*** UPDATED with Stock Returns as of Friday, December 15, 2023 ***
- Over the 6 year time period from January 2016 through 2022, the Rule Breakers stocks picks have outperformed Stock Advisor’s picks with an average return of 122% vs 91%.
- Based on my experience, Rule Breaker’s delivers exactly what they say. Over these 7 years, over a quarter of the picks (44 out of 168) have more than doubled (compared to 43 for Stock Advisor)
- On the downside, Rule Breakers has picked some big losers each year (including Silicon Bank). So, what you see, is the greater returns and greater volatility with Rule Breakers.
- Launched in 2004; over 100,000 subscribers
- The retail price is $299 a year
- Introductory Offer for New Members Only: Get the next 12 months of their stock recommendations & full access to all recent stock picks for just $99* on this promo page.
Today, I’m doing a Motley Fool Rule Breakers Review, their 2nd most popular stock-picking service which has been around since 2004. I already reviewed The Motley Fool’s original service, Stock Advisor, and hopefully answered most of your questions about that Motley Fool newsletter.
The fact that you are researching Rule Breakers indicates you are already one step ahead of the crowd. Keep reading and I will tell you why!
But as a little bit of a sneak peak, take a look at some of my analysis and notice the only one that is consistently beating the S&P500 in the “EXCESS RETURN” column:
Like I explained in my Motley Fool Stock Advisor Review, I also subscribed to the ‘Rule Breakers’ service in January 2016 and have purchased about $2,000 of each of these picks since 2016. In this review I will tell you how their picks have performed over the last 7 years, how it compares to Stock Advisor, and let you decide if it is worth it.
You have probably received emails from The Motley Fool or seen their ads promoting this service that is up 257% vs the market’s 112% (as of December 1, 2023):
That performance listed above is since inception, and assumes you bought equal dollar amounts of all of their picks. A better understanding of how Rule Breakers has performed can be drawn from this chart dated November 1, 2023:
This chart shows that Rule Breaker stocks were just following the S&P500 in the first few years from 2004 to 2008, but their picks’ performance started separating from the S&P500 in 2009 and has consistently outperformed the market since then.
Also notice in the chart above that their stock picks literally skyrocketed in 2019 and early 2020, took a COVID hit like most stocks, but for the last year their stock picks have resumed their sharp upward trend once again.
If you plan on staying invested for at least 5 years, note that since I have been buying their stocks in January 2016, Rule Breakers picks that are at least 5 years old have an AVERAGE RETURN of 264.7% vs the S&P500’s 104.4%.
The point of the article is, if you can plan to hold stocks for at least 5 years, the Motley Fool Rule Breakers service is the best-performing newsletter in almost a decade.
What is Motley Fool Rule Breakers?
Let me back up a step and explain what exactly this service is.
Motley Fool Rule Breakers is a stock picking service that is tailored for users looking for high-growth stocks in high growth industries. This is The Motley Fool’s 2nd newsletter. It was launched in 2004 and is managed by The Motley Fool’s expert team of analysts.
Specifically, to become a Rule Breakers stock recommendation, the stock must:
- Be a Top Dog and First Mover in an Important, Emerging Industry
- Have a Sustainable Advantage Gained Through Business Momentum, Patent Protection, Visionary Leadership, or Inept Competitors
- Show Strong Past Price Appreciation
- Have a Good Management and Smart Backing
- Offer Strong Consumer Appeal
The stock picks they pick from this service are very unique. They are NOT looking for high dividend, slow growing stocks.
They are NOT looking for stocks to day trade or swing trade.
Rather, they are trying to find the best growth stocks in the fastest moving industries. These stocks don’t always go up immediately, but the longer you hold them, as you can see from my returns, the better they perform. This shows that they are definitely finding stocks ahead of the crowd–and that is exactly what you want when you are building a portfolio.
What’s Included in Motley Fool Rule Breakers?
The platform looks almost the same as the one for their Stock Advisor service.
Both platforms are friendly and easy to use. You will mainly use the “Home” tab, which presents all the updates and active stock recommendations.
As you can see, the “Rule Breakers” performance page displays the current allocation of the portfolio, as well as ALL the stocks that were recommended. The table goes all the way to inception in 2004. You can click on any ticker to see the coverage on the stock.
You can even add these stocks to your favorites so that you will be alerted if there is any news on the stock. Finally, you can also view their ratings in terms of risk and how they measure risk.
The thing I respect the most about The Motley Fool and their services is that they are fully transparent on their stock recommendations.
They disclose their open and closed recommendations on their site for viewing. Whether the stock was closed with a gain or loss, they will disclose the complete list of Rule Breakers stock picks.
The “Home” page also has key information such as the overall performance of the service, the upcoming schedule for stock picks, the latest recommendations, etc.
“But… what if I want to know more on one of these stocks?” Glad you asked.
If you would like to more about a company and why it was recommended, you can simply click on the stock’s logo.
You will be re-directed to the Fool’s Premium analysis page. Fool users get a detailed analysis of all the suggested stocks going from the fundamentals to ratios & charts.
Note that you have an option to “Choose what you want to do with this stock”. This feature will allow you to receive notifications whenever The Motley Fool Rule Breakers team recommends buying or selling the stock.
This feature is exactly the same as the one presented in our review of the Stock Advisor service. However, I felt it was good circling back on this due to its efficiency on receiving alerts on your favorite stocks.
Now, of course I must point out that there is a couple of stocks with negative returns. As usual, my personal advice would be to set up stop orders so that you can moderate your losses appropriately. I do believe that Motley Fool Rule Breakers does provide good stock recommendations for the long-term.
What Exactly Do You Get?
Every Thursday, The Motley Fool Rule Breakers will update their site and you will receive an e-mail with their new recommendations:
- First Thursday of the month: RoundTable discussing overall market and recap of recent picks
- Second Thursday: They release one specific New Stock Recommendation
- Third Thursday of the month: They release their 10 Best Buys Alerts
- Fourth Thursday of the month: New Stock Recommendation
- So their next scheduled release date is : February 29th
How I Transformed $2,000 into a 115% Stock Market Triumph.
Let me share my experience Rule Breakers picks using my own real money. Just as I did with my Motley Fool Stock Advisor subscription, in January 2016 I opened a new ETrade account dedicated to The Motley Fool Rule Breakers service and bought about $2,000 of each of the Rule Breakers stock picks. That is 24 picks a year so as of December 31, 2022 I had purchased over 168 stocks in that ETrade account, and sold the 8 stocks that they recommended selling.
Here’s a summary of that account’s performance for their 2016-2022 stock recommendations as of December 15, 2023:
The 168 stocks that Rule Breakers recommended from January 2016 to December 2022 have an average return of 122% compared to SP500’s 62% over the same time period!
And 43 of those 168 have more than doubled!
Remember, to get these returns, I tried to buy EQUAL dollar amounts of every stock recommendation.
What this means is you could do what I do: buy even amounts of all of their picks because you never know which one is going to double, triple or even quadruple like some of their picks did.
This review is based on my real experience and I will share just the FACTS about the Rule Breakers service and its performance over those 6 years .
Rule Breakers FACT 1: The average return of their 168 stocks picks from 2016 thru 2022 was 122% compared to the S&P500’s 70% as of December 15, 2023.
Rule Breakers FACT 2: Motley Fool’s July 14, 2022 pick of UBER is up 199% as of December 15, 2023, and their DDOG pick from Feb 7, 2019 is up is up 211 % for me as of December 1, 2023.
Rule Breakers FACT 3: Note that the longer you hold them, the better they perform–in a BIG WAY. EACH year their returns are better and better.
Unfortunately I didn’t buy it until July 18th as you can see below, so it is only up 158% for me.
How Have Their Stocks Performed?
As you saw from the chart above, since 2009 The Motley Fool Rule Breakers stocks have consistently outperformed the market. They have accomplished this by picking many stocks that double or triple each year. Take a look at some of their best all-time picks:
We have confirmed these picks and the percentage returns as of the end of 2022.
Examples of TOP performing Rule Breakers stock picks
Here are some of the Rule Breakers recent picks, and returns as of December 15, 2023.
- October pick (CAVA) up 18%
- June, 2023 pick (IOT) up 32%April, 2023 pick up 65% and 11%
- March, 2023 pick (PUBM) up 25%
- February picks (CRWD, SG) up 127% and 25%
- January pick (LYV) up 27%
- December, 2022 picks up 66% and 103%
- October, 2022 picks up 110% and 67%
- July, 2022 pick of UBER up 199%
- May, 2022 pick of ANET up 127%
These examples of their stock picks are typical for Motley Fool Rule Breakers. They manage to find a few spectacular stocks each year, and a few losers as well. But if you are patient and plan on holding their stocks for at least 5 years, then you will see these market beating returns.
For example, 13 of their 2017 stocks have doubled with the top performer at +1,229%.
And 15 of their 2016 stocks have more than doubled with the top performer at +1,826%.
Their winners of 2x, 3x, and greater easily outweigh their losers each year. This is just math. The most you can lose is 100%, but when many stocks earn 2x and 3x and more (like 1,229% and 1,826%) THAT is how you profit big over the long term and EASILY beat the S&P500.
So again, to be successful with their stock picks, you should plan on buying equal dollar amounts of all their picks and hold them for a few years.
How Rule Breakers 2016 Picks Have Average Return of 400%+
You might be wondering how their 2016 picks are up an average of 400+% as of December, 2023. It is because their picks included stocks like SHOP, ICE, PLNT, AVGO, IT, ETSY and WDAY–all of which are up 2x or more.
Overall, 19 of their 2016 picks are up, 17 out of 24 have more than doubled, and 10 have more than tripled.
Rule Breakers New Subscriber Offer:
(there’s no risk, they offer 30-day membership-fee back guarantee)
Motley Fool Rule Breakers vs Stock Advisor. How do they compare?
The overall percentage returns of Rule Breakers picks since inception is lower than Stock Advisor. But for both 2023 and 2022, Rule Breaker picks are outperforming Stock Advisor’s picks as you can see in the big chart above.
While Rule Breakers did pick a few stocks that are up over 2,000%, they also picked a few big losers. This caused the variance of the Rule Breakers stock picks to be higher, which most investors don’t want. The risk with Rule Breakers is that if you aren’t disciplined, don’t have the cash, and don’t buy every stock when the they recommend it, you might miss out on a few of their best picks. Missing out on just 4 stocks over the 4 years could have brought the performance back in line with Stock Advisors’ return.
The Stock Advisor service is more focused on well-known stocks and is more oriented for investors who prefers lower volatility. On the other hand, the Rule Breakers service has much more volatility and is focused on companies with high growth potential.
The Stock Advisor service offers 12 stocks per month and the Rule Breakers offers 12 stocks per month. It is also important to note that both services are made up of a team of expert analysts at The Motley Fool.
Rule Breakers vs Stock Advisor
- Over the 6 year time period from January 2016 thru 2022, the Rule Breakers stocks picks have outperformed Stock Advisor’s picks.
- Based on my experience, Rule Breakers delivers exactly what they say. Over these 7 years, almost a quarter of the picks (37 out of 168) have more than doubled.
- On the down side, Rule Breakers has picked some big losers each year. So, what you see, is the greater returns and greater volatility with Rule Breakers. So if you are going to subscribe, you should make sure you buy every stock they recommend, because you would hate to miss out on those that double or triple.
Read more about Motley Fool’s Rule Breakers vs. Stock Advisor review here.
Rule Breakers New Subscriber Offer: Try it now for just $99* and get the next 12 months of their stock recommendations PLUS immediate access to all their recent stock picks.
Risk Assessment in Rule Breakers: What You Need to Know
This Motley Fool Rule Breakers review would not be complete if I did not discuss the downside. Just like anything in life, there are risks.
The Motley Fool Rule Breakers service has much more volatility than the Stock Advisors service due to its focus on growth companies.
When they get it right, their stocks skyrocket as you saw above. And when they get it wrong, they pick some real losers. During these 6 years, they have had some big losers down 60, 70 and 80%. And THAT is why I keep reminding you that you should buy equal dollar amounts of ALL of their recommendations.
In fact, we see that each year for the last 6 years, the Rule Breakers BEST STOCK PICK percentage return is higher than the Stock Advisor’s Best Stock Pick return. BUT, we also see that Rule Breaker’s WORST STOCK PICK percentage return is worse than the Stock Advisor’s Worst Stock.
They say that they try to find companies that “are poised to become tomorrow’s market leaders”. They are usually right, but each year about 5 of their 24 stocks have been losers.
Overall, however, the average return of The Motley Fool Rule Breakers 24 stock picks for 2016 and 2017 and 2018 and 2022 is better than Stock Advisor’s. For 2021 and 2019 the Rule Breaker’s picks are just a little behind.
The Rule Breakers service performs so well because it looks for stocks with unique investing criteria:
- They look for top dogs and first movers in important emerging industries.
- They seek out companies with sustainable advantage gained through business momentum, patent protection, visionary leadership, or inept competitors.
- Hone in on strong past price appreciation, because the best growth stocks continue rising. Their advantages allow them to sustain remarkable earnings and cash flow growth and to win new converts among the ranks of investors.
- They Look for good management and smart backing.
- Hunt for strong consumer appeal, often in the way of a strong brand that can reinforce itself and make sustaining extraordinary growth that much easier.
The Rule Breakers service pointed out a couple of stocks before they were mainly known to Wall Street investors. Here’s a couple of examples:
I am sure you have heard of both of these stocks. Now don’t you wish you would have purchased them years ago?
I started testing the service and so far, so good. You can read more on our best stock newsletter review !
Other Noteworthy Features: Motley Fool Rule Breakers
The “Rule Breakers Community” page allows you to communicate and share ideas with other Fool members. Like you, these members all have a general ambition to invest, better. To make things easier, the site has company-based discussion boards. This is exclusively available for premium Motley Fool members, which includes subscribers of Rule Breakers and Stock Advisor, for example.
The “About Rule Breakers” page contains all the resources to get the most out of The Motley Fool’s Rule breakers. As an example, you can find more information on their risk ratings and how their it is defined.
The Motley Fool Rule Breakers podcast: “Rule Breaker Investing”
Each week David Gardner, co-founder of The Motley Fool shares his insights into today’s most innovative and disruptive publicly traded companies — and how to profit from them by following his signature.
David is a very successful stock picker and is highly esteemed in the finance community. Every week, David shares his ideas on today’s most innovative and disruptive public companies. He also advises on how to profit from them using his “Rule Breakers Investing” principles.
In an episode of David’s podcast (< https://www.fool.com/podcasts/rule-breaker-investing/2018-10-31-october-mailbag-it-s-all-treats/>.), he opens with a Halloween story from his youth and explains some tricks on how to tackle the current scary market. He routinely responds to tweets that are posted on the podcast’s twitter page (@RBIPodcast).
For example, he recalled AOL’s glorious days and what happened in the early 2000s. For more information on what he learned by investing in AOL, click here.
How much does Motley Fool Rule Breakers cost?
The Motley Fool dropped the price of the Rule Breakers subscription in 2019. I have paid $299 a year for it since 2016.
BUT, if you are a new subscriber, they frequently run specials on this page…EXCLUSIVE OFFER: PAY
If you are a long-term investor with cash to invest each month, then you might prefer Rule Breakers over Stock Advisor. As of December 31, 2021 this service’s stock picks are beating the market as follows: their 2016 picks are beating the market by 607%, their 2017 picks by 277%, their 2018 picks by 97% and their 2019 picks by 37%.
So, the longer you hold them the better they are!
In order to get those returns, you should buy every single stock they recommend because in each year there is always one or two stocks that are up 400-1000% after 2 years. If you missed just one stock, you might not have had the same results.
As I mentioned in my review for Stock Advisor, an Investor must always do their own due-diligence. You should always do your own research to understand what the assumptions were behind a statement. You will learn not only how to analyze stocks, but also develop your own trading strategies. With that being said, I would suggest signing up and see for yourself how they perform. During the process, you will understand what to look for in an investment and ultimately, invest better.
Also, if you want more information on the Stock Advisor service, read my full review on the Stock Advisor service.
*Motley Fool Rule Breakers returns are 191% as compared to the S&P 500 returns of 98% as of 11/11/22. Past performance is not a guarantee of future results. Individual investment results may vary. All investing involves risk of loss.”