Everlasting Strategy – Video Transcript

What is the Everlasting Portfolio and what separates it from The Motley Fool's other real-money portfolios?


Well, the Everlasting Portfolio represents my investment approach -- and it is the portfolio that reflects the holdings that I have in my personal account -- so I don't own any stocks outside the Everlasting Portfolio.

The Everlasting Portfolio is a growth-oriented portfolio with a couple of mandates. One of them is that we do not sell stocks within five years, and that's because we don't really think of them as stocks. We think of them as stakes in businesses. So there's definitely an ownership mentality and that means secondarily we really like to know that there's ownership mindset in the executive ranks. We want to know that the team that is running that company has a long-term stake in the success. It's isn't just there for a couple of years trying to hit their bonus numbers.

What's the difference between the Everlasting Portfolio and Motley Fool Wealth Management's Everlasting SMA strategy?


The difference between Motley Fool's Everlasting Portfolio and the Everlasting strategy we manage in Wealth Management is that in Wealth Management we have professional portfolio managers, there, who are building that portfolio for you and managing very difficult decisions that don't happen if you think about the Motley Fool's Everlasting Portfolio.

The Everlasting Portfolio is getting regular cash flows all the time. Are those cash flows matching your cash flows, because that's a critical distinction. If you think about when you get cash flows in, you want to buy something fairly easy to do, but what if you need cash? If you need cash, what do you sell? Or if there's a stock you want to buy and your portfolio is fully invested, what do you sell to raise that capital? Those are the types of decisions that our portfolio managers are handling for you on a day-to-day basis.


The Motley Fool ONE Everlasting Portfolio has a rule that it can't sell a stock inside of five years. The Everlasting SMA is not subject to that restriction, so we are constantly looking and incorporating new information about how a company's culture, or outlook, or management team might be changing, and we're allocating that capital based on our best ideas at that moment.

What is the Everlasting SMA strategy and what can you expect if it's part of your custom-blended SMA?


These are founder-led businesses with great growth potential. A high return on capital. Very profitable. These are the types of businesses that you want to see in your portfolio if you're trying to achieve outsized returns. That's what we're working to do on behalf of our clients.

Why should investors be excited about Motley Fool Wealth Management's SMAs?


I'm really excited about serving the needs of so many people that have come to The Motley Fool over the years expressing an interest in getting invested with [a] long-term approach and great investment principles, but perhaps they didn't have the time, or they didn't have the interest in the subject, or the emotional temperament to handle the volatility of the market.

So at Motley Fool Wealth Management, I guess I think of it a little bit this way. Not everyone wants to develop software applications for their iPad. Some people just want to buy an iPad and enjoy it -- and purchase some apps on it and enjoy those apps -- rather than actually coding or building an iPad.

The people in Motley Fool Wealth Management are the ones that are coding and developing and building the solutions, and there are a lot of people who just want to buy those solutions rather than having to build them themselves. And that's the spirit of Separately Managed Accounts and Motley Fool Wealth Management.


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