Motley Fool Hidden Gems Investing - Motley Fool Money: 03.04.2011

Episode Date: March 4, 2011

Do competitors stand a chance against the iPad 2? What does Wal-Mart's dividend hike mean for investors? What do Warren Buffett and Charlie Sheen have in common?  We tackle those questions and talk about the business of happiness with tech titan Ted Leonsis. Learn more about your ad choices. Visit megaphone.fm/adchoices

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BetMGM operates pursuant to an operating agreement with iGamingOntario. James Early, and Ron Gross. Guys, good to see you. Good to see you, Chris. We've got the latest from Microsoft, Apple, and more. We'll talk about the business of happiness and the future of pro sports with tech mogul and professional sports owner Ted Leontis, plus, as always, a look at the stocks on our radar. But we begin with the big macro. Unemployment fell below 9% for the first time in nearly two years as private sector employers added 222,000 jobs in February. And retailers posted a 4.2% sales increase compared to a

year ago. Ron Gross, let me start with you. What did you think of the unemployment numbers? Yeah, these look pretty good, actually. Unlike maybe previous weeks where there were some shenanigans going on with the numbers, this actually looks relatively strong. Let's not start celebrating yet. We're not out of the woods. But the numbers look good. I think it's important to remember, the real unemployment rate, if you take the people that are working part-time instead of full-time, and the people that have stopped looking because they're frustrated, the real unemployment rate is almost 16%. But the good news is, that number is coming down as well. So, I like the report.

But you're not popping the champagne just yet. Not yet. James? Let me ask Ron this. I'm a macro skeptic, so I don't pay maybe as much attention to the employment rate as Ron does, but when it is time to start celebrating, how should I celebrate? Okay, so that is an excellent question, and I'm going to give you a five-minute answer. No. So, the only reason I even look at things like this is, let's say, if I'm looking at

a retailer, for example, and I'm building out my assumptions about growth rates for the future, I want to know how healthy the American consumer is. A high unemployment rate would lead me to use lower growth rates. If the economy is humming along, maybe I'd be willing to up those growth rates and up a valuation for a particular company. So, a few basic points in your model, let's say, for example. I would like to point out that I was high on the employment numbers all last weekend. It was horrible. No, a couple of weeks ago, before it was really cool, I said, these numbers look okay.

They've actually gotten even better. And one of the things that happens is the whole economic picture is often just a head game. It's all psychological. So every little incremental increase, every little bit of good news helps because it just makes it that much more likely that people go out and spend When people spend, you have to hire, et cetera. And that's how you get that virtuous cycle moving. Let's move on to the retail.

Seth, we saw a better than expected number. Some retailers posted- Hey, why was that? Well, some retailers posted some pretty big same-store sales growth. Winning. Winning. Yeah. This is, again, a continuation of a theme I hit last month when we talked about these numbers a little bit.

There's a bifurcation. That's going to be my word of the year. I hope I'm using it correctly. uh there's a divergence the other day actually yeah used on our market podcast there's a divergence going on right here it's basically the sort of it is you don't want to be at the retailers in the middle so much they seem to be hit or miss you could call it struggling it's not necessarily struggling but the retailers that are doing best right now and this is similar to what we saw last month are the lowest end retailers uh your costcos your bjs companies like that

wholesale clubs are doing well. And then the higher-end retailers. You're in Needless Markup, in other words, Neiman Marcus, and other higher-end specialty retailers. Limited brands. And for some reason, limited brands, which isn't even that high-end, but just Victoria's Secret. I was going to say, I beg to differ. I think Victoria's Secret is very high-end. Wow. Dirty Underwear is just a great business right now. But those are the places I think you need to look at as an investor.

Costco is low-end to you? It must be a big roller. Dollar stores are the lower-end. What kind of contracts do you have here? Yeah, Costco average consumer actually has a rather upscale. $89,000. I can't stand going to it because it's so full of rabid shoppers that my car ends up all dented up. What I find interesting about Costco is that they have held the line on pricing even in the face of food inflation recently.

So they're taking a little bit of a hit on margins in order to maintain that value proposition, at least for now. I'm not saying they'll hold those prices forever. But remember, the most important thing for them is to get those membership fees in. year after year after year. So, if they have to give up a little margin on the retail side, it's worth it. But when it comes to pricing, I mean, we had Jim Sinegal, the CEO of Costco, on the show recently, and he said, for him, raising prices is like sticking a needle in his eye. So, he's pretty adamant about passing the savings along. It's because of that business model. Maybe he's also a good guy, but that's the smartest thing for him to do on the bottom line.

They're approaching 89% retention on those membership fees, and they do that by holding bring people back in. James, since we're talking about retailers, the biggest retailer, Walmart, continues to struggle with same-store sales here in America, but Walmart raised its dividend this week. You must be tap dancing. I am excited. It puts it closer to 3%, which is about the threshold I look for in my Income Investor newsletter. It's incomeinvestor.fool.com. We're in a different era for Walmart. The stock has been flat over the past decade alongside the S&P, despite Walmart's doing very well. In other words, Maybe expectations were just too high 10 years ago.

I agree with Seth's point about the bifurcation. Walmart has recently moved into fancier items, fewer items, and it's almost pushed them more into the middle zone up from the dollar stores, and that hasn't been the sweet spot lately. So they're trying to pull back now, getting cheaper, and sort of re-cluttering their stores, if you will, to counteract the trend they've had of, I think, seven quarters of same-store sales decline in the U.S.

James, let me follow up, because it sounds like the stock is more attractive because of the higher dividend. Is it also a signal, whether they mean to or not, from Walmart that, hey, don't count on a ton of appreciation with our stock? It probably is a little bit, or at least it's a move to attract a different investor base. Dividends are hot right now. So being a dividend stock is hot. It makes sense. And they're trying to say, yeah, we're not the sort of the exciting company we were in the 90s, but we still can make you a lot of money. Right. It's not the Walmart of the 90s, but the emerging market potential here is still pretty significant. And that's where the growth is going to come. If they can get their U.S.

Act together, that in conjunction with the international growth will make the stock a really good value here. All right. Enough with the retail. Let's move on to the week in oil. Oil prices hit their highest level in two years. Also this week, Noble Energy became the first company to get a deep water drilling permit in the Gulf since the BP spill. James Early, what did you make of the week in oil? A couple of things. I'll see if I can wind this all together. The ultimate story, Chris, I think is going to be higher food prices, because oil feeds into just about everything, including food, and that could cause more global unrest.

We have a lot of poor people in this world who can barely afford to eat right now, and if they can't afford, they're going to be angry. That's one thing. I would say a short-term trade here might be oil drillers like Transocean, Hercules Offshore. There are a lot of small companies because more drilling permits are going to be on the way in the Gulf. This is a response to the higher gas prices because of the Libya situation, despite claims of it being apolitical. Medium-term trade might be to short those same stocks

because Libya could abate. We could see oil go back down. But long-term, I wouldn't bet against oil, never. Seth? Well, a great time to get in. This was last summer when, in the wake of BP, everything was going to heck in a handbasket. I was saying, buy BP, buy all these other companies.

They are up significantly since then in the 60% range, at least the drilling ETF and some individual stocks. I'd recommend it up even more than that. And now we get this extra kicker, which is nice. But I would agree with James. Oil is always cyclical. So if prices on some of these equities get crazy, you might look at sort of easing up and waiting for the next time that oil stocks are not hot. And speaking of BP, they were in the news this week because BP announced that executives won't be getting their annual bonus from 2010, which I think, I mean, you know,

let's get some golf applause. Really? You're not going to get a bonus? Grannies didn't raise any idiots over there. If there was any bonus fun going on at BP, the press would just hang them again. You're listening to Motley Fool Money. Chris Hill, Seth Jason, James Early, and Ron Gross as we go through some of the headlines of the week. Apple introduced the iPad 2 this week. It's lighter, thinner, faster, and has two cameras for video chats, all for the same price as the original iPad. Steve Jobs made an appearance to introduce the new product, which will ship to stores later this month.

Seth, I will start with you. What did you think of the device? What a surprise. Slightly improved over the last one and now includes features that some of the competition has already included in their tablets. That's actually been the way of the iPod and some of the other Apple products. They often get credit for integrating incremental advances that already have appeared in competing products. And that's one of the things that's genius at Apple. They somehow make you believe they invented every little thing.

Where Apple really has an advantage, I think, in the tablet wave that we're getting right now is that the competition is dropping the ball. They're pricing these things way too high. Apple, I think, already has a cost advantage. And so when Motorola Zoom comes out, it looked like a pretty good tablet, but they priced it way beyond what you could get a comparable iPad for, at least a comparable as far as most consumers are concerned. I think this is now Apple's game to lose, and that's actually bad for everybody because more competition would drive Apple to make a better product. James, for once, I agree with Seth about Apple. Oh, no. That's a side of a market top. As if in response to a lesson learned with its PC failure, Apple has seen the tablet as a market that it can own entirely, unlike, say, the iPhone, which is already an existing market.

So they're willing to take half the margin on the iPad as they make on the iPhone and a lot less than they make overall on average to sell these iPads because they want to get out there and sort of own this. What kind of impact is this going to have on the PC market? And I include Apple in that. I mean, this has to have some sort of negative effect on laptops and PCs, doesn't it? I have the humble pie on this because I was a skeptic on tablets to begin with, but Apple made them cool. You know, I'm waiting for them to make a tablet that flips open to reveal a keyboard.

Well, they have that already. That's the weirdest thing about it. I've been flying a lot lately. I've been running a marathon a month, and so I'm on a lot of airplanes. And what I see is people with their iPad, and then they have a little keyboard, and they have a little box. They wrap it up, and by the time they're done, they've got a package of stuff that's pretty much the same size as the notebook computer I have sitting here. But I don't think they're actually going to displace notebooks and laptop computers because the capabilities of a notebook computer far exceed what you could do with a tablet. But netbooks, I think, are dead, and that's something I thought as soon as the tablets came out.

I thought if they got any traction at all, they were going to kill the netbooks, and it looks like they are. Now, James, why do you say that you were skeptical about the iPad? Is it just because you compared it to an El Camino? It is exactly because I compared it to the El Camino, the car, truck, kind of neither of either world. But, you know, it's cool, and that's what Apple does. It makes something cool, and it made an El Camino cool to my amazement. And, hey, let's give them credit. Coming up, you won't believe what Warren Buffett said.

We'll explain after this. Stay right here. This is Motley Fool Money. And how many times have you heard it said, a fool and his money will part? Welcome back to Motley Fool Money. Chris Hill here in the studio with Seth Jason, James Early, and Ron Gross. Guys, we're going to dig into the crime files. This week, the SEC charged former Goldman Sachs director Rajat Gupta with insider trading.

Gupta allegedly tipped off a hedge fund on a number of occasions while he was on the Goldman board. That included allegedly leaking word of Warren Buffett's $5 billion investment in Goldman in September of 2008. Ron Gross, what is your take? And please feel free to make liberal use of the word allegedly. Yes. The alleged arrogance going on here is unbelievable to me. The illegality, the unethical nature, the arrogance to think you would not get caught. How could it be anything other than appalling?

And I would imagine everyone's going to have some penalties. Allegedly. You certainly have to disgorge those profits. James? But these profits weren't even that big in the first place, which is ironic. This guy's a billionaire, and he made maybe $40 million, $45 million off these trades, apparently, which doesn't seem to be worth the risk. Microsoft is hoping to capitalize on the popularity of Daily Deal websites

by incorporating them into its Bing search site for smartphones. Seth, you're a fan of Bing. I actually like the search engine. and they have a pretty picture, and they actually get pretty good results. They're a bit different from Google's. I tend to use them both. I use Bing a little more often. So a smart move?

I think it is, but here's the problem. I don't think there's any excess return for Microsoft shareholders here. I think the only people who are going to be affected by this are those poor schlubs at Groupon who didn't sell when the selling was good with Google. Everybody is coming after that market right now, from Facebook to I saw a new one from Yahoo the other day, and I just don't think it's a great business. I think that once you've tapped everybody that one time that they try and work with Groupon, then I think your growth ends.

So I think this, instead of being a Microsoft story, it's more a story about the complete lack of a moat at Groupon. I agree with Seth. Again, actually in the same show. This is the parachute pants business model, the tracksuit business model. It's cool for a little bit, and then it's not. Once people get their business out there and do this Groupon for one time, taking a fourth of what they would usually charge, by the way, I don't see what their incentive is to do this over and over and over again. James, did you own parachute pants?

You know, I owned several pairs of parachute pants, and I was a bit handy at breakdancing, I will say that. Wow. You going to display those skills after the show today? Please. Big week for Warren Buffett. The annual shareholder letter was released, and news this week that he's entering the insurance market in India. Ron Gross, what did you make of Buffett? Buffett was everywhere this week, right?

He was. CNBC, too? Yeah, that's his go-to place. He might like Becky a little bit. He is a fan of one host in particular of Squawk Box. I think that's fair to say. Allegedly. Alleged fan.

Yeah, so he was all over the place. I think this announcement that he's moving into the auto insurance business in India makes perfect sense. It's a large market there that they've yet to really move into. If that works, they'll move into other lines of insurance. They're going to use the Geico model, the internet and phone model to do it. so I think that makes perfect sense. His shareholder letter is always a must-read for us fools, as well as the investment community at large. I think some interesting things. He said his businesses were closer to inching along than chugging along, so things are improving,

but we're not there yet. And as has been reported, he's really itching to make an acquisition, but it's not necessarily easy to find one that's big enough, one that is cheap enough in this environment. Even though I own Berkshire shares, can I be the naysayer? Can I cast aspersions? Does Buffett, do they have an advantage in the Indian insurance market? In other words, what I'm saying is Geico had this advantage in that it sold primarily to these boring government types, right? People who were presumably, the whole group of them, lower risks, and that was why this worked out so well. Do they have an advantage in India in finding sort of the core group of Indian car drivers who are going to crash less?

Certainly not, did I say. They didn't give much information when this just came out recently. I'd be really surprised if this works out as well as people imagine. I think there's money to be made, though. I don't know if they'll be an industry leader, but I think there's money to be made. Now, as I mentioned, he was on CNBC's Squawk Box earlier this week. Among his quotes, I'd rather have all the farmland in the United States than all the gold in the world. Fruit of the Loom, which is one of the subsidiary businesses, he says that Fruit of the Loom, our motto is, we cover the asses of the masses. So, Buffett knows how to turn a phrase. And

someone else who certainly, of late, knows how to turn a phrase is Charlie Sheen. He's been in the news this week. There's been a quiz going around the internet with 10 quotes, five from Charlie Sheen and five for Colonel... Charlie Manson, I thought. Well, the one I saw was Qaddafi. Oh, nice. Colonel Qaddafi. And you have to guess, did Qaddafi say this or did Sheen say this? And I will, in full disclosure, I only got four out of ten right. So, here's what we're going

to do. I'm going to spot you up with a quote. You tell me, is this Charlie Sheen saying this, or Warren Buffett saying this? I was hoping this would be the game. And we'll bring Steve Broido in on this. Steve, are you up for this? I'm looking forward to it, yes. All right. So, Charlie Sheen or Warren Buffett. The quote is, I will not believe that if I do something, then I have to follow a certain path, because it was written for normal people. Ron, what do you think? Charlie Sheen, definitely.

Charlie Sheen. So obviously Charlie Sheen. Definitely Charlie Sheen. You're right. Charlie Sheen across the board. All right. Second quote, I prefer buying things. Otherwise, saving money is like saving sex for your old age.

Charlie Sheen. Charlie Sheen. Charlie Sheen again. Oh, that's Warren Buffett. Definitely Warren Buffett. That's Warren Buffett. Two for two. The word sex threw me off.

I didn't see it. You know what? If you haven't been listening to Buffett, he is a dirty old man. One of the most popular articles on our website, fool.com, is basically a collection of quotes of Warren Buffett's that relate to sex and women. And there are a lot of them. There are a lot of them. All right. One more quote.

I get in trouble for being honest. I'm extremely old-fashioned. Warren Buffett. Warren Buffett. Charlie Sheen. That is so Charlie Sheen. Steve? I'm going Buffett.

It's Charlie Sheen. Oh. And I think when we look at the- Who's the man? When we look at the lifestyle of Charlie Sheen- Winning. Winning. Yeah.

We think old-fashioned. You know what? I am an F-18, and I am dropping my ordinance on every one of you punks. Go ahead. Go home and sleep with your ugly, wait, what, dogs or whatever he said. You have tiger blood, don't you? My tiger blood is confusing my quotations. All right.

Seth Jason, James Early, Ron Gross, guys. We'll see you later in the show. Coming up, we'll talk with Ted Leonsis about the business of happiness and the future of pro sports. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. After a career spent mostly in the technology industry, Ted Leonsis is now the majority owner, chairman, and CEO of Monumental Sports and Entertainment, which owns the Washington Wizards, the Washington Capitals, and the Washington Mystics. He is the author of several books, the latest of which is The Business of Happiness,

Six Secrets to Extraordinary Success in Work and Life. And he's here in studio. Ted, welcome. Hey, thanks. So what got you interested in writing a book about happiness? Well, like most of your listeners, I was programmed to think that there was this formula for happiness where if you studied hard and got good grades, you'd get a good job, you'd make a lot of money. And if you made a lot of money, that you'd be happy. And you define your happiness via success. And as life went on and I had my reckoning, I was in a terrible mishap with a plane,

I realized that if you're happy, you can be successful. But if you're successful, it doesn't necessarily mean that you're happy. So I don't want to give away the entire book but six secrets to happiness in work and life what are what are a couple that you think are essential? Well one of the things that happened while I was writing the book and was that there was this big pivot that this is not just a book for individuals it's a business leadership book and it really came down to a few key attributes. One was that you were an active participant in multiple communities of interest. Being very, very active at work and at church and at synagogue or with your PTA, having that good third place becomes vital for your overall success. And you

look at the most successful companies, be it a Facebook. I know the most successful product I ever launched at America Online was AIM. Howard Schultz was involved with your company for a if you ask Howard what business is Starbucks in, he'll tell you it's the neighborhood community business. And so Facebook, AIM, they're all about community. Second is self-expression, high levels of self-expression. There's a reason that there's 250 million active monthly blogs. There's a reason that American Idol is still the number one show on network television, that having high levels of personal expression is probably why I wrote the book. It's why I make movies. It's why I blog every day at Ted's Take. And I think self-expression and

individuals that pursue that find balance and become happier. And the happier you are, the more open you are to success. But companies that activate their employees in the communities of interest and companies that allow their employees to self-express, they tend to be the more successful companies. What are a couple of companies out there in America or business leaders that you think are really getting it right in terms of happiness? Well, I was involved early on. I'm very active on the board of directors of a fantastic young company called Groupon. And Groupon reminds me a lot of the very early days of AOL. They're on a mission. They're in pursuit of what I call a double bottom line. They're trying to

do good. And by doing good, they're doing well. In Groupon's case, they do good. They help people get into a community of interest and group shop. They get them the best deal. And then they help small companies, small merchants, your neighbors, if you will, not only to get a lot of customers, but to get cash up front because, you know, over the last two years, banks were not supporting small businesses. And so, you know, there's a perfect business model, a company who's executed on it very well. And, you know, Forbes called the fastest growing company in America. And being an insider, you know, it's probably undersold how fast it's growing. You're listening to Motley Fool Money. We're talking with Ted Leontes, the chairman and CEO of Monumental Sports

and entertainment. You mentioned you blog every day at Ted's Take. One of the things that's on your blog is a list of 101 things that you want to accomplish before you move along. Well, I made the list about 27 years ago after I had survived a mishap in a plane. And, you know, I prayed really hard and tried to cut a deal with whoever was listening on if I lived, I hope to be able to leave more than I take. And, you know, it was a very aspirational list. I think I'm at 82 of the 101 things. But it really was the beginning for me of realizing that every individual and every company will have a reckoning. And the first thing you do when you have a reckoning in embracing it is you make your plan. In my case, it was a life list. When I just bought

the Washington Wizards, the first thing I did was the 101 things to do to make you fall back in love with the team. Everyone has to have their list. And then as I matured and I started to pursue crossing off all these things on the list, I realized really what I was on was this path to self-actualization and happiness. And to be honest, all my companies are on that same path, that the happier the employees are, the more connected they are with the higher calling and mission of the organization, the more that they can show empathy and give back, the more productive the company becomes and the more value that it builds. But one of the things that's on your list is swimming with great white sharks. I'm sorry. There are some that I understand, like travel

and that sort of thing. How did that conversation go with your wife, by the way? Oh, look what I Well, that one she'll do with me, the going in outer space, she probably won't. I think it was really trying to craft a life list that how will you know that you lived a life without regret? And what are the kinds of things that you can do, be it through philanthropy, through it? You know, I wrote down 25 years ago on a sports team win a championship. And that opportunity presented itself. I had to do it. And now it's 12 years into my ownership.

It was the greatest thing that I could have done both economically and emotionally. It's been a great thing for my family. And so that list became very important as touch points on things to do that I could look back and say I accomplished a lot. But it really was the activator for this road that I've been traveling down on trying to build value and do things, do it the right way. When the average sports fan like me looks at pro sports, one of the things that we see in the headlines these days are labor troubles. Certainly in the NFL, that is the case. There's talk of the possibility of a lockout. You're obviously a lifelong sports fan, but now you're an owner.

What do you think is the biggest misconception about the business of pro sports? Well, for the most part, most teams don't operate on a profitable basis. I think people think that owners make a lot of money owning the teams when, in truth, where you make your money is when you sell the team. These assets appreciate mostly because they're so scarce. There'll never be another hockey team or pro basketball team. At least I don't think there'll be in Washington, D.C. Probably not, no.

And so, but you can really lose a lot of money if you don't control your costs. And so, you know, as weird as this sounds, because the Caps are one of the most successful teams in the league, we're about to have our 100th consecutive sellout. I've never made a dollar of profit owning the Washington Capitals. Now, the team is appreciated in value, and that's wonderful on my balance sheet. But year after year, I keep writing checks, and it's mostly because the expenses involved, be it players, be it your investment in the arena, be it your investment in marketing, that they far exceed what you bring in in ticket revenue and television revenue. You're listening to Motley Fool Money.

Our guest is Ted Leonsis, the chairman and CEO of Monumental Sports and Entertainment. You started at America Online in the early 90s and had great success there in helping to grow that company. When you look back now at the merger with Time Warner, what stands out in your mind? Is there something that you think, wow, if we had done this differently, it would have gone more smoothly, been more successful? What do you think about when you look back? I always hate people that through hindsight always have the opinions. I did write in my book, you know, I was one of the few execs who thought it was a mistake. And for me, it was a personal issue.

We were a disruptor as a company, and we would attack traditional media companies. And now we were acquiring the world's largest media company. So I used to say, print is dead. And then I'd get an email after the merger, well, you don't want to say that. We own the largest publishing company. We'd launch something, and they would make sharing music free and easy. Well, you probably don't want to do that. we own the world's largest music company. And my belief was that their companies do best when

they're pure play. I don't like conglomerates. And, you know, had we stayed an independent company, you know, maybe we would have rolled up and become the platform for the internet. Maybe we could have acquired an eBay or an Amazon or a Yahoo, even a Google. But instead, you know, we parked those dollars and that effort around a company, Time Warner, which was a traditional media company. We had 10,000 employees. They had 90,000 employees. We used to put an emphasis on moving fast. When you have 100,000 employees, it's pretty tough to move fast. What did you make of AOL's acquisition of the Huffington Post? Well, you know, I've started a bunch of content companies, and I'm thrilled. I mean, they gave it a 10 times top line multiple, so they're going

have helped inadvertently build a lot of value for some of my companies and investments. You know, I started AOL Studios. I created the first original content on the internet back in 1993. And so I'm certainly a big believer. And I think that the Huffington Post is a great example of being able to build a great media property, blog network with a platform reaching lots of people. And I'm very hopeful, I still have friends that work at AOL, that it helps to activate more sales and drives the stock price up. And it's a win-win for everyone. You're listening to Motley Fool Money. We're talking with Ted Leonsis, Chairman and CEO of Monumental Sports and Entertainment. Before I let you get out of

the studio, we'll wrap up with a round of Buy, Sell, or Hold. This is a private company that's recently been valued north of $80 billion. Buy, sell, or hold Facebook as a public company? I would hold right now. I'm a big believer in Facebook in that it's become the start page, and it gets so much time from not just young adults, but from everybody. And I'm on Facebook. I already have 5,000 friends. I've maxed it out. And the advertising is very effective. I can see how this can become one of the great franchises. Buy, sell, or hold Twitter as a public company? I'm not a big believer in their business model yet. And so I think it'll be difficult for them

to live up to a very high public multiple. They recently launched a video streaming service of their own, buy, sell, or hold the likelihood that Amazon will overtake Netflix in five years? I don't believe they'll overtake Netflix. I do believe Amazon is a spectacularly managed and led company and have great customers and have everyone's credit cards. And they already kind of pioneered cloud computing. And so I can see how they can get into this business quickly and can be one of the leaders very, very quickly. Moving to the world of sports, some people love them, some people don't. Buy, sell, or hold mascots?

Mascots fans seem to love, and so I would buy mascots. Wasn't there just an incident over the weekend where a mascot at a college game inadvertently gave a guy a bloody nose? Well, I can see how that happens. You've got to remember, too, the people that would dress up as mascots sometimes don't have safety in mind. We've had mascots try to rappel down the roof of our building and the like, but that's why fans love them. I'm sure your attorneys love stuff like that. And finally, your home is on several lists of haunted houses in the Washington, D.C. area.

Buy, sell, or hold the existence of ghosts. You know, I'm going to tell you a funny story on that. somebody wrote a story a couple of years ago about, I bought a home called Marwood. Joe Kennedy lived there, FDR lived there. And so when I bought the home, I asked the owner, what's with the ghosts? Because I keep reading these things online. The author of the story had the wrong address oh my and so they wrote this story about this house was haunted and it's the wrong house so it just goes to show that sometimes you just can't believe what's on the internet sometimes something comes up on google and so um the guy who saw me the house laughed said look if the house was really haunted i would have charged you more the book is the business of happiness

six secrets to extraordinary success in work and life ted leontes thanks so much for being here you so much. Be Foolish. Coming up, a look at the stocks on our radar. This is Motley Fool Money. As always, people on the program may have interest in the stocks they talk about. Don't buy or sell stocks based solely on what you hear. I'm Chris Hill, and back in the studio with me, our trio of senior analysts, Seth Jason, James Early, and Ron Gross. Guys, time to talk about the stocks that are on our radar. And we will be bringing our man Steve Broido in from the other side of the glass. One question that all three of you have to answer. So, I hope you brought your A-game in terms of your research, Ron.

I can bring it. All right. What's your stock? Chris, I've been looking recently at a company called Genesco, ticker symbol G-C-O. It's a smaller company, a little bit under $1 billion in market cap. They're a footwear and sports of power retailer, about 2,300 stores in the U.S. and Canada. The most familiar brand for folks might be Johnston & Murphy, but there's Journeys and Underground Station are some of the other names associated with the company. Really solid fourth quarter numbers. Sales are up 17%, earnings up 19%. Organic growth plus acquisitions that they're making. Great

balance sheet, zero debt. I think it looks reasonably priced at about six times earnings before interest, taxes, depreciation. So I'm going to jump into it a little bit more. All right. James Early? Chris, I'm going to give a hat tip to analyst Alex Pape, who's actually a fountain of stock ideas, I must say. He gave me this idea of TK Offshore Partners. The ticker is TOO. This is a $1.6 billion partnership. It owns a bunch of ships that go out to oil rigs way offshore and take the oil and then bring it back to the shore. Or sometimes other kinds of ships suck the oil up from offshore and bring it home. Same idea. 8% yield, or close to 8%. I'm not sure it's the

cheapest stock, but certainly as we use more oil, and as we use more oil coming from way deep wells, way, way offshore, companies like TOO are going to look better and better. So, Jason. Enernoc. The ticker is E-N-O-C. This is a little complex. I will try to distill it down. This company aggregates demand response for electricity. In other words, it goes to businesses like grocery stores and others, and it says, hey, when the power grid says we're going to run out of juice, we need people to lower their consumption, we will tell you, hey, you've got to turn your lights down, turn the fridges off, something like that.

And Enernoc is the company that's in the middle of all of this. Well, a couple of weeks ago, they got into a bit of a spat with their largest customer, the grid operator, pjm actually the grid operator fired a shot across their bow in public and at the time the stock got killed and uh just today the the the energy regulatory commission uh the government branch in charge of all of this basically told that grid operator to shut up and they were going to completely ignore what they had said and enernox stock is up 12 percent on the news but i think it's going to continue to rise a little bit uh after this and of course it's a long-term play on greater efficiency, smart grid, that kind of thing.

So I think it's still worth a look, especially now that some of the scariness has cleared up. They don't really tell the supermarkets to turn off the refrigerators, do they? Well, they may switch them over to diesel. They may turn up the temperatures in places that they can. They can turn down the air conditioning. Food, of course, has to be kept at the right temperature.

Dairy lasts longer than you think, Ron. As long as my ice cream is unaffected. All right, Steve Broido, one question to rule them all. One question. If oil prices continue to rise, whose stock does the best? I think mine does. Would that be fair? That would be fair.

Yeah, it is in the oil services industry. I disagree, because anyone can do what James' company is doing, and there are lots of them. Actually, you're thinking of commodity shipping. This is more of a specialty. There's still a lot of them. There are other people in Eternok's business, but as energy prices get higher and people do not build more electrical plants, demand for this sort of service should keep going up. But I think we all agree that Ron's shoemaker is not going to be nobody likes. At High Oil, there's going to be more people walking to work.

You don't need shoes, huh? Seth Jason, Ron Gross, James Early. Guys, thanks so much for being here. Thank you, Chris. Thanks to our special guest this week, Ted Leontes. His book is The Business of Happiness, Six Secrets to Extraordinary Success in Work and Life. If you haven't already, check out MarketFoolery. It's our new daily podcast online at marketfoolery.com and on iTunes.

That's it for this 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.