For this episode of Motley Fool Answers, Robert Brokamp and Alison Southwick enlist Motley Fool analyst Seth Jayson for a discussion of comeback stocks, focusing on a few well-known companies that have been beaten down, then turned things around for patient shareholders. They also consider the kinds of circumstances under which Foolish investors will want to jump into stocks that are in the midst of being punished by Wall Street, and consider generally how to apply this strategy without trying to "catch falling knives."
But first, this past week was the 10th anniversary of the bankruptcy of Lehman Brothers, so in their What's Up, Bro segment, they reflect on the worst U.S. downturn since the Great Depression, the nature of the recovery, and what "getting back to normal" meant this time around. And with the luxury of hindsight, they offer a key takeaway to remember next time the market and the economy tank.
A full transcript follows the video.
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This video was recorded on Sept. 18, 2018.
Alison Southwick: This is Motley Fool Answers! I'm Alison Southwick and I'm joined, as always, by Robert Brokamp, personal finance expert here at The Motley Fool.
Robert Brokamp: Greetings, Alison!
Southwick: In today's episode, with the help of Motley Fool analyst Seth Jayson, we're going to talk about comeback kids and learn how a few beaten-down stocks have turned it around. We'll also get advice for investing successfully when a stock takes a hit. All that, and more, on this week's episode of Motley Fool Answers.
So, Bro, what's up?
Brokamp: Alison, I recently had a bit of a flashback. I was reading The Wall Street Journal, an article by Jason Zweig, and he told the story of a guy named Barry Popik who on Sept. 1, received a check for $35.98, and that's all that's left of the $25,000 he invested in Lehman Brothers preferred stock in February of 2008. Mr. Popik had already owned Lehman Brothers common stock at that time. It's implied that he inherited it from his parents, who got it from his grandparents, so it was already in the family. He was familiar with the company. Plus, at that point, the company had just reported record revenues, so he was pretty comfortable with it.
And the reason it brought back memories is because this preferred stock at the time yielded almost 8%. And my mom called me and said, "Hey, Lehman Brothers has this new preferred stock, 8%. Should I get it?" And I said: "I don't really know enough about the company. I'm no big fan of preferred stock, so I wouldn't do it." Fortunately, she took my advice.
Southwick: Oh, good!
Brokamp: Because, as we all know, we're now celebrating the 10-year anniversary of it. Lehman Brothers went bankrupt on Sept. 15, 2008. And the thing about that story is that I'm sure Mr. Popik was thinking what my mom was telling me, and that was Lehman Brothers is this huge company. It has been around since 1850. It was one of the oldest companies that was still publicly traded. What possibly could go wrong?
But, of course, it did go wrong. And it's not the only one. Bear Stearns, of course. Washington Mutual. And the market, itself, went down more than 50%.
So I was thinking back to those days and one of the things I kept thinking was whether we are ever going to get back to normal, because so many big companies were down significantly. The market was down. It was the worst recession since the Great Depression.
Well, here we are 10 years later, so let's look back. Did things get back to normal?
So, what is normal? One thing that is normal that we always talk about is the stock market historically [the U.S. stock market, at least], has returned 10% a year. What has the S&P 500 returned over the last decade since the bankruptcy of Lehman Brothers? 11%. 1%. So it's done even better.
One thing that is also normal is that small stocks, over the long term, outperformed large stocks. Did that happen over the past decade? Yes.
Brokamp: Check. They returned about 11.7%. And the other thing that's normal is that over the long term, stocks beat cash and bonds, and that has definitely happened. Cash basically has returned nothing over the last decade. Just recently have you now been able to earn a little bit on your cash. The bond market returned a little over 3%.
That is actually better than a lot of people thought because with interest rates going up, a lot of people thought there would be just horrible returns for bonds, so they're returning 3%. Not great, but better than cash and it's a pretty safe investment.
All that said, there are some things that either were abnormal or at least of note. The day after Lehman Brothers declared bankruptcy, there was a big money market fund that basically lost 3%. Money market funds traditionally traded as a dollar a share, and people were treating them as cash. But because this fund owned so much Lehman Brothers debt, it actually dropped in value, which was something that had never happened before. And since then, there have been new rules put in place to prevent that from happening, but that is something that has changed.
Also, not other types of assets have done as well. For example, commodities have actually lost money over the last decade. That is also something that is extremely rare in history, and when it started happening in the first few years after the Great Recession, commodities were covered OK, but then started significantly underperforming U.S. stocks, and there were articles coming out like they've underperformed stocks, now, for three years to six years. That's never happened. This is going to turn around at some point. But it still hasn't, so it's another example of where the future turns out a little bit differently than history.
And then finally you look at international stocks. International stocks have done OK, but not as well, so they've returned, on average, a little over 4% a year. So over the last decade, U.S. stocks have outperformed international stocks by 7% a year. That is also a pretty extraordinary run in terms of the difference between the two.
Still noteworthy, but not as unusual, is that over the last 10 years, growth has outperformed value by about 3% a year. That happens all the time, but those switch places. So anyone looking to weight their portfolio one way or another based on what's happened; I would say you might want to tilt your portfolio a little more toward value, because history shows that after a decade of growth outpacing value, generally speaking, the next decade is different.
For me, the bottom line of all this is for those who were really panicked in the throws of the Great Recession and managed to hold on to a diversified portfolio, history has shown that it's the right thing to do. But, there were things that happened that people didn't expect. People didn't expect a company that was formed in 1850 to go out of business. People did not expect commodities to lose money over the next decade. And people didn't expect, necessarily, that international stocks would be trailing U.S. stocks so much.
Southwick: So basically what you're telling me is that some things remain the same and some things will be different.
Brokamp: Exactly! So you have to own all the things...
Southwick: Profound thoughts...
Brokamp: ... so that no matter...
Southwick: Profound thoughts with Robert Brokamp.
Brokamp: ... so no matter what happens, your financial plan will be OK.
Southwick: But seriously, is the advice just to be diversified?
Brokamp: And to account for the fact that really some things that you expect to happen won't happen.
Southwick: That's the resident awfulizer I love to have in this studio.
Brokamp: And it could be good. It could be something that you expect to be not so great turn out very well, but you just don't know when it's going to be.
Southwick: So the craziest thing happened this last week. I go to check my scorecard and Lululemon (TSX: LLL) was beating the market. Was it this week or last week? Well, in their time it's...
Brokamp: In the recent past.
Seth Jayson: In the recent past it was up pretty big.
Southwick: Which made me think, "Wait. Wait. What?" Because I bought that stock a long time ago and forgot about it, and it did nothing. So I was pleasantly surprised to see what happened. And then I thought: "You know what? What about some of these other comeback stories? Let's have Seth Jayson, Motley Fool analyst extraordinaire, come in and tell us about comeback stocks; stocks that took a beating, how they came back, what happened, and also whether you should you invest in stocks when they take a little bit of a hit?" All that and more, right now, with Seth Jayson.
So in the studio, today, we have Seth Jayson. Seth, you've been on the show before, but why don't you just remind our listeners a little bit of how you came to The Motley Fool, how long you've been here. That kind of thing.
Jayson: Oh, wow! About a billion years now. Is it 15? It's 14 years I think...
Brokamp: 14 years.
Jayson: 14 years, yeah.
Brokamp: Don't we have the same Fooliversary? What's your Fooliversary?
Jayson: No, you've been here longer than I have, but...
Brokamp: But the same date.
Jayson: I came in when we were just starting to recover from being almost squashed flat by the whole dot-com thing. I think that was 2004 or something like that? We were just getting out of not being a zombie anymore.
Southwick: And a new business model of membership subscriptions...
Jayson: And a new business model.
Southwick: ... as opposed to ad-based.
Jayson: Yes, actually charging for some of our advice. I started out just as a writer and analyzing the stocks as an analyst and then moved into picking some of the stocks at Hidden Gems. Now I'm doing the small-cap stock picking at Market Pass, which is kind of a conglomerate of extra pieces tacked onto Stock Advisor and Rule Breakers. And so I know the stories of some of these stocks, like Lululemon, which was a Hidden Gems pick for me. And part of the reason you didn't see a return, and you don't remember a return on Lululemon is you owned it when it was super awesome...
Jayson: Before YogaPantsGate.
Southwick: Yes! Yes! So we're going to talk about a few specific stocks and their comeback stories, and then we'll talk a little bit more generally about stocks and whether you should invest in them when they take a hit. Let's start off by talking about Lulu, one that's very close to my heart.
Yes, I bought it when everyone said this is the best company ever. It's amazing. And then a few things happened.
Jayson: Yeah. It was super expensive looking. I thought it was pretty silly, the price, but even at the time the amount of money they were making per square foot of store was just incredible. And then they had some yoga pants go see-through, or the reports that thigh rub was abrading them and they'd become see-through very quickly.
Southwick: And the CEO said some crazy things, too.
Jayson: I think what he actually said was more along the lines of, "Some women's body types don't work with our clothing," which was, I think, not unfairly interpreted as, "You're too fat to wear our clothes."
Jayson: Which is a problem when most of your business is to women...
Southwick: And getting fit!
Jayson: And they're getting fit. And so he had to leave as a result of this, and they had to do a lot of clean-up. I'm trying to look at my notes, here. In early 2014 or late 2013, the stock was somewhere around $75 and it went down. In late 2014 it was near $35. So it got cut about in half as a result of YogaPantsGate, as well as the CFO was leaving at that time. And this is about the time I took it on at Hidden Gems, even though I had been a skeptic on the company. I like to, every once in a while, buy a stock that I think is ridiculous just to remember that I don't know everything.
Southwick: You bought it as a lesson?
Jayson: Lululemon was one I started looking at wondering, "Well, no, now what does it look like because this thing has done a lot better than I thought for so many years." It looked to me like a brand that was still very strong and that had issues that could be overcome. And indeed that was the case, but it took a couple of years for the comeback to really take hold. The stock sort of spent a couple of years flirting and getting back up to $75. But they were making progress with, first of all, apologizing. Getting the product better. And then coming out with new product.
And then they really hit their stride in 2017 and started getting the sales growth going again and they also, at that point very importantly, started to do a much better job with online sales and were very targeted so that other companies that are doing business online wouldn't be pulling away from them quite so much. And they have been on a tear since early 2017. The stock is now at about $150. And interestingly, this latest quarter, which was a record quarter stock, is at an all-time high, right now, or close to it.
It was done without a CEO really running things, because the replacement CEO they had was ushered out not so long ago and we're not exactly sure why, but it seems to be one of those human resources kinds of issues.
Southwick: So a company that could be run by no one could still be successful.
Jayson: Yeah. And they just brought in a new CEO and I'm kind of going, "Why mess with success? It seems like all of the top people reporting to the CEO could just do fine as a committee, which is presumably what they've doing." So that's a pretty interesting lesson about a company with a strong brand that came back. They don't all go that way, of course.
Southwick: Let's move on and talk about another company that has been in the headlines a lot, Chipotle (CMG -0.96%).
Jayson: This is an example of one that has sort of come back, almost, but not quite so much.
Southwick: I remember Tom Gardner went to some restaurant convention and everyone was like, "Oh, yeah. Chipotle's going to come back. They're great. They're going to come back." And it's just taken so long.
Jayson: And this was a much more complex situation. Chipotle, at $750 a share or so back in 2015, was a company that was not only very richly priced based on its current operations, but everybody had this idea that, "Oh, Chipotle can open whatever kind of restaurant they want, because they're really a platform for great restaurants."
Southwick: Pizza. Thai food. Or was it Vietnamese?
Jayson: ShopHouse, yeah. I always thought that was kind of BS. I owned the stock at that point, and I thought that was really overblown. But then they started giving people diarrhea. They had a whole bunch of food safety problems and it became evident that they, despite bragging about how great their food safety culture was, it really wasn't so great. It was nowhere close to best in class.
Best in class would be something like McDonald's. Now, this is ironic. McDonald's had grown Chipotle. They owned Chipotle for a long time, and they taught Chipotle how to do a lot of what enabled it to become successful, but somehow Chipotle had not absorbed the lessons on food safety.
So Chipotle dropped down into the $500-ish range. It sat there for a couple of years until 2017 and then started making people sick again and then it dropped down. It was like $270 a share not so long, ago, and it's back up to $500, so the comeback is sort of there. But by now we know that first, it costs more money to do things more safely, so Chipotle's margins aren't as good. And the other is I don't think anyone believes, anymore, that they can just open whatever kind of restaurant they want. They're not a restaurant platform. And quite frankly, I still worry about the valuation now. I still own a lot of shares, but it seems expensive to me.
Now they've got an ex-Taco-Bell-er running things and people expect a little less pompous food culture and a little bit more of, "Hey, let's give people what they want."
Southwick: And as someone who works with reporters [because my job is PR], I wonder if they hadn't have had so much of that pompous food culture, as you called it, would reporters have latched onto the story so much and would it have been as damning as it was to the company, because it was a story that reporters loved to report on. Chipotle, the place is supposed to be amazing. Oh, guess what? They're not.
Jayson: Yes, they brought some of that on themselves. In some of the early reporting, even before they started making people sick, The New York Times showed just how many calories were in a Chipotle meal. It's just enormous. And Chipotle's own marketing was touting the size of its burritos, so they had these messages that were kind of at cross-purposes, because by telling people, "Oh, we're getting rid of GMOs, and everything's so natural," you're strongly hinting that this is healthier than the average food. And really, they were getting so much fat, salt, and calories that if you ate one of these things, it was almost a full day's worth of calories for a regular person.
The only kind of person who could eat that...
Southwick: Is you.
Jayson: ... would be me, running 10 or 15 miles a day.
Southwick: For those who don't know, Seth Jayson is an avid runner.
Jayson: So you put in an extra 500 calories and that's four miles of running, or so, you need to do to get rid of that.
Southwick: It is. You have to run so far!
Jayson: I know, because when I run, I have to put the extra calories in to avoid wasting away.
Southwick: I don't have that problem.
Brokamp: You're like 6'3" and like what? 150? How much do you weigh?
Jayson: I weighed myself yesterday. In the evening it was 162.
Brokamp: Oh, God!
Jayson: Which is up about eight pounds from a few weeks ago, and I just wasn't hungry, but I was still running.
Southwick: Should we move on to talk about a company that I don't know anything about?
Jayson: Yeah! Lets!
Southwick: This is Drew...
Jayson: Well, it was Drew Industries and now it's LCI Industries (LCII 6.59%). They make a lot of higher-end components for RVs. Years ago, it was also a lot of mobile home stuff. It was window panes and things. Now I think of fancier stuff like self-leveling systems and electronics systems that are incorporated inside travel trailers and even motorized RVs.
This is a company that I think is one of the comebacks that's a little easier for investors to spot. I tell the story of this one. This is a cyclical company, because it's in the RV business, and RV sales tend to be cyclical. You sell a bunch and then people stop buying so many, and then they go down. Well, in the Great Recession, RV sales really cratered. People were not going to spend money on big-ticket items like that. This stock, I will just point out, at that point was $6 a share. Six months ago it was about $120.
What happened was after the recovery, we had the longest RV market recovery that I think I've ever seen in history. The absolute level of RV sales, I think, is still below the high-water mark which was in the seventies at some point. But RV sales have just been on an incredible roll.
And LCI, formerly Drew, sells componentry to all these manufacturers. Think of Thor which does Airstream. All the Buffett companies that sell RVs. Winnebago. A lot of them are using lots and lots of LCI components and LCI is not only very good about being profitable while making this stuff, it's very good about using its cash that it generates to acquire related companies and fold them in and improve margins and improve the sales.
This is the kind of company that should be on everybody's recession wish list. It's a company that's going to get pounded when we get a recession, but it's such a good company with such a long history [as long as the balance sheet stays good, which it has] that it's the kind of thing you watch. You wait until everybody hates it and you buy it because it has a much higher chance of having a really great comeback than a company like Chipotle that relies on a brand and just may never get that back.
Southwick: I remember the storyline around RV sales was all the baby boomers are going to retire and they're all going to buy an RV and they're going around America and it's going to be great for the industry. But then that didn't happen. Somehow, I feel like the storyline became that RVs aren't popular anymore because they're gas guzzlers and who needs them. I guess I'm trying to understand a little bit more when you talk about it being cyclical, because it felt like it was more of a big trend and it could be hard to say. Well, the RVs are going to come back. Maybe millennials are going to love camping and they're going to want them.
Jayson: That's turned out to be true, actually. A lot of the growth in the market over the past five years has been to younger buyers. The age has been coming down and people do like to buy these things, drag them, and "camp." And I put camp in quotation marks because for me that means sleeping in a tent and not next door to somebody else at a campground or you're sitting in something that's pretty much just the same as your house.
But the RV industry has done a very good job of creating some cheaper options that still have the amenities that younger buyers want, so the profit levels on those aren't always as good, but they're good enough and they sell in high-enough volumes to really have helped not only the RV makers but the components suppliers like LCI.
Southwick: Let's move on and talk about TripAdvisor (TRIP 4.57%). This stock has been a Motley Fool recommendation in some services [I don't know if it was in yours] ...
Jayson: We were ahead of it. That was early at Hidden Gems. It was a spinoff, and so one of our special services that did that kind of stuff recommended it. And then I looked at it for Hidden Gems, and we had it from the mid-$20s I think. Then it went all the way up to the low $110s and then bad things started to happen.
Southwick: Well, bad things happened because, as a traveler, I loved TripAdvisor. I never bought the stock, and then I never paid attention to it again. So what bad things happened to TripAdvisor?
Jayson: It was mostly ad-based sales.
Southwick: And sorry for our listeners. TripAdvisor offers...
Jayson: Hotel reviews was primarily how it started, so selling hotel ads next to those reviews was really the business. And it did a very good job of that. It made a lot of free cash flow and was trading in the $110 range in 2014. That was quite a ways up from when it was spun out of Expedia.
After that they had to change the business, because there were industry changes. There was something called metasearch, where you needed to search across different platforms to find the best prices and start to format the results differently. Then you needed to reduce the friction to get buyers to the hotels more quickly. It started to be a thing where if it takes people four clicks to book their hotel they weren't going to do it, so you needed to switch things around so it was one or two clicks.
This reduced the opportunities for ad revenue for TripAdvisor. Some of this was self-inflicted and I think was the right move. They were looking ahead, seeing where the market was going, and they were taking short-term hits in the hopes of continuing to build the brand and looking out for the long term.
And then they started to get a little bit more competition in reviews. If you think of Yelp or you think of just your Android phone in your pocket, sometimes it's just easier to look at those Google reviews.
Southwick: Google, yeah.
Jayson: Even though I probably trust the TripAdvisor reviews a little bit more, at least on hotels, but now there's so many reviews on other platforms that a review is almost a review of a review. So they've lost an edge there. And at the same time, you had Trivago Guy. I don't know how many of you are sick of seeing Trivago Guy, but I watch Hulu a lot when I'm on the treadmill, and for a while that's all I saw, was Trivago Guy.
Southwick: Haunting your dreams.
Jayson: I know. And Trivago Guy really bugged me, and it especially bugged me because as a TripAdvisor holder and understanding the business as somebody who'd recommended it, they were basically saying, "We look at all these things and find you the best deal." Well, that's what every single site does. They weren't offering anything different. When I think of Trivago, I think of an example of it as sort of irrational competition. They were burning money trying to get market share and to run these ads. To run ads on the internet in order to get traffic.
Well, that still hurts a better player and I say TripAdvisor was a better player, and so not so long ago TripAdvisor was back down to the $28 range, and now it's still only about in the $50 range. Now, they've expanded their offering. They do things like tours. You can book tours when you're in the market and a lot of that is very smart, but I don't know if they'll ever get back to where they were because the business, although it's bigger in terms of traffic and the breadth of what they offer, it's not as profitable as when they were sort of the No. 1 game in town just selling ads.
Southwick: So a comeback in the process TBD.
Jayson: Yes, it's a comeback from $28. It's a double over a year or so, but from here it's tough to tell. I actually sold my shares a while ago because I just had been wondering about the erosion of the form of competitive advantage in terms of reviews.
Southwick: So not all of these stocks took a hit for the same reason. Some were an idiot thing that CEOs said and did compounded by see-through pants. Some were bathroom-related issues. Some were larger trends. Let's talk a bit more generally about analyzing a company when the stock has taken a hit and whether you see that as an opportunity or not. One example that we talked about, here, was when the brand takes a hit. Like Lulu and Chipotle, would you say the brands were hit?
Jayson: I think those are mostly brand hits. That's the toughest thing to figure out especially, at the moment, because we look back, now, with hindsight and we try to draw lessons, and the lessons we draw are invariably wrong, because we can't remember what it was like when we didn't know the outcome.
And so brand hits are among the toughest and, in general, if a company is a bit unique, maybe like a Lululemon or a Chipotle, you're probably doing well to hold or to even initiate a position when everybody hates it with the full knowledge that you may not get it right.
In terms of the investor action that I think works best to take advantage of these situations, it's in general buying the good businesses even before they've crashed or when you've seen them crash and you still think they're decent and then holding on to them, because in some of these we've got some companies that have returned four or five times, and then some others [I've picked them] they're down 80% and they're never coming back.
Well, if you've taken a reasonable position in each of them, you've got a four- or a five-bagger next to an 80% loss, you're doing pretty well, and so the best way to make sure that you can get returns that are based on some of that is to just hold on to everything.
Southwick: One of the more famous moments here at The Motley Fool when it comes to a downturn is, of course, Qwikster. The Qwikster debacle when the CEO announced... I don't even remember exactly what Qwikster was.
Jayson: Don't get me started on this one. I have the worst story about this.
Southwick: I want to know what side of history you're on with Qwikster, because if I remember right, The Motley Fool's divided. Some analysts were like, "No, the strategy is dumb. The company's done."
Jayson: Oh, I thought it was stupid, but I figured they'd change it. Here's what happened to me. I put it on my list of stuff to buy because I was like, "Finally Netflix is cheap enough for me. It's looks reasonable enough for me to buy." And then I just forgot to do it that week, and then I looked at it later...
Brokamp: It happens to all of us.
Jayson: And it was up. I don't know if this was directly after Qwikster or one of the other drops, but it was one of those drops. And then it jumped back pretty quickly and I went, "Nah!" And then the next time I checked maybe somebody was recommending it and I was locked out. I just never did it. And there's a zillion times when I should have said, "OK, it looks expensive but I'll just buy some anyway." And I just never did until now.
And so another lesson I have is if you see a world-beating company like that [and I do this more now than I probably ever have], forget the price. Take a small position. Don't go plowing a bunch in, but I've done that on several companies lately that I think might be big leaders in their fields. Just hang on to them, because missing a 40-bagger on Netflix because you just forgot to look at your to-do list... It was literally on my to-do list and I just didn't do my to-do list.
Brokamp: I have a list of about 20 of those, so don't feel bad.
Southwick: Before we go, what's your bottom-line advice when looking at stocks that have taken a hit?
Jayson: If you hold that stock and you have a lot of confidence in the team, I think you just keep hanging on to it. Try not to double down, because if you hold the stock and you have confidence in the team you're probably overconfident. If you're an outsider watching what you think is a company that was doing a pretty good job and it looks like they should have a handle on it, then I think you should go ahead and take a position at some point and just acknowledge the fact that you might be wrong and it might continue to go south.
And then another thing -- this goes back to Mr. Steve Broido and maybe his father's advice -- which is when you see that first piece of bad news, you can wait a while because that's not always the last piece of bad news. You don't have to get in on these drops right away. There's often something to be gained by waiting a while, reading the conference calls, and seeing how they're addressing the underlying problems.
Southwick: As always, The Motley Fool may have formal recommendations for or against the stocks that we've talked about here, so don't buy or sell stocks based solely on what you hear here on the show. Seth, thank you for joining us! Would you like to stick around and talk about some comebacks of another nature? You have no choice.
Jayson: Boy, now I'm intrigued. I guess I do.
Southwick: You're stuck with us.
Southwick: Well, now that we've talked about some company comebacks, let's talk about some verbal comebacks. Witty retorts. Historic ones. We're going to see how smart you are on identifying some trivia around some historic comebacks.
Jayson: I only ever have good retorts. Like an hour later, you go, "Oh, that's what I should have said!"
Southwick: Right. Zinger. Well, you don't actually have to come up with the retort.
Jayson: Oh, OK. Judge them?
Southwick: Well, it's a game. You'll figure it out. Let's start with an easy one. As printed in The New York Times many many years ago, an unnamed woman said to this prime minister, "If I were your wife, I'd poison your tea," to which he retorted, "Madam, if I were your husband, I'd drink it."
Does everyone have an answer in mind?
Jayson: As to who did it?
Southwick: As to who said, "If I were your husband, I'd drink it." This famous prime minister.
Jayson: Wow! I want to say Churchill.
Brokamp: It was Churchill!
Southwick: It was Churchill!
Brokamp: It definitely was Churchill.
Southwick: All right. According to QuoteInvestigator.com, Churchill was quoted as saying this in The New York Times and it was later recounted in a 1952 book with the woman being identified as Lady Astor. However, the joke has actually been around since 1899 in various forms. So while he may have said it, he was not the first one.
Jayson: It sounds too good to be true.
Southwick: A lot of these sound too good to be true. The next one. Around 350 B.C., King Philip II of Macedon began invading Greece. As he continued his march, he sent a message to Sparta. "If once I enter into your territories, I will destroy ye all never to rise again." Sparta sent a one-word reply. What was it?
Jayson: Oh, I'd love to say it was, "Nuts!"
Brokamp: I was going to say, "Nuts!" 300?
Jayson: This is Spartaaa! Wow, what was the reply? I don't remember this.
Southwick: The guy said, "If once I enter your territories, I will destroy ye all never to rise again."
Jayson: I should know it and I don't.
Southwick: The answer is, "If!"
Southwick: Yes, Sparta. Another fun rhetoric. When told to lay down their arms by King Xerxes, Leonides replied, "Come take them!" But probably like much more aggressively as opposed to enthusiastically.
Brokamp: And probably not in English!
Jayson: And he jumped in slow motion!
Southwick: He did! That was in the movie and they're like actually...
Jayson: And the blood flows. Draagghh!
Southwick: All right, next question. John Montagu, the 4th Earl of Sandwich and John Wilkes, an 18th century member of Parliament, did not get along. They were political enemies and, apparently, they pranked each other a lot at The Hellfire Club. I don't know. Anyway.
It's been recounted in a couple of books that Montagu once said to Wilkes, "Sir, I do not know whether you will die on the gallows or of the pox," to which Wilkes reportedly replies, "That depends, my Lord, on whether I embrace your Lordship's principles or your blank."
Jayson: Wife. It's got to be wife.
Southwick: Close. Mistress. Yes, so there's some dispute that the exchange happened and whether it was actually John Wilkes, but it was printed in a few books of fun facts.
Jayson: That's a VD joke, right there.
Southwick: There you go.
Brokamp: Yup, there you go.
Southwick: The Earl of Sandwich, in this story, is the one that invented the sandwich -- the actual sandwich.
Jayson: Didn't want to get ham juice on his cards, rights?
Southwick: Yup. I assume at The Hellfire Club. And the Wilkes in question was known as the ugliest man in England, but he was apparently somewhat charming. He said, "It only took a half hour to talk away his face."
Brokamp: I've got to use that one.
Jayson: It takes me so much longer than that.
Southwick: He was a supporter of America during the War of Independence and [I'm 99% sure], he's the guy who Wilkes Street in Old Town is named after.
Brokamp: I don't know.
Southwick: John Wilkes!
Brokamp: Based on your research, or just your hunch?
Southwick: Oh, no. I googled it.
Jayson: Oh, OK. Because if it were some other part of the state, it would be named for John Wilkes Booth.
Brokamp: I was just going to say.
Southwick: All right. The comeback. Here it is. "Well, I guess I know enough..." Bro's probably going to get this one. "Well, I guess I know enough to turn you inside out, old gal -- you sockdologizing old man-trap!" This was the funniest line delivered during the play, Our American Cousin. The subsequent laughter was used to obscure the sound of whose gun going off?
Jayson: Oh, yeah. John Wilkes.
Southwick: I was expecting you would be faster on that!
Brokamp: Yeah, yeah, yeah.
Southwick: Yes, the answer is John Wilkes Booth. A bonus comeback. Here we go. During one of Lincoln's debates with Stephen Douglas in 1858, Douglas called Lincoln two-faced. Lincoln responded by saying, "I leave it to my audience. If I had another face, would I wear this one?"
Jayson: I know. That's beautiful. Have you guys seen the Drunk History episode on the Lincoln assassination? They have various people playing Lincoln and various Drunk History episodes involve him, but one of the first ones was amazing, and it's the assassination story.
Southwick: Oh, OK. I'll have to look it up.
Jayson: I believe you can watch that on Netflix. On Flixster.
Southwick: Qwik Flixster. With a Q? Was it? A K? I don't remember. It was very complicated. So that's it. You guys actually did very well on this quiz.
Brokamp: Thank you!
Southwick: Nice work. Very good. All right, well that's the show. Seth, thank you so much for joining us!
Jayson: Thanks for having me on!
Brokamp: Always good to have you here!
Jayson: Did I talk long enough to talk away my face?
Brokamp: You have a face for podcasts.
Jayson: Yeah, exactly. I maybe talk to one of my bad haircuts, but still have work to do.
Southwick: Well, that's the show. It's edited sockdologizingly by Rick Engdahl. For Robert Brokamp I'm Alison Southwick. Stay Foolish, everybody!