Market Cap Game Show: Andy Cross vs. Bill Mann

In one corner is Bill Mann and in the other is Andy Cross, both Motley Fool investing gurus.

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This video was recorded on March 20, 2024.

David Gardner: World championships are common in sports. The World Cup, the Super Bowl, the World Chess Championships. Yes, chess is a sport just asked the International Olympic Committee. Is the Market Cap Game Show a sport? Maybe. But in order to be recognized as such, my thinking goes that we need to have a world championship on an annual basis, and if you’ve been around the past couple of weeks, you know it’s all come down to this. This week we will name our first ever Market Cap Game Show. Did I say game? I think I mean sport world champion. We have our own March Madness on this podcast and past champions, Andy Cross and Bill Mann have survived to advance to the granddaddy of them all, our first ever world championship, which happens now only on Rule Breaker Investing.

Welcome back to Rule Breaker Investing. In week 1 of this month as we kicked off our final four, Andy Cross, survived an epic showdown ending with Emily Flippen in our first semifinal, winning six points to four. In week 2, last week, we featured Bill Mann grabbing the early lead and never looking back to feeding the OG of the Market Cap Game Show past champion Matthew Argersinger, 7-3. Therefore sound the trumpets, Rick Engdahl Andy Cross and Bill Mann face off for our first ever Market Cap Game Show world championships. Gentle Fools. Welcome.

Andy Cross: Hi, David.

Bill Mann: Hey, David.

David Gardner: Guys, you need to bring a little bit more for our world Chairmanship. Welcome.

Bill Mann: David, Bill Mann is very excited here for the intergalactic championships at the Market Cap Game and he really does respect his opponent Andy Cross but Bill Mann feels really, really good about his prep. It’s all about the process, David, that’s what I’m feeling is going to carry me through today.

David Gardner: All about going into the third person, which is very athletes citric of you. Well done Bill, Andy, great to have you here as well. I’m going to turn to you first, Andy. Is this your first ever appearance in a world championship of any kind?

Andy Cross: This is the first appearance in a world champion. I have competed directly against a world champion and that was quite the event. I came up on the short end, but I did compete against one, Jim Furyk in Lancaster, Pennsylvania playing golf. Jimmy, if you’re listening out there and love you and great career on the PGA.

David Gardner: That is fantastic. Jim Furyk, he wore a green jacket, I’m pretty sure.

Andy Cross: No, he won the US Open and I played one of my best rounds of golf and I shot 76 and Jim beat me by nine shots. He shot 67 and just destroyed me.

David Gardner: That is great and that’s pretty close to a world championship in our own way. I mean, most of us would never get anywhere near that.

Andy Cross: Not completely, other than seeing the US women win the World Cup in soccer when they hosted it here and the Rose Bowl, that’s the closest I ever got to a world championship.

David Gardner: Bill Mann, is this your first ever appearance in a world championship of any kind?

Bill Mann: Well, it depends on how you feel about the Ravenscroft school Spelling Bee from third grade. Whether it was the world champion, Ravenscroft Spelling Bee championship, because in third grade I did in fact win the world championship of Ravenscroft school spelling bees. In fourth grade, in the opening round, I misspelled the word go out of excitement, so that was an early exit, but in third grade.

David Gardner: How did you spell it? G-E-A-U-X-X

Bill Mann: I did it Louisiana style. No. I said, G-O-O, go. When you say the word again, you’re finished. Just excited, not as excited as this though.

David Gardner: Let’s get it on. Andy and Bill, it’s natural to look across Fool studios right now and see the other, guy, the other Fool here, and think that’s your competitor, but he’s not the only one. Who else is your competitor?

Andy Cross: The listener?

David Gardner: Exactly, our listeners at home. Thank you, Andy. 13 is the combined score that won, the first two weeks of March, Market Cap Madness. We had a sixth spot, Andy you threw that up on the scoreboard. We had a seventh spot last week from you Bill. Our players at home, and they far outnumber us. If you’re at 13 or higher, you are right there with us competing for our world Chairmanship. In fact, I’d say 10, 11, or 12, you got a shot.

Bill Mann: You’re in the game.

David Gardner: Thank you for prompting that, Andy, let me turn to you, Bill, could you briefly define market cap? What is it? Why do we care about it?

Bill Mann: The market cap is the size of a company. Basically, the share price times the number of shares outstanding. We hear all the time people say a stock is expensive because of the share price, but that share count is just as important.

David Gardner: Very well said. That is the story of market cap. Anybody who’s been with us through March already knows that, but we never know who will tune in for a world championship so I wanted to make sure we defined our terms right there. As we crank up our special Market Cap Game Show, world Championship music, let me just briefly remind new listeners, new players how this works. I’ll be mentioning the stock, neither Andy nor Bill knows what stock is coming.

I’ll turn to one of them to talk about whatever stock they don’t know what’s coming, and that Fool will do his best to state a numerical range within which the market cap falls. The other contested, and all of you, you playing at home, will simply say I agree, meaning that was accurate, the stock’s value falls inside that range or I disagree.

I think it’s outside that stated range, so you simply agree or disagree and if you get it right, give yourself a plus one. That’s the Market Cap Game Show. We’re focused on the real market caps of real stocks. Nobody knows what’s coming, a perfect score would be 10 which could be unforgettably amazing achieved by anyone here or elsewhere playing along in our first ever world championship.

David Gardner: Bill Mann is the host of the Motley Fool morning show on Motley Fool Live. He is a lead advisor for Global Partners, Motley Fool Firecrackers, and Bill is the Director of Small Cap research at our company. Bill, welcome.

Bill Mann: Thank you, David.

David Gardner: Bill, some companies have been around a long time. Any come to mind for you when you think of America’s oldest, longest-standing companies still traded actively on exchanges today?

Bill Mann: I believe American Express is among the oldest.

David Gardner: That is true.

Bill Mann: Yeah.

David Gardner: In fact, surveying a list of some of these, many of them are financial or actually just flat-out banks, so J. P. Morgan, Wells Fargo, Citigroup, I do see that Pfizer; I didn’t know this was founded in 1849 as Charles Pfizer & Company, which I had no idea. Procter & Gamble, sure. Wow, Colgate-Palmolive is fairly well into its third century of operations, having been founded in 1806. One of them though Bill, is a railroad founded on July 1 of 1862, the Union Pacific Railroad, back then, by the way, rail and road were two different words. Today, Union Pacific continues to be traded on our exchanges where its ticker symbol is UNP.

Bill Mann: I wonder if railroad or baseball, were contracted into one word first.

David Gardner: Yeah, and that’s what linguistics shows us, is that often we start with words separate and then we start to smash them together as we use them frequently. That is true of language. Oh my gosh, stock Number 1 is a throwdown round. To remind our players at home, both Bill and Andy will now write down their market cap range for Union Pacific. Pencils out Fools.

Again, all you have to do as a player at home is once Bill and Andy state their market caps, decide which you want to go with. Is Bill’s range, your ticket to ride, or would you rather hang out with Andy on his freight train to glory. So all you do at the appointed time, you say Bill or Andy, and if you guess right, give yourself a point. By the way, there’s a chance they’ll both be right, especially if they use wide ranges. If they’re both right, the tighter range wins the point.

If they’re both wrong, that would never happen except I think it did happen at least once in both of our semifinal matches. I can’t imagine it ever happening again, but if it did, whoever’s range parameter is closer to the actual market cap gets plus one. Again, this is a throwdown. We do this twice every show. Thanks as always to Sam Stephens for his invention. This is a throwdown stock Number 1 Union Pacific. Bill, I’m going to turn to you first. What is your market cap range? You want to be as tight and as accurate as possible here for the ticker symbol UNP.

Bill Mann: David, Bill Mann is completely thrown by the fact that we’re going to a throwdown round, Round 1. Bill Mann was not prepared for this at all.

David Gardner: Is Bill Mann going to go third person this whole show because that’s going to kill our ratings?

Bill Mann: Bill Mann is going to drop it at one point. Maybe, let’s just say I’m going to drop it right now. I believe that Union Pacific is valued somewhere between $104-121 billion.

David Gardner: $104-121 billion. Thank you, Bill. Turning now to Andy. Andy, what do you got, UNP?

Andy Cross: David, I think Andy and Emily competed in the semifinal and our first was a throwdown, I believe.

David Gardner: That is right. Bill wasn’t listening that week.

Andy Cross: That’s OK.

David Gardner: You’re used to this.

Andy Cross: Nothing less than Bill.

Bill Mann: What you’re saying is that you have an advantage at this point.

Andy Cross: Bill, I would never say I have an advantage against you on almost any.

David Gardner: Smart.

Andy Cross: Except for maybe the golf course. However, we do have the range covered here. I’m going a little bit smaller and I’m seeing $80-110 billion market cap for United Pacific Railroad.

David Gardner: All right. You’ve heard it. You heard Bill’s 104-121, you heard Andy’s 80-110. Players at home, it’s now up to you. Is it Bill or is it Andy? 3-2-1, say it. Well, I said this wasn’t going to happen, but it did just happen again. Both of my players missed with their range the actual market cap of this company which, by the way, is $147.81 billion. Bill, you had a slightly higher range, you went up to 121, therefore, Bill and players at home, if you said Bill, give yourself a point, Bill 1, Andy, nothing. Union Pacific, I first picked that stock for Motley Fool Stock Advisor on September 20th, 2018. Guys, it’s up 68%, which is not bad. Though, it’s 24 percentage points behind the market. It does though, pay a 2.2% dividend yield.

Bill Mann: It’s up against some pretty good competition over that period of time. If you were to tell me that a railroad was anywhere close to the performance of the S&P 500 in a period of time in which the Magnificent 7 has done as well as they have, I would’ve been surprised.

Andy Cross: Union Pacific is not the only one up against some stiff competition. I got here Bill to my right. I got to get my act on.

Bill Mann: I don’t feel good about that round though. I’m going to take the point.

Andy Cross: Yeah, it’s like take the point.

David Gardner: Andy Cross works on Stock Advisor Backstage and with Tom on his everlasting services like Hidden Gems. He’s also the Chief Investment Officer at our company helping our Fool investor teams produce the best guidance and experience for our members. Andy, welcome.

Andy Cross: It’s great to be here, David. Thank you.

David Gardner: Think back to your schooling for a second, if you would, Andy. What was a great year for you at school?

Andy Cross: My freshman year in University, Michigan, it was great.

David Gardner: What made it great?

Andy Cross: New experiences. I did well in school and I was in Ann Arbor, which is a gorgeous town.

David Gardner: Fantastic college town. I’ve been once before, very memorable. During the fall, I don’t know how long fall lasts, probably a good long while. It’s crisp, a turmoil, it was gorgeous. Anyway, when I went to Ann Arbor in the late ’80s.

Andy Cross: Yes, it is beautiful in the fall.

Bill Mann: Which starts in August.

Andy Cross: And ends in August.

David Gardner: Andy, I want you to think about University of Michigan, your alma mater, but you might also think of elementary school or high school. I want you to think of the other people that you went to school with and maybe some of those who’ve led lives of consequence, local kids who made good. Maybe they were the ones voted to be most successful from their high school class, or maybe they were not so voted, and yet maybe they outshined those who were. Did you have any amazing classmates in elementary school or high school or people you knew at college worth calling out right now?

Andy Cross: I do. I graduated tied for third in my high school class and I’m still good friends with the person I tied with, the Number 2 and the Number 1, Tom, Heidi, and Bill. I connected with all of them just recently and they’re all doing well and very successful.

David Gardner: That’s really great to keep up with friends over that long association that’s special. Any famous people from nursery school or maybe even your years in Ann Arbor. Names that would jump out that we’d recognize. You’re like Andy Cross went to school with them?

Andy Cross: No, I don’t think so, not necessarily. Jim I did not go to school with him, I did compete against him.

David Gardner: Well, thank you, Andy. My brother Tom and I can similarly think back on people we were in school with at 10 years of age and today some of them are incredibly accomplished and it makes us smile. Stock Number 2 is a public company today whose CEO was in the one year between us in elementary school. Meaning I was in sixth grade, Tom was in fourth grade, and this kid at the time was in fifth grade. Do you know which one I’m talking about?

Andy Cross: Is this a local company, David?

David Gardner: It is. Local to the Washington DC area.

Andy Cross: Local to the Washington DC area. Is the company very old and in it’s third-generation of leadership?

David Gardner: Founded in 1937. I think you may know stock Number 2.

Andy Cross: Walker & Dunlop.

David Gardner: That’s correct. Walker & Dunlop ticker symbol WD. Oh my gosh, I can’t even believe this. I randomized it and it’s true. Rick, play the sound. Oh my gosh. It’s true, I randomized and the stock Walker & Dunlop stock Number 2. Andy and Bill both still have their pencils out poised over their index cards as they ponder their best, tightest, most accurate range for ticker symbol WD.

A company known to not many people worldwide, but to these two, I suspect, and many Motley Fool members, especially fans of my brother Tom’s, this company will be well-known. I’m fascinated to see what Andy and Bill come up with. A reminder to you, all you need to do is simply agree with the player who had a better, tighter, accurate range by saying his name, and you too will get that plus one. That’s how throwdown works. Stock Number 2 will be the second and last one for our world championships. Okay, time.

David Gardner: Andy, I’m going to turn to you first.

Andy Cross: David. I said 2.93 billion to 3.1 billion.

David Gardner: 2.93 billion to 3.10 billion. Excellent. That’s Andy’s range. Bill, what is your range for Walker & Dunlop?

Bill Mann: Mine is 4.5 billion to 7.6 billion.

David Gardner: Four point 4.5-7.6 billion. Players at home. Is it Andy? Is it Bill? Say it. It was Andy. Andy nailed it because the market cap of Walker and Dunlop as we speak. It’s Tuesday afternoon, March 19. I updated it just before the show here this afternoon, $3.01 billion inside Andy’s range, very tight, 2.93- 3.1. How can you do that?

Andy Cross: Because I had been studying it.

David Gardner: Somebody studied.

Andy Cross: That one I had been studying for some of our services. That is one of the ones that I did know pretty confidently.

David Gardner: Fantastic. That makes it Andy, one Bill, one. Tom Gardner first picked this for his everlasting portfolio. The date was June 30th of 2013. The market has tripled since then, the S&P 500, but Walker and Dunlop has quintupled. Speaking of dividends, this company also pays a dividend 2.9% as the yield. I’m sure Andy already knew that because he’s been looking at it. Willy Walker in 2007, became Chairman and CEO of this Bethesda, Maryland company that his grandfather founded. As you referenced Andy in 1937. Andy, would you just briefly describe this real estate business? What do you like about the stock?

Andy Cross: Well, it’s a small company in a very large market providing real estate services and its based on intellectual property. But it’s also based on relationships and helping to do business in a better way than some of the other historical competitors. The fact that Willy Walker is still involved, his name is on the door. He still owns a good amount of stock, his family is still tied into it. It’s just something we’ve always really respected and just the way he wants to grow the company, I think, is just one thing we’ve always appreciated.

David Gardner: Well, I appreciate both of you because you both got a point during a throwdown round. Thanks for playing the game with me guys. I see some high-five knuckle knock going on across the table from me, you can put away the yellow index cards. We won’t need those anymore. Backed-up pure Market Cap Game Show is stock number 3. Bill Mann, stock number 1, you may remember it. It started with the letter U and it was in the transportation industry.

Stock number 3 also starts with a letter U and is also in the transportation industry now. It’s not United Parcel Service, UPS. Bill by the way, guess the market cap of UPS. This won’t count but let’s have fun. Within 20%, which is how this game originally started, we used to say, here’s the company, Matt Argersinger, Bill Mann, what’s the market cap of UPS within 20%?

Bill Mann: Oh my gosh, $104 billion.

David Gardner: Oh my gosh, you got it. The man was that close because the answer is $129.34 billion. If you lop off 20%, you get down to 103.4. Give yourself a point that doesn’t count Bill and that’s not stock number 3, but United Parcel Service is a big, U company in the transportation industry. Now there’s another one.

Bill Mann: There’s two other ones.

David Gardner: You’re right and one of them we’re going to hold off on because that’s the stock. But you’re already thinking maybe of United Airlines ticker symbol, U-A-L. Andy, why not? Guess the market cap within 20%, this doesn’t count for United Airlines.

Andy Cross: I will say 65 billion.

David Gardner: Andy, don’t give yourself a point but it didn’t matter anyway, you’re not even close. I probably would’ve gone there. It’s only $14.29 billion. Check Southwest Air itself, the big dog for many, these are much smaller companies than we think today. It makes me sometimes a little bit worried as I sit down in my seat and fasten my seatbelt and make sure that I have my oxygen mask over my own face first because that whole industry is undercapitalized relative to the importance I think that it has for our world.

Andy Cross: Isn’t United Airlines the largest air carrier in at least America?

Bill Mann: It is. We have clear skies with an increasing chance of bankruptcy later in the flight.

David Gardner: I’m not going to laugh at that but that’s another big U transportation company. But Bill, as you’re correctly surmising, there’s another.

Bill Mann: I’m gonna guess U-Haul.

David Gardner: There’s another besides it….