What’s Tom Gardner’s Moneymakers Teaser Pick in Specialty Insurance?

What's the teaser pick hinted at over the weekend in ads for Motley Fool Discovery: Moneymakers ads?

By Travis Johnson, Stock Gumshoe, April 26, 2021

The pitch I checked out over the weekend for Motley Fool Discovery: Moneymakers is a little bit bear-market focused…

“Motley Fool CEO Tom Gardner shows you exactly what stocks to buy in a downturn…with $1 million on the line! ….

“… for the first time in 10+ years, we’re not in a bull market anymore.

“The last few months have rocked the stock market, the economy, and our entire country.

“Parts of the U.S. are experiencing some kind of lockdown, business has plummeted across the country, plunging many into ‘demand shock’… the sudden drop in demand for goods and services.

“Causing waves of uncertainty about the economy and the stock market.”

I don’t know when that was written, but it feels a bit more like November 2020 than April 2021.

Regardless, what is it they’re pitching with this Moneymakers service? I don’t think I’ve ever written about this one, but it’s one of the many Discovery “portfolio” services from the Motley Fool — instead of getting a newsletter once or twice a month, and a historical portfolio of hundreds of stocks from a big newsletter like Stock Advisor, you get a more targeted portfolio of 10-25 stocks along with regular updates, additions and subtractions, and usually some more specific guidance about portfolio allocation. You also pay a much stiffer price, in this case $1,300 for the first year, and don’t get a refund guarantee like you would with Rule Breakers or Stock Advisor or their other “entry level” newsletters.

Unlike the “Extreme Opportunities” portfolio services that are usually offered at about the same price (retail is $1,999/yr), this one is not a sector portfolio (those Extreme ones focus on entertainment, AI, fintech, etc.), but is more focused on one of Tom Gardner’s favored strategies.

For the cynical, it might seem like they’re spreading the Gardner brothers ever thinner, probably because they’re the only “name” folks at the Fool who really drive attention — if you want to follow the kinds of stocks Tom Gardner buys personally or for the Motley Fool, your first thought would no doubt be the Stock Advisor newsletter, where Tom and his brother David each endorse one stock per month. That’s typically pitched at $49 for new subscribers, but the upgrades from there are numerous… you can focus on founder/owners in the Discovery: Ownership Portfolio ($1,999) or Discovery: Partnership Portfolio ($1,999), his “best of the best” stocks in the Discovery: Everlasting Portfolio ($2,999) or Discovery: Everlasting Stocks ($299), his Motley Fool One ($13,999!) that gives access to all of the services and exclusive access to some stocks … or, now, this Discovery: Moneymakers service ($1,399, presumably renews at $1,999) that uses a “Buffett-inspired” strategy.

Upgrades and high-end portfolio services are where the money is, so I guess that’s no surprise, but it’s still a lot of newsletters and portfolios to oversee (to be fair, as I count, Gardner still falls far short of Paul Mampilly’s record over at Banyan Hill, I believe Paul is now selling 10 different services… if you’ve seen someone with even more than that, do please give a shout).

But anyway, what do they mean by that “Buffett-inspired” strategy? Here’s how they put it…

“Moneymakers is The Motley Fool’s first and only solution centering around what Warren
Buffett has declared his #1 investment factor

“The strategy Tom Gardner has used to create Motley Fool Moneymakers is one that the greatest investor of all time and one of the richest humans in modern history, Warren Buffett, has made a staple of his entire career….

“Warren Buffett says he judges businesses and investments on one thing…

“It’s not the CEO…

“It’s not the share price…

“It’s not their price-to-earnings ratio…

“It’s their ability to raise prices and control the market.

“Here’s Buffett in his own words:

‘The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business….'”

Can’t argue with that. And since everyone is on pins and needles a little bit about future inflation fears, we should note that “pricing power” is probably the single best strength a company can have during a burst of inflation — if you can raise prices faster than your costs are rising, inflation need not be a terrible weight on the income statement.

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But I’ve gone off on a tangent a bit, I’m afraid… there was a tease in there, not just a sales pitch for a newsletter — the Foolies have an insurance stock to hint at, and yours truly is a sucker for insurance stocks… so let’s dig in and see what it is they’re teasing… this is from one of their Market Pass emails over the weekend…

“DISCOVER ONE OF OUR BEST STOCK PICKS THAT EARNED OVER $400 MILLION IN LESS THAN A YEAR!

“For some businesses, getting insurance is nearly impossible!

“I mean, can you imagine how difficult it is for a mining company or even a commercial aviation company to get insurance to fly airplanes across the globe? ….

“You see, these companies are deemed too risky by many insurance companies because they carry excess risk. Th