Motley Fool Money - The Cointucky Derby

Episode Date: January 19, 2024

Big-time institutions are jumping into newly-approved Bitcoin spot ETFs, and that could create trouble for some of the bigger players in crypto. (00:21) Jason Moser and Matt Argersinger discuss: - Why there’s so much cash sitting on the sidelines right now, and why it may or may not work back into the market. - Blackrock and Fidelity getting in on the newly available Bitcoin spot ETFs, and how they could create problems for Coinbase. - Earnings updates from industry leaders Prologis, Taiwan Semiconductor, Morgan Stanley and Goldman Sachs. (19:11) Best-selling Author Dan Pink takes ideas from his books and applies them to the modern topics of AI, employee motivation, and what the modern office is really for in an increasingly hybrid world. (32:12) Jason and Matt break down two stocks on their radar: Globus Medical and RPM International. Stocks discussed: IBIT, FBTC, COIN, PYPL, PLD, TSMC, MS, GS, RPM, GMED Host: Dylan Lewis Guests: Jason Moser, Matt Argersinger, Dan Pink, Shannon Jones Engineers: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

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The Ruby is on. Motley Fool Money starts now. That's why they call it money. The best thing. Cool global headquarters. This is Motley Fool Money radio show. I'm Dylan Lewis. Joining me over the airwaves, Motley Fool senior analysts, Matt Argusinger, and Jason Moser. Gentlemen, great to have you both here. Ady, Haddy, Haddy. Dylan. We've got updates on the state of investment banking, some curious snacks in footlong form,

and of course, stocks on our radar. But we are kicking off today with a stat that should have investors' attention. Jason, according to the Wall Street Journal, there is $8.8.8 trillion with AT trillion sitting in money market funds, CDs, and other variants of cash. Why should we be watching this? Well, I mean, I think we've been talking about over the past, it feels like I guess the past 15 years, really sort of this idea that with interest rates, always just running so low, that the only real option out there for investors looking to make money was in the stock market, I mean, that sort of played out in market valuations through the years.

There just weren't there weren't that many alternatives. And now that's changed a little bit with the interest rate policy, doing what it's done. I mean, what we're seeing now, obviously, mortgage rates through the roof. But the upside of there is that it's giving investors another alternative, right? For a lower risk, a little bit more certainty in regard to returns there. And so these money market funds start to look more attractive. And you can see why funds would flow in there, at least temporarily, or or on a shorter-term basis. And that's fine. I think a lot of people maybe look at investing in

sort of this monolith. It's like, these are your investing dollars and you're putting it all towards this goal, which is usually retirement, and the way you do that is investing in the stock market. But the reality of this situation is that we all have a lot of different things we're trying to do with our money over the course of our lives. And so different strategies may come into play. But generally speaking, we, of course, like taking that long-term view, hanging on to great businesses for long stretches of time. And I think, you know, when I see things like this, it makes me think about the dangers of getting in and out of the market based on something like an interest rate policy, right? It's okay if you're looking for a place to park your money. But all in all, if you're looking to make meaningful wealth, you need to stay invested, right?

And so, I mean, there's data out there that, Hartford Funds and Morningstar data out there. If you miss the market's 10 best days over the past 30 years, your returns would have been cut in half and missing the best 30 days, your returns would have been reduced by 83%. So, you know, it reminds me that old Seinfeld episode, the car reservation bit. You remember that? You got to be able to hold the investments. Don't know, right? That's the key.

Anybody can just buy them, right? I'm buying them, here, buying them. Everybody's by you got to hold them. That's where the real, that's where the returns come from. Yeah, and I think a lot of the point, maybe the hidden point of the Wall Street Journal article and what investors are thinking is this adds a bit of a hedge to the market, right? if there's all this cash on the sidelines at some point, especially when rates fall, all this cash is going to run back in and it kind of supports the stock market.

I actually think it's going to be stickier this time around. Remember, two big forces here. Rates were near zero for so long that you have a generation of investors, especially younger investors that have never earned anything on their savings. I mean, this is like a new thing, right? And then I think second, you've had the 2022 bear market, which was really hard. I think that's still fresh in a lot of investors' minds, particularly those in the older side, maybe who are close to retirement or in retirement, are they necessarily eager to jump back

in the market? I think it's going to take a lot to get those investors off the sidelines. I think you'd almost have to see rates fall below 3%, which would be quite a drop from here. So it's a huge amount of cash, but I don't think we should look at it as some kind of put on the market or a hedge on a sharp fall on the market. I don't think that money comes rushing back in. I don't think it's ever safe to bet against the inertia of doing nothing. I think that it's pretty It's debankable that people are very happy to stay exactly where they are sometimes, but it's something worth paying attention to. If you're watching Money Flows, you may have also noticed that there are a lot of funds heading

into the newly approved Bitcoin ETFs this month. Early in January, the SEC formally approved, while not actually endorsing, or in any way endorsing, I should say, Bitcoin spot ETFs, and some of the major firms have been quick to capitalize on those with what some folks are calling the CoinTucky Derby. Matt, BlackRock's Bitcoin, ETF, IBIT already has $1 billion in inflows. Fidelity's FBT is close behind. Seems like this is good news for the big firms, probably good news for people that are eager to see more crypto adoption. Do you see any losers with this news? I actually do, Dylan. I think, you know, I don't know what this does to the price of Bitcoin long term,

but I can tell you what these ETFs, who these ETFs don't help. and that is exchanges or trading platforms like Coinbase or Robin Hood. These companies, especially Coinbase, they get some fees for being a custodian of Bitcoin for these ETS. But now that Bitcoin can be passively bought and held by investors and especially institutions, I think it's going to hurt the trading volumes and margins for these companies. I'm not surprised. If you look at Coinbase, the stock is down almost 25%. Since these ETF started trading about a week ago, it was kind of the,

ultimate sell on the new signal. And I think there's more downside to come. Remember, Coinbase and Robin Hood, they really make a lot of their trading based on the spreads for Bitcoin and other digital currencies. If I can now, especially with BlackRock and Fidelity, invest and hold Bitcoin very cheaply over time, I don't need to trade it. And I just think that could be a problem for these exchanges. So I want to talk about this without necessarily having the Bitcoin thesis debate. We're going to kind of put that on the side for a second. Just knowing that these are now exchange traded securities, is there anything in particular you think investors ought to be paying attention to if they are considering these vehicles?

Well, again, I just think they're available. Obviously, we pay attention to the fees, and they're very low in the case of Black Rock and Fidelity, and that's what you want. I mean, previously, I think, to try to have an investment in Bitcoin, you know, you're looking at, you know, fees over 1%, 1.5%. They were futures trade. There were a lot of hidden costs and kind of big spreads in trading. Now that you can do this, great. But I also would caution against making these ETFs, you know, any major part of your portfolio, right?

I mean, it's essentially concentrated on one single commodity, and it is a commodity. And, you know, so they're cheap and they're passive, but don't let that, you know, trick you into thinking that all of a sudden all this money is going to start flowing a Bitcoin and it's a great long-term investment. I think you still have to be diversified when thinking about them. All right. With that out of the way, I think we can. get to some of the spicier takes when it comes to crypto. And we heard some of them at the World

Economic Forum and Davos this week. Jason, I believe one of the preeminent bankers had some things to say about the crypto industry. Who doesn't enjoy a good Bitcoin thesis debate? I mean, come on. I honestly, I think that these ETSs are great in the sense that they bring transparency. They help bring transparency to an industry, to a market that needs it most. Regardless of your stance, on Bitcoin and crypto. This is something I think that ultimately helps in that regard. But, you know, it is funny. I mean, in Davos, again, I mean, we see Jamie Diamond, one of the first questions he's asked in regard to crypto and Bitcoin. Have you changed your mind, what your stance? And it was really, it was funny to hear him being so short in regard to this time around. He's just like, listen, this is the last time I'm talking about this with you. So help me, God.

He's like, blockchain is real. It's a technology we use. But, you know, when you start getting into Bitcoin and crypto and things like that, maybe don't necessarily do something, at least in his perspective, they don't do anything. You know, his advice is, I don't want to get involved. But by the same token, he's like, I don't want to tell you what to do. I support your right. I defend your right to do Bitcoin if you want to do it.

My personal advice would be not to get involved, but it's a free country, right? So he really laid it out there. And I'm going to be interested to see if this indeed is the last time. Because I just have a feeling it's not going to be because this is a space that is just, it's so filled with change. It's moving so fast. I feel like we're going to be, we're going to be looking at a different set of rules almost here, maybe even a year from now. Matt, we saw headlines related to some of Diamond's comments at Davos. We also saw some headlines related to AI development, the geopolitical landscape.

When you're looking at the event and some of the news that's come out of it, what are you paying attention to? You know, India made a pretty big splash at Davos this year. year, you know, I think India has become kind of the large emerging market of choice, kind of now formally replacing China, which kind of held its place on the mountaintop for so many years. And for one, India's population has recently surpassed China's. I mean, it's now the largest country with more than 1.4 billion people. That's like 18% of the world's population in one country. It's incredible. It's also got a much younger population. There was a report that was shared on CNBC that 33%, a third of India's population, is between 20 and 33 years old.

And right now, and this is data from McKinsey and Goldman Sachs, only about 16 million people in India are considered affluent, meaning they earn at least $10,000 a year. That number could reach $100 million by 2007. So companies like Apple, making a major push into the country for obvious reasons. But I think Starbucks could be an interesting bet on India. Starbucks is opening a new store in the country, like every three days. And right now, they have just under 400 stores. Compare that to China, which actually has much less of a coffee culture than India, Starbucks, Starbucks has almost 7,000 stores there. They estimate they'll have 1,000 stores in India by 2008. I bet that ends up being way low. And so it's a massive potential market for Starbucks.

I think it's a massive potential market for many U.S. companies with global operations. Matt, I have to clarify this, because opening a Starbucks every three days, could either be a hyperbolic joke or a true statistic when it comes to a company like Starbucks. Which one is it? It is absolutely a true statistic. At least as you believe Starbucks is management, which I'm not going to doubt. So pretty impressive. Love it.

All right. After the break, we've got some earnings from one of the most important companies in the world. Stay right here. This is Motley for 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.

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Argusinger and Jason Moser. The earnings results are rolling in, and we're digging it. Let's start with what I find myself constantly referring to as one of the most important, if not the most important companies in the world, Matt, and that is Taiwan Semiconductor. Shares up 10% after the company reported this week. Safe to say the market like the results. Absolutely love the results. And don't underestimate a 10% move for this stock. I mean, it's a massive, massively important company, 560 billion market cap last I checked. So it's added well over $50 billion this week since the earnings release alone. And it wasn't about the Q4 results.

They were fine, but revenue was down, gross margin was lower year over year, over year, earnings were sharply lower. That was all kind of baked in already. I think what caught the market by surprise was just how bullish management was about the year. For one, they're expecting business to improve each quarter of 2024, which will ultimately lead to overall revenue growth in the low to mid-20% range. I don't think any or most investors were kind of expecting that. As a result, utilization is going to go way up, margins are going to improve.

Earnings should surge because there's just a ton of operating leverage in a business like this. And like, I think you have to remember, I think most investors probably are, you know, are excited about companies like Nvidia, AMD, but these chip designers rely on Taiwan semiconductor to manufacture their chips. That's where their production comes from. Without Taiwan semiconductor, it just couldn't happen. couldn't happen. So as a demand for their chip surges, AI chip surge, so will the manufacturing needs for chips. And TSM is the go-to source. I think it's also a bit of a tell on overall economic strength around the world. If chip makers of all kinds, and I'm not talking about just

technology companies, but you got auto manufacturers, appliance makers, if they're seeing higher demand, they're going to order more chips from Taiwan semiconductor. So if TSM thinks 2024 is going to be a strong year, it's probably a good bet. A lot of industries are expecting a strong 2024 as well. So it could be a really positive signal for the overall economy. Matt, you mentioned the sheer size and scale of this business. And at over $500 billion, this company's almost back to all-time highs that it's set a couple years ago. It sounds like there's a very clear growth picture ahead. What kind of expectations do investors need to have looking at this business. Well, I would just say, look at the expectations built into a lot of companies

that rely on Taiwan Semiconductor. I mentioned Nvidia, AMD. Look at Intel's resurgence, right? It's not quite a proxy for a company like Taiwan Semiconductor, which doesn't make the same margins. But I have to say, like, there should be a lot more enthusiasm about this company to the same degree that it is about these other companies. All right. Over to banking. Jason, this week, Goldman Sachs and Morgan Stanley both gave us some updates, and we got to see the market reaction on some of those updates as well. They are similar in what they do. So let's start with some of the higher level trends. What is the state of dealmaking and investment banking right now? Yeah, I mean, you got Goldman and Morgan's Daylay,

both companies that really banks that focus more on the investment banking side of things. So we saw with Goldman, asset and wealth management revenue jump 23% from a year ago. Great to see. What was really impressive, I thought, with Goldman was, I mean, earnings jump 51%. from a year ago. And a lot of that came from, and this was kind of a theme, but it was sort of the theme of opposites in regard to these two banks. With Goldman, we saw them really benefiting from provision for credit losses coming down. And to put that in context, the provision for credit losses for the fourth quarter of 2023, right? This quarter just reported with $577 million. That compares to $972 million from a year ago. So a lot of money freeing up there.

And over the course of the year, that number for 2023 is $1.7,000. 1.03 billion dollars compared with 2.72 billion dollars from just a year ago. So a lot of those provisions for credit losses being released, no doubt some of that had to do with obviously what was a very good year for the market, but absolutely Goldman benefiting from those market conditions, which is good to see. It was interesting to see with Morgan Stanley, though, a little bit, it was a little bit of the opposite, right? Their provisions were a little bit higher. They actually increased as the credit conditions for the commercial real estate sector really impacted Morgan Stanley. You see Ted Pick, the new CEO for the bank there, I think he's just approaching

the year with a little more caution, perhaps, than the other bankers. And maybe he's just trying to get his feet underneath him and get started with a note of humility there. But it was just interesting to see sort of the juxtaposition there between Goldman with a little bit more of a glass-half-full view versus Morgan Stanley's. Maybe. Maybe. glass half full? Jason, I think we've all seen, we've all been able to observe the lack of new companies coming public and maybe a little bit of a pause on some of the merger and acquisition activity that so many of these banks operate in. Do you feel like it's strong to see these types of results, even while we know that those segments are a little weak? I think it is.

I think it's really encouraging. I mean, when you look at the way 2023 played out for investors, I don't know that it felt really as good as the actual returns showed us. I think the numbers were a lot better than maybe it felt. Maybe part of that has something to do with inflation and just sort of the state of the consumer. But all in all, I mean, I think those market conditions improving, it does seem like we see these consumer sentiment numbers are getting us off to a good start here in 2024. There's a hunger out there for IPOs, right? There's a hunger out there for some new business to come online.

And I think we're going to see that in 2024, and these banks will definitely benefit from that. All right. We'll wrap up our earnings rundown with an update from Prologis. This is the largest industrial real estate investment trust in the world. And Matt, when they speak, the entire shipping and storage world listens. What did they have to say this quarter? That's totally right, Dylan. We talked about how big and how important Taiwan Semiconductor is for a lot of other companies. Prologis is hugely important for major companies like Amazon, on eBay, Etsy, UPS when it comes to shipping, logistics, inventory management. So, Prologis, the stock is actually up almost 30% in three months since they last reported.

And that's quite a move in three months, but I think the results that came out this week really justify it. Same store net operating income, that's kind of similar to same store sales, but for REITs, up 8.5% year over year. Average occupancy ended the year at 97.6%. That's near all-time high. rent growth on new leases of 51 percent, really, really impressive. And management was really optimistic about the year, just like time-on semiconductor's managers were. There's still a lot of supply concerns out there. But the heavy building is kind of coming down.

Development starts are way down. Capital markets are a lot calmer right now. They have an excellent balance sheet, and the guidance they gave was really strong. They're targeting 9% growth in core funds from operations for the year. That's kind of their cash flow metric. Stock's a little expensive right now, but I think it deserves to trade it to premium. It's still 20% below its all-time high. Take a look at Pelagis.

Matt, when Jason was doing the rundown on the banks, mentioned the reserve increases related the commercial real estate concerns. Is that something people need to be worried about with the storage space? Not at all when it comes to industrial reeds or self-storage. It's a totally different market. It doesn't have the same headwinds as Office does right now. All right, Matt Argusinger, Jason Moser, fellows. We'll see you a little bit later in the show. Up next, we've got a bestselling author weighing in on why the big banks are wrong, forcing people back into the office.

Stay right here. You're listening to Motleyful Money. Welcome back to Motley Full Money. I'm Dylan Lewis. Back in December, the Motley Fool had our annual company-wide employee retreat, Fool Paloza. While we were together, the Motley Fool, Shannon Jones, interviewed best-selling author Dan Pink. While they were talking, they took principles from his best and lesser-known books and applied them to the Modley Fool. topics of AI, employee motivation, and what the modern office is really for in a hybrid world. And so I want to start really on the topic of motivation, because I think that's where it begins. And your book, Drive, the surprising truth about what motivates us, you actually peel back the curtains. And so I'm curious, what is it that really motivates us in the workplace?

In the workplace. It's a mix of things. And in some level, we've gotten it wrong. I think The Fool has gotten this much for years and years and years has gotten this much better than anybody else. But we have this idea out there in organizations that the way to motivate people is simply to dangle a reward in front of them. That if you dangle any sort of prize, whether it's a raise, whether it's a bonus, whether it's a promotion, that people will do more and better work. And it turns out that's just not true. It's just it's not, the science tells us something very different. It tells us something that's a little bit nuanced. What it tells us is this.

Human beings are indeed motivated by money. But money in many cases is simply a threshold motivator. And what really leads to enduring performance, especially on creative, complex tasks like all of you are doing, is a sense of autonomy. Do you have control over what you do, when you do it, where you do it, how you do it? Mastery, are you making progress in meaningful work? Are you getting better at something that matter and purpose? Do you know why you're doing something? Are you making a contribution internally?

Are you making a difference externally? And those are the things that really motivated us over the long haul. And a lot of these kind of contingent motivators are forms of control. They give us kind of a sugar higher motivation. They get us moving very much in the short term, but they actually are not sustainable as real motivation. And I think that world has been changing over time. rather slowly. Yeah.

How is that changed now that we're in the post-pandemic world? Has there been a change or a shift that you? Well, I mean, I think there has been a change in, I think there has been a change on something. Let's take the dimension of autonomy, for instance. And The Fool is a good example of that. So I wrote a book 20 plus years ago called Free Agent Nation.

Oh, my God. You're the guy who read it. Thank you. It's a book about the rise of people working for themselves. Truthfully, it remains in print today. It now sells tens of copies every year. And one of the things I talked about in that book is that it's inevitable that we're going to have more people working at home. There's an affinity between work and home.

The separation, the distinct kind of permanent inexorable separation between work and home is really an historical artifact. And that at a certain point, we're going to have people working at home. a lot more than we ever had. We're going to have people working remotely. And when I wrote that, people said, you're crazy, you don't know what you're talking about, we don't have the technology, you can't trust people. All right, cut 20 years later,

like a few hundred million people around the world did it in four days and sustained it for two years. Okay, that is, we have any Ohioans here? All right, thank you. So I'm going to use an Ohio expression. here, which you can translate to your colleagues here, which is that's a very difficult egg to unscramble, right? You can't unscramble that egg. And so I think that in terms of autonomy, I think there's been a massive worldwide test case about whether you can trust people

to be autonomous. And I think the answer was a resounding yes. And I think you can't turn back from that. And I think that's a big legacy of the pandemic. And you see it now with, I mean, I know that you guys have gone the other direction on this, on remote work, but you see it now with the big banks for the last year and a half have been imploring their employees. You've got to come back to work. You're not serious if you don't come back in the office. You have to be in the office five days a week. You've got to come back. And the talented people in response to that are saying, okay, boomer, I'm going to find another job. And so I think that that is a big, big legacy of the pandemic is basically saying we can trust our default setting in organizations should be like

the fool's default setting our default setting in work should be that most people are like us you can trust them they want to work hard they want to do great work and we should start with that premise rather than the premise that that begins a lot of these conversation which is that people are shiftless they're not trustworthy they have to be watched they have to be monitored and I think we're much better off beginning with the premise that applies to 95% of us and letting 5% of people disprove it rather than

the other premise, which is essentially shackling 95% for the bad 5%. Yeah. Well said, Dan. Hey, thanks. Yeah. I want to pull on that thread about working from home. We've obviously got a flexible work culture here, but I

really want to get your thoughts on how do we create meaningful engagement at home? And are there some practical ways to optimize our workforce? I think that's a great question, Shannon. I think that's actually really hard. I think it's going to be, I think what's happening right now is you can think of it as a kind of a sorting out process that's happening now. And we haven't figured it out. I think one of the big questions that we have to ask right now is what is an office for? You know, what is an office for? For a long time, we knew what an office was for? An office was the place was the

place that house the equipment, that housed the means of production that people needed to create wealth. It was also the place where you could talk to your colleagues. But now, you know, everybody has a supercomputer connected to the world in their pocket. And you can contact, you can Slack, you can email, you can DM, you can text people instantly 24 hours a day. And so You have to ask what is an office for? I don't think offices are going to disappear, but I think they have to be fundamentally rethought that offices should probably be more like a cafe,

or more like a nightclub, or more sort of intentionally designed for collaboration and connection. And they should be compelling enough to lure people there rather than force people to go sit at a cubicle 20 miles away from their home. All right. Your other book, A Whole New Mind. They're one of my favorites.

You talked about how the future will actually be ruled by a different kind of thinker, the right brain thinker. Tell us about that and what that means, especially in the realm of AI. Okay, so I'll take the two parts. So the argument of that book is that it used to be that the skills that got you into the middle class that made a difference in your ability to climb the ladder into the middle class that allowed you to thrive within organizations were characteristic. of the left hemisphere of the brain. Logical, linear, sequential, analytical, spreadsheet, SAT abilities.

And the argument of that book, which came out, what, 16 years ago, something like that, is that those abilities, those metaphorically left brain abilities are necessary, but they're no longer sufficient. And a different set of abilities, the abilities more characteristic of the right brain, artistry, empathy, inventiveness, big picture thinking, that those abilities now are the first among equals,

and that people who master those abilities on top of the left brain abilities are the ones who are going to thrive. Now, cut, fade out. The second part of your question, that's the good news. Here's the bad news. I might be wrong. Because when I wrote that book, there was not generative AI. And so, for instance, in that book I wrote about how the importance of empathy,

Empathy is a great example. And one of the ways that we empathize with others is that we read their tacit facial expressions. And at the time, software could barely distinguish my face from yours, let alone detect the emotion on that face. But now it can. And there's some interesting studies that came out about a month ago showing that large language models actually demonstrated more empathy than physicians. and certain circumstances. So I think that that argument is kind of right, but not as airtight as it was 18 months ago.

Yes. And how rapidly do you see that changing? This is... I don't know, man. This is... I mean, the speed of the change is just really remarkable. Now, I don't think that... I don't think that AI is going to...

replace everybody's job in a in a wholesale way. I think that's not, I think that's not the way to think. I think that's contrary to what history has shown us. I think a way to think about it at an individual level is to think about AI as a partner, as a form of co-intelligence, as another mind that you're collaborating with. And so this is cliche by now, but basically people, AI is not going to replace everybody, but humans with AI will replace humans who aren't using AI. And so the question then becomes, how can you effectively use these new technologies?

We've seen this movie before, okay? We've collaborated with other kinds of technologies. I'm old enough to remember, like, you know, not the advent of calculators in classrooms, but the early days of calculators in classrooms. And there was alarm then. No one's ever going to learn math. And the same thing is true, you know, with search engines, no one's ever going to learn how to do research.

And now we just have that same kind of alarm here. So I think you have to look at AI as a form of co-intelligence, as a partner, as a collaborator, something to augment your skill. And I do think that it raises, it calls on some really interesting new skills, though. Yeah. So what you're saying then is the level playing field is there for right and left brain.

Well, I mean, I think you make a good point, Janet, because one of the things that the early research on AI has shown is that AI does an incredible job of bringing up the bottom performers. It brings up the bottom performers significantly. It doesn't have as much of an effect on the people at the top performers, but there's some interesting research on, say, law and law students, and particularly something like even like legal writing, that AI can help take people, let's say we have a distribution,

a percentage, distribution of legal writers. and AI is going to have no effect on people in the 90th percentile of legal writers. But those in like the 10th percentile, the 20th percentile, the 30th percentile, they're going to get a lot better. They're going to become essentially what are now 60th percentile writers, thanks to AI. So the early effect on AI is that it actually lifts up the bottom considerably. You see that in research on lawyering. You see that in research on customer service.

It's pretty remarkable. Listeners, you can catch the latest thinking from Dan Pink on X. He's at Daniel Pink. And if you have suggestions for people we should interview for the show, you can shoot us note at Podcasts at Fool.com. Coming up after the break, Matt Argersinger and Jason Moza 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 anything based solely on what you hear. I'm Dylan Lewis, joined again by Matt Argusinger and Jason Moser. Subway might be known for its footlong sandwiches, but its newest menu offering is a different take on the classic. The company is looking to stoke growth with its new sidekick offerings,

chocolate chip cookies, a cinnamon bun churro, and a soft pretzel from Auntie Anz, all in the foot-long format. Jason, do you think you could possibly eat a foot-long cookie? I mean, given if I had to, sure, right? I mean, I don't know that that qualifies as a sidekick. Like, that sounds like it's all good on its own. I like cookies, but I kind of feel like the law of diminishing returns kicks in at some point with this thing, right? I like that you said if I had to, because this is ideally a product that they're looking to sell and that people want to eat. But it's more of a food challenge, it sounds like to me.

Matt, I'm curious. The company is reportedly seeing some interest on college campuses. is, do you feel like this is a late night munchy play, or is there actually a market here for this product? Oh, no, there is. There absolutely is. I mean, hungover, otherwise inebriated young people very late night. I can see this being a bit of a hit. I just have one question.

How many calories are in this footlong chocolate chip cookie? I mean, what's the guess there, Dan? I mean, I think the over-under starts in 200 calories for this thing. 200? Well, he's got to be more than that. I would imagine 12 to 1,400. Oh, my gosh. 200.

No, like one of those Chick-fil-A chocolate chip cookies has like 350 on its own. Oh, my God. And that's just a little circular cookie. Hit that by 10, Maddie, and I think we're in business. Oh, my gosh, dude. Well, thank God we got those weight loss drugs out there, I guess. They're going to be ever more popular this year when Subway rolls these out. I have a real-time fact check.

The Sunabun, the Sinabun, foot-long churro is 200 calories, the pretzel 330, And the footlong cookie, 1440 calories. Ding, ding, ding, ding. That is an epic, epic, epic sidekick. Yeah, so I think to the original point, that is the meal. I think you're good with just the sidekick cookie. All right, let's get 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? All right, I'm going with RPM International. No, it is not a car racing stock. It's much, much more exciting than that, actually. RPM stands for Republic powdered metals. This is a company involved in very exciting businesses like concrete additives, waterproofing, roof coating, paint removal, corrosion protection, sealants, and cocks. If you've ever renovated a house or redone a kitchen or bathroom, I promise you that you or your contractor have used some, probably many of RPM's products.

I mean, one of their most popular brands is Rustolium. I've been feeling Dan is a power user of Rustolium. I don't know why I feel that. But anyway, family-run business. It's delivered incredible returns of shareholders. It's kind of consolidated this highly fragmented market and built out a pretty good distribution footprint, has a lot of cost advantages. Operating earnings are expected to grow in the load in mid-single digits over the next few years.

And most exciting, guys, it is a recently crowned dividend king, meaning it's raised its dividend for 50 consecutive years. management loves to talk about the dividend. As you guys know, I love boring companies that pay and grow dividends. So I'm happy to watch paint dry if I know I'm getting a regular dividend check. And I think RPM is one to look at. Dan, I know you are a frequent visitor of the hardware store and Home Depot. RPM International sounds like a hardware store company. Is this one you're interested in? Yeah, so I was ready to lampoon Maddie for bringing yet another boring company to talk about. But he had me at Rostolium. Rostolium is a very very very very very very. I was a very

very good brand with excellent products. So I've got nothing bad to say about this company. All right. Everyone knows the classic rom-com line. You had me at Rustolium. Jason, what's on your radar this week? Mattie's put me beyond the eight ball here. I've been looking more into a company called Globus Medical. The ticker is G-M-E-D. The word musculoskeletal, right? A big word, it refers to the human-lococemotor system. How we move around. It includes all the muscles, the bones, jukeletal, joints, the connective tissue that helps us move our bodies. And did you know, there are over 150 different diseases and conditions that can impair

our musco-skeletal system resulting in pain, limited movement. And you know what, I bet you're plowing down one of those subway footlong cookies, I bet you're going to have trouble moving around. So this might be right up, maybe there's an advertising campaign that could go along with Subway here. But Globus Medical is a company. They're devoted to developing the solutions for these musculoskeletal disorders through devices, surgical equipment, monitoring, and technologies. It's actually a very

big market, right? Healthcare represents a large market opportunity. In regard to Globus, I mean, this is a $50 billion overall market when you include spine, orthopedics, the enabling technology and the tools that they all use. The co-founder and chairman, David Paul, still actually owns 16% of the company. And I think, interestingly, they just closed on an acquisition, a company called NuVasive right at the end of 2023. They bought NewVasive for just a little bit more than $3 billion in an all-stock deal. And it really does combine these two companies together, some complementary portfolios of offerings to really focus as the leader in that musculoskeletal market.

So, you know, just I love finding big dogs in the space there. This certainly seems like one of those big dogs in a market that doesn't look like it's headed anywhere anytime soon. Dan, a question about Globus Medical and can you say musculoskeletal three times fast? I'm not even going to bother with that, Dylan. I am going to ask, Jason, because you know, you're getting up there in years now, Mr. Moser. Thanks, man. So Glovis Medical is going to give you a free joint replacement. Where are you going with that?

I tell you what, I feel like I'm going to have to go with the hip. That stands out to me is the one that probably is going to go first. Play a lot of golf throughout my life, Dan. I've been rotating around those hips for a lot of years. Dan, which one's going on your while? watch list this week. I mean, no surprise to anyone, but I'm going to go RPM. Rustolium, baby. Rustolium. Jason Moser, Matt Argersinger. Thanks for being here. That's going to do it for this week. Spotly Full Money Radio show. The show is mixed by Dan Boyd. I'm Dylan Lewis. Thanks for listening.