Motley Fool Money - The Last Giant of Late Night

Episode Date: July 7, 2017

Volvo generates some electricity. Tesla decelerates. And Berkshire Hathaway makes a big buy. Our analysts discuss those stories and share some stocks on their radar. Plus, New York Times comedy critic Jason Zinoman talks about his new book, Letterman: The Last Giant of Late Night. Thanks to Slack for supporting The Motley Fool. Learn more at www.slack.com.      Learn more about your ad choices. Visit megaphone.fm/adchoices

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app, which makes it so much easier to stay on track. And you can get unlimited expert help at no extra cost, even on nights and weekends during tax season. Visit turbotax.com to get matched with an expert today, only available with TurboTax full service experts. Thanks to Slack for supporting this episode of Motley Fool Money. Slack is a messaging app which brings together all your team's communications in one place, making work simpler and more productive. Go to Slack.com to learn more. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Full Money Radio Show. I'm Chris Hill and joining me in studio this week for Million Dollar Portfolio. Jason Moser. From Motley Fool Pro and Options, Jeff Fisher, and from total income, Ron Gross.

Good to see you, as always, gentlemen. Hey, hey. We'll get to the latest headlines from Wall Street. We will dig into the business of Late Night TV with Jason Zineman, and as always, we'll give you an inside look at the stocks on our radar. But we begin this week in the automotive industry. The move to electric cars taking a pretty significant turn this week, led by European automakers and governments. Volvo announced a line of new all-electric vehicles. starting in 2019. And on Thursday, the French government laid out a plan to end gas-powered cars by 2040. And Jason, we were talking about this before the show. I think a lot of

people look at Tesla as being all-encompassing of electric cars. And you look at the news this week, it is so much bigger than just Tesla. Yeah. I mean, I think that's the great point there. And that's what we need to focus on, is that the headlines, we know that Elon Musk makes these big, bold, sort of targets, these goals of how many cars we want to produce and whatnot. And it seems like they just barely hit their goal this quarter, and the headlines really focused on how they barely hit that goal. And it seems that all of the attention focuses around Tesla. This is the only way that we're going to get to the electric vehicle. And obviously that is not the case. I mean,

we have tremendous opportunity here with the big automakers like GM, like Ford. I mean, Volvo is another good example. I mean, these are the other good example. I mean, these are the I mean, these are the companies that have the scale. They have the facilities. They have the capital to invest in this movement as well. And it's good to see that they are doing that. So, yeah, it's really easy to pinpoint Tesla as maybe an overvalued stock, or we don't think Elon Musk has really any focus on one thing or whatever. But, yeah, to your point, it's not all Tesla. It is a movement in general, and it's nice to see everybody jumping on board. Yeah, I agree with that. I think Tesla makes a great product, but the stock is

priced as if it is the winner. And there doesn't necessarily need to be a winner. As you said, there's Ford and Fiat and General Motors and Domler and Volvo. And it's going to be a number of different companies evolving the electric vehicle market for years to come. And for Tesla's stock, even though it's come down recently, for Tesla's stock to be appropriately priced, it's going to really have to eat everyone's lunch pretty significantly. And that's not a bet I've ever been willing to make. Yeah, Jeff. Anyone who was looking to get shares of Tesla at a discount, it was a good week for them because the stock's down nearly 20% this week.

If you can call it a discount. Maybe a discount to the all-time high. But, you know, Chris, we've seen this before to speak to my age back in the 90s where we would see Amazon rise and then fall 20% in a week, and so it goes. But yeah, Tesla's market value prices in a lot more than automobiles. It's pricing in the idea of Tesla being an energy company writ large. And just recently they announced they're going to build the largest battery pack factory in the world in Australia. Within 100 days, they say. They plan they'll get that done. So it's more than just cars, but it is, it's really interesting to see France, say, by 2030, only electric cars will be sold. India is saying by 20, no, I'm sorry, France is 2040.

India is 2030, only electric cars. Norway is close to having a majority of cars sold this year being all electric. So small country, yet they are leading the way there. So it's a change that is coming, and Tesla is just one small part of it. So Tesla, wait, the factory they're building in Australia, are they done with the one in this country? No, this is, and I just saw this news right before we stepped into the studio. So it's going to provide power to about 30,000 homes in Australia with battery packs that drive the power out to the homes when energy is expensive and stores the power when energy is cheap.

Yeah, and something we were kicking around on the entire investing team here over the past couple of weeks really is with the progress that we're seeing on the electric vehicle front, you start looking at these big energy companies, big oil, natural gas. Now, it's not to say that it's all just automobiles and that if we go electric, there's not going to be any need for oil and natural gas anymore. That's clearly not the case. But we also have to take account the fact the market is very forward-looking. It's looking at these companies and wondering, okay, perhaps the next 10, 20, 30 years, we're not going to need nearly as much oil or natural gas for automobiles for transportation. So then how compelling of an investment are

those types of businesses? When we know they're already very cyclical, maybe we're kind of stepping into a new norm as far as the cycle goes where demand is going to be lower. I mean, we can all make fun of Rick Perry for that little silly comment about you put the supply out there, the demand will show up. I mean, that's not really quite the case. I think there is going to be a lot of supply. I'm just not quite that your demand's going to be there over the coming 20 years. Yeah, I agree. The headwinds are going to persist. For a long time, you have governments, including China and India, who want to leapfrog into cleaner because they're cheaper in part, but also all the other benefits, cleaner energies. And so these headwinds, as you said, Jason, are not going away.

Also a bad week for the auto parts industry. On Wednesday, O'Reilly Automotive announced second quarter sales were weaker than expected, and investors went scrambling for the exits. Jeff, O'Reilly shares down 20% this week, and they brought AutoZone and advanced auto parts down with them. It's a lot of fear in the market right now. O'Reilly still had positive same store sales up 1.7%. So it isn't as if the business is in decline, but it isn't growing nearly as strongly as it's had for the past really 10 years or longer. And I think it speaks to what Jason just spoke to. The market's looking forward and sees headwinds for auto part retailers for many reasons. One is Amazon is a competitor. Two is this move to electric cars, which have fewer parts. And three is we may be right around peak employment here in the U.S. and the more people who work, the more people who drive. And that has been a tailwind for O'Reilly since really the Great Recession. And now that's tapering out.

But the stock has really been punished, I think, beyond what the business merits in the near term. But that may very well just be the market looking ahead to the very long term and saying, I don't want a part of this. It's still an expensive stock, relatively speaking, for a retailer. And we're just going to get out ahead of possible risks ahead. Yeah, I agree with Jeff. I think a fourth point would be that even before electric cars came about, cars were being made better and lasting longer, and the need to constantly replace parts,

it doesn't exist as it once did when, Jeff, you were a kid in the 90s. You weren't? It's not about me. But I think even if electric cars never came about, you would see a natural decline in the demand for some of those parts because cars are made better now. They are made better. The parts that you do replace are more expensive to replace. more complex, but you're right. Cars are made better.

Let me go ahead and add a fifth point, Chris, because it seems like we're on points here now. To all of those points, also, you have to look at these companies O'Reilly AutoZone. They've been around for a while, right? They have very large, mature store bases. It's not reasonable to assume they're going to be able to keep on opening up stores, particularly in the face of e-commerce, as Jeff mentioned, with Amazon, and all of the other competition out there. So looking at how they're going to stoke that growth, they have to figure out a way to get traffic into the stores, how to get that e-commerce operation going, that's where that growth is going to come from. You can't open up new stores, and that's going

to be obviously a big drag on the stock going forward. It'll be interesting to see what O'Reilly says in its next quarterly conference call because they do still plan to open about 190 stores this year, which is about 5% of their store base, so kind of small in a relative terms, but still many, many stores. And if they pull that number back, then you know they're actually seeing real. headwinds, and it isn't just seasonal or a blip. So just to close on the stocks themselves, all three of these stocks hitting multi-year lows this week.

You think that's a little bit of an overreaction? Given what the businesses have done this year, it does seem extreme. But I think the market's looking ahead and fearful, maybe rightly so. Warren Buffett took out his checkbook again this week. Berkshire Hathaway is buying Energy Future Holdings for $9 billion in cash. Future Holdings is the parent company of Encore Electric Delivery. Stay with me, Ron, which is the biggest operator in the state of Texas. This is, I feel like we've seen this movie before. This is one more investment in energy that Berkshire Hathaway is making.

I think this makes sense. Encore expands the portfolio of Berkshire Hathaway's energy CEO, Greg Abel, who is very often discussed as the potential successor to Buffett. We see his fiefdom increasing. Earnings from energy already was about 9 percent of Berkshires over all earnings. This will add maybe about 400 or 500 million. They're coming out of bankruptcy. It's hard to exactly gauge how profitable there be. But Ankur will be around a $400 million profitable company, adding to the about $2 billion

of energy earnings that Berkshire currently has. So it makes sense. There's some hurdles here. The federal bankruptcy court obviously has to. approve this. And then there's some regulatory hurdles. Florida utility owner, Nextra's bid to buy Encore earlier this year had been disavowed. So they had to go back to the drawing board. I think Berkshire will probably work this out. And they'll move forward. So you mentioned Greg Abel. Yeah, part of this story does seem to be, for those who

are trying to read the tea leaves of who will eventually succeed, Warren Buffett, as CEO of Berkshire Hathaway, this seems like a vote of confidence for him. I would agree, and he is a very strong operator, a very strong CEO, and I think Berkshire would be in good hands. Coming up, a big merger in the shopping world and a few stocks on our radar. Stay right here. This is Motley Fool Money. You're window shopping. Just window shopping. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So don't buy ourselves stocks based solely on

what you hear. Welcome back to Motley Fool Money, Chris Hill, here in studio with Jason Moser, Jeff Fisher, and Ron Gross. Shares of the Home Shopping Network up 25% this week. Rival Network, QBC, is buying HSN for $2.1 billion. Jason, if there is a deal in the world of media, John Malone can't be far behind. He seems to be very common factor in a lot of these deals. And I think this all basically revolves around Liberty Interactive, which is a private company. And you've got a lot of Liberty Interactive, which owns QVC, it also owns a minority interest in HVC. And so essentially, this deal buys the rest of that interest out and more or less

combines two of the big players in what is a bit of a, I don't know it's the most attractive space in the world TV shopping at this point in time, but perhaps there's something still there. I mean, what they're ultimately going to do, they're going to restructure this amalgam of non-retail and retail assets. And one of the spinoffs there is going to result in HHS and QVC and Zulili as part of this sort of retail company. And we remember Zulali, it was public for a short time, and it wasn't really the most attractive investment idea either. So I'm not sure this is necessarily all that of attractive from the investors' perspective. But I mean, this boils down to John Malone. I mean, this is what he does. It's less about skating to where the puck is going

and more about finding efficient ways to unlock the most value from any given set of assets. And he's obviously got a lot of knowledge and expertise in that media space. And so this is kind of one of those things where it's a deal that he can work. I don't know that it necessarily translates to the individual investor as well. But again, this is right in his wheelhouse. So I suspect he'll end up netting a nice little game from it. Our email address is Radio at Fool.com from Avey in Natoma, California. Do you keep a cash balance for buying opportunities? And if so, what What percentage of your portfolio do you keep in cash? Ron? I do typically keep a cash balance, and it increases when good opportunities are harder

to find. But I think the first caveat is we believe you should not have cash invested that you will need over the next three years. Some people even think three to five years. So keep that money definitely out of the market. And then having a little dry powder, never hurt anyone. I happen to be personally, I'll share a little personal information. I'm about 10% in cash right now. Do you get nervous if that ever climbs up? Are you like Warren Buffett? Obviously not with the same raw amount of dollars. But you hear Buffett, I mean, it's kind of funny when he talks about how he gets, he talks about his elephant gun, he gets an itchy trigger finger. I mean, if your cash is sitting there for a while, do you think, man, I got to buy something.

Yes, and that's easy to do because you can always then buy an index ETF or just put it into the market in quotes. Oh, what's fun about that? And then at least you participate. in the market, and whatever the market does, you do as well. I think also a good way to look at this. Remember, if you have a job and you're contributing to your retirement account, 401k, or whatever, remember, that's money that is constantly going on a regular basis, every paycheck. So that is at least one side of your investing strategy. And then if you have a brokerage account with holdings as well, I mean, you can keep, I think, some cash in that in that account. But remember, if you are part of a retirement account, you

are basically always investing with that, and you're never really accumulating cash there. But just a reminder to look at the big picture. Yeah, I think, so the answer will differ for everybody is what we're all saying here. For some people, they want to be 100% invested all the time. As soon as they get paid, they put that money into a stock. Others that I know are comfortable with 20, 30% cash, and they wait for opportunities to invest it. I myself usually have about 20% to 30% cash.

I find given the types of companies that I invest in, I can keep up with the market and have a pleasing performance and yet still have that cash for security or new ideas. And one final point. Our role, your retirement service suggests that as you get closer to retirement and then in retirement, there is a certain percentage you should have invested in things other than stocks. And whether you're going to call that cash or bonds or something else. And that number does range from five to even 40 percent, depending on your age and life circumstances. All right, let's get to the stocks on our radar this week.

And our man, Steve Reuto is behind the glass. He's going to hit you with a question. Ron Gross, you're up first. What are you looking at this week? I got T.J.X companies, ticker symbol, T.J.X. They're the parent company of T.J. Max, Marshalls, and Home Goods. A couple weeks on this show, I said I wasn't sure that their sustainable competitive advantage would sustain in the face of the Amazonian assault.

But in hindsight, I think they do have a competitive advantage. advantage that is pretty sticky and will hang around for a while. This is a total income recommendation. They've increased their dividend every year for the past 21 years at an average rate of 23%. Steve, question about TJX? A long time ago, I remember going to T.J. Max or Marshalls, and it really felt like an adventure. You never knew what you're going to get. Less so today. You don't feel like you're getting as premium brands or you're not really sure. Is this made for them? Who's making this stuff? This doesn't feel like it came out of a premium brand place. Interesting. That is the business model, so I'm not happy to hear that you're seeing something

different. But they do have relationships with 18,000 vendors, which is one of these competitive advantage that they have, and they have 1,000 buyers that are looking for those treasure hunts, as you call them. Jason Moser, what are you looking at? Yeah, taking this from the opposite perspective, so not a stock, you really want to consider buying today. But I got a lot of questions on Twitter over the week on Blue Apron, ticker APRN. Brand new IPO, been a very difficult life as a public company. That's far. The stock is obviously well off of its IPO offering. This is a business to me. It reminds me a lot of music

streamers in the sense. There are really no barriers to entry. There's no real switching costs. There's no pricing power. Customer acquisition costs for these guys are going to be very high. And in 2016, 96 percent of sales came from repeat customers, which means that number is going to have to come down over time, which means they're going to have to spend more and more money to acquire customers. It's going to be a very difficult long road to profitability for these guys. So, perhaps they do offer a nice service. I've never personally used it. But I can only imagine how the stock is going to react when the headline reads, Amazon and Whole Foods announce their own sort of meal delivery service. I don't think investors in Blue Apron are going to be very happy

with that. So, it's one that I would steer clear from. Steve? How are they keeping all this stuff fresh and cool? Is it dry ice? How do they... A miracle of refrigeration. I was going to say, maybe dry ice. I think that's about all I could offer there. I've never used the service, honestly. All right, Jeff Fisher. What are you looking at? It is summertime, and it's time for Pool Corporation, tickers, P-O-O-O-L. They're the country's leading supplier of pool parts, pool equipment, and also pool maintenance,

which gives them a lot of recurring revenue. So as it gets hot out there, pool corp benefits. It's been a great long-term stock. Steve? What's your favorite swimming pool? Favorite swimming pool? What a great question? What does not even mean the full one?

Location? Or shape. Just in general. One with water. Kidney. Kidney's my favorite. Saline? Steve, three different companies.

You got a stock I want to add to your watch list? I'm going swimming with Jeff. All right. All right, Steve. Good call. All right. Jeff Fisher, Jason Moser, Ryan Gross. Guys, thanks so much for being here.

Thanks, Chris. Up next, we'll talk David Letterman and Late Night TV with Jason Zenneman of the New York Times. Stay right here. You're listening to Motley Full Money. All right, before we get to my interview with Jason Zendman, got to say thanks to Slack for supporting this. week's episode of Motley Fool Money. Slack is a messaging app that brings together all your team's communications in one place, making your work life simpler and more productive. We've been using

Slack here at the Motley Fool for years, and it's really been amazing. It just makes everything simpler. It is dramatically cut down on the amount of internal email that we send and enables you to organize your team with real-time messaging, video, voice calls, group files sharing, all sorts of things. It saves you time. It makes you more productive. And you can tailor Slack to work with over 900 different apps. So you can share files with Dropbox, Google Drive, Trouble, all of that stuff. Slack just makes it really simple. And with mobile apps for iOS and Android that sync seamlessly, you can always pick up where you left off, no matter where you are. Slack, where work happens. Find out why at Slack.com. Welcome back to Motley Fool Money. I'm Chris Hill.

Jason Zineman is the comedy critic for the New York Times and the author of Letterman, The Last Giant of Late Night. And he joins me now from New York City. Jason, thanks so much for being here. Hey, thanks for having me. Great to be here. There's a lot I want to get to. I have to start with your book, though, about David Letterman, because when I was a kid,

there was Johnny Carson hosting the Tonight Show, and that was it. He was Late Night Television. And now you've got Jimmy Fallon, Jimmy Kimmel, Stephen. Colbert, Conan O'Brien. There's all this talent out there, but I am guessing in your view, despite all that talent, there are no giants. So I'm curious, in your mind, what elevates David Letterman? Well, part of it, you put your finger on, just has to do with the ecosystem, that now there's so many options for a comedy fan at 1230 at night. You can go to the internet. You could look at one of the many talk shows,

read the streeting service. But in 1982 and 83, if you were a comedy fan who had an affection for kind of irreverent humor, there was one thing you were watching at 1230 at night, and that's David Letterman. And at 1130, chances are you were watching Tonight Show. So this period in the 80s before cable

and all these things exploded, those stars had such a bigger impact than the stars do today, culturally. It's something that people from all different walks of life remember and it had just a huge amount of influence. I mean, I also think Letterman was a kind of once-in-a-lifetime talent and a real singular, you know, have with a real singular voice. And, you know, Carson is the most successful.

full talk show host ever and built the Tonight Show into this juggernaut. But, I mean, I argue in the book that Letterman is the one who really made the argument, the convincing argument for the talk show as art form that deserves respect. That's something that I think we take for granted now, that, you know, we sort of assume that taking, you know, Donald Trump on Fallon seriously or John Stewart having an important political voice or or being really, you know, the, comparing how funny Chelsea Handler is to Samantha B or whoever, you know, Letterman really raised the ambition of the talk show as, as a form.

Lederman's only been off the air for a couple of years. So maybe it's too early for a question about his legacy. But is the landscape today, everyone we've talked about to the. this point, including, as you point out, Chelsea Handler, Samantha B, Trevor Noah at Comedy Central. Is the current landscape? Is that David Letterman's legacy? And if not, what do you think is? It's a good question. I think he's both incredibly influential, but at the same time, he's anomalous, which seems like it's a contradiction. And to some degree it is. I mean, there's the kind of hostility and a certain kind of ironic prickliness that Letterman had,

nobody in a late-night talk show really has today. But there's no question that, I mean, anytime you see something that looks a little bit experimental or seems adventurous on late night, you can find roots of it in late night with Dave Letterman or the morning show. I mean, just to take, in certain things, one example, is Letterman really pioneered the idea of going out into the street, shooting ordinary people, strangers, and cutting these shots into a comedy piece, a edited comedy piece that is as tight and funny as a scripted comedy piece. The things that is the bread and butter of the daily show, you see on Conan all the time, it's all over our culture.

that was not really a very common, you know, comedy form before Letterman, and to a large degree Merrill Marco, who was his first head writer and longtime collaborator and girlfriend, really pioneered that form and made it something, you know, that sort of proved that interactions with ordinary people can be funnier, that real people can be just as funny as comedians. So that's just one example. But, you know, I also think that there's sort of the art of David Letterman, and then there's the career of it. If you look at where talk shows really took off, the late night war in the early 90s, where, you know, Letterman and Jay Leno were battling to replace, you know, the great patriarch, you know, Johnny Carson. You can't underestimate how, what a huge story that was.

That was just major, major news and made a. Late Night, the subject of tremendous influence. I mean, Larry Sanders started the HBO show in the wake of this sort of late-night war, and it sort of illustrated how much interest there was about these late-night hosts, and it was a new kind of celebrity. And so I do think Letterman's artistic contributions combined with sort of the, you know, him as a cultural figure, combined to make, you know, to, and just the longevity. of him. You see the growth of this form from something, which is fairly small to a huge

television form. Let's go to the business side of this for a second because you know, you touched on the battle to replace Carson. And that leads to David Letterman in the early 90s going to CBS, which for the first time probably ever gives CBS a legitimate late-night show with actual ratings and revenue and all that comes with it because the Tonight Show with Carson was such a cash machine for the NBC network for decades. And now you have all these networks that have, to varying degrees, their own levels of success. If you're CBS, if you are Disney, which owns ABC, if you are Comcast, which owns NBC, how good are the economics these days for late-night television? Are you generally pretty pleased if you're any of those networks, regardless of who's in first place in any given week, are the economics of late-night TV still really good?

They're still good. They've changed a lot. I mean, the raw numbers in terms of ratings have gone down, just like they have across all of TV. But, of course, in terms of things going viral on the Internet, you could argue that Carpool karaoke. is the most successful thing in late night right now. And its success is completely contingent on doing well on the web. But, you know, it's a relatively cheap to produce form that now, you know, is very shareable. So you could, you know, you could produce something a night and then people are watching it all day.

and, you know, I think these shows, it's not an accident that the numbers have proliferated. And it's, you know, even Netflix, you know, Chelsea Handler has a show on streaming. And, I mean, there's more of these than ever before. It's relatively cheap to produce, and they have potential for having, you know, a huge cultural impact. They still have millions of viewers, but they're not. They don't have the huge mass audiences they did in the, you know, in the early 90s in the kind of peak Letterman-Lenno culture war. And, you know, that partly has to do with how the culture is fragmented, partly has to do with so many more options. So, and I think, you know, of course, that there was the influence of The Daily Show in John Stewart, which really, I think after Ledman was the next huge shift in kind of politicizing late night.

and you see that now with the, you know, the Leno-letterman battle being reproduced with Fallon and Colbert, who, you know, Colbert finally passed Fallon in the ratings, and then Fallon just passed him, just passed him, came back, I think, about two weeks ago. But they're both, you know, the difference is not great, but you have one who's kind of an overtly political comic, Stephen Colbert that's clearly benefiting from Trump. and you have Fallon who really shows clear of politics, which at this point sort of makes him stand out in a late, late night landscape. All you had to do to watch David Letterman, you just watch him for a little bit, and you could pick up from his television persona that he was kind of a prickly guy, and he would use that for comedic effect. But everything I've read about him, including stuff from your book, points to someone who was like that in real life. you got the chance to interview him. Did anything surprise you when you were talking with David Letterman? He was what I expected, which was a very smart, cerebral, sober guy who was not, you know, he's not the kind of comedian that needs to get a laugh.

He's very charming. He's very charismatic. I think one thing that was a little, I mean, I had heard from a lot of, you know, the one refrain that I kept, I heard from all the people work from him is that he's incredibly hard on himself. And he, you know, he's a class, half empty kind of guy. And in previous interviews, I've read some interviews where he'd been kind of prickly. He was, I guess one thing that surprised me is that he didn't dodge any question. He didn't, he was not prickly in the lease.

If anything, the default move he had was to blame him. himself. You know, he, if you brought up, you know, the way he treated GE or the, or things with Leno, he, you know, his, his sort of reflexive move was self-deprecating and blaming himself. And, uh, or even, you know, I talked about personal things like the, you know, blackmail extortion event about his affair. Um, you know, he didn't, he could have easily, uh, refused to talk about that stuff. Um, But, you know, he was a, I guess what's surprising is what a good interview he was. He was really, he was, you know, here's a guy who's a tremendously deaf conversationalist.

And he, you know, he was not evasive in the slightest. Coming up, we'll dig further into the business end of comedy. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill talking with Jason Zinneman of the New York Times. Letterman owned his. production company, Worldwide Pants, and as a result of that, he owned his own show.

Stepping back from David Letterman as someone who covers comedy for the New York Times, when you look at performers and comedians today, is there anyone who stands out to you who takes a page from Letterman's playbook and has done a good job of maintaining not just creative control of their own career, but also the business aspect of their career. Oh, yeah. I mean, the great example is Louis CK. I mean, Louis really changed the game when, you know, he made his deal with FX for his show where he had complete control. And then once that had some success, you know, he used his own website to release specials and TV shows, Horace and Pete, in a way that no one had really done before. He just went around all the middlemen of channels. Now, if you look back at

the coverage of those things a couple years ago, I think some of the press was a little overheated in how revolutionary this was going to be. This didn't put cable channels out of business or made people no longer want to release things through Netflix or HBO. You know, Louis is a kind of singular. It turned out that you need to have a huge fan base to pull this off. But he really, you know, showed how, you know, the importance of if you really have total control, you can create something as idiosyncratic as Horace and Pete, where it's hard to imagine a network would take. Now, since then, you know, Netflix has come in and bet heavily on stand-up comedy.

And in a lot of ways, you know, they're the biggest player in stand-up for, you know, it's hard to remember a one company, entertainment company that's been this big a player in stand-up than Netflix was this year. I was going to say, there was a long stretch of time where the people, pinnacle for stand-up comedy was HBO. If a comedian got a special on HBO, that was the top. And as you indicated, Netflix has been just essentially handing out stand-up specials like free candy, which leads to this question. Is there now a glut of stand-up comedy available to people? Are stand-up specials no longer special? It's a good question. It's definitely true that. that there was a time when getting an HBO special was, you know, the pinnacle.

And now it's the Netflix special. And, you know, you could criticize Netflix by putting out so much, you know, once a week. And, you know, Comedy Central and C-So and HBO are still putting them out, that they do seem like less of an event than what we had in HBO. where if you're just getting an HBO, just the HBO stamp of approval meant something, which raises this question that are we in a situation like the first comedy boom in the late 80s, early 90s where this glut is about to, you know, we're heading towards a comedy bust. There's too much comedy.

And I actually don't think so. I think there's differences between these two booms. And the main one is it's the difference between real estate, and the internet. You know, the reason that the first comedy boom bust was that people built, you know, there was a chuckle fort in every town. There was all these comedy clubs and every day, and there weren't enough, there wasn't enough good talent to support all these places. So audiences were seeing a lot of bad comedy. And, you know, people stopped, people sort tuned out.

But the pool of people who are willing to go to a comedy club and have the two-drink minimum and see comedy is a lot smaller than the audience that is going to watch a streaming stand-up special. You know, this Dave Chappelle special, you got $40 million or whatever for it. It's a huge hit. It gets a huge amount of media attention. I can tell from just covering comedy. the appetite for, in a time when movie stars seem to, the glow of movie stars seem to be dimming,

I would say the glow of stand-up still seem to be pretty bright. People seem really fascinated by, I mean, that Netflix has convinced Dave Chappelle to come back and do an hour. It's been a long time. You know, Chris Rock also has this poll. You know, Amy Schumer, there's a lot of big stars, and I feel like the audience, in part because it's the internet, but also because the kind of ecosystems of comedy has grown. You know, these, the schools that teach people in comedy like UCB and Second City and Iyo and

groundlings have just grown exponentially in the past decade. The number of people who, you know, will take an improv class today is so much greater than it was 10 years ago. So my sense is that it's still growing. And that although Netflix is putting out one a week, you know, if you compare that to, you know, movies or something,

it's, or TV shows, it's not that much different. There's a huge number of comedians out there. And again, there's nothing cheaper than just doing, than a microphone, getting a microphone and a pair of jeans

and going out on stage. Last question, then I'll let you go. A lot of people, when they're looking to just unwind at the end of the day, they will turn to comedy. They will turn on Netflix or Comedy Central or HBO and they'll watch a special.

You cover this for a living. What do you do for entertainment? I watch horror movies. Really? That's my first love. My first book was on 70s horror. And when I was a kid, you know, my two great loves were Letterman and, you know, disgusting horror movies.

And so like when I'm unwinding, there's nothing. thing relaxes me more than, you know, seeing a decapitation or a zombie attack. You can read his column in the New York Times. You can follow him on Twitter. You can pick up a copy of his book, Letterman, the last giant of late night. Jason Zineman, thank you so much for being here. Thank you for having me. It's been fun. You can check out past episodes of Motley Fool Money and all of the Motley Fool's podcast. Just go to podcast.com. You can subscribe on iTunes, Stitcher, Spotify, Google Play. Just click the subscribe button. And you've got Motley Fool Podcasts on demand whenever you want.

You can always drop us an email. Our email address is Radio at Fool.com. You can follow us on Twitter. At Motley Fool Money is our handle. And if you're on the Facebook, join our Facebook group. It's simply called Motley Fool Podcast. That's going to do it for this week's show. Our engineer is Steve Broido.

Our producer is Mac Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.