Motley Fool Money - 3 CEOs Walk Into A Bar

Episode Date: January 6, 2023

On a shortened week of trading for investors, three CEOs dominated the headlines. (0:21) Matt Argersinger and Jason Moser discuss: - Layoff announcements and a sober prediction from Microsoft CEO Satya Nadella - The market's positive reaction to the December jobs report - Key things they're watching in the tech industry - Newest unveilings at CES in Las Vegas - The latest from Stitch Fix and Constellation Brands (19:11) Malcolm Ethridge, CFP and host of "The Tech Money Podcast", weighs in with predictions of two more interest rate hikes, why "Mega Cap Tech" is the key to a stock market rally, and what he's watching for this earnings season.   (34:00) Matt and Jason discuss Bed Bath & Beyond's real estate footprint as the company nears bankruptcy, and share two stocks on their radar: Amazon and Bentley Systems. Looking to get a jump start on your 2023 financial goals? Our flagship service, Stock Advisor, is open to new members for just $99 a year! Access this special offer by visiting www.fool.com/intro. Stocks discussed: CRM, AMZN, MSFT, AAPL, SFIX, STZ, ROKU, SONY, HMC, GOOG, GOOGL, SPOT, BBBY, BSY Host: Chris Hill Guests: Jason Moser, Matt Argersinger, Malcolm Ethridge Engineer: Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone, I'm Charlie Cox. Join us on Disney Plus as we talk with the cast and crew of Marvel Television's Daredevil Born Again. What haven't you gotten to do as Daredevil? Being the Avengers. Charlie and Vincent came to play. I get emotional when I think about it. One of the great finale of any episode we've ever done. We are going to play Truth or Daredevil.

What? Oh, boy. Fantastic. You guys go hard, man. Daredevil Born Again, official podcast Tuesdays, and stream Season 2 of Marvel Television's Daredevil Born Again on Disney Plus. for the start of CES, and the market ends the week on a positive note. 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 Full Money Radio Show. I'm Chris Hill, joining me, Motley Fool Senior Analyst, Jason Moser, and Matt Argusinger. Good to see you. It's always gentlemen. Mattie. Chris?

We got the latest news from Wall Street. Malcolm Etheridge from the Tech Money podcast. is our guest, and as always, we've got a couple of stocks on our radar. But we begin with the big picture on a shortened trading week for investors. Three of the most influential CEOs in the tech industry dominated the headlines. Salesforce CEO Mark Beniof announced his company would be laying off 8,000 employees. In a memo to staff, Andy Jassy announced Amazon will be cutting 18,000 jobs. And in an interview with CNBC's Network in India, Microsoft CEO,

Satya Nadella painted a sober picture of the business landscape saying, quote, the next two years are probably going to be the most challenging. Matt, I understand any investor who hears this and thinks, well, this is just one industry. It's not health care. It's not energy. But these are influential businesses. And in the case of Microsoft and Amazon, you've got two of the biggest companies by market cap in the world. So given all of that, should investors, temper their expectations for the next year or two? I think they should, Chris. And what's interesting is everything you laid out is such in contrast, stark contrast,

to what the market is doing on Friday with this jobs report that came out, which was, you know, stronger than expected, showing big job gains in places like leisure and hospitality, healthcare, construction, and other places. But as we've talked about actually on this show, So the layoffs that we're hearing about and seeing are coming from the big technology companies, like the ones you named Financial Services companies. And ultimately, I think, even though we can say, well, maybe this is kind of going to be a white-collar recession.

Or, you know, Jason had a great term for it earlier, the rich session. The rich session, rich session, yeah. Rich session. You know, but ultimately, you're talking about fairly highly paid workers. As you mentioned, influential companies, a big industry that dominates the most. market. Eventually, this has to roll downhill a little bit. I do think consumer spending, which is of course really dominated in this particular group, it's going to be affected. And so to me, it doesn't, it's worrisome. It doesn't take away the recession equation

that we think we're probably facing this year. Jason, to Maddie's point, we did see a positive reaction from investors on Friday after the jobs report, in part because wage growth can in lower than expected. I think that's probably why we saw the market pop on Friday. But to his point, when you hear these CEOs making these comments, making these moves, particularly in the case of Amazon, where the raw number of employees is larger, more than double what we saw from Salesforce, but on a percentage basis, it's really just about 1%, maybe a little more than 1% of all of Amazon's employee base.

Yeah, I mean, I think it's fair to say we are, well, we have to be closer to the beginning of this than the end of it, right? I mean, it does feel like these are just the first announcements of job cuts that will likely see through the course of the year, at least the first half of the year. I mean, I think that, you know, we've seen these tech companies have been on the radar all year, basically last year. Certainly the back half of the year, as they struggle to cut costs in right-sized workforce. forces. And really, I think a lot of that is a product of just cleaning up the mess, really, from these past few years. We saw a lot of growth pulled forward. We saw a ton of stimulus go out into the economy. Expectations certainly got out of whack to a degree, at least in absolutes. And it turns out, you know, people aren't fully changing how they do everything.

I mean, it reminds me, it kind of takes me back to something you and I were speaking about earlier in the week, right? In that a good lesson, I think we could all take away from this, at least something to sort of reiterate, is to be careful in investing with that absolute mindset and saying, well, things are just going to change from this to that, right? We're going into the digital economy. Everybody's going to be working remotely now. Everything's going to be done via Zoom and Slack. And we don't ever have to go anywhere anymore. You can just do your exercises from home now. Who needs a gym? Well, We've certainly seen with Planet Fitness. I mean, there's a recovery going on there.

And I think it's because consumer behavior is starting to normalize at least somewhat. And so there was this mindset over the last few years that we could be headed towards sort of this permanent change or shift. And I think now we're seeing that that change or shift is a little bit more modest, right? It's kind of like hybrid, as opposed to saying we're all going to be working in person or we're all going to be working with. remotely. It feels like hybrid is kind of the mindset going forward, the way most things are going to be going forward. These tech companies, I think, are coming to that realization. And they're having to restructure their businesses accordingly.

Yeah. I think Jason nailed it. And going back to what you said, Chris, about just Amazon specifically, yeah, that 18,000 layoff numbers seems big. But from the end of 2019 to the peak in first quarter of 2022, Amazon hired 18,000. hundred thousand workers. They more than doubled their workforce. Now, to Jason's point, you know, all these trends and things I think we saw in the immediate aftermath of the pandemic, they're starting to slow or reverse a little bit. E-commerce is even slowing down. I was looking at data from Forbes and they're projecting that e-commerce as a share of retail sales is going to be about 20 percent at the end of, it ended around 20 percent in 2022. That's big. It's a big share,

But I think, especially in the aftermath of COVID-19, I just remember seeing projections that, you know, e-commerce was going to account for more than a third of retail sales, even 50% of retail sales. And I think it's a near certainty that companies like Amazon saw those lofty projections and it made its way into their hiring plans. Yeah. And to that point, I think to that point, just when you're talking about Salesforce, I mean, you look at the hiring that's gone on at sales force versus the growth that the business has witnessed in looking at just as of January 31st, 2020, the company had more than 49,000 employees, and they reported revenue over that stretch over that year of $17 billion. Most recently,

we saw in October that they had 80,000 employees, and for that trailing 12-month period, they recognized reported revenue of $30.3 billion. So you see over that period of time, revenue grew 78%. That's outstanding. Employees, grew 63%. That's a lot of hiring, right? And so now you consider over that stretch, too, we saw margins decline across the board, right? Costs are starting to get a little bit out of control. And now management is seeing these headwinds on the horizon. What they see going forward is a big slowdown. That growth that was pulled forward, that 78% revenue growth, that wasn't normal, right? That was exceptional. And we're starting to see that normalize now. That growth wasn't because

they hired more people. They hired more people thinking that growth might continue. And now we're seeing clear signs that it won't. And so going forward, they're going to have to account for that. And that really just comes through whittling down the cost structure, whittling down your employee base, which is just traditionally, that's one of the most expensive things a company has to maintain is its employee base. I think it's going to be interesting to see not only where the other big tech companies go in terms of staffing and potential You think about Alphabet, Microsoft as well. But also, if Salesforce gets to a point where they feel like they need to cut even more jobs, because on a percentage basis, what Benny often asked was a reduction of 10% of the staff.

That's a pretty sizable percentage. Maybe not quite a rip the bandaid off approach, but pretty close to it. So I think it's going to be noteworthy if we get another cut. in jobs from Salesforce, whereas I think the three of us are very much expecting more announcements of reductions at Amazon. All that being said, Maddie, thinking forward within the tech industry, what is something you're going to be watching this year? I think when it comes to tech, you know, I feel like there's been rumors about this for years, if not decades, but I feel like this year could be the year where Apple does enter that virtual reality,

augmented reality space. They're calling it, I think, their mixed reality headset. If that comes out, and I'm not saying it's going to be a game changer like the iPhone was, certainly not. But I think it could finally lead to some kind of mass adoption within that space. It's something that we've been expecting for a while. And I think Apple could be the one to do it. And if it does become this sort of mass adoption platform, then imagine the third-party applications, the experiences that could be developed for it over, you know, in the near term, I think it could be massive. And it could be a catalyst that it kind of ignites a new tech bull market. I think that might be a little pie in the sky, but I think that's what tech almost needs.

They almost need like a new platform, you know, a new way to, you know, a new marketplace, right? And I think something like a VR set, a mixed reality set from Apple could be that if it does again, mass adoption. So I'm intrigued by the possibilities there. You know, who knows how it, if it gets off to a rate start or how many versions you have to get to before. It does sort of reach that mass adoption. But I do think it's something worth watching. Well, the Iwatch was not a big hit when it first came out and they just kept iterating, kept improving.

And now it's bringing in a decent chunk of revenue. Jason, what about you? What are you watching within the tech industry? Yeah, you know, I'm going to go a bit bigger picture. It's less company-centric and more industry focused. And that is just looking at revenue per employee. I think going back to that point I made earlier about tech companies really realizing that they're having to rein in those costs. Revenue per employees is always an interesting starting

point, I think. You can get an idea of how productive a company is being. But you can also see trends, right? If a company is over hiring and it's not resulting in growth, then you see over time that revenue per employee go down. But I think it's a good starting point there, And you can take it down the line than to look at how profits are being impacted, how are margins being impacted, particularly in a time where revenue growth might be a bit more muted, as I think we all agree, it will be, at least in the near term. So really just keeping an eye on how efficient these companies are. Back to your point, they're on Salesforce and rip the Band-Aid off kind of moment. I mean, I wouldn't be surprised to see many of these companies go back to the well when it comes.

to these job cuts because they hired so much over the last couple of years. I mean, it's not to target Salesforce or Amazon. I think companies across the board did it, right? Everyone's guilty. I mean, you just have to go ahead and atone for that or you have to pay the price and deal with a really rough next couple of years as opposed to just a kind of rough next couple of years. After the break, we're heading to Las Vegas to check in on the latest news from CES.

right here. This is Motley Fool Money. Welcome back to Motley Full Money. Chris Hill here with Jason Moser and Matt Arger Singer. Hope the new year is going well so far. And if you're looking to get a jump start on your 2023 financial goals, let us help. When you become a member of our flagship service, Motley Fool Stock Advisor, you get exclusive access to our analysts, official stock recommendations every month so you can take control of your portfolio and make smart, informed investment decisions. Stock Advisor is open to new members for just 90% of your business.

for just $99 a year. Go to Fool.com slash intro to access this special offer. That's fool.com slash intro. Shares of Stitchfix up 12% this week on the news that company founder and former CEO Katrina Lake is returning to the corner office. First order of business was cutting 20% of the staff. Jason, how many more lives does Stitchfix have? I don't know. Is this the short answer. This is a tough one, right? It's Sitchfix appears to be a business that has hit its ceiling, I think. And with as many online subscription businesses that exist now, I mean, it's just facing a slew of competition that is clearly having an impact on the business. I mean, Ms. Spalding had a year and a half on the job there in very difficult conditions,

I might add. You fast forward and Ms. Lake coming back, it's hard to, it's hard to, you're to fully pinpoint what her end game is here. I mean, she still holds a significant amount of the business better than 8.5% of the shares and considerable voting interest thanks to the dual class share structure. But as was noted in the announcement, right, late coming back, cutting 20% of the workforce. I mean, ultimately that when Ms. Pauling took over, she had implemented some job cuts that left Stitch Fix with around 1,700 salaried employees as of June 2022. So this additional cut, it's going to be, you know, 340, 350 additional jobs that they're going to whittle down. What was surprising to me was to see that this business has almost 8,000 employees to begin

with. I mean, it just seems to be excessive. But with that said, it makes sense that the standout quote in this announcement was that the focus for the team is squarely on creating a leaner, more nimble organization. So, again, going back to businesses with bloated. would cause structures. I mean, obviously Ms. Lake understands what's at stake here. They're also going to be closing down their Salt Lake City distribution center. So a company that's clearly on the defensive these days. Challenging end to 2022 for Constellation Brands, the parent company of Corona Beer and other beer wine and spirits brands saw sales growth in the beer category in the third quarter, but that was offset by supply chain problems. Shares of Constellation brands down nearly

10% this week, Matt. Yeah, it's all about the beer, Chris. If you look at depletions, they were 5.7% in the quarter. It's down from a range of where they've been about 8% to 9% over the past several quarters. And so that means retailers are buying less from distributors because they're seeing lower sales at the storefront. I think this is an example, and maybe one of the rare examples or not rare examples of this era we're in, where there's a product that's a product like beer, which is more price elastic than others. You know, you raise prices enough and demand is going to fall.

Constellation has been raising prices because of, you know, like you said, increases in things like energy and aluminum related to their supply chain issues. So it's having trouble transferring the full brunt of those prices onto its customers. I think when I, the bigger question of me, though, when I think of Constellation brands and other alcoholic beverage businesses is younger people, right? Are they drinking less these days? And I've heard it anecdotally. But there is some data I dug up from Gallup and a medical journal called J-A-M-A Pediatrics.

It's a journal focusing on young adult and adolescent care. Younger people are, in fact, consuming alcohol at a lower rate than previous generations. Don't know if that holds up, but it just means that I think the three of us are going to have to pick up the slack. I mean, you make a great point there, Matt. You also see a lot of these companies, beer in particular, you're seeing more non-alcoholic options being served. And you're seeing this new little sort of niche market in hop-y shelters, right? So you're getting that hop flavor that you like from a beer in

selzer form, non-alcoholic seltzer form. So it's really interesting to see all of the different experimentation these beverage companies are undertaking. I've always wondered what's the point of those, those non-alcoholic beers and things, but you're right. I guess there's a market for them. Yeah. This week, over 100,000 technology enthusiasts descended upon Las Vegas for the Consumer Electronics Show. Among the early headlines from public companies, Roku unveiled a branded television and Sony unveiled the prototype for an electric vehicle in partnership with Honda that's due on the market in 2026.

Jason, we've got about a minute left. Anything catch your attention? I thought that car looked really cool. Now, I mean, you might say Sony, a car, but let's remember, it's in partnership with Honda. So they've got some experience there to help them sort of steer their way. forward on that one, no pun intended. The one that kind of stands out to me, honestly, the Roku TV. I mean, this seems misguided. They're pivoting away from being a hardware company to being

a hardware company. I mean, you know, this color me skeptical. But, I mean, this is a business for a long time. We said, well, the idea was to not worry so much about the hardware. That's a loss leader. It's all about the platform to hear management explain it. Again, they note that the core of the business and the advertising revenue that they generate from their distributed platform there, that's the business. That's the market share. And so making their own TVs is an effort to gain more market share. But remember, they've licensed that technology to other TVs too. So now that puts them in direct competition with them. I'm just not certain this is the right call. All right, Jason Mozer, Matt, Arkansasinger. Guys, we'll see you later in the show. But up next,

more of what investors should expect this year with Tech Money podcast host Malcolm Etheridge. Stay right here. This is Motley Full Money. Welcome back to Motley Cool Money. I'm Chris Hill. Malcolm Etheridge is a certified financial planner, an executive vice president with CIC Wealth, and he's the host of the Tech Money podcast. He joins me now from the greater Washington, D.C. area. Thanks for being here. Yeah, no. Always glad to get a chance to sit and talk markets with you, my friend. So after the worst year for investors since 2008, What is your optimism level right now on a scale from one to 10? I appreciate you assuming I have some optimism.

I do, but I appreciate you assuming. My optimism is probably at about a seven and a half to eight, believe it or not. I'm pretty high, I think, on the optimism scale compared to a lot of the folks I listen to and read and watch. Why is that? I think statistically, I think the statistics of market corrections, like the one we just dealt with, the one we're in, I guess I should say right now, the bare market cycle that just because the calendar has turned over doesn't mean the market cycle has. And I got to remind myself of that and not talk about it in past tense. But statistically, it takes about 14 months to work our way out of a 20% drawdown in the S&P, the one exception to that, the outlier. would be the tech rec, right? So, 01, 02. That was about 30 months.

But we also don't have the same level of, what's the word I would use? I hate you saying volatility because it's said so much, it means nothing anymore. I'll say consternation this time. That'll be the word I use. We don't have that level of heartburn the way we did in the VIX back then. And the NASDAQ fell something like 80% at that time, and we haven't gotten anywhere close to that. And so I just feel like that one outlier case doesn't,

really apply here. So if we just look at the fact that 14 months on average is where we tend to be November 2021 is where we all kind of benchmark this whole thing started to get really ugly from, we're pretty much at the tail end of that average time period. And then if you think about the fact that the S&P 500 tends to turn positive four to five months before the broader economy does, that also is encouraging because that means that even though sentiment is very, very negative right now out on the street. The market itself can and will start to turn positive before we start to feel good about the markets as investors again. And so just from those statistics, I look at it and I say, I think we've already taken the whooping that we're going to

take and we can start to turn the corner and be a little more positive about the prospects going forward. Let me go back to tech for a second because earlier in the show we talked about Salesforce and Amazon kicking off the year with layoff announcements. And I'm curious if you think whether it is big tech companies like them or companies in other industries, do you think we're in for months of these types of announcements? I think we are to a point. I think we'll continue to see those kind of announcements coming out of the tech world because the tech world also got extremely greedy and built up recruiting networks that it didn't necessarily need. If you really look under the hood of the leaked memo from Amazon, it's less software

engineers and program managers and folks like that that are really instrumental to the organization. And it's more recruiters and HR staff and folks like that, that, you know, they're an important piece to the puzzle, but they're much more important during boom times when we're high anybody with a pulse and a degree in X, Y, and Z versus now where we're being a little bit more thoughtful and methodical about who comes in the door, and we're figuring out ways to be happy with the workforce that we have. And so I think those kinds of layoffs are really just, I hate to say it this way because it's literally people losing their jobs that we're talking about, but it's from a numbers perspective, it's just trimming the fat. It's cutting headcount

for the sake of we don't really need this headcount to serve this function anymore, versus folks who are actually doing the work and building the products and moving the organization forward. And so what we'll see now is productivity per employee, which again is a very cold metric that only CFOs appreciate. But from an investor standpoint, productivity per employee will go up in 2003 for these tech companies where software is the service that they're selling. So they got a ton of operating leverage. It doesn't cost you anymore to deliver Malcolm the newest version of XYZ software than it did for you to deliver. it to Chris. And so that added customer is now just one more layer of icing on the cake. And the productivity per employee goes up because you shrink the headcount, took your medicine in January,

and we can move forward now. Last year, you and I talked a lot about interest rate hikes. We weren't the only ones. Really, 2022 was the year of interest rate hikes. When you think about the year to come, the Fed meeting in early February. What if any expectations do you have, either around the size of interest rate hikes or how long they may continue into the year? So I try my best not to let my optimism as an investor creep into my expectations as an asset manager. So do with that what you will. But my thinking on this is that we're likely going to see two more raises in the first quarter of the year at 25 basis points because that's sort of where the expectation and the consensus and the dot plot is. I think if you look at what Powell has

done pretty much the second half of 2022 and beyond, it's been perfectly in alignment with where the dot plot told him he needed to be and where the street's expectations. expectations were anyway. And he has said language that's extremely aggressive and extremely hawkish and we're looking for this and we're going to do that. And one good report doesn't tell us that we got to stop and mission accomplished. But his actual behaviors or the decisions he's made haven't really been all that aggressive in comparison to what the expectations were all along. And so I think we're probably going to see two hikes to start out 2023 and then a pause following that. I'm not in the camp that thinks we're going to get this pivot and suddenly they're the cut at the end of the year.

I think that's nonsense. But I do think we will see a pause is the announcement that we'll get that that makes the difference there. Obviously with the market decline that we saw in 2022, particularly with the NASDAQ being what 10, 12 percentage points greater than the S&P 500, not everything is cheap, but certainly some things are cheaper on a valuation basis. I'm curious if there are particular areas of the market that are looking attractive to you right now. So I am, again, trying not to sound too much like I'm talking my own book because I do own quite a bit of tech stocks individually. and then our clients also in aggregate own a considerable amount of tech, just the nature of the way the market is shaped right now. The S&P is shaped. But I am of the opinion that there can't

be a meaningful rally in 2023 that doesn't involve mega cap tech. And I think the term mega cap tech has gotten smaller, the number of companies that it includes, right? It used to be Tesla. I don't think it includes Tesla anymore. It used to be Netflix. I don't think it's Netflix anymore. And so when you look at companies like that, who do you have left? You've got Apple, you've got Google, Microsoft, Amazon, and maybe a couple more that for some reason just are not drawing immediately to my memory. But those are the companies that I think make all the difference in whether we have a recovery that's single digit percentage by the end of the year or a meaningful recovery by the end of the year where we're now talking maybe double digits that. folks are hoping for because obviously we want to recoup some of what we lost in 2022, but we can't have a real meaningful recovery, in my opinion, that doesn't involve at least two out of

the four mega-cap tech names that I just mentioned. Let's go to the near future then. Earning season is going to kick in later this month. What are you going to be watching for, whether it's actual results or guidance and commentary from company executives? So again, I like tech, but I'm going to move away from mega cap tech this time and point out the fact that you just mentioned Amazon, the behemoth, right, is slated to cut 18,000 workers. Salesforce slated to cut something like, what was it, 5,000, I think. 10,000. 10,000 workers. And then all of the ones that were announced last year that layoffs.

That f.Y has been tracking. It's like north of 125,000 people, right, that have been laid off. the thing I'm interested to see now is who among the tech companies that are larger, but they're not Microsoft, are mentioning the fact that they're looking to hire. And not in a meaningful way where we're bringing on 18,000 people. That just doesn't make any sense. But in a market that's as soft as this one is in the tech space where people are being laid off, anybody who's showing strength and saying, we want to bring people in the door,

that would be a very interesting little nugget to get out of their earnings call that would say to me, and I'm thinking about like a Spotify, for example, could be somebody who's in that direction. I think Spotify is taking the beating it's going to take. I think folks in the cybersecurity space would be good candidates for that as well. There's rampant frauds not the word I want to use, but there's rampant security breaches that are happening and are going to continue. to happen and will continue increase. So cybersecurity is not going anywhere. So like those are the kinds of companies that I think could and probably will be looking to add a few key people to their teams while they're leaving these other companies that don't have a need for that talent,

but they're talented people. You would have to think that it would almost be a double win in some cases because if companies have the financial resources to be hiring at a time when some companies are laying people off, and they're also doing it in the environment where people are being laid off, it's almost the other end of the spectrum of what we saw 12, 18 months ago where all these companies were doing as much hiring as they could, and you had people job hopping because they could get a little bit of, they could get a 10% salary increase over there as opposed to where they were at any one moment. In a layoff environment, it seems like companies that are doing hiring,

they're more in the driver's seat. ADP had a report that they released this morning, I think it was, that showed that the average person who stayed in their job last year saw a wage increase of something like 5%, 5.something percent. And then the people who decided to job hop instead to get that increase saw double the wage increase as the people who stayed put. I think you see a little bit of an increase still in wages for these highly skilled technical workers, but nowhere near double what people are going to be getting in 2023 who actually stay at the company. So a 5% is the number,

let's say, let's just anchor there for a second. They're going to end up with that 5% elevated salary coming in the door at the new company above and beyond what they had at the old company. but not 110, 115, and beyond. I think those days are over and behind us, the same way that the days of sight unseen, 24 hours to bid after the open house real estate market is well behind us at this point. Season three of the Tech Money podcast

is starting later this month. Just give me a quick sneak preview of what you're working on. Yeah, so still going to have the same focus on investments and, you know, helping to make tech workers smarter about their money, you know, our tagline. But one of the things that we've decided from feedback from the audience and everything else is that there's this interest in conversation being had out there in the ether about financial independence and how to get there. And so we want to focus in a little bit

more of the conversation that we're having and the guests we're having on and so forth in that financial independence realm. So not just investing for investing. sake, but how do we use this portfolio we're building up to help buy a few extra years of life versus work? And those little undertones will be woven through the season, which I'm really excited about because that's a whole other side that I'm excited to be able to explore more. Malcolm Etheridge, always appreciate your time. Thanks so much for being here. Thanks for having me. If you're listening to the show on one of our many radio station affiliates, thanks for listening.

And check out the Motley Fool Money podcast for even more content. Later in January, we'll be bringing our podcast listeners conversations with Charles Schwab chief investment strategist Lizanne Saunders, bestselling author Morgan Housel, and a lot more. Follow Motley Fool Money on your favorite podcast app with just a click of a button. Coming up after the break, we're going to pour one out for a longtime consumer business. And Jason Moser and Matt Argusinger are coming back with two stock ideas for your watch list.

Don't touch that dial. 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 herself stocks based solely on what you hear. Welcome back to Motley Full Money, Chris Hill here once again with Matt Argusinger and Jason Moser. Shares of Bedbath and Beyond fell to a 30-year low this week after the company warned investors

that it is almost out of money and seriously. considering bankruptcy. Matt, for a retailer in this much trouble, Bedbath and Beyond has a massive footprint with more than 700 stores across the U.S. Right. That's what you think about, right? Is there what happens when all of a sudden those stores go dark? And your natural inclination is think, well, okay, another retailer will come in or an adjacent retailer might take up more space. But you know, this is a problem we've been struggling with in the U.S. is that in this country, we have so much more retail square footage per capita than anywhere else. In fact, we have about four to five times the amount of retail space per capita than most other developed countries.

So it's possible that most of that real estate, and you said it's a massive footprint, it's probably heading towards obsolescence. And I just don't think it's a surprise that Bedbeth and Beyond is here, just given the retail climate, like I just said, the fact that we saw too much retail. What I think is sad to me, Chris, is that my last memory of Bed Bath and Beyond, a company that's been around for decades and it's a well-known brand, is that the fact that last summer, for a brief period of time, it became this meme stock that quadrupled overnight. There was this university student who made like $100 million in it, and you had the chairman of GameStop involved.

I don't remember the exact story. It was one of those things that reminded me that if you had any delusions that the stock market was an efficient market, that probably got rid of it for good. And that's my last memory of Bed Bath Beyond as it teeters towards bankruptcy. All right. Let's get to the stocks on our radar. Our man behind the glass, Rick Angdell is going to hit you with the question. Jason Moser, you're up first. What are you looking at? Yeah, I've been digging into a company called Bentley Systems. The ticker is B-Sy. Bentley's mission is to provide innovative software and services for the enterprises and professionals

who design, build, and operate the world's infrastructure. So think roads, rails, airports, water, oil gas, hospitals, campuses even. Something interesting that Bentley has to be Bentley has, they have this platform called the I-Twin platform, which allows their customers to develop digital twins. So this is an interesting business, I think. It really establishes its identity as the infrastructure engineering software company. So I like that focus. They cover all stages of the infrastructure life cycles.

So design, construction, maintenance even. Interesting in that it's a family business. So you really are getting on board here with the Bentley family. They control shares through a dual class. system, but a neat company still fairly new to the public markets, but continuing to learn more about it. Rick, question about Bentley Systems? Yeah, I'm not going to let that just fly by. You said something about digital twins. What the heck is that? Is this an AI play or what?

More like a sort of a virtual reality immersive technology play, right? Think about building another Rick. And let's look at that digital Rick and let's see what we can do to make Rick even better. I mean, let's not kid ourselves. We can't make Rick any better than he already is. But if we could, we would probably do it by creating a virtual Rick. Shout out to the Rick and Morty fans who are listening right now. Matt Argusinger, what are you looking at this week? I'll keep this one quick.

Amazon, AMZN, we've already talked about it during the show, but the stock has been an absolute free fall and could almost certainly go lower. But I just think the stock has gotten to a point where I think there's probably pretty good value there. If Andy Jassy can write the ship in terms of the company's cross structure, I know that's a big if. I think Amazon should be more than capable of generating between $4 and $5 in earnings per share in a couple years. And you put a $20 to $25 multiple on that, and quickly you've got $100 stock. So if Andy Jassy does write the ship, maybe Jeff Bezos comes back and maybe that's another catalyst. So I think there's just a lot more upside to Amazon from today's price than downside.

Rick, question about Amazon? I'm all for it. I like your optimism. What's Amazon's next big thing? Are they going to get into some new technology or something? They're resting on their laurels right now. It's super exciting, Rick. They're going to get into cost-cutting.

That's the next big thing for Amazon. Rick, what do you want to add to your watch list? I may well regret this in the near future, but I'm going to go with the digital Rick. I like that. I like that. Oh, there you go. I think a digital Rick is better than a digital Dan Boyd, by the way. Nicer.

Less evil. I'm with you there. He's not listening. It's okay. He's not going to listen to this. Shots fired. I don't want to be in that battle royale, I have to say. We're out of time.

Guys, thanks for being here. Thanks everyone for listening. We'll see you next time.