Motley Fool Hidden Gems Investing - Motley Fool Money: 10.24.2014

Episode Date: October 24, 2014

Apple hits a new high.  Amazon stumbles.  Microsoft surprises.  And McDonald’s slowdown continues.  Our analysts discuss those stories and share some stocks on their radar.  And we talk about the power of the unconventional with Linda Rottenberg, author of Crazy is a Compliment: The Power of Zigging When Everyone Else Zags. Learn more about your ad choices. Visit megaphone.fm/adchoices

Everybody needs money. That's why they call it money. The best things in life are free. But you can give them to the birds and bees. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money Radio Show. We're at Fool Global Headquarters, but we are not in studio. We are not.

We've got a live audience. I think they're alive. Prove it. Prove it. Is this the best-looking audience you've ever seen? It is absolutely the best-looking audience I've ever seen. Every company, I think, across America has Bring Your Kid to Work Day. We have that at The Motley Fool.

We also have Bring an Adult to Work Day. So that's what's going on. That's why we've got the live audience. I'm Chris Hill. Joining me on stage, Ron Gross from Million Dollar Portfolio and Jason Moser from Motley Fool One. Good to see you guys. Good to see you. Earningspalooza rolls on this week.

Entrepreneur and author Linda Rotenberg is our guest. and we will dig into the business of Halloween. And, of course, we're going to give you an inside look at the stocks on our radar. But we begin this week with earnings from the biggest public company in the world, and that's Apple. Ron, a lot of numbers leaped out at me in Apple's fourth quarter results, but the one that really leaped out, more than 39 million iPhones sold. That is clearly the story here. Staggering demand is how the CEO put it.

A little bluster there, but perhaps not. The numbers are pretty incredible. The funny part of the story is that the Mac isn't dead either. Really good growth in the Mac business as well, 21%. But that really isn't the story. The story is the continued introduction of products that people want. For many, many months, we talked about on this show and elsewhere, when are they going to come out with new things?

When are they going to innovate? They've certainly continued to do that time and again with phones that people want. The tablet business is interesting. The tablet business is weak, iPads. It's partly, I think, cannibalization. As phones get bigger, the demand for tablets goes down. But there also hasn't been a real replacement cycle yet. We're four years in, perhaps.

People don't really need to replace their iPad yet. When it comes time, when that happens, it'll be really interesting to see. Let me turn to the guy with the iPad in front of him. When are you going to replace that thing? I mean, this is the third generation. I really have no reason to replace it yet. But I think they're pretty clever, at least. They do this with their phones as well.

as every time they iterate that operating system, at some point you hit a stage where your device physically can't handle the new operating system, whether it's more memory or whatever it may be, and then you're more or less required to upgrade. So I think with the phones, you see that the 4 and the 4S, you know, I'm getting ready to go buy one of those new 6s. That will play out with the tablets as well, but by the same token, I still don't think they'll ever hit that same type of replacement cycle that the phones do have. And they do a good job of forcing replacement cycles too. Apple Pay was just released. You really need the six to get involved with that. Initial reviews are quite good. They had some glitches. Some people got charged twice. You never want

to see that. But it looks like they've got that under control, and certainly Apple Pay is the new big thing. Let's get to the stock, because shares of Apple hit an all-time high this week. How overvalued is this stock? Oh, hey, that's a leading question. Or is it cheap? Is it still cheap at an all-time high? Stocks at $105. If you listen to Mr. Carl Icahn, he thinks it's worth $203.

I think that's mistaken. We've said we're sellers at $107. We've been saying that for quite some time. But to be honest, we're sharpening our pencils again and looking at it in light of the new demand for the phones and some good things we see in the future. And it's possible our guidance could come up. Amazon.com warned analysts that it would lose a lot of money in the third quarter. And I guess in that regard, guys, they did not disappoint. The online retailer lost nearly $450 million in the third quarter.

Shares on Friday, Jason, falling to their lowest point of the year. Yeah, I mean, it wasn't surprising to see, you know, top-line growth. It wasn't surprising to see breathtaking losses. That's pretty much the story quarter in and quarter out for Amazon. You know, I think the problem is when you guide for a relatively weak holiday quarter, the more they do this, the more difficult the narrative becomes for Jeff Bezos to say, hey, look, I'm just reinvesting in this business quarter in and quarter out, and you can expect losses for the foreseeable future.

Now, those of us who study the business, if we read the shareholder letters all the way back to 1997, we know how he runs this business. He's not running this business at the whims of Wall Street's demands. He doesn't care about earnings per share. He doesn't care about the quarter-to-quarter results. He cares about cash flow, returns on invested capital, but mostly he cares about the customer.

He's trying to build the world's most customer-centric company. That's their mission. And so he is continuing to do that. Operating cash flow is a metric we use to judge the health of this company, and by all measures there it's looking great, $5.7 billion for the trailing 12 months. They're plowing that money back into fulfillment centers and also what they call sort centers, which more or less help support those fulfillment centers and whittle down the cost to ship those goods to the consumer and make it a faster point A to point B.

That's sort of that same-day delivery model that they're looking to figure out here. So, no, Wall Street, I think, is losing patience with Amazon, certainly falling out of favor. But by the same token, the valuation here is starting to look very attractive when you look at the operating cash flow. I mean, I'm a shareholder. I'm not getting rid of my shares. I'm into this one for the long haul. And I think that investors in Amazon need to look at this as a decades-long story and then just go about their business. They've got the holiday quarter coming up, though, Ron.

They kind of need to hit a home run. They do. And I think they're probably sandbagging guidance, which is coming in low so they can beat. But you never know. We'll have to wait and see. I agree that it can be fatiguing to own this stock. We own it in a million-dollar portfolio. The lack of shareholder really care there.

There's very little transparencies. The conference calls are not great, not a ton of information. It leads people to just want to sell the stock when things don't seem like they're going our way. but that can create opportunity for those of us that aren't short-term. Think more about two, three, five years down the road. At $290, the stock does look pretty attractive. Yeah, I think it was encouraging to hear that the price increase that went through on the prime relationship there, it went from $79 to $99.

Management says they have seen a great retention rate from that, so I think that's encouraging. By the same token, I also don't think we'll see another price increase anytime soon. Microsoft's first quarter revenue came in north of $23 billion, higher than Wall Street was expecting. Ron, on a percentage basis, the cloud computing division is not huge for Microsoft, but it really does seem to be growing. It's growing, and I think it's the future. It's great to see it double, more than double. It's only 5% of revenue still, but Satya Nadella, relatively new CEO, is really taking the company in that direction. I think it makes sense.

There's pockets of strength. Even the Surface tablet did well, which was interesting. Xbox was strong. Not surprisingly, Windows continues to be weak, but less weak than we've seen in previous quarters. So less weak is always good. But the company is really making the necessary moves. I think the stock price has reflected that. We've seen job cuts, cost cuts.

The company is leaner than it was, certainly in the face of the Nokia acquisition. They were a little bit bloated, and the employment numbers had to come down. and the CEO did that. And so I think that they're doing well. This was a really encouraging report. When you look at the stock, we've talked for years about how this is a company that never had trouble making money, but the stock wasn't really reflecting it. It does seem like it's not really a cheap stock anymore.

I'm not saying overvalued, but it's definitely not as cheap. No. We've been saying for a while, last year, year before, it's a value stock, it's a value stock, nothing ever happened. Finally it did. It woke up. Stock's at 46. We like it up to the low 50s probably,

maybe 15 percent upside left. Shares of Chipotle down this week after third quarter results came in. A key metric for any retailer or restaurant chain is same-store sales, Jason. Chipotle same-store sales grew more than 19 percent. How much better do they have to do? That's not bad. Don't you feel like it would have been apropos to have Chipotle maybe catering lunch today as opposed to whatever we have here? Given the performance that they brought in this quarter, I mean, to your point there, when you bring in same-store sales or comps, as we refer to them, in the 20% range and it's phenomenal. This was their strongest quarterly comp since going public in 2006. So the downside to this is at some point you become a victim of your own success. If you

don't continue to top those numbers, then the market's more of a not what have you done for me lately, but it's what are you going to do for me? And I think that was the key to the release there when they gave guidance for 2015 and they called for their same store sales to be more in sort of the mid single digit range so going from 20 to 5 is a pretty significant drop now to their credit like we're talking about with amazon i think they're being relatively conservative there but that's the right thing to do right because they have a price increase that they just ranked through this year which means that those comps are going to get a little bit difficult a little bit more difficult next year when they come upon the anniversary of that of that price increase

but one thing you know we continue to pay attention to besides the comp numbers with chipotle is food costs as a percentage of sales and they were up a little bit here over over the same quarter last year. But that's the basis of this business, right? I mean, they built this business and attract the consumer by saying, listen, we're going to give you better food with better ingredients. And surprise, it costs a little bit more. But consumers are willing to pay. And they showed that as they ran through that price increase and traffic didn't fall, it actually went up. So I think that the growth story for this company is still very much intact. When you look at the shophouse concept, the pizzeria locale concept, which are really just getting started,

I think you have to look at this as another big winner here over the coming years. Coming up, we will ask the question other investing shows are afraid to ask, which Halloween candies are the most overrated? Stay right here. You're listening to Motley Fool Money. I get money from you to tickle your whim or blow up your mind. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross in front of a live audience. So let's get back to the earnings news.

McDonald's third quarter profit came in much lower than expected. Jason, there were a bunch of one-time charges McDonald's is dealing with. But same-store sales around the world down around 3%. That's a terrible trend. Yeah, I mean, going from Chipotle and the highs to McDonald's and the lows. I mean, this is just a – McDonald's is facing a lot of headwinds. I mean, from the comps numbers that you presented there, the quality of the food, they have no pricing power. The perception there of the health, there's a brand stigma, I think, involved here where it doesn't communicate quality.

And I think consumers are recognizing that. And if you look at McDonald's sales, percentage of sales that come from the U.S. here, it just continues to decline. They're losing share, two companies, to concepts like Chipotle, Panera, and the like. So as they redefine sort of that quick service, fast casual segment, it's nice to see that they are addressing this with a three-point strategy. Again, that's a three-point strategy. What they're going to have to do is execute. And I think they've got a lot on their plate here because when you look at same-store sales numbers globally down over 3%, domestically down over 3%, they're projecting negative same-store sales for October. There's not a whole heck of a lot to really look forward to here.

Now, it's a huge company, right? one of the biggest restaurant companies in the world, they are able to juice the dividend, reward the shareholders for being patient here. I still don't really like the growth story here. And if you're looking at restaurants, I'd be looking at the smaller concepts with better growth opportunities. Does one of the three-point plans involve the McRib? If it does, they were being very secret about it. And if it does, I think I'd be a little bit concerned.

If you're levering the success of your future to one sandwich. Hey, the McRib comes out every December. We talked about companies sandbagging. McDonald's might be sandbagging because they've got the McRib coming. Nothing better than pure formed rib. Pretty good week for Bellwether stocks. Third quarter profits for Caterpillar, 3M, and UPS all came in higher than expected. Shares of all three were up, Ron.

Caterpillar and 3M, this week they had their best one-day gains in years. Yeah, not only great for the companies, but I think bodes well for our economy as well. Not everyone raised guidance. UPS kind of maintained, but Caterpillar raised guidance. It's kind of an indication of not just domestically but overseas that there's pockets of industrial strength. UPS hiring 95,000 additional workers for the holiday season. Certainly they want to make sure that they're ready. They haven't always been ready.

Winter weather last year really interrupted sales quite a bit, and they don't want that to happen again. But they've done a great job. Everyone's a little bit leaner. Costs have been cut when needed. And now that growth has returned, I think we're seeing strength in both the business and the stock price of all three companies, really. And hopefully that's good for our gross domestic product here and bodes well for 2015. A couple of weeks ago, we were talking about coming into earnings season, what we were all interested to see. And one of the things I said was that I'm looking for clues about the holiday quarter, about retail in December.

And UPS came out with their earnings report. They said they expect shipments in December to rise 11%. That seems, I don't want to get too overly excited, but that seems like a pretty promising sign when you have a shipper the size of UPS saying they're expecting that kind of growth in December. I do. I think online sales look like they'll be strong. I can't necessarily say the same, though, for brick-and-mortar shopping. We've been saying for quite a long time now that there just seems to be some consumer malaise. Can I say that word?

Sure. I just did. So it'll be really interesting to see how the traditional retailers do online. I think it'll look good. But is that a counterpoint to what we talked about earlier with Amazon? Yeah, I was going to say, I mean, the shipping, that does look good. But I think with eBay and Amazon both projecting rather, you know, at least lighter holiday quarters than many expected, perhaps they're being conservative. I hope that's the case.

I know I've got a lot of spending to do on those, you know, on Amazon this Christmas. But, yeah, I mean, you see kind of both playing against each other. Under Armour's third quarter, revenue and profits came in better than expected. Their guidance for the full year looked good. Normally, that is a recipe for a stock moving up. It was flat this week. Where's the love? Well, so I mean I said this on Twitter yesterday.

I think to sell this stock off and to have concerns in regard to this quarter with slowing growth I think is laughable. I mean I think there was one little spot in there where maybe the growth didn't quite meet expectations, and that was a peril. And the expectations were maybe 30 percent. The reality was around 25 percent. But footwear was up 50 percent, and that's versus 28 percent a year ago. And international was up 93%, and that's up from 38% a year ago. So you see Under Armour growing very quickly. It's just sometimes when you grow your business that quickly and they kind of continue to expect that growth to continue more or less,

it's more difficult to sustain that growth as the company gets bigger. And Under Armour is growing very quickly. It is getting bigger. It's still very small when you compare it to something like a Nike. I mean, Under Armour is still just a fraction the size of Nike, really. But I think that what they are doing is taking advantage of a very strong brand and a founder leader in Kevin Plank who is very – he's dedicated to the success of this business. They're going to top out $3 billion in sales here for the first time ever. Gross margin continues to go up thanks to maintaining pricing power on their products along with the pursuit of that direct-to-consumer market, which is sort of – that's your e-commerce and the Under Armour stores.

And so I think that really it wasn't a cheap stock going into earnings. It's understandable the market sold it off a little bit, but again, this is another one of those companies that I think in five, ten years, it has nowhere to go but up as long as Kevin Plank stays on message. Apparel is the bread and butter for Under Armour. Real quick, what is the next big growth opportunity? Is it footwear? Is it international? I think footwear. You know, I gave their shoes a shot.

I have a pair of Under Armour running shoes. I like them. My oldest daughter decided she wanted to get a pair of them. So I think they are proving themselves in footwear. And don't forget. More fashion or sports? I mean, I think both. I mean, don't forget, they got their entry into the footwear department with football, right?

And so now I think they're pursuing other avenues like golf, running, things like that, cross-training. And I think they're doing a good job of it. And I think the growth numbers prove that. Halloween is next Friday. And according to the National Retail Federation, this year Americans will spend more than $7 billion on Halloween. This includes candy, decorations, and costumes, including an estimated $350 million on Halloween costumes for pets. That's just so wrong on so many levels. I mentioned at the break overrated Halloween candy, but let's put this through the lens of investing.

We talk about stocks being overvalued or undervalued. So give me one candy that's overvalued and one that's undervalued. Ron Gross? Well, I'm a candy guy, not a chocolate person. So I will say overvalued is Milky Way. I don't get it. I just don't get it. It doesn't seem like it needs to be with us.

It's redundant. So I would say undervalued would be candy, something like Laffy Taffy or a good nerd. I like a good nerd. Jason? Overvalued are Smarties. I like Ron's. I don't get it. I mean, those things are just not good, and I get a roll of those Smarties that are just straight in the garbage.

I don't even bother with them. Undervalued, Junior Mints. I mean, I don't see enough of Junior Mints. It's like Kramer said, it's peppermint, it's chocolate, it's delicious. Let's bring in our man. He's not behind the glass, but we'll bring in Steve Broido. Steve, we've got a minute left or so. One candy that's overvalued, one that's undervalued.

What do you think? Overvalued has got to be Tootsie Rolls. Tootsie Rolls, totally overvalued. And undervalued, I'm going Chuckles. Do you guys remember Chuckles? Chuckles. Chuckles. That's a good call.

They gel like candy. Love them. Love me a Chuckle. I can get on board the Chuckle bandwagon. I think the Chuckles, that might be like a deep value play if we're talking candy stuff. What do you do when you get those whoppers? I'd say whoppers are terribly overvalued. I mean, they kind of –

Milk should never be malted. All right, guys. Thanks for being here. Earlier in the week, I taped an interview with entrepreneur Linda Rotenberg about her new book, Crazy as a Compliment. That conversation is next. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill.

Endeavor Global is a nonprofit organization that mentors and supports entrepreneurs in emerging markets. You might think that undertaking that type of work is a little crazy, but my guest this week is okay with that. Linda Rotenberg is the co-founder and CEO of Endeavor Global, and she's the author of the brand new book, Crazy is a Compliment, The Power of Zigging When Everyone Else Zags. Linda, thank you so much for being here. Great to be with you. I want to start with a quote from your book that I love. There are a lot of quotes in your book that I love, but one is from someone who I think sort of embodies entrepreneurship, and that's Richard Branson.

But what surprised me was his comment that the goal of an entrepreneur is contained disasters. I always thought of entrepreneurs as people who just had a game-changing idea and sort of went ahead with it. I never really thought of it in terms of the amount of chaos that can occur when you're looking to strike out as an entrepreneur. work. Exactly. Well, and I think to start, I mean, there are many things in that we can touch on a lot of different things, but let's start with this issue of risk. We often picture entrepreneurs as these swashbuckling mavericks, people like Richard Branson. We think of as daredevils who go all in and bet the farm. And most entrepreneurs are not risk maximizers, they're risk minimizers. That's why Branson talked to our entrepreneurs about contained disasters. But so much of what we

think about in terms of the approach to entrepreneurship and the type of risks you're going to have to take are really wrong. So for example, people think, well, if I don't have millions of dollars or access to venture capital, I can't start a business. It turns out half the Inc. 500 companies, so half the fastest growing companies in the US were started with $5,000 or less. And with crowdfunding, it's even easier to start. So number one, you don't need a lot of money. Number two, everyone says, well, but what if I need to leave my job? I can't afford to, and I have a mortgage. It turns out that so many of the best entrepreneurs didn't on day one leave their jobs. So two examples I cite, one is Sarah Blakely of Spanx. Many of us are familiar

with her products. And she ended up selling fax machines for two years while the product was taking off. You mentioned Richard Branson, the other daredevil, the just do it guy. Phil Knight of Nike, this really surprised me. He spent almost a decade as a tax accountant doing other people's taxes while somebody else was selling the shoes. So what I learned is you can wager a few chickens, but you don't need to bet the farm. One of the things that you write about is that entrepreneurs face skeptics. And it's not just the challenge of competitors that entrepreneurs face oftentimes the first challenge they face are skeptics who are within their own families their closest friends the people that you would think would be most likely to support them

and i have to say you include yourself in this group because you write about your life when you were sort of on the corporate fast track and then you're on your way to starting this non-profit organization and your parents who i'm sure love you very much um we're we're not thrilled yes we're not trying to talk you out of it yeah no i actually believe the biggest barriers to entrepreneurship are not financial they're not structural they're psychological and emotional and in fact i would say the biggest the first naysayer you have to overcome is yourself i think so many people have ideas that die in their minds because they don't give themselves permission to take risk because they're worried about what other people especially those close

to them are going to say. So in my own example, I went straight through to college and law school. My parents, as you say, are very loving but risk averse. And when I got to law school, I realized I had no interest in practicing law. And so I went off to Latin America and realized there was no support for these big dreamers, these entrepreneurs in places that were emerging economies. So I had this crazy idea to set up what became Endeavor that was going to help these young entrepreneurs. And my parents overheard me and my co-founder at our kitchen table plotting this organization, and they were not happy. So my dad basically came over and reminded me that I didn't have a trust fund and said that if I didn't like the law, you know, what about consulting,

banking, anything safe? And I shook my head. And then my mother very kindly suggested that if I was going to produce grandchildren, that, you know, my eggs were not getting any younger. And I say today that she was ahead of her time because Apple and Facebook, for better and for worst just announced this week they were freezing young women's eggs if they wanted to. But my parents have been so supportive ever since. They had this reaction that made me have this moment that I think all dreamers face. And it's this juncture of doing what's safe and expected and what's unsafe and unknown. And it was at that moment when I not only knew that I had to move forward, but I really believe that that's why my life has been about helping other dreamers

feel unstuck and unscared in similar moments. Let's talk about some of those other dreamers, because you started Endeavor Global back in 1997. You've helped hundreds of entrepreneurs go through the Endeavor program with mentoring and financial support. And by the way, for anyone who's wondering what kind of business numbers we're talking about, last year, the revenues generated by Endeavor's entrepreneurs around the world totaled $7 billion. So that's an impact that's certainly being made. But I am curious for all

the ones that you have met with, because you've met with many more who haven't quite made it through the process. I'm curious, is there a common mistake? Is there a rookie mistake that entrepreneurs can make and that anyone listening, if they're thinking about it, can hopefully avoid? Well, so I look at in the book, and crazy as a compliment, I look at the journey of an entrepreneur and set it up and to get going, go big and go home. And the reason I'm stating this is that, you know, part of the mistakes come at the going phase, right? Not only psyching yourself out. We can go back to the chaos in a minute.

But I think another kind of mistake early on is just overplanning. I think people in this country, whether they're inside a company and rush to the boss or rush to create a PowerPoint or they're starting a new company and they rush to create a 75-page business plan, which I've heard several people do. I think entrepreneurship is about seeing a problem and acting on it. I always say stop planning, start doing, and that entrepreneur really is a fancy word for doer. And so many of the successful entrepreneurs that I've worked with and many of them that I researched and read about in the book are people who just saw a problem and started solving it and put their head down. So stop planning, start doing. That's for the get-going phase. Where endeavor comes in is at the scale-up moment, so at that go-big phase.

And there I would say I have a whiteboard filled with common mistakes, but just to name two, I think that number one, people don't understand that they now have to transition at that point to being a leader because you can't go big without getting a team around you. And I've actually created with Bain & Company an entrepreneur personality type diagnostic because what I've learned is you can't role model yourself just after Steve Jobs and Mark Zuckerberg. That's not necessarily going to work for everybody. There are different types of leadership personalities and entrepreneur personalities. Everyone has a strength and a weakness or more than one strength and weakness. What's key is knowing yourself, and people don't bother to know themselves, and therefore they can't lead and build a team around them. The second thing in terms of the companies is people have to be open to change but not too open. So, in fact, what we've found and other studies have corroborated that a big mistake is over-pivoting and that many entrepreneurs end up killing themselves even before competitors kill them and that they get so excited about the new, new thing, they never stop and focus.

So, you have to be open enough to pivot where you really see a new opportunity in the market. But what studies have shown is one or two pivots is the maximum, and then you risk innovation suicide. You're listening to Motley Fool Money, talking with Linda Rotenberg. Her new book is Crazy as a Compliment, The Power of Zigging When Everyone Else Zags. When you talk about pivoting, you just reminded me, Seth Goldman, who started Honest Tea, was a guest on our show. I went to high school with Seth. You went to high school with Seth? Well, one of the things he talked about was how when putting together the original business plan for Honest Tea, they did not think at all, nor did they write down anything about distribution.

They just had the idea to make the tea. They didn't think a whit about how to actually get it to people. And I'm curious to what extent agility, whether it be mental agility or just personality-wise, is crucial and maybe even non-negotiable if you're an entrepreneur. I think this is key. And as I said, I write a lot about people within companies. I don't like the word entrepreneur, so I call them skunks based on Lockheed's Skunk Works program. And I believe every company needs to breed skunks to stink up the joint. But yes, you have to be agile, you have to be willing to take smart risks, and you're

going to bump into chaos. Every dreamer does, whether it's by your own doing or external. And in fact, my favorite story in the book occurs in the early 19th century in France when this young widow inherits this family vineyard and is put in charge of a business she knows nothing about, and she ends up revolutionizing the champagne industry. But just as she does, the Russians invade France, and all the experienced wine owners shutter their doors. She decides, this is a marketing opportunity. I'm going to get the Russians drunk.

And she not only succeeds, but she ends up getting her champagne to Russia before the competitors, and Tsar Alexander announces he will drink only the widow. Well, Veuve is French for widow, and this woman, Barbe Nicole Ponsardin's husband, was François Clicquot. It's the story of Veuve Clicquot, and what I love about it is, here's a woman who knew nothing about the industry but by taking smart risks and realizing that she could embrace the turbulence around her better than her competitors becomes the first woman to lead a multinational you know getting your enemies drunk is always a winning strategy i think exactly as i said you've been you've been doing if you've taken nothing else from this interview

you know clink with your enemies get them drunk get them wasted you've been at this for a couple of decades. And I'm curious, what has been the biggest shift in your thinking about entrepreneurship? Maybe something that when you started Endeavor Global, you believed, but two decades worth of experience has led you to think otherwise. That is a great question. And my answer was unexpected. And I'll talk about one external and one then internal in my own journey. Externally, I always knew that you didn't have to have a hoodie to be an entrepreneur. I've said this for a long time. And it does turn out that in the U.S. even, the fastest growing groups starting businesses today are women and baby boomers over 55. And so looking around the world, it didn't

surprise me that we found entrepreneurs in every industry, not just tech, in every generation, in every race and gender. That didn't surprise me. What surprised me is realizing the more I got calls from people inside Fortune 500 companies that were worried about their jobs and young kids growing up on college campuses in rural towns that didn't think they were going to get to Silicon Valley and parents that drop off who are going through work transitions that I now believe that entrepreneurship

is not just for entrepreneurs anymore. And I've come to believe that it is not a career path, it's a skill set and a mindset that we all need today. And I think that we think about it, get back to taking risk, the riskier strategy is to do nothing today and hope our jobs are saved. Michael Bell told me,

today there are the quick and there are the dead. So I've come to believe that if you can harness a little bit of risk-taking and try something new, that those are the people that are going to get ahead. So that's been the biggest change in terms of the broader sense of an entrepreneur. My own journey has changed what it means to be a leader because especially as a woman leader, I thought you had to be tough and brave and independent. And when my husband, Bruce Feiler, the author, got cancer six years ago, I had to change my entire approach. I was with him through chemotherapy. Our young twins were girls, were then three. I should say Bruce is now, thank goodness, six years cancer-free.

But I wasn't able to travel. I had to open up to my team about what was going on. And what surprised me was the reaction. The team members said, you know, Linda, we used to think you were superhuman, but not in a good way, in an unrelatable way. And now that you're showing us your struggles, you're being revealing, now we'll follow you anywhere. And so I learned that as a leader, we need to be less super and more human. As you mentioned, the three sections of the book are get going, go big, and last is go home. And one of the things you write about is sort of work-life balance.

I'm curious. That's something I think a lot of people, particularly those people who have children, struggle with. What's one thing you've learned about work-life balance that everyone can benefit from? Well, my girls gave me the best advice. They told me, just remember, you can be an entrepreneur for a short time, but you are a mommy forever. And I always take it back to heart. And I hate the word balance because we all drop things. There's nothing anyone with kids has anything in balance.

But I think about work-life integration, and I think that especially someone who I hire a lot of millennials, people today want to marry their values and their passions and their ideals with both their work life and their personal lives. And I think that the businesses today that understand that being a people-first company that people talk about, understand that their employees are people-first, that have a life outside of the company, those people are going to get ahead as employers of choice. I think that the days when we could just give the most perks to keep people at their desks the longest, I think that's going to end. And I think when you're seeing, in terms of employers of choice, there was a study of 12,000 millennials that recently came out. And it was really surprising. Of the top 25 places to work, over half were government agencies and hospitals. Sitting at number one above Google, Amazon, and Disney was St. Jude Children's Hospital. So I think we're going to change the competition for the foosball tables and the massage perks to people being able to get home for family dinners and also get ahead at work.

The book is crazy as a compliment. The power of zigging when everyone else zags. It is already a New York Times bestseller, so pick it up. There are a lot of great stories and great tips. Linda Rotenberg, thank you so much for being here. Thank you. Coming up, we'll give an inside look at the stocks on our radar. This is Motley Fool Money. If you've got the money, I've got the time. 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 with Jason Moser and Ron Gross in front of our live audience. Before we get to the stocks on our radar, guys, you can always email us. radio at fool.com is our email address got an email from monty singleton in utah regarding our request for memorable wedding stories monty writes my friend had a riverside wedding during the service state authorities arrived and retrieved a dead body from the river right behind them their honeymoon was in colorado during the massive wildfires of 2012 and they had to stay in the hotel the entire time fortunately things have improved from there yeah you know i'm i get that they

want it to be outside, but that's not the worst thing in the world on your honeymoon to be stuck inside a hotel with your brand new spouse. I don't know. I could be wrong. We have a special offer on Motley Fool Stock Advisor. It's our flagship service, and it's a great way to get started investing. You can learn more by going to mfmoney.fool.com, or you can just text the word fool to 38470. That's 38470. Text the word fool, and we'll send you a link. You can get 75% off Motley Fool Stock Advisor, so check it out. We've got a few minutes to get to the stocks on our radar, we're bringing our man Steve Breida to hit you with a question. Ron Gross, what's on your radar this week? I am keeping a close eye on Tile Shop, TTS, Retailer of Tile, so it's appropriately

named. And they report earnings next Tuesday, and that's why I'll be really watching closely. This has not been a good stock for us. We're down about 50% on the stock. The last couple quarters have not been good, going all the way back to winter weather last winter, and then some macro issues dealing with housing in later quarters, we think it's severely undervalued. But I'm really looking for clues that the business is firming up, the economic situation is firming, housing is firming. I see some indications that that could be the case. So Tuesday is going to be a big day.

I might not get much sleep Monday. We'll see. Steve Broido, you got a question about tile shop holdings? Do they handle installation or is it just sale of tiles? They handle installation too, but more of an outsourcing basis, is trying to bring more of it in-house as they open up more stores. Relatively small at this point, only 100 stores, but they think it's, in quotes, a no-brainer to get to more than 400 stores.

So we see a lot of growth. Steve, your question suggests to me that maybe you've got a home improvement project coming up. Is that true? Backsplash. I should be able to do it myself, but that's not going to end well. Hire a professional. Always hire a professional. Jason Moser, what's on your radar this week?

I'm going to go back to the well here with one I tapped about a month ago. The company is called WageWorks. Ticker is W-A-G-E. And WageWork provides consumer-directed benefits programs, otherwise known as CDBs. So think about things like flexible spending accounts, health reimbursement accounts, commuter programs, things like that. Boy, that's a sexy business. It is sexy, Chris. But I'll tell you what, what's even sexier is making money.

And that's what these guys help you do by saving on your tax bill. And it's actually a really neat value proposition because they help us save on our taxes and they help businesses save on payroll taxes as well. And I think there's a big opportunity here as we move to these private health care exchanges where we're going to see a lot of consumers signing up for those. And they're going to sign up for sort of the minimal plans where they don't have to shell out a lot for their paycheck. What that means is a higher deductible, more incentive to participate in something like a health care spending account, which is what these guys do. So the metrics that matter for them are employee participants and employer clients.

Both of those are growing nicely and have plenty of room to grow. This is just a pure play in a market that I think still has a lot of room to go. so I'm going to keep an eye on it. Earnings up first week of November. Steve, got a few seconds. What if there's a security breach? What happens to this company? Well, then I think they fix it, Steve.

They fix that security breach and they tell their consumers that it'll never happen again, just like Apple did, right? Sounds good to me. All right, Ron Gross, Jason Moser. Guys, thanks for being here. That is going to do it

for this week's edition of Motley Fool Money. The show is mixed by Gail Añanuevo, our engineer is Steve Broido, our producer is Matt Greer. I'm Chris Self. Thanks for listening, and we'll see you next week.