The Investment Style of Tom and David Gardner: Co-founders of the Motley Fool.

Tom and David Gardner co-founded the Motley Fool, a multimedia firm created with the purpose of investinghelping the world invest better.

They are frequent commentators, astute investors and financial educators. Their insightful commentary is articulated beautifully and succinctly, in this post I’m going to briefly summarize their best bits.

Tom and David Gardners Time Horizon

They embrace the idea that you’re investing in businesses. Therefore the actual movement of the stock price should come secondary.

Peter Lynch ‘Although its easy to forget sometimes, a share is a not a lottery ticket… its part-ownership of a business’.

Moreover their timeframe is a little longer than Wall Street, that of the professional community.

They look for shares that will perform well over a three to five year investment horizon. Metaphor they use – ‘you are fishing in a different stock pond to the rest of the professional community, and in fact its a stock pond, and in my opinion few fisherman have their poles in that particular pond’

Furthermore, they embrace the stakeholder model of investing. Rather than rigorously focus on earnings (which are important), they look to the culture of that organization, how they serve their customer, what is it like to work there, what is the performance of the business over a long period for its stakeholders?

Does this company make the world a better place?

Accountability and performance

He says we all have a ‘finite store of energy’ or ‘attention units’, ask where will you allocate these over day, week, month etc.

In the investing world: David Gardner ‘You will do best as an investor if you don’t trade very often’, this indeed is echoed by the frequent warning ‘trading is hazardous to your wealth’.

All of their stock picks are monitored and scored. Strongly believes in transparency as it’s the ‘first seed you have to plant to show that you’re a accountable and competent person’.

He believes we should be evolving continuously over time, ask yourself, what are you growing into?

In business world, companies which get complacent with their business models and are not willing to embrace and adjust to change will fail – HMV

To be adaptable and nimble, you need to be open to new ideas and viewpoints.

Tom and David Gardner on Mistakes

Too much complexity? we should delight in it as you go deeper into a subject. Life would otherwise be boring.

But the only way you develop is by getting your boat out there in the water and learning.

You learn by doing. Sitting on the sidelines denies yourself the opportunity to make mistakes, which are the best ways we learn in life.

Each mistake contains a rich trove of information, they contains a powerful lessons and you should therefore make more of them (the ones that don’t severely damage you).

David Gardner life’s lesson

It’s natural human tendency to fear what we don’t know. We have two options, first don’t go there. Or go ahead and do it, for people who are intellectually curious and believe life is an adventure.

Used to do a radio show. His advice on doing radio, someone said ‘lead a more interesting life and just talk about it’.

It wasn’t about trying to be really good on camera, if you do interesting things in life, you have more to talk about.


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