Omaha. Class a stock up more than 11 so far this year and that, of course, outperforms the major averages. Our becky quick is live in the aforementioned omaha. Hi, becky. Tyler, thank you very much. Warren buffett is called the oracle of omaha for a reason, he made a lot of money for a lot of people. He had a gain of 24. 8 in shares of berkshire. That may not sound like a lot but it crushed the return on the s p 500. He built up millionaires over time and a lot of those people have loyalty to him. That doesnt mean every investment he makes is a winner. He is the first to admit he made a lot of mistakes. The winners start out looking like losers, too. The jury is still out on a stake hes been building up over the last 4 1 2 years, ibm. Right now it looks like a huge loser. He built up an will 8. 5 stake in the company itself and hes done that at the average price of 1 p 170 a share. For now, buffet is standing by ibm. We feel fine or we wouldnt own it. And we never sold a share of ibm. Periodically we buy more. Although were up fairly close to 10 . So we have not been an aggressive buyer. We have been a buyer and we never sold a share and its a company that has lots of tough competitors, one of them may show up here pretty soon in the studio, and it will always have competitors. We see them doing some interesting things. The competitors are doing interesting things, too. Overall, we like it. You know, i think we would i think i can safely say we would be much more likely to buy more in the next 12 or 24 months than we would be to sell shares. But we will make that call as the time goes along. Buffet also defended some of his other Core Holdings that underperformed over the last year. Take a look at shares of american express. That stock down 15 just over the last 52 weeks. Now he defended that stock, he said he still likes it, undervalued right now. Went on to say that if he didnt like the stock, if he felt there was a huge change, if he thought there was a different outcome that he saw down the road, he would sell the stocks. Even a lot of people say these are legacy stocks. You held on to them for a long time. Maybe you dont see whats out there. He said, no, if i saw a better place for the money, id sell the stocks and get out of them. When you look at berkshire, because its a corporate holding, because hes a long Term Investor and Massive Gains built up, there is a much higher bar than there might be for the average investor. You pay a 35 tax at the corporate level f we were to sell our cocacola, it is almost all profit. He would have roughly 65 cent dollars to buy anything else. And that means the case for switching has to be more compelling. We still do it. I mean, we sell stocks with very substantial Capital Gains taxes involved. But as obviously a factor. Buffet also staunchly defended cocacola even at a basis of criticism from shareholders over the weekend questioning whether or not this was a health risk for people drinking it. You heard bill ackman making comments about that. He pointed out staendihe standi this stock. He also took time to dole out praise for spectacular Business Leaders as far as hes concerned. Exhibit number one was jeff bez bezos. Overwhelmingly, hes taken things you and i were buying before and hes figured out a way to make us happier buying those products either by fast delivery or prices or whatever it may be. And thats remarkable when you think about it. You know, all this praise of bezos, that is something that Charlie Munger chimed in over the weekend and earlier on squawk box, too. He joked around because they lost a lot of money early in retail, you and Warren Buffett owned a department store, he said theyre not in position to lose more money to him now. Thank you so much. Good to see you. Lets dig in one more time on the big calls, amazon, gene munster has an overweight rating on amazon. Gene, you heard everything that Warren Buffett had to say. All those things may be true about jeff bezos z that make the stock a buy at this point considering the levels its trading at . I think its a buy because theyre not going to have much of any competition over the next decade. And theyre building the new model for retail. And specifically taking online as be inspect a aspect and going to same day, same hour. And then there is ews and continuing to invest. That is how businesses are are going to be run over the next decade. And so i think that this is a unique story. If you had a great concept and went to private equity or venture capital, it is almost impossible to get funded. The competition has to come from the slow moving existing retail partners. And they just havent got it together. Aws being the cloud service, correct . Thats right. Okay. What do you think . Youre a traditional retail guy. Once a retail executive. Warren buffett is bullish on jeff bezos. But what about the Actual Company . Are you bullish . Im very bullish on amazon as a company. Im never sure about the valuation. But when i look at amazon, i say theyre winning the game. They look like walmart looked 20 years ago. Theyre 3 of sales and gaining 40 or 26 or some number of all the new sales that go into retail. Im a prime amazon member. I shop for a living in brickandmortar stores, i dont buy anything except online. Im a huge fan of what amazon is doing. That doesnt change the fact that in the side of the business that is retail, they dont make any money. They put enormous pressure on all the rest of the retailing because of that. So i say all the time, amazon is the biggest threat to walmart as far as profitability goes. Walmart is the biggest threat to amazon as far as growth and the retail side goes. Im still a fan of walmart. I think walmart will do well. I like walmart right now at these prices. I do think they can be competitive with amazon. But do i think amazon is winning the game . Do i think in 13 1 2 years half the business we do will be done online where its 10 now . Yes, i do. Do i think there will be very little room for other kinds of retail at that point in time . I do. Doesnt mean i dont like walmart right now and what theyre doing. Theyre doing retailing 101 as well as it can be done. And theret biggest player online after amazon. Got it. The beautiful thing to me about amazon is that every time i use it, somehow or other it exceeds my expectations. I cant really say that about any other retailer i deal with. I say that every day. Amazon is never disappointing. Other retailing when you go to shop, there is disappointment. As long as they are never disappointing, the website is very sticky. They get what you want, when you want it at the price you want it. Its really hard to beat that as a traditional brickandmortar retailer. It doesnt mean there will be winners, there will be just a lot less of them. Where do you think its going . We have an will 800 target and its based on 17 times our 2017 numbers. These are big, long term secular theme thez have a pole position in. I think that this is going to continue to expand in terms of the market cap. All right. Good to see you. Gene and jan on amazon. Thank you. Well see jan in a little bit. Gene, jan i know. We hear from another big power player, folks, here on cnbc within the past hour for a full hour. Pershing squares bill ackman talking about valeant to the Hedge Fund Market to herbalife and coke and much more. A fascinating wideranging conversation. We began really got right into the valeant story. At the annual meeting of Berkshire Hathaway over the weekend in which bill ackman did atte attend. Charlie munger had some very harsh comments about valeant calling it a sewer. Warren buffett said the Business Model is flawed. I asked mr. Ackman to respond to that. Companys made some mistakes. I think where munger is wrong, its wrong to indict an entire company on the basis of a few mistakes and, you know, a leader that is no long we are the business now. Today was the first day that new ceo was on the job. Bill ackman having many poz things to say about where mr. Papa can take the business from now. Theyve been the poster child on the issue of price hikes. Lots of criticism bill ackman and the former ceo were on capitol hill answering questions about that very topic last week. In fact, i asked bl ackman if price rollbacks on some of those drugs was on the table and he said, yes, the board is considering that. Heres what he said about asset sales which some have speculated could happen at valeant to deal with the 30 billion in debt. The company has no plans to sell any crown jewel type assets. The only things that were considering are noncorps asset sales. And here there are assets in the company that have meaningful value that dont generate a lot of cash, perhaps lose money. You know, we bought a lot of assets over the time. In terms of core franchises of the business, these are not things were considering selling. Of course, we spent time talking about herbalife as well. 3 1 2 years after that initial investment, it still is 1 billion betting against herbalife. He still thinks theyll win that situation. Herbalife said maybe its time for bill ackman to just move on. We talked about the Hedge Fund Business which has been incredibly tough. Pershing is coming off the worst year ever. He thinks that activism is alive and well. So much interesting stuff in there interest from his very strong indictment of cocacola to herbalife. Let me linger there for a second. It sounds like he expects that bet of his to work out. If the government comes in and fundamentally dismantles the kpp . Its the only way kit work out. Its a binary thing. Either the government shuts it down or it doesnt. It could make herbalife pay a sizable fine of some sort or make further changes to the Business Model. Its unclear. All we know now according to my sources is that the negotiations between herbalife and the government are currently on going. Even as there has been some chatter that this whole thing could come to a resolution in the very near future whether thats weeks or months, we dont know. But it wouldnt surprise me. Incredible aboutface on pricing. He bought into valeant whether it was one kind of Business Model. We know what that Business Model was. An now to say in front of congress, you know, theyre going to rethink that and to tell you theyre going to roll back prices, that is a fundamental change from the original investment basis. He heard the criticism. I dont think there is anything like being called flovent congress and having to answer the questions. I think i dont know that he certainly didnt say it publicly. I dont think that he got all that he thought he was getting when he invested in valeant. He was very much attached to mike pierson, the Business Model they had at valeant. You justin to buy companies. And you acquire these drugs and you raise the prices. Maybe he knew what he was getting into. But certainly didnt really understand the full magnitude. He said in his annual letter some weeks ago he wished he had done more Due Diligence on valeant before making the investment. He clearly said on our program he wish he never made the investment in some respects. Maybe thing wobz different. Very quickly, you pressed him on the pay package for mr. Pierson. His answer did not sound con vi convincing to me. Thats a tough one. He was not involved. Bill ackman has been on the board for six weeks. Hes only been an investor for 13 months. It feels like hes been in that stock for 13 years and that hes been on the board for equally as long. But it certainly has raised eyebrows. When you look at a pay package of 140 that, includes the stock incentives force. It may not be worth that now. But when hes awarded that pay package at a time when shareholders were hurt so badly the stock today ar there abouts is down 80 from the high, it raises eyebrows as to whether that sort of pay package is acceptable or not. I asked him about the current pay package of joe papa who i said has taken the job as ceo. Today was the first day. He has a tremendous amount of potential stock awards at hand and some wonder whether hell need to be as aggressive as pierson was to try to reach some of those incentives. Big ackman says he will not. He is focused on the business at hand. Taking valeant forward from where it is now. He made that clear as day on the show just a few moments ago. Great stuff, scott. Might even change the name of valeant. Thats what he said. Scott, thank you very much. Just Getting Started here on power lunch. A bold call on jcpenney plus a historic moment in had a v in havana. First brian sullivan. Yeah, its been a huge day on cnbc today. We had Warren Buffett and bill ackman, after the break, john chen is going to join us. Well dive into their business and whether or not theyre benefiting from some of apples recent struggles. John chen coming up. Who do you work for . Your boss . Yourself . Your family . Our Financial Advisors are free to realize a plan to fit your familys unique needs. Well listen. Well talk. Well plan. Baird. At ally bank, no branches equals great rates. Its a fact. Kind of like bill splitting equals nitpicking. But i only had a salad. It was a buffalo chicken salad. Salad. Welcome back to power lunch. Im in Beverly Hills, california. We have the ceo of blackberry john chen us with. Thank you for joining us. Thank you. First off, your competitor, apple, bad quarter, first declining sales in apple. Any evidence youre picking up wins from former apple customers . No. I havent really seen that evidence yet. I wish i could. I think the whole high end market is softened. So do you view it as an industry issue or as an apple issue . I think its a little bit of both. I think mostly because of industry. Okay. So are you seeing this softening as well . Yeah. Last quarter we did see softening also. Our numbers are probably more steady pt we do see it though. So unfair to say then that apples quarter which, by the way, a lot of people would like to have a bad quarter like that, the number of phones they sold, is not attributable to blackberry taking share from them. I think that is a stretch. Id love to say it. Yeah. Its not true. Okay. Probably not true. In the last fiscal quarter, you had 27 corporate wins. Any indication that you are seeing more enterprise wins in part because of the good deal . Yes. That i see. We doubled our Software Revenue from a year ago. A lot of them has to do with both our own core businesses, especially with qnx auto driven cars and connected car world. That we see some good growth there. We see some good growth in mess enking. What growth do you see from the automobile side . It is rarely discussed with blackberry. We own a Company Called qnx. We have 60 million cars running out there with our software. And were expanding our reach there. You know, you have other components like entertainment systems. There was an advantage driver assist, vehicle communications. So it just expand. Today, a car is actually a software platform. Its no longer, you know, how many ccs and all that. So were very bullish. So you have said the word software three times. I dont think you said hardware. A lot of people wonder is blackberry finished as a hardware maker. Will you make hardware again . We have two new phones coming out between now and the end of the year. Any plan after those two . Absolutely. I think the key is could i get the business to make money . And im very close. I told that everybody um very close. Now if for some reason, youi hao my shareholders, for some reason, doesnt matter how hard i try, i couldnt get it there because of the Market Dynamics or whatever it might be, which i dont believe thats the case. I truly believe that were going to be a hardware business. So youre not getting out of hardware. Last question unrelated to blackberry, youre a board member of disney, our parent company. Just purchased dreamworks. Did disney look at making a bid for dreamworks . I cant comment on that. Thats not appropriate for Board Members to comment on. Thank you for asking me. Of course im going to ask you. I know youre going to try. What do you make of the deal . What does it do for pixar . I dont think it makes any difference whatsoever, personally. I think its really inappropriate for me to comment on anything about disney. I know this is doing extremely well, as you know. Theyre hitting the ball out of the ballpark and all the movies have done extremely well. Im sure youve seen all the numbers. So, you know, i dont think its a major impact of that. But what do i know, right . As a board member, probably a lot. You know i had to ask you. John chen, ceo of black berry. Well see you soon. Folks, we have a lot more coming up from the milken institute. We have the always outspoken Neil Ferguson of harvard. Hell join us and well ask about the possibility of a british it from exexit from eu. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Welcome back to power lunch. Rick santelli live on the floor of the cme group in chicago. Look at an intraday of ten. Compressed range. Trading 1. 84 to 1. 86. Its all about foreign exchange. Look at the dollar to index going back to january 2015. That is the last time the dollar index closed down here. Lets go one year further back in time. See how much runway we have. So you see the dollar index january of 14. Lots of room there. Lets flip it around and look at the same day for the euro versus the dollar. It looks like it is popping to the upside. That makes sense. Its part of the dollar index. Look at gold. Not exactly the same pattern. But it looks like its about trod clear the zone towards the 20 yard line, doesnt it . And last chart, the dollaryen. This is a bit different. This doesnt look like it has as much runway. The left side is flat. That might have run out of runway. Lets see how it cross spreads trade later in the session. Back to you. All right. Rick, thank you very much. A bullish call on jcpenney sending that stock higher today. Wha