December 25, 2024 • 58 mins
From a preschool teacher newly inspired to invest at 73 to a lifelong Fool whose Microsoft shares became a 500-bagger, this year-end Mailbag brims with transformational stories. Listeners wrestle with rebalancing versus “never sell,” explore “layering in and out” of big winners like Tesla, and reflect on optimism as both delicate and powerful. David highlights multigenerational lessons—like gifting You Have More Than You Think to a nephew-turned-advisor—and celebrates that it’s never too late to start making smarter, happier, and richer choices. This holiday season, embrace the joy of learning from each other, fueling a Foolish momentum into 2025.
Host: David Gardner
Producer: Desirée Jones
Companies mentioned: AMZN, CSCO, MELI, META, MIDD, MRK, MSFT, NFLX, NVDA, RCL, SBUX, SHOP, SQ, TMDX, TSLA, WM, WMT
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Once you get tothe end of things,
it gives you a perspective younever could have had because
you needed to get to the end ofthe story in order to see what
happened and then to reflect moreknowingly on what went before.
That's what happens for me everyyear right around this time.
We made it to theend of another year,
twenty twenty four.
You can look back on it now.
(00:21):
You saw all that happened,all the good, all the bad,
all the fair to Midland.
And so we now have theprivilege of perspective.
What you simply couldn't havehad about twenty twenty four,
fifty two weeks ago.
We can now, all of us,see the whole thing.
Zooming out one level, wecan now engage in what I call
(00:41):
portfolio level thinking.
So here we are at the end ofit all, twenty twenty fourth.
This is the last Rule BreakerInvesting Podcast of this year.
Next week's episode appearsas always Wednesday four PM,
but next Wednesday is Januaryfirst twenty twenty five.
So here's my question for you.
What three lessons will youtake away from twenty twenty
(01:04):
four personally,professionally, culturally?
And with whom will youshare those three lessons?
Here at the end of it,twenty twenty four,
we will close things outas we do every month.
At this time, it's your mailbag onlyon this week's Rule Breaker Investing.
(01:24):
It's the Rule Breaker Investingpodcast with Motley Fool
cofounder David Gardner.
Welcome back to RuleBreaker Investing.
And for those whocelebrate, Merry Christmas,
Happy Hanukkah, Happy Kwanzaa.I know I'm missing some others.
It is a special time of theyear for so many of us for a
motley number of reasons.
(01:45):
Of course, religiouscelebrations
often come to mind, butit's also the end of a year,
and we're getting ready forthe start of a new year.
It is a momentous timeand I was listening back
to my mailbag last year at thistime and I said and I quote,
and maybe just maybe in twentytwenty four the stock market
will do as well asit did this year.
(02:06):
Where it was a niceyear of bounce back,
the S and P five hundredwas up twenty percent plus.
I said, I'll take that every yearlast year and concluded by saying,
and hey, I think themarket's going up next year.
Well, those who know my markettiming challenge each year where I
make a prediction about wherethe market's headed for the
year ahead will know that I getit right more often than not.
(02:27):
And why? Because I saythe same thing every year.
I think the market's goingup next year, which I do.
But I was certainly delightedto reflect back and think how
strong the S and P five hundredand really so many of our rule
breaker stocks were in twentytwenty four coming off of what
was already a very goodtwenty twenty three.
Admittedly, coming off of what was ahorrendously bad twenty twenty two.
(02:50):
So there was some paybackin this bounce back.
But as I record this mailbag,which is recorded on Monday,
December twentythird, at this moment,
the S and P five hundred isup twenty three point seven
percent for this year.
It has been a phenomenal yearfor Rule Breaker investors,
and I trust we'llhave a happy new year.
Looking back on the month thatwas December twenty twenty
(03:12):
four, we did threepodcasts before this week.
The first was Games,Games, Games volume six,
where I brought you my annualtabletop gift guide with
thirteen handpicked gamesranging from lighthearted party
favorites like That's Not a Hatto immersive experiences like
Ticket to Ride Legacy.
I'm always shooting for the rightblend of accessibility and depth,
(03:35):
so I do hope and I do believethat volume six a few weeks ago
offered something for everykind of gamer while continuing
a beloved foolishholiday tradition.
Well, beloved by me, at least.
The first week of Decemberevery year, games, games, games.
Speaking of games,
I'm excited to be welcominggame designer and game
publisher, Jamie Stegmaierof Stonemaier Games.
(03:58):
Jamie will be joining me at somepoint early in the new year.
We talked about how much fun it wouldbe to do another podcast together.
I had him on years ago totalk about how good he was at
Kickstarter and how meaningfulKickstarter was becoming in
many ways, but we were talkingmainly about board games.
Well, Jamie has gone on to continueto be a fantastic entrepreneur
in the board gaming spaceand a full fan as well.
(04:20):
And I'm certainlya Stonemaier fan,
so I'll be delighted towelcome Jamie Stegmaier to Rule Breaker
Investing early in the new year.
Week two was, of course, thebesties of twenty twenty four.
A heartfelt look back at the yearthrough some of the, I'd say,
the most meaningful andmemorable moments from this
podcast, Rule Breaker Investing.
We revisited conversationsthat sparked optimism.
(04:43):
We celebrated the foolishvalues of learning and growth.
And I even got to update myreview of Palooza Ultima podcast,
which I did earlier this yearin ten and a half chapters.
I got to update the performancenumbers of all my five stock
samplers as well.
The timely and the timelessall came together in that one.
The stars were aligned.
(05:04):
They were all back, and Ihad so much fun with the besties.
And then, of course, lastweek, speaking of fun,
the Market Cap Game Show,
December twentytwenty four edition,
a festive holiday mix of foolishfun and friendly competition.
Emily Flippen delivering adominant victory over Mac
Grier, but forget thenine to one score.
By the way, did you did you,dear listener, outscore Emily?
(05:26):
Did anyone?
What I'll primarily rememberwas the combination of sharp
insights and lively banter.
I had so much fun lastweek. I hope you did too.
Emily, by the way, by winning,
took the fourth and finalseat of our final four for the
coming March market cap madness.
All market cap game show allmonth long as we determine our
(05:47):
next world champion.
Our final four arefixed now, Andy Cross,
the returning world champion.
And then Bill Barker,Matt Argosinger,
and Emily Flippen.
So I don't do a lot of betting.
I don't recommend most peoplespend any money at all on
sports betting which is zerosum and you'll always lose over
time if you put a lot ofmoney down sports betting.
(06:08):
But if you're gonnabet on one thing,
one competition next year, itmight be worth, I don't know,
maybe a Las Vegas line onAndy's chances of repeating
next year as world champion.
It's all coming to youin the month of March.
I'm already lookingforward to it.
Well, a few hot takes from socialmedia for this month that was.
Got three for you this time.
(06:29):
The first is from my friend,Jum at Jummy underscore Bear.
Bear spelled with thenumber three, Leetspeak.
Jum tweeted out, wow.
What an honor to be a partof this amazing community.
Great to hear updatesfrom our good company.
Jum was referring, of course,
to our look back at the yearthat was through the besties of
twenty twenty four.
One of my favorite parts ofthat episode a couple weeks ago.
(06:51):
It's a long episode every year.It's kinda like the Oscars.
It's a grand show, andit always goes over an hour.
And I dedicate the last tenminutes or so to checking back
with each of my one hundredthmailbag podcast guest stars,
John being one of them, andthat's what she's reacting to.
She also calls out EricDeVore for his theme music.
(07:13):
John, you said at Eric DeVore,
your theme music gave me chills.
None of these can happenwithout you and David g.
Fool and the at RBI podcastteam, my producer, Des.
Thank you, John.
I really appreciate that,
and it was an honor to bepart of that good company
myself and to show it off in ourbesties of twenty twenty four.
(07:34):
Tweet number two, this onecomes from at SemVerbic n l.
Sem, a long time fool. I'vehad him on this podcast.
He's the first professionaltennis player I've ever had on
this podcast telling his storyas an athlete and as an investor.
And, Sem, I appreciate you reflectingon last week's market cap game
show with this tweet.
Sam said, have been looking forwardto these market cap game shows,
(07:57):
he means, every threemonths for four years now.
Manifesting being acontestant one day.
Market cap game show, hesaid analyst versus listener.
And I think Sam is suggestingthat it might be fun to have
somebody who's not aMotley Fool employee.
Last week, we had somebody whowasn't a Motley Fool analyst for the
(08:18):
first time, long time radioproducer for us, Mac Greer,
who I've known fortwenty five plus years.
Such a joy to work with,
but Mac does not study stocksevery day for a living.
He does productionstuff around the fool.
Sam's suggesting it might befun to have somebody who's a
listener compete in themarket cap game show,
and I think Sam isself nominating now.
(08:39):
Sam just won the Dutch nationalchampionship as a doubles
player just days ago, I think.
So first of all,congratulations to you at Sam
Verbeek NL.
And I think it might be fun tosee if we can work it so that
you're traveling to Alexandria,Virginia where Fool HQ is.
The very same week, we recorda market cap game show.
(08:59):
And so if we canmake this happen,
I'm in on it on my side as well.
Sam, let's manifest perhaps ourfirst ever analyst versus listener.
Maybe we make thathappen next year.
And the final tweet I'llmention is from my friend Jason
Newman at j new four.
Hard to imagine having morefun with numbers than this.
He's referring to lastweek's market cap game show.
(09:21):
Best wishes, flippin underscoreemily and at r b I podcast.
Please, please, please getmore Mac Greer in our lives.
That is all. And thankyou for that, Jason.
And in fact, I tweeted outa picture of Emily, Mac,
and me just minutes afterwe finished that podcast,
(09:41):
blowing bubbles, celebratingEmily's impending marriage.
She got married, went down to thecourthouse just an hour or two later than
the market cap gameshow last week.
So a special moment anda fun pick tweeted out.
By the way, you can follow meon Twitter exit at david g fool.
This podcast isat r b I podcast.
Okay. Enough for Twitter x.
(10:03):
Let's move on to six mailbag itemsfor December of twenty twenty four.
Alright. Rule Breaker Investingmailbag item number one.
I just mentioned JasonNewman. Featured his tweet.
Also featured him as partof our very good company.
One of my favoritelong time fools.
This is, I think,
the first time we've evergotten a mailbag item written
(10:24):
by a good friend's aunt.
Phyllis Hoffman, thank youfor this beautiful note.
Dear David, I just finishedlistening to your latest
podcast, The Besties,
and was so pleasantly surprisedto hear you read a letter from
my wonderful nephew,Jason Newman.
As you know, Jason has been an avidMotley Fool fan for a long time,
and I wanted toshare some history.
(10:45):
I don't recall all thedetails, Phyllis writes,
but I do recall the highlightsand lessons learned.
I began either listening to youor reading a newsletter or some
such publication of The MotleyFool at least twenty five to
thirty years ago.
I was quite impressed andexcited to learn about
financial issues as I wasthen a youngish adult.
(11:08):
Sadly, I was not myselfdisciplined or wise in future
planning, financialor otherwise.
But I was smart enoughto know that your book,
The Motley Fool's You Have MoreThan You Think would be a great
college graduation gift,
or perhaps it was a birthdaypresent for my nephew, Jason.
Jason, being a wise one,
(11:29):
did read your book andfollowed it wholeheartedly.
What was the outcome of that?
Jason is now myfinancial advisor.
He's doing well, and I'mstill working full time as a
preschool special education teacherat the age of seventy three.
I know that working is not bad,
(11:49):
and teaching these childrendoes keep me moving and often
smiling But I continueprimarily because I did not
save or invest for retirementAlmost every financial move I
made, few as they were,
was not a good oneuntil I recently started
talking about myfinances with Jason.
(12:10):
Though late in life to start,
I'm finally investing thelittle I can each month,
and I am out of debt.
I have you and Jasonto thank for that.
I just recently startedlistening to your podcast,
Rule Breaker Investing, andI'm thoroughly enjoying it.
You're such a good communicatorand conversationalist.
Your advice, perspectives,and insights are unique,
(12:32):
and always welcome.
Next up for me, after listeningto games, games, games,
I'll be buying a new gamefor my sister, Jason's mom,
and me to play.
Thank you for this and whatyou've done for my family.
Sincerely, Phyllis Hoffman.
Well, what a lovely note,Phyllis. Heartfelt, authentic.
(12:54):
What a good thing you did to makethat gift as you did years ago.
But I really wanna highlightone part of your note and just
think together about it briefly.
You said almost every financialmove I made, few as they were,
was not a good oneuntil I recently started
talking about myfinances with Jason.
(13:15):
And it reminds me, Phyllis,that we are our choices,
and that includes theconversations we have and who
we spend time with.
I've often thought about whatsocial creatures we are as
human beings and that youwould socialize with Jason your
finances and where you wereis such a great sign for your
(13:36):
future financially that you reachedout to the person that you had helped,
that you'd given a hand up to thirtyyears ago with the gift of a book.
And boy, I'm so glad for allof our Motley Fool books.
I'm so glad that they've reachedpeople and helped over the years.
One really fun thing now atthe age of fifty eight is to be
here thirty years later withyou and see what seeds were
(13:56):
planted and what what'shappened in the world as a
consequence of our book You HaveMore Than You Think as an example.
But that you shared it withJason reminds me of how best to
succeed in life and that includesour New Year's resolutions.
You wanna lose weight?
I would say hang out withpeople who are losing weight.
You wanna see thebright side of life?
(14:17):
Surround yourself withpeople who radiate positivity
and intelligence, and yeah,you wanna be better with money?
Spend time with people whosave more than they spend.
As one example,
There's this phrase dog eat dogworld which I've never liked
because by the way,dogs don't eat dogs.
Dogs by nature are social animalsthat exhibit pack behavior.
(14:41):
Cooperation and social bondsare essential for survival.
So, yeah, dogs show aggressionand disputes over territory or
social rank or even food,
but the idea of dogs eatingeach other misrepresents their
natural behavior and thatsame misrepresentation
occurs in viewing life andbusiness for those who do so
(15:01):
thinking it's zero sum.
Stick with me just a bitfurther on this point because
humans, like dogs, we'resuch social animals.
We thrive on cooperation,social hierarchy, and bonds.
And even in justbusiness itself,
people often say business isgreedy or it's win at all costs.
This is itself ismuch more cooperative
(15:24):
than competitive.
Many companies regularlycooperate with their
competitors in order to deliver theproducts and services that they serve up.
So companies are using anamazing amount of collaboration.
It's very evident to anybodywho works in business to get
you that avocado on yourdish at the restaurant.
Hundreds of handsare usually involved.
(15:44):
So I just wanna call out thebenefit of having conversations
with people about money,
and I love that you gave himthat hand up thirty years ago,
then you reached out and he'sgiving you a hand back up now
and I congratulateyou on where you are.
It's never too lateto start investing
and small consistent actionscan still make a big difference.
(16:07):
So to Jason's aunt,to Jason himself,
but mainly to Phyllis Hoffman,
I say full on andgame on. Love it.
Alright. Onto mailbagitem number two.
This one, two stockquestions from Matt Cohen.
Thanks for writing in.
Matt, greetings, David.
I have a couple of questions forthis month's mailbag edition.
Number one, how much of a mistakewas your sell recommendation
(16:31):
for Royal Caribbean Cruise Line,ticker symbol r c l,
in Motley Fool Stock Advisor,
which you made on Decembereighteenth of two thousand eight?
That was, Matt writes, threemonths after the financial
crisis, really threemonths into well,
somewhat well into at thatpoint the financial crisis.
Anyway, was that one of thoseinstances where you couldn't see much
(16:52):
beyond the dark clouds ofthe great recession, Matt writes?
From what I can see,
RCL share price has sixx since you recommended
it that first dayin Stock Advisor,
September twenty firsttwo thousand seven.
So Matt's pointing out, Isold it disconsolately a year later
having lost quite abit in that one year.
(17:12):
And yet, have we just heldfrom the original price,
it would be up sixtimes in value today.
So, yeah, let me just tackleyour first question, Matt.
Let's briefly reviewRoyal Caribbean.
It was at forty in two thousandseven when I recommended it.
By two thousand nine,
it had dropped belowfive dollars a share.
(17:33):
In two thousand twenty, sothis is eleven years later,
it was at a hundredthirty to start the year,
the COVID year of twenty twenty.
And, yeah, as everything shutdown including cruise lines,
just in that year alone,
Royal Caribbean went from onehundred thirty to twenty five
two months later.
(17:53):
Fast forward to this year,
it started this yearat a hundred twenty.
And right now, aswe close the year,
it's somewhere aroundtwo hundred forty.
Those are simple round numbersbecause having picked it first
at forty in two thousand seven,
we can see with it at aroundtwo hundred forty today,
it is up six times in value.
By the way, the S and Pfive hundred over those same
(18:15):
seventeen years upfour times in value.
So Royal Caribbean up six timesin value while beating the market.
So to answer yourquestion, Matt, yes.
I do regret my sellrecommendation for Royal
Caribbean Cruise Line atthe bottom of the financial
great recession, Decembertwo thousand eight.
And it isn't the only selldecision mistake that I've made
(18:38):
as an investor.
ARM Holdings for long timestock advisor members,
they'll remember that oneas well, stock I sold,
and then it went upseven times in value.
So I think that the keytakeaway here is I try not to
make this mistake too often.
Part of the reasonI can, I think,
count on one hand the number oftimes I've done this in Stock
Advisor is is becauseI mainly hold?
(19:00):
And it's it's only rare momentswhere I decide something is
just not gonna work outand I decide to sell it.
I'm not a never sell investor.
I don't think anybody shouldbe a never sell investor,
but Matt and Fools Everywherewere much more rewarded by
holding on to things.
And while Royal Caribbeanexperienced incredible stress
for its business, especiallyduring twenty twenty,
(19:20):
we can see even the benefitsof just holding out.
Again, it started twentytwenty at a hundred thirty.
Today, it's two hundred forty.
That includes
COVID, which is a shockingsystem shock shutdown for an
entire industry, actually,for many industries,
cruise lines involved.
And so, again, we see thestrength and resilience
(19:41):
of great companies and also ofthe stock market and the S and
P five hundred and conscious capitalismin this country and worldwide.
So I think that's whatI'd wanna underline, Matt,
is it worked out.
And I'm sorry to say,
I took stock advisormembers money out of it.
We didn't get to enjoy thatunless somebody went back in.
And if you did,
good on you because I think itis a company that's worth being
(20:03):
invested in for along period of time,
certainly more thanone really horrific
GFC year.
Your other question, Matt, isabout a relatively new company.
Matt writes, one of the stockswhich has been recommended in rule
breakers since I retiredfrom stock picking is TransMedics,
ticker symbol TMDX.
What do you thinkabout TransMedics?
(20:23):
Have you ever consideredtaking a start up position?
The business is definitelyseeking to solve a migraine
level problem, Matt writes inthe field of organ donations.
Well, thank you forasking about that.
And while I haven'tstudied TransMedics very closely at
all, I'm lightlyaware of where it is.
Many people listening to us right nowprobably never heard of the company,
(20:44):
but avid rule breaker investorswill probably recognize ticker
symbol TMDX in thiscompany, which, by the way,
leads the cutting edge organpreservation and transport space.
So in a world where organdonations mercifully and
blessedly are made, companiesthis company anyway,
is a leader in making itpossible for you to store that
(21:05):
organ that you've donated andthen make sure it's transported
safely and effectively to thehospital where it's gonna be re
implanted in somebody else.
So TransMedic is a leader andit's obviously a good thing
that I esteem for the world and that'soften where I start with investments.
But I'm not gonna fullyanalyze this one, Matt,
because it wouldn't be fair.
I haven't spent alot of time with it.
(21:26):
I will remind you though of thesix traits of the rule breaker
investor and maybe asentence as to each.
Just reminding you that that'show I look at the world.
I look at stock market investingthrough the six traits.
And the first one I'vealready spoken to,
top dog and first mover in animportant emerging industry,
and I would say TransMedics iscertainly a top dog and first mover.
(21:47):
A question might be howimportant it is this industry?
What is the totaladdressable market?
I'll leave that forothers to answer,
but that's an importantquestion that I would ask.
The second trait of rulebreakers is that they have a
sustainable advantage.
And this company does havea proprietary technology.
It has FDA approvals around it.
So I I think that's a defensiblemode in a growing niche.
(22:08):
So I think that's a that'sa good sign for TransMedics.
The third is strongpast price appreciation.
And I'd have to say while thisstock has had quite a run a run
up in recent years,
it isn't exhibiting strong pastprice appreciation right now.
It has after a very tough fall.
It has lost two thirds of itsvalue in just the last few months,
(22:29):
and I think that's probably inpart why you're asking about
this company, Matt.
It is just a two billion dollarmarket cap at this point.
So that's a that'sa small cap company.
So just pointing out strongpast price appreciation is
something I like tosee, and right now,
I don't see it there.
Number four, good managementand smart backing.
I don't know much about founderand CEO Waleed Hassanain,
(22:51):
but I think he is I thinkhe does have deep medical
expertise and I I would befocused very much on assessing
what I thought of that individualand the team around him.
So I think that, you know,
behind every great stock is agreat company and behind every
great company are great people.
And that is always my questionfor any company I'm looking at.
Is this somebody that I havehigh esteem for that I think
(23:14):
will lead a winning company andwin on the stock market as well?
The last two traits are ofcourse strong consumer appeal.
Does it have raving fans?
And then the last one is,
is it widely perceivedas overvalued
by by the media or by peoplewho like to say that's a
nosebleed valuationon that company.
I want to see that.
That's a good sign forrule breaker investing.
(23:35):
And again, I'll leave it to youto think about those questions and
answer them yourself.
But in closing, that's how I continueto look at companies even though I'm
not spending as much time these daysresearching one company to the next.
I use the exact same frameworkthat I've used for thirty plus
years that has helped me findso many great stocks and hold
them over long periods of time.
If you are a shareholder,I wish you the best.
(23:57):
I think our Motley Fool RuleBreakers team does esteem this
company, but I'm notactive on the team,
so I can't speak to that.
Alright.
On to Rule Breaker investingmailbag item number three.
This one writing in fromGermany again, Andreas Hamm.
Andreas, great to hearfrom you. Hi, David.
I listened to the NovemberMailbag and wanted to share
thoughts on how, quotes,never rebalancing
(24:18):
could leave gains on the table and testour ability to think exponentially.
Andreas goes on, let'shave some fun with math.
If stock a is aone hundred bagger,
how likely is it to becomea two hundred or three hundred
bagger in five years?
And what you're essentiallyasking with that question,
Andreas, is you're asking,
how likely is that stock to doubleor triple in the next five years?
(24:42):
And I would say most stocks arenot likely to double or triple
in a five year period.
Although, obviously,
we found some that do and thoseare some of my favorite companies.
You go on, is it less likelythan stock b becoming a ten
bagger over thosesame five years?
And, of course, since we're speakingin terms of stock a and stock b,
we're not filling in anycorporate names or ideas here.
(25:04):
We're just talkingmathematically.
So Andres goes on, if so,
if if stock b were tobecome a ten bagger,
shouldn't I investmore in stock b?
For example, if I sold halfof my stock a and invested in
stock b and stock bbecame a ten bagger,
that's a compoundedfive hundred bagger.
(25:24):
Meanwhile, stock a might double ortriple giving a combined six to six
hundred to sixhundred fifty bagger.
Andreas goes oncontinuing his math.
Should I prioritize the odds ofstock a doubling versus stock
b becoming a ten bagger.
He concludes no companydominates forever.
There are strategicmisalignments, monopoly
(25:44):
accusations, competitioncan dethrone leaders.
It happened with Intel in CPUs.
It could happen toNVIDIA one day in GPUs.
This is why we should neitherfully avoid rebalancing nor
always rebalance.
Instead, decisionsshould have context,
balancing past performancewith future opportunities.
Mistakes happen by CEOsand investors alike.
(26:07):
We should react to errorsand act on opportunities.
Doing nothing?
Andreas says, doesn't feelcapital f foolish to me.
I hope this adds a nugget ofvalue for the full community as
we start twenty twenty five.
Fool on, Andreas Hamm.
Well, first of all, Andreas,thank you for writing in.
And I agree thatalways by the way,
(26:27):
words like always and neverdon't make for great outcomes.
I'll talk about rebalancinga little bit later,
but I'm not an alwaysinvestor or a never investor.
I think we shouldhave our minds open.
And I can certainly see yourpoint about how a huge winner
with a huge marketcap because after all,
when a company goes up ahundred or more times in value,
(26:48):
usually it's gonna be a large capat least if not a mega cap company.
And that thatcompany at that time,
after that big of a runcould begin to offer less potential
for future growth than let'ssay a promising mid cap or
small cap stock.
You know, as an investor,
I'm always looking not justat an individual company,
(27:10):
but I'm doing what you'redoing here in this note.
I'm looking at my portfoliobecause we can use our rule
breaker stock traitsto find stocks,
and we can use our habits asinvestors to do things like
hold on to them, letyour winners run high, add up,
don't double down, those kindsof habits that I talk about.
But ultimately, when you use yourhabits and multiply them times your
(27:34):
stocks, you end up with what?
You end up with a portfolio.
And this kind ofportfolio level thinking,
I talked about that atthe top of the show.
It's appropriate at the end ofthe year to start looking back
on the whole year.
It's always appropriate alsoto look at your whole portfolio
and that's part ofwhat you're doing here.
And at least for me,
principle number four of mysix Rule Breaker Portfolio
(27:56):
Principles.
Principle number four where youestablish your sleep number is
gonna be very instructive forhow to manage a portfolio that
has a hundred bagger.
Because what I'm saying withthat one is very simply don't
allow any stock to grow tosuch a large percentage of your
portfolio that you'relosing sleep at night.
So establishing yoursleep number means,
(28:16):
what is the number that I wouldallow my largest holding to
become as a percentage of myoverall pie of my whole portfolio?
How how large would Ilet that slice become
and still be able to sleep?
And I've used examplesof this in the past,
I'm not gonna gotoo deep on it here,
but let's just give a quick one.
If that number were tenfor you, for example,
(28:37):
if you wouldn't want yourportfolio to ever allow a
single stock to be worthmore than ten percent of your
portfolio, then ifyou have a hundred
bagger, assuredly, you will beselling that multiple times in
a later mailbag item.
This podcast, I'll speak to this alittle bit more because it comes back up.
But basically, we're probablyselling portions of huge
(28:59):
winners anyway if they're gonna goup a hundred or more times in value.
Maybe you'redonating the shares,
a nice thing to dothis time of year.
People often think charitablyas we near the end of the year.
That's a great way to donate.
Give shares ofappreciated stock.
I've leaned on thata lot over the years.
So while I appreciate themath that you're taking us through,
I think that there are a bunchof contextual questions each of
(29:21):
us has to ask looking uniquelyat our unique portfolio.
That's that's why it's hardfor me to speak prescriptively
around something like this.
As I close this one out,
I wanna remind all of us aboutthe tax consequences of selling.
If you do have a big winner,
you're gonna bepaying a big tax bill.
And by leaving thatmoney invested instead,
at least in our country,
(29:42):
you have a hundred percent ofyour money instead of getting a
twenty percent or socap capital gains tax,
which causes you to bereinvesting less money in that
stock b in your example.
So if you really stickhard to the math,
you have to think throughthe tax consequences.
I also wanna say that whenyou've let a company go up a
hundred times in value, you probablyknow it really, really well.
(30:03):
Probably a lot better stock ain your example than you would
know stock b.
So I do wanna remind you thatfamiliarity can be a real strength.
You get to know companies muchbetter when you're holding them
than when you're thinking aboutbuying them at earlier stages.
There's a measureof safety there.
Also, when a company getsvery large, it becomes safer.
It has a larger balance sheet.
(30:25):
It's recognized as veryimportant to its economy when
it's that that big.
I'm not gonna say too big to failbecause I don't like that phrase,
but companies become highlyhighly relevant like let's say
Amazon dot com ishighly highly relevant.
It's very very important toour economy both I would say
domestically here in the USand globally in many cases that
Amazon becomes important in away that a small cap stock b
(30:47):
can't at that stage.
So there are just alot of thoughts here.
I wanna close with this onethough about rebalancing
because you mentionedthat and you know,
I often talkagainst rebalancing.
In this context, many investmentadvisors and much of the regulated mutual
fund industry, whenfacing imbalance,
do have to rebalance.
(31:08):
And that's the practiceof just automatically selling positions
that have risen in order toreinvest the proceeds into
those that have fallen.
So that enables variousinvestment instruments to to
achieve their objective,to fulfill their charter.
They have to remain wellbalanced across their holdings,
which means on a periodicquarterly or annual basis,
(31:30):
they are selling their winnersand reinvesting the proceeds
into their losers.
What Peter Lynch famouslycalled watering their weeds and
cutting their flowers.
By the way, I think that's gotten to besomewhat of a tired analogy at this point.
That's why I proposeI don't know.
Let's go with the horse racinganalogy here, a new one.
I think in investing, especiallyfor rule breaker investors,
(31:51):
we should be backingour thoroughbreds
and retiring our also ran.
That's how I think aboutproper portfolio management.
I'm not a fan of selling off ourwinners to add to our losers.
And by the way, no wonderso many investment funds and
advisers broadly underperformthe market averages.
They are regularly rebalancing.
(32:14):
Now keep in mind, oftenthey have to by law.
They're required to maintainvast diversification,
which means they have to selloff their winners and reinvest
into their losers.
But good news, Andreas, as anindividual investor, you and I,
we can manage our own portfolio.
We don't have to genuflectat the altar of rebalance.
So backing our thoroughbredsand retiring our also rands,
(32:37):
letting our winnersrun, And as you say,
also staying open tonew opportunities,
that's what we'reall in search of.
So there are somethoughts and reflections.
I don't have a firmanswer either way because I don't
think it's possible to give one.
I I love math and Iappreciate that math is often hard edged.
It's right or it's wrong.
(32:57):
Green check mark, red x next toyour math answer on your math test.
But in this case, we're nottalking about the actual math.
We're talking about the contextaround our portfolios when we
exhibit here at the end of twentytwenty four portfolio level thinking.
And thank you for takingus there. Alright.
Onto rule breakermailbag item number four.
(33:18):
This one from frequentcontributor, Lisa Wharton.
Lisa, always a pleasureto hear from you.
She starts, dear rule breakers,
I'm incredibly honored to be arule breaker poet due to David
having read my poems at leastfive or six times on this podcast.
But I'm not just a fool poet.
I actually know a thingor two about investing.
I've been a Motley Fool member sincetwo thousand eight, and since then,
(33:39):
my portfolio has gained morethan two thousand percent.
That means your portfolio, Lisa,
portfolio level thinking is upsome twenty times in value over
the last sixteen years.
Thanks largely, she writes,
to the guidance of MotleyFool Stock Advisor and Rule
Breakers.
One of my standoutinvestments was Tesla.
Following Stock Advisor'srecommendation, I bought Tesla,
(34:02):
Lisa writes in twothousand twelve, and split adjusted.
It was just two dollars per sharelooking backward back on that day.
And I might have seemed like agenius with the Motley Fool's
help of course, but this journeywasn't without its challenges.
Holding such a volatile stock hasbeen an emotional roller coaster.
By two thousand sixteen, myTesla shares had ten xed and
(34:25):
the pressure tosell was immense.
People around me constantlysaid I was fooler small f to
hold on to such a risky company.
I resisted selling until someMotley Fool analysts marked
Tesla as a hold in Februarytwo thousand sixteen.
That's when I soldfifty percent,
although I held onto the other half.
(34:47):
Over time, I built myTesla position back up,
especially after Tom Gardnerre recommended the stock.
Now Tesla is mylargest holding, and Lisa adds,
I plan to keep itfor a long time.
I also bought Amazonin two thousand twelve,
Netflix in two thousand nine,and Nvidia in two thousand ten.
Made some mistakes along theway like selling forty percent
(35:09):
of my Amazon about seven yearsago and unloading much of
Netflix after it doubled.
I initially sold all my Nvidiashares in two thousand twelve
after they went nowherefor two to three years,
but I bought back in duringtwo thousand sixteen,
and I've been thrilled withthat decision ever since.
Despite thesemissteps, Lisa goes on,
(35:32):
my returns since two thousandeight have still exceeded two
thousand percent.
The key has been tolayer out gradually
rather than selleverything at once.
As time passes, the remainingshares have a compounding effect,
making earlier sales lessimpactful on the overall portfolio.
(35:52):
A recent conversation at my rowingclub illustrated this point.
A young man told me he boughtTesla shares in two thousand
ten even earlier than I did.
Unfortunately, he sold allhis shares after they doubled.
I've heard many storieslike this over the years,
underscoring the importanceof patience and strategy.
(36:12):
In investing, Lisa concludes layeringout and layering in is critical.
It's a strategy thathas served me well,
and I hope it could guide otherson their own investing journeys.
Happy holidays.Sincerely, Lisa Wharton.
Well, Lisa, I appreciate the overallpoints and the examples you gave as well.
(36:32):
I think it's quite amazing thatyou sold out of some of those
great stocks and yet not allthe way out in some cases and
got back in in some others.
I especially appreciate yourpoints about Tesla and how
emotional a stock, what a rollercoaster stock it has been.
Most hundred plus baggers,which is what Tesla's been for
me, will have those rollercoasters and they're not just,
(36:55):
I don't know, pricebased roller coasters.
It's not all about thenumbers of the math.
Lisa, you're speaking to theemotional toll that can take,
and I certainlyacknowledge that.
But staying investedand lessons learned from
stories like yours, you learnedit firsthand from Tesla,
but through this podcast,
you're sharing out lessons that othersare hearing and will learn from.
(37:16):
And I appreciate your pointabout layering in to use your
phrase and layering out.
What you're essentially saying is toomany people are all on or all off.
Things are black or white.There aren't any grays.
And yet, I don't thinkthat's capital f foolish.
I think it's great to beincremental with what we do.
When I do sell offa large holding,
(37:37):
often because it'sgotten too large,
I just sell it oftenbits and pieces.
It's not an all or nothing.
I also sometimes buy in thirds,
something I did in the earliestdays when we started The Motley
Fool with my original AOL stock.
I didn't feel fully confidentin the company at first,
so I took my money that Iwas gonna invest in it and I
divided it up in three.
And I invested itone third, one third,
(37:58):
one third over time tobuild more confidence.
So, yes, layering in andlayering out is a tool to
manage emotions and maintainthat exposure to great companies.
And yours is a story ofpatience and resilience.
And I always love hearing thesekinds of stories because so
many of us don't havethat experience yet.
(38:19):
A lot of young investorslistening to us this week.
A lot of people who are new to investingor weren't taught these things.
We're taught thebenefit of patience.
We we hear about how greatpatience is in other things in
life, but for some reason,
people don't think about thestock market that way to their
detriment, I think.
And you're helping illustratethe great benefits of that.
So congratulationson your success,
and thanks for writingin happy holidays,
(38:41):
happy new year to you.
Alright. Onto rule breakermailbag item number five.
Vince Granieri, always greatto hear from you, Vince.
Thank you for this note.
Hi, David.
As the year comes to a close,
it's appropriate for investorsto review their portfolio,
assess the performance of theirstocks, do some tax planning,
and look forward tothe unknown year ahead.
(39:02):
Well said, Vince.
As you so often remind us,
these types of activity canalso be beneficial in one's
career and in theirlife in general.
Yeah. You're right,Vince. I agree.
Just interrupting briefly.
One third of my focus onthis podcast is on investing,
one third is on business,and one third is on life.
They all count, and the keyis what wins in investing,
(39:24):
wins in businessand wins in life.
So getting in the habit ofbeing a great investor helps
you so much in your careerand in your life as well,
and thank you for puttingit in the way that you did.
Vince goes on, that's what makes thisDecember mailbag so special as it's
where investments, business,and life intersect.
(39:44):
I found your besties podcastto be particularly challenging for
me even though I was verypleased to see optimism with
Bill Burke batting lead off.
That is the one Rule Breaker podcastamong all you have ever done.
And Vince adds, I havelistened to every one.
By the way, I think this is somethinglike the four hundred ninety seventh
(40:06):
consecutive weekof this podcast.
So wow. Thanks, Vince.
Anyway, he's pointing to my optimismwith Bill Burke podcast from
this year as the one RuleBreaker podcast among all that
I've ever done that he'sgone back to over and over
again, which brings us toVince Wright's The Challenge.
(40:26):
As I listened to each ofthe besties on your list,
I began arguing with myself,
the optimistversus the realist.
For example, Rand Stegen's insistencethat his clients commit to long term
engagements with hiscompany, well, of course,
what consultant wouldn't wanta guaranteed long term gig?
(40:46):
And I hearken backto the many expensive
thinking in terms ofboth time and money.
The many expensive corporatetransformation initiatives in
companies where I worked.
Most failed to havea lasting impact.
It was the corporate versionof the long running TV show
Survivor where the goal seemedto be to outwit, outplay,
(41:06):
and outlast the change agents.
Maybe that's why I left thecorporate world to start my own
company over twenty years ago.
Then again, Vince goeson, I argued back,
each one of these corporatetransformation initiatives
brought with it the opportunityfor me and others to learn
something and often many thingsabout ourselves and those around us.
(41:31):
We only needed to be open to it.
What we received waspotentially an order of
magnitude more than wecontributed Optimism,
fragile though it was,
and a delicate flame thatneeded to be nurtured was a
powerful impetusfor positive change.
And as I looked backon twenty twenty four,
I saw where I took theopportunity to learn more about
(41:51):
myself and others and pledgedto do more of that in twenty
twenty five and toencourage others to do so.
You know, I could go on and on,
but let me close as I openedwith an investment story.
I've been a fool forover twenty years,
and I started out buyingvirtually every foolish
recommendation formany of those years.
(42:12):
In twenty twenty one,
I found myself owning well oversix hundred and fifty stocks
and was the world recordholder of the Gardner Kretzmann
Continuum score in the overage sixty division at ten plus.
Since I was nearing retirement,still am and closer, I hope,
I decided it was time to takea more active role in choosing
(42:33):
stocks even though myextensive portfolio
had been a market beater thanksto Motley Fool research and my
asset allocation strategies,
my new goal was to reduce thenumber of positions from six
hundred fifty tosomething more manageable,
seventy five to eighty,split into two portfolios.
One focused on growth becauseI don't wanna outlive my assets
(42:57):
and the other on dividendsbecause I need to replace
income from my job.
I'm happy to report at yearend that my portfolio now has
eighty five positions,
split thirty nine growthand forty six dividend.
It wouldn't have,
couldn't have happenedwithout The Motley Fool.
Wishing you and our communitythe happiest holiday season and
(43:18):
a healthy, happy, andoptimistic New Year,
signed Vince Granieri.
Well, Vince, reflecting on thetension between optimism and realism,
looking at different contextslike corporate transformation,
where maybe realistically weshouldn't be too optimistic
about two day workshops thatare gonna come on and with
(43:40):
change agents, change theculture of our company in brief.
Although, I am with RandStegen, it can be done.
It just takes real commitmentand it needs time to happen.
But not just that corporatetransformation context, Vince,
but also your personalinvesting and when to be
optimistic and whento be realistic.
And I think an optimist buysevery time The Motley Fool says
(44:03):
buy and guess guess what?
I think it works.
And I think you just told thestory of how it does work.
I think Lisa toldone before you,
but not everybody has the moneyor the time or the interest in
saying yes every time.
And we know that whenwe say yes every time,
a third of the time we're gonnabuy in front of a bad stock market.
And you have tobe okay with that.
(44:23):
As a fellow rulebreaker, I know you are.
I put it out there every week.
That's the right mindsetto be an investor over the
course of your life.
But it does involve sometension between being
optimistic, but then therealism that one year and
three, the market drops.
And, you know, I don't think in theend there needs to be a big difference
(44:43):
between being an optimistand being a realist.
I think the phrase we often useis being a rational optimist,
and that kind of combines them.
And it puts me in mind ofMatt Ridley's wonderful book,
The Rational Optimist.
And a couple of quotes come tomind as I was looking back over
that book recently.
The first is
Ridley basically says,
(45:05):
if you're going to be rationaland look at history fairly,
you can't help butnot be an optimist.
You have to be an optimistbecause you can see the
tremendous progress that we'vemade over the last century,
over the last five centuries,
over the last fivethousand years.
You have to recognize that andrealize that through many of
those generations,
(45:25):
the people livingat that time thought
that things were all going down,
that things were gonnaget worse for their kids.
And yet time after time,it's not been the case,
and that's the rationalview of history.
Ridley is also this is gonna I'mgonna quote straight from his book.
Ridley is also big on the idea ofideas commingling with other ideas.
He talks about how ideas breedand they breed with other ideas
(45:48):
and progress results.
And I'm gonna quote right here.
He writes, the history of the modernworld is a history of ideas meeting,
mixing, mating, and mutating.
And the reason that economicgrowth has accelerated so in
the past two hundred years isdown to the fact that ideas
have been allowed to meetat an unprecedented rate.
(46:09):
So again, I think that isa realistic view of things.
I also think it is anoptimistic view of things.
And one more Ridleyquote he says quote,
the pessimist's mistake isto assume that the world's
problems will remain unsolvedbecause they do not know how
they will be solved.
But this is to ignore the factthat solutions are often the
(46:31):
product of ideasmeeting and improving
upon one another, end quote.
Both of those quotes,by the way, again,
from the RationalOptimist by Matt Ridley.
So just a little bit ofadditional thinking for you,
Vince, as you preparefor twenty twenty five,
and I I love your sharing ofyour journey streamlining that
six hundred fiftystock portfolio.
(46:52):
You still have a Gardner Kretzmanncontinuum ratio above one.
Good on you.
But into that balanced andfocused approach that you have
for having some growth andfor having some income.
And again, I think it'sa theme of this podcast.
It's a theme of December twenty twentyfour here at the end of the year.
Portfolio level thinking.
You took a portfolio that hadhundreds and hundreds of stocks
(47:15):
that was doing perfectly well,
but you made it more manageablefor you as you move forward in
the next stage of yourlife toward retirement.
You made it a a portfolio thatyou understand probably a lot
better because witheighty companies,
you have five hundred seventy othersyou no longer have to keep up with.
I've made other points aboutthe six principles of the Rule
Breaker Portfolio.
I'm not gonna speak to it here,
(47:35):
but for anybody who ever missedthat podcast I did almost four
years ago now, Januarythirteenth of twenty twenty one.
That's where I put out my six principlesof the rule breaker portfolio.
And Vince, I see youexhibiting a number of those.
The right thinking,
the right principles leadingto the right actions.
And I celebrate your foolishjourney and your thoughtful and
(47:57):
strategic approach to management,not just of your wealth,
but as you're saying also ofyour business career and of
your life because thesethings are all connected.
Well, Vince, thank you for writing inand happy new year to the granaries
here in twenty twenty five.
And now the final rule breakerinvesting mailbag item not just
at this podcast, butof the year at hand.
(48:19):
So one Dave to another,as doctor Seuss said,
there are probably too manyDaves, but Dave Smallco,
thank you for this note.
Dear David, I'm a long time fullmember subscribing to your first
investment letters innineteen ninety three.
I would say that was backin our print days, Dave.
You have been around us forquite a long time. Thank you.
I've never writtento you before,
(48:39):
but this holiday season,
I I want to express a debt of gratitudeto both you and your brother, Tom,
for giving me the confidence tomake stock selections on my own
for so many years without the helpof Wall Street investment advisers.
You provided the encouragementto embrace risk where it was
warranted and develop a plan foridentifying solid growth companies.
(49:00):
My investment journeystarted in nineteen ninety,
pre Motley Fool whenmy dad passed away,
leaving my mom with two hundredfifty thousand dollars in cash
and leaving instructions toquote just roll over my CDs and
live off the interest andsocial security end quote.
He had two CDs in onebank, Dave writes,
(49:22):
with different maturity dateseach paying around eight
percent interest.
The problem was the CD interestdeclined significantly after he died.
Had my mom listenedto that advice,
she would have had to liveoff the principle of those CDs and
slowly reduce that cash balance.
It might have beengone in ten years.
(49:42):
I asked my mom to trust meand let me develop a better
financial plan that wouldprotect her principal,
allow it to grow a little,
and pay her some income in theform of interest and or dividends.
In March of nineteen ninety,after my dad's passing,
I was twenty eight, a CPA,
but had no realinvestment knowledge,
(50:03):
and I had two months to do someresearch on how to invest that
two hundred fifty thousanddollars before the CDs matured
in May of nineteen ninety.
I spent many nights at a localuniversity library reading
Moody's and Standard and Poor'sand any investment newsletter I
could get my hands on.
At the same time, I readPeter Lynch's one up on Wall Street,
(50:25):
which really spoke to me andgave me the tools to research
companies before I cameacross your newsletters.
From Peter Lynch,
I learned about diversification andinvesting in what you know.
I was not afraid to invest onmy own after reading that book.
I divided up the two hundredfifty thousand dollars by
putting fifty thousand dollars in amunicipal bond paying six percent,
(50:49):
a money market account to giveher access to about twenty
thousand in cash,
fifty thousand in theS and P Index Fund,
fifty thousand into an AmericanCentury Large Cap No Load
Mutual Fund, and I set asideeighty thousand dollars to
invest between fiveindividual stocks.
Those five stockswere Merck, Walmart,
(51:11):
Waste Management, GTE,
and one stock that I felt wasworth taking a risk as it sold
a product I usedat work every day.
It was something I knew andfelt would be essential to all
American businesses.
That was Microsoftwith its MS DOS.
I allocated fifteen thousanddollars to Microsoft in May of
(51:33):
nineteen ninety.
That one decisionwas life changing.
It did not becomeapparent right away.
It took about three or fouryears before accelerating.
In subsequent years,
I also embraced your philosophyof letting winners win and
being one hundred percentinvested in stocks.
I know your brother likes tohave a percentage in cash.
(51:55):
You were one of only two peoplewho espouse this philosophy
of accepting the risk with beingone hundred percent invested.
Jack Bogle was the other.
As Microsoft grew,
I attempted to sell a smallportion each year to diversify
into other stocks.
Friends in the investingfield told me I should sell
(52:16):
Microsoft.
Each time it rose another fiftypercent to lock in my profits.
But my thinking was why shouldI sell the stock just to try
and find something else that willgrow when I already own a good thing?
It didn't make sense to sell.
Over the years, Microsofthas always been over fifty
(52:36):
percent of my mom'stotal portfolio
as it has generated true wealth.
I determined it was anacceptable risk and I do not
lose sleep over it.
Today, it is a five hundredbagger for her portfolio.
Those original sharesallowed my mom to send three
grandchildren and two greatgrandchildren to college.
(52:59):
She bought three newcars for various people,
two John Deere tractors formy brother and my nephew.
It allowed her to travel for a fewyears while she was still able.
She also gifted shares tomy brothers and myself.
Now it provides security forher long term care assistance.
(53:19):
As for me, I readyour rule breaker,
rule maker bookwhen it came out,
continued receiving yourmonthly newsletters,
and allowed you to join Peter Lynchas mentors in my decision making.
The first recommendation Ipurchased on your newsletter
was Middleby, whichbecame a ten bagger.
I also purchased Netflix,but sold after a few years,
(53:41):
my biggest mistake.
There were several losersin there, but over time,
the largest winners madethe losers negligible.
Today my largest winnersinclude Nvidia, Starbucks,
Shopify, Square, Meta Platforms
and Mercado Libre.
With my mom's portfolio,
(54:01):
I sold waste management afterfour years and bought Cisco
systems in nineteen ninety fourwhich became a thirty bagger.
I sold the Walmart afterit doubled and switched to
Starbucks in nineteen ninety twowhich became a forty one bagger.
Your philosophy allowed me tohave confidence to stick with
my decisions even whencompanies experience
(54:22):
stagnation or difficulttimes as Microsoft
and Cisco and Starbucks have.
And to buy with theintention of owning good companies with
solid earnings, amoat, good management,
and someone on CNBC sayingthe company was in quotes
(54:44):
overvalued.
I thank you once again.
Yours truly,
fellow fool, Dave s.
What a beautifulnote to close on.
To close this podcastand this year,
I love what you did foryour mom, Dave, and by extension,
for her wholefamily, you included.
(55:05):
What a win win win.
How happy, how proud would your father beto see that you didn't bury the talents?
You actually effleurised.
Part of what makesit all so sweet,
so sweet to write itout, I know for you,
for me so sweet to read,
is the times you wentagainst conventional wisdom.
(55:26):
First, instead of justkeeping it in CDs,
you invested differently,
including basically one thirdof that money in individual
stocks, five of them, fifteenthousand dollars in Microsoft,
which by my calculation wasa six percent position for your
mom at that point.
And second, despite being told,
as Lisa Wharton was toldearlier this podcast,
(55:47):
you have to sell yourwinning stock, you know,
using that oft used phraseby the financial industry,
we need to lock in profits.
You did not.
And that's the onlyway, by the way,
you're ever gonna achieve afive hundred bagger is to hold
and let that winner run high tobecome a five hundred bagger.
(56:08):
And third and final,
you stayed invested one hundred percentin the market all the way through.
Dot bomb two thousand one,
the great financial recessiontwo thousand eight nine.
As a Microsoft shareholder,
I would add for you thatyou had to sit through Steve
Ballmer, who didn't create a lotof value over about ten years.
And then, of course,through COVID as well,
(56:28):
one hundred percent investedall the way through.
And so that, Dave Smallco,
was so inspiringa note to end on.
And thus to close,ringing in the new year,
English speakersworldwide each year sing,
should old acquaintance beforgot and never brought to mind.
Remember that lyric is it'sactually just a rhetorical question.
(56:50):
I I don't think eighteenthcentury Scottish poet Robert
Burns was suggesting that youforget old acquaintances and
certainly not old friends.
Instead, the rhetoricalquestion invites reflection
on the value of long standingrelationships and shared memories.
The implied answer is no.
Old acquaintanceshould not be forgot.
(57:12):
We should not forget old friendsor the times that we have shared.
And so for this week's podcast,
some new voices as alwaysand many old friends.
And not only do wenot forget them,
we actually we rememberthem and celebrate them.
And let's make a habit of doingwhat Phyllis Hoffman herself
did mentioned at the top ofthis podcast to share out our
(57:34):
money questions, our financiallessons with family and friends.
Pay it forward.
I might even saysometimes, pay it forward.
You will be richly rewarded.
And so I wish you, dearlistener, dear fellow fool,
a lovely holiday and a crackinggood start to twenty twenty five.
Thank you. Thankyou for this year.
(57:55):
And I enjoy doing someportfolio level thinking
together this week.
See you next week. Fool on.
As always, people on this program may haveinterest in the stocks they talk about,
and The Motley Fool may have formalrecommendations for or against.
So don't buy or sell stocksbased solely on what you hear.
(58:16):
Learn more about Rule BreakerInvesting at r b I dot fool dot com.
Once you get tothe end of things,
it gives you a perspective younever could have had because
you needed to get to the end ofthe story in order to see what
happened and then to reflect moreknowingly on what went before.
That's what happens for me everyyear right around this time.
We made it to theend of another year,
twenty twenty four.
You can look back on it now.
(00:21):
You saw all that happened,all the good, all the bad,
all the fair to Midland.
And so we now have theprivilege of perspective.
What you simply couldn't havehad about twenty twenty four,
fifty two weeks ago.
We can now, all of us,see the whole thing.
Zooming out one level, wecan now engage in what I call
(00:41):
portfolio level thinking.
So here we are at the end ofit all, twenty twenty fourth.
This is the last Rule BreakerInvesting Podcast of this year.
Next week's episode appearsas always Wednesday four PM,
but next Wednesday is Januaryfirst twenty twenty five.
So here's my question for you.
What three lessons will youtake away from twenty twenty
(01:04):
four personally,professionally, culturally?
And with whom will youshare those three lessons?
Here at the end of it,twenty twenty four,
we will close things outas we do every month.
At this time, it's your mailbag onlyon this week's Rule Breaker Investing.
(01:24):
It's the Rule Breaker Investingpodcast with Motley Fool
cofounder David Gardner.
Welcome back to RuleBreaker Investing.
And for those whocelebrate, Merry Christmas,
Happy Hanukkah, Happy Kwanzaa.I know I'm missing some others.
It is a special time of theyear for so many of us for a
motley number of reasons.
(01:45):
Of course, religiouscelebrations
often come to mind, butit's also the end of a year,
and we're getting ready forthe start of a new year.
It is a momentous timeand I was listening back
to my mailbag last year at thistime and I said and I quote,
and maybe just maybe in twentytwenty four the stock market
will do as well asit did this year.
(02:06):
Where it was a niceyear of bounce back,
the S and P five hundredwas up twenty percent plus.
I said, I'll take that every yearlast year and concluded by saying,
and hey, I think themarket's going up next year.
Well, those who know my markettiming challenge each year where I
make a prediction about wherethe market's headed for the
year ahead will know that I getit right more often than not.
(02:27):
And why? Because I saythe same thing every year.
I think the market's goingup next year, which I do.
But I was certainly delightedto reflect back and think how
strong the S and P five hundredand really so many of our rule
breaker stocks were in twentytwenty four coming off of what
was already a very goodtwenty twenty three.
Admittedly, coming off of what was ahorrendously bad twenty twenty two.
(02:50):
So there was some paybackin this bounce back.
But as I record this mailbag,which is recorded on Monday,
December twentythird, at this moment,
the S and P five hundred isup twenty three point seven
percent for this year.
It has been a phenomenal yearfor Rule Breaker investors,
and I trust we'llhave a happy new year.
Looking back on the month thatwas December twenty twenty
(03:12):
four, we did threepodcasts before this week.
The first was Games,Games, Games volume six,
where I brought you my annualtabletop gift guide with
thirteen handpicked gamesranging from lighthearted party
favorites like That's Not a Hatto immersive experiences like
Ticket to Ride Legacy.
I'm always shooting for the rightblend of accessibility and depth,
(03:35):
so I do hope and I do believethat volume six a few weeks ago
offered something for everykind of gamer while continuing
a beloved foolishholiday tradition.
Well, beloved by me, at least.
The first week of Decemberevery year, games, games, games.
Speaking of games,
I'm excited to be welcominggame designer and game
publisher, Jamie Stegmaierof Stonemaier Games.
(03:58):
Jamie will be joining me at somepoint early in the new year.
We talked about how much fun it wouldbe to do another podcast together.
I had him on years ago totalk about how good he was at
Kickstarter and how meaningfulKickstarter was becoming in
many ways, but we were talkingmainly about board games.
Well, Jamie has gone on to continueto be a fantastic entrepreneur
in the board gaming spaceand a full fan as well.
(04:20):
And I'm certainlya Stonemaier fan,
so I'll be delighted towelcome Jamie Stegmaier to Rule Breaker
Investing early in the new year.
Week two was, of course, thebesties of twenty twenty four.
A heartfelt look back at the yearthrough some of the, I'd say,
the most meaningful andmemorable moments from this
podcast, Rule Breaker Investing.
We revisited conversationsthat sparked optimism.
(04:43):
We celebrated the foolishvalues of learning and growth.
And I even got to update myreview of Palooza Ultima podcast,
which I did earlier this yearin ten and a half chapters.
I got to update the performancenumbers of all my five stock
samplers as well.
The timely and the timelessall came together in that one.
The stars were aligned.
(05:04):
They were all back, and Ihad so much fun with the besties.
And then, of course, lastweek, speaking of fun,
the Market Cap Game Show,
December twentytwenty four edition,
a festive holiday mix of foolishfun and friendly competition.
Emily Flippen delivering adominant victory over Mac
Grier, but forget thenine to one score.
By the way, did you did you,dear listener, outscore Emily?
(05:26):
Did anyone?
What I'll primarily rememberwas the combination of sharp
insights and lively banter.
I had so much fun lastweek. I hope you did too.
Emily, by the way, by winning,
took the fourth and finalseat of our final four for the
coming March market cap madness.
All market cap game show allmonth long as we determine our
(05:47):
next world champion.
Our final four arefixed now, Andy Cross,
the returning world champion.
And then Bill Barker,Matt Argosinger,
and Emily Flippen.
So I don't do a lot of betting.
I don't recommend most peoplespend any money at all on
sports betting which is zerosum and you'll always lose over
time if you put a lot ofmoney down sports betting.
(06:08):
But if you're gonnabet on one thing,
one competition next year, itmight be worth, I don't know,
maybe a Las Vegas line onAndy's chances of repeating
next year as world champion.
It's all coming to youin the month of March.
I'm already lookingforward to it.
Well, a few hot takes from socialmedia for this month that was.
Got three for you this time.
(06:29):
The first is from my friend,Jum at Jummy underscore Bear.
Bear spelled with thenumber three, Leetspeak.
Jum tweeted out, wow.
What an honor to be a partof this amazing community.
Great to hear updatesfrom our good company.
Jum was referring, of course,
to our look back at the yearthat was through the besties of
twenty twenty four.
One of my favorite parts ofthat episode a couple weeks ago.
(06:51):
It's a long episode every year.It's kinda like the Oscars.
It's a grand show, andit always goes over an hour.
And I dedicate the last tenminutes or so to checking back
with each of my one hundredthmailbag podcast guest stars,
John being one of them, andthat's what she's reacting to.
She also calls out EricDeVore for his theme music.
(07:13):
John, you said at Eric DeVore,
your theme music gave me chills.
None of these can happenwithout you and David g.
Fool and the at RBI podcastteam, my producer, Des.
Thank you, John.
I really appreciate that,
and it was an honor to bepart of that good company
myself and to show it off in ourbesties of twenty twenty four.
(07:34):
Tweet number two, this onecomes from at SemVerbic n l.
Sem, a long time fool. I'vehad him on this podcast.
He's the first professionaltennis player I've ever had on
this podcast telling his storyas an athlete and as an investor.
And, Sem, I appreciate you reflectingon last week's market cap game
show with this tweet.
Sam said, have been looking forwardto these market cap game shows,
(07:57):
he means, every threemonths for four years now.
Manifesting being acontestant one day.
Market cap game show, hesaid analyst versus listener.
And I think Sam is suggestingthat it might be fun to have
somebody who's not aMotley Fool employee.
Last week, we had somebody whowasn't a Motley Fool analyst for the
(08:18):
first time, long time radioproducer for us, Mac Greer,
who I've known fortwenty five plus years.
Such a joy to work with,
but Mac does not study stocksevery day for a living.
He does productionstuff around the fool.
Sam's suggesting it might befun to have somebody who's a
listener compete in themarket cap game show,
and I think Sam isself nominating now.
(08:39):
Sam just won the Dutch nationalchampionship as a doubles
player just days ago, I think.
So first of all,congratulations to you at Sam
Verbeek NL.
And I think it might be fun tosee if we can work it so that
you're traveling to Alexandria,Virginia where Fool HQ is.
The very same week, we recorda market cap game show.
(08:59):
And so if we canmake this happen,
I'm in on it on my side as well.
Sam, let's manifest perhaps ourfirst ever analyst versus listener.
Maybe we make thathappen next year.
And the final tweet I'llmention is from my friend Jason
Newman at j new four.
Hard to imagine having morefun with numbers than this.
He's referring to lastweek's market cap game show.
(09:21):
Best wishes, flippin underscoreemily and at r b I podcast.
Please, please, please getmore Mac Greer in our lives.
That is all. And thankyou for that, Jason.
And in fact, I tweeted outa picture of Emily, Mac,
and me just minutes afterwe finished that podcast,
(09:41):
blowing bubbles, celebratingEmily's impending marriage.
She got married, went down to thecourthouse just an hour or two later than
the market cap gameshow last week.
So a special moment anda fun pick tweeted out.
By the way, you can follow meon Twitter exit at david g fool.
This podcast isat r b I podcast.
Okay. Enough for Twitter x.
(10:03):
Let's move on to six mailbag itemsfor December of twenty twenty four.
Alright. Rule Breaker Investingmailbag item number one.
I just mentioned JasonNewman. Featured his tweet.
Also featured him as partof our very good company.
One of my favoritelong time fools.
This is, I think,
the first time we've evergotten a mailbag item written
(10:24):
by a good friend's aunt.
Phyllis Hoffman, thank youfor this beautiful note.
Dear David, I just finishedlistening to your latest
podcast, The Besties,
and was so pleasantly surprisedto hear you read a letter from
my wonderful nephew,Jason Newman.
As you know, Jason has been an avidMotley Fool fan for a long time,
and I wanted toshare some history.
(10:45):
I don't recall all thedetails, Phyllis writes,
but I do recall the highlightsand lessons learned.
I began either listening to youor reading a newsletter or some
such publication of The MotleyFool at least twenty five to
thirty years ago.
I was quite impressed andexcited to learn about
financial issues as I wasthen a youngish adult.
(11:08):
Sadly, I was not myselfdisciplined or wise in future
planning, financialor otherwise.
But I was smart enoughto know that your book,
The Motley Fool's You Have MoreThan You Think would be a great
college graduation gift,
or perhaps it was a birthdaypresent for my nephew, Jason.
Jason, being a wise one,
(11:29):
did read your book andfollowed it wholeheartedly.
What was the outcome of that?
Jason is now myfinancial advisor.
He's doing well, and I'mstill working full time as a
preschool special education teacherat the age of seventy three.
I know that working is not bad,
(11:49):
and teaching these childrendoes keep me moving and often
smiling But I continueprimarily because I did not
save or invest for retirementAlmost every financial move I
made, few as they were,
was not a good oneuntil I recently started
talking about myfinances with Jason.
(12:10):
Though late in life to start,
I'm finally investing thelittle I can each month,
and I am out of debt.
I have you and Jasonto thank for that.
I just recently startedlistening to your podcast,
Rule Breaker Investing, andI'm thoroughly enjoying it.
You're such a good communicatorand conversationalist.
Your advice, perspectives,and insights are unique,
(12:32):
and always welcome.
Next up for me, after listeningto games, games, games,
I'll be buying a new gamefor my sister, Jason's mom,
and me to play.
Thank you for this and whatyou've done for my family.
Sincerely, Phyllis Hoffman.
Well, what a lovely note,Phyllis. Heartfelt, authentic.
(12:54):
What a good thing you did to makethat gift as you did years ago.
But I really wanna highlightone part of your note and just
think together about it briefly.
You said almost every financialmove I made, few as they were,
was not a good oneuntil I recently started
talking about myfinances with Jason.
(13:15):
And it reminds me, Phyllis,that we are our choices,
and that includes theconversations we have and who
we spend time with.
I've often thought about whatsocial creatures we are as
human beings and that youwould socialize with Jason your
finances and where you wereis such a great sign for your
(13:36):
future financially that you reachedout to the person that you had helped,
that you'd given a hand up to thirtyyears ago with the gift of a book.
And boy, I'm so glad for allof our Motley Fool books.
I'm so glad that they've reachedpeople and helped over the years.
One really fun thing now atthe age of fifty eight is to be
here thirty years later withyou and see what seeds were
(13:56):
planted and what what'shappened in the world as a
consequence of our book You HaveMore Than You Think as an example.
But that you shared it withJason reminds me of how best to
succeed in life and that includesour New Year's resolutions.
You wanna lose weight?
I would say hang out withpeople who are losing weight.
You wanna see thebright side of life?
(14:17):
Surround yourself withpeople who radiate positivity
and intelligence, and yeah,you wanna be better with money?
Spend time with people whosave more than they spend.
As one example,
There's this phrase dog eat dogworld which I've never liked
because by the way,dogs don't eat dogs.
Dogs by nature are social animalsthat exhibit pack behavior.
(14:41):
Cooperation and social bondsare essential for survival.
So, yeah, dogs show aggressionand disputes over territory or
social rank or even food,
but the idea of dogs eatingeach other misrepresents their
natural behavior and thatsame misrepresentation
occurs in viewing life andbusiness for those who do so
(15:01):
thinking it's zero sum.
Stick with me just a bitfurther on this point because
humans, like dogs, we'resuch social animals.
We thrive on cooperation,social hierarchy, and bonds.
And even in justbusiness itself,
people often say business isgreedy or it's win at all costs.
This is itself ismuch more cooperative
(15:24):
than competitive.
Many companies regularlycooperate with their
competitors in order to deliver theproducts and services that they serve up.
So companies are using anamazing amount of collaboration.
It's very evident to anybodywho works in business to get
you that avocado on yourdish at the restaurant.
Hundreds of handsare usually involved.
(15:44):
So I just wanna call out thebenefit of having conversations
with people about money,
and I love that you gave himthat hand up thirty years ago,
then you reached out and he'sgiving you a hand back up now
and I congratulateyou on where you are.
It's never too lateto start investing
and small consistent actionscan still make a big difference.
(16:07):
So to Jason's aunt,to Jason himself,
but mainly to Phyllis Hoffman,
I say full on andgame on. Love it.
Alright. Onto mailbagitem number two.
This one, two stockquestions from Matt Cohen.
Thanks for writing in.
Matt, greetings, David.
I have a couple of questions forthis month's mailbag edition.
Number one, how much of a mistakewas your sell recommendation
(16:31):
for Royal Caribbean Cruise Line,ticker symbol r c l,
in Motley Fool Stock Advisor,
which you made on Decembereighteenth of two thousand eight?
That was, Matt writes, threemonths after the financial
crisis, really threemonths into well,
somewhat well into at thatpoint the financial crisis.
Anyway, was that one of thoseinstances where you couldn't see much
(16:52):
beyond the dark clouds ofthe great recession, Matt writes?
From what I can see,
RCL share price has sixx since you recommended
it that first dayin Stock Advisor,
September twenty firsttwo thousand seven.
So Matt's pointing out, Isold it disconsolately a year later
having lost quite abit in that one year.
(17:12):
And yet, have we just heldfrom the original price,
it would be up sixtimes in value today.
So, yeah, let me just tackleyour first question, Matt.
Let's briefly reviewRoyal Caribbean.
It was at forty in two thousandseven when I recommended it.
By two thousand nine,
it had dropped belowfive dollars a share.
(17:33):
In two thousand twenty, sothis is eleven years later,
it was at a hundredthirty to start the year,
the COVID year of twenty twenty.
And, yeah, as everything shutdown including cruise lines,
just in that year alone,
Royal Caribbean went from onehundred thirty to twenty five
two months later.
(17:53):
Fast forward to this year,
it started this yearat a hundred twenty.
And right now, aswe close the year,
it's somewhere aroundtwo hundred forty.
Those are simple round numbersbecause having picked it first
at forty in two thousand seven,
we can see with it at aroundtwo hundred forty today,
it is up six times in value.
By the way, the S and Pfive hundred over those same
(18:15):
seventeen years upfour times in value.
So Royal Caribbean up six timesin value while beating the market.
So to answer yourquestion, Matt, yes.
I do regret my sellrecommendation for Royal
Caribbean Cruise Line atthe bottom of the financial
great recession, Decembertwo thousand eight.
And it isn't the only selldecision mistake that I've made
(18:38):
as an investor.
ARM Holdings for long timestock advisor members,
they'll remember that oneas well, stock I sold,
and then it went upseven times in value.
So I think that the keytakeaway here is I try not to
make this mistake too often.
Part of the reasonI can, I think,
count on one hand the number oftimes I've done this in Stock
Advisor is is becauseI mainly hold?
(19:00):
And it's it's only rare momentswhere I decide something is
just not gonna work outand I decide to sell it.
I'm not a never sell investor.
I don't think anybody shouldbe a never sell investor,
but Matt and Fools Everywherewere much more rewarded by
holding on to things.
And while Royal Caribbeanexperienced incredible stress
for its business, especiallyduring twenty twenty,
(19:20):
we can see even the benefitsof just holding out.
Again, it started twentytwenty at a hundred thirty.
Today, it's two hundred forty.
That includes
COVID, which is a shockingsystem shock shutdown for an
entire industry, actually,for many industries,
cruise lines involved.
And so, again, we see thestrength and resilience
(19:41):
of great companies and also ofthe stock market and the S and
P five hundred and conscious capitalismin this country and worldwide.
So I think that's whatI'd wanna underline, Matt,
is it worked out.
And I'm sorry to say,
I took stock advisormembers money out of it.
We didn't get to enjoy thatunless somebody went back in.
And if you did,
good on you because I think itis a company that's worth being
(20:03):
invested in for along period of time,
certainly more thanone really horrific
GFC year.
Your other question, Matt, isabout a relatively new company.
Matt writes, one of the stockswhich has been recommended in rule
breakers since I retiredfrom stock picking is TransMedics,
ticker symbol TMDX.
What do you thinkabout TransMedics?
(20:23):
Have you ever consideredtaking a start up position?
The business is definitelyseeking to solve a migraine
level problem, Matt writes inthe field of organ donations.
Well, thank you forasking about that.
And while I haven'tstudied TransMedics very closely at
all, I'm lightlyaware of where it is.
Many people listening to us right nowprobably never heard of the company,
(20:44):
but avid rule breaker investorswill probably recognize ticker
symbol TMDX in thiscompany, which, by the way,
leads the cutting edge organpreservation and transport space.
So in a world where organdonations mercifully and
blessedly are made, companiesthis company anyway,
is a leader in making itpossible for you to store that
(21:05):
organ that you've donated andthen make sure it's transported
safely and effectively to thehospital where it's gonna be re
implanted in somebody else.
So TransMedic is a leader andit's obviously a good thing
that I esteem for the world and that'soften where I start with investments.
But I'm not gonna fullyanalyze this one, Matt,
because it wouldn't be fair.
I haven't spent alot of time with it.
(21:26):
I will remind you though of thesix traits of the rule breaker
investor and maybe asentence as to each.
Just reminding you that that'show I look at the world.
I look at stock market investingthrough the six traits.
And the first one I'vealready spoken to,
top dog and first mover in animportant emerging industry,
and I would say TransMedics iscertainly a top dog and first mover.
(21:47):
A question might be howimportant it is this industry?
What is the totaladdressable market?
I'll leave that forothers to answer,
but that's an importantquestion that I would ask.
The second trait of rulebreakers is that they have a
sustainable advantage.
And this company does havea proprietary technology.
It has FDA approvals around it.
So I I think that's a defensiblemode in a growing niche.
(22:08):
So I think that's a that'sa good sign for TransMedics.
The third is strongpast price appreciation.
And I'd have to say while thisstock has had quite a run a run
up in recent years,
it isn't exhibiting strong pastprice appreciation right now.
It has after a very tough fall.
It has lost two thirds of itsvalue in just the last few months,
(22:29):
and I think that's probably inpart why you're asking about
this company, Matt.
It is just a two billion dollarmarket cap at this point.
So that's a that'sa small cap company.
So just pointing out strongpast price appreciation is
something I like tosee, and right now,
I don't see it there.
Number four, good managementand smart backing.
I don't know much about founderand CEO Waleed Hassanain,
(22:51):
but I think he is I thinkhe does have deep medical
expertise and I I would befocused very much on assessing
what I thought of that individualand the team around him.
So I think that, you know,
behind every great stock is agreat company and behind every
great company are great people.
And that is always my questionfor any company I'm looking at.
Is this somebody that I havehigh esteem for that I think
(23:14):
will lead a winning company andwin on the stock market as well?
The last two traits are ofcourse strong consumer appeal.
Does it have raving fans?
And then the last one is,
is it widely perceivedas overvalued
by by the media or by peoplewho like to say that's a
nosebleed valuationon that company.
I want to see that.
That's a good sign forrule breaker investing.
(23:35):
And again, I'll leave it to youto think about those questions and
answer them yourself.
But in closing, that's how I continueto look at companies even though I'm
not spending as much time these daysresearching one company to the next.
I use the exact same frameworkthat I've used for thirty plus
years that has helped me findso many great stocks and hold
them over long periods of time.
If you are a shareholder,I wish you the best.
(23:57):
I think our Motley Fool RuleBreakers team does esteem this
company, but I'm notactive on the team,
so I can't speak to that.
Alright.
On to Rule Breaker investingmailbag item number three.
This one writing in fromGermany again, Andreas Hamm.
Andreas, great to hearfrom you. Hi, David.
I listened to the NovemberMailbag and wanted to share
thoughts on how, quotes,never rebalancing
(24:18):
could leave gains on the table and testour ability to think exponentially.
Andreas goes on, let'shave some fun with math.
If stock a is aone hundred bagger,
how likely is it to becomea two hundred or three hundred
bagger in five years?
And what you're essentiallyasking with that question,
Andreas, is you're asking,
how likely is that stock to doubleor triple in the next five years?
(24:42):
And I would say most stocks arenot likely to double or triple
in a five year period.
Although, obviously,
we found some that do and thoseare some of my favorite companies.
You go on, is it less likelythan stock b becoming a ten
bagger over thosesame five years?
And, of course, since we're speakingin terms of stock a and stock b,
we're not filling in anycorporate names or ideas here.
(25:04):
We're just talkingmathematically.
So Andres goes on, if so,
if if stock b were tobecome a ten bagger,
shouldn't I investmore in stock b?
For example, if I sold halfof my stock a and invested in
stock b and stock bbecame a ten bagger,
that's a compoundedfive hundred bagger.
(25:24):
Meanwhile, stock a might double ortriple giving a combined six to six
hundred to sixhundred fifty bagger.
Andreas goes oncontinuing his math.
Should I prioritize the odds ofstock a doubling versus stock
b becoming a ten bagger.
He concludes no companydominates forever.
There are strategicmisalignments, monopoly
(25:44):
accusations, competitioncan dethrone leaders.
It happened with Intel in CPUs.
It could happen toNVIDIA one day in GPUs.
This is why we should neitherfully avoid rebalancing nor
always rebalance.
Instead, decisionsshould have context,
balancing past performancewith future opportunities.
Mistakes happen by CEOsand investors alike.
(26:07):
We should react to errorsand act on opportunities.
Doing nothing?
Andreas says, doesn't feelcapital f foolish to me.
I hope this adds a nugget ofvalue for the full community as
we start twenty twenty five.
Fool on, Andreas Hamm.
Well, first of all, Andreas,thank you for writing in.
And I agree thatalways by the way,
(26:27):
words like always and neverdon't make for great outcomes.
I'll talk about rebalancinga little bit later,
but I'm not an alwaysinvestor or a never investor.
I think we shouldhave our minds open.
And I can certainly see yourpoint about how a huge winner
with a huge marketcap because after all,
when a company goes up ahundred or more times in value,
(26:48):
usually it's gonna be a large capat least if not a mega cap company.
And that thatcompany at that time,
after that big of a runcould begin to offer less potential
for future growth than let'ssay a promising mid cap or
small cap stock.
You know, as an investor,
I'm always looking not justat an individual company,
(27:10):
but I'm doing what you'redoing here in this note.
I'm looking at my portfoliobecause we can use our rule
breaker stock traitsto find stocks,
and we can use our habits asinvestors to do things like
hold on to them, letyour winners run high, add up,
don't double down, those kindsof habits that I talk about.
But ultimately, when you use yourhabits and multiply them times your
(27:34):
stocks, you end up with what?
You end up with a portfolio.
And this kind ofportfolio level thinking,
I talked about that atthe top of the show.
It's appropriate at the end ofthe year to start looking back
on the whole year.
It's always appropriate alsoto look at your whole portfolio
and that's part ofwhat you're doing here.
And at least for me,
principle number four of mysix Rule Breaker Portfolio
(27:56):
Principles.
Principle number four where youestablish your sleep number is
gonna be very instructive forhow to manage a portfolio that
has a hundred bagger.
Because what I'm saying withthat one is very simply don't
allow any stock to grow tosuch a large percentage of your
portfolio that you'relosing sleep at night.
So establishing yoursleep number means,
(28:16):
what is the number that I wouldallow my largest holding to
become as a percentage of myoverall pie of my whole portfolio?
How how large would Ilet that slice become
and still be able to sleep?
And I've used examplesof this in the past,
I'm not gonna gotoo deep on it here,
but let's just give a quick one.
If that number were tenfor you, for example,
(28:37):
if you wouldn't want yourportfolio to ever allow a
single stock to be worthmore than ten percent of your
portfolio, then ifyou have a hundred
bagger, assuredly, you will beselling that multiple times in
a later mailbag item.
This podcast, I'll speak to this alittle bit more because it comes back up.
But basically, we're probablyselling portions of huge
(28:59):
winners anyway if they're gonna goup a hundred or more times in value.
Maybe you'redonating the shares,
a nice thing to dothis time of year.
People often think charitablyas we near the end of the year.
That's a great way to donate.
Give shares ofappreciated stock.
I've leaned on thata lot over the years.
So while I appreciate themath that you're taking us through,
I think that there are a bunchof contextual questions each of
(29:21):
us has to ask looking uniquelyat our unique portfolio.
That's that's why it's hardfor me to speak prescriptively
around something like this.
As I close this one out,
I wanna remind all of us aboutthe tax consequences of selling.
If you do have a big winner,
you're gonna bepaying a big tax bill.
And by leaving thatmoney invested instead,
at least in our country,
(29:42):
you have a hundred percent ofyour money instead of getting a
twenty percent or socap capital gains tax,
which causes you to bereinvesting less money in that
stock b in your example.
So if you really stickhard to the math,
you have to think throughthe tax consequences.
I also wanna say that whenyou've let a company go up a
hundred times in value, you probablyknow it really, really well.
(30:03):
Probably a lot better stock ain your example than you would
know stock b.
So I do wanna remind you thatfamiliarity can be a real strength.
You get to know companies muchbetter when you're holding them
than when you're thinking aboutbuying them at earlier stages.
There's a measureof safety there.
Also, when a company getsvery large, it becomes safer.
It has a larger balance sheet.
(30:25):
It's recognized as veryimportant to its economy when
it's that that big.
I'm not gonna say too big to failbecause I don't like that phrase,
but companies become highlyhighly relevant like let's say
Amazon dot com ishighly highly relevant.
It's very very important toour economy both I would say
domestically here in the USand globally in many cases that
Amazon becomes important in away that a small cap stock b
(30:47):
can't at that stage.
So there are just alot of thoughts here.
I wanna close with this onethough about rebalancing
because you mentionedthat and you know,
I often talkagainst rebalancing.
In this context, many investmentadvisors and much of the regulated mutual
fund industry, whenfacing imbalance,
do have to rebalance.
(31:08):
And that's the practiceof just automatically selling positions
that have risen in order toreinvest the proceeds into
those that have fallen.
So that enables variousinvestment instruments to to
achieve their objective,to fulfill their charter.
They have to remain wellbalanced across their holdings,
which means on a periodicquarterly or annual basis,
(31:30):
they are selling their winnersand reinvesting the proceeds
into their losers.
What Peter Lynch famouslycalled watering their weeds and
cutting their flowers.
By the way, I think that's gotten to besomewhat of a tired analogy at this point.
That's why I proposeI don't know.
Let's go with the horse racinganalogy here, a new one.
I think in investing, especiallyfor rule breaker investors,
(31:51):
we should be backingour thoroughbreds
and retiring our also ran.
That's how I think aboutproper portfolio management.
I'm not a fan of selling off ourwinners to add to our losers.
And by the way, no wonderso many investment funds and
advisers broadly underperformthe market averages.
They are regularly rebalancing.
(32:14):
Now keep in mind, oftenthey have to by law.
They're required to maintainvast diversification,
which means they have to selloff their winners and reinvest
into their losers.
But good news, Andreas, as anindividual investor, you and I,
we can manage our own portfolio.
We don't have to genuflectat the altar of rebalance.
So backing our thoroughbredsand retiring our also rands,
(32:37):
letting our winnersrun, And as you say,
also staying open tonew opportunities,
that's what we'reall in search of.
So there are somethoughts and reflections.
I don't have a firmanswer either way because I don't
think it's possible to give one.
I I love math and Iappreciate that math is often hard edged.
It's right or it's wrong.
(32:57):
Green check mark, red x next toyour math answer on your math test.
But in this case, we're nottalking about the actual math.
We're talking about the contextaround our portfolios when we
exhibit here at the end of twentytwenty four portfolio level thinking.
And thank you for takingus there. Alright.
Onto rule breakermailbag item number four.
(33:18):
This one from frequentcontributor, Lisa Wharton.
Lisa, always a pleasureto hear from you.
She starts, dear rule breakers,
I'm incredibly honored to be arule breaker poet due to David
having read my poems at leastfive or six times on this podcast.
But I'm not just a fool poet.
I actually know a thingor two about investing.
I've been a Motley Fool member sincetwo thousand eight, and since then,
(33:39):
my portfolio has gained morethan two thousand percent.
That means your portfolio, Lisa,
portfolio level thinking is upsome twenty times in value over
the last sixteen years.
Thanks largely, she writes,
to the guidance of MotleyFool Stock Advisor and Rule
Breakers.
One of my standoutinvestments was Tesla.
Following Stock Advisor'srecommendation, I bought Tesla,
(34:02):
Lisa writes in twothousand twelve, and split adjusted.
It was just two dollars per sharelooking backward back on that day.
And I might have seemed like agenius with the Motley Fool's
help of course, but this journeywasn't without its challenges.
Holding such a volatile stock hasbeen an emotional roller coaster.
By two thousand sixteen, myTesla shares had ten xed and
(34:25):
the pressure tosell was immense.
People around me constantlysaid I was fooler small f to
hold on to such a risky company.
I resisted selling until someMotley Fool analysts marked
Tesla as a hold in Februarytwo thousand sixteen.
That's when I soldfifty percent,
although I held onto the other half.
(34:47):
Over time, I built myTesla position back up,
especially after Tom Gardnerre recommended the stock.
Now Tesla is mylargest holding, and Lisa adds,
I plan to keep itfor a long time.
I also bought Amazonin two thousand twelve,
Netflix in two thousand nine,and Nvidia in two thousand ten.
Made some mistakes along theway like selling forty percent
(35:09):
of my Amazon about seven yearsago and unloading much of
Netflix after it doubled.
I initially sold all my Nvidiashares in two thousand twelve
after they went nowherefor two to three years,
but I bought back in duringtwo thousand sixteen,
and I've been thrilled withthat decision ever since.
Despite thesemissteps, Lisa goes on,
(35:32):
my returns since two thousandeight have still exceeded two
thousand percent.
The key has been tolayer out gradually
rather than selleverything at once.
As time passes, the remainingshares have a compounding effect,
making earlier sales lessimpactful on the overall portfolio.
(35:52):
A recent conversation at my rowingclub illustrated this point.
A young man told me he boughtTesla shares in two thousand
ten even earlier than I did.
Unfortunately, he sold allhis shares after they doubled.
I've heard many storieslike this over the years,
underscoring the importanceof patience and strategy.
(36:12):
In investing, Lisa concludes layeringout and layering in is critical.
It's a strategy thathas served me well,
and I hope it could guide otherson their own investing journeys.
Happy holidays.Sincerely, Lisa Wharton.
Well, Lisa, I appreciate the overallpoints and the examples you gave as well.
(36:32):
I think it's quite amazing thatyou sold out of some of those
great stocks and yet not allthe way out in some cases and
got back in in some others.
I especially appreciate yourpoints about Tesla and how
emotional a stock, what a rollercoaster stock it has been.
Most hundred plus baggers,which is what Tesla's been for
me, will have those rollercoasters and they're not just,
(36:55):
I don't know, pricebased roller coasters.
It's not all about thenumbers of the math.
Lisa, you're speaking to theemotional toll that can take,
and I certainlyacknowledge that.
But staying investedand lessons learned from
stories like yours, you learnedit firsthand from Tesla,
but through this podcast,
you're sharing out lessons that othersare hearing and will learn from.
(37:16):
And I appreciate your pointabout layering in to use your
phrase and layering out.
What you're essentially saying is toomany people are all on or all off.
Things are black or white.There aren't any grays.
And yet, I don't thinkthat's capital f foolish.
I think it's great to beincremental with what we do.
When I do sell offa large holding,
(37:37):
often because it'sgotten too large,
I just sell it oftenbits and pieces.
It's not an all or nothing.
I also sometimes buy in thirds,
something I did in the earliestdays when we started The Motley
Fool with my original AOL stock.
I didn't feel fully confidentin the company at first,
so I took my money that Iwas gonna invest in it and I
divided it up in three.
And I invested itone third, one third,
(37:58):
one third over time tobuild more confidence.
So, yes, layering in andlayering out is a tool to
manage emotions and maintainthat exposure to great companies.
And yours is a story ofpatience and resilience.
And I always love hearing thesekinds of stories because so
many of us don't havethat experience yet.
(38:19):
A lot of young investorslistening to us this week.
A lot of people who are new to investingor weren't taught these things.
We're taught thebenefit of patience.
We we hear about how greatpatience is in other things in
life, but for some reason,
people don't think about thestock market that way to their
detriment, I think.
And you're helping illustratethe great benefits of that.
So congratulationson your success,
and thanks for writingin happy holidays,
(38:41):
happy new year to you.
Alright. Onto rule breakermailbag item number five.
Vince Granieri, always greatto hear from you, Vince.
Thank you for this note.
Hi, David.
As the year comes to a close,
it's appropriate for investorsto review their portfolio,
assess the performance of theirstocks, do some tax planning,
and look forward tothe unknown year ahead.
(39:02):
Well said, Vince.
As you so often remind us,
these types of activity canalso be beneficial in one's
career and in theirlife in general.
Yeah. You're right,Vince. I agree.
Just interrupting briefly.
One third of my focus onthis podcast is on investing,
one third is on business,and one third is on life.
They all count, and the keyis what wins in investing,
(39:24):
wins in businessand wins in life.
So getting in the habit ofbeing a great investor helps
you so much in your careerand in your life as well,
and thank you for puttingit in the way that you did.
Vince goes on, that's what makes thisDecember mailbag so special as it's
where investments, business,and life intersect.
(39:44):
I found your besties podcastto be particularly challenging for
me even though I was verypleased to see optimism with
Bill Burke batting lead off.
That is the one Rule Breaker podcastamong all you have ever done.
And Vince adds, I havelistened to every one.
By the way, I think this is somethinglike the four hundred ninety seventh
(40:06):
consecutive weekof this podcast.
So wow. Thanks, Vince.
Anyway, he's pointing to my optimismwith Bill Burke podcast from
this year as the one RuleBreaker podcast among all that
I've ever done that he'sgone back to over and over
again, which brings us toVince Wright's The Challenge.
(40:26):
As I listened to each ofthe besties on your list,
I began arguing with myself,
the optimistversus the realist.
For example, Rand Stegen's insistencethat his clients commit to long term
engagements with hiscompany, well, of course,
what consultant wouldn't wanta guaranteed long term gig?
(40:46):
And I hearken backto the many expensive
thinking in terms ofboth time and money.
The many expensive corporatetransformation initiatives in
companies where I worked.
Most failed to havea lasting impact.
It was the corporate versionof the long running TV show
Survivor where the goal seemedto be to outwit, outplay,
(41:06):
and outlast the change agents.
Maybe that's why I left thecorporate world to start my own
company over twenty years ago.
Then again, Vince goeson, I argued back,
each one of these corporatetransformation initiatives
brought with it the opportunityfor me and others to learn
something and often many thingsabout ourselves and those around us.
(41:31):
We only needed to be open to it.
What we received waspotentially an order of
magnitude more than wecontributed Optimism,
fragile though it was,
and a delicate flame thatneeded to be nurtured was a
powerful impetusfor positive change.
And as I looked backon twenty twenty four,
I saw where I took theopportunity to learn more about
(41:51):
myself and others and pledgedto do more of that in twenty
twenty five and toencourage others to do so.
You know, I could go on and on,
but let me close as I openedwith an investment story.
I've been a fool forover twenty years,
and I started out buyingvirtually every foolish
recommendation formany of those years.
(42:12):
In twenty twenty one,
I found myself owning well oversix hundred and fifty stocks
and was the world recordholder of the Gardner Kretzmann
Continuum score in the overage sixty division at ten plus.
Since I was nearing retirement,still am and closer, I hope,
I decided it was time to takea more active role in choosing
(42:33):
stocks even though myextensive portfolio
had been a market beater thanksto Motley Fool research and my
asset allocation strategies,
my new goal was to reduce thenumber of positions from six
hundred fifty tosomething more manageable,
seventy five to eighty,split into two portfolios.
One focused on growth becauseI don't wanna outlive my assets
(42:57):
and the other on dividendsbecause I need to replace
income from my job.
I'm happy to report at yearend that my portfolio now has
eighty five positions,
split thirty nine growthand forty six dividend.
It wouldn't have,
couldn't have happenedwithout The Motley Fool.
Wishing you and our communitythe happiest holiday season and
(43:18):
a healthy, happy, andoptimistic New Year,
signed Vince Granieri.
Well, Vince, reflecting on thetension between optimism and realism,
looking at different contextslike corporate transformation,
where maybe realistically weshouldn't be too optimistic
about two day workshops thatare gonna come on and with
(43:40):
change agents, change theculture of our company in brief.
Although, I am with RandStegen, it can be done.
It just takes real commitmentand it needs time to happen.
But not just that corporatetransformation context, Vince,
but also your personalinvesting and when to be
optimistic and whento be realistic.
And I think an optimist buysevery time The Motley Fool says
(44:03):
buy and guess guess what?
I think it works.
And I think you just told thestory of how it does work.
I think Lisa toldone before you,
but not everybody has the moneyor the time or the interest in
saying yes every time.
And we know that whenwe say yes every time,
a third of the time we're gonnabuy in front of a bad stock market.
And you have tobe okay with that.
(44:23):
As a fellow rulebreaker, I know you are.
I put it out there every week.
That's the right mindsetto be an investor over the
course of your life.
But it does involve sometension between being
optimistic, but then therealism that one year and
three, the market drops.
And, you know, I don't think in theend there needs to be a big difference
(44:43):
between being an optimistand being a realist.
I think the phrase we often useis being a rational optimist,
and that kind of combines them.
And it puts me in mind ofMatt Ridley's wonderful book,
The Rational Optimist.
And a couple of quotes come tomind as I was looking back over
that book recently.
The first is
Ridley basically says,
(45:05):
if you're going to be rationaland look at history fairly,
you can't help butnot be an optimist.
You have to be an optimistbecause you can see the
tremendous progress that we'vemade over the last century,
over the last five centuries,
over the last fivethousand years.
You have to recognize that andrealize that through many of
those generations,
(45:25):
the people livingat that time thought
that things were all going down,
that things were gonnaget worse for their kids.
And yet time after time,it's not been the case,
and that's the rationalview of history.
Ridley is also this is gonna I'mgonna quote straight from his book.
Ridley is also big on the idea ofideas commingling with other ideas.
He talks about how ideas breedand they breed with other ideas
(45:48):
and progress results.
And I'm gonna quote right here.
He writes, the history of the modernworld is a history of ideas meeting,
mixing, mating, and mutating.
And the reason that economicgrowth has accelerated so in
the past two hundred years isdown to the fact that ideas
have been allowed to meetat an unprecedented rate.
(46:09):
So again, I think that isa realistic view of things.
I also think it is anoptimistic view of things.
And one more Ridleyquote he says quote,
the pessimist's mistake isto assume that the world's
problems will remain unsolvedbecause they do not know how
they will be solved.
But this is to ignore the factthat solutions are often the
(46:31):
product of ideasmeeting and improving
upon one another, end quote.
Both of those quotes,by the way, again,
from the RationalOptimist by Matt Ridley.
So just a little bit ofadditional thinking for you,
Vince, as you preparefor twenty twenty five,
and I I love your sharing ofyour journey streamlining that
six hundred fiftystock portfolio.
(46:52):
You still have a Gardner Kretzmanncontinuum ratio above one.
Good on you.
But into that balanced andfocused approach that you have
for having some growth andfor having some income.
And again, I think it'sa theme of this podcast.
It's a theme of December twenty twentyfour here at the end of the year.
Portfolio level thinking.
You took a portfolio that hadhundreds and hundreds of stocks
(47:15):
that was doing perfectly well,
but you made it more manageablefor you as you move forward in
the next stage of yourlife toward retirement.
You made it a a portfolio thatyou understand probably a lot
better because witheighty companies,
you have five hundred seventy othersyou no longer have to keep up with.
I've made other points aboutthe six principles of the Rule
Breaker Portfolio.
I'm not gonna speak to it here,
(47:35):
but for anybody who ever missedthat podcast I did almost four
years ago now, Januarythirteenth of twenty twenty one.
That's where I put out my six principlesof the rule breaker portfolio.
And Vince, I see youexhibiting a number of those.
The right thinking,
the right principles leadingto the right actions.
And I celebrate your foolishjourney and your thoughtful and
(47:57):
strategic approach to management,not just of your wealth,
but as you're saying also ofyour business career and of
your life because thesethings are all connected.
Well, Vince, thank you for writing inand happy new year to the granaries
here in twenty twenty five.
And now the final rule breakerinvesting mailbag item not just
at this podcast, butof the year at hand.
(48:19):
So one Dave to another,as doctor Seuss said,
there are probably too manyDaves, but Dave Smallco,
thank you for this note.
Dear David, I'm a long time fullmember subscribing to your first
investment letters innineteen ninety three.
I would say that was backin our print days, Dave.
You have been around us forquite a long time. Thank you.
I've never writtento you before,
(48:39):
but this holiday season,
I I want to express a debt of gratitudeto both you and your brother, Tom,
for giving me the confidence tomake stock selections on my own
for so many years without the helpof Wall Street investment advisers.
You provided the encouragementto embrace risk where it was
warranted and develop a plan foridentifying solid growth companies.
(49:00):
My investment journeystarted in nineteen ninety,
pre Motley Fool whenmy dad passed away,
leaving my mom with two hundredfifty thousand dollars in cash
and leaving instructions toquote just roll over my CDs and
live off the interest andsocial security end quote.
He had two CDs in onebank, Dave writes,
(49:22):
with different maturity dateseach paying around eight
percent interest.
The problem was the CD interestdeclined significantly after he died.
Had my mom listenedto that advice,
she would have had to liveoff the principle of those CDs and
slowly reduce that cash balance.
It might have beengone in ten years.
(49:42):
I asked my mom to trust meand let me develop a better
financial plan that wouldprotect her principal,
allow it to grow a little,
and pay her some income in theform of interest and or dividends.
In March of nineteen ninety,after my dad's passing,
I was twenty eight, a CPA,
but had no realinvestment knowledge,
(50:03):
and I had two months to do someresearch on how to invest that
two hundred fifty thousanddollars before the CDs matured
in May of nineteen ninety.
I spent many nights at a localuniversity library reading
Moody's and Standard and Poor'sand any investment newsletter I
could get my hands on.
At the same time, I readPeter Lynch's one up on Wall Street,
(50:25):
which really spoke to me andgave me the tools to research
companies before I cameacross your newsletters.
From Peter Lynch,
I learned about diversification andinvesting in what you know.
I was not afraid to invest onmy own after reading that book.
I divided up the two hundredfifty thousand dollars by
putting fifty thousand dollars in amunicipal bond paying six percent,
(50:49):
a money market account to giveher access to about twenty
thousand in cash,
fifty thousand in theS and P Index Fund,
fifty thousand into an AmericanCentury Large Cap No Load
Mutual Fund, and I set asideeighty thousand dollars to
invest between fiveindividual stocks.
Those five stockswere Merck, Walmart,
(51:11):
Waste Management, GTE,
and one stock that I felt wasworth taking a risk as it sold
a product I usedat work every day.
It was something I knew andfelt would be essential to all
American businesses.
That was Microsoftwith its MS DOS.
I allocated fifteen thousanddollars to Microsoft in May of
(51:33):
nineteen ninety.
That one decisionwas life changing.
It did not becomeapparent right away.
It took about three or fouryears before accelerating.
In subsequent years,
I also embraced your philosophyof letting winners win and
being one hundred percentinvested in stocks.
I know your brother likes tohave a percentage in cash.
(51:55):
You were one of only two peoplewho espouse this philosophy
of accepting the risk with beingone hundred percent invested.
Jack Bogle was the other.
As Microsoft grew,
I attempted to sell a smallportion each year to diversify
into other stocks.
Friends in the investingfield told me I should sell
(52:16):
Microsoft.
Each time it rose another fiftypercent to lock in my profits.
But my thinking was why shouldI sell the stock just to try
and find something else that willgrow when I already own a good thing?
It didn't make sense to sell.
Over the years, Microsofthas always been over fifty
(52:36):
percent of my mom'stotal portfolio
as it has generated true wealth.
I determined it was anacceptable risk and I do not
lose sleep over it.
Today, it is a five hundredbagger for her portfolio.
Those original sharesallowed my mom to send three
grandchildren and two greatgrandchildren to college.
(52:59):
She bought three newcars for various people,
two John Deere tractors formy brother and my nephew.
It allowed her to travel for a fewyears while she was still able.
She also gifted shares tomy brothers and myself.
Now it provides security forher long term care assistance.
(53:19):
As for me, I readyour rule breaker,
rule maker bookwhen it came out,
continued receiving yourmonthly newsletters,
and allowed you to join Peter Lynchas mentors in my decision making.
The first recommendation Ipurchased on your newsletter
was Middleby, whichbecame a ten bagger.
I also purchased Netflix,but sold after a few years,
(53:41):
my biggest mistake.
There were several losersin there, but over time,
the largest winners madethe losers negligible.
Today my largest winnersinclude Nvidia, Starbucks,
Shopify, Square, Meta Platforms
and Mercado Libre.
With my mom's portfolio,
(54:01):
I sold waste management afterfour years and bought Cisco
systems in nineteen ninety fourwhich became a thirty bagger.
I sold the Walmart afterit doubled and switched to
Starbucks in nineteen ninety twowhich became a forty one bagger.
Your philosophy allowed me tohave confidence to stick with
my decisions even whencompanies experience
(54:22):
stagnation or difficulttimes as Microsoft
and Cisco and Starbucks have.
And to buy with theintention of owning good companies with
solid earnings, amoat, good management,
and someone on CNBC sayingthe company was in quotes
(54:44):
overvalued.
I thank you once again.
Yours truly,
fellow fool, Dave s.
What a beautifulnote to close on.
To close this podcastand this year,
I love what you did foryour mom, Dave, and by extension,
for her wholefamily, you included.
(55:05):
What a win win win.
How happy, how proud would your father beto see that you didn't bury the talents?
You actually effleurised.
Part of what makesit all so sweet,
so sweet to write itout, I know for you,
for me so sweet to read,
is the times you wentagainst conventional wisdom.
(55:26):
First, instead of justkeeping it in CDs,
you invested differently,
including basically one thirdof that money in individual
stocks, five of them, fifteenthousand dollars in Microsoft,
which by my calculation wasa six percent position for your
mom at that point.
And second, despite being told,
as Lisa Wharton was toldearlier this podcast,
(55:47):
you have to sell yourwinning stock, you know,
using that oft used phraseby the financial industry,
we need to lock in profits.
You did not.
And that's the onlyway, by the way,
you're ever gonna achieve afive hundred bagger is to hold
and let that winner run high tobecome a five hundred bagger.
(56:08):
And third and final,
you stayed invested one hundred percentin the market all the way through.
Dot bomb two thousand one,
the great financial recessiontwo thousand eight nine.
As a Microsoft shareholder,
I would add for you thatyou had to sit through Steve
Ballmer, who didn't create a lotof value over about ten years.
And then, of course,through COVID as well,
(56:28):
one hundred percent investedall the way through.
And so that, Dave Smallco,
was so inspiringa note to end on.
And thus to close,ringing in the new year,
English speakersworldwide each year sing,
should old acquaintance beforgot and never brought to mind.
Remember that lyric is it'sactually just a rhetorical question.
(56:50):
I I don't think eighteenthcentury Scottish poet Robert
Burns was suggesting that youforget old acquaintances and
certainly not old friends.
Instead, the rhetoricalquestion invites reflection
on the value of long standingrelationships and shared memories.
The implied answer is no.
Old acquaintanceshould not be forgot.
(57:12):
We should not forget old friendsor the times that we have shared.
And so for this week's podcast,
some new voices as alwaysand many old friends.
And not only do wenot forget them,
we actually we rememberthem and celebrate them.
And let's make a habit of doingwhat Phyllis Hoffman herself
did mentioned at the top ofthis podcast to share out our
(57:34):
money questions, our financiallessons with family and friends.
Pay it forward.
I might even saysometimes, pay it forward.
You will be richly rewarded.
And so I wish you, dearlistener, dear fellow fool,
a lovely holiday and a crackinggood start to twenty twenty five.
Thank you. Thankyou for this year.
(57:55):
And I enjoy doing someportfolio level thinking
together this week.
See you next week. Fool on.
As always, people on this program may haveinterest in the stocks they talk about,
and The Motley Fool may have formalrecommendations for or against.
So don't buy or sell stocksbased solely on what you hear.
(58:16):
Learn more about Rule BreakerInvesting at r b I dot fool dot com.
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