Small cap, midcap, large cap, megacap…? How do these companies compare? It’s not enough to know the share prices; you have to know the market caps! And that’s why we play this game — now with a new “throwdown rule.” Play along with our guests, Motley Fool Chief Investment Officer Andy Cross and Motley Fool Senior Analyst Matt Argersinger.
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David Gardner: The price per share of a stock tells you almost nothing. It’s the price to buy one share of the stock. But how many shares does the company have outstanding? Well, in math, we multiply two multiplicands together, but the price per share is only one multiplicand. If you don’t know the other one, well, you can’t do any meaningful math or figure out much of the world around you. Fools with a capital F know that you need to know the shares outstanding and then multiply that by the price per share, and now you know the actual full value of the company, its full price tag, its market capitalization: market cap.
Well, to teach this lesson inexorably and unforgettably, we invented a game. That’s what we do. The date was August 9, 2017. The Market Cap Game Show was born, and we’ve been playing it every quarter since and will be rejoined this particular episode by the man who was there at the start — spoiler alert.
Oh, by the way, you’re playing too. I designed it that way so you, dear listener, can play along against my guest stars, against your spouse or partner, against your kids. Well, it’s that time of the quarter again: 10 new stocks, three guest stars, Andy Cross, Matt Argersinger, and you, only on this week’s Rule Breaker Investing.
[music]
Welcome back to Rule Breaker Investing. I know: holidays, busy week, busy Wednesday. I hear you. Foolish best wishes to you, dear listener, on making the most of these holidays. Most of all, feeling, if you can get there, in the moment, not too nostalgic for the past or too frenetic and anxious in advance of the weekend, family coming too. Hey, or maybe you’re headed out to be with family and friends somewhere in the moment to savor this week, this day, this moment, each moment as much as you can. That is my wish for you. I know, busy Wednesday.
This Wednesday also happens to be the penultimate Wednesday of the quarter, and therefore, it is the Market Cap Game Show. Now, Market Cap Game Shows may never score a Bestie most years, and yet they are four of my favorite shows to do every year, this week being no exception.
I’m delighted to be bringing back to the game show two outstanding fellow Fools who played before, but it’s been a while. Andy Cross is the chief investment officer at The Motley Fool, working with dozens of fellow investors here to deliver investing guidance to our members. He has 26 years of Foolishness under his belt. Looking forward to one day, just maybe, Andy tells me, winning the Market Cap Game Show. Andy, welcome back.
Andy Cross: Thank you, David. Maybe one day.
David Gardner: Today could be your day.
Andy Cross: Could be.
David Gardner: Matt Argersinger has been an analyst at the Motley Fool for almost 15 years. He currently heads up investing on the Fool’s Mogul, Real Estate Winners, and Epic Bundle services. Matt, welcome back to the Market Cap Game Show.
Matt Argersinger: David, it is great to be back, and I think this could be Andy’s day, because I’m here.
[laughter]
David Gardner: Well, it’s kind of you to say, Matt. Now, longtime listeners will instantly recognize that you are where you should be in the saddle here, back in the saddle again for the Market Cap Game Show. The first several of these that we did starting in 2017, Matt, it was just you and me. Do you remember?
Matt Argersinger: I can’t believe it’s been more than five years already.
David Gardner: Do you remember how the rules worked back then?
Matt Argersinger: I do. I remember you gave me a company, and I think I had to guess the market cap within a 20% range up or down of the market cap.
David Gardner: That’s right. It was pretty much a straight-up question. Players at home could do the same thing, too, right along with you. Indeed, we did that for a year or so until Adam Nelson, longtime listener, said, “The game would be even better if you had two people competing and one of them named a range, and the other said ‘inside’ or ‘outside,'” and the game has changed forever since then. Matt, welcome back to the new format.
Matt Argersinger: All right. I’m excited about that.
David Gardner: Not only is that and has that been our format, but, gentlemen, we are introducing a brand-new rule with this Market Cap Game Show. We like to innovate — not too often. We don’t want to go under the hood too often with his vehicle — but once a year or so, can the game be improved? We talked about it ahead of time. Do you guys like the new rule?
Andy Cross: I do. I don’t know if it’s going to give me an edge or not over Matthew, but I do like the added excitement around this rule.
Matt Argersinger: I’m excited. I’m nervous but excited about it.
David Gardner: Good. This is going to innovate off of what happened at the end of last quarter’s show. There was a tie, 5 to 5. My two noble contestants played, for the first time, the Stephens sudden death rule. I’m not going to fully explain how that came about now or why we call it the Stephens sudden death rule, but it was a wonderful way to break a tie.
And that format, I decided, isn’t as fun as a tiebreaker, which is all that penalty kicks are really worth in soccer. I think most of the time, you actually want to be playing soccer, but for this game, that tiebreaker was actually a fun format to inject into the game itself. We’re going to call this the throwdown rule. Let me explain it very briefly.
This hour, we’re going to be playing with 10 stocks, and you, dear listener are playing right along with us at home. When you agree or disagree with my contestants you will get a plus 1 along with them when you’re right. But when I turn to Matt and turn to Andy throughout this hour, once each over the course of this game — use it or lose it, guys; you don’t have to do that — Instead of just stating your market cap range, you’re actually going to announce a throwdown. With that one stock at that one moment, instead of you being on the spot to come up with the range yourself, both players are going to quietly, after I don’t know what, 10 seconds of thought, are going to write down what you believe is the market cap range. You’ll do that simultaneously for that stock.
Then, first of all, in order to get a point, you’re going to need to be right. The market cap is going to need to be inside your range. But whoever has a tighter, narrower range, whoever is willing to commit to more of the bullseye instead of just the whole target, that player will get the point.
That’s how we play sudden death. If you guys tie 5 to 5 this week, we’ll do that once again, we’ll do that as an 11th final tiebreaker, but within the show itself. At one point for each of you. You can announce throwdown, and that’s how it works.
Now, players at home, I want to make sure you know how we’re scoring that. Once we get to it, we’ll talk about that at the moment. But gentlemen, I say without further ado, let’s start your engines, let’s do this.
Andy Cross: Rev rev.
[music]
David Gardner: All right. Let me just briefly remind especially new listeners, new players: I’ll be mentioning a stock. Neither Andy nor Matt knows what stock is coming. They’ve been in soundproof chambers. Guys, you haven’t been out of your houses for how long?
Matt Argersinger: Years.
Andy Cross: During COVID, certainly.
David Gardner: They have no idea what I’m about to ask them, nor do you at home, but I’ll turn to one of my friends here, and that guy will state the market cap range. The other contestant and you playing at home will simply say, “I agree, inside that range, or I disagree, I think it’s outside that stated range.” If you get that part right, give yourself a plus 1.
That’s the Market Cap Game Show. We’re focused on the real market caps, real stocks. Nobody knows what’s coming.
Andy, let’s get started. Andy, which operating system do you favor?
Andy Cross: Apple.
David Gardner: For how long has that been the case?
Andy Cross: It’s been the case for probably a decade.
David Gardner: Was there a trigger moment where you decided, you know what, all my [Microsoft (MSFT 1.18%)] Windows stuff…?
Andy Cross: I couldn’t get over all of the spinning disks and all of the applications I needed to add to my Windows machine for security and Symantex this and that. I just got frustrated with it. I’d read about the simplicity of Apple, having appreciated Apple, having an iPod years ago and all that, but never having the laptop, the MacBook. Finally made the jump when the Fool could support it. Ever since, my whole family is now over to the Apple ecosystem.
David Gardner: I can relate. In fact, for me, Andy, I think my kids are just a little older than yours. It was 2008. It was my daughter saying, “Dad, I want an iPhone.” I was like, an iPhone? But I’m all Windows. I’ve got my Palm Pilot. iPhone? All of a sudden, I got her an iPhone, and then I realized I need to understand the operating system, iOS, which connects to Mac OS, et…
Read More: A Fresh Face-Off on the Market Cap Game Show | The Motley Fool