Blast From The Past, Vol. 12: ABB

0:00I try never to say never, but I'm nearly, nearly there with a few things. One is running for public office. I'm more drawn to the private sector where the vast majority of us work every day. I see immense value in what I call private service, serving others through the private sector, often finding it more enjoyable and rewarding than traditional public service. Another never for me is repeating a Rule Breaker Investing podcast. We've delivered a new podcast every week since July of 2015. That's 550 plus weeks in a row now without a skip or a repeat. Yet, continuously introducing new content can lead to neglecting essential, timeless truths.

0:46And that's why a couple of times a year, I revisit and highlight key lessons in our Blast from the Past series, ensuring both new and longtime listeners catch important takeaways, whether they're hearing them for the first time or as a reminder from years ago. Which brings us to this week, Blast from the Past, Volume 12, only on this week's Rule Breaker Investing. It's the Rule Breaker Investing podcast with Motley Fool co-founder David Gardner.

1:24And welcome back to Rule Breaker Investing. A delight to have you join me. Happy April Fool's Day. Let me be maybe not the first to say that to you, but we're recording the day before April Fool's Day. But this podcast comes out noon Eastern, typically on Wednesdays. And that means it's April Fool's Day today, our national holiday. I hope you make a foolish day of it. I'm really delighted to be bringing you the 12th in our episodic series, Blast from the Past. That means I've done 11 of these in the past, and here's how it works. I basically think about what were some important points that I made 3 years ago or 10 years ago, and I'm pretty sure nobody remembers what I said 10 years ago, and yet some of these points I think are very important, often pertinent here in 2026.

2:11So I like to bring back those points, which I've done 11 times before. For each of these episodes, I bring back five points from the past, a motley mix of frameworks or stories drawn from different periods, all brought to you here, in this case, in April of 2026. Because darn it, I think these things matter. And I hope you'll enjoy this week's episode. A couple of bookkeeping items before we start. Let me just mention that if you haven't already, I hope you'll subscribe to this podcast on Apple Podcasts or Spotify or Google Play. there are a lot of podcasts that say this every week I don't really because it gets boring I think but it is worth mentioning from time to time we have 919 stellar reviews on Apple Podcasts I'd love to see us crack a thousand here in 2026 you can help us by leaving a review throw me some stars let us know how we're doing I read every comment you can also follow us on Twitter at at RBI podcast you can also follow me on Twitter X if you like, I'm at David G.

3:14Fool. And speaking of promotional items, I'm excited to share that I'm heading to Ireland for Investicon. A little bit later this year, it's an event built for curious, engaged investors who want to keep getting better. Now, if you enjoy this podcast, just imagine a full day of big ideas, great conversations, and a community that loves investing as much as we do. That's what Investicon is all about, and I'd love for you to be a part of it. We've even set aside a special offer just for you. The first 20 Rule Breaker Investing listeners can get tickets for 399 euros instead of 499 euros. That's by using this code RBI20.

4:00That's right. RBI20 is your promo code. Check it out at investicon.ie. Investicon, spelled like invest with an I-C-O-N. On the end, this is an Irish website. I look forward to rejoining my Irish friends. I have a lot of Irish blood in me. It's always a pleasure to go back to the homeland. I hope to see you there. If you're up for a little investing adventure, come join us, investicon.ie, promo code RBI20. All right, five blasts from the past per usual. Here we go with blasts from the past. Number one, this one comes from April Fool's Day. The year was 2020, so this is exactly six years ago today.

4:43Our podcast that week was entitled Atomic Habits with James Clear. Of course, James' fantastic book, Atomic Habits. I think that if you didn't get a chance to hear Rule Breaker investing in James Clear together for one podcast about 68 minutes in length, I think you would love that podcast. But I want to bring back a particular line from James that really continues to make an impression on me here six years to the day later. So on that podcast, I had just quoted to James the following from his book. He said early on in his book, and I quote, becoming the best version of yourself requires you to continuously edit your beliefs to upgrade and expand your identity.

5:28And then a little later in the book, he says, and habits are the path to changing your identity. The most practical way to change who you are is to change what you do, end quote. Well, James went on to say in response to me quoting from his book, a lot of the following, some just key blasts from the past thinking that I hope you'll appreciate as much today as we did exactly six years ago to the day later. James said, most of what I write when people read it that resonates, that feels, I want them to feel like it's what I've experienced in my life. You know, I think it's the ultimate test of an idea, James said.

6:07Does it hold up in your real world? There are a lot of very beautiful theories, but do they actually hold water in practice? James went on, so to a certain degree, I feel like, yeah, I understood it. I didn't put it into words until relatively recently, but this core idea is around this concept that I call identity-based habits. And this idea that your habits are how you embody a particular identity. So every day that you make your bed, you embody the identity of someone who's clean and organized. And every time you do one push-up, you embody the identity of someone who doesn't miss workouts. Every time you write one sentence, you embody the identity of a writer.

6:53And ultimately, true behavior change, James Clear reminded us, is really identity change. The goal is not necessarily to run a marathon. The goal is to become a runner. Similarly, the goal is not to read a book. It's to become a reader. It's not to do a silent meditation retreat. The goal is to become a meditator. And so James went on, I think when you talk to people who've been through transformations, they say things kind of like, yeah, I used to have to force myself to get into the gym, but now I can't imagine not exercising. Or yeah, it used to take a lot of effort for me to meditate every day but now it's just part of what I do.

7:34And so what you're seeing there is it's been integrated into their lifestyles. It's become part of how they define themselves now. So James is reminding us here of identity-based habits. That's his phrase. Getting at the idea that every action you take is like a vote for the type of person that you want to become. And that's the real reason, the true reason, the deeper reason that habits matter so much. We often talk about habits as being the pathway to external results. They're going to help you make more money or reduce your stress or lose weight. But James Clear said on that podcast, the real reason that habits matter is they provide evidence of who you are.

8:21And so doing one push-up, it's not going to transform your body, but it does cast a vote for I'm the type of person who doesn't miss workouts. And no, reading one page is not going to make you a brilliant genius. It's not going to finish most books, but it does cast a vote for I invest in my own learning or hey, I'm a reader. And so our exchange at the close of that portion of our conversation, it was about continuously updating and expanding and upgrading who you are based on what you're doing. If you update your habits, you're going to update the way that you look at yourself because they provide evidence directly that you've just done that thing.

9:08And so there's a deep connection. James's own backstory, which if you don't know, is worth reading. His book is wonderful. You can also hear it some on the podcast too. But it's a great argument for letting our behaviors lead the way, starting small with small habits and letting that reinforce the type of person we want to be. Again, I think the big takeaway is every action is a vote, a vote for who you are becoming. And before I move on to blast number two, of course, I think about the opening to my book, Rule Breaker Investing, because the very first four words of the book are everyone is an investor.

9:48And forming the habit of being an investor is what part one of the book is all about. But I go on to say just on that very first page of the book, when addressing a room, I've said things like raise your hand if you're an investor. It's a trick question. It's going to catch those people who think investing is what other people do, some specialized class, not me or you, right? And I go on to say wrong. Put your hand up because everyone is an investor of both money and time. It's your choice to do this, not that. To spend here, not there. All of those are investments. even people starting out with just little money have just as much time in a day as anyone else.

10:33And so using time as your money's greatest ally is one thing that I wrote that book to do. So I think my big takeaway as a rule breaker investor is that every action is a vote. And every time you buy, every day you hold a stock and don't sell it is casting a vote for your future self as a disciplined, patient rule breaker. I would say you're not just trying to pick a stock out there as an investor. You're becoming the kind of person who thinks and acts long term, who buys excellence if you're with us here in Rule Breaker Investing, and who holds through volatility. Every action is a vote. All right, on to blast from the past.

11:20Number two, this one goes back to 2017, February 8th. It was entitled Looking Back, Last Year's Bear Market Picks. One of the things we did in that week's podcast is we were doing a review of Palooza, looking back at a five-stock sampler one year later. But that's not really what I'm speaking to here with Blast from the Past number two. I was reviewing this podcast recently, and I said something in October 2015, which was about a year and a half before my Blast from the Past here. I'd said out loud on the podcast, I even had my former producer Rick Engdahl play it on the podcast. I'd said, when I think of companies that are clearly evolving, I think about Tesla.

12:07Now, Tesla, a lot of us have heard of. It's Tesla Motors today, which was, in fact, the company's name back on October 21st, 2015, when I was speaking to this first. I wouldn't be surprised, though, I went on to say, as things continue to evolve, if Tesla drops the word motors from its corporate name. And so with this Blast of the Past podcast, which again was in February 2017, about two years later, my good friend of the fool, David Kretzman, had just dropped me a note and said, hey, David, did you notice Tesla just dropped the word motors from its name? of it's just Tesla now, and that had happened just recently.

12:50But it all put me in mind of what I really want to speak to here with Blast from the Past number two, one of my favorite lines about investing. And it comes from Kleiner Perkins, which is a celebrated Silicon Valley venture capital firm. And one of their watchwords is this, and I quote, we invest in order to predict the future, end quote. Now, a lot of people think it works the other way around. They think you have to predict the future first and then invest accordingly. And if you get it right, well, your stock's going to go up. That seems intuitive. That seems natural. But Kleiner's line is reversing that.

13:29They say we invest in order to predict the future. And I'd say this, I don't think I would ever have been capable of guessing, because that's what it really would have been, that Tesla would drop motors from its name unless I were an investor. Because when you put money on the line, when you become a part owner of a company, when you build your portfolio, what do you become? You become an observer. And I would say a much more interested observer, usually a much more able observer over time. And so what was probably running through my head back in October 2015 when I said that is this. Rule breakers, disruptive companies tend to morph over time.

14:20I didn't know then that SolarCity would become part of Tesla, which it did. I don't think I would have been saying back then that Tesla would be working on robots one day. But the idea that Elon Musk, a visionary if ever there were one, would continue to broaden Tesla's mission to expand its impact beyond cars? Well, it's not surprising that Tesla Motors would eventually become just Tesla. So I think you invest and I invest, we invest partly in order to predict the future. You know, when you own a business, you simply pay attention to it differently. You're going to notice shifts and patterns.

15:06You're going to care about new product releases. You're paying attention to the game of capitalism and business. You're watching what's happening out there in storefronts or online or that app on your phone. You care more than people who are merely indexing, who don't really care very much and are just, along with Jack Bogle, who's certainly one of our heroes here at The Motley Fool. but Jack did something the opposite of what we do. I think both can win but Jack taught the whole world not really to pay attention between one stock and another but just to buy them all as cheaply as you can and in some ways that causes people to disconnect and not pay attention and that's why being a rule breaker is so very different because truly investing sharpens your foresight.

15:56You don't predict the future then invest, you invest and that act turns you into a better observer of what the future is becoming. The best companies don't stay in their original box. Tesla Motors was not going to stay that for long. Investing means, I think, anticipating and benefiting from those morphs, those tweaks, those adaptations, those expansions, and specifically paying more attention than the average Jill or Joe. So, you know, I like this blast, particularly pairing with my first one from James Clear, because in a lot of ways, James was teaching us about identity formation. And this blast from the past from Kleiner Perkins teaches us about attention formation.

16:42So we're sort of building ourselves up together as investors. First, everyone is an investor. And now we're sharpening here with blast from the past. Number two, how we as investors see the world differently. Let's move on now to Blast in the Past number three. This one comes from the year 2024. It was a Great Quotes podcast, Great Quotes volume 18 on April 17th, 2024. It was entitled As You Like It, and I was pulling some of my favorite lines from Shakespeare for that particular Great Quotes podcast. And Blast in the Past number three comes from As You Like It, act two, scene one. and that happens to be the play from which I selected our Motley Fool name, so it's my favorite Shakespeare play of all.

17:30And Act 2, Scene 1, features Duke Senior. His words are part of his reflections on being exiled. He's been usurped from his dukedom, and he's been sent into the Forest of Arden. And yet, despite that misfortune, he finds solace, freedom from courtly pretensions. I would say more than just solace, a chance to live a more authentic, more interesting life. And here's the quote, Blast from the Past, number three, happy is your grace that can translate the stubbornness of fortune into so quiet and so sweet a style. That phrase, stubbornness of fortune, captures, for me anyway, the inherent uncertainties of investing.

18:22What's the market going to do tomorrow? What about next quarter? How about over the next five years? What's that stock going to report three months from now or three years from now? Shakespeare captures it perfectly, the stubbornness of fortune. And for those uncertainties to be translated instead into, and again quoting here, so quiet and so sweet a style. That for me is to hold, to ride out the cycles quietly and sweetly, to buy and hold in a world where most people don't. Most people think in terms of three months, not three years. Certainly the financial media thinks in terms of three months, not three years.

19:09And often the financial media is on the one hand setting the tone for everybody, but also, on the other hand, reflecting back to all of us our conventional wisdom. Most people think in terms of three months, not three years. And if they think in terms of three years, they're certainly not thinking in terms of three decades. Most of them, anyway. That quiet and sweet style, though, that's the rule-breaker style. And it leads to one of my favorite words in the English language. I'm pretty sure I called this out on that Blast from the Past podcast. Here's one of my favorite words, serenity. You know, when I say that word, it just calms me.

19:51It makes me think of the morning shower, that five to 10 minutes where, for many of us, we achieve our most serene thinking. That's where insights come. And what's the single best response you can make for your financial future in the face of market sell-offs? to buy. And that's not easy. When your instincts and the influencers, the influences around you are telling you to sell, buying feels, I would say, small f foolish. And by the way, that's why it works. I want to mention, I'm a fool too. I'm no hero. I feel the same emotions that you do when markets drop. It always feels bad. But the single great power tool that helps you translate the stubbornness of fortune into a quiet, sweet style is this.

20:46Dollar cost averaging. Saving regularly every two weeks, every month, every quarter, whatever your rhythm is, and investing on that same day, regardless of what the market is doing. As I've often said in the past, I'll say it again now, always be buying. ABB, baby. Always be buying. You might be averaging into the same stock over time, high and low. And yes, as rule breakers, we often add to our winners, which by the way is another contrary move. But this discipline, this rhythm is what creates that serenity. You know, when I did this episode, Great Quotes, Volume 18, a couple of years ago, I gave a call out to my friend Matt Hard, who is at 307Fool on TwitterX.

21:36Every Thursday, so far as I can tell, Matt comes on to TwitterX and posts the stocks he's added to that day. The markets are up. The markets are down. Headlines are swirling. Matt is there every Thursday, A, B, B. And that's the style. translate the stubbornness of fortune into something quiet, steady, and sweet.

22:07In a classroom of sodas, most stay quiet. Then there's Mr. Pibb, sweet cherry, bold outbursts, the kind of flavor that gets attention. Bold kick of cherry. Hey, yo, Mr. Pibb. on to blast from the past number four i'm going to call this one know your framework know your music for this blast i'm pulling from may 17th the year was 2017 anyone remember what i was saying that day i bet you don't which is the whole point of my blast from the past podcast that podcast was entitled Why Warren Buffett Didn't Buy Amazon. Because years ago, Warren Buffett was asked why he hadn't bought Amazon. He admired it.

22:56He admired Jeff Bezos. And then in a moment of candor, he said, in a word, stupidity. But I want to push back on that because I don't think Buffett should have bought Amazon. I think it's just a different genre of music altogether. Because what makes Buffett great is that he built his own genre. He finds great businesses that stand the test of time. He finds great teams. He generally leaves them in place. Even as Berkshire Hathaway makes acquisitions, he very typically leaves the existing management teams in place. He doesn't try to integrate them into the larger structure of his holding company.

23:36He buys them. He often just lets them run. And that's his music. When I step back, and this is as true in 2026 as it was in 2017, I see two dominant forces in investing. First, there's the Jack Bogle force. And I spoke to this briefly just some minutes ago, index investing, where it doesn't matter what stock you pick, just make sure you pick them all and pay nothing to do it. It's brilliant. It's served more people than any framework in modern finance. I'm very proud that we did some good time with Jack Bogle on a number of instances. My brother Tom interviewed him in his offices memorably. We spent time on the road with him.

24:21I've had him on this podcast. He's no longer with us, but very much is Jack Bogle and his amazing innovation and character still making such positive differences in this world today. And I think Vanguard is the largest asset aggregator, gatherer, and investor in the United States today and maybe the world. And so yeah, force number one, index investing has served more people than any framework in modern finance. And yet, It creates what I once called big, dumb money. Money basically flowing indiscriminately, money being given to index fund managers, which are these days just algorithms and computers, and they're just buying everything.

25:08There's no discrimination. There's no judgment. For a very cheap price, you get the whole market. And again, I've already spoken to the great benefits of that for so many people. And yet, there's no intelligent allocation of dollars. They're just going into every stock, generally kind of proportional to the size of that company. So that's force number one, index investing, head in the sand investing in the best and worst sense of that phrase. The second dominant force is the Buffett force, where it does matter which stock you pick. It's disciplined. It's selective. It's proven over decades. And yet, the Buffett force, his frameworks, have historically avoided entire categories on the market, especially what I might call technology.

26:02And so now let's put those two things together. So on the one side, force number one, you have, hey, don't pick stocks at all. Then on the other, the second dominant force of our time is you should avoid the most innovative and unpredictable ones. And if you put those two things together, what do you get? And I would say a vacuum, a vacuum where companies like Amazon, Netflix, Tesla Motors, etc. can thrive. Because think about it, the biggest pools of capital are either just buying everything or avoiding these kinds of stocks entirely. And that's where Rule Breaker Investing steps in. And it's just as true in 2026, by the way, as it was when I did this podcast in 2017.

26:54Our framework is different. It's not part of either of those two forces. Obviously, it's much more closely related to Warren Buffett's approach where picking stocks does matter, but we're picking completely different types of stocks for different reasons. I'm sure you already know trait number one of the rule breaker stock, top dogs and first movers in important emerging industries. We're not trying to play Buffett's music, and he's certainly not trying to play that music himself. We're definitely not trying to play Bogle's music. We're playing something else. So here's the point, the one I want to make stick.

27:29Don't judge one framework by another framework's results. I would say again, Buffett didn't miss Amazon. Buffett played his music, and he's always played it beautifully. Warren Buffett should never have bought Amazon. He would never. by Amazon. And as Rule Breaker investors, we played our music, Intuitive Surgical, Shopify, MercadoLibre, Chipotle, NVIDIA, Amazon. Knowing your music now here today in 2026 may matter more than ever yet because there are now more frameworks than I think there probably were nine years ago. There's passive indexing. There's quant strategies. There are now AI-driven portfolios, crypto-native approaches out there.

28:23Everyone is playing something. The mistake isn't choosing the wrong one in many cases. The mistake is just not knowing which one you're playing, or maybe switching mid-song. So I'm going to close Blast with a Pass number four the same way I did when I made these points back in 2017, speaking to why Warren Buffett didn't buy Amazon, because it holds up. I said, know your framework, know your music, know your genre, and then play it. All right, before I move on to Blast from the Past, number five, and close out this week's episode, let me just briefly recap our first four. James Clear, Every Action is a Vote.

29:08That was Blast from the Past, number one. Number two, Kleiner Perkins. We invest in order to predict the future. Number three, William Shakespeare from As You Like It. Happy is your grace that can translate the stubbornness of fortune into so quiet and so sweet a style. Or as I might say, ABB. And number four, why Warren Buffett shouldn't, wouldn't buy Amazon. and yet why you and I, why Rule Breaker investors did a lot of other Rule Breaker stocks too. Let's move on now to Blastman Pass number five, question responsibly. A few years ago, in fact, it was 2023, March 15th. So just over three years ago now, I had Warren Berger back.

30:00Warren authoring wonderful books like A More Beautiful Question. A questionologist is what Warren calls himself. And we did a revisit three years ago where Warren rejoined us. And one of my favorite questions to ask a questionologist is itself a beautiful question. This one's borrowed from Ralph Waldo Emerson. And I let off my conversation with Warren by asking him Emerson's classic question. What has become clear to you since we last met? It's a beautiful question, and anytime I haven't seen a friend for some years, it's a fun one, a fun angle to take. And by the way, you should be ready to have that aspect of you.