Motley Fool Hidden Gems Investing - Motley Fool Money: 05.30.2014

Episode Date: May 30, 2014

Apple buys Beats.  Michael Kors reports some fashionable numbers.  And Google unveils its latest self-driving car.  Our analysts discuss those stories and share some stocks on their radar.  And actor, comedian, and podcaster Adam Corolla talks about his new book, President Me. Learn more about your ad choices. Visit megaphone.fm/adchoices

Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money Radio Show. I'm Chris Hill. Joining me in studio this week from Motley Fool supernova Matt Argesinger, from Motley Fool income investor James Early, and for Million Dollar Portfolio, Ron Gross. Good to see you, gents. Good to see you, Chris. We'll break down the latest news from the retail industry, the sports industry, and more.

Actor, comedian, and best-selling author Adam Carolla is our guest this week. And as always, we'll give you an inside look at the stocks on our radar. But we begin this week with a couple of big deals. And, Ron, let's start with Apple, which is buying music company Beats Electronics for $3 billion in cash and stock. Apple is now going to offer Beats streaming music service and premium headphones. Apple's got the money. They can spend whatever they want. And will.

But does anyone expect this acquisition to really result in a lot of new revenue for them? I do not. I think it's kind of much ado about nothing. To be honest, I didn't even open my Excel spreadsheet to make any adjustments. We'll see where it goes. They clearly spent this kind of money for the talent. There's 500 folks over at Beats, good people, obviously Jimmy Iovine and Dr. Dre. They want to do the streaming business right.

Apple Radio has not been what they had hoped it would be. They think, finally, Beats is one of the companies or the company that is getting this right versus Pandora, Spotify, those folks. And $3 billion is not a lot of money for Apple. it's weird to say, but it's not a big ticket. James, so did they just do it for the cool factor? I think so. I mean, you have to wonder why couldn't Apple just do this themselves? I mean, they're big enough. Why do they need Beats to do this? They're paying, I mean, they're getting some value. They're just paying a lot of money for it. And that's my question. Matty, Ron mentioned Pandora and Spotify. If you're at either one of those companies,

how nervous are you? I don't know if I'm that nervous if I'm a Pandora, because I just feel like Pandora is a little bit of a different model. I know Apple wants to do radio. They want to do iTunes radio. They want to get it right. I still think this is more of a streaming music play versus a music discovery service that Pandora is. So I feel like Pandora's got it.

Do you subscribe to a streaming music yourself? Just Pandora. You actually pay? I pay. You do. I like the free. Ron, Tim Cook has maintained throughout this year that by the end of 2014, a big new product is coming.

Does this acquisition tip his hand that it's absolutely going to be related to music? I don't necessarily think so. What caught my eye this week, more so than the Beats even, was a comment from a VP at Apple who said, Apple's product lineup for the rest of this year is the best it's been in 25 years. Those are big, bold words. The Worldwide Developer Conference for Apple is in San Francisco on Monday. I hope to learn more about what's coming. But I think this is the year, finally.

where we're going to see some innovation. Well, and it's amazing to see the new love fest for Apple. I mean, Apple, the stock has been up, I mean, I don't know how many consecutive days in a row, but, I mean, it is just, and you've got upgrades out there. Stock's up 14% this year, 64% from its 52-week low. I mean, so finally people have woken up, as you said. Ron's got the numbers. All right.

From technology to the sexy world of packaged meats, shares of Hillshire Brands up more than 40% this week after two separate companies made bids. First, Pilgrim's Pride offered to buy Hillshire for $6.4 billion. Two days later, Tyson Foods comes in with an offer of $6.8 billion. Matty, I like Ballpark Franks and Jimmy Dean Sausage as much as the next guy, but what is going on here? Well, where's the beef? And it's clearly at Hillshire Brands. No, this to me, I mean, this says more to me about the M&A market than in particular about Hillshire Brands and what they have and sausages and hot dogs and beef.

I mean, it's, you know, what you have now is a market, especially in the food and beverage industry, where, you know, companies have, to pardon the pun, cut the fat. And we've seen that a lot across the board. What did you do with the zingers today? Yeah, you know. So, these companies are running lean operations. They're looking to grow. And, you know, there's not a lot of growth to be had, yet there's a lot of cash on the balance sheet. So, this is an easy way.

With food and beverage, it's very easy to sort of tack on operations or tack on brands, flow it through the distribution system, gain, you know, global scale. It makes a lot of sense. I mean, so we see this happen a lot. If you've studied market cycles in the past, we're at that point now where there's not a lot of growth to be had. Companies are going to start losing the purse strings, and it's not surprising to see the food and beverage industry be first. But from the standpoint of society, is this something we want more of, more tube-form meat? I mean, in terms of the— Absolutely.

My dad used to work as a sausage delivery boy, and he won't eat sausages to this day when he was young just because he's soft. But how about those commercials with the sun, the Jimmy Dean sausage? Those are great commercials. I don't watch TV. You don't eat tubed meat and you don't watch TV. I don't eat tubed meat. Are you American James? They put the tubed meat in the animal intestine.

They clean it out. Then that's what they stick the sausage in. So it's doubly gross from my standpoint. I like to think that the process has been cleaned up since your dad was making sausage back in the day. But it is animal intestine. That's what they use. They synthesize that out of cow fat also. Well, that animal intestine business is somehow worth about $7 billion apparently.

People like it. Now, Ron, to the point Maddie made, the IPO market over the last six, 12 months has gotten a lot of attention. But it really does seem, when you see deals like this, it really does seem like we could be seeing more M&A activity throughout the year. I think that's right. And Maddie's right. The balance sheets are so bloated. We've got so much cash. We've raised dividends. We've bought back stock. And yet there's still tons and tons of cash out there on these balance sheets. So we're going to start to consolidate. People are going to cut costs. It probably doesn't bode well for employment, by the way, because people get laid off when synergies abound.

But I think we're going to see more of it. This week at the Code Conference in California, Google unveiled the latest version of its self-driving car, James, no steering wheel, maximum speed of 25 miles an hour. And Google says they're not selling them. They've made 100 prototypes. They're just going to sort of get them out there to test. But I've got to say, I watched the videos that they put together. I'm starting to turn around on this idea turn around in a good way or a bad way

in a good way before I just thought it was yet another step in the rise of the machines and our robotic overlords were one step closer and now I look at it and I think I want one of those people can ride in this car who you might not otherwise want to have

behind the wheel and that's a good thing I mean that's safer I mean maybe it's initial use is a punitive measure someone whose driver's license has been revoked has to ride at 25 miles per hour in this car. I mean, big picture-wise, it's certainly interesting technologically speaking, but it's sort of reinventing the same wheel instead of doing something new for transportation. I mean, it doesn't take away cars.

It just makes more slow-moving cars in the cities. And maybe they'll be faster, blah, blah, blah. We can use them on college campuses or retirement communities. But it's not a big step forward. It's just like a refined version of an existing step. One day I look forward to commuting to work, eating a tube of meat, watching TV in a Google car. I would sleep in my self-driven car. All right.

Let's move over to retail. Michael Kors, fourth quarter profit up 59 percent, revenue up more than 50 percent. And, Matty, their North American same-store sales up more than 20 percent. And yet the stock didn't really move. What's going on? Well, there's questions over margins. There's also the stock price that's just been on an absolute tear. And I think the number here you said, I mean, plus 20% comps in North America.

Contrast that with Coach, whose comps in North America were down 21%. And really, paradoxically, that is why I can never get excited about Michael Kors. Because to me, what you have there is a complete fashion shift. Essentially, all those people who for years had gone over to Coach to buy the leather handbags or to buy the jackets, the coats and everything, they're just going across the mall floor to Michael Kors now. And I just think that's something that can shift very quickly. To me, I can't find anything that says Michael Kors on a long-term competitive basis is doing anything more special than Coach. I will say that in all of the positives in this quarter, I didn't see a ton about their e-commerce strategy. And maybe I just wasn't looking hard enough, but it does seem like the retailers over the last six months who have done well, the specialty retailers, part of it has been a really strong e-commerce strategy.

I'm thinking about Williams-Sonoma, Kate Spade, that sort of thing. I hear what you're saying about the fashion stuff. It seems like if Michael Kors wants to take the next step, doesn't it have to be online? I believe so. So that's the real test of it, I think, truly, of whether or not this kind of business can sustain itself long term. You're not a long-term believer, it sounds like. I am not in Michael Kors. Fashion's a tough business.

Apparel, I don't hate it, but I'm not a usual fan of that industry. It's too tough. Coming up, former Microsoft CEO Steve Ballmer appears to have found himself a brand new job. Stay right here. This is Motley Fool Money. You never give me your money. You only give me your funny money. Welcome back to Motley Fool Money.

Chris Hill here in studio with Matt Argesinger, James Early, and Ron Gross. Let's keep going with retail, guys. Costco's third quarter profits up 3%, revenue up 7%. Ron, it seemed like, on balance, a pretty good quarter, but it didn't really blow anyone away. I think that's fair. Compared to other retailers, pretty good, but otherwise relatively mediocre. Thank goodness we didn't hear about the weather. We had Compstar sales up 4%, 6%, and if you exclude fuel and foreign currency exchange,

which is pretty good, especially compared to the other folks. Margin's a little bit weak. SG&A operating expenses a little bit higher than I think some were expecting. But all in all, the company continues to execute. 88% retention rates for its membership model. New store openings, probably another 30 this year. International expansion continues. So the company continues to do what it's done for quite some time.

Stock's not screamingly cheap at $115 a share. You mentioned the international expansion. When you look at the same store sales, they are no two ways about it. They're better in the U.S. than they are internationally. Is that a challenge that management has spoken to? I'm just wondering if the Costco model is just not as sticky outside the U.S. That might be fair. They haven't spoken directly to it, at least not that I've seen. It also may take a while for the warehouse model in general to kind of become more pervasive overseas. Shares of Abercrombie & Fitch up 5% on Thursday after first quarter results were better than expected, which, James, that means they just lost less money in the quarter than

Wall Street was expecting them to. Yeah, I mean, they're actually making some smart changes, to be fair to them. They're changing the format of Abercrombie. They're lightening up their Hollister stores. I mean, the place looked like a drug den before. I felt like I needed night vision goggles every time ron and i would go in there with our high school friends before but i've never been into a hollister but i've never socialized with james their comps dropped four percent which was sounds bad was better than the 5.9 expected and better than the 5.5 drop in the overall teen uh retail index but you know compared to this is from a market watch article i think compared to to like 2007 their their eps is like you know way less than half and operating margins

are down by 50%. So these guys have got to do something. Just like we talked about Coach earlier, retail is, Coach and Michael Kors, retail is fickle and they're busted the fire here. You mentioned the changes and Abercrombie CEO Mike Jeffries gave an interview recently where he talked about some of the changes that they are making. And I was really surprised by what he said because it made complete sense to me. He talked about things like, oh, we're going to cut down on the fragrance that we spritz in the stores, the advertising, which seems so focused on showing models' abs. They're cutting back on that.

They're making bigger sizes. It really seems like they're trying to make their stores and their clothing more attractive. Which is funny. In 2010, the CEO said that his clothes are only for, quote, the good-looking, cool kids, and there are certain people who don't belong in his clothes, specifically overweight people. So he's really done an about face, eating his own words here, but it's what they need to do. Average-looking people have money to spend, too.

Come on. But the models are only Abercrombie models. He said he wants to make it like a movie experience. That's why everything is all black and white. You can follow this radio show on Twitter. At Motley Fool Money is our handle. If you follow Matt Argersinger on Twitter, then you saw this nugget that he tweeted out this week. I've got this bad feeling that 3D Systems is the next Nuance Communications, a mashup of bad acquisitions and shareholder abuse.

which gives me the chance to point out that shares of 3D Systems down more than 10% this week after the company announced a secondary stock offering of around 6 million shares. What are they going to do with that money? Just go out and make some more acquisitions? Well, first of all, I tend to be a little more sensational on Twitter than I am in real life, certainly on the radio show. But no, yeah, they've got a secondary offering, 300 million. This is not unusual for 3D Systems.

They've done this many times in their past, And I wish they had done it when the stock was at $95 a share back in January, because that would have been much cheaper for shareholders. But the thing with 3D Systems, the thing that is starting to bug me a little bit, and it's bugged me for a while now, is that this is a company that essentially is issuing stock, which is a good thing. It's a pricey stock, but issuing stock to raise capital and just spending like mad on new acquisitions. I mean, this is a company that makes dozens of acquisitions every year. And the idea here is, well, the growth looks great. And so, you have to focus on the organic growth.

And even if you go back to last quarter, they had 28% organic growth. But you have to remember, that's just for acquisitions that were made prior to one year ago. And so, the company makes so many acquisitions that it's able to report general good revenue growth and organic revenue growth. And at some point, like Nuance, I believe they're going to make some bad acquisitions. They probably already have. And that's going to result in lower growth. It's going to result in write-downs. And for a company like this that's priced the way it is, it's not good for the stock.

You were at the Consumer Electronics Show in Las Vegas at the beginning of the year. You saw a ton of companies in this space. Are we going to see a lot of consolidation when it comes to 3D printing? Well, we already have, and with 3D Systems, Stratasys, and the others are buying a lot of these smaller companies. My problem is, though, they're making a lot of acquisitions in the consumer space, which I view as really just not the place you want to be investing if you're looking at 3D printing technology. Former Microsoft CEO Steve Ballmer is buying the Los Angeles Clippers for $2 billion. Some people seem surprised he paid so much for a team that has never been considered to be very good.

Ron, maybe they're unfamiliar with his history of overpaying for stuff when he was CEO of Microsoft. Wow. Nice one. As I said before we started taping, I'm happy for Steve Ballmer. I'm happy that he's doing this because he's learned one of the secrets of life, which is find an easy act to follow. And Don Sterling, for the moment, still the owner of the L.A. Clippers, is not just the most hated owner in pro sports. According to a recent poll, he's the most hated man in America. Yeah, it's good to be the white knight that rides in.

Even though he's relinquished power to his wife, I read that he's going to fight this and he's not selling. So there might be quite a road ahead here. It still needs to get approval from the league. But yeah, good. I think it's good for the team. And as I said, they needed a white knight. There were several bidders. He went a little bit higher than the rest.

That's quite a big number. I think it's good for sports franchises in general if you're an owner. And so, yeah. Are you a basketball fan yourself, Ron? No, not really. $2 billion for the L.A. Clippers. That is, I mean, if I'm any other major sports franchise owner, I'm sitting here with the Jabba the Hutt.

Hoo, hoo, hoo, hoo. Because, I mean, if you think about it, any other team, I mean, other teams, A, own arenas. They own real estate. They own all of the retail operations around it. I mean, they own TV rights. They're very valuable. L.A. Clippers for $2 billion.

I'm still blown away. I'm speechless. Ron, if you had $2 billion to blow on something, are you buying a sports team? What are you buying for $2 billion? Wow. Not a sports team. No? No, I don't think so.

You going on an island? Private island? Yeah, that really, really is where I'm going. Matty, what about you? I would love a sports franchise, but I can't afford one now with $2 billion. If I can only get the Clippers for $2 billion, forget it. James, you're not buying a sports team. No, no. I'd buy some sausages and destroy them just to help humanity.

Let's bring in our man from the other side of the glass, Steve Broido. Steve, $2 billion. What are you going to pony up for? Your own set of olive gardens? I'm buying the biggest water park in the universe. Really? Yeah, I love water parks. Bigger the better. You can always drop us an email. Radio at fool.com is our email address. That's radio at fool.com. We've got about a minute left, guys. Email from Rick Baker in Connecticut. As one of your dozens of listeners and an ardent student of the market, I find the flood

of information regarding not just the market, but individual stocks a bit overwhelming. So my question is, if you were limited to evaluating just three financial metrics to determine if a stock was worthy of consideration, what would you use? Let's just go down the line. You can each take one. Ron, a lot of things. Price earnings, price to sales. There are metrics that talk about the health of a company and how they're doing, and there

are metrics that talk about the stock and if it's cheap or not. I'm going stock here, and my favorite metric would be price to free cash flow. All right. Matty, what about you? That's a good one, but I'm going with insider ownership. I mean, if a major insider executive at a company owns more than 5% or 10% of the company, that answers so many questions right off the bat. James?

I'm going with return on invested capital. It's sort of like if you borrow money from a bank and you owe 7% on that loan, you better invest it to make at least 7%, right, to be viable. So that's the same idea for a company. All right. James Early, Ron Gross, Matt Argesinger. Guys, we'll see you a little bit later in the show. I need the dollar, dollar, dollar, that's what I need.

Hey, hey. Well, I need the dollar, dollar, dollar, that's what I need. Keep those emails coming. Radio at Fool.com is our email address. Adam Carolla is next. Don't go anywhere. You're listening to Motley Fool Money. Show me the money.

Welcome back to Motley Fool Money. I'm Chris Hill. Throughout American history, prominent leaders have written books before running for president of the United States. The book is a chance to share their vision for the country. And with the next presidential election just two years away, this scenario is playing out one more time. Adam Carolla is a radio and TV host, comedian, actor, bestselling author, and his latest book is President Me, the America that's in my head. Adam, thank you so much for being here. Thanks so much for having me on the program.

So this book is your manifesto, your vision for America. One of the things in your book that comes across when you're writing about energy is you're pretty focused in your day-to-day life on energy efficiency. This seems to be an issue that you have a lot of passion about. Well, I was thinking about it. I mean, every day when I come through my front door, some light, my kids' room's on. I came home the other day. My family had barbecued without me because I was out on the road.

I walked outside. It was a gas, a natural gas barbecue. I came out a day later. The barbecue was still burning a day in, like JFK's Eternal Flame. And I realized, I walk around just shutting things off, turning off TVs, turning off computers, shutting off barbecues. I realized all we do is talk about fracking and natural gas and solar and alternative fuels and wind power. Our country, honestly, and I'm not kidding, could start saving 25% in energy costs starting tomorrow if everyone would just wake up

and start shutting crap off instead of the guy who pays for it. If we honestly just took every child, woman, man, everyone who was in the house and who wasn't currently paying the electricity bill, the gas bill, the energy bill, if we put them all on the clock, we could save 25% tomorrow.

I mean, how often have you just driven past a commercial building on a Saturday and just seen it lit up like a Christmas tree and there was nobody in it. Or just you drive by an office and you see up on the eighth floor, it's all lit up and it's 10 o'clock at night. How many times, I live in Los Angeles, there's always a drought going on. I'll drive along the freeway, the two days out of the year it's raining, I'll see the sprinklers going off. The automatic sprinklers will be turned on while it's raining. We could to honestly save 25% in this world without doing anything, building no grid, doing no solar, not putting another coal-fired power plant online. Nothing. Just 25%. Start tomorrow,

if everyone would just wake the hell up. You're listening to Motley Fool Money, talking with Adam Carolla. His new book is President Me, the America that's in my head. You also host The Adam Carolla Show, which holds the Guinness World Record for the most downloaded podcast. We were talking about this during the break. You're involved in a lawsuit right now that I find in some ways hilarious, but in other ways, a little scary. And I was hoping you could talk a little bit about it because on our daily podcast, Market Foolery, last month, we actually took an entire episode just talking about legal issues. And we talked about the fact that you're now being sued by someone who claims to have the patent on podcast technology.

And I guess they're looking to get a cut of the money you make off your podcast. What is the status of that right now? Well, I was just in Washington, D.C., and I just went up to the Hill and I just spoke about this, and they just had a bill that they were looking to pass that was going to get these guys under control, and I think it was Leahy from Vermont who put the kibosh on it. So Congress is interested in doing something, except for, as per usual, they're doing nothing. And it's the kind of thing where I think, and I believe it was Leahy, in his statement

And he said, you know, patent trolls are a scourge, it's a big issue, and it must be addressed, just not now. So there's your government snapping into action once again, everybody. Well, I should mention you have a legal defense fund that you have set up for this lawsuit. I've contributed to it. Anyone else interested in contributing to it can go to fundanything.com slash patent troll. Yes, thank you for mentioning that. It's pretty simple. Patent trolls have been around for a while. They buy a patent, and they use them, and they use them to, you know, like a stick to beat businesses. a normally big business, but once in a while small business in our case, and these guys sue.

They have a district in eastern Texas that is very friendly to them and their ilk, and they run all their court cases through, I think, Lubbock, Texas, and they're not in Texas. We're not in Texas. We tried to get a venue change. The judge, who doesn't get elected and is not going anywhere, he basically has tenure, said, no, it'll take place in eastern Texas in my district, even though all they have is a P.O. box. Could you imagine telling the government, oh, yeah, I live in California, I work in California, but I have a P.O. box in Nevada, so those are the taxes I'm going to pay. You can only imagine how good that would go over with the federal government.

But either way, the government is kind of with these guys, or at least this part of eastern Texas is, because it brings a lot of commerce to their small town. The juries are friendly to them, and they sue people for a living. They buy a patent. They say, you're using our technology without our consent, and then either pay us or we'll sue you. well, we realize if we pay them, then they're just going to go after every podcast. So why wouldn't they go after your podcast as soon as they're done cashing my check? So instead, we circled the wagons. I spoke to many other people in the podcast community, and we said,

look, we're going to raise money. We're going to fight these guys. Unfortunately, this kind of litigation is amongst the most expensive litigation there is. It is literally $1.5 million is the estimate for fighting a case like this. Now, we will win because we didn't do anything. And or by the way, if we lose, look out, internet, because everybody's next. But it's going to cost $1.5 million to find out that they didn't have a case. And this is why we need reform, because these guys sue with impunity. They know just how expensive it is to defend yourself. And they know that most people settle because you're a business and you don't want to pay one point five million dollars to attorneys and go back and forth to eastern Texas. It's the

cost of doing business and lost opportunity as well. So there needs to be reform. There should have been. And it got shot down about two days ago. So we'll see. We'll see what the man does about it until then. And we're on our own anyway. So we've raised about $400,000 and we spend it about as fast as we get it. And it's all going toward beating these guys and clearing, making it safe for the world to podcast. Well, we have a lot of podcast listeners, not as many as your show has. But again, the website, if you're looking to contribute is fun to anything.com slash patent troll. Adam, you strike me as someone who I think a lot of people know from one aspect of your professional life. Maybe they listened to the podcast or they've

read one of your books or they remember you from the man show or something like that. But when I step back and look at the body of your work, you've, you've been involved in pretty much every aspect of the entertainment business uh i am curious do you have one that you particularly enjoy more than the others whether it's for monetary reasons or just because you enjoy doing it i just finished doing an independent film which is you know really hard work but but but really satisfying um i you know as i as i get a little bit older as i raise twins i start to sort of think about leaving a mark so to speak and i realize being in radio all these years and doing a podcast all these years and all that kind of stuff it's great but it sort of it sort of goes

up into the ether so to speak whereas writing a book making a movie uh i'm just finishing an independent documentary on Paul Newman and his racing career, his driving. He was a professional driver. So for me, leaving something behind, you know, just a couple of DVDs and a couple of books that says I was on this planet is kind of a nice legacy. But doing the podcast is fun. It's on my own terms. It's in my own studio that I built and so on and so forth. But it's really just the variety. It's literally, you know, I'm out on a book tour right now and I'll be up on stage in Chicago later on talking with Richard Roper and taking questions about the book. And then on the ride home, I'll be on the airplane looking at a rough cut of my independent romantic comedy and

And working on that, when I get back to L.A., I'll put the finishing touches on the Newman documentary. And then we'll do a podcast that night. And a month from now, we'll start working on season two of Catch a Predator or Catch a Contractor, my Spike show, home improvement show. So it's really the variety. I suppose if I did any one of them for any length of time, I would probably get tired of them. Do you ever sleep? you know, something, something happened. I lost my job in terrestrial radio about five years ago. And I no longer, for the first time in my career, I didn't have a contract. And it was really kind

of scary not having income, not having a guaranteed anything, just, you know, living gig to gig, so to speak and i just and and it was right about the time or with short you know my twins were two years old and i for the first time in my career lost my job and had no nothing nothing on the nothing you know nothing but speculation on on the horizon and i just sort of kicked into overdrive and it's worked out quite nicely unfortunately i haven't slowed down so i'm gonna have to just sort of realize, you know, I'm going to have to stop, you know, show business is an easy business to run scared in because it's a lot of here today, gone tomorrow. And you don't know, you know, you're only good as your last book or your last podcast or your last whatever. But I guess at a

certain point I should just read, just go look, you know, reel it in a little champ, you're fine and take it easy. And I think that's what I'm going to start doing as soon as I'm done with this book door. You mentioned your kids that you and your wife, the future First Lady Lynette, have. Your kids are getting a little older. I'm curious, because we have parents who listen to the show, what is one thing about money that you've tried to teach your children? Well, I'm trying to teach them that it exists, because I'm trying to teach my wife that, too. And the reason I say that is everything is plastic now. Everything is a debit.

Everything is automatic payment. They don't see money. They don't handle money. It's, you know, my stuff goes right into the account. Everything gets sort of paid for automatically. When they go out for frozen yogurt, mama pulls a piece of blue plastic out of her wallet, just swipes it. Daddy magically pays for it.

It doesn't exist in its own weird way. It's not tangible. I mean, you know, back in the day when you paid for things with pelts and you had to go get those pelts or you had to go get that silver or that gold, man, it meant something. You know, when you bartered, it meant something. If somebody said, you know, I'll give you a pint of ale, but you go cut a cord of wood for me, it meant it. That pint of ale meant something when it was in your hand. And now I'm trying to teach them that this stuff does feel like something. And the reason I'm on a book tour is the reason Mama gets to swipe her credit card and get your frozen yogurt.

So I'm trying, but it's hard in a world where everything's a debit card and a swipe and you walk out of the store with whatever you want. Final question, and then I'll let you go because I know you're busy with your book tour. Just this week, Taco Bell appointed a new CEO. Brian Nickel had been one of Taco Bell's executives prior to getting the top job. Are you surprised that you didn't get some consideration as the next CEO of Taco Bell? Well, you're alluding to my last book, not Taco Bell material. It would have been nice, as they say, to at least have gotten a phone call. But once again, yeah, I applied for a job at the North Hollywood Taco Bell when I was 16 and I was turned down, which doesn't do wonders for your ego as a 16-year-old male coming up.

But it would have been nice, and my first order of business would be to bring back the bell beaver, which if your listeners aren't familiar with, they can look up and marvel at. The book is President Me, the America that's in my head. It's already an Amazon bestseller. Adam Carolla, thank you so much for being here, and keep fighting the patent trolls. Thanks so much, Chris. Coming up, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. As always, people on the program may have 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 with Matt Argesinger, James Early, and Ron Gross. Guys, it is that time once again, time for the stocks on our radar. And we'll bring in our man Steve Broido from the other side of the glass to hit you with a question. Ron Gross, you're up first. What do you got this week? Finally, finally, finally, I am able to recommend Amazon.

Really? A-M-Z-N. What? Stock is off 25% from its 52-week high. We've been waiting for a pullback. We really like this business. Jeff Bezos knows what he's doing. Many different ways this company can go, but obviously, they are the big gorilla in the

e-commerce business, and we think there's good things to come. Steve, question about Amazon.com? So, I'm a shareholder, and my dad always yells at me about this and says, when are they going to make any money? Exactly why the stock is off 25%. I think people are getting fatigued waiting for profits. We like the fact that they're spending money to build out their distribution facilities, their technology, their marketing. We're okay waiting. We're long-term investors. Profits will come so that sounds like i don't know yeah i don't know when are they gonna make money

maddie what are you looking at i got a company that's about to make a lot of money and it's yahoo ticker y-h-o-o um as most people know you know alibaba which is the ginormous chinese e-commerce giant speaking of e-commerce um that's about to go public any day now um and that's going to be bring a huge windfall to yahoo which owns about 24 of the company um if you strip out Alibaba, strip out Yahoo Japan, strip out some cash from Yahoo. Yahoo, the core business, say what you will about it, is trading for about one and a half times EBITDA. Incredibly cheap. And I'm not a guy who usually likes cheap stocks.

But I just think it looks too good to pass up right now. We just recently recommended it in Supernova. And I'm excited to see what happens with the Alibaba IPO and what that does for Yahoo. Steve, question about Yahoo? What about all of Yahoo's legacy stuff that people used to know? The Yahoo forums and the chat and Yahoo. They were involved in everything, Yahoo Mail, and now it seems like all that's pretty much gone by the wayside. Well, you'd be surprised.

There's still many, many users that use those platforms. But again, Marissa Meyer is taking the company in a little bit different direction, investing hard into content, mobile. We'll see if any of that pays off. But she's going to be tested after this Alibaba IPO, and that's what I'm interested in seeing. James Hurley, what are you looking at this week? They're working with a company called Orange, formerly France Telecom, but then they adopted the name of their mobile brand. This is an income investor recommendation. It's up 30% year-to-date.

I've just upgraded the valuation. This got pounded for the past several years. It's just really crawled out of the toilet. It was down because they had suicide problems. They had all kinds of economic issues. There's this former porn entrepreneur in France who has now made a rival telecom brand called Free, which is really taking market share. But now Orange has finally found some footing, and their freefall has been sort of averted.

Dividends around 7%. That's going to get cut, but I see still a nice div in and certainly upside in this stock. O-R-A-N is the ticker. Steve, question about orange? Seems like a lot of drama there. James, do you have a favorite French film star? Is there more than one? You're asking the wrong guy.

You're asking the wrong guy. I've not seen a movie in many years to my watch. Marlon Brando, Last Thing on Paris, Even though he's American. Gérard Depardieu. I was just going to say. Oh, yeah, yeah. He's a winemaker now. You know that?

I did not. Steve, do you have a favorite French? Julia Pinoche, perhaps? The lovely and talented Julia Pinoche. We'll wrap up there. Ron Gross, Matt Argesinger, James Hurley. Guys, thanks for being here. Thank you.

That's going to do it for this edition of Motley Fool Money. This show is mixed by Rick Engdahl. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.