Motley Fool Money - Motley Fool Money: 12.14.2012

Episode Date: December 14, 2012

Google Maps returns to the iPhone. Costco fails to impress Wall Street. And Berkshire Hathaway makes a new buy. Our analysts discuss those stories and share some stocks on their radar.  Plus, CNBC's Carl Quintanilla talks fiscal cliff, Facebook, and the future of Twitter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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From Fool Global Headquarters, this is Motley Fool Money. Welcome to Motley Fool Money. Thanks for being here. I'm your host, Chris Hill, and joining me in studio this week for Motley Fool Inside Value, Joe Mager. And for a million-dollar portfolio, Charlie Travers and Ron Gross. Gentlemen, good to see you as always. How'd it? We've got Warren Buffett's latest deal.

We've got Jose Cuervo being left at the altar. And we've got Carl Cantania from CNBC with a look ahead to 2013. Plus, as always, we've got a few stocks on our radar. But we begin this week with two tech giants, Google and Apple. Three months ago, Apple unveiled the iPhone 6 with its own mapping feature. And, guys, I think it's fair to say that that was a bit of a debacle. This week, the Google Maps app returned to the iPhone. Ron Gross, I turned to you first. What do you make of this? It's back. Most downloaded free app. and people are loving it. There's some great improvements to it, actually.

You got the turn-by-turned-turned-audible navigation, street views there. It's a big mess up by Apple. I kind of want to get over it, though. You screw up. You correct it. That's what they did. Let's hope that it's not a pattern of additional screw-ups down the road. Apple benefits by having great apps. Google makes great apps in this particular case. So that's a win there. And we move on. Joe, I get the very nice silver whining case. I was just going to say, this seems. It's the holiday season, Joe.

I know that maybe this shouldn't matter, but it seems like from a reputation standpoint, this is borderline humiliating for Apple. Yeah, it's a big embarrassment, and it's always bad when your biggest rival sweeps in kind of on a chariot. We'll save the day. Yeah, and we're saving the day with this awesome Maps platform. You know, this isn't a huge game changer, but it is an embarrassment, a black eye for Apple. And there are people who, upon this, you know, coming across this whole episode, will look and say, well, you know, maybe I should be looking harder at an Android phone next time around because it seems like they've got their stuff together. Charlie, when you look at this whole episode, what do you do if you're Apple? Do you just give up on maps now, or do you go back to the drawing board and try and retool?

I think they've sunk so much time and effort and money into making their own maps that if they can get it up to par with Google Maps because they are arch enemies. They'd love to kick them off the platform, but I think they tried to do that a little too prematurely. It still comes pre-installed, so Apple Maps will get plenty of play here. We just hope that it's good, and they'll continue to get criticism for it. In general, I think the last six months has created a tremendous opportunity for shareholders who have never bought Apple or would like to buy Apple now to get in, down 27 percent from its high. I didn't even think its high was actually that exorbitant. 12 PE right here at this current price for a company that is, I think, one of the finest technology

consumer products companies out there. So I think it's a great opportunity to get in. Joe, what do you think? When you look at Google and Apple from a valuation standpoint to Ron's point, Apple's a lot cheaper today than it was a few months ago. Yeah, I like it 27 percent better than I did a few months ago. But I still think they're going to face a lot of headwinds in terms of tighter margins and competition from Google and Samsung.

So you love Apple at this price. I'm not a huge fan. The changes continue at Yahoo. Two board members have resigned effective immediately, and joining the board is Max Levchen. Charlie, he is the co-founder of PayPal. He is the chairman of the board over at Yelp. What does this move tell you about Yahoo and Marissa May are the relatively new CEO? Well, Chris, I think this finally can bring some of the stability that I was saying Yahoo

needed all along with all the CEO turnover, the board disruptions. And Max Lovchen has quite the pedigree. I think he'll be a great asset for Yahoo. He's previously a VP of engineering at Google, a co-founder of PayPal, a company you might have heard of, and the first investor of Yelp. And he's also a director at Evernote, which is a very popular program. I think he brings a lot of real-world experience in areas that Yahoo is looking to get it. Yahoo wants to have very personal experiences with 500 million users around the world.

They have that active user base across Yahoo! They have some tremendous properties and how to get the data out of it that all those people are giving them. A guy like Max can really bring them some expertise in that area, so I think this is a great move for them. Joe, when I hear things like, well, this guy is the co-founder of PayPal and he has... Look, a lot of people co-founded PayPal. No. Reed Hoffman, Peter Thiel, everybody gets credit for that. But also, you know, his standing at Yelp, does this pave the way to, if not some sort of merger with Yahoo, at least tighter relationships between an eBay and a Yelp along with Yahoo? I'm not so sure about where eBay fits into that, but I agree that Max was a great addition.

And Max, if you're listening, and you want to join another board of directors, I'm sure. What are the odds that he's listed? I think I speak on behalf of Tom Gardner here. We'd be happy to take you. Yeah, I think there could be more collaboration there between Yelp and Yahoo's a result. And definitely anything that would bolster Yahoo search results as they eventually wean off of working with Bing, which might happen. I don't know. That could happen. But I think if they did want to take more control of their own destiny on search, Yelp would be a good person for them to partner up with. I think it's so interesting how a good CEO can kind of change perception almost overnight. If you had asked me six months ago, I would have said Yahoo is probably not going to be a standalone company, you know, pick a time year or two from now. Now I'm not so sure. I think they can actually turn this around and make a go of it as long as they've got

to do a bunch of right things, but it seems much more likely now. And it's just six months. And it's really interesting to me. Charlie, to that point, Marissa Mayer has been CEO for about five months. stock is up around 25% in that time. When you look at shares of Yahoo, what do you think of them in terms of how they're priced right now? She's killing it. I agree with Ron. I think it's a better buy today at a higher price than it might have been six months ago when nobody wanted to touch it. Berkshire Hathaway announced it has bought back $1.2 billion worth of its own stock and shares were

up this week on the news. Joe, we've talked in the recent past about Warren Buffett and his elephant gun and how he wanted to go out and use it. And it looks like he's turned it on himself. What do you think of this? Well, it's not a huge buyback in Berkshire terms. It's only about half a percentage point of the market cap. But I think the real story is that he raised the price of which he'd be willing to buyback Berkshire shares from a 10% premium to book value to a 20%.

That's about where the stock is selling today. And honestly, I think Berkshire's a great buy here. I mean, basically, there's very little downside risk because, is the stock isn't likely to fall below the price that Buffett's willing to buy back at and has bought back at. And you have the upside of both growth and book value per share and some sort of mean reversion on the stock kind of coasting up to a price that better reflects what I think is Berkshire's long-term earnings power. And so, you know, it's a nice little mix. It's hard to go wrong owning Berkshire at this price.

Ron, I know that not every company or probably most companies don't have the balance sheet that Berkshire Hathaway does in terms of cash. But it seems like this basic framework that Buffett and the board of directors set up in terms of when they're going to buy back stock, basically placing it in that relatively tight range. That seems like a pretty successful blueprint that at least some other companies could follow, yes? Or do you think they're just going to continue to just do a scattershot approach and buy whenever they feel like that? Yeah, I think scattered shot. But from a shareholder perspective or an analyst perspective, It's great to see.

You know, Buffett forever has said book value is the best way to look at his company. And then to look at his stock based on a multiple of book value makes perfect sense. And for him to come out and say, listen, here's where we're buyers. Most companies don't do that. They're much more secretive. And that speaks to kind of the Buffett transparency and all the great things that we like about him. Joe, you still like the stock even with the bump up this week?

Yeah, absolutely. biggest hold-in by a factor of four or five. Okay, so a good week for you. So yes. What stocks were investors searching for in 2012? Google's list of the most searched for stocks is out, and a couple of the names on the list will surprise you. Stay right here.

You're listening to Motley Fool 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. Welcome back to Motley Fool Money, Chris Hill here in studio with Joe Maeger. Charlie Travers and Ron Gross. Guys, Costco's first quarter profit rose 30%. Same store sales up 7%.

It all looks good to me. Why is the stock down this week? Well, first, the 30% is a little misleading. That's the headline number. After you adjust for some one-time things that happened last year, it's actually 19%. So still pretty darn good. Not as good as 30. The membership numbers up 14% membership revenues.

Some analysts were looking for something a little bit more than that. So, you know, expectations game. But I think it's mostly about at $99, $98, wherever the stock is, it's kind of all the goodness is priced in there already. All the future growth, all the stores that are going to come in the future. Another reason why the stock has dropped recently, and this is actually important, is that they just paid out or about to pay out a $7 special dividend. So when they announced that they were going to do the dividend, the stock actually popped

up a bit, which doesn't really make sense, but it did. And then when the ex-dividend date came, the stock actually actually. backed off by somewhere like $5, $6, $7 a share. So that was one major reason why the stock is down over the last several days. Two questions I want to follow up on. One is the same store sales numbers. Up 7%. For a company that's been around as long as Costco, that seems like a really strong number, or is that just merely good and not exceptional? No, I think it is really good. They're so focused on that value proposition they offer.

And quite frankly, it's not only because they're great people. It's because they want you to renew. and continue to pay that annual membership fee, which represents about 80% of their operating profit. But, you know, it's a great place to shop, and the value proposition is there. Last thing, when you look at the locations they have about 450 in the United States, we talked recently about Starbucks and their somewhat aggressive move towards opening literally thousands of more locations. Is there an opportunity there for Costco? Not necessarily to double their store count, but it seems like they could be a little bit less conservative with that? Yeah, they have a goal of a thousand stores up from about 620 now.

Is that worldwide or U.S.? Worldwide? Okay. So, you know, they have 32 in Mexico now. They have a presence in Japan and Taiwan and Korea, only a few stores in Australia. So there is plenty of expansion potential, but not for an actual doubling, but maybe another 400 or so. Diageo produces and distributes some of the biggest and best-known brands in the beverage industry, including Johnny Walker Scotch, Smirnoff vodka. But the company has walked away from negotiations to continue distributing Jose Cuervo Tequila. And Joe, when you consider that in the last fiscal year, that did it close to 500 million in sales. I don't know. Is this a smart move by Diageo?

Or are they walking away from money on the table? It is if they walked away at the right price. And these guys have bit aggressively in the past. So I'm assuming the ask was very, very expensive for them to walk away because it leaves a hole in their lineup. They don't really have a strong tequila presence. Now, the big win here is for just. Jim Beam, which does have a good tequila presence with Saza, and just kind of bolsters this case that eventually Diageo is going to acquire Beam, because Beam also has a couple great bourbon brands, which I think we're following with. Obviously Jim Beam, but Maker's Mark as well, which is a huge brand. And, you know, all three of those would fit very nicely into Diageo,

fill gaps in their product lineup and be able to help Diageo, you know, with its superior scale and reach, kind of lever those brands up a little bit. When you look at how Diageo has, in the past, attempted to buy Jose Cuervo outright, you've got some people, some analysts saying, look, this is really just the latest tactic in their move, that they're still going to pursue that. Do you think that's the case, or do you think that they're walking away, and now they only have eyes for Beam and it's Cuervo or its tequila lineup? I would believe it's tactical.

I mean, they're obviously smart guys, and they want to play a hardball, and I've seen these guys at analysts days, and they definitely mean business. This is not a cuddly group of managers. So they're going to do any tactic they can to get a good price. The stock is trading near an all-time high. What do you think of it? It's pretty expensive. I mean, it's a wonderful business, but they got a lot of debt on there, and I'd hold out for a better price.

This week, Google published its annual zeitgeist report of the top trending and most search queries in 2012. That include the top 10 most Googled stocks of the year. Charlie, not a big surprise when you look at the top few stocks, Facebook, Zinga, Yelp, Samsung. on number five was arena pharmaceuticals. I guess my first question is, what in the world is arena pharmaceuticals? I've never even heard of this. Sure, Chris. And every year, one of the hundreds of biotechs developing a drug actually gets one out through FDA approval and hits a home run.

And what Arena did is they got the first weight loss drug approved by the FDA in 13 years with Belvic. It's to be used in a combination with restricted calorie diet and exercise. There's some body mass index limitations as well, so the FDA was being pretty strict with it, but they did put it on the market. And as a result, their stock is up almost 400% this year. That tends to capture the attention of people who want some high-flying growth companies. And Arena was the stock for that this year. Rounding out the top 10, Kodak, Google, electronic arts, vivis, and super value. Am I the only one surprised that Apple isn't on this list?

Yeah, it is surprising. With the new gadgets? Maybe the gadget names themselves are big, but not the name Apple itself. It could just be that Apple was so blasted in our face in that lines already that you don't need to look it up. All right. Let's wrap up with the stocks that are on our radar. We will bring in our man, Steve Brodo, in from the other side of the glass with a question,

just to keep you honest. And frankly, and I'm looking straight at you, Ron, frankly, to see if you've actually done your homework. So, Ron Gross, what is your stock? I have a history with this company back in my investment banking days. It's Comtech Telecommunications, CMT. S. Small cap company, they make communication systems and satellites. Largely for the government, about 50% of sales come from the U.S. government, which is both

good and bad. But it looks real cheap here at four times EBITDA. I think it's worth a look. Steve, question for Ron? How easy is it to launch a satellite? It is both very difficult and very expensive, as even a non-military application, like a serious satellite will tell you. You've got to have the balance sheet to do something like that. Is there a limitation to the number of satellites? It seems like we probably have quite a few up there. I don't know the exact answer to that, but I would imagine if it gets kind of crowded out there,

they could start bumping into each other. And what's the regulation there? Like, if I'm just some eccentric billionaire and I just decide in my backyard, I'm going to build and launch one of these things, can I just do that? Now I'm a legal expert. You're an expert on space. No, it just seems like the type of thing that you would need some sort of governmental approval on. I think that puts things into asynchronous orbit must require a sign-off from someone. Like a $50 permit.

Yeah, it's not the right, but. Charlie Travis, your stock? I'm very bullish on Burger King, Chris. They recently went back public this year, spending a lot of money to reimage their stores. They've changed up their menu to make it more appealing. They've changed the marketing to get rid of the King and get a broader appeal. I think we're all in favor of that. Yes, yes.

And they have some significant international expansion ahead of them. They only have 12,000. stores now compared to over 30,000 worldwide for McDonald's. The stock is at 17. I think it could be worth at least $25. Steve, question about Burger King? Minus McDonald's, if it could knock out one of its competitors, who would it be? I think they'd take out Wendy's. Joe? McDonald's, actually. Yeah, I agree with everything Charlie said about Burger King.

What, McDonald's is your stock? Yeah, it is. Total coincidence. I agree that Burger King has a lot going for it. The way that I actually backed into McDonald's was because I was looking so hard at Burger King. But at every turn, I just kept coming around to the idea that McDonald's had some structural advantages in terms of the locations of their stores, just general higher sales and marketing budgets, distribution. But they don't have sweet potato fries. They don't, but I'm sure they could innovate around that. Isn't that really what's most important? They do have sweet tea. They do. And I like Burger King, too. What I like about McDonald's is the stock, I think Burger King's valuation reflects a lot of that

turnaround potential. I don't think that's the case with McDonald's. You know, last month or two months ago, they had their first drop in same store sales in about a decade and everyone got up in arms about it. I didn't think it was as big a deal as everyone thought it was. And this past month, they turned around. Lo and behold, it's still a growing company and then it's a nice price and it's an excellent franchise. Steve, question about McDonald's? Buy seller hold the shamrock shake. I'm not really familiar with that, but I'll buy it. You know what? I'm going to sell it because I have personal experience because back in the day when I was a kid, I loved the, you know, the limited edition mint shamrock shake.

And here's what they did, Steve. They up and changed it. They tried to innovate, just like the Girl Scouts try to innovate with cookies every year. They changed the recipe of the Shamrock shake. I had one. It was terrible. So I'm a cell. I'm just a strong sell.

He's always looked gross to me. Hey. They used to be awesome. Watch it. Cutting a little close with Ron over there. All right. Joe Mager, Charlie Travers, Ron Gross. Guys, thanks for being here.

Thank you. Up next, Carl Kintanilla from CNBC with a look back at 2012 and a preview of what investors should be watching for in 2013. Stay right here. You're listening to Motley Fool Money. The day it started rain. Millionaires on Wall Street. Welcome back to Motley Fool Money.

I'm Chris Hill. When investors want to see what's happening on Wall Street during the day, they turn on CNBC. Carl Cantania has a front row seat for those proceedings since he is the key. co-anchor of CNBC's Squawk on the Street, which broadcasts live from the New York Stock Exchange, and he joins me now. Carl, good to talk to you. Thanks for being here. Chris, after getting the phone call from you, Christmas is now complete. It's a pleasure. Pleasure to be here. Oh, you know, sucking up to the host is always, always a good move. I want to get your thoughts on sort of the year that we are just about to complete and look ahead to 2013, but I have to start with the fiscal cliff.

which anyone who turns on CNBC knows is just this ongoing issue that we're facing in the country. As of this taping, there is not a deal in place. I'm curious since this is something that you and your colleagues at CNBC are focused on every single day. I'm curious when you look at this issue, it seems like the broad headlines are cast in sort of the extremes. like either there is progress in the talks or they're moving farther apart. Obama's on one side, Bainers on the other. What do you think is sort of buried underneath that that is not really getting as much attention as perhaps it deserves? I think, you know, it's interesting.

Somebody the other day said that the market itself, right, just the stock market, is like those dialometer focus groups they have on debate night, you know, where, or somebody's talking and you turn the dial left if you approve, left if you don't approve. That's sort of what the market was supposed to be, I think, the sort of response mechanism to progress in D.C. As it turns out, markets obviously have not, as of this taping, as you said, reacted violently or negatively to what appears to be a very slow progress. So I think it's a lack of pressure on lawmakers. We know rates, interest rates are low. Again, lack of pressure to do anything quick. And from the White House's perspective, I just don't see how anything works against them.

If we go off the cliff, Republicans will be accused of, as David Brooks said, this past week, sacrificing Sam's Club to benefit the country club. and they may come crawling back to get the rates somewhere closer to where they were to begin with. So I think there's more of a lack of progress than probably people anticipate. And a lot of us, despite this rise above campaign we've had at CNBC, did not expect us to get anything done by the end of the month. Obviously, the fiscal cliff is the big focus, and rightfully so right now. But as we wrap up the year, it's natural to sort of look back over the year that we're just about

to complete. And I'm curious, covering all the stories that you've covered, what stands out to you, apart from the fiscal cliff, what stands out to you as sort of the major business stories of 2012? Is it the Facebook IPO? Is it something else? No, I mean, we're talking non-political, right? Something outside of government. You know, it's funny you mentioned Facebook. I think that's it. I remember giving a speech in the springtime prior to the IPO. And it was basically about how this is sort of a make-or-break moment in terms of getting retail participation back into the market,

mom and pop interested again, making stocks a palatable choice for households in this country in terms of savings and retirement. And the day of the IPO, I flew out to California. We were live at Facebook headquarters. the moment the opening bell rang, and there's Mark Zuckerberg, and Bob Greifeld of NASDAQ, and it's a party, and within the course of, must have been, what, 90 minutes or so, the whole thing fell apart. And whether that was an accident, human error, a computer glitch, it took on a life of its own, it snowballed, and all summer long, and until today, I think, it has dampened enthusiasm for capital markets in this,

country. It was a blow. It was a blow. I feel bad for people who work at Facebook. I mean, it wasn't priced perfectly, but it didn't have to happen this way. And I think if it had gone a different way, we might be saying something different about investment in this country. But those, then's the brakes. I hadn't really thought of it in those terms, the way you put it in your speech back in the spring, in terms of it being a make or break moment for retail investors. But I do remember talking here at the Motley Fool with people, we were talking about Facebook being sort of that water cooler investment that, you know, one of the guys here who works with a personal trainer, he said, you know, my personal trainer never asks me about investing or anything like that,

and he's asking me about this stock. And we were trying to think of the last time that happened. And all we could come up with was Google, which was, you know, what was that, seven, eight years previously. And so when you put it that way, it sort of seems like, wow, it's so. So if it's once every decade that you have this opportunity, that does sort of seem like a blown opportunity. Yeah. Now, that said, I'm looking at a web page right now of business news. Apple, I'm counting the number of times Apple is on this screen. It's at least four.

So we do have that. And they are a competitive force, and there's a chance they could really make an impact around the world, the way they have in this country. So all is not lost. But I think in terms of this year, event-driven memories, Facebook is it. And I really think it set the tone to a large degree for the second half of 2012. You're listening to Motley Full Money talking with Carl Kintania from CNBC. You mentioned Apple. It was a year ago that one of the big questions facing Apple was how the company was going to fare in the post-Steeval.

Jobs era, and I think over the past year, CEO Tim Cook has answered that question. I don't think there's anyone who's asking that question. With that in mind, when you look at Apple, what do you think is the big question facing them now? Is it the next innovation they can come out with? It is, can they continue the amazing run the stock has had? What do you think? Well, there's two questions. One is, right now they're literally number six in terms of smartphone adoption. Chinese consumers don't spend the way we do on their smartphones, and Apple tends not to have a lot of low-priced options, low-priced products.

So that'll be key. And then, of course, it's television, whether or not they, and there are new reports this week about prototypes of a high-resolution set. What they need is a breakthrough product, which, you know, God love the iPhone, but it has been a derivative of the previous iPhone for a few years now. And I think the lack of anything that is truly groundbreaking is why the stock is corrected so much from 705. Now, I think they're going to put up, they won't shut up in 2013. I mean, they will deliver some goods. but it's going to have to be pretty darn impressive to wash out a lot of the skepticism that's crept into the stock over the past few months.

In terms of 2013, what else are you watching, whether it's specific companies or industries, it seems like a lot of people are looking rightfully so at housing because you have all these different trends, not just companies reporting earnings and that sort of thing, but it seems like all of the trends are pointing towards 2013 being a pretty strong year for housing. Yeah, you know, we need to get past some critical levels on the household and housing starts, which in turn is all going to depend on how willing banks are to lend to first-time buyers, right? That's the key. You've got to get mortgages available to first-time buyers. That trend's been getting better slowly over time. Of course, it could always be

thrown a curveball, for instance, if as part of the fiscal Plyth Agreement, they limit the deduction on a mortgage interest, which some say could be somewhere between catastrophic and marginally bad for the housing industry. Housing will be good. I think, I mean, because we cover the market so much just as an investment vehicle, there's a lot of discussion that the first half, no matter what happens with the Plyth, is going to be just weird, choppy, tricky. and even some of the very optimistic, bullish analysts who have targets for next year, 1580 on the S&P, I mean, pretty nice gains, say that the middle of the year is probably going to be sub-1,400, because they just don't trust either that a deal will get done, or B, if a deal does get done,

it's going to involve some form of austerity that will be dampening on the economy. in the first half. So I think our challenge for 2013 is getting through the first six months. If that happens, you know, I think the second half could be a little more of a breather. Coming up more with Carl Kintanilla, including a round of buy-seller hold. This is Motley Full Money. Welcome back to Motley Full Money, Chris Hale talking with Carl Kentonia of CNBC. before we wrap up with a round of buy-seller hold. Two other topics I wanted to hit on. We talked a little bit about cable companies and that sort of thing.

I'm curious as someone who makes us living in the media, when you look at the print media industry, you see newspapers struggling or just shutting down altogether. We've seen 25 consecutive quarters of ad revenue declining. And this weekend, the day, daily, which was the app-only digital newspaper, it's being shut down this weekend. It seems like, we were talking about trends, it seems like every trend is working against print media companies.

And I'm wondering if we are really just two or three years away from newspapers just going away for good. What do you think? The physical newspaper is becoming a novelty. There's no doubt about it. Now, that said, I go into the office. And the first thing I see on my desk is a stack of about six newspapers, which I then read as I'm logging onto Twitter, right,

as I'm logging on to Business Insider, Motley Fool, Market Watch, you name it. But it's going to be a second banana, right? A sort of a derivative player. I think the daily is sad in a way because there were a lot of young people, I happen know some, who worked for. it, who felt it was the beginning of a new chapter in online media, right? And because it was killed before they ever pivoted, I think News Corp, they never really changed the strategy. They plowed ahead. It didn't work. They reached a certain point and said, we're done. If it had been a

smaller company running it, they might have tried a different tack or two before they finally pulled the plug. Well, that's what's surprising is the fact that it was not this little startup, up, this, you know, trying this new inventive thing, there was a mothership. This was something that was attached to a mothership with presumably deep pockets, and they still couldn't make it work, but maybe that was the thing that worked against them. Yeah. I mean, I was talking to somebody today about this website business insider, which has done pretty well. They had not spent a lot of money. Compare that to what portfolio did a few years ago, which I believe was Condé Nast, which spent a fortune before finally getting out. So, I mean, being nimble these days is not a luxury. It is a

necessity. And News Corp for all of its strengths is not that. And that's one reason the daily maybe was never really destined to succeed. Well, I remember years ago talking with friends of mine who worked at the Washington Post. And this is, you know, maybe five, six, seven years ago when things are really starting to look bad for the newspaper industry. And their attitude was, oh, no, we're fine because we've got Kaplan, which was also part of the Washington Post Company, the Educational Services Company. They're like, oh, no, we're fine because we're still making all this money off of Kaplan. So our newspaper is in great shape. And that's when I kind of wanted to say, no, no, you're not in great shape. If you were on your own, you'd be sinking. You mentioned

Twitter. You're on Twitter. And now Pope Benedict XVIth is on Twitter. We were talking about this earlier today in my office. What do you make of this? Because on the one hand, personally, I look at it as, well, this is great. Sure. Why shouldn't the Pope be on Twitter? And on the other hand, it sort of has the feel of, oh, my parents just joined Facebook, and therefore Facebook is no longer cool. Like, I don't know. When you see something like the Pope being on Twitter, what do you think? Right. My father joined the Holy Father, but my father, you're right. I I mean, I think in the Facebook sense, and this message is my own prejudices, having your parents joined Facebook, it was embarrassing. Having the Pontiff joined Twitter, I think, is a statement of its incredible power as an unfiltered tool to communicate back and forth.

It's so it's clean. There's very little ornamentation to it. It's just 140 characters. Now, has he tweeted once, once, twice? With a million followers? Yeah, exactly. So, I mean, we'll see. Some make better use of it than others.

But I think, I just happen to think that Twitter's in a different league than Facebook. And I do think that over time that's going to be borne out. This time last year, many people were looking at Facebook being the IPO of 2020. from where you sit right now, is Twitter the IPO of 2013? Is it another company? Or did the experience that Facebook had earlier this year scare a lot of people off into remaining as a private company? Yeah, I'm going out on a limb here.

I don't think Twitter goes public at least anytime soon. And in general, I think the window in which a startup would go public has been elongated by Facebook. by Groupon, by any other raft of social media names that went public too soon. And once they became public like a Groupon and got challenged, there was very little patience for the long term. So I think companies will be slower to go public, probably slower to get capital, because people have seen some of these early mistakes and will be very cautious. So I think Twitter remains private.

If I had to make an outlier guess, I'd say some company with a lot of money, like Apple, maybe buys them for an obscene amount of money. You heard it here first. All right, let's wrap up with a round of buy, sell, or hold. This week, the governor of your home state of Colorado signed marijuana legalization into law. So buy seller hold the business of marijuana. as a graduate of the University of Colorado at Boulder, and I'm not making any kind of statement on that, I think the business is a buy, is screaming by. Earlier this week, FedEx had its busiest shipping day of the year, an estimated 19 million packages, so I have to believe that a lot of this product was used. Buy-seller Hold, Bubble Wrap.

I'm a hold on bubble wrap. I tweeted this week that the technology has changed, over the years. My girls try to stomp on it when the holiday packaging arrives, and the darn things don't pop. What? That's no fun. Believe me, it helps with a headache at home, that's for sure. When I asked you about this last spring, you were a hold, but now that your Denver Broncos have won eight games in a row, I'm thinking you might change your tune. Buy-Seller Hold, Peyton Manning. Peyton Manning, the toughest human being on planet Earth. A year ago, he could barely throw a spiral. Today, he's, I think, destined for the Super Bowl,

and if we're lucky, it's a Manning-Manning Super Bowl. Archie could have a very, very nice January. And finally, he is not as popular with the kids as he used to be, but next month he is performing on Broadway, by Seller-Hold, Barry Manilow. my first album when I was 10 was Barry Manilow's greatest hits oh my I will I've never seen him live but I if I could I would I would probably go uh go Barry I'm I'm definitely buying long long options on Barryman so the fact that one of his most popular tunes is I write the songs the fact that he did actually not write that song that doesn't bother you that doesn't that doesn't put you off I'm gonna look past that Chris That's why you're much bigger person than I am. You can catch him on Squawk on the Street every weekday morning on CNBC, Carl Cantonea.

Thanks a lot. That's it for this edition of Motley Fool Money. Next week, it's our wrap-up of 2012 and our look-ahead to 2013, and we want your input. Drop us an email, Radio at Fool.com. That's Radio at Fool.com. Send us your nominees for the CEO of 2012, the company of 2012. any sort of best and worst of 2012. And also your questions for 2013 and your predictions.

We will be making reckless predictions about 2013, so we want yours as well. Drop us an email, Radio at Fool.com. During the week, you can check out Market Foolery, our daily podcast. It's available on iTunes, on Tune In. I think it's still even available on the Zoom. So check it out. Market Foolery, it's our daily take on what's happening in the market. Our engineer is Steve Brodo. Our producer is Mac Greer.

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