Motley Fool Hidden Gems Investing - 11 Stocks for Spring Cleaning Your Portfolio

Episode Date: April 7, 2023

If you clean out your closet once in a while, consider doing the same with your investment portfolio. (0:21) Ron Gross and Jason Moser discuss: - Stocks investors should consider trimming like hedges - 2 stocks to throw out altogether - Stocks that spark joy (a la Marie Kondo) - Investments poised for a comeback - Why Visa, Mastercard, and Berkshire-Hathaway are good stocks for a rainy day - Actual cleaning tips! (19:11) Motley Fool senior analyst Bill Mann talks with Howard Marks, co-founder of Oaktree Capital Management, about China’s effect on inflation in the U.S. and the winners and losers in a world of higher interest rates. To get your copy of our free report "Top Stocks For Rising Interest Rates" just go to fool.com/interest. Stocks discussed: FIVE, DG, DLTR, OLLI, ZG, UA, COST, CDNS, XBI, PYPL, SQ, BRK, V, MA Host: Chris Hill Guests: Jason Moser, Ron Gross, Bill Mann, Howard Marks Producer: Ricky Mulvey Engineer: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

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Because we have your number. It's time to do a little spring cleaning with your investing life. Motley Fool Money starts now. Everybody needs money. That's why they call it money. The best things in life are free, but you can give them to the birds and bees. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show.

I'm Chris Hill, and I'm joined by Motley Fool senior analysts Jason Moser and Ron Gross. Good to see you both. Happy spring. How are you doing, Chris? Happy spring indeed. It is our spring cleaning special. We are using spring break as a chance to lean into the theme of spring cleaning, because let's face it, folks, it is not just our closets and our yards that benefit from

spring cleaning. Our portfolios do as well. So Ron Gross, I'm going to start with you. Thinking about trimming the hedges here, what is a high flyer that you think investors might want to consider trimming in their portfolio? I'm going to go with five below. Now, it's a fine company. I have nothing at all against it. So I want to say that at the outset. I'm just saying the shares are up about 85% from its 52-week low. And at a market cap of around $11 billion, it's trading at 35 times forward earnings. Wow. Forward earnings guidance, actually, from the company of around $310 million.

So not analysts. The company is actually giving you guidance there. So 35 times. Compare that to Dollar General at 18 times, Dollar Tree at 21 times, Ali's Bargain Outlet at 23 times, selling at a significant premium to similar types of companies. Now, things are going well. Sales for the full year were up 8%. They opened up 150 new stores. They're going to open up another 200 stores. So it will grow. They don't have debt. They're buying back stocks. So again, nothing wrong with the company. All I'm saying is it may have gotten

a little bit ahead of itself. If it's now an outsized position for you as a result, may be a good one to trim. Well, and it's a good reminder, Ron, if you're wondering about the valuation of any given stock, taking a moment and comparing it to the valuation in your case with look at five below a discount retailer compared to Dollar Tree, Dollar General, and Ollie's Bargain. Jason, what about you? Well, don't get angry with me, Chris, please. I am going to just say, don't trim, right? If you have high flyers in your portfolio, what do we like to say here? Water your flowers, pull the weeds, let those high flyers run. Now, in all seriousness, that's great in theory, but there is a point where those high flyers could

probably start causing you to lose a little sleep at night. I will say, if you feel like you have overexposure to any high flyers, if they've run on you and they remain good businesses with questionable valuations, this could be a good time to right-size that position. I'm not really calling out any names in this case because it is so specific. Listen, Ron, we'll deal with you later. It is a very personal decision. It is something that everybody has to determine their own allocation and what ultimately lets them sleep at night. I think spring is a great time to look at that. If you have a position that has run beyond your wildest dreams, it could be a good opportunity to take a little bit of that off the table and put that money to good use. But if you've

got a high of flyers and you feel like that business is still doing what you thought it would do, let those things keep running. My guess is that in this market, in the last year or so we've had, there's not a lot of that going on in people's portfolios. But there could be the outlier there that you got in on something at their 52-week low. It's now double or even triple. And you never anticipated that. And you might want to trim. Right. And keep in mind, we're talking about trimming the hedges. We're not talking about ripping the hedges out of the ground and throwing them away. Unlike this next category, Ron, which is when you're doing some spring cleaning at home, you're probably throwing some stuff out. What is a stock that you think investors should consider

throwing out altogether? Now, not all of my colleagues agree with me here, but I never did and currently don't like Zillow. For me, too many mistakes from this management team and on this business. I don't want to be a part owner of it. As we know, most of us know, they had to completely unwind their iBuying home business. That was a complete debacle. Thankfully, that is behind them. Latest quarter results did exceed their outlook, but total revenue was down 19%. So they did better than they thought, but they were still down 19%. Declines in their internet media technology business. In their mortgage business, mortgage revenue down 65%. Their premier agent business down 20%. Visits to the site during the quarter down 5%. Their vision

is to build the housing super app. Let's see how they execute. I'll be watching alongside with all of you. Trading at 16.5 times adjusted EBITDA, 44 times forward estimates, because if you use current estimates, it won't work because they're actually not making any money until you'll get an NA or an NM in that category right there. If they perform, the stock is low, and that multiple will come down pretty quickly as earnings rise. I just don't want to be there long for the ride. By the skepticism just dripping from that whole diatribe, Jason, it was unbelievable. What about you? What's a stock investors might want to throw at all together? I will say, Ron, I think I agree with you. You said super app. It was a couple of years ago

when we heard super app, and we thought, wow, all of the opportunity in the world. A couple of years later, you realize that's just a canned statement that doesn't really have any vision, so to speak. I think I'm on board with you there. Chris, I look at my personal portfolio. I continue to hold a small position in Under Armour. Every once in a while, I ask myself, why? I just don't know. For a long time, it was such a good performer. Then it just fell off of a cliff. They've had a number of different thesis-breaking events. I continue to think I probably haven't sold it because I'm just lazy. But I also look at it, and Chris, like we've said before, they've made good stuff. I can't understand why they've not been able to get over that hump.

To me, the big question really continues to be Kevin Plank and how tough is he actually to work for. They've got a new CEO stepping in, Stephanie Coleman-Lenartz. Can she make a difference? Maybe. I don't know. But at this point, I mean, how big of a difference can she make if Plank is really the one behind the scenes calling the shots? Because he is really ultimately the owner of the business still. Will I sell these shares? I'm probably going to be lazy and not. But still, I will probably ask myself this question again next spring. Why haven't I sold these shares yet? Let's turn positive, Ron. In the spirit of Marie Kondo, what is a stock or a business that sparks joy in you? Well, I am a broken record on Costco,

but it is truly a company I really admire, and I'll go through why. I love the culture that they have created, Jim Senegal, back in the day and it continues today. They value employees, customers, and shareholders. They offer a tremendous value proposition to the customer. They've got a membership model where 75% of their operating profit actually comes from the membership fee that we all are more than happy to pay each year. They have pricing power. It allows them to periodically raise those membership prices, which again, fall right to the bottom line. They average a price hike about every five and a half years. I think we're due for one soon, so keep an eye out for that. I love their 90% renewal rate. It keeps those recurring revenues

pouring in. They have the ability to continue to expand even online in a big way, I believe. They have 848 warehouses, 584 of them in the U.S. Stocks never cheap because I'm not the only one that loves this company, but at 32 times forward earnings, it's cheaper than it has been in the past. You're paying a premium price for a premium company. On an evaluation basis, cheaper than five below. There you go. Jason, what about you? Well, this one sparks joy in me because it's something that's worked out very well for our members. And Chris, that's ultimately why we're here, right? I look to the top performer in my next-gen super cycle service, this one that

focuses on 5G and connectivity. The top performer, no, Chris, it's not Apple. Ron, it's Cadence Design Systems. And I know probably no one out there has even heard of this business. And I think that actually is a little bit of an advantage there. It flies under the radar, but it's got a very strong competitive position. It's got software, the hardware, the intellectual property that ultimately helps its customers, a lot of these big semiconductor companies. These companies are building these electronic products that we use every day. They serve these end markets from consumers, hyperscale computing, 5G communications, automotive, industrial, the list goes on and on. If you look at the last five years,

the company has grown revenue at an annualized rate of 13% with net income up an even more impressive 33%. That outperformance is no accident. I'm thrilled for all of our members who've been along for the ride on that one. Coming up after the break, a few stocks that are poised for a comeback. Details next, so stay right here. You're listening to Motley Fool Money. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross. It is our spring cleaning special. We're recording this one a little earlier than

usual. Springtime is all about rebirth, renewal. Jason, what is a stock or industry that you believed is poised for a comeback? Well, we talk a lot about the war on cash. With these two companies I'm choosing here, you would think over the last year, cash is winning. And I just, let's not be too short-term focused here. I'm looking at big fintech, PayPal, and Block. I think these companies are poised to see better days. You saw a short report recently on Block. We've seen a number of problems over PayPal recently. Clearly, they're undergoing a leadership transition. And the one-year chart on both companies is horrendous. I mean, Block down around 50%, PayPal down something like 36%. These are still both very respectable

businesses with tremendous tailwinds that they're playing into. So clearly, some challenges they're dealing with over the last year plus, I think they're poised for better days ahead. Ron, what about you? I haven't talked much recently about my biotech basket that I started building way back in 2017. And it was on fire for a while, but now after almost six years, it's actually down 2%. The basket's focused on gene therapy, to refresh some listeners' memories, and I'm by no means a biotech expert, but I bought the basket because I felt gene editing would be the future of medicine, and I do still believe that, but biotech is very volatile, and the entire sector has been very weak since January 2021. Rising interest rates have been

a major headwind and the more so for earlier stage companies. Having cash has been helpful. It's really key for these companies. But even if you have cash, being five years or so from market is a headwind too. The payoff is just too long versus nearer term rewards. So working through that all will take some time. Interest rates coming down will help. And I do think this will eventually happen. A pickup in M&A would be huge. The recent Pfizer-Segand deal was encouraging. So I'm sticking with my basket. If you don't want individual stocks, I recommend the XBI ETF as a great way to play the sector. Just real quick on the M&A activity, Ron, when you look at this basket of biotech stocks that you have, are there some that part of the thesis for you is

they might be an acquisition target? Yeah, two of them have already been taken out, but that was earlier in the basket, maybe before 2020. Since then, I've had no acquisition activity in my holdings, but some of them I think are probably ripe, especially once their cash comes down to a point of where they're somewhat in trouble and easy to bargain with, they make easier acquisition targets. April showers bring May flowers, but let's face it, April showers just bring a lot of rain. And so with that in mind, Jason, what is a stock for a rainy day? And think in terms of 2022 and what a rough year for the market and investors it was. So a stock for a rainy day for me is a stable stalwart business that provides ballast. Right. Yeah. As you were

going through last year, there were some stocks, hopefully in your portfolio that helped you sleep at night. And I'm going to round out the war on cash basket here, Chris, actually, because when I look to Visa and MasterCard, both actually in positive return territory over the last year, down only slightly in 2022, outperforming the market handily. I felt really good as an owner of these companies. When you look at the five and 10-year charts, it becomes more apparent. You just want to own these and go to sleep at night, and you're going to hold on to them for a long time. I think there's all sorts of people chirping out there about disruption and crypto, and they're going to be left behind,

and yada, yada, yada. You got to remember, these are big companies with a lot of resources, right? They're the ones that are investing in a lot of this stuff. These opportunities that come along the way, they're not sitting on their collective duffs doing nothing. I mean, they got the resources to invest in this evolving space, massive networks of users all around the world, and data indicates that more card users continue to use their cards more. So the tailwinds are very clear. It's just so difficult to disrupt massive networks like these. And I think that's why we saw these two companies, we saw their shares hold up so well in 2022. I remain an owner of all four that I've mentioned here and intend to remain a holder for hopefully years to come. Ron Gross, what about you?

Berkshire Hathaway. Now, I do know it's boring and Warren and Charlie aren't going to be around forever. But it's a collection of more than 60 wonderful businesses, including BNSF Railway, GEICO, MidAmerican Energy, Clayton Homes, my personal favorite, Dairy Queen, love Dairy Queen. Insurance is about 27% of the business, railways and energy 9% each, manufacturing 25% each, nicely diversified across sectors. Obviously, from an investment perspective, big positions and Amex and Bank of America and Apple, Occidental Petroleum. A succession plan is in place. Greg Abel will be the head of the company one day. He currently heads up the energy division. He's vice chairman of the board. Investing side is well in hand with Todd Combs and Ted Weschler

managing sizable portfolios for Berkshire. Only 1.8 times tangible book value, $129 billion in cash. Compounded value at an almost 20% rate over 57 years. Allows me to sleep well at night. It is my largest position. Ron, you're right. Warren Buffett, Charlie Munger, they're not immortal, although they seem like they are at times. But it really does seem like while they're not going to be around forever, this business and the blueprint for running it, both in terms of the acquisitions they make and the investments that they make, it seems like that is set up about as well as any succession planning I can think of in recent memory. Agree from an operating side of the business. Agree. My only concern is future acquisitions. Warren Buffett is a master at

identifying the right companies at the right price. Let's hope that that continues well into the future. All right. Last but not least, Jason, one actual cleaning tip. It can be specific. It can be more general. Enough with the investing. Let's help folks with an actual cleaning tip. Well, okay. So, this is something, you know, my wife a year or so ago turned me on to this thing. You know, I do most of the cooking in the house, and I just do a lot of the cleaning as well with the dishes, at least. Maybe you could just say the kitchen is my domain, Chris. But one thing she got me turned on to is this dish soap bar. Instead of buying the plastic bottle filled with the dish liquid, you can buy these dish soap bars and it's just like a bar of soap. And so you're

saving, you know, having to buy and either trash or hopefully recycle that plastic container. But you also, I tell you what, it lasts a lot longer because with the liquid, you just tend to overuse it. I've really become a great proponent of this dish soap bar and they come in all sorts of different shapes and sizes. So keep on the lookout for them. If you find one, give it a try. You may become a believer like I am. Ron? Two weekends ago, my wife went to visit my son at college, and I had the house to myself. As we do, Jason, I cooked up a whole bunch of Italian food in a thick red tomato sauce.

Now, here's where the story goes south. Stick with me. I decided I was an adult, and I could make the adult decision to eat in the family room in front of the TV. And the plan was going perfectly until a big dollop of tomato sauce dropped onto our new carpet. Well, thank goodness for Google. Here's what you do. You mix two cups of cold water with one tablespoon of clear liquid detergent, apply a generous amount, blot it up, rinse. It's like it never happened. Let's go to our man behind the glass, Dan Boyd. Dan, any thoughts on what you've heard or a cleaning tip of your own? So recently, I've had to take apart a vacuum

to get some crackers that my son had dropped. And I realized that you can clean the filters in a lot of these modern vacuums that don't use bag filters. So I did that, cleaned it, let it dry for 24 hours. And now my vacuum works like it's brand new. You're not getting that on Bloomberg. Jason Moser, Ron Gross, thanks for being here.

Thanks. More after the break, so stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Howard Marks is the co-founder and co-chairman of Oak Tree Capital Management. Warren Buffett has said of him, when I see memos from Howard Marks in my mail, that's the first thing I open and read. Back in January, Motley Fool senior analyst Bill Mann caught up with Marks to talk about his recent memo entitled Sea Change, as well as China's effect on inflation here in the U.S. and the winners and losers in a world

of higher interest rates. You put out a memo in December, it was called Sea Change. And in Sea Change, you describe what you see in 53 years of investing, only the third, really the dawn of the third era of investing. Now, obviously, in that period of time, we've seen lots of fads, we've seen lots of trends. But in this case, we're talking about something that is a total transformation. And we have felt it too. But I wanted to take the opportunity to ask you to talk about what it is that you see that's happening and why you think it's happening now. I think, Bill, since the global financial crisis, which ended in 2009, we've been living in a world which was engineered to be an easy world. Some of the manifestations may not have been

intentional. The Fed had to save the country and the world from the global financial crisis. It did so by drastically lowering interest rates and increasing liquidity through quantitative easy, the buying of bonds. And those two changes had many ramifications. And they made, I would say, they made the world an easy place, an unusually, unnaturally easy place for the 13 years from the 09 through the end of 21. What do I mean? Well, first of all, of course, it was very easy to borrow money and it was cheap to borrow money. And borrowers did not have to commit to extensive documentation or restrictions. What we call covenants tended

to disappear. Now, the reason for this is largely because the reduction of interest rates reduced the returns on very safe instruments like cash, T-bills, high-grade bonds, to the point where people who, investors, especially institutions that need 6% or 7% or 8% a year, couldn't use those things. They had to move out the risk curve in order to get the kinds of returns they needed. and that made their capital readily available to riskier companies at low interest rates. The accommodative monetary policy that I described supported the economy. So we had the longest economic recovery in history. It supported the markets. We had the longest bull market in history. Declining interest rates increase the value of all assets. The theoretician says that

the value of an asset is the discounted present value of all the future cash flows. If you lower the rate at which you do the discounting, the present value of future cash flows goes up. So assets became more valuable. It was very difficult to default or go bankrupt in this accommodative environment. So the rate of defaults and bankruptcies was very low. In the prior crises I had managed money in, 1991, 01, 02, we had two years of double-digit defaults in the high-yield bond universe. In this case, we only had one, again, because of these accommodative policies. You could always go get more money. Exactly. Money was available.

Yeah, a zombie company which consumed money where the debt service requirements exceeded the cash flows, as you say, burnt money every quarter, but it was very easy for them to get more money. So an easygoing environment. And, you know, the main point of the MMOC change is that, number one, obviously, in 1980, I had a loan outstanding from a bank and I got a slip from the bank saying the rate on your loan is now 22 and a quarter. 40 years later, I was able to borrow at $2.25. So, I just think that interest rates don't have much further to go on the downside. So, that phenomenon is largely over. And I think that for various reasons, the Fed is not going to go back to the ultra low interest rates of the last 13 years. So, we're back more to, in my opinion, a more normal environment, you know, where it's not easy to get financed. Some people can, some can't. It's not as cheap. There may be some

covenants involved. It's not so easy to avoid default and bankruptcy. It's not so easy to avoid recession. It's just going to be a little more challenging time. Now, if people say, I want to go back to normal, let's go back to normal, like 2015, 2016, 2017. That was not normal time. We are in normal. This is normal. The new conditions that I describe are normal. the conditions of the last 13 years were abnormal there was a brilliant chart and i should send it to you it was provided to me the bank of japan did it and it showed that the interest rates over the last 13 years worldwide were at 700 year lows yeah and probably longer than that but they sort of they sort of ran out of the capacity to track from the beginning of recorded history in which

interest was a formalized thing. We were at a 700-year low. And what's really interesting to me, so I got my start in investing in Japan, and it was the early 1990s. And so it was a very incredible time to be an investor. And Japan never did learn that lesson, or at least they have pushed it off, that the types of cleansing that you're talking about, bankruptcy is good. Bankruptcy, it hurts, and I think that it feels bad, but in some ways, our country works best because we are really good at rewarding well-invested capital and punishing poorly invested capital. And in the last 13 years, that accommodative environment made that something. You could step through it. You know, I said in one of my memos during the pandemic that fear of bankruptcy is to capitalism as fear of hell is to Catholicism.

It's what keeps us on the straight and narrow. It's what makes us make prudent decisions. And if you're not afraid of bankruptcy or default because the conditions are so benign and you believe that there's always a put from the Fed in which they'll bail you and the economy out, then you don't have to be so prudent. So, you know, that's the downside. And that creates moral hazard and all those things. More with Howard Marks after the break. This is Motley Fool Money. Working from one end to the other And all points in between Look at you through Mississippi

Well, muddy water turned to wine Took a jump through Mississippi Muddy water turned to wine Yeah Then I took California Through the pines and the pines guitar solo Chris Hill. Welcome back to Motley Fool Money. I'm Chris Hill. Let's get back to my colleague

Bill Mann's conversation with Howard Marks. There was a word that you didn't write in SeaChange. To me, it was in the background. And the word is China. Because when you're talking about a 13-year period, I think you're generally talking about an interest rate environment. But the 40-year period, you're talking about primarily the impacts of globalization. And for a 40-year period, we had the capacity and the endless desire to export inflation to China. Is that time over as well? Well, I would rephrase. I wouldn't say we exported inflation. I'd say we exported the sourcing, which had the effect of fighting inflation. And I think that for the, I think there was a 25-year period there. Maybe it was, hold on, maybe it was something like

1990 to 2015, when consumer durables prices overall declined by 40%. And it didn't happen because the U.S. production got cheaper. It happened because we imported more and more and more from Asia. And when we're talking about durables, we're talking about appliances and things of that nature, TVs. And, you know, raise your hand if you have an American made TV. So the point is, and that's a coffee table. And by the way, this was this was the period that coincided with what I call China's economic miracle. I'm not going to put you on the spot, but do you know how much Chinese GDP is up in the last 42 years? It's something like Oh, you mean aggregate?

No, how many, what percentage or how many times? Has it doubled? Has it tripled? Oh, I think it's like eight times. It's a hundred times. So I was really wrong. Really wrong. In 1978-

You did put me on the spot by not putting me on the spot. Well, you can cut that out. But in 1978, as I recall, Chinese GDP was $178 billion. dollars. And most recently it was 17.8 trillion. So that's a hundred X. And our business made China rich and allowed them to move people from the farms to the cities and into manufacturing from agriculture and so forth. But it's largely over. Ironically, there are a lot of people who want to do outsourcing who say now China's too expensive because the Chinese miracle raised the per capita income and the wage in China, and you can't get work done as cheaply over there

anymore as you used to. Right. On a yield basis, it doesn't really work out anymore. Right. Exactly. So you have people going to countries other than China, Vietnam or Bangladesh are examples. But then you have the fact that the pandemic demonstrated that we have to worry about sources of supply. So there's a force going on now called de-globalization, which is a reversal of the sourcing abroad in some small ways. But that will stop or undo the progress against inflation that globalization produced. So you can't have it both ways. It can't be both ways. And you're exactly right that it was a continuum. And if raising China's economic standards was a goal, and from the outset, from both sides, it was a goal. I mean, Richard Nixon

looked at China and said, having a China in poverty, it's not helpful for anybody. So it was absolutely a policy goal, but they've done it. You are at the point now where China is no longer competing on price. Now, if inflation averaged, I don't know, I'm not 100% sure on this datum, but if it averaged 2% a year in this country for the last 30 years, and that benefited from the process I described in which durable prices went down by 40%, what would inflation have been if durable prices hadn't gone down by 40%. And if durable prices are not going to go down by 40% in the years ahead, what will inflation be? And so I think we may have a slightly higher normal rate of inflation than we did over this period. So you do agree with me that we exported

inflation. I'm still stinging from the fact that my guess at the exponents were, you know, for how much China has grown was so far off, but it does so. I mean, even if you know your stuff, exponential math or exponential factors are really, really hard to contemplate. So what we're suggesting and what you're suggesting in sea change is that a lot of the things that have not worked for the last 13 years maybe are about to. It's not yes, no, black, white.

Of course. The things that were penalized in that period will be less penalized or may be benefited. Great example, high yield bonds. That's really where I started as a money manager in 78. And it's a big part of what we do here at Oak Tree. And about a year ago, they yielded four something. And that was the low return world. They were not useful to the institutional client trying to make six, seven, or eight.

who would invest in low-quality debt to make for something. Well, today it yields about eight. That's a usable rate of return. So, that's just a very simple example of what you're talking about, the availability of returns now that I would describe as helpful or ample. They're not the highest I've ever seen. They're not, I wouldn't describe them as, you know, the most generous, but at least they're usable. Another example is one of the things we invest in here and are well known for is distressed debt. Well, guess what? There wasn't much distress. Right. If you could just keep raising capital. Yes. Right. Yeah. So, you know, the default rate in my first 30 years in that position, the default rate averaged around 4% a year.

in the last 13 years averaged something more like two. So very little default, not much for default distressed debt funds to do. So we raised smallish funds, and they had moderate returns, not our dream environment. Yeah. It sounds to me, Howard, like you were describing a much better environment than we've had in a long time for pensions, for pooled money, that they have struggled so much for the return for their current obligations. What are some of the other areas you think will benefit from the new world order? Well, it's basically everything on the lending side of the equation. That's one. So ranging from cash, which now has a few percent positive return through treasuries, through high grades,

through high yield. Private lending now yields low double digits. It used to be mid to high single digits. Distressed debt funds should be able to make more money in a more target-rich environment. And then there is the one-off here and there. If you want to look at the things that have been hurt, an example is the emerging markets. The emerging markets face significant challenges. They've incurred a lot of debt denominated in dollars, and they don't have that much access to dollars. This low-return world, the hunt for return on investors' part, allowed, made dollar capital available to the emerging markets through loans, which has not normally been the case. So, they'll struggle with paying off those loans, but the securities are

starting from a cheap place. Is it cheap enough? Are they going to go up? I'm not saying that. But, you know, there are two piles of securities or assets. There's one pile that everybody knows about, feels they understand, feels good about, feels are seemly and prudent and they're optimistic about. Then there's another pile of things that people don't know about, don't understand, don't feel good about, think are unseemly and they're pessimistic about. Which pile contains the bargains? It's the latter. Now, that's not to say I want to say very clearly for you, for your viewers and listeners, that's not to say that everything on the latter pile is a bargain. But that's but the bargains are in that pile.

I've made a living for 50 odd years buying things on that pile, buying, doing the things other people didn't want to do. So you get to China. What's the word that people have been applying to China for the last year or so? Uninvestable. Yeah. I like to hear that. I like to hear that. Because I say, okay, nobody else is willing to do it. That means there's not much optimism in the prices. That means the prices may be low, may be too low. Let's take a hard look. That's how we think around here. That's going to do it for this week's Motley Fool Money Radio Show. The show is mixed by Dan Boyd.

I'm Chris Hill. Thanks for listening. We'll see you next time. We'll be right back.