Play and youtube. Do not miss our interview with a Theater Owner who screened the film. First the markets at record highs. S p 500 set for its 52nd closing high of the year. Will the rally continue into the new year . Joining us, hank smith at haver haverford trust. Do you expect this record to continue into 2015 . Yeah. We wrote about it last year and again we are writing expect pullbacks, expect corrections. They are a normal part of any bull market. We havent had a correction in 3 1 2 years technically speaking, a 10 decline. They should be shortlived and relatively shallow. Theres been lack of participation with retail investors. This is one of the most hated bull markets in history. People are now finally looking to enter the market and they are going to buy on the dips. Is that a good sign for the market . We were talking to a trader last hour who said when retail finally emerges, you want to sell. Thats a long process. It just doesnt happen overnight. This market is not cheap, but its not expensive. Its fairly valued and relative to Interest Rates and relative to inflation, could you make the case its attractively valued. People say markets are forward looking. You look at 2015. You could build a case that geopolitically its going to be more volatile. You still got me hank . Yelp. Markets are forward looking. 2015 you can build a case its going to be volatile geopolitically. Earnings are going to be slashed because of energy. Why wouldnt you want to sell here . The fact is the economy is finally gearing to a new level. We have been stubbornly stuck in this 2 world weve been complaining about the past five years. We are entering a 3 plus world. The economy has momentum. At the same time there is low risk of a recession out. Recessions kill bull markets. Not geopolitical events not politicians, its recessions. Theres very little likelihood of a recession out 18 to 24 months. When the fed does begin raising rates, lets remember fed policy will still be extraordinarily accommodative for a long period of time. What happens to rates in 2015 . There is this idea we might finally see that bull market in treasuries come to an end. Something predicted this year that never happened. If reits shoot higher could that be a barrier to the stock market running higher soon as rates spike up everyone says is this going to kill the rally . Right. Not only this year i mean last year, the year before the year before that. We have all in the Investment Community been predicting higher rates and all been wrong. I think the key is not if the rates go higher but how they go higher. If they go higher on a gradual basis within a range, markets can deal with that accept that and it will be viewed as healthy. It will be viewed as a reflection of a positive economy. If rates should spike dramatically, i think that is a sign of danger. We dont expect that to happen. What do you tell clients who say active managers are having one of their worst years in a decade . I would have been smarter to throw it in an index and right it all year long. Do you think active managers will have better performance in 2015 . Perhaps. I dont know. The most important determinant to an investors success is time invested in the market. Whether its an active manager or passive fund what gives you the greatest opportunity to be a longterm investor . That dictates investment success. Not whether you are a point ahead of the market or a point behind but how long are you an investor . Are you an investor 20 30 years . If you are not getting in and out of the market, but staying invested, you will be very successful. We are now looking at an alltime high in terms of intraday for the russell index of small caps. Its up less than 4 for 2013. Is that where you want to go small caps which lagged as we look toward a better u. S. Economic environment . Right. Small caps entering 2014 were a very overvalued asset class. This relative underperformance has improved the valuation picture. Yeah. You might want to take advantage of that. Another underperforming asset class has been emerging markets which look attractively priced. Europe continues to look from a valuation standpoint attractively valued. Hanks, thanks so much hank smith. You mentioned the russell. Maybe we can throw up a one year of the russell. The russell tried two times, three times if you go back late last year to top some of these levels. It has not been able to do it. 1213 now. Alltime intraday high for the russell. That has not happened since july 1st. Finally joining in the party. Besides the markets, retail today is one of the busiest shopping days of the year according to shopper track. Dom chou live from a mall in new jersey. Numbers starting to come. In. Thats right. People are starting to come in here more. A lot are coming here physically to use the gift cards they got. One of the big headlines weve seen already this Holiday Season is walmart is starting a Gift Card Exchange program with website card cash for consumers to bring some of those gift cards they may or may not use and exchange them for walmart gift cards. This is a pilot program. That agreement allows people to take a gift card from any one of these stores and turn it in for decent amount of value in terms of a walmart gift card. Spreads vary. The National Retail federation estimates 1 3 of all Holiday Shoppers were going to buy gift cards. Last year 163 in gift cards were purchased by every consumer. Gift cards are becoming more and more a part of the culture of christmas giving. When it comes to the Holiday Season thats when walmart steps in and does one of these programs. If you dont use that gift card you may be use it as walmart if you turn it in at card cash. I think that is very clever. How many times do you end up with gift cards you dont want . That you dont use. Pretty innovative. Financially its interesting. The spread at which they give you cards is different. If you have a starbucks gift card they may give you more cash value than for a gap or some more speciality apparel one. It depends on liquidity. Blackhawk network is the one cramer would be mentioning right now which had an amazing rub since october. Dom, gopro having a great run. 25 gain in a week. With no sign they will get a consumer drone. We talk about Consumer Electronics being one of those huge drivers for holiday sales. A lot of that stock price is appreciation off the lows we saw because they thought gopro hero 4 was going to be the musthave of the year. We havent gotten real indication whether or not that is going to come to fruition. A lot of analysts are saying if you can get some traction and show you can have a product in its next evolution or iteration, that could be a huge deal. People are starting to bid the stock up despite the fact more and more shares are available for people to sell. Interesting story to see. Well see what happens whether those sales will justify some of that valuation we see. People already nicknaming it the dronie that takes selfie pictures. Can you imagine . Its so the to be launched next year and could be just in time for the holidays. My wife bought one of our nephews a drone. I dont know if it can carry a gopro of that weight but its an interesting idea. A lot of people will try to make their own drones and attaching their own cameras to it. Are you going to hot topic or Spencer Gifts . What do you do . Listen this sweater, i mean you cant find this sweater just anywhere. Ive got to go trawling around. Im going to try to find a few more store hears. I bet his wife picked that out. I know her favorite color. You know too well. Yes, you are right. Dom chu talking retail for us today. How have their management skills translated to their stocks . Our boss of all segment coming up. After reporting Slower Growth facing increasing competition from facebooks instagram, twitter ceo has always been under pressure lately. Whats coming up for the social media giant . Bill george is former chair and ceo of medtronic, Harvard Business school professor, on the boards of goldman and exxon. Happy holidays. Good to be here. Correct me if im wrong. Youve been supportive of Marissa Meyer at yahoo. What is your take on how costalo is doing . I love twitter. Its a great broadcast medium to get things out on articles and leadership. His leadership has not provided. We talked a few weeks ago about larry paige and Mark Zuckerberg. Owe is not in the same class. They need that leadership. Its a great app but theyre stuck. What is lacking . Is this Monthly Average users . Is it ad loads . What has he fallen short on other than the stock price . Clearly, the year base is starting to slow down. Hes got an inflexible approach 140 characters. You can be more creative and open up more things. Advertising is hard to use and not very apparent. They are almost against advertising. I dont think they have a sound business model. The problem is they lost 175 million last quarter. Will lose almost as much as last year. They are losing 50 cents on the dollar. Their stock is down 50 . Facebook is up 50 . Its a question of leadership. Costello is not a product guy. He doesnt understand the way larry page or zuckerberg does. You need a new team at the top. Do you have any names you can throw out . Names in this space are scarce. I do think you need a product person on top like most of the Tech Companies and sound business person. Youve got to have product leadership. What costolo is doing, he keeps getting rid of his product developers. He brings in the next set of young guys that havent proven themselves. We need some get strength in there. They need to go outside and find someone. How vulnerable are they to being bought . I think they are vulnerable on activists. This is a Perfect Place for an activist to come in and put pressure on them. I think thats likely. They may wind up merging with someone. I love the app, i love twitter, but its not going where it needs to go. Since weve got you with expertise on corporate governance. How about sony . How have they been managing this tack attack crisis now that the movie has been out. Went out without a hitch in terms of showings on Christmas Day. What about how they handled this whole mess . Sony has a lot of management problems. Though have not had clarity. In this case they are being totally reactive to the north korean attack. I had a very indepth review of that attack. They left a lot of doors open into their i. T. Systems. Looks like attackers have been in there well over a year. Its not been well handled. They didnt counsel with the white house. Now its out and sonys got to get its mojo back. It, too, needs new leadership in japan and the u. S. Its a Great Company with a great heritage. I love the company. They sure lost their focus and sense of strategy. And their clarity of management. If you cant respond in a crisis, i think thats the real test. Finally on energy we know you work with exxon. Im not sure how much you can address specifically. What do you make of this environment and do you think it will be long lasting . I think we have a clear supply demand imbalance. The u. S. Producers. The cash cost taking oil out of the ground is not high. Its where you have to explore more. Probably some exploration will come off here and around the world. Theres a lot of production in the u. S. That will continue. Saudis arent blinking. Youll see real geopolitical shifts harm being done to russia, iran and venezuela. That is going to continue for who can predict the price of oil . Its going to continue for a while. The strong get stronger. A company like exxon, this will make them more efficient. This will weed out marginal players. Exxon is conservative. And some of the International OilCompanies Like chevron and conoco. Incredible. Saudis resolve, big story today how they are not changing their budget in the wake of these prices. What happens in russia. Putin has taken the hard line trying to convince his people this is all about the u. S. This is going to mean big changes around the world. I dont understand why we cant export liquid natural gas to the germans. We need free markets. That would make everything better. Whether this is strengthening the u. S. Position helping u. S. Consumers. Its got to be good for the u. S. Economy. If people dont have a good economy, they are going to suffer. Bill, thanks so much for the time. Thanks having me back on the show. Very good to talk to you. On that note wti is now lower, 59. 69. We are watching the price of natural gas. Warm weather hurting nat gas as prices dip below 3 this morning. How should you play the commodity space next year . Lly has no hidden fees on savings accounts . Thats right. Its just that im worried about you know hidden things. Ok, whys that . No hidden fees from the bank where no branches equals great rates. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. Shes still the one for you. And cialis for daily use helps you be Ready Anytime the moment is right. Cialis is also the only daily ed tablet approved to treat symptoms of bph like needing to go frequently. 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Is a world leader in reducing co2 emissions. Take the energy quiz round 2. Energy lives here. As 2014 draws to a close, cnbc is trying to find ways to make money in the coming year. This hour its commodities. Heres kate kelly. 2014 was a wild year in commodities, and for many people, not in a good way. A confluence of cyclical changes, dry weather and geo politics led to big disparities in the asset class. 2015 wont provide much relief there. Here are three predictions. First, coffee goes higher. With a prolonged drought in brazil and nasty fungus affecting crops in central america, some key producers are handicapped at the moment and have been for some time. Coffee was one of the biggest movers rising more than 50 . That streak is likely to continue. Second super cheap oil. American drillers havent gotten the opec member and the two groups are in a stare down as to who will cut proddics first. Oil will trade in the 50 or 40 range with no obvious floor. As one trade other puts it people need to stop thinking of this commodity like a stock with technicals. In other words there is nothing to stop it from falling way down. Third, gold skids further. With a bullish november jobs report growing usgdp and federate hike expected we are emerging from the financial crisis finally. Gold will have the losses to show it. Look at the yellow metal to flirt with the 1,000 range some point in the coming year. We are watching the price of natural gas dipping below 3. Lets bring in Bertha Coombs at the nymex to talk more about this sharp slide. We were on the east coast yesterday, short sleeves for christmas. That is not what you expect this time of year with warm temperatures, nat gas under pressure falling below 3 the first time in two years. The president of Chicago Energy trades nat gas here. Thanks for joining us peter. We are seeing sub 3 nat gas here. Not a surprise to that many people. Not at all. Because of the short term weather we have here looking very mild and with marcellus gas the first time in a long time trading underneath the dollar. It looks as though there is going to be a lot of pressure on the market. A lot of it as we are seeing with oil, as well. Marcellus shale, its the shale gas production. Last year this time we actually had more in storage. We had a smaller deficit. Then when we had all that cold suddenly hit us in the winter we saw prices spike to 640. Do we have the makings for that . Last year was unprecedented. We only got up to 6. 50 without the north american shale gas, we would have been 12, in the old days. As you put on your crystal ball look into your crystal ball for 2015, absent a really bad winter like that could we see really cheap gas . What does that mean for production . What you need to look at you look at the weekly charts and monthly charts. It looks Like Crude Oil did when it started its descent. With that being said people are very short the front end of the market because of what we see with weather and what we see with supply. All of a sudden today, we had december 2015 being weak while the front of the board was up. What does that tell me . That says to me theres a lot of shorts in the front for good reason. You always have to remember this is natural gas. With people being very short because of what they see, if we have any sort of weather, you can see a quick pop in it. Its very doubtful right now. Thanks for joining us. Certainly, if you are heat your home with natural gas or even heating oil, so far this winter you are really seeing a very nice trade and lower prices. Back to you. Thank you, Bertha Coombs. When we come back the interview that sparked that cyber attack available in 331 theaters. How did it do on its first day . Well talk to a Theater Owner who screened the controversial movie. Elon musk tweeting this over christmas. 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