How to Invest for Every Scenario

In this episode of Rule Breaker Investing, Motley Fool co-founder David Gardner shares with you his investment philosophy and how you can use it to beat the market. There are 10 and a half chapters that take you through everything from how to invest in a downturn to how today's science leaves us more equipped than ever before to deal with diseases like COVID-19. There's also a quick walk-through of six traits of a Rule Breaker investor and much more.

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 March 10, 2020.

David Gardner: Less than two months ago, Chris Hill joined me for what is looking like an increasingly iconic and unintentionally predictive Rule Breaker Investing podcast. It was called "The Day the Market Crashed." We simulated for you, our dear listener, what it sounds like when the market has dropped dramatically. There's fear, maybe even a little blood in the streets.

Well, this week the market has been doing all of that, and in some cases, some more. The market isn't exactly down 25%, as we had it in that podcast, but my portfolio is down about 20% from its high two weeks ago -- I don't know about yours -- so it seems close.

And in terms of the fear of a global pandemic, something we hadn't worked into our narrative, that's something we must all stare straight in the eye, confront, and, I trust, win, as we surely will. But not before pain and the inevitable ups and downs -- not just of the market but of humanity, all of life.

Let's talk about this week, shall we? Will you join me? Pull up a chair and stay a while, only on this week's Rule Breaker Investing.

Welcome back to Rule Breaker Investing. You know, at the very start of The Motley Fool, before we had done our first print issue, we would only print 12 of them before we went online, back when America Online was the thing, pre-Web even, but we were just, we started by printing newsletters. Our very first one, we thought, "How are we going to make a splash with this one?" We thought, "What if we write a letter to a famous novelist and ask him to make a comment that we could print in the very first issue of The Motley Fool? Wouldn't that be special?" I said to my brother Tom and his friend Eric.

And so, Eric intrepidly wrote the British novelist Julian Barnes, who had recently read a book at that time called A History of the World in 10 1/2 Chapters. And we appealed to him to write something inspirational to speak to our readers, this modest family newsletter, for our first issue. Mr. Barnes, probably to his credit, declined to do so, but he declined to do so by writing us a letter, which we, of course, photographed and printed right in the first issue of The Motley Fool.

Now, why am I telling that story? Well, as I think about where we are right now in the world and our markets, I was thinking for some reason "10 1/2 Chapters," because I have a number of things I want to say this week. And so I thought, why not organize my thoughts, it's thoughts about our world, in 10 1/2 chapters, an allusion to the original copy of The Motley Fool newsletter with Julian Barnes' seal of approval on it. So, welcome.

And before we start our 10 1/2 chapters, just a few things to get out of the way up front. I don't exactly know who runs the @TheMotleyFool account on Twitter. I think my brother Tom has put a lot of effort in there. I know people like Morgan Housel have contributed over the years. We have a social media team today. Somebody on our Motley Fool account on Twitter, Sunday night, posted a brilliant tweet. Here it was: "Health plus investment advice: Wash your hands, then tomorrow, sit on them." That was so apt, so well put. So, credit out to that might be Tom, Morgan on a team. So well put and so true.

Now, I had planned, originally, to do the market cap game show this week. I had mentioned that last week. But given how the world has turned, I thought it might look like whistling Dixie, if we're playing the market cap game show in the face of such market turmoil. All that said, I'm kind of a stiff-upper-lip person. Let's keep on doing the right thing. That's not always the best medical advice out there, but I decided, let's go ahead and do the market cap games show next week. We were going to do dividend investing with Buck Hartzell; we'll be doing that in April instead of this month given the events.

But we're going to be playing our game next week no matter what, and you know what, look out, Aaron Bush and/or anyone else I invite on, because the market caps have changed. Also, if you're hearing this within the first 24 hours or so, when we publish this podcast -- this typically comes out Wednesdays on the East Coast of the United States of America late afternoon -- within 24 hours I will be on YouTube Live. That's Thursday, 3:30 p.m. Eastern, with Chris Hill. So, YouTube Live, that's our YouTube channel, The Motley Fool, and we'll be taking your questions. So if that would be of interest to you, and you're hearing this quickly enough, you download it and listen to it right away, then you know you can join with Chris and me tomorrow.

And finally, one thing I want to get out of the way before we start Chapter 1. I want to say something about the hypochondriacs out there, the warriors. I know some of them. And while I'm generally preternaturally opposite that, I'm kind of the optimist you can't stamp down, I do want to say, the warriors can have their day, and they should. I don't root for those who obsessively focus on worries and health, but they're going to have their day in the sun from time to time, and God bless them. Everyone deserves some sun.

You know, one of the best CEOs of our time, the dearly departed Andy Grove, former CEO of Intel, wrote a famous book, I bet many of you've read -- it's called Only the Paranoid Survive. That's not, again, the mental space that I come from, as I approach work and life, but some really, really successful people have. And in highly unusual circumstances like this, as we find ourselves globally in March of 2020, this might be one where being paranoid about your health is a darn good idea. Wash your hands, then tomorrow, and then sit on them.

All right, Chapter 1. Chapter 1 is entitled "Nothing." As in doing nothing. People are saying to me, and I understand why they would, "Hey, Dave, what are you doing with your money?" And I say, "Nothing." They say, "Do you have any money saved up on the side?" You know, "Is it time to deploy that cash that you've been holding back?" I'm saying, "What cash?" "No, I remain fully invested." That's pretty much what I've always done as an investor and what I've talked about for years now in this podcast. And of course, for decades on our website before that.

I certainly respect people who like to keep a cash cushion, so-called. The thinking is that they can dive in at the right moment and invest that and do even better, but in my experience, given that the market typically rises 9% to 10% a year and we don't really know when it's going to drop or come back, if you look at the math and most studies, you'll see that staying near or fully invested is the best way to approach maximizing your returns over the long term as an investor, which is the only term, the only game that we are playing. So what am I doing? Chapter 1, I'm doing nothing. What about you?

Now, I hope that doesn't sound irresponsible. As humans, we're fairly conditioned, and most of the time this works. We're fairly conditioned to think more effort, more reward. Ironically, though, I think part of the approach to investing that's worked so well for us here at The Motley Fool is that not working so hard does better.

On MarketFoolery on Monday, a really wonderful effort by Jason Moser and Chris Hill, they took a mailbag item from somebody who said, "Hey, guys, I've held my cash back, so should I plunge in now?" And the way that I hear that question is guesswork -- has the market fallen far enough or will it fall farther? I really don't think there's any way to authoritatively answer that question. I don't think Chris and Jason really tried to do that, but if I had been on the other side of that question, I would have said, if you have a cash lump, either one you saved or maybe you just got a lump sum from somebody else, one of the best ways to do it is to deploy it systematically.

And so, even though I'm saying, nothing, earlier, Chapter 1, nothing, the truth is that I'm saving every two weeks -- I hope you are too if you're a wage earner -- and I'm investing. And so it's a constant mechanical process that involves absolutely no guesswork. So I do congratulate anybody sitting on a cash cushion, because this 20%-off sale in March has been a much better deal than people were getting in January when we recorded "The Day the Market Crashed." So, congratulations, but I nevertheless think that you should be deploying that money on a regular basis. And if you have a lump, buy in thirds, divide it up into pieces, and systematically put that money into the market. I bet you'll be happy five, 10-plus years from now, which is after all why we're doing what we're doing, right?

And as we close down Chapter 1, let me just repeat something I said on the podcast just a couple of weeks ago. In fact, it was our February mailbag, and I felt a compulsion at the time to just try to speak to coronavirus, since it was becoming a bigger story and the markets were starting to rock. I'm just literally going to reread what I said from two weeks ago, because, I think, I hope, it still feels just as imperative and just as relevant.

And here it was: "From an investment standpoint, I just want to say, these events don't change my approach. I personally have made a lifetime commitment to our stock market as an investor. So I really am, I'm playing the long game, and I hope you are too. So how the stock market does this week, this quarter, this year, is not going to change how I do, I hope how we do, what we do. Certainly, if you're right near retirement or you need the money that you're investing to live on, you should already be making, have been making plans to transition into some more income investing, these other ways to secure your financial future if you're near the end of your tether. But for those of us in the middle of our tether or earlier on in life, you shouldn't allow even scary things, like human tragedies, to shake you or your money out of the market. You're going to do far better if you patiently keep adding money. The biggest question isn't should I sell or should I get out before a downdraft in the market because of coronavirus? The biggest question most of us should be asking is, am I saving enough on my next salary check, and where am I going to put that money now maybe at a discount?

You should be thinking that every two weeks. And that's the approach we've always promoted here at The Motley Fool. That's what we live by. We're all in different circumstances. We're in different countries around the world with different risk tolerances at different points in our lives. So your mileage may vary, and if it does, make sure it's appropriate to you and who you are.

But for the most part, our Foolish way of investing in what we do here at Rule Breaker Investing, really, I try not to allow even bigger stories that dominate the headlines for a month or a year to change where my money is invested or how I'm doing it, and I hope that's true of you too.

On a side note, I was listening back to the day the market crashed from a couple of months ago, and one thing we had right, we had Stitch Fix down 30% that day, and as I record here, on Tuesday afternoon, March 10, even though the stock market is incredibly volatile, back up 3% at the moment, Stitch Fix down about 30% today.

All right, Chapter 2. I felt like Chapter 1 may have sounded a little preachy; I hope it didn't come across too strong, but I feel that strongly, so put it out there. But Chapter 2 is that "The Tide Heads Out Sometimes." And I think the tide is headed out.

And when the tide heads out, we see who is prepared for it and who is not. Who wasn't wearing a bathing suit? I remember in the financial -- do you remember in 2008-2009, the Great Recession? -- the number of Ponzi schemes that were being exposed, people who were money managers, who were supposedly making a lot of money by taking your money in and giving you great returns, 2005, '06, '07, all of a sudden remember Marcus Schrenker. I certainly don't remember the name, but I looked this one up. Marcus Schrenker is a former American financial advisor.

In 2009, he attempted to fake his own death due to personal financial and legal troubles. He was a pilot. He got up in a plane. Do you remember the story? He made a distress call near Birmingham, Alabama, telling air traffic controllers his windshield had imploded and he was bleeding profusely. He put the plane on autopilot, he parachuted out, he parachuted to safety. That was an over-the-top effort, real-life effort by somebody to avoid the financial consequences that he was causing in other people's lives. It took 2008-2009 to trigger that. It took losses to expose who wasn't prepared, who was fragile, who was antifragile. Marcus Schrenker is an incredibly iconic story for us, as I think about this, but of course there are many more sympathetic ones.

You know, some businesses do need to exist on debt, in part, in order to run their operations smoothly and effectively. And when we have financial catastrophes, those businesses and the people who are part of them can get really hurt. Slightly less sympathetic to me are people who are on margin, people who are taking crazy risks with their money. I hope that's not you. Certainly, I preach about that week-in and week-out over five years now, so I trust most of my fellow Fools are not in such a situation. But think about the people who were taking silly risks. The businesses that were borrowing too much money. There's a natural process by which, when the tide goes out, these things get exposed and get knocked down. They either have to reform or go away. And thus, the world moves forward.

So even though I'm the guy who every year says, "I think the market is going up this year." You remember that's my market prediction I make each year, and boy, have I been right a lot of the last several years. Maybe I'll get it wrong this year. But I'm fully prepared to get it wrong financially and mentally; I hope that you are too. I hope that part of being a Rule Breaker has strengthened you against the downside, whether it's podcasts like "The Day the Market Crashed" which gets you to psychologically process that ahead of time or just the good habits that I hope you built through The Motley Fool, either through this podcast over the last five years or how about our business side over the last 25-plus years.

I know a lot of you are more than equal to the test when the tide is headed out. And in fact, those who are, are even stronger as a consequence and emerge more successfully as inevitably the tide comes back.

Chapter No. 3. Chapter No. 3 is entitled "You Don't Need to Hear From Me, Do You?" Which I think I kind of spoke to, but sometimes I've whined in the past in this podcast that I don't feel any great personal urgency to come in and reassure everyone to be patient and hold or buy more during downtimes. In fact, I remember having to do that with my brother Tom. We'd go on to network television or CNBC, on a fairly regular basis the first 10 years of our business. We would be the guys who were called in when everything is going badly. They'd have us on ABC Nightly News -- "Guys, the market is down." And I felt like the most important messages that we're being asked to give was whenever the market was dropping, but that's not a natural state. Natural state is the market rising. People don't want to have us on Nightline to talk about when the market is rising. They wanted us to speak to the pain, and I understand that and I'm trying to do that myself to up to a point.

But Chapter 3 is entitled "You Don't Need to Hear From Me, Do You?" Because I don't take a lot of enjoyment in that kind of reassurance. It feels like Pablum to me sometimes. "Oh, it's OK. Just keep buying. It'll all come back." I mean, I do do that myself, but it doesn't sound that satisfying to me either to say or to hear it. It's kind of stereotypical to me, maybe a cliche, but maybe that's because I'm a Fool.

But while you don't need to hear from me, I hope, do you, I am going to sound four of my favorite lines to you right now. Just resound them to many of you. The first is, stocks always go down faster than they go up, but they always go up more than they go down. I don't want that line on my gravestone because there are many more interesting things to talk about, but I think that's a truism, and I've always loved that line ever since I first conceived of it.

I was thinking about F. Scott Fitzgerald, that whole thing about holding two opposed thoughts in the mind at once and that's a sign of brilliance. I want to make you brilliant; I want to make sure you understand. And you're seeing it right now -- once again, stocks always go down faster than they go up, but they always go up more than they go down.

Line No. 2. In direct contrast to the threadbare disclaimers, you should know that past performance may very well be our single best indicator of future results. I think we've all seen those financial ads -- often they have to end "Past performance is no guarantee of future results." I've often looked at that, of course, that's the conventional wisdom, so as fellow Fools I look at that and I wanted to take a shot at it, because it's such horrible advice. Indeed, as I just said, probably our single best indicator of future results is the past. "#WinnersWin."

So, let's briefly think about the past when it comes to the stock market. Take a look at the line of the stock market's graph performance over the last 100, 50, 30 years, take your favorite long-term slice, whatever your favorite era is you want to look at. You're going to see it starts in the lower left and goes to the upper right -- past performance.

Now, in any meaningful era, 30, 50, 100 years, if you zoom in to a two- or three-year period, you might see, since you're zoomed in, what looks like a scary drop. And it didn't feel great at the time and a lot of us have lived through multiple ones. And I know a lot of you are older than I am. So you've seen more than I have. But I've certainly seen the 1987 market crash, I've seen the 2001 market crash, 2008-2009 market crash. And if this ends up being a really bad market year, we can notch our belt one more and have lived through it together.

But the whole point, my fellow Fools, is let's zoom out again and take a look at what happens for the people who are playing the only game that counts, the long game, past performance, probably the single best indicator of future results. Please don't forget that.

No. 3. is "Optimism Is Not Just a State of Mind; It's a Creative Force." Henry Ford famously said, "Whether you think you can or whether you think you cannot, you're right." So, yeah, I'm saying to you, my listener, "I think you can," and I think, you should think so too. So, this one isn't so much about the market, it's about the state of the world right now.

Let's divide the world up into two types of people. We do this all the time. There are the people who believe we can and the people who believe we cannot. And I'm pretty sure I know which group is going to take us successfully into the future, and it's the former. And I know I'm speaking to a lot of you today, because most people, in my experience, who love investing, who believe in the stock market, who believe in our society, our culture, in our fellow humans, despite all of our flaws, most of you are optimists. And whether you think you can or whether you think you cannot, you're right.

And finally, No. 4, the two keys to my investment approach, "Stock-by-Stock, In Before the Vast Majority of Others and Out After the Vast Majority of Others." We were into Amazon at $3.21; we still hold the stock today. That means we were in way before most of humanity. You could have been in 15 years later and still been early on Amazon. We watched the stock go from $3 up to $95 in 2000, down to $7 by 2002, kept holding. The market is so volatile this week, I'm not even going to attempt to quote Amazon stock, but when you do, think about that $3.21 cost basis that we gave to all our members, all the people who are following The Motley Fool, back in 1997. In before the vast majority of others, but then, of course, the secret, the latter half of that line, out after the vast majority of others. So, many people have traded in and out of Amazon, Apple, Netflix, MercadoLibre, Booking, Match Group were the stocks we've held for 20 years or five years. Most people have traded in and out of them once at least already. I hope it's not true of you and I. The way to maximize your returns -- in before the vast majority of others and out after the vast majority of others. Which, of course, given the times where we are, where many people are thinking about selling or are in fact selling, I hope you'll remember that winning formula for winning the real game that counts the long-term game of investing.

All right, Chapter 4. Chapter 4 is entitled "You Don't Need to Hear From Me, Right, But You Will Hear From Me." I just want to point out a couple of the basics of the life that I and others, here at The Motley Fool, lead. Every single month, I pick a new stock for Motley Fool Stock Advisor; every single month I pick two stocks for Motley Fool Rule Breakers. We have more than a dozen services these days, where lots of other Fools, including my brother Tom and so many talented stock-pickers, do the same thing. We're always there for you.

And what you will notice that I don't do is I don't start saying I'm not going to put any new stock in for this quarter or this month, I'm scared, or I'm going to put three in at once because I'm particularly optimistic or elated. Nope. It's mechanical. It's two stocks in Stock Advisor: one from Tom, one from me, for our members every month; two stocks for Rule Breakers members every month. We've bought them in good times and in bad. And we only really know looking backward, when it was really good or when it was really bad.

Some of our best stock picks, some of my personal best picks were made feeling the pain, feeling like, "But I'm about to email this off to all of our members, and they're going to buy it, and it's going to probably drop another 20%." And yet five, 10, 15 years later, we look back and say, "Boy, am I glad for the discipline that that service instilled on me, the discipline forcing me to pick a stock when I didn't want to."

So, Chapter 4, "You Don't Need to Hear From Me, Right, But You Will Hear From Me." And you hear from me in this podcast every single week. And my talented producer, Rick Engdahl, and I try to bring you, every 10 weeks or so, a new Five-Stock Sampler. I was looking over my list of Five-Stock Samplers. We've done 23 in this series. I was checking to see how our Five-Stock Samplers are doing here. It's really such a remarkable, untold story in my opinion, but if you've been with me, you've seen we've done this 23 times now, every 10 weeks, 23 times, pick five stocks, 115 total stock picks on the podcast. Eighteen of those Five-Stock Samplers are beating the market. Only five are losing to the market. A 78% accuracy rate. The average performance of the stock in those samplers is 34.5%; the market is 11.8%. We're up 22% per pick across 115 picks. That's all for free on this podcast every 10 weeks. So you don't need to hear from me, but you are and you will.

Chapter 5, "And You'll Hear From Me Beyond Just Stock Picks." Because while I just focus on individual selections and what our services do, I want to make sure I restate the six traits that make you a Rule Breaker investor. This is about you now; this is not about the next stock that you're about to buy.

Rule No. 1: Let your winners run high. No. 2: Add up; don't double down.

I want to speak to those two briefly. We live in a time right now where most stocks are down, some of them 20% to 50% just in the last few weeks. So what is a winner, and what does it mean to let your winners run high or add up? Well, first of all, I'll remind you that your winners, even if they've had a bad few weeks, are probably still pretty great. Take a look over the last one, three, five years of returns and ask yourself, which are the companies that are really thriving, which companies has the stock market validated as big-time performers, the success of their business as translated into their stock price?

That's a pretty good indicator for you to know what are the winners and know that some of them are down. In fact, most stocks are down right now. But that doesn't mean they're not still winners, and yet at the same time, if you have extra dollars, I would consider buying a new stock or two. After all, most of us have successful winners where our portfolio can end up concentrated in those winners. So instead, why not have some fun, add a new company name to your portfolio, add a few new stocks, probably at a much cheaper price than you were going to get a few weeks ago. So, instead of doubling down on an existing holding or re-adding to something you already may have a lot of, maybe this is an opportunity to spread a few new seeds and get to know the world even better, take some risks and have some fun.

Again, it may not feel fun this week, but let's look back in a few years, shall we?

OK, traits No. 3 and No. 4, of you, the Rule Breaker Investor. No. 3, invest for at least three years, and No. 4, remember the four tenets of conscious capitalism. Speaking to those briefly. Yeah, the word "Invest," I've talked about it a lot. I love etymologies, it means to wear the clothes off, to put on the vestments, like, "priestly vestment" is the same root, invest. It's like wearing that home team jersey, which is what I do when I go to a sports game. I bet you do too. You cheer on your home team. You're not going to change your jersey, throw it away, if your team loses that day or has a bad quarter, bad week on the market, are you? Or a bad year? Nope. You're going to stay invested for at least three years.

Now, each of my six Rule Breaker Investor traits here is a mnemonic. You'll remember, the number is implicit in each one. Rule No. 1: Let your winners run high. No. 2: Add up; don't double -- that's the two word -- down. No. 3: Invest for at least three years. And No. 4: Remember the four tenets of conscious capitalism.

I'm not going to go over them here. Google "conscious capitalism" if you're not already familiar with this idea that your money should be invested in the things that you think will thrive and make our world better. And as those companies do good, you will do well.

Finally, traits No. 5 and No. 6. Max 5% allocation -- that's the five in trait No. 5. That means, for any new position that you would take, never put more than 1/20 of your money. And keep your money invested in a wonderful diverse set of companies; don't overload on any one at the start. Now, if a company does really well for you and becomes more than 5% for you, more than 10% even, sometimes larger numbers, depending on who you are and how comfortable you are with that, that's when you can allow your allocations to go, but that initial allocation, max 5%.

Finally, No. 6, aim for 60% accuracy -- there's the six number. And by that, I'm reminding you, when you buy new stock, when you enter a new position, have confidence that it's going to beat the market, don't be silly or be too speculative, bring more than a coin flip's confidence that this investment is going to beat the market. I'm not just saying go up; I hope every investment goes up. What we're about at Rule Breaker Investing and The Motley Fool is we're about beating the market, beating the index fund. And so, aim for 60% accuracy.

Chapter 6: "Be Selective With Your Media." How much time do I spend watching financial TV most of the year? Zero. How much time did I spend watching financial TV this week? Zero. I prefer print, personally. I don't know about you. We all have our different tastes, but I'll tell you, I think Bloomberg does an awfully good job covering things. I appreciate their free services.

In fact, as the week started, I got an email from Bloomberg saying, "Hey, would you like to subscribe to our coronavirus daily, our prognosis section that we have a daily little newsletter?" And I said, "Sure." It's free and I could sign up for it. Those are the kinds of media that I select into. I think I've talked about The Economist in the past. Now, I appreciate their coverage; their Espresso app is good for waking up in the morning and knowing what's happening. But I wouldn't spend a lot of time preoccupied with the news. I mean, I say that most of the time anyway, as generally a non-traditional news consumer, but I especially feel that's true if you're thinking about your investment dollars.

The more you watch some crazy man talk about the market moving up and down and what you should be doing, the more likely it is that you, yourself may go crazy.

Chapter 7 is entitled "Leadership." I'm probably verging on another cliche when I say, "In hard and troubled times, leadership emerges; leadership is tested." But I have a little bit of a different approach to thinking about this than I think most people around me. Maybe you're sympathetic to me, you think the same way I do maybe. If not, you'll hear a different viewpoint from me here.

So, one of my favorite bumper stickers I'm seeing these days, I bet you've seen it too. "Any Functioning Adult 2020." Love that bumper sticker, because in a lot of ways it describes [laughs] my own thoughts, at least here in the United States of America, about political leadership. And this isn't about either party. In fact, for a variety of different reasons, I would say, both diverse reasons and manifold reasons, I wouldn't actually put any of the three 2020 candidates in the CEO seat of any important company whose stock I hold. Now, I'm quite sure some of my listeners love one of these three, and don't like another or maybe love two of them; I'm not sure. And while I certainly respect the importance of leadership. I can't look at our present-day leadership or our coming potential leadership in the public sector, in the government, and say that I'm impressed by the achievements of any of those people. [laughs] And I've met at least one of them.

Sometimes I wonder, "Am I watching professional wrestling here with these debates, or am I watching the future of our country?" I don't want this to sound like a rant. I sure hope it doesn't, because what I want you to know is there is tremendous leadership across the United States of America and the world. Most of the best leaders that I know work in business where they are forced, especially as conscious capitalists, to think through pleasing all of their stakeholders, not pitting one set of stakeholders against another or trying to create win/lose situations. Most of the best businesses that you and I are invested in have deep experience in caring and working for the success of all of their stakeholders, certainly their customers, that's why businesses exist, certainly their employees, great companies to work for, their partners and suppliers, the best ones admire the businesses that they supply, and certainly, shareholders, you and me, can look at the best stocks and be pleased by the outcomes they gave us.

So, I hope if you're frustrated with political leadership in our country, you won't obsess about that or forget that the more dysfunctional political leadership becomes, the more influence it loses, the more likelihood that the private sector and the leadership from the businesses that are delivering us the products and services and solutions every day that we need to survive in this world that they will thrive and that they will lift us higher. So there's a thought about leadership.

Chapter 8, "Science." You know, I wasn't an effective science student. I always tried to duck. I never even took physics. Somehow, I got out of it. A lot of us do biology here in the U.S. in ninth grade and I took chemistry in tenth. I was like, "Can I possibly opt out of physics?" I'm not good at science, but I still have [laughs] an admiration for it.

So, Chapter 8, I just wanted to say a few things about science and hope. For my book club, months ago I was reading a book called Influenza by Dr. Jeremy Brown, who works as a virologist at NIH. And one of the things Jeremy talks about is the state of the world in 1918, when the so-called Spanish Flu, the big epidemic -- I think it started in Kansas -- it came through the military, spread around the world. World War I didn't help. Fifty million or so humans died. It was a century ago, and it was still practiced at that day -- venesection. Do you know what venesection is? I had to look to remind myself what the term meant. It's the medical term for bloodletting. And that was a common practice a century ago, when trying to figure out how to heal people.

It turns out it didn't help, didn't help the epidemic at all. Fortunately, a century later we know venesection is hopelessly backward in its thinking. It wasn't until 1939, there was a watershed moment in the history of virology, Dr. Brown writes in his book Influenza, the newly invented electron microscope took a picture of a virus. In 1939 we first finally saw the enemy.

The first coronavirus was not found until the 1960s. The name, by the way, since I love language and etymology, coronavirus -- the corona, of course, means crown, coming from Latin. And it's so called, because the visual, if you're looking at a coronavirus, it has, kind of, a fringy crown around it, in contrast to some other viruses, hence the name coronavirus. So it's only been in the last 50 years that these have even emerged in a way that we can understand them today.

Here's a shocking thing I often forget but I want to say here. Seven years before that, 1953, Crick and Watson discovered DNA. We haven't even known about DNA in the last 75 years. A lot of my listeners were born into a world where we didn't even know what DNA was yet.

So here's the good news. What incredible progress we have made over the last century at combating all kinds of bad stuff and creating new solutions for our bodies. And certainly, we're invested in so many healthcare companies, Repligen and Intuitive Surgical and Shockwave Medical and Seattle Genetics, and the list goes on of companies aligned technologies that are doing something better for our bodies today.

So, pinch yourself -- not only are you living at the best time in human history to be helped by others, to be helped by medical technology, but you as a fellow Rule Breaker, you and I can be invested together in these companies and prosper as they heal the world. So I just want to remind us of the power of science. And while we can't get a vaccine this March to fix the coronavirus, it's being worked on, and you can only imagine the amount of innovation and collaboration by the smartest minds to ride in on a white horse at some point and start fixing things. So I have a profound optimism in where science is going to continue to take us.

And while the human tragedy, we talked about it a few weeks ago, a few thousand people had already died in China back then. It's a lot more now. The human tragedy is very real. And I hope for you it's not personal; I hope it won't get personal. But we're all connected. And so, talking out both sides of my mouth, we have to acknowledge how really hard 2020 is going to be, and at the same time we have to remember that whether you think you can or whether you think you cannot, you're right.

And I really believe our scientists and our doctors and the whole systems that are around them, even though they're in danger of being overwhelmed at different places in the world, I believe they're more resilient than we think. And I hope that proves out here in the weeks and months ahead.

All right, Chapter 9. This one came through Twitter, @ScottJack. Scott, I really appreciate this point. So, earlier this week, when the market went down 8% or so in a single day, we sent out a message to all of our members. It was well written. It was written by Seth Jayson, I believe, a longtime analyst here at The Motley Fool, a longtime Fool. "It was great, but one minor change." And I thought this was really good. Scott said, "Instead of 'don't panic,' use 'stay calm.'"

So, Seth or our headline had used "don't panic," which always makes me think of Hitchhiker's Guide to the Galaxy. Of course, perhaps you, too. But, no, Scott says, "Instead of 'don't panic,' use 'stay calm.'" Scott says, "The brain only sees the word 'panic,' not the word 'don't.' It's something I learned from a smart marketer." @ScottJack goes on, "This is similar from Mother Teresa. 'I was once asked, why I don't participate in anti-war demonstrations. I said that I will never do that, but as soon as you have a pro-peace rally. I'll be there.'" Thank you, @ScottJack, for that reflection.

Stay calm. I'm not going to say don't panic. Stay calm. It reminds me of Roy Spence, one of my favorite people in business, did a wonderful interview with Roy on this podcast a couple of years ago. You can Google it and listen to it again. One of Roy's great lines is "I'm a for person." Lot of people are against this, against that; they define themselves by what they are not or what they're fighting. Roy says, "I'm a for person." Well, I am too. Stay calm.

Chapter 10. I'm just going to give you my favorite word of the week. It's a quick chapter and I've got a half-chapter after this one. My favorite word of the week goes back to the Romans. I was thinking about, the other day, "vale," V-A-L-E. Do you know this one? This was a common greeting used in the Roman Empire. Vale. What does it mean? It means, be strong, be well. So, I wish for you, I wish for your family, for your business, for our world at large, vale. And I'm going to be rocking that greeting throughout March. Friends and family, vale!

And finally, now, chapter 10 1/2. Chapter 10 1/2, Julian Barnes, thank you.

I've made a point in the past of saying I don't use bad language. I'm from the school of thought that it pollutes the world. It pollutes oratory. It debases not just the air about us, but the people who use it. A friend once suggested to me that people who use bad language were basically telling others how cool they think they are, which, when I listened for it in the future, was often right.

I've taken pride that on iTunes on my podcast page, well, at least the one I used before the OS change, I had a "clean lyrics" icon. Well, I never had intended to be lyrical, per se. At least Apple thought I was clean and your kids could listen in as well and through 50-plus mailbags, I've heard from you that you do feel comfortable letting your kids listen to Rule Breaker Investing, which is so great. And in part because we have clean lyrics.

So, I'm simply going to warn you, as we conclude, that I'm about to use what I believe is my only bad language in Rule Breaker Investing history, and I hope not to do it again. It'll just be there in my final four words. Why am I doing it? Because when you use a potentially powerful tool -- here, bad language -- infrequently, incredibly sparingly, you give it its true force when conveyed properly with the right timing. And so, feel free to cut off the podcast right about now before I close with my final four words, kind of ending these 10 1/2 chapters in the same way I began them.

My advice to you. Here we go. Wash your damn hands!