Yeah he did. He testified on his own behalf. Made his case and the jury found him not guilty. He called this suit personal. He said it was all personal. Hell speak out about that today. Since hes mark cuban, chances are hell have a few other things to say about a few other matters as well. Cuban owns the dallas maverick Basketball Team up. Might be interested in listening to our coach coming up, Legendary College coach rick pitino. He has a book out about leadership, two things lacking in washington. Speaking with the coach. And americas favorite stocks, today were looking at amazon. Are investors confusing a Great Company with a great stock. One thing lacking with amazon, even though its so has done so well as a stock over the years. Its at 327 right now. It has not turned a profit. Its a great investment but does it justify this run . Just because you love the company, does it mean you should love the stock . Thats still to cob. And that you could look at a lot of companies. Absolutely. Lets check where we stand as we approach the final stretch. Weve been coming back from the lows as we approach this final hour. The dow down 43 points to 15,425. Paring losses from earlier in the day. Nasdaq bouncing off lows. Down 0. 5 . Nasdaq pulling back from the alltime high, down 6. 75. Aaron gibbs from s aechd p capital, steve grasso, and Adam Thurgood from hightower. Steve, what are you seeing on the floor as far as flows . Where are the flows and commitment . The first thing that spooked the market is china tightening and european stress testing next year. The fact is the matter, people want to lock in profits. They dont want to let the whole rally be a paper profit of losses in case we turn around. Theres only one place for profits, thats equities and probably the way it will stay. However, aaron gibbs, we talked about we talked about this the last few times you visited. The revenue is not there yet still again. Were looking for 4 . That hasnt moved. Weve seen earnings numbers go up but were looking for 4 revenue. Whats really happening is, its being driven solely by Consumer Discretionary. Out of the 4 for s p 500, its really coming from Consumer Discretionary having a 20 Revenue Growth. Wow. Yeah, its very much about wheres the weakness . Whos not pulling their weight in terms of Revenue Growth . The same usual guys. Utilities, materials, energy. Energy is really being dragged down by exxonmobil. Ross, is that the way to allocate capital, go where the growth is, or the momentum stocks getting hit again, some big guys that were driving this market all year. How do you want to allocate capital . Do you follow the growth in the earnings story or no . You always have to follow the growth, maria. The bottom line is, stocks go up with earnings over time, so you need to have a company thats growing its earnings to really see any appreciation. But what you pay for those earnings is just as important. What were seeing today is simply just profit taking as was earlier said. The markets been phenomenal this year. We made huge profits for our client. The last thing were going to do is lose some of it. Especially in heavy momentum stock. We lieu the market. It cant go up every day. We look for opportunity to get in the right price. Adam, i see youre overweight technology but today the semiconductors are lagging. Theyre not providing good guidance down the road. Thats a key sector, if not the key sector, to tell us whats coming in technology. If theyre not doing well, the rest of the industry cant as well. Why are you overweight . Despite pullback and expectations, we still belief technology is the best sector for the next couple of years. Maybe not the next month or two but the next couple of years. They have the best Balance Sheets in the business, which gives them a lot of optionalty, whether its stock buy backs, dividend payouts or acquisitions. On top of that, their multiples are depressed. If you see any uptic in economic activity, they could expand quickly. The stocks would benefit as a result. You know, the dow and the s p 500 have been sitting alltime highs. Nasdaq is nowhere close. Its at 1700. I have no idea when that will happen. I think were in a multiple expansion cycle. If you look back over time, the market rarely trades at average longterm multiple, which is basically where we are today. It usually trend above that or below that. Weve been on an upward swing now for a couple years. And i think the tail winds are still in place to push that forward. If it continues to push forward, i think technology will be one of the areas that helps the s p multiple move higher. Grasso, i should have asked you when nasdaq gets back to 5,000. Youll know the answer. Yeah, of course. The problem is, though, is that theres only a couple of names that really seem to be up every day. I personally own google. It seems to be bullet proof to a lot of different aspects. Every day you see a new high. As long as it holds that 1,000 price tag, its still very bullish for the whole sector. Erin, what kind of a 2014 are you expecting . I know the story in terms of guidance for the Fourth Quarter. What were getting at, are we going into the Fourth Quarter weaker than we thought because of the Government Shutdown and this political rangeling. Whats your estimate for 2014 . We havent seen a lot of estimates have coming down. Looks like its going to be another consumerdriven recovery, another year of looking from the consumer. Hopefully if we start to see growth from europe, we can place more bets on the industrials but right now its based off the u. S. Consumer buying away the tapering, keeping that going, you know, not coming in until the next First Quarter of next year. Maria, we also have to realize, hedge funds have grossly underperformed the index. Going into year end, theyre going to be chasing. They have to cover a lot of their positions. Thats going to push the market higher. Granted, vanillas, longonlies, have to sell, but i would think the path of least resistance is still higher. Ross gerber, how much lower do you think Interest Rates go here . That would be good for stocks at some point because thats less competition for equities, dont you think . Absolutely. I think thats whats supporting equities, is rates have gone from 3 down to 2. 5 . I dont think theyll go much lower. The only reason they went down is because of the government basically stabbing the economy in the stomach for a little bit. Ultimately, i think we are going to see Slower Growth in the Fourth Quarter than we expected. Probably a poor employment report for october because of our own government, which makes absolutely no sense that the government we elect actually hurts the economy that were trying to fix here. And clearly employment is not getting much better as it should be for how far along in the recovery we are. Thats what i was alluding to. How much damage has been done as a result of the nonsense going on in washington and how do you allocate capital if, in fact, we see more wrangling and battling . Bill, check this out. The top ten stocks in the s p 500 this year have returned over 90 . Thats best buy, netflix, micron technology, gmb, celgen the consumer stocks you were talking about. Do you want to sell the momentum at this point . And get on another train . Carl icahn is. You want to keep going into 2014. Not until tapering starts. I dont see why you would sell stocks that are going up that are doing really well. In this market, a lot of times you say, look at the valuations, but in the 90s, the valuations kept growing when you kept saying that. And so i think you want to own these companies. You have to look at what these companies actually do and are these businesses actually growing . Also, we saw what carl icahn, when you have a profit as we start off the segment, you have a profit, its shrewd, responsible to lock in that profit. People spin out of those going to high beta and return back to whats working. Bishlgs if you made 800 million, you would sell. Selling at three times earnings, thats the time to take it off the trade. One of the best trades in trading history. Unbelievable. Did it again. Thank you, everybody. See you later. We have seen a loss of momentum for the momentum stocks. Grasso and i talked about it before we got on the air, almost like an etf they sold them as a group. The dow down about 50 points off this point. Mark spits nznagle reportedl made a billion dollars on the stock crash. Hes not optimistic about the future. Its a market that set up, i think, for a major crash, a major selloff. And it gets worse. My exclusive interview coming up next. Mr. Happy. Speaking of potential selloffs, well hear from somebody who said amazons 30 gain this year is unsustainable. This person thinks one of americas favorite stocks is due for a big pullback. Both sides of that story coming up. Legendary College Basketball coach rick pitino is here to talk about how lessons from team and sports could fix the dysfunction in washington. [ coughs, sneezes ] i have a big meeting when we land, but i am so stuffed up, i cant rest. [ male announcer ] nyquil cold and flu liquid gels dont unstuff your nose. They dont . Alka seltzer plus night fights your worst cold symptoms, plus has a decongestant. [ inhales deeply ] oh. What a relief it is. Welcome back. The s p 500 took a dive during the financial crisis of 08, the wall street journal suggested Mark Spitznagel made the flash crash. He wouldnt speak to me about that but he predicts a crash in the not too distant future. This is a very distorted market today. Visible in a number of indicators. But its a market thats sort of set up, i think, for a major crash, a major selloff. And, you know, its a basically number of other times. I would argue all the major tops weve seen in the market over the last 100 years look very much like it does today. My argument, this is very much a fedinduced distortion. So, whats the catalyst, then, to trigger this 40 crash in stock prices . We all know that this market has been goosed by the fed. But now a lot of people are saying, tapering is off the table in 2013, off the table possibly for much of 2014. Whats the catalyst to actually send stocks lower in the face of the fed with this stimulus . See, i dont think it matters what the catalyst is. The whole notion of catalyst in many ways sort of hides whats going on. Whatever would drive the market down would say its this debt ceiling issue or anything else. These are proximate causes of crashes as opposed to ultimate cause of crashes. The ultimate cause is distorted environment were in. The fact that assets have been bit up to this unsustainable level based entirely on an artificial economic sort of illusion that is zero Interest Rate environment. So, the ultimate cause again is just the distorted setup we have in our economy today. So, from a practical standpoint, how do you invest in this market . 2008 your funds scored returns of better than 100 as the s p 500 lost over a third of the value during the crisis. How do you invest today . Its simple answer, mom and pop answer, i think, is just to step aside. This is sorted of a mundane response to that. But its but its impossible to do. Certainly impossible to do from a professional standpoint. The professional investors certainly more than nonprofessionals are forced to sort of make this return every quarter, every year. So they dont have this luxury of being roundabout, thinking of the positional advantage we try to gain for later. So, thats a huge advantage that sort of mom and pop has over the professional. We can step aside. They can step aside and wait for the opportunities that are going to come. As long as you just understand the market process thats happening here. Understand the distortion. And it will allow you to step aside. Very simple advice. Dont just focus on this next slice of time. Understand all the other slices of time to come and prepare for other slices of time to come. When you say step aside, raise cash, do nothing, keep your money invested in the market . The hardest thing to do right now, what makes you look like a fool is sit and earn zero. I would argue its the best investment to sit earning zero. Again, this is the idea of not focusing on making immediate returns, these decisive returns every period but thinking about so that dry powder to have when great Investment Opportunities come. This is roundabout investing, as i call it. Do have you a time frame on this selloff . Youre expecting the market to fall 40 nearterm, longterm, whats your time frame . I think its probably naive to think we can pinpoint such a thing. If history is any guide, we should expect it sooner than later. You know, i think a year or so is a good guide. But, history need not be a good guide because were in this monetary expermit, the likes of which we really havent seen. Theres maria with Mark Spitznagel and well talk more about his thoughts. But we have breaking news. Speaking of carl icahn, we have a story with carl and apple. Scott wapner is on the phone. Carl icahn just tweeted a moment ago he sent a new letter to apple ceo tim cook. Its my understanding from a source familiar with the contents of that letter that it details carls current position in apple. What we dont know is whether the position has gone up or gone down, but what i can tell you, again from my understanding, is that it continues to make a very strong case for the buy back. I think one can surmise if he continues to make the case for a buy back, that id be surprised if the position went down. So, it details where the position currently stands. It apparently unveils a pledge that carl icahn is willing to make to tim cook. And continues to talk about the buy back. Now, its going to be launched tomorrow. Youll be able to see it tomorrow as part of something that carls rolling out called the shareholder square, where he wants to basically create a platform to get some rules changed in corporate america. Hes made that clear on a number of occasions. The big news the last couple of days, of course, has centered around a nonactivist position, that being in netflix, which he cashed out half of his position, nearly half, for 1 billion. I think the big takeaway is that carl continues to press the case at apple. He sent a new letter. He made the case on halftime show not too long ago where he said in his own words, im not going anywhere, im not going away. He sent a new letter detailing what his current position in apple is. And it continues to make that strong case for but in the meantime, scott, i mean, what wed heard from both carl icahn and tim cook is that they had met a few times, had dinner one night, and it seemed like they were making nice. Do you sense carls not getting what he wants from tim cook right now . Its a hard question to answer, bill. Look, until carl gets the word from tim cook that says, carl, im willing to do the big buy back that you asked for, i think carls probably considering hes not getting what he wants. If hes been forced to send a second letter just as, you know, a dan lobe would send a secondle ette so sothebys, the activists dont get what they want, they continue to send the letters and press the case. I think carl osd our show, three, four weeks ago, that he intended to speak again with tim cook in a matter of three to four weeks or so. So, i think he continues to make the case. I think people would be surprised if tim cook, frankly, did another big buy back, bill. Whats he going to do with the money, scott . Were talking about tens of billions of cash on the balance sheet. Carl icahn wants to know where that money is going and where its going to be best traded, right . If its not a buy back, what do you do with that cash . Maybe do you some kind of acquisition. We know apple made some small acquisitions in the past. John skully, former ceo of apple, on halftime today suggested they should not do a bigger buy back. The cash would be better preserved in innovation or ebay, for example, using Current Technology the company has rolled out to get into more of a paymentstype business, ebay would play well into that. Thats the first time we had heard ebay thrown around. That was from skully. Nobody close with apple. Its a huge war chest lets bring in ron. We brought you in to react to Mark Spitznagel, but no 40 crash. Lets start there. Theres the response to that. He really is looking for a serious selloff in stocks. Im talking Mark Spitznagel, of course, but can you see a company like apple and google and momentum names go up and you when have part of the market go down 40 . Listen, you know, we know from Prior Experience that correlations go with listen, i love scotts reporting on all this stuff. You and i, weve been around for a long time maria, congratulations on 20 years here. Thank you. Bill and i go back to the mid80s when guys like carl icahn are generously called activist. They are doing this through social media and look what hes done with netflix. I mean well, Reed Hastings did it. He knows how to pick his spots. He identifies anunder valued company. Right now he feels apple is undervalued and tim cook is not doing enough to realize the value in this brand right now. People who are really worried about the undervaluation that apple is facing increasing competition, they could use that cash on more research and development, on this 56inch flat screen tv thats going to be an interface. They could do other thing wts money other than buy back shares. This is the nonsense we went through 30 years ago. I want tim cook running apple and hastings running netflix. I dont want carl icahn. This type of stuff to me, bill, borders on the activity we saw in the 80s that i think was somewhat unsavory. You wonder how tim cook would responsibility. He probably would have a different answer privately than publicly, i wouldnt know. I would guess. Listen, tim cook, i wouldnt be surprised if right now is trying to give carl icahn the heisman and push him away with the hand stretched out. You know, i think that he would probably agree with ron and others who would say thats not a strategy at this point to use a big chunk of that cash to do an even bigger buy back than theyve already announced. Maybe its better served keeping within the company. Maybe its better served reinvesting in the business. Maybe its better served going out to