Motley Fool Hidden Gems Investing - Motley Fool Money: 09.09.2011

Episode Date: September 9, 2011

President Obama unveils his jobs plan.  Bank of America cuts more jobs.  Yahoo's CEO loses her job.  Hulu considers its suitors. And Groupon calls off its IPO.   Our analysts discuss those stories and share some stocks on their radar.  Plus, Motley Fool retirement expert Robert Brokamp talks about the future of Social Security. Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. Welcome to Motley Fool Money. Thanks for being here. I'm your host, Chris Hill. And joining me in studio this week from Motley Fool hidden gem, Seth Jason. From Motley Fool income investor, James Early, and for Million Dollar Portfolio, Ron Gross. Guys, good to see you. Great to see you, Chris. Last week, we had personal finance expert Clark Howard. This week, we've got our own retirement expert, Robert Brokamp, with some tips on how to make your money go farther.

We've also got the latest on Bank of America, Yahoo, Google, and more. But we will begin with the big macro. President Obama went before Congress this week to unveil his $447 billion jobs plan to stimulate the economy. Ron, a lot of proposals. The president is proposing an extension of the payroll tax cut and $140 billion for modernizing schools and improving infrastructure. What do you think of the plan overall? I thought the plan looked good. Obviously, there's some politics here. Yes. But I think from an economic perspective-

No way. I doubt that. Guys, come on. Everyone's going to get behind this. Everyone agrees on what's right for America. Yeah, if this gets passed, I think from an economic perspective, it looks good. He's trying to keep us out of recession and keep growth moving along. James? Well, the best thing from Obama's standpoint is in typical political fashion. I actually like the plan, too.

I'm just going to make fun of it a little bit. But he is shoving all his money now, deficit spending, but he's going to pay for it over the next 10 years or so with cuts once he's gone, basically. And that's kind of how politicians work. I do love the benefits while working things. So you can keep your unemployment benefits while you're volunteering or trying out test driving a new job, if you will. That makes it a lot easier for employers to hire somebody they don't have to pay unless they really like them and want to hire them. Seth? I thought it was too small.

Well, let me take that back. $447 billion, too small? Well, a lot of that is tax cuts, and tax cuts I don't think are really all that effective at increasing employment right now because the presumption you have there is that there are all these employers going, And, oh, if only I could pay a little bit less in taxes, I would just hire one more person. That's not really the case. They hire more people when they need people, and they need people when demand for products and services goes up. So that part of it, I think, is the sop being thrown to the Republicans to dare them to oppose this.

The infrastructure bit the $147 billion or $150 billion or whatever it is. I think that could actually be bigger, and that's a lot of money, and we do need to pay for it someday. But it is one of the quicker and more direct ways to actually get some construction and other employment going out there. And yes, stuff is by nature somewhat temporary. It's going to end at some point in the future. But the whole purpose of a bill like this is to have enough shorter-term stimulus to kind of kickstart the economy. And then once people start spending, you hopefully get that virtuous cycle of growth again. September is off to a rough start for Bank of America.

The company was included in a lawsuit charging Bank of America, among other big banks, sold nearly $200 billion in fraudulent mortgage investments to Fannie Mae and Freddie Mac. And on Friday, the Wall Street Journal reported that Bank of America is considering cutting as many as 40,000 jobs. James Early, not a good week for Bank of America. It's been a rough week, Chris. A week? It's been a rough past four years. I'm searching for a better analogy, but it's coming up blank. I'm going to have to use this one. The bank is essentially regurgitating the overconsumption of Ken Lewis. Ken Lewis was the former CEO who just went on this huge acquisition spree, bought up all of these companies, and now they have these 288,000 employees. And frankly, they apparently don't need them all, so they're going to cut out 40,000, 45,000 of them. I think the bank needs to be broken up. I think that's a lot cleaner.

I think it's ironic that Brian Moynihan, CEO, is sort of firing everyone but himself. And I see him now as part of the problem. Yeah, they're getting sued now by the conservator for Fannie Mae and Freddie Mac, a state attorney general, I believe, and AIG also is suing Bank of America. So they're in a lot of hot water. Seth? Let's not forget that possibly the thing that they choked on that caused the regurge now, it would be Countrywide, that horrible, horrible lending operation

run by that former Orange CEO, Angelo Mozilla, which had all those terrible mortgages. No, I think he's still Orange. He's still Orange, formerly CEO, possibly still Orange. I'm a little envious of his tan, though. No, that's not a tan. It's a tan. I don't know if it's a spray-on product or it's a salon-based tan. Either way, I kind of like it. Either way, that's the nicest joke you can make about the guy

because he really had a horrible impact on this country and its economy, sold tons of stock in his company at the height of the real estate bubble, And Bank of America is still dealing with the junk that this guy created and then, of course, eventually was sold on to Fannie and Freddie and many others. I mean, this is a horrible company and it was a horrible human being, I think, and we're still paying for it. Is the lesson not to trust people that tan? The lesson is not to let these companies get too big to fail. And what they did, that was completely obvious, but they just let them get even bigger. Well, we've talked in this room before about bank stocks. I think you guys are pretty much

unanimous that you largely stay away from them. But outside this room, on the other side of the glass, is our man Steve Broido. Thank you. Steve, as we've talked about recently on our daily podcast, MarketFoolery, you're a Bank of America shareholder. Yeah, I owned some shares before, and I added to my position when it was at, I think, a new 52-week low around about that. My whole motto is, buy low, sell high. Are you low or high or lower right now?

I think my cost basis went down. I don't remember exactly. I need to take a look at exactly my purchase price. I don't think it's working out so swimmingly right now. Cost basis going down is a fancy way of saying you're losing money. Well, yeah. You can look at it that way. I'm pretty sure your cost basis is the same.

I look at it as opportunity. Yeah. They continue to fire people. Soon they should be pretty profitable. Buy low, sell high, though? Let me write that down. You're listening to Motley Fool Money. We're here every week.

But for daily analysis on the latest money news, you can check out our daily podcast, MarketFoolery on iTunes and at MarketFoolery.com. Yahoo's board of directors has fired CEO Carol Bartz. She'd been CEO for two and a half years. Chief Financial Officer Tim Morse is now the interim CEO. As the board says, it plans to hire an executive search firm to find a permanent CEO to replace Bartz. Seth, shares of Yahoo were up immediately after this news broke, and they're up for the week. What do you make of all this? We thought Carol was a lot of fun around here.

We liked her because she was always dropping F-bombs. I mean, if you think that I let the occasional bad word slip, you should have listened to her. She was in many ways inherited an impossible situation. What the board presumably wants from a CEO at Yahoo is for an executive to come up with an entire new vision for this company and remake it. And that's not really possible.

What the Yahoo board needs to realize is it's this over-the-hill portal, and nothing's going to change that. And what Bartz did, she did the deal with Microsoft on search, cut a lot of costs, and those were good things. But there's no miracle here. So I actually feel a little bit bad for her, except for the fact that she, I think, took home tens of millions of dollars. Yeah, I think her severance package was about $10 million. And she did, within 24 hours of being fired, over the phone, she did give an interview to Fortune magazine where she called the board a bunch of doofuses. Doofuses? That is rated G for Carol. She did also say, they effed me over.

And you still find her sassy manner attractive, Chris? Absolutely. My love for Carol Bartz has not changed one iota. She might write me back now. Building on her opinion of the board, Dan Loeb of Third Point Partners has recently announced that he owns more than 5% of the stock, and he's agitating for change as well. We own Yahoo! and Million Dollar Portfolio, not necessarily because we think it's a well-run company, but it is a collection of assets that we think are worth more than the current market cap of the company. And if Dan Loeb or anyone is successful in perhaps breaking

the company up into its pieces, we think we'll make money. Yeah, becoming the CEO of Yahoo is a bit like being placed on a speeding bus with no brakes and no steering wheel. It's like you're stuck. In a bomb? I saw that movie. I mean, Yahoo pretty much defined the Internet 10 years ago, and that's the problem. It still pretty much defines the Internet of 10 years ago today. It just hasn't changed.

Things have evolved. Yahoo has not. So I agree with Ron that it should be broken up, and there's more value there. Its Chinese assets are pretty strong. 40% of the value. Right. Right, and it has Alibaba.com, Alipay, Taibao, and that's not pronounced right. Taibao?

Yeah, Taibao. Taibao is a punching bag. These are number one sites in China from an e-commerce perspective, and there's a lot of value there. Coming up, if you were eagerly anticipating Groupon's IPO by the end of the month, we've got some bad news. Details in a moment. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in the studio with Seth Jason, James Early, and Ron Gross.

The Financial Times has reported that DirecTV is no longer in the bidding for Hulu, so just four bidders remain, Amazon, Yahoo, Dish Network, and Google. Seth Jason, the bidding is reportedly in the range of $1.5 to $2 billion. What are you betting on? Is that all? $1.5 to $2 billion? It's a drop in the bucket for Google. Well, some people would say the smart money is on Dish. They can couple it up with that whole Blockbuster arrangement, right, and offer a nice suite of e-services.

I think that thesis makes sense. I think Amazon would be wise to pay up because it could be a pretty valuable piece of a bigger ecosystem for them. I'm really surprised that sort of Microsoft and Apple have left it alone, but they must have good reasons. But this would be almost no money for either of them to secure some pretty good content agreements and actually a really good service. I'm a subscriber to Hulu, and although the movies are generally terrible, they've got a much better selection of up-to-date TV. Did I read this as it gets you five years' worth of rights, or is it an outright purchase? I thought I saw a couple of years.

And then there's this Google thing that nobody seems to know what it is. It's this nebulous, oh, we want a much larger picture idea where we'll give you a lot more money, but we want something that nobody quite knows what it is. Well, including, to Ron's point, contracts that extend longer for how long they have the content. I really wonder if that would happen. Depends on, I guess, what Google would be willing to pay out. But remember that Hulu evolved as a way to kind of head off Google at what they were trying to do, which from my point of view was blackmail all of the content providers into doing deals with them

by letting everybody upload copyrighted material to YouTube and then only very late, painstakingly, take it down. I think Google prefers the word coerce to blackmail. Yeah, so that's my opinion, that they were blackmailing. I'm almost positive of that. But that looks like what they were doing to me. Walmart announced it is bringing back layaway for holiday shoppers. James, is offering pay-as-you-go plans going to help the world's biggest retailer?

It might. The terms are a little bit onerous. The basic idea of this layaway is to help people who don't have credit cards do their Christmas shopping. That's why they're introducing this now. You pay about 10% down. I think you do pay 10% down a $5 fee. And if you decide to cancel the layaway, you just want your money back.

You have to forfeit $10. So it's not that cheap. I don't know what percent of the people will opt for this. Hopefully not. Credit cards have largely done away with layaway, but it's just more of a proxy and indicator of where the economy is. Ron? And for now, it's really just about Christmas.

This is a toys and electronics-based plan. They have always kind of had jewelry layaway. So they're going to reevaluate after the Christmas season to see if it's worth making this permanent or extending it out into other things. But for now, this is a way to get Christmas better, perhaps, than it may have been. We've talked numerous times in here about Walmart's almost dual levels of success. Internationally, Walmart seems to be growing at a much faster rate and delivering in much better ways than it is here in the U.S.,

where same-store sales continue just to decline quarter over quarter. Well, it's saturated here, so there's just not a lot you can do to grow it. There's already a Walmart in pretty much any market that can support one, and in the ones that they thought couldn't, there are these other sort of dollar generals and these other smaller outfits that fill that niche. So they really have run out of room here. Now, overseas, and this doesn't work in every country, by the way.

They had a lot of trouble, I believe, in Germany, and it depends on the culture. South Korea, too. Yeah. But in places like Mexico, where the stores were pretty rudimentary and didn't have goods and the prices weren't cheap, they've done very, very well. And here in the U.S., they kind of lost their way from a merchandising perspective, moving away from what really had made them successful. And now they're getting back to it. And I think things are starting to stabilize here. We actually own the stock here at Million Dollar Portfolio as well. You guys like all these over-the-hill companies. We like it mostly for its international exposure, similar to the reason we own Yahoo.

And if the U.S. stores can just stabilize, then the stock looks good. Well, at least the kind we own. Walmart also, an income investor, I'll add. At least the... Ah, the geezers over here. The comps are less negative, which is the new positive these days. On Thursday, Google announced it has bought Zagat, the company known for its reviews... I like how you strained to pronounce that properly.

Zagat rhymes with the cat. Zagat, sorry. Can we just call it Big Z? Just for our dozens of listeners out there, there was a vigorous debate. For the three who've ever purchased this thing. Vigorous debate here in the studio before we went on the air about precisely how to pronounce Zagat, the company known for its reviews of restaurants and hotels. Ron, we don't know how much Google paid.

No. It probably doesn't even matter given how much cash they probably have. It probably does not. What is Google going to do with its new toy? It's an interesting acquisition. It's nothing earth-shattering. This is not going to change the valuation of Google. But it's going to be a nice compliment.

I think, to their local mobile offering, and they'll integrate it into their Google Places offering. And it's good. You know, it'll enhance mobile search and their maps, and it'll be a nice little offering that people have now to get these reviews. But it's not a game changer. But philosophically, if it won't change the valuation of Google, why would Google do it? It's a feather in their – Stumped you, haven't I? Yeah, you have.

If you recall, they did try to acquire Yelp a couple years ago maybe and were unsuccessful. And this is their way of at least getting something into the fold that will up their offerings a bit. Seth? And that's an interesting kind of comparison there because Yelp has come under some fire for supposedly having fake reviews or, you know, it's really easy if a business has very few reviews, it's easy for someone to go on there and trash it. Oh, I know. The income investor looks great on Yelp. Yeah. Or that, you know, supposedly you got better reviews if you were an advertiser through Yelp.

The one thing I like about this is that crowdsourced restaurant and other reviews, I think, are flawed. They're not always terrible, but sometimes they are. And Zagat is pretty reliable. So Google has a nice base of sort of higher-end reviews. But on the other hand, already on some of the, you know, like my mobile phone here, which is a Windows phone, like I look on there and it already pulls in on the mapping. It shows me a restaurant. If I click the little thing on the restaurant, it's got TripAdvisor or Yelp or any other reviews it can get its hands on.

So this isn't going to change things much. It's just more of an expert review versus a crowdsourced review. And let's not forget, Google is an advertising company at its heart, or a search company, but they make money on their advertising. So anything to draw you to doing a search, to looking at something, to get your eyeballs looking at an ad, will enhance their business, and that's the reason. According to the Wall Street Journal, I think 20% of Google searches are for local businesses. That's huge.

Yeah, very big. And finally, guys, Groupon was planning to go public by the end of the month and is now in its quiet period, mandated by the SEC to make sure companies don't hype their own stock before the IPO. Now comes the news that Groupon has canceled its investor roadshow and has postponed its IPO indefinitely. Say it ain't so, Seth. Well, I guess when you have leaked memos and it kind of upends everything, this might be good news given the market environment, right? Maybe they can come back when people are a little more happy, happy, joy, joy again. But I'm going to walk back from my idea that I've espoused on the past few shows about what an utter catastrophe this business is.

And for a couple of simple reasons, we just discussed Yelp. Yelp has kind of gotten out of its daily deal business. And this was a couple of weeks ago, about the same time Facebook said, you know what, we ran this pilot. We don't want to be in that business. That suggests one of two things to me. One is that this is a terrible business with no barrier to entry. And these two companies don't want to bother wasting capital trying to play in it. Or the other is that maybe the business is okay and Groupon and probably Living Social, the close second, I believe, have already wrapped up as much of it as you can get. And if that's the case, then actually maybe this company won't be an utter disaster, although it's still

fun to listen to the whiny CEO. Ron? Even if I buy into Seth's argument, and I think he perhaps might be sniffing glue, I still think a $20 billion valuation is still way off the mark here. Have you seen what earnings look like if you don't look at any of the costs? Yes, I have. This is a very expensive business to run. I think that might be what's scaring the competitors away is that they'll let Groupon just blow themselves out of the water with all this cash that they're burning, I mean, in a bad way. I think Groupon is crazy for post.

I would be taking the money and running as fast as I could if I were Groupon. So it amazes me that they have so much faith in their business that they think it's actually going to be worth something in another year or whenever they're planning this, you know, resurges of the IPO. I'm going to close with brief proof of my insanity. This IPO is I'd actually consider buying shares on the outside chance that it just goes on to become a success. Your insanity was proven years ago, my friend. All right. Ron Gross, James Early, Seth Jason. Guys, we'll see you later in the show.

Coming up, The Motley Fool's own retirement expert, Robert Brokamp, with some advice on Social Security and what you can do to help secure your own financial independence. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money, I'm Chris Hill A lot of topics were discussed at the most recent debate of Republican presidential candidates But the topic getting the most headlines the next day was a financial one Social Security Here to help us make sense of it all is The Motley Fool's retirement expert, Robert Brokamp

Robert, thanks for being here So good to be here So Governor Rick Perry of Texas, famously now, calls Social Security a Ponzi scheme. I mean, when you think about Social Security, what is the future of it? Well, first of all, let's remember what a Ponzi scheme is. You put your money in an investment. Instead of getting a return, what you're really getting is the money of the investors who came in behind you. And in that sense, Social Security is a Ponzi scheme.

But it's always been that way, and it was designed that way. The payments that people receive today, the retirees, is not money that came from an investment account that had their name on it. It is the taxes that you and I pay as workers. Our taxes go to pay current benefits with the idea that when we retire, the people who are working 30 years from now will be paying our benefits. It's always been that way. The question is, is it sustainable? And given the current trajectory, it isn't exactly, but it only takes a couple of tweaks to make it fine. So right now, am I correct on this, that right now Social Security is set, as it is currently set up, through 2036, sometime in the 2030s?

Right, exactly. And that factors in the so-called trust funds, which is a very complicated issue. When you and I pay our taxes, the vast majority of the money that we pay goes to current beneficiaries. A small part of that goes into the trust funds, which are invested in special treasury bonds. Now, of course, some people will say those aren't really worth that much because in the end, the government doesn't have that money if they've spent it. That's a valid point. But generally speaking, those will be exhausted sometime in the 2030s and taxes will pay about 75% to 80% of projected benefits. So if those trust funds go away and there are no changes, future retirees will still get about 75% to 80% of what they're promised.

So for someone like me, who's in his, I'm in my mid 40s, what can I count on when I retire? I think when you're running your retirement numbers and you pull up a retirement calculator and you want to say like, am I saving enough to retire? It's going to ask you, what are you going to get from social security? And I think the safe thing to assume is if you're in your late 50s and older, you're going to get what you're promised. If you're in your 40s to your 50s, I would say count on maybe getting 75% to 80%. For people who are in their early 40s or younger, play it safer. Assume you're going to only get 50%, although I'm pretty sure you're still going to get that, but you're building a margin of safety in there, and anything above that 50% will be

gravy. So you think that, that just seems like a pretty wide range for me, people in their early 40s and younger. If you're just starting out or you're just graduating from college, like you're mid-20s, something like that, you're still thinking it's like around 50%? I think so. I think what will happen is there definitely has to be changes, and there will be changes. One thing that will probably happen is you have to retire later to get your full benefits. Right now, you have to wait until you're 67. I wouldn't be surprised if they move that to 70 or later, which, in my opinion, is totally appropriate, because one of the problems with Social Security is that we're living longer. So fine, move the age up.

That's a good problem to have, isn't it? That's a bad problem. We shouldn't be living so long. And then the other thing is they might have to raise taxes on some people. So to some degree, then you have to think, well, for those younger folks, maybe they won't be able to save as much for retirement. And that's certainly still a benefit cut of sorts. But in the end, Social Security will still be there. And I think you can assume about 50%. You're listening to Motley Fool Money, talking with Robert Brokamp, the Motley Fool's retirement expert. What do you think is the biggest misconception about Social Security? Sort of what I alluded to earlier,

and that people think there's this account with their name on it and saying, this is Chris Hill's Social Security investment account, and we're just accumulating money for him so that when he retires, he can tap that. It's just not there. It's a big bunch of money that gets dispersed. There's nothing. It's not an investment account. Actually, it's really an insurance program is the way it's designed,

that taxes on your paycheck are FICA, the Federal Insurance Contributions Act. It is insurance against going into your old age with absolutely nothing. It was never meant to be an investment account or a way to pay for your complete retirement. So broadening beyond Social Security, what are two or three things that everyone should be doing to plan for their retirement? Well, the first thing is, like I said, you should run your numbers. You should pull up some sort of retirement calculator. We have one on The Motley Fool. make sure you're saving enough to retire when and how you want. You don't want to get to your 60s

and realize, oh no, I should have been saving more the last 20 years because at that point it's too late. The other thing is related to Social Security, the later you take it, the older you are when you take it, the bigger benefit you'll get. So you can take it as early as 62, but you're going to have a much smaller benefit than if you wait until 66 or even 70. Unfortunately, these days, the vast majority of people take it at 62. They're taking it too early. You should wait until you're a little older. All right, let's wrap up with a round of buy, sell, or hold. Buy, sell, or hold the likelihood that in the next five years, the retirement age will be raised to 70. I'm going to say that's a buy with the only caveat being I don't know when it's going to happen,

but I think it has to happen. The average retirement age was going down from something like 70 when Social Security was created down to about 62 in the mid 2000s. Now it's going up again because people just don't have that money. And I think there is a realization that we're living longer. So there's no reason to retire at 62 if you're going to live till 92. This is a way that retirees can supplement their income, buy, sell or hold reverse mortgages. I like to think it's, first of all, reverse mortgage is a way to tap your home equity if you're 62 or older. And that it's also something that the older you are when you do it, the bigger benefit you will get. I like to think of home equity as a really big emergency fund when you're older, if you need a little

long-term care assistance in case your portfolio is significantly reduced. So I would say don't do it unless you absolutely need to. But if you need to, especially if you're in your 70s, I think it's a good idea. It's become one of the most popular countries for U.S. retirees to move to. Buy, Buy, sell, or hold retiring in Costa Rica? I would say it's a buy. It's beautiful. The cost of living is very low. It's a great thing to do.

In general, retiring overseas can be a great way to stretch your dollar. The only drawback is a lot of benefits like Medicare and things like that may not work overseas. This is a way to save for college. Buy, sell, or hold 529 plans. Very strong buy. I have 529 plans for my own kids. It's a way to save for college on a tax-free basis. The money grows tax-free if you use it for qualified expenses.

In some states, like here in the great state of Virginia, if you make a contribution, you get a deduction on your state income tax return. So it's got a lot of tax benefits. And finally, this is the ultimate for someone who wants to truly rule their retirement. Buy, sell, or hold being cryogenically preserved. I would say that is a hold depending on what's being preserved. Because I've seen lots of body parts and things. And some of my body parts, I just don't want to live forever.

But you're not thinking like, you know, if you get close to the end, you're like, just go into a deep sleep, the whole thing. And then maybe 100 years later, you come out, you know, you're looking good. And think of the interest you will have accrued. That's true. If you just think of how much $2,000 would be worth after a century of earning 10% a year. I think it's a great idea. That's right.

So if you get to age 65 or 70 and you don't have enough money, go into preservation stage, Come out 100 years later, finally you'll have enough to retire. He runs the Motley Fool's Rule Your Retirement Service, retirement guru, Robert Brokamp. Thanks for being here. Great to be here. When I get older, losing my head, many years from now, will you still be sending me a valentine, birthday greetings, bottle of wine?

You can get a free 30-day trial to the Rule Your Retirement Service simply by going to retirement.fool.com. You get model portfolios, advice on mutual funds, as well as advice on how and when to retire. That's retirement.fool.com. Coming up, a round of which is bigger and a few 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. I'm Chris Hill, and back in the studio with me, Three of the guys who run our premium services here at the Motley Fool, Ron Gross, James Early, and Seth Jason.

Guys, we've got a little bit of time. We're going to do something we haven't done in a while, which is break out a game that we like to call Which is Bigger? Is that the right game to play with this crowd? I think we can tastefully get away with playing Which is Bigger. Stop snickering. Is this for money or for fun? This is for pride, Ron. And just to make it really interesting, we'll bring in our man Steve Roido from the other side of the glass.

Are you ready, Steve? Absolutely. All right, which is bigger, the average square footage of a Costco store or the combined square footage of the White House and Bill Gates' house? Ron, start with you. East wing and west wing? It's the White House, Ron. Yes.

The whole, it's both wings. I'm going to say Costco. Costco? I'm going to say the White House and Bill Gates' house. I'm taking B. Yep. You're taking B? Steve, what do you think?

White House and Bill Gates' house. Should have gone with Ron. The average square footage of your average Costco, around 145,000 square feet. I thought it was 155,000. That's close. Bill Gates, around 66,000 square feet. White House, 55,000. White House, not that big.

And you can't get the gross of toilet paper at the White House. Exactly. You can't get that five-gallon- Then you don't have the right connections, my friend. You can't get that five-gallon thing of olive oil. Right. Which is bigger? No, they keep that under guard.

Which is bigger? the percentage increase in shares of Crocs over the last two years or the percentage increase in shares of Chipotle over the last two years? Increase in the number of shares. No, you're talking about the return. The return. The return over the what period? Last two years, Crocs and Chipotle.

Crocs. Crocs. Crocs was almost dead. You're going Crocs? I'll go with Crocs, but I think I heard someone talking about this earlier, so I may have the inside scoop. I think it is Crocs. It is Crocs.

Shares of Crocs up around 270% over the last few years. Chipotle, 250%. Yeah. Chipotle, on the other hand, wasn't in danger of going bankrupt. Right. Yeah. I mean, to be fair. Or becoming completely irrelevant forever.

Yeah. Crocs were, you know, shares were trading at one point around 70. I think today they're in the mid-20s. Which is bigger, Apple's cash on hand or Luxembourg's GDP? Oh, I love that. Wow. Ron? GDP of Luxembourg. Little tiny Luxembourg. Apple.

We might have a listener or two in Luxembourg. You never know. Be kind. Make it angry. Apple. Apple. Apple? I'm sure we have a listener. My good friend Rob Aaron, who lives on the Mosel down there in Maktoum in Luxembourg, where I visited. I'm going to Luxembourg. They've got a lot of money there, but I don't know how big the GDP is. Steve? I'll go Luxembourg, just because it sounds like fun.

It's Apple. Apple's got about $76 billion on hand. Luxembourg's GDP, around $52 billion. Well, you can't put them that close. Well, I mean, isn't the obvious play for Apple here just to flat out buy Luxembourg? Buy Luxembourg. Luxembourg is beautiful. But they would have to pay a multiple of GDP. I don't think just GDP. I think you could just get like a straight.

Yeah, they speak a weird language there, so they might be on sale. Which is bigger, Apple's market cap or Belgium's GDP? Oh. Ron? Market cap or Belgium. I'm going to say Belgium. James? I'll go with Apple again.

Apple. Apple. How dare you, people? It's Belgium. Belgium's GDP, over $460 billion. Apple's market cap, around $350 billion. I'd just like to take a moment and apologize to our dozens of listeners in Belgium. The comments of James Early, Seth Jason, and Steve Broido in no way reflect how much we love your waffles. We love Belgium. Waffles. We love their beer. I've spent plenty of money in Belgium. Not enough to give them that kind of a GDP, though. What are they doing up there? And finally, which is bigger, the total number of Internet users in China

or the total number of Internet users in the United States, India, and Japan? Ron, your perfect record is on the line. It's the India one. It's the India, U.S., and Japan? Yes. Okay. James? China. Seth?

I couldn't know less about these things. I'm going to say China again. Steve? China sounds good. Ron's perfect record is no longer intact. There's a lot of rural China that does not have internet access, are you sure? They have phones that can kind of look at the internet. This is crack research from our producer, Matt Greer.

485 million internet users in China, and the total for the U.S., India, and Japan, a combined 445. So, Ron, we do have- I think there's a margin of error there that kind of puts it at a dead heat. We have some lovely- Don't trust the Chinese government stats. We have some lovely parting gifts for you, Ron. Don't worry. We should have done smokers in China versus U.S. population.

I knew that one. You know, maybe Mac can work on that for next time. I think it's way too easy. It's smokers in China. All right, we will move on to Stocks on Our Radar. And guys, I am proud to announce that we have a sponsor here at Mommy's Home. It's our Stocks on Our Radar, brought to us by Encore Insurance Services. For a free life insurance quote, visit smartterm.com,

or you can call toll-free 1-866-347-5748. That's 866-347-5748. They'll compare rates to help you save. It's a free quote, so give them a call or just visit smartterm.com, where you will also find licensing and disclaimer information. All right. I'm actually going to do that. I'm in the market for life insurance.

Smartterm.com. I'm going to do that, unless it's a compliance issue for us. No. I'll check with legal. No, no. I've already checked with legal. It's all good. Ron Gross, the stock on your radar this week.

Yes. I'm revisiting a stock I used to own called FLIR, ticker symbol F-L-I-R. Stock's off 30% from a 52-week high. They are a manufacturer of thermal imaging systems. Those things on Mythbusters when they're lighting each other on fire. They're used for both surveillance, terrorism and the war on terror increases the need for these things, as well as industrial applications, making sure that there's no leaks or defects in buildings. So the stock is down as a result of the overall market, the economy being weak, I think this is a real interesting opportunity. Wonderful balance sheet, nice cash flow producer.

What do these things cost? Like how much if I wanted to buy a thermal imaging? They're not cheap. They're not cheap. There's 40% of businesses to the government, and so these are real. You want to stick one on the front of your helicopter to find insurgents that's going to cost you. Just be fun to watch people. Let's bring in Steve Broido.

Steve, do you have a question for Ron about his stock? Sure. How much of a growth market is there in thermal imaging? It seems like there would be a limited number of people interested in a technology like this, and I would assume most of those people already own thermal imagers. I don't know. James seems pretty interested. As infrastructure gets built out overseas, emerging markets, there will be a need for engineers and manufacturers to use these for industrial applications.

From a government perspective and a surveillance perspective, perhaps lower growth than we'll see over in emerging markets. James? Chris, my stock is Williams Company. The ticker is WMB. This is a natural gas pipeline company. It's a very sexy business, in my opinion, if I'm a dividend lover. 3% yield now, which is not huge, but it just announced a 25% dividend raise, and it plans now to raise its dividend 10% to 15% per year for the foreseeable future. So basically, it's a pipeline company that's gotten itself into high gear in dividend sense.

Steve, question for James? Sure. What is a good dividend that I should expect? Is this in line? Good is in the eyes of the beholder, Steve. But basically, 3% is above average. That's a solid yield. That's about the cutoff that I look for at Income Investor for something to count as a dividend stock. Well, what's the S&P 500 yield right now? Do you know about it?

2.4, 2.5, 2.6, something like that. So if it's 3% or higher, you're getting above average? Above average, yeah. All right. Seth, Jason, your stock this week? Well, I saw that late this week McDonald's was clubbed down a little bit during the bad market on news that horror of horrors comps were only up three and a half percent or something and analysts wanted more and you know what mcdonald's never looks cheap it's probably not cheap cheap

here cheap cheap cheap but i think you could do uh worse than to start a position here uh if you don't have one i mean it's mcdonald's everyone eats at mcdonald's except for those foodies the ticker symbol mcd steve question for seth sure mcdonald's is a franchise business as i understand For the most part. Do you have a lot of faith in franchises? They seem, franchise-operated businesses always seem troublesome. Well, it depends. Are we talking about Pretzel Wagon here from The Simpsons?

Or are we talking about McDonald's? McDonald's has this stuff down to a science. And so I would trust a McDonald's franchise business. Yes, very much. Some of the newer franchises that you get at these weird fairs, I'd be leery of those. Where do I find the weird fairs? Yeah, we should go to a weird franchise fair. Let's do that.

That's kind of interesting. Absolutely. portfolio. Let's get on that. I want to see the pretzel wagon. Alright, before I let you get out of here, Ron Gross, guy who runs Million Dollar Portfolio, one thing you're working on for next week? For next week, so we're basically fully invested in Million Dollar Portfolio, so some tough decisions have to be made when looking at new stocks, because you have to sell something to free up capital. So, we're going to be looking hard at ranking stocks to see, because

we always want the best stocks in the portfolio at any one time. James Early, income investor, what's on your radar for next week? Chris, we have been polishing off our annual review. This is our sort of most loved issue of the year. We talk about all of our stocks, the good and the bad, and that comes out next week. And I'm thinking about doing some funny videos, too. So if you have ideas, send them to me, and I might entertain them. Maybe some dancing, actually.

Keep them PG. Yeah, definitely keep them PG. Seth Jason, Hidden Gems, what's up for the next week? Over the past couple of weeks, I've been revisiting oil field services and other sort of Gulf oil stocks because, what was it? When did that whole BP thing blow up? Was that a year and a half ago? It was a while back, yeah.

We recommended a bunch of stocks in that space. They went on to clobber the market pretty handily. And a lot of them have been beaten back since then. So I'm looking at these and reviewing these to see what opportunities there might be all over again. All right. Seth Jason, James Hurley, Ron Gross. Guys, thanks for being here. Thanks, Chris.

You can check out the services these guys run at fool.com. Thanks to our guest this week, Robert Brokamp. you can get a free 30-day trial to his service by going to retirement.fool.com. That's it for this edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.