Bill Gates, the co-founder of Microsoft and one of the world's richest people, recently gave a commencement speech at Northern Arizona University. Gates, who now dedicates his life to philanthropy, has one of the smartest business minds in the world, so investors can learn a lot from him. Here are three takeaways from his recent address.
1. "Your life isn't a one-act play"
Gates told graduates that while career decisions they make right after college might seem like a big deal, they are not permanent, and most people do not end up spending their entire career in one industry or position.
Investors should heed this as well. While we always recommend long-term investing at The Motley Fool, you cannot be glued to stocks and must be willing to change your position if there is a fundamental change to your initial investment thesis. The reality is that stocks you love today might no longer be good in five to 10 years.
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Another lesson investors can glean from Gates is being open to investing in new companies and sectors. Just because you are a growth investor or try only to invest in utility stocks, you shouldn't turn down a great value opportunity or avoid other sectors at all costs.
You'll want to understand the investment if it's in a sector where you don't typically invest, but don't be afraid to buy something you never have before. It's going to require more work to get up to speed, but having that knowledge will pay off later because it broadens the number of opportunities you'll have.
2. "You are never too smart to be confused"
When you've succeeded in life, it's easy to be overconfident and embarrassed to ask for help when you aren't sure about something. But humility is a huge part of life -- and investing -- because there is an endless amount to learn.
A key to successful investing is acknowledging what you don't know or are unsure of, and then not being intimidated by it. Aggressively pursuing answers could mean reaching out to the investor relations department of a company, digging through regulatory filings, or asking another investor who might know.
Gates told graduates that finding smart people to learn from is crucial to success. They can be found on networking sites like LinkedIn -- or even Twitter, given the number of investors tweeting about stocks. The key, Gates says, is to not be afraid to ask for help.
3. "Don't underestimate the power of friendship"
Building on that last theme of not being afraid to ask for help, Gates recommended trying to make as many friends and contacts as possible because you never know when someone might be able to help you in your career and vice versa:
The people you've [socialized] with and sat next to in lectures are not just your classmates. They are your network. Your future co-founders and colleagues. Your best sources of support, information, and advice. The only thing more valuable than what you walk offstage with today is who you walk onstage with.
The same can be said of investing. You might not understand something a management team just said on its earnings call, or why the market is selling a stock when you thought quarterly earnings results looked pretty good. If you know a few people who follow the same stocks as you or are just really knowledgeable, then being able to talk to them will be essential.
It also helps to be able to bounce ideas off of others invested in similar stocks or sectors as you are -- which will make investing a much more enjoyable and social experience as well.
