In this episode of Motley Fool Rule Breaker Investing, Motley Fool co-founder David Gardner welcomes Motley Fool analyst Tim Beyers, and together they go back exactly 10 years—to the week—to revisit five companies picked in May 2016, scoring how they really did and, more importantly, asking why.
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A full transcript is below.
This podcast was recorded on May 6, 2026.
David Gardner: Ten years ago, May 4, 2016, to be exact, I launched my fourth five-stock sampler, five winners in a thinking world. Michael Bloomberg had just given a commencement speech to the University of Michigan, and my pal, and longtime Fool Morgan Housel had excerpted in his social media feed this line from Bloomberg, and I quote, "For the first time in human history, the majority of people in the developed world are being asked to make a living with their minds, rather than their muscles." Bloomberg had said. It was time for me to pick five stocks that would seem to do well in an increasingly thinky thinking world.
Well, today we fire up the time machine 10 years later to see what actually happened through recessions, pandemics, acquisitions, and all the surprises a decade can deliver. We're going to score our returns against the S&P 500, then ask the only questions that matter. What do we get right? What do we get wrong? What can we learn from that? I've invited back my longtime fellow Rule Breaker Tim Beyers to bring the goods. Some numbers, some stories. We'll talk about the lessons you can use on your next 10-year journey, five winners in a thinking world 10 years later. Only on this week's Rule Breaker Investing.
Welcome back to Rule Breaker Investing. A delight to have you with me for this episode of 10 Years Later, which we're about to get into, but before we do, I want to mention next week's podcast. It's my birthday. It's my annual birthday present from you to me. It's what you have learned from David Gardner. I've done this every year, the last several. If there’s something that you’ve learned from me from this podcast, from my book, from our business, The Motley Fool, or any random board game suggestion I may have given you. Whatever you may have learned from me, I would love to hear that back. You can email us [email protected]. You can also tweet us on Twitter/X @RBIpodcast but specifically, best are probably emails here, and if in your subject line, you say what I have learned or something to that effect will know to route it right to me for next week's podcast. We are recording in advance of my actual birthday, which is May 16, I'll be turning 60 in just a little less than two weeks, but next week's podcast is my What You Have Learned, and I'd love to hear a story or a point or an idea. Again, our email address [email protected]. Thank you so much in advance.
Every 10 weeks, we open up a time capsule on this podcast. It's a past five stock sampler hitting its 10-year birthday, and this very week, in 2016, I picked five stocks that I hoped would benefit from an increasingly cerebral world, five winners in a thinking world, and now here we are. Doing something you're going to rarely see on financial TV or podcasts or really any medium. We're going to review the results 10 years later, the very week of. As already foreshadowed this week, we're looking at Number 4 of the 35 stock samplers featured on this podcast over the years. We're going to score each pick equal weighted from the original air date. We're going to see its return, compare it to the S&P 500 over the same span, and then comes the real work done this week by longtime fellow Fool Tim Beyers, who's joining shortly with his best answer to this question for each of the five stocks. What is the single biggest reason this stock did what it did? We're going to discuss that together, what this decade actually taught us as investors. We’re going to finish with the samplers’ overall result, probably a lesson or two, maybe a quick go-forward view on a couple of these companies. If you're new here, that's our 10-Years Later episodic series, and that's what we're doing this week. We're not just keeping score, by the way, though we are. We're all learning together how, and why Rule Breakers win. By the way, sometimes lose, too. Over the long game, playing stocks the only way that counts, even if so few people seem to do this. I want to now welcome back Tim Beyers to Rule Breaker Investing. Tim Beyers.
Tim Beyers: Hey, David, it's great to be here. Thank you so much for having me on. I know we're going to talk about some stocks. We're going to talk about where I am. But I do want to answer quickly. Everybody else is going to email in. I'm going to give a template for people if they want to email in a lesson from you. I'm going to give one you might not expect of what I learned from you, which is this: Rule Breakers can come from anywhere. I mean, anywhere. There are. I will refer you back. If you've been a longtime Rule Breakers member, you may remember two stocks that made it to the Rule Breakers scorecard that I don't think anyone would have ever expected. One was an airline, Virgin America, and that was a winner because it got taken out by Alaska Airlines at a pretty significant premium. We had an airline as a Rule Breaker, and second, is Yahoo. Yahoo was, at the time that we recommended it, a brand that seemed like it was on the way down. What the pitch was, and I like that you took this to heart, David, is you said, "You know what? Sometimes, a rule-breaking leader makes a Rule Breaker," and we thought Marissa Mayer, at the time, was a rule-breaking leader. Now, it didn't work out exactly the way we wanted, but it did meet the market. We did make some money on it, but I still believe that. Rule Breakers come from anywhere. Do not limit yourself.
David Gardner: I love that. Thank you, Tim, and given I was just checking, you started at The Motley Fool in December of 2003, so here we are 22 plus years, and all that you and I have gotten to do and learn together. This is just the latest chapter, and thank you for that lovely thought, Tim. Maybe one more question before we get started with these five stocks. Where are you right now?
Tim Beyers: I'm in Bethesda, Maryland, at Foolapalooza, which is our annual meeting for employees of the company. It's a great gathering of old friends, new friends, and we're talking about things that matter to our members, that matter to us as investors. Naturally, a big topic right now is AI, and how we can use it.
David Gardner: I've heard something about that.
Tim Beyers: How we can improve the experience for members using AI. I'm a firm believer in AI as an enhancer, not a replacement. I think AI plus human ingenuity, human creativity, human expertise, and curiosity is arguably an unmatched combination. That is where my focus is. I am going to take the more optimistic view, I think. If you think of AI as a replacement, I think, you are missing a massive opportunity in front of you, and so that's how we're thinking about it, and what we're talking about at Foolapalooza. It's always a great time. It's fun to see friends. It's fun to talk about the future of the business, and we always come out of it, refreshed, a little bit energized, and I'm looking forward to it.
David Gardner: We sure do, and thank you for sharing that, Tim. We're all trying to do the best for our members, and that's been the focus of our company from Day 1. I love that you're having that conversation here in day. Well, we'll just say Year 34. [LAUGHTER] Well, speaking of the past, the date was May 4. May the 4th be with you, by the way, 2016. Literally 10 years ago, this very day, we're recording this sampler with five winners in a thinking world. Feel free to go right back and listen to it, by the way, Intrepid, fellow Fool listeners. It's right out there on Apple Podcasts, Spotify, wherever you find your podcasts.
The five stocks, we're going to cover them in order, were Celgene, Walt Disney, Splunk, Twitter, and Zillow. Some really fun words there in those five. What the market did over the same 10-years, and I always just use the SPY ETF to measure this, ticker symbol SPY, it's up 249.6% as we speak. It's more than tripled over these 10 years that week to this one. How did I frame up these five stocks? Why this theme?
Well, as I mentioned at the top, following Morgan Housel on Twitter, I'd come across something in his feet. He'd been reading an article that was basically a summary of Michael Bloomberg's commencement speech to the University of Michigan graduating class that spring, and Morgan pulled out a few really key lines that struck me. Let me just start with a short read of what Bloomberg said and I quote. "Think about the global economy. For the first time in human history, the majority of people in the developed world are being asked to make a living with their minds rather than their muscles. For 3,000 years, humankind had an economy based on farming. Till the soil, plant the seed, harvest the crop. It was hard to do, but fairly easy to learn. Then for 300 years, we had an economy based on industry, mold the parts, turn the crank, assemble the product. This was hard to do, but also fairly easy to learn."
Then Bloomberg went on, you can picture all those happy University of Michigan parents because, well, now they don't have to pay tuition anymore, but also the new soon-to-be grads listening to this next line, and I quote. "Now we have an economy based on information, acquire the knowledge, apply the analytics, and use your creativity. This is hard to do and hard to learn." Bloomberg said, "Even once you've mastered it, you have to start learning all over again pretty much every day." There was more to it, but that was the gist. I was saying on my podcast 10 years ago, by the way, that almost feels like it could have been said today about AI, Tim, but we'll get to that in a sec. As I was saying on my podcast 10 years ago, while the information age is important, and while certainly his business, Bloomberg, is all about information at your terminal, truly, I think, what we practice every week right here on Rule Breaker Investing is thinking, and thinking about thinking, and it's really the creative use of information.
Tim Beyers, that led me into this five-stock sampler. Tim, let's you and I strap ourselves now in because we're going back in time this week into the Rule Breaker Investing Time Machine. Let's strap it. Doc No. 1, Celgene, ticker symbol CELG. Celgene was, note the use of the verb tense, Celgene was a biotechnology company focused on developing treatments for cancer, especially blood cancers, led by its blockbuster drug Revlimid. It combined deep scientific research with strong commercial execution, build a powerful pipeline of future therapies. Back in 2016, it stood as a dominant innovation-driven biotech leader operating at the intersection of science, data, and lifesaving medicine. I like, Celgene, Tim, as a category-leading biotech driven by intellectual capital, real world impact. It was perfectly aligned with what I saw as a thinking world company. Tim, any initial reactions of yours to Celgene either back then or now?
Tim Beyers: My major reaction to it, David, is disappointment because Celgene, we're going to talk about this, but got taken out by Bristol Myers Squibb. I mean, ultimately, we like to invest in the world's best companies, and sometimes other companies recognize that this is one of the world's best companies, and decided, we want that inside of our company. A little bit of disappointment there, a little bit of regret because I wanted that on the scorecard for as long as we could get it.
David Gardner: Thank you, Tim, and that theme of a little bit of disappointment may come back more than once before we're done this week. The performance of the stock. The stock was trading at $100.90. Right about 101, when I picked it 10 years ago this week. As Tim just mentioned, the year was 2019, it was bought out by Bristol Myers Squibb at $108.24. It had a return over three years of 7.3%. Not great. The stock market over the exact same period, 51.6% up. Again, our stock up about 7. Market up, Tim, about 51, I record a -44. It's in the loss column for Celgene. It was up a little bit over those three years, but the market was up a lot more. Tim Beyers, what do you see as the single biggest reason this stock did what it did, and what happened?
Tim Beyers: I think it's diversification here, David. This is a Peter Lynch term, Bristol Myers Squibb, and taking out Celgene was getting an electric company. But in order to get that company, it had to do some things that I think, gutted the company just a little bit, so it did get trapped. I would say the headline here is it got trapped inside a legacy pharma, without enough growth opportunity. The growth opportunities just got a little bit limited, and that hurt it over the long term.
David Gardner: This is a company Bristol Myers Squibb, obviously, these days, we're talking about well, it always was Tim, a big company. Just checking the market cap for ticker symbol, BMY Bristol Myers Squibb these days, Tim. Over $100 billion. It's not a mega-cap. This is a large tech pharma company that has diversified.
Tim Beyers: It is diversified, and I have to say, when you look back at this, so let's take a couple of points here from the story here. If you look at Bristol Myers Squibb, if you took on the front Celgene, you decided, you know what? I want to have some Bristol Myers Squibb. I think, you've been disappointed, and just for context here, over the three of the last four years, you've had declining gross margin, you've had declining revenue, just a little bit hard to take. Some of that starts from back around the time of this acquisition, because I mean, it certainly has been consequential. Revlimid is obviously one of the big success stories there. That was a treatment for multiple myeloma. But then, as soon as it got absorbed into Bristol Myers Squibb, the consequential nature of such an amazing therapy is just different once it is housed inside a much bigger company, and look, I mean, there were other pieces you mentioned that Celgene was a company that had different treatments, particularly for blood cancer. It was very good in providing multiple treatments.
One of the things we loved about Celgene at the time, bear in mind, Karl Thiel was our biotech expert. But even a high, as the plebeian biotech investor here, could see something that Karl would just keep reminding us about Celgene, like some other big biotechs that we still have on the Rule Breakers Scorecard, Vertex comes to mind, for example, is as these companies gain scale, they have a huge pipeline of options. That was one of the beauties and why Celgene was such an attractive buyout target for Bristol Myers Squibb because they didn't just have therapies that were generating cash flow now. They had things in the pipeline that promised to deliver cash flow in the future. But as a consequence of getting this transaction over the line, David, the FTC said, you know what? You got to sell some stuff, and so, they sold Otezla, for example, to Amgen for $13.4 billion. That's good. I mean, that's cash, and cash is certainly good. But cash is never just a straight-up substitute for something that can generate more cash on an ongoing basis. I think, the way this transaction went down, David, maybe it was more of a destroyer of value than it was a creator of value, and to be fair, I don't know that that was so easy to see.
David Gardner: Well, I really appreciate that breakdown, and looking back over this now, Tim, I was just checking it. The actual buyout of Celgene was a $74 billion cash-and-stock deal. I mean, thinking about Bristol Myers today, with a market cap of 117 billion, its stock. By the way, Bristol Myers has not been great over the last five years. It's slightly down with the market well up over the last five years. It really, in some ways, was a turning point for Bristol Myers Squibb, and one that hasn't been great. They paid up for a great franchise. They're not worth that much more than it now, 6, 7 years later. Just a quick thought there.
Let's maybe now move on to stock No. 2, a little bit more interesting to Rule Breakers, maybe, than Celgene, which is not exactly a word that comes trippingly off the tongue or a company recognized by the man on the street, so-called, but certainly was a very fine biotech company now, part of a larger company that has been underperforming. Thank you for that. Tim, let's move on to stock number. Two, the Ticker symbol is DIS, and the company is, of course, Walt Disney Company, a global entertainment company spanning film, television, theme parks? Yeah. And sure, streaming built, by the way, on some of the most valuable intellectual property in the world, from Marvel to Star Wars to Pixar. It combines storytelling and technology and physical experiences at massive scale, constantly adapting as media consumption evolves. Back in 2016, Disney was navigating the shift from cable dominance toward a more digital, more direct-to-consumer. Future. The reason I like this stock for this sampler, well, I just like Disney anyway. It's a world class creativity driven franchise machine that would just need to keep learning and evolving in a rapidly changing thinking world, I thought at the time. Tim, what were you thinking about Disney either 10 years ago or today?
Tim Beyers: I thought, and the headline here for me is that this is the uncomfortable pivot that was ultimately necessary, into the streaming world. But I have often thought, and I still think this is true, David, is that brand is one of the deepest and most valuable moats that you can find. I just think it is unequivocally true that Disney has an unbelievable brand. It just does. Like, all know Disney all around the world. You have probably engaged with Disney Brands multiple times per day. It really is incredible. You put it as part of the sampler. I have owned it since it, transitioned from Marvel shares into Disney shares, and I've never sold in that period now. I've underperformed the market as a result. Do I regret that? No. It is a great brand. I don't apologize for holding it for as long as I have.
David Gardner: Well, getting into Marvel back in the day, this was one of our great early picks in Motley Fool Stock Advisor, and it has been a big winner from that price. But as you're pointing out, Tim, Disney has not been a great performing stock, and over different periods, it's been a real underperformer. Let's just take a look at the numbers for this pick from ten years ago this week. Disney was at $103.67. That was the cost basis, right around 104. Today, it's right around 102. It's basically down 2%. Ten years later. Kind of shocking when you think about how important and relevant this company is, how beloved this company is. Yet, as you pointed out, Tim it's got a lot of different things going on. It's had to make some transitions and evolutions. This is a thinking world that we're living in, and entertainment has changed in a lot of ways and will continue to change. Just to finish the numbers then for my Disney stock pick, unfortunately, with the market up 250% and this stock down around 1%, that's a -251 in the loss column for this stock pick. Basically, the stock is flat over ten years, and the market has more then triple. Tim Beyers, what, in your mind, is the single biggest reason this stock has been flat over the last ten years?
Tim Beyers: I do think we have to come back to the uncomfortable pivot, but I'm going to take you to a date in time here, David, because I think this really informs the discussion, which is, believe it or not, March of 2019, Disney closes its acquisition of 20th Century Fox Studios for $71.3 billion, and I think that created an uncomfortable boat anchor, which is going to feel really weird when I talk about what the boat anchor was. I think what happened here, David, is that there was an uncomfortable pressure amongst Disney leadership. At this point, it is not Bob Iger. It's Bob Chapek. At this point. Remember that Bob Iger had retired. Bob Chapek had come in. There was different leadership here, and I think that leadership, Chapek in particular, said, like, We put all this money on Fox. What that meant at that time, David is, we have got to exploit the heck out of those Fox assets. That was really two things. It was a lot more Star Wars and a lot more Marvel. We got so much of both. That I think we saturated the market, and the market got tired. It really did turn on Disney.
Now, part of that, too, we have to mention is that during this period, you already mentioned this, David, but we do have to talk about it is that streaming was really cutting into the linear TV, cable TV. There just wasn't enough buying of cable bundles. Distribution became a real problem. At the moment that Disney was really doubling down on its most valuable content and exhausting its audience, it also said, and, Hey, look, we're going to take all of that stuff that is exhausting you and hype it through this new thing that we call Disney+. They priced that at such a stark discount that the money machine just dried up almost overnight. It was really hard to see how Disney was going to come back and start being the really aggressive cash generator. It had been, cash flow started to dry up. Since then, they've done some really smart things since Iger has come back. But I do think the leadership under Chapek of over-indexing on superheroes and Star Wars at a time when they had to figure out the transition from linear and cable TV, just really cost them, David.
David Gardner: Thank you, Tim, for that tour down memory lane. I had forgotten about Chapek and the way you explained the Fox assets and the need to monetize or drive profit, sometimes faster than you'd think from assets that could, get tired. There was a day where I maybe you two, Tim would go to every one of the next Marvel movies. But then there came even more than that, and I just didn't quite keep up in the same way. I was still a fan, but I do agree with you. How many times are we going to remake Spider-Man? But I guess people still want to see it, Bud. Anyway, we'll leave stock No. 2 right there for now. We're well in the hole after these two picks, particularly Disney going flat for 10 years.
Let's move on now to stock Number 3. Stock number three is Splunk. Ticker simple SPLK by the way, no longer traded. We'll talk about that in a minute. Splunk, a data platform company that helps organizations collect, analyze, and also visualize massive amounts of machine-generated data from their IT systems to cybersecurity log. To operational workflows. Its software turns raw data into real time insights, enabling companies to monitor performance, detect threats, and make faster decisions. Now, I'm using the present tense because Splunk is very much still around today, just in a slightly different form. Back in 2016, it was an emerging leader in the fast-growing big data and analytic space helping enterprises make sense of an increasingly digital world. I like Splunk as a smaller, high-potential leader in big data, enabling the kind of real-time insight and decision-making that defines success in a thinking world. Tim, any initial reactions to Splunk?
Tim Beyers: This one is a particular disappointment for me on the Rule Breaker scorecard. This is a story that we'll get into in a minute where disruption really does destroy the revenue model. I think Splunk, in some ways, was a victim of its innovative past because it just created so much to do the things that it did. Ultimately, those things in the modern world it launched into around the time of this stock sampler were suddenly under threat and maybe not needed as much as they once were.
David Gardner: Well, you say that, Tim, and I'm sure you're right, but I do want to mention this was a winner. The way that you cast that makes it sound like it didn't do well, Tim, but just reviewing the numbers, of course, it's no longer traded today, so that's part of your point, I think, but it no longer exists today. Back then, it was at $48.87. Cisco came along Cisco Systems, that's Cisco and bought him, bought them out in March of 2024.
Tim Beyers: Had a nice creamy by the way.
David Gardner: That was at $156.90 a share. Since we had a cost basis of 49 or so, that was good enough for a 221% return. The S&P 500, we've already talked about, it was very good. Not the full ten years here. Because this all ended in March 2 years ago. But the S&P 500 comparatively across the same dates, up 148.7%. Again, we were 221. It was 148. We give ourselves rounded a plus 72 with this dock pick Splunk absolutely was a market beater for the time at least that it lasted for this particular five stock sampler. Tim, what, in your mind is the single biggest reason it did get bought out? Do you follow Cisco today?
Tim Beyers: I don't follow Cisco today, but what I will say, David, is when I mention my disappointment, it's that could have been such a Like, it was a bigger winner. It did get taken out, and it got taken out at a healthier premium. But I just wanted so much more from it because there was a lot more. It came down from where it was until the point where Cisco said, This is just too much. We need this. To be fair to Cisco, they took it out, I think it exactly the time that I think made a lot of sense to a lot of investors because Splunk was getting systematically disrupted but little chunks at a time. Although, again, I want to come back to there's a really good reason for that because at the time that Splunk was created, I'm going to take you down a little bit of a tech worm over just a second, because we are going back to the past a little bit. We're going back through the time portal.
I want to take you back to the early Aughts. At the time when Splunk was created, they really had to create what was essentially their own query language because Splunk was trying to do something so innovative at that time that they needed to create not just the tooling to get the logs, but also to query the logs to get intelligence out of the logs. I think it was called at the time Splunk ML David. Well, now fast forward till 2019 and even 2024, and now we are using standard structure query language to also manage logs and log data through Elastic, through Datadog. There were these big competitors that were doing this, but just with tools that were available to everybody. That none of that would have been possible if Splunk didn't do what it did to create this market, we have to give them credit. They created this market. But the others who came after were innovating faster with cheaper open-source tools and doing it in a way that they were able to scale without absorbing some of the costs that Splunk absorbed. But let's be fair. Splunk was a great business, it was a great Rule Breaker. But I think if Cisco hadn't bought them out, David, it probably was going to slide back a little bit further. But again, this is a great Rule Breaker that I just wanted a little bit more from.
David Gardner: Yeah, no, I totally appreciate that, Tim, it's fun to listen to Tim geek out about data because he is somebody who before the cloud was broadly recognized as the cloud. Tim, you on our team and Rule Breakers, in the mid-early aughts, you were talking about what was going to be happening. Not a lot of people throw it out standard structured query language on this podcast, but you can do it. You're invited to do and you just did. I hear you on Splunk maybe was in the process. That's really interesting of getting disrupted. Fortunate then for this sampler and for Motley Fool members who may have owned Splunk stock that Cisco did take them out when they did. We already pointed out this is a market winner. It gave us a plus 72 in the win column. Given though that we were already down -295 after our first two stocks, you can see we still need some help.
Let's move on now to stock Number 4. Stock Number 4? Twitter. Ticker symbol TWTR, Twitter was, I guess I shouldn’t say, is a global social media platform centered on real-time short-form communication. Users share news, opinions, and ideas in rapid-fire streams. You can follow this podcast at RBIpodcast on Twitter, which, of course, Elon Musk bought and renamed X. I call it Twitter X, makes it easier for me, but it's become a powerful hub for public discourse, media, politics, and culture. It was back then. It still is today. There were ongoing struggles, though, ten years ago, Tim, for this company to figure out how to fully profit from its influence. I remember back in 2016, it was widely used. Certainly culturally significant. But it was facing leadership turnover at the time. There was uncertainty around its long-term business model. I think I kind of like Twitter as a contrarian bet back then. Here you have a deeply influential, thought-driven platform. But it felt like it was far more valuable in the real world than it was with its beaten-down stock price, which is where it was at the time. Tim, any initial reactions from you to Twitter, either circa 2016 or 2026?
Tim Beyers: I'll give you both. I wrote an article for our premium services. I don't remember exactly when this was, David. I think it was 2011. I said, I think that Twitter is going to be $1 billion company. I've been known to make reckless predictions in the past, particularly reckless tech predictions, and this is one of my first that I ever made. The reason is because I thought that as a distribution mechanism, nothing was beating Twitter at that time. I thought there was a lot of leverage you can get out of creating such an incredible distribution mechanism. We'll talk a little bit more about it, but I just want to headline this. When it came on to the Rule Breaker Scorecard, it didn't initially have just massive amounts of free cash flow. But you know what? As Twitter scaled, its financials got really good. I mean, really good. It was scaling really well. It was generating incredible free cash flow margins. I think since that time, it is a much different business, I think, arguably a worse business. But David, I think, at the time in 2016 and even 2019, there were reasons to be optimistic about Twitter.
David Gardner: If you were, you were quite happy in retrospect. The stock when I picked up for this sampler 10 years ago this week was at $14.84. Today, well, wow. Here again, a third stock in this sampler that no longer exists. In news that will surprise you exactly no one. Elon Musk bought out Twitter. The month was October. The year was 2022. Stock was bought out at $54 a share. That gave us pretty good return. Again, our cost basis is just below 15 bought out at 54, a 263.9% return over six years, that's well ahead of the market. The S&B 500 comparatively across those exact same dates was up 85.3%. Yeah, we were plus 264 S&P plus 85. That gives us a plus 179. That combined with our plus 72 from Splunk has us just about almost back to even in the overall standings for this sampler. But let's get back to Twitter now. Tim, what is in your mind, the single biggest reason this stock maybe got bought out by Elon Musk and then thoughts about it here and now.
Tim Beyers: Let's skive over the political reasons. He said he bought over it. I think distribution was unequivocally the reason that Elon Musk saw value here. That has always been true. Whether you call it Twitter, whether you call it X, the distribution is massive. Now some of the changes he has made, I think you can argue has hurt distribution. Again, you'll have to get into political discussions. I'm not going to get into in order to describe why that distribution has waned a bit. It certainly hurt the advertising model, but I think that's the reason. The buyout, I think is 100% due to distribution and reach because Twitter really is for and this is still true. If you want instant news, if you want instant reactions, Twitter is still a place where a lot of instant reactions, instant knowledge, expertise lives in short form, it's still true. It's still true there. I'm not on there anymore just because it's not necessarily great for my particular type of brain, but that doesn't mean I don't see the value here. I see a lot of value still, but the revenue model has definitely changed, David. It's not the same. But the distribution aspects of what was Twitter and is now X, those are still true.
David Gardner: Well said, Tim. Of all five stocks in this sampler, this was the No. 1 performer. I think, in part, it was a great performer for this sampler because it was pretty beaten down. In May of 2016, there was a lot of questions about the business model. Everybody knew and had heard of Twitter. But really, the company was not that well equipped at a leadership level to take advantage of, I think its influence and name recognition. Social media itself has come under fire for lots of different understandable reasons, not just Twitter, but almost every form of social media has been more actively questioned here in the last few years than it was in those first few years of social media when Facebook really tipped everything off. Apart from any political feelings anyone has, apart from any mental health feelings anyone has, I will just say that this stock made me happy. It was a good performer. I was disappointed once again, when this one got taken off the market. I don't know whether Twitter today would be worth a lot more or a lot less than when Elon bought it in 2022.
I don't think the story is finished, not nearly. It'll be interesting to follow going forward. But at least for this sampler, Twitter was a substantial winner and that's now going to take us to our fifth and final stock from five winners in a thinking world. That would be Zillow. Ticker symbol Z or ZG. There are two different classes of stock. Zillow is a real estate technology company. I know a lot of us have heard of it. It provides online platforms for buying, selling, renting, and financing homes. It built its brand by offering zestimates. That would be the word, estimate with a Z in front. Data-driven home value estimates that became the talk at cocktail parties when it first popped up. It's aggregating listings into a highly accessible consumer experience even today.
Back in 2016, Zillow was positioning itself as the digital front door to real estate, layering information and tools on top of a traditionally offline industry. Well, I like Zillow as a first mover applying data and transparency to what is a huge, historically opaque market. All of a sudden, you could look at anything and get a Zestimate. Have some rough understanding data driven of the value, even though most real estate brokers that I knew would immediately demean the estimate for whatever anybody was looking at. But this company has always, Tim had the potential to reshape, maybe it already has how real estate is researched and transacted. Before we get into the big reason why this stock has done what it's done just any initial reactions, Tim to Zillow.
Tim Beyers: Quote essential Rule Breaker. I couldn't agree more what you just said there. I credit to you that each of us on the Rule Breakers team has formed our own way of putting a lens into a market to find a Rule Breaker. My particular lens is always show me the company that solves a migraine-level problem, because a headache, you can take aspirin for a headache and it's an annoyance, so you can sleep it off. If you have a migraine, you will pay almost anything to get that, and I think Zillow is an example of a Rule Breaker that solved a migraine-level problem. It's what you just described, David. It is taking this aggregation of data that never lived anywhere, but there's lots of information, lots of data points, lots of ways to think about what residential real estate is worth and then formulate it into something that is instantly digestible. That is solving a migraine-level problem, and that has extraordinary value. I wanted so much more out of Zillow and I know we'll talk about this because it's one of those quintessential Rule Breakers. In fact, if I go back I would say at least twice, maybe more than that Zillow was in our list of Rule Breakers foundational stocks or what we used to call starter stocks. I think Zillow was that foundational at times in Rule Breakers history.
David Gardner: I agree with that, Tim and you and I have been there through basically all of it, so I appreciate your perspective. Let's look at the numbers of performance of the stock. You've already spoiler-alerted listeners in an appropriate way. It's been disappointing, especially these last 10 years. Now, this is not a stock that's flat like Disney. Ten years ago this week, it was at $28 a share, 28.08 for those keeping score at home. That's me by the way, because I keep all this on my spreadsheet. But it was at 28.08 and today it's at $44.18 as we record here on Monday, May 4, the afternoon here, still a live market. These prices can change. But 28 - 44, Tim. It's up 57%. The S&P 500, as I already mentioned at the top over the 10 years is up well more than 57%. It's up 249.6%, basically 250. This is a -192 percentage point, negative Alpha stock over the last 10 years, which unfortunately tips this five-stock sampler into the negatives.
This has been ironically, Tim, five winners in a thinking world has been my first loser. It won't be the only one at all of these 35 stock samplers, but the first loser after 10 years of our five stock samplers. Let's give a little bit more on Zillow. Again, a company a lot of people are familiar with. I continue to own shares, I believe and I'm sure some of our members are disappointed if they've held them along with us for 10 plus years. By the way, this has been a really good stock if you held way longer than that which we have. But these 10 years is what matters for this sampler and Zillow up just about 50%, market up 250%.
Tim Beyers: Folks know I love sports, I love the NFL, I love my English Premier League, and something about association football, or what we call soccer here in the US, is the concept of an own goal. The defense kicks it into their own net. This is an own goal, David. I don't think there's any other way to color it. Zillow absolutely kicked an own goal here. I would say this is a strategic pivot from former CEO Spencer Raskov. It wasn't just a minor pivot. It was a major pivot. Back in 2019, Raskov and Zillow decided that they were going to aggressively ramp up what was called at the time, I buying. In other words, probably know this. Have you ever watched Chip and Joanna Gaines? What is that show that they used to do about, they'd buy a bunch of properties. Then they would redo them and then sell them off. That's what I buying is, but on a much bigger scale. Zillow was just doing this. I had to say, didn't anybody tell Zillow that you don't compete with your customers? Because that's what they were doing. They were taking their customers, were really like tools for real estate agents, and they said, ''No, we don't need you anymore. We're going to be the agents. We're going to buy the properties. We're going to resell the properties.''
Boy, David, it was just such a terrible idea, and the cost of it was extraordinary because Zillow was leveraging its own balance sheet, buying up a bunch of illiquid assets, in other words, residential homes. Carrying them on their balance sheet, and then they'd have to sell them off. You know what? They were subjecting themselves to forces that were a little bit outside their control, and it just really didn't go well. All of the things that they did so well, they moved away from at the worst possible time.
David Gardner: It has been a real disappointment. In fact, it's stark for me to look today and just see the market cap at only about $10 billion. This is a company that's a much bigger idea than that, but the stock even just over the last six months has been cut in half. All the numbers are baked into the return I gave. We're up 57% on Zillow from 10 years ago, but this stock literally was at 90 last September. It's down less than half that now here in May of 2026 and I'm still holding. We'll see.
Tim Beyers: My favorite features of the RBI podcast, even though I'm terrible at it. I'm classically terrible at it. But this is a classic market cap game show stock wherein, you say the market cap is $10 billion and this is one of the features of the Market Cap Game Show. It's a signal when you say, I think that is only $10 billion. Then the market cap ends up being a lot bigger or vice versa. Like you're mentally processing a price dislocation. That's what the Market Cap Game Show does. You naturally think, because of the Zillow brand and what it offers that it should be much bigger. I think that's true. It should be much bigger.
David Gardner: We'll see.
Tim Beyers: That's what makes it so disappointing. For sure.
David Gardner: Appreciate that, Tim, because first of all, thanks for the shoutout for the Market Cap Game Show. But that is how Twitter felt to me 10 years ago, looking at the market cap going wow. It's only that? Feels like it's a bigger idea. We will see with Zillow. Well, as we start to bring it now to a close, there they are. Celgene, Walt Disney, Splunk, Twitter, and Zillow. Some of those words are really fun to say altogether. Splunk, Twitter, and Zillow, five winners in a thinking world. Although his stocks only, only four of them have made money and only two of the five beat the market. Maybe we need to rebrand to two winners in a thinking world. Also, only two of the five stocks are even still standing, are even independent now 10 years later. I’ll forever wonder, along with Tim earlier, how we might have done with this sampler if, say, Celgene and/or Splunk, and/or Twitter had remained independent and kept racking us up more investing returns.
When we did the review of Palooza and sent this sampler off, after three years, that was the game that we were playing with these samplers. They were just scoring them over three years. We were holding them well longer than that, clearly. But just from a game mechanism, it would just be too much to constantly be re-updating 35 stock samplers every single year. When we did close this one out after its three-year mark, it was up 80% with the market up 43%. I was pounding my chest a little bit and talking about what great winners these were in a thinking world. Now here we are after 10 years, and we're under the market. Mind you it's not a bad return. Still well over 100% on average for these stocks, but certainly down below the market average.
Well again, the market up 249.6% although we only use that figure against Disney and Zillow for Celgene, Splunk, and Twitter. Well, I already gave you the market comparables. When you mix them all together, you get a blended market return of 157.1% for these five stocks. These five stocks taking their average return were 109.6%, so 47.5 percentage points behind the market's average return. Enough with the numbers, which in this case I don't even really like. For those not numbers inclined, my apologies. We're now done with the numbers, although that is a key part of 10 years later and indeed a key part of investing.
Tim, let me turn back to you now. We've just gone over five individual stocks. We've talked about them as a basket. I think we owe our listeners maybe one or two lessons that you can pull out of what we've just talked about that we can all use going forward as investors.
Tim Beyers: I think what we learned here, at least what I pull out of these stocks, David is that a pivot isn't always good. Sometimes a pivot is necessary. Sometimes there are headwinds and you need a leader that can see those headwinds, tack in a different direction, catch the tailwinds, and move on. In some cases, there were attempts to do that and they just did not work out. I think being really honest about what the pivot requires in order to succeed, like if you are following a stock and this is important right now by the way. There's a lot of SaaS companies that are pivoting in the age of AI. I think a great question to ask yourself as an investor is, I see what management is saying about this pivot. What needs to happen in order for this pivot to succeed? For a lot of companies like on the Rule Breaker scorecard, I'll give you one. One I still believe in monday.com Ticker MNDY, what needs to happen for the Monday pivot to work? Two things need to happen. The first is they have to be actually selling their own AI agents, and they have to get more money from their biggest clients. Now those two things happen, the pivot might work out really well. If those things are not happening, it may not work out very well. But know the pivot, know the game that you are playing. I think that is an important lesson.
David Gardner: It's a great lesson, Tim and thank you for that. Monday.com, a more recent Rule Breaker is like so many companies in a place that needs to think about the future and think backward from the future, and good leadership can do that. We pointed out the own goal of Zillow here or we talked about for Disney, we talked about how the cable industry really has dramatically changed and shifted to streaming. In a thinking world and in an AI-driven world, just when the Internet started 35 years ago, that created a new world. These plate tectonic shifts that we see in technology do demand some response. I would say the great stocks and the great companies can do it. Think about a company like Alphabet, which is shifting even itself, its own Google search engine toward Google Gemini, et cetera, but has so many other businesses besides. Just some cases, Tim, diversifying no doubt. But Google Alphabet, a good example of a company that can evolve into almost anything it needs to given its expansiveness, but not everybody has that opportunity. Thank you for those thoughts, Tim. Before I let you go, maybe one final question. Thinking of these five stocks, are there any that you particularly would favor or disfavor the businesses even if they're not still stocks here over how about this, the next 10 years?
Tim Beyers: I'll take Zillow and the reason is, look the migraine level problem. Real estate is still a very funny market. Residential real estate is an even funnier market and we still need more housing. That is still unequivocally true. We still need more affordable housing. We still need to rationalize this market. The migraine level problem has not gone away. Now Zillow may have veered from it for a period of time, but now they're back on I would say, closer to back on track. You know what? They're still necessary. Zillow is still necessary. Of those five, give me Zillow. I still want to believe. I'm still a believer.
David Gardner: As a fellow shareholder, I do too, and I like to think it passes the SNAP test. I think it might.
Tim Beyers: I would agree with that.
David Gardner: Although I'm sure there's a wide range of opinions on that topic. Well, thank you very much, Tim Beyers. Just checking again, December 17, 2003, was Tim's first day at The Motley Fool. Twenty-two plus years working together is its own joy. Tim, it's also just great to have you back on Rule Breaker Investing. Thank you for your analysis of these five companies.
Tim Beyers: Thanks so much, David. Really appreciate you having me back on. Great to see you. There's never a time where I want to toss up tucking Rule Breakers with my friend David Gardner, so fantastic. Love it.
David Gardner: Thank you, Tim. Likewise. That's 10 years later. Five, well, at least two winners in a thinking world. Over the next 260 weeks, every 10 weeks, we'll be bringing you the next sampler. They don’t all win by the way, as demonstrated this week, but 10 weeks from today we’ll be back with five Brexit-inspired stocks. That'll be in mid-July. In the meantime, hope you had fun. Hope you learned a few things this week. Drop me a line if you learned anything this week or from me. [email protected] is the email address in advance of my birthday next week. Fool on.
