- Today, we have a really fun video for you guys.
We are gonna talk all about introduction to investing.
And I have a very special guest here with us today.
Say hello to Maria Gallagher from The Motley Fool.
Hey Maria.
- Hi, thank you so much for having me.
- Yeah, thank you so much for being with us today.
I am so psyched to chat with you.
So for those of us who are perhaps
not as experienced with the verbiage
and the lingo of the investing world,
can you tell us what IPO stands for,
and any other acronyms that you feel
we should know about before we start?
- Sure, so IPO is Initial Public Offering.
So that's usually a company will do a big IPO road show.
They'll work with an investment bank,
so that their of their stock
becomes public and can be traded on the public markets.
Retail investors like the two of us,
before the company goes public,
generally we wouldn't be able to get in on that company.
But once it becomes a publicly traded company,
we will be able to trade it just us on
whatever brokerage account we use.
Finance has a lot of acronyms,
so I can try and go through a couple.
We've seen a rise in something called ESG Investing,
which stands for Environment, Social and Governance.
And so what that means is, it's an inclusionary screen.
So we as investors look at any company in the world and say,
how does this rank in terms of
how it treats the environment,
how it treats the world around it,
how it treats its employees, is a big one as well.
And then, you know, what does the leadership look like?
How much are they getting paid,
and kind of examining all of those different avenues
and understanding of, I want a company
that will maximize profits, but not,
to the detriment of these other impacts
in terms of the environment and their employees.
- I love that.
So is ESG then the same as like Impact Investing?
Or are they two different things?
- So they're all kind of under
the same umbrella in some types of sustainable investing.
So there are three main types.
So ESG, which I just spoke about it's inclusionary.
So any company in the world.
You can say, is this an ESG company?
Yes or no. - Okay.
- And then when you look at the second major type is called
Socially Responsible Investing, or it's called SRI.
If you've heard of the sin stocks,
which are generally like alcohol, tobacco and gambling,
those won't even be considered in an SRI portfolio.
So from there you also have
something called Impact Investing.
Where for SRI, ESG, generally with investing
your goal is to beat the market.
You say like, I want to do well while doing good
is generally the prevailing notion.
And then within Impact Investing,
that's not necessarily the same.
That's not, your main priority
is no longer to beat the market.
Your main priority is to have your money make an impact.
And so if that means lower returns, that is okay with you.
And so that's just kind of that mindset shift,
is all a little bit different,
but all under that same umbrella of sustainable investing.
- Okay Maria.
So speaking of investing,
and plant-based investing in particular,
we're gonna try some food today,
from companies that have gone public recently,
are you excited?
- I'm thrilled.
I love to eat.
And I haven't tried any of these foods in person.
- All right, we're going to talk about Beyond Meat,
which recently went public.
I'm super excited about that.
It's great news for all of us plant-based eaters.
Have you had beyond burgers before?
- I have not.
I'm intrigued to try it, I am a meat eater,
and I think that Beyond and Impossible are unique
and that they're both trying to tell me that they taste
the same as meat and that I don't know
if I think that's true.
- Yes, I'm curious to see what you think.
Because I have grown so accustomed to this taste
and I crave it so much.
So I'm really curious to see what you think when we bite in.
All right Maria, bon appetit.
- Okay.
- See for me, I love that little bit of like a
grilled char taste in it.
And I love the softness.
I like the consistency of it.
To me, it reminds me a lot
of what I remember meat tasting like.
What about you?
- I don't think it tastes like meat.
But I do think it's good.
It's close, it's pretty good.
But I think you can, it doesn't have the same type of like,
I don't know the right word, like grittiness, maybe,
that's that comes from real meat.
- Okay, I can definitely see that,
yeah, for sure.
And I know Maria that it was kind of unique in that
like Beyond Meat was one of the first to go public.
What do you think about that?
- Yeah, I do think it's a pretty talked about stock.
You can see after an IPO'd in 2018, it had a really big pop,
which is when it just goes like, skyrockets
'cause so many blood trying to get into it.
And the stock price still
hasn't reached that high from its IPO.
So I think it's great to see
a lot of excitement in investing
and a lot of people who are eager to get into this field.
I think that it's a really interesting company.
I think it has a good leader,
but I do think that there, it's important to understand that
it is expected to be the number one,
number one stock within this plant-based industry.
Those are the expectations
baked into that current stock price.
- So really what you're saying Maria is,
I shouldn't be looking to invest in Beyond Meat
just because I like the taste of it,
but I should be looking at it more holistically
from top to bottom really, is what you saying.
- Yeah, absolutely.
And so I think that some of our best investing ideas
are from observations in our world
and in our life and understanding I'm doing this a lot,
my friends are doing this a lot,
but then once you actually invest,
I think that you need to make sure
that you do the research from, I've noticed this thing.
I'm interested in it to, I'm going to invest in it.
I think that those are two different kinds of
trains of thought that you have to try and do both
while you're investing.
- Interesting.
I never would have thought about it that way,
but that actually makes a lot of sense.
So that's a great tip.
Thank you.
So let's really quickly talk about Impossible Foods,
which is another big plant-based meat company
that's doing really well, and seems very popular.
Especially on social.
So if and when they hit the stock market,
do you think it will be like
a direct competition type of thing?
I mean, what do you think is going to happen?
- I do think it is continuing this trend we're seeing of
investor excitement in this market,
but I do think that especially with consumer goods,
when you have virtually no switching costs,
if you're going to pay up for something then
we say that that company has pricing power.
So you like it so much, you'll pay more for it.
And a great example of that is Apple.
I will pay more every time I get a new phone
because I love my Apple phone.
And that's one of the things
that makes Apple a great product and a great business.
And so with these companies, I think we have,
it has yet to be seen,
I like Beyond so much,
I'm going to pay more for Beyond than
I'm going to pay for Impossible
or is it going to be a race to the bottom
of Beyond has to slash prices,
and Impossible has to slash prices
and they compete with each other.
And so that I think is still to be seen,
but they're both being priced
as if this market is going to be, the next big thing.
And so understanding those expectations.
- Okay, well, what do you say we give this
Impossible Burger a try? - I'm excited.
Yeah, so to me, right off the bat,
it's a bit of a different flavor profile.
I do remember what meat burgers tastes like.
And at least to me, in a fast food setting,
I feel like this tastes a lot more
like what I remember of fast food burger tasting like.
What do you think Maria?
- I agree.
I think this tastes more like meat.
I think this tastes more like,
if you gave this to me and I was blindfolded
and said, is this a burger?
I would say maybe.
- All right, Maria.
So I think it's desert time.
And even though Impossible has not yet gone public,
there is another company that has called Oatly.
Have you heard of Oatly?
And if so, what do you think?
- I'm a big oat milk person.
We can talk a little bit more about the investing,
but I actually think from an analyst perspective,
I think Oatly is very interesting in a way,
because I would say a lot of people will say,
well if I'm not going to eat a burger
I'll just eat vegetables.
Or like, I'll just eat something else.
I don't necessarily eat that specific replacement.
But for a lot of people,
you need something in your morning coffee.
And it's not the primary taste.
And so I think that that's psychologically easier switch
for a lot of consumers to say, it tastes similar,
it gets the job done, it's better for the planet,
and it doesn't make my stomach hurt.
Instead of saying like,
oh, I'm replacing this whole meal
that has a lot of significance to me.
- Well with that, let's give this a taste test.
(Suresh laughs)
Oh, that's so creamy.
It's so smooth and silky on my end,
I have the vanilla Maria, what flavor did you get?
- I got chocolate.
I will say, it's good.
So the exciting thing Maria is that,
Oatly is now the second plant-based company to go public.
So what do you think about that?
Do you think there's like more to come?
- Yeah, I definitely think there are more to come.
And what's interesting about the Oatly story is that
global dairy market is smaller than a global meat market,
but the global plant-based dairy market is so much bigger.
It's about three times the size.
So the global dairy market is about 600 billion,
and the global plant-based dairy sales are about 18 billion.
So it is a much bigger, like more,
more and more people are adopting plant-based dairy.
I think in a way that we haven't seen that rapid adoption
in terms of vegetarian eating different types of meat.
Because I think we talked about this a little bit earlier.
It's a much easier psychological switch to just say,
we'll just change to whatever's in my coffee.
As opposed to I'm gonna change the core of my meal
and it's gonna, the whole meal is going to taste different,
but still has some of those concerns of,
you can buy other plant-based milks, right?
You can buy Planet Oat, you can buy Chobani.
And so why are you buying Oatly specifically?
There are very low switching costs,
which is always kind of a concern for investors.
- So tell me then a little bit more about
Motley Fool and what you guys do there.
- Yeah, so we have a lot of free resources on fool.com.
The Motley Fool has been providing investing insights
and financial advice for over 25 years.
So it's really for wherever you are
on your investing journey,
we can really meet you where you are.
- That is so cool.
I love that.
I am like no joke gonna check that out, seriously.
- Yeah, honestly,
finance is not as confusing as everyone thinks it is.
It's a lot of jargon and it should be taken seriously,
but it should be available for everyone.
And so hopefully that is, that is the take away.
- That is awesome.
Well, thank you so much for your time
and your knowledge and for helping us
understand a little bit more
about the complex world of stocks.
- Yeah, absolutely, have a great day.
- And I will definitely be sure to hit you up Maria,
when I'm in New York, so we can hang out and chat more.
Thank you so much for watching.
Don't forget to subscribe, and like the video.
We will see you guys again on another video real soon, okay?
Bye.