Motley Fool Money - Motley Fool Money: 03.11.2011

Episode Date: March 11, 2011

On this week's show, we talk about the economic implications of the earthquake in Japan. Seth Jayson explains why he thinks Netflix has a Facebook-sized problem. James Early explains why Warren Buffett is the anti-Starbucks. And Ron Gross gives his take on a Twitter-based hedge fund. All that plus ESPN columnist Chad Millman talks about the business of sports gambling. 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 Ron Gross. Guys, good to see you. Good to see you, Chris. We've got the latest from Starbucks, Microsoft, Facebook, and more. We'll talk about the parallels between investing and gambling with ESPN sports gambling columnist Chad Millman, plus, as always, a look at the stocks on our radar.

But we begin with the disaster in Japan. The largest earthquake on record to hit Japan has left untold damage, both in terms of the human toll and property damage. Ron Gross, this is a show about business, and I really can't put this any more eloquently than CNBC's Carl Kintanilla did on Twitter when he wrote, people seem to think talking about the economic impact of the earthquake is crass. It may, in fact, be what affects human lives the most? What are your thoughts when you look at this story? Yeah, well, certainly our hearts go out to the people of Japan, but when it comes from a business perspective, it's kind of four things I'm thinking through. One is that the Japanese economy was

already in a very fragile state. So this is very unfortunate. The timing is very poor. Interest rates are already at zero over there. The only thing the government can really do, is inject capital, which will probably increase their already high debt levels. Very unfortunate. Second, property damage, the insurance implications will be very important. Third, the nuclear power plants and some oil refineries have been shut down. That will have implications. And finally, I've been reading some interesting theories that this will actually be a little mini stimulus package for the U.S. because the flight to quality of investors will be buying our treasuries, which will force down interest rates, and actually will,

will be a little bit of a quantitative easing for us. So that's what I'm looking at. James Early? Yeah, I've just got six points of my own. Yeah, I always said the biggest negative is simply that, you know, this comes after 20 years of public stimulus spending for Japan. So they're already depleted, but now they're going to have to go and do a bunch more government spending.

But one positive, I'll say, is my colleague, Seth Jason and I were discussing before the show, and colleague probably more like colleague and then some, although that sounds kind of impure. Seth and I were talking about it is, Japan is really built like a brick crapp house, as To paraphrase, something my dad would say. Crap House, in the most positive terms. Oh, yeah, very, very durable. Well engineered.

And if you see some of the video from inside these buildings, what's striking is that, you know, furniture and the interior pieces are falling down and things are going all over the place, but the buildings themselves are staying up. And if it weren't for good investment along those lines and high standards, you know, this would be a much bigger tragedy. All right. Let's move over to the big macro on Friday. Department released the latest retail sales numbers. Seth, sales in February rose 1%. It's the eighth

straight month sales have increased. What do you think? Oh, but the economists were looking for 1.2%, Chris, come on. Actually, this is a, I thought this was a pretty good report, more because of what happened in January. We always talk about the current month when we do this, but the current month, the advanced look is usually revised, sometimes a lot. So if you look back to the prior month, you get a better idea. In the January sales were revised up. January were supposedly kind of soft at 0.3% up to 0.7%. That's now a better number.

What's interesting if you look a little bit at the details here, as I've done a few times on the show, is you can find the segments of the economy where people are spending more money other than just because gas prices are going up. And once again, that is in building materials, garden centers, that kind of thing, clothing stores and accessory stores, even sporting goods stores,

but non-store retailers, the Amazon's, those kind of outfits, year over year, the growth rate there is much higher than almost anywhere else. Ron? Yeah, I've been one of those investors who's been very conservative thinking through retailers. I've almost been going the other way of thinking we could dip back into some real weak times. If this continues for another month, two, three more months, I might have to revisit it, which we know then will completely make it wrong. You might have to buy some of those stocks I've been recommending that have just kept going on.

Exactly. You're listening to Motley Fool Money. We're talking through some of the big headlines of the week. Guys, this week is the 40th anniversary of Starbucks opening its first store. So we've got a couple of stories around Starbucks. We'll start with the deal with Green Mountain Coffee Roasters that will have Starbucks coffee and Tazzo tea sold in single serve cups for Green Mountain's Currig machine. Ron Gross, shares of Starbucks were up on the news. Shares of Green Mountain were up huge on the news.

Big, big day for them. Is the deal that much better for them than it is for Starbucks? Well, it's a good deal, but what we saw here mostly was what we call short covering. So for quite some time, Green Mountain has been an unloved stock. A loved debt, unloved by people who care about valuation. Correct. And people didn't like it from a financial perspective. Rising inventories, receivables that were uncollected, growth through acquisition, leading

to negative cash flow. And investors were betting on the stock to go down by selling that stock short. When this deal came out, which was a pretty positive deal for Green Mountain, as well as for Starbucks, those investors had to rush into the market, buy their shares back to take the short position off, which led to a massive demand for the stock and a huge pop. So now that the stock has shot up another, I think it was like 40 percent or more, that one day, is now a good time to short the stock? You know what?

Nothing has changed. The company still has those problems that existed yesterday. This was a big news in the sense that it removes the Starbucks as a competitor and makes them a partner, but those other problems still exist. I'm going to give listeners the rare opportunity to learn something actually useful from my insanity. I love finding and being really critical of these kinds of companies and finding, and I find a fair share of really crummy ones. And I agree with the short thesis here. I never short these kind of stocks ever, just in caps, and like our little play online game. I do not do it with real money because it doesn't matter if you're.

you're right, you can get completely creamed, and I would much rather have money than be right something like that. Green Mountain is actually one of the top ten performing stocks of the past decade, right? Well, yeah, because when you start at almost zero, you get some pretty big growth numbers. Now, in keeping with the 40th anniversary, Starbucks CEO Howard Schultz gave a couple of interviews this week. He told the Wall Street Journal that he's looking to beef up Starbucks consumer products business so that over time it will rival the retail business. And here There was the quote that had this Starbucks shareholder quaking in his boots. Schultz said, it's very possible that Starbucks as a corporation will be marketing and selling multiple products that don't have coffee in them or coffee associated with them.

Haven't we seen that movie before, Seth? It's a good idea now. It was about five years ago. Literally the movie Akela and the B. This is horrible. Starbucks produced. This is what Starbucks did last time Schultz was CEO and chair and they were growing and everyone was all excited. And what did they think they could sell furniture?

and they thought they could do anything. A founder-owner like Howard Schultz might be genius at some things, but having a good concept of what the limits of his company's personality are doesn't seem to be one of them. And so they blew this before, they grew too much, they tried to do these other things,

none of it worked out. Now I think he's grasping for growth again. Anything that doesn't have to do with coffee, I think Starbucks should just stay away from. But hey, when you're Howard Schultz, you could just hire another CEO as a sacrificial lamb and blame him if something falls through. But are they okay as long as it's edible or drinkable?

Because they've expanded, obviously, into the tea market. Personally, I love the ice cream. If it's beverage-y, I think you're okay if we were throwing around ideas earlier. I think producer MacGrew said pasta, make me laugh. You're not buying some Starbucks pasta? I hope they do that because I would love the chance to laugh at them some more. Guys, remember last year when Warren Buffett bought the Burlington Northern Railroad? Yes, we do, Chris.

Well, in just over... It was a rhetorical question. It was a rhetorical, but Ron, I always appreciate your health. He's paying attention. He wants you to know. In just over a year of ownership, Berkshire Hathaway has received $2.5 billion in dividends. And James Early, as the resident dividend guy, you've got to be thrilled about that. Well, it is pretty cool.

And I'm more thrilled, actually, Chris, that Warren Buffett is kind of doing the anti-Starbucks move right here. He's probably the only person who runs a conglomerate the right way, which is to exploit capital allocation synergies and not operating synergies. In other words, Burlington had such a good year that doesn't need all. capital that it has. So Buffett is taking this money for himself to redeploy, presumably through acquisitions. Now, that would normally be a very arrogant thing to do if it were any other CEO, because most CEOs tend to squander their money on dumb growth projects. But when you're the best investor ever, it probably does make sense. Seth? Well, one of the things that I noticed in the press coverage of this is that they tried to make it seem like it was somehow nefarious,

that Buffett was getting more dividends out of this railroad than it was paying shareholders before. I don't think there's anything nefarious about it. And it's also not a surprise because if you Warren Buffett and you own the whole thing, that's what you wanted for. You want that flow of money. And actually, this was an unusual buy for Buffett considering his past, which was avoiding companies that need heavy capital spending. Railroads need a pretty good degree of capital spending to keep them running. However, he said this is a bet on the American economy. It's also, by the way, a bet on rising fuel prices because railroads become much more competitive when gas and diesel fuel are expensive.

Ron, our colleague here at the Motley Fool, Charlie Travers, wrote an article and said on our Marketfulery Daily podcast that among the acquisitions Buffett should consider, because he had that great line in his shareholder letter about how the elephant gun is reloaded and my trigger finger is itchy. It's a great pick-up line, too. Charlie listed companies like General Mills, Kellogg's, Heinz. I'm curious what you think of those as potential acquisition targets. I think they make sense knowing what we know about Buffett. He loves those consumer-branded

companies, whether it's Coke or Gillette. So it makes perfect sense, companies that, again, don't require too much capital, but he has expressed the desire to kind of move out of the box a little bit lately, as Seth mentioned. So strong consumer products companies with great management teams, they fit into his wheelhouse. Coming up, Facebook is testing the waters in the movie rental business. So how scared should Netflix be? Stick around. This is Motley Full-Money. Welcome back to Motley Full Money. Chris Hill here in the studio with Seth Jason, James Early, and Ron Gross.

Guys, it is our 100th episode of Motley Full Money. I'm thrilled to be here with you, and we actually have a special guest here in the studio with us. Dr. Cam Jason, Seth's father. Dr. Jason, welcome. Thank you, Chris. Good to have you. All right, we're going to get you in the conversation in just a minute, but first we've got to go through a few more headlines of the week. This week, Warner Brothers became the first Hollywood studio to allow Facebook users to rent

a digital movie through Facebook. Users can rent The Dark Night using Facebook credits, and Facebook takes a cut. Shares of Netflix dropped on the news, but a company executive said Netflix doesn't view this as a greater threat than other rivals. Seth, what do you think of Netflix's newest competitor? They ought to, but notice he hedged as a greater threat than other rivals. I've made the point on the show a few times that I think Netflix as costs are going to go up vastly in the future and the stock may really get killed as a result.

I think they ought to worry. As much as I love to make fun of Facebook and hate on the valuations being given, Facebook has so many people, they probably know more about what movies people like than Netflix does, and that's often tout as one of Netflix's great strengths. The other thing that Facebook isn't doing now, they're not offering, this is a one-off thing, they're not offering a subscription plan, and you have to watch the movie on your computer. Most people don't want to do that. However, Facebook has been very good about getting specific applications out onto different platforms,

iPhone, iPad, Windows phone, all of these. It would be nothing for them to go ahead, buy the bandwidth to deliver this stuff, have people develop the applications. They probably know more than they need to about what movies and shows people like. They've got tons of money to do these deals. The Russians and Goldman Sachs, bagholders, they're throwing money at Facebook. They could be a real threat here. And I think the folks at Netflix are a lot more afraid than they're letting me.

on. Good use of the term bagholders. James Early, what do you think? And just to back up, though, for clarity at present, Facebook has a library of exactly one movie. Is that a really good movie? Yeah. It's a really, no, but that's the thing.

These are just, as you know, you just go out to the studios. You bring the bags of money with the dollar sign on the side and you say, how many movies can I get for this? Procter & Gamble has pushed yet another brand across the $1 billion dollar line. Air freshener Fabriz. Yes, Fabriz is now the 24th P&G brand to reach one. billion in annual sales. James Early, a billion in sales for air freshener? The story is charming and is sort of a simple sort of way, Chris. I mean, it's just a popular

product. I mean, who knew that air freshener wasn't a commodity? It would be so popular, especially in this market. This is a tough market for consumer products. So, hey, good for Fribes. Dr. Jason, you've had some experience with Fribes, haven't you? I have. I have a 1947 Plymouth antique car, and a squirrel got into it last. summer and chewed up to inside and did its business all over the back seat. And of course, it left its odor with the business in the back seat, so it wasn't a very pleasant experience to take a ride downtown in the 47. I live in a small town in northern Minnesota, and I went to the local hardware store, and the lady there said, well, try this Fabriz stuff. Seems to work

pretty good. So I went home, and I thought, well, probably can't hurt. It's a, and I'm a I thought it was an air freshener and it would just mask the odor and then I'd have, you know, kind of fruity smelling squirrel pee, you know. And so I sprayed that all over the seat just like the directions, as I said, and I closed the doors and I came back a week later and opened the doors and no squirrel urine smell at all. And it smelled like a new car and thought, ah, this has got to wear off. So I closed it up and came back a month later and was gone. Last week I went in there.

Now, this is over a year later. Still gone. Stuff works like a charm. And that's why it sells a bill. It actually works. And you wouldn't think that there's still a market for this. I mean, I don't have any squirrel pee in my house, but we have a baby, and that might be worse. And there's a bottle of Fabriz that permanently sits next to the diaper bin.

Do you think that that's maybe an untapped market for Procter and Gamble to hit the, I don't know, the... Wait, don't throw those underpants out. No, I'm thinking like the hunters and the woodsmen out there. Like, I don't know, like to hit the squirrel pea market. I'm still reeling from the phrase fruity-smelling squirrel pee. I was wondering, for a while I was wondering what business the squirrel was conducting in my dad's car. Chris, you misunderstand hunters. They like pee smell. That's important for hunting. Oh, that's right. That's right, because it attracts the animals, doesn't it? Correct.

All right. All right. So, okay. So, no. Fabriz would sell to the hunters. All right, all right. Not unless they made febrees that smelled like deer pee. flavor. You know what? I think Procter & Gamble needs to bring you in on a consult. All right. Moving on, Microsoft's Connect has become the fastest selling consumer device in history.

Guinness World's records confirmed that Connect sales, $8 million in its first 60 days, is more than both the iPhone and the iPad after their launches. Seth Jason, Microsoft Defender. You've got to be proud. We have one of these at my house. This surprised me a little bit. What's more surprising to me is that the press makes a little of this, because this is obviously a very popular device, and it just shows you the extent to which Microsoft has an uphill battle,

selling even a product that people like and the press is going to be all over the iPad too instead, because it's the same thing as the iPad one, but it's from Apple. So I actually, as a game player, I'm not all that excited about the connect. It works pretty well for video conferencing. But what this is for Microsoft as an opportunity is, it's a chance to get more people involved in the ecosystem. And once you've got them kind of locked in there, you make these long-term customers who, keep spending money within that ecosystem, and Connect is doing a really good job of bringing people in. As I mentioned, Ron, this was confirmed by Guinness World Records. Do you have a favorite

Guinness World Record? My son does. He's fascinated by the really long fingernail picture. Oh, that's creepy. So in honor of him, I'll go with that one. James? I like the most cigarettes in one mouth. Have you seen those pictures? Like 60 or 80s? I mean, there are a lot of records, but I find that the pictures of the records, that's what's really most I have to go with the cigarette and the mouth thing because you could imagine yourself as a kid you could aspire to that whereas the long fingernail thing

with the requirement you're doing a kid there's no way you're going to do it. How are you going to pick your nose? For our producer, Matt Greer, it's the two fat guys. It's the twins. It's the twins on the motorcycle. Have you ever seen the fattest twins in the world? Am I right, Mac? Yeah, we're getting nods for that. Behind the glass. There were little motorcycle. No, they were not. They were Fijian. They looked little.

Yeah, they were in Polynesia, right? I don't know where they were, but it was just... I'm pretty sure. Apparently nowadays... Nowadays, yeah, if you're large twin brothers, you at some point, you have to sit on motorcycles. A study released last year found that Twitter could predict swings in the market with 87% accuracy. Now a hedge fund in the UK is putting that study into action. Ron, you're a former hedge fund guy.

What do you think? Sorry, Chris. I just threw up in my mouth just a little bit. So they're going to use a financial model here to mine Twitter for states of emotional calmness. Based on that, they believe they can predict where the Dow Jones Industrial Average will go. Sounds like it can't miss. You should tweet that you just threw in your mouth. But the fascinating aspect of this is that they actually have $40 million that are going to attack this theory.

So there are people out there that think it has merit. I am very dubious about these kinds of things. Wow. And I wouldn't touch it with a 10-football. That money is going to go bye-b-bye. All right. Ron Gross, James Early, Seth Jason. Guys, we'll see you later in the show.

Coming up, ESPN sports gambling columnist joins me to talk about the parallels between investing in gambling and the NCAA basketball tournament. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Chad Millman is a senior deputy editor at ESPN The Magazine and the author of several books, including The Odds, One Season, Three Gamblers, and the Death of Their Las Vegas. He has a daily blog at ESPN.com where he explores the culture, of sports gambling, and he joins me now. Chad, welcome.

How you doing? I'm doing well. How are you doing? I feel great. So I'll be honest. I love the Super Bowl, and I love the World Series, but by a country mile, my favorite sporting event in America is the NCAA basketball tournament. As it should be. So from a sports gambling perspective, how much money is bet on March Madness, and how does that compare to other sporting events?

Well, it compares favorably to every sporting event except for the Super Bowl. March Madness, by far the handle in Nevada, and that's the handle is the total amount bet, and in Nevada, which is the only place where you can actually legally make bets on this event in the United States, so that's the only real way to gauge its popularity. But in Nevada, the total handle on March Madness usually is in the 70 to 80 million range. the only thing that comes close to that, or actually exceeds that, is the Super Bowl, which is usually in the 80 to 90 range. I think this year it was about 85 or 86 million, and there's been a couple times where, you know, the March Madness peaked and Super Bowl was in a bit of a decline, so the totals have been close to each other, but those are generally one and two. You're listening to Motley Fool Money. Our guest is Chad Millman, Senior Deputy Editor at ESPN the Magazine.

Chad, you recently blogged at ESPN.com. The headline was why George Mason is a dangerous team. Please explain. Well, George Mason is one of those teams, and I was quickly proven wrong. But George Mason is one of those teams that is what's called the Wise Guy favorite. Wise guys are the guys. They're not soprano guys. That's the term of art for professional sports betters,

and that's what they've long been known as in Las Vegas. And so the wise guys loved George Mason throughout this year because they were constantly beating the spread. Wise guys were making money with George Mason. And the reason they liked them was because they were doing so well defensively. And so it's just much easier for teams to cover the spread if you keep teams from scoring points. And so the reasons why wise guys end up liking teams is often far different than the reasons why fans like teams. and the stats that people who are not professional gamblers pay attention to are much different than the stats that professional gamblers are paying attention to.

So not that we're looking to give specific betting advice for the NCAA basketball tournament, but if you are looking for teams to cover the spread, you're going to be looking for some defensive-minded teams. You want teams that, you know, the stat they look at is defensive field-go percentage allowed, obviously because the teams that can't score can't cover. You want teams that actually had strong road records. And the reason that you are looking at those records specifically is because every game in the NCAA tournament is on the road. Okay, so while it may not have sounded like it to this point, this actually is a show about business and investing.

So let me bring in the investing side. To what extent do you think there are parallels between successful investors and successful gamblers? I think they're incredibly extensive. I think that the language I hear wise guys use is no different than a language I hear my friends who work on Wall Street use. They talk about money management. They talk about value investing. They talk about ROI. I mean, all these things are, they're betting into markets. And a lot of them will tell you that the marketplace in sports betting is actually much more open and much more clear. than the markets and Wall Street, that you know more about the teams that you're betting on, than you know about the companies you're investing in. And what they are looking for is, like I said before, mistakes in the point spread, and that is where they find the value. And that's when they decide to buy into a team or to invest in a team.

And so the language that I hear constantly battered around is the same language I hear from investors. And one of the reasons I'm getting a little long-winded here, But one of the reasons is that a lot of the guys who now bet on sports are guys who got tired of working on Wall Street. Over the last 10 years, 20 years, there's been a sea change. And it's no longer the guy chomping in a cigar and wearing a fedora. It's guys who were in management programs at the big banks. And it's guys who were actuaries. I know guys who got their MBAs in Northwestern doing this.

And so guys who have law degrees from Northwestern doing this. And so, and Michigan doing this. And it's like they were in the business world and they saw a better opportunity to make money betting on sports. So let me go back to something you said and make sure I understood your meaning. Despite all of the increased transparency on Wall Street over the past decade, are you saying that Wall Street is still far less transparent than the world of sports betting? That's what I would argue for sure. And I think a lot of the guys who do it would argue that as well.

And I don't think, I think bigger minds and people with deeper pockets than me would argue the same thing. A couple years ago, Mark Cuban was saying the same exact thing and that he was going to try to start a hedge fund to make bets on sports. You could create, you know, a lot of these guys these days use algorithms to find the best possible point spread on a particular game and to find, you know, even the smallest discrepancies in the point spread. Cuban wanted to create an algorithm that could find the smallest. discrepancies in point spreads between what his experts say and what the bookmakers are posting and then make massive amounts of bets as quickly as possible before those lines change. If you go to London right now, there's a fund, the Galileo Fund, that is actually doing what Cuban talked about because, you know, in England, it's actually legal to bet on sports.

It's a huge global industry outside of the United States. It's legal. So they have already created a hedge fund that bets on sports because there is more transparency and who's injured and what players are good and what teams succeed in which situation. So, you know, you're not hiding behind any kind of filings or anything like that. There's, everything is out in the open. What is the biggest misconception about the business of sports gambling? Oh, I think we're talking about it.

I think people, and this is changing a lot. I mean, I think the perception of gambling has changed dramatically in, during the past generation. I think the influence, the fact that there are Native American casinos and Riverboat casinos and land-based casinos in nearly every state, that has, that's an increase of, you know, 40, close to 40 states in the past 20 years. The fact that internet gaming has become so much more popular and is in every home, so now people feel like there's less of a stigma associated with gambling, coupled with the increased exposure to it, you know, in every single neighborhood. So people are just more comfortable with the idea. And I think because of that, the type of people who are doing this now, I was just at the Sports and Analytics Conference at MIT this past week or last week. And I did a panel on sports gambling.

And this was a room full of MIT students and people in the industry who use analytics in order to increase their ability to make smarter bets. And I had students coming up to me after, saying that they're thinking about leaving school when they're done and not going to work for a hedge fund, but at least taking a year or two to try to find a way to incorporate their philosophies on betting on sports and the analysis they've done and make a living doing that instead because they like that marketplace better. So it's just a much more sort of interesting environment for them. And, you know, I think that it's the perception that has changed, not so much the misconceptions.

exceptions. You're listening to Motley Full Money. Our guest is Chad Milman from ESPN and the author of The Odds, one season, three gamblers, and the death of their Las Vegas. Before we move on to buy-seller hold, the culture of sports gambling, this is something you've written about for a long time. In your years writing about this, what has been the biggest surprise to you? And that can be a singular event or that can be a trend. It can be anything. But what has really surprised you the most? I've always surprised by how little people understand what happens with a point spread in particular. And this is the whole reason why I even started the blog about three years ago is there was a New York Giants, Philadelphia Eagles football game. It was at a time where the Giants were playing great, the Eagles were playing

horribly. And they were playing the game in Philadelphia. And when the game opened, when the points spread open, the Eagles were favored by four points. And it didn't make any sense to me. The perception of that game had to be that the Giants were a better team and that everybody was going to bet on the Giants and they were going to think, wow, I'm getting four points on the Giants. I should make this bet, and it's going to be great. And I thought the bookmakers were going to get killed. And so I called the bookmaker that I know. And I said, what was the thinking behind this line? And he ran me through the logic of this line. You know, this is what we're thinking about with the stats. This game is being played in Philadelphia. This is what happened the last time these two

teams played. This is why the Eagles have lost. This is why the Giants have won. There were about 18 factors that went into this point spread beyond one team is playing well, one team is playing badly. And I just thought that was fascinating. And it never ceases to be fascinating to me. And the emails I get from people are, wow, I never thought of the line being something that has so many factors going into it. And so I'm always sort of loving the science of the point spreads for a couple of reasons. One, it's just as fascinating me because they are so important to, you know, this black market economy that exists in the United States. But also, they're very important to the way fans watch these games. The prison through which all of sports is watched is on the basis of

who's the favorite and who's the underdog. And whether you gamble or you don't, you're thinking about the game from that perspective. It's what makes a certain team winning that much more impressive because they're beating the team that was favored by a certain amount of points. And so that psychology of the gambling is always what fascinates me. And I think that's the idea behind that is what people end up liking to hear and read about. All right, Chad, time to wrap up with a round of buy-seller hold. I'm very nervous for this part. No, no, no. This is the even more fun Park. CBS has fired him, but he continues to generate tremendous attention, buy-seller hold, Charlie Sheen.

I'm going to buy. Tell me why. Because I think someone's going to hire him, and I think he's going to make somebody a lot of money, and I think that there's clearly a car crash interest in everything he's doing, and the next thing he does will be the next biggest thing he does. And I think that if you want to get on board, you get on board now for what he's doing next, and then get off after that. Buy seller hold, the business of Groupon.

I don't feel like I know enough about it to do anything, but hold on to it. And finally, this is still happening. Buy seller hold, the likelihood that 10 years from now, people will still be doing the wave at sporting events. That is funny, but I'm going to buy it because I don't think that's ever going away, as much as we like it to. Well, we can always hope. Chad Milman is a senior deputy editor at ESPN the magazine and the author of The Odds.

One season, three gamblers, and the death of their Las Vegas. Check him out at ESPN.com. He blogs every day on the culture of sports gambling. Chad, thanks so much for being here. Thanks for having me. It was a good show. You got no when to hold up, no when to fold up, no when to walk away, and no when to run. You never count your money. Coming up, we'll give you a look at the stocks on our radar.

This is Motley Fool Money. As always, people on the program may have interest in the stocks they talk about. 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 analyst, Seth Jason, James Early and Ron Gross. It is our 100th episode of Motley Full Money and our special in-studio guests, Dr. Cam Jason, Seth's father. Dr. Jason, again, it's so great to have you here.

Thanks. Great to be here. We have a couple of minutes, and you're a dentist, and just curious if you have, like, a couple of dental tips, because let's face it, we all can take better care of our teeth, particularly Ron. So if you could share just like one or two dental tips for us. Well, Ron, get some professional care twice a year, get your teeth cleaned, and make sure that you get one of these new sonic-powered toothbrushes. They do a wonderful job. Now, we were talking during the break about how all these toothpaste, it seems, now have whitening in them.

And you said, when you look at the ingredients, they really don't. How is that possible? Well, I think that the companies get by with calling some of these toothpaste whitening toothpaste because they have abrasives in them. They have pumice and other abrasives, where they really don't have the peroxides that are used in the dental offices and in products. like white strips. So you don't want to just grab something that says, Wiener, you want to flip it over, look

at the ingredients, and you're looking for peroxide. Yeah, you're looking basically for carbamide peroxide is the one that's used the most often. Yeah. All right, and before we get to stocks on our radar, or James, did you want to show that? I was just going to ask if you don't mind. Are you pro or con fluoride in the water? I know it's getting a lot

of heat, you know, from... I'm pro. Are people back, are like... Are people in this country back on the whole communist plot fluoride in the water thing again? Really? This county where we live in, there's some kind of a thing that I need extra. If you have too much floyd in the water, the worst that will happen is it'll cause discoloration of the enamel of the forming tooth.

Keep in mind that by the time you're eight years old, all crowns enamel, including your wisdom teeth, are formed even though the teeth aren't erupted yet. But it'll cut down decay greater than 50% statistically, in many, many studies done over many, many years. So, James, you're fine. Your teeth are fine, man. Relax. It's not rotting my pancreas or something like that. No. No. You can get Fiji water if you're worried about it. Exactly.

I feel good about myself. A wrinkle to stocks on our radar this week. We'll go down the line. You guys will give the stock that it's on your radar. And then I'll be going to Dr. Jason. And he'll pick the stock that he finds most compelling. So a little pressure there. And yes, we will factor in the potential nepotism because he is his father. Ron Gross, we'll start with you. Well, Doctor, do you like chicken? I do. Okay, that's wonderful.

I've been looking at a Sanderson Farms, ticker symbol SAFM, the fourth largest poultry producer in the U.S. Stocks been getting smacked around largely because corn prices have risen quite a bit lately. And that's the main feed product for chickens. I think if that continues, which you probably will, the stock will continue to go lower. And at that point, it becomes a really strong value purchase. So I'm watching the closely really well-run company, though. Very strong management team.

And the ticker symbol one more time? S-A-F-M. James Early? Well, Dr. Jason seems like the kind of guy who would like coffins, too. So I'm going to the death care industry. What? Why would you say that? Who wouldn't like coffin?

Everyone needs a coffin at some point. Or that's cremation, earn. It's just practical. So Hylenbrand is my stock in the radar. This is a recommendation of my income investor, excuse me. They make coffins. They're sort of the premium coffin brand. Michael Jackson was buried in a Hillen brand coffin.

They also make cremation urns, but this business is kind of a slow-growing business. So they bought a sort of a manufacturing process company recently. It's hard to describe it. I was turned off by that originally, but it seems to be playing out a little bit better than they expected it. So you could have this steady coffin business with the addition of maybe a little bit faster growth, too. James, what is the ticker symbol? H-I, Chris. H-I. Okay.

Seth Jason. Oh, these guys are just dead. First of all, Ron's is so cyclical. You've got to be able to predict the price of chicken feed to make money on a chicken stock. Come on. Coughins, snore. Here's where you got. You got teenagers blowing money at the mall on cheap clothes. I don't yet, but I will in a few years.

Got to go back to the mall. Aeropostal, creamed after earnings. They weren't really that bad. The growth isn't as strong as it has been. There's some price pressure because of cotton prices. Listen, Aeropostal is one of the best run clothing retailers around. They run small stores, so changes in revenue don't hurt them as badly as what a competitor. like Abercrombie and Fitch or somebody else because they have smaller cost to cover because the stores are smaller.

They know how to get free cash flow. You buy it when it's getting creamed, which is now down to, you know, in the low 20s. And I think you do well because the teenagers are going to come back and buy these clothes. And the ticker symbol? A-R-O. I know that when I'm dropping my daughter off at junior high, there's a lot of kids wearing the Aero Pustle. Ron, you have one in junior high. I do have one. Yeah, I think it is one of the popular brands, without a doubt.

All right, Dr. Jason, the stocks one more time. Sanderson Farms, Hillenbrand, and Arrow Postel. Which one did you find most compelling as an investor? Well, you know, nepotism, I got to put that aside. I love you, Seth, but, you know, if push comes to shove in the family, you know, the kids can go bare chest at junior high, except for the girls. I like the chicken. Yes.

Ron, I like the chicken. I love dentists. Yeah, well, we'll see who's getting a premium. Hillenbrandkopfing some day. I hope you like that all refrigerator crate. So I have to bring in James' stock, Hillenbrand. James didn't make a compelling argument. Well, he made a pretty good argument, but he missed the key point of that there's going to be

a great demand for burial devices because of that baby boomer group coming up. Oh, so it's a presentation. Presentation, too. He missed on the presentation. It's actually a very good point. Jim, I missed in the plating. With all due respect, I say that, Jim. All right, Dr. Cam, Jason, thanks so much for being our special studio guest this week.

Ron Gross, James Early, Seth Jason, guys, thanks so much for being. Happy 100th show. Our 100th show. Will you be back here for our 200th? Let's shoot for that. Absolutely. Let's shoot for a double. All right.

Thanks to our special guest this week. Chad Millman, senior deputy editor at ESPN, the magazine. You can check out his daily blog on sports gambling at. ESPN.com. That's it for this edition of Motley Full Money. Our engineer is Steve Broido. Our producer is Mack Greer. I'm Chris Hill. Thanks for listening, and we'll see you next week.