The best part of an online community is bringing together hundreds of thousands of investors from all over the world into one place. The worst part is that we rarely meet any of those people face to face.
We bridge that gap a few times a year by bringing together hundreds of our investors, advisors, analysts, and guest speakers to talk investing, business, the economy, and more. The events are truly one of the highlights of being part of our community.
We just wrapped up FoolFest, our largest event of the year near our headquarters in Alexandria, Virginia.
Here's a video of the highlights. Check it out, then keep reading for my takeaways from the event -- and how you can watch the full event.
Best-selling author Dan Pink gave a great talk about motivation, including how making people's job more meaningful increases productivity:
Let me very quickly give you one study that I think makes this case really well. It's a study out of Harvard Business School. They went to a cafeteria. Imagine people going through the line in a cafeteria. What the researchers did is they set up an iPad, and the iPad allowed the people in the kitchen, the back of the house, to see the people in line, the cafeteria customers.
There were four conditions. In one case they could see each other. In one case, the cooks could see the customers. In another case, the customers could see the cooks. In one case they couldn't see each other.
When the cooks could see the customers through this iPad camera, the quality of the food improved. The dependent variable in this study, what they were measuring, was the quality of the food. It wasn't whether the cooks were satisfied. It was, what do people think of the food? When the cooks could see the customers, the quality of the food improved.
Now those cooks were not like, "We're standing up against Big Food. We are empowering local farmers," or anything like that. It's like, "I'm just making an awesome omelet, and I want it to be great, because this guy looks like a nice guy and I want the omelet to be good."
Nell Minow, a corporate governance expert, told an amazing story about having to scold her dad for not attending enough board meetings:
I was at the then very new Institutional Shareholder Services, which was the first large company set up to advise institutional shareholders on proxy votes, and it bugged me that nobody was paying attention to boards of directors. And I said, "Well, they have to tell us two things: do they have any stock and did they go to meetings. Let's not vote for them if they don't have any stock and they don't go to meetings."
So the second name that came up was my dad, who had missed more than 25%, which is the cutoff. So I had to call him and tell him. I said, "Hi..."
And he said, "Hi, how are the kids." So I said, "Oh, they're fine. Listen, I have something to tell you. You've missed too many meetings on the board of AON, and we're going to recommend a vote against you. Our clients include the California Public Employees' Retirement System, and TIAA-CREF, and they're going to vote against you."
He said, "How many meetings did I miss?" I said, "Well, the cutoff is 25% and you missed 27%." He said, "That's really close." I said, "When I came home at 12:15 and my curfew was twelve o'clock, you told me that close didn't count."
Motley Fool co-founder David Gardner talked about the importance of predictability in corporate results:
I had that taught well to me by Howard Schultz of Starbucks, who was invested in [The Motley Fool] early on, and we had some good opportunities to learn from Howard. One of the things Howard said is, "If and when you ever go public, you need to know ahead of time that you have your next four quarters nailed." Howard was probably a little too hardcore on this, but he basically said, "If you come out of the gate, and you miss your first, second, or third earnings, Wall Street will walk away from you and they'll never come back."
And while I think, again, that might be a little bit over the top, he was just talking about the importance of predictability in a business.
Motley Fool analyst Bryan Hinmon shared uncommon ways to improve your performance as an analyst:
How many of you are familiar with the circadian rhythm? The circadian rhythm is the biological process whereby very naturally our bodies are synced up to a 24-hour cycle. A guy named Nathaniel Kleitman studied sleep for a long time. Apparently he felt like he understood everything there was to know about sleep. Or got bored with it, and decided to study being awake.
And what he found, when he dove into his study of wakefulness, was there are cycles within that circadian cycle. This is the ultradian rhythm, a product of Nathaniel Kleitman. He basically posited that we have natural, biological cycles of alertness and they happen to take a form. The bad news is we've got about 90 minutes of high-functioning activity before we need a 20-minute break.
I gave a talk about risk, and how the biggest risk we face as investors is our own behavior:
We, as investors, are constantly bombarded with mental ammunition for the fact that markets are risky and that we should take actions to avoid that risk. And we tell ourselves after the market decline that we learned our lessons, and we won't make the same mistakes [as in] the past, so we sell after stocks have declined, only to get lured back into them after they've risen again. We come up with all kinds of different trading strategies to get in and out of the market at opportune times. And we do these with good intentions to make ourselves safer. To reduce risk. And rarely do we take a step back and realize that we're doing just the opposite.
Because the biggest risk that you face as an investor is not that you're going to experience volatility in the stock market. Volatility is a pretty normal and common thing in the stock market, even when the stock market's doing really well.
The biggest risk, by far, that you face as an investor, is fooling yourself into believing that the way that you deal with this risk is to take actions and try to outsmart and outmaneuver the volatility. That's when you really end up in trouble.
Fool analyst Jason Moser talked about Chipotle's recent stumbles, and how the company has capitalized on a lower share price:
We go back to November 1, 2015, they've spent almost $1 billion since then on share repurchases, representing a reduction of almost 2 million shares in the total share count there. This, all the while, they still have a very flush, healthy balance sheet with $250 million in cash and equivalents at their disposal.
There are a couple of things we can take from this; No. 1, the model is very cash-flow productive, right? These stores don't cost a lot to open. They realize the return on their investment very quickly, which allows them to really bring in a lot of cash, reinvest in the business, and build up a very healthy balance sheet. No. 2, I think management here even recognized that the shares, while they probably deserve to get hit pretty hard, I think management also seeing the forest for the trees, knows that this is not the end of the business. This is Steve Ells' legacy, I don't think he wants to go out on a sour note like this.
That's just the tip of the iceberg. Click the button below to see how you can watch the full event.
Contact Morgan Housel at firstname.lastname@example.org. Morgan Housel has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Chipotle Mexican Grill and Starbucks. The Motley Fool has a disclosure policy.