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”
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!
*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:
Last week was a big week for us here at The Motley Fool! We celebrated FoolFest, our annual member event, with over 300 Fools that traveled far and wide. In addition to breakout sessions, panel discussions, and fun meet and greet opportunities, we were also lucky to hear from some dynamic speakers.
FoolFest introduced us to the bestselling authors behind interesting ideas like the science of habit; rethinking situations that cause financial stress; and six commonalities of entrepreneurial success. So what exactly are these books and who are their authors?
1. The Power of Habit by Charles Duhigg
Charles Duhigg, award-winning New York Times reporter, explores scientific discoveries behind why habits exist and how they can be broken in The Power of Habit.To overcome habits, Duhigg says that you must understand the cues that trigger it; the routine that fulfills it; and the rewards – or feelings – that you receive from it. Duhigg explained the cycle with his own example of eating a cookie every afternoon. By learning to analyze this daily action, he realized that it wasn’t the actual chocolate chips he craved – it was the social interactions in the cafeteria. A certain time in the late afternoon was his cue and, once he understood this habit, Duhigg set out to reconstruct it. Instead of heading to the cafeteria, he now finds colleagues to chat with around his desk. With his new routine, Duhigg hasn’t had a cookie in over 6 months.
Though habits are certainly personal, businesses also use the science of habit to influence what consumers buy. They collect data based on where customers live, household incomes, marital status, and whether or not a shopper has children. Stores like Target can then predict times that will most influence these customers to use coupons or see advertisements.
Do you think you could change your habits? Duhigg argues, “The key to exercising regularly, losing weight, raising exceptional children, becoming more productive, building revolutionary companies and social movements, and achieving success is understanding how habits work.” This book offers a helpful perspective if you’re curious to reform your routine.
2. The Creator’s Code by Amy Wilkinson
It took five years for Amy Wilkinson – strategic advisor, entrepreneur, and lecturer at Stanford University – to write her first published book. In The Creator’s Code, Wilkinson shares academic research along with six essential skills that have turned small concepts into big companies. Over 200 interviews and examples from corporations including PayPal, Airbnb, Tesla Motors, and Dropbox support Wilkinson’s list of traits that lead to great entrepreneurship .
What’s Wilkinson’s bottom line? Anyone can attain entrepreneurial success but it takes hard work. One of the skills that Wilkinson focused on during her FoolFest interview was “Failing Wisely.” She’s passionate about the importance of placing small bets to test ideas and build resilience. She said to the audience, “The people who can be very comfortable about experimenting and testing through are the ones who will succeed.” Whether it’s on our marketing team or among Member Service Fools, we’re constantly testing ideas at The Motley Fool. We, too, believe in consistent testing to find big wins among little mistakes.
3. The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money by Carl Richards
Emotions are easy to relate to finance. Debt causes stress for a lot of people, as do major financial decisions like buying a home or paying college expenses. Carl Richards argues that emotion interferes with making smart financial decisions, and he defines “the behavior gap” as the phenomenon between what we should do and what we actually do.
One of the best takeaways from Richards’ presentation was the importance of timing. Should you really be talking about finances with your partner first thing when you get home from work? Probably not. Why? Because you’re tired. Make financial decisions a discussion when you’re energized and clear-minded, or else you’re not setting the situation up for the smartest results.
Have you read these picks? Let us know by tweeting @FoolCulture!
In addition to physical and mental wellness, we strive to keep Fools’ financial health on the upswing. Thanks to our Foolish Learning and Development team, Fools recently celebrated “Financial Health Day” by budgeting their workdays to learn more about our employee benefits, attend educational workshops, and participate in office hours with Foolish financial planners.
Classes on the agenda were all Fool-taught and included How to Buy a Home, Couples & Cash, Foolish Family Finances, and Estate Planning: Wills, Trusts, and Health Care Powers of Attorney – Oh, My! One of the most popular classes was Living Cheap, which was hosted by Rule Your Retirement advisor Robert Brokamp.
Here are 3 tips from this session that can help you, too, cut your expenses:
1. Monitor your spending every day. One Foolish reader wrote, “If you do this for 30 days, it can change your life. Also, that feeling of being in complete control of your finances is a real self-confidence boost.”
2. Food is one of your biggest expenses. Make a master list of what you absolutely need every week, and try not to stray from it when you’re shopping. A wise Fool told us during the class, “It’s not a value if half of it goes bad.”
3. “Use Stuff You No Longer Want to Buy Something You Covet.” Take a look around your house and make note of what you don’t use anymore. Consider selling an item on Craiglist or to a friend, then put the profit toward purchasing something you need.
It could be difficult to host a similar event at your own organization, especially if you don’t work in the finance industry. However, a few of the quick challenges that were introduced throughout our day would be easy to recreate. Tasks that were completed in exchange for raffle tickets included signing into your 401K account and confirming or adjusting the contribution; accessing your free credit score; developing a strategy to get out of debt; downloading our expense system’s app; and confirming correct personal information in our HR platform.
Learning more about your HR tools will help employees understand all of the benefits your company has to offer. Encouraging a dialogue about personal finance – whether it’s providing helpful website links or hosting a full-fledged Financial Health Day like us – will only profit your employees’ well-beings.
It took 11 years for Chris Guillebeau to complete his quest of visiting every country in the world. This staggering journey – which he viewed in the beginning as “really difficult but not fundamentally impossible,” led Chris to all 193 countries. The first 100 countries he visited – not counting layovers, by the way – cost $30,000. Though there was certainly a financial element involved, Chris prioritized his travels and reached this incredible goal by his 35th birthday.
Chris met an amazing community of people and gathered a treasure trove of stories, many of which are shared in his latest New York Times bestseller The Happiness of Pursuit. He features the quests of people like Lisa – the youngest person to circumnavigate the world by sailboat at age 16 – to a man who pursued a 17 year vow of silence. Check out what you can take from Chris – including his top pick for travel destination – in 60 seconds or less below!
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!
With our company’s name taken straight from Shakespeare, it’s no surprise that you’ll find many lovers of literature here. One of the coolest – and newest – benefits to employees is the Bookie Monster program. It allows full-time employees to order any book – fiction, non-fiction, job-related or completely irrelevant – on The Fool’s tab, as a hard copy or an e-book delivered to their own devices.
Top Fools understand the importance of each employee’s personal learning journey, and it’s true that reading is knowledge. Whether it’s a book about investing or business, or a novel, we’re encouraged to delve into all topics. Studies have shown that reading can significantly boost an individual’s vocabulary, creativity, and communication skills – among many other qualities. This awesome benefit aims to shape our employees into better and smarter leaders.
In fact, many of the world’s most successful businesspeople – both past and present – have been avid readers themselves. Tom Gardner shared a few of his favorite novels with me, including Conscious Capitalism, The Davis Dynasty, and The Outsiders, which all pertain to investing. As for other topics, Tom also recommends Influence by Robert Cialdini, The Logic of Failure by Dietrich Dorner, and Tribal Leadership by Dave Logan.
David Gardner also shared some of his favorite business reads: Enough by Jack Bogle, Predictable Success by Les McKeown, Selling the Invisible by Harry Beckwith, Tribes by Seth Godin, and The Why of Work by Dave and Wendy Ulrich.
One of The Motley Fool’s core values is Innovation, so it seems fitting that we are able to expand our education in such a unique and generous way. Through literature, we can help the world invest better while simultaneously gaining a better understanding on a wide variety of topics.
If you’re interested in diving into a new book, we have lots of great suggestions based on your level of investing experience:
One Up on Wall Street by Peter Lynch
Buffett: The Making of an American Capitalist by Roger Lowenstein
Value Investing With the Masters by Kirk Kazanjian
The Davis Dynasty by John Rothchild
Valuegrowth Investing by Glen Arnold
The 5 Keys to Value Investing by J. Dennis Jean-Jacques
Beating the Street by Peter Lynch
Investment Fables by Aswath Damodaran
The Vest Pocket Guide to Value Investing by C. Thomas Howard
Common Stocks and Uncommon Profits by Philip Fisher
Made in America by Sam Walton
Forbes’ Greatest Investing Stories by Richard Phalon
John Neff on Investing by John Neff
The Intelligent Investor by Benjamin Graham
The Money Masters by John Train
Stocks for the Long Run by Jeremy Siegel
Quality of Earnings by Thornton Oglove
Investing in Small-Cap Stocks by Christopher Graja and Elizabeth Ungar
The Book of Investing Wisdom by Peter Krass
You Can Be a Stock Market Genius by Joel Greenblatt
Break Up! by Campbell, Koch & Sadtler
Investment Gurus by Peter Tanous
Value Investing: A Balanced Approach by Martin Whitman
Value Investing: From Graham to Buffett and Beyond by Bruce Greenwald
The Road to Serfdom by F.A. Hayek
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
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.
‘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
‘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!”
Tom Gardner was interviewed by Professor R. Edward Freeman of the University of Virginia’s Darden School of Business as part of a Coursera class called “New Models of Business in Society.” Watch him talk about how The Fool aims to be different from Wall Street and disrupt financial advice, unique ways we increase employee engagement, how we created our company values and live by them, and more!
While 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!