You can follow Motley Fool co-founder David Gardner @DavidGFool on X.
In this podcast, Motley Fool co-founder David Gardner digs into the Rule Breaker Investing mailbag.
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This video was recorded on August 31, 2024.
David Gardner: Shortest mailbag ever. Possibly. It’s what happens when you record a month-end mailbag before releasing some of the month’s podcasts. But whether we run long or short or somewhere in between is often a function of you. Yes, you, and what you sent me, or in the case of this month, what little time I gave you to send me. Nevertheless, good things come in small packages. Only on this week’s Rule Breaker Investing.
Welcome back to Rule Breaker Investing. Thanks for making a little bit of time for us on your weekend. It’s very rare for me to record a mailbag as a weekend extra, but that’s exactly what it made sense to do this month, especially because earlier in the month, I got a cancellation from one of our authors. I managed to fit him in earlier this week. C. Thi Nguyen graciously fit us in and joined us this week, and I decided he needs to be an author in August, not an author in August in September. We used our normal month-end mailbag slot for C. Thi Nguyen, and I decided, let’s just pack this mailbag on the weekend.
If you’re in the United States of America, you are, I hope, on holiday, it is Labor Day weekend. Happy Labor Day weekend to all my fellow Americans. But about a third of us listening to me are from somewhere else around the world, I hope you’re enjoying your weekend. Just to review where this podcast went over the previous four weeks, we started of investing and the Fools I Sing. That’s how I chose to kick off authors in August. Having, had a cancellation, I always had a plan B, and that was simply to bring back the various poetry, the poems, taking many different forms over many different years that have popped up on this podcast, I’d saved them. I thought that would be a fun podcast to do one day, and it made a lot of sense to kick off authors in August with my many fellow Fool authors, you. Many of you thank you for taking the time over the years to send in some poetry. We kicked off with of investing in the Fools I Sing. Then we got to our three authors this month. The first was Halfords founder John Mackey and his book, The Whole Story. We then went to a completely different a book. Let’s call it experimental fiction from Stanford Neuroscientist David Eagleman and his book. Of course, we talked a lot more about a lot of other things besides just his book, which was also true of this week’s podcast.
Games with C. Thi Nguyen, his book, Games Agency as Art, was a wonderful platform to launch from, and just to discuss games and how they come into our lives and how they help enrich our lives and often improve our perspective around ourselves and the world at large, games having been played for thousands and thousands of years by our species. Thank you again, to all three of my authors John Mackey, David Eagleman, and C. Thi Nguyen, my authors in August here in 2024.
Well, I usually kick off mailbags with hot takes from Twitter X, which is exactly what I’m doing. This weekend, except this is going to be the majority of the mailbag. I’m really going to focus on four tweets that came in and make that the bulk of this weekend’s mailbag. Let’s go to the first one. This one came in from Eugene Ng @EugeneNg_Vcap. Eugene, you wrote, thank you to David Gardner @DavidGFool for resharing my prior Rule Breaker Investing Mailbag poem from November 2020. It was shared on the recent Rule Breaker Investing Podcast, the August 8th episode of investing, and the Fools I Sing with other Fools, including David is truly such an honor to be sharing the stage. Let us all incorporate Eugene, you write some version of vision. In our investing portfolios. Thank you again to Eugene Ng, who calls out @amitsomani. Amit, thank you for pointing out that podcast to Eugene so you can come back and listen to investing in our vision, a big theme for him and his work, and certainly for me and my work and what we do. I think for many of us listening to me as we invest. We invest with vision.
In fact, principle number 1 of the Rule Breaker portfolio. I have six portfolio principles, and the first of them is the most important. It is simply make your portfolio reflect your best vision for our future. I truly believe you, dear listener, all of us are going to maximize our returns. Not just financial returns, but yes, your happiness return, your fulfillment, your enjoyment and investment. You’re going to max that out. If you truly make your portfolio reflect your best vision for our future. I don’t say for your future or the future, I remind you that you are part of all of our future. Every little thing that we do when we spend money or invest money is a blow for freedom. It is, I guess, more aptly. It is helping shape the future that all of us will live into. When you spend your dollars at that store not that other one, you’re helping that store benefit. When you’re decide to buy that stock, not this one, you’re pumping up their balance sheet and prospects a little bit more. Not that other one. Every one of us, there is a one to one relationship between the dollars that we spend and the dollars that we invest and the world that we are living into. Make your portfolio. Reflect your best vision for our future. Two other things I want to mention very briefly about portfolios.
The first is that I think most of us should have a stock portfolio of at least 20 stocks. That’s because another of my Rule Breaker principles. This one is one of my Rule Breaker habits is never to start a new position at greater than 5% of your overall portfolio. I often hear of people who decide to go all in or go big with one stock. They might have a 10 stock portfolio, but they’ve got one new idea, and they put 30% of their money into that one stock. I think that’s a mistake. It might work out for you. It’s not a great habit to get into, more often than not, you and I are going to do much better if we don’t allow any new position to start at more than 1/20th 5% of our overall portfolio. If you hew to this approach to investing this Rule Breaker approach, that means, by definition, as you start your portfolio, you should have 20 plus stocks in place.
Now, not everybody feels like they have the money in place or necessarily a brokerage firm that would allow them. We all have different brokers that would allow them to buy fractional shares, which is often what allows you to build up small positions in bigger companies. Not everybody can necessarily start right there with 20 stocks, but I hope you get the overall principle which is you should be making your portfolio reflect your best vision for our future, and you should start small with each of your positions, let them grow big on their own. The winners usually do, and that’s the real way to succeed in Rule Breaker investing. The final thing I want to say before we move on to tweet, number 2, is just you should be able to look up and down your brokerage statement or if you’ve got your portfolio on your phone, you should be able to look up and down that portfolio and feel confident. Feel like you know these companies. You love these companies. You’re looking forward to seeing how they do. You’re looking forward to learning more about them. You should not feel disconnected from any of the companies that you’re invested in.
Now, I have some companies in my portfolio that are dogs, and I’ve just let them wag their tails and bark all the way down to the bottom of my portfolio standings. They’re my bad picks. They’re worst investments I’ve made, and often, I just hold onto them. The good news is by never adding to them, which I never do, they become increasingly irrelevant to the overall performance of my portfolio. I have to admit, even when I look at my own portfolio, I can’t always say I can look confidently up and down that portfolio. But at least I look knowingly. I understand why each of those things is there. Most of all, you should feel some form of magnetic attraction to the companies in your portfolio, presumably because you love them in the first place, and what they do in this world, probably for you as a consumer, you appreciate them.
But you also appreciate what they’re doing in your portfolio, and feel motivated and interested to follow them as they grow into the future. Anyway, there’s a little bit more about vision, and Eugene, thank you for your tweet. Let’s move on to tweet number 2.
This one of the John Mackey appearance earlier this month on the podcast. Jasmine Girl at John’s Wort Lisa you wrote, I really enjoyed listening to this one. Agree with you too that the Russian writers like Tolstoy and Dostoyevsky are great. I also like Turgenev a lot. That is from longtime Fool Lisa, and Lisa thank you for that. It’s funny you mentioned the Russian writers, John Mackey called them out when I asked him, what’s on his reading list? What books has he really appreciate? Again, he is one of the most widely read people. I know now 71 years young. I love to ask people like that. What are some other great books that all of us could learn from? In particular, after he mentioned his appreciation for the Russian greats, I found myself calling out another wonderful book of the last several years, and that is a swim in a pond in the rain by George Saunders.
In fact, I found myself calling that book out a week later with David Eagleman, as well. I’m quite happy to say that neither John nor David had heard of the book yet or read it, and yet it is a New York Times best seller. Many of you will have read it. Or listen to it on tape. But I’ll tell you, if you love literature, and you love stories and what makes stories sing. You think that Tolstoy and Turgenev and Chekhov and all the rest are great for very specific reasons, but maybe ones that you don’t fully grock, I completely recommend to you A Swim in a Pond in the Rain by George Saunders.
I am loving reading that book aloud to my wife, something that we’ve done for decades before we were married, I read aloud, during supper time, she makes supper. She loves to cook. I love to read aloud. She loves to be read to. How many books have Margaret and I enjoyed together, and that’s the one we’re having a great time with this summer. There’s another book plug A Swim in a Pond in the Rain for those who love literature. I also want to mention that John Mackey was generous with his book tips, and I took two away, neither of which I’d read before, but both of which I felt inspired to read.
One was Bob Solomon’s book Ethics and Excellence. I think I should read that at some point. I love the title. Then John also called out Ken Wilbur’s book A Theory of Everything. I remember John saying, it really is of everything. That just sounds interesting to me enough on its own. A couple more good books to consider. That’s part of what makes being a reader so much fun. You read and love a book, and it leads you. It might be the person who gave you the book, or the book itself might lead you to your next read, and you just go like that dancing through life. Let’s move on next to tweet number 3. This one actually is something I reposted. This was not sent to me. One of my favorite authors Matt Ridley, who’s written a number of books I really love, most prominent, which, I would say is The Rational Optimist. One of the things I love about Twitter and Twitter X is any book that you’ve read and enjoyed, if that author is still living, they’re probably out there on Twitter X, and you can follow them.
A lot of us think that, I’m not going to really use Twitter because I don’t want to tweet out 140 words about what I’m eating today or what I’m doing next week. Well, that is one way that people use Twitter, but for me, I more passively read it and follow people, especially authors that I really admire, because when they give you a book to read and you read it, that’s a gift that will live forever, but even better than that is when you can find the author and get regular communications from that author, things that they’re seeing that are happening right now in the world at large. They may have written their wonderful book 10 years ago, but what do they think about yesterday? That’s one of the things I love about Twitter. This post came from Matt Ridley. He’s actually re posting something else from Daniel Smith. But ultimately, it’s a Walter Lippmann paragraph, that was written in 1937. Walter Lippmann, a journalist, I’m just checking his dates. He was born in 1889. He died in 1974. On Wikipedia, it mentions his career spanning 60 years, and that he was famous for being among the first to introduce the concept of the Cold War. It’s also said of Lippmann that he coined the term stereotype in the modern psychological meaning that we used today. A very influential and deep thinker, journalist Walter Lippmann. I loved this quote from 1937 from his work The Good Society. Here it is channeled via Matt Ridley. ”The thinker, as he sits in his study, drawing his plans for the direction of society, will do no thinking if his breakfast has not been produced for him by a social process which is beyond his detailed comprehension. He knows that his breakfast depends upon workers on the coffee plantations of Brazil, the citrus groves of Florida, the sugar fields of Cuba, the wheat farms of the Dakotas, the dairies of New York.
That it has been assembled by ships, railroads, and trucks, has been cooked with coal from Pennsylvania in utensils made of aluminum, china, steel, and glass. But the intricacy of one breakfast, if every process that brought it to the table had deliberately to be planned, would be beyond the understanding of any mind. Only because he can count upon an infinitely complex system of working routines, can a man eat his breakfast and then think about a new social order?” Matt Ridley appends, This is one thing Matt says, I would include in every curriculum. Well, whether or not you encounter that book in school at whatever level. I’m glad that you encountered it on this podcast this week because it is such a great reminder of the unbelievable interconnectedness of our world economy.
Lippmann was writing that in 1937, we are even by far more dependent on each other. I don’t just mean you and me, dear listener. I mean every country and every other country in this world, every person working a job, dependent upon, in some ways, collaborating with without even knowing it, every other person in the world. That’s why one of the best antidotes to war is simply trading with each other, even if you don’t like the other guy across the border, making a point of working together and trading benefits all of us and interconnects us in a way that is so beneficial for the future of the world. Walter Lippmann was writing about, I think, planned economies and what a bad idea those were, and indeed, they were. They are very bad ideas. You really can’t plan to make that breakfast appear on that gentleman’s plate in the way that it happens, in the way that happens for you and for me every single day over the course of a year. You can’t plan for that, but you can be enamored of it. You can be amazed that we have progressed conscious capitalism to the point that that is not just possible, but indeed something you and I take for granted. Just about every day of the week.
You can follow me @DavidGFool on Twitter X. I don’t tweet out that often. I try not to over use social media, but when I find good stuff, I like to forward it back out. Thank you again to Walter Lippmann, Daniel Smith, and Matt Ridley, as it took three people for that line to make it from there to me to you this week. Onto one more tweet. Tweet number 4, this from Chasom @chasom. Hi again, David. Just listen to this week’s Rule Breaker Investing Podcast. This mind bending star track, the next generation past president and future image came to mind. Wonderful episode. My wife and I both enjoyed it so much. Well, Chasom is referring to my conversation with neuroscientist David Eagleman and some of the futuristic elements that we enjoyed together. We discussed time travel a couple of weeks ago, among other things. Chasom you referenced The Star Trek: The Next Generation episode. Chasom you included an image. Now, I’m pretty sure I would have seen Star Trek: The Next Generation episode, but a long time ago. I know this is a classic but it’s an image of Data.
Now, Data, of course, how does Wikipedia characterize Data? Here we go.” A self-aware sapient, sentient, and anatomically fully functional male Android. Played, of course, by Brent Spiner, and in movies, as well. Data, one of the iconic characters from the Star Trek Uv. You included an image of Data, looking back at himself, looking at another image of himself. I needed to double check this. This one’s for Star Trek fans. You may remember. I needed to be reminded Time’s Arrow, Part 1 and Part 2. This is a two-part story.
The crew of the USS Enterprise investigates the discovery of Data’s severed head in a cave. Which turns out to be over 500 years old. The plot involves time travel, where Data ends up in 19th-century Earth, leading to interactions between different versions of himself. The episodes explore the paradoxes and complexities of time travel as Data’s present self encounters his own future and past circumstances, making it a memorable and intricate story in the Star Trek universe. Just for the record, Season 5 of Star Trek: The Next Generation, the finale was times arrow Part 1, and it all concluded with the opening of Season 6, which was Time’s Arrow, Part 2.
There we go. Homage to Data to Star Trek: The Next Generation, and to you, Chasom and miss Chasom for taking the time to remind me, remind all of us of a great couple of episodes. Yes, I’m definitely a trek in a long running Star Trek series. I do want to reference, again, some of the questions I got to ask, David Eagleman. For those of you who may not have gotten to listen to my conversation two weeks ago, I entice you with what I got to ask him on our buy sell or hold segment. Now, long time listeners will know that I did it, once again, with every author this month, I love with my interviewees to play the Motley Fools longtime buy sell or hold game where I asked not about stocks, but things, if they were stocks, would my interviewee be buying, selling, or holding that thing. Buying, meaning he or she agrees with it, selling probably disagrees with it, or holding has further thoughts. Here were the five topics that I asked. I’m not going to give his answers.
You’ll have to listen to that podcast, but my first one was buy seller hold time travel. That humans will ever, in any way somehow unlock that. The second was the idea that neuroscience will eventually allow us to completely map out and hack the brain, which would enable us to alter memories and emotions or personality traits at will. That was number 2. Number 3, the ultimate disruptive innovation for the transportation and travel industry, teleportation by seller hold that it will be developed in the next 250 years. Few more, the belief that dreams are a window into alternate realities or parallel universes buy sell or hold, and that there are people living on Earth today who will live more than 200 years buy sell or hold. The last one, the concept of digital immortality, uploading human consciousness to a computer or the Cloud to live on after physical death. Buy sell or hold. What I really appreciate is that David Eagleman took on each of those directly and gave a pretty convincing straightforward answer to each of them.
Again, part of what I’d like to do on mailbags is entice you to go back and listen to an episode if you missed it. Chasom, you certainly got it and you reacted with your time travel data image. But for anybody who may have missed it, that was maybe maybe my favorite buy seller hold ever just earlier this month with an author in August. There you have it. Four hot takes from Twitter X. Understandably, by the way, there are no mailbag items or tweets about my deep dive into games with CT and Wen earlier this week because we recorded this episode, the one you’re listening to right now earlier this week before we even published out that podcast, again, because of the contingencies of a cancellation and rescheduling. I have a Rule Breaker mailbag item. It’s item number 1.
That’s what we’re doing this week, and it’s from longtime Fool Adam Nelson. Adam wrote me on August 19, two weeks ago, I am so wildly flabbergasted. To hear about an author, speak about a course in miracles on any Motley Fool podcast. Positively, let me clarify that. My gratitude that John Mackey was so candid about this and that it was so profound to him. It’s just still seemingly difficult to comprehend, writes Adam. But, hey, this is what synchronic events are supposed to look like. I guess. Anyway, I felt compelled to share, and this one episode has really cemented me in coming back to these episodes, just as much as I love Motley Fool Money and round table. Thank you. Adam Nelson. Well, let me say back, first of all, Adam, you were so welcome.
Second, I’m not familiar with a course in miracles that material myself, but I love how John put that out there. Along with two book recommendations, which I mentioned earlier, Ethics and Excellence by Bob Solomon and a theory of everything by Ken Wilbur. I view my role on this podcast to put my fellow Fools in touch with the best ideas, the best people, the best actions that I’ve come across. Not every author in August, not every investment idea of my own is going to be right for every listener. I’ve always counted on my fellow Fools to pick out on their own and choose what for you is the best, most applicable Rule Breaker-isms for you to follow or at least to try out. In fact, testing and learning is something I probably don’t talk about enough, but I highly recommended. If you come across a new idea or an old idea that’s new to you or an old book that’s new to you. You tried on. Tried on for size. Make an extra buy in your portfolio, or try that technique out at work or wake up with it at home next weekend, and give it a try. Most of the ideas I’ve chosen to follow over the course of my life, I’ve done so by testing it out first and seeing how it felt. Whether it worked. I feel like I hit you up, dear listener, with literally thousands of thoughts and ideas from this podcast just in any given year. We’re now into our 10th year, I love exploring new terrain.
The greater the Island of knowledge, the longer the coastline of mystery, one of my favorite lines attributed to Archbishop William Temple, former Archbishop of Canterbury, the greater the Island of knowledge, the longer the coastline of mystery. In many ways, Rule Breaker Investing is a variety show from one week to the next. We do some recurring things cause I love traditions. Thank you again, Authors in August.
A lot of what recurs is the latest update or episode in one of our long-standing series. I can rattle some of them off alphabetically right now. Blast from the Past, Campfire Stories, Essays from Yesterday, Games, Games, Games. Got to know the Lingo. Great quotes. I Fought the Law and the law won the Market Cap Game Show, Mental Tips, Tricks, and Lifehacks, and the list goes on. In fact, none of these series was planned or in place when Rule Breaker Investing launched as a podcast in July of 2015. I had never heard of or thought of a Market Cap Game Show. Every one of my dozens of recurring episodic series simply came about as a kernel of an idea. Sometimes, one suggested by one of you. That we tried. It felt good. It turned into a thing. We reified it with a name and a purpose, and we made it recur. Wicked is among my favorite musicals. I know there are some mega fans listening to me right now and others who’ve never even heard of this Broadway smash hit, which retells the story of The Wizard of Oz, but with a completely different take on the so called Wicked Witch of the West. Anyway, here at the end of this podcast and of this month, and yes, during a holiday weekend, as well, I want to celebrate one of Wicked’s best songs because it summarizes what I’ve just said and how I think about this podcast and investing in business. It’s called Dancing Through Life. Indeed, there’s some positive intelligence laced into this. Just some of its lyrics, dancing through life, mindless and careless. Make sure you’re ware less trouble is rife. Woes are fleeting. Blows are glancing when you’re dancing through life. Fool on.
