Learning From Motley Fool Rule Breakers History

This is the series where we bring back Rule Breakers essays from the past, warts and all, to see what we were thinking, how things might have changed, and mostly, what we can learn going forward.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on January 03, 2024.

David Gardner: I got a secret for you. Actually, it’s a secret weapon for you. As an investor today, one word for you and no it’s not plastics. It’s history. It’s secret because most people don’t have much of it. They follow the many financial media outlets which through TV and social media, display and promote such a short term memory, quoting stocks minute to minute, throwing the bells and whistles of our attention at whatever has just happened. Well, as a Fool, I love to look back. The lessons we really learn, and earn are a consequence of observing and living through history measured in years, not hours or days. Well, for years I wrote short essays to kick off our monthly Motley Fool issues, snail mailed out to members. Well, today the Motley Fool is pretty much fully digital. We don’t do paper copies anymore, and we don’t do opening essays. But I put a lot of time into those essays, and they occurred over a long narrative arc of market history 2002 to 2017, 15 years worth of investing lessons in Motley Fool stock advisor and Motley Fool Rule Breakers. In this world of now, I say you and I start 2024 by getting smarter, happier, and richer today for the lessons than then essays from yesterday. Only on this week’s Rule Breaker investing.

Welcome back to Rule Breaker Investing. There it is, the sound of rules being broken, or maybe a window. You get to hear it once again as we kick off 2024, the 10th year of this podcast. We’ll actually celebrate our 10th in July of this year that’s when Rule Breaker Investing started. I bet I have some new listeners this week. A lot of people make New Year’s resolutions around money and investing, so if you’re new to the Motley Fool, I’m really glad that you’re getting to hear this particular podcast because it’s going to remind you of some of the eternal verities, some of the truths learned over years. I think something that I hope you’ll appreciate as a fellow fool is our interest in learning lessons that we can use going forward, but not just from the here and now, in this case from the past. Let’s get into it. Essays from yesterday, volume 5, that means this is the fifth in the series.

The previous episode was on February 1st of last year. A couple of ground rules about how this series works. I’m going to be looking back at four essays written in the past, and first of all, you should know I completely randomize which essay I’ll be sharing with you. I wrote about 270 of them over those 15 years, and I don’t know which number is going to come up ahead of time. Until we plan this podcast, I don’t know what I’ll be speaking about and I randomize it. Now, I wish I could cherry pick my best and favorite essays, but nope, it is completely randomized and I think that’s part of the fun of it. You get to see me make some real mistakes in terms of the stocks I’m mentioning. In some cases, you get to be strapped into the way-back machine. We’re here together thinking forward from distant perches in the past, thinking forward about where we are today. We get to look them up, we get to see how those stocks have done, we get to see how these thoughts have done, and we’re going to have some doozies both ways. The second ground rule is these are always presented in chronological order. From the earliest one I randomized to the latest. For example, the first of my four essays from yesterday, this go round was published in December 2005.

Eighteen years ago, speaking of which, Rick Engdahl, throw me some way back music as we go back in time, strapping ourselves into the time machine of essays from yesterday, we’re back now, alighting on the month of December 2005. Essay Number 1 is from Rule Breakers in December of 2005. It is entitled A Service, Not a Product. Each of these four essays is about 500 words, a short essay. Here’s Number 1, dear fellow Fool. I’ve said it in the past and I say it again to you now, Rule Breakers is a service not a product. Yes, we put together a paper newsletter and send it your way every month. That may look and feel like a product, but the truth is, we are orienting ourselves as best we can to give you a service that is interactive, electronic, responsive. A service that is about you, not us. Products are always about us. Companies that make them tend to mass manufacture the same thing and put it out on shelves or tables and fill the world with their product. But services are about you.

They are crafted to serve the customer, and not every customer wants or needs the same thing, particularly when it comes to financial advice. At Rule Breakers, we get questions every day from new members ranging from the very technical nanotech question to someone simply asking, which of the companies on the scorecard should I buy as a new subscriber? What you want to get out of this service is different from the next Motley Fool Rule breakers subscriber, just as what one Fool brings to the service is different from the next Fool. This Fool is here to ensure that we continually improve over time at delivering you a great service, and to me that starts with, well, a great place to start. To that end, we have launched a new discussion board online at Rule Breakers central titled simply start here. Just go to rule breakers.fool.com and find it in the tool box on the main page. I encourage you to bookmark that page particularly new subscribers, and I hope all breakers will make frequent use of it. One of our new staffers, the esteemed TMFBreakerDan, formerly BroadwayDan, will take time off from his real job as a TV in Hollywood script writer and he will welcome you, answer your questions, and guide you as you get started with our service. It’s probably worth noting that in a recent posting, Dan described himself as ” The TMF guy that tends to deal more with the amuse section of our mission statement, educate, amuse, rich, and perfect ”.

If Rule Breakers were merely a newsletter, there’d be no such thing as the start here discussion board. But Rule Breakers is a service we’re here to serve. Yes, we pride ourselves on serving up superior investment returns, which we expect most of our subscribers may appreciate. But we also pride ourselves on serving up superior help for all new comers and old comers and a great place to get started for all new subscribers is Rule Breakers start here. A final note this month. I hope you will take two minutes out to contribute to our philanthropy 2005 campaign. On November 16th, we will name five worthy charities that break the rules themselves, contribute to one or more of them by visiting www.philanthropy.com and you’ll feel great about giving well this holiday season. That is the end of the December 2005.

A service, not a product essay. One thing that I appreciate looking backward now, 18 years later, is that focus on serving. I hope if you’re a Motley Fool member, and I hope you are, I hope you still feel served that we are there to serve you, to think about you and your investment goals first, and to do our darnedest, our Foolish best to help you get there. I remember that I was reading back then, one of my favorite business books about marketing. If you’re a marketer or somebody who’s interested in entrepreneurship, I highly recommend selling the Invisible by Harry Beckwith. This is a wonderful, highly readable book. Each chapter is about a page long. Each page ends with a bolded assertion, a summary lined at the bottom. It’s a highly readable, fun book, but it’s really about service and service marketing. Because when you are selling a Tesla, you are selling something visible, something tangible, a product. When you are selling a stock pick or a Motley Fool service, you’re selling, in Harry Beckwith’s words, the invisible, you’re selling intangible, you’re selling trust, you’re selling hope you’re selling the best service that you can bring to your served members so that focus on serving, I hope you still find is right there at the heart of the Motley Fool 18 years later. Indeed, I will note that we have many more people serving in 2023 than we did back then.

In fact, I think it’s fair to say the size of our member services team today at the Motley Fool, which is somewhere between 50 and 100 people, when you start throwing in the techies and support that they get. That was probably about the size of our company when I was writing this particular essay. The intent to help is the same. We help in different ways over the course of time. I do want to highlight Dan Rubin, a great example of Foolishness. I mentioned him in that essay. I love to call out members of our team and investors and analysts. Of course, a big part of Rule Breaker investing the podcast is me regularly having on Motley Fool personalities like Bill Barker and Yasser El-Shimy playing the Market Cap Game Show with me just a couple of weeks ago. I’d love to feature our people. Dan Rubin is a great example of somebody who signed on as a Motley Fool member, but then began to volunteer for us and help and answer questions in our forums. Our forums do continue to this day. They’re not the same interface. They’re quite different in a lot of ways. But you can absolutely, as a Rule Breaker member, go right to the site and you’ll see the Community button in the upper right. Click it and the first thing you see is the category Rule Breakers. Just ask where you can ask questions, help desk questions, personal finance questions.

The interactivity of the Motley Fool has been important for me from our earliest days when we started on America Online forums for those who would remember what those are anyway, Dan Rubin, a really talented writer. In my experience, writers really shine on forums in the Internet. People who can make us smarter, happier, and richer through their written word continue to add a lot of value to our site every day. I also want to just call out at the end of that essay, the reference to philanthropy, which is what the Motley Fool used to do back in the day, a charity drive around the holidays each year. These days it’s been much more. Professionalized and scaled, we now have the Motley Fool Foundation. I hope you’ll visit us at foolfoundation.org to see the work we’re doing trying to create financial freedom for more people. Indeed, our vision one day is financial freedom for all. If you’re not familiar with the Motley Fool Foundation, there’s a quick advertisement. I hope you’ll click in and maybe give some time, treasure and talent, whether it’s in December of any given year, just weeks ago, or hey, here we are at the start of a new year with new resolutions and new possibilities.

I want to say before we go on to essay Number 2, that this was not the most interesting essay to read. It’s more about the nature of Motley Fool services. The next one is a big contrast with that, but it is worth noting that some of the focus of our writing and our efforts over time has just been to help members, especially newcomers, know how to use our services. I’d be remiss if I didn’t mention that any Motley Fool member, hearing me right now, can always 24 by 7 dial up our Motley Fool member services. If you have questions about how to use Motley Fool services, we’re there to help. But anyway, yes, sometimes I use that page one essay to do just that. Well, let’s strap our way back into the time machine. Again, we always go from earliest to latest. It’s time to proceed forward in time.

Here we are. Two years later, it’s December of 2007, and my essay, Dips, Wait for Dips. This was the introduction to the December 2007 issue of Motley Fool Rule Breakers. Of course, back then we thought of these as issues. We gave them months and yes, we were mailing them out to people. Much more of a traditional newsletter these days, again, our service is much more dynamic. We write a lot more on a monthly basis in Motley Fool Rule Breakers than we did with my Page 1 essay way back when. But since we’re way back when, let’s get started.

Dear fellow Fools, do you buy on Dips? Many investors do. But let me explain why I don’t. For starters, some of our stocks never really dip, or at least not for long. If you follow the logic, you’ll see that these are often our best performers, because after all, they never dipped. Which means that if you’re sitting back waiting for the dip, you’ll miss the sizzle. I prefer sizzle to dip. Look at our three best Rule Breakers picks so far in 2007, a Quantum Chipotle and Sigma designs, the three, two have dipped, but only briefly and only from well higher than where they were picked. Chipotle went from 90-80 in a two-week period in July, Sigma Designs fell from 60-52 in a few days in early November. If you’re a Dippy investor, I won’t call you a dip looking to dip your way into the Rule Breakers scorecard. You may not have bought our three best 2007 picks unless you were particularly lucky or adept. Let me say that again. If you insisted on buying on Dips, you very likely didn’t buy any of our three best stocks of 2007. Even if you did buy Chipotle at 80 or sigma at 52, you market timer, you guess what Rule Breakers recommended Chipotle at 60 and Sigma at 31. In other words, they were already up 33% or 67% by the time you perfectly timed your dip. I said I wouldn’t do that.

Sorry. By contrast, our three worst 2007 selections, Cineron Medical, Force Protection and Jones Soda, two of which come courtesy of yours truly have offered investors numerous dips on their ways to 30-40% declines. Thus the Dippy investor who looks for dips as precursors to buying, has now established positions in our three worst performing stocks. This is how people join services like Rule Breakers and stock advisor with wonderful winning scorecards and then wind up losing money and canceling their memberships. It’s not for me they say after missing all the winners and buying all the losers dips. I’ll stop. Let’s talk about the solution. How do I suggest approaching Rule Breakers or even investing in general? Make a commitment to the companies you want to own, not the stocks you’re going to buy on Dips. Be an investor, not a share price guesser. Once you’ve committed to plunking down a long-term investment in any of our stocks, buy it, all right then, which is what I usually do, or if you like, buy in thirds. But if you’re going to buy in thirds, please do it based on time, not share price moves. Tell yourself I’m going to establish a full position in the stock over the next quarter, so I’ll buy on the 15th each of the next three months. If you want to own many of our best stocks, this is the surest way. You’ll end up an Intuitive Surgical investor instead of just a dip Intuitive Surgical watcher. Fool on.

That was my essay, dips wait for dips. In fact, I love that line so much, I love the essay so much, I made it a great quote from volume 10 when I did great quotes volume 10, although I’ve since tweaked it from dips, buy on dips to dips, wait for dips and a brief explanation there. If you buy on a dip and it truly was a dip and it worked for you, I don’t want to criticize that. We all buy on dips, especially if we’re just dollar-cost averaging, investing steadily every two weeks or so and the market or a given stock goes down for a while, we did truly buy on a dip. That’s not something that I want to decry. I will decry though, and obviously, M in that essay, people who wait for dips, people who think the way to get started investing is to wait for a stock to go down or wait for the market to go down. History will show, statistics will show the market tends to go up over time, so waiting doesn’t make a lot of sense. I realize, especially if you’re new, it can be fearful to all of a sudden start investing.

But if you just space it out and invest patiently over time, every two weeks, or as I suggested, buying a full position in thirds, let’s say 1/3 each month, spaced out over a quarter, that’s a much easier way to toe, dip your way into investing period, or into a given stock, especially if you’re feeling some apprehension, so I wouldn’t say dips, buy on dips, which is what I once said, I would say Dips, wait for Dips. Indeed, I think it was a mailbag episode for this podcast years ago where somebody made that point, and I said I agree with you and I’m changing up my phrase, so I have once again the Motley Fool community, my fellow Rule Breakers, to thank for helping us hone our words and thoughts over the course of time. Well, I hope it was fairly persuasive to you that you should stay focused on regular investing and not, in my words, wait for dips. But the one other thing I want to reflect about that essay is the tale of Three Stocks. The three best Rule Breakers picks I mentioned in that episode, and what happened to them since. Before we go there, the three worst selections mentioned in that essay, Cineron, Medical Force Protection, and Jones Soda. You can look them up, I’m pretty sure those didn’t do very well. Indeed many in Motley Fool Rule Breaker pick over the years has been a loser, that’s something I don’t shy away from. It’s something with my venture capital mentality, that’s something that I think is how Rule Breaker investing works. You have to be willing to accept losers in order to get the great winners.

Let’s look at the three stocks that I mentioned as the winners in 2007. Let’s first look at Sigma designs. I’m sorry to say Sigma designs even though it had a great 2007, as I mentioned, that essay didn’t have a great history and ended up getting bought out 11 years later by Silicon Labs for a paltry sum less than $500 million, it was a very poor performer over time. Let’s next look at a quantive. Well, it was May of 2007 when I launched a contest at Motley Fool Rule Breakers. I said it out loud to the world at large, into our membership. I said there’s this new term I want to invent. It’s when a stock makes more money in one day than you paid for it way back when. When a stock’s daily gain exceeds your cost basis, I said, submit me a term, what should that be called, and over the course of several weeks, 300 different terms were nominated by our Rule Breakers membership, and I decided I loved the winning phrase. Ultimately, I chose Spiffy Pop. Spiffy-pop. Why? Well, because people talk all the time about how this or that stock popped. It’s very much a one day thing. Hey, do you think that stock might pop? Look at that stock, pop. But when a stock pops in a certain way, when it rises more in a single day than you paid for it with your cost basis, that should have a special term, so we revealed spiffy pop to the world on a Thursday.

A Thursday in May, and that very Friday, the very next day, a stock in the Rule Breakers service, Spiffy popped. It was like magic, and it was a quantive. The stock I’m talking about here was bought out by Microsoft, and just to put some clothes on it, we had purchased shares of a quantive for Motley Fool Rule breakers recommending it first, on December 20 of 2006, it was at $25.14 a share. So right around $25 a share, and as it turns out, just six months later on May 18, 2007, a quantive went from $35.87-$63.79. It went up 78% in a single day. That was quite a pop by any measure, thanks to Microsoft’s generosity, paying a huge premium for a quantave, the advertising data company. But since we’d only paid $25 a share for that stock to go up $27 a share in a single day, that day, the day after we invented the term, well, that was quite a spiffy pop. So just a little bit of Rule Breakers lore there for you. So a quantive ended up being a great winner, but very brief. Which leads me to the final stock mentioned in that essay, one that we have a long association with. I hope you noticed it. It was Chipotle, ticker symbol CMG. When I think about Chipotle, the first thing I think of is that we’ve bought and held the stock since January 17 of 2007. Again, this essay from yesterday was written at the end of 2007. Rick Munarz, the wonderful long running stock picking Fool that I’ve enjoyed so much over the years, both Rick’s writings at Fool.com, and his ongoing stock picking at Motley Fool Rule breakers.

Rick had picked Chipotle at $60 a share on January 17, 2007. Here’s a fun fact about Chipotle. You may know this if you’re a shareholder. The company has never once split it’s stock, so that cost basis of $60 in January 2007 can be now compared with Chipotle’s present perch where it trades for, well, when I last checked $2,305. It’s gone from 60 to over 2,300 in the nearly 17 years we’ve held it, that is a 38 bagger. Now, there are many dips, there always will be over the course of a 16 or 17 year association with any stock. Do you remember those health scares that Chipotle has had? It’s gotten bad, it had a change in CEO’s. There are reasons that the stock underperformed for multi year periods over these nearly 17 years, and yet at the heart of Rule Breaker investing, this involves finding great companies and sticking with them over time, so you could have bought all six of those stocks, several of them, losers, some quite bad. You would have enjoyed a magical spiffy pop with a quantive. You have enjoyed a spectacular investment with Chipotle, and indeed, Chipotle as we speak is trading at all time highs. It’s market cap these days, clocking in at about $63 billion. Yeah, perhaps some dips, dipped their way in at the right moment, here and there, but for most of the rest of us, we common Fools, Fools greater than sign dips, we’ve been rewarded simply by buying and holding and adding to this great company over the course of time, and as has also been true of so much of the investing I’ve seen in my life, one great winner wipes out all of your losers and leaves you with a lot of money still sitting on the table. If you just look at the six stocks in this essay, you see that happening once again. Back in our time machine from 2007 December, we moved to February 2010, and this was my page 1 for Motley Fool Stock Advisor, February of 2010. It had been a brutal couple of years for investors. That 2007 price we got for Chipotle skyrocketed. Do you remember the stock market if you were investing with me, dear fellow Fool? It had quite a 2007, 2008/9 one of the worst periods, not just in Motley Fool history, but in US stock market history. So here we find ourselves now in 2010, February. This is the first page of Motley Fool Stock Advisor.

Five years have passed since my brother Tom wrote his compelling November 2004 intro about “why he would win by when he meant beat his brother’s returns.” A month later in our December 2004 issue, I, David, writing this month took up his challenge and explained why I will win. Now five years later, I want to update my thoughts. First things first, five years later, I’m winning. With this issue I’m making my 96th consecutive monthly stock peak in Stock Advisor. Those 96 peaks average a mean return of plus 68%. By comparison, the S&P 596 monthly increments average only plus 2.9% over the exactly comparable periods. That means that Stock Advisor members, following my side of the scorecard, presently average outperforming the market, their S&P 500 index fund, if you will, by 65 percentage points per peak. Remember that many academic circles continue to avow that beating the market is not possible to do consistently, that outperformance is some combination of pure chance or statistical anomaly. I hope you don’t think so. I’ve never thought so. Before asserting a few reasons why I think I’m beating the market and my brother Tom check out Tom’s side of the scorecard. He’s also making his 96th consecutive monthly pick this month. They each average a gain of plus 42.8% way ahead of the averages. Make no mistake, Tom and team Tom are performing exceptionally. You can build a pretty good franchise or at least a portfolio off of his side of the scorecard alone. Five years later, Tom is now beating the market by almost 40 percentage points per pick. Yet our team, Dave Stocks are up 65 percentage points per pick. Modesty in admittedly short supply this month prevents me from calling that a blowout, we’re winning. But why? Well, return once again to that December 2004 intro I wrote.

Any member can all past issues are available to you via our archives. You’ll see me clearly describing my style based on “slugging percentage”, a concept I borrow from my beloved game of baseball. The aim is to earn multi bagger investments, investments that multiply numerous times from your original cost basis that, in my parlance, spiffy pop. In order to achieve this, you have to fulfill three conditions. One, find companies with unquantifiable greatness, a secret sauce edge. Two, ensure these companies benefit from undeniable long term trends, and three, get in early and don’t haggle on price. Those three tenants have guided us to outstanding performance. They are also the three rules laid out in our investing the Stock Advisor Way article, which was penned in August of last year and is mandatory reading for all members searchable on our site if you haven’t previously found it. Every day I find media outlets, fellow investors and professional analysts giving reasons to sell the market, get out, run for the hills or great individual stocks. It’s overvalued. It’s due for a breather. But the single greatest factor behind why I’m winning, winning a game that I hope will never end is simply that team Dave buys great stocks and we hold them. We may even add to them, we vary, infrequently exit them.

Happy New Year and good luck to all of us over the next five years. That is the end of the February 2010 essay. I’m glad I said happy New Year then, because that’s exactly what I’m saying to you now. Happy New Year. I’ll reiterate good luck to all of us over the next five years. Investors didn’t need much luck over those next five years. As bearish as many people were on the market as 2010 began, the next five years would end up being outstanding and both I in Rule Breakers, and then Tom and his team in stock advisor would just a couple of years later pick Tesla as a great example of a Rule Breaker stock and one that we’ve bought and held over more than 10 years now. Leading us again to just outstanding performance. Performance that wipes out many a bad pick along the way. The beauty of that essay to me is that it pretty succinctly conveys the three things that I’ve always been looking for in investing. Just to summarize, briefly, find companies with unquantifiable greatness.

That means they have something that you can’t quite express for example, if you have Elon Musk and we don’t, you have unquantifiable greatness. It’s hard to put exactly a number on the value of someone like Elon Musk. This comes by the way, from not a huge Musk fan boy. Somebody who is a fan, not a fan boy. Somebody who has some disagreements sometimes with what Elon has said or done. But if you look at the full record of his life and his creation of really great businesses that have gone on to do important and beautiful things in this world, Tesla being one example, you’ll see that that is unquantifiable. The greatness of a great CEO, a founding CEO. Number 2, ensure these companies benefit from undeniable long term trends. Thinking back to Intuitive Surgical, which is a great stock we’ve held for a long time in Motley Fool Rule Breakers which I referenced in that previous essay, Intuitive Surgical is by far and away the category leader for robotic surgery. That is, robots assisting humans. Humans using robots in order to perform surgery much better. Much faster, much safer, much more effectively with less invasiveness. Intuitive Surgical is one of those companies benefiting from undeniable long term trends in this case, robots, and technology assisting in healthcare. That is a great example of that second trade off and look for. Then third, get in early, and don’t haggle on price. As I wrote in the essay, get in early means, when you hear about something good, maybe buy a few shares. Get to know it over time and add to that position over time. I’ve never been first to any stock I’ve ever bought as a public market investor. The venture capitalists and private investors themselves got there before we ever did. But when I can quote for you, a 38 bagger like Chipotle or a 100 bagger like Tesla.

We’ve had a few others over the years. You know that we got in early as public market investors. Something that you can do too, but importantly, we’re also still holding these stocks. Most people who miss great investments like Apple and Amazon, which we have not, most people had them for a little while, maybe doubled their money and were satisfied or heard a friend or somebody on TV telling them they should sell, because the stock was high or the market was going down and they paid an incredible opportunity cost not holding those companies over time. That’s something that my brother Tom has been doing well from the very beginning. Something I’ve done well too. I think Tom is having some fun with the sibling rivalry, stirring the pot back there in 2004 to get members interested. I’m really happy to say both of us have substantially beaten the market over time. We’re not doing it for ourselves or each other, we’re doing it for you. That’s what Motley Fool services are trying to help the world do get smarter, happier, and yes, richer. Before we go to the final essay for this essays from yesterday, volume 5, I will reiterate, happy New Year, and good luck to all of us over the next five years. Well, one more trip of the time machine. We don’t have to go very far ahead for the final essay. Because six months later, in August of 2010, it was this Rule Breaker’s essay, your turn to keep score.

A new issue of Rule Breakers arrives in your email inbox or in your snail mail, if you can stand the wait, every month, bringing you two new stock ideas, five best buys now and more. Along with our weekly updates and discussion boards, that’s a lot of coverage about a lot of stocks. How are we doing? Well, our average Rule Breakers’ selection is up 22% and thrashing the S&P 500. We’re proud of our record, but that’s our scorecard. What about yours? You probably don’t buy every Rule Breakers stock as soon as we recommend it. If you do, we’d love to hear from you. Your portfolio’s mileage may vary, so it’s vital that you have a way to track and follow how you’re doing. That’s why we’re excited to unveil the newest Rule Breakers feature, My Scorecard.

My Scorecard is your personal portfolio dashboard. Just click the tab at the top of any page on our website to see what it’s all about. It’s the place to see your investments spread out before you, what you bought, when you bought, how much you paid, and how well you’re performing. Better yet, by entering your stocks into My Scorecard, you can streamline and customize the information you received from us. We’ll make sure you see the articles, updates, discussions, and other coverage about your stocks. You can use it to follow companies that aren’t Rule Breakers and even companies that are still on your watch list. We like to know which companies our members are interested in because that helps us focus our coverage and put the bulk of our efforts where they’ll best serve you. We think it will make Rule Breakers more responsive and relevant. We even think it can help us improve your investment returns. In other Foolish services where we’ve introduced My Scorecard, we see members rally around their favorite stocks. Often these are our favorites, too. But every once in a while, one falls through the cracks.

A company we think deserves a prime place in your portfolio, but that hasn’t caught many members eyes. If we see such a trend here, we can shed light on these overlooked breakers and keep you and your portfolio focused on our top stocks. We’ll even help you get started, and over-caffeinated smackdown is underway at Fool HQ between our own Green Mountain Coffee Roasters and Stock Advisors’ Starbucks. Now, if you own Green Mountain or even Starbucks, or if you’re just watching, enter the ticker into my scorecard and you’ll be eligible to win a free membership to Rule Breakers. Plus, watch the team’s trash talking videos and vote for which brew you think will win our taste test, and you could win a Keurig coffee maker. Get started with My Scorecard today and make our Rule Breakers yours. Fool on. Well, from August of 2010, now we return to the first week of 2024. By the way, thanks so much for suffering a Fool gladly. I’m delighted you spent some time with me this week, especially for new listeners. I’m here same time, Wednesdays or so, 4:00 PM Eastern, this podcast comes out every week. You can certainly subscribe to us, Spotify, Apple Podcasts, [Alphabet‘s] Google Play, etc., wherever you find podcasts, I’d love for you to click subscribe and join in. Well, the first thing I noticed from that essay is that I was celebrating beating the market with stocks that were averaging a 22% gain.

Motley Fool Rule Breakers started in October of 2004. We had a number of really good early stocks, we’ve talked about a few of them this week. But then 2008-09 happened and all so many of our gains got wiped away, but we were still showing positive gains of 22%. By the way, Rule Breakers started two years after Motley Fool Stock Advisor. So Motley Fool Stock Advisor had more time to compound to higher numbers. Anyway, 22% was still ahead of the market. I’m pretty sure the market was negative at that point. Again, we’d started about six years before. It’s frustrating to watch the S&P 500 be lower six years after you start investing. It was nice that our average stock was up 22%. Today, having just checked it, the average Motley Fool Rule Breaker stock is up 267%. So yes, things have gotten a lot better over time, and yet, of course, that includes not just all of our winners, but all of our losers too. More than double the S&P 500 across now, more than 400 stocks picked in Motley Fool Stock Advisor. I go strong to the hoop in that particular essay with My Scorecard, and I guess there’s a real emphasis again on service. The opening essay this week was about services, not products. It makes an important point, especially if you are in business or an entrepreneur yourself. Having a service mentality versus a product mentality, for me anyway, is a profound reframing for many business people.

But anyway, we started with the opening essay on services, not products, and here I was in this essay talking about serving, in this case, a new feature, My Scorecard, which, by the way, has been through a few different iterations over the years. Today, on the Motley Fool site, we have stocks for members, not just ones that you can add to a watch list, but we have them ranked. We have a lot of the Fool 500 quantified and ranked for paying members who can see at any given moment where various stocks are ranking. My brother, Tom Gardner, our CEO, and his team are working really hard, especially here in 2024 now with quants and machine learning to make your experience as a member, I hope, the best it’s ever been. My scorecard comes in different forms these days. I especially would like to point you to our app. If you didn’t know about this, the Motley Fool has a wonderful premium companion app for paying members. It’s right there on the App Store.

That’s another example of how you can track scorecard like your performance. Part of what I was doing that essay is I was hoping people would use the My Scorecard tool, as I mentioned in the essay, in part so we could get better data in terms of who cares about what stock. When you have dozens of stocks under coverage but not dozens and dozens of analysts to cover every single stock, you’re always left with trying to triage, deciding how best to deploy your talent. At that point, 2010, I was encouraging Rule Breaker members to let us know through My Scorecard what stocks they hold. That way we can start to tell our analysts focus on that stock because people care about that one more than those other stocks which people may not care as much about. Well, these days we don’t have to do that anymore because we have a lot more members and a lot more site data, both free members and paying members, a member base which generates a lot more data that we can use to make the best decisions we can to serve you in the way that you’d like to be served, following the stocks that you care most about and especially I know a lot of work is being done at Motley Fool Global Headquarters these days, especially this year, to make every member’s experience as helpful to you as possible so that you follow these stocks and not those should have a serving up content that is pertinent to you, that is specific to the stocks that you are using. I don’t think we could ever do that well enough, but we’re purposing toward doing that better and better to serve you. So yeah, that opening essay about services not products, it’s putting me in mind of TS Eliot’s great line, one of those famous lines from his Four Quartets, “In my beginning is my end.”

This is sort of an Alpha and Omega about service for this particular Essays From Yesterday edition. I also want to mention the fun at the end of that essay of Green Mountain Coffee Roasters, which was a Rule Breaker pick, and Starbucks, which was a Stock Advisor pick, and we were creating some online rivalry. It’s some of the hijinks and fun that we’ve had on our site since we launched on AOL in 1994 right through to 2024 here. Wow, yeah, 30 years later at Fool.com. Green Mountain Coffee Roasters, kind of like a quantive, was a big time winner that got bought out. Of course, Green Mountain Coffee Roasters was Keurig, which eventually got bought out by a private equity company. In the meantime, Starbucks is another one of those stocks that’s been a huge winner for me and many other Motley Fool members.

We’ve held that one for a long time, a multi-bagger. A reminder of the benefits of picking individual stocks, picking stocks with unquantifiable greatness, picking stocks not dipping into stocks, committing to regular savings, regular investment in the best companies of our time. Given that that essay was entitled Your Turn to Keep Score, I can’t leave without mentioning the importance, here we are at the start of another investment year, the importance of seeing how you’re doing of having a good score card, maybe one of your own design. It could be as simple as a spreadsheet or just noting the opening value of your portfolio as we start 2024 and where it closes at the end of the year. Comparing yourself to market averages that are relevant to you.

Keeping score makes us so much better. If we’re not keeping score, it’s hard to know if we’re winning or losing or by how much. Your turn to keep score was the heart of that essay that remains a critical, cardinal Motley Fool point. Well, there it was Essays From Yesterday Volume 5. Four essays, as always full of some, yeah, a few horrendous mistakes, but also some heartwarming and inspiring facts. All of these things happened, I’m sharing them in a fake news world, sometimes I’m sharing with you real stuff here that’s happened all the way through, and especially we’re having that opportunity together to reflect and take away some lessons from yesterday that we can use this week, this month, this year going forward. From the past then to the present and the future, this week, I will close by thank you for joining with me this week and wishing you again a happy new year and good luck to all of us over the next five years.