Returns as of 12/17/2021
Returns as of 12/17/2021
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Host Chris Hill and Motley Fool analysts Ron Gross and Jason Moser explain why they’re thankful for The Trade Desk, Costco, Home Depot, and Lowe’s. They discuss why investors might want to avoid Peloton, Zillow, and Avis Budget Group. And since no Thanksgiving is complete without dessert, they dig into a few slices of humble pie and talk Under Armour, Verizon, and Macy’s.Â
Ron and Jason share why the Energy Select Sector SPDR Fund and Roblox are on their radar, as well as investing resources for anyone hoping to learn more about finance. Plus, they talk Procter & Gamble, Target, and toothpaste when they revisit their conversation with Charles Duhigg, best-selling author of The Power of Habit: Why We Do What We Do in Life and Business.
To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
This video was recorded on Nov. 26, 2021.
Chris Hill: It’s the Motley Fool Money radio show. I’m Chris Hill, joining me this week, Senior Analyst Jason Moser and Ron Gross. Good to see you as always gentlemen.
Jason Moser: Hey.
Ron Gross: How are you doing, Chris?
Chris Hill: It is our Thanksgiving special. We’re going to give thanks for some stocks, we will call out a few turkeys, we’ll revisit a conversation with best-selling author, Charles Duhigg, and we’ve even got a couple of stocks on our radar. But it is our Thanksgiving special guys and that means one thing only, [laughs] that’s right.
Jason Moser: Gets me every year.
Chris Hill: The one show per year where we blow all our money on a single special effect.
Jason Moser: I love it, I don’t know why.
Chris Hill: Jason Moser, we’re going to start with dessert, because we’re adults. That’s one of the good things about being an adult, you can eat dessert first.
Ron Gross: I like that.
Chris Hill: Let’s start with a serving of humble pie. What is a stock or a business story over the past year that you were wrong about?
Jason Moser: Well, maybe not just this past year, but the past couple of years easily. I remember when Patrik Frisk took over as CEO of Under Armour back in January of 2020. I said to myself, I wouldn’t be shocked at all to see Under Armour double from that price at the time. It really felt like they had appropriately addressed the leadership issue and refocused on their business as opposed to just wanting to beat Nike as Kevin Plank was always so fond of saying. Fast-forward to today, the stock is up about 15 percent since then Chris. The A shares is I think at around 20 percent. Nike, up close to 75 percent over that same stretch.Â
For me, Under Armour, they need to probably look at maybe changing their ticker to UW because most investors are still underwater on this thing. I don’t know if it’s going to pick back up anytime soon. Revenue they’re calling for maybe 25 percent growth for the full-year, which is good, but that’s coming off some pretty weak performances as of late. Obviously, the Connected Fitness investments were a total bomb. Is this a value trap? I don’t know maybe, it does feel like there’s a business there. They do make good stuff. There is some brand equity there, but I don’t think it’s as strong as it once was, so perhaps there’s still there’s a future for Under Armour. I keep a small position and I’ll hang onto the shares just to follow the company. But yeah, this really just feel like one that I got wrong.
Chris Hill: Ron, what about you?
Ron Gross: Unfortunately, I have to go with Verizon, which I personally bought in March of 2020 when the stock market was obviously in turmoil, down big. I bought the stock in the low 50s and a year-and-a-half later, the stock is in the low 50s. Meanwhile, the stock market has almost doubled up about 98 percent. Verizon is one of the Dow’s worst-performing stocks of 2021. My main motivation was to play the 5G theme through owning Verizon. If I had just listened to my friend Jason, I probably could have saved myself some of that pain. So far, playing 5G through a carrier like Verizon or AT&T appears not to be the right way to go. The 5G roll-out has been delayed, sales growth is sluggish, they’re aggressively spending, competition is fierce, which you tend to margins. All are a recipe for not a great winner. One bright spot is that they got rid of AOL and Yahoo, their oath division, they got rid of 90 percent of that. They do have a five percent dividend yield, which is some consolation, but I’m not loving the balance sheet. A $179 billion of debt so far, this is a dud for me.
Chris Hill: One year ago on this show, I said that Macy’s was a turkey. I said this business was lost. I told our dozens of listeners, “Avoid this stock. This business is lost.” In fact, we lost out on Macy’s shares rising 230 percent from the time that I said avoid this stock. I could not have been more wrong about Macy’s. Just something for listeners to keep in mind later in the show when we go around the horn and talk about stocks going forward. But on the flip side Ron, it’s thanksgiving. What’s the stock you’re thankful for?
Ron Gross: I’ve got to go with Costco. I’ve owned it for more than a decade. I’m thankful that I’m up almost 1,200 percent. But even putting aside the return for a moment, I’m literally just happy to be a small part owner of a wonderful business, one that James Sinegal created in 1983. He created a fantastic corporate culture, CEO Craig Jelinek continues that today. They’ve got a wonderful recurring revenue subscription model that stresses giving customers a great value proposition. Company was relatively strong during COVID, shares were under pressure earlier this year though as COVID-related growth slowed, the stock looked expensive at the time, bottomed out at $307 per share. Since then though, has come roaring back up 74 percent year-to-date. It’s in the low 530s now, shares are up 20 percent since mid-October of this year. Forty three times earnings though, not cheap, but a great long-term holding.
Chris Hill: Jason Moser, what about you?
Jason Moser: Well, I haven’t owned this company for a decade like Ron, but I do have an affinity toward the Trade Desk. I’m very thankful for The Trade Desk. I have owned those shares for close to three years now. It’s had a good year, stock was up about 28 percent this year, but up 770 percent over the last three years. I could buy a couple of turkeys with that, Chris. But if you remember the Trade Desk, it provides a demand-side platform that its customers used to purchase advertising space and it really is playing into that Connected TV tailwind. This is something that when you think about the subscription services and these video-on-demand services that are supported by advertising. Those are growing by leaps and bounds all over the world and the Trade Desk is really playing into that market. In fact, recently at an event, Chief Revenue Officer there, Tim Sims, he was on a stage with brand leaders from companies like Anheuser-Busch, Volkswagen, Colgate-Palmolive, among others.Â
He said, “There’s unprompted exchange with those advertisers that they believe that the majority of TV advertising will be executed programmatically on connected TV within three years” and that’s right in The Trade Desk sweet spot. I certainly understand why the market is so excited about the company. I certainly I’m too. If you remember the last earnings call, this most recent earnings report, they noted on the call as well. They said that the recent IOS changes that Apple had implemented had no material impact on their business whatsoever, and they expect that to remain the case. This pursuit of this universal ID 2.0 is something that I think will continue to play in their favor as they focus on protecting data, yet also being as productive with that data as possible. The connected TV opportunity there just continues to grow, and it feels like it’s something that has some time to go still, so I’m very thankful for The Trade Desk.
Chris Hill: I will just add two stocks we talked about on last week’s show, and that’s Home Depot and Lowe’s. I haven’t owned these stock for very long. But the peace of mind that these businesses bring, in part because of the leadership of both companies, but also because when we talk about trends, a lot of the time, we’re talking about things that are recent or nascent, and I think of home improvement as a trend that’s just never going to stop. I think these are businesses that are poised for decades to come and I’m just so thankful they’re in my portfolio. We’ve got more of our Thanksgiving special after this, so put down the leftovers and stay right here. You’re listening to Motley Fool Money. [MUSIC]
Chris Hill: [MUSIC] Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross. It is our Thanksgiving special. We’re thankful for listeners like you who join us every week. Thank you for listening, thank you for spreading the word, telling your friends, posting on social media, rating and reviewing Motley Fool Money on whichever platform you’re listening on. That’s the thing that helps other people find this show and we appreciate it. Thank you for doing that. We are also thankful for the radio stations across America that broadcast this show every week. All right, Jason, it wouldn’t be Thanksgiving without turkey. What is one turkey stock you’d like to call out as something people should avoid?
Jason Moser: Well, listeners to the show may recall that I just called this out as a radar stock, in not any a good way. I’m sticking with the Peloton to me, it’s a company that is in a really tough situation. I think I’m not saying this is necessarily a bad business, don’t at me all of you Peloton lovers, I get it. But it really does feel like it’s a business with a ceiling. Chris, we talked about that before. It’s not something that’s going to go to zero, but it does feel like there’s a cap that it really is not going to be able to get past. It feels to me like Peloton as a business with a ceiling with a limited opportunity. Let’s face it. The last 18 months have been a massive tailwind for this business. If they haven’t been able to truly capitalize at this point. I think they have asking a lot of questions. I don’t own the shares. I’ve never recommended it. I feel like their $1 billion share offering they just announced with shares 65 percent off of levels from July looks pretty bad, particularly when they just said a couple of weeks prior that they did not need to raise capital. Then when you look at the fundamentals of the business, it’s just challenged, growth is hitting a wall ever-current net debt position before this offering. Financials just are not very flattering. There’s a lot of competition in the space now. This is a space that’s changed, I think materially just in the past 18 months alone, Peloton probably gets a piece of it, but I don’t want to invest in it.
Chris Hill: Ron, before we get to your Turkey stock. You mentioned on the show a few weeks ago, you’re taking a long hard look at your Peloton’s subscription, and any closer to a decision on that? [LAUGHTER]
Ron Gross: Well, Chris, it’s interesting. I said my usage headwind and a buddy who listens to this show texted me and said, when did it begin? [LAUGHTER] Because I was not what you would call a heavy user at any point in time, but 40 bucks a month, that’s pricy. Maybe they’ll have to revisit that price point actually if they find that the demand is slowing.
Chris Hill: What’s your Turkey Stock?
Ron Gross: Well, it might be tempting for you value folks out there to nibble add Zillow, which is 74 percent off its early February 52-week high, I would stay away here. Either one of these two things, a broken business model or mismanagement would be enough to be wary about. But with Zillow, I think we actually have both. In early November announced that would wind down its iBuying Zillow offers business where it bought homes in the hope of later selling them for a profit. In the hope of is the key phrase, their management highlighted the unpredictability in forecasting homes basically blend a faulty algorithmic model that caused it to overpay for homes that wind down as expected to take several quarters. It will include a reduction of about 25 percent of the workforce that probably take a $500 million-plus loss on the homes. But, some believed management misled investors originally saying the business was suffering as a result of problems with material and labor capacity. Now we find out the business was actually fundamentally flawed. Lots of class action lawsuits depending, it’ll be interesting to watch those. IBuying was supposed to be the future of Zillow. They’ll now move forward with their legacy add business. That just does not excite me that business and it never has.
Chris Hill: I’m still hung up on the use of the word hope. I just feel like [LAUGHTER] if you’ve got a business plan and the word hope appears a bunch of times, that’s not a business I want to be a shareholder of.
Ron Gross: Yeah.
Chris Hill: I will preface this by reminding everyone that a few minutes ago I talked about how I was so wrong a year ago when I said Macy’s was a Turkey Stock, that should be avoided because it’s now more than tripled from when I made those comments. Having said that, I look at Avis Budget Group, shares up 700 percent year-to-date. Keep in mind, this is a stock that is nearly $300 a share, and in the five years before this one, it never got above 50. Ron, what’s the opposite of a value play?
Ron Gross: It’s just turkey of the von.
Chris Hill: Avis Budget Group looks like nuclear waste to me, I don’t want to be anywhere near it. It’s so terrifying. Yeah, there’s nothing about that business at that stock price that gets me interested.
Ron Gross: I think that’s fair. That business is going through a lot of changes, whether it’s electric vehicles, Hertz, Avis, Tesla, everybody getting in, everybody getting out. It’s tough to make a call there.
Chris Hill: In all seriousness, it is going to be interesting to see what happens, not just what that stock price, but also just with the business of rental cars, one of the big stories of the year, certainly maybe the biggest story in the travel industry is the spike in rates and how people who are actually traveling and looking to rent cars are running into situations where they can get a wheelbarrow for $300 a day, and that’s it. [LAUGHTER] Something we added a few years ago to this show. A little thing I’d like to call, not at the table, please. Because you get together with your family, your extended family, and there are some topics you just don’t really want to come up at the table, and this is a business and investing show. Jason, what is a business or investing topic you’re really hoping doesn’t come up this holiday season?
Jason Moser: Well, Chris, we’ve talked a lot about this over the last several months and it’s not that I’m sure we will continue to talk about it over the coming months as well. But inflation to me is something that ultimately just devolves into political argument. [LAUGHTER] I feel like, with the family around the table, I don’t want to talk about inflation. I just stroke the check, figuratively speaking for 75 bucks for turkey the other day, it wasn’t that expensive last year, I could tell you, yes, there’s inflation. I get it. According to recent data from the US News & World Report, over the past 12 months, furniture costs are up 11.2 percent as the most since 1951, the cost of shoes rose half a percent in September, but have jumped 6.5 percent over the last year, children shoes were up almost 12 percent. The cost of a meal at a full-service restaurant has jumped 5.2 percent in the last year, and gas prices up more than 42 percent compared with the year ago. There’s inflation data, folks enjoy it, just don’t talk about it at the table, please. Let’s keep it simple.
Chris Hill: Ron, I was saying that Jason the other day, I feel like I dodged a bullet with this one because the topic that I didn’t want to talk about was who is going to be the chairman of the Federal Reserve? [LAUGHTER] Earlier in the week, it comes as news, President Biden nominates Jay Powell for another term. I could only see that news in selfish terms. I just thought, oh, good, this isn’t going to come up this holiday season. Because I know as an investor, I’ve never bought or sold a stock based on who’s in charge of the Federal Reserve. I know it’s an important job. I know it’s important to have someone smart than experienced and qualified, on top of all those things but never once, as a stock investor have I actually made the decision based on who is running the Federal Reserve. I think I got lucky this year.
Ron Gross: I think it’s fair.
Chris Hill: What’s the topic for you that you just don’t want to hear about?
Ron Gross: I have to go with meme stocks. I’m just fatigued. We got to move on. If you want, you can throw in Reddit and Robinhood in there. You can cover them altogether if you want, it doesn’t matter to me. It’s not that these aren’t important issues and they’re actually interesting. It’s just that I have had enough for a while, and I just don’t want to mix my turkey and stuffing with speculation and manipulation and things that are arguably bad for the smooth functioning of the stock market. You know what Chris, you are here with me, I fully admit to having benefited from the craze when my Bed Bath stock shot up.
Chris Hill: Sure.
Ron Gross: I would like to pose it just for a while at least for the holidays. So AMC, GameStop, even Bed Bath, I will see you in January.
Chris Hill: I almost picked this as my humble pie, because when I think back to the beginning of the year and this story first broke, I don’t know if I said it on this show. I know I said it to you guys in conversation. I remember saying something along the lines up. This is only going to last a couple of weeks. This isn’t going to blow off it quickly. I don’t see this phenomenon repeating itself. I was going to pick that for my humble pie until I ask myself, hey, how did I do on that Macy’s prediction last year? Then I thought, OK, I got to lead with that.
Ron Gross: Two things, I think we find consumer-facing, specifically retail, sometimes just tough to call. Things look bad and the companies look like they’re not going to survive and somehow they revise themselves through merchandising or change in strategy. It’s all very interesting. As far as the meme-stock things. It’s actually allowed some companies to survive, to raise capital at prices there where the stock should have never been in the first place. AMC literally fight another day because of the craze, really interesting to watch [MUSIC]
Chris Hill: All right, Ron Gross, Jason Moser. Guys, we will see you later in the show. Up next, conversation with best-selling author Charles Duhigg on the Power of Habit. Stay right here. This is Motley Fool Money.
Welcome back to Motley Fool Money, I’m Chris Hill. The first time I talked with Charles Duhigg was back in 2012. He was an award-winning investigative reporter for the New York Times and he’d just written his first book, The Power of Habit: Why We Do What We Do in Life and Business. In addition to being a great read, The Power of Habit pulls back the curtain on how habits play a role, not just in our daily routines, but also how they inform businesses like Target and Procter & Gamble. Needless to say, I was curious about a bunch of things when I talked with Charles, starting with why he chose this topic for his first book.
Charles Duhigg: I got to interested in this about eight years ago when I was a reporter in Iraq and I met this army major down in the city named Kufa, who is assignment had been to stop riots in the city. What he did is he took out all the kebab sellers from the plazas and the riot ceased immediately because people would get hungry and go home. I asked him, ”How did you know to do this?” He said, ”The military is like this giant habit machine,” and this just got me fascinated. Once I came back, I realized how much habits have to do with businesses and companies, and organizations. It just totally captivated me.
Chris Hill: Obviously, as a show that focuses on business and investing, I’m particularly interested in the habits that you point to in your book as they relate to business. Let’s touch on a couple of examples in your book. The one that is getting all the headlines is this story that Target knew that an 18-year-old girl was pregnant before her own father did. How does something like that even happen?
Charles Duhigg: Target has this very, very sophisticated division that looks at shopping habits and it’s not just Target, it’s almost every major company at this point, although Target is among the best at this. They can actually figure out from your shopping habits. If you’re pregnant, if you’re going through a divorce, if you’re buying a new house. They are looking for these moments in your life when all of a sudden everything is changing because they know at those moments, your habits are particularly flexible and they can get you to buy new stuff.
Chris Hill: One of the comments you make is that pregnant women are the holy grail. [laughs]. I’m assuming that’s for any business, not just Target, but why is [inaudible 00:21:12]
Charles Duhigg: It’s because when you have a new baby or you’re pregnant, you’re exhausted. Most people go to five or six different stores to buy all the stuff they need. But Target sells everything. They know that if they can get a pregnant woman in there to buy her diapers and formula, they can get her to start buying her cleaning supplies and her clothes and her lawn furniture, everything. Because if you have a new infant, you are exhausted. All that you want is to go home and fall asleep. Target wants to get at you before everyone else when they know that a baby is on the way.
Chris Hill: Well, I think the average consumer is used to the basic proposition of going to a store, that stores are collecting information on you. Certainly, in the case of grocery stores, you’re getting discounts, you’re getting coupons of the things that you buy. But how does a company like Target walk the fine line between offering discounts, sending coupons out to entice pregnant women into the store without, for lack of a better word, creeping them out?
Charles Duhigg: This is the biggest problem Target has. When they sent out these ads at first to women that they knew were pregnant, they would send them all the baby stuff. The women would just get completely freaked out. They wouldn’t come into the store because it was obvious Target knew they were pregnant and they had never told them. One of the executives said, let’s try and experiment. He sent out some small number of flyers that had coupons for diapers right next to a lawnmower and then coupons for formula right next to wine glasses. To the average viewer, it looked like the baby ads were all random and it worked with the women who got those ads in the mail, looked at them and said, ”Oh, everyone else on the same block must have gotten the same ad and I need these coupons for diapers and formula.” They came in and used them. Target had to camouflage what it knew.
Chris Hill: Let’s be honest, if your kid is drinking baby formula out of a wine glass then [laughs] there are other issues going on.
Charles Duhigg: Then that’s an interesting households.
Chris Hill: One of the other companies you profile, Procter & Gamble, which is a company that we talked about frequently on our show. Febreze, which is now a billion-dollar product for Procter and Gamble. But early on, that was really a product that P&G was struggling with.
Charles Duhigg: In fact, it was such a failure that P&G was thinking of canceling it all together. But some of the marketers figured out that they could create a Febreze habit. We go into exactly how this happens in the book. They piggybacked on existing cleaning habits. By doing so, they suddenly got mainly housewives who buy Febreze to start using this stuff by adding more perfume into the formula, so that at the end of a cleaning ritual, someone would look at a clean carpet or freshly made bed and spray Febreze to make things smell as good as they looked. All of a sudden Febreze went from a huge flop into selling $200 million worth of product in its first year, and it’s now a billion dollars a year. It’s one of the biggest products in Procter & Gamble’s arsenal.
Chris Hill: One of the other products, which frankly I wasn’t even aware was still being made is Pepsodent. [laughs] The reason I thought that is because it’s no longer sold here in the United States. How did Pepsodent revolutionize the world of toothpaste?
Charles Duhigg: A 100 years ago, almost no one in the United States brushed their teeth. It was basically something that rich people did once a week [laughs]. It was such a big deal. It was a status thing. It was such a big deal that in World War I when they were recruiting troops, the military actually said that dental hygiene was a national security risks because so many soldiers had rotting teeth. Nobody could solve this problem until this marketer named Claude C. Hopkins, who’s totally forgotten today but was famous a 100 years ago, until he decided that he was going to take on Pepsodent in exchange for a bunch of stock in the company. What he did was he created a habit around it. Every habit has three parts. There’s a cue, a routine, and a reward. He found this cue, the film on people’s teeth. If you run your tongue over your teeth, you feel that film. Nobody had ever minded it before but Hopkins told people, that’s bad, if you feel that you’ve got to brush your teeth. But most importantly, he delivered a reward. In Pepsodent were these chemicals that made people’s gums tingle. It’s probably still true today. When you brush your teeth, I’m sure your gums and tongue tingle afterwards.
Chris Hill: Oh, sure once a week when I brush my teeth.
Charles Duhigg: [laughs] Exactly, whether your teeth need it or not, once a week. That reward revolutionized toothpaste and it revolutionized tooth brushing because suddenly people started feeling like their mouth wasn’t clean if they didn’t have tingling gums when they walked out the door, went to bed. That made it a habit. That was enough of a reward to spur this daily pattern of behavior. In fact, right even today, toothpaste companies add a chemical to make your gums tingle that have nothing to do with cleaning your teeth. It’s just to create a daily habit.
Chris Hill: You’re listening to Motley Fool Money, talking with Charles Duhigg, author of the new book, The Power of Habit: Why We Do What We Do in Life and Business. There are other companies that are trying to tap into that tingly feeling that the Pepsodent did. One of the things you’ve read about is sunscreen. A pale Irish guy like me is certainly not using enough sunscreen on a daily basis as I should be.
Chris Hill: Am I just missing the tingle?
Charles Duhigg: That’s exactly it. There’s no reward for sunscreens. When you think about it, it’s crazy that everyone brushes their teeth. No one dies from having unclean teeth, but lots of people died from skin cancer every year. Why does everyone brush their teeth every day? But people will put on sunscreen every day. Because we know doctors tell us we could eradicate skin cancer if we all put on sunscreen. The reason why is because they haven’t figured out some reward that sunscreen delivers so that when you put it on it feels like you’ve done something good, and if you forget to put it on, there’s something that reminds you. They tried to make it tingle, but some people skin is too sensitive, so they keep on looking for some reward that will trigger a daily sunscreen habit. It’s either closed.
Chris Hill: What are some of the other products that companies are tweaking in the hope that we’re going to change our habits?
Charles Duhigg: Well, one of the most interesting is actually cigarettes. Most people think about cigarettes as being addictive, something you don’t even have to sell as a habit. But it turns out that a lot of people who start smoking can put down cigarettes on their own by diagnosing their own habits and trying to cure themselves. Some cigarette companies actually vary the level of nicotine in cigarettes so that it delivers a more of a reward and less of a reward. Because we know that intermittent rewards are the most powerful kind. We actually know this primarily because of slot machines and video games. The video game industry has been overhauled by the science of habit formation. Now when you play a video game, every reward you get is specifically designed to make that game habit forming, and it works. That’s why you have this urge, as soon as you get one badge, you want to get the next one. Everywhere you look, you can actually see rewards that are trying to create habits in our lives.
Chris Hill: What surprised you the most when you were working on this book?
Charles Duhigg: What surprised me the most is how malleable habits are. I think most people are programmed to think about habits as something that we’re powerless over. Like when you pass that box of doughnuts, it feels so compelling, and you say to yourself, I’m a successful person, why can’t I just ignore the doughnuts? It turns out in the last decade, what we’ve learned in neurology laboratories has completely transformed our understanding of habits, and we now know how to change them. We know how to create new habits, we know how to break old habits. In labs, they can actually do this almost like flipping a switch. There’s people who give up cigarettes and lose 30 pounds, and companies that completely transform themselves, and it’s because they target there habits. We’re not prisoner to them. We know how to change them now.
Chris Hill: What’s the key to changing your habits?
Charles Duhigg: The key to changing your habits is understanding this habit loop. That every habit has a cue, a routine and a reward. Most people, when they think about habits they focus on the behavior, the routine. But that cue in that reward is really important because that’s how you influenced the behavior. I have a personal example if it’s interesting to you.
Chris Hill: That was going to be my next question. What if any, habits of your own?
Charles Duhigg: I’ve actually lost 21 pounds in writing this book, which is great for it. I had 21 to lose, so it’s nice to do. I had this bad habit when I started working in the book that every afternoon, I would go up and I would get a cookie from the cafeteria and our chat with my colleagues. This is what drives me crazy. Every time I was talking to psychologists, I would ask them at the end of the interview, how can I change my habit? What they said was, you have to diagnose the cue and the reward, and then shoehorn in a new behavior. I started paying attention, and I realize that every time I had a cookie urge, it was usually between 3:15 and 3:45 in the afternoon. Then I did some experience rather than getting a cookie one day, I got a candy bar and then the next day just got some hot tea. One day I started going to the cafeteria, took a walk around the block. What I figured out is the reason why I would craved that cookie was because it gave me an opportunity to socialize with my colleagues. The cookie was just a convenient excuse. Once I had diagnosed the cue and the reward, I could change the habit. Now at about 3:30 every day, I look around the newsroom because I work at The New York Times. I find someone to go gossip with, I gossip with him for 10 minutes, and then I go back to my desk and the cookie urge is gone. But I would have only known how to change that habit by figuring out the cue and the reward. It gets a little bit more complicated in my book, I go into all the details of how to diagnose the cue and reward and how to change them. But that’s the lesson here, is that you can change any of them once you figure out how the habit works.
Chris Hill: Nearly a decade after it was first published. The Power of Habit, why we do what we do in life and business, continues to be one of the best-selling books in its category. You can find it wherever you find books. Up next, Ron Gross and Jason Moser return. We’ve got a couple of stocks on their radar based on a couple of suggestions for grateful listener. Don’t touch that button. You’re listening to Motley Fool Money. [MUSIC] As always, people on the program may have interest in the stocks they talk about and the Motley Fool may have formal recommendations for or against. Don’t buy yourself stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross. Once again, as we wrap up our Thanksgiving special, got an email from Laura Co. Laura writes, “Hello Chris, I’ve listened to Market Foolery, Motley Fool Money, and the industry-focused podcast for two years. You and many others have changed my financial life. Listening to all of the Fools and my husband has sparked in interest and finance and living life in a way to be able to become financially independent and give back to others. Thank you for your knowledge and teaching me how to look at companies. My goal is to start positioning myself to be able to transfer into a more financial job in about five years so I can do online classes and reading while keeping my full-time job as a pharmacist. If you have any recommendations of books, authors, classes, etc, I would love to hear them. Thank you and have a wonderful Thanksgiving.” Thank you, Laura, for that heartfelt and delightful email. I’m so happy that we are able to help you along your financial journey. Ron Gross, a couple of suggestions for Laura in terms of where she can turn for more information.
Ron Gross: Absolutely, I love that. Obviously start with fool.com, great articles and resources there for free, and you can learn a lot. If you’re really serious about moving into this as a career an accounting class or an intro to finance class at a community college, I think will be really helpful to help you speak the language of investing in business. A company called Udemy has the 13th hour online investing course, I admittedly have not taken it. I don’t know that much about it, so buyer beware, but you want to check that out, and then as far as books, we always recommend Peter Lynch’s One Up on Wall Street as a great place to start. There’s a series of books called the Little Books. You can start with a Little Book That Beats The Market. Little Book of Common Sense Investing and The Little Book of Valuation. That’s three great resources to get you on your way.
Chris Hill: Jason Moser got anything to add?
Jason Moser: Yeah, I think those are all really great resources. Ron mentioned fully agree. Fool.com. I mean, that’s a place where I frequented back in the day when I was really making my transition professionally. I feel like beyond that, Google is your buddy. I think investopedia is a great resource for learning more of the terminology, and it has very easy to understand definitions and examples such so checkout Investopedia when you can. Then I think just from a business perspective, it’s always really helpful to read through what these companies are publishing. Their actual SEC filings the 10Ks. Or if you find Investor Day presentations where you can get a hold of either transcripts or slide presentations. Typically you could just Google the name of the company and then followed by investor relations. That’ll give you a wealth of knowledge on any of these given companies that we cover here on the show. I think a couple of all of that with what Ron said their you put yourself on a pretty good spot.
Chris Hill: Let’s get to the stocks on our radar, our man behind the turkey sound effect, Dan Boyd is going to hit you with the question. Ron Gross, you’re up first. What are you looking at this week?
Ron Gross: I’m afraid I’m not going to be invited to Jason’s thanksgiving table because I’m looking at something a little different today, born out of some thinking I’ve been doing for my own portfolio. I’m a little light on investments that would do well in an inflationary environment. Stocks in general should do pretty well, but some sectors will do better than others, and I have almost no allocation to energy and my portfolio, which may be in mistake here, certainly has been a miss so far in 2021, very hot sector. I could go with some individual companies. We’ve got a great energy insider service at the Motley Fool, but I’m going to look for some diversification through an ETF, and I’m looking at the energy select sector spider fund XLE. With XLE, you get the big boys, you get Exxon and Chevron. You get Kinder Morgan, Phillips 66 Williams Companies, a total of 21 companies in all. Truth be told, I wish the allocation to Exxon was a little less here. I probably still dig in a bit to see if any alternatives look better to me, but energy is where I’m looking.
Chris Hill: Dan, question about the energy select sector spider fund?
Dan Boyd: I’m sorry, Chris. I was Ron talking, I was wondering some paint dry. It was a lot more interesting than what what’s going on this show in the last 30 second.
Chris Hill: Jason Moser, what are you looking at this week?
Jason Moser: Ron. I was listening. I got you’re back. [laughs] Hopefully this will wake you up, Dan, I’ve taken a look at Roblox ticker, RBLX. If you remember, they provide the tools and platform for creators to build 3D and immersive experiences. Most recent quarter just shows a business doing a lot of things. Bookings up 28 percent average daily active users, 47.3 million. Now at 31 percent hours engaged up 28 percent from a year ago. I think one of the big concerns I had early on with this business was that it was just a gain for kids. Clearly, it is more than just a game. I mean, you’re seeing relationships with companies like Vans, Nike, recent Chipotle Boorito Maze. Companies are utilizing Roblox’s platform to establish new identities within yes, Chris, the metaverse. The metaverse is going to be something that Roblox can capitalize on, and I think while some of those types of experiences, they might be temporary in nature. Others like Vans world, Mike land, those are going to be permanent. Those are ways for these companies to build new ways to reach an increasingly connected customer base, So really impressed with what I’ve seen with Roblox.
Chris Hill: Dan question about Roblox.
Dan Boyd: Absolutely. Chris is there are some like metaverse situation or Ron can explain energy ETFs to me. Maybe one day, maybe are put on a VR headset and I don’t know, helps me sleep. [laughs]
Jason Moser: I feel like that it’s just an outstanding use-case. We didn’t write that one down Dan.
Chris Hill: Do I need even asked Dan what you want to add to your one for? [laughs]
Ron Gross: Well Chris, it seems like the metaverse is here to stay or whether we wanted to or not. I’m going to go with Roblox.
Chris Hill: All right guys, we’re out of time. That’s our Thanksgiving special. We’ll see you next week.
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