Motley Fool Money - Walmart, Etsy Face Tighter Wallets

Episode Date: February 21, 2025

The key in retail right now? Multiple business segments that can carry companies through reduced discretionary spending. (00:21) Asit Sharma and Jason Moser discuss: - Walmart’s approach to tariffs, and what their results – paired with earnings from Etsy – say about the state of the consumer. - How MercadoLibre’s multi-pronged strategy keeps pushing it to new highs - The real opportunities the market is giving investors with Wingstop and Block, and why investors should continue to be careful with China’s large tech companies. (19:11) To celebrate his 500th Rule Breaker Investing episode, Motley Fool co-founder David Gardner and friends Randi Zuckerberg and Morgan Housel talk about some of the enduring lessons from their time in college, where they look for true insight in the world, and a fun way to use AI for perspective. Catch the full episode here: https://www.fool.com/podcasts/rule-breaker-investing/2025-01-22-three-fools-with-morgan-housel/ (31:50) Jason and Asit break down two stocks on their radar: Axon and Airbnb Stocks discussed: WMT, ETSY, MELI, WING, SQ, BABA, AXON, ABNB Host: Dylan Lewis Guests: Asit Sharma, Jason Moser, David Gardner, Morgan Housel, Randi Zuckerberg Engineers: Dan Boyd, Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

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Macro wonks watch the Fed. Retail wonks, watch Walmart. This week's Muttlyful Money Radio Show starts now. That's why they call it money. Cool Global headquarters. This is Motley Fool Money Radio Show. It's the Motleyful Money Radio show. I'm Dylan Lewis. Joining me over the Airwaves, Motley Fool's senior analyst Jason Moser and Asset Sharma. Fools, wonderful to have you both here. Hey, hey, great to be here. This week, we have a comeback story brewing for one of China's biggest companies, some wise work. from Motley Fool co-founder, David Gardner and friends. And of course, the stocks that you'll be bringing that are on your radar this week. We're going to pick up this week, though, looking at

retail update from the largest brick-and-mortar retailer in the United States. That's Walmart. And Jason, the market, not exactly buying what Walmart was selling this quarter with their earnings. Consumers are buying a lot of what Walmart is selling. That's for sure. I mean, this was, I thought a good quarter they met and exceeded expectations, but there's always the case. Investing is about what are you going to do for me next, right? Not what have you done for me lately? And I think language in the call says that leadership expects things to slow down a little bit this year. At least their outlook was a little bit more conservative than was expected, which is understandable. But the numbers I thought were very encouraging, especially for a business, this size.

Sales grew 5.2%. They saw adjusted operating income up 9.4%. The U.S. comp sales, increased 4.6%. And that included e-commerce sales growth of 20%. But the comp growth, generally speaking, that was led just by transactions, right? Growth in transactions, it's not a concept where you're going to see a lot of increase in pricing, like a Chipotle, for example. But they saw modest gross margin expansion, inventory levels in good shape, inventory up just 2.8%. Something that really stood out to me that I saw on the call. Over the last year, global advertising, for Walmart has grown 27 percent to about $4.4 billion. I mean, this is a company that's really making a lot of strides here in their advertising

business. And then a global membership income grew 21 percent to about 3.8 billion as well. Global e-commerce penetration is now 18 percent of sales, and that's about 11 percentage points higher than it was in fiscal 2020. And, you know, another little interesting tidbit I found on the call. I didn't even realize this, right? You just never really thought about it. There's a company called PhonePay.

It's an Indian fintech. Now, Walmart is the parent company of PhonePay, and apparently PhonePay is prepping for an IPO here in the very near future. So that'll be something fun to follow as well. But I just think this is really fun to watch what is just, as you said, a traditional bricks and mortar retailer, and we would just think of this as kind of a place where you just go in and buy stuff. It really has become a lot more with e-commerce, advertising, venture investments and things like phone pay.

I mean, this is the Walmart of the 21st century, Dylan. Phone pay might be a future radar stock. You might have just teased something there, Jason. It absolutely could be. One of the things that we look to with Walmart is signs of what is going on with retail. And as we have looked out at reports and commentary from management this quarter in particular, tariffs have popped up. and we've seen every management company approach this a little bit differently. CFO, Walmart, John Rainey said, we don't have any explicit assumptions in our guidance around tariffs.

Their stance was kind of, we don't know what we don't know, Jason. Yeah, well, and that's a great lesson for investors, too, right? Just be able to get up there and just say, listen, I don't know. It's okay. Go out there and learn. But I did. I noticed that in a call. I thought it was really interesting in regard to tariffs.

They're not terribly concerned. Now, maybe this plays a little bit into their conservative guidance, but they did talk about it the call. They just said, listen, we've been dealing with tariffs for many, many years, right? This isn't something that's just come up, and they're going to continue to keep on doing what they've always been doing. And so while that prospect exists, and it's something that can absolutely play out on the financials here in the near term, it does sound like a management team that's very confident

in how they will deal. with whatever they're ultimately given. When it comes to the interest rate environment, we hang on every word from the Fed. When it comes to the consumer, Osset, Walmart is the Fed. A ton of attention being paid to management's commentary. What's the read for you? I think the consumer, based on management's commentary, is keeping their money close to their pockets.

I mean, Walmart is looking at 3 to 4 percent of revenue growth rate in the near-term future. We expect retailers in the consumer goods industry and the retail side to keep up with inflation. And inflation, I mean, started out pretty hot in January. If you annualize those little numbers, that works out to about 5% this year. So we see that inflation is still very much on consumer's minds. And I think Walmart's outlook just reinforces both the uncertainty from the macro level, but the uncertainty from the individual level. It's not that people don't have money. It's that they don't want to spend. And when it hits Walmart, you get something you can extrapolate to the rest of the economy

as you go up the scale of consumer spend. And I just wanted to say, though, Walmart still is so interesting from its global reach that Jason just talked about. I've been in Mumbai recently where people are using phone pay on the street. So you'll have a physical vendor who has a wooden cart full of bananas, but you can pay him from your phone to his with phone pay. which is actually an ingenious pun in the Hindi, because it actually means on the phone, and it rhymes with pay, like paying someone, phone pay. So a really cool technology, which shows

you their reach and long term, they reach more global consumers. The inflation doesn't matter as much. When we look at the Walmart results, they've been able to continually put up relatively strong results, even given the headwinds, because people have continued to come to them for things like groceries. We've seen the discretionary spend for them come down, but that's been selling that's been going on across retail, and Jason's certainly something we saw in results from Etsy this week. Shares down around 10%. And it seems like it's a lot of that, do I need this type purchase, being delayed for a lot of people.

Yes, that old lesson we teach our kids between needs and wants, right? I certainly understand why the market was less than enthused. I mean, it wasn't a bad quarter by any means, but it was one, I think, that demonstrated some of the challenges that Etsy is facing in the great retail environment. Now, this is a business in a bit of a state of transition. They're making some moves to focus on the longer-term sustainability of the business as opposed to driving near-term results, and that's kind of what we saw this quarter. I mean, the numbers sort of bear that out, too. The consolidated gross merchandise sales of $3.7 billion, that was actually down almost 7%. Although, I will say, revenue grew 1.2%. Net income grew 56%. So that's something. And then the take rate

came in at 22.8% versus 21% from a year ago. But I think something just to take away from the actual company's press release, this number stood out to me. Active sellers and buyers were both down 10% in 1.1% respectively. Now, the buyer number isn't as concerning. That seems in line with a lot of what we're seeing in the general retail environment now. But the seller's number did stand out. That's a big deal. But they noted in the call, this was intentional. They experienced. expected this. They are sort of going through and revamping the seller process. They've set up this new sort of seller onboarding process where there is a seller onboarding fee that comes into play now. That is something that has obviously played out on that metric. It sort of rhymes,

to me, like with PayPal. We saw with PayPal not all that long ago saying, hey, listen, we're going to kind of cut a lot of these users that we have that aren't really using our service. And we want to focus on creating an engaged base with the users that are going to return the most value and continue using our service on a frequent basis. So I understand the challenges that the market sees with Etsy today, but it does sound, at least like these are intentional decisions by management in order to ensure more long-term success for the business. One company in retail that is having a great week, South American e-commerce giant Mercado

Libre, they reported earlier, and the street was all about it. shares up 10%. Asset, I personally love to see it. It's one of my biggest holdings. What is the Amazon of Latin America doing right here? They're executing on a lot of fronts. This is a company, Dylan, that specializes in e-commerce, in fintech and logistics. Revenues were up 37% this quarter to $6.1 billion. And what I saw is they controlled the research and development costs this quarter and also their sales and marketing spend. So that helped operating income grow like two and a half times. to about $820 million.

What is going on here? Lots of network effects. When you put the parts and pieces of this business together, you see sort of a really nice hole where everything is contributing to both the top and bottom lines, and they're targeting more credit card users, and that's leading to more spend across fintech and the commerce ecosystem.

They're making investments in logistics, so that's broadening out their physical reach. And they're also doing very interesting things, with their digital banking. They keep offering higher deposit yields to folks, but that brings more people into that digital banking, FinTech realm, where they can then upsell other services. So all in all, when you put this together, they really have just an integrated system that keeps getting bigger as a platform. A great example of a platform business scaling. All right. Coming up after the break, we'll keep the earnings run down going,

and also look at whether the market is giving investors a nice entry point to the leader in wings. Stay right here. This is 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 Client Group, Inc. Back to Motley Full Money. I'm Dylan Lewis here on air with Jason Moser and Asit Sharma. Football season's over, and we've got a look at the business of Wings. A rough week at Wing Stop. Asit shares

of the Buffalo Wing Focus restaurant down about 20 percent this week. I know that this is one in your portfolio. I'm guessing it hurts a little bit for you. It does, Dylan, but it also makes me more attuned to the opportunity for the long term here. And Wingstop definitely has a long-term story going forward. So what happened this week, reported a great quarter. System-wide sales increased almost 20% to $1.2 billion. They had a great number of net new openings of stores. But looking ahead, comparable store sales are going to be this year in the low-to-mid single digits. So not a lot of growth there. What's underneath that is at least two years of very strong growth in comparable sales.

So you have what we call it a two-year stack that makes comparative growth. to that really hard in the third year. And that's what Wingstop is up against now. But I expected those projections to be a little bit higher than they were. I would have thought, you know, maybe somewhere mid to high single digits would have been more appropriate. And I think the market sense that maybe those same store sales are soft. Now, on the other hand, if you're a shareholder, this is a company that keeps outpacing its store growth projections. Long term, they want to grow their global store count by about 10 percent every year. They have been increasing and increasing their compounded annual growth rate on that front until it all

almost 15% this quarter. There is a tremendous demand in the pipeline for franchisees who realize amazing returns on cash of 50% after just a couple of years. So I think the expansion story for this, or I think the expansion story for this company is still very bright, maybe a buying opportunity for those who want to nibble a bit. Yeah, shares are down about 40% from recent highs, basically back where they were at the beginning of 2024. And the market does not give you a reset all that often. or a time machine type moment where you can go back and get the same opportunity you had before. You feel like this may be a good time for people to put this one on their radar?

I think it's a good time. The hard thing about small companies, which are growth stories, is that they're not linear. So they will have periods where they really disappoint investors and take a tumble. But commensurately, they have times where they take off and then it feels very hard in retrospect to get back in. So I tend to try to take these opportunities as they come with high-quality companies and just add a bit to what I already have in my portfolio. Also, down this week, Block, aka Square, aka your way of paying at the farmer's market, and also the owner of Cash App. Jason, this is one you have followed for a very long time through various evolutions.

What is the company now, and what are they trying to pitch themselves as? Sheesh, man, I'm still trying to get over this football season. It's over a thing you just said. I mean, God, thanks for reminding me. No, I think it was an okay quarter. Obviously, a very tough day for the stock. after the report. It was not going to write home about it. It was okay. I mean, the business continues to execute for the most part. They hit their internal targets, which I think is the most

important part. But clearly, the market wanted more. They grew gross profit, 14% year every year. That was, it broke down with 16% growth in the cash app business and 12% growth in the square business. And they saw a total gross payment volume of just under $59 billion. That was up 10%, which was encouraging. But they didn't know the call that they are looking to accelerate this number. They want to kind of get that growth going again. And they are rapidly scaling, as they said. Their U.S. account executives and field sales teams, expanding their international sales presidents and making more partnerships across the payment spectrum. So I think that'll be an interesting part of the story to follow. Cash app itself, they reached 2.5 million

paycheck deposit actives in December. That was up 25 percent from a year ago. Cash App Card. Now, 25 million monthly active users at the end of the year. And then Cash App gross profit, as I noted, increased 16 percent from a year ago. That was really driven by strength across the entire spectrum there. Cash App card, buy now, pay later, and even Cash App borrow. So I think that really plays into sort of this thesis of Cash App becoming that service for the underbanked. I think for those looking for an easy way to follow this company in the coming year, something

to keep an eye on. They've talked a lot about this rule of 40. And ultimately, this is just taking gross profit growth along with the adjusted operating income margin. You combine those two, they expect them to total 40 or better. Now, they hit around 36, I think, this most recent quarter. But going forward, they really do subscribe to this rule of 40. They believe it's achievable.

They see exiting this year at or above the rule of 40, and executing on a quarterly basis going forward. If that's the case, I mean, that's impressive growth and profitability. And I think the market starts to look at the stock a little bit differently. But again, that's no guarantee right there. They're not really there yet. So if you're looking for a metric to pay attention to this coming year, that could be one to follow. All right, bringing us home on the earnings beat. Don't look now, but one of China's biggest tech names might be making a comeback. Shares of Alibaba up over 10% after earnings this week, pushing the stock up 70% since the beginning of the year. This is not some fly-by-night microcap company.

This is one of the largest tech companies in China, adding $100 billion in market cap in just a few weeks' time. What's going on here? Alibaba had been out of favor, Dylan, with investors and with the Chinese government, which sort of changed its policy directives a few years ago and deemphasized all of these consumer tech-facing companies with swaggering chairman like Jack Ma in favor of industrial policy to try to compete in what we've seen as an evolution into electric vehicles, other kinds of industrial technology. But lo and behold, the government is looking at the success of Deep Seek, and suddenly

they're inviting some of these entrepreneurs back. Jack Ma being seen at a recent meeting with the Chinese leadership after being persona non-grattice for so many years. That's part of the excitement. But also, you know, Alibaba is capitalizing on some trends. Their cloud business is growing with a brisk pace, not quite at the rate that cloud platforms like Amazon Web Services or Microsoft Azure grow here in the United States, but certainly an uptick from former expectations. Their cloud intelligence group grew by about 13 percent year over year. Now, I have to point out that even though this business is growing fast and it is a big business, the cloud group for Alibaba is only about $16 billion of revenue run rate each year. So it's maybe one-fifth or

less the size of the commensurate U.S. heavyweights, but that could be a growth opportunity for investors who are okay with some geopolitical risk that comes as part and parcel with these companies. But Alibaba is certainly showing that it's one of the premier Chinese big tech companies, and investors shouldn't forget altogether about it. You hit on some of the government elements of investing in China. A lot of people have put it in the too hard bucket. Does it continue to stay in that bucket for you right now? You know, it's like on the edge of the Venn diagram. It's too big to ignore.

And maybe it's not too hard. If you have to follow one company, this one might not be a bad choice in terms of being able to understand the business model and deal with the geopolitics. All right, Asa, Jason. We'll see you guys a little bit later in the show. Up next, Motleful co-founder, David Gardner celebrates a milestone with some foolish friends. Stay right here. Be listening to Moutiful Money.

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comfortable one that I own. It's light, soft, and it was a lot more affordable than you think quality cashmere would be. Stop waiting to build the wardrobe you actually want. Right now, go to quince.com slash Motley for free shipping and 365-day returns. That's a full year to wear it and love it. And you will. Now available in Canada, too. Don't keep settling for clothes that don't last. Go to Q-I-N-C-E.com slash Motley for free shipping and 365-day returns. Quince.com slash Motley. Welcome back to Motleyful Money. I'm Dylan Lewis. If you're a long-time listener, you know we've been doing this for a while, but we're not the only ones. Motley Fool co-founder David Gardner just celebrated his 500th episode of his weekly

Rule Breaker Investing podcast. And to celebrate, he brought two friends for a conversation aimed at sharing three stories, one to educate, one to amuse, one to enrich. So best-selling author Morgan Housel and Randy Zuckerberg, former Facebook exec, author of several books, and Tony Award-winning producer, joined him for his first ever Three Fool's Story Show. They talked about some of the enduring lessons from their time in college, where they look for true insight in the world, and a fun way to use AI to get some percent. Morgan, you're up with your first story to educate. I'm calling this the best story wins, and it's a story from back in college that I think

a lot of people will probably relate to, which is now that I'm 15 years or so beyond college, I look back and I say, what were the concepts that I remember that I've learned the most from? And I'm probably not unique in saying, not that many. Not that many. Every formula that I memorized the night before the final, I don't remember. Every long, complicated theory that I was forced to learn. I don't remember them anymore, except for one class. The class was environmental economics, which, to be honest, I don't really have that much of an interest in,

but the teacher did something very unique. on the first day of class, he said, there is no textbook in this class. He pointed to the chalkboard, and he said, I will never write anything on that chalkboard. I'm going to stand here every day for the next semester and just tell you stories about economics. He was a longtime economic consultant. I think he was an expert witness was his job. And he just sat there and told us more stories about how economics actually works in the real world. It was so useful. It was so entertaining. His name was Charles Tucketty. And when I look back at my car, college years, I remember more from that class than every other course combined. And I think the takeaway

from that is people love a good story. They do not want to lecture. They're not good at memorizing formulas over the long term. They will always remember a good story. And you can apply that to almost any other field. And even very technical fields, Stephen Hawkins was a storyteller. Richard Feynman was a storyteller. In physics, the most math-based field that exists, they just told stories. And that's why they were so famous. My friend Nick Majuli wrote a blog post this morning that said, attention is the new currency. And I think that's really true. If you can get people's attention with a story, they will remember it forever. And I think that applies to so many things outside of college, outside of economics. Do you ever correspond with Charles Ducati afterward? Is he listening

right now? And here's the interesting thing. I disagreed with him on a lot of things. He was very political in the stories that he told in a way that I didn't agree with, particularly at the time. but it didn't matter. He told good stories that I remember. Even if I could pull holes in them, I remember them. And isn't there tremendous value in that versus all the other professors for whom I don't really remember much of anymore? I love that so much. And it reminds me of when I was in college, I was in a giant lecture hall. And the professor kept saying, you know, I'm going to be having lunch in this cafeteria today, come spend time with me. And I was like, I'm one of 4,000 people in this lecture. I'm not going to go do that. And at the end of the semester, I showed up for the lunch,

and he was like, you're the first person who's come to see me the entire semester. And like, it just stuck with me so much. So I agree with you. I think sometimes these like unconventional ways of connecting with information or with people are actually our strongest assets. What a great story. And you did just remind me of a moment of my own freshman year, actually sophomore year, Randy, where I met my wife in a creative writing class, didn't know it at the time, but she just said, I invited her for breakfast, like later that week. And she said, no, I'm, I can't. I'm going to breakfast with my professor. And I said, I'm sorry, you're what? She said, I go to breakfast with each of my professors each term. You don't? Wow. Oh, wow. Totally,

you know, same university, but totally different approach. So yeah, you're right, connecting in with people and Morgan telling stories that you still remember and shaped you years and years later. Morgan Housel, are you ready to amuse us? I will try. And this is less of a story that's happened to me and more of an observation that I've had over the years. I call this true geniuses. And I tweeted this many years ago and I tweeted after thinking pretty hard about this, which is that I think the greatest psychologists of all time, which has been important to me because my field is behavioral finance. I think the most insightful psychologist to ever live are George Carlin, Jerry Seinfeld, and Chris Rock. I could put this broader and say, comedians, I think, are the most talented psychologists exist.

And I think they are the only thought leaders who are truly worth paying attention to. And I think there's two reasons for this. One is because what a good comedian does is take something that you already know, you intuitively know, but they put it into words that you have not or could not do yet. So when you're watching a good comedy, you don't need to think is that true. You just sit back and you listen to it. You're like, of course that's true. What you just said is obviously true.

And I've never heard anyone put it into words like you just did. It's just a very effective way to communicate. And they're doing it for things that are really fundamental and important in life. Jerry Seinfeld, he once gave this interview, and they asked him why he quit the show in 1998. Why did he stop? And he basically said, I'm going to paraphrase him, but he basically said that he and Larry David became so famous that they could not, they could no longer observe society without being bombarded. And they said, look, in the early days before they were famous, they would go sit in a deli and watch how people ordered their food and make a skit about that. It was observational. And as he became megastars, they could not go sit in the deli and observe people. They couldn't do it. So he said, he quit the show because, he Because what made them so good at comedy, it was just being pushed to the side. They couldn't do it anymore. And I think the other thing, why people love them so much is because a comedian wants to deliver their insight and just make you laugh, whereas so many other people who are trying to make you smarter want to make themselves look good. It's almost the exact opposite. If you are a PhD talking head going on TV, and look, maybe I would put myself in this category as well, you want to deliver insight by making.

yourself look smart. A comedian wants to deliver insight by making you laugh, the audience member. It is so different and it is so much more effective to do it that way. And of course, I will end with one of my favorite comedy bits that I think is so incredibly insightful if you think deep about it. George Carlin said, have you ever noticed that everybody driving faster than you as a maniac and everybody driving slower than you as an idiot? And A, it's so true. It's so funny, but it is like one of the best ways to contextualize that your view of the world depends on where you are. It's relative to everybody else. And I think you can take that so much broader. I actually took a class about how using comedy in speech writing or even in a board meeting is a superpower. And so I truly believe

that comedians are geniuses and that if you want to connect with people, making them laugh is the best way to do it. Absolutely. The beauty is it really is a gift. I mean, I love the point that you're making Morgan and I too have been a talking head at different points of my life. I think we all have. The difference between trying to make yourself sound smart and making someone else laugh is all about the other. It's not about self-aggrandizement. It is truly giving a give. We all want to laugh. We all love to laugh. You both have made me laugh already a bunch of times and I know I'm not the only one listening in this week, but what a wonderful insight. I thought you were going to say that you've decided that all of the people who are the most important psychologists or scientists in this

or the most, we're crazy. I thought you were going to go that direction because it's probably also true. There are lots of comedians who are also crazy. There's a quote from Chris Rockwood, I love, that he says, anybody who thinks for a living is going to be depressed. He was talking about himself and his own field. Anyone who just sits in a room and thinks about how the world works

is probably not going to be the most happy, joyful person because of it. Great line. And a great way for us to close our Amuse section in this first ever episode of Three Fools. Thank you so much, Morgan. Thank you so much, Randy. We've educated, we've amused two down and rich to go. Morgan, we have you leading off our Enrich section. Are you ready? I'm ready. Let's do it. How much richer are we going to get with this one? Like if you were trying to gauge it. Look, let's set expectations low, but I'll do my best. This is something that I just did a week ago. This is a very recent thing, but it was one of the most

haunting, but I think enriching things that I've done in a long time. I went to Chad GPT, and I fed it a bunch of accurate biographical information of myself through about age 20. I said, this is who Morgan Housel was at age 20. This is where he grew up. This is where his parents were. This is how he did in school. These were his hobbies. A bunch of things that was all accurate through age 20. And then I said, tell me a story about what happened over the next 20 years. So I was starting at an accurate point, and I said, make a story. about how the rest of Morgan's life turned out. And I did this late until the night. My wife was wondering what the heck I was doing sitting in front of the computer so late. But it was so incredible

and haunting, I would say, because a lot of the stories that I came up with were really sad. And stories of how my life spun off the rails and stories of how this didn't happen. And there were tragedies in my life. And some of them were incredible. Some of the stories that came up with I said, man, that would have been a great life too. It was so incredible to think of all the different ways my life could have turned and anybody could do this, of course. And you realize that the life that we have right now is one of infinite other possibilities. It could have turned out an infinite number of different ways, some of which may have been okay, some of which would have been incredible, some of which would have been really sad and bad. And it was, I think it made me

appreciate a lot of the things that I have in my life right now because most of the stories, I did not tell it to do this, but most of the stories at ChatTBT, TBT, came up with were sad. It was, hey, here's Morgan's life through age 20. Here's what happened over the next 20 years. And it was a story of a downfall. I don't know why it did that, but it was, it was haunting because the stories could have been accurate. It was, you know, since I was feeding it accurate information. Yeah. It was going in paths that were almost the path of least resistance of where I was at that age in life. Did you let it know it was you? Yes, I did. That probably has affected a little bit. The Heisenberg Uncertainty Principle, we're changing it a little bit by letting it know, letting it know we're observing and being observed itself. I wonder if Chad, GBT, if you defended it, Morgan, the day before or something the week before, and it was taking a little bit out of it. Like, it didn't have to go negative that much. Yeah. And some of the story, if I remember, some of it was, you know, in the great recession in 2008, I lost my job and I never recovered after that. And I became an alcoholic and whatnot. And some of those that's like, that could have happened.

it usually could have happened. One of them was, I had a great life and I married and had two kids, which is accurate. And one of those kids got cancered and died at age five. And it was one of these things where it's like, look, A, both of those things happened to many, many people. So these are not pie in the sky theories. Again, I think that the point for me was realizing all the different ways all of our lives could have turned out. Listeners, I think we're all glad to be living in a world with the versions of Morgan Housel and Randy Zuckerberg that wound up writing books and the one where David Gardner co-founded The Motley Fool and brings his perspectives on life and investing each week over at World Breakers investing.

Coming up next on the show, Jason Moser and Asset Sharma Return, talking about the stocks that are on their radar this week. Stay right here. You're listening to Motley Fool money. As always, people on the program may have interests in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or something based solely on what you hear. All personal finance content follows Molly Fool editorial standards. It was not approved by advertisers.

The Motley Fool only picks products. It did personally recommend friends like you. I'm Dylan Lewis, joined again by Motley Fool analysts, Asit Sharma and Jason Moser. And Fools, the fried chicken capital of the United States is moving from Louisville to Plano, Texas. Jason, this week, KFC announced the company will be relocating its headquarters to Texas

as part of larger strategic plans by its parent company, Young Brands. I'm going to give you a philosophical question to start here. If the drumstick on your place, is made by a company domiciled in Texas. Is it really Kentucky fried chicken? I suppose, yes, given the roots of said chicken, you know, where they live today, maybe doesn't necessarily change the actual history of the matter here. But, yeah, this is definitely something we're seeing a lot more of it. I thought it was very interesting

that the relocation here, it's ultimately still part of the bigger plan for Yum. I mean, they're going to have two corporate headquarters. There will be the one in Plano, Texas. but there's also going to be one in Irvine, California. So, it's worth remembering Yom, obviously, is a very big company with a number of brands, Pizza Hut, Kentucky Fried Chicken, Taco Bell. You know, Dylan, for me, there was some irony in this one. I don't even know if you know this, but I'm going to go ahead and lift the hood here a little bit. You know where Texas Roadhouse is located, Dylan?

I would have guessed Texas, but now I'm doubting myself. Well, that'd be a fair guess. That'd be a fair guess. Texas Roadhouse's headquarters is in Louisville, Kentucky. I mean, this is like the Bizarro, Jerry. episode of Seinfeld. I mean, up is down. It's just, none of it makes any sense. But, I mean, this is absolutely a trend. We've been seeing play out here recently. I don't suspect it'll stop anytime soon, given the inflationary environment and how companies are looking to find new

ways to become a little bit more efficient. But again, I think it's worth noting that Yom will still ultimately maintain headquarters in both Texas and California. Yeah, Yom, not the only company that has moved to Texas in recent years. Tesla, SpaceX. Charles Schwab, Oracle, many more. And Asset, Texas has over 50 of the Fortune 500 companies there, most of any state. What's so appealing about the Lone Star State? They have these big population centers. Obviously, they've been competing with California, trying to recruit out companies from Silicon Valley with their business-friendly climate, relatively less regulation, maybe better tax environment, depending on how your company is structured.

So they have just a lot of positives that they have been using to make Texas bigger and bigger. I mean, how big can this take it in terms of GDP? But they've been doing a great job. And I think companies on the other coast and Middle America are also looking. Okay, it's not just about you pulling companies away from California. That looks like a pretty friendly place if I want to grow. I'm going to say here, though, I saw this riding on the wall in the early 90s when Kentucky Fried Chicken went to KFC. It does remind me a little bit of the nature of sports franchises.

It's like they are going to move to where the incentives are aligned for them to be. There's not a lot of loyalty here. Even, Jason, to your point about Texas Roadhouse, this is not the first time we will see this when it comes to the name and where the company lives. No question. All right, let's move things over to stocks on our radar for the week, as he does. Each week, Dan Boyd, our man behind the glass, is going to hit you with a question. Jason, you're up first.

What are you looking at this week? Yeah, Dan, this is a company I've never mentioned to you before. It's a company called Axon Enterprise. as ticker as AX-O-N. And while Axon has had a nice year to date, shares are off to a rocky start here in 2025, down more than 25% just this week. Dan, you may be asking why.

Well, I'm going to tell you why. Most of this is due to a headline we got in regard to a breakup in its partnership with a company called Flock Safety. This is a safety technology startup known for its automated license plate reader or ALPR solution. There's a statement from A-L-L-P-R solution. Axon saying that Flock had increasingly imposed artificial barriers on integrations, access to agency-owned data. Ultimately, Axon is just deciding to go its own way.

Now, I think this is an interesting situation here in that, yes, it's an attention-getting headline. However, this could also be a sign that Axon intends to continue building out its own solutions. Now, that can impact growth, of course, in the near-term, but it could also have more positive long-term implications. We know this is a company with grand aspirations that they intend to do a lot of things. So we will learn more about this when Axon reports earnings next week on February 25th. It's also worth noting, I'll say, I'm going to get the great opportunity to speak with president of the company, Josh Isner, again, after the call next week. And we will have that interview for listeners to enjoy. Dan, a nice little preview of coming attractions there.

I'm curious, a question about Axon, ticker AX-X-O-N. Jason, you ever been Tased? I've not. I've not. It doesn't sound like a very pleasant experience. I hear you wet yourself. I've never been tased either, and I don't want to be. I think the company was smart to rebrand to AXon and move away from the Taser branding. I think AXon, not only a more interesting business for a lot of investors with the cloud revenue that's coming in, maybe a little bit more of a friendly brand name, a brand name that people are a little bit more willing to be associated with Jason. Yes. All right. So what do you have on your radar this week? I've never been tased, but I have been exhausted, confused, and dazed. And once in a while when that's happened to me, I found it really great just to relax in an Airbnb

that I have rented. They should call this company Airbnb and dollar sign, but I know the SEC doesn't allow special characters in the ticker symbol. My colleague at the Motley Fool investing colleague Tom King recently reminded me of its virtues, especially its free cash flow generation. This is a cash flow monster. It's generating about $4 billion in free cash flow a year and buying back shares. Now, we all know the regulatory environment about Airbnb competition from other platforms, but this is a company that's slow and steady scaling and is really generating returns for its shareholders. So I'm looking at Airbnb to deliver me some more steady-edy returns in the coming years. Dan, Asit is spitting bars and pitching you Airbnb, ticker ABNB. Question or comment?

Asset, where are you going? You got a voucher for Airbnb anywhere. Where is it? Istanbul, Turkey. And like Jason, you've probably never heard me say that before. All right, Dan, you have a clear negative association with the former name of Axon. I don't know if that's going to play into your watch list decision. You also have Airbnb. Which one are you going with this week? You know, I used to like to travel, but then I had kids, so we're going to go Airbnb. There you go. All right, Dan, I appreciate you weighing in.

Asit, Jason, appreciate you guys bringing your stocks. That's going to do it for this week's about for many radio show. The show is mixed by Dan Boyd. Dylan Lewis. Thanks for listening. We'll see you next time.