Motley Fool Money - Motley Fool Money: 06.21.2013

Episode Date: June 21, 2013

Ben Bernanke spooks investors.  Shares of Jack in the Box rise.  And Men's Wearhouse gives the boot to a retail icon.  We discuss those stories and talk emerging markets with Motley Fool Asset Management portfolio manager Bill Mann. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Welcome to Motley Full Money. Thanks for being here. I'm your host, Chris Hill, joining me in studio this week. From Motley Full Income investor, James Early, and for a million-dollar portfolio, Charlie Travers, and Ron Gross. Good to see you, Chris. How you, Chris? We've got the auto industry, the restaurant industry, the retail industry, and more.

We will take a tour of global investing with Portfolio Manager Bill Mann. And as always, we've got a few stocks on our radar. But we begin this week appropriately with the big macro. Ron, Wednesday afternoon, the Fed chief, Ben Bernanke, why am I laughing? I don't know why you're laughing. Bernanke goes to the microphone for his press conference talking about how the economy is expanding strongly enough

that the Fed can start to wind down the bond buying program. And in the final 90-months, minutes of trading on Wednesday and all of Thursday, the S&P drops more than 3%. Wow. Sorry. Yeah. Well, so where are we? Stocks are still up 12.5% for six months. That's a full year's worth in a normal market of return. It's largely because interest rates have been close to zero artificially, and the Fed has been propping up asset prices. So, when the Fed talks about perhaps pulling back on that short-term traders and trade, traders in general pull back on their investments and we see stocks fall. The market still is incredibly

strong. It's good news that our economy is picking up steam. But let's face it, we're still only at about 2% GDP growth, still high unemployment. But the Fed has said, do not worry, we're not going to ease up unless we see continuing strength. I wish everyone would take a deep breath. Traders are not known for taking deep breaths. It doesn't this make you just want to lose faith in humanity, though? It does not. The Fed is saying, we're going to be we're going to be. We're only doing this because the economy is getting better. And if it, just like you just said, if it doesn't get better, we'll step right back

in and put the training wheels back on. These people are just freaking out. So the truth is, I think the odds of the Fed getting this perfectly right and bringing us in for a perfectly soft landing is probably relatively low. So what am I going to do about that? I'm going to do nothing because I know the probability of me being wrong about what I just said is very, very high. So I'm going to stay the course, stay invested in good stocks, right out the ups and the downs.

In the long run, I'm going to be just fine. I've never heard you talk about yourself in a first-person hypothetical. Very good. Charlie, what did you think when you saw the madness unfolding late on Wednesday and even into Thursday? You could see this coming ever since Ben Bernanke gave a, I think this appeared in the Washington Post about one of the side effects of boosting stock prices. And that just put that little nugget in the back of my head. I think this is about a year and a half ago now, that once the Fed stops, the stock market's likely to drop.

But who knows? I wasn't surprised at what happened this week at all. We would be remiss if we didn't throw in China here because it is the wild card, and it's coming on top of what's going on here domestically where they're trying to bring China's growth down and they're trying to engineer it just so, another soft landing kind of scenario. It kind of rattles the markets. It's not good to have that happen when we're being rattled here at the same time. and let's not forget good old Europe, which still isn't really firing at all cylinders.

Aren't you the messenger of doom day? Yeah, thank you. The Wall Street Journal reporting this week that Microsoft recently held advanced talks, their words, advanced talks with Nokia about buying Nokia's handset business. Charlie, these are a couple of companies you watch closely. What do you think? Yeah, so Ron and I own Microsoft a million dollar portfolio. And as I saw that headline, my heart was in my throat because I do not want Microsoft buying. Nokia's handset business at all, period, and stop.

And so when it was said that the talks are not likely to resume, I was actually breathing a sigh of relief, because Microsoft should not have its own handset division, in my opinion. I think they should ship out their phone OS to multiple parties like HTC, Nokia, and Samsung, and let them do the heavy lifting on the design and working with the carriers. Ron, were you feeling the same way, your heart in your throat? A little bit. We've heard more and more over maybe the last six months or so about Microsoft's talking about hardware and moving away from software. I'm not loving that idea. I do think their tablets are interesting. They're actually quite good. But I do want them to stick to what they do best, which is sort of that very all-important software market where they generate most of their cash flow from.

But when you look at Nokia, even taking into account the last few years and the struggles they've had. Nokia still has close to 20% of the global cell phone market. Do you think on some level, Microsoft and probably other companies are looking at Nokia and saying, look, there's, there is some value in that company, maybe not the full value, but there is some value. We need to figure out what it is and buy it at the right price. There's certainly value there. They are highly regarded for their design capabilities. They have tens of thousands of patents, which have value in their own right, considering how Sue Happy this is. industry is, but I don't want Microsoft to be the buyer.

Do you think a couple years from now, two, three years from now, Nokia is still on its own, or does it get taken out by something? I think they are flying solo, and I think with the momentum, you are seeing quarter over quarter with the Windows phone unit sales, they'll be better off than they are today. First quarter results for Pier 1 imports looked good. Profits up 14 percent, same store sales up 6 percent. James Verley, I'm compelled to ask, why did shares fall late in the week? It's terrible.

Pier 1 kind of reminds me of some love struck middle school kid who's trying to woo with this cool girl, and she just won't have anything to do with him. I mean, here's a headline. From experience this comes? I've seen people do it. Profit rises 14 percent, meets view, lifts full-year EPS outlook. The increased store traffic, higher average ticket, 15 straight quarter of sales and earnings growth. I mean, these are great, great points.

But the stock went down about 6 or 7 percent on this news. I mean, it's just, it's such a picky market. Stock is still up 50% this year, so we can't complain too much, but it's a tough crowd. And, Charlie, we were talking earlier in the week. This is really a pretty amazing turnaround story, not just for the stock, but, you know, for the business as well, but particularly for the stock. If you go back to the depths of the financial crisis in March of 2009, I want to say Pier 1 was weeks away from bankruptcy. The stock hit a low of 10 cents a share. And today it's at something like $24, 240 bagger in four years. There was a time where Berkshire had picked up some shares. I actually think it was Lou Simpson from the Geico subsidiary or not Buffett himself who did it,

but I believe they bailed long ago. Tesla Motors had another first this week, but not the good kind of first. Tesla Motors issued its first recall about 1,200 vehicles. And Charlie, on the surface, you would think, well, that's got to be bad news. They're actually getting pretty high marks for how they handled all this. And the automotive world is inevitable that something would happen where they'd have to have a recall these vehicles are just so complex. But they handled it in an absolutely stellar way and are really setting a bar for world-class

customer service in this business. And what happened was a line worker noticed that the weld on the back seat wasn't as robust as it needed to be. And so they're recalling the vehicles produced in May and early June. And what they're going to do is show up wherever you want them to, pick up your car, put it on a flatbed truck, take it for a couple hours, fix it and bring it back to you. and give you a loaner Model S if you happen to need one. I mean, absolutely brilliant. Well handled there.

It's pretty amazing that Tesla Motors, and it is one of those companies and it is one of those stocks that there's a lot of passion on both sides of the fence there. But it's pretty amazing that there were the headlines for Tesla about a recall of 1,200 vehicles. Meanwhile, GM, General Motors issued yet another recall for mid-size SUVs to the tune of nearly 200,000. that's on top of a similar recall from last summer. So all told somewhere in the neighborhood of half a million SUVs for General Motors getting recalled. I got to say, do any of you guys love anyone in the automotive space? Because it's stuff like this.

This is one of the main reasons that I stay away from GM, Ford, Toyota, etc. James? Yeah, it's a competitive market. The U.S. auto industry, GM and Ford, especially GM, has lost more money for shareholders than it's made over its life. I mean, I personally think they should have not been bailed out and bought out by somebody more efficient, but it's a tough business. I do own Ford personally, and I like how they handled the financial crisis more than the others, perhaps.

But it, quite frankly, is a stock that has gone nowhere for me, but I'm hanging on, I'm believing. In your portfolio, is it just hanging out in a corner with Dell? Yeah, I knew that. Coming up, a retail icon got kicked to the curb this week. Detail soon. This is Motley Full 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 hear.

Welcome back to Motley Fool Money, Chris Hill here in studio with James Early, Charlie Travers and Ron Gross. Guys, fourth quarter profits for FedEx fell 45 percent, but still better than Wall Street was expecting, Ron. What did you make of the quarter? Well, if you recall, on last week's show, FedEx was my stock on my radar, and I was mostly interested in them as a bellwether. And I think I got what I was wishing for. They came out and they said they see US GDP growth of 2%, global economic growth of 2.3%. So that is moving forward, but it's not necessarily robust. I think that's right where we would have guessed. For FedEx, particularly, they're seeing this shift to people being willing to pay less and wait for shipments, especially from overseas.

So they're pulling back on their business in Asia. They're restructuring. They're hoping to take $1.7 billion of costs out of the business over the next three years. So they're seeing some trouble with their business as people look to other alternatives, but they still are a global powerhouse producing a ton of cash flow. It seemed like there was a lot of concern, and it was in some ways maybe just headline risk. But that was one of the big narratives of their quarter, this whole notion that Asia being such an important market and the fact that FedEx looking to cut cost, look to those roots, look to cutting down the number of U.S. to Asia roots. Do you look at that and think, well, that's a short-term thing. They can easily bump that back up if they need to,

or is that maybe a nod towards the long-term direction? It's hard to put planes in and out of service quickly. So I think they're doing what they have to do. They're reacting to where their business is going. They got a little testy on the conference call, actually, as analysts kept asking about it. And eventually, the CEO or CFO said, listen, You're going to just have to trust us. The express business is still an extremely large, multi-billion dollar business. You're going to have to trust us to get it right in terms of sizing. And I do trust them to do that.

Do I wish that part of the business was still extremely robust? Yes, of course I do. You've got to like that a little bit when the conference call gets tested, because otherwise they're just kind of boring, aren't they? Jack in the box has 2,200 restaurants and 600-plus Cudoba Mexican Grills. shares were up ahead of the market this week on the news that Jack in the Box is closing 20% of Kudobas by the end of this fiscal year. James, that seems like a pretty cut and dried thing that that part of the business is not doing well if that was the reaction from investors. Well, you know, Chris, I actually ate at a QDoba once.

No, you did. It was the most forgettable four minutes of my life. It was at some airport. My only memory is that I don't have any memory of it. Yeah, they're stacked up against Chipotle, against better, better. competitors. What's interesting, a few things are interesting here. Over the past five years, the revenue in operating profit from the jack-of-the-box restaurants proper has been cut in about half, and Kudoba has gone up, but still about 15% of operating profit, which is not huge. So this

was going to be their big growth catalyst. They are still going to open 70 restaurants this year and another 70 next year. I think the idea is here, they're just being smart and culling those that were in less desirable locations. My bigger concern is how valid is the concept? It seems like, Charlie, an automatic win for Chipotle. Just when you think about, we've talked before about the number of Chipotle locations and how they're trying to be very smart and strategic in their growth. They've gone away from the franchising route. So certainly if they wanted to go that route, they could, I mean, there could be Chipotle's all over the country tomorrow. But it seems like just by virtue of doing nothing, they get a small win here.

I think it's a win for their strategy of providing. high-quality food at an incredible price. You have a pitchman for that? Sounds like that. I will do anything for the chance at free burritos. By the way, and I made this point on Investor Beat earlier in the week, now that Burger King has retired the creepy king mascot, can we all get on board with the idea that the jack-in-the-box mascot is now number one in the creepy category?

That guy with the suit and the weird head and the nose. I haven't seen much of him lately. Yeah. It's like a white head. they'll show up in like the family vacation photo. Yeah, it's just, it's jack in the box. Please think about that. Please think about redoing that mascot.

A few companies are having as bad a week as EBICS, the insurance software company, shares down more than 50% now that EBICS is the subject of a criminal probe for intentional misconduct, Charlie, which means that the merger agreement that they had in place with the Division of Goldman Sachs is now off. You don't seem at all surprised by this. No, not really. This has been a company that has had its accounting practices under scrutiny for years. Even worse, with some of the allegations were coming from executives of companies that EBCs had purchased, and you'd think they would have the inside information to know what was going on here. So when Goldman offered to buy EBCs for $20 a share back in May, I thought that was the end of the EBCS saga here, and I think so did everyone else. but this investigation by the U.S. attorney for the Northern District of Georgia really through the monkey wrench into that deal,

and Goldman is backing out, and they don't even have to pay a termination fee for doing so. So the stock, I think, has traded down to as low as $9 in the past two days. And what do these guys do? So they make most of their money running exchanges, which is basically connecting an insurance broker, so the entity trying to find policies for small businesses with the kids. carrier and getting rid of the paperwork and making it all electronic. So, I mean, that does sound like a real business that has value. It's just been some criticism. It's just that there are questions from the U.S. Attorney's Office as to whether that is actually the business.

And how aggressive they are with the accounting and all of that. Yeah. What are the odds that this thing just ends up going to zero? No comment. This is... Fair enough. Shares of men's warehouse down this week in the wake of the news that the board of directors fired George Zimmer. He is the founder, executive chairman. And if you have ever seen a television commercial or just heard one on the radio, he is the pitchman. He is the guy saying you're going to like the way you look. I guarantee it. James, kind of a mysterious story because he got fired and the board isn't saying why. Yeah, and he's just saying they didn't agree with me and blah, blah, blah. But it's kind of like McDonald's firing Ronald McDonald. I mean, being the pitchman is no, there's no protection

anymore these days. I think maybe he's getting older. He wasn't the face that they wanted for the brand anymore. The company has done very well financially under his leadership, though. So I'm a little surprised. Obviously, there's a lot more that we don't know about. And yet, there were analysts questions specifically about his role as pitchman. And the one thing the company did confirm was, hey, we still have hundreds of hours of video footage and we retain the right to his likeness, his image, all that stuff. So conceivably, they could keep using him, even though he's been booted out the door. And it's got to feel good if you're George.

It does. There actually has been a lot of backlash from customers saying, you know, he's my guy. I go there because I trust him. I believe in him. Without him, my business goes elsewhere. So again, that must make him feel good. He's a big pro-marijuana advocate, right? I know that.

Yeah. He is. He is. Although, I mean, to your point, Ron, the first time I bought a suit on my own, that's where I went. Me too? Yeah. You as well?

No, not you. Come on. We got about a minute or so left. Charlie, we were talking about this earlier today. Just the whole notion of, and I find this fascinating, the notion that George Zimmer could be completely cut off from the company. And yet, if they want to, they can keep rolling him out on television commercials, that sort of thing.

It reminded me of Wally Amos from Famous Amos, who sold his cookie business. And then when he tried to start Wally Amos muffins, the cookie company said, no, no, no, you can't use your name. We own your name. We own your likeness. You can't use that. So he had to figure out another way. And you were saying, this happened to Colonel Sanders, too. Colonel Sanders, yeah. You know, the founder of Kentucky Fried Chicken. He sold the business and ended up actually very, very unhappy with the direction. They took the restaurants and the deterioration and the quality of the food. But they had the rights to use his image and his name, and he tried to found his own restaurant and ended up getting sued over it. I believe George Foreman did the same thing when the grills were hot. He took that big payout for his name and his brand, but he, I believe, loses the right to use it in future products. You know what, George is doing fine.

I think all things considered and given all the money he made, I think. Got a lot of mouths to feed, though. He's got a lot of kids. George Jr., George Jr., George Jr., a lot of sons named George. All right, guys. We'll see you later in the show. Coming up, we will dig into emerging markets with portfolio manager Bill Mann. Stay right here. You're listening to Motley Fool Money.

The suits are picking up. The suits are picking up the baby. Welcome back to Motley Full Money. I'm Chris Hill. Ben Bernanke, emerging markets. So much going on in the world of investing. And here to help us make sense of it all is Bill Mann, portfolio manager at Motley Fool Asset Management, and he joins me in studio now. Could you see you, my friend? How you been?

I'm doing well. I'm doing well. And yet, as we were talking about earlier, at the Motley Fool, We focus on companies. We focus on individual businesses. And yet this is one of those weeks that reminds you that you can focus on individual companies. But every once in a while, the big macro stuff comes along and just crushes the market. In this case, it is the press conference that Ben Bernanke, the Fed Chief, has on Wednesday afternoon. The market drops about a full percent or so in the hour and a half left on that trading day. And then, And the ripple effect on Thursday, the Dow drops another 300. Wasn't done, was it? It was not done. And help me make sense of this. Help me make sense of the Fed chief saying, the economy is getting stronger.

And we are going to be pairing back the bond buying program. And then cue the freak out. What happened? Also sounds good. Well, okay, I'll help you explain. But maybe we should also put it in context a little bit. But basically the market has lost two months of gains. Right.

We're back to where we were in May sometime. Right. Yeah. The dark days of May 2013. So even though the market has dropped a fair amount, the market had been going up basically in a straight line. And by market, I mean the U.S. and a lot of markets throughout the world have had really tremendous years.

So yeah, it's a little bit of a freak out. in context, it's not that huge a deal. The market does this sort of thing all the time. So, when you look at what Ben Bernanke has said, basically if you think about it, one of the greatest investing the thesis there has been is, well, the Fed is going to put a put underneath the bond market. So therefore, the place where you're going to want to invest is in equities, right? The equity market was going to, you know, they're trying to inflate the equity market. They're basically telling you, We're trying to inflate the equity market. So when he comes out and he says that we're going to start paring back the liquidity, what does that say?

They're not going to be putting their put under the equity market anymore. And so I think that a lot of people who had owned stocks with that thesis in mind are getting out. It doesn't make a lick of difference for the companies. I mean, for me, they're saying that the economy is getting a little bit healthier. It's kind of good news. I was just going to say, as an investor, someone who is, At his core, and you've talked about this before, at your core, you're a value investor. And value is harder to come by these days, given the rise of the U.S. market.

On some level, the combination of the strengthening of the U.S. economy, and maybe some stocks being knocked down in value a little bit. Do you now look at this and say, well, wait a minute, now from a stock perspective, there are some companies that are on sale? For sure. I mean, if you think about what happens when the market moves. a few percentage, that's just the market. There are companies that move substantially more either direction. And you don't even have to point to the U.S. The Japanese market has dropped

20% in the last month. I mean, an extraordinary move, but it's not that painful because it had gone up so fast. So for us, on a company-by-company basis, we're always looking for opportunities like this. I mean, where do opportunities come from, but from times when people are afraid? So, yeah, it doesn't feel that great. And quotationally, you look at it and you look at how much money you had a few days prior and you look at it now and it's a smaller number. But at the same time, if you're someone who is cautious and careful and you maintain a discipline about how you invest, these sorts of opportunities are great. Let's look outside the U.S. and for years emerging markets had been the place to be for investors seeking. growth opportunities. Yeah, because they couldn't get it here. They couldn't get it. They couldn't get it in

Europe. So that's where they had to go. And yet, for 2013, we're only about halfway through, but for 2013, it has been horrible for emerging markets. You look at the emerging markets index. That's trailing the performance of the U.S. market by somewhere to the tune of 25, 30%. Yeah, 28%, which is, which in context is a remarkable number. I mean, you hear it's 28% behind, And that doesn't sound like much when you're talking on a stock-by-stock basis over the short period of time. But when you're talking about markets and aggregated markets, that is extraordinary what's happened. So one thing to remember is that the emerging markets includes and is really almost dominated by China, which has been a market that has not really participated in the rise. So that's had something to do with it.

But also the emerging markets have a much higher dependence and a positive dependence on commodity. prices. Commodity prices, commodities have actually come off in price a great deal over the last year or so. I mean, you remember summer of 2012, people said, oh, you know, corn's going to get too expensive for everyone and, you know, name your commodity. And it's, and it was rocketing up in price. That generally helps the places where the commodities are being produced and exported from, which is mostly emerging markets. So, you know, for us, we don't, we don't focus so much on commodity industries. We look more at, we look more at companies that are consumer facing. And yeah, so we're actually finding a good bit more opportunity than we'd hoped. I mean, it's a

great secret about investing is that when it seems easy, it's actually its hardest. And so for us, the investing's been hard for a period of time because the stock markets have gone up so fast. So when everybody's making money, everyone thinks, well, this is pretty easy. This is a breeze. This is a breeze. You just slap your money down and they hand you more back. But that's, That's just not the way it works over the long term. You're listening to Motley Fool Money, talking with Bill Mann, portfolio manager at Motley Fool Asset Management. The last couple of times you were here, we talked about you traveled to Nigeria, you

traveled to India, where you been recently? So I just got back from East Asia, and I was looking at speaking of markets that have gone crazy and then not. We were in Taiwan speaking with some tech companies there and went to look at some consumer companies in the Philippines, which is one of the best performing stock markets in the world. And I left the Philippines saying, I would love to buy companies here, but this is extraordinarily expensive. And even the people who were there locally said, yes, it's very true. It's very expensive. They're not trying to sell me anything, which is a sign and kind of remarkable. And then I was in

Singapore, which is the wealthiest country per capita in the world. And you can see it. I mean, you are, you know, there's a place in Singapore called Orchard Road. And it's basically luxury mall after luxury mall after luxury mall. And so there's a company that we think very highly of called Todd's. And Todd's is all about limiting the amount of storefronts that they have. And there's one place on Orchard Roads where you can stand in a Todd's and look across the street and see another one. Wow. Yeah.

They're like a luxury bag company, is that right? Or like accessories, that sort of thing? Accessories, that sort of thing? Accessories, shoes, belts, you know, that leather goods. It's an Italian company and they have, they've really tied themselves to, you know, to a luxury brand that isn't flashy. So they always talk about Todd's, you know, you buy a Todd's handbag. And their line is, this is the handbag that your daughter will give to her daughter. You know, so certainly, you know, the type of company that we really like and appreciate one that's not trying to put itself at the, you know, at the,

at the bleeding edge of fashion because you know what happens sometimes, you'll fall off awfully fast. You mentioned technology companies in Taiwan. Where do you see the technology sector right now? In particular, I'm thinking about consumer technology, Apple, Samsung, taking in any direction you want. But when you look across the consumer technology landscape, what do you see in terms of strength of companies as? as well as opportunities for investors. I'll tell you something that I didn't really understand. The amazing thing about Taiwan is about 50% of its market is high tech. It's a semiconductor country.

They do a lot of, they don't do as much manufacturing there, but the companies are based there. They do a lot of their manufacturing in China. One thing I didn't really understand about consumer electronics is one of the trends that we've seen now, and it's about 15 years ago that happened in computers as well, where people would buy the best and then they'd buy the best and then they'd buy the best and, you know, they would rotate that way until suddenly people started to go value conscious. They didn't need the latest and greatest. They were looking for something that could read their email for $600, you know, that sort of thing.

So with smartphones, the same exact thing is happening now. So you go to China and Samsung and Apple are not doing very well because in China, what they're favoring is these $100. white-labeled smartphones. And one thing that I didn't really understand about this market is you would think that the way to build a $100 smartphone is to use all the old technology. You're not buying, you're not using cutting edge manufacturing processes, you're cutting corners. And in actuality, you have to be really cutting edge in manufacturing to produce a low-cost phone. A cheap phone. Yeah, a cheap phone because it's such a small form factor that you have to be able to make up the economics by being very, very efficient with what goes into the phone. And I didn't really

understand this. And it changed how I thought about certain parts of that industry. But I would say that companies like Apple and Samsung, I think probably to some degree, their weakness was tipped off by their inability to penetrate countries like China as fastly as they had in places like the U.S. and in Europe. You are the second guest on this show in the past month. to have recently bought a Model S, a Tesla Motors Model S. I did. And Tesla was in the news this week because the company issued its first ever recall. Which I'm a part of.

Which you were a part of. I should point out a recall to the tune of somewhere just north of 1,000 vehicles as opposed to other major manufacturers when they issue a recall and it's 100,000, 200,000 cars. But first and foremost, Tesla's getting some high marks for the recall because it was completely voluntary on there. They should. And I could talk to it. So for me, the thought of going to an electric car was an extremely attractive thing for me because I've been driving an SUV to work for 10 years now. And I kind of felt like I was driving my apartment to work.

And it's a 20-mile drive each way. So being able to lower my carbon footprint and to save a little. money on gas. Save a little money on gas, which I unfortunately, you know, front-ended, front-loaded into the car itself. But it's, yeah, so I got a, I got a letter from them, and I've gotten a car, a call following up, and they've had no complaints. There was not like, you know, there was no injuries out there. There were no complaints. It was, apparently, an employee at Tesla was noticed a latch, and it wasn't up to the standards of the ones that they'd installed previously. And so the company called Time Out on itself. And they're going to come and get the car, leave me a loner,

and then bring it back and swap it out. I really don't have to do anything other than drive another car for, you know, for a period of time. So it's, it was, it was really a remarkable, not even a response, because a response would be, you know, a response would be. If customers were complaining. Right, exactly. My, my, my, my, my backseat is now through my windshield. Thank you very much. You know, so, uh, it was really a remarkable action by a company. I couldn't be more impressed by what they've done. You live in Virginia. You had to go to New Jersey to buy this car because here in Virginia and in your home state of North Carolina and in Texas and plenty of other states, there's a battle going on that at the moment,

Tesla Motors is losing to the dealerships. Where do you see that playing out over the next couple of years? You know, it's one of those things where the dealerships. So the base, the basic issue is this. In the state of Virginia, you can't buy a new car unless it's through a dealer. So Tesla sells its cars direct. You know, basically, I bought mine over the internet. And when, when the dealers found out that this was how Tesla was planning on doing it, they basically were asked the courts to put an injunction on Tesla from selling cars within the state. So you can't do it. So ultimately, dealers, I mean, you can understand why they're protecting their business. Sure.

You know, you can, you know, I get that. But they're kind of holding on to an old model. They're holding onto a model where location meant a lot. Like, you didn't want to have to drive from here in northern Virginia to Richmond to buy a car because then, you know, with the internet, you don't have to, you know, all of those sorts of location issues. in some ways go away. And so they're going to lose in the long term. But for now, they're not losing. So those of us who want a new car and want to buy it this way have to do things like drive to New Jersey to sign the paperwork.

But, you know, for me it was an adventure. I didn't like having to do it, but it was okay. But, you know, when I was at the dealer, when I was at the store in New Jersey, a couple had just flown in from Texas to do the same exact thing. They'd flown from Texas to New Jersey. so that they could get the new car that they wanted. That's a road trip. Before I let you go, I have to ask you this because before you started working at the Motley Fool once upon a time, you were working in the telecom space, I believe, in Russia.

Russia in the news this week because of reports that Vladimir Putin apparently stole the Super Bowl ring from Robert Kraft, the owner of the New England Patriots. He certainly pocketed it. You were telling me right before we got on the air that... This has been known for a couple years. Yeah, I just heard about it this week, but apparently this is... Yeah. What'd you think? What'd you make of this?

So, basically, I think that Robert Kraft was kind of asked to take one for the team. So they were in Moscow, and he decided to show, put in his Super Bowl ring, and put and looked at it and examined it and then put it into his pocket. Game over. And so I think that Kraft, from a protocol reason, was basically pulled aside and said,

look, you just need to let this go. You know what they? We can make more rings, but, you know, but for the sake of an international incident, you just, this is something that you just, you know, you just need to count on getting a new ring. So this happened a few years ago,

But apparently this last week, he brought it up again and basically insinuated that Putin had taken his ring. So I think he was reminded of the team that he played for. They said, no, well, of course, it was a gift. But what are the odds? I mean, what is the most likely scenario that a man hands over his prized Super Bowl ring or Vladimir Putin took advantage of a bit of a miscommunication and pocketed the ring? I think it's the modern day version of the old adage, Let the Wookiee win. That's right.

To read more from Bill Mann, you can sign up for declarations, his free monthly newsletter. You can do that by going to foolfunds.com. That's foolfunds.com. Bill Mann, thank you for being here. Thanks for happening. Coming up, we'll give you an inside look to stocks on our radar. This is Motley Fool Money. Welcome back to Motley Fool Money.

Chris Hill here in studio with. Charlie Travers, James Shirley, and Ron Gross. Guys, before we get to the stocks on our radar, our man, Steve Roydo, not on the other side of the glass yet again this week. Missing in action, we'll send out a search party for him. But on the other side of the glass, I want to thank one of our longtime listeners, Dr. Tobin Anthony, sitting in with his sons, Evan and Austin. Really appreciate the guys coming by. We got two minutes left. Ron Gross, what's your stock this week? So Home Builders got smacked this week on good old Ben Bernanke, talking about tapering.

the easing program. So I'm putting Pulte group, P-H-M on my radar. It's not a recommendation. It's something I'm watching. Stocks more than doubled over the last two years, as a lot of these home builders are. But if they continue to come down, I think they could get interesting. So it's a residential home builder. They also have a financial services arm. I'm going to start watching these companies. So this is a valuation thing for you. If it gets cheap enough, you'll buy. Yeah. I'm going to watch the whole industry, quite frankly. Okay. James Early? Similar thing here. Violia environment is an income investor recommendation that is also

been smacked. It's a French, a water, and municipal services company. And the idea is, here it was, that everybody showers in a recession, even the French. But the stock has just kept going down and stayed low, but it's yielding 6.7 percent. And eventually, this is a solid business. I believe it's going to come back. It's just risky. V.E. is the ticker. Charlie Travers, we've got a minute left. What do you got this week? Let's go three for three here. Arcos Dorados. They have the exclusive right to own and operate McDonald's restaurants in Latin America. And if you you see any of the financial news right now, you'll know that there's a million people protesting in Brazil over some of the government's policies. The economy is slowing down. Their

currencies at a four-year low versus the dollar. It's really a confluence event that has nothing to do with the company itself, pushing the stock near an all-time low. So I think it's a great time to buy into the best fast food brand in the world. And the ticker symbol for Arcoo? A-R-C-O. A-R-C-O. James, you've talked about other water and sewage companies before, but I have to believe that if it's a French company, it's just slightly more classy.

Maybe. James Early, Ron Gross, Charlie Travers. Guys, we'll see you next week. Thank you, Chris. That's going to do it for this edition of Motley Fool Money. Our engineer, in theory, is Steve Brito. Our producer is Matt Greer. I'm Chris Hill.

Thanks for listening. We'll see you next week.