Motley Fool Hidden Gems Investing - Spousonomics

Episode Date: August 12, 2016

Alibaba flies higher. Disney delivers. Shake Shack stumbles. And Walmart makes a big buy. Plus, journalist Jenny Anderson talks about her book, Spousonomics: Using Economics to Master Love, Marriage, and Dirty Dishes. Learn more about your ad choices. Visit megaphone.fm/adchoices

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It's the Motley Fool Money radio show. I'm Chris Hill, and joining me in studio this week, for Million Dollar Portfolio, Jason Moser. From MDP and Supernova, Simon Erickson. And from Motley Fool Deep Value, Ron Gross. Good to see you, as always, gentlemen. Hey! We'll dig into the latest earnings from Wall Street. We will revisit one of our favorite interviews. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the week in retail. A lot of companies reporting this week, Ron. Macy's, Kohl's, Nordstrom, JCPenney, all reporting better-than-expected results. Anything in

particular stand out to you? So, that was the theme, better-than-expected results and things improved. And you saw the stocks jump. But it's really important to understand that things are still not good, and it's largely because of ... Amazon. We saw across the board, except for JCPenney, continuing same-store sales declines. A lot of the cases, profits declined, Macy's is closing 100 stores, the street actually liked that, but still, we have difficulty in the department stores. It is interesting to see, though, you mentioned Macy's. Jason, you look at their strategy, they are clearly pursuing a quality over quantity strategy when it comes to their

footprint, and they are doing, I would say, a better-than-average job on selling through other channels. Yeah, I think that makes sense. I think when you look at something like JCPenney, on the other side of the coin, their strategy has become ... I'm trying to figure out what their priority is here, first and foremost. Is it to grow sales, or is it to cut costs? Because they're really focused more on, instead of selling things like apparel, which obviously, there are many more channels to get that, many other places, they're focused more on selling services and ... O' They're back to appliances again. After decades of not selling appliances ...

There's a big relationship with Sephora and makeup that they find is working out. I actually think that's a very good move there, because I think we know from looking at Ulta Cosmetics for the years there, there is a big and growing market opportunity there. But yeah, it's been an amazing time to watch all of these retailers that we grew up with just witnessing so many challenges. It's interesting to see the Macy's stock really pop nicely on the closing of 100 stores, which is about 15% of their store base. Normally, you would say, uh-oh, this company is in trouble.

you'd maybe expect the stock to sell off, it's counterintuitive, but it makes sense to close the underperforming stores, you free up capital to reinvest in the good stores, maybe even return some capital to shareholders, pay down debt, and also it frees up some valuable real estate that they can then sell, monetize that, and bring in additional capital. Good point. I think that it's kind of difficult for Macy's right now, because they've gotten their customer base used to doing these promotional events, these discounts on a lot of the products and apparel that they normally buy. But you look at those apparel makers, the coaches and the Michael Kors of the world, they don't want to dilute their brand down.

They want to keep the premium pricing and stuff. And I think that's hard for a company like Macy's, even though they're closing down stores, too. Last thing, since we haven't really delved into them, Ron. Nordstrom, I know that's a company that you've followed in the past. Where are they right now? It seems like they might be pulling out of their recent struggles that they've had. The full-price stores continue to struggle, but there's been improvement. The same-store sales were still negative at about 2.8% for the quarter. That's better than it had been in the past. The strength continues to come from Nordstrom Rack and their Hot Look division.

Those were actually quite strong, so that's keeping the company as a whole relatively okay. It still remains, in my mind, the best experience from all the mall department stores. You mentioned Amazon. Let's talk about the Amazon of China. Shares of Alibaba hitting a 52-week high after first quarter results blew away Wall Street. I say results, Simon, because it is not just the revenue and the profits, it is the growth that Alibaba is seeing across the board. Yeah, no doubt. I like the Amazon of China. Maybe we should call Amazon the Alibaba of the United States. Alibaba's got 434 million people that have bought at least something

on the platform within the last year. And that's up 18% year-over-year. But you just look at that kind of user base and how you can monetize this platform over time, it's going to be huge. O' It already is huge. Huger! What do you think the bigger opportunity is today? If you look at Alibaba, and it's obviously a very big market in China, versus Amazon's foray into India, which I think a lot of us are excited about, just because India's market seems to be, let's just say,

a bit more transparent than perhaps out of China. They're both going to be very, very large. The amount of gross merchandise volume that Alibaba transacts is roughly double, a little bit less than double, of Amazon's size right now. And the interesting thing, I think maybe the biggest growth driver for them, Jason, is actually going to be their cloud computing business. Just like we saw Amazon Web Services build out the infrastructure so that companies don't have to build their own data centers, to just contract Amazon to do it. We saw 156% growth in AliCloud, conveniently named. I like the branding.

That's something that Amazon's doing $3 billion a quarter of. Alibaba did $187 million last quarter. Lots of upside for that one. Well, and if you just look at the growth in mobile transactions, this is yet another company where we've seen legitimate questions in the past being raised. Okay, this is fine, how are they going to do with mobile? And just based on the latest numbers, Simon, Alibaba is just doing fine with mobile. Yeah. 75% of revenue is actually from mobile sources, and that's up about 55% of revenue last year. But China's different, right, Chris? I mean, a lot of people are just now getting onto broadband internet for

the first time, and it's on a mobile device. It's not the transition from PC to mobile like we saw in the U.S. Walmart's trying to get more online, and they did that this week by buying online retailer Jet.com, a cash and stock deal worth $3.3 billion. Jason, we talked about this earlier in the week on our MarketFoolery podcast. They've got the money. They've got about $60 billion in cash and short-term assets. So, in terms of rating the transaction, this is a win for them, I think. Maybe this was an obvious move, but it's still a smart move. I do think it is a smart move. I definitely don't begrudge them doing the deal.

I think they had to do something. I think it's very clear, the trend towards e-commerce, we've talked about it ad nauseum here for probably the past three years now. But I think the one thing for investors to do, don't make the leap that just because Walmart is making this acquisition that it will succeed, that it's a done deal. Just because of their size doesn't imply that. I harken back to Coca-Cola's investment in Keurig, Green Mountain and their new cold machine. We know how that turned out. Hint, not very well. I think that making the acquisition was a smart move. I think there's a lot of hard work to go to actually making it work. I think in this day and age, it's far easier to go

from e-commerce to omnichannel than it is from physical retailer to omnichannel. When we talk about omnichannel, incorporating all of those dynamics of retail into one seamless experience like Macy's is working really hard to do, that's something that Walmart's going to have to try to figure out. The thing about Amazon, the advantage they have there in the Prime model in working with third-party providers, they don't really have to make a lot of money on the items that they sell, because they leverage that into so many other ways that they monetize the business. Walmart doesn't have that dynamic. But with that said, I think it's a deal they had to make. It's going to be interesting to see how this thing shakes

out in the next couple of years. One advantage that Walmart has, and Amazon has this as well, but I would argue that Walmart maybe even has it to a greater degree, is because of their size, because of their footprint, they have pricing power in that, if you are selling anything, and you have the opportunity to sell your wares in Walmart, I think you're going to take that, aren't you, Ron? I think so. I think Walmart has actually a decent online experience as well. I've purchased things a number of times. As some of our listeners may know, I've only actually been in a Walmart

once, but I've shopped online many times. And it's because it's kind of like when you go into a restaurant and you say, can I have a Coke? And they say, well, is Pepsi okay? And you go, yeah, okay. It's like if I go to Amazon first and they don't have what I want or they don't have the price point that I want, then I'll shift over to Walmart and take a look. And it's been successful. You've really only been in one Walmart in your life? I think the point to that, though, is also, you see a lot of the value in what Amazon has done today with the Prime relationship, and growing a rapidly loyal customer base.

I think that's something that Walmart is lacking. I don't know that they can necessarily get there, so they are going to have to compete on pricing, which I think is going to be very difficult for Walmart. Really, Jeff Bezos does view that margin as his opportunity. They'll sell a lot of that retail stuff, either at cost or even at a loss, in order to be able to perpetuate that flywheel that we talk about so much, that prime relationship. Very competitive environment, no question about it. But again, I think it's the right move from Walmart. Whether it shakes out well for them, that remains to be seen. Alright. From retail to skiing, Vail Resorts hitting a new all-time high this week

after buying Whistler Blackcomb in a cash-in-stock deal worth just over $1 billion. They just bought the biggest ski area in Canada, Simon. Clearly, investors like this deal. I think we need to take a field trip to do some investment on-the-ground research. My knees aren't going to hold up, so I'll just be in the ski lodge. I'll join you. Fair enough. Chris, this is a great deal for Vail. Whistler has about 2.7 million visitors every year.

And to put that into perspective, Vail had about 10 million for their core properties the year before. So this is about a 27% increase in terms of visits. And of course, when people go to the resorts, just like you said, they're eating at the restaurants or getting drinks and spending a lot of other money, too. And it's discretionary spend. People aren't looking as closely at prices when they're on vacations, and that's great for a company like Vail. The really interesting thing, I think, from this story is that Vail is trying to focus

more on warm weather activities. They're trying to revamp their existing parks so that you can do things in the summertime, too. It smooths out the seasonality, and you start just expanding the existing properties you have and getting even more and more revenue. And I think that's something that Whistler's done a pretty good job with, too. They've got things like action sports and an indoor water park and even mountain biking and golf. Coming up, if you thought Shake Shack's valuation was too expensive, we've got some good news. Stay right here. This is Motley Fool Money.

Take this job and shove it. I ain't working here no more. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Simon Erickson and Ron Gross. Shake Shack's second quarter profits came in 75% higher than a year ago. Revenue was also higher than expected. They're showing growth, Ron Gross. How come the stock isn't growing? Oh, Chris. It's all about comparable store growth decelerating, and that just can't support the current valuation. Comp sales were plus 4.5% for the quarter. You would normally say, that's not too shabby, but it was 12.9% this time last year, and 9.9% in the first quarter.

So again, clear deceleration. And when you've got a stock trading at a PE of, let's call it, about 100 times, now let's not forget what that means. At current earnings, you would break even in 100 years, that means. Sometimes we don't realize what PE means. If you don't put up the numbers to support that, you're going to get punished in the market, and I think it's appropriate. What is their growth strategy? Because I think we've all been to the Shake Shack that's in D.C. I like the product. They still have, I believe, fewer than 100 locations. Having just sort of made fun of the company a little bit, it seems like they've got a chance to grow their footprint in a big way.

They're actually doing a fine job. It's really a valuation problem here. The stock went public at 21, hit a high of 60. We're back now at 38. But they're growing nicely. Store count went from $71 to $95, just under $100, as you mentioned. And there's plenty of room for growth in the future. You can follow our show on Twitter, at Motley Fool Money is our Twitter handle. Question from Matt in Texas hitting us up on Twitter. Can you gents discuss NVIDIA? The stock is seemingly on a rocket to the moon. What is their competitive advantage? NVIDIA, the graphics chip maker, is one of the drivers behind the growth in gaming that we've seen recently, Simon.

Yeah. And speaking of gaming, my colleague Rob Burnett just sent me a note that we're going to have the East Coast's first virtual reality arcade. They're coming back. I'm just saying, that's kind of awesome. Wanted to drop that out there, too. Is there an actual physical location that I go to, or can I just put on my VR helmet in my home and show up at the arcade? It's kind of like the old-school arcades that had Pac-Man, but now you're in the ... I don't know what's going on. It sounds awesome, I'm just saying. Sorry to totally deflect the question, Matt. NVIDIA is really a neat company. It kind of has the perception of just being a

hardware PC company, but in reality, they're doing a lot of really cool stuff in deep learning. They're very good at using their graphics processing units to recognize images. And so, Facebook is using this in their networks to recognize when you're posting things onto the site, what is this? Amazon's doing the same thing. And of course, we've seen Tesla using it for autonomous cars. It recognizes images. Yes, that's a stop sign. I need to stop, and so on and so forth. But the competitive advantage is that in the software world, you typically have to build things on top of other things. The technology's stacked. And it's those GPUs that NVIDIA has done for years that everyone else is customizing and developing off of. And they've done a great job

with it. We're going to be hearing a lot more about them in the future. Shares of the Walt Disney Company ticking up this week after third quarter profits came in higher than expected. This quarter, Jason, you look at it, the theme parks and the movie studios are really getting it done. Yeah, and they've been getting it done. I think the biggest question for us has always been, it's always revolved around ESPN, exactly what are they going to do in the face of this movement towards cord cutting and over-the-top television. And so, we got a lot to chew on this quarter with the acquisition, or at least taking a stake in BAMTECH, which is a tech

platform that helps distribute some of that sports content, I think Major League Baseball and NHL primarily. It's a big deal. I mean, this is about $1 billion Disney's putting into this venture here. But I think it's a smart move. It's going to give them, I think, at least this first big step into learning how to really leverage the sports content that they have through their ESPN ventures, as well as other probably digital rights they'll continue to be able to acquire as time goes on. We've always had the question, it's not the content, really, it's the distribution that we've always wondered about. I think this is a sign of how they're going to be looking to do this. Figuring out more and

more what people want, where and when they want to watch it, and then being able to charge people accordingly, as opposed to just relying on the easier business model of just charging the cable company a lot of money for this family of ESPN channels, and not really knowing much more than that, what people are going to want to watch. So, I think this is a good step away from linear TV, more towards over-the-top, getting more data on what the consumers want, and ultimately makes a bigger market, and they'll be able to own a little bit more of that bigger market. So, all in all, very encouraging. Sad news for Lululemon Athletica shareholders this week. The company announced that Rota

Pitcher, who may or may not actually exist, is stepping down from the board of directors. This comes less than two weeks after CEO Lauren Pottevin told CNBC that Rota Pitcher was, quote, absolutely staying on the board despite the controversy surrounding her identity and experience. This continues to be the most baffling story I've ever seen in my life. I feel like there's always going to be an asterisk right after her name, because it's like you've got to offer up that disclosure or she may or may not exist. Do you think she said, listen, I've got to go, this is killing me, the scrutiny? Or do you think they said, you've got to go, this scrutiny's killing us?

Well, that's the thing. The scrutiny came from the media, and at no point, it seems Simon, you and I were talking about this during the break. At any point, the company could have released a photo of her attending a board meeting, they could have put her on the phone with a reporter, they could have quashed this at any moment, and they just didn't, which is why it's so baffling to me. And all the research you could do would not really help you. Her educational background, her schools that she supposedly got her degrees from, it's very, very difficult to get anything definitive. We do know that during her time on the board, she did pull in compensation of

close to $2 million. Wendy's latest earnings report wasn't nearly as interesting as what CEO Todd Penegore had to say on a conference call with analysts. Penegore blamed weak results on Donald Trump and Hillary Clinton. Penegore said, quote, whether through elections or global events, people are slightly mindful of an unsettled world, and when caution starts to prevail, they start to hold back on spending. We've got about a minute left. Ron, I'll start with you. Is this the most grasping at straws excuse you've ever heard? It gets up there. We always make fun of retailers using the weather as an excuse, which sometimes is true, but often not. It's just an excuse. This one goes over the top

for me. This is a burger chain. This isn't some big macro-economic business. Nope. Your proposition is all value, all 24 hours of the day, every day of the week, 365 of them a year. It's one thing that this is like a Rinker restaurant, like Maggiano's or something, where you get a pay down and leave a tip. This is Wendy's, man. You get like a 99-cent cheeseburger. It kind of reminded me of Steve Jobs back in the Apple days, when the antenna for the iPhone wasn't working properly, and his reason was, well, don't hold it that way. Yeah, you're just not holding it.

All right, Simon Erickson, Jason Moser, Ron Gross, guys, we'll see you a little bit later in the show. All's fair in love and money. Reporter Jenny Anderson is next. Stay right here. You're listening to Motley Fool Money. This episode of Motley Fool Money is brought to you by Rocket Mortgage by Quicken Loans. If you've ever bought a home, you already know how frustrating and time-consuming getting a mortgage can be. Well, Rocket Mortgage brings the mortgage approval process into the 21st century by taking all the complicated, time-consuming parts of applying for a mortgage out of the equation. With Rocket Mortgage, you can easily share your bank statements and pay

stubs at the touch of a button, helping you get approved in minutes for a custom mortgage solution that's been tailored to your own financial situation. And the best part? You can do it all on your phone or tablet. So, if you're looking to refinance your mortgage or you're looking to buy a home, check out Rocket Mortgage today at quickenloans.com slash fool. Equal housing lender, licensed in all 50 states, NMLS, consumeraccess.org, number 3030. welcome back to motley fool money i'm chris hill forget love and romance my guest this week says the key to a happy marriage is economics jenny anderson is an award-winning business reporter

for the new york times and the co-author of spouseonomics using economics to master love marriage and dirty dishes jenny thanks for being here thanks for having me so i've been married for 15 years and you've learned you've never learned as much as you've learned from my book I got to say, there is some amazing stuff in this book, and amazing in a number of ways, not the least of which is the amount of economic research that is grounded in it. This is definitely not one of those squishy books about marriage and how to get in touch with your inner feelings. This is very grounded stuff here.

In a nutshell, how can economics help someone like me who's in year 15 of his marriage? well the book takes a very simple premise that you know economics is the study of the allocation of scarce resources and what is a marriage but a daily waking up and deciding who's going to do what and how are your resources your very limited resources i might add your time your energy your libido your love how are those going to be allocated every day and as far as i can tell like the source of 99 of marriage tension is over that allocation who's going to do what and who's doing what well, and who's not doing what well, and who needs to be nagged, and who needs to be encouraged, and what incentives are going to work.

So the book comes up with, we take 10 principles, both from classical economics, but mostly from behavioral economics, and say, here are some things that are influencing the way you approach things in marriage. So the way you approach the division of labor. Are you doing a 50-50, or is there maybe a better system, like comparative advantage? How you fight. Do you fight like crazy because you're afraid of losing? That's loss aversion.

kicking in, you know, how can you do that better? So you name the subject, I think we have a solution for it, including sex, which of course is a very common topic among married couples. I was going to say, I mean, one of the basic economic principles that I think even someone who is in school in economics knows about is the concept of supply and demand. And for those thinking about picking up a copy of Spousonomics, I will just spot you up with the title of chapter three, supply and demand, or how to have more sex. Right. So we all know the more something costs, the less demand there is for it, right? So we did a randomized survey of people across the country and asked them, do you want to be having more sex? Most of them said yes. Then we said, why aren't

you having more sex? And most of them said, because we're too tired, followed not long afterwards by too busy. So you start from the premise that you would like to be having more sex with your spouse, but you're too tired to do it. So what is the best way to sort of up demand, you need to make it cheaper for yourself, not money, but you know, in terms of expending your time and energy. And it's amazing how often couples can either talk about how much sex they're not having, or complain about how their schedules won't permit it. Or there's a lot of sort of ways we make it expensive for ourselves. And our again, you pointed out this doesn't sound very romantic and this will not sound like a romantic advice but uh you know you got to make

it easy for yourself you know especially if you're in the rush hour of life you know you're managing jobs you're managing children you're managing a lot of things for that moment in your life you need to make it easy maybe you need to schedule it maybe you need to set a goal maybe it needs to be put in the blackberry maybe you know you need to stop hoping that he's going to sense the right moment and be really romantic and you need to just sort of seize the seven minutes in the shower and go with what you've got. But make it cheaper and easier for yourself, and more demand will materialize. The book, every concept we have, we have three case studies. So this is not sort of made up in the abstract. There are couples who do this stuff, and it

actually works for them. And I think this is probably the first book about economics that deals with cheaper, easier sex. So I mean, I think that alone is going to help you sell a lot of books. I hope so. You're listening to Motley Fool Money. My guest is Jenny Anderson, the co-author of Spousonomics, Using Economics to Master Love, Marriage, and Dirty Dishes. One of the things that you write about goes against one of the sort of classic pieces of advice for couples that are about to get married. And the classic advice is, never go to bed angry. And you and your co-author are saying, actually, sometimes you should go to bed angry. Why? Yeah, I think that's pretty bad advice.

That's like the most common sort of bridal party, you know, advice that you're going to get her. The reason is because, and I alluded to this before, loss aversion. When we feel like we're losing, we act irrationally. And we, for stock traders, that means, you know, think Jerome Kevier at Societe Generale, right? He actually said, like, I knew I was down. I had to bet the house. Like, I had to do everything in my power, including risking $7 billion of my bank's capital, to win. You act, you can't see clearly. And that happens when you're fighting with your spouse,

right? You think, in the same survey, 37% of people admitted to us that they continue a fight when they know they're wrong. And another 34% admitted to us that they continue to fight when they can't even remember what it was they were fighting about. So sometimes you're just fighting because you feel like you're losing, right? And so you sort of go into crazy mode. At that moment, it really is much better to go to bed angry and catch your breath and stop hyperventilating for whichever party happens to be hyperventilating and maybe it's both of you and see how you feel in the morning and we're not suggesting sort of suppressing your feelings and never talking about it again but you're not going to get resolution if your goal is you know a happy fruitful marriage

for many many years and the goal of that fight is to resolve the issue then you need to sort of wait until you can breathe to resolve the issue. And again, that is our way of recognizing that it's our loss aversion kicking in. We can sort of force ourselves to take that time out and then reassess when you're thinking a little clearer. And it's amazing. I can tell you from firsthand experience, I'm a very emotional person. A lot of times in the morning, the issue does not seem nearly as monumental as it did at sort of 2 a.m. And you're a little bit better at it. That's one of the things that keeps coming up in the book over and over is this whole notion of cost-benefit analysis and looking at things in your marriage through the lens of, well,

what is the cost here? What is the benefit going to be? And it's like, well, I don't necessarily want to take out the garbage right now, but the cost of it is pretty minimal compared to the benefit of my wife is going to be a whole lot happier. She's going to be exponentially happier than the cost will be for me. Exactly. And again, it sounds very unromantic, and yet there is some real logic to this if you think about it like marriage can be romantic but dishes are not romantic trash is not romantic you know deciding who does the carpool these are not romantic issues and do not require romantic solutions they require practical solutions and it i think we sometimes just hope that because we're married and because we're in love all of these things should be easy

like you would never run a business that way being like well i hope my business partner just knows what i need you know you would assume that like you would sit down and say all right here's how we're going to divide up the tasks. Here's what you're going to do. Here's what I'm going to do. And when it doesn't get done, you would be upset about it. So we're really trying to address the business of marriage because there is a business of marriage. And that's very sad, probably for those, you know, perspective to be married. But it's true. And it doesn't have to be a bad thing. But the less bickering you do about that business, like that, the more time there is for romance and sex and love and hanging out with your kids and doing all the great things

you want to do if you're not sort of, you know, at wit's end arguing about school lunches. You're listening to Motley Fool Money. My guest is Jenny Anderson, the co-author of Spousonomics, Using Economics to Master Love, Marriage, and Dirty Dishes. You and your co-author, Paula, you did a ton of research here on economics. You did interview surveys. You went to seminars. How did you get the idea in the first place? So the idea was my co-author, Paula Schumann. She's a page one editor at the Wall Street Journal, and she and her husband were having, they had been married for, they were in their first year of marriage and they were having a horrible fight. They found the first year of marriage

to be pretty tough. And her husband's a web designer, a very visual guy, and he sort of whipped out a piece of paper and did a graph of their mood over time. And it sort of opened the pathway for them to have a much more rational discussion than they had been having about like, wait, you were really happy then? Like, that's crazy. I was really unhappy then. What was going on and it it diffused a little bit of the emotion and really kind of led to a conversation and it sort of made him laugh just gave him another framework and she started thinking like maybe there's a you know maybe there's a bigger idea here and uh she wanted a co-author who had more of a grounding in economics and finance and so we were set up on a blind date you're set up on a

blind date but what by your publisher uh no no no no not at all we have a mutual friend so i was thinking about writing some books related to the financial crisis. And I was complaining to a colleague, actually, that none of them were sort of jazzing me enough to really want to take the plunge and spend the, you know, the other 15 hours that I'm not working on these issues at home doing them. And he said, oh, I have a friend who had this crazy idea about, you know, sort of marriage and economics. And it really immediately made sense to me. Like, I could see the idea. And I had written about behavioral economics. And it seemed And it seemed like a clever idea, and I could imagine spending all of my free time doing it,

whereas I was having trouble imagining spending all of my free time on some of the other subjects I was contemplating. Now, as you mentioned, both you and Paula are married. How did your husbands feel through this entire process? Like guinea pigs. Unwitting at times. Well, you know, the irony here is that we, in the process of deciding to write a book about marriage while producing three children and having full-time jobs, We definitely put a huge amount of stress on our marriages.

But at the same time, we actually, I think, learned a lot of very useful things. It's very hard to sort of talk about the research and talk about all these great tools and then not take any of your own advice. My husband is actually an editor at the Wall Street Journal as well, and he read the whole book. I can promise you he would never in a million years read any relationship book. So it was very useful to both of us because he read the book, And he actually, I think, found a lot of it very useful, could understand the more analytical framework, but he could also use the book on me. So when I use a horrible tone of voice, I'll say, that's not very spousonomical, you know, and say, well, it seems to me that your loss aversion is kicking in or, you know, is this really comparative advantage at its best?

And, you know, and he's right. There are moments where, I mean, I don't particularly like it being used against me, but there is, you know, there are sort of tools that we can both use now. And I sort of feel like as married people, I'll take any tool I can get. I think marriage for 40 or 50 years is hard, and so you should look for as many tools as can help you get through it. You're listening to Motley Fool Money. My guest is Jenny Anderson, the co-author of Spousonomics, Using Economics to Master Love, Marriage, and Dirty Dishes. Jenny, before we move on to buy, sell, or hold, what is one thing right now that every listener can do to improve their marriage? uh commitment devices better and better inter i'm going to say this and i would probably not

say this to a lot of audiences but you have a smart one so i'm a really smart one so i'm going to go out there with this one better intertemporal decision making whoa whoa whoa i know decisions we make today that have consequences in the future we are procrastinators as human beings we say we're going to save for our retirement we don't we say we're going to exercise we don't we say we're going to eat well we don't we say we're going to be a better husband or wife we don't We need to put in place commitment devices to be the husband or wife that we want to be. So, you know, if you've been talking for the past eight weeks about, you know, eight years about how you want to do more new things together

or you want to go on more date nights together or, you know, you really do want to find a babysitter that you love so that you can get out of the house every once in a while, do it. Find a way to commit to it. Force yourselves to do it. You know, prepay a babysitter. You know, find the best babysitter in the town. Book them every other Saturday night.

So you have to go out. You are forced to plan. Do something to make yourself do some of the things you say you're going to do and you never do. So, you know, as a couple, I've heard a lot of couples say, you know, there's scary research that says that married couples exercise much less than single people. Say, okay, let's say you as a couple have said you want to get into shape. Commit to doing a race where you have to raise money for a good cause. Like, are you really going to screw over all those people who are giving you money to cure cancer? No.

So go do that. If that's what a court requires to get your lazy butt out of bed every Saturday morning to go running, you know, I feel like these commitment devices are a very powerful tool to get us to do things that we want to do, but we just never really get around to doing. I love the idea of prepaying a babysitter. That is brilliant. Especially if it's a babysitter your friends know, because you don't want her ratting you out to your friends as like the couple who come Saturday night really just wants to sit

on the couch at home. Exactly. All right. Let's wrap up with a round of buy, sell, or hold. And we'll start with buy, sell, or hold, the idea that honesty is the best policy. Sell. That was fast. But with a caveat, which is obviously honesty is the basis of a good marriage.

But there is such a thing as too much information. You don't want to overload your partner. High information processing costs. It's hard to process a lot of information. It can paralyze us. You need to be honest. You do not need to tell your partner everything you're thinking about them, especially if those are very negative thoughts.

Buy, sell, or hold separate bank accounts for spouses? I'm going to say hold on that one, and again, there's a caveat. If you have separate bank accounts because you've chosen to have separate bank accounts, totally fine. If you have separate bank accounts because you've never gotten around to having the conversation about whether you should merge them, major sell, because that is active versus passive decision-making. Passive decision-making, it means you didn't make a decision, and so you're just kind of going with that which you had because it's the easiest thing to do.

Not a good idea for anything in your marriage, but certainly not with your money. You need to make an active decision as to what you're going to do with it and how you're going to manage it. And finally, buy, sell, or hold Spousonomics the movie. Buy Spousonomics the TV series. Really? I'm just saying. I'm not saying anything's happening.

I'm just saying if I were going to buy the film or the TV show, I would buy the TV show. TV is hotter than film right now. Okay, because the Freakonomics guys, they got a movie out of it, but Spousonomics, the TV show. All right. Spousonomics, the TV show.

All right, we are going to stay tuned for that. And as I mentioned, there's a whole lot more online at Spousonomics.com. The book is Spousonomics, Using Economics to Master Love, Marriage, and Dirty Dishes. It is a fascinating read. It is a relationship book that guys will actually enjoy and find interesting.

And, oh, yeah, it might actually help you with your marriage. Jenny Anderson, thanks so much for being here. Thanks for having me. Coming up next, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.

Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Simon Erickson, and Ron Gross. Guys, it is that time, time to get to the stocks on our radar. We'll bring in our man Steve Broido from the other side of the glass to hit you with a question. Ron Gross, you're up first. What are you looking at, man? I'm going with the latest recommendation from our Income Investor Newsletter, which piqued my interest. It's Penske Automotive, PAG. They're the nation's second-largest auto dealer. They tilt towards luxury brands like BMW and Mercedes. They acquire small competitors

at good prices and make them more profitable. 15% return on equity, 2.8% yield. My income investor friends think there is 30% upside at this price. Steve Broido, question about Penske? Is it a problem that I don't know them at all? I'm really honest, I don't think I've heard of Penske before. So, you would know the brand names that they sell, such of course BMW and Mercedes. They're the second largest. AutoNation would be the first largest. That name, you may be more familiar with. But it's not that important that you know that name, it's important that

you know the brands. Jason Moser? The Penske File. O' Exactly. I think we all know the Penske File. We all know the Penske File. Yeah, taking a look at Wayfair, earnings season kind of wrapping up here, and Wayfair, ticker W, earnings came out this past week. The stock sold off in a big way, although I think that kind of made sense. The big question, we still

have this on the watch list with Million Dollar Portfolio, and we really like this business. We feel like the moves that they're making in investing a lot in the supply chain to be able to improve convenience, getting the product to the consumer quicker, these are all the right moves. It's just a matter of understanding down the road if they're going to be able to pull back on that cost structure a little bit to realize a bit more profitability in the model. Again, I think you look at this business, a lot of the metrics make a lot of sense, but when we look at the valuation of the stock, the question is, how many customers can they bring in? How many orders are those customers going to place per year? How much

dollar volume is going to be there? Those are all the questions. Ultimately, the one question we're trying to answer that we can't answer yet, are we better off just putting that money we would consider putting in Wayfair in Amazon? As of now, still no answer. Steve, question about Wayfair? What role do brands play in Wayfair regarding, when I go on there, I don't see a lot of name brand stuff that I'm familiar with. Is it just Furniture Maker, AB? I think that's the key to sort of their opportunity right there, Steve, is that when you're shopping for furniture and things like that in your home, you're not so brand-oriented. You're

more looking for something that aesthetically will please you, and so it's less brand-reliant, which in theory could be an advantage for them over the long run. Simon Erickson, what are you looking at this week? Yeah, Chris, got another MDP watchlist one for you. This is Cerner. C-E-R-N is the ticker. They're one of the leaders in the United States electronic healthcare records. So, they're in 20,000 locations. But interestingly, they're in about 30% of large U.S. hospitals. And typically, what happens with EHRs is, once the core provider gets in, they tend to expand services at those locations over time. That's really,

really good for margins and cash flows. And really keeping my eye on this one. Steve, question about Cerner? When do I have to stop filling out that same form 3,000 times every time I go to the doctor? Same 20-page. Can you guys just get on the same page here? Is this going to solve this for me? Yes, that's right. Exactly, Steve.

So, rather than having all that paperwork that sometimes is erroneous and takes a lot of time, you can have an electronic health record through Cerner. Cerner. Cerner. Cerner. Wayfair Penske. Steve, you got one you want to add? I think I'm going Cerner.

My hand is tired from writing, so I'm in. All right. Simon Erickson, Jason Moser, Ron Gross. Guys, thanks for being here. Thank you, Chris. You can check out past episodes of Motley Fool Money and all of the Motley Fool's podcasts. Just go to podcast.fool.com. That's podcast.fool.com or iTunes, Stitcher, Spotify, anywhere you find podcasts.

Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening, and we'll see you next week.