Motley Fool Money - Economy is Solid. Economy is Uncertain.

Episode Date: June 20, 2025

Households and businesses are feeling more uncertain about the future, but the labor market is strong. (00:21) Motley Fool Senior Analysts Asit Sharma and David Meier join Ricky Mulvey to discuss: - The latest Fed meeting, and what Jerome Powell is watching. - What AI means for a consulting giant. - Earnings from Kroger and Darden Restaurants. (19:11) Then, we play a portion of our member’s only podcast “Stock Advisor Roundtable.” Brian Stoffel interviews Motley Fool Co-founder and CEO Tom Gardner about how AI has changed his investing process. (33:36) Asit and David share two radar stocks: Ferrari and CAVA. Host: Ricky Mulvey Guests: Asit Sharma, David Meier Engineer: Dan Boyd Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, "TMF") do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. We’re committed to transparency: All personal opinions in advertisements from Fools are their own. [The product advertised in this episode was loaned to TMF and was returned after a test period.] or [The product advertised in this episode was purchased by TMF.] [Advertiser] paid for the sponsorship of this episode. Learn more about your ad choices. Visit megaphone.fm/adchoices

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How are you feeling about the economy? You're listening to Motley Full Money. That's why they call it money. The global headquarters. This is Motley Fool Money. It's the Motley Full Money Radio show. I'm Ricky Mulvey. Joining me on the internet today are Motley Fool senior analysts.

Asit Sharma and David Meyer. Great to have you both here. Good to be here, Ricky. Bikewise. Asit, we're going to kick off with the big macro. This week, the Federal Reserve decided to leave interest rates unchanged. Two key phrases in Jerome Powell's press conference were that, quote, uncertainty is unusually elevated and, quote, the economy is in a solid position. So what did we learn from

Mr. Powell? Ricky, we didn't learn a lot that we didn't already know, although those two phrases together do seem to be a bit in opposition. Chairman Powell talked about last year's very nice GDP growth of 2.5%. So, the economy was chugging along nicely last year. And he mentioned that this year, the picture is a little more murky in terms of growth because all of this trade war overhang that we've got, uncertainty in the economy is making the data hard to read, especially the near-term import-export figures. So that's throwing some mud into the water. He did point to, let's round it to 1.5% GDP expected growth this year. from the numbers he cited. That's not the Fed's estimate, but Chairman Powell was just citing

some common figures that are looking out past this quarter for the rest of the year. He also mentioned that inflation is still somewhat elevated. We're shoppers, so we understand that. Lastly, Chairman Powell also talked about the unemployment rate, still being in a quite healthy place at 4.2 percent. So that's low. It indicates pretty full employment in the workforce. So you put all these factors together, and the message is, look, there's still some stuff we'd like to have a better beat on. We're in no hurry to lower interest rates just now, but reading between the tea leaves, investors can expect that the Fed probably will go ahead with two smaller or small-sized rate cuts later

this year. Yeah. The thing that doesn't make sense to me, David, is you heard Powell talking about how a lot of companies were pulling things forward to get ahead of tariffs. Okay. Day was April. We still have April and May in quarter two, and they're saying, oh, yeah, GDP is going to bounce right back while that was going on. We saw this from Edward Harrison in Bloomberg, and it's that, quote, the short version is that the U.S. economy is decelerating so much that we should

expect Fed rate cuts to resume in September, end quote. I'm not asking you for a rate cut prediction because that's a lowercase F. F. Fool's errand. But what do you think? Is the economy really decelerating right now? Yes. Yes, it is. All right. We'll move back to Austin. I'm kidding. Please continue with your thoughts. Sorry, you got me there. Yes, it is. I mean, in 2023, the economy grew at 2.5% for the year. In 2024, 2.9%. It contracted in the first quarter. And we're only expecting somewhere between 1.5. And I've seen estimates as high as 2.0, 2% growth. So yes, it is, it is, like, down. Are we going into recession? No, I don't think that's going to happen. But I am of the camp that what we learned from Chairman Powell is that he's actually worried. He's not doing anything,

not because he's like, this is the right, necessarily the right thing to do. I think he's like, I don't exactly know what to do. Is inflation going to go up? If it ticks up and he cuts rates, what does that mean? That means inflation could go up higher. If he cuts rates and inflation is in fact going higher than what's going to happen? The bond yields are going to go up. Prices are going to go down. There's not a lot of good things for Jerome Powell to do right now, nor the FOMC. So I agree. There is a lot of uncertainty, especially because we don't have the impact, full impact of the tariffs in the labor market, in the inflation numbers. So we're just going to have to wait and see. It's a terrible place to be, actually, to wait and see. It would be better if we

didn't have all the uncertainty, but that's where we are. Yeah, I mean, I pulled forward some spending definitely on clothes before the tariffs came rolling in. But David, have you noticed any spending changes among your friends, family, or your communities? Yes. I have a golf buddy who comes down about every other week and we are not going out to dinner as much. We're eating in, right? We're getting things from the grocery store and we're changing what we're getting. We're getting cheaper items. and that's because we're feeling the impact of rising prices as consumers. So I'm sure I'm not the only one, and I'm sure us together are not the only ones that are changing a bit of their spending patterns.

And we just got to see how that percolates through the economy. Well, we're seeing changes in diner spending patterns, especially at those big chain restaurants. We're going to get to that a little bit later in the show. Let's stay focused on the labor market, though. And from Jerome Powell, he basically said the labor market, is at or near maximum employment. We've talked about this story quite a bit on the show, especially the disconnect among new college grads in the labor market they're facing.

There's also a Wall Street Journal story this week titled, The Biggest Companies Across America are cutting their workforces. And this big claim at the beginning that corporate America is convinced fewer employees mean faster growth. Do you understand the disconnects between what Fed Chair Powell is saying and what corporations are telling the Wall Street Journal? I think I do, Ricky. I mean, Fed Chair Powell is focused on the numbers of people who are employed. So we have a labor force, which is at around 164 million people in the United States that are productively employed just now. If you look at the largest companies in the country, and I'm just going to focus on the S&P 500 as a proxy, they employ about 17% of that total workforce. So, you know, it's six of one, half a dozen of the other in some ways.

There are two ways to look at this. One is that the labor force among the S&P 500 is so small that it really doesn't affect the overall numbers. But 17% to other folks, that's a big percentage. Now, if we flip over to what this means in value to the U.S. economy, I would argue that that smaller percentage of people employed has a disproportionate share of value. If these largest corporations keep trimming highly skilled workers, that's going to have an impact on the economy.

And at that point, it might not matter that to Jerome Powell, hey, there's overall employment and that's good. The drag on the U.S. economy might start to show up if corporations keep gunning for fewer employees, higher profits. And, David, there's a key part of this Wall Street Journal story that talks about how revenue per employee being back is a metric that investors follow. pointed to the dating app grinder and how CEO George Erison doubled that number from one to two million dollars in just a few years. Is this a metric that you follow? You're an investor.

No, it's actually not. The reason I don't follow it explicitly is because that number, in my opinion, is highly dependent on the business model. So a follow-up question for George Arison that I would have is what did you do? Did you double revenue or did you cut the number of employees? I'm sure it's some combination of both, right? And that's actually not a problem. But did something in the business model change? That would be what I would want to know as an investor because I want to know, you know, what is it that you're doing to either make employees more productive, make the business model stronger or some combination of both. So I understand it, um, in terms of, I understand it, um, in terms of, hey, you would definitely want to be productive. You would want to have the least number

of employees doing the best work that they can in order to generate the most revenue possible. But like I said, it does depend on the business model that you're using. So it's actually quite useful if I'm comparing companies in similar industries to seeing which business model might be useful. And that happens if I also look at, okay, what is like the return on invested capital associated with those businesses as well. Ascent, is this in a number that you look at or are you in David's camp here? Yes, it is a number that I look at and quite frequently, but I'm sort of in David's camp as well because we both came up through manufacturing.

And so both of us appreciate the tradeoffs between having lots of employees versus maybe having a big subcontracted workforce. So for me, it tends to be, just as David was saying contextual, I do pay attention to it, but I like to understand within the industry that I'm studying what tends to be. be sort of the trend here. Our company is mostly employing lots of people, so it's full-time equivalent employees. And how are they succeeding or failing with that? And I actually like to see sometimes that metric go in the reverse of what some people would like to see. When a company is in growth mode and adding dollars to its revenue base, when it's really growing,

sometimes you need to add more employees to service that, whether you're a restaurant chain or like a cybersecurity company. Should we go all to eat or stay in? Up next. Next earnings from big grocery and big food. Stay right here. You're listening to Motley Full Money. Some of the best lessons don't come from a classroom. They come from experience. On the power of advice, a new podcast series from Capital Group,

you'll hear from CEOs, investors, and founders about how they built careers, took risks, and reinvented themselves. If you're starting your own journey, this is the kind of advice you won't want to miss. Available wherever you get your podcast, published by Capital Client Group, Inc. Welcome back to Motleyful Money. I'm Ricky Mulvey, joined today by Motley Fool Senior Analysts, Asset, and David Meyer. We've got an earnings rundown. We're going to kick it off with Asset in Global Consulting Giant Accenture. The stock is down a bit this morning, and that's because the company beat expectations, but bookings are down in the street really didn't like that, Osset. What's happening

behind those numbers? Ricky, bookings represent new sales that are coming in. The simplest way to look at it. The revenue that a company recognizes, often is already in the can. So it makes the revenues by earning what's prepaid in deferred revenue. So to keep this from getting too complicated, what we can think of as new bookings is stuff that's hitting the books to be earned in the future. Now, these aren't long-term contracts typically. And Wall Street looks at this number a lot because it indicates what a company is going to earn in terms of its top line in the future. So, even though the results look perfectly fine for me for Accenture this quarter, in fact,

they were pretty strong. When you look at the total new bookings, that decline of 6% is sort of telling part of it, or the bigger part, really, is in managed services. So Accenture has consulting services and then managed services, which are a little more long-term in nature and a little more stable. The managed services portion of those bookings declined by about 10% versus this time last year. And that's a little bit of a yellow flag. It means some of the headwinds we're seeing out in the larger economy, so companies pulling back on spends, some of the trouble that Accenture has had with procuring federal contracts in this age of cost cutting at the federal level, and maybe some peel off as companies use AI more on their own to further objectives. That

picture might be coming together in a way that suggests that Accenture's future revenue might be a little less than investors were expecting. Well, that's the multi-billion-dollar question for Accenture here is, what does the AI boom mean for this company? Does it mean that consulting work is easily outsourced to the chatbots? Does it mean that these companies need to pay young, bright college grads to show them how to use large language models? So I'll pose that question to you, Asset. Do you think the AI boom ultimately helps or hurts Accenture here? I think it's going to ultimately help Accenture because we have to remember, this company plays

at a really high level across the world and has business with Fortune 500 companies, Fortune 1,000 companies, lots of sovereign governments around the world. So it is extremely high tech in terms of its consulting, but it might mean that Accenture is going to have to be a bit more of a focused company and a smaller, leaner company in the future. This is the largest consulting concern on the planet. I think they've got a future at the higher levels of AI spend, but we might see some of its traditional business erode some in the coming years. I would not be surprised. And right before we move on to our next earning story, Kroger, I think it's worth pointing out this note from our chief investment officer, Andy Cross, to members of Motley Fool. Pointing to the total yield for this quarter at about $8 billion on dividends and buybacks, that's significant for one quarter of about $200 billion company.

David, let's move on to Kroger. You get to talk about Kroger twice this week, you lucky duck. And a few highlights for me were that identical sales without fuel, so they're comparable sales excluding fuel, up more than 3%. It's pretty significant for a grocer. Earnings about even from last year. And while the street's excited, this seemed like a fairly pedestrian quarter to me. But anything to stand out to you?

Yes. And unfortunately, it's something that the company didn't really do a lot of highlighting about. So, if I dug in a little bit and looked at how much they're expecting to spend in capital expenditures on new stores and maintenance of stores, as well as their free cash flow number. And what I backed out is they're expecting about 13% growth in their operating cash flow. Now, for a company the size and the maturity level of Kroger, that's a pretty big deal. That increase in cash flow gives them significant options, which is good because that's what they need. I wish they would have highlighted that a little bit more.

I get that the same source sales is what people really want to see. But yeah, to me, that's a really good sign for them. There's a lot of weirdness with Kroger right now. They had a longtime CEO Rodney McMullen leave fairly abruptly earlier this year. Not a lot of communication around that. how they're using money for buybacks, especially after the failed acquisition of Albertsons, is something that they haven't, in my opinion, been super communicative about as a former shareholder of Kroger. Nonetheless, stocks up 7% this morning.

Maybe it's those buybacks. What do you think investors are so excited about? So the buybacks are definitely a nice to have. But I will say this. Last quarter, their identical sales came in at half a percent. versus about 3.2% for this quarter and management up there, as you said, management up there full year guidance for the identical sales. With all that's going on, what we are seeing is stores are becoming more productive. That is a good sign, okay? Because again, this isn't a big

chain. They're not going to be knocking it out of the park in terms of opening up new stores. They sold off their specialty farm of business. So there's a lot going on. But for investors to see that stores in their arsenal are being more productive, I think that's what they're hanging their hat on today. Let's wrap up with Darden, which is the parent company of Olive Garden, Longhorn Steakhouse. Same store sales up 4.6% for this big restaurant chain. Asset, we've heard about spending pullbacks.

Apparently, it's not happening at these value. oriented chain restaurants. What did you see in the earnings? Ricky, I thought that Darden did a pretty good job of keeping people coming to the restaurants. It's actually not that easy, and not every chain, which is operating at a lower price point, as being successful at this, as Darden is. I loved that the company was able to hold its bottom line. So you would think with a 10% increase, which is what they generated this year on revenue, they would probably increase earnings by maybe close to the same amount. Actually, earnings were flat. What they did was to absorb some costs in the cost structure, but that allowed customers to keep

coming. They ran some nice promotions in the Olive Garden franchise. Not surprisingly, Longhorn Steakhouse also had an appreciable jump in same store sales, 6.7%, very close to Olive Gardens, 6.9%, the restaurant chain. So, businesses, restaurants, which can pull people from the higher dining segment down are going to succeed in this environment. And not surprisingly, their fine dining segment actually lost 3.3 percent in same store sales. So all in all, a really good job managing expectations of consumers, managing costs, being able to keep this going. The investors who are watching this industry, the restaurant industry, they really want

companies to maintain their traffic. So those are the ones that will be rewarded in terms of share price until we get over this hump in the economy. Yeah, we've seen declines not just Ruth's Chris, which is Darden's fine dining chain, but also at Maggiano's, which is at, shoot, I forget the name, but it's the same parent company of Chili's. It's Brinker International. There it is. And as we wrap up quickly, Osset, Olive Garden, offering the buy one, take one deal after five years. It means customers get a meal to go along with their sit-down meal. Is that bringing you to an olive garden? Yes or now? Sure. Buy an entree for six bucks. Take another one home. I'll take it. I'll be there. Up next, how AI is changing the way that we invest. Stay right here. You're listening to Motley Full Money.

When the moon hits your eye like a bigger pizza pie, that's a moray. When the world seems to shine like you've had too much wine, that's a more. bells will ring, tinglinga-ling, tingle-ling, and you'll sing the bella. The old adage goes, it isn't what you say, it's how you say it, because to truly make an impact, you need to set an example and take the lead. You have to adapt to whatever comes your way. When you're that driven, you drive an equally determined vehicle, the Range Rover Sport. The Range Rover Sport blends power, poise, and performance. Its design is distinctly British, and free from unnecessary details, allowing its raw agility to shine through. It combines a dynamic sporting personality with elegance to deliver a truly instinctive drive. Inside, you'll find true

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market volatility, Tom Gardner's playbook, to discuss how artificial intelligence has changed his process and the broader implications for all investors. The Motley Fool started and Stock Advisor started as a newsletter. The Fool started in 1993. Now, if you were starting it today, you just pointed out some things that would be different. But let me just focus on if you had to give an elevator pitch for how your style of investing has changed from 1993 to today, what? What would that elevator pitch be for how it's changed? The biggest change would just be deepening my understanding and enjoyment of studying companies.

So I think when I started investing, and we grew up obviously learning from our father, and then David found Peter Lynch's books. We read those books and really had an earnings-driven focus at companies and a long-term earnings-driven. You know, those great charts that Lynch had in his books overlaying, you know, EPS growth with stock price performance, you know, over long periods of time. And so I think I was very earnings driven and very quantitative in my approach in the 1990s. And then I started to see, wow, something's happening that's different at Costco than at other companies. Costco actually was saying, Jim Senegal, we interviewed him out there in a Costco store in Seattle. I think that's where I flew. Maybe it was in Florida, actually.

Mack will remember that and correct me on this. But I will say that I just remember Jim Sinegal telling me we don't, something along the lines of, we do not want to grow more than 20% a year. But that wasn't my orientation, my thought process about business. I was like, of course you want to grow 40%, 70%. If you could grow the top line, you know, 100% three years in a row, think what would be happening in your company. But in the case of Costco, the idea was we want this to go on for the next five decades.

So every time we grow much more than 20%, that'll rattle and shake up our operations and systems. And every time we grow less rapidly than that, we're losing relevance in the marketplace. So we really target a stable growth path. And then I, you know, from interviews and conversations like that, really learned about how companies are run and stopped just thinking about the earnings call, the quarterly numbers, and started to think more about the larger story, the culture, the leaders, the strategic side of the business. And since we had mentioned AI, now AI's ability to score those elements allows me to see much more than just an interview with the CEO or a company I've dug deeply in myself to look across the whole array of businesses and find patterns that match up with my business thinking developed over years. So I think I was very earnings driven, still multi years, but probably looking out two years with valuations.

Now I'm much more looking out four plus years with valuation and looking more deeply at businesses. Well, let me ask you this because you just, it's a perfect segue into our next question. You were talking about AI. A lot of investors focus on financial metrics, and you said yourself, you know, back in the early 90s, that was you too. It's still you today, I imagine, to a certain extent. AI can help in evaluating those things. But you also emphasize things like you just said Jim Sinegal, leadership, culture, things that are harder for AI to capture. I would call these soft variables.

Do you think AI will ever be a substitute for qualitatively looking at such soft variables? When you said it could score, are you saying that it could score and capture the same thing that you remember Jim Senegal saying? Or is that something where there's always going to have to be a human element? I mean, the first thing I'll say is it's hard to know what's going to happen. I guess that is always true. But with a technology that is more transformative than any technology in human history, trying to understand what the world will look like even four years from now is getting more and more difficult.

So I would say that right now, the large language models actually weren't good. These weren't computational models. So you'd put math into any of the platforms, and they would do poorly with it. You'd start to say, well, I can't rely on this. This is a joke. Then we began hiring AI engineers at the Motley Fool. And so I started to see a different thing happening, which is that when you have a collective group, let's just say, of 10 people who have worldwide

level expertise in AI engineering, and they're collectively prompting using enterprise licenses and buying massive amounts of data, getting API feeds and just buying access to data that we wouldn't even normally have thought to assess as an investor. And we know that we can go deeper and deeper, right? There are people that are measuring back in the day with IOMA at the Motley, full, you know, how many people are in the parking lot of Comp USA? You know, so there's endless amounts of information. How do we organize that information? How do we score that information? How do we wait those scores to get an overall score? And how do we adapt that with new information

coming in real time, not just about that company, but about its industry, about everything in the marketplace, right? The butterfly flaps its wings, the Yanksy River, and it has a massive effect somewhere else around the world, but you just can't string together all of the knock-on effects of that. So it's a never-ending game. That's the first thing I'll say. It is a never-ending game. However, if you could get all the information about all the communications, if you get endless amounts of information on the CEO and CFO of a public company, could you score them as leaders? You could, relative to others. How easily can you get that information? you know obviously who knows what what is and isn't private so i'm not even going to go in that realm

i'm just going to say there is less information on things like leadership so our leadership score in our ai data money ball database is is a lower quality score it just doesn't have enough information whereas you can process 10 000 10 ks in 20 minutes and do create more and more sophisticated prompts to go into those filings that are consistent across all companies. And therefore, scoring is much easier. You're comparing one income statement to 5,000 other income statements over the last 10 years, and you can see amazing patterns will emerge from that. So you are correct that most of what we're working on right now is the structured data that

comes from financial filings and public companies. And because those filing standards are different in different countries, it does take time for us to go out to the 40,000 businesses, but that is exactly what we're planning to do. So wherever there's consistent data structured, and there are significant amounts of it, you can get signal. I mean, you can score things. But when you start getting into the more qualitative areas, as you're noting, it really comes down to how much information you can get. I would say that right now, meta, has an incredible ability to score human beings based on the massive amounts of data around qualitative, soft, subject matter in our lives.

That's weird, scary, unusual, different, and we're moving into a new world. In every quarter, we're moving into a new world faster than most of us can realize and understand. That's why I think it's a very good idea to follow the leaders of AI on whatever social platforms or wherever you can get that access to their information, whether it's YouTube interviews, whether it's being out on Twitter, whether it's being just Google search, but you know, we start to lock in on the top 10 minds and see what they're saying. They're expressing something that does capture, you know, the word terrific. It's amazing and it's terrifying.

It's thrilling. It's a thrilling ride. It's exciting, but I'm scared. And they're so far ahead of us with massive amounts of data and billions of dollars to put against it. And they're showing that these things aren't, you know, it's not about, oh, it hallucinates. Those things are true. These tools aren't perfect, but they're much more powerful than anything we've ever had in human history. and we're wielding them right now with not a clear path for how they're going to be regulated. And I would say that the best place to be in answering that question is you should assume that everything can be evaluated and everything can be scored.

And so I think that it's just a question of whether you can get that information to score those soft factors. And right now, in some places there's a lot of information and in other places there isn't good structured data. so you're just using what you can to come up with scores that are pretty brittle and fragile in terms of whether they're going to be consistent and reliable. Let me ask you this then. And I'm not talking about, so the question is, will AI improve retail investor returns? And when I ask this question, I'm not saying, will it improve retail investor returns for the Motley Fool? because you've just outlined all the ways that you plan on harnessing the best of what AI can have to offer.

So I mean writ large retail investors. Do you think AI will improve returns? Why or why not? What I assume you're asking by covering the full scope of retail investors is that there's some investors that love to do research and would like to dig into filings and make their own decisions. But then the majority of investors would like to either get guidance on what to do, or just to index. So you're asking about the full range of all of them, and I would say that I do think

returns will improve, but they're mostly for those cost benefits of automation. So we'll get greater efficiency across all of these systems of financial advice and money management. We'll also see, I think, a reduction in fraud in certain areas. So it will be harder and harder for companies to, to be misleading or to get financial advice from somebody that does not have your best interest at heart because it will become easier and easier to score every financial management company. And to understand, I mean, one of the ways to think about this is, you know,

pick an area of life where you would really like to see major progress in cost reduction for you as a customer and effectiveness of the solution that you're getting. And one place that everyone can go would be into the medical world where a lot of medical work and our systems are antiquated. And so in a lot of cases, when you're going to get a treatment and care for a condition you have or a serious matter of a family member, you're kind of left out there trying to figure out what it is and all the health care system costs. It's just a mess. And there isn't the efficiency to bring down costs and there isn't a clear pathway to get to understand like these are the best three. options that you have that are not being told to you by a doctor. So if we think of those areas of life,

wouldn't it be nice if we had that? I think when it comes to financial management, people would like to know that it's clear what types of returns they might get. And they can simulate things and understand clearly, okay, if I do have a 15-year holding period, what happens if I trade every three weeks versus what happens if I actually just put money into index funds and maybe buy some stocks and just let them go for,

five years or 10 years or 15 years. What does that simulation look like if I'm not paying transaction costs or I'm not paying capital gains, taxes throughout all the rest? So I think we'll get more and more visual data for investors to understand. That will help the aggregate returns when you kind of can more easily see what risks and what opportunities you have out there. But mostly, I think the benefits will come from continuing cost reduction to where a lot of a lot of your financial investment work will not come with a lot of inconvenience or a high cost. And if there was one thing I could see that would be negative, it's that we will see, I believe, in the creation of more and more digital assets.

So less and less tangible assets, you know, even just the collapse in the cost of, in the value, excuse me, of commercial real estate that we're all seeing from office buildings collapsing. So the value of physical assets continues to decline. You want high gross margin businesses with high rates of return on investment, driven by knowledge and technology. And that's where so much of the wealth is going to go. And that is really a winner-takes-most category. So I think we're going to see a lot of wealth inequality and a lot of digital assets that people don't realize are very speculative. And the NFT craze will see a return to more and more crypto and NN.

NFT investing that will hurt the overall returns because there's such a speculative element to it. But all net net, I think, will get better returns. It won't be material. It's not going to be person by person, but I think the cost management will help. Members of Stock Advisor and Higher Level Services can check out Stock Advisor Roundtable on Spotify or the Motley Fool app. As always, people on the program may have interests in the stocks they talk about and the Motleyful may have formal recommendations for or against no buyer-sell stocks based solely on what you hear, while personal finance content follows Motleyful editorial standards and are not approved by advertisers, advertisements or sponsored content provide for informational purposes only to see our full advertising

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Welcome back to Motley Full Money. I'm Ricky Mulvey, joined by Motleyful Senior Analysts, Asit Sharma and David Meyer. Asset, this weekend on Sunday, Tesla is expected to roll out full self-driving model-wise in Austin, Texas. Seems like we're pretty close to that full self-driving rollout that we've heard about for years and years and years. We are, Ricky, but what we're looking at is probably a limited release by Tesla. no surprise, Tesla tends to overpromise and underdeliver. So what I'm reading is that we're going to have something, which is almost like a geofenced environment, and it's very limited. Here you have Tesla, which is competing with the likes of Waymo, which has really come into this space in a big ways. They are now moving on to the East Coast. I want to point out here, too,

there's some under-the-radar competitors who seem to be actually further along to me than Tesla is. Amazon's Zook, if you haven't heard of this, or Zooks, not sure how to pronounce it, they're actually working on commercial production of vehicles in a big way. They have a facility which can produce about 10,000 vehicles every year, and they're having a commercial launch in Las Vegas in the near future. So I think the competition is actually ramping up, and I'm very curious to see if this is just a bit of a flash in the plan introduction or if Tesla is really going to show up this weekend. And quickly, David, before Radar Stocks, are you buying?

that widespread self-driving services are just around the corner? Nope. All right. Let's... It's difficult. There's a lot of work that needs to go into this for it to be widespread as opposed to in a certain geographic location. But it'll get here. It will. Let's wrap up with radar stocks. Each of our analysts will pitch a stock. Dan Boyd, our man behind the glass, will hit you with a question, backhanded compliment, or occasionally an insult. Ashtrama, what you got this week? Ricky Ferrari, symbol R-A-C-E, is on my radar screen.

Actually, this company has been on and off my radar screen for years, to my detriment. It is a market-beating company. One of the things, which is important to know about Ferrari, is that it sells its vehicles. Of course, that really high-price point, 180,000 euros and above. but it controls production and the release of its high-end models, and that keeps demand up. This is a premier brand that is only benefiting from the explosion of interest in F1. It operates at a 29% operating margin. So you see that premium for luxury goods.

Just a very well-run company invest a lot in R&D, as you would expect. About two-fifths of the workforce here at this company are engineers solely. So, this is a company that has staying power through all environments, and it's a little bit recession-resistant because the price points are so high. Unfortunately, the super wealthy are a lot more able to withstand recessions than your average shows. So this is a company. I think investors should watch, and the cars are pretty fun too. Dan, a question about Ferrari. Yeah, awesome. What kind of car you drive? Toyota Camry. But hey, I like my car.

my Camry. Not a Ferrari, though. Not yet. David Meyer, what's you got this week? I have Kava Group. So I will say I was a Kava bear for a little bit, and mainly because of the price. Look, this company is just flat accelerating, opening up new stores. New stores are becoming more productive. There's lots of cash flow being generated. They're profitable. The world is their oyster, pardon that pun. But the thing that has come down is the stock price. We're paying a much more reasonable valuation today than we were, say, six months ago. And that's because the valuation metrics have literally been cut in half. So from that standpoint, I'm putting it back on my radar, want to dig deep in, deeper in, see why the company is going to be successful

over the next 10 years. And we'll see what happens from there. Dan, quick question about Kava. Yeah, David, what are you ordering from Kava? My go-to is falafel. I love their, I love their falafel. That's pretty much what I, each time I go in, that's what I get. But the great thing is they have so much variety that anybody can get almost anything they like. My beef is the variety.

There's too much there, too many decisions to make when I get to the front of the Kava. Dan, what's you putting on your watch list this week? Ricky, I cannot afford a Ferrari, but I can't afford some spicy lamb meatballs. So let's go Kava. Let's do it. That's all for this week's Motley Full Money Radio show. I'm Ricky Malvey. That's awesome trauma. David Meyer. Dan Boyd mixes the show. Thank you for listening. We'll be back tomorrow.