Motley Fool Hidden Gems Investing - Motley Fool Money: 12.24.2010

Episode Date: December 24, 2010

Encore Presentation: On this week's show, we talk holiday retail and share some timeless investing advice. Plus Corporate Library co-founder and film critic Nell Minow talks Buffett, markets, and movies. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Because we have your number. You're listening to an encore presentation of Motley Fool Money. 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 I'm joined by Motley Fool senior analysts Seth Jason, James Early, and Ron Gross.

Guys, good to see you as always. Good to see you, Chris. Coming up a little later in the show, we'll talk markets and movies with Nell Minow. But, guys, we're going to start this week with holiday retail, the topic that always seems to be one of the top stories not just for the financial media but for the news media in general. Seth, Jason, you're our retail guru in the room. We'll start with you.

How crucial is this time of year for retailers? First of all, where's the love for the turkey imitation? I worked on that with an actual wild turkey when I got the love. There's no comment. Oh, man. the retail stuff. You know what? You're going to see more and hear more about this than it probably deserves. I don't want to give everyone the impression that this season is not important to retailers because it's very important. It's typically by far the biggest quarter of the year

because they've got fixed costs. They sell more stuff. They generate better margins. So it is very important. But the term Black Friday used to signify when these companies finally started to make a profit. And if you think about the history of that word and you look at a company Now, most of these companies are profitable year-round, so it is not nearly the make-or-break season that it used to be. It used to be if you had a bad holiday season, you lost money that year. That's not the case anymore. Now, why it feels more important to us is because it's just going to be in your face for a week or two or three, no matter which way it goes. It's either going to be, hey, the consumer is back, or uh-oh, we were two-tenths of a thousandth of a percent low.

Ron Gross? Chris, I'm going to be watching this year the traditional brick-and-mortar retailers with the value proposition, the Costcos, the Walmarts, the Targets, but they also have a strong online component now. Interestingly, Walmart and Target do have a seasonal effect. They do do more of their business in the fourth quarter. Costco actually does not. It's spread out pretty smoothly throughout the four quarters, which is interesting to me. No massive bunches of toilet paper for Christmas. Exactly right.

But I'm going to keep an eye on how they do, specifically those three companies, this holiday season. James? Well, you know, Chris, this is the season for overspending, as I would say, is the retail curmudgeon. And I, you know, you guys know I don't like the fact that consumer spending is such a large part of the U.S. economy. I think that's the problem, not the solution. It's a short-term solution, but it's a long-term problem. I don't want to see more spending if it means consumers are getting into more debt. And I'm actually watching less on the retail front.

I'm watching foreign companies. If people pull away from foreign stocks, they would definitely be a buyer, and I wouldn't be surprised to see a little bit of retrenchment this holiday season there. Ron, you mentioned online retail. Forrester Research came out with a report a couple of weeks ago projecting that online retail is going to pull in close to $52 billion this year. That's a 16% increase over last year. That's pretty significant. Does that surprise you at all?

Anecdotally, it doesn't surprise me a bit. I know for myself, I would much rather sit in front of my computer and get my holiday shopping done than fight those stores, and the prices are better, the selection is better. It's really a win-win. Yeah, and most Walmarts won't let you shop with a beer or a drink in your hands. Is that how you're doing your shopping? Or in your underpants. I'm just saying most Walmarts. Cold beer in underpants?

So that doesn't surprise you at all either, Seth? No. In fact, I think that that is one thing really worth watching. The online sales of traditional stores, as well as retailers, we have at Gems, like Hidden Gems, the service I help run here at Motley Fool, like Fossil and Guess, they're actually picking up some major online sales growth. And then, of course, companies like Amazon, which have always been all about online, their sales growth has been far in excess of bricks-and-mortar competitors. So that's something really to watch, and it's a good theme to consider investing in. Seth, you touched on this a little bit earlier, just sort of the notion that it really is an in-your-face topic, not just on CNBC, but, you know, it just seems like the nightly news. It'll be on the radio. Public radio will talk about it. The classical radio station is going to tell you about this.

About holiday retail? Yeah. I mean, is it a proxy for the economy? Because it seems to be presented that way by the media. really don't think it is. It says something, but I'll put it this way. If what it says about future spending turns out to be true or what it implies, then people will say, hey, it meant something. And if it doesn't mean anything, they'll conveniently forget that they said it did. I mean, consumer spending is, what, two-thirds of our GDP, and this is the big time for consumer spending. Yeah, or more like 70% these days.

Yeah, which is not good. With 10% unemployment, consumer sentiment down, It seems contrarian to think that we're going to have a strong holiday season. But I'm predicting it right here. It might happen. You're listening to Motley Fool Money. It's our post-Thanksgiving special. And, guys, we're going to take a little bit of a step back this week because each week you guys are in here. We're talking about the news of the week.

But I think it would be good this week to sort of take a step back and get a closer look at how you guys think as investors. Oh, do we really want to do that? You don't want to see how people make the sauce. I'm not saying I want to go into the really dark recesses of your mind, but I think from an investment standpoint, it might be helpful. And let's just start with the notion of investment ideas. How do you get investment ideas? Is it from the newspaper? Is it from screens?

Ron, I'll start with you. I would say I'm primarily screen-driven. We have great tools here, software tools that we can use to screen for various criteria. But the ideas can really come from anywhere. We're constantly reading, whether it's news or magazines, newspapers. But I'm primarily, I would say, a screen-driven investor. Seth? Well, I actually use Motley Fool Caps quite often, which is an online investment community we have here where just regular folks rate stocks.

And I find some interesting ideas in there that I may not have otherwise seen through more traditional screens. And I do a lot of reading. If I read about a company or I see it in Morningstar, I'll follow up on it. I tend not to try to screen for the metrics I prefer in a company because usually those just don't work out for me. I will often try to screen for companies that are doing pretty badly at the moment because those tend to be the ones that can be very cheap because everybody hates them. But one of the things we frequently talk about here at The Motley Fool is the notion of investing in companies that you know. because I know for myself, I do a better job if I actually understand the business.

It's just more interesting to me, and it's easier for me to follow. Do you guys ever find yourself in a situation where you find a stock that looks attractive, that you come across through your screens, but it's in an industry that maybe you don't really know anything about? Does that kind of thing just scare you off? Definitely for me, it happens all the time, and I think biotechnology is a perfect example. I typically, as a professional investor or personally, would stay away from a company that I don't understand. We do own one, actually, in Million Dollar Portfolio, the service I run here. But that's because we have a member of the team who actually has a master's degree in biopharmaceuticals.

And we can get that done. But normally, I would stay far away. Coming up, more investing strategies plus an inside look at the stocks on our radar. This is Motley Fool Money. You're listening to an encore presentation of Motley Fool Money. Welcome back to Motley Fool Money. For investing commentary and analysis 24-7, go to the Motley Fool's website, fool.com. I'm Chris Hill, and joining me in the studio once again are Motley Fool senior analysts

Seth Jason, James Early, and Ron Gross. Guys, we're talking about investing strategies, and I know that whenever I turn on CNBC, there's usually someone talking about a specific metric and usually giving it a lot of credence. I'm wondering, as investors, what are some metrics that you think are either overrated or underrated? Take your pick. Ron Gross, I'll start with you. I'm going to make some enemies here in the CNBC crowd. But I would say on the overrated side, is anything technically based or chart based? A company, in my opinion, my humble opinion, is worth the present value of its future cash flows. That has nothing to do with where the

stock has traded in the past. It actually has nothing to do with where the stock's going to trade in the future in the short term. But over the long term, if we focus on those fundamentals, I think we'll get it right. But people like to think they know what's... People love to read... When you're talking about charts, you're talking about an investing strategy that is just based entirely on what the stock is doing in terms of its movement. It's not looking at the underlying value of the company. Correct. So, sometimes investors will use both, but I still would say that would be a mistake.

Where a company's trading with respect to its 30-day moving average, you'll hear those terms, 60-day moving average, to me is irrelevant. Okay. Radioatfool.com, send your hate mail to us. James Early. You know, I think there's actually some evidence supporting some of the moving average stuff. So, I made an enemy right here, right in this studio. There is evidence, but it's over the short term and you never know when it turns. That's the problem. I'll just quickly say my overrated one is price earnings, kind of obvious, but it's a point-in-time estimate. And earnings are different for REITs, real estate investment trusts, and

master limited partnerships. So it's a metric that doesn't even work with many companies. I prefer return on invested capital. This is sort of like ROE, return on equity, but for the whole company. It takes into account debt and equity, the implied cost of that, and how much money you're making to cover those costs. It's really sort of the raison d'etre for a business is to out-earn and it's ROIC. So if capital costs 10% and the business earns 12%, that's great. Most businesses don't. They earn 10% and their capital costs 10%. So they're not adding a lot of value. It's a little technical. You have to Google for it and it's more work. That's why it's underrated, but it's a good metric, ROIC. Well, James, I know that you really like dividend stocks. I mean,

is that sort of part and parcel? Don't get me started there, Chris. No, but is that part and parcel of the type of dividend stocks that you like? Yeah, it is, because it doesn't have to be a dividend stock that has a high ROIC. But in general, I look for companies that have proven track records of adding value. And probably the single best way to measure how much value a company has added is looking at its return on invested capital. Seth? Wow, such a good one. Those guys were really prepared. You have no notes in front of you.

I know. No, I have one, though. And I think an underrated metric, if you want to call it that, is the 52-week low list or how much a company is hated. I think that one of the very few advantages you have as an individual investor is being able to go ahead and buy what everybody else hates. And companies that are trading at their one-year or 52-week lows are pretty much by definition hated by the market. Now, sometimes they are hated for very good reasons, and they're going to continue to go away. But at other times, they are hated for less tangible reasons. It may be that they have a debt load that people are worried about, but in this day and age, it doesn't seem that banks want to repossess or lenders want to repossess any companies. It may be a short-term thing, or they just may not be the flavor of the month. So that's a great place to start looking for companies, and I always look there.

Can I just say 52-week low kind of sounds like a chart-based answer to me. You know, you were just pooh-poohing that. I stayed quiet during that whole thing. So are you hating on Ron as well? No, it's because if you were working on a chart-based thing, you would say, oh, if a company is on its way down, you would stay away. And what I am saying is that by looking at the 52-week low list, you have a good idea that that particular company is hated by most of the market. And not always, and maybe not even often, but quite often, often enough, that hatred is misguided. I'm going to give one final plug for an underrated metric, which is anything

balance sheet related. Investors focus often on the income statement or the cash flow statement. I think the balance sheet is one of the three most underrated statements. It tells us what a company owes, what a company owns, and I think you can make some very interesting investment decisions if you look carefully at the balance sheet. Before we get to stocks on our radar, Ron, you mentioned Mr. Buffett. I know that when we're looking at companies, we like to see good leaders at the top. I'd love to just go around the table real quick. Give me someone other than Buffett who's an investor that you really admire, and whether you pattern yourself after him or her, Ron, I'll pick

on you first. I'll hit America with a name they probably haven't heard, a gentleman by the name of Philip Oppenheimer, a principal of the firm Oppenheimer in close to New York City, and I was very fortunate to work for him when I was in graduate school, and I am very pleased to say he taught me more than any textbook ever could about value, about stocks, about putting your client first, and it really shaped my career in a very substantial way. James?

Chris, I'm going to give you an ungratifying answer, unfortunately. I don't mean this the wrong way. I just kind of do my own thing. I don't really make it an anecdotal. I don't look at certain invest. I just kind of invest. I've never read an investment book in my life. I just do it. I mean, to me, it's a statistical process. It's a boring process. It's not something to be, you know, I don't compare what Mr. X has done, Mr. Y has done. I just kind of invest. Wow. The self-made man. I love it. Seth?

I agree with James a little bit. I've read a couple of books, unlike James, it sounds like. No, a couple of investment books. I can read. I just choose not to. a couple of investment books. But what you learn from some of these investment books, like the famous one about Shelby Davis, an investor who compounded annual returns at some obscene rate and ended up with a ton of money, he was this hated miser.

His family couldn't stand him. If his grandson or his kid wanted a hot dog, instead of a hot dog, they got a lecture about the present value of that hot dog's cost in the future. I mean, you don't want to be one of these people. An investor I admire is somebody none of you out there have ever heard of unless you went to high school with me. And I'm just talking about a teacher of mine named George Munich

who taught us civics and government in high school. And the reason that I admire him and other people like him is that he taught us that investing was something for everybody. And so it wasn't his process or how he said to look at a stock or anything. In fact, he didn't really talk about that to us. He just made us aware that investing was something we should be interested in, and it was a good way to secure your future if you went about it rationally. An investor I admire is Steve Broido, our engineer.

So we're going to bring Steve into the mix for stocks on our radar. Ron, we'll start with you. Okay, I'm going to share a stock that I own quite a bit of personally, full disclosure, and it's a micro-cap stock. Red flag. It's a company called LS Starrett, ticker symbol SCX, and it's a maker of tools, more than 5,000 different types of tools. The plant in Athol, Massachusetts, baby.

Yes, sir, you got it. I've been there. But luckily they've moved some of that production overseas as well. Yeah, I think it's empty. Speaking of balance sheets, stocks at 12, tangible book value for the company is $20 per share. Company is profitable, produces cash flow. This looks like a good one. Steve, you got a question for Ron? Sure. What kind of tools are we talking about? I've never heard. Pronounce the company again.

L-S, L period, S period, Starrett. And it's everything from tape measures to more laser guided types of levels and hand tools. And is this at the consumer level or is this? It's at the industrial level. They, until recently, did sell under the craftsman name at Sears. I have a stare at digital tape in my toolbox at home. Very cool. I guess my only question would be, I've asked this before, is, you know, if someone's never heard of a company like this, how would I know to invest in it? Well, A, the reason it's cheap is probably because you've never heard of it. So that's where we take advantage of that, hopefully. And I've just told you right now. You've heard of it now. I have indeed.

That's why you listen to Motley Fool Money. James? Chris, nobody seems to dig my academic study screen, so I'm going to keep doing it until they do. No, I'm kidding. I'm going to talk about Campbell Soup, which has a 3.2% yield. It just raised its dividend 5%. A 102% return on equity, but a 300% debt-to-equity level, which there's a little lesson here, because it seems like they've just jacked up their debt to raise their return on equity, which you can.

That's why ROIC matters so much, because ROIC cannot be fooled by taking on debt. But the lesson is they've been buying back Treasury stock, which lowers your equity balance. So it's actually kind of false. They don't really have that high of a debt-to-equity ratio in a sense. So it's better than you'd think. So Campbell's Soup, it's a good salty type of product, and I think it sells well. Steve? Aren't people's appetite for soup?

Hasn't it just been met? I'm just don't think about soup that much. You're asking, are we over soup? You're asking the wrong guy. I would never eat canned soup. I'll answer for James since he hasn't been to a grocery store with cans in it in a long time, which is the answer is no. These companies do an amazing job of repackaging,

so you may hate the fact that they have this stupid package that's about eight layers of tin and then foam around it. And BPA. Yeah, so you could stick it in a microwave and pull it out when it's piping hot and not burn your hand on it and drink your soup. But that's the kind of thing they do to keep people buying and keep them paying more. Seth, your stock this week? My stock?

Netflix. Really? Everybody loves Netflix. Netflix is trading at 30 times free cash flow or something. I think you need to think about shorting Netflix or stay away. They just dropped the price. They had to. They're in a little bit of a price war with Hulu, which is, you know, online video.

And Hulu came out of beta, Hulu Plus. Netflix had to drop a price, or rather they created a streaming-only plan at a lower price point, jacked up the price of their lowest DVD plus streaming plan. Stock went up on that news. But to me, that's very strange because in the long run, and the CEO of Netflix has admitted this, this business is probably a price war. I think it becomes streaming video. I think it becomes a commodity business. And I don't think Wall Street thinks anything bad can happen to Netflix.

You want to be on the other side of that enthusiasm. Steve? Best Netflix rental recently. Oh, I don't get it. John Adams, the last disc I got. All right, guys. Thanks for being here. Coming up, Nell Minow recently went to Omaha to sit down with Warren Buffett.

She asked him a question about his investing strategy she's always wanted to ask. We'll find out the question and the answer up next. This is Motley Fool Money. You're listening to an encore presentation of Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. It's our post-Thanksgiving special, and we are always thankful for our next guest. Nell Minow is the co-founder of the Corporate Library, and she is the film critic known as the movie mom.

Nell, always good to talk to you. Thank you. I hope you had a nice Thanksgiving. Oh, always a good time. We want to talk about movies in a minute, but let's start with business. I don't think we've spoken since the midterm elections. Obviously, the Republican Party took control of the House. They gained some ground in the Senate. What do you think that portends for financial reform, and what does it mean for corporate governance? There's been a lot of big talk about gutting the financial reform legislation, And I know they're going to be giving Elizabeth Warren a hard time and trying to block a lot of what that consumer agency is supposed to do.

So I'm going to be watching it very carefully. I do not have a good feeling about it. Really? Because it seems to me like at least some of the financial reform that was enacted into law seems like the sort of thing that would just poll really well with voters. There's no question about it. You know, it's like cap-and-trade. That was a Republican proposal for a long, long time before somehow it got Democratic cooties all over it. I don't know. You would think that all of this is very pro-capitalism. The nice thing about the financial reform package is it prevents exactly this kind of meltdown in the future.

And if, God forbid, there is a different kind of meltdown, it has a procedure for responding to it. So I don't think they're going to interfere with any of that. But they certainly are not going to be giving any support to the issues that I care about, like the current hold on proxy access. One of the people who's usually held up as a good example of good corporate governance is Warren Buffett. You were recently out in Omaha and had a chance to interview him. What really stands out for you about the interview?

I had a chance to ask him a question I've always wanted to ask him. You know, we all know what he looks at when he looks at companies. He's been very opaque, I mean, very transparent about that. I wanted to know really what he doesn't look at. You know, we are just suffering under an avalanche of information all the time and much, much beyond anything that Graham and Dodd ever dreamed of. So I wanted to know what is it that he simply doesn't look at and doesn't listen to because he considers it a distraction.

And I was very interested in his answer to that. And anyone interested in the interview can go to the Corporate Library website, I watched the video, but for the purposes of, frankly, my own curiosity, what did he say? Well, he said that you don't want to look at what's happening today. You don't want to look at what the stock is doing. You want to look at the underlying business, all the stuff that you tell your people. The other thing I really enjoyed in the interview was that he talked about what he thought should happen to the people behind the Wall Street mess, and he was very tough on them.

So what do you think has been the key to his success? I know there's probably not just one thing, but when you look at him, what stands out for you in terms of Buffett as an investor? Integrity, intellectual integrity and personal integrity. There's a reason that he lives in Omaha. He really does want to stay away from the kind of distractions that you get in New York. He doesn't watch MSNBC. He doesn't look at the ticker all the time. He looks at the underlying business, and what I loved about this interview

is the way he talked about the individuals. When he is buying a business, he's also buying a person, and the way he talks about what he looks for in the people. If you're casting a movie about Warren Buffett, who plays him? Maybe Wilford Brimley? I think that works. I think Brimley, I don't know. Brian Dennehy?

Contractually, if Wilford Brimley has to have the mustache. One of the things that Mr. Buffett talked to me about was, you know, he's playing himself now in this little animated web series for children. And he loves doing the voice of his character. And he even does it over again if he doesn't think it came out well. You're listening to Motley Fool Money. We're talking with Nell Minow from the Corporate Library. Nell, there was an article in a recent issue of The Economist that took issue with some of your ideas on corporate governance. And I'll try and sum up here.

But it cited a study on corporate governance from the University of Southern California. And among the findings of the study were directors who were really well-informed about finance didn't perform any better than directors who didn't know much about finance. And boards with a higher percentage of directors from inside produced better returns for shareholders than companies with a higher percentage of outside directors. What was your reaction to the study? Well, I was really annoyed by the article because the article quoted me and seemed to think that I was on the other side. I mean, they didn't have to do that study. They could have just asked me. I could have told them, as I have been saying for years, that structural governance indicators are meaningless,

that who is and is not an independent director. I mean, look at Enron, where who is the head of the audit committee? He was the chairman of the accounting department at Stanford. That has nothing to do with how effectively a board operates. That's why the indicators that I look at, which I could have told these people in the study, are the indicators that show how well the system works, not what they say it is, but what they actually do. You can tell a lot more about the effectiveness of the governance at a company by the pay performance link and the pay plan than you can by looking at how many independent directors are dancing on the head of a pen.

Did you also take issue with the fact that they referred to you as industrious? I was very proud of that. You know, that's the gold star my parents have been waiting for ever since I was, you know, considered to be a dreamer in school. So I was happy about that. Well, you know what? You know, in the wake of Thanksgiving, let's talk about your family a little bit. You come from a family of incredibly accomplished people.

Your dad was head of the FCC under President Kennedy. Yep. Like you, both of your sisters are lawyers. One is an expert in library law. The other is the dean of Harvard Law School. Yes, both of them have been appointed to presidential commissions. My invitation is probably just lost in the mail somewhere. I'm sure it's coming soon.

So for parents like me, help me out. What were they putting in the water at the minnow house when you were growing up? It wasn't what was in the water. It was what was discussed around the dinner table. I am the biggest proponent in the world of family dinners. no media, no devices. Everybody sits down once a day, looks each other in the eye, and discusses what they did that day and what's going on in the world. Now, to be fair, you once advised shareholders of Aon Corporation to get rid of a member

of the company's board of directors, and the director in question was your dad. I know. I feel really bad about that. But I... Wait, wait, wait. Hold on, hold on. You feel really bad about that. I mean, what happened? What leads you to go to shareholders and say, oh, yeah, that director who needs to be booted, he's my dad, but trust me, he still needs to be booted. Yeah, that was kind of tough. What happened was this. I was, at the time, the head of institutional shareholder services. And I was very, very committed to getting our clients, institutional investors, to be more sensitive to the behavior and the performance and the qualifications of people on board. So I said, all right, this is what we're going to do.

If they don't have a single share of stock or if they don't attend at least 75% of the meetings, we're going to recommend a vote against them. And my father's name was the second one that came up. I had no idea that that was going to happen. So I had to make the awful phone call and tell him that I was recommending a vote against him. And he said, well, how many did I go to? And I said, well, you went to 72%. And he said, 72% is almost as good as 75%.

I said, Dad, when I came home at 12.05 and my curfew was 12 o'clock, you didn't let me get away with it. So ultimately it was a revenge play by you. No, it was completely inadvertent. And, of course, I recused myself from anything involving my dad, but I had to establish the policy and I had to stick with it. You recently wrote a piece for the Washington Post where you said that you believe that intellectual fearlessness is more important than being smart. What did you mean by that? Well, I had been reading all of these books about the financial crisis. I've read, of course, 13 Bankers and The Big Short and Clash of the Titans, the new Greg Farrell book, and the new book by Jonah Serra and Bethany McClain.

And it really seems to me that the problem, just as we were talking about with directors a moment ago, the problem wasn't that they weren't smart. They're very smart. They could all ace an IQ test. The problem was not that they weren't correctly motivated. They all wanted to make money. And the problem wasn't that they weren't experts. They're all really good at math.

They can do compound interest in their heads. The problem was that they didn't have, as I said, sort of intellectual fearlessness as independent judgment. They were all the victims of a great big Emperor's New Clothes phenomenon where everybody just didn't want to look at what was really happening. And I thought it was fascinating in the Michael Lewis book, The Big Short, which I think everybody should read, that the very, very few people who did realize something was wrong were people who had experienced great, shocking, awful tragedy in their lives. And I think that that made them less susceptible to just going along with the crowd. All right, we'll hold it right there for a moment. But up next, more with Nell Minow as we discuss the latest from Disney, as well as a round of buy, sell, or hold.

This is Motley Fool Money. You're listening to an encore presentation of Motley Fool Money. You're listening to Motley Fool Money. We're talking with Nell Minow, co-founder of the Corporate Library and also the movie mom. So let's move over to movies. And I want to read something that Dessin Thompson, a former film critic for The Washington Post, said about you. He said, I've never met anyone in the business who simply enjoys being at a movie so much. Even if it's the hokiest musical, I'm absolutely appalled about 80% of the time.

And then I look over at Nell, and she's just so happy to be there. With that in mind, what's a movie you've seen recently that made you really happy? well unquestionably the movie that made me the happiest this year was a 3d animated film called how to train your dragon i just loved it and this has been the best year in history for animation and for documentaries uh despicable me was great toy story 3 is a masterpiece um even megamind that came out a couple of weeks ago was a terrific movie so those are movies that really, really made me very happy. I got to ask because, you know, I'm picturing you and Destin Thompson, you know, in a theater at a screening together and him just, you know,

rolling his eyes and hating it. Does that ever get flipped? Do you ever find yourself on the other side of that equation where you just absolutely hate a movie that is loved by the majority of critics yes that does happen and uh and you get really really bad emails from people and comments on rotten tomatoes it's a it's rotten tomatoes makes middle school look like it's open to innovation um but yeah i i've hated a couple of films that have won best uh picture oscars i hated million dollar baby do you have a guilty pleasure out there a movie that just got crushed on Rotten Tomatoes and you can't help but love it? I do. I have so many guilty pleasures, but one from this, this is really guilty, one from this summer that nobody liked, but I just enjoyed

the A-Team. What can I tell you? Wow. Yeah, you throw a truck out of an airplane, I mean a tank out of an airplane. I just thought it was a hoot. Wow. So that's, I mean, anyone looking to get a good review out of Nell Minow, there's the secret ingredient right there. Do you have an early favorite for best picture i mean i know we're a few months away from the oscars but is there an early favorite out there for you yeah i'm going to go way way way out on a limb and i'm going to say that a movie i bet you haven't even heard of is going to win the best picture uh it's uh called how do you know i i haven't heard of that and i'm i'm kind of a movie buff okay it stars uh owen wilson uh paul rudd reese witherspoon and uh a little known actor named jack nicholson

and it's written and directed by james l brooks who's had a really good record he did broadcast news the oscars in terms of endearment and as good as it gets so i i think that's and it seems to be a very zeitgeisty movie um it's got a disgraced financial services guy in it and an athlete and i just have a feeling i have a feeling that that one may may take the uh take the oscar i i gotta to say i'm a little thrown by that uh mainly because of owen wilson who i sort of equate with will ferrell like he's he's good at sort of the broad comedies but you know it would be like if you said oh yeah that movie with will ferrell i think it's going to win best picture that's i understand that i understand it's a long shot but uh james l brooks is um is always a good bet

and uh he puts people in his film sometimes that you would not expect all right taking a step back from this year's movies if we're hanging out with the family post Thanksgiving weekend and we want to watch a movie that really captures the essence

of Thanksgiving I have two favorites that are not at all well known that are fantastic Thanksgiving movies now if it's little kids you've got to go with

Miracle on 34th Street but for older people there's a wonderful movie with Katie Holmes called Pieces of April about a family getting together for Thanksgiving

that is absolutely great and then a movie by Gurinder Shaddaa, who did Bend It Like Beckham, that no one saw about four different families on Thanksgiving. I hugely recommend it. It's called What's Cooking? And it stars Julianna Margulies, of course, from The Good Wife, and Kara Sedgwick from The Closer. And it's just, it goes back and forth between the Thanksgiving preparations of four different families from four different ethnicities, and they all come together at the end, and it's just super.

You're listening to Motley Fool Money. We're talking with Nell Minow from the Corporate library and also the movie mom uh now we're going to wrap up with a round of buy seller hold uh since i have uh young daughters i'm i'm pretty much doomed to see this movie it's disney's take on the rapunzel fairy tale buy seller hold tangled that's a strong buy it's terrific i've seen it twice already it's fun and it's fresh and it's not snarky that's what i was worried about i thought it was going to be all postmodern and air quotes and it really isn't it's just terrific great great performances from mandy moore and zachary levi do you mind if i ask why you've seen it twice i liked it wow all right so so great music from alan menken the guy that did the music for

aladdin you know i was expecting it would be more baby boomer rock like in shrek but it's not it's full-on broadway disney princess music and i liked it is it better than the a-team yeah it is better than the 18 and when you go to see the movie just remember the song in the restaurant is the highlight so okay don't fall asleep um in an email to our producer matt you characterize this as a quote very sexy health care romance buy sell or hold love and other drugs that is a superb film that's a strong strong buy uh it's uh written and directed by edward zwick from 30-something and glory and defiance. And as I said, it's an extremely sexy romance

and also makes some very important points about health care. And it will touch your heart. It is a fabulous movie. Colin Firth is getting great reviews for his role in The King's Speech. So buy, sell, or hold an Academy Award for Colin Firth. That's as close to a lock as you're going to get. Wow, really? Yeah, I think he definitely has it.

And I think Geoffrey Rush will get nominated as Best Supporting as well. That's a superb film. Everyone should see it. By the way, let me just rant for one second, because that movie got an R rating from the Motion Picture Association because of one brief scene where, as a vocal exercise, he has to say some naughty words. That's just a shame. And it should definitely have been rated PG-13.

I can't recall if you and I have talked about this before, but there was a documentary out a few years ago about the ratings agency. Yes, this film is not yet rated by Kirby Dick. The documentary really sort of pulls the curtain back on how movies are rated and the people behind the ratings agency. And I hoped at the time when the movie came out that, I don't know, that there was going to be some sort of change or reform in the way movies are rated. It seems, you know, and the King's speech is a good example of that,

it seems like a pretty backwards way of... It's gotten worse. And it is the same people. All of the same people are still there. The film had absolutely no effect on it whatsoever. They are still completely arbitrary. I have had personal dealings with them. I've been on the phone with them and have gotten nowhere.

And until there's a new head of the MPAA, I'm going to start it up again. But until then, there's really not much we can do. But I think they do a shameful job. And I think that one of the most important elements of that movie, which is very entertaining as well as horrifying, this film is not yet rated, is the way that it showed how inconsistent their ratings are, whether it's a studio film or whether it's an independent film, that they really are completely hypocritical about that. Okay, finally, this song is a Thanksgiving classic. Buy, sell, or hold the movie version of Alice's Restaurant.

It's a fine, fine movie. I strongly recommend it. Really? Yeah. I've got to say, I love the song, but I've seen clips of the movie, and it just looks like one of those we're stretching ourselves way too far here kind of efforts. You know, it's not a movie where a lot happens. It's not that kind of movie. But in terms of just creating a mood and some wonderful scenes and some wonderful performances,

you know, just sit back and get your head in the space of the 1960s, six days. And I think you'll find that it's really very touching. So is it better than the A-Team? It's not nearly as action-packed. There are no tanks falling out of airplanes. She is the co-founder of the Corporate Library. She is the movie mom, and she is absolutely one of our favorites here at The Motley Fool. Nell Minow, thanks so much for being here. Thank you. That's it for this week's show. You know, we talked earlier in the show about holiday retail. Well, in the wake of Black Friday on The Motley Fool's website, we're featuring a couple of

articles that highlight retail companies we think are in a good position to benefit, not only from this holiday retail season, but for 2011 and beyond. That's the Motley Fool's website, fool.com. Our engineers are Steve Broido and Gail Añonuevo. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.