Want to catch up on the biggest financial news stories of the last few week?

In this episode of MarketFoolery, Chris Hill and Bill Barker look at three of the biggest headlines in the market. If you can make it through a somewhat painful four minutes of us predicting that Britain would remain in the European Union, you can find out why no one saw the vote shaking out the way it did, and why the market popped before the results came through. Or, go ahead and skip ahead for earnings reports from Bed Bath & Beyond (NASDAQ:BBBY) and Barnes & Noble (NYSE:BKS), and learn why Barnes & Noble is planning to test out four new locations that will serve alcohol.

A full transcript follows the video.

This podcast was recorded on June 23, 2016. 

Chris Hill: Are you excited for the Brexit vote, which is going on right now as we speak?

Bill Barker: The market's excited, isn't it?

Hill: The market does seem excited.

Barker: The market is celebrating. We're "buy" on the rumor here, and the rumor is that the Brexit vote will go down, the Bremain vote will.

Hill: Yeah, Bremain is even worse than Brexit. The voting is happening--

Barker: It's just sad, when you're losing to Bremain.

Hill: [laughs] It kind of is. The vote is happening in England right now. The polls close at 10 p.m. in England, so 5 p.m. Eastern Time here in the States, and there is no exit polling. So there is no sense of how the vote is going. Maybe there's a sense of how turnout is, but there's no exit polling. So the final results are expected to be announced Friday morning between 7 and 9 a.m. Again, that's in England. So that's in the middle of the night here.

Barker: It's hard for Americans to understand that somebody else's time would dictate. Isn't it?

Hill: [laughs] I'm not going to name names, but I have actually talked to a couple of people who have taken that stance. Like, "What?"

Barker: "How dare they?"

Hill: "Why are their polls open until 10 o'clock!"

Barker: "Why are they allowed to have a different time at all?"

Hill: But, to your point, that really is how the market is reacting right now in the States -- that this is going to be status quo. The idea that there is going to be this great upheaval with the U.K. leaving the European Union, we're not worried about that.

Barker: Market likes status quo a lot of the time, much more than uncertainty. And the betting odds, as I see them online right now, are 83% chance of stay in, and 16% chance of leave. So it's about a 5-out-of-6 chance that the market is priced into the status quo reigning, and that is good enough.

Hill: I don't want to get into too many details for regulatory reasons, but have there been conversations in the Fool Funds group regarding how you're going to invest differently if, in fact, the Brexit vote passes, and the U.K. does end up leaving the European Union? Have those conversations taken place?

Barker: No. It would be reacting to a hypothetical. Of course, you could look at the odds and say, "Well, in the 1 in 6 chance that this happens, what should we do?" We're not a quick-turnover type of shop. We don't trade a lot. So the companies we own are likely to be, in our opinion, good ones to own for the next 5-10 years. Now, it's certainly the case that European stocks and British stocks in particular would be taking a big hit, might take a big hit tomorrow. Maybe we should be dedicating a lot of time to what is a fairly small amount of investment that's in England anyway. But, no, it's not something that has looked like it's enough of a worry to us, despite all the press that it gets everywhere else.

Hill: So the people who are already looking past this vote toward the possibility of similarly styled votes in France, in other countries in Europe, that's not even on your radar right now? That's not even a concern?

Barker: The most proximate concern, I think, would be to take this -- because the odds are similar, the betting market odds. It's nice to have places where betting on presidential elections is done, so that you can get some sort of odds, and that is done in England.

Hill: It's probably fun to be a bookmaker in England, wouldn't you think?

Barker: I think so, yeah!

Hill: More fun than being a bookmaker here.

Baker: Open up bets on all sorts of things, what the name of the royal baby is going to be and all that. Anyway, the odds of Trump winning are basically about the same in the market right now as the odds of England leaving. And I think it would be similarly disruptive to the markets, either one of those things. So those odds change, then you'll see a little bit more volatility in a market, just as you've seen a lot of volatility in England. When the odds were closer that Brexit would go through, definitely the European markets, in particular, and the U.S. markets, to a lesser extent, did take a hit.

Hill: All right, let's get to some company news. Bed Bath & Beyond's first quarter was a miss. They missed on profit, on revenue, on same-store sales. And, perhaps not surprisingly, shares of Bed Bath & Beyond have hit a five-year low this morning. What do you do here? Because you know that there are investors out there saying, "This is a value play."

Barker: That's the question -- is this a value trap, or is there some value here? Bed Bath & Beyond is basically subject to the same sort of retail pressures as many other companies, some of which we'll discuss in a minute. They've not been able to grow at the rate at which it had, prior to online retail becoming the force that it is. Nevertheless, Bed Bath & Beyond has continued to grow sales every year. It's grown sales, but it hasn't grown profits, and it has not even really grown earnings per share very much even though it's aggressively bought back shares. As you mentioned, it's reaching some new lows, and it's been cut in half.

A lot of those shares were repurchased at prices significantly higher, basically double what the price is today. So, when you look at 8 times earnings right now, and the earnings have been reasonably flat, but reasonably OK, sort of $5 a share, and you say, "Well, there aren't that many companies trading in this market at a P/E of 8 that don't seem to be in massive trouble." But I don't know that it's going to be a good investment unless it convinces people that there's a brighter future than a present.

Hill: This also seems like the type of buying opportunity, if you want to think of it that way, where you would have to have this stock on an unbelievably short leash. I think if you're looking at this and saying: "Well, on a valuation basis, it's really cheap. From a price standpoint, it's at a five-year low. I think I can squeeze some value out of this." But it seems like, OK, if you're going to go ahead and do that, you'd better be watching this stock every single day for the rest of 2016, waiting for whatever type of pop you're thinking of, out of whatever your investing thesis is.

Barker: Maybe. I guess you can take the position that it just seems to be safer than a lot of other things, simply because of the price. The price is providing a bit of a net here. If online and the various other...Not all of the competitive pressure comes online. And they have their own online business. You can go to Bed Bath & Beyond and see that they have plenty of things for sale, and they have online sale.

Hill: Right, because as we said before, it's not just "bed" and "bath." It's also "beyond."

Barker: Really? And with the Star Trek movie this summer, isn't that the Beyond?

Hill: Yes.

Barker: I mean, that's got to help.

Hill: Is there a tie-in there?

Barker: If there isn't, somebody's dropped the ball. It's a natural--

Hill: God, how great would that be, if some marketing whiz over at Bed Bath & Beyond pitched that idea? "No, no, no, it's the name of the Star Trek movie" and we get to -- for just $10 million up front, they'll write in a scene where Bed Bath & Beyond still exists in the 23rd-24th century!

Barker: I don't think they write in a scene. I think it's one of those commercials where you have got the Star Trek characters, and they happen to be at Bed Bath & Beyond for some reason -- they've been transported back in time. It's a natural. I think it probably happens every couple of shows, that they end up shopping. [laughs] 

Hill: Look, you're going to need towels in space.

Barker: And bedding!

Hill: And bedding! And all the other things.

Barker: And beyond.

Hill: Let's talk Barnes & Noble. Help me understand this. Because Barnes & Noble's fourth quarter--

Barker: Amazon.

Hill: No, no. Stick with me. Barnes & Noble's fourth quarter bears a striking resemblance to Bed Bath & Beyond's. Same-store sales were down. Revenue came in lower than expected. They reported a loss for the quarter, so there's no profits to talk about. And yet, shares are up 9%-10% this morning! Are expectations for Barnes & Noble significantly lower than they are for someone like Bed Bath & Beyond?

Barker: I'll explain this in two steps. One is that, for reasons which...Right now, as I'm looking at the stock ticker, Barnes & Noble is going for $11.29 a share. At the close of the market on Tuesday, it was going for $11.23. Yesterday, Wednesday, it closed at $10.44. So people sold the stock off yesterday, apparently, in fear of what today's report would bring. The report came in, and it's about what was expected on Tuesday. So I hope that helps clarify that this is not some new enthusiastic change in market sentiment for Barnes & Noble. It's really, yesterday there was a big sell-off.

Hill: So yesterday the feeling was: "Oh my God, this is going to be horrific!" And then today, it's like: "Oh! Well, it was bad, but ... "--

Barker: "It's only as horrific as we thought on Tuesday. It wasn't some new level of nightmare," which it's been for a long 10-15 years for Barnes and Noble. And it continues to be a tough environment. Another reason why it may be up a little bit today is they had an investor analyst meeting. I caught a little bit of this online toward the end, because it was early and I just caught the end of it.

They're talking about a new concept they're rolling out in 2017, four locations -- starting maybe in October of this year, the first one, in Eastchester, New York. There's going to be a little bit of an outside, and there's going to be some alcohol served. It's doing a little bit of the same look at -- can alcohol be something that we can rely on to keep people around in the stores? Starbucks has looked at this, and Chipotle. It's a thing. Whole Foods.

Hill: Right, but Starbucks and Chipotle, the underlying business is food and beverage. This is a bookstore that's now apparently hired an executive to head their new restaurant group? So this is a bookstore that's saying: "Hey, you know what's really going to move books? Getting people drunk."

Barker: You know what has worked better in the last 10 years is serving food than selling books in a bookstore. The restaurant groups as a whole have done great. Books have just gone away. And what's really gone away for Barnes & Noble is Nook, which, I guess it was worth a shot, maybe? Apparently not in terms of the actual cash earned. But looking at what Kindle was doing, and thinking, "We're going to be buried by this if we don't compete against it," I guess they were both -- buried by it and competed against it. Lost money, and now they're taking steps back.

Hill: All right, having just made fun of this idea, let me go to the other side. If this works, let's say that this works, and these four new locations actually bear fruit for them. How quickly do you think we as investors will know this? What is the sign to look for? Is it: "Hey, we're rolling out eight more?"

Barker: I don't know. I think it is going to start as a small part of a business. Now there are fewer locations for Barnes & Noble than there used to be. But another place that they've got, and they could do this, is all the college stores, the college book stores that are run by Barnes & Noble. You've seen those, you've been in those?

Hill: Sure.

Barker: From what I understand, the kids in college still drink. The legal ones, the 21-year-olds. The rest wait patiently.

Hill: The college students who are 18, 19, and 20, they wait their turn.

Barker: Right. Law-abiding citizens that our college-going youth is...Sure. I assume. I haven't been on enough campuses to know.

Hill: Do you really think that if these four locations for Barnes & Noble work out, that their next move is to open one on a college campus?

Barker: I think they're grasping at straws. This might work out, and they still have a business that exists and hasn't made money, basically, for the last five years. They're looking at a business that typically does make money. I think that's what they're doing.

Hill: All right. You know what? The Barnes & Noble that's a couple of miles away from here--

Barker: Let me just add. You've been known to read.

Hill: Yes.

Barker: Do you ever do so without a drink in your hand? You're at home, a book is open on your lap. What's the chance that you're drinking?

Hill: Let's see. I would say, between reading at work--

Barker: They also serve coffee.

Hill: And reading at home, there's a 100% chance I'm drinking something when I'm reading.

Barker: OK. So they're just getting around to it.

Hill: So take heart, Barnes & Noble shareholders! 

Barker: You have one customer who's guaranteed to be partaking in your new plan!

Hill: Before we wrap up, I want to see...Recently, our dozens of listeners in India stepped up wonderfully with some research, sharing their own experiences with online retail in India -- that worked out so well that I thought we'd like to appeal to our dozens of listeners in the Great White North. And I'm not referring to Jim Gillies. Jim, you can sit this one out.

Barker: He wouldn't know, he's in Guelph.

Hill: He's in Guelph, which we talked about before. We're not going to Guelph. But as we learned recently, you and I are each, independently, going with our families this summer to Montreal. And we need some advice. What are things to do in Montreal when you have human children? Email us.

Barker: And possibly a dog.

Hill: OK. You're bringing a dog to Montreal?

Barker: Can I?

Hill: Does the dog have a passport?

Barker: No...Is that a problem?

Hill: Didn't Johnny Depp get in trouble bringing his dogs to Australia because--

Barker: That's Australia. It's not Canada. Canada loves dogs, unlike the Australians, where wild dogs are eating people's babies. That's why they have to stop them from coming in.

Hill: That was what was going on with Johnny Depp's dogs?

Barker: [laughs] I don't know.

Hill: I think you need to check.

Barker: I'm just saying, the brave Canadians aren't going to inflict the same unreasonable restrictions on canine transport.

Hill: That's an issue you'll have to deal with.

Barker: Maybe this is what we need to find out.

Hill: And by "we," I mean you.

Barker: Yeah, you don't have a dog.

Hill: I don't have a dog, so I don't have to worry about whether or not he's going to be stopped at the border.

Barker: Otherwise largely considered a good father. But the fact that you've never gotten a dog is...not in that category.

Hill: Not in that category.

Barker: Good-dad points. Everything else you're scoring well. Look, you can get the perfect score, there's still time.

Hill: I'll think that over. In the meantime, our email address is MarketFoolery@fool.com, for anyone who has tips on what to do in Montreal, which is a fabulous city, but I haven't been there with my kids before.

Barker: We'll take tips from Americans as well, if there are any who have ever been to Montreal.

Hill: Yes! MarketFoolery@fool.com. You can read more from Bill Barker and his colleagues, go to FoolFunds.com and sign up for Declarations. It's their free monthly newsletter. But before you do that, if you've been to Montreal, just drop us an email at MarketFoolery@fool.com. Thanks for being here, man!

Barker: Thank you!

Hill: As usual, people on the program may have interests in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. That's going to do it for this edition of MarketFoolery. This show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening. We'll see you on Monday!

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.