Helping Your Kid Pay for College? Check Out This Podcast. | The Motley Fool

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In this episode of the Motley Fool Answers podcast, Motley Fool personal finance expert Robert Brokamp interviews Mark Kantrowitz, an expert on the topic of saving for college. And we answer your questions about options for rolling over your old 401(k).

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.

This video was recorded on Oct 12, 2021.

Alison Southwick: This is Motley Fool Answers. I’m Alison Southwick, joined as always, by Robert Brokamp, Personal Finance Expert here at The Motley Fool. Hi Bro.

Robert Brokamp: Hi, Alison.

Alison Southwick: You bombed into anything we’re with your name this week.

Robert Brokamp: I just like the surprise, I don’t know what to expect and that’s what I love about it.

Alison Southwick: Surprised, there was no surprise. In this week’s episode. We’re going to talk about the stocks that taught us our biggest investing lessons. Bro is going to interviews college savings expert Mark Kantrowitz about financial aid in the Coverdell, and will also answer your question about rolling over your 401K. All that and more on this week’s episode of Motley Fool Answers. [MUSIC] Well, it’s homecoming season and what better time to ponder the mistakes of our youth, Bro?

Robert Brokamp: So many to think about.

Alison Southwick: So many. This week I’m enlisting the help with some fellow Fools to recount the stocks at them their biggest investing lessons. First up we have Chris Hill, you know him as the host of the Motley Fool Money and Market Foolery Podcast.

Chris Hill: The stock that taught me my greatest investing lesson is Ligand Pharmaceuticals, the ticker symbol is LGND. It was early 2003, and Ligand was featured in an annual write-up of stocks that The Motley Fool’s investing team have put together. I didn’t have any biopharmaceutical stocks in my portfolio. The guy who recommended it, he was smart, he knew the industry. I read his report three times and I bought a couple of 100 shares, and within just a few months the stock price doubled. Also during that time, I started losing sleep. I would wake up in the middle of the night and when I tried to get back to sleep, I found myself thinking about this company because I didn’t really understand what they did. It was a real distraction. I was literally losing sleep over a stock that had gone up. That is crazy, so I sold it. I doubled my money, I paid happily. The short-term capital gains taxes just so I could be rid of it and in the nearly 20 year since then I have only bought shares of businesses that I understand. From time to time I talked about what I call the sleep factor. Ligand Pharmaceuticals is the stock that taught me that lesson. I still lose sleep now and then but never because of my portfolio.

Alison Southwick: Next step we turn to Emily Flippen and she’s an analysts here at the Motley Fool and also a host of the Industry Focus Podcast.

Emily Flippen: The stock that taught me Mike greatest investing lesson was actually the last stock that I sold, which was Best Buy. I had been a shareholder of Best Buy for a number of years, but I was never really quite sure why I had bought it in the first place. I guess I heard about it, I was a customer, so I liked it. After holding the stock for a number of years, I looked at my brokerage account one day and I saw that its share prices increased something like over 200 percent. I thought to myself, this is probably the top right, so I sold it. I remember in pretty short form thereafter the stock dropped nearly 30 or 40 percent. I remember feeling like I had just made a really good decision. Although again, I really wasn’t quite sure why. However, since I sold Best Buy’s actually outperformed the market again over the long-term increasing another 100 percent, and almost reflecting on that and thinking, what can I learn from this experience. The lesson isn’t to never sell, although I certainly would have been better off if I hadn’t. The lesson was always have a thesis for why you buy a business in the first place. I had no thesis for Best Buy before I bought it. I wasn’t sure what I was looking for when I was determining if the business was succeeding or failing. If I had, I would’ve been able to tell that Best Buy wasn’t overvalued, but whether that it’s business was just doing exactly what it had set out to do and it was doing it really well.

Alison Southwick: Finally, we have Asit Sharma, he’s an analysts at The Motley Fool, and he is going to share the stock that taught him one of his biggest investing lessons.

Asit Sharma: Michael Jordan understood better than most, that the human brain is wired to create its own narrative from sensory inputs at any given moment. Even if that narrative doesn’t correspond to the reality that’s on the ground. There’s some great videos on YouTube of Jordan with his ball fix in which he stands stocks bill in many cases, and the world’s greatest athletes are running, cleared by him or stumbling backwards or even standing toe-to-toe, bewildered while he’s flipping the ball nonchalantly toward the basket. I just find that so interesting, and it reminds me of my own bewilderment with Microsoft, which has happened to me time again over the years. This is the stock that’s taught me my greatest investing lesson. That lesson is when you find a company with superior products and a dominant market position helmed by a visionary CEO and leadership team with huge balance sheet resources. That company can grow for a lot longer and at a faster rate than your brain thinks it’s reasonable or plausible or possible. I’ve watched Microsoft, especially since Satya Nadella took over as CEO turn into a juggernaut. I’ve profited from the shares, but then sold them thinking this can’t go on. How much bigger can Microsoft get? How many years can it keep growing at this rate, the answer is many more than I can conceive of. The moral of the story is don’t be like me. When you find that company that exhibits these characteristics, don’t get faked out.

Alison Southwick: Bro now it’s your turn. Do you have a stock that taught you a great investing lesson?

Robert Brokamp: I do. It didn’t just teach me a lesson. It actually is tied to one of the great stories in Motley Fool history, and that is back in 1999, Tom and David were actually on the view giving some stock advice to Lisa Ling who was on the show at the time. This is I think June of 1999, and she said I wanted to get better with my money, and Tom said, “Okay. What’s the service or product do you use?” She said Starbucks go there every day. They recommended Starbucks. They came back on the show and I think it was like 6-8 weeks later and Starbucks was down, and Lisa was not happy. They said the overall market is down, that’s probably where it’s down. What they didn’t talk about it was [laughs] some funny things going on with Starbucks. Starbucks at the time was speaking about becoming a lifestyle brand. They were going to start selling frying pans, towel, sofas, and [inaudible 00:06:47] . Howard Schultz the CEO of the company at the time, said that they would create a premier lifestyle portal on the internet, and saying with the Starbucks website would offer a “Feeling of romance or relaxation.” The market didn’t like that, [laughs] so the stock went down.

Alison Southwick: A very romantic frying pan. [laughs].

Robert Brokamp: Yes, exactly. Tom said to Lisa Ling, listen, it’s just a few months. We’re investors for the long term, see where it is in five-years. If it’s not up in five-years you can kill us. She didn’t have them back on the show. But five-years later the stock was up and I don’t know if she held onto her stock, but if she did she would’ve earned more than 2,000 percent since 1999 compared to over…

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