Stock Stories, Vol. 2: He Got a Box, They Got the Bucks

In the common parlance of Wall Street, a "story stock" is one for which the numbers may not have arrived yet, but the narrative has -- and it's compelling enough to make investors buy essentially on spec. But from the perspective of Motley Fool co-founder David Gardner, every addition a Foolish investor makes to their portfolio has a story behind it, and on this week's episode of Rule Breaker Investing, he invites several of our analysts into the studio to share some of their favorites.

But for his final segment, he has offered a story from a special guest: New York Times best-selling author Dan H. Pink, a big thinker in the fields of management, work, and human behavior. During the tour for one of those books, he met a "super creative guy" who told him about what he described as a crazy idea for a business. Even crazier was one of the ways they raised a bit of seed money for it. And craziest... well, we'll let him tell it.

A full transcript follows the video.

This video was recorded on June 6, 2018.

David Gardner: We have celebrated author Dan Pink, a good friend of The Fool, here with his stock story. Since I already know this one, because he told it at FoolFest last week, I'm pretty sure I can tell you, he's going to top us all with what you're about to hear. Dan, take it away!

[...]

Dan Pink: Once upon a time, in the middle of the first decade of this century, I wrote a book called A Whole New Mind. It had an orange cover. One of the ideas in the book, which I'm not sure is totally right anymore, was that, I had this argument that the MFA, the Masters of Fine Art, is the new MBA. The MFA is the new MBA, because a lot of MBA skills can be outsourced and automated. The skills of an MFA, the Masters of Fine Art, are harder to outsource and harder to automate, therefore they would be more valuable. The MFA is the new MBA.

That idea got me invited to a lot of art and design schools, [laughs] because everybody loves confirming their own biases. In the course of this, I went to the Rhode Island School of Design, one of the premiere art and design colleges in America. It's an incredible institution. There, I met a young man. I'm not going to tell you his name. I'm just going to tell you, I met a young man who came up to me after the speech and talked to me a little bit, and then sent me an email afterwards and asked me some questions. And I responded to the email. He seemed like a good dude. I liked this guy, I thought he was super creative.

Maybe a year later, two years later, he emailed me. I thought he was just a super creative guy. He said, "I have this crazy idea for a business," and he told me about the business, and I thought it was absurd, it was just an absurd idea.

But, as a way to raise money for it, because he was a pretty skilled designer and a very creative guy, he decided -- this is now 2008 -- to do a set of limited edition cereal boxes. This is going to sound weird. Limited edition cereal boxes, where he and some of his design colleagues created these two boxes of cereal -- literally, it had cereal in it. One brand was called Obama O's. Hope in every box. And the other one was called Cap'n McCain's. And they said, "To raise a little bit of money, we're going to do these limited edition cereal boxes."

They're actually works of art in a limited edition, and each cereal box had stamped on it, No. 4 of 500, No. 6 of 500, or whatever. And I thought, "That's pretty good!" I actually really enjoy fine art, particularly conceptual art. Like, I like going to the Hirshhorn, and I like the more outré, forgive my French, kinds of art, and these kinds of wacky things. And they were selling it, and I like this guy, and I said, "This guy could be a famous artist one day. It'd be really cool if this guy were, like, the next Andy Warhol or Jeff Koons or something like that, and I had one of his early pieces."

So, for a tiny little amount -- literally, I think they were $75 a piece -- I bought these things. And I said to this young man, "This is totally cool. I mean, it's cool that you're raising money for this business, but I'm buying these things because I think you could probably be a well-known artist, and this is my investment, but I would never put a cent into your company."

So, I have in my office -- I think David might have seen these -- these cereal boxes. They look really nice. They're super cool-looking. Obama O's and Cap'n McCain. And on the top of it, it says, "A product of AirBed and Breakfast."

Thank you.

So. You know that old line, the country song, it's like, "You got the coal mine and I got the shaft?" I didn't want to say his name to tip it, but it's a fellow named Joe Gebbia, who is now, I don't know, what, the 41st richest person in the world. So, Joe got the billion-dollar company that's going to go public next year, but I have my cereal, man!