Motley Fool Hidden Gems Investing - The Uncertainty-Fueled Market Correction

Episode Date: March 14, 2025

Companies, investors, and countries are all having a hard time knowing what the future holds. And that makes forecasting hard. (00:21) Jason Moser and Matt Argersinger discuss: - The market’s correction reaction to tariffs, and what higher prices might mean for consumers that are already spending less. - The market’s questions around Tesla’s tough start to 2025, slipping european sales, and Elon Musk. - Earnings from Adobe, Vail, and Docusign. (19:22) Macro-focused investor Richard Bernstein walks Ricky Mulvey through the big picture he’s seeing, and how tariffs, trade uncertainty, and how it all flows into what we’ve seen in the stock market over the past few weeks. (32:51) Jason and Matt break down where they turn to celebrate Pi Day and two stocks on their radar: Ansys and Starbucks. Stocks discussed: TSLA, ADBE, MTN, DOCU, ANSS, SBUX Host: Dylan Lewis Guests: Jason Moser, Matt Argersinger, Richard Bernstein, Ricky Mulvey Engineers: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

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It's the Motley Fool Money radio show. I'm Dylan Lewis. Joining me over the airwaves, Motley Fool senior analysts Jason Moser and Matt Argersinger. Fools, wonderful to have you both here. Yes, sir. This week, we've got our take on the big macro and also some perspective from someone who specializes in working it into his investment view. We've also got earnings from Adobe and, of course, stocks on our radar. Fools, this is one of those weeks where I think pretty much all investors can agree on the headline and the main story on the street. S&P 500 officially entering correction territory this week, down 10% over the past month. The more growth-oriented NASDAQ down

even more. Matt, on the one hand, market is back to where it was in September of last year. On the other, we are in a very different economic reality now than we were then. A lot more concerns about tariffs and the global economic picture. Yes, for sure, Dylan. But can Dan first cue the applause track? Because look, guys, we corrected. Like you said, the S&P 500 is officially, Dylan, down 10%. See, we had it wrong all along. We needed to be down 10%. That's the quote correct price. This is just me ranting. I've never liked the term correction. It feels like saying the market is wrong. It was wrong and now it's correct. But let's talk about this quote, correction. Stock market is down 10%, as you mentioned. But a few interesting statistics

here. This is courtesy of Bloomberg Research. It took only 16 trading days, guys, 16 trading days for stocks to fall 10%. That, according to Bloomberg, is the seventh fastest drop in the last 95 years. I don't know how many 10% pullbacks we've had in 95 years, but I'm sure we've had a lot. So that seems pretty fast. And most interesting, though, I think is since 1965, so that's 60 years, non-recession corrections, which I assume we're in, and I emphasize non-recession corrections have averaged a 16% drawdown. So we might still have room to fall. But recession corrections, so those markets that have come or been accompanied by an economic downturn, fall an average of 36%. So I'm just saying to investors out there, if you're looking for

opportunities in the market, you always should be, that's great, especially when the market is falling like this, but realize there might be more to fall if there's an economic fallout from everything that's going on. Jason, so much of what we are seeing in the stock market seems like a reflection on businesses and countries even really having a hard time being able to look out and forecast effectively, anticipate effectively what will be happening and what they need to be able to procure, what their costs are going to look like, so many of those things. Basically, long way of saying uncertainty driving a lot of this. Yeah, I think that's right. I mean, I think waking up every day to a new headline, nobody knows really what's going on, right? I mean, tariffs

on, tariffs off. Where do we stand on this sort of doge effort in maximizing efficiencies? And what will the legal system allow in regard to that? I mean, this is obviously an administration that is going in here full throttle. It's interesting to think about, you know, President Trump, I think he sees the market as a real measuring stick for his performance, right? That's common knowledge. I think we all kind of know that. I mean, so this is kind of a question of like, is this just short-term pain for more long-term gain? And we just don't know. The only answer to that question really is going to be through time. But I think Maddie's points there in regard to recessionary corrections is really noteworthy. Because when you think about right

now, we've got the Atlanta Fed projecting that this first quarter GDP is going to contract somewhere in the neighborhood of around 2.5%. That's the going money right now, at least. Now, we'll have to see if that actually is the case. But if that is the case, then we have to really start focusing on Q2. Because if those numbers come in for Q1, like Bon Jovi said, we're halfway there, right? I mean, now all of a sudden, we start talking about a recession if that contraction continues. And it's reasonable to at least ponder that that could be the case, right? I mean, we've got that University of Michigan's Consumer Sentiment Index, I mean, what, 57.9, down from 64.7. I mean, that's amazing, right? That's a big...

And it's the third month in a row, Jason, that that index has come down. Yeah. And then you look at, there's a poll of 220 CEOs by Chief Executive Magazine. It was just fielded here at the beginning of the month. And they saw that the outlook for business conditions over the next 12 months fell to the lowest level since November of 2012. Add on to that, I mean, sort of the unemployment picture. I mean, unemployment claims filed in D.C., Virginia, and Maryland here alone were up 49% just last week. Now, that's understandable given all of these job cuts and whatnot. But it just all leads to a picture of, as you said, Dylan, a lot of uncertainty, which is just keeping investors really white-knuckling a lot of this right now.

The escalating tariff story, a story in and of itself, but it also factors into this much broader one that we've been following for a while. Can the consumer hold up? Near-term tariffs mean very likely higher costs being passed along to consumers. Matt, we have observed a tightening of the wallets. What's your read on spending right now? Right. It's weakening. And JMO mentioned the Consumer Sentiment Index, which is low. I think it comes down to, yeah, our economy here in the U.S. is driven by consumer spending. And if you look at comments out of Delta, which warned of weaker demand for travel. Walmart CEO Doug McMillan was out saying, quote, budget pressured customers and stress behaviors among their customer base. McDonald's saying they're having

a sluggish year. Dollar General, we heard from them that things are kind of bad. Costco, even Costco last week talked about kind of consumer shipping to lower cost food items. So there's just, and maybe those are affecting poor customers harder, but look, if the stock market falls further, you might even start, you know, start worrying about the wealth effect as well to higher spenders. And so bottom line, if the consumer continues to weaken, then we're likely heading toward a more dire scenario for the market, the more 36% drop that I talked about than this sort of vanilla 10 or mid-teens drop. So this could be the 2022 scenario all over again. Jason, you brought up the government efficiency

initiatives. Wanted to spend a little time talking about Tesla and Elon Musk. One of the worst performers in the S&P 500 year to date, shares down 35%, down almost 50% from 2024 post-election highs. And Musk behavior front and center, his ties to the Trump administration and government cuts have sparked a lot of backlash. Also seems that the Tesla brand is now in the realm of divisive politics, and that may be affecting some European Tesla sales. Yeah, I mean, certainly I mean, the sentiment on Tesla sure has shifted. Now, I mean, that's not uncommon, right? This has been a very polarizing company in stock and now obviously a very polarizing leader. But we're seeing a lot of price cuts from investment banks across the board, right? JP Morgan, Wells Fargo,

a lot of folks piling on right now. And you have to ask yourself the question, like, why is that happening? Is it because of Musk's political involvement? Is it because of a sort of stale lineup of vehicles? Is it because of competition? I think it's kind of a combination of all of it. But I mean, when you look at the numbers, I mean, across the globe, it does really look like they are seeing some serious declines. I mean, last month in Australia, 71% decline in sales. You look at Polestar. Now, it's not just Tesla. Polestar also saw a decline of 11%. But geez, 71 to 11? Come on. February, total in Germany fell 76%, right? Despite overall EV sales rising about 31%. Saw Tesla sales decline more than 40% year over year in Norway, Denmark, and Sweden.

26% slide in France. In China, much the same. To me, it'll be interesting to see because I think a big near-term catalyst for Tesla would be the vehicle refresh that's coming up. But that, I think, is really going to tell us kind of how people feel about the brand, about Musk and his involvement. And I think that he's rubbing a lot of people the wrong way. It makes me think of an example. I'm going to refer back to John Mackey, right? Former CEO of Whole Foods. He's on our board here at The Motley Fool. Wonderful guy. I always enjoy talking to him. You learn so much from him. And I remember years ago, he was talking to the investing team. And he made the point, he was like, you know, I don't try to get out and espouse my political

views as a leader of a company. It's like, because if I do that, I know I'm alienating immediately like half of my customer base. And obviously, that doesn't make for good business. It feels like Musk is kind of taking the other side of the coin on that bet there. And we're seeing some near-term results here that are obviously causing some trouble for the company. All right, coming up after the break, we've got earnings updates from Adobe, DocuSign, and the story on the slopes with Veil. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Dylan Lewis here on air with Jason Moser and Matt Argersinger. We have a couple of sharp earnings reactions to wade through for the week.

Jason, Adobe posted numbers that beat estimates on the top and bottom line. Stock is down 10%. Walk me through this one. Yeah, it's an interesting reaction, given the actual report. It was a good quarter. I think Adobe is a bit underestimated at this point regarding the AI narrative, and that is driving a lot of this. I mean, it's absolutely a very competitive space. Many, many options. And so, they'll need to deliver. But the company is not sitting still. That said, I think the tools that they're putting out there, while powerful, and I've dabbled with them. So, I mean, don't get me wrong. They're going to need to get better. And I'm sure they will. But I think we're going to see that around the AI content space in general.

But getting to the numbers, I mean, it was $5.71 billion in revenue. That was a revenue growth of of 11% from a year ago. Gap earnings per share, $4.14. Non-gap earnings per share, $5.08. That's up 13% from a year ago. And they exited the quarter with $17.63 billion of digital media annualized recurring revenue. And that grew 12.6% from a year ago. So it's not like this company isn't growing. It absolutely is. But as is often the case, it's all about the future. And I think the market maybe is a little bit concerned in regard to the forecast there. Maybe just was expecting a little bit more. And looking at that, they're talking about earnings per share they're guiding for here, gap earnings per share they're guiding for $15.95 at the midpoint. Now, that

would represent 30% earnings growth from the year ago. Again, talking about a company that's growing here. And if you look at the way that the market reacted to this stock today, now it's recovered a little bit, but it basically puts the stock at around 24 times forward earnings. I mean, that seems like a pretty good deal for a business like this. In the call, Firefly, getting a lot of attention there, their new AI-driven product there is mentioned 48 times in the call. That's their generative AI product that ultimately generates images, audio, now video and again like i said i dabbled around it it's pretty cool it's it's it's neat stuff but it does need to improve and again i'm sure it will but they they offer so many different tiers

with that service ranging from basically a freemium at zero dollars to something that you know runs 200 per month so i think having a number of different subscription tiers will be very helpful for them and it just sort of anecdotally you know i talk with austin morgan he's in our multimedia department here at The Fool. He always really raves about how Adobe's tools are working and the developments they're making with it. He really likes it, says that the tools they're building into their products are great. Next week is Adobe Summit. That's their flagship digital experience conference. We'll get a little bit more information on their iterations and developments there. That'll be something worth paying attention to.

Switching gears and checking in on the slopes, Matt, you checked in on Vail Resorts in their report this week. What'd you see? Well, I hate to say this, but it's been pretty much a disaster for Vail over the last few years, if I have to be candid. They expanded too fast. I think lift lines have been too crowded. The skier experience has not been great. There was a ski patrol strike at Park City this past season, which wasn't a great reflection on the business. Management also bought back billions of shares over the last few years, really at the worst possible times. And that's capital they could really use right now. And really, three of the last four ski seasons have not been great weather-wise.

So just a storm of bad news for Vail Resorts. That's why the stock is at multi-year lows. I do think we might begin to the bottom of the slope here for the stock, though, Dylan. The recent results were okay. If you look at season-to-date skier visits, we're down 2.5%. But lift ticket revenue up 4%. Ski school dining revenue also up nicely. And then pre-tax operating profits were up almost 8%.

But once again, as they do almost every year, they're raising the price of the Epic Pass, a 7% increase from last year's price going to $1,051. And that's just the launch price, by the way. So that's a big jump in one year. But if you look, the Epic Pass actually has only increased by about 1% annually over the last five years. That's well below inflation. So this was kind of due for a big jump. And will that 7% increase or sorry, affect demand? I don't think so. It hasn't in the past. We'll know more as the year goes on. And I think management's doing an okay job now, improving efficiencies, improving wait times. They made a lot of capital investments. There are only so many great mountains out there.

Vail happens to own a lot of them. And so the stock is down. You're getting a 5.5% dividend yield today. Multiple is not that expensive. I'm not calling a bottom here, but I do think we might be in a turnaround for the stock from this price. Yeah, Matt, I was going to say, the stock chart for Vail over the last five years looks a lot more like something I would like to ride down as a skier or as a snowboarder than the ride I'd like as an investor. But I think that 5%, I think 5.5% yield is starting to look pretty attractive to a lot of people because of that decline. Do you feel good about the sustainability of that dividend? Well, they do have a lot of debt and the cash flows are under pressure right now. I think

management's going to do whatever they can to defend the dividend, but they really need a good ski season. They need the rest of this season to be good and they need a good 2025, 2026 season. This feels like a good comparable to Disney, right? Disney just raising those park prices every year, seemingly without fail. And Vail seems to be doing the same thing there. But do you feel like they can kind of keep on doing that? I mean, is there going to be a point where they just kind of have to back off a little bit? I think there's pricing power there. And the Epic Pass, as expensive as it is, is lower than the Icon Pass and other comparable ski passes. And it's the biggest one in terms of ski resort portfolio. So,

I think the demand is going to stay. All right. In a relatively bleak week for the market, DocuSign giving some investors, myself included, a couple of reasons to be happy with their report. Jason, this looked like a pretty strong earnings result. Boy, howdy. I'm right there with you, Dylan. As a shareholder, this is a good week. Shares are just really taking off on this report. I think a lot of this, the company continues to generate actually really strong cash flow. I think that's going to continue as they continue to grow of the top line. And this quarter showed that there are signs of returning to that top line growth. They saw revenue of $776.3 million. It was up 9%. They also saw billings up,

encouragingly, 11%. NOMGAP earnings per share, $0.86. That compared to $0.76 from a year ago. Something I found in the call that I think is really encouraging, the number of large customers spending over $300,000 annually with DocuSign grew both year over year and quarter over quarter. They now have 1,131 of those customers. And that's up from just 1,075 from a year ago. It was their strongest quarter of that large customer growth in two years. And finally, the dollar net retention rate ticked up slightly to 101%. And that's coming off of historic lows of 98% just back in the fourth quarter of fiscal 2024. I don't want to say he's a new CEO. He's been there for a little while now. But Alan Tegason said the company has started to

turn the corner on the core business and they've become much more efficient. And I think the market's very encouraged by that. And then an acquisition they made mid-2024, a company called Lexion has added a lot of AI functionality to their agreement platform. We know, Dylan, it's all about AI these days. On that efficiency note, Jason, for the full year, DocuSign reporting over a billion in net income. Don't be fooled too much by that. Some of that is some income tax provisions flowing their way through. But on an operating basis, they have gone up 6X operating income. Seems like a lot of the efforts that they are doing to scale their business and be a little bit more efficient paying off for investors. Well, Dylan, profitability is

a very good thing, and we always love to see it. Jason, Matt, we're going to hear a little bit more from you guys in a bit. Up next, we get another perspective on the macro picture, including the details on tariffs, America's trade deficit, and the cocktail of how it all plays into the stock market. Stay right here. Bill Sink, tomato for money. Ooh, baby, can I have your smile? I'm still delivered, I'm yours. And that time I went and said goodbye. Now I'm back and not ashamed to cry.

Ooh, baby, can I have your smile? I'm still delivered, I'm yours. Here I am, baby. Welcome back to Motley Fool Money. I'm Dylan Lewis. Some topics deserve a deeper dive. With the tariff swings and market volatility this week, we dialed up Richard Bernstein. He oversees a firm focused on macroeconomic top-down analysis.

In other words, he's got the data on trade and what tariffs spell for economies and consumers. Bernstein and my colleague Ricky Mulvey talked about the relationship between tariffs, trade uncertainty, and how it all flows into what we've seen in the stock market over the past few weeks. We got a trade war brewing. We got a trade war game of chicken. maybe a full-out war, maybe a negotiation. How has this brewing trade spat changed your process, if at all, at Richard Bernstein Advisors? Yeah. So, you know, I think, Ricky, the first

thing we have to kind of understand is that the news flow is totally out of control right now. I mean, 25 years ago, legit, 25 years ago, I wrote a book that was called Navigate the Noise, investing in the new age of media and hype. That was 25 years ago. It's clearly more applicable today than it was 25 years ago. But the point of the book was that there's always going to be this news flow. And a true investor is going to try to ignore that, that we know that there are certain rules of investing, ways to build wealth, and trying to react to the day-to-day, minute-by-minute gyrations is really a loser's game. And I think it's very important. I think if somebody tries to keep up with the news flow today, you're going to be ready for a rubber padded room.

I just think it's insane. So that's number one. Number two is that I think what's happening in this news flow right now is not that it's good news or bad news, right? The politics tends to overwhelm everything. Everybody has to remember we're investors, we're not politicians. And so what we want is we want clear information. Whether the policy we agree with or don't agree with is really immaterial. Nobody's calling us up and asking us. But we need clear and consistent information so we can make investment decisions. I think that's the big issue that's going on right now is that whether it's the trade war, whether it's employment policies, you name it, it's changing every 10 minutes. And I think that's very hurtful for the markets overall. So then what are

the storylines you're paying attention to? Because I understand the news is changing extraordinarily fast right now, but it seems we are entering a period of deglobalization. If tax cuts continue to pass, that's going to affect corporate profits. And at the same time, you're starting to see companies, including Delta Airlines, saying this macro uncertainty is leading us to cut basically our revenue and profit forecasts. So I understand the headlines create a lot of noise, but there is meaning there. How are you separating that? Absolutely. So I think take what you just said, Ricky, and kind of put it into a little longer-term lens, right? So, you mentioned Delta. I'm not saying anything positive or negative about that particular

company. But, you know, many companies now are having a lot of trouble forecasting their fundamentals. More uncertainty, right? I mean, what you forecasted yesterday may be completely different today. That's uncertainty. Number two, you know, if you think about trade and everything else that's going on there. I mean, trade regulation is changing within the day, right? So how, if you're an importer or an exporter or you have a supply chain, how you're keeping up with that, I have no idea. So what you have to do is you have to say, look, there are forces out there. Like you mentioned, deglobalization. One of our main macroeconomic themes is deglobalization. And the combination right now of the fact that we're going through a period of deglobalization

at a point in time where the United States has a massive and ever-growing trade deficit. That is a terrible combination for the U.S. economy. And what we're trying to do is we're trying to look for ways to invest to take advantage of that. In other words, we do think the capital markets are going to be smart enough to allocate capital to where it's actually needed within the economy. So, you've got to look at these themes. You have to kind of work out what's the symptom? Maybe trade, you know, a tweet on trade versus what's the actual issue, which is deglobalization. So let's stay on deglobalization because your take is that it is disastrous for U.S. companies. The other side of that argument would say what we're actually doing is we're

encouraging these great big companies to set up shop and create jobs in the United States. And this is actually going to be wonderful for the U.S. economy. And at the same time, these tariffs, these bills we're placing, this is like charging foreign countries a premium to access a premium market the same way that you would pay for box seats at a New York Rangers game in order to get access to those better seats. We're going to do a similar thing for access to this market. And there's going to be a period of transition, but really, it's going to shake out. And over the long term, the U.S. stock market will be fine. That may not be my personal opinion, but I'm trying to steel man the other side of your plan. Yeah, yeah, yeah, absolutely. And as I can tell

by what you just said, you can probably tell I have a Rangers jersey behind me, that I am a season ticket holder. So you could argue that tariffs can be an effective way to change the economy if, and this is the big if, if there is underutilized domestic production. The problem is in the United States and the reason we have this monster trade deficit is we don't have production. We have bragged for decades now how we are a service-oriented economy and not a production-oriented economy. We're now feeling the other side of that, right? If you want to build a steel plant, if you want to build an aluminum plant, if you want to build a refinery, anything like that, this takes years to do. You put a tariff in, everybody has this notion, oh,

well, that'll affect deployment next quarter or two quarters from now. No, it doesn't work that quickly. In the meantime, what happens when you have this massive trade deficit is that you stick it to the consumer. Here's a way to think about it, right? Is anything you are wearing right now, Ricky, is anything you are wearing made in the United States? My jeans say American Eagle on them, but I'm not entirely sure. Yeah, I guarantee you they're not made in the United States. And if they are manufactured in the United States and kind of sewn in the United States, the material is not from the United States. And that makes sense, because in the last 30 years or 40 years, the United States has lost between two-thirds and 90% of our textile manufacturing capacity,

depending on how you measure it, how you define textiles and all that kind of stuff. That's why I gave you the range. So if there's a 15% tariff put on clothes, we have a pretty simple choice. We can run around naked, or we can pay 15% more for clothes. We have no choice. There is no domestic substitution to take that place. Will there be in five years? Will there be in 10 years? Maybe. But in the meantime, there's no domestic substitution. So tariffs immediately stick it to the consumer. You have a blog post on your site from back in February titled, Historically Confident Investors Meet a Historically Uncertain World. And there's a claim that investors risk-taking during the technology bubble in 98, 99 seems small in

comparison to today's aggressive portfolio positioning. We think of the tech bubble as a time where people got way too excited about the internet in terms of companies that did not have revenue in some cases and where profits were way far out. Today's investors were in a lot of MAG7 stocks, which are dominant, which do make a profit. Why is it so much more aggressive now than it was more than 20 years ago? A couple of things. Number one, there is this notion that the tech bubble in 98, 99, 2000 was just like pets.com. It was all these silly companies that had no real purpose and didn't make any money. That's not really quite true. There were a lot of big companies that took part in that bubble big time, and their stocks

suffered dramatically. Again, not endorsing the stock in any way, don't misunderstand the point, But IBM, kind of a big company that had a lot of cash flow in 99-2000, was caught up in that. GE was caught up in it. Cisco was a smaller company than it is today, but had a lot of cash flow back then. Hewlett-Packard would be another one, right? I mean, there were a lot of big companies back then as well. It wasn't all pets.com. So I don't think we should say, oh, wow, these are the biggest and the best,

and therefore we can't have a tech bubble. Well, in the tech bubble, the biggest and the best were in the tech bubble as well. It wasn't as exciting, admittedly, versus something like Pets.com, but it was very meaningful and had a major impact on the market. Second thing I would point out in terms of investors' willingness to take risks. So, there's a number of things that we look at for this, but there's two in particular that we pointed to. One is the conference board's consumer confidence survey.

I'm sure everybody knows the conference board. They go out every month. they survey individual households for all kinds of different questions to say, are you confident about the economy or not? One of the questions in that survey is, will the stock market be higher in 12 months? And at the end of January, that was the highest it had ever been in the 30 or 40 year history of the consumer confidence survey. And it was much higher than it was during the tech bubble. So people are more confident today that the stock market is a good place to be than they were during even the tech bubble. That's number one.

Number two is Bank of America keeps track of private client portfolio statistics. And one of the statistics they keep is the equity beta of the private client portfolio, of private clients' portfolios overall. So this is tens, if not hundreds of thousands of portfolios in aggregate. And one of the things they monitor is the equity beta of the overall holdings of the overall private client universe. And at the beginning of the bull market in 2009, private client equity beta was 0.75, right? One being kind of equal risk to the market as a whole.

It was 0.75. And I'm sure a lot of people remember after the global financial crisis, people, you know, equity investors were under their desk in the fetal position. Nobody wanted equities. It was bonds, bonds, bonds. And if you twisted people's arms, maybe you could get them to talk about large cap, high quality dividend paying stocks. Well, we started writing about the equity beta, I don't know, a year and a half ago or so, when I got up to about 1.2. We said, huh, this is kind of interesting. They were very risk-averse. Now they seem to be equally risk-taking. That 1.2 went to 1.4, and the 1.4 at the end of January

was an absolutely mind-boggling 1.7. That is just a massive amount of equity risk that people are taking. Now, you know and I know what's going on here. This is the concentration of the market, how nobody wants diversification. Everybody has said to me, oh, diversification? You mean diversification. Exactly. That's that 1.7 beta talking to us and telling us that people don't want the basic building blocks of building wealth anymore. They want risk. And there it is. It's that 1.7 beta. So that's interesting. OK, you could say, well, yeah, why not? Why not take a lot of risk. Well, that's juxtaposed versus this historically uncertain environment, which is now kind of punching people in the face. You know, if you look at things like the NFIB small business

survey, you'll see that small businesses consider this the most uncertain environment in the, I don't know, 40, 50-year history of the survey. If you look at the academic measures of trade uncertainty, I'm sure nobody will be surprised to hear that this has hit an all-time record, eclipsed by a ton the uncertainty we saw in the first Trump administration. By the way, before that, before the first Trump administration, the other time you saw trade uncertainty was in the early 90s at the beginning of NAFTA. I would argue that was the beginning of this globalization period, the real period of globalization. And that was equally as uncertain, right? Nobody, what is globalization going to do? Oh, no, you know, we don't really know. And then that calmed

down for an extended period of time. And then with the first Trump administration, we saw it pop up and now it's like, you know, skyrocketed compared to that. I'm sure nobody's, you know, surprised to hear that. But you combine this incredibly uncertain environment with this incredibly certain investor base. That's why you're getting volatility now, I would argue, is that that's, you know, the uncertainty is winning and people are revaluing equities. They're requiring a higher risk premium for equities. The more uncertainty we get, the more we should expect this revaluation to occur. Listeners, you can catch the latest market musings from Richard Bernstein and company over on X at RB Advisors. Coming up next, Jason Moser and Matt Argersinger are back with me to

talk about the stocks and other things on their radar this week. Stay right here. You're listening to 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 anything based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. The Motley Fool only picks products it'd personally recommend to friends like you. I'm Dylan Lewis, joined again by Matt Argersinger and Jason Moser. And Fools, it is March 14th, aka Pi Day. And I appreciate you

guys both taking time away from the mathematical festivities to join me on the show. We may not be the ones focusing on algebra, calculus, all of that type of stuff. That's what the calculators are for. It doesn't mean we're not going to celebrate. Big pizza getting in on the Pi Day celebrations. Papa John's, Pizza Hut, Domino's, all with promos to help consumers celebrate. Nate, if you're ordering from one of those big chains, Jason, which one are you going to? You know, I can't even go to those big chains. I'm not going to go there, okay? I have very strong feelings when it comes to pizza.

And I'm going to tell you, first and foremost, the best pizza is the pizza that I make here in my own house. I've been working for years on crafting this. I've got a dough recipe, a sauce recipe, and it is delightful. It's delightful. But if I've got to go chain, you know, I'm going to actually go a little bit of a different direction here. There is a chain. there's one of these restaurants in downtown Alexandria. It's called Emmy Squared. So if you like Detroit style pizza, and I've kind of gotten turned on to this stuff, that is a wonderful place

to give a try there. That big, thick, deep crust with the cheese all around and the heavy sauce. Emmy Squared. Give it a shot, guys. You're local. Matt, are you going to go from one of the big three or like Jason, are you going to go off menu here? I'm going off menu too, sadly. And I'm going to call out, this is crazy, I'm calling out a frozen pizza brand, which is Urban Pie, which we get from Whole Foods now and then or other grocery stores. It's awesome. I don't know. It's so good. You put it in the oven, 15 minutes later, you have the most delicious thin crust pizza you can imagine, Urban Pie. Jason, for the folks who maybe want to make a pizza at home and celebrate on their own, any suggestions on how to get good pizza dough? Well, pizza dough, you got to make

it on your own, right? Keep it simple. Follow those Neapolitan-style sort of recipes there. Don't add too much to it. But I think the key to a good crust, just make sure you have a pizza stone for your oven, unless you've got a pizza oven in your backyard, which I don't yet, but I'm considering making that investment. That's a life goal. We all want one. Yeah. All right, let's get over to stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Matt, you're up first. What are you looking at this week? Well, like Brian Nickel, Dylan, I am back to Starbucks, ticker SBUX. To me, this is mostly about valuation. Stock is down about 20% in just the past few weeks,

back below $100. At today's price, I think you can bet on a turnaround and that Nickel will be successful in kind of riding the business and you've got some amount of margin of safety in the stock. I've got an earnings model I'm working from that I think looks pretty reasonable, if not conservative, when it comes to Starbucks' store count, its comp sales, its profit margins. And I think from today's price, I've got a decent shot at double-digit total returns, with the dividend included, if Nichols' efforts are at least moderately successful. And I think he's already taken some nice steps towards solving both the order expediency and the in-store experience. Too early to tell, of course, but I have renewed confidence.

I also like the fact that they raised the dividend 7% last fall. That kept a 14-year annual streak of increases intact. That, to me, was a big signal of confidence that I think the earnings picture is going to improve. I was hoping they simply wouldn't cut the dividend, so to see a 7% raise was nice. The stock yields about 2.5% today. That's more than double the S&P 500, so I kind of like Starbucks right now. Dan, Matty, bringing a household name, one that needs no explanation, one that people might be within 1,000 feet of, good chance, just with their footprint. You got a question or you got a comment on Starbucks, ticker SBUX? Matt, do you go to Starbucks? I do. I do, Dan.

Okay. Well, I guess that settled that. Jason, what are you looking at this week? Matty, by the way, my girls love their simplified menu and absolutely are raving about the new drink lineup. So, love the pick there. I'm going with Ansys, a company we don't really talk a lot about here. Ticker is ANSS. Ansys is a simulation software and services company. They serve end markets, including aerospace, defense, automotive, electronics. You get my gist there. Now, Ansys is a company, there was a deal announced over a year ago that Synopsys is going to acquire Ansys. And this thing is really dragged on due to regulatory concerns. But in what was seen, I think, as one of the biggest hurdles to clear, we saw the UK Competition Markets

Authority, otherwise known as the CMA, they gave the go-ahead after some divestitures from Ansys to give their blessing on this acquisition, and they will not refer it to a more in-depth phase two probe. So, the deal is expected to close sometime here in the first half of the year, which means it should be happening anytime. Now, there are a couple of regulatory hurdles to clear, but it's something that looks like it's going to happen. Dan, a question about ANSYS, ticker A-N-S-S. Not really a question, Dylan, more of a comment. And Ansys, headquartered in Cannonsburg, Pennsylvania, which is so far western Pennsylvania, it might as well be Ohio. But still, that's a cool name for a town.

There you go. Jason, do you have any reactions to that, or are you just going to let that one sit there? Listen, I love the comments more than the questions. You know that. I've been very clear all along. Dan really kind of helping you on your radar, giving you more information about the company. I have to imagine that that might be the one going on Dan's watch list, but I'm not sure. Dan, which one? Hard to bet against coffee, Dylan. hard to bet a can of coffee. You're full of surprises this week. There we go. Jason, Matt, appreciate you guys bringing to Radar Stocks. Dan, appreciate you weighing in. That is going to do it for this week's

Motley Fool Money Radio Show. The show is mixed by Dan Boyd. I'm Dylan Lewis. Thanks for listening. We'll see you next time.