#63 - The Fool: David Gardner explains his philosophy of buying stocks at high valuations after they have gone up a lot

Stephen Clapham (0:01)

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My guest in this episode is David Gardner, founder of the Motley Fool and author of Rule Breaker Investing, destined to be a classic investing book. Gardner practices the art of VC investing but in public markets, and has outperformed consistently over a 30-year career, helped by not one but two 1000 baggers. His cost basis for both Amazon and Nvidia is just 16 cents. We talk about the book, about why he likes to buy stocks after they've gone up, why he gets even more enthusiastic when critics tell him a stock is grossly overvalued, why picking the top dog and first mover in an important emerging industry is his number one stock tip, and how he assesses exceptional management. Gardner admits it's not easy, but thinks that any interested investor can outperform the market if they direct their efforts in the right area. We joked around in this conversation, and it sounds less serious in some of the other episodes, but I can promise you it's as rich in content as any. You'll enjoy our conversation.

So David Gardner, welcome to the podcast. I normally start these conversations by asking, did you always want to be an investor? I want you to answer that, but I also would love to hear why you and your brother started The Motley Fool 30-odd years ago, what you hope to achieve. I'm guessing you wouldn't have dreamt of the success that you have achieved.

David Gardner (3:57)

Well, you're right. Even if we'd had almost no success at all, it still would have been more than we were expecting when we started to print newsletter. The only people who would pay us $48 a year back in 1993 were our parents' friends who felt sorry for us. And so we started, but it was called The Motley Fool. $48 is a lot of money then. Well, you're right. It went a little bit further back then.

Pulled the name from Shakespeare, scene seven of As You Like It, A Fool, a Fool, I See a Fool of the Forest, a Motley Fool. It's probably the greatest scene of all Shakespeare. Oh, come on. Celebrating the fools. Celebrating the fools. All right. Okay, I'll give you that. But I might even go the greatest scene in all of Shakespeare, for me. Oh, really?

Stephen Clapham (4:36)

But you were an English major.

David Gardner (4:38)

Yeah, but it's a beautiful scene. Invest me in my motley, give me leave to speak my mind that I may through and through cleanse the foul body of the infected world.

Lots of great lines from Jakey's The Seven Ages of Man. If you know, that's all in that same beautiful scene.