Great Quotes, Vol. 22: A Nation Forever Young

0:00Recurring series have long been a staple of Rule Breaker investing, inspired years ago by stuff like David Letterman's Top Ten Lists and Saturday Night Live's Weekend Update. One of my favorites is great quotes. Sometimes I theme these episodes, Shakespeare or Buffett or Entrepreneurs, and sometimes we simply gather together five quotations that have recently stopped me in my tracks. And that's today's episode. Five great quotes from remarkable thinkers. Five ideas that I hope will make us all a little smarter, happier, and richer. Only on this week's Rule Breaker Investing. It's the Rule Breaker Investing Podcast with Motley Fool co-founder David Gardner.

0:49Welcome back to Rule Breaker Investing. A delight to be with you here. still I would say here in the northern hemisphere we're right in the dead middle of summer. I realize summer according to the meteorologists starts on June 1 and according to the astronomers it starts on June 21 or so but right here on July 7th it feels kind of peak times anyway. For me I hope you're having a nice summer or if you're one of our southern cousins I hope you're having a delightful winter. This is Great Quotes, volume 22. Before I start, I want to mention I really enjoyed being on someone else's podcast in the past week.

1:29So if you want to hear me talk, not on Rule Breaker Investing, and not necessarily always about Rule Breaker Investing, but I got to join with host Caleb Silver and his wonderful podcast, The Investopedia Express. That was a lot of fun. Breaking investing rules with the ultimate fool, he called it. So if you don't get enough of me on this week's podcast. I hope you'll enjoy my conversation with Caleb Silver, who, as I tweeted out, is a real pro. And that was a fun conversation. Well, this is going to be fun, too. I'm getting to share with you five quotes that I've queued up over the course of the last months and year or so.

2:03You know, I make a real point of making lists as I go through life. I use Evernote primarily for my lists, but I'll just come across something and I'll be like, oh, I'm going to put that up on the list and it'll be a great quote. And then eventually the list gets big enough and I decide it's time to do a great quotes episode and that's where we are this week. So I have per the history of this podcast series generally I've presented five over and over. This is volume 22, 11 years in. We do this about twice a year and this is my most recent volume. Of course every time I do a quote one of the five it's always never been done before so I'm always trying to bring you new material.

2:39I would get bored if I were rehashing material. Of course, there are themes that I rehash over and over. I'll probably do that some this week. Can't help it because when you zoom out one level, all information just becomes categorized and slotted in my mind into the various ways that can be used to help you and to help me. So themes will recur, but individual nuggets, well, each, I hope, is its own little piece of gold. Let's get started with great quote number one. This from a book I talk about a lot. It's Warren Bennis' book on becoming a leader. Warren Bennis, my favorite writer on the topic of leadership.

3:15I've only read about a book and a half by him. He wrote a lot of books and a lot of essays, and he was a great thinker on leadership. And this is maybe my single favorite Bennis quote, because early on in his book, he's talking about self-knowledge and how we're all on a quest our whole lives long for self-knowledge. I don't remember whether he mentions this, but I believe it's true of the Greek oracle at Delphi in ancient Greece. It was scrawled on the side of the Greek oracle at Delphi. Early graffiti? Know thyself. Of course, it was written in Greek, but know thyself. A lifelong quest for all of us.

3:51And taking that up, Benes presents his four lessons of self-knowledge. They're brief. So I packed them all into a single great quotation. Here we go. Number one, Warren Bennis, quote, the four lessons of self-knowledge, they are one, you are your own best teacher. Two, accept responsibility, blame no one. Three, you can learn anything you want to learn. And four, true understanding comes from reflecting on your experience. Well, I could light up a whole podcast on any one of those because each is so true and so profoundly true and worth thinking about. So I'll be giving a short shrift here as I glide by with a few thoughts on quotation number one.

4:42The first one naturally for me goes to investing because that's the real heart and soul of this podcast and always will be. And I just think about self-knowledge preceding investing. So to me, as an investor, I'm reading Bennis's quote. It's really a quote about becoming an investor. Accept responsibility. Lesson number two, blame no one, Bennis writes. And that makes me think about people that I've met before who blame the Fed or they blame short sellers. They might even blame CNBC or just the market overall. You can almost hear echoes of that blame in so many things that run through our society.

5:25And yet I have been dedicated for the last couple of decades since I read this book, I've been dedicated to trying in every context to accept responsibility, blame no one. And as an investor, that strengthens you so much because you take responsibility for your losers. Losing to win is maybe my favorite, one of my favorite sections of my short book, Rule Breaker Investing, published last year in September. Losing to win, how many bad stock picks have I made? And I tallied them all up and came up with a really sad statistic, which I originally presented on this podcast, which is that in the history of the Motley Fool Rule Breakers service, as I picked over 20 years, I had 63 stocks that had lost 50 % or more.

6:12And that was the bad news. And it's horrible. Even when I say it, I cringe a little bit as I say that. But the good news, and those who've followed me, regular listeners will know where I'm headed here. The good news is that I think my 63rd best pick back then was up 400%. So that was my 63rd best pick up 400%. The most you can ever lose is 100%. And I, of course, am drubbing myself for my 50 % losers. But when you can make so much more than that, you start to realize that losing is highly overrated. And part of the process of winning is losing to win. And part of the process to becoming a successful investor is to accept responsibility, Bennis says, and blame no one.

6:56And before we move on to quote number two, I'd be remiss if I didn't speak to this one as well. Lesson number one of self-knowledge. you are your own best teacher. And I love that line because investing is ultimately apprenticeship by experience. Nobody can just hand you conviction. You need to earn it. And there's nothing like putting the reps in in any context in life. When you use a muscle, it gets stronger. If you don't use a muscle or your brain, it gets weaker. It's all about putting the reps in, in my mind. And you are your own best teacher. I certainly didn't take any investing courses in college.

7:37I am a literature major. I took no business courses in college. I decided after college as my own best teacher that I should finally understand accounting a little bit more. I'd never taken an accounting course, but picking up the book, How to Read a Financial Report by John Tracy back in the day and coming to understand how income statements connect with cash flow statements, how the balance worksheet works has been invaluable for me ever since. So something like 40 years ago, I finally decided I should learn financial statements. And we are our own best teacher and self-knowledge lesson number three, Benis, as well.

8:11You can learn anything you want to learn. So I hope that great Benis quote will stick with you. Any one of those four lessons, I didn't even really speak to number four, true understanding comes from reflecting on your experience. But if I were to ding myself on any one of these, I'd say I probably don't spend enough time reflecting on my experience. Maybe that's true of you too. But true understanding comes from taking the time to ask, what just happened there? What can I learn about you or about me from whatever just happened? Anyway, those four lessons, each one of them is so valuable and taken together into a single quote.

8:49Well, that is great quote number one for Great Quotes, volume 22. Let's move on to number two. This one I first came across in the wonderful book Building a Second Brain by Tiago Forte. But in that book, Tiago is quoting Annie Murphy Paul. Annie wrote a book called The Extended Mind, and that is where quote number two comes from. And she wrote, and I quote, We extend beyond our limits, not by revving our brains like a machine, or bulking them up like a muscle, but by strewing our world with rich materials, and by weaving them into our thoughts. End quote. I'm going to say it again, we extend beyond our limits, not by revving our brains like a machine, or bulking them up like a muscle, but by strewing our world with rich materials, and by weaving them into our thoughts.

9:42Now, I realize I just came out of quote number one saying it's all about using that muscle and the ones we use grow and the ones we don't atrophy. But ironically, Annie is saying here that we extend beyond our limits not by revving our brains like a muscle. She's really speaking to the environment that we find ourselves in, the environment that we can design our way to live into. James Clear's wonderful book, Atomic Habits, one of James's great points about forming good habits is it's not about you or the habit. A lot of the time, it's about the environment that you find yourself in. So design yourself into good habits.

10:22I have a friend, David Epstein, writer of the wonderful book Inside the Box. David says he's somebody who his whole life has been a very successful runner. He's in great shape, not that much younger than I am. He's in great shape, much better than I am. And he says, I go to bed with my workout clothes on because the next day I almost have no excuse not to work out early in the morning. That's a simple example of strewing our world with rich materials and weaving them into our thoughts. This quote is really much deeper than you might initially realize when you think about it. You know, I was thinking about how just great quotes themselves, I mean, the act of seeking them out, finding them, and then collecting them is in a sense strewing my own little world with rich materials.

11:08I would say the same things about my board games or about my books. We're going to do authors in August once again this coming month. And I'm looking forward to conversations with authors of books that I've appreciated and quotes, board games, books, conversations, podcast episodes, those things that we gather, that we strew around us in our world. We're in control of our environments most of the time. And then weaving those things into our thoughts, to me again explains a lot about, let's go back to it, investing. Because it isn't so much that you're stuffing information into your head as an investor, it's that you're enriching your world by going out and trying when it first debuted, Chipotle, and seeing what a fast, casual environment looks like, or by downloading that app and trying something new on your phone, or even having a smartphone.

12:00The iPhone only debuted in 2007, still less than 20 years ago, being an early adopter of new technologies is an example of strewing your world with rich materials. Of course, great quotes for me, books, et cetera, literature major. These are examples, but I know you have them too in your world. And Annie Murphy Paul is reminding us that it's about surrounding yourself with great materials. I would also add, of course, great people that is really going to cause you to extend beyond your own limits and become something, become a greater butterfly than you might ever have imagined in your caterpillar stage.

12:39You know, building a second brain is a great example of that as well. Tiago Forte's book, where I found this quote, is all about organizing your digital life, your second brain, so that you can be more successful with your first brain. You know, the one you're listening to me now with, the one you use to think and dream and then build, that first brain is so advantaged if you do a good job with building your second brain, which is, again, another example of strewing your world with rich materials and then weaving them into your thoughts. So before we move on to quote number three, I should just call out portfolio principle number one of the Rule Breaker portfolio.

13:21Make your portfolio reflect your best vision for our future. And so it's all about getting in touch with fascinating people and companies, products and services and realizing, wow, that would be really cool. You know, the world would be better if the internet showed up back in the day or if somebody dreamed up this idea that rather than stay in a hotel room, you could stay in somebody's living room. And that's Airbnb or artificial intelligence as it makes its way onto the planet still in such early days for AI, make your portfolio reflect your best vision for our future. I think most of my great stock picks came about because I tried something earlier than most other people.

14:04I was willing to go with Netflix and say, sure, okay, I'll wait three days for you to mail me a DVD to watch my next video and then mail it back to you. That sounds interesting. Plus, you're changing the business model. Blockbuster Video was all about transactions and late fees. And all of a sudden, Netflix wasn't just about the mail. It was also about a subscription business model, which was a brand new thing. The more experiences you can string together as you lead a more interesting life, I think the better you'll do as an investor. And Annie Murphy-Paul reminds us, the more you will extend beyond your own limits.

14:39Let's move on to quote number three, this one from the book Conscious Capitalism, authored by John Mackey and Raj Sisodia, two people that I deeply admire and have gotten to know over the course of my life, and my life is much richer for it. And here's a great quote from Conscious Capitalism, and I quote, Business is fundamentally about people working together cooperatively to create value for other people. It is the greatest creator of value in the world. This is what makes business ethical and what makes it beautiful. For some listeners now, for some of my fellow fools, this is a statement of the obvious.

15:21This is how you see the world. And you're more likely to see the world this way if you've started a business of your own, suffered the slings and arrows of outrageous fortune, sometimes for you, sometimes turning against your own fortunes, but showing resilience and building something over time, giving other people jobs and giving them fulfillment in their jobs as they seek to deliver a product or service to others that is worth paying above the costs that you and I incur as the manufacturers and distributors of those products. Profit is a magical thing when you look at it that way. People are willing to pay you more for what you're doing than it costs you to do it.

15:59And that is truly how the greatest value has been created in the world for centuries. Now, we do live in a world where many people perceive business as extraction. It's zero sum. It's about greed. If you win, that must mean I lose. And I obviously could not disagree more, having seen business both as an entrepreneur, but more than anything, of course, as an investor doing investment research, seeking other people's businesses and asking me, who are the people I admire most? What are the products and services that I want to succeed in this world? Because the world will be better 10 years from now as a consequence of those products and services getting deployed and creating success and value for all the stakeholders that made them possible.

16:43And that's why for me, investing is inherently an optimistic act because it's partly a belief in things unseen. You know, when Amazon.com launched just as an online bookstore, it would have been hard to picture Amazon as it is today. It would even be harder to picture things like the cloud that showed up well after Amazon launched and Amazon Web Services is such a big part of that company today. You know, I think back again to my make your portfolio reflect your best vision for our future. Business creates value. And if that's true, then owning businesses becomes an act of optimism and successful businesses.

17:26And I realize this sounds a little bit naive and we can all think of counter examples, But successful businesses are really beautiful things if they're truly doing what Raj Zasodhia and John Mackey wrote about in Conscious Capitalism. And many businesses do, certainly not all. But the ones that really succeed create a win for all the stakeholders in the enterprise. It has to be a win for the customers. Otherwise, they won't buy what you're selling. It has to be a win for your employees. They have to love working with you, at least tolerate it. Otherwise, you won't have that life energy to breathe into your enterprise to actually deploy your products and services.

18:02Our employees bring the energy and possibility of even succeeding from one day to the next. They have to win, too. And you're probably not going to win for very long if you're not winning for your suppliers and for your business partners, depending on what type of business you are. they're a very important stakeholder. And also they want to feel proud that they got to supply you, that you put them in your front window, not somebody else. So suppliers and partners need to win. Obviously for some businesses, the environment needs to win. For many other businesses, the environment may not be very important, but for some, it's very important.

18:36Also local communities for some businesses are a great example of a stakeholder and one that you want to have winning along with you as well. And then, of course, I'd save them to the end, but shareholders. If you're winning for all those other stakeholders we just talked about, then I'm almost sure you're winning for shareholders too. And that's a great reason why the stock market goes up, by the way, 10 % or so on average over the years. Annualized 10 % shows the clear value being created in our world at large. And you don't need me to tell you that about the stock market, just look at the improvements in longevity, in health, in public safety, in enjoyment, in entertainment options, in agency, in travel, all these things that possibly too many of us take for granted here in 2026.

19:24A lot of them weren't in place in 1976 or 1926, but they're there for you today, largely because business has made them possible. Now, before I move on to quote number four, I hasten to add that not everything is done for profit. and there are some beautiful not-for-profits in this world at large too and we're certainly trying to create one with the full community foundation and i want to thank those listening to me who've taken the time to visit our foolfoundation.org and see our own work there are so many amazing interesting not-for-profits around the world and those fit naturally here too they are also beautiful enterprises you know i will say this so there is a role both for-profit and not-for-profit but I'm expressing particular gratitude here with quote number three for the for-profit businesses, the conscious capitalists out there, because for-profit makes us into owners of competitive enterprises, with the majority of our fellow citizens, by the way, working in the private sector every day, trying to deliver that better product or service, which, by the way, does make it a competitive world.

20:30And competition can be taken too far, and some people will always view competition negatively. But in my own mind, some of our greatest competition is ourselves, is working every day to deliver a better product or service than you did yourself the day before. And especially, I want to say this about profits, they are generative. So not-for-profits need to keep handing out the hat and asking for donations because they can't turn a profit by their very nature, they've chosen not to do so. And so they need donations. And I appreciate that. And I've made a fair amount of those in my life and will be making more.

21:07And for-profit companies are generative. So those enterprises, when they're working, are self-sustaining. And indeed, generating those profits enables them to grow and grow further. They gain more agency. They raise value and wealth for everybody around them, for all their stakeholders. Again, that is the win-win-win that is the genius of conscious capitalism. So I'm going to read this quote one more time, and then we'll move on to number four, because I think for a lot of people, this strikes them as crazy talk. And yet to me, it's so obvious and so well stated, quote, business is fundamentally about people working together cooperatively to create value for other people.

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23:50Here's the quote, and I quote, Not surprisingly, Pinker writes, as countries get richer, they get happier. See chapter 18. More surprisingly, as countries get richer, they get smarter. Chapter 16. And quote. now the reason i took this down in my highlighted reading when i first read this book is because the purpose of the motley fool as i hope many of you know is to make the world smarter happier and richer and so as i read pinker's quote 10 years ago where he says not surprisingly as countries get richer they get happier and as they get richer they also get smarter i couldn't fail to notice the Malawi Fool's purpose statement writ large.

24:36But there are two things I want to speak to here. First of all, the more obvious point. Again, I hope it's obvious, but some people might debate this. The idea that as countries get richer, they get happier. Well, he mentions chapter 18. He cites that in this quote. So in chapter 18 of his book, Enlightenment Now, Pinker tackles what is known as the Easterlin paradox. You can look it up. It's an old theory that once a country reaches a certain level of wealth, more money doesn't make people any happier. And Pinker, in his book, presents newer data showing that the Easterlin paradox he contends is mostly a myth.

25:17He notes that, and I quote, richer people within a country are happier, richer countries are happier, and people get happier as their countries get richer. End quote. He discusses how wealth buys things that lead to happiness. So things like better healthcare, more freedom to travel, more education, and never to be forgotten, more control over your own life. Wealth clearly buys those things. He also mentions the World Happiness Report. And you've probably seen this before. It shows that the happiest countries in the world those include countries like Denmark, Switzerland, and Norway, are also among the wealthiest and the most free.

26:04So of my two points I wanted to point out about this great quote from Steven Pinker, that's the first. It's a little bit the more obvious one. As countries get richer, they get happier, although some people don't think that's obvious. I do. But the second point he makes is the one that surprised me a little bit and made me happy to think about it. As I thought about it more, it became clear about why it's true. The second clause of his quote is, more surprisingly, as countries get richer, they get smarter. Now, not just happier, smarter. And he references chapter 16 of his book. And in chapter 16, Pinker discusses the Flynn effect.

26:47You can look this one up, it's the observation that IQ scores have been rising significantly worldwide about three points a decade since the early 20th century. So Pinker argues in chapter 16 that as countries develop economically, people are nourished better and they're then exposed to more complex and abstract environments. And this forces them to exercise what he calls scientific spectacles. So beginning to view the world through categories, through logic, and again, abstract relationships, rather than just your concrete local experience. And I've looked into this some because you can you can see Flynn himself, purveyor of the Flynn effect, give a TED talk.

27:38This is more than 10 years ago now, but I'm going to quote some from his TED Talk in a second to make it clear how richer is getting us to be smarter. But before I do that, let me just mention that Pinker says that an average person in the year 1900 would have been considered, and these are Pinker's words, and he's being technical here. This is being used as a technical phrase in his book, and you could look it up. He says again, the average person in 1900 would have been considered, and I quote, mentally retarded by today's scoring standards, simply because they weren't trained to think in the abstract, logical ways that a modern, developed society demands.

28:20So I wasn't around back in 1900. You weren't either. But Flynn cites Alexander Luria, the Russian neuropsychologist who conducted interviews with a lot of people a century ago. And as Flynn says in his TED Talk, Luria looked at people just before we entered the scientific age. And he found that these people were resistant to classifying what we would call today the concrete world. They wanted to break it up into little bits that they could use. Luria found that they were resistant to deducing the hypothetical, to speculating about what might be. He found, finally, they didn't deal well with abstractions or using logic on those abstractions.