MarketFoolery Rings in the New Year
Happy New Year! We made it through 2018, through the highs of those bright first few quarters and the declines of the last few months. In this special episode of MarketFoolery , host Chris Hill closes out the year with stories, lessons, and thanks. A little money, invested in a good company, can grow well beyond inflation in a few decades. Investing is a lot like long-distance running, and not just because it's a marathon more than a sprint. The market can be scary, but some knowledge can ease your worries. Tune in to hear more.
Enjoy New Year's Eve, be safe on the roads, and we'll see you next year!
A full transcript follows the video.
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This video was recorded on Dec. 31, 2018.
Chris Hill: It's Monday, Dec. 31. Happy New Year's Eve! Welcome to MarketFoolery ! I'm Chris Hill. Just me in the studio. I wanted to share a few thoughts to wrap up the year. This is not the usual show, if you're new to this podcast. As always, feel free to skip this one. We're going to be back on Wednesday, Jan. 2, because, of course, the market is closed on New Year's Day. We're back on Wednesday with business as usual in a brand-new year.
I wanted to share two things. First is about a stock. This is a stock that I've owned since I was a teenager, only I didn't realize I owned it until just a short time ago. My father was a doctor. He invested in the stock market. It wasn't anything we talked about a lot, but I know he was an investor. What I did not realize until recently is that when I was 14, 15 years old, somewhere around there, my dad spent around $50 to buy a few shares of a single company for me, and he put them in a custodial account. We may have had a conversation about that. I honestly don't remember. If we did, I'm sure it went in one ear and out the other because I was a teenage boy at the time. Teenage boys, not the most attentive creatures that occur in nature. I don't know if we talked about it or not.
My father died when I was 16, and those few shares of that stock just slipped through the cracks of time. After he died, my mother was taking care of everything. She was managing the home and work and life without her husband. She did a fantastic job with that. She is now 88 years old, and my oldest brother is handling her investments. He contacted me recently to say that he was going through some paperwork, and he found this paper that indicated the existence of this custodial account with my name on it. I'm not going to bore you with all of the various conversations and phone calls that took place and all of the investigative work to track everything down. Here's where everything shakes out.
My father bought a few shares of this company in the early 1980s. In 1987, the company announced a 2-for-1 stock split. They did it again in 1997 and 2001. The company he bought was Exxon . In 1998, it merged with Mobil Oil. Because of the splits, the few shares that he bought turned into just over 100 shares, and the value of those shares went from around $50 in the early 1980s to around $7,000 today. Over Christmas, I sat down with my kids and I shared all this with them, because they're going to be the ones who are getting these shares. While I know my father bought this stock for me, I'm pretty sure he would be pleased to see the shares go to his grandchildren.
I've told this story to a couple of people. One of the reactions I've gotten is, "Oh, just imagine if you had known sooner, if you'd figure this out sooner! You could have gotten the dividends for yourself, you could have sold the shares of ExxonMobil, you could have bought something else." I know those comments come from a good place, but when I heard those comments, I just shook my head. I was like, "No, no, that's not how this would have played out."
By the way, I'm sure at some point in the past 35 years, my father has checked in from the great beyond and wondered, "Hey, have you found that stock yet?" But there's almost no way I would have done something as productive with it if I had figured it out sooner. There's no way it would have been better than the way it's turned out now. Also, that's about as good a lesson in the power of compounding as any that I've encountered in my life. Fifty dollars' worth of stock in a good business, don't touch it, let about three and a half decades go by, and it grows to $7,000.
People have asked me, "What did Santa bring you for Christmas?" I got to sit down with my kids, tell them a story about their grandfather, who was long gone before they were ever born, and share a fantastic lesson about the power of compounding. That's what I got for Christmas!
The last two years on this podcast. I've wrapped up by talking about my experience with the Marine Corps Marathon. I've been running for about 10 years. I sign up for races so that I will run in between the races. If I didn't sign up for races, I probably wouldn't run that much. I started with 5Ks and 10Ks. The last two years, my experience at the Marine Corps Marathon was pretty rough because it was so hot. This year, much better. For one thing, I didn't end up in a medical tent. I have come to believe in the parallels between investing and running a marathon -- having done both, I can tell you there's the obvious parallel, the cliche that it's not a marathon, it's a sprint, but there's much more than that.
When I finished this last one and people found out that I didn't end up in a medical tent and I ran a better time than I did the last couple of years, I got a lot of congratulations from people. It was very nice. A lot of, "Hey, you did it!" And I did. But, just like investing, I did not do it alone. I got help from so many people. First and foremost, my family, who gave me the time and space to go train, because it takes a lot of hours over many weeks and months.
I got help from people here at The Motley Fool. We talk about Slack and how we use Slack for preparing for this show, we have all these different Slack channels that are set up. One of them is for running. There are a lot of people here at the Fool who are in that channel. There's a lot of encouragement and advice. Seth Jayson, an analyst you may have heard on this show before, has run more than 80 marathons. He was incredibly helpful with strategy for the race and encouraging me to stick to the plan throughout.
Also, completely out of the blue, Dr. Tim Vakaris in Austin, Texas, a listener that I met at a listener meetup we did back in March, when we were at the South by Southwest festival in Austin, Texas. Had a bunch of listeners show up. It was great to meet everyone. He came up and introduced himself. He said that he was a doctor in sports medicine. We were chatting a little bit about MarketFoolery and about investing. Then, at one point, he said, "Can we talk about your running? It sounds like you've had a rough time with the marathon. Let's talk about that." And he was incredibly prescriptive and helpful.
Yes, we are all investors, we are all investing our own money. And it's our money, and we're the ones who are making the decisions. We're the ones who are doing it. But we benefit from one another. We bounce ideas off each other. We're better as investors because we open ourselves up to new ideas or different opinions about a given business. In the same way, yes, I'm the one who's out there doing the actual running, and I'm more experienced because I've been doing it for 10 years, but I'm so much better off, I'm so much better at it because I have all this help around me, I have a community of running support in the same way that we are a community of investors.
By the way, let's not forget the weather. The weather at this year's Marine Corps Marathon was so much better. It was about 25 degrees cooler than the previous two years. That is the big macro when it comes to running. That's the conditions. What macroeconomics is to investors like us who are focused on individual businesses, that's what weather is when you're running a race. Let's be honest, the past couple of months for investors, we've been investing in tough conditions. But over the long run, it's going to make us better. It's going to make us stronger at investing.
I had a 20-mile training run that I had to do about six weeks before the marathon. It was a Sunday morning. It was raining. It wasn't terrible rain, but it wasn't a nice, soft rain either. It was in between. It was a steady pour coming down from the skies. And I was getting ready and getting dressed. Right before I went out, my son looked at me, and he looked outside at the rain, and he said, "Why don't you go run on a treadmill?" I said, "Two things. First of all, if I had to do 20 miles on a treadmill, that would bore me to tears. The second thing is, it might be raining the day of the race. If it's raining the day of the race, they're not going to be handing out treadmills to people and saying, just go run indoors on this thing." Fortunately, it wasn't raining on the day of the race, but it was nice to know that I was prepared just in case.
Speaking of tough conditions, I don't know about you, but I've gotten a couple of emails, a couple of calls out of the blue over the past couple of weeks from friends and relatives asking me about the market. People who don't normally talk to me about the market are asking, "Hey, what's going on? What do you think of all this? Is this going to continue?" I have no idea! What I do know is, whatever happens, we're going to be here. Here at The Motley Fool with this podcast, with all of our podcasts, with our services, with everything that happens on fool.com , the articles we publish. We're going to be here.
We started doing this podcast in January of 2011. We had been doing Motley Fool Money for a couple of years. With MarketFoolery , we said, "Let's see if we can talk about business news and the stock market on a daily basis." I know, since I was there when we started, I didn't think we were going to be here eight years later. But now that we're here, we're definitely not stopping.
Let me close with a couple of thank yous, then we'll get out of here, because it's New Year's Eve. First, thank you to Tom and David Gardner, who lead this company and set the tone for everything we do here at The Motley Fool. Thank you to the analysts who come into the studio. I say this every year because it's true, they're not paid to be here. It ain't their job to come into this studio and talk to me about what's happening in the market. I so appreciate that they do. The analysts for The Motley Fool investing services and the analysts at MFAM Funds. Thank you to Mac Greer, who is the longtime producer of our weekly radio show, and for the past two years, Mac has sat in this chair for MarketFoolery when I can't make it into the studio.
Thank you, of course, to the man behind the glass, Dan Boyd, who makes everything work, who is great at his job, who is one of those people who is great to work with. Whatever you do for a living -- or if you're in school, this happens in school, too -- the people who are around you in your classes, the people who are around you at work, they have an influence on your level of enjoyment at that endeavor. Dan is one of the reasons I enjoy coming to work at The Motley Fool.
Last but not least, thank you! Whoever you are, wherever you are, whenever you listen, however you listen, thank you for listening! You know when you're on a plane, and it lands, and they get over the loud system and say, "We know you have a choice in airlines. We appreciate that you flew with us." If you're like me, what goes through your mind at that point is often, "I didn't really have a choice of airline. I knew I had to travel on this day. This was the only flight that was available/the only flight I could afford. I didn't really have a choice." That's not the case with podcasts. You have a choice. You can listen to anything. The fact that you choose to listen to MarketFoolery is an incredible compliment to us. It is something we do not take for granted. We so appreciate your listening!
One of the things that we're trying to do with these podcasts, and at The Motley Fool in general, but definitely with these podcasts, one of our goals is to try and get people more comfortable investing in the stock market because we know from the data it's the best way to grow your wealth over time. It's the best path to financial independence. It's not easy to get comfortable, even in good times. Hopefully this podcast helps with your comfort level. If it does, please help us spread the word. Tell someone you know. If you could, write a short review on iTunes or Stitcher or wherever you listen, whatever platform you use. Those reviews also help more people find the show. We really appreciate your listening, and we really appreciate any help you can give us in spreading the word on any of the shows we do here at The Motley Fool.
It's New Year's Eve. As my father would say, it is the night when the amateur drunks are on the road. Please, have fun, be safe out there, be careful! Thank you! We'll see you in 2019!