Stock investing is without question the best way for ordinary people to grow their wealth. It can also be a great way for a person to lose their shirt. Contradictory? Maybe. But both perspectives are true, and they're useful to remember when dealing with Wall Street and your money.
In this segment of the Motley Fool Answers mailbag episode, hosts Alison Southwick and Robert Brokamp -- and their guest, Buck Hartzell, the company's director of Investor Learning and Operations -- tackle a question they have heard a few times before: How come there are sometimes articles published on Fool.com that take a bearish position on stocks that are current recommendations of the Stock Advisor service? There can be, it turns out, a number of reasons, as they are happy to explain.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.
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The author(s) may have a position in any stocks mentioned.
This video was recorded on April 30, 2019.
Alison Southwick: The next question comes from Dustin. "I see a lot of public Motley Fool articles pop up around the internet on my news feed. Some of those articles are bearish on stocks that are current and even recent Stock Advisor recommendations. I trust Tom and David's picks, and I know they are in it for the long game, so maybe the discrepancy is on short term vs. long term? I was hoping you could comment on the somewhat mixed messages I'm getting from time to time from The Motley Fool."
Buck Hartzell: We get this question a lot.
Robert Brokamp: We do.
Hartzell: This happens all the time. I'd say we don't have a company line on any stock at The Motley Fool. We're a motley group. We have lots of smart people writing for us. We all have divergent views, experiences, and insights to bring to those stocks, and we think that we're ultimately smarter because of those. I'd say when you read somebody else's -- and this goes for people outside of The Fool, as well -- often we'll get some questions from people when a short report comes out about a particular company that The Motley Fool really likes.
They say, "Man, this report came out. It's a hundred pages long and they say how much they hate this particular company." And my answer is they could be right and we could be right. You mentioned duration, there, or time frame. We're long-term thinkers and investors, here, so when we make a pick, we're looking out three to five years at least, and hopefully a lot longer with that pick, where people that have a negative view, particularly if they're short the stock, that's usually a very short time horizon. They put out these reports because they have to have action on the stock, otherwise, they have to buy another short, and that costs more money.
So we could both be right, but I would just say we're pretty good. Tom and Dave have a good track record but understand the argument. We don't have a company line on any particular stock, and we would encourage you to read negative things about your company so you have a better perspective.
Southwick: I stumbled upon one of these examples today. I was on Fool IQ, which is where we aggregate all of our analysts' stocks. I needed someone to talk about Tesla with a reporter, so I went to Fool IQ. And it said "negative conviction" for Tesla, but it's recommended at eight of our services.
Southwick: And I'm like, "Yes, that's a mixed message. I can completely understand why our members are confused."
Hartzell: Yes, and it happens.
Southwick: I'm confused! I don't know.
Hartzell: Tesla is a perfect example of a company like that, because the optionality for this business is so wide. I mean, there's Elon Musk. There's a lot of things around Elon Musk. He makes headlines every day, some good and some bad. But he's ridiculously smart and has accomplished a lot. And then as far as the business, there's some debt. They only hold about $10 billion in debt on their balance sheet, and there's some questions about that. And then they're launching into new countries and developing new models, and self-driving and all this kind of stuff.
So this is one of these businesses where there are just a lot of questions around them, but also a lot of opportunity, so that means there's going to be a lot of divergent viewpoints on that business, and there are within the company and outside of it.