Motley Fool Money - Netflix Continues to Dominate

Episode Date: July 18, 2025

Earnings season is here! Jason Hall and Matt Frankel discuss: - Netflix’s beat and raise. - Interest rate predictions for a year from now. - Crypto week’s three bills, including the GENIUS Act. And how we personally invest in cryptocurrency. - The best (and worst) big bank earnings. - How we invest with our kids. - Stocks on our radar. Stocks discussed: NFLX, Bitcoin, Ethereum, JPM, C, BAC, WFC, MELI, LOB, RKT Host: Anand Chokkavelu Guests: Jason Hall, Matt Frankel Engineer: Dan Boyd Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, "TMF") do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. Learn more about your ad choices. Visit megaphone.fm/adchoices

Earning season is here. This week's Motley Full Money radio show starts now. Need money. That's why they call it money. The full global headquarters. This is Motley Fool Money. It's the Molly Full Money Radio show. I'm on in Chaka Valu. Joining me are two of my favorite fools, Jason Hall and Matt Frankel. Today we'll talk about the results of Crypto Week. I'll tell you which bank impressed us the most when big banks report. We'll also make bold earning season predictions, and we'll, of course, talk about the stocks

on our radar. But first, Netflix reported earnings and did a classic beaten raise. Fullison on the details, Matt. Yeah, so you're right. They did report very solid revenue and earnings. Revenue was up 16% year-over-year. Earnings per share was up 47% year over year. That's really strong, and it was mainly due to the subscription pricing increases that Netflix implemented earlier this year. January. So we are seeing the stock under pressure a bit. As you correctly pointed out, it was a beaten raise. They raised their full year revenue guidance. But their new third quarter guidance is projecting operating margins to compress a little bit compared to the second quarter. Now, there's

some good reasons for that. I mean, Netflix, their original content slate is much heavier in the second quarter of the year. There's a lot more production costs amortized into that number. So there are reasons for it, but that is kind of keeping the stock under pressure despite an otherwise pretty excellent quarter. A couple of things stood out to me there, Matt. First, even though those pretty strong revenue and earnings growth numbers did happen, total hours streamed, was only up 1% in the first half of the year versus the same period year over year. Second, management pointed out that the bulk of its new content was coming out in the second half of the year, but also cautioned just a little bit as you're we're talking about on the impact of operating margins. I don't want to say it's a disconnect, but I do think it's notable. And it also supports a lot of what you're saying that this is getting into that monetization

phase versus just the pure growth phase. We're definitely making that transition. I think we can say that Netflix has pretty clearly won the streaming wars at this point. It's no longer reporting subscribers each quarter because it's shifting from the massive growth phase to the massive profitability phase. Cracking down on passwords is an example of that, right? That hurt subscribers, but increased profitability. Or actually, it would help subscribers, but depending on if they cancel or not. In any case, what can we expect out of Netflix the business in the next five years, Matt?

Well, for starters, I wish they would continue to report subscriber numbers, especially after major price increases, like the one we saw. So we could see if it, if it, is or is not having an impact. But I think over the next five years, we'll see a focus on two big things in particular, advertising and their highest value content. And I'll expand on both of those. So the Netflix ad suite, which is their proprietary ad platform, the rollout was just completed during this past quarter. So it's not a material driver of revenue right now that it really could be in 2026 and beyond. And in addition to, when I say high value content, in addition to the, I mean, Netflix is well known for its TV series, for a, for

it's movies it's producing. It's really doubling down on live programming and really just, desirable content like the Happy Gilmore 2 movie that's coming out. There's the live shows, like that boxing match that's coming up, the Canelo fight that's really, people used to pay $70 to watch that on pay per view, and now it's on Netflix. So they're going to really double down on this high value content because it makes those increasing subscription prices seem more and more worth it to all of its subscribers. Matt, you and I actually, we talked about this on the Motley Fool member live stream Thursday night. Netflix is really in the driver's seat in the streaming world.

And as you just mentioned, with live content, which is extremely valuable for the ads here, but also just as a powerhouse international content producer. I think it may be the best monetizer on a global basis ahead of even Disney, now, if not in scale, but certainly in the content that it can monetize, better than anyone else. We also heard management talk about AI in their content. They're testing something out in content in Argentina, their first one where they're kind of producing some stuff, some scenes with AI. And that's in addition to all the personalization and all the care that they take within the Netflix interface that always gives us great recommendations and keeps us

kind of sucked into that ecosystem. So that's definitely will be interesting. how that evolves over the next five years. But moving on to the stock, we saw that even a beaten raise, Netflix stock fell about 5 percent as we're taping to the high expectations priced in. Are you buy, sell, or index on Netflix the stock over the next five years, Matt? I'm torn. On one hand, I do think, as you mentioned, this is the clear winner in the streaming business. And the fact that growth is being primarily driven by price this year just shows the pricing power of the business with revenue up 16% year every year. But on the other hand, that stocks trading at 43 times forward earnings, it's a relatively mature business in terms of

subscriber count anyway. And it already has a 25% net profit margin. So it's going to have to grow a lot to justify where it's trading right now. I think it can still outperform the market over the long term, even though as Matt noted, this is not a cheap stock and it's a mature business. To me, the two biggest reasons that stand out are, even though it's a mature, it's still relatively early and fully optimizing how it can monetize advertising, especially as we see more and more of that high value live content coming onto the platform. It's a major player outside of the U.S. and it's still really tapping that international market. And if we think about the utility value, even with the price increases, this is still the streaming

service that most people would say it's the last one that they're, going to cancel if they have to start canceling these services. And that says a tremendous amount about how deep their pricing power is and the ecosystem that they've built, how strong it really is. As a Netflix shareholder myself, every time, you know, it's been climbing to new and new heights to stock, you get nervous. But then I just see how well they're executing and how well they're executing in relation to other streamers and how they can kind of vulture content and, you know, kind of make their ecosystem bigger and bigger. And, you know, I think Jason, you were talking about how, or one of you was talking about,

you know, they've got boxing. They've got different kind of events. They've got NFL stuff. You know, I even heard an ad for Happy Gilmore 2 on a podcast. And you think, well, yeah, you know what? They're making it an event. They want people to come in and subscribe because, hey, you know, they want their favorite movie from 30 years ago. They want the sequel, and they can't get that elsewhere.

Let's move on to big macro. There is a whole lot of debate about interest rates, both within the Fed and outside of the Fed. We've seen President Trump lobby for lower interest rates. We've seen Chairman Powell kind of be a little secret of on what he's going to do, he and the Fed will do. and kind of holding the line. We've seen other Fed governors speak out kind of split on what they want or what they predict. What are your predictions on interest rates a year from now, Matt? First, it's worth pointing out that Jerome Powell will not be chair of the Fed a year from now, most likely. The market's median expectation right now for July 26, it's for a full percentage

point of rate cuts compared to the current level. There'll be a federal funds rate range of 3 and a quarter to 3.5%. I think once the Fed starts cutting, it will happen in a more aggressive manner than the market seems to think. So I'm going to go out on a limit, say, a total of 1.5% in cuts between now and next July. And that would put mortgage rates, assuming that mortgage rates and other types of risk-free interest, like the Treasury yield and things like that track, I would say mortgage rates are going to be about 5.5% at this point next year. It's a bold prediction, but I think it's completely possible. Yeah, so just for clarity's sake, Powell's term expires, I believe, in May of next year.

So, Matt, I think you're right. This is going to be the post-Powell period. And directionally, if not precisely, I agree with Matt. I'll also note that if interest rates are not lower, that's probably a good thing for the economy and for our portfolios with one gigantic caveat. And that is that if broad tariffs become a reality, it's a different paradigm because we end up with high inflation because of a combination of both higher prices for goods, but also less supply, because it's going to be harder for companies to bring goods into the U.S. with those higher costs on the table. I think that's a very low probability event. And the most likely thing is that we probably will be in a lower interest rate environment because hopefully inflation will continue on its current trajectory of,

of mostly cooling off, and the Fed will start making those moves, because it is really holding back major parts of the economy, like housing. Matt mentioned interest rates there. But maybe a more important thing to mention Anand is what I'm doing about it, what investors maybe should be thinking about doing. In my case, mostly nothing different. I'm not close to retirement. I'm not close to paying for a large expense, like sending a kid to college or some other thing I've been saving and investing for. So time is still my ally. Now, I have increased the cash that I carry and my bond exposure over the past couple of years as interest rates have gone up. But that as much as anything is because of where I am in that, again, that kind of that paradigm of my investing

career. But I'm unlikely to reduce those things, even if we do see rates come down. So I think the bigger thing is thinking about where you are as an investor and what makes sense based on your goals and less about trying to get ahead of this as an investor or trading on it. Netflix famously disrupted Blockbuster. Pretty impressive, but after the break, talk about the stuff that's trying to disrupt dollars and gold. Stay right here. This is Molly Fool Money. In a world full of noise, long-term thinking stands out. On the Capital Ideas podcast, Capital Group leaders explore the decisions that matter most in investing, leadership, and life. It's a rare look inside a firm that's been helping people pursue their financial goals for more than 90 years.

Listen to the Capital Ideas podcast from Capital Group, published by Capital Client Group, Inc. Welcome back to Motley Full Money. I'm on in Choccovillu here with Jason Hall and Matt Frankel. Congress declared it Crypto Week. And believe it or not, Congress delivered. The first major standalone cryptocurrency bill is now passed by both the House and the Senate. And as we're taping, it's ready for the president's signature. It was called the genius bill, Jason. But is it a good idea? Yeah, I think it's definitely a good idea to get a regulatory framework in place for stable coins. And that's what this did. The name is an acronym for guiding and establishing national innovation for U.S. Stablecoin. What does it do? In short, it requires stablecoin issuers to hold

equivalent dollars in reserve. In other words, for every $1 in stable coin that it issues, it must own $1 in reserve. This doesn't just mean actual dollars in a bank account. It can include things like treasuries, highly liquid short-term treasuries. This is a good first step to helping protect both consumers and investors. If we go back to 2022, TerraForum Labs, TerraUSD, was UST is the token, it broke its peg because it wasn't actually backed by the U.S. dollar. That event wiped out, I think, around $45 billion in investor value in just a few days. Terraform Labs never recovered, investors never recovered. Terraform Labs actually ended up filing for bankruptcy in early 2024. Now, there's more to it than just the asset backing requirement. There's rules around preventing

illegal activities, including money laundering and other things. Now, it's detractors say that this soon-to-be law, we're waiting for the president to sign it, doesn't go far enough. But it's a step in the right direction to regulate crypto where it probably intersects with the most people. And that's not where it is as an investment, but as a tool for consumers. Yeah, so, I mean, I don't have that much to add except that stable coins do have a lot of utility in terms of, you know, seamless money transferring, cutting down on fees and things like that. But the reason they haven't gained more traction than they have is really because of what this bill just did, because there weren't that many regulatory guidelines. It wasn't

that perceived as a safe way to move money around by a lot of investors and a lot of just a lot of consumers because, like Jason mentioned, the Terraform Labs bankruptcy. So there's a lot to like about this from a consumer protection standpoint. It's not really significant for investors, but just in terms of the companies that rely on stable coins to move money around, it's a big deal. Genius bill is farthest along, but it was actually just one of three pieces of crypto legislation making its way through the congressional snake. Tell us about the others, Jason. Yeah, there's two more that have made it halfway through Congress. The first one I'll talk about is the more straightforward. It's called the anti-CBDC surveillance.

Act. In short, it prohibits the Federal Reserve from creating a digital currency without explicit authorization from Congress. I don't want to get into the politics of this one. You could easily fall into that. But proponents of it say it's about privacy and protection from government's surveillance and control. Detractors say that it limits the tools of the Fed while simultaneously giving too much control of the future of money to a very tightly concentrated group of very private businesses and individuals. I think to some degree, both are probably directionally right, but it's clarity that I think that the market needs. Speaking of clarity, the act that probably matters more is just that. It's called the Clarity Act. This is the other one.

This is one of the biggest challenges for crypto in the U.S. has been that lack of clarity. over which regulatory agency has oversight. And I think that's played a massive role in why we've seen grift and fraud over the past decade, but also limited institutional investment because of the risk of not knowing what regulators were going to do. So here's what it does. The Clarity Act puts the SEC, the Securities Exchange Commission, in charge of regulatory oversight for things, mostly on the investor side, regulatory disclosures, capital raises. These are things that the SEC already has expertise in

with companies that have to file disclosures and has that existing framework in place to be able to oversee it. Now, the CFTC will have oversight of things like intermediaries and exchanges. This matters a lot for all market participants, whether you're a developer, a crypto developer, a broker-dealer, maybe an institutional investor managing billions of dollars in assets, or just a retail investor with a few hundred bucks or a few thousand dollars at risk, getting this framework in place so that there is regulation and regulators that have explicit roles, I think is really important. And I would actually add that the biggest regulatory dues might not be any of these three

pieces of legislation. The Office of the Comptroller of the Currency, or OCC, they clarify, in a letter sent back in May that national banks may now act as crypto custodians. That paved the way for, I mean, we've seen it with fintech so far, like SoFi announced that crypto is coming back to its platform, but it really paves away for even bigger institutions to add some form of crypto trading or crypto activities to their existing platforms. Like Bank of America could add it to Merrill Lynch potentially. There's a lot of implications that that clarification letter could have. Well, let's put the rubber where the road is. What are your personal allocations in cryptocurrency,

starting with you, Jason? It's about 2% of my portfolio. And like Matt's going to mention in just a second, I have some indirect exposure through financial companies that are going to profit from crypto if it does become more mainstream. My current allocation is very low. It's not zero, but it's very low. I do have a lot of crypto-adjacent stocks. I think SOFi stands to benefit if crypto does well. PayPal is a big stablecoin issuer, and Block is well known for owning a lot of Bitcoin. So I guess I do have a lot of indirect exposure through that as well. I guess I do have indirect exposure. I don't really consider those, the crypto, but they are right there indirectly. Three percent of my portfolio is currently Bitcoin and Ethereum. I put a total of about 1% of my portfolio in them around.

2020. Since then, they've done really well. I've sold most of it, so the 3% remaining is earned, quote unquote. For what it's worth, I'd be interested in maybe buying again during the next crypto winner. We know that it's a very volatile segment. Up next, we'll see if JP Morgan is still king of the banking hill. You're listening to Motley Full Money. These days, I'm all about quality over quantity, especially in my closet. If it's not well-made and versatile, it's just not worth it. That's honestly why I love Quince. The fabrics feel elevated, the cuts are thoughtful, and the pricing actually makes sense. Quince makes high-quality wardrobe staples using premium fabrics like 100% European linen, silk, and organic cotton poplin. They work

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Q-I-N-C-E dot com slash Motley for free shipping and 365-day returns. Wentz.com slash Motley. Welcome back to Motley Full Money. I'm on in Chaka Blue. There are six U.S. banks with at least $1 trillion in assets, and they all reported earnings this week. So it's a particularly good week to have Matt and Jason on because they've followed banks closely for years now. Matt, it's time to play best worst. Which of the six banks have the best quarter? Your choices are J.P. Morgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley.

Surprisingly, I'm going to have to go with Citigroup, and I think it's the first time I've answered that question when you asked me in that way, when you've asked me what bank had the best quarter. Very surprising. Yeah, they had strong investment banking results, but that's pretty much industry-wide. But they had excellent growth throughout the business,

unlike their peers, just to give you a couple examples, Citigroup's revenue grew by 8% year-over-year, while most peers were about flat year-over-year. their efficiency ratio improved by more than 300 basis points year every year. That was kind of rare in the industry this quarter. We're seeing more aggressive buybacks, 8% growth year-over-year and tangible book value. So the intrinsic value of the bank is building. Credit card revenue was up 11%. City is one of the biggest credit card issuers. Consumer deposits were up by 5% at the end of the quarter. Most were seeing declining deposit basis. Net interest income grew by 7%. Most of not. So it just really good numbers compared to the peers. I'll push back a little bit. I think objectively speaking, JPMorgan Chase probably had the best quarter. It shouldn't be a surprise. This continues to be the gold standard. Sure, a little bit of a bleed off in deposits, but mid-single-digit loan growth and the returns that it generates are absolutely exceptional. But I think through the lens,

Matt, that you're probably looking through, and I agree with against expectations, yeah, I agree that it's city. The expectations have been so low. Even if we look at things that weren't great at city, increasing credit loss reserves, it was for a good reason. Loan portfolio growth, not concerns about credit quality. So those are real positive things. Now, there is still a long way to go. If you look at the profitability metrics, return on equity is still high single digits. You know, you want to see that above 10%. So there's progress there. But Jane, Jane, Fraser held CEO, she held firm. Look, this is 10% is still our goal.

And that's not the end point. That's just the next step on the path a year from now is to get to that double-digit level of returns. Jane Fraser has, I really think she has things headed in the right direction for City. It sounds like JP Morgan Chase and its CEO, Jamie Diamond. Still MVP, but most improved player, Citigroup, which been waiting literally. more than a decade for that turnaround. Clowling to two. Let's talk about the worst quarter.

Matt, which one had the worst? I'd have to go with Wells Fargo, and not necessarily their fault. Investment banking was really a highlight for all of the banking industry so far this quarter. And Wells Fargo is the only one of those six you mentioned that does not have a strong investment banking operation. It's a very small part of their business. So it's not that surprising it would underperform. Also, they lowered their full year forecast for net interest income.

They had been previously calling for growth in the 1 to 3% range. Now they're saying it's going to be roughly flat versus 2024. So Wells Fargo, I think by default, just because they don't have an investment banking division gets it. I agree with Matt. And as Matt mentioned, I really want to emphasize this. I don't think it's because Wells had a bad quarter. The quarter was fine. The results were good, lacking that investment bank uplift that the others did.

As he noted, I also want to point out that I think the lower forecast for net interest income probably says more about the state of the borrowing consumer and small business than it does about the quality of Wells' business. Having the banks kickoff earnings season is somewhat helpful because they give us a macro feel for how the economy overall is doing as we look into future earnings of other companies. What were your takeaways, Matt? Yeah, I saw a few somewhat conflicting signals. Generally, across the board, we saw loan defaults, loan delinquencies trend lower, which is better than expected, especially compared to the expectations

of a couple years ago. Savings balances are generally trending lower. I mentioned Citigroup was a big exception. Generally, savings account balances are lower, especially when you consider inflation adjusted terms. And credit card spending volume is driving the bulk of loan growth pretty much throughout the industry, which is a little bit of a concern that customers. consumers might be, they're spending freely, but they might be over leveraging themselves a little bit. The loan mix shifting towards more credit card debt is notable. It's great for bank profits right now, especially you mentioned the delinquencies, all of those things. People are using their credit cards more, but they're still paying them, right? So that's good. But I think if we look

a little bit further out, maybe it's maybe a little bit of a yellow flag, if you want to think about it that way, again, looking back kind of at Wells, we did see that loan mix shift from less asset-backed loans to more credit card debt on its book. And that affected its loan loss provisions in a way that points towards maybe higher credit losses later this year, just because, again, credit card debt is a riskier debt. You see more defaults, late payments. Again, definitely the most consumer-focused of these. But I think probably the biggest take is I don't think this is necessarily anything that has me any more or less concerned about banks in the near term or the long term, specifically thinking about a Wells Fargo, thinking about

its long-term prospects, which are way better than they were a year ago since the restriction has been lifted on its ability to grow assets. And under the Trump administration, if we continue to see the lighter hand of regulation, and if we do see lower corporate taxes, those are all positive things. for bank bottom lines. At some point, less regulation. Does that lead to some sort of an asset bubble? Maybe it does. But I think at this point, we're not seeing any clear negative signs or things that investors should be super worried about. As you all look through the earnings and the conference call transcripts or listen to the conference calls, was there a best quote that stood out, Matt?

Not one that I could think of off the top of my head. Most bank CEOs, with maybe the exception of Jamie Diamond, sound very optimistic about how things are going and, you know, the looser regulation environment, things like that. Jamie Diamond's been really the one kind of sounding the alarm. I don't have a specific quote in front of me, but he's been saying, you know, he's been cautioning about the impacts of tariffs and on inflation and things like that for months now. And this quarter's report was no exception. I'll paraphrase a little bit with Jamie Diamond. I'm going to stick with him. He is certainly the most quotable of the big bank CEOs. If you get into some of the smaller banks. There's some pretty outspoken people. But Jamie Diamond has been the most

notable kind of anti-crypto bank CEO over the past decade. And he's having to begrudgingly accept that J.P. Morgan Chase needs to participate in crypto. And just to paraphrase, a very simple statement that he made about stablecoin, I think they're real, but why use them? We're all trying to figure that out, Jamie. Right. Well, if you all had to buy one of the six, which one are you buying, Matt? To be clear, I can make a good buy case for any of the six right now. Jason mentioned the potential corporate tax tailwinds. The president campaigned on a 15% corporate tax rate.

Banks would be probably the biggest beneficiary of that in terms of the S&P sectors. Most of these banks you're looking at have effective tax rates in the low 20s. So, that would be a big boost to their bottom lines. You mentioned Wells Fargo's asset cap being lifted, which, although this quarter wasn't the best, I mean, that can make things interesting going forward now that they're allowed to grow again in arguably a pretty good growth environment for banks. But if I had to buy one today, I'd say probably Citigroup, it's still very much in turnaround. Their turnaround has been going on. I'm kind of joked, but literally their turnaround has been going on for about 17 years now.

I was not joking. CEOs pretty much ever since the end of the financial crisis. No, well, it's true. It's still very much a turnaround, but it's an excellent value, and the recent numbers make it seem even more so. It trades for about 0.8 times book value. But I give a close second to Bank of America, which is a large bank holding in my portfolio. And I think it's closer in quality to J.P. Morgan Chase than the market seems to think. Matt, you're a value investor. And if there's any one thing that I've learned about investing in these large banks, first thing you have to focus on is quality, finding the ones that have good

credit quality, great assets that they own with a margin of safety. And the banks on the margins, they're growing at really high rates. A lot of time, it's because they've lowered credit quality, which means that they've kind of maybe started the timer on the bomb that's going to blow up. So being mindful of the quality and just as important as valuation. These are enormous institutions. Counting on them to be able to grow into valuations is a great way to buy underperformance. And also, it's also a great way to set yourself up potentially for losses that it may be hard to hold through when we do go through those inevitable downturns, economic periods of a weak economy recession.

So to me, that makes it, and maybe this is heresy to say, but J.P. Morgan Chase almost unbuyable because it has earned a very high valuation. It has earned it because it is the gold standard. But it's hard to see a picture where it's an outperforming stock over the long term from this level of valuation because it is so enormous. I think you have to find pockets of opportunity. And to me, the two that stand out the most, Bank of America trades for, around 1.3 times book value, about 13 times earnings. That's not cheap, but it's not expensive. And you're buying what I think is also just pretty close to JPMorgan Chase in terms of extremely high quality for these really big businesses, extraordinarily well run, very well positioned. If we do see things that could boost its profits like lower interest rates, the lighter regulatory hand help drive its earnings up. But I also think that Matt's right. that city, and again, I want to be careful about using value. It trades for a discount to its book value, but for a reason, the returns that it's earned off of its assets have been

substantially lower than all of its peers for a very, very long time. And there's still a lot of work to do to boost those returns to a level that's even close to its peers. So it trades for that cheap book value for a good reason. It's not worth what those other ones are because it doesn't get the return from those assets. But because the turnaround, we have clear signals that the turnaround is working. Jane Fraser is building a more focused business, moving away from markets that have dragged on returns over the long time and hurt profits. Those are all the right things to do. So I would say from a risk-reward perspective, City is really, really compelling as a turnaround. You two are braver than me. I'm still once-bitten twice shy on City, but maybe I'll have to take

another look. 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 yourself stocks based solely on what you hear. All personal finance content follows Motley Full editorial standards is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. See our full advertising disclosure. Please check out our show notes. Up next, we've got stocks on our radar. Stay right here. You'll listen to Motley, full money. The old adage goes it

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right? The ticker. I explained to the kids that it has close to 10,000 holdings, 10,000 different companies, pretty much has every major company in the world, including ones they'd know, like Roblox, Starbucks, Nintendo, Target, all the kid favorites. The younger one took my default and used that the older one actually surprised me and lobbied to pick his own stock. He wanted Mercado Libre, since he'd heard me talking about it as the Amazon of South America. And he noticed that it wasn't one of the top 25 holdings in VT. I was trying to bore them with the top holdings to try to get them excited, but probably boring them by showing them the companies. And he wanted more exposure to Mercado Libre. So far, I'm calling the month one success, a experiment a big

success. Do you two have similar setups? I'm curious what you do. I have an eight-year-old who's far more interested in playing baseball and soccer and playing soccer on his Nintendo Switch and reading Harry Potter than talking about stocks with the old man. At this point, I think it's just been far more important just to have him invested. College savings, we have a small trust setup as well, then for him to know that he's invested. Now, he's starting to become more aware of what I do for work. He told me yesterday. It sounds a little narcissistic, but I picked him up from camp and I had an earlier week episode with Emily and you. We were listening to for the Motley Fool

Money episode. We were listening to it. He's like, kind of listening to me. He says, Dad, I want to listen to you every time you're on the podcast now. It's kind of weird. But if that's the thing that draws him in, I'm totally fine with that. I do think fundamentally the most important thing is that if I can help him build up the muscles of delayed gratification and paying for your future self first, whether he gets the stock picking bug or just indexes his way to a solid financial future is far less important to me. Yeah, and I'm making this a priority over the next year. So, kind of like Jason, I have a seven-year-old son who I'm not 100% sure knows what I do for a living. But my oldest is about to be 10, my daughter,

and she kind of gets what I do. I mean, I bought her some Disney stock in her portfolio. Generally, so far, I just have allocated money every month or so to an UGMA account, a custodial account, and put it in whatever I've been buying. It's kind of built them a nice position in SOFI. But, I mean, other than that, I'm going to make this a priority to really get them involved, probably when they hit that 10-year-old mark. Right. Let's get to everyone's favorite stocks on our radar.

Our man behind the glass, Dan Boyd, it's going to hit you with a question. Or more likely, historically, an amusing comment. Jason, you're up first. What are you looking at this week? Live Oak Bank shares, Ticker L-O-B reports earnings on July 23rd. So that's one that I'm really laser-focused on coming up soon. Dan, a question about Live Oak Bank shares? Jason, I was looking on Wikipedia here.

They're in Wilmington, North Carolina, Live Oak Bank. And they have got, looks like, at their headquarters, a nice central oak tree growing. What happens if that tree dies? Their CEO is going to take an acorn from that tree, and he's going to plant another one because he is thinking about what's going to be happening decades down the road, and now what happens next quarter. Good answer, good answer. That's a better answer than my dead oak bank shares.

Matt, what's on your radar? Let me start off with a question, because I know the three, Jason, Onond, and myself, are homeowners. But Dan, are you a homeowner? I am, yes. All right. Well, I'm looking at Rocket Company's sticker symbol RKT. The reason is because homeowners like us have not been tapping into equity for about four years now since mortgage rates are elevated. Home prices have been rising, and now American homeowners are sitting on $35 trillion in home equity, the highest level ever. In the 2021 period, Rocket's loan volume was about four times what it is today. And I think if rates start to fall down, like I think they will, we can see a refinancing boom that,

makes the 2021 one actually look small. Dan, a question about rocket companies? Two comments here, Matt. One, when you said RKT, I got excited because I thought you were talking about Rice, Krispy Treats. It's almost lunchtime here, and I'm starting to feel it a little bit. But yeah, so I refinanced my home in 2020. So right now, we're talking about the old golden handcuffs. They're going to have to drag me out of here, pal. Yeah, it would take a lot for people to start tapping into their equity. I know on it actually refinanced twice, if I'm not mistaken, during that period. I think he was the one that on my friend's list that did, but pretty much everyone I knew refinanced.

I actually had a mortgage broker. Tell me to stop calling him. I wanted to refinance so many times. Wow. True story. Wow. All right, Dan. Which company are you putting on your watch list?

I think, you know, just because of the vibes, I think I'm going to go rocket companies this time around. It seems like it might be an interesting time for opportunities. Excellent. Jason Hall, Matt Frankel. Thanks for being here. That's going to do it for this week's Motley Full Money radio show. The show is mixed by Dan Boyd.

I'm on in Choccovalu. Thanks for listening. We'll see you next time.