The Rule-Breaking Investor: David Gardner's Best Advice for New Investors and Entrepreneurs

On today's episode of Right About Now, I talked to co-founder of the Motley Fool. Yes, that Motley Fool, not the band, but one of the oldest newsletters and one of the best insightful platforms for getting stock tips. David Gardner and I talk all about building Motley Fool. What stock investing looks like today versus the past, and again, it's not what you might think. Just like my advice, it's more practical, but builds and pays over the long term right about now. There's a great line from The Grateful Dead, Jerry Garcia. He said, we were never trying to be the best at what we did. We were trying to be the only ones doing what we were doing. And there was The Grateful Dead back the day saying, go ahead, bootleg our concerts. We don't care. Nobody else will let you record live, but you can do it for us. They understood open source decades before that phrase was known. So that's another great example. Great line. We were never trying to be the best so all we did, we're trying to be the only ones doing what we're doing. Those are the stocks I'm looking for. This is right about now with Ryan Allford, a Radcast Network production. We are the number one business show on the planet with over 1 million downloads a month. Taking the BS out of business for over six years and over 400 episodes. You ready to start snapping necks and cash and checks? Well, it starts right about now. What's up guys? Welcome to right about now. We're always talking about how to get right in business and marketing in life today. Not six years ago, not six years from now. We're not prognosticating. We're just telling you how you can learn from some of the best. And there's a bit of nostalgia here for me today. I saw this name come across my desk and it was probably the best internet marketing of 15 years ago. And David hopefully share with us everything they're doing today. I still see them, but it was really nostalgic for me as I was starting my investment journey. And then to see this name, which you, if you don't know this name, I'll be surprised. He is the co-founder of Motley Fool. He is, Dave Gardner. What's up brother? Thank you Ryan. Really appreciate the invite. Yeah man, Motley Fool. I remember the name caught my attention back in the day. And then I signed up for the newsletter and got, I don't know how many emails a week. It was one of the only ones I actually read. It was a great writing. It was insightful on investment strategies, stocks you should consider, and validating maybe things that was seeing or thinking about. I've always respected the content and the brand. Thank you very much for us just starting with our name, the Motley Fool, which comes from Shakespeare because we love those characters that court gestures who could tell the king or queen the truth. They were the only ones in court who could tell the king or queen the truth and they used humor. We've always taken that seriously at the fool. We try not to take ourselves seriously. We take our members and of course the subject, the stock market seriously. But I think it's really important to be communicators and to do the best that we can as marketers, but also of course as delivers of advice, which is how we butter our bread. Wisdom, I like it. I didn't realize that you guys were, do you say 30 plus years old at this point? Yeah, we launched basically as a newsletter, a print newsletter back in 1993, $48 a year, the only people who pay us were our parents friends. They felt sorry for us. They wanted to get our business going for us. That's how it started and then the internet showed up. No kidding. God, there's some of the angles we could take with that. What's the investment world been watching it for that many years? How it's changed, the evolution, the internet, all those. That could be a 40 minute or 40 hour discussion, but you condense it though because if you've been on a wild ride, I'm sure it was just a company which I want to talk about, but just investment landscape in general. Yeah, it's been remarkable, just how much it's opened up and become accessible to all. Truly 35 years ago, Ryan, there was not free stock charts that you could just instantly update themselves over the course of the day and your browser. Back then, literally you were paying, I think $50 a year maybe I'm ever paying for a little S&P Standard Imports Chart Guide, which gave me quarterly little stock graphs that I paid $50 a year for to subscribe to. And that's just one simple example of how information that used to be hard to get and expensive has become incredibly accessible today. I'll give you one more quick example. That is, when you trade a stock today, we like to buy at the Molly Fool, we don't sell much. We like to hold on periods of time. That's the way we beat the market. I used to have to pay $50 a hundred dollars just to trade a stock, a commission. These days, we're down to a zero commission environment where people don't really have any friction trading costs and these days, you can also buy fractions of shares. So if you only have $100 and you want to buy Amazon stock or Nvidia stock and it costs more than $100, you can do it today. You can buy two thirds of a share. Back 35 years ago when we started the fool, you had to buy round numbers, usually significant, maybe like 50 shares of Nvidia if you wanted to enter a position paying $50 to $100 just to buy it. Now it's free with fractional shares. You can build a diversified portfolio of 20 stocks, which is a good number to start with, in my opinion, for $100. It's crazy how much more accessible with better information than we had 35 years ago. So it's been pretty much all great, I would say. Democritization of everything is what we've seen the last 30 years. The internet has democratized content, distribution, knowledge. Now AI is doing it on fire. And that's what it is. And when I think of democratization, it's opening it up to many, making it freely available, but you nailed the right word friction removal. We've removed friction from what is a wonderful way to save your money, to invest it, to grow your wealth, which is investing in stock market and equities and all these other things. The internet opened the door. You know, it put Molly Fulming as one of the brands though that has leveraged that door, but it also democratized it with the knowledge that you got shared. I did pay for a certain point I remember for a couple years that the membership well worth it, by the way. But all the knowledge you gave for free and the newsletter was incredible. You guys were at the forefront of that. Well, thank you very much. It's important for us as a business, because that's what we are a for profit business, to figure out what's the right business model. And we've used several businesses really back in the day. When we launched the Molly Ful, people paid AOL $4 an hour just to be online. And if they came over to our site on AOL, we got 10% of that. So we would get 40 cents an hour for every hour anybody spent on our site. That was an incredible cash flow positive business model from the get go. And then it all got flat fee. All of a sudden, people are only paying 30 bucks a month for AOL. So we had to shift our model then. And we shifted to a free ad supported business to really grow big guns, raising venture capital, etc. Eventually, after the dot bomb era ended in 2001, too, we had to shift one more time. We'd had some serious layoffs. It was a brutal year. I remember Amazon stock, which I had recommended to our members at three dollars a share. It went to 95. And then in 2001, it went from 95 to seven. That's really how bad the world was. It was really, really tough. And we shifted back to subscription. And that's really how we make money today. Most of all is off of those subscription fees. Ryan, sounds like we had you for a couple years. We lost you. I'm sorry. That's on us, not you. But for us to run a good business, we need to be giving advice that people want to pay attention to. They want to use. They want it to be winning for them. And I'd be the first to say if we're not doing that for you, cancel us because we're trying to be a value ad for you. Just like this podcast is for his viewers and fans, I know you're focused on what's the most value we can create for people in 20 minutes. Yeah. And that's what we want. And to that end, what's good investment in that vice today? I know that's a broad because you had early investors, mid investors. You've got risk tolerance, all those things. What's the Motley Fool pattern for investment today? First of all, we believe more than anything, you should be investing your whole life. So that means whether you've encountered us today at the age of 1939 or I'm 59, doesn't matter to me. We're all going to be investing in hope for decades. Take that approach. Most people don't. They think you're supposed to buy low and sell high. Those are four of the most harmful words in English language. I've written a new book called Rule Breaker Investing where I basically take that to task early on in the book. We shouldn't be selling or trying to time our ways out of the market. We should just be adding and adding and growing some more and realizing one year and three on average, the stock market will lose value. That's history. And we respect it. And if I'm fully invested my whole life, which I have been, that means one year and three, I'm going to be like, man, not a good year, tough year. And the other two years it goes up and on average, it goes up nine to 10% annualized. Over the course of your life, if you do the math, the earlier you get on that train, the better off you're going to be, you should stay on that train, in my opinion. Visit every depot, every stop and take it to early retirement, which is where I think a lot of people focus their investing. That's their hope. That's the dream to retire or retire early. And there's a big movement around that today. But I think the stock market is the surest. And yet it's often perceived, Ryan, to be a gamble or crazy. But it's actually, if you just look at history and math, you'll see, it really is the surest way to get rich slowly. We're not talking about silly meme stocks or some crypto scheme that we're dreaming up here. What we're talking about is real companies like NVIDIA, Amazon, Tesla, Netflix. These are all companies that are active recommendations of ours for years and years. And what we do is we buy and we buy some more and we keep holding. That's like my timeless Motleyful advice for you in terms of how to invest. It's interesting talking with David Gardner. He is the co-founder of Motleyful rule breaker investing. The funny thing is you just gave a lot of practical wisdom. And it's funny, but practical is rulemaking now because it's come full circle. That is it, my friend. I'm glad you said that because part of the irony and humor and keep in mind, you're tied to a fool today. And that's what fools do. They try to make people laugh. And part of the irony and humor is that what is actually daringly unconventional advice today is be patient, find greatness and keep adding to it. And that will work. And you'd think that I'd be offering something much more challenging. The idea you have to jump in jump out or what are the exact things you shouldn't buy or these kinds of things. And the truth is that if most of us treated our portfolios like we treat our sports team, that's a key analogy for me in rule breaker investing. Here we are NFL season. People go to the home stadium with the home jersey on and whether their team wins that game or loses that game, they're going to keep the jersey on and whether their team has a good season or not, they're going to keep that jersey on. But with their money, with their investing, they don't do that so many of them. They like jump in and jump out. And they don't just stay faithful and loyal and build up strong association with something they love. In this case, they're NFL team. But I would say you should love the companies Chipotle for some of us. Awesome company, great stock, great product for women, Lulu Levin, although men two these days, another great example of a great brand, Starbucks. These aren't just iconic brands. These are the best stocks that you could have owned over the last 25 years. And it's this same thing that works over the next 25 years, which is why I'm glad we're talking today. It's so funny. An ad agency called Radical. I'm a rule breaker to a degree. I bet you our most entrepreneurs are my friend. But if you go really watch my videos and if you watch my strategies and you see me on the floor with Fortune 100 companies 15 years ago and now start up some medium size now, there's a practicalness to my approach that is bold. And I challenge brands, but there's this practical reality of tried and true in marketing with human behavior and and triggers and hooks and things. There's a lot of practical in the Radical. And so I relate to that brother. That's really well said. And I will just say, brother, as a fellow entrepreneur, that this is a great news for you and your investing life as well. Because not only is that your professional life, Ryan, where you're providing that advice for people and you're basically trying to create great brands and great marketing, that is exactly the kinds of companies that we're looking to buy. Here's a great brand. This is a private company. Can't buy stock. But if I could have bought stock in Chick-fil-A over the last 20 years, oh my, I would have. But that's a great example within its industry. That's a best brand. But if you take that same mentality to every other industry, Netflix, you're going to see that those public companies end up being the best stocks. And there's one of their rule breakery thing that I want to make sure I throw down in a quick minute here because what's really key is that most people looking to stock market investing don't notice the brand or put any value on the marketing and the brand. There is no line on financial statements that estimates the value of Apple's brand. So you end up with all of the great brands being so-called overvalued in the world's eyes, people like I would never buy Tesla stock. And Tesla is an amazing global brand. If you take a rule breaker approach along with me, you favor branding and marketing. You recognize not only is it powerful for the company to succeed, but most investors aren't even looking at it. They're looking at some chart or zigs and zags online. They don't really pay attention to the branding. And there's no brand and price to earnings ratios or how we actually value stocks. So that is a deep rule breaker secret that I've let you in on. You already get it because you're living it, but it's great news for investors. Yeah, sales happen overnight, brands built over time. And that's back to the whole strategy of time. This show I had 99 listeners, 88 of them were my mom seven years ago, but I did stack the wins. I got better. The show gets better. The guests get better and you build brand. And then you get the co-founder of Molly Fools team reaching out and you get to talk to the legends that you respect. Well, and then he comes on and says the brand counts for more than people realize. And you're like, I already knew that. Yes. He's singing from the playbook in the back. He's like, a man in a Southern Baptist church when the preacher says something. Hallelujah. Yeah, I got to go in for you. What was something fun? The biggest thing you were right about, Molly Fools. We all have bombs, not just a dip, but maybe you really were wrong on it and something that you were absolutely right on. Yeah. Well, I mean, I would say I have been absolutely right on my best stock picks. That's pretty easy for me to say and obvious. But the key is that I never the first end to anything, but I'm usually early. Before I recommended Amazon, Jeff Bezos owned some Amazon before you and I could. But when they came public in that first year, I recommended it and my cost basis is 16 cents. And it wasn't 16 back then. It's had stock splits that have reduced my cost to 16. It wasn't ever a penny stock, but literally that's the cost basis for my Molly Fools members who followed me in 16 cents. And also really fun is Nvidia, which I would say has been the best stock of the last 20 years. I also have an identical cost basis thanks to stock splits and video has split 120 shares for one at this point. Several different, but that's the math. And so my cost basis on Nvidia is also 16 cents. When I talk about what makes me smile, these aren't things just for my portfolio. Our whole business is to share that out with people and say, here's our next pick and video Amazon. And what's kind of fun about those and then I'm going to tell you my dark moment. But what's kind of fun about those is when we recommend the most people like I would never buy that right now. Amazon, they're not making any money and video that thing's over price. It's too volatile. It's already tripled. And that's when we recommended it. And those are the ones that have gone on to make us both of those stocks are literally up more than a thousand times in value. And all I did is get in early and stay way past everybody else. And that's really what I'm talking about and rule breaker investing. And you know, that's what the Molly fool is trying to teach people to be patient. It's easy for me to think about something that went really poorly in 2001 as everything was going down including Amazon from 95 to seven. We had three separate layoffs at our company and each one we're like, well, we're not going to have to do that again. We let a hundred people go. We had 435 employees and we let a hundred people go and we're like, it's not going to get any worse than that. And it did a lot of our business back then. And I'm really speaking to the entrepreneurs here because it's about your business model. Our business was ad finance. We needed discount brokers like Schwab and Ameritrade to advertise on our site. And they started pulling back and they had never done that in our history. We're like, what do you mean? We've been killing it for you guys. We're bringing you so many new accounts. They're like, yeah, but have you seen the market? We're pulling back right now. And then a couple of them canceled all together and as an entrepreneur, we learned young people, the very painful lesson that you need to have a good business model for us as supported ended up not being stable for a business like ours. We shifted back to subscription where we started that paper newsletter for our parents, friends. That's really what we're running today, except it's digital. It's not paper anymore. But learning the hard, hard lessons of a shift and inflection point in your business model. And for us, we're market dependent, right? When the market gets killed, the model pool is not going to be having a good year. Good news. Market goes up two years out of three. And it almost always goes lower left to upper right over time. And so that's why I love my business, even though we take some school of hard knocks sometimes. As we close out here, David, any stock tips today, obviously, if anybody's paying attention notes, including myself, we got my AI friend and everything else we get to soon notes locally here being the show producer. I've got my high the brands. I already knew that, but a stick with the tried and true. Any stock tips, though, or anything under the radar that you could share? Sure. I'll give a couple. My own belief is you should start with 25 stocks, not the two that I'm going to throw out. And I can be completely wrong about these two, just so you know, but I have been right for a while. And I think it's still early days, even though these companies in some ways have blown up. So here come two companies that I call rule breakers. That means that the top dog and first mover in an important emerging industry, the first one I'm going to mention is Intuitive Surgical. Ryan, have you ever heard of Intuitive Surgical? No. I would think not. Most people when I ask them say no. And that's why I believe in this company because this is the leader as we shift from a world where human surgeons cut us apart with knives into robot assisted minimally invasive surgery, which started for men with the prostate gland removal for prostate cancer, then moved over into hysterectomies for women. And today is increasingly taking over many forms of surgery. And Intuitive Surgical is a company that has virtually no competition at scale as the whole world shifts to this form of surgery. So this is a long time holding of mine. This has been a fantastic company. And yet someone is talented and knowledgeable as you. And by the way, most other people I try to have an even heard of a company. So that's why I like this stock going forward. And then one other example, and I'm probably going to do this again. I'm going to ask you, have you ever heard of axon enterprise? No. Right. Raise your hand. Listeners, viewers, if you have more people do not have their hands out of 400 maybe. Yeah, exactly, which is again why I favor a company like this. This is another rule breaker. That means they're the leader of an important emerging industry. In this case, once I mentioned their top product, you'll recognize them. They started as taser as we move from law enforcement shooting people with bullets to zapping them non lethal weaponry. The taser obviously 20 years ago or so became an important tool. That same company, which once was called taser, then merged with the police body camera that many of us see law enforcement using today as well as armor. And all of those videos that law enforcement's required in many cases to shoot today as they go about their daily business. All of that video is going up into the cloud. And it's available at evidence.com where police departments subscribe to that video, month in and month out for years and years. This company has again virtually no identifiable competition. And it's doing something really important technological and emerging in this world. Those are two companies that I favor. Now again, if they both go down over the next year, I'm still going to be holding them. I'm never trying to be making short-term calls at all. I'm talking about becoming a part owner. We're wearing the home jersey at our NFL game. I'm proud to be a part owner of these companies. Thanks to the stock market. I've kept that jersey on for years. And it's going to stay on. Ryan, I especially love companies where if they're Coca-Cola, I can't find the Pepsi. And there is no obvious competitor to intuitive surgical or axon enterprise. So those are two I have for you. You know, Christopher Lockhead, you heard that. I don't think I do. He's the king, category king. He believes in creating categories of one. A lot of those principles that you just described. He's been a regular guest. I kind of go to the beat of my own drum. I form my own opinions. But if I would say there's one person that I would call a mentor of believing a lot of the same principles and then him crystallizing them for me, you and him would enjoy beer or coffee or whatever you have because you think alike. That's great. Well, I hope he's a stock market investor too, because I think we're really well rewarded. We're not jumping in and jumping out or trying to find a hot stock this fall. Yeah. We're talking about literally buying shares and then adding more and more over time and just staying with your companies in the same way you stayed with your sports teams. I bet Christopher's doing that and I agree with him that especially we're rewarded when we find companies category of one. There's a great line from the Grateful Dead, a Jerry Garcia. He said we were never trying to be the best at what we did. We were trying to be the only ones doing what we were doing. And there was the Grateful Dead back of the day saying, go ahead, bootleg our concerts. We don't care. Nobody else will let you record live, but you can do it for us, right? They understood open source decades before that phrase was known. So that's another great example. Great line. We were never trying to be the best. So all we do, we're trying to be the only ones doing what we're doing. Those are the stocks I'm looking for. Yeah. That's what I want on my tombstone. Yeah. He didn't live by the rules. He just tried to create the ones that made a great life for him. You bet. Yeah. I shared that. It's not going to be on my tombstone. I don't think it's going to be on yours. But I love the line. And I really do think that the more people, especially entrepreneurs, I think have this feeling, more business people than not have a feeling that what they do matters in this world, that we have agency, that you have free will that you can create. You've created a company. You've created jobs for other people. Keep going. Keep creating entrepreneurs have that savvy and that can do spirit. And that's why I find more great leaders in business than I find anywhere else, including politics for sure. You practice what you preach, brother. You've been doing it and providing a lot of value to a lot of people, making a lot of people wealthy. If they took your advice on the Motley Fool, I still have some stocks back from the day that it goes very well. That's what I want to hear. That's what we're trying to do for people. Good for you that you held. Yeah. I'm a holder or not a folder. David Motley Fool speaks for itself, but you mean he links or contacts anything ways people can learn more about what you guys are doing. I'm on Twitter X. If anybody wants to connect with me or follow me on at David G, that's my initial David guard at David G Fool. I'm on LinkedIn. If anybody wants to join or tap into me, obviously the Motley Fool is at Fool.com. Nobody else wanted that URL when we bought it 30 years ago. So we took it. And of course, what I most excited about is the book that I spent 15 years writing that just comes out this month. It's called Rule Breaker Investing. And that's basically me leaving it all out there on the field. Another sports metaphor. I'm swinging for the fences with that book and I'm not going to write any more stock market books. That's in all that stuff that I've done and believe. It's short and it's funny. So I hope people enjoy it. Rule Breaker Investing, we will have links to the book and all of Motley Fool's stuff here on the show. David, credible wisdom and really love what you've done the last 30 plus years with Motley Fool and appreciate you for coming on the show. Well, thank you, Ryan, and keep up the great work, reaching people and helping them add value to their businesses and their lives. There's a lot of crossover between what you're doing and what we're doing. I see you, brother. Thank you, man. It was a pleasure. And you know, to find us, Ryan is right.com. You'll find links to the book. The David's writing. I can tell you, it'll be great. All the stuff's always been great. David's an amazing writer. So I know you will get wisdom, advice, sound over time, build your brand, grow your stocks, live your life. We love you for making this number one. We'll see you next time right about now.