We like to pick and review stocks, play games, interview authors, and rant about pet peeves, but every so often we must go back to basics and recommit to the eternal verities of Rule Breaker Investing. Today is that day!
In this episode of Rule Breaker Investing, Motley Fool co-founder David Gardner discusses his nine Foolish truths about investing and business.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
This video was recorded on Oct. 9, 2019.
David Gardner: What are the eternal verities? The things that have the state or quality of being true? Do you know the phrase eternal verities? Well then maybe some of them. Truth. Right and wrong. Good and evil. Hope, love, compassion. You might have your own, though to live up to the phrase, they need to be eternal, and they need to be true. But what are the eternal verities in the world of money? In investing specifically, but also in business? Well, every two years on this podcast, I bring you Nine Foolish Truths that I hold to be Self-evident, things that I believe, that I hope you believe, things that I believe you should believe. Truths I want to make sure I don't forget to state and restate, reemphasize, at least every two years.
Indeed, it was two years ago this very week on this podcast that I last spoke to these, which means it's time once again for one of my most important podcasts that I ever do for you. It's time for nine Foolish truths I hold to be self-evident this week on Rule Breaker Investing.
Welcome back to Rule Breaker Investing! What are we doing this week? Well, I want to go back, as I mentioned, and restate some of the classic Rule Breaker points, stories, basics. For some of you who may be new, longtime listeners know that after you do a couple of hundred podcasts -- and this is No. 225 for Rule Breaker Investing -- the older ones, they start to drop below the fold on iTunes, etc. You can always find all of our podcasts, by the way at fool.com/podcasts. You can find every Rule Breaker Investing podcast there, though admittedly, it's a long scrolling experience. You'll have to keep loading, loading, loading in order to go back more than four years now. But that's not just true of my podcast, but of all Motley Fool podcasts. Again, fool.com/podcasts.
Given that we are in some senses, then, losing that material, I wanted to, in this 225th Rule Breaker Investing podcast, go back to some of those first 10 or so and review some of those points. Now, a lot of podcasts, you can just start in the middle, right? Not all of them. Something like Serial, the very popular NPR podcast, you may not want to start in the middle of a season. It's kind of like starting the middle of a season of a good Netflix series. But for a lot of other podcasts, let's say the newsy ones, you can pretty much pick up anywhere you like. But for Rule Breaker Investing, this is a strategy. This is an approach. It's a thought framework I think is helpful for any new listener to have that in place as he or she begins listening to No. 226, No. 227, etc. That's why we call this podcast Nine Foolish Truths that I hold to be Self-evident. Nine things that I take for granted, I think you should, but I don't want to take for granted that you do take them for granted, or know them for yourself to be self-evident. So here are my nine self-evident Foolish truths. Let's get started!
Foolish self-evident truth No. 1. No. 1 is about business. In fact, the first two are about business. We're not even talking about investing yet. Point No. 1 is about how to do business right, and finding businesses that do business right as an investor, and there are a lot of them, and they're growing. I would say that we are living in an increasingly enlightened, capitalistic environment. Not ever to say things are perfect or can't be improved. But in fact, one of the things I love about the time in which we are living is that things are pretty persistently improving. As Kevin Kelly, the author of the book The Inevitable said on this podcast, we're living not in a utopia, and certainly not in a dystopia, but rather in a protopia. That's a world that gets a little bit better almost every day, but almost invisibly so. It's not evident until you step away and look back a year, or 10 years, or 500 years and you see the amazing amounts of human progress that get rolled up over time. So, yeah, one of the things I love about the time in which we are living is that things are pretty persistently improving. Now, sometimes in fits and starts. Sometimes we take a big step backwards. It's not true of all areas of the world. But the way that capitalism is practiced and taught today is far superior to what I inherited, anyway, when I came on this Earth about 53 years ago. Maybe you, too.
I guess apropos of that point, I should mention that I'm taping this podcast a few days before I make my annual trip to Austin, Texas for the Conscious Capitalism CEO Summit next week. So, point No. 1 is quick, chapter and verse, conscious capitalism.
There are four principles that underline what I consider to be effective capitalism. These are not my ideas. These were originally settled on by Whole Foods co-founder John Mackey and his friend, academic and co-author, Raj Sisodia. Both of them I have seen speak so beautifully and eloquently about how to do business right. They settled on these four principles. You can read their book, Conscious Capitalism, and learn more about them. But quickly, No. 1 is that you're a purpose-driven organization. Now, this works for-profit and not-for-profit. I think a lot of us recognize that not-for-profits often do this very well. They have a strong sense of purpose. One thing we try to do here at The Motley Fool that our employees appreciate is that we've tried to bring the heart of purpose from the not-for-profit world right into the entrepreneurial platform that is Motley Fool Inc. So, strong sense of purpose. Now, I'm not even saying we're doing it that well here at The Fool, by the way, but we're trying. I hope that you're working for an organization, for-profit or not-for-profit, if you're working, that is also trying, and it is purposeful. So, purpose, purpose-driven, is a key part of conscious capitalism.
The second one is my favorite of the four. It's multi-stakeholder-orientation. I'm going to park that for a sec, because the third and fourth, quickly, are conscious leadership and conscious culture. So, basically, in so many words, there are servant leaders, people who give the better parking spaces to, let's say, the employees who get to the garage first. They don't have their own pre-demarcated best parking spots in the garage, or all the corner offices for all the leaders in the building. Or, if they do, nevertheless, you'd say, "That person is a servant. He or she is here to serve me as a leader at my organization," to serve the organization's purpose. That's servant leadership. And then conscious culture is just having a strong sense of a good corporate culture, which I've talked about a lot on this podcast in the past.
But now let me go back quickly to multi-stakeholder-orientation. The way that capitalism started to veer away, I think, from its better, purer form probably happened around 100 years ago, when CEOs of Fortune 500 companies began saying that the purpose of this corporation is to, quotes, "maximize shareholder value." Milton Friedman, the very famous, and rightly so, academic, the Nobel Prize winner, who ruled the roost for a good portion of the 20th century, Friedman made a big point of saying the purpose of a corporation is to maximize shareholder value. But we at The Motley Fool, both in our own culture for our organization, but also, when we're looking at others and stocks that we might pick, we love to find the corporate cultures that don't just take one stakeholder and try to maximize its value. At the heart of conscious capitalism, you're not trying to maximize the value of your enterprise for any single group, like shareholders. Nope. You're not trying to maximize it for customers, either. You're not trying to maximize it just for your employees. You're certainly not doing it just for the environment or other stakeholders that might be around you in your community. What you're trying to do is you're trying to create a win for all of them. And you start creating non-sustainable, sometimes ugly enterprises if you tip everything in favor of one of those groups and say, "Well, that's all we're trying to do here. We're trying to maximize the value for that stakeholder group." That's why we, and certainly John Mackey and Raja Sisodia, call it multi-stakeholder-orientation. A critical principle, really. It's the foundation for building a sound organization with the great structural integrity underneath it that's going to support its long-term prosperity. If you saw the much-ballyhooed announcement earlier this fall from the Business Roundtable, which is basically a lobbying group for big business, you saw them change their definition of what businesses were for to something very similar, very confirming, of this. So, what started as an edgy thought 20 years ago, Conscious Capitalism, is today nearly mainstream. So, I want to make sure that you get it.
That's point No. 1. It's a little bit of a mouthful, but I want to make sure you understand that I hold this truth to be self-evident, that conscious capitalism is a great way to do business, and many of the best businesses of our time do this every day. Nobody's perfect. And as an investor, I tend to sit up, I hope you do too, in my seat, and take a harder look when I see companies operating in this manner.
Alright, Foolish, self-evident truth No. 2. I'll just call it by the watchword we often use, which is optionality. Principle No. 2 is basically that the best businesses are able to evolve. Why does that matter? Well, just like in biological evolution, changes in external circumstances happen, and your organization needs to both be aware of those things and be adjusting itself to be relevant and/or successful and/or just survive into the next era by evolving. One of the best ways that innovative companies manage to do this is, often they have a second or third trick. We call that, again, optionality. It means you have multiple possible futures.
I think one of the strongest businesses of our time is probably Alphabet. Looking across all of Alphabet's different businesses, starting, of course, with Google, but then looking across the globe, and seeing all the different places that it is doing its Google-y things, that's incredibly strong. The optionality there is enviable. Even up against something as large and successful as Amazon, or maybe Apple, I just believe Alphabet is operating across more fronts and doing more interesting stuff than any other company in the world. But all of those companies have tremendous optionality.
Now, very few organizations are like that. Very few stocks that you and I will pick have that kind of resilience. As long as you understand the concept that, just like in biological evolution, it's going to be really important when external circumstances change -- the Ice Age hits -- it's going to be important for companies to recognize that it's getting cold, let us say, and they need to stop doing this, and then start doing this other thing. And the ones that actually do that, that have the leadership, that have the vision, that have the strength, to actually be able to implement those changes -- and, by the way, permission from the markets and customers and partners to evolve -- those are the companies that you and I want to own.
So, again, points No. 1 and No. 2 are about businesses themselves. Next, we're going to move on to the market.
Foolish self-evident truth No. 3 and Principle No. 3 that I hold to be self-evident -- I hope you do, too, because it's straight data -- is basically, one year out of every three, the stock market drops, on average. Sometimes those happen years in a row. But often, the average bear market, when it hits, is about 12 to 18 months. Significant bear markets, where we would actually use that phrase, as opposed to just a down year, might sometimes bring those down years into a pair, as I mentioned, even maybe three in a row, although very rarely anything like that. In fact, even bad long markets have some up years here and there. The good news is that two years out of every three, the stock market goes up. So, as I've been wont to say in the past, the only market timing I ever do -- I'm somebody who will never predict the stock market, I don't think I'd be good at it, I don't think anybody else is, I don't think it's worth your time or much thought, frankly, because it's never going to be much more than a coin flip. That's why, whenever anybody asks me where the market's headed over the next year, I always say it's headed up. I think it's headed up. I'll be the first to say it might drop one year in three. It does. But by simply saying I think it's headed up, I get it right two-thirds of the time -- which, if you look at your market-timers, you'll see I have an enviable track record with my market predictions. You can, too. Feel free to copy me.
But now, looking at the downside of market drops. Yeah, markets drop. One year in three, it doesn't feel good to be an investor. You have to be ready for that. We haven't had any big down years over the past decade. And yet, by no means am I predicting now that the market will go down. In fact, I think the market's going up in the next 12 months. You already know this. I don't know about you, but I can tell you, at some point in the next few years, the market will drop. You need to be ready for that. You need to understand, that's how it works. It could be nasty. It could be rather mild. It might happen quickly. It might take a while. No matter what, always expect that the market can and will drop. You need to have, as part of your own resilience as an investor -- which is going to be point No. 5, by the way, but we'll get there in a sec -- to be able to recognize that's going to happen and, not be freaked out about it.
Which leads me to point No. 4. Foolish self-evident truth No. 4. Now, this is the lovely phrase, the rowboat syndrome, which I swiped from the late, truly great Jack Bogle, as I've swiped many other lines and stories from the Vanguard founder, the investing master, great friend of The Fool, the rowboat syndrome. I always say, don't do this if you're driving, but raise your hand -- in fact, raise both hands -- if you know what the rowboat syndrome is. I'm guessing a minority of us have both hands up right now. Nobody who's driving is doing this. Here's the way I'll put it, to paraphrase Jack a little bit. As we're paddling down the river of life as investors, which direction should we be looking? Do you want to be in a rowboat? Most of the rest of the world is, I think, because when you paddle a rowboat, you're looking backwards. So many market commentators, and our fellow human beings -- forget about the stock market -- are fixated on their rearview mirrors. They're looking backward as paddle, paddle, paddle, they go forward through time down the river of life. I've always said, toss away your rowboat. Maybe take a canoe. Because when you take a canoe, you're facing forward, and you recognize that all that really matters is what comes next around that bend in the river as you paddle, paddle, paddle forward, looking the right way. As an investor, you're not going to spend too much time looking backward. But ask where things are headed, and getting your money aligned right there.
But I've also said, to close point No. 4, toss away your paddle and kick away that canoe because there's a much more efficient way for you to go down this breezy stream. That's with a sailboat. The beauty of the stock market, as anybody who's studied it knows, is that it tends to rise 8% to 11% or annualized over long periods of time. That is the wind at your back. What an absolutely awesome trip it is that you and I get to be on as investors -- coming up is point No. 5 very shortly -- as investors. What a great trip, to think that we could sit there in the boat and let the wind push us forward, occasionally tack when needed, enjoy the sights, and have fun getting rich together as the winds push us forward. In fact, when I think about the paddlers in their canoes, that feels a lot like trading to me. That feels a lot like day trading. A lot of effort, not nearly as much reward as just sitting there in our ship of Fools, a sailboat. Point No. 4.
Foolish self-evident truth No. 5. The now much-hyped point No. 5, where I talked about how I was going to mention the word investor. It's really not that remarkable a point, but it does introduce what I've called in the past my dead arm initiative. I had occasion to mention that last week's show, as we talked about growth investing and value stocks as well. Anyway, here's the original dead arm initiative. You have permission to give me a dead arm if you're near me at an event or around Fool HQ, if we ever meet, and you ever hear me use this phrase -- please don't dead arm me now, because I'm actually just demonstrating -- "long-term investor," or "long-term investing." You are allowed to give me a dead arm if you ever hear me say that because investing is by its very nature long-term. When you were saying that phrase that I won't use now, it's a tautology. It's a redundant restatement. It even confuses some people, I think, because they think that there are other forms of investing besides the long term. There are not. The opposite of investing is, well, it's actually not investing -- which, by the way, is true of most of the world. Most of the world is not investing today, and for a thousand reasons. A few of the more prominent ones are that people are in debt, or they don't have capital, or they don't have an understanding of how to invest. For that, I think The Motley Fool was, in part, put on this Earth.
I also want to mention, by the way, we're forming The Motley Fool Foundation this year, and hiring a bright, brand new executive director for our not-for-profit Fool Foundation. In fact, we're doing final interviews this week, which is what I came from. I hope our Fool Foundation will make big contributions in the years ahead to getting people who are doing the opposite of investing, which is not investing, to start investing.
Having been shown the linguistic refinement on my pet peeves show last week, specifically by my friend Eric Easton, pointing to both opposites and antitheses, I can now assert that while the opposite of investing is not investing, the antithesis of investing is trading. Trading by its nature is done short-term. There are two players in the market, from my viewpoint. There are investors and traders. You know whom this podcast is for, obviously. I'm not here to denigrate trading. It can be fun for some people. It's a pastime for others. Some people do it very seriously, full-time, they get paid a lot of money as traders on floors, like bond traders, futures traders. But for you and me -- anyway, if you're like me -- you have a lot more interesting ways to spend your time beyond staring at wiggles and waggles on charts or looking at CNBC, or following the market all day, every day. There are just too many more interesting things in life. The good news is, you, fellow Fool, can, with me, be an investor. The Latin root for the word invest is "investire". That means to put on the clothes of, to wear the clothes of in my mental image, if you're a sports fan, I hope you'll get this. I hope you invest, too. You put on the jersey of your hometown team, you go to the stadium, and you cheer them on. You love your team. You should love the companies you're invested in. The consciously capitalistic, I hope, enterprises that you're invested in, doing good things in this world. Purpose-driven, managing for the long term, resilient, maybe with optionality, but you keep that hometown jersey on.
I've been watching a lot of Major League playoff baseball in the last week or so. If you are, too, you see with me just how many people are wearing the shirt. The Washington Nationals, the whole stadium, when baseball comes to Washington -- which is a grand thing, starting about 20 years ago, baseball came back to Washington -- everybody seemingly wearing red. By the way, sadly, it's not true of the football team. I realized this is more of a Washington D.C. comment. Hit that skip forward 30 seconds if you don't really care about D.C. sports. But wow, the Washington Redskins, very few people these days are wearing the home jersey. In fact, you see more visiting teams fans wearing jerseys in Washington D.C. at the football stadium, which is a sad commentary on very bad leadership. Anyway, it's not just true of football or baseball. It's also true of soccer, hockey, the list goes on. People wear the jerseys.
Why don't we do that with our money? Well, good news. Investors do. I hope you do. Rule Breaker Investing certainly does. We put on the jerseys and we keep them on, even if sometimes we have a bad game or even a bad year. Again, your team is not always going to win every year. But if you found a great team, stick with them.
Now you know the Latin root. Now you know what you're doing. Now you know the dead arm challenge, the dead arm initiative. You may dead arm me if you ever hear me say -- well, you know what I'm not going to say.
Now, let's get away from just business and away from the markets for a sec, general investing. Let's go very specifically into our space now, Rule Breaker Investing. Let's think about why it works, what wins in the markets, why it's so much fun, and what we're all about here at Rule Breakers.
Foolish self-evident truth No. 6, here it is. We're Fools. Fools don't like wisdom. I don't like conventional wisdom. Well, I do like conventional wisdom when it works. By the way, sometimes conventional wisdom works. That's why it's become a convention. But many other times, especially as humans, sometimes we like to play tricks in our minds. We think that there's a certain way of thinking about something, or maybe we were taught, or maybe we were taught how to think. Sometimes it's just the stories that we tell ourselves in our heads that start to set up that conventional wisdom that then sometimes becomes conventional because other people start thinking the same thing, too. And what I would think of as sub-optimal thoughts become shared. That's what's so great about Foolishness. That's why it's so much fun to break the rules.
I'm a board gamer. That's probably become clear to anybody who's listened to this podcast any length of time that exceeds maybe two months or so. As a board gamer, I recognize that often the best approach to take to a good strategy board game is to look around, see what others are doing, see how they're all competing, maybe for the same resources, or maybe in this area of the map or the game board, and by not doing what everybody else is doing, often you put yourself in a better position to win the game. The same is true of the game of business, where new businesses pop up, trying things in different ways, breaking the rules of how things are done in their industries, and sometimes succeeding -- well, the best ones do. I also think it's true of investing and investment strategy. So, part of what I love about Rule Breaker Investing is, we're taking a highly contrary approach. None of it is taught in schools, other than maybe Fool School. A lot of is self-learned, and it continues to evolve as an approach and as a strategy. It's very contrary, as I'll be mentioning shortly in another point to come. That's part of the reason I think it works.
Point No. 6 is just about the beauty of fighting against conventional wisdom, something that The Motley Fool has done across many fronts and contexts in our first 26 years on this planet. As a fellow Fool, a fellow Rule Breaker, maybe you've listened to this podcast for a couple of months or a couple of years, maybe you've been a member of Motley Fool Stock Advisor and/or Motley Fool Rule Breakers -- you know that we constantly challenge conventional wisdom. Most of our great stocks seemed outrageous when we first picked them. That's what makes investing even more fun. It sounds maybe a bumper sticker, a T-shirt, or a mug -- Fools have more fun. So, yeah, self-evident truth No. 6: we're Fools. I hope you're one, too.
Foolish self-evident truth No. 7. Lucky seven. This is a brief restatement of the Rule Breakers six traits, the six things that I'm looking for in my favorite stocks. There will be a tendency or temptation for me right now to attempt to illustrate each one of them here. But no, that results in far too long of a podcast. Good news, that material is regularly reviewed over and over from one month to the next here at Rule Breaker Investing. So, let me just briefly restate the six traits in order that I look for when picking stocks. No. 1, I love to find top dogs and first movers in important, emerging industries. If you're not the lead Husky, the view never changes. I love to find the lead Huskies, especially in emerging industries, technologies, and world-changers. No. 2, we're looking for a sustainable, competitive advantage. After all, when you're investing, which is by definition over the long term, you'd better find sustainable competitive advantages. Those can often be gained through, well, how about just sheer business momentum? Think about big players like Amazon.com in its industry, or in a very different industry, Intuitive Surgical. Business momentum. Another thing that can help us, patent protection for some companies, especially some of the medical companies that we invest in. Another form of sustainable competitive advantage? How about visionary leadership? That's a great form. We have Jeff Bezos, you don't, try to beat us. Or, another form of sustainable competitive advantage would be inept competition. When you can find it, that's an amazing advantage, when all of the players in your industry aren't serving customers -- like, for example, the cable industry in recent years. And if you enter with a new model, you can start to win over not just customers, but shareholders, too, if you're, for example, Reed Hastings at Netflix, because you've got some inept competition that you're now streaming against. That's sustainable advantage.
No. 3 is strong past price appreciation. Yes, very contrarily, we're looking for stocks that are doing very well. They may already well have doubled over the last six or 12 months. Most of the world, in my experience, I submit to you, is looking at the list of 52-week lows, asking which one they want to buy. We're looking at 52-week highs. Rule Breaker trait No. 4: good management and smart backing. The value of visionary leadership is always underestimated by the markets. Smart backing, looking for which venture capitalists are funding these enterprises -- some VCs, just like some CEOs, are better than others. Keep an eye on that.
Trait. No. 5: I love to find companies with strong consumer appeal that have a brand name, that know how to market well, speak well, truthfully, authentically, to customers, winningly, often with some humor. Strong consumer appeal of great brands. Finally, No. 6, the ultimate secret sauce of Rule Breaker Investing: we want to hear that our stocks are, I'll put this in quotes, "overvalued" according to the financial media. The more prominent the voice calling our stock overvalued, often the better it will be for us as investors. When you have those first five principles in place -- restating quickly: top dog and first mover; in an important emerging industry with a sustainable advantage; strong past price appreciation; good management and smart backing; strong consumer appeal; and somebody at Barron's or Seeking Alpha or sometimes an anonymous short seller starts saying it's so overvalued, I'm pretty sure I know which way things are going to go over the only term that counts, which is, by definition for investors, the long term.
It doesn't always work. Which transitions me to No. 8. It doesn't always work, but when it does, it works wonderfully. Alright, Foolish self-evident truth. No. 8. This might be my favorite: get ready to lose. That's right. Foolish self-evident truth No. 8 is that you will lose, and you will lose a lot as a Rule Breaker investor. I have a horrific statistic for you. Thanks for listening all the way through to this point in the podcast! I've got a special Easter egg stat for you here right now. I have now picked, in Motley Fool Rule Breakers history, more stocks that have lost 50% than my own age. That's right, I'm 53 now, and this week, I now have 62 stocks in Rule Breakers that have lost 50% or more. I hate that. It's shameful. I don't like to think about it. People follow my advice. I have followed my advice. And a lot of the time -- not all the time; we'll get to that in a sec -- a lot of the time, we lose. And we can lose dramatically. You need to be ready for that if you're a Rule Breaker. Otherwise you're not a Rule Breaker. You need to be willing to lose. Here's why. Even though I have 62 minus 50% plus losers in the 360 stocks that I've picked over the course of 15 years now -- that's two every month for 15 years for Rule Breakers -- 62 minus 50% losers; good news: the 62nd best stock that I've picked is Under Armour. I picked it on July 19th of 2006. It's the 62nd best performer, and it's up 260.1%. Can you hold both those stats in your mind for a second? See that while you're going to eat it a lot, the value of winning far wipes out the cost of losing.
This is such a critical psychological point. It's probably the best way to figure out whether you're truly a Rule Breaker investor and can have and own that mentality. If you don't, maybe you shouldn't. If you shouldn't, I'd be the first to say there are many other styles to adopt. But these are our Rule Breaker points, and psychologists tell us that the pain of loss is three times the joy of gain. Think about that. It hurts to lose far more than it feels good to win. That's just true of human psychology. But look at the math that you and I threw down together. Quick quiz. What's the pain of loss at its maximum for an investor? The answer is losing 100% on a stock market recommendation -- which I've still never done to any of our members in any of our services. Minus 100%. But, what is the joy of gain, by contrast, for investors? The answer is that joy is unlimited. My four horsemen, the four stocks in Motley Fool Stock Advisor that have gained 50X or more of their value for our members. Any single one of those four horsemen itself wipes out pretty much all of the losses of all of my minus 50% losers, and then leaves profit on top of that. In fact, the best stock in Rule Breakers is MercadoLibre. It's up 39X in value. Pretty much takes those 62 minus 50% stocks out altogether. And that's to say nothing of the second-best performer, which is Intuitive Surgical, up 35X in value. So, just recognize the math here. The math of investing directly reverses the psychology that all of us are bound to. The pain of loss may be three times the joy of gain for most contexts in life, but for you and me, for Rule Breaker investors, it's quite the opposite. A lot of people just don't realize that. They live in fear of ever having a single stock that would lose 50% or more of its value.
Alright, and Foolish self-evident truth No. 9. This is the definition of a term that I've taken on as my own screen name. If you ever join us at fool.com, you come to our discussion boards in Rule Breakers or Stock Advisor, and you see somebody posting under the screen name TMF -- that's for The Motley Fool, abbreviated -- tmfspiffypop, I want to make sure everybody who's still listening to me this week knows that that's me. Here's what a spiffy pop is. Let's pretend this you paid $63.37 for a stock that you bought eight years ago. I don't know how many shares you bought, but it was a good buy. Good job, because you bought at $63.37. Let's pretend that tomorrow, that stock goes up $65 in one day. Maybe it's $700 a share these days, and when it goes up $65, let's say after a good earnings report, that's about a 10% gain for you these days, which might sound like a pop. Yeah, I'd say most people say the stock popped if it jumped around 10%. But you and I now know that something even more impressive happened. You just got a spiffy pop because you made more in a single day than the cost basis you paid way back then. You made $65 a share in one day, and you've only paid $63.37 for that stock in the first place. That's not just a pop, ladies, gentlemen, and Fools. That is a spiffy pop!
I invented the concept for investors -- who, by definition, act long-term. We don't get a lot of rah-rah. We're not often invited on CNBC for our short-term market viewpoint. I wanted to have some kind of a concept, a rallying cry, a thing that could be a goal for any new investor that we could do together. I'm really happy to say we've had about 20 spiffy pops across our services in 2019. 2018, even better -- 50 or more spiffy pops across our different Motley Fool services. Prominently Motley Fool Stock Advisor and Motley Fool Rule Breakers. Real results for real people. Without bragging here, I should mention that once a stock does its 13th spiffy pop -- it hits its baker's dozen -- once it happens for a 13th time for, let's say, Netflix, we stop counting. I'm not including, in the stats I just gave you, spiffy pops across Motley Fool services, the dozens and dozens that happened from Netflix or Booking or Amazon.com, which, when they make 1% moves these days, generate spiffy pops that are no longer even interesting. That's why we call that 13th and final spiffy pop for any stock the "forget me pop." We just don't pay attention anymore, it's boring.
Now you know. You stuck with me all the way through this podcast. Now you know what a spiffy pop is, and what I think you should make a laudable goal, that you surely will achieve if you purpose toward the Foolish, self-evident truths that I tried to lay down for you this week. And that's it.
Let's talk about next week. I already mentioned, I'm going to be in Austin, Texas at the Conscious Capitalism CEO Summit. But about a month ago, I had an opportunity to speak to European entrepreneurs and talk about Conscious Capitalism, how to do it well, how to think smarter about business, and how to put that into play for your own business. My talented producer Rick Engdahl has taken that talk -- a lot of it just involves leadership coaching to the people who were listening to me -- and we've turned that into next week's podcast. So, ironically, while I'm at the Conscious Capitalism CEO Summit and can't get in front of the microphone, we will be presenting me talking about Conscious Capitalism specifically aimed at entrepreneurs, small business people, to help you and your business do better.
I guess in my end is my beginning. I led off, Foolish self-evident truth No. 1, Conscious Capitalism. And that's how we're closing the show, and what I'll be featuring for you next week. In the meantime, 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.