In this podcast, Motley Fool co-founder David Gardner brings back a few life hacks, peeves, and perks from past episodes; introduces a new financial holiday -- National Share Day -- imagining a country where every American becomes an owner; borrows a passage from his book to explore how AI may (or may not) fit into Rule Breaker investing; and closes with a blue reflection on the rise and fall of Bed Bath & Beyond -- and asks, was this the very first stock The Motley Fool ever shorted?

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A full transcript is below.

This podcast was recorded on Dec. 10, 2025.

David Gardner: Every once in a blue moon or a new moon or an old moon or a borrowed moon, I cue up a hodgepodge of points that I want to share. They're not really related to each other. They're a hodgepodge, but I force them to fit into this mold, something old, something new, something borrowed, something blue. You probably know the expression, don't you? It's what brides traditionally are supposed to wear. On their wedding day, for good luck, something old, something new, something borrowed, something blue. While I won't be providing this on this podcast, you're also supposed to have a silver sixpence in your shoe. Now, if you want to locate a dime or a quarter and slip it into your shoe for this week's podcast, I think you might have even better luck. Anyway, as the winter here in the northern hemisphere begins to crank itself up, I'm cranking back up this recurring episodic series for Rule Breaker Investing. Once again, our tenth volume. We're going to talk about life hacks. I still swear by and a brand new holiday idea for America. We'll borrow an answer to the question. Won't artificial intelligence do all our investing for us and take a look through a blue lens at a fallen star stock, a beam stock, no less, that was actually the first short in Motley Fool history? Something old, something new, something borrowed, something blue. Only on this week's Rule Breaker Investing.

Welcome back to Rule Breaker Investing. If you are a gamer, I sure hope you were with me last week. My once-a-year Games podcast this time, Volume 7, was really fun to do, and as I went through more than a dozen games for that podcast, I was thinking about all the games I didn't get to speak to. For example, splendor. I was just looking at my game shelves, seeing the game splendor. Today, I was thinking about Splendor, a fast, elegant strategy game. You're collecting colorful gemstone tokens. You use them to buy cards that, well, each card you purchase makes it easier to buy better cards later, so you're growing an economic engine that grows stronger as you play. The goal is to build the most valuable collection of cards, earn prestige points. Like a lot of games, victory points. Turns are quick, simple. You just take gems or buy a card. Some of you will have played Splendor, but it's a game that I think just about everybody would enjoy, 30 minutes long, 2-4 players, one of the quickest, easiest strategy games to learn. If I didn't actually give you good ideas last week, you could just try Splendor this week, and if you enjoy it, by the way, there's also Marvel Splendor, which keeps the same addictive gameplay, but it adds, of course, Marvel superheroes, villains, and Infinity stones. That one might even be more alluring to the kids than just plain old vanilla splendor, of course, to Marvel fans, as well. Well, there I am going back to games again, still with one foot in last week's podcast. Speaking of the weeks as they go by, let's talk briefly about next week, very excited. It's our annual besties. All the stars are coming back out and joining back with you and me next week. It's our besties. Cameos aplenty as we count down the year's top 10 podcasts for Rule Breaker Investing. Morgan Housel and Randi Zuckerberg will be rejoining Shirzad Chamine, Sam Horn, the list goes on. I'm really excited. I hope you will be, too, for one of our best, ironically, one of our bestie podcasts every year, next week's besties. Something old, something new, something borrowed, something blue.

As I thought about how I wanted to kick off this week's podcast with something old. I was just thinking back to some of my favorite series and podcasts I've done over the years. One of them is mental tips, tricks, and Life hacks. Done a bunch of those. Another is pet peeves. Done a bunch of those. Then, pet perks, which was suggested to me by a visionary listener who appreciated all my pet peeves, but thought, hey, there are some good things out in this world as well. What about Pet Perks? We've done those too. I thought for something old, I just revisit one of each of those three. These are some of my favorite past. Life hacks, peeves, and perks. I picked one of each. Let's get started something old. The first one, I'm going to lead off with a life hack. This one came from March 1st of 2017, which is Mental Tips, Tricks, and Life Hacks Volume 3 for those keeping score at home. I call this one, two things each time you walk into your room. Here we go an old life hack that I hope still feels good. This one I'm thinking about one of our Motley Fool members, somebody very admirable, one of those really good people in the world, good at business, came up to me as an investor at one of our Motley Fool Fool Fest meetings with members. He told me years after I did this in 2017, he was still using my two things each time you walk into your room approach. This has really nothing to do with investing, but I just love that that particular member grabbed onto this one, held it, and had still used it years later. Maybe you will, too.

This one comes from my own experience, and I just learned it over the course of time. One of my poor habits is the tendency just to take whatever I wore yesterday and just toss it onto a chair nearby. Then that happen the day after that, and maybe the day after that, as well. I don't know if you do this, too, but you end up with clothes piled up, and you can't find the belt that you're looking for because it was worn three days ago. Maybe I'm speaking to you. Maybe you understand where I'm coming from. What I developed was a very simple mental approach to getting better at this. I simply call it my two things approach, two things. If it is not necessarily about your garments. It could be anything. It could be as you walk into your office or in any common area for you. Let's say a place you spend a lot of time in, in your house or your place of work. If you find that it's not as kempt as it should be, here's the two-things approach. Every single time you walk into that room, you train yourself. You're going to pick two things up, and you're going to put them back where they should be living. Maybe the clothes hamper or maybe a book back on a shelf, whatever it is, it's always got to be two things.

Don't start faking yourself out. Don't make it four or five things. Because if you start thinking it's five, then you're going to start cheating and not doing it because you'll be like, I don't want to have to find five things again this time. It creates a self-defeating loops. It's only ever two things. You just put them back in place. Over the course of time, you're going to find that areas that were once almost inaccessible to you, the person who is living in it become not only functional but actually sometimes quite lovely because you've taken the time to put a process in place in your life that is going to create better solutions than if you hadn't done it in the first place. That's the two-things approach. It reminds me there's a book called Integrity by Henry Cloud, which I love. I read it more than 20 years ago. He has a chapter in there about "Act like an ant.": This is an act like an ant mentality. Ants can't build those ant hills right away. What they do is they just pick up a crumb, drop it, keep moving another crumb. We build things incrementally. Just to tie this back briefly to an investment thought on a largely non-investment-focused podcast this week, often people don't realize they can do the exact same thing with buying into a stock. Or selling off a stock. Too often, I think we train our minds to think all or nothing, buy or sell, but acting like an ant and moving incrementally can often be a more effective way to invest dollar-cost averaging, if you will. Anyway, there's my two-things approach.

That's a mental tip, even a trick, if you will, a life hack. Feel free to swipe it. From that mental tip trick, or life hack, we now go to an old pet peeve. One of my favorites, this one from September 15th of 2021. It led off Pet Peeves Volume 6. This was pet peeve Number 1, and it's the phrase, "Retail investor." Now, I've heard this phrase a lot over the course of my life. Perhaps you have, too. I don't think I've ever used the phrase myself. I wouldn't describe myself as a retail investor. I don't walk around saying, The Motley Fool membership, we've got some retail investors. Or to you, my dear listener, I wouldn't refer to you as a retail investor. It's not a term that I would adopt for myself. I would say I'm an individual investor, maybe a private investor, but that phrase retail investors has always bothered me a little bit, and the bother has grown over the course of time. Let's start, first of all, speaking of defining terms by defining our term because why are people using the phrase, "Retail investor?" Where did that come from? I went to another excellent website on the Internet. That would be dictionary.com, which has lots of definitions. I thought, Let me just look up retail, just to remind myself of what this word means. Of course, it's a noun. Retail is the sale of goods to ultimate consumers, usually in small quantities. It's also an adjective. Retail, as in say, retail investor. As an adjective, retail is pertaining to or connected with or engaged in sale at retail. All of a sudden, I realized the reason we're being called retail investors is because we were the ones who were sold to. Back in the old days, especially when the world was pretty much down to just brokers and clients, we were the client, and the broker was put in the position by his or her firm to sell their ideas to us.

Therefore, you and I are retail investors. Never mind that the quality of the merchandise being sold to us at different points may have been good or particularly bad, like penny stocks. Largely, it comes down to the motivations, of course, of those financial professionals in our lives, and there are many good ones. There are also many bad ones. But anyway, you and I were being sold to. Now that we've established the why of the phrase, I then went on to google retail investor, and I started to learn more. I like this definition, this difference between institutional investor and retail investors to often opposed crowds. This one comes from Investopedia, and they say, and I quote, "A retail investor is an individual or non-professional investor who buys and sells securities through brokerage firms or savings accounts like 401K. I like that. I like that definition. I agree with that. Institutional investors, Investopedia goes on, do not use their own money, but rather invest other people's money on their behalf. That's a very lovely and elegant way, I guess, of creating two buckets here. You've got the retail investors, and you've got the institutional investors. What jumps out to me from Investopedia is the phrase, institutional investors do not use their own money. Sometimes I think, while retail investors, I guess, are looked down upon, sometimes belittled, as we'll hear in just a sec, it's worth remembering that we're investing our own money, not just getting paid to invest somebody else's money. I think there's a lot to be said for being a retail investor in that way.

Anyway, there's Investopedia. But as I look down to Google Search Results for the phrase, retail investor, Google Search Results has a section entitled People Also Ask. Some of the people also ask results on google for retail investor have phrases like, "Why do retail investors lose money? Do retail investors make money? What is the role of retail investors? So here again, I found something in these search results that I like. This one comes from a site I've never used wallstreet mojo.com, but this is how they write about the role of retail investors, and I quote. "The retail investor provides capital to corporations when other sources of financing seem difficult. Since they tend to invest for a longer period than institutional investors, they play a crucial role in building the stock market and thereby the economy of a country." I really agree with that, and I like that a lot. That makes me smile and willing to call myself a retail investor. But then I keep clicking around further on the Internet. I hit an article like this one from Oxford University. That's right. That Oxford, that one, and it's Said Business School, where one of its professors is liberally quoted in an article entitled Retail investors are amateurs in a high stakes market. They cannot win. Now, according to this professor, I'll just quote from the article here, and I quote, "Academic experts consistently advise private investors not to invest in individual shares. Retail investors will always lose money because they lack the education. Whereas financial professionals are well informed. That's what they do." Now we start seeing why the phrase retail investor, for me, anyway, is a pet peeve because it implies that you and I, who are actually investing our own money, and doing quite well at that, thank you very much. I think I'm speaking for a lot of listeners right now, a lot of Motley Fool members over the years. It's that we're second-class citizens as retail investors, we're rubes, yokels, bumpkins, the list goes on. We will always lose money in the words of this Said Business School Professor because we lack the education.

Financial professionals are well-informed. I beg to differ. I think it's very clear that there are good investors and bad investors in all different contexts. But to group everybody who's not an institutional investor and call them retail investors, apparently, these people who are associated with meme stock, the meme stock craze, yeah, that would be retail investors. I submit to you, by the way, that a tiny percentage of individual investors are even paying attention to the GameStops of the world or the so-called meme stocks. Realize it gets a lot of headlines. It's certainly something paid some attention in the past several years, but a really tiny percentage. This is all a side note, but a really tiny percentage of mom and pop individual investors are taking big risks in companies that I don't think have particularly good prospects and it's being called a retail investor revolution. Again, I will beg to differ. In conclusion, this pet peeve is not just the phrase retail investor, which I never use, and I don't think in those terms, but really so much of the baggage surrounding being an investor who's not a professional. Therefore, I guess, according to Professor K at Oxford, we are doomed to lose money always because we lack the education. There is something old, a past pet peeve. I don't want to end something old on a peeve note. Let's just share a brief pet perk before we move on to something new.

Here it is. This one comes from June 12, 2024. My first pet perk episode. This was Pet Perk Number 7 on it, and it's paying for someone in the line behind you. Again, pet perks, of course, the little things that make life better, the opposite of pet peeve. Back again to this pet perk, paying for someone in the line behind you. This used to actually be easy and it was almost impersonal back in the days. Do you remember these of toll booths and toll booth operators? These days, most of us are rocking the easy pass in one form or another. If we're driving long distance or even shorter distances, we maybe just go for the fast lane. We just blasted through that easy pass toll booth. It electronically records that we went through, caching. There are very few people who are actually at toll booths these days as operators taking money. I guess it still happens, but many fewer than once were. In an earlier age, that's how we got from one section of a highway to another. We stopped. We sometimes waited in line for 10 minutes to get up to line in the toll booth and we would say to the tollbooth operator, here's my quarter or here's my buck or whatever. You throw it into a little machine or hand it to a person. But if a person was there, you could say, by the way, here's an extra dollar for my friend behind me. Say hello. The trick was, of course, you didn't know who is behind you. You probably didn't know who that person was. But as they come up, you could look in your rearview mirror as you pulled away. Very briefly, you'd see a surprise on their face, a smile and wait. They'd realize, oh, my gosh, they paid for me and I don't even know that person. That's something my parents used to do and taught me when I was a kid and it was fun to watch. But now it's 2025 and this same approach, by the way, works just as well at Chipotle. This works just as well at Starbucks. You can simply, ahead of time, turn to the person behind you and say, you know what? Random act of kindness time, I'm paying for you. I tell you, you will raise both an eyebrow and then a smile whenever you do this. Generosity is contagious. Usually, when you pay it forward for somebody else, they're probably going to pay it forward for somebody else, and the world will get a little bit better paying for someone in the line behind you.

Of course, it's free for them. Sure. What a great benefit for them that they got to be lucky enough to be behind you in the line that day. But as we all know, and I talked about this on my Gratitude 2025 podcast just a few weeks ago, the personal satisfaction that you and I get making small gifts like that, small random acts of kindness, could be an act of pure selfishness because it's so personally rewarding for you and for me to do that, but, of course, it isn't pure selfishness. It's really just pure connection. Paying for someone in the line behind you. Try it this week, this month. If you do, write us. [email protected] is our email address. Let me know what happened. I'd love to tell a story or two at the end of this month in our closing December mailbag. Paying for someone in the line behind you. That, too, is something old. Next on to something new. With my book, Rule Breaker Investing, coming out this year. It came out in September. I did a lot of podcasts. I continue to do a lot of podcasts. I love talking about this subject and getting as many people in the world invested in the best way as possible. That really gives so much meaning to me and the days I pass on this planet. I've been doing a lot of podcasts and one of my favorites is called Boxes and Lines. If you want to hear me on that podcast, it was the October 2nd edition, just a couple of months ago on with hosts Ronan Ryan and John Ramsay. They asked this question during the podcast near the end. They said, David, if you had the power to create a new financial holiday, what would it be called and how would people celebrate it? I'm not very good on my toes answering questions like that one. Fortunately, it was part of a pre-interview.

They let me know they were going to be asking me that question, which allowed me to premeditate a much better answer than I would otherwise have given. Here is the thought, a new thought. What if we got companies to donate shares of their companies to the general public? Hey, Netflix. Would you just earmark 100 shares this year for National Share Day, our new holiday? Microsoft, by the way, you're really big. How about 1,000 shares of Microsoft? How about every other company that's public today? What if National Share Day was basically a national lottery that had every American winning randomly one share, one of those shares donated by all of our public companies? First of all, to make that happen, everybody is going to have to have an account. I think there's a free open account before National Share Day happens and that's going to get everybody in America included, everybody in America with an open account. It's easier than ever before these days to open up an account with small amounts of money you can get started. But this would inspire many Americans to open accounts because they're going to be getting a randomized share of some public company. Each year, with this one holiday, companies are just sharing, again, a little part, a small percentage of their ownership to all Americans. You get to wake up. It's going to be like Christmas morning, but it's not in December, and you're going to find out whether you got a Berkshire Hathaway a share or maybe some rinky-dink penny stock because maybe it wasn't your year that year. Everybody wins a share. Everybody gets a single share. There's about 320 million Americans. We're going to need to have 320 million shares and I think we can do that each year. I admit I haven't fully thought this out and I haven't further developed this idea since introducing it just a couple of months ago. It remains very much an untested raw idea, but I think an inspiring idea, an idea of goodness. It will create a little bit of dilution every year for companies. As you get your share, you're going to get to find out as Americans, you're going to be reminded of what has built this country. Which, by the way, is business and capitalism done right. National Share Day, when you think about it from this angle, it's really part of our national heritage.

The private sector is, always has been, and will be much larger than the public sector in our country. What you and I do most of us every day is we go to work for companies that are trying to provide a product or service at a competitive price that is worth buying and that improves the lives of customers who, in so doing, enrich the companies that do the best job. That's really the dynamic that's been in place for this country for a few hundred years. I think what I also love about National Share Day is it's going to be a charitable act of all of our nation's public companies to earmark a certain number of shares, dilute themselves a little bit, and whoever's organizing and running National Share Day is going to want to make sure we do have 320 million shares. It's going to need to be adjudicated and run well. I'm not saying this is about to start this year, but I truly believe for anybody who feels so motivated, this could be an amazing financial holiday and a reminder that all Americans can be invested in something that goes up over time, the economy and the stock market. I think everybody owning something, everybody noticing, we'll give you eight hours off that day, as well.

It's a national holiday, as well. But it's going to give you a relationship each year with a new company and build a little bit of a portfolio. We're also living during a time now where Michael Dell just set aside a lot of money as a form of match to enable every kid who's born going forward to start with some money in an account. I feel as if National Share Day works in concert with these kinds of efforts to get everybody included, everybody invested, and to recognize the great benefits that companies every single day provide in our lives and remind every American that you and I can be part owners of those things as well just as my dad convinced me of that when we went for more chocolate pudding at the age of five in our local grocery store, when dad said, hey, kids, we own some shares of the company that makes that chocolate pudding. We were just off for Saturday groceries that morning and he said, let's go get more chocolate pudding. That was a great way dad connected his kids with the idea of being owners within this society and the incredible miracle and gift that there would be an economy and a stock market that we could all participate in. National Share Day, I'm stumping for it. I won't be running it. If anybody wants to pick up the ball and run with it a little bit, I'll be happy to play with you here. Let's get it going. Something new.

Now on to something borrowed. I mentioned, of course, my book that came out just a couple of months ago. I think a lot of people have noticed that and I'm really happy to see some fantastic reviews and some great plaudits and comments from longtime Fools and brand new people who'd never heard of the Motley Fool before and everybody in between. I've just so loved having written that book and then seeing it out there in the wilds and bookstores across the country, maybe under some trees this month, as well. That's been my highlight of the year 2025. Something that not as many people may have noticed is that if you go to rulebreakerinvesting.com, there is a free downloadable bonus chapter to Rule Breaker Investing. I thought for something borrowed, I would just read a short section of that as a quick reminder that it's out there. If you're a fan of the book and you want to read the additional chapter, which, by the way, is called Rule Breaker Investing Mailbag, because I decided to make my bonus chapter shaped right alongside what we've done in this podcast, which is after I've put out podcast to you, I hear back from in Mailbag, your questions, your thoughts, and I react to those, that's exactly what I thought to do with the bonus chapter of the book. For people who have already read the book and have additional questions, it's an FAQ. That's what the bonus chapter is. The opening section is the one that I've thought to read for Something Borrowed. It's not very long, but it's entitled, Won't Artificial Intelligence do all our Investing for Us? Let me go ahead and read my answer to that question in the Rule Breaker Investing bonus chapter.

Again, won't artificial intelligence do all our investing for us? "If you've been dollar-cost averaging into mutual funds, index funds or ETFs, you're already used to someone or something doing your investing for you. Maybe that intelligence is another human or maybe it is algorithmic. Sometimes it's genuinely intelligent. Actual results may vary. Objects appearing in your windshield could be closer than they appear, especially your losses. Having your investing done for you is already common. It won't take much for those decisions to be driven by AIs going forward instead of people or quants. Cheaper, faster, more efficient, I could see it. For those who want that, I'm all for artificial intelligence running part or all of your portfolio. Just be sure you're tracking two things. One, how you're performing versus the market, and two, the fees you're paying for the privilege." But here is the better question. Why let the machines have all the fun? I love investing too much to hand it off. It would be like letting AIs draft your fantasy teams, finish your crosswords, and watch movies for you and tell you how they end. Sure, AI already enriches my life in dozens of ways, but I'll never let it rob me of the lessons or experiences, especially the hard ones, that helped me grow. Pull all the stunts you like, ChatGPT, just don't stunt me or my kids. Which brings to mind the great Woody Allen line about speed reading. "I took a speed reading course and read War and Peace in 20 minutes."

It involves Russia. Well, I don't want my own learning and wisdom acquired from my three favorite topics investing, business, and life to consist of, and it involves Russia outcome. Do you? We're all different. Maybe your family or some of your friends don't care to learn much about investing, business, or even life, though I hope not that last one, and if so, that's fine. Mileage varies. We're each unique creatures with our own set of strengths, weaknesses, contexts, purposes, but for me, and I suspect for you, these are among our more important choices on this planet. Why give away the joy and power of shaping them ourselves? When it comes to purpose, decisions, life direction, I want us each to be intentional with the key life choices, money included. That's my section from the bonus chapter entitled 'Won't Artificial Intelligence Do All Our Investing for Us? ' Before we move on to the final section, something blue, I just want to mention the other sections in that bonus chapter. I won't be reading them. I'll just share with you the topics. The next one is, how could URI possibly outperform artificial intelligence, followed by, what do you say to people who believe the market can't be beaten, followed by our all so called overvalued stocks, rule breakers, and the next section after that, I bought my first rule breaker stock, and it's down. I speak to that in that section, followed by I'm the rule breaker in my family or friend group, but how do I get others to understand or at least care? Then right near the end, I threw in a few more sections.

What does the Fool Community Foundation do and getting kids started? Those are the topics covered by the 11-page downloadable bonus chapter, and if you find yourself inspired, yeah it's free. Just join us at rulebreakerinvesting.com before we move on to something blue and to close, I am reminded of two things, and that is first, if you've read the book and you have additional questions, and maybe I didn't cover your question and one of the ones I just shared there, I will keep enlarging and keep adding and tweaking this bonus chapter. I'll probably have a final version sometime next year, but if you have a compelling question that you really think should be spoken to in the bonus chapter, reacting to the book and its contents, and of course, the best questions, the ones I'm going to feature, are going to be broadly asked by many different people. If you're asking a question that's maybe only pertinent to you, that's probably better for this podcast, not for a bonus chapter for the book. But if you feel like it really addresses the book in a way that many people would benefit from, I would love to have your question and maybe add it to our bonus Chapter Version 1.1. Just a reminder, our email address is [email protected]. If you want to ask more questions, either for the downloadable bonus chapter or of course, just for the mailbag on this podcast every month, and I'd be remiss if I didn't mention that the greatest gift anyone can give to me who's read the book is just to write a short review and put it up on Amazon. This is true, by the way for any friend of yours who might be an author, if you've enjoyed their book, or even if you haven't liked my book, if you want to give me a two star review, just so long as you explain it, I'm fine with that too. But I think every author benefits hearing back from people with the stars they want to throw our way and the thoughts and comments that would help other people decide if that's the right book for them. If you're a Rule Breaker investing fan of this podcast and or the book, whether you want to review this podcast on Spotify or Apple, or whether you want to review my book Rule Breaker Investing on Amazon, I would really appreciate that. That would be a nice holiday gift to me.

This is the 10th volume in this series. Each one has unique points being made, Old, News, Borrowed, and Blues, and this one is, of course, therefore, a first timer, and it's blue, so it needs to relate in some way to the color blue, and I thought, let's talk about Bed Bath & Beyond. This company, once a giant, it was a category killer. It was a home goods juggernaut. If you're an American, I know you were there at least once. You're familiar with those endless aisles and the famous notice, what I'm about to say, the famous blue and white, 20% off coupons that were stuck in people's kitchen drawers for decades. Bed Bath & Beyond felt like a permanent fixture on the American business landscape, but by April 2023, two years ago, ticker symbol BBBY, filed for Chapter 11 bankruptcy, began shuttering all its stores. If I have it right, 360 of its flagship outlets and 120 buy by baby locations as well, so what went wrong? Well, first, they were too slow to embrace e-commerce and the obvious change in consumer habits as the world increasingly favored buying stuff online instead of in big box stores. When those online rivals surged, Bed Bath & Beyond just kept trying to do more of the same, generally, big stores, huge assortments, even as foot traffic began to shrink and shelves began to empty. What was their core advantage, which was their size and selection became a liability. Second, there were financial missteps and strategic drift. In 2019, they brought in new leadership who swapped well known national brands for lower margin private labels. They slashed some of that couponing, tried to tighten margins, but those moves drove away many of the loyal customers who came for those familiar brands and deals or maybe the back to college week where they got all their stuff for their dorm rooms.

Finally, decades of debt, buybacks, delayed reinvention. Once valued in the tens of billions of dollars, by the end, Bed Bath & Beyond's financial situation was dire. It had an inability to pay its creditors, collapse of rescue deals, a lack of inventory, and tragic loss of confidence from suppliers and shoppers. That in a lot of ways explains how once a stable of American homes, the store where you thought you found something useful, surprising or cheap every time you went in, now is going to live only in memory, in empty real estate, and in lessons, and that will make some people blue. That's in some ways, the blue for Bed Bath & Beyond, but for Rule Breaker investors, there's an extra chapter to this, which I really haven't talked about for the longest time because before Bed Bath & Beyond became a meme stock, and then went bankrupt in the last few years where by the way, most meme stocks are typically often headed, eventual bankruptcy, it was one of the first ever trades placed in the Motley Fool portfolio. When we launched on AOL in August of 1994, Day 1 was August 4th, 1994, and we came out with four buys and two sells for the original Motley Fool portfolio, $50,000 of our own money, and we invested it from that day forward. Right in front of America, anybody who wanted to tap into America online, eventually, our website, over the next nine years, we invested that portfolio. It was free. It was a free portfolio, and on Day 1, I mentioned we had four buys. What were the two other trades we had on Day 1? Well, they were shorts. We were shorting two companies, and one of them was Bed Bath & Beyond. Yep, we actually used to short as Rule Breaker investors. It wasn't the strategy that I ended up continuing with, but I want to explain a little bit more about that.

Now, for many people, they don't really know what shorting is, or a lot of people haven't done it before, and so you're not really clear maybe how it works. Let me briefly explain for those new to this. It's possible to make money when stocks drop as opposed to only making money when stocks go up over time. If you short sell a stock, you can sell it first and then buy back later at a lower price so you've sold high and you've bought low, reversing the classic phrase, buy low, sell high. You sell first, and then you buy back later, you hope at a lower price. A lot of you will be wondering, well, how could I possibly sell something that I don't own? The answer is when you short sell a stock, your broker borrows shares from somebody else's account. Somebody else temporarily has their shares borrowed from their account, and you literally just sell those right then. You get money added to your account, but you're going to have to pay that back later to exit that position and your goal, of course, is to pay less than you made. You're hoping the stock goes down, so you buy it back and return those borrowed shares. The broker does back to the client who had the stock. That's how short selling works. From the very first day of the Motley Fool online, we were shorting stocks, and Bed Bath & Beyond was one of our two shorts. If you search hard enough on the Internet, you can find this. I recently re read our original short sell report, and we were noting at the time that Bed Bath & Beyond was a darling stock, a darling retailer. It was growing. It had grown double digits for years. It also had outstanding same store sales growth.

Things didn't look blue at all for Bed Bath & Beyond, but what we were noticing is that while sales were growing, let's say, 40% a year, earnings, not so fast. Earnings were only growing at, let's say, 23%. We were seeing sales running higher than the earnings themselves, which meant margins were declining. On just a humorous note, this is all just ancient history now, but it was fun to go back there and see this blue moment for something blue, which was us looking at the blue and white coupon company and saying, on Day 1, "Hey, we're the Motley Fool." Tom and David Gardner, we're introducing ourselves, and also we're shorting Bed Bath & Beyond. I'm happy to say for us and our investors back then that seven months later, Bed Bath & Beyond had dropped from 29 to 24, a drop of about 17%. The S&P 500 over that exact same period was up 8%. It was a pretty great call for us as investors, the market was going up, but the stock that we were hedging against the market's risks by playing a stock to drop, that stock actually dropped 17%. We did close out that position buying back at 24 and exiting it. I just want to say in retrospect, that a few years later, we eventually stopped selling companies short, even though I think we had a pretty good approach, and we had some pretty great results and some fun stories around that.

But ultimately, I started to realize that while this strategy can be used to good effect to hedge, most of the time, most years, of course, the stock market goes up, the most you could ever make on your short was, well, whatever you put into it, because let's say you sold it initially at $5,000 or so of your own money, you're hoping eventually to pay zero if the stock were to go to zero, and so you'd make $5,000. You could make what you invested. But I started to realize, if you go the other direction long, and you play the long game and you find not just good stocks, you find great stocks, you find the best stocks on the market, which I began to call Rule Breakers as I began to recognize the patterns around what wins and started to recommend these companies, I started to realize, if you put $5,000 into these companies long, you will make a lot more money than you can ever make with your shorts. I started to exit the short sale game. I think in that original portfolio, we stopped short selling forever a few years later, having realized, I think that important lesson.

There it is. Bed Bath & Beyond just as its own story, but then our special chapter in the early days of Bed Bath & Beyond and in the earliest days of The Motley Fool, something blue. Well, that's pretty much it this week. What I love about something old, new, borrowed, and blue is I get to just go for a hodgepodge. We have some points made this week that are from a personal level to a national level. To review something old, well, we talked about two things each time you walk into your room. We talked about the phrase retail investor, what it really means and where it came from, and then, of course, we talked about a pet perk that would be paying for someone in the line behind you. Those three things together, something old, previously presented on this podcast. Something new, well, how about National Share Day? Am I right? How about it? Something borrowed. I would just say, feel free to let your AI do as much of the investing that you don't want to do as possible. In fact, have AIs do as many of the things that you don't want to do as possible. Go ahead. You have my permission, and make sure that you are actually doing the things that you want to do, the things that will result in the best version of you. For me, anyway, that's continued to be making my own choices for my investments. Of course, something blue, those blue and white 20% off coupons for Bed Bath & Beyond ultimately led to the blues. For investors though, not if you're willing to look at things from the other direction as a patient, quiet, short seller. Yet, I gave up that long ago once I realized that your max gain in a short is what you put into it in the first place, and your max gain in a long is way more.