On you may have returned the ugly christmas sweater you got from your brotherinlaw you dont like but what if you could turn the ugly stock you would own the desk gives the names we will start with the nonstop on wall street the nasdaq hitting a milestone, crossing above 9,000 the first time ever. Records keep falling stocks keep climbing and fundamentals, tim serial dont seem to matter much. They dont. You can find an argument for valueses within megacap tech if you look at intel, sysco you cant make the argument with apple anymore. The interesting thing about the triple qs or the etf for the nasdaq 10 oh or lack at the nasdaq 100 we know that apple dominates this index and this is apple pick whatever point in the road you want in 2019, its 70 from june, its 50 from august, 50 for apple from august. And thats thats how you get to a nasdaq at alltime highs. Microsoft and apple leading the which. Today a little amazon for good luck but its lebron jamesly out of this. Which is amazing, dan, because apple 50 this quarter and the slowdown in iphone sales from china thats why i alluded to to the fact that not saying fd dont matter but concerning news around apple havent had any god news been concern. And goes high sfwleer apple started the year january 2019 guiding down guiding iphone sales ended down 35 . Here working on a low base off expectations for you the year the trailing 12 months earnings and sales flat year over year from the prior year. But a stock up 82 on the year it started at 14 times where people are saying if china is slowing and iphone units arent growing 14 times is expensive because we see the deceleration in services. Now a stock is up 10 oh in this calendar year. 2 of the year gaining 600 billion in market cap and didnt grow earnings or sales, trading at 22 times forward. Dan sounds bearish. Mold on. And 24 times. Its gained a facebook market cap. What that means is you have just had massive multiple expansion when you see that action thats a a lot of good news to come if it doesnt come you have a. And thats the problem actually in fact if you look thats a broad market story as well not just apple story. Weve seen it across tech, s p ands nasdaq is you have seen nothing for earnings allier. In fact its been a earnings glut because we missouri moved so much of the tax incentives in order to buy so that earnings are really great last year and really rough this year and all we have seen is expectation. The multiple expansion makes up for more than 100 of what we have experience zbld but the multiple expectation too you have to look at it used to be just a Hardware Company and it shifted now you think of it as Software Company wab Revenue Generating company for surk subscribers from 20192018 to 2019 you had 38 growth in subscribers. Now youve gone screaming streaming services coming in i signed up last week week for it. Whats on disney plus is there anything. Apple plus. Apple plus sorry. The morning show. The morning show. Worth buying it go buy it. There is potential and we cant forget we have 5g coming as well. Obviously thats going to help the hardware xenoen that has been struggling. But i got you know, dont yell at me, tim im defending dan. Im defending not that he needs it. What did i say. You said he was bearish. Yeah. And i think dont dant dans only point was if youre buy going you buy it because you anticipate good news you are hoping. Paying for good news. Guessing about the future. Yeah. But im not saying go outen a boy apple after up 83 year to date by the way its annualized at 83 for the daek this is not that much the outsized for apple everything we are saying is consistent which is the stock rerated, trading at 20 times forwarded on a blended multiple getting new into services and digital. The hardware multiple rerated because we have wearable growing 25 . But getting to victorias point all of that is priced in and thats dans point yes its good stuff, going to make a difference at some point however, youre already paying for it im the bad guy on this desk. I think to be fair youve been long apple. How i became the blazing apple its tims night. Its tims night. I got plenty of this, take it on. I think its interesting, because we talked about maga microsoft, apple, goog and amazon 4300000000000 trillion in market cap making up 43 of the nasdaq 100 when you look at outsized gains obviously amazen goog zblool goog. Up 30 google underperforms the nasdaq thats having its own multiple issues you would call it cheap. But maybe there are issues about their expected growth. And then amazon is trying to grow into the multiple but its lagged the s p and the nasdaq actually so i guess my concern is when you say its annualized apple at 80 the last decade ill say to you its 1. 3 trillion its a massive percentage of the s p 500. And you say there is money on the side people dont own it for the next tepp years what are the neg leg ill tell you they do right now and it may take time to digest that. Just perspective, brian we have to keep moving but think about nasdaq if you took if from highs of 2018 where you could take if from october op up 14 if october of 2018 up 22 from january of 2010. Its not like a tare its a tear the last few months. But annualized over the last couple years with a lot of volatility its not like that here is a theme we talked about the halftime report, the fomo, fear of missing out. If you run money for clients you have to own certain stocks but they get the forms early next year theyre saying you why didnt you own amazon . Remember there will be blood why dont i own this and this . You feel like they might come in and buy the stocks just to say, look, we owned that even if they dont like it and i bornd wonder what happens next year. You dont want to chase the market obviously if you dont own a soak suffolk you have a reason not to have that stand by let your clients know why, we just got amazon we added a azmodan the last couple weeks in our portfolio wove had that conversation with clients. But looking forward. You just did. We did. We did we just added it. Where you been the last 20 years, victoria. Well looking at the balance sheets, looking at the cash. Why wasnt i one of her clients. I might be, okay. Why do you think she is on the show im kidding im not the client whats making amazon now look attractive he is versus a year ago. I will tell you just like apple has its own ecosystem. We see amazon creating its own ecosystem capturing the value chain by having their own delivery process they are working on, their own private label products they are using. They have gone and done the whole food things prevail. They are expanding and we think capturing the value chain helps the margins which we havent liked previously but we see anticipation thats better. I would echo that and say they hit a threshold all the money theyve been investing is. Starting to pay back. You believe that 20 years of really no profit. From the Worlds Largest nonprofit. The pushback on that is one year it seemed that apple was growing into the values because its a valuation that never made sense. But when you look at the ability to have operating leverage on their business the problem out of amazon is they have to the continue to reinvest, whether shippings logistics or infrastructure i dont think it stops for them. The question is what do you pay for it its fine to pay the multiple so far. You wonder wsh dan is there a breakout bring up the chart if we can because dan has been talking about amazon a while. Yeah. And it had a great day today but amazon has not been a great money maker a year and a half. Yf a problem with it. The fact that the stock continued as the nasdaq went par balance bollic the past few weeks is bullish when you say we are at the timing in the next year or two to ginas point about i about the investments i think the omni channel approach with bricks and mortar and verticalizing logistics, that makes sense. But i think what we have seen in 2019 is when they have the investment periods we have seen this over the last 20 years with the stock, the stock cools out it does. I dont think jeff bezos cares i dont think the investors cared over the last ten years. When you think about the take rate on new online sales they get 50 of all incremental online sales you say to yourself this is going to be a much bigger company. Right now they have 200 billion in north american sales right now. Its just not profitable so the other issue we mention is that aws is smaller percentage and their margins are contracting a bit. And thats kind of one of the reasons why i think the stock has been in the holding pattern. Right but also i think part of aws wasnt necessarily about building something for customers. It was actually getting customers to fund something that amazon needed to build for itself in many ways amazon got their customers to go alongside them and help build infrastructure they needed anyway and they had turned that into business it was a bonus it made money. Well one point and i want to move on. Because i think this conversation sort of exemplifies one of the concerns people have the of the market we talked about apple and amazon every day. There is a lot other stocks. The. 550 of the qq is five stocks. Yes. You wonder if everybody is piling in. Whats lets move on i want to bring up the smh or sox semi conductor. Right. If you look at the nasdaq 100 the last 30 days with the exception of tesla and i think one other name, nine of the top ten have been semiconductor microchip, lam, amd all on for a fire. Overcrowded semi conductor. When you think about semis so countercyclical in terms of trade winds. The smh for a kwhiel looked like it hit the peak in june of 2008 yet we plowed through the highs. If you think about a lot of the companies where we get updates you listen to taiwan semi, the white label provider for the industry they are seeingenormous demand and resurgent from Southeast Asia and growth areas. Its get back to though this is a momentum trade if you look at stocks within the smh they are the peak of that momentum. Its a momentum trade. Actually i its a fundamental value. I think there is fundamental value there. I think to your point about this being a supercycle for the companies i think semis are part of a broader supercycle. Part of what kept semis down was noise around trade and whether or not they were getting hit with various elements of the supply chain, whachs happening with the u. S. China trade deal the if you look at sort of what has happened to semis appear they ebbed and flows. You saw cryptocurrency and bitcoin create semiconductor demand that waned we have continued Cloud Storage continuing to expand that created demand. I think that demand doesnt go down any time soon if anything i think thats a supercycle. That demand and the momentum we are talking about, that momentum continues when you look at markets that had 20 plus percentage up years 80 of the time the following year is positive as well with we have the momentum pushing cross the board. But the demand is there because the consumer is still strong look at the health of the consumer right now, i mean we have debt service ratios, the lowest theyve ever been, financial obligation as 7ier les. Savings rate at 8 20ier high. The consumer is there which gives the demand for the products and i think semis along with the rest of the market has the momentum Going Forward. Great macrodiscussion its been a record day and year for your money if you bought at the 2009 lies lows if you listensed to mark haines been a record decade for your money but as the saying go goes out with the old in with the new in the 2020s. Bob pisani in the New York Stock Exchange and you are champing at the bit to jump in here. I have. But its remarkable what a decade this has been, broien, started out with fear, and ending with historic highs investors have been absorbed with the search for growth why technology so dramatically outperformed everything. More than 300 on the daek Consumer Discretionary done well health care industrials, consumer staps one notable stand outhere. Energy is the only sector with no gains at all for the last decade so what is next here if history is any guide, investors should avoid the fallacy the future looks like the past we have often noted stocks in sectors outperforming one year underperformed the following year called mean reversion its a tendency for investments to return to longterm averages and it happens over long period of time. Let me show you an example look at 2000 and 2009. The top three sectors in that decade were energy, Consumer Staples and materials. They tended to underperform in the next decade, 2010 to 2019. Up only 807 the three bottom sectors back then Communications Services and technology and financials, they tended to outperform in the decade up 184 this phenomenon happens happened from 1990 to 2000. It was the technology was the best performing and worst performer in the following decade what does mean reversion why does it work as an Investment Strategy for the stock market mechanic its two explanations first in a capital system underperforming sectors tend to be ruthlessly restructured until more efficient. Secretarily the furpt fallacy humans contend to buy things going up in value creating bubbles that burst, and broien thats one of the tenets of the idea in 2008 and the problems we had then as well. I remember those days im not sure other people do but we remember them, bob. Thank you very much. Thank you. Bob pisani always interesting Historical Perspective and important Historical Perspective. The question victoria is were going to ask you a sim one because youre new to the desk. On the spot. Whats the market s p target ten years from now is what higher. Its higher. Nice answer. I like that. There we go. Higher. Okay how about this, next year what do you think, to bobss point people buying the winner do you like the setup for 2020. I like the setup for 2020 but i think the reason were looking i know he is talking about mean reversion and we have had the techs and strels doing well the past year. But i think theyre set up well for next year also you have a central bank thats extremely accommodative. You have low inflation companies sitting on cash ready to maybe put it to work because we have some of the uncertainties around trade and other issues coming off the table a bit. So you are setting yourself up to allow the cyclical names to continue to do well next year. We wont see the mean reversion in the next 12 months. Im jumping in because she is in from houston. I. Oil appear gas. If you are in mean reversion you are a buyer of oil appear gas. Go ahead. So if you thanksgiving about where the s p waning and the Energy Sector was in 2008, towards the end of the decade, almost 17 , 16. 8 at the peak. Its 4. 2 now. You havent had to own energy if you were a fund manager. In fact you could have avoided disasters. You get a lot of cli shay. And if you think about the elongated cycles of energy, and emerging markets we in a period where there was a supply response that comes in the commodity space, whether oil, nickel. Think about the end of last decade and everybody thought we would have a shortage of raw materials, et cetera what happened is not only is there a technical standard deviation the things bob talked about but there is a fundamental reason why we get this they stopped investing in mines and infrastructure around the Energy Sector because the stuff wasnt profitable. Eventually a place comes where spli and demand evens out. I think it emerging markets which is underperforming for a decade if we get the reflation trade thats exactly where you see assets move. But i put it another perspective. Right now investors are looking for value in the investments and you are talking about the cheapest sectors and areas thats one of the reasons you see the emerging markets was the redheaded step child of and everybodys portfolio. There is cheap and cheap for a reason. A lot of the companies all they do is use every pit bit of Free Cash Flow to pay debt service. I dont need tell you that the ceo may be out but there is plenty of drama at bogt. A new report talking about alleged disturbing behavior at the company. And later Home Building stalks stalling out after a strong start to the year. Will there be a new builder boom in 2020 if rates stay lo live in new york city times square and there is much more fast money im told right after this or training for something youve never done before. Thats room for possibility. When it comes to using data, which is why Xfinity Mobile is a different kind of Wireless Network that lets you design your own data. Choose unlimited, shared data, or mix lines of each and switch any line, anytime. Giving you more choice and control compared to other top wireless carriers. Save up to 400 a year when you switch. Plus, unwrap 250 off a new samsung phone. Click, call or visit a store today. All right. Welcome back to fast money. The hits keep coming for bogey and investors. New documents under review by Congressional Panel point to what some call quote very subscribing behavior at the company. Reuters say boeing raised question about the commitment to safety and production schedules. Boeing issued a statement saying it brought the documents to the fa a and congress but added gnat tone and content do not reflect the company we are or need to be. This comes as days after boeing fired the ceo dennis muilenberg. The stock is positive for the year but could face headwinds in the new year here is phil lebeau what to expect. Next year boeings 737 max will have three critical moments. First expect recertification early in 2020. The head of the fa a, steve dick s p saw said he wont prove it until he flies it himself. There are a number of hurdles to clear before it takes off. But most believe it will be recertified in the first couple months next year once that happens, expect airlines to make a big push to convince fliers the max is safe. Southwest, american and united have parked max planes for almost a year. They know passengers may hesitate or flat outrefuse to board a max. So executives of those airlines will on max flights to reassure customers, the planes are good to go. Once the max is back, look for boeing to slowly ramp up production yes, the Assembly Line will be down at the start of the year. But boeing will likely go to building 42 a month by midyear. What about the Max Airplanes that have been built but not yet delivered . They will event