Motley Fool Money - Motley Fool Money: 03.09.2012

Episode Date: March 9, 2012

Apple unveils its new iPad. Starbucks serves up trouble for Green Mountain. And Pandora serves up disappointing earnings.  Our analysts discuss these stories and share three stocks on their radar. Plus, Wired contributing editor David Wolman talks about his new book, The End of Money: Counterfeiters, Preachers, Techies, Dreamers – and the Coming Cashless Society. Learn more about your ad choices. Visit megaphone.fm/adchoices

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I'm your host, Chris Ellen, joining me in studio this week from Motley Fool Inside Value, Joe Maker, from Motley Full income investor, James Early, and for million dollar portfolio, Ron Gross. Gentlemen, good to see you as always. How'd it, how you doing, Chris? We have got a new iPad from Apple and a new coffee maker from Star And as always, we've got a few stocks on our radar, but we will begin with the big macro. The U.S. added 227,000 jobs in February.

Unemployment stayed at 8.3%. Also, Greece said on Friday it had finalized a debt restructuring deal with private lenders that will clear the way for bailout money from the EU and the IMF. James Early, I'll start with you. What's the takeaway for investors in terms of the big macro? Chris, to me it's Greece. The private sector was previously holding these bonds that were. worth probably 25 cents to the dollar. Now they're officially holding bonds worth 25 cents

of the dollar. And that might not seem like a big deal, but from Greece's perspective, now they officially owe less. So they're not as demoralized. They can maybe dig out of their mess, but the problem is Greece is still grease. They're supposed to cut their debt drastically by 2020. And apparently all of these bonds don't start trading until Monday. They're already on the gray market, whatever that is, trading it at much lower value. So investors don't really believe this is going to be a huge help. Ron, what do you think? One of the goals here is to isolate Greece so we don't have that contagion that's spread

into other European nations, which is very important so we don't have a full meltdown. Our markets here are reacting to that. Markets have been strong lately. So if there's one thing that's good, I think that is. Here on the domestic front, the job numbers continue to look really good. Three consecutive months of job growth. December and January numbers were revised upward. For weeks and months, I was negative on the unemployment picture. It's just fair for me to turn when the data shows the turn. So I'm

optimistic. Yeah, Joe, as Ron indicated, third straight month of 200,000 plus jobs for a month. So what do you think? Have we turned a corner on the job market? Yeah, I think so. I think the bigger picture takeaway here is that you can't be a wait and see investor on this kind of thing. No offense. A lot of people. I was fully invested the whole time. I was just worried. All right.

Well, with Greece, back in October, November, especially early October, people were absolutely freaking out about sovereign debt crisis. But in hindsight, that was a phenomenal time to buy. Stocks are up 25%. And this past week also marked three year anniversary of the low in the S&P and the financial crisis. If you'd bought that, you would have doubled your return, which is a phenomenal, phenomenal return in three years.

And it just, again, goes to show that if you're that guy who's like, no, I got to wait. see how things shake out. I mean, you can do that, but you will always miss the big run-ups and always be like. And you'll know when to tell us to jump in, though, right? Sure, well, you listen to the show, right? Apple unveiled its new iPad this week. The features include retina display technology, a super sharp resolution and support for 4G. Joe, I'll start with you. A lot of threads to pull here. This is a long-time, Motley Full recommended stock. What do you think of the new iPad?

Well, it's a beautiful device, which is exactly what everyone It's a rectangle. Yeah, well, shaved corners. I mean, it's absolutely beautiful. I have an iPad. I love it, and I think this new one is going to be a huge upgrade. That said, the reason the stock didn't move on the news is because it was exactly what everyone expected. And, you know, exact expectations don't exactly change stock prices.

I'm so old, I still remember the iPad, too. I mean, back in my day. So, you know, in terms of you look at tablets, you look at PCs, one of the, you know, the the narratives that Apple executives are pushing is this notion that when you combine those two, that Apple is really the largest PC maker in the world because they're looking ahead to the post-PC era. James, I know. It's some great marketing, by the way. Well, I mean, it's a smart strategy. It's a smart strategy for any company. But James,

I know you have a lot of Apple devices in your house. I mean, when you think about the post-PC era and I don't think anyone disputes that we're headed in that direction, what are some companies you think could benefit from that? Chris, I think this whole. post-PC era is overblown. I mean, these are still computer devices. The big difference is, do they have a battery or do they run on a cord that's plugged into the wall? So initially, companies like ARM got in quickly with chips that use less power, but even Intel now, for instance, is basically at power parity. So I think we're going to see some upstarts, but eventually

the same big companies Apple Intel are going to dominate. Ron? Yeah, we're in the early stages of the post-PC era, but it's coming. We're right getting into it. Sounds like an art movement or something, doesn't it? It's coming. And the companies that are going to benefit are the companies that the remote desktop visualization companies like VMware, the telecommunications companies, Verizon, AT&T, they're going to benefit. The big data center, cloud kind of companies, IBM will benefit from this. There's a lot of companies out there. And the people that make the chips, the Qualcomms of the world, will be beneficiaries, well. You agree with that, Joe?

Yeah, I think EMC Holdings is one that's really interesting. They actually own most of VMware, which most people don't realize. And they also have a business that's highly successful in selling hardware that's kind of the backbone of ITs. So definitely an interesting one and a cheap way to play VMware. Fairly or unfairly, Apple has huge expectations. It's a company that has managed to beat those expectations, certainly over the past five, six years. But they really do have high expectations. And already one of the narrative for this week was, okay, well, what's next? So this iPad that was unveiled, it was, as Joe said, very much expected. There was no sort of added wow factor. When you look at this

company, Joe, what is the next thing that investors should be looking at? Is it iPhone 5? Is it the long, discussed and rumored Apple television set? Is it yet another version of the iPad? What do you think? I think iPhone 5 is the real story here. It's going to be a huge winner for them. And I I think Ron's probably going to talk about Apple TV. We were talking about it earlier. But, yeah, I do think iPhone 5 is going to be a massive success for them. And I think the big challenge for them going forward is just keeping people excited about what are becoming progressively smaller incremental upgrades with each phone and each tablet.

And, you know, over time, it's going to be tough to justify these little slight improvements convincing people to go out and pay another $700 for an iPad when, frankly, you know, my original one still works just fine. James? I would use Joe's very logic about the... these minor upgrades and say that's why Apple TV could be the sort of make or break event if you're an investor in Apple because the iPhone and the iPad already sort of have established trajectories, whereas the TV is sort of a big thing. Now, the TV is a long-time ownership device. So Apple's challenge is going to be to plan obsolescence into that. In other words, if I'm going to have a TV for 10 or 15 years, I hold mine forever, you know, these little whiz-bang

features that seem so cool now will very quickly become outdated. Yeah, Ron, I mean, we were talking earlier, you look at just the television market as it exists today. It is a market, first all, it's a mature market. Second of all, there's not really the kind of pricing power that companies have with televisions that they do, maybe with mobile phones and that sort of thing. It seems like that would be a pretty significant challenge for Apple going in, don't you think? Yes, but I think Apple has that fan base, and they also have the ability to make things that are just a little bit better. So when Apple TV finally does. come along and it's your entertainment hub and it's also your computer and it has the ability

for you to do all these things in a way that Apple can seem like they only can do, people will pay up for that. Prices come down over time as they always do. But I think the pricing will be there initially. To your other question, I don't know which one of these things is coming first, but I think what's great for all Apple shareholders is that they're all coming, whether it's the next iPad, the next phone, the next TV, and that's going to give Apple to the Apple to be. the growth they need for the stock to be worth owning.

Let's close on the stock. Joe, obviously it's a stock that for shareholders over the last few years, and I'm not one of them, and I don't think you are either. Unfortunately. It's made those folks a lot of money. When you look at the valuation of this company, would you buy it today's stock price? Well, I'm bitter, so I don't say no. You have to invest based on emotion after all. Absolutely. That strategy always works for investors.

Yeah. Well, kidding aside. I'm not a fact. fan of the stock right here, and I'm one of the few people in the office, or seemingly on the planet where that's the case, I think that it's going to be a lot more difficult to resale items than people expect. I don't think that a lot of these devices are recurring revenue sources, like a lot of bulls seem to think they are. And that three to five years from now, we're going to be wondering where the growth is, and they're really going to be stagnating. But right now, nobody seems to care about three to five years from now. Ron?

A million dollar portfolio came to the Apple game a little late. We bought the stock and recommended the stock at $480 a share. Our model shows that if the company can grow revenue is 11% over the next five years and hold margins constant, that the stock's worth $625 a share, which is 15% upside from where we are now. It's not a home run, but there's still some upside left. James, fair to say that if Apple issues a dividend, you're automatically in? Not automatically. No, I have not, but it would make my day. I have not run a model on Apple, but I would not bet against it either. On Thursday, Starbucks announced it will begin selling its own single-serve coffee maker later this year.

On Friday, shares of Starbucks hit an all-time high, while shares of Green Mountain coffee roasters opened down 15%. Ron, Green Mountain is a stock that has had a pretty amazing run over the last 10, 12 years. It's a long-time recommended stock here at the Motley Fool. when you look at this move by Starbucks and Green Mountain has really made their money off of those K-Cups and the K-Korik machine, how much is this move by Starbucks going to hurt a company like Green Mountain? How much is it going to help Starbucks? It's just one more nail in the Green Mountain coffin. The patents come off the K-Cups

in September, I believe. And now Starbucks is introducing a competing machine. Now, it's a little bit different. The Starbucks machine goes after the high pressure, like the espresso drinks, where Currig is more focused on the lower pressure coffee drinks. But it will still have the single serve. It will still have the single serve. So it's a pretty big competitive force. The new Starbucks machine will really compete directly with the Nestle, the espresso machine, because that's more of an espresso maker. But there's no doubt about it that it hurts Green Mountain and the stock's selling off appropriately.

Is Starbucks just the Google of coffee? It steam rolls over whatever it wants to. So, well, I mean, to James' point is Starbucks in a position with this machine similar to the way Amazon is with the Kindle, where they can essentially sell this machine either at a slight loss or maybe even just break even, and they can look to make money off of the coffee. Are they in that position? Well, it's clearly a razor-raiser-raceable model. I mean, those K-cubs and continually, I mean, I own a K-K machine, and I'm constantly shelling out money for those boxes at K-cups. And Starbucks will do the same thing. Joe, in terms of Green Mountain stock, as recently as six months ago, it was over one-tena-share.

Friday morning, it opened somewhere in the low 50s. Is this a value opportunity, a value play, or the classic value trap? Well, I'd say value trap, but to look like a value trap, you still have to look cheap, which I don't think it is. Even knock down the way it is, you don't think it's cheap? No, it's been an amazing high flyer and a great story, and it's got a great process. product, but they have so much competition coming online, both on the K-Cup side and with new devices with the likes of Starbucks coming on. And to be honest, there are some pretty valid questions about their accounting that have been bounced around in the press pretty

thoroughly. And when you put those things together, I think you could probably just find some exciting growth stories elsewhere with fewer question marks. Coming up, some shocking news. The recent internet IPO is having trouble turning a profit. Details next. This is Motley Full Money. Welcome back to Motley Full Money. Crystal here in the studio with Joe Maker, James Early, and Ron Gross. Guys, got a new station to welcome Money Radio, 1,200 KPSF in Palm Springs, California. Money Radio. Money Radio. Money Radio.

I like that. And it's Palm Springs, so maybe a field trip is in order. Nice. Shares of Internet music company Pandora down more than 20% this week after the company missed on earnings and said it's not going to be profitable for at least another year. Is that bad? They're honest. They're honest. Is it a big deal if a company loses a quarter of its value in one day? Kind of. Listen, I don't know how they monetize this business model.

It's the same story with a lot of these types of companies. They do have ad revenue. I don't know how they monetize the subscription part of this. I know a lot of people that use Pandora. I don't know many people that pay for it. They're not going to be profitable for a while. Still almost a $2 billion company. It just doesn't make sense for me as an investment.

How long can they do this? Because right now, about 90% of their revenue is coming from advertising. Obviously, they want to get more subscribers. Make it up on volume. But how much longer, I mean, when they say we're not going to be profitable for a year. They've got the money to drag this out and continue for a while because they just went public, obviously. But you have rising content costs, as we're seeing in all these kinds of businesses like

Netflix. So that's hurting them, and is one of the reasons actually they're not going to be profitable for a while. But they do have 47 million active users. So theoretically, you say to yourself, there must be a way we can monetize this. Surely there is a way. We'll have to wait and say. It sounds very 1999 price to click. Joe, two years from now, is Pandora a standalone company? And if not, who do you think

owns them? I think it is. It's probably just working along and desperate and maybe selling some equity to stay alive. This week, Qualcomm, the mobile phone chipmaker, announced a share buyback plan of up to four billion in stock. And James, you'll be happy to know Qualcomm. Also, you'll be happy to know, Qualcomm, also increasing its dividend by 16%. I mean, we've talked about this before, this sort of perception of tech companies that frankly seems a little unfair because you've got companies like Qualcomm and Microsoft and

Intel, they all pay a dividend. And it's almost like, hey, if you're a tech company, once you start paying a dividend, you're no longer cool. Enough of the cool guys do it, Chris, and then it'll become cool. I'm not quivering about Qualcomm just specifically yet. It's like 1.6% yield, and we used to have a checking accounts paying more than that probably, but they are noble. And the more, yeah, the more intels, the more Cisco's, the more Qualcomms that do this. I mean, tech has evolved as an

ecosystem. It's not all high growth. And that's okay. So that's what the message Qualcomm sending out is really proclaiming. Joe, what do you think of Qualcomm's business? I own it. I love it. I think they're one of the big winners in the whole smartphone post-PC world, and it's two reasons really. One is that they're basically becoming the Intel of mobile chips. And the second is that they own so much IP that they get licensing fees on every smartphone sold. So whether it's Android or Apple, they're going to get like a 3 to 5% rip on that phone. So it's just producing amazing margins. And I'd like to thank them for the dividend.

Guys, is Amazon going to start getting into producing original television programming? Because this week, Joe Lewis, a new executive at Amazon, updated his profile on LinkedIn to include the job title, VP of Original Television. television programming at Amazon. It was quickly changed once I'm guessing Jeff Bezos or someone else at Amazon found out about that. Joe, what do you think? I'm an Amazon shareholder. Should I be excited or terrified that they're possibly going down this road? Somewhere in between. This is not a good move for them. Amazon's the best retailer on the planet, but this is two degrees of separation away from their core business. They're trying to prop up the movie and distribution business, and that's really kind of a secondary

issue for them. I'd rather they just keep focusing on what they can do very well and building around that. So namely Kindles and just the logistics of getting goods to people quickly and in a cheap way. Ron? I agree with that. But Jeff Bezos is not a retailer or a merchant. He's a big thinker. He's got a lot of ideas. He's not a Hollywood guy either. The company is going to take itself in many, many different directions. This looks like perhaps one, I think, will be small. They're not going to turn themselves into some big,

huge studio. I agree with Joe, though. They've got to stick to their knitting. James? Yeah. The traditional model of content creation is really not that profitable. The distribution has been a little better, and that's what Amazon does. So the secret to them is going to be really keeping their costs down if they do make content. Finally, guys, this week Fender Musical Instruments Corp, the maker of legendary guitars, played by the likes of Jimmy Hendricks and Eric Clapton, filed to go public. They're looking to raise $200 million in an IPO.

What do you think, Ron? You're buying? I mean, they got sales in 85 countries. I would have to learn a little bit more about the valuation. I guess they're going to be using a lot of this money to pay down debt, which is good. I would want to see if there's any shareholders that are selling to get out or is the company selling the stock. It'd be fun to own. I'd want to see what the actual certificate looks like. I'm sure it'd look pretty cool, but I'm not in now. Strong buy.

Exactly. Everybody loves guitars. I think that's a relatively safe statement. So let's go in the other direction. If you could eliminate one musical instrument from the planet, what would you go with? My brother-in-law is going to kill me, but I'm going with the tuba. The tuba. That was number two on my list. You're going to offend anybody when you say this, but maybe the screechy human voice, I mean, there's just so many songs that are ruined, ruined by vocals.

They would just be better instrumental. Joe? I'm going with the triangle. It's pretty low impact. I'm going with a triangle. I'm going with the kazoo. Steve Brodo? I'm going, Piccolo.

What does it do? Who does it help? All right, Joe Maker. James Early, Ron Gross, guys. We'll see you later in the show. Coming up, are we headed for a world without cash and coins? Our guest is David Wolman, author of the new book, The End of Money. Stay right here.

This is Motley Full Money. Yes, money in my pockets. Welcome back to Motley Fool Money. I'm Chris Hill. So what would happen if you stopped using cash altogether? And is it time for us to start thinking about moving beyond cash? David Wolman is a contributing editor at Wired Magazine. and the author of the new book, The End of Money, Counterfeiters, Preachers, Techies, Dreamers,

and the Coming Cashless Society. David, thanks for being here. My pleasure. What do you have against cash, man? Oh, well, for starters, it's filthy. I mean, you know, next to sneezing in someone's face or grabbing a handrail on the bus just after someone else, you know, this is like one of the final ways that we transmit our communicable goodies. So aside from germs, what do you see as the big press?

problems with cash? Well, first of all, cash is the currency of crime, or at least a lot of crime, right? I'm not talking about Bernie Madoff, per se, but, you know, there's 10,000 bank robberies in the United States in 2009, 2010. That's just people chasing after the paper stuff, right? So that's a big cost, not just having to deal with the cost of the robbery or an attempted robbery and, you know, PTSD counseling for employees, but, you know, then you're into paying the cops to go. go after each of these crooks, and then you're paying to prosecute and incarcerate. Meanwhile, it costs society at large, if you zoom out a little further, cash management and cash logistics for, you know, for the public and for the private sector,

we're looking at about $150 billion a year. And that's just moving, storing, securing, inspecting, inspecting, re-inspecting, re-delivering, redesigning the currency. You know, it doesn't include the cost of crime. or doesn't include, let's say, the expense that DEA has to shell out to go after cash-enabled, you know, transactions in the drug trade or, you know, let alone the war on drugs in South America. Because, you know, most, I think it's like 65, 70 percent of most $100 bills. You know, they live overseas, stuffed in briefcases owned by mobsters and, you know,

under the mattresses of drug dealers in Latin America, right? So that would be a huge savings if we were to, you know, not necessarily get rid of all cash, but even just outlaw the $100 bill. You're listening to Motley Full Money talking with David Wallman about his new book, The End of Money, Counterfeiters, Preachers, Techie, Streamers, and the coming Cashless Society. What do you see as the best alternative right now to cash? Well, right now, you know, everybody in industry is saying, if you're not talking about mobile, nobody wants to talk to you.

And so, like in a lot of industries, really, talking about the mobile phone is much more than just the means of reaching out to talk to other people or to surf the web. So-called mobile money and mobile banking tools, you know, they are being rolled out tremendously fast, and they are literally changing the world. I mean, for those of us in wealthier countries, I think they're, especially for someone like me, you know, I'm interested in technology, Google Wallet, PayPal, mobile. These things are kind of cool, and I'm enchanted by the idea that the friction in my financial life will be reduced that much more, and cash is going to be that much more obsolete. That's cool and exciting. Where this stuff becomes absolutely world-changing is in developing countries, where, you know, people are stuck only using cash, and that creates all these problems of being excluded from the formal economy. They can't establish a bank account, which means they can't brace against financial shock. They can't accumulate the kind of meager savings they need to make the investments to climb out of poverty, right?

So not just buying someone in a new pair of shoes, but buying a moped so that you could commute to a factory for a job or, you know, enrolling a daughter in school 10 months from now or buying some farm equipment. Right, if you're stuck using cash, it's just so turbo liquid. There are all these claims being made on your cash at home. You know, if you don't lose it in a flood or a fire or an earthquake, then, you know, you know, your drunk uncle is going to pilfer from your stash, or, you know, a legitimate claim from a neighbor down the street who needs it badly for aspirin for a granny.

And so, you know, because that cash, you know, you just can't save as easily. And so economists and development experts are really fired up about these tools and, you know, throwing a lot of money at the startup effort in the developing world to get these programs rolling. And there are a few countries that I talk about where, you know, you know, it's really changing the way that everyone is doing business. You know, in Kenya, it's like 17 million people are using this MPAA program for sending money back and forth.

The traditional banking industry in Kenya has five million customers. It took them a century to get there. Well, you're getting right into sort of the sweet spot for us here at the Motley Fool because this is a show about investing. And so reading a book like yours, and talking about a cashless society, here at the Motley Fool, we start to think about, all right, let's get into some of the companies who might be benefiting from this, who might be against this.

And I'm going to spot you up with a few different sort of groups of companies. And let's start with mobile, because you already touched on that. Because, you know, with eBay's PayPal unit, even with a company like Apple, which has 98 billion in cash on its balance sheet, and if it wanted to, could probably deploy some of that cash to go after sort of the mobile payment piece of this. When you look out at the companies involved in mobile payment, who are the ones that you look at as really being at the forefront

of really leading this movement? One thing to watch for is so-called NFC if like it. So I think NFC and companies talking about NFC, that's certainly something to watch. I think another area is companies that want to take a swipe at, pun intended, sort of the middleman fees, and Square, started by Twitter co-founder Jack Dorsey, is another one to watch. They're rolling out some really interesting tools. Right now, they have a hardware item that you plug into a phone, and it means that I can run your card so that you and I can settle up after I covered the dinner bill

instead of me having to have like an actual credit card terminal. So that's an interesting idea. You're going to pick up the tab when we go out to dinner? In theory. Depends on the rest of the dinner you go. So, well, no, I would only pick it up for about 90 seconds until I charge your card for your half. That's one area to watch. You know, Apple, you have to watch them.

They have, there's a lot of sort of, well, with Apple you have to watch them. There's a lot of buzz about this thing called I-Wallet. No one knows exactly what it is, but I know there's a number of patents filed, but I think it would be bizarre, frankly, if they didn't move into this space after the iPhone has done, has, like, taken over the world. Some other companies to watch, you know, PayPal has such an early mover advantage in this world. And what I mean by that, for example, I'm currently in Washington, D.C. for some media stuff, I stayed with my brother and his wife last night outside of town, and they were selling a table that night that they were selling it via Craigslist, right?

And so my sister-in-law is going to take that payment in cash because she said to me, I'm not going to accept any form of payment other than cash from a stranger, from someone I don't know. Totally legitimate, everyday person kind of concern, right? Well, PayPal's tremendous success was convincing people that this is a secure way, at least online, to send and receive money from people you don't know. And so I think PayPal's move into mobile, they have that trust that I think tomorrow's mobile money startup with a name you've never heard of. You know, it has a trust hurdle that is higher than PayPal's, right?

because trust is so essential when it comes to dealing with people's money. It's one thing if AT&T drops my call. It's another thing if a mobile money service drops and loses my money. You know, then I'm just going to go racing back to my traditional forms of payment. If I'm really into tax evasion, that's cash. If I'm okay with Visa and MasterCard and American Express, then maybe I'm going to go back to credit cards. You're listening to Motley Full Money talking with David Woolman about his new book,

the end of money, counterfeiters, preachers, techies, dreamers, and the coming cashless society. What surprised you the most when you were working on the book? You know, early on, I thought this would kind of be something between a Valentine and a eulogy for those rectangular slips of paper and those little metal plugs. But the reality is, you know, even though cash is, to a large extent, at the edges of our everyday lives already. When you talk about the origins of cash and its potential demise, it really speaks to all of the fundamental concerns that people have about money and about what is money and what holds value and the stability of the national currency or the euro crisis,

even things like, you know, what does it mean to be American? You know, this is one of the last physical touch zones of our national identity. You know, someone told me getting rid of the greenback is like burning the flag on the steps of the Capitol. And it was like, you know, I knew I was going to strike a nerve, but I had no idea that it would be sort of full-body convulsions with this. And that is because, you know, it just touches everything, you know, from that time when you're a child and you lose your first tooth and you reach under the pillow for a coin

to the question of, do I hold dollars? Do I hold gold? You know, what will make my life more stable when it comes to, you know, providing for my family 30 years from now? And you would never really think that scrutinizing a $1 bill and the question of kind of the magic that gives it value, you know, those questions lead you down those avenues. And, you know, that was quite surprising.

And, of course, as a writer, that was a delight, right? because now you're sort of digging into some meaty questions. David, we're going to wrap up with a round of buy-seller hold. Let's start with buy-seller hold, the future of the penny. You're saying if money, if we go to a cashless society, penny is the first thing to go? Well, okay, okay, I hear you. I hear you. Maybe I should recast, because as one coin collector just told me recently, I would love to see a cashless society. My entire inventory is just going to shoot up in value.

there are websites and businesses built on this buy seller hold the future of bartering you had to pause there for a moment i did you know because a lot of it is people uh trading massages for freelance graphic design work but if you actually want to like pay your utility bill or fill your car tank with gasoline you're going to need good old u.s sovereign currency so i get that on the other hand, I see a real appetite out there for these barter systems, this person-to-permit-person transactions. And what's wonderful about the Internet is now you don't need the double coincidence of wants of barter in the prehistoric age sense of it, right?

So you've got a lot of potatoes. I've got a lot of furs. You need what I have. I need what you have. Great coincidence. Let's trade. Well, now you can have a central clearinghouse of what everybody's offering up. this barter exchange. And so you can just kind of log on and see what's available. And so,

you know, I don't know if they're going to take over the dollar ever. I doubt that. But I think people like that proposition. And I think, you know, the same way you see farmers markets popping up everywhere. I think that speaks to people's longing for like a little bit more sense of community, a little less of a connection to a Wall Street bank thousands of miles away. I just don't see them as very harmful. I don't know if buying that hypothetical stock is going to be a windfall per se, but I see them as kind of innocuous. Buy seller hold listeners using cash to buy your new book, The End of Money.

I love cash's purchasing power like everybody else, but it's been really fun and sort of a wild ride to subject cash to a little more scrutiny than it's used to. Doesn't that just make you part of the problem, David? It might be. It might be. The new book is The End of Money, Counterfeiters, Creatures, Techies, Dreamers, and the coming Cashless Society. David Wolman, thanks so much for being here. My pleasure. Coming up, we'll give me an inside 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're here. I'm Chris Hill, and joining me once again. Again, in the studio, Joe Magar, James Early, and Ron Gross. Guys, that time, once again, it's time for the stocks that are on our radar. We will bring in our man from the other side of the glass, Steve Brodo, to ask a question about your specific stock.

So, Ron, I hope just a modicum of research. Of course. Your stock this week. Well, it's on my radar. It's a recent Hidden Gems recommendation. It's BJ's restaurant, ticker B.J.R.I. A chain of moderately priced casual restaurants, about 115 of them, half of which are in California. a ton of expansion potential. It doesn't look that cheap to me, but that's where that expansion

potential may factor in, so I've got to do some work there. Steve, a question? Sure, I've always understood restaurants to be challenging investments. Give me one restaurant that's really soared that you can think of up the top of your head. Chipotle, Buffalo Wild Wings. Have you heard of a little company called McDonald's? Nicely played, Ron. But just to be clear, you're not putting McDonald's sort of the fast casual. That's not in the same category. No, it's not the same category. No, this would be Applebee's,

Chili's, maybe Fridays, those kinds. A little more upscale than that. Average ticket price is a little higher. Okay. James Early, your stock decision? Chris, I will go with Glaxo Smith-Kline. Again, just on my radar. This is one that I backed out of an income investor years ago because of concerns that the chemical-based drug discovery method

is really showing diminishing returns, almost like the blockbuster movie business. It's just hard to make a big profitable drug these days. 5% yield, though, and Glaxo actually has one of the better patent cliffs, meaning smaller patent cliffs in the industry. So it also makes fiber-choice wafers. and degree deodorant, which I use both of. Fiber choice wafers?

Yeah, inulin, it's a ground-up acacia tree. Yummy. I have no idea with that. Is there anybody still out there? Steve, question? Is there anything pharmaceutical companies can do to insulate them from the patent expiration stuff that comes on? I know a lot of the statin drugs they...

Yes, that's what the deodorant is for. That was a big question. That was a pretty sharp question. Yeah, that is a very big question, Steve. I'm on Crestor, by the way. They can either buy competitors, and hopefully they don't overpay, or that they can shrink gracefully or they can just try to double down on their own research efforts. But that's going to be the deciding question.

Does that work? That sounds great to me. Joe Maker, your stock this week? Goldman Sachs. I own it. It's a recommendation and inside value. I think it has a lot of upside. And I think that the Greek crisis kind of fading into the rear view really speaks to how we are not actually falling off a cliff in the financial markets. I think you're going to see the premium people are willing to put on Goldman and its earnings pop over the next couple years as M&A activity picks up. people relax about where stocks are going and has a lot of upside. I mean, you're swimming with sharks

with it, but I'm going to swim with the biggest shark in the pool. Steve? If you had explained to someone in an elevator what Goldman Sachs did without using the phrase investment bank, how would you do it? They help investors allocate capital. Okay. So they help companies go public. That's a big thing for them. They help companies make acquisitions and they provide funding for folks. Yeah. And they also do a lot of asset management. So they run mutual funds and the like as well. So, Steve, I'm going to put you on the spot. We got Goldman Sachs. We got Glaxo. We've got BJ's restaurants. You're an investor. You're certainly a more active investor than I am.

I would think Goldman Sachs. I mean, I don't know a ton about them. That's what makes me nervous about Goldman Sachs. It's hard to explain or understand what they physically do all day. But I know they do a lot of different stuff, and it sounds like a promising field right now. All right. So in the two minutes we have left. Ron Gross, we haven't done this in a while. What is something you are working on? You're running million dollar portfolio. Something you're working on in the next week or two. Well, I also run our deep value service here. And so we're building out that portfolio right now. We started from scratch, and we're slowly adding stocks to the portfolio. And that is going to be a big focus of rolling out my next stock

in the hopefully the coming week or two. Just on that note, what separates deep value from just straight up value? Is it just simply a metric of how beaten down a stock is? Is it a valuation? That's a good way to think of it. I've heard Joe refer to it as dirty value. It's stocks that are really, really cheap. And there's usually a reason for that. And our job is to analyze to see how significant that reason is. Just from a branding standpoint, I think I like dirty value better. But that may just be how my mind works. James, something you're working on? Chris, with low checking account yields and things like that, a lot of people might be interested in capturing yields from dividend stocks without a lot of the risk. And that's where things called options callers can help. But I'm researching potential

options collars for income investor picks. Okay. Joe Maker, what's something you're working on in Motley Fool inside value? Oh, my bachelor parties this weekend, so I'm not expecting to be very productive in the next few days. Is that why your brother is in town? Ben? Absolutely. Absolutely. Joe's brother Ben Maker sitting in on the taping this week. Yes. So I guess what I'll be working on in the latter part of next week. It's the hangover?

Yeah, I'm trying to whittle down our scorecard a little bit. Stocks have come up a good bit, and there's some marginal stocks out there that I've recommended before that we're kind of coasting up to near fair value, and I think I'll probably just be taking profits on those and rolling them into opportunities. I'm more excited about it. Just in the 30 seconds we have left, what is planned for your bachelor party? Do you know? I don't actually know. Tim Hanson from Mali Full Asset Management planned the whole thing, so I'm just showing up, and we'll see what happens.

All right, drop us an email, folks. Radio at Fool.com. We want to know your best bachelor party or bachelorette party story. Whether you were there, whether it happened to you, radio at fool.com, drop us an email. We'll see how it compares to whatever is in store for Joe Maker. Joe Mager, James Early, Ron Gross. Guys, thanks for being here. Thanks for our guest this week.

David Wolman, for video highlights. You can go to FoolTV.com. That's it for this edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.