Motley Fool Hidden Gems Investing - Why We Never Try To Time The Market

Episode Date: February 25, 2022

A sudden upswing for stocks late in the week is only the latest reminder of why it's a bad idea to try and time the market. (0:40) Jason Moser and Ron Gross share data that proves staying in the market is much more efficient (and lucrative) for investors than jumping in and out, and discuss: - Etsy increasing their seller transaction fee - Block's transaction revenue growth - Home Depot and Lowe's getting different reactions from similar 4th-quarter reports - The latest from Beyond Meat, Mercadolibre, Fulgent Genetics, and Booking Holdings (19:20) Chief Investment Officer Andy Cross talks with Jeff Green, CEO of The Trade Desk. (32:00) Jason and Ron answer a listener's question about how to build a portfolio. Jason's radar stock is Zoom Video and Ron unveils his "Resilient Basket" of stocks! (Costco, Disney, Domino's Pizza, Home Depot, Microsoft, Target) Got a question about stocks, industries, or trends? Drop as an email [e-mail] Stocks discussed: ETSY, SQ, HD, LOW, BYND, MELI, FLGT, BKNG, TTD, ZM, COST, DIS, DPZ, MSFT, TGT Host: Chris Hill Guests: Jason Moser, Ron Gross, Andy Cross, Jeff Green Engineer: Rick Engdahl, Austin Morgan Learn more about your ad choices. Visit megaphone.fm/adchoices

you're on your way to the office right maybe out walking the dog squeezing in a podcast before your next virtual meeting where we're going there is no virtual only tens of thousands of in-person business meetings and hundreds of world-class fintech leaders waiting to share their ideas where are we going money 2020 the place where money does business search money 2020 for more The urge to time the market is a strong one. It's also the wrong one, which is why we never time the market. Motley Fool Money starts now. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money.

It's the Motley Fool Money radio show. I'm Chris Hill, and I'm joined by Motley Fool senior analysts Jason Moser and Ron Gross. Good to see you, as always, gentlemen. How you doing, Chris? We got the latest headlines from Wall Street. We'll talk with Trade Desk CEO Jeff Green. And as always, we've got a couple of stocks on our radar. But we begin with what was looking like another rough week for investors before a surprising turnaround on Thursday. We're recording this while there are still a few hours left in the trading day on Friday. But as of right now, both the S&P 500 and the NASDAQ are positive for the week. And, Ron, when you consider everything in the market, Russia's invasion of Ukraine,

this is one more reminder of why we never try to time the market. Well, that's exactly right, Chris. And believe me, I wish I could time the market. That would be awesome. I'm not against having superpowers. That would be really cool. But I don't see how it's possible, and I think history shows us that it's not possible. You mentioned the Ukraine conflict. Did anyone out there really predict that the NASDAQ would be up 3% on Thursday, the day the war began, the largest conventional military conflict since World War II? I did not expect the market to be up, let alone up 3%.

Now, there's plenty of theories why it was up. We had some solid economic data, belief that maybe the Fed would tread a little bit more lightly, reports that Russia may come to the negotiating table. My colleague John Rotonti pointed out that maybe buy algorithms kicked in when the NASDAQ hit the 20% decline level. Who really knows? On the other side of the coin, who expected the COVID correction to rebound so quickly? How many people sold out of the market in early 2020 and didn't get back in time for this incredible rebound that happened when vaccines came into play. So my point is, who really knows? And history has proven we do not need to know. Buy great companies, stay in the market, don't trade,

don't have money at risk you need over the next three years. That way you can just sit tight, you can watch it all unfold in front of you without any major financial impact to your life. Yeah, Jason, you and I spent a decent amount of time on Twitter, and it seemed like, particularly on Thursday, so many people were scrambling to come up with how and why this was happening. And fortunately, there were a few people, to Ron's point, making the point on Twitter like, hey, look, nobody knows. Nobody knows why this is happening. And again, this is why we don't time the market. Yep. I feel like every time we run into these stretches, I mean, my mind immediately just goes back to, this is why we invest the way that we do. I know that

sounds like a broken record, but it's important. It matters. We need to keep reiterating it. There are plenty of studies out there that show over the course of decades, where if you exclude the 10 best and the 10 worst days of the market in any given decade, that alone can have a profound impact on your returns. But then think about that from the perspective of how likely are you to be able to predict any of those days? I mean, 10 days within a decade. Think about that for a second. Right. You're not going to be able to do it. And so it really does just all go back to what Ron said. Find great businesses, invest in them, and you can afford to be patient in times like these, understanding that over time, those good businesses will continue to perform,

market dynamics will change as situations change. Let's get to some companies then, and we're going to start with Etsy. Fourth quarter profits were much higher than expected, and the company is raising its seller transaction fee from 5% to 6.5%. A 1.5% increase may not sound like much, Jason, but shareholders appear to love this decision. Ho, ho, ho, indeed. It was a strong holiday quarter for Etsy. This is really what the doctor ordered for this company. Gross merchandise sales for the quarter, $4.2 billion. It was up 16.5% from a year ago that resulted in revenue of $717 million. That was up 16.2%. That gives them a take rate there, 17.1%, which is really what helps guide this business forward. They continue to grow that gross merchandise sales

number and that revenue just continues to follow along because they provide such a valuable service for so many of their merchant customers. I mean, for the year, they pushed through $13.5 billion in gross merchandise sales. Now, most of that was Etsy, but I was really pleasantly surprised to see that Reverb, that acquisition in the music space they made a little while back, that was responsible for $950 million. So, very impressive. They continue to grow the seller base and the buyer Airbase. They now have 7.5 million active sellers, 96.3 million active buyers. A lot of those buyers are repeat buyers. This is a mobile company, 65% mobile gross merchandise sales for the quarter. As you mentioned, raising that seller transaction fee just a little

bit, 5% to 6.5%, but that's going to give them additional capital to reinvest back into their network and continue building out the services and tools that their merchant customers value so much. Transaction revenue for Block rose in the fourth quarter. The company formerly known as Square also highlighted the growth of its cash app as a driver behind strong guidance for the year ahead. It shares a block up more than 20% on Friday run. Strong results, strong rebounds. Stock is still off 60% from its 52-week high. We've got some work to do to get back to those levels, but I think they're on the right track with some good numbers here. Total revenue up 29%. That's pretty strong. Revenue from Bitcoin purchases in the fourth quarter were almost $2

billion. That's almost half of Block's total quarterly sales. But those transactions don't really contribute much to profit. $46 million is in gross profit for the Bitcoin part of that business. So not really a contributor here. If you exclude Bitcoin total revenue, revenue was actually up 51% for the year. So again, a very strong quarter. They processed $46 billion in gross payment volume. That was up 45%. Gross profits were up 47%. If you look at the different parts of the business, as you said, Cash App growing nicely. The gross profit of that business up 37%. With the overall Square ecosystem business, their gross profit up 54%. So things look like they're really on track. The Cash App had 44 million active monthly users at the end of

December. That was up from 40 million. Adjusted EBITDA of 184 million was better than expected. You may recall they made their acquisition of the Buy Now, Pay Later platform after pay. Interestingly, that acquisition was originally valued at $29 billion, but with the drop in Block's share price, it was an all-stock deal, it closed at actually $15 billion versus the $29 billion originally cited. So that's just an interesting note. Better than expected guidance, Cash App looks strong. They expect gross profit growth each quarter for both Cash App and the Square seller business. So that's pretty strong. Stock's at 60 times still. 60 times for a business though, that will put up strong growth numbers into the future. That's still a little pricey

for me. I am a shareholder. It's a little pricey, but we're going to see them grow into that valuation, I think. Big week for the home improvement industry as both Home Depot and Lowe's issued their fourth quarter reports. Both companies saw profits and revenue coming higher than expected, but the reaction was much worse for Home Depot, which had its worst post-earning stock drop in 20 years. Jason, I'm not sure where the pessimism is coming from, but it should not overshadow the fact that Lowe's just continues to thrive under the leadership of CEO Marvin Ellison. Indeed, yeah. I mean, this is a great time to be a company named Lowe's or Home Depot. I wouldn't read too much into that market reaction there regarding Home Depot because that was a strong

quarter as well. But I mean, we've got a tight housing market and we've got an aging housing market. They continue to reiterate that statistic there, that 50% of the homes in the U.S. are over 40 years old. That just means that they're going to require repair and maintenance for a lot of years going forward. That is really both of these companies' bread and butter, so to speak. When you look at the actual numbers, I mean, Lowe's, just tremendous total sales for the quarter, $21.3 billion. That grew modestly from a year ago, but they grew earnings per share 34% You look at the comparable average ticket, that grew 9.4%, while the actual transaction count fell 4.4%. And they actually saw a little gross margin expansion there, encouragingly enough,

and particularly in inflationary times, that can be a little bit difficult to achieve. But it just goes to show the pricing power that they have and the value proposition that they bring to the table, I think. Home Depot, much of the same, really. Sales grew 10.7% for the core, $35.7 billion. And if you look at the actual tickets versus transactions, their comp average ticket grew 12.3%, while comp transactions fell 3.8%. So, very similar dynamic to Lowe's. They grew earnings per share 21%. And actually, Home Depot, interestingly enough, saw a little gross margin compression. Not much, just a modicum, but something just to keep an eye on there as we move into 2022. More after the break, so stay right here.

You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross. Beyond Meat's loss in the fourth quarter was bigger than expected, and revenue was lower than expected. In response, CEO Ethan Brown said he expects Beyond Meat to, quote, substantially moderate the growth of operating expenses. Ron, I'm a little surprised by this, in part because of all of the optimism we've seen recently around their partnership with McDonald's. Yeah, although I'd hate the name McPlant, I must be honest with you. But yes, there's some excitement surrounding McPlant going into 600 U.S. locations. There's actually

some excitement around their joint venture with Kentucky Fried Chicken for the Beyond Fried Chicken Nuggets, which sounds to me personally better than the McPlant. But they're moving in the right direction with respect to these trials, but they don't necessarily mean they will translate into growing revenues and profits in the future. We're still in the very early stages of some of these things. The stock's off 74% from its 52-week high. A lot of excitement in the early days have clearly come off. For the quarter, again, not so great. Nothing to really get so excited about. Fourth quarter sales down 1%. U.S. food service, international channel net revenues were offset by reduced U.S. retail revenue, which fell almost 20%. That's a pretty big number.

That reflects softer demand, five fewer shipping days in the fourth quarter, increased trade discounts. As they said, to a lesser extent, loss of market share, which if you're a Beyond Meat shareholder, I think that comment should be troubling to you. We got to keep an eye on what that actually means. Gross margins got slammed. They're down to 14% from 28%. That's due to product mix, revenue per pound decreases, trade discounts again. The company had increased manufacturing costs. They had to write off some revenue. They ended up losing about $80 million for the quarter. So some things they've got to work through here. Management noted a temporary disruption in U.S. retail growth for its brand and the broader category. So something, again,

to watch out for and continue to watch out for these somewhat interesting and exciting joint ventures. I'm not saying this to make you feel better. You're not the only one who has a problem with the name McPlant. Good to hear. MercadoLibre lost $46 million in the fourth quarter, but investors seemed more focused on the fact that revenue for the Latin American e-commerce company grew more than 60% year over year. Shares of MercadoLibre up 15% this week, Jason. Yeah, they can run into some currency exchange issues there, given their Latin American roots. That's always worth remembering when you consider the bottom line with a business like this. This is one that really does require that Amazon-type mindset for investors. Thinking

probably a bit more long-term than you might with other companies. But if you could do that, I think this is still a very compelling story as Latin America remains one of the fastest-growing e-commerce markets in the world. The numbers, again, like you said, that sales growth, net revenues for the fourth quarter, they were $2.1 billion, which was up 74% on a currency-neutral basis. Gross merchandise volume grew to $8 billion. That was up 32.2% currency-neutral. And again, a company that's really executing on the mobile front, mobile gross merchandise volume was 75.5% of total gross merchandise volume. So, really making a lot of progress on the mobile front. And you can't really talk about MercadoLibre without talking about MercadoPago,

their payment solution. The total payment volume through MercadoPago hit $24.2 billion. That was up 72.8% currency neutral. A lot of that growth really, it's amazing the off-platform growth here, that was up 96.5%. $16.1 billion for the core payment transactions up 69.4%. A business that really continues to execute and do what they say they're going to do. Stock has gotten hammered here recently and it does look like it could be an opportunity for folks willing to stay patient. Fulgen Genetics posted better-than-expected results for the fourth quarter. And while shares fell in after-hours trading, the stock bounced back up on Thursday, along with pretty much everything else in the market.

So, Ron, forget about the stock. What do you see when you look at Fulgen's business? Some context here will probably tell listeners everything they need to know. Fulgen is a genetic testing company whose business got a huge boost from COVID. Post-COVID, things are starting to settle back down to earth, and we'll likely see a reversal to pre-COVID levels of business. So that's very important to understand. The stock's off 50% from its 52-week high, but because of this huge boost, it's actually up 300% still over the last two years. So depending on your term as a shareholder, you're either happy or a little troubled here.

the the the the changing of the business shows up in the numbers total revenue down 15 percent their core testing revenue grew to over 200 percent but that only represents 15 percent of revenue which is 40 million dollars for the quarter um so that's the kind of part of the business that's that will remain once covid subsides and starts to go away even more so so that's that's what we'll be left with that base of business billable tests are up 13 percent from the third quarter, but down 22% year over year. So again, you're seeing some of those trends. They are still profitable, but a lot of those profits, again, are due to this COVID boost that they're seeing. So they expect their core business to grow about 20%. That'll equate to

about $120 million in revenue, but that's against $600 million of total revenue that they actually have, again, because of COVID. So when we look at the stock, when we look at valuations, we have to, I think, remove COVID from the business and say, yes, it's trading only at around eight and a half times, but those earnings are not sustainable. So in reality, it's trading at a much higher valuation than that. Booking Holdings wrapped up its fiscal year with improving profits and revenue. And despite increasing signs of optimism around COVID restrictions being lifted, the parent company of Priceline warned of negative impacts on travel demand. And Jason, do you think they're just being appropriately conservative in their guidance?

I think probably so. I think this was a good quarter. I'd say management, the tone seems cautiously optimistic about the state of the industry. It does feel like we're setting ourselves up for a pretty strong 2022 here in the travel industry, but it's still early, of course. The quarter itself, though, strong performance, gross bookings there, $19 billion. dollars. It was up 160% from a year ago. Room nights booked for the fourth quarter grew 100% from a year ago. And they had strength in airline tickets booked. That was up 116% from a year ago

as well. And they're making a lot of investments in that flight part of the business. You hear them talk a lot about this connected trip mentality, this connected trip sort of strategy that the business is focused on. They made an acquisition recently or acquiring eTravely for their flight booking tech. You also hear them talking more and more about the payment solution that they continue to build out on their platform as well, taking advantage of that payment solution, taking advantage of their mobile presence there. Now, about 30% of gross bookings were processed through their payments platform in the fourth quarter. That was up considerably from just 2019 where it's about 15%. They're making progress there. They continue to buy back shares. That

share counts down 17% over the last five years. It feels like if you are looking for travel exposure, this is one of those companies that you want to have at the top of the list. All right, guys, we'll see you a little bit later in the show. But up next, a conversation with The Trade Desk CEO, Jeff Green. Stay right here. This is Motley Fool Money. Chris Hill. Welcome back to Motley Fool Money, I'm Chris Hill. One of the highlights of our recent investing event for Motley Fool members was a conversation with Jeff Green, CEO of The Trade Desk. Our Chief Investment Officer, Andy Cross, talked with him and started with a question that Green is frequently asked about the business he runs.

first, I want to kick it off with a question that came right from a Motley Fool member. We have a lot of members watching here and some who may not be that familiar with the trade desk and some who may know it very well. So I want to give you the opportunity to explain the trade desk to a nine year old. As if you were talking to a nine year old, how would you break down the trade desk? Yeah. So let me preface by just saying I've historically not done this very well. I know a bunch of family members have asked me this question, which is something like, what exactly do you do and uh as i've heard them then repeat the answer later i've learned that i'm not very good at this so uh nevertheless here it is so if you if you want to buy ads on facebook and

instagram you go to facebook if you want to buy ads on google and youtube you go to google but if you want to buy ads on pretty much everything else on the internet you come to the trade desk uh and where we especially have focused in recent years is on what we call cross device that sort of all starts with television so the ads that you see on paramount plus or on peacock or on any of the ads that you see on on any of your favorite ctv apps hulu are likely coming from the trade desk but also on your phone on your computer all the all the various apps all the various websites that you go to there's a lot of science that goes into figuring out which ad should i put in front of which user and what is that ad worth like how

much is it worth to be on the bottom of the page hoping someone scrolls versus the top of the page figuring out what that is for an advertiser is really hard so we've focused on helping the advertiser make sense of the really complicated ads on the internet so let's talk a little bit about that jeff um when you talk about the various players in the internet um facebook twitter you mentioned a lot of the large players you certainly are a large one um when it comes to serving ads on behalf of your clients who are really agencies and gosh fortune 500 companies brand lots of good consumer brand companies that many of us um use and know um so you're representing them to match them up in a programmatic way i want you just to break that down to explain what that means versus

maybe the way it was 20 years ago when the internet was really just starting with an advertising model Yeah. So, so I mean, if you go back even further pre-internet, you know, you buy an ad that is a billboard or in the middle of the paper, you look at numbers in terms of what is the circulation of the paper, and then you just assume a certain number of them look at the ad. It's not very data-driven. It's about what is the audience and what are our best guesses about how this will, will work out but now there's no barrier to creating new ads so you can almost create infinite supply now it's about figuring out what's really going to be impactful so it's really coming down to math and so it used to be about hunches and you know it was the don drapers of the world

controlling advertising now it's people that are more like uh equities traders and portfolio managers than it is, uh, the Don Drapers of the world and what they're doing just to kind of boil it down to math. There are basically 13 million ad opportunities available every single second. And think of that as an auction. We're going to run an auction that lasts one 10th of one second. And there's 13 million of those every second. If you pick any brand, we represent the majority of the s&p 500 so if you pick any brand whether it's home depot or nike or coca-cola and say okay they need to buy of those 13 million they need to buy let's just pick a number something like 2157 uh which 2157 opportunities are going to have the most impact for them per dollar

and so if it costs more to be at the top of the page than the bottom of the page let's take that into account. If it costs more to be in front of this user than a different user, let's take that into account. If we're trying to gain market share in specific geographies, let's take that into account. So let's bring data and data science into the equation so that marketers can be very intelligent about the way that they spend their money. Because if they just buy kind of a random or just hope they get good stuff, they're going to lose every single time. It has to be data science driven going forward. Yeah. That old solve. I know 50% of my advertising budget is money. I just don't know which 50% or whatever the, the old, the old line about

advertising spending. So you're trying to help these agencies and the consumer brands really from the buy side, that's different than you don't represent. I want to be clear about this. You don't, you're not a publisher. You don't, you don't represent, um, the Washington post or, or, or the Motley Fool, for example, on, on our ads. Um, do you really work with the clients who are out there purchasing advertising space that is going to be shown on these various platforms, be it online web, mobile. And then you mentioned CTV, that's connected TV. I know that's a big initiative to you and Ben and I want to get more into that, but you really represent them and you've built a business that way specifically to give you the independence to represent the brands

without having any of the conflicts with the inventory or managing that inventory. And I just want you to clarify if i'm if i'm if i'm getting that wrong but i want to make sure that's very clear with our with our people watching yeah i appreciate you making that clear and i i don't have to clarify anything but i will underline what you just said you know i was recently in market for a house the realtor that was representing me as the buyer was also representing the seller and so when we went into negotiations i'm like who do you represent me or them and the truth of the matter is they don't represent either of us they get paid if a transaction happens and so they weren't telling me the things that were wrong with the property they were just trying

to get a deal done because they make money on both sides of the equation that happens all the time in advertising where there's conflict of interest and we believe that the future is all about data and especially the data that informs what an advertiser should buy so for instance if you take a brand uh and i'm just picking one at random a brand like nike there's a lot of nike loyalists people love that brand and if you buy one product you're actually much much more likely to buy five products so there's a lot of loyalty there so you want to make certain that you're advertising and spending more on those that have loyalty but also nike want i want them to trust me with their data about what does their consumer look like so that i can help them go find other

stuff and then i can help them decide should i buy the front page of yahoo or should i buy an audio ad on spotify i buy paramount plus or should i buy peacock there's all these questions that if I have a dog in the hunt, I'm a horrible advisor. So by, by pledging to them, I don't own any inventory. I never will. Now I'm, I can make objective decisions for you between all those various properties. And now we're aligned. And most importantly, now you can trust me with your first party data so that I can put that to work on your behalf. If I was representing both sides, even if I were a much, much bigger company, I would be operating at a disadvantage because I i just wouldn't be able to win trust we think one of the advantages we have over many of the

much bigger technology companies is that we have objectivity and allegiance and they do not i just wanted to talk a little bit about the international opportunities um i think most most of your businesses if the spend business is concentrated the client business client spend is in the u.s i just wanted you to talk a little bit about the opportunities um internationally especially over and china is such a massive market um and a lot of the walled gardens obviously not allowed into china and what kind of opportunities the trade desk has over there yeah you bet so so first let me talk about just uh the world outside of of the u.s so so because we represent the fortune 500 nearly all of them um most of them are interested in being all over the world and

i imagine most of the people watching this have traveled outside the united states and you know you can't go anywhere in the world and not see signs for brands like coca-cola or or fortune 500 brands all over the world mcdonald's insert you know ubiquitous brand here so those brands are interested in technology that will take them all over the world and it becomes very important that in order for us to represent them or to have a partnership with them we have to be in the major media markets all over the world. So we have offices all over the world, over 25, and, of course, across Europe and Asia and America and Australia. But we've been especially bullish on our opportunity to help them in CTV.

So in 2020, we were leaving the market in the U.S. and Australia only. very progressive in terms of SVOD and moving to online in terms of traditional content becoming available online many parts of the world were a little bit slower than that but in 2021 we became market leader in both the UK and Germany so part of the thing that makes me so optimistic is that you know when your playbook works in one country you can say okay well what about everywhere else But when it's worked in many different environments like Germany, UK, London, and Australia, and then, of course, the U.S., then you know your playbook with some adaption can work everywhere. So the fact that we had 4x growth in CTV in EMEA last year and 200% growth in Asia in CTV were just really phenomenal. You mentioned China, though, just to touch on that just very briefly.

One of the things that's unique about our approach to China, because there's a ton of especially U.S.-based companies that have just been killed trying to go into China. We think we're in a different situation in large part because we are not trying to take money out of China. We're doing two things. Number one, we are bringing money into China, first of all, which is the biggest brands in the world want to sell more product in China. So we want to buy ads on Baidu, Alibaba, Tencent, Tatia. So if you compare that to like a Facebook who would want to come into market and people spend time on Facebook, that would arguably take away viewership from Tencent.

So China would be much less interested in something that would take away from a Chinese company versus something that's going to come bring money in. And then the last thing is that we're helping Chinese manufacturers and brands be known to the rest of the world. So taking those everywhere else, once again, just helping Chinese companies do well, it helps the global economy. But with that different value proposition, it's one of the reasons why our China offices have been the fastest growing for our company in the world. Coming up after the break, Jason Moser and Ron Gross return. We're going to dip into the Fool mailbag and they've got a few stocks on their radar. So 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 stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here once again with Jason Moser and Ron Gross. Our email address is podcastsatfool.com. We've got two we want to share. First, from Kenny Ray, who writes, I wanted to take the time to simply say thanks. I started my investing journey with The Motley Fool about a year ago after coming home from an overseas deployment with the U.S. Army. I knew nothing about investing, and I had taken advice from the Morning Brew newsletter to become

a Motley Fool member. I listen to every podcast and watch the Motley Fool live video stream when I can. Over the last year, I've watched my portfolio start to grow and then turn red. That being said, I truly appreciate the constant reassurance, advice, and personal experiences shared from so many people at The Fool. The community keeps me grounded and resilient, even with this year starting out rocky and the current situation in Ukraine. I'm comfortable staying in the market and riding things out. I'm 35 years old and realize I have plenty of time to watch my positions bounce back and grow. Thanks again for all you do. Thank you for that, Kenny. And that's awesome. That is the way to go. We love to see that. We've got a question from Bruce

in Tampa, Florida. I've heard multiple analysts say they like to have 25 to 35 stocks in their portfolio. That's an incredible amount of stocks and is obviously well into the six figures. How do you build that portfolio? One stock at a time or small increments across the board for all stocks? Many people have received a one-time influx of money due to the sale of their homes in the past couple of years. When investing with a one-time large sum, do you believe in dollar cost averaging or just going all in? Keep up the great work. Ron, a lot to get to there, But in terms of the portfolio building, what do you think? Well, thanks, Bruce, and go Bucks.

What I would say is 25 stocks, you don't need to do that overnight. You can build up to 25 stocks over a multi-year period of time. And it doesn't have to be tens of thousands or even thousands of dollars each time. $1,000 in each stock, $25,000. $500 in each stock, $12,500 can get you where you need to be. It's great if you can buy fractional shares if your broker allows that, because that'll allow you to buy some of the higher priced stocks and not worry about getting a whole share or a whole two shares. Again, remember, it's not shares that matter, it's

the dollars invested in each company. So just take your time, be methodical about it. Your second question, I like the dollar cost average in, but the market goes up over time. So theoretically, if you put your money in now over time, that money will rise as well. Yeah, Jason, the second part of Bruce's email reminded me of something you've talked about before, sort of the approach of buying in thirds. Yeah, yeah. I mean, I think generally speaking, most of us like the dollar cost average because we feel like we can be a little bit more in control and be a little bit more opportunistic. There's actually a study out there from Northwestern Mutual Wealth Management, though, that shows that the lump sum option does work, right? This study

looked at rolling 10-year returns on $1 million starting in 1950 and basically just compared a lump sum versus dollar cost average. And assuming a 100% stock portfolio, the return on lump sum investing outperformed dollar cost averaging 75% of the time. A portfolio composed of 60% stocks and 40% bonds, that outperformance rate was 80%. And a 100% fixed income portfolio outperformed dollar cost averaging 90% of the time. So there is data out there that shows lump sums certainly can work for you if that's an option you'd prefer. Let's get to the stocks on our radar. Our man behind the glass, Rick Engdahl, is going to hit you with a question. Ron Gross, you're up first. What are you looking at this

week? I'm going to do something different this week and thank you for giving me the permission to do so, Chris. I'm going to recommend a basket of stocks of my own creation. During times like this, weakness in the market, I love to buy more of my favorite stocks at discounted prices. These are companies usually with impressive management teams, strong cash flow, rock-solid balance sheets. Let's call them resilient stocks. I'm not giving one radar stock this week. I'm giving my resilient basket. You can buy all of these companies at significant discounts to their 52-week highs. Costco is down 10% from its 52-week high. Microsoft down 15%. Domino's down 26%. Home Depot down 26%. Disney

down 27% and Target down 28%. I think those six companies right there will give you a nice little basket of resilient companies. Rick, question about Ron Gross's resilient basket? It's a very nice basket, Ron, you got there, but come on, which one's your favorite? I love Costco. It's business model. It's culture. I think it's a pretty special company. Jason Moser, what are you looking at this week? Yeah, keeping an eye on Zoom Video Communications, ticker ZM. Earnings on Monday, February 28th, after the market closes. If you recall recently, Zoom had the 5-9 acquisition they were trying to make. That deal was called off. So, an interesting press release this week, Zoom Contact Center is rolling out now. This is essentially their effort at kind of

developing that 5-9 dynamic to the business without actually making the 5-9 acquisition. But I think it's really interesting to see because we talk about this idea of what is Zoom going to become. You can see all of these different initiatives, it feels like we're watching them become a little bit more like Salesforce in some ways here, focusing on that customer relationship management side of the market opportunity there. It could absolutely be a tremendous opportunity for the business if they execute. The stock is 70% off. It's 52-week high. It could be one worth keeping an eye on here for patient investors, I think. Rick, question about Zoom?

Yeah, I'm tired of Zoom, kind of in the way. Me too. Tired of Facebook and things like that. It's just like, yes, I'm tired of it, but I know it's going to be here forever. Is that the story for Zoom? Are we stuck with it for the long-term future, you think? Or is there anything going to come along and disrupt it? Well, I think for better or worse, yeah, for some of us more than others, yeah, we're probably stuck with it. Microsoft Teams, of course, is a competitor in the space as well. Hopefully, the hybrid workforce won't steer too many people into that sort of glass-half-empty mentality with Zoom.

But, yeah, I do understand exactly where you're coming from, Rick. I feel like I need another Zoom meeting, like I need another hole in my head. We're out of time, guys. Ron Gross, Jason Moser, thanks for being here. Thanks, Chris. Thank you.