Motley Fool Money - Motley Fool Money: 09.06.2013

Episode Date: September 6, 2013

The government reports weaker-than-expected jobs numbers.  Microsoft makes a big buy.  Samsung & Qualcomm unveil the first smart watches. And Campbell Soup serves up a new way to make soup.    On this week’s show,  our analysts discuss those stories and share three stocks on their radar.  Plus,  Motley Fool Asset Management’s Bill Mann gives his take on the some recent business developments. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Welcome to Motley Fool Money. Thanks for being here. I'm your host, Chris Hill. Joining me in studio this week from Motley Fool 1, Jason Moser, from Motley Fool Supernova, Matt Argusinger, and for a million-dollar portfolio, Mr. Ron Gross. Good to see you, jens. How you doing?

It's been a little while. Yeah, welcome back. We've taken a little time off. We've got smartphones, smart watches, and a new partnership in the food industry that may be smart or idiotic. Time will tell. We'll figure that one out. We're going to look at the business of shaving. And as always, we've got a few stocks on our radar. But we begin this week with the big macro. Jobs numbers for August. We're out Friday morning. 169,000 new jobs were added. The unemployment rate dropped to 7.3%. And Jason, earlier in the week, we also saw some good numbers

for U.S. auto sales. August was up 17%. year over year, hitting some levels. We haven't seen since before the financial crisis. But what's your headline for the big macro this week? Wow. It seems like I think the headline probably has to be maybe the change in sentiment from yesterday to today because I think yesterday we were looking at a lot of signs that made us all, I think, pretty much feel like tapering of the quantitative easing policies that the Fed has been implementing for a while here was coming up. It seemed like, you know, with import data, It was supporting some consumer spending in the back half of the year.

You mentioned the cars. Automobile is doing very well. Ford and GM particularly. But, you know, you come in with the employment numbers today where, you know, yeah, I mean, the unemployment number dropped to 7.3 percent. But that wasn't necessarily for good reasons. The labor force participation rate is now really at, you know, an all-time low here, essentially.

And there are still a lot of people out there just trying to find part-time work. So the quality of the jobs hasn't really bounced up. A lot of these jobs that are being created are in retail and service and not the highest-paying jobs in the world. So I think we still have a cautious consumer out there. And then to top it off with this Syria thing, I think that's just one more little roadblock there. I personally wouldn't be surprised to see the tapering be held off now until probably the end

of the year. What do you think, Ron? Yeah, I hate to pile on in a negative way. But, you know, we had some revisions from prior months that also took some wind out of the sales. Which is unfortunate. And I think we have to remember, while it's great that we're creating jobs, no doubt, we really need to see 300, 350,000 jobs to indicate anything that would be considered to be some nice growth. And we're really nowhere near that and haven't been for quite some time. So it's great to see jobs being created, but we're not there to where this unemployment rate is going to come down the way it should be coming.

down, which is rather than people leaving the workforce, we're actually putting folks to work. Matt? Yeah, and when I saw the numbers, again, it's funny. I feel like we're still in this Goldilocks sweet spot where it's not quite strong. I mean, we're in a positive trend improving, but when you see revisions, when you see the participation rate, the quality of the jobs, again, it's another excuse for Wall Street to say, hey, no, you know, the Fed tapering might not happen, or at least might not happen to the extent we all think it's going to happen starting this month.

And depending on what data point you look at, I mean, retail sales, lately have not been good at all, but it seems like the auto sales, if you're going to give a little bit more weight to one data point over another, maybe the auto sales is one of those where you're going to give it just a little bit more weight, just because the numbers really have been so stellar. And you have some companies, Honda, Nissan, who just had all-time record August sales. And those industries, I mean, the auto industry obviously affects so many other knockoff industries from that.

So, yeah, that's a much bigger number. And I do think low interest rates have a positive effect there. And as we see rates continue to climb, it'll be interested to see if that and the housing market, both together, very important parts of our economy, are negatively effective. And one more point on the autos is that these automakers are having to offer fewer incentives to get people in there to buy those cars, which is a good sign. I think that's a function of really two things, though. It's the low interest rate environment, and it's the fact that so many cars are you

out there on our roads today are really, really old, and people need to buy new cars. So there's a replacement cycle thing that's coming into play there as well. Microsoft is buying Nokia's handset and services business for the cool sum of $7.2 billion. Nokia's CFO was quoted as saying, we feel this deal is a win-win for both companies. Ron, do you agree? Is it a win for Microsoft as well as Nokia? I think it's a win for Nokia, probably. The company was bleeding and somebody was had to come to their rescue. This is a tough one for me because it really now turns this into an execution, turnaround, vertical integration, hardware story that I need to look out into

the future and be able to figure out if it works and it's hard to do. We've been recommending Microsoft for quite some time, really as a value investment, based on the cash flow it generates. And this is really a whole new ballgame. I do understand getting vertically, you know, vertically integrated. I do understand the move to being more of a device company. I don't know. It's a very competitive world out there, and I'm unsure how this plays out. For now, we're keeping it as a buy, just as I said, based on the continuation of cash flow that it generates. But we'll see who takes the helm. Does Elop from Nokia now take the helm of Microsoft? Will it be someone else? A lot of unknowns going forward.

Yeah, in the time that we were away, Matt, the other big news from Microsoft is that longtime CEO Steve Bomber announced he is stepping down at some point in the next 12 months. And yeah, to Ron's point, you look at this deal with Nokia, and people are saying that right now, Stephen Elop, the CEO at Nokia, he's really got the poll position for the top job at Microsoft. Doesn't mean someone else doesn't get it, but he's the lead horse right now. Right. You know, from watching Microsoft from afar and seeing his experience at Nokia coming in,

I don't know if that's the greatest move. I don't know if I feel really good as a Microsoft shareholder that he might be in that position because it's not like there's been a ton of value created at Nokia over the last decade. Yeah, no, I think that's just a very, that's a recency-biased thing. I think it's a convenient argument to make. I think that Microsoft investors should be concerned if Elop does get that job. I mean, I could see him sort of maybe maintaining the device segment of the business, so to speak, but yeah, I mean, Maddie keyed in on something very important there. You look back to when he issued that, you look back when he issued that burning platform memo that we've talked about before in 2011, really trying to write the ship for Nokia. And since that, before the steel was down, Nokia stock was down 60%. He wasn't turning things around there. I don't know that he has really what it takes to run something like a Microsoft. So I don't know that we'd see him actually get that position.

Where is Blackberry in all of this? They said that they want to have a sale of a company by November. Is anyone going to buy Blackberry? And if anyone does, is that anyone, someone in private equity? Because it's hard for me to imagine that any of the big tech companies. Now that Microsoft has made this deal, it's hard for me to imagine any tech company swooping in and buying Blackberry for a song. I'd be floored. I mean, I think that this Microsoft Nokia really shines a light on what Apple does so well in maintaining the software and hardware environment together. Google, we obviously, we know does a great job with the Android platform. And so Microsoft and Nokia's challenge is

going to be really to catch up with that. There's no way. BlackBerry just doesn't have, they don't have anything that really anybody wants at this point. So I could see private equity coming in there or maybe some of these bigger players picking off some pieces of it, but I don't know there's a whole lot of value there. Maddie Jason mentioned Apple. I'm sure we're going to talk about Apple next week because. Because next week, they've got an event on September 10th, widely expected to unveil the latest version of the iPhone, possibly a low-cost iPhone. Is there one thing in particular you're going to be watching next week for Apple's event?

Yes. Actually, the one thing I'm going to be watching for is the day after that event, they announced that cheaper iPhone is, they have another separate presentation they're doing in China. And the rumor is, and it's been a long-tilled rumor, is that they're going to sign a deal with China Mobile, which would be huge. I mean, we talked this past week, China Mobile is not just the biggest mobile carrier in China. It is the biggest mobile carrier in the world. Something I'll probably get the number wrong, but something above 700 million customers.

And if Apple can sell into that market, wow. The Smartwatch war has officially begun. Can it really be called the war? The first shots have been fired. Samsung, Sony, and Qualcomm all unveiled devices this week. They're expected to sell for around $300. dollars and include features like instant messaging and taking photos. Matt, what do you think? You're going to rush out and buy one of these things?

You know, here's the thing. Apple's been talking, we're rumored to be behind this kind of product for a long time. We talk a lot about, you know, sort of the cycles of market, the first movers in an important new market, and that's usually a great position to be in. But I actually think for this type of product, it's not a great position to be in. I think Samsung and other companies and Qualcomm are kind of rushing out with this saying, hey, we can prove, try to prove this product out. Whereas Apple, I think, can sit back and say, you know what, we'll let these guys, you know, flail around with these products. And if we decide that we're going to make the perfect device, we're going to go after it. So, in a way, I'm not liking

the first mover position here for any of these companies. I'm not actually, I mean, I'm personally not rushing out to buy one of these. I'd like to see how it flushes out and see what, you know, see what else comes on the market. Jason, we've already seen some early differentiation, Whereas Qualcomm's device really sort of stands on its own. Samsung's is more of an accessory that essentially needs to be synced with the Galaxy's smartphone. So they're making a bet on that ecosystem. But in that regard, are they losing the convenience factor? Because now I've got to have two devices.

Well, I think they're definitely calling your bluff there and saying, well, you're going to commit to one device or the other. And, you know, I mean, people either like their Samsung Android device or they like their iPhone. and I get that. My concern with these smartwatches is that I have yet to see them do anything that my phone can't already do. I mean, I look at this. I mean, I guess it's neat that we're thinking about sort of this wearable technology. But, man, I'm calling BS on the smart watch. I just don't think it's not compelling at all. It could very well be like the Apple Newton or something where they just bring these things out. It's kind of like, hey, yeah, that's neat. But, you know,

I mean, that's just one more thing you've got to plug in and charge up. What does it do that your phone can't do already? All right, Grandpa, relax. It's going to say, so the analysts who are saying that this could be a $50 billion industry, you're taking the other side of that bet. I'm taking the other side of that bet. Ron, what do you think? Well, I think Jason's right that this is the first foray into this wearable technology,

and 20 years from now it will be pervasive. Whether it's the watch that becomes the big deal, I don't think so. It might be part of the big deal. It's not going to be a huge growth driver for Apple or really any of these companies, I think. It'll just be the first entrance. I was just going to say, is this one of those situations where ultimately consumers will win because they will have options if they're interested, but investors are not necessarily going to see a big return. I got your wearable technology.

How about a smart hat? How about a shoe phone? I mean, a smart hat. People like wearing hats. Then all of a sudden, you're not wearing your Google glasses. They're not really covering your face up. You just put a hat on, and you kind of walk around. I like the shout out to the shoe phone. Thank you, Maxwell Smart.

Maxwell Smart. Yeah, Mel Brooks, I think, gets credit for that one. Coming up, good news for anyone who thinks opening a can of soup takes way too much time. This is Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser, Matt Argusinger, and Ron Gross. Shares of LinkedIn up this week after the company filed paperwork with the SEC to sell $1 billion worth of stock in a secondary offering. Kind of an interesting week, Matt, because the initial filing was for $1 billion. And then they went back and modified it.

Now, it's $1.2 billion. You like this move. I do like this move. I mean, it sold off the initial day. They announced it and came back strongly in the next day. And I think that's because investors sort of have this fear about dilution, you know, when companies issue shares raising capital. It dilutes existing shareholders, but it really doesn't as long as the company invests

that new capital. But also, look, the best time to raise capital is when you don't need it. That's what LinkedIn's doing. And when their stock prices at an all-time high or near an all-time high. So I think it's a great capital. allocation move. They don't need the money, but this sets them up. This gets them an acquisition capital to use. It's a great move. You look at the size of this company. It's roughly one quarter the size of Facebook. And again, the stock at an all-time high. I mean, $250 a share. I get sticker

shock looking at this thing. So here's the thing. If Facebook's worth $100 billion, I think LinkedIn's worth $200 billion. So there you go. Wow. If they're going to pay that much for Facebook. Campbell's Soup and Green Mountain Coffee Roasters are teaming. up so that you can now make soup in your curing machine. That's right. Campbell K-Cups will be sold in grocery stores in 2014 in three flavors. Ron, chicken noodle and two flavors. I love me some hazelnut chicken noodle. Two flavors to be named later. What do you think of this deal? It seems like nothing but potential upside for Campbell's soup. It seems like there's no downside for them. Yeah. I mean, it makes sense. Hot beverages or hot beverages

than soup is one. And the soup market is relatively strong. We've seen some growth lately. And for Green Mountain, I don't think it moves the needle much. Campbell's maybe. The company itself is diversified into many other areas, not just soup and is having trouble growing. I don't know about the execution. I was kidding about the hazelnut, but am I going to have coffee grounds in my soup? Is it going to be more trouble than it's worth? There's an extra packet that you have to add if you want the noodles. I know, sorry. It's not that hard, but still, it's an extra step. Are people really going to do this instead of using the microwave? You know, I think it's interesting and it can work if they do it right.

I was just going to say, Jason, this seems like one of those situations where it all comes down to one thing and one thing only. And that's what Ron touched on, which is, when I make coffee, do I get any taste at all of chicken noodle soup? And when I'm making soup, is there any taste of coffee? And if they can't get that right, then Green Mountain Coffee Roasters has messed us up. Well, yeah, I mean, I think this is really something. It's not going to, this isn't something that prompts someone to go out, I think, and buy a curing machine because now they can make soup in it. I think they just say, hey, I got this curing machine. I make my coffee with it.

Oh, well, hey, now I can make soup, too. But, I mean, to Ron's point there, I'm a little confused as to how easy this is really going to be because it sounds like you've got a broth pod. And then maybe you've got, like, a noodle envelope. What if you want vegetables? I mean, is there another envelope for vegetables? I mean, Campbell makes these cans that just go in the microwave, pull it right out of you done. Speaking to one of our engineers here at the full earlier, and they said a lot of kids in college have curing machines but not microwaves. Really?

Yes. So this could take the college market by storm. There's a business model for you. What's going on in your dorm room that you're making that choice where you're saying, yeah, I really need the courage machine. She said people give curgs as gifts, but not so much microwaves. That's an interesting way to look at it. I mean, I could see that. It's just, I don't know.

Well, if you're spending 50,000 a year to send your kid to college, what? It's an extra $300 for a card machine. You can always drop us an email. Radio at fool.com is our email address. You can also follow us on Twitter. At Motley Fool Money is our handle. Guys from time to time, I mention our dozens of listeners. Got a couple of messages on Twitter to share first from Lisa Stephanie in Pennsylvania who tweeted.

You do realize that gazillions of listeners is now officially a thing, right? I didn't know that. I had no idea. But, you know, that's why we have the listeners to keep us. She's implying that we have gazillions of listeners. I think that's what she's saying. No doubt. And from Rainier in Austin, Texas, who used Twitter to alert us to our final story this week,

and that is that the business of shaving is definitely on the decline. Procter & Gamble, which owns Gillette, recently said razor sales are falling in developed markets, and Energizer, which is the parent company of Schick, said sales have dropped 10% in the last year alone. Jason's CEO, Ward Klein, said the declines are, quote, the largest we have ever seen. Who do we give the credit to or the blame to? Is it the hipsters? What are we doing here? There are so many great parts to this article.

Having just come back from a nice week at the beach where I just left my razor at home, I had a nice beach beer going. I shouldn't have shaved it now that I see you get your thing going here for the monthly. We should mention that you've joined us for the first time with a goatee. Yes, this is part of Septembert, which is a little fundraiser for prostate cancer research. A little frustrated. And I had seen that I would have left it. But, I mean, the article calls out so many funny things.

British men getting facial hair transplants, generally hairless Asian men, and now, you know, us hipsters that are just growing our beards out. I mean, what's the razor world? There's the dollar shave club, and got to mention our recent guest, Clark Howard, who turned me on to the tip of just dry off your razor and then it lasts longer. Although, Ron, you go the other way. I do. I believe you get what you pay for when it comes to razors. However, now, I think, like the sensor accelerators, the Gillette razors, the prices are ridiculous. But I do believe the technology is significantly better than if you buy, let's say, a disposable razor or a cheap razor.

You do get what you pay for. So you're doing what you can to help Gillette and share. Absolutely. Well, you can't use one of those electric razors because those things pull the hair out of your face, right? Yeah, those aren't comfortable. Well, let's not forget, too. I mean, I don't want to alienate some of our gazillion listeners. But, you know, the Red Sox, they've got this thing called the blood, sweat, and beards, man.

I mean, I don't know if you watch the Red Sox, but all those guys have beards now. That's right. Hopefully that bodes well for the playoffs. for all seasons. Jason Moser, Matt Argusinger, Ron, and Croas. Guys, we'll see you later in the show. Coming up, we go global with portfolio manager Bill Mann. Stay right here.

This is Motley Fool Money. Welcome back to Motley Full Money. I'm Chris Hill. There are 10,000 public companies in the United States, but another 50,000 in the rest of the world. Here to give his perspective. On all of them. I was going to say on the rest of the world, the most traveled person I know, Bill Mann,

he is also in his day job, the portfolio manager at Motley Fool Funds. Thanks for being here, my friend. Thanks. Sorry to step on your intro. How much time do you have? You recently got back from a trip on the other side of the world, but I want to talk about that in a minute. But I want to start in the Middle East because there are some investors out there who are very focused on what's happening in Syria and the potential for U.S. military strikes.

I should say, we are taping this on Thursday afternoon, so the situation may have changed by the time this makes air. But as of right now, what do you say to investors who are looking at this looming situation in Syria and saying, you know what, I'm going to pull my money out of the market? I think that's crazy. I mean, forget it. I mean, not saying that there aren't enormous political implications for Syria. and those implications do flow down to, for example, maybe for primary example, to financial sector. So that's kind of a big thing in the oil and gas sector. But Chipotle is not going to stop selling burritos because, you know, there is or is not something happening in the Middle East.

And if you look back over, if you look back over time, really, military conflict and stock market performance are somewhat decoupled or discoupled. to make up a new word right here on Motley Fool Money from one another. So I wouldn't, I don't think that that's a reason to stop focusing on great businesses. Now, if you are in the oil and gas sector and you are making a play based on macroeconomic themes, you'd better pay pretty close attention because it's a pretty big macroeconomic theme. But I don't really know how to address that. It's not, it's not what we focus on. What about at the other end of the spectrum, maybe some investors saying, hey, if we're going to launch strikes against Syria, then I'm going to load up on shares of Lockheed Martin.

Yeah. That's a great, you know, that's a great theory for six months ago. Right? Yeah. I mean, how many, let's just say things go really badly and we launch 500 missiles into, you know, into Syria. Maybe that's not badly for us, but maybe that's, you know, a little bit more than it seems like, you know, is being contemplated at the moment. That really doesn't, you know, that really doesn't move the needle.

Now, as an international investor, I should say, there has been, two things have gone out on. One is that there has been a tremendous amount of stock market gains in the markets in the Middle East. And over the last month or so, that has reversed itself. So if you are an international investor and it's easier than ever to be an international investor through mutual funds or through ETFs, that is probably something to pay attention to. All right. Let's talk about your trip. You do plenty of travel for work, for research across the United States and around the world. This was with your family. So this was a vacation, but you were in Cambodia, in Vietnam. But I know you. We've been friends a long time. And I know that you, even when you're on vacation, you're not turning off the business mind. You're still, even when you're touring around, you're still, the business filter is always on. So, What takeaways did you find when you were traveling? I think one of the most interesting things and one of the themes that is sort of in the background right now, though I think it is a real macroeconomic trend, a friend of mine named Sean Ryan who lives in Shanghai has written a book and it's called The End of Cheap China. And it's basically the transition that China has to make from being a cheap commodity, you know, the manufacturer of cheap commodity.

commodities to being a country that's got a lot of brands. It's got a, you know, that's a little bit more higher market. And part of that is that a lot of that cheap manufacturing just because of the labor costs in China is moving elsewhere. And it's moving elsewhere in the region. And one thing that I had not seen before that I saw this time in Taiwan, in Taiwan, excuse me, in Vietnam, just north east of Hanoi, you go down a road and there are. are just factory after factory after factory of low tech to high tech goods. It's Hewlett Packard is there. Foxcon is there, which makes the guts for a lot of Apple products. I mean, they are, it is 20 miles of factories, which is something that the only other place that I have seen that is in southern China, which has long been the manufacturing engine of the world. So that trend is real.

Now, Vietnam's a heck of a lot smaller than China has got a smaller population. It doesn't have the infrastructure that China does. So I don't think that this is a fast trend, but it is a real one. Do you think that this bodes well for companies, U.S. companies and others, who are making a bet on a burgeoning economy in China or rather a growing middle class in China? Or is that such a long-term trend that to try and make a play on it in the next year or two is senseless? Yeah. You know, China is – it's actually something I'm writing about for declarations this month and talking about some of the trends in China. One thing that's going to happen in China – and this is sort of – you know, this is sort of outside of the purview of my vacation, if you will.

But China has, because of the one-child policy, it's been a tradition in China where the children take care of the parents. There really is no social safety net. I was going to say umbrella, but it's more of a safety net. In China, there are only about a million elderly Chinese who are in institutionalized care now. But if you look at the one-child policy, what's going to end up happening is that you're going to have one child who's going to be responsible for six to eight elderly people. And they can't do it. And so one of the trends that you're going to see in China, I am almost definitively sure, is that you're going to see an enormous amount of weight put onto the social network in China as millions and millions of elderly Chinese. look to the state to take care for them. And the state doesn't have to do that now. And so the burgeoning

middle class in China is also looking at what is potentially a massive demographic time bomb. And it's because of policies that were put in place with the best of intention and probably have had different effects. But this effect is something that I just don't see how China is going to get out of. So when you're talking about the rising middle class in China, there are things that China is not paying for now, that they're going to have to figure out how to pay for in the very near future. You're listening to Motley Fool Money talking with Bill Mann, the portfolio manager at Motley Full Funds. You mentioned Apple a little while ago. Next week, Apple on September 10th is having an event, presumably, to unveil the new iPhone 5S. But there are rumors that they're going to unveil a low-cost iPhone.

And part of the reason there are those rumors is because on September, 11th, there's an event that Apple is having in Beijing. Potentially, the story goes with to strike a deal with China Mobile, which has, I don't know, somewhere north of 730 million customers. Yeah. That's kind of a lot. That's kind of a lot. If you have 730 million of anything, I mean, I guess, you know, maybe accepting brain cells,

but anything, that's kind of a lot. Do you think that we've talked before about the whole notion of, Should Apple have a low-cost iPhone? And there are people saying no, because their brand is all about luxury and the sleekness, and they can't go to the low end. But do you think ultimately, if that is, in fact, what's going to be announced, that ultimately it just became a numbers game and they couldn't pass up the opportunity? Well, I don't even know that it is an opportunity because Apple does not have that same brand cachet.

And they do not in China that they do elsewhere. Apple has essentially lost in China. I mean, Samsung's beat them. The low-cost Chinese options have beaten them. Apple is a, they don't have the ecology and they don't have the same brand and pricing power that they do here. So if they want to get into China, they have to play on Chinese terms. I mean, not, you know, to make a really perhaps strange allegory, when Nabisco went into China with Oreos, they thought, well, we'll just put Oreos everywhere and Oreos are kind of. awesome and people are going to buy them. But in China, there's a completely different taste profile. And so they started doing Oreo like crackers and rolls and things of, you know, things of that nature in order to meet the Chinese market. I think Apple, it's not even an opportunity for them. This is, it's almost a Hail Mary for them. They have, they have not won in Apple. I mean, in China,

they do not have the brand cachet there that they do in a lot of other places. Do you think it's a bigger Hail Mary than Microsoft paying $7.2 billion for... Oh, no. Oh, no, no, no. That's a bigger one? I don't even know what to say about that. I mean, I guess for Nokia, they got to the point. And Nokia did so...

Honestly, I think Nokia has done some pretty interesting things over the last few years, like putting out a smartphone that had a higher-end camera with a higher-end lens on it, Because that's the one of the things, for example, that is still, although the camera's on, you know, for example, the iPhone, they're pretty good. The lens is not. And so it was an area where they felt like they had to go. So, and none of it's worked. I mean, none of it's worked. So, yeah, that's a much bigger, Hail Mary. Bringing it back to the United States recently, Detroit, which is one of our largest cities, declared bankruptcy. Maybe. And instead of freaking out on Wall Street, the U.S. stock market just whistled past the graveyard and hit yet another record high. What did you make of that?

One, I guess it's a sign of how much Detroit has, Detroit, the city itself, has ceased to be an economic engine in the U.S. But if you think about it, we've had the market freak out because of failed cocoa crops. in Ghana. I mean, portions of our markets have gone badly for things that seem like they're a lot smaller than a major U.S. city going bankrupt. For example, a major U.S. city going completely bankrupt. So, I mean, it is certainly true that the city of Detroit has become a much smaller part of the economic engine of the U.S. And that to me, that to me is sad because I've, you know, I've spent a fair amount of time in that area. I'm not from that area, but I've spent a fair amount of time there. it's a city that has all sorts of potential with the right type of leadership.

I mean, and it is the case now, oddly enough, that the Detroit housing and downtown Detroit is one of the hottest real estate markets in the U.S. I mean, people are buying tons of buildings. Dan Gilbert from Quicken has bought several buildings and is moving a lot of Quicken operations back to the city of Detroit. But I also think it has to do with the distortions of the market that are being, you know, that, that, that, that are happening due to, uh, Fed policy in terms of, uh, in terms of fiscal and monetary policy that is, that is overriding almost every other input into into the markets. And that to me is a very scary thing because it's almost scarier to me the, the fact that people are not reacting to this than if they do. did. Because if there was a proper reaction to this, you would have, you know, the discounting mechanism would work. And I think the discounting mechanism is being overridden right now. So on the last couple of times I've been on the show, you said, okay, are you nervous? And this is really ultimately what I'm nervous about is that when there are issues like this, they kind of

have to be reacted to. And if they aren't reacted to, that's, you know, that's, that's, that's a sign to me that all is not right. And if all is not right, you know, and if we are in a situation where the Fed believes that nothing is allowed to fail in this country, then we're not really on the right track. You can always drop us an email. Radio at fool.com is our email address. Got an email from Tim Kasby in Russia who writes, I'm getting 8.75% for six months, a six-month fixed deposit here. Is this because of the risk built into Russia? Should I keep my money here or move it to the yes for 1% on fixed deposit and risk on the stock market?

You remember the last time anything was 8.75% here in the U.S.? No, I honestly don't. No, I mean, yeah. So the answer to Tim's question is yes. He should keep his money there? No, just yes. Oh, okay. Yeah. The prime rate in Russia is 8.25%. And that is, you know, and in the U.S., it's, you know, it's basically zero. So the 8.75% is a spread that he's getting above the prime rate in, you know, in Russia. And the reason that he's getting that that rate, and I assume, although he didn't say so, but it would it would follow for me that he's got it in local currency, which means that he's exposed to.

all sorts of inflation risk, currency devaluation risk, all sorts of different risk inputs. I mean, the global market, even though the Russian interest rate is set by the central bank, the global market on that side, on the banking side, is pretty good about not giving away money. So if you are paying that much of a higher rate, there's usually a pretty good reason, and it's macroeconomic in nature. To read more from Bill Mann, you can go to foolfunds.com and sign up for declarations, which is this free monthly newsletter. Also, I should mention September 24th, the semi-annual shareholder call for monthly full

funds is coming up. That's open to the public. Anyone can listen. Don't have to be a shareholder. And ask questions. And ask questions as well. And before we go, I just have to say thank you because you were thinking of me on this trip.

You brought me, I have here in front of me, two cans of Pringles. one from Cambodia, one from Vietnam, I think. Taiwan. Taiwan. Salt and seaweed Pringles and wasabi and mayonnaise. Yes. Yes, I was pretty excited about this. During the break, we sampled them.

Good God, they are tasty. I know. It really blows me away. First of all, good work, Pringles people. It really blows me away the flavor profiles that exist elsewhere in the world. And every time, the reason they have them in places like, well, this is going to be popular here. But you know what? I think good kind of should be popular everywhere.

And I'm particularly the wasabi mayo, I would be all about. Bring that to the United States. That's a little, that's a freebie for you, Pringles. Bill Mann, portfolio manager, Motley Fool Funds. Thank you for being here. Thanks for having, Chris. Coming up, we'll give you an inside look at the stocks on our radar. You're listening to Motley Fool Money.

As always, people on the program may have interest in the stocks. talk about, and the Motley Fool may have formal recommendations for her against. So don't buy our sell stocks based solely on what you hear. I'm Chris Hill. Join me in studio once again, Jason Moser, Matt Argusinger, and Ron Gross. Guys, it is that time. Once again, time for the stocks on our radar. Ron, you're up first. What do you got this week? Got to go Apple. Got to go Apple, Chris. Is that that little tech company on Silicon Valley? That little AAPL company, big day on Tuesday. We'll finally get to see what they unveil, whether it's one phone, two phones, Apple TV, the watch. We'll see where we go.

And I think it's important, not in the sense of what happens on that date. Does the stock trade up or down? Are people expecting? And will people be disappointed? But is Apple going to regain its growth trajectory once again and become, you know, our investors are going to become fans once again? We were talking about the smartwatches earlier. I should mention our engineer Rick Engdahl had what I think is a brilliant theory, which

is that really Apple just pushed out this rumor on their own a year ago that they were going to make a smart watch and so everyone rushed to go and then they have no idea of doing it. They'd come out and say, that's a terrible idea. Why would we ever do that? I so hope Rick is right on that one, because that would just be devious and brilliant. Matt Argusinger, what do you got? All right. Well, Lulu, L-U, L-U, obviously suffered a bit of a transparency problem a few months ago.

But on. Since then, the stock's been a bit of a laggard. Christine Day, we know the CEO is going to be leaving soon. So their earnings next week. Kind of give us indication of how stores are doing, how the apparel's are doing, and see if they've ride the ship a little bit. Who would want to take that job as CEO? It seems to me, and we've talked about this before, that she did such an amazing job of building

the brand and really building this space. But now that you've got Under Armour and other companies coming in there really competing, some CEOs are an easy act to follow. It seems like she is going to be an incredibly tough act to follow. Couldn't agree more. Very tough act to follow. Jason, what do you got this week? Yeah, we talk about Apple and what's next after the iPhone and the eyewatch or whatever.

I always kind of think of this I-house thing, right? You know, smart homes. And a company that just recently IPO called Control 4, ticker is CTRL, they are in the business of smart homes. And so they make the big sort of central devices, the brains of the home, that you would then hook your equipment up to, whether it's climate control or security or entertainment or what have you. So you could control all this stuff from your smartphone.

And it crosses platforms, so it works with Google's Android and Apple's operating system as well. Really a neat company and a neat space. It kind of plays into that greater internet of things, sort of notion that we've talked about before. Machine to machine. Yeah, and so they have a big partnership with Cisco. Cisco holds a stake in the company as well. As I said, brand-new IPO. They just had their first earnings call, but a lot of neat technology there.

And really, what looks to be a significant market opportunity for years to come. And I think a smart house is legit. So I'm taking the smart house over the smart watch. Ron, I think you're doing some renovation on your home recently. Do you want to do a little retrofitting and make your home even smarter? I would love that, actually. I'm sure it's not cheap, though.

Well, actually, that's a good point. Their biggest competitor at there is savant, and Control 4 is the one that makes it a bit more affordable. All right, that's going to do it for this week's show. The show is mixed by Rick Engdahl. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening.

We'll see you next week.