Few investment and financial advisors have a wider reach than Tom Gardner. As CEO of The Motley Fool, his words and influence reach more than 5 million people. He has also written and co-authored several books, including You Have More Than You Think, Rule Breakers, Rule Makers, and The Motley Fool Investment Guide. He often writes with his brother, David, who helped found The Motley Fool.
Tom Gardner uses Twitter frequently to share news and opinions. The following 10 tweets stand out as some of his most provocative, poignant quotes.
ONE WAY TO WIN
Buy 25+ stocks
Focus on smaller caps
Focus on growth
Hold them 5+ years
Add savings often
Expect some losers
And some big winners
Invest this way for life
— Tom Gardner (@TomGardnerFool) July 13, 2021
Tom Gardner frequently emphasizes the importance of long-term investing and savings. He also maintains a realistic mindset that expects some investments to fail.
A diverse portfolio of stocks, however, makes it possible for the gains to offset the losses. Instead of thinking about how you can make money quickly, choose investments based on how you expect them to perform over the next five years or longer.
Every 4-5 years, the stock market drops 20%.
When that happens, growth stocks routinely fall 30-40%.
The worst portfolios aren’t structured to handle that.
The best ones are.
— Tom Gardner (@TomGardnerFool) July 6, 2021
It’s very difficult to predict how individual stocks will perform. The market, however, goes through fairly predictable cycles.
Investors should expect markets to slip about twice per decade. That doesn’t mean they should expect to lose money every five years.
It means you need to balance growth stocks with reliable performers. If you put too much money in growth stocks, you will probably lose when the market dips.
Back by popular demand!
Problems w/ active trading:
– market-losing for most
– money-losing for many
– distracts from business focus
– spurs institutional manipulation
– prevents compounding
Investing builds businesses, markets, wealth.
Systems should discourage trading.
— Tom Gardner (@TomGardnerFool) February 23, 2021
Choose stocks carefully and hold them for long-term growth. Active trading will almost always betray you.
Make a choice and stick with it. If you feel tempted to buy and sell often, you’re not taking advantage of the market’s top benefits and you’re contributing to instability.
The simplest way to upgrade your investment returns is to double your average holding period.
— Tom Gardner (@TomGardnerFool) February 7, 2021
Tom Gardner cuts through all of the noise and delivers straightforward advice that works. Getting more from your investments doesn’t require more activity.
It requires less. Double your holding period and stick with a company as its value goes up and down.
As long as you made an informed choice, there is a good chance that holding the stock longer will lead to a larger return.
The business aim of an insurance company is to get clients to pay for nothing.
— Tom Gardner (@TomGardnerFool) April 22, 2018
Some people may find this tweet controversial. Still, it reveals a truth about how some insurance companies operate. Insurance companies can obviously maximize their profits by denying claims. Ideally, they want to pay out as little as possible while collecting premiums from as many people as possible.
Insurance companies must walk a fine line, though. If they routinely fail to meet the needs of clients, they will develop negative reputations. Assuming that other companies compete for clients, they will lose business to more responsible insurance companies that want to serve their policyholders.
Unfortunately, not all insurance companies work in areas with robust competition. This typically applies to health insurance companies that operate in specific geographic locations. Without enough competitors, insurance companies can use uncertainty to earn money without paying out as often as they should.
That truth does not make insurance any less necessary.
I believe far more in the Entrepreneur than the Stock Analyst.
— Tom Gardner (@TomGardnerFool) April 13, 2017
Stock analysts play an important role in helping individuals recognize investment opportunities. The fact of the matter, though, is that they make educated guesses. They have a lot of experience, so they probably know a lot more than the average investor. That doesn’t make their predictions perfect.
Does that mean you should take investment advice from entrepreneurs instead?
That’s not what Tom Gardner means here. Instead, pay attention to entrepreneurs and listen to them with skepticism. If they show the right level of insight and confidence, it’s often worth following their advice.
They probably know more about what makes a business successful than a stock analyst who has never tried to build a company from the ground up.
When you invest in a company, it's a good idea to really know who makes the decisions…and if they're committed, smart, & long-term focused
— Tom Gardner (@TomGardnerFool) December 11, 2016
This is one of the most important things Tom Gardner has posted. A company’s success doesn’t come from the amount of capital it has. Even a great product can’t ensure a company’s long-term success. What if the business never innovates again?
The people making decisions for a company matter more than just about anything. Learn about their backgrounds, including their previous successes and failures. When you invest in a company, you’re always betting on people. Know that you’re betting on someone with the experience and wisdom to make smart choices.
If a company’s led by owners not renters…
And its investors are owners not renters…
The future could be very bright.
— Tom Gardner (@TomGardnerFool) December 23, 2020
Successful companies have committed leaders and investors. Stay away from quick-money investments.
High turnover is a bad sign. You want companies that care about the long-term as much as you do.
Warren Buffett’s company is valued at $500 billion.
It employees 400,000 people.
He has been CEO for over 50 years.
And for a long time, he’s had just one item on his daily calendar.
— Tom Gardner (@TomGardnerFool) January 22, 2021
Consistency is a wonderful trait in a person and business. Warren Buffett is an incredibly reliable, consistent person. He famously has the same breakfast almost every morning on his way to his office.
Don’t dismiss the importance of reliability. You might make money by investing in a company with big ideas and a charismatic leader. Can they follow through for five years, though? How about a decade? Will the stock you buy today make it possible for you to retire?
These are the kinds of questions that help you reach your investment goals.
Avg interest rate earned in savings accounts: 0.05%
Avg interest rate paid on credit cards: 14.65%
— Tom Gardner (@TomGardnerFool) February 7, 2021
Banks serve an essential role in the economy. That doesn’t mean they have your best interest in mind, though. They exist to make money.
It’s important to note that some savings accounts offer higher interest rates than others. Similarly, some credit cards offer lower interest rates that can help you save money.
Ideally, you will choose a high-interest savings account and pay off your credit card balance before you get charged interest. If you don’t take advantage of the banking system, it will take advantage of you.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.