Motley Fool Money - Motley Fool Money: 01.04.2013

Episode Date: January 4, 2013

We kick off 2013 by analyzing Google’s win with the FTC, strong numbers from automakers and the latest jobs report. Plus, Motley Fool columnist Morgan Housel breaks down the fiscal cliff for investors and shares why you should be wary of valet parking.   Learn more about your ad choices. Visit megaphone.fm/adchoices

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Happy New Year, guys. Happy New Year. Our first show of 2013, we've got some good numbers for automakers. We've got some bad numbers for Barnes & Noble, and we will break down the big deals of the week. But we begin with the big macro. Friday's jobs report for December is in, and Ron Gross, I'll start with you. Here are the results. 155,000 jobs added unemployment rate at 7.8%.

What do you think? Can I say good but blah? Does that make sense? You've said it before, so why not? Everything is unchanged. Unemployment 7.8, unchanged from the revision in November. The Labor of Force participation rate, unchanged at 63.6. The total unemployment rate, the so-called U-6 that we sometimes talk about,

unchanged at 14-4. So we're creating jobs and we're actually creating enough, just enough, really, for things not to go down. But the numbers aren't moving enough. But I think we're on a nice trend. We're seeing really good numbers consistently now. The fiscal cliff is behind us, kind of. Debt ceiling to come. Debt ceiling to come, but I like the momentum. I like the trend we're on. And the relevant boy might be that this is probably good enough to not prompt any more ineffective Fed action in the first place, do you think? Yes. We've seen recently some people saying, you know, QE is going to end and interest rates are going to rise, perhaps by the end of 2013. The Fed has said interest rates will stay zero until unemployment is 6.5 percent. I don't see that happening for quite some time, even though the trends look good. Joe, what do you think?

Yeah, I like it. And I think it's tough to read too much in any single macro indicator. but when you combine it with housing prices, swing in the right way. Good ISM numbers, it's definitely heartening and definitely gives you the sense that the economy is moving in the right direction. James, Ron mentioned the fiscal cliff. We're going to talk more about that later in the show with our guest, Morgan Housel. But there was the vote earlier in the week that dealt with, among other things, capital gains taxes. You're a dividend guy. What do you make?

Chris, this was a huge win for dividend investors. I mean, it's like you're expecting a beating and you just get slapped in the face. I mean, it was really good. Capital gains and dividend taxes held at parity, which is great for motivating dividends from corporations because they tend to love to squander to that money. Our dividend tax rates are just going up a little bit or barely at all for some people, which is much, much better, Chris, than most people were expecting. Just a face slap. Just a face slap. There's your headline. For most of the past two years, the Federal Trade Commission has been investigating Google for potential antitrust violations. The investigation has ended with Google. Google paying no fine but agreeing to change some of its business practices. Joe Mager, is this a victory? And if so, how big a victory for Google?

It's not even a face slap. It's a slight tapping on the wrist. It's a noogie. Yeah, I mean, this is a huge win for Google, psychologically, but also legally. And it's going to be able to kind of shake off a lot of the concerns investors have had about Google. And more importantly, allow them to focus on their core business again and not have to worry about legal wrangling. and they basically gave up essentially nothing in terms of concessions out of this. So ultimately, a very big win now in Europe is a different question. That's a nice precedent for Europe, but the stakes are certainly high over there. Ron, how do you suppose Google's competitors are feeling about this decision?

That's interesting. That's what I was going to say. The decision came down to the fact that consumers really weren't harmed here. Now, competitors, that's a bit of another story. And Google's tough, man. They spent $13 million fighting this in just the first three quarters this. year. They spent a lot of money, but so did Microsoft back in the day, and that didn't go that well for them. But from a competitive standpoint, this was strong for Google and not so great for the competition. Yeah, I mean, the irony is that Microsoft poured tons of money into PR

campaigns in the past few months, trashing Google and trying to portray them as this, you know, monopolistic giant and a little bit of egg in their face and super ironic. It hasn't been a good 12 months for Microsoft. No. It has not been. Joe, we've talked before about the federal government, potentially being the largest threat to Google. If that is now off the table, what is the big threat to Google these days? The shift to mobile and just making sure that they can monetize eyeballs on smartphones as well as they do on desktops. December auto sales are in, making 2012 the best year for automakers since 2007. James Early, some of the numbers here. GM up 5%, Chrysler up 10%, Toyota up 10%. Ford, only up 2% in

December, but that was their best December since 06. It was great for everybody, Chris. I think the overall average was about 9% and what was positive to me was that this was sort of a normal looking year. In other words, we saw the Japanese automakers return to dominance. As much as I'm an American, as much as I'm an optimist, if we were to see GM and Ford continue to crush like they did right out of the recession, I would see that as a sure sign of the apocalypse. I mean, it's just, their cars are just not that good. So to me, this is, this is something, this is a positive. And I saw in CNBC, a Credit Suisse analyst said that currently auto sales were making up something like 30% of all U.S. economic growth. That's pretty big. Joe, I know you've followed GM closely.

One of the executives at GM talked about how in 2012, amongst all the automakers, about 14.4 million vehicles sold. He thinks in 2013 that could get up as high as 15.5 million. Yeah, and I think it could go higher than that, honestly, and I wouldn't be surprised if it did the year after that, too. I mean, in 2008, 2009, even 2010, new car sales fell off a cliff. So the average car on the road right now is at a record age. It's about 11 years. Remember, that's the average car. How old is your car?

It's a 98. Wow. Pretty old. I'm actually about to just give it away. It's almost 30 years. It's broken down. It's barely even running. Sorry that James put you on the spot to do some basic subtraction there.

Me no, do math. But yeah, so there's a lot of pent-up demand out there for new vehicles. And, you know, cars are the kind of thing where you can't defer an expense ultimately for too long. You know, you can wait to redo your kitchen. You can't wait to fix your car and get to work. And sometimes it just doesn't make economic sense to fix an old clunker. And a lot of people are coming back to that, combine it with a strong economy. James, when you look at the auto stocks and sort of the related industries, are there any that sort of leap out of you?

It seems like despite the growth, despite the recent year and a half that the automakers have had, when you look at the stock performance, it's kind of a slow and steady grind. Yeah, I actually like Ford as one of the best. I mean, I like Ford among the Americans. You know, the Japanese, I see a little bit more risk there in the overall stock market. Coming up, we will break down how much it costs to put peanut butter and spam together. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Joe Maker, James Early, and Ron Gross. Barnes & Noble is not selling as many Nook e-readers as it would like. The company reported this week that revenue from the Nook media segment, more than 12% at the end of 2012, Joe, that is compared to a year ago. Any silver linings here, or is this just straight up bad news? There is a silver lining.

So digital sales, or the actual book sales, went up 13%. So the good news is that the model of kind of the razor, razor blade, sell someone a nook and they buy a lot of books. It seems to be working. The problem is they need to keep selling the nooks. And judging from the numbers, they sold a lot fewer of them. A lot of that has to do with competition from Amazon, which will be. rolled out a great slate of new Kendall products late in the year, competition from the iPad

Mini, and, you know, it's a tough time. What is there a timeline? I mean, I was in there before Christmas doing some shopping. It's pretty much empty. Nice clean bathrooms, but, you know, I bought some chocolate for somebody. Please tell me you didn't bring a buck. I have to admit, I think the last time was in Barnes & Noble involved using the restaurant. I saw this math book that I almost bought for $24.

It was like $11 I saw later on Amazon. It just seems like the model is cooked. Yeah, well, same store sales at the, stores are falling like a stone. And I think they can really drag out the Nook thing for a while, though. They're going to keep selling like these small strategic investment stakes. Well, speaking of bad Microsoft decisions, whatever happened to that $300 million investment and subsequent spinoff of the Nook business? Where are? Well, so this news that got buried this week was that Pearson, which is an education publisher, took a 5% stake in Nook media. So Barnes & Noble

still controls about 78% of it. But does that give you? you any cause for optimism, the fact that they believe in the future of Nook Media? I still think it makes sense to split the business. So they should really get that done. I'm just not sure what's holding that up. But it's a competitive business. I mean, Amazon can sell their Kindle fires at a loss. So, you know. Well, so let's go back to James' question. How much time do we think Barnes & Noble has? Because it seems like when you're making up your list of troubled bricks and mortar retailers, Barnes & Noble is always on that list.

They're maybe not as high on the list as a Sears or a JCPenney, but they're pretty high up the list. Do you think it's 2013, 2014? I mean, you've got a couple years. I mean, you look at a blockbuster. The writing was on the wall that they were toast for many years before it finally happened. These companies can really drag it out for a while. Within five years, I think we should start to see some death signs.

Offshore Driller TransOcean has settled all of its claims related to the Deepwater Horizon accident. in the Gulf of Mexico. TransOcean is paying $1.4 billion. James, I'm assuming that the $1.4 billion didn't scare investors since shares of TransOcean up about 10% after this news. Yeah, it was good news, so to speak. And what's interesting, the $1.4 billion is divided into a billion dollar civil fine and a $400 million criminal fine. Usually the criminal is higher. So BP, if we sort of parlay this using the transitive property of equality into BP, which is paid a $4 billion criminal fine. means BP could pay a much higher sulfine, and that piece is yet to be decided. Joe, when you look at the oil and gas space, it seems like, obviously, the Deepwater Horizon

incident continues to have these ripple effects, and maybe to James's point, it gets played out with BP for years to come. But historically, oil and gas has been rewarding for investors when you look at the space. If TransOcean isn't necessarily on your watch list, what are a couple of oil and gas companies that you would put on your watch list. Yeah, well, I don't think any of them are especially cheap right now, but among the oil players, I like Halberton and Schlumberger. They're the two bigger oil field service companies. They also dabble in natural gas.

But the nice thing about those guys is even though their profits go up and down with the price, it's not as much as the producers, and they have a lot of long-term demand ahead of them. James? You know, what might be a little-noticed point about the fine is that they actually get to pay that $1.4 billion over five years, which there's actually a material present value effect that accrues to TransOcean. It's sort of like when you win the lottery, you think it's a million bucks, but it's really 250, 2,500 a year, over 400 years or something like that. It's really spread out. So they're doing the same thing with that fine, which is nice. I don't think that math you just mentioned actually works.

You have to use the transit of property if you have to work out. Earlier in the week, Avis announced it is buying Zipcar, the car sharing company for $500 million in cash, Rangros, not surprisingly, shares of Zip. up around 50%. Zippity-duda. I was going to say this is one that's on your scorecard over a million-dollar portfolio. Yeah. Mixed emotions. Really?

I will never complain when a stock was up 50%, especially one that I own or our members own. However, we're still going to take a loss on the investment. We own it at higher prices. We averaged down all the way down to buying it at eight, but still our average prices in the 14. So we're going to take a 15% loss in this investment. Did they steal it? Did Davis get a good price?

It's really hard to tell. This industry is in its infancy. But I think it was a good acquisition from their perspective. Hertz on demand is going into this relatively strong. They seem to believe in it. Avis needed a way to compete. And buying Zipcar is a great way. Yeah, what about Hertz? It seems like this news kind of came out of nowhere. I don't think anyone was really expecting this acquisition. And if you're Hertz and you wake up and see the news that Avis has just plunk down $500 million for Zipcar, they can't be happy. Yeah, I think Hertz competing with Zipcar is easier versus a Hertz competing with an Avis. Havis has 390,000 cars and Zipcar has 10,000.

It is a much more formidable threat. Yeah, and there are plenty of customers to gouge out there. They actually announce today they're doing a no-fee membership Zipcar in Vancouver, Canada area, I believe, is the test market. So that will be interesting to say. What is the normal fee in the Zipcar? It's around 50 bucks. A raw numbers for a year. It fluctuates.

For a year. And you pay per hour. You pay per hour, but includes gas, includes insurance. And people really like it, obviously. Yeah, I used it. It's super convenient. Ron, just to close out on Avis. Shares hit an all-time high this week.

Does that interest you now that Zipcar is part of the equation or you're just going to take your right off and go home? I haven't run valuation on Avis, ticker symbol, by the way. Great ticker symbol. It's a good car. symbol. I would have to look at it. It does change the model a bit, but Zipcar is a very small piece of the overall Avis business. So perhaps it's not going to change anything for years to come. So I'd have to think that through.

Shares of Sun Power Corporation up 60% this week after the company announced it sold a pair of solar power plants in Southern California. Joe Mager, who'd they sell them to? Warren Buffett! That's got to be nice. You don't normally combine solar power and Warren Buffett in the same. same story, but what happened here was a Mid-American Energy, which is owned by Bercher-Hathaway, and it's just a mega-electricity player out in Midwest and creeping out further, went in and bought these facilities. It sounds like an odd purchase, but it actually fits with Buffett's style of investing in their overall ethos. Buffett is very protective of inflation. He's very concerned

about it, and he likes owning assets and companies that will do well over time if inflation creeps up, And the nice thing about solar assets is you pay a good bit up front for them. But over time, you have a relatively fixed base of cost. And so inflation runs up. You're not really injured by that. So it sounds like an odd thing, but it's a nice fit in the Berkshire portfolio. And the sun is free, so you don't have to pay for that. When you mentioned the Berkshire portfolio, am I correct that the last two significant purchases

Berkshire Hathaway has made are a solar power company or solar power plants and Oriental trading, the Chotchky company? You know, they go together perfectly. James, when you hear about a deal like this, do you think this validates the alternative energy space for investors? Or is this just yet another example of Warren Buffett got a deal because he's Warren Buffett? Well, I think what people might be missing is solar power, and really almost all alternatives in the U.S. are still very dependent on regulation, on favorable tax credits, on government support. Without that, and that's the lifeline, without that, they're uneconomic.

And increasingly over the next, say, 20 years, we're likely going to see that. But that's a bigger risk than people recognize, I think. And finally, shares of Hormel Foods up 10% this week, the company that makes spam is buying Skippy Peanut Butter from Unilever for $700 million. Joe, we talked about this earlier in the week. As a longtime lover and consumer of Skippy peanut butter, this just kind of skeaves me out a little bit. I can't get around the fact. You don't have to eat them together, you know.

Believe me, I'm not playing. on it. But what do you make of this story just from the standpoint of, you know, investing? Well, this is just kind of a portfolio management story, really. You know, Unilever has a lot of brands on a lot of different countries. And they're starting to shed some of them. Yes, they are. And, you know, they look at their portfolio and say, does this fit with what we're good at marketing and does it fit with the distribution channels that we have? And, you know, in some cases it doesn't. They want to move on. And I think in this case, it's kind of a win for both. and, you know, Unilever has really had a great few years here after a lot of people, including me,

and kind of written them off as just being a big, lumbering giant. I'm partial to Unilever because I like Fabio, but Unilever lagged for a long time. I don't even know what I mean. I'm sorry. What is the connection? Fabio pitches, I can't believe, is not butter, which is a prime product of Unlemon. There we go. I also used their degree deodorant.

But anyhow, they are now making a lot of money from emerging markets. And in emerging markets, food fungus is a big problem. It actually gives people liver cancer because it's not... I think he meant to laugh up. No, it's true. It is actually true. And having this processed food, something like peanut butter that sort of already been pre-cleaning. Peanuts are, by the way, very, very prone to what's called an aspergillus fungus,

which can give you liver cancer if it's in enough quantity. So this sort of cleans up the food chain in a lot of these emerging markets. It's probably a smarter move than we might think. Did you know that Skippy was number two to Jeff? I would have guessed it was the other way. Although, to James's point, in China, it's the number one peanut butter brand. So I think that's probably part of what Hormel is saying.

Let's go to our man. Transit property. Transitive property. Let's go to our man behind the glass. Steve, I think the question all our listeners want to know the answer to, are you a chunky guy or are you a smooth peanut butter guy? I go for both. They're both, depending on my mood, they're usually both delightful.

Wow, really? At the same time? Yeah, well, not usually the same time. But depending on my mood, it's chunky or smooth. Ron, what about you? Smooth on a sandwich, chunky, in a strip of celery. Okay, James. I'm assuming it's organic.

I don't eat peanut butter, but if I were to eat peanut butter, I would eat smooth peanut butter, Chris. Chunky. Chunky? There's more heft, and although I saw it just, just before we started taping a recipe for a peanut butter and jelly cocktail, you might have to try out. Use smooth peanut butter for that. Yeah. It's no Nutella, by the way. Nutella is still the king of chocolate-y kind of spreads.

On that note, Ron Gross, James Early, and Joe Maker, guys. We'll see you later in the show. Up next, more on the fiscal cliff and what it means for you. you in the next few months. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. If you enjoyed the drama of the fiscal cliff, our guest this week has some good news. Morgan Housel is a columnist for the Motley Fool's flagship website, Fool.com, and he joins me in studio right now. Good to see you, my friend. Good to be here. So I guess the good news for people who actually enjoyed the drama of the fiscal cliff,

to you, we've got more coming. So the good news, and I say that with air quotes, is that we had this deal struck earlier this week to avoid the fiscal cliff that was likely going to send us back into recession if we didn't do anything about it. So we have, the worst case

scenario is off the table, which was always the most likely scenario. But we've averted that. The most likely scenario was, oh, well, we'll deal with the very worst of it. What we'll deal with the very worst of it is always known that it was going to be at the very last minute that they would strike a deal. and that's exactly what we saw this week.

Market liked it, market rallied. We've taken that off the table. But we're by no means out of the woods yet, because the deal that they struck is essentially just to kick the hard decisions down the road and not even that far down the road. Within the next three months, we're going to face two more, what they're calling mini fiscal cliffs. So in about six weeks from now,

the federal government will run out of borrowing authority. So they have a self-imposed debt ceiling, and it's really important to understand. that it's self-imposed. This is not like going bankrupt. It's a self-imposed debt ceiling that says Congress cannot borrow over a certain amount of dollars. Right now, it's $16.3 trillion. So that ceiling was breached this week. Right now, the U.S. Treasury can take some measures to sort of buy about six weeks of buying time to keep paying the government's bills. After that is over, the federal government has to raise a debt ceiling or else they will default on the debt.

The debt ceiling has been raised on average every nine months since 1945. It's usually no big It gets raised. No one even hears about it. Now that we're in this era of head-to-head bruising partisan battles, it's very difficult to get raised. So the ideal situation was that the debt ceiling would be raised as part of a larger fiscal cliff deal. Or it was not. So now we're going to be right back in the situation six weeks from now where both parties are going head-to-head trying to strike a last-minute deal. It'll probably get dragged out to the very last second. That's just going to be a whole other opportunity to show the world how reckless we can be with our finances, right? I'm reminded of earlier in the week, Governor Christie from New Jersey

was railing in a speech he gave about relief for Hurricane Sandy and placing the blame squarely on Speaker Bainer and the House Republicans. And I'm paraphrasing here, but he said something along the lines of, nobody is interested in your drama. Nobody, and that's sort of how I feel increasingly, you know, you said we're in this era of increased partisanship. And that's sort of how I feel. I think most people feel like that where it's just like, you know what, we're not interested in the drama. Just go behind closed doors, figure out what you need to figure out and get it done. Well, I think two points come to mind there. I don't want to make this too partisan, but I think there's evidence to show that the U.S. voting populace is just as polarized

as Congress is. Sure. So that's an important point. Another point is that what Warren Buffett brought up a couple weeks ago, he said, the world knows that we're crazy, but they don't think we're suicidal. So when we get to these debt ceiling showdowns and the fiscal cliff showdowns, we're going to take them out to the last second. There's going to be a bunch of name calling, a bunch of finger pointing. The odds are very small that something truly tragic is going to come out of it. It's in neither party's interest to send the economy back into recession or, God forbid, to default on the U.S. debt. So that's why I think over the last couple weeks when we had this fiscal cliff showdown, the markets were actually fairly sanguine. You had yet a few up days and

nowadays here, there. But pretty much global financial markets know that we're going to get it all sort out. We've seen over the last couple of years various factors, some of them large, like the fiscal cliffs, some of them micro, and I'm thinking about Facebook's somewhat botched IPO, things that in and of themselves and then collectively essentially shake the confidence of individual investors. When you talk about stuff like, hey, we're going to be facing a couple of more cliffs over the next few months. I worry about individual investors sitting on the sidelines some more as a result of that. What do you say to someone on that?

I think for all of these partisan political headlines, I think if you are tempted to change your investing style or to make big changes to your portfolio based off of political headlines, I think the odds are very high that you're going to do something regrettable. You should almost never want to make changes to your portfolio based on what's going on in Washington. You should want to buy good companies at good prices for the long term. And, you know, just like you said, is that people are really sort of getting sick of the bickering in the battles because it's indicative that it's, these are self-created crises that aren't really, that aren't indicative of what's going on in the real economy.

This is just the Washington soap opera that's going on. So I think investors at home really should either tune it out or, or take it for what it is, which is just the Washington soap opera. You know, there isn't a lot of evidence, actually, that investors have been fleeing the market over the past couple years. There are headlines. You can always pick out anecdotal stories of people

who have given up and have left the market. But if you really look at the broad averages and the data, they really show that most households, most individuals that were invested five or six years ago are still invested today. You're listening to Motley Fool Money, talking with Morgan Housel, columnist for the Motley Fool's website,

Fool.com. Earlier this week, we also saw indication that certainly not everyone is on the sidelines in that we had a couple of indices hitting all-time highs. Right. So the two big market indices that people watch, of course, the Dow and the S&P 500, both of those are about 5 to 10 percent below their all-time high hit in 2007. If you add in dividends, they're actually both at an all-time high, but just the trading prices are still below. But there are two major indices that did hit all-time trading highs this week. One is the Russell 2000, which is an index in index of small cap stocks, hit an all-time high on Wednesday, about 15% higher, actually, than it was in 2007. It's been on an all-time high for a while now.

The other is the S&P 500 equal-weight index, and what that is, is the traditional S&P 500 that people follow, it holds the 500 components based on market cap. So the bigger companies that holds more of, smaller companies that hold less of, the equal weight index holds all 500 in equal amounts. That index is actually at an all. all-time high now too. And I think this is really important that a lot of investors overlook. The S&P 500 being skewed by market cap weights it towards sometimes some of the markets' most expensive stocks. So for the past decade, some of the biggest holdings have been companies like Microsoft and Walmart that have had very poor returns over the past decade because they're so

overvalued because they were so overvalued in 2000. Just those few companies drags down the performance of the entire index. Whereas if you look at the equal weight index and it's at an all-time high, that is more indicative of what the average stock has done over the same. the past 12 years. That being at an all-time high, I think when you look at it in that sense, the individual stock has performed much better than the broad average has over the last 12 years. Another thing that came out this week was the auto sales for December. We talked about this earlier in the show, but 2012 turned out to be the best year for auto sales since 2007. You're someone who looks at trends. What do you think when you look at auto sales in North America?

So auto sales in 2013 will likely approach about 15 million in the United States, which is getting very close to where they were Just prior to the recession when the economy peaked around 2006-2007 and what's interesting about that is that Unemployment is still high right now, right? So unemployment is 7 and a half percent. It was 5 percent before the recession Yet auto sales are pretty much back to where they were So two weeks ago, I interviewed a value investor named Monish Prairie who brought up this point about Why is it? Why are auto sales at an all-time high, even though unemployment is still so high? And the reason is that the average age of a vehicle on the road right now is about 12 years, which is at an all-time high. So normally the average age of a vehicle on a road would be maybe 9 to 10 years, now it's 12.

So because of the recession, because people's jobs prospects have been poor, because the value of the house has declined so much, they've been getting more mileage out of their old cars than they ever have before. They've been driving their beaters as long as they possibly can. And they're really reaching a point now where they can't drive their cars anymore. They're aging, they're falling apart. They really must buy new cars right now. So what it really is is a good lesson, a good example of how sometimes these trends like auto sales or home sales as another can become totally detached from the broader economic picture, which is high employment in a weak economy right now.

You can have these sectors that perform significantly better than the overall total. When you look over the next six to 12 months when auto sales come, in on a monthly basis. Do you also expect to see truck sales, and a lot of people break out truck sales as an indication of business spending and how businesses, and in particular housing is doing? Do you expect to see that trend continue? Because a lot of people, myself included, expect that 2013 is going to be an even further bounce for the housing rebound. Do you expect to see that reflected in truck sales? So housing is similar to autos in the sense that even though unemployment is still high, the rate of housing construction was so far below the rate of new household formation for so many years,

that household, that new home construction is very likely going to rise significantly over the next two years, even with high unemployment, because it was depressed for so long. People just need to buy homes, right? And so, yes, I think truck sales will follow that. Truck sales are highly tied to the rate of household construction. So, yeah, I absolutely do expect that. We were talking during the break. Like me, you're someone who is kind of cheap when it comes to cars. Like, you know, cars are fine, but you and I don't really spend a lot on cars. But what I didn't realize about you, you were a valet at one point.

I was all throughout college. I valet at hotels in Lake Tahoe, California, and also Newport Beach, California. What's the sweetest ride you had to park? I've driven almost every kind of car that there is, especially in Newport Beach. It's a wealthy area. A lot of nice cars coming through. The Rolls-Royce Phantom is about as good as it gets for fancy cars. We also had a guy who came in...

Please tell me you took incredibly good care of the Rolls-Royce Phantom. Wink, wink, of course I did. We also had a guy come in in a 1920 Packard. Really? That was a pretty impressive car. You also indicated during the break that you would actually sort of put the pedal to the metal when you were parking these things. So there's a saying that if slaughterhouses had glass doors, everyone would be vegetative. Yeah.

It's also a saying we've extended that to that if valet garages had had windows on it, and no one would valet their car anymore. And that's all I want to say about that topic. So I should never give my car to a valet again? If you care about your car, I think that would be a wise decision. Learn something every time I talk to you. You can read more from Morgan Housels. Go to fool.com.

Morgan, thanks for being here. Thanks for having me. Hey, we're here every week, but if you want market commentary, Harry, throughout the week, check out Market Foolery. It's our daily podcast. You can get it online at Market Foolery.com and on iTunes. Check out Market Foolery. But coming up, we're going to give you a look at the stocks on our radar. This is 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. I'm Chris L. joining me in studio once again, Joe Mager, James. early and Ron Gross. Guys, before we get to the stocks on our radio, kind of give a shout out. We have a few guests on the other side of the glass with our man, Steve Broido, today. Michael Cash, Robert Juarez, and Liz Urchall from the Ross School of Business at the University

of Michigan. And they came bearing tribute. We got mugs from the Raw School of Business. We've got beer glasses. And for James, we've got the, I'm sure it's the biodegradable. BPA-free, too. Yeah.

Thank you, guys. Very nice of you. Thank you. That's wonderful. And a great, two takeaways I think I have there. One, it's a wonderful reminder for me that when I was in school, I never did anything like this. I was just such a slacker. And the other takeaway is for any college students out there listening, you're more than we would love to have you come by. But, you know, the... Don't come up to hand. We just send us. The folks at the Ross School of Business at the University of Michigan, they kind of set the precedent. So don't be afraid to bring a little tribute. Let's bring in our man, Steve Brood, from the other side of the glass for Stock Center on our radar. And Steve will have a question for you. And we'll kick off the new year. You can just fire one back at him. Ron Gross, you were up first. William Sonoma, Steve, WSM retailer of course William Sonoma, pottery barn, West Elm catalogs,

really strong retailer, great balance sheet, very profitable. They're moving into online in a very big way, which is the play here. So we've got to be careful. It's not an uncompetitive business, but I think it looks interesting. Steve, question about William Sonoma? What's the last thing you purchased from a William Sonoma company? Well, Steve, it's interesting you should ask me that. I actually purchased a cookbook, but it was as a gift for someone.

Online or in the store? I was in the store. And question for Steve? Steve, do you have a New Year's resolution? I don't. I totally slit my mind this year. I don't have one. Drop us an email, Radio at Fool.com, if you have a new year's resolution for Steve.

But do you have one run? It's the same one every year. Just a little more healthy this year. This is the year of health. It doesn't sound inspired as you say that. Maybe that's the same one every year. Exactly. You also say that with a beer glass in front of you.

It's an empty beer glass. And not because I finish the beer. That's true. James Early, what's your stock this week? I am going with a frisky little company called Giant Interactive. The ticker is GA. Giant is a Chinese massively multiplayer online video game company. They make these video games that hundreds of thousands of people can play.

About a 5% yield. up 25% for us at income investor, my newsletter already, but I foresee another 40% to go. This is a fairly small company, but the CEO and his daughter own 55%. CEO is a famous Chinese billionaire, entrepreneur, so he's a pretty credible guy, too. Fungus free? Fungus free to boot. Before we get to Steve, you used the word frisky. When you describe a stock as being frisky, what is, can you translate that for me? What constitutes frisky? It can be what you wanted to be, Chris, but I would say it's just a lively little stock. It's an interesting business. Does that mean volatile? It's going to be, it's going to move around more. Yeah, it's down. It's up. It's down. It's going to, it's

going to move. But long-term out. Some people call that volatile. Chinese in general, stocks in general can have some issues. Frisky, yeah. Yeah. Steve, question about the frisky giant interactive? Yes, I believe you've mentioned the stock before and that it's based in the Bahamas. Cayman Islands. Cayman Islands. How can it be a Chinese company if it's in the Cayman Islands? It operates in China, so it's effectively de facto of a Chinese company, but but it's a holding, the parent holding company for some tax reason and various regulations is in the Cayman Islands. And that's actually a fairly common structure. It seems sketchy, James. It just sounds sketchy to me.

I was just going to say, to Steve's point, we've talked, in all seriousness, we've talked about companies in China and different accounting standards and that kind of thing. When you combine that with the Cayman Islands, that just, to me, that just screams red flag. Nothing ventured, nothing gained, Steve. Question for Steve? Steve, some people have video game addictions. They stay in these cyber cafes, and China is actually trying to crack down on that among youth, at least. If you were to develop an addiction, what type of addiction do you foresee yourself being vulnerable to? No, of any type of addiction.

If I were to, if I wanted an addiction. Hypothetically. It would probably be to just healthy food and drinking water and going to bed early and doing all healthy things. I think that's the things we should try to be addicted to. Do you really want that addiction now? Of course not. What a miserable way to live. But, you know, when in Rome.

Joe Mager, stock on your radar this week? I'm bringing GM back here. So GM has had a particularly good 2012. I think 2013 is going to be even better. They have a big lineup of cars coming out, including their Chevy Silverado, which is one of their biggest, most profitable vehicles. Combined that with a nice timing of the economy bouncing back, consumers looking for new cars.

The government's looking to unload their stake, and GM could pay cash for the 19% of the company the government owns. I think that'd be huge. And the stock is selling for about 7. and a half times 2013 earnings estimates, a pretty low hurdle. So put it all together. It's still a little bit hairy, but not as hairy as it was a year or two ago, or when it was bankrupt. Is it frisky? I don't know if I'd say it's frisky. I'm not going to say that. Before I bring in, Steve, I'm going to give you the chance to take a small victory lap because

a stock that has been on your radar before. eBay? Goldman Sachs hit a 52-week high. Well, they're both at 52-week high. Now I'm regretting giving you the chance for a victory lap. Steve, a question for Joe about GM? Sure. What do you think of the incredibly dramatic car commercials that have been rolling out recently? There's been a new rash with Lincoln. There was some around the Chrysler. I think it was the 300 or the 200. They were just really over the top and dramatic with Detroit and we're back and all that sort of stuff. What's your take? Well, I think what they're trying to do is reconnect with people who are Americans who are bitter about the bailouts and have lost confidence in American-made cars. And I think to some extent they've made some traction there.

I think you're probably going to see a lot more dramatic, tear-jurker kind of commercials. And these are brands, too, that you're trying to reconnect with youth, you know, because some of the brands are pretty tired. So you're trying to reinvigorate a Chevy, for example. You sound like you're a little bitter about some of those commercials. Oh, not bitter. I just watch them, and I'm not that inspired, really. Question for Steve?

Yeah, so my wife and I are taking a big trip to Barcelona next year, or I guess this year. Any clubs or bars there in particular you'd recommend? I've never been to Barcelona, and I've never been to Spain, so I have very little to offer you. Go to the place with the cheapest drink prices and someone outside the restaurant advertising loudly. Really? That usually ends well. That's your go-to move? Absolutely.

It would be frisky. We just have a couple seconds left. Ron, you were saying during the break, your lease is up. I need a new car in 2013. I feel like... How about a Silverado, guys? I don't know about it. Very practical.

Think about it. Next time you've got to move something from William Sonoma? You have a try. I feel like, Ron, you and I need some help. So I'm going to make a call out to our listeners. Please email us. Radio at Fool.com. We're looking for car recommendations for 2013.

And I place a premium on just cars I don't have to deal with. Does your car have to fit a family of four? Family five. Family five. And I have a family of four. Okay. And you have like a machismo quotient, right? You like something.

Safety. Safety. You get a minute. Okay. Ron Gross, James Shirley, Joe Maker. guys, thanks for being here. Thank you, Chris. That is it for this edition of Motley Full Money.

Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.