Motley Fool Money - Why and How to Invest, with Tom and David Gardner

Episode Date: January 8, 2022

There's no substitute for being invested with skin in the game in the world at large. In this weekend conversation, Co-founders of The Motley Fool Tom and David Gardner explain why. In this discussion the Gardners cover: - How investing fits into the pursuit of becoming smarter, happier, richer - The importance of being a lifelong learner and investor - Using index funds and how to approach buying individual stocks - Two core Motley Fool approaches -- Rule Breaker and Everlasting investing philosophies - Setting the right expectations for returns - Mastering the mindset of investing and managing volatility If you aren't already a listener, check out David Gardner's Rule Breaker Investing podcast at RBI.Fool.com And you can follow Tom and David on Twitter @TomGardnerFool and @davidgfool. Learn more about your ad choices. Visit megaphone.fm/adchoices

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What? Oh, boy. Fantastic. You guys go hard, man. Daredevil Born Again, official podcast Tuesdays, and stream Season 2 of Marvel Television's Daredevil Born Again on Disney Plus. There's no substitute for being invested with skid in the game in the world at large. And it does have you, once you do that, paying attention far more than if you weren't.

I'm Chris Hill, and that was David Gardner. Today on Motley Fool Money, we're stepping back from News of the Day to have a broader conversation about the pillars of investing success and how to set yourself up to be a lifelong learner and investor. And who better to do that than the co-founders of the Motley Fool, Tom and David Garvey. They share lessons they learn from people like Warren Buffett and Peter Lynch, key elements of core Foolish investing styles, and some of the things they look for in companies before they invest in them. Think of this as the greatest investing class you never got the chance to take in school.

I'm Tom Gardner with my brother David, co-founders of the Motley Fool, spending the first half-hour class of this series talking about why. we invest and how we invest. And really the Motley full way of investing. David, thank you so much for spending the half hour here. You bet. Let's do it. Why do you invest? Well, I think the most obvious reason to invest is that you are hoping to make some money in order to do something in life. And a lot of people think of it in terms of retirement. They think they'd like at some point to not have to go to their day job, whatever that is. And they imagine that if they invest well, they can in fact achieve that independence. And yeah, it's happened. It's happened for me. It's

happened for you. I know, Tom, it's happened for now in our 29th year at the company. It's happened for tens of thousands, maybe hundreds of thousands of people that we've joined our services and have gotten that financial independence. So I think the number one reason, it's not the only reason, but to invest, is because you're wanting to do something with the money that you're going to make. and a lot of us are trying to buy time and buy freedom. And the mission of the Molly Fool, our company-wide mission, is to make the world smarter, happier, and richer. And you've kind of highlighted the richer component of it.

I think you've included some of the others as well. But what makes you happier as an investor? Well, I think one of the important things that you and I have always felt we want to teach the world is that stocks are not just ticker symbols. Stocks are actually just the ownership in a company, and it's the company and it's the product and service, it's the humanity. It's all of the good stuff that happens behind the stock. You and I get to be part owners of companies through the miracle of the stock market. But really, for you and for me, Tom, we want to have fun following the companies

we're invested in, right? A big part of the reason where the Motley Fool is we're here to educate and enrich and amuse. We've always thought about the court gestures of your and how they made things fun for everybody else around them. So I think it's not just about mechanically following some plan to achieve financial independence at some point. I mean, that does work, and it's a worthy goal. But I think for us, it's so much about what the companies themselves do and whether they're making the world better and whether we enjoy following them. I've observed in our family over many decades that really thinking about our father and his brother, both, I think, began investing before the age of 10 and just observing some of their conversations where they, I remember one a few

years ago where they were debating who had made the worst investment between the two of them. So that fun and joy, the competitive fun of investing and also just the humility, the journey that we're all on sort of testing and learning our way through understanding business and how to assemble a portfolio and how to make money sustainably over a long period of time. How about smarter? How does investing make you or any stock investor or your fund or ETF investor smarter? I think there's no substitute for being invested with skid in the game in the world at large, and it does have you once you do that paying attention far more than if you weren't.

That's a big reason why the Motley Fool Foundation and the Motley Fool are going to work so hard of the next 25 years to get people thinking that they can be part of the same. system, that they are an investor. In fact, they've always been an investor. They just didn't realize that that was the word they should use, but any time we spend a dollar, we've made an investment, whether it's in a stick of bubble gum or a 401k plan. And so I think a big part of that, Tom, is that we are switching people on to realizing they are included. They are part of the system and the companies that are going to help them achieve financial independence. Well, we want them to care about those companies. And yeah, I think it makes you a lot smarter when you're starting to ask those

kinds of new questions. I mean, just think about a company like, I don't know, Twitter. I think Twitter makes me smarter every day. And the act of investing in Twitter, it's not been a great stock pick. It's been up and down over the years. But it's maybe pay more attention to social media. And then I think about meeting an author for the first time as book you love just because you can direct message them via Twitter, which would have been a dream when you and I were 15 years old. So I think just the act of being in the game makes you smarter, assuming you're trying to play to win. Before we now move out into how we invest, we've got a few sections that we'll be discussing here in this 30 minutes. I just want to close with what you think are the one, two, or three things somebody needs to have in place before they invest.

And whether those are based on age or experience or an amount of money you have, can a 12-year-old be investing in stocks as readily as a 60-year-old? year old. What do you see as the one, two, or three things you think somebody should have in place to begin investing? I think the first thing that comes to mind, and it doesn't matter what age you are, it's to be a lifetime investor. I mean, I think that's what really separates people who are truly investors versus traders. So if you're making a lifetime commitment, as you and I have, Tom, to being an investor, in my case, the stock market, yours too, but there are other approaches, real estate. We have some great advice at Million Acres of the Motley Fool. I mean, venture capital. We do that too. There are lots of different ways to invest, but it's really taking that lifetime mentality.

So for me, whenever the stock market starts to sell off, I stay invested. I don't enjoy watching the stock market drop just like I don't enjoy watching my sports teams lose from time to time. But if you are just as you are a lifetime sports fan, if you're a lifetime investor, that will make huge difference in your mindset, your mentality, and your results. So that's probably the number one thing that comes to mind. It's something that is available to us all. There's such a temptation to think short term, to fear of missing out, to speculate, and to have high expectations. And those three factors together can destroy a lot of the opportunity to get smarter, happier, and richer. And so everything that we do at the Motley Fool is about that lifelong set of

goals and building rather than kind of crossing your fingers and hoping something appears in the next six months. Now we're going to go out into the How to Invest, and there are going to be five segments of this classroom. The first is going to be talking a little bit about index investing versus stock investing. The second is, what are the core principles of our stock investing approach, a little bit about rule breaker investing and everlasting investing, and then what type of returns are reasonable for someone to expect over time, and then how to handle the volatility and the, you know,

the emotional journey of being an investor. So let's start now with index investing versus stock investing. What do we see as a few of the strong supporting points behind being an index investor? Well, I'll give one, but I'm going to ask you back because I want to make sure it's not just you interviewing me. I think an important thing to recognize is if you're going to be an index fund investor, obviously you need to know the definition of that. A lot of people hearing us right now already know what that is. But I guess in the interest of making sure everybody does, it simply means that you are putting your money toward a manager. You're handing your money over to somebody else or a computer, and they are allocating you into the components of an index.

A common example would be the Standard Impores 500, and so there are 500 really big companies that kind of make up the building blocks of an American business. And if you give your money over to that human slash computer managing you, they're going to put your money into 500 little pieces. So if you have $500, they're going to put you $1 in each of those 500 companies. And now you are in an S&P 500 index fund. You could have selected a Russell 2000 index fund, which is 2,000 small companies. You could have selected a restaurant index fund or an ETF, and then you'd just be invested in all the restaurants. So the concept of being an index fund investor means, number one, you're giving your money over to have it mechanically allocated. And then

Number two, it's all about what is the index that you are invested in. And because of that mechanical allocation, and this was really popularized and created by Vanguard and Jack Bogle, who we were able to spend so much time with over the last 20-plus years of the Motley Fool, that mechanical approach means that the fee structure is very low. It undermines a lot of the fee-based models in financial services because that automated methodology and that distributing the capital, and in the S&P 500, often capitalization weighted, so you're actually getting more of the larger and less of the smaller, although there are many different flavors of index funds, that it is essentially free, just about, and very tax-efficient, because

you're not doing a lot of transaction. It also allows you to budget because there are historical returns to the S&P, and you can loosely make some estimates and draw up some expectations about how the market would perform over a 10-year period or a 20-year period. Any given year, obviously, there are going to be a lot of volatility. But when you buy an index fund, you know what you own. It's automated. It's essentially borderline free, very tax-efficient, and you can budget around it. And those are very advantageous. Now, what would be the reason, David, that you would choose not to invest? Why are we not primarily index investing at the Motley Fool? Yeah, it's funny because our first book, Tom, the Motley Full Investment Guide, you were the one who really set this up, but we kind of put it forward as something worth doing.

And then the very next chapter, we yank the rug out from the reader and say, but why would you do that when you can actually buy directly individual companies? So I think a big reason for us is that you can outperform the index. And I believe you can do so with confidence, even though a lot of academia still believes that that's not true. And that's one of the reasons we love being fools. We love challenging conventional wisdom, but I think our records will show that we have consistently outperformed the indices. And therefore, why wouldn't you want to do that? Why wouldn't you want to buy stocks directly? And I think the whole secret is simply buying the good ones. And I'm not trying to be facetious there. I'm not talking about the good stock last year or the good stock that you think will be good the next quarter.

We're talking about the great companies of our time and just being invested in those companies. So those are in the indexes, right? But so are all the mediocre ones and some downright bad businesses as well. And so when people buy an S&P 500 index fund, I might like 50 of those companies. I'm not sure I want the other 450. And so I think a big part of it is discernment as to what really wins in business and therefore what you want to be invested in. Now, you and I both know that not everybody is going to want to go through that journey, spend that time. In fact, Tom, I think it's fair to say a minority of people in the world today actually want to spend time buying stocks directly. But that's what I see. What else do you see there?

Well, I think we've talked about index plus a few is a great way to invest. You could take, if you had $50,000 to invest, you could take $35,000 of it and put it into one, two, or three index funds, and then take the remaining 15,000 and divided across a dozen or two dozen different stocks. We're in a wonderful world now where the transactional costs of investing in stocks is essentially free, very close to free. Obviously, there are some hidden costs in there, but very, very inexpensive relative to when the Mali Fool started in 1993 and you'd be paying $59 or $99 per trade. It wasn't unusual to actually have those prices. So now it's easy to distribute your capital across a number of stocks. And so maybe having an index fund for some people

or collection of them and stocks, that's definitely part of the Mollifle way of investing. But I want to transition now toward the stock investing portion of your portfolio. We know, and for us and our family growing up, nobody bought index funds. We're an all-stock family, but we're a diversified stock family, and we're looking for the great companies, not looking for the trading and stock price momentum price movements in the short term. So I'd love to hear, Dave, what do you see as a few of the key Motley Fool principles that are distinct from what somebody might encounter looking elsewhere for investment guides. Well, this might just recapitulate something said earlier, but let's make sure we double

underline it. I think if you're going to be buying stocks, please be buying businesses, not the tickers. And there's a lot to unpack there, and we only have limited time. But really, so many people are just thinking about what's the ticker symbol. And then some people are looking at the chart or the graph of the stock and looking for patterns. And as soon as they buy, they often are thinking, what's my target price where I'm going to sell? And so you have people who are really not, I think, using the beauty of the tailwind that the stock market provides you as something that consistently rises over time. Instead, people are jumping in and jumping out.

So I think, number one, just be a business-focused investor. And I really think that, Tom, that's something that you and I, I mean, certainly reading Peter Lynch or Buffett, I mean, there are some great exemplars that predate us. But I think the Fool, when we launched 30 years ago from day one, we were basically talking about businesses and buying the businesses and not getting caught up in stock market talk. So that's at least number one that comes to mind right away from me. What's one for you? Well, I think also on that point about Buffett saying at one point, he was asked, well, why doesn't everyone just copy what you're doing? And he said, well, I put all my principles out there, but there's just something that causes people to approach investing in the markets differently and to not think about business.

And I think a lot of that is reinforced with, you know, headlines and short-term news and just the way that our brains are wired. It can cause us to think. And a lot of people still think the stock market is closer to a gambling casino than a system for funding, innovation, a business, employment, opportunity, growth. And so I really love that first point. When you're investing the Mali Fool way, you're definitely looking at the companies that you're invested in. That is more important than the price of the stock as you're evaluating that investment. I'd say a second one, which you started our conversation off with, is to be a lifelong investor. That is a motley full principle to the core. We would never think, I'm going to drop into the market here for the next two years and hope

that I can make enough money to accelerate a payment on my mortgage or be able to pay for some travel around the world. We would always be deploying our capital and thinking, this is going to, this feeds a process that I'll be following for the rest of my life. And that's part of the reason that our mission statement is uses comparative words. We are not trying to be the best, the smartest, the happiest, and the richest person that we know. We're not just trying to get smart, happy, and rich. We're trying to constantly get smarter, happier, and richer together from our work. And so that's a lifelong journey. So I'd say principle number one, please be an investor in businesses if you're investing the Motleyful Way. Number two, please make it part of your

lifelong journey and you're always kind of adding capital and always trying to learn more. What would be, let's have a third and a fourth principle and then we'll move a little bit to rule breaker everlasting. So we've got business focus and lifelong investor. What's your principle number three? Well, I guess diversify. Again, we've already spoken to it, but we're going to go in circles on some of the really key points because we need to make sure everybody is bought in. Everybody hears it, maybe rehears it and then starts to make sure that they act in accordance with it. So for me, and I know for you and for our company, everybody, making sure that you are not pinning your hopes on one stock,

one type of investment, one NFT, one fill in the blank, but that you instead are taking a comprehensive approach. One thing we love about index funds, of course, is that you are almost by definition diversified, Although if you're just buying an ETF that's a genomics ETF, you're diversified within that, but you're not really diversified, are you? So I think that that's why for years now, we've talked about having anywhere from 15, 10, 25, 25 investments, even at the start, and hundreds maybe before you're done.

We have members who've done wonderfully well, well-beaten the averages, and they own more than 100 different investments. So I think for a lot of people, especially when they're starting, they think they just need to find, what's that one stock, that one idea? But that's really, as soon as we hear that, we're like, okay, yeah, and what are your other 24? The data shows across Motley Full Services, and this is past performance, so we don't know what it means about the future, but you have a high likelihood of profitability with the Motley Full style of investing if you buy 25 or more investments in companies and hold them for five years or more on average. That really puts you into the data set of

that long-term compounding, looking for high-quality companies, as David said. So there we go. There are three principles, and I'll add the fourth. Let's restate the three to be a lifelong investor that's business-focused, that's diversified. And I would say the fourth is about you and about all of us, and that is to be inquisitive. And one of the things we've been working on at the Motley Fool is to truly be always on as a company. We want to be a place, a digital home for you where 24-7 you can come in and ask questions and keep poking around to learn more and figure out how to manage your capital more effectively, but also how to learn more about individual companies. Every one of us has a competitive advantage in the zone of our areas of

greatest interests in life. That may be cooking for you. That may be exercise. That may be genomics. You may be an engineer. You may be a software developer. Each of us has a circle of competence. And if we continue to inquire and study that area of our lives, it presents a lot of investment opportunities as well. So I love those four principles. And those are core Motley Fool investment principles. Now we're going to talk just a little bit about two styles of investing inside the Motley Fool. And there are many different styles. But I'd like to hear, Dave, just what you would identify as a couple of the top principles of rule breaker investing. Then I'll share a couple principles of everlasting investing.

Enlighten us for anyone who hasn't yet encountered the rule breaker investment principles. And you talk about them in the Rule Breaker podcast that you do, what are some of the key guiding, themes of being a successful rule-breaking investor. Well, I think for me, number one, is that you're looking at companies that are, the phrase I've used is top dogs and first-movers in important emerging industries.

So you're very focused on who is the best innovator, and it's not just the best innovator of all. It's in every industry. In every industry, there are innovators. And often they're upstarts, and a lot of the time they're disrupting the status quo in some way, shape, or form. That's why I selected the phrase rule breakers, because the rules out there are being set by the businesses that already exist. Some of them,

great big Goliath companies, they are the rule makers. They're setting the way that business happens. But when all of a sudden you say, hey, actually, we're going to try something new. What if you bought something by clicking something online and it got mailed to you? That's a very disruptive thing. And Amazon did that about 28 years ago. And that's about how long we've held the stock. And it's a great example of the rewards of finding top dogs and first movers in important emerging industries. So that's obviously a really big one for me, Tom. And I think that you have to be willing to lose. That's the second one. Because just like a venture capitalist, you're going to be wrong a lot. And so you have to be okay with that. That's part of the reason we diversify and don't

pin all our hopes on one company. But it's also just worth remembering in life that sometimes your expectations simply won't be met. And sometimes, by the way, you're pleasantly surprised. I've had stocks like Priceline is now booking.com that I recommended thinking it wouldn't do that great. And it ended up being one of the best picks I've ever made. It completely shocked me, right? It didn't fulfill my own thesis for the company. So I think that, again, top dogs and first movers in important emerging industries,

that's a stocked pond where if you just fish in that pond, you're going to have probably some of the best stocks of your generation. And if you just even have one of them, they can float in an entire portfolio, even though we stay diverse. But that second one is being willing to lose. On that first one, I think of just the mind and the approach of deciding, let's create an electric car. There were attempts at it before. Let's have a supercharger network. Let's start developing software that could maybe allow these cars to drive themselves. There are so many disruptive sort of breakthroughs in that style. And you often, this would lead a little bit into the everlasting style.

And these are obviously such complementary styles of investing. The core Motley Fool principles are more important, really, than the individual styles, I think, to get people business-focused, lifelong-focused, adding capital and diversified and being inquisitive. And then we get to a little, the stylistic things. And I would just say, in everlasting, I might start to add in, who are the decision makers at the company? How are decisions made at the business? There have been some companies where I loved everything about it and then really found

that a big financial institution owned more than had the voting rights or owned more than half of the company. So you might end up with a very disruptive, a great team that's working toward an amazing mission. But ultimately, they're beholden to a large bank that is trying to harvest that company and sell their shares in the next couple years. So the decision-making structure at the business, the ownership, and it does communicate skin in the game.

Warren Buffett has said that his favorite investments are investments in people who are running a business that they view is the only asset their family will have for the next 100 years. So there's a very long-term mindset to that ownership style. And then the second factor I'd mention would be tilting a little bit more towards smaller companies. It's not a necessary thing to succeed, but small caps historically are underfollowed in the public markets. They aren't the companies that are discussed on the daily financial news coverage

of the markets. Looking where others aren't can be a wonderful way to invest. And we've learned so much from other great investors who have outlined principles like these. But I think the rule breaker breakthrough investment style is a game changer for a lot of individual investors. and everlasting really is bringing some of that ownership long-term five-year hold and maybe looking at smaller cap companies as well. And those are just a couple of flavors of Motley Full Style. We have so many great analysts and so many great community investors out on our Caps platform at Caps.Fool.com that you can learn from.

But thank you for that, Dave. Now, what about what types of returns should an investor somewhere between expect and hope for over the long term? So let's say somebody is listening right now there. I'm buying into the Motley Fool way. I'm going to follow these principles. Now, tell me what I can expect from this. Well, I think the first thing you should know is that the stock market traditionally returns somewhere between 9 and 11 percent annually, depending on which country we're talking about over which meaningful long-term period. Some countries don't have a developed or strong economy,

so they're not going to be racking up 10 percent returns every year. But at least the United States stock market, the biggest and best one in the world, has done that for decades. And so for that reason, it's really good to remember that because that's your tailwind. And you can get that with the index fund, as we mentioned earlier. And you can be done with your day and you're investing life, if you like, by just saving every two weeks and putting it into the index fund, which is what a lot of people do through their 401k retirement plans. And that works. That's why a lot of Americans do end up retiring and getting some of that financial freedom they're shooting for. So I think that 10% is probably the best expectation anybody should have. By the way, that's a lot better than bonds, which are typically 5%. Or, well, bank accounts have been paying 1% or so until recently. With inflation up, it's probably going to need to rise a little bit. Of course, the state lottery is minus 50% every day for people who are invested in that. So it's helpful to know these kind of big box, big picture return expectations. I'm happy to say that Motley Fool Stock Advisor and some of our services have racked up returns closer to 20% annualized.

And that's a really profound difference than just 10%. It feels good to be beating the market in any given year. But if you keep doing that year after year after year, you can really roll up some outstanding performance. So we would never promise that. That's never anything. We always shoot for it. So you should know that in our services, at least the ones that have those stated goals, we're trying to beat the market as badly as we possibly can.

We have a pretty good record for doing so. But I've never, Tom, and you tell me whether you have, I've never put a number expectation on what I'm going to do with my investing portfolio or investment approach or over any short term at least, but maybe even over any period at all. I'm just not somebody who puts a number in the air and tries to hit it. I just try to exceed. How about you? I sometimes will mark out goals of, you know, a 6x return from an individual stock over 10 years would be 20% per year. And I'd say the only reason that I do that is to try and provide context to everyone for what we're aspiring toward. Because I do think a lot of investors come

to the markets and have no idea when they first arrive. If we do surveys, we do sometimes see people, particularly when markets are performing very well, I'm hoping for 30 to 40 percent a year. There's not an investor, really, outside of venture capital in the public markets that's consistently gotten any return like that. And conversely, at the other end of the continuum, yes, the investors that say, this is just a great being gambling machine and it's most, most of people are going to lose money. That's actually not true. Most people should be making money. Most people should be getting close to at least around 10% a year over long periods of time. And I'd say in Mali Full History to hope, aspire to be in somewhere in the 10 to 20% annualized return zone. That's probably

just loosely. I think it's helpful just to provide a little bit of context for how we've performed over our 25 plus year period and what we aspire to. But I also I also agree. There's not really a scoreboard where if we don't get to that number, that was a real loss for us. We're really aspiring to do better than the average market return. But David, in getting those returns to close out our Saturday classroom, there is a lot of volatility in the equity markets. And for somebody who's arriving to the Motley Fool style of investing now and listening, how do you face volatility? Some of our favorite companies at any point in the time, you'll look and see, oh, it's down 25 percent, this one stock, or my overall portfolio. is down 17% right now. Or I've had three great years, and I don't know what to expect, is three up years in the market. Should I expect the next three years to be up? So just talk a little bit about how you approach the volatility of pricing in the market. If it's 10% annualized, as you said, it's certainly not that every single year.

Well, I think that if you've made a lifetime commitment as an investor, and we talked about that earlier, if you're doing that, then the only thing that really makes sense is to expect that you will have one year in three where your stocks will drop in value. Two years in three, they will rise. You're going to be invested in all three years, and then three after that and three decades after that. And so, from my standpoint, it's not very hard to work with volatility, because as a lifetime investor, I know we're going to have drops. We've had dramatic drops in Motleyful history, 2001. We all remember that, 2008-9. The fourth quarter of the fourth, quarter of 2021 for a lot of full stocks was a tough quarter. So was 2018, the final quarter there,

or check 2016. So even though a lot of people think in terms of like, this bull market, when will it ever end? I think we've seen together that the stocks that we follow anyway have gotten crushed at different points, down 25% in a month at different points in just the last five years. So I think you have to be going in eyes wide open recognizing that. And if that's not for you, there are certainly ways to mitigate against that or invest more conservatively. This kind of volatility that let's say I am willing to accept as a rule breaker is much more than the average person would or should. And you don't need to have that kind of volatility to feel great about your investing. So I guess it's knowing what color your parachute is, as the old book said,

and then making sure you're flying appropriately with your parachute and you're going to have a soft landing if you're looking for one or maybe a little bit of a reckless landing. if you're willing to, I don't know, really go for it out there. So knowing yourself is a big part of this as well. So closing with a restatement of our first Saturday classroom, we talked about why we invest the pursuit of a smarter, happier, and richer life for ourselves and our families and for the world. And then as we go out to invest in the equity market, seeing the opportunity to be an index fund investor, a stock investor, an individual stock investor, or a blend of the two, the beauty of the index fund being that it's very low cost, very tax efficient,

you know what you own. You can just add money to it regularly and kind of almost set up budgets around long-term returns. And the beauty of stock investing is you learn a lot more about the world. And you can really put your capital behind the things you believe in. And that can include your personal ethics as well as the things that you think are going to win over the coming years and decades. And then we talked about some Mali full core investment principles like being a lifelong investor, investing in businesses, having a diversified investment portfolio. and really being inquisitive. We then talked about the rule breaker style of looking for the disruptive innovators of our time. It's an important thing to remember that innovation is always coming. We sometimes think, oh, I missed that one.

Oh, too bad. There will never be something so exciting as what we've just been through. And of course, that is not the case. In the market system that we get to enjoy in this world, there are entrepreneurs coming, thinking of the next great opportunity, to serve the world. And then to take that maybe that everlasting style of really those long-term ownership periods and thinking about who's making the decisions and what are the small companies that are rising in the marketplace that present opportunity. Then we talked about what type of

returns are reasonable. The equity markets delivering about 10% annualized over the last century. And we try and beat that at the Motley Fool. And we close with a little conversation about the volatility, the natural ups and downs of the market. On average, the market falls 10% once a year. 20% every four years or so, 30% once a decade. And when that happens, a lot of growth investments can go down more than that. So just accepting that as part of the lifelong journey, that there are going to be ups and downs in any given year and ups and downs within your portfolio. You are going to have losing stocks in your portfolio. But when we blend it together and take these principles and build around them, we've got a couple decades of success that we're excited to build on at the Motley Fool with you over the next couple decades.

David, thank you for being here on the grand debut of Saturday Classroom and Molly Fool Money. Well, thank you for the invite, and it's been a lot of fun. Thanks, Tom. Full on. Full on. You can follow Tom and David Gardner on Twitter. We've included their Twitter handles in the show notes for this episode. That's all for today, but coming up tomorrow, a one-on-one conversation with the co-host of CNBC's signature show Squawk Box, the one-and-only, Becky Quick. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy yourself stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.