Fool Co-Founder David Gardner On How He Invests and 5 Stocks He (Still) Likes Now

Earlier this week, I invited Fool co-founder David Gardner into our brand-new Motley Fool studio space here in Alexandria, Va. We spent nearly an hour talking about the state of the retail investor here in 2013, his investing philosophy, and his current thinking on a half-dozen specific stocks in his Supernova universe.

What follows is the video in full (run time: 40:24); while we don't have a transcript, below the video player, you can view my questions for him along with the corresponding time stamps for his answers.

I invite you to learn more about how David picks his winners with a free, personal tour of his flagship service: Supernova. Inside you'll discover the science behind his market-trouncing returns. Just click here now for instant access.

Here are my questions, with timestamps:

0:17-1:52

There's evidence that despite a strong recovery since market lows in 2009, many Americans have sat on the sidelines, or moved out of stocks and into bonds or cash. What's your advice to those Americans who are moving into "safer" investments, or are scared or intimidated by the machinations of Wall Street and the stock market?

1:53-4:36

You once told me that despite having an extremely long-term investing horizon, you routinely check your stocks intraday for quotes and news. How can investors keep score of their companies while avoiding the day-to-day emotion of analyst upgrades/downgrades, earnings that beat/underperform expectations, fiscal cliffs, etc. – which may result in short-term, reactionary thinking?

4:37-7:34

How would you classify your brand of investing?

7:35-10:45

How has your investment approach/philosophy changed since early on in your investing career?

10:46-15:36

Two of your six signs of a Rule Breaker deal with valuation, but in a contrarian sense. In addition to "strong past price appreciation," you like seeing a stock deemed "overvalued" in the financial media. How did you develop those criteria?

15:37-19:12

Who would you put on your Mount Rushmore of Investment Thinkers?

19:13-22:27

What's the biggest misconception about your style of investing?

22:28-25:22

What's a reasonable portfolio size for a retail investor?

 

Specific stocks

25:23-30:40

Now let's turn to some specific stocks from the Supernova universe – recommendations of yours from Stock Advisor or Rule Breakers: First up is Facebook. You Tweeted in late November: "I am confident that #Facebook beats the market from here, next 5 years. #markthisdown." Facebook has an incredible platform/reach, but in its current form, it's just a display ad business. What makes you bullish on Facebook?

30:40-33:13

Even after its incredible 10-year run, Apple is both a "core" pick and "best buy now" of yours in Stock Advisor. How can the largest company in the world keep the magic going?

33:14-36:59

Two monster performers from last year are in the 3D printing industry, and you recommended both -- 3D Systems and Stratasys. Do you see this as a Coke-Pepsi kind of scenario -- that 3D printing/additive manufacturing will be big enough for both?

37:00-37:59

You first recommended Netflix almost 10 years ago now (in May 2003). It's been a bit of an enigma over the past two years or so, but you still rate the stock as a "best buy." As someone who has stuck with the company through good times and bad, what would cause you to consider selling Netflix at any point in the future?

38:00-40:24

What's one stock you don't like right now?


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Read/Post Comments (28) | Recommend This Article (168)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 11, 2013, at 6:40 PM, Vismxr wrote:

    As a 12 year fool David does a terrific job at the basic foundational rules for all of us. Keep it simple and fail quickly. Thank you, Spiffy Pop!

  • Report this Comment On January 11, 2013, at 9:53 PM, chris293 wrote:

    These are popular stocks now but where is the payback on some of these stocks? When management quits jacking the shareholders around in some cases, I believe there should be a new understanding in company policy that the owners have to make sure that management works for them and not the world's biggest charity, the U.S. government. Has anyone a problem with this?

  • Report this Comment On January 11, 2013, at 11:08 PM, TMFTwoCoins wrote:

    Fantastic video, David and Brian.

  • Report this Comment On January 12, 2013, at 9:24 AM, TMFSpiffyPop wrote:

    Thanks a lot, fellow Fools. I enjoyed Brian's questions -- feel like I went long in some of my answers, and yet didn't nearly say all I wanted to. Imagine that! :)

    Foolishly,

    David

  • Report this Comment On January 12, 2013, at 3:19 PM, mbivy wrote:

    Great interview!

    Thanks

  • Report this Comment On January 12, 2013, at 6:51 PM, RobD666 wrote:

    David is a rule breaker. Than you for the information.

  • Report this Comment On January 13, 2013, at 4:13 AM, DICKENS62 wrote:

    David's vision and patience is to be commended , this has helped me so much in my journey of investments ,thank you Mr. David Gardner.

  • Report this Comment On January 13, 2013, at 11:54 AM, TMFSpiffyPop wrote:

    Thank you all. I deeply appreciate it. I think I've seen some light, so my purpose is to pass it on. If you see some too, please do. We need a lot more investors in this world, and a lot more investing truly creates a better world. Fool on! --David

  • Report this Comment On January 13, 2013, at 12:19 PM, somethingnew wrote:

    Thank you David for a great video.

  • Report this Comment On January 13, 2013, at 5:09 PM, GW1000 wrote:

    David:

    Please keep SA and RB just like they are. No changes needed! The Motley Fool is the greatest investment advisement service in the world in my opinon.

  • Report this Comment On January 13, 2013, at 5:19 PM, Tomohawk52 wrote:

    I still don't use my credit card over the internet. I don't trust it. It's a good thing people like me aren't immortal.

  • Report this Comment On January 14, 2013, at 2:14 PM, tomd728 wrote:

    I must tell you Mr.Gardner that despite what must be a fair amount of pressure to produce monthly selections for all of the MF services you handle your work is still commendable.

    It certainly has to be more difficult now to find the AOL or

    AMZN or AAPL but I do listen and I appreciate your work and enterprise.

    Tom Durkin

  • Report this Comment On January 15, 2013, at 12:15 PM, Landsman55 wrote:

    For me the Motley Fool will always be first and foremost David and Tom, so it is always great when we get them in writing and video and I would add that I don't think we them enough, even though I am a One subscriber and get SA, EP and SN. That's not to say that there aren't other great analysts on the fool, I am a big fan of James Early (I won't list my least favorites). I found this interview very insightful and maybe for the first time really understand that the David is a fundamental investor looking in part atmetrics that are not mathematically quantifiable.

  • Report this Comment On January 15, 2013, at 6:12 PM, FOOLIN7 wrote:

    Very thoughtful questions and answers. Thank you Brian and David!

  • Report this Comment On January 15, 2013, at 7:54 PM, stockdissector wrote:

    David,

    I liked what you said about reading business books versus investment books because you buy businesses.

  • Report this Comment On January 15, 2013, at 9:02 PM, TMFSpiffyPop wrote:

    @stockdissector, thank you -- it really is true -- I think I've read one-and-a-half Lynch books, one O'Neil book, the first two chapters of The Intelligent Investor and... and... that is it for investment books. Oh wait, I did read the Philip Fisher book -- or at least a good bit of it -- back in the day. On the other hand, many books about business, technology, culture, marketing.

    @FOOLIN7, I agree that Brian's questions were excellent and well-selected. He is a pleasure to work with, on and off the camera. A great Fool.

    @Landsman55, well my aim is to make The Motley Fool associated with many many people, all of whom are excellent and add value. So I hope our efforts to to be "clock-builders" rather than "time-tellers" do not fight too much against your very flattering (and appreciated) wishes. :)

    @tomd728, it's the best way to learn -- *to do* -- it's all about stepping back into the batter's box month after month after month after.... :)

    @TheGMaster, from your lips to God's ears! Thank you. :)

    @somethingnew, you are welcome -- it was... something new! :)

  • Report this Comment On January 15, 2013, at 9:20 PM, clorox2 wrote:

    David,

    thank you so much for making this video. Your thoughts struck a chord at a time when I'm re-thinking my investing style.

  • Report this Comment On January 15, 2013, at 10:32 PM, TMFSpiffyPop wrote:

    @clorox2, awesome. You're welcome. Thanks for participating in CAPS -- what a great way to explore, build, test, and learn. Let's get that rating higher! Thanks for your contributions to Foolishness.

  • Report this Comment On January 15, 2013, at 11:58 PM, DBrown7 wrote:

    I had the great fortune of finding The Motley Fool in the spring of 1997 and it changed the way I looked at investing forever. I've learned a great deal and thanks to this wonderful community I've also had the pleasure of sharing what I have learned with others. Had a lot of fun along the way too. Many thanks to David and Tom for creating this (not so hidden anymore) gem.

  • Report this Comment On January 16, 2013, at 8:22 AM, mikecart1 wrote:

    I found the Motley Fool through another messageboard in 2005-2006. It is the best thing to ever happen to me.

  • Report this Comment On January 18, 2013, at 2:46 PM, hopefull1013 wrote:

    help.... trying to decide which to sign up with for investment guidence... Motley Fool or Cramer.

    How do they compare?

  • Report this Comment On January 18, 2013, at 5:01 PM, dogintrouble wrote:

    @hopefull1013: Tom and Dave have more discipline than Jim does ( a function of his TV schtick), but he has a talented team as well--it's not just Jim. It's Prairie Home Companion vs Showtime. SOme will come in and bash, but Tom and Dave don't have as many clunkers because they don't pick so many stocks. Me, I side with Tom and Dave--more my temperament. It's still on us to evaluate both teams' picks.

    Neither care much about timing a stock purchase, they're more fundamentalists--when the story and facts are right, they say buy. Investor's Business Daily adds more of a technical analysis to time the purchases.

    Hope that's constructive information for you.

  • Report this Comment On January 18, 2013, at 11:16 PM, buckeye99 wrote:

    join the MF and still watch Cramer on TV, need to get info from multiple other sources as well

  • Report this Comment On January 19, 2013, at 12:02 AM, jlclayton wrote:

    Hopefull1013: I chose my first MF premium service based upon the following factors: the sensible advice given in their articles, amount of money I had to invest each month and my primary goal at the time (price appreciation, medium risk tolerance) Then I bought the Buy First recommendations that I understood and that were cheap enough for my limited funds. I kept learning and reading and have had good results. Over time my goals changed and I changed my premium services to match.

    I have had very good luck with MF due to the fact that they approach investing in a common sense way, stick with their investment thesis during all market cycles, and encourage lively discussion so many viewpoints are heard.

    You can listen to Cramer if you choose, but remember that his advice will always be what will keep people watching him & not necessarily what will make you a better investor.

  • Report this Comment On January 19, 2013, at 9:13 AM, videofilm wrote:

    I am really annoyed by repeated attempts by investment newsletters to have me sign up for more expensive guidance. Makes me wonder how you decide to divy up the guidance between your basic subscribers and the high rollers. So you are telling me now, if you really want good guidance, you better sign up for our more expensive service.

  • Report this Comment On January 20, 2013, at 9:02 AM, 1297US12 wrote:

    I thought when I signed up I got your picks, now you want me to sign up again for the " Top Three TV Stocks", I don't understand what I signed up for? Do I have to sign up for all new stock picks?

  • Report this Comment On January 20, 2013, at 2:51 PM, ElliottHill7 wrote:

    I have a similar question, I just signed up to MF and now I am being ask to upgrade and sign up again. What should I expect from the basic service ? what should I expect from the upgrade ?

  • Report this Comment On January 21, 2013, at 3:40 PM, TMFSynrgy wrote:

    The Motley Fool publishes a variety of services, each attempting to cater to different strategies or different types of investors. One service is not better than another; each is simply different. For an extreme example, an investor at or nearing retirement will likely be interested in much different investments than an investor just starting out after finishing college and kicking off their career.

    Existing subscribers to any service have ongoing access to the reports we advertise with new subscriptions to that service. For example, all current Stock Advisor subscribers can access the 'Top 3 TV Stocks' report we've recently advertised, within the website for the Stock Advisor service.

    If one needs help finding content within a service they've purchased, we humbly suggest they reach out to us via email to membersupport@fool.com so that we may provide guidance as needed.

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