Motley Fool Money - Motley Fool Money: 11.30.2012

Episode Date: November 30, 2012

Costco issues a special dividend.  Microsoft deals with problems below the Surface. And Zynga makes a risky bet.  Our analysts discuss those stories.  Plus, Robert Pozen shares some insights from his book, Extreme Productivity. 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. Welcome to Motley Full Money. Thanks for being here. I'm your host, Chris and joining me in studio this week from Motleyful Inside Value, Joe Maker, for Motleyful income investor James Early and for million-dollar portfolio, Ron Gross. Good to see you guys. What are you do, Chris? We have got a retail roundup. We've got an embattled CEO hanging on for dear life, and we are inching ever closer to machines ruling our lives. And as always, we've got a few stocks on our radar. But we begin this week with the fiscal cliff. And when we think about the fiscal cliff, guys, I think we may be looking through a slightly different lens than some of the mania that you see on TV. Because what we're seeing, and James, I'll start with you. What we're seeing is a wash of special dividends just flowing all through the market. This week alone, Whole Foods, Costco, Brown Foreman, and Las Vegas Sands were among the big names announcing special dividends to be

paid out before the end of the year. What do you think about this? I mean, is this like Christmas and your birthday wrapped in one? It's quite a lot. I mean, the special, first of all, I wish I had a dollar every time fiscal cliff was mentioned. I could pay for Ron Gross's personal trainer butch for half a year. The special dividend is sort of a wash. If the stock is 100 bucks, it pays a $10 special dividend on the ex-dividend date, it drops to $90. So it's like, well, all right, you know, you get taxed at the dividend tax rate, which is currently just 15 percent. Now it might go up. So I understand why they're doing it, I do it. I don't think it's something to be excited about. It's sort of a neutral that shows some shareholder

friendliness, but I think the frenzy, Chris, is a little bit overblown. Ron, what do you think? What I love is how companies like Costco are playing both ends of this. They're paying the dividends in advance of a potential tax hike, and they're also taking advantage of quantitative easing by the Fed, by taking advantage of the lower interest rates, taking on debt, bringing debt onto the balance sheet, and using that cash to pay out special dividends. Really a very shareholder-friendly action. Weird, too. I was going to say, Joe, is that cause for concern? If you're a shareholder, it's one thing if you're Apple and you've got tens of billions of dollars on the balance sheet and you have

the ability to just pay it out. It seems a little shakier from an investor standpoint if the company is, oh, I'm borrowing money just so I can pay it out again. Well, it depends. If you're a strong business like Costco, it makes sense, and it's okay. But you look at Amazon, they just raised a few billion dollars for the first time since the late 90s in the debt market. They got 10-year bonds yielding 2.8 percent. That is absurdly low. I wouldn't lend money to my family. It rates that low. It's just remarkable, but it's value-adding for them, because after-tax is just an incredibly low source of funding for them to grow the business. I want to get to companies that have not yet hopped on this bandwack in a second. But, Ron, when it comes to the fiscal cliff, I refer to the Manion TV. For people who may be members of Motley Full Services, they know that we have discussion boards, that people, investors can just interact.

interact with one another. What are you seeing out there in terms of investor sentiment? How nervous are people? How much is this whole fiscal cliff conversation changing the way people invest? A lot of volatility in the market as a whole. The stock market will trade up one day on hope and next day down on fear. Anecdotally, we're seeing on the message boards people delaying purchases of stocks because they don't want to commit capital in advance of what could be a potentially bad situation. This time last year, I made a prediction. I'm going to go out on a limb again. I think everyone should take a collective deep breath. This is going to get solved in time. My guess is

that what happens is the $250,000 threshold for increased taxes for income people will get raised to somewhere on $400,000. That will be the compromise that's required to get this done. All right. Let's go back to the companies who have not yet made the announcement that they're going to pay a special dividend. And let's face it, there are companies out there that already have the cash on the balance sheet. So let's just call a few companies out. Ron, I'll start with you. Who should be thinking about paying out a special dividend? Absolutely. I would love to see one from Activision, ATVI. Stock goes nowhere, ever.

But there is over $3 billion of cash on the balance sheet, no debt. It does not need that amount of capital raise to run the business. They could easily pay out $2 billion or almost $1.80 per share, an $11 stock. I'd love to see it. James, what about you? There are a lot of cheap, you know what's out there. I mean, Apple, Google, Intel, these all have just billions and billions of dollars, and what are they going to do with it? I mean, they should pay this out. Joe, what do you think?

I was going to pick on Apple. They got about $120 billion in cash. There is nowhere to redeploy that money. They have initiated dividends to their credit, but that you could buy Twitter a few times over at that price. Yeah, if they wanted it. A week ago, all of the focus was on Black Friday, but Joe, it seems like CyberMoney. Monday has stolen the thunder of Black Friday because about 1.5 billion was spent online on Monday, which makes it, according to Comscore, the biggest online shopping day ever.

When you step back and look at the holiday retail universe and how things have kicked off this year, what do you think? Well, it depends on where you're situated. It was amazing to see how people got so focused on watching people in line at stores on Black Friday when foot traffic was only up 3%. The real action is online. The same day Black Friday sales were up 20%, Cyber Monday, 30%. And that's just extraordinary growth, but it's important to remember. Online is still only about 5% of total U.S. retail sales. Globally, two-thirds of people don't have Internet access.

So there's still just an incredibly long runway for these online retailers to just keep eating up share. Have you bought anything online for Christmas yet? Not for Christmas, but I'm a chronic Amazon prime buyer. Ron? I found it so interesting. on Black Friday, I went into an Apple store to buy an iPad Mini, and there weren't any, of course, but you could order it online. Great deals, actually. They're offering really great discounts. So I walked outside, just stood outside the store, and me and several other people were there

on our smartphones going onto the Apple website to purchase the iPad Mini. So what would have been a brick-and-mortar purchase turned into an online purchase just because the wrap-stop. From poor inventory management. Why did you want to do that? You just wanted the experience of buying it in the store? Well, I was in the store, and I was in the store. wanted the immediacy of owning it instead of having it. The pleasure of having it that day. Plus, it was Thanksgiving weekend, probably wanted a little me time just to get away from the gross family.

Now, they were with me. I do want to give a little shout out to mobile sales. They were 13% of online sales this quarter or over the holiday weekend. And again, you need to right size that in terms of the overall size of the retail market. But they still doubled year over year. And I think that's definitely going to be the new online sales over the next three, five, 10 years. I was going to say, when you look at bricks and mortar retailers, Walmart, Target, etc., they all have their own online operations. What is the move for companies like that? Is it just to try and increasingly push out online sales?

Well, Walmart's the second biggest U.S. retail online player behind Amazon, but by pretty long ways. And ComS. said that Amazon grew faster than any of the other top players as quarter. So it would seem that Amazon is actually out distancing their competitors right now. Reports this week that Microsoft will cut its order of surface tablets this year from 4 million to 2 million. They're that good. Ron, I'm not much of a numbers guy, but I'm pretty sure that's cutting in half. Houston? We potentially have a problem. Gosh, where do we go? Microsoft, there's a bit of a dichotomy going on.

They've announced that sales of Windows 8 licenses topped 40 million, which is pretty strong. It's actually stronger than Windows 7. hearing a lot of buzz or reading a lot of buzz, I should say, that people are saying, we just don't see how that's possible. Sales of Windsos' devices are very weak, perhaps down 20% or so. So things are perhaps not as rosy as Microsoft is making them out to be. I'm certainly not claiming they're giving misinformation, but there's something here that doesn't fit. A lot of the things that we were hoping to see are not playing out yet. Let's see how the holiday seasons go. But, you know, as I've said often, I'm not a cheerleader of Microsoft. I'm an analyst.

And if things aren't going well, then we'll make a decision. Is the surface the next Zoom? It could be, but the surface doesn't. The surface in and of itself is not a huge mover of the needle to Microsoft, but it is an indication of the product offerings, people moving, you know, people moving away from PCs to tablets, but not their tablet. So it's an indication of other things than just the bottom line that the surface would potentially create. And it's not a big needle mover, but Joe, we also saw reports this week that, Microsoft in some ways is doubling down on the surface tablet because there's a new version coming out in January that's bigger, heavier, and over $1,000. That seems like the wrong way to go.

Yeah, absolutely. So the price point is about a grand when you include the cost of the keyboard. Now, this is a Wi-Fi-only device that's heavier than the existing one has short battery life. I'm not sure who gets excited about buying this device. I think it's just another example of Microsoft missing the mark on what consumers want. And I understand that they need to protect margins because they can't just go out there and give away the OS for free. That's where they make their money.

But this is a different world. It's not PCs, and they're just going to have to accept that. Ron, just to wrap up on Microsoft, the stock is the thesis for investing in Microsoft really one, I guess, of tempered expectations and dividends? The dividend is certainly nice. Our thesis has always been that the price is priced for no growth. stock is price for no growth, but the company is actually growing. 5% last year, for example, the office business 7%, the server business 12% last year.

This first quarter here of this year, their fiscal first quarter, was not good. So the question is, is the growth we saw last year waning? And then that would completely change the thesis. The Motley Fool's annual Worst CEO of the Year contest is underway on Fool.com. And three of the eight finalists were in the news this week. They're up next. Stay right here. This is Motley Fool Money. What I couldn't do with plenty of money and you.

Welcome back to Motley Full Money. Chris Hill here in studio with Joe Magar, James Early, and Ron Gross. In 2010, Facebook and Zinga signed a deal that gave Zinga privilege status on the world's number one social network on Thursday. The two companies amended that deal, and Joe, based on the fact that on Friday, shares of Zingo were falling, I'm assuming that it was a bad deal for Zingo. You know, I actually liked this deal for Zingo. When they signed it originally in 2010, I just felt like they gave away the farm. I thought they gave away too much to Facebook by making themselves Facebook platform-reliant in terms of the games themselves, and by using only Facebook credits. I don't know about you guys, but I don't typically pay for things with Facebook credits.

Not at all. I use credit cards. I use PayPal. So by moving off of this, it's going to allow them to carry games with other providers exclusively and keep more of the dollars flowing through their games. It's a big risk because now Facebook could start producing your own games. They say they won't, but they eventually will. They'll get tempted and put some out there. So that's the reason the stock is down.

Yes. And that is a big risk for sure. But, you know, compare that to the alternative, which is just staying on the dole forever to Facebook and never having your own independence. And, I mean, at some point, it's just like, you've got to move out of your parents' house and take a shot down field in life. And they're doing that. It really does seem like that. But to James' point, I do see why the stock is down when you factor in that roughly 80% of Zenga's revenue to this point has been coming from Facebook. Well, I mean, that's why we've been trashing the stocks since the beginning.

Speaking of Facebook, shares of Facebook up about 30% in one month. Is it of interest to any of you guys? or is it still in that infancy stage as a public company where you want to see more quarter after quarter of delivering, particularly when it comes to mobile? It was of interest to us 30% ago. We, quite frankly, didn't move fast enough on it, but we're still thinking it through

and at least want to do our homework, so we're ready if we get an opportunity. Yeah, in my mind, Facebook is still an IPO. It's not yet a real company in terms of consistent profit from my perspective. Mark Zuckerberg from Facebook and Mark Pinkus, CEO of Zingo. They're two of the eight finalists in the Motley Fool's worst CEO of 2012 competition. That's on Fool.com right now. The third is Andrew Mason of Groupon.

On Thursday, Groupon's board of directors met. It was a regularly scheduled meeting. And shares rose 20% on reports that the board was going to discuss whether or not to replace Andrew Mason as CEO when the news broke. And, in fact, he was staying on. shares fell on Friday as a result of that. That's got hard. James Early,

What do you make of this? It does have to hurt, Chris. But I've got news for the board. It's not the CEO. It's the business. I mean, Groupon's business model would be gasping for error under any management. It's just not effective. Groupon is still profitable, which is great, but the growth has slowed pretty dramatically.

I don't know how long the profitability will last. This is a company with 12,000 employees, $2.5 billion, I want to say in revenue, something like that. And Andrew Mason used to be a billionaire. I think he's now a $213 million because the stock is down almost 90%. since the IPO. It's still pretty good, but that's like downgrading from like a four-bedroom house to one-bedroom house. I just don't see the party lasting any much longer. Joe, to that point about the number of people they have on the payroll of Group on, living social, which is not a public company, but Amazon has an investment in it announced

this week. They're laying off 10% of their employees. Do you agree with James? They're all headline writers for zip-lining trips. James is boring. Do you agree that it's less Andrew Mason and more the overall business model? It's both, but I definitely agree with this point that it's the model itself. And, you know, this business just went public too soon. Companies are supposed to work things out before they go public, and Groupon didn't. They took the easy money.

I don't blame them. I would have done the same thing. But that's what happens when you take a company from start to public in three years. Where does Groupon at the stock fit on your value continuum? Is it? Low. Are they on the value continuum? Alta Salon Cosmetics and Fragrance is a company. I'm pretty sure we've never talked about

before. And yet third quarter profit came in much higher than expected this week. Shares were up on Friday. Ron Gross, this is a stock that's on your radar. Yeah, we actually bought it yesterday earlier this week in advance of this pop in the stock. So we're really happy to see that. Really strong company that are continually putting up great numbers, like same store sales of 8% increase and sales up 22%. Their main competitor would be a Sephora or online companies. But they offer cosmetics and beauty products as well as salons. And it's a relatively big box kind of store. Lots of inventory. Great customer experience. So we really like it. We just took a small nibble here because the valuation perhaps is not

where we would love it for a full stake, but we're watching it really closely. In the customer experience, they have a men's line. There are things in like shampoos and things like that that is certainly a man could use. I have to push back slightly only because Jim Kramer on CNB. see this week, called this the ultimate growth stock. And when I think about Ron Gross, value investor, I don't, this does not seem at all like your kind of stock. That's fair. Million dollar portfolio is not only a value portfolio. We like to draw from all different Motley Full Services, including growth. There's 450 stores here. We think

they can probably get to 1,200s of nice long growth runway here. It makes perfect sense to us. So it's not like a technology kind of growth play. It's a retailer. I can get my hands around that. Finally, guys, as if there was any doubt, we are one step closer to our robotic overlords. Scientists at the University of Cambridge are proposing a new research center that would study the possibility that technology could destroy human civilization. And I'm quoting from one of the scientists here in the press release. He said, you're more likely to die from robots than from cancer. What do we make of this?

I mean, this is, first of all, I'm kind of glad that. someone's on top of this because I watch movies. It's clear that the machines will rise one day, and I'm glad that someone is paying attention. As long as I can get them to do my Christmas shopping, I'm okay with it. That's how it starts, James. I think it's a lot. And then all of a sudden nanobots are in your bloodstream.

How do you like that? That sounds scary. Joe, what do you make of this story? I don't know anyone who's been killed by a robot, but unfortunately I know people who suffer from cancer, so I think that previous factoid is a little interesting. Alarmist, perhaps? Maybe a little alarmist, but I've definitely...

These are seeking funding for their center. Is that why they're making these statements? I'm not entirely sure. But, I mean, to that point, before the robots rise up and kill us all, let's see if we can profit a little bit. I mean, who... In the meantime, they're stealing all our jobs. Well, I mean, you look at companies like intuitive surgical, Medtronic, Arrowhead Research. There are companies out there that this is their business. I mean, is there a play here, Ron? Can I make a little money in the robots before they rise up in? destroy me?

I'm sure you could. And you just named companies like Intuitive Surgical that are great plays. I love what Amazon is doing with robots in their warehouses and really creating efficiencies by making the robots do all the work there. Do you have a favorite robot from entertainment culture? Yeah. What's that really old show? Will Robinson?

Yeah, the robot on Lost in Space. Lost in Space. James? I don't. I used to like R2D to it, but it's kind of like we had a falling out just in my mind. So I don't have it now. I know he's a villain, but T-1000. Come on.

Just the Liquid Terminator? Yeah. And you, Chris? You know, I always had a soft spot for Rosie the Maid on the Jetsons. The Jetsons. Drop us an email. Radio at Fool.com. Tell us your favorite robot. Up next, best-selling author Bob Posen, with tips on how to reduce your email, be more productive at work, and balance your portfolio.

I gave money, except my bills and helps me make up my mind. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Looking to be more productive? Robert Posen is a senior lecturer at Harvard Business School and a senior fellow at the Brookings Institution. He's also served as chairman of MFS investments and vice chairman of Fidelity Investments. And somewhere along the way, he found time to write a bunch of books.

And his latest is Extreme Productivity, Boost Your Results, Reduce Your Hours. And he joins me in studio now. Thanks so much for coming here. Glad to be with you. You've written books. We've talked before, books you've written about the financial industry. What got you interested in productivity, that you wanted to write this book? Well, at one time, I was actually working two full-time jobs.

I was chairman of MFS investments, and I had a full-time teaching load at Harvard Business School. And on the side, I was writing occasional articles for Harvard Business Review. and they kept saying, you're getting your articles in on time. Everyone else is late. How do you do this when you have two jobs? And he said they're all slackers. So they interviewed me and ran the interview on the HBR blog, and it sort of went viral.

So I found that people were really interested in this subject, and it was much broader subject than the financial things that I've written in the past. So let's get to some of the things that we can all do to be more productive, And one of the things that you hit on in the book is, I think, a challenge for, it's certainly a challenge for me. I think it's a challenge for a lot of people in their jobs, and that is managing email, all of the email that we get. How do we do it? How do we better manage email? Well, I have two big roles for managing email. The first is you can look at the subject matter or the title of most emails, maybe even 80 or 90 percent of them, and just disregard them.

because you know that this is an email you're getting every day from some standard something, or you're just part of a long supply chain of people where you have no real interest in it. So my view is you've got to have the discipline just to essentially skip over 80 to 90% just by the subject. And then I use the principle of Ohio, only handle it once. meaning if it's an important email, then answer it right then and there. Don't put it off for a few days or a few weeks because then you'll either forget it or you'll spend an hour looking for it. Now, some people say, well, maybe you'll miss an email from your boss.

And I think the answer is you should have a special designation on your email from your boss. So when it pops up your boss's email, you have a little arrow or something like that. Are there rules of thumb that you use when it comes to writing email? Because as you're talking, I'm thinking to myself, okay, that's if I'm getting email sent to me, but what can I do to be better on the other end when I'm sending it out? Well, I think the most important thing is not to send it out to too many people. And part of that is never to hit the reply to all button unless you really want to reply to all. I think we've all made that mistake once or twice.

And you wind up with these huge things. We've all seen it, and it comes over and over again. So that's the most important thing. The second thing that I have a bugaboo about is I don't think you should write emails just to say okay or thank you because the other person will read them because they know who you are and it really clutters up the email. Third is you just got to get to the point. You know, email writing is just, you know, what's the point? Here are the few points and just get them down.

The other thing I'm sure you've realized is if you're running a company, you've got to get people not to go wide. on their emails. It's amazing what people will say in emails that they would never say in a letter or a phone call. And it can really get them in trouble, get the company in trouble. So you really got to have people restrain themselves. And it's so easy to quickly write in something that's outrageous. But when you read it six months later, it doesn't seem so funny. One of the tips that you have in here, I absolutely love. And I'm sure that Homer Simpson would love it if he were an excellent. person and not a cartoon character, and that is take a nap during the workday. Now, I love the idea, but that seems like an idea that would be tough for most people to execute on the job. Well, you know, when I was a young guy and, you know, I was working as an employee in various

places, I still took the nap. I take a nap only 20, 25 minutes. It's not a long nap. and the science shows you that that's how much you need that really rejuvenates you. People are worried about going too long the nap. You set an alarm, you get into that. The other thing is what I do is have a blindfold and I have earplugs. And so literally, in this studio, I could put my feet up and go to the side of the table here and take a little nap. and I've just trained myself to do it. So you don't need to have a big office and a couch and everything like that.

You can do it. Probably the most difficult thing is some people are afraid that their boss will see them and say, what are you doing, screwing off? But you have to educate your boss that this is a way in which actually I'm going to be more productive. I'm going to get more done. I'll tell you, well, when we're done talking, I'm going shopping for a blind hole in earplugs. You're listening to Motley Full Money talking with Bob Posen. His new book is Extreme Productivity, Boost Your Res your results.

reduce your hours. What has been the biggest shift in your thinking over your career when it comes to productivity? Because certainly there has been different conventional wisdoms along the way. What has changed the most in your thinking when it comes to this topic? Well, as I've moved up the ranks and held more senior positions, I've become more and more convinced that delegation is a really key to productivity. There are lots of people who are great individual producers, but when they are then asked to manage a group or ask to manage a organization, they have great difficulty in delegating. But delegation is the core of productivity for a manager. If she or he can get the team to do lots of things, then the team is much more

productive, especially if the team can do what are lower priority issues for the manager. But People have such a hard time doing it that I've spent, you know, a considerable amount of thinking about how do you coach people to be good delegates? And I think it begins first with doing good recruitment. There are a lot of people willing to have the HR apartment do the recruiting or call the references. I think that's a big mistake. If you hire the right person, your life is easy. You hire the wrong person. You regret it for years.

So hiring the right person is something you really need. to spend a lot of time on. Second of all, you've got to meet with a person regularly and figure out what their priority projects are and what their metrics are for that. And third of all, you've got to tolerate mistakes. I used to have a saying that I used a lot saying, let's make a new mistake. It's okay to make a mistake once, then you learn from it, but we try not to make new mistakes. You're listening to Motley Full Money talking with Bob Poston. His new book is Extreme Productivity, Boost Your Results, Reduce Your Hours, something that you also address in the book, and I think is a challenge for a lot of people, and that is the whole notion of balancing your work life with your home life. What has worked for you in your career? You're married. You have children. They're grown now, but over your career, what has worked for you in terms of balancing work and life?

Well, I think the most important thing was that I got home every night for dinner at 7 p.m. with my wife and children. And in places, especially places like New York City, people have a sort of religion that they don't get home until 11 o'clock every night. And they're actually very proud of it. I work till midnight, you know, five nights in a row. And they claim that there are emergencies or various other things. Well, I don't believe it. I've had some very stressful jobs running some very very large companies. But you can still get home every night at 7 o'clock, and that's the key to your family life. Now, if you have to go back to work at 10 o'clock, you can go to your home office, or if you don't have a home office, just a desk someplace and work some more. But unless you do that, those few hours every night, you're really going to lose a lot with your family. And of course, there are some real emergencies, but it can't be the case that there are emergencies four and five nights a week. That's just not credible. I've got to ask you a couple of questions about mutual funds. We've talked in the past about

issues that you've addressed through your writing about the mutual fund industry. And in thinking about our conversation today, one of the things I was thinking was that if you're the average investor, you can't go a week without running into numerous advertisements, either in print or online or on television from all kinds of fund companies touting how great their funds are. And it's a little confusing if all of these companies are saying, well, we all have these, you know, top-rated funds and that sort of thing. Help our listeners out. What are a couple of specific things that people can do to sort of cut through the noise when they are trying to evaluate mutual fund investing? What are a couple of things that they're

they can look for to help them figure out what's going to be a good fund for them? Well, the first and most important thing in any investor's decision-making is his or her asset allocation. That's the most important, how much is in stocks, how much is in bonds, how much is in real estate. Actually, there have been studies that show that the differences between different bond funds are modest compared to whether you have 20% in bonds or 50% in bonds. And the way to make an intelligent asset allocation is to sit down with a financial advisor and to understand your risk appetite, your time horizon, your tax considerations, and do that. Then second of all, once you decide that, okay, let's assume you want to have certain bond funds of high quality

or you wanted to have an international stock fund. Well, you're best off disregarding all these advertisements and just going online, something like Modley Fool. You can find the rankings of these things, and they're ranked by any way you want to. They're ranked by performance. I would stay away from one-year performance. One-year performance is very dangerous.

But look at three-and-five-year performance, and then look at expenses. Those are the real important things. given the number of funds that you can buy now without sales load, either load waived or no load, it's hard to justify buying with a big load, but there are many other ways to do it. And then third of all, I think you've got to reevaluate your portfolio every year. Actually, I think most people are better at making intelligent buy decisions than making sell decisions. If people have funds that have lost money, even if that fund is really not for them, really not good for them, they have a real hard time selling it, even if it's a small loss.

And then if the funds made money, they think, well, wait a second, I don't want to pay taxes and do this. But that really isn't very good. And so I think that people have to be willing to be disciplined on the sell side as well as on the buy side. You're listening to Motley Full Money, talking with Bob Posen. His new book is Extreme Productivity, Boost Your Results, Reduce Your Hours. We will wrap up with a round of Buy-Seller Hold. A lot of us rely on this to get us going in the morning. Buy-Seller Hold, coffee.

Well, I'll be buy on coffee. I'm a coffee guy myself. Does it help your productivity? It does. And when I don't have it, I don't have my cup of coffee, I'm feeling a little down in the morning until I perk up. Buy seller hold getting eight hours of sleep a night. Well, I'm a strong buy on that, and people say to me, you do so much how much, you know,

you couldn't possibly sleep, you sleep four, you must sleep four or five hours. Well, I do sleep every night from about 11 to 7. And there are lots of studies that show that people who only sleep four or five hours, A, their performance goes down and lots of tests, and B, they don't think it goes down. That's worse, because not only is it going down, they think it's not going down. And, you know, I don't doubt that there are people who can get along on seven or six hours, but when you get down to four or five, the evidence is really compelling that maybe one out of every hundred people can really get away with that. Not everyone is a fan of this business strategy.

Buy seller hold, brainstorming. Well, I have to say hold, because I think brainstorming can be. be good or it can be really bad. And ironically, it's good when it's structured and it's not so good when it's just what I call chaotic. If you just bring people in work and an idea and say, let's think of any idea we can about the internet. Well, write it up on the whiteboard. Yeah, and you'll just have chaos. But if you sort of say, well, look, what we're trying to do is start a new sort of insurance product or new credit card product for this audience and these are sort of the types of people we think and the sort of cost structure.

Yeah, then you can have a good brainstorming. Otherwise, it's just chaos. And finally, you have co-authored a book with Robert Schiller of the Case Schiller Housing Index. So buy seller, hold, the Posen Index. Well, I have to say hold because I don't think there is one yet. I think we can come up with them. Yeah, we better do that. We have to have the Posen Index of Productivity.

I was just going to say, I think it's a productivity index. Well, you and I got to work on that one. The Washington Post calls it one of the great leadership books of 2012. It is extreme productivity, boost your results, reduce your hours. Bob Posen, thank you so much for being here. Thank you for having me. Coming up, we'll give you an inside look at the stocks on our radar. This is Motley Full Money.

As always, people on the program may have interest in the stocks they talk about. and the Modelicole may have formal recommendations for her against. So don't buy ourselves stocks, basely on what you're here. I'm Chris Hill, joining me in studio. Once again, Joe Mager, James Early, and Ron Gross. And, guys, we will bring in our man from the other side of the glass, Steve Broido, because it is that time. It's time for the stocks on our radar.

Ron Gross, you're up first. Steve's going to have a question for you, so I hope, unlike most weeks, you actually prepared. How dare you? On my radar is a company called The Fresh Market, and it's ticker symbol T-FM, and they're a boutique grocery store. Have you ever been? I have not been, but I know it's a cheaper stock today than it was a week ago. All right, so that's what's caught my eye.

One, I personally like to shop there. One has opened up in my neighborhood relatively recently. Plus, the stock got slammed about 15% this week on less than expected earnings. But come on. Sales are up 22%. Net income up 19%. Companies are doing fantastic. Valuation is the tricky part.

See how much growth runway they have. How many stores can they open? But it definitely came up by my radar. And the ticker symbol? T-F-M. Steve, question about the fresh market? Yes, how does it protect itself from, I don't know, maybe a terrible winter or two in Florida? I mean, if you're selling produce, you seem at the mercy of Mother Nature.

And Mother Nature, I think, as we all know, can be a cruel, cruel woman. It's obviously, it's not just produce, but as a typical grocery store would, obviously a big part of their business is produce, but has the prepared foods and some of the dried goods as well. It's supposed to give you kind of like that boutique feel. It kind of feels like a Balducci's, if you will. And, you know, obviously, they would jack prices off if something scarce, like, you know, strawberries or blueberries or things like that. They would adjust prices. But nowadays, you can source products like that from quite a few places.

Do you have a go-to? Because I've never been to one. What's your go-to item when you're shopping in there? Well, what's interesting is that there is no meat counter. What? Anything you want, anything you want, including ground beef, you have to go to the man and say, I'd, like, a quarter pound, a full pound, whatever you want. So there, it's nothing is pre-packaged in cellophane. Got it.

So everything is really nice and fresh. Because for a second there, I was going to say, that sounds like a place Joe Meager and I will never ever go. James, early, your stock? Chris, I've been talking a lot about Giant Interactive lately. The ticker is GA. I haven't heard you talk about it once. You haven't? Okay, well, no, I am.

A Chinese, it's a recent income investor recommendation. It's a Chinese online video game company. Up to a million people can play these games at the same time. And the games are typically free. They make money when people buy the lucky charms, like the charmed staffs or the swords to chop up the bad guys. and this is actually pretty big business. These people get addicted. This is run by a math, a genius billionaire guy named Yuzu Shi.

He and his daughter own 55.5% of the company, which is actually reassuring for people who are worried about Chinese stocks, about a 5% or 6% yield also depending on the day. Sometimes I think he makes these up. Is it real? This is real. I can't confirm or deny it. Steve?

I think I actually read this in your recent Income Investor newsletter. I was reading this, and my thought was, I don't know if I trust a dividend coming out of China. I know that's maybe not the most polite thing to say, but it seems like we've had so much concern over the reliability of the Chinese economy. And your question is? That's just a statement.

Technically, it's a Cayman Islands company. So what could go wrong? Yeah, the dividend is also net of taxes too, so you get all that. There's no withholding. Joe Maker, your stock? Yum Brands. The stock fell on Friday more than any single day in the last four. years because they announced that comps in China, which is their big growth market for KFC Taco Bell Pizza Hut,

are going to be down 4% in the fourth quarter. They were up 21% last year, which is a pretty nasty turnaround. Speaking of awesome news out of China, the stock fell about 10%. It's still not cheap at around 20 times earnings, but it's a great business that I'd love to buy at a good price, so I'd love to see it just keep spilling back. Steve? Where does Taco Bell or KFC rank in the pyramid of, like McDonald's would probably be, in my You're the number one fast food restaurant, maybe two is Burger King or Wendy. Where does Taco Bell and KFC fit in? Where do they fit into that?

Well, it depends on whether you define about like restaurant counts or revenue and what country. Goodness? I'd probably say none of those. I'd say five guys. But in China in particular, they are the biggest fast food chain by a wide margin. I try to give my dog Taco Bell meat one time and she wouldn't eat it. They have a nose for tainted meat. You won't be doing a commercial for Taco Bell anytime soon.

On that note, Ron Gross, James Early, Joe Maker Guys. Thanks for being here. Thank you. That's it for this edition of Motley Full Money. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening.

We'll see you next week.