What Are David Gardner’s Stock Picks? (Performance Analysis Inside)

DISCLOSURE: THIS POST MAY CONSTAIN AFFILIATE LINKS,MEANING I GET A COMMISSION IF YOU DECIDE TO MAKE A PURCHASE THROUGH MY LINKS, AT NO COST TO YOU. PLEASE READ FULL DISCLOSURE HERE

What are David Gardner’s stock picks?

Exactly how does David Gardner pick his stocks?

Most importantly, how have his stock picks performed over the years?

If you don’t already know who David Gardner is, he is one of the founders of the leading financial and investing advice company Motley Fool. 

With over 30 years of investing experience and a few best selling stock investing books, he is one of the most recognized experts in the investing community. 

David Gardner Stock Picking Principles

So, how does David Gardner pick stocks?

What investment principles does he follow?

When it comes to stock investing, David Gardner always goes for companies that have huge growth potential and are going to the market leader in the next 10 years. 

Yes, he invests for the long term because that’s how the best investors such as Warren Buffet and Peter Lynch make money through investing. 

So, you won’t see him sell the stocks after it has gone up 20% or 30% percentage in one year, you might not see him sell the stocks even after its price has gone up for 100% as long as he believes in the business’s fundamentals. 

Did you know that one of David Gardner’s most successful stock picks is Amazon?

He recommended Amazon when it first went IPO. 

Over the years, he recommended Amazon a few times again in both Motley Fool Stock Advisor and Rule Breakers.

Now, let’s take a look at Amazon’s share price chart:

Its share price just kept going up and up for the past 20 years. 

If you are a Motley Fool Stock Advisor subscriber and bought Amazon after he recommended it, then you would be looking at a massive 15,583% return. 

And David Gardner did it again with his Netflix (up 17,622%), Shopify (389%), Tesla(up 2,505%), Intuitive Surgical (up 3553%), Zoom (95%) recommendations. 

Now, let’s see what he is looking for in a company before investing in it.

Key Trait #1: Top dog & First Mover In Important Emerging Industry

David Gardner believes that you should always look for companies that are market leaders (based on market cap or revenue) in important emerging industries. 

As the biggest player in the industry, it has a lot of natural advantages over its competitors.

For example, it has more pricing power because of its market share and also tends to have more capital to help it ride through the economic downturn better than smaller players in the same industry.

Now, what are the emerging industries?

And why emerging industries?

Emerging industries are completely new industrial sectors that are growing at a rate faster than the overall economy.

Such industries usually come into being when customers need change, new technologies replace older ones, or when new socio-economic conditions emerge.

Here are some examples of emerging industries in the world right now:

• Cybersecurity
• Robotics
• Artificial Intelligence
• Blockchain technology
• 3D printing

David prefers emerging industries because it has the highest potential to give you massive returns in the long term. 

About 10 to 15 years ago, e-commerce was a completely new and emerging industry. 

Key Trait #2: Sustainable Advantage ( Patent Protection, Visionary Leadership, etc)

It must have sustainable competitive advantages over its competitors. 

Sustainable competitive advantages are company assets, attributes, or abilities that are hard to surpass, and therefore puts the company in a favorable long term position over competitors.

So, what are some examples of sustainable advantage?

Visionary leadership is one good example.

Apple is what it’s today all thanks to the visionary Steve Jobs who revolutionized six industries:

• Personal computers
• Animated movies
• Music
• Phones
• Tablet computing
• Digital publishing

Other examples include patents, branding and cost-efficiency.

Key Traits #3: Good Management Team

When you invest in a business, you want to make sure that the business is run by competent people. 

Why?

Because they are the decision-makers of the company and runs the day to day business. 

For example, what new products should they launch?

How do they position their products?

How do they distribute the products? 

How do they price their products?

There are so many important business decisions for them to make.

At the end of the day, whether or not the business will do well, it very much depends on those business decisions. 

Key Traits #4: Businesses that solve real-world problems at scale

It also must help solve real-world problems and do it at scale.

One good example is Apple. 

It consistently comes up with great products to help make people’s lives better.

In the case of the iPhone, it’s so much easier to use and very fast to load.

It also allows you to stay connected with family and friends through FaceTime.

With iTunes, people can listen to their favorite music on the go.

So far, Apple has sold over 1.3 billion iPhones all over the world since its launch in 2007.

Since 2001, Apple’s stock price has grown by 15,000% making the company worth $1 trillion. 

That’s why you should always invest in businesses that can scale.

David Gardner Stock Picks For The Bear Market

Now, let’s look at some of David Garden’s stock picks in the past. 

In 2018 after the market has been on a bull run for almost 10 years, David Gardner picked 5 stocks to help investors prepare for the bear market.

Here are David Gardner’s five stock picks:

• Alphabet
• Amazon
• Apple
• Novo Nordisk
• Tencent

All of these five stocks are big-cap companies and industry leaders with a competitive edge in their respective industries. 

The reason behind his stock picks is that big cap market leaders with a very strong balance sheet and a lot of cash are better positioned to weather any economic slowdown.

Now, let’s see how these five stocks performed during the Coronavirus crisis. 

Alphabet: It has gone up by about 40% since it was recommended in 2018.

Apple: it has gone up by close to 100% since it was recommended in 2018.

Novo Nordisk: it has gone up by about 50% since it was recommended in 2018.

Tencent: It went down initially but it has since gone up to close to its peak in 2018.

Amazon: It has gone up by about 60% since it was recommended in 2018.

Out of the five stocks recommended by David Gardner for the bear market, four have gone up by more than 40% and the remaining one still stayed around where it was in 2018.

David Gardner’s Best Stock Picks (& David’s Rule Breakers)

Now, what are David Gardner’s best stock picks?

All his best stock picks come from Motley Fool Rule Breakers, one of Motley Fool’s most popular stock picking services.

It was started in 2004 by David Gardner to help people find market-beating growth stocks.

Here are just some of his best stock picks:

• Amazon: it’s up 15,295%
• Netflix: it’s up 18,410%
• Baidu: it’s up 1,097%
• Intuitive Surgical: it’s up 3,553%
• Tesla Motors: it’s up 2505%
• Shopify: it is up 389% 
• Zoom: it’s up 95%
• Okta: it’s up 421%

Now, let’s see how David Gardner’ stock picks measure up to S&P 500 in terms of returns:

Since its inception of Motley Fool Rule Breakers’ service, it has achieved a total return of 189% while S&P 500 had a 69% return over the same time period.

So, what’s exactly included in your Motley Fool Rule Breakers’ subscription?

Below is what you will get:

• You will receive two stock recommendations every month, as well as their monthly “Best, Buys Now” from David Gardner and his investment team
  • On  the first Thursday of the month, you will receive David’s stock recommendation
  • and on the second Thursday, you will receive 5 New Best Buys Now
  • On the third Thursday, you will receive David’s stock recommendation
  • and on the fourth Thursday, you will receive another 5 New Best Buys Now
• You will receive a real-time email notification when it’s time to sell, so you are never left wondering what to do
• You gain instant access to all the previous Motley Fool Rule Breaker recommendations 
• The Motley Fool’s Best Buy Now 
• The Motley Fool’s Starter Stocks (which is great for new investors who are looking for stock ideas to build their investment portfolio)

For all their stock recommendations, they will walk you through the buying case for a stock, spelling out exactly why a company might be a good addition to your portfolio, as well as the potential risks.

On top of that, they will continue to monitor and track the recommended stocks and send you updates whenever there is any.

When they decide that it’s no longer a stock that is worth holding, they will send you a “Sell” alert as well.

So, how much does it cost?