Wednesday, 27 December 2023
by Earn Media
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This video was recorded on Nov.22, 2023.
David Gardner: What do you have to be grateful for? Pull up a chair and stay awhile. Let’s be grateful together. This week let us reflect on our world near the end of another year. Let us rejoice in the good things that we have. It’s Thanksgiving week. It’s our Gratitude 2023 podcast, only on this week’s Rule Breaker Investing.
Welcome back to Rule Breaker Investing, a delight to have you join me during what is, for me anyway, I bet for you too, one of the busier months of the year, so thank you for sparing some time to suffer, Fools, gladly. Speaking of thanks, that’s the theme of this week’s podcast. Near the end of another year, I want to thank together from a position of gratefulness, gratitude, the power of gratitude. I started this annual series in 2020. It was a COVID year. We were all shut in. I had a talk with my son, Gabe. Gabe is a well-read young lad at the age of 27. One of the books he has had on his shelf was, Thanks, How the New Science of Gratitude Can Make You Happier. It’s by Robert Emmons. This book originally came out, I believe, in 2007. I haven’t read it, but my son, Gabe, did read it. While I was talking about it with him three years ago, he said the thesis of the book is the general research on just how a bit of gratitude everyday is one of the few things that can increase our baseline level of happiness. Now maybe you, dear listener, have a practice of gratitude. Maybe you say a prayer each morning or have a meditation. Gratitude can take many different forms. Maybe you have a systematic regular process, and if you do, that’s more systematic probably than I have. As it turns out, as Robert Emmons shows through his studies, there’s a lot of positive psychology in this, by the way, for positive psychology fans.
As the inside of his book flap says, did you know that there’s a crucial component of happiness that is often overlooked? In fact, I’m just going to read from the dust cover and keep going on a bit here, and I quote “In the pages of this eminently readable book, Robert Emmons, editor-in-chief of The Journal of Positive Psychology, draws on the first major study of the subject of gratitude of ‘wanting what we have’ and shows that a systematic cultivation of this under-examined emotion can measurably change people’s lives.” It goes on a little bit lower. “Readers will discover how, one, people who regularly practice grateful thinking can increase their setpoint for happiness by as much as 25%.” That’s your baseline level of happiness wherever it is today, boosting it by as much as 25%.
“Two,” the book jacket goes on to say, “such increases can be sustained over a period of months, challenging the previously held notion that our setpoints for happiness are frozen at birth, and three, keeping a gratitude journal for as little as three weeks can result in better sleep and more energy.” It closes, “Emmons also reaches beyond science to bolster the case for gratitude by weaving in the writings of philosophers and novelists and theologians like no other book has before. Thanks, that’s the title of the book, Thanks inspires readers to embrace gratitude and all the benefits it can bring into our lives.” Before I get started with my eight gratitudes in this week’s show, I want to give a couple of more quotes, and speaking of thanking, I want to thank my son, Gabe, again, for sharing it out. One quote, this comes from the intro of the book, and I quote, “It is gratitude that enables us to receive, and it is gratitude that motivates us to repay by returning the goodness that we have been given. In short, it is gratitude that enables us to be fully human.” Finally the great 20th century humanitarian, physician, theologian, and Nobel Peace Prize winner Albert Schweitzer called gratitude the secret to life. In one particular sermon, he summarized his position by stating that, “The greatest thing is to give thanks for everything. He who has learned this knows what it means to live. He has penetrated the whole mystery of life, giving thanks for everything.” Everything sounds like too long a podcast this week, but I do have eight things queued up to give thanks for. Before I start with the first one, let’s just briefly think of the opposite of gratitude, and that would be ingratitude. For me it sounds a lot like complaining about everything.
I hope you don’t have anybody like this in your life. If I ever did, I don’t have now, I’m happy to say, but people whose first instinct is to complain, whenever I have in mind those feverish selfish little clods of ailments and grievances, I have to go back, speaking of quotes, to another of my favorite quotes previously covered on a Great Quotes Rule Breaker Investing podcast, and that would be the George Bernard Shaw quote from his play Man and Superman on living a great life. Let’s do it one more time right now, right here, and I quote, “This is the true joy in life, being used for a purpose recognized by yourself as a mighty one, being a force of nature instead of a feverish, selfish little clot of ailments and grievances complaining that the world will not devote itself to making you happy. I am of the opinion that my life belongs to the whole community. As long as I live, it is my privilege to do for it whatever I can. I want to be thoroughly used up when I die, for the harder I work, the more I live. I rejoice in life for its own sake. Life is no brief candle to me. It is sort of a splendid torch which I’ve got a hold of for the moment, and I want to make it burn as brightly as possible before handing it on to future generations.” Thank you, George Bernard Shaw, for that beautiful contrast between feverish clods of ailments and grievances complaining the world won’t devote itself to making us happy and the exact opposite, and that is gratefulness, in Schweitzer’s words, for everything. Gratitude number 1 this year, for my first gratitude, darn it, I do this every year, I want to thank you. Yes, you, whoever you are, wherever you are in your many places, and you’re all different. But I’m speaking to you right now, you a Rule Breaker brother or sister-in-arms, fellow Fools all, a community to which I can say, with Bernard Shaw, my life belongs.
Thank you for being there. Now this is not just, of course, to my Rule Breaker Investing podcast listeners, although it is most of all to you, but I want to thank all Motley Fool members and prospective Motley Fool members everywhere, especially I think of people who are not yet members today but who are awakened to the beauties of questioning conventional wisdom which is at the heart of Foolishness, so for all Fools everywhere, for that spirit of challenge and for doing it in a fun way, which has to be the case if you’re a Motley Fool. It’s one thing to be a Fool challenging conventional wisdom as a Fool, but if you’re a Motley Fool, you’re bringing some humor to it, just like Shakespeare’s jesters. To every Foolish spirit everywhere I say thank you because, arguably, as much as I apparently enjoy often talking to myself from one week to the next on this microphone, occasionally with friends or special guests, I wouldn’t do it just to talk to myself. I suppose I should especially thank you if you’re somebody who’s shared your story through this podcast. If you’ve shared your question, if you’ve written into our Mailbag, any of the Mailbags this year or any other year, thank you. This podcast is powered a quarter of the time by you, about one week in every four, it’s Mailbag. It’s your awesome stories, poems, and questions which power this podcast, so in a special thanks to you, it’s a reminder, next week is the Rule Breaker Investing Mailbag. Drop us a line. Rbi@fool.com has always been our email address. I hope it always will be. This is your opportunity to reach directly to me with your thoughts, questions, stories, Wisdoms at RBI Podcast is our address on Twitter. This is always the time of year when I get especially to thank Rick Engdahl, my Foolish producer, a partnership that is now in its ninth year. This is the 440th podcast for Rule Breaker Investing, one a week, a brand new show every week with no skips, no repeats going back to July 2015. Rick, you’ve pretty much produced all of them. There are some talented pinch hitters who’ve done some work here and there to give you a vacation, but thank you, Rick, so much. Titles of shows, by the way, Rick comes up with our titles, the show notes, of course, the actual edits for this podcast to make each week’s show the cleanest and most enjoyable listen we can manage. Rick, your humor, your occasional cameos, many sound effects, though I don’t think there can ever be too many of those, I’m thinking, but Rick, thank you so much for another great year together.
Rick Engdal: Thank you. That’s lovely to hear. It’s been a fun ride, and I’m not getting off the train yet.
David Gardner: You and I have a lot of fun. Just before we did the podcast this week, we’re just talking games and the board games that are coming out, reminding me, in a couple of weeks, we’ll do the Games, Games, Games podcast. You and I have many shared enjoyments, and one of them has been working together at The Motley Fool for, how many years now for you, Rick?
Rick Engdal: Twenty-three. Almost 24. I started in the beginning of 2000, so it’s really easy to count my days.
David Gardner: That is awesome. I forget that every year I think, and then I reask you, but it’s easy to remember because you started in 2000. Rick, thank you so much for the wonderful, enjoyable partnership that we have.
Rick Engdal: Thank you. I always say that I’m in a very lucky spot to spend all these years working with you and also with Alison and Bro on the Answers podcast. It’s the yin and the yang. I get all of my optimism and my forward-looking and my rule-breaking from you.
David Gardner: [laughs]
Rick Engdal: I get all of my careful keeping-things-safe from Bro, and between the two of you, it’s been definitely a blessing in our [laughs] family and our life.
David Gardner: Thank you, Rick. I really appreciate that. On to Gratitude Number 2, in order to more fully appreciate this one, I’m going to state it, but then I’m going to invert it. As I mentioned earlier, what’s the opposite of gratitude? It’s ingratitude. What’s gratitude? Number 2, I am grateful for kind people who take responsibility. Now in order to more fully appreciate this one, as I mentioned, we must invert. What is the opposite of kind people who take responsibility? That would be contemptuous people who blame others. I picked that word, contemptuous and contempt on purpose because it reminds me of Arthur Brooks’s appearance on this podcast a couple of months back, Arthur Brooks, his book with Oprah, Build the Life You Want. Arthur on the podcast was talking about contempt. It was in the context of a previous book of his called Love Your Enemies. If you got to hear our conversation, you’ll remember that. You might have even read the book yourself. I highly recommend both books, but Arthur was talking about how philosophers, I’m going to quote him here, “Philosophers call contempt the conviction of the worthlessness of another person. You’re convicted that somebody is worthless, and that’s contempt.” Now, neurophysiologically, and these are Arthur’s words, here’s contempt, there’s four negative emotions that your limbic system, basic emotions that it produces: anger, sadness, disgust, and fear. Those are the big four. When you mix them together, you have tons of combinations. Anger is a hot emotion. It says, I care, I want you to change. Disgust is a cold emotion. Anger is largely produced in the amygdala of the brain discussed in the insular cortex of the brain. Literally different parts of the limbic system of the brain. Disgust is a cold emotion that says get rid of it. When you mix disgust and anger, Arthur said, that’s contempt.
Contempt is this hot-cold emotion that says I hate what that person is doing, so therefore, I’m going to cast them out into utter darkness because they’re completely worthless, and this is a true expression of hate. That’s what hate actually looks like. Now the problem is, as Arthur said on the podcast, it’s become the vernacular of politics. If you look at any late-night cable pundit show, if you listen to most of your favorite politicians on the right or the left, they’re actually not your favorites, Arthur said, but they come from the 5% fringe of populism and polarization. For them, it’s pure contempt all the time. People will say, I love this country, but then they hate this country because they’re stupid and evil. That’s the pure language of contempt. What they’re trying to do, Arthur closed, these are dark triad personalities that can manipulate. They have a culture, and they’re conscripting us. They’re drafting us as soldiers into their culture war by trying to hijack the amygdala and insular cortices of our brains. Again all of those words were from Arthur Brooks. But as we reflected together on often in the state of political discourse, and I’m thinking about it one year ahead of some big elections next year, I’m reminded of how much all of us are taught in kindergarten to be kind and take responsibility for things. But how it seems to be that to get the clicks on social media, get the votes in elections, it seems as if the conventional wisdom today is to express contempt for others and blame them, the opposite of kind people who take responsibility.
I asked ChatGPT in conjunction with this podcast, ChatGPT, is there any organization today that allows me to score politician by politician, the frequency of their tendency to express hate for others and/or blame someone else or something else, as opposed to the opposite being kind to others, even your political opponents, and taking responsibility for what’s happening in the world at large and your own views? As you might not be surprised to hear ChatGPT could not identify any organization that is tracking that, but man, if that’s not somebody’s entrepreneurial calling, because I think a media watchdog that specifically is tracking and just looking for expressions of contempt and blame of others, if that were being tracked, I would give my vote every time to the kinder candidate who takes responsibility, and I don’t care which party they’re from. In this gratitude podcast, I feel a need now to return to a sense of gratitude. As I stand down from my little soap box. I just take a step back onto green grass again and express gratitude for kind people who take responsibility. As I thought about who are some well-known, kind people who take responsibility, I just came up with two quick examples. One is Dolly Parton. Dolly Parton is a phenomenal artist. She’s a great American, she’s a great businesswoman. She is a philanthropist. She is kind. Her Dollywood Foundation, just one of many examples of the kindness that she embodies and the responsibility she takes on behalf of others who are much less fortunate than she is. Dolly Parton is a kind person who takes responsibility. Here’s another one, Jose Andres, the fantastic chef. He happens to be based in the fair city of my birth, Washington, DC. But I think many people will know him not as just a local restaurateur but as an international figure who through his World Central Kitchen, makes a huge point of trying to get on-site of environmental disasters and get people food, get people the sustenance they need to survive another day or another week. He is an incredibly kind person who takes responsibility. Now, to my knowledge, neither Dolly nor Jose is running in your upcoming elections at a global, national, state, or local level, but I’m looking for those kinds of people. Forget about voting. This isn’t about elections.
This is about gratitude. Thank you, kind people, who take personal responsibility. On to Gratitude Number 3, now I hope I do this properly and delicately because if I do this the wrong way, it’s going to come off wrong, but I want to thank myself, and I want to explain something about this first. There are lots of reasons for self-appreciation. One of the most persuasive to me is generally people who have the healthiest lifestyle start to serve their body better once they appreciate it. That’s a good example. We tend to treat well the things that we appreciate, and darn it, a lot of us have kicked ourselves silly. I see it when somebody has a bad stock. They feel bad about it, not just the stock, but about themselves. There are a lot of people who have lower self-esteem, in my opinion, than I think that they should have. Our Foolish friend, Shirzad Chamine, author of Positive Intelligence, has spoken so well to this. Google Rule Breaker Investing Positive Intelligence. Just do it. Google Rule Breaker Investing Positive Intelligence and listen to either or both of my podcasts with Shirzad Chamine. Many of us kick ourselves silly. That’s no doubt true of some of you hearing me right now. I want to make sure you know the benefits of appreciating yourself. I, for Number 3, I’m just going to model this briefly by saying that I would like to appreciate one thing about myself here, Gratitude Number 3, and that is, I appreciate the decisions, most of them made by my younger self. My younger self is actually one of my favorite people. My younger self, every one of the five 100 baggers that I’ve brought to Motley Fool members through Rule Breakers and Stock Advisor, every one of those five 100-plus baggers were picked not by me but by my younger self, somebody who couldn’t know what was happening, somebody who had the guts to take risks on Rule Breaker-y companies, every Foolish winner, whether 100-plus bagger or not, every stock that I’ve picked was picked by my younger self. My company was started in part by my younger self.
I chose wonderfully, my younger self did, picking the right hand for a marriage lasting 33-plus years. Now there are so many things that I’m grateful for that were all decided by my younger self, somebody who had much less knowledge than I have today, somebody who didn’t know how things would turn out and yet made great decisions. Now my younger self also erred many a time, and I know those mistakes as well. Some of them I probably don’t even know yet. I’ll figure out through therapy 20 years from now, but I want to express appreciation. I hope I’m simply modeling this for you because this really isn’t about me. I hope that I’m helping you realize how truly grateful we need to be for that naive, happy-go-lucky, benighted this person who had blind spots a decade or three or four ago, and yet that person is in large part responsible for who you are today. All the good and all the bad, but I typically focus on the good. This is gratitude week. I want to thank my younger self. I’m encouraging you, in so doing, to think about your younger self and recognize the gratitude that you rightly should have for that innocent person who is doing their best, whether things worked out every time well or not. Gratitude Number 3, a little bit of self appreciation for all of us. On to Gratitude Number 4, and this one is the flavor of the year, I have to express gratitude to ChatGPT. I use ChatGPT almost everyday back when Sam Altman was with ChatGPT and even post Sam Altman. I don’t even mean just to say ChatGPT, because it’s really artificial intelligence. Earlier this year, we heard on this podcast from Kevin Kelly, the co-founder of Wired Magazine, the author of Excellent Advice for Living, the 2023 book. We had a great chat about that. Kevin and I did earlier this year. He reminds us that there are many different forms of artificial intelligence. I use Waze just about every drive that I take in my car. That has been artificial intelligence in my phone for a decade now helping me navigate traffic much more intelligently than I would have on my own. Artificial intelligence take many different forms, and I realize some of them are considered threatening and often we hear things, like, it’s going to be the end of the human race, artificial intelligence. By the way, I highly doubt that, and I am incredibly grateful so far for artificial intelligences, most specifically, ChatGPT. ChatGPT, thank you for the birthday gift ideas.
Thank you for proper pronunciations. Having just been in Italy, I’d always wondered, how do you pronounce bruschetta? Or as many will say in the US, bruschetta, that Italian appetizer with the tomatoes and the bread, bruschetta. That, by the way, is how it is supposed to be pronounced. That’s how the Italians pronounce it, bruschetta. Thank you, ChatGPT, for helping me learn that fun facts. Wherever you’re traveling, ChatGPT and artificial intelligence can enhance your travel experiences. It’s also accelerated my thank you note writing this year. Thank you, ChatGPT, and maybe my favorite use. This was pointed out to us by Mahan Tavakoli, who came on this podcast this summer and talked about artificial intelligence. I’m hoping Mahan might join us for the Besties coming up in a few weeks, but Mahan talked about the benefits of asking artificial intelligence, and/or ChatGPT, if you like, to challenge your own ideas, to point out potential weaknesses of what you’re thinking about doing or what you’re thinking about. That is a phenomenal use, a little bit of pushback by the AIs. By the way, ChatGPT, I also want to thank you for always answering in just seconds. It takes me seconds to come up with a bad dad joke. Thanks to ChatGPT. Great gratitude to the artificial intelligences that are starting to inform our lives and improve our society. For me, most particularly, the one I use almost everyday, I highly recommend it to you as well. It’s free ChatGPT. On to Gratitude Number 5. This one goes out to somebody who rarely listens to my podcast, and that’s my dad. My dad doesn’t really listen to podcasts. It’s not that he’s not supportive. He could not have been more supportive of my brother, Tom, and me as we created The Motley Fool, a child, together. Basically the kid we didn’t know we were going to create have together as brothers 30 years ago when we founded The Motley Fool. I make a point each year in this podcast of speaking to one or more family members.
This year I just want to return back to my dad, now at the age of 86. Dad, you’re the only person on Earth who’s known me my whole life. That on its own is a beautiful and slightly haunting and sad thought. Anyway he’s been such a positive force in my life, of course. In particular, unbeknownst to me, as I’ve sometimes talked about in the past on this podcast. Unbeknownst to me, at the age of zero when I was born, he was investing for me. He started an account for me at birth. Dad, you funded it over the course of time, you brilliantly invested it, and then you turned it all over to me, and then my younger brother, Tom, and then our younger sister, Mackie, each of us at the age of 18. You said to us, in so many words, here you are, I’ve made this for you. I’ve taught you the lessons behind why this works, why it has worked, why it should work, now, don’t screw up, although he never really said it that way. He did say, this is pretty much all you’re ever getting from me. Anything I have left at my death, and fortunately that hasn’t happened now, 80-plus years later yet, anything left at my death will go to your kids. Go forth and multiply, he said in so many words. Your starting a portfolio for me, I’m so profoundly grateful for that, dad, then, of course, more importantly, teaching me to invest. It’s one thing to give somebody a fish. It’s another, as the cliche goes, to teach them to fish, but boy, have I been taught to fish by a dad who probably won’t hear this because he doesn’t really download podcasts on his iPhone anymore, but teaching me to invest, to trust my instincts over the course of time, certainly, my instincts sometimes ran contrary to how dad thought about investing. I remember in the earliest days, I was so excited by the idea of finding stocks that could multiply, that I took some silly risks. I once bought a penny stock early on at the age of 18. I made some poor choices in those first few years as I was figuring out how to invest. I know that I was going against his instincts then, but dad let me. It’s a great lesson for parents. It’s hard for parents to let kids do that. Boy, is it helpful for kids for parents to let us make our own mistakes, and then as I started to succeed, and I was taking a Rule Breaker approach, a self-styled approach to investing, which he had appreciation for, but it wasn’t his own approach to just remind me to trust my instincts, and that has been so valuable. Darn it, gratitude to my dad, and I would be greatly remiss if I didn’t close out Number 5 with gratitude to my mother as well. My mother died in 2008. I don’t have as much opportunity to talk about her because she’s not around, and she wasn’t an investor, but she was an artist, a homemaker, and a society woman. She was a great talent. One of the untold stories, well, it was once told on the front page of The New York Times shortly after her death. But if you ever want to read a little bit more about it, just Google the phrase Comforts of the Carlyle. That’s Carlyle, as in the hotel in New York. You’ll read a beautiful story about her, get to know her and her talents a little bit more. Anyway, thanks, mom. Thanks, dad. On to Gratitude Number 6, as we’re nearing the homestretch, this one’s short and sweet. I want to thank conscious capitalism. It’s a concept I first heard about from its progenitor, John Mackey, the founder of Whole Foods Market, eventually sold to Amazon. John, today, having started a new company called Love Life, which, full disclosure I’m invested in. More full disclosure, John is on the board of directors of The Motley Fool, our company, and has served so ably and so fantastically for years now. But apart from John, who with Raj Sisodia, also a past guest on this podcast, wrote the book, Conscious Capitalism, more than years ago. I want to say that the summit that I go to every year in Austin, Texas.
Some of you are listening to me right now, who see me once a year at that summit, that is my one conference I go to every year. It’s my favorite conference. It’s my tribe. It’s people who understand that doing good through your business for profit is not just possible, but it’s a mandate, and ironically, and beautifully, doing good often leads you to doing well. Doing well by doing good is the great lesson of conscious capitalism. If that’s a phrase, dear listener, that you’re hearing for the first time, I highly encourage you to google it. I would highly encourage you to read the book, Conscious Capitalism. I’m on the national board of the organization, and I’m just so grateful for the challenges and learnings I get every year from people in the conscious capitalism community.
Many of us are living in cities where there might be a conscious capitalism chapter, or if not, you could consider dropping a note to the national office. Just go to consciouscapitalism.org to find out more. I am so grateful for conscious capitalism because it explains not just how I think the world works best and reminds me that the world does work this way. Not everybody practices it, but then again, not everybody invests very well. Not everybody behaves very well in this world, but those who do are conscious capitalists. In my experience, most of my best stock picks are companies that are consciously improving the world with their products and services. They’re usually the places people love to work. They’re usually the companies that have customers who love them. They’re usually the companies that are doing something for the environment or for their communities. I’m sure, dear listener, some of these companies suggest themselves to you right now. I hope they’re in your own portfolio. This is a great way to invest. It’s also a great way to do business. It is bearing the torch. It is part of the torch that you and I have briefly held with Bernard Shaw, and we’re looking forward to passing that forward to the generations to come. Thank you, conscious capitalism. On to Gratitude Number 7, you know the phrase just keep swimming was one that I was rocking quite a bit in the last 2 years on this podcast. I first started using it with real frequency.
Check it, I think it was 2022 as my stocks, probably yours too, if you’re invested like a Rule Breaker, my stocks started going down quite a bit in 2022. In fact as the smoke cleared last year around this time, my own portfolio had been about cut in half in just 1 year. That didn’t feel good at all, but then again, it didn’t feel good at all either in 2008 and 2009, or in 2001, or the stock market crash of 1987, all of which I’ve personally lived through, been invested before, during, and after because I buy, and I keep buying, I rarely sell, and I hold through every market environment. It’s worked so well for me, and it’s such an easier way to approach things, and so we need phrases, we need exemplars to steal us, to steal our confidence, and to inspire us, and so Dory from the movie, Finding Nemo, which I first saw with my little kids in the theater back in the day when Pixar was still an independent public company, it was a stock pick of mine, a big time winner for Motley Fool Stock Advisor.
Of course, it eventually got bought up by Disney. We only got to enjoy Pixar as its own public company for several years with Steve Jobs, by the way, as CEO before it got eaten up by Disney. Disney’s done a great job overall with Pixar. I’m incredibly grateful for Ed Catmull, the founder of Pixar, and so many people that I’ve learned a lot from. Just keep swimming has been the watchword I used throughout 2022. I’m here to remind you now, near the end of 2023, my stocks aren’t all the way back from where they were in 2021, but man are they are a lot closer to 2021 than they were this time last year. I hope you can say the same yourself, dear listener. The stock market as measured by the S&P 500, as we record this on Monday, November 20th, normally we record on Tuesdays, but it’s Thanksgiving week. Rick and I are taking an extra day off by recording on Monday. As of right now, the S&P 500 is up 17.8% this year. My Rule Breaker stocks, I hope yours too are up well more than that. It has been a great reminder of the benefits of just keep swimming.
Thank you, Dory. Thank you, Finding Nemo. Thank you, Pixar. Thank you, Steve Jobs, who means a lot to me for other reasons besides the one time I met him, a lesson I’ve told. I’m not going to tell it right now in the past in this podcast, my brush with Steve Jobs, such a fun thing to think back on, and then how about that he ended his famous 2005 Stanford commencement talk with the phrase, stay hungry, stay Foolish, and yeah, he meant, capital F, Foolish. Thank you, Steve Jobs. Just keep swimming. On to Gratitude Number 8 in closing, this one to the stock market and why we invest. I did this last year, and I’m going to do it again. I want to thank the stock market and why we invest. I want to start by saying that that we can even invest is worthy of our gratitude. For many of us hearing me right now, we were born into a society that we are in danger of taking sometimes too much for granted. It’s hard to appreciate all of the things that have privileged us, that we’ve inherited in some cases, or just naturally been surrounded by or fallen into through serendipity. More than those things is that we have currency that lets us store up value. My good friend, Wikipedia, reminds us that originally currency was a form of receipt representing grain stored in temple granaries in Sumer in ancient Mesopotamia, and in ancient Egypt. They eventually realized that coinage would probably be a better way to store value because coinage is harder for the weather elements to mess with and sometimes for thieves too, so I’m grateful. Anyway thank you, currency, and thank you, banks, which enable most of us, though sadly not everyone in the world today, but most of us, can protect those savings through banks, can guard it. You know that it will be there, your savings for you from one day to the next, so thank you, banks. Then actually, through the stock market, we can translate our savings into part ownership of companies whose products and services and work in this world we admire, companies you can take pride in, that you can actually become a part owner of through the small miracle of the stock market that we too often take for granted, that’s pretty great.
Even better, because it gets even better if you’ve invested it well, and you give everything time to happen, good stocks grow in value over time. Good news for you, with you and me doing very little, I’ve done very little to power the stocks that have powered my life and the lives of many who followed The Motley Fool and continue to do so going forward, I hope for the next three decade. We’re still just getting started at Fool HQ, but I’ve done very little to help out my stocks, like Amazon or Netflix, and they’ve done so very much to empower me and many others toward financial freedom, so thank you, market, that you are even there. Last year I gave this same thanks to the market despite how badly it had treated me. Why would we thank a market that had made us poorer throughout 2022? I mentioned Shirzad Chamine earlier on the podcast this week. Even our worst experiences, he would say, can be gifts and opportunities. Part of the gift of bear markets, part of the gift of a stock market that, on average, over the last 100 years, has lost value about one year in three, one out of every three years. If you’re an investor for life, like me, you’re going to lose part of the gift of that, of seeing through Shirzad’s lenses.
For me, it’s to make us appreciate the good times. There’s something really amazing about a dynamic where you lose one out of three times because the other two times, which occur twice as often as the one bad time, the other two times prove the power of losing to win. Losing to win, one of my favorite most repeated themes on this podcast. Losing helps you and me appreciate winning, and hard times make the good times even sweeter. The truth is, if we never lost, if we didn’t ever face hard times, we couldn’t understand or appreciate the good times that are both behind us and yet still ahead of us. It is a true gift to experience loss because it makes you savor the good times. Another gift of market sell-offs, by the way, watching the tide go out is that, as the Wag says, you see who wasn’t wearing pants. You know if the market was always going up, if speculation was always rewarded, then all kinds of half-baked, crazy, ridiculous business models, questionable characters, all of these would be constantly rewarded. It would be hard to separate the silver from the dross.
Indeed it takes market sell-offs to expose chicanery, to expose fraud, to expose the pump and dump schemes of the past, the Ponzi schemes. Many market sell-offs over the course of time have provided natural consequences that need to have happened for us to get back on track with good things that really matter, so it is a gift. Is it not, Shirzad Chamine? These market sell-offs they send the tide out, and they expose the silly, and that’s important. Finally I think that there is an opportunity for market sell-offs to learn. Haven’t we done that over the last couple of years, learning about ourselves? Last year on this podcast, Emily Flippen came on 2022. She said, “I’m grateful for this time because I still have so many years ahead to invest and to prosper.” But Emily said, “I’ve just lived through a real market sell-off for the first time in my adult life, and that’s a real opportunity to learn about the markets and about ourselves.” I thought that was a great line, Emily. I think this is ascribed to Nelson Mandela, this line, I either win or I learn. That was then 2022, and this is now. This year I want to thank the stock market for the normal reasons because this year we just kept swimming, and I got my market call right once again. The market went up this year, and by the way, I think it’s going up next year too. It’s a lot easier and a lot more fun to thank the stock market in better times as I’m doing now, but I’m also reminding you that I did this exact same thanks last year when the market had cut me in two. I said at the start of Gratitude Number 8, it’s about the market which I’ve just spoken to, but I also said it’s about why we invest. That’s another thing I’m extremely grateful for, not just the market itself but why we invest. In closing I want to share with you a brief essay which I’ve turned into an audio essay that recurs only once a year on this podcast as well as a short poem that was inspired by the audio essay to close this way once again for my annual gratitude podcast.
This is an essay I first wrote in Motley Fool Stock Advisor in 2010, and shortly after it was published on our Discussion Boards at Fool.com, one of our members who went under the screen name Captain Haiku, which I later understood to be actually two young women, who are sisters, composed a brief poem in response. Again I’m about to share with you my audio essay and then their poem to close. Here we go, Gratitude, Number 8 closing it out with my annual audio essay, Why We Invest. My favorite episode of my favorite miniseries, Band of Brothers, is entitled Why We Fight. Without wishing to spoil the story for those who haven’t yet seen it, I won’t give away the answer to that question, but the episode is a beautiful, sad, and gripping piece of Hollywood poetry and the phrase, why we fight, has since stuck with me, and it’s morphed into my own phrase, why we invest. Let’s peel every layer of the onion away at the start. At the root of the fruit is this simple reality. We work hard in this world to build up savings, that savings we call capital. Our capital represents the sum total of our lives’ efforts expressed monetarily above and beyond what we’ve spent. When we invest, we’re doing something very wonderful and very difficult. We’re forfeiting the enjoyment of the use of this capital in the near term. All our instincts and temptations, many of our peers, perhaps even a spouse, urge us, sometimes directly or subtly by association against this, spend it now. Reads or sings or shouts, any one of thousands of messages confronting the typical adult everyday, but investors take at least some of their capital and do the exact opposite. We forego the instant gratification. That on its own is admirable, but we go one further. We crazy investors, forfeit the enjoyable immediate use of our capital for no certain reward. As stock market investors, in particular, we invest willingly, knowing that our unspent and unenjoyed capital may actually, at least, partly disappear. If there’s a better reason for calling ourselves Fools, I don’t know that the world will ever find it and in particular, practicing my own unique style of investing is a more aggressive rule-breaking approach to seeking maximal returns, and I flat out know that I will lose money on many occasions. Throw away in the academic studies that say investing in individual stocks isn’t worthwhile because you can’t reliably beat the indices, and now you can see why do-it-yourself investing is a niche.
It’s a niche we’ve been helping to grow at The Motley Fool, but it’s a niche. Here’s why we invest for our children and grandchildren, because our parents and grandparents did and made our lives so much better, because every dollar we invest helps support the companies and businesses we admire and buy from, because we love and celebrate ownership and believe this world will be far stronger for more owners, not more renters, because the academics are wrong, because with Arthur O’Shaughnessy and his Ode, we are the music makers, and we are the dreamers of dreams, and investing is our instrument. Making dreams come true, even more than Disney, I think, is a very real Motley Fool end, and 100 other reasons besides these are, all in part or in whole, why we invest. Keep at it, dear Fools. Now before I close out with Captain Haiku’s response, I do want to remind you next week is your Rule Breaker investing Mailbag so give me a gift. Will you drop me a thought, a story, a question, or maybe a poem of your own? All are welcome.
We’ll record next week’s Mailbag, Rick and I, on Monday, so please get me a note now or over the weekend. Our email address, of course, email@example.com. Now to close Captain Haiku’s response scribed by two Foolish sisters in a short sequence of haikus that speak so well to why we invest. Sorry, can’t truncate, each word has import and heart, not selfish we build. Many years gone by hard work, hard times, good times too Haiku needs little. Why do we invest? So that our hard work endures beyond our short years. So that our children start their journeys on a hill and see the mountain. We build battlements that endure, shelter others from the worst of storms. We launch sturdy ships. We will not see the far shore but have no regrets. We are a small part of all we set in motion, and thus we invest. A very happy Thanksgiving to all my American listeners and one more concentric circle out of thanks during this Thanksgiving week to all Fools everywhere. That means you. Thanks.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner has positions in Amazon, Netflix, and Walt Disney. Rick Engdahl has positions in Amazon, Netflix, and Walt Disney. The Motley Fool has positions in and recommends Amazon, Netflix, and Walt Disney. The Motley Fool has a disclosure policy.