Is Motley Fool Rule Breakers Worth It? (2022)

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So, are you thinking about whether you should join Motley Fool Rule Breakers?

Is Motley Fool Rule Breakers legitimate?

And can it really help you improve your investment returns and make money from the stock market?

Is the Motley Fool Rule Breakers subscription really worth it?

Are there better alternatives out there?

These are all valid questions that you ought to ask before you decide to commit to a stock picking service because you could be investing your hard-earned money in some of the stock recommendations they make.

In this Motley Fool Rule Breakers review, I am going to share with you everything after trying out Motley Fool Rule Breakers myself, so you can make an informed decision.

What Is Motley Fool Rule Breakers?

Motley Fool Rule Breakers is 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.

Who is David Gardner?

David Gardner is one of the three founders of the Motley Fool, one of the leading stock analysis and research websites in the world.

He started Motley Fool together with his brother Tom Gardner almost 30 years ago.

Also, they wrote a few best-selling investment books:

• “The Motley Fool Million Dollar Portfolio: How to Build and Grow a Panic-Proof Investment Portfolio”

• “The Motley Fools Rule Breakers Rule Makers: The Foolish Guide To Picking Stocks”

• “The Motley Fool Investment Guide: How The Fool Beats Wall Street’s Wise Men and How You Can Too ”

• “You Have More than You Think: The Motley Fool Guide to Investing What You Have”

Motley Fool Rule Breakers Investment Strategy

So, what is the investment strategy behind all the Motley Fool Rule Breakers’ stock picks?

The Motley Fool Rule Breakers investment strategy is focused on uncovering the hidden gems in the stock market.

So, it’s not the mainstream stocks (i.e. IBM and Apple) that everyone is following, but little-known stocks that have great potential to be the market leader in the future.

Think “Amazon” and “Netflix” that was recommended by Motley Fool Rule Breakers many years ago.

So, how exactly does the Rule Breakers team find these “hidden gems”?

What is their investment strategy?

What do they look for in a high-growth stock?

Here are the five things that they look for in a good growth stock:

• Innovative Company (i.e. it must be an innovative company that is making waves in emerging industries)
• Competitive Advantage (i.e. it must have competitive advantages over its competitors. For example, patents,  proprietary technology and etc)
• Sustainable Business (i.e. it must be a business with good long-term prospects and are unlikely to get disrupted by new technology)
• Good Management (i.e. it must have a good management team and strong leadership)
• Strong Consumer Appeal (i.e. it must have strong branding and strong customer interest)

For almost 20 years, Rule Breakers’ investment team has been making stock recommendations based on these sound investing principles.

Just recently (June 2021), David handed over the reins to his Rule Breakers team who have been working alongside him for a very long time and actually have been doing most of the Rule Breakers stock picks.

So, I think you would be in good hands.

Now, where do they find these high-growth stocks?

Generally, these growth stocks will be stocks that fall into the following categories:

• Stocks in emerging countries (e.g. China, India, South Africa, South Korea, Mexico, Thailand, Indonesia, etc)
• IPO stocks (i.e. newly listed stocks on the stock exchange )
• Stocks in fast-growing and emerging industries (i.e. Cyber Security, Big Data, Cloud Computing, 3D Printing, etc)
• Stocks of future technology companies (e.g. Internet of things, 5G, Artificial Intelligence, Blockchain, etc)

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Motley Fool Rule Breakers Stock Picks

Let’s see how the Rule Breakers team applies their investment strategy in real-life.

One of their favorite places to find high-growth stocks is IPOs.

In 2009, when ShockWave Medical went IPO in March 2019.

Motley Fool Rule Breakers recommended it in April at the price of $38.54.

Right now, the share price of ShockWave Medical is $209.90, which gives you a return of 444.63%.

Why did the Rule Breakers team recommend this stock?

The team thinks that ShockWave has developed a unique technology for safely breaking up calcium in arteries.

It radically improves the treatment of the calcified arterial plaque that causes cardiovascular disease, giving it the potential to upend a multi-billion-dollar market.

Given the shortcomings of alternative procedures, the team believes that ShockWave has a great chance of finding a large opportunity and perhaps even becoming the new standard of care.

With a market cap of just 880 million at the time of Rule Breakers’ recommendation, the team thinks there is a long way up if ShockWave gets even a fraction of the multi-billion-dollar market.

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Motley Fool Rule Breakers Performance

When you choose a stock picking service, one of the most important things that you should consider is their track record.

So, how have Motley Fool Rule Breakers stock picks performed over the years?

Can it really help you beat the market?

Below is the performance comparison between Rule Breakers and S&P 500 as of 3rd June 2022.

As you can see, Motley Fool Rule Breakers  beat the market by almost 2 times.

Now, what about the performance of each individual stock pick?

So, let’s take a look at the performance of individual Rule Breakers stock picks.

As of 7th April 2022, there are 125 stock recommendations with more than 100% returns. 

Here are some examples of Rule Breakers stock recommendations:

• MercadoLibre: 5,589%*
• Tesla: 14,656 %*
• Shopify: 39,116%*
• The Trade Desk: 16,918%*
• Intuitive Surgical: 5,232%*
• Meta (Previously Facebook): 1,143%*
• Etsy: 979%*
• Hubspot: 514%*
• Monster Beverage: 1,441%*
• Universal Display: 1,464 %*

[*Returns as of 27th Jan 2022 since it was first recommended. Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]

Let’s take a look at one of the stock picks.

MercadoLibre is a formidable e-commerce operator in Latin America, offering an online marketplace and related services, like e-payments.

Would I have noticed MercadoLibre by myself?

I am really not sure because I don’t use any e-commerce platform in Latin America.

Would I have bought MercadoLibre shares by myself?

I highly doubt so because I cannot possibly follow every industry and every emerging market.

That’s exactly why I joined the Motley Fool Rule Breakers.

Because I don’t want to miss any great high-growth stocks, especially those from emerging markets and emerging industries.

So, if you are looking for the next ten-bagger stocks (i.e. at least 1,000% return), then I would highly recommend Motley Fool Rule Breakers.

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Motley Fool Rule Breakers Vs S&P 500 For Past 6 Years

If you had followed Motley Fool Rule Breakers’ recommendations since its inception, you would be looking at very substantial investment returns.

What about investors who joined Rule Breakers in the past 5 years (from 2016 to 2021)?

Have they benefited from its stock recommendations?

	Rule Breakers Average Return	S&P 500 Average Return	Rule Breakers Picks that Doubled or more	Rule Breakers Picks that Tripled or more	Rule Breakers Picks that Quadrupled or more	Max Return	Min Return
2016-2021	150%	67%	43	28	20	3611%	-92%

[Note: the data is as of March 2022. Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]

Out of all the 144 stock picks in the past six years, the BEST performance is 3611% while the worst performance is -92%.

So, you can see that while you can achieve massive returns as high as 36 times, the downside is that the losing picks can go down by a lot as well.

This is true for high-growth stock investing.

With high returns, it also comes with high volatility.

So, how do you effectively manage your risks when you invest in high-growth stocks recommended by Rule Breakers?

One way is to spread your investments across as many different stocks as possible.

If you don’t have the money to invest in all the Rule Breakers stock picks, you can choose to buy the stocks with lower risk ratings.

For all the Rule Breakers stock picks, they will go through a “Crushability” test.

So, what is a crushability test?

Every “No” answer to one of their risk questions is a point.

The fewer points a stock accumulates, the harder they believe it will be to crush under the pressures of doing business in an unpredictable world.

Number of “No” answers	Crushable like a…
0-5	Diamond
6-8	Marble
9-11	Jawbreaker
12-14	Coconut
15-18	Glass bottle
19-25	Egg

For example, if you are a moderate risk-taker, then you should avoid stock picks with a risk rating of 15 and above. Depending on your risk preference, you should always choose the stock recommendations that match your risk profile.

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Why I Subscribe To Motley Fool Rule Breakers

Rule Breakers stock picks are all high-growth stocks with very high volatility.

In other words, the gain can be very attractive but at the same time, the loss could be big as well.

If there is a bear market like just now, you would see that quite a number of recommended stocks are down for the year 2022.

However, there is also another way to look at it.

The bear market gives one of the best opportunities for investors to load up on good stocks at a very cheap price.

Why?

Markets go up and down.

Stocks would eventually recover after some time.

Of course, you should also remember there are always risks involved in investing, especially in high-growth stocks.

I am fully aware of the potential risks as well as the potential rewards, so I am only allocating a small part of my investment portfolio to these high-growth stocks.

By a small part of my investment portfolio, I mean less than 10%.

Why do I want to have some exposure to highly volatile high growth stocks?

The main reason is that I am looking for the next 10 baggers or even 50 baggers (e.g. next Amazon).

One of the best ways to get many potential high-growth stock ideas is by subscribing to Rule Breakers.

Did you know that if you had invested $1,000 in Amazon.com 20 years ago, you would have approximately $218,793.08 today?

Your downside is just $1,000 (if Amazon goes bankrupt) while your upside is unlimited.

I simply love this idea!

If you are looking for high-growth stocks with potential massive upside potential, I highly recommend that you try out Motley Fool Rule Breakers.

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Check out the latest promotion for NEW Motley Fool Rule Breakers members here

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What Do You Get From Motley Fool Rule Breakers Subscription?

Now, let’s see what is included in your Motley Fool Rule Breakers subscription:

• You will receive two stock recommendations every month, as well as their monthly “Best Buys Now” from Rule Breakers’ investment team
  • On  the first Thursday of the month, you will receive your first stock recommendation
  • and on the second Thursday, you will receive the first 5 New Best Buys Now
  • On the third Thursday, you will receive a second 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 Breakers 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, you don’t have to worry about when you should sell your stocks.

This is a very important factor to consider when you choose a stock picking service.

Here’s why.

You DON’T make money by just buying the stocks.

You only realize a profit when you SELL the stocks.

So, you have to know when to buy and also when to sell it.

That’s also why I like Motley Fool because its stock-picking service is much more than just recommending the best stock to buy right now.

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Try out Motley Fool Rule Breakers For 30 Days Risk-Free

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So, how much does it cost?

Motley Fool Rule Breakers‘ annual subscription used to cost $199 per year.

But, right now, it is just $99 a year to join Motley Fool Rule Breakers as a new member, which is just $1.9 a week.

Is Motley Fool Rule Breakers worth it?

For $1.9 a week, personally I think it’s a steal.

Both Rule Breakers and Stock Advisor have recommended Amazon before.

The difference is that Rule Breakers recommended Amazon much earlier than Stock Advisor when Amazon was still in its early growth stage and when e-commerce was just starting to gain popularity.

But, both Rule Breakers and Motley Fool Stock Advisor‘s subscribers who took their stock advice have made a lot of money if they hold it until now with Rule Breakers subscribers seeing much greater returns with their investment.

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Check out the latest promotion for NEW Motley Fool Rule Breakers members here

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Conclusion

So, I think that Motley Fool Rule Breakers is great if you have extra funds for risky stock play and are looking for high-growth stock recommendations with potentially massive returns over the long term.