Motley Fool Hidden Gems Investing - Motley Fool Money: 09 13 2013

Episode Date: September 13, 2013

Apple gets a weak reception.  Twitter announces plans to go public. McDonald's serves up surprising earnings.  And the Dow does some remodeling.  Our analysts discuss those stories and tech writer Rob Pegoraro talks smartphones, smartwatches, and laser-guided beard trimmers. Learn more about your ad choices. Visit megaphone.fm/adchoices

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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's supernova, Matt Argersinger, and for Million Dollar Portfolio, Charlie Travers and Ron Gross. Good to see you, gentlemen, as always. You do it, Chris. We will dig into the latest from restaurants, entertainment, technology, and more. We will ask the question, is apparel retail the single worst industry for investors right now?

And as always, we will share a few stock ideas to put on your watch list. But we begin this week with Apple. They had the big event unveiling two new iPhones, the 5S and the 5C. And, Ron, I think it's fair to say that investors, anyway, were not impressed because shares of Apple down around 7% this week. Yeah, I was underwhelmed as well. I said earlier in the week I'm kind of getting fatigued about this focus on these events, these one-day events. But then having said that, I was disappointed too along with everyone else. I was expecting more.

They telegraph so much. There's so much that gets leaked that it's so easy to disappoint unless you kind of fulfill on all the promises. We knew they would come out with two phones. One of them would be lower priced. We hoped for a China mobile deal. Didn't get it. we hope for something from Apple TV, didn't get it, even didn't get anything about that watch that everybody keeps talking about. So, you know, investors, certainly short-term-minded

investors sell off the stock. We would never do that based on a one-day event. We still like the company long-term. And yet, Matt, the China mobile deal really was out there. I think a lot of people were just flat out expecting it to be done. That's not to say it doesn't happen at some point in the future, but I just thought it was a communications breakdown where Apple really should have knocked this rumor down if they didn't have it locked up this week. Right. I actually think that was the biggest reason Apple sold off. To me, that deal was in the bag. And I thought, when they made the announcement that they were going to have a press release in Beijing, and it didn't happen, they've sort of made some progress

there. So, there might be a deal with China Mobile down the road. But the fact that they don't have one now, and the fact that the iPhone 5C isn't all that much cheaper than the iPhone 5S, which really is going to hurt Apple as they try to expand into China and other emerging markets. So that, to me, was the biggest disappointment. Charlie, should we be surprised that this is what Apple has become? Because Tim Cook made his bones as a first-class operator. And if you look at what Apple has announced, what they're doing now, they're really taking advantage of the supply chains that they have and making sure they have the right phones and the right supply chains. I don't know, maybe we shouldn't be surprised that

this is what they're doing. No, and I am actually kind of glad to see them sticking to the high-end premium price point and not necessarily participating into the race to the bottom that you're seeing in the Android world, keeping their margins lofty and making it an aspirational product and not deviating from that. I actually agree with that. But if they want to get any meaningful market share in China, they're only 5% now. I don't think this price point is going to do it. And that's what causes me to scratch my head a bit. But I think they'll make inroads to the mid-level folks in China that can afford this price point. But they're going to be struggling at the lower end.

Twitter is going public. The company filed a confidential S-1, which means that annual revenue is less than a billion dollars. Matt, are you excited? Are you buying? Are you loading up for the IPO? Well, you know, I just first have to say, Rick Munar has had a great tweet. Rick Munar is a Motley Fool analyst. I work with him on Rule Breakers and Supernova.

He says, here's the Twitter IPO. Everyone's going to get 140 shares. Boom. Ba-dum-bum. Very funny. It's a confidential S-1. There's not a lot we know about Twitter's financials. We do know, based on estimates, that the valuation for Twitter is going to be somewhere in the $10 billion to $20 billion range. I've seen some analysts who've come out and said that Twitter will likely hit $1 billion in revenue next year.

So, we're talking about a company that's probably going to trade for 10 times or 20 times sales. sales, you know, win at IPOs, that's a heck of a price, and it kind of makes sense for them to IPO when they can get that kind of valuation. I'll just have to say, you know, if you're interested in Twitter, and I'm not terribly interested, but if you're interested in a Twitter-like company, maybe give Sina a look. Sina, which is the largest, ticker is S-I-N-A, it's the largest online portal in China. They also have Weibo, which is a Twitter-like service in China, has 500 million users, comparable to Twitter, and very profitable. One thing, when Facebook went public, they had no revenue when it came to mobile.

We know that is not going to be the case. Whatever other challenges Twitter faces, mobile revenue is not a problem. I think the estimates are somewhere in the neighborhood of 50% of their revenue comes from mobile. So, at least they have that nut cracked. Yes, exactly. So, that is the future of advertising. And if Twitter can crack that nut, and they seem like they are, that's huge. Shares of McDonald's up this week after same-store sales in August rose nearly 2%.

And, Charlie, the surprise here is the results out of Europe much better than people were expecting. Well, when you've been falling, falling, falling, at some point it's got to turn up. Your comps just get easier and easier when that happens. And Europe was actually the strongest region compared to the Americas and Asia Pacific. And it was actually a little bit surprising to me that Europe is actually McDonald's largest source of revenue, Even compared to North America, I think we view this as one of our iconic brands, but actually Europe is more important. So to see them do 3% comp store sales in Europe in markets that have been struggling, UK was strong for them and so was Russia.

Germany was a little weak. But I think this is a good sign for McDonald's because the U.S. has been really weak for them. I think they've only had one or two good months so far this year. Is this a situation where there could be a ripple effect for other companies? I saw some analysts this week saying, hey, if this is what McDonald's is doing in Europe, that bodes well for Starbucks and others. Do you think that's a reasonable extrapolation to make, or is that reaching? No, I don't think it's reaching at all. Europe's been a tough place for the last three years, but there are some signs of life there, particularly in the U.K.

For the first time since 2004, the Dow Jones Index is switching 10% of the stocks that make up the Dow 30. Ron, out are Bank of America, Hewlett-Packard, and Alcoa, joining the Dow index, Goldman Sachs, Nike, and Visa. Any surprises there? A little bit. You know, the Dow is the Main Street's index of choice. Professional investors focus much more on the S&P 500. The Dow has problems just because it's price-weighted, not market-valuated. And the reason these three companies came off, one of the reasons,

is because their stock prices are relatively low. We're not talking penny stocks or $1 or $2, but relatively low. And the reason you'll never see like an Apple or a Google in the Dow is because those stock prices are too high. So in the first place, it's not a great index. So when you see these stocks moving around, it's hard to know what to make of it. I will say Dow said that they did want a better diversification across industries,

across sectors, makes a little bit of sense to me. I feel, I just can't help but feel bad for Alcoa. Because I feel like Alcoa, you know, the Dow Jones, it seems like, if nothing else, it's sort of a feather in your cap. It's a badge of honor. And now, really, all Alcoa has going for it is they get to go first at earnings season. Right. And it's not going to get near the same focus, because it's no longer that first Dow component,

you know, going first at earnings season. And I'll argue with Ron a little bit. Alcoa is kind of a penny stock. I mean, it's traded below $10 for I don't know how many years. But, yeah, I feel bad for all of them. Also, the whole notion of the Dow Jones industrial average. Goldman Sachs, not really industrial. More vampire squid-ish.

I was going to say, more of moving paper around, but not so much with the industrial. Speaking of the Dow, we have got a special free research report. The three Dow stocks dividend investors need. You can get it for free simply by sending an email to dowstocks at fool.com. That's Dow Stocks, all one word, DowStocksAtFool.com. Coming up, 2013 is not over, but I think we've got our winner for CEO excuse of the year. Stay right here. You're listening to Motley Fool Money.

If you've got the money, honey, I've got the time. Welcome back to Motley Fool Money. Chris Hill here in studio with Matt Argesinger, Charlie Travers, and Ron Gross. Pandora announced that Brian McAndrews will take over as CEO, president, and chairman of the board of directors effective immediately, and Matt, shares of Pandora up about 20% this week, and the bulk of that gain is due to this news. Why all the optimism about this guy? Well, it's interesting. I mean, it makes sense. McAndrews has experience in web and mobile advertising, coming from Microsoft. 95% of Pandora's business, for sure, going forward,

is web and mobile advertising. So, he's a guy with experience, pedigree. I can see why the stocks higher. They've been looking for a CEO for a while. But I'll say this. He was the CEO of a company called AQuantive, which Microsoft bought for about $6.3 billion in 2007. That's what they do. That's what they do. And in 2012, last year, they had a bit of a write-down, Ron. You might remember this. That's what they do, too.

About $6.2 billion. And that was mostly related to the AQuantive acquisition. So, here's a guy that Microsoft brought in for his web advertising expertise. Obviously, that doesn't seem like it really worked out for Microsoft, and now Pandora's making a big bet on him. Makes me feel cautious about Pandora's 20% gain over the last week. Well, maybe the plan is to sell to Microsoft. Hey, if they're looking for a future write-down, why not? But, Ron, we also saw a rise in Pandora shares earlier in the week before this news broke. I thought that was curious just because one of the other things Apple announced at their

event was the rollout, which is coming next week, of the new iOS, which includes iTunes radio, which many are looking at as the, quote-unquote, Pandora killer. But investors, I think, were sort of shrugging that off. I officially became a Pandora user this week. There it is. There it is. It's a top. I'm actually really, really enjoying it, but I will say in the next breath that I'm not paying them a dime, and I'm not listening to any advertising that comes over. So, I think the business model doesn't make sense to me.

Well, I think what Apple's iTunes radio does, it legitimizes the whole idea of internet radio. The idea that if Apple starts doing this, then more and more people are going to leave terrestrial radio and try internet radio. And Pandora's got a huge lead with 75 million listeners, so it's good news for Pandora. Walt Disney Company announced plans to buy back $8 billion worth of stock in 2014. And Charlie, that is about twice the pace of the last couple of years, and they are probably going to have to borrow some money to do it. which leads this Disney shareholder to ask, is this a good idea? Yes and no. Yes-ish.

Yes-ish. That was so definitive. I'm not crazy about borrowing money to buy back stock in general. I do think it does make sense for Disney. They've been spending a ton of money on their theme parks, not just here, but abroad and on their cruise ships. They're scaling back that spending. So returning some cash to shareholders is the right thing to do. I would prefer them to pay a bigger dividend.

They have doubled the dividend over the last three years, but the yield here is still only 1%. They have the second lowest yield of any stock on the Dow. And so they do pay their dividend once a year, which is a bit unusual for an American company. The next dividend will be this December. I'd like to see a pretty big hike there, and I'd prefer that over a large stock buyback. Shares of Disney up about 25% year to date. Where is the stock from a valuation standpoint right now? Is it fairly valued? Is it a little pricey?

I wouldn't call it pricey. I wouldn't say it's dirt cheap either. I think it's a reasonable buy for one of the best companies in the world. They just have so many great brands. The best performing stock of the 1990s was Dell Computer, which increased in value more than 89,000% during that time. Let me say that again. A rise of 89,000% during that time. This week, Dell shareholders approved a bid by founder Michael Dell and Silverlake Management to take the company private. Ron Gross, our resident Dell shareholder, first and foremost. Not for long. Are you happy it's over? I'm happy we can stop talking about it. As I've said many times, I own this stock at $36 a share, so I'm a big loser here.

I obviously bought it at the wrong time. I think this is a smart move for the company in the sense that they need to get out of the limelight. They need to really, really make some big changes. They've got a plan. Whether they can execute on it and make it happen remains to be seen. It will not be easy. There's a lot of competition out there, whether it's IBM or Cisco or HP or even Amazon. And to turn themselves into a solutions provider or software company isn't going to be easy.

But get out of the spotlight to do it. Stepping back from Dell, where do you think we are with hardware companies in general? When I look at this, and I'll be honest, I've never been a Dell shareholder, but part of me feels just a tiny bit melancholy about this. And I think, among other things, it's a great lesson for investors. Hey, you can have the best-performing stock of the decade, and that's no guarantee that it's going to last forever. But I am curious, Charlie, as someone who looks at technology companies, are we likely to see more of this in the hardware space, where companies that maybe aren't sitting on pounds and pounds of cash are going to decide we're going to be better off if we're private? Well, the advantage of being public is you have

better access to capital when you need it. The advantage of being private is nobody really knows what you're doing. I think the hardware space is just going to be increasingly brutally competitive. You've got companies like Samsung and Lenovo that are just phenomenal operators. I think that's very tough to compete with. This is really a heck of an ending to a company that was at one time like in case studies at MBA schools around the world is one of the best companies out there. You know, just a business model that was very tough to compete with. I think that's proven to be, you know, not the case. Ron, when you look back at Dell's history, is there something that stands out as a particular

misstep? Because that, again, to Charlie's point, that's one of my memories of Dell from the 90s, that they were such a phenomenal operator. The whole notion of you can design your own computer, they made it easy. They were, to my mind, one of the first to really touch the consumer at the consumer level. Right. Well, let's remember, the PC isn't going away. I mean, the last computer I bought was a Dell, and I hopped on the Internet and I bought it, and it was in my house in two, three days. However, it's very hard to see how technology changes over time,

and that's why someone like Warren Buffett will say he's not even going to attempt it Because something is so pervasive as a PC or a desktop computer, unless you're really, really smart and you envision tablets or laptops or the internet or whatever is next, it's very difficult to say where technology is going to go. Plastics. One word, plastics. Finally, guys, it was yet another bad week for apparel retail. Lululemon was down on disappointing second quarter results. And for the second straight quarter, Lululemon lowered guidance. And maybe we'd be focusing more on Lululemon if it weren't for Men's Warehouse. Second quarter profits for Men's Warehouse fell 28 percent. And on the conference call with analyst CEO Doug Ewert, I'm probably not pronouncing that correctly, so my apologies to the CEO, had this to say regarding Men's Warehouse's results.

He said, and I quote, we believe the number 13 in 2013 is causing a small but meaningful number of brides to avoid getting married this year. It's reassuring to see a significant increase in advanced reservation for 2014 weddings, though. Really? We're blaming brides who have Triskaidekaphobia? Oh, is that? Wow. Yeah. Every once in a while, I like to break out the 50-cent word. I'm stunned. I mean, even if he really thinks that, don't say it on a conference call. And if you're the board, I mean, you call him in and you say, really?

Bad weather used to be the excuse that people would snicker about when a company's used it. And that's legitimate in some cases. In some cases, but it's overused. This now makes weather look like nothing. I mean, I just want to know what George Zimmer's thinking. Is he, ooh, they're running my company in the ground, I'm going to be back in no time? Or is he just, you know, he's beside himself. He just doesn't know what to say.

I mean, it's just... Charlie, as I said before the break, we still have some time before the year ends, but this kind of does seem like the runaway winner right now. This is like the Usain Bolt frontrunner here. Good luck catching him. Let's bring in our man Steve Broido from the other side of the glass here. Steve, first of all, again, we've got a couple months before the end of the year. Seems like we have a winner for worst CEO excuse of the year.

Yeah, that's a terrible... That may be one of the worst things I've ever heard, I agree. And to strike out at Brides, I mean, that's just... Has he no shame? Well, you know, my wife was born on August 13th, and I've been trying to tell her to change her birthday. It's not a good day to be born. People don't like that day. Change your birthday.

I can't recall if we talked about this, because I know we talked about Men's Warehouse earlier in the year when they booted George Zimmer. But have you—that was the first suit I bought on my own was at Men's Warehouse. Did you ever shop there when you were younger? No, not—I did rent—we did rent some tuxedos for our wedding there. So they do offer a very nice rental program for tuxedos. Let's check it out, Men's Warehouse. Well, there you go. There's another reason why, you know, things are bad at Men's Warehouse.

They can't rent tuxedos either. 2013. Ron, I'm guessing you own a tuxedo. I own several, yes. You own several? As I go up and wait, I purchase additional tuxedos. You own several? How many do you own?

Three or four. I can't remember. You own three or four tuxedos? I do. Well, he also uses one blade every time he shakes. I mean, he replaces it every time. I'm just saying. It's not because they are all different styles, though.

They're all different sizes. Radio at Fool.com is our email address. You can also hit us up on Twitter at Motley Fool Money. Please, by all means, let us know how many tuxedos you own. And you know what? If someone emails us or tweets at us that they own more than that, if you own five or more tuxedos, we will absolutely send you some sort of prize. Ron Gross, Matt Argesinger, Charlie Travers. Guys, thanks for being here.

Coming up, a look at the latest high-tech gadgets with technology writer Rob Pegoraro. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Smartwatches, 4K TV, new iPhones, so much going on in the tech world. We figured it was a good time to check in with technology writer Rob Pegoraro. Rob, welcome back to the show. Thanks for being here.

You're welcome. It's good to be back. Let's start with the iPhones. Apple unveiled a couple new models this week. And I think it is fair to say that, at least on Wall Street, people were not impressed. You had the stock being downgraded, critics saying that the lower-priced phones are still too pricey for emerging markets like China. As a technology person, what did you think of the new phones? Well, I think that's a totally right critique of the iPhone 5C because, yeah, there was all the speculation about the cheap iPhone.

And what I was saying at the time, this is going back two or three months, Apple already has a cheap iPhone. It's last year's model that they sell for a little bit less, $100 off. And that is pretty much what the 5C is. It's an iPhone 5 with a plastic back, which is probably cheaper to manufacture. Better front camera. I guess the battery is slightly larger, but not by a significant amount. The crazy thing is in that a sort of PR media hacking sense, it is working because people have been covering it a lot. And so many headlines have talked about the cheaper iPhone.

You have to look at the full no-contract price. And there, this cheaper iPhone is $549, only $100 less than the iPhone 5S. Do you think that this is a road that ultimately Apple won't go down as far as some people want them to? This whole notion that a cheaper iPhone, a truly cheap iPhone, a low-cost phone without the contract, a low-cost phone, ultimately does more damage to the Apple brand? Because let's face it, Apple has never really been a company that competed on price. Right. Historically, they're going after not market share, but profit share. And, you know, it's done pretty well.

If only I had thought to tell my mom 10 years ago to buy a lot of Apple stock. You and me both. Yeah. So, you know, in that sense, you really can't critique Apple's strategy too much because they're making most of the profit in the smartphone business. On the other hand, I read a great piece the other day by Troy Wolverton, and he was pointing out that, look, Apple has been able to segment its products with the iPod. There's a lot of different models that do different things, and the existence of the iPod Shuffle did not damage the aura or whatever of the iPod Nano

and then the iPod Classic, the full-size one. So when you look at Apple's consumer technology, what are you expecting the next big thing to be from them? Is it a significant... I'm sorry? Not a TV. Not a TV. Well, for Apple to do a TV, you know, the one thing we know Apple doesn't like is other people screwing up their brand, their user experience. And so with the iPhone, it was only able to do this because they got AT&T to give them a blank check, said,

okay, we'll sell your phone as you want it. We're not going to put our apps on it. We're not even going to put an AT&T logo on the back of it. And you know some part of AT&T wireless died when they accepted those terms. For Apple to do a TV, it's going to have to be in the same terms. They're not going to let Comcast or DirecTV or anybody put their own user interface on that thing. They're not going to accept having certain features stripped out because of that. Well, they might, I guess.

since Apple lived with AT&T not supporting things like tethering and even multimedia messaging for a while after they were released. And I just don't see the cable companies as willing to give up that kind of control. I mean, look at how hard it's been for TiVo. You know, any kind of, you know, there's no real functioning market for third-party cable TV hardware in the United States, except for, you know, there's one exception, TiVo, which accepts cable cards, And even then, you don't get the full spectrum of the cable company services in most cases.

So, yeah, maybe Apple could get one cable company to do that. But then you have the problem of what about the rest of the country? I don't think they want to make a product that, oh, great, we can sell this in the Northeast and a couple of cities in the Southwest and the rest of America, forget it. Just don't see it happening until we have a functioning market for third-party KTV-compatible hardware. You're listening to Motley Fool Money, talking with technology Rob Pegoraro. Microsoft, sticking with smartphones, Microsoft recently acquired Nokia's handset and services businesses for the sum of $7.2 billion. When you look at smartphones, do you think this new Microsoft-Nokia team can make a race of it,

or do Samsung, Apple, and Google just have too many advantages built into the marketplace right now? I think there is room for a third player here. And I don't think it's going to be BlackBerry. I think it could be Windows Phone because Nokia has been able to make some really affordable ones. They introduced a model for Nokia 521 at Mobile World Congress in February, which the list price, the unsubsidized price, was $150. And it's not the greatest phone ever, but that's way cheaper than any iOS phone you've seen and way cheaper than any acceptable, good, new Android phone except for the Nexus 4. you are fresh off a trip from berlin at the uh ifa electronic show and one of the

technologies you tried out was the samsung smartwatch what did you think because i i'll be honest i'm it's been well over a decade since i wore any kind of watch so there's nothing on my wrist as i speak uh yeah i'm i'm one of those people who's pretty skeptical skeptical about the idea of a smartwatch, but you tested one out. What did you think of it? Yeah, it's a huge chunk of electronics to strap on your wrist. It is close to, like, almost half an inch thick. And, you know, when I did wear a watch, I took pride in it being this very thin, nicely sculpted citizen thing. And this is huge. And you have to recharge it, which basically is often as you charge your phone. So out of the box, the concept

doesn't have a whole lot of appeal to me. You know, I'm going to have to try one out and see what it's like to have this thing on. You know, on the one hand, it gives you access to some of the stuff on your phone. Sort of think of it in the same way that Google Glass is supposed to provide the sort of heads-up display, really quick, simple access to your phone's resources. So it will show you what's coming up, what you do in a quick web search, take a picture, and not much else. The Galaxy Gear seems to be trying to do the same basic job.

It can also run apps of its own. So I noticed the Glimpse app, G-L-Y-M-P-S-E, which lets you send a text message to a friend saying, hey, I'm running late, and they can click on a link and see exactly where you are on the map. Well, that's not creepy at all. Right. Well, the nice thing is Glimpse links expire, and I've used it a couple of times. Usually I forget to do it because I'm, in fact, running late and distracted.

You mentioned Google Glass. in terms of adoption by consumers what do you think has greater potential google glass or smart watches probably smart watches because they're going to cost a lot less unless google has some big secret for the the real production version of google glass not the explorer edition that costs like 1500 dollars um you know at least there's a little bit less of uh you know this may be a huge bulky heavy electronic you know cybernetic wristwatch but it is a watch we know what it's like. Most people are not used to having electronics strapped to their head and in front of their eyes.

Do you think, sticking with the smartwatches, we've seen them from Qualcomm and Sony in addition to Samsung, do you think Apple is working on one? And if so, when do you expect it? Now, that's an area I'd like to think that if, here Apple could get into that market because they don't need anyone else's permission. You know, and there is a real use case. And And I would like to think that Apple, which is so obsessed with thinness, they made up their own SIM card standard to shave off some tiny fraction of an inch, fraction of a millimeter even, that they could make a smartwatch that would be thin, graceful, stylish,

not look like the output of some crazy research lab at Google, and hopefully would have good battery life too. I could see them doing that. I could see them doing a good job. I don't know if they think that's an interesting problem to try to solve. But as we discussed earlier, do you think that they view it as a profitable problem to solve? Right, exactly. Yeah, I don't know. And that's the thing.

It can't just be profitable or really profitable. Apple seems to like profit margins north of 30%, 40%, which I guess if they wanted to, to return to a cheap iPhone conversation, they could make the iPhone 5C cheaper. They just have to accept only 10% returns on it. That doesn't seem to be in their playbook. What technology in Berlin at this electronic show impressed you the most? Let's see. I can think of more of ones that did not impress me a whole lot. I'd say what impressed me the most probably is all the stuff being done on getting appliances that talk to each other,

which sounds really silly. Like, I don't need to have my washing machine texting me to say that, you know, clothes are done. But if you can use this kind of connection to surface useful info like, hey this part needs replacement or i'm using a little more electricity i'm due for service you know right now with the dishwasher downstairs it seems to be taking longer than usual i don't know why i don't know if it's using more electricity than usual because there's no way to meter for that um it'd be nice to know what's up with that the fridge is now 12 years old to replace it is that getting less efficient i have no idea so there's some potential there

i was sort of joking that of all the connected fridges i've seen what you really need is a webcam on the inside so you can bring up the image of that cam while you're in the store and see what exactly do i have but then you'd have to solve the problem that when the fridge door is closed obviously would need lights and probably like tank treads so you can inspect one shelf at a time you're listening to motley fool money talking with technology writer rob pegararo you mentioned that there were gadgets at the electronic show in berlin that didn't impress year. Here's something you wrote about your experience there. And I'm quoting, nobody goes to gadget shows to see how practical the electronics industry can be.

You expect to see products with features that nobody necessarily needs or may even be able to understand. I read that quote as preface to a gadget that Phillips showed off, and that is a laser-guided beard trimmer. Rob, I should mention that for the first time in over a decade, I'm actually sporting a goatee right now. I'm taking part in the whole... You might be the target market there. I might be. I'm part of the whole September movement to raise money for prostate cancer research.

But this sounds like a horror show waiting to happen. A laser-guided beard trimmer? So the idea is that the laser illuminates exactly where it's going to trim things. And so you just need to follow that line. And it only hit me a day after looking at this thing and having a journalist friend of mine try it out on his beard. The parallel, actually, this will sound scary. I have a circular saw in the basement where you flip a little switch and a laser shines ahead, and that shows you where the blade is going to go.

And I found that actually is handy when you're trying to cut a piece of wood somewhat straight. Do you think Philips is using that in marketing, comparing their beard trimmer to a circular saw? Because that's not selling me either. I wouldn't recommend it, no. It's going to be a tough sell. It might be working some really edgy publications. You know, some of the lads' magazines in the U.K., they might go for that sort of thing. Again, as skeptical as I am of the whole smartwatch thing, I am far more likely to strap one of those on my wrist than I am to put a laser-guided beard trimmer to my face.

Before I let you go, you worked at The Washington Post for nearly 20 years. Jeff Bezos from Amazon.com recently bought The Washington Post. And I'm curious, what was your reaction when you first heard the news, and what do you think he's going to do with the post? My first two words of reaction were, holy bleep. And then I thought a couple of thoughts. One of them is, you know, the fact that Bezos is making this purchase on his own, not Amazon. To me, I'm hoping this is the same guy who decided to bankroll a company, Blue Origin, that wants to make it easier and cheaper to send people into Earth orbit. That he sees journalism as an interesting problem to solve, not necessarily quickly.

And the advantage he has is that he has money, a lot of it. And so he can take the company completely private. It was already half private with the two-tier stock ownership structure, but the Graham family had said more than once, yes, we have voting control, but we can't completely shaft our stockholders who bought the stock expecting to make money on it. And the other thing is, if Don Graham thinks this is a good idea, I have to trust him. He was a great CEO to work for. They don't make a whole lot of people like him anymore. Rob Pecoraro is a technology writer.

You can read his stuff at USA Today, at Discovery News, as well as online at robpeguraro.com. As always, my friend, thanks for being here. You're welcome. Coming up, we'll give you an inside look at the stocks on our radar. You're listening to Motley Fool Money. Yes, money in my pockets and memories on my mind. Memories of an old love, the one I left behind. 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, Charlie Travers, Ron Gross, and Matt Argesinger. Guys, before we get to the stocks on our radar this week, one other story that caught my eye, I wanted to get your thoughts on it, was a story out of Ad Age magazine, which reported that Kmart, which is part of the Sears Corporation, has set the record for running the earliest holiday television commercial ever,

105 days before Christmas. Kmart is already touting its holiday layaway plan. But this is not really anything new in the whole notion of holiday creep. We got emails from listeners saying that Costco has had holiday decorations on the shelves for a while now. Starbucks is rolling out the pumpkin spice latte even earlier. Does this bother you at all, or do you just sort of shake your head at it, Ron? First mover advantage is an incredibly powerful thing, but not in this case.

There's already Halloween candy out. Just for wanting to do right by the kids in my neighborhood, I'm not buying their candy seven weeks before Halloween. Here's a stale Snickers, Jimmy. Yeah, I was going to say, who is that helping? And people still shop at Kmart? Just saying. Well, that was the comment from our colleague Jason Moser. First, he was stunned that they were doing it, but then after that, his second reaction

was, wow, Kmart's still alive and kicking. Let's get to 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. But Ron Gross, you're up first. What's your stock this week? Steve, I've got LeapFrog, ticker symbol LF, manufacturer of technology-based educational toys. We increased our allocation at Million Dollar Portfolio this week in that stock after it

had sold off because of some glitches in their new tablet. There's certainly a lot of competition out there as other tablets and Amazon creates products that are competitors, but we think it's very inexpensive both on a standalone basis and as a potential acquisition. Steve, question about LeapFrog? My question is having a small child now. Everything we own in our house has batteries and is electronic and makes all kinds of noise, especially in the middle of the night. Is it possible that parents will just revolt against electronics for their children

and start giving them wood blocks and just say enough? Well, if you want to spend extra time with your child, feel free. But the TV, the technology-based platforms are a godsend. A little Parenting 101 from Ron Gross. Keep those emails coming, radioatfool.com. Matt Argesinger, what do you got on your radar this week? My stock is Alexandria Real Estate Equities. It's ticker ARE.

It's a real estate investment trust, just in case you didn't get that. Interesting company. they're a real estate company that focuses only on life sciences properties. So, biotechs, pharmaceuticals, they have properties in New York, San Diego, Boston, the Research Triangle Park in North Carolina, some of the big hotspots. My investment case here, though, is based more on what's coming this week, which is the Fed's meeting to decide, ultimately, if we're going to have any tapering. And that's, over the past few months, REITs in particular have been hit really hard. In this case, I like Alexandria. It's growing. It just raised

its dividend. It pays over 4%. I think it's cheap and also an interesting space. Steve, question for Matt? First, a brief comment. That is a very, very confusing name for a company. Secondly, how would I know if the life sciences space were growing largely? Is it research facilities if there's more biotech or more big pharma stuff going on? Great question. I would say you can just essentially track some of the biotech indices out there. If those are growing and beating the market, then I guarantee you, I guarantee it, Alexandria Real Estate is going to do pretty well.

Steve, do you think that part of the thesis for a stock like this, so dependent on life sciences, on some level, if you're a shareholder, aren't you rooting for more evil scientists in the world? You must be, because they occupy usually very large amounts of space and big domes and covered lasers and such. If movies have taught us anything, I think you're spot on there. Meth labs. Charlie Travers, what do you got?

I have to go with AMC Networks, tickers AMCX. Speaking of meth. Yeah, speaking of meth and crazy scientists. Huge Breaking Bad fan. There's only three episodes left. They've got The Walking Dead kicking in in October. I think they've just proven year in and year out that they have some of the best shows on TV, and I expect that to continue.

And since I like the show so much, I think this is a company to watch as well. Steve, question about AMCX? What ensures that AMC moves in the direction that they've been moving and along the lines of HBO and not Showtime, which has seen, I think, a big drop in their network programming? That's a great question. With a lot of these shows coming up at the end of their life, Mad Men can't really run that much longer, and Breaking Bad's coming to an end, and the spinoff, What About Saul? There it is. Maybe it'll be a hit, maybe not. I love Bob Odenkirk.

But the real trick here is, you know, proving that they can keep doing it and become more like an HBO. They do have 90 million subscribers, so they do have an audience that makes them attractive to some of the show developers like Lionsgate and Sony Pictures. So I think, you know, I feel good about where they're at and where they're going. I was going to say, if you're a Breaking Bad fan, you have to be thrilled about the spinoff around Saul Goodman, the criminal lawyer character on Breaking Bad, Better Call Saul. All right. Charlie Travers, Matt Argesinger, Ron Gross. Guys, thanks for being here. Thanks, Chris.

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