On this Market Foolery podcast, host Chris Hill, Motley Fool Pro and Options' Jeff Fischer, and Motley Fool Options and Pro Canada's Jim Gillies start with a quick delve into their expectations for the now-past Apple (NASDAQ:AAPL) iPhone event.

But you may be more interested in what moved giant insurer Travelers (NYSE:TRV) to put its share-buyback program on hold, how a single tone-deaf memo from a Pizza Hut franchisee burned a whole lot of goodwill for parent Yum! Brands (NYSE:YUM), and the most underreported major story in the business world right now -- the number of countries on track to ban the sale of gas-powered cars in the not-so-distant future.

A full transcript follows the video.

This video was recorded on Sept. 12, 2017.

Chris Hill: It's Tuesday, Sept. 12. Welcome to Market Foolery. I'm Chris Hill. Joining me in studio today, from Motley Fool Pro and Options, the one and only Jeff Fischer. And from the Great White North, as promised, the fabulous, most groovy, Jim Gillies. You work on so many services I didn't even know where to go with that. 

Jim Gillies: We can go Options and Pro Canada. How's that?

Hill: All those things sound good.

Gillies: I've never been called fabulous in my entire existence, so thank you.

Hill: And most groovy. Long time.

Gillies: It's been a while.

Hill: First time in calendar year 2017.

Gillies: It is, yes. Here.

Hill: Was it something I said? Or was it many, many things I said?

Gillies: Many, many things you said.

Hill: Well, it's good to have you in the studio.

Gillies: It's nice to be back.

Hill: We're going to dig into some of the aftermath of hurricanes Harvey and Irma, and we're going to talk automotive. We're going to go big picture on the automotive stuff. Quickly, though, Apple is holding their event in about 90 minutes from when we are taping right now. We're actually doing a Facebook Live at 4:00 p.m. Eastern, so for the very few dozens of listeners who listen to this podcast before 4:00 p.m. Eastern, hop on to Facebook. We're going to be talking about the event.

But at this point, there are rumors of what Apple is going to unveil. There are educated guesses. I'm curious, Jeff. I'll just start with you. What is one thing you're going to be looking for or listening for, from an investing standpoint, at the event today?

Jeff Fischer: What a good question!

Hill: Thanks! Not my first show! [laughs]

Fischer: You know, I'm not very concerned about this event. I think Apple is executing really well. I think the new iPhone is going to have enough features that it's going to, indeed, be a super cycle of tens of millions of sales that come in two quarters alone. I think the Apple Watch is the top-selling watch, we are told, by revenue, in the world, and a new one is expected and will probably bring in some new buyers as well. The mobile, I have an Echo at home and a couple Dots as well, and we use them each day, but I would switch to an Apple Home product, or at least add one if they execute well on that as well.

So it's not just one thing, Chris. It's really all these things converging. Apple needs to keep leading clearly in phones, wearables, and they need to break into the home market in a real way to make all these things meld.

Hill: It is pretty impressive that we've talked before about tech companies that get to a certain size, and then they kind of plateau in terms of what they're able to do and the way that they're able to meaningfully reward shareholders. And here we are 10 years after the unveiling of the iPhone. Tim Cook's and his team's ability to sustain the enthusiasm is impressive to me, the fact that there is all this buildup to the event. And as we fully expect, they're going to unveil this, among other things, this brand-new phone, and then it's going to be another few weeks before it's actually available in stores. So the showmanship of Tim Cook and his team has been sustained after Steve Jobs' death.

Gillies: He really learned from the best, didn't he?

Hill: He did. He really did.

Gillies: I was just saying before, I've recently upgraded to an iPhone 7. So for a brief few moments, I've been at the cusp of technology, and after today I won't be.

Fischer: Obsolete.

Gillies: Story of my life. But I mean, like, what's been interesting to me is to see some of the articles on the periphery. Because I actually agree with everything Jeff said. I agree that, from an investment standpoint, this doesn't get me too excited. It doesn't make me terribly disappointed. They're still going to have billions of dollars in cash, they're still going to be producing billions of dollars in cash, and they are meaningfully returning it to shareholders. So we haven't seen the run-agrounds, like some of the other companies that have tried and failed. A certain Canadian company called Research In Motion comes to mind. But you see in the periphery, the stories are talking about, well, what they're going to introduce today, Samsung had this six months, a year ago. You're seeing "What are you doing for us lately?" It almost feels like it's going to be one of these -- short-term prediction time! -- buy the rumor and sell the news kinds of things.

What does Apple have to do? If it is the promise of this super cycle, mass upgrades across a great many people who are not me, that portends only wonderful things for the finances of Apple. And yet it seems like, at least the articles I was reading this morning talking about this, they seem fairly pessimistic, like, "Yeah, it's going to be awesome. Then what?" I must have read four or five things like these this morning. I'm like, hang on, this is the world's most valuable company producing this signature product, the 10-year anniversary of the iPhone. What do you people want? It felt kind of odd to me as I'm going through the news.

Fischer: Jim, that's funny. The Washington Post on Sunday had an article in the business section critiquing Apple, like, "Where's the innovation? They've lost their mojo." I wanted to go online and defend Tim Cook and be like, "What are you talking about?" But he doesn't need my help. But, reality is, they keep innovating a lot. Apple Pay is great and easy to use. I use it whenever I can. It's much quicker than chip cards now. The Watch is a great product. I have the Series 2 watch. If you don't have one, for a few hundred bucks, pick it up.

Gillies: I have a Garmin watch. [laughs] 

Fischer: It's good. And one perk is, it makes you check your phone less frequently, because you get enough on your Watch, and it's things that you need to get as well. So they're innovating all along the way, and I think we'll see more of that today. And I find it funny -- comical, even -- that people are accusing Apple of no longer innovating when that's all they're doing.

Gillies: It's almost been continuous.

Fischer: They're saying, "Well, the iPhone changed our lives 10 years ago." Sure, in a minor way, but you couldn't take a picture with the iPhone when it came out. It's changing your life incrementally now all the time, still.

Hill: Yeah. If you want to do a little bit of a fun deep dive, go back and look at what you could actually do with that first iPhone 10 years ago. And imagine for a moment, whatever phone you have on you right now has been substituted with that thing. And when I say that thing, I mean that relic. As you said, Jeff, there were so many things that the first iPhone -- and it was completely revolutionary in 2007. But now, if someone gave you that phone, you would just throw it at them.

Let's move on. I should start with the fact that Hurricane Irma is still technically a storm, although a far weakened one. Yet the fact of the matter is, there are millions of people across the southeast United States in Florida and Georgia who are without power, including some of the dozens of listeners. Shout out to Valencia, one of our dedicated listeners in Stone Mountain, Ga., to Valencia, and really everyone out there who is dealing with the aftermath of Irma, and also everyone in the Houston area who's still dealing with the aftermath of Harvey.

On a non-investing note, I would say, on behalf of everyone here at The Motley Fool, hang in there as best as you can, because storms are dangerous and don't last all that long. The aftermath, the cleanup, the rebuilding, that's the part that takes a long time and requires a lot of patience. So just hang in there as best as you can.

To the business of the hurricane aftermath, Travelers Insurance announced that they are suspending stock buybacks as they try to figure out what their losses are going to be from these two storms. This seems like the 100% sensible move.

Gillies: Absolutely. If there's a huge unknown, if you don't know what it's going to cost you, your business is helping to pay for these types of events and cleaning up after tragic events and massive storms like these -- it's likely that they've probably offloaded some of their exposure on to reinsurance companies as well. But you know they're going to have a significant exposure. And their stock's not terribly cheap, frankly. So buying back a not terribly cheap company, your own shares -- it's about 1.4 times book value, I believe. Twelve times earnings. But really, from an insurance perspective, we look at the book value. The buybacks that they're doing is probably more maintenance than anything else. It's not a screaming value.

And I think it's absolutely prudent to be doing this. I was actually reading up on Berkshire Hathaway over the weekend, where they've done a lot of -- they obviously have a lot of insurance operations as well -- and they've said that since 2005, that with Katrina, Rita, and Wilma, kind of the three sisters, if you will, they've actually scaled back on their catastrophe writing because the pricing hasn't been great. And of course, Buffett and his side man, Ajit Jain, are very well known to be like, "We want to tilt the odds in our favor." For someone like a Travelers, who's much broader, if they have not scaled back, they could end up discovering in the very near future that they've been writing a somewhat unprofitable business. So yeah, absolutely the right thing to do.

Hill: And a nice reminder to always look below the headline. I don't think I'm alone in this, but my gut reaction every time I see any kind of headline where it's "Company X," and it's followed by, "they're suspending their stock buyback program," or "they're cutting their dividend," my in-the-moment reaction is always negative. Like, "Well, that's trouble. That's a problem." And I forget the name of the company, but whoever it was earlier this year who came out and said, "We're cutting our dividend by 75%," and in that case, it's like, "No, you guys are actually in trouble." But in the case of Travelers, it's just smart leadership.

Fischer: And buybacks are a big part of what they've done. The past 10 years, Chris, they've reduced their share count by more than half. They had about 700 million shares in 2006; now they have 280 million shares. So, giant decrease. And they do plan to continue that strategy until there are no shares at all.

Gillies: [laughs] I've never seen one like that.

Fischer: It also helps them increase the dividend every year, typically by 10%. Despite that 10% increase, they pay less or about the same total because they're buying back so many shares. So it has been a big part of their value creation for shareholders, and maybe that's why the stock dipped a little bit on this news. But as Jim says, it makes perfect sense. You need to see what your liabilities are. Because their buybacks are about 70% of their net income, and the dividend is 25%.

Gillies: And what you just said speaks to a long-term, well thought-out capital management strategy. So if you've trusted them, and that kind of performance, having dropped their share count by nearly half over the last decade -- if you've enjoyed that, and you think that's been a good deal, why would you not then trust them to say, "Hey, we're just going to put it on hold right now while we take a look at what we're actually facing here." You hope they haven't written an unprofitable business, but until you can ascertain that properly, it's a good move.

Hill: Do you guys have a preference of what you would rather see a company do with their capital, when it comes to raising a dividend versus buying back stock? Is there one that you would prefer to see?

Fischer: So many companies have become so accustomed to making significant share buybacks that's it's now part of their flight plan, and that's how they're going to get to their earnings-per-share goal. And that's good in some sense, but maybe not so good in others. And one way I think it's not great is, salaries are not going up the way they would have historically. So if consumers are not being paid more, the economy doesn't grow as much, and so on and so on. It's just the company reducing its share count, and only shareholders benefit, whereas greater society could maybe benefit if people were paid a bit more instead of these massive buybacks.

Gillies: I would probably come in on the side of "it depends." It's always that definitive answer -- it depends. I mentioned earlier, what's the valuation of Travelers? It's not overly expensive, but it's not overly cheap. If I see a company that's very clearly been knocked down in a raging bargain, I want management putting as much as they possibly can into buying back their own stock, presuming there's not some really good reason why the company's in decline. But if the company is highly valued, I like my dividend, I don't necessarily want to sell my shares and incur the unfortunate capital gains consequences. So by all means, pay me a bit more dividend.

Fischer: You also have to see how many shares they're issuing to insiders. Are they just papering over that dilution with their buybacks, or really creating value?

Gillies: "We bought back a million shares, but we just gave the CEO $900,000 in free new shares." That's not really a buyback that benefits me as a shareholder.

Hill: Right, exactly. Yum! Brands is putting the whole notion of "there's no such thing as bad publicity" to the test. Yum! Brands, parent company of Pizza Hut. Making the rounds on Twitter and in social media is a memo from a Pizza Hut manager in Jacksonville, Fla., who as Hurricane Irma was bearing down on Jacksonville, Fla., this manager put up a memo to all employees basically saying, "Hey, if you're going to evacuate because of this little Category 5 hurricane that's about to hit town, that's going to be considered time off."

Fischer: "Yeah, and we close the store typically six to 12 hours before the storm hits."

Gillies: Because you know what I want before a hurricane destroys my home? I want a pizza.

Fischer: Yeah, there's so much that was wrong with this, starting with calling everyone "team members" in the note, and then kind of saying, "You're our slave who has to work here." You're not really a team member in that case. But where this is egg on Yum! Brands' face is, this is a franchisee. They don't own the store.

Hill: Right. This is not corporate policy.

Fischer: Right. And that's why you have to look to Starbucks, who has decided to own all of its own stores, and it can build a better brand over time because of that. This is one disadvantage of franchising your stores. I read the memo that the manager posted, and I think the intention was, and I'm going to take flak for this, maybe, was to provide service to customers in a way that was not disrupted unduly by the storm. It said, "You'll still have plenty of time to evacuate," and so and so. But it was extremely misguided and not well thought out.

Hill: Yeah.

Fischer: I don't know if the person is a bad person. I'm not going to assume that's the case. I think they meant to be the best manager they could be. But hopefully they'll never make this mistake again. But it also speaks to the power of social media now. We would have never heard about this even six or seven years ago, maybe. Ten years ago, definitely not. And now, giants even like Yum! Brands have to watch what every franchise does, because it can come back and bite them just like that.

Gillies: Yeah. It's this type of public shaming, we'll call it. It's been interesting. You saw another example with Hurricane Harvey a couple of weeks ago, with a megachurch preacher whose name escapes me --

Hill: Joel Osteen.

Gillies: Him, yes. He, I think, got taken to task on Twitter as well. Maybe it's Twitter's fault. I saw this morning that Yum! Brands was distancing themselves from this manager with the blowback. And again, I think Jeff is correct here -- this person probably didn't mean horrible things. They probably thought they were helping, probably thought they were offering good management at a time of crisis. But they're now probably going to experience their own time of crisis, because I don't think the corporation is going to have their back here, and they've already kind of distanced themselves, and this comes across as overmanaging.

Hill: And to bring it back full circle to Pizza Hut, there were managers of Pizza Hut franchises in Houston who were getting all kinds of credit because they were giving out free pizzas. There was one woman who was a manager of a Pizza Hut who's pregnant, and she was kayaking pizzas to people who were at shelters, and that kind of thing. So it's like, all this tremendous goodwill, and a lot of it has been given up as a result.

Let's close on a completely different topic. I teased this at the top. This was, as I told people from time to time, they're like, "How do you put together the show? How do you pick your topics?" A lot of times, it's me sending a note to whoever is going to be on the show and saying, "Here's a few things we could talk about; what would you like to talk about?" I emailed a few ideas to you guys, and Jeff, you sent a note back because you and Jim were together, and you said, "Jim thought it might be interesting if we talked about countries instituting an ice ban." And I looked at that and I was like, countries want to ban ice? And then I was like, oh, it's ICE, all capital letters, internal combustion engine, OK, there we go. OK, countries aren't looking to ban ice. Because who wants nothing but warm beverages?

But you were saying, Jim, before we started taping, and I'm going to paraphrase, my take from what you said right before we started taping was, "This might be one of the biggest and yet simultaneously under-covered business stories going on right now."

Gillies: I think so. What catalyzed this -- electro-chemistry joke in there. Sorry. There's rumblings that China is going to join other countries like France, Britain, about putting a timetable on when they're not going to allow internal combustion engine automobiles any longer.

Hill: Allow them to be produced? Or allow them just on the roads, period?

Gillies: Little of column A, a little of column B. I think, I imagine, let's say the year is 2030 when one of these countries is going to ban these cars. I imagine if you have a 2029 gasoline-powered car, you would probably be fine, in terms of you would grandfather it out. But eventually you would have no pollution spewing -- and if you've seen pictures of Beijing and Shanghai and some of the horrible air conditions in some of the cities in China, you understand why China is now talking about doing this and joining in.

But that has the potential to completely overturn so much of what we have in the business world. You start saying you have countries outlawing gasoline-powered cars. What does that mean for the carmakers? What do Ford, Chevrolet, how are these carmakers going to respond? Volkswagen is already talking about 25% of their cars being all electric by a certain date. GM, of course, has the Chevy Volt coming out, which they are very keen to tell you has a longer range than the Tesla (NASDAQ:TSLA) Model 3, which, of course, is Tesla's mass-market.

What is this going to mean for oil production, oil companies? Everyone sitting at $50-a-barrel oil, versus three years ago, $100-a-barrel oil? This is actually very important from where I sit up in the Great White North, because our market is very tied to resources. So there's all kinds of Canadian investing pundits who are saying, "When oil comes back ... " If the world is moving away from ICEs, oil might not come back in the way you think it might come back, which then takes off a lot of production in the Canadian oil sands and what have you. So it's this huge, many-tendriled story that, I'm not sure there's any direct investing implications that I can draw yet. And Jeff might be faster on that one. But I think it's this huge story that has this great potential for change, and we're all worried about the Apple event today.

Hill: [laughs] Not worried about it.

Gillies: But you know what I mean. That's what gets the headlines.

Hill: Right.

Gillies: And China, unlike a France or a U.S. or a Canada, should we go down that road, if the China brain trust says, "No more gasoline-powered cars," they kind of have total authority. They're going to do it, and you're done. So there's so many implications. I think you could be thinking about this for years.

Fischer: Yeah, definitely. You have France and the U.K. banning these engines by 2040, which sounds far away, but it isn't too far. You have Norway hoping to get there by 2025, very soon. India, by 2030, will only sell battery-powered cars, or at least not combustion engine cars. This is all pretty close around the corner. Netherlands, 2025. Germany, 2030. And now the rumor is China by 2030, or 2040?

Gillies: I think it's 2040 for them. But I mean, they'll decide what they want.

Fischer: So these are giant changes, and they sound almost impossible, but they're really not. If anything, they're lenient. How quickly did General Motors move to tank production for World War II? It changed over its assembly pretty quickly. We have the technology now -- you could probably get to all electric, if it was decreed it must happen within five years, you could probably do it. So giving people 20 years to do it shouldn't be a problem. Yeah, what does it mean? It means a lot more competition for Tesla.

Gillies: And a lot more validation for Tesla, too, right?

Fischer: Exactly.

Hill: We've talked before about, just to go completely away from automotive, about companies that have innovated in a particular industry and their idea ends up being the winning idea, but over the long run, they end up not succeeding in the way that, let's say, for example, an Apple has succeeded. You can look at organic food and point to Whole Foods and say they were revolutionary in what they were doing, but then large companies like Wal-Mart and Target and others said, oh, we can do organics. We can't do it, maybe, to the level that Whole Foods is doing it, but we can get organic enough.

Fischer: Chris, you know what usually drives that? It's the competitive barrier and its pricing power. If you can keep your prices and your margins like Apple, and that's a point I should have made earlier -- we expect to see the average selling price of the iPhone actually go up. Ten years ago, nobody would have ever said that it would go up. Everyone said the prices are going to come down, they're going to lose their high margins. That hasn't happened. It does happen to a Wal-Mart, or really, I should say, to a Whole Foods. You have competition move in, you have to fight on price, just as we saw, and your margins go down.

So will that happen to Tesla? It has the brand cachet to fight that off, and the technology, frankly, technology lead to maintain premium prices so far. But yeah, that's exactly what you're talking about, Chris. The leader ends up, their margins get eaten away, and they no longer lead in the same way.

Gillies: Or they get out-innovated. I mentioned earlier, tongue in cheek, Research In Motion was the smartphone maker of the early 2000s. And then they mucked it.

Hill: Yes. When the iPhone came out, they had 41% market share, something like that.

Gillies: Today, they're --

Hill: It's lower.

Gillies: -- staring up at 1%, hoping to eventually get there.

Fischer: [laughs] It's lower.

Gillies: It's lower. But yeah, it's because the incumbent in the industry, the incumbent leader didn't see what was coming in as a threat. So is Tesla going to see what's coming as a threat? Do they see the Volt as a threat? Probably not.

Hill: Do you know when we're really going to know that electric vehicles are here to stay? When someone starts charging people money to charge their car. Because right now, it's like, part of the economic proposition of buying an electric vehicle is, well, "I don't have to pay for gasoline. I could just charge my car for free." At some point in the future, a gas station is going to go out of its business, and in its place is going to be a charging station.

Gillies: Can I tell you, that's already happened.

Hill: Really?

Gillies: Yeah. Over this past weekend, Tesla, of all people, opened up full-service charging centers in Boston and Chicago, where we were, and right now, I'm not too sure about the mechanics of it, the S versus the X versus the 3. But they're saying that buyers today, which I presume is the 3, because I thought the S and the X always get free charging, they get 1,000 miles per year of free charging, and after that, they're going to be charging for an amount there.

Hill: What are they charging?

Gillies: I don't know. They're charging the car.

Fischer: That's a lot of charging that's going to go on.

Gillies: But you're exactly right. You're going to start seeing people -- a friend of mine has a Nissan Leaf, which is another electric vehicle. Doesn't quite have the range of the S. So to go to Toronto from where we live, which is less than an hour away from Toronto, we'll quite often stop and charge up at a free thing in the middle of an industrial parking lot. And it's free, but we're standing around. It's like, "Oh, you know, a supercharger would be nice."

Hill: I'm sorry, an hour-long drive and you have to stop and charge your car?

Gillies: Yeah.

Hill: That's pretty weak.

Fischer: You should just ride a bike.

Gillies: Been there, done that.

Fischer: You have to ask where all this energy is being generated. If it's coal generated, it defeats the whole purpose.

Gillies: It defeats the purpose.

Fischer: So China and everyone else trying to move to solar and other clean sources. So then, Chris, it all comes full circle, of course, to what happens to the oil giants. What does their future look like? I just know I don't own any. 

Gillies: And we avoid -- as I said, of course, Canada, there's a lot of resource stuff in Canada, and we try to basically stay away from anything with direct exposure, because maybe you guys can, but I certainly can't predict the price of oil or gas with any kind of confidence, and I've never met anyone who can.

Fischer: It's could be like cigarettes. Cigarette usage in the U.S. has declined for decades. Morgan Housel points this out to us. And yet Philip Morris has been one of the best-performing stocks on the entire market. Or whatever it's called now, I don't even know.

Gillies: Altria?

Hill: Altria.

Fischer: Altria. Still a terrible name all these years later. Maybe oil giants will do that for some reason. Maybe emerging markets will keep -- but here's the difference, I think, though. Emerging markets are leapfrogging right to the cleaner -- and cheaper, in many cases -- energy sources. Ans so, could spell trouble for oil.

Hill: It's not a great name, but it's still better than Tronc.

Fischer: Tronc.

Hill: What was it like back in Chicago? Has the Tribune Building been renamed the Tronc Building?

Fischer: [laughs] Not yet.

Gillies: Didn't see it.

Hill: It's so pathetic and sad. All right, Jim Gillies, Jeff Fischer, thanks so much for being here, guys!

Fischer: Thank you!

Gillies: Thank you!

Hill: As always, 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 Market Foolery. The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening! We'll see you tomorrow!

Chris Hill owns shares of Starbucks. Jeff Fischer owns shares of Apple, Facebook, Starbucks, and Tesla. Jim Gillies owns shares of Berkshire Hathaway (B shares), Facebook, Starbucks, and Tesla and has the following options: short October 2017 $57.50 calls on Starbucks, short January 2018 $95 puts on Apple, long January 2019 $52.50 calls on Starbucks, and short January 2019 $52.50 puts on Starbucks. The Motley Fool owns shares of and recommends Apple, Berkshire Hathaway (B shares), Facebook, Ford, Starbucks, Tesla, and Twitter. The Motley Fool has a disclosure policy.