Forget "buy low, sell high." David Gardner, co‑founder of The Motley Fool, told Brian Richards on a Sept. 28, 2025 podcast that conventional maxims often push investors to sell instead of hold. He outlined three core Rule Breaker principles: focus on companies that can change industries, add to winners rather than rescuing losers, and treat portfolio construction as a disciplined process.

Three core Rule Breaker principles

  • Break conventional wisdom: Rather than treating "buy low, sell high" as a literal guideline, Gardner looks for companies redefining their industries and plans to hold them through long-term growth.
  • Add to winners, don't double down on losers: The Rule Breaker approach increases exposure to firms showing clear customer adoption, revenue growth, and margin expansion, instead of using new capital to lower the cost basis of failing positions.
  • Treat portfolio construction as a discipline: Picking stocks and sizing positions follow the same checklist—investors should decide conviction levels and deploy fresh capital behind the strongest ideas.

Breaking the old rules

Gardner has built his investment career by questioning simple-sounding advice. He told Brian Richards that "buy low, sell high" can push investors into selling when they should be holding. His preferred framing is to identify companies changing their industries, buy stakes, and hold through years of growth.

Buy high and add up — don't double down

One central habit is "add up, don't double down." Rather than rescuing losers, Rule Breakers add to winners — companies that are gaining customers, growing revenue and improving margins. That puts new capital behind proven momentum instead of trying to recover a faltering bet.

Portfolio construction matters as much as stock selection

Gardner treats portfolio construction as a core discipline. The Rule Breaker service pairs strict criteria for individual stocks with rules about position sizing and when to add. The approach forces investors to quantify conviction and tilt toward a handful of names that can compound over years.

Why "overvalued" can be a feature, not a bug

Rule Breaker investors accept that Wall Street will sometimes call their best ideas "overvalued." Gardner argues conventional valuation metrics can miss intangibles — network effects, brand strength and rapid scalability — that drive future earnings. He doesn't dismiss valuation entirely but emphasizes qualitative drivers alongside multiples.

Gardner presents this framework in his book Rule Breaker Investing: How to Pick the Best Stocks of the Future and Build Lasting Wealth and in interviews and podcasts with The Motley Fool team.

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"I truly believe if there's a one-to-one between what's in your portfolio and what your hopes are for the world, not only will that feel much better, but you're going to do much better," said David Gardner, co‑founder of The Motley Fool.

This article was created with AI assistance.