Motley Fool Money - Motley Fool Money: 10.28.2011

Episode Date: October 28, 2011

European leaders make a deal. Amazon, Chevron, ExxonMobil, Netflix, and Under Armour report earnings. And BP returns to the Gulf.  Our analysts discuss those stories and share some stocks on their radar. Plus, Motley FoolUK Money Talk host David Kuo talks about the future of the EU. 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, and joining me in studio this week. From Motley Full Hidden Jem, Seth Jason, from Motley Fool Income Investor, James Early, and from Million Dollar Portfolio, Ron Gross. Guys, good to see you as always. Good to see you, Chris.

We've got earnings from Amazon, Netflix, Ford Motor, and more. We've got a look at a company that could be the next Nike, and we've got a few stocks on our radar. But we begin with the big macro. Guys, two stories from Thursday sent the market soaring. We had the report of European leaders making an agreement to deal with the sovereign debt crisis. Yes, a little golf applause for that. We also had the GDP report, economic growth in the U.S. grew 2.5% in the latest quarter. That is not huge, Ron, but it is nearly double the rate of the previous quarter.

It ain't bad, Chris. I've been doom and gloom. for, I don't know, a year, two years when it comes to the big macro. So I was actually pretty happy to see this. It was driven by consumer spending, which is interesting because on a similar... Aren't they the people with no money?

Right around the same time, we got a bad consumer sentiment report. Today we got a good consumer sentiment report. Did I say last week that that often is like completely opposite? It's very odd. One thing that is troubling about the number, because I can't be all happy about this. Of course not. Is that it was driven by the money that people have in savings

rather than people spending the money that they actually make. That's just getting back. Bottom line, why you nitpicking? We need to get people back to work. The unemployment rate has to get to come down if we're going to have a sustainable rebound. James, what do you think? Well, I think, Chris, I think it's funny that we are dipping into savings to spend. The sentiment is negative yet that doesn't stop people from actually spending.

God bless America. It's a true American virtue. I just hope it's going to come back around to actually support something. And as Ron said, create more jobs. Well, we did have, obviously, for the long term, a lot of us would like to see Americans save more, but this is sort of the worst time to be saving a lot more in terms of at least helping out the old economy. So, you know, it's okay if people are, it's better than going into Hawk, I guess, to support your economy. It perhaps bodes well for the holiday

season, which is kind of, you're going to be a big vendor? You know, that sounds like a yes. I'll pry open the wallet. What are you getting me? Yeah. Me too. Something nice? My disdain. Oh. James, James, in terms of the agreement that the EU leaders, uh, have in place. What do you make of that? Well, what's interesting is that the IMF and the ECB are not taking any haircuts on their debt. Instead, they are shoving it all down the throat of the private banks who are going to take this 50% right down,

which is actually not as bad as it sounds, because I'm sure these banks were kind of admitting that this... It's not as bad as half. Exactly, yeah. It's nearly half, 50%. They already knew that these weren't going to be repaid in full. So that's probably not too bad. The questions, I think,

are three. First, is this default? for CDS purposes, credit default swaps, are a lot of these $3.7 billion of these contrast acts standing, and does this really count as a default or not? If not, that's kind of jeopardizes the integrity of the CDS system. Second is who's next and what's going to, you know, is it Ireland, Portugal, and will the same precedent be set? What are the ripple effects?

And then does this mean Ron's going to cancel his European Villa party next year? I know. Never. You're listening to Motley Pool Money. We're here every week, but for daily analysis on the latest money news, check out our daily podcast, Market Foolery on iTunes and at MarketFoolery.com. Guys, let's move on to Big Oil. We had some of the big companies reporting earnings this week. Exxon Mobil, Royal Dutch Shell, ConocoPhill, Conoco Phillips, Chevron. Certainly, higher energy prices seem to be helping this group, James.

What do you make of the week in Big Oil? Yeah, we had a lot of oil reports come out at the same time. And sort of like Photoshop, these higher oil prices had a very flattering effect on how everybody looked, at least on the earnings level. But the production numbers told a different story. So earnings-wise, Shell and Chevron are the best, and I actually think they're still the best overall. Shell did not have falling production.

It was really the only one that did, and it had flat production, which was sort of like the new up. Chevron was down 5% production, Exxon down about 4%. Conoco Philips, 10%. So most of the other ones had minor profit games, but production fell,

and that's the number that I think we need to be watching. BP did not report earnings this week, but BP was in the headlines because the company got its first permit to drill in the Gulf of Mexico since the spill last year. Seth, I know that all of last year, whenever BP would come up, you were sort of in the company's corner. It's about, well, I own the stock. I got to cheer for it, right?

Exactly. No, BP is a decent operator, and they've still got some bills to pay. But, you know, they're going to learn from their mistakes. and so is everybody else. The important thing to remember is that if you drive a car, you don't have a whole lot of right to complain that this is a dangerous activity. All of the oil companies should take every measure possible to make this safer, but it's never going to be 100% accident-free.

So you don't feel less like the criminal on parole in your neighborhood, that BP is back in the Gulf? I don't think so. I think this could as easily have happened to somebody else, and something like this will happen again. Would you buy the stock here? I haven't looked at the price lately. No, I did look at it the other day.

Yeah, I think so. Shares of Netflix have fallen around 75% in the last three months. The company reported earnings at the beginning of the week. Seth, sort of looking back over the last three months, when you look at Netflix, it's been an incredible fall. How much of this fall do you think is attributed to sort of the marketplace and the rising cost of content? and how much of this is essentially self-inflicted wounds on the part of the company. There's the whole Quicksster debacle, poor communication. Yes, and yes.

You think it's all self-inflicted? Yes. Well, there's a whole lot going on here. They did shoot themselves in the foot and then in the other foot and then in the hand. And who knows where they were pointing the gun next? The real problem for Netflix, if we want to get the share price thing out of the way first, is that people were just insanely excited about this stock and kept buying it because kept going up and it was way ahead of the fundamentals.

We said that many, many times on this show. And so now what you have is a catalyst, or a couple of catalysts, which is Reed Hastings, screwing up major, not only on corporate decisions, but also in the way he explained those decisions. And then some of the strategy here, going head to head with Amazon's video streaming service overseas is going to cost them money. It's going to give them losses for the next few quarters. investors here weren't used to seeing that.

It scared them a little bit, and so they started selling. They had been selling on other news. What you have now, I think, is a lot of weak investors who were in this and enjoying the ride up, who are now looking at it and getting very afraid and saying, well, I can at least salvage my double if I sell now, and I think there's going to be continued pressure on the stock from here. Ron, what do you think? I can't believe it, but I think Seth is right. I think the missteps accelerated the problems that would have come anyway, and, for

perhaps from a stock perspective, made it even worse than it perhaps had to be. But there are fundamental problems with the model and the cost that's going to take to run this business and the very competitive nature of the business. And you can't make those kind of missteps when your stock is priced to perfection. This is a company that earlier in the year, there would be talk every now and then of, would someone acquire Netflix? Obviously, the cost of acquiring Netflix now is a whole lot less than it was three months ago. Market caps around, I think, a little over $4 billion. Who makes the most sense as a potential suitor here? Is it Apple, which certainly has very deep

pockets? Microsoft, Google. Amazon gets thrown in that conversation, but they kind of have their own ecosystem. What do you think, Ron? I actually like Amazon, from the perspective of they would probably like the streaming part of the business. I don't think they have any use for the DVD business. And when the company was going to be split, that was actually an interesting idea for Amazon. I actually wish they would go back to the splitting kind of a situation because they could probably get themselves sold in a better way, which is maybe the way they're going to end up have to go. James? I agree with Ron. I like Amazon. They've already got the infrastructure to drop Netflix's library and whatnot in.

Although if I were running the company, what I might try to do is see if some kind of studio consortium would come together and buy Netflix because that's really going to help the content costs. And that's really, like Ron said, that's the fundamental problem, is the content was underpriced. They tried to deal with a difficult problem, but they dealt with it poorly, and they paid the price. But if they can go right to the source,

they might be able to work something better out. Yeah, the trouble with James' idea is that we have that, and it's called Hulu. I was going to say. The studios run that and can't agree among themselves what to do with it. And even though they have owned pieces of it themselves, they still argue with this entity,

which they partially own, about how much of it, how much of their content they wanted to give it and for how long. So the studios are, they've wised up, but I think they still fight too much and they don't realize that they could lose the entire thing if they don't, if they don't get together on something. So it would actually

make sense to mash Hulu and Netflix together. Microsoft would be a decent suitor, but it probably makes the most sense for Amazon. And let's not forget, I believe Reed Hastings is on Microsoft's board. So there is some talk about a combination there. There are a lot of competitors in this space, sort of direct competitors.

of them so good yet, though. That's the one reason you might want to still consider Netflix at this point in time. They're still the easiest solution. But you've got DISH, which has Blockbuster. You've got CoinStar, which has Red Box. Amazon, to some extent, is a direct competitor. But then you've got others on the periphery that could, with relative ease, get into this. Even a company like Comcast, Google, that sort of thing. If Reed Hastings could get rid of two of those competitors, Who are the biggest threats? Ron?

It's content. It's all about content. Netflix doesn't have it. So if they could maybe get rid of a Comcast or a Verizon Fias, somebody where the on-demand folks, where I go for the newest movies, and then perhaps Amazon is a pretty fierce competitor. That would look pretty good for them. James?

I would say a Comcast and then an Amazon on the distribution in as well. Yeah. If they're going to start shooting people, it needs to be everybody out those cable companies. Because those are the guys, not only they are competing with, you know, for eyeballs, but they're bidding up the costs of this content. I don't know that Reed Hastings listens to Motley Full Money, but just, you know, on the off chance that someone at Netflix is, what's one thing that this company can do to change direction?

Ron? I hate to be redundant, but they must add content. They must drive people to their service with movies that people want. That's the death spiral because they got to pay so much. And the problem is the money. So you know what they do? They need to sell themselves. Yeah.

The movie, the problem is the movie business fundamentally. that is supplying the content is not as profitable as people think. That's the big mistaken thing. It's a big hit or miss business, and there's not the money in it that people expect. So they need to find a way to make that happen. And maybe right now selling themselves, like Ron said, is probably the best thing to do. Seth? Oh, yeah, just give up and sell.

Why not? Just like that? Take your measly few hundred million and retire and relax. I give it a good run, say. I've seen some calls for let's let Reed Hastings remain chairman. Let's bring it a new CEO to kind of refurbish this situation. Really? How much money are you betting on that happening? I don't think it's happening.

Coming up, after hitting an all-time high earlier this month, shares of Amazon took a tumble this week. A look at the biggest online retailer is next. Stay right here. This is Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in the studio with Seth, Jason, James Early, and Ron Gross. Amazon's third quarter profit was down 73%. shares are down for the week.

Seth Jason? Only 73? Sales were up, but so were expenses. This is an amazing performance, actually. If you can increase your sales by 44% and also manage a 73% drop in quarterly profit, you clearly must be doing something right. The story with Amazon,

the reason it's an intriguing story is that sales growth. The reason it's scary, and you have to watch out when you pay a high price for it, is that this tends to happen from time to time. They have to spend a lot of money to get those sales. And they're not only spending money on line items that affect earnings like this, but also on capital spending, which doesn't appear in the income statement in dent earnings.

And the free cash flow is just, it's lumpy and it's not consistent. And so you hope that all this money is being spent, is being well invested, and that this continues to build a platform that will someday yield strong cash flows. isn't happening yet and whenever you get a miss like this investors start to worry about that dump the stock

is this really just all about the Kindle Fire tablet is this all about sort of this this it's like 15 bucks on each tablet don't they something like that? It's not just bad they make it up on volume they're spending a lot of money

manning new shipping centers and everything else so it's not just all about that I suppose some of it could be they're not going to break it out entirely we'll find out down the road whether or not this is a hiccup or a real problem. In terms of the next three to six months, what's something that investors should keep an eye on to sort of gauge the health of Amazon? Just always take a look at those capital expenditures and try to figure out how much

of the increasing cost is sort of front-loaded and how much of it's going to be oncoming. I would say where are they moving towards and how aggressively from just being your typical online retailer, although an incredible one. In Walmart, still going after them now, too, right? Sure. But with the holiday quarter coming up, and is Ron already established, he's going to be spending a lot of money. A lot of money on us.

A lot of money. Except for those disdain that we're all getting. So many companies reporting earnings this week. Let's do a few quick takes. Let's start with Ford. Shares of Ford were down this week, Ron. Sales rose in the latest quarter, but the profits were down a little bit. What's the story with Ford?

Ninth consecutive quarter of profits. The company is doing a good job. The problem was that metal costs, aluminum and copper actually went down, and they had hedges associated with these to protect from rising costs, and they got hit. And they had to take adjustments on their hedges. It's not an operating issue. It's more of an accounting money issue, if you will. I think the company is still executing well.

Seth, in your home state of Minnesota, 3M's latest earnings. A little bit lower than expected, but the company also cut its forecast for the year. Yeah, the 3M. The problem with the 3M is. is it's a pretty mature company, and it generates sales growth most of the time by making incremental improvements to products that people know and love. These are name brand products, which people sometimes shun in a recession like now or when times are tough. But also they've had quite a bit of their more recent growth and profit has been making special films for LCD TVs,

as well as some electronic stuff. And that business, they're saying is slowing, they're saying that the people buying it, the companies buying it, are reducing inventories, but I think there's also some competition in that space. Shares of Caterpillar up this week. The company reported a 44% increase in profit. James, the company also said it expects even stronger sales next year. It floored everybody, Chris, because here's this company that sells these very expensive products. It's essentially seeing no sign of recession. Now, there's a lot of cash on the sidelines, and maybe that's going into it. Agriculture prices are high, so that's sort of fueling the demand for these machines. But the question is, is this indicative of the rest of the kind of heavy equipment

or manufacturing? Is this some sort of a vanguard of what's to come or not? We don't know. Shares of Under Armour up around 15% this week. Seth, third quarter profits. Woo! By the way. 32%. I was going to say, this is a recommendation of yours. Yeah, but EPS only have 29%. And revenue's up 42%. So it's a great report, but there are a few things you do need to watch for the future. One thing that's nice and strong as the apparel business, which is their most mature business, still grew at a 31% clip. Footwear, the shoes, almost doubled, and that's a bit lumpy, but they're bringing back running shoes. They screwed that up before. Hopefully, they're doing better this time around.

Gross margins have changed a little as they add shoes and change their product mix around. Their margin structure is going to shift. And also keep an eye, if you're interested in Under Armour, keep an eye on inventory. When you're growing that quickly, you need to spend a lot on inventory. We want to make sure that that inventory stays healthy and they don't have to mark it down. It's had great success recently. Nike is still 10 times the size of Under Armour when you look at the market cap. To what extent do you think Nike is threatened by Under Armour? I think there's room for both of them. Under Armour's going to eat into some of Nike's business and Nike's going to defend well in other areas. I think this is a situation like the old Home Depot Loz situation. Lowe's came along. There can't be another Home Depot. Well, there was. So I think someday Under Armour is. When I think of Under Armour, I think of high school kids, is that dated? I mean, in terms of the people wearing the product.

Well, it is a little bit dated, but they are going after a lot after the youth market and after the college market because those people are going to grow up and spend more and, of course, keep buying this brand for their kids. Seth, did you think one has better pricing power versus the other if commodity costs arise? I think they both have pretty good pricing power, and it varies by product segments. So I think in terms of some parts of apparel, you probably don't have the pricing power. Whereas Nike, you know, in running shoes, they probably have really incredible pricing power. I am not going to forego the running shoes that work for me from Nike if they raise the price because it's either that or my knees blow up.

Yeah, we wouldn't want that. And finally, guys, the McRib is back. McDonald's first introduced it in 1982. It went away in 85. It has periodically resurfaced since then. The amazing thing is that they release it. We talk about it. and McDonald's gets tens of millions of dollars worth of free advertising.

Everybody has an opinion about the McGrace. Everybody has an opinion. Coming up next, we'll get a closer view of the EU debt crisis and get the British perspective on BP. The conversation with David Kuo from the Motley Fool UK. Stay right here. This is Motley Fool Money. Welcome back to Motley Full Money.

I'm Chris Hill. David Kuo is a regular financial commentator on the BBC and CNBC Europe. He's also the host of Money Talk with David Kuo, the weekly investing podcast of the Motley Fool UK. It is one of the most popular business and investing podcasts in the entire UK. And he is here in studio. David. Thank you very much, Chris.

Can I just correct you on one thing? Yes. It is the most popular. The most. Not one of the most. It is the most popular. I need to bone up on my research. It is so great to have you in studio.

I think this is an unprecedented event in that we've had back-to-back weeks of in-studio guests. So thank you for helping us make history. A lot to talk about. Let's start with the EU. We're taping this on Thursday. The big story, European leaders agreed to a deal that's going to force banks to take a 50% haircut on their Greek debts. Now, the UK is a member of the EU. You didn't adopt the euro. No. What do you think of the deal that has been agreed to so far? I think we can look at it as a car crash. And what Europe has actually done is to avoid a 17 car crash. Okay. In other words, it could have been an absolute disaster. But at the very last minute, they've managed to pull something out of the hat. This rabbit includes three things. The first one being that there will be a 50% haircut. The second one is boosting this European financial stability facility, which is effectively a fund of money from 440 billion euros. to about one trillion euros. What a lot of people don't know is that there isn't actually 440 billion left in there. It's probably more like 200 billion because they've already spent quite a lot of it already.

So they're going to increase that to one trillion. Where they actually came up with one trillion from, I don't know. But I think it's just a big number. It's a big round number. It's a big round number. And it's a bit like bringing out a bazooker. And it really sort of scares people. So that's the second thing. And the third one is that the banks will have to raise more capital. Now, the interesting thing, Chris, is that although Greece has been allowed to default effectively 50% of its debts, it's going to write off 50% of its debts, nobody has raised the question of what would happen if some of the other countries that are in austerity measures at the moment, like Ireland, Portugal, Italy, including Greece, of course, and if the other countries say we would like to write off 50% of our debts as well. What would happen then? Then, of course, the European financial stability. facility, this fund of money, will not be anywhere near enough. And then we're going to be going on again. So like I say, we've avoided a 17 country pile up, but I wouldn't expect anyone to take off their seatbelts just yet. When you and I spoke, I think it was just over a year ago

in the spring of 2010, one of the things I had asked you was to, was about the future of the euro, sort of buy-seller, or hold the future of the euro. At the time you said sell, do you still believe that, do you still think that it is inevitable that the euro as a currency is going to go away at some point in the future? I think it is inevitable because you are talking about, first of all, 17 countries in the central of Europe that collectively are part of the euro. You've also got another 10 countries outside of that, making 27 European countries in total. And to get 27 countries to agree on anything is almost impossible. You can't even get France and Germany to agree on something. So to try and get the other 25 countries to agree on something is an impossibility.

So I think what will happen is that Greece will be allowed to leave the euro eventually, because I don't think Greece can really take much more. I mean, the pro-Greeks, I mean, they only have really two main industries, three if you count olives. So I mean, they have shipping, they have tourism, and they have olives. And that is effectively it. So how are they going to be able to repay the amount of money that they owe? You're listening to Motley full money, my guest is David Kuo, financial commentator, and the host of Money Talk with David Kuo. What is the biggest difference in your mind between the investing culture in the UK and the investing culture here in the United States?

I think the people in the UK tend to be slightly more cautious. So dividend investing is something that they are very keen on because they just like that tangible feeling of dividends landing on their mat every month or every week, depending upon how many shares they are invested in. And I think that is something that they can feel, and that is something that they quite enjoy. And, of course, you have that decision yourself as to what you want to do with those dividends. You can either spend it or you can reinvest it, or you can put it towards, in my case, you know, my son's college education. He doesn't have an athletic scholarship or something like that?

No, scholarships are very rare in the UK, and you haven't actually seen his build, have you? No, but you're a strapping guy. I figure if he's built like you, he's, you know, he's out there playing. football or something like that. You're very kind. I'm very proud of my six-pack, yes. Before we move on to individual companies, just to wrap up on sort of the UK and really the European Union writ large, what is one thing that investors should be watching to really gauge the health of the EU going forward? I think investors need to remember that three months ago, Europe thought it had drawn a line under the European problem. It said, right, here is the line,

and we've actually solved that problem. Three months down the road, we actually find that that line has been moved. Somebody has taken out an eraser and just erased that line and drawn another line now. So we've actually got another line. And I think what will happen is that we're going to get this line push further and further back because the problems haven't actually been solved. Nobody has actually addressed the problems yet. And until such time that they do address the problems, then people can sleep easy.

And going back to those bank shares, I know the banks had a huge rally recently, something like 17%. But let's not forget, I mean, let's take one stock in particular, Barclays. Barclays shares are two pounds a share now. They were at its peak at six pounds a share. So it's not a 17% rally that we're looking for. It's more like a few hundred percent rally. And I don't think that's really going to materialize in the near term. You're listening to Motley Fool Money.

My guest is David Kuo, financial commentator, and the host of the great weekly podcast, Money Talk with David Kuo. Definitely check it out on iTunes and at the Motley Fool UK website. Let's talk about BP because the last time we talked, we were talking about BP. It made news this week because it just got its first drilling permit in the Gulf of Mexico since the spill last year. This is a stock that is widely held in the UK. What do you think about the company's future now? I noticed at this time you call it BP rather than British petroleum, Chris.

The last time you kept on calling it British petroleum because it was a pariah. Now, all of a sudden, you know, because it's actually doing a while. okay at the moment and it's actually been embraced by the American people and allowed to drill in the Gulf of Mexico, it suddenly becomes BP. It becomes something that the Americans appreciate now. Why is this shift that you've actually... Now, let me take issue with this because earlier today, you taped an interview, or maybe it was a live interview, with BBC. Yes. And I heard the producer when he came on the line and he said something in the effect of, oh, did you see the news about British Petroleum? So it makes me think that maybe over in the UK that when something bad happens, it's actually the opposite.

When something bad happens, oh, no, it's BP, it's BP. But, you know, if the company finds a cure for cancer, oh, the name of the company is British Petroleum. Well, exactly. But if there's a massive spill, the name of the company is BP. It is a movable feast. You're absolutely right. We can move it wherever we want to. So, I mean, I accept, you know, that BP is a company.

And I always had a lot of confidence in the company because it was greatly admired at being able to generate. cash. And ultimately, this is what these oil integrated oil companies are. They poke a hole in the ground, they get some oil out, and then they make huge amounts of money. And I think BP is very good at doing that, and it was pillory to some extent, you know, as a result of what happened in the Gulf Mexico. I don't think that was really a fault of the company, but probably a fault of their public relations department that didn't manage the situation properly. But as a company, I think it is great. And I think Tony Hayward, who was managing the chief executive at the time, I think he was ill-advised as to how he should have handled that situation. He should not really have said, I want my life back,

because that was the wrong thing to say. Speaking of companies that have public relations problems, another company I want to ask you about is Netflix, which is a company that shares of Netflix have dropped about 75% over the last few months. And this is a company that is expanding into the UK and Ireland markets. What is the video landscape like in the UK and Ireland? How popular are these types of services and what can Netflix expect as it goes into the marketplace? I think as soon as you start getting into developed countries, people are generally very cash rich and time poor. In other words, they have money to spend in general and they haven't really got the ability to actually sort of spend an awful lot of time sort of hunting these things down. So I think there is a demand for this

service. Netflix was probably in a difficult situation when they tried to raise prices. And I think this tended to upset not only its customers, but maybe some of the investors thought that this was the wrong way to go about it. I think this is really, as far as the company is concerned, another sort of public relations exercise. What it needs to do is to manage that very carefully. And I think Netflix has a huge future because people are by nature. for want of a better word, lazy. And I think people just want services on their doorstep. So I think Netflix will survive, and I think Netflix will go from, well, from weakness to strength. So, but what is the, what is the market leader right now? What is, if, if I suddenly just pull up stakes and move to

London or move to Dublin and want to subscribe to a video service or a membership of some kind, what, what are my options? You have a couple. I mean, first of all, you have things like Sky television, which is huge in the UK, and there are on-demand services provided by Sky. BT is trying to do something similar, being British Telecom, now renamed BT, and they're trying to do something very similar. Then you have these postal services where people can subscribe, and they can, I think, get five videos at any one time. They come in through your letterbox and lands on your doormat, and you can watch those,

and you keep on rotating that. But it is time to start moving away from that. And Netflix is, I think, in the forefront of that in the UK, it'll take some time to build up. And when it does, and I think people will find that it's a service that they can understand, which is very important. You have to understand the service. It's British Telecom when things go right. When there's a crisis, they call the company BT. You're listening to Motley Full Money.

My guest is the great David Quo. Let us wrap up with a round of buy-seller hold. We'll start with news out this week that he just named a U.S. Air Force test pilot to join his space venture, Virgin Galactic. Buy seller hold, Richard Branson's space business. Always a buy. Because it's Branson? Because it is Branson, yes. I think we should rename him British Anson, yes?

This is a very popular British comedian who is not afraid of rubbing people the wrong way. Buy seller hold, Ricky Jervais. A buy. Ricky Jervais is hugely popular. in the UK. I think he can be a little acerbic at times, but he always gets to the point. According to published reports,

Prince Harry has gone on a few dates with an American cocktail waitress. So buy-seller hold the likelihood that Prince Harry will marry an American. Buy, I think, you know, that would be great for Anglo-American relationships. And before we end, can I just ask you a little riddle?

Absolutely. Okay, now three people go into a bar, a Greek, an Irishman, and a Portuguese. Right? Yes. Who picks up the tab? Oh, the Irishman, of course. The Germans.

Always the Germans. David Quo is the host of Money Talk. If you are looking for insight into the UK economy and investing in the UK, there is no better source. Check out Money Talk with David Quo on iTunes and on the Motleyfools UK website, which is just foolukuk.com. David, great to see you. Thanks for being here. Thank you very much. Coming up, we'll give you an inside look at the stocks on our radar.

This is Martley Full Money. Hello, boys and ghouls. This is Elvira, Mistress of the Dark. Please remember that the little devils on this show may own the stocks that they're talking about. Don't buy or sell stocks based solely on what you hear. Do your homework and make your own decisions. And remember, if you still haven't come up with a Halloween costume, why not be me, Elvira, Mistress of the Dark?

All you need is a black wig, a tight black dress, and a big set of... Okay, well, maybe it can't be Elvira. But, you know, happy Halloween anyway. I was working in the lab late one night when my eyes beheld an eerie sight for my monster from his slab. I'm back in the studio with me, Seth Jason, James Early, and Ron Gross. The classic Elvira, aka Cassandra Peterson from Once Upon a Time on our previous version of the Motley Fool radio show. Also joining us in studio, Mr. Sean Jason, fraternal twin brother of six. Sean, welcome.

Thank you. Hello. I'm sure you know at this point you are not the first member of your family to be on the show. Your father was a guest earlier this year. He very nicely sat in for the Stock Center Rader segment. Yeah, I found his stories a lot less interesting than you guys did. That's understandable. That's why it should be.

We're going to get to Stux Center Rader in a moment, but just, you know, what's something you could share about your brother, Seth, that we might not know? sort of the biggest difference between the two of you as brothers. It's on the insider trading A. Well, he was a smart one growing up. What happened? Yeah, who knows what happened there? It's funny.

As we age, I'm becoming more like he was when we were younger, and I think he's becoming more like I was when I was younger. All right, let's move on to the stocks that are on our radar. And in keeping with what we did when Dr. Jason was here earlier in the year, guys, you're going to be pitching your stock idea to Sean. Sean's going to make a decision at the end. So make it a good pitch. Ron Gross, we'll start with you.

Okay. Sean, do you shop occasionally? What kind of question is that? I'm a full-time telecommuter, so I am the shopper. Okay, so whether it's online or in the stores, obviously you don't like to carry around wads of cash, I would imagine. So I'd like Visa for you, ticker symbol V. It's a very strong company, clean balance sheet, consistent cash flows, just raised its dividend. 47% actually has the ability to raise it even more down the road.

I think that would be a good one for you. All right. All right, James. Sean strikes me as a guy who appreciates a dividend yield. When you get a dividend, you get part of your return in cash, right? That lowers your risk. So Chevron is my stock for you. Sean, has a 3% yield.

Just to raise this dividend, 3.8%. And the reason I like it operationally is it has a lot of deep water drilling experience. We've used up all the light surface oil. Now it's down to the sludge way deep down. So Chevron's expertise here is really going to play out well in the future of energy. And, Sean, when you go to the gas station, how would you typically pay? Well,

Wampum. You've already made your pitch on. Don't horn in on James. All right, Seth, time to pitch your brother. Fools, my brother is obviously very appreciative of Phops who spend a lot of money

on high-end watches, even though they don't need them. So for him, Movado group, makers of the Movato watch. You have high-end watches like Able, Concord, licensed watches,

coach Hugo Boss, juicy, all of this business. For some reason, people are buying lots of watches still. They buy them online ever? Yeah, but they use American Express. Movado's done well for us. It's hidden gems. I think it's got plenty of room left to go.

And the holiday season's coming around and watches are still at the top of people's lists. And the ticker symbol for Movado group? Mov. M-O-V. M-O-V. All right, Sean, you've heard the pitches. and, of course, in Ron's case, multiple pitches for Visa. You've got Chevron Mavada Group. What strikes your fancy?

Well, I've got to tell you, watches are interesting. Our son turns 20 today. Happy birthday. And we bought, hey, Zach, we just bought Zach a nice watch. So that is intriguing. However, lately I have been into dividends stocks. Oh, yeah. Did I mention the 47% increase from Visa?

So we're going to have to go with J. James. You're going to go with James and Chevron. That's right. Thank you, Shephan. Congratulations. So at this point, I have to turn to Seth Jason. So twice now on this show, we have invited someone into the room for stocks on our radar. On two occasions, they have had a chance to pick amongst the three of you. And ironically, on both occasions, it's a blood member of your family. It's a blood relative, and they have both times shut you down. Well, I would, yeah, I can't even make the coffin.

I can't make the coffin joke. Yeah, and where's that? Boy, that one sure got cream, didn't it? Anyway, yeah, you just, yeah, no good coffin for him either. Wow. Steve Broido? Pine box. You've had two chances to observe this.

I mean, just as the guy on the other side of the glass, this is, again, the second time we've seen a member of Seth's family, basically go with someone else. What does this say to you? This says to me to keep your, what is it, your enemies close and your family further away or something like that. You haven't watched The Godfather later. I have not, unfortunately, but you got the point. But you've been a father for all of two weeks now, so you're probably deep in the throes of sleep deprivation. Believe you me.

All right. Guys, in the minute we have remaining, let's just wrap up. Something that you are working on for the next week. Seth, Jason, I'll start with you. I said this two weeks in a row, but it's earnings season. Everybody's releasing earnings. It is the crunch. It is more, more earnings.

Is there one in particular that you're interested in for next week? I don't even know who's doing it next week. I just get the stuff as it comes and try to read it. James? I am looking at the European exposure of our core income investor stocks in my service just to see what a recession or a financing lockup could mean for that. Well, that sounds smart. I'm doing that too. Ron Gross.

November 1st reopened of million dollar portfolio for 10 days only for more information, MDP.fool.com. Jake Visa. All right. And, Sean, what's on tap for you next week? What's in time for me next week is recovering from this trip out here. All right. Great nice.

Good luck with that. And thanks for visiting. All right, Seth, Jason, James Early, Ron Gross, guys. Thanks for being here. Thank you, Chris. Thanks to our special guest this week, David Quo. You can check out his weekly podcast, Money Talk with David Quo. You can also check out our daily podcast, Market Foolery, both available on iTunes.

That's it for this edition of Motley Full Money. Our engineer is Steve Broido. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening. We'll see you next week. Thank you.