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Outsourcing to the US?
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Could jobs that were once outsourced to India come back to the US? It seems that could happen.
Pramod Bhasin, CEO of Indian outsourcing giant Genpact [G
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], said he will move jobs to America because high US unemployment is pushing wage rates below that of what he's having to pay in India.
To unemployed Americans, the announcement may be welcome news. But Ron Shah of Geena Ventures, an India-centric private equity firm, is concerned. The jobs being sent back to America, he said, are low skill and pay around minimum wage. Meanwhile, the US continues to outsource high margin, high intellectual property work to places like India, where a technology-friendly base has been built.
These jobs are being sent back to America for cost advantage, so there will be no sustainable boost to US employment, Shah argued. Historically, high margin work has been the strength of the US economy, he said. High margin work has been America's "bread and butter" and Shah has "issues" with those jobs being exported.
Steve Cortes of Veracruz said the announcement is a "testimony to the efficacy of free markets that the rising tide lifts all boats." This first helped American shareholders, he said, because companies were able to outsource jobs to more cost efficient places, like India. As a result, India's middle class grows and that increases demand for the amount of American products that can be exported there, he said.
Watch the video to see the full segment.
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HOW DO HEDGE FUNDS MAKE MONEY ANYMORE?
Legendary hedge fund manager Stanley Druckenmiller threw in the towel Wednesday. He said he was discouraged by his returns in the last few years, where he had averaged 30% in annual returns since 1986. But if Druckenmiller stopped playing stock-picker, should you?
Guy Adami, managing director at Drakon Capital, said a lot of hedge funds have become too big. When they have that kind of capital under management, it's too difficult to make returns. He thinks there are plenty of smaller money managers who do well.
Being "small and nimble" is helpful, said Steve Cortes of Veracruz. He finds a lot of opportunities overnight. Large hedge funds wouldn't be able to squeeze through because there is not enough liquidity at that time, but smaller traders can get it done, he said.
Joe Terranova, chief market strategist at Vitrus Investment Partners, said he tries to identify tailwinds.
Pete Najarian, co-founder of optionMONSTER.com, said he's found luck in the long-term. He sells upside calls and brings in the premium. Collecting premium and collecting dividends is what has worked for him.
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THE SHORTSIDE
One way to potentially make money is to short, so where do you start? We spoke with Eric Jackson, founder of Ironfire Capital, who provided a list of names he loves to short.
Watch the video to see what he said.
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EAR TO THE WALL: RIMM
From conflicts to foreign governments to confusion over price cuts of its new Torch smartphone, the headlines haven't helped shares of Research In Motion [RIMM
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]. The BlackBerry maker's stock is down by 12% this month.
Consumers, not businesses, now make up two-thirds of RIMM's subscribers, said CNBC's Jon Fortt. The company has struggled to generate excitement amongst their base, he said. The Torch, for example, sold 150,000 units over the first few days of its release. Apple's [AAPL
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] iPhone, however, moved 1.7 million units in the first three days, including pre-orders.
Joe Terranova, chief market strategist at Vitrus Investment Partners, said he would buy RIMM at $45-55 a share on the basis that it might be acquired. Asked if Microsoft might want to purchase RIMM, Fortt said that would be the "worst buy in the world." RIMM has a $30 billion market cap, so why would MSFT pay that amount to acquire a company that performs the same services it already has.
Fortt thinks Nokia [NOK
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], however, is an interesting guess on who might takeover RIMM. He said the two companies have roughly the same market cap and strong personalities at the helm, so he'd wonder who's in control. Nokia is great at phone services and RIMM offers top e-mail services, so the companies could use each other, he said.
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Trader disclosures for Aug. 18, 2010:
Joe Terranova
Terranova owns (AKAM)
Terranova owns (V)
Terranova owns (NRG)
Terranova owns (POT)
Terranova owns (OXY)
Terranova owns (GLD)
Terranova owns (BAX)
Terranova owns (MOS)
Terranova owns (PFE)
Terranova owns (SU)
Terranova owns (XBI)
Terranova owns (GOOG)
Terranova owns (LRCX)
Terranova owns (AXP)
Terranova owns (C)
Terranova owns (GS)
Terranova owns (BMO)
Terranova owns (MSFT)
Terranova owns (QCOM)
Terranova owns (FCX)
Terranova owns (APA)
Terranova owns (PEP)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (DRYS)
Virtus Investment Partners own more than 1% of (EXR)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (XLK)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Guy Adami
Adami owns (AGU)
Adami owns (BTU)
Adami owns (NUE)
Adami owns (C)
Adami owns (GS)
Adami owns (INTC)
Adami owns (MSFT)
Adami’s wife works at Merck
Karen Finerman
Finerman ‘s firm owns (AAPL)
Finerman and Finerman’s Firm owns (BAC)
Finerman owns (GOOG)
Finerman’s firm owns (GYMB)
Finerman’s firm owns (HPQ)
Finerman’s firm owns (JPM)
Finerman’s firm owns (RIMM)
Finerman’s firm owns (SKS)
Finerman’s firm owns (TGT)
Pete Najarian
Pete Najarian owns (GS) calls
Pete Najarian owns (HPQ) calls
Pete Najarian owns (RIMM) call spreads
Pete Najarian owns (X) calls
Pete Najarian owns (TCK) short calls
Pete Najarian owns (CNI) short callls
Pete Najarian owns (WDC) calls
Pete Najarian owns (STX) calls
Pete Najarian owns (TEVA)
Steve Cortes
Cortes is long (FCX)
Cortes is long the S&P 500
Cortes is long Canadian Dollars
Cortes is long Australian Dollars
Cortes is long Crude oil
Cortes is short (XLF)
Cortes is short the Japanese Yen
Cortes is short the British Pound
Cortes is short U.S. Treasuries
Gary Shilling
Funds managed by Shilling own U.S. Treasuries
Funds managed by Shilling own Eurodollar Futures
Eric Jackson
Jackson is short (JCP)
Jackson is short (DDS)
Jackson is short (SKS)
Jackson is short (JWN)
Jackson is short (BWS)
Ron Shah
***No Disclosures***
Mike Khouw
***No Disclosures***
Data is a real-time snapshot *Data is delayed at least 15 minutes
