Motley Fool Hidden Gems Investing - 2019 in Review: Software, Entertainment, and Cheap Beer

Episode Date: December 27, 2019

Disney Plus works its magic. WeWork falls down on the job. Best Buy rewards investors. And Constellation Brands unloads some cheap beer. Analysts Andy Cross, Ron Gross, and Jason Moser discuss some of the year’s top business stories, stock market surprises, underappreciated stories, and dumb investments. We share why Chipotle, Microsoft, and Target each have a claim on having the “Best CEO of 2019”.  Businesses analyzed this week include Amazon, Lumentum, Lyft, Microsoft, Uber, and more. Plus, we revisit our conversation with NYU professor and best-selling author Scott Galloway, who talks about his latest book, The Algebra of Happiness: Notes on the Pursuit of Success, Love, and Meaning.      Learn more about your ad choices. Visit megaphone.fm/adchoices

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It's the Motley Fool Money radio show. I'm Chris Hill. Joining me in studio this week, senior analysts Jason Moser, Andy Cross, and Ron Gross. Good to see you as always, gentlemen. It is our year in review special. Next week will be our investing preview for 2020, but this week we're going to tie a bow on 2019. Ron Gross, I'm going to start with you. What is your business slash investing headline for the year? How about the stock market's up almost 30%, including dividends. Investors have probably done well no matter what sector they invested in,

communications, industrials, financials, but you did very well if you were overweight in tech. an incredibly strong year. Jason, can't argue with that. No, you can't. I'm going to go back to what I was looking at at the beginning of the year, and I think it really turned out to be a pretty good year for this, but it was about Disney+, wondering if it was going to launch and how that launch was going to go. I mean, you're looking at early estimates initially when the service launched. I mean, we're looking for maybe 20 million subs by the end of 2020, right? So, by the end of next year. There are estimates out there now, based on Cowan research, that's telling us there's about

24 million subscribers to date of Disney+. I am one of them. And I am, too, and a very happy one. It's just a universe of content that has a little bit of something for everyone in our household. And to me, again, they priced it probably somewhat aggressively on the low side, but I think the flip side of that coin is it gives them a lot of room to raise that price over time. And given the fact that Disney makes their money so many different ways. I just think this is going to be a really nice driver for the overall business for a long time to come.

Andy Cross, what's your headline for the year? I guess up to me to be the negative Nelly here. Sorry, Adam, it's not we, it's you. WeWork saga is really, the more I looked at this, it just was amazing. Started the year off at a $47 billion valuation, driven a lot by SoftBank and by Adam Neumann and his company. ended up shelving the IPO, totally postponing it. The whole story really collapsed after the S-1 was filed. All kinds of problems with the governance situation. But most importantly, they were just hemorrhaging cash. And it was not a business that was trying to elevate the world's consciousness as Adam Neumann, the CEO and founder, wanted it to be. It was actually

a real estate business that was losing a lot of money. So, the fact that they had to pull the IPO and all the drama that came with that and the impact it had on the IPO market was my headline for the year. That's got to be the single biggest one-year decline in net worth of any human being that I can think of. Well, and we talked about it on the show, the fact that investment banks on Wall Street, which rarely have trouble backing an IPO that may not have great long-term prospects, the fact that you had all these investment firms saying, we can't recommend this. We can't take this to our biggest clients. Well, it's interesting, too. We were talking about this on our recent Industry Focus Roundtable,

and it does seem like at least a positive byproduct from this. I don't mean to take away from your pessimism. Let's go ahead and try to see some light at the end of the tunnel. Please do! Bring the optimism into it! It does feel like, as the IPO bubble may be deflating somewhat, it seems like there's a lot of interest out there in S1s now. People taking the opportunity to dig into an S1, learn a little bit more about the actual business, because it really did feel like when this S1 launched, everybody jumped in there really quickly to learn, and everybody was kind of like, whoa, wait a minute, you want to pay what for what now? Because it didn't make sense.

Maybe that is a positive byproduct from all of this, is a step forward in investor education, which is what we're all about here anyway. Alright, let's do a couple of fill-in-the-blanks for the year. Ron, this year, I was really surprised by blank. Best buy. Stock up 60% this year. A lot of us left it for dead. Despite competition from Amazon, Walmart, Target, they've done a really nice job offering customers hosted services from consultation, installation, technical support, streamlining the supply chain, allowing quicker delivery, exceeded their cost reduction targets. They've increased their dividend consistently since 2014, repurchased shares. The company has done a wonderful job

of turning it around. Jason Moser? This isn't my surprise, but just based on what you're saying there, I was surprised to see that the Best Buy right by our house is shutting down. And that's right next to an AC Moore, which is an art supply store that's going out of business. So, this shopping center is going to have some big problems here. Maybe there's an investment to be made there. For me, and Chris, we've talked about this a little bit, I was really surprised at how big of a hit Constellation took on that Ballast Point acquisition. I was very surprised when they paid $1 billion for that business. It was something like 12-time

sales when Ballast was just thinking about going public. The numbers didn't make sense, particularly when you compared it to something like a more established player, Boston Beer, in the space. But to see that they wrote that trademark down to essentially $28 million, I think it was, by the end of this fiscal year. They unloaded the business to just a Chicago local craft brewer. I mean, we're not talking about a $100 million business here. Just a phenomenally bad investment. And it wasn't insignificant. I mean, they paid $1 billion for it. That's about 4% of their total assets on their balance sheet today. So, you know, former management made the investment, and they don't really have to answer for it.

But, man, oh, man, that was really a bad one. Yeah, there's a new sheriff in town running Constellation Brands, not having the ballast point acquisition. Andy Cross, what about you? Ron mentioned the fantastic performance of the market. What really surprised me was the lack of volatility coming off of last year. If you look at just this year's volatility on a daily basis from the market, it was less than normal. when you look at compared to last year, it was down a little bit. When you look at a couple years ago, it was up a little bit still. But just the fact that the market and interest rate

decreasing environment with all the trade talk and all the election conversation and all of the political conversation, that the volatility in the market for the S&P 500 was just as low as it was, that just really surprised me. One more fill-in-the-blank, Ron. Looking back, blank got way too much attention in 2019. So, not that this topic isn't important, but I am just completely fatigued by all the talk about tariffs, more tariffs, less tariffs, delayed tariffs, trade deals, first phase of trade deals, no deals, tariffs hurt performance, tariffs had no effect on performance. I'm kind of done with the whole thing. I got to say, as much as anything on this show, I'm proud of the fact that we basically avoided

that topic for the entire year. I feel like that was time well spent not talking about it. Jason, what about you? These are two IPOs that really just have failed to gain any traction. Uber and Lyft, we talked a lot about them going into their IPOs. I feel like they've gotten way too much attention for really what are pretty crappy business models in their current iterations. It's not to say they can't get better, but they have to figure out what to do with those big networks. Because as it stands today, I mean, we've seen the performance of the stock since they've gone public. It's not been a pretty picture. And I don't see anything in the near term that really should change that. So, let's stop talking about

these two businesses, that they really are changing the world. Andy? I found the battle between Microsoft and Amazon for the JETI, the Joint Enterprise Defense Initiative, just the fact that it was so tied into politics. It's a $10 billion deal over 10 years. And I know it's an entry into a bigger government kind of business when it comes to cloud solutions. But they've got so much conversation, especially recently, just about what President Trump had said and what he did not say and his influence and not. And the fact that their business and their cloud business for both these companies, not to mention Google, which is actually becoming very aggressive in the cloud

space, is so large and over the next 10 years will be so large. I just thought this was a little bit blown out of proportion. So, is the financial media put too much of a spotlight on certain stories? Obviously, there are some things that go under the radar. Ron, what's an under-the-radar story of 2019 for you? I think tariffs. No, I'm just kidding. I think it's the inflation that was sure to come following years of free money, quantitative easing, tax cuts, never materialized. It allowed the Fed to change course, cut interest rates three times in 2019. It's contributed to a 30% increase in the stock market this year, and we haven't been talking about the lack of inflation as much as I think we should be.

O'Reilly. Mr. Macro over here. O'Reilly. Well, the debt hangover, right? That's one of the theories, the debt hangover, right? Everybody was trying to recover and not spending, and that's been at least a contributor to it. O'Reilly. What about you, Jason? Jason Moser. I'm going to go more stock-specific. I'm really proud of this one, because our top performer in our augmented reality services here, it's not Apple, it's not Alphabet, it's not Microsoft, it's Lumentum. And I've talked about Lumentum before on this show. The stock

is up 80% for the year. I can only wish that we opened the service at the beginning of the year. It's up about 55% for the service for the year. But this is the company that makes that VC SEL technology, the vertical cavity surface emitting laser, which is essentially required for 3D sensing, which is leading us into that mixed reality, augmented reality, virtual reality future. Lumentum is the market leader in this technology. They've got customers from Apple to Google and all sorts of other Android hardware providers. When you look at the actual market, it's projected to grow from $1.8 billion today to about $4 billion by 2023. Just a business that's really performing very well. And as we get a little bit more

certainty on the China trade deal and the tariffs front, Ron, I think this business stands to probably pick up even a little bit more steam as time goes on. I'm glad you explained what they did, because I was about to ask my doctor if momentum is right for them. I was going to say, it's hard to believe that that's not talked about more. I'm shocked. Well played there. Andy, what about you? A lot of conversations around ESG, environmental, social, and governance. But I was really surprised at the decision by the Business Roundtable in August, which is an association of CEOs from leading companies like Salesforce, Amex, Aflac, 3M, all whole hosts. They made the decision to move away from the primary

purpose of companies to be just for shareholders and much more to a stakeholder-friendly enterprise. Customers, asserting customers, employees, suppliers, communities, and shareholders. So, they made this push in the middle of this landscape where ESG is getting more and more dollars. I thought that would get a lot more attention, and it didn't. I think that's very good for long-term shareholders like The Motley Fool and business-focused investors like us, and I just wish it got a little bit more attention. Our Year in Review continues right after the break, so stay right here. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Andy Cross, and Ron Gross. It's our Year in Review special. By the way, if you want to read more, you can go to fool.com slash 2019 for our editorial team's Year in Review highlights. Best CEO of the year, Ron? Is it Bob Iger? Because Time magazine went with Bob Iger. That would be a good choice, but it's not my choice. I'm going to give some love to Brian Cornell of Target. At the helm since 2014, spent billions of dollars on the push to compete with the ease of delivery provided by Amazon and Walmart, bought grocery delivery

firms shipped, built in-store pickup and drive-up services. The stock is up more than 90% this year on some really good execution. Jason? Yeah, I'm going to go with Satya Nadella, CEO of Microsoft. I feel like the stock is up over 50% for the year. When you consider all of the criticism that Microsoft has suffered over the past several years, due to the fact that they essentially missed the mobile revolution more or less, you look at the investments that they've made in cloud, the investments that they're making in spatial computing that I think will pay off over the course of the next decade. To me, Satya Nadella is solely responsible for bringing Microsoft back to

the forefront of the conversation in tech. One of the biggest companies in the world next to Apple. And I think, honestly, they're more relevant to the world than Apple at this point, given what they do. And I'm just really excited about the future of this company, and I do think that Satya Nadella deserves a lot of that credit. Big statement there. Andy Cross? Another Brian, Brian Nichol from Chipotle. He joined Chipotle in 2018 after leaving Taco Bell. He led Taco Bell for years. Took over from Steve Ailes, who founded the Food with Integrity,

but we know Chipotle had run into all kinds of problems with their E. coli food scares, some health concerns. The stock just tanked by two-thirds. He really took over, came back, brought the blocking and tackling to just operationally excellence at Chipotle, brought back the standards that we had come to know and love at Chipotle for so many years, leading initiatives like advertising, drive-through, order online. And the stock has rebounded so nicely, gone from $250 now back up to above $800.

So, really impressive performance by Brian. Alright, one more fill-in-the-blank. And Ron, you can go with a company, you can go with a CEO, an industry, fill-in-the-blank. I can't believe blank is still here. I'm going to go with Pier 1 Imports. Robert Reisbach, a restructuring expert, recently named CEO in addition to his CFO duty. He's doing his best here, but it's an uphill battle. Regained New York Stock Exchange compliance recently by completing a 1-for-20 reverse

stock split. O' One-for-20? One-for-20. Stock is down 70% over the last year. Only a $29 million market cap at this point. Only $10 million in cash left and $980 million in debt. Burned through $230 million of cash over the last 12 months. Closing stores. Trying to right the ship. It's a tough one here. O' I feel like the Stock Exchange should give you a fruit basket when you do something like that. Maybe they do. O' Jason Moser, what about you? We've been talking about this one for a few years now. We always kind of wonder,

does the world really need JCPenney? I think the answer is a resounding no, yet it's still here. And I'm not sure exactly why, but hey, listen, JCPenney is still here. And I must say, I can't believe it. It's interesting, though, because we have seen in this year and over the past decade some discount retailers in that same vein, Ross Stores, TJ Maxx, that have actually done well and rewarded shareholders. But to your point, JCPenney is definitely not on that list. No. We were talking about Bed Bath & Beyond just the other day, and Mark Tritton, who's just taken over there, used to work at Target. This is going to be a very interesting story to watch play out, because there are a lot of the same dynamics that play with

Bed Bath & Beyond that have been in play with JCPenney. Honestly, I give Bed Bath & Beyond a bit of a better fighting chance there. Andy? Pitney Bowes, which we actually use here in the company, but 90% of the Fortune 500 use them for some of their mailing services. It's been around for 95 years, but the stock, Unfortunately, it's down 30% year-to-date, down 80% over the last five years. It's now a $720 million business, trying to make the move into e-commerce away from just their traditional mailing labels. But it's a tough go here. $3.5 billion in sales, but their profit margins are just collapsing. Recently, Bill Miller, though, of Miller Value, has

been buying into the business and into the stock. So, there's some hope, but it's a tough go for Pitney Bowes. All right, before we wrap up, let's go with the dumbest investment of 2019. It can be your own, it can be another company's, but what looks dumb? Oh, it's my own. Unfortunately, it's Xilinx. It's an April 2019 recommendation of mine in total income service here at The Fool. A semiconductor company that makes programmable and reusable chips. Stock is down 26% since the recommendation, is losing to the market by 38%. U.S.-China trade war just hit the business real hard. they would no longer sell their products into Huawei, which was a big 5G customer.

In turn, they saw some other 5G customers delaying orders. And management thinks this will come around and 5G eventually will be a catalyst, but we certainly haven't seen it yet. Is it a value play at this point, or are they just in too much trouble? I don't think they're in trouble. I would say it's more of a value play than a trouble play. Alright. Jason Moser, what about you? Well, if we're looking for any extra time to fill on this show, throw in a little blurb from Aaron Bush's rant on Motley Fool Money last week, because I'm going with GameStop here, and their share repurchases for 2019. You've got a business here that is in secular decline,

having all sorts of trouble from the top line down to the comps numbers, zippy profitability, a lot of problems for this company, and they bought back close to $200 million in shares in 2019 alone. I mean, it's one thing to repurchase shares when you believe there's a fundamental misunderstanding regarding the business and the stock price, but there's no misunderstanding. I mean, GameStop is in serious trouble, they shouldn't be doing this. Well, and partly to the point that Aaron made, if you actually walk into a GameStop, increasingly they're selling non-game items. Like, when you're a business like GameStop and you're relying on candy and soda sales to help move the needle, that's a problem.

Now we're just 7-Eleven. The one thing they've got in their favor is that there is supposedly a console refresh cycle about to hit, and that's probably going to help them, at least in the short-term. Andy Cross, dumbest investment in 2019? PagerDuty, my friends. Symbol PD. I've been excited about this. I still am long-term. The stock's now, unfortunately, cheaper for those who have owned it. But they have a system software that helps analyze businesses' and companies' systems and provide alerts to them when they're broken. 12,400 clients. So, they continue to grow clients and grow sales. Unfortunately, the investments they're making in the business

It's really hurting the operating margins, and it's not making any money. Investors are a little bit tired right now of those investments. And any thoughts on rebranding the company? I'm sticking with Patriot Duty. Oh, come on. Come on, we're sticking with it. I think if you're a shareholder, you're kind of hoping for that. All right, Andy Cross, Jason Moser, Ron Gross.

Guys, thanks for being here. Thanks, Chris. Coming up, we're going to revisit one of our most popular interviews of 2019, a conversation with Professor Scott Galloway. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Scott Galloway is professor of marketing at NYU Stern, the founder of L2, the co-host of Pivot with Recode's Kara Swisher, and author

of the New York Times bestseller, The Four, the hidden DNA of Amazon, Apple, Facebook, and Google. Back in May, I got to talk with Scott about his latest book entitled The Algebra of Happiness, Notes on the Pursuit of Success, Love, and Meaning. Now, given all the success of his first book, I knew it was just a matter of time before he was going to write another one. But when Scott and I got around to talking about it, I let him know that I just wasn't expecting this to be the topic. I got to confess, I was surprised that this was your second book. In fact, when we talked about... So was my publisher.

When we talked about your first book, knowing how the publishing industry works, I was already thinking, in fact, I think I asked you about your second book. How did you go from writing about huge technology companies to writing a book about the math behind happiness? yeah so your your instincts are entirely correct i'm in a position where i don't need to write books for money i do it for personal discovery and because when i'm gone i want my kids to read my books and think of it they understood me better and my process for writing books which i've done twice now is i take a class that's popular i turn it into a video and then if the

video is successful i write a book so my first book before i teach a class excuse me on the big four platforms did a video got a million views write a book my last class is called the algebra of happiness and i take the kids through a series of algorithms algorithms based on personal experience observations of my cohort and then a decent amount of research to say all right economic success is great but what's the difference between economic success and happiness and i try to distill it down to a number of equations and then have a discussion around it and there is no one equation but there are best practices and there are signals around cohorts that are typically happier than other cohorts and the class is very popular did a video video got two million views

so my publisher was jonesing for your correct instincts to get a second book out because if your first book does well the pump is primed and and the distribution channel barnes and olman amazon will order a lot of your books and that's kind of half the battle so they said we need to get something out right away and i came back and said okay i've written another book they said great what is it amazon alibaba what are you writing about i'm writing about happiness and they're literally, no, no, no, no, no, no, no, no. They're like, do not do that. Write the five, write Amazon, whatever you want, but write about tech. And I said, no, I'm writing a book on happiness. This has been a journal of personal discovery for me. It's something I'm passionate

about. I struggle with anger and depression and I want to manage those things without chemical intervention. And so I think a lot about this stuff and it's sort of a, you know, it's really a means for me to manage kind of my own issues or some of them. And also the kids seem to respond well to it in class. And it's just something I'm very interested in. And it just, this was an easy decision for me. And my publisher came around and said, all right, we'll publish it. And so far it seems to be, seems to be doing well. And here we are. So one of the things you touch on pretty early is happiness in the short term. There are a lot of ways to get that. You can get that at Chipotle, but this is much more about long-term happiness.

Obviously, there are so many variables. As you said, there's no one equation. But what are a couple of the variables that you think people should focus on? So you're right. The title is a little bit misleading because happiness is a sensation and you'll get short term happiness from everything, as you said, from Chipotle to Netflix to Cialis will give you the short term sensation of happiness. What I'm really writing about here is how do you develop an arc of satisfaction? What are the series of investments and decisions you make in your career and your relationship and yourself such that you're more likely at the end of your life to feel like you checked some boxes in indelible ink and feel more satisfied such that when the pendulum of your mood and your life swing up and down as they do for everyone, they swing on a higher plane such that you feel like, okay, I've led sort of a rewarding, meaningful, satisfying life.

So I've tried to distill down what I think are some of those things, but you're absolutely right. Happiness, you know, David Brooks wrote a great article last week and it kind of summarized it. Happiness is usually from personal achievement or a sensation, but true joy is in the company of others. It's a collective group that is recognizing someone else's achievement, like how you feel when your son's graduation.

You know, that's joyous. And so the things I'm trying to talk about here are how do you create these moments of joy and create, if you will, an ecosystem where these moments of joy are more regular and and that you can be present in those moments so such that you can think i'm an atheist a lot of i think my motivation comes from the fact that i think life is finite that at some point i will look into my children's eyes and know that our relationship is coming to an end which is obviously tragic but i also think it's motivating and i want to ensure that i make the requisite investments in this this finite time i have which

is going faster and faster as I get older, such that when I'm toward the end, I can look back and sort of hopefully be able to drop the mic. What do you think is the relationship between money and happiness? Well, there's good research out there. There is a relationship. You are happier having more money than less, but it tops out. So someone in the middle class is happier generally than someone who's struggling or is in the lower income cohorts. And someone who's affluent is generally happier than somebody who's in the middle class. But once you get to a point where you can afford nice housing, education for your children, absorb an economic shock, take nice vacations, you know, have enough money to retire, which, by the way, is no small feat. But once you

get to that point, happiness tops out. So people making $40,000 a year with three kids are less happy than someone making half a million dollars a year. But the guy or gal making half a million dollars a year is no less happy than the person making five million a year. And the other myth is that billionaires are less happy. They're not. They're no more happy or less happy than millionaires. So the question is, what I tell my kids, you got to bust a move to economic security. I think we live in a capitalist society. As much as we'd like to think otherwise, money buys a certain amount of happiness, satisfaction, health care, better opportunities for your kids, a better selection, selection pool of mates, security, you know, a lack of fear from some things that can

happen to you when you don't have money makes you very vulnerable in our society. But at a certain point, you got to realize that money is ink in the pen. And it helps write the story, it can make certain chapters brighter, and it can maybe write chapters you wouldn't otherwise be able to write. But it's not your story. And in your 20s and 30s, yeah, create chart a path towards economic security and economic security means different things for different people if you want to live in rural pennsylvania and have a nice life and have kids and there's nothing wrong with it that's your chart to happiness then your economic security has a different target on it it has a different number if you want to live a master the universe lifestyle in london or san francisco or

new york have three kids send them to private school i think it's likely you'll end up with an ex-wife and alimony and child support and want that house in the hamptons then boss your economic weight class is going to go way up and it's going to be harder to get there but once you're there or once you have a path that's kind of charted you got to start thinking about all right beyond that what makes me happy and a lot of my friends never get off the wheel they always have a number in their mind and their number is their net worth and the terrible thing about numbers is you can always double them in your imagination it's like that star wars episode where luke is trying to talk han solo into rescuing princess leia and he says if you do this

they'll give you more money than you can ever imagine. And Han Solo responds, I don't know, I can imagine a lot of money. So if you were to ask people at the beginning of their career, what do you want from your life, they might say, I want meaningful relationships, I want to fall in love, I want to have kids who are emotionally well-balanced, I want friends, I want great experiences. And a lot of my friends at this point have achieved all of those things.

But what they also know is their net worth. and they don't seem to be happy until they get 2x that. And then once they have that, they're like, okay, I want 4x. And so I think it's important to keep your mind on what are the big boxes you want to check qualitatively and recognize that at some point, I'm not saying stop making money, but money isn't your story. It's the ink. One of the things you write about is that the number one piece of advice

seniors would have given their younger selves is that they wish they had been less hard on themselves. I'm not calling you a senior, but is that the advice you would give to your younger self? Yeah, although I think I would have been, I mean, I was a total f*** up as a young man. I drank too much. I wasn't disciplined. I was very selfish. I didn't invest in relationships, so I probably would have been a bit harder on myself, but the research is there, and that is the number one piece of advice seniors would give to their younger selves is don't be so hard on yourself because the key or one of the keys or pillars to any successful relationship long term

is forgiveness you will screw up your partner will screw up and if you don't bring a sense of forgiveness as of an investment you're willing to make in the relationship it's not you know you're going to have trouble with long-term relationships and the same is true with the relationship with yourself it's important that you hold yourself accountable you know it's important that you mourn it's important that you beat yourself up but you have to set a fuse on it in a timeline and then you need to move on with the important business of life so the notion that you can forgive yourself and move on and not anchor always off the most successful person you know which is our competitive gene we tend to anchor off of that you know the guy or gal that is super successful

following their passion great relationship good looking works out donates time at the ASPCA and has a food block assume you are not that person and recognize life is a series of trade-offs and if you get to a point where you have meaningful relationships, some economic security, a lot of people in your life that love you, then you have checked the most important boxes in the world. And to consistently look at that number around money and to consistently measure yourself against the most successful people you know on Instagram is kind of a recipe for a little bit of self-loathing. I'm sure your publishers were surprised in a couple of ways. One, that you followed up the book about technology with a book about happiness. But whereas your

first book was very analytical, this book is very personal. You share a lot about your own experiences, including one of, if not the toughest things we all have to deal with at some point, and that is death. You write very eloquently about the experience with your mother and, as you say, giving her a good death. I'm wondering if you could just share a little bit about that experience. So first off, thanks for saying that. And yeah, so the light of my life and the, you know, any success that I've registered is a function of two things. Being born in America where, you know, at least they used to kind of love the unremarkable. And I'm not being modest. I was a remarkably unremarkable kid and student. I got incredible opportunities through the

generosity and vision of the California taxpayers and the regents of the University of California that gave me undergrad and graduate education from UCLA and Berkeley at no cost. I mean, that is literally why I'm here speaking to you. And the second thing was the irrational passion for my well-being of a woman who came here on a steamship and lived and died a secretary. And so I think a lot about my mom. She was literally the light of my life. It was me and her against the world.

And losing her for me was just devastating and quite frankly kind of took me off track for a couple years. And as a heterosexual male that thinks of myself as a bit of a badass and an alpha male, or at least that's what I aspire to, it's not easy to talk about how much I miss my mom. And what I decided was my mom had made a huge investment in me growing up and that I was going to make a fraction of that investment, one, because I had the resources. And I want to acknowledge a lot of people aren't in a position to do this. But when my mom was diagnosed with terminal cancer, I decided I was going to take some time and move in with her and manage her health care. Because I said to her, what's on your bucket list? Thinking it was to go to London or to go to Wimbledon.

We knew she was dying. And she said, the only thing on my bucket list is I want to die at home. And that's not easy with terminal cancer. So I committed to helping her do that. I moved in with her at the seniors community in Summerlin, Nevada, and I spent the last six months of her life with her kind of hanging out, watching Frasier, looking through old photos, taking walks and just spending a lot of time together. And the rewards we get from raising children are pretty well documented. But I think kind of the undiscovered reward that people don't talk about as much is that if you can give someone you care about a dignified exit, it's hugely rewarding. I'm very proud of my kids. I'm proud of my professional success, but I also think that what I was able to contribute to giving my mom a good exit is something I'm just, you know, it just feels right.

It feels it was a signal of my success, my strong relationship with her, and I hope that my kids feel strongly enough about me and are successful enough such that they're in a position to make my exit more dignified. But if you're in a position, if you have the resources and you have the kind of relationship with a parent or someone who's on their way out, to invest in that relationship is enormously rewarding. And I know I'm doing a ton of virtue signaling right here. This is not an investment, quite frankly, I would make in my father. He wasn't as good to me as my mom. So it requires a certain amount of what I'll call, I don't know, at least for me, I'm not evolved enough to do it for anybody. but for my mom it was something that I just uh that I treasure and it was just a you know kind of a nice time in our lives it was a strange time during the day I was managing her health

her health care and at night I was going down to the strip and getting drunk with with guys and strippers and then during the day managing my mom's health care you know that's it doesn't make for a hallmark channel movie my life but it was a strange and rewarding part of my life so Anyways, I think there's huge ROI in helping someone depart gracefully. Coming up, Scott Galloway's advice for the graduating class of 2019. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money.

Chris Hill talking with Scott Galloway about his brand new book, The Algebra of Happiness. All right, it's graduation season. What is the 60-second graduation speech that Scott Galloway is giving this year? Oh, gosh. Well, they haven't asked. Although I was the commencement speaker, the student commencement speaker at Berkeley. You know, look, if there's one key best practice, it's pretty straightforward. The largest study on happiness of its kind, the Harvard Grant study tracked 400 males over 80 years and they found the best practice across the cohort that was the happiest was pretty straightforward and that is the number and depth of meaningful relationships at work do you feel respected and admired and do you respect and admire other people

with your friends do you get a sense of joy and camaraderie and you to provide the same thing to them and at home with your family do you feel intense levels of love and support and just as importantly, do you know they feel that same level of intense support and love? And that is the key. And the first line of this academic study that distills the greatest data set on happiness ever registered is very straightforward, and that is happiness is love full stop. Your goal as a young person is to put yourself in a position economically, spiritually, and psychologically such that you can go all in on a group of people and not love them because you're getting something back you're either getting intimacy or sex or economic partnership but you decide to love people

completely and not keep score because that is the key to the universe the universe wants to prosper when a sun dies it comes back stronger the species must propagate so the universe creates incentives it makes food enjoyable it makes sex wonderful and it makes complete love and caring for others the most rewarding thing in the world so put yourself in a position to to experience the most rewarding thing in the world and that is to love other people completely you're not going to tell these young graduates to go out there and follow their passion oh my god that is such bull anyone anyone who tells you whether it's jeff bezos or steve jobs or any number of the billionaires that come speak to us this turn to follow your passion is already rich and the person on stage is telling

you to follow your passion usually got there and by you know in the business of iron ore smelting or software as a service for health care maintenance workers. Young people's job is to find something they're good at, invest the time, the energy, the grit, and the perseverance to become great at it, and then the accoutrements of being great at something, economic security, prestige, relevance, a certain amount of pride, that will make you passionate about whatever it is. It can be tax accounting.

Your key is to find something you like. Follow your passions on weekends. The book is The Algebra of Happiness, Notes on the Pursuit of Success, Love, and Meaning. It is available everywhere, and you should absolutely pick it up. Scott Galloway, thank you so much. Thanks for having me. Hey, before we wrap up, I want to tell you about three things that will help your investing life, and they are all free. First, did you know The Motley Fool has a daily news briefing?

If you've got an Amazon Echo or Google Home Assistant, just look for The Motley Fool on your Amazon Echo or Google Home app. Click subscribe, and you are good to go. You can listen to The Motley Fool's news briefing seven days a week on the smart speaker in your home. Second, have you checked out our new and improved YouTube channel? We've got short investing FAQ videos. We also do live events on YouTube featuring the analysts that you hear on this show answering your questions about stocks. Just go to YouTube.com slash TheMotleyFool. It's free to subscribe, and I'm confident you're going to find something that you are going to like.

Last but not least, check out our other podcasts. Please, Motley Fool Answers tackles the basic money events and challenges we face all the time. Rule Breaker Investing gives you a weekly dose of insights from our co-founder, David Gardner. those podcasts and more from The Motley Fool. Find them wherever you get your podcasts. As always, people on the program may have interest in the stocks they talk about. The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. That's going to do it for this week's edition of Motley Fool Money. Our engineer is Steve

Broido. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.