, tyler and kelly, we want to look at japan. we've wanted a correction in certain asset prices. japan has certainly had it. it was down about 12%, 14%. now it's down about 8%. the big -- the crucial moment is going to come at the end of this month when prime minister abe comes with part two of some of the structural reform that the market's waiting for. it cannot only be monetary stimulus. that guy kuroda, he's their janet yellen. haruhiko kuroda. he's done a very good job doing his chart. but we need the politicians. we need structural reform there. labor market, immigration market reform. we need certain things that are sort of exciting to get that market. so i think you can buy japan, master limited partnerships is another one. and some of these favorites such as the oil drillers. if we have higher oil prices, exxonmobil has only gone up half a percent this year. but schlumberger, halliburton, and baker are up 30, 20, and 18% respectively because you can't touch the oil whether you're angola, russia, nigeria, venezuela. you can't touch that oil without getting to the american drilling technology. china, nobody can touch their oil and gas without these good companies. >> and that said, david, going into this weekend how worried are you about what's happening in iraq? >> well, i think this is very serious. and i'm glad our president and people are waking up to this. kelly, it's -- iraq's oil production has gotten up to 3.6 million barrels her dper day. that has a chance to roil the oil markets. all the american men and women who sacrificed. nobody knows the number, a trillion, two trillion into this. many lives lost. many people maimed over there, these ieds, the impro viesed explosive devices. to me i'm very, very happy to see the american people, the response. the last two days leader editorial in the "wall street journal," the lead editorial has been about this is a very serious matter, this is not nothing, this is not the same -- crimea is important, but this is not the same. this is 3.6 million barrels a day production and it is shia versus sunni. there's a lot of geopolitics here, kelly. >> well, we wish you the best on your 1.5-mile swim on sunday, david. >> thank you so much. thank you, kelly. happy father's day, everybody. >> and to you. thank you, david p . up next we will come right back with the closing countdown. >> and after the bell stick around. it's coming right up. our special father's day edition of the show. i see them right here, leon cooperman, bill miller, and their sons with me for the whole hour. you're watching cnbc, first in business worldwide. she's still the one for you. and cialis for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. ...i got lots of advice, but i needed information i could trust. unitedhealthcare's innovative, simple program helps moms stay on track with their doctors to get the right care and guidance. (anncr vo) that's health in numbers. unitedhealthcare. over 1.2 billion eyeballs are on us during the two weeks at wimbledon. true tennis fans want to know what's happening, they don't want to just see what's happening, they want to know and understand why it's happening. anybody can just put data up, but we want to get a reaction, make it far more interactive. we rely on the cloud to provide that immersive digital capability. became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. all right, folks, time for the closing countdown. and as you see, the dow is up just a little bit and nasdaq and the s&p ditto. really not much movement there. the dow flurrying, fluttering higher, 23 points, 16,757. nasdaq up about 10. and the s&p 500 higher by 4. bob pisani on the floor. bob, welcome. sum up the weekend for us. and david darst is there as well. i thought you were moving on but glad you have to sticking around. bob, sum up the week for us. >> s&p down roughly 4.8% for the week. a little bit of tumult in the oil sector. but today you see oil stabilized and you see the stock market has largely stabilized. a lot of these current events, issues are not going away. the ukraine isn't going away. falling off the front page. and certainly what's going on in iraq is not going away. but the market's been very stable. david, i think you'd agree quiet today, markets near new highs. maybe it's not terribly volatile at all for sure, but markets at new highs. investors certainly benefiting. >> bob, you've talked about the effect yesterday of the oil prices going up on the transportation stocks. your rails, your airlines, your truckers, the ones who use energy. so it's very good to see that that calmed down a little bit because that takes a little pressure off of them. i'm very heartened by the way the russell 2000 and the banks have done this month. they're up about 2 1/2% this month, bob. >> and tyler, next week of course the federal reserve will be meeting. we'll be hearing -- obviously we're going to go from 45 billion to 35 billion probably. that's sort of built into that. the assumptions here. are you expecting any surprises next week? >> no surprises next week. the big surprise for me, and bob, you'll love this, being a student of the markets currently and historically. and you'll love this, tyler. the french bond right now is at 170. the last time the french bond was at 1.70 was in 1740. and the spanish bond -- >> and you were the assistant director at morgan stanley at the time. >> the spanish bond, gentlemen, is 2.70. and the last time it was 2.70 the spanish bond was 1789. these are record low yields. >> and he was just out of college at the time. the important thing is we're still staying down with the low yields at the time. >> people are searching for yield, and they're searching for safety. i can't believe the japanese and the swiss bonds are 0.7%. >> moving up a little at the close. >> thanks a lot, gentlemen. that'll wrap it up for the first hour of "the closing bell" for a friday the 13th. looks like the dow is going to close at or near its highs of the day, up about 38 points. i'll say have a good weekend, happy father's day, everybody. over to you and kelly now for the rest of "the closing bell," hour two. thank you, tyler. and welcome to "the closing bell," everybody. i'm kelly evans. here's how we're finishing up the day on wall street, with the dow jones industrial average, the nasdaq and the s&p all in the green. the dow adding 38 points. 13 for the nasdaq. and just about 6 for the s&p 500. after a two-day sell-off. let's get right to it with our special father's day "closing bell" panel. joining me now, none other than leon cooperman of omega advisors along with his son wayne cooperman who has followed in his investing footsteps and is now at cobalt capital management. and we should mention leon will be a keynote speaker at cnbc's fourth annual delivering alpha conference in new york city july 16th. also with us today another giant of the business, bill miller of legg mason fame and now with lmm and his son bill miller, this one with a 34. the two now work together cra crashing the party for the top of the show to talk markets with us today is "fast money" trader tim seymour. welcome, everybody. tim, give us some thoughts here about the action today. >> and we don't want my nine-month-old son connor on the show today. >> he's invited. >> as we look across the show and what we've seen in markets this week, clearly the energy space, it's not just because what's going on in iraq. this is a space that's been working for four months. i think if you look at the integrateds, if you look at the offshore drillers, companies like rig that were stuck, had company specific issues but also demand issues, you're starting to see people pick up. the other thing that's been key about this week is if you look across big cap, and that's big cap and technology, big cap and e.m., which is stuff i'm looking at every day, people are looking for capacity, they're looking for valuations. and big cap stocks are the ones that offer the best value here. so that continues and i think will continue into next week. >> leon, you have some big positions in energy. the sector's done pretty well this year. i think leading the market. do those gains continue? >> i would say selectively. but i don't like to buy into war scares and things like that. but you know, rig has been a very disappointing stock. we've owned it for a couple years and we're holding on because it's cheap relative to underlying asset value and if yields 7%. it's not been a good stock. >> 7% ain't bad. where else do you see opportunity? >> we're in some of the mlps, atlas energy, atlas pipeline, lynn energy, anadarko, we have about 15% of portfolio in energy-related companies. >> and wayne, i know materials is a sector as well that you've been spending a lot of time on. >> well, we're pretty positive on energy. we've been surprised at the strength in oil prices but we valued companies at about an $85 oil price and they're still cheap to 85 and you get 105, $106 oil and the middle east is a real mess, you know, we think there's some real good high-quality companies. eog, devon, new fields, afflon energy borks nanza creek are some of the smaller cap names that we like. so we think there's some pretty good value in oil, with oil up here. >> i mean, it's a story that's simple, if the u.s. consumers or businesses start to reduce their usage of oil because of the higher prices, does that hurt refiners at all? are there any ways in which that's a negative? >> sure, it's a negative. but you know, what's happening in the u.s. is only a small part of the story. libya is basically in disarray. syria is disarray. iraq appears to be in disarray. people say we're energy independent, which isn't true. we still input a lot of oil. and what happens in the rest of the world is pretty important. and here you have a stable regime. you don't have the government taking 90% of the profits. then you've got companies that are trading at five and six times cash flow, growing their production and reserves every year. you know, we do worry at some point we outproduce and production grows faster than demand. but right now we think there's a lot of value and we're watching the price of oil. it's higher than we thought it would be. >> if i could make a moint. . >> yeah. on the rack roe side each increase in the barrel of oil takes off -- in the last 12 months we're up about $9 or $10 a barrel so it nixed gdp by about .2 of a percent. >> and bill 3, i was going to ask you what kind of concerns you think this should raise for the u.s. consumer if prices are here or edge even higher? >> well, i think oil below 120 is not a problem. once it breaks above that level it begins to have a real impact on consumer spending. >> 120. are you talking brent? wti? >> i'm talking wti. >> wti. so we're still well below that level. but i guess as we edge ever higher is it something you have to with each successive dollar move higher worry about or is it just kind of as it cracks a certain point then it becomes -- >> i think there's plenty of oil around the world. i think it would be a lot lower if it weren't for the things that wayne and lee have mentioned. china was the big incremental driver of oil for the past few years. china's slow right now. i don't think the rise in oil prices even if they drift higher is much of a concern at all. >> and bill iv, if i may, where are some of the best yield plays in this space right now? >> well, there are some interesting yield plays within the mlp area, this aby deal that just priced today, i actually think it may be worth more than where it closed. >> it closed a lot higher than it was priced too. >> what's that? >> it's closed a lot higher than it was priced. >> oh, absolutely. but i think it still can go high higherer. i think it's worth somewhere in the mid 40s actually. we like the specialty finance space. a lot of good yielding names there. something like star kood capital, stwd, 8% yield, should grow in mid single digits. but there's a lost opportunities in yield land actually. >> the reach for yield by all sorts of investors seems to be creating whole new asset classes these days. are there any risks associated with that? >> there's always going to be risks when you look at things that have i higher yield. but something like starwood as i said there's not a lot of risk there. if you look at supply dynamics in the commercial real estate space right now. they're very favorable. we think there's little risk to that 8% yield and it should go higher. >> why is commercial real estate poised so well here, so strong? why does everybody seem to be talking about it these days? >> because after the crisis there was very limited new supply that came online, so that bodes very, very well as jobs rebound for rents and for the health of the space. >> we have kind of a commercial residential real estate play here to some extent, bill. are you still bullish on the home builders? >> wildly bullish on the home builders. i think it's probably the best single thing to invest in for the next five years. you have the home building stocks have been up one year in the past eight years. which is pretty remarkable with the market at an all-time high, profits at an all-time-high, margins at an all-time high. kb was 75, it's 17. >> what's the sentiment on the builders these days? >> there's relative value in the smaller cap builders. as bill mentioned kb, ryeland, i think these are the places that if you look at them relative to their history and relative to the space, this is the part that's a lot more interesting. and if you look at the macro across the board this week i think people are going to take solace in that the u.s. is, despite some headwinds-s continuing to show very good numbers on the jobs side. even though wages are somewhat stagnant. i think we have to think about what the fed's going to tell us next week. a lot of people talking about they're going to move the dots, they're going to move the target a little bit and fed funds may go higher than people are planning right now. >> bill, is that consistent with -- let me put it this way. if you're wildly bullish on the builders the next five years, what has to be the case in order for that trade to continue to make sense over the next couple of months? does housing need to continue to perform well? or does the fed need to stay accommodative and not upset the apple cart too much? >> all that has to happen is the universe has to continue. doesn't have to blow up, basically. >> so it's the case that the underlying dynamics for housing are as positive as they've ever been. we went through the worst housing recession in history. we'll need from 2010 to 2020 about 1.4 million units. we'll do about a million this year. that's tilted toward the multifamily. but the builder group as a whole trades at a below market multiple and this year's earnings about 10 1/2 times on next year's earnings. growth should be at the current slow pace, they'll still go 20% to 25% a year for the next three to five years. >> leon kick, ask you about citigroup today? there's talk about this $10 billion settlement know, related to mortgages. you're a big holder of the name. what do you make of it? >> this behavior is absolutely disgraceful. if they want to encourage financial institutions to lend, the last thing they should be doing is whether it's bankamerica, city group, jpmorgan, fining these guys enormous sums of money when the government itself was as much responsible for this problem as anybody else. barney frank wanted everybody to own a home whether they could afford it or not. "freedom writers" and fannie mae did irresponsible things. the government's not held account annual. at the end of the day citibank will survive at eight times normalize the earnings. they'll be in a position to buy back equity sometime next year. it's just really disgraceful but they'll survive. well below tangible book value. it's a 20%, 25% return value over the next 12 months. >> tim seymour, last word before we let you go. >> amen. people are looking at value. citi at .9 times tangible book is a place where you want to look for leverage in the space these guys have the best global model. those are things we're looking for, especially banks that can be positioned in the global economy. >> we'll leave it there for the time being. tim, thank you. be sure to stick around, catch tim coming up with the "fast money" crew at 5:00. they're going to be talking potential takeover targets on the back of priceline's massive acquisition of open table today. so don't miss a moment of that. coming up, we'll get the top investment picks from both the coopermans and the millers here. can't afford to miss that either. priceline buying restaurant reservation company open table for 2.6 billion. that's a 46% premium to yesterday's closing price. are valuations out of control? i think we've got the right guest to answer that question. you're watching cnbc, first in business worldwide. welcome back. priceline.com is known for booking hotels and flights, but now the company wants to help you book a table at your favorite restaurant. after buying open table for $2.6 billion today mandy drury breaking down how open table's business model actually works and why priceline thought that money was worthwhile, mandy. >> yeah, really interesting some of the numbers here. let me first of all show you some facts and figures on this. did you know, kelly, that 20% of all north american restaurant reservations go through open table? pretty staggering figures there, right? and this is exactly how it works. let's just come over here and take a look at the facts and figures on the wall. restaurants pay a one-time fee of about $650 and that installs the proprietary software to handle the table bookings. then, moving along here, from there the restaurants have to pay about a $250 monthly subscription fee. open table also gets a fee for each diner who completes a reservation. it's about $1 per diner for reservations that are made through open table's website or mobile app and 25 cents per diner for reservations made through the restaurant's website, of course using open table. for a restaurant it may sound like a lot of money to shell out, and of course some restaurants have complained. on the other hand, though, kelly, it does save on hiring front of house staff, for people to pick up the phone and take reservations. think about that. so let's take a look at how much revenue these fees bring in in total and why bryceline priceli interested. in 2013 the company earned $33 million on $190 million in revenue, 60% of that came from the diner reservations. so unlike some apps that have been bought these days for astronomical figures, this one actually makes money. back over to you. >> mandy, thank you. so this does make money. is the valuation, then, sky high or is it just a reflection of the opportunity here? do you guys think? bill? >> it's $2.6 billion. so it's not that much money for priceline. it's about 5% of their market cap. priceline was down 3% today. the market says it's only worth about 1.2 billion. i think it's worth a lot more than that. priceline can bring them all around the world. and most tech companies have too much cash on the balance sheet anyway. cash has a cost of equity we think of 6% to 7%. so all that excess cash destroys value at a 6% to 7% rate every year. so buying an asset like this that's making money is a good deal. >> so is anyone here worried about excessive valuations in the tech sector? if you want to go back to a deal like what's app, like the valuation that uber recently commanded. >> that's a space i don't spend too much time in. but i think the increased m&a activity is predictable. corporations are sitting on record high cash and total assets. the economy's growing slowly. they want to accelerate their rev growth. what they're trying to do is buy revenues, take out costs through synergies and accelerate their earnings growth. so i think we're going to see a lot more m&a. i think the surprise is it's taken so long to get to it. >> you have -- margins are at all-time highs and growth is slow. it's a strategy like bill ackman, you're going out, hail big premium but cut the crap out of the costs and make a lot of money. i use open table. it's great. i use it all the time. whether it's for a $2.6 billion, that's not really for me to decide. we don't own the stock. we weren't short it. it seems like a lot of money. but strategically i can understand why it makes sense. >> does anything about the m&a deals or the pricing in this space lately set off alarm bells just generally in terms -- because this is the big discussion. it's going to be are we going through another dotcom bubble? are these valuations excessive? is that going to ultimately lead us into a broader market conflagration of some sort p. >> i think a very small percentage of the market is overvalued. the great john templeton once observed that bull markets are born in despair and they end in euphoria. we had despair in '08 and '09. we don't have euphoria yet. a very small percentage of the market is priced in euphoric terms. very small number of ipos. this area is very frothy, very expensive. but the companies are doing the buying at a very low cost of capital. they're taking a shot. i'm sure some of these things will turn out to be very bad acquisitions. and some will be very successful. i can't tell you which ones. but overall the market is not pricing in euphoria in the slightest. >> but in the sense there is the point here being that cash is burning a whole in these companies' pockets. >> trying to accelerate their growth. so what they're doing is logical. and you have to take each deal at a time. we've lived through this before. xerox corporation bought scientific data systems for $10 million in 1980 and ten years later they wrote it off as zero. it kind of happens in business that way. you were asking the questions about euphoria. . there are very few signs of euphoria in the stock market. >> you guys agree? >> exact quote is templeton said bull markets grow in pessimism grow in optimism mature in skept siz sxm die in euphoria. i think we're in the skepticism cyr. individual investors' behavior reflects that and valuations are not -- ibm's nine times earnings. intel was up strongly today on raising the guidance which is very bullish for the global economy. >> what about you? >> well, even from here i think the reason the valuations in the tech space look so high is because a lot of these things are -- a few of these things are going toned end up being a lote than they're trading today and a few may be a lot less. >> final question before i move on from this. just pick again the case of uber. $18 billion valuation. that puts it as worth more than whole foods, more than tiffany and co and more than a lost businesses that have certainly been around a lot longer than four years. is this a reflection of the way they so quickly build out business that's justify these kinds of valuations then? >> with uber if you think about the way cars are moving they're going to be self-moving cars and maybe uber powers up the whole infrastructure. it has logistics potential to it. there's a lot of different angles that could be worth a lot of money and that's what people are buying. >> all eyes on the fed next week. new fed chairman janet yellen's second press conference which you can see live on this program and it comes in the face of today's unexpected drop in producer price inplace. how could the recent data change janet yellen's interest rate timeline? 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>> certainly. the only thing that would cause the fed to tighten by tapering more quickly, raising policy rates more quickly are genuine signs of both actual inflation and movements in inflation expectations. this certainly moves it in the other direction. i don't see that happening. >> what do you think they're going to do if they're concerned about complacency in markets? >> i think they're going to try to shake up markets on the idea that they can use their other tools, their regulatory tools, to pop asset bubbles. they'll talk about international conditions and concerns of a housing bubble in the united kingd kingdom. but i really don't think this fed is going to move in an aggressive fashion. it's going to err on the side of being late to nip inflation and it's going to stay loose for quite some time. >> bringing in the panel now, bill miller, do you agree with that? >> yes. >> now i need you to restate the question, please -- >> and i agree with bill miller. >> exactly. we can keep this going. >> i think the fed has told us consistently that until the inflation rate gets above 20-2 and unemployment gets to 5 1/2 they're going to be accommodative. >> even though they're quote unquote tapering. >> tapering is not adding liquidity. >> adding less liquidity. >> what i don't understand is your previous guest, mr. rosenberg of blackrock, basically talked about 3 1/4% long-term bond. he didn't understand why the bond was 2.50. most people understand@bond is 2.50. there's a shortage of instruments around. why is the fed buying 45 billion a month if there's a shortage of fixed income? >> doug, how much is the u.s. deficit shrinking? how much is treasury issuance shrinking? >> we saw the deficit close dramatically. it's going to be under 3% of gdp. but i think for people looking past two, three-year horizons the basic deficit picture is unchanged. we have not altered the tax system. we haven't altered the big spending programs. all of which means in 2016, 17, 18 we're going to see the deficit widen and the debt trajectory head north. i think there's going to be a real wake-up call if congress doesn't move somewhere between now and then. >> so then we'll start to see issuance pick up at around the time the fed may finally stop buying as many of these securities. so lee, do you then adhere to this view out there that interest rates, as ben bernanke has said, are basically never going to go back to, quote unquote, normal or 4% in his lifetime? >> i would never use the word never in the investment business. i think that probably normal over the next few years might be 2% fed funds, 4% ten-year government, the stock market as long as the economy's growing can handle that readily, not a problem. i'll just give you mindless -- statistics, not mindless but i don't like to sound like a statistician but for the last 50, 60 years the s&p multiple about 15 times in that period the ten-year groft was 6.67. the multiple in the market's now a bit over 16 and the ten-year's government's 2 1/2%. so the stock market is allowing for higher interest rates or slower secular economic growth and the fact it's allowing for it to me is a plus. i keep saying the same thing. in the financial asset neighborhood what are our choices investors, whether we're on the tv, on the panel, whatever? your choices are cash and you keep a certain amount of that and that's somewhere between 0 and 50 basis points. you can buy u.s. government bonds, 2 1/2%, i think they're a joke. not because they're not credit worthy but who wants to buy 2 1/2% of a ten-year piece of paper? high yelleders down to 5.4%. and the stock market the average is 16 times earnings. the average yields 2%. but the four of us are in the business of finding things better than average and we can find them. i want to give -- i'm very fond of mr. miller here. senior. i don't know junior well enough yet. to be fond of him. but i know he runs an income-oriented energy-focused fund. so yesterday morgan stanley bought a company called nordic american offshore. they own six vessels that supply offshore rigs with supplies. the company's going to pay a dividend next year of 2 1/2 dollars. paying a dividend currently of about 1.8 0ds. the assets are worth 18. you can buy their stock for 15 1/2. a 17% yield. >> 17%. >> next year's -- >> that list over there. and it was priced, it traded below its pricing -- >> because it was not handled as a new ipo. it was handled like a secondary. the company will be seasoned. and as the story gets to be better known they'll appreciate the tight supply-demand relationship now in offshore supply vessels and people will feel comfortable with the security of the dividend. and generally stocks yield prospectively 17%. either dividend gets cut or stock goes up. i think this one's going to go up. >> all right. interested yet over here? >> absolutely. >> he's going to do his own homework. like his old man. he does his work. he'll listen, take a note and he'll do his homework. >> doug, what do you think is the likeliest outcome next week from the fed? >> i think we're going to see steady as you go from the fed, tapering on schedule. more discussion about what indicators they will look at when they do finally decide to raise policy rates. that communication's not been very good in the past. janet yellen will continue to try to make the case that they deserve to operate on a discretionary basis when conditions are right. we're going to hear a lot of talk about that. i think the real wild card in all of this is actually the pace of economic growth. the fed has consistently overestimated the pace at which the economy would recover. they've had to mark down again and again. i think the markets are looking to top line growth. you can't just make money on cost control. and to my eye until the household sector strengthens we're not going to see that shift from 2, 2 1/2 up to 3, 3 1/2. so i think growth for this year is the real wild card, and i think it's -- >> thank you for now, doug. have a good weekend. >> thank you. >> we've got a very special prefather's day segment coming up. lee cooperman and wayne miller tell us the most important financial advice they got from their dads, who are sitting right here. and president obama makes it clear he won't send troops into iraq. so what if anything will america do if baghdad is in jeopardy? 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[ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. one pill each morning. 24 hours. zero heartburn. frequent heartburn medicine for 8 straight years. predibut, manufacturings a prettin the united states do. means advanced technology. we learned that technology allows us to be craft oriented. no one's losing their job. there's no beer robot that has suddenly chased them out. the technology is actually creating new jobs. siemens designed and built the right tools and resources to get the job done. who raised him.nu i did whatever i could do. quit after five months because it was a most miserable experience i ever had. but i think that you can -- one way to learn what you do like to do is do something you don't like doing. and i was working at goldman sachs and making copies and doing menial tasks and i'd be sitting there by the quote-tron trying to analyze the companies we were pitching on and i realized that i was much more in tune with the investment side. and i'd always had a keen interest in the stock market growing up. i mean, we didn't sit around and talk stocks, but obviously i picked some up and i was familiar with the stock market and i realized that was really what i wanted to do. in college i don't think i really focused on what i really wanted to do that much. >> bill miller, was it the same for you? >> i worked at mckinsey for a few years, and i was a little frustrated with handing stuff off to someone else who would eventually commit resources to that. so i went to business school and realized that was something i really wanted to do. i also realized very early on that saying this is bill miller from legg mason, could i meet with you, opened a lot of doors. so that was good. and the good news is when you actually get to the meeting expectations plummet when she realize they're meeting me. but that's one thing i learned from him, actually-s that low expectations are a good thing. >> how has the relationship changed? is it for the better? for the worse? now that you two are working together. >> it's been great. bill has a higher epistemological threshold than i do to buy something and he tends to go more toward quality. so when i'm having a harder time he'll tend to do better tan i will. >> but is that because after so many years you can develop kind of a gut instinct? >> no. it's because i grew up without much money and so i'm always trying to make the most money that i could. now that i have some money i still haven't lost that instinct. >> did you think he would go into business with you like you, follow you in other words? >> i didn't really know. i didn't know what he was going to do. >> did you guys ever talk about it growing up? >> but i have a question for you. >> oh, no. >> so what about your father? what about the influence of your father and what advice has he given you? what role has he had in your life? >> to me it reminds me a little bit of what wayne's saying where you grow up, at least for me, kind of resisting. my father was involved always with employee benefits and a lot of investments, financial planning. and i always thought, i'm not interested in that, that's your thing. and then over time you come to realize that you know, hearing about a 401(k) over and over again growing up does leave an impact and maybe you might even have an interest in it down the line. >> well, there's actually somebody that can shed some light on that right now. >> no. what? >> very true. in fact, i -- >> oh, my god. >> kelly, i guess the expression is you've been punked by your producer and colleagues. it's nice to be here today. >> oh, my god. >> this isn't just a father and son club. although the talent next to you is just overwhelming. it's been very impressive to listen to all the sons and their fathers. >> i can't believe you're standing there. you're supposed to be in florida. >> i hopped a plane and came up. so much for playing hooky. i've blown my cover. >> then you can tell everybody, there's no way you ever thought i'd do anything finance-related, right? >> well, you had your architect stage and then you were going to be a veterinarian until you saw them take the paw off our cat. and then as a teenager i got a little worried when you got interested in canes but then when you were in college you started doing the journalism thing, you thought milton friedman might be right. no, seriously, kelly was like any other kid. it wasn't like we were reading the fed beige book around the table instead of curious george. >> we were arguing about lacrosse. >> i went to dental school for eight days and quit. and then i majored in finance. but i tell all the youngsters, i tell all the viewers, the way to be successful in life is do what you love and love what you do. if you do what you love and love what you do, you're bound to be successful. >> let me ask the two of you, what's the one lesson that you've learned from dad? >> i don't know that i can say any one thing. he's an incredibly hard worker and he's very dedicated. and i think, you know, for me i think that if someone gives you your money and you're taking responsibility to do the best that you can and you devote yourself to doing the best that you can and you work your hardest, i think maybe i've learned a little bit. sometimes you've got to take a break, too. you've got to enjoy yourself, spend more time with your family, have some vacation. so i think i like to learn a lot from him but maybe i learned at some point you have to maybe not work quite as hard. >> bill? >> the story follows the stock and it's our job to figure out when that story's wrong. also run to the fire. where there's controversy. >> i didn't tell you 19 years ago buy low, sell high. >> any last words of advice here? >> buy low, sell high. i think lee's got it. >> hey, dad, any words of advice? >> yeah, kelly, the one thing i would say is some people, they're in a position to give their kids money, you know, and they think they're helping them. but as you know, we've always tried to give you an appreciation for money, not in a materialistic sense but what it can and what it can't do. and it's not about getting what you want or what you need. i know you grew up in an area where you saw people that after the university the biggest employer in our area was the carpet factory. so i know when you do the jobs report it's just not numbers to you. you know it's people. >> yes. that's true. good to see you. happy father's day. >> thanks. >> so what's the best investmen idea right now?ig bus that's the question the coopermans and the millers will answer next. answer next. we'll be right back. like, really big... then expanded? 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welcome back. i recently spoke with tiger management founder julian robinson and had the chance to ask him who he thinks is today's best investor and the best-run company. and here's a reminder of what he said. >> who do you think is the greatest investor alive today? >> the man i respect the most in the business, and he's in the hedge fund business, is probably stan drucker miller. >> why so? >> he's just so smart and so good and so up on everything. i think he's a fantastic investor. >> what is the best-run company in the world today? >> i would say google is one of them. >> so i wanted to ask our panel here the very same questions. leeish let's start with you. best investor, best-run company. >> best investor, i have a lot of respect for julian. i know stan drukenmiller extremely well. i went to his wedding must be 26, 27 years the retirement party when he left money management to run his own affairs. i would have to put warren buffett on that list unequivocally. he goes from delivering newspapers to $60 billion, $70 billion, he's got to be an accomplished guy. a good role model for most of us, and in terms of like a great company, i'm living in the past, but i've always had this view that henry singleton of teledyne is probably in a class by himself and i could prove that if we had an hour to discuss it. the guy was absolutely brilliant. number one in his class at the naval academy. ph.d. in electrical engineering from mit. left to start teledyne. died a billionaire. never, ever made more than $1 million a year as a ceo of the company. 20% a year and very, very smart guy. a book called "the outsiders" where he profiled him. unfortunately he passed away but in a class by himself. >> wayne, what about you? >> i try to follow a lot of different people. i have a lot of respect for guys who can make money on both uhqqj of the market. some of the guys who made money in 2008 or didn't lose money and then turn around and got smart and got long the market after that. but i'm always just looking for good ideas and wherever i can find them. so i have an open mind. >> best run company? >> i don't really know. >> all the ones you invest in, right? >> not necessarily. sometimes we invest in some pretty poorly run companies. we're value guys and we look for value. i mean, our best investment over the last 15 years has been atlas energy. they've done deals, they've created value. they sold themselves to chevron at a nice price. they kept a bit of the company themselves. they reinvented it. you know, i think those guys have created a lot of value. they've been creative. >> bill sr. >> well, i think one of the best investors in the world is sitting right to your left. i'm an investor in lee's fund. most hem funds in my opinion are not worth the fees they charge. he's had an extraordinary career building omega and crushing the market over his career and there's nobody who works harder and cares more about his clients' money and thinks more clearly about the market than lee cooperman. >> thank you very much. that's very gracious of you. >> best run company. >> i would say amazon. i think amazon has a small market share and a giant global market. they have customer loyalty. there's a culture. no company -- it has a ceo who is brilliant, who is relentless, and wholly rational and that's a deadly combination for the competition. >> we have had a lot of people telling us they're not so sure mr. amaz-- about amazon. >> the stock is $330 right now. i think it's trading at a low price based on the last five years and the single best predictor of amazon stock price ha be growth of gross dollars. that accelerated last quarter. i'm comfortable thinking the markets a amazon about right. the sales growth will be 20%, 25% the next three years and the stock will double in that period of time. >> bill jr. >> the best investor is the guy who signs my paycheck right here. >> practical. >> does that mean that the best investor is anybody who signs your paycheck no matter who you're working for? >> no, no, just you. just you. >> the best investor i think is the stock that goes up the most in your portfolio in any one year. >> what do you think is the best run company? >> i'm going to take a more objective approach. it's the most valuable company which is going to be apple, the most valuable company in the world. i think that pretty much sums it. . >> just before we go, if you had to pick a couple companies right here you think are topics, what are they? >> i mentioned nao, north american tankers. i like octavius. i like the whole energy complex, atlas energy. atlas energy, atlas resources. i like an interesting company called ultra source portfolio solutions. i would add to positions. i think bill and i share an investment in an interesting small emerging company called monetize. the mobile wallet. they have the software you put on your smartphone. >> part of mastercard now. >> they invest ed -- >> we'll pick this back up after we take a quick break. our special panel of fathers and son was their final thoughts. stay with us. friday night, buddy. you are gonna need a wingman. and with my cash back, you are money. forget him. my airline miles will take your game worldwide. what i'm really looking for is -- i got two words for you -- re-wards. ♪ there's got to be better cards than this. [ male announcer ] there's a better way with creditcards.com. compare hundreds of cards from all the major banks to find the one that's right for you. it's simple. search, compare, and apply at creditcards.com. first round's on me. is in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. being able to pay as we go to is crucial for a start up.deas. having to fork out a lot of money up front was risky. we can launch a feature really quick, and if the feature doesn't work, we haven't lost anything, and we can have something up and running in days. and this would not be possible without the cloud. we are now supporting over 25 million users each month. all right. some final thoughts with our panel. it's been quite an hour, gentlemen. really appreciate having all of you here but i just wanted to pick up, did you hit the highlights of the names you find interesting. >> i should make a comment about the market i guess. i think the market is in a zone of fair valuation. i think it's going to mark time personally to the end of the year. the answer to two questions, what happens when the fed is finished tapering and no longer in the market buying paper. does the economy get adversely effected? if it doesn't, investors gain confidence and the stock market has a good fourth quarter and we end the year near 2000 on the s&p. >> wayne, do you have a big view of the market like that? >> i don't really have a big view of the market. we tend it focus on companies long and short and try to make money no matter what the market does. i mean, a couple names we like, blackstone, some of the energy names we mentioned before. like delta air lines, too, which is a little counterintuitive with oil but they've done a great job. they own a refinery, they're a little hedged on oil. we think the supply /demands ar great. >> i'm not worried about the market going down, i'm worried about it going up 20%, 30% and then it would be dangerous. >> bill jr.? >> i think the bdc space still looks good. another financing vehicle is hlsf, home loan service and solutions related to the name lee mentioned earlier, and i mentioned starwood earlier and aby. >> and i'd add one thing, if wayne likes delta, he should love united which has half the market cap of delta because it has half the profit margins. it will have the same profit margins in three years. >> dad, what should the viewing audience do. this weekend one thing they can do. >> ten seconds the best investment you can make is in your kids. you can see it here and here and certainly proud of the siblings, my other kids. the best thing is being in for the long term, not the short term. >> great to see all of you. i still can't believe you pulled this off. it's now time for "fast money" coming up with melissa lee in just a few moments. in fact, melissa, we'll hand it right over to you. >> thanks a lot, kelly. enjoy father's day. "fast money" starts right now. live from the nasdaq market site in times square. our trade ers are here. oil is spiking today. what happens if oil prices stay at these levels or go higher? that's coming up. first, a major deal in the internet space. open table shares surging on news it is being bought by priceline for $2.6 billion. groupon and yelp also popping on hopes that those companies could be the next takeout targets. priceline though down nearly 3%. no surprise on the deal.

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