9 Foolish Truths I Hold to Be Self-Evident: 2025

0:00Amazon bietet allen frischgebackenen Eltern in den Logistikzentren extra Familienboni. So wie Anton, der gerade seine neugeborene Tochter im Arm hält. Ihr Glucksen ist für ihn das schönste Geräusch der Welt. Das heißt, vielleicht ist das Geräusch das schönste von allen. 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?

0:47Well, 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, re-emphasize at least every two years. And 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, which means checking my Apple watch here, which means, yeah, the time has come once again. Time for really one of my most important podcasts that I ever do for you.

1:30It's time for nine foolish truths I hold to be self-evident. This week only on Rule Breaker Investing. It's the Rule Breaker Investing podcast with Motley Fool co-founder David Gardner.

1:47Welcome 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 Rule Breaker 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 rule breakers 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.

2:30I mean, I might remember how much fun I had here with world-class novelist Amor Tolles, 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. You know, a lot of podcasts, I think you can just start in the middle. I mean, 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.

3:18And 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 T.S. Eliot, is our beginning. My nine self-evident foolish truths. Let's get started. Fuller self-evident truth number one 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.

4:07We'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. 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. Yeah, 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 a dollar a minute to place a long-distance phone call home from a big, clunky wall phone.

4:58Today, we can connect with anyone around the world by video, wherever we're standing, or flying on an airplane, pretty much for free. And 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. 50 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.

5:46Sometimes 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. And 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.

6:38Whether 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. So 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.

7:24They 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 yeah 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 one 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.

8:11In 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 rule breaker investor needs to develop. It's actually habit number four. It's all right there in chapter number four 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 10th 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.

8:48And 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. So 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. And those are quickly, first, that they value purpose, first and foremost, even over profit.

9:27Second, 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 three, 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.

10:19And fourth, conscious capitalism creates great corporate culture. They're the companies everyone wants to work for and with. So I want to make sure that you get all of this, and that's why I packed it all into foolish truth number one. 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. And many of the best businesses of our time do this every day. And as investors, these are the ones that should have us sitting up in our chairs, getting excited to buy and to hold.

11:08Foolish self-evident truth number one, 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. All right, fuller self-evident truth number two. I'll just call it by the watchword I often use, which is optionality. And so the truth is value optionality. Consider it, look for it because it's underrated and underappreciated and it runs deep.

11:53Truth number two 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.

12:39Looking 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 G-O-O-G. I did point out recently on this podcast, I'll point it out again now, I think the company should change its ticker to A-T-O-Z, as in A to Z, you know, A to Z, like the Alphabet. Anyway, Alphabet is YouTube, it's GV, that's Google Ventures, startup financing, it's DeepMind AI, and it's Fitbit.

13:30Remember Fitbit? Yep, Alphabet bought one of my poorer performing Rule Breaker 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 kind of 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.

14:24It'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. And 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. So to conclude then, truths number one and number two have been about business itself and the businesses themselves.

15:07So next, we're going to move on to the market. Foolish self-evident truth number three, 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 to 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.

15:55I 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. And 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.

16:36Well, you'll see. I have an enviable track record with my market predictions, and you can too, so feel free to copy me. Yeah, I've thought the market would head up this year in 2025, and so far anyway, I've been right once again. Let's look at the downside of market drops, Because, yeah, 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. So, yeah, you need to understand that's how it works sometimes. It can be nasty, or it could be rather mild.

17:20It 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 five, 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 four. 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 All right, I'm guessing a minority of us have both hands up right now, so let's make sure that we can all get our hands up about three minutes from now, except, of course, the drivers.

18:34I even gave this eternal verity an eternal position in chapter one of my new Rule Breaker Investing book, which is the inspiration for Foolish Self-Evident Truth number four. Here we go. Let's paraphrase Jack a little bit. So 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 rearview mirrors in life. they're looking backward as paddle, paddle, paddle, they go forward through time down the river of life.

19:23So 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, 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. Good on you for getting your money aligned right there too. But I've also said to close foolish truth number four, 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.

20:16And 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 to 10 percent annualized over long periods of time. And that includes every bad, sometimes even nasty bear market right in those numbers besides 9 to 10 percent 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.

21:01Sometimes 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 four, the rowboat syndrome. Okay, now raise your hands because I think we all know what the rowboat syndrome is.

21:50And thank you, Jack Bogle. Did archaeologists discover Noah's Ark? Is the rapture coming as soon as the Euphrates River dries up? Does the Bible condemn abortion? Don't you wish you had a trustworthy academic resource to help make sense of all of this? Well, I'm Dan Beecher, and he's award-winning Bible scholar and TikTok sensation Dr. Dan McClellan, and we want to invite you to the Data Over Dogma podcast. Where our mission is to increase public access to the academic study of the Bible and religion, and also to combat the spread of misinformation about the same. But, you know, in a fun way. Every week we tackle fascinating topics.

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22:55Foolish Self-Evident Truth Number 5. That'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. So 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 and 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 so 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.

23:55Whenever 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, oh, 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 a thousand 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.

24:33And 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 whom 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.

25:22But 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 rude for the word invest is investiri that means to put on the clothes or to wear the clothes of and 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.

26:15And even more than your sports teams, in most cases, I think you should love the companies that you're invested in. And 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. So yeah, 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.

27:12If 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.

27:53Henrik was thinking about that Latin word investire and clothes and clothing. And 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.

28:39Hence, 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. End quote. And that's, by the way, what turns a T-shirt test into a T-shirt challenge. So thank you for that, Henrik. And the Rule Breaker investor should have no problem with this.

29:27We 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 found a great team, stick with it. And now you know the Latin root investere. Now you know what you as an investor are doing. And 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 his challenge if you like Alright, 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.

30:28Let'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. So foolish self-evident truth number six. 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.