With the polar vortex hammering down on a large part of the U.S., it seems appropriate to serve up a warm bowl of feel-good chicken soup stories. A poem or two, a peek behind the RBI curtain, maybe a board game...and of course a thought or two about investing.
A full transcript follows the video.
Check out the latest earnings call transcripts for companies we cover.
This video was recorded on Jan. 30, 2019.
David Gardner: Two numbers for you: 39 and 34. Am I being mysterious again? I say again because last week, I gave to you my first five-stock sampler of the year of 2019, picked five stocks for you. If you missed that, you might be interested in the title: "Five Stocks Shrouded in Mystery." Again, when I lead off this podcast saying, "I have two numbers for you: 39 and 34," you might think I put my trench coat and spy glasses back on, and I'm being coy. Thirty-nine and 34. Both get quick explanations.
As I told you last week, this podcast is our mailbag, your mailbag. It's the last Wednesday of the month, after all, so it must be Rule Breaker mailbag, which it is. We've done this together every single month since November 2015. I counted that. Thirty-nine months. Thirty-nine times. Thanks for a 39th time, then, for all your questions, stories, notes of encouragement, and inspiration! Your 39th mailbag is coming up.
Thirty-four? Well, that's the number of pages of your mailbag submissions I just read through over the weekend in order to put together this podcast. Thirty-four pages! I was floating on a boat last week. More about that later. I'm amazed to come back to so much great material. I read all of it. I read all of it every month. Thank you for that!
It's the January 2019 Rule Breaker Investing mailbag this week on Rule Breaker Investing!
__
Gardner: Welcome back to Rule Breaker Investing! You know, you can't hear what my producer Rick Engdahl whispers in my ear because I have headphones on. Those of you who watch this podcast on YouTube see me with my headphones every week. But if you're just listening to this on iTunes or Google Play or Spotify or what have you, you won't realize that I have headphones on, and Rick whispers little things in my ears sometimes during the podcast. He just whispered, "That was kind of a long read for brevity." [laughs] Which is is probably true.
All right, welcome back! It's a delight to be home. It's not always that awesome to return from the Virgin Islands, where I had the pleasure of spending last week, come back to 20 degrees Fahrenheit temperatures in Washington, D.C. And yet I love this podcast! I love the time that we spend together! So it is a true delight to be back! And I love what you've sent me for this week's mailbag!
Have you ever read a Dummies book? I think a lot of people have probably read at least one Dummies book. Personal Finance for Dummies, let's say, or Information Technology for Dummies, or Great Italian Cooking for Dummies. I'm making these titles up. There are a lot of Dummies books out there. In an earlier age of The Motley Fool, we were contemplating -- maybe 15 years ago or so -- it still sometimes sounds like a good idea to me today of coming out with a group of Fool books, because the same publishing firm that was doing the Dummies books was like, "Hey, you guys should do the ____ for Fools books." It would just be personal finance and investing and business. It would be within the sweet spot of The Motley Fool's focus on business and investing. Maybe it would be Accounting for Fools or 529 Plans for Fools. None of these books actually exist because we never did it because the business model of paper publishing didn't feel as important as what the internet was doing to our business at the time, and we've never looked back.
All that said, this is by way of introducing the general theme of this mailbag this week. In addition to the long-running, still-presently running Dummies books, and the Fools books that never have yet come to be, there was another group of books, none of which I ever read, but I'm sure some of these titles will be familiar, especially to my American listeners. That would be the Chicken Soup for the Soul books. I was just doing a little research thanks to my best research tool, the one that I tend to use every day, let alone every week, Wikipedia. Just looking up the list of Chicken Soup for the Soul books, I was astonished by how many Chicken Soup for the Soul books exists. If the Dummies books were instructive, teaching you something, a new trade, a new hobby, the Chicken Soup for the Soul books were similarly serialized across all different kinds of interests, but all of them were basically short inspirational stories.
The reason I'm mentioning this -- it may sound like a digression -- is because that's my focus this week on the mailbag. Since I was out of the country last week, and I didn't really have time to do hard due diligence on various accounting terms I'm being asked about in mailbag requests, or what to do with your 529 plan, those kinds of more personal finances stuff, and I didn't have time to line up my guest stars, which I usually do, bringing in various beloved favorite Fools from around our office to speak to you on this podcast -- I realized I would only have time to do it myself. So why not select, from my 34 pages of submissions, some of the best stories? Chicken Soup for the Fool. Chicken Soup for the Fool on this week's podcast.
Before we get started -- and we have eight of them. Not all of them, by the way, are inspirational stories. But that's the tilt of this week's podcast. But before we get started, I would like to encourage anybody who's listening and is either looking at their phone, can look down at their phone, which they're listening from, or if you're near a computer, feel free to pull up Wikipedia's entry for Chicken Soup for the Soul books. For a lot of longer Wikipedia entries, there's a little contents gray box with the contents that gives you a hyperlink down through, and you know there have been a lot of Chicken Soup for the Soul books when the contents read like this:
- Original
- A-B
- C-D
- E-G
- H-M
- N-P
- R-S
- T-W
This is an amazing number of Chicken Soup for the Soul books. Credit to those who ran this franchise, I won't say into the ground, but into the skies, with hundreds and hundreds of Chicken Soup for the Soul books. OK, so, Chicken Soup for Fools.
Looking over my 34 pages, I see finance questions, I see book recommendation requests, I see some sharing of pet peeves. We'll have at least one of those this show. Love it, so many good ones. Martin Triggs, longtime listener and correspondent. Martin, you requested karaoke on the show. We might bring that out at some future podcast. So, I had a motley array of requests. But we're mainly focusing this week, again, on Chicken Soup for the Fool.
All right, Rule Breaker mailbag item No. 1. By the way, little hint of how I structure this show. Often for mailbags, I'll lead off with one of the best ones, No. 1. And I'll typically close the show with my favorite one. That will be No. 8 this week. So you know this leadoff is going to be good, and it sure is. From Ben Goland.
Ben writes, "Dear David, I was inspired today after listening to your 26th December mailbag podcast," that was last month's mailbag, where we featured the Poetry of Rule Breaker Investing, which was largely poems that you, my listeners, have written about investing, business, or Rule Breaking, and I read and shared with one month ago. Anyway, Ben goes on, "I was inspired to pen my own poem. Heavily inspired by Brian Bilston's famous poem Refugees, this is my own, titled Fool. I hope you enjoy it."
I'm just going to read Ben's poem. It's fairly short. Very well done. Here we go. It's entitled Fool.
"The market is crashing
So do not tell me
Suffer a Fool gladly
We need to see this for what it really is
Sell
Double down
Get out
This is no time to
Let winners run high
Add up
Take the long view
We should
Think short term
We cannot
Find top dogs
Find sustainable advantages
Find good management
Instead let us try and
Time the market
It's not correct to say
These are people just like us
Investing is for the professionals
Do not be so stupid to think that
You can beat the market"
That was "Fool" by Ben Goland. I'm sure those of you who really know what I think and have listened to this podcast at least once would probably think, "What was Ben thinking, and why did David just read that poem?" It seems to go against everything that I stand for and we believe here at The Motley Fool and Rule Breaker Investing. Now, Ben is from London, so I could have faked my British accent. But you might think, "Maybe he doesn't really understand this podcast very well." In fact, it inspired me to look up the poem he's referring to, Brian Bilston's "famous poem," that's according to Ben, my Foolish correspondent. The title of the poem, Refugees. And then I started to figure out what was going on here.
Now, I know some of you are going to be familiar with Brian Bilston's Refugees poem. I'm going to share that in a little bit. But the key thing at the bottom of Bilston's famous poem, which was published, I think, on Twitter, because Brian Bilston is apparently the poet laureate of Twitter, at the bottom of Brian's poem Refugees, the last line reads in parentheses, "now read from bottom to top." And when you read Refugees, his poem, that way, it reads differently.
Let me first do that for our friend, Ben Goland's poem, Fool. Because at the bottom, Ben wrote, "now read from bottom to top." So, here comes Fool the other way. Remember the last line? "Do not be so stupid to think that / You can beat the market." "You can beat the market" was the last line. Well, that's the first line of this rendition. Let's go!
"You can beat the market
Do not be so stupid to think that
Investing is for the professionals
These are people just like us
It is not correct to say
Time the market
Instead let us try and
Find good management
Find sustainable advantages
Find top dogs
We cannot
Think short term
We should take the long view
Add up
Let winners run high
This is no time to get out
Double down
Sell
We need to see this for what it really is
Suffer a Fool gladly
So do not tell me
The market is crashing"
Well done, Ben! And thank you for sharing that! If we ever do another Poetry of Rule Breaker Investing, Ben, I'll be sure and share that again, because I love what you did there, and I see what you did there. I know there are probably some Brian Bilston fans listening to this who maybe got it from the beginning, but I wasn't familiar with that. So I went back, as I mentioned, and read the Refugees poem, written in 2016, published on Twitter. Since Brian Bilston -- I'm not sure if that's his pen name. I think he's a Brit. I think it might be his real name. He tends to take pictures of himself silhouetted, so you can't really see his face that well, and he's smoking a pipe a lot of the time. I think this is all real. I'll tell you this much, his poem, Refugees, is real. It was published in 2016. I thought was pretty awesome. Let me share it. Of course, very timely. Here's how it's read top to bottom, then I'll reverse it. Top to bottom, Refugees, here we go.
"They have no need of our help
So do not tell me
These haggard faces could belong to you or me
Should life have dealt a different hand
We need to see them for who they really are
Chancers and scroungers
Layabouts and loungers
With bombs up their sleeves
Cut-throats and thieves
They are not
Welcome here
We should make them
Go back to where they came from
They cannot
Share our food
Share our homes
Share our countries
Instead let us
Build a wall to keep them out
It is not OK to say
These are people just like us
A place should only belong to those who are born there
Do not be so stupid to think that
The world can be looked at another way"
And at the bottom of Refugees, Bilston writes, "now read from bottom to top."
"The world can be looked at another way
Do not be so stupid to think that
A place should only belong to those who are born there
These are people just like us
It is not OK to say
Build a wall to keep them out
Instead, let us
Share our country
Share our homes
Share our food
They cannot
Go back to where they came from
We should make them
Welcome here
They are not
Cut-throats and thieves
With bombs up their sleeves
Layabouts and loungers
Chancers and scroungers
We need to see them for who they really are
Should life have dealt a different hand
These haggard faces could belong to you or me
So do not tell me
They have no need of our help"
All right, before we get to Rule Breaker mailbag item No. 2, I'll just mention, for some of you, those words read really true, especially that second way I read it, but I'm not here to make a political point. Some of these things seem very au courant. In general, I'm for openness, open borders, and globalization, if you didn't already know that about me. But I'm not particularly political as a person. What I appreciate about this is the poetic creativity of something that can be read one way, flipped over and read the other. It kind of makes its own point. But back to Ben Goland, our correspondent, I love your Fool poem! Thank you, Ben!
Rule Breaker mailbag item No. 2. This is from my new friend, Ben Goland. Guess what? Ben followed up his poem with a separate note and told this story, which I thought was great. It starts, "Dear David, after catching up on last week's podcast, I thought I'd send a follow-up email. Unless someone else's penned some poetry, I think I may be getting a mention. I thought I'd share a bit of my investing story with you. You've been involved from the start, but didn't know it." Again, this is from our new poet, Ben Goland, his story.
"During my second year of university, I realized I wanted my money to work as hard as I thought that I was. I reached out to a friend's father for some help in starting to navigate the investing world, as I knew he did something related. Well, it was my luck that man was David Kuo, now CEO of The Motley Fool Singapore. David was working in London and sent me starter books on investing, links to The Fool website and offered me work experience. In fact, the two weeks I spent at Fool UK" -- presumably as an intern -- "were two of the most important weeks of my life. The team helped me understand what it was to be an investor, a part owner in a business; how to build a portfolio; most importantly, gave me the confidence to act. That was seven years ago.
"I was even a guest on David's podcast for that week. The transcript still exists. You can see my first 10 shares. My GKC score" -- that's his Gardner-Kretzmann continuum score -- "has improved a bit in that time, and my risk appetite, as well. David Kuo ended our podcast with a quote by Oliver Wendell Holmes. 'Man's mind, once stretched by a new idea, never regains its original dimensions.' That's how I felt at the time and continue to feel to this day. Thanks to you, David Kuo, and The Fool for stretching my mind."
Well, thank you, Ben, again, for sharing your story, and especially for that spectacular poem that I enjoyed being able to share with all of our listeners this week. So, a little bit more Chicken Soup for Fools.
Rule Breaker mailbag item No. 3. This one comes from somebody I do know because I spent last week on a boat with him. A little bit of background there. I just came back from the Virgin Islands, where I hadn't been for some years. Beautiful place. Still rebuilding after three hurricanes in 2016. I was on a boat that was captained, but only had about a dozen of us as guests. It was a wonderful, intimate, exciting trip. Jumping from rocks into the water; scuba diving, which I'm not certified at, but I am now closer. An amazing experience. But more than anything, the time I spent with my friends, and one of them was my new friend, Heath, who wrote in.
"Hey, David. I enjoyed your two most recent podcasts while in the gym. The primary content of the podcasts were well thought out and clear, so no questions about content. I am curious, however, about two things related to your podcasts. One, your tone and intonation. One of the first things I noticed about you last week on the boat was your tone, intonation, positivity, and supportive language and body language. This is something that has been cultivated over time. I was curious if it changed in the podcasts. I was happy to find it's consistent both in and outside of the Caribbean. I'm curious if you learned this organically, or have you had some structured process for cultivating your manner of speaking and choice of words? I have many clients," he writes. He's an executive coach. "I have many clients that would be well served to improve in these areas of their personal and professional lives. I consider in-person and recorded verbal communication to be one of your strengths."
I'm going to pause right there and respond to that. First of all, thank you very much, Heath! I appreciate that. Two quick thoughts back. The first is that I was raised in a family that was a very positive, loving family. I remember at summer camp in Maine, at the age of 10, I was on the Hall of Fame plaque at the end of the summer. I got to stand up at the final ceremony in front of all my campers because I was voted most cheerful. From early days, No. 1, I've always just loved life. As Seth Godin said on this podcast some months ago, just try to leave things better. Did you, did I, did we make things better while we were here?
The second thing I'll say, though, this is maybe a secret weapon, just a unique part of my background, and my brother Tom's as well, certainly, was the act of hosting a nationwide radio show. For us, in our late 20s, we were all of a sudden doing a three-hour Coast to Coast AM radio show in lots of American cities live, call-in, on Saturday afternoon. That's right. While a lot of other people were having fun on their Saturday afternoons, Tom and I were just sitting in a studio with mics, answering questions for people around the country live about finance. There's probably no better proving ground or way to need to improve faster than to be out there and doing it. Some years later, we then shifted that show, as I think many of you know, to NPR, where we had The Motley Fool Radio Show for years then, too. Again, great experience for us. There are many talented CEOs, cofounders and chairmen, far more talented than I am or my brother is, but I suppose one way we might grade out well against our peers is that we have lots of experience speaking in front of people through the media, through all of the different media. That's part of my background.
You go on to say, No. 2, and I wanted to speak to this briefly, as well, production value and content of this podcast. You said, "The podcast is well done. Do you have a team in-house that does the recording and editing of the podcasts? Are they scripted? Do you just run through the 45 minutes off the top of your head or operate off of an outline? How much time do you personally invest in each podcast?" Again, Heath, thank you for that question! It's an opportunity, something we don't do very often, to peel back the curtains a little bit and show how it works here for those of you who are longtime listeners who might wonder how we put this together.
This podcast comes together largely like this. There's a staff of two, I and my good friend and producer Rick Engdahl. Neither of us is full-time on this. We each have other jobs at The Fool, as I think you'd expect. However, we both love this. We've been together since we started in July of 2015. Rick has years and years of experience producing. He's also a talented photographer. He's done some brand work here at The Fool. Like a lot of Fools, he's a jack of all trades, as am I. That's the team in-house that does the recording and editing.
I want to say something briefly about editing. These days, this podcast -- which, as I mentioned, is listenable on most places you can listen to podcasts -- we're also a YouTube channel. I know some of you are watching this on YouTube. Not live but taped. Over the years, I hope these will get more and more views from anybody who's interested in a given topic or one of these podcasts. These days, we're also doing video, so there are cameras surrounding me here in HQ as I do this. But one thing I need to make really clear is that I flub up all the time as I'm speaking. In fact, I just did it right there. I said, "Three, two, one, go," because I paused for a second, not knowing what I wanted to say next. I'm trying to be brief. Remember that ad earlier about brevity that I provided? So, in many cases, I'm trying to pick my words carefully, so I pause or stop in order to do that. Also, sometimes I just say the wrong word, or want to take a swig of my Starbucks venti gingerbread latte. So Rick is constantly editing. What comes across as a polished final product is not nearly this polished as we produce it. We spend about an hour and a half taping each week, and that ends up being about a 45-minute podcast.
There are breaks. Sometimes I jump around for mailbag. As I mentioned, I have 34 pages to read through. I'm bouncing around this long Google doc, figuring out what my next item is. I'm pretty much the primary programmer for the show. I think about what I want to do this week, next week, I pick my mailbag items. I don't really want or need somebody else to program, I just enjoy deciding what I want to do. Because I tend to plan out ahead of time, I generally know what the next six Rule Breaker Investing podcasts are going to be, and I have a long list of things that I want to get to still on this podcast. Any regular longtime listener knows, part of our programming is, we have series. We go back to the well time and time again. We've built up some little mini-brands in the show. For example, a five-stock sampler, one shows up every 10 weeks on this show. We also review those five-stock samplers. How about the Market Cap Game Show, which we play four times a year? Or my pet peeves podcast, where I did volume three earlier this month? I think I have about 15 or so running series that we do. That's part of how this show is programmed.
I realize I'm really getting deeply into the weeds. I think I'm answering more than just your question here, Heath. Let me last speak to, Are we scripted? The answer is, we're absolutely not scripted. Everything here is basically off the top of our heads. I'm trying to speak as ably and consistently as I can so Rick doesn't have too many edits to do from one week to the next. I'll say in closing that I learned from our work on NPR that editing is good. People love Car Talk, for example, on NPR. They love the listener questions that are called in. I think a lot of people may not realize as they have listened to that show over the years -- and this is true of other NPR shows -- that those are heavily scripted. They're taking calls during the week. That's what we used to do for The Motley Fool Radio Show, as well. They're taking the best calls, and then they're tightly editing the show. In the end, as is true for NPR, also true here for Rule Breaker Investing, I want to create the best final product or service here for you, our listeners, as possible. I think it's a lot better for polish to save you time rather than me flubbing up here and there and being a little bit more authentically human, but not quite as good.
If this podcast is good, that would be Rick Engdahl's fault. If this podcast is bad, that would be my fault. Thank you, Heath, for the question!
Before I move on to item No. 4, since we didn't have an ad this week, I'll put in a little plug. Heath Dieckert, who's a very talented executive coach -- again, I met him for the first time last week. If you're a CEO or that level, maybe a board member or a founder of a business, and you're looking for some coaching or some help, I am more than happy to point you Heath Dieckert's way. His deep background as a higher-level Hewlett-Packard employee, helping run the data centers, then transitioning to helping people figure out how to discover their dreams, dream it, build it, how sometimes to transition their lives through being CEOs of companies, or just help a company if it's having a toxic workplace culture because of something happening at the top -- if you're somebody who knows or is in need of help for executive coaching, let me point you to Health's website, dieckertcoaching.com. Or, heck, you can also just email the guy at [email protected].
Heath mentioned to me -- again, this is for founders, CEOs, and board members, basically C-level kinds of people -- that he'll schedule a free strategy session with you. It'll take one or two hours just to talk with you as a potential client of his to understand your life and your ambitions. He had some great stories he told me. Anyway, Heath, I really enjoyed meeting you! Good luck, sir!
All right, Rule Breaker mailbag item No. 4. If you enjoyed the contrariety and the surprise of Ben Goland's poem earlier, I think you'll see a little bit of a similar theme here to this email I received from Kishore. Mailbag item No. 4.
"Hi, David. My portfolio has lost money. The recommendations of the new Fool service, Global Partners, are all in the red. I put a good chunk of money in them. The market has tanked in the last two months." I should insert here, by the way, that this was written early this month. It's actually been quite a good January for those of us who just kept holding our stocks. There's been a lot of nice recovery. But Kishore was writing this right after the bloodbath that was October, November, and December of last year. Let me continue his note. That's why he says the market has tanked in the last two months.
He continues, "But today, as the year ends, I only feel gratitude. Gratitude for what I have rather than what I don't. I woke up today with the alarm on Google Home's speaker, wore my Under Armour tracksuit, Nike shoes, Fitbit, and went for a walk. On the way back, I stopped over at a Starbucks. As I sat down enjoying my coffee and catching up with the latest Netflix series on my iPhone, my old colleague happened to drop by. He had just bought a new Tesla and couldn't stop raving about it. When I was back home, I had the Amazon delivery guy waiting with my new Skechers. I've ordered them for my weekend getaway deal I got through booking.com using Paypal tied to my Mastercard. I made sure of checking the reviews on Tripadvisor.
"I don't know what will happen tomorrow or the day after or the next year in the stock market, but one thing I know is that people will keep using services of the above companies for quite some time. I own all of the above companies :)
"I started following Tom and you almost 15 years back. Glad I did. I thank all at fool.com for the great work done through the years. Wish you all a happy 2019 and look forward to great advice in the coming years. P.S.: I still feel some regret of not buying Marvel when you recommended. Regards, Kishore."
Kishore, I'm pretty sure I've mentioned you before in one of our other 38 mailbags. You've been a good correspondent. Thank you for 15 years of following us at fool.com. I absolutely love your note. I'm really happy to say, since you clearly wrote this at the end of last year, wow, hasn't January, for many of us, anyway, been a much, much better month? And, a reminder of why, in Ben Goland's memorable words, "This is no time to / Get out / Double down / Sell / We need to see this for what it really is / Suffer a Fool gladly / So do not tell me / The market is crashing."
All right, Rule Breaker mailbag item No. 5. It's normally right around this time that I would do a more extended ad read. Why don't I put in a plug for the board game that I played and enjoyed the most on the boat in the Virgin Islands last week? That would be the game of Wingspan. Wingspan is a brand-new board game just out from Stonemaier Games. I'll mention again Jamey Stegmaier, who appeared on an earlier version of this podcast. If you'd like to see Rule Breaker Investing interviewing Jamey Stegmaier, one of the kings of Kickstarter, on how to succeed on Kickstarter, check us out at transcripts.fool.com, where you can find the transcript of that past podcast, or you'll probably find a link to relisten to it. Jamie was a delight to interview.
Anyway, he's the publisher of this new game, Wingspan. If you're a birder, you absolutely owe it to yourself to buy this board game -- as long as you like strategy board games, of which it is one. If you don't like slightly more complicated games with a little bit more rules, then maybe Wingspan isn't for you. In our family and among my friends, we love strategy board games. We're happy to go to the mat with a tough rule book. This is not one of those games. It's a pretty light rule book, but it's a beautiful game. One hundred and seventy cards, each of which is a bird, almost an Audubon illustration of that bird. But all of the birds -- since this is a board game -- have special abilities, you're trying to recruit them to your aviary. It's a very playable, highly replayable, lovely, economic engine game under the hood, all with bird theming. Boy, did we have fun with Wingspan last week. Happy to give a plug to that one.
You know how they already have, like, "This movie will probably be nominated for the Oscars in 2019?" People are already saying, "That might be a Best Picture." Well, in the board-gaming world, people are already saying Wingspan will probably be on the top 10 lists for many people for games that came out in 2019. So there's a free plug for a great board game, if you're looking for one.
Now, if you do look up and you want to order Wingspan, I got a copy of it because I preordered in an earlier window earlier in January. I think it sold out pretty quickly, but you can go and check out Wingspan at stonemaiergames.com and preorder it yourself and probably get it before things thaw out too much, at least here in the Northeast where it remains very cold.
That's part of the reason I'm happy to bring you Chicken Soup for Fools this particular podcast. Yeah, there's a lot of snowy weather out there, and chicken soup always tastes better the colder it gets. In fact, even as I tape this, I had to cancel a game night I was going to have here with Fools at Fool HQ because of the inclement weather. In fact, I just stepped out of the studio for a quick sec, came back in, snow is swirling around Fool HQ.
All right, now to Rule Breaker Investing mailbag item No. 5, more Chicken Soup for Fools. This one, reacting to the first podcast we did this year. That was "Get Your Kids Started Investing." I'm going to say ahead of time, just like I think Wingspan is already on the top-10 lists of the best games to come out in 2019, I'm going to say that that's one of the 10 most important podcasts we might do here on Rule Breaker Investing in 2019. I'm not even saying we did it that well, or in any way Oscar-worthy. But the purpose of that podcast was so important that I have to rank it high. Getting kids started investing -- and by kids, we can mean anything from age 0, which is was when I was started investing by my parents. I didn't know they were starting an account for me, but they were. But I think kids these days can be, I don't know, 37. Twenty-seven. I still call my kids kids, and they're 24, 22, and 19. The point I'm trying to make is, get young people going investing. The earlier each of us gets on that compounding train of the stock market, that tends to run around 10% higher every year, get on the earliest stop on that train that you can. When we get others onto that train, who didn't know to show up at the depot, they didn't know that train was coming through, and we get them on that train -- sometimes unbeknownst to them -- when you get young people started investing, you give them an almost irreplaceably valuable gift in their lives.
So now Joseph Higgins shares his story. Rule Breaker mailbag item No. 5.
"David, longtime listener of TMF podcasts. Stock Advisor member. Original RBI listener here. Just wanted to say how much I enjoyed your podcast last week about getting kids investing. My son just turned 2 last week, so it especially hit home.
"I also wanted to share my personal journey on the topic and how The Motley Fool shaped my decisions. For years, I've been listening to the great Jason Moser" -- that's one of our analysts. Certainly anybody who knows our podcasts knows how passionate Jason is about podcasting, about getting kids started investing, starting with his own. "The great Jason Moser discuss his strategies for investing with his two daughters." Yep, we did that on that podcast. "The thought of sharing that knowledge and experience with my children was incredibly exciting to me long before I became a parent. So when my wife and I found out we were expecting, I knew I wanted to get a jump start for my son on that path.
"I spent months researching, talking to others, and listening to J-Mo to figure out how I wanted to tackle this difficult decision. Much of what was discussed in your podcast was the debates that I was having. Custodial brokerage, 529, Coverdell? So confusing! Ultimately, I channeled my inner David Gardner and rejected this binary choice." Thank you, sir, for that! "I decided [my son] could have my [his] cake and eat it, too. Open up a 529 and a custodial brokerage account for him at the same time. I fund both the same amounts at the same intervals.
"I think doing both accomplishes the best of both worlds." He has four quick bullets here. This is what the best of both worlds sounds like in four bullets for kids investing. "No. 1: I get the joy of teaching my children about stocks and involving them in the process when they get older through the custodial account. Definitely plan on adopting a J-Mo-like system in a few years. He already owns Apple, Amazon, Activision Blizzard, Disney, and Hasbro."
While I haven't talked about my kids and how I've invested for them as much as Jason probably has -- Jason has been amazing, sharing his story with the world -- I will mention that I think all five Gardner kids own all five of those stocks, too, and have for quite a while because they're kind of old now. They're not really kids. But don't tell them.
"No. 2: Still saving for college through the 529 plan via funds makes me feel better about the future." That's a great point. "No. 3: My hope is we find some big multibaggers in the custodial account that can really boost their nest egg. The biggest reason I landed on doing both was that I hated the idea of my kids being forced to sell these potential great investments to pay for tuition, books, etc., and pay taxes on the gains in the process." That's such an important and excellent point you make there, Joseph. You go on to end that one with, "Hopefully, my son doesn't blow it all on a sports car..." That would, of course, be a sideswipe reference to me. I've told my story, and I did spend a portion of my parents' investment for me on a sports car at the time. Thereby hangs a tale that we can tell another time. I've told it in the past.
Anyway. "No. 4: I think there will be invaluable lessons and insights to be shared throughout the years comparing and contrasting the active vs. passive, stocks vs. funds approaches to investing. Since both accounts get funded the same amounts at the same time, it will be very easy to score against each other.
"So, my long-winded way of saying thank you for all that you do. You, Jason, and the team have truly made an impact on this dad's life, as well as my little guy's future. Please pass along to Jason, as well. Fool on, Joseph Higgins."
Joseph, that note was awesome! Congratulations! I have nothing to add. Sometimes I feel a need to reply or respond because questions are asked. In this case, Chicken Soup for Fools, I'm just putting it out there because you said it so well.
All right, Rule Breaker mailbag item No. 6. This one comes from my pal Steve, in Chicago. Steve and I don't know each other, but I can read this note and know that Steve's my guy.
"Dear Dave, Love the podcast and the services. I'm a Stock Advisor, Rule Breaker, Rule Your Retirement member. A Fool since your dial-up-modem AOL days." Thank you, Steve! "However, I do have one pet peeve." I'm going to pause there for a second to remind you that we did do "Pet Peeves: Volume 3" earlier this month. I encouraged you all to send me your pet peeves, and I got some great ones. Because this is more a Chicken Soup for Fools edition, I didn't share as many of the pet peeves as I could have and wanted to. There were some great ones. But I did at least want to get this one in here. Maybe I'll throw in another before we close.
Steve said, "I do have one pet peeve. You haven't done it lately, but on a number of occasions, when you've referred to your stock picks that have lost money, you've used words like "embarrassed" and "ashamed." I suspect you don't really believe this, it's just your nature to be modest." That's kind of you to say, sir. "But I cringe when I hear it. Being embarrassed about losers creates unrealistic expectations and an aversion to risk. I wear my FireEye like a badge of honor" -- which is a great one-liner. He's referring to one of my worst stock picks in recent years, Motley Fool Stock Advisor, and that would be FireEye, the cybersecurity firm. Still an active pick. Still have hope for it. You haven't seen it in any five-stock samplers recently because I still have lots of questions about that pick. It's one of the poorer performers. But I'm really liking where Steve's going with this note.
I hope I've said this before numerous times on this podcast: I lose more than anyone at The Motley Fool. I think it's important to be able to lose. So, if I've said I'm embarrassed about that bad pick, or ashamed, it's in part true. I never like to lose. But it's also part of winning. You need to lose to win, often, with our style of Rule Breaker Investing.
Anyways, Steve goes on. After saying, "I wear my FireEye like a badge of honor," he says, "I strongly believe that you cannot be a great investor without racking up some losers. No one picks every stock right. Anyone who wants no losers needs to be in an index fund, and even that will lose money some years. This idea is well stated in a quote by someone who is a Tar Heel like you." Get ready, we're going to be putting up Michael Jordan, the great basketball player. Some people believe the greatest of all time. There's a big debate about that. I don't have strong feelings. I don't really watch NBA games. When players leave college basketball, they're dead to me. I only watch college basketball. I've never been that interested in the NBA. Anyway, Michael Jordan did, I understand, go on to do great things in the NBA. So did other people, like LeBron James, etc.
Anyway, here we go. Steve says, "I apologize if you've already used this quote." I haven't. "Maybe one of your pet peeves can be listeners who bring up content that you've already covered." That would be a good one, but it's not. "Here's the quote." This is from Michael Jordan. "I've missed more than 9,000 shots in my career. I've lost almost 300 games. Twenty-six times I've been trusted to take the game-winning shot and missed. I've failed over and over and over again in my life, and that's why I succeed." The note ends, "Fool on. Steve in Chicago."
Thank you, Steven Hunter! I really appreciate you bringing that quote out. You know that I love great quotes. I like that one a lot! I've heard it in other ways, shapes and forms from other people. In some ways, I've said it on this podcast, but I'll be happy to double-underline it once again. Earlier today, one of the fun things in The Motley day that I've had here at Fool HQ in addition to this podcast, I was meeting with six brand-new Motley Fool employees, people who've been with us just weeks or a few months at this point. One of them was from Australia, visiting us halfway across the world. Another was in Foolorado -- that's the name we give, of course, to our Colorado offices. We had four here in Alexandria. I was able to say to them, as I say to every incoming employee, "No one has made more bad stock picks than I have at The Motley Fool." I don't even think it's close. Part of the reason is, of course, I've been doing it for 26 years, so I have an advantage over any analyst who joined us a few years ago. But no one has made more bad stock picks than I have, and no one has made more bad stock picks than I have. In addition to having numerous legions of losing picks, I have a bunch of stocks that have lost 80% or more. If you've listened to this podcast in 2018, you know that I've gone over that list. I've mentioned great stats -- horrible stats -- like that I have 35 stocks that have lost 50% or more since I picked them. I think that's in Motley Fool Rule Breakers.
Everybody needs to know. If you've listened to this podcast for even a month, let alone a year, or the four years we've been doing it, you'll know that this is, indeed, part of how I invest. I'm very comfortable with it. So, when I look around the table at that new-Fool coffee earlier today, and I asked each person at some point, "What's your superhero power?" I get great answers from my new friend, Argin, here at our company. Argin said, "What's my superhero power? Eating random dishes, figuring out the ingredients, and then being able to recreate them myself." That sounds like a pretty good superhero power, Argin. Or my friend Aaron, who's from Fool Australia, said, "I can watch YouTube videos at 3X, 4X speeds." I said, "Wow, that's pretty great! I guess you're just seeing it at normal speed, but people who walk around you are seeing that's it's actually at 3X or 4X." I went on to say, "That's a pretty good skill these days, since there's so much information out there on YouTube. If you're able to consume that at three times the normal rate, yeah, that's a superhero power!"
What did I say mine was? Picking losing stocks and losing. That's my superhero power, because nobody has lost more around these offices than I have. And yet I have done pretty well. I don't think I'll ever be anybody's GOAT anytime soon, and I don't have any championship rings on my fingers, but for whatever success I've had, it largely is explained by my superhero power, which is constant losing. So thank you, Steve in Chicago!
All right, two more. Got the best for last, but that doesn't mean that this one isn't awesome. Thank you, Marco!
"Hi, David. My name is Marco. I live close to Amazon's new HQ2 pick, Long Island City. Originally grew up in Hamburg, Germany. I've been listening to your podcast for a few years now and can truly say that I learned a lot about the practical side of investing. I particularly like it when you cover stock picks, as well as the mailbag episodes." Well, it is a delight, Marco Turner, to have you on this mailbag.
"I have two questions for you. A really short but important one, and then a longer one." If there's one investment mailbag item in this week's podcast, I'm going to say this is it. But since we're near the end, I'm going to be fairly brief with my answers. "Question No. 1: When do you sell?" I'll answer that one right now. As briefly as I can, Marco, I typically sell for two reasons. The first is, since I tend to hold stocks for long periods of time, the good news is I have some big-time winners because I just keep holding my Amazon and my Netflix and my booking.com and my Marvel and Pixar, that both became Disney. I just keep holding these stocks. So I have big-time capital gains. But, I also have a lot of losers. Didn't I just say something about that? I think I did. That means, at the end of some years, I'll just sell off losers and pair those against capital gains, stocks where I have such a low cost basis -- when you pay only a couple of dollars a share for Netflix, and then it's near $400, you have almost pure capital gains in these kinds of stocks. This is a great way to diversify the portfolio a bit, get away from too-large accumulations of some winning stocks, by pairing them with selling losers. So reason No. 1, when I sell, very frequently, it'll be at the end of a few years of a losing stock that I've held that I don't think is going to come back. It's just tax smart, a lot of the time, to diversify away from my big winners and sell that way. That's No. 1.
No. 2 is, I'll sell when a company fails me. If I feel like there's a lack of integrity among management, if there's a change in the product strategy or services, and I start thinking, "I don't think that really is good for the world," if I no longer believe in my original thesis of why I invested in a company, or if there's something else untoward, those are reasons I'll also sell.
Aside from those two reasons, I often don't sell. I think way too much emphasis is given to -- I've made jokes about this in the past -- having a "disciplined sell strategy." People ask you, what's the discipline of your sell strategy? And I'm always like, you know where you really need discipline? Picking stocks on the buy side. When you buy, that's when you should be really disciplined. I'm a rather undisciplined seller, and it's tided me well over the years. So, there's answer No. 1 to your short but important question.
Here's your little-bit-longer one. It's not too long, though. I really do want to share an answer. Here we go. "What's your take on what we can do to get a more diverse base of people excited about investing? As an example, when I recommended your podcast to my wife, she gave it a chance. To my surprise, she couldn't relate to it as much and didn't want to continue listening to it." That always makes me sad, but I think I understand. "When asked why, she referenced baseball analogies." Presumably she's not a baseball fan. Admittedly, I do slide into baseball analogies every podcast or three. "And the Harry's commercial, as not necessarily speaking to her as a woman, and she just didn't enjoy it as much. While I personally really do enjoy the sports analogies, it did make me realize that it's probably because I'm a guy. I started to wonder if there may be an unconscious bias."
Your question is coming up in just a sec, but I want to speak to that briefly. Yeah, I've done some unconscious bias training myself. I've gotten more in touch with that. I think it's a good thing to do for anybody who hasn't had the benefit of that. One of the things you learn is, it's unconscious. In some ways, we're all hopelessly biased, as the funny puppets musical Avenue Q, for those of you who have seen that -- in fact, one of the creators of that was a Motley Fool member -- one of the songs is entitled ["Everyone's a Little Bit Racist"]. That sounds like a real magnet word, a harsh thing to say, but it's a comic song. It's kind of like, "We all have a little bit of unconscious bias." I think it's impossible for a human to not have it.
I think, Marco, in some ways, it's impossible for me not to mention baseball. I wouldn't be myself or sharing my own experience. But I realize that in some ways, that can turn off people who have no interest in that. And, yes, not just this podcast, but almost everything The Motley Fool does has more male viewers, subscribers, listeners, than female. We would love to reach your wife and more people out there from all walks of life, rather than just those who typically have interest in the stock market or want to invest for a key trigger reason like an inheritance or getting their kids started.
Anyway, back to Marco's question. "It's tricky because storytelling like sports analogies are such an effective method. And, of course, there's a reason that Harry's or other brands may think their target audience is in a finance podcast. It doesn't need a data scientist to figure out that the majority of investors currently are male. So, in order not to lose, or even better, proactively reach more female listeners and people from diverse backgrounds, what can be done to educate, amuse, and enrich?" What a beautiful question that is, Marco!
You close, "Same goes for aspiring investors from less privileged backgrounds who may not have capital readily available to invest yet. I realize there may not be an easy answer but figured it's worth posing the question. By the way, my wife eventually gave it another chance and is now a Fool. Thanks, I appreciate all you do. Marco."
Marco, a brief thought back. It's nothing more than this. We ask ourselves that question constantly here at The Fool. We've asked it for years. We've done a lot of different things. We've tried to get more kids started investing, so we wrote a book called The Motley Fool Investing Guide for Teens. It's in its fourth printing, has a lot of five-star reviews on Amazon. But in my experience, kids aren't buying our book. It's parents or grandparents, aunts and uncles, graduation gifts. We've tried to reach people. I guess the good news is that we have more passion about that today than ever before. Better news, we have more resources to discover that today than our company has ever had before.
Sometimes, I think beyond the purpose of The Motley Fool -- which, I hope you know this, is to make the world smarter, happier, and richer -- I think, well, really, the calling of The Motley Fool is to get the whole world investing. It's a huge undertaking. It's not something that we'll ever achieve in my lifetime, at least. But that's what we aspire to do, so asking the question that you've just asked is really important.
In closing on this one, making ourselves relevant to as many people as possible is part of that answer. I personally have always tried to learn more about people who are very different from me and reach out. I think The Motley Fool does make this subject pretty accessible to lots and lots of people. We've gotten a lot of people started investing directly in stocks who hear from financial planners, brokers, the world at large, academics, "You should never buy stocks directly. You should only buy funds." So I'm happy to say we've succeeded enough to make ourselves dangerous. But we're not so awesome that we're reaching everybody, not nearly. But that's a lifetime undertaking.
Marco, if you, if your wife, if you, dear listener, have a better idea about a way to reach a new group of people, or a way that we through this podcast, but of course, more importantly, through our company, can effectively reach more people, that doesn't involve a huge drain on our resources -- Motley Fool is not for profit when we're actually for profit -- we're open-arms welcoming of those. Perhaps I'll have some great idea I can share in next month's mailbag. Thank you, Marco Turner!
I was just turning as an aside off-air to my friend Rick Engdahl, saying, "Rick, I did try to save the best for last." I have to admit this may not objectively be the best or most important note shared with us for this week's mailbag, but it's my favorite. And since this is Chicken Soup for Fools, there's snow coming to the Washington, D.C., area once again -- we got 10 inches a few weekends ago -- how could I not brew something, light the proverbial fire in the hearth right here in our studio, and enjoy this from our final correspondent on this week's mailbag?
His screen name, this is on The Motley Fool site, happens to be FoolUpNorth, which couldn't be a better image as we think about these snowy times and hunkering down and Chicken Soup for Fools. I hope you enjoy this half as much as I did. I don't want to overstate. This is rather simple on its face, but it says something that makes me really happy.
"Hi, David. I'm a longtime Fool, but I've only started listening to yours and other Fool podcasts a little less than a year ago. In early December, I downloaded your games episode." That's right, I did an episode on some my favorite games as gifts for the holidays just a few weeks ago in early December. "When I listened to the introduction for that one on my way home from work that day, I debated whether or not just to bypass it and head straight to the MarketFoolery episode. You see, while I've never skipped an episode of RBI since I started listening, I'm not a 'gamer,' so I thought the show would probably be of little interest to me. The only video game I've ever owned was that first edition of Pong back in the mid-70s or so, where static electricity from the TV screen held the plastic overlay on the screen for your 'field.' Yeah, I'm old, and I haven't played a board game in years.
"Well, I decided to listen after all, and I'm glad I did. The discussion about different board games got me thinking what a great idea that would be for the holiday season. To fill in those voids between preparing meals, eating meals, cleaning up from meals, and deciding what to do next. Since we were going to have a couple of our kids home for the holidays, I decided to try it out and picked up a copy of Azul." That's one of the board games I recommended on that podcast. "I picked up a copy of Azul that weekend when I was out running errands. Long story short, we played it several times over the Christmas holiday, and it was very fun. Everyone had a good time. My wife enjoyed it so much that when we made a trip up to the cabin for New Year's Eve, we brought it along and played several games while we were trapped in the house due to weather.
"So thanks not only for your very informative podcasts around stocks, but also for venturing into nonstock territory once in a while. After all, given that most listeners are probably Foolish, it's nice to have something to fill in the void between checking stock prices every month. Fool on, FoolUpNorth."
Why do I love that note? Anybody who knows me knows I love games. I love to think that an otherwise investing-and-business-oriented podcast where, frankly, about a third of the time, we veer off those topics into great books or aspects of how to lead your life better, or, yeah, have fun with board games, it's those times that I often think we're at our most Foolish. After all, if your purpose is to make the world smarter, happier, and richer, it's not just richer. It's smarter and it's happier, too. So FoolUpNorth -- I'm picturing that, maybe north of U.S., might be Canada -- I love that you heard about a board game and then it changed, maybe even transformed a little bit toward the even better, your holiday. That makes me very happy! You made me happier! Fool on!
All right, time to kick it to one of our series we're going to be bringing back next week's podcast, "Blast From The Past: Volume 2." I don't do this too frequently. What I'd like to do is go back to some of the key, cardinal points I've made about investing in business and life in past podcasts, ones that were done a few years ago. I always imagine, "Well, I said that three years ago. Everybody already heard it. I don't need to say that again." But these days, if it's not within the past hundred podcasts, it's rolled off of iTunes. People may not even find it or see it. I should never assume that many new listeners who've come on board this month or last year know these points. So I like to go back and find some of the greatest hits and bring them back for you. So, next week's podcast is "Blast From the Past: Volume 2."
In the meantime, stay warm out there, wherever you are! Fool on!
As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Learn more about Rule Breaker Investing at rbi.fool.com.
