Finding Companies That Break the Rules, w/ David Gardner – [Invest Like the Best, EP.54]

The investment strategy discussed in this week’s episode is diametrically opposed to my own value tendencies, but it still one that has done exceptionally well.

My guest is David Gardner, co-founder of the Motley Fool. He is unique in that he is both a pure investor–a true stock junkie–and an entrepreneur. His energy is remarkable. His positive vibes are something to behold. You’ll hear it over audio, but it’s ever more palpable in person.

Our conversation is about finding companies which are breaking rules in the right way and reshaping industries. David’s goal is to find these companies early in and hold them forever.

If you love investing, you are going to love this regardless of your prior beliefs. Please enjoy my conversation with David Gardner on rule breakers.

Books Referenced

The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change)

The New Penguin Dictionary of Modern Quotations

Moneyball: The Art of Winning an Unfair Game

The Motley Fool Investment Guide: How The Fool Beats Wall Street’s Wise Men And How You Can Too

The Wisdom of Crowds

The Motley Fools Rule Breakers Rule Makers : The Foolish Guide To Picking Stocks

 

Links Referenced

Totally Absorbed

FANG stocks

Henry Cloud (author)

“I had a lover’s quarrel with the world” by Robert Frost

As You Like it (Shakespeare)

Invest Like the Best episod with Morgan Housel

Don’t Be a Dip: The 1 Thing You Need to Know About Buying on Dips

Board Game Agricola

Boardgamegeek.com

 

Show Notes

2:03 – (First question) – Among the experiments that David has run in his podcast, which one has he enjoyed the most

 

3:42 – A deep dive into the rule breaker mentality that David uses

4:39 –  The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change)

 

3:52 –  How his model may mimic venture capital early stage investing

 

7:22 – What helps you to not sell a rule breaker amid big drawdowns.

7:33 – Totally Absorbed

8:32 – FANG stocks

 

12:25 – List of criteria in picking rule breaker stocks…starting with top dogs and first movers

 

19:34 – Second criteria…visionary leadership and the traits David looks for in a leader

22:02 – Henry Cloud (author)

22:58 – “I had a lover’s quarrel with the world” by Robert Frost

 

24:07 – Smart backing as part of that second criteria

 

26:16 – Third criteria – competitive advantage and moats

 

30:50 – Looking at the development of the Motley Fool brand and business

32:47 – The New Penguin Dictionary of Modern Quotations

32:49 – As You Like it (Shakespeare)

 

39:29 – Looking at David’s writing and how it has evolved over the years

40:36 – Moneyball: The Art of Winning an Unfair Game

41:31 – The Motley Fool Investment Guide: How The Fool Beats Wall Street’s Wise Men And How You Can Too

42:43 – Invest Like the Best episod with Morgan Housel

42:45 – The Wisdom of Crowds

 

43:33 – Back to criteria, the fourth one, price momentum

45:47 – Don’t Be a Dip: The 1 Thing You Need to Know About Buying on Dips

 

50:03 – Last criteria, something being overvalued and weigh that against the idea of whether a product or service is important based on whether people would miss it

52:10 – The Motley Fools Rule Breakers Rule Makers : The Foolish Guide To Picking Stocks

 

1:01:21 – Looking at David’s process for finding a stock and analyzing it

 

1:07:38 – The importance of taking these criteria in concert and how you can see the power of overvaluation

1:10:39 – Board Game Agricola

1:10:54 – Boardgamegeek.com

 

1:14:38 – Kindest thing anyone has done for David