Motley Fool Money - Motley Fool Money: 02.26.2010

Episode Date: February 26, 2010

The economy grows at its fastest pace in six years. The Fed Chief offers his prescription for the U.S. and China. And the SEC cracks down on shorting. On this week's Motley Fool Money Radio Show, we discuss those stories, tackle the latest earnings news, and share three stocks on our radar. We also talk about the business of motivation with Drive author Dan Pink and talk Academy Awards and business movies with Corporate Library co-founder and film critic Nell Minow. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Thanks for being here. I'm your host, Chris Hill, and I'm joined by Motley Fool Senior Analyst, Seth Jason, James Early, and Shannon Zimmering. Guys, good to see you. Good to see you, Chris. Coming up, we'll dig into AIG, Abercrombie, Coca-Cola, Target, and Home Depot.

We'll talk motivation with, Best-selling author, Dan Pink. Guys, it's not all about carrots and sticks, just in case you're wondering. Carrots and sticks are out now. And Corporate Library co-founder and movie mom, Nell Minow, will give us her predictions for the Academy Awards and her pick for the greatest business movie of all time. All that, plus, as always, we'll give you an inside look at the stocks that are on our radar. But we begin with the big macro.

Guys, on Friday, the government reported the economy grew 5.9% in the final quarter of 2009. That's the fastest pace in six years. Two-thirds of that growth came from manufacturing. Consumer spending, though, actually weaker than originally thought. Seth, we also got news on Friday that new home sales fell to a record low. So put it all together for investors out there. Put it all together. Well, it's a lot of stuff we already know, this slight bump up in GDP to 5.9% annualized.

That's okay, but that's really just a tweak on something we already knew. And we already know that the lion's share of that gain is owed to replenishing inventories. And so the real question is what goes on going forward. Now, new home sales were at a record low, and I don't think I said we were at the bottom last time we spoke about this, but I said we were near the bottom, and the bottom got worse. I actually do some folks out there said maybe they said a little something to do with January weather. It was pretty bad around here.

I'm sympathetic to that a little bit. Existing home sales, however, also out this week, down 7.2% the annualized rate versus what economists thought would be the 1% gain. And again, I suppose you could say January. or whether hurt home sales a little bit. But really, this is mostly a hangover from tax credits and the government's sort of mammoth manipulation of the mortgage market. In other words, they pulled demand forward.

And as some of that disappears and more of it will disappear, we are going to be left with a hangover. How big that hangover is, we don't know yet. So if you think it's bad now. It may get a lot worse. Although, you know, they may just turn around and start pumping out the money again. James, a lot of macro news this week. What was your headline this week?

Well, you know, Chris, I was actually most surprised to see reporting. reports that Goldman Sachs might have helped Greece conceal its true debt figure through use of complex derivative securities. I mean, this is not the Goldman that I know in love. I don't know about you guys. That's just God's work. They're doing the work of angels over there at Goldman? I don't know. I wouldn't be investing in banks right now, though. Shannon, what about you? Your headline for the week? Let me sort of lean into the GDP number from a different angle because I think it was a pretty good number. It is a slight revision. And as Seth says, it is something that really is just a confirmation of what we already knew. But on the train end this morning, I was reading the story of the GDP figure, and I was wildly optimistic because right next to the GDP figure, it said that retail sales were up. They had surged, and which is true in Japan. Now, I'm not really sure why. It was close. We were looking for this number going on, what? Where's Shannon getting these great numbers? Turns out it's just in Japan we've got retail sales going up.

Exactly right. So maybe some Japanese consumers can help us out because we need some help. What we've had, or what we had last quarter, was what an economist call an inventory bump. And so we've enjoyed that. You know, stocks were drawn down dramatically at the early part of the recession. Now they've been replenished. Somebody's got to buy them. You's consumers aren't buying. Maybe some Japanese consumers will. So the 5.9 percent, it sounds like it's not really sustainable.

No, no. You never know for sure. But to hinge back to what James said and to bounce off that thing about not investing in banks, there was a lot of bad banking data, scary banking data coming out, St. Louis Fed saying that money velocity and the multiplier effect, which basically gets money into the economy and gets the economy moving, that these are at low levels. And there was a Wall Street Journal article about FDIC numbers that showed that the drawback in banking last year was the worst we'd seen since World War II or something, and

that fully 5%, actually more than 5% of all the loans at all these banks are more than, was it, three months past due? This is bad. It is pretty scary, but the point is, you know, people have to start buying. We are a consumer-led economy. And to sort of add to the point that was just making about banks. reserves are at historic highs as well. Banks are not lending to small businesses or to consumers. And in a consumer-driven economy, that's a problem.

Fed chief Ben Bernanke said this week that China's large holdings of U.S. assets could pose a risk to the financial system. He says it would be a healthier situation if China saved less and the U.S. saved more. So, James, is he right? Do we need China to just get out there and spend a lot more and save less? Well, Chris, sometimes a good point is undermined by the absolution. lack of credibility of the person making it. I think I had a non-U.S. person been saying that. China might listen. It is true. It is true. The Chinese have saved a lot. They don't own as much of the U.S. state as some people think. The big concern would be if the Chinese economy

starts to suffer. In other words, maybe they are fudging their statistics like a lot of people think, and they end up having to sell the bonds. Their currency would rise. We wouldn't buy as much from China in the first place. And if the U.S. has deflation, that could could even further dumping our debt. So that wouldn't be a pretty picture at all. On Friday, AIG reported a smaller than expected fourth quarter net loss of $8.8 billion. Now, that sounds bad, but it's a big improvement over AIG's fourth quarter loss in 2008, which was $61.6 billion. Shannon, the government took an 80% stake in AIG as part of the bailout. So, I mean, we've all got some skin in the game here. What did you think of AIG?

earnings. Well, it's just an incredible story and it's the better than expected dynamic that we've discussed in the past two, the super easy comps relative to the year ago period. But to me, the headline in this is not really the earnings news. It's how wide the analyst mark was off. They missed it entirely by 1,500%. And AP reported the story in the most deadpan way possible. Basically, analysts expected AIG to report a per share of $4, roughly $4 a share. The actual loss, $651 per share. And the current price... Could that be a rounding error? 1,500%.

It's crazy. The current price of one AIG share is what? 25 bucks or so. For perspective, AIG tapped about $121 billion out of $183 billion available for the bailout. Its market cap is $3.4 billion, and last year it lost $100 billion. So I don't know how it's going to pay the government back and have anything left earnings power-wise to make it a good investment. And that was never the point. The point was to get companies like Goldman Sachs and others more of their money back than they deserve,

but to stop everybody from freaking out. This is going to be a gimmy from the taxpayers to Wall Street. Who's in worst shape right now? Let's just go around the table. Who's in worse shape? AIG or Greece? Oh, Greece, because Greece doesn't have the clout to get tens and hundreds of billions of dollars of free money. They've got Goldman on the side.

I think it's AIG, actually. Because of Goldman's backing of Greece. Oh, yeah, yeah. If Goldman's on your side, you have nothing to lose. Well, they're in a worse shape, but they don't have, there's no night and shining armor for Greece. All right. Coming up, we'll debate the relative merits of the Gap, Target, Home Depot, and Lowe's, and we'll tell you why the SEC isn't doing you any favors.

You're listening to Motley Fool Money. Welcome back to Motley Full Money. Chris Hill here in studio with Seth Jason, James Early, and Shannon Zerrin. Okay, guys, time for some quick takes. The Gap and Target both reported better than expected earnings this week. The Gap getting a boost from its old Navy stores. Target getting a boost from better than expected holiday spending and expense control. Seth, what do you think?

Well, I asked for these to be lumped into one story together because they have two similar themes. One is the trade down to cheaper goods, which you get completely a gap. If you look at their comparable store sales numbers, Old Navy is the only standout, people going cheap at gap. And then cost cutting gets you a bigger net profit. Pretty much the same story at Target. Target already is the cheap store. but it's only cost-cutting that made the earnings rise as much as they did. And the comparable same store sales, comparable store sales, same store sales.

I get a little confused. I'm getting old. Give me a break, huh? 0.6%. That's not great. And the lesson here is you cannot cost-cut your way to earnings growth for very long. James? Speaking of going cheap, I just stocked up on underwear at Gap the other day for like a dollar

or something each. And I assume it was a loss leader until I got home and saw the underwear. I'm just kidding. I've worn a gap closing in public years. Were they? Coca-Cola announced plans to buy the North American operations of its largest bottler. It's a change in strategy for Coke. So, James, I'm a Coca-Cola shareholder.

How happy should I be about this? I would say lukewarm right now, Chris. You know, Coke and Pepsi both had these on-again, off-again, ownership, love relationships with their bottlers. And Pepsi just bought some of its bottlers back. Coke had spun off this Coca-Cola enterprises back in 1986. And now that the U.S. soft drink sales have gone flat. if you pardon the pun, they are trying to buy them again to squeeze a little bit more profit. So Pepsi's so far is looking good.

It's just a lower margin business, and I think it'll be tougher to make a big to do about it long term. Lowe's and Home Depot both reported better than expected earnings, and both saw a pickup in big ticket items. Shannon, that's going to be good news for investors. Well, kind of sort of maybe, but not so much. These are really interesting companies, well-managed companies operating in tax. tough times. And they did report nice earnings upticks year over year. One reason is because of the easy comps that we've been on an infinite... Better than expected. Exactly, exactly. But if you look

at the details, you know, these guys are not growing earnings because they are selling more widgets. They're not shifting more units. And so total sales at both companies for the fiscal year that ended with the last quarter down. Good management, tough times. But the stocks aren't cheap. You know, if you look at the valuation profile, they look pretty richly values me right now. And they're pretty well tied to the actual housing market. So until you see that turn up, people tend to only, people tend to spend a lot more money at Lowe's and Home Depot when they are spending money on houses.

Well, unlike Gap and Target, these two actually are direct competitors. So which one would you have to bet on if you had to bet on one, Home Depot or Lowe's over the next few years? The experience of going into Lowe's is better for me, so I guess I would say Lowe's. Just a shopping experience? I think it smells like lavender.

That's tipping the difference for you? I think all of us prefer... It smells good at Lowe's, so I'm going to shop there? It's all about the olfactory. And the disturbing thing is that Lowe's is apparently designed to appeal to women. And every guy in this refers... So you know what kind of manly men you're getting your radio show from here? I'm a Home Depot guy through and through.

I'm sorry, I have to break with the pack on that one. You have a bit of a Bob the Builder look about you, Chris. Well, it's the tool belt. Are you a handy guy at home, really? To a point. Not with electrical stuff, but other things are pretty... Like a three out of ten or five? I'd say like a five or six out of ten on the handiness.

All right, let's move on. The SEC adopted a new rule this week that would restrict short selling on any day on which the price of a stock declines by 10% or more from the prior day's closing price. Seth, are you long or short this new rule? You know, Mary Shapiro is just, that's the SEC chair, just not doing a great job because she's spending time on issues like this, which are very small when there are tons of bigger issues to tackle. Selling is when you borrow a shares so that you can sell them now and you buy them back later, hoping that the price is lower at that point. And this may sound like cheating or sound like it's un-American or something, but it's perfectly natural, and in fact, it's desirable because it helps with price discovery

because stock prices at that point incorporate information other than just the one-way bet up. So whenever you restrict short-selling, studies have shown that one of the things that happens is investors lose over the long term because they're paying too much for stock. and eventually those stocks will reach the prices that they deserve. The only good thing you can say about this is that it probably won't matter very much and won't restrict short selling too much. But they're paying lip service to kind of all of us crybaby investors who don't like it when our stocks go down. The one benefit, I think, is that we have had an uptick rule since the 1930s. In other words, you have to short only when the price ticks up. And this is

sort of like a partial reinstatement of that. So it's not, I mean, we've lived okay with worse, basically, but studies have shown that it doesn't really do much. It hurts people in the long term, but it makes them feel better. So what we have here are policymakers, except for the two Republican holdouts, by the way, who said that the evidence was no good that this would help. So kudos to them. The evidence is actually that this isn't good for investors. He's trying to cover its butt, I think, having looked so bad with Madoff.

Why do you guys hate the U.S. stock market so much? Yeah, James and I are also in favor of grandmother punching and kitten harassment. There's a time and a place for everything. Well, yeah, as much as I hate to agree, make it unanimous, yeah, just one layer of efficiency that could be withdrawn. Shares of Palm tank this week after the company said revenues this year would be, quote, well below what it had hoped. Shannon, Palm CEO is John Rubinstein, who used to work at Apple. He helped create the iPod. Palm's phones have not caught on.

What gives? Well, right. And well below, Palm is, you know, a bleeding edge. company, well below is the new better than expected. That's going to be into the next year, yes, well below once the easy comms have been clear. Let's write that down. I hate say I think he's really correct there. It's a tragic tale for Palm. You know, Palm Pre, a good product, came out, got nice reviews from some parts of the tech community that had not been favorably disposed to Palm in the past. But it doesn't matter. They had a partnership with Verizon. That also didn't matter. It's a good product, but there's a better one. It's just not cool. Well, but also just in terms of functionality, I mean, the virtual keyboard could potentially be a drawback for the iPhone, but it hasn't been. And so that's an edge that Palm can't have.

The real story here is that Palm has been talked about for years as a potential acquisition candidate. This diminishes its luster considerably. Yeah, I, you know, I feel sorry for him in a way, but this is just the way things got in there. So do why, because it sounds like from that description, they are completely screwed. Well, you know, at the right price, everything's worth something. But on the other hand, they might just want to do what McDonald's founder, Mr. Croc has said. to observe the competitors say, when we see what our competition drown and we don't throw them a life jacket, we put a fire hose in their mouth. So nobody's going to buy these guys if they can kill them with competition.

But I really think Palm is just kind of so out of fashion that they could have the best product on the market out there and probably it wouldn't matter. Maybe they should put Palm Priese in Happy Meals and really get the McDonald's thing going for them. I don't know about the margins at that point, though. All right, time to bust out the full mailbag? Steve, what do you got for us this week? Chris, David from Maryland shared his thoughts on last week's discussion on Apricrobby and Fitch. My wife and I no longer shop for our kids at Abercrombie since we are tired of buying overpriced clothes while being treated like crap by a bunch of snotty teenage sales associates, which is apparently a key part of the company culture and brand image.

We once tried asking them if we could try on a shirt from a mannequin since it was the last one in the store and we wanted to see if it would fit so we could order it online. They refused and said they are not allowed to ever touch the mannequins. When we expressed our disappointment with this policy, they explained with the most condescending attitude. This is Abercrombie. I think they stole that from CNN. Seth, you've done a little investigative reporting on the house. Now my research was a little bit off. I had misread that that they just wouldn't sell it, but this is a layer worse. It wouldn't even take it off to allow the person to try it on so they could buy it online. I actually thought this was a pretty interesting

topic, and so I shot some email out and some telephone calls out to various peers. Some didn't get back, but some did. The C.O. of Gess, which is a company I've spoken highly of here many times, and I own, said, if the product on display is the last one in stock, we will absolutely remove it to satisfy a customer's request to fit or purchase. So to try on or buy, we take great pride in our visual merchandising displays. However, the customer's experience in servicing them is paramount. So, COO of Gaskets in and says, yeah, we'll sell them the shirt off our mannequin, no problemo. John Keyes, a CFO of Urban Outfitters. Actually, I see supposedly retired but still working,

called me and said, there's no question in my mind. We would sell them the item off the mannequin. We believe the customer is the most important element in our business. The idea of not selling something that's there and available for them is staggering. Now, to be fair, the folks at Abercrombie were very nice, especially because I've been such a jerk to them.

And they explained something that I anticipated, they might explain, which is that some of the stuff on these displays, especially at a place like Abercrombie, has been messed with, maybe pinned, maybe stretch, folded around. And they said that's one of the reasons we don't want to sell these. Also, we spray a lot of cologne on it and everything. A lot of lavender. Yeah, exactly.

So they'll offer to locate a similar item, they say, contact local stores to see if the item is available to others, or will waive shipping if the item is still available on the website. However, they don't say anything about fit, And to be fair, I misread and didn't ask them. But if they won't take it off to let you try it on so you can order it, I think it's too haughty. And that matters because it matters because I don't think haughty is fashionable anymore. You don't think hotty sells?

No, I think the kids out there are, I think humility, unless you're on Capitol Hill, a little bit of humility is in nowadays. I just buy my underwear off the mannequin. A gap, you get a free sock that way. Drop us an email at motleyfoolmoney at fool.com. We want to hear for you, share your retail experiences weigh in on any of the stories that we've had. That's Motley Fool Money at Fool.com. And if you missed any part of the show, you can always visit us online at motleyfulmoney.com. The guys will be back later to talk about the stocks that are on their radar.

Coming up, best-selling author, Dan Pink, on what really motivates us. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. So what really motivates us? Well, if you look around, you'll see a lot of carrots and a lot of sticks. But if you ask our next guest, you'll hear words like autonomy, mastery, and purpose. Dan Pink is the author of Drive, The Surprising Truth About What Motivates Us, and he joins me in studio now. Dan, welcome.

Chris, thanks for having me at The Fool. So one of the things I like to ask authors is what surprised you most when you were writing the book, but you actually put it in the subtitle. So what is the surprising truth about what motivates us? Well, I mean, to write this book, Chris, I looked at 40 or 50 years of research and behavioral science about human motivation. And what the science shows is that these carrot and stick motivators, or what you can think of as if-then motivators, if, Chris, you do this, then I'll give you that, are effective for relatively simple tasks, for solving simple puzzles, for carrying out a set of rules, for doing things that aren't all that interesting. The problem is that the science also shows that when you introduce even some small amount of, if a task requires even a small amount of creativity, conceptual thinking, those kinds of contingent motivators don't work.

They often backfire. They often do harm. And I think one reason these keratinistic motivators persist, I think it's a couple of reasons. Number one, it's how we've always done things. So there's the inertia explanation. Another reason is that they produce results in the short term. I mean, if I say to you, Chris, I'll give you $1,000 for doing something. I got your attention.

Yes. Yeah, right. Whatever it is. The answer is yes. You got it, right? You know, you respond. And so you look about that in organizations. If I say to an organization, if I'm ahead of an organization, if I'm ahead of a team.

And I say, all right, team, we need to be more innovative. So what I'm going to do to foster innovation, whoever comes up with a cool breakthrough idea, I'm going to give $5,000. you're going to get activity. People will respond to that. The science is pretty clear that they're not going to do anything that great, but they're going to work. And you're going to feel as a manager like, whoa, what an inspiring leader I am to foster that degree of activity in response. So that's another reason. And the other reason is that they're easy. It's much easier to... You mean from a management standpoint? Sure. It's much easier for me to say, here's $5,000 to whoever comes up with a great idea than it is for me to say really tap true motivation,

which has to do with a sense of autonomy, which has to do with a sense of getting better at something, which has to do with a purpose. That's much harder work for managers. You're listening to Motley Full Money. We're talking with best-selling author, Dan Pink. Let's talk about, let's go in the other direction. Let's talk about some of the companies that you cite in the book. Companies that have tapped into ways to motivate their management teams, their employees, in some pretty creative ways and in ways that have really produced results. Let's start with 3M. Oh, well, 3M is in some ways the poster child for this,

because 3M figured out a new approach literally several decades ago with what they called 15% time. There was a CEO there, a very traditional CEO, who had this kind of renegate subversive streak, who said, let's let some people have 15% of their time here to work on anything they want. And lo and behold, that's where the Post-it note came from. Post-it note, which is one of 3M's cash cows, was not an official project. It was some guy's

15% project. And now you see it at places like, you know, that's a fairly well-known example. I think what Google is doing now is a fairly well-known example of 20, you know, they do 20% time. And a lot of Google's innovations are rooted in that. In fact, there's some, you know, one Google engineer, I quote, says all of the good ideas here have bubbled up from 20% time, which makes you wonder what they're doing the other 80%. But, you know, something like, you know, Gmail, which is ubiquitous, was a 20% project, not an official project. One of the most surprising examples in the book to me is not just a publicly held company, but one that's in an industry that is traditionally not known for innovation or greatness,

particularly on a shareholder level. And that's JetBlue. Yeah. How is an airline making it into your book in terms of motivation? Right. Well, what they do is I write a little bit about call centers. In fact, because call centers are among the most deadening soul-hollowing jobs there are on the planet. Worst job I ever had in my life. How long did you work this? Six hours. Oh!

Six hours. The boss came to check on me and said, how are you doing? And I just looked at it and I said, I don't think I can do this. Yeah. So that's a little bit shorter tenure, but not that much shorter than the typical tenure. This is an industry or profession with a typical turnover of nearly 100 percent. Annually. Okay.

I mean, think about 100% annual turnover. That's like office supplies. Yeah. And so there's some companies taking different approaches, one of which is JetBlue, which basically routes the calls to people's homes. So you don't come to some cavernous, deadening call center with windowless rooms and people striding around monitoring you. You basically route it to people's homes and they do it their way.

In their pajamas. In their pajamas, in whatever clothes they want. They can configure their own schedule. And, of course, what that does is that draws on a very different group of people and produces much greater response in the way of customer service. We're talking with Dan Pink, author of the new book, Drive the Surprising Truth about what motivates us. There's obviously a lot in here about, as we talked about early on, the gap between what science knows and what business is actually doing.

So obviously, much of the book is focused on business. But there's also stuff in here about education and about parents. parenting. You have three children. What can you share with parents like myself about how to better motivate our children? Well, I do have three children, a 13-year-old, an 11-year-old, and a 7-year-old. And I have to say as a parent, and you probably can empathize with this, Chris, is that carrots and sticks are very attractive. They really are. They really are. Why are they attractive? It would be so simple. Exactly. They're easy, and they work in the short term. But I think they have a lot of collateral damage in the long term. So let's take an interesting example.

This summer, somebody I know, some family I know, schools out and they're worried that their daughter isn't much of a reader. It doesn't like to read that much. And so they say, I got the idea. We're going to pay her $2 a book. Every book she reads, we're going to pay her $2. Okay? It's just fraught with disaster.

Well, you know what? There's a certain logic to it. And the truth is that if you pay a kid $2 a book to read a book, that kid's going to read books. There's no question about it. Chances are that kid's going to go to the library and pick fairly short books, maybe not that challenging books,

but the kid will respond to the reward. There's no question about that. The danger comes if you stop paying the reward. And so if you take a 10-year-old and you expect to pay her $2 for every book she reads the rest of her life, you know, if you have this kind of IV drip of money for reading, you might be able to sustain it.

But eventually you have to pull the reward. and what happens? Inevitably, the science shows the kid's going to stop reading because what you've done is you basically said that reading is like working at a fast food restaurant. It's something that only a chump would do for free. And that has huge collateral consequences over the long haul. The book is Drive, the surprising truth about what motivates us.

It's available in bookstores on Amazon, on our website, motleyfulmoney.com. Dan Pink, thanks for being here. Chris, my pleasure. Coming up, we've got Corporate Library co-founder and film critic Nell Minnow. We're going to talk about the Academy Awards and get her thoughts on the best business movie of all time. You're listening to Motley Fool Money. Welcome back to Motley Full Money.

I'm Chris Hill, and it's time to talk a little business and a lot of movies with Nell Minow. She's the co-founder of the corporate library and has been called the Queen of Good Corporate Governance. And she's also the movie mom, because when she's not analyzing businesses, she's reviewing film. Nell, welcome. Thank you. I'm delighted to be on the show. Now, for people who may not know the corporate library, one of the things that you do is you grade thousands of corporations

when it comes to corporate governance issues. Well, I would rather say that we grade the boards. We grade the boards of directors on how effective they are. We grade them like bonds, AAA, to junk, because we believe that just as with bonds, boards are a risk factor. And I really honestly believe that looking at the board is going to become as indispensable an element of investment analysis as looking at the cash flow or the return on investment. I think that when I tell you that we've talked about this before, that when I first came into this business, O.J. Simpson was on five boards. He was on an audit committee of one of them.

I think today we've come so far that at least most people would agree that that was a risk factor. And we look at boards, and we've been very good predictors. We gave bad grades to Enron and World Common Global Crossing long before they fell apart, and we gave bad grades to all the bailout companies long before they got into trouble. How many public companies have you graded, and of those, how many have you given A's to? We don't give too many A's. But we do have a bell curve. It's just a high bell curve.

How's that? We cover about 3,300 companies, and we don't give a lot of A's, I would say maybe a couple of dozen A's. All right, before we move on to the Academy Awards, complete this sentence for me. Most corporations in the United States are, I'm giving you a lot of leeway. You can go a lot of ways there. Not doing a good enough job of controlling risk by improving their incentive compensation structure. All right, fair enough. All right, it's time to put on your movie mom hat.

Let's talk about the Academy Awards. Let's start with Best Actor. Who do you think will win and who do you think should win? Same answer to both, Jeff Bridges. Really? Jeff Bridges has been one of the great unsung heroes of Hollywood for a long, long time. He finally got the role of a lifetime. I spoke with the guy who wrote and directed the movie.

It's his very first movie. He never so much made as a student film or a TV commercial or a music video before this one. And he said to me that when he wrote the screenplay, he knew that if he couldn't get Jeff Bridges, the movie was not going to work. Jeff Bridges is magnificent in it, and I'm really happy to see him get the attention. I've got another movie to recommend to you, which is also up for an Oscar nomination for screenplay, and that's in the loop. Anybody who lives in Washington or knows anything about Washington will find this movie very funny. It's a satire of the British government and the American government in the run-up to the Iraqi war,

and it has volcanic profanity. I'm telling you, Quentin Tarantino will burst into tears when he sees this movie. He will wish he could be that inventive with invective as in this movie. At some point in the next week, I'm going to try and use the phrase volcanic profanity. Best actress, who do you think should win? Who do you think will win? I think Merrill Streep should win. You know, people think of her as having a million Oscars.

She's at a million nomination. She hasn't won an Oscar in about 20 years. And her performance as Julia Child was a masterpiece. And everything she does is fantastic, but we shouldn't take her for granted. She did so much more than an imitation of that character. She gave a full performance, and it was, in my opinion, the best of the year. Now, is she going to win, though? Because Sandra Bullock seems like she.

has probably got it. I vote on the broadcast film critics, and they tied at the broadcast film critics. I'd love to see that happen again. All right. Best picture. What do you think? That is a real wildcard this year, because not only do they have 10 candidates, as opposed to the usual five, but they put in a weighted voting system that means that it could be a real wild card. Now, I am guessing that it's going to be the hurt locker. other thing that I will mention that makes it hard to call the best picture is that 3,000 people worked on Avatar. It's just a huge, huge, huge production.

And there are only about 6,000 people who vote for the Oscars. And what that means is that everybody who's voting for the Oscars is intimately acquainted with somebody who worked on Avatar. Now, I think it's certainly going to clean up on all the technical awards, but you can't overstate the importance of personal connections. That's the one category that everybody votes on. And so I think there are a lot of people who are so connected with it. They'll vote for it.

Or it could be, you know, because of this weighted voting system, you could get a real shocker. It could be the blind side. Two more movie questions. What is the best movie the last year that most people haven't seen that they really need to? There is a documentary that came out last year called It Might Get Loud, which is just three guitar gods from three generations, The Edge from U2, Jack White, the guy from Led Zeppelin.

Jimmy Page. Yeah, and it is really an amazing movie. The reason that documentaries are almost always more interesting than feature films is that they're almost always about passion, and these are three guys who live to play the guitar. And it is to see them interact with each other and just tell their own stories, it's mesmerizing. Whether you're a music fan or not, it's sensation. I'm so happy to hear you say that because that is actually the last movie I rented.

And I'm not even a huge guitar person, but it is a fantastic movie. Oh, I'm so glad to hear you say that. I really loved it. Because this is a show about money and investing, I have to ask you, in your opinion, what is the best business movie of all time? My favorite business movie is the solid gold Cadillac because it's a story of a 10 shareholder who turns a company upside down. And if you added on four zeros to all of the numbers, the movie was made 1954, the executive compensation numbers and all of that, you'd see that it's very, very applicable today. They're accounting problems. There are bad acquisition problems.

There's all kinds of corruption on the board. and it's a hilarious, smart, funny movie. So I love that one. But I have a whole list that I often think about. If only accounting errors and bad board of directors were hilarious in real life. In real life, that's right. And if only a shareholder who had 10 shares could throw the board out in real life, that would really be great.

But it even has a defense department, a contracting scandal. It's got everything, and it's just a wonderful, wonderful movie. But there are a lot of other movies. I like, here's one that will surprise you. There's a romantic comedy with Humphrey, Bogart, William Holden, and Audrey Hepburn called Sabrina. And it's really not about business at all. But there is a speech that Humphrey Bogart gives in that movie about why business is important.

That is probably one of the best defenses of capitalist system that you'll ever hear. You had me at Audrey Hepburn. Last question for you. There's a wonderful, wonderful profile of Roger Ebert in the latest issue of Esquire magazine. He's a friend of yours, I believe, and encourage anyone to just go online to Esquire.com and read that article because it's really good. I want to add something, which is that he wrote a response to that article on his own blog, which is even better. So, yeah, the Esquire article is fabulous, but his response is great. One thing that I enjoyed reading about in the Esquire article that I didn't know about is, of course, you know, he is unable to speak or eat.

after his last surgery. And when I saw him last year, it was almost a year ago at his annual Ebert Fest in Champaign, Urbana, Illinois, he had a synthesized voice like Stephen Hawking. But he thought his idea was, well, if I can't speak in my own voice, let's pick a really good one. And he had sort of a Lawrence Olivier voice. And so he would hit his computer and he would say, hello, you know, and it was just hilarious. In fact, I made a little video of him, and I put it on YouTube so you can see it. And what I learned from this Escort article is that because he has done all the television shows and so many other interviews,

they are actually compiling a synthesized voice for him of his own voice. That's amazing. And that will be fascinating. I'm really, really. I'm hoping that that will be in place by the next Ebert Fest in April because I would love to see that. Who would you pick if you had to have a synthesized voice? Who from all of filmed them would you pick? Lauren Bacall.

Oh, fantastic choice. I think I'd have to go slightly off of film and got to go with Barry White. Barry White would be good. My husband would definitely pick Gary Pick. Nell Minow is the movie mom and the co-founder of the corporate library. Now, thanks so much for joining us. My pleasure. Bye-bye.

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. Joining me in the studio again, our trio of senior analyst, Seth Jason, James Early, and Shannon Zerman. Guys, we've just got a couple minutes left. Let's go quickly around the table. Give me one stock that's on your radar. Shannon will start with you. Sirius XM had its first profitable quarter since the merger, so credit where that's due. But there's a reason the company is in penny stock territory into the horrible state of its balance sheet. There's a financial measure called the current ratio that measures the company's ability to meet its short term, near-term obligations. You want a number above one, preferably well above one. The number for Sirius, 0.4. James Early. Chris, I've got a bottom feeder stock that's not appropriate for 99% of investors, but I'll say it anyway.

Bank of Greece. And this is actually a well-run bank in a not-so-well-run country. When this was actually an income investor recommendation from a long time ago, I sold before it cratered, fortunately, but the time to bottom feed is now, not a couple years from now, if you're interested. And the ticker? NBG. Seth Jason. Under Armour, UA, you know what they make. You see it on the football field, etc. I talked about their earnings recently, I believe, on this show. Did I? Yeah. Did I? Yeah. Okay. And so stock still down, not cheap, really, except that it never is really that cheap. So if you're looking to start a position, now is a good time.

All right, Seth Jason, James Early, Shannon Zerman, guys, thanks for being here. Thank you, Chris. Thanks to our special guest this week, Dan Pink and Nell Minow. If you missed any part of the show, go to our website, motleyfoolmoney.com. You can also get a copy of our free report, the Motley Fool's top stock for 2010. All that and more at Motleyfoolmoney.com. Our engineer is Steve Broido. Our producer is Macrear. I'm your host, Chris Hill. Thanks for listening. We'll see you next week.