Here’s what I’ve learned after 1 week as an intern at The Motley Fool 1) Pessimists sound smart. Optimists make more money. 2) Winners win 3) Can’t borrow conviction Thread⬇️
1) TMF is full of optimistic people. Both in life & investing. As someone who’s often critical of businesses and fairly stringent on valuation, this has been a difficult mental barrier to overcome.
1) But the more I examine their performance over extended periods of time the more obvious that mantra becomes. Behind every successful company you’ll find optimistic investors. Can’t imagine many people invested in $NFLX $AMZN $FB $MA $GOOGL etc, bc they were “value plays”.
2) When I heard @DavidGFool adds to his winners, I thought it was so counterintuitive. But he was right, winners win. Think about it at an operational level... Success compounds. And a richer valuation can actually boost operations within a company.
2) It reminds me of a @SuperMugatu quote. “Higher valuation gives you more flexibility to do more things. Gives you more prestige to hire better people. Acquiring customers becomes cheaper because people know who you are.”
2) Put simply, a richer valuation just makes things easier. We are witnessing it with $SHOP right now. If a business wants to shift online (Walmart), they know who they’re going to turn to before even examining their options. A lot of that comes from prestige
2) When hiring, people want to work at prestigious places. What usually begets prestige? Valuation. Beyond just better employees, at a higher valuation SBC becomes less dilutive. So there’s a material impact as well. @investing_city explains it well...
investingcity.org/post/stock-bas…
3) Can’t borrow conviction. @Matt_Cochrane7 taught me this one, but TMF has done a great job demonstrating it. If you’re going to be successful investing in individual businesses you’ve gotta do the work.
3) Whether your stock is a winner or a loser, it’s a lesson. And the only way the knowledge from that lesson is going to compound is if you understand why the result occurred. The best way to do that is by having a deep understanding of the business you own.
@CCM_Ryan @UnrollThread
@kunalnavani Sup! @kunalnavani, Here's that story by @CCM_Ryan you wanted:
unrollthread.com/t/127288722701…
@UnrollThread @kunalnavani Wow this is really cool
