Motley Fool Money - Stock Market Jitters

Episode Date: February 9, 2018

The market has another wild week. What does the decline mean for investors? Our analysts weigh in on the market sell-off, discuss tech trends they’re watching, and share some stocks on their radar. Plus, we revisit our interview with Steve James, Academy Award-nominated director of Abacus: Small Enough to Jail. Thanks to Audible for supporting Motley Fool Money. Get a free audiobook with a free 30-day trial at audible.com/fool or text FOOL to 500-500. Learn more about your ad choices. Visit megaphone.fm/adchoices

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That's why they call it money. The best they bill. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Full Money radio show. I'm Chris Hill. I'm joining me in studio this week from Million Dollar portfolio, Jason Moser and Matt Argusinger, and from Hidden Gems, Abby Mullen. Thanks for being here. Hey. Chris.

We'll dig into the Dow's recent drop. We will dip into the Fool mailbag, and as always, we'll give an inside look at the stocks on our radar. But we are taping early this week because we are heading out to San Francisco, California, for an event with a couple hundred members of our Motley Fool One service. So, we will not be digging into the latest company news like we usually do. But let's start with some general market news. Let me take you back to last Friday afternoon, February 2nd. We finished taping Motley Fool Money.

We come out of the studio, Matt, and the market's falling. That continues on Monday. And before you know it, you look over the past week or so, market down 5%. And there are some people out there starting to freak out a little bit. Yeah, it happens really fast. You know, we had this wonderful January where we're up, I think the market was up 6%. Coming off a year where the market was up over 20 percent, we're thinking, man, the times are golden.

Well, that in about two days' time, maybe three days' time, that gain was kind of wiped out. And part of this, Jason, is you've got, let's face it, it's a combination of factors. You've got the financial media, which is covering this story as they do. You've got some perma bears out there, people who have over the last, it seems like almost a decade, they've been saying, this is going to come to an end. So they're just banging that drum even louder. But I think it's reasonable for people, even long-term focused investors who are thinking, yeah, I'd like to buy on the dips. On a gut level, it's still a little scary.

How happy do you think permabairs are just generally? I mean, like, everything that goes on is like a last half empty, right? This guys put too much cream in my coffee. You know, pizza doesn't have enough cheese. Whatever it is, never good enough. I think that, for me, when you see situations like this and see the headlines and the financial media, and it seems like a lot of these headlines sort of center around the, okay, what are you doing now? How are you changing your strategy? And, I mean, it seems a little bit absurd to base changing a strategy on one day's activity. And so I think usually what that results in is hasty, poor decision-making. And so we tend to dismiss changing

strategies and kind of think about playing the long game, so to speak. And I think it's just important to remember that as individual investors, there are a lot of forces at play in the stock market and on Wall Street that we have zero control over. And so to try to even play that game, I think it's fruitless. I mean, we play our game and we talk about it all the time, focusing on business-centric investing with, you know, shining a light on leadership, being patient, taking the long view. I think those are the ways really to make money in the market over a long periods of time, it definitely works. And I think when you can take that approach from the very start, it makes periods like this a lot easier to bear.

And to that point, Abby, this is one of those times. Certainly anytime the market is dropping or any time any company is stumbling a little bit, this is one of those times where it feels like leadership is even a little bit more important than it usually is. Yeah. I mean, I think this goes back to Jason's point. I think, you know, we talk around the office a lot about how market pullbacks like this are kind of like stocks going on sale, but other aspects of our life where we like sales. Everyone gets sort of nervous here, but I think if you have the right long-term strategy and you're really thinking and building that out for five or ten years, this is really more of an opportunistic moment than something to panic about.

I totally agree. I mean, if you're a foolish investor and we call ourselves foolish investors, we kind of have, when there are times like this, we kind of have an extra skip in our step as we come to work because these are the times that create the opportunities that we're often waiting for and prepared for. And I hope those are listening today probably have some excess cash, probably have a watch list or a list of stocks they've been waiting to buy on a dip, and maybe this is one of those times. So to that point, let's just go around the table. Jason, I'll start with you. What is a stock that you look at right now that you think to yourself, boy, if this thing drops 20

percent, if it sort of gets swept up in the tide, and for no necessarily underlying business reasons, this is a stock that's on sale, 20 percent lower at some point in the next few weeks. I'm going to take a long, hard look at adding some shares. Yep, my general philosophy to that is I'm looking for the higher quality businesses that rarely ever see those kinds of drops, right? I mean, you can see those sort of growth names that'll fall 20% in any given period of time. But the real high-quality businesses, you rarely see that kind of a drop in the stock. So one that just comes to mind, Visa plays into that big long-term trend in electronic payments, going more towards cashless, huge global market opportunity. Obviously, the leader out there as far as the number of cards out there, just a big name

that you rarely see on sale. But if I saw that thing tank 20 percent, I don't even think I'd have to think long and hard about it, Chris. I'd be backing the truck up. Abby, what about you? You could pretty much just take that entire segment of everything Jason said, but I actually went with MasterCard, but pretty much for the same reasons. I think you look for high-quality businesses that don't really fall a lot.

This is one I like to think about sometimes adding to your portfolio stocks that you could put in a drawer for 10 years and never think about and be pretty confident that they'd be in a better situation five or 10 years down the road. And I think MasterCard is on that same track as Visa. The War on Cash is alive and well in this room. Maddie, what about you? I can't argue with those. But one that's been on my personal watch list, it's been on our watch list in a million dollar portfolio for a while now, is a company called Atlassian. The tickers T-E-A-M. It's an Australian company, software company. They make collaboration tools

for businesses from small companies to Fortune 500 companies. A lot of things we're we work with every day, maybe at our jobs like Trello, for example, or Jira. These are things that are becoming more common. You have a company that's run by founders still. It generates lots of cash. They basically took this from a startup to 700 million in revenue over the last 10 years. It's just, I've never liked the price of the stock, which trades for about 15 times revenue. So this is one where if it dropped 20 percent, I'd be thrilled to finally buy kind of an initial position. Okay, two household names and the one Maddie talked about. As I said, we're heading to Sanford

Cisco, we've got an all-day investing event where we're really excited about. And I'm personally excited that the four of us are going to be on stage in the morning to do sort of the first panel discussion about tech trends. And there are a lot of trends out there, Jason. But in terms of tech trends that we think provide not just one idea, but multiple ideas for investors, if you could give sort of a sneak preview for listeners about what you're going to be talking about at the event? Sure. As the Internet has changed virtually every market out there, health care is certainly not immune, and I think its technology is certainly helping health care in a lot of areas.

And so I'm going to be talking about telehealth and virtual health. And long-time listeners know I've talked a lot about Teledoc. And that's actually not the stock I'm going to mention right now. Another name that I feel like is playing into this trend in Teledoc. Health and Virtual Health Care is Massimo, a company I bought back for my Rising Stars portfolio here in 2011, focused on the market of pulse oxymetry, which is not the name of a band, but it is rather a non-invasive method of measuring the oxygen levels in the blood. And whenever you go to the hospital, that's one of the things they have to do, is keep a track of how your blood is fearing during surgery, whatever it may be, maintain healthy

levels of oxygen. And they came up with a new device called the RAD-97. This has actually gotten clearance. That also sounds like a band, by the way. It's pretty radical. That does, actually. Yeah, but this is something that has just gotten clearance actually to go to the home. And so it is helping patients once they're dismissed from the hospital. It allows their physicians to keep a track of all those vitals while they're at home.

So it's helping them to get out of the hospital sooner and recover more quickly in the comfort of their own home. Abby, what about you? What's a tech trend that you're focused on? Yeah. So my topic is white-collar job automation. I think in the past, we've kind of widely accepted that blue-collar jobs are going to be affected by automation. But now we have machine learning, and this is growing at a rapid pace. And I think this is going to be an area where it may be onsets quickly and pretty substantially.

A 2017 PWC study found that 38% of American jobs are at risk of automation by the early 2030s, which is pretty much just around the corner. So I think this topic's interesting, both historically as well as looking into the future. But I guess for going forward, the opportunity I focused on is Redfin, which is a technology-powered residential real estate brokerage. They operate in about 80 markets throughout the U.S. So they are on a mission to provide a completely digital closing process. Not there totally yet, but that's their vision long term. And they save both buyers and sellers' money through efficiency gains, speed and quality.

I think it's an interesting opportunity going forward. Maddie? So, in Las Vegas every year, there's about $5 billion that's bet on sports. I like this already. All right. Well, Chris, if you had to guess, how much you think, how much on sports betting across the country illegally is bet on sports every year? If $5 billion is in Vegas, wherever else. I'm going to go 20X.

I'm going to go 100. Yeah, you're about right. Anywhere from $100 billion on the low end to $400 billion on the high end is bet illegally or $1.00,000. kind of in shadow markets on sports everywhere in the country each year. And so, you know, as a degenerate gambler like myself, I'm excited. No, I'm not. That's a joke. But there is this tipping point I think that we're going to hit.

And it starts with a Supreme Court decision potentially this summer. And you had NBA Commissioner Adam Silver talking about it recently about the NBA sort of warming up to online betting. So I think the rise of betting, sports betting maybe first across the country is a real trend. The reason I think it's a tech trend is because I don't think it's necessarily where one of the major casino companies is going to be the winner, you know, is going to lead this trend. It's really going to be technology that leads this trend. I think if you look at a company, some companies that aren't public like Bavada or Fanddulo or Draft Kings, the companies that have built big network effects on sports betting. And not just sports betting, but sort of prediction markets, you know, being able to bet on anything if my train is going to be on time today.

I mean, it's a fascinating way that I think we're going to be able to monetize all different kinds of bets. in kind of every market, every field. And so that's what I'll be talking about in San Francisco. Coming up, we'll dip into the full mailbag. Stay right here. You're listening to Motley Full Money. Hey, if you're looking to get a mortgage, here are a couple of tips. For one thing, boost your credit score before applying. The better your credit score, the less your loan is going to cost you.

Now, here's another tip. Check out Rocket Mortgage. Getting a mortgage or refinancing your existing home loan is not a walk in the park. And when you're making a big financial decision like that, you want to be as confident as you are in your day-to-day life. And Rocket Mortgage gives you that same level of confidence when it comes to buying a home or refinancing your existing home loan. It's simple. Rocket Mortgage allows you to fully understand all the details and be confident you're getting the right mortgage for you. To get started, go to Rocket Mortgage.com slash fool. 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.

Don't buy ourselves stocks based solely on what you hear. Welcome back to Motley Fool Money, Chris Hill, here in studio with Jason Moser, Matt Argusinger, and Abby Malin. You can get our show every week on Apple Podcast, Stitcher, Spotify, and radio stations across America. And I'm happy to welcome a brand new affiliate to the Motley Fool Money family. Money Radio AM 1450 and FM 107.1 in Eerie. All right. Welcome. Welcome to the family. Our email address is Radio at Fool.com. From Michael Reed. What are your thoughts? on Visa's latest quarter. Let me turn to the man who talked about Visa early in the

shelf. First quarter just got reported last week by Visa. We had earnings paloosa last week on Motley Full Money, and we didn't even get to it. You looked at the quarter. How was it? I think it's exactly the kind of quarter that you want to see from a company like this. I mean, it's obviously very big business, well-known. So not a lot of surprises, but the beauty of a business like Visa is they can grow the top line modestly and bring that down to the bottom line in a big way. So you saw 20 plus percent earnings growth. The payment volume was up 10 percent, and they reaffirmed guidance for the full year, which is always encouraging. Since 2013, they brought their share

account down about 11 percent, and that's going to be something that continues. Certainly, with this new tax legislation, I think a lot of share repurchases are going to be taking place during the next few years. But it's one that I own, one that we still have on the watch list in MDP that we really like. If we can see that stock taking a little bit of a haircut there, we'd be looking very closely at it. One more question from Kaelani Burgos in St. Paul, Minnesota. I'm looking into investing in the marijuana industry. Usually I would never consider penny stocks, but the growing funding for this sector and the

fact that it is somewhat of an emerging industry interests me in its potential for growth. What are your thoughts? It's a great question, Maddie. It's one we get a lot because I think there are a lot of people in the U.S. who just look at, even just at the ballot box, how more states. are legalizing various aspects and think, this is a trend. How do I invest in it? Right. It's kind of like my sports betting idea. It's like eventually all the things we wanted to do when we were a lot younger, we're going to be able to do them now. It's incredible. No, the problem with the marijuana stocks is exactly what Kaylani said. It's this pink sheet territory now where what I think is going to be the tipping point for marijuana stocks is when a marijuana dispensary or supplier can actually be banked.

The problem is banks in the country are not allowed to have accounts for these marijuana stocks. want to businesses. And so it's a cash business, which keeps it sort of off the periphery of normal markets, normal credit markets and investor landscapes. I just think that's going to be the point. You have to wait for that to happen. And then you'll be able to really invest and be confident. Isn't that what Bitcoin's for? It's all that on the table stuff? I mean, like the gambling and weed and stuff like that. I mean, yeah. Talk about crypto. Before we get to what you're talking about, Maddie, aren't we more likely to see the biopharmacist

industrial industry, get more involved here. I feel like that's going to be the first marker that we see and then we get to sort of what you're talking about. That might be the way to go, because I think you're right in terms of creating versions of the effects of marijuana, that's probably the place to look first. All right, let's get to the stocks on our radar this week. And our man behind the glass, Steve Brodow will hit you with a question. Abby Malin, you're up first. What are you looking at this week? I started reading about last week's news of Berkshire Hathaway, J.P. Morgan Chase, and

Amazon teaming up to form an independent health care company for their U.S. employees. For a little bit of scale, that was 1.2 million employees for those collective companies, which is about 0.37 percent of the population plus their families. And this caused the sell-off across the for-profit managed healthcare industry. So I was specifically looking at United Healthcare Group. They serve one in five Americans, and it's been a pretty spectacular performer over the past couple of years. And I think this is going to be one to watch as it continues to play out for a while. Because I think in the next three to five years, depending on what these companies are able to do, I think it could be a pretty different

business in three to five years. And the ticker simple? UNH. UNHH. Steve, question about United Healthcare Group? So we use United here at the Fool. And I can't tell if these insurance companies want us to be part of their business or don't. Because it seems like companies change insurers so frequently. Does United want a long-term relationship with its clients or does it not? I mean, I think for stability, I think recurring customers is always beneficial.

I think it is a competitive industry, and I don't think that there's a shortage of demand for them. So maybe perhaps the economics of that aren't always in the consumer's favor. But I think this could maybe be a tipping point for that. Jason Moser, what are you looking at this week? If we had to sum up 2017 for Under Armour in one word, I would go with lugubrious. And I would also accept wretched, okay? Lugubri is or wretched. Either way, it just was not good. But Under Armour, ticker UA, earnings are coming out on the morning of the 13th of February.

And this is going to need to be – this needs to be the year where they convince us that they are back on path here. I think that there were some serious, questionable uses of capital and some not-so-good management decisions, followed by a very difficult North American wholesale retail environment. But this needs to be there. The plank gets this thing turned back around. If it's not, then we're going to have to have a serious discussion about what we want to do with this thing in a million-dollar portfolio. Because we have it on hold right now, and we need to see reasons to take it off or unload it altogether. Steve, question about Under Armour?

What does the future hold? Is it wearables? Is it some sort of fitness tracking? Is it some other apparel? What's out there for these folks? Well, Steve, I mean, as you can see, I'm wearing Under Armour pants and an Under Armour. or pullovers. I'm just going to go with wearables. In the biggest picture form of the word, wearables.

But apparel? Yeah. Wearable. Wearable apparel. Matt Argusinger, what are you looking at? Going from one we all know, Starbucks, ticker SBUX. I think everyone's talking about the lower comps that we've seen system-wide. But I just look at the China business where comps are up 6 percent. Revenue is up 30 percent. You now have a stock that trades for less than 25 times forward earnings. Unheard of in Starbucks. It's always been hard to have.

get at that valuation. Dividend is now over 2%. This just feels like one of those tightly coiled springs that's going to spring higher very soon. Steve, question about Starbucks? So I rarely drink coffee. Should I buy Starbucks if I don't use the product? I mean, is that something I should think about? I just don't like coffee. Well, you don't, but everyone in this room probably is addicted to it on a daily basis. I think that's a good comparison to make a decision. What do you want to add your watch list, Steve? I think I might take a look at United Healthcare. All right. It's a healthy choice. Jason Moser, Matt Argusinger. Thanks for being here. Thanks, Chris. We're just a few weeks away from the Academy Awards. One of the nominees for

Best Documentary is acclaimed film director Steve James for his film, Abacus, Small Enough to Jail. With the Academy Awards just a few weeks away, we're going to revisit our interview with Steve James from last year. That's next. This is Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill. In the wake of the 2008 financial crisis, only one bank in the United States was charged with mortgage fraud. It was not one of the big Wall Street banks, whose names are commonplace for investors. Instead, charges were brought against Abacus Federal Savings, the 2,651st largest bank in America. Abacus serves the immigrant community in Chinatown in New York City. The charges and subsequent trial are the subject of the new documentary film, Abacus, small enough to jail.

And it is the latest film from award-winning director, Steve James, who joins me now from Chicago. Steve, thank you so much for being here. here? Great to be here. I think, you know what, they just dropped a notch this year. They're down to the 2652nd. We're going to get to the bank size in a minute, but that is one of only a large number of amazing things in this movie. I mean, this is a legal battle, but it really is the story of Thomas Sung, a Chinese immigrant with a wife and four grown daughters. Thomas Sung started advocate's federal savings. In many ways, it's him and his family that are on trial here, and I'm curious, how did you come to meet Thomas Sung?

Yeah, well, my producer, one of my producers on this film, Mark Mitten, who worked with me on other stuff, just happened to be friends with the family going back 10 years. And Mark called me one day right before the trial was beginning and said, you know, this family I know New York, runs a bank in Chinatown. It's got this crazy trial about the start. And as he explained it all, it just sounded too crazy to be true. And he said, what do you think? I think they would be gamed for us to come and sort of document what they're going through

for this trial. And so we went and did it. If you think back, and I suppose there are remnants of this feeling today, you know, almost a decade after the financial crisis. crisis, but certainly you go back to 2010, 2011, 2012. There really was a drumbeat for someone to pay for what had happened. And largely that was pointed at the big Wall Street banks. I'm curious since you spent time with the district attorney in New York City, you spent time with the prosecution team. Did you get any sense when you were filming this?

that there was almost an over-eagerness to shine a spotlight on this case. Because that's one of the more interesting part of the films for me is just how big a spotlight the DA decided to shine on this case. And I'm wondering if on some level the DA's office said, you know what? It doesn't matter that this is a tiny bank. We're going to make someone finally pay. Yeah, I think you're right. I mean, you know, when Cyrus Fanch Jr., the DA of Manhattan, announced the indictments,

he said that this was the first prosecution of a bank by their office since 1991. And he went on to say that this bank, that abacus that they were indicting, was connected to the mortgage fraud crisis of 2008. And the thing is, when you look at this and the film does, What went on at Abacus had nothing to do with what it went on in 2008. And, you know, as you learn in the film early on, is that Abacus discovered some low-level, very petty fraud, a couple of their branches, and they dealt with it and reported it.

So in so many ways, it's the opposite of the big bank. So, you know, I think Vance would tell you, when I interviewed him, you know, he just said, look, we saw fraud and we went after it. There was no other calculation going on here in terms of what dictated our, our decision to bring this to trial. But I find that hard to believe. When you look at the way in which the indictments were announced where they chained together low-level bank employees,

the current and former employees, and paraded them down the hall in front of the media, and he made a big statement of prosecuting this bank in connection with mortgage fraud crisis, it sure seems pretty clear that they were looking for a trophy here. Now, as you said, it's clear that things went wrong at Abacus. They self-reported. They went through the process the way they were supposed to.

But one of the things that comes to light is that in some ways, this is a crime without a victim. Yeah. That one of the people you interviewed sort of compares this to the financial equivalent of jaywalking. Is jaywalking illegal? Well, technically, yes, it is. But is that a great use of resources?

And again, it goes to the question of, you know, boy, they really seem to dig in here on the DA's side. And I'm wondering if they had any sense, because this is one of the, for me, for lack of a better word, one of the more joyful parts of the movie is Thomas Sung's family and in particular his adult daughters, three of whom are lawyers. Like, I'm just wondering, like, did anyone at the DA's office realize what they were going to? up against because at least some of them had to think, well, this is open and shut. This is going to be easy. Yeah, I think, and again, they won't admit this, you know. I mean, I talked to Polly Greenberg, who was the head of economic crimes in the DA's office, who oversaw the case and Vance, as

mentioned earlier. They weren't going to admit this, but I think that they really thought that the bank would fold and not take this to trial, that they would plead guilty to a felony, which, you know, and that's another way in which this differs from the big banks. The DA's office did offer abacus the opportunity to plead and get a fine, but they insisted that they plead to a felony. You know, none of the big banks got that deal. The big banks were offered fines in lieu of any kind of right conviction, which is another way of telling you that they wanted this conviction,

that that was what was important, you know, to have to make the mark. But yeah, it's, you know, it's just, it's just, it's kind of boggles the mind when you think about what was going on at Abacus and the DA's persistence here because they started looking into this back in 2010. They brought the indictment in 2012. That trial happened, which we covered in the film in 2015. This was a five-year ordeal that the Sung family had to go through. And as you say, they really are the heart and soul of this film. They are this incredible family. They're courageous. They're determined.

And they're also very funny. I think one of the things that surprises people when they see the film is how much humor there is in this film. Because the family has just such a remarkable personality. It's really fantastic. You're absolutely right. I'm glad you mentioned the humor because it's interesting to, see that even though these are grown women dealing with their, you know, 75 to 80-year-old father throughout the film, the dynamics of childhood still play out. You know, the youngest daughter,

even though she's a lawyer and she's an adult woman, there are scenes where I just, and maybe it's because I'm the youngest of four in my family, but I just found myself both laughing at and sympathizing with her where she's talking and nobody's listening to her. Yes, exactly. And And, you know, when we started the film, we hadn't met Mrs. Sung yet, Thomas's wife. And when she finally, you know, she wasn't sure she wanted to be in the film because this whole situation was so distressing for all of them. And she felt like she had really lost face, you know, which is a very important thing in Chinese community. But when she finally consented to be in the film, then she, you know, she pretty much steals the movie with her sense of humor. You mentioned the five years that this takes place over from the time that the investigation

begins through the trial. Over that five-year period, the bank is still making loans. I think somewhere in the neighborhood of 3,000 loans and only nine default in that period. I mean, at any point, did someone in the DA's office acknowledge, you know what? maybe things would be better off in our overall financial system if the big banks on Wall Street operated on the same level that Abacus is. Absolutely. I mean, we didn't put this particular fact in the film, but Abacus' default rate on loans is 1.20th of the national average for banks.

I mean, they know how to make loans, you know. But the DA's office decided because there was no real default to focus on in this trial, they decided that the real victim in this trial was to be Fannie Mae. And Abacus did and now, again, does a lot of business with Fannie Mae because of the nature of a lot of the loans they do, which are two people of more limited economic means. and so a lot of their loans end up at Fannie Mae, and Fannie Mae, the alleged victim, couldn't wait really for this trial to be over so they could get back in business with Abacus because they were such good clients for them. So, I mean, you know, if you made this up and put it in a fiction film, people would sort of laugh and say, oh, come on, you know. That's not plausible, but, you know, it did happen.

And one of the things that was so remarkable to me and our team on this is, is, that this is a story that no one was really reporting on in the mainstream media at all, including the Venerable New York Times. They did exactly two articles on the entire trial,

the spectacle of the indictment with the employees chained together and the verdict, which, you know, one of the pleasures I think of watching this film is that most people will come to it have no idea

about this case and what happened. And I'm just so glad that we had the opportunity to tell us. Coming up, we'll talk with Steve about hoop dreams and the business of filmmaking. This is Motley Fool Money. Thanks to Audible for sporting this week's episode of Motley Fool Money. For our dozens of listeners, Audible is offering a free audiobook with a 30-day free trial. If you want to listen to it, Audible has it. Just go to audible.com slash fool or text the word fool to 500, 500, and you can browse their unmatched selection of audio content.

Download a free title and start listening. It is. that easy. Audible also has exclusives and original audio shows. I'm currently working my way through Vacation Land, True Stories from Painful Beaches by John Hodgman, and as a proud son of Maine, I know all about the painful beaches in my home state. Audible also has the Send This Book feature. You can share a book from your library with anyone, and if it's their first time accepting a book through this feature, they can listen for free. So get a free audio book with a 30-day free trial at audible.com slash fool or text the word fool to 500. That's A-U-D-I-B-L-E-L-com slash F-O-O-L or text the word fool to 500 500. Welcome back to Motley Full Money, Chris Hill

here in the studio talking with Steve James, director of the new documentary, Abacus, small enough to jail. Film consumption has gotten easier over the last 25 years with DVD players and then the rise of streaming video, Netflix and Amazon Prime and Hulu and all that sort of thing. What is filmmaking like over the last 25 years? Has your job gotten easier? Is it harder? Is it about the same? Well, I mean, it's gotten easier to make films than when I started out. And some of that is a function of, you know, when anybody is starting out in, you know, in a field and certainly the field of film, when you don't have much of a track record, it's, you know, it's hard to get yourself established.

it's hard to find funding. So that's changed for me. I'm one of those fortunate people, independent documentary filmmakers who have had pretty good luck with funding, although I've raised money in every conceivable way imaginable over the years. So in that regard, it's easier. And it's also, from a technological standpoint, it's easier because when I started out, you know, the technology wasn't so affordable. And if you didn't have money, you had to have someone who had that technology, the expensive cameras, the edit suites and such to help you make it even if you had no money. So a lot of that's changed, which is why there's an explosion, I think, of filmmaking that's going on in this country, both documentary and

fiction filmmaking. So, you know, so in a lot of ways, yes, for me personally it's gotten easier. I think for the industry as a whole, there are aspects about it that is that, you know, that are definitely easier, but because so many more people are competing for the dollars and for the screens and the opportunities to show your work, it's hard. You know, it's still very hard because there's just so many more people trying to do it. You're probably best known for hoop dreams, but you've done other sports films. No crossover, the trial of Alan Iverson, the film Head Games, which is about head-related injuries in sports. And while you do capture the drama within the games themselves, so much of

your films with regards to sports are about the off-the-field stuff, the relationships between coaches and players, parents and their kids, teammates, the relationship between teams and communities. I'm curious when you are not working on those types of films, what kind of a sports fan are you? Like, do you actually enjoy sports? Do you just kick back and enjoy watching a Cubs game, or does the work that you've done over the last 25 years make you go, you know what, I'm going to spend my time, my leisure time doing something else? Well, that's a really good question. You know, I am still a sports fan, but the impact of doing the films I've done has certainly had an impact on my fandom, if you will. The most acute example,

I can think of is when I did head games, the film that looked into the concussion crisis in sports. You know, I've always been a football fan who really enjoyed watching football, but it definitely impacted my enjoyment of that game in just this past football season. And it wasn't totally due to these issues, but I didn't watch a single football game last year except the Super Bowl, which I was really sorry I watched. So it's, you know, I have a hard time watching football these days without thinking about just how dangerous the sport it is,

and it's definitely impacted me. When it comes to basketball, which is always my first love and my most still remains the sport I enjoy watching the most. I just don't watch as much anymore because I don't have the time. It takes a lot of time to be a sports fan. And I just don't have the time, and so I tend to be much more selective about when I tune in, and it tends to be, like right now with the NBA playoffs, I'm watching now. Because, you know, to spend the time watching an NBA season just, you know, kind of a way.

I'd much rather read the sports page, and in a matter of minutes, I get the gist of what's going on, and I don't have to spend. One of the things that I think Hoop Dreams did for a lot of people, not just basketball fans, but I think just viewers in general did, was it, it sort of shined a light on not just the off-the-court stuff, but in particular the sometimes unseemly world of recruiting when it comes to high school and colleges. And I'm curious if you think that has gotten better since you made that movie, or if it's the same or even worse. Oh, I think it's way more of a business now than when we made hoop dreams. I think when we made

hoop dreams, it was a bit of an eye-op-op-op-op-op-dreams. uh... for a lot of people including me and my colleagues on the film uh... as much as we had played and enjoyed basketball we we'd never been part of that uh... that business aspect of it so yeah back then it was an eye-opening uh... revelation you could say but uh... with the rise of the shoe company a u team sponsor teams

uh... and the fact that colleges are now recruiting players as young as freshman in high school and getting at least oral commitments from players as freshmen in high school. They're not binding, but still. It's, I mean, it is exploded and it is, I mean, it makes the time when we were documenting it and Hoot Dreams look like a pretty Pollyanna time. Last question, and then I'll let you go. Your previous documentary was entitled Life itself. It's about the life and work of Roger Ebert, the late film critic. I'm curious when you think about Roger Ebert now, what comes to mind?

I'm sure you have any number of memories, but just whenever he pops into your head, what do you think of? You know, I think about him. What I think about is, you know, as he recedes, you know, at least in terms of the fact that he passed away back in 2014, he recedes from public view clearly, although he has a very robust website. that his wife, Chaz Ebert, has maintained. You know, there's a real loss there. There's a loss in the world of film because he was, you know,

such a remarkable critic, a critic who possessed that ability to write brilliantly, yet in a populous vein that anybody could read and appreciate, no matter their level of sophistication about film. His love of film, and he kind of symbolized in a way, you know, I think he symbolized film when it was the most sort of powerful and meaningful, at least in the broadest sense, art form, you know, going.

And that may be changing now. I think television has, I think there's real question about the future of art cinema, you know, especially in this country. So his passing also marks a passing of a torch in a way that that's kind of unforestation. fortunate. And then the other thing about Roger is, is that he, he, he wasn't just a film critic. He, he was a true social commentator, both in his reviews and apart from his reviews. And I think we just, we missed that voice. Abacus, small enough to jail, opens next week in New York City and rolls out nationwide after that.

Steve James, such a pleasure talking. Thank you so much. Real pleasure talking to you. That's going to do it for this week's show. Our engineer is Steve Broido. Our producer is Matt career. I'm Chris Hill. Thanks for listening, and we'll see you next week.