Motley Fool Hidden Gems Investing - Marriott’s Rough Reception

Episode Date: November 30, 2018

Marriott gets hacked and as many as 500 million guests could be affected. General Motors announces it's cutting 15% of its workforce. And Tiffany loses some of its sparkle. Analysts Andy Cross, Ron Gross, and Jason Moser weigh in on these stories and discuss the latest from United Technologies, Abercrombie & Fitch, Salesforce, Dick’s Sporting Goods, and Burlington Stores. Plus, toy expert Chris Byrne takes stock in some hot toys for the holidays. Go to www.Harrys.com/FOOL to redeem your offer and let them know we sent you to help support the show! And thanks to Slack for supporting Motley Fool Money. Slack: Where work happens. Go to slack.com to learn more. 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. Hey, Chris. We've got the latest headlines from Wall Street. We will dip into the Fool mailbag, and as always, we'll give you an inside look at the stocks on our radar.

But we begin with the latest hacking target, this time from the hospitality industry. On Friday, Marriott announced its guest reservation database was hacked for information on approximately 500 million guests. Jason? That's a lot of guests. That's a lot of guests. I was going to say, is that a lot? It sounds like a lot. They are still trying to figure out if credit card information was obtained, but probably worth pointing out, shares of Marriott down more than 5% Friday.

Yeah, and it's worth noting, too, I was reading, they did stand by that any payment information that could have been breached was encrypted. So, there's that, I guess. But to me, we'll make probably a bigger deal out of this in this studio than most consumers out there will make of it. And I think it's really just because in this age of social media and everybody feeling compelled to share every little facet of their life, if you're walking around at this point in the game in denial that your data has been breached in some way, shape, or form, I got a bridge to sell too, because I think that's just something you've got to get used to. We talk about these data breaches. It's not a matter of if, it's a matter of when. With this Marriott's breach, I mean,

they got some fairly innocuous information, I think. And I mean, I don't know that it's going to be any real problem. It's a big audience because with the acquisition of Starwood, the real catalyst between that deal was building up this big loyalty program from the two separate entities. This could ding that a little bit in the short run, perhaps, if loyalists feel like they want to be a little bit more careful with their information. But I think, if anything, at the end of the day, what it really does is it reiterates that we as consumers, now more than ever, you need to be checking your credit record on a consistent basis, whether it's annually, semi-annually. I mean, credit card companies out there now give you deals where you'll get

your credit record every quarter. I do that with American Express, for example. Just keep on top of your information and understand what your credit record looks like, I think that'll keep you safe. I will just say the New York Attorney General is going to open up an investigation. So I think this does, you know, the fact that they just first got wind of this in September, took them a while to kind of figure it out. You mentioned, Chris, they're still working on some things. It is a knock to Marriott. And I do agree with Jason. I think long term, it probably will not matter as much for the customers that continue to use Marriott, especially the rewards program. But if we start to see more and more of these things, it does start to have a compounding effect.

We certainly saw that with Facebook over the last year. Big question for me is next time you go to book a hotel, do you shy away from Marriott or Starwood property because you are concerned about the data breach? I think a very small percentage of folks will pass and move on to a different hotel chain. I don't think it will have a huge impact, maybe a blip. Biggest problem with Marriott is that they only have double beds in their rooms. I like a queen or a king. So, if they really focus on that, then we'll move on. Need a little extra room to stretch out every now and then, right?

To the loyalty program, I mean, it does seem like, Jason, this is an opportunity for Marriott and particularly their management team and their communications team. Because I agree with everything you guys said. But it seems like if they don't manage this from a communication standpoint, if they don't reach out to their loyalty members, then they could have a self-inflicted wound. Yeah. And I mean, I may be a loyalty member. I honestly don't know. Well, Ron is clearly not. Clearly not. But I mean, in any time I ever book, it goes through booking.com,

and I just go over the, you know, give me the best deal usually. But yeah, I do agree that in this case, they have the opportunity, because they have the information on all of their loyalty club members, they can reach out and really, really take control of the narrative here, which is important, because we've seen in other cases with breaches like Equifax, for example. I mean, it can be argued that they didn't exactly handle that one with as much grace as they should have. So, a big opportunity for them to get a little bit more high touch with their consumers, and that obviously does matter to a lot of those loyalists.

So, speaking of the loyalty program that I am not a member of, the Starwood credit card is a very, very popular card, probably the one or two top cards that I see of people that I hang with. The question is, are people going to be shy about using that card, or are they going to have to get a new card because their number has been compromised? That's never fun to do, and that creates a whole big chain of events and a problem for both the credit card company and Marriott. So, you know, I think the credit card part is obviously usually the biggest deal.

Earlier in the week, General Motors announced it is laying off 15% of its employees and cutting production at five plants in the U.S. and Canada. And, Ron, we hate to see these type of job cuts, but it's clear that CEO Mary Barra and her team, they don't have a lot of options. They don't have a lot of options. It's always painful. But if things are not operating efficiently, you've got to make a move. And here, you have factories that are operating on a single shift to build models that really have fallen out of favor, specifically the sedans, the Buick LaCrosse, the Chevrolet Impala, the Cadillac sedans. So what are you to do? Are you supposed to continue to run your business

inefficiently to save jobs? Or do you do what you have to do, make the painful decision, hopefully relocate a lot of these folks to other plants? That would be wonderful if that could happen. But unfortunately, these things are painful. You need to take the business into account. You need to take shareholders into account. You need to run the business efficiently. Now, you know, Trump has come out and said, well, you know, you're going to do this. We're going to start looking at the subsidies. And, you know, it's two separate things. It's one, run your business as efficiently as you can. And two, are subsidies necessary? To me, they're not the same thing. You have to look at both independently. United Technologies finally made it official.

The industrial manufacturing giant is splitting itself into three companies. United Technologies will be the aerospace business. Carrier will be the heating and air conditioning business. and Otis will stick with elevators. Did you say elevators? Escalators. Oh, yeah. Andy, this is a $100 billion company. If I'm a United Technologies shareholder, am I happy about this move? Well, Chris, I think it was Neil Sedaka who said that breaking up is hard to do, but apparently not so much for United Technologies or, frankly, for industrial America. I mean, we're seeing this at Dow DuPont's going to split up and, gosh, General Electric's probably should have done that a long time ago.

I think it is good for shareholders. The stocks reacted a little bit negatively. I think that's just more because this has been expected really for about a year they've been talking about this, if not longer. The splitting into three businesses, now that they bought the Rockwell Collins Aerospace business for more than $23 billion, bring that into the family. There's really very little synergies, I think, between the three businesses. They operate in so different categories. It allows investors to be able to focus on where they want to put their capital, allows the management teams to more effectively run those businesses. Those businesses are all fairly cyclical. I mean, the Otis elevator business and the Carrier HVAC business,

they're very tied to housing and real estate. So, they lose a little bit of that cushion that you get from a conglomerate. But the benefits from getting those businesses separated and the management teams being able to run those businesses more effectively as independent businesses, I think is smart. And I think, ultimately, shareholders will be rewarded. I'm not super excited to jump into the stock now. I would wait. But I think, ultimately, it's going to benefit them. Yeah, agreed. Sometimes conglomerates make sense if there are synergies. We hate that word. But if there are synergies across businesses, or if there's a decentralized structure, such as a Berkshire Hathaway, where he has top-quality

CEOs in charge of each individual business. In this case, the cost structure, the distribution models of each business are quite different. So, it makes sense. And it's kind of another win for Dan Loeb, activist investor, who's kind of been pushing for a shakeup at United Technologies for a while. Disappointing third quarter for Tiffany. Overall sales came in light, and shares of Tiffany down 12% on Wednesday, Jason. Yeah, I mean, it was falling from, really, what had been a strong year to date. And I I think the main reason, I think the bigger question with the business, at least in the near-term, centers around whether management's going to be able to hit the full-year guidance

that they offered last quarter. If you remember last quarter, they actually raised guidance based on what they felt like was an improving consumer environment, particularly in the luxury space. Fast forward to this quarter, there are some headwinds there, particularly in the Chinese consumer, both at home and abroad. That matters because the Chinese consumer accounts for about a third of the global luxury market. They are going to invest a lot of money here in the coming year in their New York flagship store. So, that's going to play out on the expense side a little bit. But you look at all of this and you say that, well, the one thing Tiffany continues to do so well is protect that brand, right? They don't resort to fire sales. They don't try to unload a bunch

of inventory on the cheap. And in protecting that brand, that really protects their competitive advantage. So, I mean, last quarter, we were looking at this and saying, you know, this is a stock where you really want to look at buying it when the pessimism is at its height, when the stock is really getting hammered. And the stock was around $125 back then when we were saying that. Fast forward to today, and it's obviously gotten shelled here. And I think that with a business that has a very proven track record in maintaining the brand and the business itself, this is probably worth a look for investors today. This might be that little window of opportunity. More headlines after this. Stay right here. You're listening to Motley Fool Money.

easier to actually get stuff done. With Slack, your team is better connected, and you can find out more at slack.com. We've been using Slack at The Motley Fool for years, and it has cut down dramatically on the internal email. It's fantastic. It saves time, it improves productivity, it's so much easier to share information with other people here at The Motley Fool. It works with Google Drive and Salesforce. You can tailor it to work with over 1,000 apps, and the mobile app is great. iOS, Android, Slack, where work happens. Find out why at slack.com. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Andy Cross,

and Ron Gross. Shares of Abercrombie & Fitch up nearly 30% this week after third quarter profits came in higher than expected. And Ron, Abercrombie's management was pretty bullish on the holiday quarter, too. Ron Grossman. You thought mall stores were dead. You all were so wrong. No. This is a good quarter, and there's a lot to be happy about here. Stronger than expected sales growth is allowing them to reduce the number of stores they plan to close, which is an interesting thing to be excited about. But nevertheless, they're going to close 40 stores instead of 60. So, things aren't as bad as they thought. They're excited about the holiday season, as you mentioned. They saw performance that was strong across

their brands. They were able to renegotiate leases, which obviously cuts down costs. Comparable store sales up 3%. Their Hollister, same store sales, they own the Hollister stores as well, up 4%, with the Abercrombie being weaker at 1%. So, that averages out to 3% overall. Digital sales up 16%. Interestingly, 75% of their online traffic comes from mobile devices, which tells you something about their client base, certainly a younger demographic. They're turning them around the business, they're renegotiating leases, they're cutting costs. It's accruing to the bottom line, adjusted EPS up 10%, 3.8% dividend yield right here. So, not too shabby.

Pretty interesting that Hollister is doing the heavy lifting on this, not unlike what we've seen over the past few years with Gap, where Old Navy is the one really driving that business. Yeah, and it leads one to think, well, are the other businesses really even necessary? or should you focus on the company that's most profitable? I mean, would you say with Abercrombie & Fischer's, this was less bad? I mean, it doesn't sound like it was great. It just sounds like it wasn't as bad as maybe people would be expecting with a teen retailer, right?

I mean, we put those things with a ringer on this show many, many times. So, I mean, do you look at that as a company where you think, OK, maybe this is one I'd want to consider owning, or is it still eh? I don't think I would want to own it. Mall-based retailers are still tough, are very tough, especially when you get into the fashion aspect of it. It is less bad. Nothing wrong with a 10% growth in earnings per share, but things are still going to remain difficult. And this is just one quarter, one holiday season. Let's see what happens next year.

After a strong third quarter report, shares of Salesforce.com up more than 10% this week. Andy, last quarter, there were some questions, I would say, about growth slowing at Salesforce.com, and this report seems to have answered some of those questions. And Salesforce just continues to be a very impressive company. The clear leader in consumer relationship management software that it sells is $100 billion. MarketCap does $13 billion to $15 billion in sales this year. I mean, you look at the growth that they are expecting, the number of deals that are now generating more than $1 million in sales during the quarter they signed was up 46%.

And future revenues under obligation growth was up 34%. That's a little bit lower than last quarter, but still very impressive. They continue to be the leader in this space. It's a market that has huge, more than $100 million potential market opportunity for this space in general. Salesforce is really, even at the largest size that they are, at $100 billion in market cap. I feel like the growth prospects are still out there. And Mark Benioff, who is the leading shareholder, owns more than 4% of the company. And he's just a real legend in the Silicon Valley space.

continues to have bold aspirations for Salesforce. And I think they're continuing to meet the demands that are set out there that are very healthy, but deliverable. Shares of Dick's Sporting Goods up slightly this week after a solid third quarter report. Not a great report, Jason, but it does seem like when you think about how rough 2017 was for Dick's Sporting Goods, it seems like they're working their way back. Yeah, that's fair. I think it was a better quarter than probably a lot of us we're looking for. And I mean, I would view this as a big win for them in the face of what I think is going to become just a more challenging environment for them in the coming years, as you look to all of these big brand names and their developing of their own direct-to-consumer

offerings. I mean, that really gives you less of a reason to go to a Dick's Sporting, to be honest with you. And so, they're answering that call by coming out with more private brands, and they have a new private brand they're very excited about that'll come out next year. I didn't really shed too much light on that on the call, but it's worth noting that e-commerce for the business, approximately 12% of total sales versus about 10% a year ago, so nothing wrong with that. I wouldn't look to this company to be growing their store count by a whole lot here in the coming years, because it is fairly mature at this point. They are going to have to continue competing on pricing, and that's going to play out on the margin line. So, you look at

the stock today, it's trading at around 11X full-year estimates. I mean, that's for a reason. I mean, it could be either a value trap or a value play. I tend to lean towards the former there because I'm just not sure I see the catalyst that takes this thing forward, particularly when you consider the consumer environment today. I mean, it's really not a bad one at all. Consumer confidence is high. Unemployment is low. I mean, we should really be seeing companies like Dick's performing a little bit better than they are. But all things considered, it's still pretty good. Well, in the same way that when we were talking about Toys R Us going bankrupt and companies like Target and Walmart sort of picking up the slack there, who's picking up the slack

in this industry? Because, I mean, is it the same players? Is it Target and Walmart just doing a better job? No, frankly, I think it's the brands themselves. I mean, you're seeing strong performance really from Nike and even Under Armour is getting that North American segment turned back around as Welles. Whether it's Adidas, Nike, I think the brands themselves are taking advantage of that and really trying to build their own identities in the space. And it seems to be working. Another strong report for Burlington Stores. Third quarter profits came in higher than expected, and the company raised guidance for the full fiscal year. Ron, I had no idea Burlington Stores was this good. And by this good, I mean the stock. That's exactly where I was going to go with this.

I completely agree. When I dug in, I was really surprised. It's one of these off-price retailers that is just getting it done just really, really well. Five-year stock price up 440%. I wouldn't have guessed that. I think of them as the old Burlington Coat Factory. I'm not that impressed. But you know what? They beat on the top and bottom line here. Comp store sales up 4.4%. 48 new stores. Gross margins were up. Operating expenses were down. Adjusted earnings per share up 73%. Certainly helped by a lower tax rate, as all companies have been this year. Raised full-year guidance. They have 679 stores. That continues to increase. The company is really doing well. How are we not talking about this company

every quarter? I don't know. We talk about TJ Maxx, we talk about Ross, we talk about a lot of these off-price folks that are doing well, and this should definitely be mentioned in the same sentence. So, I mean, I'm just baffled by this, because we've got an industry that has struggled in so many of the names that you just mentioned. And I guess, in some ways, it gives me hope that a company like Burlington Stores and their management can find a way to make this concept work. Yeah. Even though, as Jason said, the economy is doing great, consumer confidence is doing great, people still like a bargain. They sell things at 65% off, and it's really

appealing to customers. All right. Andy Cross, Jason Moser, Ron Gross, guys, thanks for being here. We will check back with you later in the show. Up next, it's that time of year, it's time for the hot toy for the holiday season. And fortunately, we've got industry expert Chris Byrne coming up. Stay right here. You're listening to Motley Fool Money. welcome back to motley fool money i'm chris hill black friday and cyber monday are in the rear view mirror but we've got a lot of days left for holiday shopping so what is the hot toy for 2018? To answer that question and more, we turn to a 30-year veteran expert of the toy industry, Chris Byrne. Chris, welcome back. Thank you. Nice to be with you guys.

You're joining us from Central Park. That just seems like the most wonderful place to be. It's pretty neat. So before we get into the toy industry and some of the big players, let's get to the toys themselves. What are some of the hot toys this year? The big trend is collectibles, lower-priced toys, interactive toys. There's these things called Rapples, which are like virtual pets. They're sort of plush, flat bracelets with little creatures on them. Those are doing well. Something similar called Pomsies is doing very well.

But probably the biggest brand in the toy industry right now is something called LOL Surprise from MDA. These are collectible dolls, and they've taken the unboxing craze and made it into the play. So you unwrap these things down layer after layer after layer, and you finally get a doll and different prizes along the way. So the opening of the toy is as much part of the play as playing with the toy once it's done. I saw an appearance that you did on television from just a week or two ago where you were playing a game that I'd never heard of before. I'm not sure I want to buy it necessarily, but can you explain to our audience about a game called Tic-Tac-Tongue? Tic-tac-toe is we sit around the table and we put on lizard faces. I mean, why not, right?

And it's like a mask that fits over your nose and mouth. And built into it is like a birthday party blower, one of those things that you blow on and it unravels, kind of like a frog's tongue. So the idea is that preschoolers sit around the table and blow on this and try to knock over cards and sequins. It's really fun. It's from a very creative company called Yulu. I like that you couched that this is something for preschoolers.

It also seems like something that adults are going to be buying as well. Oh, certainly. I mean, there's nothing as fun as running around the house with a lizard face on, annoying people. Are there any big trends right now when you look at the state of the toy industry? Well, you know, games is a big trend. There's a lot of great games out there. There's things called Yeti Set Go, a lot of skill and action games. Yeti set go, you're hitting the heads of Yeti trying to kick plastic meatballs onto a mountain.

There's pimple peace, where you are actually extracting pimples from the face of a mask. There's pie face. So there's a lot of these games, and it's kind of like a second golden era of games, going back to Marvin Glass in the mid-'60s with Mousetrap and Crazy Clock and all of those. We've seen a lot of that as one of the big trends. The other, as I mentioned before, is collectibles. There are so many collectibles out there. for different kids, boys, girls, whomever, everything from the LOL Surprise to Shopkins

to Stickbot, which are great little characters that you can make stop-motion movies with. So, low price points, high collectability, and a lot of fun. One of the stories we've talked about on this show this year is the bankruptcy of Toys R Us and sort of the ripple effects of that business disappearing. How is that playing out, whether it's for companies like Mattel and Hasbro, to some of the smaller players in the industry as well? Well, it's certainly been a change. And the toy industry has gone through retail changes over the years. But with this one, the challenge has been trying to find where is all that inventory going to go.

And Walmart stepped up, Target stepped up. A lot of manufacturers are selling new products through eBay, Walmart.com, JetBank.com. A lot of these people are going more aggressively into toys. Party City, Open Toy City, which are pop-up stores, and that's a great idea because fourth quarter is when most of the toys are bought. So I think it's a one-year problem, and I think ultimately you're going to see fewer toys because a lot of the toy manufacturers expanded their lines

to fill all of that shelf space at Toys R Us. So I think you're going to see, go back to somewhat what we saw in the 60s and 70s, which is higher revenues from a smaller number of toys overall. For older people like me, in terms of classic toys, classic games, are any faring better than others in the increasingly digital age that we're in? Well, I think it's really interesting because today's kids, 12-year-olds, 13-year-olds, have always had a smartphone, and so they're discovering games and board games as sort of this novelty to them.

Othello is doing really well. There's been a resurgence in chess. Scrabble is having a very good year. Monopoly, there's been a lot of different variations of Monopoly. Hasbro is going to produce a whole line of parody games, like Monopoly for Millennials or the Game of Life, Quarter Life Crisis. These are very, very funny, but those are really positive to adults. Please tell me that Monopoly for Millennials has a property that does nothing but sell

avocado toast. Probably. You know, what you acquire there is experiences rather than property. So, you know, you can't afford the real estate anyhow. It's very funny. In terms of the big retailers themselves, obviously, with Toys R Us gone, Walmart, Target, Amazon, is the competitive landscape today basically the same as it was a year ago, or have we seen any shifting? well it is it's pretty much the same as it was i mean i think that that most toys are bought because the child has requested it so parents are increasingly going online to try and find them to find them in stock because it's easier to sit and click away your keyboard for five minutes and get

in the car drive to the mall and do all that stuff um so i think that that it's not really that people are loyal to a specific retailer they're loyal to trying to find the toys that they want. So, you know, that's been one thing that the internet's really helped them to do. What is something that's sort of under the radar, whether it's for younger kids, older kids, something that we should keep an eye out for that's not getting sort of the hot buzz of the must-have toy of 2018? Well, I think one of the ones that I've really been intrigued by this year is Nintendo Labo. And it works with the Nintendo Switch. So already, you've made your audience a little bit smaller. But it's cardboard pieces that you craft together, and then they interact

with the video games. And I have been so intrigued because I've watched kids play with this. The combination of crafting and online play, I think you're going to see a lot more of that as kids integrate technology with physical toys. All right, last question, then I'll let you go. This is your busy time of year. I mean, you're in Central Park right now. That's how busy you are. At what point does Chris Byrne get to relax and enjoy himself? Is it the day after Christmas? When do you get to relax, and where do you go? Well, I go to the corner and hum to myself. No, So, you know, around that last weekend before the holiday is usually the last big sale time. And, of course, people have had to buy earlier if they're getting things online.

But it's really just, you know, I have about a week and a half off, and then I turn around and I go to Hong Kong and start at the Asian Toy Fairs, and 2019 is off and running. If you want the latest on toys, including reviews and recommendations, check out Chris Byrne's website. It is thetoyguy.com, all one word, thetoyguy.com. Chris Byrne, happy holidays. Thanks so much for talking. Thank you, guys.

Happy holidays. Coming up, we'll dip into the Fool mailbag, and we've got a few stocks on our radar. Stay right here. This is Motley Fool Money. Hey, Dan. Yes, Chris. It's the holidays, man. It certainly is, man.

Are you as terrible to shop for as I am? Because I'm pretty terrible to shop for. Oh, my God. I am the worst. Somebody asked me, hey, what do you want for Christmas? And I'm just like, I don't know. I'll get back to you. And the truth is, Chris, I never get back to them.

Right. It's a paralyzing question. It shouldn't be. It's a nice question. Like, oh, what do you want? I was like, I don't know. I'm just exhausted by it. And that's because we're guys.

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12th. So, act now. Go to harrys.com slash fool to get $5 off a shave set while supplies last. That's harrys.com slash fool. 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 in studio once again with Jason Moser, Andy Cross, and Ron Gross. New radio stations adding Motley Fool Money this weekend.

Ron, in Honolulu. This is amazing. AM 690 and FM 94.3, the answer. That's pretty cool. We are so happy to be heard. Aloha, Mr. Han! This week, the world of investing collided with the worlds of sports and entertainment when the SEC charged Floyd Mayweather and DJ Khaled for promoting initial coin offerings

without disclosing that they were being paid to promote the ICOs. Both Mayweather and Khaled are paying six-figure fines, which they can absolutely afford to pay, and have agreed not to promote securities for two to three years. Am I the only one whose reaction to this was, why is anyone taking investing advice from Floyd Mayweather and DJ Khaled? They've got real money, these guys. Why are they bothering with these small, little ... They want more money. When you're caught up in the hype and you can be an influencer, that drug is addictive, Ron. It's funny, because I actually was saying something about this earlier in the day, before I saw this news, it's like,

a lot of times when we're investing, it's really helpful to be able to just look at something and say, you know what, I don't know enough about that. I'm just going to take a pass, because I know I don't know enough about it. And I used crypto as a perfect example. I would venture to say that 98% of the people that are all in on crypto have no clue what it means, how it works, or why it matters. And I would put these two in the group. I really would. And I mean, I'm not trying to insult them. I just, I guarantee, they don't No. I saw where DJ Khaled says it's a game-changer. Tell me what game that's changing and exactly how.

I got a little bit worked up, because I bet you a lot of people invested based on those two guys. And that really sucks. I'm giving them the benefit of the doubt and saying the failure to disclose was literally just they didn't know. You think that they were purposely trying to skirt the SEC security laws? Possibly. Possibly. But when you have that kind of money and you have that kind of a fan base, don't you get some kind of a lesson in transparency? I mean, it's not the first advertisement they've ever done, right? Well, I'm so unhip, I didn't even know who DJ Khaled is, first of all.

But second of all, I think Jason just mentioned transparency. I mean, it's one thing that The Motley Fool has stood by for so many years, which is like, we have a track record, we have a performance track record. Unless you see that and you understand that from a person that you're going to take investment advice from, just don't. I'm going to get you smart not to do. Here's how it's a game-changer. He's writing a big check to the SEC. That changed his game, didn't it? Our e-mail address is radio at fool.com. Question from Brendan O'Brien in Maryland. Brendan writes, it's easy to buy after a stock drops too much because of turbulence, but it's much harder for me to tell when to sell after a stock rises too much after some good news.

Do you have any tips? Thank you. Basically, Jason, a question, a version of a question that we frequently get, which is, how do I know when to pull the trigger on selling a stock? Yeah, I mean, I think that's a great question, because there's not one set answer. It certainly depends on the individual and what stage you are in life. I think that we always point towards diversification as being a really easy way to eliminate this, because the more you're able to spread that money around, the less you're focusing on any one individual position. And sometimes, you just sort of forget of the day-to-day machinations of the market, and then you just check back a few years later and you see you've got an investment that's

done very well. To that end, I know this probably doesn't fit everyone's strategy. I've employed it a couple of times. I think the house money strategy is kind of fun. If you can actually buy shares of a stock and then sell enough down the road to recoup your initial investment and keep the rest of those shares for free, that's a nice way to get that risk off the table. You're not worried about it, because essentially, you didn't pay anything for the shares anyway. But regardless, don't get stuck in hindsight. And by that, I mean, don't read those articles that say, if you invested $1,000 in Amazon back in 1985, and I know it didn't exist back then, it's just those articles that just look

back and say, you would have made this much if you'd invested this much. Those are meaningless. They mean nothing at all. Investing is all about looking forward. It's about the future. Yes. And I would say the vast majority of the time, a one- or two-day stock pop is almost never the reason to sell a stock. Unless you've been dying to get out of GM, and this was a little gift that you got, and you'll take your money in your run. Instead, ignore the stock price. Ignore the stock chart for the most part. And see if this business that you are part owner of is on the trajectory that you want them to be on. Are you happy to be shareholder. Are they doing the right things? Are they making the right moves? Is the management

team allocating capital correctly? None of that really has to do with a one- or two-day pop in a stock. And just be careful when you're selling stocks that have run up or are doing well, and then trying to fill that with a stock that has underperformed or not doing well. Be careful about watering your weeds too much instead of just your flowers as they continue to grow and grow, those businesses that are doing well are doing well for a reason, and you shouldn't just sell those because the stock's up. I do like the recognition, though, in Brendan's question, that he's recognizing,

you know what, I like to invest in good businesses, but I recognize that there are absolutely times when a stock goes up to the point where, and we've all been in this position, where we look at it and we go, look, I love that this is going up, but I would not buy it at this price. This is kind of a crazy price that it's at right now. Before we get to the stocks on our radar, I should mention again, we're hiring here at The Motley Fool, not just here at Fool Global Headquarters, but also for our office in Colorado. We are looking for developers, we are looking for marketers, we are looking for investors, just to name a few. You can check out all of our job listings at careers.fool.com.

Guys, just so you know, when I say we're looking for investors, you're also. I didn't want you to think for one second that I had information that you didn't. You guys are safe. Let's get to the stocks on our radar. Our man, Steve Broido, taking a little time off this week. Market foolery producer extraordinaire Dan Boyd behind the glass this week. He is going to hit you with a question. Ron Gross, you're up first. What are you looking at this week? I've got RPM International. Ticker symbol is RPM. They are a specialty chemical manufacturer making things like paint

and coatings and ceilings, roofing systems. A really stable business. Great record of growth through both acquisition as well as organic growth. Big international opportunity on the consumer side. This is kind of important. They had some asbestos liability that's been around for a while. They just made their final payment, which will now free up cash flow going forward to make more shareholder-friendly moves. They have increased their dividend for 45 consecutive years. I like that. It's a total income recommendation here. 2.2% yield currently. I think both the stock and that yield are going to grow in the future. Dan, question about RPM International? Yeah, Ron, could you have picked a more

boring company to highlight this week? Yes, I could have. But there's nothing wrong with a nice, solid industrial company. Jason Moser, what are you looking at this week? Sure. Taking a look at Etsy, ticker E-T-S-Y, just reported another very strong quarter. The stock is having a phenomenal year, up around 220%. And I think that's for good reason. Buyers and sellers on the platform, those metrics continue to go up. They were able to pass along a recent price increase to its sellers with very minimal pushback. And I'm starting to see some ads on TV, actually, now during the holiday season,

get a little bit more brand awareness out there. And I think they've done a very good job in nurturing that brand equity there. And I did note 10 days ago when we saw some of that market volatility, that while everybody was selling, I bought two stocks that day, Chris. And in full transparency, Etsy was one of the stocks that I bought that day. So, talking my book here a little bit, I like this company. I think they're geared up for a pretty good holiday season. Dan, question about Etsy? Yeah, Jason, if you were going to start an Etsy shop, what would you sell?

Oh, man, I was hoping you'd give me this question, because my daughter and I actually ran through the Etsy process one day, because she is big in the slime market, Dan. And if you don't know about the slime market, we'll talk about this after taping. It actually was a very easy setup there. The only problem was, it was basically asking for all of my bank account information, and I wasn't totally convinced of how long my daughter was going to last in the slime market. So, I think I would go with Slime, because, hey, man, the demand out there is still robust and growing. Can I just suggest that you push forward with this idea?

Because in the wake of what Ron said, I could see RPM International acquiring Moser Slime Incorporated, a little buyout opportunity. No promises. Liven that RPM right up, Dan. Andy Cross, what are you looking at? Ollie's Bargain Outlet, symbol O-L-L-I, reports next week with sales estimates of about 17% expected in EPS. Earnings per share up more than 40%. 10 million Ollie's Army members strong, what Mark Butler, who is the leading shareholder, calls the bargain battalion, Chris.

So I'm excited to see what they are able to do. They've been able to grow their comp growth 17 consecutive quarters. It was up 4.4% last quarter. Their semi-lovely stores continue to do very well for this $5.6 billion company. So, I'm excited to see what Mark and his team have in store for the holiday season. Dan, question about Ollie's Bargain Outlet? Certainly. Andy, is there a publicly traded company with an uglier logo than Ollie's Bargain Outlet? Listen, they pride themselves on their semi-lovely stores, not their ugly logo, which I think is a lot of fun.

And the Ollie's story is really about a lot of fun as they grow to more than 900 stores, up from about 300 now. So, they have big expectations ahead. This is not a knock on the business, but I think the Sherwin-Williams logo is still pretty ugly. I think it gives it a run for its money. I won't argue that. Another paint manufacturer. I see a theme.

Three stocks. Dan, you got one you want to add to your watch list? Yeah, I like Etsy. I've bought things from Etsy. My fiancé is all over Etsy all the time. I think it's a good company. All right. Ron Gross, Jason Moser, Andy Cross. Guys, thanks for being here.

Thank you, Chris. That's going to do it for this week's edition of Motley Fool Money. Our man behind the glass is Dan Boyd. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.