Author/Editor
Dave Gardner
Publisher
Motley Fool
Description
Monthly newsletter that looks for rapid growth stocks, usually smaller capitalization companies. “Rule Breakers” are typically “first mover” or “top dog” companies with rapid growth rates that conventional analysts consider very overvalued.
Overall Rating
Rating: 3.7/5. From 105 votes.
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3.7
Rating from 504 votes
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Investment Performance
Rating from 158 votes
Rating: 3.8/5. From 158 votes.
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- 5 Stars 54 Votes
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Quality Of Writing/Analysis
Rating from 115 votes
Rating: 3.7/5. From 115 votes.
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- 5 Stars 31 Votes
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Value For Price
Rating from 126 votes
Rating: 3.4/5. From 126 votes.
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- 5 Stars 33 Votes
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Customer Service
Rating from 105 votes
Rating: 3.7/5. From 105 votes.
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I subscribe to PRO, Stock Advisor, Million Dollar Portfolio, Global Gains, Hidden Gems and Rule Breakers and will post this review on all the sites. In general I found the letters useful for ideas in an up market, but not terribly helpful in our current down market. I found some excellent companies like DWSN, EDU & CTRP that I would not otherwise have looked at. Sell recommendations usually come too late and analysts tend to fall in love with stocks and catch โfalling knivesโ. For example the repeated recommendations of Select Comfort, Irwin Financial, First Marblehead all the way down and then the final sell recommendation at much lower prices that had been recommended a few months earlier. There seems to be a reluctance to say do nothing and wait. Recent recommendation after recommendation is substantially under water.
In general Fool is an excellent source of information on a wide variety of financial subjects and the authors seem to be competent and professional. โThe Boardsโ can be a useful source of information and opinion, however slogging through them is tedious because there are a lot of junk postings wherein people tell the reader what they are buying (not why) and criticizing other posters, a situation that breaks into a brushfire that overwhelms a posting site for a day or two.
Unfortunately the web sites for each of the portfolios, while consistent on a stand alone basis, are a total mess when one subscribes to several newsletters. Each letter ranks performance differently. No letter as far as I can ascertain includes dividends in calculation returns, a substantial flaw in assessing the performance of a stock.
The โcafertiaโ approach of the newsletters is also annoying โ the same stock may be recommended in two different newsletters and checking the boards requires going to three different boards to get updates. The non-subscriber board and then each of the two different subscriber boards.
All in all I do not believe that the price of any individual newsletter, each of which is a niche letter, is worth it unless one is a substantial investor, as am I, although far less substantial than a year ago. I am not going to renew any of my newsletters, except PRO which I like because it discusses options.
All in all Fool is pretty good, but it presents a conundrum. The service is intended to educate unsophisticated investors, at which it does a good job, but it is so expensive as a percentage of assets that unless a subscriber has several hundred thousand of dollars to invest they would do better in a basket of index funds. I would recommend that a new investor without a substantial portfolio subscribe to one of the services for a year or two to get some education and then go on to one of the many free sites that provide all sorts of ideas and their own boards.
I just ended my year subscription, and was sad to have to cancel it. I don’t have the money to invest in all the ideas I already have. Their newsletters are a great read, the recommendations all solid companies, not penny stocks or anything. A lot of them are biotechs, also technology and consumer products and services. Not every stock has performed well, but most have vastly outperformed the market. I love the RB community forum and the CAPS ratings, too. I’ve tried 4 of the Motley Fool subscriptions (Hidden Gems, Rule Breakers, Global Gains and Option Advisor) and loved them all.
I am fairly new and enjoy the advice to search out stocks that interest you in some way so it will be fun to follow. My stocks based on their picks are doing quite well.
I joined Rule Breakers but quit after one year. I
joined because of the market beating performance claimed by the service and I believe that is true provided you can afford to buy every one of their recommendations. I however have to pick and choose so I bought 5 of the stocks recommended that year and earlier (you get to see all previous reports). I gained on 2 lost on 3 and am still holding a modest gainer and a BIG loser.
I concluded that its just not worth the annual fee.
Great ideas and write-ups. The problem with “cafeteria” type letters is that YOU do all the work. Sure they suggest comments by other subscribers, but that is NOT what I pay for. Research is on you. Best buys now usually put you under water. 200 + stocks is too much to chose from, especially when majority of stocks underperform the market on a 1 yr. basis.
Also, no real target price for the recommendation. Let’s take NFLX. No real guidance for the stock just before the big rally. Only “so & so reader really likes it”. I want David or Tom’s personal opinion, not another subscribers’. They are wrong as much as they are right. Not a good investing strategy.
It’s a great letter if you want to do tons of research yourself. So why buy a letter if your doing the research anyway???
Rule Breakers has improved a lot over the past year. Although almost all subscribers think that the quality of the stock picks is high, many were unhappy about a lack of follow up on the picks.
TMF Rule Breakers has done a number of things to address this. Here are two of the most important: Whenever one of their recommended stocks is up or down by around ten percent, a knowledgeable member of staff writes an article on the cause of the movement.
The most important change is that they have now assigned “ticker guides” to all boards. His or her responsibility is to post on the board a lengthy analysis of quarterly earning reports and on other important news affecting the stock. Since this practice has begun, the boards have become much busier and, since it is a premium service, you don’t find any idiots there.
To update 15 months later, my original enthusiasm for Rule Breakers was that just after I joined they put me onto Ambarella, a video chip maker I had never heard of, at 28.50 and two years later I sold half at 93 and the rest at 123. A two year quadruple. At about the same time I jumped into Facebook at just under $30. Another two year quadruple, but I still own these shares.
The service has been pretty cold the last two years, and in fact lost a lot of subscribers a lot of money with its big premature pushing of 3D printing. (But not me.) A problem is that TMF has so many new services, most pretty costly, that there is not enough David Gardner to go around and many picks come out under the name of a staff member or the combination of David and a staff member. This may be one of the reasons that Rule Breakers has cooled off. I check to see which stocks David personally owns, which is disclosed.
Post-recommendation improvements now include use of Sell and Hold on prior recommendations.
I think that it’s a good service for the money.
I did join, after doing my own investigation on a couple of their teasers – this was before I know about the gum shoe. The net is I bought NVDA at $25, now $153, and AMT at $45; now $132. Those two alone pays for a lot of $49 dues.
They give you ten buys but one of them might make money in five years the others take a lot more time if you want to tie up your money for 8 to ten years then go for it
I think The Motley Fool does a fantastic job of advocating for diversified, long term, value investing,- always. Of course they send out “teasers” to get folks attention, but I have been very impressed with all their analysis and the different products they offer. If you spend any time with them, they readily admit where they got an investment thesis wrong, and they are clearly stating risk factors, potential value, and what could go wrong with a stock. They have handily beat the market- by a very solid margin- in all five of their stock picking advice services. The Rule Breakers service has currently (August 2017) outperformed the s&P 500 by more than 61%. With each service, they explain the goals of that service, so you can see if your investing style is aligned with their “product.” As several articles from different publications have pointed out, most gains are in fact achieved from your biggest winners, and hanging on to those winners unless there is a reason to sell. So it is no surprise this is also true for Rule Breakers service as well. Also true for their Stock Advisor service, and their Hidden Gems service… it’s just math. (I’m sure they would love to see their returns if they could remove their biggest losers !- I would)- I’m very grateful for Motley Fools education and investment advice. They have made investing fun for me. I’m also grateful to Stock gumshoe ’cause those teaser ads are so compelling…sometimes I just gotta know!
I’ve followed the Fool for years, and admit that they taught me much of what I know about investing. I still use their glossary when I come across terms I don;’t recognize, or to refresh myself on financial analytics.
This year, I had some disposable income and took a leap into Stock Advisor and Rule Breakers –and use the recommendations to fuel my Roth IRA. It’s limited to the annual contribution limits, so I’m carefully selecting which stocks fit my personality (buy what you know). So far, can’t complain — beating all the major indexes, 25.6% growth in 7 months.
I’ll happily take those returns; I can safely say that it has paid for itself.
I have subscribed to Rule Breakers, Million Dollar Portfolio, and Stock Advisor but find, by far. the best value in Stock Advisor.
I paid extra for rulebreakers, but was always mailed to me two weeks or more (ie, two months) late. Also, none of the picks I bought ever paid off much, and most lost money.
Love rule breakers Have made about 40% + the last 6 months. Very easy to understand. Simple methodology.
I have been with Motley Fool for about 4 yrs now. I spent one yr on Fool One, which is quite expensive for my limited
portfolio. ( I did this to go to events, and ask specific questions of one of there wealth advisers ) which was cheaper than
paying directly for advice on this level. Back to the services. Now I just take Stock Adviser and Rule breakers. I pick through the company’s offered, some I watch for a couple of years, some I buy out right. Some are not for me. Stock Adviser is a lot more solid on what they chose, and those picks seem to do better more often. Rule Breakers are longer
shots, but often have more fast growth potential long term. You got to watch all these, there are some big clinkers, and
I do not wait for a sell from MF if the bottom seems to be dropping out. Go’s for both services, Rule Breakers for sure.
The stock research is better than my own, I do not spend the time working it hard with a wide filter. I bought Ambarella
around 24, scaled up in little bites as it went up, and stopped out around 11o. This made me just under 81% in under a year. That one alone paid for all my fee’s. Getting a feel for when to bail on a bad idea stock cost me, till I worked out
a stop loss point I was comfortable with. Another plus for me is the discussion boards, where I have picked up some ideas about tools that have helped my investing. and understanding of stocks in general. Bottom line, I am beating
the old full service brokers I used to be with by a long shot, and having a lot more fun at it. There was a learning curve
as I adapted my own style to there recommendations, but the last two years have more than doubled my average roi. I was not too hot to begin with, tho.
I subscribe to Rule Breakers and Stock Advisor and consider both well worthwhile–I especially respect David Gardner’s advice
I guess it is good for big moneyed investors who buy and hold. I enjoyed the read of the newsletters but it’s not for me.
The idea of collective intelligence is appealing, and their review of the financials is helpful. This has lead to strategies that often, but not always, work. They were my ‘starter engine’. I still think it is a good place to start. With learning, I no longer feel the need to use the service. Besides, Stock Gumshoe really provides the cautionary essentials I need to make a better, sober, analytic decision. I consider this service like a PBS station-serving the public good through shared lenses-keep up the good work !
I subscribed to Stock advisor and Rule Breakers but cancelled at the end of the trial period. From their entry list of stocks and the 4 new recommendations promised, it became clear that the services are intended for investor with at least $10K to invest. At the stock prices, my meager $2K isn’t enough to buy enough shares of enough companies to be worthwhile.
Stock advisor is even better. I think very highly of Motley Fool. Even supernova.
I do not think highly of Weiss Edelson โstuffโ
And I think they cheated when they knew Larry Edelson was dying but continued to take money for their services
I’ve bought their Rule Breakers and Stock Adviser over the years and like their analyses and their apparent lack of hype (except in the ads), but have never made money on their advice, probably because I didn’t follow their advice on how to setup your portfolio with their core choices. As someone commented earlier, you’d have to buy a fairly large number of their picks, and stay with them a fairly long time to come out ahead (spectacularly as in Netflix and Amazon) and that strategy doesn’t match my personal objectives. Congratulations to those commenters above who wisely or luckily chose only winners.
Their analyses are compelling but sometimes too enthusiastic, especially in their search for high-tech early-stage growth stocks. There are just too many technological and competitive risks in high-tech (as also in biotech) to bet on an early-stage company because those stocks come with a lot of volatility and high failure rates. That’s not just a casual opinion, as I spent most of my career in the computer business, where a few wrong R&D decisions or management ignorance can easily cause a wreck. (Luckily the companies I worked for didn’t fail before they were bought up by bigger fish). It’s wise to allocate only a small portion of portfolio to them even when the companies are financially solid and well-managed.
When those companies are well into maturity and have achieved a wide moat, as for instance Microsoft, Facebook, or Nvidia have, then there can still be 25% to 50% a year growth left with much less risk.
For example, being a born optimist I recently bought one of Dave Gardner’s software publisher recommends with his (or his writer’s) admonition “don’t worry about the price, it’s a long term winner”. It immediately dropped 25% the next day and hasn’t gone anywhere since. Obviously my own fault for not researching more dilligently; now I’m stuck in it for a while. I admit they do carefully explain the risks in each recommendation but you have to water down their enthusiasm and consider even more uncertainties before you buy.
In any case they’re a good , honest source of information and education and worth the money for the lower priced newsletters.
Did you happen to find a service that offers quicker returns? I have a long term portfolio but I like to dabble in high risk and am looking for a service that helps with choices.
Does anyone know of a service that does that, penny stocks included and has a fairly decent track record?
I am much like you, and I have enjoyed Matt McCallโs Early Stage Investor. It is not cheap, but I have already made several times the cost in a couple of stocks that really took off. This is definitely not for everyone, but it satisfies my moon shot cravings!