2 Go-To Market Indicators, 6 Stock Ideas for the Next 5 Years
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What is the main topic discussed in this episode?
Transmedics has built up their organ care system. They have one of the great CEOs in the US. It's been a wonderful stock for us. I think our cost basis on some of our shares are down around 15 to 20, and the stock is at about 145 today. But I think it's got another 3X over the next six to seven years for Transmedic shareholders as it continues to expand.
That was Motley Fool co-founder and CEO Tom Gardner talking about Transmedics, one of his favorite stocks for the next five years. I'm Motley Fool producer Matt Greer. Now, Motley Fool chief investment officer Andy Cross recently sat down with Tom for our Stock Advisor podcast. They talked about the current stock market. Tom shared two of his go-to market indicators and six of his favorite stock ideas. Andy kicked things off by asking Tom about AI.
How do you think about trying to determine those AI contenders from the AI pretenders when you're looking at it as an analyst and as an investor in companies you might be studying and thinking about investing in?
Well, one of the things to look at is cultural change. and to just read about the companies. Again, depends how many companies you have in your portfolio and whether you think you'd have pattern recognition on understanding the decisions they're making. But you basically want dramatic action culturally at companies now because the winners are going to be AI native companies like the winners. were going to be and did become internet native companies. It wasn't like Google was actually a physical bookstore. Google wasn't a bunch of physical space universities and it was gonna try and create online learning. It was just, we're just using the internet for our whole business. We wouldn't even think twice.
This is what people are not quite understanding. But of course, I don't want to say that too much because it's becoming more and more real and we're seeing transformations in company cultures. But I don't think what people fully realize is that companies with 2,800 employees may be able to be replaced by companies with 108 employees. In order for a... existing technology business to get there, I mean, how do you get from having 2,800 employees, let's just say down to 400 employees, who are all AI native, all advanced AI coders, totally bought in, not even questioning, not even like, oh, I use AI and it came back and it gave me the wrong computation, gave me the wrong answers, like, okay, good, you're supposed to go back and keep working.
so that it gets it right for you. You're using a tool, you're trying to shape that tool to work for you. You don't just give up after you put a one line prompt and it doesn't give you the right response. So I think what we want to see in companies is that they are bringing in teams of people who have expertise with advanced new technologies and that they're letting them lead. And that's so hard to do. We got such great advice from outside tech advisors at The Motley Fool who essentially said, you know, when you hit a big transformation like this, just go back and read Only the Paranoid Survived by Andy Grove. The leaders of today at your company, they're not likely to be the leaders of tomorrow unless they go to sleep and wake up the next day and they're like, I am all in on this.
I'm only gonna work through this. I'm not gonna try and incrementalize my way forward. I'm all in fully on it. It just becomes too difficult to stage your transition in a workplace when there are newcomers into the market that are only using those tools. We saw it at Time Magazine. We saw it at Businessweek Magazine. We were interacting with so many magazine and newspaper companies in the 1990s, and I had a lot of respect for them. After all, they were the big brands of the last 15 years. They had huge balance sheets. We were flattered that they were talking to the little old Motley Fool, but now they're all gone.
What are the two go-to market indicators mentioned by Tom Gardner?
Like they're literally, their commercial value collapsed. Some of them were bought for a dollar a share or their stock went down 95%. So when you say which ones are gonna be real, which ones aren't, I think you have to get proof that they are AI native.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:05–3:35
2
What are the two go-to market indicators mentioned by Tom Gardner?
3:35–4:06
3
How can investors differentiate between AI contenders and pretenders?
4:06–8:35
4
What stock ideas does Tom Gardner recommend for the next five years?
8:35–8:58
5
What are the implications of AI on company culture and employment?
8:58–15:17
6
What lessons from the dot-com bubble are relevant today?
15:17–23:59