Motley Fool Money - Motley Fool Money: 10.10.2014

Episode Date: October 10, 2014

Costco hits an all-time high, Apple gets a letter from Carl Icahn, and semiconductor stocks send the Nasdaq lower. We analyze the latest headlines and talk with best-selling author Daniel Levitin about his latest book “The Organized Mind: Thinking Straight in the Age of Information Overload“.  Learn more about your ad choices. Visit megaphone.fm/adchoices

If you're a small business owner, you already know what it takes to keep everything moving. You're juggling customers, invoices, and about 100 decisions every day. Thankfully, taxes don't have to be one more thing on that list. With Intuit TurboTax, you can get your business taxes done for you with a full service expert. TurboTax matches you with your dedicated tax expert. Who knows your industry understands your business write-offs and gives you the personalized advice your business deserves. Upload your documents right in the app, hand everything off, and still feel like you're in the loop the whole way through. You can even get real-time updates on your expert's progress right in

the 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. I'm Chris Hill joining me in studio this week.

From Motley Fool 1, Jason Moser, from Motley Fool Pro and Options, Jeff Fisher, and for a million-dollar portfolio, Ron Gross. Good to see you as always, gentlemen. Hey, hey, how you do? Earning season is officially here. We will dig into some of the latest results. Best-selling author, Dan Leviton. will help explain how we can be more productive and why multitasking is, in fact, bad for us.

And as always, we'll give you an inside look at the stocks on our radar. But we begin with the increased volatility in the market. Microchip technology is a relatively small company in the semiconductor industry. But after warning that third quarter sales will be lower than previously thought, semiconductor stocks across the board were being sold off on Friday. Jeff, I can understand this if we were talking about Intel making this kind of warning. Intel, micron technology, across the board, much bigger semiconductor companies are being taken down. What's going on here?

Exactly. Little microchip, which has about $560 million in quarterly revenue, is taken down the entire sector. And the reason why, really, Chris, is they book their results on a sell-through basis, which means they look at results based on the end customer. where most the industry looks at sell-in. So Intel sells into a PC manufacturer. They count that as revenue. So this company is a good leading indicator to weakness on the customer end, which may then trickle through and hit all the other chipmakers down the road soon.

Secondly, they said September was weak, and September is usually a strong month, but it was weak because of China. There was actually a sequential decrease in revenue in China. So that was a surprise, too. Now, to keep it in perspective, though, they lowered their revenue guidance to about 3.5% below the midpoint of their earlier guidance. So it's a small adjustment. It's about a $20 million difference on $560 million in revenue. So it's fairly small.

But they do expect a slowdown in chips as a result, and it may take a few quarters, they say. Usually they return to growth in about two quarters. So, you know, keep it in perspective. I'm trying to, Ron. But when I... You're not trying hard enough, Chris. Honke him off the leg. That's part of what's freaking me out here is that this was not a huge drop-off in guidance,

and it's taking all of the stocks with them. Let's peel back the curtain. This is what really happened to me this morning. We owned Intel. I saw it was down. I saw all the stocks were down. Jeff and I were scratching our heads. What's going on? What's going on? We figured out it was this relatively small company. Then I started to read. I see the CEO saying he thinks it's the beginning of a down cycle in semiconductors. So what do I say to myself, do I want to own Intel, which I'm up 40%? percent on? Do I want to own that through the cycle? Do I want to bother? Or do I want to book my 40 percent profit, move on, reallocate it to something else? That's happening all across Wall

Street right now with traders that are much more have their hands on the triggers than we do here at the Fool, and they just make quick decisions. And it's a notoriously cyclical industry to begin with, right? So, I mean, this volatility, along with the knowledge that it is extremely cyclical, I mean, you probably do have a lot of people clicking that sell button today just to get out of dodge and look for greener pastures. That's probably true before they even think about it. And if this is really just a short blip, which I think it is, because long run, technology is just taking over the world, of course. More chips. This week, billionaire activist investor Carl Icon sent an open letter to Apple

CEO Tim Cook in it. Icon made his case for why Apple should be buying back, and I'm quoting here, Ron, a lot more shares and sooner. Does he have a good case? Well, they are buying back a lot of shares and returning capital to the shareholders, $74 billion so far in counting. It's going to go up much higher. It's not high enough and not quick enough for Mr. Icon. He came out, I think, through tweeting the next day and put some details to it. He said he would love to see $100 billion repurchase from their $133 billion war chest. He said he doesn't think that'll actually go that far, but if they did it would be a game changer. I think it's too much, quite frankly. I think his analysis is interesting. He falls short when he goes to valuation, in my opinion. He takes

next year's earnings estimates and he slaps a 19 multiple on it. It's a little simplistic for me. He gets him to $203 a share, which means the stock should double from here. I think that's way out of whack. I think it's maybe 10 to 20 percent undervalued. A double it is not. I was going to say, Jason, you look at some of his thinking here. There are some rosy projections baked into Mr. Icon's analysis. Of course, and I think it's very self-serving. I mean, first and foremost, I mean, did you actually read this tome? I mean, it was a, Carl, write short, man. Come on. Given his use of Twitter today, I just think he would probably recognize the value in writing short and getting his point across because he lost me before I ever really could finish it. I mean, I went down to the valuation. I saw the 19 multiple that you saw, and I thought, wow, that's a pretty robust assumption for a company that shouldn't be growing that fast. So, you know, I mean, I think it's always. It's interesting to see this happen. People get out there and write these little letters to companies. I don't know how much attention Tim Cook would pay to something like this. I think that Apple's doing a wonderful job. Yeah, to assume that this company is going to be able to double just via the levers that Carl Icon has talked about, I think is a bit out of touch.

Exactly. To say the largest company and the most valuable company in the world is worth twice as much is quite a reach. But Ron, do we know if he's making that claim after Apple buys back half their shares? Their earnings estimate, I didn't actually look at it. I don't know if they provided the details of if their earnings per share estimate for next year assumes a reduction in share count or not. That's a good question. So, no, we don't know that. Moving on to the technology of beverages, shares of soda stream down 25% this week after the company warned, third quarter revenue is going to be much lower than they originally thought. How crucial is

the holiday quarter now? Well, it is crucial, and I don't think it's going to turn out very well for these guys. I think that investors who are thinking this may be a great time to load up on shares here should probably step back and rethink that. I mean, the catalyst for Soda Stream for the past couple of years has been the market opportunity here domestically. It's not been something that really had taken the U.S. by storm yet, and the idea was that it would find its way into more households. More time has told us that this is not really the case. Households aren't really, you know, buying into the Soda Stream sort of ecosystem and buying the machine and then all of the cartridges and the flavors that come with it, you know,

and we're seeing that through, you know, holiday season after holiday season. They are discounting the machines, trying to move them. Margins are getting killed. You know, when you see a company like this ratchet back on top line guidance as much as they did. I mean, it's from $155 million to $125 million. That's very significant. It's very telling. And I think it certainly is a foreshadowing of what I think is going to be very tough holiday season for them. So be very careful. I think the best option at this point for this company is either private equity or some other bigger company that finds some value in what they have just comes in and buys them up on the cheap. But yeah, they've had a really, really tough go over the past couple of years. But you can understand why someone would be

tempted. The stock has literally never been as cheap as it is today. Yeah, I absolutely can. And I mean, you know, we refer to falling knives all the time and tell people not to catch falling knives. You know, stocks are cheap for a reason. And you need to go in there and assess that reason and see if you can figure out the catalyst that's going to turn that thing around. And so to Stream's case, I don't think that's so clear cut. Remember, it's always darkest right before it goes totally black. And totally black is what you're trying to avoid, right, Ron? Bill Hewlett and Dave Packard got their degrees in electrical engineering from Stanford University in 1935 and started their own company.

But what started during the Great Depression is about to come to an end because this week, Hewlett Packard announced the company will be splitting into two separate businesses. One will focus on personal computers and printers. The other will focus on corporate hardware and services. Jeff, what do you think of this move? Because right when it was announced, shares were up about 6%. And then throughout the rest of the week, they gave those gains back. I see the logic in selling off shares. You have to give Meg Whitman a lot of credit for what she's done since late 2011

in kind of stopping the bleeding at Hewlett-Packard and turning around some of the financials at least. Shares are up nicely since she started in 2011. But she hasn't made a compelling case for a split-up. She's just saying we're going to be two big Fortune 50 companies. One is going to be called, and these are horrible, Hewlett-Packard Enterprise, and the other is going to be called HP Inc. And the reason she gives is there are strategic advantages in terms of focus, being able to better compete, faster responding to customers,

and we ought to be able to tie rewards more closely to results for employees, all of which you could do if you're just one giant company as well. You don't literally need to split into two and have two separately traded stocks. The devil is in the details here. How are the financials going to look at each company? But I think both are starting at a disadvantage. Plus, you have a risk of customers, especially enterprise customers, jumping ship or not making big purchases with HP over the next 12 months during this breakup,

because that's how long it's going to take. And there's a lot of uncertainty there. Like, which 1-800 number do you call when you need help? I would have went with H.P. Mandalay's. I like that, Nick. One of the details we do know, though, Jeff, is which company Meg Whitman is going to be CEO of. She's going to the enterprise one, which tells me that if I'm a shareholder, that's probably the one I want to hold on to. It's true.

Now you'll have these two stocks, and you do have to look at both and see if you want to keep one or both or none, because they're different companies on their face after this. Do you want to own a printing and PC company? this day and age, printer and PC company? Probably not. Do you want the enterprise company, which is getting squeezed by Oracle, still competes with IBM and all kinds of other giants out there? I don't know if you do. Drop us an email, Radio at Fool.com. Give us your suggestion for new names for HP, because HP Mondalese is good, but I'm sure our listeners can top it.

Coming up, two retailers, two very different earnings reports. Stay right here. This is Motley Fool Money. As always, people on the program may have interest in this. the stocks they talk about, and the Motley Fool may have formal recommendations for or against so no buyer-sell stocks based solely on what you hear. Welcome back to Motley Fool Money, Chris Hill here in studio with Jason Moser, Jeff Fisher, and Ron Gross. Guys, earning season officially kicked off this week, so let's look at two very different results from the retail industry. Shares of Costco hitting a new all-time high this week

after strong fourth quarter results. And Ron, everything looked good here. Profits look strong. the growth numbers look good. This is a company you watch closely. What do you think? Such a well-run company, and they continue to execute in what has been a very difficult retail environment that we've spoken about time and time again. You have comp sales up 7% and membership revenue up another 7%, operating income up 14. Most importantly, perhaps, is their retention rate remains really strong at 87%. I remind listeners that about 80 to 85% of Costco's operating, profit is from membership fees, not from shopping in bulk. So as long as they keep those retention rates high, the company gets to book those 80% of profits year after year after year. It's an

incredibly strong business model. They also seem to be a good job of opening new locations. They opened 30 in the fiscal year that just closed. They're projecting another new 35 locations over the next fiscal year. It really seems like they're managing their growth well, too. And growth well overseas continues to be a big opportunity. Most of the stores are domestic at this point. We're probably at about, I want to say, around 650 stores. We think 1,100 is attainable over the longer term, with many of that being international. I said something on Twitter about this thing, and somebody replied with hashtag hot dog and soda.

Like, they're still really known for that. They really are. I don't believe the price hasn't changed. $1.15. Jim Senegal, big fan. Second quarter revenue for the container store was lower than Wall Street was expecting, and maybe worse, Jason. Same store sales were down almost half a percent. Speaking of down, shares of the container store are down 30 percent this week.

Ouch. Yeah, I feel like I got a couple of dogs here this week. But, I mean, it's been a brutal freshman year for this company. I mean, they went public, and it's been pretty much tough going ever since. But, you know, again, I would advise investors who are looking at this. is a potential opportunity. Be careful. I mean, this is not, I think, a soda stream situation where the company's market opportunity maybe isn't really going to become what we thought it was. But this is a company that still, I think, valuation is playing a very key role here.

These guys are still selling it 30 times full year estimates. For a big box retailer, that's not cheap at all. And, yeah, we were talking about what the quarter brought. I mean, They guided down sales guidance, negative comps, balance sheet with debt levels that at least have to be in the conversation when looking at this company. You know, I don't know what the short-term catalyst is that turns this thing around other than the fact that they're going to be coming up on some pretty low comps here in the coming quarters because they've turned in some pretty uninspiring numbers thus far. Now, that's fine. But again, I mean, they're adding more square footage, and I don't know that that does anything to that comps number unless they can really actually juice sales. I did read, actually, interestingly enough, where Kip Tindall is actually now looking at potentially eliminating guidance altogether from their practice, which, you know, I like that. I mean, I tend to believe that this is a company that will do well in the long run because they are very long-term thinkers.

And so if they did something like that, I would be encouraged if I were a shareholder, which I'm not. But, yeah, I do think that we are faced with a very touchy consumer right now. He's consumers not so confident right now. And in a $2,000 container solution, I don't think is at the top of the list for these guys. So you just got to keep that in mind, keep in mind what they're selling. And, yeah, take a much longer time perspective with this company, I think. Yeah, Jason, you're right. Next year they may have, they'll have easier results to compare to.

I wonder, and this thought is kind of out there, but I wonder about the long term, does the container store compete with the cloud? Stay with me here for a minute because we no longer are storing CDs, let alone cassette tapes, or we have containers full of photos at our house that we no longer produce anymore. All kinds of things are becoming smaller and digital, and there's less need to store things. That's a very good point. I mean, I think the other consideration you have to at least throw out there, I mean, there are competitors out there. I mean, yes, the containers are focuses on containers. But you go to something like IKEA, Target, Home Depot, those.

They sell containers, too. They do differentiate, I think, based on service, though. The customer service is pretty strong. You can compare it to Nordstrom's versus, you know, what have you, a Macy's. So you are paying for some of that customer service for the experience, but tons of competition, as you said. I appreciate that. Because, I mean, if I have the need for a container solution, I mean, I'd like to be able to go somewhere and have them offer up some ideas in a way to maybe come and have it professionally. installed. So that's all great. I mean, again, I think that they are doing something that's

pretty unique, and I don't necessarily know what the Pepsi is to their Coke, because the competition out there isn't necessarily their competition person. I mean, they compete, but there's no other company out there that really specializes in containers like they do. Container tip. Container tip. If your shoes are all strewn at the bottom of your closet, go to a container store, get three boxes. We have three in our family, one box for each person. And then you can always find your shoes really quickly. Jeff Fisher, adding value. We'll edit that out in post.

It's nice. We're coming out containerology. We got just a couple of minutes left. Let's get to the stocks on our radar this week. Ron Gross, what do you got? Got horsehead holding, ticker symbol zinc, Z-I-N-C. Short-term problems with their brand-new production facility in North Carolina has hit the stock. That's along with some geopolitical things going on around the world.

Some concerns about China's economy. It spells opportunity for us. The stock is around 15. I think it's worth probably 20,000. 50% upside from here. Jeff Fisher, what are you looking at this week? I'm just going to shout out to Pepsi, tickers, PEP. And the only reason I am is because they announced good results this week, a record high to the stock.

And they said they don't want to break up PepsiCo because Mountain Dew and Doritos are frequently sold together. It's the best reason I've ever heard. But they are going to keep getting that argument push back at them. They will. Yeah, break it up, break it up. But no, snacks and soda. Hey. We got about 30 seconds, Jason.

What are you looking at this week? So, Wayfair.com just went public. You know, ticker is W. The IPO saw shares close it around $38. Ever since then, it's just been a downhill fall. $38 down about $25 today. So the price has started to get me a little bit more interested in this company. But this is an e-commerce play.

They run web properties, including Wayfair.com, Joss and Maine, all modern dwell studio, Birch Lane. You know, they're playing into that big home furnishings market. And we are seeing more traffic going online for items like that. Two co-founders still involved with the business running the show just topped out at a billion dollars in sales. I think it's an interesting play into the bigger long-term trend in e-commerce. I'll definitely be keeping an eye on it. All right, guys, thanks for being here.

Coming up, the science of staying organized. Best-selling author, Daniel Levitton, is next. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Dan Leviton is a professor of psychology and behavioral neuroscience at McGill University. He's also a New York Times best-selling author, and his newest book is The Organized Mind, Thinking Straight in the Age of Information Overload. Dan, thanks so much for being here.

Oh, it's my pleasure, Chris. There are a lot of books out there about how we can all get better organized, but your book really gets into the science behind how our brains work. How does, I guess my first question is, how does understanding neuroscience help us get better organized? Well, as you say, there are a lot of books out there that purport to tell us how to get better organized, how to be more focused, how to be more productive, but the vast majority of them aren't based on scientific principles at all. They're just somebody's own idea, and many of those ideas aren't even tested before they write about them. Where I'm coming from, as a cognitive neuroscientist, my occupation is studying thinking for a living, how the brain works, and, uh, In some cases, how it doesn't work. And people in my field have learned a lot about why the brain pays attention to some things and forgets others. And that became the foundation for writing a book about how we could use the science of attention and memory to help us all in our daily lives. You mentioned attention and memory, and one of the things your book gets into is new research into those areas.

So let's start with attention. What do we know now about attention that we did in a few years ago? Well, one of the big things is that we all experience decision fatigue. And this is a biological constraint in the brain. Every time you make a decision, you use up a little bit of the brain's fuel, which is glucose. And unfortunately, the biology of the brain doesn't distinguish between unimportant decisions and important ones. So if you make a bunch of unimportant decisions, like whether you use a green pen or a red pen or whether to eat honeynut Cheerios or multi-grained Cheerios, after a sequence of such trivial decisions, we find that people exhibit poor impulse control and exercise poorer judgments in really important decisions, such as whether to put your retirement money into stocks or bonds. Well, I mean, that's a no-brainer.

I mean, who would choose multi-grained Cheerios over Honeynut Cheerios? I thought you were going to go off about the stocks and the bonds. No, I think people have heard me do that before. You know, is that why, I mean, there's the story about Albert Einstein where he had seven different copies of the exact same wardrobe? Is that why he did that? Was Einstein sort of early to the table on this one? That he didn't want to waste one second thinking about what clothes he was going to wear? I'm guessing that that was it, although he didn't have the neuroscience behind it.

You know, my colleague Oliver Sacks adopts a kind of similar rubric, which is that he has the same thing for lunch every day. If you don't have to make these trivial decisions, it lightens the neural burden so that you can really focus on the important ones. Now, I wouldn't advocate necessarily that you wear the same kinds of clothes all the time or eat the same thing every day. That's a very personal choice. But what the science does suggest is that if you have important decisions to make, make them early in the day.

What do we know now about memory that we did in a few years ago? Well, we know that memory is more limited than we previously thought. That is the short-term working memory, the number of objects you can consciously deal with at any one time. And this is where memory and attention intersect. It turns out that we can't multitask. We can't really do a bunch of different things all at the same time. same time. We can keep track of three or four things, and beyond that, something starts to fall out. So a number of experiments in the workplace show that people who are multitasking

actually get less done at the end of the day than people who use a dedicated focus to one task, finish it, and then go on to the next. Multitasking, though, seems like one of those things that, I don't know, it seems like people have a hard time not doing it. I'm just, I'm just one. wondering why that is? If it, you know, if it is something where we're really not being more productive and, in fact, we're being less productive, why do you think it is that we keep doing multitasking? Two reasons, Chris. One is that we're under the illusion that it's working. And so if your brain is telling you, I'm good at something, you keep on doing it. But as a neuroscientist, I can tell you that one thing the brain's very good at is self-delusion. So just because we think

that it's so doesn't make it so, and the experiments bear that out, both from brain scans and from workplace experiments. The second reason we do it is that it makes us feel productive, and it feels good to us to be doing all these things. There's a neurochemistry behind this. Every time we can tick off a little task on our internal to-do list, we get a little shot of dopamine. And every time we pay attention to something new, we get another shot of dopamine. Dopamine is the chemical in the brain that makes us feel good. It's what mediates pleasure. And we set up what is a physiological dopamine addiction loop, where we crave more dopamine, even though the dopamine is being produced for things that aren't productive. You're listening to Motley Full Money talking with Dan Levitin.

His new book is The Organized Mind, Thinking Straight in the Age of Information Overload. One of the things your book gets into is sort of how we can be better at organizing not necessarily learning new mental tricks. And I wanted to get into some of the tips from your book. And the first, this seems to, in some ways, go against the rise of the information age. One of your tips is use a paper to-do list. Yeah, so I do want to point out that in the book, I'm not prescribing or suggesting or recommending a bunch of high-tech solutions. to increase productivity.

You don't have to go out and buy a new computer or go to the stationary store and get a new filing cabinet and a bunch of color-coded folders and tabs. I'm not talking about that. In general, I'm talking about very low-tech things that any of us can put together in an afternoon. And index cards or notepads is one such suggestion because we now understand that the neuroscience

of writing things down by hand allows for deeper encoding, because it requires a lot more, well, what we call deep processing, a lot more neural circuitry to write something by hand than to type it. And so you're apt to remember it better. And the other thing about writing it on paper is it's easier if you use index cards to resort them, put them in different piles, and put them in different stacks, and to have them in front of you when you're working at your computer.

The problem with making computer lists, although that's better than nothing, is that it's a little bit more cumbersome to cut and paste the items if you want to reorder them, and they're often hiding in a window behind the one you're working on. One of your other tips is music to my ears, which is take breaks. Just so I don't get in trouble with my boss, how many breaks are we talking about? Well, this again gets back to the science of attention and the physiology of the brain. The brain didn't really evolve to stay full. focused for long periods of time like we sometimes ask it to do. We push ourselves these days.

I think all of us feel like if we stop work for even just five minutes, we're going to fall irretrievably behind. And the fact is, if you stop and take a break of about 15 minutes every two hours, it allows you to hit a kind of neural reset button in your brain so that when you come back to your work, you'll find that you're more creative, you're refreshed, you've replaced, you've replenished some of the depleted neurochemicals. And a number of studies show that at the end of the day, people who took these 15-minute breaks every couple of hours not only got more done than people who plowed through,

but their work was of a higher quality and more creative. This is even more so true with naps. A single 15-minute nap in the afternoon gives you an effective IQ increase of 10 points. I don't know about you, but I would really like to have 10 points extra IQ. I think all of us would like an extra 10 points on the IQ. I mean, in my line of work, that's the difference between getting tenure and not. You mentioned the end of the day.

I think a lot of people have trouble leaving their job at the end of the day when they go home, whether it's to their own place or to their family or friends or whatever. How big a challenge is that right now? Because it really does seem like, particularly with technology, And you can get your email on your smartphone that we're so connected that it may be harder than ever before to leave work at work. You're absolutely right. So we're all being asked to do more than ever before, both at work and at home. And I think a lot of us feel when we are at home that we can't be fully there. We've got these nagging thoughts in our head about things at work we didn't finish,

calls or emails we didn't return, worries that maybe we didn't solve a problem that we could have. And then when we're at work, we're thinking about all the things we didn't get to do at home. And so as a result, you end up being really in neither place fully. And when I'm talking about trying to get better organized, I want to be clear that I'm not talking about creating a bunch of mindless automatons who were rigidly strapped to a schedule all the time. I'm talking about a few simple changes we can make in how we structure and organize our time so that when we're at work we're more productive and efficient, which allows us to really close the door on work at the end of the day

and be present with our loved ones in our hobbies and in our leisure activities. Paradoxically, I think being more efficient and productive allows for more time to be spontaneous and creative. I can't believe I'm the only person who struggles with email, and I'm curious how you organize your own email. What's something that we could all do to sort of keep our email better organized? Well, after talking, I interviewed a lot of CEOs and government leaders, military leaders, generals and admirals, some cabinet members in the U.S. government. and these are highly effective, very, very busy people. And I'm adopting two of the tips that they seem, many of them seem to be using. I've started doing this in the last couple of years.

One is, like you, Chris, I think I get a lot of emails that are not really urgent. I mean, things for something that's going to happen a month from now or just something that's informational that I don't really need to interrupt my work to look at. And then a bunch of stuff that's nonsense, like videos of cats playing the piano. Do you get those two? Keyboard cat. Who doesn't love keyboard cat? Exactly. So I opened up a separate email account under a private address, and I gave that to only about eight or ten people who I want to be able to reach me urgently.

So that includes my loved ones, my boss, coworkers. and I further instructed them, only use this account if you need to reach me right away. Use the old account that you had the address for for everything else. And so that's the first stage. The second is that the other account, the big one, where I get hundreds of emails a day, I turn it off most of the day.

And I have a partitioned period of time where I deal with emails, an hour in the morning and an hour in the late afternoon. And then I just plow through all of those emails and I prioritize them and I either reply or file them. But what it means is that I'm not interrupted every few seconds during the day as I'm trying to work or for that matter trying to enjoy some leisure time. Coming up more with Daniel Leviton, this is Motley Fool Money. You're listening to Motley Full Money talking with Dan Levitan. His new book already in New York Times bestseller is The Organized Mind, thinking something.

straight in the age of information overlord. I know what Area 51 is. What is Area 47? We're not supposed to talk about that one either. Oh, we're not? Are aliens involved in that one too? Area 47

is the not very poetic name for a part of the brain that I've been studying for the last 15 years, just behind your temples. It's a little sliver of tissue that tries to predict what's going to happen next in the world. And you can imagine the evolutionary advantage of this.

It helps you to figure out if that lion running is running towards you and about to attack or running in another direction. And it's looking basically for structure and patterns in the environment. The interesting thing about this is that it helps to modulate dopamine, that so-called fulgled hormone we were talking about earlier. when we are listening to music or when we're reading a novel, watching a film, that structure is trying to figure out what's going to happen next. If the piece of music, for example, doesn't hold any surprises, Area 47 shuts down because it's bored. If the music is completely surprising and you have no idea what's ever happening,

area 47 shuts down because it's frustrated. it has to hit just the right balance of familiarity and surprise or of predictability and unpredictability to keep it happy. And this has really big implications for the workplace. What we now know, again through neuroscience research, is that the happiest workers in general are those who work in a job that's somewhat predictable, but also has a few well-structured surprises

that allows them to exercise, ingenuity and some initiative. Workers generally don't like to feel that their work is exactly the same day in and day out. They and their brains savor the opportunity to exhibit some judgment and expertise. Your day job is, as a professor, I'm curious, how organized are your students? And if they're like a lot of college students and maybe not quite as organized as they could be, Is that a point of frustration for you? No, not at all.

I mean, I recognize if they're in a university program, they're trying to learn things and trying to get better at organizing their lives. So they're eager and they're dedicated to learning. I do recognize that there are different systems and different styles that people have. So broadly speaking, some people are filers. They file everything. And other people are pilers. they put everything in stacks or piles.

And both systems are perfectly fine, depending on what you are comfortable with. With one exception, if you're dealing with paperwork or computer files, for that matter, that are shared in an office or educational setting, piling is usually not a good system because only you know where the piles are. So I try to train the students for that portion of their work that they're going to have to share with others, like me. they need to have a perfectly transparent system that anybody can navigate. Now, you're a neuroscientist, you're a best-selling author, you're also quite an accomplished musician. Do I have this right that in addition to playing the guitar, the bass, the tenor saxophone,

that you've been a session musician with, I don't know, little independent, small, struggling groups like the grateful Dead and Santana and Sting and David Byrne? What kind of double life are you leading here? Well, I've always had a passion for music and I don't want to overstate my qualifications there. I was a sound engineer and consultant for the Grateful Dead and Santana and Steely Dan. It's only in my later life as a neuroscientist that I've had the opportunity to perform live with Sting and with David Byrne. But it's true. I worked as a session musician in the 80s on a bunch of recordings. Maybe one of the more well-known ones was the soundtrack to the film Repo Man.

Before we wrap up, give me one music recommendation. It could be an album you're listening to. It could be a song you just learned about and it's in heavy rotation on your iPod. What's one music recommendation you can make? Well, you know, I'm sorry, I can't make just one. There's so many good things out there now. One of my favorite new bands is called Claire and the Reasons from Brooklyn. I'm loving a new album by Phil Claypool called The Strong One.

He's an artist out of Nashville. And Rodney Crowell has put out three stellar albums in the last couple of years, and he has a duet album with Emmylou Harris on the way. And these are all just as good as music gets as far as I'm concerned. The book is The Organized Mind, Thinking Straight in the Age of Information Overload. It is the latest in New York Times bestseller from Dan Levitin. So check it out. Dan, thank you so much for being here.

Thank you, Chris. Jack Daniel and Mr. Jim Bean, sat together on an old porch swan. Each day when work was done, they sit around. Before we wrap up, our mission here at the Motley Fool, to help the world invest better. We do that with this radio show, and we do it with investing services like Motley Fool's Stock Advisor. It is our flagship service. It's run by David and Tom Gardner, and it's a great way to get started investing. We've got a special offer for our listeners on Motley Fool's Stock Advisor. Just go to mfmoney.fool.com. That's mfmoney.com.

If you're a member of our services already, then you probably know someone who could use some help investing. So tell them to check it out. MFmoney.fool.com will help them invest better, I promise. That's going to do it for this week's show. The show is mixed by Gal Año Nuevo. Our engineer is Steve Broido. Our producer is Matt Greer.

I'm Chris Hill. Thanks for listening. We will see you next week.