In this podcast, Motley Fool senior analyst Jason Moser discusses:
The important (and very different) roles his parents played in his investing life.
First stock he ever bought.
How the worst stock he ever bought is now the property of JPMorgan Chase.
The proverbial “one that got away.”
The Dividend Aristocrat that takes him back to his childhood.
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.
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This video was recorded on August 22, 2022.
Chris Hill: As we head into the dog days of August, we got something a little different planned. Motley Fool Money starts now.
I'm Chris Hill, and let me start with some context. It's late August and in years past with our daily Market Foolery podcast, we would have what we like to call a short week, which was code for, “Hey, we're taking a couple of days off and there's a chance you might be too because it's late August.” Now, we are not taking any time off this week. Instead, we are in the final days of preparation for our investing conference next week in Washington, D.C. It is an all-hands- on-deck time for many of the people that you hear on this show, including and especially yours truly.
Today and tomorrow, instead of hitting the headlines, we're bringing you conversations with two of our senior analysts. Rather than drilling down on a specific investing topic, we're talking about their origin stories as investors. How they got started, mistakes they made along the way, and how they think about investing. We're going to hit the stock market news later in the week. Next Monday and Tuesday, we're going to be recording episodes from our conference in D.C. But right now, here's my conversation with Motley Fool Senior Analyst Jason Moser about the influence of his parents on his investing life, the company that he admires most, and when it all started for him. How did you learn about investing? Were you a kid? Did your dad teach you or did it come to you later in life?
Jason Moser: Yeah. My father taught me. I was a kid probably I think like seventh grade when it really started sinking in. Then I was lucky in that my dad, who's a physician by trade, he would give me a ride to school in the mornings during my 8th grade year, I think it was. But around that time, 7th, 8th grade, in the mornings if we weren't listening to an audio book on NPR — because back in the day that's how it was done — he would talk to me about investing. He'd talk to me about stocks that he bought and just give me an idea of how investing worked and what it was all about. Yeah, that was where the seed was planted. Then for whatever reason for me, finance, economics, stock market investing, all that stuff just piqued my interest as I grew up. I was an economics major in college, I think because of that really. But yeah, it all really started with just some ride-to-school conversations with my father.
Chris Hill: What was the first stock you bought?
Jason Moser: The first stock I ever bought, now, let me clarify, is not the first stock I ever owned, because along the way my dad opened up an account for me at Edward Jones years ago, obviously. First he would gift me shares for birthday or for Christmas and he gave me shares of Walgreens, he gave me shares one year of Dell, he even gave me shares of one company, I think, it was called Global Crossing. I think it's long out of business. But most of what I did was just dollar-cost averaging into mutual funds. I had done that for the longest time. Then at some point, maybe when I was around, I'm not sure how old I was at that point, my mind is failing me now, Chris, but it was around 2000. The Edward Jones representative said, “Hey, are you interested in individual stocks?” I thought, well, sure, let's give it a try. He recommended Cisco. Chris, let me tell you.
Chris Hill: In the year 2000.
Jason Moser: In the year 2000.
Chris Hill: Because this market is never going to stop going up.
Jason Moser: It's just never gone down. You look back in your history, you understand very quickly, that this was the height of this company's powers. This was buying at the top, so to speak. Thankfully, it was just a modest purchase, and it was the first stock that I ever purchased. But it was a great lesson that stocks indeed can and do go down. In some cases they go down an awful lot. Just to clear the record, I do not own shares of Cisco anymore, Chris.
Chris Hill: What's the worst stock you ever bought?
Jason Moser: Washington Mutual. This one came to me very quickly when you asked this question. I thought, well, that's the one that stands out and primarily it's because it went to zero.
Chris Hill: All the way to zero.
Jason Moser: All the way to zero. Yeah, this was one that was at the peak of the great financial crisis. You go back to 2008, '09, '10. There was all this talk of what were we going to do with the banks? These banks were in a lot of trouble. The banking landscape, just a tremendous amount of turmoil there. Washington Mutual is one of these mortgage lenders that has really gotten over their rivals. A lot of talk, would they or would they not nationalize the banking sector or how are they going to deal with all this. To me, and this was early on in my tenure, I think this was maybe right before I actually started here at the Fool when I did this. But I essentially went in with a gambler's mentality. I said, “Hey man, everything's going to be all right. We're going to buy the dip. Everything's going to be fun. They're not going to nationalize the banking sector. That's madness.”
Now, of course, they didn't nationalize the banking sector, but that didn't stop Washington Mutual from falling flat on its face. Again, thankfully, a very small amount of money, but a very valuable lesson learned in that, very simply, if you go in there with a gambler's mentality, you're going to get what you ask for.
Chris Hill: How is a gambler's mentality different from the mentality of, well, I'm just putting a tiny amount of money and I don't care or is it the same as like, I'm just putting a tiny amount of money and if it goes to zero, it goes to zero.
Jason Moser: I feel like that's the same, maybe the difference is if you put that tiny amount of money and you can actually identify what the business does and the potential tailwind or the potential catalyst that changes the conversation or changes the direction for the business. I think at the time really I looked at what Washington Mutual did, but clearly, I had not dug into the actual business and understood the nature of its exposure to the mortgage market. It just struck me as, this was a company that was so big who wants to go and so crucial to this mortgage market. It's got to come back. You go in there and flip the coin and you can get heads sometimes and tails the other. But that was another very good lesson. That's why I don't bother with trading and I don't bother with going in with that gambler's mentality because I'd rather just bet on NFL games. That's more enjoyable to me, Chris [laughs]. Put five bucks on the cowboys. Give me $10 and the Eagles, whatever that may be. But at least you know what you're getting when you go into it.
Chris Hill: If you take a gambler's mentality, then make it about gambling.
Jason Moser: Exactly.
Chris Hill: One of the investing lessons from the classic movie Wall Street is, don't get emotional about stock. But that's hard to do because we're human beings and I feel it in my own life that there are stocks that I feel a greater attachment to. Not necessarily because it's the biggest holding, but because maybe there's a memory attached to it, something like that. What is the stock that means the most to you?
Jason Moser: Yeah, I like that because I agree, don't get emotional. But by the same token, that's so hard to not. I think really it's just don't let your emotions drive your decisions. That's the way I like to look at that. Because it's just emotions are something really difficult to control. But I'm going to go with two companies here because the first one is actually no longer a publicly traded company. But Gymboree, which may sound a little funny.
Chris Hill: I remember Gymboree.
Jason Moser: Yeah. Well, if you're a parent, I'm sure you've had experience with it. That was what really took me by surprise with this company so early on. I have two daughters. Back in that 2010, 2011 time frame, they were very young. They were five years old. Chris, I'm just the dumb guy. I don't know how to dress little girls. [laughs] That was what I realized very quickly. Like I've just embraced being a father from every angle. It's the best thing in the world. But I also looked at it, and I have no idea how to dress these little girls. I'm going to put something on them — my wife is just going to freak. She's not going to like this. I don't want to waste money. I'm trying to figure out how to deal with this. I don't want to just say, well, my wife can handle it because that's not very, we were taking the team approach.
I was floored when I discovered Gymboree because they made it so easy for a dummy like me to dress his little daughters. They actually looked nice. They looked good. It was not only the in-store experience, but it was the online experience. Then they had the GymBucks program where it's loyalty thing where you buy so many clothes and then you get free money to buy more clothes. I was just astounded at how easy it made it.
Chris Hill: Is the free money they gave away part of why they're no longer a publicly traded company?
Jason Moser: No. I had pushed this. I pitched Gymboree early on in my development here at the Fool, going through our analysts development program in 2010 and 2011. One of the features of the program was constant pitching of ideas to the teams. So Gymboree just struck me as one, I was interested in the business. I own shares of it myself. I thought, well, I'm going to pitch this thing and explain my case. Unfortunately, it never made it through to a service. I understand why. Retail's a difficult space. But it wasn't an investment that did very well for me; it was ultimately acquired and taken private. But it was done so at a premium, and that was really great to see. Now the history since then, private equity really put them in a tough spot, but as a publicly traded company, Gymboree did really well. I just have fond memories of why. It was really all tied to my kids. That's one that really stands out.
Now, in regard to companies that are still publicly traded, I think everybody probably knows, I'm going to say McCormick. The main reason is because it takes me back to my childhood. My dad taught me about investing, my mom and my father to a lesser extent, but really, I observed my mom in the kitchen a lot growing up and cooking. She taught me how to do a lot of stuff in the kitchen and around the house. I just remember vividly that McCormick label, every nook and cranny of our kitchen. To this day, I see that brand and it takes me back to being a kid. Obviously, I still cook a lot today in my kitchen and at home is just chock-full with that McCormick brand everywhere. Consequently, I own shares of that business and my retirement portfolio is one that I intend to hold for as long as they possibly can. But I look at those two businesses as investments that have worked out well and ones where the emotions tied behind them are really positive.
Chris Hill: Is there one that got away? Is there a stock that you either sold too quickly or you just for whatever combination of reasons, just never pulled the trigger on buying?
Jason Moser: Yeah. Netflix stands out as the one there. Which is funny because I remember long ago before I started here at the Fool even, we lived in Astana, Kazakhstan, for a couple of years and we were there for work at the U.S. embassy. I remember over the course of that two-year stretch there, they had a mail program there where you could get stuff from the U.S. We had a Netflix subscription, at the time it was just DVDs, but every once in a while, we would get some American DVDs from Netflix in the mail, which was awesome. I thought this is just the coolest thing ever. I remember telling my wife, if this is a company that you can invest in, I'd be interested to know more.
Fast forward to getting to the Fool and obviously Netflix is an idea that's made it to many services here and brought tremendous success to our services and our members. For whatever reason, I was just never able to fully buy into it. I think part of that was because when I first got here, I was really discovering what investor I am. I didn't really know am I a value investor, am I a growth investor? What really matters to me, Netflix being a very polarizing stock, a lot of people have very strong opinions about it. I had just gone back and forth; it was like I was at a tennis match. I understood the point on both sides. I almost just became paralyzed and I just said, you know what, I just don't know what to do here. I'm going to take a pass. I understand the bull case there, but I see valid points on the bear side as well. Maybe it's best to sit this one out. Obviously, bad decision, but you live with those and you learn from them.
Chris Hill: Is there a company that you own shares of that you admire more than others? Because there are businesses that can be very rewarding for shareholders and that's great. Obviously, that's why we own stocks. But sometimes it's like, I don't love this business, I don't love what this company does, but hey, they're doing well. Is there a business that you actually do admire what they're doing?
Jason Moser: Yeah, there is. AppHarvest is really the one that stands out to me when I first thought about this. Clearly it's an investment that has not done so well so far. That's for a number of reasons. This is a very early-stage business. I think we set that expectation from the very get-go. I'm not terribly frustrated or disappointed by it. I fully expected that. I just take it with a very heavy grain of salt and understanding that this is a very long-term play here. But to me, when I look at what AppHarvest is doing and you look at the state of the world today, a growing population, a limited amount of resources. Food is essential. You look into some of the data out there, the United Nations says the world's going to need at least 50% more food by 2050 and yet 70% of all freshwater is already dedicated to agriculture.
According to the U.S. Department of Agriculture, 69% of all fresh vine crops sold in the U.S. in 2018 were imported. We saw over the past couple of years food supply chains became crunched. We saw that play out. When you don't have the same level of control over the food that's being produced in your country and delivered to your citizens. You look at controlled-environment agriculture as a potential solution to this. It's not to replace farming, but it is to complement and make it ultimately better in what they're doing. They produced 30 times more per acre in CEA than traditional farming. Uses 90% less water. It's all rainwater. They incorporate solar. It's pesticide free, it's operational all year. Incorporates technology, AI, robotics, better-quality food, better yields.
You look at the Founder and CEO, Jonathan Webb. He's very passionate about this. The company is a certified B Corp — it's a public benefit corporation. What that means is they are legally obligated in how they run this business right. Sometimes businesses, they can just say one thing and they'll do another. But really AppHarvest is going to be legally obligated here to really not just talk the talk, but to walk the walk. For me it feels the direction the world is headed, controlled-environment agriculture is going to be a part of our global food supply chain. I like what this company stands for, and I still am very confident in where it will be 10 years from now.
Chris Hill: How did a company like this get your attention?
Jason Moser: That's a good question. Well, it was one that went public recently via SPAC. We were talking a lot about SPACs and the pros and the cons and good examples and bad examples. I saw AppHarvest as one of those companies that had just gone public. I looked a little bit more into it, and once I learned a little bit about what the business actually did, it grabbed my attention and it just started digging in more and more. Again, I cook a lot at home, so I could relate to it a little bit. Frankly, it just stands out to me as one that makes a lot of sense. Again, we live in a world with an ever-growing population in a limited amount of resources. We're going to have to figure out ways — as many of these companies out here that are saying they're going to — do more with less. We're in that same situation regarding our food supply.
Chris Hill: What's the stock that's your biggest holding?
Jason Moser: That would be Amazon, Chris, Amazon.com. Do I need to explain why.
Chris Hill: Is it your biggest just because you've held it for a long time and it's grown over?
Jason Moser: It is, yeah, for the most part. Amazon is my largest. I've owned it ever since I started here. I bought my first shares of Amazon in 2010, shortly after I started here at the Fool. A lot of that really had to do with just a few Stock Advisor, team David stock talks, and then you go into a room and you talk with David Gardner about stocks for an hour and you come away a lot smarter and very inspired and we had talked a lot about Amazon. Those are early days, even as back in 2010, the argument was, oh, it's just too expensive. It doesn't make any sense. I guess it's a little bit different than the way Netflix was. With Amazon I just saw it. It just made a little bit more sense to me than something like a Netflix. I think that probably just goes to the market that it serves. E-commerce to me just seem a bigger, more reliable, understandable market opportunity.
I bought my first Amazon's shares in 2010. Clearly it's done very well since then, up something like 2,100 percent. But it's the biggest position today for three reasons. No. 1, it's just an awesome business. I think we can all agree there. No. 2, I've held onto it for over a decade. I've held onto it for now for around 12 years. We talk a lot about holding businesses for long periods of time. It's totally doable; if I can do it, anybody can do it. There's a good example of the benefits. Then No. 3, I added to it on the way up. I didn't leave it alone there. As the business continued to succeed, I bought a few more shares along the way. It's one that has just stood out as a business that continues to innovate, plays a very important role obviously all around the world, and that's where we are today with it.
Chris Hill: Where I'm going with this is I'm thinking about you holding a stock for more than a decade. I think it's really easy to overlook how pervasive in the financial media, in financial conversations in general, whether you're watching CNBC or Bloomberg, or you're reading an article or talking to a financial advisor, the idea of take some profits. It is ongoing, unceasing, unrelenting. Not that anyone who holds a stock for more than 10 years deserves a medal. Because ideally the reward is that, wow, you've held it all that time and compounding interest is the reward. But it's one of those things that is actually harder than it sounds.
Jason Moser: Yeah, it definitely can be. To that point, to be very clear: I have sold some Amazon along the way. It was a position that has points; it got to be a little bit bigger than I really wanted it to be, and because I was still fairly early in the development of my portfolio. To me, it was an opportunity to take some of those gains and reallocate to new ideas. Now won [sic] very much. But it was enough to get that position back down to a situation where I felt OK, I'm more comfortable with it here than I was there and darn it, Chris, the thing just keeps on performing and getting bigger. [laughs] That's OK. But I think that's a good point that you make there is that there are companies that you can own for a long period of time and they can keep on running and they could do really well. But you do want to keep in mind, you want to make sure you're comfortable with the size of that position. Everything in hindsight is very clear, but we know the market is forward looking. Telling the future is a far different exercise. It's always something to keep in mind. Those big winners can serve not only as great performers in your portfolio but opportunities to get some of those funds working and other ideas as well.
Chris Hill: It makes up for the Washington Mutuals of the world.
Jason Moser: It does. Now the only time I ever think about it is when you asked me the question what's the worst stock you've ever bought.
Chris Hill: Thanks for being here.
Jason Moser: Thank you.
Chris Hill: As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Chris Hill has positions in Amazon, AppHarvest, Inc., and JPMorgan Chase. Jason Moser has positions in Amazon, AppHarvest, Inc., and McCormick. The Motley Fool has positions in and recommends Amazon, Cisco Systems, Dell Technologies Inc., and Netflix. The Motley Fool recommends AppHarvest, Inc. and McCormick. The Motley Fool has a disclosure policy.