Healthcare Bureau Chief Max Macaluso recently sat down with Motley Fool co-founder David Gardner to talk about fear -- the emotion that causes some investors to shun complex industries like biotech, and even not invest in the stock market at all.
In this video segment, Gardner points out that, if fear is born of ignorance, the solution is obviously education -- but there's no such thing as "investing school." That's where The Motley Fool comes in; he discusses the Fool's role in "switching people on." The full version of the interview can be seen here.
A full transcript follows the video.
Max Macaluso: Going back to fear; are you completely fearless? Do you have some level of fear every time you make an investment?
David Gardner: Yeah. Obviously, I'm not fearless. Neither are you, neither is anybody, and anybody who ever told you that they are, I would say, "Really?" There is some delusion out there, I guess.
There's a great line about courage. This is kind of a cliché and I won't reproduce it perfectly, but courage isn't that you don't feel fear. It's that you go forward, feeling the same fear that anybody else would. Heroes, whether they're military, right down to something as simple as investing ...
You, as an investor ... we have so many heroes among our members. It's pretty heroic to even invest. You have to take what you've worked toward, that you've saved -- as opposed to spending in a spending-rich environment, where everybody's always telling you to spend your money -- that's pretty heroic, just to save.
Then to take what you've saved and put it in something else outside you, that's going to go up or down, that is heroic effort. None of us does so fearlessly. Even when you put it in a stock that you feel like you don't know that well, you're going to feel fear, again, all the way through the process.
Maybe a little bit of a digression but what I want to say is, no one proceeds fearlessly, but you have to lean in if you take our approach, and be intellectually curious, and find things that you think might do well in the next five or 10 years.
Macaluso: Right. One last question about fear, and then we'll move on.
Gardner: I'll try to do better with this one than I did with the last one. I think I lost my thread a little bit there.
Macaluso: No, no, no. It was very insightful.
We're talking about fear that some investors have when looking at complex industries like biotech, but some investors aren't investors at all because they're too scared to take control of their own finances, so they'll give their money to someone to manage it for them.
Why are a lot of people scared to manage their own money, and what do you think The Motley Fool is doing better today than it did in the past to encourage more people to invest?
Gardner: Those are two good questions, and somewhat different.
I'm going to definitely start with the first one, and why is there fear out there. I think there's fear out there because there wasn't education in the first place, so "there be dragons."
There isn't a perceived source of good education today. On the one hand you think, if you really want to learn business, I guess you think you have to business school. Some people just start businesses and are entrepreneurial, but that's a real minority. If there weren't business schools, there would be even more fear about what business is.
There aren't investing schools. I guess there are a couple, and you can take an investing course at business school, but where is the school to invest? I think it's online and I think it's at Fool.com, but even at our website we don't have a formal curriculum, and we haven't organized ourselves yet to help you "go to school," the school of investing.
As a consequence, the sad irony, you have an incredibly important subject -- money -- and you have a mass populous that largely doesn't have education about one of the most important subjects of the rest of their lives. That's the sad irony of where we are, but the good news is that there are all kinds of resources out there if you just start ...
Now, to get to the Fool, I think we switch people on. I think a lot of people, it's not cool to even think about money in college or high school, and then to talk stocks feels like "not me" for most of us.
But the reality is, once you start to realize that investing is as simple as thinking, "Oh, I go to lululemon (NASDAQ: LULU). I might as well buy a share," or everything from Twitter (NYSE: TWTR) IPOs to Facebook (NASDAQ: FB) IPOs to Chipotle (NYSE: CMG) or Starbucks (NASDAQ: SBUX), you could own it as you drink it or eat it.
You start to realize, when you look at it that way, we all should be doing it. If you're going to spend your money there anyway, why not be paying yourself back some? It doesn't have to be complex, and it doesn't even have to be biotech.
I think that making it clear, as the Fool continues to "switch on" more and more people to how easy it is, and then how much it matters. How many people have come up to Tom or me at a book signing that we've done over the years at the Fool and said, "I'm finally getting started. I'm 50. I know I'm coming back. I'm making up for lost time here, but now I get it, and now I need to do it. I want to retire. I want to be financially independent. I want to be able to make my own choices the last 50 years of my life."
We love it when those conversations happen with 15 year olds. We're happy to have it with 70 year olds, but I think it starts with your parents or your kids. I think in families ... people who really get it, who are on our site early, their parents asked them some important questions early, and they were thinking ahead.
I'm not going to be any more digressive than I already have with that one. It's a really good couple of questions, and I think we at the Fool have a real role to play, and I think we need to really up our game, too.
David Gardner owns shares of Chipotle Mexican Grill, Facebook, and Starbucks. Max Macaluso, Ph.D. owns shares of Facebook and Starbucks. The Motley Fool recommends Chipotle Mexican Grill, Facebook, Lululemon Athletica, and Starbucks. The Motley Fool owns shares of Chipotle Mexican Grill, Facebook, and Starbucks. 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.