A Motley Fool Co-Founder's Roller-Coaster Nvidia Story

We're here today not just to repeat lessons from the past, but to reflect on them anew, and fit them into our view of the present and more importantly, the future.

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This video was recorded on January 17, 2024.

David Gardner: I try never to say never, but I'm as close as can be to never on some things. One is that I never think I'm going to run for a public office. For my own life, I take much greater interest in the platform of my company, the Motley Fool, fulfilling our purpose to make the world smarter, happier, and richer, I realize that public service is a thing, a phrase used so regularly that saying, private service probably sounds like crazy talk. But for me, private service, serving your fellow human beings through private sector efforts can be extremely valuable, influential, often more enjoyable. For a lot of us, you too, very rewarding sometimes in comparison to that much more often used phrase public service. Now, some public servants, I certainly admire a few, but for us private servants, there's no political office needed. There's no campaigning, no special interests, no PACs, no negative ads. Another thing I've never yet done, here's another never, is repeat a Rule Breaker Investing podcast. My pal Rick Engdahl, I have brought you a fresh new podcast every week since July 2015. That's 450 weeks in a row. I think it's actually 448 this week, but who's counting? New podcasts every week mean new tricks every week.

That's particularly good for me because one of the things I'm worst at is just saying the same thing, the same sound bite over and over, I can't do it. I take far more joy in coming up with something new for you right here every week on this podcast than if I were just saying the same thing over and over like some are doing at the caucuses this month. They need to stay on message. They need to say the same thing over and over, the same sound bite that gets them the votes, but that's the opposite of my own inclinations and joy. To a fault, I try to keep coming up with new tricks for you every week on this podcast. To a fault I'd say, because if you're always playing a new instrument or a new tune from one week to the next, you might make the mistake of forgetting to repeat some of the most important truths, the timeless ones, the essentials from time to time.

Therefore, I like to hail back to the past and remake some cardinal points that I've made before so they're not lost. Especially for our newer listeners, I would be a fool if I assumed you knew that critical lesson I taught on this podcast back in 2017 or one of my favorite stories from 2022 even. Well, about once a year, I do this series, it's called Blast from the Past. It features five points that I want to make sure you hear again or here for the first time. Is it 2024 already? Great. It's time for Blast from the Past Volume 8, only on this week's Rule Breaker Investing.

Welcome back to Rule Breaker Investing. That was a bit of a lead in. I say we get right down to brass tacks and get started. I have five blasts from the past for you. Five points previously made, speaking to investing, speaking to business, and speaking to life. The three domains of this podcast, investing, business, and life, will feature throughout this week's podcast. As we go back and find, I think some of the most important learning lessons that we can take away, that I want to speak back to once again here at the start of 2024. Without further ado, let's get started.

Blast from the Past, Point 1. In November of 2021, it was November 10, specifically, we did stock stories Volume 6, Peaks and Valleys, Rick Engdahl who titles our podcasts called it Peaks and Valleys. We told stock stories that week. I spoke specifically to one of my very favorite stocks. I'm going to retell that story now. If you're a Motley Fool Money listener, you will have heard me just a couple of weeks ago, tell this story again on Motley Fool Money. But there's not always crossover between Motley Fool Money and Rule Breaker Investing. It's such an important story and it's even got a fun ending now to it that I didn't have two weeks ago that I want to retell that story now.

It's the story of Nvidia as a stock for the Motley Fool. It was April of 2005 and I was casting about for my next stock pick for Motley Fool Stock Advisor members. We were three years into Motley Fool Stock Advisor. We'd started the service in March of 2002. Here we were around Tax Day 2005. I was thinking, what's a stock that I could recommend this month? I thought back to Nvidia, a stock that I'd initially been rooting against a decade before, because 3Dfx for video gamers of real vintage. 3Dfx back in the day was the graphic card company. If you wanted to have really good graphics on your gaming PC, you would buy a 3Dfx Graphics card. Increasingly in the 1990s, hot, new video games came out with 3Dfx inside on the label, the front cover of the popular video game. This was a great sign for 3Dfx investors.

Inside was for Intel. What that logo told you is that if you had a 3Dfx graphics card in your computer and you bought this video game, you would get even better graphics for that video game. 3Dfx's only rival at that point was Nvidia, the stock that I didn't pick. In the same way that as a University of North Carolina graduate, I cheer on Tar Heel basketball every year and cheer against Duke basketball every year. Similarly, I had the same attitude back then about 3Dfx cheer on 3Dfx, cheer against Nvidia. Well, history will show I got that one wrong. 3Dfx ended up being bought out for a song by Nvidia some years after I'd picked it back in the 1990s, in the early days of the Motley Fools. Here we are now in 2005, April, and I'm thinking, I think I'm actually going to recommend Nvidia now, the company that bought out my formerly beloved 3Dfx, the company that was really growing. The stock advice split adjusted looking backwards from today. The stock price was $1.64. The reason I want to tell you this story is because it's such a roller coaster ride, and this story teaches the importance of being willing to ride the roller coaster up and down if you want truly great rewards in this life. $1.64 standing, start April 2005. By October 2007, the stock was at $10 a share. That's right. Two-and-a-half years later, it was a six-bagger.

Six times our money for Stock Advisor members. I was pretty pleased in October 2007, but market historians will remember 2008 was a cruel year for investors and it was for Nvidia as well. The stock, by the end of 2008, had gone from $10 a share to below $1.50 a share. In other words, I was now underwater, three-and-a-half years later from my initial pick of Nvidia, ticker symbol, by the way, NVDA. One year later, December 2009, I decided I was going to re recommend the stock again, make it my new pick in December 2009 for Stock Advisor members at the time we wrote and I quote, "The timing is right, so is the price. Nvidia just returned to profitability after three quarters in the red, it's maintained a sterling balance sheet and strong cash flow. Analysts think Nvidia is on track to earn about $0.74 a share. That's not split adjusted by the way. In Fiscal 2011, which starts at the end of January, we think they're probably shooting too low.

But even at that level, a forward price to earnings ratio of 22 isn't too much to pay for a company with these stellar long term prospects particularly one that consistently produces better cash flow than earnings. Whether you're a Mac or a PC, you need Nvidia. Something that looks this sharp belongs in your portfolio." Those were the Mac or PC ad days I can see as well. The stock, by the way, was $4 a share. We fast forward five years. Five long years later, Nvidia has gone from $4 a share to $5 a share, up 25% over those five years. By the way, at $5 a share, it was half where it was seven years earlier, but still, if you remember our dollar 64 cost basis, still a three-bagger from nine years before. In 2016, the stock crossed 10, where it had been at that early peak in October of 2007. We're back. By the end of that year, Nvidia had tripled from seven-and-a-half dollars a share to 22 and 1/2. It was the top-performing stock on the S&P 500 in 2016. One of my favorite things I ever did, as a Motley Fool Stock Advisor, was in January of 2017.

I decided I'm going to recommend it again. Not at that old price in 2005, not in that second price we got in 2009. Here we are in 2017, I'm going to make it my fresh pick once again. I'm doing so very consciously, knowing that it was the number 1 performer on the S&P 500 the year before. As a Rule Breaker, I like to subvert how people think about things. A lot of people, when they see a top performer, think what goes up must come down. They don't buy Nvidia at the start of 2017. But I sure hope Stock Advisor members were listening to me. Maybe you to dear listener as we started 2017, because that year the stock went twenty-two-and-a-half to fifty-two-and-a-half. Now we're in 2018, the stock is at 70. It had gone from fifty-two-and-a-half to 70. But in 2018 it dropped from its high of 70-$30 a share way more. We're now in the 2020s, Nvidia crossed 70 again. At the end of 2020, it was at $130 a share. Remember our cost is $1.64 which felt really nice when in 2021 Nvidia went and crossed $300 a share. In 2022, the stock drops from just over 300 to just over 100. That's right a near trillion dollar company, Nvidia lost 2/3 of its value in that single year of 2022. But today, now as we start 2024, it's back over 200, it's back over 300, it's back over 400. It recently touched 500. All you had to do was hold for about 18.5 years, 75 quarters or so and counting.

That is the story of the Nvidia roller coaster ride. When I appeared on Motley Fool Money and told that story, the day was Friday, January 5th of this year. But what I didn't know at that time, what I can share with you now is three days later, Monday, the first day where the market opened after that podcast, and these things are not connected by the way, but that next market day, after I told the story of Nvidia to Dylan Lewis on Motley Fool Money, the stock rose about $30 a share on that Monday, which means it did the rare spiffy 19 pop. That's right 19. Motley Fool Stock Advisor members with my original Nvidia pick made 19 times their cost basis in one day that day. Today, as we record, Nvidia is now at $563.04 a share. Up 344 times in value one of my 500 bagger stock picks I've made for Motley Fool members over the years. There are four other different stocks. By the way, it's worth pointing out that December 2009 initial rewrec, that one itself is now up more than 100 times in value. You can feel like you're late buy four or five years after you initially bought and still do fantastically well. A lot of the story of Nvidia is, I think, self explanatory. I hope it's clear in this Blast from the Past point Number 1, that you have to be patient. You have to be willing to sit through bad periods. Sometimes a stock like Nvidia or Tesla will do nothing for five years and other times it will shock you how quickly it rises or how quickly it falls. But what I've just described for you, and it's a little bit painful to do these numbers, I hope you were able to see it somewhat in your head It's a lot easier graphically to depict this, but what I think I've just shared with you is the true magic and secret of investing, of putting on the clothes, of wearing them like you do, that jersey for your favorite sports team and keeping that jersey on, and the incredible rewards that so few people, I think, who put their money in the stock market ever discover. The only way to discover that is truly to invest, I would say, the Rule Breaker way. Nvidia is an absolutely classic example of a Rule Breaker as a company and of a Rule Breaker stock for Rule Breaker investors. Bragging aside, I hope there wasn't too much braggadocio, I am proud of that one.

But wow, Jensen Haung, the founder and CEO is one of the truly underrated CEOs of our time. He should be a household name. His story and what Nvidia has accomplished, is accomplishing today, absolutely fantastic. I'm so happy for Nvidia investors, especially ones who found and held the stock, thanks to the platform of the Motley Fool. Onto Blast from the Past Number 2, I front loaded a few investing lessons. This episode, I have a business lesson or two as well, and a life lesson at the end. Here comes another investing lesson. This one was first told in February of last year. In fact, it was my essays from yesterday, volume four, last year and it was the story of Marvel. The 14 lessons that we can learn from Marvel, listeners of recent vintage as early as a year ago if you started listening, you might remember this one. My bad memory, I'd forgot I was reviewing past podcasts as we made a turn here in the New Year, and I came across what we talked about last February again and I definitely think it's worth airing. In some ways there's overlap with the story of Nvidia. This one will be quicker and easier to listen to, but the lessons cannot be reinforced, cannot be repeated, I think enough, especially here at the start of a new year, as we all try to make better financial decisions especially for those of us who are investors, better investing decisions. On that podcast 11 months ago, I read an essay from October of 2009. Now Disney fans or Marvel shareholders may remember the significance of October 2009. Disney announced it was buying Marvel out. It had just announced it was buying out. Marvel. Marvel jumped about 30% in reaction, and as history shows, it all happened. Not every merger is consummated. This one was, and of course, Marvel now has been implicit in Disney for, well, about 15 years now and counting.

Well, Marvel on that date in October of 2009, became a 14 bagger for Motley Fool Stock Advisor members. It inspired me to write a short essay called 14 Lessons from a 14 Bagger. I'm going to share just a snatch of that essay here with you right now as my Blast from the Past. What can we learn, I was asking, from Marvel? Marvel taught us that one, buying and holding great companies can earn you tremendous returns. Don't let fools scare you out of patient ownership of great companies. That's because two, you never know when they might just get bought out from under you. The same thing happened to us with Pixar, which Disney bought in 2006. Of course three, we didn't need Marvel or Pixar to get acquired. When you're buying stock in great companies, they'll do just fine on their own. Indeed four, when big companies gobble up great small ones though, the small company investors receive a premium, they're often robbed of far greater gains that small company could have achieved on its own, and I suspect that was the case here. Five, it's OK to feel a bit angry even when you get a 30% premium on top of a stock already near its 52 week high. As I write, Marvel has gained 1,300% since our initial recommendation in 2002. The directly comparable S&P performance is 0%. It turns out that six, good stock picking can make you a lot of money in sideways markets, but seven, you have to be invested to do so. If you sit on the sidelines waiting for a good market, you'll often buy after the market's already been good. I'll emphasize this because I'm extremely proud of it. We made 14 times our money holding Marvel over seven years when the market was exactly flat through superior stock selection. You can make money in any market, you can even, eight, make good money in down markets.

A month by month investment in the S&P 500 since Stock Advisor started in March 2002, average is a 4% loss. My average gain over the same period, picking one stock every month is plus 54% per stock. My brother Tom's picks haven't been bad either, plus 32% per stock. After eight lessons, I have at least six more to share, but I've run out of space so join me on our Marvel discussion board, where I'll take the number to 14 and beyond and ask for your lessons too. In the meantime, congratulations to all Marvel shareholders. We recommend holding Marvel and letting Disney take the ball from here. That's how that essay ended in 2009, and yes, we've continued to hold Disney that Marvel investment now, with Disney more than tripling since is now a 51 bagger. But finally, I promised in that essay I would give lesson number 14. Lesson number 14 from Marvel is that the Motley Fool community is smart. I've often said to you, our listeners, and to any members in good markets and bad., are you doing better with us than you would have without? That's one of my favorite questions to ask anybody who is a member of the Motley Fool or a prospective member of the Motley Fool because some years we're going to go down together. The stock market after all goes down one year in every three. Thus, one year in every three our business is horrible. We're asking you to pay us money as you yourself lose money. It doesn't feel good for any of us.

But in those times, in bad times and good I would ask you, are you doing better with us than you would without? And a big part of doing better with us I think is the Motley Fool community, whether you're joining us for our discussion boards, which remain active today, we no longer have a Marvel Board for understandable reasons, but we have a Disney discussion, or whether you come to member events like Fool Fest, or maybe you've met some Motley Fool members in your area and you all have an investment club together. Whatever it is, community can take many forms, but it's always been an important thing for us here at the Motley Fools. If you go back, if you can find it by the way, and find the very first posting on our Marvel Community discussion board, it is a classic. This is what I'll leave you with on Blast from the Past point Number 2. The date was June 17 of 2005 as we opened up a discussion for Marvel on our website, fool.com and the first posting in the Marvel Discussion Board was posted by someone whose screen name was Farnam Street Fool, that's the screen name. It was posted at 1:05 A.M Eastern, 1:05 in the morning, June 17, 2005. That posting ends, and I kid you not, this is what the forum posting said. "Do you think this company is an attractive buyout candidate? If I was a media entertainment conglomerate, I would certainly be interested in Marvel. I see Disney as a natural suitor. What do you think?", wrote Farnam Street Fool. An incredibly great ending to the first posting ever posted on our Marvel discussion board at The Motley Fool, that is the 14th lesson, the power of community.

You Fools, you listeners of this podcast, you community members, you're smart. On to Blast from the Past, Number 3. This is a framework, one of my favorites I haven't talked about on this podcast for six years now, but Deborah Meyer's Five Habits of the Mind of Learning, I first presented on March 15th of 2017. The title that podcast was Deborah Meyer's Habits of Mind, and then I covered it a year later in an Old New Borrowed and Blue episode. Now, Deborah Meyer is an educator. She's considered the founder of the modern small schools movement. In the prime of her career, she operated out of a very difficult neighborhood in New York City, and produced spectacular gains for that district, and earned her fame that way. She's gone on to write and think a lot about education, but I pulled her framework from education, out of education. On that podcast, I applied it to our subject, which is, of course, investing, and that's what I'm going to do right now for you. Her five habits of mind. They're what she believes students should be taught. It's how we should be taught. We should be taught these five habits of mind, and if you're a teacher, by the way, you'd be preparing your lesson plans maybe with these in mind. But we're going to use this and apply it instead to investing. Five habits of mind, they're not ordered by her, but I'll just order them for our own convenience. The first one I want to lead off with is significance.

Significance, why does this thing matter? We should be asking our students, encouraging our students to ask of themselves, developing these habits of mind. Significance, why does this thing matter? Well, the investment takeaway here is, real companies do real things, and the greatest stocks usually do the greatest things in this world. No surprise that earlier talking about Nvidia, it's ended up being a monster stock like others of its ilk, Marvel included. I think of Amazon as an obvious example. Significance, when you're looking at investing, and you're looking up and down your watch list, ask yourself, what really matters? What companies are doing things that are irreplaceable in this world. That if you snapped your fingers and that company disappeared, the world would really be hurting. That is a very good sign that that's a stock you should pay extra attention to, maybe extra allocation to. Because significance, developing that habit of mind as an investor is so helpful, so important. The opposite; insignificance, are fly by night penny stocks. Companies that will briefly be hyped or maybe make somebody's headline one day, but they're not really going to move mountains. They're not going to move your portfolio, especially over the only term that counts, the long-term. Habit of mind number one, significance. Number 2 is evidence. Encouraging teaching students and ourselves to ask how do you know? Prove it to me. In this era of fake news, I had a friend the other day who said, "Did you hear about Miami? They may have discovered 8,10 foot tall aliens there in a mall. There were a lot of police cars around the mall, and it's a little bit shrouded in secrecy." I asked this person to double-check what their source was, and they checked into it some more. They even showed me their source, and it turns out some people actually believed this briefly, I think, for a day or two earlier this year, just a week or so ago. But, evidence. How do you know? Prove it to me. Well, the investment takeaway here is really good news. Investors in a world of fake news have something we can really rely on. They're called 10 K's. They come out annually.

They're the audited financial statements of the companies that you and I are thinking of investing in or 10 Qs. Those come out quarterly, and they're the same thing. They're great sources for making investment decisions. Occasionally, audited financial results can be fraudulent, and run anybody, but this doesn't happen very often. In fact, 99.9 plus percent of the time, you can trust your audited financial statements for the stocks that you are researching and investing. Evidence, a habit of mind. A great one to get into, and good news, investors have the real numbers, the financials, to help guide us in making our decisions. Habit of mind number 3, Deborah Meyer calls connection. The question you encourage students to ask is, why are we learning this? We should encourage kids, we should encourage each other to say, why are we learning this thing? What does it connect into? How does that connection enrich my knowledge base or my life making connections? When I think of the investment takeaway and I think about connection, the first thing I think of is the miracle of the stock market itself. How about this? You can actually connect insights with prosperity. For public companies, you can say of Nvidia or Marvel or Amazon. Wow, that seems like it could be a real winner. I'm a fan of the product or the service, and I'd like to be a part owner of that, and you can be. You can connect your insights with ownership, and ownership, ultimately connecting to prosperity for the things that do well over time. We take that for granted.

I take that for granted every day. We never should. That is a small miracle and worthy of your and my gratitude. When I think of connection, the idea that you can connect your insights with your money, with things external to both of those things, like public companies and retire early, wow. Also one secondary point about connection, speaking again to real companies doing real things that matter, remembers, significance, habit of mind Number 1, I think it's worth reminding yourself that if you find yourself in some abstruse place, you're trying to figure out how this obscure company or this hard to understand technology connects into the world at large, and you can't really find it. That's probably a stock you don't need to keep researching. Maybe one to skip. I went to a podcast entitled Great Stocks Don't Make you think. I was thinking of the great web designer Steve Krug, and he's urging that great web pages shouldn't make you think. If you're on a well designed web page, you should already understand its purpose. You shouldn't be trying to figure out, "What is this page doing, and why am I here?" Well, the same is true of stocks. Usually, the great stocks, you look back and you're like, obviously, Tesla was going to be a great stock, because that was the age of the electric car, and it seems so obvious in retrospect, but looking for simplicity and the things that really matter, that connect into the world at large in clear ways are going to help not just your investing, but your business as we'll talk about in a sec, and your life.

The two other habits of mind are perspective and supposition. For perspective, what's your point of view, and what if you changed your point of view? The investment takeaway there is pretty obvious. I think it's always helpful to know the bear case for any stock that you're investing, any company that you own to understand those who don't believe in it, those who may be willing to sell you their shares, what are they thinking? Another essay that I once wrote in a podcast I've done, you can google this one, one of my favorites truly a Blast from the Past at this point, almost eight years old, Dark Clouds I can See Through when you can see through the bear case. When you have confidence, those often can end up being your best stocks. Because if the world is skeptical of that company, if electric cars have failed before, why would somebody named Elon be able to turn electric cars into real products and profits? Then those end up being the best stocks on the market, because all those skeptics convert. Eventually, Amazon bears to bulls over the course of time, and stocks are driven up that wall of worry by that human sentiment. When you find dark clouds that you can see through, that's really helpful. It's all about perspective, isn't it? That habit of mind, what's your point of view? Are you self-aware about that? What if you changed it? Does that improve your thinking? Another example of perspective is just short-term.

Are you a long-term minded person? I hope you are. If you're listening to this podcast, we talk quite a lot about that from one month to the next here. But try to emphasize one day, just think incredibly short-term. Watch CNBC all day long. Quote your stocks minute to minute. Truly take on a very short-term perspective for the fun of it sometime, and you'll benefit again from shifting your perspective. I think you'll probably shift back at the end of that day, but it's really helpful that habit of mind. The final one, as I mentioned, is supposition. Deborah Meyer would ask you, what if things were different? Supposition is when you start imagining alternative futures. Other universes, if you will. What if things were different? I think the investment takeaway there is, what if the company that you're thinking of investing in or might be a part owner of, what if that company or its whole industry got disrupted? What if things change? After all, the only constant is change. You can sit there and stare at a tree and it's changing in infinitesimally small ways from minute to minute. We can't see that, but spend any time a season or two and those leaves will grow. They'll change color, they'll drop. You can't ever stop it. The only constant is change.

Do you have the people, often the founders at your company? Is a culture in place at that company that you're thinking of investing in? Do you have the people and the culture that will be able to evolve? What if things were different, you suppose? Well, things surely will be different. When I think more about supposition, what if things were different? I think of a great example of a company that has evolved, I think of Netflix. DVD rentals. Remember DVDs? Remember rentals? Well, broadband Internet streaming showed up in 2007, but Reed Hastings, the founder and CEO at the time, introduced Netflix then as a streaming service. The Netflix as we know it now. But he wasn't content just to stream other stuff. Netflix began a period of content creation, shooting its own streaming shows and movies and also expanded globally in a world where most video rentals were a place on the corner around the block. All of a sudden, Netflix was operating globally and streaming. That's a company that wasn't just supposing things might be different. Reed Hastings knew things would be different and he's consistently gotten ahead of it.

Netflix has to the great reward of its shareholders. So pivots are natural, especially at early stages, but pivots at scale, as Netflix has demonstrated multiple times, as Amazon has demonstrated multiple times, that's another thing altogether. So there you have it. Five habits of mind, significance, evidence, connection, perspective, and supposition. I mentioned that we're doing investing, business, and life this week. There are also business takeaways to these points as well, I'll just give you a quick business lesson before moving on to a business point Blast from the Past Number 4. But if you think about Deborah Meyer's Habits of Mind and apply them, not to investment takeaways but to business, the one that you might be in, the one that I'm in and you think of them again quickly, when I think of significance, I think the best businesses, the best entrepreneurs are solving a problem or creating a new solution. That is significance. Their evidence is when they find something that's really sub-optimal in the world, that sucks in some cases if you will. Those entrepreneurs enter into those industries and fix those things. Have a lover's quarrel to go back to Elon Musk briefly, People thought electric vehicles weren't very good.

That's because they weren't. They were pretty poor up until Tesla showed up and Elon Musk is a great example of somebody who had a lover's quarrel with what was happening in the automotive industry. He went out there and created something much better. But he was using the evidence, habit of mind to look around the world and say, what do I see evidently that could be improved? Great entrepreneurs improve those things. The third one, connection. Well, when we think about connection in the business way, I think about finding the best mentors you can, the best business partners that you can find to work with, the best venture capitalists if you need money, if you need capital, connection is so important as a habit of mind to entrepreneurs. The last two, well, perspective. Perspective for me is being customer-centric. Shifting over to your customer's perspective in a often product-centric world, the customer-centric businesses are the winners. Two weeks ago on essays from yesterday, I talked about being service oriented as opposed to being product oriented. Then finally, that last habit of mind, supposition, all about being ready to pivot. Well, if you're an entrepreneur, you know that you've already done that multiple times, probably for any start up you've been in. But it's even true of bigger companies. I mentioned, obviously, Netflix is an example. How about, let's close with the Lego. Lego was founded in 1932, but it was getting badly disrupted by video games in the '80s and '90s. Did you notice the company had also, in Peter Lynch's terms, diversified. There were Lego theme parks. Lego had over extended into businesses, causing it to lose money.

Lego was a money losing enterprise 20 years ago until new leadership came in, a new CEO and pivoted. Supposed things could be different, supposition, remember the Lego movie? That was a great pivot. How about all of the Lego video games that exist today? That's right. I've got a number on my shelf too. If you're a video gamer, Lego has done a great job returning to profitability by pivoting, by supposing things could, would be different. That's great leadership. Before we go on to Blast from the Past, Number 4, let me just close by saying, thank you Deborah Meyer. I don't think you're a Motley Fool member. I hope you are. I doubt you're an active listener to this podcast, but I want to congratulate you because you're now 92 years old, and I find myself going back and quoting you every few years because of your individual genius which you shared with the world. So thank you, Deborah Meyer. On to Blast from the Past Number 4. Again, the first two we're investing, the next two investing in now business. This is all about business and the power of Fads. So the date was April 17, 2019 for this podcast. That week it was a review-a-palooza, entitled Stock Sampler Reviews, Five Stocks I Own, and April the Giraffe. Now I'm not going to explain April the Giraffe. Longer term members will know and I hope it still have some affection for April the giraffe.

You could probably google Rule Breaker Investing April the Giraffe and find some interesting links. But that's what we were reflecting on and I was talking with my friend and analyst Jim Mueller on that podcast where we were talking about Activision Blizzard. Jim had just said that the popularity of the video game Fortnight was perceived to be a reason that Activision was under performing that year or so. People were playing Fortnight instead of games by Activision or games by Blizzard and it caused me to think some more now with you about Fads. I don't think I talked about this too much on that podcast, so this is not a true Blast from the Past, but I think it's an important point and I've taken advantage of these learning over the years. I share them here with you. It's about Fortnight. Fortnight is a phenomenon. Last month, December of 2023, it had approximately 235 million players play at least once in that month according to active player.io. Now the world population is 8 billion humans, thus something like one in 32 of us is playing fortnight. Now remember that, that ratio includes in its denominator all people, all ages, all genders, nationalities, creeds, borders, everyone. One in 32 of us played Fortnight over the past fortnight or so. The game launched in 2017, within its first year, thanks to its popular battle royale mode, it attracted over 125 million players. You probably already know this if you've been living on Earth since 2017. But recounting here for anyone unaware, battle royale involves starting with 100 active players who parachute onto an island together and furiously begin scavenging the environment for supplies, including, of course, weapons and ammunition. For the next 20 minutes, it's basically kill or be killed. Unlike other video games, you can't just restart when you die, you're done along with 98 others until we reach the last one standing the winner. In a brilliant design move, the environment itself keeps shrinking due to a coming toxic storm, so that players are increasingly forced to confront each other as the time winds down. The attractive, cartoonish graphics encourage a playful atmosphere and having been killed in the game any number of times myself.

Well, one doesn't take it too seriously it's not asking for that. But that the game that any game really has been part of the world's cultural zeitgeist for seven years now is a great testament to Fortnight's stickiness. People have wondered aloud on the Internet for years now when it's going to end because it's such an obvious fad. But here's the lesson. Business phenomena rarely are, especially when they hit scale. You know, after Toby Maguire starred in the 2002 Spider Man Reboot that caused me to recommend Marvel in 2002, Superhero movies were called a fad. Starbucks, the idea of a national chain of coffee houses. Seriously? Starbucks was called a fad when it came public in the early '90s. Pokémon a fad, crocks, surely a fad video games themselves, when they debuted in the '70s, a fad, so fortnight, not a fad. The reason I want to draw attention to this point in this Blast from the Past is because many things get written off as fads. In a very short term mentality, people again have the what goes up must come down mentality and sure enough, things get overheated at one point people love their crocks too much. At one point, Pokémon was probably over rated and certainly I myself have tired of the rather constant dream, it seems of only superhero movies too big movie theaters these days, I myself am a little tired out, but this is decades after we've held Marvel and Disney all the way through. So things that get written off as fads. I'm not saying this is always true. Of course there are exceptions.

Some of those exceptions I would say prove the rule, but pay attention to when people think something is a fad, like coffee houses which had no previous existence at any scale across the United States of America. Because when Starbucks shows up you want to just not pay attention. You want to be a part owner, and by the way, you want to keep holding it for years and years as we've done for Starbucks as well. I hope the benefits of these lessons are becoming increasingly evident to my fellow Rule Breakers, my fellow listeners and investors. But I'm also speaking here to entrepreneurs and business people because I think the trick is, can you create a fad? I think, go ahead, create one. I challenge every business to do so. Some people would say the Motley Fool name was a gimmick and a fad online investing. In the 1990s, we were on some magazine covers that at the time made it look like this whole thing isn't going to last very long. But I think as business people, entrepreneurs and I would say livers of life, patience and grinding and keeping doing the same thing over and over, especially of course, if you love it. If you don't love it, I don't think you should. But those things are very valuable in a world that is often too quick to write things of consequence, things of value over time, to write them off as a fad. Onto the final Blast from the Past Blast from the Past number five. This one applies to life. I want to thank my friend and past guest on this podcast, David Allen, for this one. Let's call it the two minute rule.

That's what David Allen calls it and on October 12 of 2016, I spoke to this in Mental Tips Tricks and Life Hacks volume 2. We've done many more episodes of that episodic series since, but this was Mental Tips Tricks and Life Hacks volume 2. I think it was the first one of that episode, the two minute rule. It's as simple as this. If something's on your mind, if you just walked past something that you needed to do. If you were reminded of something that you should be doing and critically, and it takes 2 minutes or less. David Allen, the author of the book getting things Done, the G-T-D-O-G would say do it. I think Nike would probably agree to. But the two minute rule I have found invaluable ever since reading, getting things done somewhere around 2003. So 20 years later, I still ask myself, that thing that I just thought of, can I do that. There are thing I just walked past on my house that needs to be cleaned up. Can I accomplish that in 2 minutes or less? If so, you just do it. As David Allen has pointed out, you're really accomplishing two things when you succeed at the two minute rule. The first thing is that thing itself, like you did the dishes, great. It took you 2 minutes or less you did that dish, you put it in the dishwasher. Number 1 thing accomplished is the thing itself. But number 2, you don't have to think again about that thing. In getting things done, author David Allen speaks to the importance of that as well.

He says in so many words, don't ever have the same thought twice. Oh, I meant to clean that dish. If you're using the two minute rule effectively, it's already done. But if you find yourself in any context in life, having the same thought twice, either it should push you toward immediate activity if you can get that thing done or at least make a little progress on it, that might be physical progress. Something we can see you do in a movie. Wash one of the dishes even if you don't have time to do them all, or maybe it's mental progress. Just think a little bit more about it. Progress past having that same thought recur again, and if you will, sometimes again and again. We've all done that right here we are at the start of a new year. It doesn't rise to the level of capital R resolution, I don't think. But the two-minute rule and maybe being more conscious here in 2024 of not having that same thought twice. Always improving it a little if you couldn't get it done so you're never having that same thought twice. That sounds like a better year to me. I'll give you a quick tip that I've used ever since reading, Getting things done. I think I've mentioned this before in the podcast. Can't find which one. Whenever I enter my bedroom, I've trained myself to get in this habit. I automatically clean up two things. Usually I'm walking back to my bedroom, I don't know, to get a jacket, to go outside or change shoes. But all of a sudden, I notice I didn't hang up my robe. Oh my gosh. I didn't make my bed, 2 minutes or less. But I've trained myself, every time I cross the threshold into my bedroom to improve it in two quick ways. Now, do I do that every time? No. Do I always have time for that? No.

Do I regularly think about that 20-plus years and counting now? Yes. Is my bedroom tidier? Is my life simpler as a consequence? Yes. The power of habit, author Charles Duhigg would say, or Atomic habits. James Clear Past guessed on this podcast, that habits are really important. That's one that I've used as well. Feel free to steal it from me if it sounds like it could be helpful to you. But regardless of whether or not you want to do my two things crossing the bedroom threshold, I can at least say the two-minute rule is a worthy lesson coming at you as Blast from the Past. Number 5, well, thus much for the past, we return to the present now. But just to summarize, that Blast from the Past here in the present and remind you where we've been this week, ranging back over the years together we learned about the Nvidia roller coaster ride and what true investing looks like. We learned 14 lessons from a 14 bagger with Marvel, especially most of all the power of community and hanging out with smart people. We learned, again, Deborah Meyer, five habits of mind. Something you can use as an investor. Something you can use as a business person. Something you can use as a parent, a teacher, a self-guided tool for your life. Number 4, the power of fads. I dare you go ahead, create one. It's not easy, they're a lot more valuable than the people who write them off. Finally, the two-minute rule. Finally, thanks for being with me this week. Full on.