David Gardner: 9 Foolish Truths I Hold to Be Self-Evident

It's time for Motley Fool co-founder David Gardner and Rule Breaker Investing to restate and recommit to the eternal verities David sees in business, in investing, and in Rule Breaker investing. So put down those oars, join us aboard our sailboat, and let the winds guide you back toward these valuable core beliefs.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on Oct. 08, 2025.

David Gardner: Do you know the phrase the eternal verities, the things that have the state or quality of being true? Maybe you know some of them like truth, right and wrong, good and evil, hope, love, compassion. You might have your own though. To live up to the phrase, they will need to be eternal and of course, they need to be true. But what are the eternal verities in the world of money in investing specifically, but also in business? Well, every two years on this podcast, I bring you nine foolish truths that I hold to be self evident, things that I believe, that I hope you believe, things that I believe you should believe, truths that I want to make sure I don't forget to state and occasionally restate, reemphasize, at least every two years. Indeed, it was eight years ago this week and then six years ago and then four and then two years ago, this very week on this podcast that I've last spoken these, checking my Apple Watch here, which means, the time has come once again, time for really one of my most important podcasts that I ever do for you. It's time for nine foolish truths I hold to be self evident. This week only on Rule Breaker Investing.

Welcome back to Rule Breaker Investing. What are we doing this week? Well, I want to go back, as I mentioned, and restate some of the classic rulebreaker points, stories, basics, especially for those of you who may be new, who've never seen all of these laid out on the table for you, displayed in full so that you can dine at this table, surrounded by rulebreakers, and know how we think and what we do. Well, longtime listeners have heard me say this before after you do several hundred podcasts, and this is by my reckoning, brand new consecutive weekly podcast Number 537. The older ones can tend to disappear into the mists of time. I might remember how much fun I had here with world class novelist Amor Towles or inventing the first Market Cap Game Show, or coming up with another list of five good stocks for a sampler. But those are all ancient history now, and I cannot expect that you, dear listener ever remember them or maybe even heard them in the first place. A lot of podcasts, I think you can just start in the middle. Especially the newsy ones or sports talk, you can just join in anytime you like. But for Rule Breaker Investing, well, this is a strategy. This is an approach. It's a thought framework, which is very helpful for any new listener already to have in place as he or she begins listening to this podcast, say, to podcast Number 537. That's why every two years, I like to hit the reset button with this podcast, nine foolish truths that I hold to be self evident. Nine things that I take for granted, and I think you should, too. But I don't want to take for granted that you do take them for granted, or know them for yourself to be self evident, so here we are. We find ourselves at this place once again in our end wrote TS Eliot is our beginning, my nine self evident foolish truths. Let's get started. Foolish self-evident truth Number 1 begins by asserting that we are living in a protopia. That's according to Kevin Kelly, author of the books, The Inevitable and Excellent Advice for Living, both of which we've discussed on this podcast with Kevin. We're not living in a utopia. I think we can all agree on that and certainly not in a dystopia, either. But rather, Kevin says, in a protopia. That's a world that gets a little bit better most days, but almost invisibly so. It's not evident until you step away and look back a year or 10 years or 500 years and you see the amazing amounts of human progress that roll up over time. One of the things I love about the time in which we are living is that things are pretty persistently improving. Growing up, I used to have to pay $1 a minute to place a long distance phone call home from a big, clunky wall phone. Today, we can connect with anyone around the world by video, wherever we're standing or flying on an airplane, pretty much for free.

That's just one among myriad examples of how much better the world is today than the one you and I grew up in. Quiet, speedy electric cars, anyone? Instead of loud, clunky gas guzzlers. Computer keyboard, instead of typewriter. Female CEOs. The worldwide poverty rate as measured by the World Bank was 42% in 1975. Fifty years later, it's now down to 10% in 2025. This progress is obviously not straight up and it's not every single day. It comes in fits and starts. Sometimes we take a big step backwards, like when countries start wars with each other, which make the overall world worse and tragically much worse in some places. Yes, things like pandemics can happen too. There's human misery in many places in the world today, and I'm not gainsaying any of it. But then I do want to remind us coming out of COVID, vaccines. Wow. In stark contrast to the flu epidemic of 1918, a century later in 2021, our businesses, companies like Pfizer and Moderna created and developed a vaccine within one year of a pandemic outbreak. Those vaccines came from businesses, people working for profit every day to do a little more good in this world. Whether we're talking about Pfizer and Moderna, or a totally different industry like Patagonia, a company that prioritizes environmental stewardship or Starbucks, a global coffee empire masquerading as a force for ethical sourcing and community uplift. From Pfizer and Moderna to Starbucks to the companies, you're invested in. Maybe they make the clothes that you're wearing right now, the video game you might have played yesterday, the AI that just sparked a better idea or the healthy snack you just enjoyed. These are companies contributing to our protopia. Again, little improvements, even when measured in the millions are still just little improvements. They won't look like such a big deal right now, but that's invisibly the world getting a little bit better every day because of the collective efforts of most people around the globe to make it so. Well, make no mistake about this. There are so many more good guys than bad guys out there. The bad guys, they may get the headlines, they may get your click because they generate negative headlines and negative headlines get the clicks, but they're way outnumbered. As I said, Foolish self-evident truth Number 1 is reflecting on a protopia which is explained by increasing numbers of private efforts from the little guy to the big corporation to do well by doing good. In a phrase, I call that conscious capitalism.

In fact, remember the four tenets of conscious capitalism is one of the six habits that I believe every rulebreaker investor needs to develop. It's actually habit Number 4. It's all right there in Chapter Number 4 of my beloved new book, Rule Breaker Investing. I say beloved by me anyway, as its author, certainly, but also happy to say just a few weeks after coming out, it's just appearing as the tenth best selling business book at none other than one of the world's busiest airports, Heathrow Airport in London, which has a best-seller bookshelf there. A friend just snapped me a photo yesterday with Rule Breaker Investing debuting at Number 10 on that shelf, demonstrating that among the world's most active and I'm going to say discerning travelers, are numbered, a bunch of rule breakers old and new. Anyway, the phrase conscious capitalism won't elude them for long. It's right there in the book. But if the phrase is new to you, Google it and you'll discover four underlying foundations that make for the best, most sustainable companies worldwide. Those are quickly, first, that they value purpose, first and foremost, even over profit. Second, that they work to create win, win, win for all their stakeholders. They create a win for their customers who love to shop there, for their employees, who love to work there, for their partners and suppliers who grow proud and prosperous from their partnership, and of course, for their shareholders who enjoy gains above market, and in some cases, the best gains investors will find, period. Well, those are the first two tenets of conscious capitalism. Number 3, these companies exhibit conscious leadership. They have leaders who are actually servants who care deeply for the planet and all its inhabitants, the kind of people people want to follow, the kind of people, sadly, that may be increasingly few in our political world, and yet good news increasingly numerous in our business world. Fourth, conscious capitalism creates great corporate culture.

They're the companies everyone wants to work for and with. I want to make sure that you get all of this, and that's why I packed it all into foolish truth Number 1. It's a little bit of a mouthful, but I want to make sure you understand that I hold this truth to be self evident, that we are living in a protopia, one that is increasingly being driven by conscious capitalism, which is a great way to do business. Many of the best businesses of our time do this every day. As investors, these are the ones that should have us sitting up in our chairs, getting excited to buy and to hold. Foolish self-evident truth Number 1, the longest, by the way, of my nine. The phrase protopia again, from WIRED magazine co founder Kevin Kelly reminds me, we have to have Kevin back on this podcast sometime soon. I'm thinking with the start of the new year just after the kickoff of 2026, so January or early February, let's have Kevin back. In fact, I dropped him a note to that effect this week. Foolish self-evident truth Number 2. I'll just call it by the watchword I often use, which is optionality. The truth is value optionality. Consider it, look for it because it's underrated and underappreciated and it runs deep. Truth Number 2 is basically that the best businesses are able to evolve. Now why does that matter? Well, just like in biological evolution, changes in external circumstances happen and your organization needs to be both aware of those things and be adjusting itself to be relevant and/or successful and/or just survive sometimes into the next era by evolving. One of the best ways that innovative companies manage to do this is often they have a second or third trick. We call that again, optionality. It means you have multiple possible futures. One of the strongest businesses of our time is Alphabet, looking across all of Alphabet's different businesses, starting, of course, with Google, but then looking across the globe and seeing all the different places that it is doing its googly things, and that's incredibly strong. The optionality there is enviable. It started with its Google search engine, of course, and Alphabet still years later carries the artifact ticker symbol, GOOG. I did point out recently on this podcast. I'll point it out again now. I think the company should change its ticker to ATOZ, as in A to Z like the Alphabet.

Anyway, Alphabet is YouTube. It's GV. That's Google Ventures, start-up financing. It's DeepMind AI, and it's Fitbit. Remember Fitbit? Yep, Alphabet bought one of my poorer performing rulebreaker stock picks of all time several years back. Alphabet is Fitbit. It's also the Android operating system and Waymo, Nest. That's all Alphabet, and that's optionality. Now, very few organizations are going to be like that and very few stocks that you and I pick will have that kind of resilience, but all companies to a greater or lesser extent should aspire to optionality, the ability to transform or morph into something new, something bigger and better, one hopes into some crazy, better butterfly. Just like in biology, business has cycles, and they're often driven by a change in external circumstances like, for instance, the Ice Age hits. It's going to be important for companies to recognize if that does happen that it's getting cold, let's say, and they need to stop doing this and then start doing this other thing. Then the ones that actually do that, that have the leadership, the vision, the strength to actually be able to implement big changes, and by the way, have permission from the markets and customers and partners to do so, to evolve. Those are the companies that you and I want to own in our rule Breaker portfolio. To conclude then, truths Number 1 and Number 2 have been about business itself and the businesses themselves. Next, we're going to move on to the market. Foolish self-evident truth Number 3, it's straight data. On average, one year out of every three, the stock market drops. Significant bear markets where we'd actually use that phrase as opposed to just another down year might sometimes bring those down years into a pair or maybe even three in a row, I suppose, although very rarely anything like that. The average bear market when it hits is 12-18 months. The good news is that two years out of every three, the stock market goes up. As I've been wanting to say in the past, the only market timing that I ever do I'm somebody who will never predict the stock market. I don't think I'd be good at it. I don't think anybody else is, and I don't think it's worth your time or much thought, frankly, because it's never going to be much more than a coin flip. That's why whenever anybody asks me where the market's headed over the next year, I always say, it's headed up. I think the market's headed up this year. Now, I'll be the first to say it might drop. It does, after all, one year in three. But by simply saying, we think it's headed up, we get it right, two thirds of the time, which if you look at the world's market timers, by the way, who rarely get it right more often than a coin flip, well, you'll see, I have an enviable track record with my market predictions, and you can, too. Feel free to copy me. I thought the market would head up this year in 2025.

So far, anyway, I've been right once again. Let's look at the downside of market drops because, markets drop one year in three and it doesn't feel good to be an investor and you have to be ready for that. In the year 2022, I watched my portfolio drop dramatically. At one point, I was down 50% in just that year alone. You need to understand that's how it works sometimes. It can be nasty or it could be rather mild. It might happen quickly, It might take a while, but no matter what, always expect that the market can and will drop. You need to have as part of your own resilience as an investor, which is going to be truth Number 5, by the way, but we'll get there in a bit. You need to be able to recognize that market drops are going to happen and not be freaked out about it. Which leads me to Foolish self-evident truth Number 4. Now, this is a lovely phrase, the rowboat syndrome, which I swiped from the late truly great Jack Bogle, as I swiped many other lines and stories from the Vanguard founder, the investing master, great friend of the Motley fool, Jack Bogle, and his phrase the rowboat syndrome. Now, don't do this if you're driving a car or a bike right now, please, but raise your hand, In fact, raise both hands if you already know what the rowboat syndrome is. I'm guessing a minority of us have both hands up right now. Let's make sure that we can all get our hands up about three minutes from now except, of course, the drivers. I even gave this eternal verity and eternal position in Chapter 1 of my new Rule Breaker Investing book, which is the inspiration for foolish, self-evident truth Number 4, here we go. Let's paraphrase Jack a little bit.

As we're paddling down the river of life as investors, which direction should we be looking? Do you want to be in a rowboat? Most of the rest of the world is, I think, because when you paddle a rowboat, you're looking backwards. Many market commentators and our fellow human beings, forget about the stock market are fixated on their rear view mirrors in life. They're looking backward as paddle, paddle, they go forward through time down the river of life. I've always said, toss away your rowboat. Dear fellow fool, dear Rule Breaker investor, take a canoe, at least, because when you take a canoe, you're facing forward and you recognize that all that really matters is what comes next around that bend in the river as you paddle, paddle forward looking the correct way. As an investor paddling your canoe, you're not going to spend too much time looking backward. You're asking where things are headed and good on you for getting your money aligned right there too. But I've also said to close foolish truth Number 4, toss away your paddle and kick away that canoe because there's a much more efficient way for you to navigate bodies of water, the markets of your life, and that's with a sailboat. The beauty of the stock market, as anybody who's studied it knows, is that it tends to rise 9-10% annualized over long periods of time. That includes every bad, sometimes even nasty bear market right in those numbers besides 9-10% gains annualized over long periods of time. That, my fellow fools, is the wind at your back and what an absolutely awesome trip it is that you and I get to be on as investors, and what a delightful trip too, to think that we could just sit there in the boat and let that wind push us forward, occasionally, we'll tack when we need to, enjoy the sights. Sometimes the wind will be in our face, but we're going to have fun getting rich together as the winds push us forward. In fact, when I think about those paddlers in their canoes, it just feels exhausting. That feels a lot like trading to me. It feels a lot like day trading for some. It's a lot of effort. Not nearly as much reward as just sitting there in our ship of fools, which is a sailboat. In the glossary of my Rule Breaker investing book, I define trading this way, spending lots of time trying to make money maybe half the time. Foolish truth Number 4, the rowboat syndrome. Now, raise your hands because I think we all know what the rowboat syndrome is and thank you, Jack Bogle.

Foolish, self-evident truth, Number 5, it's simply a reminder, like most of these nine, reminders. In this case, to remember what the word investor means. Remember what investing is and means. It's really not that remarkable a point, but it does introduce what I've called in the past, my dead arm initiative. You have permission, dear listener, whoever you are, to give me a dead arm. If you're ever near me, if we ever meet and you hear me use this phrase. By the way, please don't dead arm me right now because I'm actually just demonstrating the use of this phrase to explain my point and the phrase is long-term investor, or I'll even throw in long-term investing as well. You're allowed to give me a dead arm if you ever hear me say these phrases because investing is by its very nature, long-term. Whenever anyone uses that phrase that I'm not going to use now, it's a tautology. It's a redundant restatement. It even confuses some people, I think, because they think, well, then there must be other forms of investing besides the long-term, and there are not. The opposite of investing is well, it's actually, it's not investing, technically, which by the way, is true of most of the world. Most of the world is not investing today and for 1,000 reasons. A few of the more prominent ones are that people are in debt or they don't have capital, or they don't have an understanding of how to invest. For that, well, I actually think the Motley Fool was in part, put on this earth for that purpose and those people. But while the opposite of investing is technically not investing, I'm just going to say the antithesis of investing is trading. Trading, by its very nature is done short-term. There are two players in the market from my viewpoint, there are investors and there are traders. You know who this podcast is for, obviously. I'm not here to denigrate trading per se. It can be fun for some people. It's a pastime for others. Some people do it very seriously full time.

They get paid a lot of money as traders on floors like bond traders, futures traders, but for you and me anyway, well, if you're like me, you have a lot more interesting ways to spend your time in life beyond staring at wiggles and waggles on charts or looking at CNBC or following the markets or your crypto all day every day, there are too many more interesting things in life. Well, the good news is you, fellow fool can with me, be an investor. The Latin root for the word invest is investire that means to put on the clothes or to wear the clothes. In my mental image, if you're a sports fan, I hope you'll get this. I hope you invest too, by the way, if you're a sports fan, you put on the Jersey of your hometown team. You go to the stadium, you cheer your home team on. You love your team. With your team's Jersey, with those clothes on, and even more than your sports teams in most cases, I think you should love the companies that you're invested in. By the way, I always want to put this reminder out to my fellow Americans, I actually think the investing you do in your portfolio is going to be much more lucrative and important your whole life long than the investment you make as loving as it is in your local sports team. I hope you invest and the consciously capitalistic among us, I hope that you'll be investing in enterprises that are doing good things in this world as already mentioned, purpose-driven, managing for the long-term businesses that are resilient, maybe with optionality, and as you invest in them, you're going to keep that hometown jersey on. I've been watching a lot of football and playoff baseball in the last week or so. If you are too, you see with me just how many people are wearing those shirts. It's not just true of football or baseball. It's also true of soccer, hockey, professional hockey comes back to the United States this week. The list goes on. People are wearing the jerseys. Why don't they do that with their money? Well, you know who does? Henrik Rosenthal. Henrik is a fellow fool and Rule Breaker investing podcast listener. Hey there Henrik, who connected with me on Twitter X three years ago and proposed what I've ended up calling Henrik's T-shirt test, and yes, this gets a short passage and an important one in my new book, too. Henrik was thinking about that Latin word investire and clothes and clothing. He asked himself a beautiful question.

Would I proudly wear the logo of the company that I'm about to become an investor in big and bold on a T-shirt for everyone to see. Henrik went on and I quote, if it's a company that leaves the world in a better place than it was before, if it promotes values that I think are important, equality, treating all stakeholders with dignity and so on, "If it promotes conscious capitalism, if it's a company that I believe can crush the market over the long-term," Henrik went on, "Then I would gladly and proudly wear that company's logo on my chest. Hence, it would be a company I could see myself investing in. If the company that I'm evaluating a part ownership in, however, does not fulfill these criteria, then I would not proudly clothe myself in its logo, nor would I invest in said company. I came to think of an addendum as well." To my test, Henrik said, "Let's say, as a part of the T-shirt test, I need every Wednesday, every week of the year to wear a T-shirt with the logo of one of the companies I am invested in." That's, by the way, what turns a T-shirt test into a T-shirt challenge. Thank you for that, Henrik. The Rule Breaker investor should have no problem with this. We put on the jerseys. We buy our stocks. We keep those jerseys on. We keep holding our stocks, even if sometimes we have a bad day or even a bad year or two. Again, your team is not always going to win every year, nor will your stocks, but if you've found a great team, stick with it. Now you know the Latin root investire,. Now you know what you as an investor, are doing. Now you also know my dead arm initiative. You may dead arm me if you ever hear me say, well, I'm not going to say that thing that I was going to say. Now you also know Henrik's T-shirt test. Use it. You can even take up a challenge, if you like.

Those are the first five of my eternal verities, two from business, three from the markets. Now let's get away from just business and away from the general investing. Let's go very specifically into our space now, and that's Rule Breaker investing. Let's think about why it works. Why eight years worth of five stock samplers picked in broad daylight right here on this podcast with you and why 31 years of Rule Breaker investing at fool.com for me have so badly beaten the market averages and why it's so much fun and what we're all about here as Rule Breakers. Foolish self-evident truth Number 6, here it is. We're fools. Fools don't like wisdom. I don't like conventional wisdom. Well, I suppose I should say, I do like conventional wisdom when it works. By the way, sometimes conventional wisdom does work, and that's why it's become a convention, but many other times, especially as humans, sometimes we like to play tricks in our minds. We think that there's a certain way of thinking about something. Often we were taught to think in such and such a way. Sometimes it's just the stories that we tell ourselves in our heads that start to set up that conventional wisdom, and that then becomes even more conventional as other people start listening to us and thinking the same thing, too. What I would think of as suboptimal thoughts sometimes become shared, even shared broadly, and that's what's so great about capital F Foolishness.

That's why it's so much fun to break the rules. I'm a board gamer. That's become clear to anybody who's listened to this podcast any length of time that exceeds a few months or so, I'm fired up for our games, games episode the first week of December, just a couple of months away. As a lifelong tabletop board gamer, I recognize that often the best approach to take to a good strategy board game is to look around and see what others are doing, see how they're all competing maybe for the same resources or maybe over in this area of the map on the game board. By not doing what everybody else is doing, often you put yourself in a better position to win that board game. Well, the same is true of the game of business where new businesses pop up trying things in different ways, breaking the rules of how things are done in their industries and sometimes even succeeding. Well, the best ones do anyway. That same Rule Breakery, capital F Foolishness, it's also true in investing in our investment strategies. Part of what I love about Rule Breaker investing is we're taking a highly contrary approach. None of it is taught in schools, other than, maybe fool school. A lot of it is self-learned. It continues to evolve as an approach, and as a strategy, it's very contrary, as I'll be mentioning shortly in another self-evident truth to come. That's part of the reason, by the way, why I think that it works. This truth, truth Number 6 is just about the beauty of fighting against conventional wisdom, something that the Motley Fool has done across many fronts and contexts in our first 32 years on this planet. As a fellow fool, a fellow Rule Breaker, maybe you've listened to this podcast for a couple of months or a couple of years, maybe you've been a member of Motley Fool Stock Advisor and/or Motley Fool Rule Breakers, or perhaps you're joining us at Motley Fool Supernova this month, you know that we constantly challenge conventional wisdom. Most of our great stocks seem outrageous when we first pick them. That's what makes investing even more fun. Sounds like maybe a bumper sticker, a T-shirt or a mug. Somebody should make this is at march time, fools have more fun. Self-evident truth Number 6, we're fools. I hope you're one, too.

Foolish self evident truth, Number 7. Lucky seven. This is a brief restatement of the rule breaker 6 traits, the six things that I'm looking for in my favorite stocks. There will be a tendency or temptation for me right now to attempt to illustrate each one of them right here. But no, that results in far too long of a podcast. Of course, all six traits are now set down, each of them in its own chapter of Rule Breaker Investing at greater length and with greater depth. Let me just briefly, for this truth, restate the six traits that I look for when picking stocks. Number 1, I love to find top dogs and first movers in important emerging industries. If you're not the lead husky, the view never changes, and I love to find the lead huskies, especially in emerging industries and technologies, the world changes. Number 2, we're looking for a sustainable competitive advantage. After all, when you're investing, which you now know is by definition over the long term, when you're investing, you better find sustainable competitive advantages because you're going to be around for a while. Those advantages can often be gained through well, how about just sheer business momentum? For one consideration, think about big players like Amazon in its industry or in a very different industry, Intuitive Surgical. When Facebook [Meta's] first hit the scene, its business momentum was unstoppable, a clear sign of a rule breaker. Another thing that can help generate sustainable competitive advantages, patent protection for some companies, especially some of the medical companies that we invest in. Another form of sustainable competitive advantage. How about visionary leadership? That's a great form. For instance, we have Jet Bezos. You don't try to beat us. Visionary leadership or another form of competitive advantage would be inept competition. When you find it, that's an amazing advantage when all of the players in your industry aren't serving customers like for example, the cable industry at various points in the past. If you enter with a new model in these situations, you can start to win over not just customers, but shareholders too. If you, for example, are Reed Hastings at Netflix, you've frequently been up against inept competition, starting with Blockbuster Video back in the day, that's a sustainable advantage. rule breaker trade number 3. Number 3, the six is stellar past price appreciation. Yes, very contrarily, we're looking for stocks that are already doing very well.

They may already well have doubled over the last six or 12 months. Most of the world, in my experience, I submit to you is looking at the list of 52 week lows, asking which one they want to buy low. We're looking at 52 week highs. rule breaker trade number four, good management and smart backing. The value of visionary leadership is always underestimated by the markets. Smart backing, looking for which venture capitalists are funding these enterprises. Some VCs, just like some CEOs are better than others yeah, keep an eye on that. Trait number 5, I love to find companies with strong consumer appeal that have a brand name that know how to market well and speak well and truthfully and authentically to customers winningly, often with some humor. Strong consumer appeal of great brands is number five, and finally, number six, the ultimate secret sauce of rule breaker investing. We want to hear that our stocks are, and I'm going to put this in air quotes overvalued. According to the financial media, the more prominent the voice calling our stock overvalued, often, the better it's going to be for us as investors. You see, when you have those first five traits in place, restating quickly, top dog and first mover in an important emerging industry with a sustainable advantage, stellar past price appreciation, good management and smart backing, strong consumer appeal, and somebody at Barns or CNBC or seeking Alpha or with one of those short attacks shows up saying it's so overvalued. I'm pretty sure I know which way things are going to go over the only term that counts, which is by definition for investors, the long term, and that is typically for rule breakers, they're going up. Now, it doesn't always work, of course. Like venture capitalists, we know some of our hope for rule breakers will end up looking more like faker breakers, which I guess gets us ready for self evident truth number eight, because not every one of our stock picks works out, not nearly. It's just that the ones that do work out work so wonderfully. Now, sure, foolish, self evident truth number eight. This might be my favorite. Get ready to lose. That's right. Foolish, self evident truth number eight is that you will lose and you will lose a lot as a rule breaker investor.

One of my very favorite passages in my book was pulled almost straight from one of these podcasts because I once did an entire podcast on this a few years ago. That podcast was called losing to win. It came to you on November 18, 2020. Go back and check it. It was at the height of the pandemic and it was one of my favorites to do. The numbers will have changed somewhat inevitably, of course, now almost five years later, but the takeaways will read the same. This truth itself will never change. I said on that podcast that I had now picked in Motley Fool Rule Breakers history, 389 stocks, two every month for years and years from October 2004 forward into that first half of the month of November 2020, 389 stocks fully, 63 of them had lost 50% or more. I hate that. It's shameful. I don't like to think about it. People follow my advice. I've followed my advice and a lot of the time, not all the time. We're going to get to that in a second, but a lot of the time, we lose and we can lose dramatically. You need to be ready for that if you're a rule breaker. Otherwise, you're probably not a rule breaker. You need to be willing to lose. Here's why. Even though I had 63 -50% plus losers in the 389 stocks that I had picked over the course of 16 years to that point, 63 -50% losers good news. The 63rd best stock that I'd picked for rule breakers was HubSpot, up 401.8% at that point, the 63rd best performer.

By the way, it's now up further than that because another rule breaker investing maxim is that winners tend to keep on winning. What do winners do, dear listener? Yeah, they win, and HubSpot is one such. But anyway, can you hold both these two key stats in your mind just for a second? First, the 63 -50% losers and the 63rd best winner up 402%. You got it? Exactly. You got it. The value of winning far wipes out the cost of losing. This is such a critical psychological point. It's probably the best way to figure out whether you're truly a rule breaker investor and can have and own that mentality, and if you don't you shouldn't if you shouldn't I'll be the first to say there are many other investing styles that you can adopt. But these are my foolish rule breaker truths this week and psychologists tell us that the pain of loss is three times the joy of gain. Think about that. It hurts to lose far more than it feels good to win. That's just true of human psychology, but look at the math that you and I just threw down together. Quick quiz. What's the pain of loss at its maximum for an investor assuming that she isn't using any leverage? Well, the answer is, of course, losing 100% on a stock market investment -100%. But what is the joy of gain by contrast for investors? The answer is, that joy is unlimited. The 7, 100 plus baggers that I've picked for Motley Fool members has each on its own wiped out all of the losses of all of my -50% losers, all of them, and then still leaves profit on the table on top of that. In fact, take Tesla from our Motley Fool Rule Breakers service, it's up 213 times in value since November 23 of 2011, 14 years later. I'm really glad I picked it. That stock up 213 times on its own, those gains exceed all of the losses of all of those 63 -50% stocks taken together. In fact, those gains from that one stock are more than four times all of those losses combined. That's to say nothing of the second best performer in Motley Fool Rule Breakers, which is Mercado Libre, which is up 152 times in value. I just want to make sure you recognize the math here. The math of investing directly reverses the psychology that all of us are bound to. The pain of loss may be three times the joy of gain for most contexts in life, but for you and me, as rule breaker investors, it's quite the opposite.

The joy of gain is infinite times the pain of loss if you're doing it right. A lot of people just don't realize that. They live in fear of ever having a single stock that would lose 50% or more of its value. Finally, foolish, self evident truth number nine. This is the definition of a term that I've used as my own screen name over the years in our community at fool.com, where I go by TMF spiffy-pop. Here's what a spiffy-pop is. Let's pretend you paid $63.37 for a stock that you bought eight years ago. I don't know how many shares you bought, but it was a good buy. Good job because you bought it at $63.37 and tomorrow that stock goes up $65 in one day. Let's say it's at $700 a share these days when it goes up 65 tomorrow, let's see after a good earnings report, well, that's about a 10% gain for all of the investors. Nice. Sounds like they got a pop. In fact, I'd say anytime any stock jumps 5% or more, we can call that a pop. But actually for you, in our example, something even more impressive happened because you didn't just pop. You just got a spiffy-pop because you made more in a single day than the cost basis you paid way back when, eight years ago. You made $65 a share in one day and you'd only paid $63 and change for that stock in the first place. Yeah, that's not just a pop ladies, gentlemen, and fools everywhere, that is a spiffy-pop. I invented the concept for investors for people who, by definition, I think you know this by now, act long term. Because, you see, we investors don't usually get a lot of ah, ah. We're not invited on to CNBC to make their short term market calls for them. Heck, the tortoise didn't get much press coverage at all, that whole race against the hare, unless maybe we're talking about at the finish line. For us, tortoises, I wanted to have some kind of a concept. Let's call it a rallying cry, a thing that could be a goal for any new investor that we could do and celebrate together.

Well, I'm really happy to say that we've had hundreds and hundreds of spiffy-pops now across our services over the years. We've had years in which in a single year we've racked up more than 100 spiffy-pops across our different Motley Fool services, prominently Motley Fool Stock Advisor and Motley Fool Rule Breakers, two of our longest running services. These are real results for real people. Without bragging here, I should mention that once a stock does its 13th spiffy-pop for you when it hits its Baker's dozen, great winners like Amazon or Booking or Intuitive Surgical do that. We just stop counting after that 13th time. In fact, these days when any of those stocks I just mentioned makes a 1% move up, they generate spiffy-pops for all of us who've held from the beginning and those 1% moves and their resulting spiffy-pops well, they're just not really that interesting anymore. That's why we call any stocks 13th and final spiffy-pop. It's forget me pop. We just don't pay attention anymore. It's gotten boring. Boring in the best way. Self evident truth number nine, the spiffy-pop. Okay, then. Now you know you stuck with me all the way through this podcast. Now you know what a spiffy-pop is and what I think you should make a laudable goal that you surely will achieve if you purpose toward the foolish, self evident truths that I just tried to throw down for you this week. That's it. Nine foolish truths about business and the markets and rule breaker investing that I and now I hope we hold to be self evident. I look forward to sharing this with you again in another two years from this week, where, once again, these probably will not have changed. In the meantime, thanks for being with me this week. Fool on.

David Gardner has positions in Alphabet, Amazon, Apple, Booking Holdings, Intuitive Surgical, MercadoLibre, Netflix, Starbucks, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Booking Holdings, HubSpot, Intuitive Surgical, MercadoLibre, Meta Platforms, Netflix, Pfizer, Starbucks, and Tesla. The Motley Fool recommends Moderna. The Motley Fool has a disclosure policy.