0:01

This podcast thrives on recurring

0:04

series, much like how Saturday

0:06

Night Live reintroduces beloved sketches

0:08

like Church Lady Back in the

0:10

Day or Black Jeopardy or Weekend

0:13

Update, ones you're familiar with. You

0:15

look forward to them. Well, in our own small

0:17

way here on Rule Breaker Investing, I hope you

0:19

look forward to our regular features. I don't know,

0:21

authors in August, in August every

0:24

year, stock stories, review of Paloozas back

0:26

in the day, some segments like the

0:28

Market Cap Game Show tend to appear

0:30

quarterly, while others like the birthday themed

0:33

What You've Learned From Me occur

0:35

annually. And then there are staples,

0:37

the end of month mailbags and

0:39

this week's focus, great quotes.

0:42

Typically great quotes

0:44

unthemed, typically offering

0:47

a mix of five quotes aimed at

0:49

enriching your life, making you

0:51

smarter, happier and richer,

0:53

but this time all five

0:56

are from my favorite play. It's

0:58

great quotes, Volume 18, As

1:00

You Like It, only on this

1:02

week's Rule Breaker Investing. It's

1:07

the Rule Breaker Investing podcast with

1:09

Motley Fool co-founder David Gardner. Welcome

1:15

back to Rule Breaker Investing. Yep, we're

1:18

going Shakespeare on you this week. I'm

1:20

going to briefly summarize the play As

1:22

You Like It in case you've never

1:24

seen it before or would like a

1:27

refresher. But please rest assured,

1:29

this is an investing and business podcast.

1:31

So my five great quotes all pulled

1:33

from my favorite Shakespeare play, all five

1:36

of them are here to speak to

1:38

you specifically about your investing, but maybe

1:40

your business or your life.

1:42

As You Like It is one of

1:44

Shakespeare's most beloved comedies. It unfolds in

1:46

the forest of Arden, where characters

1:49

have escaped the tyranny of the court

1:51

and their society's constraints. The

1:54

play explores themes of love, identity

1:58

and transformation. Central

2:00

to the narrative is Rosalind, disguised

2:02

as a boy, Ganymede,

2:06

who tests the devotion of

2:08

her own beloved, Orlando. Meanwhile,

2:11

other characters engage in pursuits of

2:13

love and philosophical musings, culminating

2:16

in a series of no

2:18

spoilers, reconciliations, and marriages. The

2:20

forest setting allows characters to

2:22

explore different aspects of themselves,

2:24

leading to revelations and character

2:26

growth, highlighted by the famous

2:29

All the Worlds is Stage

2:31

monologue, which philosophically anchors the

2:33

play's exploration of life's stages.

2:36

It's also worth mentioning that

2:38

this play contains two, not one, but

2:40

two fools, Touchstone, who is

2:43

a traditional court jester, and then Jakey's

2:45

walking through the forest of Arden and

2:47

counters Touchstone far away, sees him in

2:50

his fool antics, and muses on what

2:52

a life that must be to be

2:54

a motley fool. Well, you

2:56

can probably imagine what one or two

2:59

of my great quotes are this particular

3:01

week, but without further ado, let's get

3:03

started. Great quote, number one. And

3:06

it runs like this. Well, the start of it goes,

3:09

all the worlds is stage and

3:11

all the men and women, barely players.

3:14

I'm sure you've probably heard that one before, and I'm going to

3:16

speak to it in the main, but it's such a great passage

3:19

spoken by Jakey's that I think it

3:21

deserves our quickly stepping through the seven

3:23

ages of man because I would feel

3:25

bad if after nine years of this

3:27

podcast, I hadn't given you the goods

3:29

on this. One of my favorite passages

3:31

from one of my favorite plays of

3:33

Shakespeare, all the worlds is stage and

3:35

all the men and women merely players. They

3:37

have their exits and their entrances. And

3:40

one man in his time plays many parts,

3:43

his acts being seven

3:45

ages. At first, the

3:47

infant mewling and puking in

3:49

the nurse's arms. And

3:51

then the whining schoolboy with his

3:54

satchel and shining morning

3:56

face creeping like snail unwillingly

3:58

to school. And then the

4:00

lover, sighing like furnace,

4:03

with a woeful ballad made to

4:06

his mistress' eyebrow, and

4:08

then a soldier, full of strange

4:10

oaths, and bearded like

4:12

the pard, jealous in honor, sudden

4:15

and quick in quarrel, seeking

4:18

the bubble reputation even in

4:21

the cannon's mouth. And

4:24

then the justice in fair

4:26

round belly, with good

4:28

cape on lined, with

4:30

eyes severe and beard of

4:32

formal cut, full

4:34

of wise saws and

4:37

modern instances, and so he plays

4:39

his part. The

4:42

sixth age shifts into

4:44

the lean and slippered pantaloon

4:47

with spectacles on nose, and

4:51

pouch on side, his

4:53

youthful hose well saved,

4:56

a world too wide for his

4:58

shrunk shank, and

5:00

his big manly voice turning again

5:02

toward childish treble,

5:05

pipes, and whistles in

5:07

his sound. Last scene

5:10

of all that ends

5:12

this strange eventful history, is

5:15

second childishness and

5:17

mere oblivion. Saw his teeth,

5:20

saw his eyes, saw his

5:22

taste, saw

5:24

his everything. And there

5:26

it is again, the famous line

5:29

spoken by the melancholy Jakeys, that's

5:31

act two, scene seven, of

5:34

as you like it, that's the full monologue,

5:36

the various stages of a man's life from

5:38

birth to death. Jakeys

5:40

uses that metaphor to highlight the

5:43

inevitable roles that we all play

5:45

throughout our lives, underscoring the transient

5:48

nature of existence, and

5:50

in some ways you could say maybe the scripted

5:52

roles that each of

5:54

us must enact. It's obviously

5:57

an oversimplification, but it is

5:59

an absolute clap. And the reason I wanted to

6:01

lead off with it this week is

6:03

because I think it's helpful to

6:05

recognize That we're

6:07

all playing roles and things out there

6:09

are playing roles And if you can

6:11

see the roles that

6:14

they're playing with self-awareness, that's

6:16

so helpful Let me

6:18

give a quick couple of examples

6:20

public companies You know stocks

6:22

the kind that we recommend or

6:24

don't at the Motley Fool for

6:27

me I've recognized the roles that they're playing

6:29

and I formed it up this way Listeners

6:32

of this podcast will know where

6:34

I'm headed here Some of them I think

6:36

are rule makers and

6:38

we grow up as kids in a society

6:40

where we kind of recognize the big dogs

6:42

out there Microsoft Walmart

6:45

the list goes on the companies that

6:48

have been so successful and

6:50

are such mainstays in our society that they

6:52

really are the ones that have

6:54

come to make the rules in

6:56

their industries and Without being nefarious

6:59

because for the most part I think these companies

7:01

are good. They're large employers They're

7:03

hiring lots of people Probably, you know some people who

7:06

work for these companies and they're trying to do the

7:08

right thing in the world Especially here in

7:10

the United States of America where I think we

7:12

practice conscious capitalism Better than most

7:14

other countries in the world, but by no means

7:16

are we the only ones? So these are the

7:18

rule makers and those are that's the phrase that

7:20

my brother Tom and I came up with as

7:22

we wrote Our third book rule

7:25

breakers rule makers we said, you know the

7:27

story of business and of investing is

7:29

the story of rule makers the Goliath

7:32

out there, but listeners

7:34

of this podcast will know I've always favored

7:36

the rule breakers the ones who come

7:38

along and They know not to

7:40

play the game The way Goliath wants

7:42

you to play because David's only going to

7:45

win if he takes a surprising and different

7:47

approach to competition those

7:49

are the companies breaking the

7:51

rules and so the story of business

7:53

and for me anyway the pattern recognition

7:56

That I've tried to give you and use myself

7:59

as I think about about the world around

8:01

us and think about what do I want

8:03

to buy stock in. The name of this

8:05

podcast is Rule Breaker Investing for a very

8:07

specific reason that I've just laid out for

8:09

you. I champion and love those companies that

8:12

think different and not just think different along

8:14

with Apple or Steve Jobs, but in fact

8:16

act different. They change the

8:18

game by introducing new products, new

8:21

services, using new technologies or new

8:23

business models. Those are the rule

8:26

breakers. And so when you recognize that all

8:28

the world's a stage, you start to be

8:30

able to see what roles different

8:33

players are playing. You can

8:35

start to see the bigger picture and

8:37

form strategy and have that

8:39

pattern recognition that I think is so helpful for

8:41

us as investors or for those of us

8:43

who are entrepreneurs as well, or just

8:46

intuitive fellow livers of

8:48

life pattern recognition, recognizing

8:51

what's on stage and who's doing

8:53

what. And I think it's worth mentioning before we go on to

8:55

quote number two, that the market,

8:57

the stock market over the course of

9:00

your lifetime in mind is going

9:02

to rise and it's going to fall. And

9:06

so it's helpful to see it for

9:08

what it is. It's going to make

9:10

exits and entrances. And

9:13

you as an investor in your time will

9:15

play many parts. And if you're truly

9:18

invested as I am for your whole

9:20

life long, then you'll recognize that sometimes

9:22

it's going to be good. Sometimes it's

9:25

going to be bad. And you're going

9:27

to foster resilience by investing all the

9:29

way through all the worlds of stage

9:32

and all the men and women and

9:35

companies too are

9:37

merely players. All right. On to

9:39

quote number two, this

9:41

line appears in act four, scene one

9:44

of as you like it. It's spoken

9:46

by Rosalind who's the protagonist. She's

9:49

disguised as a man, a boy

9:51

named Ganymede. As I mentioned

9:53

earlier, it occurs during a conversation with

9:56

Orlando. So this is the

9:58

man that she loves. but she's

10:00

disguised as a boy in Orlando's

10:03

unaware of Ganymede's true

10:05

identity. And this

10:07

quote cleverly hints

10:10

at the fluidity of identity and

10:13

the disguises, I would

10:15

say both literal and metaphorical, that

10:17

people wear. This is maybe

10:19

too grandiose a description for what is

10:21

a rather simple and great line. Here

10:23

it goes, Twas

10:25

I, but tis not I.

10:31

On the face of it, what the line

10:33

is saying, especially in the context of the

10:35

play, is that is something that I did

10:38

earlier, earlier in time, earlier in the

10:40

play, twas I. But

10:43

in so many words, I have changed. That's

10:46

not me anymore, tis not I.

10:50

You know, Amazon started as

10:53

a bookseller. I

10:55

still have my Amazon original

10:58

mouse pad here at my computer.

11:00

As I do this podcast, it

11:03

says Earth's biggest bookseller. Amazon

11:06

was, twas, just

11:09

a bookseller, but not

11:11

anymore. The

11:13

only constant in life is

11:16

change. Teladoc counted

11:19

for a whole lot when we

11:21

were all penned in for more than a

11:23

year because of an

11:25

unfortunate pandemic. And I

11:27

picked a five-stock sampler years ago called

11:29

Five Stocks for the Coronavirus right in

11:32

the face of that time. And

11:34

boy, if those stocks didn't soar over

11:37

the next year or so, because I had

11:39

indeed picked five great stocks for

11:41

the coronavirus. But here's

11:43

the good news, bad news, bad news first. The

11:46

bad news is those stocks ended up doing years

11:49

later horribly. It's

11:51

my worst ever five-stock

11:53

sampler even though some

11:55

of them had tripled in their

11:57

first year. That's the bad news. It was pretty bad.

12:00

Pretty much my worst five doc sampler and

12:02

longtime listeners will know through the review of

12:04

Palooza's how they did and what we ended

12:06

up concluding from that. That's the bad news.

12:08

The good news though, the good

12:10

news is the coronavirus is for the most

12:12

part over. And we're all back

12:14

for the most part to whatever we

12:16

think of as normal life or pre-pandemic

12:18

life. Most of us know we can

12:21

never go back and things have changed

12:23

in lots of profound ways, but the

12:25

only constant is change. And

12:28

that's a pretty good reminder. And Teladoc

12:30

these days is a pale shadow of

12:32

its former self because as it turns

12:35

out, when we all could only consult

12:37

a doctor from our den or our

12:39

apartment, that made a lot of

12:41

sense, but years later, maybe that's not

12:44

of as much interest. Of course, Teladoc

12:46

remains a stock that we've recommended and

12:48

back. I hope it comes back. Twas

12:50

I, but tis not I. It's

12:55

crucial for us as investors to stay

12:58

informed and responsive.

13:01

Don't hold on too tightly to

13:04

your past perceptions when new

13:06

data shows up and suggests

13:09

a different narrative. Twas I, but

13:11

tis not I. We

13:14

interviewed the CEO of Blockbuster on the

13:16

Motley Fool radio show back in the

13:18

day. And back in that day, Blockbuster

13:20

was the Goliath and Netflix was an

13:22

upstart. And I'm not going to blame

13:24

the management of Blockbuster. I'll let them

13:26

blame themselves. Or maybe it was just

13:29

the technology rolling over the

13:31

world like a steam roller. As Stewart

13:33

Branch has said, when a new technology

13:36

hits, it's like a steam roller. You're

13:38

either part of the steam roller or

13:40

part of the road. Blockbuster

13:43

versus Netflix is a great reminder for those

13:45

of us who've been around 20 years or

13:47

more of how the world really can change.

13:49

And you know, I don't sell very often

13:51

as an investor, but when I do, it's

13:54

generally for one of three standard reasons. And

13:56

one of those is that maybe

13:58

I've found a better stock. that

14:01

fits my portfolio goals or in some ways

14:03

replaces an older stock maybe a longer-term holding

14:05

you don't have to do this all at

14:07

once but if you start sensing the world

14:09

has changed enough on

14:11

one of the stocks in your portfolio you

14:14

might want to consider selling again I

14:16

don't sell very often the two other reasons I

14:18

sell usually are tax loss harvesting when I've just

14:20

given up on a stock and I want to

14:22

cash it in as a capital loss offsetting my

14:24

capital gains and the third

14:26

reason I'll speak to this a little bit

14:28

later is when a stock exceeds my sleep

14:31

number but each of these is generally about

14:33

recognizing that things were once one way but

14:36

they're not that way anymore

14:38

and before we move on to quote number

14:40

three let me just say it's not just

14:42

the companies themselves that we invest in that

14:45

change although they do we

14:49

change we change too one

14:52

man in his life as

14:54

Shakespeare wrote in quote one one man

14:56

in his life plays many parts

14:59

and that's why lifelong learning is

15:01

so critical for all adults what's

15:03

a way you can ensure that you don't have any

15:05

blind spots and that you can be relevant whatever

15:08

changes in technology occur

15:11

next Robert Brokamp did a great job on

15:13

last week's show speaking to this he said

15:16

at one point on telling

15:18

their stories Robert said he makes a

15:20

point of updating his resume

15:23

every year or two I'm happy to say

15:25

Robert's been with us for 20 plus years

15:27

it's not necessarily that he's looking for other

15:29

jobs at least we've loved having him

15:31

at the Motley Fool for 25 years or

15:33

so but that practice of saying

15:35

I did this new thing I

15:37

learned this new thing I can

15:39

put it up on my resume

15:42

is a demonstration to himself that

15:45

he's engaged in the lifelong learning

15:47

that we all need to be

15:49

especially in an increasingly technology driven

15:52

world I'll also mention crucial conversations that's a

15:54

book many of you will have read I

15:56

have to in fact we have a great

15:58

interview with the sea and one of the bright

16:02

lights of the crucial conversations world on

16:04

this podcast years ago, just go ahead

16:06

and Google Rule Breaker Investing Crucial Conversations

16:09

and you'll hear her and

16:11

me talking about crucial conversations. But one

16:13

of the key elements of

16:16

being a great listener and a participant

16:18

in really important conversations, especially when

16:21

they surprise us, all of a sudden that friend

16:23

or spouse or partner says something that really surprises

16:25

us and all of a sudden we realize we're in

16:27

a crucial conversation and

16:30

what you need to do in that context,

16:32

we learn, is to actively

16:34

observe, to pay a lot

16:37

of attention. And by

16:39

the way, not just to what is being said, what

16:41

is being felt by your

16:43

conversation partner, the Crucial

16:46

Conversations crowd, you can

16:48

get a certification in this by the way, this is

16:50

a professional practice these days, but they call it Learn

16:52

to Look. Learn

16:54

to look at content and

16:57

conditions, especially in conversational

16:59

contexts, they say learn to look

17:01

for silence or violence.

17:04

It's helpful to have words that nearly

17:06

rhyme for memory's sake. Learn

17:08

to look for silence in the conversation

17:10

that you're having. Is your conversational partner

17:12

starting to shut down? You probably need

17:14

to change your vibe. You only notice

17:16

this if you're actively observing or

17:19

instead of silence, are they opting for

17:21

violence, i.e. they're getting angry, they're getting

17:23

livid. You can see it in their

17:25

face, both signs, silence or violence, that

17:28

in this Crucial Conversation it's going the

17:30

wrong way. You can only realize

17:33

that if you're actively observing.

17:35

You can only realize that

17:37

the internet or artificial intelligence

17:39

or streaming services blockbuster might overtake

17:42

your business model if you're actively

17:45

observing in a world where yeah,

17:47

t'was I, but

17:50

t'is not I. All

17:53

right, onto great quote number three.

17:55

This one comes from Act 2,

17:57

Scene 1 of As You Like It.

17:59

It's spoken by Duke senior. These words

18:01

are part of his reflections on

18:03

exile because he's been exiled by

18:06

the court to the forest

18:08

of Arden and despite being

18:10

basically usurped from his

18:12

dukedom and sent into the forest

18:15

the Duke finds solace and happiness

18:18

in the natural simplicity and freedom.

18:21

Freedom from courtly pretensions he

18:24

begins to see his misfortune as a

18:26

chance to lead a more authentic a more

18:29

interesting life. And

18:32

here's the quote, happy is

18:34

your grace that

18:36

can translate the stubbornness of

18:38

fortune into so quiet

18:41

and so sweet a style. That

18:43

phrase stubbornness of fortune

18:46

that basically means the inherent

18:48

uncertainties of investing.

18:51

What's the market gonna do tomorrow

18:53

next quarter over the next five

18:55

years? What is that stock going

18:57

to report next quarter or

19:00

three years from now? The inherent uncertainties

19:03

of investing Shakespeare captures

19:05

pretty elegantly in the

19:07

phrase stubbornness of

19:09

fortune. So for those uncertainties that

19:11

stubbornness of fortune to be translated

19:14

into, here's the other part of

19:16

the line, so quiet and

19:18

so sweet a style is

19:21

for me anyway to hold,

19:24

to ride out the cycles quietly

19:28

and sweetly to buy

19:30

and to hold the investments

19:32

that you make in a world by the way

19:34

where most people don't. Most people

19:37

think in terms of three months

19:39

not three years. Most people if they

19:41

think in terms of three years they're

19:44

probably not thinking in terms

19:46

of three decades. And so

19:48

for me happy is your

19:50

grace that can translate the stubbornness

19:52

of fortune into so quiet

19:54

and so sweet a style. The style

19:56

that we're talking about is our classic

19:59

Motley Fool's Tale. style one heavily endorsed

20:01

and exemplified by my brother Tom

20:04

and by me. And it

20:06

leads to, for me, one of my favorite

20:08

words in the English language, serenity.

20:12

That's a word that any time I say

20:14

it, it just immediately a wave washes over

20:16

me and I small. And

20:18

it just calms me that word serenity.

20:21

It makes me think of the morning shower. I

20:24

bet you take a morning shower from time to time. I

20:26

do pretty much every day myself. Why do we

20:28

tend to have so many great ideas in the

20:30

shower? Is it the warm water rushing

20:33

over us? Well, probably that matters

20:35

some, but I think for many,

20:38

the most likely serenity we

20:40

can manage to inject in our

20:42

daily schedule is that five

20:44

to 10 minutes of time that

20:46

the shower gives you. And

20:50

look what ideas and perspectives we

20:52

gain from the shower. The

20:54

single best response you can make

20:56

for your financial future in the

20:58

face of market sell-offs is

21:01

to buy. That's

21:03

not easy, is it? When all your

21:06

instinct, probably the influencers in your life

21:08

on the television set at the water cooler

21:11

in your own home are

21:13

saying the opposite. And

21:15

that's, by the way, why it works. Because

21:18

when you're buying in the

21:20

face of market sell-offs, you're being

21:22

a fool, capital F, when

21:25

the wise thing to do is

21:27

supposedly follow others to

21:29

the exits. Now I'm

21:32

no hero at this myself. I feel

21:34

the same emotions everybody else does when

21:36

the market drops and we've seen it happen a

21:38

whole bunch of times in just the 30 years

21:41

of the Motley Fool or my 20 plus years

21:43

before that. And with

21:45

respect over the next 50 plus years

21:47

going forward, it always feels bad. But

21:49

that's why the single

21:51

great power tool that

21:54

will help you in Shakespeare's words

21:56

translate the stubbornness of fortune into

21:59

so quietly. And so sweetest

22:01

style is dollar

22:05

cost averaging. Is

22:07

saving some money every

22:10

two weeks from your paycheck. Is

22:13

lumping money up monthly if

22:15

you like or quarterly so

22:17

that on the same day every two weeks,

22:20

every month, every quarter, every

22:22

year, the same day, no matter what

22:24

the market's doing, you're buying.

22:28

You're taking those new savings and

22:30

you are investing them into the market.

22:32

That's called dollar cost averaging. You might

22:34

be buying the same stock over time,

22:36

each time. You're kind of averaging

22:39

out the dollar cost of that stock

22:41

as you add it at different points, high

22:44

and low. Any rule breaker investor

22:46

knows we like to add to our winners

22:48

typically. I like to add new money into

22:50

the market to the things that are going

22:52

up, not the things

22:54

that are going down. That itself is

22:57

a very contrary approach. Most people think

22:59

it's the opposite, but that single great

23:01

power tool to help you translate

23:03

the stubbornness of fortune into so

23:06

quiet and so sweetest style is just to

23:08

be buying, always

23:10

be buying ABB dollar

23:13

cost averaging. One of my

23:16

internet friends, Twitter fellow

23:18

fool, Matt Hard at 307

23:20

fool on Twitter. I know some people call

23:22

it X. I'm still going to call it

23:24

Twitter. Matt every Thursday

23:26

comes on and posts just a

23:29

few lines about the stocks that

23:31

he's just added to that Thursday,

23:34

every Thursday. In

23:37

the face of markets going

23:39

up and down, news headlines

23:43

roiling our economy and sometimes our world,

23:45

Matt and his ilk, I would say

23:47

probably a lot of fellow fools hearing

23:49

me right now, recognize

23:52

that translating the stubbornness of fortune into

23:54

so quiet and so sweetest style is

23:58

just to be there every Thursday. or

24:00

every blank whatever your rhythm

24:03

is. All right, on

24:06

to quote number four. So

24:08

a context setter for this one. This is

24:11

advice given by Rosalind, the

24:13

heroine of the play, still

24:15

disguised as Ganymede. She's

24:17

giving it to Phoebe in Act

24:19

III, Scene 5. Now, Phoebe

24:22

is out there on the countryside. She is a

24:25

proud shepherdess. And

24:28

she is being wooed by Silvius, who

24:30

is kind of a country bumpkin and

24:33

doesn't seem very effective in his wooing. They're

24:35

both comic figures in the second half

24:37

of the play. So this

24:40

advice is given by Rosalind to Phoebe,

24:43

who's scornfully rejecting the love

24:45

of Silvius. And Rosalind's warning

24:47

her to be more

24:50

pragmatic in her romantic choices because

24:54

she might not always keep

24:56

attracting suitors. It's

24:58

a humorous but pragmatic reminder of

25:00

the fleeting nature of opportunity, shall

25:03

we say. And here's great

25:05

quote number four. Sell

25:07

when you can. You

25:09

are not for all markets. First,

25:13

I just love that Shakespeare turned romantic

25:15

advice into the language of business and

25:17

investing. I think that's in part why

25:19

when you next see this production, wherever

25:21

you are, whenever it happens for you,

25:24

that line, sell when you can, you are not

25:26

for all markets, gets a big laugh every time.

25:29

And while this great quote is largely

25:31

focused, obviously, on the more serious work of

25:34

Rule Breaker Investing, extracting investing

25:36

truths this week from the bar, let's not

25:38

forget that as you like it, it's

25:40

a comedy. It's actually my favorite

25:42

Shakespearean comedy, actually my favorite Shakespearean play.

25:44

And don't we love people

25:47

who make us laugh? And

25:49

Shakespeare does that as well

25:51

as anyone. You know, I came

25:54

across this great line from Audrey

25:56

Hepburn, the phenomenal old school Hollywood

25:58

starlet who said once, I

26:00

love people who make me laugh. I

26:03

honestly think it's the thing I

26:06

like most to laugh It cures

26:08

a multitude of ills. It's

26:10

probably the most important thing

26:13

in a person and Quote that's

26:15

not a Shakespearean great quote But I do

26:17

love that Audrey Hepburn quote because yeah, I

26:19

do too. I bet you do too I

26:22

love people who make me laugh

26:24

sell when you can you are not for

26:26

all Markets we can

26:28

certainly think of companies. I already referenced

26:30

a few earlier Didn't really

26:33

manage to translate their success from one

26:36

Technology era into the

26:38

next this is probably the number one

26:40

reason that rule breakers emerge When

26:42

new technologies show up all of a

26:44

sudden the opportunity to break the rules

26:47

Emerges as well, and I think of the

26:49

ones that have really worked out. I already

26:52

mentioned Amazon Nvidia

26:54

one of my maybe my greatest stock pick

26:56

of the last 20 years Just

26:58

a phenomenal company in a number of times in

27:01

the past with this podcast I've told

27:03

you the story of where I

27:05

recommended Nvidia what it did next

27:08

when I Re-recommended it what was happening you

27:10

can go back and Google this I'm not

27:12

going to go through this again But the

27:14

roller coaster of having held Nvidia

27:16

stock Which tripled and then gave it all away

27:18

and then did nothing for five years and went

27:21

sideways and all of a sudden Years

27:23

later. It's up hundreds of times in

27:26

value You'll recognize the incredible benefit

27:28

to not listening to Rosalind's advice

27:30

sell when you can you

27:33

are not for all markets and Almost

27:36

any time in the last 25 years.

27:38

It was a wrong move to sell

27:41

Amazon calm That even

27:43

includes when Amazon dropped from 95 to 7 I

27:47

just kept holding it didn't feel good at all by the

27:49

way Have you ever had a stock do this to you

27:52

do something that bad to you? I

27:54

have not the only one watching a

27:56

company lose 85% plus of

28:00

its value and keep holding it. And

28:03

once you see what eventually happens to Amazon,

28:05

if you held it all the way through,

28:07

you've been given a front row seat to a

28:10

play that most people will never see. And

28:12

the inspiration and the insights that you get

28:14

walking away from that experience can enrich the rest

28:17

of your life as it has indeed mine. But

28:20

not every company is Nvidia. Not

28:22

every company is amazon.com. I think of AOL. That's

28:25

where The Motley Fool launched. Back in the

28:27

day, AOL was a true

28:29

rule breaker that became a rule

28:32

maker, especially when it merged with

28:34

Time Warner in the year 2000, I

28:36

think it was. And that was pretty much the

28:38

peak for AOL stock. It was pretty much all

28:41

down from there as increasingly broadband

28:43

took over and dial-up over your

28:45

telephone became the old-school way that

28:48

you probably wouldn't anymore want to

28:50

access the internet because it was

28:52

really slow. And you

28:54

could get knocked off your line on your phone

28:56

in a way that broadband doesn't. Broadband

28:59

killed the AOL Radio Star. And

29:02

it's a reminder sometimes it

29:04

is the right move to sell

29:06

when you can because sometimes not

29:08

every company is for all

29:10

markets. I already mentioned earlier

29:13

the three typical reasons that I

29:15

sell. And one of them

29:17

is once a stock has

29:20

overgrown my sleep number. And

29:23

I referenced that very briefly. Let me go

29:25

back there now and just remind you of

29:27

what I mean by that phrase. Again, longtime

29:29

listeners know exactly where I'm headed. We have

29:31

many new listeners every week and every year.

29:34

So I never assume everybody already knows all

29:36

my rule breaker investing language. What

29:38

is your sleep number? Well, those of us who

29:40

have an intelligent mattress, I don't have one of

29:42

these. But I know that some mattresses you can

29:44

dial the firmness of the mattress up or

29:46

down based on the sleep number. Tickets zero

29:49

to 100 where 100 would be the

29:51

rock hard mattress that most of us would never

29:53

want to sleep on. And zero

29:56

would be the ultimate in wishy washy.

29:58

End up in a puddle of you. somewhere on

30:01

a spot somewhere on that sunken mattress. So

30:03

zero to 100 is the sleep

30:06

number for mattresses, but I've co-opted that

30:08

phrase because I love this way of

30:11

thinking about your sleep number. Your sleep

30:13

number, dear listener, is the percentage that

30:16

you would allow your largest position

30:18

in your portfolio to occupy of

30:20

the overall pie of

30:22

your portfolio. What percentage would you allow

30:24

that to be and still be able

30:27

to sleep at night? So

30:31

quick examples. A lot

30:33

of people have a sleep number probably somewhere around 10 because

30:36

once a stock gets to be let's

30:38

say 10% of their whole portfolio, 10%

30:41

maybe of everything they have in the

30:43

world, they based on their own

30:45

internal instincts or maybe those older people who once

30:47

coached them say, you know, I think

30:49

I should sell this one off back down

30:52

to 10% because I can't sleep at night.

30:54

The thinking goes, if this thing is worth,

30:56

if anything is worth more than 10% of

31:00

my overall net worth, that's a perfectly

31:02

valid reason to sell and

31:04

indeed most of my own selling over

31:06

the course of my life has been because a

31:09

stock, a single stock, has just outgrown

31:11

my own sleep number. So

31:13

AOL was one of those companies back

31:15

in the day that when it went

31:17

up 150 times in value

31:19

after our recommendation in 1994 when by the

31:23

year 2000 it was up 150 times

31:25

in value, if you ever have a stock that does

31:28

that in your portfolio, it's going

31:30

to occupy a very large percentage of

31:32

your portfolio usually upwards 80% or

31:35

more unless you're selling it off

31:37

piecemeal here and there maybe donating some shares

31:39

at that charitable time of year. That's a

31:42

nice thing to do too unless you've been

31:44

giving away piecemeal through

31:46

one way or another. If you don't, you're

31:49

going to end up with a gigantic single

31:51

holding dominating your overall

31:53

portfolio. That's what great rule

31:55

breakers like Amazon, Nvidia, Starbucks,

31:58

Intuitive Surgical, The

32:00

list goes on and on of Rule Breaker

32:02

companies that have done this to Motley Fool

32:04

member portfolios. And that's why it's important to

32:07

establish your sleep number, to know ahead of

32:09

time what is that number that you just

32:11

won't sleep well at night if any stock

32:13

represents more than that for

32:16

your portfolio. So getting to know ourselves

32:18

as investors is such a valuable thing

32:20

to do. Sell when

32:22

you can, you are not for all markets.

32:24

So one reason to sell when you can

32:26

is when a stock has

32:28

exceeded your sleep number. My favorite

32:31

reason to sell. You know,

32:33

in conclusion on quote number four, it's

32:35

worth pointing out your life

32:38

is is actually for all markets.

32:40

I've already spoken to that. If you're investing

32:42

for life as I am, that means you're

32:44

staying on the boat. I like to

32:47

call it the ship of fools. You're you're

32:49

aboard the ship of fools your whole

32:51

life long. And so that

32:53

line, that advice from Rosalind, sell

32:56

when you can, you are not for all markets.

32:58

I want to say this back to Rosalind on

33:01

behalf of Rule Breaker investing. If

33:04

you buy and hold for life, you are going

33:06

to live through every good and bad market. Far

33:09

more good than bad, but but

33:11

every bad market, too.

33:13

And so I wouldn't take

33:15

this advice as a suggestion. You should try

33:17

to time your way in

33:19

and out of market cycles or

33:22

trends or your favorite

33:24

stock. So that final thought as

33:27

we close out the penultimate great

33:29

quote this week, quote number four, sell

33:31

when you can, you are not

33:33

for all markets. Which brings us

33:35

to great quote number five. Long

33:38

time listeners will remember I I do try to

33:40

say best for last many a time, not every

33:43

time. But I think I've tried

33:45

to do it once again here because

33:47

my favorite quote, the greatest

33:49

quote in my mind anyway from as you

33:51

like it is from Act

33:53

Two, Scene Seven. It's spoken

33:55

by Jake Wiese as

33:57

he describes meeting the court justice.

34:00

touchstone in the

34:02

Forest of Arden. I mentioned this at the

34:04

top. Jake Gweese is fascinated by

34:07

touchstones, witty insights, and he's dressed

34:09

up in a fool's garb. But

34:11

Jake Gweese sees the depth, the

34:14

wisdom that's hidden beneath, folly.

34:17

And the scene, Act Two, the whole

34:19

scene celebrates the subversive wisdom

34:21

of the Fool. It is the greatest

34:23

scene in all of Shakespeare, I might

34:26

say the greatest scene in all of worldwide

34:28

drama, celebrating fools

34:32

and foolishness. Of course a recurring

34:34

theme, especially in Shakespeare's works.

34:36

Great quote number five, a fool,

34:39

a fool. I

34:42

met a fool in the forest,

34:45

a motley fool. It was that

34:48

very line that gave birth to

34:50

our company name. I was flipping

34:52

through a book of quotes. It was the Penguin

34:54

book of quotations. It was April

34:57

of 1993. We were going to launch

34:59

our first edition of our

35:02

print newsletter, The Motley Fool, in

35:04

July of 1993. So it's about six weeks

35:06

beforehand. I'm trying to figure out what are

35:08

we gonna call this thing? I talked to

35:10

my brother Tom and our pal, our co-founder

35:13

Eric, and we were all trying to

35:15

figure out what would we call our new investing

35:18

print newsletter. And it was that

35:20

very line that jumped out

35:22

to me as I, it's kind of a nondescript

35:24

line, a fool, a fool. I met a fool

35:26

in the forest, a motley fool. But as I

35:28

sat there I was thinking that's actually kind of

35:31

a good position to be coming from. Because

35:34

we're all gonna be fools, small f. We're

35:36

all gonna make, I've made so many

35:38

mistakes over the course of my first 57 years. We're

35:41

all gonna make mistakes throughout life. Therefore

35:43

some of our stock picks are gonna

35:45

be bad. Therefore it's good to have

35:47

told people ahead of time that we're

35:49

fools. Maybe you're a fool too, dear

35:51

listener. Dear reader, we would have

35:53

said back in the day, we're all fools.

35:56

But it's also worth pointing out that it's a

35:59

lot of fun. When you are winning

36:01

when you're doing things well when is touchstone

36:03

you're impressing those others who are seeing you

36:06

far away in the forest looking at you

36:08

admiring what you're doing is that great rather

36:10

than the pump yourself up and say, yeah

36:12

i'm michael jordan or i'm elon

36:14

must just say. I feel

36:17

we're full so whether things

36:19

are going well or whether things are going

36:21

poorly. Calling oneself

36:24

a fool always works

36:26

and i'm so glad that tom

36:29

and eric agreed and that we all

36:31

decided to launch the motley fool as

36:33

a print newsletter first issue july nineteen

36:35

ninety three and everything that's

36:38

come since and so many good things

36:40

have come. Since kind

36:42

of derived in some ways from that

36:45

line from act two seen seven

36:47

of as you like it so much of the motley fool

36:49

today rule breaker investing itself.

36:53

It resonates deeply with this

36:55

ethos celebrating the

36:57

wisdom that can be hidden within

36:59

folly it's a core principle

37:01

that shaped our approach to investing and life

37:03

i hope yours. Two so

37:05

that's the first thing i want to say

37:08

just about that line itself it's significant to

37:10

me personally but i hope to

37:12

you and historically. To literature

37:15

into the world what it says is

37:17

so powerful i love it so

37:19

much act two seen seven of as you

37:21

like it you know as i was thinking

37:24

more about it i was thinking about

37:26

how to encapsulate the value of unconventional wisdom

37:28

the power of seeing. The world differently i

37:30

mentioned earlier apples line steve jobs is line

37:32

think different i was also reminded that

37:34

our very first newspaper column within smart money

37:37

magazine we're invited by smart money in the

37:39

first year two of our business once

37:41

we launched on a well we had a

37:43

following they're like hey guys. Why

37:46

did you take over this column the previous writer

37:48

has left and we love for you to do

37:50

it and what was the title of that column. Unconventional

37:52

wisdom it was really rather perfect

37:55

now think about in retrospect in

37:57

About a year and we think we probably

37:59

start turning in our. Hamza. They are too

38:01

late. We were getting a little slower distracted.

38:04

We decided let's stick with the internet. maybe

38:06

not with print media. I. Remember I

38:08

think we hit it off that com the Roger Lowenstein

38:10

who. Sure did a much better job

38:12

than we did, but. thinking. Different

38:14

An acting differently that on

38:16

conventional. Wisdom. That's with

38:18

stocks. I. Love, define and

38:21

Strategies. I. Love to find the ones

38:23

that seem foolish. Small s. To. The

38:25

consensus. but they hold. On.

38:27

Tapped potential. I. Think

38:29

for example of the third trait of rule

38:31

breakers stocks. Outstanding past.

38:34

Price appreciation. Most.

38:36

People here buy low sell high so they

38:38

think you should find all the penny stocks.

38:40

All the things that I've really low numbers

38:43

or have gotten crushed or kicked off into

38:45

the gutter. Those. Are the stocks

38:47

you sit by? And if everybody thinks

38:49

that, if that's the conventional wisdom, you understand

38:51

why. rule breakers. Like. Me and I hope

38:53

you. Prefer. The exact opposite.

38:56

I. Like to buy stocks that have done

38:58

great. That. Are doing great and

39:00

have done great. And that very trade has

39:02

been implicit in any of the great stocks

39:04

I've mentioned in this episode. From and Video.

39:07

To. Amazon the list goes on. Amazon had

39:09

doubled in the months leading up to our

39:11

first recommendation of it. It was painful by

39:13

the way to be knowing I was gonna

39:15

be recommending it and researching and some and

39:18

riding up the report as the stock doubles

39:20

in the weeks leading up to our recommendation,

39:22

but it took me a few years later

39:24

to recognize that's actually a great trait you

39:27

should be looking for in the stocks. The

39:29

rule breakers that you're thinking of investing an

39:31

outstanding. Past. Price appreciation.

39:34

The. Third trade, it works so well.

39:36

Again, because it's unconventional. A. While.

39:41

And I guess is one last thing that

39:43

I want to identify that. Brings.

39:45

A big smile to my face as I share it

39:47

with you. Next. time you go to

39:49

a shakespeare play or read one and i'm

39:51

quite sure many of you have done more

39:53

this that i have in the course of

39:55

my life i just have an undergrad english

39:57

degree i took a few shakespeare courses by

40:00

no means an expert, but once

40:02

you start to identify who the fools

40:04

are, especially in his comedies, and

40:07

start cheering them on, that's

40:09

pure fun. If Shakespeare's

40:11

fools have a unique view of

40:13

the world, it's often laced with

40:15

humor, of course. I'm not sure

40:18

there are many other characters that people

40:20

of all ages can get behind,

40:22

can cheer on, can see themselves

40:25

in. Then these

40:28

fools, these truth-telling,

40:30

wisdom-weaving wisecrackers,

40:32

once we start to see we're

40:34

on their side, it

40:37

brings us a sense of joy and liberation.

40:41

And I would say similarly, rule breaker

40:43

investors, we find joy in

40:46

pursuing that road less traveled. Embracing

40:50

this playful and

40:52

fearless approach to investing not

40:55

only will differentiate you from the crowd, but

40:57

also it enhances your

40:59

own satisfaction when you

41:02

win, because you've aligned

41:04

your actions with your own

41:06

conviction, with

41:08

unconventionally wise insight, rather

41:12

than following the herd. That

41:14

is the most fun way to

41:17

win of all. That's

41:19

what leads to a far

41:21

more fulfilling and

41:23

interesting life. Well

41:26

there you have it, five of my

41:28

favorite great quotes from Shakespeare's

41:30

greatest play as you

41:32

like it, just to summarize all the world's

41:34

stage and all the men and women

41:36

merely players. Quas I, but tis not

41:39

I. Number

41:43

three, happy is your grace that

41:45

can translate the stubbornness of fortune

41:47

into so quiet and

41:50

so sweet a style. Number

41:53

four, sell when you can, you are

41:55

not for all markets. And

41:57

finally, a fool, a fool.

42:00

I met a fool in the forest. A

42:03

Motley Fool. All

42:07

hallways, people on this program may have interest in

42:09

the stocks they talk about. And the

42:11

Motley Fool may have formal recommendations for or

42:13

against. So don't buy or sell stocks based

42:15

solely on what you hear. Learn

42:18

more about Rule Breaker Investing at

42:20

rbi.school.com.