As Aesop wrote, "A man is known by the company he keeps." That's a moral that still applies 2,600 years or so later, and in a similar vein, the Rule Breaker Investing podcast should be happy to be judged by its audience -- and the caliber of their questions. Motley Fool co-founder David Gardner is once again tackling listeners' queries in this mailbag episode, as they give him the opportunity to dig into the fundamentals of how to pick stocks, how to pick Motley Fool services, and how to invest in yourself.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.
This video was recorded on June 26, 2019.
David Gardner: The Motley Fool offers a lot of different services. First off, I should say that we do a ton of things for free. Free! Most of our website, fool.com, is free, including our discussion boards, or our 13 Steps to Investing Foolishly section. Those news articles our contract writers pen every single market day, letting you know what stocks are moving and why -- free. This podcast -- free. All of our podcasts, in fact. But fortunately for us, not everything is free. I don't think I'd be picking five-stock samplers on this podcast if everything were free. We have services, as I said, lots of services. Which one is the one you should start with?
That's the first mailbag item for this week's Rule Breaker Investing, and almost a dozen more are headed your way. That's right -- your best questions, my best answers; your best stories, my best reactions. It's mailbag week on this week's Rule Breaker Investing.
Welcome back to Rule Breaker Investing! Yep, it is mailbag week! I was looking back over the month that was. "Five Stocks That Pass The Snap Test," that's how we kicked off June 2019. Axon, Fair Isaac, Live Nation, Nintendo, and if you don't remember the fifth, you'll have to go back and listen to our June 5th podcast for Rule Breaker Investing. But Yep, "Five Stocks That Pass The Snap Test." Then "Great Quotes: Volume 10," followed by "The Market Cap Game Show" with Aaron Bush, our new rookie of the century. All of that now feeds through to this mailbag. Your questions, my best shots at answers; your stories, my best reactions. I'm delighted to have a very full slate, and indeed a guest star that I'll be introducing very shortly.
Before I introduce my friend David for mailbag item No. 1, I do want to give a shout out to Mark Ray, @MarkRay on Twitter. Mark, you memed me, and I'm deeply appreciative. [weepy voiced] I'm not sure that I've ever been memed. I'm sorry, I'm getting a little emotional. So, "Thanos copying David, who was using the snap test before it was cool. #FoolFest 2019." Thank you very much, Mark! You created a meme, a visual that overlays Thanos snapping his fingers, making superheroes disappear, while talking about the snap test, where I snap my fingers and make public companies disappear, and say, "Would anyone notice? Would anyone care?" A wonderful summary of "Five Stocks That Pass The Snap Test," as I led off this month. Thank you! This meme is clearly above any budget that I could bring or performance that I could bring. Thank you, Mark Ray, for your Rule Breaker Investing meme! All right. With that said, let's get started. Mailbag item No. 1.
All right, for this item, I have my pal David Hanson. David, welcome to Rule Breaker Investing!
David Hanson: Thanks for having me!
Gardner: You were telling me off the air that this is not your first appearance on a Motley Fool mailbag podcast episode.
Hanson: That's right! Probably fall 2012, I was a lowly analyst at Bank of America down in Charlotte. I was dreaming of interacting with The Motley Fool. I submitted my question to Market Foolery and Chris Hill. I think it was after a Nike earnings report. I was wondering, is this a buying opportunity? And they took my question, they answered it. I did buy Nike and have done quite well in the position, which is great.
Gardner: That's awesome!
Hanson: But yeah, fast forward six months after that, and I was working at The Fool, and I've been here for around six years. It's come full circle now.
Gardner: Spectacular! It's great to have you! You're doing such good work! I so appreciate it, David! You're very focused. You're a leader within our group, our product and services group at The Motley Fool. So, I thought, as I got this good question from Grant Tuncle, which is, in a way, an everyman, every-Fool question that we get, that it would be a fun one to lead off this week. Let me share Grant's question, then let's talk about it.
It starts, "Hi, David." In this case, we'll go with, "Hi, Davids. I love the show. Listen every week. In fact, I'm a regular listener of just about every Motley Fool podcast episode." Well, thank you, Grant Tuncle! We really appreciate that! He goes on, "Over the course of a few years of listening, you've definitely educated, amused, and enriched me. Now, much like The Fool has updated its purpose statement, I am planning to update how I consume Fool content. Not the best segue," he writes, I would say somewhat humbly, but I digress. I thought that was a solid segue. Anyway. "I recently rolled over a 401(k) with a decent amount of money into an IRA," an individual retirement account, "which gives me the freedom to invest the funds as I see fit. As such, I'm planning to sign up for a Motley Fool service." Well, that's awesome! "Either Stock Advisor or Rule Breakers. I'm well versed in the merits of both services, but for the purposes of a retirement account, and a traditional IRA at that, do you recommend one over the other? Fool on, Grant."
Hanson: It's a great question! I think you would probably echo the same sentiment -- congratulations on taking control of that! That's such a huge step that we love to see here at The Motley Fool, individuals making the step and saying, "No, I can be an investor, too. This isn't some dream job for the Wall Street bankers or whoever to manage their money."
Gardner: So true.
Hanson: A huge kudos to taking that step. So many people are scared to do it. I'm glad that we've been able to help him make that short step there and get in the game. But, between our services -- I've worked on many of them and worked with our marketing teams here at The Motley Fool, so I could talk for hours on the benefits of Stock Advisor and Rule Breakers and the many services we have here, but I know you've got a lot of questions, so I'll try to keep it a little bit shorter.
For those who don't know, Stock Advisor is our oldest service. It was launched in 2002. Every single month, you and your brother Tom pick a new stock. We have a bunch of other features, such as Best Buys Now, and every year, we have Starter Stocks for someone who's trying to get in the game and saying, "Hey, you guys have a lot of stocks here. Can you give me just 8 to 10 really solid ones that can be the cornerstone of my portfolio?"
When I think about Stock Advisor, it is our flagship service. It gives you a taste of everything that The Motley Fool has to offer, in styles of investing, in sizes of companies. You'll find companies recommended by you and Tom as small as a $1 billion market cap, maybe smaller. You'll also find Apple in a service like that. We're spanning the spectrum of types of investing in Stock Advisor. Grant was his name, I believe. If he's the type of investor who really is like, "Hey, I just want to learn about business and what's going on in the world, small companies, big companies, I love Apple, I love hearing about their new products, I love Google," Stock Advisor can be a great service for that.
When I think about Rule Breakers -- obviously, it's a type of investing that we talk a lot about on this podcast, as the name would suggest.
Hanson: I really view Rule Breakers as a glimpse into what's next. I'm not putting words in your mouth, but I view Stock Advisor as, here's a lot of what's going on right now. Rule Breakers is very much, here's what could happen in the next couple of years. I don't know the exact situation of the question here, but, for example, I have a friend who's in his early 30s, and he subscribes to Rule Breakers. I would say he's not an expert investor, but he's business savvy. Every month, he texts me and says, "I just got the new Rule Breakers recommendation! I've got no idea what this company does, but man, I'm excited to read about it!" You'll have things like genetics, artificial intelligence, energy. That's how I view this.
If you're the type of person who's super excited about the future, and you want to see what is going to be around in 5, 10 years that I can tell my grandkids about, or my kids, like, "Did you guys hear about this technology that's coming out?" Rule Breakers might be the service for you. If you're someone who's just like, "I just want to be in the game with you guys. Give me your recommendations across the board," I would vote for Stock Advisor. Again, like I said, I could talk for hours about the benefits of both. But that's how I view them. I personally use them both. It's really a personal preference.
Gardner: Thank you, David! How did you get started investing?
Hanson: Really, The Motley Fool was very critical in my development as an investor. I was in college, and just randomly I was like, "I'll be a finance major. That sounds like something you're supposed to do." I attended an unofficial investing club at the University of Miami, where I went. Two upperclassmen were presenting, and they said, "We take most of our philosophies from this company called The Motley Fool."
Gardner: Is that right?
Hanson: And I thought, "I've never heard about that before." So I started following The Fool. Again, started listening to the podcast, back when podcasts weren't even a thing. This is back in 2009, 2010. Motley Fool, very significant in my life. Obviously, very proud and excited that I can now work here and hopefully give back and help others get started.
Gardner: That was an excellent answer, David! While I could have taken my own shot at it, because I've been working on them both from the outset in March 2002, as you mentioned, and October 2004, in some ways, I feel like I'm in too deep. So I love hearing from, especially our professionals here, people helping run our business, and their perspectives. Every day, hearing from people who are asking similar questions.
David, I enjoyed that enough! Would you come back at the end of the show for a member story and a little bit of sharing on marketing?
Hanson: Of course! I'll see you then!
Gardner: Awesome! Thank you, David!
All right, Rule Breaker mailbag item No. 2. This one's from Shingo Pyo. "Hi, David. My name is Shingo Pyo, and I've been a Stock Advisor member for many years, a big fan of your podcast. I'm a U.S. federal government employee stationed in Camp Humphreys, South Korea. I've recommended your services to many friends and family." Well, thank you, Shingo. "Of all the companies that you've recommended in Stock Advisor and Rule Breakers, I can't help but wonder why you haven't recommended Microsoft. They have a subscription model, which you're a big fan of. They have a big moat. They're an industry leader, and a first mover. I'm sure you've thought about recommending them before but haven't pulled the trigger on it yet, probably. What are your reservations? Thanks, and I can't wait 'til the next mailbag. Signed, Shingo Pyo." Thank you very much, Shingo! Yes, here is the next mailbag. Here we are together.
Well, three quick thoughts about Microsoft. The first one is that I deeply admire the company. I think that Bill Gates is one of the great not just businessmen, but one of the great people of our time. After all, he dropped out of college, started a company that is a massive worldwide success today, and then took so much of what he made and said, "I'm going to give it all to charity, and we're going to help heal the world." I vote for more of that type of thing surrounding us, brought to you and me by our fellow humans. We need more of that.
Of course, Microsoft has been controversial at different points. There was a Department of Justice investigation into it. Some people don't like Microsoft OS, or they think of Apple as the antidote to Microsoft. I understand that, too. I love my Xbox. It's one of those companies that's big with cloud services today, it does many different things, you can't wrap your arms around Microsoft. Thought No. 1, Shingo, is that I deeply admire the company.
Thought No. 2 is that there is no intentionality to me not recommending the stock. Or, you should never infer because I've not recommended a stock that I don't like it. Now, you are not inferring that. You didn't say that. But sometimes I'm asked, "David, why haven't you picked this or that stock, this new IPO, or this company, Microsoft? He must not like it if he hasn't picked it." The reality is that I pick three stocks a month. I've done that every month for about 15-plus years now. That's a lot of stocks. It may look like I've got a lot of the market covered, but the truth is, it's only three stocks a month. Sometimes they repeat, so I'll rerec a stock. If you're following Stock Advisor, you're getting one for me a month. That's not that many when you think about it. Over the course of years, you can build a great portfolio with that, but by no means am I sitting in judgment of the entire U.S. market, let alone the global market, saying, "I like this one. I don't like that one." The truth is, I'm just flipping over stones as a bottoms-up investor, organically asking, "What are the companies that I'm looking at this month that I like?" And when I find one of them, I compare it to the others.
That's another quick point here before I hit No. 3. Another quick point is just that there are a lot of great companies out there. When I'm picking a stock, I'm usually saying no to two to four others that I would otherwise have picked that month. The tide goes in, the tide goes out. I just want you, Shingo, and anybody listening to Rule Breaker Investing to know that you shouldn't infer that because I haven't picked a stock, I don't like it for some reason. The world is so much bigger than our individual footprints that we can leave on it.
Now, finally, point No. 3, to close. At various points, I've thought hard about Microsoft. For about 10 years, I thought hard that I don't want to invest in Microsoft. I wasn't a big Steve Ballmer fan. One of the funnier YouTube videos I've seen is when Steve Ballmer comes out on stage and says he loves this company. It's to get the troops riled up because he's speaking to Microsoft employees. Pretty hilarious 45 seconds. If you haven't enjoyed Steve Ballmer saying he loves this company, please enjoy that YouTube video. That's the type of video that did not inspire me to recommend ticker symbol MSFT. There was a whole decade, a lost decade there. Unfortunately for Microsoft investors, it was a lost decade for your capital, as well. The stock just didn't do anything. But ever since Satya Nadella has shown up, the company has really rocked. He deserves huge kudos. He gets it, too. It's not like this is a man operating in obscurity. He's one of the more admired CEOs of our time at this point. Just think about how much it took to revitalize a company that large. It has been a wonderful outperformer for the last five years, and I've missed it, and I regret that.
Closing thought: I continue to not recommend it because I'm comparing it to other companies that are much smaller, or earlier stage. And I ask myself, "Will Microsoft triple from here? How much would that take? versus would this other company that I'm thinking about triple from here?" That's always operating in my thinking, and why probably I tend not to recommend huge-capitalization companies. It's not that I'll never do it. There are no rules. This is the Rule Breaker Investing podcast. But that's probably, Shingo, why I haven't recommended Microsoft. It's a company I admire. If you have it in your portfolio, you're a happy person, because it has been a great performer, doing good work in this world. Thank you for that question!
All right, Rule Breaker mailbag item No. 3. I have to get a little bit excited about this one because this is an epic mailbag item. It's not short, so I won't be reading all of it. But I'm breaking it up into parts. Tolkien did write Lord of the Rings as one continuous narrative, but the truth is, whether it was the movies, the books themselves, we as humans like to break things up into epic parts. Rick Engdahl, I'm going to ask for some epic music as we go through this epic mailbag item from Mark Alderman.
[♩ epic music ♩]
All right, that sounds about right. Mark starts, "Thank you for getting me started investing. I was one that once believed I didn't and couldn't possibly understand how investing works, and let others decide for me. Once I understood more, I realized I was in funds that mostly helped the financial advisor by having high fees and upfront load costs. I have since closed those funds, switched brokers, and picked my own stocks where I'm crushing the returns those funds were giving me. My only regret is not starting investing myself sooner." End of Epic: Part One.
What we have in the first chapter of our epic is a guy who realizes, he awakens, he switches on and realizes he can do this himself. Not only that, when he starts to do it himself, he realizes he was being exploited, maybe even in some senses financially abused, by the system where he'd just awoken. Almost like a sleeper agent in Battlestar Galactica, he'd awoken. Except he was a good guy, not a bad guy, like the Cylons. No, Mark has awoken. And then he doesn't look around, he takes direct steps. End of Epic: Part One, he closes those funds, listen to the verbs, he switches brokers, he picks his own stocks, he's crushing the returns of those funds. Love that story! David Hanson, who just joined us for mailbag No. 1, he talked about how he got started investing. A lot of people don't think you can do this yourself. But once they start to realize you can and do it themselves, the rest is history.
[♩ epic music ♩]
All right. Part Two. We'll call this The Two Towers.
"I got started with you in 2015 and I'm a current Rule Breakers and Stock Advisor subscriber. I listen to all the podcasts, watch all the YouTube videos." There are a lot of those. "Read all of your books." Well, that's a lot of reading. "And take advantage of the many resources on The Motley Fool website. I found that I have a passion for investing," very clearly so, Mark, "so I also read many other books, I listen to other podcasts, take courses, but I never buy a stock without consulting your services first. Your complete transparency and being upfront about the idea of investing for the long term is the most refreshing aspect. Many of the notifications and ads I receive from other stock picking services are the complete opposite.
"I never knew how interested I was in investing, learning about, and following businesses," Mark writes. "I have learned much about business and current events just from being interested in the financial markets. I find I'm better at my job because of it, as I look at long-term strategies for the business that I work for from an owner's perspective, not just as an employee. I'm able to have more intelligent conversations and make more intelligent proposals to help drive business decisions."
End of Epic: Part Two. Mark, what I love about that is, you're soaking in it. You're owning it. You're living it. You're probably reading more Motley Fool books that I've read. I'm pretty sure you're watching more Motley Fool YouTube videos than I've watched, and I've watched a lot of them, too. But thank you very much for leaning in! What I wanted to highlight here in Epic: Part Two is getting better at business, and getting better at life, having smarter conversations, seeing it not from the employee's point of view -- for most of us as employees, that's the natural -- but also looking at it from an owner's point of view, if you're running the company, or a shareholder owning the company. Just think about that. The act of switching on, as Mark did, pre-2015, all of a sudden, didn't just make him a better investor. It made him a better professional, and I'm going to bet a better person, too. Warren Buffett's great line, "I'm a better investor because I'm a businessman, and a better businessman because I am an investor," is one of the critically important points, I think, that we have to draw on in our 26 years of Motley Fool history. I'm so glad Warren said that, because we've used that and reused that around Fool HQ and speeches and, sure, on this podcast, too. The better you get as an investor, you start knowing what works. Then you say, "Hey, I'm studying companies that work. Let's try some of what they're doing over at Slack or Apple. Let's do that in our business." Because you're an investor, you start pulling into your life the things that you're learning as an investment researcher.
Consequently, and from the other side of the coin, as a person working in the professional world, you're going to make better investment decisions because you are looking at what works around you. You draw on your own industry knowledge, your own horse sense of being a professional. You're like, "I'm watching the stock that I'm researching right now try something that we did five years ago, and I think this will/ won't work." It makes you a better investor. Warren sure had it right. I've always said, this is not a 2D plane. This is not a circular thing. It's actually a 3D thing. It's like a gyre. It goes up. The better you get at this one, the better you get at that one, and you keep hopping upward. My motley [motto] here at The Motley Fool, the value I bring to the office every day is "Excelsior, ever higher." It's that sense of getting better at these things that's going to make you better. Love that part of your epic. Now, Epic: Part Three.
[♩ epic music ♩]
"You recommended NVIDIA several years ago, and when I took the plunge and the stock went up, I was more interested. I've learned so much since then, but I wonder, had the stock gone down right away, would I have moved forward, or would I have just given up and said, "this isn't for me"? I like to think I would have kept at it, but this is a message that should definitely be driven home with new investors, though I know you've touched on it before. I've made all the mistakes, but learnt from most of them, such as trading some stocks here and there. But even if I made a little bit of money on those 'trades,' every single time I look back, I would have made substantially more if I'd just sat back and let it ride. Less work and more profits. It's a no-brainer."
Now, he has a question. Mark writes, "My question is in regard to market cap. When picking a stock, I've learned to understand what a company's market cap is today." Yep, we did that last week. "Based on the total addressable market, the TAM," some people like to use the acronym, "based on the total addressable market, what the market cap might someday be, is it correct to use this information to try and glean what the stock price could be based on this? Using The Trade Desk as an example, as of this writing, it's about an $8 billion market cap. If I think it could be a $20 billion company one day," Mark writes, "and assuming they do not buy back or issue any new shares, does that imply a $520 stock price if that comes true? 520 * 38.51 million shares," taking that out to one extra decimal; nice, Mark, "outstanding would equal around $20 billion. I'm thinking this might not be right."
I'll stop it right there. After an epic story, a surprisingly anticlimactic -- I think, anyway -- question at the end of it. Almost a show of humility from our epic hero, Mark, who's written in. All you're asking is, basically, "Do you think about the market cap today as a fraction of the addressable market?" The answer, Mark, is, yes, I do. That's a big thing that we do with "The Market Cap Game Show." For example, with The Trade Desk, yeah, around $1 billion, looking forward, we think that could be a $100 billion company one day if everything plays well, beats its competition, and Jeff Green leads them on to victory, to a truly epic victory, because that would be like a 10-plus-bagger from where it is now, and it's already been an amazing stock. Who knows? But, yes, Mark, that is how we think about the stock market.
Yes, it is as simple as just thinking about where the market cap is today as a percentage -- this is assuming the stock doesn't get massively diluted, those kinds of things. You do need to keep tracking those shares outstanding. But in general, the math is as simple as that. Often, our investment thinking can be as simple as that. There'll be a question a little bit later in this mailbag that hooks into this, which I'll get to, in terms of the numbers of investing. But let's end it there with the denouement. I guess every epic should probably have the denouement.
Mark closes it out with, "Thanks for everything, as you've truly changed mine and my family's life, as we're definitely smarter, happier, and richer, and have more opportunities now than we've ever had before with the help of you and your awesome team. Respectfully, Mark Alderman. P.S., I will be in Alexandria, Virginia for business in a couple of weeks so I'll be stopping by, if only to see The Motley Fool HQ in person and to drop off a postcard for Alison and Bro." That's our Motley Fool Answers team.
Mark, I'm delighted you're coming by! If you, dear listener, are in the greater D.C. area, want to come visit Fool HQ sometime, or you're dropping by Alexandria, Virginia, you can drop us a note. email@example.com. It's how you got your mailbag questions submitted in the first place, unless you tweeted us @RBIPodcast. But, sure, we do tours, we have visitors. I look forward maybe to shaking hands with Mark, although I will be traveling to China in the month ahead. Mark, if I miss you, hey, you got to see our better half, which is the Motley Fool Answers team.
All right. That was an epic mailbag item. I miss that epic score. I'd love to hear it, maybe three seconds more?
[♩ three seconds of epic music ♩]
Thank you, Rick! On to mailbag item No. 4.
Rule Breaker mailbag item No. 4. This one comes from Nick Jackson. Nick writes, "Dear David, I'm writing to you to show my appreciation and with a question. Firstly, the appreciation. Every year, I try something new. At the beginning of 2018, I decided that thing would be learning to trade stocks. Note I say trade. Like so many people at the beginning of their investing campaigns, I wanted a quick buck. I'm proud to say I did fine with that. I turned $800 into $850 by the end of March, a time when the market was hiccuping." That means, in three months, he went from $800 to $850. "But it was draining to watch scanners," I don't even know what that is, "and movements closely every day. Without getting into the details, I'm glad that I found The Motley Fool. After reading several of the articles you guys put out and looking at the track record of you, David, I decided that trading was not what I thought it was, that I wanted to be invested in companies that I love, think are fun, and do splendid things.
"It was around my birthday, apparently very close to yours, near the Ides of May, that I decided to purchase subscriptions for both Rule Breakers and Stock Advisor." We see an emerging theme in this month's mailbag. A lot of talk about Stock Advisor and Rule Breakers. Well, Nick goes on, "This was a big decision, as the cost was roughly half of my invested funds at the time. But a year and some change later, it's paid for itself twice over, and I still have a year left. It was an investment I made in myself, and it paid me greatly and will continue to do so. That's a good segue into my question."
Before I read your question, Nick, I want to say back, great job! It is an interesting question and answer for a lot of us -- how much would you spend to learn investing? How much would you spend on your own financial education? On the one hand, we say things like, "Try to keep your costs of investing below 2%." That would include commissions or any other fees that you might be paying for financial professionals in your life. I think that makes good sense. But that's more steady state, once you already know how things are doing for you, how things are going to go. You already understand investing.
But for a lot of us, we don't understand investing. That's a big theme of this week's podcast. How much would you pay for a tuition to learn the markets for the rest of your life? I think it's quite a lot. If you were to do the math, you'd see you should be willing to pay quite a lot. So, on the one hand, when I read that Nick spent half his money at the time to subscribe to our services, I think, "Oh, he could have invested that in stocks. Maybe that was a misallocation." But then again, I think, no, that's not true. A lot of us pay tens of thousands of dollars every year to be in higher education. We don't expect any direct return for that. We're not investing our tuition into stocks -- at least I hope we're not -- and hoping they'll go up over the course of time. So, I say good on you, Nick! It's food for thought for the rest of us. At a certain point, you don't want to be spending too much on your investing. You want to be investing as much as you can. But in order to get to that place, most of us probably need some kind of a jump-start, and some expenditure way below the tuition that most of us are paying, in order to learn this critical and rewarding subject.
Okay. "On the subject of investing in oneself," Nick continues, "I've started a side project of creating a video game. If this is read on the podcast, you don't have to read this shameless bit, but it's a video game called Space Y: Rogue. The website is spaceygame.com. I feel as though investing more into the game would increase the chances of it becoming at least somewhat popular, and obviously increase the quality of the finished product. However, I just can't bring myself to do it, at least not with meaningful capital. I have a safety net, but I fear my money is of better use in the stock market. Something you said several months back as advice to entrepreneurs is that the market is great, but if you have an entrepreneurial spirit, then invest in yourself. Your idea, paraphrased, has stayed in my head, but I need a little more to pull the trigger or to back off completely. I was wondering if there are any statistics comparing the market to investing in oneself, or any rules of thumb, so to speak, that is Rule Breaker-y. Yours Foolishly, Nick Jackson."
Nick, short and sweet, here's how I'm thinking about this. Ultimately, you want to do both of these things. We want to have our cake and eat it too, as we've often talked about on Rule Breaker Investing. I definitely want you to continue your investment, not just your education anymore, but now your investment history. I want you to save money and put that into stocks, because the odds of prospering that way are really, really good if you're investing Foolishly. Don't forget, the market is the wind at your back. It tends to rise around 10% or a year. Money you put in it now, you'll be really happy 20 and 50 years from now. Do the math. It's crazy, almost, to invest in anything else if you're not sufficiently apportioning funds toward the market. Very high expected rate of return with confidence relative to most things.
On the other hand, we hear small businesses fail -- I'm going to make these numbers up -- 8 out of 10 of them just fail all together. So if you're just purely doing the math, it probably makes sense for you to put those funds toward the stock market if you are not already sufficiently invested. Sounds like you're still at the outset, so that would be my tendency.
But how do we have our cake and eat it too? Well, the answer is, I bet, since you're creating your own game, anybody who's doing their own side project or major project, you're investing your time in that. Time, as was one said in World of Warcraft, is money, friend. I bet you're already investing a huge amount of yourself into, in this case, your video game, or any of the projects, hobbies, or professional undertakings that anybody hearing this right now is doing. The value of your time, that is the most finite and valuable thing we have on this earth, is our time, and I bet you're already putting a lot of time toward it.
Now at the end, if I've left you on the horns of a dilemma and you still don't feel like you've been nudged either way, I would say split it down the middle. Take half of the money you're planning to invest and invest it, and take the other half the money that you were thinking to invest and put it toward your project. You don't have to make that permanent. You can just do that this month. And then next month, you can say "Which one's feeling better to me?" A lot of is going to come down to whether your side project is going to work or not. I'm not just speaking to Nick here; I'm speaking to anybody who's thinking or investing toward something that is personally gratifying and/or commercially viable. Those things are sometimes different things.
Nick, I hope that's given you some food for thought. For anybody else, this is a very common question. Where should I put my money? Where should I put my resources? If Jeff Bezos were on the show, he talks about the regret minimization framework. We've talked about that before. But here's the thought -- when you're 80 years old, look back right now on yourself, Nick Jackson. The 80-year-old Nick Jackson looks back at the one today and says, "How did I minimize the regret that I feel at the age of 80? Did I put it toward my game? Or did I put it toward the market?" So, as a much more mature version of yourself, try to minimize the regret you're going to feel then. Maybe that'll help you make the final decision.
Rule Breaker mailbag item No. 5. This one, I believe, comes from the YouTube comment area of a Motley Fool video, speaking of watching Motley Fool videos on our YouTube channel. By the way, we got a plaque recently. Did you see this, Rich Engdahl? We got a plaque sent to us from YouTube.
Rick Engdahl: I did, yes. It was shiny.
Gardner: Silver. I won't say platinum. I don't think we're platinum worthy.
Engdahl: Not platinum yet, no.
Gardner: I won't say pure silver, either. But silver-ish. Silvery.
Engdahl: There was a mirror involved.
Gardner: What was it celebrating?
Engdahl: I believe it was 100,000 subscribers.
Gardner: That is awesome! Credit to Dylan Lewis and our team here at The Fool. Someone internally here -- probably Dylan, who hosts one of our Industry Focus podcasts and does a lot around our YouTube channel, has helped to build that -- but somebody hereabouts these parts in Alexandria, Virginia, said eight months ago, "We only have like 20,000 followers on YouTube. We're really not doing much there. We should enliven that. It's a vibrant channel." So, not only did we pass the 100,000 mark and get a silver plaque from YouTube, but I think we're already near 150,000 now. We've got a big, ambitious goal there. And yes, we do read the comments on YouTube videos, because that's where this mailbag item comes from. Chase Parker, who might not even listen to this podcast, was just commenting on YouTube, but said, "What does David have to say about the antitrust probes making these tech stocks drop? Is this noise, or is this damaging?"
Two quick thoughts on that. The first is that I'm always sad when we go after companies because we think that they're getting too powerful. I'm not sad if I think those companies are abusing their power, if they're doing bad things in this world. I'm not sad if we're going after companies that control supplies, like they own all of a commodity, and they're jacking up the price for all of us, or they have the whole railroad system in the 19th century, and they're just fleecing all of us. I'm not sad if we go after those. But if we're going to go after companies that add convenience to our lives every day, that offer products for free, that you and I are just choosing to use on a daily basis, that doesn't sound like a dystopia to me or something, personally, that I think should be broken up. Now, there's always legitimate questions about companies like Facebook, about how they're handling the data, let's say. But I'm also aware of other places in the world that are a lot less respectful of data, and a lot less accountable for how they're handling data, than the under-the-microscope Facebook. Or, to go to Amazon, which is sometimes talked about as a company that quote-unquote "should be broken up." Amazon delivers stuff, it used to be within two days or so. Now it's getting down to one day. It's a company a lot of us are buying a lot of things through and really enriching our lives.
Whether you, Chase Parker, or you, dear listener, are for or against any of these companies, that is up to you. For my own part, I will say, with point two, if I were China, or another country competing against us for global domination, especially with our commercial approach to the world, if I were China, I would love it if I were thinking that in the United States, a lot of people were saying, take down their best companies. I would think, competitively, we're probably not going to do that in China, to our companies. But if the U.S., if there's some kind of counterrevolt against many of the biggest, best players, not just in America, but in the world, that's really going to help competition against these companies.
To close, Chase, every company is a distinct situation. I don't even like to group them all as FAANG stocks, I always say that with a chuckle, or techs, as you said in your comment. I don't even think of tech stocks. I just think of each company, and what does it do, and is it making the world better? They can be really hard to compete with when they get to be big, but they're going to be competed with successfully if they're big and slow, or big and abusive. The world today is too competitive. Too many other things pop up out of the blue and start competing against things that we thought used to be good enough. I used to think newspapers were good enough until the internet showed up. I used to think that stores were good enough until Amazon showed up. I really don't think we want to hold back the guys that are carrying the torch forward for all of us. I can guarantee you this, there's a next generation of new companies that are going to come and compete against these. I bet some of you are starting those companies right now. It's a competitive world. I usually think the beauty of this competition is that the winners are those who serve you and me, in most cases, best, with a better product, a better service, and/ or a better price. That's my thought. Let's go to Rule Breaker mailbag item No. 6.
All right, a few more for you. Then I'm going to welcome back my friend David Hanson for the bookend close to this week's podcast. Let's go to No. 6. This one comes from Kurt Elia. I'm going to say my friend Kurt Elia. I got to know Kurt because he listened to our podcast and would tweet a mailbag item @RBIPodcast on Twitter over the years. But as it turns out, he's a Fool member. I got to meet Kurt at Fool Fest a few weeks ago.
Here's how his note starts. "David, first, let me say what a pleasure it was to finally meet you in person at the 2019 Fool Fest last week." This is written a week ago. The Foolish wisdom that I've gained from you over the years was a key ingredient in helping me to fulfill my dream of retiring early four years ago." Kurt, very handsome guy, I think you're younger than I am. Well done, you retired four years ago. "The financial independence that my investment portfolio has given me has allowed me to spend my time as I choose, being a more present father and husband, pursuing my passions, traveling the world, and even continuing to work here and there selectively on the projects I enjoy with people I like. That really has been the gift of a lifetime. I've been incredibly fortunate in my life and I've been looking for a way to give back in a meaningful way. When I heard you talk about The Fool Foundation last week, it really struck a chord with me. While I've taken steps to introduce my own kids to the fundamentals of money and investing, it's always bothered me that most kids grow up never learning these basics, and often end up leading much less secure adult lives as a result. The Fool Foundation's mission of reaching out to young people to help them become smarter, happier, and richer strikes right at the heart of this issue, and I would like to be a part of it. My twin sons enter Chapel Hill High School this fall. Go Heels." Thank you for the callout, Kurt! "It occurred to me that this could be a great opportunity to see what the school is doing to promote financial education of our kids, and to do what I can to enhance it. While I could go it alone on this," Kurt writes, "I know I would be even more effective with the power and wisdom of The Fool behind me, so I thought I would reach out to you to ask -- what support can the new Fool Foundation provide to me and other motivated parents with high-school-aged kids to further this mission? Ideas could include advice on how to approach our local school administration on this topic, providing a financial 'seminar in a box' we could use on the ground in our local schools, online resources we could direct young people to who want to learn more, sponsorship of high school investing clubs, etc. Thanks again for your life-improving work. Fool on, Kurt Elia."
Well, Kurt, there are many beautiful things in that note, but they're already self-evident. It was very well written. I'm so glad that you found the agency that we all desire. Through financial independence, you are free to choose, as you say, and the things that you choose are deeply meaningful, and you're getting to be selective, working with the best things and the best people, trying to make the best decisions with your time that you can. In many ways, once we reach that point of financial freedom, then the real work starts. Then you say, "Why am I on this planet? What am I here to do? How can I make things better?" I am excited to hear your story, Kurt. I'm also happy to include that shout-out to Chapel Hill High School. I didn't go there myself. As many know, I went to the University of North Carolina at Chapel Hill. But I came from out of state from my home city of Washington, D.C. But Chapel Hill High School, certainly an important part of the community.
To generalize and broaden from that and give my brief answer to this mailbag item, this is not about Chapel Hill High School or Kurt. This is about every high school, and this is about you. Whether The Motley Fool Foundation -- which we recently announced, which is our not-for-profit, whose purpose is to prepare the whole world to invest -- whether we focus on high school kids, or younger kids, or kids at all, maybe we'll just teach the teachers, we are in a discovery process right now, thinking, how best can we fulfill our vision to prepare the whole world to invest? There are a lot of wonderful financial literacy programs already in place. Companies like Capital One have partnered with Junior Achievement. They do a really impressive Finance Park, both here locally, and they do important work outside of this big city as well. There are lots of people working hard toward financial literacy. In fact, the state of Virginia has now a required financial literacy equivalence. You have to take a test to become a graduate of high school in the state of Virginia. I think have that right, and I'm pretty sure Virginia is not the only state. I think some of you are raising your hands right now in your state, because that's increasingly true. That's a wonderful world that I want to live in, and I want to increase that and accelerate. We're going to figure out how to do that.
But one thing's for sure, Kurt -- The Fool Foundation will be counting on members like you and me to help. Sure, it will be wonderful to be able to take in donations for the first time. I hope that we've created prosperity for you. I hope you want to share a small portion of that back to help fellow Fools and Fools-to-be globally to really understand how to make better decisions, sometimes the simplest decisions, around their money. But there's also your time, and there are other things that we'll dream up together. I am tremendously excited about The Fool Foundation. Thank you for writing in! I am the Chair of The Fool Foundation, so it means a lot to me. Yes, we are in the process right now of cutting through resumes for our executive director. That's where we are. Quick update for those who care about The Fool Foundation.
Kurt, you pretty much nailed it right on when you talked about the importance of this work in the world, and about what you and I can do. Whether there's ever a Fool Foundation or not, every one of us can get more involved with our schools, our kids, and the people around us, and get them -- like our epic correspondent earlier, Mark Alderman switching on all of a sudden, realizing the world can be better, and taking control and having much better results, not with their money, but in their life. Kurt, you embody that as well. Thank you!
Mailbag item No. 7. Earlier in this podcast, I mentioned talking about numbers and looking at numbers. We were talking about market caps back then. Well, here's Nate from Oakland, California writing, "Hi, David. I noticed that you, compared to other of your fellow podcast hosts, spend much less time discussing financials or other numbers, except market cap. Perhaps this is only because numbers don't lend themselves to the podcast format as much. I'm curious, as you're evaluating stocks, how much time you spend poring over numbers, financials, and trends compared to how much time you spend researching the market, reading, listening, and watching material from the leadership, reading SEC filings, etc. I feel like I've been slowly developing my own process," Nate writes, "for evaluating stocks, but I'm wondering what your process is like? Or, does your process depend on the nature of the company you are evaluating? Thanks, Nate from Oakland, California." Thank you, Nate! Thanks for writing in!
Two points I want to make here, Nate. The first one is, yeah, I love numbers! I care a lot about numbers. Every stock that I pick for Rule Breakers and Stock Advisor, I've had one or more analysts, often multiple analysts here at The Motley Fool, vetting them. I've designed my own template in which those analysts type in their reactions. Critically important are the income statement, the balance sheet, and the statement of cash flows. We pull key numbers off of those. Nothing subtle here, no secret sauce. I like to see sales growth, I like to see the profit margins of a company, I like to know how much company cash is sitting on the balance sheet, and how much company debt might be sitting on the balance sheet. I like to know if the company's cash flow positive or not. Sometimes companies are generating cash flow, but look like they're losing money because their earnings are negative. Amazon was that way for a long time. I like to notice that. And I like to do ratios and see growth rates. Never anything more than fifth-grade math, as I've been wont to say in the past. So, yes, I love numbers. Numbers matter a lot.
You're right. It's not the most interesting thing to rock on a podcast. I'd far rather share stories on my mailbag than lots of numerical answers. When we're going to do "Authors in August," which we're going to do in a couple of months, where I have authors back -- just like I did last August -- this coming August, I'll be mentioning that at the end of this podcast, get you a short reading list going. But I like to talk with authors. Maybe we'll mention dates or factual numbers, but we're not spewing numbers. We're not technical investors here. But we are fundamental investors. I care deeply about the numbers behind the companies that I recommend. And, of course, I care deeply about the numbers they generate for us as investors. That's point No. 1. Yes, it counts, but you're right, it's not great for podcasts in my experience.
Then, finally, point No. 2 is, even though you and I use numbers, I hope -- you're talking about developing your own process, Nate, so I hope you're using numbers in your process -- my actual belief is that most of the world is running the numbers. Most of the investment world is very numerically driven. And then they have algorithms that are searching for certain numbers in screens, and then trade, sometimes within a second, inside of a second, trade in and out of stocks based on all the numbers. I'm never going to try to compete with that. Not only that, I don't want to. It's so short-term, and it would be so exhausting, I have no interest in it. I think our real edge, often, as Foolish investors, comes from the right side of our brain, from seeing what the world is not seeing, from projecting things forward, from thinking about whether that brand is a winning or losing brand, or whether that ad causes you to want to be part of that organization or not, or whether the leadership is innovative. By the way, who is running the company? These things are not expressed on the balance sheet, income statement, or statement of cash flows. It's those right brain things, often, that I think give us our edge. I hope you'll make that part of your process, too. That's what I do a lot on Rule Breaker Investing. I present that part for our podcast because I think it's more fun to talk about, and it's ultimately where I think more of our value lives.
All right, well, time is running out. How about two more items? One, and then I'll have my friend David back to close. Rule Breaker mailbag item No. 8. A couple of notes here, both short. I'm going to call these both spiffy pop notes. The first one comes from Jason Dekdebrun. Jason says, "Hi, David. After listening to every single episode of Rule Breaker Investing."
Yep, that's the sound effect that Rick Engdahl plays anytime somebody has said they've listened to every single Rule Breaker Investing podcast! After all, they number now more than 200. That goes back over, well, we started in July 2015, by my count, this is informal, because we have no highly paid research staff that knows the facts, I believe this is the 210th Rule Breaker Investing podcast. If they average somewhere around 40 minutes, well, that's a lot of content. Darn it, Jason, you deserve that sound! Thank you for listening all the way through with us!
But you were actually writing, saying, "I don't recall ever hearing you mentioned the concept of a divvy pop. When a stock issues a single dividend payment in the same amount as your original purchase price for the stock. I'm assuming you're using a term similar to this around the office. Perhaps I missed it on a past podcast. Otherwise, I'm bringing it to your attention."
Jason, yes. We actually did coin the term "divvy pop." It's funny you mention that. It's right there on our spiffy pop page. If you google "spiffy pop Motley Fool," you will find our famous, iconic, spiffy pop page, listing all of the spiffy pops we've had in our premium services. As I mentioned, 2018, an amazing year. We had 54 spiffy pops in just one year. We've had a bunch more in 2019. That's a fun page to track. Scroll down, I think you'll find a divvy pop there. So, yes, we love the concept of a divvy pop. The reason I don't play it up too much is because many of my stock picks don't pay dividends. It's very hard to have a divvy pop if you're not getting dividend payments. But just to underline Jason's point there, yes, if you receive a dividend payment, a single quarterly dividend payment, and that dividend payment is equal to or in excess of your cost basis for that stock, you have done something amazing. You have divvy popped.
On the other hand, continuing with spiffy pop, Rule Breaker mailbag item No. 8. Chris Abeles. I think I have your name right, Chris. Chris wrote, "Hi, David. I was wondering if you could help me with some stats around spiffy pops. What's the mean, mode, and standard deviation around the time needed before -- "
I'll stop it right there. Chris, you have overrated our ability to calculate, track, our knowledge base surrounding spiffy pops. It's actually a lovely note! He just wants to figure out what an average spiffy pop would be because he's had a few and he's wondering if they're happening faster than they should have. This is somebody who is bringing some of the language I remember from my statistics course at the University of North Carolina freshman year. I didn't do so well in that course, but I still remember standard deviations pretty well. But you were asking for various measures that we don't really have around spiffy pops. If we were a larger company and I had a research staff dedicated to every spiffy pop we've ever picked, then we could start producing some of the statistics that you have.
Now, that spiffy pop page I mentioned earlier, well, that would have data that anybody could use and crunch if you wanted to put in the time. But please remember, sometimes I feel like we cast a bigger shadow than we should. This podcast is a production of lil' ol' me and my pal, Rick Engdahl, who has indeed produced almost every one of those 210 episodes, going back four years. It's pretty much just us. Yes, we have The Motley Fool around us, but there's no research staff dedicated either to this podcast, or, sadly, to spiffy pops. There's no division. One day, perhaps, there will be a spiffy pop division here at The Motley Fool. If there is, there'll be a small divvy pop team that's part of the spiffy pop division. Thank you both for those questions!
All right. I always try to save the best for last with mailbags, and I hope I've done it once again. Rule Breaker mailbag item No. 9. And, oh, look! He's back! David Hanson!
Hanson: Hey! How's it going?
Gardner: David, thank you! You're part of making best for last happen. I love having cool, fun people that I get to hang out with that aren't me, joining me for mailbag. Thank you for enhancing Rule Breaker mailbag item No. 9!
Hanson: Of course!
Gardner: I really want your perspective here. Here we go! "Hi, David and everyone at RBI. I have always wanted to share my stock story with you. A couple of weeks ago, I heard David respond about how people felt when they received multiple emails from different services at The Motley Fool. I think my stock story has a little something to say about that. Disclaimer: I wrote this email of my own free will. I do not get any compensation from fool.com, lol.
"Once upon a time," she writes, "there was a girl who was very curious and interested in investing for her retirement. That person was me. I've been doing well maxing out my 403(b). I was lucky to have entered the workforce in 2008, the year the market crashed, as I learned a little later. I didn't pay any attention to the stock market at the time. My money has done very well since. However, after a while, growth stagnated. My curiosity grew stronger about different types of investments. That's when someone at work mentioned The Motley Fool. I decided to check the website fool.com out. I found a ton of investing information and useful knowledge that invaluably ranges from beginners to experts.
"Somewhere along there, I must have given The Motley Fool my email address. That's when my first advertising email arrived, sometime in 2015, when I first fell for a Motley Fool ad. I remember starting to read a very long email. It had a video. At the end of about 15 minutes of that long video, it started talking about this one stock that could change the AI world, or something like that. The email told me that I needed to become a member of Stock Advisor, whatever that was, and it would cost me so-and-so much. I was pissed," writes our correspondent, "hahaha. At that point, I knew I wouldn't get to see the name of that one mysterious stock for free. But because I spent almost half an hour reading and watching the video, so whatever, I'm going to see what the stock is, and they're backed by a money-back guarantee, so, what the heck, I thought. That stock was NVIDIA.
"After knowing the name, I read up about the company. I decided to invest in the future, so I bought 100 shares of it, I believe at $23. A bit later, I bought 100 more shares at $26, then 100 or more at $35, and so on. We all know what the stock has done since." I'm going to pause right there because maybe not everybody knows what stock's done since. David, you and I probably know. NVIDIA has been a big winner.
Hanson: Yeah. My eyes got large when you started giving the details.
Gardner: Yeah. Now, not every stock promotion that we do to find people to join Stock Advisor -- just, broadly, across the internet; The Motley Fool advertises a lot -- not every one of them probably has done as well as NVIDIA. I'm thinking of, 3D Systems would be one of mine that was a clunker. But I'm really delighted, because NVIDIA has, in fact, become one of the great companies. Here are two fun facts, one of them not so fun, about NVIDIA. The not-so-fun fact is, it's been cut in half over the last year. The stock, despite being totally awesome since our correspondent first bought it, is actually down from $300 to $150. But the awesome point No. 2, the fun part is, that when you're buying at $20, $20 again, $30, and the stock's at $150 just a few years later, you're probably a happy member, as indeed I am, as somebody who recommended NVIDIA back at around $6 and change more than a decade ago. It's been a tremendous winner, but it's taken patience, and yeah, it's gotten knocked down sometimes. So, that, when she says, "We all know what the stock has done since then," now we all know what the stock has done since.
Picking up there, she says, "I've sold small portions of the profits to fund my other new exciting investments. NVIDIA still remains a large portion of my portfolio. The moral of this long stock story is, I don't get annoyed or upset anytime I receive Motley Fool emails. I am, in fact, very excited to receive them because I'll never know which service might be interesting to me. I see it as an opportunity to learn about what The Motley Fool has to offer. That one email changed my life." I'll say improved her life. "That one email, that $159 for three years of membership --" David, did we give away Stock Advisor for three years for $159?
Hanson: There are some good deals out there.
Gardner: That's outrageous!
Hanson: Maybe not that good.
Gardner: Maybe not that good. This was an earlier era of The Motley Fool. Three years, $159. Improved her life. "By far," she says, "the best investment of my life. Keep in mind, that's just one company recommended by The Motley Fool. Since then, I've explored many services in The Fool family, some I decided, not for me. They gladly refunded my money or transferred me to different services. I'm very excited to become a member in the new Navigator portfolio. I'm looking forward to many more exciting things from The Motley Fool. Thank you, David and your team, for always educating, amusing, and enriching."
To conclude, she writes, "You really don't have to share this story, but I thought it ties into what we talked about in the last few weeks on this podcast. I always want you to know how I became," here it is, "your biggest fan." Oh, this is from Jyum! Jyum, a couple of years ago, you wrote me, and you said you were my biggest fan. In that week, I mispronounced your name. And then, the week after the podcast I said, "I finally found my biggest fan and I mispronounced her name on the podcast." Here we are, a couple of years later. Hope things are going well with you. She says, "Not only that, you and your team made me richer financially, but also everything I learned from you and your team at The Motley Fool -- please refer to my first letter to you -- it's not about investing, it's about life, and how financial independence can help you do more others. If you do decide to share this, please edit it and correct any grammatical errors as you see fit, lol. Forgive my English as a second language. Thank you David and RBI team for your time. Fool on, Jyum." Our biggest fan. Awesome!
Hanson: Before you kick it over to me, is that a real person? Is that your pen name? Did you write this email?
Gardner: I'm almost certain that I did not write this message myself.
Hanson: That's a great story!
Gardner: With my declining faculties, there is some small chance that I wrote this myself in a reverie, and sent it to Rick, and forget I wrote it. But I'm pretty sure Jyum is real. But even if she's not, and she is, presumably somewhere else out there, my big fan is not me. I hope there's somebody who likes me more than I do. But, more to the point, there's a couple of gems in that note. As you listened to that, what jumped out to you, as somebody who runs the business side of things and has done a lot of marketing for us?
Hanson: The way she heard about the story of NVIDIA. For anyone who's seen content or messaging from us in that way -- we're trying to tell a story of a stock. Yes, sometimes it takes a little bit longer to tell the full story of a stock. I think the big disconnect, especially for someone who's listening to the Rule Breaker Investing podcast like, the audience here that's listening to this, on average, is way more engaged with investing and business and stocks.
Gardner: Right, they're listening to an investing podcast, my golly!
Hanson: Yes, versus our fool.com properties around the world get around a million visitors a day. The spectrum of experience in investing varies widely. We have, as she mentioned, experts coming to us, people who work in investing every single day. We also have someone coming to our site who knows nothing about investing. Many of these people are not waking up in the morning and immediately thinking, "I'm trying to find the best stock to buy today." A company our size, we are trying to reach out to people who are outside of just the people who think about investing every single day.
Gardner: Yeah, otherwise we wouldn't grow much. We wouldn't be where we are now.
Hanson: Exactly. Our mission is to connect with the world, and make them smarter, happier, and richer. Often, we need to get people excited. Again, for the person who's like, "I've heard about investing, but isn't that super risky? Isn't it just for professionals?" We're trying to get you excited about a story. We truly believe in and we stand behind all of our research here. Again, three years for $159. Find me a better deal where you can get the level of research and quality of recommendations that we have. It's a great deal!
Gardner: If there's a theme to this mailbag, I think it's switching on and realizing you can do this yourself. I didn't intend that as I combed through our mailbag entries. I just listen to what you all have for me each month. But that came through pretty strongly. I'm saying that's theme, probably, of this podcast. But I do chuckle a little bit here, David, perhaps you do, too. One of our tactics as marketers is sometimes the long, long email or the long video. Some of my friends have come to me and said, "I was angry at you earlier today. Even though I like you, David Gardner, I was angry at you, because you started this video, and I was watching, 20 minutes later, and I still don't know what the stock is. I want to know what the stock is." What are your reflections on that? Clearly, this is a marketing tactic. We could have done it in one minute. But when we AB test 18 minutes against one minute, we see who signs up, which typically does better?
Hanson: We have typically found that longer and more detail tends to convert more people, and more people will join our services and stick with us. Again, we're very aware of, there's a segment of the audience who would prefer, "Just give me the 30-second pitch." We're working very hard as a team to try to identify those people and customize our messaging so it fits people's preferences. But on average, and most people listening can empathize with this, when you're putting your credit card down, whether it's $159, or $1,000, or whatever the price point is, most people will default to, "Give me as much information as possible." So, we tend to default to give people more information. Yes, there are times where, maybe we're too long in the tooth, and we're going on and on. But we're trying to find that right balance of the proper amount of information versus being careful with people's time. We want to respect that.
Gardner: I'm not a marketing professional, but my undergraduate view of things is, presumably, if somebody has spent 15 minutes, they are more invested, probably, in the possibility of joining a service, than if we had a 15-second hit and hoped to get their attention for 15 seconds. So, probably, part of the reason it works is, for people who do take the time, clearly, they thought it was worth it. They started saying, "Maybe I do finally need to start investing," so they put down some time. Maybe that's why it works better.
Hanson: Again, like I said, the listeners of this podcast, we love you guys! We love that you're part of our company, and part of our audience. We're trying to create more RBI listeners. Oftentimes, again, for the person who doesn't know anything about investing, they're not going to be convinced that they should take the leap and take the risk and get in the game after a minute. It's just the truth.
Gardner: They want to hear about a big trend or an interesting company.
Hanson: Right. If you think about any purchase you're making in your life, it's very rare that you're doing it within 20 seconds. You're going to go do some research, you want to get the full story. We're trying to find that balance.
Gardner: One thing's for sure -- we're working as hard as we can to make the world smarter, happier, and richer. David, thank you for all the work that you put in over your time so far at The Fool, as one of our leaders, to help us grow our audience. Yeah, an 18-minute video might sound long until you realize we're probably in minute 50-something of this podcast! Thank you, first of all, for staying all the way with us, as many of you do. That's why we shamelessly sometimes do about a one-hour podcast, especially for our mailbags on Rule Breaker Investing. We want to make every minute of your time worth it. David Hanson, thank you very much!
Hanson: Of course!
Gardner: I feel it wouldn't be appropriate for me to close this week's mailbag if I didn't mention that you can get started with The Motley Fool services. If you're interested in Stock Advisor, joinsa.fool.com. Or, if you find yourself more thinking about what's next, join rbi.fool.com. Before he walked out, David Hanson also said, anybody who'd like to can email him with questions about our services or any of our marketing, anything, it's firstname.lastname@example.org. That's a great show of leadership, typical of so many of my employees, where they're like, "Yeah, here's my email address. Get in touch if we can help."
All right, well, that's the end of this mailbag, and that's the end of this month. Next month on Rule Breaker Investing, it's July, and we're going to be kicking off July with a review of three past five-stock samplers. That's coming up next week. Excited to see how those stocks are doing and why. We'll all learn together. And, as I referenced briefly earlier, August will be our second year of "Authors in August" on Rule Breaker Investing. I already know two of our authors who are signed up. If you haven't already read either of these books, you can put this one on your beach reading list if you're near a beach or you like to read anytime in July. The first one is the book A More Beautiful Question: The Power of Inquiry to Spark Breakthrough Ideas. That's by Warren Berger. I'm also enjoying his follow-up right now, The Big Book of Beautiful Questions. If you're really on fire, you can read both of them. I'm sure we'll be talking about both. But Warren has written a book, to get the best answer in business or in life, you have to ask the best possible questions. He's an innovation expert. He shows that the ability to question, he calls himself a questionologist, the ability to question is both an art and a science, by showing how to approach questioning with an open, curious mind and a willingness to work through a series of why, what if, and how queries. Berger offers an inspiring framework of how we can all arrive at better solutions, fresh possibilities, and greater success in business and life. That's A More Beautiful Question.
The second week of August, it'll be Natural Born Heroes by the author Christopher McDougall. Mastering the lost secrets of strength and endurance, his journey begins with a story of remarkable athletic prowess on the treacherous mountains of Crete. A motley band -- this is a true story, of course -- of World War II resistance fighters abducted a German commander from the heart of the Axis occupation. To understand how, Christopher retraces their steps across the island that birthed Hercules and Odysseus, discovers ancient techniques for endurance, sustenance, and natural movement. It's a wonderful adventure story, and a book I highly enjoyed reading.
Those are our first two "Authors for August." Get started reading! Have a great week! 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.