Motley Fool Money - Motley Fool Money: 01.07.2011

Episode Date: January 7, 2011

Is Facebook really worth $50 billion? Is GM on the road to recovery? Is Microsoft Kinect the future of television? And does the Starbucks CEO know the difference between a mermaid and a siren? On this week’s Motley Fool Money, we answer those questions and talk with Consumer Electronics Association Chief Economist Shawn DuBravac about some hot tech products at the Consumer Electronics Show in Las Vegas. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Thanks for being here. I'm your host, Chris Hill. I'm joined by Motley Fool Senior Analyst, Seth Jason, James Early, and Ron Gross. Guys, good to see you. Good to see you, Chris. On today's show, we'll ask the big questions. Why did Starbucks change their logo? Is Facebook really worth $50 billion?

And what new gadgets are being unveiled at the Consumer Electronics Show in Las Vegas? Plus, as always, a look at the stocks on our radar. But we begin with the big macro. On Friday, the government reported that the unemployment rate dropped to 9.4%. That's a 19-month low. And the economy added 103,000 jobs in December. Ron Gross, I'll start with you. Which of those two numbers is more significant?

Well, they're both important and they're both important. mixed bag. So on the one hand we added a hundred thousand jobs. That's a good thing. But on the other hand, it's lower than expected. Economists were hoping for a bigger number. Certainly, in light of the ADP number that we got earlier in the week. Second mixed bag is the unemployment rate fell, but it was largely a result of the fact that our labor force shrunk. More people are getting discouraged. They're stopping, looking for work, and that shrinks the labor force that makes the unemployment rate go down, that's not a good thing. I have to punch Ron right in his mixed bag.

The number of the week is that the number of discouraged workers, the people who gave up looking for jobs, is 389,000 up that much from last year, which is a 30% increase. That is a huge number. And if you paid attention, that's, you know, that's like almost four times the number of jobs that were created months to month.

That's pretty bad. I was hopeful after the ADP report. Didn't that what I said? Didn't I say that was bad? Yeah, it's not, you sort of said it was worse, Ron. No, I'm just feeling like. It's actually we have 1.3 million workers that are now so discouraged. But that is 400,000 worse. I mean, that's 30% worse than it was last year. That's pretty horrible news. Yeah, James. It's just unemployment stuff. It's kind of like a sex survey. It's surprisingly hard to get an honest answer, it seems like. I think we should actually

start our own survey and just wait for these other two to come out and just pick the midpoint. We'll probably be more accurate. And also the two statistics you mentioned, Chris, they come at it from different angles. The payroll number is actually a survey of employers, while the unemployment number is a household survey. So you're kind of looking at the economy from the two different angles. So pick the one you like best and go with that. Agreed. Busy week for Facebook.

On Monday, news broke that Goldman Sachs had engineered a $500 million investment in Facebook, putting the company's valuation at $50 billion. By the end of the week, Goldman's private memo to its investors had been leaked to the media. Some of the details about Facebook's finances. First nine months of 2010, 1.2 billion in revenue, 355 million in net income. James Early, what do you think of those numbers?

You know, Chris, it's only once a week or so that I eat humble pie on this radio show, and that's probably because the show airs once a week. I had no idea that Facebook had made nearly half a million dollars last year if you annualized that. And sure, Goldman is trying to get in, get their fees and get out, and that's what Goldman does. But the real question to me is,

What does Facebook look like in 10 years? Well, we look like idiots for being so skeptical now. Yeah, we made fun of it on a podcast earlier this week, but we didn't have these numbers, and now we kind of are going, oh, well, well, maybe. I looked into this as best I could. Facebook doesn't give out very many numbers. They're not big on privacy. Yeah, they're big on their own privacy.

They're big on their own privacy. But if what I can tell by trolling Wikipedia and following up on the links that Wikipedia provides on some of their click-through rates, at least as of a couple of years ago, Facebook's advertising business was much, much less efficient than Google's generating far, far fewer clicks per ads served. But if they're making that much money, and it's nearly half a billion, I think James said million, it's nearly half a billion. Either that is improved or there's just a lot more activity on Facebook than we've guessed. I mean, I don't think anybody in this room has ever clicked an ad on Facebook. No, not on Facebook. Brom Gross. What did you make?

of the numbers so yeah earlier in the week i probably i think i said uh publicly that i wouldn't touch touch this deal um at a 50 billion dollar value but after seeing some of these numbers i'm kind of eating some pie with james yeah to lay off my mixed bag um so this is interesting at a billion dollars uh which i've seen some analysts say uh earnings could grow um in next year it's it perhaps isn't as pricey as we originally thought no again 50 times 50 times it's still pricey but how long and how long can it do it do you double earnings. And I have a value investor, but it is more interesting to me today than it was a few days ago. You're a value investor. You're also a former hedge fund manager. If you were managing a hedge fund,

would you want in on this deal in the way that Goldman's investors did? That's a toughie. That's a toughy. I know this stock is going higher. The hedge fund manager, we know the stock is going higher, but I don't like to invest based on that. I like to look at companies and business models and fundamentals. I would probably take a little nibble at it, but not put my neck This is going to be a greater Fool's game, which is you buy it high and try to sell it higher to the next idiot down the line. And unless something drastically changes among people like us who just won't shut up about this company and frankly the reason it's worth this, everybody who's in on this IPO is going to make money hand over a fist dumping shares onto the bagholders who come in late. And you say that as if it's a bad thing.

It would be good to be in early. You're listening to Motley Fool Money. We're talking through some of the big stories of the week. Guys, out in Las Vegas, the Consumer Electronics Show, the largest trade show in the world is underway. Microsoft CEO Steve Bomber gave the opening keynote address and highlighted the company's sale of over 8 million connects in the first two months.

Seth, Jason, that's some pretty impressive sales for a game system. One of them's at my house. My wife bought me one for Christmas. We're putting an addition onto our living room so that I have enough space to use it. It's actually... And is that why you're doing the addition? I don't play with 9.4%

you're putting an addition on your living room? To do is connect. Yeah, just for the Connect that we're actually not putting an addition on, but we have moved the furniture, which they advise you to do. You need a little bit of space. It's actually a really fun toy, and it does some pretty amazing things, which is, you know, it can recognize you and log you in. And the big news in the keynote was that they had Balmer's avatar up there,

his Xbox 360 avatar, and these are, you know, generally all of them. We look a lot more muscular. I was going to say, his avatar looked great. Yeah, his avatar looked a lot better than that. than Steve Bomber has in real life, and it was, like, thinner and more physically fit. They were hyping this thing called, what was it called, Avatar Connect, where you'll be able to sit in a chat room with your friends. And the Connect device at that point, they're hoping will track your facial movements and your arm movements

so that it'll be like you're sitting in a room talking to people. You know, big deal. I don't think that's... I can sit in a room and talk to people now. Yeah, exactly. But across the country. You can already, with Xbox already, you can already sort of watch movies together on Netflix and this kind of mystery science theater thing where you're chatting with your friends.

friends. So actually, Microsoft is looking at taking over the living room, we're getting as big a piece of it as they can, and they're doing a very good job of it with some of these products. And remember, for folks who, you know, like to make fun of things like Windows phone and all these other things, when the Xbox first came out, everybody discounted it as just Microsoft making a subpar product, and they kept at it, and they made one of the better products in the space and it's paying off. So if you're stinky, you can have your avatar just go take a virtual shower? I'm hoping. The Xbox, the phone just got cut and paste technology we're discussing, right? Is that accurate? That's true. One of the things Microsoft did announce is...

Now they're cooking with gas. Yeah, yeah. Hey, it took Apple. It took your precious Apple three years to figure out how to do it. Guys, out of the Consumer Electronics Show, it's not just tablets and smartphones. There are a lot of products being unveiled. Panasonic unveiled the largest TV in the world. They do that every year, don't they? Somebody does. A 152-inch plasma screen TV. Anyone want to guess the price tag? Ron?

45,000. 45,000? 150,000. Next year you can get it at Costco for 800. Steve, what do you think? 152-inch plasma screen, largest TV in the world. What's the price tag?

100K. $500,000. Oh, come on. Well, they're always proof of concept things. Seth, you'll take two for you and do living on a addition for that one. I want to know what it weighs. It must weigh like five, ten, ten. mother-in-laws.

Not good for the ceiling. Love you, mom. Drop those emails to Radio at Fool.com. Also on display out at C-E-S. I-Grill a wireless cooking thermometer for your iPad or iPod. It uses Bluetooth to watch the temperature of the meat you're cooking

available for only $99. I want stock in the I-Grill company, is what I want. And had to include this one something called Wii, me. It's spelled W-H-E-E-E-Me. We me. It's a massage robot, kind of like a Roomba for your back. Now you're talking.

$70 available this summer. Anyone so weird? I already have one of those things. You sit on it and it's rollers for your back? No, this is like a little, it's like a little car robot that you lie down and it just rolls around your back and massages you. What do you think? Steve, you want all my wife to catch me with it. That's for sure.

70 bucks? It's under the sheets. It's delightful. Sign me up as well. All right. Coming up, auto sales, e-book sales, and surprising news from the world of retail. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. For investing commentary and analysis, 24-7, go to the Motley Fool's website, Fool.com. Chris Hill here in the studio with Seth Jason, James Early, and Ron Gross, as we go through some of the headlines of the week. Qualcomm, the wireless tech company, bought Chipmaker Atheriope.

communications for more than $3 billion. Seth, Jason, you recommended shares of Atheros two years ago. How happy are you? Yeah, we made our investors. Anybody who followed us on Atheros made a bunch of money, I think. Our last buy, I think, was a 75% gain over three months. More than doubled us over a couple years ago. It is a company that I was confident, and for a lot of reasons,

it was a low-cost producer of some very nice wireless networking chips, as well as just the same old Ethernet chips that you get in your desktop computers. And the reason that Qualcomm was interested in them is that they're in a lot of the same places already, especially in the mobile market. Qualcomm, of course, is a maker of cell phone chipsets. Atheros is making chipsets that connect everything,

including small gaming devices, Kindle-type devices, and cell phones. So, I mean, I'm holding a Samsung focus in my hand. I don't know whose chips are in this, but it very easily could be a Qualcomm chip and an Atheros chip. Qualcomm now is sort of a one-stop shop. I think they paid too little.

Sure, it's nice to get the upfront payoff, but I think in a few years this Atheros would have been worth twice as much money. Sometimes you have to take what you get. So if you're a Qualcomm shareholder, you're having... I'm going to look at Qualcomm because I think they're going to do very well with this acquisition, depending on what the company is selling for right now, that may consider going that direction. The U.S. auto sales rose to the highest rate in 16 months in December,

capping a year of gradual recovery for the industry. General Motors and Ford both said sales rose by around 7%. James Early, you're our resident gearhead. What did you make in the numbers? Chris, I was going to say that you know the end times must be nigh when GM sells more and Toyota sells less, but actually if you look under the hood here, you get that? Oh, that's right. Thanks for spelling that one out for us.

Too many factors that dull the shine. I was skeptical even a few days ago, but GM is legitimately selling lots of this Chevy Equinox, which is a crossover vehicle. It's kind of an effeminate-looking SUV that is exactly what the market wants right now. And they've learned that if you can't what the market was. Hey, they're effeminate. They've also learned that if you can't make Americans buy your cars,

you can try the Chinese. And China has now eclipsed the U.S. is GM's largest market. So good for GM. Good for, you know, I'm really glad that as taxpayers, we've supported the ability of GM to sell cheap cars to the Chinese. That makes me proud. Yeah, I was going to say, GM, for shareholders, they're probably pretty happy

because isn't GM in one of those deals where they're not paying taxes for, I don't know, the next 48 years? Something like that. Yeah, it's pretty sad. Our Inside Value Service likes GM quite a bit and thinks good days are ahead. Did they go that direction?

Crazy. This week, USA Today's best-selling books list showed that the e-book version of the top six books on the list outsold the print version. Seth, Jason, I know you've got a Kindle. Did this surprise you at all? Actually, it did surprise me,

although I would like to see the results a couple months from now when we're in these sort of post-holiday. We're not directly in the post-holiday afterglow. Obviously, if you get one of these for Christmas, you're going to go out and fill it up with books right away and probably the best sellers. I think that eventually this is the way things go for good

that e-books will outsell print books simply because it's a heck of a lot more convenient to buy the e-book versions and with the Kindle by all possible. measures still runaway success. The Nook doing a lot better than we thought it would. We made fun of it. And Apple's iPad, even selling a book or two, I think this is just the way things are going to go. In our defense, the Nook is a name that's just kind of begging to be made fun of. And I think eventually the Nook does sort of disappear.

The largest companies in the S&P 500 are sitting on a record $900 billion in cash, up 10% from a year ago. And two-thirds of the companies in the S&P 500 expect to pay out more in dividends, this year than they did last year, all according to USA Today. James Early, you're a dividend guy. You must be tap dancing about this. You know, there's some good news here, definitely. There's one thing CEOs love to do, Chris, it's spend cash. Studies have shown that they tend to squander money.

That's why dividend policy is good because it forces discipline. So I've got to applaud either the restraint or the posity of spending opportunities. Either way, more cash is good. And depending on what employment numbers use, they might actually start hiring again, too, be the ultimate vote of confidence. Yeah, I was going to say, at some point, I mean, it's $900 billion in cash. Isn't anyone feeling confident enough to do some hiring? Well, last year, I don't know about hiring, actually, but last year, according to some

stories I read, almost $900 billion was spent on acquisitions. So this year, I would expect we're going to see something similar because a lot of companies cut costs, and they're sitting on this cash, and I think they're leery of hiring, and so I think they're going to try to buy growth from companies. buying companies there are selling stuff rather than kind of trying to invest in capacity when we might already have overcapacity and then hire people to staff. Ron? Yeah, I would agree with that.

I think M&A mergers and acquisition activity picks up significantly. And it's not just companies that hold cash. There's a lot of cash on the sidelines of private equity buyers. So I think we start to see a lot of financial buyers as well as strategic buyers come into the market and we see that M&A activity really ramp. Yeah. And so what does that mean for you sitting out there as a worker or an investor? just remember that in times like this where things are still kind of sketchy, it's easier for companies to buy each other,

fire a few people, and increase profits that way than it is possibly to go out and drum up new business. So be on the lookout for companies that are decent acquisition targets. But as an investor, if a company comes out and announces, you know, in the next six months, we expect to hire X more people. Does that make you nervous? Actually, that would make me more likely. to buy the company these days because I think you would have to be nuts

to do that. To say you were going to do it unless you had good reason. And finally, a tale of two retailers. B.J.'s Wholesale Club announced its closing five stores, while Dollar General announced a company expects to open 625 stores this year.

Ron Gross. What did you think of that? So two different stories here. Two very different stories. BJ is a great company, similar to Costco or Sam's Club, great business model, much smaller than those companies, has a stronghold in the Metro Northeast. And they're closing five underperforming stores. They've been under heat from an investor, Leonard Green, to put themselves up for sale. So it looks to me like they're really putting forward a reorganization of the business to make the business as profitable as they

can to kind of put that investor at bay and grow the company and maximize shareholder value. On the other hand, Dollar General is really firing on all cylinders, and they're going to be opening 625 new stores, and they need those 6,000 new employees to support those stores. Am I the only one who's blown away by that number? I'm stunned that anyone is opening 625 stores. Well, have you been to a Dollar General store? Very small, located in rural areas. Often some of them kind of hard-pressed. And when I was in Missouri, I can remember if they had Dollar Generals, but they had family dollar in a lot of these competing stores. They're all very similar. So, you know, property or buying or renting property in these areas is cheap. They run, you know, very few stock units.

And so, you know, 600 of these isn't the same as 600 BJ's wholesale clubs. And remember, they have over 9,000 stores across 35 states. There still is room, obviously, for more. It's not just 600 and done. They're going to be doing these for years to come, increasing the store base. James? You know, and I actually see Dollar General is somewhat evil, and this is funny but serious the same.

time. And a lot of these rural towns, this is the only store going, or one of the only ones. This is where people end up buying a lot of their food, and they don't have healthy stuff. These have Doritos, soda, you know, the canned soup, the salty, greasy stuff. And so with every new store, our nation's obesity index probably ticks up just a little bit. You hate America. Why do you hate freedom? As a Coca-Cola shareholder, I'm outraged that you would say anything negative about soda. And as somebody who likes PepsiCo, lay off the Doritos, will you? Coming up, we'll head to Las Vegas for an on-the-ground report from the Consumer

electronic show. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. This week, 120,000 people have descended upon Las Vegas for the International Consumer Electronic Show, the largest consumer technology trade show in the world. Sean Dubrovac is a chief economist and director of research for the Consumer Electronics Association, and he joins me now. Sean, welcome. Thanks, Chris. It was a year ago, this month that Apple unveiled the iPad. It was a huge success. You could even say the 2010, to the extent that it was the year of any gadget, it was the year of the iPad. So far, are you seeing any strong candidates for the gadget of 2011? Major theme, we've seen a ton of tablets

during the week. We expect to see more as we move into 2011. Everybody wants to be active in that space. Internet-connected TVs are also a hot category as companies reevaluate how they want to distribute content into the home. And then, of course, looking at our next mobile broadband experience, looking at 4G connectivity is a major theme as well. A year from now, if we're talking about a technology or a product that got a lot of hype but just never caught on, What do you think we're talking about? Is it 3D TV? I'd say certainly 3D TV has had a slow liftoff,

but the one thing to remember about technology, and it's a very important feature of technology adoption, is that it always follows an S-Shay, whether we're talking about consumer tech or tech on the enterprise side. Things always start off very slow, and then they ramp up very quickly. Now that S-Sh is being compressed, so things are ramping up more quickly,

but it still follows that as you can to be slow in the early years. That's where we are today with 3D. That's where we are with some other technologies. I was going to say that, you know, that whole notion of adoption speed, it seems like compared to other industries that consumer tech companies almost don't have the luxury of being able to grow slowly. I mean, do you think that's true? Do you think there's more pressure on tech companies to just not only be a success, but be a success more quickly than, say, you know, something in the consumer staples industry or the food industry.

The fact that the industry is so fluid. If you look at design cycles in the automotive space, you're looking at five to six years. If you look at it in the consumer tech space, you're looking at nine months. Mobile phone manufacturers, from the time they come up with the idea for the phone until the time they have it on the shelf, they want that to be nine months. So it's significantly shorter than other devices. design cycles. And as a result, what you're seeing is technology influencing all of these other industries. These other industries are trying to figure out how to cope with these very short

design cycles and technologies. So you see it happening in the automobiles where they're trying to integrate tech in a very fluid manner. You see it happening in other industries, airlines and other industries, where the design cycles are much longer than what you see in consumer tech. You're listening to Motley Fool Money. We're talking with Sean Dubrovac from the Consumer Electronics Association. Sean, let me flip around a question I had asked you earlier because I had asked you about something that has the potential of being overhyped. Let's flip that around. You're at the Consumer Electronics Show in Las Vegas. What's a technology or a product that's really flying under the radar that's not getting a lot of attention that you think could really catch on?

So one of the big stories that I think is not being amplified to the degree that it will be impactful is the way we're seeing sensors integrated into technology. I've referred to this as the sensorization of consumer tech. And if you think about today's mobile phone, it has a plethora of sensors. It's got at least one camera, if not two. It's got a touchscreen. It has other sensors in there. there, accelerometers, gyroscopes, that are allowing third-party developers,

third-party software developers to come in and add new meaning to that device. So they can take advantage of the hardware and change it. Look at Microsoft's Connect, which has a variety of sensors, four microphones, three cameras, and accelerometer, and then a little bit of software that allows consumers to get involved in video game play like never before. You're seeing that change as well. Microsoft announced that, yes, they're going to try to do more with the Connect.

They also announced that they sold $8 million in 60 days, the fastest launching product in the history of consumer tech. You mentioned Microsoft CEO Steve Balmer in his speech also really played up the whole notion of the avatar and had his own sort of Steve Balmer avatar up on the screen, sort of mimicking his movements. I'll be honest, as a Microsoft shareholder, that frightens me a little bit. Just the whole notion that, I don't know, are we all going to be walking around with our avatar shadowing us?

That just seems like too much to me. And where computing is gone. I think the thing to remember is the use case scenarios and the way these things will actually play out in reality are probably several years away. So we're still defining exactly how we'll use something like an avatar. The key is that it's gotten good enough that they can recognize facial expressions. They can recognize the raise of an eyebrow or a smile or a grimace and then respond accordingly. So these sensors capturing data, capturing information, creating data sources that consumers can then leverage, we can start to get these computers to do things on our behalf.

And I think you'll start to see that intelligence of things really ramp up or the next defined by cheap sensors. And we've seen those cheap sensors integrated into devices. The next step is to use that information for things on our behalf. Be honest, Sean. We're like five years away from the Matrix happening, aren't we? Like the machines are coming after us soon, aren't they? That's right. Maybe six. You're listening to Motley Fool Money.

We're talking with Sean Dubrovich, Chief Economist for the Consumer Electronics Association. All right, Sean, before we let you get out of here, we're going to wrap up with a round of buy-seller hold. This is something we were just talking about. It got some great early reviews and obviously some great sales. Buy-seller-hold, Microsoft Connect. It's that good. Yeah, definitely. It's going to revolutionize how we interact with devices.

We've seen gesture-based control ramp up over the last few years. We've seen it start first in the video game arena with the Wii, the PlayStation 3, And now the Microsoft Connect is to start to integrate that into other solutions, into other computing devices. All right, the launch of this product was recently delayed by the parent company, buy-seller hold, Google TV. Sell anything that Google comes out because we know that they'll continue to push forward. It's probably a short-term sell, but a long-term buy because the future of internet-connected TVs and internet-connected content is discovered. And that's what Google does very well. They understand that there's a lot of information out there that's dispersed,

and that by aggregating that information, making it easy to search, you can create a business from. We are inundated with content, something like 24 hours of content are uploaded to YouTube every single hour. Granted, a lot of that is in content we want to necessarily watch, which content is being uploaded to the web and made available to consumers. At some point, we need help. in parsing that information, finding what we actually want, getting recommendations.

And so a long-term buy on technologies that help us search and discover new content. And finally, it's the home of the Consumer Electronics Show. It's a great place for Bachelor and Bachelorette parties. Buy seller hold Las Vegas as a family vacation spot. A vacation spot, but by Vegas, you know, I would argue that Vegas is starting to come back, and I think that's a good sign for the national economy. Of course, one of the hardest hit cities in the country, yet real estate down 60% across the board.

I've come twice a year at least to Vegas, and I remember seeing some of the properties look like ghost towns. Literally the city center three years ago looked like it had been abandoned. And today I'm staying at one of the new properties at the city center. So you've seen things start to come back. You've seen things start to improve in Vegas. I think that's a good sign for the overall. economy. Sean Dubrovac is the chief economist and director of research for the Consumer

Electronics Association. Sean, thanks for being here. Have fun in Vegas. Thanks, Chris. Coming up, a look at Starbucks' new logo and a look at the stocks that are on our radar. This is Motley's full money. As always, people on the program may have interest in the stocks they talk about. Don't buy ourselves stocks based solely on what you hear. I'm Chris Hill and back in the studio with me, our trio of senior analysts, Seth Jason, James Early, and Ron Gross. It's time to welcome a few new stations to the Motley Fool affiliate family. Out in California, Sacramento's New Money, 105 FM, and in my beloved home state of Maine in Bangor, we are now on the Pulse, 103.1 FM and 620 AM. And the great thing about those two stations in Maine, they are owned by the person who is probably Maine's most famous resident, Mr. Stephen King.

Awesome. Awesome. So Motley Fool. We need to talk scary. Hi, Maine. We now have an official relationship with Stephen King. Hey, do I get a hotel discount or anything in Maine? Because I'm thinking going up there.

Do we have any kind of deals like that? What do you think? Stephen King's got a... You want to stay in a Stephen King Hotel? Have you seen the shining? That's a great idea. All right, one story we did not get to earlier that made a lot of headlines this week was Starbucks.

The world's biggest coffee chain has really ticked off some loyal customers. Starbucks unveiled a new green logo that no. no longer includes the words, Starbucks coffee. It's just a mermaid. James Early, I'll start with you. You've seen the new logo. What did you think? Chris, when you give up the words, you become just a concept, just an image.

And it works for Nike, which has a very simple image. It might work for Apple. I don't know that it works for this Starbucks image, which is, did it? No, he's back being friends. It was not even simple. I don't know what the heck that thing was. So, yeah, I'm confused. I'm not angered by it.

I'm not a Starbucks customer in the first place, but hey. Ron, what did you think? Well, I think to be angry about it is you have a little too much time on your hands. I think if you noticed it, you have too much time on your hands. But I agree with James. They're looking towards international expansion. That's what's going to be big going forward. They're looking to turn themselves into a concept and image.

The Nike swoosh is the perfect example, as James said. You know, what Wikipedia calls the siren a dangerous bird woman seductress. So how can you do better than that? We'll get to the siren part in just a minute here. Did that ever make any sense anyway? Starbucks is named after the guy in Moby Dick. And how seductive was a bird woman? And so why was there a mermaid in Moby Dick?

All right. I read Moby Dick. Do you remember, was there a mermaid in Moby Dick? I don't think there was. I remember a whale that killed everyone. So I think for the average person, you look at the logo and you say, well, what is that? Most people would say, well, that's a mermaid. And yet there's a video on Starbucks website where Howard Schultz is there introducing the new

logo, it's about 90 seconds, and he keeps referring to it as a siren. A siren is something that calls men to their deaths. Yeah, from Homer's Odyssey. Nothing speaks to coffee and a muffin like seductive death. But the issue is, if he does not even know his own logo, what else might he not know? You're saying? Well, if it's actually a mermaid, it's clearly a mermaid. You look at it's a mermaid.

It's got a tail. I don't know that I don't think sirens have tails. To mermaids as sirens, but it seems pretty clear to me he's in the wrong, right? You know what? I'll look into the symbology to use it. I will look into the iconography as the art historian here. I will look into the iconography of the siren and the mermaid and get back to everybody next week. All right. In the meantime, we want you to email us.

Radio at Fool.com. Check out the new logo. Tell us what you think. Mermaid, siren, or just what you think of it in general. I want to go back to something Ron said earlier where you were talking about the anger that people have. We saw this last year with the Gap. Gap changed their logo, and people were outraged, and Gap was so spooked by it that they changed back to their original sort of classic blue and white Gap logo. People, specifically Americans, love their brands. Don't mess with them. As a Starbucks shareholder, I have to hit this one point of fear, which is in that video I mentioned, Howard Schultz says that changing the logo, and I'm quoting directly here, gives us the freedom and flexibility to,

think beyond coffee. And frankly, that just scares the hell out of me. Yeah, because they did it before with their dumb furniture and magazine or whatever. Yeah, they had in the late 90s. They don't do well when they think beyond coffee. Yeah, with Joe magazine, and they came out and said, we're going to be a portal,

Starbucks.com, and we're going to sell luxury furniture, and the stock dropped about 30% in one day. Howard needs to quit, like, sniffing himself and enjoying it. He's the one who started all, remember, here at the Motley Fool, one of the one of the CEOs who replaced him came in and he was executing, he was executing Howard's vision.

He was opening stores like crazy. He was that. Jim Donald? Jim Donald, I think. Yeah. And so he did what the board told him to. It didn't work out. And that included stupid stuff like movies and this huge expansion. And when it didn't work out, he was a sacrificial lamb. And Howard came back and everyone said, oh, here's the savior. I predict they install a CEO so that a different CEO so that if this stuff doesn't work out, they have somebody to kill again. This stuff being the logo. Just a month ago that they told their baristas to slow down, I believe. Isn't that right?

That's right. Somebody's being set up here. Absolutely. All right. Time to get to the stocks that are on our radar. Ron Gross. I will start with you. Okay.

I've got a speculative one for you this week. It's a company called China Green Agriculture, ticker CGA. It's a company we actually own in the million dollar portfolio service. And it is also a recommendation in our global gain service. This is a rural Chinese company. It's an emerging market company. There's a fertilizer manufacturer, and they've been come under an onslaught of criticism by analysts and shortsellers, basically claiming that this company is a massive fraud.

We have visited the company. When I say we, I mean Tim Hansen of our Global Gains Service. We have a relationship with management. We're sticking with the company. We think that the company is not the fraud that the short sellers are claiming. We're going to continue to do significantly more. work, however, because this type of accusation demands more work. But we only own a small part, if anybody out there is interested in the company, I would also say... It's pretty appealing already.

I would also say a small piece would be warranted, as with most emerging market companies. If this company is a company like we think it is, we think it has tremendous potential and feeds into the agricultural play in China. But there are these short-seller accusations out there. And the accusations are that they're not actually conducting any business. I don't think it's not. The accusations are that they're conducting less business than they're reporting. I used to dig around to find scams. And this one, if I had found this one and my colleagues weren't high on it,

this one would have been high on my list to talk about. I would stay away. Steve Brito, you own shares of China Green agriculture, don't you? Yes, I bought some earlier in this week. Unfortunately, before the stock plummeted around 20%. So how are you feeling? You know, it was a speculative sort of thing. I'm hoping for the best.

But if you liked it at 10, you'll love it at 8. All right, James Early, the stock on your radar this week. A little more pedestrian. Ship Finance, SFL is a ticker. This is a Bermuda-based tanker and vessel company, or ship company, basically. So not too much more pedestrian. It's still risky. 6.7% yield.

Nice yield. About 60 vessels. Five-star stock in our CAP's database, well-regarded management, well-regarded company, if the economy takes back off and keeps growing, this will be one to be in, ship finance. Seth, Jason? Back to the well with Infineera. I know Ron likes this company. They own it over at a million-dollar portfolio.

We own it at Hidden Gems. It came out of rule breakers, I think, one of our other services. If you're disappointed that your Atheros shares were taken away, Infineera operates not in exactly the same space, but it operates based on the same long-term kind of market thesis, which is, that we need lots more bandwidth because we're connecting all these devices together. And what Infinear does is provide what we think is a better way for large amounts of that information to move from one place to another from sort of bandwidth service providers like the people we get our internet from. Right now, the stock has bounced back a little from where it was a month or so ago, and it got really cheap because of the economy and because of the way the technology cycle is working right now.

Some of their revenues probably aren't coming next year but the year after. It's risky, but INFN, I think it's going to be a winner. Yeah, I had the opportunity to actually sit down with them in San Francisco a month and a half ago or so. Good people really got a nice understanding of the business. The stock got smacked, as Seth said, due to fourth quarter being tough to kind of predict, and that happens with these cycles. But we like this as a long-term technology hold. Oh, that's nice.

The company's sitting out to San Francisco, huh? I was there. Set you up in a cushy hotel? For our Duke Street member conference. Oh, nice. Maybe we need a Motley Full Money conference. All right, Seth, Jason, James Early, Ron Gross. Guys, thanks for being here.

Thank you, Chris. Thanks to our special guest this week. Sean Dubrovac from the Consumer Electronics Association. Our engineers are Steve Broido and Gail Anyo Nuevo. Our producer is Mac Career. I'm Chris Hill. Thanks for listening. We'll see you next week.