The Motley Fool is one of the most well known stock research sites.
And they have several of the most popular stock picking newsletters.
To promote these stock newsletters, they make fantastic claims like the following:
That ad says the Stock Advisor's stock picks are up 609% as of February 10, 2021 compared to the S&P500's 120%.
That's great if you have been a subscriber since 2002 when they started that newsletter. In the beginning, they picked stocks like Amazon and Netflix and Disney that have 10,000+% returns that skew their average return.
if you are now thinking about subscribing to the Motley Fool…
you should be more interested in how their 2020 and 2021 stock picks are doing!
The Motley Fool's 2020 Stock Picks
To test the Motley Fool services, in 2015 we signed up for the two most popular Motley Fool's newsletters:
- Stock Advisor (you can read our full review of the Motley Fool's Stock Advisor service here)
- Rule Breakers (you can read our full review of the Motley Fool's Rule Breakers service here)
Then, we opened 2 different Etrade accounts and started buying $1,000-$2,000 of all of their stock picks since January 2016.
Stock Advisor Performance
Here is how the Stock Advisor has performed for us from 2016 to 2020:
As of February 5, 2021, 8 of the Motley Fool's 2020 Stock Advisor stock picks have doubled:
- September stock pick of FVRR is up 135%
- July pick of CRWD (picked again) is up 108%
- June stock pick of CRWD is up 132%
- April stock pick of ZOOM (picked again) is up 179%
- March stock pick of SHOP is up 271%
- March pick of ZOOM is up 239%
- February pick of NVTA is up 124%
- January pick of TSLA is up 890%
Also, note these other amazing performance stats:
- The Stock Advisor's 2019 stock picks are up 141%
- Their 2018 selections are now up 231%
- Their 2017 are up 208%
- and, their 2016 picks are up 382%
So, while it is true that their overall average return is 609%, the average return of their last 5 years is 216% compared to the market's return of 56%. That means they are outperforming the market by about 4x.
Motley Fool Success Rate
As you can see above, the Motley Fool's Stock Advisor's success rate over the last 5 years is 87%. That means 104 of their last 120 stock picks are up. Most impressively, 57 of those 120 stock picks have doubled and 32% have actually tripled. It is because of so many stocks doubling and tripling that their average return for all 120 stock picks for the last 5 years is 213% compared to the market's average of 56%.
Rule Breakers Performance
Their newer and less well know subscription service is called their Rule Breakers. This service specifically looks for companies that “are poised to be tomorrow's stock market leaders.” Here is how their Rule Breakers service has performed for us from 2016 to 2020. You will note that their 2020 performance is not as strong as the SA performance:
As of February 5, 2021, as you can see from this chart above, 6 of the 2020 Rule Breakers have doubled and their 2020 stocks are up 88%.
Also, note these other amazing performance stats from their Rule Breakers service:
- The Rule Breaker's 2019 stock picks are up 199%
- Their 2018 selections are now up 235%
- Their 2017 are up 407%
- and, their 2016 picks are up 686%
Rule Breaker's Success Rate
As you can see above, the Motley Fool's Rule Breaker's success rate over the last 5 years is 91%. That means 109 of their last 120 stock picks are up. Most impressively, 69 of those 120 stock picks have doubled and 46% have actually tripled. It is because of so many stocks doubling and tripling that their average return for all 120 stock picks for the last 5 years is 323% compared to the market's average of 56%.
The Motley Fool's 2021 Stock Picks
The Motley Fool releases 2 stocks a month so far they have released 4 stock picks in 2021. The Motley Fool is strict about preventing websites from releasing their last few stock picks' ticker symbols, so I can only tell you their performance so far this year.
As of February 21, 2021 the Motley Fool Stock Picks 2021 are performing as follows:
- The first Stock Advisor pick of February, 2021 is already up 23%
- Their second pick of February is only 2 days old and is unchanged.
- The first stock pick in January is down 2%
- Their second stock pick is up 12%
- The two stocks LMND and COUP from December, 2020 are up 84% and 4%
- Stock picks FVRR and ZBRA from November, 2020 are already up 81% and 37%
- and their October, 2020 picks PINS and ADSK are up 92% and 21%
About the Motley Fool
They were founded in 1993 by two brothers Tom and David Gardner as a company whose stated purpose is to “make the world smarter, happier and richer.”
The are based in Alexandria, Virginia and have about 300 employees. They Stock Advisor service has over 700,000 subscribers and their Rule Breakers service has over 100,000 subscribers. The Stock Advisor retails for $199 a year and Rule Breakers retails for $299 a year.
Yes, the Motley Fool Stock Advisor has yielded fantastic returns of 600+% since inception in 2002 and over 200% since we started tracking it in 2016. No other stock newsletter comes close to those returns. Best of all, the price is only $99 per year for new subscribers so it is absolutely worth it. If you want to beat the market and have many stocks that double and triple every year, you should give it a try. Here's the 50% off link to their new subscriber discount page.
Their Rule Breakers service has actually performed better over the last 5 years, but their 2020 stocks did not do as well as the Stock Advisor service did. We also note that the variance of the Rule Breakers service is much higher. That means, if you miss out on buying just one stock a year from the Rule Breaker's service and that one stock happened to be their bigger flyer, then your overall results would be significantly less than their reported results. To learn more about their Rule Breakers, read this review. Bottom line, we recommend Stock Advisor for newer investors because of their longer track record.