Some companies beat the market; some companies get in trouble with the law. So it’s important for us to come back every year and check the score for our five-stock samplers — warts and all.
To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
This video was recorded on Sept. 14, 2022.
David Gardner: Thirty separate times, about every 10 weeks on this podcast over six years, I picked five stocks. I chose a theme that made sense to me at the time. Sometimes sublime, sometimes silly. Then I thought to myself, what are the five best recommendations that I can come up with for stocks that fit that theme. Aiming, of course, always to beat the market, the S&P 500. Otherwise, hey, why are we bothering? Then one year later we reviewed the picks and then another year passes the two-year review. Two years later, we never forget. We hope you wouldn’t also. We score everything transparently and accountably because we’re Fools, you should expect that of us. Then the three-year review, which is going to be the most telling. Why is that? Well, first of all, three years have passed since I picked those five stocks, we really can be smarter about what’s happened and why, and what we can learn after three full years. That’s the smarter part.
But if I’ve done my job well, then we’ll also be happier and richer as well. Now that three-year review is also telling because most of the time we end the game right there, we’re going to keep holding those stocks in real life, mind you and you should too, if you own them. But if I kept reviewing all 30 of my samplers in years 4, 5, and 6, etc. We wouldn’t have time to do much else on this podcast. Well, 30 separate times I’ve picked five stocks, what I’ve also called my five-stock samplers. We’re going to review two of those samplers this week. Five stocks with a tailwind blow, and five stocks indistinguishable from magic. Review them we will with my two analysts, guest stars Sanmeet Deo and Rick Munarriz. Just how badly has the market treated me? We’ll find out only on this week’s Rule Breaker Investing.
Welcome back to Rule Breaker Investing. Thanks for joining us. Thank you for suffering Fools gladly. I hope that you’re always reminded as you hear that glass break once again, that that is the sound of rules being broken and that’s why this is Rule Breaker Investing, a Motley Fool podcast. The purpose of The Motley Fool is to make the world smarter, happier, and richer. I love our purpose statement. Every one of our 625 employees and more than that contractors tries to deliver that to you every day. It turns out we can’t always guarantee the last of those, the richer part. This market year has been a reminder that one year in every three, on average historically, the market loses value. We’ll just try to make you smarter, happier, and richer on this podcast in any given week. But for any market year that richer part, no guarantee. Last week I had my personal pleasure. It is a very personal, arguably self-indulgent pleasure of being able to air out my most recent list of pet peeves. I want to call out in particular the first two that I did because I’ve gotten some enjoyable Twitter feedback there. Some of you have said that you’ll never say last, but not least again, or at least if you say it or hear it, you’ll be reminded perhaps of my brief diatribe on last week’s podcast.
Then thank you, Desmond Walker @deedubya78 on Twitter or the gaps widening or narrowing @DavidGFool, this episode was dope. Thank you very much, Desmond and may your gaps always be narrowing. Because let’s face it, friends, even if gaps widen more than they narrow, I can’t imagine that ever happening. More than about a 2-1 ratio. That doesn’t make much sense to me. Thinking about headlines referring to widening gaps at a level of 16-1, those that narrow, well, Desmond, I got you. We got each other. Rarely do I mentioned this, but it’s worth pointing out from time to time if you haven’t already, I hope you’ll subscribe to Rule Breaker Investing this podcast on iTunes or Spotify or Google Play or wherever you find your podcasts. You can follow us on Twitter at @RBIPodcast. You can follow me on Twitter if you like, I’m @DavidGFool. Finally, I hope you’ll give us a review on whichever site you download podcasts from, throw me some stars, let us know how we’re doing. I read every comment. This is a Reviewapalooza episode, one of our longest running episodic series. It’s a pleasure to review in good times and bad stock picks that we’ve made years ago. I think it’s a unique aspect of the Motley Fool that as an online site. Now, entering our fourth decade, we started as a keyword on AOL.
I think it’s appropriate that we continue to be accountable and to remind you and learn together how things have done based on what we said. On this podcast for years, I said, these five stocks, I think whatever the theme is, these five stocks I hope, will beat the market. We’ve done a good job checking back one, two and three years later ever since. I always get the help of talented analysts around the Motley Fool, we’ve never had a shortage of them. I’m looking forward to being joined by Sanmeet Deo and Rick Munarriz a little bit later, but first before we start with the first of those two samplers to reflect on, and the first one we’re going to be doing is five stocks indistinguishable from magic, I want to restate why we do this. Why did we do these Reviewapalooza podcasts? I guess I have three things that come to mind as I answer that question. The first is, it’s important to review stuff. I think that’s true in life. It’s often we don’t give enough time to reflecting on whatever is just happened good or bad. Sometimes we rush to the next thing, but we would’ve been smarter as we rushed to that next thing, maybe we wouldn’t have rushed to that next thing if we’d first reflected for a little bit about why whatever just happened again for good and for ill.
I do think it’s important to review stuff and I’m speaking to myself as much as you today because I need to keep reminding myself of that as well. To review. Review is good and especially when we think about the financial markets, review is rare. I often say, it’s up to you and me to review why stocks have done what they’ve done because TV sure won’t. How many people go onto CNBC or are quoted in the Wall Street Journal saying this or that about a stock or the market overall. At least in my experience, CNBC and even the Wall Street Journal rarely go back and let you know later on whether that person was right or wrong. In fact, in many cases, they’re rushing to the next minute of programming to have that person back on to generate more. I always use this wording, “content.” Yet we don’t really know whether the person speaking right now, making their prediction is right. More than half the time, let’s say is worth listening to. Now, certainly good media vehicles. I do think that CNBC and the Wall Street Journal do a lot of good.
Typically will try to have good people on in the first place. But boy, is there a missing scorecard in the sky that’s never really keeping track as we do for sports. That’s never really keeping track of all of those prognostications made in financial media. So it’s important to review stuff TV sure won’t. One of the many reasons I love the Internet is because the Internet does have a memory. When something is said in a podcast, you can go back and listen to it. When a stock is picked at fool.com, you can come right to our scorecard and see how it’s done. Whether we’re talking about 12 months later or 12 years later, it’s important to review stuff. Reason number 2, why we do this. If you don’t score, you don’t learn. There’s an old business saw, and I can see both sides of this. There are really two schools, the ones that agree with this and the ones that don’t. I can easily join either one contextually, it makes sense to be in one group or the other at different points. Here’s the line. If you can’t measure it, you can’t manage it. A lot of wonderful leaders have had successful careers in business and in-life making sure that we’re measuring the things that we want to manage, feeling as if they can’t manage it effectively unless it’s being measured. Now, on the other hand, it’s also true that many of the most important things in life are not that measurable.
The notion that if you can’t measure it, you can’t manage it. If you’re not able to put a measure on things well, those are things like love or how you treated your kids yesterday, or how well a company’s culture influences its ability to innovate. A lot of things can’t really be measured that effectively, we struggle for better measures and the struggle is real and I think it’s great to find new measures. I love proxy measures are creative ways of measuring things. But it’s also certainly true out the other side of my mouth that it’s very hard to measure many of the most important things. But one thing is for sure if you’re not scoring, especially with investing, I don’t think you’re learning. That’s in part why we do what we do. Then the third reason why we do this is I think it’s really helpful to listeners. I hope to hear me screw up, for me to lose, for me to fail and talk about it on this podcast or as I did at FoolFest a couple of weeks ago. I think I’ve already delivered this line on my podcast as well, but I’ll say it once again. It was in some ways a perverse but important pleasure for me to stand in front of a room of a few 100 people and say, whoever’s down, however much you’re down, I’m down more.
I think that’s very important for me to be able to say and for a lot of people to hear because I think the assumption is that people who are in the professional world, professional stock-pickers, advisors, analysts, they…