ChatGPT Asks & Motley Fool-Co-Founder David Gardner Answers

In this podcast, ChatGPT pitches Motley Fool co-founder David Gardner five questions, each a unique pitch type:

1. Hardball: What separates Rule Breakers built to last from those destined to fizzle out?

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2. Softball: Can David sum up Rule Breaker investing in one sentence?

3. Curveball: What would make David rethink a long-term winner?

4. Screwball: Is there a traditional investing rule that David begrudgingly respects?

5. Knuckleball: If David could pass on just one Rule Breaker principle, what would it be?

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our beginner's guide to investing in stocks. A full transcript follows the video.

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This video was recorded on Nov. 13, 2024.

David Gardner: In June of this year, I asked ChatGPT to come up with five of the most beautiful, challenging, inventive, valuable, provocative, and/or Foolish questions about Rule Breaker investing. It did, and I gave my best shots at answering them on that week's podcast five months ago and so is born a new episodic series for the Rule Breaker Investing podcast. This week's volume 2 picks up right where we left off. Five more questions, some of which go deeper than last time, and some of which go totally new direction. In fact, we're rocking a baseball theme. The five questions are five pitches, and the five pitches I'll be swinging at this week are ChatGPT's very best hardball, softball, curveball, screwball, and knuckle-ball. Get ready for a mix of depth, whimsy, and surprise. As ChatGPT and I go head to head once more, only on this week's Rule Breaker Investing.

Welcome back to Rule Breaker Investing. I'm getting excited about the holidays and yeah, the holidays. But I'm thinking about our holiday podcasts, looking ahead. I already have mapped out the six to close this year because we tend some of these are traditional. We go back to them each year, just like Thanksgiving or Christmas or Hanukkah. Next week will be Gratitude 2024. Time to say thanks together for this year that has been. Of course, a mailbag will come the week after the week of Thanksgiving. December pretty much goes the same way every December does on this podcast. Now late in our ninth year, Games, Games, Games Volume 6 will kick off the first week of December. We'll go over my favorite tabletop board games of this year in time for holiday gift-giving. Then our besties, 2024. What were my 10 favorite podcasts, welcoming back guest stars, galore for the second week of December, of course, the Market Cap Game Show after that and then our final Nail Back episode of the year? That will be then. But this is now.

Before I kicked off this episodic series ChatGPT asks David Answers, I decided to ask ChatGPT what it knew about this podcast. That's something for those who don't prompt ChatGPT regularly or don't know you can do, you can. You can always just say, at the top of any thread with ChatGPT, please summarize what you know about me or please summarize what you know about this. Of course, if we're going to do a podcast where ChatGPT on the podcast asked me questions about this podcast, it's probably helpful just to make sure we were aligned. I said, tell me six things about the Rule Breaker Investing podcast, and this is what ChatGPT said back before giving me the five prompts for this week.

A quick summary of this podcast in six points. Point number 1, it said the podcast emphasizes unconventional investing strategies that aim to make people smarter, happier, and richer. It encourages investing in top-performing companies with strong growth potential.

That was number 1. Number 2, educational focus. David provides valuable lessons on investing habits, traits to look for in stocks, principles for building a portfolio. Number 3, engagement with listeners, monthly mailback episodes, address listener questions, enhancing engagement, and providing personalized advice. Number 4, ChatGPT said guest features. The podcast frequently features authors, experts, and thought leaders, offering diverse perspectives and insights and five and six go like this. Number 5, humor and storytelling. David incorporates humor, historical references, and storytelling, making complex financial concepts more accessible and enjoyable and finally number 6, conscious capitalism. There's a strong focus on conscious capitalism, advocating for businesses that positively impact society and operate with a long-term perspective.

I said back to ChatGPT, thank you very much. That is a very good summary, indeed of what this podcast is about and stands for and aims to deliver every week. Knowing now that we were aligned, I decided, let's spruce up volume 2.

What I've asked ChatGPT to do is throw me five questions just like last time, except this time using a baseball vernacular, one of my favorite metaphors, of course, for investing is baseball. It's really an ongoing allegory, an extended metaphor. We're going to be rocking each of these questions as a pitch baseball fans, and I realize not everybody's a baseball fan, so I'll briefly explain what I mean by each of these pitches as we get into the podcast. I have asked ChatGPT to give me its very best shot in the form of a hardball, a softball, a curveball, a screwball, and we'll close with a knuckleball.

Without further ado, let's get started. Question number 1, the hardball. I said to ChatGPT, this is probably maybe a follow-up from last episode. If you feel I didn't effectively address that initial question in the first place or if you think there's more richness to discover by asking me a hardball question, forcing me to go deeper, do it. Hardball. Here we go. I quote, "With technology rapidly advancing, we're seeing more disruptive innovation than ever before." In volume 1, you mentioned maintaining a long-term amid accelerating technology, especially in fields like AI and biotech. Here's the hardball. How do you distinguish between truly transformative companies that will stand the test of time versus those that are simply innovative, but may ultimately fizzle? In your view, what characteristics separate genuine Rule Breaker companies from ones that seem promising but end up being short-lived hype stocks?"

Well, let me first appreciate the question. I especially appreciated right at the start, ChatGPT, pointing out that more disruptive innovation is happening now than ever before. By the way, that is great news. It is great news for Rule Breaker investors that innovation is spreading like wildfire. It's a little bit disconcerting sometimes a lot of the things we grew up with or expect begin to change. All of a sudden AI is making some decisions, for example, driving a portion of this podcast this week, or robots may be taking over some of the things that people once did, and that's going to continue proliferating into the future. But for Rule Breaker investors, that's exactly what we're looking for. We're looking for companies providing better products and services, replacing the older ones with something better. Through the miracle of the stock market, we can be part owners of the companies that do that, and we're going to beat the stock market and most of Wall Street by buying in earlier and holding well past the very short-term time frames that most people trade in when they talk about the stock market. That is an essence of Rule Breaker investing.

Yes, ChatGPT, it starts with more disruptive innovation than ever before. The question though, about distinguishing between truly transformative companies versus the ones that may ultimately fizzle. I think I start my answer with a nod to Rule Breaker stock trait number 1. I first wrote about it in our book, Rule Breakers Rule Makers, dated 1998. I hope you'll take some solace or even interest in noting, dear listener, that here we are 26 years later, and I'm still talking about the exact same trait, having used it over the last few decades to pick stocks often for Motley Fool members. The first trait of the Rule Breaker stock is we're looking for a top dog and first mover in an important emerging industry.

Of the six stock traits we look for in Rule Breaker stocks, that is the first one. I put it first because it's the most important. I've often said in the past and I say it again here that if you just focused all of your stock market investing on that pond, if you just pick up your fishing rod and only fish in that stocked pond, you're only looking for companies that are top dogs and first movers in important emerging industries, you are in a much better place than most investors and you will very likely outperform most investors by focusing on these kinds of companies. When does it go wrong? Which are the ones that fizzle out versus the truly transformative ones? I was thinking about this from three angles.

I wrote 26 years ago in the book, I use the phrase, I don't use it that much in the podcast anymore, but it's a great one Faker Breakers. Stocks that look like Rule Breakers, companies that look and smell like Rule Breakers, but they end up not really being Rule Breakers, so we call them Faker Breakers. I have a few different types that I want to go over in answering this provocative hardball question. The first one are companies that are not really top dogs. They're in important emerging industries, but the Faker Breaker, the fizzle-out thing going on with them is they might be first movers. They're not top dogs.

Let me give a few examples, Blackberry. Blackberry was certainly an early mover in smartphones. It was dominant for a good portion of time but ultimately, it didn't end up the top dog, even if it was the first mover because it didn't keep innovating when Apple showed up with its iPhone and Google showed up with its Android, and all of a sudden, the world proliferated with smartphones. Yet Blackberry was still clinging to that physical keyboard which had been so effective for years on its phone, and iPhones and Android phones just dispense with it altogether. That was a good example of Blackberry failing to continue to innovate and no longer being the top dog and first mover, even though it was in an important emerging industry. Blackberry, a couple more examples come to mind. How about MySpace? Facebook came along shortly after MySpace launched. MySpace was the social network. It was all by its lonesome in the pole position first place in social media early on, but Facebook showed up with a better user experience, some better features. Especially, Facebook iterated more rapidly than the people did over at MySpace.

As a consequence, MySpace is just a page in a chapter of investing in business history at this point, and Facebook Meta Platforms is today the obvious Rule Breaker, which has been a fantastic Rule Breaker stock for Rule Breaker members for more than a decade now. MySpace is another example of a company that in an important emerging industry, it didn't stay as top dog, it didn't keep moving. A third one comes to mind. This is a stock pick of mine that didn't work out. Unfortunately, it was a 10-bagger at one point, and we eventually sold at a loss, and that's 3D Systems, the 3D printing company which had a lot of hype behind it, including some of my own, a lot of belief from a lot of people that this could be a transformative company. But 3D Systems, which still exists today, it's just much smaller and less ambitious. I would say it was really challenged at scaling.

In fact, widespread adoption, which I was hoping for for 3D printing, still really hasn't shown up, especially at the consumer level, where a lot of 3D Systems business was focused. Certainly, there are 3D-printed houses today. There are 3D-printed industrial parts. It is a substantial and important technology. But 3D Systems in that important emerging industry did not really establish itself beyond first movement as a top dog. In answering this hardball question, doing a deep dive with you as we answer ChatGPT's question, I think of the three categories I can think of for faker breakers, the first one to summarize, are companies that just didn't establish or keep top dog status, albeit in a dynamic industry, Blackberry, MySpace, 3D Systems.

Now let's do the flip of that. Category 2 of Faker Breakers are companies that were top dogs and they were first movers. But as it turned out, they didn't end up in important emerging industries. Their industries or their products were emerging. But what at first appeared to be brand new industries ended up not really being so and so these companies fizzled out. I've got three more quick examples of this one. Let's start with GoPro and action cameras. Fantastic product, made a big splash when it appeared. It started looking like it could be a media company with its own TV channel. But in the end, GoPro action cameras were really more of a feature than a stand-alone industry. This is a good example of a company that made a splash. I picked it for Motley Fool Rule Breakers. In fact, I picked all three of these stocks for Motley Fool Rule Breakers, but they ended up not being the industries I hoped they would be.

The second one that comes to mind is Fitbit. Wearable fitness is certainly an important technology, Fitbit, an early mover and a Rule Breaker stock pick. But I think what happened is that smartphones showed up and began to copy some of the features of the wearable fitness trends, and the Apple Watch showed up as well. All of a sudden, we're similarly tracking our activities and movements. We just don't need a dedicated Fitbit for that purpose. Fitbit ended up fizzling out as well. There's a third example that comes to mind. Again, I regret to say another stock pick of mine for Motley Fool Rule Breakers, and that would be Pandora.

Pandora, which I continue to use to this day. It was really the first personalized music streaming service. Thumb up the one you like, thumb down the one you don't like. You're not really sure what's going to show up next as the channel creates itself with your help over the course of time. I have dozens of Pandora channels. But I think what a lot of us have noticed since then is Spotify showed up, and Apple Music showed up. On-demand listening showed up, what Pandora didn't really provide, and eventually Pandora just acquired as a small company by SiriusXM again, still exists today, but GoPro, Fitbit and Pandora, I would say TiVo as well, were all early flash companies that were doing something really interesting, but they did not in the end end up being a leader in an important industry.

They were really more of a feature than an industry, and each of them fizzled. I hope this deep dive ChatGPT and Dear Listener into the Rule Breakers that didn't work at. Because they were Faker Breakers and the recognition that some of them, again, Faker Breaker class 1, the ones that were in important emerging industries, however, they didn't end up staying as top dogs. The second class of Faker Breakers, the ones that were not, as it turns out, in important emerging industries. I think that gives a pretty good way of analyzing and viewing the ones that don't work out versus the ones that do. There is a third category. I'm going to call this group number 3, and I'm just going to say that's the way the cookie crumbles. In other words, sometimes things just don't go your way, even if you do have a good top dog and first mover in an important emerging industry. There are extraneous factors that come into play and matter.

There's no single factor that you can ever look at and say, these stocks will win and these won't because they all fulfill this trait that we've talked about here over the last few minutes versus the ones that don't. I would just say companies like Nokia or Yahoo or Kodak, these are all companies that for a long time were big winners. Yet, ultimately, I would say to group them together, they didn't really keep up with innovation. Thinking about Nokia. It certainly didn't respond to innovation. It ended up selling its phone business to Microsoft, Yahoo.

Yahoo actually tried to acquire Google early on and missed that opportunity. Eventually, Yahoo was sold to Verizon and Kodak. Maybe the saddest example of all for decades, a great American company based in Rochester, New York, bringing photography cheaply to the masses, Kodak pioneered digital photography technology, but ultimately, it didn't want to cannibalize its film business. All of those got to get your pictures developed people, slowed down Kodak from responding to companies that came in and began to break its rules, and eventually, Kodak ended up in bankruptcy.

This third group of faker breakers or companies that really were real Rule Breakers for an extended period of time, but in general, didn't keep up with innovation. In answer to your question, ChatGPT, distinguish between the truly transformative ones and the ones that fizzle. I hope this was an adequate response. Let's move on to something a little easier and quicker. In fact, pitch Number 2 is a softball. For those who are not big baseball fans, well, after a hardball, you often appreciate a softball. I ask ChatGPT to serve me up an easy question for me to answer with particular emphasis, perhaps, on speaking to new listeners.

Here is question Number 2. "If you had to sum up Rule Breaker Investing in a single sentence, what would it be?" I thought about this one and I decided without prolonging my answer too much, I didn't want to just do one sentence. I came up with five sentences, but each of them could stand alone as an answer to this question, but they come at it from different angles, which I think makes for a slightly more interesting podcast. If I had to summarize Rule Breaker Investing in a single sentence, here's a few ways I might do it. Here's the first. Everyone is an investor and everyone can make a 100 bagger. Speaking to that briefly, sometimes I've asked people to raise your hand in a room full of maybe I'm giving a talk at a conference. Raise your hand if you're an investor, and it's a trick question because everybody should be raising his or her hand. Everyone should be raising their hand because we're all investors, even if it's just the time that you're investing in things or the money that you spent on this when you could have spent it on that, we're all constantly making investments and waking up to that, switching on to that and realizing that as an investor, you probably should commit to your future self to save. To save some money today, invest it today to benefit from the shade of the tree that grows that you grew tomorrow.

That, by the way, everyone can make what to many people, seems preposterously difficult. Everyone can make a 100 bag or a stock that goes up 100 or more times in value. I've already done it seven times historically for Motley Fool members. Any one of which of those stocks can make you financially free, and anybody who paid us $100 or more for Motley Fool Stock Advisor has seen that a number of times. It's very possible, it's very doable. I want the whole world to know that. That's what we've been trying to do at The Motley Fool. For me in this podcast for nine plus years now is to recognize that that is indeed not just possible but very doable. If you go about things the right way, like a Rule Breaker.

There's a sentence. Here's a different one. The joy of investment gains is potentially infinite times the pain of loss. The value of winning completely wipes out the cost of losing. Humans are hard wired to resist loss at three times the rate that we enjoy gain. That's just biological for all of us. But here's the amazing thing about investing. The worst you can ever do is lose 100% of your money, and even with bad stocks like GoPro or Pandora, I've still never quite done that. But the best you can do isn't just 100% higher, balancing out your 100% loser. Nope, the best you can do, well, every one of those 100 baggers has gone up 10,000% or more. The joy of investment is exactly the opposite, our human biological hard wiring, the value of winning completely wipes out the cost of your losing. I've seen it in my own portfolio over decades.

Many of our members, you all write to me in mailbag, reconfirming confirming and reconfirming this truth. Most people don't know it, and that's breaking the rules in a single sentence. Here are a few more by high and try not to sell. That's one of my favorite sentences because it counteracts what a lot of people hear, buy low, sell high. I say, in response, buy high and try not to sell. I won't belabor that point or explain it further. I often talk to it on this podcast, Buy high and try not to sell. Here's another way to summarize Rule Breaker Investing in a single sentence. Throw good money after good. In other words, when you have extra savings, your next salary check every two weeks, when you've saved up money to invest and you want to add to an existing stock, add to the ones that have gone up, not the ones that have gone down.

Again, this is something I speak to on a regular basis, so I won't belabor the point here. But if you're trying to summarize Rule Breaker Investing in a single sentence, that's not a bad one, either. The last one I'll give is I try to find excellence, buy excellence, and add to excellence over time. I sell mediocrity that's how I invest. Now, admittedly, that's a run on sentence, but it really does summarize so much of what I've tried to put out there, not just for ten years on this podcast, but for 30 plus years through the Motley Fool. I try to find excellence, buy excellence and add to excellence over time. I hope you will, too. We sell mediocrity. That's how we invest.

Now, before I end the softball response, let me say, I decided, why not? I'll ask ChatGPT back since it's gotten to know this podcast well over the last nine years. ChatGPT, if you are summarizing Rule Breaker Investing in a single sentence, answer your own question. Here's what it said back to close question Number 2, It said, Rule Breaker Investing is about finding, investing in and holding the boldest, most innovative companies of our time guided by habits, traits, and principles that embrace disruption, defy conventional wisdom, and harness the power of optimism to build lasting wealth. That's not a bad sentence. A little bit long, but that's not a bad sentence to summarize Rule Breaker Investing, either. Thanks for the softball.

Let's move on to question Number 3. Well, question Number 3 is a curveball. I said to ChatGPT throw me a curve, surprise me. Maybe with a beautiful question or maybe you perceive that I've got a blind spot. Pointed out, it's time for a curveball. Here is its very best shot back for this week's podcast. "Are there any specific signs or changes that would make you reconsider holding even a top Rule Breaker stock that's been a long term winner?" Really appreciate that question and I guess I spoke to this a little bit earlier when we looked at some of the faker breakers, and at least one or two of those companies may come back up here, as I think to answer this curveball question about specific signs or changes that would make me reconsider holding this from somebody who says, invest for at least three years, if not three decades. The only way most of us ever get to 100 bagger, which all of us can, and I hope will is that you have to hold stocks for a long period of time. That means you have to hold stocks through some really bad periods for the companies themselves as they make inevitable missteps and or through really bad periods for the stock market itself once every ten years or so, the market usually implodes for one unpredictable reason or another. The only way you're going to get your 100 baggers is holding through all of those moments and then some.

I think it's really worth pointing that out in the first place that, of course, I celebrate an underlined holding as much as anybody I know, and yet the question is, curveball what specific signs or changes might we identify and stop holding something? When I think of one of our first great stock picks at The Motley Fool, this one put us on the cover of Fortune magazine in the summer of 1996. It was just a stock pick. It was just one pick in our portfolio, but it had been the top performing stock on NASDAQ for two consecutive years. It had a lot of hype behind it. Again, just one of our stock picks, it was called Iomega, some of you will remember older hands will remember Iomega as a company that was providing a storage solution, its Zip drive, which in an era before, well before the cloud and when hard drives themselves were expensive and just stuck inside the box of your computer, all of a sudden this zip drive was portable, which was nice, and it held a lot more megabytes than most other competing storage solutions on the market.

Iomega was on fire for lots of different reasons, and it's not like I sold it at the top. I rarely do for any of my Rule Breaker stocks. Iomega was a fine investment overall, but we definitely let it go well on its way down. Ultimately, I think what was a specific sign or change to ChatGPT's question about this company? I would say it had a single product dependence. Now, Iomega did have other products, but really it was the zip drive in a changing technology world where of course, computer storage would keep getting better and better. This small cap company was very dependent. Invested so much in that brand and that product, and it was a great product. I loved my zip drive back in the day, but it didn't really continue to evolve or innovate rapidly enough, and the world kept changing and left Iomega, not for dead, but on the roadside ailing. Iomega stock ended up being a good investment for the Motley Fool and members, but certainly not a great one unless some of us, not me, timed their way out of it at the peak.

Single product dependence is something worth scrutinizing. Another great early stock for us years ago at the Motley Fool. This was my first 100 bagger, although I don't count it anymore as 100 bagger because it didn't stay above 100 bagger return. America online. Ticker symbol AOL, AOL went up at its peak 150 times in value for me and Motley Fool fans who followed us online back in the day. Yet, of course, post that time Warner Merger in 2000 lost a lot of value and certainly did not retire from portfolios as a 100 bagger. But for AOL, it wasn't a single product dependence. I would say it was more a shift in technology and in consumer behavior and that shift, of course, was from dial up, that scratchy sound that your telephone used to make, again, for older listeners, you can hear it in your head right now, that scratchy sound your dial up phone made to connect your computer to another computer was all of a sudden replaced by a much faster, quieter broadband.

Understandably, consumers got excited about that, heavily moved the broadband direction, and AOL just did not have the positioning or ultimately the resources or focus to shift with it. I would say a second sign or change to look for as Rule Breaker investors would be when consumer behavior is clearly going to shift or in the midst of shifting, usually driven by a change in technology. Then, maybe just a third and final example I'll give here is 3D Systems. I already mentioned it, but 3D Systems ultimately fizzled. Again, a ten-bag or stock that I certainly did not exit at its peak because it turns out 3D printing was more of a niche market than I was thinking at the time. I would say the same, by the way of GoPro also mentioned earlier. Iomega, single product dependence, AOL, a shift in consumer behavior driven by technology and 3D system just not as big an idea that scaled and was adopted in the way that I was thinking/hoping back in the day. I guess what would unite all of these if you're thinking about how you and I can get better as an investor, thinking through this curveball question. It all comes down to paying attention, being aware of what's happening in the marketplace, following the businesses themselves.

Motley Fool investing has always been, we call it business focused investing. A lot of other people just look at charts or technicals. They're looking for certain buy or sell points based on a pattern of a graph on a computer these days, the complete opposite of what we do at the Fool, where we're really looking carefully at the businesses themselves, and, of course, the industries in which those businesses work and the cultural trends, technology and cultural that drive so many of the businesses. I think paying attention is always going to be rewarding and it is what we try to do on this podcast, of course, for all of our members of the Motley Fool, I commend it to you as well, paying attention to what's happening out there. It's not always easy, by the way, to figure out, even if you're paying attention, what's going to happen.

But you know what really hurts in conclusion? For this curveball question, Number 3, what really hurts is when you give up on something that ends up working. It's the opposite of what I just shared with you. Iomega, AOL, 3D Systems, GoPro, all companies that were on fire for a while didn't keep it up. But here's the opposite. A company that wasn't on fire, but that I recommended held for a long time, gave up on, and then it took off. Let me just speak to that briefly, ARM Holdings, ticker symbol, ARM, the UK based intellectual property company working within the semiconductor industry. I was checking my records recently. I first recommended it in October of 2003. The stock was at $4.75 that month. Again, this is now just over 20 years ago. It went from $4.75 up to 6 2 months later. A nice 25% bump up. All of a sudden, it's at 6 and we kept holding, 2008 and '09 happened. The market got crushed. We kept holding, and I disconsolately decided to sell ARM Holdings at $3.27 in June of 2009. In June of 2009, my seller recommendation said, and I quote "It's largely been a disappointment. I wrote dispiritedly, we're selling it now because we believe the years ahead will bring more of the same." Well, they didn't. In 2016, Soft Bank bought out the company at $22.50.

Fifty cents. As I exit my curveball answer, I'm here to remind you that as bad as it can be to have a losing stock, a 3D Systems that loses value for you. Much worse is when you sell out of a stock that goes up multiple times in value. In the case of ARM Holdings, we sold at a price that some years later it went up six times in value. If you do the math, you'll take 3-100 percenters to get a company that goes up six times in value. As painful as that may sound, the math works wildly in your favor, so I have to point that out as we close out that curveball question about when might we reconsider holding a fun question.

Speaking of fun, let's go on to Question number 4. I requested from ChatGPT a screwball. For this one, I would define that as a screwy question, one that might reverse assumptions or just be completely out there in relation to our Rule Breaker habits, traits, and principles, a screwball. Here is the question. Question number 4, "if there were one piece of traditional investing wisdom that you secretly respect, even if it feels contrary to Rule Breaker principles, what would it be?" We're tasked with coming up with some traditional wisdom that I grudgingly agree with, even though it goes against my contrarian investing principles. I think the best thing I could come up with on the fly was a recognition, first of all, this is just me to you that no single trait.

Earlier, I celebrated top dog and first mover in an important emerging industry. No single habit or trait or principle that I brand as a Rule Breaker habit or trade or principle, no single one will be right all the time. That's why I like to have six of them, six Rule Breaker habits, we've talked about over the years in this podcast. Yet, I'm here to acknowledge that no list of six is ever going to be exhaustive or air tight. I was thinking, what's a good quotation that would express this well? I wouldn't say this is exactly traditional investing wisdom, so I might be slightly off of the question being asked, but I hope this is still helpful and informative. I was reading a little bit about Alfred Korzybski. Now, this is not somebody that I previously have known about or quoted, but I will quote him with probably what is his best-known dictum in this week's podcast. But before I do, let me just point out that Korzybski was a Polish American scholar who lived 1879-1950. He developed a field called General semantics, Wikipedia lets know, which he viewed as distinct from and also more encompassing than the field of semantics. He held that general semantics is separate and bigger than semantics. He argued that human knowledge of the world is limited by two things, the human nervous system and then the languages that we have developed.

Korzybski said no one can have direct access therefore to reality, given that the most we can know is that which is filtered through our nervous system, our brains responses to reality, including the language that is all that we can use. His best known dictum, I love this one. Here it is, the map is not the territory. Connecting that back to the screwball question, what is something that I have to acknowledge grudgingly, somewhat secretly, that I respect, even though you wouldn't think I'd necessarily say this? I'm going to say no list of habits or traits or principles, and I have a list of six of each, and I've rocked them over the years, and I use them to guide myself, and I share them with you freely through this podcast and through so much of my work and my writing. No list is going to be exhaustive or airtight. Korzybski saw that.

No guide, no list, no framework can fully encapsulate the complexity of reality. In investing even well researched principles can't account for every variable. No matter how comprehensive I try to make my sets of habits or traits or principles. They simply will never replace the dynamic, we might even say often unpredictable nature of real world investing. Everything in the end is a cartoon. It's a simplified depiction of what's going on. I think cartoons can be very helpful. I think the six traits that we look for in Rule Breaker stocks, I think are incredibly helpful. I think they're very contrarian and they're very Rule Breaker, and they're very valuable, and I've used them without changing them for 25+ years now, and yet, I'd be the first to say, there's probably a seventh or an eighth, or sometimes numbers 3, 4, and 5 don't work. We should never be too wed to our frameworks because the map is not the territory. I've asked for a knuckleball to close things out this week. Now, not everybody's a baseball fan. Let me briefly explain the knuckleball. In baseball, a knuckleball is a pitch that is intentionally thrown such that the ball barely spins at all.

Normally, when you throw a ball overhand, it spins backwards away from your hand as you release it. Again, baseball fans will all know this, but not everybody even cares about baseball or knows much about it. Just picture somebody throwing a ball overhand releasing it, and the motion of it has the ball spinning backwards, but the knuckleball pitcher moves his hand in such a way that he pushes forward on the ball as he releases it. If you do it right, the ball doesn't spin at all, which means the knuckleball moves unpredictably. But sometimes highly effectively, you don't even have to throw it that fast. In fact, the few people who still throw a knuckleball professionally today don't make a point of trying to throw it 95 miles an hour. You can throw it much slower, and knuckleballs were more popular in earlier eras of baseball. But it's always so fun to watch because if a ball is thrown hard enough, let's say, 75 miles an hour, but has no spin to it, it does crazy, unpredictable things. It darts up or drops off, or curves twice, and it can be very frustrating to swing at if you're a hitter, because if you're a big strapping Major League hitter and this thing's coming in unusually slow and then makes a movement you can't predict, you can look awfully silly as you swing and miss. I intentionally wanted my final question to be a knuckleball from ChatGPT.

I interpret that, by the way, to be we're aiming here at a timeless question that doesn't move like the spin of a knuckle ball. It unlocks. It reminds us the timelessness of Rule Breaker investing. But on the other hand, it's unpredictable in terms of where we might go. Where a knuckleball question might take us. Let me close out with ChatGPT's best shot at a knuckleball question, Question number 5, and I quote, "David, Rule Breaker investing has always been about future forward thinking and seeing the long term potential. But imagine for a moment that you were suddenly limited to just one future investing principle that you could pass on to the next generation of investors only one. Which principle would it be and why?" Well, as I thought about that question, the word principle means something very specific to me. I've talked about this a little bit of this podcast.

Again, longtime listeners know these, but principles relate for me to portfolio. In my three sets of six, the first are six investor habits, six habits that you and I develop as investors. The second, which we've talked quite a bit about this podcast, traits that we're looking for in the stocks themselves, the six Rule Breaker stock traits. But when we say principles, that makes me think of the six principles of the Rule Breaker portfolio, and that one's a little subtler because a lot of us try to improve our mindset and our habits, and a lot of us are looking for certain things in stocks. But in my experience, many fewer people have much of a principle based notion of how to build and manage their own portfolio. There's a lot less coaching and thinking about portfolios, which is why I came up with my six principles. When ChatGPT knuckleballs me by saying one future investing principle that I could pass on, I'm thinking very specifically of just my six portfolio principles, only one. If there were just one, I would pick principle number 1 of the Rule Breaker portfolio, and that is, make your portfolio. Reflect your best vision for our future.

I want to briefly just light upon a few of those words as we close out Question number 5 in this week's podcast. First of all, I love the phrase your portfolio, because that's what it becomes. If you do a good job over time, it might contain index funds as well as stocks, or maybe you have a crypto portfolio, your call there. You know what I like. I like Rule Breaker stocks. That's what composes my portfolio. But each of us has your portfolio, and it's uniquely yours, and it should be. I don't think it should be picked by somebody else. I would suggest you don't just mail it in and give it all to a broker or a financial manager. You might do that with a lot of your money, but you're going to enjoy life more and make better decisions if it's your portfolio, and if I only have one principle I can pass on to the next generation of investors, or let's just say, the years '21, '24, not '20, '24, I would still be saying make your portfolio.

Then the next thing I want to say is your best vision. Reflect your best vision. I think we should recognize that the companies, the investments we put in our portfolio do, in a small but meaningful way, do in fact shape the future. What you envision as you buy a stock. This one, not that one, or you sell a stock, this one, not that one, or you buy a product or a service on your phone or in a supermarket. And you chose this one, not that one every one of us in a small but true way is influencing the future because when you buy that stock, not that one. You buy that product, not their competitors, you're propping up that thing.

You're saying you're giving it some capital, you're injecting it with some of your energy, your life's energy, and you're helping that grow. Of course, by the same token, you are not helping the other thing that you didn't buy grow. Make your portfolio reflect your best vision you should absolutely be guided by your best vision when you make money decisions, whether we're talking about your stock portfolio or the products and services you choose to purchase, they should be aligned with your vision. Now, some people would say vision is a high-minded word. I don't necessarily have a lot of vision about this or that thing. I don't want to overthink the products I buy in a supermarket or an electronic store. I'd say, I understand we can't all be intentional all the time, but the things that you do envision for your kids or your grandkids, or your society, for your church, or your culture, the things that you do envision, you absolutely should be making your portfolio reflect those things. Here's a secret. Secret is you're actually going to do better if you do that than if you don't. Too many people compromise their own principles. They don't necessarily align their money with their mind. In some cases, they may even go opposite, and I submit that not only is that dissatisfying and unfulfilling, but in most cases, they'll probably do worse with their own investment performance if they're not being guided by their own vision.

They're being guided against their vision or by somebody else's vision, so make your portfolio reflect your best vision, and then of course, the last phrase for our future. I didn't say for your future. You have a future, I do too. But if you really think bigger than that, the bigger we think in life, the bigger we become, and the smaller we think in life, the smaller we make ourselves. When you think not just about your future, but about mine and hers and theirs, when you're thinking about our future, I think that leads to the biggest you and probably the biggest outperformance for your portfolio. If I had ChatGPT taking on your knuckleball, if I had only one future investing principle that I could pass on to the next generation of investors, only one, it would be to make your portfolio reflect your best vision for our future. I think that's timeless. Well, what a delight it was to continue the ChatGPT Ask David Answers series.

I hope you had fun this week. I sure did. I think it's more fun when it got turned into baseball. We took on a hardball, a softball, a curveball, a screwball, and a knuckleball to close. If you heard something that inspires you to share it out with somebody else that isn't quite as Rule Breakery as you are, but you think might benefit from it, I hope you'll share out one or more of those pitches to a friend or family member this week. Again, next week, I'll be coming at you with gratitude 2024. In the meantime, let's keep exploring our thinking. That's why we did it this week for the purpose of improving it. Keep swinging. Fool on.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. David Gardner has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Apple, Meta Platforms, and Microsoft. The Motley Fool recommends 3d Systems, BlackBerry, and Verizon Communications and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.