Motley Fool Money - Wait and See on Rates and Tariffs

Episode Date: May 9, 2025

Fed Chair Powell and team want to see more before making changes to interest rates, and automakers are an early sign price increases might be coming in response to tariffs. (00:21) Tim Beyers and Bill Mann discuss: - The Fed’s continued wait and see approach to tariff policy, inflation, and interest rate cuts. - Ford’s warning of tariff impacts, and why MercadoLibre is worth a look amid the macro uncertainty. - How Uber and DoorDash are both flourishing as they cash in on the delivery market and consumer laziness. (19:11) Fool contributor Jason Hall talks through his time at Berkshire Hathaway’s annual meeting in Omaha, Warren Buffett’s plans to step down as CEO, and what to expect next from Greg Abel. (31:12) Bill and Tim break down two stocks on their radar: Apple and Ibotta. Stocks discussed: F, MELI, DASH, UBER, NVO, BRK.A, BRK.B, AAPL, BAC, IBT Host: Dylan Lewis Guests: Bill Mann, Tim Beyers, Jason Hall Engineers: Dan Boyd Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, "TMF") do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Rates are waiting on pricing, pricing waiting on tariffs. This week's Motley Fool Money Radio Show starts now. That's why they call it money. The best thing. Global headquarters, this is Motley Fool Money Radio Show. I'm Dylan Lewis, joining me over the Airwaves, Motley Fool Senior Analyst, Tim Byers, and chief investment strategist over at Motleyful Asset Management, Bill Mann. Fools, great to have you both here.

Great to be here. How you doing, Dylan? I'm doing great. This week, we have a showdown in the food delivery market. We're going to be checking in on Warren Buffett's last Berkshire meeting as CEO. And of course, you guys have brought the stocks on your radar this week. We're going to kick things off with Fed Watch 2025. Jerome Powell and his merry band of Fed policymakers got together this week and decided to keep interest rates exactly where they are.

Bill, Powell has been signaling, wait and see. Is that the right move here for Fed & Co? It seems like it. I mean, I would suggest that the president thinks that it is not. It came out pretty hot, calling him a fool for not. not cutting rates. The Fed feels like they're in a pretty comfortable spot. There's still a little bit of inflation that they see, but it really bears remembering that the Federal Reserve is not a, they're not a forward-looking entity. They are in a lot of ways, kind of backward-looking.

They tend to respond to the market rather than impact it. So, yeah, it seems fine to me that they've left rates where they are. There's an awful lot of confusion, and some of that confusion is being brought about by an administration that really seems to love chaos more than anything else. And, you know, the end result for that chaos, they're hoping is lower costs for federal debt. Yeah, and I'll just add here quickly, Dylan. I mean, Fed rate cuts are a pretty blunt instrument, and you want to use them rarely. And so I'm backing Bill on this one. I like that Jerome Powell, is slowing his role. That is exactly what he should be doing. Slow your role. It's a blunt tool. Use it sparingly. And we'll see what happens. I don't expect us to be having a sudden news announcement

about rate cuts sometime in the next couple of months. I very much doubt that. Part of the slow role here is Powell and company really want to see, okay, do tariff stick around? Does that lead to higher prices? Does that create an inflationary environment? Where it might affect the Fed policy and what they want to do with rates. We are starting to see some progress and some updates on the trade side of things, Bill. U.S. and U.K. reaching some early terms on trade and tariffs this week. Headline, most goods from the U.K. coming into the U.S. will face a 10% tariff. There are some carve-outs. I have to be honest, even having spent about an hour reading through this, it is very hard for me to parse what will and what will not be affected by this.

Yeah, it really bears remembering. And I've said this. before, that the tariffs really only have one target in mind, and that is China. So whatever you see happening with the UK, it is in some ways the impact of the U.S. government forcing our allies and even non-alias to choose which, you know, which horse they're going to back. So when you see something like a tariff rate cut between the U.S. and the U.K., you have to keep in mind that the biggest game in town is the impact of the U.S. and China tariff war, if you will. Yeah, and can we just be quick on this, Dylan, like, I think the word deal in the U.S.-UK. deal is doing a lot of heavy lifting there because this isn't really a deal yet.

I mean, it might be a deal. It could become a deal, but it isn't really a deal here because let's be clear. percent tariff, still there. You know, there are maybe some carveouts for different things. But essentially, Bill's got this right. What we're trying to do is just curry favor, create allies. It would be, and there is some wisdom to that. I mean, there is a lot of chaos from the Trump administration. But if you are intending to try to bring China to the table and bring better terms for the world and particularly for the United States, you would be wise to have allies in making that, you know, argument, making that, making that play. And so here's a chance to try to create

some allies. How, rather than deal, agreement in principle. Why don't we go with agreement in principle? Okay. Are they chips or are they fries? I mean, yeah, the nomenclature doesn't matter. It's just you've got to keep your eye on what the ultimate goal is here. And it's It's really interesting to see as we are recording the president saying, hey, maybe 145% wasn't it. Maybe it's 80% and people are noticeably going to say, well, he's caving. The Overton window is moving on what tariffs should be. And so everything that you see has to do with statecraft and what is happening between the United States and China. Throughout earnings season, we have been looking at how companies are processing that and what they are, for

forecasting what they're signaling to the market. We had Ford weigh in with their results and also with some commentary on the macro. And a lot of attention on the automakers. Bill, when Ford reported, they said, hey, we're expecting a $2.5 billion hit due to tariffs. Not as bad as what GM had signaled, but still a sizable effect for this business. Yeah. And one of the things that is true about autos is that even the ones that are American nameplates, a huge amount of the input will come from other countries. In this case, for Ford, mainly Canada, and obviously there's been a huge amount of discussion about the appropriateness of having us of us having tariffs with literally our largest trading partner. But this is an outcome of that. You're already seeing some

recognition of the damage that is going to come for a company like Ford. The market seems to be responding somewhat calmly, I would say. And I think that has to do with the fact that there is either a recognition or a hope that's something that will get done there that will take the pressure off of a company like Ford. In addition to the tariff hit, they also noted, hey, we are going to suspend some of our guidance. And so far the starting season, we have seen management teams handle the tariff situation differently, Tim. We've had people suspend guidance. We've had teams say, hey, we're going to provide multiple forms of guidance based on different scenarios we can anticipate. Some have made dramatic changes to outlook. For companies in your

portfolio, the management teams behind them, what are you looking to hear? Well, I'm looking to hear as much honesty and transparency as possible here. An area that I cover where this is happening with regularity is the semiconductor market right now, both NVIDIA and AMD, you'll remember, Dylan, because I think we talked about this somewhat recently, they had to say, hey, look, because of export restrictions, we are not going to be able to sell some chips that were designed to sell into the Chinese market. We thought we were going to have, I think in NVIDIA's case was about $1.5 billion worth of chips that they have essentially just written off. And in the case of AMD, it's about $800 million. So I just want clarity. I want clarity and transparency

as much as humanly possible. You're not going to get it perfect. Just tell us what you're facing and how you intend to deal with it. And that is probably the best that these management teams can do. Because again, I'll go back to what Bill said earlier. This is an administration that just can't. I mean, they are rolling in chaos and loving every second of it. They're like living their best life, just throwing chaos left and right.

But I think, I mean, to be fair, that is part. part of what they believe they should do, whether or not that proves to be true? I don't know, but amidst that, management teams need to be transparent. With the challenging environment here in the U.S., investors have been looking for businesses, not as reliant, not as exposed to U.S. trade. And, Tim, we got an update on one of your favorites in that zone this week. This is one of my favorites, too, Mercado Libre, one of my biggest holdings. What's going on with the business? I mean, it's just crushing it here. I'll give you some more. overall top line numbers here. Then I'm going to focus in on one that I think is particularly important.

So 13.3 billion in overall revenue. If you just go on a pure basis, that's up 17%. If you, you know, do foreign exchange neutral because currency, I mean, Bill can tell you this. Currency is crazy throughout South America. So it was up 40% on a foreign exchange neutral basis. total items sold 492.2 million, total transaction, you know, total payment volume, 58.3 billion, that's of 72%. But here's the one I want to focus on, Dylan, because it is increasingly true about Mercado Libre that they are becoming a fintech. They are becoming a provider of credit for consumer markets where they operate, particularly in Brazil and Argentina, but also Mexico, that credit portfolio now is $7.8 billion. They have scaled to become a

credit provider in these markets at an astonishing rate. And I think that deepens the moat from Mercado Libre. This is a fairly recent rule breakers recommendation. Part of the reason for that, Dylan, is that we think the moat is getting deeper here. It's not just because of the macro. The moat seems to be getting deeper here. As much crazy as happens in South America with just the chaotic financial markets, currency fluctuations, there's a lot of things. You have to remember, at least for me, what I remember as an investor, is that Mercado Libre is good at this. They have handled this for a really long period of time. They know how to deal with the various machinations of the markets that they are in. And they're doing really, really well here. So great, great business.

All right, we're going to take a quick break. We're going to be back in a minute with Uber and DoorDash duking it out to be your go-to delivery app. Stay right here. You're listening to Motleyful Money. In a world full of noise, long-term thinking stands out. On the Capital Ideas podcast, Capital Group leaders explore the decisions that matter most in investing, leadership, and life. It's a rare look inside a firm that's been helping people pursue their financial goals for more than 90 years. Listen to the Capital Ideas podcast from Capital Group, published by Capital, Capital,

Client Group, Inc. Welcome back to Motley Full Money. I'm Dylan Lewis, here on air with Bill Mann and Tim Byers. The battle to earn share of human laziness continues. DoorDash and Uber both out with their earnings reports this week, giving us a glimpse into the ride hailing and food delivery industries. Tim, DoorDash, the Pure Play here, shares down about 10% after they reported. On the surface, this looked like a pretty good quarter.

What's a good quarter? I love that they are cashing in on human laziness. That is accurate. Factually correct, Dylan. Here's what I want to focus on. DoorDash has decided to spend $5.1 billion of its $5.8 billion in cash and investment, short-term investments, on acquisitions, two of them specifically. Deliveroo provides DoorDash-like local commerce to primarily in the Middle East. So expanding their footprint. I think that deepens the mode a little bit. I find that pretty interesting. That was about a $3.9 billion of the 5.1. The other 1.2 was for 7 rooms. which is a New York City-based provider of hospitality software for doing things like

improving in-store sales. The revenue was up, good free cash flow, good business. I like that they are trying to do reasonable acquisitions that can expand their footprint. I mean, it might be an opportunity with the stock down like this, Dylan. Bill, looking at a company like DoorDash, you know, digital business, not subject to tariffs in the traditional sense, but still very much subject to the macro environment and input costs. When you look at what they were talking about with the quarter and what they were forecasting out, what are you seeing? For the life of me, I can't really figure out how DoorDash's

shares are up and the business is up when every restaurant that I'm tracking is down. It feels like this is a symbiotic relationship between the two, but maybe it's not. Here's what I wonder about DoorDash. I would love if they would give a little bit better. information on sort of the, they do give average ticket size information, but I'd love to know what the spread of that is, because I actually have this pet theory that people are much more inflation agnostic than they let on by virtue of the fact that so many people do things like order coffee and use DoorDash and order smoothies and use DoorDash. I would love to know with those like sub-6 dollar tickets, how many of them there are. That is the pinnacle of laziness right there, Bill.

100%. Right. I guess laziness may be amongst the most inflation-resistant materials that there are then. Oh, I love that. I think we need an indicator for it. I'm all looking at Uber and the results there, a little bit more ballast to this one because they're also in ride-hailing, and that's a very large part of their business. It seemed to me like a business as-usual quarter here, Tim. I mean, it did, but let's stick with the theme here, because how about a hand for Uber eats? That was the category that led for Uber, up 22% in constant currency, adjusted EBITDA, which I know adjusted, terrible, they just out all of the important things, blah, blah, blah, still up 45%. So it's a bogus metric, but this business is getting stronger. And I have to say, Dylan, I mean, they have been on a role for a while now. And this is a scale business, but they're another one.

They are operationalizing laziness in the best possible ways. So putting the results here for these two companies together and zooming in specifically on the food delivery business, DoorDash did $23 billion in orders in the most recent quarter. Uber did $20 billion in delivery bookings. That is specifically their Uber Eats business. a couple years ago, if you were to ask me, I would have said, inevitable that Uber takes over the space. They are a bigger company. They have done this before in ride hailing. DoorDash is bigger and growing faster. Bill, what are they doing right here? Well, I mean, in some ways, you don't have to do much when you have that level of scale. What we really have now in the U.S.

at least is a duopoly. And so I don't know that DoorDash and Uber have necessarily competed out against each other, but they've run every other alternative business out of town. They've done it with their relationships. I think that they've done it with their service, although, you know, again, I'm not someone who has smoothies delivered to me. And I think that they've done it really with. You could admit it. Come on, admit it. Doesn't make you a bad person. There was that one time. There was that one time, Tim. They've really done it with their relationship, and oddly enough, with their pricing and ubiquity. And I think from here, you've got the duopoly in the U.S. I know in other countries, you know, Tim brought up Deliveroo, but I think that's really what

you've seen more than anything else. We need to give just some credit to the paradigm shift that's happened here. I mean, in some ways, Dylan, this is a testament to what happens when paradigms shift. what I mean by that is habits change. And so we've been talking about, I mean, we've been joking about operationalizing laziness, but that is habit change. Habit change has come. I will tell you something, I'll confess one, something that I use DoorDash for. You know what I use it for? About $20, $25 orders to deliver flowers. Great flower delivery, amazing flower delivery. And it's just an alternative. It's disruptive. But it's just interesting. Last Mile logistics works when habits change.

And I think that's a big part of the story, Dylan. Tim, you just gave me the perfect tee-up to remind listeners, Mother's Day is this weekend. So if you're running late, if you haven't gotten it together, maybe take Tim's advice and DoorDash and Flowers. They will save you and make you the son or daughter that you want to be to your mom. That's right. That's right.

Bill, wrapping us up quick here. We also had an update from Novo Nordis this week. This is supposed to be one of the great growth opportunities out there in the market with the GLP1 drugs, shares down more than 50% from highs. What's going on? Nova Nordisk is quite literally a one product company. I know they've got a portfolio, but semaglutide is their cash cow. You have the Inflation Reduction Act in this country. Pricing in the U.S. is coming down. They are directly in focus. They did meet their earnings. They had an okay report. But I think that people are starting to look at the GLP1.

drugs and beginning to differentiate. And it just seems like Lily has a, you know, has a superior application to Nova Nordisk. And I think that there is trouble ahead for this company. All right, Bill, Tim, we're going to see you guys a little bit later in the show. Up next, we've got the scene from Omaha from a fool that was on the ground for Berkshire Hathaway's annual meeting. Stay right here. You're listening to Motleful Money.

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Go to QINCE.com slash motley for free shipping and 365 day returns. Quince.com slash motley. Welcome back to Motleyful Money. I'm Dylan Lewis. Last weekend was Berkshire Hathaway's annual meeting, the Woodstock of capitalism. Motleyful contributor Jason Hall was in Omaha. to get in on the three days of stocks, snacks, and Buffett. Jason, this was a particularly momentous year.

You were on site for Warren Buffett, officially passing the torch to Greg Abel. Spin me some yarn. What was it like? I was, and the momentous thing was not the two pounds that I've gained since getting home eating C's candy. So I was at the Berkshire meeting that was Charlie Munger's last meeting a couple years ago before he died later that fall. Of course, after coming in this meeting, we're wondering if the board's going to let me show up anymore. I think they probably will. But we decided to go. A few of us went because a little bit of

the expectation that this was a good chance, Buffett turns 95 later this year, that this was probably his last meeting as CEO. We were not expecting him to retire or make any sort of announcement, so much so that we were actually in the exhibit hall when it happened. We stupidly made the decision to try to get ahead of the crowd. We didn't expect anything to happen. Jeff Santoro, one of our colleagues here at The Fool that was there with us, was smart enough to have his earbuds in and listening to the live stream on his phone. And then he just stopped and got this look on his face. And we're all like, what's going on here? And then he started repeating what Buffett was saying about it being time to let Greg Abel take over. And then I just took a moment and stopped.

And I looked around the hall at all of the people walking around, the hundreds and hundreds of people in the hall that had no idea that everything had changed. But at the same time, it was kind of a reminder that nothing had really changed. Yeah, I mean, Buffett has long said that, you know, he likes businesses that a ham sandwich could run. And I don't think would feel like his ego is too bruised by saying, you know, that that's what he is intended here with Berkshire, that someone else can take it over. We view it as a very complex business. But I think he would like that to be almost a non-issue, the fact that he is transitioning the leadership over to Greg Abel. I think that's right. It is complex because there are hundreds of operating businesses, but most of those

businesses are actually relatively straightforward and simple. The decentralization of the operators of those businesses, making the decisions and not having to phone HQ to get instructions for what to do is absolutely built into the business. And that certainly simplifies the process. And the other thing, too, is, Dylan, this has been in the works for a decade, more than a decade. We can go back to when Ted Westler and Todd Combs came on in 2010 and 2012, they both have taken on a lot of responsibility with running different subsidiaries, having those CEOs of the subsidiaries report to them. On top of they're taking on some of the portfolio,

Greg Abel's been the key contact for the Japanese trading companies that Berkshire has significant investments in for multiple years. So it's not like he's just handing in the keys at the end of the year and everybody has to figure out the combinations to the safe. Everybody's already doing other things. So I think that that helps simplify things as well. There are a lot of businesses that are certainly brand name-wise at Berkshire Stature that have struggled tremendously when it comes to succession.

I'm thinking of Starbucks. I'm thinking of Disney. You talked a little bit about the planning process here, but we watched the market weigh this in real time on Monday when it opened, processing this news. Market was down about 5%. But it was not a huge sell-off for Berkshire shares. I think, you know, by and large, people knew that at some point this was coming. And the market seems pretty happy with Greg Abel as the name

replacement, what kind of lessons do you think we can draw from the way that Berkshire's handle this? As a starting point, it's having a plan and to be thinking and looking and acting for things that are going to happen well in excess of your likelihood of being the person making the decision. One of my favorite Buffett quotes is somebody sitting in the shade today because somebody else planted a tree a long time ago. It's one of my favorite quotes. And it's a reminder of being able to truly think in the long term. And that's not next year. It's certainly not next quarter. It's thinking in decades and even sometimes in centuries and how ingrained that is in the DNA of the Berkshire that Buffett has built. That is an all-time favorite Buffett quote. And he certainly

does not need to add to the anthology of quotes. But he is still going to talk and still going to have his isms here and there. Before we get into the future of Berkshire, any bits of wisdom from this year that you thought were particularly appropriate? Yeah, he's kind of become the Greg Maddox of of quips here. He might not have the fastball, but man, he can still locate a pitch like nobody you've ever seen. There were two that really stood out to me that were my favorites. My first one was, I'm somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I've ever made Berkshire. Steve picked Tim out to succeed him, and he made the right decision. Nobody but Tim could have deployed, could have developed it like it has. So that's,

That was the one that really stood out to me the most that he said. The other quote that really stood out to me was we are very patient when we are looking at opportunities and we want to act quickly. But while we're being patient, never underestimate the amount of reading and work that is being done to be prepared to act quickly because we do know equities in a variety of private companies that when the opportunity presents itself, we are ready to act. So we think about a lot of times that Berkshire doesn't move quickly on things. They're slow.

They're stodgy. But they can move quickly. We've seen them do it. And it's the work that they put in before that matters. Here's the thing that stands out. That was Greg Abel that said that, Dylan. That wasn't, that wasn't Warren. A sneaky there. Good way to tee that one up. What I like about that Apple quote and the focus on Tim Cook is that's probably one of the most successful succession stories of the last 20 years, where you had someone who built a visionary type approach to product, created incredible consumer products in everyone's homes. And a lot of people worried about what that would look like in the next chapter, found the perfect operator to efficiently manage that business and move it forward. Is that kind of the story and the expectations that Berkshire investors should have with Greg Gable?

Yeah, I think so. So there's something that Greg has in common with a lot of other operators running a lot of the subsidiaries of Berkshire that a lot of people don't know. Buffett wrote about the founder of Forrest River and the annual report this year that just Pete Legal, who just died late last year at 80, who sold the business to Berkshire and continued to run it for the next nearly 20 years after selling the company. There are a lot of those people. It was only a couple of years ago that Greg Abel sold his stake in Mid-American Energy to Berkshire Hathaway. He came to Berkshire in 1999 with Mid-American Energy, which he had a substantial stake in. There's very much a founder's mentality and owner's mentality.

across the executive team. And I think Greg Abel is just very emblematic of how important that is to the culture of leadership, not just at the corporate office, but going down to the subsidiary levels as well. Let's talk a little bit about the state of Berkshire as a business and what Greg Abel is inheriting here. A lot of operating businesses, about 190 by my account, trillion dollar market cap, which will make getting bigger a little bit tougher. There's a decent amount of cash that may be understating it, about $350 billion in cash for the business right now, that is a blessing, but it also invites so much speculation as to what is next because it's seen as this huge opportunity. I'm certainly guilty of wondering what's on the shopping list. Are you thinking

about that at all? A little. I think the thing I'm thinking about more right now, though, is thinking about those operating businesses. More than half of them, their earnings declined from the prior year in 2024. A lot of retail, a lot of manufacturing, a lot of exposure to the economy. that I think investors should remember, this isn't a recession-proof business. It's very resilient because they're well-run and they have that incredible, incredible balance sheet. But I'm really thinking about that. But I do think there's one interesting thing about that big pile of money. It's call it $350 billion that they could put to work just in cash right now. And that's not even included the debt that they could get access to, but just writing a check and the check

not bouncing. There are 474 companies in the S&P 500 that by market cap are small enough for Berkshire to write a check for today. I mean, I mentioned Starbucks and Disney, combined market caps smaller than $350 billion. Oh, they can buy them both. Yeah. I can buy them both. But here's the thing. I don't think they would want to buy the problems those businesses are having, right? That's the thing. I think the move that we're going to see is when there are things that the company can buy, that are wonderful businesses that will compound and generate wonderful, wonderful cash flows, and the prices are reasonable. Burkshire hasn't bought any of its own stock and almost, and it's

spend five quarters now. So I think that says a lot about where the capital allocators there see value and they don't see a tremendous amount. And they're happy to get their 4% yield and just keep waiting until the bigger fish are biting. Do you think we'll see that dividend? People have been wondering for a long time as that cash file has gone up. All right. So look, here's the thing. Buffett is stepping down as CEO at the end of the year. He's not stepping down as chairman. And I believe he's going to stay chairman as long as he's alive unless he's, you know, incapacitated. I expect they're going to have to wheel him out. I really do. I think once he's just the chairman, that happens. Guess who decides about the dividend, the board, not the management.

So I don't expect that that less cash efficient thing is going to happen as long as they've got the skilled capital allocators there that they do have in Ted and Todd. And Abel is, we've seen how incredibly patient he is in deploying a lot of capital into the energy business. So go buy another stock. want a dividend people. I'm going to put you on the spot here. $350 billion in cash, they could go on one heck of a shopping spree. If you could snap your fingers and either create a large holding for Berkshire in a business that's publicly traded or just put Berkshire in a position where they can own that company outright, what business would be? I think an interesting fit that might fit under the purview and circle of confidence of these new larger capital allocators might be something like

Adobe or Autodesk. Software, recurring revenue, massive economic moats, very good margins, great operating cash flows, converting lots of free cash flow to feed that capital allocation engine. Let's think a little different. Maybe look at some big software companies. I mean, Apple was one of the best performing Berkshire stocks for a long time. Maybe there should be a little bit more tech in the portfolio, Jason. There you go.

There you go. Jason Hall, thank you so much for joining me. And please, please warn the Berkshire board if you plan on attending any more annual meetings anytime soon. I will. Well, to share one last quote here, and this is it, because this is something Buffett talks about, and I think the board is thinking about that at the health and safety of their executives, if you're going to have your life progress in the general direction of the people you work with, you admire, and you become friends with, there are people that make you want to be better than you are, and that you want to hang out with the people that are better than

you are, and that you feel are better than you are because you are going to go in the direction. of the people that you are associated with. Jason, you are better than me, and you make me better. Thank you for joining me today. Thanks, Dylan. Coming up next, a couple other people who are better than me. We've got Tim Byers and Bill Mann back with the stocks on their radar this week. Stay right here.

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See our full advertising disclosure. If you're listening to the podcast version of this week's radio show, check out our show notes. And Dylan, I serve as the chief investment strategist of Motley Fool asset management LLC, an affiliate of the Motley Fool. While affiliated, MFAM is a separate and independently regulated entity. None of the investment decisions made at Enfam involve individuals from the Motley Fool's media or business operations. As you know, Dylan, all of Motley Fool money management operates independently in this way. Those are our P's and Q's. I'm Dylan Lewis, joined again by Tim Byers and Bill Mann. And gentlemen, I talked Berkshire and the annual meeting with Jason Hall in our last segment. He was on the ground at the annual meeting. You guys were following along at home. Buffett News, obviously huge. Bill, any reflections for you on the state of Berkshire? I mean, he was kind of on the ground, right?

I missed the actual? Yes. Like, this is the own goal we've all been waiting for. Right. This was the great pumpkin Charlie Brown times a million. Yes. I can tell you a certainty that Jason will never leave a game in the fourth quarter with two minutes left for the rest of his life. But he was there for the vibes.

He was there for the atmosphere. He just wasn't there for the announcement. You could sense it was coming and not just because of the realities of the actuarial table. I mean, Warren Buffett is 94 years of age. And we sensed last year that he was slowing down. They did not get into the thing that people wanted to talk about the most, though, as much as I thought, which was the $340-ish billion cash award that they have built up, a lot of which coming from their sale of Apple in this last year. I think that he is leaving that discussion to be the first set of decisions that Greg Abel will make when he steps into the chairman's role. It's a huge, huge obligation for him. But Berkshire has always described that cash as a weapon to be deployed during opportune times.

And they don't see this time as being opportune for that. And I completely respect the fact that they are still leaving that on the table for future. times when it's more ideal. I think that decision about the cash is going to be over in 30 seconds that Greg is going to say, yeah, we're not paying a dividend and we're going to wait and we're going to wait until we get the right opportunity. There's a bunch of people that are thinking, okay, here we go. Here comes the dividend. And I like, sorry, that it's not happening. That is my reckless prediction for this show. No chance is that happening anytime soon. So, Tim, you're saying, meet the new boss, same as the old boss when it comes to capital allocation at Berkshire. 100%.

All right, let's get over to stocks on our radar this week. Our man behind the glass, Dan Boyd, is going to hit you with a question. Bill, you're up first. What's you looking at this week? Mine is a little fruit company called Apple. Maybe you've heard of it. It is one of the largest companies in the world. I don't know that people have really focused on the implications of the court finding with

Spotify that is taking away potentially a pretty big, extremely profitable cash flow stream for Apple. It just doesn't seem like something that people have focused in on. You would love with the App Store, if you are a shareholder of Apple, for that cash flow stream to be as high as possible because it literally comes with minimal effort from Apple. So I think that that's something that people are going to want to pay attention to in upcoming months. All right, Dan, Bill is zooming in on the Apple tax. Their commission over on the App Store. You got a question?

You got a comment on Apple this week? I mean, what can I say about Apple, right? Like, oh, their stuff is too expensive. Oh, it's just flash. It's no substance. None of that matters. It's Apple. Right?

It's Apple. Like, is anybody selling Apple? I guess Berksor did, but come on, gang. There's that one guy. There's that one guy out in Omaha. In what might be a radar stocks first, I think Dan just answered his own question right there. Yeah, I don't know. Maybe I should think about it more, but, you know, me and thinking, we don't go too far back.

Virtually unprecedented. So, Tim, I don't know what that means for your setup here. I don't know if you have a hard assignment or an easy one here in pitching Dan for your radar. Oh, I assume nothing. I assume nothing here. But I do assume, except for one thing, I will assume, Dan, that you like saving money. I think you prefer to have more money rather than less. Well, I don't have any Apple products here at home except for the ones that The Fool has given me, so that I think that tracks, yes. Okay. So my radar stock here, Dylan, is I Bata. And it is literally for the statement, I bought a thing.

relatively recent IPO, about 12 months ago, this is a cash redemptions business. You have an app, you know, scan a receipt. And on that receipt, if there are offers, so say like you have bought some Ritz Crackers and there is a dollar redemption on Ritz Crackers, you get a dollar. Now, there's a bunch of companies that do this. Here's why I Bada is different and better and interesting to me. They have huge, huge distribution deals. Let me give you to the, One is more recent than the other. Walmart's a big one from about a year ago. About three months ago, they just got Instacart. So what this means is that if anybody is trying to win the shelf space war, and the shelf space war is digital right now, we're increasingly shopping on apps or shopping on the computer,

it's Ibata that is creating the coupons there. It's good business, and I think it's only going to get better. Dan, a question or a comment about Ibata? Well, unfortunately, Tim stole my joke. I was going to do an I Bata. Like, oh, I bought a bunch of stock today. Hey, how you doing? But he stole that from me. So I'm just going to point out what Tim did not mention that I Bada is actually a Denver, Colorado company. And so I'm going to chalk this up, Dylan, to flagrant homerism from Mr. Tim Byers. Guilty as charged, Tim? Guilty is charged. You know, I'll bring us full circle here for, second. I Bada is an app, and if I'm not mistaken, subject to the Apple tax and the commissions that come in via the app store. And so, as Bill noted, if those go down, I have to think that that is good news for IBata shareholders, Tim. Hey, I mean, from your mouth to God's years and Ibada's bank account. Dan, which one's going on your watch this week? I, you know what? I'm just going to

go I bought it because I want to. It's fun to say. And really, that's all that matters. Dan, appreciate you, Wang in. Bill, Tim, appreciate you guys bringing your radar stocks. That is going to do it for this week's Molly Full Money Radio Show. Show is based by Dan Boyd. I'm Dylan Lewis. Thanks for listening. We'll see you next time.