I recently had the pleasure to go down to the headquarters of The Motley Fool in Alexandria, VA for their 4th Annual Student Investor Day. While there, I was able to meet a lot of “the fools,” including the founders of the company, Tom and David Gardner. It was an interesting experience and very enlightening as well.
The primary reason that I went to the event was because I had applied for a place in The Motley Fool’s Writer Development Program, as well as a spot in their summer internship. While awaiting a decision for the internship, I was invited, as I’m sure many of the others who applied, to Student Investor Day. I figured that it would be a good opportunity to take a trip to Virginia, as well as see what The Motley Fool was all about, should I get offered the internship or a spot in the writer development program someday. I think I learned more about investing in three hours from the various “Fools” than I have in all of the books and other research I have done. It truly was an enlightening experience.
The first thing that caught my attention, beginning with Tom Gardner, was that The Motley Fool, for the most part, believes in investing over trading. The nuance is slight, but important. In my opinion, a trader is at the whim of price, selling only to make a quick buck or to prevent further losses, while an investor is purchasing stocks for the long haul. While there is money to be made in trading, investing long term is the best way to be wealthy the whole of your life. I was glad to see that The Fool believes this, from the co-founders to the people who manage their portfolios and the writers who write about stocks.
In my semi-serious aspirations to be the next Warren Buffett, I have also started to mold my investing strategy to becoming more like him, and focusing on treating the purchase of stocks as not buying shares but actually being pieces of companies, which is what you are doing anyway. Much like Buffett, who was mentioned numerous times, Tom Gardner, Co-Founder of The Motley Fool believes in qualitative analysis when evaluating what stocks to purchase.
The four pathways that Tom Gardner found to be most important when investigating a company, and which many of the other Fools mentioned throughout the day, are stakeholders: customers, shareholders, employees, and society. If you can look at a company and see good things in their interactions with these shareholders, it may be a company to consider investing in. However, just because a company treats stakeholders well does not mean they will have a successful stock. Tom Gardner provided this primarily as a quick guide for how he evaluates companies.
The Q&As were probably most insightful, and many good questions were asked. The big theme for most of the day was that if you aren’t currently invested in stocks, you should be. Find 10-15 stocks that you want to buy and purchase them. This was refreshing as many financial advisors are hesitant to purchase or recommend individual stocks because it takes “too much time.” However, I think that if you follow the advice above and examine the four stakeholders of a company you are interested in, you might be able to find a company that you like and want to invest in.
When asked whether they saw better growth in the US or abroad, the Fools further embellished their investing philosophy. While The Motley Fool tends to view each stock seperately and not as part of a large portfolio, they do examine “macro” issues as they occur if they feel that they are going to affect a company’s profitability. To further this point, David Gardner, Co-Founder of The Motley Fool with his brother Tom, said there are three reasons to like the US:
1) We are the most innovative country in the world;
2) We are the entertainment center of the world;
3) American customer service is good
I would agree with two of the three points. I’ll let you try and guess which one I don’t agree with.
The last thing I want to talk on in this post is the culture of The Motley Fool, at least as I percieved it. We were told it was casual dress, and I don’t remember seeing any ties while there. The whole work environment seems conducive to having and doing a great job. They have flexible employment policies (no sick/vacation days needed to take a day off), 250 extremely happy employees (if you can take the 20 or so in attendance and spread thier entusiasm amongst all the rest), and great leadership that really lives and believes in being “motley.” I think David Gardner did not stop smiling the entire time while talking stocks and investing. If I am lucky enough to work their, I hope I would like it. If I am not, at least I have a model for how I want my future businesses to be.
In the words of David Gardner, “Fool on!” In my words, until next time…