Motley Fool Money - Motley Fool Money: 12.20.2013

Episode Date: December 20, 2013

The Dow hits a record high as strong 3rd-quarter GDP numbers surprised Wall Street.  Nike & FedEx deliver mixed earnings.  Chipotle gets into the pizza business.  Plus columnist Morgan Housel shares his outlook for 2014. Learn more about your ad choices. Visit megaphone.fm/adchoices

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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 a million dollar portfolio, Charlie Travers, and Ron Gross. Good to see you, Jens. How you doing? We have got the latest headlines from the business of sports, pizza, and robots.

Gosh, we should just do that every week. lineup right there. Our man, Morgan Housel, will share his thoughts on 2013 and what he's watching in 2014. And as always, we will share a few stocks that you can put on your watch list. But we begin this week with the big macro. Third quarter GDP grew more than 4 percent, Ron. It was the fastest rate in nearly two years. And, of course, on Wednesday, Ben Bernanke announced that finally the Federal Reserve is going to start tapering. They're going to pair back the bond buying program. It's not going to be $85 billion a month anymore. No, no, no.

It's a pittance. Now it's just $75 billion. Well, well, well, what do we have here? Could we have a smooth takeoff in the making, which is the opposite of a soft landing? I coined that. But then I Googled it, it seems I haven't coined it. But listen, pulling back on the stimulus, just as we see a takeoff in GDP, an estimate of unemployment to be 6.3 to 6.6 percent next year.

If they engineered this to be just perfect, that would be wonderful. A Christmas miracle, Ron. It really would be a Christmas miracle. And, you know, we saw it in the stock market when we actually had a rally when they announced the taper. I would have been, if I was a betting man, I would have lost a bundle there because I would have expected the market to sell off. I think there was a sigh of relief.

I think it was, they were happy. It's measured. It's gradual. And the economic numbers look strong. Yeah. Jason, you and I were emailing on Wednesday afternoon. I was out of the office. Couldn't get the information.

I said, is the market tanking? You said, no, it's tanking in the other direction. Yeah, I mean, it was interesting to see. I mean, because right when that announcement came out, the market initially did tank, but then it reversed course very quickly. And I think there are a few reasons why the market's reacting so positively to this. I mean, number one, it is good news that they're able to start ratcheting this program back. That means that the economy is healthier, maybe than some thought going into the announcement.

But, you know, they are going to maintain low interest rates here for the foreseeable future. Short-term interest rates are going to stay down probably through 2014, well into 2015. So that means, again, like we've been harping on for the past year, essentially, is the stock market really is the place to be. That's where you're going to find your returns. But then the question was also asked of Bernanke in the press conference after in regard to Janet Yellen. Did he consult her at all in regard to this decision?

he was very clear and that not only had he spoken with her in regard to this decision, but that he's consulted with her all the way through here. And so there's going to be a consistency when he hands the reins over to her in January as we assume she will be confirmed. I think that's a reasonable assumption. Oh, is he timing his exit perfectly. He's like, everything is perfect as I'm leaving. Now it's up to you.

There is a nice certainty here that is making, I think, everybody feel really good, as opposed to having a festivist airing of all the grievances. Now we can be happy and smile about a nice holiday season. To Ron's point, Charlie, I was going to say, Ben Bernanke is dropping the mic and walking off the stage at the perfect time. His critics have certainly gotten awful quiet lately. I mean, it is maybe two, three years ago. He could do absolutely nothing right. You know, things have certainly changed for the better.

Employment is looking good. I think we're all grateful for that. The stock market's doing wonderful. So I think 2014 is looking a lot better than I think we may have feared it was a while back. Over Black Friday weekend, Target was hit with a massive information breach. As many as 40 million credit and debit card accounts may have been affected. And Jason, when I say Black Friday weekend, what I really mean is from November 27th to December 15th.

That's like a month, Chris. What is going on at Target? Anybody in here potentially have their information? I was at Target in that time frame. They have now, actually. I have to believe I made it there at least once. You know, it is a headline, certainly. Forty million is obviously a very big number. But it's also, I mean, this is one of these things that just, it's an inherent risk in the

way our finance system works today. I mean, banks are working through electronic transactions now. And so whether it's a card or whether it's an app or whether you're paying cash, I mean, that's going to kind of determine your risk level there. But at the end of the day, this isn't something that really puts consumers at risk, per se, because banks are not going to hold us liable for fraudulent transactions on our cards. It certainly makes the bank's job, jobs more difficult. I mean, they have to keep up with this stuff, and fraud is doing nothing but growing.

And then for Target, I think really the biggest risk for them is just not responding to this correctly, not communicating with the consumers. They've done a decent job in getting the word out on websites and social media sites and whatnot. But I was a little bit surprised to see that they actually found out about this on Sunday. We didn't really get word of this. It wasn't a headline until Wednesday. And even then, it didn't seem like it was with their own volition.

So I have to wonder if they couldn't have done this a little bit better. From an industry-wide perspective, I think obviously we're going to see more and more and more of these kinds of breaches. So I wonder if it signals kind of an end to the magnetic strip type of credit card, debit card, and we're going to move to more chip-based credit cards. Those aren't infallible either, but I believe they're more secure. So I think we're going to start to see that whole industry. industry changed the type of technology they use.

Bitcoin? We're just going to move to all Bitcoin. Is that it? Going back to cash. Shares of Nike are up more than 50% so far in 2013. But they were down on Friday after Nike's latest earnings report. Charlie, second quarter profit up 40%. Sales in US and Europe, looking pretty strong.

I don't know. It's looking pretty good. I thought it was a pretty good quarter, Chris. The revenue was up 9%. making a lot of investments all across their business, everything from better performing shirts and shoes into their e-commerce platform to digital. And there's a couple big events people might have heard of on the horizon, the Winter Olympics, the Super Bowl, and the World Cup. So Nike said their outlook is strong with orders going into next year up 12 percent. That's higher than their

forecast growth rate of high single digits. All in all, I thought it was a good quarter and a good Outlook out of Nike. Maybe it's just pulling back because the stock was so strong this year. The events are definitely an opportunity, but there's an opportunity to cost, right? They're going to be spending more on advertising and marketing in 2014 as a result. Oh, they're hammering the marketing spent going into these events. Maybe that brand name will catch on finally. Yeah. Second quarter profits for FedEx rose 14 percent, and the company raised guidance for the full fiscal year. Once again, Ron, good quarter. Always like to see the raise in guidance. The stock

didn't really pop on this. Analysts were expecting a little bit better numbers. I'm not sure why, because they should have realized that Cyber Monday fell into a different quarter this year than it did last year. It just surprises me sometimes that people don't account for that when they're doing their estimates. But I think it looked good. I think the surprising thing was the Express business was up real strong, 42 percent increase

in operating income. That's been the struggling part as competition has really moved in overseas. But they're undergoing a massive restructuring. They were able to raise prices in Express. which is surprising to bring back up to 10% of their shares. At the same time, they're cutting costs. So I think things look pretty good going forward. Is this a pricey stock, or is this pretty fairly valued? On the face of it, it looks pricey. But if you project 10% lower shares outstanding and lower

costs in the future, then it starts to look more reasonable. That sounds like a lot of math you're asking me to do. Coming up, more proof that we are getting closer and closer to the rise of the machines. Right here. This is 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 or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Charlie Travers and Ron Gross. Guys, it has been a good year for the movie industry, and it's been a good year for IPOs.

And Jason, I'm guessing that's at least part of the reason AMC Entertainment went public this week. You like movies. You want to own this stock? I love movies, Chris. No, I don't want to own the stock, actually. I think that, I mean, it was an interesting IPO. I think, if anything, the reaction from the market on the first day of trading is one that says, well, at least the underwriting bank got the pricing about right, because it didn't pull a noodles in a company doubling it. This was not a maniac 40% pop on the opening day. Right. Or a sprouts up 140% or something like that. Anyway, I think that when you look

at one of its competitors in the space, Regal Cinema, for example, it's not the most inspiring revenue growth story here. I mean, Regal over the past five years has grown their revenue 8 percent. That's not 8 percent annualized, but it's just 8 percent from point A to point B. And it's a high maintenance sort of business. There's a lot of upkeep there in the theaters, and it's a service industry to a degree because you have to really offer some compelling reasons for people to want to come into the theater nowadays with all the different options we have for watching movies. And then I think the one thing that people need to really realize is there's a Chinese holding company called Dalliam Wanda that owns...

You made that up. Possibly. Possibly. Google it. But they own actually 80% of the company still. I mean, after this IPO, so when you invest in AMC, you're investing in this Wanda group that may not be a bad thing. I mean, they have about $48 billion in our assets, and they do this type of work.

I mean, the man who heads that up is trying to bring, you know, a big. more movie screens to China, turn China in, really, that next sort of Hollywood movie destination. So that's not a bad thing, but for individual investors like us, it probably won't translate into the best return story. It also seems like if you're looking at either Regal or EMC, if you're betting on the stock, you're also, in some small way, making a bet on more 3D movies. Because more and more these movie theaters are getting their money or getting the increase in revenue from more 3D screens.

$17 a pop to go see the Hunger Games movie in 3D. Unbelievable. And I don't know that it's all that compelling. I remember when we went and saw Spider-Man here, you know, that day we went from work here. And it was Spider-Man in 3-D. And, I mean, that was okay, I guess. But really, I could have been just as happy in non-3-D. So I don't know that 3-D is the most compelling option out there for all of those movies that are being released.

This week, we learned that Google has bought Boston Dynamics, a company that makes animal-like robots for the military, including a robotic cheetah that can outrun humans. Charlie, it's the eighth robotic company that Google has bought in the last six months. What do you think they're doing over there? I think we're going to see Sergei Bryn in an Ironman suit next year. He's Tony Stark. I have no idea what they're doing. This Boston Dynamics company they just bought makes mobile research robots for the Pentagon, including a four-legged robot that can run faster than Usain Bolt. Google said they're not going to be a defense contractor. I take them at their word on that, but I can't say what they're doing. You know, the companies they bought, brought technologies like robotic arms, grasping technology,

some sensors. I think that's probably where they're going, but what the end game is, you know, they're dabbling in driverless cars and Google Glass. I don't know what they're trying to make. Probably come out in a couple of years, I'd imagine, but they did say it's a moonshot for them. Ron, if you believe, as I do, that We're just going to see more and more robots. Right. What's the best way to profit from the robots as an investor before, obviously, they become our overlords? Well, of course, you buy Google, Chris.

Google is a million-dollar portfolio holding. We like the stock a lot. I'm not sure that's the best way to play. I like to play maybe one of these companies that's going to be acquired. But that also is kind of more of a short-term gain than getting in on the ground floor for the long-term. I honestly wouldn't know where to begin here. It's such a new industry. It could go anywhere. It's anybody's bet. Shares of Blackberry up more than 15 percent this week after third quarter results. Help

me with the math, Ron. They lost $4.5 billion in the quarter. Revenue down 24 percent. How is the stock up on this news? Well, here's the thing. If you exclude asset impairment charges and inventory write downs, they only lost $354 million. Oh, well. So, you know, not that bad. But there's some comments. They kind of, you know, the device business, the hardware business, I think we can firmly say that's not going anywhere. I think they're hoping to maybe just turn it into a break-even business.

They're focusing on their software business, their service business, which actually is okay. They're hoping that will be the business that is profitable. You know, what's interesting, even we make fun, but they did have over a billion dollars in revenue this quarter. It's still a company that is actually selling products, selling services. They just entered into a five-year partnership with Foxcon. They're going to create a handset for Indonesia and other emerging markets. They are doing things. I wouldn't touch it with the 10-foot pole. I think it's just kind of the walking wounded, and they're on their way down,

but it isn't over yet. Jason, that's why I'm confused, because you have the CEO of Blackberry coming out and saying, no, no, we're going to focus more on the software and the services. And, oh, by the way, we just signed a five-year deal so we could make a smartphone. Well, yeah, and I mean, I was playing golf with a buddy amount a few weeks ago. and he works for Travelers Insurance, and they're still on BlackBerry. I was kind of surprised about that, because Travelers, I mean, as you know, is a huge insurance company with employees probably 30,000, 35,000 people or something.

But I asked him, I said, you know, how are you guys still on BlackBerry? Why aren't you on iPhones? He said, well, we are in the last innings of really getting that integrated in. So it was, again, it was another sign to me that even while there are some entities that they're still using BlackBerry, I think that it's just sort of that slow fade out. I don't know that there's really all that much of a compelling reason to invest in it or use the product myself. The stock might have gone up because the interim CEO, John Chen, said, we've got

a good shot of turning a profit in 2016. And to that, an analyst said, good luck with that. And I agree. Good luck with that. I mean, you think about how this worm is turned. I mean, it wasn't that long ago that Blackberry was on top of the world. It had over 40 percent of the market. Yeah, they were looking at this company.

company is just changing the way we do things and how quickly it just has fallen from race. It's amazing. You just reminded me this week, Walt Mossberg, probably the leading technology columnist of the last 20 years, wrote his last column for the Wall Street Journal. And he looked back at 12 products over the time that he had been writing his column. And one of my takeaways in looking at that was, oh, right, here's the Palm Pilot, which once upon a time was an amazing product, and now the company is gone. And here's Netscape. All right. Once upon a time, that was the browser. Polaroid's back, though. His number one was the Newton, I saw. Like, that you never

even took off. But, again, for its time, it was probably pretty earth-shattering. We're going to bring in our man behind the glass, Steve Brodo, for our final story. But before we get to our final story, also on the other side of the glass, we got some special guest this week. We do. Ruta and his wife, Megan, are here. Joe is a longtime listener and a member of our Stock Advisor Service, the Million Dollar Portfolio Service. I think after we tape the show, we will have the airing of the grievances, so he can tell you, Ron, everything.

He seems relatively happy. Everything he's dissatisfied with about the way you run the service. Thank you guys for coming in. But thank you so much for coming in. Really appreciate it. This week, Chipotle announced it is getting into the pizza business. Its first location is It's called Pizzeria Locale in Denver. Stephen Ells, the co-CEO-CEO, did stress, Jason, that Chipotle's growth is going to continue to be driven by the Chipotle brand. They got a minority stake in this one pizza place, but I would bet every dime I have that within

short order, they're going to be the majority owner of this pizza company, and this is the long-term plan to roll out pizza across the country. Yeah, I mean, first and foremost, let's just be clear. I started last night the proposal for our research trip next year to Colorado. So remind me after the taping here to make sure and finish that up and submit it so that we can get on out there and do that market research. Yeah, I mean, I'm a Chipotle shareholder, too, a very big fan of the food offerings. Love Chipotle, love Shop House.

And this to me was just an interesting sort of, this popped up. I don't know that anybody really was expecting something like this because they haven't really rolled out that shop house yet. But they have reconciled that concept. So now it's just rolling it out. And this was one of those sort of serendipitous things where Ells walked into this restaurant and said, hey, wow, you know, what if? And he got buy-in from the co-founders and now we're here where we are today.

And to your point there, I don't see how they roll out anything that sucks. I mean, I think if it's not good, they're not going to go forward. I got to say, as a snobby New York pizza guy, conveyor belt pizza doesn't really do it for me. However, pizza is even in my bio if you go to full.com. So I'll eat any pizza, but it's just better. You can come on the research trip with you. Let me ask you this now. As a big pizza guy, you appreciate the lovely taste of the Neapolitan pizza.

I do. A quickly cooked Neapolitan pizza is absolutely delicious. And that's what this is. It's just one style of pizza. Steve, we've got about 20 seconds. Do you have a go-to pizza? Timstone. Pepperoni?

your cheese. I don't use the pepperies to die for. Drop us an email. Radio at Fool.com is our email address. We're in with your favorite pizza. Guys, we'll see you a little bit later in the show. Coming up, our man Morgan Housel helps us wrap up the year. This is Motley Fool Money.

Welcome back to Motley Fool Money. I'm Chris Hill. The movie industry has the Academy Awards. In business journalism, it is the Gerald Loeb Awards. This year, one of the nominees for Best Financial Commentary Writing is going to help me wrap up 2013. Morgan Housel is a senior columnist here at The Motley Fool. He joins me in studio. Thanks for being here. Good to be here, Chris.

So we talked about the taper earlier in the show, but I want to get your take on it, because when you're writing for Fool.com, you focus on macroeconomic issues. Earlier in the week, this was a surprise for, I think, a lot of people. Certainly, if you look at the economists who are saying, there's no way they're going to taper. Right. So I generally don't pay attention to any. macroeconomic forecast from economists because the track record of them going back decades is just dismal. And this week was a perfect example of virtually every economist out there said no taper. We're pretty certain of that. No taper. And in the event that there would be a taper,

the stock market's finished because that's supposedly the only thing holding the stock market up. Well, on Wednesday, we did get a taper and the Dow went up 300 points. So it's just, to me, it was a perfect reminder of why I don't pay attention to these forecasts because you don't know what the Fed is going to do. And even if you did, you don't know how the market is going to react to it. So it's tempting to listen. When you're watching CNBC and Goldman Sachs senior economist comes on and he says, here's what the economy's going to do. Here's what the Fed's going to do. It's tempting to take that seriously. But the track record of these guys is something that you would not wish upon your worst enemy. I am curious what you think.

as we head into 2014, and I'll get to that in a little bit. But first, since we are talking about the Federal Reserve, Janet Yellen, getting ready to step into the corner office as Ben Bernanke drops the microphone and walks off stage, presumably, as you and I were talking about earlier today, if you could buy shares of Ben Bernanke's future income, that's the stock to buy because he's just going to make a ton of money-giving speeches. Yeah, Ben Bernanke, so one of the most powerful men probably in the entire world right now, whoever is Fed chairman. I believe his salary is $179,000 a year. Maybe $189. It's something like that. Not what you expect the most powerful man in finance

would earn. But as you and I were talking about earlier, when you leave that job, you're going to make millions upon business. He's going to make that in one speech. Probably more than that. He will make that walking up to the stage in one speech. Any thoughts on Janet Yellen as she prepares to assume the office? Well, I think it's interesting. If you look at the last several Fed chairman, Paul Volker, in the 70s and 80s was really despised. People looked at him at the time as a terrible Fed chairman who was ruining the economy. He's now looked at today as a man who valiantly saved the economy. Green Span during his tenure was beloved. He was the maestro who was making the economy boom.

Now he has looked back as the guy who was blowing bubbles. So I think it's very difficult to try to judge a Fed chairman or chairwoman because the history is we are views of these people really evolve over time. We're not going to know how to judge Bernanke for at least 10 years because that's really how long it takes for Fed policy to play out, 10, 15 years. And so I'm really hesitant to try to grade Yellen right now because I don't think we're going to know how Yellen did until 10 years after her tenure, which might be 20 years from now. So let's rebook at the end of this. You can call me back 20 years from now, and I'll tell you how I feel about you. All right, great. Book it.

You write for Fool.com, as I mentioned, but you've also started to do some interviewing. You recently sat down with Barry Rittholtz, who is someone that you and I both follow on Twitter. For those who don't know him, Rittholtz, regular columnist for Bloomberg, for the Washington Post, very entertaining, very smart writer. What did you take away from your interview with Ritholtz? So, Rittholds years ago, I think, was fairly pessimistic about stocks and the economy. A lot of people in that situation sort of get into their groove of optimism or pessimism, and they stay there pretty much forever.

So we call those people perma bears or perma bulls. But Barry has really come around, and he's pretty bullish, I think, on both the economy and the stock market. So one, I just think it's neat to see someone change their views like that and really be open and flexible on it. So he's pretty bullish on the stock market. he's bullish on the economy. So I asked him at the end of the interview, what keeps you up at night? You sound pretty bullish.

What are you worried about? And he gave an answer that I liked. He said he doesn't worry about anything that he can't control, such as what the Fed is going to do next, what the economy is going to do, what Congress is going to do next. Those things are completely out of his control.

So even though they very well may influence the economy and stock market, if they're out of your control, there's no reason to worry about it. So what he worries about is, the companies he invest in, his own psychology in terms of how he reacts and responds to market events, his own goals, his own career, those are the things that he worries about. And I think, you know, that might seem like an obvious answer, but I think a lot of people, if you ask them what worries them about the economy of stock market, they would say, oh, Congress,

oh, the Fed. Well, you can't do anything about that, so give it up. You're listening to Motley Fool Money talking with Morgan Housel senior columnist here at the Motley Fool. You wrote a column recently, which I loved because the headline of it borrowed from one of my favorite comedians, Louis C.K., everything is amazing, and nobody is happy, which is one of those YouTube clips that just went viral. He was talking about, among other things, the role that technology plays in our lives, but you took it in terms of investing in the economy. Well, I still feel like, you know, first to say that there are obviously a lot of people in America who are really hurting and in bad financial situations right now.

But be that as may, I think by any objective standard, the United States and the world economy is about as prosperous and safe and well off today as it has been ever throughout history. And, you know, it's hard to detach the fact that things, there can be injustices and bad things going on in the world, but still be as good as it's ever been right now. So in terms of seniors being able to retire, you know, as recently as 40 years ago, the majority of men over the age 65 worked until they died.

There was no such concept of retirement. You worked and then you died. Those were the two phases of your life. And now, and so we talk about the social security crisis, the retirement crisis that people aren't prepared for retirement. And it wasn't that long ago that retirement wasn't even on people's minds. It just didn't do it. You know, we talk about things like falling real incomes over the last 10 years. And yes, you know, the median American family earns less today than they did 12 years. years ago, adjusted for inflation. But that's largely a function of the bubbles that we've had over the past couple years. The average American family earns more today than they did in the mid-1990s when we felt as prosperous as we have ever been. And really important statistics like

childhood mortality, cancer survival rates, those have all done extremely well over the past 10, 20 years. So I think the media is always interested in short-term problems that get people's attention. But the long-term gains that play out slowly over time, I think, are easy to forget. But in the article, I just try to put things in a little more perspective. That, yes, things are bad for a lot of people, but we also have a lot of things going in our favor right now. You mentioned the word bubble, and it got me thinking about how, when you think about the noise that is out there, and there's plenty of noise out there. But some of that noise is about, boy, you look at the stock market up more than 25 percent in 2013.

and it sure does look a whole lot like 1999, 2000, some of these companies that have gone public, let's be honest, some of the, not all of them, but some of them, the valuations seem a bit absurd. Do you make those comparisons as well, or do you dismiss them? I think if you're comparing today to 1999, no, there's almost no comparison. I mean, what we dealt with in 1999 was magnitudes different than what we are now. And also in terms of a bubble, I think if your view of the stock market is

Facebook, LinkedIn, Tesla, Netflix. Those companies, sure, maybe to some people, it looks like it's going pretty crazy, but those aren't representative of the larger stock market that's 9,000 companies out there. And I think, yes, the market has done very well since 2009. It also did extremely poorly before that. So you can say, you know, since 2009,

the S&P 500 is up 170%. Since 2007 adjusted for inflation, the stock market has declined. So it's just a matter of perspective of what you're looking at. You know, from the last six years, a stock market hasn't kept up with inflation. Is that a bubble? I mean, to me, that seems like the opposite of a bubble. And I think when you look at valuations for the broad stock market, by some metrics, they look a little overvalued, some they look pretty normal, some they look a little stretched.

It's nothing that you would associate with a bubble. I think going forward, long-term investors will earn a decent return on their stock investments over a long period of five or ten years. And that doesn't mean that stocks can't crash 10% or 20% or 50% over the coming years. But, no, I really think that to compare today to 1999 is taking it a step too far. I know you don't focus on individual industries or even individual companies in the way that some of our colleagues do here at the Motley Fool. But I think it is, even just as a matter of curiosity, natural to look ahead to the coming year and find your yourself focusing on an industry, on a company, on a business leader, as we get ready to kick off 2014, what are you interested in watching?

Well, I think to me, the big industry story for 2013 was still, was housing. So housing starts, which is the number of new homes that are being built, increased 35% in 2013. It's just a massive increase. That has a big impact on the economy. For each new home that is built, it generally creates about four new jobs. So right now we're building more than a million new homes per year, up from 300,000, not too long ago. That's a big jump. And to me, going into 2014, that's still an industry that I keep an eye on because it has such the ability to impact the economy in huge ways.

And I really still think that there's potential for big growth in the housing market. I also look at the energy industry. We've known for years now that we're having this new renaissance in energy in America, It was a boom. But it seems like every month we realize that it's bigger and bigger and bigger than we thought. And we're making forecasts and predictions about new energy that we're finding in America now that six months ago would have seemed totally crazy that are real now. So that's something that I'm keeping an eye on to, the energy industry.

It's, you know, I think it's interesting. In the past couple years, there have been a lot of geopolitic woes in, in Nigeria, in Libya, and whatnot, five years ago, that would have wreaked havoc on the price of oil. It really hasn't in the past year. And I think the reason why is because U.S. oil production has increased so much that it's become much less sensitive to what's going on in the rest of the world in China and Africa in the Middle East. And that really helps stabilize the economy. So it's, you know, when people talk about the energy boom, the first thing they say is when we're going to get cheap gas. Well, probably not. That's probably not going to happen with our energy boom. But there are other

benefits just keeping the economy in general more stable that have a really big positive impact going forward. Do you see alternative energy, and I'm thinking primarily of solar? Do you see that rising in a very significant way? And the only analogy I can think of is high-definition television, which I remember hearing about and actually seeing at an expo in 1992, but it was a good decade or so before HDTV really became a mainstream affordable product. You know, the price of solar has collapsed significantly over the past 20 years, even in the past five years. My parents installed solar in their homes in the past five years, and the only way they could make it economical is to take advantage of the huge tax credits that come along with

it. So that to me is just an example of where solar sits today. To make it work, you still need subsidies. It's getting significantly better and the price has plunged so much that it's getting better. But people are still going to flock towards the cheapest energy source that's most available. And right now it's growing towards natural gas and that

for a large part of the energy industry it's still coal. So when do you reach parity in the sense of when does solar really start matching the price of those energy resources? I really think it'll move towards that direction over the next 20 years, but these things don't happen overnight. I think there's a

move that people really want these things to occur faster than they do, but it's really just a matter of waiting until the price gets to that point. So I really feel that over the next 20 years, we're still going to be based overwhelmingly now on natural gas for energy. My last question about investing, you talked about your conversation with Barry Rittoltz and the practice of focus on the things you can control. So that's off the table in terms of investing advice, but what is one piece of investing advice for our listeners as we get ready for 2014? Something that Molly Full CEO, Tom Gardner, talked about a few weeks ago that I really liked.

He said one simple tip that anyone can do to improve their investing skills, their experience as an investor, is to double the amount of time you're investing for. If you're investing for one year, try to make it two. Five years, try to make it ten. Time heals a lot of wounds in investing, whether we're dealing with bearer markets and whatnot. I think the single biggest variable that determines how well you're going to do as an investor is simply how long you're investing for. And one statistic I like bringing up of Warren Buffett's $60 billion net worth, $59.7 billion of that came after his 50th birthday. I mean, Warren Buffett is rich because he's a great investor.

But his secret is that he's been a great investor for 70 years. Time is a very important factor in investing, and the longer people can invest for the better experience they're going to have. I would be remiss as we are, I believe, just what, seven weeks away from the start of the Winter Olympics, if I did not ask you an avowed skiing fan to make a prediction for downhill skiing the 2014 Winter Olympic Games, what do you got? Okay, so Ted Liggety, I think is going to win three gold medals, which I don't think that's ever been done. I'll have to have to check that, but I don't think it's ever been done. But he's dominating, like, I don't think anyone else has ever dominated the sport. Is he a U.S. skier? Yeah, Ted Liggity is a U.S. skier. I grew up skiing with him and interesting about Ted Liggety.

When I grew up skiing with him 12 years ago, he was good, but nothing sensational. You could crush him. No. Routinely, you're beating Ted Liggety 12 years ago. No, but not too far from it. But around 2004, he just came out of the middle of nowhere. 2004, no one had ever heard of him. He won the Olympics in 2006, which doesn't really happen.

And usually in ski racing by the time you're six years old, people know who you are kind of thing. You really have standouts. So I think Ted's going to win three gold medals. Lindsay Vaughn, who's usually the only skier that people talk about. So she blew out her knee in February, trying to make a comeback. She then she then re-injured her knee about three weeks ago. She's had a decent start back in the World Cup skiing. Her first race back, she got 40th place, which I'm sure was the worst she had ever done.

And then she got fifth, I think, last week. I don't know if I would be too confident about her. for the Olympics. I think her knee injury is probably holding her back more than she would like. So I'm sorry, Lindsay, but I'm not putting too much faith in it. I think we've got to call our friends at CNBC and get you working a little dual angle for them. You can do some market commentary. You can also do some Winter Olympic coverage, too. I do. I mean, this is a big deal for ski racing because no one else knows about it except the Olympics. So we only get glory once every four years.

To read more from Morgan Housel, you can follow him on Twitter. You can also read his stuff every week right on four. Fool.com. Thanks for being here. Thanks for having me. Coming up, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. I'm Chris Hill, joining me in studio once again, Charlie Travers, Ron Gross, and Jason Moser. Guys, before we get to the stocks on our radar this week, want to mention we have a new special free report. It's the Motley Fool's Topstock for 2014. It's a free research report from our chief investment officer, Andy Cross, and you can get it for free just by dropping an email to Topstock at Fool.com. That's all one word. Topstock at Fool.com.

Ron Gross, what do you got this week? I'm taking another look at paychecks. P-A-Y-X. They just reported another solid quarter. The stock has done really well this year. They're going to benefit from when interest rates eventually rise, as Jason said earlier in the show. That's not going to happen just yet. I need to figure out whether the stock price already has that baked in or not, but it's a real solid company. Could be a good opportunity. Steve Reuter, question about paychecks? Can paychecks expand beyond just payroll? Is there any other space for them?

They do have a smaller human resource division that handles many aspects of the outsourcing the human resource function, so that could grow. Jason, what do you got? Yeah, looking for the big winners of the holiday season here, and I'm thinking that Under Armour may very well be one of them. Ticker is UA, and when you look at this advertising campaign, this sales campaign, they've rolled out over the past three weeks. It's just been phenomenal.

I've been able to take advantage of it myself. They focused in on one of the key issues there with consumers and free shipping. And when you look at the size of this company compared to Nike, it's only about an eighth the size of Nike. which means there is a huge opportunity in front. And with a driven leader like Kevin Plank, I like their chances. Steve? Will you promise to wear underarmor every day for the next year?

I can do that. Why would he promise that? I can definitely do that. I don't know. He's recommending the stock. I can absolutely do that. Walk the walk. I think that's what Steve does name?

Does underwear account? Let's move on. Charlie, what are you got? Telcom Indonesia. The ticker is TLK. This company is like the Verizon of Indonesia, which is the fourth largest century in the world. They do everything like provide broadband internet into your house, mobile phone plans.

They have the dominant market share with a 4.2% dividend yield. If you like dividends, this is the stock for you. Steve? What's the best restaurant in Indonesia? I would hope that it could be Chipotle's Pizza Restaurant concept. Three stocks, Steve. You got one you like? I'm going to have to go with paychecks.

I think there's probably something there. I think maybe they combine with Under Armour. That's where they expand. little paychecks apparel. I love it. All right, before we wrap up, thanks again to our special guests this week, Joe Rood and his lovely wife, Megan,

and the tribute they brought. They brought tribute. As I always say, you can come visit. We love having guests. You don't have to bring tribute, but we love it when you do. Guys, thanks for being here. That's it for this week's edition of Motley Fool Money.

Have a great Christmas. We'll see you next week.