365 Days a Foolish Investor

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After a year at the Fool, Rana Pritanjali – a recent graduate of our Analyst Development Program – reflects on her experience. Her takeaways speak not only to Foolish investing principles, but also our workplace culture. Keeping an open mind is perhaps the best way to adapt to a new role – and learn how to be Foolish.

“How I Became Foolish in One Year”
Rana Pritanjali

One year ago …

It’s my first day in the Fool’s Analyst Development Program, and I’m taking in my HQ surroundings. I notice placards hanging from the ceiling — big signs with the names and logos of the Fool’s best-performing recommendations. I am surprised by the companies; hardly any of them seem like the right picks from a conventional point of view. To top it off, Facebook (NASDAQ: FB) is among The Motley Fool’s highest-conviction stocks. As a value-focused investor, it’s a surprising day. I head home and tell my husband: “I simply don’t get it. Seriously, Facebook?”

One month ago …

I find myself explaining to my husband how advertisers can use Facebook’s platform to connect with their audience. How the anticipated double-digit growth in advertising revenue comes from changing consumer trends and Facebook’s seamless transition to mobile advertising. How the huge opportunity to connect with the world gives Facebook the potential to emerge as a big winner.

In the past year, my career followed a great but steep learning curve. I might be a bit biased, but I think the Fool’s Analyst Development Program is most beneficial to investors who come in with a serious value bent. It challenges your thinking by showing you a completely different way of investing — one that’s even backed up with an amazing track record.

I still support my investment theses with valuation, but I’ve learned to apply other qualitative frameworks, too. Here are lessons that have improved my analysis and made me a better investor:

Management matters: Like many investors, I used to think that the quality of a company’s management team is baked into the stock price, so I never cared much about the leaders running the ship. But I was completely wrong.

At the Fool, leadership plays a key role in evaluating a company. After going through many case studies in my classes, I realized that having excellent management gives a company (and its shareholders) huge optionality and that the chances of a good business evolving into a great one are way higher when leadership is strong. On the flip side, bad management can screw up a great business. So here are two things I’ve learned to never ignore: Who is running the show, and how is he incentivized?

A good work culture translates into high productivity: Similarly, I never understood the importance of work culture until I started working at Fool HQ. Working with the right set of people in an employee-friendly environment keeps your morale high, accelerates your learning curve, encourages you to give your best, and motivates you to get better every day. Because a company is made up of employees, if each employee shares in the positivism, the overall productivity and performance of the business will probably improve.

A flexible mind-set goes a long way: Having a curious and flexible outlook goes a long way. Valuation is still an important part of business analysis for me, but giving equal weight to more qualitative components helps me understand the whole story. What’s more, working on the edge of your circle of competence is good for slowly but steadily widening your circle. You can always decide what works and what doesn’t for you — and at least you’ll be making an educated decision.

Learning how to merge valuation analysis with these more qualitative approaches takes time, but in my opinion, it’s worth it. You get the best of both worlds.

Here’s to many more years of learning!

Foolishly,
Rana (TMFBuild)
*Originally published July 8, 2015 on TMF’s Inside Value members-only website.

Learn more from Rana and other Fools in our most recent ADP cohort:

CEO Tom Gardner on “Entertaining Investing”

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Consuelo Mack of WEALTHTRACK says there’s an “ageless appeal” about The Motley Fool, and she recently sat down with our CEO Tom Gardner to dive into long-term investing topics. Tom shares a childhood story about what sprung his interest in the game of investing, as well as information on our products’ philosophies. Check out more of what Tom has to say in the video below!

 

 

 

Women Investing Foolishly: Spend part of your winter break at FoolHQ!

Warren Buffett Invests Like a Girl

If you’re a college student looking for an investment lesson from a woman who is buddies with Warren Buffett, The Motley Fool has an opportunity for you.

You might not know it from watching CNBC, but women are better investors than men. It’s true — we’re wired for it. LouAnn Lofton knows that, and so does Warren Buffett — LouAnn is the author of Warren Buffett Invests Like a Girl, and Buffett is the master investor who inspired her on that very book.

What’s the secret? As Forbes puts it, “like Buffett, women are more likely to have a calm temperament, a longer-term outlook, do more research, trade less and remain steady under pressure.” (Forbes also notes, “What does Buffett think about the claim? ‘I plead guilty,‘ he said.”)

The Motley Fool wants to find the next Buffett … and we’ve learned that too few women get started in a career in investing.

That’s why we’re paying all expenses for five young women who think they’re Foolish enough to invest “like a girl” and against the crowd. Our “Women Investing Foolishly” program January 6-8 at Motley Fool headquarters in Alexandria, Va., will feature classes taught by members of our top-rated investment analysis team; a lunch hosted by LouAnn Lofton; and (we repeat) all travel expenses paid.   

Apply here to tell us why you want to be there!

“Foolish Woman (Invest Like a Girl)”

To the tune of “Redneck Woman” by Gretchen

Wilson

Well, I ain’t never

Been the Wall Street-er type

No, I can’t pay full-service fees.

I’d rather invest myself

In a small cap

Or in an ETF

Or in a Roth 401(k).

I’ve got posters on my wall

Of Bogle, Graham, and Price.

Some people may question me

But take it to the bank…

I’ll beat the market with The Motley Fool in its Investing Workshop.

[Chorus]

‘Cause I’m a Foolish woman.

I don’t trade reck-less-ly.

If I just invest like a girl, I’ll…

Say “Buy now” and “Spiffy pop!”

And I’ll keep my funds invested

Through vol’tility all year lo

ng

‘Cause I’ll know all the ways for multiplying my money.

So here’s to all my sisters out there staying rational,

Let me get a big “Fool yeah” from the Foolish girls like me. Fool yeah!

Fancy, private hedge funds…

Well, their stuff seems nice

But I can get better returns

And help my family (yes, my family)In a discount broker account

When they ask at Thanksgiving.

No, I don’t need no Buffett brain to reach finance safety.

It might seem esoteric,

A little too hardcore,

But in my neck of the woods

I’m better than ol’ “Warr!”

 

 

Check Us Out in the Wall Street Journal!

Wall Street Journal

Wall Street JournalWhile we love seeing press about our lack of a vacation policy, encouragement of office fun, and all the other unique things about our workplace, Fools were abuzz this weekend about being recognized by the Wall Street Journal about one thing we hold near and dear: Our Purpose, which is to Help the World Invest Better.

There’s a lot of investing advice out there that advocates doing whatever you can to make a quick buck. But for 20 years, The Fool has taught our members a different investing method – a method that calls for a calm, measured approach to choosing great companies and investing in them for the long term. Recently, three of our subscription newsletters were ranked in the top three of Hulbert Financial Digest’s list of investment-advisory services, and the WSJ wrote about their take on our buy-and-hold strategy.

Because a long time frame works to your advantage when it comes to the stock market, it’s never too early to introduce investing concepts to the next generation. The Fool’s Jason Moser is featured in a different article, offering ways to help even younger children get excited about investing.

We believe that discipline and a long-term view makes investing more meaningful, more fun, and in the end, much more successful!