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EPISODE · Sep 16, 2016 · 40 MIN

Apple Connects

from Motley Fool Hidden Gems Investing · host The Motley Fool

Apple's iPhone 7 connects with investors. Samsung heats up - but not in a good way. Bayer and Monsanto combine forces. And retailers report some dog days in August. Plus, best-selling author Bill Taylor talks about his new book, Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways. For a free preview of our Motley Fool One service, go to OneRadio.Fool.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

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This episode of Motley Fool Money is brought to you by Rocket Mortgage by Quick and Loans. Rocket Mortgage brings the mortgage process into the 21st century with a fast, easy, and completely online process. Check out Rocket Mortgage today at quickandloans.com slash fool. Everybody needs money.

That's why they call it money. I'll best stay there like my pre- But you can get up to the present. From Fool Global Headquarters, this is Motley Fool Money. It's a Motley Fool Money Radio show.

I'm Chris Stone joining me in studio this week from Million Dollar Portfolio Jason Moser from Motley Fool One Run Gross. And from Motley Fool Australia, back again, it's Mr. Joe. How'd it do?

Welcome back, sir. I'm the Mate. We've got the latest headlines from Wall Street. Best selling author Bill Taylor is our guest and has always been inside look at the stocks on our radar.

But we begin this week in the mobile phone industry. US regulators have issued an official recall of Samsung's Galaxy Note 7 after nearly 100 reports of the phone's battery overheating and in some cases catching fire. The FAA has also stopped just short of banning passengers from bringing the device on airplanes. Joe, I'll start with you.

Samsung has had a good couple of years in terms of reviews and in terms of sales and it appears that that good run is now over. It's burst into flames. Yeah. Much like their phones.

They wear a fire. They wear a plane at National Airport and as I'm walking through the terminal I hear overhead, if you have a Samsung Galaxy 7 phone, please be sure to turn it off before getting on the airplane. And I was like, well, this is new to me, but it sounds like Samsung is having a tough time. This is pretty much the worst thing that could happen to you, brand-wise.

You go out, you sell a couple million phones right ahead of an iPhone 7 launch, you have a longer placement cycle, it's a big bet for you, and it's a complete utter disaster, which they don't have a fix for. Meanwhile, it makes Apple fantastic and iPhone sales are off the charts. I just don't understand how they couldn't have caught this before they went on sale. Are these things not tested?

I mean, you would think they put these things through the ringer. No pun intended. Before they hit the market, and especially something as dangerous as this, it bothers my mind. That's to me the biggest, I think, misstep here.

Anybody can make a mistake, a design flaw, but to let it go to market without catching something this big first, I think, is a big deal. And there's, to your point, Joe, there's no good time for something like this to happen, but this really is- There's an especially bad time. There's an especially bad time. Last week we talked about Apple's event with the iPhone 7, and this week shares of Apple up around 10% because you've got phone carriers like T-Mobile coming out and saying that demand is through the roof for them, and they're not the only ones.

It's an interesting question of who's it blame here? Is it the engineers who clearly missed something, designed something improperly? Is it the people who are in charge of quality? Or is it top down?

I mean, clearly these- Yes, all of those things. Yeah, I'd say all those things, but there was pressure. We got to get this phone out the door no matter what. The deal of the week so far is, well, it's far removed from the mobile phone industry, and it is bear buying Monsanto for $66 billion in cash.

Bear is the German health conglomerate that owns products like Alcaselter, Clerotin, Capitone, and of course, Bear Aspen. Monsanto is the industry leader in agricultural seeds and chemicals. Here's my first question, Jason. Where's Monsanto are actually down this week?

Is that a sign that no one thinks that this deal is going to get approved by regulators in the US and the EU as it currently stands? Well, let me answer your question, Chris, with another question. Is it bear or is it buyer? I was wondering that as well.

I think that as Americanized as we are, I believe the correct pronunciation is buyer, and you know what? I really don't care because we're going to say bear anyway. Yeah, I think that when you look at me, this is obviously something that has been going along for some time now. It kind of just boiled down to the dollars and cents of it all.

I think if the deal goes through, I think it's a good sign. It's a good deal probably for both sides. I think Monsanto has been facing a little bit of a buzz-all here and finding avenues to grow. They're running into that polarization in the whole GMO issue.

I think you're either for them or against them, or maybe you're like me, and you really just don't care. But I think that generally speaking, when you look at bear, this is going to give them a little bit more diversity. It's going to help bring that Monsanto seed business into what they do so well with those agricultural chemicals division. I think ultimately for shareholders of Monsanto, they've got to feel pretty good about getting this price.

At least Monsanto held out to try to get as much money as they could. It sounds like it's going to be an all cash deal. It's going to be a dozen go-through. It sounds like it's going to be put under the microscope, but we're seeing a lot of consolidation in the second, I think, scale really matters.

At the end of the day, I think it probably goes through. I think at the end of the day, it's probably a win from Monsanto. I think bearish shareholders, they get a little bit more of diversity in the revenue stream there. It's going to be a good feeling to be able to just stroke a check for $66 billion.

That's not beautiful. That's not beautiful. In my defense, I'm conditioned by decades of American television commercials telling me it's bear aspirin. I'm sticking with bear.

Ron, what do you think of this deal? I think it makes sense. I do think it's going to have some antitrust trouble. We'll see if maybe they force some things to be divested.

Sometimes that is a way to get around the Justice Department. But I think it makes sense for shareholders. I think there's some synergies there. I know we hate that word, but I think it makes sense.

You look at what bear has done so successfully at this point in pharmaceutical business. Perhaps looking forward, the agriculture and seed business is a bit more of an attractive opportunity just given population growth around the world. The fact that land is not something that continues to be produced, so I think we can maximize crops and aid that technology along the way and be able to feed what is obviously growing planet. I think we're very shareholders.

It's probably encouraging. Yeah, from the government, instead of looking at this from a competitive standpoint, I think a little more along the lines of Monsanto is crucial to the foods of life of this country. Are we comfortable? Unfortunately, for some people, right?

Yes. I'm not saying that's necessarily a reasonable position. I'm sure someone in the government is asking that question right now and their governments in the world, I'm guessing, they would say, no, we're not comfortable with that. The retail numbers for August came out this week and Ron Gross, they were not amazing.

Overall, sales of the US down 0.3%. What stood out to you? Not a great report. Morrison expected first drop in five months.

The magnitude sales fell in seven of 12 categories. That's obviously not good news. Auto was weak down almost 1%. Sporting goods and building materials, both down 1.4%, not great.

Even online retailers, believe it or not, were down slightly, although they are up almost 11% from last year, so still healthy, but month over month, not so great. It's going to be a data point that the Fed has to look at as they decide whether they want to raise interest rates, which actually could come as early as next week. They've got to be thinking that this type of data point, this metric, doesn't necessarily bode well for overall GDP growth because the consumer is such a large part of our economy. Is it a blip?

Is the holiday season going to be better? That's something we'll have to watch. I think it's really hard to count on any real robust retail growth when you have a situation where obviously wages are somewhat capped. We know that consumer saving is just really at all time.

I think a lot of people are spending on credit here all about this student loan level that continues to get more and more out of control every month, it seems. I think we're just in a very difficult environment for retail to really flourish, so to speak. This is something that the Fed takes into consideration next week as they decide to not raise rates. There you go.

I'm making the prediction right there. They're not going to do it. But to take some of the other side of that, unemployment is relatively strong. It's relatively low.

We saw good income numbers recently. Stock markets near all-time highs. The consumer should be feeling relatively strong right now. I'm a little bit surprised to see the blip.

It might just be an anomaly. It might not be a trend. I think with the highs, I have a problem with making a leap from stock markets doing well to the general consumer really looks at that. It's easy for us to sit here and say that.

That makes sense. But I think for the average consumer out there, it all just basically comes out of consumer confidence, what they have in their bank account, and the stock market, all the other high's, probably isn't translating into a feeling of spending power on their board. I know we just got done with summer, but the run you mentioned the holidays, the seasonal holiday hiring is starting to kick in and we had UPS coming out this week saying they're going to be hiring nearly 100,000 seasonal workers. Target's going to be hiring another 70,000 on top of that.

That could bode well. That could bode well. The UPS number looks flat when you look at it over the last couple of years, which doesn't speak to growth. But when you think about the fact that they've been investing in technologies, specifically their Orion software system to get them better at handling the flow of e-commerce.

So they're actually improving, so they don't need as many people. So I think they actually are signaling growth. Interesting to note that all these folks are finding it actually difficult to find qualified workers because unemployment is low and so they're incentivizing raising wages, putting in retail employee discounts to try to draw people in. Coming up, we will dip into the full mailbag.

Stay right here. You're listening to Motleyful Money. Welcome back to Motleyful Money. Chris Hill here in Studio with Jason Moser, Joe Maker and Ron Gross.

Before we get back to the news, I just want to mention that for the first and only time this year, our Motleyful One service is open to new members. This is our all-access service. And if you'd like to kick the tires on it, you can go to 1radio.fool.com. That's 1radio.fool.com.

We've got a site set up featuring a bunch of investing videos with Tom Garner, Jeff Fisher, a retirement expert, Robert Brokam. So if you're interested, check that out by going to 1radio.fool.com. Wells Fargo continues to face questions over the scandal involving the unauthorized opening of two million customer accounts next week. CEO John Stumpf heads to Capitol Hill, where he will get to spend some quality time with the Senate Banking Committee.

Joe, I get that the $185 million fine that they have to pay is pretty much pocket change to them. But in the last week, that company has also lost about $20 billion worth of market cap. This seems like one of those situations that's going to continue to get worse before it gets better. Well, they've lost a lot of credibility.

And Wells Fargo has historically stood out in the investment community for their ability to effectively cross-sell. Now, we basically understand that there are a lot of 2 million or so fake accounts, more or less, that were set up. But I think this is a situation where somebody at the top should be fired. Instead, you had 5,000 little people.

They should have been fired too for setting up fake accounts. That's not okay. But there clearly was a structural systemic problem. If you had that many fake accounts being set up, 5,000 people, this wasn't a rogue operation.

You can't pass that off. It's certainly scandalous. I don't know anything about Stumpf. I'm not saying he necessarily needs to go.

But the fact that he is both chairman and CEO of the company makes me think that at a minimum, he should split those jobs and pick one. Yeah, we always like to see the split anyway. It creates less conflict. But I remember last week when we were talking about the story and we said it seems like they had gotten away on the skaeth, but we couldn't imagine that that was going to continue.

And here we see this picking up steam now. Now, once you get the politicians involved, Elizabeth Warren is kind of pounding the table here that heads have to roll. This doesn't go away. I think this continues to be a problem.

And I don't know if the CEO will be the one to leave, but I think we'll see kind of top-level resignations. Laura has unveiled a new music streaming service for just five dollars a month, undercutting the likes of Apple Music and Spotify. Jason, I got to say, I enjoy their ad-supported service. And I'm seriously looking at plunking down five bucks a month for this new one.

Sure. And you used to order there that I think kind of sums this all up in undercutting. I think Pandora ultimately is going to fall in the category of good service, probably not a very good investment idea. And I think when you look at ideal investments, things we're looking for like pricing power and even potential switching costs, substitutes, Pandora definitely have anything here.

I mean, they're obviously lowering the price. So they're not in a situation where they're going to be able to raise prices. We're already seeing that switching costs. I don't think there really is anything there.

I mean, I think maybe you've built a couple of playlists you like, but there's so many substitutes out there today for music lovers from Amazon to Apple to Spotify. So I think that Pandora basically is just stuck in this sort of perpetual negotiation to try to figure out a way to bring good content to their platform. And that's working. But I think there are other services out there that actually do this job better.

And so Pandora, beyond just offering a better pricing scheme there, I think they need to come up with something on the service there that's going to allow music lovers a bit more freedom into choosing the songs that they want, perhaps going the route of offering unlimited downloads, whatever that may be. But I think when you look at their income statement, it tells the story here. I mean, this is going to be a constant negotiation for them. And I just don't see how investors are going to be able to win.

Whereas consumers, I think consumers win hands down. Yeah. On the one hand, you have management sort of taking their time and saying, hey, look, we're not going to rush. We're building a service for the long term.

On the other hand, to your point, when you look at their balance sheet, they don't have a lot of cash to sit on. Yeah. And that's just it. I mean, we look at their balance sheet.

We look at these investments that they're making in the long run. But these investments have been going on for a very long time. And ever since the IPO, it's really been sort of a question of when are they going to turn that up for her portfolio? But I think we're going to go around the table and offer up a few more ideas for her watch list.

Absolutely. I have two kids myself, 10 and 11 years old. I will say the first thing we opened up for them, they were going to be 529 accounts. So you may want to consider doing that as well.

But in opening up a brokerage account where your child can actually own stocks, it's basically like a savings account. It's just one of those custodial accounts where the child's name on it and the parents name on it. And then ultimately, given that your child's not going to really have the motor skills anytime soon, you're probably going to be clicking the button for him. But I think those ideas are all great.

I mean, the names of the stocks that you mentioned, Disney, Hasbro, Amazon, my daughters on all of those stocks. It's fun. You're getting them at a good age where they really don't care about what those stock prices are doing day to day. But every once in a while, you're showing their portfolios, showing the businesses that they own, and you show them the actual results of patients and owning good companies.

Getting them started at that age, you're going to create an investor for life, I'm certain. And with custodial accounts, your kid doesn't get access to it until they're either 18 or 21. So let's just, in terms of stock ideas, let's just think in terms of round numbers, 20 years, a company for Abriel's daughter. Yeah.

So in thinking through this, I wanted to balance this with a stock that a child would be both interested in, but would also stand the test of time 20 years. So I'm going to go with Facebook. I'm going to trust Mark Zuckerberg to continue to innovate. I think Facebook will continue to evolve as the needs of consumers and technology evolves.

I think they'll be here 20 years from now. Jason? Yeah, I think your child's going to be familiar with under on her all his or her life. I think an arm's great company now, and it's going to be around for a while.

I double down on Amazon. Amazon Web Services is growing like crazy. It's the future, and Amazon is just gobbling up retail. Let's go around behind the glass, Steve, right now.

Because I know he's got some ideas on this. Steve, when you think about the next 20 years, what's a stock that Abriel could consider adding to the portfolio for her soon-to-ar-life daughter? Well, I've heard her get things about Carter's on the show. Is that one maybe look at?

I don't know what Carter's is. Maybe close. Maybe close. There you go.

Better out forever. Very much in keeping. You don't want to go Darden restaurants? With the parent company if you're a beloved Olive Garden?

You know, I think that at some point the unhealthy menu may really come to you be a downside for the Olive Garden. You don't think Olive Garden stands the test of time. You don't think it'll be around in 20 years? They'll be around.

Those breadsticks will be around. Absolutely. I'm going to go with Starbucks because as I've said before, technology's changed over time. But the production of coffee and the delivery system for coffee, I don't see that changing in the next 20 years.

So anyway, that's great that you're doing that every hour. And keep the emails coming. Radio at full.com is our email address. That's radio at full.com.

All right, Ron Gross, Jason Mezler, Joe Maker. We'll see you a little bit later in the show. But up next, a conversation with best selling author Bill Taylor about his brand new book, Simply Brilliant, how great organizations do ordinary things in extraordinary ways. Stay right here.

This is Motley Fool Night. Before we get to Bill Taylor, we've got to say a word about rocket mortgage because if you've ever bought a home, you already know how frustrating and time consuming getting a mortgage can be. Rocket mortgage brings the mortgage approval process into the 21st century by taking all the complicated, time consuming parts of applying for a mortgage out of the equation. With rocket mortgage, you can easily share your bank statements and pay stubs at the touch of a button, helping you get approved in minutes for a custom mortgage solution that's been tailored to your own financial situation.

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I'm Chris Hill. Bill Taylor is the co-founder of Fast Company Magazine, co-author of the best seller, Mabricks at Work. And his brand new book is Simply Brilliant, How Great Organizations Do Ordinary Things in Extraordinary Ways. And he joins me now in studio.

Thanks for being here. I'm happy to be here. The rare in studio guest from Motley Fool Money. So prior to this book, I think it's fair to say that a lot of your work was focused on what is commonly referred to as the tech industry, hardware, software, consumer tech.

One of the things I find interesting about this book is that you're featuring what I would call some incredibly basic businesses, a bank, a small fast food chain, a parking garage. What before we dig into the book, what got you thinking about these types of businesses? So this book is coming out shortly after Fast Company Magazine celebrates our 20th anniversary. So for 20 years, I've been living the world of, as you say, digitally driven disruption, software as a service, all stuff where tremendous innovation, excitement, creativity, but it's all fundamentally driven by technology.

And as I would go off and talk to audiences around the world or what have you, one of the pushbacks I got when I would talk to people from more traditional, established walks of life, which after all, probably about 90% of us, is that, hey, that may work for Google or that may work for Facebook, but we've been around for 100 years. Those ideas aren't going to work in our business. Or, you know, I'm in a pretty unglamorous, prosaic field. I can't be a passion brand like Apple or Nike or whatever.

And I gave myself a challenge to say, could I bring that same sense of imagination and reinvention, a sense that whether it's strategically in terms of the experience as you're creating, in terms of the companies you're building, really, we're kind of anything as possible, but set that spirit of creativity and change in some of the most basic traditional fields you can imagine. Stuff you said also, industrial distribution, small hospitals, what have you. And once you go out and start looking for those sorts of things, people in ordinary industries doing truly extraordinary things, they're actually there to be found. The trouble is, you know, if you're running a magazine, you can have, you know, Mark Zuckerberg, a Facebook on the cover or Travis Kalenick from Uber on the cover, and that's, you know, just instant recognition and they become these kind of business superheroes.

What I wanted to do, because I think this is how people learn, is to introduce a new cast of characters who are undeniably doing remarkable things, but the kinds of people in companies that lots and lots of other people could relate to and say, you know what, if they can do that, maybe I can do that. All right, let's get to some of the businesses that are featured in the book. I'm embarrassed that I haven't heard of it because I'm someone who enjoys food. And so, pal's sudden service.

Okay, I don't know what it is about pal. This is like everybody's favorite case study in the book. I really don't. Absolutely.

So here's this small, and it's been around 50, 60 years. A small fast food chain in Tennessee, a few locations in Virginia. Yep. And the speed with which they operate is astonishing, not compared to restaurants in general, compared to their direct competitors.

We talked about fast food, pal's sudden service, and I'm assuming your numbers are correct. Yes, they leave everyone else in the dust. Yes, they. So, this is probably the extreme version of going to not Facebook, not Google, kind of the let's go to a burger and fries joint.

But it's this remarkable company in Northeast Virginia, Northeast Tennessee, Southwest Virginia, kind of the great Smoky Mountains kind of deal. And if you go there, if you know people who are from there, Kingsport, Tennessee, or whatever, it is truly a, I mean, this is a cult, cult brand. Talk about absolute passion following. Part of it is because the food is genuinely good.

And I'm not a big fast food guy, but I spent a lot of time down there and highly recommend the the Frenchy fries and the double sauce burger, I think is what they call it. But what they've developed is a way of operating that is so radical and so extreme. And also, by the way, so totally consistent and reliable that people are just amazed by it. So the deal is they've got the, for those restaurants, they're very fun and colorful to look at the design is kind of giant, it kind of looks like a giant bag of food with French air.

They're kind of crazy. You drive up, but you don't sit inside them. You drive up and you don't talk into a scratchy microphone like you might have a McDonald's takeout of a person leans out the window and takes your order. They will take your order in 18 seconds or less.

You then drive around, might be a few cars ahead of you, but you drive around to the other side of the restaurant and you're presented your bag of food and you will sit at that second window for 12 seconds or less. This is, I mean, you know, 10 times faster than the service you will get at a McDonald's or a Burger King or anything like that. Now you would think you're taking the order and you got kids screaming in the car, you got the radio playing, you drive around and have the stuff you want. It isn't going to be there.

You're going to have a large fry. You want a small fry. If you, one of the reasons you can get through in 12 seconds, if you are a customer and you open the bag and look to check to see if the right stuff is there, they get very, very upset with you because part of the brand promises they never make a mistake. In fact, they're not perfect, but they only screw up an order once every 3,600 times.

This is a level of near perfection that is unparalleled in that business to the point where they a few years ago won the Baldrige role, the Malcolm Baldrige's National Quality or it's the highest honor for quality. You could win, you know, FedEx is won it. Ritz Carlton has won it. And now this freaking 28 restaurant burger joint in Tennessee has won it.

It's just this really, again, people who say, not only are we not going to be average, not only are we going to not be better than average, we're going to commit ourselves to a way of being in this business that nobody else can remotely match. We can talk about how they do that because there's a lot of the how behind it, but that is their aspiration and they just set the bar very high and they manage to hit it. Well, let's talk about how they do that because passion is something that I think if you just pulled 100 business leaders, whatever their business, whatever their industry, I'm guessing that would pull very high. Sure.

I'd love more passion from my employees. That's not something you can just go out and manufacture. Right. This is a case of passion and high aspirations meets total discipline and surprisingly, this is one of the most intellectual companies I've spent time at.

So first of all, this only works if you hire people who can play this game. So they are obsessed about hiring. They've developed their own psychometric tests and they pals at pals. Yeah.

They've developed and they work with Eastern Tennessee State University and they've developed out of it. It's like a 70 question survey with very unusual questions that begin to get at. Is this the kind of person who could thrive in this business? They then train these people at a depth that I'm sure no other facet.

They do 110 hours of training before you can ever actually interact with a customer or cook a French fry that goes out to a customer. Or I mean, that's just a huge amount of training in a field, by the way, restaurants with massive, you know, 100% turnover is not unusual and that is nothing like that. It pals, but if you go to McDonald's or whatever, the local restaurant, 100% and you know, this C.L. said to me, how can you afford what happens if you spend all that time and money on training and the people leave?

Turnover. Right. And he says, look at the other way, what if we don't spend all that time and money on training in the people stay? What kind of a company are we going to have?

But beyond all that, the other thing here, your train, you're good to go. You're up and running, you're doing your thing. And they cross train them in six or eight different jobs. Every day when people report to work, the computer spits out two people that day who will be on the spot retested in one of the jobs they've already been making fries, taking orders over the case maybe.

And if you don't pass a test, you're not punished, but you can't do that job again until you've gone back through the training. So the theory is, you know, machines go out of calibration. What people about it, you know, you learn this six months ago, you got to make sure you're still out on your game kind of deal. But this here's the other deal.

For everybody in a kind of managerial capacity of the company, there is a 21 book master reading list. And everybody's expected to eventually read all of those books. And some of them are, you know, Joe, Jeran, and quality. One of them is sons who the art of war.

It's a very eclectic kind of interesting, uh, realist and the CEO of the company Tom Crosby literally runs a book club. And so once a week, there are five managers from cross country pick. They go to Tom Crosby's conference room. They spent the week before reading one of these books and they have in the same way that, you know, uh, a bunch of folks might sit around and they, uh, so far, you know, talk about Jane Eyre or whatever the case may be at their monthly book.

They have a business book club where they talk through one of the lessons you got out of the book. How could we apply them at pals? How can you apply them? I mean, this is a really a kind of a deep intellectual commitment.

And a company that sells burgers, hot dogs, french fries and milkshakes. It's just kind of spectacular. So that weird juxtaposition of the business they're in and the, the utter both creativity and discipline and seriousness of purpose with what's, what's the approach to the business is I think what gets lots of people excited about it when they read about it. Before I let you go, I want to ask you just a couple of things about sort of related to your previous book, Mavericks at Work, um, spot you up with a 10 years ago next month.

It made its lofty appearance. Is there going to be like a joint party between that and the 20 year for Fast Company magazine? There should be. No plans to do so.

The third, I did one about five years ago called Practically Radical. Actually all about how to make sort of big change and long established company. So this is the, my unholy trilogy, the latest one. Well, I wanted to spot you up with some more familiar names and, and companies better known probably the pal Sun Service and just get a quick thought from you in terms of where you see this leader and this company right now, whether it's the opportunities that they have or the challenges they face.

And let's start with the big kona apple and Tim Cook. So there are people who know a lot more about apple and Tim Cook than I do. For the first time I've gotten a little concerned that, um, the lack of the relentless and remorseless in many ways hard to like the closer you get to the sun, but power of Steve Jobs means that apple may not necessarily have that same uncanny impulse to do one of two things. One, deliver something that nobody really knew they needed until apple put that in front of them.

And how have I lived my life without this or secondly to take a product category or some offering that's been out there for a while that's been done in a really crappy way and either make it so simple and so elegant or best of all so simple and so elegant that even though apple and this is sort of the iPod apple wasn't the first one by any means to do that, their interpretation is so remarkable that it's almost as if they've invented a new product category. And I just don't, I don't see those impulses coming right now and I worry that maybe, uh, I mean, I'm not a big believer in the great man or great woman theory of history, but it is the case that every so often true giants do stride the planet and sometimes they're really impossible to replace. Let's go with Netflix and Reed Hastings. So, um, I got some flak when Mavericks at work came out because it came out at a point where and we learned a lot from Netflix and Reed Hastings and that was probably three, uh, the, the first of the last three times that Netflix has been pronounced dead on arrival because of some great change in the marketplace or something.

I, I would have to say, I consider neat and Reed Hastings, one of the three or four greatest business strategists I've ever met in my life. And to me, what's impressive is he combines a real brilliance with strategy with a deep appreciation for, for an organization like Netflix Netflix, to be able to sort of ride wave after wave of technology change and business model change. You've got to build a culture that syncs up with your strategy. So, and so the, the, the, they made some stuff with the capacity of Netflix to have made that transition from first the DVDs into streaming, then from streaming into also original programming.

I mean, this guy has already sort of gotten through two huge waves of strategic transformation that most companies never get through in a, in a lifetime. So I haven't looked at Netflix doc lately on them. It's up, down sideways, whatever, but I find it very difficult over the long term to bet against the mind of Reed, Hey, the things as a strategist, but also the authenticity of Reed Hastings as a company builder and somebody who takes the culture of that organization as seriously as he does. What about Facebook and Mark Zuckerberg?

I'm so again, people know a lot more about Facebook than I do. I am amazed, astounded, blown away by the capacity of Facebook to kind of just ooze over everything, whatever. Some new little burst of energy comes through, you know, comes in whether it's messaging or snaggle. They are able to sort of like the Borg kind of incorporated that into what they, into what they do without I think becoming sort of a hodgepodge or confusing or whatever the case may be.

So I, again, I'm, I don't spend a lot of time analyzing the business models of different social media companies or whatever. But as I think about the capacity of Facebook to keep moving and morphing and adding eyeballs and doing acquisitions that strange enough seem to be working out as opposed to most technology acquisitions, which don't work out at all. I'm pretty darn positive about Facebook. I think.

All right. Last question. I'll let you go. The research you did for your new book, Sibley Brilliant, you traveled thousands, a lot of a lot of flier models from England to Alaska.

Yeah. I need a travel tip. It can be a way to get through airports more quickly, can be a restaurant recommendation, but through all of your travel, you must have at least one travel tip you can share. The rain, I, next time you find yourself in Anchorage, Alaska, I highly recommend the Rain Deer Stew at the Captain Cook Hotel.

It is to die for. You're kidding. I'm not kidding at all. Best Rain Deer Stew I've ever had.

How many times have you had a Rain Deer Stew? Only Rain Deer Stew I've ever had, but it was really quite good. The book is Sibley Brilliant, How Great Organizations Do Ordinary Things in Extraordinary Ways is fascinating stuff. So pick up a copy, build tailor.

Thank you so much for being here. That was a lot of fun. Thanks. I have an extra giving inside look at the stocks on our radar.

This is Motley Full Money. As always, people on the program may have interest in the stocks they talk about in the Motley Full Money Recommendation 4 against. There's no buy or sell stocks based on what you hear. Welcome back to Motley Full Money, Chris Hill, Hearing Studio.

Once again, Jason, Moser, Joe Maker and Ron Gross. Time for the stocks on our radar. Ron Gross, you're up first. What are you looking at?

Oh, Chris, you stole my thunder in the last segment. I'm going with Starbucks. SBUX, huge opportunity internationally, especially in China. That's the reason I'm actually pretty big on it right now.

CEO Howard Schultz does make mistakes, but he has a track record of growing this company profitably over the long term and I'm pretty impressed with him. Not the cheapest stock at 30 times earnings, but I think the growth will be there to support that. Jason, what are you looking at this week? Yeah, we're talking about Grocers last week and looking through United States.

Natural Foods earnings this week, ticker UNFI. It's just sort of an interesting dynamic. The stock has really kind of been on a steady decline since the beginning of 2015, but they noted that they've just went through the lowest level of quarterly food inflation in at least seven years and we've certainly seen that in all of the Grocers results as well. It's difficult for them to pass through pricing there, but once that inflation starts coming back around a little bit, they'll start realizing a little bit more of that.

As a distributor, they are not bound to just one grocer. They're distributing to grocery concepts all over the US and Canada. So interesting company, Big Dog and the Space, I think it's distribution model. It's got some competitive advantage there.

Joe Maker, what are you looking at? Interactive Brokers, tickers IBKR. It's led by their founder who still owns almost 90% of the company. Incredibly well capitalized, growing very quickly, reasonable valuation.

If you're not familiar with it, they're the low cost provider in brokerage. They started focusing on institutions moving towards retail, slowly gobbling up market share picked into business. Steve, we've got coffee, we've got food, we've got a brokerage. You got one stock you want to add to your watch list?

Well, I don't drink coffee, but I do believe in Starbucks there everywhere. I want to start by. All right, Jason Mozart, Ron, Gross, Joe Maker. Always good to have you in studio.

Thanks, dude. Have a safe trip back to Australia. That is going to do it for this week's edition of Motleyful Money. Our engineer is Steve Broido, our producer, EZ MacRia.

I'm Chris Hill. Thanks for listening. We'll see you next week.

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