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Wait and See on Rates and Tariffs
00:42:31
Fed Chair Powell and team want to see more before making changes to interest rates, and automakers are an early sign price increases might be coming in response to tariffs.
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- [00:02]
Dylan Lewis
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Bill Mann
Everybody needs money. That's why they call it money.
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Dylan Lewis
Life are free but you can give.
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Tim Byers
Them to the buzz and be From Fool Global headquarters.
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Jason Hall
This is Motley Fool Money.
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Dylan Lewis
It's the Motley Fool Money radio show. I'm Dylan Lewis joining me over the airwaves. Motley fool senior analyst Tim Byers and chief investment strategist over at Motley Fool Asset Management, Bill Mann. Fools. Great to have you both here.
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Tim Byers
Great to be here.
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Bill Mann
How you doing, Dylan?
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Dylan Lewis
I'm doing great. This week we have a showdown in the food delivery market. We're going to be checking in on Warren Buffett's last Berkshire meeting as CEO. And of course, you guys have brought the stocks on your radar. This week we're gonna kick things off with Fed Watch 2025. Jerome Powell and his merry band of Fed policymakers got together this week and decided to keep interest rates exactly where they are. Bill Powell has been signaling, wait and see. Is that the right move here for Fed and co?
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Bill Mann
It seems like it. I mean, I would suggest that the president thinks that it is not. It came out pretty hot calling him a fool for not cutting rates. The Fed feels like they're in a pretty comfortable spot. There's still a little bit of inflation that. But it really bears remembering that the Federal Reserve is not a. They're not a forward looking entity. They are in a lot of ways kind of backward looking. They tend to respond to the market rather than impact it. So yeah, it seems fine to me that they've left rates where they are. There's an awful lot of confusion and some of that confusion is being brought about by an administration that really seems to love chaos more than anything else. Hope the, the end result for that chaos, they're hoping is lower costs for federal debt.
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Tim Byers
Yeah. And I'll just add here quickly, Dylan, I mean, Fed rate cuts are a pretty blunt instrument and you want to use them rarely. And so I'm backing Bill on this one. I like that, Jerome Powell is slowing his roll. That is exactly what he should be doing. Slow your roll. It's a blunt tool. Use it sparingly and we'll see what happens. I don't expect us to be having a sudden news announcement about rate cuts sometime in the next couple of months. I very much doubt that.
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Dylan Lewis
Part of the slow roll here is Powell and company really want to see, okay, do tariffs stick around? Does that lead to higher prices? Does that create an inflationary environment where it might affect the Fed policy and what they want to do with rates? We are starting to see some progress and some updates on the trade side of things. Bill. US and UK reaching some on trade and tariffs this week. Headline, most goods from the UK coming into the US will face a 10% tariff. There are some carve outs. I have to be honest, even having spent about an hour reading through this, it is very hard for me to parse what will and what will not be affected by this.
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Bill Mann
Yeah, it really bears remembering and I, and, and I, and I've said this before, that the tariffs really only have one target in mind and that is China. So whatever you see happening with the uk, it is a, it is in some ways the impact of the US Government forcing our allies and even non allies to choose which, you know, which horse they're going to back. So when you see something like a tariff rate cut between the US and the UK you have to keep in mind that the biggest game in town is the impact of the US and China tariff war, if you will.
- [04:33]
Tim Byers
Yeah. And can we just be quick on this, Dylan? Like I think the word deal in the US UK deal is doing a lot of heavy lifting there because this isn't really a deal yet. I mean, it might be a deal, it could become a deal, but it isn't really a deal here because let's be clear, the 10% tariff still there. There are maybe some carve outs for different things, but essentially Bill's got this right. What we're trying to do is just curry favor, create allies. It would be, and there is some wisdom to that. I mean, there is a lot of chaos from the Trump administration. But if you are intending to try to bring China to the table and bring better terms for the world and particularly for the United States, you would be wise to have allies in making that, you know, argument, making that, making that play. And so here's a chance to try to create some allies.
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Dylan Lewis
How rather than deal, agreement in principle, why don't we go with agreement in principle?
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Tim Byers
Principle, okay.
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Bill Mann
Are they chips or Are they fries? I mean, yeah, yeah, the nomenclature doesn't matter. It's just you've got to keep your eye on what the ultimate goal is here. And it's really interesting to see as we are recording the President saying hey, maybe 145% wasn't it, maybe it's 80%. And people are noticeably going to say well he's caving. The Overton window is moving on what tariffs should be. And so everything that you see has to do with statecraft and what is happening between the United States and China.
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Dylan Lewis
Throughout earnings season we have been looking at how companies are processing that and what they are forecasting, what they're signaling to the market. We had Ford weigh in with their results and also some commentary on the macro and, and a lot of attention on the automakers bill. When Ford reported, they said hey, we're expecting a $2.5 billion hit due to tariffs. Not as bad as what GM had signaled but still a sizable effect for this business.
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Bill Mann
Yeah, and one of the things that is, that is true about, about autos is that even the ones that are American nameplates, a huge amount of the input will come from, from other countries. In this case for Ford, mainly Canada. And you know, obviously there's been a huge amount of the appropriateness of having of us having tariffs with literally our largest trading partner, but this is an outcome of that. You're already seeing some recognition of the damage that is going to come for a company like Ford. The market seems to be responding somewhat calmly, I would say. And I think that has to do with the fact that there is either a recognition or a hope that something that will get done there that will take the pressure off of a company like Ford.
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Dylan Lewis
In addition to the tariff hit, they also noted, hey, we are going to suspend some of our guidance. And so far this earnings season we have seen management teams handle the tariff situation differently. Tim. We've had people suspend guidance. We've had teams say, hey, we're going to provide multiple forms of guidance based on different scenarios we can anticipate. Some have made dramatic changes to outlook for companies in your portfolio. The management teams behind them. What are you looking to hear?
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Tim Byers
Well, I'm looking to hear as much honesty and transparency as possible here. An area that I cover where this is happening with regularity is the semiconductor market right now. Both Nvidia and amd, you'll remember Dylan, because I think we talked about this somewhat recently. They had to say, hey look, you know, because of export restrictions we are not going to be able to sell some chips that were designed to sell into the Chinese market. We thought we were going to have, I think in Nvidia's case was about 1.5 billion worth of chips that they have essentially just written off. And in the case of AMD, it's about 800 million. So I just want clarity. I want clarity and transparency as much as humanly possible. You're not going to get it perfect. Just tell us what you're facing and how you intend to deal with it. And that is, that is probably the best that these management teams can do because again, I'll go back to what Bill said earlier. This is an administration that just can't. I mean they are rolling in chaos and loving every second of it. They're like living their best life, just throwing chaos left and right. But I think, I mean, to be fair, that is part of what they believe they should do. Whether or not that proves to be true, I don't know. But amidst that, management teams need to be transparent.
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Dylan Lewis
With the challenging environment here in the U.S. investors have been looking for businesses not as reliant, not as exposed to US Trade. And Tim, we got an update on one of your favorites in that zone this week. This is one of my favorites too. Mercado Libre, one of my biggest holdings. What's going on with the business, I.
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Tim Byers
Mean, it's just crushing it here. I'll give you some overall top line numbers here and then I'm going to focus in on one that I think is particularly important. So 13.3 billion in overall revenue. If you just go on a pure basis, that's up 17% if you do foreign exchange neutral. Because currency, I mean, Bill can tell you this currency is crazy throughout South America. So it was up 40% on a foreign exchange neutral basis. Total items sold, 492.2 million. Total transaction, you know, total payment volume, 58.3 billion. That's up 72%. But here's the one I want to focus on, Dylan, because it is increasingly true about Mercado Libre that they are becoming a fintech. They are becoming a provider of credit for consumer markets where they operate particularly in Brazil and Argentina, but also Mexico. That credit portfolio now is $7.8 billion. They have scaled to become a credit provider in these markets at an astonishing rate. And I think that deepens the moat for Mercado Libre. This is a fairly recent rule breakers recommendation. Part of the reason for that, Dylan, is that we think the moat is getting deeper here. It's not just because of the macro, the moat seems to be getting deeper here. As as much crazy as happens in South America with just the chaotic financial markets, currency fluctuations, there's a lot of things you have to remember, at least for me. What I remember as an investor is that Mercado Libre is good at this. They have handled this for a really long period of time. They know how to deal with the various machinations of the markets that they are in. And they're, they're doing really, really well here. So great, great business.
- [11:40]
Dylan Lewis
All right, we're going to take a quick break. We're going to be back in a minute with Uber and Doordash duking it out. Go to delivery app. Stay right here. You're listening to Motleyful Money. Hey fools. We're taking a quick break for a word from our sponsor for today's episode. Real estate. It's been the cornerstone of wealth building for generations, but it's also often been a major headache for investors with 3M maintenance calls, tenant disputes and property taxes. Enter Fundrise's flagship fund, a $1.1 billion real estate portfolio with more than 4,000 single family homes in the Sunbelt communities. 3.3 million square feet of in demand industrial fac, all professionally managed by an experienced team. The flagship fund taps into some of real estate's most attractive qualities. Long term appreciation potential, a hedge against inflation and diversification beyond the stock market. Check, check and check. All without the complex paperwork, massive down payments and soul sucking landlord duties. Visit fundrise.com fool to explore the portfolio. Check out historical returns and see just how much easier investing in real estate can be. Carefully consider the investment objectives, risks, charges and expenses of the fundrise flagship fund before investing. This and other information can be found in the Fund's prospectus@funrise.com flagship. This is a paid advertisement. Welcome back to Motley Fool Money. I'm Dylan Lewis here on air with Bill Mann and Tim Byers. The battle to earn share of human laziness continues. Doordash and Uber both out with their earnings reports this week giving us a glimpse into the ride hailing and food delivery industries. Tim Doordash, the pure play here shares down about 10% after they reported. On the surface this looked like a pretty good quarter.
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Tim Byers
Was a good quarter. I love that they are cashing in on human laziness. That is accurate, factually correct, Dylan. Here's what I want to focus on. Doordash has decided to spend 5.1 billion of its 5.8 billion in cash and investment shortcuts investments on acquisitions, two of them specifically Deliveroo provides DoorDash like local commerce to primarily in the Middle East. So expanding their footprint. I think that deepens the mode a little bit. I find that pretty interesting. That was about a $3.9 billion of the 5.1. The other 1.2 was for seven rooms which is a New York City based provider of hospitality software. For doing things like improving in store sales. Revenue is up, good free cash flow, good business. I like that they are trying to do reasonable acquisitions that can expand their footprint. It might be an opportunity with the stock down like this. Dylan.
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Dylan Lewis
Bill, looking at a company like DoorDash Digital Business, not subject to tariffs in the traditional sense, but still very much subject to the macro environment and input costs. When you look at what they were talking about with the quarter and what they were forecasting out, what are you seeing?
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Bill Mann
For the life of me, I can't really figure out how DoorDash's shares are up and the business is up when every restaurant that I'm tracking is down. Like it feels like this is a symbiotic relationship between the two, but maybe it's not. Here's what I wonder about DoorDash. I would love if they would give a little bit better information on sort of the. They do give average ticket size information. But I'd love to know what the spread of that is because I actually have this pet theory that people are much more inflation agnostic than they let on by virtue of the fact that so many people do things like order coffee and use DoorDash and order smoothies and use DoorDash. I would love to know what those like sub $6 tickets, how many of them there are.
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Dylan Lewis
That is the pinnacle of laziness right there, Bill.
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Tim Byers
100%, right?
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Bill Mann
I guess laziness may be amongst the most inflation resistant materials that there are then.
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Dylan Lewis
Oh, I love that. I think we need an indicator for it. I'm all looking at Uber and the results there. A little bit more ballast to this one because they're also in ride hailing and that's a very large part of their business. It seemed to me like a business as usual quarter here, Tim.
- [16:02]
Tim Byers
I mean it did. But let's stick with the theme here because how about a hand for Uber Eats? That was the category that led for Uber. Up 22% in constant currency. Adjusted EBITDA, which I know adjusted terrible. They just out all of the important things, blah blah, blah, still up 45%. So it's a bogus metric. But this business is getting stronger and I have to say, Dylan, I mean, they have been on a roll for a while now and this is a scale business, but, but they're another one. They are operationalizing laziness in the best possible ways.
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Dylan Lewis
So putting the results here for these two companies together and zooming in specifically on the food delivery business. DoorDash did 23 billion in orders in the most recent quarter. Uber did 20 billion in delivery bookings. That is specifically their Uber Eats business. A couple years ago, if you were to ask me, I would have said inevitable that Uber takes over the space. They are a bigger company. They have done this before in ride hailing. Doordash is bigger and growing faster. Bill, what are they doing right here?
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Bill Mann
Well, I mean, in some ways you don't have to do much when you, when you have that level of scale. What we really have now in the US at least, is a duopoly. And so I don't know that DoorDash and Uber have necessarily competed out against each other, but they've run every other alternative business out of town. They've done it with their relationships. I think that they've done it with their service. Although, you know, again, I'm not someone who has smoothies delivered to me. And I think that they've done it really well.
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Tim Byers
You can admit it. Come on, admit it.
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Dylan Lewis
Doesn't make you a bad person.
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Bill Mann
There was that one time. There was that one time, Tim. They've really done it with, with, with their relationship and oddly enough with their, with, with their pricing and, you know, and ubiquity. And I think from here you've got the duopoly in the U.S. i know in other countries Tim brought up Deliveroo, but I think that's really what you've seen more than anything else.
- [18:11]
Tim Byers
We need to give just some credit to the paradigm shift that's happened here. I mean, in some ways, Dylan, this is a testament to what happens when paradigms shift. And what I mean by that is habits change. And so we've been talking about, I mean, we've been joking about operationalizing laziness, but that is habit change. Habit change has come. I will tell you something. I'll confess one, something that I use DoorDash for.
- [18:37]
Dylan Lewis
You know what I use it for?
- [18:39]
Tim Byers
About $20, $25 orders to deliver flowers. Great flower delivery. Amazing flower delivery. And it's just an alternative. It's disruptive, but it's just interesting. Last mile logistics works when habits change. And I think that's a big part of the story.
- [18:57]
Dylan Lewis
Tim, you just gave me the Perfect. Tee up to remind listeners Mother's Day is this weekend. So if you're running late, if you haven't gotten it together, maybe take Tim's advice and doordash some flowers. They will save you and make you the son or daughter that you want to be to your mom.
- [19:12]
Tim Byers
That's right. That is right.
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Dylan Lewis
Bill wrapping us up quick here. We also had an update from Novo Nordisk this week. This is supposed to be one of the great growth opportunities out there in the market with the GLP1 drugs. Shares down more than 50% from highs. What's going on?
- [19:24]
Bill Mann
Novo Nordisk is quite literally a one product company. I know they have got a portfolio, but Semaglutide is their cash cow. You have the inflation Reduction act in this country. Pricing in the US Is coming down. They are directly in focus. They did meet their earnings. They had an okay report. But I think that people are starting to look at the GLP1 drugs and beginning to differentiate. And it just seems like Lilly has a, you know, has a superior application to Novo Nordisk. And I think that there is trouble ahead for this company.
- [20:05]
Dylan Lewis
All right, Bill, Tim, we're gonna see you guys a little bit later in the show. Up next, we've got the scene from Omaha from a fool that was on the ground for Berkshire Hathaway's annual meeting. Stay right here. You're listening to Motleyful Money. Times have changed and times are strange. Here I come but I, I ain't the same. Mama, I'm coming home. Time's gone by it seems to be you could have been a better friend to me. Mama, I'm coming home. You took me in, she drove me out.
- [20:45]
Bill Mann
Yeah.
- [20:54]
Unknown
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- [22:04]
Dylan Lewis
Welcome back to Motley Fool Money. I'm Dylan Lewis. Last weekend was Berkshire Hathaway's annual meeting, the Woodstock of capitalism. Motley fool contributor Jason hall was in Omaha to get in on the three days of stocks, snacks, and Buffett. Jason, this was a particularly momentous year. You were on site for Warren Buffett officially passing the torch to Greg Abel. Spin me some yarn. What was it like?
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Jason Hall
I was. And the momentous thing was not the two pounds that I've gained since getting home eating seas candy. So I was at the Berkshire meeting. That was Charlie Munger's last meeting a couple years ago before he died later that fall. Of course, after coming to this meeting, we're wondering if the board's going to let me show up anymore. I think they probably will. But we decided to go. A few of us went because a little bit of the expectation that this was a good chance. Buffett turns 95 later this year, that this was probably his last meeting as CEO. We were not expecting him to retire or make any sort of announcement, so much so that we were actually in the exhibit hall when it happened. We stupidly made the decision to try to get ahead of the crowd. We didn't expect anything to happen. Jeff Santoro, one of our colleagues here at the fool that was there with us, was smart enough to have his earbuds in and listening to the live stream on his phone. And then he just stopped and got this look on his face and we're all like, what's going on here? And then he started repeating what Buffett was saying about it being time to let Greg Abel take over. And then I just took a moment and stopped and I looked around the hall at all of the people walking around, the hundreds and hundreds of people in the hall that had no idea that everything had changed. But at the same time, it was kind of a reminder that nothing had really changed.
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Dylan Lewis
Yeah, I mean, Buffett has long said that he likes businesses that a ham sandwich could run. And I don't think would feel like his ego is too bruised by saying that's what he has intended here with Berkshire, that someone else can take it over. We view it as a very complex business, but I think he would like that to be almost a non issue. The fact that he is transitioning the leadership over to Greg Abel.
- [24:02]
Jason Hall
I think that's right. It is complex because there are hundreds of operating businesses, but most of those businesses are actually relatively straightforward and simple. The decentralization of the Operators of those businesses making the decisions and not having to phone HQ to get instructions for what to do is absolutely built into the business and that certainly simplifies the process. And the other thing too is Dylan, this has been in the works for more than a decade. We can go back to when Ted Weschler and Todd Combs came on in 2010 and 2012. They both have taken on a lot of responsibility with running different subsidiaries, having those CEOs of the subsidiaries report to them on top of their taking on some of the portfolio. Greg Abel's been the key contact for the Japanese trading companies that Berkshire has significant investments in for multiple years. So it's not like he's just handing in the keys at the end of the year and everybody has to figure out the combinations to the safe. Everybody's already doing other things. So I think that that helps simplify things as well.
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Dylan Lewis
There are a lot of businesses that are certainly brand name wise at Berkshire stature that have struggled tremendously when it comes to succession. I'm thinking of Starbucks, I'm thinking of Disney. You talked a little bit about the planning process here, but we watched the market weigh this in real time on Monday when it opened processing this news market was down about 5%, but it was not a huge sell off for Berkshire shares. I think by and large people knew that at some point this was coming and the market seems pretty happy with Greg Abel as the named replacement. What kind of lessons do you think we can draw from the way that Berkshire's handled this?
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Jason Hall
As a starting point, it's having a plan and to be thinking and looking and acting for things that are going to happen well in excess of your likelihood of being the person making the decision. One of my favorite Buffett quotes is somebody sitting in the shade today because somebody else planted a tree a long time ago. It's one of my favorite quotes and it's a reminder of being able to truly think in the long term. And that's not next year, it's certainly not next quarter. It's thinking in decades and even sometimes in centuries. And how ingrained that is in the DNA of the Berkshire that Buffett has built.
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Dylan Lewis
That is an all time favorite Buffett quote and he certainly does not need to add to the anthology of quotes. But he is still going to talk and still going to have his isms here and there. Before we get into the future of Berkshire, any bits of wisdom from this year that you thought were particularly appropriate?
- [26:28]
Jason Hall
Yeah, he's kind of become the Greg Maddox of quips here he might not have the fastball, but, man, he can still locate a pitch like nobody you've ever seen. And two, there were two that really stood out to me that were my favorites. My first one was, I'm somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I've ever made Berkshire. Steve picked him out to succeed him, and he made the right decision. Nobody but Tim could have deployed, could have developed it like it has. So that's. That was the one that really stood out to me the most that he said. The other quote that really stood out to me was we were very patient when we were looking at opportunities and we want to act quickly. But while we're being patient, never underestimate the amount of reading and work that is being done to be prepared to act quickly. Because we do know equities in a variety of private companies that when the opportunity presents itself, we are ready to act. So we think about a lot of times Berkshire doesn't move quickly on things. They're slow, they're stodgy, but they can move quickly. We've seen them do it. And it's the work that they put in before that matters. Here's the thing that stands out. That was Greg Abel that said that, Dylan.
- [27:38]
Dylan Lewis
That wasn't Warren Sneaky there. Good way to tee that one up. You know what I like about that Apple quote and the focus on Tim Cook is that it's probably one of the most successful succession stories of the last 20 years where you had someone who built a visionary type approach to product, created incredible consumer products in everyone's homes, and a lot of people were worried about what that would look like in the next chapter. Found the perfect operator to efficiently manage that business and move it forward. Is that kind of the story and the expectations that Berkshire investors should have with Greg Gable?
- [28:13]
Jason Hall
Yeah, I think so. So there's something that Greg has in common with a lot of other operators running a lot of the subsidiaries of Berkshire that a lot of people don't know. Buffett wrote about the founder of Forest river in the annual report this year that just Pete Legal, who just died late last year at 80, who sold the business to Berkshire and continued to run it for the next nearly, you know, nearly 20 years after selling the company. There are a lot of those people. It was only a couple of years ago that Greg Abel sold his stake in Mid American Energy to Berkshire Hathaway. He came to Berkshire in 1999 with Mid American Energy, which he had a substantial stake in. There's Very much a founder's mentality and owner's mentality across the executive team. And I think Greg Abel is just very emblematic of how important that is to the culture of leadership, not just at the corporate office, but going down to the subsidiary levels as well.
- [29:11]
Dylan Lewis
Let's talk a little bit about the state of Berkshire as a business and what Greg Abel is inheriting here. A lot of operating businesses, about 190 by my account, trillion dollar market cap, which will make getting bigger a little bit tougher. There's a decent amount of cash, maybe Understating it, about $350 billion in cash business right now. That is a blessing. But it also invites so much speculation as to what is next because it's seen as this huge opportunity. I'm certainly guilty of wondering what's on the shopping list. Are you thinking about that at all?
- [29:42]
Jason Hall
A little. I think the thing I'm thinking about more right now though is thinking about those operating businesses, more than half of them, their earnings declined from the prior year in 2024. A lot of retail, a lot of manufacturing, a lot of exposure to the economy that I think investors should remember. This isn't a recession proof business. It's very resilient because they're well run and they have that incredible, incredible balance sheet. But I'm really thinking about that. But I do think there's one interesting thing about that big pile of money. It's call it $350 billion that they could put to work just in cash right now. And that's not even including the debt that they could get access to. But just writing a check and the check not bouncing. There are 474 companies in the S&P 500 by market cap are small enough for Berkshire to write a check for today.
- [30:27]
Dylan Lewis
I mean, I mentioned Starbucks and Disney combined market caps smaller than $350 billion.
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Jason Hall
Oh, they could buy them both. Yeah, they could buy them both. But here's the thing. I don't think they would want to buy the problems those businesses are having. Right. That's the thing. I think the move that we're going to see is when there are things that the company can buy that are wonderful businesses that will compound and generate wonderful, wonderful cash flows. And the prices are reasonable. Berkshire hasn't bought any of its own stock in almost. It's been five quarters now. So I think that says a lot about where the capital allocators there see value and they don't see a tremendous amount. And they're happy to get their 4% yield and just keep waiting until the bigger fish are biting.
- [31:10]
Dylan Lewis
Do you think we'll see that dividend people have been wondering for a long time, has that cash pile has gone up?
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Jason Hall
All right, so look, here's the thing. Buffett is stepping down as CEO at the end of the year. He's not stepping down as chairman. And I believe he's going to stay chairman as long as he's alive. Unless he's incapacitated, I expect they're going to have to wheel him out. I really do. I think once he's just the chairman, that happens. Guess who decides about the dividend? The board, not the management. So I don't expect that that less cash efficient thing is going to happen as long as they've got the skilled capital allocators there that they do have in Ted and Todd and Abel is. We've seen how incredibly patient he is in deploying a lot of capital into the energy business. So go buy another stock if you want to dividend people.
- [31:57]
Dylan Lewis
I'm going to put you on the spot here. 350 billion in cash. They could go on one heck of a shopping spree. If you could snap your fingers and either create a large holding for Berkshire in a business that's publicly traded or just put Berkshire in a position where they can own that company outright, what business would it be?
- [32:14]
Jason Hall
I think an interesting fit that might fit under the purview and circle of confidence of these new larger capital allocators. Might be something like Adobe or Autodesk software. Recurring revenue, massive economic moats, very good margins, great operating cash flows, converting lots of free cash flow to feed that capital allocation engine. Let's think a little different. Maybe look at some big software companies.
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Dylan Lewis
I mean, Apple was one of the best performing Berkshire stocks for a long time. Maybe there should be a little bit more tech in the portfolio.
- [32:46]
Jason Hall
Jason, There you go.
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Dylan Lewis
Jason hall, thank you so much for joining me. And please, please warn the Berkshire board if you plan on attending any more annual meetings anytime soon.
- [32:56]
Jason Hall
I will to share one last quote here. And this is it, because this is something Buffett talks about and I think the board is thinking about that at the health and safety of their executives. If you're going to have your life progress in the general direction of the people you work with, you admire and who you become friends with. There are people that make you want to be better than you are and that you want to hang out with the people that are better than you are and that you feel are better than you are because you are going to go in the direction of the people that you are associated with.
- [33:29]
Dylan Lewis
Jason, you are better than me and you make me better. Thank you for joining me today.
- [33:33]
Jason Hall
Thanks, Dylan.
- [33:34]
Dylan Lewis
Coming up next, a couple other people who are better than me. We've got Tim Byers and Bill Mann back with the stocks on their radar this week. Stay right here. You're listening to Motley Fool Money A.
- [33:43]
Tim Byers
Golden bird that flies away a candle's fickle flame to think I held you.
- [33:48]
Jason Hall
Yesterday your love was just a game.
- [33:50]
Tim Byers
A golden bird that flies away a candlestick old flame.
- [33:54]
Bill Mann
To think I held you yesterday your.
- [33:56]
Dylan Lewis
Love was just a game you tell me that you love Eczema isn't always obvious, but it's real. And so is the relief from Ebglis. After an initial dosing phase of 16 weeks, about 4 in 10 people taking EBGLIS achieved itch relief and clear or almost clear skin. And most of those people maintain skin that's still more clear at one year with monthly dosing.
- [34:18]
Jason Hall
EBGLIS Lebricizumab, LBKZ, a 250mg 2ml injection, is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema, also called atopic dermatitis, that is not well controlled with prescription therapies used on the skin or topicals, or.
- [34:35]
Bill Mann
Who cannot use topical therapies.
- [34:36]
Jason Hall
EBGLIS can be used with or without topical corticosteroids. Don't use if you're allergic to Ebglis. Allergic reactions can occur that can be severe.
- [34:43]
Bill Mann
Eye problems can occur.
- [34:44]
Jason Hall
Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with Ebglis. Before starting Ebglis, tell your doctor if.
- [34:51]
Dylan Lewis
You have a parasitic infection searching for real relief. Ask your doctor about epglis and visit epglis.lily.com or call 1-800-lilyrx or 1-800-545-5979. As always, people on the program may have interests in the stocks they talk about, and the Motley fool may have formal recommendations for or against. So don't buy or sell anything based solely on what you hear. All personal finance content follows Motley editorial standards. Records is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure if you're listening to the podcast version of this week's radio show, check out our.
- [35:28]
Bill Mann
Show notes and Dylan I serve as the chief Investment Strategist of Motley Fool Asset Management, llc, an affiliate of the Motley Fool. While affiliated, MFAM is a separate and independently regulated entity. None of the investment decisions made at NFAM involve individuals from the Motley Fool's media or business operations. As you know, Dylan, all of Motley Fool Money Management operates independently in this way.
- [35:56]
Dylan Lewis
Those are our P's and Q's. I'm Dylan Lewis, joined again by Tim Byers and Bill Mann. And gentlemen, I talked Berkshire and the annual meeting with Jason hall in our last segment. He was on the ground at the annual meeting. You guys were following along at home. Buffett News, obviously. Huge. Bill, any reflections for you on the state of Berkshire?
- [36:16]
Bill Mann
I mean, he was kind of on the ground, right? Didn't he miss the actual.
- [36:20]
Tim Byers
Yes. Like, like this is, this is the own goal we've all been waiting for, right?
- [36:28]
Bill Mann
This was, this was the Great Pumpkin, Charlie Brown times a million.
- [36:32]
Dylan Lewis
Yes, I can, I can tell you a certainty that Jason will never leave a game in the fourth quarter with two minutes left for the rest of his life. But he was there for the vibes. He was there for the atmosphere.
- [36:42]
Tim Byers
He just wasn't there for the announcement.
- [36:44]
Bill Mann
You could sense it was coming and not just because of the realities of the actuarial table. I mean, Warren Buffett is 94 years of age and we sensed last year that he was slowing down. They did not get into the thing that people wanted to talk about the most though, as much as I thought, which was the 340ish billion dollar cash hoard that they have built up, a lot of which coming from their sale of Apple in this last year. I think that he is leaving that discussion to be the first set of decisions that Greg Abel will make when he steps into the chairman's role. It's a huge, huge obligation for him. But Berkshire has always described that cash as a weapon to be deployed during opportune times. And they don't see this time as being opportune for that. And I completely respect the fact that they are still leaving that on the table for future times when it's more ideal.
- [37:43]
Tim Byers
I think that decision about the cash is going to be over in 30 seconds that Greg is going to say, yeah, we're not, we're not paying a dividend and we're going to wait and we're going to wait until we get the right opportunity. Like there's a bunch of people that are thinking, okay, here we go, here comes the dividend. And I like, sorry, that it's not happening. That is my reckless prediction for this show. No chances that happening anytime soon.
- [38:11]
Dylan Lewis
So, Tim, you're saying meet the new boss, same as the old boss when it comes to capital allocation at Berkshire, 100%. All right, let's get over to stocks on our radar this week. Our man behind the glass, Dan Boyd, is going to hit you with a question. Bill, you're up first. What you looking at this week?
- [38:25]
Bill Mann
Mine is a little fruit company called Apple. Maybe you've heard of it. It is one of the largest companies in the. I don't know that people have really focused on the implications of the court finding with Spotify that is taking away potentially a pretty big, extremely profitable cash flow stream for Apple. It just doesn't seem like something that people have focused in on. You would love with the App Store if you are a shareholder of Apple, for that cash flow stream to be as high as possible because it literally comes with minimal effort from Apple. So I think that that's something that people are going to want to pay attention to in upcoming months.
- [39:13]
Dylan Lewis
All right, Dan, Bill is zooming in on the Apple tax, their commission over on the App Store. You got a question? You got a comment on Apple this week?
- [39:21]
F
I mean, what can I say about Apple, right? Like, oh, their stuff is too expensive. Oh, it's. It's just flash. It's no substance. None of that's. None of that matters. It's Apple, right? It's Apple. Like, is anybody selling Apple? I guess Berkshire did.
- [39:38]
Bill Mann
But come on, Dan, there's that. There's that one guy.
- [39:42]
Tim Byers
There's that one guy out in Omaha.
- [39:45]
Dylan Lewis
In what might be a radar stocks first. I think Dan just answered his own question right there.
- [39:50]
F
Yeah, I don't know. Maybe I should think about it more. But, you know, mean thinking and we don't go too far back.
- [39:56]
Dylan Lewis
Virtually unprecedented. So, Tim, I don't know what that means for your setup here. I don't know if you have a hard assignment or an easy one here in pitching Dan for your radar.
- [40:03]
Tim Byers
I assume nothing. I assume nothing here, but I do assume, except for one thing. I will assume, Dan, that you like saving money. Like, I think you prefer to have more money rather than less.
- [40:15]
F
Well, I don't have any Apple products here at home except for the ones that the fool has given me. So that I think that tracks. Yes.
- [40:21]
Tim Byers
Okay. So my radar stock here, Dylan, is ibotta. And it is literally for the statement, I bought a thing relatively recent IPO about 12 months ago. This is a cash redemptions Business, you have an app, you scan a receipt and on that receipt if there are offers. So say like you have bought some Ritz crackers and there is a dollar redemption on Ritz crackers, you get a dollar. Now there's a bunch of companies that do this. Here's why ibotta is different and better and interesting to me. They have huge, huge distribution deals. Let me give you two. The one is more recent than the other. Walmart's a big one from about a year ago, about three months ago, they just got instacart. So what this means is that if anybody is trying to win the shelf space war, and the shelf space war is a island digital right now, you're increasingly shopping on apps or shopping on the computer. It's ibotta that is creating the coupons there. It's good business and I think it's only going to get better.
- [41:26]
Dylan Lewis
Dan, a question or a comment about ibotta?
- [41:29]
F
Well, unfortunately, Tim stole my joke. I was gonna do an ibotta like, oh, I bought a bunch of stock today.
- [41:37]
Dylan Lewis
Hey, how you doing?
- [41:38]
F
But he stole that from me. So I'm just gonna point out what Tim did not mention that ibotta is actually a Denver. True. And so I'm going to chalk this up, Dylan, to flagrant homerism from Mr. Tim Byers.
- [41:54]
Dylan Lewis
Guilty as charged. Him.
- [41:55]
Tim Byers
Guilty as charged.
- [41:57]
Dylan Lewis
You know, I'll bring us full circle here for a second. Ibotta is an app and if I'm not mistaken, subject to the Apple tax and the commissions that come in via the app store. And so as Bill noted, if those go down, I have to think that that is good news for ibotta shareholders. Tim.
- [42:12]
Tim Byers
Hey, I mean from. From your mouth to God's ears. And ibotta bank account.
- [42:18]
Dylan Lewis
Dan, which one's going on your watch list this week?
- [42:21]
F
I. You know what? I. I'm just gonna go ibotta because I wanna.
- [42:26]
Dylan Lewis
It's fun to say and really that's all that matters. Dan, appreciate you weighing in, Bill. Tim, appreciate you guys bringing your radar stocks. That is gonna do it for this week's Smiley for Money radio show. Show's booked by Dan Boyd. I'm Dylan Lewis. Thanks for listening. We'll see you next time.
- [42:42]
Bill Mann
Sam.