Motley Fool Money - Blizzard 2016: Winners and Losers

Episode Date: January 22, 2016

Which companies will be the big winners and losers from the East Coast blizzard? Our analysts discuss that story and delve into earnings news from American Express, Netflix, and Southwest Airlines. Plus, Motley Fool columnist Morgan Housel talks market volatility. For a free preview of our Supernova service, go to www.SupernovaRadio.Fool.com .     Learn more about your ad choices. Visit megaphone.fm/adchoices

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I'm Chris Selling me in studio this week from Million Dollar portfolio, Jason Moser and Matt Argusinger. And from Motley Fool Pro and Options, Jeff Fisher. Good to see you, as always, gentlemen. Hey, hey, hey. We have got the latest earnings from health care, airlines, restaurants, and more. We will dip into the full mailbag. And as always, we'll give you an inside look. the stocks on our radar. But we begin this week with Blizzard 2016.

Oh. Yes, with the storm poised to cause problems from Washington, D.C. to New York City and all points in between. Let's look at this storm through the lens of investing. And Maddie, I'll just start with you as a Massachusetts native. You've got no problem dealing with the snow. But let's face it, there are businesses out there that are going to have problems. And I'm curious, when you look at this and you think, okay, who's going to benefit? Who's going be hurt by this? Well, my Sunday's set, because I'm watching the game.

Of course. No, there is. I mean, if you're a restaurant, a business, and you have a substantial amount of real estate, restaurant real estate on the East Coast, you're hurting this weekend because those are big revenue days that you're going to lose. And so any kind of establishment where it's a service establishment or a retail establishment where people, you're used to having customer traffic, particularly on the weekends, you're especially hurt.

Jeff? Some that benefited included, of course, grocery retailers. hardware stores. My wife was at one this morning and said they were sold out of sleds. People were lined up at six in the morning to get the sled delivery, believe you or not. One company I know will benefit is O'Reilly Automotive. They benefit whenever there's extreme weather one way or another. A snowstorm, more parts on your car will break, and then you end up at the auto parts store. Yeah, we saw this last year with companies like AutoZone and advanced auto parts, that sort

of thing. What do you think, Jason? Yeah. I mean, I think what Maddie said there in regard to restaurants, that makes a lot of sense. I mean, those are sales they're not going to recoup. I'm not going to go to Starbucks and buy five more coffees on Monday because I missed my chance on Saturday and Sunday. Why not? I guess it's probably a bad example because I've got like five bags of Starbucks beans in the house already. But I mean, I, you know, Jeff mentioned hardware stores. I like the Home Depot's and the lows when it comes to these types of events because these are stores that really benefit in warm and cold weather, right? I mean, hey, if you need salt for your driveway

or a shovel, you can get it there. And man, you know what? If springs here and you need flowers to plant in the flower bed, well, you can get them there too. So those are stores that I think really benefit regardless of the weather. And I think the stores that have been having a lot of trouble going into sort of this season here, it's not going to be as viable an excuse because they've already been having trouble. And let's face it, some companies, I mean, we're going to talk about this earning season in a second. But next earning season, you know, Maddie, there are companies that are going to use this as an excuse and it won't be legit. It always is. I mean, you'll have semiconductor companies come out and say, oh, well, the weather

was really bad. We missed revenue. It just drives us crazy, but it happens all the time. Of course, we'd be remiss. We're going to talk about this company later, but I'd have to say there's going to be a binge TV watching this weekend. So, of course, Netflix is going to be a big beneficiary. And I'd say another one, Activision Blizzard, a lot of video gaming online as well this weekend. Even Google, maybe, on some small scale. You're bored. You're Google something. You too. Yeah. All right, let's get to this earning season. Fourth quarter profits for American Express fell 38%.

And that plus some dismal guidance for 2016, sent shares of Amex down more than 10% on Friday. Jason, that is a big move for a company like this. It's a very big move for a company like this. I'd like to say there's some silver lining to all of this, but maybe there really is. But you're not going to. I'm not going that far, Chris. I think it was just maybe a few marketfulery episodes ago, or I came out a little bit down on American Express.

and sort of what they've got to look forward to. As a cardholder, I love American Express, but as an investor, I don't think I really would. I mean, it's a fundamentally different story now going forward because the business was founded on the idea that wealthier cardholders are going to spend more money and they could therefore charge merchants more for those transactions. That's just not the case now. I mean, there are more cards out there than ever before, offering more deals, better rates, sort of better incentives there. American Express certainly has to compete with them. And then further, this has become sort of a political issue there in the interchange fees and what these card companies can charge. I think as time

goes on, and we see more and more people using these cards, they become more and more like a utility. And I think that really caps sort of the profitability side of card processors like American Express, like Visa, like MasterCard. At least Visa and MasterCard were sort of already founded on the notion of catering to the masses. But I think it definitely raises this question to sort of the greater payer, the card companies in general, kind of what their future may look like. Yeah, I will say there used to be some cachet to pulling out your American Express card, and with mobile payments or digital payments occurring, that no longer matters at all.

So the only avenue they can really win at right now, since brand is not as important, our services, cash rebates, those such things, but as Jason said, all the others are offering that as well. So competition has really heated up. Yeah, and I'd say, I mean, you can tell from the release, I mean, they are in full-blown cost-cutting mode now. So identifying growth on the horizon is really difficult to do. And for investors out there who are kind of thinking, hey, maybe this is a value right now for a really quality business. It's at a three-year low.

It is. And I would just encourage you to try to identify the catalyst that actually turns this story around because management couldn't seem to identify it. And I can't really seem to identify it either. And I'm not saying it doesn't exist. But before you invest in this thing, thinking it's a great value, just be careful in your you're not getting into a value trap. That's a good point, Jason. Management doesn't seem to have a view into how they grow again. But that said, I still own shares. I'm keeping them for now. The company still generates a huge amount of free cash flow and income and revenue even. And it wasn't all darkness.

It's, you know, some areas of the business are still growing. That said, will Warren Buffett trim his stake? Will he sell his shares? I will be watching that. This is one of Buffett's favorite stocks. Well, you know who else just sold shares? I mean, we're talking about this before is aping. Or a man behind the glass. Steve Brodow selling out of Amex? We'll ask him about that later in the shelf. He can't say anything about that. Starbucks first quarter profits came in higher than expected, but sales in China were a little light, and that was enough to spook at least a few investors to have shares of Starbucks

falling on Friday, Jeff. A little bit, Chris. And yet Howard Schultz is still very bullish on China. It was actually really encouraging to read his statements. He claims he may be the CEO who has traveled to China. More than any other CEO, American CEO, over the last 10 years. It's just conjecture on his part. What does he get like a championship belt for that? He got a pin.

I got a lapel. So he says he has a unique perspective to share, and he really believes that China can increase double per capita income by 2020 from 2010's level. So in about 11 years, double per capita income. and have 600 million Chinese people that are middle-income consumers. So he is a strong believer in China, and overall Starbucks did really well, 8%, 9% same store sales growth, record traffic internationally and in the U.S., digital payments, food sales taking off, as we've talked about here, Chris, the last couple of years.

If they can get food right, that's really going to drive, increase ticket sales, and it's happening. They're doing very well overall. That said, the stock is priced that way, too, at 30 times earnings. You know, I poke a little fun at Howard Schultz. It was eight years ago this month that he returned as CEO to Starbucks and shares up nearly 500 percent since he came back as CEO. So, you know what? He earned that championship. Did you see the pictures of the Starbucks they just opened in Kazakhstan? It was in Almaty, I believe. Just pictures in the opening day. The place was a madhouse. I mean, that is a brand that I think really is just translating globally, far better than so many people anticipated.

Yeah, really. They really understand brand and product, both in their stores and outside their stores. Their consumer packaged goods as well. And one more thing he said about China, which I thought was encouraging if he's right. He's a smart guy. He's gotten some things right. Well, he's traveled there more than any other CEO, so I'm sure he's right. He might be more Chinese at this point then. So he said the buffeting of the Chinese economy, as it is happening right now, is a necessary part for it to move on to its next stage of growth. He really believes that there's another

stage after this, and this is a natural kind of cycle. General Electric's core business did well in the fourth quarter, but they've also got some divisions that cater to the oil and gas industry, Maddie, and that's not going as well. No, not at all. It's really hard to gauge GE's performance right now, because the company's going through so many changes. They're shedding all their financial units. They're in the process of selling their appliance unit. They're moving to Boston, which I support that move. But it's hard. G.E., I wouldn't say, it's not really the economic bellwether. It used to be. It's much more about energy and aviation today. And, in fact, they've made a huge investment

in the energy space in recent years. And, of course, we know that that didn't turn out so well starting this year. So their oil and gas union, their revenue there fell 16%. Really offset everything good that was happening in the rest of the business. And the guidance for 2016 looks, you know, they've got a slight pickup and overall revenue, but pretty much flat earnings. It's hard to get excited about GE, especially with the heavy oil and gas bets, which I, you know, I just don't see having any kind of resurgence in 2016. So, Matt, you're not a buyer of GE. I'm not. I can't be. I would never probably be a buyer of GE, but it certainly can't

be right now. Shares of Netflix falling this week, despite fourth quarter profits coming in higher than expected, and Jason to pivot off what Jeff was saying with regards to Starbucks and how its stock prices value, I'm wondering if part of this is Netflix is a pretty richly valued stock. Yeah, I mean, it's richly valued. I think that, one, it's richly valued. I think that One of the concerns maybe is that domestic growth here is starting to slow down a little bit, which is understandable. I mean, you saturate a market at some point.

And certainly global growth is still there, but I think a lot of those assumptions probably have been brought forward to the stock price today, which is why its value the way it is. But I mean, let's be very clear, but this is a wonderful business that's doing a lot of great things. And Reed Hastings has really, to my mind, done a phenomenal job pivoting from essentially saying, we're going to take this one country at a time to basically just rolling it out in the entire world. That was 180-degree return there, and they've done it quite well, I think. Revenue is up 28%. And in the face of that, it would be streaming content amalgations are only at 15%. So as long

as they keep growing sales, more than they grow those streaming content omeligations, I mean, everything's hunky-dory, right? Domestic subs are slowing down, but international net ads are up 66%. And I think, really, at the end of the day, we always talk about the original content for Netflix. I mean, essentially trying to become more like an HBO, and they're doing that. They're going to focus on 600 hours of that original content this year versus 450 hours last year. Now, it's going to cost them a lot of money. They're going to probably have to take out some more debt here at some point. And I don't think that really changes for them any time in the near future. It just costs a lot of money to feed this beast.

But it's working as people sign up. It's a pretty easy expense to cover every month. And I anticipate that it will continue to roll out across the world and do well. As people hunker down for the storm, not just this storm, Let's face it, there'll be other storms this winter. What's one TV show or movie you would recommend? You know, I just recently started watching Showtime's Billions, and it's only two episodes in, and it's a little bit over the top, but it's sort of that Wall Street vibe there.

It's an interesting show, two shows in. I'm going to give it a chance. It's probably worth a look if you have Showtime. Jeff? You know, a kind of slow-moving, creepy but well-acted series was Bloodline on Netflix, set in QS. So, if you're in the middle of a blizzard, head to the Keys. That's right.

Another Netflix show, my wife and I just finished watching Jessica Jones, which I wasn't excited about. I mean, the whole superhero stuff is I'm getting a little tired of it right now. But that was a really well-done first season for Jessica Jones. I highly recommend it. Coming up, sure, we're paying less at the pump these days, but which companies are also benefiting from the low price of gas? Details next. This is Motley Full Money. Let's kick it.

There's a blizzard coming on. Welcome back to Motley Full Money, Chris Hill, here in studio with Jason Moser, Matt Argusinger, and Jeff Fisher. Southwest Airlines putting up record fourth quarter profits. Jeff, they're doing well on the operation side, but the low price of gas sure doesn't hurt. Low fuel costs certainly helped, even though Southwest hedges out some of the risk of fuel. But it's interesting, their hedge strategy going forward is they called it more conservative. And I tick that to mean they're not going to hedge out much. They're not too worried about energy the next couple of years. But they had a capacity growth last year of about 7 percent, and traffic

grew even more, it grew nearly 9 percent. You have a decent economy. You have more people looking to fly. And you have Southwest. You have fares holding up well. So the industry as a whole is expected to have record profits last year and possibly this year, too. Big Blue shareholders seeing red these days. IBM's revenue, for the 15th quarter in a row. And I'm not an expert, Maddie, but that seems like a trend. It is very much a trend. And I don't see it turning anytime soon, Chris. I mean, IBM, like GE, IBM's sort of in this big transition. They're going from low-margin hardware products to these higher-margined services. So, CEO, Jeannie Romani, she says, she calls it IBM's transition to a cognitive

solutions and cloud platform company. That's like perfect IBM speak. But my thing is, with companies like this, IBM, Oracle, Microsoft, even GE to a certain extent. They're in this transition. In a way, it tells me that they either miss some markets trying to play catch-up or they made some bad investments in the past. I think that's the case with IBM. I would just avoid companies like this that are in these restructuring and undergoing big changes. Well, I would throw Intel in there, too. Intel is one other one. We've talked about Intel recently. In some ways, it's almost like these companies are in a race. It's essentially, how quickly can we interpret?

innovate on this smaller thing that isn't making us as much money right now. And it's like a corporate game of beat the clock. Like, we just got to get this ramped up as quickly as possible because we're losing on the other side. Right. And I just, it's hard to see who comes out of this ahead in any way. And I think there's so much value for focusing as investors on companies that do one thing really, really well. Netflix, streams movies really well. Chippoli makes good, well, mostly healthy burritos. I mean, it's just one thing very, very well. And I just, IBM is kind of all over Yeah, Hewlett Packard, same thing. And then you have IBM. We considered shorting IBM

in Motley Fool Pro around $200 per share and didn't largely because Buffett was buying. So Buffett has cost me some money. You don't hear that very often. Damn, you Warren. Shares of United Health Group up this week after fourth quarter revenue came north of $43.5 billion, Jason. Profits also higher than expected. Yeah, these guys throw around numbers that just make you kind of wonder, did the numbers really go that high. Health insurance is one of those political hot potatoes. Everybody seems to have

an opinion, and nobody seems to quite be able to get it right. But it seems like United Health Care is one of those in the health space that is worth owning. I think that stronger growth in the optimum side of the business is what is really encouraging focus on health services side versus the insurance side. And that's really the faster of the two, faster growing of the two segments of the business. They're serving, you know, 129 million people now versus 88.5 million a year ago. The fact that they're able to grow so quickly on the optimum side gives them more ability to control costs on that side to contain any, you know, forgive the pun, hemorrhaging on the insurance side. Shareholders certainly have won with this one over the past five years.

It's handily at the market. When we look at the health space, we tend to really look at these big dogs first, and they're not many bigger than United Health Care. Next week, consumers in Japan will be able to sample the latest creative food offering from McDonald's. The McChaco Potato. Yes, the company says its famous French fries are getting the ultimate chocolate makeover. The McChaco potato comes with two types of chocolate sauce, regular and white, drizzled over the fries for a salty, sweet combo that you will not find anywhere else. I'm not sure you would want to. Who's in on this? What took them so long? I mean, come on. This has a 1980s written all over it.

Jeff's a fan. I've got a tremendous salt tooth. I mean, I mean, the sweet tooth I can do with or without, but I feel like they've just ruined a really good thing. Yeah, I don't know. Do potatoes and chocolate even go together? There's only one way to find out. They're like chocolate-covered potato chips, I think, so I've never tried it. Oh, those can be pretty good. I've tried those before.

Like caramel goes well with salt. You need the crisp, though. If it's crispy, then it's good. Chocolate and the chip, but with kind of soggy fries? Well, it's not just, to me, it's not just a salt and sugar combination, which can be very good. I mean, think of caramel popcorn, but it's like salt. sugar and grease combination. I just doesn't, it doesn't sound like a good mix to me. I just, oh. Let's bring in our man behind the glass, Steve Broido. Steve, you're interested in this?

You're going to give it a shot, you think? Absolutely. Chocolate and salt do make a very good partnership. But what about, I think Maddie's on to something with the grease factor there. I don't know what to tell you about that. He may be right. You're saying if your beloved Olive Garden offered something along these lines, you're going to give it a, you're going to take a shot at it. Give the old college try. Chocolate cover breadsticks. I mean, we'll find out next week. Here's the thing with McDonald's.

We'll know if this works if they bring it to the United States. They're going to test in Japan. If it works, they're going to bring it here. All right, Jeff Fisher, Jason Moser, Matt Argusinger, guys. We'll see you a little bit later in the show. Up next, the conversation with columnist Morgan Housel. Stay right here. You're listening to Motley Fool Money.

Welcome back to Motley Full Money. I'm Chris Hill, joining me in studio now, the one and only. Morgan Housel. Thanks for being here. It's the least I could do. I appreciate that because I feel like your particular brand of insight and expertise is needed more than it usually is. When you consider that in the past month, we've seen the S&P 500 drop more than 7%. The Dow Jones Industrial average dropped more than 8%. And the NASDAQ dropped nearly 10%.

Yeah. Small cap stocks are down 25% since. since July. The full-on bare market in small caps. You're a cool customer. Please tell me you're at least mildly freaked out by this. Freaked out is probably too far. No. No. Well, look, as much as I try to study the history of the market and market declines and preach about how common they are and you should take the long view, which is absolutely the right advice, as much as I say that, do I appreciate logging into my brokerage account and seeing it down 10%? No. Nobody does. And I think that,

think that's important to admit to yourself that even if you are a long-term investor and there's no way you're going to sell if maybe if anything you're looking at this isn't buying opportunity, it's okay to admit to yourself that you don't enjoy this. That's okay. I think there's too much in the media sometime of, oh, we love downturns because we're going to, it's a great opportunity and we love this. Why is everyone upset? This is great. Sometimes I think that's a little, that goes a little too far. It's fine to admit that you're a human being with emotions and you don't like seeing 10% of your net worth disappear. That's fine. That being said, for investors who are looking at this downturn and thinking,

you know what, some of these stocks, the business hasn't really changed all that much in the past month, I think I'm going to do a little shopping. And there are two right ways to respond to a bear market, only two ways. One is ambivalence and just, this is what's going on, but I'm not going to pay attention to it. I'm going to go to the beach with my kids. The second is to look at and say this is an opportunity, I'm going to buy a little bit more than I otherwise would. Those are the two responses that you should have. And either one is fine. It's fine to do nothing.

Most people will and should do nothing. But if you're going to do something, it's looking for opportunity. I feel like for all the talking we do about Warren Buffett, when you just mentioned one response is ambivalence. That seems like it's right up the alley of his right-hand man, Charlie Munger. He seems like a guy who's just like, yeah, whatever. This is what it is. Yeah, I think he said before he made most of his fortune sitting on his ass. Buy great companies.

Just sit back. Yeah. You had written something recently that gave me a little bit of pause, which was you wrote in relation to investors, some of you must fail. And you were very quick to point out, not that some of you might fail. Must. Must. Why?

Well, the reason that the stock market provides good long-term returns is because it is volatile in the short run. That's the cost you have to pay. That's why it provides higher returns than a bank account or bonds is because it's wild in the short run, up and down and up and down. Well, what makes the market go down? What is causing that volatility that creates good long-term returns? It's people freaking out and selling.

And if nobody ever panicked, the market would never fall. And if the market never fell, it would just get really expensive. And if it got really expensive, it wouldn't offer good returns. And if it didn't offer good returns, people would panic. And it's this thing where the market has to be volatile. That's what a market is. And volatility is just a reflection in real time of people panicking. So it is not only inevitable, but a necessary feature of markets that some people will fail.

And by fail, I mean selling at the bottom. Because the reason the market is going down is because people are selling. And hopefully that's not you or me or any of our listeners. But someone in the market, who knows who it is, someone is going to have to have a bad time. You know what's far less expensive than it used to be is the price of oil, which continues to fall to the point where it is at its lowest level since 2003. Oil is 25% cheaper today than it was in 1990. Do you remember 1990? I bet we have people who work at this company who are not born in 1990.

That's almost certainly true. Austin, the guy behind the glass, not born in 1990. How are we supposed to look at declining oil prices? Because it seems like one of those things that for some investors who maybe don't have any exposure directly to oil stocks, they think, well, that doesn't really affect me. And yet, it is one of the most frequent headlines, and certainly one of the biggest business stories of the last, I'm going to say, 18 months. Yeah. If oil is your business, this is one of the worst things that might ever happen in

your career. This is bigger than 2008 if oil is your business. But oil is not most people's business. And what most people's businesses, or one of their biggest expenses, I should say, is buying gas and buying heating oil in the winter. And something like this clearly benefits them. I think when you look at the price of oil plunging, you have to keep one thing in mind. There are two reasons that oil or any commodity or stock or whatever will fall in price, either because you have too much supply or not enough demand. In 2008, when oil was plunging, it fell from $140 a barrel to $30 a barrel in 2008, 2009. That was clearly because of a lack of demand, because the global economy ground to a halt.

So oil's decline was indicative of mass economic doom. So back then, you could look at the decline. in oil and say, this is not a good thing we're looking at. Today, overwhelmingly, not entirely, but overwhelmingly, the reason oil is plunging is because we have too much supply, because U.S. oil producers in Texas and North Dakota have just exploded their supply over the last five years, because sanctions in Iran have come off because OPEC and mostly Saudi Arabia just keeps pumping and pumping full bore. You add all that up, and we just have too much oil sloshing around in the world, but it's not necessarily indicative of global demand, like the entire global economy is

slowing down as it was in 2008. China's economy is definitely slowing down, but most of the world is kind of chugging along right now. So if people look at the press of oil and say, what's going on, is this indicative of a coming recession? I doubt it. Most of the world is doing pretty okay right now. You're listening to Motley Full Money talking with columnist Morgan Housel. Let's get to Some of the headlines that we've been seeing recently, you just sort of touched on this. We talked on last week's show about the hysteria in the media. And I don't think hysteria is too far off the mark when I use that word. Because I know they're trying to get someone to buy a magazine or a newspaper or click on a link.

But some of the headlines over the past few weeks, when you see things like sell everything and even one of our listeners had written in a headline. that he saw that he wanted me to flag for you, which is the stock market hates the eighth year of an American presidency. Wow. I mean, it seems like it's a bull market for people who want to prognosticate that everything's going to hell. It's a bull market for something else that starts with B and ends with us.

But, yeah, I mean, as someone who consumes a lot of financial news, I guess I'm kind of immune to it. because if you follow enough headlines and pay attention to the subsequent outcomes connected to those, you really realize that headline writing and a lot of financial media in general is not connected to reality and is definitely not something that you should read a headline and then log into your brokerage account and act on it. That's really dangerous. Most financial journalism is a form of entertainment. And it's important for readers to know that.

A lot of times the journalist thinks you understand that. But a lot of readers don't understand that. That is really a form of intellectual entertainment. So who are a couple of the people that you like to read, thoughtful, engaging, and help to give you perspective and balance, particularly, as I said at the top, when the market is having the kind of volatility that we've seen over the last few weeks? Some of the people that I follow on Twitter and our friends of mine, but mainly Twitter, is where you can see their content in action.

There's an investor named Ben Carlson, often confused with Ben Carson. I was going to say. Different person. Okay, not running for president right now. He is entirely sick of that comparison. But I just did it again. Ben Carlson with an L. He's one of the smartest investors I think I've ever come across.

And he's just a really nice guy, too. He's on Twitter. He runs a blog called A Wealth of Common Sense. He also wrote a book by the same title. and he's just, I would just describe him as hyper-rational, but also very bright. He's a great guy to follow. Another guy I follow on Twitter named Michael Batnik, he writes a blog called The Irrelevant Investor. He too is just a great guy.

He provides a lot of market history and psychology in just really quick, short investment takes that you can read in one minute but provide a lot of insight about what's going on. And he, too, is just a very rational person. And these are not people that are going to get excited with big headlines or freak out. They're really people that put the market into proper perspective and help you get a proper mental mind frame. One of the things that you do in your writing is frame or in some cases reframe a way of thinking. Because, again, a lot of the headlines are framed a certain way. and I find that one of the reasons I enjoy following you on Twitter is because you will reframe

things. And you had written something recently about what the market decline means in terms of your 401k plan. I never really thought about it in that sense that, like, oh, my contribution that I make every month is actually doing a little bit more heavy lifting. Right. Because the market fell over the last week, your next 401k contribution will acquire more shares in that contribution. because shares are cheaper now. So I think if you said, if rather than you said, the stock market fell 3% today, if you reframe that and say, your next 401k contribution, you will acquire two or three percent more shares than you would have yesterday. Both of those statements are

true, but I think the second one is a better context for what most investors are after, which is not current returns, but future wealth accumulation. Those more shares that you acquire today because the market fell over the last two or three weeks is going to pay off, likely will pay off, down the road between now and whenever your goal is, if your goal is retirement or whatnot, down the road. It's hard for people to think of that because when they see a lot of red lights flashing and blaring headlines and watching their net worth decline by 10%, it's easy to just take the automatic pessimistic view of stocks fell 3%. But if you think of it as, you know, you can now acquire more shares. And most people do sort of dollar cost average in the

401k. They're just making purchases automatically every two weeks, each paycheck. Those people absolutely benefit from things like this. It's just hard to wrap your mind around that. You can follow him on Twitter. You can read his stuff. See, this is why I love having you on the show. I always feel better when we have conversations like this. So, Morgan Housel, thanks for being here. Good to be here. Coming up, we'll give me an inside look at the stocks on our radar. Stay right here. You're listening to Motley Full Money. And speaks to me of flowers that will bloom again in spring. 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. I'm Chris Hill, and joining me in studio once again, Jason Moser, Matt Argusinger, and Jeff Fisher. Guys, a couple of housekeeping notes before we get to the stocks on our radar this week. Happy to say that for the third week in a row, I think this is a record, third week in a row on Motley Full Month,

we get to welcome a news station. It's KITZ AM-1400 serving the Puget Sound region in Washington State. Nice. That's so momentum, everybody. Any of our folks in the Seattle area, check it out. Pressure is on now. I want four weeks in a row. I'll see what I can do. Mani Orgasinger, we talked about this recently. One of the services you work on, our Supernova

service, it's one of our services here at the Motley Fool that's open just for a limited time. For folks unfamiliar, this is a service. By the way, we talked recently about the the market volatility. You go back to when Supernova launched four years ago, the market was launching at a time, kind of like what we're seeing right now. I remember those days very well. We came out of the gate in March 2012 with the Odyssey One mission, which is the portfolio I'm in charge of. Same thing. The market was very volatile. A lot of our early recommendations were just all over the map. I mean, some, you know, we, I remember specifically buying Netflix, for example, really early on. It was down 20 percent within a month.

always a good feeling. Well, yes. It hurt. But I see the same thing happening right now. We're launching Supernova, and we're also launching a new mission, Odyssey 2, which really follows in the footsteps of the portfolio I'm running. It has kind of the same charter, the same goals, really investing in some of the best stocks from Rule Breakers and Stock Advisor and building real money portfolios. And that team, it's David Kretzman. He has a great team. Brennan Matthews is also on the team, a great analyst we have here. And they're picking stocks in an environment. I'd love to be picking stock's in because I think there's so many bargains all over the stock market, but especially

in the Supernova universe. And if you join now, you kind of see their first three picks right off the bat this coming week. So for more details, go to supernova radio.fool.com. That's supernova radio.fool.com. It's a free microsite with a lot more information on the service, including videos with Matt Argusinger, David Gardner, David Kretzman, and others. Radio at Fool.com is our email address. Question from Jay Wozniak, who writes, as a state, stakeholder in UPS, I'm a driver and a shareholder, how concerned should I be for my career and long-term value of my shares regarding Amazon's new approach to jumping into the delivery space?

I recently finished reading the book, The Everything Store, and it seems like nothing is out of Amazon's reach. Thank you and keep up the good work. Great question. And yes, for anyone who's read The Everything Store, the profile of Jeff Bezos and how he has grown Amazon, Maddie. surprise that it's one more industry that they're looking into the delivery space. Well, and Jay's right on. Before I read The Everything Store, I really thought there were

some markets, some industries that Amazon really just probably wouldn't get into. And one of those is shipping. I mean, it's very capital intensive, as Jay probably knows, very labor intensive. But I agree. I tend to agree. I don't think there's anything out of Jeff Bezos' reach. They've made significant investments kind of getting into that zone. Jeff's probably I got some stats behind that. But I don't think Jay has to worry about his job anytime soon, although maybe at some point he might be working for Amazon, not totally out of the question. Yeah, and no single customer accounts for up to 10 percent of, or more than 10 percent

of UPS's revenue for one. And two, only about 40 percent of their revenue as a whole is from the U.S. So it's, and to what you said, Maddie, too. If Amazon's really going to seriously get into this, it's going to take them years to build it out and to do it. And Amazon already uses all kinds of different delivery services. So, you know. Jay, you're in good shape. Yeah, you should be fine. All right. Let's get to the stocks on our radar and we'll bring in our man. Steve Brodo

from the other side of the glass to hit you with a question. Jeff Fisher, you're up first. What are you looking at this week? Well, I don't know. I like to say this is being flexible, but it could be just plain being stupid. So I usually buy, as you know, Chris, things like Visa or Gilead or things that are really compounding cash flow for many, many years. But American Airlines is what I'm looking at again. Tigger is AAL. I looked at the airline industry about a year ago and just found that I think it has really

changed. I think the profits may be here to stay. So these shares look really cheap. They're at about five times earnings, and they should have, just like Southwest, record results this year. Once again, they don't hedge their fuel costs at all, so they're really enjoying these low prices. That said, the market has only sent it lower in the year that I've been following it. The market needs to believe that American Airlines can stay profitable for the long term.

Steve, question about American Airlines? Jeff, you travel quite a bit. Do you actually enjoy flying? I hate it. It's becoming worse. Every year, it seems like it's getting worse. I look at the airlines, and I just don't feel the love. You know, I had an experience on American recently that made me not want to fly. But whenever I fly Southwest, I'm happy to. I get a lot done on an airplane. I kind of love the isolation of, well, you have Wi-Fi. But you have you. You're on a plane, you must, you can't get up and move around. So I get a lot done

on planes. I like flying. I actually thought about flying just to get some work done. Jason Mozer, what are you looking at? Yeah, it's been an on-again, off-again relationship with this one. I think it's turning to on again. It is Panera. The stock has been stuck kind of in neutral here the past couple of years, but I think that's for good reason. We've been a bit critical of their sort of in-store experience and throughput and how that's sort of shaking through the numbers. But, you know, Maddie and I were talking about this the other day, and we had that one across the street from us now here at Fool HQ, that is very convenient. It has the, you

can order on the computers there, and you don't really have to do a whole heck of a lot. It seems like they get the orders right. You don't have to talk to anyone, just get your food. Yeah, I mean, and so it's a very convenient service, I think, and it just has impressed me that maybe that Panera 2.0 initiative is starting to take hold here. So this is one I think that I'm going to start looking at for MDP a little bit more closely. And the ticker? PNRA.

Steve? you categorize, Padera. It just seems like a place that sells a bunch of different kinds of food, sort of. There's nothing unique. It's some bread. They've got coffee. It's kind of like Starbucks's third place, but not quite. I think that's a good question you asked there. Steve, it's sort of an identity thing. And maybe these still have got to work on that. Maddie? What I mentioned earlier, Activision Blizzard, you've got a nice, the ticker's ATVI, biggest video game publisher on the planet. You've got a nice little 10% pullback here. I just think video games are getting ever more popular. There's more platforms.

No one does it better than Activision. Esports is also going to be huge. There's some study suggesting it's more popular than the NBA right now, which is hard to fathom, and Activision's a big play on that as well. Steve? Are you ever too old to play video games? No, because I am 36, and I still play many hours of video games and tend to for many, many decades.

Steve, three interesting companies. You got one you want to put on your watch list? I would have to go with Activision because I just can't do American Airlines in Panera. All right. Jeff Fisher, Jason, Matt, Matt, Argusinger. Guys, thanks for being here. Thank you. Check out Supernova.

for more details on our Supernova service. That's going to do it for this week's edition of Motley Fool Money. Our engineer is Steve Brodo. Our producers, Matt Greer. I'm Chris Hill. We'll see you next week.