Motley Fool Money - The S&P's New High: Too Late to Buy?

Episode Date: February 13, 2015

The S&P 500 hits a new high. Trip Advisor soars. Whole Foods delivers. And Amerian Express declines. Our analysts discuss those stories and share some stocks on their radar. Plus, corporate governance expert and film critic Nell Minow talks proxy voting, executive pay, and Academy Awards.  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. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money Radio Show. I'm Chris Hill, joining me in studio this week from Motley Fool Pro and Options, Jeff Fisher, and for a million-dollar portfolio, Jason Moser and Matt Argusinger. Good to see you, Jens. Hey, hey.

Earnings Paloza rolls on this week. We will dig into the business of entertainment and get some Oscar predictions from our guest, Nell Minow, and as always we'll give you the inside look at the stocks on our radar. But we begin with the market in general. On Friday, the S&P 500 hit yet another new all-time high. And Jeff, I'll just start with you. It seems like every time this happens, whether it's the financial media or just investors in general, new all-time highs just spark a lot of questions. What do I do now? Do I sell out? Do I take some money off the table? And there are always people saying, well, I'm not going to get in now. The market's at a new all-time high. What do you say to investors?

It makes for good headlines, and I bet a lot of brokers are getting calls today with that very question. Should I sell now? Well, that's ridiculous. If you look at a long-term chart of the S&P 500, it has been making new all-time highs consistently to as far back as your chart will go. So I'm looking at a chart right now that goes back to the early 70s. New all-time highs all along the way. Of course, you have bare markets that last for a few years. But overall, new all-time highs all the time.

If the population is growing, Chris, worldwide, and is it? I believe it is. it is. If companies are becoming more profitable and better run, are they? Oh, yeah. No. They're doing fine. You have those two things, and you have the worldwide economy growing as well. Those three things will lead to all-time highs in a well-run market like this one. Mattie, what do you say to investors? No, I totally agree with Jeff. I mean, that's what we want. That's what we come to expect.

The market has a big positive bias. I mean, if you look at, even a period like in 1987 when the stock market crashed, you know, took a lot of people out of the market. A lot people said, I'm never getting into this game again. You know, barely six months later, I think the market hit a new all-time high. And then for the next 13 years or 12 years, all the way to 2000, it hit new highs almost every year. Well, it did every year. And so that's a long period to say, gosh, the market keeps in new highs by the highs.

I gotta sell out. I got to get out of here. I mean, it can go on for a long time. Yeah, it's that classic buy, high, sell low mentality. It's difficult to get past that. I think that's why it's so key to learn about investing at a young age, because I think that you could put away sort of those shorter-term concerns because you're not concerned about those things at that age. And so our bag here is keep on investing through thick and thin, right?

These highs are great. We're not saying there's not going to be a pullback. There most certainly will be. You want to buy today? You want to buy one of those pullbacks occur, too. And I think that for investors, what we're talking about investing, it doesn't have to be just stocks. I mean, we always talk up stocks here because that's what we do. But there are ways to help your portfolio sort of stay diversified and protect yourself a little bit against this volatility.

If you just buying something like a Vanguard index fund or exchange traded fund that gives you the diverse, the exposure to all 500 companies in the S&P. So the bottom line is to continue investing through thick and thin. Let's move on to earnings and we'll start with Tesla Motors. A rough fourth quarter, they missed on profit and revenue, Matt. But there's a lot to get to with Tesla this week, but let's start with the quarter itself. What stood out to you? Sure. Well, yeah, they missed deliveries.

I mean, the deliveries came in about 9,800 vehicles. They were looking at well over 10,000 on that. They're talking about, you know, they're still having issues with production, especially with their dual motor vehicle. There's a big issue with China. We can talk a lot about China. Elon spent a lot of time on the conference call, the fact that, you know, they were expecting to have a lot more deliveries in China. but there's this kind of apprehension among Chinese car buyers that, you know, well, where are the charging stations or how am I going to do this? And now they're actually implementing a program to actually build charger stations at each person's house, believe it or not.

So, you know, they went in with China with big expectations and they realized, wow, there's a lot to do here for the customer experience that we've got to work on. So those things, there's also some foreign currency problems. You know, the stronger dollars hurting them a little bit in places like Europe. And so a lot of things went into it. But the great thing is, these are really all kind of production problems. The demand problem is there. They talk about the fact that right now they have back orders of over 10,000 Model S's. They have a wait list of 20,000 for the Model X, which is still on track to come out.

That's through SUV to come out in the third quarter of this year. So that's not the issue. It's still just getting the production up to the capacity that they need to be. Alain Moss said a lot of things on the conference call that are getting headlines. One of them that he believes that battery production that has no. nothing to do with vehicles is right around the corner for them, that later this year they're going to start producing batteries for homes and small businesses. Yes.

I mean, in fact, we're taping here on Friday. There was actually an article in the Washington Post this morning talking about that and how they have designs ready to be unveiled in about a month or two for home battery power storage and probably going into production in about six months. This could be revolutionary. If the idea that if I'm a homeowner, I can have solar panels in my roof, or if I can just save electricity in general to a good source. storage unit, it's remarkable what that does to the industry and how disrupted that can be.

And Jeff Fisher, keep in mind that Tesla Motors has a market cap around $25 billion. Alon Musk talking about the long-term prospects for his company and his stock saying, in effect, we think we can be where Apple is in 10 years. Do you think they can go from 25 billion to 700 billion in 10 years? I would take the under. The under on that. But he said, take this year's revenue of around $6 billion and then maintain a 50% growth rate for 10 years.

Word for word is what he's saying. That's all. And achieve a 10% profitability number and have a 20 price to earnings ratio. And our market cap would basically be the same as apples today, $700 billion. That sounds like a lot of ifs. It's good to be ambitious and think big. It's a lot of ifs. And Tesla, well, the battery business will certainly be interesting and could be a game changer.

The car business is interesting because it's looking to look at a lot of things. little more like a traditional car business when you look at the financials. And meanwhile, their competitors are working on electric cars as well. So you're going to have some convergence there where it won't always be this new age, super high margin car company. Yeah, there's actually only one company in history with over a billion revenue that grew 50% a year for 10 years. It was Enron and it turned out to be a fraud. So really, you know, he's setting the bar, I don't know, high or which we'd call that, but pretty ambitious. But it's, yeah. Whole Foods posted record sales in the first quarter. Profits came in higher than

expected, and the stock is hitting a new 52-week high. Jason Co-Coreo-Coree is on the Motley Fool's board of directors, and it looks like our board member had himself a good week. Yeah, this is a business we hold an MDP, and I think that we're going to enjoy owning this one for a long time. It's still got a good runway of growth ahead. But I tell you, what, these guys have done a tremendous job here in recent. quarters really combating the whole paychecks sort of nickname that it was thrust upon them, more or less, really, over the past really five, six, seven years. We knew that price was going to be a concern for them at some point, and they've done a very good job of really recognizing

that and bringing more pricing options into their model, introducing more of the 365 store brands, more brands in general, more options and, you know, more attractive price points, really. So what that's helped do is really bring in more traffic. They are able to maintain still a relatively healthy operating margin line. It's not like the margins is really getting killed here. It's just we have to get used to the fact that they are going to be competing a little bit more in pricing as time goes on. But they're doing a lot of things really to strengthen the relationship with the consumer. I think that's really important to note. I mean, they rolled out their first national ad campaign, the Values Matter, national ad campaign that has performed well

thus far. They are showing excellent results with the new delivery relationship with Instacart. They are testing an affinity rewards program that I think will certainly create sort of a stickier relationship with the consumer. And so when you put all of that together along with the leadership team in John Mackey and Walter Robb that really do think long term with this business, they have just over 408 stores now, or just over 400 stores now, I think about 408. They see a market opportunity for 1,200. I think that might be a little bit optimistic. But even if you pair that down to 900 or 1,000, still plenty of room to grow. So I think investors need to be really encouraged with this one. From organic food to sugar water, Coca-Cola's fourth quarter profit

and revenue came in higher than expected. And for the first time in a year, Jeff Fisher, sales in North America actually up. They were up. And largely thanks to price that Coca-Cola found they could increase prices in North America and increased revenue as a result. But still struggling in a lot of other markets around the world where the economies are weaker. Sales were down in a lot of worldwide markets. But overall for the year, Coca-Cola grew its earnings per share, 5%, so not terrible for a company this old. It's interesting whether you're a McDonald, Sears, or Coca-Cola, you reach a point, an inflection point where your brand has become dated, or the very products that you sell have become out of fashion. or in this case feared for being unhealthy.

Coca-Cola, though, among those three, I mentioned McDonald's Sears. I bet on Coca-Cola more than the others for certain. They now have $20 billion brands, out of which 14 of those are still brands, so they're not sparkling beverages. And they've been adding, on average, about one new billion-dollar brand every year since 2010. So they're really growing, whether it's water or tea or what have you. And, of course, as we say all the time here on the show, Coca-Cola is really a giant distribution network that sells liquids, sells beverages of all kinds,

and it's a powerful network for sure. And they still serve just a tiny fraction of the world's daily-consumed beverages, so they have room to grow. But I'd rather own Coca-Cola with its nearly 3% yield than a treasury bond, but I wouldn't expect great capital appreciation from it anytime soon. Coming up, the Godfather taught us that it's not personal, it's strictly business. And American Express just learned that lesson the hard way. Details next. This is Motley Full Money. Welcome back to Motley Full Money.

Chris Hill here in studio with Jeff Fisher, Jason Moser, and Matt Argusinger. Shares of Baidu falling on Thursday after fourth quarter profits came in lower than expected. The Chinese search engine also lowered guidance for the first quarter. And normally, Matt, that's a pretty rough one-two punch, but the stock seemed to bounce back. It didn't bounce back. I mean, you know, they missed in the current quarter. They gave some poor guidance on revenue, but their revenue was still up 47% year over year in the quarter.

But Biden is not a hidden gem or small cap we haven't heard of. This is a company that the world is generally, at least investors, have known about for many years now. It's a huge company, and they have revenue growth of 47%. The miss really is about the shift to mobile. They just invested a lot in that. And the great thing is their share of mobile has grown, certainly. But what's happening is the ad rates on mobile.

as they are for a lot of companies just aren't as high as they have been on desktop. It's about 60% click rates that they're getting on mobile versus PC. So actually, it begs a bigger question for me. A lot of these companies have just, they've really emphasized their mobile strategies. But what we're finding out is that, you know, at least right now, it's not nearly as profitable as traditional desktop. So that's something by-do who's dealing with a lot of companies. Google dealt with that when they reported as well. But still, you can't, it just can't beat the number one search engine in China, the world's biggest, you know. market for sure. And the growth of 47 percent, still very impressive.

For years, Costco shoppers have had one credit card option to pay for their stuff, and that's American Express. And that exclusive partnership is about to end amid reports that Costco is negotiating with other credit card companies. MX said its agreement with Costco will end next year. And Jeff, I don't think it's a coincidence that shares of American Express fell to the point where it hit a 52-week low. So true, Chris. Let's get to the bottom line. American Express now says that its earnings per share will be flat to slightly down this year, which is a big surprise compared to strong growth around 10, 11%.

And then earnings will be up again a little bit in 2016. They project and then grow from there. But what a big hit. Costco accounted for 8%. The Costco co-brand card accounted for 8% of Amex's worldwide build business. Wow. 8%. That's no idea.

It's blowing me away. It is incredible. Now, more than 70% of the spending on that card happened outside of Costco. But still, the card is going away, and that's 8% of Amex's build business. So who are we betting on now? Is it Visa? Is it MasterCard? Discover. Apple pay? Who's going to get this business? Square?

Square. PayPal. Word is Costco is speaking with MasterCard and Capital One. I would really expect Apple Pay to work its way into Costco. Why not? Interestingly, if Apple Pay does wind up in Costco, then you could use her Amex card at Costco again. But anyway, back to Amex, what they're trying to do is all those card members, they're going to try to get them onto another Amex card, as they've done with other partners in the past when the partnership ends.

So it's not a complete loss, but it's certainly a big hit, and the problem is more competition for these lucrative partnership deals. Amex actually said they walked away because Costco, it wasn't economical for Amex anymore, the way Costco wanted to play it. I think that just showed Costco was ready for a new partner, which makes sense, too. Why only allow one card in your store? Shares of CVS health hitting a new all-time high this week after fourth quarter profits rose more than 4%. And it was just a year ago, Maddie, that CVS announced it was going to stop selling tobacco products. There were some on Wall Street who said that was a mistake.

But when you look at what the stock has done in the subsequent 12 months, it seems to be working out. It has. And I was recently in a podcast with David Gardner, who recommended CVS and Stock Advisor. I think about a year ago around the same time that CVS got rid of smoking or selling tobacco products. And he really recommended the company almost solely based on that move that CVS did. And, I mean, you don't think of CVS as a really, you know, a stock that you want to get excited about. But it's, yeah, as you said, it's up almost 50% over the past year. And it just goes to show you with all the short-term worries about, wow, it's going to really dent their sales. and it's going to dent their customer traffic. It's had the opposite effect.

A lot going on in the travel industry. Let's start with TripAdvisor. Fourth quarter profits rose 80%. And I'm sure there were other numbers worth noting in the quarter, Jason. But I can't get past the fact that their profits rose 80%. Yeah. And, you know, it was really driven. The stock just flew the day after the results. And that was really driven on the top line number that they continue to just grow at astounding rates. But, you know, consolidation in this industry is going on right now. And the thing about TripAdvisor, it's a real gem in the space because of the content that they have in the reviews and the pictures that users upload to their site. And so, you know, you look at something like TripAdvisor, it's amazing because it's generally it's an ad model, right? I mean, they make their money from advertising. If you look at what they've done just over the past year, though, in diversifying their revenue stream, it's really pretty impressive.

their click-based ads part of the business, which is the most significant part of the business today, went from 68% of overall revenue last year to 63% this year. Now, during that time, we saw the subscription and transaction revenue, which grew from 17% of total sales to 25% of total sales. Now, in the middle of all that, while you're seeing that click-based ad revenue is becoming less an overall percentage of sales, they still grew that at 35%. They still grew the subscriptions and transactions by almost 100%. And so the growth is phenomenal here.

And it's not that big of a company still when you compare it to something like apriceline.com. And it does have a unique competitive advantage, I believe, in that trove of reviews and the content they generate. So to my mind, I mean, this is a company that is, given the Liberty Interactive stake that's held there today with John Malone, this is an acquisition target at some point. There's somebody who's going to come take this company out because there's too much value there. It's just a matter of who and when. It could be anybody. I wouldn't even shock me to see Google jump in there and make it off performance. Well, and you mentioned consolidation in the industry, Expedia this week, buying orbits

in a deal worth $1.6 billion. And Maddie, it kind of looks like we've got a two-horse race now in this industry. We got Expedia with orbits under its wing going up against price line. Yeah, it really does. I mean, as a consumer, I don't know if I should start being worried, because it just seems like there's always so many options. And really, the beautiful thing is the information is out there in such a way. And it's so easy to use these services. But I do wonder at some point, like any industry, as soon as when there's a lot of consolidation, prices, transaction fees start going up. We're not there yet, of course. But it's an interesting question. If I gave you a free trip, long weekend, flight and hotel to any city you have not visited yet,

what city are you picking? I'm going to go. I'm going to go to Scotland. I'm going to go to Edinburgh, just because I read something recently about it. And I just, I think it's fascinating. I've never been to Scotland. Jeff? It's really cold here in the northwest, northeast right now. So I would, I'd go down to Bogota, Colombia. I've never been there. Jason? I can't recommend Scotland enough, man. Enjoy that trip. You know, interestingly enough, I was surfing around TripAdvisor the other day, and I found a place called Providenciales in Turks and Caicos that I've never been there. And to me, you know, it's... Do you even know where Turks and Kekos is? Yeah, it's just straight down south of here.

Just south of here? Get on 95? Just take a plane. Take a plane and fly south directly to the island. It's one of those Caribbean islands, right? Yeah, absolutely. Okay. I've been to having some hard traveling, I thought you know. I've been having some hard traveling way down the road. Up next, what kind of a world do we live in when CEOs are passing up million dollar bonuses?

We'll ask our guest, Nell Minow. Stay right here. This is Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill. The Academy Awards are just days away, and there's, always something going on in the corporate boardrooms of America. And so, of course, we're going to turn to the only guest that we can turn to. Nell Minow is a corporate governance expert. She's

also the film critic known as the movie mom, and she joins me now. Nell, always good to talk with you. Thank you. I'm glad to be back. One of the things that I love about you is that you make corporate governance interesting. So with that in mind, please help me with this, because next week, the SEC is holding hearings on proxy issues. What is the main issue? And what's at stake for the average investor like me? Well, in fact, astonishingly, to me, this is a hearing about the average investor. Normally, when we have hearings, the last time I testified was just over a year ago, they are dealing with issues that are, first of all, very arcane, and second, have to do with corporations and maybe institutional investors.

This time, the primary focus is how to get retail investors more involved in proxy issues, how to get them so that they can pay more attention and be more effective on issues of CEO pay, of climate change, of disclosure of Citizens United contributions to political campaigns and lobbying, all of that stuff that people really care about if you talk to them about it over lunch, but then they just don't feel that they can have any kind of a say when they're voting their proxies. So I think actually this is going to be kind of fun. On any significant level, are there any discussions about making it easier for investors to vote? Because I'll be honest, when I get that stuff in the mail, I get the annual report from a company. I know I should check

the box and send it back, but it would be so much easier if it were done electronically. If I got an email if I was just able to click a few buttons. Well, you can actually opt into that. If you open up the envelope, it will tell you how to opt into that, and you can vote online at proxy vote.com. All you have to do is put in the number that's on your ballot, and you're good to go. That's what I do. Proxyvote.com.

All right. You can do that. And of all of the online services, if you buy and sell stock on your own, which I know you and all your guys do, the one that handles it best online is. is Folio FN, much, much better than Schwab or any of the other ones. They make it very, very easy for you to vote. And that's one of the things I will be talking about, is encouraging the places that make their services available to retail investors

to be as good at what they do as folio. But also, I would like to see shareholders get more involved in, say, filing shareholder proposals. Right now, I don't think this is a bad statistic, but right now I think something like 42% of all shareholders. proposal filed by individuals are filed by just two people, one of whom will be appearing with me. I don't think that's a problem. People are either interested in that or they're not, and the proposals aren't going anywhere unless they get support of the voters. So that's okay.

But I would like people to feel more comfortable if they're unhappy about an issue that's going out at a company that they could file a shoulder proposal. And I'm going to be talking with the SEC in my testimony about some ways I think that they can make it easier. And that should be a push-button thing as well. Some of these rules about proxy proposals have nothing changed since 1947. Well, I mean, come on. Have there been a lot of changes in the business world since 1947? Yeah. One of the other issues that you focus on is CEO compensation,

and there's an interesting story recently from the investment banking industry. Rich Handler is the CEO of Lucadia National, and he's in the news because he just turned down a performance-based cash bonus of more than $2 million after the bank had a pretty bad fourth quarter and, frankly, a pretty bad 2014. First, were you surprised that a CEO turned down a bonus? It happens every once in a while. You know, it's sort of like spotting a white bald eagle or something.

They happen every once in a while. And it's always very encouraging when they do. And especially when it does get this kind of press, you know, it puts, I hope, some pressure on some of the other ones to do the same. I was sort of torn when I read the story because on the one hand, it is refreshing to see that. It is, in some ways, surprising to see... Yeah, on the other hand... It was a terrible year!

Well, no, on the other hand, what is wrong with the way they designed the pay that he was entitled to a bonus after they had a bad year? Someone's got to get to work on that. When you look at sort of the broad business landscape, who are a couple of CEOs who stand out to you as being particularly good... in terms of being good stewards of investor capital. Wow. I'm going to abstain on that one. It's been a while since I've had anybody that I feel all around good about. I think that some of them are good for particular reasons,

but none of them really gets a straight-a report card from me. I've said to you before that founders tend to do better in my books, than people who come in later because, for one thing, they have so much stock that they take it very seriously and so much of their personal reputation is tied up in it. So I'm just going to stick with Warren Buffett. He's always my favorite. Let's get to one of the more interesting battles in the business world, and that is the broadband battle because it's really turning into a clash of the Titans. On one side, you've got Comcast and Verizon and their cohort. And on the other side, You've got the likes of Google, Netflix, Amazon.com.

Where does the fight stand now, and where is this going? Well, I almost hate to say this for fear of jinxing it, but it appears that the good guys are winning on this one. I can see the argument on both sides. This is not an issue that is easy to resolve. And however, I think that treating the Internet as a public utility is the way to go. best thing, the thing that has made the Internet so viable and so robust is that it belongs to everybody equally, sort of like the airwaves did when the original FCC licenses were being

handed out. And when we start giving better treatment to some people than others, then prices are going to go up. I think, you know, I was really offended by the ad that they had in the Grammys by the Broadband for America Coalition. We know who that is. That's the bad guy. That's the forces of evil. That's the empire striking back and saying that taxes are going to go up, which is not at all true and not at all proven, if net neutrality goes through, when in fact they sort of forget to disclose that they're going to yank up the rates and they're going to take that money and it'll be diverted toward them instead of toward the government if it doesn't. So I can see both sides of it, but it seems to me that the pro-net neutrality side is right. and I think that the president and mostly the voters get a lot of credit for really holding the FCC's feet to the fire on that. You're listening to Motley Full Money talking with Nell Minow, corporate governance expert and film critic.

Before we get to the Academy Awards, Amazon recently announced it's going to start producing up to 12 movies a year. These are movies that will be shown in the theaters, and then a couple of months later be available to members of their Amazon Prime service. First, do you think theaters are going to go for this? Look, theaters just care about one thing. They care about content that is good enough that people will buy tickets to go see it. And the quality of the work that Amazon has produced so far with Mozart in the jungle and transparent, not all of them have been good, but they're, batting average is higher than the networks right now. And the level of people that they've got working with them is extremely impressive, just like Netflix. So yeah, I think that the theaters

will love it. And I think it's good for everybody to have that kind of competition. Is this, in your memory, the best possible time to be an actor or director or screenwriter? Because it seems like in terms of opportunities, not necessarily in terms of the paycheck, But in terms of creative possibilities, it seems like the creative community has many more options than just sort of the big traditional movie studios. Exactly. I mean, I interviewed a guy recently who had worked on some of the biggest, budget, highest profile movies ever made, including the Pirates of Caribbean movies. And he just said, I want to get back to basics, and I want to work on just a little movie that I can really be in control of and that it's not a big bureaucracy. And so he made a movie pretty much in his house, which I highly recommend. It's available on Netflix right now called Coherence, a really good thriller.

And the fact that he could go back and forth between these big studio pictures and doing something himself and making it available by going outside the studio system, I think it's just terrific. My daughter, who's a custom designer in Hollywood, just worked on one of the Amazon Prime Pilots, which is based on a book by Philip K. Dick. It's called Man in the High Castle. it premiered last month, and if it gets picked up, they'll make it into a series. I think it's a great system. A little bit smaller than the Academy Awards is the Washington, D.C. Film Critic Awards. You're a founding member of that group. I have to say, I just learned this year,

I don't know why I didn't clue in on this, that one of the awards that's given out is the Joe Barber Award for Best Portrait of Washington, D.C. That was my idea. I love this idea, because Joe Barber, a local film critic to the D.C. area, someone I've always enjoyed whenever, you know, on TV or hearing him on the radio. But do have other, I like the civic pride aspect of this. Have other regional groups picked this up? I'm so happy you brought that. It was completely my idea. I had to persuade everybody else in the group to go for it. But what I said to them is that every year there are movies that come out that portray Washington either as a city or as a political center. and every year there are ones where we just roll our eyes and say, this is just terrible.

I mean, there was a movie that came out two years ago that had the Capitol building surrounded by skyscrapers. Yeah, that's, yeah, no, that's terrible. Oh, this must be a state capitol. It looks just like the Capitol building, but there are skyscrapers there. I mean, people make these big clangor mistakes about Washington, and I'm not just talking about the Metro coming up in Georgetown. I mean, really crazy mistakes.

So I thought, well, let's really try to promote the movies that, I actually suggested we have a best and worst, but we stuck with just the best. And we named it for the late Joe Barber, who was a wonderful member of our group. And, yeah, I'm really thrilled that we give out that award. And in past years, we've given it to things like The Fog of War, which was the Robert McNamara documentary. And this year, I was thrilled that we gave it to the movie I voted for and that I lobbied for, and that was a Captain America movie. I mean, they had a huge superhero battle on the Whitehurst Freeway, which was awesome. Your enthusiasm is infectious.

Have other cities pick this up? I feel like Los Angeles, New York, they should do the same thing. They should do the same thing. But I don't think that they're portrayed in the same way. You know, Washington is such an icon that I think it gives it. The only reason people hesitated to have the award was some of them said, well, what if one year there's no movie about Washington? I said, I promise you every year this is going to come up, and that will not have. be a problem.

You're listening to Motley Full Money talking with Nell Minow corporate governance expert and film critic. All right, let's move on to the Academy Awards themselves, as we do every year for a few of the major categories. Tell me who you think should win and who you think will win. And let's start with Best Actress. Best Actress is going to be Julianne Moore, and I'm fine with her winning. She was, of course, in Phil Alice. a movie about a woman who gets early onset Alzheimer's.

And it's generally said that it's a great performance in a good movie, and I think that that's a very fair assessment. You could give her an Oscar every year, and it would be okay with me. She is just, although let's not say that about Seventh Son, which is in theaters right now and which is a terrible movie, but she's just so good and has been so good for so long that she deserves it for this movie, and she deserves it for just the arc of her career. Let's move on to Best Actor, which if you believe the Vegas odds makers is a two-man race between Michael Keaton and Birdman and Eddie Redmayne in the theory of everything.

Yeah, six weeks ago, I would have bet the ranch on Eddie Redmayne, and I think I would still give it to him. But I think the smart money right now is on Michael Keaton and a good choice. I would never argue with that. That's a very good choice. It was an extraordinary film. And when it comes to Best Picture, is Boyhood a lock, or is there a good choice? an upset brewing? I think boyhood, I would give at least a 75, 80% chance. There's always a possibility of an upset, but I think people like boyhood. A lot of people, I think, discounted and say that it's a stunt

film because it was filmed over 12 years and just the emotional impact of it from growing up or having this young boy grow up in front of your eyes. When he leaves for college, you know, you're going to really feel it. But I think that there's a lot more to it than that. The movie really rewards you. a second or third viewing because it feels improvised, but that's part of the gift of Richard Linklater who made it. It's not at all improvised. It was all scripted carefully, and I think it's very, very well done. Before we wrap up with a round of buy-seller, hold, what is your undervalued movie of the year? One movie that just not enough people saw. So with coherence, the one that I just mentioned. That was a terrific little movie made on no budget and was very, very, very

very, very well done. They made the low budget into an advantage in a very creative way. So I thought that was just great. And of course, I have to say, because it didn't get an Oscar nomination, life itself, the documentary about Roger Ebert. It's not about movies. It's about an extraordinary life. And it is the best love story that was on screen last year. Yeah, you and I were talking during the break. I was stunned that it didn't get nominated. Yeah, it should have been. And it's better than at least three of the other nominee. All right. We'll wrap up with a round of buy-seller hold.

We'll start with this month. It celebrates 40 years on television. Buy-seller-holds Saturday Night Live getting to 50 years on television. That is a solid buy. That is not going anywhere. I say this as somebody who watched the very first episode and has watched most of them ever since as a continually reinvented place for new talent. to come and bloom and then move on, I think they will be in business for a long, long time.

The books sold more than 100 million copies worldwide, and the movie opens this weekend, buy-seller hold, 50 Shades of Gray, making 100 million at the box office. I think that's a very good bet. That is a very good bet. You know, I have to say something about that, which is that they are very high pre-sales of tickets. and you have to factor in that most of the ticket buyers are women, and that any movie that women like tends to do pre-sales more than movies that men like because women plan. And they call their friends and say, let's all get together and go to the movie.

So whether you're talking about sex in the city or this one, you'll see a very healthy early numbers on it. And finally, coming in March, this film stars Oscar winner Kate Blanchett and is directed by Oscar winner, Kenneth. Brana, buy-seller-hold Disney's live-action version of Cinderella. I'm just going to go with a hold on that. Even though it does have a great cast, I think that we may be saturated at the moment on fairy tales. This has been the biggest number of fairy tale-oriented media, whether it's on television or in the movies that we've had in a long, long time.

We may have reached a tipping point on it. But the short animated frozen film that's going to play it before, Cinderella. That's going to help. And it does look great. If you've seen the trailer for it, it does look wonderful. One of the best reasons to be on Twitter is so you can follow Nell Minow. You get her thoughts on corporate governance movies and a whole lot more. Nell Menno, thanks as always for being here. Bye-bye.

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. Joining me in studio once again, Jeff Fisher, Jason Moser, and Matt Argusinger. Guys, just a couple of minutes. Let's get to the stocks on our radar this week. Matt Argusinger, what are you looking at? Sure. Well, I'm a company that we have on our watch list in a million-dollar portfolio, Proto Labs, ticker PRLB, rapid prototyping, low-volume manufacturing company. There's so many

things to like about this company, but in my mind, they're really leading sort of this revolution towards more local, small-volume, customized manufacturing, and they've got a great leadership team. And the results that they reported a week ago were phenomenal. This doesn't sound even remotely like a consumer-facing business. No, no. This is, well, business to business, but I'd say entrepreneur to business. Jeff Fisher, what are you looking at? This may be a form of cheating, but I'm looking at it.

I like it. I shares Russell, on Valentine's, no less. I shares Russell 2000 ETF. The ticker is IWM. So it's an index ETF, but it's a stock. This is a small cap index, and it has been basically flat. Small caps have for about the past year, but they finally hit a new high to.

day. And of course, over the long haul small caps greatly outperform large caps. So if you want some small cap exposure and want to diversify your risk, doing so, IWM is a great ETF to own. Jason Miser? Sure. So one company that I'm actually looking to maybe lob into the watch list arena for MDP is a company called Ellie Mae, ticker is E LLI. This is a mortgage software provider. And having worked in that industry, wait, so it's not connected to the Beverly Hill billies? Thankfully no, Chris. Thankfully.

No. But having worked in that business for a time, helping to originate loans, that is an arduous process with a lot of paperwork and a lot of room for error there. And basically what LMEA does with their flagship product and Compass 360, they standardize this entire process, which is really something that is, that's the direction that this is really moving towards. So they're witnessing a lot of success selling this product. They just turned in another great quarter. High switching costs because you get the folks educated on how to use the software. I think it's a really interesting company. And the ticker?

A ticker is E-L-L-I. All right. That's going to do it for this week's edition of Motley Fool Money. Thanks for listening. We'll see you next week.