Podcast Summary
Global Investing: Investing globally expands your reach to approximately 98% of the total companies available, providing significant opportunities beyond US stock markets.
Having a global perspective in investing can provide significant opportunities that go beyond the US stock markets. With approximately 250,000 companies internationally compared to 4,000 in the US, investing globally expands your reach to around 98% of the total names available. Bill Mann, Motley Fool's director of small cap research and lead advisor for their global partner service, shares his journey from being fascinated with stocks as a child to becoming an investment analyst. His curiosity led him to invest early in Chipotle and travel to 115 countries. Bill's interest in understanding the mechanics of companies began when he worked in the electric utility industry in Japan and encountered similar business plans to his telecom partner's. Despite working in the exciting telecom industry during the 1990s, Bill found himself more interested in the regulatory aspects of the business plans than the provision of telecommunications. This early experience ignited his passion for investment analysis and the importance of considering opportunities beyond US markets.
International background, travel: Tom's international background and travel experiences have given him a unique perspective in international investing, shaping his investment decisions and fueling his fascination with the international stock market.
International travel and experience have significantly shaped Tom's perspective as an investor. Tom's journey began when he was unexpectedly discovered by The Motley Fool while posting on their message boards during a work trip to Pakistan. Despite initial reservations, Tom joined the company, which was surprisingly located near his residence in Alexandria, Virginia. Tom's international background, which includes growing up in an itinerant family and traveling extensively during his youth, gave him a unique edge in international investing. His deep interest in global affairs and cultures has informed his investment decisions and fueled his fascination with the international stock market. Today, Tom runs The Motley Fool's global partner service, allowing him to continue leveraging his international experience to help guide investors.
World Understanding: Expanding your frame of reference through travel and reading can lead to a larger pool of investment opportunities and a competitive edge in the industry.
Having a broad understanding of the world, gained through experiences like travel and reading, can provide a significant advantage for investors. By expanding your frame of reference and developing expertise in markets and languages outside of the United States, you can access a larger pool of investment opportunities and gain a competitive edge. Additionally, having a natural curiosity and a willingness to learn are essential qualities for individual investors, even if you don't have a formal accounting or business background. The early days of starting a career in investing may be challenging, but a strong foundation of curiosity and a commitment to learning can help you succeed.
Accounting and Business Concepts: Curiosity and a strong foundation in accounting and business concepts can lead to undervalued investment opportunities, but it's important to trust your instincts and ask 'does this make sense?' even with a deep understanding of a company's business model
Having a strong foundation in accounting and business concepts, coupled with curiosity, can lead to significant investment opportunities. The speaker, an early employee at The Motley Fool, shares how his lack of accounting knowledge initially held him back, but his curiosity and thirst for learning eventually led him to discover undervalued investments. He provides the example of recommending Chipotle's B shares, which were undervalued due to their lower voting power, despite being essentially the same as the A shares. Conversely, he also shares a mistake he made early on in his career when he overlooked red flags with a company called ACLN, which was a fraud. This experience taught him the importance of trusting his instincts and asking the question "does this make sense?" even when he had a deep understanding of the company's business model.
Under-researched areas: Success in investing can be found by looking beyond the surface and having a long-term perspective in under-researched areas, as described by Gene Munster's approach of 'turning over rocks' and investing in niche industries through a roll-up company like Constellation Software.
Successful investing often involves looking beyond the surface and having a long-term perspective, especially in areas where fewer people are looking. Gene Munster, a long-time investor and podcast guest, shared his philosophy of keeping an open mind and looking for opportunities in under-researched areas. He described his approach as "turning over rocks," believing that the market may not be 100% efficient and that larger companies, while more scrutinized, may still offer opportunities for growth. Munster also highlighted the success of Constellation Software, a roll-up company that focuses on acquiring and integrating smaller businesses in niche industries. By investing in these types of companies and taking a long-term view, Munster has found success in the market. Overall, the key takeaway is that curiosity, a long-term perspective, and a focus on under-researched areas can lead to successful investing.