June 2025 Mailbag: Top Quantitative Traits for Rule Breaker Stocks
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Rule Breaker Investing particularly celebrates the qualitative side of investing. In a quant-driven world, drawing on the right side of the brain has been my secret weapon for about 30 years. But what are the numbers, the quantitative side of things I most gravitate to?

Plus, we'll tie more back to 1999 when Amazon.com's market cap was... What was it exactly? Curious?

These things, plus a near-miss pilgrimage to Omaha, some thoughts on freedom of the financial kind, and other assorted delights. It must be your mailbag, June 2025, only on this week's Rule Breaker Investing. It's the Rule Breaker Investing podcast with Motley Fool co-founder, David Gardner. Welcome back to Rule Breaker Investing. Happy end of June 2025.

Before we start with this week's mailbag, I want to mention that next week marks one of my favorite annual traditions. It's our What You've Done to Create Financial Freedom, Volume 3 episode. So every 4th of July, we celebrate independence in the United States of America. But here on Rule Breaker Investing, we spotlight independence of the financial kind. So I want to fill the episode, as I do each year, with your victories, big or

or small, the credit card dragon you finally slew, the side hustle that now pays the mortgage, or the 529 you started for a newborn niece. Whatever moved your personal financial liberty meter

higher, even if it's just step one on a long journey. Let's honor that together next week. So shake those memory branches and let the stories fall. Email me at rbiatfool.com with a quick tale, a hard one tip, or a proud milestone. You can write three sentences or three paragraphs. You can sign it or stay anonymous. Just hit send. Tell us what you did, how it felt, and if you like, one nugget another listener could steal.

Deadline? We're going to call it this Sunday night so I can gather everything in time for next week's show. Freedom is contagious. Spread it. Our email address, rbi at fool.com. You can also tweet us on Twitter X at at RBI podcast.

Okay, let's look over the month that was for Rule Breaker Investing. June 4th, I welcome back old friend Shirzad Shamin. It was mind your positive intelligence with Shirzad Shamin, mind your PQ. It was a delight to have Shirzad back giving some chapter and verse of his work, some reminders of the eternal verities.

as well as some fresh thoughts here for 2025, AI, etc. If you didn't get a chance to hear June 4th's podcast, I highly recommend Shirzad Shamin for you. A week later, it was a fool for life. The episode speaks for itself with longtime producer Rick Engdahl. Well, it doesn't just speak for itself this week because a number of you wrote in about that. That's part of this week's mailbag. And then last week,

the Market Cap Game Show. That's right, the penultimate Wednesday of every quarter, we play our game show. Jason Moser, Lauren Hurst.

I entitled it Boring Stocks, eh? We'll talk some more about that this episode too. Now, as I shared at the start of the year, my 2025 book, Rule Breaker Investing, is available for pre-order now. After 30 years of stock picking, this is my magnum opus, a lifetime of lessons distilled into one definitive guide. And each week until the book launches on September 16th, I've been kicking off this podcast with a random excerpt. We're just going to break open the book,

to a random page, and I read a few sentences, so let's do it. Here's this week's Page Breaker preview, three sentences from chapter 12 of the book, which, by the way, might be the rule-breakeriest chapter of them all. And I quote...

I see this most clearly and feel this most acutely because I've literally watched the company I co-founded grow over the past 30 years from a paper newsletter to a billion-dollar enterprise. Instead of only researching other people's companies, I've had the privilege and heartbreak and glory of watching a tiny, foolish acorn grow to an oak. I would never ignore or underrate Brand.com.

leadership, culture, and innovation. End quote. That's this week's Page Breaker preview.

And I've started to get endorsements for the book to go on the cover jacket. So let me share for the fun of it the very first. This comes from John Mackey, the founder of Whole Foods Market, the former CEO of Whole Foods Market. John read my book in full a month ago. This whole thing won't fit on the book jacket, but part of it will. Here's the whole thing. David Gardner has written one of the very best books on investing that I have ever read. I've been following David's investing wisdom for the past 12 years, and it's greatly increased my personal net worth.

I believe anyone who follows the simple habits and principles that David discusses in his book is sure to become a very successful investor and quite wealthy over time as compounding works its magic. Rule Breaker Investing is sure to become an investing classic comparable to The Intelligent Investor

one up on Wall Street, and stocks for the long run, end quote. Thank you, John Mackey. To pre-order my final word on stock picking shaped by three decades of market crushing success, just type Rule Breaker Investing at amazon.com, barnesandnoble.com, or wherever you shop for fine books. All right, let's go out to Twitter X for some hot takes this month. First one up, Brett Avery, at AveryBrettLaugh.com.

Brett simply tweeted, every word this guy said makes sense.

And he's referring to Rick Engdahl and A Fool for Life, the wonderful episode of Rick reflecting on his 10 years of being my constant producer for this podcast. And even more than that, more than a decade plus before that, as a longtime Motley Fool employee, Rick, in that memorable episode, shared a lot of his lessons. In fact, he gave 10 lessons that he's learned about investing business and life.

And Brett Avery, thank you for your words. Every word this guy said makes sense. Another reflection on that episode from Twitter. This one comes from at 307 fool, my friend, longtime fool, Matt hard. Matt wrote amazing episode interview and career for the great Rick Engdahl, who's at our Engdahl on Twitter.

The podcast won't be the same without you, but will be forever changed because of your talent. Phenomenal investing advice in this episode to one of my favorite episodes Matt wrote so far this year. Thank you, Matt. I love that episode and I'm glad you did too.

A few more takes on last week's Market Cap Game Show. This one from Andrew Gibson at AndrewGibbs53446 on Twitter. Great podcast this week, referring to the Market Cap Game Show. Boring stocks, Andrew writes. Favorites mentioned were Trex and Waste Management. Both exceptional leaders. Andrew went on, I remember Rick Munari's recommending Trex and Rule Breakers in 2012.

Nice 17 bagger. Close score and a very fun market cap game show. Fool on. Fool on yourself, Andrew. Thank you. And you'll be back a little bit later this episode with a great question I'll be addressing in point number two. Couple more here. Frank at 129 Green Meadow just said, great to hear Lauren has also been a great addition to the morning show. Frank's referring to Lauren Hurst.

who won last week's Market Cap Game Show. We'll see Lauren for the final four next March for March Market Cap Madness. But thanks for calling out Lauren's efforts on our Motley Fool Morning Show, Frank. Yeah, Lauren's there, I think, one morning steadily.

each week, and he's a delight to listen to and learn from. You know, the Motley Fool Morning Show is a great way to start anybody's market day. If you are a member, just go to Fool24. That's basically the television channel on our website. And 9 a.m. to 10 a.m. each morning as the market kicks off, we have some of our best fools for our morning show, Lauren being one of them. Last hot take, this one from Vince Grignere at Prerevince.com.

Another blind squirrel result for me, Vince writes in the Market Cap Game Show, as I handily outdistanced Lauren and J-Mo 8 to 6 to 4. Good on you, Vince. I encourage people to brag about their Market Cap Game Shows on social media. Not only is it fun to score high and celebrate that, but it also creates more awareness of our game show. And I think more people looking at more market caps equals a better world for

for all of us, investors included. Thank you all once again for a fun month of tweets on TwitterX. Let's get started. Five mailbag items this episode. Mailbag item number one. This one comes from Kevin McMahon. Hi, David. I hope all's well.

I'm so happy for Rick and his achievement of financial independence. It reminded me of a current coworker who shared that her financial advisor told her she could retire immediately if she wanted to. Kevin goes on, I could see the weight lift off her shoulders. Such a powerful moment.

I was wondering, could we coin a new term together, something like financial independence birthday? Just a fun idea. Maybe others could write in and try to, as you might say, top it. On another note, I remember from your December 2024 Besties episode that you, Andy Cross, and Bill Mann were planning a trip to see Warren Buffett.

In light of his recent decision to step down as Berkshire's CEO, I was wondering, Kevin McMahon asks, if that trip ever happened.

I'd considered making the trip myself, suspecting that a big change might be coming, but unfortunately didn't end up going. P.S. I think I've heard three or four different versions of your classic 3-2-1-go over the course of 520-ish episodes. Still pretty impressive. On the flip side, Kevin concludes, I'll admit one small pet peeve

I never quite loved the broken glass sound effect, but I'll get over it. Fool on Kevin McMahon. Well, Kevin, thank you for this lovely note. And yeah, first of all, the three, two ones. I was glad that Rick called that out for anybody who doesn't know what I'm talking about. This is inside baseball. You'll have to go back and listen to my conversation with Rick to understand what we're talking about. But for many longtime listeners and Kevin, if you have indeed listened to all 520 ish

episodes you've heard once or twice or maybe eight times that Rick maybe omitted and edit here or there. And you hear me actually go three, two, one, go, reprompting myself, not intending that to be on the air, but occasionally it does creep in. Now, no doubt my new wonderful producer, Bart Shannon, will never once allow that to happen again.

ever. The second thing I want to say in answer to your note, Kevin, is what happened with the whole Berkshire road trip. So I'm going to call this the Peacock show that wasn't. And for listeners who are confused by that title, let me share just a portion of the transcript from our December 2024 besties show in which Andy Cross said, a thing I'm really interested in, David, is Bill Mann and I were talking about

Berkshire Hathaway earlier. I'm a shareholder, have been for many years. I've never been able to go to the Berkshire Hathaway annual meeting ever in my life. And Warren now, Mr. Buffett, and he said is approaching 94, I think, maybe around that. And I hope to make it out to Omaha this year for that. And I hope he does as well. And then Bill Mann says on that podcast, let's do it.

And Andy Cross says something like, yeah, let's make it happen this year. And then I said, love it. Road trip with Andy and Bill. I'm signed up. It's going to stream. Probably not Netflix, guys, but Peacock. Maybe like season one. I would like to do a cameo in your streaming show. Andy said, I got it. I went on. But road trip with Andy and Bill to see Warren. I mean, that's a fun documentary that I would help fund.

Andy concluded, wonderful, we might need funding for that. And Bill said, David, we'll talk after.

Well, Kevin, you might be wondering what happened to our Peacock streaming show. I checked with Andy this afternoon just before the podcast, and he said, I unfortunately could not go even though I wanted to. I had a family obligation, so I had to catch the whole thing on CNBC. I then checked in with Bill Mann, who a minute later said, I wasn't able to go as it coincided with a family commitment. Now decidedly disappointed that I didn't. Well, you can imagine that without Andy or Bill deciding to go, I

I never funded this documentary and none of it ever happened. And now it never will happen, which I guess, Kevin, is a reminder to all of us to seize the day or follow through on what you commit to. Although I will say in my defense and Andy's and Bill's, we didn't actually commit. I think we were hoping, but sometimes friends hope

is not enough. The last thing I wanted to say in reaction to your note, Kevin, is you mentioned the idea of a financial independence birthday. Well, that's the kind of thing I'm looking to talk about next week on next week's show. I've already mentioned next week is what you've done to create financial freedom. And I am a big fan of creating your own holiday and naming them. So Kevin, maybe you want to give me a little bit more on that topic

But for anybody else, sometimes I think people don't realize they're making moves toward financial freedom without consciously framing it up that way. But let me give a quick laundry list of examples. If you've paid off the last student loan or your credit card balance, if you've set up automatic transfers to an index fund or a 401k match, if you negotiated a raise or switched jobs for better pay or culture,

If you launched a cash-flowing side hustle or small business, maybe taught the kids money basics with a family bank or first stock purchase. Maybe you helped a parent or friend open their very first brokerage account or built your own six-month emergency fund, sleeping better already. Maybe you donated time or money to boost someone else's financial literacy. Or maybe you just decluttered your life, sold some unused stuff,

invested the proceeds. Every one of these achievements is worthy of celebration. And I obviously could come up with more, but beyond a bulleted list,

What makes next week's episode special is it's not from me, it's you. It's what you've done, your story. That's what powers next week's episode. Yeah, perhaps there one day will be a financial independence birthday that people can begin to celebrate once we frame it up that way. That kind of story comes out in next week's episode and I'm looking forward to it. Write us.

at rbi, at fool.com. Need to hear from you by Sunday night. All right, on to mailbag item number two. I mentioned earlier that at Andrew Gibbs, 53, 446, dropped a good hot take from Twitter. He also dropped another great question via Twitter that I'm going to use as mailbag item number two. Andrew wrote, David, I know you look favorably toward qualitative traits when stock picking, but if you were to pick your top five

quantitative traits of a great company, where would you start? Free cashflow growth, market cap? I'm curious. Fool on.

Well, Andrew, thanks for a great question. And I think if I made a short list, let me see, here are five-ish items that count for me a lot when I'm looking at the quantitative. And obviously, everybody should be looking at the income statement, the balance sheet, and the statement of cash flows for companies that we're serious about, that we'd be buying stock in. Not everybody is coached in this, not everybody is well-versed. There are great books written even for English majors like me, maybe you too. I'm thinking of

John Tracy's classic, How to Read a Financial Report. There are lots of great ways free online, you can use AI these days to get more up to speed understanding how to read the numbers of investing. And I think that's very important. I'm a numerical person who loves baseball stats. I got more and more interested in investing once I got more and more interested in Saber Metrics and Bill James'

and money balls. So I'm somebody who does love numbers, even though I like to play up and it's true that I was an English major, but

But I really do think much of our advantage comes from the qualitative right side of the brain things. But Andrew, you asked about the quantitative. So let's talk about five things I care about when we're talking about the numbers of investing. And the first one is, yeah, market cap. You mentioned it in your note. We've built an entire game show around it. I think that was the 36th or 37th

consecutive quarterly game show for the market cap game show last week. And yeah, the market capitalization, understanding the size, how much is a company worth? Not just its price per share, what you see quoted when you go to buy the stock, but the actual market cap is really important to understand that. And to imagine, let's say it's $10 billion.

to imagine how high you think that could go over 20 or 30 years. A little bit later in the show, we're going to talk about Amazon's market cap in 1999. But not every company is like Amazon. Not everything grows to the moon, but we want everything to grow. And knowing your company's market cap and thinking about the capacity, could this go up five times in value? Could this go up 20 times in value over the next five to 10 years?

Smaller market caps, it's easier to see them multiplying than if you're buying a company that already has a trillion dollar market cap today, although there can be great reasons to buy mega cap companies. So market cap, Andrew, has to be on my short list of quantitatives to know. The second is sales growth. I think that's really important. Top line growth on the income statement. We're looking for companies that are doing great things in this world that are growing.

And the surest sign of that is generally the growth rate of sales or revenues, as some people say. Obviously, this is all needs to be taken in context. For example, companies could sell a dollar for a penny. They'd sell a lot of dollars and they'd lose a ton of money selling every dollar for a penny. So companies can inflate their sales significantly.

through pricing tactics, things that might not be sustainable. Nevertheless, if we're looking at real companies, real rule breaker prospects that are top dogs and first movers in important emerging industries, then yeah, I think looking at and knowing the sales growth rate is really helpful and important. And inevitably, it's going to slow down over time. If a company is experiencing triple digit sales growth rate, of course, you won't see 100% sales growth

ad infinitum into the future, you should expect that to slow down as the company gets bigger. And yet a high sales growth rate often explains many of our best Rule Breaker winners. A third number I would pay attention to, I do pay attention to, this only works for companies that have profits, but it's just the net profit margin.

It's basically the pennies on every dollar of sales that a company makes in profit. So for example, if a company has 7% net margins, that means 7 cents of every dollar

is profitable for that company. Every dollar of sales, that's much better than if it were two cents of every dollar of sales becoming profitable. It's a very simple ratio. Most of the numbers I use in investing are very simple ratios. I don't think it's necessary to get into higher math to be very successful as a rule breaker investor. And so the simple ratio, the bottom line of profits divided by the top line of sales gives you that net profit margin. And my

My benchmark, what I've always liked to see is double digits. I love to find companies that make 10 cents or more, sometimes upwards of 20 cents in profits on every dollar of sales. So there's an important number that I look at. Of course, if a company doesn't have profit, then that's not an important number at that stage for that company.

A fourth number, I would say a couple of numbers that I like to know both of these off the balance sheet. I like to know how much cash a company has in the bank and how much debt that company has. And ideally, most of our great rule breakers and most of my favorite companies have a lot of cash and they're adding more every quarter, every year, and they have no debt, little to no debt. Of course, debt can be used as an instrument. It can be

functional and can be helpful. But for many of our rule breaker companies, they don't have a lot of debt. They're not looking to take much more on and they have a lot of cash. Of course, earlier stage, they're not going to have as much cash. Over the course of years, they'll build up that cash treasure trove. I love to find a war chest of cash because especially in a changing world, when all of a sudden the internet shows up and disrupts all of American business or

AI shows up and disrupts so much of technology and business globally today. It's very helpful for companies that we're invested in to have a lot of cash so they can afford to burn it for a while in order to evolve and transition to what the new technology demands of the day are, whether it's what customers are asking for or new technology possibilities like discoveries in genomics or

or flying cars. Whatever it is, as new technology hits, it's awfully helpful for our companies to have a lot of cash to be able to spend, to grow, and to evolve into their new butterfly. And by the way, if a company doesn't have profit, if it's burning cash, it's awfully helpful to know the burn rate, how much

Money is a company consuming from one quarter, one year to the next. And knowing that as a percentage of how much cash it has in the bank, burn rate is a very helpful number as well. If you went on a road trip and you didn't stop for a Big Mac or drop a crispy fry between the car seats or use your McDonald's bag as a placemat, then that wasn't a road trip. It was just a really long drive. But participating McDonald's.

I don't know if I've hit five yet, but I'll throw in one more. And that is risk ratings. This is a homebrew number that I've built up over time. It's my risk rating 25 point system. I've talked about it on this podcast here and there over the years. I try to return to it every year or two. I see the most recent time we talked about this was the episode calculating risk foolishly, volume three, where we looked at two companies, Kinsale versus Chewy.

And that was January 24th of last year, 1-24-24 for anybody who'd like to go back and listen, where two talented analysts take us through the 25 point risk rating system that I developed. It is a

quantitative system, you end up with a number that you can put on the risk for any stock you're looking at. So this is obviously homebrew for me, but that is a number I care a lot about. And the questions that you answer yes and no to, it's just a simple binary yes or no for each of the 25 questions asked of you. You provide an answer yes or no. If it's no,

That's bad. That's plus one. The higher the score, the higher the risk. And generally, we try to buy lower risk companies with high returns as opposed to the opposite, high risk companies with low returns. A lot of people think that return is directly correlated with risk. I disagree. This is the rule breaker in me. I think there are examples out there in the markets of low risk companies

with high returns. And there are a lot of high risk companies with low returns out there. So I don't believe that risk always correlates with return. And that's one of the lessons you get from calculating risk foolishly. Andrew and Fools at Large, I hope that was a helpful list of numbers I do care about. And I do look over quarterly earnings reports and the financial statements of companies I'm researching or I'm deeply invested in.

All right, on to Rule Breaker Mailbag item number three, this one from Sam. Thanks, Sam. He says, David, I really enjoyed the tribute to what Rick Engdahl has learned. It could have been a birthday show by itself, Sam writes. I thought Rick did a great job reviewing the concepts and teachings that the podcast has covered. Maybe because I'm older...

But Sam writes, it occurred to me that the only concept Rick didn't touch on was the death over dinner lesson. A great show. Fool on, Sam. Well, I'm glad you mentioned that, Sam. We didn't have time probably to cover every lesson, but that was one of my favorite episodes of 2022. It was definitely a bestie for this podcast for 2022. And for anybody who'd like to go back and listen, first of all, I'm going to just give

a short summary of what we did with Let's Talk About Death Over Dinner with author Michael Hebb, who wrote a book by that title. Because I think just the summary points on their own can be really helpful for listeners. That said, I think the podcast is much better than this summary. So if you want to go back and listen, dear listener, April 13th, 2022, Let's Talk About Death Over Dinner.

with Michael Hebb. So a few points I want to call out because yeah, that death, that's what we're talking about, death. And one of Michael's points is people don't talk about death enough in our society. I'm sure that's true of me. It's probably true, not of everybody listening to me, but probably a lot of us. Michael argues that just talking openly about death, preferably in a comfortable communal setting like the dinner table, reduces fear,

deepens relationships, and clarifies values. So when your loved ones, for example, know your wishes,

End-of-life decisions and the grieving process become less stressful for all. So that's summary point number one I want to make, normalizing the conversation about death. And of course, Michael frames it all about having a dinner party. And that's a lot of the premise of his book. Let me summarize point number two, which is that his format basically offers prompts. So, you know, what's a favorite memory?

that you have just as an easy prompt for everyone around the table. And then what would be a desired legacy or what are your medical wishes? If that's appropriate for the table of guests, you're looking for prompts that guide guests starting with lighter reflections. And then you get to more candid topics as the supper goes on. And I was highlighting how the structure lets participants basically share at their own pace while still surfacing the practical steps. If you want to go there,

Things like advanced directives or estate plans or final wish documents. Too many families often postpone those. So again, a structured but personal framework. A third summary point from that podcast is about investors. People like you and me, we were linking death planning, not just to wellness, but to financial wellness because, oh my golly, unspoken wishes are

Translated into costly legal disputes in many cases, sometimes medical interventions that run counter to someone's values. So having clear conversations now when we're all feeling pretty healthy and we're enjoying a glass of wine over supper, protect your emotional and financial capital later. And that aligns so well with, I think, The Motley Fool's long-term plan.

plan ahead ethos. So Sam, as you're calling out that book and that podcast in your note to me on the podcast this week, I think you're thinking about that plan ahead ethos. And especially because this is a podcast for investors, we can see the incredible benefit of planning these things out and talking them out ahead of time and the incredible detriment of not doing so to many families' financial wellness.

Maybe I'll summarize one more point, and that is Michael and I on the podcast were reframing legacy from something considered only at the end of life to instead something that's an everyday practice. So like you're spending, aligning your spending today and you're investing in your charitable giving with that impact that you hope one day to leave.

So, reframing legacy from something considered only at the end of someone's life to an everyday practice. You know, Michael is urging listeners to view money not just as a nest egg, but as a tool for meaning. And that, of course, so overlaps with what we've always said at The Motley Fool and what I strongly advocate through Conscious Capitalism and, of course, through Rule Breaker Investing.

Before we move on to Rule Breaker Mailbag item number four, I'll just mention if anybody is interested but is not going to find that podcast or is going to skip it and you don't even want to read Michael's book, which by the way, you should. Let's Talk About Death Over Dinner is a fabulous read. But here are some starter tips. If you're starting to think about having a conversation like this, I'll give you four, A, B, C, and D, A, choose a relaxed setting.

Over dinner, a great idea. Favorite foods, no tech distractions, no phones at that table. That's A. B, starter tip B, invite participants to bring a meaningful object or story tied to mortality. It could be a photo, a song, a eulogy excerpt. Those are all examples. Have people each bring something meaningful to them to the table.

Starter tip C, begin with universal questions. What songs should play at your memorial would be a good example of one before diving into things like medical directives and wills if you want to go there for your death over dinner. And then starter tip D, and this one is not to be forgotten, schedule a follow-up date.

Because one dinner rarely covers everything. If you follow these tips and really, if you listen to that podcast or read Michael's book, you'll get a lot more than that. But I really do believe in the year ahead.

If you're listening to me thinking, you know, I should get on top of that, I really do hope that you will. You'll make a point of it because your future self and all those tied to you will thank you so much for taking the time here in 2025 to have that conversation, maybe have that death over dinner. So in short, that episode championed death dialogue as an essential, even uplifting ingredient of a well-lived and well-planned life

tying emotional clarity to sound financial stewardship, Rule Breaker style. Thank you again to Michael Hebb for joining with me three years ago. By the way, the very next week on the podcast, you can listen to this one too. We did

A Death Over Dinner. Michael hosted and the voices of me, my wife, and some of my good friends, we simulated. It wasn't a simulation. It was for real. We did A Death Over Dinner as a podcast, which was a special one on April 20th of 2022. So again, I'm quite sure some of you are freaked out at this point because you don't want to talk about or think about death at all, but I sure hope a bunch of others have had our eyes a little bit more open to the benefits of these conversations.

All right, let's go on to Rule Breaker Mailbag item number four. This one from Justin Harrison. Justin, thanks for the note. Hi, David. Just wanted to drop a quick note to say how much I appreciate your relentless positivity, especially after our recent exchange on X, your take on choosing optimism around AI.

really resonates with me. It's refreshing to hear that even in a fast-changing world, we get to decide the lens through which we see the future. That kind of mindset, Justin writes, is exactly why I keep coming back to The Motley Fool. Speaking of coming back, I had a bit of a foolish thought inspired by some April Fool's fun from your company.

In case you forgot, Justin writes, and I did not. Some of you will have seen our April Fool's joke this year. Others will be hearing about it for the first time. In case you forgot, Justin writes, there was supposedly a chance for Motley Fool members to earn early access to

to the White Lotus properties and investments. Thinking of HBO's popular show, White Lotus, and our big April Fool's joke, and it was just a joke, was that we had arranged privately to work with the founders, producers, and money people behind White Lotus to begin to enable our members to get invested in the show for reals. Of course, it wasn't for reals at all. Anyway, Justin goes on saying, I'm still half wishing that was real, L-O-L.

It got me wondering, though, if there's ever been a conversation about giving longtime Motley Fool members, say those who've been in the community for five years or more, an opportunity to invest directly in the Motley Fool. Would that be too small F foolish or just perfectly capital F foolish? Justin writes, I know it's a part of what would represent my best version of

of the future. Also, I can't say enough how much I enjoy the Market Cap Game Show. I'd love to toss my hat in the ring as a halftime sideline reporter, Southern twang and all. Maybe you've got your own Howard Cosell or Ernie Johnson in mind. Either way, count me in as a fan. Thanks for all the good vibes and wisdom you share. Looking forward to whatever comes next on my Saturday morning runs. All the best, Justin Harrison. Well, happy Saturday morning, Justin. Sounds like you listen to the podcast

running on Saturday mornings, and I'm very pleased to feature you here on mailbag item number four. Well, speaking specifically, Justin, to the idea of whether you as a longtime Fool member, whether longtime listeners, longtime Fools could become part owners of Motley Fool stock, this is something we have looked at in the past, but as it turns out, it's just not easy to do. It's generally not something we're probably going to do, even though

Hey, I'd kind of love it. I'd love to have, we're not a public company, but I'd love to have people who love our company to be able to own some shares. Of course, the best way to do that is to come work for our company because each of our employees gets some Motley Fool shares. We are a part employee owned company. In fact, I think that's a great answer for the future for many companies, especially private companies to share some of their ownership with their employees. I think that's a great way to keep employees around and build a lot of loyalty. I'll also say

because we're not planning on going public anytime soon, you probably need to have some market, some way for private shareholders to cash their shares in. We do have something like that at The Motley Fool, but it's just for our employees. Justin, here's what it comes down to. I think it's Exchange Act Rule 12G, but anybody can call me on this. I'm not a lawyer and I don't play one on TV, but United States companies, if

if they have a certain number of shareholders, I think it might be 2000 shareholders of record or fewer, 500 non-accredited shareholders. That would be people who don't have a high net worth who are therefore non-accredited. So average Joe's like a lot of us, just 500 of those. If you have those and then $10 million or more in assets as a company, which we certainly do,

All of a sudden, you're registering with the Securities and Exchange Commission, the SEC, and you're doing filing of reports, et cetera. You're like a public company. In fact,

I think you become forced to become a public company with a certain number of shareholders. So if we opened up the gates and said, hey, yeah, anybody who's a member, even somebody who's been with us, let's say 10 years or more, I unfortunately think we would quickly have to become a public company as a consequence. So I think the bad news is, and I'm sorry to share it, that's probably not going to happen anytime soon. We've looked into it and it doesn't look reasonable enough for us. Of course, circumstances and times may change. So

So who knows? But I do want to suggest this, and I hope you already get this, Justin, but I think the best way for capital F fools, anybody listening to me who's a fan of our company, to own the fool is paradoxically maybe the way you already do. Because if you're applying our advice, if you're listening weekly to Rule Breaker Investing, if you're fired up about my September 16th book launch, if you're compounding your own wealth,

You are sharing our mission. So members have invested well and told their stories and made our brand become stronger and helped other people discover investing. And that virtuous cycle is a return we all share, even without a ticker symbol. So again, thanks for a really nice note, Justin. Maybe not a fully satisfying answer, but I hope...

I hope it's clear. And just remember, if you as a fellow Rule Breaker are investing alongside me, you're doing what many a happy fool has done through good times and through sometimes bad times as well. So thanks again for the note. Let's move on to the final Rule Breaker mailbag item this month. It is number five from my longtime friend and one of my favorite fools, Eric Eason. Hi, David. Eric writes, I recently ran across this first page of

of The Fool's 27 August 1999 weekly newsletter when the fledgling Amazon had a mere $19 billion market cap. I thought it might amuse you as well as amuse and educate our fellow listeners. Cheers, Eric Eason.

And Eric takes just a snippet of an article that was written by Jeff Fisher, longtime fool and great lifelong friend of mine. I just had supper with Jeff a few nights ago here in Washington, D.C. Anyway, Jeff wrote this headline in August of 1999. It was entitled, Will Walmart Kill Amazon? by Jeff Fisher. I'll just read the first 10 or 12 sentences of this. That's what Eric excerpts.

And I quote, Merrill Lynch analyst Henry Blodgett boosted Amazon last week with positive comments regarding year-end results and long-term potential. However, many investors have difficulty with the notion that Amazon will create value for shareholders given its current market cap of above $19 billion. The original argument, Jeff writes, was that Barnes & Noble would kill Amazon.

BNN was valued at $2 billion. Amazon should never be valued above that. This silly comparison is less valid now than ever. The new argument is that Walmart will kill Amazon. This argument, as with the old comparison to BNN, is rarely presented with more detail. Instead, the argument is usually summarized in the following way.

Walmart will kill Amazon. Get out now. You'll thank me later. When people do take the time to post a thought-out missive, Jeff concluded, the Amazon bears most frequently cite Walmart's vast distribution capacity as a serious asset in Walmart's treasure chest. Humorously, while some investors compliment Walmart for its many warehouses from one side of their mouths...

From the other side of their mouths, they criticize Amazon for building warehouses. Jeff ended that piece by writing, hmm, with a lot of Ms.

The past counts a lot for me, and I think for any serious investor, and certainly for this podcast, it can seem as if we're not even speaking to the times if we're back in our 1999 chairs with our mouse pads and whatever was passing for a smartphone years before the iPhone came out. It can seem as if, why are we even talking about Amazon in 1999? And yet,

It's so educational, so very important to understand a story like Amazon's in 1999. Today, Amazon's market cap, check it, is about $2.3 trillion. So that scary high $19 billion price tag from 1999 is less than 1%.

of its current size. It's a perfect reminder that the best stories out there, the best Rule Breaker stories almost always look expensive before they look obvious. That's such a cardinal point for Rule Breaker investing. And it takes Eric Eason bringing back a Jeff Fisher piece from 1999 to give me a great note to end this week's podcast on investing.

Amazon is up more than a hundred times in value from that scary high, crazy overpriced $19 billion price tag just after it was going to be killed by Barnes and Noble and was soon to be killed by Walmart, right?

As long as I'm just ranting briefly at the end of this week's podcast, I might as well continue to praise Jeff for poking some fun at the moving target of those would-be killers. First, Barnes & Noble, definitely going to bury Amazon, then whoops, make room for Walmart. So that pattern is timeless.

And it's really worth paying attention to if you're a Rule Breaker investor, because there's almost always a dark cloud that you're going to need to see through. And a lot of times you're being told that your little Rule Breaker, your upstart is going to be crushed by the status quo. Or as sometimes I've said it, and Malcolm Gladwell titled the book this,

How David Beats Goliath. David did beat Goliath in the Old Testament, and I've seen David beat Goliath any number of times when we've invested in rule-breaker startups like Amazon.com. Being told Goliath's going to crush it, I'm sure that scared some weak hands out,

but not me, not when I think I have the top dog and first mover in an important emerging industry with a sustainable competitive advantage, with stellar past price appreciation, with good management and smart backing, with strong consumer appeal. And yeah, everyone's calling it overvalued. Those are the traits we look for in Rule Breakers stock. So

That pattern is timeless. A disruptor gains subtraction. Skeptics simply swap in the next bigger incumbent as the inevitable executioner. And yeah, sometimes they're right. Not every one of our stocks, not every one of our oaks grows to the moon. But it only takes a few of these to do so to give you market beating returns the rest of your life, even with a lot of losers in your portfolio, as I do have here.

And the last thing I guess I'd like to praise Jeff for is mentioning how critics are applauding Walmart's vast distribution network while simultaneously blasting Amazon for building a vast distribution network. So there's a delicious bit of flip-flop logic there. It shows how easy it is to cheer the old playbook and misread the new one. People typically in sports cheer on the underdog, but I've found often market observers, especially

Market journalists and often Wall Street will look askance at upstart companies as they come out. And again, not everyone works out. I've certainly not done well with my Peloton pick, for example. And

TiVo didn't exactly win the world, but it only takes one 100-plus bagger like Amazon to wipe out every bad mistake you've ever made. And for Motley Fool Services, I picked seven 100-plus baggers and counting. Anyway, thank you, Eric Eason, for a walk down memory lane. And thank you, Jeff Fisher, for all your wonderful work over the years at The Motley Fool. It was a pleasure to share 1999 here at the end of June 2025. Next week,

I think you know what next week's all about. It's about what you've done to create financial freedom. Love to hear from you. Sunday night deadline, rbiatfool.com, the email address. You can tweet us at rbipodcast on Twitter. In the meantime, stay cool out there. Fool on. As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.

Learn more about Rule Breaker Investing at rbi.fool.com.