ChatGPT Asks & David Answers, Vol. 4

0:00This week, for the first time in more than a year, ChatGPT is back on the mound. And I'm back in the batter's box. Five pitches coming my way this week. Five questions I've asked AI to dream up. Each designed to make me think, challenge a rule-breaker assumption, find a blind spot, or send us all somewhere that none of us quite expected. ChatGPT asks, David answers, five questions, five swings, volume four. Play ball only on this week's Rule Breaker Investing. It's the Rule Breaker Investing Podcast with Motley Fool co-founder David Gardner.

0:44And welcome back to Rule Breaker Investing and welcome back Wednesday, September 16th to the one year anniversary to the day of the launch of my book, Rule Breaker Investing. I want to start this week by thanking every one of you who's ever read a page of the book, maybe read a chapter, maybe even read the book or listened to the audio book. Of course, that means so much to me. I loved writing my final stock market book. I hope it stands the test of time. I hope more people will buy it over the next five years than did in the first year, although I'm very happy with first year sales. I'm very proud to have international editions already out in the Korean language, in the German language and more coming.

1:23So I couldn't be more excited about Rule Breaker Investing. I especially want to thank fellow Fools Matt Hard and Andrew Gibson for doing a wonderful job speaking to the book and its merits on social media. Matt Hard at 307Fool on Twitter X. You're running a contest this week to give away a few free copies. Andrew, you're pitching in too for anybody who replies to your post on Twitter X. Anyway, that is such an above and beyond gesture. I just wanted to call it out. But thank you to everybody who's part of Rule Breaker Investing, which is a book, of course, and will surely outlive this podcast.

1:59And yet it's also a podcast, too. And thank you for joining me on this week's edition of Rule Breaker Investing. You know, one thing we do four times a year on this podcast is we do a game show. And next week, we're going to do the next rendition, the Market Cap Game Show coming to you next week. And I'm excited for you to play along, and especially if you're a new listener, a new viewer. get ready to get your market cap on starting next week. And if you don't exactly know what that means right now, well, we'll explain it all and play a game with you on this podcast seven days from now. I also want to mention last week's podcast, which I had so much fun doing.

2:38Thank you again to Rick Munares for joining me. It was 10 years later. That's right. We revisited five stock picks I made on this podcast exactly 10 years before. and we review the winners, the losers. We draw the key lessons. That's really the point of 10 years later. Although another key point of 10 years later is to outperform the S &P 500. It's not going to happen with every one of our 35 stock samplers and surely it hasn't. I've had some real dogs too, but it was a pleasure to show off the five stock picks last week and review how they've done. So if you miss 10 years later, I hope you'll listen in.

3:12And by the way, every 10 weeks on this podcast, we do the next one. So I'm already counting down the weeks to five stocks to put under the tree, which were done in December of 2016. Speaking to other highlights of this podcast, I would be remiss if I didn't mention that two weeks from today, we'll be doing our Rule Breaker Investing Mailbag. Our email address is rbi at fool.com. And as a few of you have discovered, we're not just taking emails these days, although we always will. We're also taking audio mailbags. So if you'd like to have your voice shared with others here on Rule Breaker Investing during one of our mailbag monthlies, I'd love to have you join me.

3:52Yeah, just drop an audio file. My talented producer, Bart Shannon, will receive that through an email just as well as any texts that get sent our way. It's really fun to respond to audio mailbags. So I'm playing that up here a couple weeks in advance. All right. Well, this episodic series, ChatGPT Asks, David Answers. This episodic series began back on June 5th of 2024 when I asked ChatGPT to come up with five of the most beautiful, challenging, inventive, valuable, provocative, and or capital F foolish questions it could ask me about Rule Breaker investing. Well, ChatGPT asked and David answered.

4:38That was two and a half years ago. And we had enough fun and we learned enough together that I brought it back later that year. And ChatGPT Asks, David Answers became an episodic series by volume three, which was in April 2025. We turned the questions into baseball pitches. ChatGPT takes the mound. I step into the batter's box and we see what happens. The point, by the way, isn't to quiz me on things that I already know. it's certainly not for chat GPT to lob me five softballs. The point is to use AI as a provocateur, to ask questions that might uncover a blind spot or challenge an assumption, reverse something I normally believe, or simply send us all somewhere, as I mentioned at the top, nobody was expecting us to go.

5:25So sometimes it's a hardball, sometimes a curve, sometimes something downright screwy. And yeah, there are knuckleballs from time to time that could flutter just about anywhere. So five pitches, five swings, and I hope a few thoughts worth taking home from the ballpark. Let's get started. All right, especially for baseball fans, and I realize not everybody is, but especially for baseball fans, I asked ChatGPT to pick its pitch type and name that pitch before it throws me the question. So pitch number one, Chad GPD has chosen a change up. And here we go. It asks, what advantage did 30-year-old David Gardner have as an investor that 60-year-old David Gardner no longer has?

6:15And what advantage does 60-year-old David have that 30-year-old David couldn't possibly have had? And that is pitch number one and the change up. And I want to first of all say thank you for the question. I appreciate the question. It was fun to think about, you know, a change up because I think we're playing with time here and changing speeds. And this is a good opener. It's investing focused. And so as I think of the first half of the question, what advantage did 30-year-old me or you have as an investor that 60-year-old me or us no longer has? And the obvious first answer that comes to mind is time.

6:57That 30-year-old had 30 more years to compound his returns than I do today at the age of 60. Now, I'm hoping to hit at least 90, which means I'm still looking 30 plus ahead and I'm invested that way, fully invested in stocks as I always have been. So every time the market rages upward, it's taking all my money with it. And every time the market gets cut in half and that's happened to my money gets cut in half right along with it, I usually do worse than the market in bear market periods. So that's something that's been true of me my whole life long since I started investing at the age of 18. and so now 42 years later with all the ups and all the downs, I couldn't be more delighted to see where I am today.

7:41And yet, I have to admit, I don't have as much time as I once did. And so time, of course, equals compounding, which equals bigger and bigger numbers as we go. The more years you have to invest, the more time you have to let that money, let that oak tree grow. And it's worth pointing out then to all my younger listeners or to all my older listeners who are connected to younger people, which pretty much means all of us, the earlier you can get anyone in your life started, truly investing, I would say not trading, the opposite of investing, I would say truly investing, the better off they'll be and the happier and more fulfilled you'll be, whether it was you or someone you gave that advice or an opening$1 ,000 to their account to.

8:32The happier the world is, the more of us invest, the earlier that we start. So 30-year-old David Gardner had a 30-year head start on me. And the good news is it was I. And therefore, I have been invested all the way through. And yet I have to admit, I simply don't have as much time left to compound my returns. I think there was a second advantage that 30-year-old had. And I would say that 30-year-old, relative to me today, was more avidly following not just the markets, although he was, but also the world itself. Technology, the gains, the changes. The internet was just upon us 30 years ago. We're talking about the mid-1990s.

9:16And that 30-year-old version of me was an entrepreneur who was a real believer in the new medium. And certainly not everybody was. There were a lot of skeptics who doubted that the internet would ever really scale or become something. And I realize to younger ears that may sound really silly today, and yet that was the case. And so I was avidly following how technology was being reshaped, what it meant for our culture, and therefore what stocks you and I would want to be invested in, what companies we'd want to be part owners of going forward. And that's just as true today in the sense that I care just as much about how technology is shaping the future and I care just as much about my investments today as I did back then.

9:57But back then, I was constantly on the hunt for the next stock. And since I no longer pick stocks on a regular basis, formerly at The Motley Fool, that simply is not true of me as much anymore. And I think it's a great advantage to be always on the hunt. I know many of you listening to me today are actively on the hunt, and I hope we're still delivering in a way that you value as a weekly listen. Rule Breaker Investing, whether you catch us on the weekends jogging or listen to us religiously as this podcast comes out pretty much every noon Eastern, every Wednesday. And yet I have to admit, I'm not following as actively.

10:35I'm not needing to make my next stock pick or my next three picks, which is what I was doing every month. Three individual stock picks every month for The Motley Fool. In addition, 10 best buys now, five for Stock Advisor, five for Rule Breakers. There is no substitute for being actively in the game. And while I'll always be in the game, I'm not as active and avid as I was as a 30-year-old. So that's, Chad GPD, that's another advantage that 30-year-old David Gardner has that 60-year-old David Gardner no longer has quite so much. Now, the second part of the question reverses it. What advantage does 60-year-old me or you have that 30-year-old us couldn't possibly have had.

11:20And I would say first and foremost, what comes to mind is that when I was 30, I was imagining what might work. I was believing that six traits would serve me well. The six traits that I was writing about 30 years ago on our site in the 1998 book, which is 28 years ago now, Rule Breakers, Rule Makers, where I first laid out the very six same traits that I'm using today as a stock picker that I wrote about in Rule Breaker Investing. When it came out a year ago today, I'm still using those exact same six traits. And yet back then, I didn't have results. I had some early results. I had some intuition.

12:02But it's impossible to have results at the start of a journey. 60-year-old me can now look back and see what worked and what didn't. And of course, I'm happy to say the reason I'm sitting in front of you today talking is it's worked more often than it hasn't. Otherwise, I'd be the first to encourage you not to listen to this podcast or show up at fool.com. But the good news is now I've seen that things that I intuited 30 years ago were right. And I especially think of those six traits of the Rule Breaker stock. Again, first written about 30 years ago, right around right now. And now I can look back and say overvalued trait number six was absolutely right.

12:46Amazon.com, AOL back in the day, Netflix, later on Tesla, NVIDIA, the list goes on. Intuitive Surgical, companies that were called outrageously overvalued, still true today, Palantir, called outrageously overvalued. overvalued. And yet I was saying, I actually think that's a buy signal. If you see the other five traits of rule breaker stocks present, of course, there are some stocks that are genuinely overvalued stocks I would never want to own anyway. But when you find true blue rule breakers, you see those five traits that I've written about and talked about ad infinitum on this podcast, et cetera, over the years, when you see those first five traits, and then the whole world, or at least a lot of financial commentators are telling you that stock is either A, overvalued, or B, so overvalued, priced for perfection.

13:40The list goes on of those catchphrases you'll hear people use. That actually, 30 years ago, I was saying, I think that's actually a buy signal. And now I can look back and say, that's true. I can also look back over 30 years now and say how many short-term players there are in the market. They are not investors. They are traders. The vast majority of institutional money moving on our markets every minute, not just every day or week, but that too every minute is driven by incredible short-termism. You're seeing people using zigs and zags on stock charts. They don't actually care what the company is that they're briefly invested in.

14:19Briefly being the key word. They're just in it for a much shorter time period than I think, I hope, you and I are. And I now know that we have huge advantages as long game players as rule breakers. I couldn't have known 30 years ago just how many people were playing that game. And by the way, just as many short game players are in the market today. And I'm sure there are other things I could observe that I now know with confidence at the age of 60 that I couldn't have known with confidence at 30. Maybe I'll throw in one more for now. And that is that I would say people generally underestimate just how tall the best trees that we plant can grow.

15:03The best investments that we buy. Earlier stage, when possible, people have a hard time recognizing just how many times those companies can grow in value. I've now picked for Motley Fool members two 1 ,000 baggers, both Amazon and Nvidia, both of which I happen to have the coincidental cost basis of 16 cents for each. At the time, I would have had no idea that they would be 10 baggers, let alone 100 baggers. But now I know that you can make 1 ,000 times your money if you find the right stocks and have the so-called buy discipline that I hope you'll have in a world where everybody else is talking about sell discipline, if you care more about what you're buying than when you sell, I think you're positioning yourself well.

15:53You have to find the great companies of your time. It's not that hard when you look around. And even more important, you have to hold those stocks. You will never get a hundred bagger unless you're willing to hold through probably at least a few drawdowns of 50 % or more. That means your stock is going to get cut in half more than once on your way to stock market glory. And by the way, you can do better than 100 times your money. And I wouldn't have been bold enough to have said that 30 years ago, but now I know, now I can see, and I don't think the next 30 years will be any different in that regard.

16:29We'll see. I'll know more at 90 than I know at 60, but thank you for pitch number one, Chad GPT, the changeup. All right, on to pitch number two. Yeah, I'm sorry to say, Chad GPT is throwing me a little chin music with pitch number two. It is entitled this pitch, The Brushback. And for people who don't follow baseball, what that means is Chad GPT is throwing me a pitch pretty much right at my chin, brushing me back off the plate. I'm probably dropping my bat and diving out of the way because this is a brushback pitch. Here it is, pitch number two. ChatGPT asks, which rule breaker investing principle of yours are you most worried could become less true over the next 20 years and why?

17:19So again, this is a brushback pitch. It's encouraged me to interrogate my own philosophy. And there are lots of possibilities because over any 20-year period, surely things can change. And while it's increasingly difficult in my mind to predict the world two years ahead of where we are right now, let alone 20, nevertheless, it's worth asking ourselves, you and me, what principles do we hold dearly today that could be compromised or become less true over the next 20 years? Now, let me review each of the six traits of the Rule Breaker stocks, which I've earlier foreshadowed. I'm going to go through each right now and briefly think about whether I'm worried about that for the next 20 years.

18:04So the first one, trait number one of Rule Breaker stocks, is top dogs and first movers in important emerging industries. And I really don't think that that's going to change meaningfully. I think it's very important to be focused on the leaders. If you're not the lead husky, the old line goes, your view never changes. I love the lead huskies, the sled dogs out there that are leading us, leading our sleds, leading our portfolios into amazing, unpredictable places because they are in the lead position of the dominant world-changing technologies of our time. And there are now many, not just about AI as much as we may hear about AI these days.

18:43There are so many different technologies that are on the bleeding edge. And I don't think it's going to change at all over the next 20 years that that is a principle we should be following. The second one is having a sustainable competitive advantage. And that will be just as true 20 years from now as it is today. The third, trait number three of Rule Breaker stocks is stellar past price appreciation. And I'm very convinced that in contrast to most people looking to buy low and sell high, if you and I as Rule Breaker stock pickers are instead looking to buy high, that means buy the so-called expensive stocks that have actually ironically done very well before we buy them.

19:21not a great feeling sometimes to be researching a stock as it goes up 30 to 40 percent in the few months leading up to your buying it a lot of people think at that point wait it's already up 33 percent since i started started researching it a few months ago i should wait i've missed it i'm never going to buy that stock a lot of people conclude and yet trait number three reminds us that's actually for rule breakers that is a great buy signal very contrary thought i think that'll be just as true 20 years from today. I'm confident in that one. Trait number four of Rule Breaker Stocks is that we're looking for excellent people.

19:56It's the human capital. It's the CEOs or founders. It's the backers, the VCs. It's the people, stupid. I sometimes say not so much the stock chart that people are looking at or even the products or services or industry dynamics. It's the people that make the decisions that run the companies into the ground in the worst cases and up to the moon in the best. And I think it's going to be just as true 20 years from today. Now, I will say that a lot of the decision making over the next 20 years may well be taken over in part or in some cases in whole by artificial intelligence. So if I were to think of these six traits and which one is possibly most possibly likely to change in some way, it's not a way that worries me, by the way, Chad GPT, since you said, What am I most worried could become less true?

20:46But I think that's of these six, that's the one most likely to be different. We're going to want to ask who is making the decisions and are decisions being made well? It will be just as competitive a world, possibly an even more competitive world 20 years from today. I expect it probably will be even more competitive then. And so thinking about who's making the decisions is going to matter a lot. Now, when I say that, a lot of us might be thinking, you know, CEO-like decisions and strategy decisions, but that's just one small part of running a company. A big part of running a company is having a winning culture, creating a place that people want to work at, that people feel energized to work there.

21:28It's not just about the product launches or competitive decisions made against a competitor. or a lot of it, is managing the internals. And I'm not sure that AI will do any better of a job there than the best humans, people full of heart and empathy. It'll be interesting to see how AI evolves. I wouldn't ever gain say that AI can acquire those things and be really good. But I think those human traits and that human dynamic, emotional creatures that we are, I think that's going to count for a lot still 20 years from now. But again, some of the decision-making and some of that human capital that I think about with trait number four of the Rule Breaker stock may morph.

22:10And so it's worth pointing that out. The last two I don't think are going to change either. I think we're still going to care deeply, trait number five, about strong consumer appeal. That is to say, brands are going to matter just as much, I think, 20 years from now as they do today as they did 20 years ago. And of course, that concept of Rule Breakers being overvalued, I feel very confident that that will be just as true 20 years from now as it is today. So, ChatGPT, you were asking me which Rule Breaker Investing principle of mine am I most worried could become less true? And I felt like I wanted to run through the six traits of Rule Breaker stocks, but I do notice you wrote principle.

22:50And if you really know my work, ChatGPT, then you know that the principle, when I use the word principle, I'm thinking not about stocks or truisms or truths. I'm specifically thinking about portfolio management principles. That's the context under which I use principles in my work and in my book. And so just to give a quick answer then to the brushback pitch here, I'm not going to review those, but I would say of the six portfolio management principles that I put out there, the one I'm most worried could become less true might be portfolio principle number six. and that is to review quarterly, I tell all investors as I try to do myself, to review quarterly and manage accordingly.

23:36And I will say that I think the world is speeding up. I think faster decisions are needing to be made in part because technologies themselves are being dreamed up and discovered faster. They're being deployed faster and they matter faster than ever before. and the speed feels not quite breathtaking yet, but it feels stressful to me. And in some ways, that could mean that the degree of attention that serious investors need to pay to our portfolios could be sped up. And if that were the case, that would worry me a little bit. I kind of hope that won't be the case. I like to think some of my favorite members at The Motley Fool just check in a few times a year with their portfolio.

24:22I've always said, and I say to you now, I check in every day with my portfolio. In the same way, I check in every day with my favorite baseball team or sports teams. I love to follow the game of sports. I love to follow the game of the markets. So I don't trade every day. In fact, there are whole years that go by where I don't make a single trade. So I'm always fully invested, never particularly active there. But I follow every day. and I don't become tempted to take actions just because I personally follow every day. I realize that's not true of all of us. I certainly hear from members, both on this podcast and mailbags.

24:58I meet people in person. I've encountered so many people over the years who worry that if they were to follow their portfolio more actively, they would be more active in their management of it. And I'd be the first to say, that can be a mistake and try not to make that mistake. But if I were to worry about any of my six portfolio principles, that might be the one that I would think about. And I myself will resist the inclination to feel like I need to be much more active following the markets more so than I am today or more active in the management of my own portfolio. There's my answer to the brushback pitch.

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26:25One scam can cost you everything. Protect yourself now. The first 100 users get 20 % off with code RULE20. That's RULE20. at coveron.com slash rule 20. Now, for those of you who really know baseball, you know what an EFAS pitch is. So when I say Chad Chiviti has selected an EFAS for pitch number three, you know exactly where I'm headed. But for the majority of us who probably don't know what that word means, we're referring to a pitch where a pitcher throws the ball very slowly, very high up in the air in order to get it all the way from his hand to the catcher's mitt. So an Ephus pitch is sort of a comically high, slow pitch, typically thrown by people who are not professional pitchers.

27:16If you ever see a ball thrown to open up the game, let's say during a pregame ceremony, they have some noteworthy stand on the mound and throw out the ceremonial opening pitch. Those are Ephus pitches most of the time. Sometimes pitchers try to surprise hitters with an Ephus pitch, but usually not. Now, does this EFIS pitch surprise me? Does it surprise you? Let's see. Here we go. Pitch number three. JatGPT asks, you may learn the exact December 31st, 2046 stock price of one company, but you're forbidden from ever owning it. So which company do you choose and what are you hoping its price tells you about the future?

28:02All right, an IFA's pitch. Love it. So basically 20 years from now, what one stock price would I love to know, but I'm not allowed to own it, but it would tell me something. It would tell me something really helpful and important about the future. This is probably the one I thought about longest when I saw the five pitches. And even though it's the IFA's pitch, it's the one that I find the most interesting and challenging. My gut answer, I realized, is invalid because my gut answer was going to be that I pick ticker symbol SPY. That would be the S &P 500 ETF, basically the index fund that tells me how the stock market has done.