Motley Fool Money - A Lump of Coal for Investors

Episode Date: December 21, 2018

The worst December stock market since 1931. Political turmoil. And a Federal Reserve that may be reevaluating. Analysts Matt Argersinger and Ron Gross talk about what it all means for investors and dig into the latest news from Fedex, Nike, Twitter, and Jack in the Box. Plus, our analysts weigh in on the future of FANG stocks and share some stocks on their radar. And author Gillian Zoe Segal shares stories of success from her book, Getting There: A Book of Mentors. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Mortgage.com slash fool. 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 L. joining me in studio this week, senior analyst Matt Argersinger and Ron Gross. Good to see you, as always, gentlemen. Hey, hey, hey, hey, you do.

We've got the latest headlines from Wall Street. We will dip into the full mailbag, and as always, we'll give you an inside look at the stocks on our radar. But we begin, once again, with a reminder that investing, is not for the faint of heart. This week, the NASDAQ officially entered bear market territory, down more than 20% for the year. The Dow Jones Industrial Average and S&P 500, just a few percentage points away from that mark. And on top of everything else, Ron, we're tipping this on Friday afternoon, and the prospect of a government shutdown at midnight is still very real. As our producer, Matt Gray would say, woof, this has been rough. We've erased

every single bit of gains that we got from the Trump tax cuts that took place in January. Market shot up. It was awfully exciting, although we kind of were robbing Peter to pay Paul, I think, a bit with those tax plans. But we're back to September 2017 levels here. Slow bleed, not one of those quick corrections. Never fun. I say, don't look at your portfolios too often. Don't look at your brokerage statements too often. Long-term investors should just sit tight, maybe even take advantage of it. But as you pointed out correctly before the show, Chris, the markets hate uncertainty, and we are replete with uncertainty. Yeah, that's right. I think as investors, we try to search for the reasons or the causes for

volatile times like this. And ultimately, there are no right answers. We really don't know what's causing it. I think we were discussing with the show, and we were throwing out dozens of reasons. and some stock. It's written down right here, so you know they're real. There you go. But the important thing to know is that stock market drops like this, 15% or more, sharp, painful, but they happen, and they happen roughly every few years. And it's not abnormal.

And it doesn't necessarily have to be a sign of bad things to come. Even if you look at the course of this bull market that we've had, we had similar drops in 2010, 2011. Remember 2011 when Europe was imploding and we almost defaulted on our debt, or it looks like we were going to? And then you had another drop in late 2015, early 2016, and the market bounced back each time to new highs. And so now, not saying that this is going to repeat like that process, but this has happened.

Well, and look, we focus on individual businesses. But this is one of those times that remind investors that the big macro still matters. And when it comes to macroeconomic things like the running of the U.S. government, Fed policy, trade with China. look out over the next six months. And Ron, it almost seems like it's easier to look at individual businesses and have a sense of where they're going in the next six months as opposed to all the macroeconomic stuff where what, if anything, can we be certain about? Right. What's interesting is the individual businesses taken as a whole adds up to the macro, right? So if you say,

well, I'm not going to worry about global growth slowing or U.S. GDP slowing. I can't predict that. Well, that's occurring because perhaps individual companies have slowing growth and interest rates are rising and that has consequences. And people are freaking out about the yield curve flattening and potentially inverting, which that gets a little, I think, behind the curtain a little too much. Let's not go that far. But individual businesses do add up to being the economy. me as a whole. And so when you look at a company, whether it's Apple or a company that does most of its business domestically, you do have to think about what are the growth prospects going forward and are they perhaps slowing. And if they are, then you do have to account for that

in your valuation. Yeah, all good points. I mean, I think there are macro things that we'll see, we'll see certainly with this earnings season coming up, but we might see some of these things kind of play out within the corporate earnings arena. And so the macro becomes the micro as we start looking at these individual companies. For example, and Ron mentioned it, you know, interest rates are higher, yields are higher. So not only does that mean the debt cost, debt service requirements for companies are higher, but it also means that risk-free rates are higher, so stocks have a little more competition. If your institutions or money managers, it's not so it's not stocks are the only game in town.

Now it's like, well, if I can get risk-free yields that are higher than normal, maybe I'm parking some more of my capital there as well. I'd say the housing market, we haven't talked a lot about that. It's slowed down legitimately. I mean, we've seen months after month of lower housing sales. And that, you know, you talk about the U.S. economy, that's a pretty big engine of the economy. That's slowed down. And then, you know, the big elephant in the room, the tariff issue that keeps coming up and popping up, and we don't know how it's going to play out. But there are companies that do trade overseas, that do have international customers. Input costs are going up, prices are going up. Either pass those on to the consumer or you lower your earnings expectations. So we'll see how that play. I do find it interesting, though, that all of the benefit from the tax cuts seem to have evaporated.

They did translate to real earnings growth, and that's perhaps what's driving this 3.4-ish GDP growth that we're seeing. So I agree it's probably a one-time kind of hit. It's not going to persist into the future, but it was real. So to give it all back is interesting to me. perhaps we'll see it show up down the road in the $1 trillion-plus share buybacks that occurred during this year, which when you lower the share accounts of companies across the board, that should eventually accrue to shareholders, if not in the short term, at some point, maybe we'll get that down the road.

This week, shares of FedEx had their worst day in 10 years. Second quarter profits look good. CEO Fred Smith, though, cut guidance for 2019, and he blasted leaders in the U.S. and around the world for, and I'm quoting here, bad political choices that have created macroeconomic slowdowns. And he threw in there Brexit, the immigration crisis in Germany, the tariffs in the U.S., the trade war with China. It's a little surprising to see someone like Fred Smith come out and be this vocal. Yeah. Well, and you like it too because I think you like when CEOs, especially someone like Fred Smith, who's built this phenomenal. business over decades, and he's been through multiple business cycles, multiple market cycles,

and you think he's got a lot of gravitas when it comes to speaking to something like this. But here's an example, I think, of where a situation, where the political climate, all these macro things that we're talking about, well, it's affecting a legitimate business. And FedEx, you're not surprised at that, just being the business they're in, of being a real legitimate part of international trade flows. So when their costs go higher, when the costs of their customers go higher, they feel that, and their volumes get affected. Well, and in terms of the guidance, I mean, this is one of those things that we see, and I don't know how you guys feel.

When it comes to the companies that are in my portfolio, I always prefer the leaders of those companies to be a little cautious with their guidance. I don't like to see too much excitement. I'd much rather see under promise and over-deliver. But in something like this, where, Ron, you've got a company in FedEx that is as much of a bellwether stock as any that is out there. the ripple effects of Fred Smith cutting guidance for 2019 kind of go beyond underpromising. Yeah, I would prefer just the best outlook they can provide. If you want to err on the side of conservatism rather than bluster, that works for me. But honest transparency, don't have an idea of what you actually think and then, you know,

cut it back on purpose just to be conservative. I don't like that. Come on, sandbagging. Yeah, not my thing. That's a tried and true tactic when it comes to earnings growth. Our email address is Radio at Fool.com. Question from Eugene Tang who writes, I bought shares of Amazon at a price of $1,890.

And I will just add parenthetically, right now Amazon's about $450 a share lower than that. He writes, based on the current selldown for tech stocks, particularly Fang stocks, would you recommend to average down the Amazon shares or purchase the shares of a company that I have not owned, like Apple, Microsoft, or Alphabet, which are the most attractive fang stocks based on the current market value that you would consider getting or increasing in stake? Really, kind of two questions there. And the first one, I think, is the question about which is the most attractive fang stock right now? We can get to that in a second. But I think the first question there is one that I think we've all dealt with at one point or another. I bought company at X

for the following reasons that I think it's going to grow. It's now lower than that. So do I add to it? Or like, typically, do you add to a stock that has dropped because you think, hey, I'm getting it at a cheaper price, or do you ascribe to it like, no, I'm just going to let it go where it is? No, often I will add to stocks that have dropped. But I've conflicting thoughts here because it reminds me back in the early 2000s when telecommunications equipment stocks were on fire. And then we got the internet bubble bursting and the telecom equipment bubble bursting. And it was like, ooh, this is going to be great. I'm going to pick these up on the cheap,

especially some that I never got. And you know what? They never came back. So don't think too high level, almost don't think of it as an industry or a sector. Look at the individual companies behind those decisions and see if you're comfortable adding or buying for the first time. Yeah, what's simply you could ask, what's the reason a company like Amazon is down 30% from when you bought it or any of these stocks? And I think if the answer is, because the market has fallen. And maybe these companies were highly valued as well. I think you can make that argument. But in most cases, I think it's okay to average down as long as the stock is down for reasons beyond its own business or its own earnings and things like that.

I tend to shy away if there's a fundamental reason if a company reduces guidance or changes its business and falls. That's when you want to be a little more careful. Is there one of the fang stocks that looks particularly cheap? Because it seems like they're all, As we talked about earlier this fall, Maddie, at one point we were talking about sort of the big tech stocks in China. And they were all, it was almost like they were a dance line. They were all down roughly the same amount. And it kind of seems the same way with the fang stocks.

Yeah. I mean, there's always two sides of every analytical story. There's always pros. There's always cons. But Apple at 12 times earnings is as much of a no-brainer as I think you're going to find out there. that there's growth issues, and there's, you know, unit sales are perhaps slowing, and there's always two sides, 12 times. It's priced for very little growth here. This is a stock you should

own at these prices. Great. Apple, Apple looks very, very cheap. Amazon's always been my race in this fang for some. And that's because I just, the business, I think, has so much more potential than the other four. And I really think, I mean, I never expected Amazon to fall as much as it has in this downturn we've had. It might be one of the last chances to get it below a trillion market cap. We'll see. Coming up, we have a special holiday message for our friends in the sports talk radio industry. Details next. You're listening to Motley Fool Money.

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Welcome back to Motley, Full Money. Chris Hill here in studio with Matt Argusinger and R. Ron Gross. On Friday, shares of Nike were up 8% after second quarter profits in revenue came in higher than expected. Ron, can I interest you in double-digit profit growth? This is a really strong report. As Mac was saying before the show, it's like Under Armour, but good. As an Under Armour shareholder, I take offense to that. I'm sorry, I'm a Nike shareholder, so I'm pleased with this report. It's really, really solid. Revenue up 10%, earnings up 13%. Their digital program working really well. North America up 9%. Greater China jump, 26%. Across the board

geographically, really positive results. Converse, a lot of folks don't realize Nike owns Converse, up 6% as well. Gross margins widening. So, you know, that accrues to the bottom line. They're buying back stock, $1.3 billion during the quarter of stock purchased. They've repurched $180,000.8,000. 83 million shares since the program began. The company is doing really, really well. And I think this is one example. So here we are. It's mid-December or late December, and we're kind of outside the normal earnings season. We're in Nike reports in this time. This is why I can't wait until late January, early February, because I think we're going to start hearing from companies. Obviously, Nike's business is doing really well, and I'd like to see

if that's across the board. And it'll give us a better indication of where we are in the economy where we are with corporate confidence. So, nice to see from Nike. I should have checked. I wonder if Foot Locker is up on this news because a lot of their inventory relies on Nike. And if the sell-through is as strong as it looks, the Foot Locker, I would be up in sympathy. Well, and the online sales that Nike has consistently put up and sort of increasing that has really been impressive because that was something when they first started.

I think there were some legitimate questions about how sustainable that was. But, of course, that was a few years ago when Sports Authority was in business where those bricks-and-mortar retail stores were more substantial for Nike. You know, a few months ago, Nike put out that ad with Colin Kaepernick and the tagline, Believe in Something, even if it means sacrificing everything. And I think we talked about on this show how our colleagues in the sports talk radio industry just decided all of a sudden they were all business analysts and saying, oh, this is going to hurt their business.

You know, people are lighting their Nike stuff on fire. And on this show, we said, you know what? Mark Parker's been running that company for more than a decade. it's possible he knows what he's doing? Maybe give him the benefit of the doubt on this one. It's nice to see, right? It kind of warms my heart a little bit that consumers did not go the other way on this. I remember at the time it reminded me of that Charles Barkley ad from the mid-90s. And it's just Nike has a history of kind of pushing the envelope, so to speak, with their advertising. And it's worked wonders.

Rough week for Twitter. Sharets fell 25% after Citron research put out a report calling Twitter the Harvey Weinstein of social media. Matt, Twitter can be a rough place and especially a rough place for women. Even for Citron, this seems untoward. Yeah, it does. And it's a shame that something like Citron still has as much influence as they do in the stock market. But we all use Twitter. Chris, you and I, I know, I know we use pretty extensively. Some of the behavior on the platform, let's say, is, you know, not all that great. And I think what Citron was reacting to was this amnesty international study that really

just showed, you know, how difficult it is really, especially to be a woman on the platform, especially if you're a woman in the media and kind of all the, you know, for lack of a better word, hate that you kind of get on the platform. And it's troubling and it should be taking seriously. But I think Jack Dorsey and his team, they're working hard to curb as much as possible. but there's always a fine line there, right? You don't want to threaten free speech, and you don't want to hurt the anonymity of the platform, which I think makes it appealing to a lot of users on Twitter.

And, you know, at the end of the day, I think this is true for all these platforms. Advertisers follow audience. I don't know who first said that, but it's true, and I think if you look at Twitter with over 300 million active users, I don't think advertisers are going to step away from that. I mean, I think even today advertisers are looking for platforms

outside of Google and Facebook, and Twitter's an appealing one to look at. So I think the study, he's troubling, I don't think it's going to have much impact on Twitter's business in the near term. Well, and for those unfamiliar with Citron, I mean, this is, all of the big Wall Street firms, they've got their reports that they put out, their upgrades and downgrades. It seems like if Citron is in the news, it's because they've basically put out a short report. Oh, that's right. And they're most certainly, I don't know if they've disclosed it,

but they're most certainly short Twitter before they've issued this report. That's just how they roll. So, you know, take that for what it's worth. Shares of Jack in the Box popped late in the week after the company announced it is, quote, exploring strategic alternatives. I'm surprised by this, Ron. This is a restaurant that I think of as doing well. And certainly over the past five years, the stock's beaten the market's return. Up 60% over the last five years. This year struggling, down almost 20%.

We can get into Jack in the Box specifically, but it's been really interesting. A lot of M&A activity in this restaurant space. Be Wild, Sonic, Panera, Popeyes, Bojangles, lots of folks seeing perhaps some value in the space, and they're gobbling up some of these companies. Jack in the Box, as you said, they're exploring strategic alternatives. They're saying if they don't come up with a buyer, they're going to put a new capital structure in place in the first half of 2019. Their debt levels are a bit out of whack, so that could lead to a bond issuance, for example. Activists, Blue Harbor and Jana have been folks that have been really pressing for them to do something to increase value. And they've been complaining about the capital structure, margins, capital allocation, franchise mix, pretty much the kitchen sink.

Jana did strike a deal with them to get two independent board members, and I'm sure they're pushing for this sale too. They did sell Kudoba a bit a while ago to try to kind of increase some shareholder value unlocking it with that. So we'll see. I imagine a deal will get done. Next week on Motley Full Money, we're going to have our year-in-review special. The week after that, we're going to have our 2019 preview show, so you don't want to miss that. Are restaurants in the stay-away category? Because it kind of seems like they are. I've never been excited about restaurants the same way I've never been excited about specialty retail.

It's a very tough business. As a private investor, restaurants are one of the worst investments you historically could make. All right, Ron Gross, Matt, Argusinger. guys, we'll see you later in the show. Up next, author Jillian Zoe Siegel shares some insights from her book, Getting There, a book of mentors. Stay right here. This is Motley Full Money. Welcome back to Motley Fool Money. I'm Chris Hill. A D student, a law school reject, and a guy with a crippling fear of public speaking. They are just a few of the people that you will meet in Gillian Zoe Siegel's book, Getting There, a book of mentors. Siegel spent five years interviewing successful business leaders and exploring what's behind their achievements.

Earlier this week, producer Matt Greer talked with Siegel about her book and The Secrets to Success. Now, Jillian, there are a lot of books out there about success and leadership. What got you interested in writing getting there? I grew up without a mentor, and I always used to look at people and wonder, number one, how they've found their career path. and number two, what would make each individual successful? What kind of qualities did that person have that other people didn't have? And the best way to figure all this out was to say I was doing a book on it, and it gave me an excuse to meet with these 30 luminaries and just be as nosy as I wanted to be.

And what's the biggest thing you now know about success that you didn't know before you started writing the book? I think it all boils down to resilience. Everyone gets knocked down and knocked down repeatedly, you know, in big ways and small ways, and personal ways and in ways that just have to do with your career. But the trick is to just get back up and try again or take a hint and change course a little bit. but I think that would be the one thing that every single person has in common. And what do you think the biggest misconception is when it comes to success? Hmm.

Well, one thing that's really interesting is it does not matter what school you went to. That, you know, a lot of people in my book who were chosen solely because they were successful in their field and I admired them. And I think eight of them did not graduate college. That's interesting. And what else surprised you as you were writing the book? One of the things that really surprised me was how important being good at sales is. How important good communication skills are. So basically a lot of people, Sarah Blakely is one of them who founded Spanx and John Paul

DeJoria and who's the founder of the Patron Spirits Company and John Paul Mitchell Hair Systems. They talk about, you know, door-to-door selling as being the most pivotal experience in their life because it really taught them, number one, resilience, but number two, how to be a good communicator and get other people to follow what you want them to follow. And let's talk about a few of those people you profiled. And because we're a show for investors, let's begin with Warren Buffett. Now, Julian, when a lot of us measure Buffett's success, when we think about Warren Buffett, we think of his incredible track record as an investor. And we think about the incredible amounts of shareholder value he's created at Berkshire Hathaway. But I learned from

your book that his dad really taught him that the inner scorecard is what really matters. Yes, absolutely. I think that one of the reasons Warren Buffett is so successful is that he has good values and people want to do business with him and people want to make him proud. And he learned a lot of these lessons from people in his life and his father was one of the, you know, the biggest influences. And he basically said that you've lived a successful life if at the end of it, the people who you want to love you do.

And if you're just the kind of person who has your name on, you know, hospital wings or buildings, but you don't have full relationships, you're just going to have an empty life. And let's talk a bit more about that. Buffett said that one of the best pieces of advice he ever got, courtesy of his friend Tom Murphy, quote, Warren, you can always tell someone to go to hell tomorrow. Yeah, that's one of my favorite quotes in the entire book. And actually, I go to the Berkshire Hathaway annual shareholders meeting every year, and I get to actually see and hang out with Tom Murphy.

So that's a thrill, because I just love that piece of advice. Basically, he's talking about controlling your temper. And a lot of times people spout off without thinking. and especially in this day and age, once something is out there, you can't take it back. If you've sent an email or a text, it's there on permanent record. So basically, he says,

hold on to it for a day. If you still feel the same way tomorrow, you can tell them to go to hell then. You haven't lost your opportunity. And that's one of my favorite quotes because it's applicable not only to business, but to every aspect of life. It could be with your spouse or your child or your friend.

That is such wonderful advice. And you mentioned the Berkshire Hathaway meeting. And when I think of Buffett in those meetings, I think of Buffett and Charlie Munger holding court in front of thousands of people just for hours upon hours. And that's all the more amazing when I learned that Buffett, as a younger man, had this really crippling fear of public speaking. Yes. Up until the age of, I think, 20 or 21, he was so afraid of public speaking that the thought of it

would literally make him throw up. And he, you know, lived his life so that he didn't ever have to find himself in front of a crowd. He would avoid classes in school if they made you speak in front of the class. And then one day he signed himself up for the Dale Carnegie Public Speaking course. And basically it changed his life. And if you go to his office, which is where I went to interview him, he has his Dale Carnegie Public Speaking certificate framed on the wall. And he says that that certificate had more of an impact on his subsequent success than any other degree he has. And basically, it goes back to communication because he says that no matter what business you're in, you want to get people to follow you. You know, if you're in sales, you want people to buy what you,

what you are selling. If you're a manager, you want people to follow you in business. So he says that good communication skills makes all the difference in the world. And let's talk about Spanx founder Sarah Blakely. When you think of Sarah Blakely, what resonates, what really stands out about her success? Her persistence. You know, she founded Spanx, and she actually kept the idea secret for a full year while she was working on it. She told her friends and family that she was working on an idea, but she didn't tell them what. And when they finally told, when she finally told them what she was working on, they laughed at her.

and she says that she was already so invested in it that she didn't give up, but she said, you know, it's footless pantyhose. And people said, you know, if that's such a good idea, why wouldn't the big guys have done it? And they tried to help her by steering her away from wasting any more time on this. But, you know, her success story is like a story of resilience. back to that again, but she knocked down, you know, discouraged again and again, and she just kept up with it. And now we all know she's a self-made billionaire.

And I love the dinner table conversation that she was having growing up, because at her dinner table, her father would ask, what if you failed at this week? Yes. Basically, a lot of people, and it goes back to resilience again, a lot of people say, if you don't fail, you're not trying hard enough. And failure is just part of the process. And I think the sooner you can view failure as just part of the process, the further you're going to go. Because a lot of people will, you know, get knocked off course from a failure. But if you think of it as just part of the process, the next time you fail, if you pat yourself on the back and say, I'm doing what I'm supposed to be doing, this is just part of it. You'll end up going far.

And I love that, and it really ties into something that you mentioned in your profile of Boston Beer founder, Jim Cook. For those people who don't know Boston Beer, they may know Sam Adams, and Boston Beer is the parent company. And Jim Cook had this to say. He said, quote, people tend to think way too linearly about career paths. The path didn't appear to me until I was 34, and my wanderings are what prepared me for it. Is that a recurring theme with a lot of these people where there's not necessarily this A to B line to success, but the success comes from discovery, from grinding it out, from trying different things? Yes. It's a big theme. A lot of people say that you can't always understand how an experience is going to play into your career, but very often they do. So he left business school. He was getting a joint business and law degree at Harvard, actually. And he left, and he became an outward-bound instructor mid-course. And he just sort of took time off. And that taught him so many lessons. Like you don't climb a mountain to get to the middle, you climb to get to the top. And it also taught him a lot about risk. He talked.

about perceived risk versus actual risk. And he says, he gives an example and says that a lot of people are afraid of repelling. That's when you're sort of tied to a rope and you walk off a cliff backwards. He says a lot of people are afraid of that, but that's really not dangerous. You're tied to a harness. It could lift a car. You're pretty safe. but walking on a glacier at a certain type of year, that doesn't appear like it would be dangerous,

but really you're at a big risk for an avalanche. And then he compares that to business. He had a job at the Boston Consulting Group, and he really wanted to leave that job. He wasn't happy, and he wanted to start a beer company. And for so long he was afraid to do it because he thought it was such a risky thing to do. And then he realized that the real risk was staying in his job at the Boston Consulting Group that he hated and just living the rest of his life unhappy. And that if he didn't go out there and try, the only thing that he knew for sure was that he would just stay where he was and be unhappy. How about this is the wild card question, someone that we haven't yet talked about that really resonant.

with you. Okay. One of my favorite people in the book was Craig Venter. His full name is J. Craig Venter. And he was the first person to sequence the human genome. But watch out because I could speak for an hour. So you'll either have to edit me or just read that essay. But he is the most amazing story. And I'll give you a couple bullet points. He got D's throughout high school. The only reason he even was allowed to graduate high school was that they did not want to see his face again. So they made him write an essay that nobody else had to write so they could pass him and just get rid of him. Then he decided to not go to college and just surf. And he had a couple jobs. One was putting the price tag on toys at Sears and the other was driving a fuel truck at the airport.

Okay, the story goes on and on, and he ended up being like one of the most important scientists of our time. You'll have to read it to see why. That sounds great, Jillian. I have actually been here long enough that we interviewed Craig back in the day. And as you may know, when he first mapped the genome, it was not without controversy because he used his own approach. I think it was called the shotgun method. And some people felt like that he was cutting corners and that it was a bit of a shortcut. and he had this ongoing rivalry with the head of NIH.

And so I just remember, among other things, he was a very controversial figure at the time. Absolutely. So basically, he ended up going to Vietnam to the war. He was drafted. And that kind of changed his life. And he realized in the end, and you have to read it once again, because it's a long story. he talks about an attempted suicide when he was there. And then when he decided he wanted to live,

he decided that he wanted to help people. So he went back to community college, and he learned how to learn. And he eventually knew that if he was a scientist, he could help more people than if he was a doctor. And he got a cushy job at the National Institute of Health, and he was trying to sequence the human genome. him with a team. But he thought, okay, this is a nine-year plan. I think I know a way we could do it

in one year. And no one would listen to him. So he quit his job, and he raised his own money, and he ended up doing it in a year. And it's just an incredible story. But all of his earlier critics, when it's very threatening when somebody wants to do something new and different. It was threatening to the way the government was, you know, going about it. So he was really attacked and criticized. But now all those people use his method, which was called shotgun sequencing. The book is Getting There, a book of mentors. It's available everywhere you find books.

Coming up, we'll give you an inside look at the stocks on our radar. Stay right here. You're listening to Motley Fool Money. As always, people in the program may have interest in the stocks they talk about in the Motley may have formal recommendations for or against, so don't buy or sell stocks based solely on what you're here. Welcome back to Motley Fool Money, Chris Hill here in studio once again with Matt Argusinger and Ron Gross. On behalf of everyone listening from everyone at the Motley Fool, we wish you a very Merry Christmas. And hey, if on Christmas Day you happen to get under the tree an Amazon Echo or a Google Home Assistant, two things. One, you can listen to our podcasts on those.

For sure. You can also get the Motley Fool's daily news briefing. Just look for the Motley Fool on your app and then just click subscribe and you're good to go. Seven days a week, Ron. I've got it. I've got it at my home. All right. Let's get to the stocks on our radar and our man behind the glass. Steve Brodo is going to hit you with a question. Ron, you're up first. What are you looking at?

I'm going with Carter's CRI, leading manufacturer of children's clothing in the U.S. Dominant position in that industry, children's apparel, strong brands has scale advantages, strong financial performance over multiple market cycles. Now, there are some short-term problems that have caused the stock to fall by about 30%. Of course, the markets week, the Toys R Us bankruptcy screwed around with earnings in the short-term. Problems with a China licensee hurt that entry into that market. But, again, I think those are just short-term. Bies back a ton of stock, dividends growing, 2.3 percent yield.

Steve, question about Carter's? So this may sound kind of weird. but what about Carter's getting into adult clothing? I think that's a very competitive industry, and they should stick to their lane. Wow. Matt Argusinger, what are you looking at? Well, I spoke about Berkshire Hathaway

on yesterday's Market Foolery podcast. This is, you know, you're looking at this market. It's been volatile. What am I going to buy? And I would say, if you want something with very low downside, at least from my perspective, look at Berkshire Hathaway, Warren Buffett's buying back stock.

today, I guarantee it because Berkshire stock is trading roughly 1.3 times book. But Buffett has kind of modified his approach there. He used to be buying at 1.2. He's elevated that a little bit, looking more at an intrinsic value estimate. He's been buying the last couple of quarters. It guarantee he's buying now. So I think you've got limited downside in the stock. But you also have a business overall that's growing earnings 8 to 9% a year, looking for a nice 10% annualized return. I think you can do worse than look at Berkshire Hathaway. Here, Steve? So with the company like Berkshire, which has a pretty hefty price tag, even on the B shares. Do those move as much as stocks that are priced more cheaply?

Yeah, they can. I mean, look at Amazon. Amazon was trading over 2000 a share, and it's down 30%. But I think Berkshire, just the nature of the business conglomerate, it's not going to move as much. And if you look at it, it hasn't moved as much as other stocks in this downturn. Steve, I've got a stock on my radar this week. What? What? It's ICHEE. It's ICHE. Tickr symbol is IQ, aka the Netflix of China went public. Earlier this year at 18, got up to the mid-40s, now it's down to 15.

It's the number one stock on my watch list, Steve. Question about ICHE? Are they showing films that are based in China, or is it international? Is it the whole catalog? It's the whole McGillow, Steve. Okay. Interesting. Three stocks, Carter's, Berkshire Hathaway, ICHE.

You got one you want to add to your radar? I may have to take a look at ICHE. I got to thank our man, Maddie Argus. for bringing this one to the tail. It's just, it looks so cheap. But interesting, did they have growth potential outside? Like Netflix is expanding overseas. China's kind of a big market. I get that. But is there any global opportunity there? Global, not so much. Probably not. But 80 million users now, probably going to have at least 200 million users within the next few years. So, and that's just China. Yeah.

Ron Gross, Matt Argusinger. Guys, thanks for being here. Thank you, Chris. That's going to do it for this week's edition of Motley Full Money. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. Merry Christmas. We'll see you next week.