In this episode of Motley Fool Answers, host Alison Southwick is joined by Motley Fool senior advisor Robert Brokamp and Analyst Jason Moser to discuss how living a healthy life increases your chances of living a wealthy life. With the help of Jason Moser, we’ll explore how you can also grow your wealth by investing in companies that are trying to make us all healthier with a few fitness-related stocks to watch.
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This video was recorded on Jan. 5, 2021.
Alison Southwick: This is Motley Fool Answers. I am Alison Southwick, and I’m joined, as always, by Robert, running down a dream, Brokamp. Happy new year, Bro.
Robert Brokamp: To you as well, and a belated happy birthday, Alison, Dec. 26.
Southwick: Thank you for remembering. Yeah, Boxing Day, baby, here. Today, we’re going to talk about how investing in health and investing in your health is the path to wealth. All that and more, on this week’s episode of Motley Fool Answers. [MUSIC]
So, Bro [laughs], what’s up? [laughs]
Brokamp: Well, Alison, as you said we’re going to talk about health stocks later in the episode and so timely, since it’s a new year and if you’re inclined towards resolutions, chances are they include something about health or wealth or both. So, I have good news for you, because you can kill two birds with one stone or something like that, because the evidence is clear that healthier people are wealthier people and vice versa. Here’s just one example of the evidence. It’s from a 2018 Washington Post article by Christopher Ingraham. He looked at the Federal guidelines for exercise, which are that adults should perform at least 100-50 minutes of moderate physical activity or 75 minutes of vigorous physical activity each week. They should also do some muscle strengthening, stuff like calisthenics or lifting weights twice a week. What he found was, the states with the lowest percentage of adults who met that criteria, also tended to have lower median incomes with the lowest being Mississippi, and the states with the higher percentages of adults who exercise, they had higher median income, with the highest being, want to take a guess? What’s the fittest state, do you think?
Southwick: Well, not California, there are so many people in California.
Brokamp: Of course, it’s near to the Fools heart.
Brokamp: Colorado. They can’t help but exercise out there. Just, oh my gosh, it’s so beautiful. Anyway, so the question is, which is the chicken and which is the egg when it comes to health and wealth? The answer is, yes, in that they are both the cause in the effect. Let’s see, here are some reasons why better health leads to higher wealth. Evidence is clear that people who are healthier are more productive and people who experience health problems are more likely to miss work and more likely to be stressed and to succumb to something called presenteeism. Absenteeism is when you’re not at work, presenteeism is when you are at work but you’re just not on top of your game. Also, health problems can obviously be expensive, more money spent on […] , drugs, doctors, artificial whatevers, the less money you have to save and invest. One of the biggest reasons that people retire earlier than expected is poor health and people who retire earlier than planned, they had fewer years to contribute to their 401(k)s and their nest egg must be spread over a longer time period so they generally have lower income than people who work later. By the way, the evidence is that this is true on a national basis, healthier countries have more wealth and health interventions, whether on a national or individual basis, lead to increased wealth eventually, generally through things like higher productivity and stuff like that.
Now, here are some ways that higher wealth leads to better health. Wealthier people are more likely to afford any kind of health interventions and they have better access to healthcare in general. Right now, the country is rolling out the coronavirus vaccine and there’s no doubt in my mind that there will be a strong correlation between wealth and the order in which someone gets vaccinated. Wealthier people are also more likely to be able to afford things like gym memberships, personal trainers, healthier food, all kinds of other things that are associated with better health. Basically, the cause and effect between health and wealth likely goes both ways. But then there’s a question of how much control you have over your health and I’ve done a lot of reading about this and there is considerable debate about it with the evidence suggesting that anywhere between 30% and 70% of health problems are due to lifestyle decisions. But here’s just one breakdown using the data from the Boston Foundation and the New England Healthcare Institute, as published in bipartisanpolicy.org. The question is, what makes us healthy? 10% of it is access to care, 20% is genetics, 20% environment, 50% is based on healthy behaviors: eating right, exercising, mental stimulation, and avoiding too many things like drugs and alcohol. You do have a role in determining your future health and thus your wealth.
In case you do have some health related resolutions for 2021, here are three tips that have personally helped me accomplish health related goals including losing 15 pounds during the pandemic. No. 1, coming up with some accountability mechanisms. So, I used stickk.com, that’s S-T-I-C-K-K.com, and I committed to losing 1.5 pounds per week, or I would have to donate money to a political organization that I strongly disagree with. You have to choose someone who keeps tabs on you and for me that was Sam Whiteside, our Fool personal trainer. No. 2, join a group. You’re more likely to do exercise and stick to a plan if other people are doing it, it’s another form of accountability. Here at The Motley Fool, there’s some of us who get together on Tuesdays and Thursday morning at 9 o’clock; there’s another group that meets every day at 12:00 to do push-ups. Do it all over Zoom. So, if you join some group, I think that will help. We just had our family Zoom Christmas party and one of my wife’s cousins has created the women’s adventurous group, and basically, they just choose to take a walk somewhere they’ve never taken a walk before. I think it’s a great idea.
Then No. 3, optimize your environment, and this comes from James Clear, who wrote a great book for this time of year called Atomic Habits, and he makes a point that you are more likely to stick to certain habits if you design your environment to either encourage it. For example, if it is exercise, you’re having your exercise equipment close by the night before you go to bed, you put out your shoes and your stuff, making it easier to accomplish the task. Or you make it difficult to do the bad things. So, if you’re trying to eat better, No. 1, just stay out of the kitchen and No. 2, don’t leave food out. If your kids make Christmas cookies or anything like that, either make sure they get put in the pantry or put away somewhere where you don’t see them, because if you leave the food out, you’re just going to eat it. Finally, if you need more inspiration to live a healthy life, here’s how Christopher Ingraham concluded the aforementioned Washington Post article. He wrote, ”Let’s wrap it all up with one final question. Should you even care about any of this?” Here’s the answer, ”Only if you enjoy being alive.” At the state level, higher rates of physical activity are correlated with longer lifespans. There’s about five years of difference in average life expectancy between the least physically active state, Mississippi, and the most active, Colorado.” And that, Alison, is what’s up.
Southwick: The better you can maintain your own personal health, the better your chances of growing your personal wealth. But, what if you could also grow your wealth by investing in companies that are trying to make us all healthier? Jason Moser is here, he’s an analyst at The Motley Fool, he’s also the host of Industry Focus for our Wildcard Wednesdays, and he’s here to talk about the fitness industry and some stocks to watch. Jason, thank you for joining us.
Jason Moser: Hey, thanks for having me. Happy new year.
Brokamp: Thank you as well.
Southwick: It’s been a while since we’ve had you on I feel.
Moser: [laughs] It’s been a while, I think, yeah.
Southwick: But I’m glad you’re back, I’m glad you’re with us.
Moser: Like I’ve always said, I’m always happy to join. All you have to do is invite and I always enjoy spending time with you guys.
Southwick: I’m glad it’s that easy. All right, let’s get into it. Fitness has come a long way thanks in large part to technology. Jason, can you just talk a little bit about, and it’s not a sector, but what’s the most exciting trends right now in fitness?
Moser: Well, it does feel like it’s a sector. The fitness, I don’t know, that we grew up with, I guess, I remember when getting a gym membership was a novel concept and a bit of a luxury purchase for a lot of folks. If you look at the International Health Racket and Sports Club Association or in short the IHRSA, according to the IHRSA, there are 183 million people who had a gym membership globally as of 2018. Domestically, here in the United States, that number was 62 million. So, that concept went from maybe somewhat of a luxury to somewhat of a norm for a lot of people and then, as we know, the Internet came and then mobile technology followed and that has just changed everything, mostly for the better. I think healthcare or fitness was a little bit slow to adopt, but once that ball got rolling we saw a lot of companies start springing up in figuring out ways to incorporate technology into the fold and bring new fitness offerings to consumers. Then, of course, we saw really in all of 2020, that just became such a convenience for so many people as we were very limited in where we could go and what we could do.
Southwick: I feel like probably because of the iPhone then suddenly things like Fitbits made sense. When Fitbits first came out, everyone had a Fitbit. You’re like, ”Oh my gosh, do you have a Fitbit? Get a Fitbit. What’s that? Oh it’s a Fitbit.” It was a pedometer. That’s literally all it was.
Moser: It tells me how many steps I’m taking?
Southwick: It talked to my iPhone and then it would say, ”Good job,” and it would vibrate in a way that was like, ”You did it” and you’d be like, ”Yeah, I did. Thanks, pedometer.”
Moser: Yeah. It’s funny. I guess there’s maybe two schools of thought there. I tell you, I have no interest in being that connected. I never owned a Fitbit, I don’t want to wear a wearable on my arm that’s always buzzing and telling me to get up and walk around. I feel like I’m pretty good about being able to do that. But then, on the other side of the coin there, you’ve got folks who absolutely love that nudge and that transparency and that granular data. They love to know how they’re sleeping, how many steps they’re walking, what their blood pressure is, their heart rate and yadda, yadda, it goes on. It’s really phenomenal the capabilities that a lot of these devices have. You think about things like Fitbit or whether it’s Apple watch. Those are the two devices that people are probably most familiar with, but there are a ton of them out there. I think you’re right, it all goes back to the smartphone. The smartphone really has been, to my mind, probably one of the most important inventions clearly in our lifetime, but I think in [laughs] all of mankind’s existence. It’s just done so much, it’s like a window to the entire world in our pocket. Yeah, you can get these devices, they sync up your phone, you are able to not only record all this data, but then parse this data. Then, if you’re into that lifestyle, you can figure out what to do with that data to give yourself an even healthier lifestyle. It is amazing how quickly technology has changed this conversation, how many capabilities now folks have in regard to fitness that we just didn’t have before.
Southwick: Yeah. You did an interview on Industry Focus, you tackled this issue a few months back and you and your guests talked about companies that excel at habit forming moments. The idea that the companies that are going to do well are going to be the ones that are going to get you to keep using them, keep subscribing, keep coming back for more.
Southwick: Because so many of them do depend on monthly subscription fees for you to keep getting that extra data, or that extra insider or nudges. Do you think really it is about those habit forming moments? Because I know for a lot of us, we got our Fitbit, and now, it’s collecting dust in a sock drawer somewhere.
Moser: Yeah. It’s understandable. Emily Flippen, one of our investors on our investing team here, and I know everybody out there knows Emily, she said something the other day that kind of stuck with me. Just generally speaking, most people don’t really want to exercise. [laughs] They don’t want to get out there and do that stuff. I think I agree with that. I’m not clamoring to go downstairs and walk on my treadmill or go hit the [laughs] Pilates machine for an hour. But hey, listen, you invite me to go walk 18 holes of golf and I’m there, and hey, that’s walking about five miles or so if you go walk 18 holes. It’s an interesting situation when it comes to fitness, because there are some people that do love it. But I think for most people though, it is a bit of a chore. They don’t want to do it if they don’t have to. So then, if they do have to, there has to be some sort of way, again, they nudge you along, to reward you along the way, or just to kind of keep your interest level up just enough to make you realize that what you’re doing is good for you and then you should keep on doing it. Clearly, a subscription is one way to do that.
We always talk about that with investing, having skin in the game is one sure fire, a way to really keep an eye on a company. Owning shares of that company will keep your interest up. If you’re paying for a subscription to something, normally that’s going to be something that keeps your interest because you’re paying for that subscription. Yeah, it is something that I think is going to be a constant challenge for these companies, just figuring out ways to engage and keep customers or interest, because fitness is just one of those things that I don’t know that it’s top of mind for everybody.
Southwick: Yeah. We’ll start talking more about specific companies here in a little bit and breaking them down. For some people I know they have Pelotons that are collecting dust. But other people, I also know because they post on Instagram every day, about how much they just love their Peloton and are living the Peloton life and Peloton, Peloton. I can tell you that these are people who probably did not actually do a lot of exercise before they just fell in love with their Peloton and somehow they maybe cracked some sort of code for them that made time on their Peloton intrinsically motivated to do. They do it because they love doing it as opposed to getting a nudge or getting a stick, yeah.
Moser: You know what I think? I do think for a lot of those folks, and I think this is something that Peloton really homed in on early, is just the community aspect. I think when you have more people on the boat doing what you’re doing, when you have more people on the same boat, you can justify it a little bit more. It becomes a little bit more interesting to you. Be a part of a group in your part of a community, you’re all doing the same thing, kind of working towards the same goal. While you’re part of a community, it ultimately is still an individual goal and that is pertaining to your fitness. But I do think that’s something where Peloton really, they cracked a little bit of the code there in that community aspect.
Southwick: Yeah. There tends to be a great opportunity for controversy and backlash when it comes to fitness stocks. If you remember Lululemon back in the day they had a controversial founder, CEO.
Southwick: Controversial for only showing extremely, extremely fit women and not even making larger sizes and then, of course, Peloton, they had their own kerfuffle on Twitter over the holidays, was it last year?
Moser: You’re referring to the commercial, I guess?
Southwick: Yeah, the commercial was, a woman was so thrilled that her husband bought her a Peloton for Christmas, and then the Twitter backlash or joke was essentially like, “What a great Christmas present. Your husband just told you that he thinks you’re fat.” Was that kind of the backlash?
Moser: Everybody is looking for something to complain about. I don’t know [laughs]. We’re like that.
Moser: You can’t do it. No good deed goes unpunished now.
Southwick: I am building up to something here, because I do remember back in the day, back when Lululemon was going through all of the controversy, like, you can see through their leggings and all these other claims.
Moser: Well, I can understand that [laughs]. I can understand the issue there. [laughs]
Southwick: Yeah. They were just going through one thing after another. One thing after another, it was kind of hitting the company. I remember I was talking to some investors at The Fool about it and they were like, “Oh yeah, I would never invest in Lululemon because they’re just having so much controversy in there.” Similar to Peloton, they had so much controversy. We just had, I don’t know if all of you read the huddle, but we just had our monthly huddle and the CEO of The Martin Agency spoke to the company. She said something that was super fascinating to me. What she said was that it doesn’t matter, for your brand, it doesn’t matter what people are saying about you online, she’s like, what matters is that they are talking about you and that they are creating awareness and relevance. If people are talking about you over something controversial, even if it’s a Peloton ad where they’re making fun of the company for running this ad, she said, “The controversy will pass, but the awareness will remain.” With so many of these fitness companies, they’re walking this fine line of, “You’re great, but you could be better.” [laughs] I think it is really easy for them to have these commercials that are a little off, or ads that strike the wrong tone, but it doesn’t seem to matter. It seems to be okay. But they hit an off note now and then.
Moser: Yeah. I think that’s right. I think probably the main reason why that is, and this is purely anecdotal. I’ve been on Twitter for a little while now. I don’t use any other social media, but it really does seem like social media is a place where people go to complain and reap on things. It’s not where, like, if Peloton produced some awesome commercial, that was just so great and really just fired on all of the messages there, it just was something that resonated with just the masses, I don’t think you’re going to see necessarily the same level of traffic on social media praising that advertising campaign versus the level of traffic you would see when people want to go and reap on something. In other words, I think social media tends to skew towards snark [laughs] in negativity for the most part when it comes to those things. But I think she is right, I think the controversy will pass. It definitely keeps that name at top of mind for everybody using those social platforms, and ultimately, assuming that the controversy does pass, the controversy is gone, but that name is still there. If those companies are doing good things, listen, as consumers we have very short attention spans. It’s been shown time and time again. Look at Chipotle. Chipotle has just never been more successful. But five years ago, six years ago, you would have thought that business was going to go bankrupt because they were trying to poison the entire country. I see that obviously tongue in cheek, that was just a health crisis they had with their food supply chain, but they got past it. We as consumers have forgotten about it and we know that we have forgotten about it because when you look at the numbers that Chipotle continues to record, it’s just really impressive. [laughs] People are going back.
Southwick: Yeah. All right. Let’s talk some more about some specific companies. I’m going to give you some tough choices between two fitness companies, or at least fitness related. If you could just talk about them and let me know which one you’re going to choose. First up, we have two apparel companies that are trying to be more. That’s Nike versus Lululemon, which one are you going to buy?
Moser: Wow. This is a tough one, actually. I think some people might think it’s an easy choice, but for me, it’s not. I tell you, Lululemon has been nothing short of really impressive. If you look at the last five years, Lululemon stock is up almost 670%, versus Nike’s almost 130%. Now, it’s worth mentioning, Nike is a much larger business, has been around for a lot longer or so. A more mature business isn’t going to grow as quickly as something like a Lululemon. Lululemon, as you mentioned earlier, were recovering from their own little snafu, so the stock was coming from a low base there as well. That said, the successes because the business is performing well, then if you saw also recently, Lululemon actually acquired the Mirror company, and that’s another Peloton style offering. It’s that mirror that goes on your wall. Essentially, it’s like a portal to a home gym that gives you interactive exercise and fitness content. That gives Lululemon more presence in that home fitness market, which I think there’s plenty of opportunity there.
I do feel like though, at the end of the day, I’d have to go with the more universal offering here in Nike. It is the brand that’s synonymous with sports around the world. I think it’s a larger market opportunity in Nike. Frankly, I’m sleeping better at night if I’m owning Nike versus Lululemon. That said, this is not to take anything away from what Lululemon has done. I think what they have done has just been nothing short of phenomenal. I think that they should continue to do well because it really does seem like they have their product lined up and strategy really all headed in the right direction.
Southwick: Some of these might be tough choices.
Moser: Yeah. That’s a tough one. [laughs]
Southwick: Between two good stocks or two bad stocks. Here we go. Next one. We’ve already talked a bit about Peloton, but it’s Peloton versus Apple. I’ve matched these up because Peloton is a straight up we do bikes, we do connectivity, you’re doing these classes, but Apple is really trying to get into this game too, so it’s not as pure of a fitness play here. But what do you think between what Peloton is trying to do and what Apple’s trying to takeaway?
Moser: Yeah. I think, when Peloton first went public, I will absolutely admit that I was skeptical. I didn’t really fully see it. I don’t own a Peloton, I probably never will. But they have really keyed in on something, and I think part of that has been just the community aspect of their business. They’ve got the Peloton bike, the Peloton thread. It’s all about connected fitness. They’ve got this premium equipment. They’ve built this community, and they have a community of over 3.5 million members as of September of 2020. Not only is it the premium equipment they have, but they also have that Peloton digital offering where you don’t necessarily need Peloton hardware to actually be a part of their fitness community. I remember the reaction when Apple announced their fitness offering in Peloton. The knee-jerk reaction was, “Uh-oh, it’s the Peloton killer.” I’m a bit skeptical that this is the case. I think Apple fitness seems like a no-brainer product for them to launch because they are really trying to get more into the subscription side of that business. They want to become more than just a phone company, and they’re doing a good job with that. The neat thing about Apple is they can take that fitness app. Apple doesn’t have fitness equipment, this is just a digital offering. It’s more or less tethered to the watch. If you don’t have an Apple Watch, the incentive really isn’t there to be a part of Apple fitness. There’s a lot of people out there with Apple Watches. I think that’s still a somewhat limited opportunity when you look at what Peloton could offer with their digital community as well. For me, while Apple, they can boost that offering a number of different ways. They can give you free subscriptions with devices, they can bundle them. I mean, now they have the Apple One offering for $30 a month, you can get all six of their services. It’s like music, Cloud, fitness, news, a bunch of other stuff that you probably wouldn’t use, [laughs] but I do feel like, to me, Peloton is really, they are the ones to beat here. I think Peloton really set the stage here and Apple sees it as an opportunity. It’s an opportunity for them to keep Apple users in that universe, and I think it’s easy enough for them to offer. I don’t think it’s going to be something that they invest a whole heck of a lot of money in. Whereas, this is obviously Peloton’s bread and butter. For me, I think I would side with Peloton on this one.
Southwick: Interesting. Okay. All right. Now, the next one to give you is a little wonky, but I was trying to look for two stocks that had once done very well, but are now not doing so well. But this is actually going to get super wonky. I don’t know. Here we go. Fitbit, which was once at a high of $29 in 2015, is now at $7. Then we’ve got Under Armour, which was once at a high of $103, again in 2015, but now it’s only at around $15 a share.
Brokamp: How the mighty have fallen. [laughs]
Southwick: Right? Not so long ago, we were all sitting here being like, “I don’t know, Under Armour or Nike. I don’t know.” I think Under Armour is going to do really well.
Moser: It goes to show you, just because you have a good product, doesn’t necessarily ensure success, because I think Under Armour has always had good stuff. They just really made some bone-headed business decisions along the way. I think founder Kevin Plank, I think he hit a ceiling, and we see that with founders from time-to-time, they can take the business to a certain level, and they probably should step aside in order to let more seasoned leadership continue that journey. With Under Armour, remember, it wouldn’t all that long ago. They actually made that foray into connected Fitness by purchasing those apps, the MyFitnessPal app and Endomondo or whatever. It paid something like $550 million in total for all of this stuff. Then quarter-in and quarter-out, they were tout, were beating Nike in connected Fitness, and oh, we’re so good, and they were just patting themselves on the back along the way, and just clearly didn’t execute. They didn’t execute. They actually have now divested those connected Fitness apps, and are really just trying to get back to basics with their apparel. Again, I think they’ve always had the apparel figured out. I mean, they have good products. I think really they have a new CEO in place that I think is doing the right things for the business. It’ll take some time.
Fitbit, if you are aware of this, Fitbit has been out of the news for a while because Google [Alphabet] made an offer a little while back to acquire Fitbit. It really had just been going on forever through regulatory scrutiny. I think the main concern has always been in regard to the data and what Google will do with that data. Just recently, European regulators actually gave Google the blessing with conditions for this acquisition to proceed. The main conditions are that they don’t want Google using the data that they gleaned from Fitbit in order to target ads to Google customers and Fitbit customers. I think that makes a lot of sense. In this age of privacy and protecting our data, I think that’s the No. 1 concern. It sounds like that acquisition is going to happen. It sounds like they are still going to have to be somewhat separated. I’ll be interested to see what Google does with Fitbit because I think Fitbit while it’s pretty good hardware, they always really lack that infrastructure, that ecosystem to really keep people engaged, like a Peloton or like maybe an Apple. I think there’s potential there.
You also have to remember that Amazon has just introduced their own little service here, Amazon Halo. That is another fitness little arm, a little wrist wear bold it, it’s not even a watch. I think that’s probably one of the selling points too. That’s like a Fitbit, but it links up to your phone and gives you all of that stuff through an app as well. Amazon stepping into this ring should make it more interesting. I think I’d probably go, I still own my shares of Under Armour, and I do like the clothes, so I’m going to give them the benefit of the doubt. I think five years from now, Under Armour is in a much better place.
Southwick: It’s funny the idea of regulators being like, Google, sorry, you can’t do ads to people’s Fitbit’s when our cell phones are listening to us constantly. I have no doubt that after this interview, I’m going to start getting ads for Fitbits on my phone.
Moser: [laughs] Yeah.
Southwick: My Alexa is listening to me. It’s so weird to be like, “Oh yeah, that was my Fitbit.” That’s where we’re drawing the line, it’s delivering ads because of your, again, pedometer.
Moser: Yeah. I think if they could go back in time, they would have been a little bit more careful about how all of these devices are collecting data. It really has just been recently where privacy and data protection has taken the headlines, and have been at the front of everybody’s minds. I’m with you, man, I don’t want to be sharing my data with everybody, but I also know that I’ve got Alexa in this house and my computer. There’s only so much you can do. There is a trade-off with all of these technologies. We as consumers, clearly, at this point, we don’t mind making that trade-off.
Southwick: Yeah. All right. Last one. Let’s talk about two companies that are a bit more old-school. One that is trying to get e-back into the gym and one that’s trying to reinvent itself. Planet Fitness versus WW, formerly known as Weight Watchers.
Moser: Yeah, this is an interesting one because you’re right, they are old-school. Planet Fitness, that’s the gym membership. You get in your car and you drive to the gym, then you pay for that membership every month, and you’re going into a building and that building is owned and operated by someone. There are a lot of expenses that come with that model. Now, Planet Fitness is mostly franchise stores, regardless, it depends on physical presence. It depends on people being at that gym, clearly, 2020 not the greatest time for that. The question is, will people be going back to the gym as things clear up here? I think they will to a degree, but I think that you probably won’t see as much simply because of the offerings that exist now that didn’t exist before.
For me, that combination of falling traffic and, likely, having to cut prices in order to get people through the door is not a very attractive one. I think that with WW, the re-branding, the WW, to me is still questionable at best. I think Weight Watchers was a really strong brand as it was, but the company has a lot going forward. Long standing reputation, digital component to the business, Oprah. I probably just needed to say Oprah, then we can just be done with the conversation, because she can [laughs] steer an of a lot of traffic towards that business given her following. But I do think that the business, WW, they’re doing a really good job of building other digital offerings. They grew their digital subscriptions in the most recent quarter by 23%. That was strong growth in all of their geographic markets. That’s something that with 4.7 million members today, I think WW just has a lot of opportunity to really capitalize on the digital side of that business. I think it resonates a little bit more with the consumers. I think that Planet Fitness, to me, that gym membership is just going to be a difficult one. I don’t think it’s unsustainable, but I don’t think it really makes for a very attractive investment opportunity.
Southwick: So you’re going WW?
Moser: I’m going WW.
Southwick: All right. What if I force you to pick one to rule them all, what are you going to go with?
Moser: One to rule them all? Wow, man, oh, man, you know what? I’m going to surprise you here. I think Peloton is the real deal.
Southwick: Yeah, OK.
Moser: I’m telling you, I started that as a skeptic. But the more I follow this business, the more I look at it, the more I see the brand identity, the brand awareness, I see a future where Peloton has a lot of opportunity.
Southwick: You see a future where they get acquired? I feel like there’s a future where they get acquired.
Moser: I could see why someone would want to do that, absolutely. That may be something that’s beyond their control, and sometimes that is a short-term win for investors, but they have to give up that long-term opportunity. I could definitely see that happening. If I were an investor in Peloton, I don’t own shares, but if I did, I would much rather watch them go on their own and build that business out. Because I think they have a lot of different ways they can go with it.
Southwick: Yeah. My husband, out of the blue this morning, was like, “Hey, what do you think about getting a treadmill?” Which I’m like, “No.” He’s like, “They’ll keep me running during the winter,” and I’m like, “You don’t even run the other three seasons of the year. What do you mean you need to buy a treadmill in the winter?”
Moser: [laughs] Well, I will say, like, we have a treadmill here and I use it more for walking. I’m getting old, so I’m not really one for running. To me, really, the key to it all, get a dog. If you get a dog you’ll want to go take that dog for walks. I just took my dog for a walk. I have three dogs, so I took one of them for a walk earlier today. We walked around the neighborhood for 45 minutes, came back and it’s just an easy way to get some exercise. I think walking is really good personally, whether I’m walking on the golf course or just walking around the neighborhood. That’s my preferred form of exercise. I don’t know. You got to do something.
Southwick: Got to do something.
Moser: The older you get, the more important it is.
Southwick: Yeah. Well, I did go back to Ron and I was like, “I’m not interested in the treadmill, but have you thought about a Peloton?”
Southwick: That was literally our conversation this morning [laughs] and then he was like, “No.”
Moser: Why not? Why? Yes to the treadmill, but no to the Peloton? Peloton will make you run your knees.
Southwick: You know what I think? The thing is, there’s a fun saying about if someone’s like cross-country or soccer. I think my husband’s more soccer, [laughs] than cross-country. He needs like a team sport, he needs friends to get together and play basketball or play soccer or something where it’s social and fun and out there.
Moser: I can relate to that.
Southwick: I like running because it means I get to be alone for a while, with my thoughts. I think what he needs is just to get away from running and get into a team sport someday. [inaudible]
Moser: That’s the best thing about golf, it’s a very individual sport. So when you get out there and just walk around the golf course, you can just be alone with your thoughts. I like that a lot.
Southwick: Or you can do it with friends.
Moser: Well, you can and you can also completely ignore them. You can just walk on the other side of the fairway, so you don’t have to talk to anybody. [laughs]
Southwick: Yeah, there you go.
Moser: I’m not anti-social, I promise. [laughs] I just don’t want to talk to anybody.
Brokamp: I just don’t like people.
Moser: [laughs] Yeah.
Brokamp: The social part is fine, it’s the people I don’t like. [laughs]
Rick Engdahl: I got another one for you, Alison.
Engdahl: You can combine your Peloton with video games. Get yourself an Oculus Quest.
Engdahl: Supernatural is the app you need. It’s like the Peloton of VR.
Engdahl: They have you like doing all these exercises. The coaches are there telling you that you’re an athlete and how good you are. [laughs]
Moser: Great job, everybody. [laughs]
Engdahl: I’m like Ron, I’m one of the soccer guys, but VR is doing it for me. If I can ever find a space in the house that’s not being overwhelmed by laundry and puppies.
Southwick: And a puppy, speaking of dogs.
Moser: Rick, you got a new puppy?
Engdahl: I did, yeah.
Moser: Congratulations, that’s awesome.
Moser: Those are always a lot of fun.
Engdahl: I also get a lot of exercise cleaning pee after pee.
Moser: Oh my God.
Brokamp: In front of the dog too.
Moser: [laughs] I only hope for you that it’s all hardwood floors because man, oh, man, they like to make messes.
Southwick: [laughs] You guys. All right. Jason, thank you so much for joining us to talk about this industry. I think it’s pretty interesting, but hopefully our listeners did as well. Please come back again sooner rather than later.
Moser: Well, thanks for having me and you know I always will come back whenever you ask.
Southwick: You’re the best. As always, The Motley Fool may have recommendations for or against the stocks we talked about. Don’t buy and sell stocks based solely on what you heard here. Well, that’s the show, it’s edited athletically by Rick Engdahl. Our e-mail is [email protected]. Robert Brokamp, I’m Alison Southwick. Stay Foolish, everybody.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.