Skip to main content

The Three Things I Learned From David Gardner

I recently talked to David Gardner, one of the founders of The Motley Fool. In 1993, he started an investment newsletter geared toward families in an effort to get more people, of all ages, to invest. David Gardner is an intelligent, Foolish and an out of the box thinker. His approach to investing is light and fun, as it is shown in The Motley Fool’s mission, “To Educate, To Amuse and To Enrich.” As Gardner says, “It’s that middle phrase that is surprising to people.” Most people don’t think of a financial publishing company as an entertainment center, but there is more to investing than putting money into a stock and waiting.I have a few main takeaways I would like to share with you from our talk.

Investing Mentality

I’ve said it, David Gardner has said it, investing is a mentality. When you become a part owner, you become engulfed in the company. Investing is about much more than money, David Gardner says, “The word invest comes from the Latin word investire which means ‘to put on the clothes of.’ If you know the word vestments it’s the same thing. So, the word, the root of the word, the initial meaning was that. Just looking deeply inside that word I didn’t see anything about money.”

Investing yourself in something is immersing yourself. When you buy shares of a company you are immersing yourself, you are investing yourself into that company. When you do that you are buying into three main things, the company’s goals and beliefs, their marketplace, and their people.

Becoming a Fan of Your Company

From there Mr. Gardner went into an analogy, “Good investing is kind of like a sports fan... They are going to be a fan whether their team wins or loses that day. [Good investors are not] going to sell their stock whether or not it goes up or down, today, this week or even this year because they’re in it to win it over the only term that counts, which is the long term.” I don’t think I could’ve said it any better. When your team makes a mistake, you stick with them, just because the Red Sox lose a game or two doesn’t mean you are suddenly a Yankees fan.

A company’s overall reputation and returns is determined by the long term, in the short term they can make mistakes but it’s how they recover that shines through.  It’s the same with sports teams. Gardner says of investing, “That word by definition means long term.”

Why People Aren’t Investing
David Gardner says, “The biggest reason people are not investing is because they don’t understand or know about it... We have done different things over the course of the last 20 years [at The Motley Fool] trying to reach people of all ages and get them to invest and to save... It’s not a problem of lack of effort on our part, it’s actually I think that there is not enough of a culture of awareness among people of all ages that there even is a stock market or that you could be a part owner of a company.”

The Motley Fool is trying to get everyone’s attention  with their light hearted investing style and new “trendy” ideas to create a culture of awareness. Along with creating classes to present to schools around D.C. called Fool School, they are developing a new video game involving the stock market. Over the past 20 years, they have been very successful at reaching out to more and more people around the world but there is still a lot more to go.  

To finish this let’s talk about how to get people to invest. David Gardner puts it simply, “By engaging them and getting their attention, we need to maybe ask the Socratic dialogue question, we need to ask them a question that they themselves realize they should know the answer, but they don’t. And it causes them to begin asking their own questions and finding out some new answers. A phrase I like a lot, ‘switching on.’”

Switching on requires people to think about their future selves, and what will benefit them in the long run. The only constant in our lives is change. We need to switch people on to think about changes for 10 years from now and beyond. That is hard “because of the ease of remembering versus the difficulty of imagining,” says Dan Gilbert. I’ll leave you with a few questions.

Why don’t people invest? And why not start sooner?
Are there other alternatives to investing that are more appealing?
What do people have to sacrifice to invest? (The best time to plant a tree was 20 years ago, the second best time is now.)

Why is investing a good option to make money in the long term?

Comments

Popular posts from this blog

Pepsi and the Process

A few months ago, I wrote a post on my investing process called: Why Do I Invest?. In section 4, I talk about connecting the story of a company (recent news, patterns in performance, products, predictable faults, etc.) to the numbers (debt, P/E, ROE, etc.).  I do feel it necessary for me to reiterate the importance of this because of a quote from a recent article.

“I picked Pepsi because I love Sun Chips. Cheddar Sun Chips are my favorite — that’s how I pick most of my stocks.”

Yes, I did buy Pepsi in part because of their products. But I picked it for more than just my growing love of the products, I picked it because a majority of our population buys Pepsi products. It started because I like their products, but it did not end there. I did more research than just open up a bag of chips and fall in love. Just as Aunt Ginny did, I looked at the company and tried their products, along with checking the numbers and learning more than just the calorie count of 12 servings of Cheddar Sun Ch…

What a Snowball Really Looks Like

I recently met an 89-year-old woman named Ginny. She has a passion for investing, math and numbers. We talked for three hours and I learned a few critical things. She taught me about successful simple companies, what it was like to be a woman investor in the 1960s, and what time can do for an investor. I hope you enjoy her story as much as I did.
1.Success with Simplicity
Ginny lives in a small town in Minnesota and has been investing for many years. As a wedding gift from her father in law Ginny and her husband received shares of stock. She decided she had better learn about investing, that one gift fired her life long passion in investing. She slowly learned more and more until it became her main interests. Once she got started she never stopped.  
While Ginny and her young family were on a road trip, they stopped for breakfast at a pancake diner.  Time and again on this trip they ran into the same chain. Each diner had one thing in common, they all had overflowing parking lots! After…

Early Bird: The Power of Investing Young

I'm so excited to announce that my book, Early Bird: The Power of Investing Young, is published! It has been a long five months. The publishing process ended with me listening to "Closing Time" by Semisonic on repeat until I was confident it was truly closing time for the book. I hope you all like it! Currently, it's available on Amazon as a paperback, and it'll soon be on Kindle and local bookstores!