Motley Fool Money - Motley Fool Money: 12.06.2013

Episode Date: December 6, 2013

Amazon unveils a high-flying initiative.  Apple inks a deal with the world's biggest mobile carrier.  And Sears spins off Lands End.   Our analysts discuss those stories and we talk about the big business of blockbusters with Anita Elberse, author of Blockbusters: Hit-Making, Risk-Taking, and the Big Business of Entertainment.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone, I'm Charlie Cox. Join us on Disney Plus as we talk with the cast and crew of Marvel Television's Daredevil Born Again. What haven't you gotten to do as Daredevil? Being the Avengers. Charlie and Vincent came to play. I get emotional when I think about it. One of the great finale of any episode we've ever done. We are going to play Truth or Daredevil.

What? Oh boy. Fantastic. You guys go hard, man. Daredevil Born Again, official podcast Tuesdays, and stream season two of Marvel Television's Daredevil Born Again on Disney Plus. Everybody needs money. That's why they call it money.

From Fool Global Headquarters, this is Motley Fool Money. Welcome to Motley Fool Money. Thanks for being here. I'm your host, Chris Hill, joining me in studio this week. From Motley Fool 1, Jason Moser, and from Million Dollar Portfolio, Charlie Travers, and Ron Gross. Good to see you, gents. How you look, Chris? We've got flying drones, falling stocks, and a brand new reason to go to the Olive Garden. We will dig into the big business of entertainment, and as always,

We will share a few stocks you can put on your watch list. But we begin this week with the big macro. The November Jobs report was out Friday morning. Unemployment dropping to 7 percent run. It is the lowest point in five years. You combine that with the good housing data we got earlier in the week, the good auto sales numbers. Well, well, well.

How good are things looking right now? I have nothing cynical to say, which scares the out of me. I really like the way this looks. is really strong. We want to go lower, but it's pretty good. The labor participation rate actually went up a bit, which is good. Sometimes we see the unemployment rate go down because of the way the math shakes out. When people leave the labor force, that's not the case this time. That U6 number, that full employment number, also came down. Things are really strong. Auto sales looked good. Housing looked good. Consumer sentiment looked very strong. Numbers

came out on Friday morning. What could go wrong, Chris? Charlie, when you consider that before this week, a lot of the macro data, a lot of the industry data that we saw, particularly I'm thinking retail, was just looking pretty gruesome heading into the holiday season. And this is really a great week. I'm glad you brought up retail, Chris, because I'm perplexed. You would think if more people are going back to work that you would see that flow through retail. And yet companies like Coles, Target, Walmart, are all giving soft guidance for the holiday season, which is surprising. I guess it's all going into housing and autos and not as much into retailers.

I will say I was at the local mall over Black Friday weekend, and it looked deserted. So I don't think this is a great sign for most retailers. Interest rates still being low, I think the things that are housing and auto are definitely still being affected in a positive way by those. those low interest rates, but the auto numbers were helped out by a lot of incentives, a lot of promotional activity. Black Friday, what are we going to call it? I'm going to say it was tepidly good. It wasn't great.

It wasn't horrible. More people were shopping, just, I think, lower ticket items, less money spent. I'll give you a little cynicism for Ron. I mean, I know he didn't want to do it, but I'll do it. I mean, I think the employment numbers were encouraging, certainly. I think the other interesting thing to note here is we talked a little bit about this week, sort of this push to raise the minimum wage. And I know that, obviously, I mean, historically speaking, there will be a raise to the minimum wage at some point. But there was a strike yesterday I saw

in fast food restaurants where fast food workers were striking, demanding $15 an hour, which is basically double the rate now. I think the point is that if you look at this minimum wage issue, I think it's going to continue to be brought to the forefront and talked about, that is something that could make some of these companies, McDonald's, Young Brands, places like that, this could give them a little bit of a headwind in the way of jobs, I think. Companies with more pricing power, something like Chipotle and Starbucks, they can pass those higher labor costs on through might not be so affected by it. But I think that's something at least to keep an eye on, because it's going to be something that becomes more of an issue here as time

goes on. Ron, just bringing it back to auto sales, one thing we did see was Black Friday sales in the auto industry, getting a lot of credit for those good numbers that we saw coming out in November. Maybe the most bizarre thing I saw this week was the CEO of Auto Nation giving credit to Ron Burgundy for boosting sales. Those are good commercials. They're good commercials, but apparently they're also effective commercials because Dodge Durango sales are going through the roof. Yeah, sales were definitely strong, but there was promotional activity. Sales were helped by some new model introductions as well. But overall, numbers look good. Long been rumored is now official. Apple and China Mobile have finally reached a deal that

will have the world's biggest mobile carrier offering the iPhone on its network. And Jason, as we've talked about before, more than 700 million subscribers in the China mobile network. Yeah, and you figure that hearing a number like that, the stock would have popped following the news, which it didn't. It was really just modestly. That may be a percent. I think there's a good reason why, though. I mean, if you look at sort of the GDP per capita, you know, But, for example, in China, this measure of sort of the standard of living in. That's $6,000 in China versus $50,000 here in the United States. And so this all leads me to the point that I think, number one, you're going to see some more economic sensitivity to the iPhone

in China than we see here. That's going to be, that's going to reduce that 700 million subscriber base, I think, significantly. And then number two, because of that economic sensitivity, it's going to be, they're going to have harder time really commanding control of that replacement cycle, like they control it here. So there aren't going to be the same sort of robust upgrade numbers that we witness here, thanks to the subsidized models that we enjoy. So while I think it is a good thing for Apple, obviously, I can understand the market's muted reaction because I just don't think that 700 million subscriber base is necessarily

indicative of the total market. You're totally right, Jason. And you're not going to see on China Mobile's network, say, 30, 40 percent of their phones are iPhones like you might see in developed countries. but they don't need that. If 5% of that is, you know, 30 million phones, that's a needle mover for Apple. No doubt. And I think they could, you know, get enough to help them, even if it's a small percentage of the total China mobile membership. And I don't think most analysts were incorporating this deal into their estimates on purpose. While we all hoped it would come, I think most people were doing what we were doing,

and we were taking a wait-and-see approach. So I think this will incrementally add to estimates going forward. I think it's a positive for the stock. I think we did see some strength in the stock over the last two weeks. So maybe there was some buy-on-the-room or sell on the news going on, but I think it's a net positive for the company. Meanwhile, closer to home, we have Carl Eichke. the billionaire activist investor, gracing the cover of Time Magazine with the gaudy headline, Master of the Universe, Time Magazine calling him the most important investor in America.

And his latest push now, he's really serious about trying to convince Apple to buy back $50 billion worth of stock. Is he right? I think he's right. I'm in favor of that. Incidentally, it's less than the $250 billion he was talking about previously. He's going to try to take this to a $1.5 billion. vote of shareholders, probably easier to get a $50 billion vote for yes than it would be to get $250. But I don't see a good reason for Apple not to do that. They are returning a lot

of money to shareholders. It's not like they're not active in that space. But I think they certainly can do more. So, as an Apple shareholder, I would probably be inclined to agree with that, but no promises until I see the details. Sears announced it will spin off its lands-end business as a way to turn things around, and they needed, Charlie, because shares down 20 percent this week. Is something like this going to help? No. In a word.

Okay, next story. Cupcake in, Charlie. Yeah. Sears has been divesting assets left and right over the last two years. They got rid of their Sears hometown and outlets, orchard supply hardware. Now, Lanz End. They're talking about the auto centers that are attached to Sears. Those could be on the table as well.

Basically, everything except the kitchen sink is going out the door at Sears. The company is bleeding money. I think there is a good case to get rid of Land's End, which would be to let the company find its own capital to run its business. There are some nice things about Land's End. It's mostly an online company at this point, so they don't have the overhead of running retail stores to deal with. They did a billion six in revenue last year, and they were profit. So this will happen. What it means if you're a Sears shareholders,

you will own shares of Land's End as well. I think you have to be a little bit careful here. Landsend's profitability is down every year since 2008. It's not necessarily doing well in its own right. I was hoping to see some better numbers when I peaked into the filing this morning. I did see that. So I would say stay away from Sears and stay away from Land's End.

I don't think this is a magic bullet for either company. In an interview with 60 Minutes, Amazon CEO Jeff Bezos revealed his company is testing flying drones as a way to deliver small packages to consumers more quickly. And Jason, as the week played out, we saw companies like UPS coming forward and saying, yeah, we're looking into this. Do you think this is a small bet by Amazon or a big bet? So I think that it is more along the lines of a small bet for Amazon today because they are placing such big bets in their retail model and with Amazon Web services, that this is just a way for them to hopefully incrementally improve that retail side of the operation. In the interview, Bezos's point he kept on hammering on was that they're trying to make this retail model work. In other words, that's why they're building more distribution centers, more fulfillment centers, introducing the possibility of these delivery drones, which I think we all agreed probably need a name change there to really change.

Yeah, drones are a terrible brand. You know, they feel like there's some sort of surreptitious ploy here to, you know, go against the American public and spy on us. But really, I mean, this is something where, I mean, the FAA is working on rules for unmanned aerial vehicles. I mean, this is something that, according to Amazon, it's going to happen. The videos looked neat, I thought. We certainly saw Domino's in the UK try this. Maybe it's a bit of a publicity stunt when they tried it, but they delivered a pizza with an unmanned drone, so that was kind of cool.

But I mean, this is all, you know, he's all about the customer, you know, figuring out a way to get things to the customer in the quickest way possible. And if it can help the economics of the business, well, then I'm all for it too. Charlie, if you think that this is going to happen, whether it is Amazon or whoever, then don't you need as an investor to start looking at Lockheed? Pete Martin, Aeroveironment. I mean, I look at this and I think, gosh, if drones really are coming in some significant way, someone's got to build these things.

That is true. I would say I'm not sure who that player would be. Most of the large defense contractors, like a Lockheed that you might think of, you know, some of those like submarines, for example, that's a $2 billion order versus these drones, which couldn't cost more than a couple hundred bucks, so I wouldn't see it as needle moving unless it's a small company like Air Environment. Coming up, donuts and burgers and makeup. Oh, my, you're listening to Motley Full Money.

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So visit Mosey.com. Use the promo code Fool to save 10% on your initial purchase. That's M-O-Z-Y.com. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Charlie Travers, and Ron Gross. Shares of Alta Salon Cosmetics got whacked on Friday, so we turned to our cosmetics expert, Ron Gross. The third quarter results look good. they were warning about the fourth quarter.

And I'm wondering if, as we've talked about before, with retail, is this a symptom of just too many holiday discounts? Well, it's definitely in line with what we're hearing from other retailers. I actually think the numbers look pretty good in light of the fact that we're in somewhat of a weak retail environment. Stampsor sales were still up 6.8%. Now, that's lower than the 8.9% last year, which gets people spooked. When you're paying 15 times EBIT dot or more for a company, when you see decelerating growth, you're going to get the momentum players at the very least sell off the stock.

And that's why you get stocks that get hit 20 percent in one day, even though they grew profit 19 percent for the quarter. So I think results look fine. Retailers are a bit of a mess right now. They're going to have to be promotional. It's going to hurt margins. They're doing it to maintain market share. Still a long growth runway.

They could probably double the store count. own just a little bit of a nibble of this stock right now, but a pullback like this gets me even more interested. Shares of Krispy Kreme Donuts down 20% this week. Once again, Charlie, third quarter results look good, but the projections for the next fiscal year is what spooked investors. Yes. So they grew EPS at 30% this year and said next year it'll be about 20% growth. There's a lot of companies that would kill for 20% growth next year. Sure. Similar to Alta, when the expectations here were so high for Krispies, Cream, and then they're only, in quotes, going to do 20%, you know, the stock sold off. You've got to

put this in some perspective. The stock is still doubled this year. So if you've owned Krispy Cream, you're still very happy with what they're doing. I do like where Krispy Cream is headed. Over the next three years, they could roughly double their store count, domestic and internationally. I think we all think of Krispy Cream as an American business, but actually the international franchisees are over half the company's operating profit at this point. So apparently, donuts are universal. So I do. As we always suspected.

As we always suspected. I think the one point of concern here is that even with the sell-off, Krispy Kreme is still trading at almost 60 times earnings. That's a pretty expensive stock. So I'd put it in white and C mode. Jason, this is a company that was really struggling. You look at 2009, the stock was trading for a dollar. And to Charlie's point, they just pulled off an amazing four or five-year run, particularly when you look at something like how they were able to grow,

same store sales quarter after quarter. Yeah, and I mean, I remember growing up in Charleston, Krispy Cream was the place to get donuts. Like Dunkin' Donuts was just, I don't even know. It was just an afterthought, really. Heresy. It's been amazing what they've done, especially in light of the things that happened to the company in the recent past. I guess the one thing that concerns me with something like a Krispy Cream, and why I can't

quite get past this as a potential investment is, I don't think they possess the same sort of consumer packaged segment potential that you see from a Dunkin' Donuts or a Starbucks. In other words, I'm skeptical that they could get Krispy Cream brand coffee on the shelves in the store. It is caught. I mean, I know donuts don't have nearly the same hurdle there, but I think the coffee side is where I'm really having a hang up here. Before we get to our final story, a personal note for longtime listeners, some happy news

from Australia this week. Uncle Joe Mager is now Papa Joe Mager. Yeah. So, congrats to our man, Joe, and his lovely bride and baby Jackmager, who is this right that he already set up a Twitter account for his kid? I think. TMF Jack Investor, yeah. That sounds like Joe. That does.

So anyway, congrats to Joe on that. Our final story, we're going to have to go to the other side of the glass for this one. This week, Olive Garden started selling the Italian burger with crispy prosciutto fresh mozzarella cheese in an attempt to better compete with other fast casual restaurants like chilies and Applebee's. So I turn to our man behind the glass investor and Olive Garden fan extraordinaire, Steve Broido. Steve, first and foremost, from a business standpoint, is this a good move? Hazzar and Excelsior. It cannot get much better.

Getting Olive Garden's brand out there is always a good thing. Having more menu options is a good thing. And let me just let the audience know. I love the Olive Garden, not in a hipster ironic way. really do enjoy going there. I just love the salad dressing. I think it's great. And if there's a burger there, even better. Are you concerned that, and I'm getting this off of their menu, that this burger, six-ounce burger, has over a thousand calories? Not at all. I think if you're going there, you're going to stock up and more power to you. It's going to be a thousand calories

one way or another. If you get it without the prosciutto, you'll probably get it down to 850. It's a win-win, really. In all seriousness, is this, this I was ready to make fun of this, but I look at this and I think, you know what, this is a small bet, and this makes sense for this business. This is not, yes, it's the Olive Garden and they have the Italian theme going on. But I don't look at this as any significant departure from what they're doing. It's kind of, I see it as somewhat of a departure, but they'll sell some. I don't think it's going to be the main thing that they sell. But as Steve said, it's always nice to get a little bit of an expansion to the menu. But they'll stick to their bread and butter, you know, the good old breadsticks and chicken parmesan. You're not telling anybody to go to Olive Garden to get the burger, right? I mean, that's just sort of an incidental, like, family's going to Olive Garden, and I don't really feel like you're telling him. Well, they have a burger there, so maybe okay.

Charlie's just shaking as that. Well, Charlie and I, I mean, everyone's no one's no one. We'll take up to it. We're raised Hellburger. So we get used to these things. You can't really heat up. Unless it's at the Olive Garden. Right.

The other thing that surprised me about this is that they did this in response to chilies and applebees, which apparently are, I don't want to say they're crushing Olive Garden, but they're certainly executing better of late. I don't know. It just got me thinking, Jason, about what we talked about before with Chipotle and these restaurants facing the same challenge that, look, there are high input costs, and it's all about execution. Well, yeah, and that casual dining segment has faced a lot of headwinds recently because of this explosion in the fast casual, and so these casual dining segments are having to become more things to more people. And so, you know, on the one hand, whether chilies or an applebees, I mean, they have all sorts of menu offerings.

You know, now we're going to see the Olive Garden is going to introduce anything else. Steve, will you commit to trying one of these in the next few weeks? I will not. Chicken farmer. Chicken farmer bust. That's awesome. All right. Ron Gross, Charlie Travers, Jason Mozerich.

Guys, we'll see you later in the show. Up next, a look at the big business of entertainment. You're listening to Motley Full Money. Shave it in the face. Give them what they want. Gotta make it fast. It's a fast for a restaurant. Welcome back to Motley Fool Money. I'm Chris Hill. It was just this past June that Steven Spielberg predicted the movie business would eventually implode. Spielberg said a few mega-budget movies would crash changing the way the industry works. And I am guessing that our guests this week politely disagrees. Anita Albersi is a professor at the Harvard Business School and she is the author of the new book, Blockbusters, hit-making, risk-taking, and the big business of entertainment.

Anita, thanks so much for being here. Thanks so much for having me. It's a pleasure. We have talked on this show before about movies that were huge flops just over the last year or so, The Lone Ranger, John Carter. These are movies that lost hundreds of millions of dollars. And yet, looking through your book, it sounds like we're just going to keep seeing that scenario play out time and time again. Why is that? Well, yes, absolutely. I think we'll see that scenario, play out more in the future.

And it's because making these blockbuster movies, as risky as it is, actually is probably the best way to go for these movie studios. Spreading their resources across a larger number of smaller bets. So making, instead of these three to five, ten-pole movies, making maybe 15 smaller movies is actually much riskier. It would have much greater chance of failure. So making these big blockluster movies still is their best back. One of the businesses that you cite that has employed this blockbuster strategy with great success is Warner Brothers.

What are they doing that other movie studios aren't doing? Well, what I learned about Warner Brothers is that Alan Horn, who was in charge, who was the COO with the Greenlight decision at the time that I've studied the studio. So from 1999 to 2011, he was in charge of what movies were. being made. And what he did really well, and I think more so than any other studio at the time, was to make the blockbuster strategy, truly a strategy. So not to just make one-off bets on blockbusters, but really from the get-go, in a given year, say these are the three to five big bets we're going to be making. And we know this going in. We're going to be making sure that we dedicate all the resources that we have to those films and everything else gets

planned around it. So he was truly living the blockbuster strategy and that paid off dividends for the studio. They had, under his leadership, 11 consecutive years of over a billion dollars at the box office in the U.S. and even more money in box office around the world. In the last decade, there was a popular business theory called The Long Tail, a very popular book as a result of that. And it basically says that the low cost of digital distribution would enable companies to make small amounts of money off a huge range of book titles, music styles, movie genres. I remember when that theory was really being pushed when the book came out and it seemed to make sense. Why didn't it really play out that way?

Well, I think, I mean, it played out in some ways, right? So we see it on the supply side. We see that there is an enormous abundance of product in the marketplace. We see, in a way, or in terms of the long-tail theory, we see a very long tail being offered to us. Amazon is offering many more books than your Barnes & Noble physical store will, and Netflix is offering a lot more films than we would see previously at Blockbuster, a DVD rental store. But the problem is that demand isn't necessarily following that supply.

So, yeah, there's some consumption that moves to the tail, but the products that really benefit from the increased access, from the lower cost that go along with offering these products, are the products that were popular to begin with. It's the hits that are getting bigger, and it's not necessarily demand, as Chris Anderson predicted, moving to the tail. In fact, we're seeing bigger when it take all markets, and it's actually quite difficult for many of these businesses that have these really long-tail assortments, to make the long tail pay for itself. You're listening to Motley Fool Money, talking with Anita Albersi. Her new book is Blockbusters, Hitmaking, Risk Taking, and the Big Business of Entertainment. One of the things you write about is the entertainment industry today does not reward playing it safe.

And one example in the television industry is NBC, which, frankly, it wasn't that long ago that NBC was far in a way the number one broadcast television network, where did they go wrong? Well, I think that went wrong with Jeff Zucker saying that the time was right for what he called a managing for margin strategy. So he looked at the landscape, and he was getting scared, I think, about the big bets that were necessary to make these television shows on an ongoing basis. And, I mean, that's an understandable fear to have. There was an enormous expense in terms of the formats and in terms of the formats and in terms of

the A-list stars and in terms of the pilots that were being produced and often weren't very predictive of the appeal of the show. So he said we should scale that back. We should focus on cheaper formats. We should focus on lesser-known stars, and we shouldn't really be spending our money on these very expensive pilots. And he said we should focus much less on the ratings. We should focus on the profitability of the individual shows, and the way to do that would be to try to bring the cost down. The problem with that is that it actually increases the chance of failure. And that, I think, is the biggest explanation for NBC dropping from being the number one in terms of ratings to the number four in terms of ratings, and more importantly, and actually more

disturbingly for Zucker, profit margins also falling across the board. So it's been a strategy that on the face of it seems to actually reduce risk. But when you look at how it turned out, it actually invited risk and a higher chance of failure. One of the things we talk about at the Motley Fool is something we call the Battle for the Living Room, which it seems is getting just more and more crowded. It's not just television networks, it's cable companies like Comcast. It is, as you mentioned, Netflix, Amazon, YouTube, Hulu. What do you think the future of television is going to look like?

So for me, this is one of the more fascinating aspects of today's entertainment world. If I knew the answer, 100%, I would not tell you. I would buy and thought and would make my millions. But, I mean, I think it will be very different. I think what we're starting to see is that the linear nature of television is disappearing. And if you ask, if I talk about it with my students and I ask how they are watching television, they watch television very differently from the way I even watch television, right? So they don't necessarily want to watch programs at a certain time,

and certainly not when programmers are saying they should be watching them. So I think the television will become a lot more non-linear. It's not about when they're being scheduled. It's much more about consuming them when you want to consume them. I think we'll see a fair amount of the network brands becoming less important. It's much more about the individual shows. Most people, I think, have a hard time that are watching Hulu or that are watching Netflix, have a hard time even recalling what networks, the shows that they love, really are on.

So I think we'll see the network brands decrease in importance. But what way in which these are going to be delivered to the home, I think, is the key question, right? Will we still have the set-top box? Will we have some sort of Apple TV or Google device? And who will control what we get to see and how we pay for that? And will it be unbundled or bundled? I think there's still a lot of questions that are completely unresolved. And yet for everything you just said, it seems as though the one programming area where that does not apply is when it comes to live sports.

So do you think that that wall is going to come crashing down anytime soon, or will live sports still remain the way they are? I mean, I think we'll see a change a little bit. And I actually talk about this in the book. I've done case studies on the NFL and Major League Baseball Advanced Media, which is the Internet arm or the online. online arm of major league baseball. And, I mean, I think they've been making changes. If you look at it, at both of these leagues, they've been drastically improving or enhancing the number of ways in which we as consumers can access their content.

They've also, both of them have been going direct to the consumer. There's the NFL network, there's MLB network, there's NFL.com. MLB offers you a range of ways in which you can consume content online. Will they go direct entirely? Will at some point we just consume NFL content from the NFL? I don't think that's going to happen anytime soon. I think they both realize that these network partners or the U.S.PNs of this world bring a lot to the table and help introduce their sport to the more casual fans.

So they won't really jump headfirst into really big changes. But I think they are on the margin making quite significant changes. You mentioned sports, and I should mention it's not just movies and television that you study in your book, that you research and write about, but it is the music industry. It is the business of sports as well. LeBron James is someone who shows up in your book. I am curious when you talk about companies, particularly in the film business, needing to spend money, needing to go after the big stars in television, that sort of thing. whether it is a team or a company that is seeking an endorsement, who gets more of the upside, the athlete or the company? That's a great question. And I think increasingly the answer there is the athlete or the celebrity or the personality.

Because frankly, they realize how much they bring to the table. And they've seen the enormous gains that some companies have made by employing these endorsers. and there's only a few endorses that really make a difference. There are only a few superstars that every company wants to work with. No one wants to work with the 37th most popular rapper. They all want to work with Jay-Z. And no one wants to work with the B player on the heat. They want to work with LeBron James.

And therefore, that gives them enormous power. And what we've seen, which is something I described in my book, is that they are increasingly pushing for compensation models that give them a huge air of the upside. So LeBron James is not really interested in getting a few million dollars as an upfront payment. He is asking for a share of the revenues of the brands that he endorses, or he's asking for an equity stake in the companies that he's working with. And that has worked very well for him in the past,

and I think it's setting him up to be a billion-dollar athlete and not just someone who gets tens of millions of dollars or even hundreds of millions of dollars. And that is very much, I think, the wave of the future. You're listening to Motley Full Money, talking with Anita Albersi. Her new book is Blockbuster's Hitmaking, Risk Taking, and the Big Business of Entertainment. This is your first book. What surprised you the most when you were working on it? Wow, that's an interesting question.

I'm not sure if there's something that really surprised me. I'd say what was interesting to see is how little the publishers actually do marketing. So there's been quite a bit of a crunch in the book publishing industry, and they have actually very few resources to bring to the table, I think, at the moment. Advertising budgets for books are extremely low. In the book, actually, I give an example of JV and his book Decoded, and I think most people would be surprised to know that this book that he released in 2010 had a $50,000 advertising budget, at least that's what Random House

I wanted to bring to the table now. If Jay-Z gets $50,000, you can only imagine what I get to my book. So there's no surprise that Jay-Z sought a partnership with Microsoft, and Microsoft was actually willing to pay $2 million for this very innovative campaign that they did for the Decoded book, and I describe how that unfolded in my book. Unfortunately, there was no electronic giant that said, and I mean that we're going to give you two million dollars to market your book. I'm still looking for a big company that steps up in a big way like that.

Now, you say that, but one of the things I discovered in my research for this interview is that your book party for the launch of your book was quite different from the average book party to launch a book. In fact, it was much more like a party that Jay-Z would have. Could you just share with our listeners how you came to have a book party at the marquee club? Ah, yes. Well, I mean, I figured I'd live what I'd say in the book, right? So instead of doing a whole bunch of smaller parties, what happens, this is actually one of the things that surprised me. What happens when you write a book is a whole bunch of people say, I'd love to throw a party for you. And I thought, well, this is nice, but how many people will come to your party? I'd much rather

combine all these offers and throw one big party to which all of these people invite their contact. So that was the idea going in. And then the people at the people at at Marquis were kind enough to offer the space. Marquis is a nightclub that features in the case. I've studied them in the past five years. So there's an existing relationship, and they said, you can use the space. And I found a few sponsors willing to make it all possible.

And, again, not the $2 million kind of budgets, but they were kind enough to step up. And yeah, and we had, I'd say, about five, six hundred people, come to the book launch. The club was entirely ours, which is quite amazing, and LeBron James himself even showed up. Again, that's not the typical book party. You do realize that, though, right?

I do realize that, yes. I also don't have the typical life of a professor, I'd say. So I'm slightly more used to it, I think, that strange things happen in my life. But it was still a night that I have to remind myself actually happened. occasionally because it was quite unusual. All right, we'll wrap up with a round of buy-seller hold. He's replacing Jay Leno in 2014. Buy-seller-hold Jimmy Fallon as host of the Tonight Show.

Definitely a buy. Strong buy? You didn't even hesitate there. Oh, no, no, that's a strong buy, yes. It's going to be a huge success. This is the latest purchase of Amazon CEO, Jeff Bezos. Buy-seller Hold, the Washington Post. Oh, that one's more difficult. I'd say hold.

And finally, at various times this year, he has been the most followed man on Twitter, and he has a new movie coming out on Christmas Day, buy seller hold, Justin Bieber. I'd say sell. Really? Yes. Because if Justin Bieber was a stock, he'd be trading incredibly high right now? because I'm not sure if a stock can go any higher, so this would be the right time to sell. You heard it here first.

The book is Blockbusters, Hit Making, Risk Taking, and the Big Business of Entertainment. It is already on Amazon's list of the best business books of 2013, so pick it up. Anita, thanks so much for being here. Thanks so much for having me. Coming up, we'll give 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 Motley Fool may have formal recommendations for or against.

So don't buy ourselves stocks based solely on what you hear. I'm Chris Hale, joining me in studio once again, Jason Moser, Charlie Travers, and Ron Gross. Guys, before we get to the stocks on our radar this week, I should mention we have a new special free report. The Motley Fool's Top Stock for 2014. Speaking of stock ideas, it's a free research report. You can get just by sending an email to Topstock at Fool.com. That's topstock, all one word. Topstock at Fool.com.

It's a report from our chief investment officer, Andy Cross, the Motley Fool's top stock for 2014. So, checking out. Ron Gross, you're up first. What do you got? Going with my beloved Costco, C-O-S-T. They report on Wednesday. We've owned the stock for years. But I've actually had it on hold for quite some time because at current prices, I don't see it as screamingly cheap. But I admire the company, as we've said, so much. And I'm really interested to see what they say. November same-star sales were disappointing to the strength. street and continuing this retail theme of being concerned. I'm really, really interested to hear

what they have to say. Steve Roido, question about Costco? If the economy tanks, does Costco do better or worse? I think they do better because the value proposition is there, and I don't think the $55 annual membership fee gets impacted in any significant way. You're not actually rooting for the economy to tank, though, are you? Absolutely not. I just wanted to clear that up. Charlie Travers? MFC Industrial. The ticker is MIL. This company is in the natural resources and commodities business. It's a little bit convoluted as to what exactly they're doing. I'll say they look to buy things like natural gas and iron ore properties on the cheap and then get more value for their shareholders that way. The stock is at like $7.50. Book values close to $12 a share. I think it's dramatically undervalued. I'm watching it because there's a nasty proxy fight in process.

30% shareholders trying to get seats on the board, and the CEO and chairman is saying, no way. Their shareholder meetings later in December, we'll see if this unlock some value. Steve? How did you find a stock like this? It was an old Hidden Gems recommendation. That's how I found it. Nice little plug for Motley Fool Research. All right, Jason Moser, we've got a minute left. What do you got? Tweet, tweet. Keep an eye on Twitter. I mean, I think this is just a really interesting company here. We have the quiet period that just ended. So a lot of analysts' estimates and expectations and some more research has come out of the company, and it's funny to see sort of the expectations cover the

gamut from sell to buy and everywhere in between. But I think that really it all boils down to your timeline with this company. When you look at it from a five-to-a-ten-year perspective as a long-term holding, I think you have to be pretty positive on Twitter's relevance in today's society, especially as a media platform. I don't know that it gets the credit it deserves there, but it's certainly one to keep an eye on. And maybe this will inspire Steve Broido to get on Twitter. And the ticker simple? T-W-T-R.

And how will Twitter make money again? Well, the Hesudo. It's advertising, right? But they actually just released something yesterday, a new idea that's tailored audiences to target more advertisements to relevant audiences. And so it's basically an ad play at this point. All right, that's going to do it for this week's show. We'll see you next week.