Transcripts For CNBC Closing Bell 20140716 : comparemela.com

the rally's sales. we only need a gain of about eight points for a new high. we're already up 60, and that's even off the highs of the day here, kelly. >> that's right. so, we're sitting at 17,120 on the dow. there are reverberations from yellen's remarks, particularly in biotech, down today. that may speak all more to the strength we're seeing across the broader market here. obviously, keeping an eye on the big names involved in the mega deal you mentioned, we should note right off the bat, shares of fox are down almost 4%. shares of time warner are surging today. cnbc first to report that rupert murdoch's 21st century fox is trying to buy the company, even though time warner is saying no. murdoch is apparently pressing. we will speak with former universal chairman bob wright, who knows all the players involved here, about how this might play out. will murdoch add to his empire? how much could it cost him when all is said and done? >> and does it make sense in this environment? we'll talk to bob about that. also, delivering alpha, the conference continues in new york city during "closing bell." already big news today from stanley druckenmiller and from new jersey governor chris christie. we will soon now hear from activist investors nelson peltz and carl icahn. they'll be live on stage there in the city. see if they name names of their next targets. and if they do, you will hear them first right here on "closing bell" today. >> we are looking forward to all of that. first, though, let's see how we close here. looking across markets at a pretty strong performance, aside from the dow up 60 points. bill already mentioned we've got the s&p up about seven today. and the nasdaq lagging but up about 14. >> all right, let's get to our "closing bell exchange" for this very, very busy wednesday. abigail doolittle from peak theories is back, saja practiced human, keith fitzgerald from money map press, jack was rujan and rick santelli joining us as well. sajai, i see two words in your notes here -- small caps. does that mean you're buying what janet yellen is selling right now? >> exactly. we like the small cap story. we think the credit cycle is going to get a lot healthier. and in an improving credit cycle, you really want to look at the smaller companies, not the mega caps. >> all the same, the small cap sector has some of the highest valuations, satya, so forgetting what the fed may or may not say about valuation, broadly, why are you confident it's justified in some of these cases? >> i think the valuation debate is up for grabs. a lot of our work says that you've got long-term averages. what that tells us is that small cap valuations are hitting averages, blue chips are not compelling. what's interesting, though, there are pockets of risk in the small cap story. we've been pretty good about being cautious about the biotech names. since march-april, we flagged those multiples were really well over normal. that said, most of the other cyclical exposures that we're looking at, comfortably smaller companies, their multiples are fair territory. >> keith fitzgerald, janet yellen has completed her testimony to congress. you know, a lot of things we could talk about there, but when all is said and done, and we had the beige book out today, which showed continued, in some cases, they said moderate growth, in others, they said modest growth. i'm not sure what the difference is, but does this economy support this stock market right now, do you think? >> well, you know, that's a very interesting question. i don't think the economy on its own merits supports the stock market. i think the fed supports the stock market, and the fed is doing everything they cannot to rock the boat, which by implication makes people want to buy it. >> jack bouroudjian, did you hear stan druckenmiller's remarks about the fed today? >> yes, and with all due respect to mr. druckenmiller, it's one of the reasons why he was one of the underperforming fund managers last year. he has missed this entire story. he's misreading this market, and quite frankly, i don't see anything that this fed is doing that's any different than what any other fed has done. >> that's his point. >> when you go back and look at what voelker did, voelker kept them artificially high to fight off inflation. guess what? we are now see the juxtaposition of that. you've go a fed doing whatever it can because prosperity is killing legislation out of d.c. so, they're keeping it propped up. i think they deserve kudos. >> whoa. >> stan has long been a critic of fed policy in this period, saying that there will eventually be some unintended consequences down the road. he's reading from your playbook, rick santelli. >> yeah, no, jack's consistent. i'm glad to see that he kind of slammed mr. druckenmiller, because yes, i think a lot of the points were similar to the points i've had. listen, argue any way you want about his record of trading. i would swap balance sheets with him any day of the week. as i look at the marketplace, though, a couple of things jump out at me. first of all, the dollar. the dollar's actually having what i would interpret one of its first real moves of the year, and it's to the up side. we are now close to a one-month high on the dollar index. gee, what's changed? i think two days of janet yellen has really hammered home the point, qe is officially dead. hoorah, the wicked witch is dead, so i think the dollar index is celebrating a bit. and as far as today's testimony, seeking alpha was awesome, no doubt about it, but there is a sad sidebar, some of the questioning today was some of the best questioning i've seen. to that end, jeff hensarling's going to be my guest tomorrow. >> wait, did you say a sad side bar, rick? >> pardon? >> what are you saying there was a sad side bar to delivering alpha today? >> oh, no, just the side bar that i would have liked to have been able to see some of the real tough questioning in one period of today's testimony on the house side. >> oh, got it, got it. sorry, i'm a little slow this afternoon. >> no, i had to watch. i had to watch "seeking alpha," absolutely. that's what i'm saying. that was the only down side. >> there is so much going on as well. so, we should mention, of course, janet yellen again on capitol hill today. abigail doolittle, want to just weigh in here on the fed wading into the valuation debate? how do you see things? >> yeah, i have to really applaud janet yellen for this move, which i know a lot of other people are saying it's inappropriate, but i actually think it's the first sensible thing this federal reserve has done in three years. it pains me to say that, i'm a huge fan of bernanke, but qe-3 and after that is too much. now the fed is acknowledging reality, acknowledging the fact that, yes, some of the markets are overheated, valuation is high, there is some froth. i love the fact that the fed has actually now finally found one of the bubbles it's been hunting for. and i think it tells us, i think the purpose here was maybe she was saying she could take some hot air out of the market. yesterday, yes. today, not so much, but we're up and down. and i think it really makes the point that the one market that the fed should never have been in is the stock market. that's the market that's gotten away from the fed at this point, and it's too bad that they're in there, but now they have to come up with a solution. >> where is the fat in the stock market? >> that $4.4 trillion, jack. >> oh, come on! [ everyone talking at once ] >> wait a minute, keith -- >> you've got earnings! you look at the numbers coming out by companies that are posting them, that's what's driving stocks higher. >> correct, the profit outlook is driving stocks, but it's completely propped up by the fed. without the fed's $4.4 trillion balance sheet, something entirely different than any other federal reserve before, you would not have that earnings picture, nor would you have it if the analysts on the street did not go along with -- >> oh, i think that's a giant, giant leap. >> i don't think it's a leap. >> it's a giant leap. i absolutely do. >> you don't think the $4.4 trillion hasn't pump ed up the markets to -- >> how much is in the system? look at m-1 -- >> absolutely right. >> sitting on the balance sheets of banks. unfortunately -- >> go ahead. >> it is not the reason why companies are making money. it is not the reason order books are filling. it is not the reason why we posted such a high number out of china last night. >> you don't think it helps? >> those are the things that are driving the markets. >> you don't think it helps, jack? >> look, i think keith is trying to get in here. i want to mention to people, to the point about monetary velocity, another fed speaker today, richard fisher has a great, a treat almost that's out on valuation in this market. he cites some pretty old-school poetry on this issue, as he is so wont to do. keith, what did you want to say? >> abigail, i would carry it a step further. i think one thing that the fed really needs to do to be meaningful and impactful is acknowledge the role that it specifically has had by virtue of its policies. >> i agree with you, keith. i agree, and i wish she had done that. she took a good step, i agree with you. >> let's address what jack's talking about for a second. jack's talking about sales and companies moving product and everything else, all of which is correct, but if you look at what fuels this mess, it's derivatives, it's debt, it's access to capital. customers are becoming irrelevant to the big banks, banks are sloshing around more money. it's not less money or too little liquidity it caused, it's too much liquidity, and we're about to see that. >> we're out of time, but at the risk of overdoing this on timewise, but i must bring up something else that stan druckenmiller pointed out, and i'll point this at you, jack bouroudjian. he said sales at ibm haven't changed in six years, and in that time, they haven't done a whole lot of capital expenditures to reinvest in the company to try to increase their sales and product line. what they've done instead is increased their debt and triple ad the share buyback to help -- >> bingo. >> -- engineer their earnings down the road. now, those are stan druckenmiller's sentiments. he's not just picking on ibm. he says that's what corporate america's doing right now, rather than reinvesting in their future right now. >> totally agreed. financial engineering. >> and a lot of that is done because there are other problems out there. look, we all know that we need corporate tax reform. >> problems? what problems! those are the problems that we have. the only problem that i see right now is a problem of growth, which can only be taken care of out of congress. that was what happened when voelker was the fed chair and you had the supply siders come in and inject the economy. >> but now we have all the liquidity and leverage. >> what we need is we need some real pro-growth policies. >> yeah, that's easy. [ everyone talking at once ] >> okay. >> you have overtaxation, overprotectionism, overregulation, these are all prosperity killers! >> big government equals small wallets. >> i agree with you, buddy! >> and thank god for the federal reserve because they saved us from a depression, rick, all right? i'll tell you that. kudos to the federal reserve. >> they saved us from drowning in a puddle. >> kelly and i have to be the adults and say time's up, kids. we have to go. see you on the playground. see you later. as we mentioned, a lot of news being made by the biggest names in government and business at this year's delivering alpha conference, hosted by cnbc and institutional investors. >> let's go now to kate kelly, who's in the middle of all the action there in new york city. is it as combative there, kate, as it is here? >> i don't know, kelly. that was a rousing panel discussion you've had, but we've had fireworks here as well. of course, new jersey governor chris christie spoke with our john harwood over lunch. a fascinating discussion. he had choice words for the economic recovery, which i think he called limp, unimpressive, stagnant. he also criticized our tax system, saying it was wretched, among other things. so, a lot of negativity from him there as awell as some words about bridgegate, where, again, he says that a senior member of his staff went rogue. and although he takes responsibility for the situation in general, he's not saying he was aware of it or even created an organization that was prone to those sorts of issues. manufacturing along to investing, though, john paulson, the hedge fund manager, just stepping offstage with our melissa lee. he talked to great length about the merger opportunities in the market right now and a variety of ways to make money doing merger arbitrage. that's, of course, where his roots are, back in 1994 when he started paulson & co., and he performs well in that regard. his enhanced fund, the levered leverage of his m&a fund, is up about 5% this year, making that one of his best strategies of the numerous different funds that he runs with his $23 billion under management. a couple points on key stocks. he talked about time warner and fox, which is one of the key stories of the day, broken by andrew ross sorkin earlier. he basically said it's too early to call it on where that may fall, but he thinks when you have two companies of similar size, as you do there, there's a limit to how much even a suitor like rupert murdoch is able to pay in a premium. so, unclear how that will work out. he's very positive in the v valient and sees m&a in oil and g gas. >> kate, thank you. >> there will likely be more headlines coming out of that conference. two of the biggest names in investing, nelson peltz and carl icahn are coming up live from delivering alpha in the next hour of "closing bell." you'll hear what they said at the conference that might move stocks. you know what they did last year. you cannot afford to miss that coming up next hour here. >> and bill, it's amazing it's only wednesday, given all the merger news, all the deal news and so many different industries we've had this week. we'll hear from those guys. we've got 45 minutes to go. this would be a record high close for that index. the s&p's at 1,980. 1,985's its high water mark. the story of the day, bob wright, former chair of our parent network, nbc universal giving us his view on rupert murdoch's recent attempt to buy time warner. we'll see where he sees this going. lots ahead, apple ceo tim cook talking about what's in the pipeline in his exclusive interview with us yesterday. did he set expectations too high, though, and what's in that pipeline anyway? the apple pros will weigh in. if energy could come from anything?. or if power could go anywhere? or if light could seek out the dark? what would happen if that happens? anything. we're changing the way we do business, with startup ny. we've created tax free zones throughout the state. and startup ny companies will be investing hundreds of millions of dollars in jobs and infrastructure. thanks to startup ny, businesses can operate tax free for 10 years. no property tax. no business tax. and no sales tax. which means more growth for your business, and more jobs. it's not just business as usual. see how new york can help your business grow, at startup.ny.gov television announcer: mattress discounters' $197 mattress sale $197 mattress sale is on now. bulldog: mattress discounters' $197 mattress sale! television announcer: right now, you can get a serta mattress, any size, for just $197 each piece when you buy the complete set. bulldog: any size mattress - twin, full, queen, or king - for one low price! and they'll deliver it free. television announcer: the $197 mattress sale... bulldog: oh boy! television announcer: ...is on now. ♪ mattress discounters yeah, citi mobile. pay the dog sitter? and deposit that check? citi mobile. pack your bathing suit? wearing it. niiice bank from almost anywhere with the citi mobile app. positive day for stocks, the dow up 65 right now, well into record territory at this point, ten points off the high of the day. the laggards have been the small caps, again, the russell 2000 is actually negative today again. we've been seeing this lagging effect here, even though the secondaries were the leaders to the up side just a few months ago, kelly. >> yeah, great point. on a very busy news day, the story of the day breaking on cnbc this morning. time warner rejecting rupert murdoch's $80 billion takeover offer. here's where it gets interesting, fox shares lower today, in the range of 4.5%. time warner's shares are surging, understandably. julia boorstin covering the story for us now. julia, what's interesting is time warner shares, despite this rally, still aren't at the purchase price floated, apparently, by news corp. here. >> that is right, especially because there is such an interesting vision for media colossals that rupert murdoch had in combining the companies. these are two rivals with important assets, fox with its broadcast network, fox, plus cable networks, fox news and fx, while time warner has an unprecedented premium cable asset in hbo, plus ad-supported. tnt and tbs control the rights to major league baseball as well as the nba and college basketball. meanwhile, fox has been investing to build a sports empire trying to rival espn with the launch of fox sports 1 last year. now, less complimentary and more competitive, the movie studios, warner brothers and twentieth century fox. together, the two companies have 35% of the u.s. box office market share this year. analysts say they see cost savings in such scale, but sources tell me fox would want to likely maintain an iconic media brand like warner brothers, which is the largest hollywood studio. the combined company would not include cnn because of fox news. cnn would have to be divested on those antitrust concerns. it does make sense that in the wake of media distribution mergers, comcast and time warner cable, directv and at&t, that murdoch sees value in content scale to give him more negotiating leverage. kelly? >> julia, thank you. a big story. we want to get more reaction on it now, bill. >> joining us on the cnbc news line, first guy we thought of, we've got to talk to bob wright, he's the guy that ten years ago engineered the merger of nbc and universal to create nbc universal. and bob's on the line right now. robert, hard to believe it's been ten years since that deal went through, huh? >> it is. you're right, bill, it's hard to believe. it's also exciting to see it, because you know, we valued that company when it was created at about $43 billion, and then ge ended up selling it for something less than $30 billion. and now, they're sitting there with nbcu looking at a price of time warner at $80 billion. >> right. >> which is in many respects nbc uses as a stronger property, in many, many respects than that. >> does rupert's offer make sense to you? >> well, i think you would call this a -- this is a federal reserve co. this is only possible based on the low cost of money, the extraordinarily cheap cost of money. this is, you know, $80 billion to maybe it's $100 billion, and you know, 60% of that's going to be paper, but 40% of it's money. so, you're going to end one a debt load of something, i'm going to guess in the $70 to $80 billion for the resulting, you know, company, which is not something you would have ever been able to take on in those businesses at historical levels of interest rate. >> bob, i'm so glad you made that point, because if you look, especially after the sell-off in fox shares today, their whole market cap is in the range of mid-$70 billion, and the offer is for something like $80 billion. >> right. >> so, there are two obvious things that spring to mind here. one, of course, what happens if interest rates ever change, if they ever move significantly higher. two, does it make sense to put this much debt on a combined entity? and three, if it does, are we seeing now companies just taking a page out of the private equity playbook? >> i think the latter's the case. there's no -- nobody thinks there's going to be any immediate increase in rates. and as a result of that, you could probably get out some bonds at, you know, b-rating type of bonds that are going to have a longer-term hold at very low interest rates. so, you know, this is sort of like you either do it or you don't do it. >> right. >> if you do it, you're maybe blessed for life. and if you don't do it, you're going to be kicking yourself in the pants, maybe, so. >> but bob, you know rupert murdoch very well. when has debt ever stopped him from wanting to make a deal? when he wants something, he goes after it in a big way. do you see him stepping away? how do you see this? >> no, i don't, i don't. but rupert is -- he swings from the toes, there's no question about it. but he had his own terrible problems back in the late '80s and almost lost the entire company based on debt. so, he does understand the role of debt. nevertheless, that's a big number to be running around with. you know, i think what this is really about, though, is they're hoping to create a disney. if you look at the marketplace out there, disney has a market cap of roughly $150 billion. and if you put these two things together, you come up with something that's relatively $130 billion, you know, depending on what actually settles out. it might even be more than that. and that's kind of, i think, what people look at. comcast has a market cap of $114 billion. >> right. >> and comcast has nbcu, which may be worth $70 billion. >> exactly. and bob, what happens in this case? and it's been reported that perhaps a comcast or a verizon could be a fit for time warner here, that perhaps time warner's holding out for a better price from some other company out there? >> based on their press release, that's kind of -- that looks like that's the direction they're taking. this is incredible extension. they were trading at about 48, you know, they were a $50 billion stock and now they're $73 or whatever they are, headed near $80 or $90 or $100. cbs is 32 out there and disney's $12.5 billion and amc's $4.6 or 7. so, there's other properties out there that are all going to be beneficiaries of this, if hopefully. i don't think that comcast can do this deal right now, given all the issues it's got on the cable side. it's probably not a great timing for them. >> okay. we've got to go, bob, but i've got to ask you, cut to the bottom line. do you think rupert murdoch gets time warner in the end? >> i think it's more than 50/50. he's been working on this. he's prepared to take an incredible debt load. i think their problem is they're looking at a lot of paper and saying, my gosh, you know, if he's got $70 billion or $80 billion of debt, we're going to end up with, you know, 60% in paper, meaning, you know, nonvoting stock, that's probably going to be a tough thing. but i think he's going to -- he doesn't like to go out there just to throw numbers out. >> right, that's for sure. thank you, robert. always good to talk to you. >> it will be exciting. >> yes, indeed. >> oh, my god. thank you so much for being here. >> kelly, thank you very much. and bill, you two are great on the air. >> thank you, sir. best to suzanne. >> bye. >> thanks. >> bill, that may explain some of the action we're seeing in fox shares today. again, amid the spike in time warner, you can't ignore the fact that fox is down almost 5%. >> it is, but you know, look, rupert murdoch's track record, as i said to bob, he doesn't look at these kinds of numbers. he's got his eye on the prize, and he sees synergies and he's licking his chops right now, you can tell. >> ah, yes. and dow jones, i've been through this one. i've seen this story before. >> yes. yes, exactly. he went until he wore down the opposition and finally, they gave in. we'll see what happens. heading toward the close, 35 minutes left in the trading session here, in record territory for the dow and s&p right now. much more to come on the show, from delivering alpha, billionaire investors nelson peltz and carl icahn live from the conference in new york. remember, what they say could move the market and some specific names. stick around for that. >> also up next, apple's ceo, tim cook, building up expectations about the tech giant's product line, exclusively on "closing bell" last night. i hope you saw that. so, how long until the market demands that he delivers on that product line? we'll talk about that coming up. ♪ ♪ during the cadillac summer's best event, lease this all new 2014 cts for around $459 a month or purchase with 0% apr and make this the summer of style. take them on the way you always have. live healthy and take one a day men's 50+. a complete multivitamin with 7 antioxidants to support cell health. age? who cares. welcome back. with the dow up 75 points, well into record territory, morgan brennan joins us to highlight some of the movers for us today. >> thanks, bill. we begin with hca holdings. that's soaring after it raised earnings guidance for the second quarter and full year. it's currently trading up about 10%. rivals tenant healthcare, united health services, community health systems, lifepoint hospitals and envision healthcare, all rising in sympathy. general electric moving higher as well on a "bloomberg report" that it's in talks with potential buyers about selling its household appliances business, which could fetch between $1.5 and $2.5 billion. ge currently trading up about 1.5%. but a tough day for lanet, plummeting on an investigation into the company's heart drug. that's currently trading down about 17%. and we end with ibm and apple, both moving higher on news the two announced a partnership to collaborate on business apps for iphone and ipad users. blackberry in the process getting slammed on that deal. that is down about 11.5%. bill, back to you. >> thanks, morgan. our own josh lipton was breaking exclusive news that apple and ibm will partner up to create major business apps. josh also asked tim cook about what else is coming next from apple. >> talked before about that product pipeline. you mentioned how excited you were. i know eddie q taeddy cue talki about best pipeline. >> i'd agree with eddy. i'd agree with eddy. i totally agree with him. >> so, we want to go a little further, if we can. will apple deliver on that bravado and how long will the market give the company to deliver? >> joining us now, gene munster from piper jaffray. gene, it's good to see you. >> hello. >> best product pipeline in 12 years? >> do you agree? >> based on what we have pieced together, i think it will. if you just go back and kind of look at it one product at a time, it probably is. i think there is a couple wild cards in there, but i would just step back and say that tim cook's comments yesterday really are amping up those expectations about apple should deliver in the back half of the year. >> so, like what? okay, the watch, the iwatch. what, maybe we see that this fall. apple tv's been talked about forever. the smart home, some of the technology to make the smart homes and all, is that what you're looking at here or what are you referring to specifically? >> yeah, i think if you're going to go kind of in chronological order, probably september is the larger-screen iphone, most likely 4.7-inch. which the current largest screened iphone is 4 inches. so, there's more substance to this screen size, versus the previous larger upgrades. so, that's one piece to it. and then they'll likely have another product in the next six months, so that's two products. payments. they're going to have nfc in the phone and services are a new area, so that would be kind of a third piece to it. the watch is something that a lot of debate in terms of how many units they're going to sell, but clearly, that's going to drive some units. but there's another effect i don't think people are talking about, which is, there will probably actually be a halo effect with the watch back to iphones. in order to really optimize the most out of that iwatch, you're probably going to be required to have an iphone. so, i think you kind of look at all those. and then the final piece to it is something that i've talked about for a long time, is the television. and i still believe that's part of the road map. and i think when tim cook laughs and makes that comment, i think that that's still very much in play. whether it's this year, it's hard to say, but i think that's something else. so, if you put all of that together, it looks like that comment about best in 25 years makes sense. >> gene, just in a word, as apple trades up by about 0.66% today, what are your thoughts on the shares? we're only what, $5 away from their adjusted high? >> our target's $105. the bottom line is we'll wait and see what these products are and make the proper adjustments to our targets then. >> all right. thank you, sir. >> all right, gene. thank you. >> thank you. >> gene munster looking at apple's pipeline there. >> do you feel more excited, bill, now, after his explanation? >> uh, sure. you weren't with us last friday when we looked at the new iwatch. it's kind of cool. actually, that was a google watch. that was a google watch, competing with that, yeah. >> i was going to say, exactly. i put on the google glass to try out the translation service. that was kind of exciting. i was plenty surprised. >> by the way, you're not going to be here tomorrow, right? >> no, i am off. >> yeah. you're going to be gone, celebrating something. so, before you go -- ♪ happy birthday to you >> oh, my god! stop! ♪ happy birthday to you, happy birthday dear kelly ♪ ♪ happy birthday to you >> kelly! >> oh, my god. >> come on, blow it out. >> go ahead, blow the candles, act like you're happy. >> make a wish. >> we're on air right now? >> make a wish. show us some lung power, come on. >> it's going to melt the cake! hurry up! >> i'm making a wish. >> and everybody wants to know how -- >> yay! >> everybody wants to know how old kelly's going to be. >> you can figure out how many years each candle represents. >> let's just say this, her car insurance is finally going to go go down. >> it's better to have wasted your youth than to have done nothing at all. congratulations. you're stuck with us, kelly. >> i don't think this -- now, my only question is, is this a homemade cake from ian or not? because if it's not, i'm not interested. >> but if kenny had it, you can be sure, it will show up with a recipe tomorrow, but with a marinara sauce on it. >> parmesano, why not? get it right. happy birthday. >> thank you so much. all right, the cat's out of the bag, bill. >> once again, bill misses cake day at the new york stock exchange. all right, happy birthday, kid. >> thank you. >> bye-bye. >> i'll see you monday. >> we'll come back after this. ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. share your summer moments in your mercedes-benz with us. habeing able to pay as we goo rawas crucial for a start up.s. having to fork out a lot of money up front was risky. you 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. ideas can be tried and tried again on the ibm cloud. the ibm cloud is the cloud for business. positive day. we're in all-time high territory for the dow and s&p. the industrial average up 72 points right now, kelly evans. >> yes, it is. so, if we close here, it will be a record high. now, at delivering alpha today, duquesne capital founder stan druckenmiller using his time to rip the fed and its policies, saying the current policy is risky and reminds him of past mistakes. >> the leadership of the federal reserve did not foresee the coming consequences as late as mid-2007 as, surprisingly, many fed officials still do not acknowledge any connection between loose monetary policy and subsequent events. that is why i am personally experiencing a sense of deja vu. >> we have reaction now from mesirow financial chief economist diane swonk and our own senior economics reporter, steve liesman. folks, i have to say, stan druckenmiller has long been a critic of this federal reserve policy, and i gather, steve, it's the criticism of a money manager who's been frustrated trying to make money in a distorted financial market environment, right? >> i don't know. i mean, i think that stan has his opinion. he gives this interesting test, right? which is, if i was on mars for five years, came back, he gave you the economic numbers and you would say, wow, there's no way the fed should be at zero. when i listened to him say that, i had a different take on that, bill, which is that, if i was on mars for five years and i came back and you showed me the economic numbers, for example, the u-6, the broader measure of all underemployment, and then you told me the economy was only growing at 2%, which is, and with a 0% funds rate, i might say, you know what, you'd better stick with that policy, because underlying growth's pretty weak. so, you could come to the opposite conclusion from your standing. >> diane, i will reference a line stan druckenmiller did from bernanke in 2004. he said "my view is improvements in monetary policy have probably been an important source of the great moderation." his point, generally speaking, is that central bankers were wrongly confident then about the risks ahead and perhaps are as wrongly confident about that today. >> you know, actually, there's a couple things that i took issue with, with stan's comments, and i do think a lot more federal reserve people worry about the financial stability issue and the unintended consequences. i also agree with steve that i think you can look at that data and come back with a completely different, if i was on mars. and i came back and i saw this data and i look at things like consumer balance sheets, they're still very highly levered. the unevenness of the recovery in well, the lack of recovery in housing. although we've seen some, it's still not what it could be at this stage in the game. all those things, i would come back inside with steve on this one and with the federal reserve. i also think that comment from ben bernanke was a little unfair, because it was talking about the great moderation, not necessarily as a forecast of what was going forward but what had happened going backwards. now, that great moderation may have actually, moderation in terms of longer expansions, lower inflation, could have actually precipitated some of the comfort zone we had, and i do believe that, but that doesn't mean that he was predicting that uncertainty, though. >> by the way, richard fisher almost could have given stan druckenmiller's speech today. >> and richard fisher is from dallas, right? >> yeah, dallas. >> a bit of a cowboy. >> kelly, i agree with -- >> i hope he's right. i hope the economy is strong enough that we can raise rates in the first quarter of 2015. i don't think he is, but i hope he is. that would be wonderful. i think that, you know, you've seen a real shift. those people who are worried about inflation, criticizing the economy, saying we're going to see inflation accelerated, they have all shifted over to say, no, now the fed's wrong, because it's not inflation we have to worry about, it's financial stability. well, i actually think that came down to roost very quickly in 2008, but i do think it's been this pivot of, okay, now we're not worried about inflation, because we were wrong on that, so now let's pile on the fed on the financial stability. and the bottom line is the fed's got a whole spectrum of things to look at, including the real economy, which i think steve pointed out very well, is still a concern. >> i agree with stan that you can't count on the fed to get this right, but he does create this risk-reward, or cost-benefit matrix out there. and i think the thing that underpins fed policy right now, for better or for worse, is that if they're wrong, they're wrong in a way they can do something about it. >> right. >> and the fear of what happens to an economy with zero interest rates with animation as fed policy since day one. i would like the critics to explain, okay, let's say we're wrong and we wind up in a deflationary environment, what are we supposed to do then? if we're wrong on the other side, we have inflation, we can deal with it. >> all right. folks -- >> by the way, we should talk as well -- >> and that's hit the nail on the head. >> there's an argument, steve, about the fed having some dry powder for that next episode, but we'll save that for the next discussion because we've got to leave it right there. >> thank you both for joining us. >> thank you for being here this afternoon. >> we're going to step aside for a couple minutes here. the delivering alpha conference continues here, kelly. >> yes, one heavy hitter after another making headlines at the conference here in new york. >> and our andrew ross sorkin is moderating a panel on the activist agenda, featuring ken muls, chairman and ceo of the company of his name and nelson peltz. let's listen in. >> which is the last time that we sat together, a year ago. we made -- you made a little bit of news. i asked a question, you didn't answer it. that made news around dupont. we're going to go there in a moment. but you also made some news around pepsico at the time, which at the time you were trying to split up. and we're literally a year later. >> right. >> and i want to gauge where you think this pepsi situation really is anymore. >> okay. >> have you disappeared from the scene or is there more to come? >> we definitely haven't disappeared from the scene. in fact, over the last five or six months, we've met with about 100, 100 of the top shareholders of pepsi. the stock has moved up dramatically. it hasn't moved up because of earnings. they had a big reset a couple of years ago and haven't even gotten to the guidance they gave in '12. the company is not being managed well. and the stock has moved from the 60s where we first got in to about $90 today, and that's not because of earnings. it's because of the fact that our message is resonating with the shareholders of pepsi, and i urge you to watch this space, andrew, and you'll see what happens. >> what does watch this space mean? >> it means that there will be action. >> does that mean there's going to be a proxy contest? >> could be. >> could be. >> could be. >> so, you're still in this? >> oh, 100%. >> and you still want to break up this company and put it into? >> most definitely. >> let me ask you one other question. you said that it's not earnings. if you look, in terms of the stock performance. you got in in the 60s. it's now $90. >> right. >> you should not be that unhappy. >> i am unhappy. >> as an investor. >> don't i look unhappy? >> you look relatively happy. the reason i say it is, if you would look at what pepsi would argue, given the reset you talked about, they would argue that the stock has actually out-performed during that period, its peers. they would argue that they have beat estimates, i think 14 consecutive quarters in a row. don't you give them some credit? >> none. i give them no credit, because the stock was supposed to, according to them, earn $5 in 20 2012. they missed a little bit and they earned $4.10. last year they were given high-fives because they got to about $4.34 in 2013. so, the stock is not moving because of earnings when the company should have been earning $5 two years ago. the stock is moving because people, shareholders see the wisdom of what we're saying. there has been a cultural change at pepsi. the whole wonderful part of pepsi -- don't forget, we have so much credibility in the beverage business. i know you're old enough to remember that in the '80s, we were the largest supplier to the beverage industry worldwide, when we owned american national can. we sold more cans, more bottles, more caps to the beverage guys than anybody in the world. . roll forward into the '90s and early part of this century, we own snapple, so we competed with them and competed with them very well, and he did the financing and advised us on snapple. and it was a brave financing. >> what kind of -- briefly, what kind of relationship do you have with innooyi now? >> she was very open to speaking with me, but i got the heisman every time we wanted her to give information to shareholders. simple things like what's the roic on the $21 billion she spent of shareholders' money to buy the bottlers? the bottlers today are in disarray, okay? she spent $21 billion of our money with a negative return. >> ken, you're not working for pepsi in this case. >> no. >> but if you were and he comes a calling, what are you supposed to do? what is the answer? >> well, look, what i think's interesting is when he comes a calling -- you know, he's spoken to 100 shareholders and he's one of those. and it's an interesting thing, each one of those shareholders has a point of view on pepsi. and there's a reason therein as well, they've spent the same money nelson has. and i think, so, the word activist is kind of a funny thing. everybody is an activist when you take out your checkbook and you invest hundreds of millions of dollars in a company. you actually have a theory as to why that company would be worth something. so, look, it's hard for me to back up. i mean, this has been going on for a while. but i would say to sit down. i think it's unusual that they're not having a conversation with somebody who has -- >> well, it sounded like they were being open and having some kind of conversation. no? >> no, they were. >> the problem is you're saying it's past tense? >> no, no, no. i'm sure if i called today, i could have a cup of coffee or a coke zero or diet pepsi -- >> she would not have a coke zero with you. >> with indra. but no, seriously, i'm sure she would accommodate me. and the lead director, ian cook, met with me. but, and they're very polite and they listen, but they are stuck in their ways, and they don't own the company, okay? the shareholders -- andrew, you've got to let me finish here -- the shareholders own the company. and the reason this stock is at $90 today, it is not because of earnings, it's not because they're taking market share in north america in the soft drink business, it is not because of that. it's not because they're doing better than coke. it's not because they're coming out with new products in the snack area. it's because we're there and shareholders are starting to agree with what we're suggesting this company should do. >> let's just put a fine point on this pepsi topic, because there's a lot more to talk about. i'm hearing you suggest that you may pursue a proxy contest. >> no, you're hearing me answer a question that it's a possibility. >> okay. >> that's what you heard me say. >> let's talk about a couple other things in the news. remembers also going to be hearing from carl icahn in just a little bit. you are on the board of family circle -- >> no, no, family dollar. "family circle" is a magazine. >> "family circle" is a magazine. >> i know it's the first thing you read in the morning. >> thank you. thank you very, very much. >> i'm here to help. >> state of play as you see it now. can you be happy with what's going on at that company? you've made a lot of money in the stock, but it has not performed. >> it has not. we were in the stock in the 30s. the stock is in the 60s. we got in this stock, earnings were in the low $2, last year they reported high $3. but if you're asking me if we're satisfied, we are not. there is a wide gap between performance at family dollar versus dollar general, and we think that they should be able to close that gap. they put out a poison pill after carl made the announcement. the only one who voted against that was my partner at gartman, who's on the board, because we believe in great corporate governance. and if carl wants to do what he wants to do, we have no objection. we think that's good corporate governance. >> okay. let me just throw out one more name, and then i want to get into it. bank of new york mellon. >> yes. >> you have now invested $1 billion in that company. it's about 2.5% of the company. >> yep. >> what kind of talks have you had with the company? what are you planning to do? we have not heard from you on this yet. >> no, you have not, and the reason you haven't heard from me is because the way we do things is we like to meet with management and the board and take them through our white paper before we make it public. other activists like to do it in reverse. we prefer to give them the ability to respond out of the public eye, but the public knows that we have a lot of stock here. and it's an area that we have a lot of credibility in. we've been in state street, we've been in lazard, we're in legg mason. and every one of those stocks basically round numbers have doubled. >> can you play out what you'd like to see them do? >> sure. if you look at when we got into state street in 2010 -- and the businesses are very similar, okay? the margin, the pretax margin at both those companies were very close to one another. from 2010 until today, state street's margin has increased by around 250 basis points. and bank of new york's have increased. so, there's a 360 basis point delta which we look upon as an opportunity. now, we are having what i hope to be constructive conversations with the board, and i hope they will adopt our point of view. but we're not going to -- i'm not going to share our point of view here today, because we want to give them the first choice in responding properly. >> right. ken, he made, i would describe, can i say, it was a subtle dig at some other activist investors when you suggested that you talk only in private about these issues and there's some other investors who talk publicly about these issues before sometimes boards get a chance to deal with them. and so, the question i have for you is you are on the defense oftentimes. >> yes. >> more often than on the side of an activist, though i want to talk about that. by the way, herbalife we're going to talk about in a moment as well because he represents herbalife and may have interesting views about bill ackman, who arguably doesn't usually give the boards that much of an opportunity first. but activism at large, the way you see it, is this good or bad from a policy perspective for society? and i ask it because you look at some of the deals and he's made a lot of people a lot of money. jim cramer recently said if you piggyback off of your deals, you can make a lot of money. but there have been a number of other deals where people have followed the activists down the yellow road, but it has not gone to the right place. >> look, that's a complicated question, because you're allowed to have an opinion and you're allowed to be right and you're allowed to be wrong. so, and it's hard for me to say. i think the word activist has gotten too much play. i think, as i said, every investor in some way thinks they have a theory of what that company can achieve and why they're going to make money. some choose to go to the nearest megaphone and yell loudly and others choose to go to the back of the room and wait. the thing about, you said, and what nelson said about speaking quietly, is look, there's a board of directors in every one of their companies. they talk strategy quietly, effectively. there's a lot of complications that people think are simple from the outside. it's amazing how little tax, you know, how people don't understand the intricacies of tax and things like that sometimes. so, i think what nelson tries to do is become part of the corporate conversation quietly, which is how decisions get made. i mean, i have a public company, and i feel like i'm the biggest activist in moelis & company, but you know, you do it quietly and within the bounds of the corporation. >> right. what is the state of play on herbalife as you see it? and i ask it, and i'd also be curious about your decision to advise herbalife. you have bill ackman saying this is a pyramid scheme. how much diligence did you do before you decided you were taking on that assignment? >> look, i knew the company for many years. the company had gone through, it's been in a leverage buyout with some significance institutions, owned it for many years privately, and then it went public for many years. and i know the ceo's a personal friend. so, andrew, it's one of those things where it's almost, as you can tell by the two-year debate that's gone on i'm not sure it is a smoking -- you know, there's not a due diligence item that says you're right or you're wrong, it's the character of the people. i really respect the ceo. i know the people. i've been with them a long time. so, it wasn't a decision. they called me up and said we have an issue. >> but fair or unfair for an activist to take a position as publicly as they have? it's different than the positions that you have taken. you've traditionally taken long positions. >> yep. >> look, you can do anything, and it's legal, so you can do whatever you want. now, it's very different. it's amazing to me that people see herbalife and the context of what nelson's doing. it's completely different. if somebody buys you stock and says i think your children are even better looking than you think they are, but they should do this with their career. you're almost, how high is up on the assets? nelson is literally saying, you're saying he should be happy the stock is up. he's saying no, because there's even more to go. so, that's quite a good debate to be having. the trouble with, you know, what's the issue on herbalife is one person, i think, is trying to say thousands of people should lose their jobs and we should shut a company down that is providing jobs and service to america. so, it's a very different outcome. the outcome. >> you look at that situation, what do you think? i mean, bill ackman is considered an activist, you're considered an activist. >> we're very different, as you know, okay? we are very different. we come from a background of building and managing businesses. i spent most of my career operating businesses and fixing businesses, not staring at the bloomberg screen. and so, the whole mind-set at trian is looking at a company that's got great potential and how do we get -- >> all right, we're going to step in for a moment here because of the close bell coming up momentarily. we just want to give you a sense of this market as it closes out a very, very busy news day. and we'll be getting back to the delivering alpha conference there in new york city at some point, and you'll be hearing from carl icahn, who will be speaking at some time as well. but right now, the dow's up 63 points with about 2 1/2 minutes left, the nasdaq up 8 and the s&p up 7 points. joining me is eric schoenstein from jensen and chris ressler from needham growth fund. eric, tight on time, but here we are, all-time highs, fed's dovish, the beige book was positive today. is it still all systems go or do you take some money off the table here? >> well, i think it still is potentially all systems go. the difference is, as we'd like to see, you know, what we would like to see from a jensen perspective, our disciplines is be a bit more selective. >> okay. >> i think there's plenty of room for certain kinds of stocks to still do well in a market like this, and i think there definitely are some undervalued places where people can go. i don't think it's all systems go across the entire market, though. >> yeah. i mean, chris, we have seen, you know, just to get subtleties in this market, the small caps had been leading the way to the up side. that russell 2000, the nasdaq, very strong. now they're the laggards. what does that tell you about this market right now? what's your perspective? >> i think there's certainly some nervousness. there could be some concern going into the second half, although we certainly think it's going to be better than the first half where we were hit with weather. so, i would take the opportunity during earnings season here for any dislocations on low volumes to take positions in companies you really like. >> what do you think of the bank earnings so far, eric? you know, they're pretty good. at least they've beat expectations. those expectations may not have been that high, but you know, some of these numbers from jpmorgan and goldman sachs and wells fargo have been pretty good, you have to admit. >> yeah, they have been good, but i think that's where some of the strength lies, within the financial sector, companies that have good competitive advantages, kinds of things we look for. jpmorgan certainly has those. some of the others has them. again, it's going to be selection depending upon where you're looking, sectors or industries, that you find those companies with strong fundamentals. there's no question they can continue to move in a market like this. >> chris, quickly, the beige book suggested the consumer was doing pretty well, but i thought we were in a retail funk. where do you stand on consumer stocks right now? >> well, certainly, they're hitting lows in many cases. i think that there's very few opportunities there. the consumer is definitely under pressure. the pain at the pump continues. so, i would be cautious with consumer stocks at this point. >> all right. very good. thank you both. appreciate your patience and your thoughts on the market today. as we go out, 78-point gain, enough for a record high for that and for the s&p as well. stay tuned. much more to come from the delivery alpha conference in new york city, including carl icahn, as we get to the second hour of the "closing bell" with kelly evans and company. i'll see you tomorrow. yes, welcome to the "closing bell," everybody. we're going to get right back out to the delivering alpha conference in a moment. we just have to mark for the record here, that as the market closes, it looks like it's going to close at a new record high for the dow jones industrial average. we'll have full coverage in just a second. for now, though, let's get back to nelson peltz at the delivering alpha conference. >> where are we now? >> okay, we are having conversations with dupont. those conversations will have an end very soon, one way or the other. >> and they are going how? >> i don't know yet, okay? i don't know. the last conversation we had with them i felt was quite constructive. let me tell you what's going on at dupont. what's happened at dupont is they did some very good things. they on the balance sheet side announced the largest buyback they ever made in history. they got out of some businesses that we felt they should have. they agreed to spin off performance chemicals, which is about 20% on the revenue line of the business. all great moves. on the negative side, they have missed their guidance for three years in a row, okay? and what was fascinating is when i said paints, but they wrl weren't in the paint business. they sold that business to carlisle. and here's a fascinating story. when carlisle bought the paint business, dupont said they sold the business for about 12 1/2 times ebitda. when carlisle put out a bank book to finance it, they said they bought it at about 6 1/2 times ebitda. now, nobody was lying. nobody was -- everybody was telling the truth. the difference is the allocation of corporate overhead, which carlisle obviously decided that they didn't need, okay? so, dupont is a conglomerate. it's a complex business. and we are always trying to simplify businesses, because simple businesses grow faster. complex businesses don't. and that's what needs to be done at dupont. and we will know some time before the middle to the end of the summer whether these conversations have been constructive or not, but -- >> and then you -- if they're not constructive -- assuming they're not constructive -- >> then you and i will talk again in front of a microphone. >> okay. here's sort of a strategy question. take us inside the board room, and let's take nelson out of it for a moment, because i think he actually acts perhaps differently than many of the other activists. we'll differentiate you for a moment here. >> thank you. i appreciate it. >> from a strategic perspective, do you want to bring them in under the tent? do you want to make them board members? does that shut them up? is that a way to silence them? do you want them on the outside? do you want them on the inside? how do you think about it? >> actually depends who they are, what their plan is. so, again, andrew, i think that you have a conversation. i think sometimes, the worst thing that happens is a lot of advisers run in and say, oh, my god, this is -- selling, as i said, you know, pandemonium sometimes creates the need for advice. but it also puts up the spotlight on the adviser. i think sometimes, the firms that have a position taken in them cause their own issue by handing the "activist" the spotlight and a microphone, and they get to -- they get more attention on their program than the corporate. so, i think that becomes the problem, an overreaction to somebody who has -- >> an overreaction by including them or by not including them? >> sometimes the act of defending yourself and going to the ramparts against these gives them the ability to say, hey, we're the excluded party with the good idea. you actually give them a microphone, because now people want to know what they have to say. so, sometimes including them in a quieter conversation can be appropriate, if their conversational tone, method, theory has anything to do with your business plan. and it starts with, look, i think it starts with is your business plan appropriate for the owners of the company, like nelson said? are you running a business -- look, and i would hope most people come to the office every day and think that the business plan they're running is the single best way to maximize the value for the owner. that's what we're all paid to do. and sometimes, there's misalignment on that. so, i think it really is specific to the individual as to whether or not they're constructive. by the way, there's a big culture. i want to say this, too. there's a culture on boards, like at any other place. there are people all over who meet smart people but they wouldn't want them to work in their company, no matter how smart they were. so, there also is, when you talk about the methods that some of these activists use, the tone, i do think there's a cultural thing. and you're allowed to protect the culture of your board and your company. >> when carl comes calling, he comes with a white paper. some people would argue carl comes with a gut call. what do you do with him? >> well, carl's a tough one, because his gut calls, he's got a good gut over the years. and so, look, carl is -- you have to be care -- you have to respect carl's gut. i think it's one of the unique guts in the world, and that's why he's so difficult, because he often has -- he's often got a point of view, and he's also got huge access to a microphone, by the way, which is his biggest asset, i think, besides the fact that he has a deep pocket. he has unusual access to a microphone. >> does he deserve the microphone? >> in some ways, he's earned it over the years. you have to give him credit for being able to grab a microphone before he deserved access to it, and now i think he's kind of earned his access to it. so, yeah, i think his methodologies in the early days are what you really have to tip your hat to him, that he got so much attention before he earned the right. now i think, you know, i think longevity on wall street and being right a few times earns you the right to, you know, get the microphone. >> i know you pick individual names and individual companies, but where are we in the market just broadly? what are you thinking these days? >> look, the market clearly is more expensive than we'd like it to be. but given that, there are great opportunities out there. there are great businesses that aren't doing what they need to do. and we're looking at trian -- and i look at it from our point of view. we have eight to ten positions. it's a very exclusive club to get in. of all the companies in the world, we're only looking for eight to ten of them. >> but you have to care where the economy is, you have to care where the multiples in the market. >> absolutely. when we look at a business, we determine what are the earnings going to be under our plan? and if those earnings are significant enough increase over what's happening there today, then we're going to invest. if we can get a 25%, 30% uptick in earnings -- >> do you think there was as much opportunity this year as last? >> well, by definition, there isn't, because the market has moved. but i still think in individual names, there's a ton of opportunity. you know, speaking of microphones, warren buffett's got the biggest microphone on this network, by far. and rightfully so. >> carl may fight with him for that. >> okay, right now warren's winning, okay? but my money's on carl long term. >> the volume's different. >> hold on, hold on, you're betting on carl in terms of returns over warren buffett? >> in terms of microphones. okay. you, andrew -- >> yes. >> you and i both know what i'm about to say, is that twice cnbc asked warren buffett what he would do -- what pepsi should do. >> i think i was one of the people who asked this question. >> you did. you asked what warren buffett would advise the pepsi shareholder. now, when you ask a research analyst on about a particular stock, you guys put that big chart up that he doesn't own any stock, his wife doesn't own any stock, he never thought about owning the stock and so forth. you bring warren buffett on and ask him for advice on pepsi, and you never tell the audience that he's the largest shareholder in coke. you never tell the audience that he's been on the board forever. and now his son is on the board -- >> his son's on the board right now. >> i was going to finish the sentence, his son's now on the board. >> i think we do tell people that. >> you know you and i had a telephone call about it -- >> that one day, but most people know. >> now. now they know. now they know. but i want you all to know that. next time you get pepsi advice from the largest shareholder of coke. bear that in mind. >> before we let you guys go, let's talk, just m&a deals, sort of where we are, if you will, because it feels like it's getting a little frothy. i'm going to start with just the deal of the day. it's not a deal, it's a rejected deal. time warner, 21st century fox. what do you think happens? >> look it, i'm not going to comment on a specific deal. i think -- >> are you involved? >> i'm not going to comment on that deal. >> are you trying to get involved? >> my involvement. but look, i think what you're seeing is, it's an interesting thing. i think, you know, from '09 to '11, to '12 and '13, that's a long time, three or four years. you had people almost sort of happy they survived, you know? that started to wear out after '12 and '13, but you know, three and four years of, we're just happy we're still here, and then you add a consolidation. i think the amount of interest in doing something, and that doesn't mean just merging, it could be selling a division, it could be doing -- but i get the feeling everybody's now on their front foot again and saying, we should be thinking of what we should do, not remembering, you know, the good days that we survived. and i think that's what you're seeing is just a real activity level in trying to figure out what the right thing to do is, and it's very interesting. everybody is going through their options. >> if you're on the board of time warner, what do you do? >> look, if i'm on the board of any company where there's an offer that comes in, i want to negotiate. i mean, i don't just send people packing for the sake of having them pack. on the other hand, i've got a great deal of respect for time warner. rupert murdoch is a good friend of mine. but what i think is interesting in this transaction is that we've penciled some numbers very quickly this afternoon, and i think that fox is putting about five times leverage on the company in order to get this deal closed. and what's interesting is you're starting to see companies use their balance sheets again, okay? and i think that within reason, i think that's a good thing, because the companies coming out of '08 have really been so frightened and have been hoarding cash, and there's been a big seed change. and i credit kenny when we had a sit-down. and i pick kenny's brain a lot. he says i pay him every time haley's comet comes around the earth. [ laughter ] but every now and then, i do pay him. but i do like to pick his brain. and we were talking a couple years ago about where this m&a market was going, because it was, you know, it was a nuclear winter 2 1/2 years ago, as we talked about. and now it's come back. we bought a lot of stock in lazard. >> right. >> very happy about that. about half the price it is today. and lazard and moelis are great beneficiaries of this new m&a market that's come back again. and i think it's here for a while. i really think it's going to be here for a while. >> do you buy any moelis? >> that's a sad story. we had a big argument when he was putting the company together on valuations, and i totally disagreed with his valuation, and he proved me totally wrong. >> okay. we are going to leave the conversation there on that note. i want to thank both of these gentlemen for a great conversation. >> thank you. >> thank you. thank you. >> that was nelson peltz, ken moelis talking to our andrew ross sorkin at the delivering alpha conference today. so much activity. there's that session. there is more to come, by the way. there is the fact that the dow jones industrial average just closed at a record high. let's get to the panel, talk through this as we await earnings from ebay due out in just a couple minutes' time. bob doll, jon najarian from optionmonster.com, also joining us to wrap up the action on wall street is "fast money" traders guy adami and tim seymour and pete acosta from empire executions. so, let's see. we've got yum! orbits, las vegas sands, sandis, kinder morgan, just after hours, dr. j. everything that happened during the session today, the m&a activi activity. where do we start? >> well, you would start with the m&a activity, i certainly would, because an $80 billion deal is a big deal. time warner, i think that's huge. i'll bet that we're going to see, kelly, some competing bids come in, and i say bids as in plural. everybody throws disney out there. there may be another firm that happens to be one of the biggest media companies in the world that might have an interest. >> well, we asked bob wright this question in the last hour of the program. he said, basically, that the low interest rates here, the ability to pile on and take into account, bob doll, mass amounts of debt are a reason behind this deal, that they're looking to perhaps create a disney by tying these two companies together. but to your point, who knows who else could be a suitor. what's your take on this deal? >> twx has been in the rumor mill for some time. now it's in play. and so, if anybody's at all interested, they've got to now start putting up or shutting up, because this property's probably going to disappear. it's now or forever hold your peace. >> so, why isn't it trading at the least the $85 price that was going around? if the sense is that it's either going to be this deal or the next one, shouldn't there be a premium, if anything? >> you would think maybe i'm wrong, maybe it's going to take time to get there, but i've got to believe that because this has been swirling and there are lots of players. now, only certain, you've got to be big enough to be able to do this deal and that's a limited number of players as well. so, we'll see how this plays out. but he's the cash flow story and the confidence of corporate america to enter a deal like this. >> is that your read, peter? and what about the action today, the fact that we closed at a new high for the dow? >> there's a couple things. i think with the time warner/fox deal, i think people are forgetting about having the government involved, where they might feel that there might be some antitrust issues involved. i think that's part of the reason the stock didn't get to where it should have been, which would be closer to the $85 price target. i do think there's going to be other suitors out there. i agree with bob, i think it's, you know, it's in play. a lot of cash out there, especially in the media companies. everyone wants to own content, everyone wants to own these industries, and i think that you're going to see more of this going forward for the next couple of months. >> guy, do you agree? >> kelly, happy birthday, first of all. timmy and i hear the place is buzzing. >> thank you. i'm disappointed you weren't part of the song. >> i am as well. do i disagree? no, i think part of what happened is, and this might be from yesterday, you look at how horribly lorillard traded on the back of the reynolds scale, and i think people, you know, that's the risk and risk arbitrage. so, i think that's one of the reasons, well, maybe time warner didn't trade as properly as you wanted it to trade. >> fox, by the way, look at the action there. fox was down almost 5%. >> that's exactly right. and that is when you talk about risk arbitrage, well, that's the risk side of things. >> that's a good point. >> and when you're talking about using your own stock as well as cash for the deal, when the acquirer is falling 5%, it's likely that you're not going to be at the number that they first stated, which was $85. >> here's something else, though, kelly, and a big happy birthday as well. >> thank you. >> people seem to have underestimated going into this deal the valuation on twx when they were valuing hbo and time warner properties. so, this is one of these things, you couple that with where rupert murdoch is at least noted to be a guy that will not take no for an answer and may pay a bigger number than he or, yes, it's confusing on a day when you think it would go higher. having said that again, i don't think people have been valuing this company correctly. and i think he thinks he's got a good deal. i think he's getting a decent price for history of a guy that's maybe overpaid for assets on day one. >> what do you think the company's worth, tim? >> well, you know, $85 is certainly a fair takeout price, but a lot of people have the hbo studio's numbers 20%, 30% higher. look, "game of thrones," a lot of the properties coming out of here, and a lot of people compare it to the credit that netflix is getting for some of their original content, and people say hbo is worth a whole lot more when compared to how netflix has monetized their content. >> does it make sense to you, then, that time warner's not trading at the least the price bantered around in the market today? >> i don't think that it at $85, and you're that far off a number where the market should fairly price. wait for a bit of a shakeout here, and i do think murdoch has to come back to the table. i do think he'll be forced to sell off assets. i do think there will be spoils for other players here because the regulatory environment dictates that as well. >> okay. want to bring people up to speed on the action we've seen just after hours today as well. several big reports. yum! brands, which saw decent china numbers in tlparticular orbitz is doing a secondary and preannounced their second-quarter revenue, looks a bit higher than the street was expecting. las vegas sands, might have had a miss on the earnings side. sandisk, interestingly enough, shares looked to be off by a significant amount after market. we'll talk about, perhaps, the kinder morgan dividend hike as well, but we're also watching ebay. now, ebay moving around as that company's earnings are out. and morgan brennan is going to join us to walk through those numbers. what do you see, morgan? >> all right, we're still sorting through the report, but right now, non-gaap 69 cents earnings per share. that beat analysts' expectations by a penny, and that is on $4.4 billion in revenues. that's coming in just about in line, again, with street expectations. one of the things i want to call out, commerce volume increased 26%. and the thing to really watch here is they have revised their forward-looking guidance. q-3 coming in a little light here, coming in at 65 to 67 cents non-gaap earnings per share on revenue of $4.3 to $4.4 billion. that's a little less than the street was expecting for the current quarter. also, taking a look at full-year guidance, eps in line and revenues, again, a little light there. kelly, back to you. >> thank you very much. i want to get some further reaction now to these numbers from ebay. the shares are gyrating a bit after hours on this report. let's bring in analyst colin gillis and david garrity. tim seymour's with us here still, too. colin, the first three lines of this report, or perhaps -- i'm sorry, let's go to david garrity, if you're with us. the first three lines of this report are interesting. they talk about volume growth, revenue growth, and by the way, a $1.7 billion buyback. how does all this change your view on the stock, if it does? >> it doesn't necessarily change the view, because the company already had a buyback in place before this. the fact is, is that the momentum in ebay seems to be decelerating. we saw lightness in terms of the top line, meaningful reduction in terms of bottom-line guidance for the third quarter, and then also revenues also a little bit light for the year. so, from that standpoint, ebay management kind of like a frog in a frying pan. everything's accelerating around them, but they're not really moving fast enough, i think, to keep pace. and hopefully with carl icahn being back in the stock, based a may 27th, '13 f-filing, maybe we see some activist agenda get back here to get a stock up, which is 15% off its 52-week high. >> and we're going to hear from carl icahn shortly at the delivering alpha conference. but david, do you have a sense yet as to whether this is deceleration in paypal? >> obviously, we haven't seen the breakdown in terms of paypal, but paypal's the one thing that's growing most rapidly. and the question for paypal is we're going to be seeing greater competition potentially coming from the likes of apple, when they roll out the iphone 6 in the second half of 2014. so, paypal obviously may face greater challenges going forward. >> colin gillis, i believe you're with us now. your thoughts here. >> yeah, kelly. so, look, everyone knew that ebay was going to have a difficult june quarter. they had the data breach that happened in the june quarter. there were changes to the google algorithm that causes some ebay search results to fall further down from the top of the page. so, the fact that this number came in, you know, in line to slightly better is a positive. now, you have to consider what kind of a stock is ebay? ebay is growth at a reasonable price, you know? it's going to grow in that midteens range and it's trading at 16 times. it's been stuck in this, you know, $48 to $59 range over the last 52 weeks. it's been an excellent stock to trade. >> well, so, sounds to me like you're saying give them a break. >> yeah, absolutely. they're doing what they're doing. the data breach was unfortunate. >> do you not see the deceleration that david garrity's talking about? >> well, you know, i think the deceleration in the june quarter was tied specifically to the data breach. there was more friction for people to complete transactions. >> okay. tim seymour, what's your thought here? >> i guess my question for david, and it sounds like colin is giving him more of a pass. a lot of these events are transitory for ebay. and if you think about their valuation in the e-commerce space, i'd say this is growth at a very reasonable price and the change doesn't necessarily change their model. the marketplace we knew was going to be slower. and comps on ebay are actually not bad. i look at the range in a stock and as a trader, it tells me $48-$49 is my down side and this is a $60 stock without them doing much from here. >> tim, i would say if you look at the historical growth rates for the company in the marketplace business, that growth rate peaked back in 2011 and has been decelerating ever since. so, from that standpoint, if you're looking at an overall economy that's accelerating, you're still looking at a stock right now that trades at about 17 times 2014 numbers, basically a premium to the market. you're not getting a total return on this, because obviously, you're not getting a dividend, so -- >> i agree with that, and the slowdown in the growth is absolutely noted, but how about just on the sum of the parts, the valuation of paypal? this is what a lot of the guys on the street are just valuing this, saying look, if i break this apart and look at paypal, which is the biggest growth engine, i get a bigger number than on the headline. >> david? >> some of the parts probably say paypal's worth $20 a share, but we have a valuation team that won't give you that for the parts. >> that's a fascinating way to set up what we'll hear from carl icahn, i'm sure, later this hour. that's it for now, guys. colin and david, thank you both for being here. >> happy birthday, kelly. >> thank you. that report. secret's definitely out. stick around, because we'll be seeing more of guy adami coming up later this hour as well. melissa lee and the "fast money" crew are going to join us from delivering alpha. it is a kind of "closing bell"/"fast money" mash-up here. we should call it "cb money." it starts in 20 minutes and you don't want to miss it. and from apple to ebay, activist shareholder carl icahn has made a ton of money and news in the past year. he's about to make more headlines, taking the stage at delivering alpha. this must-see tv is straight ahead. ♪ during the cadillac summer's best event, lease this 2014 ats for around $299 a month and make this the summer of style. ♪ we're changing the way we do business, with startup ny. we've created tax free zones throughout the state. and startup ny companies will be investing hundreds of millions of dollars in jobs and infrastructure. thanks to startup ny, businesses can operate tax free for 10 years. no property tax. no business tax. and no sales tax. which means more growth for your business, and more jobs. it's not just business as usual. see how new york can help your business grow, at startup.ny.gov in a 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. welcome back. we've been talking a lot about tax inversions on this show. that's when an american company merges with a foreign firm in order to then base their operations in the other country where the tax rate is lower. two days ago, mylan's ceo was here explaining why she is doing that. earlier today, treasury secretary jack lew shared his view, which he also conveyed in a letter to congress, where he wants companies to stop it right now. >> on this question of inversions? i used language in my letter that's pretty strong. i said, we should have some economic patriotism here. it's not right to take an american firm to benefit from all of the things that we do in the united states to make it a safe place to do business, but then to say i don't want to pay taxes here, to shift my corporate address overseas to pay a lower tax rate or no taxes. >> so, as the tax inversion heats up, joining us now with more reaction to what policymakers should do, if anything, larry kudlow, cnbc contributor and frank lamente with americans for tax fairness. welcome to you both. larry, where do you stand on this issue? >> look, i think lew is completely wrong. his language is offensive. this business about patriotism is nonsense. what he just said, he said they don't pay taxes? the trouble is, we are not competitive. the trouble is, our tax rates are 35% to 40%. most of the rest of the world is 20% to 25%. shareholders, both retail and institutional, are putting pressure on companies to try to get a lower tax burden. where's the tax reform? he's had two years to do tax reform! the house is passing tax reform. the senate has bipartisanship on tax reform. and the white house won't touch it. we are driving american companies overseas! >> frank? >> i call these benedict arnold companies. they're really traitors to america. they've gotten all the benefits of operating here in america, educated workforce, customers, you've got walgreens, america's biggest drugstore chain, 25% of their sales come from medicare and medicaid, government programs, and yet, they're pl planning to invert, go offshore to a tax haven. it's outrageous. >> right. may be outrageous, that's great rhetoric. the fact of the matter is, they're all global companies, they all have pretty good infrastructure overseas. in some cases, their infrastructure is better than ours. look, it's so simple, kelly. let's go to a 20% marginal tax rate on corporations -- hell, i'd abolish it, but let's go to 20%, all right? let's make it territorial so you're not double taxed on what you earn overseas. let's let it repatriate at a low rate, say 5%, give full cash expensing. that package would keep american companies here, would bring their money, bring their overseas money back to america. >> right, right. >> you'd have better business investment and job creation. this is the heart of the matter. these companies won't create jobs at these kinds of tax rates! >> and frank, would you take issue with that? a 20% corporate tax rate across the board, 5% on unrepatriated and a territorial system so you'd pay what the rate is where you sell those products? >> we've got big problems with that. a repatriation tax holiday's a joke. >> this isn't a holiday. this is 5% permanently. >> so, you want -- you're just going to create more incentives for a company to ship jobs offshore and -- >> isn't that what the ex-im bank is for? >> no. look it, these companies, the companies that are doing this in inversion are the worst tax offenders we've got. they are the ones who are shifting, have shifted their profits offshore to tax haven countries. so, you're going to go ahead and reward them -- >> no, these companies -- >> with a permanent lower -- >> these companies have at least 20% of their size. we're not talking about just a simple inversion where they're a shell entity in a remote place to just purely gain the system. we're talking about legitimate takeovers of companies that have legitimate businesses in other parts of the world. >> but what is happening right now is these companies are going offshore because the law allows them to. we should immediately pass legislation that prevents them, unless -- >> no, we should immediately pass tax reform legislation. >> ban them altogether? >> look -- [ everyone talking at once ] >> we should immediately pass tax reform legislation for corporations, okay? the left hates business. no matter where business is -- >> no. >> larry. >> that's not fair. >> let's get serious about this. >> we want businesses to pay their fair share of business just like american taxpayers do. >> how can they pay -- >> look, there's a relatively small number of companies that are going offshore. >> don't you understand? don't you understand? >> you have all these companies here in america, firms, primarily, small businesses on main street, they're paying their fair share of taxes. and what you want to do is reward the multinationals that are taking advantage of the swiss cheese loopholes and -- >> we have to go, larry. you get the last word. >> small businesses are not paying -- look, if you have high tax rates and you have a lot of loopholes, like our system has, then you get less revenues. if you go to my plan and you lower the tax rates and get rid of all the loopholes, you'll get more tax revenue and more stay-at-home companies and more jobs. >> but larry, call your buddies on capitol hill and make it happen. we've got to leave it there for now. larry, appreciate it. >> sounds like reaganomics to me. what happens when an unstoppable force meets an immovable object? you're about to find out, because "fast money" is going to collide with the "closing bell" here. we'll call it "cb money" for the afternoon. we are previewing the highly anticipated appearance of carl icahn at the delivering alpha conference, and we'll be right back. r trade ideas that spark your curiosity tdd#: 1-800-345-2550 can take you in many directions. tdd#: 1-800-345-2550 you read this. watch that. tdd#: 1-800-345-2550 you look for what's next. tdd#: 1-800-345-2550 at schwab, we can help turn inspiration into action tdd#: 1-800-345-2550 boost your trading iq with the help of tdd#: 1-800-345-2550 our live online workshops tdd#: 1-800-345-2550 like identifying market trends. tdd#: 1-800-345-2550 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how. tdd#: 1-800-345-2550 sharpen your instincts with market insight from schwab tdd#: 1-800-345-2550 experts like liz ann sonders and randy frederick. tdd#: 1-800-345-2550 get support and talk through your ideas with our tdd#: 1-800-345-2550 trading specialists. tdd#: 1-800-345-2550 all with no trade minimum. and only $8.95 a trade. tdd#: 1-800-345-2550 open an account and earn 300 commission-free online trades. call 1-888-628-2419 to learn more. tdd#: 1-800-345-2550 so you can take charge of your trading. welcome back. there's been a lot of earnings action after the bell today, so let's send it out to morgan brennan with a quick wrap-up. >> thanks, kelly. we begin with sandisk getting hit in after hours. this despite reporting better-than-expected second-quarter earnings. it also increased its dividend by 36%, but investors don't seem to be impressed. the stock is trading down about 6.8%, almost 7%. las vegas sands also falling, this after the casino operator posted weaker-than-expected second-quarter earnings and revenue. that's currently trading down just about 2%. meanwhile, select comfort, that's actually moving higher. it posted better-than-expected second-quarter earnings on better-than-expected sales, and that stock is trading up about 13%. shares of online travel broker orbitz, that's moving lower after the company this afternoon said its q-2 results are expected to come in above street expectations, but also said that an affiliate of travel port limited, the atlanta-based e-commerce firm that owns 37% of orbitz, will sell 20 million shares of stock via a public offering. kelly, back to you. >> all right, morgan, thank you. now, as we await the appearance of the one and only carl icahn on the delivering alpha stage, we thought we'd take a page out of the digital media playbook and do a cnbc mash-up. it's "closing bell" teaming up with "fast money" and john in gay marriage. >> with me now, karen and guy. we are looking at ebay earnings after the close, a holding of carl icahn's, dan. you're watching those earnings. >> listen, sentiment was very poor coming into this. in a year that's seen some internet names and even big cap tech names really do very well. ebay has been a massive laggard. carl icahn got it to multiple year high at 60 and now back to $50. it's trading up on an in-line quarter and a mild guidedown. i think sentiment was really important. i think you'll own it as $50 your stop to the down side. >> how are you treating this in the after hours? >> i bought it in the after hours, mel. it t was down about 40 cents and stephanie lincoln and i have been going back and forth. i said gun to my head, i'm going to buy some here. i think there's a reason why carl icahn stayed with this stock. i don't think there's a lot of alpha there, but i think the reason he stayed is he likes what he heard from the board and from the leadership over there at ebay. so, if it's good enough for uncle carl, it's good enough for me, mel. >> is it good enough for bob dole? >> yeah, my view is the earnings and the business, the revenues are decelerating. we've seen that. that was reported earlier. and the question is, is the value underneath it via carl icahn going to come out some way, somehow? to answer that, question, it's going higher, but on a fundamental basis, i think it's a hum. >> melissa, what's interesting is are the carl icahns of the world heroes? are they villains? does it depend on the stock. >> it depends how you measure it, i think, kelly. i think what we've been talking about at the desk for quite some time is the tremendous amount of success that carl icahn has with almost every investment. and karen, you're noting that. as much as you may like carl, not like carl, that's neither here nor there when it comes to his track record. >> his track record is superb. there's sort of two things. one, he is a self-fulfilling profess phecy that has soon as files in a name, that gets the interest of a lot of shareholders and the stock goes up. however, that would just be a small, short-term pop. if you look at a netflix, the scale of that bet, how enormously successful it was, that's pretty impressive. plus, he has staying power. plus, he can come in with a bid himself, which is an incredibly powerful tool when you're talking to a board. say, look, you can do it my way or you can do it the hard way. >> and he can tweet it, too, karen, which now he does. >> now he can tweet it. >> and he moves the market. it's what he does. >> what do you think about that, though? is the strategy, kind of going back to the last question, are we ultimately seeing the role of the activist as spurring these corporate boards to action, these ceos to action, or are they trouble-makers, or does it just depend? >> they're a little bit of all of that. >> guy adami, what do you think? >> it doesn't matter. i think they are trouble-makers. i think it's in their dna to be trouble-makers, but it doesn't matter what you label him. carl's first foray into ebay was not good. we talked about it on the show that night when it traded up. do not follow carl in for all the reasons you're seeing the stock trade from $60 down to $48, a decelerating business. but now, this quarter wasn't terrible, and the guidance was just mildly poor. i'm in tim's camp, we're in the camp last night. i think you own this stock right here. you own it because you know he's going to start making noise again and you own it because the sum of the parts we poo-pooed in the earlier segment makes a lot of sense. against ebay for $50 makes a lot of sense. >> and how many stocks in your universe are mega caps? this is a $65 million market cap expected to grow earnings and sales 14% next year that traded the market multiple. there are very few. and that's why i think when carl talks about unlocking some shareholder value, he's looking at a value name here that's trading well below -- look at intel. it's $150 billion market cap, a company that's gone up 20% in two months. it doesn't take a whole heck of a lot to get this moving higher, probably towards the high 50s. >> wow. melissa -- we also, when we talk about some of these big high-profile companies, can't ignore the fact that soon we're going to get an ali baba thrown into the fray, there's google doing stuff on the payments front, apple may be doing more mobile payments going forward. that's obviously going -- we have to watch and see how it all shakes out. >> exactly. and of course, paypal. we are sort of joking, but a little bit of seriousness in this also. if ebay changes its name to paypal, would that actually improve the valuation of that company? and the answer is, you know what, probably yes, because that is where the growth is right now. >> yeah. all right, we've got to take a break. we'll leave the mash-up there for now. it's the talk of the town. thanks, everybody. and it's burning up the web. rupert murdoch's attempt to buy time warner. the story had big traction on the website today. up next, we'll see if it can crack the cnbc.com hot list. and carl icahn live from delivering alpha is straight ahead. you never know what he is going to say. stay tuned. welcome back. one of the most successful hedge fund players of all time, leon cooperman, came up with some new investments today at the delivering alpha conference. so, for more on that story climbing to the top of the hot list and the rest of the list, let's check in with allen wastler, managing editor. people looking for stock picks, no surprise there, i guess. >> no surprise, but people are just loving his picks. you should listen to him, because last year he went 8 for 10, year before that 10 for 10. this time he came out with 12, and kelly, it's the number one story on the website right now. over 51,000 people have looked at it. he's got some interesting picks in there, some that, you know, citigroup, really? and others maybe not off the beaten track so much. that's number one. number two, also from delivering alpha, chris christie's talk with john harwood. of course, the big question, are you going to run for president? and of course, he dodged it. but other subjects as well, bridgegate and how he's thinking about the budget. people are loving that. that's my number one video clip so far today. then finally, third, is the tesla news, they're coming out with their third car, sort of smaller, only $35,000. they're calling it the model 3, which is sort of a bmw coming for you and your 3 series. so, people are loving that. so, there we go. we've got stocks, politics and cars on the website. people are loving it and happy birthday, kelly. >> thank you. and i'll tip my hat to the profile of leon cooperman. an interest to anybody reading up on that. let's bring back tim seymour, taking dan nathan's place at delivering alpha with melissa and the gang. tim, we'll start with you. a lot of earnings after hours as we wait here to hear from carl icahn. is anything jumping out at you this afternoon? >> i'd go back to ebay, because to me, this is best valuation. we're at a time when valuations across the s&p and the nasdaq most notably, are at levels people are uncomfortable about. this is a company that is not broken, a company that had transitory issues that weighed down the stock in the second quarter, highly flagged. it's a stock where there could actually be some activity around the corporate structure, et cetera. there could be things going on that are catalysts, but most notab notably, it's a name i like on valuation. >> well, that was a pretty quick second round, guys. we hope to do it again in the future. thanks again. carl icahn is ready to speak at the delivering alpha conference. let's listen in. >> it's great to have you back. >> great to be here. >> you know what they say about sequels. >> great to be here, yeah. >> last year was fun. we'll try to live up to last year, get you to tell some stories, talk about some stocks, talk about activist investing and sort of what really makes you tick in what has become a rather controversial style of investing in today's market. i do want to begin, however, with the insider trading investigation and the news which broke about a month or so ago. we spoke shortly after that on the telephone. you told me at that time you had never met phil mickelson, that you had never given inside information to anybody and that you were proud of your record, which you characterized as unblemished in your 40 or 50 years of doing this. where do we stand today? there's been a lot of silence since then. where does this stand? >> well, i would say that everything i told you is correct. i have to admit, i'm getting a little tired of my friends, if that's the operative word, keep sending me e-mails asking for free golf lessons. and you know, i don't play golf. i don't know mickelson, but it seems that, you know, that's sort of the jokes, so i keep getting that. i will just say to you that i really don't want to discuss it any further at this time, and i think i would stand by what, you know, what you just said. and i may give phil mickelson a call. i've never spoken to him, never seen him. let me give him a call. iep owns a few golf courses, so i'll call, say look, i've got information for you, phil. the information is i'll give you free use of my golf courses and see what he says. but i'll tell you this, that i had never met the guy. so, these things happen, i guess. >> and you're just not going to talk about it. >> no, i don't want to -- i don't want to talk about it this time. right. >> do you feel as though, carl, that activism in general, unrelated to this, just in general, as it's really become prolific over the last year and a half, certainly, and further, obviously, is in the crosshairs? that more people are criticizing it, criticizing your style and that of other activist investors? >> well, i don't know what you mean by criticize it. in what way? >> well, you know the criticism that's out there, from whether it's marty lipton, larry fink in some respects, that you guys are only in this for short-term gain, that you're not in it for the long term, that you're not in it for the best interests of the company over the long haul. >> yeah, i mean, but that's completely nonsense, because, if you look at our record, iep icahn over the years? i've helped companies. acf. you could walk on our rail cars out of this door all the way to ohio. i boarded the middle 80s. we made it flourish. we made it work. i own a lot of stocks 10 years, 15 years, 7 years. so i mean, you know, you can't argue with nonsense. you know, when it's a pr machine, they used to say, you know, icahn loses money for shareholders. well, even they can't say that anymore because we made billions and billions of dollars over the last decade, over the last 20 years. so, they can't say that anymore. so now they're saying this. so, i can only speak for myself on that point. but on a general point, you know, you have it in germany, and this country isn't germany, and this sounds corny, country. i'm not so sure i love a lot of the people. i love the country. and from my point of view, we're going to lose this because these companies we have, with many exceptions, there are many good companies and ceos, but we generally don't bother them too much. but the problem you have is the wrong guys are running these companies because it's sort of -- i'm going to go into the metaphor. i said too many times how the fraternity president makes his way up. they like him, boom, booming boom, he's a survivor. he finally moves up the ladder. the guy below him, he 93s to keep a little dumber than him. he's the ceo. we have morons running the company soon. we are almost there sort of with many companies. it's amazing how bad these boards are and these companies are when we get into it. some of the board's interest, wanted help and want to do something. it's a sociological thing. they're friends for years and years with the ceo. they don't want to stand up and say anything. but after we get to on for a while. it happens repeatedly, some come around and look at -- it took 3.5 years for us to get this going. you could have bought that stock 35, six months ago. today i was surprised. we put a new ceo in. we got $100 a share for it. i got real friendly, started to respect howard solomon, who is the ceo. we have dinner. it's funny. i know this sounds completely strange and you might not even believe it, but i have dinner with a lot of these guys afterwards. they come and we sort of respect each other. not bad guys. >> and some have dinner multiple dinners, i think, or at least one with tim cook. so even while you are sort of arguing for change and for apple to do some things, are you still having dinner with the guy. >> tim, i have done irwith these guys lot. we're arguing. but tim cook, i think, it seems, in my opinion, is doing a good job. we're not here to discuss that. there are a lot of them that aren't. they shouldn't be doing it. they shouldn't be there. that's when we've made so much money. >> you've maintained to me privately. i think you even said publicly, your record speaks for itself. if you want to criticize activism and how it works and what the end result is merely look at our record, because we've done pretty darn good in the style of how we've done it. but is there more to it than that, carl? is it disruptive to the companies, themselves, in a negative way? should apple, for example, or any company, let's say, they're sitting on a lot of cash, they're worried about the fundamental also of their business. shouldn't apple be more worried about the products in its pipeline and things of that nature rather than an activist investor shaking a big stick at them? >> i don't even understand the question. don't take that the wrong way, but i really don't understand it. look. apple is a great company. it's got great products. hopefully, they'll be coming out with more great products. i certainly don't know more than you or anybody else out here. i talked with tim cook once. i was impressed with him. i, obviously, believe and still do they should give out that money. they should bring it back. repatriate it or borrow it cheaply. i said give it back, buy back stock. if they followed that advice, they would have made more money, but they did follow the advice to some extent. i think they bought a lot of stock back. i think, tim, as i had dinner with him once, i was very impressed with him. i hope that the products that are coming on, they haven't had a product really new product, a very new product for five years or so. they have this guy ivy who is still there when steve jobs was there. so, therefore, i'm not here to push apple. >> sure. py question, article, is not so apple spec as more to the idea of short-termism versus long-termism. marty lipton, for example, who has called you a bully, along other things and other things, says that you are only interested in short-term gain and your own interests and not those of the shareholders, desight what you say. i only bring up apple as an example. >> it's amazing, it's like saying i don't like this basketball player because he's too short. he's too short. so how can he say i'm short termism when i got these companies for seven, ten, 15, 20 years. he keeps saying, it's a pan tma. no matter what you say, it's a religious zealot that says, my god is right. how do you prove it? something like that. it's absurd to dignify it because it's just not true. you give them facts, they keep saying it. they stopped saying we don't have shareholders. even they can't say that. we make billions and billions of dollars. then ask yourself why i do it? like i think i'm a smart guy, but i'm certainly not a great manager. but you look at our companies, they've all 44ished with most of them. you look at it. what does that tell you, not that i'm a bad manager? it tells you how bad and dysfunctional the system is and look for a good guy to run it. when you find that good guy, you make companies more productive. you make them much more productive. you say, they have too much overhead and, oh, is it bad to go in and shake the tree, so to speak? but what good does it do to have five guys doing the job one person should do? what good does that do for a society? you become a welfare state. you can't have that. and even the people that work there don't like it because the ceo is out playing golf, mickelson, tell him to talk to these guys. serously. they're all out there playing golf. then we come along. i used to joke. the only way you can get one of these guys off the golf course is to file a 13-d. when i file, suddenly, oh, whoa, get them on the phone, good, grad you called. when you first called, the secretary would say, this is back ten, kenealey 15 years ago, we laughed, icahn, icahn who? just tell them carl icahn is calling. i'd call mooifls myself, i tried to be friendly, do me a favor. he won't be back for a week. just tell him, i'm sure can you disturb him. >> yes, i know. i know how to get him. ten minutes later the phone rings. he's on the phone when i call. okay. because that's the only way you can get these guys literally off the golf course in many cases and i want to make very clear there are very good guys around and i really like -- >> there are mr. ceos you like. >> the other guys i think do a dam good job. there are plenty of them. >> you looked at me kind of funny. >> i didn't hear what you said. >> i said. >> i don't hear too well. you mumble sometimes. >> i said, ha, ha, ha. i said, there are plenty of ceos that you like, right? >> yes. yes. >> i thought it would be funny i thought you said is there aren't any or something like that. there are plenty that i like and think do jood jobs and i respect them. sometimes you meet the ceo, by the way, as we did at cvi, so we had this big fight with cvi. look how well key did there. we talked to the ceo after the fight. i met him, i like him. i think he's a capable guy. in that case i think the board was at fault. we did stuff that he says i could never have gotten this through the board like the mop kind of thing. so there are a lot of different unique situations here. >> i want to talk more about your style of how you personally do things. nelson peltz, your good buddy. you have known him 40 years he said back stage, right? >> i would say definitely i have phone him 40 years. >> yep, on stage, he said of you, carl is a good friend, but we have a different m-o, a very different m-o. i don't like to compare myself to anyone else, but we like to get into big companies with great brands, like pepsi and heinz and get those companies to build those brands the way they should be and that's what we're trying to do, we're trying to build them for the for the long run. we are not trying to make a quick hit over the weekend. >> yeah. >> how do you take that kind of statement? >> i think we could break the sentences up of what he said. i hope he's not saying, because i'll give him a call. we're supposed to have dinner. i'll cancel it. because i'm hoping that what he's saying is he wants to build it up his way but not that we want to do a quick hit over the weekend. i hope he's not saying that. i don't think he meant that. because that's complete nonsense. >> are you not an over the weekend kind of guy? >> over the weekend, i'd like to go somewhere with my wife, you know what i mean. she says i don't travel enough. maybe that's true. i don't think she means i should travel with her, though. >> last spring, you caught a lot of people i think by surprise. you did what many others have been loathed to do and that's criticized warren buffet. you called out buffet for abstaining in his vote or lack thereof in coca-cola against the pay structure. and you wrote an op-ed entitled, "why warren buffet is wrong on coke." it motivated you. >> i made it clear, i respect warren buffet and i like him and i know him and i think he was wrong, definitely wrong in saying that, you know, you don't want to upset -- i don't -- the establishment, so to speak, you know the board should, you know, and he even said, which is sort of amazing that there are plenty of things i voted for that i don't agree with. that's not what the board is supposed to do. even talking about what peltz says, i think the board's job isn't necessarily to micromanage. i'm not going to criticize nelson about the fact that maybe he is so -- and i can't talk about nelson, because i can't know if this is true, i see by his record that some of it might be, that he really is an expert on brands. in that unique situation, i think that's fine. but what a board should be doing is the opposite of what they do and even what an

Related Keywords

China , New York , United States , Hollywood , California , Ohio , Dallas , Texas , New Jersey , Germany , Switzerland , Americans , America , American , Swiss , Liz Ann , Randy Frederick , Keith Fitzgerald , Ali Baba , Andrew Ross Sorkin , Colin Gillis , Tim Cook , John Paulson , Ben Bernanke , Janet Yellen , Chris Christie , Kelly Evans , Benedict Arnold , Josh Lipton , Kate Kelly , Rick Santelli , Warner Fox , Stan Druckenmiller , Tim Seymour , Ian Cook , Jeff Hensarling , Rupert Murdoch , David Garrity , Keith Fitzgerald Janet Yellen , Warren Buffett , Marty Lipton Larry Fink , Jim Cramer , Morgan Brennan , Chris Ressler , John Harwood , Jack Lew , Julia Boorstin , Bob Dole , Nelson Peltz , Jon Najarian , Stanley Druckenmiller , Stephanie Lincoln , Phil Mickelson , Richard Fisher , Abigail Doolittle , Larry Kudlow Cnbc , Pete Acosta , Bob Wright , Las Vegas , Ken Moelis , Marty Lipton , Melissa Lee ,