Transcripts For CNBC Squawk Box 20141230

Biggest annual drop in dollar terms. Industry group api will release its data today. And in global news petro bass could be declared in technical default on some of its foreign debt. Some bondholders want petro bass to speed up its losses in that giant corruption scandal. So a lot going on this morning. Mr. Kernen. It was down yesterday. In the second place. Here it is. In Corporate News the shares of civio today. The small Market Cap Company about to get smaller. The Oil Field Services provider warning the First Quarter and full year revenue numbers will fall well below analyst estimates. The company suspending its dividend and announcing plans to cut its workforce by 45 in the United States and 30 in canada. The ceo blames big cuts in Capital Spending by major oil companies. The first time weve ever led with it, but thats why. Because we are going to be watching. It doesnt matter the size at this point. Well be watching it for any of the ripple effects from whats happened. The crude with some of these companies, which we have heard were going to see some absolutely going to be some that cut back or have leveraged themselves too much and that either change or disappeared. Baker hughes reports the on shore count declined last week. That was the third week of declines. U. S. Oil producers are pulling back amid these lower crude prices, the lowest that weve seen in five years as the nasdaq gets close to the highest levels in 14 years. Obviously, not completely related, but t kind of interesting. The understand decks is now at 5 from its march 2000 high. Check out the leaders. American airlines up 109 . You will be very happy if you own that stock. Electronic arts adding 108 . If you think those are terms to impress, you have not seen anything yet. Since the nasdaq peaked in 2000 been here are the stocks that have gained the most. Monster beverage up 41,000 . Keurig Green Mountain up 34,000 percent. Tractor supply nearly 7,000 and gilead more than 4,200 . But how about the most talked about tech giants . Apple is up more than 2,400 . Microsoft is still 6 below its march 2000 high. Intel, 38 below its best mark that year. Cisco, 58 off of its high. Not sprooi surprised. Huge multiples back then. It was has 50 sometimes earnings. Coffee 38,000 more . Mon sters drinks . At the same time that the nasdaq hit a high there was a greek ship bubble. With technology, cocacola, it was almost a new 50 50. Lets check on the markets this morning. Finally going to get to see my oil board. Futures, down 8 points or so. Once you factor in futures change in fair value. The s p is indicated down three and the nasdaq is indicated down about 3, as well. Were going to have mr. Jeremy siegel on my buddy, mr. 18,000. European markets this morning, kind of ragged. I think as we get close, january 1st or about an back to january 2nd is when the trading begins. We start to see how this is going to play out. You know where people are. Theyre down in st. Barts with actually i dont think that its been a good month. I dont think beyonce no,ite not always a good month. But beyonce and jayz, theyre not there. I saw they were in thailand. A lot of people are, i think. A lot of people go to aspen. Im sure some on your colleagues on your its not a sitcom. What is it . Its a big time drama. Youre wondering what im talking about . Your show on showtime. Theyre doing a pilot. They were doing a pilot. I dont think theyre in okay. Or aspen. Lets see oil, my oil board which i have been begging for all morning long. Youre right. Not down so much though. 53. 29. We have not seen a four yet. Actually, we were talking about the wrong way to use it. We have not seen a four handle yet, have we . No. Yet is the operative word. And there was one put that someone sent in on twitter that i think was a 62 put, sorkin. It was 2 cents and it was bought and it was up to i think, 8. So thats 50 times 8. Is that 4,000 . Yeah. Its gone up 4,000 times. Anyway, lets check out the tenyear. That is one of the Big Questions that we talk about every day. What is coming there . Its just as interesting to talk about the tenyear as it is the stock market. And hes saying more of the same next year. With the fed going up, its going to be weird if they are. If they see the slightest bit of weakness, i think theyll lose their nerve. 121 now on the euro. 119 on the yen. Finally, gold has been hard to get over 1200. Its 1187 this morning. Lets get over to asia. Yeah, we have more on this mornings breaking news. Debris found near the last captioned radar message from that missing airasia jet. Martin joins us this morning with more on that. Martin. Guys good morning. As america wakes up today, there morning, grim and sad news out here in asia where it is night. Just a couple of hours ago, concerned reports, 40 bodies have been recovered from what is now known to be the crash site of airasia 8501. These bodies have now been moved to shore where theyre going to start the process of trying to identify who they are. But undoubtedly, these are part of the 162 passengers and crew members aboard 8501 which went missing a little less than an hour into the flight from surabaya. Now, i say crash site because of this found earlier today, it has been confirmed that stuff is debris and wreckage from the plane. Were talking about luggage, a door, confirmed to be from 8501. The president of indonesia is arriving as we speak, i understand. Theyll be meeting with the obviously distraught relatives and families of the people on board that plane and possibly speaking with the press. This is the first major crisis of his administration. Back to you. Martin, we appreciate that. Thank you. Any of the relatives or family members are waiting for. But remember last time how long there was a question and, obviously, this is not the what we wanted to find out, but there is a resolution, at least, in this case. It was just two full trading days left in 2014. Markets are on track to end the year at near record highs. Were not just talking about the dow in the s p 500. Right now, the small cap russell 2,000, the dow transports and utilities sitting at highs. Joining us now, mark smith and mara harris. Let me start with equities. Maury probably feels bad always being second. Well get your forecast. Hank, 8 to 10 up is that what youre thinking or are you different than the crowd . No. That is what were thinking. And i think the rally in the last two weeks that has seen the dow go up a thousand points has probably stolen a little bit of 2015s returns. That would make sense. Something more modest in the high single digits, thats in line with earnings growth. You dont really need any multiple expansion. I think thats a reasonable expectation and in any event, its going to beat the alternative. Equities still look like the most attractive asset class when you compare it to fixed income and cash. Thats our forecast and were sticking to it. So that will reflect that will reflect, what an 8 to 10 move in earnings and multiples stay the same . Yeah. Look, i think were going to get with a faster gdp growth somewhere in the 3 range where weve been averaging 2 for the previous five years. I think thats going to translate into better s p 500 profits in the mid high single digit level so you dont really need the multiple expansion to get to that high sympathy digit return. You dont think well have multiple expansion . Investors are finding and believing this is a secular bull market. It was only a couple of years ago in which we were arguing whether this was a cyclical rally in a secular bear but no this really is a secular bull market. We still havent seen a construction in 3 1 2 years. The one in october was not a correct. We are going to see some volatility. But just like last year we think any pullbacks are going to be brief and shallow because theres still a lot of money coming in that wants to participate in this market that is previously missed the bull market. What do you mean technically its not . Do you think there is some god that has given moses these targets . There is no god that came down and said 9. 9 is not good enough. It has to be a shaking out sentiment. Im not going to argue with you on that. That was only interday. That could make a difference youre right, because closing is all that matters. Would you be buying multi nationals . And that is the only question on the dollar strength. Over time the dollar plays out and really doesnt affect investments all that much. High quality, dividend paying and dividend growing stocks. You still have the opportunity to get better than bond yields in the equity markets. That is remarkable given that were up 200 off the bottom and, yet, equities still give you that nice yield advantage in many cases throughout all s p sectors. All right, maury. I now want to look to you. I dont know if you sometimes feel like alice down in the rabbit hole. Number one, 5 is that nor real or are we more like 3 . Number two, are you going to see wages start to do a little bit better . Is the 5. 8 actually 5. 8 where people can ask for more money . And then three, what kind of weird world is it where no one is really sure Interest Rates on the tenyear are going to go up even though it seems like things are going better . It is a weird world, is it not . And theres a lot of strange things going on. I think next year probably is a good year for the gdp and real times you have it at 3 . If you add that 2 inflation, you have a 5 nominal gdp growth. Wages are probably going to pick up next year. Weve seen a faster than expected unemployment drop this year. That can happen again in 2015. Wages are going up 2 . I think next year they go up more like 2. 5 heading up to 3 in 2016. On the tenyear i think once the fed starts to tighten, which i think they will start to do in mid year the tenyear yield is going to go up. The bond markets for a variety of reasons hasnt built in the fed tightening. And we think at the end of the year, funds will be up to 1. 38 and probably will have a ten year back up to 3 . I probably would agree with your earlier guest that stock res going to outperform bonds next year. . So is this something you thought for the last several years or i think just about everybody is surprised as how low the tenyear has been. I think its testament to how important the qe was. How important the feds purchases have been. That is i think, the big surprise. Of course, we dont have that qe going forward. We have a bond market that hasnt maze up its mind as to the extent of fed tightening next year. I think as wages pick up we have a pretty good chance of getting up to 3 . I think if we stayed at 2. 2 and were very cautious as far as moving up or even if we went to three because it was forced higher from greater economic news, i think the multiples could stay where they are or expand either way. I agree. It will be a good economy. All sounds too good to be true, though. Thats the other thing. And another 8 to 10 guy, andrew. A lot of you guys. I guess theres two scenarios. Were so volatile but you ept up being right. Or it could be up 20 or down 20. Joe no. Yes. Also to murrays comment that there has been over the past three or four years this expectation that inflation is right around the corner. And it hasnt been. Now with low oil, there is no inflation and thats going to be very good for equities and you might get multiple explanation because of the lack of inflation and low Interest Rates. Thank you. Hank did you just get finished with finals or at haverford or are you on break . Were still on christmas break. All right. Are you with your folks, staying with your parents . Did you get some good stuff under the tree . Santa was very good to me. All right. Thank you. Its very good. Yeah. Are you okay with that . Useless. No. You learn how to think and say was that the aventi or still to come this hour we will 2015 retail says the trends the track and the sector remains. The biggest risk to the markets right now, is it greece russia or the middle east . And later, a cnbc Service Latest installment of our Million Dollar homes game show. Were going to tell you which properties weve got and then let you vote on the winner. First, as we head to a break, here is a look at this day in history. Were right back in just a moment. [ shutter clicks ] hi there [ laughs ] im flo i know im going to get you your rental car. This is so ridiculous. Were going to manage your entire repair process from paperwork to pickup, okay little tiny baby . Your car is ready, and your repairs are guaranteed for as long as you own it. The Progressive Service center a real place, where we really manage your claim from start to finish. Really. Easy as easy can be bye do not adjust your calendar. The worlds most famous ball drop will be tested today. The 12 foot diamond ball will sparkle with almost 2700 Waterford Crystal triangles. The glow is going to come from more than 32,000 l. E. D. Lights and more than a million spectators are literally expected to jam midtown manhattan in the freezing cold in times square. Nowhere else id rather be tomorrow for the new youres eve celebration. At home in the bed watching all this. Maybe not even watching all this. Im trying to think of the other unpleasant things that i really dread that i would prefer over being there, except and you know what the reason . The main reason . I wouldnt be able to watch carsons daleys show on nbc if i was actually down there. There will be some great performances. Usually you dont play along with me. But now that youre kissing up to that was smooth and you didnt have to search for that was really good. Anyway thats why i wouldnt go. Large parts of the country breaking for an arctic blast and ring in the new year. Alex wallace. Alex wallace joins us from the weather channel. Like a long lost friend. We have this other guy usually alex, a very natty dresser. Alex is giving him a run for his money. Alex were not disappointed. Good to see you, as well. Not good news if you dont like the cold though. We have a big arctic high. Blame canada. Most of december multiple experiences of a mild winter. Were going to be talking high temperatures 20 degrees to 40 degrees below average. Temperatures that below average means a lot of single digits. Denver the high for the day, only 2 degrees out there for you. Omaha omaha, 10 degrees. Heading into tomorrow look for that cold air to move down into texas. San angelo 36 degrees is your high. This will work its way across the four corners. Helps to bring up some snow. Potentially could see some snow in and around vegas. Nothing we see too often, right . But there is that potential. Better chances as you head farther off towards the east. Guides, back to you. Thank you alex. Appreciate that. Happy holidays. Happy new year. This week we are looking ahead to the new year giving investors a playbook on how to cash in in 2015 the, so we hope. Courtney reagan lets see how she fared with her picks last year. Courtney prediblthed we would see activist investors in retail. And she was right there. With abercrombie. Very good. Shes smiling right now. Get some take away shot there. Mike jeffries getting pushed out earlier this month. And well say shes half right about mall operatorses and investors take a hit. The lease that own them have seen their shares it seems like a really big disconnect. Courtney predicting more shoppers and retailers will turn to outlet malls for brick and mortar shopping. She was right there again, ding ding ding. So the big question is what is courtney predicting for 2014. Retail saw a lot of changes in 2014. And the headlines wont end when the calendar flips to 2015. Here are three predictions for next year. First, sears stays for now. It wont see a resurgence in 2015 though 2016 could be a different story. Majority shareholder and ceo Eddie Lampert is undertaking various Financial Engineering exercises to squeeze out all the retailers assets while largely neglecting the Retail Business itself. Its not a sustainable wie to run a business but he will come out the biggest financial winner in the end anyway. Second american eeg sxl abercrombie are among the retailers currently looking for new ceos. The more vacancies will crop up throughout the year. Online shopping mobile and fast fashion has changed how we shop. Fresh Retail Strategies and it will continue to be a difficult task. Third, the line of the cmo. As targeted marketing and personalized shopping offers grow and importance those two with the role of the chief marketing officer. Previously a position that was more of an afterthought with secure seats at the head table. Lets bring in courtney now to discuss some of those predictions. I want to go back, if we could, to the previous pictures. Why is mall traffic going down . Sorry. I know. How can mall traffic be going down and the share price going up . Real estate is a very valuable commodity, no matter oftentimes what is being done in the space currently. And that is why i think were seeing in. I actually recently spoke to a conference in new york city with a bunch of deals. They said, look,ite not so bad for us. Which prediction are you most confident in and which are you least confident in . I have to say, so many people have been watching this year and wait for some time. I think it will be around in to 20 15. 2016. What happened to that company . And has is eddie making money off of this . Yes, he is. Hes sort of paying himself. This huge company has given some loans to sears. So we talk about sears as if its a grand failure. To him, its a grand success . Hell probably end up making a decent amount of money on this, and he has along the way, too. Okay. Which prediction are you most confident in . I think the last one. The cmo, the chief marketing officer. Marketing was an after thought. Its all about finding your officer and targeting to her. The best cmo in the business right now . I think the best Marketing Team in general led by the cmo is someone we talk about all the time. Sure. The more involved the ceo, that helps, as well. That guy. Hes also a good manager. Is. Wouldnt want to be him and then did she no. Women want to be with him and men want to be him. Right. You did make a prediction on mc hammer pants. I did make a prediction. Will they stay as popular as they are now in all the different colors . What are they called . The mc hammer pants b. That was from 1989. Theyre back. Oh maybe shes so far joggers . They were two years ago. No no no. This is going to be the hot item of 2015 . Active wear. I thought lululemon was they told me to tease that so long ago. Well talk about that another day. A tease will make you stay glued to the screen. Lets see if this works. Coming up the greek bailout is at risk. Also, theres fighting in libya, which is taking out some oil production. Even though its cold out today. And russia dealing with a major currency crisis. A rapid fire look at the worlds flash points and the biggest risk to the growing markets, next. His predictions for 2015 ron johnson installed as the head of sears. Who . Ron johnson. No who wrote in . Anyway, but first, as we head to break, here is a look at yesterdays good morning and welcome back to squawk box here on cnbc. Im joe kernen along with Andrew Ross Sorkin. Becky will be back on monday. For our penultimate and final day from cnbc global headquarters. And then wednesday were moved to the new squawk headquarters. To the new squawk headquarters. And this can be the ultimate case of wedding crashers two Army Captains had to move their wedding ceremony to weekend so president obama could play golf at that venue. The two had planned their wedding for the 16th green of the marine base on the honolulu on oahu it saw it last night on nightly. But the night before the wedding, they got a call about the president s golf game and the change in plans. The couple had been warned it might happen and the president only learned about it later, that he had caused the wedding to be moved to a nearby location and he called the couple after the ceremony to congratulate them and apologize for the inconvenience. Theyre both in the army and they said are you ready to complain that your bosss bosss bosss boss had to move the wedding . They said no no its fine with us. It worked out because we had a better view from a little bit above the 16th green and the president was very charming. And he was very charming when he called on the phone and said he feels awful. He had no idea that was going to happen. Before he plays golf or goes to a restaurant do you think he asks, by the way, who are we displacing . Because i think i would. They asked him what he shot too, and he said he shot an 84. At first i doubted it but his swing looked pretty good. But you know who used to shoot 84s all the time . Who is that . Bill clinton. Apparently it only took him 105 shots to shoot an 84. Global hot spots are flaring worldwide. In europe growing concerns about another debt crisis with uncertainty hitting a fevering pitch following a divisive pitch for the vote. On monday the s p stock market federal nearly 4 . The Euro Currency hit its low he level against the dollar in more than two years. Joining us now is david gordon president at International Capital strategies. How much of the weakness in the euro now would you ascribe to things happening in greece or in europe rather than just the strength of the dollar, david . I think right now what weve seen over the last couple of days is obviously greece rlthed. But in general, a lot of the weakness in the euro is really about the fact that economic prospects for the United States look much stronger than they do for europe. But right now, it is the greece crisis that is causing the further weakening of the euro up. And at this point, what do you think happens on the 25th in greece and what are the chances now if you can give me a number on a what are the chances on a gregxit . Greece doesnt want to leave the eu but they also want to restructure their public debt. That is going to cause a lot of problems with the europeans, with germany. Germany has been willing to continue to provide bailouts on the basis of the sumg that theyre going to be repaid. So the politics here are really getting tough. This is a tough time for europe. They have three interrelated challenges. The first the greece. The second is frankly how to find Financial Support for ukraine in the context of a continued rush yap assertiveness there. And then the third is conflict over quantitative easing how far to go and a big conflict between the ecb and the bundes bank on steps moving forward and all of this is leading to the rise of tan tie european parties in many many countries in europe. So i think 2015 will be a very tough year for europe. Not just i mean yeah everywhere those parties made significant gains. And here we are again. So what greece really probably needs to do if they still had the drachma, they would just devalue the drachma. Instead, you have these unelected bureaucrats and the austerity could be permanent. You can put a different country in for greece. I dont see how this even works. Well i think the politics of this are really coming apart, that this only worked on the basis of austerity leading to growth and its been way too slow. So you have had the politics coming apart. I think that the chances of the politics here staying together are pretty limited. So we face an election late january and the likely leading party here is going to be the anl tie bailout party. The question is will they have enough of a mandate to rule alone and how will they negotiate . I think were in for several months of really serious unalternativety around greece and that is going to make these other crises hard to handle. Theyre in for a tough time. David, we appreciate it. Thank you. Coming up in just a moment, Economic Predictions for 2015. Our bold calls are next. Then at 1050 eastern time reality check for the new year. Were going to take you notice the nations priciest properties. Plus, at the top of the hour we have Jeremy Siegel who nailed dow 18,000 now get his target for 2015. Were back with all that in just a moment. Thanks. [ male announcer ] fedex® has solutions to enable Global Commerce that can help your company grow steadily and quickly. Great job. mandarin cut it out. See you tomorrow. Coming up the fashions most expensive house or the priciest homes that will give us access if you have more than 1 million to spend. Which one will you buy . We will take you inside and ask you to vote. Were going to do all that when squawk box returns. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. Cnbcs popular milliondollar home competition is back but with a twist this morning. This time around were blowing the roof off the 1 million price range and showing you the most expensive houses we could get into. Go to cnbc. Com vote right now and pick your favorite. Here is the milliondollar matchup. Welcome to your own private oasis. This victorian mansion sits on 11 acres of pristine shoreline and includes a private beach, dock, and salt water pool. Inside enjoy spectacular water views across 7,500 square feet. Five bedrooms, five and a half baths, and three fire places make this is the Perfect Place to relax to the sound of the ocean. Perfect your swing on the private tennis court. Cultivate your green thumb in the gardens and heating greenhouse. Or let creativity wash over you in the third floor artist studio. This seaside escape is yours for 13,750,000. This glamorous penthouse perched on 4,500 square feet offers chic city living from a distance. 30 floors up. Two terraces offer panoramic views as do all four bedrooms. Rise above it all in the spalike master bath one of four with a soaking tub and steam shower. The walkin master closet is big enough to satisfy any clothes horse. And speaking of designer the apartment has custom finishes throughout. A european style kitchen comes stocked with state of the art appliances and, of course those skyhigh views. Chic city living for 5,025,000. Okay. So the question of the morning, which house is the better bang for your buck . Waterside wonder or sky high luxe . You can vote right now on cnbc. Com vote. Lets bring in real estate super broker dolly. First of all, tell us where the homes are loeked. The waterside wonder is in connecticut which is close to the border of rhode island. Its connecticut rhode island. And the wonderful urban home is in philadelphia. Central philadelphia. Okay. I got confused. I thought we were comparing milliondollar homes again. A little millionplus. I saw that first one and i was like where is this, love canal canal . Where would you get a milliondollar house like that . It was not love canal. But its a great home. So its 13 million. 13 million versus 5 million. Weve got to get the value. In philly near comcast. Right. We could be neighbors with the roberts family. In a great city. I guess its because i thought the first was a Million Dollars and i really wanted it for a Million Dollars. We could talk to them. Theres a negotiation process. Make them an offer. They dont make a lot. Not going to be around for much longer either. Thats where you were going, wasnt it . Yeah. Swallowed up. Couldnt you be almost anywhere . Couldnt you be anywhere in the United States or anywhere else . Where if youre in philly youre in this wonderful central, urban place. Whats the commute, though, from a new york city . Its long. Its a real compound out of the city. Is it two or three hour trek . Exactly. So it sounds like you are signaling that philly is the better buy. Phillys not new york though. But its a great city. I know it is. But its different. Right . It has a lot to offer. What would that place run in new york . Probably 50 million. It rents for 20,000 a month. Thats a big number. And the whole house only rents for 30,000 a month. And its 76,000 in taxes. 76. What are the monthlies on the apartment . Its very low. Its like 500 a month. 500 a month. Yes. Because the taxes are abated. The waterside wonder has look how beautiful it is. Visually its wow. Drool. It is locked in that our viewers would like the water wonder. They think thats the better value. I knew it. Visually. The superstar here. Its visually impossible to beat. That house is spectacular. But youre saying our viewers are wrong in this particular instance. If theyre putting up their dollars, they might think differently. Theyre voting visually. From a value perspective. Yes. It would definitely be right for a Million Dollars. In love canal. Dolly is going to be back with the next matchup. Later shes going to crown the winner during closing bell. The winner in this case is the voters winner. The voters winner. Im just ushering them through. Coming up he was the first to call dow 18,000. You heard it here first. Now Jeremy Siegel is back and has a new market target for 2015. Were going to talk to him. Hes todays guest host. And also about 106 and theyre not going to huh . Seriously . Theyre not in the playoffs . That is a heart breaker. Well be right back. Breaking news this morning. Debris and bodies found in the search for the missing airasia jet. Well have a report from the region. The nasdaq now a mere 5 from its march 2000 high. And some of the biggest winners in the runback might surprise you. Plus brace yourself. A frigid new years eve could be coming. The plains in subzero freeze and an arctic blast is heading south. Snow packed roads and major air problems are close behind for holiday travelers as the second hour of squawk box begins right now. Welcome back to squawk box right here on cnbc first in business worldwide. Becky is enjoying the day off. Our guest host this morning, squawk market master Jeremy Siegel, professor at wharton and a guy thats gotten it right. There were skeptics and doubters and he got that dow number closer and better than anybody else. But before we talk to jeremy this morning, we do have breaking news at this hour. Airasia now confirming that debris found earlier this morning is from its missing plain. Martin soong joins us from the Singapore Airport with more on that story. Martin . Andrew good morning. Hello. And good morning folks. Youre right. Airasia just out with a statement minutes ago confirming what we already know. That the objects found earlier today are search and rescue teams parts of panels and luggage from airasia flight 8501. This is something indonesia authorities told us several hours ago. What were in now is the recovery phase of this operation. We understand there are reports that hospitals in indonesia are getting ready to identify the bodies that have been recovered. Remember, there have been confirmed reports that 40 bodies have been pulled from the ocean, transferred onto ships, and onto shore. Now hospitals are getting ready to identify them which means the relatives, the families of these 162 passengers and crew on board are going to have to get very directly involved. And this is probably the grimmest part of this operation. Were also listening for the indonesian president who we understand has arrived at the search and Operation Headquarters on shore near this crash site in the ocean between surabaya and singapore where we are. And the press conference is already underway at the search and rescue headquarters as we understand it. Theyre saying the recovery operations will continue into tonight. Tonight asia time as long as conditions permit. One thing we have to remember is not just the weather, but also whats going on in the sea there. In the recovery area. There are waves that are expected to be as high as seven to ten feet which could pose a bit of a challenge to Recovery Efforts. One of the things theyre going to be trying to do is to pull out from the ocean the biggest chunk or part of the aircraft. The air bus 8320. The good news is where the crash site is the water is not relatively too deep. The authorities are also saying at this press conference that as far as they know from evidence to date there are no survivors from 8501. So this is important to note because this has been one of the Big Questions dangling out there. And finally, again, the thing watching out for tonight if the recovery operations continue theyre going to try to pull the biggest chunk out from below the ocean. Back to you. Martin soong in singapore, thank you for that. And thank you for your reporting. We know youve been working around the clock on this story. We appreciate it. Making headlines this hour prices of oil hitting multiyear lows once again. West texas and brent crude touching their lowest levels since mid2009. Ongoing concerns about a lot of things. Oversupply and demand. Economic reports are due this morning. The case shiller home price index showing a 4. 7 year over year increase. And expected to register a sizable jump for december. U. S. Investigators are said to believe that north korea hired hackers from outside the country to help with the cyber attack against sony. Reuters reports that those investigators dont believe that the country had the capability to pull off such an attack on its own. I dont know if you saw, there was another report that suggested north korea had nothing to do with it and actually it was insiders former employees at sony who had done it. This coming from one of those companies that had been doing some of its own investigating surprised the fbi were surprised that suggested it was north korea. I think theres going to be a big debate. When the government says or the fbi says that it appears to have been north korea, we believe it. We couldnt even imagine that they would say that without and they said they he did finade didad had definitive proof. That would be perfect if someone had a grudge against sony. Some disgruntled employee. Seriously . This is like a novel if that really happened that way. We will see as that story continues. Meantime, lets talk about nasdaq. The nasdaq less than 5 from its alltime high set back in march of 2000. Dominic chu here this morning to take a look. Strange trip in some of the names from back in the day that have posted massive returns. It was march 10th of 2000 and that intraday high was 5132 on the nasdaq composite. On an intraday were getting close. You can check off all these other indices. But theyre still getting there right now. If you look at some of the winners since march 10th of 2000, some of the big names here, of course, are ones that we focus on a lot. Amazon and apple, two of the better performers. The two best performers since march 10th of 2000 have been Monster Energy and keurig Green Mountain. Look at some of these returns over here. Monster beverage the best performing stock on the nasdaq. Up about 41,000 . This is 111 stock right now. Back then it was around 27 cents per share. Keurig Green Mountain it was a 40 cent stock. And of course apping and amazon are two names we talk about often. How much theyve gone up. Apple very respectable. 2500 return since then. And amazon has done okay. It survived the d. O. T. Com bubble and is up 370 . There are some large name Tech Companies that are v not recovered here. Think of yahoo intel, and cisco. At one point intel and cisco and maybe microsoft were considered the backbone of technology. Take a look at these performers. Intel still away from its highs it reached in the peak. Yahoo not the search giant it was back then. Down about 43 since its alltime high. And cisco has got about 58 to go. A lot of these names are names weve known for so many years and we thought were going to be big performers with but now they have not performed quite as well as some of the Smaller Companies have back in the day. Back over to you. Are you going to do this report again . I may or may not do this report again. I might change up the stocks. There are other great stocks in here. Dom called apples 2500 return respectable. And then for amazon he called 450 well okay. This is in 14 years. 15 years, right. So going up six times in value or five times in value in 15 is unheard of. And the 2500 , youre talking about the most valuable company on the planet. The first two, i dont know what those are. Keurig and the other one. Remember we were all saying cisco was going to be the first trilliondollar stock. 600 billion, the first trilliondollar stock. It took a wrong turn. Anyway, i dont like those words. Respectable, dom. I think you need maybe a more accurate word. And i dont like okay for 500 . Maybe throw ge in there. If amazons done okay how has ge done. We should talk about ge. Theyre one of those companies that has not performed as well. Not performed as well. Im trying down to 25. And the other one is up six times in value. A lot of you guys ive only been here for a short amount of time. But a lot of you guys i know worked for that company back in the day. This used to be owned by General Electric and a lot of people in our building here have a lot of exposure to that stock. So see what happens. Yes. Okay. Thanks, dom. Our guest host for the next two hours is squawk market master Jeremy Siegel. Hes used to 2500 returns in 15 years because hes a professor at wharton. He told our viewers this time last year that the dow would hit 18,000 in 2014. And despite a nerveracking slide earlier this month, yeah. It scared us. I think it scared us because it was in combination with ebola. Yeah. And even the Airline Stocks with oil being weak even the stocks took a 20 hit. The entertainment stocks. Disney, anyone. No travel. Thats devastating. Thats right. And professor siegel joins us now. And okay. That was good. To stick with 18,000 the entire time. Against a lot of skeptics and people who called you apermable. All the same. Journalists that work for the greatest News Organization or whatever, they think thats their job. Alan ableson thought it was his place to question everything for 30 years and steer people out of the market for 30 years. God rest his soul. Yes. The doom and gloomers always seem and theyre always smarter. Theyre always smarter. They dont eye the conventional with the rose colored glasses. Theyre always smarter and worse at managing money. They seem to always sell even if theyre wrong, they always sell. A professional skeptic. Yes. There is. Obviously youre sitting here. No. But what about next year . I mean if you were to give us a round number what would it be . 20. Would it . 20 could happen. Of course anything could happen. What is that ten . Thats only 10 . 20 you seem a little wishy washy. It gets hard. The last three, four years, i felt this was easy. It was a slam dunk. Market was so undervalued with the Interest Rate so low and earnings momentum going up. Earnings momentum is still going up but we are close tore fair market value. Were not there yet though. One of the reasons is i think interest race rates are going to be permanently lower not lower than now. But what the fed even thinks is going to be the wrong Interest Rate going forward. I think well see fed long run and maybe 2 instead of 4 . That lower Interest Rate i think is going to continue to feed people to move into stocks. It is all about its not just the absolute value. Relative. Its the way things are moving, obviously. Yes. But you could actually make the case that as rates came down in the 80s and 90s if six and five on the way down warranted 25 times earnings then as were going up i understand its the opposite direction. But if we were to stop at three our four why is that 15 times earnings . Why is that not 25 on the way up . Exactly. If the bond market doesnt give you anything at 3 or 4 why wouldnt stocks still be worth 20 times earnings . Fixed income still the Worlds Largest asset class. Fast its what you have to compare everything to. If Interest Rates are going to be permanent lower than what were used to you add in why rates are going up. Add that fact in as well because things are better. Going to get better yes. And gdp might get better. An interesting statistic we were talking back in 2000. Do you know that the s p in real terms in other words corrected for inflation is still not where it was 15 years ago. Still has not gotten back to where it was after inflation. People say its crazy high and back to where it was, were not there at all. For those of us that live through the early 80s and were awake not in like grade school or something. When you saw the market trade up to 1980 we never thought i remember even guys at mir ril lynch, bob farrell, he was like this guru. We got from 800 to like 1050 or something and it was like its up 30 . And then every thousand points a thousand 2,000, 3,000, 4,000, 5,000. It was just unbelievable to watch over 20 years. So if it were to happen again and im not saying it will but to go from 18,000 to 20,000 is different from going from athousand to 9,000. Whats interesting, we are going to sell the same multiple of earnings today as we did in 2000 we would be at dow 36,000. Do you remember that book . Yeah. I remember the guy because hes a guy with a famous name. Some other guy has his name too. Glassman. Same name. That was an economist. Yeah. Very confusing. But they were different people. All right. Well have more with professor siegel. Hes going to be sticking around. When we come back were going to talk about our raelz playbook for the new year. Higher Mortgage Rates around the corner . Weve got the answer. Then a focus on financials. Why some banks are still worried theres another regulatory shoe to drop. And later, tis the season for college bowls and the coaching carousel. Were going to talk big money, football and more with a squawk sports favorite. Squawk box returns in a moment. The evolution of luxury continues. The next generation 2015 escalade. Welcome back to squawk box this morning. This week were looking forward to the new year giving investors a playbook on how to cash in on 2015. Diana olick will lay out her picks but first lets look at her picks from this year. She predicted home prices will continue to rise by gains will ease. And she was right there. Diana also said that Mortgage Rates would rise and in that case no dice there. And then diana also predicted that rents would rise this year and there she was dead on with the continued Strong Demand for rentals helping to set record pricing highs in some metro markets. So what is she predicting for 2015 . Heres a look. The housing recovery took a step backwards in 2014 as home prices rose too far too fast. And incomes couldnt keep up. Now as employment improves and price gains ease 2015 is looking brighter. But perhaps even bumpier as buyers run head on into rising rates. Here are three predictions. There will be more houses. There have to be. As household formation improves the builders are looking at more developed lots and a better labor market. Im going with a little cooling on all that rental apartment construction. Mortgage rates have nowhere to go but up. We predicted rates would rise this year and we were wrong. But with the fed pulling away from mortgage buying and an improving u. S. Economy, Interest Rates have to break out of the current lows. Home prices have to cool off. Sticker shock sank the market in 2014. Home prices have jumped double digits and payback was a well, it wasnt good. Slower sales and more inventory of existing homes added to all those new homes im predicting with keep price gains tight. We could even see a few months in the negative. But for the year a gain nationally of, im saying 2 to 3 . Here to dig into the home front is michelle meyer. She is bank of americas Merrill Lynchs u. S. Economist. You agree with any of these predictions . All of them . You disagree . I broadly agree with them. I think its right it will continue to cool. I think it will remain positive. The areas weve seen most of the cooling this year were those that had the fastest appreciation at the begin og the recovery. So parts of california went from 20 plus year over year appreciation to 10 or a bit less. Housing construction i also think there is further upside. Its a bumpy path higher. She said 740,000 new starts. It might be a little high in my opinion. I think household formation is the key factor. Its been gradually coming higher. What about in the rent versus buy . She said she thought the rental market would cool or at least there wouldnt be more construction. I think well see more multifamily construction. As household formation will recover, it will be favorable for the rental market. Think about where Credit Conditions are. Its still very tight. Think about the lags from people entering the labor market. So i actually think that could be maybe Single Family could peak in the next few years. And multifamily i think you can get up to 500,000 or so. So switch around. I want your view on this one too. Interest rates and what it does to mortgages. Its not just the Interest Rate. Its on Credit Availability and how strict they are with the standards of giving the mortgages. Were still echoing with what happened with ben bernanke getting rejected for a mortgage. This is crazy. Its not just the rates. They are so tight. Now, theres a lot of pressure to loosen that. I think thats going to have an important contribution to the market as anything thats going to go on for rates. Yeah, well see a few ticks higher on rates. But if theyre not quite so strict, i think we still have a very good Housing Market in 2015. I absolutely agree with that. I think its not only a function of how expensive is it to purchase a property. Home price is a factor. But its can they purchase. Do they have access to credit. And your prediction . I think 5 is probably a bit high. Id say below that. Okay. Were going to leave it there. Happy holidays. Thank you for coming in. Appreciate it. Coming up breaking up is hard to do or so you thought. Analyst calls on the tech company that could consider spinoffs coming in the new year. Next. Stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Coming up when we return, call it the year of the spinoff. Seeing big news on the topic from hp to ebay just two wellknown examples. And analysts now saying next year will see more of the same. Plus what the biggest financial names are what theyre banking on in 2015. Well give you a hint. Think regulation. Squawk box returns with that and a lot more in just a moment. Welcome back to squawk box. If you could hear what goes on during the commercial breaks. Lets tell you the headlines this morning. Airasia has confirmed debris off the coast of borneo is that of their missing flight. Also publisher conde nast has won a lawsuit. Thousands of interns claimed company had underpaid them. Theyre going to get payments now of 700 each. And japan to boost the economy and Overall Economic growth the rate will be cut by 2. 5 Percentage Points and then to 31. 3 the following year. The first person diagnosed with ebola in britain has arrived in london to a hospital. The woman contracted the disease while working with the charity save the children in west africa. She flew late on sunday and was diagnosed with ebola on monday. The minimum wage is set to rise in 21 states this week. The state hikes will increase the hourly wages of 2. 4 million workers to an average of 8 an hour. Early next year 29 states will now have minimum wages higher than the federal governments. Breaking up is hard to do. At least thats what the song says. But had the tech world spinning off and going it alone was all the rage this year. Can investors expect this in the new year . Josh lipton joins us from san jose. You do it on your smartphone the horrific alarm thing . What time is it . Oh boy. Its very early, joe. You dont do its not smartphones. Its just two basic old school alarms. But tough have two. Thats the trick. You need two . Im sure you do. Thanks for doing it for us. Whats up . Splits and spinoffs that was the big tech theme in 2014. Analysts say that is going to remain one in e the new year. Hewlettpackard, ebay, symantec all in 2014. So where will the splitoffs be in 2015 . Heres the things. Oracle could make big news. Comes from software and service. While hardware is a drag that could be sold. So who is a potential suitor . If i had to put a name out there, id probably put adel out there who currently doesnt have what i call the highest end of hardware that is out there that actually runs complete systems like oracle has out there. But i think it could be a segue for intel to get into that market. Oracle said revenue in its Hardware Division rose just slightly to 1. 3. Billion. Another potential spinout in 2015 amazon web services. Amazon doesnt break down the performance of its Cloud Service but its estimated that losses in that business are growing which is impacting the companys bottom line. Moorhead says it is a distraction that should be spun out and sold. A potential buyer there, hewlettpackard which is in the biss of building a Cloud Services business. Back to you. All right, josh. Thank you. We appreciate that. And you need to take a nap or something. Power nap. Power nap. In fact right now might be a good time for it. [ laughter ] just kidding. Thanks, josh. Andrew . From tech to banking, the industry was granted a couple of regulatory passes at years end. And a twoyear extension for banks in hedge fund holdings. So whats ahead for the regulatory . Mary tompkins joins us. And this is going to be exciting. Im sorry about that. Im sorry. Eye opening. Shes got so much energy. Come on. Well, she should. Of course. You should. Because in your case its a team that shouldnt be in the post season and in your case its a team that should be in the post season. Hes an eagle fan. Can you believe that . 106 . Yeah. Listen im actually i would not put them in a bowl either. Sorry. Go ahead. Love my alma mater but that was a sad season. I was happy at the game with michigan. Yeah. I was at that game. It was a lot of fun. It was so close. And the quarterback golson looked like he things fell apart. Sorry. Theres always next year. Jeremys saying that too. All right. So backtoback regulations. To find out whats ahead for 2015 we spoke with dan ryan who is chairman of regulatory practice. The first thing we asked him, if the soon to be installed Republican Congress tried to roll back more of doddfrank. I think youll see some peel back on doddfrank and some unity would be around maybe raising the requirement about whats a systemically Important Bank in the u. S. 90 of the legislation has been written. In the new year new rules to watch for is additional buffers for globally systemic banks. Exposure to other banks and longterm debt requirement for big banks. Ryan believes all this rule making has made big banks safer. Though potentially less attractive investments. The real issue would be what is that going to mean for bank investors. Is it one that has to hold 30 of cash and reserve. Which of course begs the question but a number of people have been asking will the regulators force big banks to break up. I think the regulars wont require them to break up. I think the question is going to be to put money into the banks. Given the fact theyve got to hold so much liquidity and reserve. And their valuation could be impacted. More on my interview with ryan you could read that at cnbc. Com. Did you fall asleep . No, no. It was good. I was thinking of rogoff yesterday. First i thinking about the word used to be we dont know longterm what doddfrank is going to do. They were only done with 20 of it. The second thing was rogoff yesterday said nothings changed. The moral hazard thick with moral hazard and they need to make banks equity based, not debt based or its always going to be a problem. I hear the name Elizabeth Warren not mentioned in all of this . If you go to cnbc. Com, i did ask him who are the people in congress to watch. And he said naturally she is the one to watch. Shes probably going to have a bigger bigger she is credible to a number of people. She has an agenda with the banks. And shes a potential candidate. So the drum beat on breaking up the banks. She made that comment b on the floor of the Senate Earlier this year. Got a lot of attention when you took aim at citigroup. Youll hear a lot of its too big to fail and we havent solved that problem yet. But you were going to Say Something . Well to paraphrase the song i think breaking up is bad to do. You know or on an international basis, all the firms want a big name. Youre going to go to other firms. Banks hold 3 trillion of reserves now. You know with with the qe thats a cushion like weve never had before. I think theres a lot of overwriting on doddfrank that needs to be scaled back. What would you do first . Yes, equity layers. And part of it could be the reserves we now have there. Are you a believer that the firms are still, quote, unquote, too big to fail . Meaning if a jpmorgan or wells were to run into trouble, do you believe the mechanism thats been created through doddfrank to ultimately wind down an institution would work and there would be enough confidence that it would work that the government wouldnt have to step in to do something more drastic . What you want to do is provide enough equity or people that are going to be hurt if the bank overlevers. And then once you do that theres no incentive to overlever it. There are trillions of dollars that will be there. Thats the whole question. Once you have enough of that equity cushion there, i think it takes care of itself. Its part of the government to step in for almost everyone to snep at a crisis. So in some sense youre never going to have a system thats totally going to be privately secure. Well, were not dissuading senator warren from running in any way. If she doesnt get the nomination, i think she should run as an independent. I think we need warren for president campaign. I do. Those viewers who dont appreciate the sarcasm dripping theres no sarcasm. No. Im sincere. Can use your position here. I sincerely want her to run. I do. Counterbalance. Hes hoping this will just like your youre spearheading ted cruzs campaign. We just had a final counting of the t. A. R. P. And the bailouts and we know the Financial System not General Motors but the Financial System paid back more than than we put in. Go back 15 years ago, 20 years ago, savings and loan crisis. Lost half a trillion dollars. And then no one says anything. Hey, what was wrong then . You remember Eliot Spitzer . You can make a career trashing the financial sector. You will vault to the forefront of the left by doing this. Its as obvious as that to me at this point. There are always going to be people that hate the bankers. It did not cost us money was it kill the lawyers . Who was kill the bankers . That was Andrew Jackson . That was one of them. Right, andrew . Kill the bankers . Yeah. Anyway, thank you, mary. Youre going to watch anyway . Its at 3 00 ill be working, joe. All right. Coming up is golson still no, hes going to start malik malik. Golson is expected to see playing time. Have you watched . Okay. I have someone to talk sports to. Coming up, some big movers including one in the oil field sector. And then fallout from the nfls black monday. Four coaches, two general managers are out just one day after the end of the regular season. Oh, boy. Dave briggs is here to break it down. Were waiting for him just to see what hes wearing. And it took lebron james just 30 years to amass 72 million. I think thats wrong. I think he made 72 million in a year. I think his net worth is more than that. Were going to look at that in business ahead. Squawk box will be right back. Oh, i love game night. Ooh, its a house and a car so far, youre horrible at this, flo. Yeah, no talent for drawing, flo. House car oh, raise the roof no one . Remember when we used to raise the roof, diane . Oh, quiet, richard im trying to make sense of flos terrible drawing. Ill draw the pants off that thing. Oh, oh, hats on hamburgers dancing drivein Movie Theater home and auto. Lamp squares. Stupid, dumb. Lines. [ alarm rings ] no home and auto bundle from progressive. Saves you money. Yay, game night, so much fun. So ally bank really has no hidden fees on savings accounts . Thats right. Its just that im worried about you know hidden things. Ok, whys that . No hidden fees from the bank where no branches equals great rates. Lets take a look at some stocks to watch this morning. Small cap civeo warning its First Quarter and full revenue number wills fall well below. The provider also suspending its dividend and announcing plans to cut it workforce by 30 in canada. Civeo blames caps in oil spending. And American Realty capital is a new target of core vex management. Core vex believes that American Realty shares are undervalued and expects to have strategy discussions with management. And watch the shares of tesla. They could get a boost from news that china plans to extend sales subsidies on electric and fuel vehicles out in 2020. Those subsidies had been scheduled to expire at the end of next year. Did you see that sports car tesla . It goes 400 miles on a charge. You could go l. A. To San Francisco on charge. You get one of those . No. I saw it. I need a back seat. I do. I have to put the seat up and everything. But if we have to we can do that. I dont think this one has a back seat. But teslas are really fast. Really fast. But now did you see the latest . Electric cars are not that clean. The gasoline seems to bes a clean overall because of the power grid. Because of how its well theres always been a question of where it starts and where it ends. Coming up next the faithful in ann arbor singing hail to the victors this morning. The big money details and the ripple effects. Jim harbaugh heading back to michigan. After the break i dont want to screw up your stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Location. Location. shouting location. Heres the location that matters the most. Here. Or here. Or here. Its wherever this is. To get customers to come here and stay here, youre going to need an app that connects to all your systems. So they can bank, shop do what they need to do, and you gotta do it fast. Before the competition does. Its tough out here; you better be on the right cloud. Today theres a new way to work. And its made with ibm. According to sports scan info nike saw a single style of air jordan sales during a threehour period. It is the air jordan legend blue. Reportedly sold 342,000 pairs at an average price of 379 and additional 337,000 pairs in kid sizes averaging about 142 a pair. Those are cool shoes. I used to have some jordans. Those are boring. Theyre all white. They look like nurses shoes. Who are you . Im dave briggs here. College bowl season is in full season. That means here comes the swag. Is that your name . Swaggy d. Thats good for a rapper. This years bowl participants are expected to rake in nearly 5. 5 million, an 11 increase over the previous year. The amount michigan is shelling out to bring former wolverine jim harbaugh back to coach as alma mater. Here to talk about all Things College football also black monday in the nfl, so many things, dave briggs. Anchor with nbc sports. Okay. I confess. I was watching texas a m West Virginia yesterday. I could care less who wins but i needed it. I needed something. And thats what the bowl games the attendance is down six straight years. No ones showing up to watch these things. But more than a million and a half people are watching every bowl game. The business is still booming. Nop one wants to go in person. But you mentioned the bowl swag. Bowl swag is up as you said 11 . Theres good stuff. Guys cant get paid yet to play football, but they get paid essentially to go to a bowl game. They can get 550 in merchandise from the bowl committee. 400 from their school. 400 from the conference as well. What do they get . They get stuff like underarmour gear and fat heads. I thought who has the bigger head than you, joe . So i brought custom fat heads. I like that. Those go to all the quick lane bowl participants. Thank you very much. Youre going to be becky today. Im sorry. I thought becky would be here. But they get great stuff. A nice little perk for guys. 38 bowl giems. Thats a record this year. Plus the National Title record. I think that those games because of the playoff way theyre doing it i think theyre going to do well. Are they not . Televisionwise. Is it going to be down in some respect . Well look. These bcs games, if you will. The playoff games, through the roof. Were talking about arent those two great matchups . Perfect matchups. Giant programs. National followings. Probably Record Television ratings. Youve got alabama ohio state. Youve got two heisman quarterbacks against each other. Has that ever happened before . That has happened before but not in a long long time. We have had two heisman players in a bowl game. But not to this sense. But its going to be a tremendous College Football playoff. I took friday off because of that. Because of the later game. Im sick of the tide rolling. I like them and respect them and like saban and Everything Else but ive had enough. Im ready for something else. We did see auburn that was sweet. You wont see ohio state beat alabama. Why are they going to play the game then briggs . Its my thing. How many points are you giving me . Ill give you eight. 38. Fine. A whopping eight points. What else were we talking about . Lebrons 30th birthday today. He makes more money in a year his net worth is reported at 72 million which is hard to fathom. No. No. This guy made 450 million over his career in endorsements and salary. Thats wrong. He made 49 million alone last year. So hes made 450 million. Yes. Its also tiger woods birthday. If it were your taxes that you liked, he would be down to that. How much money does the guy spend . I dont know. Youre the numbers guy. Can you get it down to 72 million . Its also tigers birthday. 39. Thats an interesting story this year for tiger. Although it didnt look good in the tournament he played. It did not. He was about 30 stroke it is back. But he likes how long he was hitting the ball. But, look. Hes a mess on the short game. We were talking about jim harbaugh. I mean i think College Football if you can get paid more than in the pros why not go back to your alma mater and live in ann arbor . If youre jim harbaugh and you ruffled feathers with the general manager in San Francisco and couldnt get along, how are you going to go back to the College System and deal with booster, athletic director, School President academic standards. There are ways he can. 48 million over six years is a lot of money. Then we had black monday too. Suddenly mark sanchez is a great quarterback. Maybe there was something to the rex ryan not getting as much as they could out of the players. Maybe they needed to go. That last game i was thinking maybe they should let him stay. When you see smith go for three touchdowns. The defensive line looking crazy. Hes got a foot fetish and a tattoo. Theres a lot of things to like about this guy. Well there is a lot to like with the foot fetish. But 1220 over the last two years. They hired a general manager who was a cap guy. We have to go. We never have enough time. Do not show his socks. Theres a curse word on his socks. Wow. Thanks dave. Will wall street keep dancing to pitbull in the new year . Weve got the low down after the break. Air disaster. Searchers have found wreckage from the airasia plane that lost control with air Traffic Control on sunday. Were going to bring you a live update from singapore. Crude rude. Surprise oil falling to the lowest level in more than five years. Well tell you what it means for American Drillers and investors. So called sin stocks can be profitable for investors, but will they take a hit as people make new years resolutions . The third hour of squawk box begins right now. Welcome back to squawk box here on cnbc first in business worldwide. Im joe kernen along with Andrew Ross Sorkin. And this still doesnt do him justice. In terms of the real size of his head given all of the things that at a young age that youve accomplished. You mean its getting bigger . No i think that is to scale. And you try to pop it. Becky quick is off. No. Search and rescue. This is the unfortunate development that happened before the journal went to press. The journal at this point still they hadnt found it. But rescue workers have found the debris from that missing airliner because there are bodies weve heard as many as 40 bodice off the coast of Borneo Island from the airasia plane that went missing on sunday. Martin soong joins us now. I hesitate to say it. You really cant say that at least i found it because for the families there was still hope that it would be a better outcome. But you just think of the one thats still missing and theres a resolution but not the one anyone wanted. Indeed. Youre absolutely right. The latest we have is this. The Recovery Efforts to get to the bodies and also the wreckage of airasia flight 8501. They hit a hitch. Its down to weather. Bad weather. Theyre dealing with waves of up to seven to ten feet so theyve temporarily stopped recovery operations. But search and rescue Authorities Say they will continue or resume when the waves and also the tides in the water permit. And remember its nighttime out here in asia and in the search area. So even though the waters where the bodies and also the wreckage are located, its pretty shallow, the waves are posing to be a bit of a challenge. So were waiting to see what happens and whether the weather improves and allows them to continue doing what theyre supposed to do. Earlier today, in fact about an hour ago we had indonesias president at the search and rescue center the Crisis Management center which is onshore very near the crash site which is in the ocean about halfway between surabaya and singapore. He met with the obviously very distraught Families Together with the airasia chief. He said indonesias prior to right now is to recover the bodies of the 162 passengers and crew on board airasia 8501. So we just hope and pray that the weather improves. Theyre going to be able to continue this recovery effort. At this stage theres also some discrepancy over the number of bodies that have been recovered. We told you earlier on this morning your time that the Indonesian Navy had said 40 bodies had been recovered. Now, the indonesian search and rescue agency which is the coordinating body says thats not true. Only three. We can only confirm that three bodies have been recovered. So why the wide discrepancy . We dont know. But were going with the number three right now just to be conservative and safe. Youll have to appreciate that in a situation and a crisis like this, a disaster like this theres bound to be at least a little bit of confusion. So the president also extending his deepest condolences, his sympathies and prayers to the families of the 162 passengers and family on board. Also thanking all the nations that have helped in this earth. Remember, this is a multinational effort now involving Nine Countries including the u. S. Which is sending a destroyer to the scene with two sea hawk helicopters on board to see what they are do to help as the operation continues. Thanks for that clarification, martin soong. There is a big difference. It doesnt they talk about the fog of war. Not necessarily war. Why didnt the black box work . Thats a big question. Theyve retrofit a lot of their planes but not this one. This one hadnt been and then do you know why we dont have gps on every plane . Yes. Historically the airlines thought it was cost prohibitive to stream information from the black boxes. Always questions among pilots about whether they would want everything recorded and streamed in its entirety. Why . Theres always been a view that you know you want that last hour or half hour before perhaps an accident but, you know, the everyday conversations that the pilots have. Ultimately what you want if youre trying to do this properly is you want the entire conversation and all the information from the plane streamed live. But just get the gps to work continuously. Were in the car and see it all the time. Rain or shine. Lets tell you about some of the other stories were watching this morning. Oil shock being perhaps the biggest. The price of oil hitting major lows once again this morning. Both west texas and brent crude touching their lowest level since may of 2009. Also more news from the energy world. The u. S. Onshore drilling rig count fell by 37 last yeek. Thats the Third Straight week of declines. And new york congressman Michael Grimm has decided to resign. The decision comes less than a week after the republican pled guilty on a felony tax evasion charge. Admitted to underreporting receipts from a restaurant he ran. Employing undocumented immigrants. Didnt we have him on this program . Uhhuh. Bigtime conservative. Said all the right things. And he said he was going to stay in his role. Tough probably. Now onto the markets. The nasdaq now 5 away from its record high. Been awhile. The s p on pace for eight quarters of con sebsecutive gains. Can the markets channel pitbull . If youre wondering why were playing that. Dont stop the party. Here to look ahead is janneys chief investment strategist and our guest host Jeremy Siegel. And you specifically requested pitbull, mark . Is that your idea . Im not sure where to come up with pitbull. It was andrew who said will they keep dancing in 2015 . And my mind circled to gene kelly. Either way, an aspect to 2015 is one thats going to be upbeat in nature. I think 2015 will again build on the gains of 2014 which obviously built on 2013 spectacular lift in equity prices. Although i do think youre going to have to have happy feet because the market is going to be more volatile as it attempts to digest a lot of the cross currents that Market Participants will be facing next year. Hopefully gene kelly and not andrew in terms of dancing, right . That was a bad time to keep dancing. So eight to ten. I really get nervous that everybody what is that you eight to ten . Seriously . We fall into probably that five to seven range, but eight to ten isnt all that far off. I worry a little bit that we like you had mentioned fall into this consensus range of call it even 5 to 10 . Likely the market is going to be up 20 or down 20 given the fact the market will try to do what it can to confuse the most people. I worry a little bit about that. Oftentimes the consensus is right. We had a consensus view on equity prices that wed be up against double digits. Thats been surpassed a little bit. But directionally we fallen in a widely held view that equity prices were going to build on 2013s gains handsomely and they have. These are all great fundamental reasons to stay on. Jeremy jeremy, it just makes me think. We talked about how great youve been at staying long and then the market we also talk about that went from 800 to 18,000. Its been good to be long. And so the fundamentals have warranted that. How does a fundamental guy ever know that if you just use fundamentals youre not going to know when we reach the top. Well you never know all. 2000 was pretty easy to figure out even though all the euphoria about tech a lot of people said this is a new world. But not in 2008. 2008 valuations were not unreasonable. And i looked at it and technically you wouldnt have known either. What you had to see was the overextension in these products. And if they went down the system went down. And, hey, i missed it. Alan greenspan missed it. And i think that that was a major event. Let me ask mark then too. Mark, if you purely look at coincident fundamentals and the market has a discounting mechanism out in nine months, how would you ever know . Or you just never sell . You are just peter lynch and buy and hold. How will you know if all you use is fundamental . Well i think thats always very difficult. Obviously you can look at measures like the simple pe or the shiller pe adjusted price earnings ratio. None of those mechanisms are necessarily great at timing the market. They do point to levels of under or overvalued. And have you be sidelined or missing out on opportunities. But i think thats where its important to weave the technical aspect into them. I think that helps. It doesnt preclude you from participating in a decline, but it may sideline you earlier than going down fully with the market in a massive downdraft like in 2008. Is janney saying get out completely . Were not completely eliminating bonds from our portfolio. They have Strategic Value for clients trying to temper equity. But we think theres value in the Municipal Bond market. Yields have blown out as a consequence of the energy patch. But on balance, were saying you know measure your maturities monitor your duration. Stay Higher Quality and use it as a strategic inflation to act as a volatility rather than expose your portfolio to them out of proportion. Because obviously the return on investment is relatively abysmal now and likely for the foreseeable future. Mark thank you. Jeremy siegel will be with us for the rest of the show. Coming up it is the xfactor that every company is addressing. Cyber security. Were going to talk to the man working on Enterprise Security products for hewlettpackard. Then the stocks that succeed based on resolutions. Well look at sin stocks coming up at 8 40. What billionaires have in common. Then port problems on the west coast getting worse. Well tell you about it in a minute. She inspires you. No question about that. But your erectile dysfunction that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. Avoid long term injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any allergic reactions like rash, hives, swelling of the lips tongue or throat or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Welcome back to squawk box. The futures right now are indicated lower, but not a lot. Down 12 points on the dow. If youre driving in your car right now, down three on the s p. And down 2. 34 on the nasdaq which is at 4800. Its almost gotten all the way back to 5,000. Much more reasonable than it was in the year 2000. 14 years ago when it first hit 5,000 and when we built this building. The nasdaq 5,000 building. We did. Look at it. Its beautiful. The building nasdaq built. We were supposed to be at 15,000 by now. Took a little turn on the way. Lets talk about Cyber Security this morning. Concern still taking center stage not only for individuals but also companies. How the Security Breaches are changing corporate agendas and what are ways to safeguard. Were talking to the Senior Vice President of Enterprise Security products at hewlettpackard. Good morning, art. Good morning, how are you . Good thank you. Lets start with sony for a second because im curious if youve been following the news. Of course last week the u. S. Government fbi blaming north korea. Now there seems to be some question mark as to whether it really was them or somebody else possibly an insider inside sony. Do you have any insight into any of that before we get into the conversation . Yeah i think theyre not mutually exclusive. If you think about the history of north korea, they partnered with a lot of people in military different kind of military actions. Whether its china or russia or iran syria as well. And in Cyber Security in particular, theres at lo of partnering between the Different Actors there. So it wouldnt be unusual and not mutually exclusive if they partner with someone else to get the skills they needed to perpetrate this. Were you surprised and there was a story today that some cyber experts said they were surprised that the u. S. Government came out as quickly and as forcefully pointing the finger at north korea given the question markets that still remain. I think we havent seen all the evidence so its clear they have other evidence thats probably classified. It would take a look to be able to do that. Especially because the u. S. Government did come out with a policy statement saying that they were allowed to use physical attacks for a Cyber Security attack. And so it would be have to be pretty well founded in the government for them to want to do this. And so it was surprising they came out so fast but it must mean they have some overwhelming evidence we havent seen yet. So what is your bigger worry . Come 2015 your biggest worry when it comes to Cyber Security. Is the worst conceivable thing i dont know even know whats conceivable that you could imagine could happen. And then what do we do about it . I think the complicated thing going on right now is cyber gives a lot more geopolitical power to countries that dont have the wealth necessarily to compete with the military buildups that other more wealthier nations do. And in fact the wealthier nations are typically more vulnerable. And so you see these rogue states whether its north korea or iran able to build up Cyber Security or war capabilities and then be able to attack more industrialized countries because were more vulnerable. More of our infrastructure is controlled by digital technology. Less of their infrastructure. And so attacks on us in this way is much nor danling. And counterattacks in the same way with the same kind of force have less impact on their economies. Are there industries you think are more vulnerable than others . I think any industry thats connected to the internet. And if you think about the u. S. Economy today, most of our companies are connected to the internet. A lot of our devices are connected to the internet. Even our homes now. Tell me if this is realistic. I dont know if youve got paperless. Not quite yet. Ive gone paperless on banking. And my great sort of nightmare is waking up one morning and thinking that whatever is online if i were to go onto my chase account or whatever and either the number is zero or the numbers are just not what theyre supposed to be and having no form of record of that. Is that something conceivable i should worry about . I dont think thats conceivable. I think theres i mean obviously anything is possible in the technology space. There are records, backups. Theres a lot of ways they would understand that. I dont think thats something to worry about. I definitely think there are ways for them to damage you. People who use debit cards are more at risk to have their Bank Accounts drained than people who use credit cards. And so those are things definitely to think about. What about the nightmare scenario that amy pascal and folks at sony found themselves in that somehow their entire trove of email shows up. Is gmail any more secure . Is google any more secure than yahoo mail than aol mail than your corporate server . The reality is if theres an attacker out there that wants to do damage whether its to reputation or others being able to attack these companies and take their emails or steal information from them digitally, its possible regardless of where the data is. Its possible. And so is there anything you can do to avoid this though . I think this is where investment and security technologies, i think understanding where your information is being able to protect your Sensitive Information more specifically through encryption we did some research and published some research. Theres three specific things you can do as a company to lower he cost of risk. The first one is invest in Security Intelligence systems. About 21 higher. Its not just the technology, its also the people in processes. The second one is encrypting your data. That adds about 17 to 18 on investments that you make. Doing that in combination with training your people and making sure that they know how to use the tools and is can run the security infrastructure will help you get better results for security. Okay, art. Were going to leave it there and cross our fingers and hopefully do more than that. Happy new year. Happy new year to you. Appreciate it. Coming up, the Holiday Season coming to an end. It always does. That means beginning of the Holiday Season for one side of the aisle, the tax season. Details next. And then why arent you the next mark cuban . It could be the way that you perceive opportunity. The results of an extensive billionaire study coming up at 8 40 a. M. Eastern. Welcome back to squawk box. Tax season. Tax season. Its the most wonderful time of the year. Its going to start on time. Yeah, despite a lastminute tax law passed by Congress Last month. The irs announcing that taxpayers can start filing their tax returns on january 20th. There was a possibility that the start of tax season would be delayed after that lastminute bill extended about 50 tax breaks. And a piracy update. In a related story, hbos game of thrones was the most downloaded tv show for the year for the Third Straight year. I still havent seen the final one where the father apparently dont say. That according to data from torrent freak. The Season Finale was downloaded more than 8 million times from bit torn and walking dead was second. The Big Bang Theory was third. Thats the guy, apparently. Uhhuh. Yeah. And theyre going to do it again. How many neither one of those are not your. Youre a newsroom, house of cards, girls. Less so. Have you seen girls . Of course ive seen girls. Ive never seen it. Not that theres anything wrong with it. Is it network . Thats hbo. Oh. Its not tv. Its hbo. So theres a lot of going on. Stuff that would embarrass me. Probably. Youve seen it . Ive watched a few episodes. Its not on the general network. It could not be on the general network. Coming up were going to talk vices and stocks and how they perform during new years resolution time. Morgan brennan joins us with that next. Male announcer ] fedex® has solutions to enable Global Commerce that can help your company grow steadily and quickly. Great job. mandarin cut it out. See you tomorrow. Welcome back to squawk box this morning. Here is what is making headlines. We are half an hour away from the latest data on the home prices. The shiller report expecting a 4. 7 year over year increase. And the latest data on consumer confidence. Thats due out at 10 00 eastern time. Cheaper gasoline is among the things to give that a big boost for the december read egg. And if you thought youd raise time using retailers instore pickup option think again. You save just an average of 96 seconds compared to just going to the store, searching for the items. Study conducted by retails firm stella service. Its a little weird. Then going to pick it up. Thats the whole omnichannel macys everybody is doing it. To make sure they have it or pick it up just easier to get it. I prefer to press the button and wait for the u. P. S. Man. Yeah. Or fedex. Or fedex. And check this out. Releasing a picture of the prince receiving pepsi ceo. They were said to speak about economic issues. Look to the left of the. Icture picture and youll see what caught our attention. Cnbc is on the tv. Twice ive had a picture of me sent by somebody with the prince. Which is always kind of neat that were on in saudi arabia. I think i have one. I should send that over. Are they drinking pepsi or coffee . What are they doing there . Definitely not cocacola. Indra would not do cocacola. No. We havent had him on in awhile. Wed love to have him on. And indra too. Indra too. Preebl see her in davos. Uhoh. Not supposed to mention. Supposed to wait until the week before we go. Who told you that . Nobody really. If you plan to celebrate new years eve in vegas, they could get three inches of snow. A snowstorm is headed. Las vegas averages. 2 inch of snow a year. But people go there to sit by the pool. But flagstaff, another matter entirely. Ive been through there when its snowing like crazy. Tonight and thursday morning, the forecast calls for one to three inches in las vegas. There you have it. Also santa claus says he knows whos naughty and whos nice. And the bad boys get coal. But on wall street sometimes being bad is a very good thing. And our maher ganorgan brennan joins us to talk more. You make that bad sound good. All the new years resolution people make after the holidays they play out in e the market. Booze makers tobacco companies, casino operators. With the help of kensho we found out they have performed in the first two weeks of a new year. Sure enough, many of the naughty names sell off in early january. So alcohol producer Constellation Brands drops more than 1. 5 in the first two weeks of january. Diageo 1. 2 . Cigarette maker vector drops 1. 5 . The exception, altria group. That tends to gain 2 in early january. Looking at the vice group that outperforms, casino operators. Las vegas sands surges 6 to 7 . Mgm, about 6 . New years eve trips and then of course the holidays in china that tend to benefit are part of the reasons we see that. But keep in mind over the past ten years, most sin stocks have outperformed the s p 500 meaning those january resolutions dont seem to last for investors at least. Guys back to you. Thank you for that. Thank you for that morgan. Yeah. I lost him. Lets get back to our guest host Jeremy Siegel. Weve been all over the place today. The nasdaq you have never specifically focused on. No. But do you have your facts at your fingertips on multiples . I have a few its a totally different index now, isnt it . Just to give you an example, we were talking about 2000 looking back and thats when the nasdaq peaked a little over 5,000. Back in 2000 the tech sector of the s p 500, so were not talking about the crazy internet stocks. These were profitable stocks. Were selling for 90 price earnings ratio. All right. Today the s p 500 tech sector is 15th. Wow. Thats a world of difference. I mean its actually a little less than the rest of it. So theres a few stocks you know, social media stocks that might be a little bit rich. Always trying to figure out amazon and so on. But overall, wow. I mean you know i think nasdaq is on such stronger foundations that can beat the record. Its almost a pr ratio. Priced to revenue ratio. Yeah. And high expected ratio that were at 50 or 100. It made no sense back then. So fundamentally you cant say hey nasdaq back to 5,000. Its a totally different its an absolutely different world. And the same thing about just as i said, were just about a percent or two on the inflation corrected basis getting s p back to 2,000 but earnings are more than twice as high. So basically inflation adjusts and people havent made money in the stock market since 2000. Since 2000 on a price component. Raised some dividends there. From march of 2000 youre still behind. Which would explain sort of the its almost an indifference to the stock market by young people. I still dont think weve come back from 2008. We havent. People say i need my money. Im excited about being in the stock market. Im excited about preparing for the future. We are not there. We had a decline in the s p 500 during the financial crisis. Weve had two major bear markets the last 15 years. The financial crisis. Wow, thats a couple of huge shocks to the system. From the great impression it took almost 30 years for people to get back nerve. It wont take that long this time. But its beginning to wear off and thats why i think that migration is still going to be there and its going to be there on the income side because Interest Rates were not going to ever get back. Not ever but its going to be years and years to get back to what people think is decent returns on their cash. We need more teslas and gopros. Were getting them. Where people theyre going to talk to you about them and, you know cocktail parties, cabs things like that. We need people heres the question. We need that for the market to go higher. But isnt that always then thats the end. Isnt that always the end . Isnt it always the end when there are these sort of high fliers where the math doesnt make sense where everybodys excited and theyre talking about it at cocktail parties . Yeah. When they invest a huge group of stocks. Even the few we talked about that are selling on a revenue basis may be 1 of the market value of all stocks. But back in 2000 you were 50 of the crazy stocks. They were all 200 billion stocks. Cisco was over a hundred times earnings. Yahoo was over a hundred times earnings. Oracle. Does it matter whether Retail Investors are buying individual stocks and actually playing the market it does. Or whether theyre buying index funds its much better when theyre buying index funds. Longer term. People buy individual stocks i mean but if we ever get to a moment where people are actually buying individual names again in a meaningful way saying did you see such and such or whatever. I may start to worry a little. And when millennials are saying i love Andrew Ross Sorkin on squawk box and he mentioned a certain stock. Or the socalled water cooler. Everyone saying i just made it in this. This was the buzz in 2000. Were not anywhere near that. Okay. But you would also institute a rule that an nfl team has to have a winning record to be in the post season. Absolutely. Yes. Or theres a third wild card. Or theres a third wild card. Absolutely. And philadelphia would be in wouldnt they . Yes. Could carolina still be in . No i dont think so. Okay. Right. Losing record. Jeremy will be with us for the rest of the show. Coming up when we return five habits of selfmade billionaires. Were going to talk to an author who did an extensive study of billionaires and found out theyre not dreamers theyre doers. Hes going to explain what he means when we come back. Welcome back to squawk box this morning. What is the secret to a selfmade billionaires success . Our next guest argues that billionaires found opportunities in highly competitive mature markets and theyre focused on producing, not dreaming. Here with us is the head of global thought leadership and hes the coauthor of the selfmade billionaire effect how extreme producers create massive value. It hits the presses and bookstores today. Congratulations on the book. Thank you. So Biggest Surprise for you if you were to sort of pick out one insight that you think drives these billionaires and got them to this place . The Biggest Surprise of the book for me and my coauthor was that they made their fortunes in highly competitive businesses. Four out of five of them were in things like clothing or retail or coffee. You know . And we really didnt except that. One of the things he said you need that monopoly. I wish i were as successful as peter thiel, but the data doesnt support him. You really see that what happens is that these people bring together five attributes. They look at imagination, execution, risk taking timing and great producer performer leadership to create new markets. So i have a question about this which is what was their age, most of these people when they became when they started on the ascent if you will . About a third of them started on the ascent at about 30 or before. About 2 3 of them did it between 40 and 50. Really . Yeah. Its later than you think. Also peter thiel, one of his sort of Foundation Investment decisions is your age. I believe if youre over 30 or 35, he thinks youre kind of done. I think that yeah. By the way im over 35 so were all done. Theres no hope. I think peter may be looking at a particular part of the market which is more tech oriented. As i say most of our selfmade billionaires are not in the tech area. Is there a particular billionaire whose story you think was the most interesting . Well i think that Sarah Blakely is really pretty interesting. Of spanx fame. When you take a look i was talking to mary ann in the makeup room and she was saying everybodys cut their feet off panty hose and used them to hide panty lines. But sarah had the gumption to raeld to sit down and explain the product that they said they would buy it. That he decided to go along with it. When you talk about the five habits, what does empathetic imagination mean. The emotional side of things as well as thinking about the rational side. So its about seeing where a markets going to go. You look at jeff lurie when he spent 185 million to buy the philadelphia eagles, everybody thought he was crazy. The wall street journal had an article about what a vanity purchase it was. But going to get more diversified, that american football was going to b a great product. What folks might describe as irrational. Ive talked to successful people who say if i knew whey knew now, i never would have done this. I would have thought it would have been impossible myself. Well, one of the thing b things we notice is these people arent dreamers. When they see an opportunity they have to make it real. Thats the big thing. They might with hindsight say i wouldnt have done it but they had to do it is what we saw. Do you believe that this type of success is repeatable . Meaning, you look at a bill gates. He created a company in microsoft. He had two really hit products right . Uhhuh. First in windows. Maybe dos. But windows and then clearly the office product. Googles had a couple. But a lot of people say everyones got one great idea in them. Well what we saw is that these people generally had two or three or sometimes even four or more successful businesses. Look at a guy like john paul degiorio. The example you gave is true but the overall data shows theyre serial entrepreneurs. Final question, are you born with it or is it something you can learn . Do you think being an entrepreneur which all these people are to some extent, is something that just comes with you when you show up on the scene . Or you can go to a class at wharton or elsewhere and learn or Harvard Business school and learn to do that . You have to look at it like distribution. There are some people who are naturals just like in sports. And there are some people who are never going to do it. But the vast majority of us sit in the middle and can learn. That was really the purpose of the book. Is that people can learn from these selfmade billionaires how to be better Corporate Executives better investors better employees. Its that mass in e the middle that we hope people will take a look at the book and maybe learn something new. I thought it was interesting, talk about it was more traditional areas. Maybe not tech. We all know that Warren Buffett never invested in any tech at all until he finally did microsoft. He was already a multibillionaire by then. Seeing the value in the ordinary area. Peter thiel, he is on the tech edge. But you dont have to be there to do very very well. Absolutely. They usually bring together a couple different factors that define an advantage. When you look at starbucks, its not just about the coffee. Its the coffee, branding, labor practices, sourcing practices, positioning. Thats what you see as people come up with a new system and get it all together. Did any of them say i want to be a billionaire like at 20 . That would be interesting. I think they just wanted to do something well and it happened for them. That is the thing we saw again and again. Another interesting thing is that there are a couple who announced they were going to do it, but they were a rarity. It was really about excellence. Take a guy like who started morningstar. He saw there was a Business Opportunity there. He said look. Im in a business thats just compounding. And thatll be great. I said final question before. But now a final final which is this. How much of it is luck . Meaning the timing i look at a mark cuban who created a great interesting business got paid an enormous amount for it because of the timing of the moment. And then obviously hes done Amazing Things after with it. Yeah. I mean if you look at broadcast. Com, i would argue that he saw a bunch of the things things that are now other companies were in broadcast. Com. If their owner kept going strong, they could have had more. What we saw is again and again, if they hit failures they keep going. Its not about luck. Its about continuing and persistence. Thank you. The selfmade billionaire effect on book store shelves. Coming up, a slowdown at west coast ports is costing companies millions. A dock workers slowdown at west coast ports is getting worse. Jane wells joins us with more. Reporter you know we are seven months into this port slowdown with no end in sight here at the nations largest port complex where 40 of ship cargo comes through. Caught in the middle are manufacturers. Weve got two, another two down here. Their stuff is stuck on these ships. You may recognize one of them. It is the traditional bed with contemporary touches on it. Jane seymour and michael had a Successful Partnership designing furniture. Much of her new line cannot get into show rooms for her target consumer. Its aspirational. People want magic in their houses. They want magic in the bedroom. Then it spreads to the dining room. Then next thing you know theyve got magic everywhere. Thats what they want. Reporter its going to take magic to get these things off these ships in a timely manner. Michael says none of his samples came to a recent show spent 4 million to be at a show lost millions of sales. There is a huge furniture show in las vegas in a few weeks. If you look at the ports, there are 15 20 ships not unloaded. We dont know what to tell our customers. We dont know when to get them. Reporter other retailers, lululemon lowered its full year guidance because of congestion. An analyst says vertically integrated retailers with the least scale and most fashion sensitivity are most at risk. According to l. A. Times fred smith told analysts the slowdown in the west coast ports has been a much bigger deal than people think. Dock workers blame the Terminal Operators saying they are letting in these big super containers. Operators are saying dock workers are intentionally slowing this down. A federal mediator is in touch with both sides. Amini says they have their stuff here. If they turn these ships around thats not really practical. They just have to sit and wait and theyre stuck. Back to you. Thank you for that. Happy new year. Coming up a get rich quick scheme is backfiring leaving a man stuck with hundreds of dollars of movie tickets. Es me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 straight years. One pill each morning. 24 hours. Zero heartburn. There is an ohio man thought he was making a good investment when he bought 50 tickets to the interview at a local theater. His goal was to sell them online. Sony decided to stream the film and that meant demand for tickets to plunge. Jason best wants his money back. He tried to return to the tickets to the theater before the showing arguing movietickets. Com had a refund policy posted. I appreciate the idea. Very entrepreneurial. Just a bad investment. Sometimes you make an investment and sometimes it works. No no no. The facts change the news changes. Do you think sony will make money on that . I think eventually they will. I dont know. Theyve got to get to 75 million. They made 18. I think they did the hacking themselves and knew this was a bomb. Their image notched up a bit, i think. I think a little bit upgrade. Its been something to as you say, therefore but the grace of god. Would make a great movie. The whole thing . Sony. Thank you, jeremy. Join us tomorrow. Squawk on the street is coming up right now. Good tuesday morning. Welcome to squawk on the street. Im Carl Quintanilla with sara eisen and simon hobbs at the new york stock exchange. David and jim are off today. The penultimate trading session of 2014. Premarket red after the s ps 54rd record of the year. Caseshiller housing data is out. No relief in oil though. A new 5