Motley Fool Hidden Gems Investing - Becoming Warren Buffett

Episode Date: January 27, 2017

Starbucks slows. Microsoft surprises. Apple sues Qualcomm. And Twinkie goes cold. Plus, Emmy-award winning director Peter Kunhardt talks about his new HBO documentary, Becoming Warren Buffett.   Learn more about your ad choices. Visit megaphone.fm/adchoices

This episode of Motley Fool Money is brought to you by Sure Payroll. If you're a small business owner, you know that payroll and payroll taxes can be a headache. Sure Payroll has simplified payroll services with just three easy steps online. To learn more, visit surepayroll.com slash fool and get a free quote. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill. I'm joining me in studio this week

from Million Dollar Portfolio, Jason Moser. From Motley Fool Pro and Options, Jeff Fischer. And from Motley Fool One, Ron Gross. Good to see you as always, gentlemen. Hey, hey. We've got the latest on industrials, restaurants, and more. We've got a preview of HBO's new documentary on Warren Buffett. And as always, we'll give you an inside look at the stocks on our radar. But we begin this week with big tech. Microsoft's second quarter results sent the stock to a new all-time high. And Ron Gross, we've been saying this the past few quarters, the cloud, getting it done.

It's all about the cloud. Isn't that a song? Yes, I think so. Azure up 93%, really impressive. A lot of other good news, too, though. The office productivity segment up 10%. Sales of Surface tablets, who would have thought, up 11%. So, strength not just in the cloud, but that certainly is the headline. That certainly is what's driving the stock, and Satya Nadella really deserves the credit for transforming this company. That actually is a surprise that Surface tablets are up 11% when you consider that their big partnership was with the NFL, and you had coaches coming out and complaining

about the device. Yeah, I was as surprised as anyone, but if you keep an eye out, they have been getting good reviews, and you're seeing more and more people talking about the Surface, so maybe I shouldn't have been as surprised. Everything on Microsoft, not peaches and cream, obviously, still have weakness in the PC segment, although better than expected. PC overall shipments were better than expected, which helped Microsoft. Cell phones, 76% plunge there. I don't think we're surprised about that. But overall, a nice report. I think the Surface tablet, the The benefit there is that I think it's a device you can use more for production. Most offices,

most businesses work on some Microsoft software in some capacity, and I think there's a simplicity there in making the transition from workplace to tablet like that. Whereas, with something like the iPad, it's not quite as work-friendly. I think Microsoft is doing a very good job sort of leveraging that professional work force there in exposing the surface's strengths. Ron, you mentioned Satya Nadella, his three-year anniversary as CEO is next week. Since he took the corner office at Microsoft, that stock has basically outperformed the market 3X. It's very impressive. What he said in this conference call, I think, is indicative of how he has performed. He said, no status

quo in any part of Microsoft. I think we can see the reorg really took hold. As you said, the stock is reflecting it. Not cheap anymore, 30X earnings. Not the most expensive stock in the world, but at a 5% or 6% earnings growth rate, you've got to be careful. Sure, Ron. Even though it's at 21X forward estimated earnings, it's still a market type of price. The stock yields 2.3%. Still, if I were a long-term owner of Microsoft, have more reasons to keep holding it now than you did many years recent. Alphabet's fourth quarter revenue came in just north of $26 billion, and Jason Moser, that just wasn't enough to impress Wall Street.

Yeah, I love the stock market. You tell any Joe Schmo out there that Google just raked in about $26 billion for the quarter, and they're astonished, and the stock market holds it against them. This is a big business, OK? The hurdles get more and more difficult clear because they continue to really, I think, perform wonderfully. As you mentioned, $26 billion. This is a search company, but when you go through the call and you see where they're placing their bets, their three big bets are YouTube, cloud, and hardware. I think the big question coming into this quarter, for me at least, was in the Pixel. We wanted to see if they were actually going to be able to pick up any market share, take advantage

of this opportunity with Samsung's misfortunes, there's not a lot of clarity there other than management kind of just saying, hey, we like where we're going, and we think we've got a great product out there, and we're figuring out ways to integrate it with our technology. And it's interesting, all of the talk we've heard over the past couple of years in regard to mobile, mobile, mobile, with Alphabet, with Google, it's becoming more about moving away from mobile and becoming AI first, artificial intelligence first, and figuring out ways to take computing over to that next dimension, so to speak. And that, I think, is what the Google Home device is a little bit about. I think that Amazon has done a lot of work there on the

Alexa front, the Echo front. That's the type of thinking that's really guiding this company right now. And I think that makes a lot of sense, too, because a risk here to keep in mind is that Amazon is launching a paid search product. And I think that's based on the fact that a lot of search for brands and products are already initiated via Amazon's website and apps. So, Google is figuring out ways to diversify their revenue stream, and I think that's a good thing. That's true. And ad revenue made up 89% of revenue last year, and this quarter it was 85%. So, it's still, obviously, the vast majority, but they are moving away from that, as Jason said. I wouldn't be surprised

if five years from now, ad revenue is more along the lines of 50% of revenue. A few years before this, even, and it was somewhere in the neighborhood of $95, right? But when the big push to mobile came, we saw they weren't able to charge the same price as before. Facebook, we saw it as well. Now we're seeing that come back again with YouTube, where you can't charge as much either on YouTube as well. And that's hitting the numbers and the revenue, obviously, as you said earlier, a behemoth amount of revenue. But still, it is taking a toll. And to be clear, so far with the Google Pixel phone, those aren't exploding, right?

They haven't been banned by the FAA? So far, so good. Shares of Starbucks falling on Friday after a first quarter report that featured the lowest same-store sales growth since 2009. It's still growth, Jeff, but that's a pretty long way to go for that type of stat. Yeah, U.S. same-store sales only grew 3%, which is still decent in a weak retail environment. But the company really blamed the fact that they have too much demand. Their new mobile order and pay, or MOP for short, not the best acronym.

It really isn't. 1,200 stores in the U.S. had 20% or more of their orders coming through mobile order and pay. So you're getting all these orders at once in the morning, and then the baristas are having a hard time filling them all. So instead of having a line at the register, you're having a mob at the pickup counter waiting for their drink. So that would slow down orders for everybody, and they say people left, left the line, wouldn't keep waiting for their drink. So anyway, they think that had the most effect on the weak same-store sales. I get that they're trying to put a happy spin on this, that, hey, there's just too much demand. But at the end of the day, lower throughput is lower throughput.

It's bad. And so they already took steps to alleviate this. They looked at the stores where it's working best, and they put those into practice. stores. And for newer stores, they're going to redesign the stores to account for the growing practice of ordering through your phone. They should probably drop a spy or two over at the Panera here across the street, because that is a setup where they've really kind of figured that out, right? There's the same problem. Too much demand, they couldn't handle it. They handled

it through technology and better training, and I think Starbucks will do the same. Yeah, they've done it in the past, they'll do it again, I believe. Overall, though, Chris, everything's going really well. China revenue up 18%. They're opening a new store in China every 15 hours, and plan to for years ahead. Wow. Caterpillar's fourth quarter results were better than expected, but the industrial giant cut guidance for 2017. Help me make sense of this, Ron. This is a stock that over the past year is up somewhere in the neighborhood of 65%. Exactly. I don't expect that from my blue chips.

I'm glad you phrased it that way. It's an interesting dichotomy. The stock performance doesn't jive with the results or even the outlook. This quarter's revenue was down almost 13%. They talked about continuing slump in mining and construction. There's two things going on. One, things were so bad that any type of recovery, you can end up seeing a bounce in the stock. But two, people are really hanging their hats, I think, to a large extent on Trump's policies, whether it's infrastructure spending or tax, and likely it's both in the case of Caterpillar. If there is a meaningful infrastructure plan, and if he does lower corporate taxes, Caterpillar will be a huge beneficiary of it. And you're seeing the stock

price reflect that. Be careful, though, because if you don't see one or both of those things, investors could end up getting hurt. Well, and we knew sort of coming into this year that a lot of that massive write-down that they had in China was, I mean, a lot of the work that the management team at Caterpillar has been doing over the past couple of years, is essentially trying to get that off the books. And it feels like now they're in a position where they can start the growth again. Yeah, $600 million impairment charge and lots of restructuring charges, and the employee count is down. They're leaner, they're in a position to really benefit once the mining and the

construction industries turn. But we've been saying that year after year after year, it hasn't happened yet. Eventually, it will happen. The strong dollar, especially since Trump was elected, is another drag on their earnings, another reason they had a lower guidance for this year. Do we need another word besides impairment? An impairment charge sounds like 50 bucks on a monthly bill that you get in the mail. 600 million. If it's that many zeros, I don't think it's impairment anymore. Maybe it changed my mind, right? I mean, we just have to change our mind. Coming up, the food innovation you didn't know you wanted is here. Details next. This is Motley Fool Money.

Chris Hill here in studio with Jason Moser, Jeff Fischer, and Ron Gross. Not everyone had a happy holiday. Mattel's fourth quarter profits came in much lower than Wall Street was expecting, and shares of The Toymaker down 17% on Thursday. Jason, new CEO Margaret Georgiades starts her job in two weeks, and she has really got her work cut out for her. And Hasbro's probably looking and saying, thanks a lot, guys! Thanks for nothing! There was a little bit of a drive on their stock, too. Yeah, Mattel's earnings certainly bled into Hasbro for really no reason at all. I mean, I don't want this to all be on Mattel.

I mean, this wasn't just a Mattel-specific thing, as we've seen numerous challenges in retail from this holiday quarter. But with that said, Mattel is clearly a company in crisis, and I think new leadership stepping in is sorely needed. So, I'm cautiously optimistic there, at least. But I think, we've said this before with Mattel, the success there is really about identifying the quality IP that's out there in the world and hitching your wagon to that star. And so, a perfect example of not doing that, Chris, was when they lost that Disney Princesses deal. And you could even see in the release where they excluded the Disney Princesses deal to normalize their earnings, the revenue for the year in the quarter. It just wasn't good by any measure. So, I think with Mattel, the picture going forward looks challenged. They're kind of

trying to right-size the business a little bit. They're going to be stuck with a glut of inventory here. They're going to see some pressure on margins early in 2017. Guidance for 2017 is still in limbo. And I think that's what has the market really scared today, and rightly so. Clearly, Mattel is still trying to figure out how to make that leap into the digital age, whereas Hasbro, I think, has done a much better job with it. We will sort of wait to see how their results come out. Qualcomm's first quarter results got overshadowed by the lawsuit Apple filed late last week, accusing the chip maker of extortion. I'm not a lawyer, Jeff, but there have to be at least a few people who think that Qualcomm

is in trouble, because their stock got a 15% haircut. It's a pretty strong hit. Personally, I would not want to buy Qualcomm right now, even on that hit. I don't want Apple as my enemy. And the complaint, which runs 104 pages in length, it's like seeing the sausage made. You don't want to see that, generally speaking. For the past many years, the Qualcomm-Apple agreement maintained that Apple had to be quiet. They couldn't speak out against Qualcomm or its practices or whatnot. And Apple had an exclusive agreement to only buy Qualcomm products. That agreement's over, and now Apple is coming out punching saying over all these years you you did this you did that you did this

basically accusing them of unfair trade practices unfair pricing and royalty schemes and yes extortion there apple is claiming that qualcomm tried to extort apple into changing apple's responses when it was talking to the korean fair trade commission in regards to a case there against qualcomm only if apple would change what it was going to say would qualcomm pay it some royalties Apple refused and forfeited those royalties. Now, it's suing for that, in part. So, it's an ugly lawsuit. I wouldn't want, again, to be on the other side of the table against Apple. No thanks. Yeah, this is definitely a lot spicier than what we normally see when one tech company

goes at another. Usually, it's some sort of copyright infringement or something like that. You see the word extortion leap off the page. That gets your attention. Well, and Apple is now buying some modems from Intel, who is a few generations behind Qualcomm in quality, but is there. It's good enough, and the price is much lower. So, expect Apple to keep trying to get supply from elsewhere, because you don't have an enemy like this and want to keep giving it money. McDonald's fourth quarter profits and revenue both came in higher than expected. Global same-store sales came in over 2.5%, and yet the stock was flat, Rob. What more

do they have to do over there at the Golden Arches? This is a good quarter! I think it was a good quarter. The U.S. remains a bit weak, and the same-store sales falling 1.3% is a reflection of that. That's just in the U.S. Just in the U.S., but it doesn't tell the full story, because you've got to give them a little break, because they anniversaried all-day breakfast, which was real strong for them last year. So, you see that reflected in the same-store sales in the U.S. But, having said that, the U.S. is weak, and they need to take certain steps to improve it. One of those things is going to be what they're calling Experience of the Future, which is a horrible name. It sounds

like the World's Fair or something like that. But it's really taking a play out of Panera's playbook and putting kiosks into the stores, improving service, using technology. You can customize your meals easier. So, it'll be really interesting to see when that's introduced into the U.S., if that makes a nice improvement. O'Reilly. Interesting, Ron. Starbucks is doing that, too, with personalized orders through your app. Everything's becoming, it was mobile, now it's geolocation, and now It's becoming personalized. McDonald's trying to capture some lightning in a bottle, right?

And by lightning, I mean special sauce. 10,000 bottles. What is this promotion they're doing? They gave away 10,000 bottles of their signature Big Mac special sauce. They've never done that before. I think it was actually done already. It's already done. So if you didn't get yours, tough luck.

Our friends over at the Howard Sturge Show probably got half of them because they love their Big Mac special sauce. But I'm not a condiment guy, so it's not something that interests me. Are they our friends? Absolutely. Have we checked eBay? I have to believe that at least one or two people who picked up a bottle of this sauce are going on eBay. Well, this was the deliberation for the week.

I mean, they were talking about, do I open it and eat it? Do I save it? I mean, I think clearly, I mean, Mac and I were on opposite ends of the spectrum here where this argument came down to. But you keep that bottle. I mean, they're numbered. I mean, it's something like, hey, so what if it goes bad in 10 years? There's somebody out there who's going to want it. I'm thinking, that's not going bad ever.

But they're making an extra bottle, too. This is very interesting. They're making, actually, 10,001 bottles. The last bottle they make, that extra bottle, they're going to auction off, and all of the proceeds will go to the Ronald McDonald House. So, I'll be very interested to see how much that bottle actually ends up fetching. And it does come at the same time as two new Big Macs are introduced, the Grand Mac and the Mac Junior.

So, for you enthusiasts of the Big Mac. You nailed it, though, Chris. eBay is marinating in this sauce everywhere. I see bottles from $100 to $1,000. And your cost basis is zero. You get nothing but upside. And it's Thousand Island dressing, basically. I was just going to say, this is not a bottle of wine or fine whiskey that's going to get better with age.

But they put a number on the bottles. Shares of Hostess brands up this week. And why not when you consider the news that Hostess is teaming up with Nestle to bring you Twinkie ice cream. Yes, guys, starting next month in convenience stores across America, you can find not just Twinkie-flavored, but other Hostess-inspired ice creams, including Snowballs and Hostess Cupcakes ice cream. I'm not going to lie, I'm interested in Hostess Cupcakes ice cream. That sounds pretty good. Yeah. I mean, if I see that, I'm picking up a pint or two.

I bet it does well. I think there'll be demand for it. I don't know if it'll last, and I don't know how good it'll be, but I bet it flies off the shelf in the beginning. Let's go to our man behind the glass, Steve Broido. Steve, three ice creams, Twinkie, Snowballs, Hostess Cupcake. You're picking up one of those three, aren't you? You're going to give one of those a shot. I think it'd have to be Cupcake. Twinkie doesn't feel cold to me. That feels like a warm snack. It doesn't feel like a cold snack. I don't know. It seems like to me, you get those Snowballs, and your ice cream, and it

gets all chewy, and it's like, eh. Given my druthers, I think I'd rather have the Cupcake. The Cupcake one really looks like a really nice chocolate with a marshmallow swirl. I I don't know. If I'm betting on one, I'm betting on that. You had me at Marshmallow Swirl. I wonder if it's a counterclockwise swirl. I think, yeah. They say it's limited edition, but come on. With any of these things, it's limited edition unless one of them is a big seller, and then they go for it. Has anyone looked at Hostess stock in a while? Obviously, they had their troubles

and they were private, and now they're back. I don't know, from a stock perspective, if this is anything to look at. This may be the buy signal. All right, guys, we'll see you later in the show. Up next, award-winning director Peter Kuhnhardt talks about the new HBO documentary Becoming Warren Buffett. Stay right here. This is Motley Fool Money. All right, before we get to my conversation with Peter Kuhnhardt, got to say a word about sure payroll. If you're a small business owner, you already know payroll can be a headache. Small businesses pay hefty fines on a yearly basis due to payroll oversights. Now you can

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So, go to SurePayroll.com slash fool and fill out a free quote form. And now, let's get to Peter Kuhnhardt. Welcome back to Motley Fool Money. I'm Chris Hill. Peter Kuhnhardt is an Emmy Award-winning director. His latest documentary premieres on HBO on Monday, January 30th. It's entitled Becoming Warren Buffett. Peter joins me now from New York. Thank you so much for being here. Thanks, Chris. I'm glad to be here.

I have to thank the nice people at HBO because of their efforts. I was able to watch an advanced screening of your documentary last night, And I was, I have to say, I was surprised at how personal this film is. It includes home movies of Warren Buffett and his children and his wife. And that leads to my first question, which is, how did you get this level of access to someone like Warren Buffett, who has to have been in huge demand over the last 25 years in terms of people wanting to tell his story? He gave me an hour to come in and speak with him. But I then asked him for a follow-up, and he granted me that.

And over two years, we ended up going to Omaha five times. And so the trust and the relationship grew over that time. And about halfway through, I told him that we just didn't have the visuals to tell his full story. And he said, I'm going to give you everything I've got. And his daughter, Susie, is the keeper of the family archives. So we took two cars over to her house, and she pointed to the closets and the drawers, and we just emptied everything and scanned everything they had, all the albums, all the pictures, all the headlines, and transferred all the home movies, which hadn't been seen before. And there was no, to Warren's credit, there was no filtering. There was no saying, let me look at this first to make sure this is okay for you to see.

He just said, whatever you want, you can use. and we spent a week scanning it all and I think that's what brings kind of that visual difference to this film that people have not seen before. There are a couple of key influences in this film that are really brought to light, one on the personal side and one on the investing side and let's start with his late wife Susie because she is as much at the center of this film as Warren Buffett is. And I was thinking about the, you hear often that, well, you can't really change who people are. But after watching your film, it's clear that she changed Warren Buffett. I'm curious if you could share a couple of thoughts on the ways in which she changed him.

Yeah, she, they, he was 21 when they, when they married, she was 19. And he was totally fixated done his work and uh just um he was all brain and no social skills he had a very hard time uh get getting along with with with with kind of the regular things in life she was all heart and i think she she said warren was my first patient and i wanted to help him become kind of a more well-rounded human being and she just molded him and helped him and taught him how how to respond to people and how to trust people. By the end of the film, after we've heard the story of Suzy Buffett and Warren, he says that he never would have been able to be as successful as he was without Suzy, that she

was the reason Berkshire Hathaway has become what it's become. So he gives her as much credit as he gives himself. And I think that's one of the reasons Warren is pleased with the film is I don't think that's really come out before. I think people have loaded him with credit, and he's always known that Susie deserves a good part of it. The other person on the investing side is Charlie Munger. Yeah. And I guess I had never really clued into the ways in which Charlie Munger has not only been an amazing business partner for Warren Buffett over the decades,

but the way in which he appears to have changed Buffett's investing approach. When they meet, Buffett is really a guy, as an investor, who's going after the so-called cigar butt stocks, the companies that are on their last legs, but they've got one more tiny bit of value out of them. Munger comes along and really seems to open his eyes to a larger world of investing. Completely right. And so for years, Warren made a lot of money on these small companies that weren't very interesting or glamorous or even profitable. But as you say, they had a few more tokes of smoke out of these little cigar butts. What Charlie did was open his eyes to good companies at decent prices instead of medium companies at great prices. And he taught him that over time, by investing in franchises and brands that were trusted and part of the culture, that Warren could do much better.

And Warren credits Charlie with opening those eyes. And if you look at the spike in Berkshire value, it's an upward movement. And then suddenly, when they shift philosophies in investing, it just spikes upward. So Charlie was right, and Warren, that's now what he does and what he's famous for. One of the things that Buffett is famous for in investing circles is his temperament. he has said before that when he mastered his temperament, that was a huge turning point for him as an investor. And yet, I was struck by something that is illustrated wonderfully in your documentary about his acquisition of Berkshire Hathaway. And it appears, if I'm understanding

correctly, it appears to be based on a very emotional moment in his life where he's a shareholder of the company. The company's management is trying to squeeze just a tiny, like an eighth of a share extra out of him. And he reacts pretty emotionally and decides, you know what, I'm just going to acquire more shares and get these guys out of here. Exactly. He was uncharacteristically Buffett at that time. He did what he preaches not to do, which is to bring emotion into his business dealings. And Charlie Munger comments that it was just he couldn't understand what he was doing, and that eighth of a point didn't make any difference.

But Warren, during his interview, said, you know, as I think back to that moment, I realize it was five days after my father died, and that must have had an impact on me. He was very, very close to his father. he he he's still very close to this to this day he sits at his father's desk he hangs his father's portrait behind his desk he he lives and breathes the principles and ethics and morals that his father taught him so he's he's extremely close to his father and i and i can imagine the impact he it his death had on him so when i asked him if he could talk about the last conversation he had with his father. He just said, no, I can't. What that illustrates to me is that Warren Buffett is

hugely emotional right beneath the surface. He's able to keep his emotions out of business, but just beneath the surface, he's a very human, very emotional guy, and I think showed some of that in this film. The documentaries you've made before this have largely focused on political figures in U.S. politics. What got you interested in making a documentary about Warren Buffett? Well, I think Warren has the same largesse that many presidents have, or social activists have, that we've covered in the past. I was just struck by the human story, and I'm not a finance guy. I don't know much about finance, but I was intrigued. How could he grow up to become who he became?

So we really base this film on exploring his childhood and the changes he forced himself to undergo to become who he became. And like these other characters we've covered in the past, he has a heroic story in a way. I find it very moving when somebody can change who they are, and Warren has changed who he is a few times, and has really grown with the times. He's a very different man now. Carol Loomis from Fortune actually said she was lucky enough to be with Warren when he was becoming Warren Buffett. That's where we got the title from, and she said he's just a much bigger and better man than he was before.

Well, one of the ways that it seems like he has not changed, though, is his attraction to numbers, which right out of the gate, just as a kid, he was drawn to numbers. And as a businessman in his 20s and 30s, and really finding his footing as an investor, he was a numbers geek at a time when it was a lot harder to be a numbers geek. You had to do a lot more work. There's a lot more reading, there's a lot more work just with a pencil and a pad of paper. It's much easier now when you can get an Excel spreadsheet and let the computer do the work. But it appears as though that attraction to numbers and literally shutting the door to his office so he can just sit and read and focus, that appears to have not changed at all.

That's not changed a bit. You know, his son Howie said to me, my father's like a computer, his mind's like a computer, but the hard drive never runs out and warren warren reads constantly and and keeps adding data to his brain and i asked him what i said i know you kind of think in terms of numbers what does it look like to you in your brain what what are you seeing what are you visualizing that the rest of us aren't and he didn't have an answer for that but clearly he's seeing something very clear and um when i i Shortly before we aired the film at the premiere in New York last week, I sent it to Warren to look at beforehand, and he spotted that on one of the charts, I had left three zeros off of the total value of Berkshire Hathaway. So we had this typo, and there were a lot of zeros in it, and it looked pretty zeroed out to me.

But Warren's eye went right to that, and it was the only comment he made. So he's skilled at looking at numbers. What leads him to decide, I'm giving away my money, 99% of it, and I'm going to give it to the Gates Foundation? It's going to some other foundations as well, but largely it is going to Bill and Melinda Gates for them to spread out across the world. What leads to that decision? I think it was, for many, many years, it was a rational planning process that he went through. He formed a foundation in the 60s. He always intended to have his money go back to society.

He fought with his wife, Susie, about when to do that. She wanted to give it away sooner. He wanted to keep hold of it longer so it could compound and make an even bigger impact. And when Suzy died unexpectedly, all his plans were extinguished. And he thought, what am I going to do now? And he came up with what he thinks is the perfect solution, which is to turn to his great close friend Bill Gates, who thinks a lot like he does, and is one of the best people alive who knows how to give away money. So Warren wanted to continue to make money and turn to somebody who he could trust to give it away. And I think the catalyst was the death of Susie, because one year afterwards, he made the

announcement. It really does seem like their partnership, even though they remained married for many years, they were living apart for decades. But there was something connecting the two of them that enables him to continue to grow emotionally, it really seems like that is the catalyst that leads him to Bill Gates. Completely. And, you know, when Susie got mouth cancer in San Francisco, and Warren, who doesn't, you know, he, for the most part, he sticks to his routine, but he got on a plane and every week spent the weekends with her as she recuperated. He learned how to be there for her and how to just kind of sit and hold her hand and comfort her. So that same Warren wouldn't have done that 40 years ago. That's a new and

very different Warren. And so she was, I think it's a sweet end to a love story. And I do see this film as a love story more than a business film. It's just a sweet way to see how much he had changed and how much he had grown. Last question, then I'll let you go. One of the things that his daughter, Susie, mentions about her father, and she's the oldest of the three kids. Yes. One of the things that she mentions is him singing to her and singing, in particular, the song Somewhere Over the Rainbow, the closing credits of your documentary include Warren Buffett singing Somewhere Over the Rainbow. Where did that recording come from?

Because that couldn't have been stuck in a closet somewhere. Well, actually, it was. So Susie told that story to us, and when we got into the editing process, I told her we were going to use the story, and by any chance had Warren ever recorded it. And she said, you know, he once sang it to me in a karaoke bar. And we did make an audio tape, but it was decades ago, and I'd have to look for it. And I said, that would be very important to us if you could find that. So she dug through her stuff one weekend and came upon it.

And once we heard it, we knew it was the way to end the film. Now we know what his karaoke song is. That's right. The new documentary, Becoming Warren Buffett, premieres on HBO on Monday, January 30th at 10 p.m. It's fantastic, so watch it. Peter Kuhnhardt, thank you so much. Thank you. I enjoyed it. Coming up next, we'll give you an inside look at the stocks on our radar.

This is Motley Fool Money. As always, people on the program may have interests 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 in studio with Jason Moser, Jeff Fischer, and Ron Gross. You can check out past episodes of Motley Fool Money and all of our podcasts. Just go to podcast.fool.com. And while you're there, you can test drive Rule Breakers, which is David Gardner's growth stock service. The latest issue is out with two new stock recommendations from David Gardner and his team. You can check it out by going

to podcast.fool.com, and just scroll down to the bottom of the page for more details. Alright, let's get to the stocks on our radar. We'll bring in our man, Steve Broido, from the other side of the glass to hit you with a question. Ron Gross, you're up first. I've got Verizon, VZ. Stock dipped on not a great earnings report recently. Stock's off 8% this year. But I actually think that's a good entry point for this stock, with a 4.7% yield, trading only at 15X earnings. In my mind, clearly the leader, both from a technology perspective as well as a subscriber perspective. And even though there is a price war going on, and they've had some drag in their subscriber additions, I think this is

a good stock to own for the long-term. Steve Broido, question about Verizon? Sure. Do you think Verizon has the best coverage in the country right now? You hear that all the time because of Verizon Wireless. Yeah. If you watch the commercials, they'll all say that they're within 1% of each other at this point, but I believe that the coverage of Verizon is superior, yes. Jason Moser, what are you looking at this week? Sure. Amazon earnings are coming out next Thursday, February 2nd. Ticket is AMZN. We talked a lot about how tough of a holiday

quarter it's been for a lot of retail. I can't help but wonder if Amazon has been part of the reason why. I'll be very interested to see how that shakes out for them. Echo has seem to really be the buzz lately, especially around the Consumer Electronics Show. They continue just to build up functionality on that thing. They're planning to hire 100,000 employees in the coming 18 months, building a new fulfillment center in Colorado. I think the bear side of this wants to argue the cost. I think that's just not the right way to look at it. I mean, Amazon is skating to where the puck is going, and in some cases, it seems like they're the only ones on the ice.

Steve, question about Amazon? How big a role does Amazon Web Services play in your predictions for the future? Well, I think Amazon Web Services, we've seen estimates that it could be anywhere from $100 to $200 billion business when it's all said and done. But the attractive part right now, as they continue to build it out, it brings in 30% or so operating margins. And so, it'll continue to be a growing and very profitable side of the business. Jeff Fischer, what are you looking at this week? Whirlpool tickler. Tickler?

Tickle the ticker. The ticker is WHR. It's the largest home appliance maker in the country. And the stock fell more than 10% this week after earnings came in a bit light because of Britain. We're seeing, actually, an effect of Brexit hitting business over there, and the weak pound as well. But, what I like about Whirlpool as well is, almost everything that it sells in the U.S., whether it's Maytag or KitchenAid or JennAir, it makes most of it in the U.S. as well. So, it's a manufacturer that, wherever it's selling, is typically locally manufactured as well. Steve, question about Whirlpool? How do you select an appliance at an appliance store? If you're buying a refrigerator,

what are you looking for? It's a great question, Steve. I go to reviews. I actually would pay up for consumer reports and get in-depth reviews when I'm buying something expensive like that. Whirlpool, Amazon, Verizon, three well-known, very different businesses. Steve, you got one you want to add to your watch list? Well, I've got Verizon and Amazon, so I may throw Whirlpool in there. All right. So, I think you'll be happy with your choice, Steve. Maybe. Have you bought any big appliances recently, Steve? Unfortunately, yes. What'd you get?

What'd you get? A fridge. We bought a dishwasher. Yeah. You sound really happy with those purchases. It was very expensive. Did you get the automatic water dispenser in the fridge? Yeah, you bet.

Nice. Do they even make them without that? They do, yes. All right. Ron Gross, Jason Moser, Jeff Fisher. Guys, thanks for being here. Thank you, Chris. That's going to do it for this week's edition of Motley Fool Money.

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