Motley Fool Money - Spatial Computing and Safety Deposit Boxes in the Sky

Episode Date: June 9, 2023

Will mixed reality win out over virtual reality? And is crypto a security?  (00:21) Jason Moser and Matt Argersinger discuss: - Apple’s Vision Pro headset and the company’s new focus on spatial computing. - How the offering stacks up to Meta’s Quest products. - The SEC’s suit against Coinbase and Binance, and what it means for crypto. (19:11) Deidre Woollard speaks with Wall Street Journal reporter and author Katherine Clarke about the business of New York real estate and her new book Billionaire’s Row. (33:06) Jason and Ron discuss the PGA/LIV partnership and two stocks on their radar: Adobe and Oxford Industries.Stocks discussed: AAPL, META, COIN, DOCU, SFIX, TTN, MTN, ADBE, OXM Host: Dylan Lewis Guests: Jason Moser, Matt Argersinger, Katherine Clarke, Deidre Woollard Engineer: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

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This is Motley Fool Money Radio show. I'm Dylan Lewis. Joining me in studio, Motley Fool senior analysts, Matt Argersinger, and Jason Moser. Guys, great to have you both here. Hey, Dylan. We've got the scoop on the New York City skyline, the latest earnings news and radar stocks. But we're kicking things off with the news of the week. Jason, Apple has a new product.

Yes, they do. The company unveiled its new Vision Pro headset at its worldwide developers conference this week. The headset will be available next year and retail for $3,500. Jason, you run our augmented reality service here at The Fool, so I was excited to talk to you about this news. In particular, what stood out to you with the announcement and the details that came out this week? Well, yeah, you're right. I do run the augmented reality service and talk about we've been waiting for this for a while. The service opened up four years ago, basically waiting for this announcement, right? So it's been a long time coming, but better late than never. I think,

number one, this is very impressive technology. I mean, you have to acknowledge the fact, this is just really impressive technology. And I think that in regard to Apple's headset, the use of mixed reality is an important distinction versus other main competitors. I think incorporating augmented and virtual reality into an experience. as opposed to it just being straight-up virtual reality where you're living in this digital, virtual world, probably gives it more utility. Now, I think we have to sort of discover what that utility is, and we will in time. And I think ultimately this really does further validate the space that Apple is finally throwing its hat in the ring.

They have a reputation for doing that, right? Kind of letting their competition figure out the space, what works, what doesn't. And then Apple just kind of works its way in there in its own little fashion and really comes up with something a little bit differentiated. And I think that's what we have here with the Vision Pro. Now, with that said, I think it is worth tempering expectations. I mean, this is the first shot at this. I mean, this is them getting the ball rolling. This is not a mass consumer device. At $3,500, you know, Apple fan boys are going to probably go out there and buy it. But those are few and far between. I think this is something where they'll bring a lot of developers in. They'll build services and experiences with this

device to try to figure out its primary utility. And so it'll change in time. But I think this is a really impressive first step. It is. It's an impressive first shot. I think we all agree that it's probably going to have to evolve to something closer to what I'm wearing on my face right now versus what I wear when I go skiing. But I think, yeah, I mean, I just don't think people are going to walk around or even sitting their home for long periods of time wearing, you know, somewhat heavy goggles and a battery pack in their pocket. But it's a good first shot. From a platform perspective, though, I think if you build it, especially if you're Apple, the developers will come. And I think people a lot smarter than me, including a site like TechCrunch, which has tested the product. They say

it's nothing less than a genuine leapfrog in capability and execution of mixed reality. So if Apple's solved a lot of those latency issues, the isolation challenges that previous headsets have had, the resolution is supposed to be incredible. So you can actually read text using the device. The eye tracking and hand gestures are near perfect, apparently, and you don't have to manually adjust or keep your hands out in front of you, which I think is a limitation of a lot of existing headsets. So I think it's still a solution looking for a problem. And I think in this case, it's looking for that killer app, as all these headsets are.

But I think Apple, more than any company, because of the sheer quality of the hardware and the leaps they've made, probably can find it. So, we have used virtual reality, augmented reality, as terms in this discussion. I think Apple may prefer that we use spatial computing. That's the term that they continue to come back to. It seems to be the company's focus, and I understand their distinction there, because if you look at what they're offering with this product and what I think the main comparison out there in the market is with Meadows Quest product, they're a little different in terms of how immersive

this is, Jason, and it seems like a slightly different approach to the way that we may interact with some of these virtual elements, more layered on our world rather than being something that you are totally, totally immersed in. Absolutely, and that goes back to the use of mixed reality there. And I think you're right, the spatial computing, I mean, it's a modest distinction, but it's a distinction nonetheless, because it does give you this idea. And I think the bigger opportunity with devices like this in the near term is on the industrial side, right?

Industrial spatial computing, we've heard the term industrial AR. It's how companies are using these types of. of devices to get work done. And certain industries, it's more applicable than others. But I think that's where the bigger opportunity is. In regard to the consumer, I think that's where it takes a little bit more time. I'm not saying it won't happen. I just think it's going to take a while to ultimately get to wherever this is taking us. Because changing consumer behavior is very difficult. Unless you have a really, really compelling use case, and that goes back to Maddie's point on the killer app, right? We hear this people saying, this is the iPhone

moment. I don't like that. I just think let's talk about this is the smartphone moment because Apple doesn't own the smartphone, right? iPhone, Android, whatever it may be. But when you see the smartphone, to me, that was a fairly obvious one, because we already knew at the time, I mean, how necessary a phone was, right? We all knew then, you need a phone. And we also knew how powerful the internet was at the time, right? And so now you're telling me you're going to Reese's peanut buttercup these things and put the internet and the phone together? I'm in. It made a lot of sense. We're not there with this yet. I'm not sure what problem it ultimately solves.

That's what's going to take some time, and I think it's going to take ultimately probably a generation. Like, my kids, their kids, are going to be raised on probably a paradigm like this, where they sort of interact in their computing world differently than we do today. It's just back to that. Changing consumer behavior is very difficult. It does take a while, and it's ultimately coming up with those core use cases. Yeah, and I love the spatial computing label. I mean, it feels like Apple's pushing something out there saying, no, this is what it is.

It's like when Steve Jobs was like, look, I know what customers need. Okay, I will build that. They don't know what they don't want, you know, and I think that's kind of what Apple's approach, and I like it. I want to bring it back to Meta one more time before we wind up moving over to another topic here. And I think I can't help but wonder with Meta and Apple now entering the space, is this something that helps broader Metaverse ambitions, which Meta would benefit from? Jason? Or is this something where Apple is coming in and kind of saying, this is our market now? Well, I don't think Apple is saying this is our market, because it is very difficult to really fully understand what that market is yet. The metaverse is a big word.

I know Mark Zuckerberg loves to throw that word around a lot. Again, we're still trying to figure out what ultimately is the metaverse for? Why do I need it? Maybe it's fun. Maybe it's entertaining. But is it something that I need to interact with every day? Looking at the opportunity, I mean, meta has done very well with its Oculus devices to date. I mean, sold around 20 million or so. That's not chump change. When you think about the fact that the forecasts out there have Apple maybe selling 150,000 of these devices in the first year, you can see clearly that is meaningless to their financials.

It doesn't matter. But look at it in the broader context of what Apple does so well, among other things. The hardware is obviously very, very strong. but they're closing in on one billion paid subscriptions along the way. Now, that is very, very important here, and it's something they do very, very well. That paid subscription number continues to grow. And it's kind of like, remember we talked about with Amazon, Jeff Bezos always talking about, we don't want to make money from you buying our devices.

We want to make money from you using our devices. And that's great because user behavior, you kind of do it over and over again. Apple's kind of a, we want to make money from you buying the device, and we want to make money from you using the device. And I think that as investors, I'm on board with that. The other unavoidable major story of the week in crypto, it appears the Wild West days are over. This week, the SEC filed suits against Binance and Coinbase, saying the crypto firms are operating unregistered securities exchanges.

In addition, Binance has been accused of misappropriating customer funds and other charges. Jason, enforcement actions can get wonky very fast. I'm going to distill this down as quickly as I can so we can just get into the commentary here. It seems as if Coinbase and Binance have traded about a dozen crypto assets. The SEC says were securities and should have been registered. They were not registered. That didn't happen. And so here we are now.

What do you think this means for the crypto market? Well, I think this is a very messy situation. And I think it's one of the reasons why I just simply don't dabble in crypto at all. It is just a very difficult space to fully understand because it's still very much the wild, Wild West, add to that the fact that I just still don't really fully see the utility in crypto. I mean, and I just have zero interest in owning it, because ultimately, as an investment, the whole point is to make money. Well, then you just have to find someone else to pay you more than you paid for it.

When you look at companies like Binance and Coinbase, right, they operate on obviously different models and they make their money a different way, but that still all plays into these cryptocurrencies these changing hands, right? And so for me, it makes a lot of sense that we're finally seeing regulators get on the ball here. I just wish they'd kind of done it a little bit sooner. Matt, when I look at this news and I look specifically at Coinbase's results because they are publicly traded company, 80% of the revenue from 2022 coming from the United States, it seems to me like, if this sticks, and we know that these types of enforcement actions can take a long time to materialize, this may be something that becomes pretty core to the thesis for Coinbase.

it has to. I mean, I'm not going to pretend I understand all the implications here. I'm not a securities law expert. These cryptocurrencies and tokens, they sure look, walk and talk like securities to me, but what I am certain about is I think this is really a cause for one, institutional investors to step back. No large, reputable company money manager wants to plan a sandbox that's facing any kind of government scrutiny. I certainly wouldn't. For retail investors, though, which kind of make up the bulk of crypto or Coinbase's trading, if you're something, who's been trading Bitcoin, Ether, or any of these various petrocks, tokens, sorry. And there's a chance these non-security securities could be rendered worthless simply by

regulatory decree. I'd worry about that. At the same time, if I have money invested in any of these platforms and they can get frozen like they have for Binance in certain cases, I mean, would I ever want to be involved in that or wait the time, as you mentioned, Dylan, for these regulations to play out? But at the end of the day, I actually think the biggest threat to this whole space, is apathy. I mean, I think the shills and grifters in the space are already moving on. They're moving on to AI plays and other things. As an investor in these non-security securities, as Jason said, you're always kind of depending on someone else to pay a higher price for them. And guess what? Very soon, there might be not be someone else on the other side of that trade for you. And you

might be the person actually holding the bag. After the break, we've got a glimpse at the upcoming ski season. Stay right here. This is Motley Full Money. Welcome back to Motley Full Money. I'm Dylan Lewis here in studio with Matt Argersinger and Jason Moser. We've got a rundown on earnings news, starting with Stitch Fix. Jason, shares of Stitch Fix up 25% after the company reported its third quarter results. The company's losses narrowed, but revenue was down 20% year over year. Is the reaction here, Jason, that cost-cutting measures are working for this company? I don't know that I would quite go that far, but it is definitely necessity. I mean, this is obviously a business very much on the defensive right now. I mean, there are business model

questions, a bit of a revolving door on leadership, as founder Katrina Lake is back in his interim CEO. It can just be very difficult to then focus and really prioritize on the most important items in order to get this business stabilized and going back in the right direction. But, you know, a real clue in the release can be seen in just some of the language they use. I mean, there's language in there, quote, unquote, preserving cash flow. I mean, that goes back to that business is on the defensive. The good news, the stock is up 50 percent a year-to-date. There is some optimism there. Maybe there is a future for Stitch Fix, but maybe it's just a smaller footprint than we thought it could be. But, yeah, I mean, the numbers were not all that encouraging. Revenue down 20%, active clients down 11%.

That revenue per active client down 9%. The crazy thing is this actually all exceeded management's expectations. So you can clearly see it's a business dealing with a lot of challenges. Switching gears, Matt, looking at the ski slopes, things are a little slow right now, but earnings from Vail, giving us a glimpse at what to expect next season. What did you see when the company reported? Yeah, this is kind of an off-quarter for Veiled, kind of there at the end of their ski season, which finished quite well. If you look at their core second quarter results, which captured the ski season, it was a tough. It was a tough season. You had bad weather out west. Well, you actually had too much snow out west, which is interesting. And too little snow kind of in the northeast and mid-Atlantic. And so they were coming out of that.

Conditions got a little better in the spring. But really, this is the quarter where investors start looking at pass sales for 2023-2020-24 season. The Epic Pass being such a key part of the Vale's business. Sales there are up 6% so far. If you go back a year ago, unit sales, there were up 9%. So you've seen some deceleration there. I'm wondering if coming off a bad weather season, a lot of the last years are saying, you know, am I going to invest another $900, which is roughly the cost of the ticket for another season? Of course, they will, a lot of them. But my question with Vale is, it is a network effect business. We tend to apply a network effect looking at software companies and social media companies, but this is a network-effect business in the sense that Vail keeps adding resorts to their network of the Epic Pass. More resorts get added. More skiers get interested. That gives Vail more

revenue to invest in its resorts and add more resorts. It's a virtuous cycle. I just wonder how much of pricing power they have now. They've raised that Vail Epic Pass about 10% per year over the last five years. It's a heck of a lot of pricing power. Can they keep doing it? It sounds like that might be slowing a little bit. Over to the more, maybe seasonally appropriate, Toro. The lawnmower and outdoor equipment company posted earnings and record revenue of 1.3 billion earnings per share of 28% year over year. All earnings season, Matt, we've been talking about how consumers are starting to step away from those higher ticket items. It seems like we're seeing that in the results here from Toro. Again, we are. Dylan. If you look at Toro, it's really

nicely divided between a residential business and a professional business. Professional business was great during the quarter of sales there up 15%. It's higher margin revenue for the company. But if you look at the residential side, which used to be a lot bigger for the company, that sales there were down almost 17%. Management talked about broad weakness across categories. So that's another sign of, I think, we're seeing a little bit of weakness on the consumer side. Their inventory was also of 26%. Now, the CEO has come out and said, well, we've got a huge backlog of orders we're working through, especially on the professional side. Demand is there. We're just not seeing a lot of the supply channel follow-through on that.

So that's a little bit of concern. They did narrow their guidance a little bit lower. Still, I like this business. It's kind of a nice dividend growth business if you're looking for dividends. And it's got some solid brands. It's just the residential side might be slow for a while. We'll wrap up our earnings take with a look at DocuSign. Jason, this was one of those pandemic darlings that have fallen back down to Earth a little bit over the last couple years.

Yeah, I mean, I think the good news for DocuSign is pre-2020, signature, electronic document, agreement, and management, that all has legs, right? In, you know, post-203 here, that's going to continue. I think this trend is something that is going to continue to gain traction as we move forward. So that's obviously a very good thing for Doc, you sign. I think when you look at the stocks' muted reaction from the earnings report, it's very funny. The immediate reaction after hours, it was a big, kind of came back to Earth. I think that's likely, partly growth-related, right?

They recorded 19% full-year growth last year. It's going to guide for around 8 to 10% this year. But also in the call, they did mention they see a continuing challenging macro environment, cautious customer sentiment. That's all playing out in that net retention rate, 105% for the quarter versus 107% a quarter ago, and 114% from a year ago. Again, good news is this is not a DocuSign-specific problem. We've seen that narrative all throughout earnings season with a number of these software companies.

When you look at the numbers, I mean, management exceeded all internal expectations, so they're doing what they say they're going to do. Total revenue up 12%, subscription revenue up 12%. Professional services continues to capitalize up 14%. And strong billings growth here, 10%. Again, raised full-year guidance very modestly. I mean, I want to stress very modestly. But again, I think with new leadership in play here, we've got a new CEO who's just getting his feet wet, A brand new CFO just coming over from the trade desk.

We've got to give them a little time to get this house in order, but it seems like things are headed in the right direction. I can't help but look at this company and bucket it a little bit into the same spot that I'm looking at Zoom right now, where a company that was wildly successful during the pandemic, we are now looking at radically new and different ideas about what the business looks like going forward, especially year-over-year growth rates. How do you stack those two against each other, Jason? Yeah, it reminds me of the voting.

machine versus weighing machine, quote, right? In the short term, the markets of voting machine, but really the longer term, it's a weighing machine. Both companies, Zoom and DocuSign are heavier. Far heavier businesses now than ever before, and that's great. I will say, listen, Zoom fatigue is real. I don't think there's any such thing as DocuSign fatigue. You don't think so? No. I'm always happy to send an e-signature. I'm always happy to receive an e-signature. Yes, sir. And I, you know, I can't say the same for hopping on those meetings all the time, guys. Right there with you. Jason Moser, Matt Argusinger, fellas.

We will see you in a little bit. But up next, we've got an inside look at New York's iconic cityscape. Back to Motley Full Money. I'm Dylan Lewis. Have you ever seen a picture of the New York City skyline and thought, how are new buildings still going up in a city that is already so packed? Motley Full Money's Deidre Willard spoke with Wall Street Journal reporter and author, Catherine Clark about the business of New York real estate, her new book, Billionaires Row, and the reason why some call the city's luxury apartments the world's biggest safety deposit boxes.

I love this book because I think so many of us who've gone to New York City have seen those really tall buildings and wondered what the heck is going on. Your book covers kind of the last 20 years of real estate cycles along this one stretch of road in New York City, West 57th Street. it kind of only recently got the name Billionaire's Row. It's gone through a lot of changes. It was almost like a mini-time square at some points. What factors have led to its changes over time? You are so right. So many people come to New York and they look up and they see these super tall buildings and they've heard sort of bits and pieces about them. Maybe they've heard about a huge sale there or a celebrity that lives there or whatever. but I think to a large extent people don't know very much about the real story behind how they ended up on the skyline.

So it's so fascinating. In terms of 57th Street, it's gone through so many different iterations over the years and kind of flirted with luxury once or twice. I mean, if you go all the way back to the 1800s, 57th and 5th was where Edith Wharton's aunt built this, you know, chateau marble, home, and it was the epitome of luxury and, you know, the Vanderbilt and all these very wealthy families followed her. But that was short-lived. And, you know, eventually those people migrated further north as the corridor became more commercial. And then in the 70s, Aristotle Onassis built a very tall condo there called Olympic Tower that was very popular with, you know, foreign buyers, wealthy buyers. It had, you know, multilingual concierges and things. So that was kind of an early

billionaires row. But I would say in terms of the timeline of when the developers of what we know as today's billionaires row were building, 57th Street was sort of a hodgepodge. It was, you know, there were moments of luxury. You know, you have Tiffany at the corner of 57th and 5th. You have Carnegie Hall. You have 9 West 57th, which is the, you know, one of the most expensive office buildings in the world, but it was interspersed with, you know, fur imporiums and diners and, you know, these really cheesy souvenir shops and things. So, you know, over the last 10 years, it's just completely transformed. And I would say that's probably more due to zoning than any particular, you know, appeal that it had, although it does have

views of Central Park, which is obviously a big draw for developers. Well, you mentioned zoning. So let's talk a little bit about that because zoning plays an important role. One of the things you say in the book is almost a third of the city was rezoned when Michael Bloomberg was mayor. So how did zoning lead to the creation of billionaire's row? And what is zoning doing for New York City and sort of real estate in general? Well, the zoning story on billionaires' row is so fascinating. I could just talk about it all day. So part of the reason that this corridor was so appealing for developers was that there are almost no restrictions to building there. So the way, I don't know how much your listeners know about, you know, how pieces of land are coupled together in New York, but basically if you can assemble a string of adjacent properties and you can buy up development rights or what we call in New York air rights, which is the air that's developable above a building. You can add them all up and you get to a number

and that's how high you can build. And once you've done that, there's really on 57th Street nothing that the city can do or community boards or concerned citizens can do to stop you. They don't have any, say, in the design or the height or anything like that. So it was really such an appealing place for developers to come. And, you know, part of that is because of the hodgepodge of cheesy souvenir shops and things, you know, there were all these low-rise buildings that weren't making the best use of their zoning allocation. So developers were coming along and they could just pick off these buildings one by one. and, you know, the owners were thankful that they were getting cash for these properties, whether it was a nonprofit or a religious institution or whatever.

So they were able to come in and pick these off and then just build as high as they wanted. Well, assemblage is almost, you kind of described it in the book as an art form. So you're trying to put together enough land to build something really spectacular. But it's not always quite that straightforward. and it kind of can go really wrong in some cases. So let's talk a little bit about what happens when the idea of assemblage goes wrong. Yeah, I would say if you look at some of the most successful developers in New York City, the big names that you've heard of, part of the reason for their success is that they are master assemblers.

You know, they will spend years, sometimes decades, assembling a perfect, well-located site with good views and a good location. And that means negotiating with a series of different sellers. So there might be 10, 12, 20 buildings that you have to buy in order to assemble this perfect site of your dreams. And so you have to go to them one by one and pick them off. and it gets more difficult the more properties that you assemble because the people at the end know that they have all this leverage you know they see that you've bought everyone else and they're the holdout and they want more money and so it's this very delicate dense where you're trying to not show all your cards you're trying to keep things secret if you've assembled a few properties but you can't get the last ones that you need to move forward and you've you know negotiated until you're blue in the feasts sometimes you just have to let them go and oftentimes that means selling for less than you paid because you probably paid a premium in the first place.

And, you know, you just have to cut your losses and run. I sort of love the characterization of Harry MacLow in the book because I feel like he's someone who just, he gets so attached to his projects. He seems very, very emotional about it. We have this perception that commercial real estate is more about the numbers, residential is, you know, more emotional. But he feels like he falls in love with projects. Is that a bad quality for a developer to have? You are 100% right. I think every developer in this book is 100% emotionally attached to what they're doing.

I think naturally anyone, any human being, if you spend years in pursuit of a goal, you're going to get attached to it because these projects take a very long time. And in terms of billionaires' row especially, these buildings are so significant on the New York skyline that they become wrapped up in these people's legacies. You know, they see this as, you know, permanent mark of themselves on the world, you know, long after they're gone. And so, yeah, Harry was especially involved

in every single aspect of this building at 432 Park. I mean, he was, like, he saw himself as much as the architect, as Raphael Vignoli. He saw it as then, he said he saw it as they were, you know, co-producers of a movie. And then speaking of movies, he, you know, designed this whole trailer that he himself starred in to market the project. So it was very much of him. And I would say, yeah, there is a risk to that in that, you know, maybe you spend too much.

Maybe you, you know, love your project so much that you spend a little bit too much on the finishes or, you know, whenever the market starts to collapse, you hang on to your prices a little bit too hard and you're less willing to negotiate because you, think it's worth so much. So yeah, there is a danger. But at the same time, I think if you look at the New York skyline and the properties that are really, you know, iconic and special and have made it into the public imagination, they're probably all, you know, passion projects of these individual people who fell in love with them. So I think there's positive too. Yeah, that's really interesting because part of the challenges of being a real estate developer, you've got, you've got, you've got, this project, you don't know what the market's going to be when it's finally done. And, you know,

it's a lot of risk. There are easier ways to make money. Do you think it's, is it ego that is part of this? Or what, why are people willing to take this risk? Is it just to make a mark on the skyline? Well, the thing about these projects is that they are so financially complicated. So you have the developer, but you also have lenders and financiers, and they all take on a different level of, you financial burden, financial risk. And there are people who go in and, you know, they maybe have a basis of $2,500 a foot and if, you know, they're projecting that the units are going to sell for $6,000 a foot. So they're pretty safe. But in terms of the maclos of the world and the developers who are really the face of these projects, it is a huge gamble. And a lot of them have

told me over the years that, you know, they kind of compare it to a model that I would say is a little but like venture capital where maybe you do 10 projects, maybe you lose money on five, but two go really big. And it's, you know, it's a golden ticket. So you never know when you're going to hit the market just right and, you know, you're going to be set for the rest of your life. But on top of that, a lot of these developers, you know, in addition to the profits that they'll make from the project, they'll also take development fees, you know, from the overall

general partnership. so they're making some money no matter what, but occasionally they win really big. In terms of winning really big, Gary Burnett from 157, he was one of the ones that kind of hit it really big, at least at the start. One of the factors, I think, that led to the construction of the supertals is, you know, the unit is becoming a store of value for the international elite. I think he referred to 157 as like the world's biggest safety deposit box or something like that. given what we're seeing with less international investing in the U.S., especially from Russia and China, do you think that that is becoming less of a factor in New York luxury real estate?

Yeah, I would say this whole phenomenon of billionaire's row was sort of predicated on the notion that this wave of wealth was being generated overseas, especially, you know, in Russia and in China. And, you know, that really played out for the first few years. There were, you know, all of these privatizations in the oil and gas business in Russia and the 90s and all of these, you know, billionaires were created overnight. I think I read a statistic like somewhere between 2009 and 2012, the number of Russian billionaires tripled overnight. And so, you know, there were all of these deals. There was, you know, one in particular that kind of reset the market at 15th Central Park West where a Russian billionaire bought an $88 million apartment for his daughter. and it was essentially a dorm room for her while she went to Harvard Extension School.

And so suddenly all the developers were thinking, oh, we have to capitalize on this money. And then in China as well, they were having this huge housing bubble. And so the government was cracked down there. People were looking for a safe harbor for their money overseas. And those people just rushed into New York real estate in an unprecedented way. But that's been over for quite a while, I would say. I mean, we started to see Russian money pull back from Manhattan. I would say as early as 2014 when Obama put in all those sanctions because of the provocations in Ukraine.

And then, you know, towards the end of the 2010s, like 2017, 2018, we started to see a bunch of the Chinese money leave as well because the government there under Xi Jinping was putting in restrictions on, you know, moving money. overseas and they wanted to curb all these capital outflows. And so that's been gone for a while. I mean, you still do see some Chinese buyers in the market, but it's nowhere close to what it was in the early days of 157. And I can't imagine that that's going to change anytime soon, given the economic tensions with China and the war in Ukraine. Coming up after the break, Matt Argersinger and Jason Moser return with a couple stocks on their

radar. Stay right here. You're listening to Motley Fool Money. As always, people on the program may have interests 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. I'm Dylan Lewis, joined again in studio by Matt Argusinger and Jason Moser. Guys, we have consolidation in the professional sports industry. The PGA Tour and Liv announced the two golf leagues are teaming up. Jason, the partnership is complicated and still incredibly light on details, but these are the two biggest names in golf coming under one umbrella,

and it will lead to Saudi Arabia's public investment fund, providing billions in funding. As a golfer, how do you feel about this, Jason? There are a lot of strong opinions out there on this these days. And I have to say, I think we're all very shocked by this news and still very much trying to figure out exactly what it all means. But I think what the future ultimately looks like, I don't even think they fully know. But really, I think this all really boils down to two things. and litigation, right? And if you look at it from the biggest picture perspective, your PIF,

right, the public investment fund, they have more money than God, right? They can spend the PGA tour under the table. No questions asked. And so you look at the PGA and you think, all right, well, that's not so good. That puts us in a little bit of a position of weakness. Well, then you take that to the next degree here. Like, PGA's finances are okay today. But with the introduction of this competition from the live tour, this new business model for the PGA tour with elevated events, much higher total purses. And now you've got sponsors that are thinking, well, maybe those dollars are spent better elsewhere if you're not bringing in the most talent for your tournaments. I think they play that forward and see a couple of years down the road. That puts them any

much weaker financial position. And then you add to that never-ending litigation. I mean, this just makes the PGA Tours position look weaker and weaker as the time goes on. And ultimately, with golf, it's uncertain. These are not players who are under-com. contracts, you're paid for your performance. And if you're not performing well, you're S-O-L. So then to get this kind of life-changing money that Liv is offering, I certainly understand why players are going there. All right. Let's move over to stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Matt, you're up first. What are you looking at this week? Although I think he'd look great in one. I don't think I will ever catch Dan Boyd wearing a Hawaiian shirt. But many people

love them. And many people love Tommy Bahama, by the way, which is just one of the many high-end apparel brands owned by Oxford Industries, ticker OXM. They own Tommy Bahama, a bunch of other really well-known brands. Sales up 19% in their first quarter to a new record, 5% on an organic basis. The Tommy Bahama brand, which accounts for almost 60% of revenue. That rose 5%. They saw a higher gross margin. But the CEO did note that their customers are seeing some caution their spending, kind of beginning late in the spring. Traffic to the company's physical and online stores are very strong. But, Sales conversions weren't as strong. So they did slightly reduce sales and earnings guidance for the full year.

Stock dropped pretty sharply this week. It's a company I followed pretty closely. I love it. Trades were just nine times forward earnings with a dividend yield of 2.7 percent, a dividend in which they recently raised 18%. So I love the business. I love the clothes. I kind of love the stock price too. Dan, a question about Oxford Industries. And more importantly, do you own any Hawaiian shirts? I actually do own a couple of Hawaiian shirts. I enjoy wearing them outside. at times. It's nice. It's nice to have a colorful shirt every now and then. So I have kind of a two-pronger here, Matt. One, are Hawaiian shirts. Do they have the lasting impact, fashion impact? Do you think that millennials and zoomers are going to be wearing Hawaiian shirts? And two, how much of Tommy

Bahama is Oxford made up of, if you understand that? I got you. I got you. Yeah. I mean, I think, you know, every generation, once they reach kind of the dad zone of their age, you know, sort of 35 to 50 age, Hawaiian shirt definitely comes into play. And then, yeah, Tommy Bahamu makes up about 57% of Oxford's trailing revenue. So it's definitely their biggest brand. Jason, what do you got on your radar this week? I believe apathy was the word you're looking at over there. You just don't care anymore. You got it. I'm there, by the way. Dan, I am just keeping an eye out on Adobe, ticker is ADBE because they have earnings coming

out on Thursday, June 15th after the market closes. I think we all know Adobe. We interact with in one shape or one way or another, almost every day, probably. I think the big questions with Adobe right now, we know there's this big question mark out there in regard to the Figma acquisition. They did talk about that a little bit during the call. Last quarter, there's just some regulatory concerns they're given the size of the acquisition. Management continues to believe they're on track for a close by the end of this year, so we'll get some more language there.

And I think we'll hear a good bit about AI from Adobe. I mean, I think it actually matters when it comes to this business, right? CEO, Mr. Narayan, says AI is going to boost the usage of Adobe's products like Photoshop, Illustrator, Premiere Pro. So, yeah, interested in the report there. Dan, as a man of the multimedia arts, a question about Adobe. I mean, we use Adobe here at The Motley Fool to produce pretty much all of our stuff. They make good products. Not really a question.

Excellent. Just singing their praise. Just a ringing endorsement, really. Shareholder, I appreciate that, Dan. I do too. All right, Dan, which company are you putting on your watch list? I think I'm going Adobe, Dylan. That makes a lot of sense. Can't blame me on that one. That's going to do it for this week's Motleyful Money radio show.

The show is mixed by Dan Boyd. I'm Dylan Lewis. Thank you for listening. We'll see you next time.