60 Thoughts As I Turn 60

**David Gardner** (0:00)
Sixty thoughts as I turn 60, 20 on investing, 20 on business, 20 on life. Not the 60 best thoughts ever thought. Certainly not the last 60 that I'll ever think, and maybe not even the same 60 I'd choose a year from now. But these are things I've come to believe. Earned through investing, entrepreneurship, friendship, reading, losing, winning, and trying to stay foolish, capital F, all along the way. It's a milestone birthday. It's a landmark episode, 60 Thoughts, as I turn 60 only on this week's Rule Breaker Investing.

**SPEAKER_2** (0:40)
It's the Rule Breaker Investing Podcast with Motley Fool co-founder, David Gardner.

**David Gardner** (0:49)
Welcome back to Rule Breaker Investing. This week is a little different. I just turned 60, and to mark that milestone, I've gathered 60 thoughts, 20 about investing, 20 about business, and 20 about life. Some are mine. Some are borrowed from writers, founders, investors, philosophers, and fools who've helped shape me. Some are one-liners. Some need a little room. All of them in one way or another have helped me see more clearly. My hope is not that you agree with every one. My hope is that a few stick, maybe at least one or two, enough that you carry them forward yourself. So let's get started. And pretty much my goal is to give you these 60, now that I'm 60, in 60-ish. I never know how long the ad breaks go. These are things I have come to believe. They've helped me win the game of investing. I hope they do the same for you.
Number one, everyone is an investor. When addressing a room, I've said, raise your hand if you're an investor. It's a trick question. It catches only those who think investing is what other people do, a specialized class, not me or you, right? Wrong. Put your hand up. Everyone is an investor of both money and time. Your choice to do this, not that, to spend here, not there, are all investments. Everyone is an investor. The stock market always goes down faster than it goes up, but it always goes up more than it goes down. Number three, and I quote, forming macro opinions or listening to the macro or market predictions of others is a waste of time. End quote, Warren Buffett.
You know who waits for dips? Dips, dips, wait for dips. Number five, this one comes from behavioral economics, where it's pretty much lab tested at this point, and this is also true of humans outside of the laboratory of behavioral economics. The pain of loss is three times the joy of gain. Think about that. It's hardwired into your biology and mind. The pain of loss is three times the joy of gain. Yet think about it, the joy of investment gains is potentially infinite times the pain of loss. It's simple math. The worst you can ever do is lose 100 percent of your investment, and that's pretty bad, and most of us have never quite done that. But what's the best you can do? Well, you know, it's way, way better than plus 100 percent. The joy of investment gains is potentially infinite times the pain of loss. So if you can get past your own biology and more into the psychology of being a successful investor, this simple math is your best friend.
I picked TSLA on November 23rd, 2011 It's just a few weeks after Elon Musk came to FullHQ and gave a speech to our employees. The stock split adjusted when I picked it in November 2011 right around Thanksgiving Day, was $2.10 a share. It was the third most highly shorted stock on the NASDAQ. TSLA has since gone from 2 to 445 It's up more than 200 times in value. The gains of that one stock pick alone exceed all of the losses of every significant loser stock in Rule Breaker history, and I know because I picked most of those losers too. This thought isn't about TSLA. Hey, the Rule Breaker scorecard actually has several dozen 10-plus baggers on it besides TSLA, and by the way, more than one 100 bagger. And yet, most people fear bound, don't know how to invest, don't see how they should do this over time. And so, they never discover this profound Rule Breaker Investing Truth, thought number six, that the value of winning completely wipes out the cost of losing.
There are no numbers for the things that matter most. As Rule Breakers, we intentionally seek stocks with six traits, the sixth of which is, even despite the presence of the other five, number six, people call the stock overvalued. Well, to them, it probably is. They're using their calculators and spreadsheets. It's all about ratios of simple measurables like revenues or earnings or cash flow. Yet, they are not even measuring the value of the CEO. They are not even measuring the brand name. They are not even measuring the company culture. They are not even measuring the innovative capability or lack thereof of the company. So by traditional metrics, all the best companies with the best CEOs, brands, cultures, and innovation look overvalued. All the companies with the worst CEOs, brands, cultures, and innovation look undervalued. These kinds of investors, they are all of them misled, which is how you pick Tesla at $2.10 a share when it's the third most shorted stock on the NASDAQ. Why?