Rule Breaker Investing
Off the back of 100 Baggers, Rule Breaker Investing by David Gardner popped up in my Audible recommendations. I’ve never really developed the habit of regularly checking The Motley Fool or listening to its podcasts, but I decided to give this a try anyway as sometimes the medium makes all the difference. I’m glad I did. This is an excellent addition to any investor’s library and a very natural follow-on from 100 Baggers.
The emphasis on long-term investing is front and centre again here, arguably even more so than in Mayer’s work. Gardner references a number of extraordinary winners he’s held for many years, across multiple market cycles, allowing compounding to do what it does best. The long-term mindset runs consistently throughout the book.
Much of what’s covered isn’t revolutionary, in fact as you read it will likely feel intuitive but it does directly challenge a lot of the ‘trading’ advice that circulates elsewhere. Early on, Gardner draws a clear distinction between trading and investing, something I particularly appreciated. Lately, I’ve heard plenty of ‘long-term’ investors talk about trimming positions after six months to ‘take profits.’ Regardless of gains, it’s hard to reconcile that with any meaningful definition of long-term investing. This book reinforces the idea that wealth creation through investing tends to happen over years, not quarters.
Gardner also leans into several other principles that are counter to some of the mainstream guidance such as letting winners run, adding to positions that are working rather than trimming them prematurely, and being cautious about chasing losers simply because they’ve dipped. Too often, advice encourages people to sell their best performers early or average down indiscriminately, both of which frequently lead to regret. Buying dips can make sense, but generally when you already understand the business and believe in the long-term thesis, not simply because the price has fallen.
Lest I digress too far and drift into an investing essay, I’ll bring it back to the book itself. It’s witty, engaging, and easy to listen to, reinforcing sound investing principles without becoming dry or overly technical. This is a ‘strong buy’ recommendation from me.
Who’s it for?
If you’re a new or seasoned investor, this book is well worth your time if you haven’t already read it. For newer investors, it helps establish a solid mental framework early on. For more experienced ones, it serves as a reminder of principles that market noise and hype can easily erode. Anyone early or mid-career would benefit from guidance like this as sooner or later, we all have to think about how to turn our hard-earned income into long-term financial security.