Motley Fool Hidden Gems Investing - Motley Fool Money: 02.22.2013

Episode Date: February 22, 2013

Wal-Mart and Coca-Cola hike their dividends.   Google develops plans to launch retail stores.  OfficeMax and Office Depot combine forces.  And Sony unveils its Playstation 4.   Our analysts discuss those stories and share three stocks on their radar.  Plus, we talk about the business of spying with former CIA agent J.C. Carleson, author of Work Like a Spy:  Business Tips From a Former CIA Officer.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Everybody needs money. That's why they call it money. The best things in life are free. But you can give them to the birds and bees. From Fool Global Headquarters, this is Motley Fool Money. Welcome to Motley Fool Money. Thanks for being here. I'm your host, Chris Hill. Joining me in studio this week from Motley Fool Inside Value, Joe Mager, and from Million Dollar Portfolio, Charlie Travers and Ron Gross. Good to see you guys. Howdy. How you doing? We've got the latest on the housing industry, the video game industry, and the Google industry.

It's a little unfortunate our man James Early is not here because some stocks are increasing their dividends through the roof. And as always, we've got a few stocks on our radar. But we begin today with the world's biggest retailer, Walmart's. Fourth quarter earnings came in higher than expected this week. The company also raised its annual dividend 18%. Shares up, Charlie. I mean, Walmart kind of getting it done lately. Yeah, they sure are, Chris. 2012 was a good year for Walmart, and this is a company that

struggled for a couple years coming out of the financial crisis with, I think, eight consecutive quarters of negative same-store sales. But last year, even though the retail environment was tough for a lot of different companies, Walmart came through with 5% sales growth. They even showed domestic growth to back up what their international sales were, which has always been a strong point for the company. They did that through having an aggressive pricing model, which is typical for the company, delivered a lot of value to their customers, and they were taking share. So all in all, it was a good year for Walmart. Profits were up 10%, and they forecasted for mid-single-digit growth in 2013 as well.

You know, Joe, a couple of years ago, it seemed like they were sort of floundering around with different strategies, trying them out for six, 12 months at a time, and now it really seems like they've got their footing. Yes. I don't know that they've got all that figured out yet. You never know when that might change. But I do think that sticking to aggressive pricing is their bread and butter. It's what they're best at. And it takes the best advantage of the massive infrastructure, reputation, and traffic that they've got. Yeah. The biggest misstep was when they lowered the inventory count on a store-by-store basis. And they recognized pretty quickly that was a mistake and announced that they'd be retooling,

restocking back up to the trillion pieces of stock-keeping units that they have in each store. And that's actually why we used to own it in Million Dollar Portfolio. We thought there would be a stabilization in the U.S. comp stores, which seems to be happening. Unfortunately, we sold it a little too soon. A little too soon. Shares have beaten the market over the last year, two years, five years. It's within $6 or $7 of an all-time high. What do you think of it right now, Charlie? It's an okay price. I think it's trading at about 14 times earnings, but it's not a great price. I think you could wait for a pullback and do even better.

Here are a few of the companies, speaking of Walmart increasing their dividend, here are a few other companies that increased their dividends this week. Coca-Cola increased their dividend 10%, Wellpoint 30%, Texas Instruments 33%. Joe Maker Halliburton increased their dividend 39%. Are they just drowning in cash? Is that what's going on at these companies? A lot of them are. When you see a 30% dividend increase, on the one hand, that signals some confidence, But it really speaks to the lack of high reinvestment opportunities at the company, which is a bad thing. But it's nice that they're being disciplined in returning more of that money to the shareholders that they can reinvest if they want or put it elsewhere instead of just throwing it down the drain with acquisitions or chasing growth.

Ron, as a value guy, when you see stuff like this, does increasing a dividend to an enormous degree, is that the kind of thing that moves the needle for you when you're looking at a stock? where you say, well, the value isn't quite where I want it to be, but hey, if you're going to pay me that dividend, I'm in. Well, as a value guy, when I look at stocks, I think of total return. So it's dividend plus stock appreciation. And cash flow is cash flow. So whether they pay it out to you in cash or it theoretically causes the stock to increase, hopefully because they're reinvesting it well, it should, in theory, equal out. It doesn't, in practice, do that very often. In theory, we're talking about corporate CEOs.

Right. Which make plenty of mistakes. But it's also a signal to growth investors that, hey, we don't need all this money, we don't have enough growth opportunities, so we are going to return it to shareholders. But balance sheets are so bloated now, I don't necessarily think that's really a negative signal. Yeah. And for some of these guys, they're buying a little bit of credibility with Wall Street, too. Like, Halliburton, for example, Texas Instruments. Especially WellPoint, which has been a very poorly run company for a while now. I think this is a way of them saying, look, hey, hey, we still love you guys. We're still making money. We promise we won't buy

anything else stupid. Do you think that this provides some more fodder for people who are agitating for Apple to really just throw out an enormous dividend at some point? Yeah, well, you know, David Einhorn had a conference call this week where he pitched his I preferred strategy, which I think is way too cute and not a good use of his time. But I'll take the cash. Yeah, I think that Apple shareholders should get some money out of that. And I think that with all the pressure they're getting in the cave. Not a great week for the housing industry. New home construction for January, the number's down 8.5%. Toll Brothers, one of the biggest

home builders, first quarter profits came in lower than expected, shares down around 8% for the week. And Ron, Lumber Liquidators, a company you've talked about before, seemed like they had a great fourth quarter, profits up 63%, lower costs, increased profit margins, and yet the stock is also down around 8% for the week. What is going on in housing? I really thought this was going to be the housing boom year. Okay, so where to begin? First, I think the 8.5% decline headline is misleading. I think the recovery continues and the report is actually pretty good. So, you have construction of single-family homes increasing, new building permits increasing, existing home sales increasing. The weakness was in apartment complex construction, which is relatively volatile.

still. So, the numbers continue. They're not stellar growth, but they're still growth, which indicates good things coming. Toll Brothers had great numbers, they just missed expectations. The stock was up 58% in 2012, it's still up 7.5% in 2013, it's only a 12 PE. So, people just sell off these stocks based on expectations. Lumber Liquidators was up 200% in 2012 and still doing well this year, increasing their store count from 400 to 600 as a goal. That's extremely positive. So, they're seeing the potential demand for increased sales. Yeah. And an apartment complex miss on new builds may not be a bad thing. That could actually be because people are getting excited about buying homes again. There's demand moving

into that instead of people having to shack up in apartments, like I do. I'm not judging. Ron, when you look at the home builders, Toll Brothers, D.R. Horton, Hovnanian, they've all had just market-crushing returns over the last year. When you look at the housing industry, is that your preferred way to play it, or do you lean more towards sort of the companies that are on the edges, the lumber liquidators, and even like a Sherman Williams, that kind of thing? Yeah, I haven't played it directly myself with the actual builders. It's probably because I'm just a little bit shy there.

I'd rather play it around the edges, like you said, a Home Depot, a Lumber Liquidators, companies that service that industry rather than going directly at it. It's been an interesting week for Google. The Wall Street Journal reported that Google's working on plans to launch retail stores in the United States. Google also unveiled a high-end touchscreen laptop for somewhere in the neighborhood of $1,300. And Joe, shares also hit $800 a pop this week, making it the third largest public company. There's a lot I just threw out there. We're back, baby.

We're back. You're a Google fan, to say the least. What do you make of this week so far? Oh, it's been a great week. I definitely think that the retail idea is a very good one. Google has great products, and they need to get them in the hands of consumers. And the model that they've taken to do it before hasn't worked. But if they can get Nexus phones, tablets, Chromebooks in front of more people, more Motorola phones, I'm sure this would be a nice little tailwind for them as well.

And eventually Google Glass and maybe a driverless car showroom. I think this makes sense. But in limited scale. I mean, you don't need 20 of these showering New York City, right? You know, maybe a couple in each major city. That's a good idea. I think the new Chromebook Pixel, less excited. To me, it's a very sweet-looking web browser, kind of expensive, and I don't think it's going to be a very big hit,

but I think it does show that Google has chops with hardware, and it's a good step for them as they keep moving further into that. But, Charlie, as we were talking about earlier, when you look at these electronic retail stores, at the high end, you've got Apple, which is an amazing performer. At the other end, you've got Sony, which certainly locally here in the D.C. area, The stores are right next to each other, and it's really pretty sad. The Sony one's like a crypt. Yeah, it is pretty sad. But as we were talking about, you know, it's hard to feel like Google is going to be as successful at retail right out of the gate in the way that Apple was,

in part because I don't think people really think of Google devices in the way that they think of Apple devices. Yeah, Apple had home-run devices to stock its store with, everything from the iPod to the iPhone and then the iPad, along with their computers, which they sell quite a bit of. I'm not sure exactly what is going to go into a Google store outside of their Nexus phones and their Nexus tablets. Are they going to sell Kindle Fires? Are they going to sell Samsung devices? I'm not really sure, so I'm curious where they're going with this.

Shares hit an all-time high this week, a new all-time high. What do you make of them? I think they're in the neighborhood of fairly valued, but I'm a happy long-term shareholder and not looking to get rid of them. Are they in the high-end neighborhood? No, I think they're a little bit undervalued, and I think they're a decent pickup today for a long-term investor. Coming up, merger mania continues, this time in the sexy world of office supplies. Stay right here. This is Motley Fool Money.

Welcome back to Motley Fool Money. Chris Hill here in studio with Joe Mager, Charlie Travers, and Ron Gross. Guys, last week it was airlines and consumer goods. this week, Office Supplies. Office Depot is acquiring Office Max in an all-stock deal worth nearly $1 billion. Ron, I guess they're trying to compete with Staples, which is sort of the industry leader. Is this going to help them do that? I think it's a good move for them. It makes sense. I think it's also good for Staples, who will probably pick up market share here. However, it's not an easy industry. Think of Best Buy and Circuit City. Best Buy thought it would do great. Barnes & Noble and Borders.

It outlasted Circuit City. Barnes & Noble and Borders. Barnes & Noble has its struggles. Staple has its struggles, mostly because people have moved to online, Amazon being probably the big gorilla there. So it's a tough industry, the office supply business. Staple's is smart. It's bringing down its footprint. It's closing stores. It's taking stores out of Europe, which are not doing well. So it seems like everybody's kind of doing the best they can, but it ain't easy. Both of those stocks, Office Depot and Office Max, were up more than 30% at one point this week. They've settled back down from

that. But when you look at this space, do any of these companies, Staples included, do any of them interest you? Staples is pretty cheap, less than five times EBITDA, a measure of cash flow. So, assuming that they don't really screw up and continue to decline, that's a good price to pay. But if you're going up against Amazon, that's some big competition. To their credit, Staples is a monster online. People don't realize that, but they're right up there with the biggest online players. Honestly, as a longtime Amazon shareholder and clearly not a very vigilant one, I didn't even know Amazon had this office supply business. How significant is it? I know they don't usually share a lot of information

about their individual divisions, but do you have any insight into how that's going? Well, I think Staples is still the big dog in terms of that space online. And I think you're going to see the little office players really struggle to get in there. And Amazon is going to keep encroaching more and more on that turf as time goes by. And it's going to be tough to compete with them. The brick-and-mortar people have an advantage in what they call the contracting business, where you ask Staples to do something for you, whether it's a printing job or what have you. Where the young guys like Amazon don't have that.

So there will still be a need for the brick-and-mortar folks, but a shrinking need, exactly. Video game stocks have been surging lately, including Electronic Arts, Activision Blizzard, Take-Two Interactive, and even, surprisingly, GameStop. And part of that surge has been the lead-up to Sony unveiling the new PlayStation 4 system this week and an event in New York City. Charlie, what did you think of the event, keeping in mind that Sony didn't actually show the device? It was a pretty bizarre product launch, or product unveiling, I should say. The PlayStation 3 launched in 2006, so a new PlayStation is long overdue.

This PlayStation 4 has been highly anticipated by gamers like myself for quite some time. They did talk about some of the social capabilities it would offer, such as Facebook connectivity, the second screen features which is a big trend in gaming moving onto your phone and your tablet while you are playing games and they're trying to make a more immersive experience off of the more robust hardware that's packaged into this console however they didn't actually show a console they didn't give a firm release date other than to say by the holidays and there's no by the holidays you know christmas as in 10 months from now i was gonna say memorial day and so it's a long way off

I think this is just a beginning of what will be a year of buzz building and we'll see what happens what do you bet they don't make it I mean they have to get it out the door right they'll make it with something but not all the features

apparently around the cloud gaming and such are necessarily going to be live at launch I'm kind of picturing it like the HP playbook you know like the tablet that they ran out without the native email client but they felt so pressure to get it out the door but without email i don't know is email important is that details not there um last question on this charlie if reports are to be believed the playstation 4 and the next generation of the xbox whenever it comes out uh will not play used games

that seems like the final nail in the coffin for a business like gamestop which depends heavily i think on used games it would uh there was some hemming and hawing out of sony about whether or not this would play used games they did say yes they could but not how uh and whether there would be an additional license fee you have to pay to actually activate the used game or anything like that still an open question nice nba jam reference by the way boom shakalaka hewlett packard's first quarter profits fell 16 percent uh but wall street must have been expecting far worse joe because the stock was up around 10% Friday morning. What do you think? Well, that's power of low expectations. Sales were down in five out of six divisions, and the one was up was financing, and the

originations in financing were down 26%. Wow. So things are not going well. I don't think you could put any amount of makeup on this and make it look good. The CEO, Meg Whitman, said this is the second year of a multi-year turnaround. How many years should investors give her and Hewlett Packard? Zero. They could turn it around, but when you look at what's going on, it's very difficult to realistically picture a meaningful turnaround in the business. There are just easier ways for people to make money. I'm a value guy. I like out of favor stocks, but this is a long way from turning around. Do the numbers look like value numbers? I'd have a hard time getting excited about investing in a business where five out of six units are spiraling. Yeah, that's tough.

Do they need to take a page out of the Dell playbook and take the company private? Well, they don't have Michael Dell, who owns a lot of shares as a face of the company, who can do it. It's like crawling into the woods to die. Yeah. And they've blown so much credibility with investors, too. Finally, guys, Monday evening, eight men disguised as police broke through a fence at Brussels Airport and broke into the cargo of a plane bound for Switzerland. and it is estimated that they made off with $50 million worth of diamonds. Ron, it appears to be one of the largest diamond heists in history.

So my question is, how great is this story? Where do you think they put the diamonds after they got away? You know, they seem, given the fact that they haven't been caught yet, they seem like they're on top of their game. So I don't know. I think that's a pretty closely guarded secret. Oh, yeah. Which begs the question, if you could steal anything with the caveat

that you have to keep it in your home. You can't, you know, so you can steal a sports car, but you've got to keep it in your garage. You could steal anything to keep in your home. What would you steal? And the other caveat that stealing is wrong. Right. I would definitely go for Action Comics No. 1,

the first time Superman ever appeared in comics. It's in excess of a million dollars value, and I would love to have that in my home. Just keep that in your home under glass. I love it. Charlie, what about you? There was an episode of The Simpsons many, many years back where Homer had a helper monkey.

I would steal his helper monkey because I really hate ironing my shirts, and a monkey to do it for me would be awesome. Joe? Well, I got asked this on MarketFoolery, and I said a Ken Griffey Jr. rookie card, and our producer, Matt Greer, got me a Ken Griffey Jr. rookie card. Wow. He really delivered. So to raise the stakes.

So my question is, do you think Matt stole it? Yeah. I think so. I would love an Ugga 9. Ugga is the mascot at? The next Ugga. At University of Georgia. Yes.

Okay. How about you? I'm just going to kick it to Steve. And I'll also say, no, Mac didn't steal it. He gave it out of the goodness of his heart. Steve Broido, our man behind the glass, what are you stealing to keep in your home? There's a flying airplane somewhere. I know it.

It must be a flying airplane, personal aircraft. I want one. Someone's got to have one somewhere. That'll do it. Coming up, business tips from the CIA. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money.

I'm Chris Hill. What can a spy teach us about the world of business? J.C. Carlson was an undercover CIA officer for eight years, and she's the author of the new book, Work Like a Spy, Business Tips from a Former CIA Officer. And she joins me now. J.C., thanks for being here. Thanks for having me.

You start out the book with a story from 2003. You were actually part of a CIA team searching for weapons of mass destruction in Iraq. If you could walk us through that story and what the business takeaway is. Sure. Well, I arrived to a very hot summer of 2003, like you said, and we were given the orders to leave no stone unturned and try to find this weapons of mass destruction program that kind of served as the impetus for the invasion. But very early on, it became pretty clear that the program didn't exist, certainly not in the form that we had suspected, and certainly not to the extent that we had expected. So even though that was becoming clear, we were still trying to find really anything. We got increasingly desperate in our search for any kind of hint of a WMD program, and we were starting to chase rumors and little bits of information and kind of less than credible reports. And then finally something came across my desk that looked pretty decent. It looked pretty plausible.

It was a facility located just outside of Baghdad, and we had a lot of data that made it look pretty suspicious. It was a large factory with clean room technology. It was managed by a woman with a Ph.D. in biochemistry. It was heavily guarded. We had satellite imagery showing runoff pits, suspicious runoff pits, dug into the earth behind the building. We had intercepts of communications with military prisons and hospitals. There were a lot of suspicious indicators, and so, to be honest, I kind of jumped at the chance because this looked like there might actually be something to it.

So I worked with my military counterparts, and we launched a raid on the facility, and it was functioning at the time, and they did an armed takedown at the facility and had to isolate all of the workers and all of the guards. And when they finished that, I walked in and met with the manager, the Ph.D. biochemist. And it took about five minutes and a couple of cups of tea to find out that what looked very suspicious on paper was really just a salt factory, truly salt, table salt, the stuff you sprinkle in your food. And it was embarrassing, to put it mildly. But all of the things that had looked so suspicious on paper actually had very easy explanations.

The cleanroom technology was because, in addition to table salt, they made saline solution, for example. And the communication and delivery patterns to the military hospitals were because they made deliveries of the saline solution to the hospitals and the prison hospital. And everything that looked suspicious on paper when I sat down with this woman had a very easy explanation, and that was a click of a moment for me. It made me realize that sitting down and talking to someone really can be a shortcut. You can really come to the wrong conclusions with the correct data when you don't have the insight that being on the ground can offer you. And that was just a teaching moment for me,

something I should have already known, something that's obvious, but it really hit home that day. One of the things you write about in your book is how the spy game has shifted now sort of away from state secrets to private industry because that's where the money is. What are some of the most common ways that companies are being compromised? Well, you know, it's funny because everyone is very aware of technical threats. Everyone's aware of threats that can come from the internet, and everyone uses software to protect their computers. But I don't think that companies fully grasp the risk from human leaks. I think there's a misconception about the nature of the threat of corporate espionage. And that's partly because Hollywood's to blame, because we

think that corporate espionage should look like some cloak and dagger act and really only impacts companies that that deal in true truly capital s secret information but more often than not information theft comes in the form of slow steady leaks and more often than not those leaks come from former employees and that's not because they're necessarily even doing anything bad they're not going out there and selling your company secrets or sabotaging anyone or anything It's more that they're being asked the right questions or they're being lured en masse by a competitor who, maybe even without necessarily meaning to commit corporate espionage per se, but they're siphoning off your talent and the people who have knowledge of the way you do things. not only the secrets, but your processes and your strategies. And gradually, with enough attrition and with enough of these slow, steady leaks, there can be a pretty drastic

data siphoning that will never be protected by any kind of antivirus program. One of the companies that gets a great deal of attention from investors and certainly from the media over the last couple of years is Facebook. And Facebook has a tremendous amount of information about literally hundreds of millions of people. And over time, there have been concerns about Facebook's privacy policy. I'm curious if you're on Facebook and to what extent Facebook's power and the amount of information Facebook has concerns you. I am a terrible author in the sense that I have almost no social media presence.

I do not... Wow. Did your publisher know that before they greenlit the book? I have been encouraged by my publisher and by my agent to consider blogging and tweeting and Facebooking, and I can't bring myself to do it. I can't, and I know it goes against everything that we're told, and we're not to promote a book, but old habits die hard, I guess, and I'm not comfortable with it personally. I think it has its value. I think it can be fun on a social level, but I think I have a greater than average appreciation for just how damaging information can be.

And so, yeah, I don't have the world's best platform as far as authors go. And frankly, part of my advice goes contrary and goes counter to what pretty much any other business author will tell you. Everybody else is out there saying promote, promote, promote. I'm the one saying, well, take a step back. How about a little discretion? I advise against it unless there's a measurable reason. But how much of that is due to your former job, and how much of that is due to the platform of Facebook? It's not Facebook per se, but it's kind of, for me, it's a bigger question of social media.

But Facebook is particularly bad about changing the game once you're already established there. And, again, as somebody who doesn't participate much there, I'm certainly no expert. But one of the things that was important in my old career is the ability to go back and kind of erase your steps and to disappear if you need to. And once you're out there and once you lose control of the information, and you may think you have control over it according to today's rules, but once they change, you may not. For some people, for some businesses, that can be a problem.

Even if it's only a matter of what you posted about yourself five years ago professionally on a professional site like LinkedIn isn't necessarily the image you want to convey when you're more senior in your position. And you can change your profile and you can change your resume, but data lingers. You're listening to Motley Fool Money, talking with J.C. Carlson, author of the new book, Work Like a Spy, Business Tips from a Former CIA Officer. Okay, give me a tip. Give me something I can do that you've learned from your past. I'm just in it for me, JC. I'm just looking to benefit from your experience. What's one tip to help me be better at business?

I would say acknowledge that every day is different. I think CIA officers move around a lot. Every assignment is different. Every case is different. Every alias is different. And CIA officers know that what works in Baghdad does not work in Paris. So they don't try to use the same approach in every situation. But I think in business and in life, too many of us take the opposite approach.

What worked for us once, we try to use again and again and again. And it's only once it's failed or it's been less successful for a very long time do we realize we need to change our strategies. That seems like that would be especially helpful for people who are in sales. because it would just seem like sales, if you have a successful sales pitch, you're just going to use it over and over. Absolutely, absolutely. And one of the other tips I could offer, if I can double up here, I would say customize your message every time.

And frankly, most of that is spending more time listening at the outset of a business relationship so that you can customize your relationship rather than walking in with your message, your canned message on the tip of your tongue, your sales pitch, the first thing you lay out on the table. Instead, as I say in the book, shut up and listen. All right. We're going to wrap up with a round of buy, sell, or hold. It's a way that some people hide their assets. Buy, sell, or hold Swiss bank accounts. Buy. Because they're just never going to go out of style?

No, because controversies aside, they have an appreciation for discretion that I can appreciate. This is a technology that's gotten a lot of attention over the last couple of years. Buy, sell, or hold 3D printing? Buy, but really it's only because I think it's cool. You don't actually have one in the home, though, do you? No, I don't. I have seen them at work, though, and I have to say they're impressive. And finally, this was one of the go-to communication devices on the hit TV show Get Smart.

Buy, sell, or hold the shoe phone? Buy. No, actually, no, I would say hold because you can't buy them anymore because it's too old. But, wow, what a collector's item. Don't you think Get Smart should get credit for the invention of the cell phone? That was really, I mean, in terms of the modern cell phone, that was really the first one, I think. They were ahead of their time, it's true. The book is Work Like a Spy, Business Tips from a Former CIA Officer. They're fascinating stuff.

J.C. Carlson, thanks so much for being here. Thank you. Coming up, we'll give you an inside look at the stocks on our radar. You're listening to Motley Fool Money. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill. Joining me in studio once again, Joe Mager, Charlie Travers, and Ron Gross.

The classic song from Men at Work can mean only one thing, and that is, our man Joe is moving. Moving down under. Moving down under. Tell our dozens of listeners what's going on. We are moving to Sydney, Australia, where I'm going to be joining Fool Australia. It's been open for about a year now. It's off to a great start, and I'm very excited to get down there and do very similar work to what I do here.

I'll continue running Ivy from very, very far away. And it's inside value for those people who are not in the know. Yes. Yeah, a little inside baseball. But we're very excited. We are going to miss you. We mention Fool.com all the time, but if you want to check out our Fool Australia site, it's Fool.au. Do I have that right?

Fool.com.au. Fool.com.au. And if you live in Sydney, definitely shoot us an email at RadioFool.com. I'd love to meet up. RadioFool.com. Meet up with Joe. Before you go, though, if you're going to move to Australia, we figure, I mean, I'm looking at Ron. I'm looking at Charlie.

There is a quiz to get in the country. Well, I was just going to say, I mean, Joe's a diligent guy. I mean, that's what makes him a great investor. He does his homework. So it's fair to say Joe wouldn't move to Australia unless he knew a great deal about Australia. Right. Read a travel book. Perhaps maybe a little Wikipedia.

And business. So with that in mind, here's a little quiz. Multiple choice. Which bank has the biggest market cap? A, Commonwealth Bank of Australia, B, Bank of America, or C, Australia and New Zealand Banking Group? I think he made up the last one. Commonwealth. Commonwealth Bank of Australia.

No. Steve Brito letting the listeners know. No, it's Bank of America with a market cap of about $17 billion more. Which of the following is not an Australian-based company? A, WD-40, B, Woolworths, or C, Westpac? Not Australia-based? Not an Australian-based company. WD-40.

WD-40. That's correct. I have a new bank. I'm banking with Westpac now. Yeah! Call that a knife? Let's move to the entertainment business. Since we have the Academy Awards this weekend,

which Australian actor has received the most nominations for an Academy Award in the acting categories? A, Russell Crowe, B, Geoffrey Rush, or C, Cate Blanchett? Nicole Kidman. Cate Blanchett? Cate Blanchett is correct. And finally. I'm so proud of you. Thank you.

Steve's just coming in with the musical cues. Again, we don't do the production all that often. Is it a law that you have to be a fan of men at work? I think so. It probably is. It's in the Constitution. And what's more iconic than the koala? So the koala is native to Australia.

Which of the following is not true, not true when it comes to koalas? A, though not very active, koalas require only four hours of sleep per day. B, newborns are hairless, blind, and don't have ears. Or C. During mating season, koalas communicate through a variety of bellows, grunts, and low-pitched snarls. Well, C is true of every species. I think B is a wombat. I'm going with A. That is correct.

Yeah. Koalas actually, God bless them, koalas sleep about 16 hours a day. I should have been a koala. I was just going to say, in Ron's next life, he's going to be a koala. Good job, Joe. Thank you. Well done. I'm ready to pick some stocks.

With that in mind, let's get to the stocks that are on our radar, and we'll bring in our man Steve from the other side of the glass with a question. If you want to fire one back at him, you can. Ryan Gross, you're up first. What's your stock? Continuing with our housing theme from earlier in the show, I'm keeping an eye on Home Depot, which reports earnings on the 26th. And so, I'm really interested to hear what they're saying, especially because we own Lumber Liquidators, a million-dollar portfolio, and a lot of it is so dependent on the housing recovery. I want to see what they're forward. I don't really care necessarily about the actual numbers. I want to hear about the guidance going forward.

What are the odds that in their earnings statement, weather is going to be referenced? Every retailer has to. Come on. One more week this year than last year, weather, they pull them all out. Steve, question about Home Depot? Have you had any positive shopping experiences at Home Depot yourself? Well, Steve, I think you know me pretty well. I'm not really the target consumer of Home Depot. And as a matter of fact, I do not like going there. It gives me tremendous anxiety. I'll take the flip side of that. I've actually had great experiences there.

I find the people to be really helpful, which is good because I'm not all that handy at home. So I'm typically the guy saying, okay, not only do I need to find this item, I need you to teach me how to use it. Charlie, what's your stock this week? Next week, the Mobile World Congress takes place in Barcelona. There's a number of mobile companies presenting. Most notably, in my opinion, would be Nokia. They have a presentation on Monday about some of the new products that they are going to be rolling out. This is a company that pretty desperately needs some new hits, and I'd be curious to see what they're going to talk about on Monday.

Steve, question about Nokia? When is the last time you actually saw a Nokia phone in use? The one in my pocket. Really? I have a Lumia 920. Do you like it? I love it. It's fantastic. Why do you think it hasn't really caught on?

I think because they had absolutely no presence in North America and it takes some time to build some brand awareness. Ticker symbol is? N-OK. And Home Depot is HD. Joe Mager, what do you got? All right, this is my last one of these. Make it a good one.

So let's just be real. It's Berkshire Hathaway, okay? It's my largest position by a country mile. It's a wonderful business. It's selling at a reasonable 1.3 times book value today, maybe a smidge more. It's not a stupendous bargain, but it's incredibly well run. It's Warren Buffett's company. The railroad business is killing it. Insurance is doing

very strong. Love the Heinz acquisition. There's a lot to love about this business. I think Q4 results are going to be great. Before I kick it to Steve, the Heinz acquisition, Buffett made a point of saying very quickly, hey, I've still got money to spend. I've still got my elephant gun. Do you expect him to use it this year? If so, where do you think he's going to be looking, whether it's a company or an industry? It's possible. But valuations have come up a good bit. That didn't stop him from making a big play on Heinz. But he's very opportunistic. And if the right pitch comes along, he's willing and able to take it. And that's why he's a buyer of choice, really, is that people go to

him because he does have that cash. He can put it to work quickly. He's creative and a long-term investor. If we had to guess, would we guess consumer or industrial? Probably consumer. Steve, question about Berkshire Hathaway? The day Warren Buffett announces he's retiring, the stock goes up, stays flat, or goes down? Goes down, but I don't think it'll be as bad as you might suspect. I mean, when you look at Apple, when Steve Jobs passed away, the stock actually finished up for the day. So with these widely followed companies, people have some expectation that there's going to be a leadership transition at some point. Steve, Home Depot, Nokia, Berkshire, what do you got?

I can't go with Home Depot just because I've had so many nasty experiences there. Nokia, I don't know. I have not seen a Nokia. I'm very surprised that you have one because I really have. The only ones I remember are from the late 90s, so I've got to go with Berkshire. That's going to do it. It's Joe's day. It's Joe's day.

All right. Joe Mager, Charlie Travers, Ron Gross. Guys, thanks for being here. Thank you. That's going to do it for this edition of Motley Fool Money. Our engineer, Steve Broido. Our producer is Matt Greer. I'm Chris Hill.

Thanks for listening. We'll see you next week.