Latest news with #EmilyFlippen
Globe and Mail
16-04-2025
- Business
- Globe and Mail
Tariffs, Trump, and Turmoil
In this podcast, Motley Fool analysts talk about economic uncertainty, airlines, building materials, and assorted spirits. Motley Fool analyst Asit Sharma caught up with Martín de los Santos, the CFO of MercadoLibre, at The Motley Fool's Market Volatility Summit. They talked about how MercadoLibre became resilient, and the long-term opportunities for the company. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. A full transcript is below. Should you invest $1,000 in MercadoLibre right now? Before you buy stock in MercadoLibre, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and MercadoLibre wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $526,499!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $687,684!* Now, it's worth noting Stock Advisor 's total average return is818% — a market-crushing outperformance compared to156%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of April 14, 2025 This video was recorded on April 11, 2025 Ron Gross: T is for tariffs, Trump and Turmoil. Motley Fool money starts now. From fool Global headquarters. This is Motley Fool Money. It's the Motley Fool Money Radio Show. I'm Ron Gross sitting in for Dylan Lewis. Joining me today, our senior analyst, Emily Flippen and Matt Argersinger fools, how you doing? Matt Argersinger: Ron. Emily Flippen: Doing all right. Matt Argersinger: Doing all right. Ron Gross: Glad to hear it. Today, we're going to talk banks and assorted spirits, but we must, once again, begin with the big macro and, oh, boy, what a week it has been following several very rough days in the stock market, on Wednesday, the Trump administration put a 90-day pause on its so-called reciprocal tariff policy, sending the market soaring for its biggest one day gain since 2008. Then, on Thursday, inflation data came in tamer than expected and just for good measure, on Thursday, we saw another sell-off in stocks. Emily, I am truly exhausted. But let's dig in. Where are we now from an economic markets perspective? I know you don't have a crystal ball, but where do you think we're going? Emily Flippen: If financial media has anything to say about it, it's straight to hell on a handbasket here for American consumers and investors. I'm teasing here because I really don't necessarily think that is going to be the case. While we still have a lot of economic data that is not coming out as favorably as I think some investors want, and that's leading to some of that volatility we're seeing in the market, the earlier inflation metrics that we got earlier this week, we're actually very encouraging. It was a sign that some of the concerns that I think we had around stagflation may be coming down a bit. Now, that is the core PPI, the producer price index that excludes food and energy, but it's the Fed's favored inflation metric here. That actually fell nominally month over month. And it wasn't just a matter of, Okay, this is lower than expected, but still rising inflation, but an actual month-over-month decline here. Of course, if we add food and energy, the story changes. But this is a little bit of a silver lining that I think investors need to say, OK, we have a lot of data that's pointing in the wrong direction right now. Here is something that continues to say, it may not be as bad as we expect. But of course, the emphasis is, of course, on this was the case. Inflation metrics are a lagging indicator. We're always forward-looking. Some of the policies that we've seen since this data has come out over the course of the past month, I think, are pretty clearly indicating that inflation is expected to heat up substantially. But I'll take this when for this week. Ron Gross: What about from the markets? Do you think the markets are just nervous, don't like uncertainty? That's what we typically say. Markets hate uncertainty, and there's so much uncertainty around here nowadays. Do you think that's why we're seeing the volatile the big sharp moves? Emily Flippen: I don't think it's just uncertainty. I think there's genuine concern about the business impacts that these tariffs, if they stay in place, will have both on companies that are supplying, manufacturing, as well as consumers looking to make purchases. This has wide-ranging implications for the performance of the broader economy as a whole. It's not just a matter of uncertainty because I think if we came out tomorrow and said, Okay, we are certain, 100% sure. The tariffs, as they are today, are going to stick this way for the next 12 months for certain, for example. That would be certainty. But I'll tell you what, I bet the stock market would sell off. Ron Gross: Oh. Understood. Matt, US consumer sentiment is now worse than during the Great Recession. New data just came out. Anything here for an individual investor to do other than sit back and just watch it unfold? Matt Argersinger: Sitting back is very good advice. Watching it unfold, I don't know. You're better off just turning everything off and maybe going away for a week. But look, we're investors. I know that's impossible. It's definitely impossible for me. But here's what I think if you're an investor, what you can or should pay attention to, and that is interest rates. The Trump administration only really blinked this past week when the 10 yield crossed about 4.5%. But guess where we are today as we tape on Friday, back above 4.5%, Ron. If you go back to April 2nd, which was Liberation Day, as the administration called it, the 10-year was just above 4%. We're up 50 basis points in a week, and that's through all this market dislocation. It usually doesn't work that way. Usually, investors are buying treasuries as a safe haven during times like this. That's just not happening right now and I think that is where the real danger lies, and I think Emily hinted at this. I mean, if countries like China and, Japan UK, various members of the EU stop buying our treasuries, either because they're exporting less as a result of these tariffs, and they don't have as many US dollars to invest anyway, or much worse, guys, they willfully decide to stop buying treasuries in favor of other safe-haven assets or currencies. I mean, just look at the Swiss franc as of the past week. If that happens, it will almost certainly send treasury yields much higher. And I think that would spell huge trouble for the housing market, which we already know is suffering from high mortgage rates. Imagine mortgage rates not at six or 7% as they are now, but 8, 9, 10%. I think it also spells big trouble for small, midsize businesses who don't have as much flexibility with their balance sheets and where they source their products. It's bad for auto manufacturers, bad for commercial real estate and then to consumers to Emily's point. Consumers are sitting on record credit card debt and if interest rates move higher that situation gets a lot worse. I think it really could mean bad news for the economy. If you're going to watch anything at all, sit back and watch this shake out, watch treasury yields. If they keep moving higher, I expect that could trigger a response by the administration. To be less aggressive with these tariffs, maybe come to the table, that'll be the trigger point. Ron Gross: I was going to say one silver lining may be we do have anecdotal evidence that the administration does keep an eye on the bond market, and on interest rates, that could very well be the reason we got the 90 day pause. We don't necessarily have proof of that, but that certainly could be. I would encourage them to keep an eye on the yields, so we don't get into too much trouble, as you outlined. But speaking of interest rates, on Friday, many of the larger banks reported pretty solid results for the first quarter, and Matt, lots of data, plenty of commentary from the CEOs. What's set out to you in these reports? Matt Argersinger: Results you said, Ron, the results were actually really solid. The problem is no one really cares about that right now. It's really all about guidance and how these CEOs are thinking about the environment, post tariffs, post-liberation Day and what they see going forward. Here's what they're saying. If you look at CEO Jamie Diamond, CEO of the largest US bank, JP Morgan, he's been pretty vocal this past week about the dangers of tariffs, even saying he believes that a recession is all but unavoidable now. And then he said this after his bank reported quarter results, "The economy is facing considerable turbulence, potential negatives of tariffs and trade wars," ongoing sticking inflation, high fiscal deficits, and still rather high asset prices and volatilities. What else he said? Wells Fargo 's CEO, Charlie Sharf, "We support the administration's willingness to look at barriers to fair trade to the United States. Though there are certainly risks associated with such significant actions, a timely resolution, which benefits the US, would be good for businesses, consumers, and the markets. We expect continued volatility and uncertainty and are prepared for a slower economic environment in 2025" Then Larry Fink, CEO of Blackrock, which I think is now the world's largest ass manager, "The sweeping tariff announcements went further than I could have imagined in my 49 years in finance." Then in an interview on CNBC, he also said, "I think we're very close if not in a recession now," talking about, of course, the US economy. Ron Gross: Thanks for cheering us up, Matt. Matt Argersinger: Well, there you go. Let me sum it up, too. These tarifs are dangerous. If not resolved quickly, the risks are high, expect continued uncertainty, which we keep talking about, and we may already be in a recession. Remember, these are the banks and financial institutions that have a pulse, I think, in a lot of areas of the economy, which is from housing to credit, consumer spending. Wait until we start hearing from industrial companies or consumer discretionary companies, especially those that make and sell products all around the world. What will be their reactions and guidance when they report in the coming weeks? I think this is just the first Salvo, and it's sobering when you look at it, in terms of what they're seeing. Ron Gross: On Wednesday, Constellation Brands reported fourth-quarter results that beat expectations, but a week full-year earnings outlook that focused on the impact of, yes, tariffs was the focus. Emily, how did the quarter look to you? Is it possible for us to remove tariffs from this conversation and focus on the business, or they are so intertwined, just can't do that. Emily Flippen: I actually think that tariffs are maybe the least interesting thing happening to Constellation Brands business today. I understand why the narrative was around tariffs. It's like you can open up an Internet browser without being slapped across the face with news about tariffs and how they're going to be impacting companies. Certainly, Constellation Brands did say in the quarter that they're expecting a low single-digit increase in their total cost of goods that's associated with the tariffs and sourcing, of course, aluminum cans and other bottling items for the beers and the accessories, I'll say, for the wine and spirits business that they sell. But all of this stuff is happening to Constellation Brands. Meanwhile, Constellation Brands as a business itself, is actually doing a pretty decent job of a turnaround, especially considering the overall beer market. I think it's a disappointment that there's not more discussion around how strong this business has been in an incredibly weak environment for alcohol sales. If you compare their performance against other large beer makers, Boston Beer, with Sam Adams being a great example, which has seen declining depletions, declining shipments, declining profitability and sales, Constellation Brands is growing and growing pretty solidly because the beer brands that it is continuing to focus on just have continued to resonate with a consumer that's a little bit more niche, that is a bit more loyal, and that has led to pretty incredible market share gains really consistently for this company in otherwise weak environment. I love that Constellation Brands has performed so well. I'm disappointed that the narrative is, Oh, no, that small single-digit increase associated with the tariffs. But I actually think fast forwarding five years from now, we're probably looking at a better business than today. Ron Gross: They're selling some of their wine brands, Cooks, Miomi, that a good movie? You like that? Emily Flippen: I do. They're actually almost entirely divesting of their wine and spirits business. And if you look at their performance on earnings per share, non-adjusted basis for the quarter, you'll see the impact of that nearly $3 billion in goodwill write-offs associated with the sale of that business, which has been an underperformer for them for a while. That is obviously a ding on them. Some of the investments this company has made historically just haven't panned out. But they're really focusing on cost energies right now and focusing on what works, which is obviously the Corona, the Medello, the Pacificos. Those have an audience that are way more loyal than not to be offensive to Miomi, which I love their wine is a bit more loyal. Ron Gross: Coming up, we'll talk airlines, building materials, and used cars. You're listening to Motley Fool Money. ... Ron Gross: Welcome back to Motley Fool Money. I'm Ron Gross here with Emily Flippen and Matt Argersinger. On Wednesday, Delta reported that revenue growth stalled a bit in the first quarter and the company did not reaffirm its full year guidance, citing headwinds from the economic uncertainty around global trade. Matt, seems to me it wasn't the quarterly results, but the lack of full year guidance that spooked investors. Shares were up big on Wednesday as Trump paused tariffs, but the stock got smacked on Thursday as investors continued to digest what it all means. As I asked Emily with constellation, I'd love to strip out the economic noise here and talk about the business. Can we do that? Matt Argersinger: Well, let's try, Ron. It was actually a record quarter for Delta in terms of revenue. Pretty surprising, revenue was up 3.3% year over year, 13 billion, and growth was particularly strong in the premium segment of the business. So first class, business class, revenue there was up 7% year over year. International revenue was also pretty strong, and even corporate revenue was higher year over year, and Delta generated 1.3 billion in free cash flow in the quarter, paid down about 500 million in long term debt. All fairly positive and aligned with what CEO Ed Bastian said near the beginning of the year, which was that 2025 was going to be Delta's best financial year in our history. That is not really working out. Ron Gross: Maybe not so much. Matt Argersinger: Because even if you go back a month ago, Delta had actually guided for 6-8% revenue growth this quarter. That's a big comedown from that. According to Bastion, things actually started to slow back in February. Well, before these tariff announcements or any hint of them, the company slashed its first quarter forecast. It did maintain its full year outlook back then, though. As you mentioned, Ron, that has now changed. They're not reaffirming that year outlook anymore. The company has pulled its guidance. It's still expecting to be profitable this year, but a far cry from where the company thought things would be coming into the year. I think you have to worry a lot about the state of the consumer here. What travel demand is going to look like, say, over the next 6-9 months, you mentioned the consumer sentiment numbers at the top of the show. One thing that's got to be helping Delta a little bit, though, over the past week is the fall in energy prices that we've seen. It's a big cost input for every airline including Delta. That will undoubtedly help Delta's margins and probably help the company remain profitable for the year if not growing. Ron Gross: On Thursday, CarMax reported worse than expected fourth quarter results, and while it said it was making progress toward its financial goals, it will remove the timelines associated with them due to the potential impact of broader macro factors. Emily, I know I sound like a broken record here, but the macro environment is hard to escape. Do your best. Tell me how CarMax's business is doing. Emily Flippen: I actually think the business is doing a lot better than people expect, especially, again, given the narrative right now. I understand that the market is in part selling off CarMax for a few different factors. Of course, one aspect of the tariff implication for CarMax and any other business that is operating in the auto parts industry is that the used car parts that it needs in order to fix and resell vehicles on its platform, those are likely to increase, and that's likely to hurt margins at least in that narrow perspective. There's also an element of, Okay, used car prices are likely to increase with the tariffs as well, and that could hurt demand for used cars. That could certainly pride some people out of market, and management was so uncertain of this environment that they did pull that guidance for vehicle sales, which is concerning to investors adding to the uncertainty. You can make the logical argument there for the interim of like, Okay, I understand what's happening here to CarMax. But I actually think that a little bit longer term, taking it one step further, we're likely to see similarly to what we saw during the pandemic that used car prices are likely to go up and that could price some people out of the market. But it's actually a boon for a lot of leaders in this space like CarMax, when the prices of used cars go up, especially in comparison to something like a new vehicle 'cause a new vehicles will also increase making used cars look relatively more attractive for consumers who can make a purchase plus higher cost means higher fees for CarMax. All of that is to say, I actually think they could make up some of the margin here, and the future may not be as negative for CarMax as some investors are pricing in today. Ron Gross: All things considered, does CarMax go on your radar or you still go away? Emily Flippen: If I had a radar stock this month that I thought was an attractive value that I could make a 22nd, 32nd pitch for it, CarMax would certainly be up there. Digging into it this morning and in preparation for our show here, it reminded me this is an incredibly strong, profitable company, market share leader with a lot of tailwinds if you're willing to hold and overlook some of the near term uncertainty. Ron Gross: Sounds good. On Tuesday, RPM International reported fiscal third quarter results that came in weaker than expected, and the maker of Deglo and Rustleum blamed unfavorable weather conditions and said that sales would be flat in the fourth quarter. Matt, RPM does a lot of business overseas, so it's got the trade situation plus the weather to contend with. How the quarter look to you, and does it tell us anything about industrial activity in general? Matt Argersinger: Well, lots of headwinds for RPM and lots of headwinds in general for industrial activity, even coming into this quarter and all the tariff news. Really two big challenges for them. They had record results last year in last year's fiscal third quarter, so comparisons are tough. But weather was a big problem in the quarter. If you don't know RPM, they serve primarily in the construction industry, and in much of the country, you had a fairly lengthy winter and then a lot of unusual storm activity in the south and the West, which really affected them. Slow housing market also continues to have an impact. That's been a story for a few years now. Until that picks up, RPM's consumer business is really going to struggle. Sales were down 3% overall. Pre tax operating profits, this is a business with high operating leverage we're down around 30%. With regard to tariffs, though, the good news for RPM is that they tend to be fairly insulated. For the most part, the company manufactures products in the countries or regions where it sells them. They do small amount of cross border activity. It sounds like a situation for RPM, where sales may be slightly down for the year with lower margins, but here is something, Ron, you and Emily can be excited about. RPM is acquiring the pink stuff. Ron Gross: The pink. Matt Argersinger: Which I'm sure, if you've ever done an industrial cleaning of a bathroom, you've definitely use or at least should use. So the pink stuff joins other cleaning products within RPM's portfolio, including Crud Cutter, Mean Green, and Contobum, if I'm pronouncing that correctly. That guy sounds like the 1927 Yankees when it comes to cleaning portfolio lineup. Ron Gross: I love it. Alright, fools. We'll see you a little bit later in the show. Up next, an interview with Martin de los Santos. He's the CFO of Mercado Libre, E-commerce giant and the largest company in Latin America. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Ron Gross. Molly Fool senior analyst Asit Sharma caught up with Martin de los Santos, the CFO of Mercado Libre, a few weeks ago at our Market Volatility Summit. In this clip, you'll hear how Mercado Libre became resilient in the long term opportunities for Meli. Motley Fool members can access the full interview and replays from the event at Asit Sharma: Martin, I wanted to start. Just looking at this company in general, Mercado Libre has such a history of dealing with formidable challenges from hyperinflation and geopolitical events within Latin America to providing fintech and lending services to populations that often are new to the banking and credit systems. What makes Mercado Libre such a resilient business? Martin de los Santos: Yes, we were founded back in '99, and we turned 25 years in 2024. With those 25 years, as you can imagine, in Latin America, operating in 19 different countries, we've seen it all. Things going sour very rapidly. Maybe Mezuela as an example, hyperinflation in Argentina, then things coming back as we are seeing it today, Brazil, Mexico. I think we went through a lot during those years. I would highlight a couple of things. First, we operate in commerce and Fintech in a region where there's a lot to be done in those two fronts. Production of commerce continues to be very low compared to other places. We are riding a secular trend of people moving online. The same with Fintech, I think the banks have done a really poor job of including financially, most of the population in Latin America, so that generates an opportunity for us. That's one thing. I will also highlight the culture of the company. Our CEO, our chairman continues to be Marcos Galbrin, who was the founder of the company. Not only him, a lot of people were with him at the beginning continues to be with the company. We have a very strong culture of entrepreneurship, willingness to take risks. Many times in the history of our company, we have to reinvent ourselves or take big bets, and that's a big part of our success, a culture of excellence, execution, bringing good talent, teamwork internally while competing because we operating in very competitive markets to the outside. I think I would say that we operate in a region that has tremendous opportunities, both commerce and Fintech, and we also have a culture of executing and operating in Latin America that has helped us to be resilient and to be successful in this. Latin America, we came from being a start-up of five people in the garage 25 years ago to last year we became the most valuable company in Latin America, and we have done that I think by culture and execution and the quality of people that we brought into our team. Asit Sharma: I liked one thing that you mentioned between the culture and the execution, which is the ability to take a risk, to take those big bets. How are things different now that you sit in the chair of a CFO to make sure that the bets have a commensurate payoff for the risk and also maybe in some cases to be the person who's encouraging the company to take those risks? Martin de los Santos: It's not only my role. I think it's the role of the senior management team. We keep on thinking about the trade off between growth and profitability. In fact, we have a name for that within Meli we call it grow fit because we operating many different verticals have tremendous growth opportunities, but at the same time, they require investments. If you look at the history of the past five, six years, we improve significantly the profitability of our business. While at the same time, we continue to deliver very high growth in both in commerce, Fintech, advertising at the different verticals. However, when we look forward, we don't shy away from investing, even if in the short term, that might put some pressure on margins because the main thing for us is to make sure that we do capture those opportunities that we had ahead of us and not necessarily to maximize short term profits. We do have a long term perspective on the business, but that's a trade off that we do it all the time, deciding where to invest and sacrifice a little bit of margins to capture opportunities in the future, and the whole company and the whole senior management team is thinking in those terms. Then it does risk taking, I think it's the nature of our business. You mentioned I used to run the credit business, which we started back in 2017. That's probably the ultimate one that you need to manage and to deal with risk, and we're very cautious in the way we manage that risk. But in other cases in the history of our company, maybe 15 years ago, we took a big bet on adapting our platform to mobile, and that required lot of risk and a mindset of really changing the way we were doing things. If we didn't do that, we wouldn't have a company today. Ten years ago, we started with logistics, which is critical for e-commerce solution. If you think about it ten years ago, we didn't touch one single package. Today, last year, we have 1.8 billion packages delivered through our own fulfillment infrastructure or logistic infrastructure. I think those type of beds that when you need to do when you need to take risk and make sure that you invest behind the long term growth opportunities, that's what differentiates mainly from other companies that might not be willing to take those risks. Asit Sharma: I wanted to ask you about some overall metrics that you use as you look at the business. I used to work for a company where while we had so many drill down metrics, the owner would come in every day, and he said, I just need one number to run this business. Now, that wasn't true. You need more than one number to run a business. But it taught me something that people like yourself often Kean on a few metrics almost on a daily basis. How do you gauge the health of Mercado Libre from day to day? Martin de los Santos: Yeah, we are a very data oriented company. Business reviews that are so deep in terms of analysis and data that is true. It's hard to keep up with all the businesses. It's very complex Mercado Libre today. So it's important to have some, big picture views, and then you can drill down whenever you see something that we want to go into more detail. Many different businesses, 19 different countries. You can imagine that the metrics are hundreds. But I would say that obviously, top line metric GMB on our commerce business is very important. Users, last year, I mentioned we have 100 million users, or 100 million buyers on our commerce platform. In terms of engagement, transactions per user is a metric that we follow very closely. That's on the commerce side. On the Fintech side, obviously number of users, 61 million monthly active users last quarter. TPV for the acquiring business, then credit book, asset and the mansion that has been growing more than 100% year and years, is a metric that is very important to see engagement with our platform and then frequency of use. In Fintech is very important to have principality. We're seeing people who have engaged with more than one product and how often they engage with different products. That's something that we pay a lot of attention. Then the credit business, obviously, the traditional metrics, MPLs, the spreads of our books, the different books, and so on the repayment of our credit card, for instance, which is a product that you need to invest to build a cohort, I would say those. Obviously, financial metrics at the end of the quarter, at the end of each month are very important to see top line growth, as well as profit margins are the two ones, the two metrics that tells us how we are doing in terms of growth feed rate profitability, as well as growth. Asit Sharma: Strategically, where you sit, where are you focusing the organization to create the most value when we look out over a very long time horizon? Is there a specific activity or investment that's going to create the greatest yield as we look beyond, say, the medium term that you like to talk about within the management team and encourage employees to think about? Martin de los Santos: Very important to have an owner's mentality team. We operate. We are fortunate to operate in a platform in a company. That has, as we like to say, has more doors to be open, that has to open them. We have opportunities everywhere we see. In commerce, we're just getting started. Penetration is very low. We continue to grow at a very rapid pace north of 30% year and year, twice the speed of the market, so we're continuing to gain market share. Even after 25 years, we're growing at start-up rates. On Fintech in Mexico, less than half the population have a bank account. Less than 15% have a credit card. The opportunity is immense as well to continue growing. Advertising, we mentioned it before, everywhere you look at mainly there are opportunities. We are fortunate to have a lot of resources to take on those opportunities. 18,000 developers, a very well, very strong balance sheet to invest. We generate lots of cash, even though we are investing in our business as well. I think the big challenge is when you don't have a clear constraint is how to make sure that you are investing in the right things. That represents not only choosing what to invest, but also choosing what not to do, not to get and also to make sure that you are investing on things that really have a good payout, and they actually result in growth going forward. That's something that continuously my team and my colleagues at the sea level are continuously looking at, at the end of the day is maintaining this growth feed mentality that we have been operating. We want to make sure that we hit the growth targets. While, not shying away from investing, even if in the short term, we might put some pressure on margins. We don't mind. We don't run the business on a quarter by quarter basis. We run the business for the next 25 years. Ron Gross: Coming up after the break, Emily Flippen and Matt Argersinger return with a couple of stocks on their radar. Stay right here. You're listening to Motley Fool Money. 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 r sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and are not approved by advertisers. The Motley Fool only picks products that it would personally recommend to friends like you. Welcome back to Motley Fool Money Ron Gross here with Emily Flippen and Matt Argersinger Fools, we've got time for two quick stories before we hit stocks on our radar. Let's start with the Walmart news on Wednesday, Walmart withdrew its earnings guidance, citing uncertainty surrounding the Trump administration's newly imposed tariffs specifically on China. Emily, the health of Walmart can tell us a lot about the health of the consumer and, frankly, the economy as a whole. What did you take away from these actions by Walmart management? Emily Flippen: Unfortunately, my takeaway is that things will likely get worse before they get better. The silver lining to this is that Walmart did reaffirm its sales guidance. They actually are perceived to have a little bit more clarity into how consumers are behaving versus what their bottom line may look like, which is obviously heavily impacted by things like tariffs and any negotiations there. Not only does Walmart really act as that bellwether for how consumers are behaving, but it's also really easy to forget that Walmart's a little bit of a bellwether and a leader for other businesses that look to Walmart for guidance. So many companies are likely watching Walmart's decision here to pull back guidance on their bottom line, and they could potentially adopt a very similar wait-and-see approach here as it applies to their own guidance. And that can almost turn into a self-fulfilling prophecy of economic slowing and leading to a market sell-off all because of the cautiousness around things like earnings guidance. Now, I think that could be a dramatic interpretation, of course, and I'll just quickly mention that Walmart does have much more complex supply lines than a lot of other small businesses. Their certainty and clarity there could be more opaque than other companies. But the fact that they are a bellwether for both consumers, which we focus on, as well as other businesses is a bit of a red flag. Ron Gross: The new Superman movie is scheduled to hit theaters this July. As listeners know, I am a Superman fanatic, really looking forward to it. Admittedly, the movies haven't always been so super, but there is a new sneak peek out there. I know you have both seen it, so I'm curious to ask. Do we have a hit on our hands or a dud? Did you have a favorite part of the sneak peek? I'll go to you first Matt. Matt Argersinger: Well, how can you not love Krypto coming in there, Krypto the super dog, coming in to rescue Superman from whatever ails him in that particular scene. But no, look, I think it looks awesome. I think Gunn did a fantastic job with the Guardians of Galaxy movies. I like that he's bringing a lot of interesting characters into the Superman movie, including looks like Hawk Man's in there. Looks like Guy Gardner, the Green Lantern characters in there. I'm excited. I'm going to go see it with my son, for sure. Emily, a hit or a dud? Emily Flippen: Well, let's put it this way. You're barking up the wrong tree, because I am not a superhero movie watcher. But I will say this. I watched the trailer at your bequest, and I didn't know the creepy CGI dog had a name. Nice to know. Matt Argersinger: You don't know Krypto? A creepy CGI dog. Emily Flippen: There's a lot of CGI in that trailer. CGI has come a long way. I don't know what I'm talking about, as it applies to CGI. I will say, it was obviously CGI, though. I do think it's a little bit of a red flag if you're having to bring in other superheroes to attract excitement. What does that say about Superman? Ron Gross: Well, I am hopeful, and my favorite part is when the Fortress of solitude rises out of the snow as Superman gets closer, almost like it could sense where he was. I love that part. Very cool. Alright, Fools, a quick personal note before we hit stocks on our radar. This will be my last Motley Fool Money radio show. It has been the joy of my career to play a small part in the financial journey of as Chris Hill would say, our dozens of listeners. Thank you for letting me share my thoughts with you for 16 wonderful years. Thank you all very much. I really appreciate it. Matt Argersinger: Ron, can I just say? Ron Gross: Yes, Matt. Matt Argersinger: Sixteen years, actually, 17 years with the Motley Fool. You've been a colleague, a mentor, a leader, most of all, a friend. I wish you the very best in retirement, and we will do our very best. It will be a lot harder now, but we will do our very best to keep this show firing on all cylinders. Ron Gross: [laughs] I appreciate that. Thanks, Martin. Very nice. Fools, we have time for a couple of stocks on our radar, so let's close out the show that way, and I will bring in our man Dan Boyd, to ask a question and pick his favorite. Emily, you're up first. What have you got? Emily Flippen: I'm looking at Dexcom this week. It's nice to have a little bit of positive news in a world that is changing around us so rapidly. Some of the excitement here for Dexcom did get drowned out by tariff talk. But Dexcom did see a little bit of a revival this week because they did get FDA approval for their newest continuous glucose monitor that is a Dexcom G7. It could be worn for up to 15 days so that extending the life versus their previous model, it puts them in more direct competition with Abbott, who is one of their competitors, which also has the FreeStyle Libre, which can be worn up to 15 days. Ahead of Metronic. I definitely move in the right direction here for Dexcom. CGM penetration for diabetics worldwide is still so much lower than what it should be, considering the health benefits that it can bring. I will say, though, I always have in the back of my head, just the fear around a couple of things. One is weight loss drugs, leading to a decline in type 2 diabetes that could eat up some of the market here for Dexcom, as well as actually a potential cure for something like diabetes. That's further down the line, but a lot of research and time is being spent into it, considering it is such a deadly and expensive disease. Ron Gross: Dan, you got a question or a comment? Dan Boyd: Dexcom it's one of these companies that the name doesn't really match up with what they do. The name, to me, is, like, something out of Superman, very sinister. But what they do very good for society. I don't know what to do here, Emily. Emily Flippen: That's a good point. I will say Abbott sharing its name with Abbott Elementary. Sounds like the friendlier of the options, but I like Dexcom more, despite the name. Ron Gross: Matt, you're up. What have you got? Matt Argersinger: Ron, I'm looking at RobinHood Markets. Ticker H-O-O-D. This is an unusual one for me. I just want to stress, this is a true radar stock, a company I'm just beginning to take a look at. But I heard a great interview with Robin Hood ' s chief brokerage officer last week. If you look at where young people, I'm talking mainly Emily's age, where they're going to open up brokerage accounts. It's not Fidelity. It's not Charles Schwab. It's certainly not Interactive Brokers where I tend to toil. It's Robin Hood. Nearly 26 million funded customers, many, I think most of which are in their 20s and 30s. When that large cohort of investors matures, starts opening retirement accounts, trust accounts, getting mortgages, doing more sophisticated trading. I think Robin Hood is really growing its offerings to like, a whole range of financial services. They also have the Robin Hood Gold membership, which is approaching three million accounts. It offers members higher levels of market data, greater margin access, could be dangerous, and then higher interest on cash and accounts. I have to say, I'm a shareholder in Schwab and I will probably be a shareholder in Schwab for a long time. But if I'm going to make a long term bet on a brokerage company, I might also want to have exposure to a brokerage company that has the most young people coming to it because it's likely to prosper right alongside that growth over time. Ron Gross: Dan, got a question? Dan Boyd: Yeah, when I hear Robin Hood, I associate it with meme stocks like GameStop and AMC and all that jazz. Is this a company that actually has legs, or is it just something that's going to be a flash in the pan? Matt Argersinger: Dan, I thought the same thing. It's the meme stock brokerage. But the fact that they have 26 million funded customers, and that has continued growing way past the GameStop and AMC stuff that we saw several years ago, that gives you confidence that has long term staying power. Ron Gross: I, too, am a Charles Schwab shareholder, not a Robin Hood one, but I'll take a look. Could be interesting. Dan, you got a favorite fear watch list? Dan Boyd: Well, it really seems like Dexcom is, like, the smart choice, but Robin Hood, I feel like is the more interesting choice. Can I do both on your last day, Ron? Ron Gross: You can do whatever you want, Dan. Both it is. Dan Boyd: That's awesome. Ron Gross: Emily Flippen and Matt Argersinger, thanks for being here, my friends. That's going to do it for this week's Motley Fool Money. Our tremendous engineer is Dan Boyd. I am Ron Gross. Thanks for listening. The Motley Fool Money Radio Show, we'll see you next week. JPMorgan Chase is an advertising partner of Motley Fool Money. Charles Schwab is an advertising partner of Motley Fool Money. Wells Fargo is an advertising partner of Motley Fool Money. Asit Sharma has no position in any of the stocks mentioned. Dan Boyd has no position in any of the stocks mentioned. Emily Flippen, CFA has positions in Constellation Brands and MercadoLibre. Matthew Argersinger has positions in Boston Beer, Charles Schwab, MercadoLibre, and RPM International and has the following options: short May 2025 $45 puts on Delta Air Lines. Ron Gross has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boston Beer, CarMax, Interactive Brokers Group, JPMorgan Chase, MercadoLibre, and Walmart. The Motley Fool recommends Charles Schwab, Constellation Brands, Delta Air Lines, DexCom, and RPM International and recommends the following options: long January 2027 $65 calls on DexCom, short January 2027 $75 calls on DexCom, and short June 2025 $85 calls on Charles Schwab. The Motley Fool has a disclosure policy.
Yahoo
16-04-2025
- Business
- Yahoo
Tariffs, Trump, and Turmoil
In this podcast, Motley Fool analysts talk about economic uncertainty, airlines, building materials, and assorted spirits. Motley Fool analyst Asit Sharma caught up with Martín de los Santos, the CFO of MercadoLibre, at The Motley Fool's Market Volatility Summit. They talked about how MercadoLibre became resilient, and the long-term opportunities for the company. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. A full transcript is below. Before you buy stock in MercadoLibre, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and MercadoLibre wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $526,499!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $687,684!* Now, it's worth noting Stock Advisor's total average return is 818% — a market-crushing outperformance compared to 156% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 14, 2025 This video was recorded on April 11, 2025 Ron Gross: T is for tariffs, Trump and Turmoil. Motley Fool money starts now. From fool Global headquarters. This is Motley Fool Money. It's the Motley Fool Money Radio Show. I'm Ron Gross sitting in for Dylan Lewis. Joining me today, our senior analyst, Emily Flippen and Matt Argersinger fools, how you doing? Matt Argersinger: Ron. Emily Flippen: Doing all right. Matt Argersinger: Doing all right. Ron Gross: Glad to hear it. Today, we're going to talk banks and assorted spirits, but we must, once again, begin with the big macro and, oh, boy, what a week it has been following several very rough days in the stock market, on Wednesday, the Trump administration put a 90-day pause on its so-called reciprocal tariff policy, sending the market soaring for its biggest one day gain since 2008. Then, on Thursday, inflation data came in tamer than expected and just for good measure, on Thursday, we saw another sell-off in stocks. Emily, I am truly exhausted. But let's dig in. Where are we now from an economic markets perspective? I know you don't have a crystal ball, but where do you think we're going? Emily Flippen: If financial media has anything to say about it, it's straight to hell on a handbasket here for American consumers and investors. I'm teasing here because I really don't necessarily think that is going to be the case. While we still have a lot of economic data that is not coming out as favorably as I think some investors want, and that's leading to some of that volatility we're seeing in the market, the earlier inflation metrics that we got earlier this week, we're actually very encouraging. It was a sign that some of the concerns that I think we had around stagflation may be coming down a bit. Now, that is the core PPI, the producer price index that excludes food and energy, but it's the Fed's favored inflation metric here. That actually fell nominally month over month. And it wasn't just a matter of, Okay, this is lower than expected, but still rising inflation, but an actual month-over-month decline here. Of course, if we add food and energy, the story changes. But this is a little bit of a silver lining that I think investors need to say, OK, we have a lot of data that's pointing in the wrong direction right now. Here is something that continues to say, it may not be as bad as we expect. But of course, the emphasis is, of course, on this was the case. Inflation metrics are a lagging indicator. We're always forward-looking. Some of the policies that we've seen since this data has come out over the course of the past month, I think, are pretty clearly indicating that inflation is expected to heat up substantially. But I'll take this when for this week. Ron Gross: What about from the markets? Do you think the markets are just nervous, don't like uncertainty? That's what we typically say. Markets hate uncertainty, and there's so much uncertainty around here nowadays. Do you think that's why we're seeing the volatile the big sharp moves? Emily Flippen: I don't think it's just uncertainty. I think there's genuine concern about the business impacts that these tariffs, if they stay in place, will have both on companies that are supplying, manufacturing, as well as consumers looking to make purchases. This has wide-ranging implications for the performance of the broader economy as a whole. It's not just a matter of uncertainty because I think if we came out tomorrow and said, Okay, we are certain, 100% sure. The tariffs, as they are today, are going to stick this way for the next 12 months for certain, for example. That would be certainty. But I'll tell you what, I bet the stock market would sell off. Ron Gross: Oh. Understood. Matt, US consumer sentiment is now worse than during the Great Recession. New data just came out. Anything here for an individual investor to do other than sit back and just watch it unfold? Matt Argersinger: Sitting back is very good advice. Watching it unfold, I don't know. You're better off just turning everything off and maybe going away for a week. But look, we're investors. I know that's impossible. It's definitely impossible for me. But here's what I think if you're an investor, what you can or should pay attention to, and that is interest rates. The Trump administration only really blinked this past week when the 10 yield crossed about 4.5%. But guess where we are today as we tape on Friday, back above 4.5%, Ron. If you go back to April 2nd, which was Liberation Day, as the administration called it, the 10-year was just above 4%. We're up 50 basis points in a week, and that's through all this market dislocation. It usually doesn't work that way. Usually, investors are buying treasuries as a safe haven during times like this. That's just not happening right now and I think that is where the real danger lies, and I think Emily hinted at this. I mean, if countries like China and, Japan UK, various members of the EU stop buying our treasuries, either because they're exporting less as a result of these tariffs, and they don't have as many US dollars to invest anyway, or much worse, guys, they willfully decide to stop buying treasuries in favor of other safe-haven assets or currencies. I mean, just look at the Swiss franc as of the past week. If that happens, it will almost certainly send treasury yields much higher. And I think that would spell huge trouble for the housing market, which we already know is suffering from high mortgage rates. Imagine mortgage rates not at six or 7% as they are now, but 8, 9, 10%. I think it also spells big trouble for small, midsize businesses who don't have as much flexibility with their balance sheets and where they source their products. It's bad for auto manufacturers, bad for commercial real estate and then to consumers to Emily's point. Consumers are sitting on record credit card debt and if interest rates move higher that situation gets a lot worse. I think it really could mean bad news for the economy. If you're going to watch anything at all, sit back and watch this shake out, watch treasury yields. If they keep moving higher, I expect that could trigger a response by the administration. To be less aggressive with these tariffs, maybe come to the table, that'll be the trigger point. Ron Gross: I was going to say one silver lining may be we do have anecdotal evidence that the administration does keep an eye on the bond market, and on interest rates, that could very well be the reason we got the 90 day pause. We don't necessarily have proof of that, but that certainly could be. I would encourage them to keep an eye on the yields, so we don't get into too much trouble, as you outlined. But speaking of interest rates, on Friday, many of the larger banks reported pretty solid results for the first quarter, and Matt, lots of data, plenty of commentary from the CEOs. What's set out to you in these reports? Matt Argersinger: Results you said, Ron, the results were actually really solid. The problem is no one really cares about that right now. It's really all about guidance and how these CEOs are thinking about the environment, post tariffs, post-liberation Day and what they see going forward. Here's what they're saying. If you look at CEO Jamie Diamond, CEO of the largest US bank, JP Morgan, he's been pretty vocal this past week about the dangers of tariffs, even saying he believes that a recession is all but unavoidable now. And then he said this after his bank reported quarter results, "The economy is facing considerable turbulence, potential negatives of tariffs and trade wars," ongoing sticking inflation, high fiscal deficits, and still rather high asset prices and volatilities. What else he said? Wells Fargo's CEO, Charlie Sharf, "We support the administration's willingness to look at barriers to fair trade to the United States. Though there are certainly risks associated with such significant actions, a timely resolution, which benefits the US, would be good for businesses, consumers, and the markets. We expect continued volatility and uncertainty and are prepared for a slower economic environment in 2025" Then Larry Fink, CEO of Blackrock, which I think is now the world's largest ass manager, "The sweeping tariff announcements went further than I could have imagined in my 49 years in finance." Then in an interview on CNBC, he also said, "I think we're very close if not in a recession now," talking about, of course, the US economy. Ron Gross: Thanks for cheering us up, Matt. Matt Argersinger: Well, there you go. Let me sum it up, too. These tarifs are dangerous. If not resolved quickly, the risks are high, expect continued uncertainty, which we keep talking about, and we may already be in a recession. Remember, these are the banks and financial institutions that have a pulse, I think, in a lot of areas of the economy, which is from housing to credit, consumer spending. Wait until we start hearing from industrial companies or consumer discretionary companies, especially those that make and sell products all around the world. What will be their reactions and guidance when they report in the coming weeks? I think this is just the first Salvo, and it's sobering when you look at it, in terms of what they're seeing. Ron Gross: On Wednesday, Constellation Brands reported fourth-quarter results that beat expectations, but a week full-year earnings outlook that focused on the impact of, yes, tariffs was the focus. Emily, how did the quarter look to you? Is it possible for us to remove tariffs from this conversation and focus on the business, or they are so intertwined, just can't do that. Emily Flippen: I actually think that tariffs are maybe the least interesting thing happening to Constellation Brands business today. I understand why the narrative was around tariffs. It's like you can open up an Internet browser without being slapped across the face with news about tariffs and how they're going to be impacting companies. Certainly, Constellation Brands did say in the quarter that they're expecting a low single-digit increase in their total cost of goods that's associated with the tariffs and sourcing, of course, aluminum cans and other bottling items for the beers and the accessories, I'll say, for the wine and spirits business that they sell. But all of this stuff is happening to Constellation Brands. Meanwhile, Constellation Brands as a business itself, is actually doing a pretty decent job of a turnaround, especially considering the overall beer market. I think it's a disappointment that there's not more discussion around how strong this business has been in an incredibly weak environment for alcohol sales. If you compare their performance against other large beer makers, Boston Beer, with Sam Adams being a great example, which has seen declining depletions, declining shipments, declining profitability and sales, Constellation Brands is growing and growing pretty solidly because the beer brands that it is continuing to focus on just have continued to resonate with a consumer that's a little bit more niche, that is a bit more loyal, and that has led to pretty incredible market share gains really consistently for this company in otherwise weak environment. I love that Constellation Brands has performed so well. I'm disappointed that the narrative is, Oh, no, that small single-digit increase associated with the tariffs. But I actually think fast forwarding five years from now, we're probably looking at a better business than today. Ron Gross: They're selling some of their wine brands, Cooks, Miomi, that a good movie? You like that? Emily Flippen: I do. They're actually almost entirely divesting of their wine and spirits business. And if you look at their performance on earnings per share, non-adjusted basis for the quarter, you'll see the impact of that nearly $3 billion in goodwill write-offs associated with the sale of that business, which has been an underperformer for them for a while. That is obviously a ding on them. Some of the investments this company has made historically just haven't panned out. But they're really focusing on cost energies right now and focusing on what works, which is obviously the Corona, the Medello, the Pacificos. Those have an audience that are way more loyal than not to be offensive to Miomi, which I love their wine is a bit more loyal. Ron Gross: Coming up, we'll talk airlines, building materials, and used cars. You're listening to Motley Fool Money. ... Ron Gross: Welcome back to Motley Fool Money. I'm Ron Gross here with Emily Flippen and Matt Argersinger. On Wednesday, Delta reported that revenue growth stalled a bit in the first quarter and the company did not reaffirm its full year guidance, citing headwinds from the economic uncertainty around global trade. Matt, seems to me it wasn't the quarterly results, but the lack of full year guidance that spooked investors. Shares were up big on Wednesday as Trump paused tariffs, but the stock got smacked on Thursday as investors continued to digest what it all means. As I asked Emily with constellation, I'd love to strip out the economic noise here and talk about the business. Can we do that? Matt Argersinger: Well, let's try, Ron. It was actually a record quarter for Delta in terms of revenue. Pretty surprising, revenue was up 3.3% year over year, 13 billion, and growth was particularly strong in the premium segment of the business. So first class, business class, revenue there was up 7% year over year. International revenue was also pretty strong, and even corporate revenue was higher year over year, and Delta generated 1.3 billion in free cash flow in the quarter, paid down about 500 million in long term debt. All fairly positive and aligned with what CEO Ed Bastian said near the beginning of the year, which was that 2025 was going to be Delta's best financial year in our history. That is not really working out. Ron Gross: Maybe not so much. Matt Argersinger: Because even if you go back a month ago, Delta had actually guided for 6-8% revenue growth this quarter. That's a big comedown from that. According to Bastion, things actually started to slow back in February. Well, before these tariff announcements or any hint of them, the company slashed its first quarter forecast. It did maintain its full year outlook back then, though. As you mentioned, Ron, that has now changed. They're not reaffirming that year outlook anymore. The company has pulled its guidance. It's still expecting to be profitable this year, but a far cry from where the company thought things would be coming into the year. I think you have to worry a lot about the state of the consumer here. What travel demand is going to look like, say, over the next 6-9 months, you mentioned the consumer sentiment numbers at the top of the show. One thing that's got to be helping Delta a little bit, though, over the past week is the fall in energy prices that we've seen. It's a big cost input for every airline including Delta. That will undoubtedly help Delta's margins and probably help the company remain profitable for the year if not growing. Ron Gross: On Thursday, CarMax reported worse than expected fourth quarter results, and while it said it was making progress toward its financial goals, it will remove the timelines associated with them due to the potential impact of broader macro factors. Emily, I know I sound like a broken record here, but the macro environment is hard to escape. Do your best. Tell me how CarMax's business is doing. Emily Flippen: I actually think the business is doing a lot better than people expect, especially, again, given the narrative right now. I understand that the market is in part selling off CarMax for a few different factors. Of course, one aspect of the tariff implication for CarMax and any other business that is operating in the auto parts industry is that the used car parts that it needs in order to fix and resell vehicles on its platform, those are likely to increase, and that's likely to hurt margins at least in that narrow perspective. There's also an element of, Okay, used car prices are likely to increase with the tariffs as well, and that could hurt demand for used cars. That could certainly pride some people out of market, and management was so uncertain of this environment that they did pull that guidance for vehicle sales, which is concerning to investors adding to the uncertainty. You can make the logical argument there for the interim of like, Okay, I understand what's happening here to CarMax. But I actually think that a little bit longer term, taking it one step further, we're likely to see similarly to what we saw during the pandemic that used car prices are likely to go up and that could price some people out of the market. But it's actually a boon for a lot of leaders in this space like CarMax, when the prices of used cars go up, especially in comparison to something like a new vehicle 'cause a new vehicles will also increase making used cars look relatively more attractive for consumers who can make a purchase plus higher cost means higher fees for CarMax. All of that is to say, I actually think they could make up some of the margin here, and the future may not be as negative for CarMax as some investors are pricing in today. Ron Gross: All things considered, does CarMax go on your radar or you still go away? Emily Flippen: If I had a radar stock this month that I thought was an attractive value that I could make a 22nd, 32nd pitch for it, CarMax would certainly be up there. Digging into it this morning and in preparation for our show here, it reminded me this is an incredibly strong, profitable company, market share leader with a lot of tailwinds if you're willing to hold and overlook some of the near term uncertainty. Ron Gross: Sounds good. On Tuesday, RPM International reported fiscal third quarter results that came in weaker than expected, and the maker of Deglo and Rustleum blamed unfavorable weather conditions and said that sales would be flat in the fourth quarter. Matt, RPM does a lot of business overseas, so it's got the trade situation plus the weather to contend with. How the quarter look to you, and does it tell us anything about industrial activity in general? Matt Argersinger: Well, lots of headwinds for RPM and lots of headwinds in general for industrial activity, even coming into this quarter and all the tariff news. Really two big challenges for them. They had record results last year in last year's fiscal third quarter, so comparisons are tough. But weather was a big problem in the quarter. If you don't know RPM, they serve primarily in the construction industry, and in much of the country, you had a fairly lengthy winter and then a lot of unusual storm activity in the south and the West, which really affected them. Slow housing market also continues to have an impact. That's been a story for a few years now. Until that picks up, RPM's consumer business is really going to struggle. Sales were down 3% overall. Pre tax operating profits, this is a business with high operating leverage we're down around 30%. With regard to tariffs, though, the good news for RPM is that they tend to be fairly insulated. For the most part, the company manufactures products in the countries or regions where it sells them. They do small amount of cross border activity. It sounds like a situation for RPM, where sales may be slightly down for the year with lower margins, but here is something, Ron, you and Emily can be excited about. RPM is acquiring the pink stuff. Ron Gross: The pink. Matt Argersinger: Which I'm sure, if you've ever done an industrial cleaning of a bathroom, you've definitely use or at least should use. So the pink stuff joins other cleaning products within RPM's portfolio, including Crud Cutter, Mean Green, and Contobum, if I'm pronouncing that correctly. That guy sounds like the 1927 Yankees when it comes to cleaning portfolio lineup. Ron Gross: I love it. Alright, fools. We'll see you a little bit later in the show. Up next, an interview with Martin de los Santos. He's the CFO of Mercado Libre, E-commerce giant and the largest company in Latin America. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Ron Gross. Molly Fool senior analyst Asit Sharma caught up with Martin de los Santos, the CFO of Mercado Libre, a few weeks ago at our Market Volatility Summit. In this clip, you'll hear how Mercado Libre became resilient in the long term opportunities for Meli. Motley Fool members can access the full interview and replays from the event at Asit Sharma: Martin, I wanted to start. Just looking at this company in general, Mercado Libre has such a history of dealing with formidable challenges from hyperinflation and geopolitical events within Latin America to providing fintech and lending services to populations that often are new to the banking and credit systems. What makes Mercado Libre such a resilient business? Martin de los Santos: Yes, we were founded back in '99, and we turned 25 years in 2024. With those 25 years, as you can imagine, in Latin America, operating in 19 different countries, we've seen it all. Things going sour very rapidly. Maybe Mezuela as an example, hyperinflation in Argentina, then things coming back as we are seeing it today, Brazil, Mexico. I think we went through a lot during those years. I would highlight a couple of things. First, we operate in commerce and Fintech in a region where there's a lot to be done in those two fronts. Production of commerce continues to be very low compared to other places. We are riding a secular trend of people moving online. The same with Fintech, I think the banks have done a really poor job of including financially, most of the population in Latin America, so that generates an opportunity for us. That's one thing. I will also highlight the culture of the company. Our CEO, our chairman continues to be Marcos Galbrin, who was the founder of the company. Not only him, a lot of people were with him at the beginning continues to be with the company. We have a very strong culture of entrepreneurship, willingness to take risks. Many times in the history of our company, we have to reinvent ourselves or take big bets, and that's a big part of our success, a culture of excellence, execution, bringing good talent, teamwork internally while competing because we operating in very competitive markets to the outside. I think I would say that we operate in a region that has tremendous opportunities, both commerce and Fintech, and we also have a culture of executing and operating in Latin America that has helped us to be resilient and to be successful in this. Latin America, we came from being a start-up of five people in the garage 25 years ago to last year we became the most valuable company in Latin America, and we have done that I think by culture and execution and the quality of people that we brought into our team. Asit Sharma: I liked one thing that you mentioned between the culture and the execution, which is the ability to take a risk, to take those big bets. How are things different now that you sit in the chair of a CFO to make sure that the bets have a commensurate payoff for the risk and also maybe in some cases to be the person who's encouraging the company to take those risks? Martin de los Santos: It's not only my role. I think it's the role of the senior management team. We keep on thinking about the trade off between growth and profitability. In fact, we have a name for that within Meli we call it grow fit because we operating many different verticals have tremendous growth opportunities, but at the same time, they require investments. If you look at the history of the past five, six years, we improve significantly the profitability of our business. While at the same time, we continue to deliver very high growth in both in commerce, Fintech, advertising at the different verticals. However, when we look forward, we don't shy away from investing, even if in the short term, that might put some pressure on margins because the main thing for us is to make sure that we do capture those opportunities that we had ahead of us and not necessarily to maximize short term profits. We do have a long term perspective on the business, but that's a trade off that we do it all the time, deciding where to invest and sacrifice a little bit of margins to capture opportunities in the future, and the whole company and the whole senior management team is thinking in those terms. Then it does risk taking, I think it's the nature of our business. You mentioned I used to run the credit business, which we started back in 2017. That's probably the ultimate one that you need to manage and to deal with risk, and we're very cautious in the way we manage that risk. But in other cases in the history of our company, maybe 15 years ago, we took a big bet on adapting our platform to mobile, and that required lot of risk and a mindset of really changing the way we were doing things. If we didn't do that, we wouldn't have a company today. Ten years ago, we started with logistics, which is critical for e-commerce solution. If you think about it ten years ago, we didn't touch one single package. Today, last year, we have 1.8 billion packages delivered through our own fulfillment infrastructure or logistic infrastructure. I think those type of beds that when you need to do when you need to take risk and make sure that you invest behind the long term growth opportunities, that's what differentiates mainly from other companies that might not be willing to take those risks. Asit Sharma: I wanted to ask you about some overall metrics that you use as you look at the business. I used to work for a company where while we had so many drill down metrics, the owner would come in every day, and he said, I just need one number to run this business. Now, that wasn't true. You need more than one number to run a business. But it taught me something that people like yourself often Kean on a few metrics almost on a daily basis. How do you gauge the health of Mercado Libre from day to day? Martin de los Santos: Yeah, we are a very data oriented company. Business reviews that are so deep in terms of analysis and data that is true. It's hard to keep up with all the businesses. It's very complex Mercado Libre today. So it's important to have some, big picture views, and then you can drill down whenever you see something that we want to go into more detail. Many different businesses, 19 different countries. You can imagine that the metrics are hundreds. But I would say that obviously, top line metric GMB on our commerce business is very important. Users, last year, I mentioned we have 100 million users, or 100 million buyers on our commerce platform. In terms of engagement, transactions per user is a metric that we follow very closely. That's on the commerce side. On the Fintech side, obviously number of users, 61 million monthly active users last quarter. TPV for the acquiring business, then credit book, asset and the mansion that has been growing more than 100% year and years, is a metric that is very important to see engagement with our platform and then frequency of use. In Fintech is very important to have principality. We're seeing people who have engaged with more than one product and how often they engage with different products. That's something that we pay a lot of attention. Then the credit business, obviously, the traditional metrics, MPLs, the spreads of our books, the different books, and so on the repayment of our credit card, for instance, which is a product that you need to invest to build a cohort, I would say those. Obviously, financial metrics at the end of the quarter, at the end of each month are very important to see top line growth, as well as profit margins are the two ones, the two metrics that tells us how we are doing in terms of growth feed rate profitability, as well as growth. Asit Sharma: Strategically, where you sit, where are you focusing the organization to create the most value when we look out over a very long time horizon? Is there a specific activity or investment that's going to create the greatest yield as we look beyond, say, the medium term that you like to talk about within the management team and encourage employees to think about? Martin de los Santos: Very important to have an owner's mentality team. We operate. We are fortunate to operate in a platform in a company. That has, as we like to say, has more doors to be open, that has to open them. We have opportunities everywhere we see. In commerce, we're just getting started. Penetration is very low. We continue to grow at a very rapid pace north of 30% year and year, twice the speed of the market, so we're continuing to gain market share. Even after 25 years, we're growing at start-up rates. On Fintech in Mexico, less than half the population have a bank account. Less than 15% have a credit card. The opportunity is immense as well to continue growing. Advertising, we mentioned it before, everywhere you look at mainly there are opportunities. We are fortunate to have a lot of resources to take on those opportunities. 18,000 developers, a very well, very strong balance sheet to invest. We generate lots of cash, even though we are investing in our business as well. I think the big challenge is when you don't have a clear constraint is how to make sure that you are investing in the right things. That represents not only choosing what to invest, but also choosing what not to do, not to get and also to make sure that you are investing on things that really have a good payout, and they actually result in growth going forward. That's something that continuously my team and my colleagues at the sea level are continuously looking at, at the end of the day is maintaining this growth feed mentality that we have been operating. We want to make sure that we hit the growth targets. While, not shying away from investing, even if in the short term, we might put some pressure on margins. We don't mind. We don't run the business on a quarter by quarter basis. We run the business for the next 25 years. Ron Gross: Coming up after the break, Emily Flippen and Matt Argersinger return with a couple of stocks on their radar. Stay right here. You're listening to Motley Fool Money. 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 r sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and are not approved by advertisers. The Motley Fool only picks products that it would personally recommend to friends like you. Welcome back to Motley Fool Money Ron Gross here with Emily Flippen and Matt Argersinger Fools, we've got time for two quick stories before we hit stocks on our radar. Let's start with the Walmart news on Wednesday, Walmart withdrew its earnings guidance, citing uncertainty surrounding the Trump administration's newly imposed tariffs specifically on China. Emily, the health of Walmart can tell us a lot about the health of the consumer and, frankly, the economy as a whole. What did you take away from these actions by Walmart management? Emily Flippen: Unfortunately, my takeaway is that things will likely get worse before they get better. The silver lining to this is that Walmart did reaffirm its sales guidance. They actually are perceived to have a little bit more clarity into how consumers are behaving versus what their bottom line may look like, which is obviously heavily impacted by things like tariffs and any negotiations there. Not only does Walmart really act as that bellwether for how consumers are behaving, but it's also really easy to forget that Walmart's a little bit of a bellwether and a leader for other businesses that look to Walmart for guidance. So many companies are likely watching Walmart's decision here to pull back guidance on their bottom line, and they could potentially adopt a very similar wait-and-see approach here as it applies to their own guidance. And that can almost turn into a self-fulfilling prophecy of economic slowing and leading to a market sell-off all because of the cautiousness around things like earnings guidance. Now, I think that could be a dramatic interpretation, of course, and I'll just quickly mention that Walmart does have much more complex supply lines than a lot of other small businesses. Their certainty and clarity there could be more opaque than other companies. But the fact that they are a bellwether for both consumers, which we focus on, as well as other businesses is a bit of a red flag. Ron Gross: The new Superman movie is scheduled to hit theaters this July. As listeners know, I am a Superman fanatic, really looking forward to it. Admittedly, the movies haven't always been so super, but there is a new sneak peek out there. I know you have both seen it, so I'm curious to ask. Do we have a hit on our hands or a dud? Did you have a favorite part of the sneak peek? I'll go to you first Matt. Matt Argersinger: Well, how can you not love Krypto coming in there, Krypto the super dog, coming in to rescue Superman from whatever ails him in that particular scene. But no, look, I think it looks awesome. I think Gunn did a fantastic job with the Guardians of Galaxy movies. I like that he's bringing a lot of interesting characters into the Superman movie, including looks like Hawk Man's in there. Looks like Guy Gardner, the Green Lantern characters in there. I'm excited. I'm going to go see it with my son, for sure. Emily, a hit or a dud? Emily Flippen: Well, let's put it this way. You're barking up the wrong tree, because I am not a superhero movie watcher. But I will say this. I watched the trailer at your bequest, and I didn't know the creepy CGI dog had a name. Nice to know. Matt Argersinger: You don't know Krypto? A creepy CGI dog. Emily Flippen: There's a lot of CGI in that trailer. CGI has come a long way. I don't know what I'm talking about, as it applies to CGI. I will say, it was obviously CGI, though. I do think it's a little bit of a red flag if you're having to bring in other superheroes to attract excitement. What does that say about Superman? Ron Gross: Well, I am hopeful, and my favorite part is when the Fortress of solitude rises out of the snow as Superman gets closer, almost like it could sense where he was. I love that part. Very cool. Alright, Fools, a quick personal note before we hit stocks on our radar. This will be my last Motley Fool Money radio show. It has been the joy of my career to play a small part in the financial journey of as Chris Hill would say, our dozens of listeners. Thank you for letting me share my thoughts with you for 16 wonderful years. Thank you all very much. I really appreciate it. Matt Argersinger: Ron, can I just say? Ron Gross: Yes, Matt. Matt Argersinger: Sixteen years, actually, 17 years with the Motley Fool. You've been a colleague, a mentor, a leader, most of all, a friend. I wish you the very best in retirement, and we will do our very best. It will be a lot harder now, but we will do our very best to keep this show firing on all cylinders. Ron Gross: [laughs] I appreciate that. Thanks, Martin. Very nice. Fools, we have time for a couple of stocks on our radar, so let's close out the show that way, and I will bring in our man Dan Boyd, to ask a question and pick his favorite. Emily, you're up first. What have you got? Emily Flippen: I'm looking at Dexcom this week. It's nice to have a little bit of positive news in a world that is changing around us so rapidly. Some of the excitement here for Dexcom did get drowned out by tariff talk. But Dexcom did see a little bit of a revival this week because they did get FDA approval for their newest continuous glucose monitor that is a Dexcom G7. It could be worn for up to 15 days so that extending the life versus their previous model, it puts them in more direct competition with Abbott, who is one of their competitors, which also has the FreeStyle Libre, which can be worn up to 15 days. Ahead of Metronic. I definitely move in the right direction here for Dexcom. CGM penetration for diabetics worldwide is still so much lower than what it should be, considering the health benefits that it can bring. I will say, though, I always have in the back of my head, just the fear around a couple of things. One is weight loss drugs, leading to a decline in type 2 diabetes that could eat up some of the market here for Dexcom, as well as actually a potential cure for something like diabetes. That's further down the line, but a lot of research and time is being spent into it, considering it is such a deadly and expensive disease. Ron Gross: Dan, you got a question or a comment? Dan Boyd: Dexcom it's one of these companies that the name doesn't really match up with what they do. The name, to me, is, like, something out of Superman, very sinister. But what they do very good for society. I don't know what to do here, Emily. Emily Flippen: That's a good point. I will say Abbott sharing its name with Abbott Elementary. Sounds like the friendlier of the options, but I like Dexcom more, despite the name. Ron Gross: Matt, you're up. What have you got? Matt Argersinger: Ron, I'm looking at RobinHood Markets. Ticker H-O-O-D. This is an unusual one for me. I just want to stress, this is a true radar stock, a company I'm just beginning to take a look at. But I heard a great interview with Robin Hood's chief brokerage officer last week. If you look at where young people, I'm talking mainly Emily's age, where they're going to open up brokerage accounts. It's not Fidelity. It's not Charles Schwab. It's certainly not Interactive Brokers where I tend to toil. It's Robin Hood. Nearly 26 million funded customers, many, I think most of which are in their 20s and 30s. When that large cohort of investors matures, starts opening retirement accounts, trust accounts, getting mortgages, doing more sophisticated trading. I think Robin Hood is really growing its offerings to like, a whole range of financial services. They also have the Robin Hood Gold membership, which is approaching three million accounts. It offers members higher levels of market data, greater margin access, could be dangerous, and then higher interest on cash and accounts. I have to say, I'm a shareholder in Schwab and I will probably be a shareholder in Schwab for a long time. But if I'm going to make a long term bet on a brokerage company, I might also want to have exposure to a brokerage company that has the most young people coming to it because it's likely to prosper right alongside that growth over time. Ron Gross: Dan, got a question? Dan Boyd: Yeah, when I hear Robin Hood, I associate it with meme stocks like GameStop and AMC and all that jazz. Is this a company that actually has legs, or is it just something that's going to be a flash in the pan? Matt Argersinger: Dan, I thought the same thing. It's the meme stock brokerage. But the fact that they have 26 million funded customers, and that has continued growing way past the GameStop and AMC stuff that we saw several years ago, that gives you confidence that has long term staying power. Ron Gross: I, too, am a Charles Schwab shareholder, not a Robin Hood one, but I'll take a look. Could be interesting. Dan, you got a favorite fear watch list? Dan Boyd: Well, it really seems like Dexcom is, like, the smart choice, but Robin Hood, I feel like is the more interesting choice. Can I do both on your last day, Ron? Ron Gross: You can do whatever you want, Dan. Both it is. Dan Boyd: That's awesome. Ron Gross: Emily Flippen and Matt Argersinger, thanks for being here, my friends. That's going to do it for this week's Motley Fool Money. Our tremendous engineer is Dan Boyd. I am Ron Gross. Thanks for listening. The Motley Fool Money Radio Show, we'll see you next week. JPMorgan Chase is an advertising partner of Motley Fool Money. Charles Schwab is an advertising partner of Motley Fool Money. Wells Fargo is an advertising partner of Motley Fool Money. Asit Sharma has no position in any of the stocks mentioned. Dan Boyd has no position in any of the stocks mentioned. Emily Flippen, CFA has positions in Constellation Brands and MercadoLibre. Matthew Argersinger has positions in Boston Beer, Charles Schwab, MercadoLibre, and RPM International and has the following options: short May 2025 $45 puts on Delta Air Lines. Ron Gross has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boston Beer, CarMax, Interactive Brokers Group, JPMorgan Chase, MercadoLibre, and Walmart. The Motley Fool recommends Charles Schwab, Constellation Brands, Delta Air Lines, DexCom, and RPM International and recommends the following options: long January 2027 $65 calls on DexCom, short January 2027 $75 calls on DexCom, and short June 2025 $85 calls on Charles Schwab. The Motley Fool has a disclosure policy. Tariffs, Trump, and Turmoil was originally published by The Motley Fool
Yahoo
31-03-2025
- Business
- Yahoo
"Rule Breaker Investing" Mailbag: Chalkboard Wisdom and Favorite Words
In this podcast, Motley Fool co-founder David Gardner fields listener questions and offers reflections with trademark Foolishness. Topics include: Should you use forced rankings to evaluate your portfolio? Can AI help guide investment decisions? Do Elon Musk and Tesla continue to reflect your best vision of the future? Why does following the simplest of instructions matter so profoundly? To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. A full transcript is below. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $284,402!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $41,312!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $503,617!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 24, 2025 This video was recorded on March 20, 2025 David Gardner: It's that time of the month for Rule Breaker Investing. It is your mailbag. The final Wednesday of every month. A delight. Thank you for stuffing the mailbag with fun this particular month. Speaking of fun, that was the theme of March. It is every year for this podcast, at least for the last couple, as we've filled up March with market cap game shows, specifically our world championships. Congratulations to our new world champion Emily Flippen, who acquitted herself well, taking on Andy Cross, our Chief Investment Officer, last week, but even the previous two weeks, so much fun, the final four. I hope you played along with us. I hope you scored some points too. That was the real focus of March. Usually, at the start of Mailbag, I like to review the different episodes we've done. Usually, we have a motley array of them, but this time, it's just pure madness. Let's move on then to some hot takes from Twitter to kickoff this week's podcast Pro Shop Guy MF. That's Mike McMahon at Pro Shop Guy. MF1 on Twitter X. Mike, you wrote a biased poll ran during the Monday Morning Show with The Motley Fool's Morning Show, viewers are rooting for Emily Flippen to dethrone reigning champ Andy Cross in the March Madness Market Cap Game on the Rule Breaker investing podcast. Mike, you showed a poll you said admittedly biased. I wasn't watching the Motley Fool Morning Show at the time, but it sounds as there was a plug for Emily, and most people were cheering her on. I realize we often do cheer on the underdog. She was taking on our present world champions. Thanks for referencing that at Neil and Rockville. I think that would be Rockville, Marilyn Neil. You wrote in, please, only one of these three have actually had to fight her way around a desert island. Obviously, Emily will be the final survivor. Neil, you ended up being right. At Pops Spiffy Love Spiffy Pops. You wrote Looking forward to playing along. This is just my insertion, that is, after all, the whole point of the game show for you to play along with us. Andy rocking those pie socks, but also his on shoes. I know the ticker symbol, ON, ON, is popular among Fool members. Thanks for some fun hot takes mostly centered on the market cap game show, and speaking of which, I was having a conversation with my wife, Margaret, over the course of a long drive in March. She was saying you didn't really go back and redefine market cap at any point. I realized in the early days of the Market Cap Game Show, I made a big point of explaining what market cap is and how it works. Yet, we just went through an entire March. For especially newcomers to the stock market, you would have had to look it up because I never really explained market cap at any point. I thought just a brief rehash of market cap before we get into this month's mailback, the market cap of a company is just simply the number of shares issued, the shares outstanding of that company, multiplied by the share price. When you multiply those things, that gives you a sense of the value of the equity of a company the market capitalization. Now, it is a bit simplified, as I'll explain in a minute. But most people, in my experience, don't know the market caps of companies. If they're looking at stocks, they often only know the share price of a company, so they'll think, that stocks at $3.29. Well, that would be the one I should buy, say a lot of newcomers who often prefer lower-priced stocks, then, let's say, instead of at $3.29, let's say it was at $32.90 or, heaven forbid, at $329 a share. Now, a lot of people assume that, let's just say, they have $329 themselves. They should probably buy the stock at $3.29 because that would get them 100 shares of a stock rather than just say, 10 shares of a stock at 32.90 or just one share of a stock trading at $329 a share. But again, they're only looking at the price per share of the stock. How many shares does the company have outstanding? You're buying a piece of the pie when you buy stock, a slice. How big is the pie that your slice came from? Market Cap multiplies the price per share of a stock times all the shares outstanding to give you that company's overall value. Now, I said it's a little oversimplified, and it is because if a company were to get bought out by another company, let's just pretend it's a $10 billion company, so it's got a $10 billion market cap, but let's also pretend that they have a wonderful balance sheet. They have $3 billion of cash on the balance sheet and no debt. If somebody else is buying them out, technically, the enterprise value, the actual amount being exchanged, is not 10 billion because you're buying a company with three billion just sitting in the bank. The enterprise value, you subtract the cash from the market cap to get the enterprise value, which would be $7 billion. That's actually the value of that company, even though its market cap is 10. Now, let's take the opposite example. Let's pretend the company doesn't really have any cash in the bank. It has a lot of debt. We'll say $3 billion of debt on the balance sheet. If somebody else is buying them, they're actually paying basically $13 billion. The 10 billion for the market cap, and then they're having to assume $3 billion of debt. A quick study there on enterprise value, which is the slightly more intelligent, slightly more complicated view of market cap. But of course, to keep the game easy, lickety split, and for the most part, market caps are good numbers to have in mind. Anyway, we made it the market cap game show, not the enterprise value game show doesn't quite come as trippingly to the tongue. I will say this, though, as we get started now with the mailbag, it's not an easy game. The ending of Game 2, if you remember, between Bill Barker and Emily Flippen, they each made guesses around $60-70 billion. This was the tiebreaker to see who would advance to the finals. Both Bill and Emily, again, guessing around 65 billion the actual market cap of service now is 168 billion. They were both off by about $100 billion, which is a reminder that this game is not easy. It's hard to understand and know so many different companies and what the market caps might be, especially at an inflated value like $168.12 billion. Service now is by now storied market cap. Speaking of Market Cap, let's get to Mailbag item number 1, which is about the Market Cap Game Show. Thank you, Dave Geck. Dave, you wrote Today's Market Cap Game reminded me of two valuable life lessons. Now, I want to hasten to add, Dave, I've abridged your notes somewhat for presentation on the podcast because it was longer at points than I could really share. I tried to tighten this up. It's just so much fun to share, though. Thank you for writing in. Dave, you wrote, again, today's Market Cap game reminded me of two valuable life lessons. First, when Bill and Emily both gave their final guesses on the tiebreaker. I realized I wasn't entirely clear on the rules. That recalled my father's wise advice, Dave writes. Don't play any game where you don't know the rules. Dave said I had misunderstood the parameter. I failed to consider that you were an English major, David, and would come up with rules that required less math. I blame you. However, in hindsight, if you'd intended the parameter to be an average, you probably would have explicitly stated that. Let me pause there for a quick sec, just to remind that in that final tiebreaker with service now, both Bill and Emily had very similar overlapping guesses. As I already mentioned, I'll just say Bill said 60-69 billion. Emily said 55-73 billion. They were both off by about 100 billion, but since Emily said 73, her top-end parameter. That was closer than Bill's 69 billion, his high-end parameter, and therefore, she won the tiebreaker in advance. But there was debate raised by Bill, and here by Dave, who knows a lot more about math than I do, saying, why don't you take the average and look for the midpoint of each of their guesses? Had I done so, Bill at 64.5 billion would have edged out Emily at 64 billion and won the tiebreaker. But again, as you wrote, Dave, that is not actually the rule. If it was an average, I would have explicitly stated that we've always gone with the closer parameter to the actual market cap. Anyway, let me more importantly get to your great coming story here, Dave, but you did say, like Bill, I take 100% responsibility for my loss. It's a reminder that details matter, even or especially in games. Now, speaking of details mattering, Dave writes the second lesson came from a math instructor at West Point in 1971. A fellow cadet who was first in our math class got called up to the chalkboard. Yep, real chalkback then to do a proof. In front of the class. Upon completing the proof, you were supposed to write QED and underline it twice with the green piece of chalk. He went through the proof, and it looked good, and it was well explained, and the instructor asked the class what was wrong. At first, no one said anything. Then I piped in Dave writes. He only has one green line under QED when there should be two. The instructor said yes and informed the cadet that he would get a zero for his board work for the day. This was crushing. The probability of him making up the ground to get back to the top of the class that semester was now practically nil. He looked a little stunned, and the instructor asked him if he thought that was too harsh. He admitted that he thought it was in that he solved the hard part of the proof that most people in the basic course could not, but that they could all double underline. He would think he should receive only one or two-tenths off, not a zero. The instructor got in front of him and said, we are in agreement that underlining twice is simple. However, your demonstrated ability to follow the simplest of instructions may someday get yourself and your people killed. ''Dave closes this stuck with me deeply during my time in military leadership, reinforcing the importance of precision and attention to detail, even in the smallest tasks. Details matter. Thanks again for the Market Cap game and the memories it triggered, Fool on David Geck.'' Well, Dave, that is quite a story. I think it speaks for itself. I'm sure we can all see both sides of that one, how heartbreaking it was that the guy who is top in the class in math and did everything right except that second double underline with the green chalk would get a zero. We see how seemingly unfair that is, and yet we can also see the instructor making a point that you still remember 50-plus years later, I bet that cadet does, and many others in the class, and it made an important point that might be more important than math. Let's move on to mailbag item number 2. One's from Rod Reid. Thanks for writing in, Dear David, I've been following the Motley Fool since the days of Rule Breakers and Rulemakers and have subscribed to various services over the last 25-plus years. I was listening to last month's mailbag episode where a couple of the contributors asked questions about when and why to sell stocks. Now, as one who almost never sells stocks, it caused me to think about my own practices and wonder if I should approach my portfolio differently and consider the opportunity costs of holding on to some stocks instead of selling and investing in something different. As I did so, I thought back Rod writes to the way Jack Welch, former CEO of GE, reputedly required his leaders to rank their employees and fire the bottom 10% each year. Now, while I think this is a terrible way to run a company, it made me wonder if it might be a good way to at least evaluate my portfolio. I know you love keeping score and have a scorecard for your own stocks. Have you ever practiced any ranking system on your scorecard? If so, what factors drive your rankings, and does that system generate any selling considerations when you evaluate your portfolio? Incidentally, Rod concludes I decided to see if ChatGPT could help me out with this process. I entered all the ticker symbols and then asked it to rank my portfolio by predicted return over the next five years. Then I compared the list to the Stock Advisor rankings. I didn't make any immediate sell decisions, but it gave me a different way to think about if and when and why. I should sell. Thank you in advance for considering my question. Fool on, Rod, Reed. Well, Rod, I really appreciate this note, and from many different angles, we don't have time to cover all of them, but I want to start first and foremost by saying, I think it's great what you did. I think it's great to consult ChatGPT. I'm glad you checked our Motley Fool Stock Advisor rankings, which are available to members of Stock Advisor when they want to see our stocks ranked. I think that thinking through which stocks make the most sense is always a good thing to do. That goes for not every single day, but I would say quarterly. On a quarterly basis, that's a good check in time for a lot of us as investors to just reassess how our portfolio is doing and what we think of our stocks. Again, I realize some people may want to do that more frequently, and some others might just want to do it once a year, or so. But I think doing that work of assessment and reconsideration always makes a lot of sense. I don't like the Jack Welch approach to business. I've also heard it said of Microsoft at different points. It might be one of those old saws that goes around and people mention it for big companies, really big companies. Usually, when companies get as big as GE did once or Microsoft, some people start rooting against them just because they're so big. They start developing stories or perspectives about those companies that may or may not be reflective of what actually happened in the culture, but just simply taking you at your word, this was what Jack Welch did. I was not a big Jack Welch fan, so I didn't keep up. But I don't think firing the bottom 10% of your employees annually is a great way to create a culture that people want to be part of. But your question cleverly reframes this. You're basically saying, well, what about forced rankings as a good discipline for evaluating our portfolios? Again, I think that can be helpful. But I would also say, make sure you're not oversimplifying what sometimes can be a nuanced picture because it's not just how you might rank stocks, but it's also the allocations that you presently have in those stocks. For example, if you had one of your very favorite stocks and you were over allocated to that stock. It was outside of your sleep number, you were like, I may own too much of this at this point. That actually might be a better stock to consider selling than one that you don't like anymore, and that is lower ranked. I think a key factor is, of course, what are your actual allocations? I also appreciate you calling out the importance of scoring, and I would say that if you do intend to sell with more frequency than you did in the past, make sure you're scoring what you're doing so that you can see after three or five years of evaluation whether that's working out for you or not. I do favor holding on to stocks for long periods of time, allowing those shares to compound for you. I know you've been around the Motley Fool for 25 plus years so presumably, you've had that happen in your own portfolio. I think that's really a great state to get any portfolio in. I try not to mess too much with the compounding clock that operates underneath all of our portfolios, the stock market rising 10% or so every seven years. If we're outperforming it with rule-breaker stocks, we're doing better than that and you can start seeing the value of holding on and letting a company like NVIDIA or Amazon keep compounding instead of selling against it and trying to figure out where else to allocate that money. I also think that sometimes, it is a good reason to sell if you've got a better place to put the money. If you're fully invested and a new company comes along that you really like. Of course, I think it's a good idea to consider selling something of what you have in order to put it in that new stock. I just want to make sure, Rod and everybody else listening that you're keeping score. If you're going to start a new approach, one that you're not quite sure about, make sure you're keeping score and learning because that creates a learning system. If you're not keeping score, it's hard to know how you're doing or what you should do going forward. Anyway, a great note, I would never want to let go the bottom 10% of my employees but I would consider letting go the bottom 10% of stocks that I didn't like. The little selling I do usually are stocks that just haven't worked out for me, and I'm reducing my capital gains by getting rid of losers from my portfolio. I've always had some losers, and we as rule-breaker investors always will have some losers, so it's something that comes rather naturally to me. On to Mailbag item Number 3. Hi, David. Long story very short. I'm a long time Berkshire shareholder and one of the stories of the recent decade. Frank writes is how much GEICO has lost ground to Progressive? The biggest reason, Frank writes, Progressive embrace technology by trying to use telematics to underwrite smarter. Now, this is David now speaking not Frank, our correspondent. I'm not a big insurance industry follower, so I want to make sure I define telematics for all of us if you too are not somebody who follows this very carefully. Telematics is the use of telecommunications and informatics. If you put those two things together, data transmission and data processing, you can get real time information about vehicles or machinery, or equipment. Think about using something like GPS technology. Then you've got the on-board diagnostics in cars. You have sensor, wireless communication, the vehicle location, its speed, its fuel usage. Its maintenance status can all be monitored and analyzed remotely. You can see how auto insurers can monitor driving patterns like your speed, your braking, your mileage to offer personalized premiums to their customers. That's what's going on here with the backstory of telematics and Progressive. Picking it up there from Frank's note, Frank writes, progressive was behind GEICO in 2011 in market share, and now they are firmly ahead with 50 more business than GEICO. In the mindset, the Rule Breaker mindset of winners win, look for the top dogs, smart backing matters, etc. Berkshire is now trying to catch up firmly playing Pepsi to progressive Coca Cola. Frank continues, I decided to buy some progressive stock ticker symbol PGR today. When it comes to telematics and data usage, PGR is the top dog and first mover. The CEO, I believe, is an example of smart backing. There's strong recent price performance, a lot of the traits we look for in Rule Breaker stocks. In some of my very brief homework, David Rubenstein, who has an interview show on Bloomberg is also today the principal owner of the Baltimore Orioles an incredibly generous benefactor in the greater DC Baltimore area. David Rubenstein interviewed Progressive CEO back in late 2020. The stock back then was around $85 a share. Now, Frank goes, I have a very small snippet of how he opened the show. He said he thought he missed it by saying the next company she goes to, I will buy the stock. Frank says, this is classic, and he sent us the audio from the opening of Rubenstein's show, which we will now for 33 seconds, share right here. In United States today, there are only 38 women who are serving as CEOs of Fortune 500 companies. One of those with the best track record is Tricia Griffith. She is the CEO of Progressive Insurance, one of the largest automobile insurance companies in the United States. She started out as a claim adjuster and worked her way up over many years to become in 2016 the CEO. Since that time, the stock is up more than 175%. My big mistake was I didn't know her then and I didn't buy the stock in the company. If she ever leaves that company and goes anywhere else, I'm going to buy that stock right away. Picking it back up with Frank's commentary, you see he said his big mistake was not buying the stock when she took over. I think the bigger mistake, Frank writes, was not buying the stock after the interview. Now, it happens to be a rec on Stock Advisor on your brother Tom's side. Anyway, I just wanted to share this with you because in the years gone by, I would also have said, I missed it. But now, I'm learning and taking a position. Fool on Frank I. Well, Frank I, thank you very much for going above and beyond sharing the audio clip from five years ago. But of course, I esteem your viewpoint and I love the lesson that you've learned. In fact, Frank went on to include the data of how progressive stock is done against the S&P 500 from the day that interview aired, which was October 7th of 2020. The stock from that day has gone from 96-281 or so, and that means the stock is up 220%. The S&P 500 just up 79%. We can both smile askance a little bit at each other Frank, to think that a billionaire investor as successful as Rubenstein has been thinks that he missed a great company because he wasn't there early days when she signed on as CEO. Yet, the stock has more than tripled from the day of that interview five years ago. I did tweet out on Twitter X where I'm at David G Fool, if anybody wants to follow me. I did tweet out last July the following. I said five of the most harmful words for a potential Rule Breaker investor looking at Rule Breaker stocks. Here they are. I guess, I missed it. So much money left on the table, such an opportunity cost around that mentality. Most great Rule Breakers and you've made a good case, Frank, for Progressive being one of it's funny because I don't follow the insurance industry. I just see all the funny ads from Progressive and GEICO, and all of their competitors. They're trying to out funny each other, especially on sports broadcast, especially throughout this March. I've seen so many television ads. State Farm is going really big in March madness this year. They're all quite funny, but they all blend in together. I myself didn't realize how Progressive has started to dominate GEICO based on a fantastic CEO and a real commitment to technology. Thanks for helping us realize not just the state of the insurance industry today Frank, but also I missed it being one of the most harmful mentalities we can have as investors. Usually, as Frank understands, the winners keep on winning. Well, I've done this all month long on this podcast. It's half time, and I'll do it one more time. This is the last halftime we'll have. I don't think we'll do this anymore in April, but I've been doing my page breaker previews as halftime entertainment throughout this month. As I shared at the start of the year, my 2025 book Rule Breaker Investing is available for pre-order now. After 30 years of stock picking, this is my magnum opus, a lifetime of lessons distilled into one definitive guide each week, until the book launches on September 16th of this year. I'm sharing a random excerpt. We just break open the book to a random page, and I read a few sentences. Let's do it here. This week's page breaker preview for your March 2025 Mailbag. Three sentences from early on in the book, and I quote, "For me, I like to think forward 42 years which allows that seven year double to happen six times. What does that mean? It means every dollar bill you're holding or spending at Starbucks, or investing today is actually worth $64 to your future self." That's this week's page breaker preview, every dollar is actually $64. To pre-order my final word on stock picking shaped by three decades of success, just type Rule Breaker Investing into Barnes and or wherever you shop for fine books. I want to thank everyone who's already pre-ordered. That means a lot to me. Onto Rule Breaker Mailbag item Number 4, really appreciate the whimsy here. Thank you, Chris Abels. You write, Dear David, I'm curious. Do you ever collect words that you find particularly interesting or meaningful? Here are a few I've come across. Chris writes, that I quite like. I'm going to note before I share these that each of these is of foreign derivation. None of these is English. I appreciate your global view, your global sharing here, Chris. Here's the first one. Number 1, Sisu, S-I-S-U. Chris writes this finish word embodies the concepts of determination, perseverance, and resilience in the face of adversity. It's a fundamental aspect of finish, culture, and identity Sisu. The second one of Chris's 3 is Wabi Sabi. Chris writes, this Japanese aesthetic appreciates the beauty found in imperfection, impermanence, and incompleteness. Finally, Number 3, JUGAAD, which is spelled J-U-G-A-A-D. I might be butchering the pronunciation, I'm doing my best. Chris writes this Hindi word describes a flexible approach to problem solving that utilizes limited resources in innovative ways. Chris signs his note. Meaningfully to me, KaluKale Crisabelas When I think of KaluKale, I think of the poem Jabberwock. Where the Jabberwock, my son, the teeth that bite, the claws that snatch, beware the Jubjub bird and Shun the Frumious Bandersnatch. KaluKale to you as well Chris, a fellow lover of language and of poetry. No doubt, as well. Well, I'm so glad that you wrote it. First of all, I love each of your three words Sisu, Wabi Sabi, and JUGAAD. I think what's special about them is each of them comes from outside the English language, and yet that attempt to convey the meaning of a word in another culture, a concept that we don't necessarily have in our culture, but when you share it, it makes a lot of sense. It sounds really good. Wabi Sabi, that Japanese aesthetic appreciating the beauty found in imperfection and impermanence. I love it. But since you open this can of worms, I do keep a list of my favorite words, and I have 20 of them. I'm not going to explain each one. They're all English, so you're going to know most of them. Maybe there are one or two stories here, but thank you for giving me a platform. About 10 years since I started this podcast to share my 20 favorite words, these didn't come to me all at once. It's just when I heard one, let's say seven years ago or three years ago, I had to add it to my list. Here, they are alphabetically. The first one is balmy. I love the feeling of balmy. I love the word balmy. The second is camel case. That's describing not upper case letters or lower case letters. But if you think about something like iPad, where that P is capitalized right in the middle of a word like a camel's hump, that is truly camel case. I just love that there's a word for that in the English language. Number 3 is crackerjack as something excellent. I was looking up the etymology of this one. The year was 1893, it became a US colloquialism. Fanciful construction that caramel coated popcorn and peanuts confection was said to have been introduced at the world's Colombian exposition the World's Fair in the year 1893. Supposedly, a salesman gave it a name when he tasted some and said, that's a crackerjack because at the time, the phrase crackerjack meant something. That's something excellent. The name was trademarked in 1896. The prize in every box by the way, introduced in 1912. I just like Crackerjack as an adjective. That is a crackerjack stock pick. The fourth and fifth on my list of 20 favorite words are dreams because it's such a beautiful word, and it means so much to so many of us. Number 5 is Excelsior, which means ever higher in Latin. It is my Motley value here at The Motley Fool. In Rule Breaker Investing when it comes out on September 16th, the final chapter is entitled Excelsior. My next five freedom global. These are just words that I think are important, and I think that's in part why I love them. Joy. Number 9 is Lucubration. That one needs brief explanation. If you've ever pulled an all night or if you've ever worked by lamplight, if you're a regular candlelight person, that's what you're doing. You're Lucubrative. You're working by lamplight, Lucu speaking to the Latin for light, that first half of the word, abrasion, about work, so work by lamplight, I love because I've done it throughout my life. I am a Lucubrator, and perhaps you are, as well. Number 10 is meliorism. Now, of all of mine, this is the one you have to look up in a dictionary to understand what's happening, M-E-L-I-O-R-I-S-M. Of course, once I tell you the concept, you'll see why I love it so much. It's a metaphysical concept, but it's the belief that the world tends to become better or is capable of improvement. I think that explains as much as anything why the stock market goes up decade after decade and century after century over long periods of time, from lower left to upper right, despite people thinking, My gosh, it's different this time. It's all going to end badly. It hasn't ever. I do believe things will continue to become better, not every day, and not in every way. But if you take the long view, as an investor, your whole life long, meliorism is a huge reason you're going to profit. Well, those are words 1-10. I feel like if I go on too long and I'm being too self-indulgent, I'll keep moving here. Number 11 is mystery. Just love the word. Love the concept. Number 12 is nocturne. That does, of course, come from, I think it's the French, so it's not exactly an English word, but the musical composition of a dreamy character, a composition appropriate to the night, nocturne's a beautiful word. Number 13 is a little bit of a 10-cent word. It's nugatory. Look it up, N-U-G-A-T-O-R-Y, basically means something that's useless, trifling of no value. Nugatory. But if you look at the etymology, you'll see why I love this word. The Latin nugatorius did indeed mean worthless, trifling, futile, but it came from nugator, which was a jester, or a trifler or a braggart, but nugatus passed participle of nugari to trifle, jest. Play the fool. So you can see why I love the word nugatory number 13th on my alphabetical list, because first of all, it's such a dramatically overstated and complicated word for just the meaning of useless. Nugatory itself feels futile and invalid as a word, but that it all derives from the court jester, from playing the fool, has special meaning to me, and I suppose many of us as well. Word number 14, Oligophagous, another 10-cent word, comes from, if you know what oligopolies are, oligarchies, rule of a few, economic domination by a few. That's the oligo part, and phage means to eat. When I came across this word in my reading 20 or 30 years ago, I was like, My gosh, there's a word for that. That's me. People who eat a few things. I am not somebody who's particularly daring when it comes to going out to restaurants, or my palate is quite limited. I tend to eat the same things over and over again. And the word Olegopagus O-L-I-G-O-P-H-A-G-O-S is, of course, for me, maybe for you, too, if I've just described is on my list of my 20 favorite words. I'll just run through my last six quickly. Again, each of these words I love, but most of us understand what these are plucky is number 15. Number 16 is racy. Number 17 is rapt as in R-A-P-T. Number 18, sang foie. Of course, this from the French, as well. Just means coolness, mental composure, sang foie, cold bloodedness from the French, and my last two are treasure, and then whimsy. I always think of Dorothy Sayers, the novelist, and her character, Lord Peter Whimsy, and his coat of arms, his family motto, where my whimsy takes me. I think for a lot of us, that's true of life. Often, if we let our whimsy take us places, we find treasure. So those last two words connect for me. Anyway, thank you, Chris Abels, for giving me an opportunity to share my 20 favorite words, which I've never gotten to do before in this podcast. I'll probably never do it again, but I hope there are a few there that popped out for some of you and might enter your own favorite words list. On to Rule Breaker mailbag item number 5. This one from Bruce. Bailey, thanks for writing in. Bruce is a longtime Motley Fool subscriber and listener to the Rule Breaker Investing podcast. I appreciate your stance that, generally speaking, you avoid any involvement in political statements or analysis. On the other hand, Bruce writes, I have heard you say many times that, "Your portfolio should reflect your best vision for our future." Words to that effect. With that in mind, Bruce asks, I'm wondering if Elon Musk and Tesla continue to reflect your best vision of the future signed Bruce Bailey. Well, Bruce, thank you, first of all, for understanding and knowing how I think about these things. You're right. Even though I grew up in Washington, DC. I don't spend a lot of time thinking about the political world. I've benefited Net N, I think not being part of the news grind, it's exhausting these days to follow the news, and yet, I never really have followed the news very much. I do follow news of my companies. I tend to follow the private sector much more carefully than the public sector, and I think I've been well rewarded for doing so. There are a lot of reasons why I think the private sector is actually what runs our country far more than the public sector, which is often how newspapers or academia tends to talk about our country. Of course, understandably, if you're president or in Congress or you're a Supreme Court justice, you have real responsibility felt by so many Americans, but at the same time, if you are every day delivering packages to my doorstep, if you're serving me my morning coffee, if you're making sure I have insurance, if you are filling my refrigerator or my wardrobe with the things that make my life good every day, you have a much more intimate and important role in my life, typically, than Congress. I've said that from time to time on this podcast in the past. Now, you specifically, Bruce, are asking about Elon Musk, and I understand why and Tesla by extension. And I realize for a lot of Americans, they're very, very divided on Elon Musk and his role, both in the private sector and now the public sector, as well. I am generally pretty neutral here. I'm pretty arm's length. I want to say, most Americans, I think it's true of a majority of Americans, we do believe the federal government should be smaller. It has grown over large. It's maybe doing a lot more than we needed to in some ways. And so I think there's something about courage and vision, even though I'm not always a big fan of how it's been done or what's being done. Nevertheless, I think, looking back, history may see that some of these decisions were good but hard decisions, even if again, they weren't done very well. So I think a lot of people hearing me, especially in the US, recognize that that can be a good thing. On the other hand, Elon's direct alignment with one of the parties, not the other, I don't think leads to my favorite view of America. I prefer a United America where we all realize we share a lot more in common than what drives us apart. I do feel as if the present political milia often tries to do the opposite, and Elon has certainly bought his way into that. But apart from just reading political tea leaves, I want to say, as far as Tesla and what Tesla has done in this world, I think what Tesla has done is wonderful. For the most part has spurred a revolution, obviously, starting with vehicles to get us to more sustainable uses of energy. By the way, electric cars have a lot of superior benefits above the traditional gas engine cars that we all grew up with, the lack of maintenance and a lot of the other expenses that are necessary for vehicles that I grew up with are now gone from the electric vehicle life that I've been leading personally for the last 15 years or so. So I think what Tesla does is really quite wonderful in the world. I realize some people are now equating Elon with Tesla. I would say, If you know anybody who works at Tesla, you're going to have a lot of different types of people who work at Tesla. I'm sure some of the people working at Tesla don't like how Elon has been behaving himself. Others may be solidly behind him. From my standpoint, I'm looking at the company and its effects on the world. For me, I would say, Bruce, in conclusion, Yeah, my portfolio, which owns Tesla, does reflect my best vision of the future. And I would be the first to say, I have many friends who do not like Tesla now or Elon at all. Maybe they never did. I would be the first to say, Don't own that stock. Because you're right, Bruce, I think your portfolio should reflect your best vision for our future. Each of us sees different things. I think our money should be where our mouths are at all times. I think your portfolio should express yourself. For my own part, I'm not a huge Elon fan boy, but I am grateful that Elon was on this earth when I was the value that he's added, whether we're looking at outer space, or we're looking at new areas like robots, there's Neuralink. Of course, PayPal in his past, there are all kinds of innovation and value that Elon Musk has brought. And I would say I'm grateful that he's here in the United States of America. I'm sure glad that he's one of ours as opposed to in another country, maybe a country hostile to the United States of America. I think he is an incredible asset. If you disagree, I'd be the first to say, please don't buy the stock. There are many other stocks you could have in your portfolio. I'm not even asking people to mirror what I'm doing. I'm here saying, make your portfolio reflect your best vision for our future before we go to our final mailbag, just want to briefly look at Tesla's stock. On November 1st, just days before the US election months ago, it was at $250 a share. On December 17, it hit a high of $475. It nearly doubled over the course of a month and a half. And by March 10, it was back where it started on November 1 at $250 a share. As I'm recording this podcast Tuesday afternoon, it's back up over $280 a share. This has been a phenomenal stock, no matter how you look at even the prices where it is now having come down well down from its pricing in December is still well ahead of where it was a year ago, especially five or 10 years ago. And I think Tesla is going to continue innovating in ways that benefit the world. Yeah, I'm going to personally remain invested in a stock that has added a lot of value to my portfolio, but I think a company that's added a lot of value to the world. If your mileage differs, I'm good with that. Just make sure you're invested in a way that's true for you. Before our final mailbag item, let me just mention the Motley Fool's Breakfast News. You can start your day with our free daily market email newsletter. That's Breakfast News from The Motley Fool, daily expert market analysis, company updates sent straight to your Inbox. Every weekday, 07:00 or 07:30 A.M. I'll be there. Without fail. You can sign up for the Motley Fool's Breakfast News at It's part of my every morning. I hope you're enjoying it as well. Our final mailbag item, this one, probably the shortest of the week, a throwaway, but I wanted to honor a tweet dropped to me by Daniel Trindade Daniels at Daniel T-R-I-N-D-A-D-E seven at Daniel Trindade 7, who wrote, Hey, David, I'm listening to your recently released mailbag episode. That would be February last month. Daniel said, There's a small pet peeve that I'd like to bring up. You've been calling Axon Enterprise, Axon Energy. Multiple times. Happens to all of us. Daniel kindly writes, cheers, and speak soon. That was the tweet. I said, First of all, I love it when people correct me because I don't want to walk around saying the wrong thing. I want to say the right things. I've always known it was Axon Enterprise. I've recommended the stock multiple times. It's in lots of Fool's portfolios, our family portfolio, as well. And I can't believe for one mailbag I was saying Axon Energy. It doesn't really make any sense. Axon has nothing to do with energy. But I also wish it wasn't Axon Enterprise. Daniel and others, every business is an enterprise. I'm not sure or clear why Axon needs to have enterprise on the back end of its corporate name. So here's a quick question for the Smith family founders of Axon. Do we need the enterprise? Can we just shorten at some point to Axon? I actually think that would be stronger from a branding standpoint. And it would cause me not to make silly mistakes like the one I made apparently all last month's mailbag long. I want to thank Daniel Trindade for correcting this Fool. Even as I try to end this week's podcast, in my ear, my producer Heather Horton lets me know, David, there actually is an Axon Energy. It's out there. Look it up. Indeed, I'm looking I'm on the web right now, just google Axon Energy Services, and you're going to see this is its own company, but it's not ticker symbol A-X-O-N. It's not Axon Enterprise. It looks like it's based in Houston, Texas. Anyway, I sit I'm going to say doubly corrected. I blew Axon Enterprise last month, and I wouldn't want anyone to think Axon Energy isn't a thing because it is. Well, from military mathematicians who score zero, they didn't double underline to how Progressive became a Rule Breaker in the otherwise staid world of insurance, to some of our favorite words, to making sure your portfolio reflects your best vision for our future. Thanks for joining me this week and really all march long on this mad, fun month. It was where our Whimsy took us. Fool on. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. David Gardner has positions in Amazon, Berkshire Hathaway, PayPal, Starbucks, and Tesla. The Motley Fool has positions in and recommends Amazon, Axon Enterprise, Berkshire Hathaway, Microsoft, Nvidia, PayPal, Progressive, Starbucks, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, long January 2027 $42.50 calls on PayPal, short January 2026 $405 calls on Microsoft, and short March 2025 $85 calls on PayPal. The Motley Fool has a disclosure policy. "Rule Breaker Investing" Mailbag: Chalkboard Wisdom and Favorite Words was originally published by The Motley Fool
