Stock Stories, Vol. 12: Time Travel Investing

0:00Some people love superhero stories, enough to spend, I don't know, like a billion dollars at the box office in a single weekend. Others prefer tearjerkers. We all have a favorite bedtime story. Humans are a storytelling species from prehistoric campfires to billion-dollar industries like celebrity gossip or sports or the nightly news, all stories that shape how we see the world. investing is stories too every stock has a mission a tagline a roller coaster arc look across your portfolio you'll see tales of innovation resilience and wealth creation sometimes destruction stories well for the 12th time we gather around the campfire this week for stock stories five motley Fool guests join me with tales anew, freshly told to make you smarter, happier, and richer, only on this week's Rule Breaker Investing.

1:01It's the Rule Breaker Investing Podcast with Motley Fool co-founder, David Gardner.

1:10Welcome back to Rule Breaker Investing. We tell a lot of stories on this podcast. over the years. My golly, I can't even imagine how many stories we have shared. But one thing's for sure, we have done stock stories as an episodic series for 12 times now, counting this week. So if you're a new listener, welcome. There's a campfire. Oh my gosh, listen to it. And I'm going to be joined at the campfire by five special fools, each of whom will have a story to tell. We're so happy you're here to join us. Grab a couple of marshmallows. Oh, and a skewer, too, by the way. We're going to have fun together this week.

1:50Let's aim to leave the campsite better than we found it. We're aiming to leave, at the end of this episode, smarter, happier, and richer. And I'm excited to get ready to welcome these five fools. Before we do that, I just want to mention next week's podcast. It's the Market Cap Game Show. Three contestants will be joining me as we kick off the 2026-2027 season with two competitors in studio. And of course, the third is you at home playing right along with us. By the way, we're going to have a new rule we're adding to the game, which that rule will debut next week, which does occasion the question, will next week's Rule Breaker Investing podcast be the best market cap game show yet?

2:31You be the Judge. Same full time, same full channel. See you next week. But without further ado, let's get started. Let's settle in. I want to start by welcoming my first guest, my friend and longtime Rule Breaker associate, Carl Thiel. Carl, a delight to have you. So great to be here after, I guess, a fairly long absence. Yeah, you've definitely been around my campfire before and you've been on this podcast a number of times over the years. But in terms of stock stories, we have to go back several volumes for your last contribution, but I was just listening to it the other day going, I need to have Carl back.

3:06And here you are. Thank you. Welcome to our Foolish Campfire. Carl, before your story, could you just remind us in a sentence or two what you're doing around Fooldom these days? Yeah, I am still working on the Rule Breaker service, as I have since I started with the Fool low 20 plus years ago, which is great. But in addition to that, I'm doing some stuff on newer services we have around quantum computing, around energy, and around sort of the intersection of health and artificial intelligence. Well, I'm glad to know that we're spreading your foolish wisdom across more than just rule breakers, but I'm also really delighted, Carl, to think that that service that you were there at the start for and that we worked on so many years together, you're right there.

3:48And you're not the only one. It's a wonderful team that's been around for so many years. Makes me really happy as the co-founder. Carl, before we get started with your story. Icebreaker question for each of my guests here. Let's go with this one. Carl Thiel, audiobook, ebook, or physical book? I do do all three of those to some extent. Audiobook, honestly, for sleeping. I am a recent ebook convert. My wife got me a Kindle Paperwhite, the kind of passive one. Nice. Oh, I love that thing. So that's, I've been kind of all ebook since then. And as am I, my friend. Okay, let's get started. Carl, what is the title of your story?

4:27So my story is called The Shell Game or Five Memes, One Stock. Take it away. Okay. Once upon a time, I worked at a small biotech consulting firm in the Bay Area. This was the early 1990s and the whole biotech industry was pretty small, very young, pretty small. And I was in my 20s and I knew very, very little, but I worked for a really smart person and I got to meet a lot of smart, incredible people. Some folks who went on to become kind of industry luminaries would at the time schlep up the stairs to our little office and sit at our unfinished kitchen table and present their slide decks to us on literal, you know, flip paper slides.

5:11So one day, a guy named H. Lawrence Shaw came into the company, and he was pitching a company called Pacific Pharmaceuticals that he had founded. Now, he had previously founded an antisense company called Atlantic Pharmaceuticals, so creative naming here, and had taken that public. But Pacific was totally different. It was doing photodynamic therapy for cancer. And I won't really get in too much to that, But the idea was you took a drug and it went to where you wanted it to go. And then it only was active when you shined a light on it. I thought that sounds super cool. So that was all I needed.

5:48It was one of the first individual stocks I ever bought in my life. And so, you know, the company didn't fail per se. It didn't fail out in clinical trials. It just did what a lot of companies did back then is they just ran out of money. And so here's what happened with some of these stocks when they really go badly. I should get out of them. but sometimes they become worth so little that I just don't bother to do anything. I can relate to that. So I continue to hold this company. Here's what happened to it. It got acquired by a company called Procept in an all-stock merger back in November 1998.

6:20They wanted the pipeline, and so they were going to do something else. Well, they also ran out of money to the point that they just threw in the towel on being a biotech company at all. And the only asset they really were left with was the shell of their public structure. So I continue to hold. In 2000, Procept was acquired by HeavenlyDoor.com. That sounds like the first real shell company that we're talking about here. Well, HeavenlyDoor.com was their business was online funerals and online casket sales. That's a little bit of a change in the core focus. Yes, yes, this was a change. And the company actually is somewhat famously mentioned in Eft Company's spectacular dot com flame outs, which was published in 2002 by Phil Kaplan.

7:11He was the guy who started Eft Company dot com. OK, yeah. So it was, you know, kind of a spectacularly bad business idea. Yeah, it went about as you'd expect. And in 2001, Heavenly Door gave up the ghost, so to speak, and just became Palagent, which was a pivot to nothing. It was just a name for a shell company. And it sat around and I continued to hold my now, you know, whatever, one dollar worth of stock. And in 2006, it became International Fight League. So International Fight League, this was team-based mixed martial arts. It was supposed to be a friendly family alternative to UFC cage matches.

7:52People got paid salaries and stuff. And they actually had a moment. They landed a deal with Fox. My shares, I think, like went from like$5 to like$60 at some point. You know, but like people got a little bit excited about this. Incredible. Yeah, but they burned through the cash like water and they went bankrupt in 2008. So in 2011, Interfinancial Fight League becomes simple pawns. And you can probably guess what that's all about. That's a Groupons ripoff, right? I honestly don't know a whole lot about how that went. But in 2013, Simplepons became EcoShift Corp, which was supposed to be energy as a service.

8:32So it was like converting large warehouses to green energy. I think it was basically screwing in LED light bulbs for people. You know, it did not really do anything as far as I'm aware. So it still sits in my portfolio today. One of the first stocks I ever bought. Incredible. As not a ticker, but just as QSIP27888E109 with a value of$0. And I will never get rid of it. You know, at no point did anyone want to just let the thing die. You still keep coming up with suitors here and there. Total changes in business. You know, so many of our Motley Fool stories of buying and holding ultimately lead to glory, right?

9:10Right. Like the person who bought and held Amazon or Apple or NVIDIA. And yet, Carl, those are few and far between. In the grander scheme, there are heavenly doors that we all have to step through to get to the big winners. Yeah. Carl, I might be able to guess at the bottom line lesson here, but I would like for you to spell it out to all of us. What are we to learn from QSIP? I can't remember the number. Well, I mean, despite making myself maybe stupider and poorer in the process of all this, I will say hot trends make for hot stocks, but even hotter garbage. Right. This is this is five means.

9:47It's biotech. It's dot com. It's mixed martial arts, online coupons, green energy all mixed up because people were just chasing something using a shell corporation. I feel like the story should be captured somewhere. And turns out, actually, it was just captured right here at this campfire. So I'm not sure there's ever going to be a big magazine article telling the story here. But Carl, you did just share it with us. And thank you so much. We've had a lot of fun Rule Breakers together. You've picked some fantastic stocks. And I think we all have something rattling around at the bottom of our portfolio.

10:16I particularly appreciate your long-term commitment to that security. Thank you. And oh my gosh, there's a second sound starting to creep into the night air. And a second friend has arrived. Bill Mann, great to see you again. Welcome back to Rule Breaker Investing. How are you, David? I'm doing toasty. I'm doing toasty this evening. Thank you. Bill, you know, before your story, could you just remind us in a sentence or two what you're doing around Fooldom these days? So, David, I'm the chief investing strategist for Motley Fool Asset Management, which is the part of our company that manages other people's money.

10:52We have about two and a half billion dollars in managed ETFs. Thank you for that. And thank you for that work. Bill, like many of my favorite fools, has done 17 different things around our company over generally more than 17 years, which is the case for Bill. and what a delight. Bill, before I ask you for the title of your story, quick question for you. Beach vacation or mountain vacation? Full stop mountain vacation. Full, full, full stop. I mean, you can't just give a, you got to give a sentence or two about why because you just offended approximately half of our audience. I do love a beach.

11:26In fact, I'm very close to a beach right now, but I find that the air in the mountains, I love hiking. It's just to me that is much more nurturing to my soul than a beach tends to be. There is no wrong answer to the question. I would say you just gave a very right answer. Bill, what is the title of your story? My story is called The Benevolence of Neglect. Take it away. It is mildly interactive, David, so I will require responses from you. Once upon a time, there was a man, and this man wished to give his child a gift. and he decided to give this child a gift of stock. This was way back in the old days, David, back in 1983.

12:10And this man turns out to have been my father. And he gave the gift to his favorite child, who was my sister, fellow UNC alumna, Elizabeth then man, now Elizabeth Fisher. And what he did is he gave her three shares of IBM stock. You can't go wrong recommending Big Blue, right? Can't go wrong recommending Big Blue. But David, I would ask you this. In the time between 1982 and today, would you describe IBM as having been a higher profile company then or a higher profile company now? I would say emphatically it was a higher profile company then. Right. You would not describe IBM as having been a world beater in the same way that some companies that have come on in its space have beaten the world.

13:04Now, David, there is an apocryphal story in the markets, and we all know the story. And I say apocryphal because I've never actually found that it's true, that it exists. It is about a study that says that the people who do best in the stock market are ones who either forget their accounts or die. Yes, I've heard that many times. In fact, I feel like I've told that story before, Bill, possibly more than once. Look, lean into it. It's fine. It doesn't have to be true. It could be truthy. We know this. I've never found evidence that the story was true. But, David, you are not alone in suggesting its truth many times.

13:39And there are studies that show that people who trade the most perform the least well. But I am here to tell you that we do have an anecdote in the form of this campfire story because my father bought these shares directly from IBM. So they were not in a brokerage account. And so everyone involved forgot that they existed. from 1983 until the end of 2024 when another bill man, me, received a letter from IBM saying, hey, we have these shares for you. Where do you want us to send them? They were trying to find the bill man who owned these shares, which was not me. It was my dad and my sister. Those three shares, which at the time cost$32 a piece, or about$100, are now, through the magic of compounding and reinvesting dividends, 23.31 shares worth$6 ,423.77.

14:44Beautiful. And again, David, this is not one of the companies that you would suggest was a world beater. It just so happened that the U.S. economy has taken companies like IBM along and they are much more profitable now than they were in 1983. And it is the power of forgetting what you own. I love it. And my first question, Bill, is like, did you tell your sister or did you just hang on to these things? Look, it's sent to Bill Leigh. What am I supposed to do? Yes, she does know about them. I thought you probably had told her. But if not, you could have shared this episode and we could have brought in our television cameras and probably done a reality TV, like one off that no one would watch on Hulu.

15:32It would have been a vanity recording. We would have felt great about it. But I'm really impressed that IBM, I mean, obviously it's a going concern. It's a big company. It's one of those that makes me smile because it's not really part of our culture anymore. People don't really talk about business machines. And then international is almost taken for granted these days. And so it definitely has that old school ring. But I love that they took the time. They've documented it all. They contacted you years later. And it's a beautiful story, the benevolence of neglect. Thank you, David. We feel very, very good about having discovered this benevolent neglect and the results.

16:12You know, Bill, maybe I can stop telling the apocryphal story that has been captured in any number of investigative guys. Often it's a study that has been done with a brokerage firm. That's how I've told it, where the people who forgot they had an account, did best. But now we have the real McCoy. You have provided us numbers, data, and even a ticker symbol and made it real for so many fools everywhere. Bill Mann, always great to have you, especially around this campfire. Fool on, my friend. Take care, David. All right. Well, we bid adieu to Bill Mann. And just as Bill exits the clearing, here comes my friend Sanmeet Deo.

16:50Sanmeet, welcome back to Rule Breaker Investing in our campfire. Hi, David. Nice to be here. Thank you. You know, there's a new sound playing because with each guest that joins me at the campfire, he or she brings a new sound. Now, the behind the curtain Wizard of Oz truth is that it's all post-produced. So, Sami, don't tell anybody else, but we don't actually know what the new sound is. But isn't it delightful and doesn't it give you a campy feel? Oh, definitely. Sami, what are you doing around Fulden these days? Well, so I'm still working on Supernova, which has been a blast. And also on our new health AI portfolio, which has been scratching an itch of mine to have like a health-focused, longevity-focused portfolio.

17:31So that's been a lot of fun. Am I not right? Did you not partly own a gym? Was it kickboxing in New York City? Yeah. So I got some firsthand experience in actually operating a gym and still, and that was an investment in itself. So it's fun to be in the stock market though with investment. That is awesome. Rather than putting up all that massive capital and operational work. I hear you, but, and we've talked about this before, my favorite Buffett quote, I'm a better investor because I'm a businessman and a better businessman because I'm an investor. So we always appreciate people who pick stocks for us and contribute to our analysis that they have had some entrepreneurial experience.

18:11That is pretty great. Before you give the title of your story, Sanmeet, I have an important icebreaker question for you. If you're ordering takeout tonight, let's just say right here to our campfire. Pizza, tacos, or sushi? Oh, I would definitely say tacos. My kids would answer that for me as well. They know me so well. Why? Well, you know, I grew up in Texas and Tex-Mex and that kind of food I just loved. and tacos are easy to eat, they're quick, and they're fun, they're flavorful, and it's just a joy. Makes a lot of sense to me, Texas. Hook them. All right, Sanmidea, what is the title of your story?

18:50So, it is time travel investing, why it's never too late to buy greatness. So, once upon a time, all the way back in August 2004, I was on the cusp of doing something monumental. I was going to buy my very first individual stock ever. The company was probably a name you guys know already a young search engine named google i was all ready to go i printed out the prospectus i'd look through it the i at its ipo um the split adjusted price was two dollars and 13 cents you know but as i kind of did the analysis looking into it i was a new investor and you know all the all the pundits on on cnbc and the the financial news were oh google's over overvalued.

19:28The company is stretched. The best growth is already behind it. And I kind of listened to the skeptics and I froze up and decided not to buy. So for almost two decades, I just watched that stock just march relentlessly upward, transforming the global economy, being labeled the best business model of all time. I was trapped in that investor purgatory of I anchored to the pass. I was kicking myself and believing I'd like just missed the boat. So, you know, as you always tell us, David, you know, it's never too late to buy great rule breakers. Thank you. So nearly after 18 years of just watching this and regretting it, I kind of swallowed my pride and decided, don't look backwards.

20:11Took the plunge. May 5th, 2022. I bought my very first shares of Alphabet at a cost basis of$116.23. Now I'm a long-term investor. So I was like, I'm going to stick with this no matter what just shortly a few months after chat gbt and genera i burst onto the scene upending the whole narrative on google and their unbeatable monopoly now they're saying it's a walking dinosaur search is dead the stock went down almost to the high 80s and by early 2023 and i was like all right what did i learn from that lesson in 2004 don't listen to all the pundits that's kind of when I adopted a new mindset, time travel investing.

20:52We always say, man, I wish I had a time machine to go back and buy it at the beginning. But we don't have a time machine. So we freeze. So time travel investing is, you know, I can always buy an elite compounding rule breaker at any point. You know, even if it's 18 years late, you know, you're still securing a price today for your future self. So instead of selling during the panic, I held tight. And I I trusted the business, the moat, their innovations in AI. And now it's roared past 360, giving me almost a 3x gain. Wow. And taught me a lot about never thinking about being too late to the party.

21:32So I love stories like that. I think if I could chisel out on my Mount Rushmore of biggest investor mistakes, which I don't think would really make a Mount Rushmore because they're faces, so this doesn't actually work. But if I could chisel out some language, it would be I missed it. I guess I missed it. That is the most consistently made mistake by people who follow and love the stock market, missing the great stories or great stocks of their time. I especially appreciate some. I mean, you were there right at the start of Google as a public company. It was down at like two split adjusted. So when you said 116, that was something like a 58 bagger.

22:11And you were finally buying, you know, 50 bagger later. and look what's happened. And I also appreciate your point about as soon as you buy it, finally, out comes Chad, GBT, and the stock gets drilled. And I think all of us can relate to the, we finally decide to buy the stock, and this is always how it feels to me. The next day or week or month or quarter, it's about to go down. But that's not the game we're playing, is it? No. I mean, it does shake you, and you wonder, all right, did I make a mistake? And those past regrets start kicking in. But you just keep doing the work on the business. You think about what the company's doing.

22:46And Google started to come out with their own models, which I tried and used, and they were fantastic. And the narrative shifted again. And I'm not sure any company is better positioned for the future in terms of being defensible with a huge balance sheet and such an innovative culture. I don't think there's any better positioned company globally than Alphabet. And it doesn't mean it'll be the best stock and it doesn't mean I'm right. It just means when I think about who has the cash and the culture to evolve with the changing times that are inevitable with tech revolutions, there are not many safer, better bets in my mind than alpha bets.

23:23So, Sanmi, welcome home. And I love that you've already held it for several years. So, punch it home for us. What's the takeaway? So, stop wishing for a time machine to rewrite your past investing mistakes. use time travel investing and buy those companies that are the compounding rule breakers because you're not going to be late to the party. Very well said and very true. I think there are lots of heads nodding around the world, rule breaker listeners all, especially people with a lot of experience who've seen this happen again and again. Well, Samit, always a pleasure to be with you. Thanks for joining us around the campfire this week.

23:59All right. Thank you, David.

24:05And what a delight to welcome back one of my longest time Motley Fool friends. Rick Munarez and I first met, Rick was reminding me just before we came on here, in 1997 at a Rainforest Cafe. Rick, where was it again? It was at, well, it is now downtown Disney. It was the first Rainforest Cafe at a Disney theme park. They would eventually add more to France and two in Disney World now, but yes, that's where it was. And a fun stock back in the day, a company that's still around today. It has some history, still some fans out there. It obviously didn't end up being one of the raging Rule Breakers that we, fortunately, you and I have managed to identify multiple times for Rule Breaker members.

24:45Rainforest Cafe, not so much. But it got me together with you, and to that, that makes it one of my best stocks, I think. So, regardless of performance. Thank you, Rick. Let me just start by asking you, refresh our memory, what is Rick Munar doing around Fooldum these days? Yeah, so I continue to be part of the Rule Breakers service team that you started, and I was there at the start, so I'm very excited to still be there. 22 years later? Do I have the math right? You betcha. 22 years, yes. Yes, 22 years. I am also part of the Supernova Phoenix team. I am the co-captain with Emily Flippen. I continue to write stuff on the fool.com side.

25:16I do some research reports on the Stock Advisor side, on the Rule Breakers side, do some of the research reports there. And yet, just keep busy with all things Fooldom. 33, 34 years later, it's been a long time. It's been a great time. It has been a great time, Rick, and I can think of a few better and more prolific storytellers. No pressure around the campfire here, because even if you lay an egg, Rick, it won't matter. You've told so many great stories across time for so many Motley, not just our members, but those free articles that are out there on many portals, the way that people discover The Motley Fool is through Rick Munarriz's stories often.