Motley Fool co-founder David Gardner emphasizes the eternal verities in business and investing. Join the journey back to core beliefs. Listen to full episodes of free Motley Fool podcasts and check out the top 10 stocks to buy for investment opportunities.
Get expert guidance on where to invest $1,000 now. Stock Advisor’s average return is 1,060% compared to the S&P 500’s 187%. Discover the 10 best stocks to buy when you join Stock Advisor for market-beating results.
David Gardner presents nine self-evident truths on Rule Breaker Investing. Explore the concept of living in a “protopia” where human progress is subtly improving daily. Witness technological advancements, lower poverty rates, and societal developments shaping a better world. The world is progressing, with companies like Pfizer and Moderna creating vaccines within a year of a pandemic outbreak. Businesses are contributing to a “protopia” by prioritizing environmental stewardship and ethical practices. Conscious capitalism values purpose over profit and creates win-win situations for all stakeholders, driving sustainable success.
Rule Breaker Investing is gaining popularity, with the book appearing as a bestseller at Heathrow Airport. Conscious capitalism, with its focus on purpose, stakeholder wins, conscious leadership, and corporate culture, is becoming the foundation of successful businesses. The ability to evolve and adapt to changing circumstances is crucial for long-term success, emphasizing the importance of value optionality in business strategies. Alphabet, with its diverse businesses, including Google, YouTube, and Fitbit, showcases exceptional optionality in transforming and evolving. Companies should aspire to such resilience in the face of changing external circumstances. Market trends show that while the stock market drops one year out of three, it rises two years out of three, making market timing a coin flip. Investors must be prepared for market drops and adopt a forward-looking approach to investing, avoiding the “rowboat syndrome” of looking backward while moving forward. Investing in the stock market is like sailing a boat, with the wind pushing you forward. It’s more efficient than paddling a canoe and constantly looking backward. Being a long-term investor means wearing the jersey of the companies you invest in and cheering them on for the long haul. Trading is the antithesis of investing, done short-term with a focus on wiggles and waggles on charts. As an investor, you have the opportunity to make a difference by supporting purpose-driven, resilient businesses for the long-term. Let’s set sail and enjoy the journey of getting rich together. Henrik Rosenthal proposed the T-shirt test for investing, asking if you would proudly wear a company’s logo before investing. If the company aligns with your values, promotes conscious capitalism, and has long-term potential, wear their logo proudly. Stick with great companies like you would stick with a winning team.
Rule Breaker investing breaks conventional wisdom, embracing Foolishness and taking a contrary approach. Just like in board games, going against the norm in business and investing can lead to success. Rule Breakers don’t follow traditional paths, they create their own strategies, evolving and adapting for long-term gains. In the first segment, Motley Fool discusses the beauty of challenging conventional wisdom in investing, highlighting the importance of picking stocks that may seem outrageous at first but have the potential for great returns. They emphasize the fun in investing and the joy of being a “fool” in the market.
Moving on to the next segment, Motley Fool restates the six traits they look for in stocks, including top dogs in emerging industries, sustainable competitive advantages, past price appreciation, good management, consumer appeal, and being labeled as overvalued by the financial media. They stress the importance of visionary leadership and smart backing in successful investments.
In the final segment, Motley Fool acknowledges the inevitability of losses in rule breaker investing, emphasizing the importance of learning from failures and understanding that not every stock pick will be a success. They highlight the concept of “losing to win” and the valuable lessons that can be gained from setbacks in the market. In the past 16 years, 63 out of 389 stocks picked for Motley Fool Rule Breakers lost over 50%. Despite this, the 63rd best stock, HubSpot, saw a 401.8% gain. Winning stocks like HubSpot tend to keep winning, offsetting losses. The joy of gain far exceeds the pain of loss in investing, especially for rule breakers. This mindset is crucial for successful investing. Another key concept introduced is the “spiffy-pop,” which occurs when a stock’s gain exceeds its original cost basis. This term is created for long-term investors who focus on steady growth rather than short-term market fluctuations. This mindset is essential for those who embrace the rule breaker investor mentality. Hundreds of spiffy-pops have been achieved across Motley Fool services, with some stocks generating 13 or more. Popular stocks like Amazon, Booking, and Intuitive Surgical have hit their 13th spiffy-pop, becoming “forgettable” winners. David Gardner holds positions in various companies, including Alphabet, Amazon, and Tesla. The Motley Fool has positions in and recommends several companies, including Alphabet and Netflix.
Read more at Nasdaq: David Gardner: 9 Foolish Truths I Hold to Be Self-Evident