Motley Fool Money - Fortnite vs. Apple and the Future of Malls

Episode Date: August 14, 2020

Simon Property Group talks with Amazon about mall-based distribution centers. Microsoft announces plans to sell a $1,400 foldable phone. Marriott rises despite reporting its first quarterly loss in more than eight years. Apple and Fortnite engage in a battle royale. Lyft deals with sinking revenue and California concerns. SmileDirectClub gives investors something to frown about. And Starbucks, Dunkin’, and Hershey’s get a head start on fall and Halloween. Motley Fool analysts Ron Gross and Jason Moser discuss those stories and share two stocks on their radar: Bed Bath & Beyond and Qualcomm. Plus, Lakehouse Capital Chief Investment Officer Joe Magyer discusses investing during the pandemic, why digital payment companies are creating structural changes, and how his thinking on Berkshire-Hathaway has evolved. Learn more about your ad choices. Visit megaphone.fm/adchoices

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I'm Chris Hill, joining me this week, Jason Moser and Ron Gross. Good to see you, too. How'd you doing, Chris? We've got the latest headlines from Wall Street. We're going to head to Sydney, Australia, to get Joe Maeger's latest thoughts on investing. And as always, we've got a couple of stocks on our radar. But we begin with the future of malls. Simon Property Group, the largest mall owner in America,

is in talks with Amazon about the possibility of turning some of Simon's anchor department stores into Amazon distribution hubs. Ron Gross, let me start with you. What do you think about this, whether it's what it means for Amazon, what it does for Simon Property Group, and the ripple effects for the other businesses that are in those malls? You know, out of necessity, something's got to get done. There are about 1,000 malls still open in the U.S., and roughly 60% of those have department store retailers like Macy's as anchor stores. And as we know, those businesses are in trouble. A report from Green Street Advisors predicts that 50% of the department stores anchoring the malls are going to close permanently by the end of next year. That has a lot,

creates a lot of vacancies, creates a lot of ripple effects for the other stores in the mall that count on these anchor stores to bring in traffic. So I think there's going to be a lot of redevelopment here. It's a lot of real estate we're talking about, a lot of malls that are going to close. And so you're going to see things like office parks, apartment buildings, mixed use with some retail perhaps, senior living facilities, hotels, and distribution centers from the likes of Amazon. The pandemic has put some of this redevelopment on hold, but it will pick up eventually,

I would assume, next year. And as you said, Simon exploring the deal with Amazon, talks about converting the JCPenney stores and the Sears stores specifically into distribution centers. So we'll see what happens. You know, the more these anchor stores stay vacant, the more it could trigger what's called co-tenancy clauses from the other retailers in the mall like Gap, who have in their leases the ability to renegotiate what they pay and rent if those anchor stores stay vacant. and I'm sure we're going to see plenty of those folks try to renegotiate and get their rents down.

Yeah, Jason, it would be obviously expensive in years in the making. But when I think about, as Ron said, those mixed-use spaces where you've got residential apartments, condos, etc., on top, and then a couple of floors of retail below, it seems like that could be one potential future. Yeah, I mean, you said it there in mixed use. I was going to refer to what Ron said as well in regard to mixed use. That, to me, is going to be the key to all of this. Ultimately, it's about what is needed, right? I mean, decades ago, malls were, I don't know if needed, but certainly the demand was there.

I just don't think the demand is going to be there for the coming years when it comes to malls and changing the use cases over to other things, whether that's apartment buildings or or hospitals or schools or whatever it may be. I mean, commercial real estate's definitely in for a bit of a reckoning, but it will just be a matter of finding out what do we need. And then you essentially all have investors come in there to help reshape the space. Yeah, you know, the distribution center angle is not that exciting to the average retailer in a mall because it doesn't have the effect of what an anchor store is supposed to have.

So one thing I've been hearing, been seeing, been reading about is the potential for Amazon or others to bring in grocery stores into those spaces, which could potentially then have the effect of what an anchor store is supposed to do, bring in others. Have you continued to shop throughout the mall? Amazon aside, Ron, it's been a pretty busy week for Simon Property Group. They teamed up with Authentic Brands Group, which is an apparel licensing firm, to buy a couple of bankrupt clothing companies. Brooks Brothers and Lucky Brand Jeans. And at least the reaction from Wall Street seemed positive. Shares of Simon Property Group up nearly 10% this week. Yeah, they're really trying to buy things on the cheap here, as long as the brands remain valuable, which I think is a fine strategy.

But, you know, as we've set off, and specialty retail is a tough business. So you've got to buy these properties right, these companies at the right price. Interestingly, they're also teaming up with Brookfield Properties, to put in a bid for JCPenney. And they seem to be in the lead for that, too. Now, that's one where the brand for me is questionable.

It's not a niche brand. It's a brand of department store that does similar things to many other entities. But I'm okay with kind of the niche product brand acquisition at the right price. This week, Microsoft announced its new Android phone. The Surface Duo is going to launch on September 10, The phone has two screens. It is split by a 360-degree hinge and Jason Moser. The starting price is just $1,400.

That's not a hurdle at all, Chris, right? I don't know. And I feel like, listening to you on Market Foolery earlier this week, I feel like you and I are probably coming at this from the same place. Just is this something that people really want? I mean, I don't know. I see it. It could certainly be a productive work tool. I'm not, I'm not certainly. certain that consumers are actually going out there and buying it on their own. Maybe they will. But one of the things, immediately when I saw it, I thought, okay, is this a phone or a tablet? I mean, I know it's a phone technically, but is it a phone or a tablet? Because it seems like it has more of a tablet use case, and that's fine. But I think that's going to play a big role in how successful this thing could be or ultimately not be. I do understand and like the fact that they partnered up with Android here. I mean, that was essential, right? I mean, given that Microsoft essentially lost when it comes to the phone market.

I mean, they don't have a leg to stand on there. And so having to be a part of an operating system that people are actually familiar with and like and want was very key. And obviously, Android dominates the global market share there. That makes a lot of sense. But again, it goes back to, for me, regardless the quality of the device, it looks like it's a very quality device. I mean, they're really actually using the gorilla glass there, which I think is a big deal. But is this something that people want? I could see the workplace scenario playing out well, but at the consumer level, I'm not convinced

yet. You know, when Microsoft announced they were closing their retail stores, we all sort of shrugged and said, well, yeah, that makes sense. They were never going to be able to do what Apple was able to do with their stores. Now in hindsight, it looks like, wow, they actually could use those stores now. It seems like what you would, but this would be like the crown jewel of that store, right? This would just be front and center. And who knows, maybe next week we're reading of a headline partnership between

Simon Property Group and Microsoft to throw a few stores in some of those, you know, barren malls, but I guess we'll have to wait and see there. You know, as a very happy Microsoft shareholder, I got to say this feels like a step back to me. It's if some product guy got Sachin'adella in a room and convinced him to launch a 1400, dollar flip phone. Let's stick to what grew this business back to the trillion-plus company that it is now. I'm not a fan. Yeah, and I'll say one final thing here. This to me, sort of, it reminds me a lot of Amazon's fire phone efforts in that I'm pretty certain this isn't really going to gain traction, but by the same token, I bet you they learn something from it. They get something from

building this product that serves them well in the future. And that's ultimately a good thing. Shares of Marriott up this week, despite the fact that Marriott's second quarter featured the company's first loss in almost nine years. Ron, where are we with Marriott? It seems like a business that obviously isn't going away. I'm just wondering how bright is the next one to two years for them. We are somewhat in a recovery mode here, but we're at the very beginning of the recovery mode. So you look backwards to the quarter, sales obviously got crushed. 72%. Revenue per available room, what we call RevPAR, fell 84% globally and another 83.6% in North America. But it did improve to a decline of only 70% for the month of July after hitting

a low of 90% in April. So a little bit of recovery there, and they lost a couple hundred million dollars. But the good news is they expect their cash burn for the year to be slower than they previously estimated, as bookings do recover. So they expect the cash burn of $85 million a month. Hey, that's still a lot of money, but it's not as bad as the $145 million. They did expect to burn. They're seeing a steady recovery, slow but steady recovery in occupancy rates across the world. Interestingly, greater China is leading the way here. They think that market could approach 2019 occupancy levels as early as next year. So that would be rather significant. And we did see global occupancy rates improved to 34% in the weekend in August

first. That's up from 11% in April. So again, we're seeing the numbers slowly improve. Cash burns going to continue, not as bad as they originally thought. They will live to fight another day, but it's going to take a good couple of years. Up next, we've got a battle royale brewing between Fortnite and Apple, and it is escalating quickly. Details next, so stay right here. This is Motley Fool Money. Welcome back to Motley Full Money. Chris Hill here with Jason Moser and Ron gross. Apple and Google have removed the popular video game Fortnite from their app stores. Both claim that Fortnite is violating the payment guidelines of the app stores. In return, Epic Games, the creator of Fortnite, has filed federal lawsuits against both Apple and Google. Jason, this

really did heat up pretty quickly. It did. It did heat up very quickly. And it's kind of fun to watch. You know, I mean, from Apple's perspective, it's good to be kids. but ultimately at some point or another, that cuts both ways. And I think we're starting to see that. I mean, once these games, these apps, these services start to have enough users, then this really starts to matter. One pushes back than more follow. And, I mean, to be clear, I mean, this isn't just a Fortnite thing, right?

We've seen the same sentiments from Match.com, from Spotify. There will be more to follow from this. Apple needs to be able to offer up a good reason for that 30% app store tax, something beyond just, oh, well, it's our system, therefore we can do whatever we want. I don't think maintaining and growing that ecosystem is a good enough reason anymore either. A time ago, maybe, but it's been built, right? I mean, that's kind of the purpose. Once you get this thing built, it requires a different level of maintenance and upkeep.

And, you know, I mean, it's a different time. I don't blame Epic Games at all for doing this. I think ultimately it probably results in a negotiation. as opposed to just pure litigation. I think Apple probably steps back and realizes that this is something that will not go away. They're not going to be able to just cut a deal

with Epic Games and then just move forward. So I bet over the course of the next year, we see them make some concessions to avoid being put in the spotlight on this because, again, we've talked about before, for the ongoing future here, I mean, Amazon, Microsoft, Alphabet, Apple, Facebook, all of these companies are really going to be

under that antitrust microscope. open and if they can just throw a bone here and there to make it a little bit less, to make the hardship a little bit less in regard to the attacks. That could probably go a long way. Yeah, 30% has always been a big number. I see parallels here to grocery store slotting fees where if you want to put your stuff on our shelves, you've got to pay the grocery store. It's kind of you're renting out the shelves in a certain in a real way. If you want to put your your wares on the Apple App Store, you've got to pay as well. So maybe the model changes to something more reasonable, 30% is rather high, or more of a slotting fee type of model. Certainly, it's a big

revenue driver for Apple, so that's not going to change, but maybe they just have to take less going forward. Yeah, and if you look at the payments industry, right? Interchange fees, Visa and MasterCard. I mean, there's a lot of regulation there and discussions on capping their fees. You get large merchants like Walmart, for example, have been able to go in there and negotiate interchange. So perhaps Apple does view this and say, okay, take some of our biggest customers and let's cut them a break and negotiate a little bit. Lyft's second quarter revenue fell more than 60%. And that was still better than Wall Street was expecting. Lifts management is trying to project optimism here, Ron. But let's face it,

they weren't profitable before the pandemic. So it's hard to see how this gets better for Lyft anytime soon. Not pretty. Unlike Uber, they don't have the food delivery Uber eats to offset this weakness in the ride-hailing business. So, you know, a number of active users dropped 60% in the second quarter. That's a really big number. They do see evidence of recovery, which is not surprising as our economy starts to reopen. Ride share rise in July were 78% greater than they were in April. Obviously, April was a very low point, though. But still, some recovery. Bykins scooter rentals, interestingly, not the U-JU-just part of their business, but we're up 200% from April to June. So people getting outside a little bit more, moving around a bit. They lost over

$400 million for the quarter. Now, they are in big cost-cutting mode because, quite frankly, they have to be. They announced pay cuts, laid off nearly 1,000 employees, which is about 17% of their workforce. And they think those cost cuts keep them on track to reach the goal of becoming adjusted profitability, reaching adjusted profitability, which is kind of a funny non-gap number by the end of 2021. I have a feeling we're going to keep seeing that kick the can down the road. It'll be 2022, then late 2022. Interestingly, though, both Uber and Lyft right now are in court battling in California because an assembly bill number five is creating a rule that they're going to have to reclassify their drivers as employees rather than independent contractors.

And that is very expensive. So it is likely that both Uber and Lyft are going to have to temporarily suspend operations in California until this gets worked out. Shares of Smile Direct Club down more than 15% this week. Second quarter revenue fell 82%. And Jason, I'm sure there were other numbers in their quarterly report, but their revenue fell 82%. Yeah, that's really kind of all you need to know. And I mean, I think it's tough to really say why one of these aligner concepts is better than any other.

I think it really ultimately boils down a price at the end of the day. So, you know, when I'm looking for investment ideas, it's not like I see a company that likely has no pricing power as a reason to invest, right? I'm not all amped when I see companies that don't have pricing power. And I don't know that they do. You look at some of the numbers, wow, 53% year over year decrease in aligner shipments. Interestingly, in the second quarter, they saw cancellations increase from 5.3% to 6.5% of gross aliner revenue, which is causing them to actually reserve a little bit more, which is impacting the financials in the near term as well. But, I mean, part of this really just depends on the network and how big they can grow it out. I mean, they've added new insurers, which is nice, Anthem Blue Cross Blue Shield, Empire Blue Cross Blue Shield.

They have partnership program with Smile Brands now bringing more dental offices around the country into the mix there as well. as the orthodontas that they have in their network. So again, I love the concept. I just don't know that it really makes for a very good investment because it's becoming very clear that pricing power is going to be somewhat lacking. Guys, if it feels like you're seeing autumnal products and promotions for Halloween earlier than usual this year, it is not in your head. It's actually happening. Hershey has been working with retailers to stock big bags of candy in the stores, even though it is still the summer. And over the next two weeks, Duncan and Starbucks will be rolling out their fall menus

much earlier than usual. So, Ron, if you were looking to get a pumpkin spice latte in the 90-degree heat of summer, good news. It's going to happen. Three thoughts. A, I love the word autumnal, so nicely done. Two, don't end the summer so quick. We still have some time here.

Let's not force this. You know, I love the fall as well. but the summer is nice. And third, I think we're all snacking plenty while we're quarantining at home, and I'm not sure this is helpful. Jason, the beer companies are also going to be rolling out their October Fest beer sooner than usual.

That is not a prognostication. Chris, that is happening. I was just at the grocery store yesterday, and I saw Samuel Adams with their pumpkin beer out. I saw some other October Fest concepts out. I mean, it does feel a little early, but, you know, I woke up the other morning. I stepped outside and I could just smell fall in the air. So, you know, hey, look, I love the change in seasons, Chris.

So I'm kind of excited about this. Am I going to have to put a pumpkin on my front stoop a month early? Is that where we're going? No, absolutely, man. Who has a stoop? All right, guys, we'll see you later in the show. Up next, we're heading down under to check in with Uncle Joe Mager of Lakehouse Capital. Stay right here.

This is Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill. Joe Mager is the chief investment officer at Lakehouse Capital and Asset Management Business based in Australia. He joins me now from Sydney. Joe, really good to see you. Good morning and afternoon, depending on where you are based. A bunch of things I want to talk to you about, but let's go back a few months. What was the scene for you and your team in late March when the market is dropping? I'm not asking you to give away state secrets, but how did you and your team view the opportunity in late March? Sure. It was a really exciting time to have cash. But the thing with having cash, you have to have a willingness to do something with it during drawdowns.

And one of the many lessons for me from the financial crisis was if you want to capitalize, you need to have a very clear set of priorities. and watch list names that you want to get after if things get cheap. And it was a once a decade opportunity. It was a steepest market drawdown in history. And broadly, if there wasn't something, they're attractive to you, I'd say that you hadn't done your homework beforehand. We run pretty concentrated portfolios, and our classic foolish investing, we're low turnover, long-term investors.

So because of that, we know our companies really well. We have our heads wrapped around them. And we're able to internalize new info fairly quickly. I say that because what happened with such a, it was like an investing simulation where there was no framework in the past century for anything that's happened like it. So, you know, you'd listen to Buffett or Drucken Miller who I think those guys are amazing. But they would talk about, well, there's this, there's that. But the thing is they're trying to rely on frameworks that they've used before.

But this was not a movie any of us had seen before. This is like you'd only seen old talky, like old black and white films back in the day. And then suddenly you're shown like anime. And you're like, this is not my thing. It's very different. So because of that, I think a lot of investors sat on their hands. And I think that ones who owned too many stocks. So, I mean, I would say, you know, like typical mutual fund, you know, could own 100 stocks.

If you own that many stocks and you're trying to rethink your thesis for all of them in the context of this pandemic, good luck with that. You know, you're not going to be able to do that effectively. And so I think a lot of people were playing defense instead of playing offense. So I think having solid watch listing process was essential. Was it, you know, a bit scary buying in late March? Of course. I mean, who's going to sit here and pretend like it wasn't, right? But at the same time, again, if you're not buying something during the steepest market drawdown in history, what do you hold an out for?

And I think at that point, too, it had been clear for weeks, which I realize weeks is not a long time. But in that period of time, weeks were a long time. It was like dog years, you know. And it was clear that there were a lot of businesses that were going to do better because of what was happening. And I don't mean like grocery stores selling out of toilet paper. I mean a massive pull forward in adoption curves for business models because of a rapid shift to digital commerce. And I think we were fairly quick to identify that and some of the companies that would be beneficiaries and that treated us well. But again, I think it was just from a starting point of let's know our companies well.

And let's have a basket that we think are awesome companies, but the price may not be where we'd like. But if we get the right chance, let's dive on them. And so that was in a nutshell, while, of course, juggling, doing it from home and screaming kids in the background and all that fun stuff. You mentioned payment companies, and this is something I had seen you referred to recently because there's been a lot of talk about the speed of innovation, you know, Satya Nadella at Microsoft talking about, you know, we did two years worth of innovation in, you know, two months. We've seen it for large bricks and mortar retail. But I think that for a lot of people, just as consumers, just as human beings, there's a natural tendency to say, well, when is life going to get back to normal? And one of the things I've

seen you talk about recently is there are structural. changes that have happened in the business world. And because of that, in some cases for good, in some cases for bad, there is no going back to the way it was before. Yeah. Yeah. There's some stuff that will come back. But I think the shift to digital is the biggest. I'll give you two specific examples where I think things have very clearly structurally changed. So with payments, if you look at basically PayPal, which you know, you and I've been talking about for a better part of a decade, PayPal had roughly a 2X in terms of the number of new users they had coming onto their platform, not total users, but new ads, which is pretty phenomenal acceleration, right?

And why is that? Well, there were a lot of people who hadn't bought stuff online before who suddenly were like, well, I have to try it, so I will. And lo and behold, once those people, get accounts open, they've seen, PayPal seen really high engagement from those new cohorts. So it's not just that they've started using PayPal. They're using it a lot. And realistically, when people make changes to their consumption habits, they tend to stick. So a lot of people bought groceries online for the first time over the past several months. And while, you know,

a lot of us will go back to going in store, they're probably a high percentage of people who are going to say, well, look, I'm actually going to keep buying a lot of this stuff online. What I think is really powerful is that it's two sides of the network, though. So there's not just the user side. There's the merchant side. And I'll give you an example. Near me, I now have three different butcher shops that will deliver to my house. The beef in Australia is fantastic.

Beef in Sunshine, the only two things that are cheaper in Australia than in America. But they're both great. But three butcher shops will now deliver to my house. And you couldn't do that. six months ago. But what happened, they all opened Shopify stores. They all started accepting PayPal. And now, you know, there's a structural change to their business where I'm guessing they're probably going to say, oh, it turns out we're meeting customers on their terms, and we're probably going to do a lot more business. So if you look at PayPal's run rate on

new merchant ads, they'd been picking up about five, six hundred thousand new merchants a quarter. that skyrocketed to $1.7 million in the latest quarter. So a 3x. And why is that? It's because it's a highly trusted brand and one of the fastest ways for a new merchant to start getting money from customers. So in those situations,

will there be a bit of a windback with some consumers shifting to buying back in store? Yes, but broadly, I think the landscape has changed with how these merchants think about engaging with customers and customers have started shopping online. Another one is cloud. So a lot of cloud stocks have absolutely skyrocketed, and we've taken some money off the table

with some of our bigger winners there, but they've run really hard for a very good reason, which is that, and we'd know this from within our own business, right, because we have a huge IT team at the full. Basically, everyone has realized, no, the future was always cloud and moving from desktop-based or on-premise software to cloud, and why is that?

because cloud is scalable, you get faster updates, get better product, more integrations, more flexible. But now, just structurally, it's like, look, it may not be safe for us to have people coming into the office. We need everything, you know, remote and at scale. And that's the way our own business has been run for a long time, which has made things a lot easier to fool, but not at other businesses. And now I would wager that virtually any IT department, when they're evaluating, any new piece of software, step one, is this cloud-based? Because if it's not, now my workforce is spread all over the state, city, country. You know, on-premise desktop doesn't work for me anymore.

So it's got to be cloud-based. And that's just been like a, you know, you grab the rug and you just hug it towards you. Yeah. So it makes perfect sense that these businesses would be selling a premium prices when, you know, you just had three, four years of adoption and get pulled forward. And that doesn't mean that you see all that revenue come right away, but you'll start to see it come through because some of these implementation cycles can be longer. So to use Shopify and AWS Amazon Web Service example, Shopify, really easy to stand up a Shopify store, which is great. And that's why they've seen such a huge spike in revenue.

AWS revenue actually can grow all that. Well, it grew, but not as quickly as some people thought in this quarter. And it's because they were actually helping customers ring out cost, but their backlog went up. And what's going to happen is any customer, all these customers who were kind of like slow playing, well, we're going to shift from on-premise to distributed computing that I'm sure that has become a major strategic priority for companies. And so, you know, you won't see that this quarter, but I think you see it with higher growth rates in, you know, a year or two, three years out from now. So because of everything you just said about cloud, about digital payments, about e-commerce, because of all that, when you look at the NASDAQ as of this conversation up close to 20% year

to date, do you look at that and think, yeah, that makes sense to me? Yeah, intuitively, yes. There's a lot of stuff that's run hard that's just kind of rising tide, lifting the boat that I would say is frothy. But I think the examples I just gave a good one. where I think there's a real sustainable and structural reason why that's happened. You know, the other thing is a lot of these business models, too, they're predicated on recurring revenue.

And anytime someone makes comparisons to 1999, it's like, look, the economics of a SaaS business with 90, 100%, 110% that revenue retention versus a business that sells, ads, you know, pay per click, It's a very, very, very different economic model. I know you've been in the market for a long time, and you would appreciate that well, but I don't think a lot of people who have looked across time, a lot of people haven't, I suppose, and they may not appreciate that. But I'd say they're very different markets.

And something I think is interesting, too, is that for all the people who, so statistically, value versus growth right now, value is attractive relative to where it growth is if you look in a historical lens. But at the same time, there's awfully good reasons. You know, again, like there are good reasons why a lot of these mega gap growth companies have done really well for what we just talked about. And then to the downside, I think what a lot of people who are just when they invest in value and it's purely statistically based, so it's like, yeah, it's a bad business, but it's really cheap. You know, in that scenario, in recessions, you know, you get punched in the face and that's what's happened. So

obviously, I'm not going to sit here and pretend like I was picturing second quarter. At New Year's Eve, I thought second quarter GDP would be down by a third. But, you know, that's one of the risk you take when you invest in low-quality businesses or ones with bad balance sheets. You mentioned Warren Buffett earlier. I'm curious what you think when you look at the business to Berkshire Hathaway right now, their most recent earnings report, you know, the thing. that sort of leapt out to me and anyone who looked at it was, boy, the portfolio side of the

business really seems to be propping up the business side of Berkshire Hathaway. They bought back $5 billion worth of their own stock. What do you make of Berkshire Hathaway right now? Well, I sold some of my shares recently. It's probably a good way to put it. Some but not all. We have a Warren Buffett head at our office that's on the wall. So, you know, I think he's history's greatest investor, a tremendous business person, amazing philanthropist. So, you know, all those things. I was, as a shareholder, really disappointed and underwhelmed with how they executed during,

particularly with the investment portfolio, during the downturn, you know, with the airline position. And I never particularly cared for the airline stakes to begin with, but it felt like he basically bottom-ticked unloading a massive amount of stock in those companies. I guess philosophically, what was frustrating to me was that Berkshire had been piling up cash for a long time. And a lot of the thesis at that point was, well, look, they got a lot of cash here. It's been dragging on performance, but you've got histories. greatest capital allocator running the business. And if there's a big downturn, they'll make the most of it. But instead, they were net selling. And to me, it just felt like the investment thesis was dead on

the side of the road, to be honest, where it's okay. So I thought the idea here was we're greedy when others are fearful. And we had all this money to put to work, but instead, you know, not much was put to work. And so at this point, I'm just a little, I think the case for continuing to own has gotten a fair bit weaker if it's based on, you know, we're counting on Buffett to put money to work. And, you know, he said that he was trying to preserve capital and he's thinking about his investors. And I appreciate that, but I can't help but think that he's looking at it through the lenses of someone who, you know, has substantially all their needs. net worth in the business. And it's like, yeah, but that's great, but that's not how your investors are.

You know, 99% of your investors probably don't have 99% of their net worth in Berkshire stock. So we can stomach a little bit of risk. And I thought you had that cash there to buy something. So, you know, I was disappointed. But to be fair, I've also, while I'm managing the business and funds, and that is challenging. I'm not managing one of the largest businesses in the world that's incredibly complex with a large insurance division. So it's easy for me to say all that when I have had not nearly the challenge that he did navigating that environment.

Chilmaker, always good talking to you. Thanks for being here. You too. Thanks, man. Up next, we'll give you an inside look at the stocks on our radar. This is Motley Full Money. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So don't buy ourselves stocks based solely on what you're here. Welcome back to Motley Fool Money. Chris Hill here once again with Jason Moser and Ron Gross.

Time to get to the stocks on our radar. And I'm the original man behind the glass. Steve Roido is here to hit you with a question. Ron Gross, you're up first. What are you looking at this week? So getting my son ready to return to college always brings bed, bath, and beyond. B, B, B, B, Y back into my life. Bought shares back in February, thinking that the former target exec,

Eric Tretton would succeed. He changed the management team. He was moving. He was shaken. Then the pandemic hit. But some interesting news recently, company has lifted the suspension on their debt retirement. They put out a tender offer for $300 million.

They sold personal, I can't even say it, personalization mall.com for $245 million. I'm betting on Mark Triton and get it done. Steve, question about bed bath and beyond? So if I can't go to the store physically or if I'm less inclined to go to the store, does this company still work? I mean, it's the dream when you walk in and there's the diffusers and the pillows and the giant tall things. That seems like the dream of bed, bath, and beyond.

It's not the online stuff for me. So Tritton is really going hard to increase the digital sales. And also buy online pickup curbside has been very important, especially during the pandemic. So he's certainly going to the multi-channel. route. Some of the stores were too busy, too stocked. They're trying to reduce the footprint, turn things around. I think they got a shot. Jason Moser, what are you looking at this week? Yeah, taking a look at Qualcomm. A ticker is Q-C-O-M. Not one way you get to really talk a whole

heck of a lot about in our foolish universe, but really a big and good business. That is core. It's a chipmaker from smartphones and tablets to navigation systems and smart speakers. But the business itself reports in three different segments. They have the QCT segment, which is the actual semiconductor business, but they have a technology licensing part of the business, the QTL part of the business. That is what grants licenses an intellectual property to all of these different tech companies that use the over 140,000 patents that Qualcomm currently possesses. They just chalked up a nice quarter, actually had some litigation that was a decision that was handed down from the FTC last year. that went against Qualcomm. That ruling was reversed, which was seen as a positive as well.

Just settled up a nice relationship here with Apple going forward. So a big company, not under the radar, so to speak, but a quality business that's going to play a big role in our lives over the coming decade. Steve, question about Qualcomm? Do you think it's possible that some people own Qualcomm and have no idea what it does? It's such a giant company, and I hear it's everywhere and doing everything, and it's been around forever. So what do you think that likelihood is? I think that likelihood is strong. I mean, I think it's easy just to call it, easy to call it a chip company and just leave it there.

But when you consider all of the actual intellectual property they possess, it really does a lot. It's not a simple business. What do you want to add to your watch list, Steve? I'm going Qualcomm. All right, Jason Moza, Ron Gross. Guys, thanks for being here. That's going to do it for this week's show our engineer, Steve Roydo. Our producer is Matt Greer.

I'm Chris Hill. Thanks for listening. We'll see you next week.