In this episode of Motley Fool Rule Breaker Investing, Motley Fool co-founder David Gardner and Motley Fool analyst Karl Thiel revisit the original investment theses for five stocks selected in the anxious days following Brexit, scoring all five stocks against the market, and ask what a 10-year scorecard can teach that three years never could.
To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. When you’re ready to invest, check out this top 10 list of stocks to buy.
A full transcript is below.
This podcast was recorded on July 16, 2026.
David Gardner: Ten years ago this week, July 13, 2016, the world was still reeling from Brexit. The United Kingdom had voted to leave the European Union. Markets had lurched, commentators were forecasting doom, and nobody really knew what would come next. A week or two earlier, I tweeted a line that captured what I was thinking, and I quote, we make fearful the things we don't understand. Well, when the future is unclear, it's human nature to imagine the worst fear rushes in to fill the vacuum where certainty used to live. Rather than spend a podcast predicting politics or debating whether Brexit would prove good or bad, I asked what felt to me like the more Foolish question: Given this new world, where are the opportunities? I built a five-stock sampler, not as a wager on Brexit itself, but as a hopeful response to uncertainty because when the world changes, Rule Breakers don't simply ask what might go wrong. We ask what might go wonderfully right. Well, it's now 10 years later. How did those five stocks do, and what can we learn from them? What might they still teach us today? Ten years later, five Brexit-inspired stocks, only on this week's Rule Breaker Investing.
Thirty times on this show every 10 weeks from 2015-2021, I picked a five-stock sampler, 30 times where I said, Here's a theme, and here's a five-stock basket. Let's go beat the market and learn some great lessons together. For each of them, we revisited them a year later and two years later, and generally closed it down after three years, because if we kept reviewing all of these all the time, there wouldn't be much else on this podcast to do. I shut the game off after three years. But each time I said, as I sent sampler to Fool-Hala. We played the music to bid it adieu. I said, That doesn't mean we're selling. These are companies that I generally still like. But the five-stock sampler was a three-year game. Yet, many of these stocks we continue to hold. They're part of Motley Fool services. I love some of them even more than I did. Seven or 10 years ago, some of them I wish had gone away, and that's the beauty of 10 years later. It started last year. It may continue for many more.
Now every 10 weeks on this podcast, we open up a time capsule. It's a past five-stock sampler that is hitting its 10-year birthday, and we're going to score each stock equal weighted from the original air date. We're going to see its return. We're going to compare that to the S&P 500 over the same span. Then we do the real work, what we got right, what we got wrong. Well, actually, I have on a Motley Fool friend to help do the real work. This week, it's longtime fool Karl Theil to join us and discuss together what the decade actually taught us. As investors, we'll finish out, of course, with the samplers overall result and a quick go-forward view on some of the companies. If you're new here, that's 10 years later. It's not just keeping score, we're learning how and why Rule Breakers win and oh sometimes lose too.
Karl Thiel has been an analyst at The Fool since 2004, working on Rule Breakers that whole time. Also currently on our quantum energy and health AI services. Oh, and biotech, Karl has been an avid follower of the biotech industry almost his entire career, including pre-Fool time as a consultant, an employee at a bioinformatics company, spoiler alert. None of the five stocks we're talking about this week are in biotech. These days, Karl spends his non-work time dreaming of greatness in his Old Man cover band. These are his words and plugs into Austin, Texas' music scene. Plus, if you're ever lost in the woods and you happen to have Karl along with you, he can totally help you find edible mushrooms. Karl, welcome back to Rule Breaker Investing.
Karl Thiel: I hope it doesn't come to that, but if need be, thanks for having me.
David Gardner: Had you ever, I mean, I know you've spent a lot of time in the woods in and around Portland, Oregon. Obviously, you're now in Texas. You are a creature of nature, Karl. Have you yourself ever truly gotten lost in nature?
Karl Thiel: I actually did one time while foraging mushrooms and foolishly didn't have very good GPS stuff with me, but I managed to figure it out.
David Gardner: GPS only showed up, I mean, almost since I think The Motley Fool started before GPS was around. You're excused for maybe not having GPS at different points in your past. Yeah, we'll say that. Let's go with that. All right, we're going to cover five stocks this week, 10 years later, here they are in order. Alphabet, Euronet Worldwide, Hain Celestial, Booking Holdings, and Tesla. Now, before we start with stock number one, how has the S&P 500 done 10 years ago this very day? The answer is, the S&P 500 is up 248.7%, Karl, it's been a good 10 years.
Karl Thiel: It has been a remarkable 10 years. I guess I'm almost tempted to say unprecedented. I think that's probably not true. I don't have that at my fingertips, but it has been an amazing time.
David Gardner: It really has been. The market has more than tripled over these 10 years. That is the bogie that our sampler is competing against plus 248.7 each of the stocks, if it is up 250% or so, it's in line with the market. Over these 10 years, if it's above, it's a market beater, if it's below, we've got a few of those. It's a market loser, Karl, let's now strap into the time machine as we go back now to July of 2016.
All right, stock number one, this is in the order I presented them 10 years ago this week. It's alphabetical by company name and back in 2016, Alphabet, which is stock number one, ticker symbol G-O-O-G-L. Alphabet itself was barely a year old. Google had recently reorganized under its new corporate umbrella, signaling it wasn't simply a search engine anymore. Search remained the case machine, of course, but the company was already placing ambitious bets on everything from self-driving cars to artificial intelligence, cloud computing, and life science. Larry Page and Sergey Brin were making it clear this enterprise was built to think beyond today’s business. Why did I pick the stock for this sampler? Well, I described Alphabet as one of those independent and visionary companies that can stand alone. I was praising its ability to be guided by visionary leadership to new places. My conclusion, Karl was there are very few companies worldwide that have more capacity and capability to do so many things that Alphabet does every day across all of its different businesses. Karl, any initial reactions of yours to the stock either back then or now?
Karl Thiel: I mean, just two things, really. One is you mentioned they had only recently become alphabet at the time. When you put this together, I was very much not used to the new corporate name. I'm going to admit I'm still not used to it. [LAUGHTER] I still think of them as Google.
David Gardner: I mean, their ticker symbol. I've been contending this for a while. They should change their ticker symbol to the following four letters A-T-O-Z, A-Z. Alphabet. That would be awesome. It also would swipe a page from Amazon cause Amazon plays a little bit of the A-Z thing going on, but I think A- Z is better than still rocking GOOG optional L.
Karl Thiel: Maybe they'll get confused with Andreessen Horowitz. I don't know.
David Gardner: Yep, there could be some copyright violations, but hey, that generates a lot of press around your new ticker symbol.
Karl Thiel: That's true, and they can afford it. My only other thought about this, I'm just going to say, this is the only one in this five-stock portfolio that I own personally, and I have owned it all this time.
David Gardner: I, as well, my friend, this has been a wonderful performer. Let's talk about before we talk about the single biggest reason why this stock has done, what it's done, which is Karl's research. He's bringing that in a sec. Let's see how it has done. The stock back on July 13 of 2016, split adjusted was at $35.85. Today, it's just over 352. By my counting, that's up 883%, Karl, again, against a market up about 249. This stock has crushed the market over the last ten years, up more than 600 points of Alpha, a wonderful way for this five-stock sampler to start. That's how well Alphabets. It's up. It's a nine-bagger for those of us who've held it over these last 10 years. Karl Teal, what, in your mind, is the single biggest reason Alphabet is a nine-bagger?
Karl Thiel: Yeah, it's hard to say, and research is probably a strong word for what I've done here, David. But this has been the smoothest ride in a way. I mean, this stock has pretty much just gone in a straight line upwards over time. I mean, that's not entirely true, but mostly. Really, they've just executed on everything they ever said they were going to do. When they became Alphabet, there was a lot of ideas about the different things that they felt that they were moving into, but those were largely aspirational at the time. Pretty much 100% of revenue is coming from the search ad business. We have seen YouTube takeoff. We have seen Google Cloud really become a major contributor. I think it was in 2015 or 2016, right around the time of this portfolio that they started making tenser units, which is not, I think, anything that anybody was focused on. But tenser units became the backbone of Google Cloud, of powering AI for themselves, for clients, and even separate independent sales of tensor units. I mean, that's become a big thing for them. Then I've always just loved a company that would go ahead and invest money in BlueSky research the way that they did other bets. A lot of those other bets haven't paid off. One of my favorites is Makani. Do you remember that one?
David Gardner: I don't.
Karl Thiel: Energy-generating kites. [LAUGHTER] I love it.
David Gardner: I mean, this is a company, Karl, that's kind of doing everything. I'm thinking back to, well, who is the CEO of Alphabet, and it's Sundar Pichai? I was just checking. He started in 2015. I'd forgotten this, but he's been the CEO of this company all the way through, even though I would say, he's not the most easily named or recognizable CEO as big and successful as Alphabet has been.
Karl Thiel: That is true, but boy, he's really presided over an incredible period for the company.
David Gardner: Incredible.
Karl Thiel: I will say that one of those other bets at the time that seemed colorful and interesting is Waymo, and that seems way more than just colorful and interesting at this point. I think they just got valued at $126 billion in their latest round, which is that's like 3% of the company. That's not nothing.
David Gardner: I know you're in the Austin, Texas, area. Have you ridden a Waymo?
Karl Thiel: I have not ridden one, but they are a daily part of my life. They are everywhere, whizzing around. I see them constantly.
David Gardner: You've not ridden them because you have your own wheels, and so you don't need them, or you're terrified of the idea of sitting by yourself in a car that's driving itself?
Karl Thiel: No, no, I absolutely would ride in a Waymo. It just hasn't come up just because, yeah, when I go down, I just drive myself.
David Gardner: Yeah. As I wrote my Rule Breaker Investing book that came out last September, I just thought, is there a more expansive, diversified innovator on planet Earth than Alphabet? I think I concluded in the book, there isn't. I do believe that's a pretty good sign for Rule Breaker investors. You're looking for the great innovators of our time, and you tend to orient your portfolio toward companies that innovate at scale, and yeah, they fail sometimes, too, by the way, it's the VC mentality. Karl, I can't think of a more innovative company than Alphabet.
Karl Thiel: I mean, I think that's true, and what I also love about it is that I think it's a great stock for today, right? I mean, over that period, profits have roughly gone up eightfold. Stock itself has gone up roughly 10-fold, so not really that out of balance with each other, especially when you consider that each incremental dollar of revenue is worth more now than it was then. It still looks like a great company.
David Gardner: All right, we're going to park Alphabet right there again in nine baggers, so a very strong start for this company. By the way, when I closed this sampler out three years after it was picked, Alphabet was up 60%. The market was up 40%, so it was a market beater, but it has skyrocketed in these seven years since July of 2019. That's through some really tough times, COVID, for example.
Let's move on to stock number two, Euronet Worldwide, ticker symbol EEFT. Back in 2016, Euronet Worldwide was one of those wonderfully under the radar businesses that quietly powered global commerce. It was best known for its vast network of ATMs. Currency exchange, electronic payments, Euronet stood to benefit from a Europe where people, businesses, and money might have to navigate new borders and new complexities. If Brexit made cross-border financial transactions more important, Euronet was already helping make them happen. At the time, Karl, I called Euronet an electronic payments company, pointing out that as borders become more important, companies that help people move money across those borders become more important, too. I also liked that it was not a company most people had ever heard of yet one whose services millions of people were already using every day. Karl, any initial reactions of yours to the stock?
Karl Thiel: I'm just going to give a fun bit of trivia that I guess is maybe going to give away what you're going to say next. But [LAUGHTER] EEFT stock hit an all-time high on July 10, 2019, two days before you did your original sampler.
David Gardner: All right, so you are reminding listeners that when we picked the stocks and then reviewed them one year later, two years later, and three years later at the three-year mark, we stopped reporting, and, indeed, I do see it was up 134%. The market was up 40% at that time, Karl, and it is regrettable. I am regretful now to note, 10 years after I first picked it, here's the performance. Euronet Worldwide has gone 72-77 and changed. The stock is up 8% over 10 years, it's up 8%. The market's up 248%. We are hugely behind 240 percentage points with my pick of Euronet Worldwide. Karl, in your mind, what is the greatest reason this company is basically flat over 10 years?
Karl Thiel: OK, when I say what this company does, I feel like that'll give some away. It's a little unfair, but to paraphrase the graduate, I have one word for you: ATMs. I think I get it. ATMs, they were such a big part of life, I think, more so 10 years ago than they are today. We're not a cashless society, but we're a lot closer to it. I don't handle much cash anymore these days. I am being unfair because the company literally had a business in stocking, maintaining, and having an ATM network. But they do make money on top of that. It's just that what they've done, and the reason, honestly, that the stock is flat and the business is at least stable is that they've actually managed to continue to layer services essentially on top of a pretty stagnant or even slightly shrinking world of ATMs. One of the things they do it's just I think the problem is what some of those things are. Dynamic currency conversion. So when you're traveling abroad and at the point of sale, you'll be asked whether you want to have that charged in the local currency or in your home currency.
David Gardner: Yeah. I was just in Spain, and I got that question over and over.
Karl Thiel: Euronet is counting on you to take the bad deal, essentially. If you choose your home currency, they will do a dynamic conversion on the spot and take a decent slice of it. It's a far worse deal.
David Gardner: My recollection there, Karl, having done some international travel this year is, yeah, that's not the right call. The call is generally pay in the local currency. Because then you're not triggering a conversion, which then upcharges you maybe 5%. So it sounds like Euronet Worldwide has set itself up to win when I lose, which is probably not a great business dynamic.
Karl Thiel: Yeah, not a great dynamic and also not a very well-kept secret at this point.
David Gardner: Yeah. Well, in a lot of ways, I think I'll reflect this at the end as we draw lessons from this sampler. But I'm noting this company is not very innovative. When we talk about Rule Breakers, what usually wins in investing for us as stock pickers is when we find the innovator. Let's not spend any more time on Euronet Worldwide. I wish I could sweep it under the carpet I can't believe. I love that you check this, Karl. I can't believe it hit an all-time high two days after we stopped covering this sampler, and it's pretty much been downhill ever since. So for now, thus much for Euronet Worldwide.
Let's move on to Stock Number 3, Hain Celestial. Things are about to get even darker. Hain Celestial, ticker symbol HAIN, back in 2016, was riding the wave of consumers eating healthier and paying more attention to what was in our food. Long before natural and organic became mainstream in grocery aisles, Hain had assembled a portfolio of brands serving exactly that movement. With Brexit creating uncertainty around trade and consumer confidence, I saw a business whose appeal wasn't tied to politics so much as just to enduring shifts in how people wanted to live and eat. At the time, having re-listened, I described Hain as one of the world's leading natural and organic food companies. Noted that, regardless of political upheaval, people are still going to eat. More importantly, I believe the long-term trend toward healthier, more natural foods was intact and that Hain was well-positioned to benefit from that. Karl Thiel, any initial reactions of yours to Hain Celestial?
Karl Thiel: Mostly that when you brought up this company, I had not looked at them or thought about them in many, many years. I thought on the surface that the general trend of people wanting to eat natural and healthy brands was still a pretty strong trend. So I was a little surprised by what I saw.
David Gardner: Yeah, and looking, since we are thinking back to three years after I picked it in our last Fool-Hala moment for this sampler, things already weren't looking good for Hain. The stock had declined from 51.5 to 21. So of the five stocks, it was already the dog, Karl, more than cut in half in just the three years we were following it. Karl Thiel, I suppose I should provide the numbers before you tell us what happened here. I will. Hain Celestial has now gone from $51.54 cost 10 years ago this week, from $51.50 to $0.57. This stock is down 99% over the last 10 years with the market up 250, as you might imagine, that 600 points of Alpha that Alphabet set us up with to start with pretty much almost entirely given away by Euronet Worldwide, and especially Hain Celestial. My golly, Karl, what happened?
Karl Thiel: That's like failed biotech territory.
David Gardner: I agree with that. I have picked stocks that have done slightly worse but never much worse than down 98.9% over 10. For a company that I think was on trend and that I liked I had a pretty good past leading up to me picking it 10 years ago.
Karl Thiel: Yeah. So again, just weeks after your original podcast, in August of 2016, there was an accounting scandal announced around Hain. I don't really even think the accounting scandal in the end amounted to all that much. There were some questions around inventory and allowances for spoilage, and some things like that. The company did go through a 10-month period without reporting any figures to the SEC as it messed around with all that, but they ultimately came back and said, it's fine. We don't need to restate anything. But that just was the beginning of a very poor path for the company. I do want to say one thing in defense of, I don't know if you remember this, but the old CEO was Irwin Simon. I do remember you saying way back then that he was not your favorite guy. He was not really a selling point for you, as far as the company went. You thought he was a bland numbers guy and not really somebody who was passionate about the business.
David Gardner: I truly had forgotten that. But first of all, I love working with people long enough that we can remember this about each other, because Karl, you and I have been now working together more than 20 years. So thank you for remembering that. Also, I am glad that I had a question mark a little bit around the CEO. It's only been borne in on me more and more over the course of the last 10 years how important it is to have people, I think that are true leaders, people of character, visionaries, smartest guys in the room, if possible, gender neutral statement. In any industry, in any stock pick. I think Irwin was maybe near the end of his career. Yeah, he wasn't really an iconic mover and shaker for the organic foods movement. He was more of a spreadsheet guy.
Karl Thiel: Yeah. Well, he was definitely near the end of his career after this. He ended up leaving in 2018. He was a numbers guy when he didn't like the numbers, I guess he was maybe a massage the numbers guy. But this goes a long way to explaining why the stock was down at the three-year mark, but down so much more now is not really anything around the accounting. It's just what came after that. Revenue at this company has not grown since 2015. Every year, for 11 years, they've had shrinking revenue. They haven't turned a profit since 2022. That said, when you think about Hain Celestial, and you think about brands like Celestial Seasonings or Greek Gods yogurt, these are all things I still see regularly in the supermarket. They're around, they have shelf space. The company still has 1.5 billion in annual sales. They have a $50 million market cap against.
David Gardner: It is astonishing to note that the company's market cap, this is a game show we play every quarter on this show is 50.7 million for a company with a billion-and-a-half sales?
Karl Thiel: Yeah, that's a price-to-sales multiple of 0.03.
David Gardner: The problem is, I think, as I look over the numbers, if they do have a billion-and-a-half in sales, their income is -500 million. So they're selling a billion-and-a-half worth of product in order to lose $500 million over the past year, hand over fist, maybe that explains a tiny market cap.
Karl Thiel: Yeah, and their strategy of divesting various plants. They had previously been a big acquirer of brands, they were just rolling up stuff, and they've spent the last decade mostly getting rid of it, and it has not turned things around yet.
David Gardner: This is a company that has become irrelevant, even though the products are still on the shelves, and, yeah, I like Celestial Seasonings Salad dressing. They had some other good brands, I appreciate it. Sometimes the world and your stock portfolio doesn't play out as you expect or at least your thesis for an individual stock. This would be an incredible example of this. This goes down as one of the worst stock picks I've ever made, whether it was for Motley Fool Stock Advisor back in the day or for this sampler, Hain Celestial has all but disappeared. Going to close the chapter on stock Number 3. We'll come back and share some lessons a little bit later.
ADVERTISEMENT: Did you know three out of four U.S. homes have toxic chemicals in their tap water, even though contaminated water looks clear, it could put you at risk for devastating health concerns, including fatigue, hormone disruption, cognitive decline, even cancer. Surprisingly, standard fridge and pitcher filters do little to remove most contaminants, and bottled water contains microplastics. So what's the solution? Introducing AquaTru, the countertop water purifier that's tested and certified to remove 84 contaminants, including chlorine, lead, forever chemicals, and microplastics. It's patented. Four-stage reverse osmosis system goes way beyond ordinary filters for pure healthy water you can trust, no plumbing, no installation. AquaTru has been featured in Business Insider, Popular Science, and named best Countertop water filter by Good Housekeeping. Join 98% of customers who say their drinking water is cleaner, safer and healthier. Go to aquatru.com now for 20% off your purifier using this promo code, RBI. AquaTru even comes with a 30-day best-tasting-water guarantee. That's aquatru.com, AquaTru, spelled without the E on the end, so that's A-Q-U-A-T-R-U.com. Remember to use the promo code RBI, aquatru.com.
David Gardner: But let's now move on, Karl to stock Number 4, and that would be Booking Holdings, ticker symbol BKNG. So back in 2016, Booking was still known as the Priceline Group, a name it would keep until it rebranded in 2018. It was already one of the world's great online travel enterprises. It had assembled an enviable collection of brands, connecting travelers with hotels, flights, rental cars, and restaurants across the globe. Even amid the uncertainty that surrounded Brexit, I saw a business built around one enduring truth, and that is people love to travel. I called the company one of the great Internet success stories of our age. It's business built around helping people see the world. I like that. Even if Brexit created short-term uncertainty, I thought the long term trend toward more travel, and by the way, more online travel booking would continue, so it was a natural rule breaker investing choice, Karl, any initial reactions I hope slightly more positive than to Hain Celestial about what is now known as Booking Holdings.
Karl Thiel: I'll just throw in another piece of trivia. They, Priceline acquired Booking in 2005 for $133 million.
David Gardner: Incredible.
Karl Thiel: That has to go down as one of the best deals in history.
David Gardner: People talk about YouTube being a billion dollars for Google, and YouTube is worth a lot more than that today. Wow, I had forgotten. That is astonishing. Booking, of course, the travel portal dominator of the European continent and to think that Priceline for a song. What year was it again?
Karl Thiel: 2005.
David Gardner: 2005 paid less than 150 million. Of course, now it's the company's name today. Well, let's cover the performance of the stock. I recommended it at 53.5 10 years ago this week, and today it's at 175 or so, which means this stock is up about 226%. The market up 249%, so that makes Booking a little bit of an underperformer. It has more than tripled over the last 10 years, but so has the market. Karl, as you look at Booking Holdings, what do you see for it and what do you see against it? Why is this an also ran here in 2026?
Karl Thiel: I guess I really don't think they are. In somewhat defensive of that, yeah, they are trailing the S&P 500, technically, by a little bit. But this is not a tech company, per se. If you look at the equal weighted S&P 500, so one that isn't over weighted by the Nvidias and Alphabets and Apples, etc, of the world, it is actually outperforming. It's outperforming the equal-weighted S&P 500.
David Gardner: I like that.
Karl Thiel: Yeah, there's nothing to sneeze at, that performance from this kind of company over that period. So I think they've done really well. The guy who was the head of business development back in 2005 when they acquired Booking was Glenn Fogel. He was responsible for that deal, he's now the CEO. I think they're in pretty good hands. It is really interesting, and this one is maybe the most on-the-nose Brexit bet, because this really, even though it was Priceline at the time, this really became about a European business. Booking is very strong in European hotels, and that has just turned out to be a better place than Priceline, which they really, I thought, had a very cool name-your-own-price gimmick, which I took advantage of several times back in the day. But they're really focused on flights and cars, and it was just a less lucrative business.
David Gardner: Market cap of this company. Yeah, it's a little bit more than Hain Celestial, even though they've both underperformed, Booking Holdings at about $136 billion today, certainly a global leader, certainly doing good work in this world. It's the company if you snapped your fingers and overnight it disappeared, a lot of people would notice, a lot of people, I think, would care. It's a snap test passer for me, Karl. Before we move on to stock number five, which, spoiler alert, is going to be a massive winner, is there anything more you’d like to say about Booking Holdings before we move on?
Karl Thiel: Just that it's in an interesting position right now and that I think it's been pressured just this year by a lot of AI-related fears. Some of those are it's a knock that's always been on the business, which is that they count on Google and Google Search to be top of the funnel for them, and there's some fragility to that. There's been extra fear that as people go to AI, there's that concern. You can think about that.
David Gardner: I agree with that. It is something to monitor. I do take that seriously. The stock is down from its high in February, right about 220 in January, actually, and today it's about 175, as I mentioned, like some other so called software companies or maybe, threatened by, I don't know, agentic AI that could change everything for an industry, it does stare at that. For me, anyway, it remains a significant holding in my own portfolio. I guess I'm glad I picked this for this five stock sampler 10 years ago. It has more than tripled, although regrettably, it's underperforming the market, and as you know, Karl, I tend to gauge all of my performance as a stock picker on beating the traditional S&P 500. I have to admit this one has not, although I continue to hold out good hope for it.
Let's move on to stock Number 5, shall we? That company is Tesla, ticker symbol TSLA. Now, back in 2016, Tesla was much more aspiration than Empire. The Model S had proven electric cars could be desirable. The Model X had just launched. Excitement was building around the upcoming Model 3. Elon Musk wasn't simply trying to build a better automobile. He was actually trying to accelerate. This is their purpose statement, trying to accelerate the world's transition to sustainable energy. Whether or not Brexit changed anything, that mission still struck me as one of the bolder long-term stories. In business, I described Tesla as one of the most visionary companies in the world, said that if I was looking for businesses likely to shape the future over the next decade, Tesla would absolutely be on that list. My thesis wasn't about the next quarter or even the next year, but about backing an ambitious enterprise, pursuing a mission that could change the world. Karl, any initial reactions of yours to Tesla?
Karl Thiel: I'd like to say that this is the 10-year anniversary of me being wrong about this stock, but in fact, my being wrong goes back further than that.
David Gardner: Of all places you live in and around Austin, Texas, these days, which Tesla's there, too, now?
Karl Thiel: That is true, and I drive a Tesla.
David Gardner: It sounds like it's time for us to do the numbers for the stock pick, and then Karl's going to tell us why Tesla has risen by this much. This is the 10-year anniversary of me picking the stock. I picked it on this very day that we're recording 10 years ago. The stock was at $14.84. As we speak, Tesla is over $391 a share, 391 and change. Stock is up 2,540%. It is up 24 times in value. The market, as we talked about, is up 248%. Tesla on its own. Takes this sampler, not just well above the market, but it's made this one of my best-performing five-stock samplers of all. Karl, sometimes it just takes one amazing stock. To give you market-beating returns, what exactly has happened over the last 10 years with Tesla Inc?
Karl Thiel: I'm a little bit dreading this one because I think that I'm probably on a different page than you, and I need to try to be fair and balanced about this. What happened is that Tesla made their revenue go up 25X in 10 years. That is amazing. That blows away Alphabet. That blows away pretty much anything else. It is an incredible performance.
David Gardner: I hear you picking your words a little carefully, Karl, because you're only speaking to the top line, the sales, and you probably are thinking about margin expansion and maybe the valuation of the company, and a lot of it is based not on cars anymore, but future expectations about robots. I'm not really sure. Keep going.
Karl Thiel: Sure. I was going to say, I feel like we've come back around to the beginning again. You said in your intro that when you picked the stock, it was really more about aspiration than it was about the business as it really was. I think that's where we are right now. I think the business as it is, has been in decline since 2023. Now, that arguably is reversing itself. They just had a really pretty good quarter. We might be seeing the core car business really reasserting itself. But generally speaking, if you're looking at the numbers, the last few years have not been great. The company isn't really valued on any kind of valuation around car sales. It's valued on these aspirations around robotaxis and humanoid robots and on Elon, exactly. Obviously, he's a person that people have varying opinions on. I'm obviously not the person to listen to on this stock. But I do think that the expectations built into some of these businesses are pretty high. I know you have, in the past driven a Tesla. Do you still? Absolutely.
David Gardner: I think I've continuously driven Tesla since 2013. Thirty years in counting and a few different varieties of them. I do think that a big part of Elon's mystique these days is SpaceX. In a lot of ways, SpaceX, I think, has proven that he really is an amazing innovator who is capable of dreaming up the future and then truly building us into that. This is all political notes aside. I realize we've talked about Brexit a little bit this week. Some people view Elon primarily as a political figure. I don't. I certainly acknowledge why people would think different things about that.
But from my standpoint, I do think that he is truly one of the great innovators of all time. I think that he's doing that at Tesla. I do also think that robotaxis, well, I'm not really clear on that future, it's clearly part of Tesla's vision. That's where he's directing so much of his manufacturing capability now. Yet the optimist robot and thinking about robots seems like that could be the biggest industry of all time when robots just really vigorously get started and then just start scaling. I think Tesla could be beautifully positioned but you are. Anytime you've bought and held Tesla stock, at any point over the last 15 years, you've been betting on the future, and you can't really point at the present and say, it's fairly valued off of that. It always like some other Rule Breakers, Karl, I think it always looks overvalued.
Karl Thiel: Yeah, you're totally right. I would say that in some ways, for the bets that make a difference to Tesla, Musk has in some ways been the poster child for overpromise and underdeliver. But then you look at SpaceX and you look at those achievements and you have to really hand it to that company and what it has achieved. It does make you wonder some of these things really could come to fruition.
David Gardner: PayPal before that, although he was part of the PayPal Mafia team, but I don't even keep up with his other private companies. We've got brain computer interfaces. He's got a boring company with building tunnels underground.
Karl Thiel My favorite one. I love metro systems. I wish that the United States had more of it, and the idea of being able to build tunnels is fantastic.
David Gardner: There's more we could talk about, but this is just a one week's podcast. This is the 10 years later for five Brexit-inspired stocks. Karl, you've taken us through Alphabet, Euronet Worldwide, Hain Celestial, Booking Holdings, and now Tesla, it's time for an overall accounting for this 10 years later version of five Brexit-inspired stocks. Now, let me mention.
Before I give the 10 year results, we last talked about this at the three year review of Palooza, send this sampler off to Fool hale. at that time, it was losing to the market. These five stocks were up 37% on average. The market was up 40. We described this one as a losing sampler as we ended the three-year game. Oh, my, what time can do for a portfolio stocks. This losing sampler, now against an S&P 500 average of 249%, these stocks on average are up 712.3%. Basically, 464 points above the market averages, and that includes a stock, Karl, that has lost 99% of its value.
In fact, when I think about Rule Breaker Investing and what we’ve tried to demonstrate through our services and through our work over the years, and my book and this podcast, I’m reminded once again, it isn’t about fearing loss. You couldn't really have picked a worse stock than Hain Celestial over the last 10 years, and many people live in fear of having a single stock cut in half. Hain Celestial lost almost everything, and yet, your winners win so much more than your losers can ever mathematically lose that I think this is a poster child moment for rule Breaker investing. These five stocks, again, taken together up 700, 12%, the market up 249, so that's a plus 464 in the win column. Let's note, two of them are winners. Alphabet, a nine-bagger, Tesla up. Yeah. Over 2,500%. That's a 26-bagger. It kind of makes you forget, a -99%. Karl, not only do I always appreciate it when winners win and samplers beat the market, but I especially appreciate this one, maybe, because when we last talked about it seven years ago, we were losing to the market.
Think about all the things we've been through as a society over the last seven or 10 years, and to think you have this kind of performance, again, primarily driven by Alphabet and Tesla. But sometimes it only just takes one great stock to win and two great stocks, and three also rans.
Karl Thiel: Hard to say it better than that. To me, I think one of the biggest lessons, they let your winners run. That's certainly been the case with Alphabet. It's been the case with Tesla. Obviously, at the three-year mark, you would have been better off letting Hain Celestial go then. Yet, in the spirit of dialectics, I do have to point out, Tesla was losing at that year mark, wasn't it?
David Gardner: That is amazing. It was losing to the market. It was up 10%. It had gone up 10%. The market was up 40%, as I mentioned, and it was going sideways. That was three full years of no real performance for a stock that's now up 26 times in value from the original cost basis 10 years ago this week. That's a good lesson. Of course, I've always tried to underline that. I feel like we practice that in Motley Fool services for our members.
But as I've articulated it, habit No. 1 of the Rule Breaker investor is rule number 1, let your winners run high. We really have done that. one of the things I love about that, Karl, is it doesn't take any extra effort. It actually takes effort to sell and then maybe buy back in if you sold in the first place. But if you just buy to hold and find excellence and be willing to allow uninnovative companies. I'm going to go with Lesson No. 2. I like your lesson No. 1. Let your winners run. Lesson No. 2. I'll pin up there is the innovators in an innovative world are usually the places you want to have your money. If you think about Alphabet and the breathtaking number of technological fronts it's competing on and innovating at that's astonishing. Tesla, while it's a much more focused company than Alphabet is in its own way, remarkably innovative, even just the idea that electric cars would work or could actually become a consumer product that people would want to replace their gas-guzzling machine with, and then that we might enter a world of robo taxis where people are like, Why own a car? It's just an asset sitting in your driveway 95% of the time. We might be moving toward a world where we don't really own the vehicles that take us around anymore. We will see. But I think lesson No. 2, for me, anyway, Karl, is winners win, and innovators innovate. When you can combine those two things and hold, that's a great way to beat the market.
Karl Thiel: Yep, I guess the only thing I would add to that is that this is a demonstration also that you can sometimes be lazy as an investor. Yes, you would have been better off letting Hains go, but if you didn't, this is what happened. It's not too bad.
David Gardner: That's just about a rap now for 10 years later for five Brexit-inspired stocks. Just looking over these stocks going forward, our last question here, Karl, are there any particular companies here, Alphabet, Euronet, Hain, Booking, or Tesla that you favor or disfavor in? May I go first?
Karl Thiel: Absolutely.
David Gardner: Excellent. I'm going to say I'm not going to buy Hain Celestial. [LAUGHTER] There are microcap stocks, and then there are penny stocks, and I'm not sure what's below those, but I think that's Hain Celestial. I would definitely not try to buy and get back to even at this point. I like to stick with my winners and not throw good money after bad.
Karl Teal: I will say that, of these five, I am going to continue holding Alphabet. I'm going to continue calling it Google in my head. [LAUGHTER] I think that at least, as I see it now, I will probably still own it in 10 years. As in terms of disfavoring one, Hain is plainly the worst of the bunch here, but yeah, I'm still not going to buy Tesla. I have to say, I'm not going to be as bold as Michael Burry, who recently just took a very public short interest in it. I wouldn't bet against Tesla and Musk, but I'm going to sit in the sidelines.
David Gardner: You said it earlier. I just buy to hold, and I'm very lazy, and I've definitely been benefited with that approach to Tesla for 15 years. But with that said, thank you for that. Your sentiment about Alphabet is mine, too. To me, the safest road to riches with these five stocks going forward would just be to continue if you don't already own some Alphabet, dear listener, to buy some or just to continue holding as Karl and I are doing with, I think, the world's most innovative company, beautifully positioned with a CEO who's now in his 11th year and I think in his prime. There's a lot going for Alphabet, and I think the one thing you and I want, Karl, is either revert the name or change the ticker. Your choice, Sundar. Karl, always a delight to be with you. Thanks for joining me again on Rule Breaker Investing.
Karl Thiel: Yeah, thank you so much. It was fun.
David Gardner: We do this every 10 weeks because 10 weeks later, 10 years ago, I picked five low-risk stocks for the next year. That was in September of 2016. Therefore, our next episode of 10 Years Later will be in September of 2026, looking at what I was calling five low-risk stocks. I was saying for the next year, which is very unusual for me, but I specifically heard a whole bunch of people saying, You shouldn't even be in the market over the next year back in 2016, and I thought differently. We’ll see how those did. In the meantime, we hope you're enjoying your summer if you're in the Northern Hemisphere, or the height of winter if you’re in the Southern Hemisphere. Fool on.
Source link
