David and Tom Gardner

David and Tom Gardner, American entrepreneurs and cofounders of the multimedia financial-services company the Motley Fool. David Gardner (b. May 16, 1966, Washington, D.C.) and Tom Gardner (b. April 16, 1968, Philadelphia, Pa.), with no formal training in finance, conceptualized a unique forum in which a community of individuals could discuss and improve their financial decisions free of cost.

The Gardners were both successful students. David graduated from the University of North Carolina at Chapel Hill in 1988; Tom attended Brown University (B.A., 1990) and did graduate work in linguistics and geography at the University of Montana. Although they had long been interested in money management (they began investing at age 18), they resisted the lure of Wall Street and instead became its competitors.

In 1993 David began an investment newsletter, which was largely unsuccessful until the following year, when Tom promoted it on America Online (AOL). Realizing that the Internet was a perfect forum for their product, they launched the Motley Fool site on AOL in August 1994 (they later added a Web site). The brothers named their service Motley Fool so that if they “totally screwed up [they] could fall back on the fact that [they’re] just Fools.” They wrote essays, provided market insights, recommended how much, when, and where subscribers should invest, and suggested the kind of return subscribers could expect on their money. David’s shed—located behind his house in Alexandria, Va.—became information central, or “Fool Global Headquarters.”

The Gardners’ personal portfolio was proof of their genius (or foolhardiness), as they consistently outperformed Standard & Poor’s Market Index. In the first year they finished 40 points ahead of the market. Business quickly outgrew the shed, and they moved into office space in Alexandria and hired a staff. The Gardners emphasized that their product was revolutionary because it created a shift in power from big-money investors and brokers to “the little guy” who had never before had convenient and affordable access to investment information. They also believed it was successful because of its simplicity. David said, “If the forward-growth rate of a company is 30% annually and the price/earnings ratio is 15, the Fool Ratio is 0.5. We like to buy stocks at that ratio.”

With Motley Fool’s success—by late 1996 it was the most frequently consulted financial service on AOL—the brothers expanded, partnering with Universal Press in 1997 to write a weekly column that was published in newspapers across the country and launching a British version of their Web site in 1998. The following year Motley Fool won a Webby Award for Best Finance Site. In 2001 the The Motley Fool Radio Show debuted on National Public Radio (NPR); it ran until 2006, when the company turned its focus toward online ventures, including Motley Fool Video. The company also launched a series of subscription newsletters, including Motley Fool Stock Advisor (2003), Champion Funds (2004), Rule Your Retirement (2004), and Rule Breakers (2004). In addition, the brothers wrote such best-selling books as The Motley Fool Investment Guide: How the Fool Beats Wall Street’s Wise Men and How You Can Too (1996) and You Have More than You Think: The Motley Fool Guide to Investing What You Have (1998). In 2009 Motley Fool announced the creation of a separate business unit, Motley Fool Asset Management, LLC.