Reviewapalooza 2025

0:00We spend a lot of time thinking about how to grow and protect our money. But one convincing text, email, or fake website can put all of that at risk. Today's scams can look completely legitimate, even like your bank. And by the time an alert arrives, the money may already be gone. CoverOn is built for what happens before and after a scam. It monitors for exposed personal information, suspicious account activity, and changes to your credit. And when prevention isn't enough, CoverOn adds expert recovery support and financial protection for eligible losses. Instead of juggling separate privacy, identity, and security tools, you get a more complete layer of protection in one place.

0:49One scam can cost you everything. Protect yourself now. The first 100 users get 20 % off with code RULE20. That's RULE20 at coveron.com slash RULE20. One year ago this week, we wrapped our epic Review-A-Palooza Ultima, tallying the three-year scores for every one of my 35 stock samplers picked from 2015 to 2021. Well, now the calendar is ticked forward one year later. How have those picks continued to fare now with 12 more months on the clock? And what fresh lessons can we pry from their wins and whiffs? Let's take a quick victory lap, a few humbling detours, and of course, bank some new Rule Breaker insights.

1:41It's Reviewpalooza 2025 with 10 great lessons for Rule Breaker investors. only on this week's Rule Breaker Investing. It's the Rule Breaker Investing Podcast with Motley Fool co-founder David Gardner.

2:00And welcome back to Rule Breaker Investing. I don't listen to every one of my podcasts. In fact, I think I listen maybe to every seven or eight. Sometimes I'm on a drive somewhere and I'm like, what did it sound like last week? I did listen to last week's podcast. I hope you got a chance to do so as well because that really was one of my favorite podcasts in recent memory, to think about the Rule Breaker investing community, the Motley Fool community that we've built up over time, and you taking the time to share steps you've taken toward financial freedom. For you to share that out through this podcast with your stories and your inspirations really reminded me of why we do what we do at The Motley Fool.

2:40So nine phenomenal notes. Not a long podcast either. It was pretty breezy, but sharing your lessons, tips, and guidance for people, for really all of us. We all benefit when we hear any one of us take a step toward financial freedom. It might be a lesson personally applicable, or it might be something you can share with a friend or family member. So last week's podcast, What You've Done to Create Financial Freedom, Volume 3, pretty sure that's a bestie. Now, last year, the week after I did my Review of Palooza Ultima, where we looked back at the lessons learned from 35 stock samplers, 150 stocks picked over the course of seven years, watching them age together three plus years at a time.

3:27I brought it all together in a really special podcast a year ago this week. And if you want to go back and listen, I totally encourage it. It's Review of Palooza Ultima, 35 stock samplers in 10 and a half chapters. Well, as I said at the time, of course, I have all of those stock picks still in my spreadsheet, live updated with their performance, both individually as picks and then in aggregate for each sampler, and then an overall aggregate for all 35 stock samplers. And I check in with that spreadsheet at least once a week just to see how things have shaped up because the real game of investing is not a three-year game.

4:07The real game of investing is, well, let's call it more like a three-decade game. In fact, with The Motley Fool having just recently turned 32, we're now living the three-decade-plus approach. And as I look over that spreadsheet, I'm constantly enamored of the lessons we can learn together. And that's the focus of this podcast. I figured, you know, last year after the July 4th podcast, I did a review of Palooza podcast. Why wouldn't I do the same thing again this year? So looking up and down my spreadsheet at the 35 stock samplers, what 10 lessons can we learn together? Yep. 10 points, 10 lessons this week.

4:46But first, as I shared at the start of the year, my 2025 book, Rule Breaker Investing, is available for pre-order now. After 30 years of stock picking, this is my magnum opus. It's a lifetime of lessons distilled into one definitive guide. Each week until the book launches on September 16th, I'm sharing a random excerpt. We break open the book to a random page and I read a few sentences, so let's do it. Here's this week's Page Breaker Preview. just a few sentences from very early on in the book, and I quote, It took years for me to articulate what started as intuition and eventually evolved into this question.

5:28Why do the most esteemed investment books of the past often cause their readers to miss the best stocks of their own generation? I won't claim it's true of every revered book, but it's strikingly true for many end quote that's this week's page breaker preview to pre-order my final word on stock picking shaped by three decades of market crushing success just type rule breaker investing into amazon.com barnes and noble.com or wherever you shop for fine books and i want to mention if you're listening to this podcast on or around when it comes out wednesday July 9th, all week long, closing Friday, Barnes & Noble is giving 25 % off all books purchased at barnesandnoble.com.

6:15You do need to be a Barnes & Noble member. Membership is free. So if you're looking to get Rule Breaker Investing 25 % off, not bad timing for you. So I say without further ado, let's get started. Number one. Number one is looking at the overall numbers for the 35 stock samplers. So the first one ever picked, five stocks for the next five years, was picked on September 2nd of 2015. And the five stocks pursued by a bear was picked on June 16th, 2021. And those who followed this series over the years know that we typically scored them for three year periods. So my final review of that June 16th, 2021, five stocks pursued by a bear sampler was, of course, last June 2024.

7:05So as we finished out and reflected back on the overall performance of the 35 stock samplers, the average sampler was up 76.9%. and each one being compared against the market average, the market average 40.0 % for each of those three-year periods for each of those 35-stock samplers. So if you're following the numbers with me, basically we were up 76.9 % on average per sampler, beating the market by 36.9 percentage points because the market was up 40.0. And that's where it all closed down last year. Well, here we are now, one year later, The stock market has been very strong and the historical numbers have gone up pretty dramatically.

7:51And so for number one here, I'm going to be drawing a lesson for each of the points I'm making this week. But for number one, let's just do the numbers, then the lesson. So as we speak, the average performance of each of my 35 stock samplers is now up 242.1%. And the S &P 500, by comparison, is up 123.0%. And that's now looking over all of these samplers from the one picked 10 years ago to the one picked four years ago. When you average all those numbers, you end up with the average sampler beating the market by 119 percentage points, 242 to 123. And so I guess the lesson here for number one is rule breaker investing continues to win grandly.

8:38not just three plus years and counting, but I'd say 32 plus years and counting. So especially for people who are new to investing or may have been taught that it would just be luck to beat the stock market, everybody should just index. I hope your eyes are opening to the possibilities that can come to you when you're actually choiceful, when you decide to buy not all the stocks in an index fund, but the best stocks, the rule breakers. If you focus industry by industry on who are the innovators, what are the companies that meet the six traits of the rule breaker stock? And when you buy them and you act like a rule breaker investor, very different from the Wall Street crowd trading in and out of the market, when you act like a rule breaker investor with rule breaker stocks, meaning you hold them not just for three years, but 10, which is kind of our timeframe this week, you see the phenomenal returns that can come to you when you pursue this strategy.

9:36So the lesson, very simply for number one, is this works, it wins grandly, and I predict these numbers continue to go up, I hope, in an eye-popping way over the next decade. As I closed out each of the 35 stock samplers after it had completed its three-year tour of duty, I always pointed out that we're not selling these stocks just because the sampler is finished now. The gamification of my five stock samplers as three-year games, just because that three years was over, doesn't ever mean that we would sell the companies at that point. I just didn't want to keep tracking them forever, every week, weekend and week out.

10:13As I said, often, if all we did was review five stock samplers, we wouldn't do anything else on this podcast. But it is worth pointing out the incredible benefits that come from holding a decade plus. More to come on that point. All right, let's move to point number two. Point number two is looking over the 30 historically. When we closed it out last year, 19 of the 30 had beaten the market, which means 11 of the 35 stock samplers had lost to the market. And it's fun to note now a year later, some of the winners have become losers. And some of the losers have become winners. We'll talk a little bit more about that this week coming up.

10:51But But even with some changing of the guard, it ends up, as of today, of the 35 stock samplers, historically now, not just three-year periods, 19 of them are winning and 11 of them are losing to the market. Now, I hasten to add, we're just talking about beating the market, not whether you're making money overall. We'll talk more about that later, too. I've always focused my stock market picking and investing on beating the S &P 500. I say if you make a pick and it beats the S &P, you were accurate. You accurately forecast that stock would beat the market. And if you lose to the market with a pick, the language I've always used is you are inaccurate.

11:32And longtime rule breaker investors will know that the sixth habit of the rule breaker investor is to aim for 60 % accuracy. And what I mean by that is six times out of 10, you should be trying to beat the market on average. You're always going to have losers. We'll talk some more about that this week too. You're always going to have losers. Losing to win is one of my most important themes for the world at large, whether we're talking about investing, business, or life. You need to lose to win in this world, I believe. So get ready to lose as you build your own stock market portfolio because it's going to happen to you.

12:09But be aiming to be confident enough that you think you're going to beat the market the majority of the time. Don't speculate wildly, hoping to strike it rich with some crypto bro portfolio. Maybe that works for some, but I think for me anyway, as a rule breaker investor, focus solely on public market companies, on the stock market. I go in with a mentality, I've tried to share that with you over the years, to try to think you're going to beat the market with six out of 10 of your picks and pick accordingly. I think it's fun to pull the lesson here from point number two. The takeaway lesson is that's exactly what we ended up doing.

12:46Both as we closed down last year and reported that 19 out of the 30 had beaten the market. And now a year later, some of them have flip-flopped in terms of who's winning and who's losing. But once again, 63.3%, that's 19 out of 30, 63.3 % of these five-stock samplers are beating the market. And that is about 60 % accuracy. All right, on to number three. Number three is that the worst ever of my five-stock samplers was formerly five stocks for the coronavirus. This is a sampler I've talked a lot about over the years. It was the most dramatic winner we'd ever seen in its first year. I picked these stocks on April 8th of 2020.

13:28By April 8th of 2021, they had all more than doubled. And yet, as they expired and this five stocks for the coronavirus finished out in April of 2023, they were all dramatically down. In fact, on average, they were down 24%, but the market was up 49%, which means on average, these stocks were behind the market by 73.5 percentage points each of the five, and that's a really bad five-stock sampler, my worst ever. But as it turns out, I've done even worse now in the succeeding year here from 2024 to 2025. Five stocks for the coronavirus with its booby prize has now been exceeded, or maybe I should say undershot, by five stocks riding the bull market.

14:14A basket of five stocks I picked on June 21st of 2017. And now as I look at five stocks riding the bull market, I see that all five of them, unfortunately, have lost to the market, most of them dramatically. So not a single one of the five has been a winner. I presented them back in the day. I was having fun in reverse alphabetical order. Yeah, I wish I could reverse the performance of these stocks, but Zillow Group, Wayfair, Impinj. This was reverse order by ticker symbol. Impinj is PI, is a ticker symbol. Pegasystems, and then the worst of all, iRobot. Those five stocks picked in June of 2017.

14:54Here we are now, eight plus years later, and the best of them, Impinj, is up 114%, which sounds great, except that the S &P 500 over these eight years is up 155%. So Impinj, the best performer is 41 percentage points behind the market. The worst performer is iRobot, which I picked on that day in 2017 at$101.08. It's at$3.93 now, as I share that with you down 96%. And when you consider that the stock market itself is up 155%, that stock, that one stock on its own is behind the market by over 250 percentage points. So yeah, five stocks right in the bull market as a basket now, the worst five stock sampler ever.

15:42As a basket, they're up 6.1%, but again, the S &P 500 up 155.4%, and so they are on average behind the market by 149.4%. That's their average. Of course, some of them iRobot have done even worse, and one of them impinge even doubled, but that wasn't enough. The stock market on average doubles every seven years, so if you have a stock that doubled after eight years, you're probably behind the market. What's the lesson from this changeover from five stocks for the coronavirus being the worst ever to five stocks riding the bull market? Which, by the way, I was picking stocks that were at new highs as the stock market hit an all-time high.

16:27And unfortunately, I didn't pick a single significant winner. But to me, the lesson for number three here is stuff happens. Times change. And in fact, change is the only constant. Now, the good news is change worked against us here with number three, but let's now move to number four, where change has become our friend. Number four, the best ever performer has also changed over in the year we've just finished. When we finished out Review of Palooza Ultima last year, the best performer for its three-year period had been five stocks the world needs right now. I picked those on February 15th of 2017, and over just the three years that we tracked them from 2017 to 2020, that group of stocks was up 346.7%.

17:20That was against the S &P's 67%. So we basically beat the market 280 percentage points for each of those five stocks on average, an absolutely phenomenal performance. But now when you look at all 30 of these five-stock samplers and look at their full history, I did mention this, I think, on the podcast last week or the week before, the greatest performer has become five stocks for April the giraffe. There was something magical about the year 2017, I guess, because it contained my worst five-stock sampler ever, five stocks right in the bull market, which I picked in June of that year. But the one just before it, April 19th, 2017, five stocks for April the draft.

18:05Following the S &P 500 index from April of 2017 to today, it's up 165.8%. Really nice performance for the market over these eight years. My best five-stock sampler ever, five stocks for April the draft are up 928.2%, which is well over 700 percentage points on average per stock over the stock market's average. All of them are multi-baggers, but none has been better than Axon Enterprise. I will circle back to that stock a little while later. But I wanted to point out with point number four in the same way that we've had a changing of the guard in terms of what was the worst sampler and now what's the real worst sampler?

18:52Well, it's also true for the best sampler. Five stocks for April, the giraffe, Axon Enterprise, Grupo Aeroportuario del Pacifico, ResMed, Intuitive Surgical, and Live Nation Entertainment. As a basket, five stocks, a 10-bagger. In fact, more than a 10 bagger here eight years later. What's the lesson number four? Well, it sounds a lot like number three. Stuff happens, times change. But asterisk, because when you let your winners run past just the three-year game played by most of my five-stock samplers, if you invest more like not for three years, but for three decades, look what happens. One of my favorite watchwords as an investor, I've put this out infinite times before on this podcast.

19:40You'll read this one in my upcoming book, of course, because it's one of my favorite lines. Stocks always go down faster than they go up, but they always go up more than they go down. And you have to hold both of those thoughts in mind as a rule breaker investor. And you really can't do too much on the upside in just three years, can you? Again, when stocks tend to drop faster than they rise in a three-year period, which is what each of these five-stock samplers was pretty much picked for, you can have some big winners, but even just a single stock getting cut in half could really sideline that whole five-stock sampler.

20:18But if you let those five-stock samplers go, not just for three years, but more like 10 years, you start to see the eye-popping benefits of rule number one, let your winners run high. The eye-popping benefits of Rule Breaker Investing become increasingly clear if you just give it time. Keep in mind, so much of the world does not give itself time. The average mutual fund, managed mutual fund today, trades largely out of everything it held at the start of the year. From one year to the next, from January 1st to December 31st, you don't really recognize the stocks at the end of the year that were in that fund at the start of the year.

20:59We give away so much of our advantage as investors when we allow mutual funds and institutions to run our money like that. We do so much better for ourselves when we can find companies and just hold them over time. And I think maybe my favorite lesson of all from these five-stock samplers, and it just gets better with every passing year, is the eye-popping benefits of allowing time to be your friend as an investor. So there we are, points number three and four. The worst ever changed up and the best ever changed up as well, and yet the lessons remain largely the same. Let's go on to number five.

21:37Number five is a quick one. It's kind of fun to note that over the course of these 35 stock samplers, how many of them actually lost money? The answer is two. So good news for people who think stocks are risky and you wouldn't want to be too invested in the stock market, which I think a lot of people feel. Of course, I completely disagree. I think most of us at The Motley Fool completely disagree. Assuming you're giving it time, the chances of you actually losing money are pretty low. And only two of the 30 five-stock samplers now to date, looking over the full history of them, the spreadsheet I'm looking at, only two of them have actually lost money.

22:15For the record, here they are. Five stocks for the age of miracles, basically a biotechnology technology five-stock sampler picked in 2019, down 11.1 % with the market up over 100%. So a huge loser. And then the other one that has lost money so far anyway, was the third to last one picked in January of 2021, five stocks, get this, remember this one, five stocks rolled up at random. That basket of five stocks down 28.9 % with the market up about 60 percentage points. Again, a really big loser to the market averages. But overall, looking at all 30 of these, 28 of them, including nine underperformers, nine losing samplers, have all still made money on average.

23:04And I think the lesson here is that's usually what's going to happen if you make a commitment to invest in the stock market. Do it along with me your whole life long. I don't make a point ever of jumping in and out of the market. I got started at the age of 18, although I was accelerated by a dad who started investing for me at the age of zero and then turned over what he'd made for me when I turned 18. I've been invested my whole life long. I'm going to be invested my whole life long. I think the right mentality, I hope you have this too, I hope you're spreading this to your friends and family, is to invest for your whole life long.

23:38The chances of you actually losing money are almost nil over any long-term period. Maybe one side lesson here before we move on to number six is look at the two that have actually lost money. Look at their names or what I was purposing with both of them. Five Stocks for the Age of Miracles. It was one of the riskier ones I'd tried because it was all biotechnology stocks. And I'm sorry to say, one of them basically went to zero. Bluebird Bio went from$68 to$0.06. And one of them, Vertex Pharmaceuticals, has more than doubled and beaten the market. But for the most part, these were really disappointing performers in a very volatile, riskier industry.

24:21So that was one of them. The other one had me just randomizing up and down the universe of stocks I'd picked and just picking five of them, again, largely at random. That's why it was called five stocks rolled up at random. And rolling dice didn't work out for me so well. So a side lesson here for number five is usually when you're really consciously being speculative, at least in my own experience, and it's borne out here by the numbers. Usually when you're feeling speculative, you're rolling the dice, you're picking biotechs, usually for me anyway, it hasn't worked well. It's when you have that 60 % confidence investing in things that are within your circle of competence, as Warren Buffett would say, that you're probably going to do best and you should probably keep your money inside that same circle of competence as well.

25:08When I'm picking all biotech or rolling dice, I'm investing a little bit outside that circle. I like to have fun. And as I discussed with Rick Engdahl last month for his final podcast and my wonderful conversation with him, a lot of us are gamers. I certainly am too. So I don't mind taking risk and I also don't mind losing. And it's ironic to me or perhaps not ironic at all, maybe predictable that the two that have lost look like the two that probably relative to the others were more likely to lose. Let's move on to number six. All right, number six is just to highlight the mega winners. I'm just going to call out three companies that were really, at this point anyway, the very best stocks I ever picked in our seven years of five stock samplers.

25:54The first one I'm going to mention is Mercado Libre. When I picked five stocks to feed the bear in February of 2016, I'm really glad I included Mercado Libre, ticker symbol M-E-L-I, in that list because Mercado Libre is a 28 bagger over the succeeding nine years, obviously powering five stocks to feed the bear as a sampler to dramatic wins. because anytime in a group of five stocks, one of them goes up 28 times in value, you're guaranteed to have a market beater and usually a market crusher. That's also true of five stocks that will let you eat cake, which I picked in November of 2017. And I'm really happy to say included in that five stock sampler was NVIDIA.

26:39And NVIDIA, ticker symbol NVDA, is up 29 times in value, helping power five stocks that will let you eat cake to similarly dramatic wins that that five stock sampler is a basket is up 635 percent basically 500 percentage points ahead of the s &p 500 thank you nvidia and jensen wong and the single best stock to date ever picked in those five stock samplers was picked for april the draft the date was april 19th 2017 and axon Enterprise was the A stock. Five stocks for April to draft each of the five stocks, the first letter, their ticker symbol spelled out April. So my A stock, and I'm going to give it an A plus, was Axon Enterprise now up 35 times in value since.

27:28We spend a lot of time thinking about how to grow and protect our money. But one convincing text, email, or fake website can and put all of that at risk. Today's scams can look completely legitimate, even like your bank. And by the time an alert arrives, the money may already be gone. CoverOn is built for what happens before and after a scam. It monitors for exposed personal information, suspicious account activity, and changes to your credit. And when prevention isn't enough, CoverOn adds expert recovery support and financial protection for eligible losses. Instead of juggling separate privacy, identity, and security tools, you get a more complete layer of protection in one place.

28:17One scam can cost you everything. Protect yourself now. The first 100 users get 20 % off with code RULE20. That's RULE20 at CoverOn.com slash RULE20. Before I give the lesson here for number six, some curios, some fun with math we can do. You know, NVIDIA, which, as I mentioned, has been a 29 bagger for five stocks that will let you eat cake. When we closed it out three years later, we closed that out in November of 2020, NVIDIA was up 144%. It had been dramatically outperformed by another stock in that five stock sampler, Match Group. Match.com, the dating site, Match Group was up 423%. as we closed it out three years later.