Motley Fool Money - Motley Fool Money: 04.25.2014

Episode Date: April 25, 2014

Our analysts discuss earnings news from Apple, Amazon, Facebook, Ford, McDonald's, Netflix, and Starbucks.  And CNBC host Becky Quick previews the Berkshire Hathaway annual meeting. Learn more about your ad choices. Visit megaphone.fm/adchoices

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app, which makes it so much easier to stay on track. And you can get unlimited expert help at no extra cost, even on nights and weekends during tax season. Visit turbotax.com to get matched with an expert today, only available with TurboTax full service experts. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money Radio Show. It's the Motley Fool Money Radio show. I'm Chris Hill and joining me in studio this week from Motley Fool Pro, Jeff Fisher from Motleypool Income Investor James Early and for a million dollar portfolio, Ron Gross. Good to see you, gents. How you see you, Chris? It is an all-earning show, so I hope you've done your homework. We have got the latest results from restaurants, technology, automotive, and more. Becky Quick from CNBC is our guest this week. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the biggest public company of all, and that is Apple.

The biggest company in the public market is getting a little bigger this week, James. Shares of Apple up more than 8 percent after second quarter profit came in higher than expected. They also increased their share buyback plan by $30 billion. And almost as a love letter to you, James, they raised their dividend. Yeah, it warms my heart, Chris. And this is, I mean, for perspective, we have to calm down first because Apple shares are still kind of in the valuation doldrums, but that's exactly why the increased share buyback is so exciting. This is the kind of time you want to see companies like Apple buying back their shares. Ron, they also announced, and this got a lot of attention, not just a stock split, but a seven-for-one stock split.

You do not see that very often. You don't see that very often. Why the seven-for-one? Probably to bring the price down to the high 70 range, which is kind of the sweet spot for where Dow Jones industrial stocks trade. Perhaps they're looking for an entrance into that index. But this, for perspective here, the Dow Jones Industrial average is not the thinking man's index. It's what's called the price weighted in it, meaning if you have a $100 stock and a, let's see, a dollar stock, your index is $50. So it's completely arbitrary just based literally on the stock price. Why do you think, I mean, if that's true, that they did this.

I feel like that was a dig at me somehow. Well, I didn't do it at all. No, no, it's just a random explanation. I feel, I feel attacked. Imaginary listener out there who maybe was just wondering. Put aside the personal attack that changed. I totally say, but I think he's right. I think they are trying to bring their stock price down.

There is some psychology research in the finance literature showing that $80 is some kind of an optimal stock price just in like people's heads. But I mean, a split in general is sort of an arbitrary value neutral. action, I think we would all agree. So I completely support you, Ron. Just know that. I just want you to know that. Jeff, am I the only one surprised that that may be one of the main reasons they split their stock like that? Because to James' point, the Dow Jones Industrial Average, I mean, it's nice and all, but it just seems sort of odd if that's why they did it. I think there may be more to it than just the Dow Jones. I think, as James just said,

they want more people to feel they can buy around a lot of shares or buy more shares than just one or two, a $550 stock, which is about where they were at, that's intimidating to some small investors, to many small investors. It reminds me a MasterCard who recently split from $770 down to 77. They did a 10-for-one split. So whatever the reason, it's probably to drum up some interest, some new interest, some excitement, and go forward. Just to circle around to the business, just to end this. Good quarter, like all the capital allocation decisions, need to see innovation. We need to see new products, need to see growth, sound like a broken clock.

We say that every quarter, I think it's coming. They're hinting. I don't know what the next thing will be, whether it's a wearable or something with Apple TV, but we need to see that growth. What could Apple do that would excite you the most, Ron? Oh, I think a deal with a cable company, like was rumored earlier in the year with Comcast or something that would kind of change the TV and mobile. Who wears, oh, you're wearing watch, but I guess most people don't wear watches anymore, right?

Is that true? I need to quickly add, though, that they made $10 billion in free cash flow this quarter. If they made $40 billion a year in free cash flow, and that was it, just steady state, that's one of the best businesses in the world. What would you pay for that, though? No growth. No growth. I'd pay more than the stock price right now.

Stability. Amazon's first quarter profits and revenue both rose more than 20 percent, but guidance for the full fiscal year seemed to surprise some people, Ron, and that's why the stock got whacked at the end of the week. I also think there's a lot of fatigue here with giving Bezos kind of the green light to continue to spend and spend and not to worry about profits. For Fools, I think we take a longer term view and we think he's making a lot of the right moves to set things up for the future, but Wall Street tends to be more short-sighted and they're kind of getting sick of it. They

want to see profits. Earlier in the week, though, a lot of excitement around the deal Amazon announced with HBO to bring a lot of HBO programming to Amazon Prime. I believe that starts in late May. But for anyone who missed out on The Sopranos, The Wire, most of their shows are going to be available now. Good stuff, definitely. A shot across the bow for Netflix. But it's these things that cost a lot of money. Maybe that deal was about a billion dollars, I believe. And that, in conjunction with fulfillment and marketing and tech spending,

really takes a smack out of margins and Wall Street likes profits. Facebook grew its first quarter topline revenue by six. 72%. By all accounts, Jeff, this looked like a really rock-solid quarter for Facebook. But again, we see shares being sold off a little bit later in the week. What stood out to you in their quarter? Key factor, Chris, is Facebook needs to keep growing its user base, and the user base needs to stay as involved, as engaged in the site as they are right now, or even more so. And Facebook is doing that. They're executing on that. As long as they can keep doing that, they have great revenue and free cash flow up ahead. I think the results, there's nothing to complain about in the results whatsoever. I think

the whole market, though, especially so-called growth stocks, are just having a rough start to the year. That said, Facebook is one of the few that's up. As of today, it's still up 7% year-to-date, while the NASDAQ is down, Twitter is down 34%, Google is down 6%. So I wouldn't put too much weight in this short-term reaction. One of the big headlines for Facebook this week had nothing to do with the actual results. It was that their CFO, David Ebersman, has been around Facebook for about five years. He's leaving the company. We were talking earlier today.

I said, look, anytime the CFO leaves, I'm automatically curious as to why, because not that there's anything nefarious going on, but part of me thinks, well, gosh, if Facebook is in such great shape and this is a great company with a long runway ahead of it, why is he leaving? I agree, Chris. Anytime any CFO leaves, you really want to step back and try to find out why, because they know the financials better than anybody else. In this case, I think Mr. Iversman is leaving for legitimate reasons. He's been a CFO for more than 10 years at Facebook, five and a half years, CFO there.

And he says he wants to get back into the healthcare profession, which is where he began. And I assume is where his passion is. So he said he addressed it right up front in the conference call. He's leaving now because he thinks it's a good time to leave because Facebook is on such strong footing. Yeah, you've got to assume he's made some nice money. stewarding them through the IPO. Oh, I assume he's made a boatloader. So what I wouldn't be surprised to see, you're not going to see him show up as a CFO,

I don't think, for a healthcare company. You're going to see him either start or become CEO of a small healthcare company that he can be excited about and help grow and really, you know, be passionate about. Microsoft's third quarter profits came in north of $5.5 billion, but Ron, it is their push into cloud computing that is getting the headlines in part because new CEO, Scya Nadella, some people are looking at this as him really taking a hard turn away from the direction that longtime previous CEO, Steve Bomber, was headed in. Except for the fact that the Nokia deal did close this week as well.

Yes, there is that. There is that. But I think the street is really enamored with Nadella. He was on the conference call, which they loved to see. Balmer was really never in view of analysts or shareholders. The report was strong. Commercial was up 7 percent. was up 12%. Cloud, as you said, was really strong. So they didn't actually, they actually

lost, their net income was down 6%, but that was much better than people had thought. So the stock rallied on that news and also on the belief that perhaps under new leadership, Microsoft is going to turn the corner. You're a value guy of the four big tech stocks. We've just talked about Amazon, Apple, Facebook, Microsoft. Which one represents the best value proposition right now? I think Microsoft has about 20% upside left. I think Apple has more than that, probably, as long as they execute. So I would give it to Apple. Coming up, we've got burgers and we've got coffee. What more could you possibly want?

This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hale here in studio with Jeff Fisher, James Early, and Ron Gross. No one was loving McDonald's first quarter results. Profit margins were lower. And same store sales in the U.S., James, down almost 2%. does it even matter? I mean, McDonald's, it's not like the stock got whacked, so I'm just wondering if this is such a behemoth that so-so results are just fine. Well, McDonald's, this is sort of their now-wet moment, but the problem is that moment has been going on for like the past two or three years. The S&P has climbed a whole bunch, let's say, the past year,

and McDonald's stock had been flat. They've been refurbishing their stores, but the results just aren't coming in. I mean, they try to go healthy a little bit, but if you're a healthy eater, the last place you're thinking of going, to do is McDonald's. So it's a recommendation of my newsletter. I'll say that, but I think it's overvalued. You know, I think the question is at what point do we wonder about the concept? It's obviously

strong, but it's just like, you know, what's going on now? So the stock has been flat for a year, and you still think it's overvalued? I think it's overvalued. A little bit, not a lot. Last question on McDonald's, we talk about companies having pricing power. It seems as though McDonald's doesn't really try to execute pricing power with its customers. And maybe that doesn't matter because they clearly have it with their suppliers. Is that the case where it's like, well, we don't need to try and raise prices on the menu because we can push around our suppliers? Well, I mean, it's been great for them. That's why I love the stocks, you know, for a while, and it was originally a great performer, but I just, it's just you need more. Starbucks's second quarter results were

pretty good, Jeff. They were in line with expectations. Same store sales up 6%. But we've seen companies deliver really good results and the stock gets sold off. Starbucks up a little bit on this quarter, why do you think the stock isn't being punished? So, bottom line is they're doing a great job selling more coffee to more customers, and, as they really hit on in the conference call, they have many more avenues of growth ahead of them. And those aren't just empty promises. They're executing on them right now. They're starting to, or they're well into them. So I think, Chris, same store sales were up 6% this last quarter, and weather was a real factor in that hit results. and they still had great results. And when Starbucks says weather hit results, I believe them,

they had more store closures this past quarter than they've ever had in any quarter in history due to all the storms mostly here in the northeast, but also across the country. So I think that's why the shares are holding up and doing well. They're reasonably priced. Starbucks is growing nearly 20% on the bottom line, and they have many more avenues to grow

that we can talk about if you want to. We've got a couple hours. Actually, what I'm more curious about is the rumor earlier in the week about Soda Stream. Shares of Soda Stream were up pretty big on this report that Starbucks may be taking a 10% stake. I'm a Starbucks shareholder. How excited or scared should I be about that? Initially, I'd say it's a non-event.

The 10% stake would put about a 10 to 20% premium on Soda shares, so you may see Soda Shares pop if this does happen. And long-term, it would just remain to see how it plays out. Starbucks has said they're experimenting with selling carbonated beverages in their locations. So that's why some sort of partnership may make sense, but I think it's far too early to bank on it. CEO Howard Schultz also said they are full steam ahead on selling alcohol. Ron, I'm looking... What are you going to meet for?

Well, just because you seem skeptical about beer and wine sales at Starbucks. Do I think that makes sense. I didn't like, I prefer that to the headline like we're going to take over the tea market and we mean business. Tea and food. Tea and aggression don't mix. I think perhaps not across the board, not in every store, but in selected markets, I think alcohol could work. Shares of Baidu up this week after first quarter revenue for the Chinese search engine rose 59%. That's good for the top line. How were the profits Ron? Profits were good, up about 24%. I think what's got some people scratching their heads a bit is the forward guidance, which was a little

confusing, which spoke of really strong revenue growth, but flat profits. And people don't like to see that. Wall Street doesn't like to see that. And it's because it's a similar story to Amazon in the sense that they're really spending quite a bit for the future. Move to mobile is going well, but it's not cheap. So they've got a lot of marketing and tech expenses ahead, and that takes a bite out of profit margins. But if you believe in the longer-term story and that those expenditures are necessary to set the company up for the future, then you should be happy to see that. How much more dominant can by-do you get in China?

Not much more. I was just going to say, eventually, don't they run out of market share to acquire? That is a risk. You could say that where can they go but down. There are always upstarts that can come in and take share away, but they really are the big cahuna here, and they're the ones to beat. The stock really isn't too expensive. We're probably maybe 30 times forward earnings for a company that really has a lot of growth ahead of it. First quarter profits for Ford Motor fell 39 percent, and shares were down on Friday. And Jeff, the guidance that they gave really wasn't all that encouraging either. Is there any bright spot to Ford's

latest quarter? Overall, I'll go to the bottom line again. And the company is much healthier than this one quarter appears to be. That's good, because this quarter doesn't appear healthy at all. Yeah, it doesn't. But the future looks much better. And I think the stock is reason reasonably priced for a conservative investor. It yields more than 3%. It trades at about 8.6 times expected earnings for next year. So overall, I think it's a good value stock to own. What happened this quarter? Again, weather in the U.S., who is going out buying a car in January, February? Two, they have a lot of... Ron? You seem like someone who would just...

No? No. Not on. People weren't even going out buying coffee, let alone a Ford Explorer, although you might have needed one. I was going to say, a Ford Explorer would come in handy with the snow we had. So bad weather hit, but elsewhere in Europe, losses were down considerably, and the company expects to be profitable there in 2015. Finally, it's taken a long time to turn around. Asia Pacific now has very big profits for Ford and volumes growing sharply there. They're introducing 23 new products this year, which brings much higher costs, and that's why the guidance looks weak this year, especially compared to last year.

But you have to kind of look past this year to 2015 and beyond, and then I see value there. I was going to say, I mean, the stock getting sold off on Friday in the wake of not just the earnings, but the guidance as well, do you think it looks like a buy at this lower price? We have it in Motley Fool options as a, yes, as a synthetic long, which is a buy, yep, and for the reasons I said. In 2013, the big question for YUM brands was, when are things going to get better in China? Shares of Yom up slightly this week in the wake of first quarter results. James, are they, is there a light at the end of the tunnel? Are they getting better in China? Yeah, we have learned, Chris, the lifespan of antibiotic-tainted chicken memory is about one year.

Same store sales in China rose about 9%, which is great. People went back to eating the chicken. There was a small issue of portion size. There was a scandal. Someone posted a picture of the advertisement showing what your six-piece chicken meal was versus what the real meal was, and that hurt them a little bit. But overall sales were up. They had mild comp declines, comparable store declines,

in the U.S. for both Pizza Hut and Taco Bell. So it was sort of a wash overall. It's not as popular. I mean, my Taco Bell memory, when I was a vegetarian about 10 years ago, I tried to, I couldn't feed my, I was traveling with my dog, and I couldn't feed her any of my vegetarian food. She wouldn't eat it. So I thought, oh, thank God, here's a Taco Bell. I'll get her some kind of a beef burrito at the Taco Bell.

And so I put on the ground, and she refused to eat it. She would rather go hungry than eat the Taco Bell beef in the U.S. But that's in a sign. In your emails, too. Turns out that was filler. Exactly, yeah, yeah. I was going to say that the photo scandal, quote-unquote, that you mentioned, that seems pretty mild compared to the problems they have with the chicken supply. Yeah, chicken supply is much bigger, but, you know, people forget.

People forget that kind of stuff. And if you go to China, KFCs are everywhere. It's kind of a luxury thing. Like, if you invite a woman to KFC, it's kind of like a nice evening. Pizza Hut is actually very upscale in China. So they've still got a strong brand. We've got about a minute left. Speaking of Young Brands, this summer, Taco Bell is going to open a new restaurant called

the U.S. Taco Company and Urban Tap Room. It is an upscale location. The first one is set to open in Huntington Beach, California. Should I short that now or should I wait? You know what? Let's bring in our noted gourmet on the other side of the glass. Steve Brodo, Steve, I know it's not the Olive Garden, but the U.S. Taco Company and Urban Tap Room, what do you think?

You want to swing by? I think it sounds great. I think Tex-Mex feel, beer, you know, California sounds terrific. Do you have any trips planned out to California? Maybe you could swing by, do some market research. I will hopefully add it to my agenda. I think it needs a longer name. Yeah, yeah, yeah.

If not, just drop us an email radio at fool.com. If any of our listeners are in the Huntington Beach, California area, guys, we will see you later in the show. Up next, a conversation and a preview of the Berkshire-Hathaway annual meeting with CNBC's. Becky Quick, you're listening to Motley Full Money. If you've got the money, honey, we're going to have. I'm back to Motley Full Money. I'm Chris Hill.

On May 3rd, the investing world will focus on Omaha, Nebraska for the Berkshire Hathaway annual meeting, the highlight of which will be the Q&A session with Warren Buffett and Charlie Munger. And once again, one of the moderators for the session is our guest this week. She is one of the hosts of CNBC's Squawk Box, Becky Quick. Welcome back to the show. Thanks for being here. Hey, Chris, so much.

It's great to talk to you. For someone who doesn't own Berkshire Hathaway stock may not follow Warren Buffett all that much, why do you think this annual meeting resonates so much? Because there are, of course, so many annual meetings, and so many of them are, frankly, deadly dull. Yes, dull, boring, kind of cold, not very interesting. That's how you would describe a lot of shareholder meetings. And honestly, I was a skeptic myself before I went out for the first time. I guess it was about eight years ago, maybe nine years ago that I went out for the first time

the Berkshire Hathaway meeting. It is like nothing you have ever seen when it comes to an annual meeting. There is this sense of festiveness that takes over the entire town of Omaha. It is the second largest event in the entire city of Omaha for the course of the year, the first one being the College World Series, which is also hosted there. But it draws 40,000 visitors who come into the major – convention center downtown and these people are Berkshire faithful a lot of the ones who come in and part of it is because Berkshire Hathaway shares have done so well you've made a lot of millionaires and

in some cases actually people have made over $100 million and more by being long-term investors in Berkshire Hathaway that tends to make people pretty enthusiastic and a lot of these people like to come out now they come also because they want to hear Warren Buffett and Charlie Munger sit down and take questions and the two of them are a dynamic duo who will sit for hours, literally six to eight hours, and take questions from shareholders that come in. So people use this as a learning experience, not only for themselves, but a lot times you'll see people with their kids in tow, and even kids who get to ask questions of these two. They don't restrict the subject matter. You can ask them about anything, and they tend to

answer just about anything and everything you throw at them, not only about Berkshire Hathaway and its operations, what they think about the markets, but even just questions on life. Last year, Warren Buffett got a bearish analyst to participate in one portion of the program. Doug Cass, a hedge fund manager who's shorting the stock. He asked some questions. And as of this moment, right now, Warren Buffett can't find someone to fill that bare role. Is that because the stock is bulletproof? Or is this just a bad gig for an analyst or a hedge fund manager who's bearish?

You know, there was only one who applied this year for the position, so there were no bears who were coming out of the woodwork to apply for it. And the one who did apply, I think they thought didn't have an actual large short position to, so they chose to go in a different direction. They ended up asking the Morningstar analyst who covers Berkshire to sit in that slot. So I think if there was a lot of someone who was a large bear who had a large position in that, That was a long-standing position. I think they'd be happy to have someone up there, but they didn't have anyone who actually applied for the position who was a big short in the position. Let me ask you a couple of questions about Buffett. He's 83 years old.

His plan is to split his job in two when he leaves the company. And he has said that he has picked the two successors, but only he and the board of directors know who they are. Why not just go ahead and announce those successors ahead of time? because, as you know, transitions for executive positions can be really tough to pull off well, and if he announces them ahead of time, maybe they have a smoother transition. You know, I've asked that same question myself. His point is that he has no plans to leave anytime soon. I think you would have to drag him kicking and screaming out of there.

And the other thing he says is that it's not necessarily always been the same people, that this is something that can change over time. Because, again, they've had succession plans in place for so long. I can almost guarantee that the people who were in those positions or the person who was in that position 10 years ago is not the people who are necessarily first in line today. So I think part of it is wanting to make sure that you keep the field open and kind of watch people as they develop and go along.

And I think part of it is also wanting, potentially, he's never told me this, but my guess would be that you don't, want to discourage other people who are working at the company by saying that this is the way things are going to be over the long haul. If I call my bookie in Vegas, let's just say I have a bookie in Vegas, but if I call my bookie, who are the frontrunners right now to replace Buffett and who's a dark horse who, if I place a bet, I'm going to win big? You know, if you asked me, I don't know this, but my guess would be probably Greg Abel at MetAmerican Energy. I think if you're looking for you.

for somebody who's going to be the new CEO of the company, you have to look at the people who are in charge of what he calls the big four. There are four major industrial units. Another one of those is Burlington Northern, so you could be looking at Matt Rose, who is now the chairman, used to be both CEO and chairman, but recently handed over the CEO job to Carl Ice. But I think I'd look pretty closely at people like that. If you're looking for a dark horse, maybe you look for somebody on the board, somebody who's been with the company a long time and knows them, maybe not as involved with the day-to-day operations,

but who certainly knows the company very well. You're listening to Motley Full Money talking with Becky Quick, the host of CNBC Squawk Box. In his recent annual letter to shareholders, Warren Buffett actually didn't have a whole lot to say about the stock market. He did say he thinks that, and I'm quoting here, the motherload of opportunity resides in America. But unlike previous years, he really didn't weigh in on the relative attractiveness of stocks. What, if anything, should we read into that? Because one interpretation of that is he's pumping the brakes on the stock market. Yeah, he has not told us in any of the times that we've spoken with him recently that he's bearish on the U.S. stock market by any means. I think he still

use it as the best potential investment vehicle. But he's also not as bullish as he's been over the last several years. I mean, for several years now, he has been, basically, he wrote that op-ed in the New York Times that was almost coincident with the market's low that basically said, buy American stocks, I am. And that's because he was looking at what he saw as an unbelievable buying opportunity. Stocks fell to 666 on the S&P. We're back at 1800 plus now. So you're talking about a market that's tripled over that time period. And I think as any value investor, he looks at that and thinks, okay, you may not be looking at a collapse and stock crisis, but you're probably not going to see the same types of gains that you've seen over the last four or five years.

As you said earlier, you've been going out to the annual meeting for Berkshire Hathaway for about eight years or so. What has surprised you the most about Warren Buffett in recent years? Just how much energy he has. I've been on some trips with him that we've taken, where CNBC's kind of gone along with camera crews and followed him to China, followed him to South Korea, followed him to India, and it is really hard to try and keep up with him in terms of the energy and the enthusiasm that he has. If you go along for a three or four day trip and trot the globe, I mean, I'm tired. He's 83, and I honestly have a hard time trying to keep up with that agenda. He's 83, and not for nothing, he doesn't strike me as the healthiest eater in the world.

Where is he getting all this energy? I don't know. He's just got good genes, I think. When it comes to eating, he says that he would prefer anything that a five-year-old would want their birthday party, whether that be ice cream, hot dogs, hamburgers, that's his kind of fair. Some people are just lucky. The rest of us have to work at it. All right. Let's broaden the view from Berkshire Hathaway. We have had more IPOs in the first quarter of 2014 than in any quarter since the year 2000.

And you know, Becky, it is stats like that that are fodder for people who are saying that this market. market right now is overheated. We're looking at the dot-com bubble 2.0. When you look at the market, which you do every day, what do you make of it right now? You know, we watch this every day. I think this has been an incredibly interesting year after gains of 30% plus last year. This year, it seems like we can barely make any traction at all. The market goes up a little, goes back a little. It seems like it's been a real struggle. Now, part of that may be because of the weather the first quarter. and personally, I think the rest of the year is going to be much better. I am in the camp of people who think you could be looking at GDP of 3% this year.

Every time the market goes down, we don't own stocks individually. As commentators on CNBC and as anchors on CNBC, we don't own individual stocks, but I can buy market indexes, and I do for my kids' college funds. So, you know, I'm a very small-time player on this, but every time the market's gone down and you're looking at a decline for the year, I've put a little additional money into my kids' college funds in an S&P 500 index this year. We don't get a new Fed chief very often,

and I know she's only been on the job for a couple of months, but what has been your impression of Janet Yellen so far? I think she's been very steady so far. You know, a lot of people look at that comment that she made about in six months' time as being a snafu that she stepped in it and made a mistake. I think the market, I think all of us kind of misinterpreted what she was talking about. I think she was talking about the end of QE after six months, and then looking at a longer term before interest rates started rising.

I think she's done a pretty good job and it's been very steady to this point. Last week, your network, CNBC, celebrated its 25th anniversary. You've been at CNBC for about... Not 25 years. I have not been here 25 years. I was just about to say you've been there about half that time. What has been the biggest change in how you've covered the market in the time that you've been there? You know, one of... There's two changes that I would point to.

The first was the financial crisis and how quickly things started moving. And I don't think it's decelerated since then. I remember, you know, when I first started the job, the first thing that I needed to do every day was read the Wall Street Journal, then we go to the New York Times and kind of jump through the Financial Times and all that. And I still get a lot of our news from there, especially analysis. But during the financial crisis, we basically started throwing the papers out because everything that was in the papers was outdated.

We had to make stuff up on the fly. We had our own reporters here that were breaking news that was, much more relevant and new and updated than the stuff that was happening in the papers, I don't think that's slowed down. I think there's so many other places to get news, whether that be on the Internet. You know, that's just changed things so drastically. I read Politico's morning money note every morning as my first read now from Ben White. I'm checking my iPhone. I'm checking Twitter. I'm checking all of these different places that I didn't look before. So I think the most drastic change I've seen just as the way information is disseminated and the way we look at information.

The other change is how big of an impact Washington has now in the business world. It's not quite as strong as it has been in the five years after, the immediate five years after 2008. But it still plays a really large role. And companies, I think, are trying to gauge all the time what Washington is going to do before they make long-term plans. I think that has huge implications. And there's still a lot of a waiting game that takes place in American business. Part of that may be why were seeing job growth that is slower than had been expected. There's just a lot of waiting, people waiting to see if the tax codes change, and businesses look for things like that before they make big capital expenditures. Last question, and then I'll let you go. And you just

touched on this a little bit, but I don't think I've ever asked you before, how do you prepare for your day? Because I know you wake up before the sun, but other than Ben White at Politico, Who do you turn to to help inform your view of the market? Because there are investors who turn to you first thing in the morning for that. Yeah, I don't have like one huge place that I look. I look everywhere, and I think that's what's so different about it. I don't have an absolute, this is the thing I do. But, you know, I read so much, there's just information that's coming out all the time.

So I read up until I go to sleep. Sometimes I'm in bed. I'm usually not in bed until about 10. and sometimes it's later if I'm still reading things, but I'm reading all of the things that happened after the market closed, trying to get a heads up on what's going to be in the morning papers that late. And then when I wake up in the morning, it's really more of what's been happening on the Internet in the Twittysphere,

some of these morning notes that come out, trying to just think through what you know is going to happen and get a take on it because so much more of what we do now is analysis of the news as it's hitting and trying to be faster and faster with that analysis. I think that's the value add that we bring to it. You're still getting the same breaking news and things. It's just how fast can you give an analysis and put that into context with everything else that we're hearing.

It is the best way to get a jump on the business news of the day. She's the host of CNBC's Squawk Box when she's not heading out to Omaha to hang out with Warren Buffett. Becky Quick, thank you. Thank you. Thank you. I always love talking to you. So thanks for your time. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So don't buy ourselves stocks based solely on what you hear.

Welcome back to Motley Fool Money, Chris Hill here in studio. Joining me once again, Jeff Fisher, James Early, and Ron Gross. Guys, before we get to the stocks on our radar, a couple of housekeeping things. First, thanks to Becky Quick from CNBC. Our guest next week is going to be Ed Catmull, the president of Pixar and Disney Animation. So tune in for that. You can always drop us an email. Radio at Fool.com is our email address.

Earlier this year, guys, we were talking about vending machines, because there was a story about the first burrito vending machine out in California. And we got an email at the time that I've been saving from Terry Bond, who took a trip in Belgium and France and took photos of different vending machines in Europe. And by far the best one is a vending machine that is essentially a washing machine for your pet. So she says, Terry writes, instead of reading a book or texting your friend, friends while waiting for the weekly wash to finish, you could clean the family pet in the animal washing machine located inside a laundromat. Do any of you have pets? Do you have like, do you have like a dog? I do not anymore. What animal did you use to have? A dog. What can a dog? A golden retriever.

Okay. Interesting. How would you feel about just, just tossing your golden retriever into a It sounds like a tremendous liability. The insurance that they must have to shove your dog in a box with scalding hot water. And would you be concerned about the impairment of the relationship with your dog? No. You wouldn't care about that. I'd throw my wife's cat in there. It's not even your shared cat.

It's your wife's cat. That's how you see it? Yeah, we should move on. We should probably move on just in case she's listening. He's a great cat. Last thing before. We'll bring in our man, Steve wrote up from the other side of the glass. But joining Steve on the other side of the glass,

big thank you to David Brinley, who is a motleyful one member who is visiting us from Houston. in Texas. So thanks for hanging out with us, David. David runs to this show. He listens to the show while he runs. It's almost impossible to do. It's scientifically proven almost impossible to run to this show. You know what? It was possible before, but now that he's seen how the sausage is made, we've probably ruined the experience. He runs faster because he's trying to get done so you take off the earbuds. All right, Steve, I'll hit you with a question. Ron Gross, what's your stock? Steve, I got coach. C-O-H reports next week. We own it in a million-dollar portfolio.

A lot of changes going on. CEO change. A new head designer. U.S. is weak. International is real strong, including China. I'm really, really interested to hear how the progress is going because, as I said, we do own a stake here. Steve, question about coach? How important are purses to their bottom line?

I'm being dead serious because I think coach, I think women's expensive purse. So obviously Michael Coors and other competition is kind of eating their lunch right here in the handbag market. And that's been part of the struggle for the U.S. So kind of stabilizing that business under a new designer is very important. They're turning themselves into more of a lifestyle brand, expanding into men's, and a lot of different other types of accessories as well. But clearly, handbags is important. So I do have a question for Steve, if I may.

Do you carry a man bag, Steve? Is that something? Definitely not. Most certainly not, sir. I believe some people refer to it as a MRS. Amherst. How about a MRS, Steve? No, MRS.

And that's leather one perhaps embroidering with your name. But you would, if you were to carry one, you would go to a lifestyle brand to make your first perk. Absolutely. I definitely would go to that. You can't go wrong with a lifestyle brand. James Early, what's your stock?

I thought about going with Coach as well, but since Ron went with it, I'm going to go with Apple. Coach is an income investor recommendation. You know, that's kind of old and slow now. Thank you. I'm going to go back to, well, it's up like 0.6% for me. I'm going to go back to Apple, which is boring,

but I think there's a lot of room to grow. I think the valuation is over $700. There should be over $700 per share, Over half of the new iPhone buyers are first-time customers for this phone. So I think there's still a lot of real estate left. Steve? Should the next iPhone be bigger or smaller, in your opinion? It should be both.

They should have a bigger one. If you go to Beijing, you know, to Asia, everyone's got these big, humongous phones. They use them kind of as quasi-laptops, so that's one piece. But then the phone-only piece can be like a smaller thing for emerging markets that don't have as much money. Jeff? Steve, SeaWorld, 11 theme parks. They went public last year. the federal OSA has banned their trainers from getting in the water.

For Mountley Fool Pro, I've been looking at it as a possible short. Tick or symbol? S-E-A-S. Steve? Have you seen the film Blackfish? I have. Yes, it was very horrible. I'm glad that you're considering shorting it because it seemed like a very, very unhappy place for animals.

To what extent, if any, did seeing that movie factor into your short? I was already looking at the short, but the movie certainly helped. Or hurt. It helped with the decision-making. All right, Ron Gross, James Early, Jeff Fisher, guys. Thanks for being here. Thank you, Chris. Thanks again to our special guest this week.

David Brinley, have a safe trip back to Houston, Texas, David. That's going to do it for this week's show. The show is mixed by Gail Anya Nuevo. Our engineer is film critic and gourmet. Steve Broido. Our producer is Houston native Mac Greer. I'm Chris Hill. Thanks for listening.

We'll see you next week.