Motley Fool Money - The End of Earnings Guidance?

Episode Date: June 8, 2018

Warren Buffett and Jamie Dimon make the case for ending earnings guidance. Howard Schultz steps down from Starbucks. Twitter joins the S&P 500. Five Below soars above expectations. And Smucker tries to get out of a jam. Ron Gross, Jason Moser, and Matt Argersinger analyze those stories and share a few stocks on their radar. Plus, entrepreneur, best-selling author, and Facebook Live creator Randi Zuckerberg talks Facebook, work-life balance, and investing. Thanks to LinkedIn for supporting The Motley Fool.  Go to https://www.linkedin.com/fool and get a $50 credit toward your first job post. Learn more about your ad choices. Visit megaphone.fm/adchoices

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It lets you apply simply and understand the entire mortgage process fully so you can be confident that you're getting the right mortgage for you. To get started, go to Rocket Mortgage.com slash Fool. Everybody needs money. That's why they call it money. The best thing they're on Fool Global Headquarters. This is Motley Fool Money Radio Show. I'm Chris Hillen. Joining me in studio this week, senior analyst Jason Moser, Matt Argusinger, and Ron Gross. Good to see you, as always gentlemen. Hey, hey, hey, hey.

We've got the latest headlines from Wall Street. Randy Zuckerberg is going to help with work-life balance, and as always, we'll give you an inside look at the stocks on our radar. We begin with a polite suggestion from the Oracle of Omaha. This week, Warren Buffett and J.P. Morgan CEO, Jamie Diamond co-authored a letter in the Wall Street Journal calling for an end to earnings-per-share guidance. Under the headline, short-termism is harming the economy. Buffett and Diamond, they couldn't have been able to be. been more clear about this, Ron. They basically said, look, just stop with the earnings guidance. And specifically the quarterly earnings guidance, which I think I'm okay with. I think the unintended

consequence, however, could be increased volatility in the stock because analysts are going to continue, I think, to put out this estimates, and they're going to be more wrong than normal. And that's kind of the divergence between actual and estimates will increase, and therefore the volatility will increase as well. So I would keep an eye on that. Yeah, I read this as Buffett and Diamond saying, companies need to stop focusing on hitting the numbers, which is something that, you know, I think a lot of executives, CFOs, especially, they go into a quarter, they know the consensus estimate, they know the guidance they've given, $1.50 earnings per share. How do I hit that? And so I think it causes a lot of behaviors

that as long-term investors, and investors by definition are long-term, as David Gardner likes to say, that's not something we want investors or companies' executives to be doing. We want them to be making the right investments for the long-term earnings power of the business, not to hit quarterly numbers. We do want that long-term focus, Jason, but I don't know. I feel like if I'm a part-owner of a business, don't I have the right to say? All right, what do you think? Well, perhaps, but maybe not quite as granularly as we get it today.

I mean, I think it's one thing to get some guidance as to where the business is headed. It's one thing to say food cost inflation may hurt our margins this year. It's another thing to say, we're going to earn $1.52, thanks to food cost inflation, which will hurt our margins. And so I think that's one of the leaves that new investors, you know, there's sort of this separation when we see companies report earnings, and perhaps it was a good quarter. order, they beat expectations, and everything seems fine, and yet the stock sells off for some apparent reasons.

So there's sort of that disparity there that we can't quite close. And I think that's a problem. But I think ultimately, this all kind of comes down to giving companies the opportunity to build themselves for long-term success. It's about creating more of the rule as opposed to the exception. Amazon, Tesla. Those are the exceptions today. Let's make more of those, because we see that those kinds of companies can have very profound impacts on society as a whole. of society as a whole.

Final point. As a former activist investor, I want to make sure that this is not a slippery slope into CEOs forgetting that they're the head of a public company. I don't want this to digress into no more conference calls, less and less transparency. Let's make sure you remember, these are not private companies. Well, it's worth noting, do I mean, there are SEC guidelines that still have to be adhered to. We're going to get those quarterly 10Q.

We're going to get that 10K. We're going to get press releases. they're going to release earnings announcements. It's just ratcheting back on that very specific guidance where then you see a lot of reverse engineering where management teams are backing into those numbers and getting there however they need to. Yeah, and we all read conference calls. And I think it's safe to say that if not the majority, but at least half of the Q&A on a conference call, are analysts trying to gauge guidance from the management team. They're trying to update their spreadsheet. They're trying to figure out what's the right margin number

for the current or future quarters. What are the earnings expectations? And I think a lot of that we'd all agree here is useless for investors like us who are just trying to get a sense of the business and where it's going and not kind of pinning numbers on a given quarterly basis to update models. I know that Buffett is the bigger name here, but Jamie Diamond, in addition to being a CEO himself, is also the chairman of the Business Roundtable, which is an organization of CEOs of CEOs of the Board of Directors of the Business Roundtable. you've got the CEOs of MasterCard, Walmart, CBS Health, Johnson & Johnson, IBM, General Motors, AT&T. Diamond says this group is on board with this. So while we've been talking about this in theory, I'm starting to wonder how quickly this is going to happen. Because if these CEOs are really on board with this, to go back to the analysts, Ron, I think if you're a Wall Street analyst, not only does your job become harder, as you indicated earlier,

prospect of not just being wrong, but being essentially punished, demoted, or even fired for being wrong, I think that becomes a more real possibility, doesn't it? I think the CEOs will love this, especially the CFOs, because it's less work to worry about it on a quarterly basis. But then the analysts, as you say, they've got their jobs cut out for them. Are they going to be bold enough to also stop doing quarterly estimates? I don't think so, because I think their customers are going to still demand it, the hedge funds and the mutual funds of the world, those institutional investors are still going to want it, then we'll have to see. If they're off incredible amounts each quarter and it's useless

information, then maybe they stop doing it. Well, God forbid those well-paid analysts on Wall Street actually have to do some work. Howard Schultz announced this week he is stepping down as the chairman of Starbucks, and in doing so, Matt, he very much sounds like someone preparing to run for public office. You know, I think there's no doubt about that, Chris. When the news first came out, I kind of put it at 50-50. I said this earlier on our podcast this week. But I have to say, after listening to him and talk, give a few interviews, I agree.

He is preparing for some kind of public life, whether that means running for president in 2020 or just another elected office. But I think that's for real. And I have to say, I think he leaves Starbucks in pretty good shape. I think the culture that he created, which is a stakeholder approach to business, I think that's kind of embedded now in Starbucks. And I think Kevin Johnson is getting a pretty good handoff here. He's already the CEO, but now he's kind of running the ship on his own.

And the momentum that the business has around the world, but especially in China, is great. And we'll continue. Yeah, I think a big advantage here for Schultz. If he decides to pursue this, he sort of showed us his cards a little bit when he, I think most people go into this thing. He's going to be very much sort of a Democrat-style politician, and I don't know specifically these politics if he's registered one way or the other. But, you know, he was very critical of sort of the very far-left Democrats and saying, you know, I appreciate what you're trying to do,

but, man, how are you going to pay for all that stuff? Let's try to kind of rein this back in. So my point is he certainly seems like a pretty middle-of-the-road guy. And I think at this point, where we are, politically speaking, we could probably use more of them. So he stands a pretty good chance of success, I think, if he figures out a way to sort of dance that fence, right? Walk that tightrope of being a nice sort of middle-of-the-road politician, I think a lot of problems can be addressed with more of them. And now that he has fully exited Starbucks, a good time as any Maddie, to just sort of look back and say one of the all-time great runs, not just for leader of a public

company, but certainly for a stock in the shareholders. No kidding. I mean, the Starbucks brand where he took it, where he took the business over, say, over 25 years as two separate stints as CEO. I mean, it really goes down in the Hall of Fame. So he'll have that certainly to ride on in any kind of election. One little last thing here. You may have read Starbucks is passing through another little price increase.

Don't worry, folks. It's not going to hurt a bit. Shares of Twitter hitting a three-year high this week on the news that it will replace Monsanto in the S&P 500 index. Obviously, Jason, a good little run here for Twitter. And this doesn't change the business, of course, but it's got to boost the stock a little bit, doesn't it? Well, I was going to say, yeah, it's been a very good year.

This is the same business as it was before the announcement. Beyond the mechanics, though, where, I mean, we're going to have funds that need to start owning Twitter just because they're based on an S&P 500 benchmark. I think if anything else, I mean, if nothing else, it gives the company more credibility. I think that often we refer to the S&P 500 as 500 of the most important businesses on the face of the earth. Not a bad thing to be a member of that club, right? Sure. I wouldn't mind being a part of that. So, I mean, it, it, ultimately is a good thing. And I think we saw a lot of mismanagement with this company early on. And once Jack Dorsey came back on board, I think a lot of folks invested in the business

want to change immediately. You can't turn something like that around on a dime. It does take time, and you have to sort of reshuffle the deck, get your house in order, make sure you have the right team in place there. Go back to October of 2015. And I just want to quote this because Jack Dorsey tweeted, as for me, I'd rather have a small small business. smaller part of something big than a bigger part of something small. I'm confident we can make Twitter big. My point there is that really what we're seeing with Twitter, with Jack Dorsey, they're doing what they say they're going to do. He's told us what he's going to do, and he's executing that vision. And shareholders who've held on are starting

to feel a little bit better about that now. Yeah, it's been one heck of a ride if you've been a Twitter shareholder. I mean, to all the excitement from the IPO, I think the stock got up to $60 a share. I think, at some point, Jason, all the way down to $14 or $15 a share. But here, around $40 a share, I'd say. It's been a dramatic comeback. And as you said, I don't think... It's not like Jack Dorsey has done anything monumental.

I think Twitter has just incrementally gotten better as a platform, yet still being as influential as it has ever been in so many different verticals. And it's just starting, I think, pay off for investors. Coming up, if you're looking for the worst industry to invest in, good news. We think we may have found it. Stay right here. This is Motley Full Money. Hey, before we get back to the show, have you tried to hire someone lately?

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Fourth quarter profits for JM Smucker came in lower than expected. And Smucker's guidance for the new fiscal year wasn't really inspiring either, Ron. Consumer staples is just so bad right now. It's so tough. And I don't care if you're Campbell or General Mills or Kraftines. You know, people are looking for, you know, fresher food, more natural food. A lot of these companies are just hurting. They're spending more money to be promotional.

They've got other costs that are increasing, such as freight, that's hitting margins. So you've got weak sales. You've got higher costs. I don't know about you, but I think that translates into lower profitability. And it's really just a mess now. I feel like this is what we used to say about retail when everything was terrible and then, you know, everything rebounded. So if you're in the market for stocks that are selling like 13 to 15 times, this is the industry for you. But they've got to do something. And like, for example,

Smuckers, they're divesting their bakery business. They're all over the place. Pet business is actually the biggest business right now. They just acquired the Nutrish pet business, which was Ainsworth Pet Nutrition for like almost $2 billion. But these companies are kind all over the place. So focus a little bit. Get your costs in order. And then, that's then maybe there's a stock play. Dogs don't tend to discriminate, but when they start turning away from our offerings of milk bones, then I'd be very worried. That is a smucker business.

DocuSign issued its first quarterly report as a public company, the maker of electronic signature solutions, surprised Wall Street with a strong quarter and shares of DocuSign up as much as 10% on Thursday, Maddie. Yeah, this is one actually I was able to present on at our Fool Fest event last week. Myself, Aaron Bush and David Kretzman, presented on some recent IPOs, and DocuSign was one of them. You know, this is the world's number one e-signature solution. And I love the way the management approaches the business. Their tagline is, we are transforming the foundational element of business, the agreement.

And I think anyone who's bought a house within the last five years is definitely familiar with DocuSign. But revenue up 37% year over year. They added 30,000 more customers in the quarter. That number now exceeds $400,000. It's an expensive stock. It's already up 50 percent since its IPO price, and that was just at the end of April. But if you think they can capture roughly 10 percent of what management thinks is their addressable market right now, which is $2.5 billion, within five years, that's a triple on the revenue base. So, you know, this is a very interesting company.

I'm certainly watching it. Shares of five below, up 22 percent on Thursday after the discount retailer impressed Wall Street with a strong first quarter report. You tell me, Jason, was five. Five below's quarter that good? Chris, death, taxes, and a seemingly insatiable appetite for crap. Those are some of the certainties of life. I think that is why Five Below is doing so well today. It is inexpensive, cheap, whatever you want to call it.

I mean, listen. Well, it's $5 crap. Let me be clear here, man. Send your emails too. Probably not the investment that I'm 100% on board with individually as a parent. I fully get it. And when you consider the business's proposition, I understand why it's succeeding. I mean, this is a good investment, actually. I mean, think about it from the perspective of they're just selling you stuff for $5 or less. I mean, there's an attraction

there. You know what you're getting when you go in there. And sometimes you're going in there, you don't even know what you want. You come out with a bunch of stuff. I look at it from sort of the lower inventory risk perspective, because the stuff that they're carrying on their balance sheet isn't really all that valuable to begin with. There's not a bunch of write-offs. Their gross margins are somewhere in the neighborhood. of 60%. You compare that to something like Bedbath and Beyond, which is another kind of company that sells much crap, their gross margins are far lower, and you see them writing off a lot of that inventory along the process, because they're dealing with higher price

points, and they have to figure out ways to get consumers in there. That's why you always see those coupons and they're cutting prices. Five below doesn't have that risk, and I mean, the business really is performing well. The only question I have, from the investment perspective, is how large can they grow that store footprint? I think you had mentioned earlier in the week, and they were quoting around 2,500. I think that's probably a little high. But, I mean, hey, listen, as a consumer, I'm not a fan. As an investor, I see the case.

I would just like to remind you that their crappy stuff is five times as nice as the dollar's store's stuff. You make a very, very good point. I'll also throw in there. We had a bunch of fools earlier this year go up to Philadelphia to meet with management, including producer Mac Greer. Very impressed with the CEO. Hey, listen, I think I'm being pretty favorable towards the business. I don't like the stuff because I'm not a clutter guy, but I think you've got to be long five below.

The case is just, it's been made. Las Vegas sportsbooks saved themselves an estimated $6 million this week when the Washington Capitals won the Stanley Cup. Their opponents, the Vegas Golden Knights, were a 500 to one shot to win the NHL Championship. One casino executive told ESPN that Vegas winning the Cup would have been the biggest financial liability on a sports event in nearly 30 years. You hear the collective sigh of relief. Oh, my gosh.

CAPS, Caps, Caps. Are we all going to the parade next week? I'd love to. We are not all going on. Oh, come on. I'll be headed in the opposite direction. Well, congrats to the Caps and the long-suffering fans here in the Greater D.C. area. Great, great win for Ovechkin and the entire team. Our man behind the glass, Steve Broito, is actually under the weather this week.

We've still got a few stocks on our radar and a couple of minutes to give them. So, real quick. Ron Gross, what are you looking at this week? Tractor Supply, T-S-C-O, largest operator of rural lifestyle retail stores in the U.S., kind of like an Amazon-proof business. Just acquired Petsense, which will give it another avenue of growth. Margins should improve over the longer term. They've increased their dividend every year for the past eight, now at 1.7 percent yield. I like that you threw lifestyle in there as well. Jason Moser, what are you looking at this week?

I was walking through the airport at the beginning of the week, eating a Cajun Fleeve biscuit from Bojangles, and I was really close with going with the jangler this week. But instead, I'm going to go with Trip Advisor, ticker TRIP. Listen, this is an amazing turnaround that's being executed here. And I think I'd be very concerned if the platform itself was in trouble, but it's still very highly engaged in growing its user base. They just made some boneheaded business decisions that they've been paying for over the past few years. Those bad quarters are cycling through. They have a burgeoning, non-hotel aspect of the business

that I think investors can look forward to. So I wouldn't get rid of this thing just yet. If you still own shares, hang on, because I think there's still some upside here. Matt Argusinger, what about you? Well, speaking of lifestyle, I'm learning a lot about the RV lifestyle lately. I'm looking at Camping World. The ticker is CWH. Just started looking at it, trying to figure out why this stock is down roughly 40 percent from its high. The CEO is Marcus Limonis, who many listeners might see on CNBC's The Profit. I think he's a great business mind.

His investment firm has a huge stake in the business. Apparently, Generation X, which I think encompasses this table that we're sitting at, are the biggest, newest buyers of RVs. It's a big trend within that group. I can't claim to be one of them. But there's a lot exciting things that are around the business. This is really the only vertically integrated RV business out there, and so I'm interested. Are you going camping?

I feel like I might want to get an RV and go camping. Is that a microcap now? after that 40% drop or it's still. No, it's worth a few billion dollars. Quick show of hands here at the table, given our generational ties. Anybody here planning on buying an RV anytime soon? Not soon. Not soon?

How about not ever? Well, maybe. All right, guys, thanks for being here. Thanks, Chris. Last week at our Fool Festival CEO, Tom Gardner sat down with Randy Zuckerberg in front of a live audience. That conversation is next. Stay right here.

This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Last week at our investment conference, Motley Fool CEO Tom Gardner interviewed Randy Zuckerberg in front of a live audience. Randy helped her brother Mark build up Facebook from its days as a startup, eventually becoming the company's director of market development. Since leaving Facebook, she started her own media firm, and Tom Gardner started the conversation by asking Randy about her new book, entitled Pick Three. You can have it all, just not every day. About five or six years ago, I did what everyone tells you not to do,

which is I changed everything about my life in a few week period. I had a baby. I sold my house. I moved. I quit my job. I started my own company. Like a crazy person in a few weeks. And it was the most unbalanced time of my life. I felt like I was just treading water. I couldn't see the side of the pool. But it was also, it really forced me to prioritize on a daily basis. When you have that many balls that are up in the air in your life at once, you really, like, very quickly get good at not dropping the glass ones, like only dropping the plastic ones.

And so I developed a mantra out of that, which was I kind of identified five main categories of our lives. Work, sleep, family, friends, fitness, pick three. And that has been my mantra ever since every day as a fresh start. So every day you get to pick a new three that in a 24-hour period, I have really found it very necessary to give myself permission to pick three things to focus on and just not waste any energy feeling guilty about the things that didn't get picked. So I'd love to just take a walking tour of your career.

When you graduated from college, going to Ogilvy, why did you do that? and what did that lead to? And how did you take the steps forward that you did to get here? Sure. Well, even to go further than that, my whole life I thought I was going to sing on Broadway. Like I was so, I had these delusions of grandeur that I was so talented. And then I got into college, and my first week there, I got rejected from the music major. Just flat out rejection.

And so that was my first entrepreneurial pivot at age 18. had to, you know, find a new plan for my life. Luckily, I think that ended up being one of the most fortunate rejections that I had in my life. Because of that, I stumbled upon a love of marketing and psychology and business. I went to Ogilvy and Mayther after I graduated, and I think that was my next luckiest failure that I had in life, because there were about 40 of us that all started at the same time. 39 of them got staffed on the most glamorous projects, movies, magazine shoots, you know. One, me, I got staffed on this brand new team.

They were starting called Digital and Interactive Marketing, and I was pissed off. I was like, what is this dead end thing, digital marketing? Like, I want to be with the celebrities. I wouldn't be with that. But fast forward two years later, and all those people were still getting. cappuccinos on television sets and here I was at age 24 managing a whole team. And then what happened after Ogilvy? After Ogilvie, I started getting text messages and really it was AOL instant messenger at the time

to really date that moment in history and I started getting AOL instant messages from my brother saying, hey Randy, I'm starting this project, the Facebook and I could really use someone who understands digital and interactive marketing. Let me translate that for you guys, because I know a lot of you guys work in family businesses and with siblings. What he really meant was I need someone who will work for free. Like, that's really what he meant by that? Like, let's be real.

And I, you know, luckily I was at this kind of perfect point where I was starting to look at what my next career step was going to be. And so I was like, all right, I could throw more. my little brother a few months of help out in Silicon Valley. Like, I'll go out there and then, you know, I'll move back and have my, my wonderful life in Manhattan again. And 10 years later, I only just moved back to Manhattan. And talk about the hackathon that led to a pretty awesome creation at Facebook.

We used to do these things at Facebook called hackathons, where every few months or so, everyone would be invited to pull an all-nighter at the office, which now that I'm saying that out loud, like that doesn't sound fun at all. Why would anyone want to do that? But entrepreneurs are crazy people, as we all know. I think that might be the only kind of profession where you could look someone in the eye who already works 100 hours a week and be like, you know what you should do in your free time? Work more. And they're like, yeah. So I guess you just got to know your audience. And so we would have these all-nighters. But the whole point, point of them was that you could not work on anything that you normally did in your day job. So you couldn't sit there and answer emails or work on a presentation. This was time to just dedicate to one of those crazy, outrageous projects that we all keep in the back of our mind and never find the time to get to. Like, I know every single one of you, if we sat for 10 minutes, you'd tell me about some book you've always wanted to write or a podcast you've wanted to launch or something you wanted to do,

and the hackathons are the time to do that. So most of the projects were the dumbest things that you've ever seen in your life. I don't want to over-hike. Can you remember a particularly... Yes. One that I can particularly remember was this engineer hooked up a trampoline to people's iPhones.

So you jump, and then that jump becomes your new lock and unlock screen, and you had to recreate the same jump to get back into your phone. I just remember, like this long line of angry people who had been jumping for hours and still had to take their phone to the Apple store the next morning to get back into it. So that's like one of the worst inventions I've ever seen.

But what's so exciting about that is suddenly it created the space where no one felt like they had a bad idea. I know like, yeah. Because I mean, let's be real, like when the guy next to you is doing that, there is nothing you can do to top that, so you might as well, like, just bring it. And I know for me, I, there have been so many meetings that I've been in in my life where I held back on putting a good idea out there because I was so worried about being judged or looking stupid or having other people shoot the idea down. And suddenly, these hackathons were almost

the safe space for failure. So most of those ideas are dumb, but in every hackathon, there were a few kernels of brilliance. This is around 2010. So the iPhone had really just come out, and I started to get really interested in the fact that every single one of us was now a walking media company. And I thought, you know,

what would the world look like if every single one of us could have our own television channel all the time? You know, and I started out by pitching that idea to media companies that we were already doing business with. And I think I got a hundred nose. I asked a hundred times.

I got a hundred nose. They were like, that will never happen. There will never be a day when we're watching video inside of Facebook like that. And so one hackathon, I just decided, like, I'm going to show them. So I turned this little broom closet into a studio, and I called it Facebook Live with Randy Zuckerberg. Only my mom watched. That's it. Super lame.

It was not the huge hit that I thought it was going to be. And I went home in the middle of the night. I didn't even stay awake to present the project to the whole company because I was so dejected that only my mom was watching. And so I thought, well, Facebook Live is dead. Only, it's definitely not. About three weeks later, I got a call from Katie Perry's team, pop star Katie Perry.

And they were like, Randy, we want to use your Facebook television show to launch Katie Perry's World Tour. and I was about to say what I should have said I was about to be like sorry it's not a real show like you should go somewhere where people are actually watching but like somewhere there was a voice in the back of my mind that was like what would your male colleagues do would they apologize you know no they would want to meet Katie Perry they would make it happen

they would just make it work and luckily there were a lot of engineers at Facebook that really wanted to meet Katie Perry. So, shocker, Facebook Live got built. And it ended up being hugely successful. We had millions of people tune in. And now Facebook Live is one of the biggest and most used features on the site. Coming up, more with Randy Zuckerberg. This is Motley Fool Money. If you're looking to get a mortgage here or a couple of tips, first, boost your credit score before applying. The better your credit score, the less your loan. loan is going to cost you.

Here's another tip. Check out Rocket Mortgage. Getting a mortgage, refinancing your existing home loan, these are not easy things. And when you're making a big financial decision like that, you want to be as confident as possible. And Rocket Mortgage gives you a high level of confidence, the same level of confidence that you have in your everyday life. Rocket Mortgage gives you that confidence when it comes to buying a home or refinancing your

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Let's go to the book now and talk one by one through the five choices that we have to pick each day. So what is picking work all about? All right. So yes, we have work, sleep, family, friends, fitness. I purposely made the categories as broad as possible because I think we have very, you know, we have views of what things like work mean. But work can really apply. It can be a student. It could be someone who's very involved with charitable work. It's really anything that brings you meaning that you put effort into that you derive meaning from it. And by the way, as we go through these five, it would be great if everyone picked your three for today based on what we hear. So okay, good. continue with work. So for me, that is the category that I end up choosing almost every day. I can't really imagine any time in my life that I wouldn't want to pick work or pick projects.

So for me, I'm always actively trying to make myself not pick it sometimes. But that's definitely one of the areas that I gravitate towards. Okay. How about picking? Let's go with Friends next. Yes. Friends is a tough one for me. And I think a lot of these are, they come in different cycles and phases in our lives.

You know, I can't, everyone has a very different experience with how you prioritize things. But, you know, right now I have two young children. I have my own company. So work and family are every day. That leaves only one open category to cycle everything through. And so sorry, friends, I'll see you in a decade, I think. I take great solace in the fact that when I ever I call my mom, she doesn't answer because she's out with her friends and like hiking the Great Wall of China and stuff.

I wanted to hear what differences you see that might exist between men and women in making their selections and then between parents and non-parents in making their selections. Yeah. You know, it's interesting. I don't know that there's definitely much more of a kind of age and life phase difference in selections that I've seen more than gender. The one shocking thing. I interviewed more than 50 people for the book because I didn't just want to write a book about, you know, my own experiences. I wanted to make sure that I interviewed people of all ages, socioeconomic status. Some of us are lucky. We get to pick our three. Other people who are single parents working two jobs, they don't get to pick. You know, life picks for them. But one of the most shocking things that I saw across the board was that women, when they want to talk about their career, they kind of of lean in and they get like a hushed voice and they're like, I really like my career. And I was like, say it louder. It is okay to have children and to also value your career.

We put a lot of effort and money into our education, into our early career, into our training. When does it become taboo in our society for women to admit that they value the career? Why has it become taboo or why is it? I think there's just, there's so much guilt. I used to see in Silicon Valley that I used to see the guys would go out and they'd ski on the weekends or DJ and that was really cool and that was viewed as making them, you know, more well-rounded. As women, there is, there is no, and sorry, I swore I wouldn't like get up on my feminist soapbox for this whole hour, but here I am. So, but what I found, at least from my own personal experience, is that as a woman, there is really no room for hobbies because it is viewed as a distraction. Like, you are allowed to have your

family and your career and anything else that you would do for yourself as considered frivolous or distracting or, like, not a real business person. Before coming up on stage, you said, yeah, when I tell you what I do with fitness, you'll see how insane I really am. So what about picking fitness? Every year for the past five years or so. I've basically made a kind of a calendar year-long goal for myself, something that sounds super impressive when you say it out loud, but is very measurable if you just stick with it every day, and that's the key.

So this year I'm trying to get a little more into weightlifting, I know, which sounds crazy. My goal is to lift 3 million pounds of weight this year, which sounds pretty awesome when you say it out loud, but it's actually not that big a deal if you just stick with it every day. Last year it was to do 40,000 burpees. I mean, I remember...

I know. I remember Mark does things like this as well. So that causes me to want to hear who your parents are. Like, I've created... Because I can't remember what one or two of Marks were, but it was like, I will... I will kill everything that I eat. I wear a boat tie every day for a year.

Yeah. Okay, yes. I'll meet a new person. That's right. Yeah. my parents are adorable. If you met them, they're just like the most down-to-earth, real Jewish mom and dad from Westchester, New York. My dad is a dentist. He actually, he just retired. He could have retired a long time ago, but loved his practice and still was there.

And his dental office was on the bottom floor of our home. We had a two-floor home. And so we were the house that gave out toothbrushes for Halloween, which is, like, so terrible. Don't do that to, like, a teenager. That's so bad. But, yeah, sorry, that's a total non-sequitur from what you were asking. But, yeah, they're just, like, the most down-to-earth. I still remember going home. We had just raised, like, $250 million from Microsoft for Facebook.

And we went home for Thanksgiving, and our parents were like, so, like, when are you guys going to stop your little project and go back to school? I'm like, it's not that little. It's not really like a project. But I think you need people in your life like that who just like keep it real. Now you're an investor. Tell us about the earliest investments that you made. Yeah. What companies did you select?

Why were you thinking that way? at the age that you were, and how do you invest now? I think my own investment strategy has really changed over the years. Now I do what I call impact investing. I know a lot of you guys probably are thinking of that. For me, I loved working in Silicon Valley. I loved working at Facebook. The only thing I didn't love was that I was the only woman in the room for 10 years.

And it definitely shifts your, viewpoint on yourself and on an industry. And even to this day, when people ask me my best advice for being a woman in tech, I say to have a man's name like Randy. Like, I can't tell you how many meetings I got because someone probably thought the email was coming from a dude named Randy. And then I'd show up and they'd be like, where's Randy? And I'm like, sucker.

Facebook Live with Randy. So for me, I mean, a lot. A lot of my angel investing ethos is around the fact that I got to ride the elevator at the top, which I'm so grateful for. And so, like, all I want to do is send it back down, you know, send it back down to the next women. So I, my ethos is that I only invest in female-founded companies. I like to invest very, very early when I can get in and help shape a product and sit on a board and really be very, like, really get my hands dirty.

I mean, in addition to doing something that you believe in and having an impact, the market is so inefficient for underrepresented groups. And if we just focused on gender, the incredible preponderance of capital and the private market is going to male-founded companies for a host of reasons. But that means that there is likely a tremendous opportunity in the way that the world works and the auction markets that we operate in, people are not bidding on female-founded companies. Yes. Yes, if you look at it as kind of just a undervalued asset class. It is, I have found huge success in investing in women that, you know, people in Silicon Valley wouldn't even take a look at. One of the other things I found is that because there are so few female founded startups, no woman wants to be the one who fails. And so, like, the women in my portfolio work 20 times as hard as the men because, like, they do not want to be that woman who has a bad.

investment return. And so I've had some of the best returns in my portfolio have been from young women. But that being said, I think another thing, whether you're talking about women or not women, I think the most important thing that I've realized over the years is that it is the person that matters a lot more than the idea. All ideas change, all companies pivot. You never know when the next iPhone is going to drop tomorrow when everyone's businesses need to drastically change to accommodate consumer behavior. So the only thing that matters to me is am I investing in someone who I want to be in business with for 20 years? That's going to do it for this week's show. I'm Chris Hill. We'll see you next week.