Foolish Investing: 7 Lessons From 5 Years With The Motley Fool

Investing tips from a Fool.

May 1, 2014 at 11:13AM

Everyone has an exciting backstory when it comes to investing -- when you started, why you started, which stock you bought first, etc. At The Motley Fool, we call our members' origin stories their "Fool Story," and every time a member is kind enough to share theirs with us, we learn something new. We consider this interplay between learning and teaching to be one of our greatest strengths.

As co-founder David Gardner explained at the most recent FoolFest, "Your investment work is a journey, it's a journey and it's a process of constantly opening our minds to new ideas."

Doron Meizlik is a member who recently celebrated five years of investing with The Motley Fool. Doron captured his reflections on the anniversary in a board post to similar members. Doron not only recalls how he came to the Fool, but also what he has learned over his five years:

Well that really snuck up on me. Without even noticing it until moments ago, yesterday I celebrated my fifth anniversary with the Fool. And since I've resolved to post more often this year, I thought this was as good a time as ever to tell a little bit about what I've learned around here in that time.

First, a bit about myself. I'm 27 years old, started my first job right out of college in September of 2008, and signed up for the Fool (and for a lifelong investing journey) in February of 2009. My investing career started off incredibly modestly, as I funded my initial account with only $2000. Each month, I add just a little bit more, whatever I've managed to save. It's not a lot, but it's what I can afford. Five short years later, I am on my way to meeting my savings and retirement goals. I'm so far from being an investing expert (or from even being good at investing), but I'm five years into a pretty incredible journey. Without further ado, my top takeaways from The Fool and from investing these past five years:

1. Time is the best thing we as investors have on our side. The Fool is fantastic, and great stock picks and great investing advice are wonderful. But not one thing I've picked up here can do as much for my retirement account as five decades of compounding interest can. The simple best decision I've made as an investor was to start at age 22. I've made a lot of mistakes over the years and will continue to do so, but that number 22 will make up for just about all of them by the time all is said and done.

2. It doesn't take too many big winners to have market-beating returns. Over the years, I've owned a bunch of stocks, as my portfolio has averaged about 20 stocks at a given time. Some beat the market, some didn't, but at any given time I can point to just one or two stocks in my portfolio as the reason my returns have crushed the market. Give me one NFLX, one AMZN, or one TSLA every five years and it almost doesn't even matter what the other 17 stocks in my portfolio are.

3. The boards are the single best resource on this website. I haven't taken nearly enough advantage of this resource, but I plan to change that going forward. Some of the posters on here are invaluable members of the community from whom I learn as much or more than from the recommendations themselves. And the bear cases are perhaps the most valuable posts of all (and frankly, there's not enough of them). As The Fool (the company) continues to grow, these longtime board posters are often our single best grounding in reality as we try to sort our way through the myriad recommendations and try to figure out what's what.

4. Learn to relax. Don't overreact to the bad news or the good news. I know this is hard, but perspective is important. One of my stocks (TWTR) crashed 24% yesterday (oops). Had this happened to me five years ago, I would have been catatonic. But now I know that these inevitable drops are just a part of the game, and framing them in the context of a multi-decade investing career reminds me that any one day is no big deal and will be canceled out and then some by the +24% days. By the same token, I also try not to get too high when a stock goes up 24%, as even a great performer still comes loaded with risk. It's all about managing expectations and keeping your emotions in check. Whether it's good news or bad news, I try to tune out the stock price performance as much as possible so that I can more objectively evaluate the company itself relative to my thesis for investing in that company in the first place.

5. Buy and hold works. While it's been easy enough to buy and hold these past five years, the real test for me will be the next serious (20+%) market correction. Over the long run some picks will inevitably bomb, but as long as you keep buying good companies and holding them for the long run you'll be OK. There will be some down years, sure, but hopefully my story can remind a few people that this philosophy, at its core, is a solid one.

6. Investing is fun. I know this is serious business, too, as it should be with my life savings on the line. But I've also had so much fun learning about these companies and discussing/debating them with co-workers. And if it's fun for you, like it is for me, you'll come to look forward to these discussions or reading the boards or the monthly rec or whatnot. It's always easier to want to get better at something you enjoy.

7. I don't know anything yet. Five years of experience is good, but fifty years is better. Compared to a lot of folks around here, I'm still an investing donkey. So I really just need to keep trying to learn as much as I can. The educational opportunities around here are themselves priceless. Just as time is on our side with respect to compounding interest, so too is it on our side for learning and gaining much-needed experience and perspective.

Doron's Fool Story highlights how integral learning is in investing -- along with jumping in early! At the 2014 FoolFest, Tom Gardner, co-founder of The Motley Fool, expressed the importance of learning when he said, "The more you learn, the more you realize there is to learn."

We think Doron's seven lessons from his five years as a Fool well reflect our philosophy of continual learning and enjoying the stock market. His lessons are also words that everyone can learn from. We congratulate Doron's five-year anniversary and look forward to his insights on his 10-year anniversary!


The Motley Fool recommends, Netflix, and Tesla Motors. The Motley Fool owns shares of, Netflix, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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