David Gardner: Mastering the Art of Long Term Investing

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• Podcast: The Business Brew
• Host: Bill Brewster
• Guest: David Gardner — co-founder of The Motley Fool, author of Rule Breaker Investing
• Duration: ~1 hour 30 minutes
• Listen: Apple Podcasts | YouTube

David Gardner has been investing for 41 years. His portfolio was cut in half in 2022. It recovered to new highs. His takeaway: he has been “wildly rewarded for simply being continuously invested.”

What Traditional Metrics Miss

Gardner’s core argument: the things that cause businesses to win or lose are not measurable. Leadership quality, brand strength, innovation capability, corporate culture — none appear in financial statements. That is why great companies always look overvalued.

The Reverse Indicator

Counterintuitively, stellar past price appreciation (30-90% in the 3-9 months before investing) is an excellent predictor of future returns. The market is telling you something.

The Six Habits

1. Three-year minimum — never invest for less
2. Add up, don’t double down — add to winners, not losers
3. Max 5% — no more than 5% in any initial position
4. Let winners win — no arbitrary selling points
5. Sell down to your sleep number — reduce what keeps you up at night
6. Reflect your vision — your portfolio should mirror your best view of the future

The Starbucks Story

Gardner recommended Starbucks on The View in 1998. It dropped 33% in six weeks. He held. It has since returned 34 times.

On Timing

“I try to be in ahead of most others, never first in. I’m not a VC. And then I try to be out after most everybody else.”

On AI

Gardner is optimistic. Algorithmic trading has been around for decades. Human investors with a long-term perspective can still succeed.

Crepi il lupo! 🐺