Buy and Hold: Taking the Bad with the Good

What about the losses in long-term investing? Do the math and see for yourself.

Mar 14, 2014 at 4:15PM

Co-founders Tom and David Gardner look back on The Motley Fool's journey with (NASDAQ:AMZN) since first purchasing it in September 1997. The brothers discuss the ups and downs they've seen with the stock, now a 100-bagger for the Fool.

Amazon rose, then fell, then rose again -- but some multibaggers plummet and never come back. In this video segment, David discusses the inevitable losses that come with the Foolish brand of long-term investing, and how the gains make it all worthwhile.

Not every CEO can be as successful as Jeff Bezos has been with Amazon.

But over the past two years, Motley fool co-founder and CEO Tom Gardner has made it his personal mission sit down with dozens of the world's brightest investors and business minds on behalf of his Motley Fool ONE members — we're talking true American legends like Whole Foods co-CEO John Mackey, Costco founder Jim Sinegal, and even Vanguard founder Jack Bogle — as he scours the globe to find the next great company to provide Amazon-esque returns.

On March 20th, this "crown jewel" service will reopen to new members for only the third time ever. And to celebrate, Tom would like to offer you a front-row seat to watch these visionaries share the keen insights and unparalleled business acumen that got them to where they are in life.

Even if you aren't an investor, the business lessons you'll take from these conversations are priceless. So please click here to access our Motley Fool ONE member lobby and our entire collection of these interviews absolutely FREE of charge!

Tom Gardner: Now, there are some of these huge multibaggers you've had, that have not come back.

David Gardner: Sure.

Tom: How does that fit into your approach as an investor?

David: Well, I can think about Iomega, which back in the day at The Motley Fool -- as you remember, we were on the cover of Fortune magazine and it was partly a story about Iomega. Celera Genomics was a 9-bagger in six months, and we ended up selling not far above cost.

Obviously, I can always think back on times that I wish I'd sold something that I held.

Tom: But the holds end up mathematically massively outweighing ...

David: Yeah, when you take it all and all. Absolutely.

In fact, I gave this talk internally; you heard this two months ago at our monthly huddle at The Motley Fool. I said, "Rule Breakers has had 32 stocks that have lost 50% or more." That's the Rule Breakers service. I know I'm speaking to some members today. Thirty-two stocks have lost 50% or more. That sounds horrible, and it's not easy. In fact, it's painful, and every one of those I'm accountable for.

The good news, though, is that the 32nd best pick in Rule Breakers is up 160%, so you've got to do the math. You've got to be mathematical here. It's not advanced math, but play that forward and you see the incredible benefits of being happy to occasionally give away a 10-bagger and end up at cost, or suffer a 50% loss because you're holding all these other great things as the world is reshaped by these companies and you're a part owner of them, measured in decades.

 David Gardner owns shares of Tom Gardner has no position in any stocks mentioned. The Motley Fool recommends The Motley Fool owns shares of 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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