Dylan Ratigan hosted CNBC "Fast Money" show Friday night. He kicked off the show with a discussion of some large stock purchases by some well-known "Wall Street whales." He explained that hedge-fund manager George Soros increased his stake in Wal-Mart (WMT) - Get Walmart Inc. Report. Jeff Macke says "you can go broke chasing these whales, but when they are following me around, it seems awfully smart."
Warren Buffett also increased his stakes in
and took a new stake in
. Karen Finerman said Conoco is attractive here. Tim Seymour says, "I love Conoco here; at these prices it trades at three and a half times earnings." Guy Adami pointed out that Buffett bought about 2% of the float in Eaton. He says "this has huge auto exposure, so it's interesting that he is dipping his toe in here."
The "Chart of the Day" was the
. The traders pointed out that the index looks like it's making a triple bottom. Seymour said it looks like "technically" the market wants to take it higher next week. Macke said there is no such thing as a triple bottom. He says "we will take out the lows."
Ratigan moved the conversation to the retail sector. He told viewers to look at
Abercrombie & Fitch
, which plunged 20% today. Finerman said Abercrombie is relatively expensive and people don't have any money. Macke said everyone knew that Abercrombie's numbers would be terrible. Adami told viewers to start looking at
Dick's Sporting Goods
ahead of it's earnings because the stock has a big short interest.
Finerman mentioned that she might entertain getting long
American Eagle Outfitters
and short Abercrombie as a hedge. Seymour said he is short the
against some emerging-market exporters to the U.S. Finerman told viewers she is short
Family Dollar Stores
because it trades a premium to Wal-Mart. Macke says "short
, they are the worst merchant on earth."
Seymour explained that retail in emerging markets is a much better place, because wage growth is up 20%. He said you can play it with names such as
Ratigan switched the discussion to the banking sector. Finerman expressed surprise that
Goldman Sachs Group
hasn't felt the need to say something to address the slide in their stock price. Adami says "you have to believe that in conversations with the partners, Goldman is talking about taking the company private." Macke says "Goldman trades like a stock that is going to zero."
The traders spoke with Ed Yardeni, president of Yardeni Research, about how to invest in this wacky market. Yardeni told viewers that we need to stimulate the economy. He said the government has to do something a little smarter, like bringing mortgage rates down. He says "you don't get a recovery without a recovery in housing." He said he hopes the Congress doesn't give the administration another $350 billion. He says "they gave the first TARP tranche to a bunch of banks that didn't even need it." Yardeni told viewers that its almost good news the TARP bailout isn't working.
The traders discussed who could be appointed by President-elect Barack Obama as the new secretary of the Treasury. Ratigan pointed out that according to the prediction market at
, Tim Geithner has a 48% probability, Larry Summers 16% and Jon Corzine 10%. Macke said he likes Corzine because he used to work at
Adami said he believes Geithner will get the job. Finerman told viewers that going with another Goldman Sachs guy isn't the way to go. She says "Summers is best for the job." Seymour explained that Geithner is good at getting people together behind the scenes, as he did with the Long Term Capital crisis.
Cash Is King
The traders spoke with Frank Aquila, a partner at Sullivan & Cromwell, about anticipating hostile takeovers. He said right now a lot of companies that want to do hostile bids have a lot of cash on their balance sheets. He says "the credit markets will open up to the companies with investment-grade credit." Aquila told viewers that he anticipates the most hostile activity in sectors such as retail, real estate, homebuilders and travel and leisure. He says "these areas will see the most activity, because their share prices have fallen dramatically."
The crew spoke with Lon Juricic, president of
about the increased insider buying activity for corporate CEOs. Juricic said the insider buying action this week is incredible. He says, "Normally in a week we would track 15 notable buys; this week we saw 47." He mentioned that CEOs were buying at names such as
. Adami said Corning is the most interesting one.
Adami recommenced ConocoPhillips. Finerman said to short
Capital One Financial
. Seymour picked
This article was written by a staff member of TheStreet.com.