"Rule Breaker Investing" Pet Peeves, Vol. 8

Motley Fool co-founder David Gardner has some griping to do.

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This video was recorded on Nov. 8, 2023.

David Gardner: When you hear someone starting to talk about the right and the left in political terms, the right, so called, and the left. Have you ever stopped to ask them if they might in brief, describe what they mean by the right or the left, and compare that to your own understanding of these to see if you're even speaking the same language, have you? Because I'm betting that you're probably not speaking the same language, and is right and left even the correct frame? Different question for you. Have you ever joined a class action investor lawsuit? Really? Why? Or why not? What came of it? Did you feel proud and well represented by your noble legal team? Does it sound like I'm asking some leading, one might almost say snarky questions? This week, well yes. Yes, I am. That's because once or twice a year on Rule Breaker Investing, I do complain. It's a Pet Peeves episode and this is the first and only one for this year of 2023. Time to show the world how wrong it is. Time to passively aggressively wonder aloud whether some people can't maybe improve their own performance by not triggering our, yours and well mine this week, our pet peeves. Yeah, it's time. The eighth installment in my storied most self indulgence series, Pet Peeves, volume 8. Only on this week's Rule Breaker Investing.

Welcome back to Rule Breaker Investing. Yes, it's one of my favorites, and yeah, most self indulgent podcasts I get to do every year. The good news is I only do this about once a year. In fact, the last time I did a Pet Peeves Podcast was more than a year ago. I've missed it, September 2022. I don't know what it is about the fall. Do I come back from Labor Day each year nursing hurts? Well, it's been 14 months and so I've had substantial time to let things happen, lots of things. Some of those things that happen bothered me sometimes for just a silly reason certainly. But then if it happens again, I probably whip out my iPhone at that point and quickly jot it down. Make a note to myself. Then if and when it happens again, maybe again and again, well, at that point I build out what was once a quick note into a slightly longer format to articulate what's going wrong there. Well, over 14 months in my digital organizational system, my second brain, it fills up with pet peeves. I start to build a list of them, and then suddenly, here we are. It's November 2023, and I've stored up a list, in this case, of seven pet peeves that I've personally seen and experienced over the previous 14 months. I'm ready because it's been repressed, I bottled it up. I've saved it, I've just had to sit here, a deal silently knowing one day I'll be able to talk about it and that day is this day. There's probably some extra energy that I bring to this podcast each time I do it once a year because I'm still really feeling like it just happened each time I do one of these episodes, and this is the eighth. I point out that every single past episode is non-duplicative. That's right. I don't go back to the well or keep beating a dead horse over and over again.

Somehow I managed to fill up episode after episode with new unique pet peeves. Which reminds me to mention one of my original pet peeves back from volume 1 are people who have long lists of their own pet peeves. Well, it turns out I can live my way through life and find enough to complain about new each time at least once a year, so let's get started. Pet peeve number 1, doing food at restaurants instead of politely ordering. Let me explain. In fact this particular pet peeve keys to another way back in volume 2, it was pet peeve number 6 back in November 2017. Does anyone remember this? Doing cities while traveling. Now, maybe I'm the only one who feels this way and if so, please let me know on this month's Rule Breaker Investing mail bag. A reminder, you can email us your reactions to this and all of our podcasts, our email address is [email protected]. Make me laugh this month, and I'll for sure feature you on our month end mailbag. Maybe I'm the only one who feels this way, but I sure hope not. I don't really like it when I'm talking to people and they're talking about the vacation that they went on and they went from, let's say Paris to Amsterdam, to London. Or maybe there's a skier and they're talking about last year when they skied Sugarloaf, Sugarbush, Steamboat, Sugar Mountain. But they say it like this and this is what gets me, and I realize this is very small. It's a small part of me that's about to say this.

They say, I did this. How is Europe? Yeah, well, we did Paris, we did Amsterdam, we did London, we did Sugar Mountain, we did Sugarloaf, Sugarbush. Doing things, doing places, is that what we do? We do London and then we do Paris? I mean, we definitely visit. I hope we enjoy, maybe we learn, study, eat, fraternize, but do, and just to do places over the course of your life or your winter break. I think we're not just out there to do places and do people. I think we're there to study, learn, enjoy, experience, love, hate, not do. Which leads me back to doing food at restaurants this episode's, pet peeve. Maybe you know where I'm headed. Maybe you know such people, maybe dear listener, you are such a person and if you are, please don't take this too personally. But in the same way that some people do places as they bounce around the world in this life, some people do food at restaurants. Have you noticed? Welcome to this restaurant, I'm Michael, I'm here to take your order, but first, do you have any questions? Your table mate will look over the menu, he's already looked over the wine list and no, no questions, he's ready. You are too. You're about to open your mouth when he launches an, OK, great, so I'll do the pot stickers for openers, and then I was thinking of doing the catch of the day, but second thoughts, let me just do the salmon. Listen, we'll do some garlic bread if you could bring that out when. Well, we'll do the sparkling water with the bread and then we'll do the Pinot. Doing food at restaurants. Now, I'm no Miss Manners far from it, but when I'm around people doing food at restaurants, I want them to be a little more accommodating to work with us all, a little bit, server included. Maybe the concept of ordering has gone awry.

If ordering is taken seriously enough, then I guess you can order around in whatever ways you please, do whatever you please. But I prefer a gentler form of ordering that runs something like this, may I please have the pot stickers for my appetizer? Then the salmon maybe with a crust of garlic bread, sparkling water too. Do you have the Pinot Noir in the 2018 vintage listed here? By the way, that's another pet peeve of mine for another time perhaps. But restaurants that put up one year's vintage on their wine list, but then bring you a different year bottle without explicitly asking or acknowledging. But anyway, two ways to order. May I please? Instead of we'll do. Now, I realize this is small, it may seem petty, but this is how we roll once a year on this podcast. Some people say the devil is in the details, I'm in the camp that says God is in the details, and so doing cities and doing food. Well, wait. Is it the same people, are the people doing cities also the same ones doing food? We did New Zealand, did the Lord of the Rings tour there. How could you not did down under, if you're going to go that far, we did Singapore too. Didn't do Tokyo too much, but we did this amazing Japanese restaurant in Singapore where we did a sushi that was to die for. Did the so up front, but did a ski that'll knock your socks anyway, do the world who do everything around them. This is surely possible that the same people who do cities do food, a case for further study, for enterprising fools like you. If you arrive at any discoveries or conclusions, please let me know. Pet peeve Number 1, People who do the world. Pet peeve Number 2, ready for it.

The rich get richer. This one's pretty simple. It's used all the time, that phrase in a cynical way. No one, to my knowledge or memory has ever said this phrase in any context other than finding fault, rolling your eyes. The world is so bad, isn't it? The rich get richer. First of all, of course they do. That's how things work. Oprah was rich 20 years ago. She's a lot richer today. Tom Brady was rich 20 years ago. He's a lot richer today. The United States was rich 20 years ago. It's a lot richer today. Dear fellow fool. If the rich are not getting richer than something likely very wrong or very bad is happening, I bet you're rich. You may not feel like you are, You may not act like you are good on you. But if we're comparing your financial situation as a dear listener of the Rule Breaker Investing podcast against the rest of your fellow humans, I'm guessing you are likely rich. I realize I'm only talking in financial terms right now. While true richness for me is about so much more, you're probably steeped in riches like family relations, or free public utilities, or new enabling technologies that so called rich people of a century or two ago could not even have dreamed of. You're rich. I bet you're hoping to get richer. You're not greedy, are you? The more you make, the more you give away. I bet. The same is true of Oprah and of the United States.

If you are rich and you have your money invested, the stock market tends to rise from one year to the next, and almost inexorably over any meaningful time period. The rich are going to get richer. I bet you're hoping and expecting the same. I recognize that for some, the phrase, the rich get richer, tails off. The speaker intends it to tail off. What's implied after it is the poor get poorer. If that's the intent, I disagree with that as well. The phrase, by the way, is attributed to the English poet Shelley. At least that's how my friend, Wikipedia has it. But certainly with a nod to the Bible where the book of Matthew in the parable of the Talents, remember this one, where servants are given money and one invests and makes money and another puts his under the pillow and gets chastised for it. Which by the way, I think is a very good parable with the paraphrased line, whoever has to him more will be given to abundance and to him who has not, even the little he has shall be taken away. Just to be clear on this, as the entire world has gotten richer over the centuries, the poor have two. Not at the same rate, of course. I spoke to this gap finding in a previous pet peeves episode. But the worldwide poverty rate has gone from 50% in 1970 to about 10% in 2023. That is an absolutely phenomenal historical achievement, and it's going to get better than that. The rich should get richer unless something's going really wrong and everybody else should be getting richer too, all right, pet peeve Number 3. From the grandiose back to the small to another habit of speech.

Catchphrases and other habits of speech are obviously a fascination of mine thinking to past peeves where I take to task use of the phrases honestly or frankly, can I be truthful with you? If you're not clear on why that raises a smile, at least for me, go back and listen to pet peeves Volume 2. But paying careful attention to language has helped me very much as an investor as well. Phrases like, well, you haven't lost until you sell covered in Volume 2. Or the problematic phrase, growth stock covered in pet peeves Volume 4 or text docs pet peeves Volume 5. Which by the way, what does that mean exactly? Are all windows into seeing the thinking, what I consider here to be the faulty or misleading thinking of people who are regularly fooling themselves and, or others based on the language they choose or use. I'm a linguaphile and I'm ever on the hunt. Peeve number 3 this time around is pretty simple. You may well have seen this yourself. You may have come across. People who have a habit, as they speak, of stopping. Sometimes in the middle of their sentences and often at the end for, I guess, emphasis. By finishing many of their sentences in their little speeches. Okay, with the word. You're getting this. Now I'm willing to grant an OK here and there. I'm OK with that. But OK. If you start rocking In three consecutive sentences.

Or even let's say three times in 16 words like I just did. Then I'm actually not OK. When I'm being OK, I start thinking, suspecting at least that, that I'm being hustled. I want to slow the speaker down. I want to sometimes stop outright that speaker. Maybe I've done this like once and probably I should do it more and just say, excuse me. Actually, I'm not OK with what you just said. Sorry to interrupt the stream, but I actually disagree with what you just said, or I'm finding myself in increasing disagreement as you keep asking if I'm OK. But the thing is you're never actually checking with me. Do you see you aren't actually interested in my answer to your question as to whether I'm OK and so you're losing trust with me. I don't think you actually care whether I'm OK. And if you feel that way, I think I'm speaking half to myself here. I think you should voice that. I even give you permission, fellow fool, if you like to say I don't think you actually care whether I'm OK and you can end with one, just one peremptory OK? I don't think you actually care whether I'm OK. Okay. By the way, there is a decent chance that the same people who do the world may also in some cases be the OK crowd. Okay? Do think about that sum. Okay. On to pet peeve number 4, sports are a recurring topic on my pet peeves episodes. Check it. And this one is no exception. You're watching a ball game on TV at home, it's baseball. Watching on TV at home, you can clearly see the strike zone. As a baseball fan, you grew up probably knowing it's traditionally from the batter's chest to his knees, and then from one side of home plate to the other, it's a rectangle, and you're watching TV, and there's a white box overlaid by the television graphics in the same way as when you watch NFL football, you see the graphic of a yellow line that's not actually there on the field, but on TV it's telling you exactly where the offense needs to get a first down. Well, the helpful baseball TV people with their whiz-bang technology can now show you quite clearly what is a strike and what is a ball. Here comes the pitch, and it's outside that white rectangle, and the umpire, wait for it, calls a strike.

You're not an expert, you're not an umpire, you're not part of an umpire's union. No one's paying you to call balls and strikes, but you, sitting there a little bit alone, you're empty nested, your kids have grown up and moved on. You're watching the game by yourself, you've got the remote control in your hand, you use it to skip forward every 30 seconds that get past the ads. You watch that pitch. It is completely obviously a ball, and yet it has been called by the paid professional a strike. You're watching the hometown announcers, it's their pitcher on the mound. He threw an obvious ball, the umpire called it a strike, they probably don't say much about it because that benefits the home team. The home teams in the field, they're pitching the ball, they threw a ball, it's called a strike. Who's going to complain? Except maybe you, or maybe all the fans of the other team who saw something clearly wrong that is constantly being gotten wrong from one inning to the next one game to the next, across the entire Major League Baseball season. Friends, and I'm speaking not to you, my dear friend, my listener, I'm speaking to major league Baseball friends, you have technology. It shows clearly what is a ball and what is a strike. It's smart enough if one hitter is quite tall to have a different-sized white rectangle than a shorter hitter. All of your fans watching at home, and that's more people by far than are in the stadium, all of your fans watching at home can clearly see the truth. Other sports like tennis have begun to embrace technology that no longer has big disputes about what in or out.

Thanks to white-line technology, major league baseball, it's time. You know, if I were watching that game not just by myself but with the proverbial alien visiting our planet for the first time, sitting beside me on the couch, I would have a really hard time explaining to my new alien friend why that pitch that was clearly well outside the white box, why in the rules of the game and how it's being enforced, why that would be a strike here in the year 2023. Pet peeve number 4, umps. Professional paid people miss calling balls and strikes with a live video box showing the truth. This is unsupportable. This is unsustainable. It will probably, maybe already is changing first in the Minor leagues. This will be soon a part of ancient history. Surely, some few years from now, we'll look back and say, how stupid. What's that? Onto pet peeve number 5. Now I think we're all used to seeing the billboards on the highways and the paid advertisements on TV, and I suppose they take out ads on the digital internet, although at least in my experience, these tend to be more offline than online. These ads, and you know them, this is not my pet peeve, by the way, it might be yours. The ads that begin injured, and at least if you're in the US of A, which is three-quarters of our listeners this week are, I think you can probably fill in the blanks after. But for the 25% of listeners of this podcast who are not American citizens, you may not have this in your country, you may not know what I'm talking about.

You may not have a steady stream of advertisements coming from various competing law firms that are each hoping to persuade you that if you've been harmed recently, particularly physically harmed, dial 1800 get well or 1800 I like Mike, or 1800 fight back to reach, to reach out to your friendly, trustworthy, almost always, male not female. Am I right? Handsome and oozing way. Personal injury lawyer who fights for his clients and will always have a great track record of getting you back to even making it right. Usually, by the way, taking about 25% to 40% of the money recovered for his victims in his contingency fees which I'm not here to criticize, only to point out that it seems like that's quite enough, quite enough money for them to blanket our world in highway billboards with their faces and their appeals. It seems like this is a business that is working and has a lot of ad money to spend for it. Again, this might be a pet peeve of yours, but to me, no, it's not mine. It's too easy. I want to take a half step away instead and talk about my own related pet peeve, which is class action investor lawsuits. I asked you at the very top of the show, have you ever been part of one of these? Some of us will have done so. Some of us will see that our stock that we're part owners of, the company that we own shares of, had a disappointing quarter. It gets announced, the stock drops, 30% at market open. Within 24 hours, you will probably see half a dozen, maybe dozens of press releases, advertisements, basically, from law firms that are embarking upon class action investor lawsuits aggrieved because the company blew its quarter, its stock dropped, and clearly, these people have to pay.

The great irony of class action investor lawsuits is the law firms themselves need to get actual investors, you know, you and me, the part owners of the company, to agree to join them in a class action suit. For those, I've never joined one, but for those who've reported in it, motley fool community in our forums over the many years, how often do I hear that they got pennies back, not just on the dollar but on the hundreds of dollars? Pennies back, a comic small check for their participation in the class action investor lawsuit that they had signed up for and usually never do so again. I think the people who join these these days are generally unwitting people who have never joined one before and realize that in contrast, I think to the contingency fees that personal injury lawyers earn, the people who make the money on class action investor lawsuits are mostly just the law firms themselves. Boy, aren't they jumping all over each other to be the one to represent the largest class? Part of my pet peeve of thinking here is it's very ironic when you really think about this. When companies make mistakes, and we all make mistakes all the time, really, when companies make mistakes in addition to the hard times introduced by a down quarter or a down year, these companies have to deal with the nuisances and have to expend money, the company that you are a part owner of, the company that I am a part owner of as stock market investors, our companies have to then spend additional money and time combating, or at least working with these nuisance lawsuits.

Most ironically, class action investor lawsuits are supposed to protect us and benefit us as investors in these companies. But if you're an investor like I am, which means you're there to stay, you're a part owner of the company, you are being nuisance, you were being hurt by the supposed class action you are being asked to join. I say maybe we should start our own class action suit aimed at the nuisance law firms themselves. Dream with me here in the spirit of John Lennon. Can we imagine together? Imagine if all the people, all the shareholders of one aggrieved company that just had a down quarter and got greeted with a flurry of class action lawsuit announcements. Imagine if those shareholders of that company filed an historic new form of class action suit, contending that the law firms themselves are destroying our value, value for shareholders, primarily through diverting the attention of our corporate executives and through the wasteful necessity of higher legal costs, ultimately costing us shareholders, who have these costs passed on to us as owners of the equity. The irony is that the predatory firms poses representatives of shareholder value when in reality, they demonstrably subtract from shareholder value through their actions, which in many cases form their firm's primary business model. You with me here, fools? It's pretty simple. The model fool in our community believe these law firms subtract value with their nuisance suits. I believe we could put a firm dollar figure on that cost, and then we will act to reclaim our costs. You know, a single successful class action suit like this one, reclaiming damages from a nuisance firm, that could historically reverse millions and millions of dollars and hours, a generation of extortion.

As it would set a legal precedent that would force all nuisance firms in future to think twice about the quality of their cases else they'd be sued. Think that over with a cup of Joe and get back to me. All right, two more for you. Let's move to pet peeve number 6. Edwin Abbott in 1884 first published his book, Flatland, a romance of many dimensions. Now I'm quite sure some of my literate listeners have read this maybe more than once, maybe more recently than I have. I'm giving you my recollection having read it in my 20s, which is three decades ago. But Edwin Abbott created a world of shapes, of dimensions. He called it Flatland. So let's be mathematical just briefly here. One dimension. A one-dimensional world is a line. If you draw a line across a piece of paper that has one dimension. And in his book Flatland, which is a fictional imagining, he has Lineland, and Lineland is inhabited by lines. And the funny thing about lines is they can't see squares. They can't see squares other than as a set of points on a line. If you just draw a line across a piece of paper and then draw a square over it, as that line hits into the square, it only sees the line as it approaches that square. As it gets near, it sees the edge of the square as just another line. It can't see what's behind it. It can't see in two dimensions. It's a one-dimensional line. By the way, very similarly, a zero-dimensional space is a single point. If you just draw a little dot on a piece of paper with your pencil, you've just drawn a zero-dimensional space.

That point itself can't see a line except as a point. All it can see is points. And so this is the world of Flatland, a two-dimensional world. And if a sphere shows up and intersects that two-dimensional plane, the line thinks it's a line. The two-dimensional squares floating around on that flat piece of paper, When a three-dimensional sphere intersects it, only see the sphere as a circle, a fellow two-dimensional shape. Squares and circles in any two-dimensional shape you sketch out on paper cannot see the third dimension. You and I, by the way, as three-dimensional figures, we have a really hard time conceiving of a fourth dimension. Or how about a fifth one? Which gets me back to how I started this podcast talking about the left and the right. Those are political terms increasingly, but this is not a political point. This is a point about two-dimensional thinking. As a fellow US citizen or even people outside the US, you might have heard this phrase in recent years, a blue state or a red state. There are no other colors. There are just blue states and red states. Sometimes you'll hear some subtle, nuanced observers say it's a bit purple. But that's about all you'll get out of the two-dimensional thinkers who analyze developments culturally and politically as benefiting the so-called left over there on one side of the piece of paper or the right. They have a hard time seeing anything but the left and the right. In the same way, other people have a hard time seeing anything but blue and red or broadening it. Sometimes we just see our team and that one other team. It seems that's zero-sum.

One of us is going to win, the other is going to lose. There probably aren't any other teams. There's just two-dimensional thinking. There's just, you beat me, or I beat you. In the same way as three-dimensional figures, you and me, three-dimensional creatures, we can look down at a flat piece of paper and see a rectangle drawn on that paper. Maybe it even looks like a white rectangle on a TV screen watching baseball. You see, and you can easily interpret a two-dimensional thing as simplistic because you're a three-dimensional creature. That's what I encourage you to do as you see coverage increasingly of world events and how we see the world, where you're either a PC or a Mac. Apple or Microsoft. There couldn't be anything else but that, and surely nobody would ever own both an iMac and a PC because we're two-dimensional thinkers. And as the news media covering events, we're going to actively talk about the left and the right, even though most people, at least in my experience, when you press them, they have a hard time articulating crisply what is exactly meant by the left or what is exactly meant by the right. And anytime you want, this is not a political conversation. Have fun with a friend. Both of you write down five adjectives or phrases that you would say characterize the right, like your five top ones. The ones that clearly in your mind describe the left.

Both do so blindly and then compare notes with your really good friend that you're doing this with and see how similar or not this simplistic two-dimensional model that is being foisted upon us only if we listen to it and want to play that way often by the media today. It doesn't take a lot to take simple two-dimensional thinking into newer, more interesting space. A lot of people, when we think about our society, we think, do you want to be free or regulated? That's a simple two-dimensional way of thinking, free or regulated. But then, it's not just all of American life today. We might instead look at two different things. Our economy as one thing, free or regulated, and then how you and I live our lives, the personal choices that we have, our privacy for example. Do we want to be free or regulated? Often, it seems the suggestion is that half of us believe that everything should be a regulated market with regulated living. And the other half of us think we should generally have free markets and be able to live free. But as I've co-existed with you on this planet these last years and decades, it's become clear to me that some people love free markets and free living and some people prefer regulated markets and regulated living. But a lot of us like free markets and regulated living, and others of us like regulated markets and free living. And we're quickly leaving the zone of saying left or right with a simple effort to create a two-by-two quadrant in which you could actually group everybody's preferences in four boxes, not just two. And that itself, wasn't it, is pretty simplistic. Pet peeve number 6, two-dimensional thinking. Pet peeve number 6, get out of Flatland. Pet peeve number 7, maybe from the sublime to the more ridiculous. Let's get back to the stock market.

A past pet peeve, I can't remember which volume this was, but it might have been Volume 1. I remember saying, do you still see this out there today? Is it one of your pet peeves too, dear listener? People who don't know Apple's ticker symbol? Yeah, it's AAPL. I wish Apple hadn't done that. I don't know if it was Steve Jobs' fault. The company came public decades ago. It's always been AAPL. I'm sure there's a chapter in some history book that explains why they went with that, but how many people go with APPL and how many times have stocks that ever had that ticker symbol gotten a little bump as somebody misbought something that they thought was Apple? Well, that was a past pet peeve. This one related is not about the ticker symbol, it's just about the corporate name and how many people in my experience. This has now become a trillion-dollar company. It's a stock that's made more than a hundred times its value since I picked it for Motley Fool stock advisor members in 2005. It's actually the best performer in stock advisor history. I think it's up more than 200 times in value. You would think that a company with one of the best CEOs in America, Jensen Wong, that's active in video games, AI, it's driving increasing aspects of our future. You might own the stock. I wish I did. I've never owned it. I picked it for Motley Fool members. I've never owned this 200-plus bagger. I own a couple of my others. You would think that at this stage of history, especially for people who own it in their portfolios, you would think that people would know that the name of the company is not Nvidia, it's Nvidia. Check it. If you have this in your portfolio, especially if you've made a hundred times or more of your money on this. I surely do hope that you know it's Nvidia. Fool on.