Motley Fool Money - Market Volatility, Airbnb, and Dan Ariely

Episode Date: February 26, 2021

The stock market falls as interest rates rise. Airbnb reports a big loss but shares rise on stronger than expected revenue. Home Depot, Lowe’s, and Square slip on growth concerns. Etsy rises on earnings. Papa John’s and Domino’s don’t. Beyond Meat makes two big deals. And Door Dash declines in its debut quarter as a public company. Motley Fool analysts Andy Cross and Ron Gross discuss those stories, weigh in on Amazon and Chewy, and share two stocks on their radar: Curiositystream and ResMed. Plus, Duke Professor of Psychology and Behavioral Economics Dan Ariely talks risk, luck, and how to navigate market declines. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill, joining me this week's senior analyst, Andy Cross and Ron Gross. Good to see you, as always, gentlemen. How you doing, Chris? Hey, Chris. We've got the latest headlines from Wall Street. Best-selling author, Dan Ariely is our guest.

And as always, we've got a couple of stocks on our radar. But we begin with The Rising and not the song by Bruce Springsteen. This week saw rising volatility as well as the continued rise of 10-year treasury yields. And the two combined to make it a rough ride for some investors, especially, Andy, when you consider the NASDAQ at one point this week was down 5%. Yes. And especially if you're a new investor who's just joined the market to so many have, we've had millions of new investors come into the market, which generally, generally I think is a really good thing, good healthy, as long as they have the right perspective and the right mindset

to be an investor. Unfortunately, I'm afraid many don't. So that's what we're here trying to help people understand that markets are volatile. They can be. What we saw this week with stocks moving 5, 10 percent in a given day at the stock level, especially for some of the growth stocks that have performed so well, Chris, over the last year. I mean, the S&P itself is up more than 70 percent, and so many of the great growth stocks are up multiple times of that. It's having these breather is where stocks get sold off and the price falls five or 10 percent for whatever reason. And it could be earnings. It could be macro conditions. It could be political conditions. You have that in the markets. And it's very important that if you are investing in stocks,

that you take that three to five year perspective. Because if you don't, your chance of getting spooked out of a great company because of the near-term volatility can be very real. And you have to be careful about that. Things were a bit frothy. We've had a good run, especially in the NASDAQ and with technology stocks, with growth stocks. And that's wonderful. And, you know, it's also fine that we take a step back periodically. And it's not something to panic over. It's actually healthy. Things can't go up all the time. It's just not possible. So things stagnate sometimes, when I say things, stocks return stagnate sometimes. Sometimes they go down and correct. You want to make sure if your particular stocks are selling off rather significantly

that there's nothing wrong with the company, that it's just a general market malaise, if you will, and time to take a step back. As interest rates rise, other financial assets become more attractive relative to stocks, and that causes outflows as well. But again, as Andy said, we're long-term investors. Make sure your companies are rock-solid. You're happy with owning companies, not markets, and I think everybody's going to be fine. And remember, the prices are maybe just back to where they were like a month ago, So that's just what happens. You have to really understand that and have that right, healthy, long-term perspective.

All right. Let's get to some earnings. Shares of Airbnb up 12% on Friday. After coming out of the Gates Strong, it was Airbnb's first earnings report as a public company, and revenue was higher than expected. And sure, Andy, they lost nearly $4 billion in the span of 90 days. But come on, this is a growth company. Let's focus on the top line here.

What's $4 billion among friends? Hey, listen, Chris, it was a roller coaster ride for Airbnb over the last 12 months. Its valuation got as low as $18 billion by some valuation estimates and some reports. Before it went public and now it's at $108 billion. It just got crushed during the quarantine. They had to lay off the staff. They had to really reposition their website. Really think about how they are selling their services and how they are targeting audiences

and what kind of hosts they are recruiting. and they have really climbed out of this of a very tough pandemic situation. While revenues in the fourth quarter were down 22 percent at $859 million, adjusted EBITDA was negative at $21 million. But that was $250 million better than in the fourth quarter of 2019, Chris, when revenues were $250 million higher. So they've really managed the cost structure. The nights and experiences were down 39 percent in the fourth quarter. gross bookings down 30% in the fourth quarter. So I guess the only bright side is the average daily rate was up 13% in the fourth quarter. So what they charge versus the average nights that

they book. So overall, when you look at the quarter for Airbnb, it was a slow step of progress that we saw from the lows of April as they really have cut costs, reposition, tried to reposition their marketing. A fun fact that talked about is that in the fourth quarter, more people stayed in Sicily, then stayed in Florence and Venice combined. And what that tells us how they positioned their business was to start to focus less on the cities and much more on the rural opportunities to be able to attract people who want to just drive as opposed to fly. Andy, I'm sure they talked about the vaccine opening things up and how that will obviously improve the business. But that would also improve the hotel business at the same time.

So did they have any discussion about, you know, once everything opens up, competition is going to kind of be pre-COVID levels and where they stand with respect to that? Well, Ron, yeah, they expect their revenue drop, their fall in the first quarter to be lower than what it was in the fourth quarter. So again, continuing to make progress. And I think they do expect that competition to kick back up as people start to explore different options and where they want to travel. That's why they continue. They're going to spend a lot in marketing in Q1 and Q2 that will hit the profitability even further as they start to attract more and more people for the summer holiday season. But I really do applaud their team for making that transition in a really very tough spot

when people were wondering, wow, they were burning a lot of money last summer. And there was a lot of questions about what's the future is for Airbnb. And right now it's looking a lot brighter than it was a year ago. Home Improvement might be slowing down. Lowes and Home Depot's fourth quarter reports featured higher than expected profits, but shares at both companies down this week on lowered expectations for 2021. Ron, Home Depot down 7%, lows down 10%. Do those moves make sense to you?

You know, they're both similar stories. And if you're looking at the stock's performance to gauge how the quarter was, I think you're doing a disservice. And if you're looking at the stock's performance to think about the future of the company, I think you're also doing yourself a disservice because there are some real strengths here. And we can go through some of the numbers. Let's take Home Depot, for example, first. Sales up 25 percent, comp sales up 25 percent as well. If we remove the impact of the HD supply acquisition that they brought back into the fold, adjusted earnings were up 20 percent.

Specific to Home Depot, investors were focused on the future guidance. And that's typically, you know, the markets are forward-looking, investors are forward-looking. And management said They're limited in their ability to forecast demand for fiscal 2021. I guess that's not surprising. It's hard to understand what's going to happen in a post-COVID, a post-vaccine world. But they said if the demand environment during the back half of fiscal 2020 were to persist, it would imply flat to slightly positive comp sales growth. And slightly positive comp sales growth is exciting to know one.

But again, that's just in the very near term. It doesn't impact my opinion of Home Depot as a strong business. And they increase their dividend 10%, I think, to send some signals that were a strong company. 2.6% yield is nothing at all to sneeze at. That's a nice yield for a company like Home Depot. Lowe's similar story, sales up 27%. Com sales up 29%. Management was a little bit more forthcoming, though, with guidance. They said they expect to grow market share and drive further operating margin expansion. They're planning a $9 billion share or purchase program. So things a little bit more clear. here there, but they're clearly in the same boat. From a stock perspective, it's the same old

story. Low is a little bit cheaper on a relative PE basis than Home Depot, but they're both fine companies. I don't think you need to choose between the two of them. It's fine to, I think, own either or both. Squares' fourth quarter profits and revenue came in higher than expected, but shares have squared down nearly 20% this week because the growth is slowing down. And, Andy, I get the slowing growth. But this really seems like a nice buying opportunity for anyone who has Square on their watch list. Chris, I would agree with that. There are two really, I think, important announcements or announcements and facts that got the most attention. And that is one that they are further, they're investing into Bitcoin and supporting Bitcoin. And also their cash app continues to

kill it. So they announce another 170 million purchase of about 3,300 Bitcoin's on top of the 50 million that they bought in Q4. That's now about 5% of the cash on Squares balance sheet. So, 3 million cash app customers purchased or sold Bitcoin in 2020 and 1 million cash app customers purchased or sold Bitcoin in just January 2021. So Jack Dorsey said, the founder and CEO of Square, said we believe that internet needs a native currency and we believe Bitcoin is it. So they continue to make this investment in Bitcoin, but their cash app, Chris, which is the peer-to-peer money-sharing app and platform, now is 36 million monthly active users. That's up 50% from last year. The cash app ecosystem generated gross profits in the fourth quarter of 377 million. That was up 162%. Gross

profit per monthly transaction of active customers on the cash app platform was up 70% to $41. So really, building out the cash app ecosystem. And if you think and you believe that the digital money system is evolving and changing, and you look at a company like Square that is building this cash app ecosystem along with their other businesses, looking ahead, they continue to double down on the commitment to Bitcoin, looking at their profitability, looking to be able to gain more and more members and grow those members and grow those transactions, you've got to say this opportunity to buy Squibor Square, cheaper price is pretty attractive.

Coming up, I hate to be the one to say this out loud, but Americans might have to start eating more pizza. Details after the break, so stay right here. You're listening to Motley Fool Money. Welcome back to Motley Full Money. Chris Hill here with Andy Cross and Ron Gross. Shares of Etsy rose more than 10% on Friday after a monster fourth quarter report. Profits and revenue were higher than expected and new buyers, Andy. I mean, Etsy's been around since 2005, but 2020 really seems like it's the year that tens of millions of people shopped on Etsy for the first time. Chris, you're right. CEO Josh Silverman called it a transformative year with gross merchandise sales, so the value of everything Etsy sells across its platform

and revenues more than doubling to levels that they targeted in 2023. Basically, did what they expected in 2023. They did in 2020. Etsy grew two and a half times, faster than the e-commerce growth, which, as we know, was all very attractive. So, it now is 85 million items for sale. Active sellers were up 64% in the year. Gross merchandise sales per seller during the year was up 22%. Active buyers just in the fourth quarter, Chris, was up 70%, to 81 million with 6.5 million as habitual buyers, which means they buy more than once. 73% of customer contacts in the fourth quarter, Chris, were through voice or chat, and that was up from 22% just a couple years ago. So, not only they attracted more buyers, but they're spending a lot more attention

to those buyers and the sellers. When you look at the gross merchandise sales up more than 118%, the revenue up 129% driven mostly by their marketplace revenue, which is up 150%. That's listing fees, transaction fees, payments across the platform. You've got to say looking at the holiday season, Etsy has really built a marketplace that for getting masks, as masks was a big part of their business, they are much beyond masks. They have massive reach, and they are reaching more and more buyers and sellers to help entrepreneurs out there connect. Papa Johns and Domino's both out with fourth quarter reports, both put up strong same-store

sales numbers, yet shares of both Papa John's and Domino's down around 10% this week. Ron, what is going on? I think in a COVID-related world, people were just expecting to see. see just bigger numbers than they put up. And it's not like the numbers were bad. They just didn't meet investors' expectations. We can take Domino's first. Global retail sales up 12%, excluding the benefit from a 53rd week. If you include that, it's a little bit misleading. US same-store sales growth up 11 percent, international up 7 percent. This was the 108th consecutive quarter of international same-store sales growth and the 39th consecutive quarter

of U.S. same-store sales growth. So they continue. to put up impressive numbers. The stock has been unbelievable over the longer term. They added net 388 stores in the fourth quarter, 624 for fiscal 2020. Earnings up about 10.5 percent. New repurchase program, authorized a 20 percent increase in the dividend yield. You get a 1.1 percent yield now at that level. So things are great. They're just a little bit lower than folks expected. They put a new two to three year outlook in there, which includes 6 to 10 percent global retail sales growth. And the same for Papa Johns, although Papa John's has had its own problems, self-imposed over

the last year or two with the new CEO taking the reins in August of 2019. But for them, total revenue up 12.5 percent. Adjusted earnings were up 40 cents per share versus a loss this time last year. So they've kind of turned things around too. But these things need to take a breather and they sold off a bit because investors just wanted more growth. Beyond Meat reported a loss in the fourth quarter. that was bigger than Wall Street was expecting, but that news was overshadowed by Beyond Meat's

announcement of a three-year deal to be the preferred supplier for McDonald's plant-based burger. And Andy, they also struck a deal with Taco Bell. Yeah, they make plant for McDonald's, a new plant-based burger being tested in select markets globally, and also will probably help produce and develop other plant-based kind of foods, like maybe for chicken, pork, and egg, and as you mentioned, the other one with Young Brands, too. So that really kind of trumped what was kind of a meh quarter, Chris, was sales up three and a half percent, driven almost all by the retail sales, which was up 85 percent. The food service sales, so the commercial sales was down 54 percent.

So those continued to move in the opposite direction, as they have been for most of the past a year. They had an increase of 7 percent on the volume side, and that was offset by a lower price per pounds. So, retail sales doing well, service sales doing poorly, but they continue to invest back very heavily in this business. Operating expenses were up 45%. That means the operating expenses as a percent of revenue was at 50 percent this quarter versus 35 percent last quarter. So they're spending on headcount, marketing, IT, international expansion. That's really hurting the bottom line and their cash flow, Chris. So that's something to watch with Beyond Me, but overall, you know, $9 billion dollar company playing in a massive market in a differentiating way. And that's kind of getting more

attractive as the stock gets the valuation gets a little bit more normal here. Shares of DoorDash falling 16% on Friday after the company's first earnings report as a public company. Revenue was higher than expected, but DoorDash lost hundreds of millions of dollars, Ron. Shouldn't a business like this be doing well at a time when food delivery is higher than normal? They're doing well, but it's an expensive business to run. And they just haven't reached the level yet that they expect to see that path to profitability that relatively early stage companies like to talk about. A little context.

The IPO in December was priced at 102. It went up around 80% in the first day, if you recall. We're somewhere in the high 150s today. And as you said, first quarterly report as a pumply company. It was mixed. Results were solid. Guidance was soft. Revenue up 220 percent.

total orders up 230 percent. Obviously, COVID is the main driver there. Reported a loss of use, as you said, of several hundred million, $312 million for the quarter. That was bigger than last year's loss of $134 million. So increased expenses, lower profitability there. They did have adjusted EBITDA that was positive. So cash flow was positive at $94 million. So that's one bright spot. The guidance expects fewer customer orders, reduce. order frequency, smaller average orders in the back half of the year as the vaccine rolls out and allows people to get back to restaurants. Again, I don't think we should be surprised about that. There was some artificial growth here built in because we were all stuck at home.

It doesn't mean that Doordesh isn't relevant and doesn't have a business model that will make sense in the future, but it's going to go back to what a more normal business looks like for them. But unlike the similar percentage drop that we saw with Square, This doesn't scream buying opportunity to me. Is it to you? I like my company's profitable, quite frankly. Or at least getting close. $300 million loss is a bit high for me.

So I'm going to keep an eye. Well, you're old-fashioned like that. Yeah, well, yeah, that's for me. Ryan Gross, Andy Cross, guys. We will see you later in the show. Up next, Dan Ariely has an idea how investors can keep calm in a volatile market. You're going to want to hear it. So stay right here.

You're listening to Motley Fool Money. Welcome to a ticket to anywhere, maybe we make a deal. Maybe together we can get somewhere. Any place is better. Starting from zero, got nothing to lose. Maybe we'll make... Welcome back to Motley Full Money. I'm Chris Hill.

Dan Ariely is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University. He's a founding member of the Center for Advanced Hindsight, and he's the author of several best-selling books. books, including predictably irrational and the honest truth about dishonesty. And if that's not enough, he's also the chief behavior officer at Lemonade. Earlier this week, I got the chance to catch up with Dan. Here's part of that conversation. You and I were chatting before we started this interview. There are a lot of people who started investing just in the past year, even in less than a year.

I feel for them. I feel for them. The people who started investing at the bottom last spring? Yeah, it's been a rough ride for them. Terrible. That's just, no, no, I'm serious. You can say, oh, you know, they've made so much money. But no, I'm really seriously sad for them.

But this goes to my question because it goes to the idea of risk, which is something I know you have studied, because when people start investing, a lot of times they are, particularly if they're working with a financial advisor, they try to get a risk profile for this person. and they ask questions, like, how would you feel if your portfolio fell 25 percent? And that's a genuinely important thing to try and understand, but it seems like a very imperfect way to get that answer. So what is a better way for people to think about risk? Okay.

So first of all, I hate these risk servants. I think they are stupid and misleading and they're cheap. and nobody should be using them. I think it's regulatory required for some ridiculous reasons, but I think it's irresponsible. And I can tell you many reasons why they're irresponsible. But I'll just give you two, maybe three. The first one is that when we do risk surveys of this type,

and we show people three portfolios, low risk, middle risk, high risk. People choose them. middle. Great. Now, imagine that what we do is we take the high risk out and we add the lower risk in. So now we have low, middle and high, but we just shifted them. They're all lower risk. What happens? People choose the middle. Choose the middle. So it turns out if you give me risk profiles, I can get people to generate lots of different things. It's a meaningless answer. That's the first thing. The second thing, which is more serious, people don't take risk with money.

At the end of the day, people take risk with their consumption of life. So I can ask you, you know, how would you feel if you lost 20% of your stuff? But the reality is that money means to an end. I need to ask you, how would you feel if your kids can't go to wherever you want them to go? And how would you feel if you had to downgrade your house? I mean, these are the real questions. And it turns out that there's nothing to connect those to. You ask people about the risk in life, and they tell you a very different answer.

You ask them about the risk about money, they tell you how they would feel. But financial advisors are supposed to be like doctors. They're supposed to know something. So that's my third thing. Imagine I was your financial advisor. And I said, hey, Chris, how do you feel about risk? and you say, oh, you know, I really hate risk. I don't sleep well at night and so on.

What should I do? Should I tell you, so why don't you be poor for life? No, if I was your doctor and you came to me and say, hey, Chris, how do you feel about pain? And you say, oh, really, I hate pain. I would say, you know what? So I'll do this treatment for you with full anesthesia. Or I'll give you value. I'll give you a painkiller.

I don't say, oh, so just live with pain. I'm not treating you. So if I was your financial advisor and you came to me and you said you hate risk, I would say, don't look at your portfolio. Take value, study meditation. It's unclear to me that because we feel about risk differently, people should be condemned to being poor. In fact, if somebody is an expert on risk,

they should tell you what risk you should be taking. Risk is not about the feeling. Risk should be an outcome variable is not an income variable. That's the last thing I would say about this. If I was your financial advisor, I would say, what are you trying to achieve in life? And you would say, oh, I want to retire in Florida and I want a boat and I want this.

And I would calculate for you how much money you need. And your risk will be an outcome. of how you want to live. In what world would we take money and say, instead of optimizing your future life, we're going to optimize your feelings at the moment. Anyway, it's, when you think about it, it's a crazy thing. It's a crazy thing that we got to that terrible, terrible system. So let's go back to something we touched on earlier, which is the people who started investing last spring. who have known in their short investing life nothing but success in general.

How should people set their expectations? Because if you've only been investing since last spring, there's a good chance you have outsized expectations for what your investing outcomes will be. The worst thing that can happen to somebody who goes to Las Vegas is to win the first time. There's lots of experiments in human psychology about how our first experience really defines us. If you're a little duck, the first thing that you see moving, you figure it's your mother and you follow that. If you take initially a risk and it worked out, you become addicted to that risk.

The people who started investing, and for the last year, or 11 months, had nothing but success, have basically created with it the expectation that things would always increase. It would be incredibly hard for them when reality settles. Like, imagine somebody, like if somebody is 70, not so bad, but if somebody is 20, and this is going to be with them, for the rest of their life, they will remember that their first year of investing, And the odds that they'll be have another year like this is very, very low.

This is really setting them up for, for expectation. Now, I really don't want people to to lose a lot of money. So it's not that I think that they should. I'm wishing. I wishing things that are bad for them. But what people need to do is they need to realize that investing has a huge component of luck. And that yes. things were lucky and it was not that they were smart.

It was not the world is like this. So, you know, you could play with yourself and you could say, what would happen if I invested the same thing in the beginning of 2007? What would have happened to my money? Get some other prospects saying, okay, I just happened to be born in 2000. and I started investing in 2020. What would have happened if I was born 20 years earlier or 19 years? Like, what would have happened now?

And I think people need to recognize that it's luck and not skill. Because if people think that it's going to be skill, they're going to keep on chasing returns. And we all know that that. That's one of the most dangerous things, is to think that you're smarter than the market, and you can chase returns, and it's about you. That's a recipe. It's a recipe, first of unhappiness because you keep on chasing something.

And then the second thing, it's a recipe for a lot of financial losses. We have just a few minutes left. So two questions before I let you go. First, when the inevitable decline comes, what are a couple of things investors can do to diminish the odds they make rash decisions. Yeah. So, you know, one of the things that we know that people are better at is if we write a specific contract and we remind ourselves about that contract.

So if you say to yourself, when things start going down, I will not sell anything within the week. Here's my cooling period. And if you want to make it more powerful, get a friend to science as well. You want to make it even more powerful, give them authorized signature on your account. But the point is that the way that emotions work is that emotions kidnap our brains, fear, happy, both good and bad side. And you don't get deep cognitive thoughts and emotion at the same time.

just doesn't work. The moment emotion takes over, it takes over. And making decisions, you know, some decisions it's fine to make about emotions, love, poetry, not so much in the stock market. So what we need to do is we need to recognize that emotions flare up. They also die quicker than we think. And we need to create a cooling period so that we don't let our emotional. emotional highs dictate our financial futures. Last thing, and then I'll let you go. One of the economic ripple effects of the pandemic has shown up in a niche retail category, and that's board games. Sales of board games and card games are up dramatically over the past

year. I just learned, you have your own. Please just tell me about, and this is the official title, Dan Ariely's Irrational game. So what is the game? So, you know, in physics, if you think about physics, what you're trying to do is to predict the movement of an object like a-throate physics. He's a ball. It's running. Like, where would it stop?

In social science, it's the same. I give you a new situation. I say, hey, you meet three people. One of them is short. One of them is tall. Which one would you like more? Which one would people, in average, like more? And we describe a little experiment, and then we give people four answers.

And the people who win are the people who understand human nature better. And on the other side, we tell you what the real answer is, and something about the implication it means. So it's a game that is really designed to test our intuition about how people behave, and then teach us a little bit about that. I will say that many people wrote me and said that they ended up using this game as a dinner conversation. They said, the game is long, but what we do is we take one card and we discuss it and we use it as a dinner conversation, not in the way that I intended it, but that's fine

as well. That's probably just as well, because I can't imagine your friends would want to play this game because it's got your name on it. If I went over to your house and you said, Hey, let's play this game. I would just assume it's rigged for you. Yeah, it is rigged for me. I came up with it so, so yes, I know the answers. Dan Ariely, always great talking to you. Thanks so much for taking the time to be here. Same here. Take care. Talk to you soon. You can find out more about Dan Ariely and his work by going to his website, Danarelli.com. Up next, Andy Cross and Ron Gross return with a couple of stocks on their radar.

Stay right here. You're listening to Motley Fool Money. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So don't buy ourselves stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here with Andy Cross and Ron Gross. Our email address is Radio at Fool.com. Question from Micah in Canada, who asks, what do you think of Chewy specifically when considering

Amazon? Do you think there's room for both, or does either stand out as the stronger pick for consumer pet needs. Obviously, Andy Chewy is all-in on pets. Amazon does have a pet business, though. Well, Amazon has a bazillion other businesses. So, yes, you can definitely own both these businesses. Chewy all-ins, a $40 billion business, much smaller than Amazon, all-in on pets. And the pet market is booming. Two-thirds of Americans now own pets. It's growing like gangbusters. We care a lot about spending money in our pets. And importantly, Chewy has that all. ship, 70% of their sales are really tied to recurring shipping, and that's just really powerful.

So, yes, I think you can own both of those because they are similar yet different enough businesses. Yeah, I think Amazon, its strength is in its breadth of products. They're not as good as when there's a certain niche to focus on. That's why I do like companies like Chewy. And also, buyer beware on Amazon. You're not always sure, because it's a marketplace that you're getting the appropriate price. So it requires you to do some research versus if you go to Chewy I think you can be more sure. One more question this time from Wilson Lee.

Can you talk about what paths or actions one should most likely take in order to have a career doing what you do, whether it's to become an analyst or to research stocks or investment ideas for a firm or a fund or a subscription service? After eight years in the culinary industry, I'm in the middle of a career change and I'm starting school again. I'm curious if you have any suggestions. Ron, what do you think? I would say read, learn.

and repeat. It's about increasing your knowledge of companies. Certainly, there's a certain amount of understanding of markets that you want to have, but really understanding companies and the way they make money that does require some accounting and finance knowledge for sure. But the more companies you look at, the more sectors you look at, the more comfortable you'll end up feeling about giving your opinions on companies. You just got to keep doing it and doing it and doing it. Even after decades in the business, there's still more to learn always. But I think reading and learning is where you start. Let's get to the stocks on our radar and our man behind the glass. Dan Boyd is going to hit you with a question.

Andy Cross, you're up first. What are you looking at this week? Dan, I'm going with CuriosityStream, an $800 million company that is specializing as a video streaming and on-demand platform of documentaries. It has 3,000 titles, including 1,000 original programs. The headquartered just down the street for me here in Silver Spring, Maryland, founded by John Hendricks, who started Discovery Channel back in 1985. His goal with this company is to be a lifelong learning academy. He owns more than 40%. It has 13 million paying subscribers, ranging from $3 per month to $10 per month, or 20 per year to 70 per year, depending on your quality. It's available in 175 countries. Sales are growing 80 to 100% a year. Dan,

It's a very new young company, but I like the prospects. Curiosity C-U-R-I. Dan, question about CuriosityStream? Absolutely, Chris. Andy, would you say that CuriosityStream has peaked your curiosity? Dan, it wouldn't be a radar stockman. It did not peak my curiosity. So, yes, it has. Hey, lots of different revenue streams available from this company from subscriptions,

of sponsorships and advertising. It'll be very interesting to see what John Hendricks builds with CuriosityStream. Ron Gross, what are you looking at? I'm hoping I get an easy question like that. I'm looking at ResMed, RMD, manufacturer of continuous positive airway pressure systems. CPAP systems, most of you are probably familiar with that term and related accessories. They're the global leader in sleep-related breathing disorders. It's a razor, razor blade model, which is really nice, strong margins, growth opportunities in adjacent markets for treating. COPD, asthma. They acquired a cloud-based software company in 2016, which allows them to pursue the opportunity of linking home-based patients to hospital systems. I think that's going to continue

to be a nice growth area. 0.8 percent dividend yields, which is on the low side, but the stock has almost doubled over the last two years, and they've increased that dividend for the past eight consecutive years. So I think you have a nice total return potential here if the company continues to execute. Dan, question about ResMed? Listen, Ron. I understand that CPAP machines are important, and sleep apnea is a very dangerous thing. But I had to share a hotel room once with a guy with the CPAP machine, and I got two words for you.

Okay? Never again. But if you, if that guy had snored instead of CPAP, you would be saying triple never again. I think from what my understanding is, CPAP is better than snoring. But, you know, you do you. Dan, two very different businesses. You've got a stock you want to add to your watch list. You know, Andy said that CuriosityStream is growing.

I think it's revenue by 80 or 100% in the last year or less several years. And that is extremely compelling, Chris. So I think I'm going to go with CuriosityStream this week. Yeah, I don't know that sleep apnea is growing at that rate. Dan's also a lifelong learner. So I feel the curiosity with him. There you go. Andy Karras, Ron Gross.

Guys, thanks for being here. Thanks, Chris. That's going to do it for this week's edition of Motley Fool Money. The show is mixed by Dan Boyd. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.