90% Of Digital Currencies Will Be 'Worthless’: Motley Fool CEO Talks The State Of The Market
For nearly 30 years, The Motley Fool has been a trusted resource for financial and investing advice for its millions of regular readers.
According to its site, if a Motley Fool member held 25 or more stocks from the site's recommendations for at least five years, the likelihood that the portfolio would have a positive return is 97%. Time magazine has even been quoted as writing, “Even billionaires get their ideas from The Motley Fool.”
Given these accolades, it’s no surprise that Motley Fool co-founder and CEO Tom Gardner is often called on to give his take on the state of the market. This week, he stopped by the Walker Webcast to talk with Walker & Dunlop CEO Willy Walker about where he sees investment heading in 2022, why investors should think long-term and his take on the ever-growing world of cryptocurrency.
Walker kicked things off by asking Gardner about where investors are turning today and his thoughts on the current economy.
“Well, we're definitely in a tough place for growth investors, there's no question about that,” Gardner said. “This is a time where there's a flight to safety and quality and to much larger-cap companies into lower beta companies. It's hard to find a really great growth company in the public markets that have had a good six months. And that's hard because that's generally our style of investing at The Motley Fool.”
Gardner said when investors look at companies like Netflix and Amazon today, it’s hard to remember the steep declines their stocks had along the way to creating tremendous wealth for their long-term investors. At The Motley Fool, he said, his highest priority is to teach people about investing and becoming part-owners in these types of businesses.
As for the economy, Gardner said we’re in “unusual times,” particularly when it comes to inflation, and that it’s a difficult time to be an investor if you’re only focused on the short term.
“If you have a one-year goal as an investor, you're in trouble,” he said. “It's not a good methodology. But if you're keeping your five-to-10-year perspective, I think there are a lot of great companies to invest in today.”
On The Motley Fool site, Gardner lists six core tenets of investing, which include owning 25-plus stocks and holding them for five years and “let winners run.” He said that the latter point is meant to remind people that they’re investing in businesses, and businesses win over time. A business might have some setbacks three or six months after someone invests in them, but it could just be because they are gearing up to do something great in one year or even five years down the road.
Walker pointed out that Gardner has also focused on some of the “softer” company issues when it comes to investment including corporate leadership, insider ownership, customer delight and company culture. Gardner said that when it comes to these issues, one of the most important things is to look at is the CEO and determine if they have been “all-in” at the company for at least 10 years.
“I want to know, does leadership have the control or ownership stake, the voting, the support and the time horizon and commitment to create 10 years of something remarkable?” he said. “Less than 10% of public companies are going to deliver great 10-year results, and I think it's going to come down to the leadership’s commitment to all stakeholders over that period.”
Walker moved on to ask about a recent tweet of Gardner’s where he said, “Most digital assets, most cryptocurrencies, and most NFTs will expire worthless. That doesn’t mean this area won’t be rich with opportunity and discovery. But most (greater than 90%) will expire worthless.”
Gardner said that he stands by his assessment since there are somewhere between 10,000 and 20,000 forms of cryptocurrency, so even if 90% fail, hundreds could succeed. He added that the digital transformation is real, and we’re not going back to the days of taking money out of the ATM and buying things with cash. That being said, he maintained that half of the cryptocurrencies and nonfungible tokens out there could almost be defined as fraud.
“What you have is, ‘I'll create this digital image, and I'll sell it. And I'll create a limited supply,’” he said. “I mean, you're almost talking about the basic principles of a Ponzi scheme.”
He closed out by saying at The Motley Fool, they are trying to create an environment where employees can say how and where they want to work, and the company works to accommodate them, whether it’s coming in five days a week or never returning to the office at all.
“There are still immunocompromised ‘fools’ at our company that are at risk,” Gardner said. “And do we want to say to them, ‘Sorry, choose your employment, because we need you to be in this environment at these times.’ So it's endlessly challenging, but that's kind of what we all signed up for when we went out to create something.”
On March 2, Walker will interview Maryland Gov. Larry Hogan. Register here.
This article was produced in collaboration between Studio B and Walker & Dunlop. Bisnow news staff was not involved in the production of this content.
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