The roadmap begins with the markets looking to recover after logging their worst february start since 1982 for the dow and for the s p. Michael kors trounces estimates while jcpenney reports its first quarterly samestore beat in years. The parent of kfc, pizza hut and taco bell adds its recovering from the lingering fallout of food safety concerns in china. And apple is reported lie by the wall street journal and quietly laying the groundwork for a vast internet infrastructure capable of delivering a lot of data and content to consumer. The dow tumbled 326 yesterday and growing concerns of a weaker u. S. Economy surrounding emerging market worries and the nikkei down 42 overnight and the worst loss in nearly six months. That index is down i think 15 for the year to date, jim. Rough, rough. Terrible. When i see adella, your man might be in there. Your man, no one knows him very well. Exactly. Were out of data. Weve had nothing but notsogreat data. Its going to snowstorm tonight and this weekend. How long can you go down on the same data. We can go down on japan and japan can go down on japan and then we can go down on japan and japan could have a sudden breakdown because of us. You kind of get into that circle thing and what im waiting for is new data, fridays weak, i dont think anybody thinks it could be strong. Im not excited about the market. I think were oversold. The s p oscillator is minus six, at my Old Hedge Fund i never shorted when it was minus five, its only worked between 2007 and 2009 on a consistent basis and i dont think were in that era, 2007 and 2009. There was this bleak end of the year and a lot of complacency and earnings werent that good and sentiments bid against you and valuation not that great. And im in the sure, a, its correct and im hearing a lot of people or investors saying i see value now. Earnings, by the way, 72 versus 67 usually they came out better than expected. Its a game but they all play it and it wasnt bad. Previous guest was saying its a stock pickers market. Its so not a stock pickers market its just the s p. I think it will be, but the companies i follow had great numbers they went down almost the exact same percentage as the companies that had bad numbers. Now, if we calm down those stocks will start being bought. But, you know, what, this is a pause that doesnt refresh . You mentioned microsoft, jim, and, in fact, they have named Satya Nadella as ceo and John Thompson is being named the chairman of the board of directors. Very controversial. A lot of people want everybody gone from that board of directors in order to really get a clean start. They had a chairman whose name was bill gates. And that is no longer going to be the case i guess. Right. Havent seen the release as yet. These are flashes now on dow jones. But kara swisher repeatedly on our air yesterday said today was the day wed get announcement. Nadella was executive Vice President of cloud and enterprise, a Sun Microsystems veteran who joined microsoft back in 92 and as a result people have argued this is the safe choice. Theres a graphic in business week this week that has a coffee cup with the microsoft logo and says worlds worst job because of the challenges they have. Structurally. The decisions very Big Decisions that have been made lately as balmers left. Guy who plows snow has the worlds worst job, if the rich are unhappy, its their own fault which lenin, my great, great, uncle is spot on. This is a great job if you want to break the company up, it could be worth a lot of piece ofs. Do you know what i want to see, i want to see what value act does. Value act is a part of this decision already having a member on that board. And i think has been very much involved, so youll see from here in terms of whether he reflects a new strategy in some way. That takes into account their view of the company which is much more focused on the corporate side as opposed to the consumer offerings perhaps. Right. Although what ive read about nadella is he believes they both belong together the idea of separating out is not something he embraces according to the reporting of others. I dont know that. One wrinkle gates, the company says, will devote more time to the company, supporting nadella in shaping technology and product direction. The notion that gates is simply going away, apparently not true. I dont know. Geez, you want the deck really shuffled here. The company has just missed social. They missed mobile. They missed cloud other than this gentleman. And i mean, you look at the rise of the salesforce. Coms and you recognize this is a company that needs a fundamental change in its orientation. And the fact that bill gates, look, hes a genius, but the fact is that you need to reshuffle the deck here. I mean, they got to start catching one of these moves. You said the last quarter was a great quarter. Last quarter was good. Great to build off of. I just want fresh faces. Because i need you need, you need people this gentleman is from the division that has really come on strong. But you need people to reevaluate. Is everything really right there. I mean, does everything belong. We have seen this shrink to grow you know, let me just analogize to other great companies. Looking to Oil Companies and they all say almost universally, we should Stay Together and keep together, microsoft, we should keep together. Is that really right . Some of these companies have been at the same prices for years. I think its terrific that they have stability but to think there isnt value to unlocking microsoft, holy cow. I think theres a belief there is. Theres an idea that the company has become a bureaucracy becoming larger and larger in bellevue, washington. Its enterprise thats the story and its the business division, its i totally agree how much more they can accomplish there and compound annual growth rates that can be obtained there. I dont know that mr. Nadella this process didnt go as well as they might have hoped. Maybe mulally, people could argue whether that would have been a good thing or not. They spent nearly half a year on this process. They really did and they end up with somebody who has been at the Company Since 1992. But a good division. Cloud is something they kind of caught. And theyre trying to do mobile. I bumped into a guy at my College Reunion who had a microsoft phone. Really . Oh, yeah, the guy that runs the company or used to. Steve was in my class. Every time we have a conversation about them we tend to come back to amy hood, the cfo. I love her. Who more and who are is being talked about as a bridge during this transition. Please dont make her leave. Thats one of the reasons why i love the Conference Call. Amy hood speaks english. She really gets it. She is so important. If she goes, wow. Real bad. Nobodys saying thats the case, though. I just, sometimes when youre ceo you want to name your own cfo. But she is a breath of frommer air on that Conference Call. That is true. Do we have any i have not seen a release of yet. Do we have any microsoft issued it on twitter. Not even a release per se from the company. This idea that youre still going to have gates and balmer on the board. I dont want that. Thats got to be difficult. Thats what im saying. I just want to see it. Microsoft, i see it on twitter. Why didnt you just buy twitter, bozos, geez, you could have owned social. You notice twitter goes up every day and when they report, it doesnt matter. I love it i love that twitter quarter it hasnt come out yet, okay, i still love it. Nadella, by the way, will be the third ceo in the history of the company. And we, again, to revisit the past quarter they beat by a dime. Revenue was good. Surface revenue doubled quarter or year on year. Right. A good quarter. And offset what they saw the first pc decline for the holiday period in about five years. A lot of headwinds but a lot of execution things appear to be going right. Whats funny, a little contrast here, you ahave arm holds the semiconductor of the future. Stumbling today. There could be a reshuffling going on here. I dont think pcs are as bad as they were. Xbox was fantastic and you just do not get any value for xbox within the embedded microsoft. It just cant move the needle. So, would you like to see xbox spun off . I would love to have an Entertainment Company that is xbox and skype. I would love that piece of paper. That could be a piece of paper where you could really see some money going that way. I mean, xbox had a great quarter. What would you do with nokia . Thats a tough one. Dont put me on the spot like that. I dont that was a good deal for nokia. Yes. You got 3 market share in windows phones. Not where you want to be right now at least. I mean, maybe theres a vision. You got a little vision going over there . It will be interesting to see with the third leader in the history of this Great American company with 84 billion in cash, by the way. That never hurts. The first thing i would do is move back into seattle. Move back into actual seattle. Get some brains going this. Gates and balmer will both be on the board of directors so thats got to be a tiny difficult trying to save the world. But why keep balmer on the board . I dont know. It makes no sense to me. I think is when ballmer should go do big things. A big thing doer in the wizard of oz a good deed doer. Yes, e pluribus unum. Apparently gates is saying theres no better person in his words to lead microsoft than Satya Nadella and they are crowing about the number of board numbers who will be independent, seven of the ten on the board will be independent. Thats good, you know, especially if theyre smart. Right . We will see. If theyre independent and actually good. I like both combo. I mean, we have a lot of Board Members who are independent. And but theyre not tough. I mean, thats what you really want. Jim stewart had this really great piece this weekend about jamie dimon and who was tough on the pay package, a lot of people didnt like the pay package because it didnt justify his salary but independent Board Members you have to admit were heavyweight in that thing. Yeah. Lee random. Hes not owned by anybody. And this is a decent board at microsoft, and you are an incoming ceo and youve been there a long period of time and you worked with mr. Ballmer and mr. Gates and they are still on the board of directors, it will be interesting to see how mr. Nadella does. We sat here before and doubted whether you would see significant change of a ceo that came up through the ranks and yet, that in fact happens. Bob iger at disney. Thats a very good point. Nadella reminds her of iger when he took disney from eisner and he ended up doing very big things. Big. Very strong ideas of what needs to be done. Ill never forget iger coming out of the box with the pixar acquisition and never looked back. And the Cloud Division is the one part of the company that has got the thesis of where americas going. Again, social media is so powerful. Look at facebook. Dont you think they just sit there and say ten years later, look, we were in harvard, you know, class of 77 and these new guys came in and they just, like, smoked us. Maybe nadella who admits its a humbling day for him, can make it so that they regain their you know, get into social. Get into social. Because social is so much the future. Heres an email from nadella to employees on his first day as ceo. He writes, while we have seen Great Success were hungry to do more. Our industry does not respect tradition. It only respects innovation. This is a critical time for the industry and microsoft, make no mistake we are headed for greater places. That answers some questions about who he is, 46 years old. 3 kids. Why hes here. Young guy. And what do we do next. He quotes s on car oscar wi. Maybe hes an intellectual. Microsoft may have been the most squandered company of our era, they had it all. Ibm did not have it all. Microsoft had it all. They never recovered from the justice departments foray into their company. Lets not forget its a 300 billion market value deposit and it generates enormous amount of cash and eight of ten computers run its window software. Were in the stock market, right . Thats what we do. We look at companies that make viewers money. They need to make viewers more money. They havent done terribly and theyve paid some good dividends. Right, they returned some capital. I think the company is worth 50 bucks, going over with rick sherlin, the company has such great opportunity if they just take over some of these areas where the facebooks of the world which have made you a lot of money and turns 10 years old today. I think thats important and the stock is not done going up. Its still cheap. I think microsofts inexpensive but it deserves to be a little bit higher but facebook i could say could be much higher because of the earnings momentum. Family, curiosity and hunger for knowledge define me says mr. Nadella. Thought it was describing me or carl or you. Well take a quick break. Family and houses. Well get to all the names we havent mentioned yet, michael kors and yum brands and the markets at large and more coverage of microsofts new ceo Satya Nadella in just a minute. [ male announcer ] here at optionsxpress, our clients really seem to appreciate our powerful, easytouse platform. No, thank you. We know youre always looking for the best fill price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. Hey ray, my uncle wanted to say thanks for idea hub. O well tell him i said youre welcome. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. Yea, and these ideas are across the board bullish, bearish and neutral. I think you need a bigger desk, pal. Another one . Traders love our trading patterns, now with options patterns. Whats not to love . They see what others are trading like the days top 10 options trades by volume and get ideas yea i have an idea how about trading that in for a salad . [ male announcer ] so come trade at the place thats all about options and futures. Optionsxpress. Open an account today and get a 150 amazon. Com gift card when you call 18882800154 now. Optionsxpress by charles schwab. If youre just joining us this morning microsoft has named their third ceo since basically the founding of the company back in 1975. His name is Satya Nadella previously in charge of cloud and enterprise. Had been really considered a long shot in the early going of this search. And then suddenly found his legs in the last few weeks has been considered almost the de facto successor to Steve Ballmer who back in august said he was going to leave. No surprises there. I do think that there were remember that period there was a surprise when he said it. Out of nowhere. But one of the things i thought was incredible we joked about this, like, peoples names are being selected, like, you know, it was like when you had at the beginning of a primary, oh, i think that, you know, soandso the senator from kentucky, i mean, there were people who had nothing to do with microsoft whose names popped up. I wondered what was that committee like, the search committee. I dont know. I know that there were a number of candidates but it quickly wound its way down to, i mean, after mulally sort of it was thrown off early. Thompson was thought about. Yeah, mulally obviously there was a dalliance with for some time. Donahoe. Briefly. And then it was down to nadella and another overseas candidate from what i understood. Right, okay. And they had gone the board had gone through a number of different meetings. Needed to see the other candidate more closely. And clearly made its decision. Love to get a little bit more background on how they came to this. But nadellas name had been in there from early on although not perhaps given quite as much credence early on in the process being that hes a microsoft man through and through. Wouldnt it be someone if they picked someone from google . Because they lost search, too. Remember, they owned search once. They owned search. Kind of like the u. S. Army in china, who lost search. Who lost mobile. Who lost social. Well, i mean, the team. And if they put someone from google bringing an outsider in a company this large and this with so many can you really expect to move them in a significant way or does it just creating enormous conflict . That nadella knew the political dynamics between units and where the bodies were buried and having to learn a lot of that would have taken a newcomer a long, long time. Look at the spawn of ge and mcnerney, a guy like that suddenly hes running bow. He shakes up boeing and makes boeing into a great new american company. The toughest guys in the world, they can come in and do things. Its no different from an nfl team, frankly, you have these culture that are terrible and then you bring in a coach and he decides, im getting rid of a lot of the players and im bringing in others. Pete carroll, three years, bingo. You can do it. You can do it. You can change a culture. I really believe that. Marissa mayer is trying to change a culture, thats a very tough thing. But you can bring people in from the outside and change cultures. U. S. Army changed cultures in 1940 in time. Remember, the Defense Department was a was a ship. A giant navy. General marshall came in and said, you know, we ought to go with airplanes. There are guys you could bring in and they can change a cult e culture. Thats true. Does today make you feel any different from a Charitable Trust point . Do you make a directional move on this stock . I would need more info. I never chase an up market. We were buying some stuff yesterday into the down 300. We looked smart but, you know, it was smart. I think you still you have this employment number on friday. We dont have enough data. The datas corrupt. I sit here and i think, okay, well, new home sales, is anyone shopping for a new home . Again, we have one nice day and it was the super bowl where no one in the country did anything other than watch the super bowl. Close the restaurants. The most watched Television Program in the history of the world. Another moment where the country did nothing, right . They just did nothing. Its our one National Holiday in a real sense where we actually participate in the same activity. Thanks