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Buy Businesses, Not Tickers

By Motley Fool Staff - Apr 21, 2016 at 3:03PM

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Motley Fool co-founder David Gardner shares his thoughts on how following trends or news can work against productive investing.

The stock world is filled with websites, podcasts, and other sources pushing picks based on the news of the day. In this clip from Rule Breaker Investing, Motley Fool co-founder David Gardner shares his view that following daily trends often works against productive investing. He explains that a company is more than just a collection of charts, news items, and other things that represent the stock, rather than the underlying business.

Listen in to hear how buying into a business rather than a ticker symbol will win out in the long term.

A transcript follows the video.

This podcast was recorded on Oct. 28, 2015. 

David Gardner: So, the Stock Advisor Way seven principles.

No. 1: Buy businesses, not tickers. This one comes straight from the mouth of Peter Lynch, the wonderful famous investor, Fidelity Magellan fund manager in the 1980s. That's the way he thought about things. I was very influenced by him. His book, One Up on Wall Street, was my favorite early investment book. I've only read a few investment books in my whole life. I spend most of my time reading books about business or culture or life, sometimes sports -- not so many investing books.

But that was a really formative book for me, and I know many others. I still recommend it today, even if many of the companies aren't as interesting, or even around, as when he was writing "One Up on Wall Street." 

But, buy businesses, not tickers. So much of the world is chasing after some combination of ticker symbols, charts, graphs, what happened yesterday, all kinds of things that have to do with the stock, not the business. I think we separate ourselves as capital-F Fools when we actually become business-focused investors, when we're business-centric, when we're in it to win it and we're finding things we admire and we think are going to persist over the course of a long period of time. Buy businesses, not tickers.

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