collaborative fund, an early facebook investor. all right. so there are four kinds of investors viewing for a cut of this ipo. early stage investors like craig, they got involved a long time ago. institutional investors, the people who will buy it before it goes public, high net worth retail investors, relatively rich people who trade often, and then there's everybody else, the average joe retail investor. that's likely most of you out there. starting with ned i want to go one at a time. ned, good to see you, my friend. we'll talk later about whether one should or shouldn't buy this. what do you think a retail investor who gets opt their trading platform at 9:00 on friday will be likely to pay for facebook when it opens? >> you know, you said $90 a share, i said a 50% premium. this is one of those situations depends how much stock -- by the way, craig, i want to congratulate you. this is incredible. you must be waiting for next friday. as a retail investor i wouldn't approach the stock on friday or the next monday, tuesday, or wednesday. i wouldn't go near it. would not go near it. >> you think $50 bucks somebody gets it, 50% premium? >> 50, $60, $6 billion in flow. that's what's it's going to trade. i wouldn't be surprised trades three times in the day. >> ned sis 60, do you buy it on the first day. ned says no. ned, what do you think that does in a year? take a guess. where do you think it goes? >> i think it will be lower? i think it will be lower than the highest price we see next friday. without going into the fundamentals, it's just another new kid on the block that eventually will burn investors and the prices and new offerings and ipos are absolutely ludicrous. look at linked in and the others. they are selling a little higher than the original but a lot haven't. if you look at the history of ipos, it's not been a good bet to go out and buy particularly in the opening day. >> interesting conversation, ned. you and i don't usually talk about stocks you don't like too much. come into this discussion. what do you think it opens at. what do you think somebody gets to buy the stock at at 9:00 on friday. >> i think more in the 70, 75 range when it opens. i think it's going to trade somewhere in that neighborhood all day, maybe it ticks up from there. i have to agree with ned, that's a tough to buy on the first trading day. >> no on one as well. where in a year? i remind viewers, google was almost double, triple a year from the date. >> that's a good question. it's going to depend on a couple of factors. the two factors i'm going to look at. how are they going to monetize the business. everyone knows it's a cool company, the subscribers, what are the market conditions. if the market is doing well, monetize, sell ad revenue, i think the stock can go higher electric there. >> your guess is higher under normal conditions. a good point, markets do have something to do with this. it may not be just about facebook. craig, you're one of the early stage investors, venture capitalist, you get involved in startup companies, some which do very well, return your money, some don't do well. you're hoping for the big one. what do you think somebody buys it out on friday. >> in it's going to come out strong on the gate, my hunch is $48, 50, i'm not sure it's going to shoot up. the valuation, even where it's pricing at, it's fairly rich, but i think it's warranted. >> so ask you the question whether one should buy or not is a tricky question. you were an early investor. you've got facebook stock. if you weren't you and it came out at 50 bucks, would you put an order in. >> to clarify, i would buy regardless on day one. in fact, i learned a lesson with google's ipo, it felt rich coming out in the '80s. i thought, you know, i'm going to hold off. >> your general view -- this is a key point for our viewers. you may still be able to invest in the stock. it may not be important you invest at 9:00 on day one. >> absolutely. absolutely. >> did you say you would -- you said it felt rich. you're saying you would or wouldn't buy on day one. >> i would buy on day one. >> let's change that to a yes. there we go. all right. i would say the answer to that suggests that in a year you think the stock is going to be higher than it should be, that it came out at. >> yes. i think for sure over the long hall, they are a team to bet on. the executive team there and touching nearly a billion people is extremely powerful. and he's absolutely right, if they can figure out how to monetize that effectively, there's a lot of room to grow. >> you and ned and craig all have reasons why you think this, so when you see the tweets i get, e-mails i get, seems like people are gambling. i hear people saying should i cash out this and buy a whole bunch of stock. how do you as a retail investor, my viewer, calculate whether it's a fairly priced stock and how much you should put into it of your portfolio. >> i think it's back to the individual investor, how much risk in the portfolio. for me and my clients, i deal with a retail population that's rather conservative. i'm going to have to see a couple good quarters of earnings growth. and then to continue that earnings. again, as i mentioned earlier, if you can monetize, it's a great company. i would agree with the last speaker, their team is as good as any team out there. google obviously is doing it. i owned google and apple for clients in portfolios. i would love to own facebook and will own facebook if, in fact, they can monetize it. the valuation side i get, the reality is a lot of momentum. social media is here to stay. again, if they can monetize this thing, it's going to be a really good investment, long-term portfolios should own it, if, in fact, we see earnings growth. >> ned, final question to you. you're not hot on the ipo, tech ipo concept. if at some point it settles, you wouldn't buy it friday or monday or tuesday or wednesday. is there some point you might think this is a good stock to get into? >> i'd like to see a little optimistic about the switch to mobile. when they come out and amend and say looks it, it's hurting us already without conversations, i get a little nervous. they are telling you all at the outset maybe the earnings aren't going to be good. i'm paying 100 times earnings. i don't know what the heck i'm going to pay for it. what does bother me, i have been a part of so many stocks that had great potential, 1999 and 1998, and went to the ashes. there was no phoenix rising from a lot of those stocks. i'm not saying facebook isn't the greatest novel idea in the world, a billion subscribers. that opens up the competition out there. you had the linked ins and other internet companies. there's no barrier to entrance. facebook is there. they did a great job. i'm not knocking them for that. the competition is going to be intense going forward. making money, you guys are right. monetization of the product is going to be really phenomenal. i don't know how they are going to do it if they don't know how they are going to do it now. >> craig, answer those questions. everybody going mobile, everything happening on your device. it's tougher for facebook to get the advertising that's relevant onto a phone. >> two things have me optimistic. i see the cap table of a lot of startup companies. mark zuckerberg's name is never on a cap table. that's unlike virtually any other executive founder certainly in silicon valley. it shows me that he's laser focused on growing this business. and the second is, you know, i read yesterday about mark's influence in bing's redesign, integrating social into the search. he participates in the hackathons on facebook. it shows me he understands the product and where it's going. very different from yahoo! and other businesses that are available to investors. >> craig, thank you so much. it's interesting to me the one -- go ahead, ned. >> one comment. craig, i don't know if you were there or not. i know another inventor, and i would call mark an inventor. another inventor many years ago got laser vision on one particular product and drove the company right into the ground. that was something called dr. lamb back in polaroid when he came back with a polaroid camera. amazingly he's right. he drove that company into the ground because he spent so much on the product and couldn't make it work. >> interesting the guy invested in this, craig, thinks it will come out at the lowest price. here is what you've got, 60, 57, 50. last week matt mccall saying you may not get it for less than 90 or day one. ned and nadav say don't buy it if you're a retail investor on day one, craig says lower the first day. the two others say yes. good information, good discussion. you still have to make your own decision whether you put your money into the stock. guys, thanks very much. i appreciate it. coming up later in the show mark zuckerberg courts wall street billions and does it in the hoodie. is it a sign of the times or immaturity? up next four years since financial crisis, wall street betting bigger than ever. it seems the lessons were not learned. no one better qualified to answer that question than my next guest. sheila bair is credited with saving the banks during the financial crisis. you're watching "your $$$$$" on cnn. rewards you with savings just for getting a check-up, and it's only from aviva. last season was the gulf's best tourism season in years. in florida we had more suntans... in alabama we had more beautiful blooms... in mississippi we had more good times... in louisiana we had more fun on the water. last season we broke all kinds of records on the gulf. this year we are out to do even better... and now is a great time to start. our beatches are even more relaxing... the fishing's great. so pick your favorite spot on the gulf... and come on down. brought to you by bp and all of us who call the gulf home. who have used androgel 1%, there's big news. presenting androgel 1.62%. both are used to treat men with low testosterone. androgel 1.62% is from the makers of the number one prescribed testosterone replacement therapy. it raises your testosterone levels, and... is concentrated, so you could use less gel. and with androgel 1.62%, you can save on your monthly prescription. 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this is big news. jpmorgan chase is the country's largest bank. also one of the banks that emerged from the financial crisis of 2008 in relatively good shape. throughout the crisis jpmorgan made a profit every quarter. ceo jamie diamond led wall street's war on regulating the banks but his stunning announcement after the closing bell on thursday that jpmorgan has lost $2 billion in trades over the past six weeks and could face an additional $1 billion of losses made jaws drop on wall street. >> a new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored. the portfolio has proven to be riskier, more volatile and less effective as an economic edge than we thought. >> the addition will hurt jpmorgan's reputation as one of the best risk managers among the big banks. what does it say about our financial system overall? sheila bair credited with saving the banks, former chair, senior adviser of the pew trust. good to see you again. >> thank you a lot of things going through my head. took me back to 2008 when i had to struggle to understand this thing about credit default swaps and aig and how they are engaging in this business of in insuring themselves against risk without regulation. i'm thinking, is this happening again? >> no. i don't think it's happening on a broad scale. i would attribute jamie diamond for being very clear and opening up to the fact his bank made mistakes. a good contrast from 2008 when you saw ceos getting up there and saying it wasn't my fault, it was the market, other banks were doing it. he deserves credit for owning up to the fact this is something particular to his institution. they made serious mistakes. it does make you wonder, this is one of the best managed larger banks in the country. this kind of thing can happen. what's going on with other institutions. it really raises broader questions about are they too big to manage. >> it brings us back to the question of regulation. senator carl levin says banks too big to fail we're now learning engaged in risky behavior tell me not about regulations but regulators. they are going to hire the highest price people to work around stuff. people find it difficult to keep up with this kind of financial engineering. >> they do. the top of my reform list has been getting a lot more capital into these banks. you are always going to have unexpected losses. you're always going to have bank managers, even well managed banks. things happening at those banks are stupid and generating unexpected losses. a thick capital cushion to absorb losses, you're going to be able to stay ahead of it. trig to micro manage institutions or hordes of examiners going in there, hordes of regulators saying you can do this, you can't do that, things will fall through the crack. first and foremost we really need to get capital levels up. they have been increasing. they need to increase more. also regulators need a high priority on simplifying banks, dwirg commercial banks from security forms, direct oversight of these institutions. i think that would be a tremendous boon to better management and help shareholders understand what's going on inside of these institutions. you know, i was speaking to a fairly sophisticated investor group recently before all this came out obviously. i said to them, i said, raise your hands, who in this room understands what's going on inside jpmorgan chase. not a one of them raised their hands. i think shareholders have an on us to put more discipline and find out what's going on inside of them. >> we should tell our viewers because i imagine not many of them would understand the highly complicated world of credit default swaps. >> right. >> this was done by what was called a pro priority area trading desk. all banks have them. in the old days investment banks made money by matching up investors and we'll who need money. these trading desks, they are something -- a relatively new creation. they have traditionally made a lot of money for the banks. >> they have. this is the core of what the volcker rule is trying to get at, ban a bank taking directional bets on the market not to generate for the customer but generate profits for itself. it appears -- i'm still learning about this -- it appears this was a hedge or what they call an economic hedge, a hedge designed to protect jpmorgan chase against broader economic risks confronted in the market. the volcker rule, at least as currently proposed, may actually allow this. a lot of advocates have been saying the fed and other regulators need to narrow the hedging exception in the volcker rule to make sure those hedges tightly correlated to underlying risk they are trying to hedge. if you have a good hedge this shouldn't happen a loss on one side, should have on the other to offset it. one side is quite problematic and going to lead to a lot of questions and a tightening of the hedge on the volcker rule. >> you have an article in fortune about the discussion we've been having over the last several weeks about interest rates and what the fed will do. i'll tweet that to our viewers and we'll continue that conversation. sheila bair, great to see you. thank you very much. >> nice to see you. >> could mitt romney's brag about the auto industry cost him the key battleground state of ohio and maybe the election? 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