“Motley Fool Money” Fall Preview for Investors

In this podcast, Motley Fool senior analysts Emily Flippen and Jason Moser discuss:

Getting ready to “eat the volatility.”
Why they’ll be watching holiday shopping and the Fed’s language.
Meta Platforms and Lululemon need a strong end to the year.
Capital allocation moves they want to see.
Two stocks that are still expensive (despite their recent drops).
Two stocks looking attractive at their current price.

Best-selling author Dan Pink shares insights from his latest book, The Power of Regret: How Looking Backward Moves Us Forward, including:

How embracing regret can improve our lives.
Key lessons for investors.
What Julius Caesar and Elmo can teach us about self-reflection.
For more about Dan and his latest book, visit http://danpink.com

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

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This video was recorded on September 2, 2022.

Chris Hill: How do investors celebrate the end of summer? By getting ready for the rest of the year. Motley Fool Money starts now.

It’s a Motley Fool Money radio show. I’m Chris Hill joining me on the show, senior analysts Emily Flippen and Jason Moser. Good to see you both.

Jason Moser: Hey, hey.

Emily Flippen: Hey Chris.

Chris Hill: It is our fall preview. We’ve got thoughts and predictions for the last four months of 2022, we will take a closer look at stocks and trends to watch. But let’s start with the market in general. Here’s how the major indices have done through their first two-thirds of the year. Dow Jones Industrial Average down 12 percent, S&P 500 down 16 percent and the Nasdaq down 24 percent. Jason, let me start with you. I know we’re long-term investors, but how are you feeling about the rest of this year?

Jason Moser: Well, how am I feeling about the rest, I feel like we probably need to buckle up. I feel like the rest of this year is probably going to be a lot like the first part of the year. Perhaps we see a little bit more certainty develop as we see the Fed strategy play out here. Maybe that was a little bit more of a question mark at the beginning of the year, but it does feel like we are just having to more or less eat the volatility so to speak. Now with that said, I don’t look at this stretch as a time where investors really should be looking to bury their heads in the sand either. I mean, we hear the narrative, I think every year we talk about it too, is September historically, it’s a bad month for stocks. That may be the case. The data certainly is there to tell us that that is a challenging month, but I would argue that if it’s a bad month for stocks, well then that means really, it’s a good month for investors.

Now, I want to make sure I qualify that. Investors. Not traders. I mean, I’m talking about investing, that net buyer mentality that Warren Buffett often speaks of. If you are an investor and you have the luxury of being able to take the long view, investing with a strategy of five years and longer. I think you need to be looking at these stretches as the times where real money is made. I mean, we go back to 2008, I think is a great example. You think this is a tough time. I mean, 2008 was brutal and I think the market was down something like 36.5 percent for the year, so it can always get worse. But I mean, when you look at the market’s performance since then, you’re talking somewhere in the neighborhood of 350 percent returns since then, right now that’s from the bottom of 2008. But the point is that that was precisely the time where you don’t want to be burying in your head in the sand. That was precisely the time where you wanted to be investing and I viewed this period very much the same way, it just requires being able to take that longer view.

Chris Hill: Emily, how are you feeling?

Emily Flippen: Well, I’m actually feeling pretty good and it might be because it’s Friday, we’re headed into the long weekend here, [laughs] but I have plans to get this [inaudible] that I’ve been thinking about for a week. I’m in a pretty good mood. But when it comes to the market in general, Jason said it best, we’re not in the business of predicting market bottoms and thank goodness that were not, because our track record would be abysmal if we were. There a lot of great minds that are saying, look, we’re looking at another 20-30 percent drawdown headed into the back half of this year, even into 2023. I have to say, I’m feeling pretty good because even if that does materialize, it’s a great time to be investing, even if we’re looking at a short-term drawdown of 20-30 percent from where we are now in the broader markets, we know that markets go up over time and the money you invest today will be well-suited to provide long-term returns in the future.

Chris Hill: Emily, thank you for reminding everyone, it’s a long week at the market is closed on Monday for the Labor Day holiday. Let me stick with you. What are you most interested to watch over the next four months?

Emily Flippen: Well, counterintuitive to what I just said, I’m actually really interested and looking at holiday shopping. That’s because we just heard from retailers that there’s this big question mark about what consumer sentiment is going to look like at large, we had the Fed rate hikes, inflation rising, but employment is still showing a really strong economy and I’m really interested to see what the buying habits of people will look like in the back half of the year because we’ve seen inventory levels rising at a lot of retailers, they’re betting on strong consumers.

Chris Hill: Jason, what are you going to be watching over the next months?

Jason Moser: A lot of the NFL, Chris, plenty of football [laughs] we’re getting ready to get it kick-started here next week. But I’d imagine this question really revolves more around investing. Let’s go in that direction. Honestly, I feel a little bit odd saying this, but the Fed’s language, this is going to be something I think that really will be almost entertaining to watch play out over the course of the remainder of this year and even into next. I mean, as someone who doesn’t, I don’t let the Fed dictate my investing strategy, but I also think it’s key that they really see this thing through. They got it wrong with transitory. That was something we heard them espouse for a while and they got it dead wrong. Now, that’s OK. I mean, when you get something wrong, you get out there, you admit it, you figured out how to make it better.

It cost them some time, but I think they’re on the right track now. I mean, I feel like we flooded our economy with a ton of relief capital, that’s done. The reasons that it was done for you could debate until the cows come home. But what’s done is done, the impacts of that need to be accounted for and that’s what we’re going through right now. For me, I feel like they’re doing a great job of holding steady. I really just want to see the Fed continue to be consistent with the language that they’re getting out there. Powell talking about possibly some pain coming with this strategy. Sometimes you just got to suck it up. You got to take a little bit of short-term pain for that longer-term gain. I think they’re doing the right thing. I really want to see them maintain the consistency in that language and adhere to this strategy that they’ve employed so far because I feel like it’s the right strategy. I feel like it’s working. It’s just going to take some time. It’ll take a little bit of pain.

Chris Hill: Emily, there are a lot of stocks that are down year-to-date, there are a lot of companies that are looking to turn things around, but who especially do you think needs a strong end to 2022?

Emily Flippen: Well, I’m about to turn this question around on you Chris, [laughs] because my answer here may not be what you’re expecting. I think Lululemon actually needs a strong end to 2022 and that is counterintuitive, because they’ve had an incredible year so far. They came out with quarterly reports earlier this week that showed total comps rising 23 percent, well ahead of what Wall Street had estimated. Direct-to-consumer revenue rising to 42 percent of total sales. Incredible performance from Lululemon. But the problem is that their inventory rose 85 percent in the quarter and if you look at their inventory over the last three years, it’s risen by a 38 percent CAGR over the past three years. Headed into the back half of the year, they’re betting really big that they’re going to be able to sell this inventory in at full price and that’s an aggressive statement. When we’re seeing other retailers having to wholesale their inventory.

Chris Hill: One more reason to watch holiday shopping. Jason, what about you? Who needs a strong into the year?

Jason Moser: I mean, not a company that I own shares in, it’s one that I’ve recommended though in the augmented reality service, it’s Meta. Looking at where Meta is today, I mean, it’s had obviously a very difficult year, shares are down 50 percent, year-to-date. Stock is now valued at around 14 times earnings, which seems pretty glass half empty for such a large company with such a massive network. But I do get it. I get that glass half empty perspective. I mean, they’re making this big pivot to the metaverse. That is something that is still very unproven. We just don’t know how that ultimately is going to impact the business. They’re investing a lot of money upfront there for something that may or may not pay off. We just don’t know. That is the uncertainty, I think that’s reflected in the share price today.

We saw news of a chip deal with Qualcomm and building out their metaverse aspirations. I think that’s a good sign. Saddling up with a company like Qualcomm gives gives you a lot of opportunity there. But we’ve got an election coming up here in November, Chris, it’s obviously a very polarizing time in this country. There’s a good chance this company could be square in the headlines again and not for good reasons. They are already dealing with aftershocks from the 2020 election. How they deal with information on their sites, censoring some stuff, pushing other stuff. It gets people in a real tizzy. [laughs] That’s understandable and so I look at their pivot to the metaverse and I think they could separate themselves from that kind of stuff. But it’s going to take some time, much like Powell’s speech there. It’s going to take some time and it’s probably going to take a little bit of pain. For Meta, it feels like it’s going to get worse before it gets better.

Chris Hill: After the break, our fall preview for investors continues with a couple of stocks that are starting to look attractive. Stay right here. You’re listening to Motley Fool Money.

Welcome back to Motley Fool Money. Chris Hill here with Emily Flippen and Jason Moser. It is our fall preview special for investors. Emily, we’re going to play a round of fill-in-the-blank. Let’s start with this. When is blank going to spend money on blank? Lot of optionality there. You can take it in any direction you want.

Emily Flippen: I’ll take it in this direction. When is Zoom going to spend money on anything? [laughs] Zoom at this point is like a dragon just sitting on its horde of cash refusing to let go of even a single cent, they have more than $5.5 billion of cash sitting on their balance sheet right now. I have been twiddling my thumbs, waiting for Zoom to make a big move for a while, and I’ve always assumed that it was going to be a large, meaningful acquisition. But at this point with their slowing growth, now I’m wondering, should they just start paying a dividend to shareholders? [laughs] Because they should just lean into the slower growth reality. Shareholders might actually reward that type of action with a share price increase.

Chris Hill: I wonder how that move would be received because what you said there makes perfect sense. Although I feel like Zoom is a young enough company and recently enough, a growth company where there’s some investors, who I think would freak out and not in a good way that they would start paying a dividend.

Emily Flippen: I say it a little tongue-in-cheek, but I agree with you. I think there are people who own Zoom for its growth potential, who would think to themselves, this is no longer a great fit for my portfolio, but I do think there’s a whole different class of investors who would look at Zoom’s really nice, strong competitive moat, great, inspiring leadership team, strong technical advantage, plus pretty slow, predictable growth and think to themselves, if they pay out even a portion of their free cash flow in the form of a dividend, this could be a very lucrative income investment.

Chris Hill: Jason, fill-in-the-blank.

Jason Moser: Well, I was going to go with Salesforce here. When are they going to start spending money on themselves? Salesforce is a business that has for a while here now made investments and acquisitions and those acquisitions have boosted the share count outstanding, right, as they use some of those shares as currency. It feels like the share price represents a reasonable value today and low and behold, this most recent quarter Salesforce announced their first share repurchase authorization ever, a $10 billion share repurchase authorization. That was what I wanted to go with. Now Chris, what I’m going to go with because let’s face it, Salesforce is doing that so congratulations, hats off to you, Marc Benioff.

I think you reminded me that I actually talked about this last year. I think this same show in this same question and I’m going back to it, Chris, because one year later and nothing has changed. When is Chipotle going to invest in breakfast? When are they going to spend money on rolling out breakfast on a national scale? It just seems to me to be such a no brainer. You look at the QSR and the fast casual markets, they combine for a US opportunity of around $12 billion today in breakfast and that’s expected to grow six percent annually or better over the next several years. Chris, the International Journal of Gastronomy and Food Science, they found that coronary heart disease increases, the chances of CHD increased by 27 percent among the North American population who regularly failed to have breakfast. Chipotle, you can save lives. I implore you. Get the breakfast burrito out there, we want it. We want it!

Chris Hill: Emily. A lot of stocks have pulled back in their share price, but it doesn’t mean they’re necessarily cheap, so fill-in-the-blank, don’t let the recent drop fool you, blank is still an expensive stock.

Emily Flippen: Well, I don’t know how I’m going to follow breakfast burritos at Chipotle which I agree we’ve all wanted for awhile, but that is not an expensive stock. In fact, I say Chipotle is one that I think qualifies in the opposite direction. But there is one that comes to mind. I would say, don’t let its around 30 percent drop in 2022 fool you, Airbnb is still an expensive stock. Now this is an incredible business that has gained a ton of market share. Lots of love across from many analysts here at the Fool, but the business still trades at 23 times cash flow over 50 times earnings now it’s growing substantially nearly 60 percent year-over-year in the most recent quarter. But that growth has aggressively slowed down. I do think that Airbnb may be headed for a post pandemic pullback year facing the slowing reality that other software and other businesses have headed out of the pandemic. They’re benefiting a lot from travel that has been backlogged. I worry about what their revenue growth is going to look like headed into 2023 as that growth continues to substantially slow down. I think if revenue growth does slow down here to around 20-15 percent, then you could be looking at a valuation contraction.

Chris Hill: Jason, what about you?

Jason Moser: Well, we saw just the other day here, Okta selling off on its recent earnings report, something like what, 32, 33 percent for the day and I know the knee-jerk reaction is up. That’s just an overreaction, buy on the dip. I would be careful there. They recorded a decent enough quarter, but you’re still looking at a business that has no profits to speak of. They do not make any cash flow to speak of. Stock-based compensation is still a just massive percentage of total revenue. Even after the sell-off, the stock is still valued at around 6.5 times sales. Now, please don’t misunderstand. I’m not saying Okta is a bad business, but we’re talking about a stock that still looks expensive today and I think that when you consider everything that’s on the table for this business right now, they’re having difficulty with this Auth-0 acquisition. Integrating Auth-0 into their business and they’ve seen some attrition due to that, they are migrating over to a single customer relationship management solution and that is something that should help.

But ultimately, what this all has resulted in is they took that revenue target off of the table that they had for fiscal 2026, I think they were targeting four billion dollars in revenue for 26. They went ahead and they took that off the table as they reassess the state of the business and where they feel like they can go over the next few years. Again, I think it’s not a bad business, don’t get me wrong, but clearly, things have changed a little bit. This could be a little bit of a slower growth story going forward, we’ll need to learn more, so don’t look at that sell-off and think that Okta is automatically a cheap stock today.

Chris Hill: On the other hand, Emily, blank is starting to look much more attractive.

Emily Flippen: Chewy. Oh my gosh, the basis is down 58 percent this year, 20 percent this month alone selling off this week after earnings. But all the customer fundamentals are still very much intact. Net sales per active customer grow healthily, an 11 percent revenue growth while not meeting the market’s expectation, is nothing to scoff at in this environment.

Chris Hill: Jason, what about you?

Jason Moser: Yeah, very difficult time to be in enterprise software, but I do feel like Twilio now is starting to look more attractive than ever. I think when you look at the bigger picture, management’s very competent, their growth trajectory and the profitability goals for 2023 and beyond. More than 275,000 active customers now versus 240,000 just a year ago, and they continue to call for organic growth of around 30 percent for this current quarter. Ultimately, it’s the market they serve and communication, it’s sticky, it’s essential they do a really good job of it and now you’ve got a business that’s trading. It’s valued at around 3.5 times sales, which I wouldn’t argue is cheap, don’t get me wrong, but profitability is just around the corner, and this is an important business for a lot of its enterprise customers.

Chris Hill: We’ve got about a minute left. Let’s end with this one. Early next year Gatorade is launching a new energy drink called Fast Twitch, which contains twice the caffeine as 24 ounces of Red Bull. Fill-in-the-blank, Emily, forget Fast Twitch, the consumer product that I want to see is blank.

Emily Flippen: Fast Nap. [laughs] A drink that contains a double dose of Nyquil and melatonin, that’s what I need something to knock me straight out.

Chris Hill: Not where I thought you were going. Jason, what about you.

Jason Moser: I know everybody would just say, hey man, you’ve got your phone, but hey, how about a little Traeger TV? Let’s put a TV screen in the Trager grill like on the trigger. This is a high-tech device already, so let’s just incorporate some video on there. You could watch some grilling lessons, you might be able to watch the game while you’re smoking something. If we want to really take it to the next level, let’s throw a fridge in that puppy while we’re at it at that point, do you even really need to go anywhere?

Chris Hill: Heat resistant television though right?

Jason Moser: Sure. Oh, yeah, absolutely.

Chris Hill: Jason Moser. Emily Flippen. Thanks so much for being here.

Emily Flippen: Thanks, Chris.

Chris Hill: Up next, we’re going to revisit one of our most popular interviews of the year with best-selling author Dan Pink. Stay right here. You’re listening to Motley Fool Money.

Welcome back to Motley Fool Money, I’m Chris Hill. Dan Pink is the author of multiple best-selling books, including Drive, To Sell Is Human, and When: The Scientific Secrets of Perfect Timing. His latest book is the Power of Regret: How Looking Backward Moves Us Forward. Earlier this year I got the chance to talk with Dan and until I had read his book, I had never really thought of regret as being something with great power so I started the conversation by asking what got him interested in this topic.

Dan Pink: I realized that I had regrets of my own, and if there was a catalytic moment, and you can certainly relate to this with two kids in college. I had my elder daughter graduated from college in 2019, and I met her at graduation and I’m having this out of body experience where I can’t believe this kid is old enough to graduate from college. I also can’t believe that I have a kid who’s graduated from college because I’m like 24. [laughs] I’m having this body experience and I’m thinking about, well, what was my college like, and I started thinking about all these regrets that I had. That I didn’t work hard enough, that didn’t take enough risks. One that really bugs me is that I felt I wasn’t kind enough.

When I came back, I just sheepishly mentioned it to a few people, and instead of the recoiling people leaned in, to my surprise, they really wanted to talk about this. So I started looking at some of the academic research on it. And I ended up actually putting aside a book that I was writing at that moment and spent a month researching regret and then wrote an entirely new proposal and how to go to my editor and say, I got some good news and bad news. Bad news is the book you think I’m writing, I’m not going to do that anymore. The good news is that I think I have something better.

Chris Hill: Yeah, I did have that thought because you and I have talked about this before. Remember talking to Scott Galloway about this. It doesn’t matter how successful a non-fiction writer is when they go [laughs] to their publisher with, “Here’s my idea for a book”. As often as not the publisher and be like, “Oh god, really, you want to do that?” There’s no trust in the track record. It’s nice to know that they responded the way they did. As you indicated there is a lot of research on this topic. You get into some of the research and you book, but you did research of your own. Can you share your thought process around the research that you originated and how you went about it?

Dan Pink: Sure thing. Yeah, I’m glad. Thanks for asking about that, because I’m psyched about that. I did look at about 50 years of research and mostly in social science, some neuroscience and medical science on regret. But I also did two projects of my own. One of them was something that I called the American Regret Project, where working with a company called Qualtrics I put together the largest public opinion survey of American attitudes on regret ever done. We surveyed 4,489 Americans, beautiful, gorgeous representative sample, and to ask a whole bunch of questions about American attitudes about regret in part to try to understand what demographic differences there were. At the same time, I did something else which I called the World Regret Survey. Where, I guess, basically I just set up a website and invited people to contribute their regrets hoping to get several 100. And I got, well, we’re over 17,000 now. Ended up with 16,000 regrets from 105 countries, and those proved just an incredible, incredible source of insight and emotion and in a weird way, inspiration.

Chris Hill: You include some of them in the book. Every chapter begins with a few regrets that actual people have said. I was struck by the fact that there’s such an enormous range of things that people regret. Some people regret what on the page seemed like very big decisions. But I was really struck by the people who have a regret of something they did long ago. It seems like a small thing, and yet it’s stuck with them. Maybe that gets to the power of regret that it doesn’t matter how small it is, it can stick with you.

Dan Pink: You know what? Most people, it’s a fascinating insight that you’re making there, because very few people talked about regrets in terms of their size. The fact that it happened and it was meaningful to them is enough. I think what’s interesting is, your insight is really powerful here. While there is a wide variety of regrets about the domains of life, so we have people, one of them that really stuck with me was 70 something year old woman in New Jersey who regretted stealing candy when she was a kid. Sixty years later she’s still bugged by that.

We have people with regrets about careers, in health, and romance, and family and so forth. They run the gamut of the whole human experience. But what I’ve found in looking at those, that giant trove of regrets was that deep down around the world, it’s amazing, people kept expressing the same four core regrets over, and over, and over again, irrespective of the domain. That took me to a place through this avenue of regret that I didn’t expect to reach.

Chris Hill: This is where you and your team really build on the research of the past 50 years with categorizing the four types of regret: foundation, boldness, moral, and connection. Did that just become apparent over time? Like, oh, we’re starting to see this pattern and it breaks into these four groups.

Dan Pink: Sort of. I’d love to tell you a story of how I bolted upright in the middle of the night and had this epiphany about the four core regrets. But it was much more undramatic and laborious than that, as I was just reading through these regrets and trying to categorize them and thinking of categories on the whiteboard. But the other thing is that these two different pieces of research work together. For instance, when I did the quantitative survey, I thought I was going to get at the question of what people regretted. I had them categorize their regrets by domain. What I found is what researchers have been finding for 50 years is that they regret a lot of things just as you’re saying, they span. It’s like I got it so unsatisfying.

I started thinking a little bit differently about the qualitative regrets. There I started seeing some patterns. Let me give you an example because I think that it makes more sense in the specific. Let’s take a regret. I know that a lot of the Fools are entrepreneurs. I’ll give you an entrepreneurial idea here, Fools. Start a travel agency that serves people who went to college who regretted not studying abroad. I’ve got hundreds of those. Think about that regret. That’s called out in education regret. Then I’ve got people, hundreds around the world who have a regret that says, I’ve always wanted to start a business. I’ve always wanted to go out on my own, but I never had the guts to do it. That’s a career regret. Then I have once again, hundreds around the world who almost with the exact same formulation, x years ago, I met a man/woman whom I really liked. I wanted to ask him/her out, but I was too chicken to do it, and I’ve always regretted. That’s a romance regret.

But to my mind, as I started seeing this, those are all the same regret. Those are all regrets about boldness. Those are all regrets about being at a juncture in your life and having a choice. Do I play it safe or do I take the chance? When people play it safe, they often regret it, not always. When they take a chance, they don’t always relish it, but it’s pretty overwhelming that we regret not taking that chance. That’s a boldness regret. To me, all these four core regrets reveal something. Again, it’s weird, Chris. Because I didn’t expect to go there. But all these four regrets in a way reveal like what makes life worth living. One of the things that makes life worth living. One of the components of a good life is like doing stuff, trying stuff, learning, growing, leading a psychologically rich life, and so boldness regrets are one of the core, are one of the really most significant regrets that people have.

Chris Hill: I think that’s probably the category that most stock investors can identify with. Because the two of the biggest regrets when it comes to investing are, I should have bought this stock earlier or I should not have sold this stock. The reason we don’t buy the young upstart, unprofitable company is because of the risk factor involved in it. The reason we sell that young unprofitable upstart company after it’s gained 30 percent in the year, it like oh, it’s playing it safe instead of being bold.

Dan Pink: I think in many ways these four core regrets go to not only how we invest, but to some extent why we invest. A good example of it which you see over and over again. I think anybody who’s listening to this probably doesn’t have many in this first category, foundation regrets. Boldness regrets are if only I had taken the chance. Foundation regrets are if only I had done the work. Well, that means that people who regret not studying hard enough in school, a lot of those, smoking, huge numbers of people regret smoking, not taking care of their health, and not saving money. One of the things that comes out with, obviously Fools know this, is the power of compounding interest in both the literal and metaphorical sense. Foundation regrets are these things where you make small decisions early that seem to have no huge consequences. But overtime they accumulate and then they become unstoppable.

I have one guy who I found very poignant, he says, I regret not saving money diligently ever since I started working. He’s 43. “It’s nearly crushing everyday to think how hard I’ve worked over the last 25 years, but financially I have nothing to show for it.” What does that tell us though? I think it’s something Fool investors understand. Is that an element of a good life is stability. We want to have some kind of stable platform. When our lives are unstable, when our lives are chaotic and unpredictable, that drains our ability to lead a satisfying life. Foundation regrets are a challenging one because the nature of regret requires some agency on the part of the person who has the regret. They have that, regret is your fault not someone else’s fault. But with foundation regrets it can be kind of challenging. It’s harder to save if you graduate from college burdened with massive student loans. It’s harder to do well in university if you went to a secondary school that wasn’t very good. With foundation regrets, we have to be a little bit careful with agency, but they’re really, really important. Having that stable foundation is extraordinarily important to people.

Chris Hill: More with best-selling author Dan Pink right after the break. Stay right here. You’re listening to Motley Fool Money. Welcome back to Motley Fool Money. I’m Chris Hill. This Labor Day weekend, we’re revisiting one of my favorite conversations of the year with best-selling author Dan Pink. His latest book is The Power of Regret: How Looking Backward Moves Us Forward. One of the things he writes about in the book is how we can use our regrets to think in more positive ways. One of the techniques for doing that is something called self-distancing. One of the reasons Dan is such an engaging writer is because of his ability to find creative role models to use as examples of self-distancing.

The self-distancing is such a great strategy. I have to confess though. I was surprised reading your book to see the comparison between Julius Caesar and Elmo. [laughs] I was not expecting that. But you’re right. Julius Caesar, Elmo, they’re big for referring to themselves in the third person.

Dan Pink: They both talk about themselves in the third person. Spanning a long amount of time and arguably a span of species suggests that this technique is somehow useful to us. This is actually an important thing and sort of how we analyze human beings. It’s like we think about something like regret. Why? Regret is the second most common emotion that people express overall, it’s the most common negative emotion that people express. Why is that? It must serve some purpose. All of us wouldn’t be feeling bad if there wasn’t a reason for it. The reason for it, very clearly in the research, is that if you deal with it right, it’s instructive, it points a way forward. Never looking backward is a colossally stupid idea. What you want to do is you want to look backward, but you want to look backward in a particular way that allows you to understand your choice, sort of unburden yourself of that choice, extract a lesson from that choice and apply it going forward.

Chris Hill: Is part of the process trying to do a better job in setting our own expectations? I just think about the research you have in your book around Olympic athletes, and in particular, Olympic medalists, and how, across the board, people who win the bronze medal are happier than people who win the silver metal, even though the silver medal is a greater achievement. But the bronze medalist, in some cases, it’s people who are just happy that they got a medal at all. So maybe expectation-setting is a part of that.

Dan Pink: It is a big part of that. What that shows is that, again, our cognitive machinery is programmed for that kind of counterfactual thinking. There are two different ways to do that counterfactual thinking. One is to imagine how things could have been better, and that hurts, that’s what regret is, but it’s instructive. The other one, which is actually an OK tactic sometimes, is to imagine how things could have turned out worse. That’s what I call an upward counterfactual. Regret is what I call an “if only.” But the downward counterfactual, how it could have turned out worse is an “at least.” The silver medalists are saying, I talk about a bike race in the book, “If only I had pedaled a tiny bit harder, I’d have won a gold rather than a silver.” Whereas the bronze medalist is like, “Oh my God, at least I didn’t slip from the lead like that other rider and lose out on the medal stand altogether.” I describe this race, which I didn’t see live, but I saw a video of it. When they come over the finish line, the silver medalist, who just placed second in the Olympics, she has her face buried in her hands. The bronze medalist is exultant. This tells us something now, how do we apply that going forward?

For certain kinds of regrets, particularly regrets of action. We can use that “at least” mechanism. I saw that a lot in the database of regrets. You had people who’s basically finding a silver lining. That can make you feel better, doesn’t necessarily mean you do better, but it can make you feel better and feeling better is OK sometimes. The most common one of that in the database was, once again, dozens, if not hundreds of people, I think they were all women who said, “I really regret marrying that idiot. But at least they have these two great kids.” That’s the silver lining. So you can take certain kinds of regrets and at least them. Certain kinds of action regrets you can also undo. You get a tattoo and you’re like, “Oh, that was a stupid idea.” You can have the tattoo removed.

Chris Hill: That’s one of my favorite stats in your book. For all the people touting, they have no regrets. The tattoo removal business in America is a $100 million a year business.

Dan Pink: Yes. Maybe your analyst should be looking for a publicly held tattoo removal technology.

Chris Hill: When you and I talked about your last book When: The Scientific Secrets, you said the research changed the way you live your life.

Dan Pink: Yeah.

Chris Hill: When you make medical appointments, for example, they are always in the morning. By the way, having read your last book, I’m the same way. All medical appointments are before noon.

Dan Pink: All important medical appointments, like I’ll do a routine teeth cleaning in the afternoon. Although, because I think your listeners want to know this, I actually scheduled my next teeth cleaning for 8:00 AM, in case you are wondering about my dental hygiene here.

Chris Hill: Good to know. Has your work on this book, the research you’ve done, any changes for you personally?

Dan Pink: Yeah. Several. I’ll tell you the biggest one. It has to do with connection regrets, which was the biggest category regrets. Connection regrets are if only I had reached out and I heard so many stories all over the world of people who had a relationship or should have had a relationship and it came apart. Not romantic relationships, but relationships with parents, or kids, or siblings, or other relatives, or friends. My gosh, Chris, I mean, so much stuff about friends. These relationships come apart in profoundly undramatic ways. [laughs] They just drift apart. What happens is, someone says, “Oh, I should reach out, but it’s going to feel really awkward,” and the other side won’t care, and they’re wrong. They’re just flatly wrong on both counts. It’s less awkward than you think, and the other side almost always cares.

For me, the big takeaway, and it’s one of the things I’m actually trying to work on this year, is to just reach out more to people who were friends, who I knew, who I liked, who were part of my life at one point. I’ve always resisted that because I was like, “It’s going to be really awkward, and they’re not going to care if they hear from me.” This disabused me of that to the point where, like my advice to myself that I’m trying to follow, but also to others is that, if you get to a juncture in your life and you’re asking yourself, “Should I reach out?” The answer is yes. If you’ve gone to that juncture, you’ve answered the question. I think, but to me, a huge takeaway from hearing all these regrets from around the world is always reach out.

Chris Hill: The book is The Power of Regret: How Looking Backward Moves Us Forward. You can find it wherever you find books. That’s going to do it for this week’s Motley Fool Money radio show.

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, so don’t buy or sell stocks based solely on what you hear. The show is mixed by Rick Engdahl. I’m Chris Hill. Thanks for listening. We’ll see you next time.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Chris Hill has positions in Airbnb, Inc., Chewy, Inc., Chipotle Mexican Grill, Okta, and Twilio. Emily Flippen has positions in Airbnb, Inc., Chewy, Inc., and Okta. Jason Moser has positions in Chewy, Inc., Chipotle Mexican Grill, and Twilio. The Motley Fool has positions in and recommends Airbnb, Inc., Chewy, Inc., Chipotle Mexican Grill, Lululemon Athletica, Meta Platforms, Inc., Okta, Qualcomm, Salesforce, Inc., Twilio, and Zoom Video Communications. The Motley Fool has a disclosure policy.

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