Journey in your mind back to March 2002. The stock market was still stumbling around in the aftermath of the dot-com crash, and retail investors were running scared. It was in that environment that Tom and David Gardner launched a monthly newsletter featuring one stock pick from each brother, with detailed explanations about why they'd been chosen -- a friendly fraternal competition that became the foundation of the Stock Advisor portfolio. The returns on those investments have well outpaced the broader market's gains in the ensuing 16 years. Had you acted on all of their recommendations, you'd have reaped a market-smashing 1,955% return overall.
Profit, however, isn't the only thing the Gardners have accrued in the intervening years. They've also figured a few things out along the way. So in this Rule Breaker Investing podcast, David shares six interesting conclusions from his 200 months selecting recommendations for Stock Advisor.
In this segment, his thesis is one that may strike you as unlikely, but yes, he thinks you can and should enjoy investing. And perhaps he's right: If you make some good decisions early, keep adding regularly, and are willing to take that long-term approach of leaving your stocks alone to rise over time...that does sound like fun, as do the things that follow from that process. And as a bonus, he offers up a pair of stories about recent events that make one thing clear -- he's still having an awful lot of fun doing this.
A full transcript follows the video.
This video was recorded on Oct. 17, 2018.
David Gardner: Conclusion No. 4 reads pretty simply. "This is fun and it gets really fun!"
Now, when I say "this," I mean investing. I mean sticking with the market. I mean letting great companies compound for you in your portfolio by finding them in the first place, because you've got to find great companies to really enjoy compounding and once you do, letting them compound is more than half the trick, in my experience. For a lot of people, they're not going to be patient and enjoy the fruits of their early labors.
I really love the way we invest here at The Motley Fool, because we take that long view and it means you don't have to work nearly as hard, because you make some good decisions early and then you just let them go and watch them go up [the ones that really work]. So this is fun, and it gets really fun, and I'm saying that because as things compound and the world keeps advancing; new technologies come and your companies grow up; you start getting more and more opportunities.
In a lot of ways, you could frame up anybody's Motley Fool relationship in two simple stages. The first stage is the effort to become financially independent. And every one of you who's listening to me right now is somewhere along that journey. Some have completed it. Some have just started it. Some are halfway through. Every one of us comes from our own unique context with our own unique background, knowledge base, and support system. Some of us really had to pull ourselves up by our bootstraps to become savers and investors, and others inherited beautiful portfolios, and a lot of us are somewhere in between.
So we all come from a unique place, but once you do get on that journey of investing, that's the first step, the first stage is getting to be financially independent.
And guess what the second one is?
That's right. It's "being" financially independent. It's being able to walk away from your job if you don't like it. In my case, I'm happy to say that I have been financially independent for a while. You probably expect that the brothers who started The Motley Fool probably should have prospered enough that if they wanted to, they could walk away from The Motley Fool, and yet Tom and I love what we do. I love doing this podcast for free for you every week.
So I'm in that place. I've been in both stages. That's where I am, now, in life. I'm 52 years old and very happy to say that financial independence is a dream come true. And I hope that's true of you and if it's not, I hope we get you there.
So there's kind of two stages to our investing journeys. It's the struggle to become independent, and then it's the enjoyment of the independence and that's the part that gets fun, and it starts to get really fun as the numbers roll up and you start deciding, "What am I doing to do with all this wealth?" That each of us has. That each of us gain in the future? How are you going to spend it or leave it? To whom are you going to leave it? How are you going to make the world better?
As Seth Godin said on this podcast a few weeks back, "Did you make things better?" Very simply asking as you entered an industry as an entrepreneur, or Planet Earth as a human being; who's making things better and are you going to be one of those people?
So Conclusion No. 4 is this is fun and it gets really fun, and I want to share with you two, brief really fun stories, both of which have happened to me within the last few weeks. And I had a lot of fun in both of these instances and I want to share that out.
Here's the first one. The first one was last week at the Conscious Capitalism Conference I was attending in Austin, Texas. It's my ninth or tenth year attending this annual CEO summit. I'm not the CEO of our company -- my brother Tom is -- but I am the co-chairman and the co-founder so they still have me at this conference.
And I had the pleasure of sitting in the audience during an interview with Arthur Sulzberger, Jr. Some of you will recognize that name as the owner, one of the family that owns The New York Times. The Sulzberger family [owns] a multigenerational business and recently Arthur gave over to his son, "AG," the leadership of The New York Times, but over the course of the last 20 years, or so, he was running the show and he was being interviewed in front of all of us.
So picture 250 or so attendees of this conference, and if you're seeing chairs set up in long rows around the room you're not seeing what's happening in Austin, because in this conference there are like big lounges. Lounge chairs. If you know what a LoveSac is [basically a giant overstuffed pillow for adults], there's some of those there. People are just splayed out around the conference floor, and I was toward the front. And I was just sort of sitting front center and Sulzberger, during the interview in front of the crowd last week asks everyone to raise their hand if they read The New York Times.
And a lot of people around me just raised their hand straight up.
I kind of demurred. The visual for me was I kind of held out one hand, my right hand, and sort of thrust it to the side. Kind of like eh. You know, some. Yeah. A little bit of that.
Now if you're a longtime listener to this podcast, you know that I gave up reading regular daily news in I think it was July of 2017 and here I am, more than a year later, with a lot more time. I still read and keep up with the news often through The Economist on a weekly basis, but I'm not there, every day, reading The New York Times.
So I kind of went eh and Sulzberger, for whatever reason, having never met me before and not knowing who I am immediately singled me out. He pointed right at me. 250 people, many of whose hands are raised. I'm sitting front and center going eh and he's like, "You, sir. You need to read some more."
And I was really happy that I had recently checked my phone for some numbers, and I was ready, skipping not a beat with my quip back. I said, "Mr. Sulzberger, I recommended your stock, The New York Times Company, to Motley Fool Stock Advisor members in December of 2015 and it's up 96%, so I'm pretty happy with The New York Times myself, anyway." And a lot of people around me laughed and Sulzberger immediately said, "OK, you win!"
So there's my anecdote No. 1. Just recent adventures. That was fun. It was fun to be at a conference. To be invited to one where I have real newsmakers there. It was fun, in retrospect, to be singled out and surprised, and it was really fun to be able to say what I said, which is that I'm a believer in his company.
I'm not even a regular reader of The New York Times and I'm not a big fan of some of the things The New York Times does, but when I look at the business, overall, I think it's a great brand. It conforms to a lot of what we talk about every week on Rule Breaker Investing, and I was really proud to be able to share right back to the retired CEO that I had recommended [his] stock and we've got a lot of backers, more so than just readers. There's Anecdote No. 1 -- fun.
Anecdote No. 2 was what happened a couple of weeks before that last month when Jeff Bezos came to Washington, D.C.
I had interviewed Jeff Bezos a number of times in the past, although it was a lot easier to have Jeff on The Motley Fool Radio Show when Amazon was about 1/100 of the size it is today. It's very hard to get any interview with the Steve Jobses, Elon Musks, or Jeff Bezoses of this world.
So I knew that Jeff Bezos was coming to speak at The Economic Club of Washington a few weeks ago, and I was going to attend that night. It was a big bash, and I told my wife Margaret the day before, "If I ever get to the guy, Margaret... if I can get up to him... here's my line for him. I'm going to say, 'Jeff, I believe I'm the guy with the second lowest cost basis in the room on Amazon stock.'" Obviously the guy with the lowest was the founder, Jeff Bezos himself, but I wanted him to know ever since recommending the stock at $3.21 shortly after its IPO in 1997, a recommendation that I have left in place ever since, it's been a huge winner for Stock Advisor members starting in 2002, etc. I wanted to be able to tell that to Jeff and reconnect with him if I could possibly get to him.
Fast forward to the next day. The evening. It's time for the big bash with Jeff Bezos at The Economic Club of Washington. And as I approach it in the twilight hour, I see media all around outside the Washington Hilton, a large hotel where they have the White House Correspondents dinner traditionally here in Washington, D.C.
It's a huge venue for an event like this and there were thousands of people. There were even people across the street from the hotel with a loud speaker going, "Hell, no! Bezos has to go! Underpaying his workers." This was, by the way, before the $15.00 raise in minimum wage for Amazon workers. But earlier that morning, he had recently dedicated $2 billion to the Washington Housing initiative, so an incredibly generous person that was being protested across the street, so there's a media circus.
You get inside the door. You try to get, as I always do, to the bar to get a glass of wine. Almost impossible to reach the bar. There's so many people, elbow-to-elbow, it's comic. You can't even move around this group. I'm thinking, "I'm not going to be getting to Bezos tonight."
I get my table assignment. It's Table 334. That's right. They're counting by ones, so you can imagine. I wasn't at Table 1. I was at Table 334. And if that sounds a long way from the stage in a big room, you're right.
The event starts. David Rubinstein [the billionaire] -- head of The Economic Club of Washington -- a very generous and very intelligent interviewer who runs the show; he's reading off all the sponsors. He's then reading off scholarships that we're giving out at ECW. He asks Bezos briefly to stand up and raise his hand. You see a little guy, way up front there, showing that he's in the room and we'll be talking to him after supper. And it continues like that.
And finally the announcements, which lasted about 20 minutes or so, end and we're all going to start supper. And I turned to the guy on my left, who I'd never met before, Table 334, and the guy on my right, and I said, "Guys, I'm going for this right now. We'll all know, within five minutes, whether it works or not. I'm going to try to get to Bezos right now. Excuse me."
Stepped up from the table. Worked my way past Tables 330 and 329. Got into the high 200s. Wheeled around that. Moved into the 100s and then finally up toward Table 1 right in front of the stage and with all the other tables, little circular tables, spread out around a huge room, people are already sitting down eating. I noticed up here at Table 1, as I got up to the mountaintop, they're still standing and milling about. They're not sitting down to supper, yet, and there's Bezos. And there's one guy talking to him.
So I decide, "Here's my moment." I went and stood right behind that gentleman. I just kind of listened, offhand, to their conversation which lasted another two minutes or so. And then that guy finished, he stepped away, and there was Jeff.
Looked him right in the eye. I said, "Jeff, I believe I'm the guy in the room with the second lowest cost basis on Amazon stock. Hi, Jeff! It's great to see you again. David Gardner from The Motley Fool. I used to talk to you..."
And what did Bezos do? He right away said, very warmly and familiarly, "David!" And then the next thing he did is he whips out of his pocket his phone, puts his arm around me. Holds it up. And he goes, "Selfie!"
And that's how I got a selfie with Jeff Bezos. I may have been one of the few that night at the ECW bash that did. I wasn't even at Table 1. Well, you can't win the game if you don't get in the game, so just by playing the game, I somehow got selfied with Jeff Bezos, one I'll probably never see because it's just on his phone, not mine, and he's not exactly that easy to reach through social media or even through his own spokespeople today.
So Jeff, love the picture! I hope one day that will be part of the public domain. But forget about the picture. That was a great, fun event and story that I have to share with you, my fellow Rule Breaker Investing listeners to know he's a really great guy. Very warm. Very heartfelt. Super smart, and he's been an incredible value creator, not just for our country or for consumers, but certainly for shareholders, as well. I know a lot of people have questions about Jeff Bezos. Some people don't even like Jeff Bezos. I love Jeff Bezos! I think he's great!
So there's my Sulzberger and Bezos anecdotes. I told you I was going to try to make this podcast more fun and better as we went through, so I hope you enjoyed those stories. But that just gets back to Conclusion No. 4. This is fun and it gets really fun. So as the numbers get bigger and the possibilities get grander, you and I can have more and more experiences like that. As we go through life we should be seeking them out.
