constantly be making investments. And here's what I mean. So my personality is such that I tend to bet big, if you will, I tend to make larger investments and fewer of them based on the research that I do. That has worked out well for me, but it can be a little volatile. But I've also missed out on a lot of things because I'm like,
Oh, I don't really have any capital right now. I don't want to sell this. If you see something that's interesting, make a little investment. I'm Mary Long, and that's Motley Fool, senior analyst, David Meyer. The start of the new year comes with the promise of possibility. Where might you be one year from now? How about in five, 10, 20? Something you start today could kick off a whole new way of being. You've just got to set the intention, make the leap, and keep on showing up. Keep on giving it your best shot.
Maybe your resolution is to go to the gym three times a week. Maybe it's to finally write that novel. Maybe it's to invest a bit more each paycheck. Maybe it's to start investing in the first place. To welcome in the new year, I rounded up a few of our foolish analysts and talked to them about their investing origin stories, things they've learned since then, and what advice they'd give to folks who are making the first steps in what is hopefully a lifelong journey as a foolish investor.
First, I went to Alicia Alfieri, a senior analyst here at The Fool, to ask her, when did you first start to think of yourself as an investor? This is a good question, and I think this also goes to the confidence of people investing. The first time I invested was in high school. I got my dad to agree to.
purchase a mutual fund with me, which was a great experience. And we can talk more about that later. But then when I graduated college, you know, you have bills to pay and it's your first time living as an independent person. And so I waited a while to invest. So I feel like I didn't really give myself the title of investor until
many years later when I was in my 30s. And I really started investing on a more consistent pieces. Okay. So let's go. Let's focus on high school. What? Okay. So many questions that come from this. So you can, you said you convinced your dad to buy a mutual fund with you. What had you found prior to that persuasive argument that you presented to your dad? What was it that you saw, found, learned about that made you go, Oh,
I don't want a puppy. I want a mutual fund. Well, and it's funny you bring up a puppy, but so I'll start from the beginning. Wait, my family had never been much into
investing, they thought of it almost as gambling. So there was a lot of discomfort in my family with investing. And I had a wonderful teacher in high school. My AP statistics and AP calculus teacher, we called him Captain Jim. And I remember one day he walked into the classroom and he said,
You know, money doesn't grow on trees, but you can grow your money. And then he started talking to us about the magic of investing and cow pounding. And I got really interested. I got sucked in and I did some research.
And I'm kind of dating myself here, but I'm going to do it. But this was right before Pepsi came out with Pepsi One. And I remember this was back when you could check stocks in the newspaper. And so I looked at the stock price. And I said, you know what? I bet Pepsi One is going to be a big deal. I think this can really help Pepsi's business. And by the way, I was a Coca-Cola drinker.
And I found out that Pepsi had a lot more products than just Pepsi. And so I said to my dad, we should buy Pepsi. And he's like, no, I'm not going to do that. And then what I did is this is the same strategy I employed when I wanted to have a dog when I was 12 or 13. Every day I would look at the newspaper and I would track the stock movements and circle it and stick it on the refrigerator.
and annoy my dad about it. And sure enough, the stock price went up. But in talking with my high school teacher, I realized there were other options to invest that might make someone like my dad more comfortable. And those were mutual funds. And so did my research to find a mutual fund that he might be comfortable with. And he gave in. And we still own that mutual fund together.
For senior analyst Bill Barker, a first paycheck, kicked off his investing journey. That and a bunch of books. I guess once I was gainfully, if not blissfully employed as a lawyer coming out of law school and started to have
a little bit of money saved and was very interested in the stock market, but didn't know much about it. And so I started reading some books and spending eventually a little bit of time online, which at the time that I'm talking about was a new thing. But the books were a big part of it.
what you're implying is that you're largely self-taught. What did you turn to to build out your own curriculum, if you will? Well, it started just with really well-written books, not about investing specifically, but about business. And one of those was Michael Lewis's Liars Poker, which is sort of an intersection of both, but also Den of Thieves and barbarians at the gate. These are sort of early 1990s classics and just
very well written books about riveting business stories, both the good and the bad of some things going on in the market. And of course, Michael Lewis's work as well, which any book that you can read by him is going to give you a great education. So eventually that translated into wanting to pick my own stocks rather than get
a broker's choices for me, and that led fairly quickly to the Motley Fool, which was a major part of my education in the mid- and late 1990s. Thinking about and trying to prepare for the future is what got David Meyer to start investing. Shortly after, a couple early and exciting wins cemented his love of stocks. My story goes back to 1995.
I had just gotten married to my current and only wife. And my first job took us to Indianapolis, Indiana, which is a very different place than Blacksburg, Virginia, where we met at Virginia Tech. So we're excited, right? It's new job. It's a new life. Everything's beginning. And we're like, you know what? Let's look ahead a little bit. Like at some point, we're going to want to buy a house
At some point, we're going to have a family. At some point, we're going to need to pay for college. We should start thinking about our retirement. And that's actually when I found the Motley Fool. I was a reader and a subscriber.
that long ago and it literally changed, it really changed my life completely because not only did I, I knew I needed to get, I knew I needed to learn these things, right? I knew I needed to understand how money works and understand financial advice. And, you know, I understand about business and I like stocks and things like that. But most of my thinking was,
I'll probably buy some mutual funds. There were no ETFs at the time. That's what I'll do. Then I literally found that I love stocks. I absolutely loved it. That's where I got my start was being a reader.
For my fellow Motleyful Money co-host, Ricky Mulvey, it was a practical task and a career change that inspired him to start thinking of himself as an investor. I really thought of myself as an investor when I had to roll over my 401k money from a previous job into an IRA.
and then you have a pot of money and you have to decide what to do with it. I had grown up, my dad was interested in stocks and investing. I was aware of it, but when you have to make those decisions for yourself, for your future, I think that was the Rubicon of when I became an investor.
So when did that snowball though? Because you go from, okay, rolling over your retirement account basically to now, okay, you're talking about stocks for a living. How did you get from point A to where you are now?
Well, I got hired at the Motley Fool, Mary. And if you're working at the Fool, you better talk about stocks. It's one of the great joys of working here. But I would say once I started working on this show, that's when I really got into the weeds of hopefully holding onto great companies for years, even decades at a time. And let's put a timeline on that because you started working here in 2021.
late 2021. So I got hired in about late November of 2021, which for those remembering the market, there was a lot of excitement. We were getting towards the end of the pandemic and still a lot of people interested in buying stocks. And in some cases, speculating David got hooked on investing after securing big returns on under the radar companies after the tech bubble burst. Ricky's early days as an investor looked pretty different, but they still brought an important lesson.
Well, the thing that happened that you can only learn by being an investor is, you know, I was buying stocks in late 2021. And when you get started investing, the thing you'll hear a drumbeat, you'll hear it the fool is that you got to hold for three to five years.
And you realize that becomes difficult when you buy something at a high and then you see it down sometimes 20, 30% for more than a year. You feel like a lowercase F full and it hurts.
But the reason you have to think in those spans of longer than longer than just one year is because then that ends up being your advantage as an individual investor. So what shaped me is sort of going through that. And I think that's prepared me better for the next correction bear market whenever that comes because it's going to come. I can't give you a date for it, but it's going to come.
You don't need a formal education in finance, accounting, or business to be a successful investor. Even with those things, investing can still feel pretty intimidating. So I wanted to learn from the fools I talked to, for people who are interested in investing but don't know where to begin, what homework would you recommend as a part of a DIY curriculum? I think reading everything that you get your hands on, listening to as many things as you can to get a broad understanding
of what's happening in the different styles out there. I think that that's the best thing that you could do to increase your knowledge because there are limits to everyone's experiences. And the only way that you can broaden your knowledge is to step outside those circles, talk to people that, you know, if you're a more growth investor, I feel like you could always benefit from talking to a more value-based investor and vice versa because there are
There are benefits in the exchange of ideas and experiences. Bill suggested that all investors be they new or seasoned, turn to and learn from the greats, in particular. I think Warren Buffett got to use the most obvious answer, but still the best one. You know, so much of his writing is available in the letters to shareholders for free. You can read the books about him. You can read, you know, what he's written. You can read his
article from Fortune in 1999, which is still I think one of the most important things ever written.
about investing and I think that anybody who hasn't read a lot of Warren Buffett or has read none, has got a lot of treats in front of them if they just go to the Berkshire Hathaway website and read some of his old letters. Ricky had a book recommendation of his own with some actionable advice to back it up.
I like the book One Up on Wall Street. I think for those getting started, index funds are healthy. Those are the vegetables of being an investor. They're a great thing. The standard in PORS 500, the biggest and best 500 companies in America is one of the greatest wealth-generating machines ever built. Participate in that. It's okay to own an index fund, and it's okay to get market returns. That's a great thing. It's incredibly difficult to beat those anyway. So I would say, start small.
Remember that you want to be diversified into 25 to 30 stocks, and it's okay to buy index funds. In case it's not already clear enough, we got a lot of fools who love to read. But at some point, to get started, you just got to act. I think this will be relevant to investors today that are getting started, that maybe have friends telling them, look at how wonderful my portfolio has been acting. You don't have to look far on X or Reddit to find people that have been making gobs and gobs of money in the market.
What I would say is to be a dollar cost average or remember that this is a lifelong gain. First, think about the amount of money you want to put into the market every month. And I think because, you know, usually it's technically financially like the financial advice is that you should just put all of your money in at once. But for me, psychologically, it's a little bit easier to basically have a set amount of money that you're putting into the market no matter what.
And then that, I think, is a good mindset advice to get you ready and through the next bear market ahead. It's easy to think that getting a business degree would make you a more number savvy investor. But for David, who was an engineer before becoming an analyst, business school underscored the importance of figuring out a company's story, something you can't learn from looking at numbers alone.
I had a little business training as well from getting my MBA from 2000 to 2002. And that really took, let's call me, I was a very numbers oriented investor, but that really opened up the,
how my philosophy changed over time, where it's the qualitative things that actually I think are more important than the numbers. You got to figure out the story. You got to figure out what's going on with a business, what's going on in its marketplace, what's going on from a competitive standpoint, and then see if the numbers
either refute or confirm the story that's being told. Anybody can, there's like computers, right, can analyze the numbers. So that wasn't where I was going to get an advantage. It was actually on the quality, you know, quality metrics, like, is this a good management team? Do they have an advantage? And then looking and seeing if the numbers, yes, the numbers confirm that this looks like it could be a good investment or no, the numbers don't confirm that story. I'm not, you know, I'm going to stay away from that.
I also wanted to hear from fools, have they made any mistakes as an investor that other people might be able to learn from?
Yeah, I sold Meta too soon. So this was back in 2022 when a lot of people were down and out about a lot of technology stocks and you saw their valuations go down, you saw prices get cut and Meta at the time had a story, which was that we're really in on the Metaverse now and a lot of investors were focused on that. And in my view, they kind of forgot that, hey, this company owns a lot of the internet and they have billions of people on there every day. And I think there's
There's a lot of value there. Maybe this shouldn't be trading at like a valuation that's close to a market multiple. What ends up happening is I was right. Thankfully, this was a good idea and the stock starts going up, but then I got an itchy trigger finger and I was like, okay,
I've seen it go down. Now I'm back. Now I'm back to even I want to make my money back. I'm good. And then what ended up happening, Mary, is I missed out on some of the wonderful gains that were ahead for meta because I was impatient because I did not follow in that moment, the three to five year investing philosophy of the full
And that ended up losing me money because I sold too soon. And that's what we often find is that when you act like a trader, that's when you lose money. That's when you lose to the Wall Street folks. But when you're able to be patient, when you're able to be a real investor, that's when you see those. That's how you're able to hopefully use the stock market to build financial independence and maybe even generational wealth. Sometimes the hype around a company is well deserved. But sometimes, as David points out,
It's not. So as a person who's associated with technology, you're always looking for new things, you know, oh my goodness, that is so cool. So there's a company called InvenSense. And what they did was they made these little chips that basically detect motion and turn it into something useful. So they made chips that went into smart devices. They got a contract of pretty
in front of a call correctly, they got a contract with Apple to put their chips in the Apple Watch. So these are small, you know, these are small little chips. And I was like, man, like, as soon as this catches on, right, they're going to sell, and the stock was doing well at the time. It was like, this is now catching on. And like the possibilities are infinite, right? And there was this one person, and I distinctly remember this, there was one person on the, on our message boards at the time.
Um, who kept saying, you know, there's a lot of competition out there. And, and he was right. There's SD micro electronics. There were a number of other private firms. It's like this, you know, the, the, the value is going to get competed away. And I'm like, no, no, no, like it's all working together, right? They got a good management team. They got the contracts, markets expanding.
And I just basically, if you buy into the hype too much, sometimes you can get blinded by that. And I miss the fact that the competitive advantage of this company was eroding away because of the competition. So if there was one lesson and my strategic, my strategy professor at Wake Forest, you should just drill this into our heads all the time.
Competition is relentless. It never stops. If there are returns out there or there's opportunity out there, it is very rare that one person or one firm is going to capture all that opportunity. So you always have to be aware of the competition, which is why competitive advantage from that point forward really, really became the staple of my research process.
In investing and life, the only constant is the unknown. Those unknowns become a bit easier to navigate though when you're clear on why you are or aren't doing something. The biggest action that I took was joining a community and asking people with more experience than me if they would be my mentors. That's the single biggest thing. And I learned about things like journaling, slowing down my thinking,
and that sort of thing. And in terms of my own investing, I think every day I learned something different about myself. I think what's interesting is the emotional aspect that goes on kind of behind the scenes with
with investing and I think journaling can help you work through that. One example from myself was I sold Netflix shares several years ago to be able to pay off one of my student loans from grad school and I knew I was going to do that but I realized when I did I had some emotions surrounding that that I
I wish I could have sold the shares and kept the shares at the same time. And so I worked through the idea of journaling and understanding that if you have a purpose for the sale of a company, if you have an end goal to really embrace that and to be okay with that. And so that takes some time, though.
To close us out, I asked my motley gang of fools, what advice do you have for newer investors who are just starting out? Well, if they're new and young, then hope for cheaper stock prices. Welcome a bear market because you're putting money into the market today that you aren't going to use. I'm setting this up as
You're going to retire 40 years later, if you're young in your 20s and retire in your 60s. So you should really want to be able to buy more for your money and let it grow for 40 years than to buy less. Hoping for ever increasing stock prices throughout your investing career
is it would be, I guess, nice at some level, but it's those periods of stocks being on sale when you can make far more than when they're at the very new highs of
today, not quite today exactly, but a week or two ago. So welcome cheaper stock prices and get a Roth IRA. If you don't have a Roth IRA, get one. That's the way you want to save money for 40 years. And what about a newer investor who's a little bit older? And is maybe thinking, well, I feel really late to the game. I don't even know where to begin. Any advice for somebody who maybe fits in that category?
diversification. Don't look at the things that have gone up the most in the most recent past and expect that that is a good roadmap for what's going to happen if you join in today. Because the things which have done best may continue to do very well. But I wouldn't put all my eggs in that basket. The stock market right now is
kind of similar in its valuation to sort of 2000, late 1999, 2000, 2001 by plenty of metrics. And what followed after that was not good returns for investors over the next several years. Now, if you stayed invested throughout, you've done fine, even if you got started in 2000. But if you were just getting started at market highs and saw what happened,
and you were completely in in one part of the stock market, then you didn't enjoy the experience. So if you're older and new to the market, don't just go for what's gone up the most in the recent past. How to diversify beyond what's gone up in the recent past? Here's an idea from David. Look around you.
assuming that you're a net saver, constantly be making investments. And here's what I mean. So my personality is such that I tend to bet big, if you will. I tend to make larger investments and fewer of them based on the research that I do. That has worked out well for me, but it can be a little volatile. But I've also missed out on a lot of things because I'm like,
Oh, well, I don't really have any capital right now. I don't want to sell this. Constantly, if you see something that's interesting, make a little investment. The story that I would give there is Lulu Lemon. If there's one, my biggest error of omission, meaning I didn't make this decision, was not investing in Lulu Lemon. I have a wife, I have a daughter,
I have half a house full of Lululemon products that these women absolutely love. And I saw it every day, right? I saw new things come every day. And I was just like, you know, I don't want to sell this or I don't want to do this. No, I should have just put a little bit of money.
in each one of the things that I came across because you never know. And putting a little bit of money at risk never puts your whole financial picture at risk. You know, that's the math, just like you're not going to
You should take risk, but basically make sure it doesn't kill us, right? And so if there's one thing, if you love investing and you love learning about companies, there are so many great companies out there. Don't be afraid to put a little bit of money when you get an idea. I definitely regret not having invested in Lulu Lemon a long time ago.
And those ideas can come from your regular life. They don't have to be some niche thing. No, you're totally spot on there. They come from anywhere. At the full, we're in this whole investing thing for the long haul. We recommend having a holding period of five to 10 years. It can be hard to stick to that when a stock sinks, but it can also be hard to stick to that when a stock sores.
What I would encourage everyone to do listening, especially if you're a newer investor, even if you've been investing for a while, if you buy a stock right down why you're doing it and think about the length of time you're expecting out of this, right? What is the purpose of buying this company? And for me, Rocket Lab is one of those companies that
I was buying it earlier in 2024, but really, this is one of those stocks that I plan on holding for a really long time because it's a whole other show, Mary, but I'm optimistic about the future of space and how it can help life on Earth. I remember we met some folks who have talked about it with us. Go check out the interview with Tom Weiss of Sierra Space.
But I think being able to return to a thesis, something you wrote down, the act of putting something in writing has made it a little bit easier for me to see those wonderful gains and not be tempted to say, you know what? I want to sell now and take those gains because when you have to buy and sell a stock, remember, you have to be right twice, which is a lot more difficult than being right once.
There are a lot of voices out there that are quick to tell you you're behind schedule or that you're not doing enough. Don't listen to them. You're right on time. If you want to start doing something, what matters is that you start and then that you keep trying. You can always start slow. You can build your community. You can read everything that you want. You could start within your circle of competence, which is a word buffetism, by the way. So we all have
experience and knowledge based on our own lives. So you are an expert in a particular field, right? So that could be a good place to start in terms of finding companies that you're interested in that would allow you to stay invested in the long term because you truly understand
those places. I think that could be a good place to start. Again, I think community is really important and being able to talk to other people who are investors who have maybe been doing it longer than you and then some that are in the same space as you to be able to learn and grow from each other.
If you're new to the world of investing, first off, welcome. We're glad you're here and we hope that you'll keep listening to Motleyful Money so that we may play even just a small part in your investing journey. You might also want to check out our flagship investing service, Stock Advisor.
As a stock advisor member, you'll get two new stock picks each month, rankings of a whole scorecard of companies, and access to all episodes, not just of Motleyful Money, but also of our premium podcast, Stock Advisor Roundtable. You can become a member of Stock Advisor or learn more about the service by going to www.fool.com. There will be a link in the show notes.
Also, if you're a returning listener, quick heads up, that at least for the rest of January, we're only going to be posting one weekend show. This is going to allow us to go deeper on important topics, bring you more content from analysts like we did today, and to bring the show to even more places than you can typically find it. Stay tuned for more on that front fools.
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 or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and are not approved by advertisers. The Motley Fool only picks products that it would personally recommend to friends like you. I'm Mary Long. Thanks for listening. Happy New Year Fools. We'll see you on Monday.
