June 2026 Mailbag: “Do You Know Its Market Cap?”

0:00Should public companies report to their owners four times a year or just two? That's not a theoretical question. It's a real proposal now being considered by the SEC. And this month, many a fool is taking the time to write the commission directly to explain why we believe transparency matters. And we have a great listener take on that coming up. Meanwhile, on this mailbag, another listener asks when to add to a winning stock. Another shares a week so extraordinary that he does so anonymously. And another is a German police officer raising two daughters, doing pretty much, I think, everything right, to the point that he asks, what creates the greatest opportunity for a meaningful and fulfilling life?

0:46Well, I'll try to answer. A delightfully motley collection of notes, questions, stories, and reflections from fellow fools around the world. It's the last Wednesday of the month, which means it is time for your mailbag, only on this week's Rule Breaker Investing. It's the Rule Breaker Investing Podcast with Motley Fool co-founder David Gardner.

1:12Welcome back to Rule Breaker Investing. We had three earlier podcasts this month, three Wednesdays already. On June 3rd, I kicked off the month with I Fought the Law and the Law 1, Volume 3, where I brought back six more memorable laws, principles, mental models that help explain how our world works. We range from Sutton's Law this time and the Diderot Effect to Dunbar's Number and even, yep, Gardner's Law, all in service of making us a little more aware of the patterns quietly shaping our lives. And while I take some pride in always presenting new material, I want to admit an error that I made and I fought the law in the law one because I presented Sutton's law, as I mentioned, which is basically keep it simple, go where the money is.

2:03And I had forgotten I had already presented that on I fought the law and the law one volume two. So we have a rare repeat of a point made. And I did so earlier this month without even remembering that the previous time I had already presented Sutton's law. Anyway, mea culpa. Then on June 10th, we gathered around the campfire with five fellow fools. It was Stock Stories, volume 12, time travel investing. You know, that's a series. Yeah, we've done it 12 times now because gathering around the campfire and telling stories is what humans have done for thousands of years. And in particular, this go around, we connected around a surprisingly powerful theme, and that is that for great businesses, it is often not too late.

2:53We heard tales involving Google, IBM, Life360, a biotech shell company that refused to die, and one fool just beginning his journey with individual stocks in his 50s. Stock Stories, Volume 12. And then last week, it was the market cap game show, The King Sharon Rule debuts. Charlie Travers and Jason Moser joined me and you for the 42nd installment of our long-running game as we introduced our first major rule change in years. Along the way, we talked market caps, food delivery, spices, ski resorts, luxury cars, airplane parts, some more airplanes, some more cars. Somehow, we learned a little bit more, not just about the stocks and the market caps, but how our world works as well through the lens of business.

3:41So that is the month that was. And I want to mention before I go into my Twitter X hot takes for this mailbag that you can follow this podcast on Twitter X at RBI podcast. And I'm at David G. Fool. And I want to underline something because next week it is our annual repeating what you've done to create financial freedom podcast. And because that is itself a mailbag, that is listener driven. And we often, with our mailbags run a few weeks behind, I urge you to write me right away with something that you've done to enable financial freedom, either for yourself, for family members or friends of the world at large, over the past year.

4:27That's right here in the United States of America. We're celebrating our 250th anniversary as a nation. And every year on July 4th is Independence Day. And yet here on Rule Breaker Investing, we celebrate financial independence. And whether you have it yet or not, we're all seeking it. And I've always found it inspiring to hear from each of you what you have done to create financial freedom in the past year. So write us. Our email address is rbi at fool.com. You can again also tweet us on Twitter, X at RBI podcast. What have you done to create financial freedom over the past year? All right, now just a couple of Twitter X hot takes.

5:09Actually, the first one wasn't from Twitter. It was just from email, but it closed the loop on last month's mailbag. So Thane Walton, thank you for your note. You wrote, hello, David. I told you I'm usually a week behind in my listening, but not this week. Got a text from a church buddy on Wednesday who declared I'm famous. I immediately listened to Rule Breaker Investing. Again, this was last month's mailbag Always fun to hear a nice shout out From the Motley Fool folks, you guys are great I appreciate the one-sided friendship I feel as I listen to all of you I then shared the episode with all my stock-picking friends And even my wife listened to it And came over and said, wow, he gave you a lot of time Well, Thane, it wasn't hard to give you a lot of time You're so welcome Because it was a great note that you shared last month So thanks for closing the loop.

6:01And then one other hot take. This one is from Twitter X at Gaurav K Investor. Gaurav Kumar, you wrote in reacting to last week's Market Cap Game Show. Love this. Come for the Market Cap Game Show, you tweeted, and stay for the info on how cars work. And we did talk a lot about what happens under the hood last week's podcast. You know, part of the fun of putting the Market Cap Game Show together every quarter is randomizing which stocks we'll be covering. And sometimes themes emerge, of course, randomly. And oh my gosh, cars and food last week. Well, it was a really fun market cap game show. Congratulations again to Jason Moser, who advances to this coming March's March 2027 market cap madness.

6:51All right. We've got seven mailbag items this week. Let's get started. All right, mailbag item number one, this one from longtime fellow fool Eric Eason writing in. And Eric, before I read your note, I want to provide a bit of context. As I mentioned at the top of the cold open on this week's show, the Securities and Exchange Commission is considering a proposal that would allow public companies to reduce their regular reporting from four times a year to just two. Supporters argue this would reduce costs, help companies maybe focus less on quarter to quarter pressures. And I understand those motivations, but I don't think reducing the flow of information makes investors more long-term.

7:38It simply makes them less informed. So at The Motley Fool, we've pretty much always viewed investing as ownership. And if you own part of a business, you deserve regular communication from that business that you're the part owner of. Of course, companies are still operating every day, launching products, winning customers, making mistakes sometimes, that too, and changing strategy. But under this SEC proposal, owners would simply receive fewer official updates about what is happening. And my concern is that less transparency doesn't reduce uncertainty. It increases it. And when information finally arrives, surprises tend to be bigger, not smaller.

8:20So The Motley Fool is making a big effort here in late June and early July, and I'm encouraging you to do so to let the SEC know that you appreciate hearing from your companies quarterly, especially when you're a part owner, even for your own stock research of other companies. You have appreciated the regular flow of information indeed over years and decades now, and you don't want to see that cut in half as part of a cost saving or time saving gesture toward public companies. Anyway, back to Eric Eason's note. Here's how he wrote in for Rule Breaker mailbag item number one.

9:10And Eric wrote, and I quote, I am adamantly against your proposal to reduce publicly owned corporate reporting from quarterly to semi-annually. I have been an individual investor buying individual stocks for 30 years. I rely heavily upon the quarterly reports and management conference calls for my investing decisions. This transparency is essential to my investing success, upon which my retirement depends. Transparency is also an American value As it fosters stewardship amongst our leaders And discourages corrupt insider behavior Furthermore, Eric goes on Large institutions have the resources to hire the analysts Who cultivate relationships with management as part of their duties They therefore learn immensely important information Outside of formal reporting periods information which I am unable to acquire.

10:21This is additionally why quarterly reporting is so valuable to me as it helps keep me abreast of developments so I'm never too far behind institutions in obtaining essential information. Your proposed semi-annual ruling would thus put me and my fellow individual investors at an even larger disadvantage against institutional investors. Your role as a regulatory body is to even the playing field and encourage honest stewardship by corporate leaders. Your proposed ruling would do the opposite by making it more uneven against the individual investor and fostering insider profiteering at everyone else's expense.

11:10End quote. So, Eric, that was your note that you submitted to the SEC. and in your mailbag to me, you just concluded here's to a successful campaign to maintain corporate transparency and good governance. Signed your friend, Eric Eason. Well, Eric, thank you. And I don't think I really need to add much because you spoke so eloquently, but I do want everybody hearing me right now to know that over the next 10 days, you too can write in and let the SEC know your thoughts on the proposal. In fact, we prepared an article. If you just Google the phrase, individual investors deserve more. Yes, that phrase, if you Google it, we now own the number one positioning on Google for that.

11:55You'll find our article, but you can also just go to fool.com slash save the 10 Q, save the one zero Q. And you will find our article along with the link to write the SEC. And I hope you will, because for me, I mean, maybe I've been spoiled all along, but as an individual investor, being able to see the numbers, the balance sheets, the income statements, hear from management on a quarterly basis for decades now is a big part of my research process. And those tools are essential. And to think that we would cut their use in half is for me kind of unconscionable. And I hope you'll feel the same way and let the SEC know.

12:37Thank you to Eric Eason. Thank you to you, dear fool. Let's move on to mailbag item number two. All right. This one comes from Sanjay. Sanjay, thanks for writing in. Hi, David. Hope you're well and happy belated birthday. I've started listening to you over the last six to nine months through your podcast because of your audio book, Learning to Adapt the Habits You Mentioned in Your Rule Breaker Investing audio book. Well, let me just say back right Right away, Sanjay, thanks for listening. I've said it a number of times on this podcast, but maybe the audiobook is my favorite version of my book because I so enjoyed being able to read it and present it myself.

13:16I had a lot of fun. It took me three days, by the way, in the studio, three full days to read the whole book, but it's all there and I'm delighted you found it that way. Sanjay goes on, thus I'm not able to comment yet on your question around your birthday on what I've learned from you that I found most useful. Hopefully, maybe by next birthday, I can contribute. However, I can say that I feel comfortable and better after listening to you, which has given me the confidence to change and adapt a habit that you mention in the audio book. It is habit number two, add up, don't double down. Sanjay goes on, can you please guide me as to when I should add up?

14:00And then he provides an example. He said,

14:31in this circumstance, or even if it wasn't intuitive surgical, maybe it's Nvidia or any other stock. Thank you in regards, Sanjay. Well, let me just speak briefly to habit number two, and then let's do some quick math together, Sanjay. Habit number two is there to teach rule breaker investors that if you have new money coming in, I much prefer to add to stocks that are winning for me in a world where I think most people default to rebalancing in their own minds they add to their losers. And so it's always been a great rule breaker habit that's had great results when I contend for you and for me that we should add new money to stocks that are up, not the ones that are down.

15:17We have a longtime community member, listener, and also writer and contributor to the Motley Fool, Danny Vena. And when I first got to know Danny online on our forums years ago, he had an even more dramatic way of approaching this. And I'll just give Danny, I'm not saying he still does this, he may well, but I just want to say what he was doing back then because it opened my eyes even further to the benefits of this. He would wait till a stock that we had recommended, a stock that was a rule breaker that was performing well, he would literally wait till it was up 40%. And 40 % was his magical rule, where at that point, he would add, he needed the stock to be up 40 % before he would add to a position.

16:00And then if that overall position then went up 40 more percent, he would then add again. I don't want to put words in his mouth and Danny may or may not completely agree with this today. But I want you to know, I was always guided by the idea, Sanjay, that we should be adding to our winners. But when I started encountering people with mechanical rules around winning even more than you or I might think, I thought it was kind of amazing. And Danny has done great as an investor. And this doesn't work for every type of stock, Sanjay. This works for rule breakers. Of course, there are cyclical companies that go up and down and up and down.

16:36And I don't necessarily think you'd want to approach investing this way with those kinds of companies, but you know, I'm talking about rule breakers to a fellow rule breaker. Now let's do some math together. You mentioned that at the high you've bought intuitive surgical at 478, and then it's come down some over the course of this year. And you've got some buying in thirds, as you mentioned at 398. So I'm just going to do some simple math here. If your high is 478 and your low is 398, if we average those two, you're going to be at$438 a share. So that's sort of your average cost basis in my mind anyway.

17:12And as you wrote, you said the stock was at 416. I'm just quoting it today here on Tuesday, June 23rd. It's right about even at 400. So here's my thought, that$438 median, I think that might be the number I would use if I'm thinking about adding to Intuitive Surgical. So that's about a 10 % gain from here. and that's my way of thinking that that stock is winning for you because at that point Sanjay you've passed above your medium price into territory that is winning now I don't mean to make this about a specific dollar amount I hope you understand it's the principle that matters not the exact math but I have made a pretty good career of investing by only adding to my winners and waiting for them to begin winning before I add to them of course if I have extra money and something isn't winning for me, I'm only too happy to put that toward another stock that is winning for me.

18:12And I think before we move on to mailbag item number three, I think the reason this works is because great stocks grow over time with the progress that the companies make and the improvements that they add to our lives as those purchasing their products and their services. So great stocks really just measure human progress and the progress of our economy and of course the companies that make it up. And that's why I prefer to add to things that are winning, that are going up over time. And in my experience, what do winners do? Sanjay, I know you know the punchline. Winners win generally. Winners keep on winning.

18:50And that's why I've always felt much better adding new money to my portfolio into the things that are working. And so that is my conclusion and my thought for you. Mailbag item number two. Thanks for writing. All right, on to mailbag item number three. Hi, David. I'm one of your regular listeners, and my relationship with the fool spans decades, but I would like this submission to be anonymous because of the personal nature of the content, and mostly because this isn't about me, but it should highlight what following foolish and rule-breaker precepts can do for a person. and I, he writes, am that person.

19:31What a week I just had. It started on Tuesday when I was able to send a 12-year-old cancer victim and his father to game five of the National Hockey League's Stanley Cup finals, which cost many thousand dollars. The emails I received from the boy's dad brought tears to my eyes as he described his son's best ever sporting event experience. Later in the week, my dear bride and I decide to pay off hundreds of thousands of dollars of our children's home mortgages. Each of them was facing different challenges, and this gesture would be transformative in supporting them going forward, eliminating financial pressures when they needed it most.

20:18as opposed to waiting until we pass, hopefully many years from now. And finally, we spent the weekend with our grandchild, who suffers from anxiety attacks and is autistic. It was a great time, principally because he and we love playing the magical athlete board game that you touted in a previous podcast. We made many trips around the track, often cackling with joy, as our athletes battled for supremacy. And the real magic is that none of the financial moves we made will materially impact our standard of living or retirement. And it is entirely due to the application of foolish and rule-breaker principles over the last 20-plus years.

21:11I cannot thank you enough. Smarter, happier, richer am I. Excelsior. Well, anonymous friend, first, thank you for rocking my Motley with an enthusiastic excelsior. At the end of your note, you probably know that's the title I gave the final chapter of my Rule Breaker Investing book. It's a word that means a lot to me. And for Marvel fans, you probably also know it meant a lot to Stan Lee, the creator of so many of Marvel's superhero characters. characters. So thanks for ending that beautiful note with the word Excelsior. Second, I hope I never get tired of hearing stories like yours. In fact, I dream of a future where an increasing number of mailbag notes sound just like yours.

22:03They'll have different names. They can all be anonymous so far as I'm concerned. Different circumstances, different acts of generosity, the different lives touch. But the same underlying story, someone embraced foolish and rule breaker principles, stayed the course for decades, and eventually found themselves in a position to do remarkable things for the people they love, and in some cases for people they don't even know. A young cancer patient at the Stanley Cup finals, children freed from mortgage burdens, a grandparent laughing around a board game with a beloved grandchild. I don't think that I could ever share too many stories like that.

22:48So before we move on to mailbag item number four, let me just reflect that I think every one of these stories, like the one we just heard, inspires us along with Dory. And I think it was my theme on this podcast for the year 2023, which was very volatile after a horrible 2022 to just keep swimming. Each of these stories expands our imagination as well for what might someday be possible in our own lives. I love hearing what people do because it suggests new things I hadn't thought of that I could do too. So let me just close by saying a hearty congratulations. Your note is a beautiful reminder that the ultimate scorecard isn't wealth accumulated, it's lives enriched.

23:38Fool on.

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24:30And I'd love to know what you've done to create financial freedom over the past year. Some of you have written me each year, so maybe you have an update and some of you are just encountering this podcast for the first time this week and you're thinking, you know what I did? I finally started contributing to my corporate 401k and my company matches and that's a step I took toward financial freedom. Or maybe you helped out a child figuring out the stock market. Maybe you inspired them by opening an account for them and putting money in this podcast. And indeed, of course, my whole company absolutely loves to hear those kinds of stories and not just to inspire us, but to teach us as well.

25:09Because there are a lot of smart people hearing me right now making good moves of their own toward financial freedom and share it out. You reach tens of thousands through this podcast. Let's move on to mailbag item number four. This one from Eric, another Eric from mailbag item number one. Thank you, different Eric, for this note. Dear David, as an arithmetic enthusiast, I loved your number hand game in last month's mailbag. It got me thinking about how to approach that same exercise, but from the other direction. Now, before we move on, for those who didn't hear last month's mailbag, I just mentioned a trick you can pull with people to show how bad the human mind is at wrapping itself around big numbers.

25:53And the trick is that you hold out your two hands in front of you, maybe a couple feet apart. And on one side, you say, is the number zero? And then looking at your other hand on the other side, you say, that's a billion. And then you ask your friend or maybe you make a bar bet or maybe you're at the corporate water cooler. Here's zero, you say. And here over here's a billion. You ask them, where is a million? And again, in my experience doing this many times over the years, the average person will somewhere about a third of the way from zero, about a third of the way over, they'll say right about there.

26:27That's where a million is in between zero and a billion. And well, just to inform those who didn't hear last month's mailbag, that is incorrect. There are 1 ,000 millions in a billion. therefore as I often say you couldn't really fit a knife between how carefully they should be placing their hand right against your zero hand one one thousandth of the way over to the other side so that's the zero to a billion hand trick that I like to pull on people and that's what has inspired this note from Eric and let me keep going Eric goes on we have a hard time conceptualizing very large numbers, but 1 ,000 is graspable.

27:11Let's start there, Eric writes. If I hold my left and right hands a foot apart and say that that distance represents the span from zero to 1 ,000, where would I have to place my right hand to represent 1 million? He asks. He goes on, Google tells me the average city block is 660 feet, so the answer would be nowhere in the room. No matter what room you're sitting in, it would be a block and a half away. Zero to a million. And he goes on, what about a trillion? How far would I have to place my hand then? Well, nowhere on this planet. It would be oh so nearly on the moon, which at 238 ,000 miles would be almost close enough for my hand to touch.

27:58Therefore, if my outstretched hands represent$1 ,000 of market cap, NVIDIA could go to the moon and back twice and still have room to spare. Thank you for sharing such a fun idea to play with. Signed, Eric. P.S. I'm imagining a future market cap game show Geography Edition. Well, thanks for writing in, Eric. And your note reminds me of, I guess I'll say two related truths. first well we already spoke to this one but the human brain simply isn't built to intuitively understand very large numbers we evolved to understand dozens sure hundreds okay maybe thousands but once we get into millions billions and trillions we're mostly faking it and second here's the second thought it's one more reason that i love market caps we built a game show around it.

28:56People see one stock trading at$20 and then another trading at$200 a share, and they assume that second company is bigger. Of course, price per share alone tells us almost nothing. The market cap is the actual price tag of the business. And one of the reasons we played that game show for nearly a decade is to help all of us think a little more clearly about scale. Thank you, Eric, for sharing a little bit of your arithmetic enthusiasm with the rest of us. Let's move on to Rule Breaker mailbag item number five. This one from Frank DiMarzio. Thank you, Frank. You write, hi, I've been building an app with Claude that automates covered call trading on top of a long-term equity portfolio.