Welcome to power lunch. Im tyler matheson. Mandy has the day off. The biggest names in business are on the network all day with all kinds of actionable ideas for investors like you. Ackman just in the last hour. David einhorn and the list is very long. We wont go through it all right here. One of the investors making Pioneer Resources fall like a stone. See why and see what other stocks these folks are moving. Big change at cisco. John chambers leaving as many expected this summer. We will introduce you to the new ceo and tell you what you need to know. That stock cisco is up about 27 1 2 over the past year. Can the new person in charge take it to the next level. Mannedy is off today, but kayla is with us and we will get downtown in a minute. We start with a slew of investing titans as i mentioned on cnbc. Warren buffett with our becky quick following Berkshire Hathaways meeting in omaha, nebraska. Wide ranging from the stocks he is buying to market valuations overall and becky is with us from home ha. Hi becky. Good afternoon, everybody. Why dont we start with what buffett is buying or what he has been buying recently. He told us that he had been buying more shares of ibm in the First Quarter. That will be public soon. There will be plenty of naysayers to plow into ibm. Buffett likes to look at things over the long haul and he likes what he sees. Ten years from now they will be earning more money than they are now. Our percentage ownership will be up and i think we will make considerable moanney. Thats my best estimate. I felt that way when we started buying a few years ago. We have 165 million or Something Like that. 985 million shares out now and the interest has gone up by 15 or so percent without us laying out a dime. Of course Everyone Wants to know what he thinks about the market overall. He is reluctant to talk about the market on a day to day basis, a month to month or even a year year basis. He called the market top or bottom. The market bottom you can think about what happened in late 2008 when he started advising people to buy american stocks because he was. Dont forget what he called near the top of the dotcom bubble and started warning people that there was not all that there. Right now things are americamurkier because it depends on Interest Rates. The market against normal Interest Rates is on the high side of valuation. Not dangerously high, but on the high side. If these Interest Rates were to continue, stocks would be extremely cheap now. One thing you can say is stocks are cheaper than bonds. Of course that is the 64 trillion question. What will happen to Interest Rates. That is too tough to call. He has been wrong very recently about this over the last several years. Rates have stayed lower far longer than he expected. Back to you. Becky, we will neat your debate when this heats up. From omaha, becky quick. We heard Warren Buffett defend his strategy for ibm and cocacola. What he calls the big four. What other names should you be watching. Our chief investment strategist was at the Shareholder Meeting and david katz joins us as well. The chief Investment Officer with matrix asset advisers. Good to see both of you today. I want to talk about the big four. The strategy of doubling down and ibm adding more shares in a company that was the under performer and the out come looks unclear. It is a big dividend play with the hike last week. How do you see an investment like that and should they replicate what buffett is doing . I think buffett explained it very well and even becky was talking about it. He is interested in five to ten years from now and i think he has gotten more comfortable with ibm in the sense that its much more of a Services Play than ultra High Technology play. That gives him the feeling that it is a durable franchise and certainly has a history of being a durable fortune chiz and he talked about that at the meeting that it is dealt with all sorts of changes in terms of what it is focused on over the years and done as everyone knows a phenomenal job and they will do it again. I have no reason to doubt that side of things. David, as derrek shirtberkshire hathaway has gotten bigger, he needs to make an impact at the company level. He has invested in the big global conglomeratetype companies. With the economy as delicate as it is right now, i wonder if there words of caution on where to look in this environment. We think again buffett has that longer time with two to four to five years and longer. We think the Global Economy is fine. If you look at the bigger Holdings Wells Fargo is in the sweet spot. They had a good quarter. The outlook was very good and if they raise rates, wells fargo should do well. They might be able to buy ge assets and we like wells and American Express and even though its a Global Company at a great price with longer term trends. Talk about that outlook for American Express. Its had a bruising start to the year with the dropping of the costco agreement as well as judicial decisions. I wonder how long you think it will take for the tide to turn. I will throw it to david since you mentioned that company. We think that the tide turns with the stock over the next to nine months and we think that happens on a six to 18month basis. We think American Express has done all the right things bringing the costco deal to a head and start grow earnings next year. Its not a broken franchise and generally when you have been able to buy it you have done quite well. We owned it for a long time last year at the 90 level. We were scaling back. We are now adding to it. Final word before we go . Its the thought of good investors have the emotional stability. The ability to as we were just talking about, taking advantage of times when the rest of the world disagrees with the longterm possibility of a franchise. If thats a good take away for everybody. Go to power lunch. Cnbc. Com. One of the titans of silicon valley. He will step down in july. Cisco stock has been hovering around the 30 range for roughly a decade. What are the challenges facing the new ceo set to take over. Josh lipton live from the San Francisco bureau in one market plaza. Tyler he is the man in charge of ciscos worldwide operations responsible for nearly 50 billion in annual sales. Now Chuck Robbins will be in charge of the entire company. They announced that the board had appointed him effective july 26th. John chambers will assume the role of chairman and serve as the chairman of ciscos board. They served since 1995. Under his watch the stock is up nearly 1500 in the past five years. It has dramatically under performed in the market. Rob ups is a 17year veteran of cisco and respected reinvent the organization and is also the key architect for the commercial business segment that should grow 8 year over year. Mark sue said picking robbins was a smart move. Cisco is facing a range of competitive threats on a number of fronts. Juniper is switching in palo alto networks. They are saying sue needed an insider who understands the culture and can steer the giant through this networking giant with a steady hand. Cisco up about 30 in the last 12 months. Can robbins keep the momentum going . They can can have a better sense when they report Earnings Results next week. Back to you. We will be looking forward to having John Chambers to get more on that succession plan. Stocks are extending fridays rally and having the best twoday gain since early february. Utilities and health care leading todays gain. You can see the dow is below that level. They had touched the all time closing high. Lets get a little bit of a better look on the trading action from bob pisani. We were at 21. 1617. A nice day. 21 declining and a slow droop to the downside. We need to get over 21. 1718 and that would be a high. He noted the buy backs have been very, very strong and could continue here. 337 billion in buy backs. Is that a lot this year . The stock market value is about 27 trillion. Its about 1. 5 . Thats a lot actually. He did point out that the buy back is now ending and that may be the catalyst to get us to new highs. Health care and financials materials and energy which have been the big market leaders are lagging here. Look at the commodity etfs. They had big movers. Metals and mining and base metals and a lot of people are saying this is a sign that the Global Economy may not be as sicka as people think. Its impressive to have metals be the market leaders. Bob pisani here on the floor. Tyler, over to you. We will go to nasdaq and Bertha Coombs is there. Health care and financials is the theme for technology. Infrastructure spending help the revenues with top expectations with boosting the outlook. The company took over and that was part of the reason they saw a surge when it came to health it infrastructure. In Health Care Biotech is rebounding as well. They moved into correctional territory for the high. They are coming off of there and led by exact sciences. They had a blowout quarter in part on testing kit sales. Also isis in a sharing of licensing with buyer of ag. Apple is once again dragging here today. Down for the fourth and fifth days. Its above its moving average, it continues to be a drag. Back to you. Bertha coombs at the nasdaq. Its one of the longest bull markets on record but there might be troubling signs emerging right now. Check out this chart of oil. Crude flirting with 60. Right now it is just near that mark. We havent hit that point. Prices soaring 20 in the last month. 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And we know you love them too. Welcome back to power lunch with a check on the oil fracking stocks moving on the heels of comments made by David Einhorn. He said they can contaminate oil returns. You see the resources and all of those moving to the downside here. Also shares of csx are down on the heels of Hedge Fund Manager bill ackman making comments that he is not going to be talking about this rail company during his presentation at the conference as well. Then Barry Rosenstein said the future continues to be bright for walgreens and turned to qualcomm shares saying they are undervalued undervalued. Both of those we knew he was involved in, but reiterating for the record Barry Rosenstein. A lot of those big names ai couple of which he just mention said are making headlines and moving stocks. Lets go back to scott who is live where all of those big names seem to be. The conference in new york. He has Keith Meister of corvex capital and he just got off the stage. Keith literally just walked off the stage after his presentation about the brandts which we knew it would be. What case did you make this that room . Hopefully what we highlighted is yum brandts, a phenomenal business with three brands with a wellmanaged company. Over the last couple of years, they have been hit by footrelated safety issues that caused them to under earn in china. They are in process of fixing the issues and the fkc and pizza hut brandts are the most recognized in china and the business will recover and have limitless growth tied to the emerging middle class. With the effects of the last few years highlight, its different being an owner of brands globally and versus operating restaurants in china. It doesnt mean is good and one is bad, but they are both great. We hope to engage to show how by separating china coand entering into an agreement, yum can have themselves positioned to learn from the recent past and excel for the decades to come. You want a spin off of the Chinese Business. Yes. But the change in Corporate Structure allows you to change capital structure and being more fortune franchiseheavy. The reason they have a mix today and 95 plus is because they own that. They dont have a mature market. By franchising it to themselves they get the best of both worlds. They have the best team and their Management Team managing the business in china and managing the Franchise Agreement and young china becomes a more Chinese Business that can grow better in china for the next decade. Franchise co has a great model while still having exposure to growth from china. Huh an Interested Party in the back of the room. Dan with a third point who also owns the stock with a significant position. He told me that you crushed it. It appears at least you guys are on the same page. Did you guys meet in a taco bell or kfc and come up with the idea . I would love to have but we didnt. We never spoke about yum. We had the same idea at a similar time. We had a lot of respect over the last 20 years. It is almost without equals. We havent talked about the idea, but they see many of the same things we do. We are thrilled to have smart owners and thrilled to debate ideas. Its our view from the open and Free Exchange of ideas whats going to happen. The company can have a chance to adopt the best going forward. This is a wellmanaged business looking to hear ideas and make the appropriate responses. It was notable that in the investor letter that dan sent out, he didnt mention a china spin off. Did you take anything from that . As i said i havent spoke tone dan. What we want to focus on we stood off at a Charity Conference and presented yum. We thought highlighting the ideas, focusing on our ideas and not having the sell or the buy side and showing a strong value and helping to frame the debate. If we can learn from them fantastic. You supportive of the ceo. We look forward to continuing those. The investor who has been in this stock they have been over a year the stocks up 27 over the last year. Its up 20 something percent. Yum is a great business. We think a great business can be better. Our presentation was called think moss. Think bigger. The companys logo is live moss. They have an algo rhythm of 10 growth per year. Thats great. But by changing the Corporate Structure and letting it follow they can grow at 20 . We are big believers and when you get dealt a great hand making the most of it. Lets turn a triple into a home run. Did the earnings show you they are on the track to do that . We found the recent Earnings Release encouraging. The key to yum is fixing and growing china. The Second Quarter showed that they made great progress on that and they turned a corner. We praise them for finding 400 or 500 basis points of operating. When the business does recovery which it will and get back to the unit revenues they had in 2012. The margins would be higher and at least 2 of earnings that can come with fixing china. The separation is not because china is not a great business and franchise is a great business. They are better separate. We will continue to have a relationship that is symbiotic. You are the second largest shareholder . We are one of the five largest. Appreciate you sitting down with us today. Back to you. Stocks meaching higher today. The bull market one of the longest on record without a 10 record. Six years and counting with troubling signs emerging and the worlds smallest violins. Why the wealthy are getting more and more stressed out the richer and richer they get. Especially the millennial. Power lunch is back in two. Being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. All up today after rbc rated the four clothing retailers without perform ratings in the new coverage. Goldman sacks is reportedly in talks to sell the coal mines in columbia at a loss. This would end the Raw Materials productions. Coal prices dropped more than 50 since 2011. Bank of america is planning to let shareholders weigh in on whether the ceo should be the chairman as well. The board overturned a post financial crisis rule requiring they be held by separate people. Bank of america up by 1. 5 . That vote wont happen before wednesdays meeting, but it will happen before next years. Thank you very much. Lets go out to the bond market. Rick santelli where he usually is tracking the action at the cme. Rick . Good afternoon, tyler. If you look at an interday of tens, slightly elevated. What i find i