Motley Fool Money - Year-End Financial Advice

Episode Date: December 8, 2017

YouTube gets into the music business. Starbucks opens a venti-sized roastery in China. Disney and Fox get closer to a deal. And Walmart makes a change. Plus, Motley Fool CFP and retirement expert Robert Brokamp shares some year-end tips and talks tax reform. Thanks to Casper for supporting The Motley Fool. Save $50 on a mattress at http://www.casper.com/fool (promo code “Fool”).  Learn more about your ad choices. Visit megaphone.fm/adchoices

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From Fool Global Headquarters, this is Motley Fool Money. It's the Monty Full Money Radio show. I'm Chris Hill joining me this week from Supernova, David Kretzman, from Motley Full Pro and Options, Jeff Fisher, and from Total Income, Ron Gross. gentlemen, welcome to Chatter. How you doing? Coming to you live from Chatter, a restaurant in northwest, Washington, D.C. We've got the latest headlines from Wall Street. Robert Brokamp is going to help you rule your retirement.

And as always, we'll give you an inside look at the stocks on our radar. But we begin in the music industry. YouTube is reportedly going to launch a paid music service early next year. And Jeff Fisher, I hasten to point out, this is going to be their third attempt at trying this. And it should have a better name. really doing is they're combining YouTube Red, which is their pay video service, with Google Play Music. Pretty awful name. And they're going to rename it Remix, reportedly. Now, it's not set

in ink yet. They still have to sign Sony in Universal to get their music libraries. And then there's no, obviously, no guarantee it will take off. Google has struggled to grow subscribers in the past with its music offering. But Google, or Alphabet, has to offer a music offering, just like Apple. Apple had to offer its own maps because it's all about its iOS on phones and computers. And just as we're seen in China, where Tencent and all the Giants in China have to offer everything to their members to keep them, that's happening here with Apple and Google, of course, as well. And so what it really points to are the struggles that smaller players are going to continue to have. Although, David, it seems like some of the bigger players are struggling as well.

I mean, 2018, I think this is going to be a really interesting industry to watch because Spotify is probably going public in 2018. Apple Music is reportedly not profitable, and they're not some startup. So the fact that Apple is struggling to make this a profitable part of their business is a little mystifying. Yeah, it's a tricky industry. Obviously, you have to deal with licensing, paying artists, and Spotify is clearly the top dog here. have around 60 million paying subscribers, Apple Music at 30 million. Amazon has their offering with Amazon Music. You have Title.

There's so many different offerings here, so it's not immediately clear to me how YouTube or Google can really differentiate themselves to lure either subscribers from the existing services or people who aren't subscribed to a service yet. And Google is just so hit or miss, I think more so than these other tech giants when it comes to developing new products. They have something like Google Photos, which is an incredible user experience, but then they just bumble along with something like music. But I struggle to see where they can really differentiate themselves in this landscape.

And I think that's the problem. There are too many of these offerings, and therefore profitability becomes difficult for any one. I think we're going to have to either see a shakeout where some go away or we'll have to see consolidation. Otherwise, you're spreading the client base, the subscription base, across too many folks, and it becomes too hard to turn any meaningful profit. But this doesn't seem like video streaming, where right now there are plenty of people who have more than one video streaming service. I've got Hulu, I've got Netflix, et cetera.

If you've got one, I mean, this really does seem like it might be one of those zero-sum industries where there's one winner and that's it. Well, that's the tough part. Netflix succeeds by having a limited library, so it doesn't have to pay that much, although it pays plenty for content, but it creates its own original content. The music streamers cannot do that. They have to have a universal library of all the musicians. and then maybe they can get an exclusive debut with a giant artist, but afterwards that music is available on any streaming platform. So it is a tough business.

Spotify raised more than half a billion dollars last year at an $8.5 billion valuation, so it has quite a market value already. They're adding, Spotify is adding video as well. They've signed deals with ESPN and NBC. So again, everything is converging into one media platform. But right now, Spotify pays 55% royalty. to the record labels. So it's hard to make money

when you're paying that much out in royalties. Sticking with entertainment, the Walt Disney Company is moving closer to acquiring major assets from 21st Century Fox. This would include Fox's movie studio and TV properties like FX

and National Geographic. And David Bob Eiger, who already pushed back his retirement from 2018 to 2019, is reportedly going to be pushing it back another two to three years. And that out, honestly might be the best part of this acquisition going through if it does indeed go through.

It will be a steep price tag. There's estimates around $40 billion. So we'll see how Disney can come up with that money, whether it's equity or debt or a combination of those. But I think it really makes sense, especially by bringing more content under Disney's TV and movie studio. Because 21st Century Fox, they have franchises like Avatar, some of the Marvel franchises like X-Men and Deadpool, Planet of the Apes, Fantastic Four. So I think, especially as Disney is moving toward offering its own direct-to-consumer streaming service, the more content and more dominant franchises you can have under your umbrella, the more compelling that direct-to-consumer offering becomes to consumers.

And Disney is looking to launch that in 2019. So I would hope Iger would stick around because those are some pretty dramatic shifts in the business model of Disney compared to what the company has done up to this point. But I think it makes sense. Content really matters. And as Disney moves direct to consumer, you need strong content to lure customers under your umbrella. Do you think that the TV properties are more important to Disney than the movie studio? Because it seems like they really need to make that streaming work.

Yeah, I think honestly, you could even see an avatar TV show potentially. I think it's more about the franchises and not necessarily just about the movie or TV studio. You're seeing a lot of content going either direction there. And then this deal would also probably include some international TV stations like Sky TV in Britain and Star India. I think that's how it works. So there's a lot here. And it also would include 21st Century Fox's 30% stake in Hulu. And Disney right now, they own 30% of Hulu.

So this would effectively give Disney full control over Hulu, which, again, is another internet streaming option. For what it's worth, I think, Iger, if he plan to retire, should just retire. Do it before he. Stay. Gets Fox and that's going to be a whole... I don't know. I think if I'm the Murdoch family and all of a sudden I'm going to be a major shareholder of Disney, I want that continuity.

Of course you do, but I'm talking about him and his life. He was ready to... Chris, he shouldn't keep putting it off. You talked earlier about all the different services that one can subscribe to for content. Am I the only one that is fatiguing on all the $10 charges that hit my credit card on a monthly basis? It's getting to me to be...

I'm not fatigued by what hits your credit card. Well, thank you. I think something has to happen in terms of consolidation or price points because there's eventually going to be a pushback. You know, $10 is fine, but once you get $40 or $50, plus all your other fees to hook yourself up to the wireless world, I think there's going to be a blowback. On Monday, CVS announced what had been rumored and reported for weeks, and that is CVS buying Aetna insurance for $69 billion.

And yet, Ron, when you look at both of those stocks this week, I'm getting the sneaking suspicion that nobody thinks this is actually going to happen. Yeah, it's interesting. Aetna's stock has not adjusted to where you would think it would be if the world thought this was going to happen. I want to say it's probably around a 15% discount right now to the potential merger price. And it's interesting because this is seen as a vertical merger. And by that, I mean, these are different businesses. You know, it's an insurer and a CVS, which is the retail and the pharmacy benefit management business, there is not a lot of overlap in those businesses.

So the Justice Department theoretically should not have a problem. It really shouldn't hit antitrust too harshly. And this deal should go through. Add to that a $2.1 billion breakup fee, termination fee, where if this doesn't happen, somebody's paying $2 billion to somebody and you have incentives to get this done. I think the unknown is that this creates so. such a powerhouse in this industry, even though it's vertical, that the world doesn't know what to make of it and doesn't exactly know how the consumer will be affected. And that's where the Justice Department could get a little bit nervous. I was going to say, I mean, yeah, there's no significant overlap for these businesses.

And yet, Jeff, it really does seem like this is not going to get the green light from the Justice Department. Well, that's how Wall Street is pricing it. And right now I wouldn't bet against Wall Street. This week, Starbucks opened a 30,000 square foot roastery in Shanghai. It is by far Starbucks' largest location in the world. A big event with CEO Kevin Johnson, Chairman Howard Schultz, and Belinda Wong, who's the CEO of Starbucks China. Even though I saw the video, Jeff, I still had troubles wrapping my head around just how big this building is.

It's almost like going to Disneyland, Disneyland of Coffee. Starbucks has 600 stores in Shanghai alone. a city of 24 million people and they now have 3,000 stores in China. They added 550 in the past year. They've already been in that country for 18 years. It's its fastest growing region. It's what Starbucks needs to maintain the premium price it has on the market. It trades it 30 times earnings while earnings per share are growing around 13 percent annually. So the China story has to keep carrying Starbucks forward and the roastery is just kind of a feather in their cap to, for them to point to and generate excitement about all their other locations.

They're opening new ones for listeners here in the States in Chicago soon and New York next year, and also in Milan and Tokyo. So what is the catalyst for this mature business? Is it growth in China or here in the States is it somehow figuring out food in a way that they just haven't to this point? Because I'm a shareholder and I love the fact that every 15 hours a new Starbucks opens in China. But at some point, that can't be the only catalyst.

I think, Chris, what we're seeing is they don't have the answer, and that's why they're doing so many different things and seeing what sticks, including on a very small scale, the Christmas Frappuccino that they announced this week, which looks like a big green Christmas tree, and it was really the opposite of what Howard Schultz set out to do 40 years ago, which make good quality Italian coffee. Does it taste any good at all?

I don't know. I'm not going to find out. Another unicorn for Apetino. No, it's similar to that. But yeah, they don't have the answer. It's China. It's getting food to work in the States. And until they have kitchens in their locations, it doesn't look that promising.

Even though they have grown the food ticket quite a bit in recent years. Yeah, I just reiterate what Jeff said. I think you can hang your hat on the international growth, specifically the China growth, and build out your valuation model from there. However, that might not get you where you need to be because of a lot. It's premium valuation, so there does have to be additional things, as you both discussed. But if the pass is any indication, I think they'll figure that out and being a shareholder at these levels, I think is perfectly fine. Yeah, I think they have different levers they can pull.

Food in the U.S. does contribute about 20% of their sales in their stores. They also have Tivana and tea, ice beverages, becoming more prominent. The opportunity in China really is huge, just to triple underline that. Right now in the U.S., there are over 13, $13,000. Starbucks stores and management expects China to one day exceed the number of stores that we have in the U.S. So that's a huge opportunity to open 10,000 plus new stores in the coming years. This week, business editors got an early Christmas present from one of the biggest companies in America. Details coming up. You're listening to Motley Full Money.

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We're a chatter in Washington, D.C. Yeah, we're going to get a bite to eat after this, aren't we? Did you see the burger over my shoulder here? Unbelievable. Well, now I'm even more hungry than I was before, so thanks for that. Last week we talked holiday retail and not to jinx us, but we, you know, we, there was some optimism around the table. And this week, we got more evidence. that that optimism is warranted.

Lulu Lemon Athletica shares hitting a 52-week high after some good third quarter results, and Ollie's bargain outlet hitting an all-time high. You made that up. After their third-quarter report. It's a real company. It's a real company. David Kretsman told me.

How are you feeling? Well, I think there's certainly more evidence, especially after the strong Black Friday weekend, that consumers are comfortable opening up their pocket books and spending some money. I think as investors, you want to be careful because a rising tide can lift all boats and even the not-so-great boats like Macy's, Coles and Bedbath and Beyond, all of which are up over 17% over the past month.

But a company like Ollie's Bargain Outlet, arguably the sexiest company on the market today, they're the retailer of close-out, surplus, and salvage merchandise. They sell good stuff cheap and they're self-described semi-lovely, no frills, warehouse stores. They're continuing to do stuff really well. Their sales are up 18%. Same store sales up over 2%. Operating income up 30%. They have over 8 million members in their Ollie's Army loyalty program.

No, wait a minute. What? Eight million members. And that's up 22%. And the Ollie's loyalty program? Ollie's Army. Yeah, it's a place to be. It drives over 65% of their total revenue people who are part of this loyalty program. They have over 260 stores now.

They're primarily in the mid-Atlantic. They start in Pennsylvania, but they've since gone into the southeast, and they continue to open new stores at a pretty healthy clip. I think they've opened over 30 new stores so far this year. And what I'd like to see with Allies is they are generating free cash flow, but they're using that to pay down the debt that they had when they went public a couple years ago. Compare that to some of these department stores or other retailers, which have a lot of debt either to fuel store expansion or share buybacks in the case of Bedbath Beyond, which is a really questionable capital allocation decision. I'd like to see retailers that are generating cash use that cash to pay down the debt because they'll give you so much more flexibility when another recession comes along at some point. I'd like to see Ollie's mobilize that army and invade Canada.

It could happen. It's aggressive. Strong words. Big news out of General Electric this week. GE is cutting 12,000 jobs in its power business. And if you just look at that division, Ron, that is nearly 20% of the workforce in that division. So clearly, John Flannery flexing his muscles as the new CEO. Yep.

He was not kidding when he told you that he would be cutting $20 billion worth of business. and he's not wasting any time, including cutting the dividend by half, which saved them about $4 billion. As you said, 18% of GE's power business are going to be losing their jobs. That's 4% of the overall workforce, which is at 295,000 people. It's not Ollie's. You know, this is a big company. And they need to shrink it because for a very long time, it has not only been mismanaged operationally, but its capital allocation strategy has been a mess in terms of acquiring companies.

And that dividend has been around at that level for too long, and it should have been cut a while ago. Still 2.7% yield, by the way. It's nothing to sneeze at. Totally agree with Ron. And in 2015, GE spent nearly $10 billion to buy a coal-fueled turbine manufacturer horribly timed. Trying to bring coal back right now. No offense to any coal miners in the restaurant, or let alone in the country, but trying to bring coal back to a robust nature right now is like saying we should start smoking in planes again or put lead back in gasoline or just doesn't make sense. The science aside, it doesn't make sense economically, of course, when fracking has brought energy prices so low.

How GE missed that in 2015? Big question, Mark. Is this just one more data point that says energy is a tricky place to be investing right now? I've always thought so. I've typically avoided it because it's a commodity and because it's obviously all kinds of players are in this space. And there are always new ways of energy being created.

Solar will be a leading source very soon. This week, Walmart formally changed the name of the company by dropping the hyphen between Wall and Mart. And David, we were talking about this before we started taking it. I have never seen so many business editors express their excitement on Twitter and Facebook. And like, I was happy about this because just having to write it, I would always get it wrong. Yeah, no, whenever I have. had to write it up in an article or something, I would always have to take a step back and think,

okay, wait, do you put the hyphen in there or not? And I'm glad they're just finally clearing up this confusion. It's long overdue. I will defend them just slightly. They took the word stores out of the corporate name, too, to really identify that they're an e-commerce business as well. So that makes sense. And while they were doing that, they might as well get rid of the hyphen. What does that cost? Are there any other sort of little changes you'd like to see? I mean, We can make recommendations to other companies in terms of either their name or their logo. One company is Mazur Robotics. It's a spinal surgical system company.

I think they should just change your pronunciation to Mazur instead of Mazur. I think Mazur is just so much sexier and flashier. Just go with Mazur. Do they get snooty about that on the conference calls? It sort of seems like because everyone else who hasn't heard them pronounce it, they pronounce it Mazur. But go with Mazur. So this does get expensive. Think of all the Walmart stationery they need to change, all the trucks they need to

repaint, et cetera. Remember when Starbucks took away Starbucks coffee from its logo and just puts the siren up there? I think Starbucks should bring back Starbucks coffee. That's the change I want to see. Bring it back. Because they just can't get food right. Well, I'm what about you? Joe's A bank drives me nuts. Like we're supposed to call it Joseph, but it's Joe's. Thank you very much. Let's get rid of that. Earlier this week, I sat down with retirement expert Robert Browcamp to get some end-of-the-year tips for investors. That conversation is next. This is Martin for money. I want to say thanks again to our friends at My ID Care.

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restoring identities. So enjoy the holidays. Have a little peace of mind instead of worrying about stuff like this. For our dozens of listeners, you get a 15% discount if you sign up today. Join the more than 25 million Americans who depend on My IDCare for protection. Go to my IDcare.com slash fool. Welcome back to Motley Fool Money. I'm Chris Hill. Robert Brokamp is a certified financial planner and the Motley Fool's resident expert. on retirement, and he joins me now in studio. Thanks for being here. Always a pleasure, Chris. It's the end of the year.

It is. It is that time when investors maybe should take a moment and just look at their portfolio in the rush of all the holiday stuff that goes on. Just take a moment and think about, are there a couple of things I should be doing? And that's why I wanted to talk to you, because I know there are things that I should be doing. So what are a couple of things, invest? investors should be doing before the calendar flips to 2018? Well, being the retirement guy, of course, I'm going to start off with that one, right?

So you only have until December 31st to max out your employer-sponsored account, so your 401K or 4-3B, something like that. And you shouldn't wait until December 31st because all of that is usually taken out of the payroll, and your HR department needs a few days, a heads-up. So now's the time to let people know whether you want more taken out of your paycheck for this year. Also, you don't want to be the person at the office that the HR department hates. It's like, oh, it's December 30th. Here comes Robert. I wonder what he wants. Exactly. So the max for this year, if you're 49 or younger, is $18,000. It's $24,000 if you're 50 or older.

Good news for next year is those limits go up $500. So if you're one of those virtuous folks who always maxes out your 401K, be ready to have that changed in a couple of weeks so that you can hit the ground running in 2018 and have that higher amount taken out in that first paycheck. Fantastic. What else? But for the IRAs, you know, you have up until the tax filing deadline to contribute your IRA for 2017. The good news there is the tax filing deadline for this year or the next year for this year is April 17th. So you actually have a couple of days more to file taxes and to get money into the IRA. Nice. Yes.

It's always good to have more time. It is. What else should we be doing? So the other one I would say is to maximize your employer benefits. So according to the Department of Labor, the value of your benefits on average, is about a third of your salary. In other words, if you're being paid $90,000 by your employer, they're probably spending another $30,000 on your benefits. It's a big part of your total compensation package, so it makes sense to make the most of it. Also, at this time of year,

this is often when people are doing open enrollment for various things. It's also the time of year for money and employees where you have to spend the money that's in your flexible spending account. So it's just a good time to look at your overall package to see what's there. See what you have. Maybe you've signed it for something you no longer need anymore. Maybe there's something available that you had forgotten about. It can range from all kinds of things from the health plan, additional insurance, things like prepaid legal or even employee benefits that you're not aware of. So it's a good time of year to evaluate all of that.

Nice. Now, as we are taping this across the river on Capitol Hill. A mere seven miles away, maybe. Yeah. Congress is working on some type of tax plan. We don't know the details. It's a good chance. A lot of them don't even know the details.

details at this moment. But at some point, let's just say for the sake of this conversation that some type of tax bill is coming down the pike. If you're an investor, what should you be looking for? Because it seems, I don't want to jinx things, but it does seem like a relatively safe bet that corporate tax, that corporate tax rate is going to come down. How much I'm not sure, but it does seem like that's going to happen. Right. I am usually very reluctant to do any financial planning based on what Congress and the president might do. But I think it's a pretty good bet that something is going to happen. One question I'm getting from people is, when does all this take effect? And one thing everyone should know is if and when this does get passed and signed by the president, it'll take an effect next year. So it doesn't affect this year. But that doesn't mean there aren't some things you should do this year to anticipate that. So let's talk about a few things. There are a lot of details to be worked out. out a lot of things that have to be reconciled between the House and the Senate versions. But here are a few things we do know.

First of all, tax rates will be lower, at least initially next year, for sure. The standard deduction will be higher. So 12,000 for individuals, 24,000 for couples, almost half of what they are now. What that means is much fewer people are going to be itemizing next year. And also, many deductions are going to go away. So you put all that in context. What's the strategy? Basically, delay income, if you can, to next year, and accelerate deductions to this year.

If there's any deduction that you would normally take to next year, but you can move to this year, do it. If there's any way you can choose when to recognize income, like a bonus or something like that, move it to next year. So I'll give you an example. Let's say you normally contribute a certain amount to charity every year. You might want to move that, what you would normally do next year, to this year. You can put it on your credit card and it counts for this year even if you don't pay it off next year. Or if you don't have the cash, you can donate appreciated securities that you've held for more than a year. You don't have the cash.

You can donate the stock. You get the deduction and you don't have to pay the capital gains tax. But that's one way to do it. And then another somewhat controversial aspect of the new proposed tax law is not being able to deduct state income taxes. So people who have to pay those are considering maybe I can pay next year's taxes this year and get the deduction. And it's possible. There's some debate about that. But if you're considering doing that, it might be worthwhile, but consult a tax borne how to do it. Going back to the corporate tax rate, it really seems like it's going to come down to some degree.

And you're seeing companies increase the amount of stock buyback plan. I mean, Home Depot most recently said they had a $2 billion share buyback plan. They up that to $15 billion. Is it possible that stocks are going to be even more attractive next year than they are this year? Because if companies are going to get their corporate tax rates cut, and they look at that and they think the easiest way to put this money into action to reward shareholders is buybacks and increasing the dividends, that just seems like a path a lot of companies are going to take. I would think so. My only hesitation is it's not news at this point, right?

But this, I think a lot of what has happened to the market this year, and it's been an extraordinary year. We haven't had a down month yet this year, and that's never happened before. And I think a lot of that is anticipation of these tax cuts. So now that it does, they do seem likely, will the market continue to rise based on those? I don't know. But it certainly would, it puts something in the positive column for stocks. So you head up our Rule your retirement service.

You also work on the Total Income Service with our colleague Ron Gross. Let's focus on income for a second. You wrote something recently around investing for income. Are dividend paying stocks better than bonds? I looked through the article. I got to say I was a little disappointed because I was hoping it was going to be a one-word article that just said, yes, and just make it super easy for me. But you had to go and throw nuance into it.

I did have to throw nuance onto it. Okay. So first of all, we all know the problem with bonds. Right now, the 10-year Treasury is at 2.3%. Going back to when George Washington was president, there's been only one other time in history back in the 40s when rates have been this long. I mean 1940s. So we're talking extraordinary low rates.

Historically, bond investors could expect to earn 2 to 3 percent above cash for investing in bonds. These days, you're just not going to get that. The most you can hope for is 1 percent above cash, not exciting. the risk that the value of your bonds will decline when rates go up because they have that inverse relationship. So a lot of people say, like, I don't want bonds. Why should I invest in bonds yielding two and a half, three percent? I can create a portfolio of stocks that yield just the same and have some potential growth. So why wouldn't I do that? So as you pointed out, in my article, I take the pro and the con of both. So here's why you should replace bonds with

stock. So as I talked about, yields are just incredibly low. It's almost guaranteed that the Fed is going to raise rates here in another week or two. and try to probably raise rates in 2018 as well. So rates are going to go up. Bonds, that's a headwind for bonds. Not great. Also, bonds are called fixed income for a reason. If you buy a five-year bond, it's paying you 3%.

You're going to get that 3% each and every year. It doesn't grow. Dividends historically have grown along with inflation. In fact, over the long term, they've exceeded inflation. So you've got growing income, plus there's that potential for the capital appreciation. So that's why I think a diversified portfolio of dividend stocks can be a good alternative to bonds. On the other hand,

so of course there's the risk. So if you look at dividend-focused ETFs and funds back in 2008, the market dropped 37%. Those funds dropped 25 to 35%. So they held up a little better because often dividend payers tend to be more value-oriented and more established companies, but they still drop in value.

You're not going to see that from a bond. A bad year for bonds is like down three to four. percent. Bonds are contractually obligated to pay you interest. And even if the company goes bankrupt, most bond investors get something back, whereas if a company goes bankrupt, you don't get anything for the stock, generally speaking. So where does it put things? I think for any money you need in the next five years, you think about bonds as an alternative for some of that money. Cash is also a good alternative as well, but a diversified low-cost bond fund is also good for that. Any money you need more than five years from now, I think you're going to be

okay with the diversified portfolio of dividend stocks. Where are we with the age-old question of how much money do I need to retire? Well, related to that, it used to be, I like to think of it in terms as a multiple of your income. So it used to be that you shouldn't retire until you've had saved about eight to ten times your income. So let's say you're in your 60s. You made $100,000. your household income is $100,000, you shouldn't retire until you've saved about $800,000 to a million dollars. Now research is leaning more towards 12 times that, so you'd need more closer like $1.2 million. Why? Parts related to what I was just talking about, when you look at future expected returns for bonds, very, very low. What about stocks? While the proposed tax cuts

could do something for the stock market, for sure. When you look at valuations where we are with the stock market, it's still high. And valuations are the best, although an imperfect, predictor, of what returns will be over the next, say, 10 years. Not over the next year. No one knows what the next year will be. But generally speaking, when you start a point with high stock market valuation, you're going to see below average returns. You put those together, and you have to expect lower returns from your portfolio, which means you need to save more and have more saved before you retire. But I will say one thing. One key variable in terms of whether you can retire is whether you paid out your mortgage. It's the biggest expense for most households. And if you can go into

retirement without a mortgage, that's a lot of flexibility and you need a lot less income. So if you're looking for a safe place for your money, something more predictable than the stock market, but you don't want the low yields of cash and bonds, I think paying off your mortgage. That's a guaranteed return. If you have a 4% mortgage, that's a guaranteed 4% return. And because of the new tax laws, the value of the mortgage interest deduction is going down. So it totally makes sense to put some of your safer money into paying off your mortgage before you retire.

The last thing, and then I'll let you go. This time of year always makes me think of you because for years here at the Motley Fool, and as I recently found out, even before you started working at the Motley Fool, you have put together your own holiday music list. You used to give out CDs. I started tapes. Started with tapes in the mid-90s and then moved to CDs and now you've got a Spotify list. Right. Is there a particular holiday album that you enjoy, one that you just keep going back to year after year? There's so much good holiday music above and beyond what you hear on radio.

That is very tough. So my Spotify playlist, it's public. Broho-ho go to it. It's got 10 hours of the best holiday music. New album out by Sia this year. Outstanding. One of my favorites, I have to admit, John Denver and the Muppets, classic, classic versions of some great songs. Wait, they did a whole album?

They did a whole album. They had a whole TV special. You can hear more from Robert Brokamp every single week. Just subscribe to Motley Full Answers, which is the weekly podcast that Robert does with our colleague, Allison Southwick. He also runs Rule Your Retirement, works on total income, and it's possible

he never sleeps more than three hours and hours. Thanks for being here. Always a pleasure. Coming up next, we're going back to chatter, and we'll give me an inside look at the stocks on our radar. This is Motley Fool money. As always, people on the program may have interest in the stocks they talk about in the Motley Fool may have formal recommendations for or against, so don't buy yourself stocks based solely on what you hear. Welcome back to Motley Fool Money, Chris Hill here at Chatter, a restaurant in Northwest, Washington, D.C., with Jeff Fisher, Ron Gross, and David Kretzman. Let's go to our man. He's not behind the glass. He's here at the table with us. Steve

I'm behind the windows. He's disturbingly close. How is this going for you? You're not behind the glass where you're comfortable. How's the show going for you so far? It's going great. I can see there's a bus going by. It's like the whole. world is opening up. We need windows. I demand windows in our studio. All right. We'll get working on that. A couple of things before we get to the stocks on a radar. First, I want to say thanks to Mark Stern and Claude Jennings, who helped set this up for us. Second, we are hiring at the Motley Fool and we are hiring for, among other things, investment analysts. So go to careers.fool.com. That's careers.com to check out the listings. And because we

have gotten questions from listeners about this. We have not yet posted the summer 2018 internships on careers.fool.com, but that is coming. So stay tuned. Check that out. Radio at fool.com is our email address. That's radio at fool.com. Last week, we got the question about autonomous vehicles and will having autonomous trucks primarily on the road. Will they be more susceptible to crime. And I may have expressed that I'm a fan of this idea. And by this idea, I mean robbing autonomous vehicles. We got an email from listener Charlie Fox, who said, think eight to ten cameras per

vehicle, interior and exterior. So I like that as an idea to prevent crime, although I also think that I could just wear masks. Like me and my team could just, you know, don't you think? I would recognize you even with a mask. Yeah, but if it was a really good mask? I was watching a cable news junkie, and I was watching the other day, they said the reason bank robberies have stopped being a thing

is because of cameras in banks. So the in-store camera in a bank reduced bank robberies significantly. And I thought of your mask comment, and it seems that masks just don't get it done. I think criminals are maybe just getting lazy when it comes to the banks. Well, Chris, I don't think you're a fan of beer, but in the news today, it was Anheuser-Busch ordered 40 Tesla Semiconductor trucks. Their biggest order so far for those new Tesla trucks. So, I mean, that's a start. So thirsty criminals are going to keep an eye out for that, is what you're saying. And I'm surprised the orders are already coming in. That's a significant order for a truck that won't be around for a few years yet.

If ever. All right. Let's get to the stocks on our radar this week. And Steve will hit you with a question if he's not too distracted by the traffic going by the restaurant. David Kretzman, you're up first. What are you looking at this week? I'm going to go with Papa John's, ticker PZZA. This is a company Jeff knows better than me, but they've blamed all their problems on the NFL, essentially, or over the past couple months, but they've since basically acknowledged, no, there's some things that we can do to get our act together. And looking at the stock, the PE multiple, the earnings multiple, is at about 19, which is the lowest level it's been at since 2012. And the company's still growing revenue and earnings. They certainly have had their share of issues and they're not growing near as quickly as

Domino's, which has been the crown jewel in this space for a long time. But I think the problems they have are fixable. They have over 5,000 locations worldwide that's still quite a bit fewer than Pizza Hut and Domino's. I think there's still a lot of expansion opportunities there. So one I'm taking a look at. Steve, question about Papa Johns? Isn't this all just a location play, just who's closest, right? So I want pizza, who is the closest person who will deliver it? Yeah, I think that, that's probably something to do that, yeah. It drops the mic and walks away.

Wait a second, before we go to Jeff, so taste doesn't matter. Price taste. But if you're ordering pizza, the goal is to get it there quickly. So, you know, if it's going to take, if there's one not in my area or one that's too far away. You go with convenience. Jeff Fisher, what are you looking at this week? So I've mentioned it before, and I've owned the shares a long time, but Skyworks

solutions. SWKS is a ticker. They make analog semiconductors mainly that drive connectivity and smartphones, but increasingly in Internet of Things devices, everything from your Alexa to your Google home. They have rising margins. They have growing

end markets, of course, and it only trades at about 13 times earnings for next year while earnings are growing that much or quicker. It's come down about 20% recently. Steve, question about Skyworks? Does having a cool name like Skyworks have a a giant effect on the business, or is it just me? It doesn't matter. It influenced me in researching

it and then recommended it to thousands of people. So yeah, it drove a lot of market value. Ron Gross, what are you looking at? I'm going with Oak Tree Capital. OAK is the ticker symbol, Steve. They are an alternative asset manager focused on distressed debt and contrarian investing, co-founded by Howard Marks, famed investor Howard Marks. Really enviable track record over the long term. But nowadays, contrary investing just isn't getting it done because the stock market is just going higher and higher. So they've had a little bit of weakness lately, but that won't last forever. Their time will come, and they pay out a 7.4% dividend yield while you wait. Steve, what dividend yield makes you nervous?

7.4% makes me a little nervous. Anything over 6% I would just take a look at and make sure I understand why. Three stocks, Steve. You got one you want to add to your watch list? I think Skyworks, just because I'm amazed by the name. sky life. Good choice. All right.

Jeff Fisher, Brian Gross, David Kretzman, guys, thanks for being here. Thanks, Chris. Thank you. That's going to do it for this week's edition

to Motleyful Money. Our engineer is Steve Broido. Our producer's Mac Career. I'm Chris Hill. Thanks for listening. We'll see you next week.